Yes, the Central Government Support to J&K has been extraordinary

Among the incoming flood of opinions, after BJP President Amit Shah announced the abrogation of Article 370, there were hot takes on the lines of ‘India spends extraordinarily disproportionate amounts of money on J&K. Now, J&K will be a normal state, and the government can restore fiscal balance’. Unfortunately, it is not happening any time soon.

The fact is that the central government’s spending in J&K and Ladakh post-Article370 would need to increase to have any chance of stabilizing the region. There are parallels to the Xinjiang region of China, where there is no guarantee of peace, even after massive migration and spending.

The fact also is that the Central government support to J&K has been extraordinary (excluding security spending in the region). Several factors are responsible for this, including but not limited to:

  1. J&K was one of the 11 ‘Special category’ states (some criteria: difficult terrain, low population density, and strategic location along borders with neighbouring countries).
  2. There were persistent errors in budgeting, savings, excess expenditure and expenditure without provision. (Source: CAG Report)

A question arises: how extraordinary has been this support? We can answer this by looking at the state’s revenue composition.

State revenues are sourced from (i) the state itself, and (ii) the central government. The following chart illustrates the various heads of central fund transfers to state governments:

Comparative data on State Finances in 2018

(Source: PRS Legislative Research)

Share of state tax revenue as a percentage of total revenue: J&K was lowest at 17%. The state was not pulling its weight.

Revenue composition of states (2017-18): J&K was highest, receiving 57% of its revenue through central government grants. Majority of the state’s expenditure has been financed through central grants.

Looking at the data above, it is fair to characterise the support to J&K as extraordinary. Although, the political question remains – whether it was excessive, adequate or lacking.

Dive deeper:

  1. Special Category status and centre-state finances
  2. Central Transfers to States: Role of the Finance Commission
  3. Central Transfers to States in India Rewarding Performance While Ensuring Equity
  4. Jammu and Kashmir Budget Analysis 2018-19

Android Oreo Review: An iOS User’s Review (Introduction) – BirchTree

Matt Birchler:

I have been using the Google Pixel 2, which is the latest and greatest Android phone out there. I chose this phone for my experiment because I wanted to leave no room for my conclusions to be colored by a bad OEM skin on top of Android or by a lower quality phone as my comparisons to iOS should be as fair as possible. Since I wanted to review Oreo, a Pixel was my only option in October, and thankfully that Pixel has top of the like specs and the best Android camera out there. This is Android how Google intended it.

The very, very TLDR version of my review is as follows:

Android has grown up considerably over the last decade. It’s no longer a complete disaster of a user experience, and some elements have actually surpassed what Apple is doing with iOS. Notifications are much better than they are on iOS and Google Assistant is more accurate and more helpful than Siri. That said, there are a million little (and not so little) things that truly make Android a sub-par experience for me. Your mileage may vary, but the abysmal third party software available for the platform, poor inter-app communication, and countless stability issues make Android a place I only want to visit for a month or two per year, not something I can see myself using full time.

I have been wanting to get out of my echo chamber lately and this review is just what I needed. It recognises the strengths of both platforms and describes the issues beautifully.

Bitcoin’s civil war threatens to blow up the cryptocurrency itself


For the last several years, technical experts have been arguing over how to adapt the currency’s software to allow it to handle more transactions and meet the increased demand. The debate has recently become so heated that it threatens to throw bitcoin itself into chaos, a phenomenon most clearly seen in the recent plunge in bitcoin’s price.

… the very real possibility of a fork sent bitcoin traders scrambling to sell their holdings. Bitcoin fell 24% over two days, from March 16, though it has recovered significantly.

The issue is that Bitcoin needs change. The debate is over the blocksize, and any change would have technical, economical and philosophical implications.

One could argue that this is part of the “growing-up” of the technology but in my opinion, if this constant battle keeps up, Bitcoin’s future seems dismal.

The First Trillion Dollars is Always the Hardest

Horace Dediu:

In its first 10 years, the iPhone will have sold at least 1.2 billion units, making it the most successful product of all time.

Look at this graph ↓.

The revenues from iOS product sales will reach $980 billion by middle of this year. In addition to hardware Apple also books iOS services revenues (including content) which have totaled more than $100 billion to date.

This means that iOS will have generated over $1 trillion in revenues for Apple sometime this year.


iOS users spend more and are more loyal than those on alternative platform thus qualifying the platform as “premium” and thus adding to its value in the eyes of developers, content producers and service providers.

As the install base of iOS increases and as users hire the devices to do more and spend more time with them the virtuous cycle of value creation will continue and accelerate.

This ↑. This is what iPhone (and by extension Apple) detractors don’t understand.

… Android was originally seen as the “good enough” iPhone, potentially disrupting it, it turns out to be the ersatz iPhone. Chances are higher that users will switch from Android to iPhone and not the other way. Again, the reasons have more to do with the ecosystem and quality of users (which are hard to measure) than with the hardware (which is easy to measure.)

Opendoor: A Startup Worth Emulating

Opendoor is a US-based real-estate startup with the promise “With Opendoor, your home is sold the minute you’re ready.”. Here is an article talking about the risks associated with the company and the sector in general.

Ben Thompson:

Opendoor is unique in two respects:

  • First, Opendoor is focused on sellers, the party with the least leverage in a typical residential transaction. Real estate agents sell lots of houses, buyers can choose from lots of houses, but sellers only have a single house to sell, which means the cost of any delay or complication falls on their shoulders. Opendoor relieves that burden by making an offer for the house based solely on an address and questionnaire; if the seller accepts Opendoor will send an inspector to verify the house, agree on any necessary repairs (which are paid by the seller), and close the deal as soon as the seller wishes.
  • Second, Opendoor explicitly charges sellers for having replaced total uncertainty with a bank wire: not just the same 6% that typically goes for buyer and seller agent fees, but also an additional 0-6% for “market risk” — i.e. dealing with the uncertainty of actually showing and selling the house — along with the aforementioned repair costs.

Snap’s Current Hype Machine Could Hurt It Post-IPO


…Snap has been unable to break out of the “experimental” portion of many advertisers’ budgets, according to the agency executive. These budgets, the agency executive said, get portioned out based on a 70–20–10 rule: 70% of advertiser budgets is spent inside platforms that are tried and true, 20% is spent with platforms that are still emerging, and 10% in spent in the next/innovation bucket. “I would bet that most still put Snapchat in that 10%,” the agency executive said. “For us, Facebook is in that 70% and Snapchat is nowhere near that.

Snapchat, by many accounts, is the most innovative company in tech right now. That may not matter if they cannot develop a business model.

The Macintosh Endgame

Jean-Louis Gassée:


Instead of racing to the bottom as the market plummets, Apple appears to be taking the “high road”, in a sense: They’re taking refuge at the high end of the market by introducing new, more expensive MacBook Pros, with a visible differentiating feature, the Touch Bar. This is known, inelegantly, as milking a declining business, although you shouldn’t expect Apple to put it that way.


But what would an Ax Mac mean in the real world, to software developers? The mind reels at the thought of yet another upheaval as developers rush to convert third-party Mac apps. Or will they? With hundreds of millions of iOS devices sold year after year, and ever more software engineering resources allocated to the platform, iOS-based hardware will win the day. The billion dollar question, here, is when? As Horace Dediu a.k.a. @asymco put it in a June 2014 tweet:


In the end, iOS numbers make the decision. For its part, Apple will stay out of the way and let customers — and developers — decide when it’s time to buy the last Mac.


Can India really become a cashless society?


What is fuelling this optimism (shown by Paytm and other companies) is that India is the second largest market for smartphones behind China. This has coincided with a rapid rise in internet users. The country presently has more than 450 million internet users, a number expected to touch 700 million by 2020.


But despite this sharp uptick in mobile and online payments, this overall user base is still very small for a country with a population of 1.25 billion people. And India still has a long way to go to before it can become a major cashless economy.


The country has more than 24 million credit cards and 650 million debit cards. The number of debit cards has been growing steadily but most people only use them to withdraw money from ATMs instead of using them to make payments.

Fun fact:


Bitcoin was supposed to change the world. What happened?


Bitcoin was supposed to render financial institutions obsolete

Too ambitious. Agreed.

There’s been little to show for $1 billion in venture capital investment

Though not readily apparent, learning is an important result.

Bitcoin never resolved its constitutional crisis

That’s why everyone is exited about blockchain and not just the Bitcoin community itself.

“The Bitcoin community has become more boring,” Sirer said. “That’s a good thing. We used to see a lot of scams. There are not so many scams anymore.”


He pointed to a couple of areas where Bitcoin experiments might still bear fruit. One is in remittances.

Totally! To see this in the Indian context check out my paper.