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Companies don\’t make investment decisions based on tax rates

If you cut tax rates, will companies invest more ? This is almost a religious belief in a certain party in a certain country in the world. Is it justified  ?
The answer, in my opinion, is mostly No.
Companies make investment decisions based on markets, sales projections, competitive advantage, margin potential, scalability and the like.  These are extremely complex business variables and occupy 90% of the time and effort that goes into a business decision.
The tax line is one of the last lines in the cash flows of an investment proposal. It is certainly important, but hardly a determiner of whether the investment goes ahead or not.
There are a few instances when the tax rate indeed becomes a determining variable in the decision. For example, in India, there have been many instances where the government, in an effort to stimulate an underdeveloped part of the country has allowed zero income tax rates for operations located in those areas. In such a case, the tax rate becomes a determiner of the location of the investment; not the investment per se. Nobody puts up a factory just because the tax rate is zero. They put up a factory because the business opportunity is compelling. Having decided to invest, they may choose to locate it in a low tax zone.
The other instance when a tax rate becomes a determiner of investment is if the tax rate is ridiculously high.  For example if the marginal tax rate is 90%, nobody will invest even if the business opportunity is compelling (M. Melenchon\’s supporters, are you listening ?). But if you cut the tax rate from 35% to 15% , it\’s a nice bonus, but it will not add one dollar of investment which otherwise would not have been made.
Further, companies make investments based on a 7 or 9 year time horizon. If one President cuts tax rates this year, what stops the next President from increasing it 3 years from now. So its almost inconceivable that a company which would otherwise have not made the investment, will rush to now make it because of the tax cut.
The argument that a major tax cut on companies, will spur investment growth is mostly flawed. It will however have the following consequences
It will improve corporate profits (for after all tax is a cost) and therefore both the investible surplus and/or dividends in the hands of shareholders. It will increase the wealth in the hands of those who are shareholders. They may spend it which will have a beneficial impact on the economy.
It will correspondingly increase the deficit that the government runs, and therefore the nation\’s borrowings. That will push the cost of borrowing and inflation.
But will it also increase tax revenues and therefore make the measure revenue neutral. Mostly No. But there is one big exception in the US, which will be the subject matter of the next post.
https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

A "different" politician

I received an email from a classmate of mine, who is now the CFO of a large Indian company. It was such a lovely story that I asked for his permission to publish it in my blog. It is contextually, very Indian and the specifics may be unfamiliar to an overseas reader, but the overall story can easily be appreciated.


Here is the message from my classmate.

(On the left is Mr Konnappa, the MLA who is the subject of this post)

PART 1

The person with me is Konnappa, MLA (equivalent to a Congressman in a state in the US) from the north west part of Telangana adjoining Maharashtra.  I happened to meet him while pursuing some factory location.
He was originally elected on a BSP ticket – only one of two MLAs of BSP (Mayawati). But then seeing his good work, the Chief Minister asked him not to waste his time, join the ruling party and continue his work. So they merged. His constituency is in the vicinity of Ramagondam, Sirpur, and Singareni coal mines.
Recently the area has seen some factories shut down and many workers in the streets. He is working hard to bring some industries into the area or revive the shut ones.  
We learnt about some of the good work that he has been doing. This based on my colleagues’ personal visit to the area and my interaction with him.
The closure of factories has thrown some 2400 children potentially out of school – due to loss of jobs of parents. He has supported the children attending school by paying their fees – some Rs 34 lacs ($ 50K) per annum. “Children cant afford to lose their precious years of schooling”   is his logic. “Whats the source of funds – Personal?” I quizzed. “No sir I am not that wealthy.  I ask some money from Chief Minister, some other like minded MLAs, I asked some theatre owners, shop keepers and some  industries who support such efforts. I only make up the balance. Its more of a co-ordination exercise” said he.
Konappa is providing one meal a day for some 1500 poor children in his area. “Half my salary and allowances goes in this”. He had invited one of my colleagues during an earlier visit to eat with them and said  “your colleagues was very pleased to do that.”
Recently some potential investors were visiting a factory closed for last 3-4 years. “To make it presentable, I worked alongside the workers to clean it and make it as good as the … he showed the table top of our lunch table in Bikanerwala restaurant. If you start any industry here, I will work one day in the factory free to see that everything goes smooth for you. “

“When your colleague had visited my town, I made him talk to the workers of a closed factory to pep up their mood. They were all happy and appreciative.”           
“From last 6-7 months back, I have started a scheme for pregnant women. Tribal women suffer  blood deficiency. This causes several deaths of the mother during child birth or poor health of children. I have started giving them 2 kgs Gude (Jaggery) +some other thing he said which he claimed is good for blood generation + 2 Kgs of Ragi which he claimed he ensures that only the pregnant get to eat’ (may be thru social policing). The deaths have started coming down. Now the state has witnessed it and wants to roll it statewide’ he said with a pride in his voice. 
I did not get the impression that his claims were unjustified. He seemed utterly sincere; guileless for a MLA. Moreover when the Deputy Chief Minister introduced him to us said,  “he is firstly a social worker; incidentally he happens to be a politician. Ask him for whatever help you need “
PART 2
It was supposed to be the final meeting to say Yes or No as to whether we would take over the closed factory and revive it. The MLA had done stupendous work in the last 4-6 weeks which would have taken 6-8 months for us.
It was in relation to takeover and restarting a sick mill. At stake was the livelihood of 2000 odd workers and their families, the children’s education, daughters’ marriage, etc. And a passionate MLA who felt the weight heavily on his shoulder.
The Secretary to the government informed us of the decisions of his govt on various help, assurances and policy incentives and assured supply of feedstock etc, we had sought.  It fell short of what we wanted. The MLA , Konappa,  and the Government had gone a great distance; yet it was below our threshold. 
My colleague and myself had a quick discussion and said that in the interest of moving forward we will take it. We said so to the Secretary and requested him not to completely shut the door on the others requests. We thanked him and got up to go. The Secretary must have sensed our discomfort.  and said ‘If there are some difficulties later, you can always come back. It is also our interest that you keep things going’  
We came out. In the corridor, I congratulated the MLA for his efforts. Even while shaking his hands I found his eyes getting wet. I am yet to learn how to handle such situations. My colleague, senior in age, sympathised, and consoled the now visibly shaken man. He told him he can’t be seen by others in that state and that we should get into some room and we moved into one.
Konappa said  “Sir, for the first 61 years of my life, I did not have any BP or sugar. Last 3 -4 years, I have developed both. Loss of livelihood, children’s education, the future, no growth in my constituency… have all affected me. Today I see some hope return”. 
“This is the first time I have stayed in Hyderabad, the state capital for 9 days continuously. To go from one person to person to plead for a solution in the best interest of the workers and their families “
 
“When the factory closes and there is no one to care, people start looting. I closed the scrap shop nearby 3-4 years ago and warned other dealers  within the vicinity against dealing in any material from the factory or they will close down for ever. I told the workers some day or the other someone will come and  not even a single bolt should be missing. I know the pains and delays such things can cause for I have been a daily labour in the very same factory several years ago”
“Sir, please  don’t worry. It is my personal responsibility that you people will face no difficulties. “
He seemed much more in control by now. and we told him it was time for us to leave. He walked us down. “These are the times that give me satisfaction. Far more than seeing Rs 2-3 lacs in my bank account  (I thought their unit of thought will be in crores rather than lakhs, but this man seems stuck in a time warp of his own).  That’s when I feel … this earth (pointing downwards) which has to bear my weight. I feel I am repaying a part of the debt I owe to it, when I see some poor people appreciate it”
He was composed by now,  with some pride and a smile on his face.  But I was shaken. My mouth was quivering. In full public view at the entrance to the car park.

Some politician this. Some human being. Hope I can work with him some day. Imitation is the  best form of flattery they say. I hope I will be able to imitate him … one day… some day.

    Learn from history – Steel tariffs don\’t help

    The US has been there before many times. And yet they do it again and again. Granted that logic and thoughtful action is not a feature of the current US administration. But still, you would have thought they would have read up what happened when they tried it last time.
    I am referring to the announcement today that the US plans to impose a tariff of 25% on steel imports.
    George W Bush tried the same tactics in 2002, with an eye on the same political prize – voters in Pennsylvania and West Virginia.  He imposed 8-30% tariffs on imported steel . At that time the target was European steel. Europe promptly took the US to the WTO and won sanctions of  some $2 billion. More tellingly, the politically astute European Union threatened retaliatory tariffs on oranges (goodbye Florida votes) and cars (ta ta Michigan votes).  Meanwhile steel prices in the US surged, screwing industries that buy steel. A later study concluded that 200,000 jobs were lost in the US as a result.  Bush retreated and called off the tariffs in 2003.
    His father George HW Bush , and his predecessor Ronald Reagan tried various forms of it too. Reagan famously tried quotas on cars (at that time the target was Japan). The end result of that was that car prices went up by $1000 between 1982 and 1984 and the auto industry actually lost 60,000 jobs as a result of the quotas.
    Obama indulged in steel tariffs too. His target was China. But that administration did it selectively – huge tariffs, selectively on products and against companies from China that were dumping.
    It is not clear what the current administration is trying to achieve. Presumably their target is China , the current bogeyman and indisputably the cause of depressed world steel prices because of overcapacity. But China exports not much steel to the US possibly as a result of the Obama era actions. It is the 11th largest exporter to the US occupying a small portion of US imports – even India is above it in the rankings. The biggest exporter of steel to the US is Canada, followed by Brazil. Is the US trying to screw Canada ?
    Why pick a trade war with Canada of all the countries. The US has a  deficit of $ 12 bn in goods and a surplus of $24 bn in services on a $ 700 bn two way trade. Overall the US has a surplus with Canada. And you want to provoke a war with them ? Yes, the current administration has launched a war on NAFTA, but even by that perverted logic, the target must be Mexico and not Canada.  Canadians are not fools . Selected tariffs from Canada  on Vehicles (bye Michigan) and Agricultural Produce ( adieu Ohio) and we are back to reliving the George Bush experience.
    Albert Einstein is famously quoted to have said \” The definition of insanity is doing the same thing over and over again, but expecting different results.” But to avoid that, you have to read history to determine what has been done before. Well, in the current administration, reading history is too much to ask. They would make a \”yuuge\” improvement if they could just begin with reading !
    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Learn from history – Steel tariffs don\’t help

    The US has been there before many times. And yet they do it again and again. Granted that logic and thoughtful action is not a feature of the current US administration. But still, you would have thought they would have read up what happened when they tried it last time.
    I am referring to the announcement today that the US plans to impose a tariff of 25% on steel imports.
    George W Bush tried the same tactics in 2002, with an eye on the same political prize – voters in Pennsylvania and West Virginia.  He imposed 8-30% tariffs on imported steel . At that time the target was European steel. Europe promptly took the US to the WTO and won sanctions of  some $2 billion. More tellingly, the politically astute European Union threatened retaliatory tariffs on oranges (goodbye Florida votes) and cars (ta ta Michigan votes).  Meanwhile steel prices in the US surged, screwing industries that buy steel. A later study concluded that 200,000 jobs were lost in the US as a result.  Bush retreated and called off the tariffs in 2003.
    His father George HW Bush , and his predecessor Ronald Reagan tried various forms of it too. Reagan famously tried quotas on cars (at that time the target was Japan). The end result of that was that car prices went up by $1000 between 1982 and 1984 and the auto industry actually lost 60,000 jobs as a result of the quotas.
    Obama indulged in steel tariffs too. His target was China. But that administration did it selectively – huge tariffs, selectively on products and against companies from China that were dumping.
    It is not clear what the current administration is trying to achieve. Presumably their target is China , the current bogeyman and indisputably the cause of depressed world steel prices because of overcapacity. But China exports not much steel to the US possibly as a result of the Obama era actions. It is the 11th largest exporter to the US occupying a small portion of US imports – even India is above it in the rankings. The biggest exporter of steel to the US is Canada, followed by Brazil. Is the US trying to screw Canada ?
    Why pick a trade war with Canada of all the countries. The US has a  deficit of $ 12 bn in goods and a surplus of $24 bn in services on a $ 700 bn two way trade. Overall the US has a surplus with Canada. And you want to provoke a war with them ? Yes, the current administration has launched a war on NAFTA, but even by that perverted logic, the target must be Mexico and not Canada.  Canadians are not fools . Selected tariffs from Canada  on Vehicles (bye Michigan) and Agricultural Produce ( adieu Ohio) and we are back to reliving the George Bush experience.
    Albert Einstein is famously quoted to have said \” The definition of insanity is doing the same thing over and over again, but expecting different results.” But to avoid that, you have to read history to determine what has been done before. Well, in the current administration, reading history is too much to ask. They would make a \”yuuge\” improvement if they could just begin with reading !
    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Learn from history – Steel tariffs don\’t help

    The US has been there before many times. And yet they do it again and again. Granted that logic and thoughtful action is not a feature of the current US administration. But still, you would have thought they would have read up what happened when they tried it last time.
    I am referring to the announcement today that the US plans to impose a tariff of 25% on steel imports.
    George W Bush tried the same tactics in 2002, with an eye on the same political prize – voters in Pennsylvania and West Virginia.  He imposed 8-30% tariffs on imported steel . At that time the target was European steel. Europe promptly took the US to the WTO and won sanctions of  some $2 billion. More tellingly, the politically astute European Union threatened retaliatory tariffs on oranges (goodbye Florida votes) and cars (ta ta Michigan votes).  Meanwhile steel prices in the US surged, screwing industries that buy steel. A later study concluded that 200,000 jobs were lost in the US as a result.  Bush retreated and called off the tariffs in 2003.
    His father George HW Bush , and his predecessor Ronald Reagan tried various forms of it too. Reagan famously tried quotas on cars (at that time the target was Japan). The end result of that was that car prices went up by $1000 between 1982 and 1984 and the auto industry actually lost 60,000 jobs as a result of the quotas.
    Obama indulged in steel tariffs too. His target was China. But that administration did it selectively – huge tariffs, selectively on products and against companies from China that were dumping.
    It is not clear what the current administration is trying to achieve. Presumably their target is China , the current bogeyman and indisputably the cause of depressed world steel prices because of overcapacity. But China exports not much steel to the US possibly as a result of the Obama era actions. It is the 11th largest exporter to the US occupying a small portion of US imports – even India is above it in the rankings. The biggest exporter of steel to the US is Canada, followed by Brazil. Is the US trying to screw Canada ?
    Why pick a trade war with Canada of all the countries. The US has a  deficit of $ 12 bn in goods and a surplus of $24 bn in services on a $ 700 bn two way trade. Overall the US has a surplus with Canada. And you want to provoke a war with them ? Yes, the current administration has launched a war on NAFTA, but even by that perverted logic, the target must be Mexico and not Canada.  Canadians are not fools . Selected tariffs from Canada  on Vehicles (bye Michigan) and Agricultural Produce ( adieu Ohio) and we are back to reliving the George Bush experience.
    Albert Einstein is famously quoted to have said \” The definition of insanity is doing the same thing over and over again, but expecting different results.” But to avoid that, you have to read history to determine what has been done before. Well, in the current administration, reading history is too much to ask. They would make a \”yuuge\” improvement if they could just begin with reading !
    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Who\’s who in Chinese politics

    Xi Jinping, the current Chinese leader is easily the most powerful leader that China has had ever since Deng Xiaoping faded away in the early 90s. But in order to understand his power, we have to go back a bit in time in modern Chinese history.
    Mao was a tyrant and supremely powerful in China and until his death, he was simply the sole power centre. But that degree of concentration of power resulted in chaos in China – the Great Leap Forward and the Cultural Revolution being two big disasters. When he died, the elders decided that no single person should ever be allowed to accumulate such power. Deng Xiaoping became the preeminent leader, but there was a rival power centre in Chen Yun and to a lesser extent in Li Xiannian. Multiple purges later,  Jiang Zemin was appointed the Secretary of the Communist Party immediately after the infamous Tiananmen incident in 1989.
    Jiang accumulated a fair degree of power, but was never all powerful. He led the party out of the post Tiananmen crisis and then earned his own notoriety by the brutal suppression, and virtual extermination, of  Falun Gong – a cult loosely based on mysticism, but which was feared by the Party as a political movement. By the norms set by Deng, which he followed and reinforced,  he stepped down after some 12 years as the Secretary of the Party and handed over to Hu Jintao, who was handpicked by Deng himself before his death. However, Jiang continued to remain the Chairman of the Central Military Commission and therefore in his first term Hu really did not have much power and had to constantly \”handle\” Jiang. Jiang continues to remain a power centre and is the leader of the Shanghai faction. However he is getting old (he\’s past 90) and his power is fading, helped along by Xi\’s efforts to undermine this faction.
    Hu Jintao is a colourless and plodding leader, who even while he was the Secretary of the Party, was never a charismatic leader. His hold on power was weaker. When he handed over the reins to Xi Jinping, he quit all his formal roles. He leads the Youth League, another faction, but is not a powerful leader.
    Xi Jinping comes from a group called the \”princelings\” – their fathers were revolutionary leaders in the Mao era and their positions, at least to some measure, is owed to their parentage. When Xi took over, he swiftly started to consolidate his power with a massive anti corruption drive, the likes of which China has never seen.
    Ostensibly Xi was tackling one of the greatest scourges of China – corruption. The scale of corruption in China is simply unbelievable. Nowhere has mankind seen anything like this. It is all pervasive . I won\’t say anything more – I still wish to travel to China !! Let me just say that whatever you think is the level of corruption in China, the reality is probably tenfold worse. It is an existential threat to the Party.  Therefore tackling corruption was a popular thing to do.
    But the anti corruption drive was also a big consolidation of power by Xi. It was positioned as catching \”tigers and flies\” – both the small fry as well as the really powerful.  Unsurprisingly, the people targeted the most were political opponents. More than 100,000 flies have been indicted, but more importantly so have nearly 200 tigers. This includes some 100 senior people in the military including two former Vice Chairmen of the Central Military Commission (the equivalent would be Defence Secretary and the Joint Chiefs of Staff in the US military being purged). The biggest tiger of all who was jailed is clearly Zhou Yongkang, a past member of the Standing Committee. Such a thing is simply not done in Chinese politics – the upper echelon of the Communist Party was thought untouchable.
    Xi\’s main ally who has carried out the anti corruption drive is Wang Qishan, a current member of the Standing Committee and 6th in the formal order of seniority. But clearly the real no 2 in China is Wang Qishan. He is a star economic leader in China – having held a number of economic portfolios in the past. But for the last 5 years he has been Xi\’s enforcer in the anti corruption drive. Crucially he is 69 and by the tenets of the unofficial retirement policy, he should retire in October. All the rumours swirling around China are that Xi will keep him. 
    The formal No 2 is the Premier Li Keqiang. His job is to run the economy and the general consensus is that he has not been successful. His power base is small and he belongs to the Youth League faction of Hu Jintao. In fact at the time of Xi\’s succession it was rumoured that Hu actually wanted Li to succeed him and not Xi. Li is only 62 and can continue as Premier for one more term.  This blogger has a view (wild guess) as to what might happen to both Wang Qishan and Li Keqiang and he will boldly articulate a prediction in a subsequent post !
    Two other names need mention. When Xi and Li were appointed, there was also speculation as to who would succeed them in 10 years time (the next generation of leaders). Two names were mentioned – Hu Chunhua and Sun Zhengcai. Both were included in the politburo last time around and given important positions. Just two months ago, Sun Zhengcai was summarily replaced and an anti corruption investigation started against him. Clearly he lost out in a power struggle.
    How do the Chinese themselves view all this ? You may be surprised ! Watch out for the next post.
    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Who\’s who in Chinese politics

    Xi Jinping, the current Chinese leader is easily the most powerful leader that China has had ever since Deng Xiaoping faded away in the early 90s. But in order to understand his power, we have to go back a bit in time in modern Chinese history.
    Mao was a tyrant and supremely powerful in China and until his death, he was simply the sole power centre. But that degree of concentration of power resulted in chaos in China – the Great Leap Forward and the Cultural Revolution being two big disasters. When he died, the elders decided that no single person should ever be allowed to accumulate such power. Deng Xiaoping became the preeminent leader, but there was a rival power centre in Chen Yun and to a lesser extent in Li Xiannian. Multiple purges later,  Jiang Zemin was appointed the Secretary of the Communist Party immediately after the infamous Tiananmen incident in 1989.
    Jiang accumulated a fair degree of power, but was never all powerful. He led the party out of the post Tiananmen crisis and then earned his own notoriety by the brutal suppression, and virtual extermination, of  Falun Gong – a cult loosely based on mysticism, but which was feared by the Party as a political movement. By the norms set by Deng, which he followed and reinforced,  he stepped down after some 12 years as the Secretary of the Party and handed over to Hu Jintao, who was handpicked by Deng himself before his death. However, Jiang continued to remain the Chairman of the Central Military Commission and therefore in his first term Hu really did not have much power and had to constantly \”handle\” Jiang. Jiang continues to remain a power centre and is the leader of the Shanghai faction. However he is getting old (he\’s past 90) and his power is fading, helped along by Xi\’s efforts to undermine this faction.
    Hu Jintao is a colourless and plodding leader, who even while he was the Secretary of the Party, was never a charismatic leader. His hold on power was weaker. When he handed over the reins to Xi Jinping, he quit all his formal roles. He leads the Youth League, another faction, but is not a powerful leader.
    Xi Jinping comes from a group called the \”princelings\” – their fathers were revolutionary leaders in the Mao era and their positions, at least to some measure, is owed to their parentage. When Xi took over, he swiftly started to consolidate his power with a massive anti corruption drive, the likes of which China has never seen.
    Ostensibly Xi was tackling one of the greatest scourges of China – corruption. The scale of corruption in China is simply unbelievable. Nowhere has mankind seen anything like this. It is all pervasive . I won\’t say anything more – I still wish to travel to China !! Let me just say that whatever you think is the level of corruption in China, the reality is probably tenfold worse. It is an existential threat to the Party.  Therefore tackling corruption was a popular thing to do.
    But the anti corruption drive was also a big consolidation of power by Xi. It was positioned as catching \”tigers and flies\” – both the small fry as well as the really powerful.  Unsurprisingly, the people targeted the most were political opponents. More than 100,000 flies have been indicted, but more importantly so have nearly 200 tigers. This includes some 100 senior people in the military including two former Vice Chairmen of the Central Military Commission (the equivalent would be Defence Secretary and the Joint Chiefs of Staff in the US military being purged). The biggest tiger of all who was jailed is clearly Zhou Yongkang, a past member of the Standing Committee. Such a thing is simply not done in Chinese politics – the upper echelon of the Communist Party was thought untouchable.
    Xi\’s main ally who has carried out the anti corruption drive is Wang Qishan, a current member of the Standing Committee and 6th in the formal order of seniority. But clearly the real no 2 in China is Wang Qishan. He is a star economic leader in China – having held a number of economic portfolios in the past. But for the last 5 years he has been Xi\’s enforcer in the anti corruption drive. Crucially he is 69 and by the tenets of the unofficial retirement policy, he should retire in October. All the rumours swirling around China are that Xi will keep him. 
    The formal No 2 is the Premier Li Keqiang. His job is to run the economy and the general consensus is that he has not been successful. His power base is small and he belongs to the Youth League faction of Hu Jintao. In fact at the time of Xi\’s succession it was rumoured that Hu actually wanted Li to succeed him and not Xi. Li is only 62 and can continue as Premier for one more term.  This blogger has a view (wild guess) as to what might happen to both Wang Qishan and Li Keqiang and he will boldly articulate a prediction in a subsequent post !
    Two other names need mention. When Xi and Li were appointed, there was also speculation as to who would succeed them in 10 years time (the next generation of leaders). Two names were mentioned – Hu Chunhua and Sun Zhengcai. Both were included in the politburo last time around and given important positions. Just two months ago, Sun Zhengcai was summarily replaced and an anti corruption investigation started against him. Clearly he lost out in a power struggle.
    How do the Chinese themselves view all this ? You may be surprised ! Watch out for the next post.
    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Who\’s who in Chinese politics

    Xi Jinping, the current Chinese leader is easily the most powerful leader that China has had ever since Deng Xiaoping faded away in the early 90s. But in order to understand his power, we have to go back a bit in time in modern Chinese history.
    Mao was a tyrant and supremely powerful in China and until his death, he was simply the sole power centre. But that degree of concentration of power resulted in chaos in China – the Great Leap Forward and the Cultural Revolution being two big disasters. When he died, the elders decided that no single person should ever be allowed to accumulate such power. Deng Xiaoping became the preeminent leader, but there was a rival power centre in Chen Yun and to a lesser extent in Li Xiannian. Multiple purges later,  Jiang Zemin was appointed the Secretary of the Communist Party immediately after the infamous Tiananmen incident in 1989.
    Jiang accumulated a fair degree of power, but was never all powerful. He led the party out of the post Tiananmen crisis and then earned his own notoriety by the brutal suppression, and virtual extermination, of  Falun Gong – a cult loosely based on mysticism, but which was feared by the Party as a political movement. By the norms set by Deng, which he followed and reinforced,  he stepped down after some 12 years as the Secretary of the Party and handed over to Hu Jintao, who was handpicked by Deng himself before his death. However, Jiang continued to remain the Chairman of the Central Military Commission and therefore in his first term Hu really did not have much power and had to constantly \”handle\” Jiang. Jiang continues to remain a power centre and is the leader of the Shanghai faction. However he is getting old (he\’s past 90) and his power is fading, helped along by Xi\’s efforts to undermine this faction.
    Hu Jintao is a colourless and plodding leader, who even while he was the Secretary of the Party, was never a charismatic leader. His hold on power was weaker. When he handed over the reins to Xi Jinping, he quit all his formal roles. He leads the Youth League, another faction, but is not a powerful leader.
    Xi Jinping comes from a group called the \”princelings\” – their fathers were revolutionary leaders in the Mao era and their positions, at least to some measure, is owed to their parentage. When Xi took over, he swiftly started to consolidate his power with a massive anti corruption drive, the likes of which China has never seen.
    Ostensibly Xi was tackling one of the greatest scourges of China – corruption. The scale of corruption in China is simply unbelievable. Nowhere has mankind seen anything like this. It is all pervasive . I won\’t say anything more – I still wish to travel to China !! Let me just say that whatever you think is the level of corruption in China, the reality is probably tenfold worse. It is an existential threat to the Party.  Therefore tackling corruption was a popular thing to do.
    But the anti corruption drive was also a big consolidation of power by Xi. It was positioned as catching \”tigers and flies\” – both the small fry as well as the really powerful.  Unsurprisingly, the people targeted the most were political opponents. More than 100,000 flies have been indicted, but more importantly so have nearly 200 tigers. This includes some 100 senior people in the military including two former Vice Chairmen of the Central Military Commission (the equivalent would be Defence Secretary and the Joint Chiefs of Staff in the US military being purged). The biggest tiger of all who was jailed is clearly Zhou Yongkang, a past member of the Standing Committee. Such a thing is simply not done in Chinese politics – the upper echelon of the Communist Party was thought untouchable.
    Xi\’s main ally who has carried out the anti corruption drive is Wang Qishan, a current member of the Standing Committee and 6th in the formal order of seniority. But clearly the real no 2 in China is Wang Qishan. He is a star economic leader in China – having held a number of economic portfolios in the past. But for the last 5 years he has been Xi\’s enforcer in the anti corruption drive. Crucially he is 69 and by the tenets of the unofficial retirement policy, he should retire in October. All the rumours swirling around China are that Xi will keep him. 
    The formal No 2 is the Premier Li Keqiang. His job is to run the economy and the general consensus is that he has not been successful. His power base is small and he belongs to the Youth League faction of Hu Jintao. In fact at the time of Xi\’s succession it was rumoured that Hu actually wanted Li to succeed him and not Xi. Li is only 62 and can continue as Premier for one more term.  This blogger has a view (wild guess) as to what might happen to both Wang Qishan and Li Keqiang and he will boldly articulate a prediction in a subsequent post !
    Two other names need mention. When Xi and Li were appointed, there was also speculation as to who would succeed them in 10 years time (the next generation of leaders). Two names were mentioned – Hu Chunhua and Sun Zhengcai. Both were included in the politburo last time around and given important positions. Just two months ago, Sun Zhengcai was summarily replaced and an anti corruption investigation started against him. Clearly he lost out in a power struggle.
    How do the Chinese themselves view all this ? You may be surprised ! Watch out for the next post.
    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Are You An \’Education Survivor\’?

    If you\’re reading this you obviously went through the education system. And maybe you are among those who are grateful that your school days were lovely. And that what you learnt is being put to use every day.

    Or maybe not.

    Conduct a group discussion with people (friends, colleagues, family members), around their school days. You will find a mix of smiles, frowns and giggles — and the frowns will usually be about their experiences inside the classroom. Almost everyone has a story of how they were wrongly punished or discriminated against or didn\’t receive their just dues for something or the other. Around half the people will recall the oppression they felt at different times — examinations, punishment being handed out, the subject/s they could make neither head nor tail of, the quiet acceptance by their families that they would be mediocre and their own realization that they would not be \’good enough\’ in a number of things.

    Cut to the present, and many of them (now quite successful in life) will also be saying : \”Why did we learn all those things? And even what I studied in college, what am I doing with it now?\”

    These are the symptoms of the \’education survivor\’. Are you one of them? Are there really as many of them around as my dire prediction indicates? Is it only our tendency to wallow in self-pity? Or just the usual, superficial user-critique of education? Finally, is school education really something like a dreadful disease (or at least a dreadful experience) which leaves behind \’survivors\’?

    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Are You An \’Education Survivor\’?

    If you\’re reading this you obviously went through the education system. And maybe you are among those who are grateful that your school days were lovely. And that what you learnt is being put to use every day.

    Or maybe not.

    Conduct a group discussion with people (friends, colleagues, family members), around their school days. You will find a mix of smiles, frowns and giggles — and the frowns will usually be about their experiences inside the classroom. Almost everyone has a story of how they were wrongly punished or discriminated against or didn\’t receive their just dues for something or the other. Around half the people will recall the oppression they felt at different times — examinations, punishment being handed out, the subject/s they could make neither head nor tail of, the quiet acceptance by their families that they would be mediocre and their own realization that they would not be \’good enough\’ in a number of things.

    Cut to the present, and many of them (now quite successful in life) will also be saying : \”Why did we learn all those things? And even what I studied in college, what am I doing with it now?\”

    These are the symptoms of the \’education survivor\’. Are you one of them? Are there really as many of them around as my dire prediction indicates? Is it only our tendency to wallow in self-pity? Or just the usual, superficial user-critique of education? Finally, is school education really something like a dreadful disease (or at least a dreadful experience) which leaves behind \’survivors\’?

    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Are You An \’Education Survivor\’?

    If you\’re reading this you obviously went through the education system. And maybe you are among those who are grateful that your school days were lovely. And that what you learnt is being put to use every day.

    Or maybe not.

    Conduct a group discussion with people (friends, colleagues, family members), around their school days. You will find a mix of smiles, frowns and giggles — and the frowns will usually be about their experiences inside the classroom. Almost everyone has a story of how they were wrongly punished or discriminated against or didn\’t receive their just dues for something or the other. Around half the people will recall the oppression they felt at different times — examinations, punishment being handed out, the subject/s they could make neither head nor tail of, the quiet acceptance by their families that they would be mediocre and their own realization that they would not be \’good enough\’ in a number of things.

    Cut to the present, and many of them (now quite successful in life) will also be saying : \”Why did we learn all those things? And even what I studied in college, what am I doing with it now?\”

    These are the symptoms of the \’education survivor\’. Are you one of them? Are there really as many of them around as my dire prediction indicates? Is it only our tendency to wallow in self-pity? Or just the usual, superficial user-critique of education? Finally, is school education really something like a dreadful disease (or at least a dreadful experience) which leaves behind \’survivors\’?

    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    Check Insurance Premium Amount Online Instantly

      There used to be a time when people thought insurance was a luxury. However, with the times and people’s lifestyles changing, insurance is not a luxury anymore. Insurance policies help us in dealing with unforeseen circumstances and help us cover expenses in such cases. This is the reason that many of us already have one or another insurance policy.

    Now, everyone who buys an insurance policy needs to pay their insurance premium online. If you are looking for a way to pay your insurance premiums or want to check the premium amount, you can do that easily online.

    But how?

    Let’s check the steps.

    How to Check Insurance Premium Amount Online?

    The process to check the insurance premium online is very simple, and you can do it by following a few simple steps. Visit Paytm, and follow these steps to check your insurance premiums online:

    On Paytm Mobile Application:

    • Open Paytm application on your mobile phone
    • Click on ‘Recharge & Pay Bills’
    • Scroll down to the ‘Featured Services’ section and click on ‘LIC / Insurance’
    • Select your Insurer and enter the required details such as Policy Number, Date of Birth etc.
    • Click on ‘Get Premium’ to check your premium amount online

    On Paytm’s Official Website

    • Go to the ‘Insurance Premium Payment’ page on Paytm
    • Select your Insurer
    • Enter the required details such as Policy Number, Date of Birth etc.
    • Click on ‘Get Premium’ to check your premium amount online

    It is that simple to check your insurance premiums online on Paytm. You can also pay your insurance premium on Paytm after you have checked your insurance premium amount. 

    Why should you have an Insurance Policy?

    Insurance policies benefit us in many ways along with the coverage that they provide in the hour of uncertainty. Here are some of the most important perks for having an insurance policy:

    • Insurance Coverage: This is the primary benefit and reason for getting an insurance policy. If the uncertainty falls under the domain of the policy, then you can get coverage for the same as per the policy.
    • Cash Flow Management: This is rather an advantage that isn’t talked about a lot. In an hour of uncertainty, the burden of paying for the losses can put a lot of pressure on the individuals and the family. So, when the sum is being covered by the insurance policy then it takes the burden off their shoulders.
    • Tax Benefits: Apart from the coverage, having insurance policies tax benefits as well. You can get tax exemptions under sections 80C, 80D, and 10D.
    Conclusion

    Having an insurance policy is a must as it helps us in the hour of uncertainty as they provide coverage for such unforeseen situations. You can check your insurance premium amount online before you make payment on platforms like Paytm by following a few simple steps.


    From \’Teacher Condemnation\’ to \’System Condemnation\’?

    Years ago, it was felt that the root of all problems in education is the teacher. In fact, the MLLs (Minimum Levels of Learning, which served as the de fact national curriculum framework) in the late 80s and early 90s were designed to ensure \’teacher accountability\’ in terms of the minimum that would be achieved. A popular programme, Rishi Valley\’s multi-grade teaching  (adopted/adapted as \’activity based learning\’ in many states) actually originated from the desire to get children to be able to learn without needing the teacher (which is why there is so much of self learning in it).

    People still continue to condemn the teacher and hold him responsible for all the ills in education. However, with the proliferation of so many \’reports\’ on education all around, there is now a great sense of intolerance towards the education system itself. The belief seems to be that not only government teachers and schools but the government education system itself is condemnable. Among NGOs, academics, commentators, researchers and intellectuals the general notion seems to be gathering steam that everything and everyone in the government system is the problem!

    But what is a system if not the people in it, the way they work and the frame within which they work? From that point of view, I have to say that some of the finest people I\’ve come across are \’system\’ people. Every year I get the chance to work with thousands of teachers who I see putting in 12-14 hour days when others from outside the system (e.g. NGOs) fade away after only 8 hrs of input. This is not to say everything is OK with the system or the policies or the people – it\’s just point out that a black and white view doesn\’t help. And that just as it is not possible to change a teacher while condemning him, it is not likely to be possible to improve a system while condemning it!

    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    From \’Teacher Condemnation\’ to \’System Condemnation\’?

    Years ago, it was felt that the root of all problems in education is the teacher. In fact, the MLLs (Minimum Levels of Learning, which served as the de fact national curriculum framework) in the late 80s and early 90s were designed to ensure \’teacher accountability\’ in terms of the minimum that would be achieved. A popular programme, Rishi Valley\’s multi-grade teaching  (adopted/adapted as \’activity based learning\’ in many states) actually originated from the desire to get children to be able to learn without needing the teacher (which is why there is so much of self learning in it).

    People still continue to condemn the teacher and hold him responsible for all the ills in education. However, with the proliferation of so many \’reports\’ on education all around, there is now a great sense of intolerance towards the education system itself. The belief seems to be that not only government teachers and schools but the government education system itself is condemnable. Among NGOs, academics, commentators, researchers and intellectuals the general notion seems to be gathering steam that everything and everyone in the government system is the problem!

    But what is a system if not the people in it, the way they work and the frame within which they work? From that point of view, I have to say that some of the finest people I\’ve come across are \’system\’ people. Every year I get the chance to work with thousands of teachers who I see putting in 12-14 hour days when others from outside the system (e.g. NGOs) fade away after only 8 hrs of input. This is not to say everything is OK with the system or the policies or the people – it\’s just point out that a black and white view doesn\’t help. And that just as it is not possible to change a teacher while condemning him, it is not likely to be possible to improve a system while condemning it!

    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1

    From \’Teacher Condemnation\’ to \’System Condemnation\’?

    Years ago, it was felt that the root of all problems in education is the teacher. In fact, the MLLs (Minimum Levels of Learning, which served as the de fact national curriculum framework) in the late 80s and early 90s were designed to ensure \’teacher accountability\’ in terms of the minimum that would be achieved. A popular programme, Rishi Valley\’s multi-grade teaching  (adopted/adapted as \’activity based learning\’ in many states) actually originated from the desire to get children to be able to learn without needing the teacher (which is why there is so much of self learning in it).

    People still continue to condemn the teacher and hold him responsible for all the ills in education. However, with the proliferation of so many \’reports\’ on education all around, there is now a great sense of intolerance towards the education system itself. The belief seems to be that not only government teachers and schools but the government education system itself is condemnable. Among NGOs, academics, commentators, researchers and intellectuals the general notion seems to be gathering steam that everything and everyone in the government system is the problem!

    But what is a system if not the people in it, the way they work and the frame within which they work? From that point of view, I have to say that some of the finest people I\’ve come across are \’system\’ people. Every year I get the chance to work with thousands of teachers who I see putting in 12-14 hour days when others from outside the system (e.g. NGOs) fade away after only 8 hrs of input. This is not to say everything is OK with the system or the policies or the people – it\’s just point out that a black and white view doesn\’t help. And that just as it is not possible to change a teacher while condemning him, it is not likely to be possible to improve a system while condemning it!

    https://www.youtube.com/channel/UCCzOJDJZHoBttdHAjJsnN9w?sub_confirmation=1