Financial Wisdom – By Kalidas

Radical Solution for Credit Crisis from Kalidas

India’s ON and OFF Policy

with 21 comments

In today’s uncertain world, a few countries stand out on their own, of which India is one. There is everything one can think of finding – higher education, high savings rate, less papers or derivatives, huge population, efficient stock market, several millions of rich middle class wage earners, less debt, huge savings in real wealth like Gold and Silver, classy high tech manpower, world’s best design source, above average entrepreneurs, great creative and entertaining industry, least gambling resources, and a great democracy.

And yet, this giant dinosaur has been unable to find a single genuine pace bowler for its Cricket team, enough players to win the Olympic gold medals, really creative Prime Minister, Finance Minister, and Chief Operating Officers for SEBI (equivalent of SEC), and RBI (equivalent of FED in USA) from its thriving millions of population running across the country in every street and corner, sweating, smothering, bothering and yet smiling amid all odds against its existence.
What is wrong with this country? Its culture, Nay; Collectivism, partly; education, Nay; poverty, Nay; democracy, Nay; Contentment, yeah and lack of Killing Spirit – certainly Yes. Indians are notorious for self egoism, false patriotism and above all “eternal contentment” for whatever it has. Its desire for yearning is least. “Why do we need this? It is enough. We are happy with what we have” And that sets it apart from the rest of the dynamic western world.


India’s Info tech Glory and Visionary Jawaharlal Nehru

Indians have the extremely bad habit of not giving the credit where it is due. Take the example of its InfoTech Industry – now on the lips of every technocrat all around the world. It’s main creator and originator is forgotten as “Cause” and the “Result” is worshipped like a demi-god.

The seeds of high end Info tech were sawn by its first and most charming Prime Minister, Jawaharlal Nehru, a great visionary. With extremely limited sources at his command in early 50s, he maneuvered to obtain the great alliance with prestigious MIT in the United States, to set up 4 finest technical institutes – Indian Institute of Technology. And in remaining 60 years, the successive governments with almost 50 times monetary and ample human resources at their command could set up only 3 such institutes. He made the technical and engineering education so cheap and affordable, that India could produce talents at the cheapest cost.

His investment by way of subsidies in education, basic industries and oil refineries returned 100 times return in recent years. What he spent in millions on IIT brought in billions of dollars in Forex through thriving Info Tech industries. Even this author got 4 degrees for just Rs 4000 or $80 in 4 years.

When the British left India in 1947, they built 9 platforms at Bombay VT railway station when India’s population stood at 300 million; whereas in next 60 years, the successive Indian governments could build only 4 platforms at Bombay’s Church gate railway station with over 1 billion population! It is said that India is always on “Auto Pilot”. No one knows how it runs – it just walks in the wilderness.

Nehru dynasty gave leadership in the form of Jawaharlal Nehru itself, then Mrs. Indira Gandhi, Rajeev Gandhi (Son of Indira Gandhi) and now Mrs. Sonia Gandhi, head of ruling Congress party, and wife of Mrs. Gandhi’s elder son Rajeev Gandhi.

Even the Kennedy dynasty nowhere stands near the Nehru dynasty. The greatest contribution that Mrs. Indira Gandhi made was the green revolution and killing of all strength of pre-1947 Pakistan into two separate nations – Pakistan and Bangladesh.

And yet, all credits are given today to the likes of BJP Leader Vajpayee, the charismatic Prime Minister who merely exploded the Nuclear Bomb (It was built only with the vision of Nehru and Mrs. Indira Gandhi), Man Mohan Singh, the Prime Minister and P Chidambaram, the Finance Minister today for doing nothing substantially positive and lots of negative.

India has come a long way since 1950. Knowledge is no longer a power of a few. However, the kind of progress expected has not been achieved by India, and in fact, it is on the verge of losing major advantage if nothing is done now.

India’s disastrous policy measures in past, its effects and how that can be reversed with ease?

India’s de facto Central Bank – Reserve Bank of India – similar to FED in USA or Bank of England in UK, is a most revered institution in India. So also, Security and Exchange Board of India known as SEBI, equivalent of SEC in other countries, and stock exchanges like Bombay Stock Exchange – BSE and National Stock Exchange (NSE). They are given the status of demi-god by the admiring and ignorant semi educated urban class in India. The result is that these institutions, with possible exception of NSE in some cases, have become monolithic and inefficient organizations, with RBI leading the pack.

The officials of these bodies do not have experience in global money market, how certain powers manipulate the word market with ease, and therefore are very dogmatic in their views. They blindly follow the theories and practices of western and eastern world. As result, the economic, monetary and social policies fell far short of desired goals in last 50 years.

They do not realize that if certain standards with reference to which their policies are tailored are not yielding desired result, the standard itself must be wrong. As result, the measures initiated to adjust the imbalance often fail. Let us see the measures that failed India:

Belief, Policy Measures, Expectations and Final Result with Causes

Actuator: Finance Ministry, Reserve Bank of India, SEBI

Policy: Exchange Rate

BELIEF & PARADOX (In Blue prints)

1. Weaker Rupee helps exports and earns FOREX

2. Domestic Industries are protected against excessive and expensive imports

3. Jobs in domestic industries are protected and also promoted

4. Foreign Debt reduces due to FOREX earnings out of exports


Weaken Rupee by all means

1. RBI: Reduce NRE deposit rates – pay them much less than domestic deposit rates (6% less)

Even if NRI came to the country’s rescue in 1992 FOREX crisis, when India had to pledge Gold to Bank of England. NRI were treated like disposable towel

2. RBI: Do not let FII to buy Rupee from the market. Let them come to RBI directly to reward them with much higher rupee rate as enticement not to go to the market.

Even if it costs national exchequer hundreds of crores of rupees

3. FM, RBI: Sterilize any rise in the market by buying back dollar against rupee

Even at the cost of higher money supply leading to inflation

4. FM, RBI: Allow Indian Businessmen to invest overseas so that they buy dollars and sell rupee to cause it weaker and weaker.

While Foreign Investors were keen to invest in India, India was telling its businessmen NOT to invest in India but invest overseas, as though India had become one of the richest countries in the world. Even China after receiving almost $500 billion never thought of stopping the inward money flow and permitted Chinese to invest overseas

5. FM, RBI: Allow Indian citizens to remit overseas US$ 100,000 without RBI approval, so that pressure on rupee is reduced by letting them sell rupee and buy dollars.

While permission was not given to individual foreign investor to invest into Indian stock market as logical step further to widen the Indian markets or for direct investment, domestic Indians were asked to invest overseas, even when India was facing dearth of capital for building power plants, ports, Airports, national artery roads, sewerage, water filtration plants to reach every nook and corner of the country

6. SEBI, RBI: They introduced P-Note measures to scare away the foreign investors from India so that upward pressure on rupee is diminished.

7. SEBI: introduced arbitrary circuit breakers for market and individual stocks in the name of maintaining order which again scared the foreign investors who were faced with illiquidity in the invested counters. Some stocks had 5, 10, 15 or 20% up or down circuits that were fixed arbitrarily.

SEBI forgot main principle of free market that every investor has right to invest or disinvest in any stock at any time without hindrance. Even in market crash such as now, and in January 2008, the foreign and domestic investors were not able to sell the stocks at market because there was no market.

8. FM, RBI, SEBI: prohibited short selling on selected counters to arrest the market fall

If there were no restrictions on Long Buying of any stock, that lead to huge rise in Sensex from 2800 to 21000 (over 700%) in 5 years, why should there be ban on Short Selling of stocks or index?

Dogmas, False Policies and Misplaced Priorities

I have said often that if certain policies do not work with reference to standard for long time, there is something wrong with the standard itself. Such erroneous standard has to be abandoned. However, most of the policy makers and economists have been groomed in high end business schools that rely on outdated textbooks. These guys are not wise men but guys, who never worked on the front line, gained first hand experience, always sat behind the back bench, followed the books in full literary sense, and almost forgot that they too have common sense that was distributed by the God equally regardless of class, religion or nationality.

Why Rupee should be allowed to appreciate?

The weaker rupee policy did not work for 60 years, and yet the Prime Ministers, Finance Ministers, Reserve Bank of India’ Governors, followed the same policy 247365 or 24 hours a day, 7 days a week and 365 days a year for over 60 years. Rupee was devalued from Rs 4/$ to Rs 50/$ today with no tangible result.

Currency is an Ambassador of a Nation – it has to be strong

Currency is the first sign of strength of any country. Currency is a child of the nation by which a nation is recognized, same way the parents are recognized by their own children. Ask your self – Do you want strong children or weak children? You always say my son is this; my son is that, my daughter did well here; my children became engineer, doctor or MBA who will get us decent life from their earnings.

And what the same guys are doing while in charge of the country? They want their currency Rupee weak, so that it earns less, expends more, exports undersells country’s assets, imports overpays for the good, and the external debt soars only because of depreciation of the currency. These smart guys in RBI, SEBI, Finance Ministry and Prime Minister’s office know nothing, absolutely nothing. They are monkeys imitating blindly the western world, who want your national currency weaker so that they can buy cheaper from you and keep their inflation in check.

Weaker Rupee may help Exports, what about Imports?

Oh no, it will hurt exports! Really? What about imports? Are you not overpaying for the gigantic oil bill. Are you not overpaying for debt servicing? If Rupee is at Rs 45 and foreign debt is $100 billion, the national external debt is Rs 450,000 crores. If the rupee goes to Rs 39 as it did, the national debt reduces to Rs 390,000 crores. If rupee was allowed onward journey, it would have gone to Rs 26, and in that case, national debt would have come down to Rs 260,000 crores. You therefore saved Rs 190,000 crores just by letting the Rupee getting stronger.

And I do not say that manipulate rupee to get stronger (the way US does for dollar). What I want to say is that let it find its own level. Do not intervene when there is natural tendency to get stronger. Do not sterilize its rise. The sterilization operation is antibiotic. Continued practice of sterilization will kill its natural power to grow and get stronger. It is more like a person not wanting a child uses condom or birth control pill to sterilize the fertility for over 10 years. finds difficult to have child when he wants to, because the body has become immune to its natural power to produce. Treat economy like a body, and RBI’s sterilization and SEBI’s P-Note measures like birth control pills, and you will understand complex economics in a flash.

A person in a gym uses all equipments and tools to make every part of his muscle beautifully contoured and in shape. He then takes in healthy food, without which entire body will not respond to various form of physical exercise. Consider body as economy, policy measures as various tools for exercise and Rupee as lifeline food. If the food is weak or debilitating, the whole body is destroyed. It is a job of Finance Minister to imitate that practice to make every section of the economy well contoured and strong. The currency policy should be conceived and directed as suitable to the national needs, not international or IMF demand.

How External Debt gets reduced by Stronger Rupee?

If you want to earn Rs 190,000 crores by way of FOREX earnings out of exports, and if the export margin is 10%, the exports have to be additional 1,900,000 crores, provided none of the debt going bad. Further, if rupee had gone higher, Government could have reduced the external debt by simply selling rupee, buying dollars and liquidating the debt say, $ 15 billions.

False Praise leads to Wholesale Destruction

Often the names of financial officials in the country were mentioned on the top covers of magazines like Forbes, Fortune, International Banker, IFR, IMF Review etc. Whenever their names appear on such magazines, take for granted that they are least qualified for that post. Those who do not get proper jobs in their own country lend up at world Bank and IMF, where decisions were never taken and such posts were official retirement with full pay every month. It is a warehouse of inefficient. That resume however works in India.

India is a country that believes in enormous adulation. Gods, Goddesses, Gurus, Cricketers, Hollywood actors, high court judges, politicians and officials in RBI, SEBI, NSE and BSE are all elevated to the extreme status. Gods and Goddesses never listen, Gurus always need bhakta jan to wash their feet and drink that holy water, Cricketers and Actors are easy pass time, and inefficient judges in various courts who have been caging justice for over 20 years, take 3 times vacation, larger than your own children, never deliver justice in time prompting citizens to approach for alternative judiciary of Mafias or Bhais to give them “Supari”, politicians like Advani go on blurting about building Ram Temple, instead of building mass housing for the poor Indians, and officials in RBI go on having “condom sex” with economy by sterilizing operation, and officials in SEBI go on inventing rules like P-Notes how to drive out the Foreign Investors. When they were coming, they were asking why you are coming, and when they are going, they are asking why they are leaving. What the hell do you want, you fickle minded babus?

Indians never saw Lower Oil Prices at Rs 10/ltr when Oil fell all time low to $10/brl

Due to consistent weaker rupee, the petrol prices always rose like mercury in thermometer. When the oil fell all time low to $10 per barrel or Rs 400 per 159 liters or Rs 2.33 per liter, Indian never saw petrol or diesel prices falling to Rs 10 per liter. This is what the misguided Rupee policy did for Indian consumers

Currency (Rupee) Never Remain at Same Level – like Water, it finds its own level

The currency movement is always dynamic. The sum total of entire economy is represented by currency. If it does not go down, it goes up; and if it does not go up, it goes down.

During BJP administration, Rupee was allowed to appreciate to Rs 43 from Rs 48. It continued to Rs 39 when the officials in RBI and Finance Ministry were alarmed. SEBI started talking about Rupee when it was none of its business. These are fiscal and monetary matters, not stock market that is the domain of RBI and Finance Ministry. They invented P-Note related measures that were the harbinger of downward movement of Rupee. It just dropped from Rs 39 to Rs 50 yesterday, when Indian economy was supposed to be having highest growth in the world, Forex reserve at over $300 billions, and every sector of the economy was on four cylinders.

These wise guys applied screeching brake with the result that money simply evaporated, stock markets crashed, rupee crashed, interest rates rose, inflation rose to over 13%, oil subsidies went through the roof, and many other countless collateral damage such as recession, lower home prices, higher food prices, and what not.

If Islamic punishment of stoning to death was allowed in India, the officials in finance Ministry, Reserve Bank of India and SEBI fully deserved that capital punishment. They destroyed vibrant economy; they dealt death blow to the aspirations of Indian people, they sank India into deeper external debt (by additional at least Rs 60,000 crores), they caused Oil bill to rise by Rs 16000 crores due to depreciation effect of the Rupee, they caused first time home owners life miserable by increasing their EMI by over 6% per year or Rs 3000 per month per Rs 100,000 of mortgage loan, they raised the borrowing cost of almost all business enterprises by minimum 3% , cost of energy rose by 20%, and only the life of human (Made in India) became cheaper.

Due to single most reason – Weaker Rupee

(To be continued further that will be appended here. Full article will then be converted into PDF file for download)

Kalidas, Hong Kong

Ref: 08-010 – India’s ON and OFF policy

Note: Due to problem with the WordPress software, the article can not be properly formatted earlier. It has been withdrawn and substituted with this one. The comments associated with the previous one may not be available here, but I will try to put them if possible.


21 Responses

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  1. If we ever make Rupee stronger then Dollar or Euro, guess what will happen to so called IT super power India? The outsourcing Jobs will be killed immediately..

    Even if Indians in this case might work @ a less salary, the cost of supplying jobs to India will still be high..

    The RBI, a cliched name, is unable to make strong decisions, its just caught in two minds.

    A strong rupee is good when you are a tourist traveling and purchasing luxury products..

    For the rest of us, its something other..

    Kalidas Replies to (ref: 0810-028 -Friday, October 24, 2008)
    Again same mistake. It did not work for 60 years. 50% of India’s foreign debt is due to rising servicing cost over the last 6 decades.

    Service cost is always relative, not absolute. When I was in nationalized bank as officer, I was getting Rs 2500 per month whereas same grade officers are getting Rs 25,000 – Have the Bank closed down or became more profitable?

    Make Rupee from 50 to 100 and you will see India divided into 28 independent states. If there is no alternative source, the buyer will stick to the seller – at the most he will bargain – but will not run away.

    Do you give your clothes to Bhaiyya? He might have been charging 50 paise a few years ago, and not perhaps Rs 5 or 10. Have you cancelled his contract. of course , NO

    Harshad Joshi

    October 26, 2008 at 1:01 am

  2. Kalidasji,

    the previous article(Part 1) is not available any more. Could you please check the link? Can you please respond to my query in Part 1 too.

    Kalidas Replies – It is same article. Old one was withdrawn due to formating problem which left many blank spaces. Even after working for 4 hours I could not fix it, so I deleted it and substituted with present one.

    Hari, San Jose, CA


    October 26, 2008 at 10:47 am

  3. I don’t know why many people fail to understand that the low cost advantage is transient and the ultimate everything will come to quality. India will not able to retain its cost advantage by next decade only by offering low cost (due to week rupee) and since many nations will come up seeking the same space.

    If Indian IT has to remain competitively in future, forget the low rupee will come to rescue. It has to become globally integrated, move into more higher end consulting rather than low cost offshore services. What we are doing in IT today mainly is low end consulting work which we need to move away, for the betterment of the companies, for the people involved in those companies. I have seen many bright people working in these jobs, ruining their brains which they could have used more productively somewhere else rather than some offshore project.

    Strong rupee will also help us get best technology at best price from abroad, which then can be mass produced in indian prices and advantage and then sold across the world.


    October 26, 2008 at 1:09 pm

  4. Thanks for another amazing article.

    Best Regards,


    October 26, 2008 at 3:14 pm

  5. Dear Kalidas Sir, Wishing you happy deepavali and as months pass by let the storm settle and gentle breeze flow in to stock market.
    Thanks and regards
    Ravi, Chennai, India


    October 26, 2008 at 7:02 pm

  6. When USD inflows heavily from FII, RBI buys with full strength and not allow to appreciate INR below 42. Now FII get out from our country with USD, RBI allows free fall of INR by selling USD around 50. Is RBI making profit? If yes, where the profit be adjusted, in printing of INR? or with fiscal deficit?


    October 26, 2008 at 8:56 pm

  7. Dear Sir,
    Wish you Samrudh Dhanterash &Subh Deewali 2008.

    I have read a news that RBI has recently Introduced almost 80bln Rupees into market to stabilize and Strength Rupee. That’s why sensex has corrected 10500-8700 within week but rupee didn’t depreciate much. Perhaps they have understood the meaning of STRONG RUPEE.
    So, Where do you see Rupee within one year?

    Kalidas Replies to Jayesh(ref: 0810-031 -Monday, October 27, 2008)
    Disagreed. It merely weakens the Rupee but eases the money supply in the market to reduce the interest rate. The correct operation is to buy back the rupee from the market and deliver the dollars to FII. This will help keeping the same level of rupee versus dollar.

    Further, rupee has weakened due to another factor overseas. It is known as paper trading in the form of NDF or Non Deliverable Forwards under which short seller of rupee does not have to deliver the currency but settle the difference in cash in US $ equivalent.

    This is resorted to by top US banks (and some French banks too earlier) under the authorization from the US administration. This is why all world currencies are going down. The GOI should de legalize such operations overseas and must cancel the licence of those banks who indulge into such trading. This is a crime against the state, punishable with death.


    October 27, 2008 at 2:10 am

  8. I agree with U ,Stronger rupee is better for external debt and crude import. FDI will increase if currency do not depreciate .Such simple things why RBI and Finance ministry do not understand Or they may have their own interest
    India has big population it should strenghten internal economy rather depending on exports

    ketan Anandpara

    October 27, 2008 at 11:06 am

  9. Should our (Indian) financial policy makers not consider converting 60-70% of Indian Forex reserves from euro-dollars to physical gold? This should reduce India’s exposure to the dollar rate fluctuations ($ is bound to fall) & holdings in non-legal tender, while at the same time resulting in pushing the Rupee up, (reducing India’s fiscal deficit) & eventually increase India’s Forex reserves when Gold appreciates….

    Is the formation of an Indian sovereign fund necessary for this or can the RBI take this step by itself (if it has to)?

    Ashish Dandekar, Doha, Qatar

    Kalidas Replies to Dandekar (ref: 0810-033 -Monday, October 27, 2008)
    No, It should keep only 20% in Gold. rest it can transfer to respective countries’s official treasury bonds, not in respective Euro currencies. The RBI may divert to rich commodity currencies like Aussie Dollar, South African Rand (especially in Zero coupon bonds), Canadian dollar, Russian Ruble, Norwegian Kronor, UAE Dinar, and British Pound. Small portion in Euro

    The reason is that India will be a big buyer of commodities, coal from commodity producing countries. Whenever India buys commodity from those country, it may settle in their currency without any Forex conversion. this way almost 0.25% charges will be saved.

    RBI should make two way market for GOLD. Indians own world’s 35% of floating Gold reserves. If RBI makes active two way market for Gold, another avenue will open for the investors to buy Gold as investment product rather than jewellery product. When millions of Indian own gold, they should be given proper outlet for them to buy or sell without any hindrance. When Indians buy jewellery gold, they lose 20% in making charges and “kasar”. Even Corporate will buy gold. Make gain in gold beyond 12 months of holding as TAX FREE. They allow stocks holding over 12 months tax free then why not Gold and Silver which are real currency?

    Ashish Dandekar

    October 27, 2008 at 1:50 pm

  10. I am an’Aam Adami’ and speak as such. My understanding is that Rupee exchange rate vis a vis other currencies is a function of the extent of trade in that currency. The rupee is therefore linked to a basket of currencies and a weight is assigned for each, based on the extent of trade. With every appreciation of rupee,where as the domestic balance sheet may undoubtedly look good due to reflection of external debts and import costs shown in rupee terms appearing less daunting, the fact is, we must have hard currency reserves to support such debts/imports etc. What India has is about 300 billion in reserves, accumulated mostly through FIIs /NRI inflows. The net accumulation arising from trade and commerce(i.e.Import and Export) is still negative-meaning we import much larger than what we export-the deficit being made up through above inflows- Under these circumstances, if you strengthen the rupee indiscriminately, there is a possibility of India becoming a defaulter in payment for its imports/debts in hard currency and will have to manage imports like Nigeria or such other countries are doing-i.e. pay for imports when sufficient hard currency accumulates-which could cause much bigger problems.Some domestic pain is acceptable if it prevents external default and its undesirable consequences. This perhaps explains the rationale behind having a weaker rupee all along in the past.However, the position of our reserves have improved a great deal in the immediate few years(although not in trade account), so the Rs also has been appreciating-readers may recall it went down to 39 just about a year ago. Of course, what is happening to Rs rate now is some what an aberration, due to FIIs pulling out their funds massively in Dollars. This is an unnatural situation, but in sync. with the general global trend -GBP, Euro,Jap Yen etc etc.The Dollar situation in fact is a paradox-despite massive pounding that US received in the present financial crisis-a weak economy with predictable zero growth,but still the dollar is soaring. Leave asides this misnomer,Rs would have most certainly appreciated and find its own level,perhaps 39 or below as about a year ago.In my opinion, having a managed currency rate system is good for the economy in general especially for poor countries such as us with mostly low tech exports(barring IT,perhaps). In this context examples of Malaysia and Hong Kong-comes to mind. Readers may recall that these two economies were the only ones which could creditably wither the Asian Financial Tsunami of 2000. Even though, the Govts of these countries came in for severe criticism then for the interventionist approach, today their strategy has been adopted by the Western Countries themselves!!

    Cyber Explorer

    October 27, 2008 at 4:32 pm

  11. Hi Kalidasji,

    Thnx a lot for your valuable thoughts on this and I agree with you. What I feel is the INR should be allowed to find its true value. It shud not be artificially appreciated or depreciated.Let it find its original price.The weaker rupee only helps Exporters and IT/Services industry, but stronger rupee helps Importers and the whole economy.For internal growth of a country, a stronger currency is he best option.I have a little off-beat question posted below.

    Ojal, Udaipur, INDIA

    Ojal Suthar

    October 28, 2008 at 2:15 am

  12. Hi Kalidasji,

    This may sound a little off-beat question, but its vary important to me, a life-changing decision needs to be made now.As I know only U who can guide me in this, so plz help me.

    Am a Computer Engineer and at present am working as Software Engineer with a Pvt Ltd company in Udaipur. I was always interested in Financial Sector and I have sound knowledge of that too(thnx to U), so I appeared for Bank P.O.(Probationary Officer) Exams and am selected in Federal Bank and State Bank of India. I need to join them next month.My priority is SBI.What I wanted to know is should I join SBI or not? Should I leave the IT line and move to Financial Sector? Will it be right time to switch in this financial turmoil, or I should save what I have and continue the same? Am currently 24yrs old.

    As banking job is transferable, my mom-dad and wife will have to go back to village, if I go out of station to service as Bank P.O..My dad is officer in RSRTC (Rajasthan Roadways), so he cant come along with me. As you mentioned in your article I too keep my head busted into programming from 10am-7pm and can’t do any creative things right now. Being a officer, I can live my dreams. Finally I wanna do business,am doing job just to earn initial capital to start my business. But my 2-3 yrs of IT experience will go in vain if later I want to join IT company again, say after 3-4 yrs…

    Expecting a quick positive reply.

    Regards, Ojal, Udaipur, INDIA

    Kalidas Replies to Ozal(ref: 0810-035 -Monday, October 28, 2008)
    An easy yet difficult question. There are two aspects:

    Career in Bank vs Technical career as Software EngineerI give you my example. I was also a Chemistry-Physics graduate, very good at Chemistry. My career was spoilt due to leakage of papers by a principal of a college due to which none of the student in that center got over 55% marks. My ambition to become Chemical Engineer was dashed. I got a job in major group’s Caustic Soda factory at tender age of 19, but again the life at the plant was very difficult.

    Then I got into a nationalized Bank, did pass banking diploma, became a lawyer and also became a Cost Accountant (not completed, only one group remained). I excelled in finance, became a stockbroker and did become successful.

    And yet, the only thought that is devouring me many times, that I was in wrong field than originally groomed for. I can not pardon myself for changing the career from Science to Commerce, even if it got me more money and success.

    I still remember Production Engineer Mr. Rajan’s remark when I submitted my resignation letter – “Mr. Selarka, you are doing terrible mistake. You are setting the sun yourself when it is about to rise. This will be the most unpardonable act. A person like you deserve to be in place like ours. You will shine here like no other place elsewhere”

    I have impressed him that much in interview and following just 2 months of my work. I was given Plant manual on very first day when others from IIT were given only after 1 or 2 years. My impression during interview on the Works Manager, Mr. R Ramadurai, of Standard Chemical Works of Mafatlal Group, was indelible. I was appointed even before my final B.Sc result was out.

    And he was right. I have not been able to pardon myself. However, the destiny as it had it, I am what I am today, known for stocks than science; but it was science that got me the ability to analyze the situation of whatever kind.

    Then, another incident. When I was in Hong Kong and left that bank in a dispute, I was having only HK$ 1500 (equal to Rs 2000 at that time) in my pocket, and I with my wife and two children was on the run. I got the job in very first walk in interview at American stockbroker with variable income. But I said to myself, come what may, I will stay with my family in good and bad days. I would not send them back to India and keep myself in Hong Kong. That was my best decision to date.

    Now, your situation is similar to what I faced in my early days (Age 36). Now Part II, a difficult advice to a young person like you:

    Well, Bank job is easy as well as difficult (if you take initiative). One becomes subdued if he does not assert himself – I used to – so I got recognized and was finally selected for Hong Kong. Still, my best came out when I joined the American stock brokerage firm where I got promotion in 11 months as Assistant General Manager against my Assistant Manager’s post after 19 years in previous employment in nationalized bank. (Indian Overseas Bank)

    Your education will not be useful to you if you work in a bank. May be now, as software engineer, you may not be making much; but there comes a time for every person in technical job when his efforts pays off magnificently. Secondly, staying away from family, especially from wife, is a difficult process at such tender age of 24. It is a punishment to you as well as your wife, who just left her parents home to come to your family, only to find you going away. Given a choice to me, I would again stay with my wife and children than stay away for long.

    Listen to Hindi song from Teesri Kasam, sung by Mukesh, “Sajanwa bairi ho gaye hamaare”. It describes the real feeling of a woman whose husband goes abroad, leaving her behind in India. It evokes so much of etho, that tears still flow down my eyes whenever I listen to it especially at night.

    Money is not everything – they come and go. If you are dynamic and diligent, as you are as evident from your post, you will do well in your profession as Software Engineer. Search for more avenues to make more money from your current profession for which you were groomed for over 4 years in a college. Sit down in a corner of a room at night and review all that was done, the things the should have been done but not done, and things that were done that should not have been done. Take a pledge that the next days that are withing your control, you will handle them as well as they should be. The opportunities are always chasing you, but a human never looks into the rear mirror who is following him.

    Although, I never learnt Computer in my days, I learnt it only by practice, and I do far better than other professionals in presentation and style.

    Yes, finance is an exciting field, but the field of Science – it is just exhilarating and satisfying. And if you wanna do business, the software consulting is the one where you need brain, not capital. If money is a priority for you, you may take up a bank job for a few years, and do the side business in software consultancy. However, please note that the Bank Job, especially in state owned banks, make a person a diffused firecracker.

    However, consider your preferences from my experience, and see where you are fitted most.

    Ojal Suthar

    October 28, 2008 at 2:30 am

  13. Dear Kalidas Sir,

    If USA is manipulating the currency market all around the world, then what will happen to countries other than usa. Is it something like they are trying to create problems in other countries and collapse them. If they succeed, then our rupee will depreciate to very low levels (around 1 $ = 60 Rps), in that case what are the chances for india to grow.



    October 28, 2008 at 6:42 pm

  14. Respected Sir,
    Happy Diwali & prosperous new year to You & family
    I am reading your messages since last three years and I gained a lot from them in day to day life and in the trading also.I am down loading all your messages and keeping with me.When ever I need guidence I read them again and again.But now I have to search the messages in blog and on moneycontrol site.Though it is time consuming but your experience of the life which filters through the messages is really a guiding force for all of us. Thanks for your great guidence With best wishes.
    KD CHAHAR Pune India


    October 28, 2008 at 10:08 pm

  15. Sir, Kindly advise on aviation sector I have purchased Jet Airways 200 @Rs.335

    Kalidas Replies to kdchahar (Tuesday, October 28, 2008)
    Your entry price was not that bad, but the things turned nasty – that is called market. If the stock corrects more, buy some (50). Wait until 20/11 to 24/11. If this oil spikes up by $30 to $50 in single session, there is real possibility that the oil prices this time will stay higher, and some very large company may collapse.

    Airline stocks react inversely to oil prices. If my hunch of higher oil prices on 20/11 to 24/11 comes true, and remain at higher level in next 7 days, the Airline stocks will falter again. If you buy anything now, and are able to sell them with good profit, do that. do not flinch. You may be able to buy back later much cheaper.


    October 28, 2008 at 10:27 pm

  16. Quote “but there comes a time for every person in technical job when his efforts pays off magnificently” End Quote. So rightly said. Thank you for sharing your experience.
    Vivek, Gurgaon, India

    Vivek Dhariwal

    October 28, 2008 at 10:59 pm

  17. Dear sir/ojal,

    To me, achievement can be done only if the person interested in the job, immaterial of the job and its nature. as Mr.ojal is interested in banking , my preference is he should jump .

    Sorry for interruption….


    October 29, 2008 at 12:58 am

  18. (ref: 0810-035 – Monday, October 28, 2008)

    Thnx for taking so much pain and answering my query in detail.

    Wish you and ur family happy deepawali and joy and happiness, success and prosperity on this festival of lights.. – from me and my family.

    Regarding job in bank or continue as s/w engineer, i will decide in few days and let u know.Hope i make the right decision, as what lies ahead in future is not known to anyone.i wil discuss with my wife in detail and may take up the bank job if it is nearer to my location, so that i can stay with them every saturday&sunday.

    Also, I dont have any problem being in IT field, but being in Udaipur is a problem.Coz this city is not so IT-savvy.We just have 3-4 big companies here,among which i’m working with one.We dont have any MNCs or high paying companies,except Secure Meters Ltd.If I want to switch present company,I have 2-3options which can pay me more than my present 2.4lakh p.a..Aftr 2-3 yrs if I wanna switch again I will have 1-2options only.And then none.Thats why to live in Udaipur with my family n earn what I deserve(not what I wish,but what I deserve)I need to start my own business.

    I tried many things in past 6-10 months,but am not getting online/local projects to work from home,apart from regular job.Am a Life Insurance Advisor with TATA AIG LIFE, but from there too I get little.Coz I don’t mis-sell.I give the true knowledge to the customer and give him/her the right product, in a right way.

    Let’s see whats in store for me ahead.Am alwyz willing to work n resolve the bad things n turn them into my favor.Alwyz an optimistic.Will finalize what’s beneficial to all, and not for me alone.

    I just want a 3BHK house so that my mom-dad,grandpa-grandma,and me n my wife can live together in Udaipur.But as soon as possible,at present we are leaving in a rented house n grandpa-grandma are living alone in the village,which hurts the most.I work for that day n night.

    “These days, BAD or GOOD, will not be forever”.

    After breaking Lara’s record of highest runs, before a week, Sachin told “There were STONES thrown at me, and I turned them into MILESTONES”. This was so much motivational, I loved it a lot.

    I believe we shud do our part, to give or not to give is in Gods’ hand.So that later on, even if God doesn’t give anything, we will not regret that we din’t tried.And this takes away most of your pains.

    I hope this wasn’t boring, I wrote too many things, but I love writing and once I start, its difficult to stop myself. So a single post becomes longer and longer.Sorry for that.

    Njoy.Have a nice time ahead.

    Rgrds, Ojal, Udaipur, Rajasthan, INDIA

    Kalidas Replies
    Do not write here anything of personal nature. I will be removing your existing post also, as it detracts the readers from real issues. You may send me the email personally instead of sending comments here.

    Ojal Suthar

    October 29, 2008 at 2:51 am

  19. “India is a country that believes in enormous adulation. Gods, Goddesses, Gurus, Cricketers, Hollywood actors, high court judges, politicians and officials in RBI, SEBI, NSE and BSE are all elevated to the extreme status.”

    Seeing the comments, I can se that you are also considered as Demi-God by many blog followers!!!
    What an irony!

    0811-040 Kalidas Replies to Nikhil Bhat (Friday, November 7, 2008)
    Unfortunate, if it is so. And personally, I do not think they are treating me as demi-god. They are a bit more respectful. And you know, the respect is always commanded, never demanded.

    In fact, in my column “confused Mind and Clear Answers” I have already asked the readers and followers the following:

    “Avoid compliments and terms like Thanks, Sorry, Regret, Regards etc. or accolades. Avoid unnecessary adjectives or adverbs”

    Nikhil Bhat

    November 7, 2008 at 7:50 pm

  20. Dear Sir,
    We learn lot from you especially this last 50days (Sep-26 blog start). Before every one was in huge loss, because most of the investors put the money in bull market only. Now whoever read your posts get confidence and we are working to come out from our losses with help of yours wisdom

    After reading the blog I am not only getting financial knowledge, I also learn how to do hard work, how to interpret events, how to take the right decision, avoid impulsive investments, and understand about the value of selfless service . Nowadays if any problems come I immediately seek the solutions only.

    Sir, from you, we are not only learning share market , we are learning lots of things. In fact we know that you are expecting nothing from us. That why you told in confused mind and clear answer avoid write the compliments and thanks.

    Sir, I asked you to post confused mind clear answer in pdf format, you post it and as well as personally inform me also. How much you are caring your reader. Even for that I could not say thanks because of what you said in the confused mind.

    We are respecting and showing our love in this way only. Every reader is indebted to you. You sow a good seeds in us, now its starting to grow. Getting the right guidance is difficult for these days. We get the very right guidance and we are very fortunate.

    Let me share one of my experience, when I was reading your article in MMB, I give the article to my colleague also, he who invested around 25 lac in Mutual fund and he was getting around 30% to 40% profit at that time. One day I advised him, based on your article to redeem the mutual fund and put it in the safe investment like FD. He was mockering you and me and he said to one of my colleague that babu was blindly following Kalidas and Babu is going to loss the opportunity to earn good money. Now he is losing around 15 lac from his investments and send me mail last week that what say Kalidas is became true, late realization.

    Sir we have faith in you and we are following you and I am sure whoever follows they will succeed every aspects of life.

    Rajmohan babu , Pointe-Noire, Congo

    0811-046 Kalidas Replies to Rajmohan Babu (Monday, November 10, 2008)
    Thanks. My service is not selfless. I also earn – best wishes and blessings from the bottom of the heart of many. It is enough for me to get going.

    Confused mind…. for every month is converted into PDF file and kept in the download centre. See the folder Confused Mind..where you will get queries and answers in PDF format. It will be in raw form as it is found here – no editing or formatting.

    I show you one wonderful program called POKAT Reader which is freeware (totally free). You can read all PDF files in flip style turning pages. It is simply beautiful. You can read PDF file as if you are reading a book. wherever you want to zoom, you click it. (There is no scroll bar) and when finished click it again. Download all my articles, and if possible, you can combine them in one master file and then use this reader to read at your leisure.

    The link is

    Just visit that site and download it. The link is

    Rajmohan babu

    November 9, 2008 at 2:28 am

  21. Thank you Sir,

    I downloaded it, its a nice program, to read in book format is very nice.
    The program available in

    Rajmohan babu, Pointe-Noire, Congo

    Rajmohan babu

    November 10, 2008 at 4:17 am

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