Friday, August 19, 2011

Insider Trading - Regulations for People in Power

How do politicians in power and babus make money. They simply ask for it in return for favors!! So what's new, everyone knows that. Well, these guys have figured out a new modus operandi for making BIG bucks, (as if the existing ways were not enough!!). People in power know where major govt projects with big ticket investments are going to come. They buy land parcels near by, at the prevailing market prices. Once the govt project is announced,  land bought at pennies becomes gold overnight.No cash involved! Apparently clean transaction. Not really, it is balant misuse of official information for personal gains!

All stock markets have regulations to prevent insider trading in stocks. There are restrictions and guidelines on what the officers of a company can or can not do. This is to prevent them from deriving any undue advantage because they have access to information, as part of their job, prior to public at large.

Time to have insider trading regulations for people in power!

Tuesday, August 16, 2011

Barking up the Wrong Tree

Popular support to Anna Hazare clearly shows people's anger and frustration with the current system of governance. It would be foolish for anyone to read this as frustration with the incumbent government only. The fight is against the system as such, and not just against the present occupant of the government offices. The fight is against each and every outfit that has taken advantage of the creaky system. The fight is to change the system such that there is no scope of it being abused by unscrupulous elements.  Though, the way the incumbent government is handling the Anna protest might as well relegate this government to history's dustbin.

Having said that, I believe, Anna's demand for a lokpal is not a panacea.  I for one even think it is like fighting the fire with oil. Our problem is bloated bureaucracy, ambiguous policies, confusing rules & regulations and degrading morals in our society.  By adding one more bureaucrat to this won't solve the problem. We already have too many of them!

If we are serious about fixing the issue, we need to drastically cut the size of the government. There is no reason why the state should be running airlines or making steel or watches or running a telecom company etc. Consequently there is no need to have tons of ministers and the bureaucrats to run and govern these operations. More government gives more scope for the corrupt to take advantage.  It was essential at some point in time in the past, when private capital was not sufficient for big ticket investment or for long gestation period projects. Now, situation has changed, strong private players are capable of bringing in the capital and also provide the services & quality that the consumers expect.

Government  must be cut aggressively, you see we do not have another generation to waste before we remove poverty and give opportunity to teaming millions.

Cutting size of government is a huge political issue. No government would attempt it, if the only thing it guarantees is debacle at the next election hustings.  For it to be successful, whosoever does it must have more than a fair chance to show this as successful and advantageous for the country, for the society and for the individuals who are directly impacted.

Which ever political party gets into governance must do the slashing and cutting of government as soon as it  assumes power, so that it has full 5 year term to show the advantages that it brings. If it is attempted mid term or towards the end of the term, the chances are that the benefits might not be very apparent by next elections!

Government should focus on policies, regulations and providing level playing field for the organisations to compete based on their competence and capability.

That is the solution that we are looking for! That is the right tree!