Guest post by T R Ramaswami
What exactly is the reason for the hullabaloo raised over the cartoon? It is nothing but symbolic hypocrisy like the one on the auction of Gandhi’s possessions. The more important question that no one has the courage to ask is this – If Ambedkar is the so-called “Father” and “Architect” of the Indian Constitution as many would want it to be claimed, did he do a good job? Then let them explain why he was such a poor visionary. We have had 100 amendments in less than 65 years. That‘s a far better strike rate than that of Gayle, Afridi or Sehwag. Contrast this with the less than 30 amendments in 230 years in the US Constitution. It is evident that Ambedkar’s name has been used as a vote gathering technique while his Constitution has been mauled and raped. The question is – when will the Dalits realize that they have been taken for a ride and that their poverty and consequent illiteracy has enabled this? The sucking up to vote bank politics of the Congress compelled that he be given the title of “Father of the Constitution” with a more than deserved share of the credit. If however the contrary is true, then is it not correct that the Congress governments, under whom most of the amendments were enacted, did so only for narrow political gains, thus destroying Ambedkar’s seminal work? It would be interesting to hear the responses of the Congress and the supporters of Dr. Ambedkar. If Ambedkar’s reputation has to be restored then let the Constitution be restored to its 1950 glory and let us run the country on that basis.

Since we have been correcting history/political science text books to suit various ethnic, social and political needs, there is one correction that needs to be made. History books tell us that Nehru, a leader of the Congress “fought” for independence. But there is no information on what dates and which places he did so – and what “fighting” he really did. Making provocative speeches (which every two-bit neta does today) and sending long memorandums to the Viceroy do not count. Could the text books please carry this information? Also if he was such a great freedom fighter, then why was he not sent to the Andamans where the real freedom fighters were sent? Why was he sent to jails with all comforts where he could letters that became books and on which royalty was earned later? I am told that the only fighting that Nehru only indulged in hand-to-hand ‘combat’ – with the Viceroy’s wife on the lawns of the present Rashtrapathi Bhavan. History books also tell us of the great crime Nathuram Godse committed in assassinating Mahatma Gandhi. But they do not tell us that he committed an even greater crime – he shot the wrong man. Who should he have shot – the Great Freedom “Fighter”. History books should also tell us why the Congress that claims to be a Gandhian party did not dissolve itself as desired by the Mahatma. Will the HRD Minister answer all these questions so that our censored knowledge of history is complete? Perhaps the above is the reason why many say ‘istri’ for history. They know that inconvenient facts have been istrified.



Income tax on Bonus vs. fixed salary

Note: This pertains only to Indian personal income tax laws.

Do you know that your bonus payout is taxed at a different rate than your fixed (monthly salary)?

Here is how:

Your bonus is always taxed at your highest tax bracket, while there are various exemptions available which are tax exempt.

  1. Your HRA would be 40-50% of your basic. This is tax exempt if you have the proper rental receipts.
  2. Employer’s contribution would be 12% of your basic which does not even show up in your IT records.
  3. Based on company policy your LTA would be a % of your basic which is also tax exempt. (Say 2%)
  4. There are telephone reimbursements, fuel, company car lease and other mechanism that are tied to your basic pay on which you can save taxes.

So 50-64% of your basic salary is tax free. Assuming your basic compensation is 50% of your gross compensation (may vary based on company policy) this translates into 27-32% of your fixed salary being tax exempt.

This means that rather than a popular myth of income tax being 30%+ surcharge, your effective income tax on any increments (in your fixed salary) would be mere 20-22%

IT department is not so kind with bonus: So 1L of bonus taxed at 30% leaves you with 70K, while 1L of additional fixed salary would leave you with 80K extra take home. (~15% higher)

Other merits of having high fixed salary (rather than bonus):

  1. Since fixed salary is paid out monthly (rather than yearly/periodically), it eases your liquidity and ability to meet your regular expenses esp. home loan EMI.
  2. Some cheap companies show bonus as Maximum pay-out to employee rather than the normal. Which means that 15-25% of your bonus never reaches you.
  3. If you quit your job in the mid-year, no private company pays you your due share of the bonus. Hence it’s always beneficial to minimize the receivables.
  4. Gratuity/severance payouts are on the basis of your fixed
  5. Your bank loan eligibility limit is determined on your monthly take home. So high fixed component makes it easier to buy that bigger car/home that you always dreamed of.
  6. Also its beneficial to prepay the loan with a higher EMI, rather than using Bonus to pre-pay (as there are pre-payment penalties etc which you can avoid)
  7. At 9% interest rate, and assuming that the bonus is paid annually at the end of the year, you would lose about 4.5% as interest/time value of money alone. Again some cheap companies will wait for a full quarter before the bonus is paid our. (i.e. the Bonus is evaluated on your performance Jan 2015-Dec 2015 but paid on 1st April 2016.)

Bonus payouts are also not without merits:

1 Since bonus is often tied to the performance levels (personal + team + corporate), there is usually a very high chance to achieve higher bonus.

2 Being paid as a lump sum amount, it is a great morale boaster. It really helps you make the purchase/investment that you always wanted to.

3 Many companies use bonus as a retention tool, as employees usually wait till the Bonus payouts before expressing their desire to quit. Hence lesser value of the bonus, the more control you would have over the timing of the exit.

Hence don’t fall into the CTC (cost to company) trap; always calculate your salary on the basis of BTE (Benefit to employee) basis. A 119% bonus payout at the end of the year is financially equivalent to the same amount being added to your fixed salary. (15% +4.5%)

flipkart ad: “Aapko bhi to photo dekhkar pasand kiya tha”

I was watching the latest series of Flipkart tv ads and I could see a remarkable difference in the product positioning by this market leader and pioneer in India’s E-Commerce space.
1. Unless the rest of the folks, the ads don’t talk about discounts. Everybody (esp. Indians) love discounts, buts its never good for business and till 2011 had created a situation where almost all the online retailers were booking losses and burning cash (rather than generating it)
2. Returns/reverse logistics: Flipkart has one of the best infrastructure and policy for the dissatisfied customer to return the products. However still the current series of ads don’t talk about it. Maybe its like one of those features (like credit card payment, Cash on delivery) that almost all the online shoppers expect the website to offer. Hence they have realized that its no point wasting precious media time talking about it.
3. “Aapko bhi to photo dekhkar pasand kiya tha”
I loved this line as it will strike a familiar chord amongst the entire country where arranged marriages are prevalent. Here the wife effectively convinces her husband that there is nothing new is selecting goods (or even your spouse) by just a photograph.
4. Use of kids: I am not sure why they use it, but kids create a natural curiosity and grabs our attention. Also it helps to communicate that the website is so easy to use that even toddlers can shop.

The shift from discounts, cash on delivery, return policies to the fact that its not too risky to shop online is a wonderful change. It addresses the core issue which keeps most shoppers away from websites, while ensuring that e-commerce not mere discount stores.


valuable piss

throughout European history the amount of piss being collected has strong correlation with the prosperity and strength of the society.
In Ancient rome, Piss (usually human) was the only source of ammonia which was used as:
1. Bleach to keep the clothes white
2. Toothpaste to keep the tooth white.
Richer the city, the more piss was collected/transported to the city so that the rich could afford these luxuries. BTW till about a 100 years ago, ammonia was the key active ingredient in almost all the toothpastes.

In the medieval ages, gun powder was the symbol of power and wealth. More the number of guns were shot, the more blackpowder was needed. One of the most important component of blackpowder was saltpeter which was almost exclusively made from Piss (but animal piss this time).

In the modern era, there were cheaper ways to produce ammonia and nitrous oxides, but that never diminished the importance of these compounds. Ammonia is used even today in Urea and almost all fertilizers, while nitrous oxides are still the most important ingredient of all explosives, bullets and weapons. Its even said that the Allied bombing lead to destruction of several important sites that produced Nitrous oxide. This severely reduced the supply of nitrogen for Hitler and almost all was being diverted to make explosives. This caused a famine which started a chain of events leading to invasion of Russia (for its fertile land and supply of Potato and wheat)


new job vs. new shoe

Switching jobs is sometimes similar to switching shoes.
The old shoe, no matter how expensive, wears off after a few years and after that it only slows one down. It only gives sores, blisters and pains and no longer meets your needs, goals and expectation. A crappy shoe shows its true color months (sometimes only weeks) after you discard your old shoe and change into this one.
No shoe is no blessing either. During the initial adjustment period, you only regret and have remorse which makes one long for the old shoe which we had so carelessly left by the dumpster. Some people even manage to retrieve the old shoe and beg for it to be your best buddy again. However once the initial adjustment period is over, more often then not, one finds the new shoe to be a better fit for your toe. This time the only thing you would be thinking was, why the hell did I wait so long to try this one out. However by the time you are 100% sure that you and your shoe are fit for each other, the shoe starts fraying.

On a serious note:
Employees ofter overestimate their capabilities when they threaten to quit, but one should always remember that the corporation will continue to exist (and hopefully flourish) long after you have parted ways… much in the same way that you will continue to grow and flourish even after you have severed your ties with the current job. The job never defines a person, its just a stepping stone preparing you for bigger and better things (both professionally and personally)

5 elements of wise reasoning

1. Willingness to seek opportunities to resolve conflict;
2. Willingness to search for compromise;
3. Recognition of the limits of personal knowledge;
4. Awareness that more than one perspective on a problem can exist;
5. Appreciation of the fact that things may get worse before they get better.

True Retirement Age

It is not uncommon to witness someone to be employed by the state (government/PSU jobs) till the age of 60 and then would retire with full benefits and pension. However that was not the end of their career, through their experience, contacts and hard-work they continued to work for another 10 years or more as part-time, consultant, board-member, problem solver, or even as a full time employee. I have also known a businessman/entrepreneur who loved this creation so much that all the 3 generation still come to office. The founder of the enterprise intends to pass on the keys of his empire to the kids of his grandson. (By which time he could be as old as 90 years of age)
However I am also seeing people, who are in their late 40s and early 50s. Many of them have been marginalized in their careers and a couple of them are between jobs. What came as a rude shock to them was that when they sit in a job interview:
1. Most likely than not, the potential boss would be younger and might not have as rich an experience as you would have. In a society like India, where the number of grey hair determines your seniority and respect in the society, this could be quite intimidating. After all bosses would never like to create a situation where their authority could be challenged.
2. You might try to project yourself as the intellectual powerhouse, but all along the company might be skeptical of your ability to adapt to the new job, culture and skills that are needed. They would have doubts on your agility, and might prefer a younger candidate.
I am not saying that there are no jobs available, but all I am saying is that the universe of people looking for someone like you might be smaller than what one might have anticipated. Hence it is important to plan for the greyer years.
1. Financial planning: With soaring undergraduate, postgraduate fees and early retirements, ones career has shrunk dramatically. Hence try to save 1/3 to ¼ of your salary every month. Also try to utilize your second income, bonus etc. into asset building investments. This way you always would have enough to sit out a rainy day.
2. Networking: kick your cocoon away and talk to people. Try to broadcast your abilities and make friends with people outside your company and industry. World is a small place and you never know from where does the next opportunity comes.
3. Be in the good books. People switch careers and jobs so often that it is impossible to truly compute the potential downside of one’s actions. The fresher you hired a couple of years ago might be your new boss (and vice versa), the unlikeliest of the person might be asked to provide a character/professional verification.