Wednesday, July 8, 2020

Risk, Reward, and COVID

Risk, Reward and Covid

“See you on the other side”, has been my most frequent sign-off line in telephone calls and e-mails over the last 4 months. ‘After Covid’ was defined, in my head, by the ‘Coming of the Vaccine’. 

With the Coming of the Vaccine would come noisy parties, festive evenings of music and dance, packed theatre evenings in tiny basements, inter-continental flights to meet loved ones. All the cherished fluff of affluence.

It’s not shaping up that way. ‘During Covid’ will be a long time in whatever tunnel you’ve decided to traverse. What I’m  hearing is that the first vaccine, when it comes, will be “probably more like a flu vaccine (40%?) versus MMR (97%)”. *

Will I have myself vaccinated? I’m not sure that’s the right question. Instead, the question may be, If I do get myself vaccinated, how much will I change my behaviour, if the effectiveness is only 40%?

Not much, really. I won’t go to mass gatherings, or indoor restaurants. Till there is more scientific data on in-flight droplet transmission, I won’t board an airplane except in a family emergency. In the last 100 days, the only home I have visited is my sister’s. I know her family has been extremely risk-averse in engaging with the world; even so, when I visit, I insist we leave the windows open, and run the fans. With a vaccine in my butt, or wherever they choose to administer it, I might expand my social ambit to 2 or 3 more homes, but I still wouldn’t attend business meetings-in-the-flesh. 

I haven’t been to a retail outlet in 4 months, and with Big Basket and Amazon ticking along nicely, I see no hurry to get off my couch. Except for early morning cycle rides, where I decided early on that outdoor transmission of COVID seemed highly unlikely. I make a weekly trip to an abandoned quarry, where we swim beneath open skies, watched by chattering, starved monkeys, and the occasional airplane. It’s a bit of a drive, but we brave the hot afternoons with the windows down, and our masks on. But once we park, and begin the rocky descent to the water hollow, masks are off, and we rejoice in the outdoor socialising.

I am sure there is some risk in each of the activities I do. ‘Zero risk’ does not exist. Before Covid, I drove on India’s highways, with the highest accident rate in the world, trekked in the high mountains, and swam in oceans. In everything we do, we balance risk and reward. Reward, clearly, is individual: for many, sleeping in a cold tent night after night is a penance; for me, it is a portable home in the majesty of nature. Risk, too, bends to the individual, to his knowledge and skills.  You get butterflies in your stomach watching a tightrope walker tiptoeing between two sky-scrapers, but his years of training and focus have lowered his risk of falling to near zero.  Risk also responds to the march of technology. Thanks to better air traffic control and safety protocols, the risk of death by flying has dropped 100 times in the last 50 years.

And so it will be ‘During Covid’. Drug cocktails will improve, treatment protocols will get better tuned, convalescent plasma will be produced at pharmaceutical scale. A vaccine that is even 40% effective will take us a long way towards herd immunity. Perhaps the virus will gradually lose its sting, as we have seen with other corona viruses. The era of ‘After Covid’ will dawn on a different day for you and me, as our individual risk perception falls below the threshold of concern. 

Till then, we will each find our balance of risk and reward, our unique balancing act. Some of us will stumble on the path, as we do on the longer road of life. 

That is in the nature of being mortal.

Saturday, August 3, 2019

Taxing Angels

Recently, 2700 start-ups were sent Income Tax notices that assert the right of Bharat Sarkar to treat some or all of the capital invested them as income for the company. And hence tax them.

In most accounts - and taxation systems - there is no confusion between income and investment. When an Indigo Airlines makes a profit, it pays income tax. When it issues shares to the public, it uses the cash to build its business, without the tax man claiming a share of that stake sale.

So why this confusion in the case of Start-ups? 

Apparently, it’s because many rich Indians have been investing in shell companies at inflated share prices. Not because they were being generous, or foolish, but because they needed to convert ‘white’ money to ‘black’. Such shell companies have a real economic value of close to zero, so if a crore of rupees is invested in such a company, the bulk is returned in cash - after subtracting a processing fee. On the other side, someone ponies up the cash, and gets a cheque, or ‘white’ money, in return. 

In response to reports of black-white conversion, the income tax department came up with a rule that allowed its officers to examine the share price of investments in unlisted companies. If they decided that the price was not justified by the underlying value of the business, they could treat it as income in the hands of the receiving company.

This provision is now threatening the eco-system for Indian start-ups. They have been served notices - and in some cases, assessment orders - to pay income tax on investments received 3 years ago. Most have long since spent that money in building their business, the reason for which it was invested; some have already folded up. Few have the cash to pay the tax, which was never part of their business plan. They will either have to sell more shares to pay the taxman, or declare bankruptcy. 

Meanwhile, angel investors, such as I, also received love letters from the Income Tax department, asking for a host of details, including paper copies of Income tax returns for the last 3 years. These are documents which the department has long since received, acknowledged, and based on which it has already assessed my tax liability. I found the demand more laughable than painful, but for many other ‘angels’, the paper-work is a huge deterrent to further investment in start-ups.

Giving the tax man the discretion to determine the ‘fair’ value of a start-up is fundamentally flawed. A start-up is little more than a dream or an idea. As an angel, I put my money where I see an opportunity in the market,  a gleam in the founder’s eye, and a hunger in his belly. The value put on the company is set by dialogue between angel and founder, not by some canned accounting formula. Discounted cash flow statements are drawn up to retro-fit this pricing, but I don’t know an angel who ever looks at them. 

Now taxmen are trampling over ground where angels scarcely tread.

Many influential bodies have tried to get the government to eliminate the “Angel Tax”. Instead, what we have in response is a drive towards more bureaucracy. Start-ups now need to empanel themselves with the Department of Industrial Policy and Promotion (DIPP), with the vague promise that this might spare them the angel tax. Investors need to have 50 lakhs of declared income and a net worth of 2 crore to qualify as angels. Many friends and family, who are often the first angels, won’t qualify. Nor will retired people with low income, but high net-worth, and lots of valuable business experience to contribute.

I have several comments on this state of affairs:

First, when two consenting adults agree on the value of a transaction, that is the only ‘fair’ price. Grasping this is essential to economic freedom. 

Second, the government has to decide whether investment is income, or not. If it is - and this would redefine global commercial practice - then all public share offerings should be taxed.

Third, giving discretionary powers to bureaucrats is highly destructive. If they possessed discrimination, they would be able to distinguish between shell companies and start-ups.

Fourth, there is no consonance between the empty rhetoric of Modi’s “Start-up India”, and the government he runs on the ground.

Fifth, in India, the bad drives out of the good, aided by the government.

Sixth, every mis-step by the government creates more government, less governance. 

Sunday, December 30, 2018

The toxicity of tolerance

“India is a tolerant nation”, Nitin Gadkari said in a speech recently. Many saw this as a more benign BJP hat being thrown into the Prime Ministerial ring. Be that as it may, I agree with Mr. Gadkari - we are an extremely tolerant nation.

We are tolerant of miscarried justice, uncleared garbage, killing roads, and the most toxic air in the world.

14 of the 15 most polluted cities in the world are now in India*, including my hometown, Delhi. Our air quality makes global headlines in autumn, when cool evening air traps pollutants close to the ground, low wind speeds stem their dispersal, and the acrid smoke of stubble-burning in Haryana and Punjab drifts our way. From October to January, the Air Quality Index (AQI) sets my activity levels for the morning. If it’s moderate, I hit the road on my cycle; if it’s poor, I don a mask along with my helmet; if it’s severe or hazardous, I stay at home, with the air purifier on. This year, I haven’t cycled since Diwali.

Medical research says I’m not being alarmist. If air pollution levels in Delhi remain where they are, the average resident’s life span could be shortened by 10 years. That number means little till you think of it in terms of chronic bronchitis, asthma, impaired breathing, tuberculosis, and lung cancer. Our air pollution is characterised by unprecedented levels of the finest particulate matter, sized below 2.5 microns (PM2.5). Our natural defences are not built to filter out pollutants this tiny, so they creep into not just our lungs, but into our bloodstream, and elevate the risk of depression, strokes, and various forms of cancer.

Our toxic air puts most of north India at risk, from Punjab and Haryana, through Delhi, into UP, and most of Bihar, home to over 500 million people. Pollution should be seen as a national crisis. Instead, in ‘The Great Smog of India’ Siddharth Singh writes, “silence has characterised the air pollution issue in every way”.

In 2016, an embattled Delhi Chief Minister, Arvind Kejriwal, launched an ill-conceived plan to keep 50% of private cars off our roads. It failed, and no alternative was brought into play. He also pledged to procure vacuum cleaning trucks to reduce road dust. 2 years later, you see the odd one in Lutyen’s Delhi.

In 2017, Mr. Kejriwal tried to discuss the stubble-burning issue with the Chief Ministers of Punjab and Haryana. No meetings were held; instead we have seen an extended verbal battle between Kejriwal and his Punjab counterpart, Captain Amarinder Singh. The public-minded flavour of this debate is well-captured by the Captain’s rhetorical question** - “even a school kid would know better, can he (Kejriwal) really be an IIT graduate?”.

Air pollution does not recognise state boundaries, and the looming health crisis requires massive coordinated action at the federal level. I do not recall a single call for action by our Prime Minister. In contrast, when air pollution in China hit alarming levels, Chinese Premier Li Keqiang declared, “We will resolutely declare war against pollution, as we declared war against poverty”*** Between 2012 and 2016, Beijing saw a 25% reduction in air particulate levels.

China’s governance structure is designed for severe top-down change, and severe penal action. Ours isn’t. This Diwali, the Supreme Court issued strictures against burning firecrackers in the NCR. Perhaps the Supreme Court overstepped its remit. Irrespective, the restrictions were flagrantly ignored, and little action taken by the police. While PM 2.5 levels jumped from 170 to above 1000 in 3 hours, vocal segments of the social media said the firecracker ban was an assault on their religious and cultural freedom.

We are now at the end of the year, and neither the state politics of stubble burning, nor the religious politics of Diwali cloud the issue. What we now clearly see is civil apathy. In my own neighbourhood, night watchmen burn wood fires to keep themselves warm, because their millionaire employers won’t pay for electric heaters. My family’s domestic staff refuse to wear the masks we bought them for outdoor work. Among the thousands of runners at the Delhi half-marathon, only a handful had protected themselves. It’s as if we are blind to the science of medicine, and the concept of long-term risk.

In a nation beset with economic and social issues, and limited by poor state capacity, governmental action will come only in response to massive public pressure and protest. Sadly, I don’t see this happening till the suffering piles up in lakhs of homes, and doctors and epidemiologists wave the death toll in our faces.

Meanwhile, long live tolerance.


*** quoted in ‘The Great Smog of India’

Sunday, May 27, 2018

Modi and the Politics of Inauguration

Can you inaugurate something that's not ready?

If you're Prime Minister Modi, you can. You parade yourself in an open top jeep, with scores of security guards and attendants, and inaugurate 9 km of a proposed 96 km expressway, that was first proposed in 1999.

The next morning, your followers wake to full-page announcements where your Union Minister of 'Road Transport & Highways...' proclaims:
"Congratulations to NHAI and Welspun Group for completing the green and sustainable Delhi Meerut Expressway in record time".

For a government perpetually in PR and campaign mode, why bother with the details, namely that only one tiny phase of the project is ready?

Talking of campaign mode, it doesn't harm the party that a by-election is around the corner, and it just happens to be a stone's throw away from the expressway. Campaigning inside the constituency would be a violation of EC norms, so let's find a new way of fingering these outmoded pseudo-democratic traditions.

Seizing share of voice in the political marketplace is Modi's forte, and he leaves the opposition flat-footed several times a week. Every institution - governmental, corporate, or non-governmental is recruited for the purpose.

Opponents can cavil, but the moment is passed.

Finicky folk can point at the facts, but this is a post-truth world.

There is a larger issue with public projects. In our country, especially, large projects span several governments, as they go from conception, through planning, to debate, costing, land acquisition, tendering, and execution. The Delhi-Meerut Expressway was first mooted in 1999. The idea was written into the NCR transport plan 2021 in 2005. Chidambaram announced it in his 2006 Budget speech. At one stage, it was to be built by the UP state government; in 2013, it was confirmed that the central government would be responsible for the project.

Given these massive gestation periods, infra-success has many fathers. What matters is who proclaims paternity loudest. Right now Modi is doing that.

Saturday, May 26, 2018

Icarus, and Doping in Sports

Last night, my son and I were comparing notes on the Giro d'Italia, one of the Big 3 European cycling races, and speculating whether Chris Froome would be able to win the stage.

Waiting for race updates from the Guardian blog, I was bemused to see a spectator taunting Froome with a massive mock-up of an inhaler - Froome is fighting a legal battle for his rights to his last two racing titles over the salbutamol levels in his blood.

The next race update showed that Froome had raced down the last descent at an average of 53 Km, an hour, with a peak speed of 80 km, and was now clear in the lead for his fourth grand tour in a row, a record unbeaten since Eddie Merckx, who retired in 1978.

Thinking about drugs in sports, I turned to 'Icarus' on Netflix, a riveting 'accidental' documentary. By a bizarre set of circumstances, a playwright and stand-up comic, Bryan Fogel, found himself in contact with Dr. Grigory Rodchenkov, Director of the Russian anti-doping center. It's tough to believe that Grigory is not a masterpiece of film-writing and casting, as he an engrossing, complex character, who happily helps Bryan Fogel devise a personal doping program that will beat the anti-doping system.

Meanwhile, WADA, the World Anti-Doping Agency, is crawling over the Russian lab, suspecting that the Russian sports system is not as clean as it claims. Grigory bails out, flies to the US, and with Bryan's help, turns whistle-blower. The New York Times carries a massive story, the WADA gets in on the act, and given the amount of data Dr. Rodchenkov is able to offer up, concludes, "I can confirm, for years, that spectators have been deceived. The desire to win medals superseded their collective moral and ethical compass, and Olympic values."

The 2016 Rio Olympics were weeks away, and WADA recommended to its parent organisation, the International Olympic Committee, that Russia be banned from the Rio games. The IOC passed the responsibility for the decision on to individual sports federations; eventually, 111 Russian athletes were banned, and 278 took part.

Given the time frame, and the paucity of data from Russia, I would assume false exclusions in both sets of Russian athletes. Having seen the film, I suspect the number of athletes on doping programs who came to Rio was significantly more than those not on drugs who stayed away.

This is probably true of most professional sports - the doping docs stay one step ahead of the anti-doping docs, and in some cases, the two are the same. Under the circumstances, it's probably a huge burden on a professional athlete to stay away from doping. Everyone's looking for a silver bullet, as long as (s)he  doesn't get caught.

Would a laissez faire approach work better - find the training regimen, needles and pills included, that sails your boat...

Tuesday, May 22, 2018

Flower power, at 50

The first rock musical, HAIR, opened on Broadway in 1968.
It captured the spirit of Hippiedom with the exuberance of protest, inspired lyrics, and the shock value of a nude scene. It ran on Broadway for 4 years, in London for 5, and was adapted into a film by celebrated movie director Milos Forman. A generous cousin gifted me the double album set of the soundtrack, and its songs deeply informed my teenage years.

Ten days ago, I got to see a traveling production of Hair in Munich, and I had this strange sense of traveling into the past to look at the present.

Hair was a protest against the Vietnam war, and the draft; a plea for love, peace, and clean air.

It was a paean to the solidarity of youth, to the joys of sex - of all kinds, and free love.

It was a celebration of drugs.

And, yes, to the freedom to wear your hair long.

In the context of the late 60s, the demands that Hair made of society were truly fringe. And yet, its appeal, which was quite unprecedented, could be seen as a pointer to how widely change was sought.

5 decades later, so much of that change has been wrought, particularly in the US.

Though wars may still rage across the world, annual deaths have trended vastly down since the late 60s, and Max Roser has an amazing set of graphs ( to show the changes. And draft, a central theme in Hair, was removed in 1973.

'Free' Love, meaning sex outside of marriage, barely merits mention today; same-sex intercourse, and marriage, have wide-spread acceptance, and increasingly, legal sanction. In June 2016, President Obama dedicated the Stonewall Monument in Greenwich Village, Manhattan, to honor the LGBT rights movement. In November of that year, Kate Brown became the United States' first openly LGBT person elected Governor.

During World War II, smog in Los Angeles was so bad that people suspected a Japanese chemical attack. But the US Congress enacted the Clean Air Act in 1970, and progress has been rapid. California is still vulnerable to forest fires and thermal inversion, but air pollution in the US is not a major public health hazard. Meanwhile, 14 of the world's most polluted cities are in India.

And drugs? 64 % of American citizens support the legalisation of marijuana. In 29 states, you can smoke it for 'medical use'. And legal annual marijuana sales crossed 10 billion dollars in 2017.

Long hair? Man-buns is now a thing.

I don't want to make too much of a point of this, but I was really struck by how the performing arts can anticipate change, and, perhaps, just perhaps, influence it.

Monday, May 21, 2018

Memories of Migration

Madras, we called it then, when I was 6, and 7, and 8, living in a company compound fringed by a casuarina grove. To the east were the backwaters of the Adyar river. To the south, the rambling grounds of the Chettinad Palace. Always locked, a large wrought iron gate separated us from its legendary opulence, but one summer, it’s owner, MAC Chidambaram, sent word that he would be happy to have the children of our estate ride his ponies of an evening.

Jodhpurs were stitched up, riding hats were to be loaned by the stable. 7 or 8 of us walked through that open gate in a cloud of excitement large enough to cloak my indifference. The clumsy effort of clambering onto my pony did little to enthuse me. A slow trot around the paddock, a patient syce by my side, was not my idea of fun. And when we got home, my ‘bums’ hurt. But I couldn’t be the first one to cry off riding.

Munnu, already a teenager, took to the saddle with aplomb. Within a week, the syce had handed her the reins. A few days later, she and her horse were liberated from the paddock, while I still felt like a tin soldier limping around a cardboard track. Every evening, Munnu rode faster, more freely. One evening, her horse bolted. Her syce stood rooted; another mounted a pony and gave chase. Our slow parade around the paddock halted, but now both horses were out of sight. Munnu was thrown by her horse before the syce caught up. No damage done, but the gate between Firhaven and Chettinad Palace was never again opened.

Not that we missed it. Madras was going through the parochial spasms of language riots, but Firhaven was a cosmopolitan enclave. Our 8 families  were Punjabi, Gujarati, Maharashtrian Keralite, Coorg, and Konkani. On Holi, a tub with flaking enamel was rescued from the estate stores, plonked in the centre of the garden, and filled with yellow water. On Diwali, we slept through the pre-dawn Lakshmi puja of our Mylapore neighbours, and came out at night to set the skies alight with the barbaric tradition of rockets and ‘atom bombs’. For Christmas, we dressed in red and green, and sang carols in front of a Christmas tree.

My father’s employers looked after its own. We had access to a gorgeous cottage in Ootacamund, with trimmed hedges, and a cook who served up mushroom omelettes and strawberry tarts. Most evenings, my mother would pick us up from school, and drive us straight to Elliott’s beach, where the company shack was lit by lanterns, and our cold coffee stayed that way, thanks to a refrigerator that sputtered out kerosene fumes. On Sundays, we swam in the Madras Gymkhana, and snacked on fried fish and chips.

Sifting through a rich haul of memories from these years, I found only a few from school.

One is of a girl who sat at the next desk. Several weeks after I joined school, she shyly offered me a piece of dry mango pickle. It’s leathery texture was alien, but my tongue relished its coarse, crystallised salt. As it softened in my mouth, its tartness was released in an explosion of raw mango. My memory of the scene plays out like a silent movie, lit by the Madras sun, its white shafts slanting through the deep verandahs into our class. I have no memory of what words were exchanged, if any. But I know that the pickle was offered several times, and that it was the work of her grandmother.

One of the few words I remember from my time in Presentation Convent was ‘Sangam’. Addressed to me, and followed by a question mark. I had no idea what this was about, so replied with a question mark of my own.

‘You were in Sangam’. Not much of a question mark there, more a statement of fact, from a boy I met near the outhouse toilets, reeking of ammonia and damp heat. I shook my head, not so much a ‘No’, as ‘I still don’t know what you’re talking about.’  

He didn’t elaborate, and we passed.

A couple of days later, a girl stopped me in the corridor. “You acted in Sangam?” This I could answer. “No.” She looked at me carefully, was not convinced, but moved on.

That would make Sangam a movie, I guessed. And apparently, I looked like someone who acted in it. My parents knew nothing about movies, but one of my Punjabi ‘aunties’ did. It was a big budget movie from the house of Raj Kapoor, shot in spectacular colour. And, yes, a boy acted in it - Randhir Kapoor, Raj Kapoor’s son. “But he’s much bigger than you, betey, and you don’t really look like him. Except for the green eyes, and of course the fair skin”.

Vimla Aunty was looking at my physiognomy, but my Tamilian school mates were seeing only my phenotype. They could clearly see what many custodians of Indian history try to deny.

Some ancestor of mine had wandered away from the Scythian territory “between the Caspian Sea and Jaxartes river”. I don’t know if she came in search of peace, or he came in search of conquest. I know my forebears carried the love of adventure that courses through my veins, and animates my joy in travel.

I carry no guilt if they were ferocious in battle, or brought alien customs to a distant land. I reject the notion that cultural appropriation is a crime. I’ll take my customs from whatever appeals to my changing aesthetic, and my evolving world-view, thank you very much.