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The Bigger Picture

Events that don't involve us directly can indirectly affect our lives, making the bigger picture more relevant

In all the time that I've been writing this column in this newspaper, I don't remember having ever spoken about anything except investments. However, as I sit down to write this piece on the morning of August 30th, I have to confess that investing is far from my mind. All thoughts of telling readers about how to earn more (or lose less) from their investments have been pushed from my mind by two events in Eastern India-the Bihar floods and the Singur agitation. At first sight the two are unrelated. While the Singur agitation is clearly an important business issue, the suffering of the masses of people caught in the Bihar floods appear to be quite unrelated. However, I believe that they both point in the same direction, that of balanced and equitable growth. By all apparent signs, the visible economic disparity in our country has increased sharply.

Politicians in this country have been talk about this stuff routinely. However, most prospering urbanites pay as little as attention to it as they do to anything else that the politicians say. I believe that all of us who are part of the so-called 'India Shining' phenomena need to pay some attention to this.

Let's take Singur first. I largely agree with the mainstream view that the problem has been exacerbated by the politicians trying to gain political mileage. However, I believe that Mamata Banerjee and company do have a point. In our country, whenever the land-use of agricultural land is changed to accommodate industries or other types of development, the government always acts as a sort of a mix of a property shark and a colonial power. Essentially, value lying locked up in a piece of land is unlocked in manner that the gains accrue to the developer/industrialist and their benefactors. The original owner of the land gets a pittance.

From the point of view of the farmer whose land is being taken away, this is little better than legalised land-grabbing. As development activities (and real-estate prices) have picked up across the country, this story has been repeated on a much larger scale. A few weeks ago, there was a farmer's agitation in Greater Noida, a suburb of Delhi that lies in UP. Here, land was acquired from farmers for some public infrastructure projects in 2006. Now, those projects have been shelved but the land is still owned by the government. Had the farmers been allowed to sell their land privately, they would have realised prices that were several times higher than what the government paid them. The SEZ mess too is a symptom of the same disease.

The Bihar story is different, yet symptomatic of the same disease. Some two million of our countrymen are suffering an unprecedented calamity. However, it has taken the shining India about two weeks to give just a little bit of attention to what's happening. We've become so fond of including ourselves in the same category as China, but when the earthquake hit that country in May, their Prime Minister had left for the quake-struck region within 90 minutes. Such was the sense of urgency to help people that by the middle of August, despite the preoccupation with the Olympics, China had deployed more than a million units of temporary housing.

Believe me, while these issues will not have any affect on how much money you'll make on the markets next month, they will have a great bearing on how well your investments do in ten years.