The Vices of Malayalis, and how the state lives on it

Came across a much needed, and nicely researched article on how the state of Kerala, India, feeds off the taxes paid by its poorest citizens. Keralites, you see, have a penchant for alcohol, and lotteries. And both of these are controlled largely by the state government. A third vice is finance instrument called chit-funds, a remnant of a once stronger economy. Some of the figures being reported in this article is truly scary; and its all debt !

Kerala’s is an interesting, if not curious, economy.  The cash-strapped state -- it has a debt ratio of over 30 per cent -- the highest and most deteriorating debt among all states since 2013 -- is keeping its finances alive through the vices of its people - heavy alcohol consumption and penchant for lottery tickets. The state government has the monopoly to sell alcohol, through the Kerala State Beverages Corporation or Bevco, while the ‘gambling-type’ addiction of buying lotteries of its people is fed through the Lotteries Department, which sells lakhs of lottery tickets on a daily basis. At over 8 litres per person per year, Kerala has alcohol consumption per person per year compared to the national average of 5.7 litres per person per year. The sales tax on alcohol has been going up from 20 per cent in 1960-61 to 210 per cent now.

As per the latest data, the income from the lottery for 2017-18 stands at Rs 9,034.16 crore while the revenue from liquor sales (state excise + sales tax) stood at Rs 12,937.09 crore in the same period. Add to this is the bumper sales during festivals like Onam. In the pre-Onam week alone, Bevco sold a whopping Rs 487 crore worth liquor while the lottery tickets offer eye-popping prize money of Rs 16 crore.

“The entire approach of the state government is flawed and regressive. To manage its coffers, Kerala Government is not only punishing the poorest but it is also encouraging them to buy an addictive product like lottery by selling dreams,” said Jose Sebastian, who teaches at the Gulati Institute of Finance and Taxation.

“It’s no secret who’s consuming most liquor and who’s buying the lottery tickets. It’s mostly the poorest sections of society. Gujarat neither sells liquor or lottery, yet it is the top-performing state in the country,” he said.

According to a study by Sebastian, Kerala has a wide tax base covering various sections of people and different kinds of economic activities. This is not reflected in the revenue collection. “Virtually, the effective revenue base has been getting narrowed down to four items -- petroleum and petrol products, liquor of all kinds, motor vehicles and lottery,” he said.

“An unintended consequence of the evolution of Kerala’s revenue structure is that it places a disproportionately high burden on the poor and marginalised sections of society. They are the major consumers of liquor and lottery. The share of these two in SOR increased from 14.77 per cent in 1970-71 to 34.46 per cent in 2016-17. Motor vehicles like three-wheelers, pickup vans and taxis powered by petroleum products are the source of livelihood for many of this class,” he said.

V K Vijayakumar, chief investment strategist, Geojit Financial Services, said the LDF Government and its Finance Minister T M Thomas Isaac have been adopting a policy of borrowing and continued borrowing to meet the day-to-day needs. “Hard decisions such as hiking education fees, concessions for students travel or the property tax, which have not been touched for several decades, are not taken as it will backfire politically,” he said.

Vijayakumar pointed out that property tax has not been hiked since 1995 while students continue to travel at nominal rates though they have no qualms in spending thousands on mobile bills or on autos/share cabs every month.

Another big consumption by the state is gold, but it now comes under the Goods and Services Tax. Recently, the Finance Minister lamented that the state government gets less than Rs 200 crore as tax from gold sales while under the scrapped Value Added Tax (VAT) regime it used to fetch Rs 750 crore. Kerala is the top consumer of the yellow metal and Isaac blamed lack of preparedness and absence of invoices for the ‘huge leakages’ in GST revenue. Economist K V Joseph pointed out that the tuition fees in government medical colleges are as low as Rs 25,000 while in private colleges it is Rs 5.5-6.5 lakh yearly.

“While lower-income bracket people and SC/ST category can be exempted from higher fees, the government should look at hiking fees for those from higher-income families,” he said. Joseph advocated similar hike in taxes from forestry and land/property registration and taxes.

Geojit’s Vijayakumar blamed the state government for spending recklessly when the state coffers are drying up. “The state’s debt is Rs 1.5 lakh crore. When the state is in deep debt, the government has spent Rs 5.90 crore on politically accommodating VS Achuthanandan in Kerala Administrative Reforms Commission. Our Public Service Commission has 21 members while Madhya Pradesh PSC has just four members and Gujarat seven. All these members are paid over Rs 1.5 lakh per month. The government would do well to cut its unnecessary expenditure first when the state is in deep financial crisis,” he said.

Will Finance Minister Isaac think out of the box to find new revenue models? Will he bite the bullet? No chance when the state is heading for an election season -- the byelections followed by the local body polls in 2020, and the Assembly polls in 2021.

Another addictive habit of Malayalees is joining money-saving scheme or chits or chitties, which combine the advantages of both investment and advance. No wonder, while most Kerala PSUs are loss-making or white elephants, the Kerala State Financial Enterprises or KSFE, which runs chitties of several sizes, is flourishing. Compared to unofficial chits run by individuals, which are illegal, the KSFE chits are risk-free safe haven for the public as the institution conducts only chitties fully governed by provisions of the Central Chit Fund Act 1982.

Go green, and fight the cars

The news nowadays has always been disturbing. But for the past few weeks, there has been a shift in focus. Instead of reporting news of religious conflicts, political interference, and greedy corporations; the focus is now on : the changing climate.

There was a (?) nationwide strike in Australia's cities last week, people standing up for a greener future. Against un-controlled climate change. Greta Thunberg's climate activism has got people talking. Scotland has become the first country to declare a climate emergency. There are petitions being signed, videos and audioblogs being shared.

And I have been listening to the war on cars podcast. Australia loves its big, huge cars. And they get touchy when the topic comes to parking.

Some strongly support market prices—except for parking. Some strongly oppose subsidies—except for parking. Some abhor planning regulations—except for parking. Some insist on rigorous data collection and statistical tests—except for parking. This exceptionalism has impoverished thinking about parking policies. If drivers paid the full cost of their parking, it would seem too expensive, so we expect someone else to pay for it. But a city where everyone happily pays for everyone else’s free parking is a fool’s paradise.

For the first time, I see some hope for this planet. The war against cars has started.

Heres hoping for a greener future.

Calling it 95%

Trending news this weekend: the apparent failure of ISRO's moon lander. Surprising: almost every media outlet, and majority of mansplainers on social media are calling it a success. 99% success.

When the Vikram lander’s autonomous descent manoeuvre didn’t go as planned, scientists of the Indian Space Research Organisation (ISRO) looked surprised and dejected at once in the mission control room in Bengaluru. There was the gentle, thoughtful reminder at the back of everyone’s minds, ready to prance at the first outward sign of sorrow, that the Chandrayaan 2 orbiter was still functional and whose scientific payload could still salvage the mission’s dignity.

Sending a spacecraft to another planet/moon, inserting it into orbit, and landing a rover…these are all  the extremities of research and engineering. To be able to just take off from the earth is feat in itself. Success should be celebrated, rightly so. But nationalism bubbling over means people are not able to call a spade a spade.

A private Israeli mission named Beresheet attempted and failed to soft-land on the Moon in April this year.The Americans and Russians have together tried around 20 soft-landings and succeeded 16 times. On the flip side, these two countries pioneered the technologies required to achieve this feat at an accelerated pace during the Cold War space race, so perhaps an adjustment must be made for the failure rate.

The lander failed, plain and simple. There will be ways to study the moon remotely, from an orbitter, but the lander was crucial to gather data from the physical surface.

And as we do in our field, go back to the drawing board. Learn what went wrong,  and try and fix it the next time.

Arrived

I sometimes catch myself stalking some of my old coleagues agin. Now and then,  I check upon them. To keep track of where they are, but mostly just to feel better. At the the beginning of my career, I wanted to do a lot of things, travel to a lot of places, visit , and meet people. I thought my career in IT would allow me these rare opportunities to see a little more of this world. And I worked hard towards that goal. But I was working under bad managers, and was plagued by terrible management. One of the many reasons I decided to migrate out. And it was not an easy decision. So, I try to imagine, where would I be, if I had decided to stay. And continue to suffer. Would my life have changed for the better ? Could I have stayed on and still achieved a  little more ?

The answer, thankfully, is NO.

If I had stayed, I would have been pummelled by meaningless, tedious, repeating tasks, increasing frustration, and a feeling of uselessness. And I know this because everybody else I worked with back in the day, are still where I had last left them.

My old team at e*, that company in Bangalore where I worked for 3 years. They are all still stuck in that same job, working in an over-crowded, pollutted city. None of them got that chance to travel abroad.

Poor little P is still doing data entry jobs. And that SB is still making them work. S and S are holding on for dear life. V has put on more weight, must be all that late night snack they have been having.

My old, sick, demeaning managers. Well they have done pretty good, actually. Feeding on the blood of innocent subordinates, they have become more successful. At least , thats what I infer from their shortening designations.

And my competition, yes , I had a lot of that. To be fair, we were all struggling in the same , dwindling, putrid pool of meaningless work, so we all wanted to escape somewhere. I gave up easily, and moved away. While for most of them, the struggle continues.

Competition is fierce in India's private job market. And with only a few guidelines set by the government, companies play a one sided game of micro-management. While emloyees in the sector do have the option of unions, they also understand that live is much better for them in the tech sector compared to the others. So they let it go. People work for years chasing that elusive 'onsite' opportunity, that one chance to make some money, tax free, which will enable them to buy a home in one of those crowded cities. And also , the chance to see a different country, with the company footing all the travel bills.

Choosing to move to Australia was the best decision we had taken in a long , long time. With a lot more professionalism, flexibility and wage, ones problems seem to dwindle away. For the first time, I have a good balance of professional and personal life. Last year, my manager here came to me and told me to take a few days off. Leave. For real. And he really meant it. That was an amazing feeling, which I had never experienced during my time in India. That instruction came from years of having mentored subordinates, and the employee-friendly laws of this country.

I hope more people get to see such professionalism, and kindness. But they wil have to travel away to experience that. As for me, I am living the dream.

Birds in the city

It is spring time in the city. After a particularly stretched winter, I can now hear bird sounds in the morning again. Not just simple chirping charping. Melodius, long , complex bird songs !

Always a good sign, the birds are the first to know of the changing season. The next few months are going to be pleasant , cool and a little rainy (hopefullly), until we get fried by the harsh Australian summer.

Not looking foward to that. Summer is the worst part of the year.