General ravings, Potshots

Reliance on Self-Reliance : food for thought

 Prime Minister Modi has done a good thing by announcing extension of the Pradhan Mantri Gareeb Kalyan Anna Yojana till November 2020 — ensuring that free food grain will continue to be supplied to more than 80 crore (800 million) people, at an additional outlay of Rs 90,000 crores.

Assuming that the scheme is implemented efficiently and honestly, this is money well spent for a worthy cause.

But what happens after November 2020?  

Covid-19 has settled down comfortably across the country and world and stubbornly refuses to go away. In fact it is proving to be as difficult to dislodge as a VIP neta or babu who refuses to vacate her/his government bungalow in Lutyens Dilli even after being de-seated and/or sacked.  

So, with Covid-19 likely to remain in the long term, how can the government raise enough money to feed India’s hungry crores—especially, children— through the years and decades beyond November 2020?

I think the Covid-19 pandemic itself has provided an unexpected and  golden opportunity to achieve this noble aim.

We all know only too well that the pandemic has brought enormous misery and suffering to the vast majority of people, especially the poorer sections of the populace. But weirdly, the pandemic has also brought about a huge increase in prosperity among the world’s richest people (read more about this here).

Among them, our very own Mukesh Ambani, Chairman of Reliance Industries Ltd, has seen his net worth burgeoning to a whopping US$ 64.5 billion, making him the 8th richest person in the world (click here to read more).

And herein lies the win-win-win-win opportunity.

I do believe Mukesh Ambani has worked hard for his wealth – unlike so many other wealthy Indians, especially among our hereditary political families, who have worked hardly for theirs. I also believe Mukesh has contributed hugely to the well-being of India and Indian people. Hence, I propose a unique, innovatively deranged scheme for feeding crores of Indian children sustainably in the long term; a scheme that I think Mukesh, as a patriotic Indian as well as shrewd and seasoned businessman, would be glad to participate in by leveraging a modest portion of his wealth.

Working it out

The first question, of course, is:  how much does it cost to provide a hungry child a fulsome, tasty, nutritious meal?

The Akshaya Patra Foundation, which feeds 1.8 million schoolchildren daily, provides a nice baseline figure:  to feed one child for a year, Akshaya Patra needs Rs 1100 (see here  for details)

So…to feed one crore children for a year, Akshaya Patra will need Rs 1100 crores.

Next question: where in Alambusa’s name can we find this kind of money – that too when the coronavirus is still doing its Tandava across India and the planet?

Answer: Self-reliance. Rather, Reliance—that’s where.

Consider Mukesh Ambani’s wealth. Applying a generous conversion rate of 1 US$ = Rs 70 (which allows enough cushion for any necessary kickbacks and payoffs to assorted middlemen, babus and politicians), Mukesh’s fortune of US$ 64.5 billion works out to Rs 4515000000000 = Rs 451,500 crores.

In the spirit of Atmanirbhar Bharat, then:

  • Government of India could float a special and aptly named ‘Self-Reliance India (SRI) Treasury Bond’ scheme exclusively for Mukesh Ambani and his Reliance Group, carrying an attractive coupon rate of 11% interest per year for (say) 10 years.
  • The SRI Bonds will have one unique and innovative feature:  the Government will retain half of the interest earned, and use the amount exclusively to feed children across the country.
  • The Government of India may request Mukesh to monetize Rs 200,000 crores of his wealth (that’s less than half his current net worth), and invest the amount in SRI Bonds.

That’s all that’s required.

I am confident that Mukesh Ambani will welcome this proposal – because there is no greater blessing to be had in this world or in any other than the gratitude of a child who has eaten her/his fill. Besides, there is virtually nowhere else for Mukesh to invest his money; banks in Europe and USA are paying zero interest on deposits or even charging customers a fee for saving their money.  Also, even the half-share of interest earned by Mukesh (5.5% out of 11%) is comparable to what Indian banks like SBI are paying customers for fixed deposits of up to 3 years.

So what are the happy outcomes of the SRI Bond scheme?

Benefits

  • The SRI Bonds of face value Rs 200,000 crores @ 11% p.a will earn an interest of Rs 22,000 crores each year.
  • Mukesh may draw his share of  Rs 11,000 crores each year and use it as he wishes. Looking at it one way: Mukesh could happily blow away Rs 24 crores daily from his share of interest –that’s one crore every hour, 24 hours a day, seven days a week – and still have over Rs 2200 crores left over from the interest at the end of the year, more than enough to add another 10 floors to his 27-storeyed Mumbai bungalow ‘Antilia’, expand his parking spaces from 168 cars to 300 and add two more helipads to the existing three…with maybe enough left over for a haircut and cup of coffee.   And after this spending spree he will still have his principal of Rs 200,000 crores intact and another Rs 11,000 crores of interest to collect and blow up the next year, and the year after that…for 10 years.
  • The Government can use its interest share of Rs 11,000 crores to feed ten crore (that’s 100 million) children every year –preferably through Akshaya Patra, to ensure that it is the hungry children who receive the nutrition rather than the ever-ravenous babulog.  

I am presenting the above SRI scheme idea as a proposal to the Government of India for urgent consideration and action.

I will suggest to the Prime Minister that the SRI Bonds may be opened up to other Indian billionaires in due course: as the table shows, they have plenty of resources to invest and plenty to gain too.

India’s 10 richest people – Forbes list for 2019

RankNameNet worth (billion US $)
1Mukesh Ambani51.4 [now, 64.5]
2Gautam Adani15.7
3Hinduja brothers15.6
4Pallonji Mistry15.0
5Uday Kotak14.8
6Shiv Nadar14.4
7Radhakishan Damani14.3
8Godrej family12.0
9Lakshmi Mittal10.5
10Kumar Birla  9.6
 Total173.3
Source: https://www.forbes.com/india-billionaires/list/#tab:overall

O patient and worthy Reader, any feedback from you will be welcome.

[P.S.: I shall be grateful if you would add a few onions to the tomatoes and eggs that you hurl…my omelets and my happiness will then be complete].

Jai Hind.