Though in the name of Aam aadmi IRDA has come out with the new set of guidelines for ULIPs, which comes immediately after the new set of guidelines issued by SEBI for Mutual Fund industry which were also in the name of Aam Aadmi. Apart the concern for aam aadmi the other common things between these guidelines are that, they are threatening not only the growth of these industries but also their very existence and also aam aadmi is being used as the façade to fulfill the directives of the khas aadmi i.e their political master, which is Finance Minister of this country.

If both the regulators are so concerned for the aam aadmi then they should have acted against the customer complaints more effectively. Can these regulators tell what concrete steps have they taken to stop misselling may be some thing like canceling the licenses of insurance/mutual fund agents or asking the concerned company to stop operations for some days or even canceling the license of an organization if really things were so bad. Why have these regulators not taken a single strong step against any organization which was involved in misselling and turn it into an example for others? The reason is simple, these regulators are not interested in the benefit of aam aadmi.

We all know that ULIPs are more transparent than traditional products because in ULIPs we know what are the charges and what amount will be invested. But can we say same thing about traditional plans? As a customer you are clueless about the charges and investment in traditional plans.

How can one be sure that there will be no misselling in case of traditional plans? Well the argument will be that returns are fixed hence there is no chance of misrepresentation on returns, which is half true as fixed return are only half of the total return, other half is bonuses which can not be guaranteed and there is every chance of misrepresenting it.

There has been a lot of hoopla and hype on the commission charges in ULIPs which are in range of 15-50% and in some cases it goes upto 80% but then charges in traditional plans are also in the range of 40-50% with corporate agents now asking for their commissions to be pegged at 80% (as per media reports) and IRDA has declined to intervene as it finds traditional plans to be matured.

In case of mutual fund industry the case is even more curious. Where misselling was largly restricted to selling of an existing plan and investing the amount in NFO and commissions were in range of 2-5%. There is no sense in making lakhs of agents redundant.  

So then why so much tamasha and nautanki by these regulators? Only reason for these steps is that government wants cheap money to flow in its coffers for its various aam janta centric development programs. If government borrows money from RBI then it squeezes money from the system and push the interest rates higher which are already high and hence impact economy negatively. If government prints the currency to cover the deficit then it would push inflation higher which is already very high. So this is the only means left to raise the funds for government programs. We know traditional plans invest in government bond and securities so this money will directly go in government coffers and not in stock market also with no commissions in selling mutual funds the numbers of agent will dwindle drastically hence less FOS to sell Mutual Fund so again less money will flow in stock market and more investment in government schemes like PPF/NSC/KVP etc.

Welcome to the mean and dirty world of politics where on our money, governments wants to win elections by putting our jobs at risk.  let’s not forget, a section of media was also hand in glove with government and played an active role in creating negative atmosphere and impression in the minds of investing public.

First let’s see some ups and the highlights of the incumbent government over last one year. Image of PM as a clean person remained intact. No major corruption scandal came in fore front related to any government policies though Raja issue is a bloat but is the legacy of the UPA I  and Tharoor issue had more to do BCCI politics than anything else. No major terror attack from across the border. Changes in education sector. Sports ministry reigning in heads of various sport bodies. India coming out of recession to a large extent. These are the few things which could give us some feel good.

Now lets look at the some major let downs which this government did through its actions and inactions. Though we have a clean Prime Minister but he is just not interested in asserting himself to push through political, bureaucratic, judicial & police reforms. There is no movement on any of these reforms and they are needed so badly that delay of few more years would completely destroy the basic democratic fabric of this nation.

We have been lucky that no major terror attack took place from across the border but we are not so lucky in the matter of internal threats. Maoists are the biggest threat and the Home Ministry and its leader the Home Minister are clueless on how to deal with this menace. It is not just that there is no uniformity in thoughts of the leaders of the UPA  but also there are many voices which are speaking and that too in different tone and languages. Home Minister of this country is going from tv studio to tv studio to keep forward his constraints in front of people rather than keeping it in front of the PM and their super boss Sonia Gandhi and debate with them. The menace of Maoists also reflect that flagship scheme of UPA, NREGA has flopped and the benefits of this scheme is not reaching to ‘aam admi’ then where is that money going? Answer we all know.

Finance Ministry is quick to take credit for economic recovery but completely mum over inflation. Some times this lack of will on part of government to reign in the inflation gives the feeling that these high prices are gift from the government to its donors (during election) in party fund. Just look at the statements made by Agricultural Minister on sugar and the profit of sugar companies. There is clear correlation.

Our external affairs minister is so confused that  he ensures India’s relationship with most of the major countries is in confused state. We are not sure if China and Pakistan are our friends or enemies. Who is our closest ally is it USA or Russia? No body knows

Speaking of Agriculture and Food & Civil supplies Minister, the lesser said is better. His only agenda seems to be, to ensure his sugar cooperatives and hoarders earn maximum benefits. Every year food items and fruits & vegetables worth thousands of crores are wasted due to inadequate storage and out dated laws (which doesn’t allow the farm producers to directly sell to the customers), but we don’t hear of any development on those front.

Performance of the protégé of agricultural minister, the civil aviation minister is similar to his master and it could be described as at best as dismal. Every year Air India in incurring losses worth more than 5000 crores, and government is pumping in more equity (from our taxes ) to keep it flying, so that next year more looses could be incurred. What is being done to change the situation and what are the changes being implemented? We never hear anything on that.

Result card of other ministers is also not impressive, while surface transport minister want to build 20km road per day but he is no where near that and we are just not aware what bottlenecks are putting brakes on the projects and what is being done to over come them. This is serious as these delays result in cost over run and ultimately we have to pay for it. Our energy minister is another dud, who is completely useless and is not even 10% of his targets.

The list of non performing and use less ministers is long and never ending. Most of these ministers are from socialist era and they always have this temptation to go back to that era where except our breath they controlled every thing else. It is high time that people with fresh ideas to governance are made part of ministries rather than those same dead woods who have been clinging to power for years. How about taking a cue from sports ministry and deciding the maximum tenure of an individual as a minister?

We don’t have to look through the  long barrel of the history to know how similarly we reacted when we crashed out so unceremoniously at the same location. Just 3 years back i.e. in 2007, all this has happened and the mistakes we did now are the same, which we did then. So what similarities did India encounter this time also? It is not about short pitch deliveries or the application or rather lack of it. It is about the team selection. Then also team was selected on reputation of the players rather than the form and same thing happened this time.

After 2007 world cup debacle, need to get young blood in the team was felt and that is why for 2007 T20 World Cup players suitable for the format and in the form were selected and not on the basis of reputation hence the desired result was there.

So the question arises then why this time we did not follow the success mantra of 2007 T20 WC and turned every logic on its head and went with the reputation of the players. When Yuvraj Singh failed miserably in IPL then how he could have succeeded in WC? Similar is the case of Gautam Gambhir and Yusuf Pathan who didn’t click in IPL barring a match or two. Best off spinner and leg spinner of IPL, Pragyan Ojha and Amit Mishra were not selected in the team. Batsmen who performed very well likes of Ambati Rayudu, Saurabh Tiwari and Robin Uthappa were ignored. Now when your players with best form are cooling the heels then you just can’t win. The team selected for this T20 WC was best in names but not in form.

Why didn’t we learn from our earlier mistakes and ensure they are not repeated? It took 2007 WC debacle for Dilip Vengsarkar and his band of selectors to look at inform players and not go on reputations. Why does K.Srikkant and his team of selectors have to commit same mistakes to learn a similar lesson rather than learning from mistake of others?

Now more important question is what is the point of having a tournament like IPL when none of the performers of that tournament are selected? Is IPL only a money making machine for the franchise owner and a tool in hand of BCCI bosses to show their power? Indian selectors should have been thank full to the IPL that a tournament of  this level is being played in India just before the major tournament, where entire possible bench strength of this country would be coming out with their best. This would have been a very tempting scenario for any level headed selector but not so for our selectors. They not only wasted a golden opportunity to bring in fresh blood in the team but also defeated the entire purpose of the IPL.

Srikkant and his selectors have not only failed and defeated the IPL but has also done so with this country and as usual BCCI is clueless and trying to divert the attention of public by planting stories in the media on Lalit Modi and cricketers.

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As an Indian we may not be surprised with this accusation of Iran because for decades we have been at the receiving end of the Pakistan’s state sponsored terrorism in our own backyard hence our full sympathies are with Iran.

If we see around the world, we will find that every terrorist activity will have some or the other connection with Pakistan. Be it India, Afghanistan, Europe or USA, investigation of every terror activity ends at Pakistan. Now a new name has been added to the list of “Victims of Pakistan Sponsored Terrorism” that is of Iran.

Over the years Pakistan has perfected the art of hoodwinking the international community by coming out with one after another master strokes to divert the attention. If India accuses Pakistan of terrorism then Pakistan refers to unresolved Kashmir issue. If Afghanistan accuses it of terrorism then Pakistan talks of Indian presence in Afghanistan. If Europe and USA accuse it of abetting terrorism then it talks of Al-Quaida in unadministered areas and if incriminating evidences are provided of ISI involvement then it talks of non state actors.

When a country talks of unadministered area and non state actors then there is some thing grossly wrong with the basics of that country hence international pressure should be applied to get its basics right but here Pakistan made this weakness into a money minting mechanism. Taking billions of dollars in aid in the name of fighting terrorist or so called non state actors in unadministered areas but with out any tangible results to show and then asking for more money and diverting a major portion of this money to fight proxy war against India.

In international diplomacy there is a term as “Rogue Nation” but for Pakistan a new term has to be coined may be on the lines of a “Mawali” shall we say a “Mawali Nation”. Yes after all it behaves like a mawali. Aid it takes from U.S. is sort of the protection money, terrorism in India and Afghanistan is blackmailing attempt, smuggling of narcotics in international market and pushing counterfeit currency in India is some thing which every mawali does to make some quick bucks.

So if countries affected with terrorism are serious about eliminating terrorism from their lives then all they need to do is come together and punish Pakistan severely. So the question is what punishment? Well, countries need to decide if this world would be much safer with out Pakistan or if Pakistan has to be there then in what form?

How could frisking of a film actor be the major news on Independence Day or matter of fact on any other day also is difficult to comprehend. That too makes entire news only on the version given by SRK. News channels didn’t even wait for American version on this whole episode before airing the frisking news. It seemed channel after channel was falling over to prove their loyalty toward Shahrukh Khan and each one trying their best to shout from top of their voice so that their concern for Khan of Bollywood could be heard loudest. This entire behavior of the media was immature and over the top especially considering the fact that even VVIP of the US has to go through this process. When I say American VVIP I mean by former Vice President of that country Al Gore and a very know Senator Edward Kennedy.

In recent days this is the second time media got it wrong in proving its secular credentials and that too with out ascertaining complete facts and figures. Last time being Imraan Hashmi case where later on Hashmi went on to deny racism (thank god he certified that India is secular otherwise it wouldn’t have been so ) and minorities affair commission blaming media for blowing the whole issue out of the proportion.

Shahrukh needs to be congratulated for his PR skills and his hold over the media. Earlier also he has proved that he is best in the show business in terms of PR and media management especially the way he turned useless movies like ‘Om Shanti Om’ and ‘Rab ne bana di Jodi’ into a hit entirely on his PR and media management skills. But here he and media went too far as this matter is being made to look as WE Vs THEM and between two sovereign nations. This hyping with out complete facts is completely stupid.

Entire blame can not be given to media also when Indian politicians also lack maturity and dignity in reacting on incidents involving another country. Just see the statement given by Union Information and Broadcasting Minister Ambika Soni that we should also react similarly towards American film stars and Congress MP Rajeev Shukla (also Vice President of BCCI) when contacted by Shahrukh Khan from Newark Airport to tell about his frisking immediately started contacting US and Indian embassy staffs to help the IPL franchise owner rather than telling Mr. Khan to allow people doing their work. This is very shameful as we are getting into the Security Procedures of other countries.

Now, how much more absurd this whole thing could become? What stops India from frisking all the VIPs of the world? Nothing. Absolutely nothing except our colonial hangover. It is this hangover which allows us to have different sets of rules for different people. What people like Ambika Soni forget is that, not every country has such double standards like ours and what Mr. Rajeev Shukla forgets is not every country is as lethargic about the security of its people as India. So we should not expect other countries to follow our pathetic standards on internal security rather we should learn from them on how to tighten our security apparatus.

We like it or not but what America has insured is that after 9/11 no other terror attack  takes place on its soil and to ensure that what ever they felt right they did. This cannot be debated that it is the duty of every government to protect its citizens from terror attacks and to stop that what ever measures are necessary should be taken if it causes problem to some people then be it. A country which cares for the safety of its people will not change its security procedures so that some so called film star could walk in and out easily.

If Mr. Khan is so hurt by the American behavior then first thing he should do is to cancel the distribution agreement of his film My Name is Khan with Fox Star Studio which is an American company. Then he should pledge that he will not release this movie in USA. Last but not the least he should also pledge never to go to the land which made him suffer so much. But will he do these things to avenge his humiliation? No. Never.

Now the important question is why such a smart and media savvy person like Shahrukh Khan entered in this uncalled for and avoidable controversy? Well there seems to be few reasons for it. To start with we can treat this entire fuss more like a publicity stunt before his next release. Prima fascie it seems Shahrukh Khan was more interested in making his name heard in US so that when his next film releases in US, it gets good opening and run in theaters for longer duration. For that to happen what he needs is, apart south Asian Diaspora others should also come to watch his next release. After selling the distribution rights for nearly 100 Crores stakes are very high for Shahrukh Khan as he has to ensure distributors earn some decent profit on their investment and for this to happen the movie has to become a genuine hit in America then he could be the first actor from Hindian commercial cinema to be recognized internationally and come in the league of Jackie Chan. Also, this hit coupled with sympathy (for being frisked), subject of the movie and muscle of Fox star studio could bring him into a sniffing distance of an Oscar. So stakes are really high. So if Shahrukh Khan’s next release is international hit then he could be in different league altogether.

But so much of ruckus for some cheap publicity is entirely in bad taste.

Many times we have read or heard about an incident changing the course of history or the history of a nation? These deaths may not change the history but certainly it helped us in changing our outlook at a problem staring at us. Now, the important question is why some body has to die for entire nation to sit up and take notice? Was there any possibility that these people would have been saved? Are only those private hospitals responsible for these deaths or failure of the system was also responsible? Well these are some questions that come to mind at the first instance.

Yes, there is a possibility that these people could have been saved, if  only the government had shown some foresight by learning best practices from other affected countries rather than reinventing the wheel in most slow and tardy manner. Also the socialist mindset of health ministry made things worse by restricting screening and treatment to only government hospitals. Both, the state and central governments have not said anything on these deaths and this silence from the government is deafening and is an admission of its guilt.

Above mentioned actions and inactions are just not the only lapses by the government. There are many others too.

First Lapse from the government is in its inability, in ensuring people suffering from swine flu don’t enter the country with out proper screening and treatment. This is so because screening at international airports is inadequate and lack of follow up on the health of people returning from countries affected by swine flu. This has allowed this disease to enter in this country.

Second lapse by the government is its inability in informing people about the symptoms of this disease and other do’s and don’ts. How many of us are aware that only 0.5% – 1% is the range in which infected people have died? So this disease is not that deadly as it is being made out to be and certainly every affected person could be saved if timely treatment is imparted.

Third lapse is inadequate swine flu treatment and test centres. To start with, only 18 centers for treatment for the population of 1.1 billion, that’s shameful and disgusting. It is now that the government has started expanding the network and has started including private hospitals in screening and treatment of swine flu. This clearly shows how much this government cares for the life of ‘aam admi’.

Fourth lapse is, till date no focused action group has been formed to monitor the spread of this disease and to come out with actionable recommendations to control the spread,  effective screening and treatment process and distribution of the flu tablets called tamiflu. What stops government from setting up this action group under eminent doctors from government and private hospitals? After all these hospitals have a very important role in containing and eradicating this flu.

Fifth lapse is faulty process of screening and treatment. An article in Times of India dated 10/08/09 clearly shows how America was able to control this epidemic. The difference between the Indian and American protocol on testing and treatment of Swine flu is very different. While in U.S.A. any patients coming with symptoms of influenza are subjected to rapid test of nasal swab to establish whether the virus is influenza A or influenza B family. The result of tests are available with in few hours and if the patient is found to be suffering from influenza then immediately the patient is put on Tami flu and the sample is further sent to H1N1 molecular diagnostic test.

But in India, first doctor has to be convinced that the patient could be suffering from H1N1 by virtue of his travel history or his contact with flu affected people, then samples of throat swab are taken directly to confirm H1N1. As it is a time consuming test hence it takes a day for result to confirm H1N1 and only then Tami flu is administered and it is this extra time to start the medication which is responsible for worsening of the condition of the patient resulting in death in some cases.

What is the reason for such a lackluster and indifferent attitude of the government? The reason is the people who run it, namely Mr. Ghulam Nabi Azad and Mr. Dinesh Trivedi. Though they both are at center but their hearts and minds are still in their respective states. While Mr. Azad is still carrying a hope to become Chief Minister of J.K. on other hand Mr. Dinesh Trivedi’s priority is clearly West Bengal and forth coming vidhan sabha elections there. So the entire show in health ministry is being run by good for nothing bureaucrats of health ministry who would be more concerned with making some extra bucks by procuring and distributing Tamiflu and accrediting private hospitals for treatment of swineflu.

The only saving grace has been that this flu has not spread into much of the interiors. It is mostly confined to metros and cities barring few towns in Punjab and Maharashtra. Still rural India is unaffected largely and till the time it remains so, it is good for this country. If this flu reaches rural India then this will become full blown epidemic with out any probability of controlling it in near future.

Few days back in one of the discussions on Swine flu at a news channel Minister of state for Health Mr. Dinesh Trivedi was patting his back for wonderful job done by his ministry I containing the Flu. After these deaths and worsening situation will he still pat his back? Or will he wake up and take notice of the real situation and act accordingly.

So it is now upon each individual that how and what they do to protect themselves and their families from this flu. Let’s take all the necessary precautions and keep our fingers crossed and pray to God to save us from swine flu because this government is not capable of saving us.

What if some body says this flu was allowed to take monstrous proportion deliberately so that in the name of fighting an epidemic large funds could be withdrawn and in the name of exigency, tablets and testing machines could be procured at higher rates hence allowing various quarters involved could pocket some hefty amount. After all politicians and bureaucrats are known to make money form the death of people.

This may sound absurd but are we sure it’s completely absurd?

There is another issue where opposition can corner the government and again will find the government clueless is, on the country’s policy on terrorism. This is very surprising and shamefull that even after 8 months of Mumbai attack we still don’t have a well documented policy on terrorism.

After Mumbai attacks there are only 3 things which are heard from government on the issue of terrorism, which are

1)      Better coordination among various intelligence agencies.

2)      NSG hub at other 3 metro cities apart Delhi as it already has one.

3)      No talks with Pakistan, till it take appropriate action against the perpetrators of 26/11.

Apart this, we haven’t heard much from government, and definitely haven’t heard on any thing which would say that so and so is the policy of government on terrorism.

Now lets look at these steps one by one and see how they will remain ineffective.

1)      Better coordination among various intelligence agencies: This line has become a cliché similarly to a media man asking effected people after every calamity “aap ko kaisa lag raha hai?”

Lets recall all the recent act of terrorism/aggression like Kargil war, attack on parliament, highjack of IC 814, attack on somnath temple, serial bomb blasts of 2008 (where nearly half a dozen cities were targeted) or more recent Mumbai attack, what was the first thing government said after every attack? “We condemn this act of terror” and then with out fail it was said “there has to be better coordination among the security agencies”.

A very interesting part is after every terror attack suddenly reports start appearing in media regarding the alert on terror act to concerned authorities.  Like in case of Kargil, intelligence agencies say they alerted army but army says they were never informed similarly in somnath temple case intelligence agencies say they informed Gujrat Government but Gujrat government has some thing else to say also in case of Mumbai attack agencies say they informed state government and state government denies it and similar stories will be planted in media in future also.

But the worst part in this whole scenario is nobody gets sacked, nobody takes the onus only exception being Mumbai attacks where Union Home Minister, State CM and his deputy resigned though not because they felt responsible for it but because UPA felt difficult to go in following general election with them being there.

Till the time there are no heads on the chopping blocks, respective jobs will never be taken seriously.

2)      NSG hub at other 3 metro cities-  Setting NSG Hubs should be considered just one step, of strenghtining the counter terrorism. It should not be taken as a complete act in itself.

Counter an act of terrorism has three steps a) Identifying terror act. b) Cornering/confining the terrorists. c) arresting/eliminating the terrorists.

If we take the case of Mumbai terror attack initially police took this terror act as gang war as lost crucial lead time in putting full force behind terrorists to capture them.

Similarly had Abu Ismail and Kasab been cornered/confined at VT then many lives would have been saved including that of senior officials of Mumbai Police.

The point that I’m trying to make here is, that the first line to counter a terrorist attack is local police because it is the local police which will identify the act as terror act and will try to corner the terrorists or at least try to confine the movement of terrorist. It is later on that NSG will come into action to arrest or eliminate the terrorists.

So apart setting NSG at various locations it is very important to train the local police to the extent even the local beat constable should be in position to take on the terrorists if any such thing happens in front of him.

With out trained local police, damage from the terror act could not be restricted.

3)No talks with Pakistan, till it take appropriate action against the perpetrators of 26/11-

Now this is the most absurd stand taken by any government world over on terrorism, by linking counter terrorism with diplomacy. Why will Pakistan take action against these people? These are the people who are shielded and groomed by Pakistan itself. If it had to take action against them, then why at first place Pakistan would have groomed them? Are we still not clear about the intentions of the Pakistan?

Till date Pakistan has not taken action against 1993 Mumbai blasts accused they how does the government expect Pakistan to act on this? Another point when as a country we are not taking action against terrorism why do we expect Pakistan to take action? Only way Pakistan will take action against the terror groups on its soil is, when it is coerced to do so. America did it now we have to do it. History will confirm that, it is when India has complete upper hand over Pakistan it is only then Pakistan listens and understand, we had 4 such opportunities namely in 1948, 1965, 1971 & 1999 and we let go all the four with out finding the permanent solutions to our problem.

So if India wants Pakistan to act then it needs to have complete upper hand over that nation or should act on its own against the terrorists hiding in Pakistan.

This is a very a very worrying situation as we are still clue less about how we are going to deal with the threat of terrorism form internal sources and most importantly from external sources. But to compound the problem we in India have the scenario where most of the internal act of terrorism have full support of external agencies. In this scenario a clear action plan against the terror groups and their leaders (including those who act behind the scene) is required, which we don’t see happening. Now the question is why? Why government is not acting against the terror group? Why is it depending on Pakistan to act against them? Is it that the leadership of this nation is afraid of these terror groups targeting them? Or are we incapable of acting against these terror groups? How long is India ready to wait for Pakistan to act? Even if Pakistan doesn’t act, then what are the options? These are the questions which all of must be wondering with, but unfortunately there is no reply nor there seems to be any movement to address these questions.

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Recently IRDA (Insurance Regulatory and Development Authority) the governing body of Insurance industry in India came out with a directive to restrict various charges that life Insurance companies were charging from customers on insurance premium.

At first look it looked like an act of catching up with SEBI, on its directive to remove entry load from mutual funds.

Then feeling came that this is an appreciable act which will benefit customers as now they will have to pay less charges.

Suddenly a thought came that with low charges, giving attractive commissions to insurance agents won’t be possible. So now Insurance companies will find difficult to hire new agents hence impacting the growth of over all industry and specially new Insurance companies who as of now have small army of agents. Thus this seems a conspiracy by old established Insurance companies against new insurance companies.

While discussing this issue with some of my friends, I was informed that it could be a move by government to prop up the dwindling market share of LIC as now, selling ULIP will become more difficult so good old endowment plans and money back plans will make come back and these plans are the forte of LIC, hence benefit for them. Well, this theory made sense but there was one question, why will government strangulate the growth of a growing industry ? Which not only provides revenue but is also responsible for direct and indirect employment of lakhs of people.

Another question came to mind was, what stopped all the insurance companies to switch from ULIPs to traditional plans? Absolutely nothing. As these companies have been selling ULIPs so now they will start selling traditional plans. Once these companies start selling traditional plan again there will be the problem of charges.

In ULIP atleast charges are transparent and where the money is being invested is known but in traditional plans no body knows what are the charges and where the money is being invested and still IRDA is calling it a consumer friendly step? There is still some piece in this puzzle which is missing. What is that?

Well by now one thing was sure, that this entire exercise has some thing to do with traditional plans or should we say promoting traditional plans. But why?

Suddenly that missing piece of puzzle was visible. All this is being done to ensure more traditional plans are sold than the ULIPs because ULIPs invest money in stock market while traditional plans invest money in government securities and bonds (as they have to give assured returns) hence this entire money goes to the government coffers.

Now the question is, what is the motive for government to do this? Simple, to generate resources from additional sources to meet the big expenditures planned, in this budget.

This theory could also be confirmed with the timing of this announcement by IRDA which came with in 15 days of budget being tabled in parliament.

Second development which can confirm this theory is SBI has reduced its interest rates on fixed deposits immediately after this announcement by IRDA. While it was talking of hardening of interest rates after the budget.

To understand what kind of money that the government is targeting is, we have to look at the Insurance business in India for financial year 2008-09 and it was approx 88thousand crore(as per IRDA website) including all type of premiums like individual, group and single premium. This we are talking about is for first year premium, imagine what could be the sum if renewal premiums are added to it.

Today more than 80% of this premium comes through ULIPs and goes into stock market but now, as ULIPs are strangulated, Insurance companies will move towards traditional plans and just imagine what kind of money government will raise through securities and bonds if say 80% of insurance business starts coming from traditional plan. Add renewals to new business every year and imagine a big chunk of it coming through traditional plan and going to government securities and bonds. Well government has insured itself with continues flow of large cash in its coffers with out  impacting the credit flow in the economy.

Further this new regime is being implemented from 1^st October, and major chunk of the business for insurance industry comes in last 6 months of the financial year. Which by some estimates is as high as 75%. So inspite of government forgoing 6 months of this financial year, actually will not loose out much on, investment.

As I have discussed in my previous blogs, this budget leaves government with no option but to print money and go for large borrowings form the market. With targeting money from life insurance industry what government has done is, to larger extent has restricted it’s borrowings from banks and financial institution hence restricting the liquidity crunch and rising interest rates. Some smart move by finance ministry.

Now will they promote the sarkari babu who would have thought this?

Every silver lining is found with clouds. The bad news here is Indian stock markets will become more dependent on whims and fancies of FIIs and over all growth of stock market will be impacted.

Also what if moving from ULIPs to traditional plans impact the over all sale of the insurance industry ?

Now lets wait and see more antics of the finance minister and his team to fund the deficit in its budget.

This killing of Arif by the terrorists is neither the first of its kind nor its going to be the last. The way India is dealing with terrorism has left a lot to be desired. The first and the biggest problem is that India is trying to deal terrorism with diplomacy. For gods sake how a nation of over one billion is committing such a big blunder. Purpose and out come of diplomacy is all together very different from the solutions, for terrorism.

Diplomacy is more about discussing bilateral and multilateral issues. Like, issue of Kashmir could be discussed between India and Pakistan and some solution could be arrived at. But issue of terrorism in Kashmir or in other parts of India could never be solved by diplomacy or discussion.

Then what is the way out for this problem of terrorism? Solution and answers depend on individual to individual and government to government. But I would like to mention the response of two different nations on two different acts of terrorism.
First is the most atrocious act of terrorism against United States of America by Al Queada on 11th September 2001. We all know what was the response of USA in retaliation of this terror act. Most of the people will agree and some will disagree with the American response. But matter of the fact was American response was not diplomacy, as they knew diplomacy is non starter in case of terrorism.

Second case dates back to 1972, when during Munich Olympics all the participants from Israel were kidnapped and murdered by a Palestinian terror group called ‘Black September’. The response of Israel was in form of “Operation Bayonet” or to put it simply “Operation Wrath of God”. With out going into much specifics and details of the operations lets see the result, which was, that all the plotters and executors (except one) of this act were eliminated (in different countries of Europe and over many years) and the group” Black September” could never take any other terror activity. The remaining one who is still alive is underground in some African Nation. One point that is worth mentioning is security agencies of many European countries helped Israel in gathering the information on the plotters of this attack.

What stopped India from taking stern action against the plotters of Mumbai blast of 1993? Had India taken a decisive action against those people then most probably other blasts in Mumbai and terrorist activities in other parts of the country could have been averted. Same thing is with 26/11 Mumbai attack. Why are we expecting Pakistan to act on the people whom it had sent to execute this act? Pakistan will never do it. Rather, these perpetrators would have emboldened with India’s inaction and would be planning another heinous act against it.

Though terrorism is the global problem but there cannot be a global solution to it. Every act of terrorism must be dealt separately and severely so that other terrorists at least have some fear in their minds while plotting a terror act.

Till the time our government realizes that India has to fight its terror problem on its own and acts tough against these terror groups, there is no guarantee that other Arifs will not be killed in terror attack. What India can expect from other countries is some support in intelligence and logistics but India has to fight its own battle and no one is going to do it on its behalf.

On lighter side the immediate provocation for the government to act very tough against the terrorists is to remove security cover from all the politicians. Once this cover is removed automatically this nation will become terror free as politicians will ensure that government takes toughest stand against terrorism.