Best of BS Opinion: Risks and Outcomes in an Uncertain Future

Here's a quick capsule of the best of Business Standard's opinion pages today for your quick reading.

  Hello, and welcome to BS Views, your daily insight into our insightsRisk-taking is often considered an admirable quality.  Risk, it would seem, is a good thing, something all must partake of at some point of time in life. However, as our editorial pieces today show, it is not just risk, but calculated balancing that is more important. Because, as we know, there is only a thin line between risk-taking and bad outcomes.  

Take our first edit, for example. The draft data regulation bill has an ambitious ambit but it leaves out critical facets of what the regulation should be about, especially considering it involves the data privacy of a billion-plus populace. While the rules give principals much more control over their personal data (PD) than now, there remain gaps. The draft rules give sweeping, but undefined powers, to government to collect, hold, and process personal data for broadly defined purposes. Businesses will face challenges in the implementations of new provisions, leading to more costs. Our edit argues that the rules must ensure that India’s data security practices don’t expose citizens to more risk.    Our second edit deals with an entirely new beast: there is now considerable heterogeneity between rural and urban households in terms of risk appetite. As market-linked instruments gain traction, riskier financial assets, while offering higher returns, expose households to uncertainty. This change in behaviour can create challenges for the banking system in mobilising low-cost deposits and may affect their margins over the medium term. But greater availability of risk capital can bring the cost of capital down for businesses. Our edit argues that it is critical that investments in capital markets are well-guarded and investors are made aware of the risks. 

 

Our columnist Ajay Shah uses the example of the current see-saw of currency rates to make a broader point about the risks involved in too much government interference in trying to provide a stable playing field. He argues that the end goal must always be the evolution of a stable economic engine, one that allows industry to compete in a risk-filled environment and succeeding rather than the government stepping in to ease the way. The second approach will stifle competition and only allow for a limited success. The Reserve Bank's currency management only enfeebles Indian firms, lulling them into complacency instead of taking on the risk of competing, he points out. Sunita Narain, too, looks at the risks of climate change and the political language all around us today. When companies moved their manufacturing abroad to places like China, they offshored not only costs but also green targets to places that had more lax environmental regulations. As politics turn more nativist, and big tech dictates, ironically, free speech, we must consider the costs – both business and otherwise – of such matters on climate change because 'going green' will fly in the face of 'foreign-made'. Without resolute action, we risk throwing our coming decades into a vortex of spiralling climate change impacts, she says.  

And for our last piece, we look at the history of the swashbuckling Vikings, who risk-taking voyages took them far from Scandinavia to Greenland and England and other climes. However, Eleanor Barraclough's 'Embers of the Hands: Hidden Histories of the Viking Age', notes that beyond the voyager-warrior reputation of the Vikings is a fairly risk-averse population that occupied itself with noting down the vagaries of daily life. In his review, Timothy Farrington points out that the book is a nod to the more mundane diary-type entries of those that stayed behind. Barraclough, he says, focuses on the people left out of these “official stories,” on the aspects of life lost “in the cracks of history.” In other words, the ones that stayed behind and built a historical record while the risk-takers took the glory.  

And that, dear readers, should serve as a lesson to all of us that risk-taking, as glamorous as it may sound, must always be balanced with saner voices.  

Thank you for reading!