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		<title>Swan Song of the Fab Four</title>
		<link>http://kishorekumar62.wordpress.com/2012/01/27/swan-song-of-the-fab-four/</link>
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		<pubDate>Fri, 27 Jan 2012 14:28:36 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
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		<description><![CDATA[At the end of the disastrous tour of Australia, it is heartening to note that three of the Fab Four have shown remarkable improvement in consistency. Statistics offers a wonderful tool for measuring relative consistency of batsmen&#8217;s performances &#8211; the &#8230; <a href="http://kishorekumar62.wordpress.com/2012/01/27/swan-song-of-the-fab-four/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3497&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>At the end of the disastrous tour of Australia, it is heartening to note that three of the Fab Four have shown remarkable improvement in consistency.</p>
<p>Statistics offers a wonderful tool for measuring relative consistency of batsmen&#8217;s performances &#8211; the Standard Deviation of their scores. Standard Deviation is a measure of  the variance of their scores around their average. The lower the standard Deviation the less the variance and hence the higher the consistency.</p>
<p>Consider the following chart which plots the Fab Four&#8217;s Standard Deviation over their entire career vs. their Standard Deviation over the eight matches they played in the recent England and Australia away tours (Sehwag sat out two of them in England because he was too tired):</p>
<p><a href="http://kishorekumar62.files.wordpress.com/2012/01/sd2.jpg"><img class="aligncenter size-full wp-image-3513" title="SD" src="http://kishorekumar62.files.wordpress.com/2012/01/sd2.jpg?w=500" alt=""   /></a><br />
Sehwag displayed the most dramatic improvement in consistency with his Standard Deviation dropping from from 60 to a jaw dropping 23! He caught up with Tendulkar and the ever dependable Laxman in terms of consistency! Strangely, the ever studious Dravid shows precious little improvement in consistency. Further investigation revealed that the three centuries he scored in England marred his consistency figures badly. &#8220;If only I had not scored those centuries&#8221; rued Dravid, &#8220;not only my consistency figures would have improved, I would also have got lots more time for shopping&#8221;.</p>
<p>&#8220;We are very happy to see  that such outstanding consistency from our seniors. The improvement of Standard Deviation from 40s and 50s down to 20s is simply fantastic Di. They have fully justified our faith in them Di. Except for Dravid. We surely have to drop him to make way for a deserving youngster Di&#8221; said the Chairman of the Selection Committee Krishnamachari Srikant from Chennai.</p>
<p>When queried about the other statistical measure that is often used to measure a batsman&#8217;s performance, Srikant enigmatically replied &#8216;Baalu kalaru redu redu; redu kalaru blacku&#8221;.</p>
<p><a href="http://kishorekumar62.files.wordpress.com/2012/01/average3.jpg"><img class="aligncenter size-full wp-image-3514" title="Average" src="http://kishorekumar62.files.wordpress.com/2012/01/average3.jpg?w=500" alt=""   /></a></p>
<p>Ravi Shastri, on the other hand, had the following to say &#8220;It is not correct to measure great batsmen like Tendulkar, Dravid, Sehwag and Laxman on the basis of a single statistics such as batting average. One has to take a wholistic view which is provided by their superior Standard Deviation. Only when the younger players display such consistency can the seniors&#8217; position in the team be challenged&#8221;.</p>
<p>Sunil Gavaskat reportedly fell off his chair when he saw the consistency  figures  until he saw the averages chart. He then remarked &#8220;Hell, I have to stop talking about the Glorious Uncertainties of Cricket from now onwards&#8221;.</p>
<p>To which Srikanth replied &#8220;Dingu Dongu Dongu Dingu; Dongu Dingu Bongu&#8221;. At which point Ganguly slapped him.</p>
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		<title>Did the CAG overstep its mandate in its 2G spectrum allocation report?</title>
		<link>http://kishorekumar62.wordpress.com/2011/11/15/did-the-cag-overstep-its-mandate-in-its-2g-spectrum-allocation-report/</link>
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		<pubDate>Tue, 15 Nov 2011 13:54:52 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
				<category><![CDATA[2G Scam]]></category>
		<category><![CDATA[Analysis]]></category>

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		<description><![CDATA[With the CAG Mr. Vinod Rai going before the JPC today, it is interesting to examine if the 2G report produced by the CAG is indeed within the CAG&#8217;s mandate or did it exceed the CAG&#8217;s mandate. The CAG&#8217;s own &#8230; <a href="http://kishorekumar62.wordpress.com/2011/11/15/did-the-cag-overstep-its-mandate-in-its-2g-spectrum-allocation-report/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3478&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>With the CAG Mr. Vinod Rai going before the JPC today, it is interesting to examine if the 2G report produced by the CAG is indeed within the CAG&#8217;s mandate or did it exceed the CAG&#8217;s mandate.</p>
<p>The <a href="http://saiindia.gov.in/english/home/Our_Process/Audit_Methology/Guidelines_Notes/Per_Au_Guidelines.pdf">CAG&#8217;s own guidelines</a> define &#8220;performance audit&#8221; as follows:</p>
<blockquote><p>Performance audit is concerned with the audit of economy, efficiency and effectiveness and embraces:<br />
(a) audit of the <strong>economy</strong> of administrative activities in accordance with sound administrative principles and practices and management policies;<br />
(b) audit of the <strong>efficiency</strong> of utilisation of human, financial and other resources, including examination of information systems, performance measures and monitoring arrangements and procedures followed by audited entities for remedying identified deficiencies; and<br />
(c) audit of the <strong>effectiveness</strong> of performance in relation to the achievement of the objectives of the audited entity and audit of the actual impact of activities compared with the intended impact.</p></blockquote>
<p>Note that none of the Three &#8220;E&#8221;s mentioned above relate to the revenue of a department / program. All three relate to how a department / program is administered and how its resources (human, financial and other resources) are utilized. The 2G report had an entire section devoted to calculation of presumptive loss due to not auctioning spectrum, i.e. it focused on revenue generation of the telecom department. Hence, that section is clearly beyond the mandate as defined above.</p>
<p>The CAG guidelines further defines each of the three &#8220;E&#8221;s as follows:</p>
<p><span id="more-3478"></span></p>
<p><strong>Economy</strong></p>
<blockquote><p>1.11 Economy is minimising the cost of resources used for an activity, having regard to the appropriate quality. Economy issues focus on the cost of the inputs and processes. Economy occurs where equal-quality resources are acquired at lower prices i.e., spending less&#8230;</p>
<p>1.12 &#8230;The question to be asked by a performance auditor is, do the means chosen represent the most or at least a reasonable economical use of public funds?</p></blockquote>
<p>Clearly this has nothing to do with auditing the revenue (or loss of revenue) of a department.</p>
<p><strong>Efficiency</strong></p>
<blockquote><p>1.13 Efficiency is the relationship between the output, in terms of goods, services or other results and the resources used to produce them. Efficiency exists where the use of financial, human, physical and information resources is such that output is maximised for any given set of resource inputs, or input is minimised for any given quantity and quality of output, i.e., spending well.</p></blockquote>
<blockquote><p>1.14 The main question related to efficiency is whether the resources have been put to optimal or satisfactory use or whether the same or similar results in terms of quality and turn-around time could have been achieved with fewer resources. The question refers to the relationship between the quality and quantity of goods and services yielded and the cost of resources used to produce them, in order to achieve the results.</p></blockquote>
<p>This definition of efficiency uses the word &#8220;resources&#8221;. And the CAG considers spectrum as one of the &#8220;resources&#8221; available to the DoT. Fair enough.</p>
<p>This definition of efficiency says that &#8220;output should be maximised for any given set of resource inputs&#8221;. The CAG contends that for a given set of spectrum, revenue to exchequer was not maximized (hence &#8220;loss to exchequer&#8221;). This implies that the &#8220;output&#8221; to be maximised is revenue. In my opinion, this is a specious argument. The <a href="http://kishorekumar62.wordpress.com/2011/04/09/the-2g-scam-loss-to-exchqeuer/">output to be maximized was tele-density</a> (as per the 10th Five Year Plan recommendations). By keeping spectrum price low, the DoT was aiming to maximize tele-density. This is the crux of the issue. The CAG got this wrong, and has pretty much refused to listen to the DoT viewpoint and gone to town with a &#8220;loss to exchequer&#8221; figure of Rs. 1.76 Lakh Crores.</p>
<p><strong>Effectivness</strong></p>
<blockquote><p>1.17 Effectiveness is the extent to which objectives are achieved and the relationship between the intended impact and the actual impact of an activity. Effectiveness addresses the issue of whether the programme/activity has achieved its objectives i.e., spending wisely&#8230;</p>
<p>1.18 Effectiveness is essentially a goal-attainment concept&#8230;.Are the objectives of the policy being met by the means employed, outputs provided and impacts observed? Are the means employed and the results achieved consistent with the objectives of the policy and – perhaps the most difficult – are the impacts really the results of the policy rather than other circumstances?</p></blockquote>
<p>The CAG has completely ignored this aspect of the audit. If they had paid attention to this aspect, they would have had to dig deep into questions such as &#8220;Having give spectrum cheap, did tele-density indeed increase? Have the disadvantaged sections of the population indeed benefited by this increased tele-density?&#8221; etc. Since many poor people do carry mobile phones in India, and presumably derived some benefits from that, some of the answers to these questions would have been in the affirmative, and the CAG report could have been much more balanced than it turned out to be. As it stands, since the CAG ignored this effectiveness aspect, the CAG report has simply become a government bashing one.</p>
<p>The story does not stop here. The CAG guidelines have some specific observations relating to &#8220;policy&#8221;:</p>
<blockquote><p>1.23 Performance auditors may find answers to the following two basic questions:</p>
<ul>
<li>Are things being done in the right way?</li>
<li>Are the right things being done?</li>
</ul>
<p>1.24 The first question means, broadly speaking,whether policy decisions are being<br />
carried out properly&#8230;.</p>
<p>1.25 The scope for analysis becomes considerably greater by posing the second question, i.e., whether the right things are being done&#8230;.</p>
<p>1.26 However, in the effort to find answer to the second question, <strong>adequate caution should be exercised not to go beyond the mandate by trespassing the borderline to the political territory (policy)</strong>. In short, while the correctness of the information or inputs that were considered while framing the policy and sufficiency of the programmes and resources to fulfil the policy objectives may be assessed and reported, the policy per se is not to be questioned.</p></blockquote>
<p>So, did the CAG question the policy per se when it pointed out that there was &#8220;loss to exchequer&#8221; (I prefer the term &#8220;revenue forgone&#8221; as being more appropriate) as a result of the policy decision to award spectrum, without auction, at 2001 prices? In my opinion, the answer is &#8220;yes&#8221;. When the CAG condemns a natural consequence of a policy decision (if you auction certainly you are likely to get more money; if you do not auction, a natural consequence is that you forgo that extra money), it is in fact condemning the policy itself. And in the process, it oversteps its mandate.</p>
<p>These are fairly technical arguments. And it is unlikely Mr. Murali Manohar Joshi, who chairs the JPC,  has the ability (or inclination) to understand these arguments. It will be interesting to see what comes off today&#8217;s questioning of Mr. Vinod Rai.</p>
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		<title>The 2G Spectrum Non-Scam</title>
		<link>http://kishorekumar62.wordpress.com/2011/10/03/the-2g-spectrum-non-scam/</link>
		<comments>http://kishorekumar62.wordpress.com/2011/10/03/the-2g-spectrum-non-scam/#comments</comments>
		<pubDate>Mon, 03 Oct 2011 07:36:06 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
				<category><![CDATA[2G Scam]]></category>
		<category><![CDATA[Analysis]]></category>

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		<description><![CDATA[In Apr, when the trial by media on the 2G spectrum pricing was in full swing, I had written that the CAG was up to no good. That the CAG report was specious, and downright silly in some aspects. Now, &#8230; <a href="http://kishorekumar62.wordpress.com/2011/10/03/the-2g-spectrum-non-scam/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3460&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>In Apr, when the trial by media on the 2G spectrum pricing was in full swing, I had written that the CAG was up to no good. That the <a href="http://kishorekumar62.wordpress.com/2011/04/10/the-2g-scam-1-76-lakh-crores/">CAG report was specious, and downright silly</a> in some aspects.</p>
<p><a href="http://kishorekumar62.files.wordpress.com/2011/10/it-cover-11_100x140_093011065117.jpg"><img class="alignright size-full wp-image-3473" title="it-cover-(11)_100x140_093011065117" src="http://kishorekumar62.files.wordpress.com/2011/10/it-cover-11_100x140_093011065117.jpg?w=500" alt=""   /></a>Now, six months later, the media has finally woken up. India Today has announced that the<a href="http://indiatoday.intoday.in/story/2g-spectrum-scam-cag-vinod-rai-jpc-undervaluation-of-2g-losses/1/153229.html"> CAG report inflated the loss to exchequer</a>, and the Rs. 1.76 Lakh Crore loss figure had little backing within the CAG itself!</p>
<p>Why this volte-face by the media? Most likely because of judicial intervention. Justice O. P. Saini&#8217;s court allowed the accused to defend themselves and they, of course,<a href="http://www.dnaindia.com/india/report_2g-scam-dilution-of-equities-to-foreign-firms-legal-says-a-raja_1579341"> tore into the CAG report</a>. As the CBI case started crumbling, the media is shifting its stand now.</p>
<p>Justice Saini has not framed charges yet (I am hoping he will throw away the frivolous charges such as causing loss to exchequer and making money by reselling spectrum, and retain only the out of turn allotment charge). Yet I feel I can say two things with confidence:</p>
<p>The media is a bunch of nitwits. But the Judiciary works.</p>
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		<title>Bangalore Green Still Intact</title>
		<link>http://kishorekumar62.wordpress.com/2011/04/15/bangalore-green-still-intact/</link>
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		<pubDate>Fri, 15 Apr 2011 10:13:23 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
				<category><![CDATA[Uncategorized]]></category>

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		<description><![CDATA[A year and half back (Sep 2009) I had captured a Goole Maps snapshot of the green cover over Nanda Talkies Road, Jayanagar. Now that Namma Metro work is well advanced, I took a second snapshot today: Things could have been &#8230; <a href="http://kishorekumar62.wordpress.com/2011/04/15/bangalore-green-still-intact/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3436&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>A year and half back (Sep 2009) I had captured a Goole Maps <a href="http://kishorekumar62.files.wordpress.com/2009/09/nanda-talkies-road-1.jpg">snapshot of the green cover over Nanda Talkies Road</a>, Jayanagar.</p>
<p>Now that Namma Metro work is well advanced, I took a second snapshot today:<br />
<a href="http://kishorekumar62.files.wordpress.com/2011/04/nanda-talkies-road.jpg"><img class="alignright size-full wp-image-3437" title="Nanda Talkies Road" src="http://kishorekumar62.files.wordpress.com/2011/04/nanda-talkies-road.jpg?w=500&#038;h=245" alt="" width="500" height="245" /></a>Things could have been worse. The Metro consturction has opened up two gashes in the gree canopy over that road for two Metro stations on this stretch. Also, the tree branches that used to join overhead have been pruned ,opening up the entire stretch to the sky (you can see the thining of the gree in the middle of the road). But, by and large, all the trees still stand. Whew!</p>
<p>Click <a href="http://kishorekumar62.files.wordpress.com/2011/04/composite.jpg">here</a> to see the two snapshots side by side.</p>
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		<title>The 2G Scam &#8211; 1.76 Lakh Crores my foot</title>
		<link>http://kishorekumar62.wordpress.com/2011/04/10/the-2g-scam-1-76-lakh-crores/</link>
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		<pubDate>Sun, 10 Apr 2011 04:26:41 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
				<category><![CDATA[2G Scam]]></category>
		<category><![CDATA[Analysis]]></category>
		<category><![CDATA[2G scam]]></category>

		<guid isPermaLink="false">http://kishorekumar62.wordpress.com/?p=3401</guid>
		<description><![CDATA[The real sensation in the saga is the number 1.76 lakh crores. How did Mr. Rai come up with this figure? Let is analyze the CAG report and see how it arrived at the above figure. The CAG reports starts &#8230; <a href="http://kishorekumar62.wordpress.com/2011/04/10/the-2g-scam-1-76-lakh-crores/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3401&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>The real sensation in the saga is the number 1.76 lakh crores. How did Mr. Rai come up with this figure? Let is analyze the CAG report and see how it arrived at the above figure.</p>
<p>The CAG reports starts off rather cautiously:</p>
<blockquote><p>5.1.2 What could be the value of the spectrum which was allocated to 122 licensees in 2008 at the price discovered through bidding for licences way back in 2001?</p>
<p>Any loss ascertained while attempting to value the spectrum in hindsight can only be &#8216;presumptive&#8217;, given the fact that there are varied determinants like its scarcity value, the nature of competition, business plans envisaged, time of entry, purchasing power of the people, growth of economy etc., which, in a market condition, would throw up the actual price at a given time.</p></blockquote>
<p>It then proceeds to apply three different methodologies to arrive at the &#8220;presumptive&#8221; value of the loss to the exchequer:</p>
<p><span id="more-3401"></span></p>
<p><a href="http://kishorekumar62.files.wordpress.com/2011/04/summary.png"><img class="aligncenter size-full wp-image-3402" title="summary" src="http://kishorekumar62.files.wordpress.com/2011/04/summary.png?w=500&#038;h=237" alt="" width="500" height="237" /></a>As can be seen above, the magic figure of 1.76 lakh crores is derived from the price 3G auctions fetched, and this figure is nearly thrice the figures arrived at bu the other two methods!</p>
<p>The first method seems reasonable. A company called S Tel twice voluntarily offered to pay more than the 2001 price as fixed by DoT. They further expressed willingness to increase even more in the event of a competitive auction.</p>
<blockquote><p>5.2.1 UASL applicant had offered higher price</p>
<p>On 5 November 2007 S TEL Limited, who had applied for UAS licence in September 2007, in its communication addressed to the Hon&#8217;ble Prime Minister voluntarily offered to pay additional revenue share of ` 6,000 crore to the DoT for a Pan-India licence over and above the spectrum charge/ revenue share payable as per existing policy. S TEL Limited in a further communication addressed to Hon&#8217;ble MoC&amp;IT dated 27 December 2007 enhanced its earlier offer of ` 6000 crore to ` 13,752 crore over a period of ten years for allotment of 6.2 MHz GSM spectrum. The Company further agreed to increase the bid price in the event of any counter bid or auction of spectrum for GSM on a Pan-India basis.</p></blockquote>
<p>In other words, S Tel clearly indicated it consider the price demanded by DoT as being too low. By this yardstick, the loss to exchequer was Rs. 76, 364 Cr.</p>
<p>The second method derives the presumptive 2G price from the actual price discovered by the 3G auction. The CAG argument is that the current 2G is actually closer to 2.75G, and hence it is fair to compare it with 3G.</p>
<blockquote><p><img class="alignright" src="http://triangulations.files.wordpress.com/2010/05/magic-tricks.jpg&#038;imgrefurl=http://triangulations.wordpress.com/page/5/&#038;usg=__KNRlkdlWhwkNJ4spo_ncWNibsso=&#038;h=399&#038;w=395&#038;sz=99&#038;hl=en&#038;start=146&#038;zoom=1&#038;tbnid=ONGXMdLxo_Tf5M:&#038;tbnh=153&#038;tbnw=151&#038;ei=BTShTd3XB8eecOXr0eUB&#038;prev=/search%3Fq%3Dmagic%2Btricks%26um%3D1%26hl%3Den%26rlz%3D1C1SKPC_enIN351IN351%26biw%3D1366%26bih%3D643%26tbm%3Disch&#038;um=1&#038;itbs=1&#038;iact=rc&#038;dur=634&#038;oei=STOhTdztGJevcPanre4B&#038;page=8&#038;ndsp=20&#038;ved=1t:429,r:9,s:146&#038;tx=96&#038;ty=70?w=120&#038;h=120" alt="" width="120" height="120" />TRAI in its report of 2010 has observed that 2G services today are actually offering 2.75G services. Therefore &#8220;while comparing special efficiencies and other factors, it is fair to compare existing 2.75G systems with 3G systems&#8221;</p></blockquote>
<p>This, in my opinion, flies in the face of experience. I have EDGE on my Airtel service and it crawls. My experience tells me it is nowhere close to 3G speeds. We have all seen the DoCoMo &#8220;Why crawl when you can fly&#8221; ad which nicely  contrasts 2G and 3G speeds:</p>
<span style="text-align:center; display: block;"><a href="http://kishorekumar62.wordpress.com/2011/04/10/the-2g-scam-1-76-lakh-crores/"><img src="http://img.youtube.com/vi/SgOt2uiSd88/2.jpg" alt="" /></a></span>
<p>Hence this method of assessing presumptive loss is deeply flawed from a technical standpoint and deserves to be rejected outright. This is the method that resulted in the Rs. 1.76 lakh crore figure. Hence, this seems to be a sleight of hand used by the CAG to create a sensation.</p>
<p>The third and final method is even more flawed, but from a business standpoint. The CAG argues that the allotees such as Swan, Unitech and Tata Teleservice &#8220;sold the spectrum&#8221; for multiple of the license price.</p>
<blockquote><p><img class="alignright" src="http://triangulations.files.wordpress.com/2010/05/magic-tricks.jpg&#038;imgrefurl=http://triangulations.wordpress.com/page/5/&#038;usg=__KNRlkdlWhwkNJ4spo_ncWNibsso=&#038;h=399&#038;w=395&#038;sz=99&#038;hl=en&#038;start=146&#038;zoom=1&#038;tbnid=ONGXMdLxo_Tf5M:&#038;tbnh=153&#038;tbnw=151&#038;ei=BTShTd3XB8eecOXr0eUB&#038;prev=/search%3Fq%3Dmagic%2Btricks%26um%3D1%26hl%3Den%26rlz%3D1C1SKPC_enIN351IN351%26biw%3D1366%26bih%3D643%26tbm%3Disch&#038;um=1&#038;itbs=1&#038;iact=rc&#038;dur=634&#038;oei=STOhTdztGJevcPanre4B&#038;page=8&#038;ndsp=20&#038;ved=1t:429,r:9,s:146&#038;tx=96&#038;ty=70?w=120&#038;h=120" alt="" width="120" height="120" />&#8230;considering that Telenor is an established international provider of a high quality telecommunications, data and media communication services and one of the Norway&#8217;s largest companies owned 54% by the Norway Government, what they would have required to run their business in this country was, primarily access to the spectrum. Considering its trained manpower strength in 12 countries, its longstanding technical expertise and international experience of dealing in telecom business, it can be convincingly concluded that, the high value paid by them was primarily for the spectrum and not for other inputs claimed to have been infused by Unitech. Such huge equity infusion by the investor company was a price that they paid for 2G spectrum which was allocated to Unitech,&#8230;</p></blockquote>
<p>The CAG does acknowledge that what happened in reality was that all these companies brokered foreign direct investment (FDI) in the form of equity stake, i.e. the sold equity in their companies. Equity participation is a common investment vehicle and there is nothing criminal about it. In reality such investment decisions are made based on projected ROI, which in turn depends on factors such as market size, competitive dynamics, market share which the target company is likely to corner over a specified time period, projected cash flows, net present value of project cash flows based on desired discount rate, etc. The CAG ignores this fact and argues that these investment decisions were made on the basis of &#8220;how much did you pay for spectrum? I will pay you a multiple of that&#8221;.</p>
<p>Anyone familiar with corporate finance can spot this sleight of hand immediately. Except for Karan Thapar, Rajdeep Sardesai, Vikram Chandra, Arnab Goswani et al. Either these gentlemen did not bother to read the CAG report or they are very very ignorant of corporate finance.</p>
<p>The media also makes a big deal of the fact that this equity sale happened soon after spectrum allocation. Think about it &#8211; why will a foreign company invest in an Indian company that does not have spectrum allocated and hence cannot operate telecom services in India? It is only reasonable that allotment of spectrum was a pre-requisite for the FDI. Again, nothing criminal about it.</p>
<p>To summarize, of the three methods used by CAG to value presumptive loss to exchequer, two are obvious sleight of hand. The third is a valid method which arrives at a presumptive loss of Rs. 67, 364 Crores which is one third of the Rs. 1.76 lakh crores sensationalized by the media. This method basically says if an auction was held, these same allotees would have been willing to pay a higher price. As explained in my earlier post, Kapil Sibal has acknowledge this and pointed to the 10th Five Year Plan for the policy basis of choosing not to auction.</p>
<p>So, where is the scam?</p>
<p>Not in the &#8220;loss to the exchequer&#8221;. The media insinuates that the entire loss to the exchequer was swallowed up by Raja, out PM and the Gandhi family and hence this is the biggest scam in the history of India, yada yada yada. In my opinion, such hysteria is completely unwarranted and is based on two sleight of hand tricks by the CAG.</p>
<p>The real scam is in the undermining of the first-come-first-served process by Raja, for which, in all probability, money changed hands. The CBI has investigated this, the SC is hearing this case, and let us see what comes of it.</p>
<p>As for the loss to the exchequer, I am convinced of the policy reasoning. There is not scam on this count.</p>
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		<title>The 2G Scam &#8211; Loss to Exchequer my foot</title>
		<link>http://kishorekumar62.wordpress.com/2011/04/09/the-2g-scam-loss-to-exchqeuer/</link>
		<comments>http://kishorekumar62.wordpress.com/2011/04/09/the-2g-scam-loss-to-exchqeuer/#comments</comments>
		<pubDate>Sat, 09 Apr 2011 09:00:05 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
				<category><![CDATA[2G Scam]]></category>
		<category><![CDATA[Analysis]]></category>
		<category><![CDATA[2G scam]]></category>

		<guid isPermaLink="false">http://kishorekumar62.wordpress.com/?p=3389</guid>
		<description><![CDATA[This whole 2G scam broke thanks to a report published by the Comptroller and Auditor General of India, one Mr. Vinod Rai. Here&#8217;s what Wikipedia has to say about Mr. Rai: As Comptroller and Auditor General of India, Vinod Rai has consistently &#8230; <a href="http://kishorekumar62.wordpress.com/2011/04/09/the-2g-scam-loss-to-exchqeuer/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3389&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>This whole 2G scam broke thanks to a report published by the Comptroller and Auditor General of India, one Mr. Vinod Rai. Here&#8217;s what<a href="http://en.wikipedia.org/wiki/Vinod_Rai"> Wikipedia has to say about Mr. Rai</a>:</p>
<blockquote><p><img class="alignleft" src="http://topnews.in/law/files/vinod-rai_0.jpg" alt="" width="100" height="80" />As Comptroller and Auditor General of India, Vinod Rai has consistently hit the headlines for his unforgiving audits, ranging from the scathing report on the shoddy preparation for the <a href="http://en.wikipedia.org/wiki/2010_Commonwealth_Games">2010 Commonwealth Games</a> to the latest on spectrum allocations for second generation (2G) telecom services. Bureaucratic grapevine suggests there was quite a bit of pressure on Rai to dilute the 2G report but he held fast, merely asking his people to check for unnecessarily harsh or unfair language. The report ripped apart the government, even pointing a finger at the prime minister for arbitrarily giving away spectrum, a valuable and limited national resource. The <a href="http://en.wikipedia.org/wiki/CAG">CAG</a> report said the ultimate loss to the exchequer could be as high as Rs 1.76 lakh crore.</p></blockquote>
<p>That figure of Rs. 1.76 lakh crore got the media all excited. This was a fantastic opportunity for sensational journalism which every magazine, newspaper and TV channel capitalized to the hilt. Thanks to the Internet, the CAG report is available to all. I <a href="http://saiindia.gov.in/cag/sites/default/files/2010-11_19_PA-civil/chap5.pdf">downloaded the report</a> and read through it with a view to forming my own opinion. Here is what I found.</p>
<p><span id="more-3389"></span></p>
<p>The CAG says there was a &#8220;presumptive loss to the exchequer&#8221; (more on this in my next post) due to the decision not to auction spectrum, but he does not delve into the question of was there any gains to compensate for the loss (as an auditor, he does not have to). Kapil Sibal explained in subsequent interviews with the media that the gains were in the nature of social benefits that accrued from increased mobile penetration.</p>
<blockquote><p>Q: So you are saying that the methodology is wrong therefore the conclusion is wrong?<br />
A: There are two things. One, in policies of this nature what we need to do is maximise public welfare and not maximise revenue, that’s the underlying philosophy of the 10th Plan.</p>
<p>Q: So the government wasn’t seeking to maximise revenue. It wanted to spread tele density?<br />
A: That is exactly what we wanted to do; spread tele density, ensure that there is money in the pocket of the consumer, that the cost of telephony is much less for the consumer, there is greater competition in the market, the cost of having a mobile phone is less. All these objectives are for public welfare. Ultimately remember this, technology is not for revenue earning, technology must reach people and reach people at a cost that helps in their welfare.</p>
<p>Q: And you are saying that incoming to an estimate that the loss could be as much as Rs 1.76 lakh crore, the CAG has overlooked these issues?<br />
A: Absolutely. He has overlooked the policy framework of the 10th document, which is what was been followed. Second is the issue of methodology which I have explained in mathematical terms.</p>
<p>Q: At your press conference on Friday the 7th, you said first that the realistic figure for the loss was something slightly over Rs 17,500 crore, but in the very next breath you said there was no loss at all. Which is it, a loss or no loss?<br />
A: You can calculate losses without reference of benefit. In a balance sheet what happens, there is a cost and there is a benefit. In every policy framework there is a cost and there is a benefit. If you look at the benefits to the consumer, they far exceed the revenue loss.</p>
<p>Q: So what is your position? Is there a loss or not?<br />
A: My position is if you don’t take the benefits you can calculate the losses to any extent you want. But if you look at the benefits, there are no losses.</p>
<p>-<a href="http://www.moneycontrol.com/news/business/2g-scam-no-public-loss-to-exchequer-says-kapil-sibal_511785.html"> 2G scam: No public loss to exchequer, says Kapil Sibal</a>, Moneycontrol.com, Jan 11, 2011</p></blockquote>
<p>Two things became clear to me when I read the above interview. Firstly, the decision not to auction spectrum was a policy decision of the Govt. of India. This was not something the Raja did on his own, because someone bribed him to do it. Secondly, the media (as represented by Karan Thapar) was not happy to hear such a solid defense (the last two questions shown above are nothing but &#8220;badgering the witness&#8221; type of questions in this trial by media where the media is the accuser, judge, jury all rolled into one and the accused is presumed guilty until proven innocent ).</p>
<p>Was the &#8220;public welfare&#8221; that Kapil talks about imaginary? We all know that in our country, even the poorest of the poor carry mobile phones, hence Kapil Sibal is not wrong in talking about public welfare.</p>
<p>Kapil Sibal is referring to the 10th Plan. I downloaded the <a href="http://planningcommission.nic.in/plans/planrel/fiveyr/10th/default.htm">relevant sections of the 10th Five Year Plan</a> and here is what I found:</p>
<blockquote><p>8.5.37 Telecommunications is one of the fastest growing sectors in India. However, viewed in the context of global growth patterns and indicators, the sector is still in the early stages of development.Our tele-density was only 4.01 as compared to the global average of 32.78 (December, 2001) and 24.98achieved by China&#8230;Keeping this perspective in view, the sector needs to be treated essentially as an infrastructure sector for the next decade or so. Once the required tele-density is achieved and the necessary support network has been created, the sector could be treated as service sector.</p>
<p>8.5.38 With a view to ensuring optimum growth in the coming years, Government’s broad policy of taxes and regulation for the telecom sector has tobe a promotional one. <strong>Mopping up of resources or revenue generation by the Government should not be a determinant of the policy governing the sector</strong>.The incidence of licence fees in the form revenue share and spectrum charges has to be guided by this principle&#8230;</p></blockquote>
<p>Furthermore, there is a &#8220;box&#8221; in the 10th Plan specifically addressing Spectrum Policy, which begins as follows:</p>
<blockquote>
<p style="text-align:center;">Box 8.5.7<br />
Guiding Principles &#8211; Spectrum Policy</p>
<p style="text-align:left;">• Spectrum policy needs to be promotional in nature; revenue considerations playing a secondary role&#8230;</p>
</blockquote>
<p>So, Kapil Sibal is not talking through his hat. There is a clear line of policy reasoning behind not auctioning spectrum.</p>
<p>Furthermore, this is not the first instance when the Govt. of India incurs loss to exchequer in the interest of public welfare. Think diesel subsidy where the loss (Rs. 70,000 Cr in 2008) is carried by the public sector oil marketing companies on behalf of the govt. of India. Think fertilizer subsidy (Rs. 1.17 lakh Cr in 2008-09) where the loss is carried by the fertilizer companies. Also remember that agricultural income is tax-free in India.</p>
<p>To summarize, here is a situation where an auditor says &#8220;the govt. left money on the table&#8221; and the govt. replies &#8220;we wanted to increase mobile penetration in line with the 10th Five Year Plan recommendation&#8221;.</p>
<p>Where is the scam here?</p>
<p>In the next post, I will analyse the figure of Rs. 1.76 lakh crore loss to exchequer.</p>
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		<title>The 2G Scam &#8211; Myth and Reality</title>
		<link>http://kishorekumar62.wordpress.com/2011/04/09/3386/</link>
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		<pubDate>Sat, 09 Apr 2011 07:36:22 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
				<category><![CDATA[2G Scam]]></category>
		<category><![CDATA[Analysis]]></category>
		<category><![CDATA[2G scam]]></category>

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		<description><![CDATA[The media has been going nuts over the 2G scam for the past few months and that is an understatement. Whenever the media acts as accuser, judge and jury all rolled into one, and condemns someone, I get very perturbed. In &#8230; <a href="http://kishorekumar62.wordpress.com/2011/04/09/3386/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3386&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>The media has been going nuts over the 2G scam for the past few months and that is an understatement. Whenever the media acts as accuser, judge and jury all rolled into one, and condemns someone, I get very perturbed. In a democracy it is expected that the media will educate and inform not condemn, but the Indian media cares little about educating and informing. So, one has to rely on oneself for information.</p>
<p>There are two primary accusations against Raja:</p>
<ol>
<li>Raja chose not to auction spectrum in 2007. He decided to fix spectrum price at 2001 levels. This resulted in a loss to exchequer to the tune of Rs. 1,76,000 Cr.</li>
<li>Raja gamed the first-come-first-served process to favor a few select businesses, in return for unspecified bribes.</li>
</ol>
<p>On both counts, the media insinuates that Raja made a lot of money. The perception created by the media is that the exchequer&#8217;s loss is Raja&#8217;s gain.</p>
<p>What is the reality?</p>
<p>To obtain a balanced perspective, one has to listen to the accused&#8217;s side of the story. In this case, Raja&#8217;s defense for Accusation #1 came from Kapil Sibal.While the media did their best to tar him black, to his credit, Sibal did put his point across pretty clearly &#8211; the loss to exchequer was intentional; it has to be balanced against the public good that accrues due to increased mobile penetration. In other word, the decision not to auction spectrum and fix the price at 2001 levels was a conscious policy decision by the Congress Govt.</p>
<p>As for Accusation #2, there has been no defense so far.</p>
<p>Here is my perspective. Accusation #1 was indeed a policy decision for which the Congress need not be ashamed. The media got it all wrong, and simply sensationalized the humongous Rs. 1.76 lakh crore figure conjured by the Comptroller and Auditor General. Accusation #2, in all probability, guilty as charged, but the actual kick-back is likely to be 15 &#8211; 20% of spectrum license charges.</p>
<p>In subsequent posts, I will examine Accusation #1 from multiple angles and explain why I believe it was a media red herring, and also explain the huge disservice the media is doing to Indian democracy.</p>
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		<title>The Trouble with Metrics-Based Management</title>
		<link>http://kishorekumar62.wordpress.com/2010/06/20/the-trouble-with-metrics-based-management/</link>
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		<pubDate>Sun, 20 Jun 2010 08:08:22 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
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		<description><![CDATA[I was reading the transcripts of the US Congressional grilling of BP CEO Tony Hayward, and this passage caught my attention: Dr. Burgess: Let me ask you another question. You said in response to some information that came up that &#8230; <a href="http://kishorekumar62.wordpress.com/2010/06/20/the-trouble-with-metrics-based-management/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3367&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>I was reading the transcripts of the US Congressional grilling of BP CEO Tony Hayward, and this passage caught my attention:</p>
<blockquote>
<div id="_mcePaste"><em>Dr. Burgess</em>: Let me ask you another question. You said in response to some information that came up that there was no evidence that BP was focusing on the cost of drilling. And, yet, March 2010 strategy presentation, you stated, &#8220;We have added exploration resources efficiently. Our discovery cost was $1.40 per barrel in 2009. This is consistent with our track record over the last 5 years of having the lowest discovery costs in the industry.&#8221;</div>
<p>Now, certainly, that would be enviable, except, in a culture of safety, I mean, I might even spend $1.45 or $1.47, instead of just $1.40, if it meant that it was a safe procedure.</p>
<p>So was maintaining the lowest‐cost discovery in the industry possibly a factor in the decision‐making on this well?</p>
<p><em>Mr. Hayward</em>: None whatsoever.</p>
<p>But that metric is created by dividing the volume of barrels discovered by the costs. And what it talks to is the success of our exploration program and the scale of the volume that we have discovered, not anything to do with costs.</p>
<p><em>Dr. Burgess</em>: Well, but it does have something to do with cost. Now, it has been reported that completion of the Macondo well was running behind schedule. Is this accurate?</p>
<p><em>Mr. Hayward</em>: I believe it was running behind schedule, that is correct.</p>
<p><em>Dr. Burgess</em>: How far behind schedule?</p>
<p><em>Mr. Hayward</em>: I don&#8217;t know the precise number.</p>
<p><em>Dr. Burgess</em>: What does it cost today to run a rig like that?</p>
<p><em>Mr. Hayward</em>: That sort of rig, fully built up, the cost is probably a million dollars a day or thereabouts.</p>
<p><em>Dr. Burgess</em>: So, even a couple of days over is a significant cost driver on that $1.40‐a‐barrel minimal discovery cost in the industry.</p>
<p><em>Mr. Hayward</em>: Well, with respect, Congressman, the most important thing was that actually we had made a discovery, and we wanted to secure it in the proper way. And that was going to be a far bigger driver of any value that the company was going to create than the cost of the operation.</p>
<p><em>Dr. Burgess</em>: I don&#8217;t disagree with that. But, oh, how I wish that that had been the case, as we are investing hearing after hearing after hearing on this thing case and the darned thing is still bubbling down at the bottom of the gulf. That doesn&#8217;t seem to be accurate.</p></blockquote>
<p>Beware what metrics you use in your strategy meetings! Big Brother is always watching!</p>
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		<title>Eyjafjallajökull</title>
		<link>http://kishorekumar62.wordpress.com/2010/04/20/eyjafjallajokull/</link>
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		<pubDate>Tue, 20 Apr 2010 11:41:40 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
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		<description><![CDATA[A Journey to the Center of the Earth is an all-time favorite of mine. This delightful book by Jules Verne describes a mad attempt by a nearly mad scientist to reach the center of the earth by descending a volcano. &#8230; <a href="http://kishorekumar62.wordpress.com/2010/04/20/eyjafjallajokull/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3345&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p><a href="http://jv.gilead.org.il/vt/c_earth/pics/title.gif"><img class="alignright" src="http://jv.gilead.org.il/vt/c_earth/pics/title.gif" alt="" width="209" height="172" /></a><a href="http://jv.gilead.org.il/vt/c_earth/index.html">A Journey to the Center of the Earth</a> is an all-time favorite of mine. This delightful book by Jules Verne describes a mad attempt by a nearly mad scientist to reach the center of the earth by descending a volcano. What is interesting at the present moment is that Jules Verne picked a volcano in Iceland as the starting point of his journey!</p>
<p style="text-align:center;"><a href="http://kishorekumar62.files.wordpress.com/2010/04/iceland-callouts2.jpg"><img class="aligncenter size-full wp-image-3350" title="Iceland Callouts" src="http://kishorekumar62.files.wordpress.com/2010/04/iceland-callouts2.jpg?w=500&#038;h=354" alt="" width="500" height="354" /></a></p>
<p>Jules Verne&#8217;s volcano is on the left and the current ash-spewing bane-of-air-travel is south-center.</p>
<p>Here is Jules Verne&#8217;s description of the formation of this whole Iceland island:</p>
<p><span id="more-3345"></span></p>
<blockquote><p>This extraordinary and curious island must have made its appearance from out of the great world of waters at a comparatively recent date. Like the coral islands of the Pacific, it may, for aught we know, be still rising by slow and imperceptible degrees.</p>
<p>If this really be the case, its origin can be attributed to only one cause—that of the continued action of subterranean fires&#8230;</p>
<p>Iceland, being absolutely without sedimentary soil, is composed exclusively of volcanic tufa; that is to say, of an agglomeration of stones and of rocks of a porous texture. Long before the existence of volcanoes, it was composed of a solid body of massive trap rock lifted bodily and slowly out of the sea, by the action of the centrifugal force at work in the earth.</p>
<p>The internal fires, however, had not as yet burst their bounds and flooded the exterior cake of Mother Earth with hot and raging lava.</p>
<p>My readers must excuse this brief and somewhat pedantic geological lecture. But it is necessary to the complete understanding of what follows.</p>
<p>At a later period in the world’s history, a huge and mighty fissure must, reasoning by analogy, have been dug diagonally from the southwest to the northeast of the island, through which by degrees flowed the volcanic crust. The great and wondrous phenomenon then went on without violence—the outpouring was enormous, and the seething fused matter, ejected from the bowels of the earth, spread slowly and peacefully in the form of vast level plains, or what are called mamelons or mounds.</p>
<p>It was at this epoch that the rocks called feldspars, syenites, and porphyries appeared.</p>
<p>But as a natural consequence of this overflow, the depth of the island increased. It can readily be believed what an enormous quantity of elastic fluids were piled up within its center, when at last it afforded no other openings, after the process of cooling the crust had taken place.</p>
<p>At length a time came when despite the enormous thickness and weight of the upper crust, the mechanical forces of the combustible gases below became so great, that they actually upheaved the weighty back and made for themselves huge and gigantic shafts. Hence the volcanoes which suddenly arose through the upper crust, and next the craters, which burst forth at the summit of these new creations.</p>
<p>It will be seen that the first phenomena in connection with the formation of the island were simply eruptive; to these, however, shortly succeeded the volcanic phenomena.</p>
<p>Through the newly formed openings, escaped the marvelous mass of basaltic stones with which the plain we were now crossing was covered. We were trampling our way over heavy rocks of dark grey color, which, while cooling, had been moulded into six-sided prisms. In the “back distance” we could see a number of flattened cones, which formerly were so many fire-vomiting mouths.</p>
<p>After the basaltic eruption was appeased and set at rest, the volcano, the force of which increased with that of the extinct craters, gave free passage to the fiery overflow of lava, and to the mass of cinders and pumice stone, now scattered over the sides of the mountain, like disheveled hair on the shoulders of a Bacchante.</p>
<p>Here, in a nutshell, I had the whole history of the phenomena from which Iceland arose. All take their rise in the fierce action of interior fires, and to believe that the central mass did not remain in a state of liquid fire, white hot, was simply and purely madness.</p>
<p>- Journey to the Center of the Earth, <a href="http://jv.gilead.org.il/vt/c_earth/12.html">Chapter XII &#8211; The Ascent of Mount Snaeffels</a></p></blockquote>
<p>Not surprising at all  that a whole country formed of volcanic action continues to create trouble in its neighbourhood!</p>
<p>According to Jules Verne, the intrepid scientist and his two companions reach a gigantic ocean inside the earth (with giant sea creatures and all), sail across it and eventually get thrown out to the surface of the earth by another volcano in &#8230; read on:</p>
<blockquote><p>“Where are we?” dreamily asked my uncle, who literally appeared to be disgusted at having returned to earth.</p>
<p>The eider-down hunter simply shrugged his shoulders as a mark of total ignorance.</p>
<p>“In Iceland?” said I, not positively but interrogatively.</p>
<p>“<em>Nej</em>,” said Hans.</p>
<p>“How do you mean?” cried the Professor; “no—what are your reasons?”</p>
<p>&#8230;After some delay, the Professor spoke.</p>
<p>“Hem!” he said, in a hesitating kind of way, “it really does not look like Iceland.”</p>
<p>&#8230;after two long hours’ march, a beautiful country spread out before us, covered by olives, pomegranates, and vines, which appeared to belong to anybody and everybody. In any event, in the state of destitution into which we had fallen, we were not in a mood to ponder too scrupulously.</p>
<p>What delight it was to press these delicious fruits to our lips, and to bite at grapes and pomegranates fresh from the vine.</p>
<p>Not far off, near some fresh and mossy grass, under the delicious shade of some trees, I discovered a spring of fresh water, in which we voluptuously laved our faces, hands, and feet.</p>
<p>While we were all giving way to the delights of new-found pleasures, a little child appeared between two tufted olive trees.</p>
<p>“Ah,” cried I, “an inhabitant of this happy country.”</p>
<p>The little fellow was poorly dressed, weak, and suffering, and appeared terribly alarmed at our appearance. Half-naked, with tangled, matted and ragged beards, we did look supremely ill-favored; and unless the country was a bandit land, we were not likely to alarm the inhabitants!</p>
<p>Just as the boy was about to take to his heels, Hans ran after him, and brought him back, despite his cries and kicks.</p>
<p>My uncle tried to look as gentle as possible, and then spoke in German.</p>
<p>“What is the name of this mountain, my friend?”</p>
<p>The child made no reply.</p>
<p>“Good,” said my uncle, with a very positive air of conviction, “we are not in Germany.”</p>
<p>He then made the same demand in English, of which language he was an excellent scholar.</p>
<p>The child shook its head and made no reply. I began to be considerably puzzled.</p>
<p>“Is he dumb?” cried the Professor, who was rather proud of his polyglot knowledge of languages, and made the same demand in French.</p>
<p>The boy only stared in his face.</p>
<p>“I must perforce try him in Italian,” said my uncle, with a shrug.</p>
<p>“<em>Dove noi siamo?</em>”</p>
<p>“Yes, tell me where we are?” I added impatiently and eagerly.</p>
<p>Again the boy remained silent.</p>
<p>“My fine fellow, do you or do you not mean to speak?” cried my uncle, who began to get angry. He shook him, and spoke another dialect of the Italian language.</p>
<p>“<em>Come si noma questa isola?</em>”—“What is the name of this island?”</p>
<p>“Stromboli,” replied the rickety little shepherd, dashing away from Hans and disappearing in the olive groves.</p>
<p>&#8230;Stromboli! What effect on the imagination did these few words produce! We were in the center of the Mediterranean, amidst the eastern archipelago of mythological memory, in the ancient Strongylos, where AEolus kept the wind and the tempest chained up. And those blue mountains, which rose towards the rising sun, were the mountains of Calabria.</p>
<p>And that mighty volcano which rose on the southern horizon was Etna, the fierce and celebrated Etna!</p>
<p>“Stromboli! Stromboli!” I repeated to myself.</p>
<p>My uncle played a regular accompaniment to my gestures and words. We were singing together like an ancient chorus.</p>
<p>Ah—what a journey—what a marvelous and extraordinary journey! Here we had entered the earth by one volcano, and we had come out by another. And this other was situated more than twelve hundred leagues from Sneffels from that drear country of Iceland cast away on the confines of the earth. The wondrous changes of this expedition had transported us to the most harmonious and beautiful of earthly lands. We had abandoned the region of eternal snows for that of infinite verdure, and had left over our heads the gray fog of the icy regions to come back to the azure sky of Sicily!</p>
<p>- A Journey to the Center of the Earth, <a href="http://jv.gilead.org.il/vt/c_earth/43.html">Chapter XLIII &#8211; Daylight at Last</a></p></blockquote>
<p>Maybe the airline industry should look for a solution in Sicily <img src='http://s0.wp.com/wp-includes/images/smilies/icon_smile.gif' alt=':-)' class='wp-smiley' /> </p>
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		<title>This Happens Only in India</title>
		<link>http://kishorekumar62.wordpress.com/2010/04/12/this-happens-only-in-india/</link>
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		<pubDate>Mon, 12 Apr 2010 03:51:53 +0000</pubDate>
		<dc:creator>Kishore Kumar</dc:creator>
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		<description><![CDATA[This page of the Times of India 9 Apr 2010 epitomizes the dichotomy that is India. Talk of using high-tech drones to fight the Naxals. And in the same breath admit we cannot provide basics like drinking water to the &#8230; <a href="http://kishorekumar62.wordpress.com/2010/04/12/this-happens-only-in-india/">Continue reading <span class="meta-nav">&#8594;</span></a><img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=kishorekumar62.wordpress.com&amp;blog=4840311&amp;post=3339&amp;subd=kishorekumar62&amp;ref=&amp;feed=1" width="1" height="1" />]]></description>
			<content:encoded><![CDATA[<p>This page of the Times of India 9 Apr 2010 epitomizes the dichotomy that is India.</p>
<p>Talk of <a href="center;&quot;&gt;">using high-tech drones to fight the Naxals</a>. And in the same breath admit we <a href="http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&amp;Source=Page&amp;Skin=TOINEW&amp;BaseHref=TOIBG/2010/04/09&amp;PageLabel=10&amp;EntityId=Ar00100&amp;DataChunk=Ar01001&amp;ViewMode=HTML&amp;GZ=T">cannot provide basics like drinking water to the low-tech Jawans</a> who are actually fighting the Naxals on the ground!</p>
<p style="text-align:center;"><a href="http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&amp;Source=Page&amp;Skin=TOINEW&amp;BaseHref=TOIBG/2010/04/09&amp;PageLabel=10&amp;EntityId=Ar01000&amp;ViewMode=HTML&amp;GZ=T"><img class="size-full wp-image-3338 aligncenter" title="TOI" src="http://kishorekumar62.files.wordpress.com/2010/04/toi.jpg?w=500&#038;h=569" alt="" width="500" height="569" /></a></p>
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