November 21, 2012

bombay/thane police is among the worst in the country



As a Bombayite who is aware of the deliberate police inaction during the heinous violence against Muslims in Jan-Feb 1993 due to their Shiv Sena linkages, I am, therefore and unfortunately, not surprised by what the newsreport I give below represents. 

The Bombay police, Thane police and the rest of the police machinery in Maharashtra are hostages of the criminal elements (not discouraged the least bit by leaders of their party) of Shiv Sena and Nationalist Congress Party and in subtle ways also those of the Congress Party and the Daiit parties.

Maharashtra may not be only state in India where one sees such a criminal police force, yet the incident reported below is nothing short of state-sponsored terrorism. 

Here is that newsreport:

 

http://www.thehindu.com/news/states/other-states/two-girls-held-for-fb-post-over-thackeray-funeral/article4111814.ece?utm_source=action_alert&utm_medium=email&utm_campaign=13737&alert_id=UqFGksZXml_opavdnnhRy

Mumbai, November 19, 2012
'Mumbai shuts down due to fear, not respect'
Mumbai Bureau

Two young women were arrested here on Monday on charges of “promoting enmity between classes” and “sending offensive messages through [a] communication service,” after one posted, and the other ‘liked,’ a message on Facebook on Sunday, questioning the Mumbai bandh that followed Shiv Sena leader Bal Thackeray’s death. Both of them were released on bail by a local court on Monday afternoon.

“With all respect, every day, thousands of people die, but still the world moves on,” read the message posted by 21-year old Shaheen Dhada and ‘liked’ by 20-year old Renu Srinivasan from Palghar in the neighbouring Thane district, her lawyer Sudheer Gupta told The Hindu. The post continued: “Just due to one politician died a natural death, everyone just goes bonkers. They should know, we are resilient by force, not by choice. When was the last time, did anyone showed some respect or even a two-minute silence for Shaheed Bhagat Singh, Azad, Sukhdev or any of the people because of whom we are free-living Indians? Respect is earned, given, and definitely not forced. Today, Mumbai shuts down due to fear, not due to respect.”

Following public outcry over what has been widely condemned as an attack on the constitutionally guaranteed right of free speech and expression — among others, Press Council of India chairperson Markandey Katju said the arrests were illegal and demanded action against the police — Maharashtra Director-General of Police Sanjeev Dayal ordered a probe into their arrest.



Shaheen and Renu outside the Palghar court on Monday. Photo: Special Arrangement
Shaheen and Renu outside the Palghar court on Monday. Photo: Special Arr


The women were earlier booked for hurting religious sentiments under Section 295A of the Indian Penal Code, along with Section 66A of the Information Technology Act. On investigation, the police altered the charges, withdrawing Section 295(A). They were formally arrested on Monday morning and later released on bail by a local court on a bond of Rs.15,000.

“On investigation, we withdrew Section 295(A) and booked them under Section 505(2) [of the Indian Penal Code],” Sangramsinh Nishandar, Additional Superintendent of Police, Thane Rural, told The Hindu. Section 505(2) pertains to statements which create or promote enmity, hatred or ill-will between classes.

On Sunday night, mobs of angry Shiv Sainiks ransacked an orthopaedic hospital run by Ms. Dhada’s uncle at Palghar after they came to know of her comment on Facebook. Dr. Abdul Dhada has registered a First Information Report (FIR) in Palghar police station.

“There was some misunderstanding. Something was quoted by my younger brother’s daughter on Facebook. The Shiv Sainiks were unhappy about it. So yesterday [Sunday] night, they ransacked my hospital. But I would not like to talk about it any further as the matter is being resolved now,” Dr. Abdul Dhada told The Hindu from Palghar.

A request to speak with Ms. Dhada, who is a Bachelor of Management Studies, was refused. “She is traumatised. She is not in a frame of mind. It is not possible to talk to her right now,” he said.

But Shaheen’s Facebook page reflected her agony and anger, as her recently-changed profile picture showed a girl’s face whose voice has been muzzled by a tape sealing her mouth.

Her uncle said she had merely reposted the message someone had forwarded to her on Sunday. After she posted it, her friend Renu, a B.Sc (Botany) graduate, ‘liked’ it.

“She had not mentioned Balasaheb Thackeray’s name anywhere. But some Shiv Sena supporters who came to know about the post got angry and ransacked the hospital of Dr. Abdul Dhada,” Mr. Nishandar said.

The head of the Palghar unit of the Shiv Sena, Bhushan Anant Sankhe, filed an FIR against the two women at the Palghar station, even as a mob of Shiv Sainiks gathered there. Another mob of 80-100 Shiv Sainiks surrounded Dr. Dhada’s hospital and pelted it with stones. Police said the mobs broke glass and toppled beds in the hospital.

A case has been registered against 40-50 “unknown persons” under Sections 143, 147, 336, 427, 451 of the Indian Penal Code; Sections 3, 7 of the Criminal Law Amendment Act and Section 4 of the Maharashtra Medicare Service Persons and Medicare Service Institution (Prevention of Violence, Damage or Loss of Property) Act.

“The girl’s uncle [Dr. Abdul Dhada] received a call from the police on Sunday evening saying that his niece had posted some objectionable comment on Facebook. The police apparently asked him to tell her to withdraw it. Accordingly, the girl deleted her comment and tendered an apology saying that she did not do it with the intention of hurting anyone’s sentiments. Around 8.30, Dr. Dhada got a call from the hospital informing him that mobs were ransacking his hospital,” Mr. Gupta said.

Sources said that though the women were formally shown as arrested on Monday morning around 10.30, they were sent to the police station by the families on Sunday night itself. The FIR was registered against them at 9 p.m. on Sunday. They were produced before the court at 3 p.m. on Monday

Meanwhile, Mr. Sanjeev Dayal said he had directed the Inspector-General of Police of the Konkan Range to investigate the matter and submit a report by Saturday.

Online protests

Social media platforms were abuzz with support for the two women and anger against the arbitrary police action. Some reposted the message that Ms. Shaheen had posted on her wall, and offered to court arrest. Others offered legal aid to Ms. Dhada and Ms. Srinivasan.

“People like Thackeray are born and die daily and one should not observe a bandh for that” — Shaheen got arrested for posting this. Let’s post this on our wall, and let them arrest us too,” Divya Rajagopal posted on Facebook.

“If anyone knows the girl arrested for posting a comment on Facebook, ask them to contact me! Would love to help them filing a case in SC,” media professional Sumit Nagpal posted on Twitter

Comments(140)
I doubt that we are living in a democratic country.. We have the right to speech, thought and expression as per our Indian Constitution..
from:  Sree  Posted on: Nov 20, 2012 at 19:00 IST

The girls should file a complaint in the higher courts against the FIR filed and then sue Mumbai Police for making arbitrary (or unlawful) arrests, violating their fundamental right of speech and for causing emotional, physical and financial trauma. 

from:  Sunil  Posted on: Nov 20, 2012 at 17:48 IST

This incident should make all the Bollywood celebrities and prominent politicians, what Thakrey and his legacy truly represents. And the President's comment that his death is an "irreparable loss" should be contemplated by the people of the country and the President himself. What that is on offer in the future is really more worrying than what is happening. The whole country hopes that people of Maharastra and people of Mumbai in particular will see through Shiv Sena's ideology and show them their place in India. Jails and prisons. Not Assembly or the Parliament.
from:  Sai Karthik Posted on: Nov 20, 2012 at 17:47 IST


I was just wondering how someone who is not Shaheen Dhada's friend on fb could see what she has posted on fb. Isn't this violation of privacy? If someone is snooping on her profile then shouldn’t he/she be arrested? IT laws somehow don’t get applied here. Let’s for a moment forget what police has done and concentrate on the judge. The judgment was appalling. Any lame person would have given a balanced and better judgment. And the turnaround time after the FIR got registered and the girls got arrested was amazing. Our country would have been a best country if the same urgency was shown in booking corrupt officers and politicians.
from:  kalyan
Posted on: Nov 20, 2012 at 17:20 IST

It a shameful and disgusting act by the police to arrest two young women who express their views. Politicians support vandals who instill fear among law abiding citizens.
Even the media is biased but not for the social networks will be toeing the politicians line. In India there is no freedom of speech. It is only freedom for poitician's speech.
from:  shiva
Posted on: Nov 20, 2012 at 16:52 IST

I think the yesterday incident came into picture because it happened
in the city like mumbai and around.But atrocities of police and their
controller are much more and dangerous than that in other part of
India.This is what Bal Thackeray's footprint for us? or Do we need to
introspect as a society at this time?
Thank You The Hindu.That's why I like You.Please start an edition
from Mumbai.
from:  Sahil
Posted on: Nov 20, 2012 at 16:42 IST

"It's now very common to hear people say, 'I'm rather offended by
that.' As if that gives them certain rights. It's actually nothing
more... than a whine. 'I find that offensive.' It has no meaning; it
has no purpose; it has no reason to be respected as a phrase. 'I am
offended by that.' Well, so *sic* what." -- Stephen Fry
We are following a dangerous trend if people feeling hurt by political
statements made by others can sue them or litigate them till they're
scared enough to apologize. There is no sentence in any language that
does not offend someone in some way as people are creative enough to
find offense out of anything. Aggressive restrictions on freedom of
speech would only result in total restriction of speech as an account
of that.
Litigations like this are nothing more than a way to silence
dissenting opinions of individual members of the public against big-
shots. I don't think any cop or judge would've followed the case had
another politician made the same statement.
from:  Harsh Patel Posted on: Nov 20, 2012 at 16:40 IST

"Why do we have to suffer during the bandh? Who is going to earn us food
on that day? Do these people who call bandh feed us?", said a cab driver
in Mumbai. This is the voice of a mango man. If not for fear, why are
people like them closing their business?
India is beautiful because of it wide variety of cultural coexistence.
Please don't separate people in the name of cast/community/region.
from:  Naveen Posted on: Nov 20, 2012 at 16:15 IST

Bravo Shaheen and Renu! Wish atleast 10 percent of our youth emulated you! The this country would have really been the Ram Rajya Gandhiji envisaged!
from:  P M Ravindran
Posted on: Nov 20, 2012 at 16:14 IST

I am not of an Indian origin nor of Indian background. But as far as I know, this contradicts the notion that India, being the 'BIGGEST DEMOCRACY' in the world. Personally, I am not against India in any way. Nevertheless, most of the at most of the places, what is exercised by most of the people is not of a democratic element neither a democratic practice. I should not deviate from the issue being discussed in anyway. I call upon the Indian police to arrest the mobsters who vandalised the clinic and halt the destructive and cult movement that the  Shiv Sainiks are creating. This will only prolong the wreck havoc, that would cause irreparable damage both financially and psychologically.
from:  Mohamed R. Ahmed Posted on: Nov 20, 2012 at 15:43 IST

If restriction on "Right to Freedom" is like I'm in a sealed room without air. Right to Freedom is our constitutional right and no law can restrict us to use us these laws. I'm agree to use these right with more responsibility but police must also responsible to not to violate these Right to Freedom of Constitution.

Here, we can find that these young girls haven't violate any law but some officers of Maharashtra Police have violate sections of Constitution. This must be taken more serious same as unlawful arrest of these girls.
from:  Ishan Varade
Posted on: Nov 20, 2012 at 15:41 IST

What i would say is that the statement released by the people saying that the people closed their shops for homage is utter nonsense. I was on the road at that time for repairing my mobile phone and the shop was
forced to close. And also the businessmen wanted to keep their shops/restaurants closed on saturday night and sunday to pay homage? I do not agree to statements of shivsainiks. My condolences with thackeray
and family but not to shivsainiks. 

from:  sartaj Posted on: Nov 20, 2012 at 15:37 IST

girls should be proud what they have highlighted.In my opinion police commissioner should be charged for wrongful arrest.Girls should be compensated for harrasment caused. All those who were involved in vandalizing clinic should be punished by law and asked to pay for refurbishment of the clinic and the loss suffered. Siva sena chiEf should be warned that this type of behaviour will not be tolrated in the future.it is really indias shame. BAL THAKEREY WAS JUST A PERSON HAPPENED TO BE A KIND OF LEADER OF PEOPLE WHO FAILED TO REASON PROPERLY his motives.
from:  K N SAIGAL
Posted on: Nov 20, 2012 at 15:36 IST

Girls , Whole rational India is behind you. You spoke what everyone else thinks, atleast you have the guts to speak out without hurting others , I and many dont find a small hint of derogatory , or enmity speech in your status update. To all other Indians out there , fight to bring down the draconian IT laws , It was pushed like all other bills without substantial thought process given into it. India should for time being officially announce its not a "democratic country".
Again , stay brave Shaheen Dhada and Renu Srinivasan. We are all with you.
from:  Ramesh
Posted on: Nov 20, 2012 at 15:04 IST

This crackdown on free speech is uncalled for, to say the least. What was incendiary about her post? It was carefully worded and did not say anything offensive. The ones who took offence were those who were in fact creating the fear the post spoke about.
My sentiments are hurt, too - hurt by the vandalization and the unnecessary arrests.
from:  Jyothirmoyi
Posted on: Nov 20, 2012 at 14:43 IST

@shreya: visit any south indian's Fb page.. u ll know how many comments are posted again yeddi, jaya and karunanidhi... none of them were attacked... this is just gundagiri and nothing else....
from:  manasi
Posted on: Nov 20, 2012 at 14:41 IST

freedom of speech & freedom of expression are rights given us by
indian constitution. we should use them properly. it's our duty to
be responsible for what we post in social media. "With great power
comes great responsibility". we should use rights carefully. dont
hurt anybodys sentiments.
from:  prashant
Posted on: Nov 20, 2012 at 14:36 IST

Freedom of speech is never denied but one should take care that no ones sentiments are hurt. Fundamental rights give freedom to speech not freedom to hurt. Here millions of people who were resilient due to the respect for " Balasaheb" and you hurt feeling of those millions. I dont support action of destructing hospital but nor i support the Shaheen's post. Trust me if someone has posted such comment for any other leader who has strong back up of particular religion or cast/community, their supporters would have reacted the same way.
from:  Shreya Prabhu
Posted on: Nov 20, 2012 at 13:47 IST

Shaheen Dada has merely expressed her views. She deserves full credit
for showing courage to write something that many people would not have
dared to do. I read in one newspaper that police had earlier charged her
with "hurting religious sentiments"! What a mockery of Indian
democracy!!!!
from:  Sudhakaran T
Posted on: Nov 20, 2012 at 13:47 IST

The arrest shows the the way of Great Indian Democracy being run.
Democracy is only for the rich and politically strong peoples.
Rest all are considered slaves. Shivsena should rebuild the hospital to improve their image and teach a lesson for their supporters not to indulge in ransacking public or private properties.
It is hightime that we raise our voice for freedom for expression . First of all I totally disagree with Shivsainiks policy. Now a days I can see many Marathis are happily working in Bangalore, Delhi, Chennai, Uttaranchal, Gujarat etc.. It is high time they should change their policy of Maharashtra only for Marathis considering the current scenario of globalisation. They should think in terms of global village rather than separation politics. Quality Education will only lead the people to think in this angle.
from:  sankar
Posted on: Nov 20, 2012 at 13:45 IST

Respect is earned, given, and definitely not forced. Today, Mumbai shuts down due to fear, not due to respect.
from:  sharan
Posted on: Nov 20, 2012 at 13:20 IST

Okay, that was Shivsena is all about, but the pattern is nothing new.
All parties use power (physical, police, old rules) to harass and
intimidate people. The education has failed miserably to teach values
of democracy.
from:  Jayan
Posted on: Nov 20, 2012 at 13:02 IST

I am a north Indian but I respect Bal Thackeray as a leader, upholding the true identity of Indian nationalism and patriotism.Where other politicians try to garner vote bank through divide and rule, Bal Saheb always followed a single principal, "Be Indian, Act Like an Indian". It was his great quality to stick to what he commented, not like other politicians who always have an excuse to sidestep from their comments by saying "Press walo ne tod mod kar galat pes kiya".
I say India lost a great patriot. Even if Mumbai was shut due to fear or respect, it is true that majority Indians, be it politicians or others only seek their rights but forget about their responsibilities to the country and only with fear they tend to follow their duties.
The girl who posted comment on FB should have thought about the sensitivity of the issue on the crucial time. It is necessary people stop uttering negative comments on the crucial time that may add salt to wound.
from:  Subodh
Posted on: Nov 20, 2012 at 12:52 IST

these ladies should not have covered their faces. they did a bold thing. so why hide like common criminals?
from:  vasudevan nambisan
Posted on: Nov 20, 2012 at 12:26 IST

Uncle of J & K chiefminister openly says that India is the enemy of J & K, he is not interogated forget having him arrested. This is Indian democracy for Indian politician. They can arrest innocent girl and boys only and goes to barrach when terrorist come.
from:  SUSHIL
Posted on: Nov 20, 2012 at 12:22 IST

Unbelievable stuff. A girl points out correctly on her private facebook
account that the economic capital of the country is being closed out of
fear and she gets jailed. And then the goondas ransack a hospital,
putting to danger the lives of the sick, and don't even get arrested for
actual violence. And there are people insisting that the bandh is not
due to fear but out of respect. Ransacking hospitals apparently earns
you respect.
from:  Aditya
Posted on: Nov 20, 2012 at 12:11 IST

We agree that Bal Thackeray is powerful. But, we even realize that our own politicians made us the powerful "aam aadmi" while campaigning. Aren't we, capable of at least expressing our views?
from:  Venkat
Posted on: Nov 20, 2012 at 12:09 IST

Police should have requested girls two remove the message for curbing
the outburst which may happen. But Arresting them will spoil their life.
Police also should arrest the people who damaged the hospital. Anyway,
it really shows the freedom is going far away from common people.
from:  Karthik
Posted on: Nov 20, 2012 at 12:08 IST

This is sheer stupidity. Are we becoming so intolerant to criticisms and and counter thoughts? What is wrong with that question? Is it not true that Mumbai was shutdown by fear and not by respect? Police and the Government are playing second fiddle to these forces. What a shame?
from:  Santha Kumar
Posted on: Nov 20, 2012 at 12:07 IST

Before blaming law enforcement agencies,let us ponder over this issue
and make an honest assessment of our own behaviour which is often out of
tune in a democratic country.We go berserk over matters of little or no
consequence.We say and do things that contribute to communal flare ups.
So are our political parties.
from:  Gajanan.Taman
Posted on: Nov 20, 2012 at 12:06 IST

We call this country a democratic country, as Suresh commented, I think if the same message was run by a big politician I don't think police would have acted the same way they acted in this case. Country is going backwards with every passing day....
from:  Sas
Posted on: Nov 20, 2012 at 12:02 IST

@Ratnam: As you said freedom of opinion is there only in the books and
we are not experiencing that in most cases
from:  ANANDA PRAKASH R
Posted on: Nov 20, 2012 at 12:00 IST

The point has been proved by young girls.If you do not fall in line you are doomed.This is what happens with out spoken people now a days.Its a shame.
from:  Ravindra Raizada
Posted on: Nov 20, 2012 at 11:59 IST

Wow, what a democracy we find ourselves in... This is totally unacceptable on part of police to harass innocent citizens for daring to express their opinion on whatever platform avaialable. Shame!!
from:  Shrenik
Posted on: Nov 20, 2012 at 11:55 IST

I'm amused by the proponents of Thackeray's cause. So what if people are displaced from their homes? Protest, by all means. Stay within the framework of law and constitution and protest to your hearts content.
But the moment you step outside that perimeter to flirt with violence and intimidation to further your cause, regardless of what poignant epic be your cause to do so, you are no different from a terrorist. No different.
from:  Balaji R  Posted on: Nov 20, 2012 at 11:44 IST

Pathetic. Its even more pathetic that the police bring these young girls to the police station, leave alone arrest them. people like them are the future of the cuntry, not property-destroying goons. I am a Maharashtrian from Mumbai and love the city. but this is no way.
from:  Shirish Joshi  Posted on: Nov 20, 2012 at 11:44 IST

Pooof.. what rights do girls (or anyone) have in India? How dare they post their opinions on Facebook? What is wrong with them? Hasn't years of oppression and fear taught them anything? Are they free-thinkers? Ooo.. they are in for some big trouble. I am personally thanking the puny Mumbai police, and the mighty Shiv Sena for not molesting them.
from:  Abhay  Posted on: Nov 20, 2012 at 11:38 IST

Very unfortunate incident. Arresting should be the last resort and only for major crimes. This issue will also die down like the others without any action being taken against the police. What does the police do for all the hate comments that our politicians make? Will they start arresting them if the public makes compliants. I am surprised that the police agree for such FIRs knowing how FIRs related to heinous crimes are not even accepted till there is pressure.
from:  Suresh P  Posted on: Nov 20, 2012 at 11:36 IST

We lost the "LIBERTY of thought, expression" which stated in our Preamble to the Constitution of India
from:  Satheesh PM
Posted on: Nov 20, 2012 at 11:34 IST

It is hightime that police machinery are functioning as Public servants and not as employees of powerful political parties. yesterday's arrest is a sad reflection of the deteriorated state of our public servant's services to the citizens. Why cant police machinery act swiftly the buisness establishements to close when political leaders however great they are. Police shud give protection to the traders instead the weak
govt directs the law and order to do the exact opposite. What will be
the fate of thousands of train travellerws who would have arrived on
17th morning at mumbai, shud they stay in the station without food and water for the whole day just because the funeral procession of the so called leader is going on. It was quite repulsive to note the english TV channels broadcasting the throught the day the funeral procession and glorifying the departed person, as though he has struggled for the nation.
gopu
from:  K.GOPU
Posted on: Nov 20, 2012 at 11:31 IST

@Nachi, you want to stop commenting because someone will arrest you?
were u born in the country where Civil Disobedience and non-violence movement was born?
This is just stupid to run a Anarchy in a democracy and we the people are supporting it from the sidelines.
from:  Murali
Posted on: Nov 20, 2012 at 11:29 IST

"With all respect, every day, thousands of people die, but still the
world moves on, Just due to one politician died a natural death,
everyone just goes bonkers. They should know, we are resilient by
force, not by choice. When was the last time, did anyone showed some
respect or even a two-minute silence for Shaheed Bhagat Singh, Azad,
Sukhdev or any of the people because of whom we are free-living
Indians? Respect is earned, given, and definitely not forced. Today,
Mumbai shuts down due to fear, not due to respect."

I can't see how this hurts any religious or communal sentiments. The
very action of the Police and political activists confirm that Mumbai
shut itself down due to Fear and not Respect.
from:  Jai Suresh
Posted on: Nov 20, 2012 at 11:27 IST

It's a mockery. Bal Thackeray has been spewing venom against
minorities/immigrants for decades. Raj Thackeray is following in his
footsteps. And it's not words but matched by actions as well. Did the
police ever move so swiftly against them?

It's not just right wing Hindu politics. It spans across the entire
political spectrum. There is a growing level of intolerance. And
apparently some people are more equal than others.
from:  Raj N
Posted on: Nov 20, 2012 at 11:20 IST

Very very unfortunate indeed for Indian democracy .. Two young girls lost their
freedom of speech and vandalized .. foreboding something similar for many in
future. Everyone, including the seasoned politicians (including the govt - PM or the CM) seems to be afraid to stand on the side of the truth and justice. The culture of skewed self-interests giving rise to fear, arrogance, suppression and complicity to the acts of injustice. We sit muted in the homes of our own fear and indifference. We must dialogue and be educated about our own freedom...
from:  Harsh
Posted on: Nov 20, 2012 at 11:19 IST

What the girls did, was not wrong at all, if you people like to blow the trumpet day and night that India is bold and free country then you must
prove it, not with mere words but with your actions. If I was living
there, I would have done the same thing by exercising my right of
freedom of speech!
from:  Syed Muhammad Wahaj
Posted on: Nov 20, 2012 at 11:17 IST

Renu and Shaheen deserve support from all sections of the soceity for calling a spade a spade. Closing dowm Mumbai and causing untold hardships to millions of people and billions of ruppees loss to the exchequer, due to the death of one regional political leader? Wake up India, we should do better than that.
The Maharashtra Government should be sacked forthwith for not allowing the common man to earn his daily bread.
The police officers who arrested the girls should be sent back to police academy for a refresher course. All the cases aginst the girls should be withdrawn with an apology from the Governor.
The orthepedic surgery's loss to be compensated by Shiv Sena. Finally if Shiv Sainiks think the best homage to Balasaheb is to shut down Mumbai, they have lost touch with the common man. Imagine the number of daily wage earners went hungry due to the natural death of an old man. Thuggery should give place to pragmatism and patriotism.
from:  mani sandilya
Posted on: Nov 20, 2012 at 11:17 IST

Earlier the arrest of anti-corruption cartoonist Aseem Trivedi by the Mumbai Police on sedition charges and now arrest of these girls on hurting religious sentiments by speaking against the bandh! Really where is our freedom of speech and so i am not surprised at the blatantly false and extraneous charges against them.
It seems to be the right time to start Indian chapter of Russian Pussy Riot.
from:  Aradhana
Posted on: Nov 20, 2012 at 11:13 IST

I just wonder whether the police would have acted in this manner if the same
message had been posted by a politician. Does the police / judiciary / intelligence
agencies have the same will power to act against politicians involved in the various
scams ? In our democracy it is easy to target the "mango person" for all the trivial
things but it is sacrosant to go after the politicians who loot the country on a daily
basis. By the way did the police go after Robert Vadra for his tweet about the
"mango person"
from:  Suresh Venkataramani
Posted on: Nov 20, 2012 at 11:09 IST
 

It seems as if Maharashtra & Mumbai is the fiefdom of Shiva Sena and all the law enforcement agencies dance to their tunes. There is no other explanation for what happened. The responsible police officers should be sacked with immediate effect and action should also be taken against the judge who instead of throwing the case out has entertained it. are we living in a civilised democratic society or in a society of goons and rowdies. We need military rule in our country for atleast 10 years to eliminate all these cancers.
from:  B Raju
Posted on: Nov 20, 2012 at 11:08 IST

I want to comment , but I won't.
I am afraid Police will accuse me of disturbing law and order if I show my respect to Netaji Subhash,Bhagat Singh,Mahatma Gandhi and not to their favourite leader.
from:  P. Pandey
Posted on: Nov 20, 2012 at 11:07 IST

Guy please stop commenting here. You could get arrested if your opinion is disliked by some powerful person.
from:  Nachiappan
Posted on: Nov 20, 2012 at 11:02 IST

There limited freedom of opinion in our country. Your freedom of
opinion ends where it starts messing with the power structure in the
society. Even after death of Thackeray, Shiv-sena, his legacy and his
memory is still a formidable force... don't mess with it.
from:  Vijay
Posted on: Nov 20, 2012 at 11:01 IST

Some People are being intolerent for others views. Police follows netas words than Constituation. Do not follow the path of our neighbours.
from:  Vishnu
Posted on: Nov 20, 2012 at 10:59 IST

It is utter stupidity to think a city will mourn anyone and shut down on
their own. Respect=Fear of violence. It is unfortunate our judiciary
system allows this to happen time and again. Kudos to the girls for
expressing their views which is their birth right as citizen of
democratic nation
from:  Shiv
Posted on: Nov 20, 2012 at 10:56 IST

I believe this was uncalled for. We all write almost anything on FB or twitter! When Vadra wrote that "mango" thing, there was a lot of discussion opposition. Now a 21 years old youths of our country are writing something and they get to go to jail for that? Are we becoming China!!
from:  Pragya Jain
Posted on: Nov 20, 2012 at 10:56 IST

A personal opinion suppressed this way is not a way a democratic govt
should follow.
Moreover acts like this are also making us lamented.
from:  Prakash
Posted on: Nov 20, 2012 at 10:52 IST

A reader, Ananda Prakash asks "Do we have freedom of opinion in our
country?" We certainly have the freedom, but we can be punished,
beaten, or killed for it. Even the media is afraid to publish opinions
against political personae because they fear that their offices will
get ransacked and their employees will be the target of violence.

Take this honorable newspaper, The Hindu, which is the only newspaper
in India that is worth reading. Even the Hindu edited and censored a
comment I had sent them yesterday that was critical of the attention
given to Mr. Thackeray. They published the parts that are not likely
to create offense. And I was polite and civilized. If The Hindu cannot
stand up and publish the opinion of reasonable and civilized citizens,
then who will?
from:  Ratnam
Posted on: Nov 20, 2012 at 10:46 IST

Whatever the two girls posted and liked on facebook has been clearly
vindicated by the actions taken by the Shiv sena.
from:  bharath
Posted on: Nov 20, 2012 at 10:44 IST

The best part was how quiet the media went on this issue? Perhaps they are also afraid of Shiv Sena. I remember all the hulla-balloo that went up in media when somebody was arrested by WB police for posting about Ms. Mamta Banerjee. This time every body played safe.
from:  Virendra
Posted on: Nov 20, 2012 at 10:43 IST

Shame on Mumbai police...shame on all news channels (and others) for live telecasting for the whole day or beyond...shame on all news papers for having the headline on the front page for his death...I support the courageous women...in fact I thought the same thing when I saw it live on the news channels...
from:  Periasamy
Posted on: Nov 20, 2012 at 10:36 IST

Whoever ransacked the property of her uncle by seeing her post is the
coward. Why not Mumbai police arrest all the people who is spreading
hate messages in the social media sites? Licensed to arrest only weaker
section?
from:  Hasbath
Posted on: Nov 20, 2012 at 10:33 IST

Incidents like this reveal the insecurities of the state. A totalitarian form of Government that would like to control every aspect of human existence. Even right to express one's opinion.
from:  vinod bhatia
Posted on: Nov 20, 2012 at 10:31 IST

Information Technology Act is a draconian law and this momentum should
be directed against it. It suppresses the right to dissent and free
speech and has caused many people to go to jail for petty reasons like
this.
from:  Manjunath
Posted on: Nov 20, 2012 at 10:30 IST

So am I allowed to comment here or are they going to arrest me as well?
from:  Vivek
Posted on: Nov 20, 2012 at 10:29 IST

If we love someone dearer to our hearts ,it is not must that everyone
should do so.It simply questions our freedom rights and mocks at our
democracy.
from:  Nila
Posted on: Nov 20, 2012 at 10:27 IST

This is preposterous. Her points were valid.
No disrespect to the Late Thackeray, but atleast one should not shut
down a city, which Thackeray had done so much work for. Greatest respect
to the dead is paid when you fulfill his dream, and not by shutting down
the economic capital.

RIP.
from:  Sabharwal
Posted on: Nov 20, 2012 at 10:26 IST

That Mumbai shut down due to fear and not respect seems to be an opinion with merit. Ironically, the goons' as well as the government/police's action seem to corroborate that opinion.
from:  K Palaka
Posted on: Nov 20, 2012 at 10:24 IST

This is so true, and this bundh happens only if a politician dies. because least level party members wants to show there power to the leads in the party. the freedom of speech in our country is long gone even press dont have it anymore are else this one would have came in press before a brave girl says it.
from:  KARTHIK
Posted on: Nov 20, 2012 at 10:23 IST

Really absurd and unbelievable.
A small thing like a facebook comment can cause an uproar amongst
people.
People are entitled to their own opinions in our country. We are a
democracy, let's not forget that.
Forcing your opinion down someone's throat is not the way to show your
support for someone or some cause.
from:  Smaran
Posted on: Nov 20, 2012 at 10:23 IST

I fully support what the girl said, it was a real nightmare for people in a curfew like situation, during the bandh. Justice Katju published an article yesterday in The Hindu and his Blog. Why Shiv Sena is not reacting on that, The reason is that It's absolutely true, they can't defend themselves with words and logic. Now what was in their might, they did. This will never make Shivsena a political organisation which is respected, but will definitely progress towards fascism.
from:  Mohit Joshi
Posted on: Nov 20, 2012 at 10:20 IST

We need to start a struggle to free the country from 'dons'.
from:  JAYARAMAN V S
Posted on: Nov 20, 2012 at 10:19 IST

Vulnerability of democracy peaks in wrath against criticism. A public
personality engages with an idea or philosophy so the convictions and
challenges against it have to be welcomed. Weak minded followers were
unable to digest and arm twisted the communal harmony to seek
meaningless outcomes.
from:  Karthikeyan
Posted on: Nov 20, 2012 at 10:14 IST

This is true of any bandh, in India. Cities shut down out of fear of retaliation not out of support for a cause.
from:  Rajagopal
Posted on: Nov 20, 2012 at 10:09 IST

Exactly!! The heading says it all! 'God father' syndrome!!
from:  Saratchandran
Posted on: Nov 20, 2012 at 10:07 IST


I can sense the fear here also, such a controversial and radical issue
and only one fellow has commented. We have come to an edge.
from:  dalchand agrawal
Posted on: Nov 20, 2012 at 10:00 IST

Are we living in a dystopian society?
from:  Bhaghyesh
Posted on: Nov 20, 2012 at 10:00 IST

This is a shame. There are a few things left in India that we can be proud of. The democratic value is at the center of it. I am ashamed that these values are being abused so publicly by the very same people who are supposed to protect it. I am surprised there has been no reaction from the government. This is the testing time and the government cannot afford to stay quiet on this matter. Is this a reflection of eroding tolerance among the Indian masses? - cartoonists being arrensted, speaking against a CM will land you in jail or be branded a maoist and now this. The trend is alarming and it will lead to the country's demise. The democracy has been holding this country together for years despite the corruption, communal differences and economic divide. We better not play with it.
from:  A Raj
Posted on: Nov 20, 2012 at 09:58 IST

Who will decide that what is our freedom of speech ? Is it political parties or Courts ?
from:  Harish Singh
Posted on: Nov 20, 2012 at 09:56 IST

I thought Freedom of speech is a constitutional right in India. I just learnt that it is no more.. We can say.. it WAS a constitutional right in India. So sad to say though. oops!! I hope.. I dont get arrested.. :)
from:  Satya
Posted on: Nov 20, 2012 at 09:48 IST

No, ordinary people don't have the freedom to express. Only the people
like Thackerays that can say anything they like and still get away with
it. The police did not have the guts to arrest him when he made
statements like that so many times and thus creating enmity and hatred
among people.
from:  Jayaprakash A
Posted on: Nov 20, 2012 at 09:43 IST

In a landmark judgment of the case Maneka Gandhi v. Union of India, the Supreme Court held that the freedom of speech and expression has no geographical limitation and it carries with it the right of a citizen to gather information and to exchange thought with others not only in India but abroad also.

Indian Constitution talks about freedom of speech under Article 19.
Is it true?
from:  Rajkumar Gandhi K V
Posted on: Nov 20, 2012 at 09:42 IST

The agony of every loss/protest can be expressed peacefully also without
affecting the normal life of others (avoiding bandh) and move towards
improving the nations cause. it is the cause which is important not the
path so a thoughtful approach towards this should be thought of by all.
from:  lakshmi
Posted on: Nov 20, 2012 at 09:36 IST

Right to Freedom of Speech and Expression is above all politician bureaucrats and social workers and it should be protected first The post is absolutely right Respect is earned givenand definitely not forced This arrest clearly shows that incapability of Maharashtra police to handle shiv sena
from:  sumit singh
Posted on: Nov 20, 2012 at 09:33 IST

Proscribing such innocuous comments flies in the face of liberty of
speech guaranteed by our Constitution.Police should have acted with some
sense of responsibility.
from:  Sunil Kumar
Posted on: Nov 20, 2012 at 09:28 IST

The accused in this case should be the police of Palghar; they must be arrested,
prosecuted and punished for Criminal misuse of power and abuse of state
machinery.
from:  Srihari Thekumparambath
Posted on: Nov 20, 2012 at 09:26 IST


Today's The Hindu deserves an applause as it gave front page coverage to
the issue.
from:  Hari
Posted on: Nov 20, 2012 at 09:17 IST


This shows how Right to freedom of speech is in India ...Even the girl
who liked that post is arrested..!!!??? What a Sincerity..!!:-)
from:  Dinesh
Posted on: Nov 20, 2012 at 09:11 IST



This is quite disturbing in a so called 'vibrant' democracy such as India. People are entitled to their opinions; it may be worthwhile to think who / what incites religious sentiments - is it a lone adult expressing her opinion or organised groups?
from:  Anila
Posted on: Nov 20, 2012 at 09:01 IST

This is not fair, everybody has a right to express their opinion. i feel we all should condemn
such arrest and protect our freedom.
from:  Priyanka
Posted on: Nov 20, 2012 at 08:59 IST

It is time to dismiss the entire high command of the Maharashtra Police for having stooped to this level of sub-servience to a fascist political party in the state. Let us not forget the sheer incompetance and cowardliness shown by this police force in dealing with terrorism and organized crime in Mumbai for the last 40 years. The IPS at the top need to hang their heads in shame at this level of emasculation they have acheived. If the corrupt Police think they can get away with this level of brazen harassment of the people in Mimbai, it is time to dismiss the state government.
from:  Rajasekar Thunghabadra
Posted on: Nov 20, 2012 at 08:52 IST

Atrocious.
from:  Divya Rukmani
Posted on: Nov 20, 2012 at 08:47 IST

Is India a true democratic nation....?
We have equal political right i.e. right to vote, but only possessing
it does not have the real sense of being called as a democratic
nation. Democracy has some core ideal values based upon the social,
economic, and political justice; equality of oppurtunity; freedom of
speech, expression, faith, belief, worship; a sense of being protected
and secured; and all those things which ensures that every individual
will be treated like a human being with some dignity. To achieve these
core ideals of democracy our forefathers had fought a long freedom war
against an authoritative rule. Mahatma Gandhiji's thoughts on non-
violence have been source of inspiration for a number of recognized
leaders of world order like Martin Luther King, Barack Obama, Aung San
Suu Kyi, Dalai Lama, etc. Aung San Suu Kyi, a Nobel Laureate and
democratic leader in Myanmar, sees her freedom as connected to the
freedom of her people. Her book of essays bears the title "Freedom
from Fear". She says "for me real freedom is freedom from fear and
unless you can live free from fear you cannot live a dignified human
life." We must not, her word suggest, be afraid of the opinions of
other people, or the reactions of the members of our community to the
things we want to do, of the ridicule of our peers; or of speaking our
mind. Yet we find that we often exhibit such fear. Aung San Suu Kyi's
fear is a fear that exists in a country which doesn't have democracy,
freedom and justice. But the worst part of the story is that we are
living with such a fear in a country which has democracy, freedom and
justice as her basic and fundamental aspects of constitution.
from:  Piyush Tripathi
Posted on: Nov 20, 2012 at 08:46 IST



we as a nation are going nowhere... pathetic people and pathetic police
action...
from:  nitin joshi
Posted on: Nov 20, 2012 at 08:38 IST

This outrage by the police is against the Indian Constitution and
the Fundamental Right to Free Speech, and they deserve strong
punishment to assert that India is indeed a democracy.
from:  V. Ramaswami
Posted on: Nov 20, 2012 at 08:36 IST

Shameful for a democracy
from:  Ankit
Posted on: Nov 20, 2012 at 08:35 IST


They just showed their opinion & disgust on a subject & you arrested
them on charges of “promoting enmity between classes” and “sending offensive messages through [a] communication service,” after one posted, and the other ‘liked,’ a message on Facebook on Sunday.
What kind of world we live in ?! I fail to understand how politician
think. Both should b freed.
from:  Maria
Posted on: Nov 20, 2012 at 08:26 IST

What's genuinely puzzling in this and other cases of the abuse of the IT act and the IPC is the compliance of the magistrates and judges who allow the victims to be prosecuted. It's well-known that the police across the country are merely instruments in the hands of their masters and have no sense of public obligation. But it's after all the magistrates and judges who accept the ridiculous charges and let the cases go on. Why do they do this? It's high time the Supreme Court laid clear guidelines to lower courts on how to deal with cases like this, and also to impose severe penalties on the police and the state governments for patently wrongful application of the law. Provisions of the IT act must altogether be scrapped, along with the sedition law and Section 505 (2), which vaguely defines the offense.
from:  Bala Raja
Posted on: Nov 20, 2012 at 08:14 IST

These girls have the guts that the so called men don't have - i.e.
voicing their true opinion! Geez...where are we going to end up? Let us
surrender our democracy back to some so-called Imperialist or even some
other nation that it known to operate its democracy in a proven manner.

Shame on all people keeping silent to such grotesque act of Police!
from:  prasanna
Posted on: Nov 20, 2012 at 08:13 IST

its a shame...we say youngsters are the future of this country and then
the police goes on and books them under some false charges...and snatch
their basic rights!
from:  shobhana
Posted on: Nov 20, 2012 at 08:07 IST

Freedom of expression.ha ha ha
When these 2 students posted something, which was not liked by another
section of society, the administration arrested these students in no
time.
But while the goons indulge in forceful moral policing they are still at
large and are are openly causing further mayhem, but the administration
prefers to overlook these incidents.
This sadly refelcts the state of affairs in our country.
from:  zafar abbas
Posted on: Nov 20, 2012 at 08:06 IST

Moral of the story - You express your opinion in a gandhian way, you would be arrested immediately on all possible sections of the law. But if you ransack a hospital or do corruption for many crores or even enagege in communal voilence killing 100s - everyone is afraid of you and don't even dare to charge you.
from:  Surya
Posted on: Nov 20, 2012 at 08:04 IST

Shame on the Indian police for feeding into this mentality and killing freedom of speech in the world's largest democracy!
from:  Bryan
Posted on: Nov 20, 2012 at 08:00 IST

No, we do not seem to have that freedom anymore. Remember most of the netas today were journalists/cartoonists/lawyers too. They might have been jailed earlier if these laws were in force then. We would not be in this situation if that was done.
from:  Satish N
Posted on: Nov 20, 2012 at 07:58 IST

Probably facebook should also introduce DONT LIKE in addition to LIKE,
COMMENT and SHARE....so that every Indian could keep on hitting the DONT
LIKE button, even though he or she LIKES it , for fear of being
imprisoned or harassed. JUSTICE KATJU and the SUPREME COURT should enter
the fray , as FREEDOM OF SPEECH is being violated
from:  gopal
Posted on: Nov 20, 2012 at 07:57 IST

The main question to focus is this. Do people have to observe bandh to protest or admire or condole etc. Nowadays, bandh seems to be a celebration of sorts for a forced holiday, without respect for individual attitudes. Soon it will become bandh for protesting a bandh. I feel bandh is instigated by vested interests -- not fear, not a feeling. Can a small percentage of people hold to ransom a much larger population and prevent them to carry out essential aspects of life. No doubt, this larger segment may feel sympathetic to the cause of the bandh, but they think it is indecent to prevent normal life.
from:  Hari Subramanian
Posted on: Nov 20, 2012 at 07:46 IST

But why was Bal Thackeray given a State funeral? He was indicted by the
SriKrishna Commission set up to investigate Bombay riots of 1992/3.
from:  R.Saroja
Posted on: Nov 19, 2012 at 19:11 IST

Then what's the meaning of our fundamental Right ?? I believe ours is a
democratic country.
from:  Tulasi Ram
Posted on: Nov 19, 2012 at 19:11 IST

40 people vandalised the clinic and police did not put them behind the
jail, and a girl dared to talk sense in social media and she was sent to
jail. What a shame. Don't know till when people without senses will
continue to prevail in my motherland!
from:  Vikram
Posted on: Nov 19, 2012 at 19:10 IST

This is high denial of Personal rights, moreover there is nothing wrong
in the comments.
from:  VRaamsamy
Posted on: Nov 19, 2012 at 19:07 IST

Truly shocking! I have a new found respect for Mr. Katju.
from:  Sandeep Juneja
Posted on: Nov 19, 2012 at 19:00 IST

Police arrested these girls and mentioned the "sections" Did they arrest the people who vandalized her uncle’s orthopedic hospital? This is something wrong....this is not democracy,
from:  Ehsan
Posted on: Nov 19, 2012 at 18:59 IST

I wonder how many people from that mob were arrested for vandalizing a hospital. Freedom of expression, which is a fundamental right and cornerstone of a democratic system is a joke in India now. You can say anything you want and get away with it as long as you have muscle man and even if you make an innocent comment criticizing one of these people with muscle men you are going to get arrested under these colonial laws, your family will be harassed by the gundas. There is a poem by Martin Niemoller which aptly applied to the situation
First they came for the Socialists, and I did not speak out--
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out--
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out--
Because I was not a Jew.

Then they came for me--and there was no one left to speak for me.
from:  Chinmay
Posted on: Nov 19, 2012 at 18:59 IST

This is atrocious! Looks like twitter, facebook etc. is only for the
muscular...
from:  Prakash
Posted on: Nov 19, 2012 at 18:58 IST

Careful! Or you'll have Shiv Sainiks destroying your house next. It's
impressive to see that those vandalizing Shiv Sainiks are roaming freely
while these girls are being arrested.
from:  Swapnil
Posted on: Nov 19, 2012 at 18:49 IST

What the hell is going on here? Two girls arrested for marely presenting their opinion while the criminals and currupt politicians commit biggest of crimes under daylight? Shiv Sena has always promoted such level of intolerance. The guy died but the hatred and intolerance he spread would be felt for years to come. I state here now, there should be no bandh for such a divisive man. He did more harm than good to the society. Arrest me now if you can. Why can't we become tolerant to the views of other side. Salman rushdie is not allowed to have a conf.call, then the cartoonist is arrested and then this? where are we leading as a country? Can we come out our identities and start behaving like human beings for whom only the well being is utmost important. When we are born, we are not, rich or poor, hindu or muslim, shiv sainik or congressi: Our identities are influenced by our family and surroundings. Can we be just we and not what we are made by the societiy???
from:  Mahesh
Posted on: Nov 19, 2012 at 18:49 IST

Personaly, I do not see anything in the girls statement, creating or promoting enemity, hatred or ill will between the classes. Infact I believe the girls are right.

Ideology of Shiva Sena is creating enemity between the classes, and their work methodology is Vanadalism. Again we saw how they responded to girl's comments on facebook.
from:  Jamshid Thalassery
Posted on: Nov 19, 2012 at 18:47 IST

This what he & his Sena had been doing in Mumbai for decades.
from:  hardev singh
Posted on: Nov 19, 2012 at 18:45 IST

Very interesting! Democracy at its best.
[505(2) statements creating or promoting enmity, hatred or ill-will between classes] Surprising this did not show up when Mr Raj Thackeray's men were bashing Biharis and other north Indian communities, who left Maharashtra trainfuls.
Does our constitution allow these local political leaders to change / use sections as per their personal wish?
from:  Rohit Dagar
Posted on: Nov 19, 2012 at 18:44 IST

After hearing the news my heart beat increased. Maybe anyone can be the next.
from:  Tuhin
Posted on: Nov 19, 2012 at 18:39 IST

"40 Shiv Sainiks allegedly barged into Ms. Dhada’s uncles’s orthopaedic
hospital at Palghar and vandalised" reminds you of dark days of Nazi
fascism! Shame on Mumbai police servility to Sainiks. Looks as though
the police will carry out with their head Sainiks order with their foot!
from:  N.G. Krishnan
Posted on: Nov 19, 2012 at 18:27 IST


This tells me that India is a democracy ruled by mob.
from:  Vipin
Posted on: Nov 19, 2012 at 18:18 IST

Freedom of Expression gone for a toss again. It is really surprising that the girl got arrested for her comments (which doesn't sound offensive in anyway). Shivsainiks - time to change!!!
from:  Ramesh
Posted on: Nov 19, 2012 at 18:18 IST

This is really ridiculous. It is simply the misuse and abuse of govt.
machinery and law. this is simple case of violation of right of freedom
to express. if the language is not derogatory, then there is no reason
to take such action by police. this act of police and shiv sainiks is
totally condemnable and against our culture and spirit of constitution.
from:  dhiraj kumar garg
Posted on: Nov 19, 2012 at 18:17 IST


I am still unable to fathom how could such a man with such hateful
princilples garner so much support..he was an insult to democracy
from:  Anup Choudhari
Posted on: Nov 19, 2012 at 17:58 IST

Do we have freedom of opinion in our country ?
from:  ANANDA PRAKASH R
Posted on: Nov 19, 2012 at 17:46 IST

November 19, 2012

tax implications for debt fund investors


Differential tax treatments inevitably hurt investors who do not understand them. One area this happens is in the investments made in the debt, or income, schemes of mutual funds. Months ago I wrote an advisory story/article on this issue it in the newspaper I presently work for.

Here is what I wrote:




Extract optimum returns from your debt fund
Tax implications affect net return of debt fund investors. So choose carefully between growth and dividend options.


Having a little or lot of your investments in low-risk fixed income instruments appears to most to be an easy task but it takes a lot of understanding of the complexities of returns in terms of tax liability, timing, interest rate fluctuations and other factors to be able to pull it off in the most prudent way.  Till a few years ago the simplest way to have a low-risk fixed income investment exposure was to put money into bank deposits available in multiple tenures from a few months to a few years.
But in recent years as increasing number of retail investors have got conscious of the option of debt funds offered by the domestic mutual funds such as open-ended funds--liquid, short term income, income and monthly income plans--and close-ended debt funds--fixed maturity plans and interval the need to understand the complexities has become quite essential.
After making the choice of debt funds an investor would face the next daunting task of choosing between  the three options of growth, dividend payout and dividend reinvestment every debt fund offers. A debt fund has a common portfolio for investors in it irrespective of the option they choose. So the gross return on all the three options largely stays the same. But the net return after factoring in tax implications and opportunity cost varies.
You do not pay an tax on the dividends declared by debt funds whether and paid out to you or re-invested in the form of fresh purchases. But since the fund has to pay a dividend distribution tax (DDT)—27.04 per cent if it is a liquid fund and 13.52 per cent if it is a non-liquid debt fund, the fund’s net asset value is less by the DDT.
Growth option, where no dividends are declared and the NAV rises by the accumulated earnings of the debt fund,  works the best if your intended investment period is more than one year as you will then bear only a long-term capital gains tax of 10 per cent without indexation or 20 per cent with indexation which will be lower than the DDT of 13.52 per cent.
Dividend payout in debt funds works best if you intend redeeming your investment in less than a year if dividends are regularly declared and you don’t incur any short-term capital gains. The DDT of 13.52 per cent in non-liquid debt funds works out to be lower than your tax liability if you are in the 20 per cent or 30 per cent tax slab as short-term capital gains are added to your total income.
Dividend re-investments serve no useful purpose for debt fund investors as it requires you to continuously juggle with the time horizon of your initial and subsequent dividend re-investments. Watch out, though, as most debt funds compulsorily re-invest your dividends even if you have selected the dividend payout if the dividend amount is small. Also, many internet-based MF distributors do not keep the dividend pay-out enabled for a vast majority of debt funds.

November 18, 2012

late bal thackeray's deeds were that of a terrorist


Bal Thackeray, who died yesterday (November 17, 2012), committed the worst form of terrorism through his deeds in December 1992 and January 1993 when he influenced his (Shiv Sena) party men to go on a murderous rampage of Muslims and devastation of Muslim livelihoods in Bombay.


I will never forget those unimaginably sad weeks of my life (I was a 23-year old Bombay resident at that time) when I saw in my beloved city wide-spread murderous killings of lay Muslim men, women, children, elderly by Bal Thackeray-led Shiv Sainiks. 

Bal Thackeray indulged in extortion and terrorism. May his departed soul be guided by his spirit guides into atoning for his evil deeds in his next human life.





November 15, 2012

benchmark nifty etf investors suffer post-acquisition by goldman sachs

In the Indian mutual fund industry, till last year, there was one asset management company whom one could count on to come up with useful passively-managed products and serve their existing one well. This was the Benchmark Mutual Fund managed by Benchmark Asset Management Company (BAMC) which kicked off operations in 2002 with India's first ETF on the 50-stock Nifty index.BAMC was committed to offer only passively-managed products such as ETFs and index funds, and nothing else.

Therefore, it came as a shock last year (2011) when it became known the top management and shareholders of BAMC were selling out the fund and schemes to Goldman Sachs.  It became clear to ETF investors that Goldman Sachs will not be interested in doing much justice to the running of ETF schemes and will expend their time and energies in coming out with, and managing, actively-managed schemes. 

This is already seen to be happening. After acquiring Benchmark Mutual Fund in July 2011, Goldman Sachs India Mutual Fund, the new name of the fund, began filing offer documents with the regulator for the launch of actively-managed equity schemes. The first one was launched last month (October 2012).

But what is the most dismaying is that investors in the erstwhile Benchmark Nifty ETF, now known as GS Nifty ETF, are being hit due to the deliberate negligence of Goldman Sachs.  Sadly, the shareholders and management of BAMC betrayed the trust put in it by the investors by selling out to Goldman Sachs and got big cash as a result.

Below is a news analysis I did recently for the newspaper I work on how the performance of GS Nifty ETF has lagged peers since the July 2011 acquisition.

Here is what I wrote:


Goldman Nifty ETF lags peers post-Benchmark acquisition

The re-christened Benchmark Nifty ETF gave 1.2 per cent return against 2.9 per cent of peers


Mutual fund investors run the risk of the performance of their schemes getting adversely affected when the asset management company (AMC) managing their schemes gets taken over by another AMC or see significant stake changes. At times, in real life, this risk does unveil itself, as investors in the first-ever exchange traded fund launched a decade ago have been discovering lately.

When Benchmark Mutual Fund launched its Nifty Exchange Traded Scheme (Nifty ETF) in 2002 it was the first ETF in the country. The mutual fund's investment manager, Benchmark Asset Management Company (BAMC) was taken over by the Goldman Sachs group with effect from July 14, 2011 and was effectively run by Goldman Sachs since then.

For one month BAMC stayed as a distinct company but as a part of the Goldman Sachs group. From August 22, 2011, Goldman Sachs Asset Management (India) formally took over the management of all the schemes managed by BAMC. But post-mid-July, the performance of its most popular scheme, Nifty ETF, has, for the most time in its decade-old history, under-performed the underlying benchmark index as well as its peer schemes.

This was revealed in a FC Research Bureau analysis comparing the performance of GS Nifty ETF before and after the July 2011 acquisition with that of Nifty Total Returns Index (Nifty TRI) and two of its Nifty ETF peer funds--Quantum Index Fund-Nifty ETF and Kotak Nifty ETF.

From the average of its net asset values of July 4 to July 13 last year to the average of its NAVs in the current month of November till the 9th, GS Nifty ETF has given an absolute return of 1.20 per cent, below that of corresponding Nifty TRI's return of 3.14 per cent, Quantum Nifty ETF's 2.95 per cent and Kotak Nifty ETF's 2.85 per cent.

The was not the case in the earlier comparable periods. In the 1-year period upto mid-July last year, GS Nifty ETF's return of 5.91 per cent was in sync with Nifty TRI's 6.16 per cent and a little ahead of Quantum Nifty ETF's 5.63 per cent and Kotak Nifty ETF's 5.82 per cent. The previous 1-year period from July 2009 to July 2010 also saw the same pattern (see table).

    GS Nifty ETF        Quantum                Nifty ETF       Kotak  Nifty ETF   TRI Nifty
Jul '11* to Nov '12** 1.202.95  2.85 3.14
Jul '10 to Jul '11* 5.91 5.63 5.82 6.16
Jul '09 to Jul '10 23.90 23.68           NA 24.77
Figures represent returns based on monthly average NAVs/index values
Nifty TRI: Nifty Total Returns Index
* till 13th
** till 9th
Source: Respective MF websites, NSE. Analysed by FC Research Bureau

Post-expenses, index-linked ETFs are supposed to mirror the returns of the underlying index's total returns values which includes the impact of dividends received from the member-companies of the index. The expense ratios range from 0.2 per cent to 0.5 per cent in the case of Indian mutual fund industry's ETFs.

A month before the Goldman Sachs acquisition of Benchmark MF, Benchmark Nifty ETF had a corpus of Rs 533 crore in June 2011. In September this year, the average corpus of (rechristened) GS Nifty ETF was Rs 563 crore.

Interestingly, in other comparable performance records of Goldman Sachs India MF's ETFs, no under-performance was seen. As per NAV data from Capitaline NAV, GS Bank ETF and Reliance Banking ETF, both linked to CNX Bank index, the absolute return from July 13 last year to November 9 this year was the same -- 4.36 per cent. Another ETF, linked to CNX PSU Banks index, the GS PSU Bank ETF has given a negative return of 15.2 per cent which is better than peer Kotak PSU Bank ETF's negative return of 16.10 per cent.

November 12, 2012

government, constitutional auditor, natural resources & corporate contractor


 In a recent editorial contribution for the newspaper I work for, I touched upon the dynamics of the role of India's Comptroller Auditor General (CAG) in the matter of the government's contracting of natural gas exploration and production to Reliance Industries in the Krishna-Godvari basin in eastern India.         

(the pic on the right has been taken from http://www.hardyoil.com/Assests/nelpiii/KGBAsinMap3.jpg)

Here is what I wrote:



Gas imbroglio

A legally-tenable solution has to be found in the KG basin gas production audit dispute

We are at a juncture in society's evolution that there is a case and a counter-case for everyone. Simultaneously, we are at that juncture in the evolution of commerce and industry where complexities multiply by the day. Given this, it is not surprising to see the conflict in the central government and the Comptroller Auditor General of India over the impending audit of the past couple of years' accounts and records of the Krishna-Godavari basin gas block which, under a government contract, is being operated by Reliance Industries. 

The government, through its petroleum and natural gas ministry, had recently approved last few years' increase in expenditure to step up production of gas from the KG basin block on the condition that CAG will carry out the audit of recent years. Interpretation of the term 'audit' is now what is causing trouble. The company interprets the word to strictly mean only a financialaudit pertaining to the KG basin contract as also covered by the production sharing contract it signed with the government. 

The CAG, on the other hand, says it has the right to sift through any and all records, going beyond the accounts, pertaining to the KG basin activities since the revenues from the KG basis gas accrues to the government's revenue account. If not under this specific audit request the CAG still has the power to comprehensively audit KG basin records when it audits the petroleum ministry. 

The natural gas produced under the joint ventures and the new exploration policy is governed by the respective production sharing contracts (PSCs) between government and private producers, unlike that produced by ONGC and Oil India which can be governed by government's administrative order. RIL is a private producer and so the PSC becomes the driving force as far it is concerned. The government could have chosen any auditor, other than CAG, when it put the condition of audit to the KG basin block production-increase. 

It was not constitutionally bound to ask CAG to do this particular audit. But CAG is not supposed to be an auditor available for hire as per the terms and conditions of the hirer, in this case the government itself.  It is answerable to the Parliament of the country and not to the government or any of its ministries. Only if the PSCs had been through a legislation cleared by the Parliament would CAG have been obliged to carry out a specific audit. But this would again have been under the terms and conditions laid down in the legislation and surely one on the natural gas production would not have been restrictive as they are now. 

Under the Constitution of our country, the CAG is required to submit its audit reports on accounts of the central government to the president who is bound to lay them before each house of the parliament. RIL's contention is under the existing PSC the audit report of the KG basin block, can only go to the petroleum ministry and not to the Parliament directly. The company is not comfortable with an auditor who it perceives is technically not clued in with the many complexities of a project such as the KG basin. 

But CAG too can not be the auditor behind such an audit report if it finds the conditions to be onerous. The company and CAG are both right in their own ways. It is for the petroleum ministry and the government to find the most legally-tenable solution instead of passing the buck to the company or the CAG.

November 06, 2012

rigging elections in US


It has happened in the past at least on both the occasions when Bush Jr won the presidential elections in 2000 and 2004, and it could happen again. I refer to rigging of presidential elections in US.


Indian national elections too are not rigging-free. Last one in 2009 saw all the vulnerabilities one can have in the electronic voting machines and electronic tabulation of votes, and gauging from some results these definitely appear to have been exploited.

Anyways, below is a write-up on the US elections which provides more insight, and a technical one at that as well, on rigging of presidential elections.



http://agonist.org/election-fraud-november-6-watch-for-vote-flipping-and-fixed-exit-polls/#more-96599

Election Fraud, November 6 – Watch for Vote Flipping and Fixed Exit Polls

Bloody Sunday
Michael Collins
(Washington, DC) Our elections are officially privatized.  They are hidden from our view by design.
On November 6, your votes will be cast and tallied on voting machines manufactured and serviced by private companies.  The computerized voting machines run on software that is closely held as a trade secret by these companies.  Our elections officials are barred from examining the most important aspects of the software.  Why?  Because those same officials signed away our right to open access and inspection of the voting systems that tell us who won and who lost each and every election.  (Image: WikiCommons)
This is the most profound election fraud imaginable.  It affects every citizen, all 311 million of us.
Privatization occurred without our knowledge or consent.  Was our vote cast and counted properly?  We have no way of knowing.  Can we observe vote tallying at precincts and central tabulation locations?  Not likely. If you could, what good would it do to watch an encased computer running indecipherable software?  This violates prohibitions against secret vote counting in many state constitutions. Our elected officials could not care less.
But wholesale election fraud began long before voting and tallying machines entered the picture. That will be discussed at the end of the article.
As we approach November 6, it is important to understand two major sources of current election fraud.
The Amazing Anomaly and Vote Flipping for Romney – 102 Electoral Voted at Risk
A hard working team of volunteer researchers and analysts gathered raw data, precinct votes, for the 2012 Republican primaries.  Rigorous statistical analysis showed a specific pattern of suspected vote flipping that lead to highly improbable victories for Romney. This was termed the amazing anomaly by the research team.
Urban Density was factored out of the analysis, yet the anomaly remained. All precinct-level demographics available were tested to see if they could cause such an anomaly to no avail. Again, this amazing anomaly remained in the results.
Vote flipping involves exchanging votes from one candidate to another or several others. It is a clever way to benefit a candidate, victimize his or her opponents, while at the same time keeping the precinct vote totals the same. The researchers discovered that often, election officials count and compare only precinct totals with the Central Tabulator count. This simple, yet highly effective fraud strategy could have been undetected for years. In state after state, allegedly because of vote flipping, Romney showed unexplainable increases from the smallest to largest precincts.  The process was outlined recently in two articles: Rigged Elections for Romney? 10/22/12 and Part II – Rigged elections for Romney? 11/1/12.
The following eight states represent 102 electoral votes.  They all have two things in common.  They are tossup/battleground states and they all showed clear signs vote flipping during the Republican primaries, always in Romney’s favor.  Romney won six of the states (seven if you include his Iowa win, which was reversed).  These states will deploy in the Nov.6 general election the same voting machines, central tabulators, and election officials and their partners, staff from the private voting machine companies.
Here is the pattern found in the states above and others.  The pattern was always in Romney’s favor.  How likely is that?The graph of the Ohio primary below shows Romney’s increases from smallest to largeset precincts.  The probability of that pattern is an amazing anomaly since it is so improbable, statistical packages cannot estimate such a small probability; they round it down to ZERO. In other words impossible.  As you can see, Romney’s vote accumulation accelerates while Rick Santorum’s and Ron Paul’s decline.  At the end of the day, typical of Ohio’s close elections, Romney’s gains, the green line, pass over Santorum’s totals for a 12,000 vote victory.  Had Romney failed to gain 5.42% of the total vote through suspected vote flipping, he would have lost the Ohio primary. (See chart for details of election shift from vote flipping.)

See Graph of Ohio primary anomalies
Graph from Francois et al. research team.
Download of Excel for Ohio statewide precinct analysis
The graphs and impact of suspected vote flipping in Wisconsin’s 2012 primary are even more dramatic as shown here.  Romney would have lost Wisconsin, as well, were it not for the unexpected, highly improbable phenomenon reflecting suspected vote flipping. Certainly, after losing these two key states, a brokered convention would have ensued.
Romney’s vote total always expanded due to the suspected vote flipping pattern.  The other candidates lost votes in almost every case.

See graph of how Romney benefited from vote flipping

The research team shared its methods and findings with over 150 academics with specialties in election integrity, elections officials, and the general public.  The first two groups provided encouraging responses, but were unable or too busy to evaluate the compelling evidence of election fraud or to consider the implications.  There have been over 100 inquiries by motivated members of the pubic, however.  So the project continues.  It is clear that the people have to protect their own elections.
Watch the Post-Election Polls and Analysis
Rich Charnin has been studying and writing about election for early ten years.  He was one of the first researchers to discover the inconsistencies in the media consortium’s exit polling and the first researcher to look beneath the surface of the 2004 election. Charnin predicted the exact electoral count of the 2008 election and updates his blog daily.
His latest book, Matrix of Deceit: Forcing Pre-Election and Exit Polls to Match Fraudulent Vote Counts, shows how the media consortium uses their exit polls to ratify questionable elections.  The official exit polls released by the networks and major news outlets are adjusted before release to match the official election results.  Charnin was the first to point out that that nearly half the official media consortium’s  state presidential exit polls exceeded the margin of error in favor of Republicans and only three did so in favor of the Democratic presidential candidate.  The probability of that happening is one of those unfathomable improbabilities, one in several trillion.  Where are the experts, academics, and elections officials who prop-up an indefensible election process?  What do they have to say in their defense?  Nothing.
Election Fraud Didn’t Start Yesterday
Black citizens in the former Confederate states were the first targets of wholesale election fraud.
During the Reconstruction Era following the Civil War, black citizens were able to vote.  The Union Army troops stationed in the former Confederate states protected that right.  Black participation in elections was as high as 80% in some areas.  When Reconstruction ended as a result of the Compromise of 1877, Southern blacks lost everything, including their right to vote.  This lasted for nearly a century until the passage of the Voting Rights Act of 1965.  Between 1890 and 1960, each presidential election had at least five million fewer votes due to the loss of voting rights by black citizens in the South.  Imagine the change in elections without this theft of voting rights?

Stealing the vote from minorities was deliberate post-Reconstruction strategy developed by none other than the Ku Klux Klan and the Redeemers movement.  Programs like photograph identification found in key states are a descendant from the original efforts to disenfranchise Southern blacks. Laws that strip the vote from ex-felons also trace back to these racist efforts.  Nearly six million former felons are denied the right to vote.
Why is it so important to lock people out of the voting booth?
Why is it so important to keep private company voting systems that consistently produce odd and unexplainable results?
Power and control are the central motivations.  If your political program is to keep the majority down, you favor election fraud as an exquisite tool.  Treat the people like chumps by creating a façade of democracy and belittle anyone who questions the system by calling them conspiracy theorists.  Most importantly, never, ever admit that there might be something very wrong.
The manipulation of “official” exit polls or the complete cancellation of such polls in 19 states this year, teamed up with suspected vote flipping (in the most blatant way imaginable) represent an improvement of sorts.  Instead of targeting the minorities and poor, these programs are truly egalitarian. They target everyone.

This article may be reproduced with attribution of authorship and a link to this article.
The Money Party
Republican Primary Election Results Amazing Statistical Anomalies_V2.1
2008 – 2012_Elections Results Anomalies and Analysis V1.6
Rigged Elections for Romney 10/22/12
Part II – Rigged elections for Romney? 11/1/12 .
Polite Fascism Contracts the Right to Vote, May 13, 2008



October 31, 2012

bravo, rbi


The central bank and banking regulator of India, Reserve Bank of India, came out with its FY 2012-13 (April 2012 to March 2013) quarter review of monetary policy.I contributed an editorial on the RBI review for the newspaper I work for.

Here is what I wrote:

Bravo, RBI

By maintaining status quo on policy rates RBI has rightly looked at long-term benefits for the economy

In the prevailing atmosphere over the last many months the government, mostly through its finance ministry, has been able to successfully bulldoze its way in several areas of the Indian economy and financial system in order to prove a point or two to its detractors in the domestic industry and vested international circles that there is no economic policy paralysis in the country. From speeding up policy initiatives such as foreign direct investment to prodding financial sector regulators such as Securities and Exchange Board of India and Insurance Regulatory Development Authority to accede to demands made by the mutual fund industry and the insurance industry, the government has been able to get what it wanted. 

What stands out, and we are glad it does so, is that enormous pressure being put on the Reserve Bank of India by the finance ministry in recent weeks to cut policy rates did not bear fruit on Tuesday when RBI announced its FY13 second quarter review of monetary policy. It maintained status quo on the repo rate retaining it at 8 per cent level but cut cash reserve ratio by 25 basis points from 4.50 per cent to 4.25 per cent. 

The RBI governor, D Subbarao, while appreciating the downside risks to domestic growth from further deterioration in global macroecnomic conditions, was emphatic that the monetary policy had to focus on doing its bit to reign in the un-relenting high inflation levels which RBI has no doubt is not conducive for investment climate and consumer confidence without which no high growth can be had in the medium-term.

Despite the fact the CRR cut will enhance liquidity in the banking system by upto Rs 17,500 crore and the CRR has been bought down sharply by RBI from the 6 per cent level of last year, the finance minister expressed his disappointment at the lack of a repo rate cut. Such un-fettered expectations of the government from the banking regulator does not augur well for the independence. It is understandable for the industry associations to demand the lowest interest rates on the bank borrowings by their member companies but the same demand made subtly but surely by the government does not jell.
 
The government has itself done hardly much on the real macro-economic problems of high fiscal deficit and high current account deficit. Raising diesel prices by a meagre Rs 5 and putting a cap on subsidised domestic cooking gas cylinders will hardly make a dent in the rising fiscal deficit. These measures too came belatedly after all earlier political compulsions arising from state elections and presidential elections had expired. 

A fiscal roadmap laid out by the finance minister on Monday is welcome but without detailed plan of action on individual subsidy items it is only a promise and meaningless at that since the approaching 2014 general elections will soon give re-birth to political compulsions. Moreover, an actual implementation of the fiscal measures will translate into short-term pain of higher inflation as prices will be tuned to market forces. 

The RBI has, therefore, done right by not cutting the repo rates at this juncture. Capital investment by corporate borrowers will surely if rates are cut and lead to better economic growth but it will, if inflation does not subside, diminish the inflation-adjusted real rate of return for savers. 

India has perhaps the highest number of savers in the world and this fact should not be under-appreciated. It is not wise to assume that the long-term worst-case scenario of severe fallout from a very high fiscal deficit can be reasonably averted if economic recovery happens in the short-term by through low lending rates

October 29, 2012

mukesh ambani's reliance's unhealthy influence in cabinet reshuffle seen...


I share below a message received in my mailbox from a coalition of civil society groups on the unhealthy influence of Mukesh Ambani's Reliance Industries (RIL) in the latest round of cabinet reshuffle in the central government of India.




From: NAPM India
Date: 28 October 2012 17:37
Subject: Press Release 28th October, NAPM condemns UPA reeling under Reliance Pressure, Challenges transfer and pricing of Natural Resources against Nation’s Interest
To: napm-india , napmconveners

 National Alliance of People’s Movements (NAPM)
National Office: A Wing First Floor, Haji Habib Building, Naigaon Cross Road,
Dadar (E), Mumbai – 400 014 Phone - 9969363065;
Delhi Office: 6/6 jangpura B, New Delhi – 110 014. Phone: 9818905316
E-mail: napmindia@napm-india.org | Web: www.napm-india.org

Press Release                                                                         28th October 2012, Hyderabad
 
NAPM condemns UPA reeling under Reliance Pressure

Challenges transfer and pricing of Natural Resources against Nation’s Interest

No Privatization of Minerals and No forcible Acquisition for Private Projects

The news that the Petroleum minister Jaipal Reddy is again to be replaced by someone else, repeating the incidence that took place few years ago when Mani Shankar aiyar was replaced by Murli Deora, Ambani’s childhood friend. The very fact that Jaipal Reddy was the one who questioned the irrational demand by Mukesh Ambani’s Reliance Industries Limited (RIL) on escalating the prices of natural gas ,irrespective of the decision and agreement by the union government and RIL on the price to be steady till 2014,  this is one more example, just one of many related to RIL, one of the largest corporates in the country, pulling strings to change the player in the political domain that challenges its activities ,especially huge or even vulgar profit making.

NAPM condemns this, as an evidence of politician-corporate nexus and joint crime against people, who are left deprived when not the State exchequer but the corporates’ accounts are filled and swelling. It is Shocking and disgusting that even when the congress and NCP leaders are challenged at the center and in states, for their involvement in illegal allocation and transfer of land and other resources, at the cost of the public interest; they still have guts to take such an action mainly to give the Ambani’s a clean field. A stratergy to counter this will be worked out in its upcoming National Convention (9th biennial), from 17th to 19th November, at village Kiraloor, 15 Kms from Thrissur, Kerala.

While the loss that would occur if the price hike was accepted is quoted to be $ 6.3 billion, with the undue spread and spell of the RIL across the country and the sectors ranging from Oil & Gas to Infrastructure, telecommunications, theatres, retail, health, education.. right up to Satyamev Jayate, there is no doubt that it may go much beyond even the DLF’s swell, already exposed. It is the wicked game of acquisition of lands, with minerals attached to land, allocation of deep sea blocks, or transfer of the richest of our Nation’s Natural Resources to these private players; that is the worst and the highest level of misappropriation by the present rulers.

The millionaires such as Ambanis have been putting all undue pressures either through PMO, Minister or even through media, seeking concessions; while farmers without subsidy are compelled to commit suicides. It is high time that country demands total nationalization of our mineral resources, the only wealth that is luxuriously expended without any concern, neither for the State’s earning, nor for the environmental impacts and loss of livelihoods to the local populations of farmers and fish workers.

The Krishna Godavari basin issue was distortedly and deliberately presented as if the RIL were to limit its extraction of Natural gas worth approx $ 3 billion dollars, very recently. The fact is that on one hand this has been the tactic to get higher and higher price for their “Natural Product”, while on other hand it is the high incidence of subsidence (sinking of land) in the KG basin that should have compelled them to do so. Resulting in the sea ingress and destruction of paddy lands, as also threatening the habitats and livelihood of millions of people in the Basin, such an ecological impact should have been monitored by the Ministry of Environment and Forest. MOEF, just as other ministries have also been relying upon not laws or policies, nor public hearings but the RIL to plan its targets and profits, violating the laws.

Other examples of this include the power projects granted to Ambani, one in the name of Common wealth games and others without checking the economic feasibility and environmental sustainability, in fact the Reliance work in a threatened eco system of KG basin must come to a halt and this giant monstrous corporate must be prevented from any further investment and favours to facilitation for adding to its unconstitutional wealth, that is costing crores of toiling citizens in the country, destitution, malnourishment, unemployment to homelessness and hunger.

In this regard the Supreme Court can if it wishes to take a suo moto cognizance of the CAG reports to media reports, even in the frame work of its own judgment on 2G spectrum and beyond. If it does not, the People’s Movements that are fighting for no forcible acquisition of natural resources by the State for the private and PPP projects, simultaneously questioning pushing of plans and projects that transfer the resources from people to profiteers; will have to raise voice against “Unreliable  Reliance”.

The new Bill soon to be put up before the parliament is another attempt to continue the forcible acquisition for the private corporates and builders; bypassing the unanimous report by the all party parliamentary Standing Committee on Rural Development. This needs to be questioned and plans of, not only Ambanis but of Jindals, Tatas, Mittals, Adanis, Hiranandani to DLFs all are to be curtailed.

In Place of a weak Land Acquisition and Rehabilitation Bill; National Alliance of People’s Movements demands a Democratic Development Planning Act following the constitutional frame work of local self governance.


Medha Patkar              B.Ramakrishnam Raju          Saraswati Kavula         Shashank Rajwadi

For Details contact Madhuresh - 09818905316
===============================================
National Alliance of People’s Movements
National Office: Room No. 29-30, 1st floor, ‘A’ Wing, Haji Habib Bldg, Naigaon Cross Road, Dadar (E), Mumbai - 400 014;
Ph: 022-24150529

6/6, Jangpura B, Mathura Road, New Delhi 110014
Phone : 011 26241167 / 24354737 Mobile : 09818905316
Web : www.napm-india.org
Facebook : www.facebook.com/NAPMindia
Twitter : @napmindia

October 28, 2012

unwise safety net for ips

A month ago, a proposed safety net for IPOs was in the news. 

I wrote about it then in an editorial for the newspaper I work for. I share it below.


A net full of holes
The proposed safety net framework for IPOs is not a good idea

There is no dearth of props in the financial system and more so in the current economic situation fuelled by the government's pursuit of high growth, aggressively cheerlead by financial market players. Yet another one is being sought to be given to them. This time, the capital market regulator, Securities and Exchange Board, has moved ahead in its earlier consideration of a mandatory safety net mechanism for initial public offers in the capital market. 

This new measure aims to protect retail investors from a large dip in the price of an IPO in the first three months after its listing. Not only is the idea of a price protection regressive in modern financial markets as it distorts the natural price discovery process in the market, the convoluted nature of Sebi's proposed safety net mechanism will make the distortions only more worse.

In the past couple of months, the primary market advisory committee followed by the Sebi board have given their approval for the safety net measure and after formalising its broad framework Sebi, late last week, made public a discussion paper on it  on their website inviting comments from investors and other parties in the capital market before October 31. The discussion paper is just three and a half pages long and while length need not be an issue, for a measure which will be the first of its kind for primary market issues in the last 20 years. 

Earlier, before the 1991-92 financial market reforms abolished the Controller of Capital Issues, the central government had administrative control over price and premium of shares in IPOs. It was direct and full price management then and now, under the proposed new safety net measure, it will be indirect and partial. If, and only if, a couple of conditions are met will small retail investors be eligible for the safety net. In all of the three months immediately after the listing of IPO-issuing company's shares, the volume-weighted price has to be more than 20 per cent lower than the issue price and the gap between this fall in the company's price and that in the fall of either of the broad market indices, S&P CNX 500 and BSE 500, is also more than 20 percentage points. 

Effectively, it means the fall in the post-listing price fall should be at least 20 per cent and 20 percentage points over and above the general fall in the market. Once this  happens, then as per the other complex conditions set out by Sebi's proposed safety net framework, the actual cost for the promoters will range from just 1 to 7 per cent of the issue size. To make matters worse, as per yet more conditions, eligible retail investors could see only one-seventh of their allotted shares receive the benefit of price protection.

The convulated conditions will ensure that the final objective of restoring the diminishing confidence of primary market investors on account of fall in post-listing prices of IPOs is never met. Sebi and the finance ministry who is subtly applying pressure on Sebi to do this would do a better job of protecting investors' interests if they empower the retail investors with the discerning ability to choose the right IPO for investments. IPOs thrive only when secondary market is in a bull run and their pricing is inflated since most secondary market share prices are also inflated. 

Hefty commissions paid to lead managers and distributors during IPOs are the root cause of badly timed, aggressive mis-selling of IPOs at inflated levels. Coming down hard on these commission levels would automatically lead to retail investors being left alone to choose the right IPO.