Amidst the conflicts, despair and poverty, there is one important thing to celebrate today, the 64th Independence Day – the awakening of the Indian people to dealing with corruption.

The full text of Prime Minister Manmohan Singh’s speech on this day is here.

2,995 words in the speech represented in the cloud below.

Mick Jagger, A.R. Rahman, Joss Stone, Damian Marley and Dave Stewart – with names like these, the expectation to be blown out of the water into the stratosphere wasn’t entirely unreasonable. The song underwhelms, but Jagger and Stone still bring out the goosebumps.

I had to read this Tehelka investigative story three times to even begin to wrap my head around the scale and scope of it. If the CWG corruption scandal made my blood boil, I still haven’t found the words to describe what I’m feeling after reading this story.

This is the state of the National Rural Health Mission scheme in Uttar Pradesh – 8500 crore rupees ($18Billion) has been sent there for medical services for the poor since 2005. Everyone’s hands are in the corruption pot – from the hospitals, private doctors, NGOs, private companies and needless to say all the way up the political ladder to the very top. Two potential whistleblower Chief Medical officers were murdered and the deputy CMO who might have masterminded the killings was also allegedly murdered…..in jail.

(Read full post at TEHELKA) In the Harijan basti of Akhori village, again not more than 20 km from Lucknow, women who delivered babies were paid Rs 700 instead of their full entitlement. When TEHELKA asked them if they were aware that they had been denied their full entitlement, the Dalit women expressed their ignorance. “I was paid Rs 700 in cash by the midwife. But I don’t know under what scheme,” says 35-year-old Geeta. NRHM rules require that the money should be paid through cheques. But this rule was not followed. Instead, cheques were drawn in the bearer’s name so that money could be withdrawn by anyone.

In Zaidpur town, located 40 km from Lucknow, an inquiry by a district account manager revealed that most of the payment disbursed to pregnant women in the past five months was to fictitious people. During a ground verification exercise, the officer found that save two women, the rest did not exist. Of the two existing women, one had delivered the baby a year before the date that was entered in the record books. The other woman had an abortion while on paper she was shown as the mother of a newborn baby.

Uttar Pradesh is India’s most populated (199 million people) and poorest state (44 million+ living below the poverty line). If this state is not lifted out of poverty it will remain the millstone around India’s neck for generations to come. Here is a case where there is absolute proof that money was not the issue. If only the rotten scoundrels in its government can get their collective act together this can be fixed.

The Indian taxpayer is being looted, spat on and kicked in the groin by its politicians. The Uttar Pradesh NRHM scandal has just provided another 18 billion reasons why they need to get behind the Jan Lokpal Bill.

5 stories that grabbed my attention

1. Can’t recall another celebrity who had the balls to do this. Afterall rules are meant to be broken. Go Rachel!
2. Who said you need a showroom to sell cars? No word yet on whether the think-outside-the-showroom gimmick works though.
3. There’s nothing trivial about this professor’s quest. Words matter. Especially when it comes to the national anthem of India.
4. In Delhi monkeys are outsmarting humans.
5. Gavaskar is right. Kudos to him for calling a spade a spade.

The world’s markets took a shellacking yesterday after Standard & Poor’s downgraded the U.S. sovereign credit rating to AA+ from AAA. Yesterday S&P cautioned that India is among other Asia-Pacific countries that may be downgraded too.

Nate Silver does a brilliant job of explaining how S&P’s ratings work in this article – Why S.&P.’s Ratings Are Substandard and Porous.

In fact, the evidence from the past five years suggests that it may be worthwhile to adopt a contrarian investing strategy that specifically bets against S.&P.’s ratings. If you were trying to predict a country’s default risk today, based on the market’s perception of its default risk two years ago as well as its S.&P. rating at that time, you would find that accounting for S.&P. ratings actually subtracted value from your model. That is, if the market had priced two countries as having a 20 percent default risk in 2009, but one of them had a AA rating from S.&P. and the other had a BB rating, the country with the worse S.&P. rating is likely to have proven to be the safer bet.

The reason for this is that S.&P. ratings probably have some influence on market perceptions about default risk — even though they aren’t very good. If markets evaluate a country as having a 20 percent chance of default, but S.&P. rates it as being quite safe, that price represents a compromise between daft investors who take S.&P.’s ratings to be gospel, and savvier ones who have conducted their own analysis and have concluded that the country is at significant risk of default. By betting against S.&P.’s ratings, you’re taking the side of the smart investors — and getting a subsidy from the suckers who think S.&P.’s price is right.

On a separate but related note – the Indian media might consider providing some of the above analysis while drawing attention to the Indian connection to the S&P’s U.S. ratings downgrade.