I visited Mehendipur last week. Located around 100 km north of Jaipur, Mehendipur is a small kasba off the Agra-Jaipur highway. You must thank your stars if you haven’t heard of this place. Mehendipur houses a shrine that draws millions of people every year who come there to exorcise evil spirits.  

A vast number of devotees alight at the nearest bus stop (about four kilometres away from the town), fall prostrate on the ground and scrape through the dust and the tar of the lone street all the way to the shrine.

Some walk barefoot under the high desert Sun for days to make it to the shrine. To atone for my share of sins, I took a non-AC taxi from Jaipur.

Why was I found last week at such a place, that too on a holiday? I don’t believe in evil spirits. But I don’t believe in true love either, though people say it exists. And I won’t mind checking the existence of these or other paranormal activities — which is why I landed up in the mofussil town last week.

On the day of my arrival, my co-traveller who is also an old friend told me that the evening Aarti that day is the occassion when the Mahant of the temple will exorcise spirits off the troubled subjects.  

That night, my friend and I left our inn half an hour before the scheduled time and trudged our way to the shrine. Weaving through a maze of dark, narrow alleys, we reached a large field that most likely functioned as a school playground by day.

I noticed hundreds of people — men, women and children — who stood almost motionless forming a crowd that stretched accross the playground. Making our way through the sea of people, we reached a courtyard that had a small temple nestled right in the center of the enclosed space. 

A raised cement platform surrounded the main temple, and an iron fence lined the main courtyard. Between the raised platform and the iron fence, sat scores of people who were said to be possessed by the evil spirits. My friend had it all worked out. Minutes before the Aarti, he gestured to me that I must jump over the iron fence and join the “possessed” devotees on the other side, so I could “get a closer feel” of the rituals. Then, ignoring my mild protests, my childhood friend tossed me over into the welcoming bed of hands raised in the air on the other side of the spiked stucture. 

Once inside, I managed to have a look at people around me.  The entire “possessed” group of devotess consisted solely of women — mostly young girls, except perhaps for two or three women who would be in their early or mid-thirties. To my dismay, the only man I managed to spot in the assembly lay writhing on the floor right next to my left foot. The unfortunate soul had his legs tied together with an iron chain, I noticed later. 

I looked back and thought my friend flashed an evil smirk in my direction.

Shortly after, a diminutive man emerged from the temple, held up a huge brass gong in the air and started pounding it with a hammer. One by one, some of the women seated around me rose to their feet and began swaying their heads to the sounds of the chanting and the gong.  All this while, I stayed crouched on the ground.

Soon enough, the chanting, the gonging and the head-swaying reached a spine-chilling crescendo.

Meanwhile, a strange thing had happened. I was not afraid anymore.

I had begun to notice a number of similarities among the head-swayers around me.  

To begun with, not one of them was moving in a reckless fashion – each one was careful not to hurt the one moving next to her.

Not a single girl had looked ungainly all this while, even when carrying out one of the most unsightly of acts known to mankind, well, at least to me.  Each of the girls had tied her dupatta around her waist like she knew what the evening had in store for her.  And all of them had long, well-oiled hair that had been left untied — it lent a haunting aura to the whole sight.

But the most striking similarity of all had to be their physical attributes. 

All of them — young and old — were pretty. Not above-average pretty, but head-turning pretty (pun unintended).  They had sharp features, high cheekbones, well-set eyes, shapely figures – every single woman was attractive in her own way (this factor is not lost on the town folk. Local lore has it that evil spirits prefer the company of pretty girls).

Was I reading too much into this? Is there something more to this phenomenon? I have my theories and I am sure believers have their theories too. One of mine goes thus: hell is life of a girl growing up in a small Indian town.

But we will spare everyone the profundity and try and find some peace in the thought that, fortunately for some small town girls, there are places like Mehendipur where they can let go of their demons, once in a blue, full moon. 

As for me, I now want to believe in ghosts. Still not sure about true love, though.

Now that election season is upon us, we’re going to be subjected to the usual rhetoric on caste discrimination – we’ve already heard the great Varun Gandhi’s vitriol on the other religious kind of rhetoric (it’s a moot point whether the BJP which is desperately looking for allies would pushed into supporting Varun only because the Election Commission’s actions made him a national hero). So, while getting in her Brahmins, Mayawati will go on about how she will get the Dalits a better deal; Lalu Prasad will do the same for the OBCs; and so on.

But how real is the discrimination and, to that extent, how much has electoral representation helped alleviate this? That is, are the OBCs in Bihar any better for having had Lalu and family in charge of the state? There is the argument that Lalu being in power gave the OBCs a ‘voice’ – they can now go and report a crime against them in the police station, for instance – and ditto for the Dalits and Mayawati, but I’m not sure how far you can live on ‘voice’ if it doesn’t get followed up quickly enough with some income. If it did, Digvijay Singh would never have got voted out in Madhya Pradesh.

Unfortunately, the data on political representation is too scanty to arrive at a firm conclusion – we know, for instance, that Mayawati is a Dalit leader but if 50 per cent, say, of her MPs/MLAs are Brahmins, we can hardly put that down as Dalit representation, can we? Apart from the reserved SC/ST seats, there is no data on what proportion of MPs/MLAs are from different castes. That’s clearly the subject of a PhD thesis or two, given that it can’t be too difficult to figure out the castes of a few thousand MLAs/MPs based on their surnames. On the face of it, though, the evidence is likely to show that political representation doesn’t make more than an iota of a difference. The average income of OBC households across the country is around Rs 60,000 (I’ll come to how I know that in a minute) while that in Bihar is just two thirds of that at Rs 41,000. Assuming, and I’d appreciate it if political scientists gave me more information on this, that most of Lalu’s MLAs were OBCs, this is as clear a rejection of the political-representation-helps’ thesis.

Take the other argument made, while talking of the need for OBC reservations a few years ago – OBCs are 33 per cent of the population (in later NSS surveys, more castes were added to the OBC list and so the proportion of population shot up to over 40 per cent) but they’re just 24 per cent or so of what are called ‘professional’ jobs. Clear evidence of ‘discrimination’. Economist Surjit Bhalla looked at the data from the government’s own National Sample Survey (I wrote up the stories in this newspaper) and it turned out there was no discrimination. Here’s why: OBCs were 32 per cent of the population, but they were just 26 per cent of those who’d passed high school … the rest of the numbers pretty much flow from this one – the OBCs were 24 per cent of those who were enrolled in colleges and 24 per cent of those in professional jobs. So, if there’s a problem, it lies in the proportion of OBCs passing out of schools, it is not in reservation in colleges or in jobs.

My friend Rajesh Shukla who is the Chief Statistician of the National Council of Applied Economic Research (the only organisation in the country to do a large annual income survey) and I are, in fact, working on a data-based book on income/expenditure/savings patterns of various castes in the country – hopefully, we’ll be done in a couple of months. While it’s early days yet, what’s interesting is that for most areas – income/expenditure/etc – the caste factor is a lot less important than others.

A sneak-peak at one or two sub-heads in the book will give you some idea of what I’m saying. Take the income levels of those working in agriculture. SC/ST families here have income levels that are around half those of the upper-caste Hindus, but break this up into land-ownership, and you’ll find this is what accounts for much of the difference. If you’re still not convinced, look at the income levels of those employed in the modern services sector – the income levels of SC/STs is broadly similar to that of the upper castes! I could go on, but you get the picture – the SC/STs in modern services are as educated as the upper castes are, and this is what is primarily determining salary/income levels.

So, if you’re interested in reading about this kind of stuff, do write in, book your copy now, and that kind of stuff!

Suicide, it is said, is the last remaining unresolved philosophical challenge. This week, Nicholas Hughes, the son of Ted Hughes and Sylvia Plath, hanged himself at his home in Alaska. He had been battling depression for a long time. Nicholas was unmarried and without children. Some call it the curse of the Plaths. Sylvia put her head inside an oven in 1963, when Nicholas was barely one. The woman her husband was having an affair with at the time of Sylvia’s death also committed suicide in exactly the same way, six years later.

As 2005 drew to a close, a shocking case of group suicide emerged in Japan. Three men and a woman were found dead on Christmas day in a car parked on the side of a forest road in Tokigawa, Saitama Prefecture. The bodies of seven young people had been discovered in a van in the Saitama mountains to the west of Tokyo on October 12 the previous year.

Both incidents are believed to have been triggered by the meeting of lonely hearts on websites that assist group suicides. Wikipedia informs that the most common method of suicide in such cases is carbon monoxide poisoning achieved by burning charcoal briquettes in grills or stoves within an enclosed area, such as a small sealed room, tent, or car.

Group/mass suicides are not a new phenomenon. The most publicized case in recent memory is of thirty nine people who killed themselves in a hilltop mansion near San Diego, California back in 1997. They believed an alien spaceship was hiding behind the Comet Hale-Bopp and drugged themselves in order to reach it. The victims were self-drugged and then suffocated by other members in a series of suicides over a period of three days. Marshall Applewhite was the leader of the gang, which called itself the Heaven’s Gate cult. He died alongwith the others.

The deliberate, planned suicide has long been lauded in literature. Japanese playwright Yukio Mishima painstakingly prepared for his suicide for over a year — an act that was arguably connected to his political motives.

In literary fiction, the pull of suicide is celebrated as a gentle force that calls to its adherents in moments of epiphany. When Mrs. Dalloway walks down Bond Street one morning, the sight of people doing normal things–buying flowers, jaywalking, taking kids to school–overwhelms her. What if all this were to carry on without me, she ponders. The world will keep moving, and this realization, in the middle of a busy thoroughfare, is no less than a shock to her. A little later, her thoughts leading naturally to their final destination, she says to herself, simply, without irony: “It is possible to die.”

Years later, when Laura Brown (from The Hours) is reading Mrs Dalloway and comes across this passage, the glassy clarity of the words pierces her, and she succumbs to their spooky pull–leading to unintended consequences that will play out over many decades.

Virginia Woolf isn’t the only writer who induces suicidal feelings in readers. Sample this from David Mitchell’s Cloud Atlas:

The lovelorn, the cry-for-helpers, all mawkish tragedians who give suicide a bad name are the idiots who rush it, like amateur conductors. A true suicide is a paced, disciplined certainty. People pontificate, “Suicide is Selfishness.” Career churchmen like Pater go a step further and call it a cowardly assault on the living. Cowardice is nothing to do with it - suicide takes considerable courage. Japanese have the right idea. No, what’s selfish is to demand another to endure an intolerable existence, just to spare families, friends and enemies a bit of soul-searching…

…Strip back the beliefs pasted on by governesses, schools and states, you find indelible truths at one’s core. Rome’ll decline and fall again, Cortes’ll lay Tenochititlan to waste again, and later, Ewing will sail again, Adrian’ll be blown to pieces again, you and I’ll sleep under Corsican stars again, I’ll come to Bruges again, fall in and out of love with Eva again, you’ll read this letter again, the sun’ll grow cold again. Nietzsche’s gramophone record. When it ends, the Old One plays it again, for an eternity of eternity.

-Robert Frobisher, Letters from Zedelghem

I  was at my daughter’s school this morning to collect her results. While children were busy discussing their holiday plans, parents were huddled together and discussing grades. “It’s A, yaar,” I heard one of them wearing a particularly long face telling his friend. The response was “you are lucky, it’s B+ for us”.  “Poor fellows. Children shouldn’t let their parents down like this,” my neighbour, whose son studies in the same school, whispered .
It’s usual, I thought, as I am used to seeing over-anxious parents discussing their children’s grades in a manner as if the sky has fallen. But something about the parents’ conversation this time was curious. Everyone and her aunt were talking in terms of a decline in grades. If it was A earlier, it is A- this time; and if it was B- earlier, it’s C this year.
It’s surely impossible that everybody’s children have done worse than last year? Most children may give a damn about grades, but everybody? After all, some students were indeed coming out of their respective classes with a big smile — the kind of smile that is usually reserved for those with topmost grades.   
But I have read a lot about crisis management. So in my desire to be an ideal parent and prepare my daughter for the worst, I told her that the teachers have become stricter this time and she should be prepared for a lower grade. My daughter was, however, quick to dismiss the concern and reminded me of the gift I have promised to buy this Sunday in case she does better than last year.  
My neighbour, however, soon resolved the mystery about the parents’ apparent concern about grades. After all, they were talking about their own grades at their workplaces. Unlike their children’s exams where the grades are higher or lower depending on the hard work that a student has put in, the results of the exams at India Inc are throwing up only losers this time.
Most companies have just announced the results of their performance appraisals recently and grades ( and consequently increments) are lower across-the-board even if you have put in the same amount of work as last year. The only question is by how much. So, those of you who haven’t got your results (performance appraisals) yet, don’t be surprised if your supervisor is giving you ‘B” this time against ‘A’ for the same level of performance last year.
There are many companies which have taken the grading system to a new level. One of the largest Indian software companies, for example, has gone much beyond the conventional four grades of A, B, C & D. The company has extended it to H, which means every line manager will have eight grades to choose from. So last year’s C grader could well be this year’s G grader, giving the company flexibility to pay that much less. The same company was thinking about reducing the grades to just three a couple of years back to make its performance appraisal system less complicated!
In case this is making you feel depressed, here’s something to cheer you up: how many of you are buying gifts for your children this Sunday?

What is the reason for India’s declining growth rate?
It is the ripple effect of the global financial crises and the follow-on global economic downturn.
(Read: We are not responsible).
What is the reason for the healthy growth in the first few years of this government?
Here is what finance minister Pranab Mukherjee said in his budget speech last month: “For the first four years of the UPA government, our policies ensured a dream run for the economy with GDP recording increase of 7.5 per cent, 9.5 per cent, 9.7 per cent and 9 per cent from fiscal year 2004-05 to 2007-08.
(Read: We are responsible).

What if we were just enjoying the fruits of the global economic boom in the first four years of this government and are now suffering the impact of the global economic slowdown!
(Read: Perhaps the impact of policy has been limited in either direction - upward or downward)

December 10, 2008 – Former Nasdaq chairman Bernard Madoff’s Ponzi scheme discovered by his sons and reported to federal authorities

December 11, 2008 – Bernard Madoff arrested, later put under house arrest

March 12, 2009 – Bernard Madoff confesses to $65 billion Ponzi scheme. Court verdict: Jail and faces maximum penalty of 150 years. Assets frozen and prosecutors eye wife’s assets as well.

January 7, 2009 – Satyam Chairman (now former) Ramalinga Raju self-confesses to Rs 7,800 crore scam

January 9, 2009 – Ramalinga Raju surrenders, arrested by Andhra Police (by the way, he had a date with Sebi next day)

March 14, 2009 – Newspaper reports suggest that Raju’s Madhapur den is being raided by CBI, implying there are a lot of loose ends still being tied up. And the fact that there are a number of agencies, including the Andhra police, CBI, Sebi and others investigating, things will not get any simpler.

Prima facie, two similar cases. Madoff ran a Ponzi scheme and conned investors. Raju conned investors who had bought his company’s shares by ‘cooking up a balance sheet’.

While the US government has already arrived at a number ($65 billion) for Madoff, we still have no idea about the money lost by investors in Raju’s case.  Perhaps, we will never know.

In Madoff’s instance, the case has been heard, the verdict given and is up for appeal. As for Raju, the buck is still passing around.

Newspaper reports suggest that Raju is living a raja’s life in his special cell. His brother Rama Raju is cooking food with help from (former CFO) Srinivas Vadlamani. Cooking accounts must have prepared them for this role anyway. They are even allowed limited quantities of cakes and biscuits (isn’t Raju diabetic?).

Meanwhile, his lawyers are busy telling the courts how the Rajus are suffering in jail, pestered by rats and bandicoots.
With several agencies waiting to charge him on different counts, all that Raju is likely to face is a lot of court hearings, as Sunny Deol famously said in Damini, ‘Tareeq pe tareeq’.

But the corrupt have never gone unpunished. After all, Sukh Ram was fined a princely Rs 2 lakh and sentenced to three years in jail… 13 years after the case was first reported.

Of course, it is a different matter altogether that many would not have even remembered why Sukh Ram was accused or fined. It is a tragedy that over the years, public amnesia has allowed many an issue to die a quiet death.

Raju too, will get his just desserts we hope… never mind if the dessert melts by then.

It’s been over two months since B Ramalinga Raju confessed to cooking Satyam’s books for seven long years – for 28 quarters he faced shareholders, research analysts and his employees with a straight face. That he is guilty of the monumental fraud, everybody is convinced. That he is all evil, not everybody buys that. 

People in Hyderabad still talk without reserve about the excellent work done by his charitable arm, EMRI, which runs an emergency ambulance service throughout the state. Help reaches any person in distress in less than half-an-hour. One-third of the calls are for deliveries. The drivers never accept a tip. In congested areas, paramedics reach the patient on two-wheelers. A man who gave almost ten per cent of his time to this kind of work, how could he defraud the company he had founded? Disbelief and shock linger on. 

There is another thought gaining ground. Ramalinga Raju inflated the accounts only for the good of Satyam, so that it could hold on the marquee clients. He did not take money for personal enrichment. In fact, he pledged his shares to fill the gap. And once the situation became unmanageable, he took the entire blame upon himself so that Satyam could survive. At least this is what his fiends would have us believe. 

All of this is yet to be heard in a court of law. So it is still early to jump to conclusions. But some things in this version do not add up. Ramalinga Raju said nobody else was aware of the falsification of bank deposits, except his brother, Rama Raju, Satyam CFO Vadlamani Srinivas and himself. What about the Satyam employees who handed over the certificates (which now clearly appear forged) to the auditors? What about the auditors themselves? For 28 quarters they failed to find anything amiss! 

The real profit margins that Ramalinga Raju talked about after removing the false accounts were ultra-thin. The industry average is far superior. If this average is used, Satyam’s actual bottomline would appear much better than what Ramalinga Raju claimed. What about the banks which must have got the Satyam annual reports which carried details of the deposits? Did they not bother to check the numbers? 

What about the family members? The shares in Satyam were held by their holding company called SRSR Holdings? Did they not enquire why the shares were pledged? To what use the money so raised was put? The investigating agencies have their hands full. The sale of Satyam will not be the end of the matter. 

I completed my engineering in Gwalior but attended the first year at Indore’s SGSITS. This was 2001, the first time that I had stepped outside home. I used to stay in an apartment with two other first-year students. All of us, as unwritten rules demanded, wore to college white shirts whose third button was blue. This was so the seniors could spot us and do with us what they liked.

I stayed not far from the college, so used a bicycle to and fro. One day, when I was returning home, a group of seniors stopped me 200 m short of the apartment and ordered me to reach some place in half an hour. The way it was said left no possibility of discussion. I went home, quickly changed and started on what would become a deeply scarring experience.

The apartment where I was called was located on the seventh floor of a building in a residential area. When I rang the bell, a gaggle of boys –clearly tipsy–opened the door. There, in front of me, was a first-year student, in complete undress. My heart began pounding rapidly, and for a split second, I wanted to dash for the door and escape. But that would have only exacerbated matters.

The first thing I was asked was the full form of SGSITS. When I answered, I was slapped really hard–twice–on the face. “Be louder,” said one of the boys. I did as told. Two more slaps. “Not so loud!”

Then, weirdly, I was asked the names of national newsmagazines. One of the seniors said, “Who is the editor of ‘India Today’?” “Aroon Purie,” I said. Another slap. “It’s Prabhu Chawla, you dumbass.”

I was now asked to take off my shirt. I must have looked like I had seen a ghost, because one of them said, “Don’t worry, we won’t do anything.” It was so vague it was scary. I looked at the other first-year student. He was beyond the stage of reacting. He just looked at me–at us–with dead eyes and an expressionless face.

I took off my shirt. My hands were trembling and I felt sick to the stomach. One of the guys offered me a bottle that very clearly contained some form of liquor. Stupidly, I refused. “Don’t be so uptight,” this guy said, and placed the bottle at my lips, making me take a couple of swigs. I could not believe this was happening to me. I, this person who was happy in his room cocooned with a few books, was at the centre of a ragging party that was going from bad to worse.

“Come on, relax. Tell us how many times a day you do it.” I could sense this was turning towards some murky sexual territory, so I kept quiet. One tight slap. “Didn’t you hear him?” another said. I mouthed something–indecipherable even to me. Another slap. All of them started laughing. What followed was a barrage of expletives in Hindi, which I was made to repeat. There were some other questions along the way which I will refrain from mentioning.

I couldn’t keep track of the time. My mind was simultaneously racing and in a deep slumber, like all this was happening to some other notion of me–an idea, not a person. In the middle of enacting lewd gestures, getting slapped, and repeating Hindi terms for all manner of sexual positions, I could sense watching myself from a distance–a character in a play that was going horribly off-script.

After what must have been an hour-and-a-half, one of them took me to a roadside stall and bought me a samosa. Seeing I was badly shaken up, he said, “Hey, it’s just to break the ice. How else would you guys open up?” His remark was so meaningless, I had half a mind to smash his face. But I was beyond the point of caring. I just nodded, and he then dropped me home on his bike.

This incident defined the remainder of my stay in Indore. I turned completely quiet, walking in college with my head bowed. Once or twice, I saw the other first-year student who was present at the seniors’ that day. We nodded to each other, but the shame and pointlessness of that evening precluded the possibility of anything else. We were brothers-in-arms, in a way, having shared an intense, private experience. If only it had been pleasant! Needless to say, I avoided like a plague the seniors from that evening. Some ice breaking!

Still unable to get back to normal six months into that incident, I sought a transfer to the engineering college at Gwalior. It was a time-consuming, bureaucratic process, and my father made several trips to Bhopal to get it done.

To this day, the weird repercussions of that day keep me company. I do not like getting into confrontations, even I am in the right. I would give up on a stressful situation even if it means also giving up on an opportunity of a lifetime. And I will not read news reports of ragging for fear they will be too close to the bone for comfort.

Even though I am gratefully alive, unlike one Mr. Aman Kuchroo.

Public memory may be shortlived or so the saying goes. However, not many will forget last year’s government ruckus over the issue of encryption of Blackberry from Research in Motion (RIM).

The security officials wanted RIM to lower its encryption from 256 bits to a 40-bit encryption. RIM refused the request, saying that its data encryption is designed so that no third party, or RIM itself, can access the data being transmitted wirelessly. RIM officials were later reported to have reached an understanding with the government since encryption is a “politically-sensitive” issue too given the recent terrorist attacks.

The government now has quietly introduced a policy on encryption — for the first time in India since the advent of the internet.

Clause 84A of the Information Technology (Amendment) Bill, 2008, states: “The Central Government may, for secure use of the electronic medium and for promotion of e-governance and e-commerce, prescribe the modes or methods for encryption”.

Accordingly minor amendments have been made under the Indian Penal Code (IPC) Act too. In Section 118, for the words “voluntarily conceals, by any act or illegal omission, the existence of a design”, the words “voluntarily conceals by any act or omission or by the use of encryption or any other information hiding tool, the existence of a design” shall be substituted; and in Section 119, for the words “voluntarily conceals, by any act or illegal omission, the existence of a design”, the words “voluntarily conceals by any act or omission or by the use of encryption or any other information hiding tool, the existence of a design” shall be substituted.

However, it’s still not clear what will actually take place. Cyber experts are saying that the government needs to be complemented for enacting special provisions pertaining to encryption. However, the real challenges begin now. One of the major challenges before the Government would be how to come up with appropriate secondary legislation that mirrors the aspirations of corporate India regarding using encryption and how further encryption can be utilised as an effective servant for furthering the cause of furthering electronic governance.

Needless to say, the government should encourage bonafide use of encryption for legitimate purposes and should provide an enabling platform for the industry. Similarly, the government must come down strongly against any detected misuse of Encryption.

We need to learn from our own mistakes as a nation. We should not come up with new secondary legislation that would be observed in breach than in observance, being the condition what happened pertaining to the earlier provisions of 40-bit encryption.

With some ecommerce activities not only demanding 128- and 256-bit encryption but also 512- and 1024-bit encryption levels, a 40-bit one will only become one big media joke again.

The impact of a downturn on share prices has been varied. In the 2001 tech recession, seven out of ten sectors lost more than average (65 per cent) of their value between the Sensex peak of February 14, 2000 and low of September 21, 2001. Sectors affected by the meltdown of internet bubble of 2000 fared even worse with information, communication and entertainment sectors losing more than 75 per cent of their value in the recession of 2001.

The implication of current downturn seems to be far reaching than 2001 with eight out of ten sectors having lost more than 65 per cent of their peak value of January 8, 2008. The housing bubble in the US in 2004 to 2006 has led the current recession as subprime housing lenders defaulted due to sharp correction in property prices. The US subprime default has already destroyed $50 trillion of shareholders’ wealth across the globe since January 2008 and still there no light at the end of tunnel.

The 1980–82 and 1990–91 recessions affected valuations less severely. Only one sector lost more than a third of its value in both of these downturns (energy in 1980-82 and financials in 1990-91), and most sectors suffered losses of 5 to 15 per cent. The current recession, which was mainly caused on account of financial default in the US, has affected all consumer discretionary sectors such as automobiles, airlines, retailing and textiles. The value destruction has been across all sectors but consumer related sectors are punished more.

All the past global recessions have provided opportunity to buy equity for bountiful returns over the next few years. In 2001, tech stock prices had crashed by an average of 65 per cent with almost 98 per cent stocks witnessing value erosion. However, in the next eight years, between September 21, 2001 and January 8, 2008 valuation rocketed by over 1000 per cent. Even at the current prices, the average gain from listed securities is still a whopping 300 per cent.

This time things are different though, with almost all global indices trading at multi-year lows. As of now recovery in stock prices is very remote as all economic indicators are showing no signs of improvement, History suggests some possible indicators of the beginning of a recovery coming from the consumer sector. In three of the four most recent recessions, higher consumer discretionary and IT spending led the way.

When real operating profit growth resumes in these sectors, it may be a useful indication that the economy is turning around. However, there is very little evidence that the contraction in the US economy is slowing. The fourth quarter GDP was revised downward, showing that the economy contracted at an annualised rate of 6.2 per cent during the most recent quarter.

Things have now improved, and a bear market rally is on. The big question is when will equity markets return to normal?