State of development

The boom-town on the periphery of the national capital has done it again.

The State High Court has prohibited any future permission for construction till the authorities informed it how and from where it would get water for the city.

In a sea of mediocrity in a forever developing nation, it stands proudly as a beacon of development and growth.

It has, swiftly, scaled the final pedestal of the development scale. It has crossed the final hurdle by successfully consuming and eliminating all fresh water resources in its geographical area. And this milestone has been achieved in record time. To understand the magnitude of the achievement, it should be noted that the record so far was held by a town in a western country where it took over a hundred years for the town to finally consume all available water and end the cycle of renewal that nature, till then, was forcing upon the town. In case of our boom-town, it took barely twenty five years. This record is unlikely to be broken in a hurry.

The Chambers of Commerce and Industry felicitated the Chief Minister of the state for this unique achievement.

In a rousing speech to a huge crowd on this occasion, he said:

This has been the result of the vision of our forefathers, because of which, over the last two decades, despite this being a water deficient region, and despite there being no plans for providing water, merely on the basis of empty promises made by successive governments, this city has emerged as one of the most preferred destinations for investors and house-buyers witnessing massive construction due to the boom in the real estate sector in the region.

He paused while the audience clapped and cheered lustily.

This development would not have been possible without the continuing support of big business, with its endless ability to get around  rules and regulations with impunity, and our policy makers and law enforcers, with their unique ability to act tough where no need exists, like mandatorily extending school summer holidays by a week, and look the other way when there is a need to act, like murders and rapes. With the constant support of these two pillars of a vibrant, democratic society, we have consistently built where we should not have and drawn water where there was little available. The result is this vast, gleaming city of high rises, eight lane highways, shopping malls and restaurants, the yardsticks for progress, to match the best in the world.

He paused while the audience again clapped and cheered wildly. He took a sip of water, bottled over a thousand miles away, in a place that had not yet seen any development, and continued:

All of us know how water was being wasted on frivolous uses. Like drinking. When we should have been drinking water from bottles transported from a thousand miles away. As we have done so successfully in the past, we have gone to the root of the problem to solve it. The problem has now completely been eliminated. If there is no water, there is going to be no wastage. We don’t believe in half-measures.

While our development on the water front (pun unintended, we don’t have a water-front any more, as we have become developed) are in the limelight because of this record, I must remind you that our achievements on the other vectors of development are no less stellar.

Amid thunderous applause he took another sip of water bottled a thousand miles away, said thank you to the crowd, waved goodbye and stepped off the stage.

In an unrelated development later in the day, Chief Ministers of other forever developing states, like the one where the water the Chief Minister was drinking was bottled, met together to discuss how they could emulate boom-town’s record of consistent development. At the end of the meeting, they have agreed to set targets for each of their states for choking off all fresh water supplies, reduction in forest cover, and building eight lane highways, tall buildings and shopping malls, in a time-bound programme.

Back to the Future

Our honourable and beloved Finance Minister, in his usual, insightful manner, has opened up a world of possibilities for Big Business, with the retrospective change in law in the latest Finance Bill. The proposal amends the Income Tax Act to assert the government’s right to levy tax on merger and acquisition (M&A) deals involving overseas companies with business assets in India and is an enabling provision to protect the fiscal interests of the country and avert the chances of a crisis.

This has been done by changing policy with retrospective effect. Effective 1962. It is believed that this move will yield several billion dollars to the state’s coffers, mostly from a large Telecom company.

This one stroke of genius of the Finance minister has, however, revitalised failed and failing businesses the world over.

Kodak

Kodak, which lost a significant part of its value as a result of not moving to digital in time, has passed a Board Resolution to introduce digital technology, which it claims to have invented, with retrospective effect. This change is dated back to 1981, the year Sony introduced Mavica, a camera without a traditional film. Kodak has also retrospectively introduced workshops for senior management to shake them out of their belief that film will last forever and will continue to be hugely profitable.

As a result, Kodak is the most visible name in digital cameras today. Canon, Sony, HP and others trail Kodak by a mile.

Decca Records

Decca Records executives in charge of evaluating new talent, after travelling to Liverpool to watch a local band perform, inviting them to audition at their studio in London on New Year’s Day 1962 and deciding not to sign them, have, with retrospective effect, changed the decision they took in early 1962 to not contract the new band and, instead, have offered a lifetime contract to the band.

The band, of course, is The Beatles.

As a result of this retrospective signing, EMI, who had, then, signed up The Beatles, could not sign them up. They have continued to play on the fringes of mainstream music ever since while Decca Records went on to become the biggest name in music today, riding on the success of The Beatles.

Ford

In 1908, when Model T was first marketed, for its unique combination of price and quality, it revolutionised American culture and gave Ford an over 50% market share of the automobile market in the US. The Model T was also said to be the making of Henry Ford, lifting him from being any other Detroit automobile maker to becoming car maker to the world, and yielded him untold riches and power and pleasure. He was convinced of its capability and believed it would last forever.

Alas, that was not to be. Competitors kept innovating and soon the market responded. Chevrolet soon overtook Ford.

Ford has retrospectively replaced Ford as the Chairman, opting for an independent professional, Ford continuing in an advisory capacity. They soon introduced a new model to take over from Model T and it was even more successful.

Ford is the leading car-maker in the world today. Chevrolet, after briefly being in contention for the top slot, faded into oblivion. The automobile industry in Japan never took off because Ford, on account of its size and reach, was able to produce cars cheaply in Japan. The world never knew cars by the name of Toyota and Honda.

Atari

Atari has retrospectively agreed to make computers for Steve Jobs and Steve Wozniak and overturned an informal decision they took to not have anything to do with them when they apparently asked for funding and even agreed to let them work only for a salary in return for making their computers. Atari is sitting on a market capitalisation of over US$400 billion today.

Apple continues to be best known as a fruit.

Western Union

Western Union, which, then, had a monopoly on the telegraph, the world’s most advanced communication technology at that time, has retrospectively retracted the note which its President William Orton wrote to Alexander Graham Bell in 1876, which said: “Mr. Bell, after careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion that it has no commercial possibilities… What use could this company make of an electrical toy?”

And replaced it with: “Mr. Bell, after careful consideration of your invention, we are pleased to offer you $100,000, as asked for, to own the patent for this new electrical toy?”

The electrical toy, of course, was the telephone.

Rejected by Western Union, Alexander Graham Bell kept the patent and started his own company. In a few decades his telephone company, “renamed American Telephone and Telegraph (AT&T), had become the largest corporation in America … The Bell patent – offered to Orton for a measly $100,000 – became the single most valuable patent in history.”

However, as a result of this wise retrospective decision of Western Union, Alexander Graham Bell could never realise the wealth his invention created for others, most particularly Western Union.

Lehman Brothers, Enron, et al

Lehman Brothers have retrospectively changed the decision they took at a Board Meeting in 2002 to actively participate in the housing market through acquisition of mortgage lenders, particularly ones engaged in subprime lending, like Alt-A Loans. The Board, instead, decided to “stick to the knitting” and continue with their core businesses (though there was dispute as to what their core business, or even their business, like any Investment Bank, was). It was a hotly debated and acrimonious battle as this retrospective decision would mean that the staggering profits made between 2004 and 2007 and, more importantly, the stratospheric executive compensation and bonuses of this period, would be wiped out.

However, reason eventually won and Lehman decided to stay away from mortgage lending. Its leverage – the ratio of total assets to shareholders equity, stayed under the historical 21:1 (which had gone up to 31:1 during the subprime crisis). It continues to be a storied Investment Bank and the dream job for every aspiring Investment Banker. As a result of this retrospective strategy change, the largest bankruptcy title remains with Enron.

It is believed that their liquidators of Enron are considering retrospectively changing the accounting practices at Enron which may help them stave off the tag of the largest bankruptcy in business.

Drake

Edwin Laurentine Drake has retrospectively patented the drill he invented alongwith his blacksmith uncle, in 1859. Till then, oil drilling relied on shovels and picks. Subsequent versions of the drill have been used by many others to drill for oil and become millionaires.

And Drake, with this wise retrospective patent, avoided dying in poverty. As a result of his retrospective patenting, Drake’s descendants are now the richest family in the world. And Drake Drilling the most valuable company.

Individuals

Not only big business, even small individuals have been so impressed by this move of the Finance Minister that they are taking individual steps to improve their prospects.

A Senior Manager I know who was made redundant as a result of his department closing down, has applied for a change of role with retrospective effect to a department that did not shut down.

An old friend of mine, who is a successful medical practitioner, has retrospectively decided to forego medical education and become a property broker, in view of the immense amount of wealth that real estate has created in the last two decades.

Yet another person I know well, who went to business school with me, is retrospectively changing his consulting profile to “energy consulting” in order that he could work for Enron, the collapsed Energy major, make his pile, and get out before the collapse.

The possibilities are mind-boggling.

Other unrelated developments

Steven Spielberg’s imagination has been fired by the immense possibilities that exist. He is said to be actively considering extending the Back to the Future franchise from the paltry two sequels to a more meaningful twenty four. The Finance Minister has been appointed the creative advisor for the new series.

Coming, as it does, after a Supreme Court decision against a government tax claim on the large Telecom company, it has raised the hackles of the judiciary who see it as government effort at undermining the independence of the judiciary. The judiciary in the democratic countries of the world have joined issue with the Indian judiciary, as this could become a trailblazer for governments in other democratic countries, who may seek to reverse the impact of unfavourable court decisions by making retrospective changes in law, thereby curtailing the power of the judiciary. Judiciary and people in the judicial system, in countries where the rulers also rule the judiciary, have not joined forces with the judiciary of the democratic countries. They do not see this as government effort to curtail their power. They have none.

The Telecom company most impacted has sought opinion on whether they can back out of the deal with retrospective effect so that they can avoid paying the tax they may need to once the retrospective law change goes through.

Quake with benefits

The northern parts of India were rocked by an earthquake around 1 PM on 5th March, 2012. Almost immediately after, the event was on the news, with channels outdoing each other in bringing meaningful and informative coverage to viewers.

The Daily News channel reported :

The earthquake was felt by people. People in cities and towns across the length and breadth of the impacted area felt the earthquake. People felt the earthquake in both offices and homes. In fact, the earthquake was felt even in tea-shops and restaurants and malls. The quake lasted for ten seconds. People felt the earth shake for close to ten seconds. The shaking felt by people lasted between eight and twelve seconds in most places. Not only did it last for ten seconds inside offices and homes, even on the road it could be felt for eighth to twelve seconds. The quake was felt in Delhi and adjoining states like Haryana and Uttar Pradesh. The quake was also felt in Haryana and adjoining states like Uttar Pradesh and Delhi.

This broadcast was repeated every five minutes so that the many different messages could sink in.

The Now or Never channel reported :

People ran out of their offices. People also ran out of their homes. In fact, people ran out of wherever they were to someplace else. People in offices ran into homes. People inside homes ran onto roads. People on the road ran into offices. Not only did they shake themselves, people could also see things shaking. In offices people could see that things that were normally stationary were shaking. What finally convinced them that this was a quake was that all the old stuff inside the office, like ceiling fans, old furniture, cabinets, etc. which creak and shake in daily use, stopped creaking and shaking all of a sudden. The emergency preparedness of the local government, last tested less than two weeks back, should be lauded. People ran here and there as soon as the earthquake struck.

In keeping with the information that was being provided at different levels of detail, and in view of the informative nature of the content, this broadcast was repeated every three minutes.

In a remarkable demonstration of maturity and restraint, religious leaders of different faiths, in places where the quake caused destruction and damage, otherwise always at loggerheads, spoke in one voice and blamed it on people’s lack of reverence for God and their habits of wanton greed and excess. According to them this act of God had been unleashed to punish them that even they, leaders of faith with a hotline to God, were powerless to control.

In places where the temblor did not cause any damage, religious leaders of different faiths have claimed that death and destruction had been averted because of the proactive measures they undertook and their invocation of divine help. As leaders of different faiths have claimed credit for the non-destruction to their own measures, communal riots have broken out between followers of different faiths in support of their leaders’ claims. The death and destruction toll in these places is far higher than any place damaged by the earthquake.

In a news conference called by The Fictitious Company Ltd., their spokesperson has lauded the vision and decision-making skills of their CEO who has managed to save hundreds of lives of employees and millions in damage to company property.

This momentous saving has been achieved by not deciding to move the headquarters of the company, where a large number of people work, from Mumbai to Bahadurgarh, a small dusty town in the state of Haryana where the epicentre of the temblor lay and where damage has been caused by the quake, almost a thousand miles away from the glitz and glamour of Mumbai, the country’s financial services and movie-making capital.

This large saving assumes special significance in view of the fact that it has been realised despite the move to shift to Bahadurgarh never ever having been considered by The Fictitious Co. Ltd.

The Fictitious Company has also announced the relocation from Bahadurgarh of the factory that was never going to be set-up there. The company has also promised shareholders to not take even more decisions, considering that not deciding to move to Bahadurgarh has been such a game-changer.

Other companies, including competitors, have complimented The Fictitious Co. on their achievement and far-sightedness. In fact, after this announcement, many other companies have also discovered their own savings in the form of the factory they did not locate in Bahadurgarh, the Research Centre they located elsewhere, and the Board meeting that was held overseas.

In a late development, it is learnt that the Chamber of Commerce and Industry has planned a celebration on account of the tremendous savings that have accrued to business on account of not having moved anything to Bahadurgarh. The CEO of The Fictitious Company Ltd. will be felicitated at this function for his contribution to industry. The Chamber is said to be considering setting up a high-powered special sub-group with responsibility for petitioning and invoking the wrath of the Gods more often so that more such catastrophic events may be unleashed leading to improvement in companies’ financial position.