Saturday, September 21, 2013

கொஞ்சம் சினிமா ...கொஞ்சம் பாப்கார்ன், The Lunchbox Irrfan, Nimrat and a dabba make a delicious combo






FP :Deepanjana Pal Sep 19, 2013

Everyone eats food, but in some societies, being well-fed is more important than it is to others. India is one of them. 
Our days are all about meals and snacks
. Meetings, weddings, casual drop-ins, festivals; no matter what the occasion, our first question invariably is “What’s there to eat?”
So it’s curious that food hasn’t featured much in the other national obsession, Bollywood. In a few films, like BawarchiCheeni Kum and the recent Luv Shuv Tey Chicken Khurana, it’s made a half-hearted appearance as a device.
 Finally, in The Lunchbox, which opens in India this week after winning over audiences at international film festivals, we get a proper celebration of good, home-cooked Indian food.
Ila (Nimrat Kaur) is a housewife and a mother. The first time we see her, she’s cooking a meal that she packs into a steel tiffin carrier and gives to a dabbawalla. This is no common dabba made up of with watery curry and wilting veggies. Ila’s dishes are so colourful and plump with flavour that you can almost smell their aroma sitting on the other side of the silver screen. Ila hopes the lunchbox will land upon her husband’s desk, that he’ll taste it and there’ll be a moment of magic. This is precisely what happens. The only problem is, the one who is spellbound by the delicious dabba is not her husband.
A little mix-up sends characterless aloo gobhi to Ila’s husband and brings Ila’s cooking into Saajan Fernandez’s (Irrfan Khan) life. Saajan is a widower and a salaried man on the brink of retirement. Droopy, dour and dull, like a toy running on a dying battery, Saajan is the precise opposite of the crackling, simmering, gorgeous food that he eats, courtesy the mix-up.
Of course, Ila realises that same day that her husband didn’t get the meal she’d prepared so carefully. But there he is, barely registering her when he comes home, even though she’s standing in the same room with him. In contrast, there’s the licked-clean dabba whose absolute emptiness radiates appreciation for her. So, instead of speaking to thedabbawalla, Ila sends a note to the man who ate the lunch she prepared. He writes back – it’s an infuriatingly dry, humourless message – and with that, a relationship begins between these two lonely people.
Saajan’s life changes because of Ila’s dabba
It helps him make a friend of Aslam (Nawazuddin Siddique), the chirpy, young man who has been hired to replace Saajan at the office. As Saajan writes about his life in the notes he exchanges with Ila, he begins to savour what he has around him. And so, through the act of cooking and eating, two automatons come back to life.

There’s something timeless about The Lunchbox even though it’s set in the present. The trains, offices, dabbawallas, homes, cooking utensils – they’re all poignantly real. Debutant director Ritesh Batra’s The Lunchbox (he also wrote the film) is set in a familiar city, the one inhabited by the middle-class. There are no gangs or socialites here. Rather, it’s a labyrinth of relationships forged with trust and riddled by loneliness. Batra recreates Mumbai’s layer cake of solitude and solidarity exquisitely.
There’s also a hint of nostalgia in things like passing messages in hidden chits of paper, sharing lunches, making friends with the oddball. Internet and social media haven’t invaded the lives of Saajan, Ila and Aslam. Their relationships are delicately wrought using carefully-chosen words. They’re constrained not by character count, but by shyness and social circumstances.
Frequently funny and constantly subtle, The Lunchbox isn’t really a love story. 
What develops between Saajan and Ila is something far more tender than the flamboyancy we usually associate with romance in Indian cinema. This is a fragile companionship that nevertheless strengthens both of them, making them feel a little more vibrant and alive.
Saajan and Ila have been superbly portrayed by Khan and Kaur. Khan as Saajan transforms from forgettable to charming with elegant ease, his character blossoming into life thanks to Ila’s dabbas. No doubt well-written roles like this one make up for films like D-Day and The Amazing Spiderman. Kaur, whom we last saw in an ad, making an unnecessary chocolatey mess while stuck at a traffic light, is luminous as Ila. It’s a role that demands a range out of Kaur, and she delivers. In comparison to these two, Siddique’s Aslam is a sliver of a role, but much of the fun in the film comes from Aslam’s irrepressible good cheer.
Perhaps the most intriguing character in The Lunchbox is the one we never see: Auntyji (voiced by Bharti Achrekar), who lives in the flat above Ila and is house-bound because she must look after her paralysed husband. 
She’s a delight and ever ready to supply Ila with whatever the younger woman needs, whether it’s encouragement to write to Saajan or special mix of spices for a recipe.
Ila and Auntyji cheerfully chatter with one another, their voices being carried in and out of Ila’s kitchen window.
 For both, the other’s faceless voice helps drown out the white noise of solitude that comes from living with a husband who doesn’t notice them. 
Swirling in Ila’s cooking are the hopes and longings of two fantastic women, whose only outlet is in the dabba savoured by a stranger.
 ....................a delicious, beautiful little film.




Why analysts are cautious on Maran’s Sun TV despite good prospects

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FP Editors Sep 18, 2013


Controversy never dies down for Kalanithi Maran’s Sun TV group.
Just when the group is slowly getting out of the woods after the CBI probe and the onslaught of Tamil Nadu Chief Minister Jayalalitha, analysts have raised new concerns about the company’s functioning.
According to a report in the Economic Times today, Kotak Institutional Equities has pointed out that the group’s aircraft buying and selling is worrying. “Non-business isuues remain an overhang on Sun TV stock and force continued caution,” the brokerage has been quoted as saying in the report.
The ET report says in five years Sun TV bought three aircraft and sold two. The latest was in 2013, when it sold an aircraft for Rs 190 crore and spent Rs 295 crore for a replacement, it said.
 The plane the company sold was only three years old.
Kotak has said that the old aircraft was sold due to operational concerns. “It remains unclear why an informed buyer would pay Rs 190 crore “equal to net block, nil loss on sale) for such an asset,” the ET report quotes Kotak research note.
The note also says the company has robust free cash flows of Rs 465 crore.
Motilal Oswal also had raised similar concerns, the ET report notes.
When a life of an aircraft is 15 years, why would you buy and sell aircraft in a short span of time?” Amit Tandon of Investor Advisory Services has been quoted as saying in the report.
Meanwhile, another report in the VC Circle has said that Maran and his wife Kavery have emerged the highest paid executives in the country in FY13. Both of them took home a cool Rs 112.5 crore as salaries during the year, when their companies were not doing  great. However, the amount was marginally lower than their remuneration a year ago.
Mint report notes that the average salaries of directors of top 500 companies in 2012-13 rose more than 25 percent while the profits fell 1.6 percent and debt rose about 17 percent.

Is Rajan trying to do what Paul Volcker did in the US ?


Reuters
FP :Vivek Kaul Sep 21, 2013

Going against market expectations Raghuram Rajan, the governor of the Reserve Bank of India(RBI), raised the repo rate yesterday by 25 basis points (one basis point is one hundreth of a percentage) to 7.5%. Repo rate is the interest rate at which RBI lends to banks.
It was widely expected that Rajan will cut the repo rate. But that did not turn out to be the case. In his statement Rajan explained that he was worried about inflation. As he said “recognizing that inflationary pressures are mounting and determined to establish a nominal anchor which will allow us to preserve the internal value of the rupee, we have raised the repo rate by 25 basis points.”
The RBI’s Mid-Quarter Monetary Policy Review echoed a similar sentiment. “What is equally worrisome is that inflation at the retail level, measured by the CPI, has been high for a number of years, entrenching inflation expectations at elevated levels and eroding consumer and business confidence. Although better prospects of a robust kharif harvest will lead to some moderation in CPI inflation, there is no room for complacency,” the statement pointed out.
Rajan, as I explained yesterday, believes in first controlling inflation, instead of being all over the place and trying to do too many things at once. As Rajan wrote in a 2008 article (along with Eswar Prasad) “The RBI already has a medium-term inflation objective of 5 per cent…But the central bank is also held responsible, in political and public circles, for a stable exchange rate. The RBI has gamely taken on this additional objective but with essentially one instrument, the interest rate, at its disposal, it performs a high-wire balancing act.”
Reuters
And given this the RBI ends up being neither here nor there. As Rajan put it “What is wrong with this? Simple that by trying to do too many things at once, the RBI risks doing none of them well.”
Hence, Rajan felt that the RBI should ‘just’focus on controlling inflation. As he wrote in the 2008 Report of the Committee on Financial Sector Reforms “The RBI can best serve the cause of growth by focusing on controlling inflation and intervening in currency markets only to limit excessive volatility…an exchange rate that reflects fundamentals tends not to move sharply, and serves the cause of stability.”
Given this, Rajan’s strategy seems to be similar to what Paul Volcker did, as the Chairman of the Federal Reserve, to kill inflation in the United States, in the late 1970s and early 1980s. On August 6,1979, Volcker took over as the Chairman of the Federal Reserve of United States .
When Volcker took office, things were looking bad for the United States on the inflation front. The rate of inflation was at 12%. In fact, the inflation in the United States had steadily been going up over the years. Between 1964 and 1968, the inflation had averaged 2.6% per year. This had almost doubled to 5% over the next five years i.e. 1969 to 1973. And it had increased to 8%, for the period between 1973 and 1978. In the first nine months of 1979, inflation had averaged at 10.75%. Such high inflation during a period of peace had not been experienced before.
As inflation was high people bought gold. On August 6, 1979, the day Volcker had started with his new job, the price of gold had stood at $282.7 per ounce. On August 31, 1979, gold was at $315.1 per ounce. By the end of September 1979, gold was quoting at $397.25 per ounce having gone up by 26% in almost one month.
On January 21, 1980, five and a half months after Volcker had taken over as the Chairman of the Federal Reserve of United States, the price of gold touched a then all time high of $850 per ounce.
In a period of five and a half months, the price of gold, had risen by an astonishing 200%. What was looked at as a mania for buying gold was essentially a mass decision to get out of the dollar. Given this, lack of stability of the dollar, Volcker had to act fast.
After he took over, the first meeting of the Federal Open Market Committee (FOMC) was held on August 14,1979. FOMC is a committee within the Federal Reserve, the American central bank, which decides on the interest rate. The members of the committee expressed concern about inflation but they seemed uncertain on how to address it.
In September 1979, the FOMC raised interest rates. But it was split vote of 4:3 within the seven member committee, with Volcker casting a vote in favour of raising interest rates. Volcker clearly wasn’t going to sit around doing nothing and came out all guns blazing to kill inflation, which by March 1980 had touched a high of 15%. He kept increasing the interest rate till it had touched 20% by January 1981. This had an impact on inflation and it fell to below 10% in May and June 1981.
The prime lending rate or the rate, at which banks lend to their best customers, had been greater than 20% for most of 1981.
Increasing interest rates did have a negative impact on economic growth and led to a recession. In 1982, unemployment rate crossed 10%, the highest it had reached since 1940 and nearly 12 million Americans lost their jobs. During the course of the same year nearly 66,000 companies filed for bankruptcy, which was the highest since the Great Depression. And between 1981 and 1983, the economy lost $570 billion of output. But the inflation was finally brought under control. By July 1982, it had more than halved from its high of 15% in March 1980. The steps taken by Paul Volcker ensured that the inflation fell to 3.2% by 1983.
By continuously raising interest rates, Volcker finally managed to kill inflation. This ensured that the confidence in the dollar also came back. By doing what he did Volcker established was that he was an independent man and was unlike the previous Chairmen of the Federal Reserve, who largely did what the President wanted them to do.
In fact, when Arthur Burns was appointed as the Chairman of the Federal Reserve on January 30, 1970, Richard Nixon, the President of United States, had remarked that “I respect his independence. However, I hope that independently he will conclude that my views are the ones that should be followed.”
The feeling in the political class of India is along similar lines. The finance minister expects the governor of the RBI to bat for the government. But that hasn’t turned out to the case. The last few RBI governors (YV Reddy, D Subbarao) have clearly had a mind of their own. And Raghuram Rajan is no different on this front. His decision to raise interest rates in order to rein inflation is a clear signal of that.
But the question is can the RBI do much when it comes to controlling consumer price inflation(CPI)? Can Rajan like Volcker did, bring inflation under control by raising interest rates? Or can he just keep sending signals to the government by raising interest rates to get its house in order, so that inflation can be brought under control?
In India, much of the consumer price inflation is due to food inflation, which currently stands at 18.8%. While overall food prices have risen by 18.8%, vegetable prices have risen by 78% over the last one year. As a discussion paper titled Taming Food Inflation in India released by Commission for Agricultural Costs and Prices (CACP) in April 2013 points out, “Food inflation in India has been a major challenge to policy makers, more so during recent years when it has averaged 10% during 2008-09 to December 2012. Given that an average household in India still spends almost half of its expenditure on food, and poor around 60 percent (NSSO, 2011), and that poor cannot easily hedge against inflation, high food inflation inflicts a strong ‘hidden tax’ on the poor…In the last five years, post 2008, food inflation contributed to over 41% to the overall inflation in the country.”
The government procures rice and wheat from farmers all over the country at assured prices referred to as the minimum support price. This gives an incentive to farmers to produce more rice and wheat for which they have an assured customer, vis a vis vegetables.
As a discussion paper titled National Food Security Bill: Challenges and Options released by CACP points out “Assured procurement gives an incentive for farmers to produce cereals rather than diversify the production-basket…Vegetable production too may be affected – pushing food inflation further.”
There is not much that the RBI can do about this. As Sonal Varma of Nomura Securities puts it in a report titled India: RBI Policy – A Regime Shift “Inflationary expectations are elevated primarily due to supply-side driven food inflation. In the absence of a supply-side response, severe demand destruction may become necessary to lower inflationary expectations.”
Hence, it remains to be seen how successful the Rajan led RBI will be at controlling inflation.
(Vivek Kaul is a writer. He tweets @kaul_vivek)

Reading in between lines: Where Raghuram Rajan goofed up



Raghuram Rajan should have clarified objectives, instruments and operating procedures in monetary policy. What he has done is confuse all issues. PTI
Raghuram Rajan should have clarified objectives, instruments and operating procedures in monetary policy.
 What he has done is confuse all issues. 
PTI



by FP :Ajay Shah :Sep 21, 2013



Yesterday (20 September), the Reserve Bank of India (RBI) said it will:

 - reduce the marginal standing facility (MSF) rate by 75 basis points from 10.25 percent to 9.5 per cent with immediate effect; 

– reduce the minimum daily maintenance of the cash reserve ratio (CRR) from 99 percent of the requirement to 95 percent effective from the fortnight beginning 21 September 2013, while keeping the CRR unchanged at 4 percent; and

 - increase the policy repo rate under the liquidity adjustment facility (LAF) by 25 basis points from 7.25 percent to 7.5 percent with immediate effect.

 Raghuram Rajan should have clarified objectives, instruments and operating procedures in monetary policy. 

What he has done is confuse all issues. PTI You did not understand that? 

Neither did I. 

The challenge The heart of successful monetary policy is a coherent monetary policy framework. 

There should be clarity on objectives, instruments and operating procedure.

 The RBI has failed as a central bank because it lacks clarity on all three. 

As a consequence, India has experienced sustained macroeconomic instability: look at this long time-series of CPI inflation (see chart below): Chart Other than the 1999-2006 period, where we roughly achieved the goal of y-o-y CPI inflation from 4 to 5 percent, there has been failure all through. 

One factor which is holding back high growth in India today is the immense uncertainty about the future. 

What will happen to inflation and interest rates? Nobody knows, and this hurts confidence. There is a short-sighted view which suggests we should tolerate high inflation. But low inflation is a growth fundamental.

 Matters have been made worse by the recent fight about the rupee (read here and here). An array of harmful measures were taken, which have muddied the waters considerably. 
The RBI operating procedure was shattered by these moves. India now has the silliest monetary policy framework in the world where the central bank engages in monetary policy through changes in eight numbers:

 (1) The repo rate,
 (2) The MSF/bank rate,
 (3) CRR 
(4), reverse repo rate,
 (5) LAF window cap,
 (6) MSF window cap, 
(7) minimum CRR to be maintained, and
 (8) SLR.

 In addition, they also mess with capital controls.

 A variety of objectives are in the fray including WPI, CPI, GDP growth, the exchange rate, exchange rate volatility, and then some. 

So RBI is supposed to chase six objectives using nine instruments. 

Raghuram Rajan did an excellent Day 1 speech (on the day he was appointed as Governor). 
All of us were optimistic about what might arise in his work on monetary policy. What is required is clarifying objectives, instruments and the operating procedure. 

What we needed to say Yesterday’s  speech needed to say: RBI now has an unruly menagerie of objectives and instruments.

 This situation has generated heightened uncertainty which is hurting the economy. We got into this tangled mess because of the fear of QE (quantitative easing) withdrawal and the currency fight of recent months. We recognise that this is a mess.

 Now that this fear has subsided, we will clean things up. We do not care about the exchange rate. 

The prime objective of monetary policy is low and stable CPI inflation. We recognise that a central bank with discretion but not rules is impotent. MIT and Yale teach Kydland and Prescott.
 We will replace this mess by a framework. The announcements In my reckoning, yesterday’s monetary policy statement has failed to clarify objectives, instruments and operating procedure.

 As I read the statement, I could not understand whether this was a tightening or an easing. I spoke with veterans on the bond market and they were also fumbling.

 By the evening, it looked like the 91-day T-bill rate (one important summary statistic about the money market) had gone down by 20 bps, but the overnight interest rate swap (another important summary statistic about the money market) had gone up by 15 bps. Only late in the evening,

 I started thinking that it is an easing. 

The short end of the yield curve has gone down by 20-40 basis points (bps). 

Some say that there is method in this madness, that an enormously complicated scheme is in motion which will make the world a nice place. 

But if a layman like me cannot understand the strategy that is now in motion, the fault lies in the statement. 

Lack of clarity on objectives

 The statement says that exchange rate volatility continues to be an objective at RBI: 

The timing and direction of further actions on exceptional measures will be contingent upon exchange market stability, and can be two-way.

 Further actions need not be announced only on policy dates.. I think this is a mistake. The only piece of sound macro policy in India today is the floating exchange rate. 

When RBI pursues exchange rate objectives (in whatever form), this leads to trouble. 

And, this immediately begs the question:

 What is your objective? 

Are you targeting a specific exchange rate?

 Do you consider INR/USD volatility of over 15 percent annualised to be too high or too low? 

What statistical procedure will you use to measure volatility? 

The moment you try to answer these questions, you realise that the exchange rate is a bad objective.

 And, until the objectives are precisely stated, there is no monetary policy framework (RBI can hit the economy at random dates with random actions because they have committed themselves to nothing). 

There is also a loss of accountability which is the breeding ground for failure. There is talk about both WPI and CPI. So the old confusion about the target continues. No serious economist thinks the WPI is a price index, so this talk reduces respect. There was talk about a WPI target of 6 percent. 

This suggests all is well, for WPI inflation is already there. Messy outlook Another disappointing thing that was made clear in the press conference was that capital controls will continue to be used.

 This is a mistake. In India, capital controls are not an effective tool for macroeconomic policy. Each attempt at doing this is going to roil the markets.

 Far from saying that the messy defence of the rupee will be rapidly unwound, we are left worried that over the coming three years, in which QE will unwind, we will continue to have a messy framework. Conclusion Compare and contrast the press conference by Ben Bernanke – which is a masterpiece of clarity, against what we got from RBI. 

The statement should have aimed to clarify objectives, instruments, and operating procedures. It has just intensified the muddle. 

And since the muddle – the lack of confidence in the macro framework – is India’s primary problem, it just made India’s problems worse.

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