What if we did not save money at all?

What if one does not save at all? This is the question a reader asked me after reading one of my recent columns about youngsters and savings. Is it mandatory to save? What happens if there is no saving?This is quite like the Finance 101 question on leverage. When we teach new students the financial structure of a business and point out the benefits of lending, it suddenly seems like a business needs no money of its own. What if it was funded completely with borrowed money? One can then make profits without investing any capital. This is technically possible only if the firm has no risks to its profits, and if it always makes a return on capital that is higher than its cost of borrowing.That did sound like a Finance 101 classroom. However, the connection to our question is simple. If there is no risk to income, and if the income always covered the expenses, there is no need to save. We save because we worry about risks to income. Someone with enough wealth to provide for expenses all through their lifetime will not consider savings as an option.But for most of us, both situations are real: our income may come under risk. Or may come to an end on retirement. Our expenses may unexpectedly shoot up. Or a sudden expense that is bigger than the routine income may come up. In either case, we need savings to fall back on. We save because we care about these risks.What if there was a pension income that steadily flowed in from the government or the erstwhile public sector employer? What if that income was also inflation indexed to provide for a revised dearness allowance linked to prices? Would such a pensioner need to save?The steady income is a good thing to have. But unexpected expenses are still an uncontrolled item. If the pensioner had a corpus to fall back on, or a reliable support from his children who are willing to fund such contingencies, the pensioner can spend all his or her income and not care for savings.But they may still save for the psychological satisfaction, even if none of the uncertainties played out. Regret is an emotion many do not wish to experience. To save is to preempt the sharp regret one feels when an unexpected event requires an amount of money one is unable to garner. To think about the earlier indulgences and failure to save, can fill one with regret. Conservative spending and habitual savings are both preventative responses to this possibility. Many save even if they don’t have to.There was a friend of mine who did not save a penny. But he lived a different kind of life. He gave away a good part of his income to charity; he acquired no assets; he did not marry or raise a family; he lived a remarkably minimalistic life. He believed that there is no need to set money aside and that life would take care of itself day to day. He lived and passed with that philosophy. Not many of us would have the courage to live such a life. We nurse our fears and apprehensions and we save.Is there no real cause to save for? Are we all saving because we worry, we fear, we anticipate or we control? We also save because we accept the rational order that we may not know the future with accuracy. We save because we understand that even the best forecasts cannot account for events that are yet to take place. Our response to the likelihood of the unknown events is to be prepared for it, as if it would happen, dismissing any low probability that may be attached to it. We do so because we are all risk averse.There still is a good reason to save, coming from the humility that we do not know the future. But we may be willing to make assumptions that help us deal with that uncertainty. In our early days of earning, we saved meticulously for the higher education of the children. Setting aside portions of the then-limited small incomes for the future was tough. It involved giving up some of the luxuries that money could have paid for.But as the children grew older, we moved up the income ladder. By the time the children went to college, we were able to pay the fees out of our regular annual income. Was it a foolish decision to save for a purpose that seemed to be easy to fund when it arose?Looking back at the 18 long years of saving and sacrifice, it seemed that we had been truly conservative. But how could one have guessed in the 1980s when we began to work, that a liberalised India would come about? Or that the joblessness and despair that engulfed college degree earners of our times would become a thing of the past? We had no tools to trust that our incomes would rise as they did, with the new economic opportunities.We save not because we enjoy the martyrdom of denying ourselves the pleasures of spending.We save because we only have the past to extrapolate. Much as we know that cycles turn, we look at the past, size up the experiences of those times, and provide for it as if the future would be similar. The young earners that experience a wave of opportunities and rising earnings, will only extrapolate that.As they say in behavioral finance, our forecast is just our position: we see the future just as we want to see it. We save because we see it with our limitations. We don’t see choices that we have not experienced so far. There is nothing wrong with the desire to save. Nor is there a problem with the propensity to not save. It all depends on how one sees income, and how one fits expenses into it. Today and in the unknown tomorrow. To each one their own.(The writer is Chairperson, Centre for Investment Education and Learning)

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Dutee finishes last in her heat race at Olympics

Indian sprinter Dutee Chand continued her disappointing run at the Olympics as she failed to qualify for the women's 200m semifinals after finishing last in her heat here on Monday.Dutee registered a season's best timing of 23.85 seconds to finish seventh and last in Heat 4 which was topped by Christine Mboma of Namibia with a timing 22.11 seconds.Top three finishers from each of the seven heats and the next three fastest qualify for the semifinals.Dutee, who has a personal best of 23 seconds, ended at 38th overall out of 41 competitors.Earlier on Friday, Dutee failed to progress to the semifinals of the women's 100m event as well, finishing seventh in her heat with a timing of 11.54s.

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Why shake-up in Assam, Mizo bureaucracy is a must

The oddity about the sham- eful Assam-Mizoram fracas is that it’s a police versus police fight, not a police versus insurgents, rioters, arsonists sort of situation. And that’s why the first question to be asked is one of order, of administration and not of politics or history.Fissiparous tendencies in the northeast aren’t new. They have always simmered under the surface, but the idea has been to power a new narrative through economic opportunity and integration with the mainstream. For that to happen, though, sustained peace is a prerequisite.The all-India services have played a silent but stellar role in ensuring that bare minimum. Be it by way of regular administration and police work or through security and intelligence agencies, the combined objective of this impressive edifice has been to keep the peace. And this has delivered results — empowerment of women through opportunity, sports and skilling is, perhaps, the biggest pointer to what peace can achieve.But when these forces fight, kill and maim each other over local issues of conflict, it’s not just worrying but unpardonable. Because that means the simmering divisive tendencies have pierced thro-ugh the frame of Indian administrative and police architecture. Now, there can be many things wrong with the all-India services but a failing on this basic constitutional pledge cannot be acceptable.Let’s come to the issue at hand. When the first time this current trend of violence erupted last September, a truce was reached with a small CRPF camp set up on the border where the current incident took place. They were meant to be the buffer between the two police forces. That itself is odd because one should not need a central force to keep peace between two state police entities.That said, an uncertain peace was maintained but the fire wasn’t extinguished. On the Mizoram side, all superintendents of police in the border districts remained from the provincial cadres. No IPS officer was posted there. Incidentally, while the state is served by the AGMUT cadre, there are fewer regular IPS officers posted there. Even though many DGPs, including the present one, have been high ranking Delhi Police officials, their hold and sway over the local police has been limited. The present chief secretary of Mizoram, Lalnunmawia Chuaungo, is a Mizo himself. He is a 1987-batch IAS officer of Gujarat cadre, on deputation to Mizoram. He has a reputation of being a performing bureaucrat. His popularity in Mizoram is quite high but that has also put in difficult situation, like the conflict with the Election Commission in 2018, when he was removed for interference in electoral processes.That decision sparked a wave of protests against the chief electoral officer who had to be replaced because tempers ran so high. Chuaungo was then principal secretary (home). So, Mizo sentiments find a strong expression within the bureaucracy, which is not a problem but it becomes an issue if the bureaucracy also gets swayed by local sentiments.On the Assam side, we have a new CM who clearly feels cheated by the Mizo National Front, which he shored up as NEDA convenor. But that’s politics. The administrative question is how could an IPS officer of IG rank in Assam Police let things slip out of control. Why was a force of 200 needed when a CRPF camp was there to keep the separation?The whole clash began even as the SPs of the two bordering districts were talking about a post on the Mizoram side. The entire chain of events, including the assault on a Mizo couple, does not reflect well on the police. And then, of course, the killing of Assam cops — all in the presence of three legitimate police entities, of which two were active participants.Regardless of the politics and the history of troubled boundaries, order needs to return to the administrative apparatus that holds up the constitutional frame in the northeast. To start with, a bureaucratic shake-up ought to be considered with competent IAS and IPS officers placed in sensitive districts and the CRPF given a clear mandate on maintaining the peace. Because the cost of inaction could be far more damaging to national security than what meets the eye today.

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BJP youth wing starts work on its blueprint for 2024

The BJP is planning to double down on its efforts to reach out to those in the age group of 16-20 who will vote for the first time in 2024. Through its youth wing, Bharatiya Janata Yuva Morcha, it will soon unleash mass connect programmes, senior officials in the party’s newly constituted Yuva Morcha told ET.The programmes are being designed after high level meetings. To emphasise on the ideological training of its members, the new office-bearers of the youth wing –– all 22 of them –– have been asked to answer ten questions.The questions, all framed and sent to the new office bearers by first-time MP, 29-year-old Tejasvi Surya who heads the party’s Yuva Morcha, include why they chose to enter politics, what drives them, and who according to them is the ideal youth wing karyakarta.The office-bearers have been asked to write about the five important challenges the country and youth are facing and suggest possible solutions. They have been asked to enlist the BJP’s challenges and the projects the youth wing should take up to make it easier for the party.Office-bearers have been asked to list out five projects they would personally like to initiate and implement, and write about its strengths and weaknesses. They have also been asked to put their minds into detailing the challenges faced by young party workers on the ground, and also write an essay on what they think is the most important change happening in India, and in the global context.According to a functionary who did not want to identified, the responses had to be submitted by this week, after which the youth wing is likely to finalise its blueprint for the 2024 Lok Sabha polls, with special focus on UP, Uttarakhand, Punjab, Manipur, Goa and Gujarat that go to polls next year.Although the party has nine morchas including those dedicated to farmers, SC, ST, OBC, it is the Yuva Morcha and Mahila Morcha that are considered most important for political campaigns as they can carry out public outreach programmes cutting crossing caste and class limits.The Yuva Morcha has played a prominent role in amplifying the party's connection with people. Prominent leaders such as defence minister Rajnath Singh, culture minister G Kishan Reddy, BJP president Jagat Prakash Nadda, MP CM Shivraj Singh Chouhan, education minister Dharmendra Pradhan, I&B minister Anurag Thakur and MP Poonam Mahajan have served as national presidents of BJYM in the past.Surya, who has been associated with the RSS and its youth wing, the Akhil Bharatiya Vidyarthi Parishad (ABVP), before he contested the Lok Sabha elections in 2019 was among the last morcha heads to announce his national team. The reason was because every member had to pass through many rounds of questioning, mainly on ideology and his or her vision to improve the wing’s youth connect, people in know of the matter said.Speaking at the state executive meeting of the morcha recently, Surya had said that under him, the morcha will focus on grooming “political leaders” and not “event managers”, and hence the focus will be on “envisaging a long-term vision for the party’s youth wing and implementing it."Morcha functionaries said the instruction now is not to “just go from one event to another, but meaningfully engage with society”.“Young workers were just jumping from one activity to another, from a sapling planting ceremony to blood donation, then some symbolic celebration, which is why there is increased emphasis on ideological exercises now. We are telling our karyakartas that if we have to get neutral ones or those opposed to us, on our side, we have to have a lot of merit and confidence in our position,” a senior functionary said.A meeting of PM Narendra Modi with Morcha heads last month helped the Yuva Morcha put in place new rules –– no member should be above 35 years and all have to spend a significant number of days a month in rural areas, taking the government's vision to the people.This is the first time the Morcha will have a department dedicated to policy making that will be headed by the party's functionary from Gujarat, Varun Jhaveri who has worked extensively on the government's Ayushman Bharat. Author and Delhi university professor Abhinav Prakash, social activists Neha Joshi, Madhukeshwar Desai, popular faces in the Delhi unit of the party, Rohit Chahal, Vineet Tyagi and Tajinder Bagga are among the most prominent voices of the BJP from North Bengal. Raju Bista has also been accommodated in the new team.An RSS-Vanvasi kalyan ashram activist from Chhattisgarh, Ravi Bhagat, who has worked for years in Maoist-den Bastar, ABVP functionary Shahzadi Syed who contested against four-time AIMIM MLA Akbaruddin Owaisi from Hyderabad in 2018 and has constantly urged Muslims to not be suspect of the BJP, SC faces such as Ram Satpute, an MLA from Maharashtra, Anup Saha, the lone BJP MLA from Birbhum in West Bengal known for its political violence and ST face of the party from Kerala, P Shyamraj have also been accommodated in the national team. "We have given importance to members who have risen from the organisational route, but it is a good mix of grassroot mobilisers and cosmopolitan faces, apart from some who are self-made entrepreneurs themselves. Many of them come from really humble families which is inspiring in itself," a party functionary said. Some states such as MP and Tamil Nadu have been left out in the list.

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Assam, Mizo CMs end verbal volleys, call truce

After social media verbal volleys, the chief ministers of Assam and Mizoram are now talking of working out an amicable solution to the border dispute. Assam will move the Supreme Court in 10-15 days, chief minister Himanta Biswa Sarma has said.On Sunday, Mizoram CM Zoramthanga tweeted “I still hope for an amicable solution to the #AssamMizoramBorderTension from the Central Government”.In a statement, Zoramthanga said: “As per the telephonic discussion with the Union Home minister and Assam chief minister, we agreed to resolve the Mizoram-Assam border issue amicably through meaningful dialogue… In the meantime, in order to prevent any possible escalation of the situation, I request the people of Mizoram to avoid posting sensitive messages and make judicious use of their social media platform.”Sarma tweeted: “Our main focus is on keeping the spirit of North-East alive. What happened along the Assam-Mizoram border is unacceptable to the people of both states. Honble CM @Zoramthanga had promised to call me post his quarantine. Border disputes can only be resolved through discussion.”Meanwhile, Mizoram Chief Secretary Lalnunmawia Chuango said the state government was ready to withdraw the FIR filed against CM Sarma. He said that CM Zoramthanga didn’t approve inclusion of Sarma’s name in the FIR.The Mizoram Police had charged Sarma under attempt to murder charges (IPC 307). Mizoram Police has also charged six officers and around 200 policemen under the same charges. Seven Assam cops were killed and over 70 injured in clashes along the border on July26.Sarma said: “If an FIR against me can help in solving the dispute I will be happy. I will accept their notice. I will start walking from Silchar and reach Mizoram side of Vairangte. I will respond to their notice like a law-abiding citizen. If Mizoram police arrest me it is fine, I am not going to seek interim bail from the Gauhati High Court. However, I cannot allow my officers to be arrested and will not accept this.” National highway 306 –– the lifeline of supplies to Mizoram –– continued to be under blockade.

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Buzz: This legal eagle is soothing a founder’s pre-IPO woes

ET’s weekly roundup of the wackiest whispers and murmurs in corporate corridors & policy parlours.Evidence Tampering?As the CBI’s moves against this fallen tycoon engulf corporate governance icons and many other gentlemen of eminence, we didn’t realise an equally engrossing side story — between the country’s leading state lender and a little-known local auditor that had undertaken a forensic audit at its behest — was taking a turn for the worse with an avalanche of allegations. As the audit firm’s own ‘dubious’ track record came under scrutiny, we hear its senior team has been trying to rally support, insisting that it hadn’t named the once-regal industrialist as an accused in its report, based on which the sleuths had alleged fraud and fund diversion from listed companies. This report is the basis of the elaborate chargesheet that has shocked Lutyens’ Delhi in recent weeks.Landing a HospitalThere’s every chance that if a major real estate deal in Chennai gets inked, the national capital may get a swanky new corporate hospital in place of a rather ugly commercial tower that dots the Lutyens’ skyline today. The land in the heart of Chennai belonging to the family of an erstwhile cola king has been lying fallow for decades, but prowling land sharks are now swooping in for a hush-hush trade, we hear. What that has to do with a hospital in Delhi though is another story. Singara Chennai, after all, is home to one of the premier healthcare chains with impressive political connects, and a windfall from the estate could see two iconic business families come together in the name of advanced healthcare. The cash from the sale could become seed capital for the JV and help revamp the existing structure that has also been ailing for a while. Even though an ambitious takeover plan had unravelled in the NCR just a few months ago, making several players wary post-Covid, even the most disillusioned healthcare houses are suddenly singing a new tune. A crown jewel within spitting distance of Connaught Place could be a dream come true for anyone and the rulers of Raisina Hill will only be delighted that a high-quality hospital is coming up to further liven up the Central Vista.Influencing PeopleShe’s a firebrand independent director and a leading legal light whose interpretation of competition law is regarded as being among the best in the country. It seems evident now that having her on his side has been a boon for this voluble founder primed for an epic listing later this year. We gather that her good offices and influence are being used to the fullest to charm the regulators who are asking tough questions. You have to hand it to the founder — he’s mastered the art of making friends at the most opportune time as murmurs of the IPO running into heavy weather have already begun. School’s OutBeing the daughter-in-law of a billionaire has many benefits but try convincing irate parents during these pandemic times about this. We reliably learn it was not all kosher when the lady decided to continue running her premier pre-school for the affluent tiny tots of her city in a western Indian state, more so as the state’s directives clearly barred reopening of these institutions after the horrific second wave. When people figured out even the staff was not vaccinated, all hell apparently broke loose, forcing a shutdown earlier last week.Searching for a WinnerA homegrown investor, who was once very popular among young founders but now has a bad name thanks to a series of motivated exits that smacked of opportunism and arm twisting, is clearly finding it difficult to get quality deal flows even when having a bulge bracket backer by her side. Desperate to win future transactions, the team is now contemplating SEO-jacking — getting to the top of search results — to see off competition and drive traffic to the website. That’s a method taken from an old playbook to boost eyeballs by fooling search engines but a VC trying the template to score is certainly a first. Desperate times, desperate measures, eh?Privy to the whispers in power corridors or juicy tips on India Inc? Do share with us at etsuits.sayings@gmail.com

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I had a lot of emotions going through me, says PV Sindhu

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