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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late....

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late.
Inflation does not take away your capital visibly. It does not reduce the number in your bank account. Instead, it reduces what that number can buy. A Rs 100 note today buys far less than what it did ten years ago. This gradual and relentless decline is what truly destroys long-term financial security. The real damage happens when people invest in financial products that earn less than 10 per cent returns, especially over long periods. India’s long-term inflation averages around 6 to 7 per cent. When you add lifestyle inflation - the rising cost of healthcare, education, housing, travel, and personal aspirations - your effective inflation rate is often much higher. So, if you are earning 5 to 8 per cent on your money, you are not growing your wealth. You are moving backward. This is why low-yield products, despite feeling safe, often end up becoming wealth destroyers. Your money appears protected, but its strength - its ability to buy goods, services, experiences, and opportunities - is weakening year after year. Fixed-income products like bank fixed deposits and recurring deposits are essential, but only for short-term goals within the next three years. Beyond that period, the returns simply do not keep pace with inflation. A few products are a financial mess - they are locked in for the long term with poor liquidity and still give less than 8 per cent returns, which creates major problems in your financial goals journey. To genuinely grow wealth, your investments must consistently outperform inflation and achieve more than 10 per cent returns. For long-term financial goals - whether 5, 10, or 20 years away - only a few asset classes have historically achieved this: Direct stocks Equities represent ownership in businesses. As companies grow their revenues and profits, shareholders participate in that growth. Over long horizons, equities remain one of the most reliable inflation-beating asset classes. Equity and hybrid mutual funds These funds offer equity-debt-gold diversification, professional management, and disciplined investment structures that are essential for long-term compounding. Gold Gold has been a time-tested hedge against inflation and periods of economic uncertainty. Ultimately, financial planning is not about protecting your principal. It is about protecting and enhancing your purchasing power. That is what funds your child’s education, your child’s marriage, your retirement lifestyle, and your long-term dreams. Inflation does not announce its arrival. It works silently. The only defense is intelligent asset allocation and a long-term investment mindset. Your money is supposed to work for you. Make sure it continues to do so - not just in numbers, but in real value. (The author is a Chartered Accountant and CFA (USA). Financial Advisor.Views personal. He could be reached on 9833133605.)

“Even after Rana’s trial and sentencing, closure will remain far away”

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The extradition of Tahawwur Rana, accused of aiding Pakistani military officials in orchestrating the 26/11 Mumbai terror attacks, has reopened a dark and complex chapter in India’s fight against cross-border terrorism. His questioning is expected to reveal new details about the Pakistani state’s alleged involvement and the broader Lashkar-e-Taiba (LeT) conspiracy. In Part Two of this exclusive interview, Kiran D. Tare, Editor, The Perfect Voice, speaks with Atulchandra Kulkarni, IPS (Retd.), former Special DG, National Investigation Agency (NIA), to uncover fresh insights into Rana’s role, the missing local links and why the road to justice remains unfinished. Excerpts…


Has any evidence emerged of local logistical support for the attacks?

As of now, no definitive evidence of local logistical support has come to light. Investigations so far have not uncovered any such angle. However, if Rana were to reveal new information during interrogation, it could open an entirely new dimension to the case.


Regarding the Tardeo office, it is worth noting that Rana did once err: he instructed his business partner to process Headley’s passport and visa applications, despite anomalies and inconsistencies in the documents. These lapses, and others like them, may yet reveal further insights during questioning.


Rana was reportedly in touch with Pakistani military officials, including one Major Iqbal. Does such a person exist?

While the precise name may be inaccurate, there is little doubt that the individual exists. The record now includes ample evidence of at least four or five Pakistani officials linked to the conspiracy.


The larger strategic purpose of Rana’s extradition lies precisely in exposing the Pakistani state’s role in the 26/11 attacks—a role that Pakistan has consistently denied. Headley’s interrogation has already helped uncover details that were previously elusive, offering crucial evidence to establish the complicity of Pakistani institutions.

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What role did these Pakistani Army officials play?

Their involvement was substantial. Major Samir, an officer of Pakistan’s Inter-Services Intelligence (ISI), met Headley on several occasions and maintained regular contact with him via telephone and email. A senior ISI functionary with known ties to the Lashkar-e-Taiba (LeT), Samir Ali sought to leverage Headley’s access and connections to advance terrorist objectives.


Samir Ali first introduced Headley to other Pakistani officials. Major Iqbal, for instance, connected Headley to Lieutenant Colonel Hamza, who provided him with financial support and instructed him to strictly follow Major Iqbal’s directions. Hamza, in turn, was Iqbal’s superior and a key enabler.


Brigadier Riaz, another ISI officer closely associated with Zaki-ur-Rehman Lakhvi of Lashkar-e-Taiba, and Colonel Shah, the handler of a figure known as ‘Pasha,’ also played prominent roles. Collectively, these men formed the operational and logistical backbone that enabled the planning and execution of the Mumbai attacks.


Was Hamza the main planner? Is there any official connection between LeT, Rana, or Headley?

Yes, Hamza played a very active role, though Colonel Samir Ali was more operationally active on the ground. And without doubt, Headley has clearly deposed about his links with Lashkar-e-Taiba. He testified that he would visit Khyber Pakhtunkhwa, along the Pakistan-Afghanistan border, ostensibly for drug-related intelligence gathering, but he was, in fact, recruited by Lashkar as early as 2002. For many years, he simultaneously worked for their drug agency and Lashkar-e-Taiba. His depositions revealed a wealth of insider information, including, for example, that Ishrat Jahan was a Lashkar-e-Taiba operative. Given Headley’s deep links with Lashkar-e-Taiba, it is strongly implied that Rana, too, had connections with Lashkar through him.


Headley has said many things. The whole conspiracy seemed designed to look like a Hindu terror attack. Whose idea was that?

Having served in intelligence, I often say that it is a matter of rare fortune for any country to find an agent as resourceful as Headley for Pakistan. He was initially tasked only with reconnaissance — to survey locations and send video footage. But he went well beyond his brief. For instance, he visited Siddhivinayak Temple to observe the finer cultural details — how Hindus dressed, the threads tied around their wrists, and other such cues. By that time, the Malegaon blasts had already occurred and the narrative around “Hindu terror” was gaining currency. Headley sensed an opportunity and sold this idea to his handlers. He even bought Hindu religious threads (dhagas) to build the façade. It was his brainchild, which Zaki-ur-Rehman Lakhvi endorsed. Subsequently, each attacker was issued fake identity cards, supposedly of South Indian university students, to further cement a Hindu identity. Had Ajmal Kasab not been captured alive, the entire operation might have been wrongly attributed to Hindu groups, with no link to Pakistan ever exposed. We were very fortunate, and I salute Sub Inspector Tukaram Omble for his ultimate sacrifice in capturing Kasab alive, which corrected the course of the investigation.


What was Abu Jundal’s role in establishing local connections?

As per Headley’s revelations, he did not know Abu Jundal personally. He recounted seeing Jundal operating out of a control room in Karachi and mentioned a casual encounter with him at a Lashkar camp. That is Headley’s version. It will now be very interesting to hear what Rana has to say on this matter. Abu Jundal was clearly roped in to establish local links. Some may argue that someone from Beed could not direct an operation of this magnitude in Mumbai, but based on available intelligence, this assumption is incorrect. If any local linkages do exist, they are yet to be fully unearthed and will surface during the ongoing investigation.


How credible is Headley’s claim that his school was destroyed during the 1971 war? Is his revenge theory plausible?

I don’t know. I don’t think so. He might have said anything. Everybody in Pakistan is mentally conditioned to not forgive India because of the separation of Bangladesh. They believe that the 1971 war had split their country and hence they have decided not to forgive India. This narrative is frequently reinforced even today. For instance, just days before the Pahalgam attack, Pakistan Army Chief General Asim Munir described Kashmir as the “jugular vein” of Pakistan, vowing never to relinquish it. Such sentiments are deeply embedded in the Pakistani establishment and public psyche.


Now that Rana is in custody, what is the next step?

Under the law, custody can be extended up to 90 days to allow the NIA to complete their interrogation and collect detailed evidence. Investigation will proceed systematically. If needed, crime scene will be recreated. A supplementary chargesheet will then be filed in the same case. Many people ask whether this extradition marks the closure of the 26/11 investigation. The answer is - absolutely not. Rana is merely one co-accused among eight, with seven Pakistani nationals still at large. Even after his trial and sentencing, closure will remain far away. If any fresh leads emerge from his interrogation, further steps will be taken. But the larger challenge remains: key Pakistani military officials will never be handed over, making full justice very difficult to achieve.


Since we have not caught the main conspirators, is this not injustice to the victims?

You have answered your own question. Indeed, it is not yet closure for the victims of 26/11. The primary architects of the attack remain beyond our reach. Justice is still pending. Rana’s extradition was possible largely due to a shift in US policy under President Trump, who declared that the US would no longer shelter undesirable elements. We must proceed with patience and perseverance to bring all culprits to book.


Is there any other example, globally, of an accused being extradited and punished, besides Abu Salem?

Yes, there are several examples. Rana’s case marks the second instance of a terrorism-related extradition. The first was linked to Sikh militancy, way back in 1999–2000, soon after India’s extradition treaty with the United States (signed in 1997) came into force. Since then, numerous criminals, though not always terrorists, have been extradited from the US and other countries. Currently, India has formal extradition treaties with 48 countries, and arrangements (less formal than treaties) with 12 others. Deportation, which is a simpler and faster process, has also been effectively used.


For instance, in the second half of 2023 alone, six suspects were deported to India, thanks to close coordination with countries like the UAE. However, extraditing terror suspects is rare and a monumental achievement because globally, there is often the argument that ‘one man’s terrorist is another’s freedom fighter.’ Many accused exploit asylum laws to delay or escape extradition. Thus, every successful extradition in terror cases is a major diplomatic and legal milestone.

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