Follow Us :

One Nation One Housing Policy – Lessons From Turkey Earthquake, Silicon Valley Bank Failure, Tobin Q Ratios And Marcowitz Portfolio Theory of Risks And Returns

In this 12th article on Tax Guru, we delve into the lessons we can learn from various events, including the Turkey earthquake, the Silicon Valley Bank failure, Tobin Q ratios, and Marcowitz portfolio theory. From disaster mitigation strategies to risks associated with concentrated deposits and economic ratios, we explore different aspects relevant to taxation and housing policies.




  • The earthquake followed by a severe aftershock of almost equal magnitude in southeastern Turkey and Syria devastated several towns with tragic consequences.

Geological reason:

  • The source zone of these earthquakes lies at the intersection of three tectonic plates: the Anatolian, the Arabian, and the African plates.
  • The relative northward motion of the Arabian plate pushes the Anatolian plate west, creating two strike-slip faults: places where two plates are sliding past each other as they move horizontally.
  • The shallow focus of the earthquake – which happened when a strike-slip fault moved more suddenly than usual – and the fault’s location close to population centres were responsible for the resulting destruction.

History of earthquakes in this region:

  • This isn’t the first time a big earthquake has occurred in this region as in 1138 AD, an earthquake with a deadly sequence of aftershocks was reported from near the border town of Aleppo in northern Syria, not far from the recent earthquake source.
  • Given this history, the authorities should have built earthquake-resistant buildings in the region but this didn’t even happen in the quake-affected area in Turkey, which has been politically and administratively more stable, is unclear.
  • In fact, while the Turkey-Syria earthquake triggered the devastation, it wasn’t responsible for it; the blame for that lies with the flimsy buildings.
  • The experience should motivate us to thoroughly review India’s own quake preparedness considering poor enforcement of zoning and construction rules is ubiquitous in the country.

Indian terrain prone to earthquakes :

  • The Indian terrain is prone to great earthquakes, more so since the political boundaries of our country roughly follow the tectonic divides in the west, the north and the east.
  • One of our major concerns now should be the 2,500-km-long Himalayan plate boundary, which extends from the northwest to the northeast, in a zone with the potential for large quakes (magnitude 7 and above).
  • Scientists are aware of identifiable gaps along the Himalayan axis where the historical release of geological tension doesn’t fully account for the strain that has built up.
  • For instance, the Central Himalaya has been historically deficient in earthquakes compared to other areas, so it’s one region that can reasonably be expected to generate a large earthquake in the future.

Lesson for India:

  • The sole historical example of a large earthquake in the Central Himalaya dates to 1803 (although there were two smaller events in the 1990s), with an estimated magnitude of 7.5-7.9.
  • It triggered landslides that smothered entire villages in the hills, liquefied the soil in distant areas and further accelerated ground motion in the Ganga alluvial plains, including around Delhi.
  • According to an estimate in 2000, based on the 1991 Census, economic data and assuming all the 1.8 million houses in the region lack earthquake-resistance provisions, if an earthquake like the 1905 Kangra earthquake (magnitude 7.8) were to occur today in the Himalaya, the direct losses would be Rs 5,100 crore, around 65,000 lives, and 4 lakh houses.

Required comprehensive study:

  • As a first step, we need to undertake a comprehensive study of the vulnerability of buildings and structures in different places to different earthquake intensities.
  • One big challenge here is to ensure all new construction (especially in places with the highest quake risk) can resist shaking and that all existing buildings are protected by
  • Put another way, we need ways to make these activities more cost-effective through systematic and long-term efforts.
  • Further in areas where traditional structures are more common, we need to bolster traditional earthquake resistance methods.
  • Equally importantly, we need to develop an environmental land zonation scheme for both urban and rural areas and strictly adhere to its recommendations during planning and construction.

Translating detailed scientific knowledge:

  • Translating our detailed scientific knowledge on earthquake safety to the level of implementation with a format that is easily available, accessible, and actionable is essential.
  • In fact, real-time data dissemination should become a norm in all fields as free data-sharing is the backbone of any knowledge-based society.
  • A gag order – like the one the National Disaster Management Authority recently implemented in response to the Joshimath disaster – will inevitably be self-defeating.
  • Such clumsy processes might also dampen the spirit and momentum of science–policy engagement and the free flow of information to the people.


  • We have a long way to go towards integrating development with disaster mitigation strategies, including grassroots community-based initiatives.
  • The Turkey event reminds us that, most of all, we shouldn’t be caught unaware when the next major earthquake strikes.


The collapse happened for multiple reasons, including a lack of diversification and a classic bank run, where many customers withdrew their deposits simultaneously due to fears of the bank’s solvency. Many of SVB’s depositors were startup companies.

SVB was known for requiring these clauses, which allowed the bank to monitor the financial health of its borrowers and provide preferential terms to those with riskier businesses or less collateral. However, when SVB failed, several software companies almost lost everything because they had deposited more funds with the bank than it was insured to hold.

To protect themselves, entrepreneurs should negotiate exclusivity clauses carefully and be aware of the potential risks involved. It is essential to understand the terms and conditions of any agreement with a bank or lender and seek legal advice if necessary to ensure that the interests of the business are protected.

In conclusion, the collapse of SVB highlights the risks associated with concentrated deposits, bad risk mitigation, and lax scrutiny. While the failure of SVB may have some negative effects on the Indian startup ecosystem.


The Q ratio, also known as Tobin’s Q, equals the market value of a company divided by its assets’ replacement cost. Thus, equilibrium is when market value equals replacement cost.

Tobin’s Q formula is an economic ratio used to compare a company or index’s market value to its book or replacement value. One way that the formula is expressed is as Q = Market Value / Total Assets. It can be used to measure the relative value of a company’s stock or the overall market.

The advantage of using Tobin’s Q is that the difficult problem of estimating either rate of return or marginal cost is avoided. On the other hand, for Q to be meaning full, one needs accurate measures of both the market value and replacement cost of a firm’s assets.


Market value—also known as market cap—is calculated by multiplying a company’s outstanding shares by its current market price. If XYZ Company trades at $25 per share and has 1 million shares outstanding, its market value is $25 million.

From the above and with chief controller of land compensation bonds , we can find utility value of land based on FSI it can create and also use for RERA RBI house with housing loan as coupons distributed through cooperative housing societies and in case of private builders by reserving 50 % of the FSI for affordable housing at conceptual state itself will make housing cheaper and create insurable interest, bankable interest same for all India basis equal and financial inclusion of houseless people will be maximum and all 35 Crores households will have shelter, shelter lessness can be eradicated.


This theory talks about risk versus returns. Risk is classified into risk averters, risk neutral, risk preferers. But when it comes to affordable and adequate housing government is not a risk preferer or neutral. Government is always a risk averter and housing scheme by government, state government, local government should have same insurable interest and this is the basic ideology of one nation one housing policy. Landed and contracting companies have to abide by national code of specifications and other directive which are applicable one and all in our country. When it comes to housing for building housing for households or homeless, the value of insurable interest both for life and non-life is same and is measured for every citizen it is equal.


Our Dravidian model of one nation one housing policy with SDG vision and A/HRC/52/28 confers in all aspects, and all issues are well addressed. We request one and all to support this noble cause.

The lessons learned from the Turkey earthquake, Silicon Valley Bank failure, Tobin Q ratios, and Marcowitz portfolio theory shed light on various aspects of disaster mitigation, risk management, and housing policies. By understanding these lessons, we can work towards integrating development with effective strategies to mitigate future risks and ensure affordable housing for all.


Join Taxguru’s Network for Latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Post by Date
May 2024