My FiL

 

To be honest, it was only my father's  passing five years ago, that made me appreciate the solid presence of the Father in Law (FiL), Dr. T. S. Vasan. Till then he was only the wife's father. But before I go on, a confession is in order. When I got to know   twenty seven years ago, this petite girl who I thought is someone I can spend my life with and to my good fortune, she also demurred, I came to know of an unexpected. That her father is an astrologer. It sounded strange, but more of that later. The kindly and wise visage noticed on meeting in person ( 'in person' would have sounded strange at that time, there being no other way of meeting!!) alleviated the unfamiliarity.

At his passing, I'm  reminded of the Mahatma's well known quip - my life is my message(or something to that effect). I discern several messages, rather lessons, from the life of Dr. Vasan, that ended on 9/11/20 a little after 86 years.

ZEST FOR LIFE
A child-like curiosity that he retained almost till the last few days, made Dr. Vasan, open to anything that life and surroundings threw up. He matched any youngster in upgrading cell phones, upgrading his wardrobe or searching the web for the latest trends in technology. Hailing from pre-digital generation, he easily migrated to the digital-migrant generation like me and was comfortable with the digital-native like his grandson. He retained an open mind to learning of new things, watch movies and serials on Netflix and Amazon Prime. I got to gifting a copy of Yuval Harari's 'Ascent of Sapiens' only for his 86th birthday two months ago, that I don't  think he got to read. It remains a regret that  I couldn't get response from him, who was on authority on Indian astrology, on Yuval's propositions on human history, culture and religion. I was too late.

ARROGANCE OF KNOWING BY HALF
We grew up in an environment where an occupation to provide for a decent life for self and family could be that of a doctor,  a lawyer , an auditor or land a salaried job, ideally in government/PSU/ Bank/ multinational co. or a teacher. Musician? May be,  but does it pay to make ends meet? There were several other odd jobs and occupations that people pursued, apparently not out of choice but out compulsion having missed out on any of these. Astrologer? 'Are you out of your mind?' wouldn't  have been a surprising counter to this suggestion. More so as that generation was imbibed with the vigor of  confidence in rationality that trashed anything that didn’t fit into the framework of rationality.
A person, hailing from an older generation when the freedom to choose an occupation was a luxury to most young people, choosing astrology as a profession, is something, I find extraordinary and extremely courageous. It becomes more remarkable when considering the fact that he was a qualified lawyer who had joined the Bar and had practiced for a while. Thus, it was a deliberate choice he made giving up another more attractive and lucrative profession. This is the courage part. And that is not all. It is but natural that he would have faced and sensed skepticism of his profession from numerous people around him. That he not only overcame such skepticism and was respected by not only his clients and students but also people knowing little about Indian astrology.  His mastery over his craft, his deep insight in this field of human knowledge that made him devise new methods of predictions and most important of all, the confidence he carried while putting across his views to the believers and skeptics, I’m sure, disabused many a skeptic recognize own arrogance of knowing by half, as I did. In this era, when well put 150 character expression can make a person, a celebrity and worse, an authority in any field of study, this arrogance is all pervasive. Never mind how much I know or whether  I appreciate the insights of the subject or not, superficial awareness is adequate for me to go forth and pronounce online a person demented or a field of study, heresy. When challenged professionally, his patience in explaining his craft, its logic and philosophy as also his confidence backed by his deep knowledge, showed up what I call the arrogance of knowing by half. Dr. Vasan showed me the need for me to recognize this myself.

PROFESSIONALISM

It was his desire to take up what his father had inherited and pursued that made him give up his legal career and dig into the documents and records his father, Pandit Sharma, had left behind, to start practicing Indian astrology. The remarkable fact about this is that, both Pandit Sharma and his wife, Rathnamma, passed within a year leaving behind a 17 year old Srinivasan (to become better known as Dr. T.S. Vasan later) and two younger sisters orphaned who were cared for by their aunt. Thus, it was almost fifteen years after his father’s passing that Dr. Vasan went about learning Indian astrology from the documents, books and papers his father had left behind. And indeed he did, to eventually become one of the most respected authorities in the field of Indian astrology. Thus, he inherited a tradition that he nurtured and made a profession of.  Unusual though his profession was, even in those times, in the seventies, eighties & nineties in the last century,  he persevered, dug deep to build up his knowledge and understanding of the subject to, not only become a scholar but to also practice and make a living off it. As I heard several of his students pour out their grief at his passing and express their respect for his scholarship during online condolence meetings , the thought that crossed my mind was – unlike most of them and most of his contemporaries, astrology was not a hobby, but his chosen profession, source of living for Dr. Vasan. His devotion to astrology was near total, everything else was secondary. Not only was he proud of his profession, he practiced every aspect that define a professional – deep knowledge, developed tools that added and facilitated smooth practice, client satisfaction and, punctuality.  He showed that the age-old wisdom from Manusmrti -  धर्मो रक्षति रक्षितः is a truism.

 

GENEROUS TO FAULT
It was probably the poverty (even by the standards of living in the middle of last century when Dr. Vasan was in his teens and twenties) that he survived that made him generous in his later years. He was generous in helping people, known and unknown, and more of people underprivileged – the maid servant, poor students or a relative in financial difficulties that found a ready benefactor in him. Not that he was careless with money, he certainly was not and accounted to himself for every rupee expended. He was clear on what can money be spent on and for what purpose. He is a textbook example to quote to substantiate a popular piece of wisdom that is shared generously – The more one gives, the more one gets. I can’t say if he believed in this, but for sure, he gave generously without expecting to get, but get, he did. It was not only generosity in kind that defined him, it was as much the generosity of heart. His ready smile, the pleasant demeanor, empathy  and patience that made a friend to numerous generations – his own, his children’s and grand children’s. And probably it is this quality that helped him excel professionally.

 

FOCUS

He had this ability that he had developed by practice to shift all the focus on to the project at hand. Be it a seminar he had to preside over, a paper he was publishing, a book he was writing or the next client meeting. All the attention would be diverted to the task at hand and nothing and none could divert him from that. Pleasant though he was almost to a fault, I found him irritated if disturbed at his task. He had a trick to avoid such irritations – he would completely ignore any diversions from anyone. Its fair to say, it is this focus and passion he brought to anything he did, at the ripe age of 86, that gained him respect from the outside world, even if it gained reprobation of his dear wife and children. You don’t expect your 85 year old spouse/ parent  to tick you off when interrupted while he is reading/ writing, do you? A typical 85 year-old should have all the time on the world to, indeed, waiting, to listen to the spouse/ children, isn’t it? Well, Dr. Vasan was different, he was much younger than his chronological 85 years and he certainly had not ‘retired’.

 Dr. Vasan, my FiL will be badly missed. 

 Covid-19 Loan Resolution Framework

The collateral damage from the Covid-19 pandemic has, arguably, been and will be more devastating or at least as damaging, as the loss of lives and livelihoods the pandemic itself has caused. In the Indian context, one of most strict lock downs was put in place during March – April, 2020, to prevent immediate spread of the infection. One of the collateral damages has been the stress caused to the loan portfolios of Banks whose exposures to  Indian businesses, big and small, in both manufacturing and service sectors, that suffered almost total loss of revenue and liquidity for the period of lock downs and subsequent months when local restrictions and loss of confidence and fear are still preventing resumption of normal business activities.

The moratorium announced by RBI in April, 2020, was an emergency palliative to let borrowers avoid default. But as recognized by everyone involved, moratoria, however elongated, cannot be a cure. On the contrary, longer freeze of debt servicing would only make it worse, as interest for the period of moratoria cannot be wished away, much as people may hope to. In no time will the lenders’ capacity to service their deposits be affected shaking the very foundations of the economy.  Recognising this, government announced substantial relief measures to the MSME sector in June, 2020 through  debt restructuring, additional long term funding support to the lenders  and even equity support to entrepreneurs.

For other businesses, RBI devised a new framework [1]for management of stress in the asset portfolio of Banks. This framework comprises the following salient features.

1.       This framework is applicable to any financial stress caused ONLY due to Covid-19 pandemic and thus for a borrower to avail of the reliefs in this framework, the exposure of lenders to a borrower eligible otherwise, should have not been in default for more than 30 days on 1^st March, 2020.

2.       RBI had set the timelines for this framework earlier that the eligible borrowers should be identified latest by 31^st December,2020 and the resolution process should be completed within 90 days in case of personal loans and 180 days for non-personal loans,  from initiation. Further, ‘completion’ of the resolution has been defined –

a.       Completion of all the related documentation with the borrower and between lenders,

b.      The restructuring changes actually reflected in the books of the lender and

c.       Under the revised terms, borrower is not in default.

3.       The stress resolution plan can include

a.       moratorium,

b.       rescheduling of the repayment terms like number of installments,

c.       conversion of interest accrued and to be accrued into future installments, based on the assessed income streams of the borrower, extending up to two years.

d.      Conversion into equity any part of the outstanding debt or other marketable debt instruments

4.       In case of borrowers with multiple lenders, the resolution plan should be approved by all the lenders through an Inter Creditor Agreement (ICA) within 30 days from the day the plan is invoked. Further, if at least 60% of the lenders (75% by value) do not join the ICA within these 30 days, the resolution plan fails and there can be no other resolution under this framework, i.e., for Covid-19 caused stress.

5.        The ICA should also have mechanisms for redressing differences and disputes among the lenders and RBI will not interfere or arbitrate.  The resolution process will stop if any of the timelines are breached or any inter-lender disputes remain unresolved.

6.       An independent credit evaluation (ICE) by  a credit rating agency (CRA) is mandatory for approving resolution plans for aggregate exposure of 100 crores or more.

7.       Borrowers not covered in this framework are:

a.       MSME borrowers with aggregate exposure of 25 crores

b.      HFCs  where a restructuring  has already been done)

c.       Agricultural credit  and related intermediaries like Primary Agricultural Co-operatives

d.      Governments – central, state or local and corporate set up by an act of Parliament and undertakings

e.      Financial services providers.

 To quickly rollout the framework that Banks can implement, RBI set up a committee headed by K.V. Kamath,[2] ex- CEO of New Development Bank and ex-Chairman of ICICI Bank Ltd. to suggest sector-specific financial parameters  any other conditions for preparation of the RPs. This committee has also been mandated to validate and monitor implementation of the RP in case of borrowers with aggregate exposure of 1500 crores or more to ensure adherence to the framework without going into the commercial judgement of the lenders.

Highlights of the Kamath Committee are

1.       Looked at the sectors substantially funded by the banking sector and  impacted by the pandemic and classified the sectors into four categories –

a.       11 sectors like construction, auto, NBFC, etc. that had pre-existing stress and were also impacted by the pandemic

b.      19 sectors like retail and wholesale trade, cement, tourism and travel, that did not have any pre-existing stress but were impacted by the pandemic,

c.       2 sectors – telecom and tea that had pre-existing stress but were not impacted by the pandemic

d.      11 sectors like agri and allied products, food products, FMCG, that did not have any pre-existing stress and  were not severely impacted

Sectors were classified based on varying severity of impact - mild, moderate or severe. 

2.       The financial parameters that should be considered for preparing the RPs are

·         Total Outside Liability / Adjusted Tangible Net Worth (TOL / Adjusted TNW)

·         Total Debt / Earnings Before Interest, Depreciation, Tax and Amortisation(EBIDTA)

·         Current Ratio

·         Debt Service Coverage Ratio (DSCR)

·         Average Debt Service Coverage Ratio (ADSCR)

3.       Based on the severity of impact of the pandemic and exposure of the lenders, 26 business sectors have been identified with financial parameters to be considered for RP.

4.       The range for the financial parameters have been defined for these sectors with broad guidelines –

a.       The RP may be prepared based on the pre-Covid-19 operating and financial performance of the borrower and impact of Covid-19 on its operating and financial performance in Q1 and Q2FY21, to assess the cash-flows for FY21 / FY22 and subsequent years.

b.      The threshold TOL/Adjusted TNW and Debt/ EBIDTA ratios should be met by FY23.

c.       The other three threshold ratios, viz., CR, DSCR and ADSCR,  should be met for each year of the projections starting from FY22. The base case financial projections need to be prepared as part of RP.

d.      Lenders may determine their own range for other sectors for which the parameters have not been defined with the baseline parameters of CR and DSCR of 1.00 and ADSCR of 1.20.

5.       For a few sectors, exceptions have been defined based on the industry nature and practices  like

a.       Automobile sector that practices Just In Time (JIT) principle for inventory,

b.      aviation sector that finances its aircraft largely through debt refinancing and work cash & carry model for revenue, carry advances form customers and up to 9 months’ credit from vendors,

c.       Roads sector to which ratios like TOL / ATNW, Debt/EBITDA and Current ratio may not be relevant

d.      Wholesale trade that does not normally raise term debt and hence DSCR and ADSCR are not relevant.

e.      Real estate borrowers’ assessment should be based on individual projects.

With the broad guidelines on preparing the RPs and the specific parameters on which the borrowers may be assessed to prepare the RPs, the framework is ready for the lenders is ready to go.

There have been comments that the requirement of formation of ICA is impractical and would lead to delays. The Kamath committee has also mentioned about the efforts required in identifying eligible borrowers, assessing the impact of the pandemic, structuring the RP and coordinating with their lenders to form working ICA but has probably for lack of mandate, hasn’t suggested any relaxation of the timelines. Thus the lenders’ position is hardly enviable.

Apart from having to bear the heavy additional load of stress in their asset portfolio due to the pandemic in addition to several other challenges they face, they also have been gifted very tight timelines to devise and implement the RPs, the success or failure of which will impact them. And they have two monitors to deal with – RBI, the regulator which has also stated that compliance with these requirements ‘shall be assessed for all lending institutions as part of the supervisory review’ and the Kamath committee to oversee RP implementation in case of large borrowers. One thing is for sure - Indian Banking is a sector that will be under very close scrutiny both within and from outside, in public and private, for the foreseeable future.

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[1] https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11961&Mode=0

 [2] https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=1157

 

Timely Move

 

RBI’s helping hand to banks - August, 2020

Who else but RBI to come to the rescue of Indian banks, groaning under several loads, bad loans being the heaviest, that have rendered them almost crippled? In February, 2018, RBI issued a direction to Banks[1] with a stern instruction to resolve non-performing loans of large corporate borrowers, even identifying the 12 largest and most painful borrowers. Not just that, the direction also mandated a clear break from the past goading banks to move towards time-bound  resolution of bad loans by putting to use the new Insolvency & Bankruptcy Code (IBC) and the very way banks recognize default. Due to the legal challenges that this instruction faced, RBI came out with revised direction in June, 2019[2] that retained the gist of the February, 2018 direction. Both of these kept the stressed Small & Micro loans, exposures to finance companies, and retail loans out of their purview.

The moratorium on loan servicing announced by RBI ends by August 31, 2020 after an extension. Obviously, moratorium is only a pause, to help businesses and individuals to manage with the lockdown and consequent economic fall out and was just a temporary relief during a crisis, at best, something that could not continue. Banks have also been very apprehensive of the health of their loans as the interest and installment s for the moratorium period will need to be collected in September even though the economic fallout of the pandemic, that is still expanding its spread, is deep and will last for years, certainly not months. Thus, an extraordinary measure to provide relief to Banks, yet to fully overcome the legacy loan impairment problem, who fear a major hit on their loan portfolios, has been , not just an expectation, but a necessity. On August 6, 2020, RBI has issued a resolution framework[3] for stressed loans, specifically caused as a collateral damage of Covid-19 pandemic. Given that even the latest direction also dealt only with large borrowers (with aggregate exposure of at least Rs. 25 crores), it is obvious that, not only is large bad loan resolution very much a work in progress, it is only getting bigger.

The latest direction, unlike both of February, 2018 and September, 2019, has not left the resolution structures to the Banks. It has been left to be devised and even monitored by an expert group headed by K.V. Kamath, ex-ICICI Chairman, just back after stint as President of New Development Bank in Shanghai. Banks have largely used the structures, , that had been mandated by RBI earlier from time to time, but withdrawn while issuing the February, 2018 direction, with slight modifications and customization for resolving their impaired assets. The resolution mechanisms have included loan restructuring by extending the servicing periods, separating a non-serviceable portion to be converted into a security, reducing the interest rate, replacement of the promoter by another investor, change of management, conversion of a portion into equity, writing off a portion of the loan as loss and if none of these are feasible or fail, liquidation through the IBC framework.

It is not as if everything has been left to the expert group to decide. The framework within which any resolution plan is implemented by Banks, has be advised by RBI. The broad contours are:

·         The new framework is applicable only to

o   personal loans, corporate exposures and MSME exposures exceeding Rs. 25 crores.

o   loans that were classified ‘standard’ and were not in default for more than 30days on March 1, 2020 and on the day the resolution plan is invoked.

·         Where more than one lender is involved, the resolution plan should have the approval of at least 75% by value and 60% by number of the lenders.

·         The resolution plan should be invoked before December 31, 2020 and should be implemented within 90 days for personal loans and 180 days for non –personal loans.

·         The expert committee will vet the resolution plan for all exposures of Rs. 1,500 crores or more.

·         Any extension in the loan servicing term should not exceed 2 years.

·         While conversion of loans into non-convertible security or equity should stick to the guidelines already in place under the prudential norms[4], conversion into any other security should be at a collective value of Rs. 1.

·         In case of personal loans that are put through a resolution in this framework, Banks should provide as per the existing norms for loan loss provisioning[5], minimum 10% of the renegotiated loan under this framework.

·         Banks can write back the additional provisions made in two stages provided the borrowers repay at least 20% and another 10% of the renegotiated loan.

·         If there is a default on a non-personal loan under resolution monitoring period till payment of the second installment of 10%, a review period of 30 days is triggered. If there is no payment within the notice period and the loan remains in default, the loan will be classified as NPA.

It becomes clear that this framework is exclusively for the help of borrowers to manage the liquidity and loss of business due to the pandemic. Neither banks for their existing stressed portfolios nor the delinquent borrowers can hope to get any relief in this framework.

 It demands very swift and systematic action by bankers to identify the eligible borrowers and implement workable resolution plans within tight timelines, something that neither Banks nor the borrowers have a good past record in. But then, it is a need, more of the borrowers and banks themselves, more than of the regulator. We will be able to see within a year if this worked and to what extent.

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[1] https://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=11218

[2] https://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=11580

[3] https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=11941&Mode=0 

[4] https://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=9904

[5] https://www.rbi.org.in/scripts/NotificationUser.aspx?Mode=0&Id=9908

Nursing SME

Small and Micro Enterprises (SME) top the public dialogue today on surviving the Covid19 pandemic in India. And why not - SMEs as a sector is the highest employment generator with more potential, the largest source of exports and a relatively lower contributor of non-performing loans (NPL) to the financial sector. In the immediate post-pandemic situation when employment and re-employment should demand the big attention of the government, SMEs naturally claim the top priority. While it is true that the space for free suggestions is already crowded, most such suggestions fall into three categories - industry lobbies that mostly seek freebies, waivers and reliefs, lenders' appeals that seek regulatory reliefs to help them postpone or avoid making provisions for the expected loan losses and government's own internal (selectively leaked) plans to dole out subsidies while increasing bureaucratic control over the sector through more controls, approvals, releases, etc.. There isn't much time for the government to study through committees and review their reports through more committees.  There is a economic and social disaster just about to unveil without big, laid out action plans.

Here are a few thoughts from an end, that isn't part of the SME sector, lender or from within government, on strategy for nursing the SME sector to back on to its legs from its current state of Shavasana. Two caveats are in order - 

1. It is assumed that the country and the government are ready for a bout of fiscal deficit putting the FRBM in a short nap of a few years,

2. No numbers are used here as the numbers are all with the support system of the decision makers..

Immediate challenges of an SME are   

1. Immediate financial obligation servicing - RBI has given a 3 month holiday which, in all likelihood will get extended. But that only postpones the inevitable and makes it worse as SMEs can, in no way, be expected caugh up interest for past 6 months in one go.  The payment after 3 months or later will have had compounding  effect as no Bank will forego interest on amounts due. Hence, that's a postponement of a problem, not a solution. It is just the oxygen while ventilator. to be weaned ASAP.

2. Activity is closed with zero cash flows, but fixed overheads, including salaries, are piling up, putting the post-pandemic future  with a big handicap. Effectively, 2-3 months' fixed overheads is an additional liability that future earnings (whenever operations recommence) have to bear. An SME will continue to be strained for liquidity over the next 2 - 3 months after the restart till they reach normal levels of activity.  SME will need funding support that does to put its recovery phase in a serious handicap of having to immediately absorb this absorbing these funds in their cash fows. 

3. Getting back contract labour - given that anything from 20% to 50% of the workforce is on contract basis in a SME and these temporary workers would have moved away and may not return in full strength, at least for some time, quality manpower in the short term is a challenge. A reduction in the wages and salaries to manage thruough the difficult period of recuperation may be acceptable in the market. But some of the savings from that may also be consumed by the higher wages that firms may have to shell out to get back dispersed essential labour. In sum, it will be a premise for increased working capital funding in short term. No better time than now for government to push through long pending labour reforms to provide flexibility to the promoter and freedom to the worker and universalise social security cover to unorganised labour.

4. Supply side - the lock down having made everyone sit on unsold stocks for 2 months or more, the average purchase cost would be lower initially at re-start and even over the short term. This helps the SME reduce the costs and some of the reduction may persist and be sustained over longer time based on the demand supply situation.

5. Demand side - customers off take would be lower and given that some kind of social distancing norms will persist in the near future, demand may not reach attractive levels or even break even levels for sometime, even up to 2 years. Challenge will be to sustain the business with cash support that may be required for longish times, even  up to 2 years.

6. Given the overall cash flow crunch across the system, an obvious problem to be expected in delayed payments by customers who are typically medium or large corporates.

7. Unlike previous instances of difficulties, this pandemic has most of European American markets which are the major export markets for SMEs are affected to an extent unseen by many of the current generation. This also opens a window of opportunity for Indian SMEs to gain back their market share. The erosion of trust in the China and its super - efficient suppliers also provides a never - before opportunity to Indian SMEs expand their market share.

8. Given this, it is two needs that are obvious - immediate liquidity support, help in gaining financial strength to to quickly get back to normal working and strategic support to join the global supply chains that have been dominated by China for sometime now. The immediate action points:

(i) firms need long term funds to the extent of anything from three to 5 months' sales, an amount that can be expected to be nearly twice their existing working capital loans and far more than an amount that they can take on as a regular loan to be serviced, even in a short term of 1 -2 years. But that means forcing the already reluctant banks to to do unattractive loans. But these loans should be made attractive to the Banks on one hand and affordable to the SMEs. This can be through a combination of the following two ways.

(a) Medium term loan to fund 66.67% of this requirement with 5 years' repayment period with a six months' holiday, that shall be backed up by first loss deficiency Guarantee (FLDG), to the extent of 25%  by  Credit Guarantee Fund Trust for Micro and Small  Enterprises (CGTMSE). The SME shall pay a commission in the normal course for this guarantee to CGTMSE. Given this mitigant the loan becomes attractive to the Banks and sustainable to the SMEs whose payout, including the guarantee commission, in the first half year will be at little above RBI's Repo Rate, say around 6-% in the near future, The FLDG from CGTSME should be restricted two years from disbursement subject to half - yearly review.. 

(b)  Provide a subvention of 2% of the discount rate for bills of SMEs that are put out through Trade Receivables & Credit Exchange (TCE) of RBI for trading. With an initial nudge guidance from RBI, banks will move to TCE to finance the receivables and book debts of their SME clients, also followed by corporates once the volumes pick up. This will  also gradually help in price discovery for SME funding.

(c) The remaining 33.33% of the funding requirement should be provided as equity by the central government through a trust set up for this purpose. The trust should have government representation but no control. While it shall be funded by the government, it should have a specific timeline to dissolve itself. The dissolution can be through liquidating its holdings first by the respective SME promoter and to any other bodies like industry associations or investment funds pension funds, etc.. A suitable exchange that makes it easier for SMEs to be listed with on the lines of NASDAQ is a natural development that SEBI can help incubate. This would also provide an opportunity and incentive to SMEs to go public to grow.  

(ii) Not all SMEs would be able to sustain operations and continued support to those that are unable get out of their difficulties within a period of one year may end up being good cash down the drain. The CGTSME cover should be subject to review on a quarterly basis subject to lending bank's review. Either at the entrepreneur's initiative or as a result of bank's review, a quick liquidation process may be initiated under IBC. It requires a tweaking of the IBC to make it an exclusive process for SMEs by permitting the process to go under retail liquidation process that has much shorter timelines than than the normal corporate insolvency process.

(iii) the costs involved in these steps to the exchequer are - the losses that CGTSME may suffer on the FLDG net of the commission it collects from SMEs and the 2% cost of subvention on bill finance through TCE. Both of these should be provided by the central government through budgetary allocation. 

(iv) One the second need, the brilliant minds at Niti Ayog and the central ministries and industry bodies are, for sure, already at work and it would be  a fallacy to attempt adding anything what they already know and will articulate.

All of these require quick government action, both legislative and administrative and regulatory action.The most important point is immediate, comprehensive and effective implementation, JanDhan accounts and Ujwala cooking gas connection would be good benchmarks to follow.

  

A story

Once upon a time, a cow went out to graze in the jungle. Suddenly, she noticed a tiger racing towards her. She turned and fled, fearing that at any moment the tiger would sink his claws into her. The cow desperately looked for someplace to escape and at last, saw a shallow pond. Barely evading the tiger’s reach, she jumped into the pond, and in the heat of the chase, the tiger blindly leaped after her.

To the surprise of them both, the pond was extremely shallow yet filled with deep recesses of mud. After toppling over each other, the cow and the tiger found themselves a short distance apart, stuck in the mud up to their necks. Both had their heads above water but were unable to free themselves no matter how much they writhed.

The tiger repeatedly snarled at the cow and roared, “I am going to enjoy the sound of crunching your bones between my teeth!”

He thrashed about in fury but soon became fretful as he found no prospect of escape.

The cow thoughtfully laughed as the tiger struggled to free himself and asked him, “Do you have a master?”

The tiger disdainfully replied, “I am the king of the jungle. Why do you ask me if I have a master? I myself am the master!”

The cow said, “You may be the king of the jungle, but here all your power has failed to save your life.”

“And what about you?” Retorted the tiger. “You are going to die here in this mud too!”’

The cow smiled mildly and said, “No, I am not.”

“If even I, the king of the jungle cannot free myself from this mud”, snapped the tiger, “Then how can you, an ordinary cow?”

The cow gently replied, “I cannot free myself from this mud, but my master can. When the sun sets and he finds me absent at home, he will come looking for me. Once he finds me, he will raise me up and escort me home sweet home.”

The tiger fell silent and coldly glared at the cow.

Soon enough, the sunset and the cow’s master arrived. He immediately recognized the plight she was in and lifted her to safety. As they walked home, the cow and the master both felt renewed gratitude for one another and pitied the tiger they both would have been happy to save if only the tiger had allowed them.

The cow represents a surrendered heart, the tiger represents an egoistic mind, and the master represents the Guru.  The mud represents the world, and the chase represents the struggle for existence therein. 

*Debrief*

Its good to be independent and not rely on anyone. But don't take it to an extreme, you always need a partner/coach/mentor who will be always on the lookout for you. 

Having them does not mean you are weak, it's just that you can be stronger with their help. 

Make sure to share this story with your partner/coach/mentor and express your gratitude.

I didn't write this story but received it in a group. It seeks to make a compelling story for  the author who ​intended to stress the importance of a mentor, it got me thinking​. Prima facie, there can be no argument over the premise that ego comes in the way of ​actual learning and the importance of a guru/mentor can only be understated. It, however, also raises another question - can everything there is to know come from a guru/mentor ? Aren't there revelations that may come from contemplation within, for instance, to know about oneself ?  

The Spoken Word

The Spoken Word

  

A word out of place or a wrongly timed opinion is something, I reckon, few would have missed. It is awkward when  your spouse or close friend is the source. You look away, develop momentary dumbness and if you can gather sufficient courage, mumble something meaningless and pray the moment passes fast. It rarely does, but in as much as your awkwardness is secondary, you brave through it and soon forget about it. It is altogether another thing if you are the perpetrator. And there is nothing like first- hand experience.

I had one such occasion a few of days ago. There is no gainsaying I’ll forget  about it, I have not. It is nagging a part of the mind space that has been rendered  unavailable for anything else leaving the biological RAM deficient and slow.

There was this (what I thought) challenging post in a WhatsApp group that accused people of not finding it worth their while even to respond,  a plea to spare sometime for a social effort after the New Year Party, leave alone joining, even as there were tens of messages exchanged on many other trivial topics. I confess I felt challenged unfairly by this post. I felt a need to respond given the sharp note in that post. At the moment, the dominant thought in the mind was – it is unfair to challenge friends in a voluntary group where you exchange pleasantries, jokes, some info, pictures & videos to make others feel good, into committing their time & efforts into an activity, with  righteous inveigling intended to generate guilt. Perceiving the barely hidden but unstated accusation of inadequate commitment to social responsibility here, I felt it my duty to challenge lest it goes unchallenged. What is the best way to challenge – say yes/ say no/ say who are you to ask me/ say why should I have to say yes or no ?

At the moment, I wasn’t ready to respond with any of these though, the instinctive feel  was veering towards the last.   It was not the first and the other two carried the impoliteness about them that I was not ready for. But the mind was made up on a response, whatever it be. It worked towards an expression that implied the last but cannot be held to have implied so. A convenient method the mind has adapted occasionally earlier, is to bring in an expression of self denial of some sort. This has the comfort that it silences others as there cannot be a combative response to an expression of self denial. It also leaves me with a feeling of superiority and what causes it ? A sense that this expression would leave an unpleasant feel bordering on guilt in the perpetrator.  Emotional sophistry, if I may.  The strategy rolled out again and I posted ‘Given what is all being demanded, I will follow Ram and henceforth avoid saying anything in this group.’  Ram, of course, is my pseudonym for another friend in the group who had been active earlier but has become totally quiet now. His silence was the result of an acrimonious exchange in which people of his kind were called sanctimonious dishing out gyan sitting in their ivory towers far away from the scene and hence less patriotic, or something to that effect.  That it was the same friend who made the ascription at both the instances gave me a precedence to quote.

It did not end there. The time that followed did not leave me in peace, somewhere in the back of the mind was an itch to elaborate vigorously to any aggressive/ pained responses. Alongside was a lurking suspicion that ‘foot in the mouth’ disease had set in.

That there was no response at all ensured that the itch wore itself out, but still no peace. How I wished there was some response!! It might’ve helped me indulge a little more and sprout wisdom. in A new question arose – why did I say what I did and further what was the compulsion to say anything at all ? The barb was not directed at me in particular, none else, not even some who could have felt more challenged than me, had responded before me or later. Was it to display righteous indignation and hence establish some kind of moral superiority ? Was it to announce my presence?

A confession that the answer is vaguely positive to all these questions is the first thing in order. That that is not reconciled yet is the question that irrespective of my motives, isn’t it necessary to challenge such abrasive behaviour online ? Silence in response may be a strategy indicating studied ignorance, but can’t it also be taken to be tolerance or even acquiescence ? Didn’t the great Einstein say ‘ World is a dangerous place to live not because of the people who are evil, but because of the people who don’t do anything about it’ ?

Then the left brain said –as always in a situation, there can be an instinctive response, a weak response, a strong response, measured and deliberate response or no response. How you respond is based  on the context of the stimulus, the content & tone and the state of the receiver’s mind. A post that is provocative but not addressed to any one in particular, expects a reposte but escapes the burden of  specific target. In as much, it is a broadcast announcing the writer’s intent to poke people into action or provoke people into a discussion. And a cry for recognition.

More the ingesta chewed, clearer it became to the mind that my position and motives were not really different from those of the friend whose post got my goat in the first place. I wanted to stand out taking a position, provoke responses and grab attention – the same motives that are easily ascribed to him. What the great man certainly practiced was – don’t take yourselves too seriously, even if he didn’t say as much. Well, given what he was, whatever he said had be more profound, like this.

The realisation that the rest of the people saw this, ignored both the posts and possibly chuckled in the privacy of their anonymity quietened the mind releasing the preoccupied mind space for other more current thoughts. There is 24*7 reality TV, commonly known as news channels, that ensures that there is always something current, very helpful when the RAM in flesh at the top has space to spare. The lingering thought is, this is not going to be their last chuckle at my cost.

Anna

Anna

There was no midwife, but then, in the chill December of 1934 when most Indians lived in villages, less than a tenth of the expectant women had access to medical facilities as we know today. Not that there was no help at all. The mother, the grandmother, aunts and the village’s maternity assistant, the delivery assistant was there at hand to help the 22 year old Rukmini deliver her second child, also a boy, at Neelathahalli, in her maternal home, on or around 24^th December. It’s a fair estimation that what was lacking in proper medical facilities was compensated for by the love, care & affection showered by the mother & the grandmother. The bigger factor, probably, was the tolerance for pain and stoicism that girls were ingrained with by their mothers and grandmothers.

This was the second child of Rukmini, another boy, a matter of no disappointment for the mother, father or the family. A boy was always welcome in those days. In any case, there will be so many to come, surely there will be at least one girl - a line of  thought,  so outlandish today in an urban setting, but not so at all in many parts India even today.

After five months of careful & loving nursing, Rukmini was ready to go back to her marital home with her two sons,  the elder one being an already aggressive four year old. While Srinivasa, Seenasamy to his friends, was an appropriately restrained father, Shrngaramma the proud grand mother had no reasons to control her joy. Thus started the childhood of Sampattu, later to be known officially as Hunisemaram Sampath Iyengar. His given name, Sampattu, was  a common name in the Brahman Hamlet, so common that every household in the village had a boy by the same name. This perforce meant boys had to have a prefix or a suffix to identify the different ‘Sampattus’ ! He became ‘’Pulimarat Sampattu’, Sampattu from the household with the big tamarind tree, ‘pulimaram’being the tamarind tree in colloquial Tamil. Now, such prefixes or suffixes surely didn't become the official name ! Probably the tradition, even currently on, of the official names of children being of three parts - names of the place & father followed by the given name, started sometime around the same time - after all he belonged to the first generation who were sent to  school by default under Macaulay’s education system. Sampattu was taken by his father to enrol him into the Government primary school. Unlike many villages of that time, rather even today, Gorur had a full fledged school including the high school even in the forties of the last century. The father’s memory on the date of birth and name as given was good enough for the school to enrol, no hassles about birth certificate or registration ! Srinivasa who had been given the prefix ‘Hunisemaram’ decided instinctively that his second son shall also have the same. Thus, Sampattu alone, amongst all his children, had this big tree attached to his name while all his siblings including his elder brother, had the standard name of the village followed by the father’s name prefixed to their own given names ! Now, its a fair guess that Sampattu was the only child whom Srinivasa himself took to admit into school !

In a brood of ten, the second will be an elder, more so when the eldest was sent away to seek a life at 17 and the man of the house had not learnt to take responsibility for the growth, health, education and other such needs that a father today deems a fundamental duty of his to provide for, if not personally provide.

To be fair to him, Srinivasa, the much sought after baby boy after 5 girls, the only male heir left after losing a boy to the river after a dispute, another boy who preferred to move to his new wife’s place on marriage and seven girls that followed, was a much petted young man meeting the primary expectation of his now widowed mother - to be within her sight always. It didn’t help that the Brahman family had large land holdings that boys were expected, not to cultivate, but to let the deferring farmers work the farms to reap harvest. Not fully though, the societal norm dictated that the farmer share a part of the harvest with the family which held inherited rights over these farms. The male Brahman children were expected to learn the Vedas, Upanishads by rote, and become a priest, not at a temple to carry out regular rituals to the deity, but to guide people perform their obligations on occasions of vital importance in a person’s life –marriage, birth of a child, initiation of the child into education, death of a parent and anniversaries thereof. Now every male Brahman could not become a priest obviously. Hence, growing number of Brahman boys were sent to school, as we know today, to get education as Lord Macaulay introduced in the previous century. A few of them went on to become teachers in the local or nearby village school, many left the village to seek their fortunes in the nearest town, few others went out to seek salaried employment in the government or till the land themselves. The choice was not at all difficult for Shrngaramma, the doting mother to make for Srinivasa, her lone surviving son. You’ve to give it to her – widowed soon after his birth, five daughters already married and with children,  she’d lost her elder son – one to the river when he drowned himself after a heated argument with his father soon after which his wife went away to her parents’ place in Belagere, a distant village. All she wanted was to have the apple of her eye within eye sight all the time. After all, the family had sufficient farm lands along with hereditary rights to portions of produce from four other villages. ‘ Why should my son struggle to clear an exam, when there’s no need for any job at all ?’ Even her brother, a formidable man with  a house secured by a granite door (amusingly, that stone door, ‘Kallu BAgilu’ in his house, was what he was known for, so much so that his & descendents’ family name came to be ‘Kalbagal’) with a college degree, a rarity in those times in those parts, couldn’t persuade her to let her son study further.  That meant Srinivasa didn’t have to work for a living even as an adult, a  fact that significantly shaped his life. Then what did he do with his life ? He was in the school up to his tenth grade, stopped there as further education meant going out of the village, something Shrngaramma would just not have, learnt some of the verses in Samskrut from ancient works like Rg & Yajurveda, Puranas by rote from the village teacher who would herd all the male children before dusk everyday for performing the ablutions to the setting Sun followed by recitation of these poems and verses.

The idyllic village of Gorur where Srinivasa spent all his life, on the banks of Hemavathi, the largest tributary of Cauavery, the lifeline of present – day southern Karnataka & Tamilnadu, had a decent strength of more than 80 Brahman families. These Tamil Brahmans descended from the followers of the 11^th century Shrivaishnavite saint, Ramanuja, who migrated from the unfriendly scene in Cholanadu, ruled by Shaivite Chola kings, today’s Central Tamil Nadu, to the region that forms the southern districts of today’s Karnataka – Hassan, Chikkamagaluru, Mandya, Mysuru, Chamarajanagara and Bengaluru. With other Vadyars (priests) also in the fray, this vocation hardly filled all his time. Thus he had time to do whatever he wanted and he did indeed – open a book stall, join others of his generation to run a protest march to the office of the Amaldar, the revenue collector carrying the banned tricolour of the Congress (and vanish before the cops came with their lathis to disperse them), collect, by asking or stealing, the cloths and dresses made of imported cotton of Manchester from the few affluent households to make a bonfire and shouting ‘Vande Mataram’, open a Swadeshi cloth store and occasionally indulge in small works at the farm and in the own backyard. No that any of them sustained for long, each one went on for a few years till it remained his fancy or till something else caught his fancy. One major consumer of time was the regular travels to villages in the vicinity where his family had traditional rights over farms – to collect the family’s share of the harvest. if this level of activity left him with a lot of time to look after his children, help his wife with things at home, enrol children into the school, college thereafter, etc., you’d probably be right but only a century too early. A century ago, as a male Brahman,  If you think he led a charmed life, you wouldn’t be wrong in many ways. As a male, he was taught that he did not have to help with any work at home, that was the woman’s vocation.   As a Brahman, he was not expected to pursue physically demanding vocations like working the farms. This he followed with occasional deviations. For a few years, he took up working the farm himself with his sons. As landed gentry, with hereditary rights over farm lands spread over several villages, he was expected to be just a rent seeker – collect his family’s share after every harvest. This, he followed till two developments put paid to these claims. The Government of the state of Karnataka in the newly independent India in the late sixties brought in land reforms that enabled the farmer who worked the farm to claim ownership from the hereditary claimants. Second was the commencement of the construction of an irrigation barrage across the river in his village. He lost his hereditary rights to a share of harvest as  landlord to the first and with the second, he saw his fertile farmlands going under the huge lake created by the backwaters of Hemavathy once the barrage started coming up. Just as in the case of all other land owners in Gorur and neighbouring villages coming under the barrage, he got a combination of a compensation and alternate land elsewhere. The money in compensation just vanished – conducting the marriages of daughters and meeting other expenses. The land received in compensation was just that, a piece of land, not a farm. It had to be developed into a farm.

These changes, inevitable in that period of transition of India in the late sixties, particularly its Southern parts, from an agrarian subsistence-  driven society to a neo-industrial economy, affected different people in Gorur in various ways.

-           Those who had continued their studies and got into college, found new exciting opportunities opening up – regular employment in the new factories and businesses that came up in cities like Bengaluru & Mysuru, as teachers in the numerous schools that the government was opening in every other village.

-          Those who worked on the new lands got in compensation, reaped good rewards for their efforts becoming the new land lords in the village, They were also helped by the  sweeping agrarian revolution bringing in chemical fertilisers, pesticides, insecticides and irrigation dramatically increasing the yields. 

-          There were others who were too comfortable with the traditional way of life, not equipped to handle the changes with education, fell back to stick to the traditional occupations and see the old and known privileges and standing gradually vanish as the new egalitarianism take roots.

A peek into the life of Srinivasa in his later years and retrospect into his life makes it clear that he fell in the last category. He saw a few of his peers & cousins continue their education and take up jobs, a few others grab the opportunities that came in the form of new support for farming, & subsidised inputs that helped them grow into  landed gentry not only protecting their traditional standing in the society but enhancing significantly. To be fair to him though, his kind were numerically stronger than both the other two groups. The difference the choice he made, rather made for him, did not affect so much his life as his children’s.

A carefree childhood unburdened by the feverish expectations of the kind today’s children have to live with, is what made Sampatthu, as he would recall later, very independent from a very young age. The loving care of the grandmother & mother in his infancy, a vigorous lifestyle in a village with a lot of friends to play with & the generous river where he learnt to swim & swim well, not to mention the good genes, together ensured that Sampatthu grew up to be a tall, dark & handsome young man, the tallest in the family, a six footer.

When he was around 10, it was the  day of Gokulashtami, the eighth day of the month of Shravan (also commonly as Savan) that also coincides many a times with the advent of Rohini star, that Hindus celebrate the birth of Krishna, the lovable philosopher god. As it happens in a typical Iyengar household in this part of the world, the mother was very very busy. After all, it is for Krishna, the loveable little god for whom the devoted woman would make every sweet and savoury that she knows of and has been taught to make. And make all these before having anything to eat herself. The father was getting everything ready for the set of customs he would perform to ceremonially bathe Vishnu, the ultimate god embedded in the stalagmite picked up in Nepal from the riverbed of Gomti, a tributary of Ganga, chant the poems of creation of the world and all the beings - animate and inanimate, composed by the sages of ancient India, reputedly about twenty five centuries or more earlier, usher in and celebrate the birth of Krishna.

It was Rukmini who noticed the young sampatthu from behind as she came out from the kitchen, his hair, forehead covered in blood, she could see blood oozing out from somewhere at the top of the head, the boy seemed to be in a daze, neither crying nor shouting, staring at them blankly.

She immediately made the little boy lie down, held the pried open skull together with a piece of cloth, applied turmeric powder on the edges. That is when the boy felt the pain and reacted, howling in pain. Sampatthu was on the verge of losing consciousness. Both kept talking and stroking him, giving him water to drink. It was almost dusk, even the native doctor was not available in the village. Srinivasa took the boy and put him up on his shoulders holding his injured head in his hand and walked up the 3.5 km to the neighbouring village of Ponnatapura where he knew the native Pandit (the traditional doctor who applied traditional knowledge) personally and knew he would be able to help. On reaching there after a brisk walk in about 20 minutes, Pandita saw the boy who was almost unconscious, the broken skull bloody and still wet with warm blood. The anxious parent waited as Pandit quickly examined the wound. ‘Seenasamy, this Gokulashtami is a lucky day for you, there appears to be no wound to the brain and your boy is a tough one, though I can’t say what long term damage may have happened’ – Srinivasa sat down and exhaled in obvious relief. His exertion striding down the dirt path didn’t go in vain. Later, Pandit went across to his backyard and collected a few herbs and leaves, ground them together with some dry herbs he had in his stock in to a smooth paste. Applying the paste to the open wound, he closed it with a pack of some more leaves and tied a cloth bandage around. By now, Sampattu was too tired to cry, was panting. He was given more water & a little sugar . Thereon for 15 days, Srinivasa got a new work schedule for 3 hours in the morning – taking his little son, Sampattu on his shoulder, Srinivasa would walk down the country road every day carrying the boy for the bandage to be replaced with a fresh paste of herbs & leaves that Pandit alone knew. It was about 20 days later that Sampattu was able to walk comfortably and go out. The Pandit’s medicine obviously worked and the boy slowly regained his strength in about three months. The deep scar, about 3 inches, where the skull had parted and had been put back together stretching from just beyond the crown to the back of the skull was visible all through his life as no hair grew over that scar. It, of course, also reminded all those around him of the miracle that survival turned out to be. It didn’t dampen his enthusiasm for things physical, however.

 

This was the childhood that Sampattu grew up from completing his 10^th standard that was the end of schooling in those times in Gorur itself, well before he became Anna to me.