Tuesday, August 23, 2005

Neo-Economics

Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over $100 billions, that is Rs.5 lakh crores. Yet Japanese economy is considered weak, even collapsing.

Americans spend, save little. Also US imports more than it exports. Has an annual trade deficit of over $400 billions, that is over Rs.20 lakh crores. Yet, the American economy is considered strong and trusted to get stronger.

Indeed a contrast.

But where from do Americans get money to spend? They borrow from Japan, China and even India. Virtually others save for US to spend. Global savings are mostly invested in US, in dollars. India itself keeps its foreign currency assets of over $50 billions in US securities. China has sunk over $160 billion in US securities. Japan's stakes in US securities is in trillions. Result. The US has taken over $5 trillion from the world. Want to know it in rupees? Rs.2,50,000 crore crores! So, as the world saves for US, Americans spend freely. Today, to keep the US consumption going, that is for the US economy to work, other countries have to remit $180 billion every quarter, that is $2 billion a day, to the US! Otherwise the US economy would go for a six. So will the global economy.

The result will be no different if A Chinese economist asked a neat question. Who has invested more, US in China, or China in US? The US has invested in China less than half of what China has invested in US. The same is the case with us. We have invested in US over $50 billion. But the US has invested less than $20 billion in India.

Why the world is after US?

The secret lies in the American spend, in that they hardly save. In fact they use their credit cards to spend their future income. That the US spends is what makes it attractive to export to the US. So, US imports more than what it exports year after year.
The result. The world is dependent on US consumption for its growth. By its deepening culture of consumption, the US has habituated the world to feed on US consumption. But as the US needs money to finance its consumption, the world provides the money. It's like a shopkeeper providing the money to a customer so that the customer keeps buying from the shop. The customer will not buy, the shop won't have business, unless the shopkeeper funds him. The US is like the lucky customer. And the world is like the helpless shopkeeper financier.
Who is America's biggest shopkeeper financier?

Japan. Yet it is Japan, which is regarded as weak. Modern economists complain that Japanese do not spend, so they do not grow. To force the Japanese to spend, the Japanese government exerted itself. Reduced the savings rates, even charged the savers. Even then the Japanese did not spend. They're traditional postal savings alone is over $1.2trillion. that is. Rs.60 lakh crores, about three times the GDP of India. Thus, savings, far from being the strength of Japan, has become its pain.

What is the lesson? That is, a nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend. Dr. Jagdish Bhagwati, the famous Indain-born economist in the US, told Dr. Manmohan Singh that Indians wastefully save. Ask them to spend, he said. On imported cars and, seriously, even on cosmetics! This, he counseled, will put India on a growth curve. But like Japanese we too are not obliging.

Modernists may not, but one who has read the Mahabharatha will, know. A Rishi by name Charuvaka gave the same advice when Pandavas were around, which modern economists are giving today. He told the people to spend and be happy, if need be by borrowing. No need to repay, if you cannot, he counseled. No sin would attach, he assured. Fortunately his advice was rejected by us thousands of years back. That is why perhaps we are alive as a nation. Our old companions are in archives today. Now we have the very same advice. That is saving as sin, and spending as virtue. This is central to neo-economics.

Caution. Before you follow these Neo-Charuvakas, get some fools to save so that you can borrow from them and spend, after you exhaust your savings. This is what US has successfully done in last two decades.

Monday, August 22, 2005

Gender Discrimination

An angry letter from a young lady made JRD Tata change his rule.
THERE are two photographs that hang on my office wall. Everyday when I enter my office I look at them before starting my day. They are pictures of two old people. One is of a gentleman in a blue suit and the other is a black and white image of a man with dreamy eyes and a white beard. People have often asked me if the people in the photographs are related to me. Some have even asked me, "Is this black and white photo that of a Sufi saint or a religious Guru?" I smile and reply "No, nor are they related to me. These people made an impact on my life. I am grateful to them." "Who are they?" "The man in the blue suit is Bharat Ratna JRD Tata and the black and white photo is of Jamsedji Tata." "But why do you have them in your office?"" You can call it gratitude."Then, invariably, I have to tell the person the following story. It was a long time ago. I was young and bright, bold and idealistic. I was in the final year of my Master's course in Computer Science at the Indian Institute of Science (IISc) in Bangalore, then known as the Tata Institute. Life was full of fun and joy. I did not know what helplessness or injustice meant.

It was probably the April of 1974. Bangalore was getting warm and gulmohars were blooming at the IISc campus. I was the only girl in my postgraduate department and was staying at the ladies' hostel. Other girls were pursuing research in different departments of Science. I was looking forward to going abroad to complete a doctorate in computer science. I had been offered scholarships from Universities in the US. I had not thought of taking up a job in India. One day, while on the way to my hostel from our lecture-hall complex, I saw an advertisement on the notice board. It was a standard job-requirement notice from the famous automobile company Telco (now Tata Motors). It stated that the company required young, bright engineers, hardworking and with an excellent academic background, etc.At the bottom was a small line: "Lady candidates need not apply." I read it and was very upset. For the first time in my life I was up against gender discrimination.Though I was not keen on taking up the job, I saw it as a challenge. I had done extremely well in academics, better than most of my male peers. Little did I know then that in real life academic excellence is not enough to be successful.After reading the notice I went fuming to my room. I decided to inform the topmost person in Telco's management about the injustice the company was perpetrating. I got a postcard and started to write, but there was a problem: I did not know who headed Telco. I thought it must be one of the Tatas. I knew JRD Tata was the head of the Tata Group; I had seen his pictures in newspapers (actually, Sumant Moolgaokar was the company's chairman then).I took the card, addressed it to JRD and started writing.

To this day I remember clearly what I wrote. "The great Tatas have always been pioneers. They are the people who started the basic infrastructure industries in India, such as iron and steel, chemicals, textiles and locomotives. They have cared for higher education in India, such as iron and steel, chemicals, textiles and locomotives. They have cared for higher education in India since 1900 and they were responsible for the establishment of the Indian Institute of Science. Fortunately, I study there. But I am surprised how a company such as Telco is discriminating on the basis of gender."I posted the letter and forgot about it. Less than 10 days later, I received a telegram stating that I had to appear for an interview at Telco's Pune facility at the company's expense. I was taken aback by the telegram. My hostel mated told me I should use the opportunity to go to Pune free of cost and buy them the famous Pune saris for cheap! I collected Rs 30 each from everyone who wanted a sari.

When I look back, I feel like laughing at the reasons for my going, but back then they seemed good enough to make the trip.It was my first visit to Pune and I immediately fell in love with the city. To this day it remains dear to me. I feel as much at home in Pune as I do in Hubli, my hometown. The place changed my life in so many ways.As directed, I went to Telco's Pimpri office for the interview. There were six people on the panel and I realised then that this was serious business. "This is the girl who wrote to JRD," I heard somebody whisper as soon as I entered the room. By then I knew for sure that I would not get the job. The realisation abolished all fear from my mind, so I was rather cool while the interview was being conducted.

Even before the interview started, I reckoned the panel was biased, so I told them, rather impolitely, "I hope this is only a technical interview." They were taken aback by my rudeness, and even today I am ashamed about my attitude.The panel asked me technical questions and I answered all of them. Then an elderly gentleman with an affectionate voice told me, "Do you know why we said lady candidates need not apply? The reason is that we have never employed any ladies on the shop floor. This is not a co-ed college; this is a factory. When it comes to academics, you are a first ranker throughout. We appreciate that, but people like you should work in research laboratories."

I was a young girl from small-town Hubli. My world had been a limited place. I did not know the ways of large corporate houses and their difficulties, so I answered, "But you must start somewhere, otherwise no woman will ever be able to work in your factories."Finally, after a long interview, I was told I had been successful. So this was what the future had in store for me.

Never had I thought I would take up a job in Pune. I met a shy young man from Karnataka there, we became good friends and we got married.It was only after joining Telco that I realised who JRD was: the uncrowned king of Indian industry. Now I was scared, but I did not get to meet him till I was transferred to Bombay.

One day I had to show some reports to Mr Moolgaokar, our chairman, who we all knew as SM. I was in his office on the first floor of Bombay House (the Tata headquarters) when, suddenly JRD walked in. That was the first time I saw "appro JRD". Appro means "our" in Gujarati. This was the affectionate term by which people at Bombay House called him.I was feeling very nervous, remembering my postcard episode. SM introduced me nicely, "Jeh (that's what his close associates called him), this young woman is an engineer and that too a postgraduate. She is the first woman to work on the Telco shop floor." JRD looked at me. I was praying he would not ask me any questions about my interview (or the postcard that preceded it). Thankfully, he didn't. Instead, he remarked. "It is nice that girls are getting into engineering in our country. By the way, what is your name?" "When I joined Telco I was Sudha Kulkarni, Sir," I replied. "Now I am Sudha Murthy." He smiled and kindly smile and started a discussion with SM. As for me, I almost ran out of the room.

After that I used to see JRD on and off. He was the Tata Group chairman and I was merely an engineer. There was nothing that we had in common. I was in awe of him.One day I was waiting for Murthy, my husband, to pick me up after office hours. To my surprise I saw JRD standing next to me. I did not know how to react. Yet again I started worrying about that postcard. Looking back, I realise JRD had forgotten about it. It must have been a small incident for him, but not so for me."Young lady, why are you here?" he asked. "Office time is over." I said, "Sir, I'm waiting for my husband to come and pick me up." JRD said, "It is getting dark and there's no one in the corridor. I'll wait with you till your husband comes." I was quite used to waiting for Murthy, but having JRD waiting alongside made me extremely uncomfortable.I was nervous. Out of the corner of my eye I looked at him. He wore a simple white pant and shirt. He was old, yet his face was glowing. There wasn't any air of superiority about him. I was thinking, "Look at this person. He is a chairman, a well-respected man in our country and he is waiting for the sake of an ordinary employee."Then I saw Murthy and I rushed out. JRD called and said, "Young lady, tell your husband never to make his wife wait again."

In 1982 I had to resign from my job at Telco. I was reluctant to go, but I really did not have a choice. I was coming down the steps of Bombay House after wrapping up my final settlement when I saw JRD coming up. He was absorbed in thought. I wanted to say goodbye to him, so I stopped. He saw me and paused.Gently, he said, "So what are you doing, Mrs Kulkarni?" (That was the way he always addressed me.) "Sir, I am leaving Telco." "Where are you going?" he asked. "Pune, Sir. My husband is starting a company called Infosys and I'm shifting to Pune." "Oh! And what will you do when you are successful." "Sir, I don't know whether we will be successful." "Never start with diffidence," he advised me. "Always start with confidence. When you are successful you must give back to society. Society gives us so much; we must reciprocate. I wish you all the best."Then JRD continued walking up the stairs. I stood there for what seemed like a millennium. That was the last time I saw him alive.

Many years later I met Ratan Tata in the same Bombay House, occupying the chair JRD once did. I told him of my many sweet memories of working with Telco. Later, he wrote to me, "It was nice hearing about Jeh from you. The sad part is that he's not alive to see you today."I consider JRD a great man because, despite being an extremely busy person, he valued one postcard written by a young girl seeking justice. He must have received thousands of letters everyday. He could have thrown mine away, but he didn't do that. He respected the intentions of that unknown girl, who had neither influence nor money, and gave her an opportunity in his company. He did not merely give her a job; he changed her life and mindset forever.

Close to 50 per cent of the students in today's engineering colleges are girls. And there are women on the shop floor in many industry segments.I see these changes and I think of JRD. If at all time stops and asks me what I want from life, I would say I wish JRD were alive today to see how the company we started has grown. He would have enjoyed it wholeheartedly.My love and respect for the House of Tata remains undiminished by the passage of time. I always looked up to JRD. I saw him as a role model for his simplicity, his generosity, his kindness and the care he took of his employees. Those blue eyes always reminded me of the sky; they had the same vastness and magnificence.

Sudha Murthy was livid when a job advertisement posted by a Tata company at the institution where she was completing her post graduation stated that "Lady candidates need not apply". She dashed off a post card to JRD Tata, protesting against the discrimination. Following this, Mrs Murthy was called for an interview and she became the first female engineer to work on the shop floor at Telco (now Tata Motors). It was the beginning of an association that would change her life in more ways than one.

Article sourced from: Lasting Legacies (Tata Review- Special Commemorative Issue 2004), brought out by the house of Tatas to commemorate the 100th birth anniversary of JRD Tata on July 29, 2004