Weekend reading links

1. The rise of dual class voting shares in the US, where owners have outsized voting power and others very limited.

2. India's disinvestment target and realisation over the years from Livemint.

3. Tamal Bandopadhay advocates RBI exiting the monetary accommodation,

Withdrawal of excess accommodation in the form of liquidity sugar rush is akin to taking away the training wheels from a kid’s bike. Yes, training wheels help kids maintain balance and stay upright on a bike and pedal at an early age but they don’t teach them how to ride a bike. The fiscal health of the government is improving with higher tax collections, and consumer demand has started picking up. As the path looks less treacherous now, it’s time to remove the training wheels.

4. Sivakasi produces 95% of India's fire crackers and employs 800,000 to a million people. PTI has a story on the poor state of work conditions of these workers,

For all the hard work, workers approximately get anywhere between Rs 290 to Rs 500-Rs 570 per day as wages and a bonus ranging between 20 and 27 per cent in addition to Provident Fund and Employees State Insurance Scheme cover. The pay structure is only indicative and applies to organised, licensed and properly run units and about 55 per cent of the workforce is women. Remuneration, in some big units as well, covers aspects like the "piece rate" concept and working hours (up to 4 and 8 hours) and pay varies depending on the kind of work done while hazardous processes like chemical filling are mostly assigned to men... Unlike well-defined and mandated practices to ensure safety in regulated, licenced units, workers in unlicensed and illegal firecracker manufacturing cottage industry are exposed to grave hazards and a chunk of accidents.

5. Jean Dreze on the risks with Aadhaar enabled bank payments through Banking Correspondents. Some useful suggestions to limit the risks,

There are ways of reducing the vulnerabilities of AePS. For instance, BCs could be required to make manual if not digital entries into printed customer passbooks. That would act as a permanent, verifiable receipt that cannot be denied to the customer so easily (a blank entry would be incriminating). Ensuring that BCs are clearly identified in transaction records would also help. So would SMS alerts, when the customer has a mobile number. Roaming BCs should perhaps be banned, at least in states with low literacy levels. And most importantly, better grievance redressal facilities must be made available to the victims of AePS fraud.

6. In the aftermath of the German elections, Gideon Rachman makes an interesting observation,

It is the US and the UK where politics seem increasingly prone to “angst, aggressiveness” and all those other unattractive, supposedly Teutonic, qualities. These days, it is German public life that is characterised by the virtues the British often attribute to themselves — calm, restraint, rationality and compromise. The recent German election and its aftermath underline the point. It was a close contest, but the losers accepted the results gracefully. Nobody tried to claim that the voting was rigged or that their opponents were “scum” — or represented a mortal danger to the country.The Social Democrats now look set to lead a German government for the first time since 2005. But a transition of power will not bring about an abrupt rupture in policies or an attempt by the political opposition to paralyse the government, as is happening in the US. The SPD’s Olaf Scholz, who may become chancellor, ran as a continuity candidate. As my FT colleagues reported, voters saw Scholz “with his quiet demeanour, long experience in government and pragmatic politics, as Merkel’s natural successor”. How very different from the leadership profiles of Donald Trump or Boris Johnson... One difference between Germany and other large western nations is that high levels of immigration have not radicalised the mainstream right.

7.  This on grade inflation in India's Board examinations is very disturbing,

CBSE Class X and XII boards have passed a record 99.04% and 99.37% students respectively, with those scoring above 95% jumping 38% and 81%. This extraordinary uptick is echoed across state boards. For example, Maharashtra HSC results have witnessed a gravity-defying 1,000% rise in the 90% category... grade inflation was an epidemic even before the pandemic. Before the 95% club more than doubled in the 2020 Class XII CBSE boards, it soared by 39% in 2019.

HT: The Ken 

8. I've not yet had the occasion to write about Byjus, the $18 bn valued Edtech startup making it the world's most valuable Edtech firm. But The Ken here points to some interesting aspects about Byjus. 

9. India laptop market fact of the day,

A report by EY and ICEA in 2019-20 had said India imported laptops with a value of $4.21 billion, which accounted for a staggering 86 per cent of the $4. 85 billion per annum laptop market. Out of this, 87 per cent was imported from China. Further, India’s laptop imports have increased by 42 per cent from $2.97 billion to $4.1 billion in five years. Only a handful of companies, including HP, Dell and Lenovo, manufacture laptops locally and in very limited numbers, either on their own or with third-party players. According to government estimates, the value addition in India is not more than 5-10 per cent.

In this context, the decision by Dixon Technologies to leverage the Production Linked Incentive (PLI) scheme to make upto 1 million Acer laptops in India and increase local value addition to 25%. 

10. Interesting data that once again points to India's missing middle class,

Residential property sales have been stagnant. In the eight major cities, sales have been stuck at around 3 lakh units a year since 2012 (last year it was about half that). India is second from bottom on the Knight Frank Global House Price Index. There has been no growth in the sales of passenger vehicles for 10 years — about 2.7 million units in 2012, 2.7 million in 2015, 2.7 million in 2019 and 2.7 million in 2020, according to the Society of Indian Automobile Manufacturers. The government says this is because of Uber and Ola, but ride-hailing apps have not stopped the growth of passenger vehicle sales in the United States, where they went from about 10 million in 2009, the year Uber was founded, to 17 million. In China, sales doubled from 12 million to 24 million in this same period. In India, the sales of two-wheelers have been stagnant for six years, with 16 million sold in 2015, then 17 million in 2019, and 15 million in 2020. Something that has not received attention outside of the business dailies is that sales of commercial vehicles have stopped growing, with 6 lakh sold in 2015, then 7 lakh in 2019 and 5 lakh in 2020.

This snippet on manufacturing is striking, 

Automobiles are about half of India’s manufacturing sector. Because auto sales have stagnated, manufacturing’s share of GDP fell from 16 per cent to 13 per cent after the launch of Make in India in September 2014. An analysis by the Centre for Economic Data and Analysis in May found that jobs in manufacturing halved from 51 million in 2016 to 28 million today. This aligns with the issue that is highlighted by automobile sales.

The numbers need to be checked, and if true they are disturbing.

11. Rwanda is another cow loving country, and that too with milk bars,

In 2006, President Paul Kagame introduced the “Girinka” program, which aims to give every poor family one cow. The program has so far distributed over 380,000 cows nationwide... The program (Girinka means “may you have a cow” in the local language) is one of the development projects that have garnered Mr. Kagame support nationwide... As milk production increased in this landlocked nation, so did the number of people who moved to urban areas for education and employment. And so were born the milk bars, which allowed farmers to sell their surplus milk and let customers drink copious amounts of it to be reminded of home. Most milk bars are in Kigali, the country’s most-populous city, with 1.2 million people.