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‘Your generation was really a labour intensive one’ remarked my son after reading the financial paper. There was a time when I was proud that he began reading financial papers while his classmates did not even know what paper was subscribed in their house. But now after hearing his remarks, I was beginning to have my doubts on my pride. In explanation to his remark he elaborated, ‘To compare the standard of living between countries your generation calculated a basket of food cost in each country and made your conclusion’. ‘Today, we have just one dish – a burger and we arrive at a conclusion so fast’. I had read that news and it did have me seething with frustration as to how such a single dish so predominantly American could be a worldwide index and that too of currency! I distinctly remember the first 50 years of independence when any American asked if Big Mac was available, I proudly replied that we had such an Indian alternative that Big Mac would not find any place here. But history had no place for a small Indian’s Pride. When I asked my friends in the currency market how the Big Mac achieved such a status, each of them laughed so much that tears were rolling down their cheeks. I really did not know if they were laughing at the concept of this index or my ignorance. So I did some calls and got myself an appointment with the magazine which had done the survey using Burgernomics.

‘You look older than a Management Finance student on summer training’ spoke the head of the Economics Desk of the Magazine. I introduced myself as an old student re-learning basic economics. He guffawed; confirming that economic theories radically changed every two decades. ‘All I want to know how Big-Mac achieved the status of an index’ I went straight to the point. ‘I can explain this easily’ he smiled. ‘We used to spend so much time gathering the prices of food-basket in each country that by the time we concluded, the prices had changed. So, instead of 16 items in the basket, we all agreed to have one and being a large multinational…’ He trailed off explaining how the MIS report of just one corporate was food for their research which could be concluded over a weekend.

‘Did you not consider the single product index has its disadvantages that may mislead you?’ I asked in genuine concern. With a wave of flourish of his left hand he dismissed my concern quoting ‘cost of perfect information’, implying that his exercise would not be too off the mark. Now I had to jitter him. ‘India is not a beef eating country so you do not have the Big-Mac. But your substitute of Maharaja Burger also may not be correct.’ Now his sleepy eyes opened. ‘What do you mean?’ he was angry. ‘Even a non-veg like me does not prefer the Maharaja Burger as it tastes too much of potatoes while I am charged for the non-existent meat’. I explained. ‘I would rather eat the Vada Pav as millions others do’ I dropped the bomb. ‘It is an Indian answer to the burger’ I tried to explain. He was flustered. ‘But … but everything inside the bread is dry while burger has the Mayo..’ I shook my head like a parent, ‘Are we speaking of food taste or index which should be more representative?’ I explained further, ‘While the Maharaja Burger costs $1.62, the vada pav costs 25 cents, making our currency more undervalued than that reported by you.’ Now I had him in my grip as he was visibly sweating.

‘What … what should we do the next time? Monitor Vada Pav for India?’ he asked my help. ‘If popular Indian snack is what you are searching for, then you should have picked the bhel’ I was leading him on the road of confusion. ‘The chutney messes my stomach’ he said like a true non-Indian. ‘Are you not interested that the daily consumption of this light snack is more than 5.7 tons in India? It also generates employment for 27,000 persons. With such impressive figures, this light snack deserves heavy attention is what I feel. I dropped the anchor in his port of regret. With his head in his hands, he groaned at the prospect of re-calculation. ‘What will you do for the choice of snacks in other Asian countries?’ I needled him. He looked aghast. ‘Burgers are not eaten popularly in many countries’ I explained introducing him to the really popular snacks in those countries.

I admitted to him that Japan is a country really difficult to understand. Even Fritto Lays did not make any sale there until they introduced Squid flavoured wafers. So, he would need an expert on Japan if some snack had to be selected.

‘Why did you not choose another multinational like coca cola instead?’ I asked innocently. With head reeling he tried to focus on my face ‘Uh’ is all he managed to say. ‘But even there you may perhaps have been mis-led in India itself.’ I continued. ‘Here, the Ice Gola is more popular and believe me, a whole lot cheaper.’ Now I had him almost prostrate touching my feet nearly calling me Guru. ‘What do you suggest we should have done?’ he asked my advice.

‘I think you should have called an expert on food. If you had watched the right channel, you would have found one Mr. Andrew Zimmerman who eats the local exotic food. From Mongolia to the interiors of Amazon forest, he eats the exotic and bizarre. He is more suited to advice you.’ I left with this advice knowing fully well that the next survey would do away with burgernomics at least. Would they then call it ‘Zimmernomics’ or would they call it ‘Bizzarenomics’? Now that would surely put a TV host in the Economics Textbooks for the next generation.

Sovereign Risk

Every March we are attacked with new circulars from the Central Bank tweaking the definition of Non Performing Asset (NPA) which seems a minor change to the layman but so complicated to the Bankers and Statutory Auditors that they have to hold Seminars and issue guidance notes to ensure the intention and spirit (sometimes conflicting) are executed. Imagine our surprise when events far away as crossing of 3 seas have such an impact as to feature in the Headlines of all local newspapers. When my son read it, he was curious to compare his college notes on risk and the real world. ‘Dad, for years together, the Bankers considered sovereign risk as low risk. Do you think they will have to re-think the classification in light of the news of today?’ He was referring to the two decade earlier Bankers classification of borrowers either owned by the Government or support by the Government or Loans guaranteed by the Government. Bankers considered these as ‘safe’ until of course some events occurred and no longer was this followed but my son’s text book was not yet updated in this matter. ‘Son, Nigeria and some South American countries had issues of repayment of Bonds and other debts to which the Bankers had wizened up in the last decade of the last century.’ ‘Is the drop of a single alphabet ‘A’ such a big issue?’ he asked. I was tempted to regale him on the well worn cliché of typing a letter without just a single alphabet not working on the machine but decided against boring him. ‘If triple A is perfection then even a single drop means you are imperfect and to add insult to the injury is that these countries are not reaching double A plus from something lower but are being DEMOTED. Demotion is embarrassment to anyone’ I explained my point of view.

‘Hmm…France..’ my son’s muse was aloud. I braced for the impact of his whirring thoughts which always seem to lead anywhere but the expected. Practicably came the first salvo. ‘If this rating drop eventually leads to drop in currency rates then the French Perfumes may get as cheap as the American and we can use them daily like cologne’. ‘I guess so’ I replied meekly not wanting to express ignorance of the perfume snob knowledge or the difference between cologne and perfume in the first place. ‘And you too can have the advantage of hosting parties with the world famous French wine and even uncork a champagne or two without much of a dent in your budget’. He was such a caring son that any father would love to have. Now I took off in his direction. ‘France is also known as the capital of the world for fashion. So, designer clothes will also be more affordable.’ I snickered knowing fully well that the single dress of Rs.1.5 lacs would perhaps cost little less than Rs.1 lac which would still be unaffordable to the middle class of India.

‘The writing was on the wall for more than a century yet all ignored the fate of France’ thus spoke my intelligent son. ‘Pray, what did the scholars of the world ignore that you have noted in your nascent student age?’ I asked. ‘Have you seen French cuisine?’ he asked. ‘One eats not look at the cuisine’ the foodie in me was now insulted. ‘What I mean is that have you seen the size of the food they put on the serving plate?’ he elaborated. Trying to recall a mental picture I did admit him to be right. Plates were of normal size, but the food though artistically laid out was admittedly too small for my palate. I recalled distinctly that it took 3 main courses to fill me up where a single would have sufficed under an Indian meal. ‘So, nearly a century of such small helping was a prediction of France entering the class of poor nations.’ Was the grand conclusion we made at that point. We both recalled the glorious days of Louis XIV and of course Queen Marie Antoinette who hosted parties which were unparalleled the world over. What a come down for this country is what saddened us.

‘What do the Banks do when a loan account turns non-performing?’ asked my son. ‘I think they sell the asset and recover their dues like if you default on payment of your car or house, they auction it off’ I educated him. ‘If it is a company then normally, it is taken over buy another company’ ‘And if a country is NPA….’ he mused. At that moment except for my heartbeat everything screeched to a halt. I just could not think of a reply. ‘Is this the modern way to take-over a country?’ he asked in all innocence. Not a bad chain of thoughts I mused. All that effort in the Second World War taken by Herr Hitler and his troops would have been saved and he would just have taken over the economy overnight and enjoyed sitting in the French sunset sipping French wine instead of the smoky dusty War that he had to endure. ‘If this is modern warfare, all you cyber crime detectors were wrong in predicting that the Cyber War is the modern war’ he reminded me of one of my lectures on Ethical Hacking I had given in the recent past. ‘It could also be a fall out of the currency war when the target was earlier China and the attempts of US failed, so they may have aimed at a softer target now. Ever since the Euro currency was a reality, the US$ felt the heat especially when it began to be valued more than it and all major invoiced out of US were being quoted in Euros.. The Foreign Exchange expert in me erupted. ‘You meant this could be a currency war?’ my son opened wide his eyes.

‘While we had earlier equated sovereign risk as no risk or the lowest of risk, what shall take its pace?’ my son had to ask the impossible to answer question. I could not reply an economic answer though there was a philosophical one that at the end of one’s life, all risks come to an end.

Though the father and son conversation came to end there, I still did not have an answer about the status of ‘Sovereign Risk’. I had to phone my Banker friend who was heading the Risk Management Department of his Bank. He laughed and laughed telling me that no-one uses the term Sovereign Risk anymore. Eurozone was already in the ICU and now the risk was more Zonal than Country. I was still puzzled so I asked who I can ask for a better elaboration.

He answered, ‘Monica Lewinsky knows sovereign risk the best’.

Hardship Allowance

‘What role can a strategy management consultant play in designing H.R. Packages?’ I asked the CEO of the HR consultancy firm who had called on me in my office at the fag end of the day. He looked so harassed that I feared his state of mind, concluding that perhaps he wrongly strayed into my office instead of my neighbor in my office
complex. ‘It is this new allowance introduced by our country’s airline that has started the snowball of problems even in other sectors’ he cried. ‘How can allowance of the airline like overnight allowance to cabin crew apply to plastic bucket manufacturer?’ ‘Not that,’ he sobbed, ‘hardship allowance is the one.’ Now I had to do some research on what this allowance was all about. The newspaper of the day (see inset) was a sufficient introduction.

‘So what is the chaos’ I asked. ‘The list is long’ he answered and rattled off the following:

1. Shift workers in shifts other than General Shift face hardship of conveyance, food and sleep. Therefore the first and last shift workers demand hardship allowance.

2. Married men posted out of town in bachelor accommodation face the hardship of cooking on their own and washing their own clothes etc. so they …..

3. Persons forced to work in ‘dry’ areas face the hardship of lack of sleep due to absence of alcohol and thus….

4. Drivers on the payroll of companies also ask for hardship allowance when their boss goes out and they cannot eat from either the subsidized canteen or their favorite restaurant.




5. Bus drivers find it hard to drive during the office rush so…..








6. Airline pilots get rich food on duty and are surrounded by beautiful hostesses which makes life period of non-duty a hardship therefore…..









7. Chefs of 5 and 7 start restaurants also have to create and taste artistically cooked and presented dishes every day. The rich food in the long run gives rise to diseases related to rish intake therefore this hardship should be recognized.



8. Bar tenders also face hardship when they have to perform their duty. The smells and taste of so much alcohol goes to their head and yet they have to show they are sober which is not easy and therefore hard. So…….



9. Bus drivers in Mumbai also demanded an additional ‘Monsoon Hardship allowance’ since they were taught to drive busses and not sail them every monsoon in the rivers of Mumbai.

I stopped him, saying ‘I get the drift’. He was now blubbering, ‘The limit is when even in the same chair and same timings, people are asking for hardship allowance just because their boss is harsh and fires them often. They call this hard work. Now my HR budgets are haywire and companies may actually face closure.’

Since it was really not my cup of tea I had to seek time to think and asked him to see me the next day.

After I went home and found the usual complaints of the wife I realized that now even I need hardship allowance just to stay married.