Of Voodoo statistics, Arhar tears and shifting goalposts..

It all started when the little prince who slept all throughout the inflationary UPA decade was forced to wake up from his afternoon siesta/power nap in the parliament. And when this child's ignorant cribs about arhar daal, etc was promptly responded to with statistics from the Finance Minister, this is the best that we could get from the Ex-FM:

PC's Voodoo Statistics!

While reminding the ex-Finance Minister that June 2014 was well within Modi tenure, my intention is not to prove as if the current PM is some kind of a Harry Potter, who just used some wizardry after being sweared into his job and voila' the CPI Inflation came down to 6% levels. The intention here is to show how the Ex- Finance Minister, even when wanting to prove the inflation during his tenure was benign had to pick and choose a best-case number from a month that was not even a part of his tenure.

I think who practises voodoo statistics becomes amply clear when the numbers are seen in the correct perspective. So here goes the historical record on the CPI inflation across last 2 decades (including a few years of a non-descript alliance loosely called as the third front supported from outside by Congress, the entire tenure of NDA under Vajpayee, a complete decade of UPA and 2 years of BJP under Modi):

Official Statistics

Assuming you know the periods of the various regimes during this period, you be the judge on who is practising voodoo statistics.

But this brings me to a different issue of why and how the whole political and economic discourse changed its focus from Wholesale Price Index to Consumer Price Index. One may remember that during those good old days (acche din) of UPA tenure and even before that, all the eyes that cared about inflation tracking used to be focussed on the weekly and monthly publication of WPI inflation. While CPI was very much being published, it was not much talked about. Very surely it was not being used by the policy makers. Most notably, the interest rates and monetary policy of RBI mainly took into account the WPI numbers and the CPI was ignored. So when did it all change? How come the nation is now looking at the CPI of 5.5% and calling it inflationary?

It turns out that something/someone caused this change well in advance (but very much after the opinion polls started predicting) of a change in government and BJP coming to power:

Shifting Goal Post - Rajan Effect!

In simple words, the goal-post was shifted according to someone's convenience. While fixing the repo rates and deciding on the country's monetary stance, the RBI always used WPI in the past. So in other words, the 9-10% interest rates on fixed deposits that the senior citizens and the risk-averse savers got during UPA tenure were bench-marked against a WPI inflation that was slightly lower than these interest rates. Picture this: In December 2009, when the CPI inflation was ruling at 14.97%, these senior citizens were losing money to inflation while they were getting 10% interest.

Throughout the 2 years of Modi regime (both years of failed monsoon and hence probably the worst case inflation scenario), the WPI is in the negative. Had the goal-post not changed for some strange reason, the interest rates would have been at less than 4-5% (at least). On the other hand, had CPI been used as the benchmark, can you imagine what would have been the repo rates in 2009 or 2010 or for that matter in any of the UPA-II years?

So what is your kid eating today?

Maggi 2-Minute Noodles - Masala flavour, I guess. It is yummy. The kids love it and Mummy loves it, too. After all, it gets prepared in just 2-minutes. The ads say that it is healthy, too. A perfect win-win for all, right? WRONG!

Much beyond the ads featuring your favourite actors and actresses, there is a commodity called facts. The facts are available for free. You don't even have to buy the product to know its facts. All you have to do is turn the wrapper around and see the Nutritional Facts. Let me put the numbers here:
Serving Size: 80 gms
Calories: 360
Total Fats: 14gms of which 6gms is Saturated Fats
Total Carbohydrates: 47 gms
Protein: 7gm
Sodium: 950mg
(Reference : http://www.fatsecret.com/calories-nutrition/maggi/masala-noodles)

Yummy? Yes, of course it is. I have eaten it and I love the taste. But that yumminess is nakli or shall I say, NaCl-y (those from chemistry background would know what I mean). The Sodium content is 950 mg. 950 mg of salt coming from just breakfast. American Heart Association recommends daily sodium intake of less than 2000 mg. (Reference: http://www.fitday.com/fitness-articles/nutrition/healthy-eating/how-much-sodium-should-you-consume-per-day.html#b)Almost half of that, your child is getting just from this "healthy" breakfast! Keep your kids away from future heart ailments. Stay away from this yummy poison.

Healthy? 360 Cal. by itself not a harmful dose of energy intake so long as it has well-balanced distribution across fats, carbs and proteins. But most of the calories come from fats and carbs in this case. The 80gms of noodles contain 61gms of fats and carbs and mere 7gms of protein. A great chunk of the 14 gms of fats are of the dreaded saturated kind (6gms). And what about the much talked about fibers that they claim in the ads, that make this instant food so healthy? There are just 2gms of it! To be anywhere close to healthy, it needs to have at least 6 gms of fibers per 100gms.

Parents love it? Sure they do because as the the ad says "So fast to cook..". But I guess based on the facts above, you would want to think again.

Kids love it? It is for the parents to design the eating habits of their children. One may say that it is too early to think about long-term impact of food they eat now. But the eating habits that are formed in the early ages will stay with them for ever. It is less likely that a child fed on junk food at an early age will change to eating healthy balanced diet consisting of vegetables and fruits later in life.

It is OK to choose eating junk food after knowing that it is junk. After all, you have made an educated choice to mess up your health. But what is dangerous about such products is that they deceive the gullible masses into believing that they are healthy whereas they are not.

Lessons from Team Anna Faux Pas at Jantar Mantar

1. No one wants to die for the nation.
If someone says s/he is willing to die for the nation, it is to be assumed that s/he won't. That's barring a few notable aberrations like Bhagat Singh, Chandrashekhar, Rajguru, Sukhdeo, et al. So when someone takes to Fast Unto Death, rest assured - No one's dying. And that's true, not only about Anna Hazare and Arvind Kejriwal but also about Gandhi. The demands would typically be vague enough so that before it comes to dying, one can back out of the fast.

2. You need to know when to use this weapon and when not to.
The greatest champ of this weapon, Gandhi knew this well. He understood that he would be able to bring the British to their knees by going on fast - because though they enslaved the nation, by and large, they were relatively humane. Yet another time, Gandhi had gone on fast was in Noakhali when the hindus had decided to avenge the killings in Bengal an year ago. They were out for the blood of Shaheed Suhrawardy. Again, Gandhi knew that the hindus would relent to the pressure of his fast. And they did. It may be noted that when Muhammed Ali Jinnah was hell-bent upon partitioning India, Gandhi had famously said, "Partition only on my dead body". This had provided a false assurance to many Indians across both sides of the border that eventually came up, that Gandhi is going to fast and Jinnah will then give up his demand. However, Gandhi knew that there is no way Jinnah can be convinced and he might have to die if he were to go on fast unto death. So there was no fast. A partition happened and it did not happen on Gandhi's dead body. Anna's fast an year ago was a success because Congress was caught unaware of the will-power of those behind Anna movement. It did not succeed this time because Congress was in better position to read the bluff behind their fast.

3. Keep it vague.
The demands at such a fast need to be kept vague. So that you can express satisfaction at the end of 10 days of fast and break your fast even if technically speaking no demands have been met. That's how negotiations end. You may have the opponent down on his knees and meet all your demands or the opponent may not meet any of them but allow you to back out gracefully, or anything in between the two possibilities. That happened in Anna's first sally, one year ago. The fast had almost brought Congress on its knees but then Anna's condition had worsened to the extent that they could not carry on any longer without losing Anna's life. So the two sides agreed to something that appeared to be a good win-win solution (but in hindsight it can be said that Congress pulled it off).

4. Back-out should be well-planned
No one knows why Arvind Kejriwal's fast at Jantar Mantar really ended. It was embarrassing to the movement and its followers (which by the way, has shrunk quite sharply and that's quite worrying). It appears that all the above lessons were forgotten. Congress knew the bluff about willingness to die for the nation, Kejriwal probably did not know that it was not a wise idea to repeat the use of this weapon because a. Congress will not agree to your demand and b. The public support has come down to a new ebb (thanks so some deft media-management by their opponents and some self-goals by Team Anna) and the demands made by Team Anna were not vague enough to make a good back-out from the fast. What came out was a hurried and a very embarrassing end to the 6-day fast with nothing to show in terms of achievement. Their opponents gave them a cold shrug!

Clearly, the nation needs a strong fight against corruption and its perpetrators. I am all for Team Anna movement. But the movement needs to be backed by a good strategy in place. Anti-Corruption is too important a war to be lost, the way it seems to have.

Sonia - The sole saviour of secularism in India!

So what's behind the coincidence of having two autobiographies getting released almost simultaneously and both squarely blaming Late PV Narasimha Rao for the demolition of Babri structure and portraying Sonia as the secular lady who was deeply disturbed by this incident? I don't know. Maybe pure coincidence or may be yet another attempt by Congress to salvage itself before the elections.

One is an autobiography of Late Arjun Singh, called "A grain of sand in the hourglass of time". He describes Rao as a modern day Nero who kept fiddling while Ayodhya was burning. This comes from the guy who was caught fiddling while thousands were dying on the mid-night of December 1984 from the poison that leaked from Union Carbide's plant. The chief minister of Madhya Pradesh - Arjun Singh mysteriously was nowhere to be found. Throughout his life he had absolutely no achievement to his name except for subservience to the only family that mattered and dividing Indians on casteist lines. In death, he continues to desire posthumus  glory.

Another one is from Kuldip Nayyar, by the name "Beyond the lines" in which he recalls how Narasimha Rao actually connived to bring about the demolition of Babri. He goes on to say that while the Babri was being demolished, Rao was having a puja at his home, apparently praying for the demolition and he emerged from the prayer only after he got the news of the demolition. He describes how Sonia came across as the only secular person, who was deeply disturbed by the mosque demolition and her secularism was genuine. Yes sir, this secular lady continued to be with her husband when, under his able leadership, the locks of the Ramlalla temple at Ayodhya were opened after so many years and Shilanyas was performed to reiterate his commitment to build a temple at the disputed site. Neither is this secular lady known to have objected when Late Rajiv Gandhi went on record saying, "When a big tree falls, the ground will shake" in response to what he thinks about the anti-Sikh riots. It turns out that the ground shook so much that thousands of sikhs died as a result. They are yet to get justice.

What say? Redefining secularism - Kuldip Nayar and Arjun Singh way!

Help needed on Special Theory of Relativity

So I understand the basic premise on which Special Theory of Relativity hinges:
1. Speed of Light is the same no matter from what frame of reference it is measured. So a guy inside a moving train measures it at 300,000 Km/s as much as a guy standing still at the railway station
2. There is no experimental setup that can prove one object to be stationary and the other one to be moving. In other words, there is no preferred constant speed. It can always be argued that object A is stationary and another object B is moving at 5 Km/Hr as much as it can be argued that object B is stationary while A is moving at 5 Km/Hr in opposite direction.

These two postulates throw up a set of equations we collectively refer to as Special Theory of Relativity. One of these equations explains time dilation:
T' = T * SQRT(1 - v^2/c^2)
where, T is time at rest, v is the speed at which the object is moving and c is the speed of light. T' is the speed of light while the object is moving at speed v.

Here's the problem that I have not yet been able to comprehend:
Assuming two brothers A and B were at railway station. At exactly 3PM, B boards a train that travels at 99% the speed of light only to return back after 2 seconds according to B's watch while A is still at the railway station. The way I have been told how theory of relativity will manifest itself is:

Once B is back to the station and the two brothers check the time on their respective watches, B sees that it has been 2 seconds past 3 PM while for A, the time is about 10 seconds past 3 PM (T' in above equation is B's time and T is A's). Apparently for B, time slowed down. Turning this problem around, can it not be argued that B and the train were stationary and that it was A who traveled at 98% the speed of light in the opposite direction? In that case one would infer that the time slowed down for A and not B. If the example is correct then it appears that Special Theory of Relativity is contradicting itself and that indeed there is a preferred frame of reference and A is to be treated at speed 0 only and B is to be treated as the one that is moving.

I am sure I am missing something. Can someone please help me as to what is going wrong here?

Plight of Indian Rupee

It does not take too much of an analysis to conclude that the assets in India, especially the real estate were grossly overpriced. However, here's some analysis to prove the point.

In order to buy a humble 2-bedroom abode with small sized rooms, one has to shell out Rs. 10-15 million in the suburbs of Mumbai. The closer you go to the city, the price goes up even further. This in a city with miserable infrastructure, connectivity and chaotic quality of life. It takes just a breakdown in the railway signalling system to bring the entire city to a stand-still! When the rupee was priced at 45 to a dollar, this humble abode translated to approximately USD 225,000 to USD 335,000. For that kind of money, you could have bought a palace in a city in US with much better connectivity, infrastructure and a peaceful quality of life. The facilities like free county library, public parks, etc come as a bonus.

Something had to correct to right-size the real estate in India. Now the rupee is undergoing a sharp devaluation.  At Rs 55 to a dollar, how does the same apartment price in dollar terms? It now comes for a price tag of about $180,000 to $270,000. Still expensive but we are getting there - where we belong. A complete right-sizing is yet to happen. It can take shape in either of the three ways - A bloodbath in the real estate market, an even sharper devaluation of Indian Rupee or both.

Fuel Price Hikes

What causes the Indian middle-class to rant on the Facebook and Twitter against the Indian Government? Yet another fuel price hike. So when the government announced a steep Rs. 7 hike in petrol prices, the Facebook is flooded with cartoons and humourous one-liners to express the cynicism against this move by the government.

(Image courtesy www.LifeSnap.in)

This creates a picture of a frustrated middle-class that is finding it impossible to make its ends meet. Assuming this picture to be correct, it makes me wonder:

• Who are the people I see every single evening sipping a lavish coffee at Barrista's or Cafe Coffee Day? I hear even Starbucks and Dunkin Donuts are planning their entry into Indian markets. Surely, they are tapping a market large enough to accommodate all of these players. Their market definitely can not constitute just the rich and the affluent.
• Every single friday, at least two or three new trashy bollywood movies are released into the multiplexes that charge tickets no less than Rs200 per head. The trashiest of Salman Khan movies are a block-buster hit. Who are the people  flooding the cinema halls despite the steep inflation?
• The list is endless - malls abuzz with people buying things ranging from the bare essentials to the lavish perfumes and ray-bans, cars choking up the city roads, rickshaws getting so many long distance passengers that they refuse to ply shorter distance passengers.

I am sure there is a vast majority of Indians who are terribly impacted by fuel price inflation but I doubt if the people venting their anger in Facebook and Twitter are amongst them. 

One statistic that is often played out is the fact that petrol prices in India are much higher than in other countries. This is true. Price of petrol (gas) in US is $4 per gallon that translates roughly to  Rs.58 per liter. But consider also the fact that diesel in US also is about $4 per gallon (Rs.58 per liter). The diesel prices in India are Rs. 46 per liter. Kerosene in US costs about Rs.42 a liter. The heavily subsidized kerosene comes at Rs.13. It is these and many other subsidies that the government has to fund in some way or the other. 

Instead of fuming and fretting over the petrol price hikes, I suggest these people to pressurize the local municipalities to do the following:

• Create a better infrastructure of public transportation. There were lot many BEST routes and much better frequency of buses once upon a time in Mumbai. Slowly a lot many of these routes have been closed down and the frequency reduced. I smell nexus between auto companies and governments behind this!
• Short distances need to be traversed either by walk or bicycles. Ask the municipality to create more sidewalks and make them exclusively available only for pedestrians and not to be shared with hawkers. Encourage people to use bicycles by providing exclusive bicycle lanes and stands for parking cycles.

Crude oil and its products are a finite commodity and the prices to some extent reflect the fact that the commodity is getting rarer by the day. Accordingly, it needs to be used more prudently. Also, the inflation signals the fact that more money is being spent rather than saved and invested. If the voracious appetite for consumption by middle-class comes down, automatically the inflation will fall.