Sunday, March 20, 2016

Why QE will not resolve the world's economic woes

Eight years back, the US sub prime mortgage crisis led to a global financial downturn. As many western economies went into recession, their central banks resorted to all available monetary tools to revive the economy. The immediate aftermath of the crisis led to a freezing of liquidity in the global financial system. As the US federal reserve reduced interest rates to near zero and announced plans to purchase billions of dollars worth of bonds (read: announced plans to print billions of dollars of currency notes), it was the obvious countermeasure to ease the financial system and prevent an economic crash. Eight years later, the interest rate is barely above zero. The stock market has had a multi fold rise bull market in the past 7 years. However, GDP growth is abysmally low. The situation is even more alarming in Europe where the ECB has brought interest rates down to negative, but inflation and GDP growth are hovering around zero.

Economics is one of my favorite subjects, The events in the last 7 years have defied most macroeconomic concepts that I have studied. 
  • When a country reduces interest rates, its currency value decreases. Proven wrong: The USD has consistently and significantly increased in value against all currencies in the past 7 yrs.
  • When a country's debt and trade deficit increase, its currency value decreases. Proven wrong again: US govt debt levels and trade deficit is rising at unsustainable levels, yet the USD continues to grow stronger.
  • Lower energy and raw material prices will boost economic growth. Proven wrong: The crash in global commodities has led to grave concerns about global growth.
The world of global finance and macroeconomics is indeed strange. Anyway, let me come back to the topic of this post.

QE will not revive global growth
The past 7 years of QE (Quantitative Easing) has pumped trillions of dollars into the market, but resulted in very little economic growth. 3.5 Trillion dollars have been pumped into the economy resulting in GDP growth of around 8%. During the same time, the US stock market has risen by an astronomical 175%! This tells me that the money went into inflating asset prices rather than into real economic activity. Companies have been borrowing money to buy back shares, increase dividend payouts or other such measures to boost their share prices. Not a lot of money has gone into building facilities/factories, expanding capacity, and other such "real" investments in business expansion. The primary reason for this is that businesses don’t have long term confidence on the economy to make bold decisions on business investments. That is natural when an economy is recovering from a crisis. In a similar situation, countries like India, China or Russia will see the government take center stage in reviving economic activity through infrastructure and other projects. I am disappointed that this did not happen in the US. The government could’ve spent money on NASA, R&D funding, upgrading their military or improving the infrastructure. Even a developed country like the US will have opportunities for infrastructure improvements. Such activities will put money in people’s hands faster and in turn improve spending, confidence and economic growth. Perhaps political reasons constrained the government from stepping up federal spending. Basically, the government decided to rely solely on Monetary policy stimulus to pull the economy out of trouble, and refrained from using any meaningful Fiscal stimuli. To me, that is a risky move and could prove to be a costly mistake.

Future Outlook

The future outlook for the US economy is bleak. Loose monetary policy has its limitations and there is a lack of political will to engage in fiscal stimuli. The economy is set to start gently rolling down a slippery slope. 3-4 years down the line (maybe earlier), the slope will seem more like a cliff with dire consequences. Only two things can save the US economy: One: War – US engages in a major military conflict that can revive the defense and construction sectors, which will have a multiplier effect – or Two: A massive recovery in Chinese and Indian economies which can have a multiplier effect on the overall global economy and the western economies ride the wave and pull themselves out of trouble.

Frankly, the US will be much better served if the government takes up Fiscal stimulus measures to help the economy. If there is one country in the world that doesnt have to worry about increasing fiscal deficit having any impact on their credit worthiness, its the US. They will be "not smart" to lost this opportunity.

P.S.: I began writing this blog on March 10th after the ECB reduced interest rates further into negative territory. That move by ECB triggered several conversations within US about the possibility of negative interest rates by the US Fed - which is crazy! Recently I saw an article from Ben Brenanke that mentions the limitations of monetary policy and the need for fiscal measures. While my post is more generalized, Ben's article will have more specific details for those of you that are eager for such information.

Saturday, January 09, 2016

2050 Predictions: Back to the Future

As an IT professional, the buzz word that is most widely heard these days is "Digital". There is a lot of talk about fundamental changes happening in business models across industries, powered by new digital paradigms like mobile, cloud, social, etc. Indeed, there are some amazing things happening. For example, life insurers are beginning to use FitBits and medical records to adjust policy premiums. Even more drastic innovations are happening in other industries like pharma and retail. Some of these innovations were unimaginable 10 years back.

This started me thinking about how rapidly our world is changing and the kind of things I will see in my lifetime. My father could not have imagined 'cell phones' when he was my age. Today, he has Facebook and Whatsapp installed on his smartphone. So, if you are in your 30s now, be prepared to experience things in your lifetime that you cannot possibly imagine right now. In this blog, I will take a shot at predicting some things that would happen in my lifetime. Hopefully I will revisit this blog after many years - If Google and this blog still exist - to self validate and have some fun.

By 2020:
  • The world will see the next major financial crisis since the 2009 sub prime led crisis.
  • US Social Security benefits will begin to be denied/substantially reduced for folks retiring after 2030
  • Amazon Prime members can order McDonald hamburgers online
  • Congress party will lose its second consecutive general elections and the Gandhi family will finally be dislodged from its leadership
By 2030:
  • Cyber warfare will be a full scale division of any armed force - equivalent to the Army, Navy and Airforce. Major military conflicts will begin with cyber attacks first.
  • Google will be the largest defense contractor for US military
  • Cell phones will be embedded inside people's skin and we will all be a part of the Internet of Things
  • All cars in developed countries will be driverless by default
By 2040:
  • Arab states will run out of oil and their economies will be crippled. They will resemble parts of today's Africa.
  • Solar will be the single largest source of energy
  • First major military conflict between US and China
  • After almost 100 years, nuclear weapons will again be used in a military conflict
  • Life Insurance will be obsolete as genetic breakthroughs will predict health risks and life expectancy with great accuracy, making insurance unnecessary
  • Genetic engineering will enable "designer babies" to be created for people who can afford it
By 2050:
  • Man will have colonized Mars. Leading nations will have permanent bases and begin marking territories in the new "Land of Opportunities". Mars will also be a "hedge" for nations planning nuclear war.
  • Genetically engineered human beings will be created in a massive scale by the Chinese government to create a superior race
  • Majority of Earth will be free of pollution as the world will be driven by eco friendly renewables. Surroundings will generally be pristine except for poor countries.

By 2060:
  • I will be 77 years old, so I don't really care :)
If you are reading this post, let me know your thoughts on any of the above predictions or share a prediction of your own.

Friday, December 11, 2015

Why the media reaction to Trump’s Muslim remarks is not justified

Disclaimer: As of today, I do not support any candidate in this presidential race. I am not even eligible to vote in US elections as I am not its citizen. This article is not a political view on the race itself. Instead, it a perspective on the reactions of the mainstream media and public figures.

Earlier this week, Donald Trump suggested a ban on Muslims entering the US. What followed was a widespread backlash in national and international media against his remarks, which were termed “racist” and “fascist”.

A couple of days back I read the article on Washington Post and watched the videos in which Trump made these remarks. What he suggested was for a temporary ban on Muslims entering the US until the authorities could figure out how to ensure the safety of American citizens while allowing immigrant and non-immigrant travelers into the country.
First of all, what Trump is doing is political posturing in view of the electoral race. Election campaigns are filled with candidates taking extreme stances in order to occupy mediashare and mindshare. This should not be taken too seriously. If Trump were president today, he will most likely not execute such an extreme plan. 

Trump’s proposal may not sound as extreme if there were to be a serious escalation in terrorist activity on US soil. Actually, Trump’s proposal has a historical precedent. During world war II, Japanese Americans – including US citizens – were incarcerated as the US feared an attack from imperial Japan. Incarceration of US citizens just because they were of a certain ancestry is a much more extreme step. However, it was deemed a necessary step at that time when the US faced grave dangers during the war.

Basically, desperate times require desperate measures. Today, the US is not in a desperate state. No president, even Trump, will execute an order to ban Muslims. But if there were to be another 9/11 type of attack, be rest assured that at a minimum all refugees will be put on hold. Trump’s remarks were aimed to invoke the worst fears of the public and make himself seem to be the candidate with the strongest will to keep the US safe. I believe he succeeded in doing that. Despite what the mainstream media may portray, the average person would agree with Trump’s views. Not many would tell you so in public due to fear of being viewed as politically incorrect. But if you do a secret ballot, they would vote for Trump on this.

Let me clarify that I am not supporting Trump’s views (Hey, I am sharing this in public and would not want to be politically incorrect, right? :). But his views will resonate well with the average American voter. The media backlash is just an effort by editors and journalists trying to show their political correctness, but it will not deter voters. I expect to see a jump in Trump’s poll numbers following this issue. Let’s see how good my political acumen is :)

Sunday, August 26, 2012

Lacking Imagination

As a school kid, I was introduced to the world of books by my father. I used to go with him to the library and started reading. I was an avid reader of fiction. I had a fascination for novels and I enjoyed novels of Frederick Forsyth and Jeffrey Archer. The reading habit continued till my college days. I remember going to book stores in malls and staring at the collection of so many books, disappointed only by the price stickers. I imagined how I will be able to buy as many as I wish, once I got a job and started earning. All this was about 7-8 years back. Today, my habits have changed. I must have read less than 10 novels in the last 5 years. As of now, I have two unread novels lying in my house for more than 3 months. When I pick up a book, I am not sure anymore if I can complete the novel. There is a very good library near my house, with a fantastic collection of books. Yet, all the time, I go there just to pick up DVDs. I spend all my free time in front of the laptop or TV or on my wife's iPhone.

Why did all this change happen? When I think of it, I don’t think I am the only one experiencing this. I think this is a general change in human behaviour in the past decade or so. Newspapers and magazines around the world are seeing falling sales. Everyone is moving to the digital media. One can hardly see a few libraries these days – at least in India. Whatever is left, are government sponsored ones.

If you look at the list of the highest selling books of all time, there is only one book among the top 20 best sellers, which was published within the last 20 years. (source: Wikipedia) In case you were curious, that book is ‘The Da Vinci Code’. All other top sellers were published more than 20 years ago. Do these figures mean that we do not have good writers today, as compared to yesteryears? I don’t think so. What we do not have today, are good readers.

I believe the reason for this drastic drop in readership is the reducing ability of the average human mind to imagine and visualize. Digital media has taken over our senses. At first it was TV and movies. Today we are surrounded by PlayStation, Youtube, Smartphones and a variety of other digital devices. Our lives have become much more ‘visual’. These have taken over our senses and has reduced our mind’s ability to picture something on its own. Part of how someone enjoys a book is the way we can visualize the scenes described in the pages. As compared to 10 years ago, my mind today finds it more difficult to do these visualizations. My sub conscience signals me to instead insert a DVD and watch a movie, because the visualization is already there for me to consume and ingest.

Future generations of children will not be taught with text books. They will have a much reduced ability to visualize what they read in books. Everything will be taught through digital media. I know its already happening in many schools, but this will soon be mainstream.

The long term effect can be that future human species will have lesser imagination and creativity. But we may not be able to recognize it. Take for instance, today's popular Indian musicians like AR Rahman and Harris Jayaraj. Almost every song they compose is a hit. I remember in my childhood days (1990's), in an average movie, out of 5 or 6 songs, there will be 2 very good songs that become big hits. The rest will be mediocre. Today, I see that most songs in most movies sound good. There aren't many instances of a drastic drop in quality. Is it because today's music composers are better? No. Today's musicians can leverage technology to mix and reuse older compositions to 'create' new music which will please the ears. In software industry, we emphasize a lot on reusability of knowledge assets to improve productivity. Our musicians of today have mastered the art of reusing creative output. This probably sounds paradoxical, but this is what is happening.

Coming back to my point, I believe the human species will evolve into a less creative race in the future, say 200 yrs from now. This itself will not hurt us, because we'll have enough historical data (reusable components) that can be leveraged by our scientists, industrialists, politicians and artists to keep evolving. But what happens if a small subset of our population is forced to suddenly relocate to a different planet? Or if our planet experiences a catastrophe that destroys our historical records? Something like what we see in sci fi movies. Can we survive from such a setback with a mind that is half as creative as compared to the generations of Newton, Einstein, Picasso and Lincoln?

P.S.: Looking back at my post, especially the last 2 paras, I am happy that I still have some creativity left in me :)

Wednesday, June 20, 2012

Is RBI's (in)action justified?

Yesterday, on June 18th, the RBI in its mid quarter review, left key rates - including repo and CRR - unchanged. This has clearly disappointed the industry and stock markets, which were keenly expecting rate cuts to support sagging economic growth. With the country in Stagflation – a state of low economic growth and high inflation, the RBI must’ve been in a tough dilemma. The rule of thumb in economics is that lower interest rates encourage economic growth, while higher interest rates help slow down growth and thus control inflation. Having left key rates unchanged, the RBI has taken an anti-inflationary stance, rather than a pro-growth one. RBI’s statement seems to indicate that it believes that in the current scenario, interest rates will have minimal impact on reviving economic growth. RBI has sent out a clear message that it is for the government to do more to encourage growth through policy reforms.

There has been contrasting commentary in national media, both for and against RBI’s decision. The RBI (and those who support its decision to leave interest rates unchanged) has argued that the current stagnation in economic growth has little to do with high interest rates and that, reducing rates now will have little, if at all any, impact on spurring growth. It has pointed out that fiscal reforms and bold policy decisions by the government is needed to improve investor sentiment. Also, with inflation still stubbornly high and with the steep depreciation of the Rupee, RBI feels justified in not lowering interest rates.

Following are the main arguments of the RBI:

Need for fiscal reforms – Basically, RBI wants the government to take steps to reduce fiscal deficit and current account deficit. In other words, the government’s debt needs to be reduced. Today, the government is borrowing so much money, that a significant portion of all the money available with banks for lending are being lent to the government. And since the government is not making any surplus, its debt burden is getting bigger each year. So, every year a greater proportion of banks’ available credit is given to government. This is leaving banks will less money to lend to the private sector. This phenomenon is called “Crowding Out” of the private sector by the government. The argument is that, rather than reducing interest rates, the government should take steps to reduce its debt burden. This can be done by reducing subsidies and by selling state assets (disinvestment of PSUs). These steps will release more credit into the banking sector, which can then lend more to private sector industries, thus encouraging economic growth.

Addressing supply side constraints – Inflation can be driven by supply factors or by demand factors. This means that, either low supply or high demand will cause inflation. RBI feels that inflation in the current scenario is being caused more by supply side constraints. Examples include: Inefficient storage and distribution of food grains, Lack of cold storage and warehouse facilities leading to lot of wastage and losses, especially in vegetables, fruits, meat and poultry products. Sometimes the government’s MSP (minimum support price) policy leads to skewed production of food grains, where we see surplus wheat and rice production, but shortage in edible oil and pulses. Also, lack of infrastructure – roads, railroads and electricity – lead to increased cost of distribution of goods across the country. RBI feels that, if government takes steps to address these supply side constraints, the overall productivity and efficiency of the economy will increase. More goods and grains will reach the end consumer at a lower price, thus helping reduce inflation.

Minimal impact of interest rates on economic growth – The RBI states that effective bank lending rates today are slightly lower than during the 2003-08 period, when the country witnessed strong economic growth. Hence it argues that interest rates alone cannot be blamed for today’s low growth.

I am not an economist or an expert in financial matters. However, with my basic understanding of the subject and using my common sense, I present my take on this issue:

I agree to the first two arguments mentioned above. The government needs to take up fiscal reforms urgently, to ensure India’s macroeconomic health. Also, government should take policy steps to address supply side constraints. This will help bring down inflation in the long term. However, we’ve all seen that in recent years, the government has been unable to enact any major policy reforms. Without getting into the politics of the issue, let us for now accept that at this juncture, we cannot expect any big reforms from the government. We need to accept this as a fact. India’s fiscal scenario may not improve significantly at least until the next general elections, which is two years away. In this scenario, monetary policy is the only tool that can be leveraged to control the economy.

Inflation is definitely the RBI’s and the country’s biggest concern. In the past 5-6 years, price increases for the common man have been severe in food items like vegetables, poultry, food grains and fruits. This increase has been greater than the general increase in wage levels. Hence, inflation cannot be blamed purely on higher purchasing power. The problem lies in a lack of modern infrastructure for storage, transportation and distribution of food products. This systemic inefficiency causes huge loss of food production and reduced availability to the end consumer. Also, fragmented agricultural land ownership and lack of irrigation infrastructure and usage of archaic farming tools lead to less the optimum production. Hence there is a demand supply mismatch and consequently increased prices. The solution is obviously to build the required infrastructure. There is no other easy, short term solution to address the problem of food inflation. Building the required infrastructure requires a lot of money. One way to get the money is FDI. FDI in retail has been blocked due to political reasons. If we want to attract capital in agri infrastructure and core infrastructure areas, the least that can be done is lower interest rates.

If we have a loose monetary policy in this country, corporates will have greater access to capital. With more money available to them, corporates are most likely to invest in expanding their business. While this will create inflationary pressures, it will also help create more jobs. Sooner or later, cheap money will go to core infrastructure building activities. With government support, this should happen sooner. But even if government does nothing, money will eventually be deployed in building infrastructure. Again, this will create jobs. Eventually, with enough infrastructures in place, the country’s productivity levels will increase and help reduce the demand-supply gap that exists today. Infrastructure will also enable greater exports and will attract FDI. FDI will mean more money that can be deployed to further build infrastructure, thus establishing a virtuous cycle. Meanwhile, the slightly higher inflation will be compensated by the higher number of job creation.

My argument is that, in the absence of strong government policy making, the RBI needs to maintain a loose monetary policy. This is imperative for economic growth. Higher economic growth will create market pressures that are strong enough to eventually divert money and intent towards building infrastructure. Better infrastructure will be the key to resolve supply bottlenecks, boost productivity and ease inflation. High interest rates can be used to control inflation eventually. But it will also bring industrial activity to a screeching halt. This will significantly hurt jobs creation. With India experiencing a ‘demographic dividend’, it is extremely critical that our young population has enough jobs to occupy themselves. We will have to bear with the pain of inflation in the medium term, if it eventually results in an infrastructurally capable and vibrant economy.

There are numerous policy reforms and initiatives that are possible and should be enacted by the government to support economic growth. And we should continue to put pressure on the government on these issues. However, I believe we have a way out of this mess created by our politicians. And that way is monetary loosening. 

Tuesday, November 15, 2011

Power of the Fourth Estate

The past 10 years have probably seen more Indian politicians being jailed as compared to the previous 50 years. Corruption and crime have always been mixed up with Indian politics. The public has over the years come to acknowledge that Politicians and other influential classes can get away with almost anything. In the 80’s and 90’s, it was unimaginable to have a minister or even a MP/MLA to be arrested. This general public perception is slowly changing in the past decade or so. Lalu Prasad and Shibu Soren are two prominent political figures who went to jail in the early part of last decade. In the spotlight today, are politicians and business leaders arrested in the 2G scam. You also have the former Karnataka chief minister and other ministers being arrested. One suspects that, with all their money and influence, these high profile accused will manage to get acquitted in the end. Nevertheless, all these arrests have shown that the Indian law & justice system has enough life left and if nurtured, can truly make life easier for the general public.

So, what has brought about this change? Despite systemic corruption and money power, how has the law been able to bare its teeth so often in the past decade?
There could be many reasons pointed out – like higher social awareness and better education. But I think the single most important factor leading to all these arrests is the private news media – especially TV news channels. Niche players like Tehelka started off the trend of investigative journalism armed with hidden cameras and phone tapping. Mainstream media has wholeheartedly adopted this method to stay competitive in this era of BREAKING NEWS. Every political party has its own news channel and its way too eager to expose corrupt politicians belonging to other parties. Channels are competing with each other to be the first to expose the next big scam. Had there been 3 or 4 channels, money and power would have been enough to control them. Now there are too many dogs to feed. It’s not possible anymore to control the news media collectively.

Perhaps the single biggest mistake committed by Indian politicians, which hurts their own tribe the most, has been the privatization of TV news broadcasting. Its probably one of the best things done for the Indian public – inadvertently – by politicians. Anna Hazare’s voice would not be nearly as strong as it is today, without the private news channels airing his every word. If I were a politician, and looking for ways to control this menace, the solution would be to reduce the no. of media companies to maybe 10% of what they are today. This can be done by encouraging mergers and acquisitions in a big way. One sure way to do that would be to open up this sector to 100% FDI. God forbid, that should not happen in India. Otherwise, within a decade, we will have just 3 or 4 holding companies running all news networks across the nation.

Anyway, as of today, we have a strong media capable of The judiciary has shown that there are significant pockets of integrity and courage left in the highest courts in the land.
So, let’s see what we have now. We have a strong media. We have a good judiciary, which has been severely damaged, but not irreparably. We have a fledgling economy, which is miraculously continuing to do well, thanks to the ingenuity of our entrepreneurs. One area where we are failing is education, which continues to grow, but too slowly. If our economy continues to do well for another decade and if we can strengthen our judiciary and education system, India is all set to enter the league of developed nations in my lifetime.

Sunday, July 26, 2009

Returning to Chilka - Nostalgia and excitement

I just realized that I havent put a post about one of my happiest times in recent years. I am talking about my trip to Chilka towards the end of last year. Chilka is the place I love the most. I had a happy childhood there between 1991 and 1995. For the first time I stayed with my own mom and dad (my early childhood was spent with my grandma). I learnt Hindi there. I made the first of my ‘best friends’ in life there. And that was the only time in life when I lived life in full flow. If only I had continued there for the whole of my adolescence, I might’ve been a very different person now. Definitely not so shy! Me and my friends were so full of pranks and mischief back then…
Guess I’ve digressed a lot from the original intent of the post! Coming back to this trip in Oct 2008. There are times we all feel a bit lonely and think of old times and forgotten friends. I was going through a similar phase last year. I suddenly got back in touch with my childhood buddies from Chilka – Rahul, Santosh and Subhasis. Couldn’t track down Gulshan and Naveen – the other 2 guys in our old ‘gang’. After a couple of calls with my old friends, I thought of meeting up and how nice it would be if we all got together in Chilka. All of us, except Santosh now live outside Orissa. So we had to plan in advance for this. Though everyone seemed eager, it didn’t quite work out as planned. Rahul and Subhasis cancelled their plans due to professional commitments. Santosh and I decided to go ahead rather than wait for another opportunity. I was going through a torrid time at office and thought this trip would recharge my batteries.
It was a lonely 18 hour journey to Balugaon-the nearest station to Chilka. I didn’t know what to expect; meeting Santosh after nearly 15 years I didn’t expect a smooth resumption of an old friendship. And I wasn’t sure how much Chilka had changed. I reached the Balugaon station at dusk. Just as the old times, there was a power cut and the station was dark! As I got down with my luggage, I saw a handsome and confident looking guy in a black t-shirt approach me quickly and punch me on my chest. It took me a second to realize, then I smiled and we hugged each other. All the awkwardness I had thought of during my journey evaporated immediately. Santosh had biked all the way from Bhubaneshwar (5-6 hrs drive) and was completely drenched in rain. Though my dad had arranged for transport from the station, he wanted to be there in the station to receive me. As we left the platform and reached the station entrance, I could see that not much has changed in this part of the country in the last 15 years. Power cuts are still a part of daily life. The roads are still bad. Buffaloes still block the way. The only change seemed to be an increase in the highway truck traffic. We went to Panth Nivas guest house on Santosh’s bike. He had booked a 4 bed room anticipating that Rahul and Subhasis would also come. We freshened up and went outside to Chilika Dhaba for a genuine dhaba dinner. After dinner we chatted about how great it would’ve been had all 4 of us gotten together. We had so much to talk about and share with each other. We spoke about a few things that night, trying to bring each other up to date with the most important happenings in our lives. We slept late, but decided to get up early and catch the sunrise.

That meant getting up a 4.30 am. And we did get up that early! It was still dark outside. We took the camera, put on our clothes and left the guest house. We jumped over the fence and walked in pitch darkness towards the lake. The villagers were just about waking up – most were still sleeping. Some kids were experimenting with fire and cigarettes while their fathers were still sleeping. The buffaloes were still sleepy. We reached the banking of the lake and sat down waiting for the sun to come out. It was pitch dark and a bit cold. Slowly the sky transformed to purple and deep blue, signaling the arrival of dawn. I was reminded of an old hindi poem I had learnt in school. The poem described how the colour of the sky changes to various hues as the sun comes over the horizon. After more than half an hour the first specks of orange appeared in the sky. It took us some more time to realize that we would not be seeing the sunrise over the lake that day. It was just too cloudy! But we did stick on for another hour and enjoyed the glorious morning. I took some nice photos. We watched the serene water slowly being taken over by dozens of fishermen in their small and unique boats. As it grew brighter we noticed ducks feeding on weeds at the banks. The villagers had woken up and the day had well and truly started. Santosh tried to bargain a deal with one of the fishermen for some prawns, but we didn’t get what we wanted. We were hungry and walked back to the guest house for breakfast.

Breakfast was good – poori and aalu and some tea. We then left for INS Chilka. We gained entry into the INS, thanks to Santosh’s uncle who worked there in the MES. We went straight to our school. As we approached the school, the smell of the grass and the trees was simply intoxicating. I saw that the school had been recently painted and it was a beautiful yellow with colourful logos of Kendriya Vidyalaya. Beautiful flowerpots were decorated in front of the school. I noticed that the old cycle stand was still there. Santosh was speaking to the watchman about letting us inside for some time. I just stood there and observed the surroundings. I saw the kids in their neat uniforms and walking in a queue formation as the class monitor led them back from the playground to the class rooms. I saw the smile in their bright little faces. That was a very intense moment for me. I was close to tears with emotion. I was happy, I was nostalgic, I was on a high. Though I haven’t taken drugs, I guess that particular moment felt something like that. Very intense, very happy! Those 5-10 minutes was sooooo good! I was rudely interrupted by a phone call from my office. Curse the mobile phone! Anyway, Santosh soon convinced the watchman and we went inside to meet the principal. The principal wasn’t in, so we met a senior teacher and got the permission to be in the premises and visit the classrooms during lunch break. We went to all our old class rooms that we had used during 5th, 6th and 7th standards. Most of the kids were too shy and ran away from us. Some of them, mostly girls were having lunch inside the classrooms and couldn’t escape us. We chatted with them. They asked us a few silly questions and giggled stupidly. We unsuccessfully tried to convince them to share their lunch with us. As we moved slowly to the higher classes, the kids were more forthcoming and were curious to find out who we were. I had long hair at that time. Some of the kids called me Ishant and the name caught on with the other kids! We chatted with some of the existing staff. We went to the art room and saw the paintings of the current students. The library room was pretty much the same. We spent quite some time in the school. Finally we were thrown out as the kids’ excitement caused too much noise and some teachers got annoyed.
We went to Santosh’s uncle’s house for lunch. Aunty had made an awesome lunch and we really enjoyed it. After a nap we took bicycles and started to explore the INS. Simply riding the bicycle through the roads was amazing and full of nostalgia. We met an old class mate – though I had no recollection of him. Santosh spoke to him and we setup a daaru party that night. We were joined by another class mate. The other 2 guys weren’t in a stable job and weren’t doing that well in life. I was ashamed to even tell my real salary to them. It seemed to be too much money, to the point of being disgusting. I put aside the awkwardness and tried to strike up some lively conversation. The liquor for the night was something called “Panga”. It was supposed to be rum, although it tasted mildly sour. And it was packaged in a plastic bottle!! For a moment I was reminded of vague news stories about illicit arrack casing deaths and blindness. But my friends insisted that this was a ‘trusted’ brand in the local market. So I took a leap of faith and finished my first round. We had a lively evening. I guess Panga wasn’t all that strong. Because even after a quarter I was confident enough to take the bike and ride triples in the unlit and crumpling highway to drop a friend home at midnight.
The next day Santosh and I went to Kalijai and Narayani temple. But I was really waiting to go back inside INS and see my old house. We went there in the evening in fading light. We spent some time there. We then went to Apsara theatre. Since it was a weekend, a movie was playing – A Wednesday. We bought the tickets – whole of Rs 8 each! Before the show started we decided to check out our ‘old’ school, which was now being used as a Kinder Garden. We jumped over the compound and in the fading light checked out the class rooms and assembly ground and the old Imli ka paed which had borne so many stone hits from us kids and was still standing tall.
As we reached the station on Sunday morning to board my train, the trip seemed to have been too short. But that’s how good things in life are, aren’t they? This trip was a beautiful time in my life and the memories will remain treasured for the rest of my life.
Pictures: Please click here to see some nice pics of the dawn sky and more.