The Great Mobile Slum

The Indian Railways is perhaps the largest commercial operation in the country. It is also a monopoly except a few privatized trains (Tejas Express) introduced in recent times. So, why should a giant monopoly incur losses or why should the Rail Minister Ashwini Vaishnaw claim the railways is losing money on subsidies. Firstly, everything PM Narendra Modi does has an element of scam in it. Nothing he does is without a scam. The Railways is no exception. It is the largest running scam for many years. First, let us get some unpleasant facts out of our way – the Indian Railways is perhaps the most horrible rail service in the world. It is lawless, there is no value for reserved passengers, there is no crowd-control on trains and to describe it in short, you could call it a “mobile slum”. I can produce hundreds of videos to prove this point but this one should be a good enough sample (Video: 9 secs):

Vaishnaw constantly claims Railways spend a huge amount to subsidize rail tickets. This implies the Railways makes losses. Why should it make losses? In 2017 the Rail Budget was merged with the regular Union Budget and since then people have no way of knowing Railways plans, fare hikes, new routes or what plans are in the offing. It became a totally opaque and corrupt operation than it was earlier. As for the services, you could say it is probably the same as Somalia or Rwanda. In other words, to put it mildly, the Indian Railways is the BIGGEST SCAM currently in operation in India. For FY24, Railways had a turnover of 2.56 lakh crores. That size of operation with a monopoly leaves enough holes for rats to flourish looting the railways in any operation:

Railways makes profits in anything you transact with it. Book a ticket – they profit. Book a freight train – they profit. Cancel a ticket – they profit. Miss a train – they profit. So much, that over a confirmed ticket of 175/- you will lose 120/- as cancellation charges. You cannot cancel after chart is prepared. In fact, the whole system of cancellations in Railways is a SCAM by itself. It is not cancellation charges, it is rather PENALTY for cancellation. In any cancellation, including waitlisted tickets that auto-cancel, the service charges or GST are not reversed. It’s gone! Absurd, idiotic rules that levy a heavy penalty for the inconvenience you cause the automated-clerks:

 

The biggest scam in recent times has to be the manner in which railways was operated during and after the Covid period. During the lockdown for 2 months from end-March 2020, all trains were also suspended. But as the services slowly returned, the GOI ran the biggest scam that most people completely missed.

# Firstly, the changed all the trains to “Special” and prefixed “0” before the last 4 digits of the train number to give it a new FAKE identity.

# They then increased fares of all classes under the excuse of social-distancing by keeping the middle-berths unsold (although if you issue RAC tickets, MBs will be used anyway).

# They hiked fares of all full-AC trains like Rajdhani/Shatabdi even though they had stopped linen and food services. Covid certificates with Modi’s photo was made mandatory (the GOI later claimed vaccination was never made mandatory). What FRAUDSTERS!

# I had pointed out this entire scam through a thread of tweets and the public also started noticing the scam. So, the GOI stated they will revert the fares to pre-Covid levels. But did they? No, they did not.

In short, the criminals of Modi govt exploited a situation like Covid with falsehoods used to fear-monger to actually loot people:

How in the world does Vaishnaw claim that Railways is subsidizing tickets? It is true that AC classes are charged excessively to partially subsidize the 2^nd Class tickets. The subsidy also comes from freight revenue. But that is also an illegitimate loot. AC fares are further subjected to surge pricing and premium Tatkal which have no explanation offered to customers. Any price any day any whim is their rule. So, let us examine this fraudulent claim of subsidy:

If a plane with a capacity of 180 seats flies 360 passengers with 180 standing, they could afford to halve the ticket price. But airlines have to follow international rules and cannot indulge in such stupidity but our Railways can. Do trains run to capacity? They mostly run with passengers far more than their capacity. A regular Express train with a capacity of around 1000 passengers with 800 2^nd Class berths/seats carries almost 3000 2^nd Class passengers. The unreserved coach or “Gernal” coach or DeenDayal coach carries at least 4 times the capacity on every train. This means a seat for 100/- is sold 4 times, i.e. Rs.400 per seat. So, where in hell is the question of subsidy when the passenger doesn’t get a seat or berth that the train is supposed to give him? This is where the FRAUD is. Like I said earlier, Indian trains are “mobile slums”. A house with one room accommodates dozens of people. This may lead to shortage of water, facilities, garbage dumps – you will find all this in trains too. It’s a simple arithmetical calculation that doesn’t require the brains of Sagarika:

Vaishnaw can argue that the subsidy is over and above the money collected from excess sales of tickets over and above the capacity of the trains. But that would compound his moronery of defending a poor business model, which is what the Railways is.

IRCTC was formed in 1999 and became operative in 2002. It became a listed company. IRCTC handles all the passenger ticketing, catering services and Heritage and Luxury tourism for the Railways. A few years ago it also became a full-fledged travel agent offering air-tickets, bus-tickets, hotel bookings etc. It is fully owned by the GOI (Ministry of Railways). IRCTCs turnover is ONLY computed by the service charges it collects. The fares go to the Railways or the respective operators of the service. It may also get commissions from airlines or other tour operators. In 2024-25, IRCTC’s turnover is likely to be around 1500 crores with a profit of around 350 crores. These are rough estimates. IRCTC has also offered dividends from its profits to its shareholders in the previous years. So, the question is: If IRCTC (practically a “pimp” of the Railways) can regularly make profits, offer dividends and have a good share price in the market – WHY SHOULD RAILWAYS MAKE LOSSES?

The answer to that question of Railways making losses is simple. It is too big a commercial operation handled by one single Ministry and one Lipstick idiot called Ashwini Vaishnaw with no responsibility or accountability at any level or stage. I am not going into a discussion of all the accidents and deaths that Railways cause or the deaths by stampedes or falling of foot-over-bridges – that incompetence compounds their losses. The Railways is like a kitchen-sieve that we use to filter grains and stuff. It is full of holes that leaks from everywhere with everyone looting it in every operation. There is one report where a person gave a job in Railways for 15 lakhs. If you Google for Railways-Scams, it will run about 3-4 pages on your computer.

Over 50% of Railways expenses are on manpower – salaries, benefits, pensions etc. That is a huge amount considering the revenue from transporting humans is a loss-making business for the Railways while the freight revenues compensate partially for the losses. Consequently, Railways have to be regularly funded from the Union Budget for any capital investment or as additional resources to sustain itself. Of the 17 zones of Railways, 9 zones had an operational ratio of over 100% in 2023-24. So, they do know which areas are making the big losses.

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Horse Sense - Adani & Modani

Disclosure: I have no investments in the stock market whatsoever. Therefore, I do not track stock prices. The fate of stock indexes and businesses do not interest me except to the extent of their being good for our economy and as employers. I have also not read the Hindenburg report on Adani and have no interest in reading it. This post marches to a different drum.

“Behind every great fortune, there is a crime” – Mario Puzo, “The Godfather”.

“The secret of great fortunes without apparent cause is a crime forgotten, for it was properly done” — Honoré de Balzac

A decade ago, I wrote a post on “Horse Sense”. Every person hangs on to an idea or concept and makes it big with foresight or smart work. Bill Gates, Steve Jobs, Jeff Bezos… there are many. Everyone who tells you hard work will get you get there is only half-right. Hard work might make you realise decent results but not rain gold. I consider Amit Shah to be low on talent and mostly a street-level political manipulator unfit for the job of HM. But he has one talent that covers up for all his weaknesses – Horse Sense! Shah clung to the pajama string of PM Narendra Modi right from his Gujarat days to get where he is. On his own merit he wouldn’t have gotten to be a minister:

Horse Sense is simply the intuitive sense to know which horse to bet on and ride. Gautam Adani has that horse sense too. Adani started off as a worker in the diamond business and then into plastics trading. He got his big break when he got the contract for operation of the Mundra port from the BJP govt in Gujarat in 1998. How does a diamond worker or plastics trader get a contract to operate a port? Well, not very different from a comedian becoming the president of Ukraine. But let’s put that aside. Over the years Adani has indeed made a dormant Mundra a successful operation and it now handles the highest traffic in India with the lowest turnaround time for ships. That is indeed a laudable achievement. That obviously gives Adani tons of daring and courage to diversify and undertake all kinds of operations of mega size.

As luck would have it, Adani found a man who thinks a businessman has more courage than a soldier. That is true. Narendra Modi says a businessman, (who either risks his money and in case of India, most business tycoons risk public bank money) has more courage than a soldier who risks his life (Video: 8 secs):

In October 2001, Modi became the CM of Gujarat and that started his association with Adani. And since then, there was no looking back. Adani’s wealth had gone from 2.80 Bn in 2014 to 8.90 Bn in 2020. That’s a reasonable increase. But from 2020 to 2022, his wealth dramatically jumped from 8.90 Bn to 143 Bn to make him the third richest man in the world. That is a seriously phenomenal jump, especially considering businesses struggled across the world due to Covid. Must be some magic potion we don’t understand; at least I don’t. It far surpasses the speed at which Jeff Bezos or Elon Musk multiplied their wealth:

In India, you cannot become a business empire without the blessings and patronage of a political party and their big political leaders. For a long time, the Congress was in power and all the business magnates had no choice but to toe their line or face troubles. The business groups funded Congress and the Congress in turn did them favours, made policies to suit them or overlooked their crimes. No big corrupt businessman ever got prosecuted. And as they became a giant empire, the Ambanis became the biggest supporters of Congress and their sponsors too.

Dhirubhai Ambani had started Reliance in the 1960s but it came to some reckoning as a name in 1975 when they started their “Vimal” factory in Ahmedabad. From being an upper middle class garment brand, Reliance went on to become the biggest commodities player in oil, mobile, foods and so on. They also purchased a lot of govt companies to shore up their balance sheet. Mukesh Ambani had grown so big that he was quoted as saying “Congress toh apni dukaan hai” in the leaked Radia tapes:

As the BJP was born and finding its feet in power, it had no big business house to nurture it. For the first time they found power in Gujarat, the bastion of some of the biggest business houses. The BJP knew the Ambanis were already bedmates of Congress so that they had to either find someone or nurture someone. And may be Gautam Adani had some small connections but that’s how he landed up with Mundra port when BJP was in power in Gujarat. As he slowly grew, Modi was quick to recognise the potential and Adani was also quick to recognise the horse he wanted to ride. That is horse sense. Of course, as a business man, you can get farther with horse sense only if you have some business sense and a vision to dominate the financial muscle in the future. In 2014, as Modi became the PM candidate for BJP, Forbes magazine narrated the story of Adani and his equation with Modi:

In politics, one also needs a bit of luck to go your way. Modi came out of the cloud of the 2002 accusations with a Supreme Court SIT finding and that made him confident to make a run for the PMship. He aggressively lobbied with the BJP bosses to let him run that campaign. The lucky part is; in the last term of Congress, the Ambanis were slowly becoming a little disoriented with Congress too. Although Ambanis attended all the Vibrant Gujarat shows of Modi, they were still aligned to the Congress stable. These events with the oil ministry (And oil had become a big domain for Reliance) did not quite go well with Ambanis. Murli Deora a friend, then Jaipal Reddy an enemy and then another reshuffle just before LS 2014, all left Ambanis and Congress in a flux situation:

The sequence of events shows you that Ambani too tried to get closer to BJP as his relations with Congress were floundering. However, while Modi did not mind, he wanted to nurture Adani as the balancing financial power to Ambani. In politics, you don’t easily trust a camper from the opposing side but build your own business warrior if you get the chance. And that’s how Modi smartly helped Adani build an empire to combat Ambani. As of today, Adani has more wealth than Ambani. And though the Hindenburg report has dented Adani’s credibility a bit and he has fallen to No.7 in the world rich list from No.3 due to erosion of market value, he still remains the richest businessman in India.

Like a said before, India is a Communist, Socialist country regardless of all the nonsense of democracy and free market. Modi is perhaps the biggest Commie India has seen as a PM in all his policies, apart from abuse of caste and religion. There is little doubt that Modi and his govt have breastfed Adani with lucrative contracts, projects and easy funding. From edible oil to ports to airports to containers – I have no idea how many businesses Adani runs. Of course, the funding naturally will be a complex web and maze of operations from India and abroad. It may also explain why Modi & co crawl for puny Qatar. Anyone starting would wonder whether to look at the maze in awe or to not dig in so that you don’t spoil the beauty of it. So, nobody did. SEBI is also conducting some investigation but we know where that will end up. That is why this hue and cry over some Hindenburg report when Adani is poised for an FPO.

During the two year period from 2020 to 2022 businesses worldwide were affected by the Covid interruption. Many small ones had wound up. People lost jobs or had to take salary cuts to survive. Methods of transacting business or work place methods were redefined. Amidst all this trauma and upheaval, only one man in the country (probably even the world) had a dramatic upswing in his fortunes and wealth – Gautam Adani. By December 2022 Adani had 20% of all the wealth of all billionaires put together and his net worth went up 581%. It is simply mind boggling:

To summarise, Adani’s meteoric rise in business and wealth is no accident or mere good fortune. It is a well-planned, well-designed operation by BJP and Modi to prop up a faithful financial giant to combat Ambani. Consequently, Adani too behaves like a gentleman and throws some investments in Congress and TMC and other states to monkey balance. After all, he doesn’t want to get into the bad books of anyone because even “November Rain” doesn’t last forever.

Every brothel needs a pimp. Every political party in India needs a different kind of go-between guy. BJP or rather Amit Shah in recent years has toppled 3 Congress-allied govts – MP, Karnataka and Maharashtra. I don’t think the MLAs who switched to support BJP did so because Amit Shah has a charming personality. The squeaky wheel needs a fair amount of grease. And that’s why every political party in India needs a good Samaritan who has built a complex maze of funds that will grease that wheel. That’s what Adani does for BJP and Modi. Both Modi and Adani just happened to have good horse sense.

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