Value for Society versus Economic Value

As I read about the smallest banking trojan in circulation, I was pleased that I will soon be converting one of our neighbours to Linux. I managed to fix her Windows problem. I also installed the open source Clam anti-virus after removing a commercial product which kept scaring and nagging her to pay for renewal.

However, she said that she wanted me to install Linux on her free partition as I had mentioned that I have never needed to use an anti-virus software!

The entire anti-virus industry would not have appeared had it not been for Windows. Obviously a loss to the economy, but would it have been a loss to the society?

Since I do not have to make effort to make money, I can spend my time learning. Thanks to open source, I can, without having to spend anything over and above my internet connection, learn OpenStack, Hadoop, Zotonic(an Erlang based Web framework), and whatever my mind decides is exciting or useful to know this week or month! My experimentation does not add any value to the economy. I like to think that the open source universe does add value to the society as it makes it possible for anyone to learn.

There is little doubt that windows has created a lot of economic wealth. I am not so sure it would be even a fraction of the social wealth created by Linux and open source software. That is, if we could find a way to measure social wealth! E.g. see or read "The Clothesline Paradox" though I would like to think that we can find a way to measure wealth without resorting to money.

Irony of paying less tax for making money from money by doing nothing

As I get older, I would have expected to become more conservative. Instead, I am more likely to be upset by Arun Jaitley promises more income tax relief if economy improves and discussions on tv where it is taken for granted that India has a high rate of taxation, which needs to be brought down. Rare left wing economists talking about the low tax to gdp ratio are brushed aside.

I find it ironic that I pay less tax now thanks to a major part of my earnings coming from divindends in mutual funds than I did when I worked 9 to 5. What is  so special about earning money from money?

In fact, the government takes a 20+% on dividends of non-equity funds, which benefits the richer people far more than people like me.

I suppose, the motivation is supposed to be an incentive for people to invest, but what will I or any person with surplus money do? Can't be kept under a mattress. People like me may put it in the bank instead but the motivation for investing in equity funds is hardly the low tax rate. It is the gambling instinct of riding a bull run :)

No one starts a factory in the hope of paying low tax on profits! Yes, the richer people can move the money to other countries. I would say let them. How much can Cayman Islands and other tax havens consume?

Since I was not going to get a government pension, it was obvious that I needed to save and not spend. However, if the government taxed me more but had a negative income tax for my old age, would it have mattered?

We need to worry about what will happen as we can't stop the following from happening - "Hi, I’m a tablet. I’ll be your waiter tonight".

As a consumer(in US), I do not want to pay the waiter 15% or more tip. I do not want to feel guilty about not paying the tip because the person is probably being paid a minimum wage. As a consumer in India, I am immune to the treatment of such workers in Udipi-like joints. I have learnt to close our eyes as the alternate would make me far too aware of my own incompetence and helplessness and make it impossible to eat out (or do anything) at inexpensive places. Even in the US, I wonder what are the earnings of fast food joint workers but they were supposed to be students working part time to supplement their pocket money.

We need to re-think the importance of money - investments increasingly no longer imply wealth for the society but only for some individuals in the society.

I recall reading a comment. There will be no shortage of things to do for humans in future. The issue is whether they will be paid for it. No one can deny the importance of raising children and the effort involved in it. Today, does the society pay a mother (or father) who has chosen to stay at home for this task beyond the maternity leave?

UPDATE: Longer holding, higher tax takes sheen off debt funds
Better, but wouldn't it be simpler to just treat it as interest from bank deposits no matter what the duration? No special treatment and treat dividend distribution tax as "tax deducted at source" to be treated like any other income.

While at it, do the same for equity funds.

I wish the exercise of increasing capital gains tax was philosophical rather than just a way to collect more tax.

Goa as a location for a first University Town

I have long felt that Goa could be a great place for education in India. Goa University campus location is beautiful and valuable. That makes it possible to consider creating a new University Town with little monetary burden on the government.

The location of Goa University in Taleigaon is "prime real estate". It would be wonderful if the University could sell the land and shift the campus to a common location with Goa Engineering College. Goa Institute of Management could also shift as it is in a cramped location.

Given the irrationality of real estate valuations, the money from Taleigaon would be more than enough to build a new campus with a lot of surplus. I would not be surprised if the income from the surplus may ensure that Goa University will never need any funding from Government for its operating costs.

University should have undergraduate courses on the campus as well, making it possible to seed a University Town quickly. Admission for students from out of state should be encouraged.

The infrastructure should ensure a very comfortable lifestyle for the faculty, students and researchers. Within a few years, it may be possible to get insights into whether such a model can succeed and sustain itself.

More EPS fine provided the employees can opt out into NPS

News items like EPS-95: Rs 1,000 monthly pension, 28 lakh to benefit really upset me. I realised the scope of this scheme only on retirement! This is a scheme which sought to give private sector similar benefits as central government pension (discontinued for new employees as it is a financial burden for the government -  actually, the current tax payers). The scheme is subject to some arbitrary constraints which make it viable at the expense of the better off. Charge higher taxes but don't cross-subsidize in a non-transparent manner.

I had assumed that I was not a member of EPS because I had not opted for it when it came out. I did not realise that my option was not valid or relevant after I had changed my job and moved from the company managed fund to the government managed one.

From the same news item(emphasis mine):

At present, workers whose basic wage at the time of joining is up to Rs 6,500 per month, including basic pay and dearness allowance, can be subscribers of the EPFO schemes.

This is news to me. The companies always me the impression that membership to EPFO was mandatory. Given a choice, even PPF would have been preferable. And these days, NPS would most likely be the preferred option for anyone earning more than the EPFO limits.

I suspect the limit has been increased to make the operation of EPFO/EPS temporarily solvent and postpone the actual financial problems of the organisation to the next generation.

New IIM's and IIT's - why not University Towns

As I sat passively listening to various post budget discussions on Rajya Sabha and Lok Sabha TV, one commentator struck a chord. It is fine to build new IIT's but without quality faculty, mediocrity will prevail. And why would well qualified people go to remote places?

In another discussion, one commentator, I believe an expert in economics, was asked about jobless growth. He ridiculed it and said that there was no such thing. You cannot have growth without jobs. It blew my mind. I wanted someone to question that comment but no one did. It is not just a problem of the rich countries with software eating jobs.



The government wants to create new IIT's, IIM's and urban centers of excellence. Nothing wrong with the idea itself.

So, what if instead of creating each institution in a separate place, the government creates university towns starting with a student population of 10,000 plus. Obviously, Berkeley and numerous small but well known towns in the US come to mind. However, our visit to Manipal had been a remarkably pleasant experience. Now one can even point to the CEO's of Microsoft and Nokia and suggest that Manipal may be an example worth emulating.

A university town ensures that academic and student populations of diverse disciplines interact and learn from each other and not just what is taught in classrooms. The size of IIT, Kanpur assured that there was just one restaurant, I think called Red Rose. It was dark & dingy and I saw rats running around. (I spent a year as a postdoc at IIT,K). An adequate student population ensures a lively, vibrant environment. These are fun environments for faculty and families as well.

The best way to prepare for the future is to learn and not based on the jobs available today, which is why I had thought that the Delhi university four year program was a worthwhile experiment. University towns may instead be tremendous opportunities for the young Indians.

Personal Experience:
Ropar is not all that remote just an hour's drive from Chandigarh. Yet, the IIT Ropar has a problem attracting faculty, at least in Computer Science. I enjoyed being able to experiment with content and style of teaching unlike in a traditional engineering college. Although I was not very happy with the outcomes, I was ready to try another experiment based on this video of Eric Mazur. However, the desire to experiment and see if students would learn better was not enough compensation to drive an hour each way for even three days a week.

Build one in Goa

Incomprehensible Customer Service

One more bank tries to make me happy :)

"Happiness lies in the joy of achievement and the thrill of creative effort." - Franklin D. Roosevelt

I found that I could not carry out online transactions.

I had recently disabled sms alerts as it bothered me that they started deducting quarterly for SMS alerts without any intimation. From the branch, I came to know that the procedure for getting rid of SMS alerts is to delete the mobile number!

So, online transactions need me to enter a number sent to a mobile phone, which never reaches me as there is no mobile number! Ah, the system assumes that the phone number exists and no need to check.

I had to call the call center about a solution to this dilemma. How to carry out online transactions without subscribing to sms alerts?

It took a while for the call center employee to appreciate my predicament. The complaint is registered and I got a complaint number. Then came the solution which was beyond anything I could have imagined.

"Call back after 7 days. Tell your complaint number and we will let you know what the solution is".

I suggested that the call center can send me an email - they do not have that facility.

Simply amazing.

I would definitely achieve happiness if I succeed. I have already made a lot of effort. I will have to make some more effort and I am sure, I will need of creativity to get around their system :)

Oh, the site has an email option and, now, even a grievance monitoring option. So far my experience indicates that these services are connected to a black hole. I have never got even an automated acknowledgement.

Little things - from Rickshaws to Hyderabad Blues

1. From my  childhood, I have been reading about improving the lot of the rickshaw pullers by improving the rickshaws. And now this hi-tek version :) Not have driven a rickshaw, I am not sure if there has been any significant improvement; however, I doubt if any of them is made using lightweight composite materials or even aluminium. We are probably too poor to use such technology.
   
2. Then there was this news of insistence on loudspeakers which reminded me of the last scene of Hyderabad Blues! I suppose most people implicitly realise that its the neighbours who matter as god probably does not exist or doesn't really care.
   
3. Then there was the bank official who said that there was no connectivity. The passbooks printed so I went back to him and said that it has now come. Then, he said that it will take time, come back in the afternoon. Why can't I just get a pdf online :( But then I would not have any sense of achievement - so, thanks, bank officer.
   
4. I improved my mood by stopping at a pedestrian crossing and letting the people pass. It is amusing to see the bewildered faces of people when I indicate to them to continue crossing :) By the way, I had made sure that there was no vehicle behind me before stopping.