Tuesday, December 12, 2017

The Power of One

This is one obituary that refuses to leave my mindspace.

It is not often that we see touching, personal tributes to politician who passed away but E. Chandrasekharan Nair seems to have been a very unusual politician indeed. He is being refered to as the driving force behind Kerala's public distribution system which is not just functional (an usual thing in India), but also super efficient in delivering essential provisions (grains, fuel) to those who need it the most.

My own mother is a big fan of ECN. For a citizen who is not below the poverty line (BPL), even she can get 2kg of raw rice, 2kg of chemba (red) rice, 2kg of wheat atta and 0.5L of kerosene - all for just INR 100. "Where else in the world can you walk into a PDS shop and get so much for INR 100?" she asks, "Folks with BPL cards can get foodgrains at INR 1/kg!...even migrant labourers from other states are eligible for this facility!"

In most other states, foodgrains meant for the PDS is regularly siphoned off to private millers who, in turn, package it and sell it as branded stuff. How did one politician manage to fight off the usual lobbies and pressure-groups to put in place a welfare system that actually works?

The key to building an efficient PDS apparantly lies in the government agency that runs it. In this case, ECN was responsible for implementing key reforms as the minister in charge of  Kerala's Department of Food and Civil Supplies, for three long stints (1980-81, 1987-91 and 1996-2001).

Under this department, a public company, Kerala State Civil Supplies Corp Ltd (SupplyCo) runs a vast machinery for efficiently procuring foodgrains directly from the farmers at minimum support prices, of getting the grain processed in contracted mills, and, finally, getting them distributed through 14 district depots, 56 taluk depots and around 1500 retail outlets (Maveli Stores). The sales turnover of this company was nearly INR 4000 crores in 2015-16!


- Obituary (NewsMinute) - http://www.thenewsminute.com/article/ex-kerala-minister-e-chandrasekharan-nair-architect-maveli-stores-passes-away-72372
- Obituary (The Hindu) - http://www.thehindu.com/news/national/kerala/e-chandrasekharan-nair-passes-away/article21095877.ece
(2000) - Interview - http://www.frontline.in/static/html/fl1719/17190980.htm
Maveli Stores - https://en.wikipedia.org/wiki/Maveli_Stores
SupplyCo, Kerala - http://supplycokerala.com/

Saturday, October 28, 2017

The Air We Breathe

Over the past one week, I have been analyzing the market for air purifiers in the NCR Delhi region. It is just the right time of the year for an assignment like this - the quality of air here takes a nosedive with the onset of winter.

Today the reports of suspended particulate matter - especially PM 2.5 - were particularly alarming. It peaked at over 715 mg/m3 when the prescribed limit is below 60 mg/m3!

Just before the festival of lights, Diwali, farmers in Northern India harvest their summer crops and prepare their fields for the winter sowing season. Since it is too expensive to physically remove the post harvest residue from the fields they just burn it.  A huge cloud of smoke then slowly drifts over Delhi and settles down with all the smoke from Diwali firecrackers, turning the national capital into a gas chamber.

This year, a one-off intervention by the Supreme Court resulted in a ban on the sale of firecrackers, so there was a marginal reduction in the smog and haze, but it still left most of us teary eyed, and with a niggling irritation in the throat.

Pollution is not bad news for everybody. There has been a spike in the number of companies selling air purifiers, big advertisements in the newspapers point to the fact that 15 odd companies are all set to make hay while the sun shines dimly through the smog.

According to the Philips salesman at GIP Mall in Noida, air purifiers have been flying off the shelves as Diwali gifts. The company is barely able to keep pace with the demand. From what one could see, in their enthusiasm to sell, their glib sales pitch is also barely in touch with scientific facts.

"We human being consume about four kilograms of food everyday", said the Philips salesman, "But do we know that we also breathe in about 24 kgs of air, with all the pollutants in Delhi?" I did not know that. Having been under the impression that the volume of air is measured in liters or cubic feet or cubic meters, I have been trying to figure out the actual volume of air consumed by us everyday.

The World Health Organisation and US-EPA has some clear figures on this. Considering the fact that the air contains 20-23% of oxygen, and that an average human being breathes in about 0.5 liters of air with each inhalation. At about 20 inhalations per minute, we are consuming no less than 6-8 liters of air while we are sitting around doing nothing. This jumps up to 60 liters/minute while running at 5 miles/hour. So it turns out that we are breathing in no less than 14,400 liters of air every day (0.5 * 20 * 60 * 24). This volume would take up all the space in a room measuring about 500 cubic feet!

The Philips salesman might have been talking through his hat, but there is no denying the fact that most of us are unaware of the sheer volume of contaminated air entering our lungs every day!


*  WHO  Factsheet - Ambient air quality and health - http://www.who.int/mediacentre/factsheets/fs313/en/

* USA - California Env Protection Agency research - https://www.arb.ca.gov/research/resnotes/notes/94-11.htm

* YouTube video - How much oxygen does a person consume/day? - https://www.youtube.com/watch?v=t-QYVKYKyfg

* https://www.quora.com/How-much-volume-do-we-inhale-and-exhale-in-a-day

* Oxygen intake - https://health.howstuffworks.com/human-body/systems/respiratory/question98.htm

Thursday, October 12, 2017

On Owls and Idioms

This is one of the most intriguing idioms I have come across.

Translated from Hindi to English, it means, "To straighten one's owl", and the common understanding of the idiom in North India is "get one's work done", in a sneaky kind of way.

For instance, when you are in a meeting that has been called to discuss, say, a cleanliness drive. If you see some participants holding forth on an issue that has little to do with cleanliness but more to do with settling an old grudge with somebody specific, it could be said that he is  'straightening his owl'. He is using the meeting as a means to achieve a goal that is narrow and personal.

It is similar to 'Shooting off somebody's shoulder' but it goes beyond taking advantage of a person or a friend, to achieve you own purposes.

While this idiom is pretty apt in a lot of situations - especially at a workplace, or in politics - it origins remain mysterious. The owl (Uluka in Sanskrit, and Ullu in Hindi), despite being the vahana of Lakshmi, the goddess of wealth, is considered a stupid bird in North India. So if you do something idiotic, you might be called an Ullu in Delhi, or an Ullu da Pattha (son of an owl!), in Punjab.

Perhaps this is because the bird looks quite lost and disoriented during daytime. However, unlike bats, it never perches upside down. So how on earth did this idiom originate?

Also, are there similar idioms in other languages?


  • Hindi Idioms - http://www.hindisahityadarpan.in/2013/01/famous-hindi-idioms-phrases-and.html
  • 25 Hindi idioms inspired by food - https://www.naukrinama.com/stressbuster/25-hindi-idioms-inspired-food-brought-hearing-saying/
  • Vahana - (Sanskrit - "that which carries, that which pulls" - https://en.wikipedia.org/wiki/Vahana

Tuesday, September 19, 2017

Nature Watch on the Kugti Trek

Its amazing how the flora and fauna changes in the Chamba Valley, as you ascend from 10,000 ft to 16,500 ft. It starts with compulsive greenery, a riot of colorful flowers and the chirping of unseen birds in the pine forests, then, as you climb, the vegetation first thins down to the bare minimum, and then to none at all.

Here are some of the scenes we managed to capture along the way.

A Monitor Lizard basks in the sun. As you cross Kugti village and trek towards the Kaylong Kartik Temple, they seem to be all over the place - basking in the sun, staring at you warily atop boulders, or just slinking out of the way quietly. 
Why are they so numerous in the vicinity of the village? Is it because of insects that are attracted to the terrace crops? 

Wagtails of all kinds! 
When you are driving from Bharmour towards Kugti you can see them swooping and diving in front of the vehicles. These are mostly Citrine Wagtails with their distinct pale yellow undersides. Beyong Kugti, you see two others: White Wagtail (Motacilla alba) with- white wedges around their eyes, and 
the White-brown Wagtail (Motacilla maderaspatensis), the ones with slick white 'eyebrows'.

Tiny glossy leaves, red berries, cushiony on rocks - Cotoneaster microphyllus (Bhedda)

 And the ones that are yet to be identified:

Yellow flower with a hundred needle like petals - Inula grandiflora (Daisy family)

Sunday, September 17, 2017

Dam Good!

One thing that strikes you as you travel to Kugti is the number of hydro-electric projects that have sprung up all over the Chamba Valley.

From the moment you leave the Punjab plains and enter Himachal Pradesh, you see power projects of assorted shapes and sizes all along the route. Many of them are the conventional, small-scale run-of-the-river projects where you have a small dam blocking the river and the resulting resorvoir being used to generate electricity. Others are a lot more complex, and the only sign of their existence is the tunnels that have been bored through the mountains, to divert waters into long pipes that feed hidden turbines.

It may not make the river look cleaner or prettier but it certainly helps the local population access one thing that makes the winter months more bearable: electricity. Thanks to projects like these, Himachal Pradesh is able to generate more than 8500MW of electricity which it is able sell to states located downstream.

Perhaps the largest player in this valley is the National Hydro Power Corp (NHPC), a central public-sector enterprise that has set up some of the largest power plants on the Ravi river, such as the Chamera-I and Chamera-II projects. Having decided to settle down for a long haul, NHPC has numerous office/staff/residential complexes all along the Chamba valley, commanding some of the best views in this district!

Private players are not too far behind. GMR and Lanco too have a growing presence here with the former represented by deep green container-box offices set up all along the road up to Holi.

Now, which are the small HEPs located along the road to Kugti? 


* NHPC -- http://www.nhpcindia.com/projects-overview.htm
- presently has an installation base of 6667 MW from 21 hydropower stations on ownership basis including projects taken up in Joint Venture.

* GMR - http://www.gmrgroup.in/energy-gmr-bajoli-power-project.aspx
- Bajoli-Holi 180MW project on Ravi - to be commissioned in 2018

* Lanco Budhil Project -- http://www.lancogroup.com/DynTestForm.aspx?PageID=29
- 70 MW plant commissioned in 2012
- Village Thalla, P.O. Ghared, Tehsil Bharmour, District Chamba 

* Hydro-Electric Power in Himachal Pradesh - https://en.wikipedia.org/wiki/Hydroelectric_power_in_Himachal_Pradesh
- 8,418 MW is harnessed so far

* Hydro Electric Projects in HP - http://india-wris.nrsc.gov.in/wrpinfo/index.php?title=Hydro_Electric_Projects_in_Himachal_Pradesh
* Himachal Pradesh Power Corp - http://www.hppcl.in/page/hydro.aspx

Saturday, September 16, 2017

Trek to Kaylong Kartik Temple and Kugti Pass

I'm sitting at my desk, with my eyes on a glowing laptop screen, but my mind is still in the Himalayan mountains.

Having spent the whole of last week trekking through the stunning Chamba valley, attempting my first Cross-Over trek through the Kugti Pass to Lahaul-Spiti in Ladakh, I realize that this trip has been an eye-opener is more ways than one.

I did not know, for instance, that affordable trekking was possible for a small group of five, with the support of two guides, one porter and a cook! Since much of the grunt work of setting up camp, cooking food and foraging for fuel is outsourced, it leaves you with enough and more time to take in the scenery, observe the birds and insects, and enjoy the journey.

This trek passed through the Manikaran Kailash area, an ancient pilgrimage circuit. It was therefore not surprising to see the route dotted with tiny roadside shrines and larger temples. What was intriguing, however, was the set of beliefs and traditions that blended so well with that of the nomadic shepherds who form the economic lifeline of this remote district.

The Keylang Kartik Temple is an excellent example. It is open only from 13 April to 30 November every year - the time when the shepherds are taking their flock from their summer grazing grounds in Lahaul-Spiti down the green meadows and fields of the Chamba valley and the plains, to escape the harsh winters in the mountains.

The temple itself is at multiple levels, blending with the steep slope on which it is located. At the lowest area are the toilets, a little further up, attached to the main building is a shop selling votive's and offerings. This shop is run by the same family that takes care of the temple - priests from the Kugti Village. At the next level you have the temple with a large courtyard, attached to a cooking shed and a little spring-water pool purported to contain the footprints of the presiding deity.

The main temple is a wooden structure divided into two areas - a prayer hall with a window on each of its three walls, facing the towering snow-peaks, and the sanctum containing three idols, one each of silver, panchadhatu (?) and marble. As in most North Indian temples, devotees can walk right into the sanctum and touch the idols before going around the narrow passageway surrounding the sanctum.

The evening Aarti takes place at 7 PM. The priest corrals whoever is around to help with the puja. I was handed a Yak-hair fly-whisk while our guide took charge of the cymbals as we walked around clanging numerous bells hanging overhead. We all then stepped out to offer prayers to two more deities in the courtyard area - Ganesha and Kartik again represented by his vaahana, the peacock.

One thing you will not miss at the temple is the iron chains and tridents along the temple walls. While most of the tridents / trishuls are offerings from the pilgrims on the Manikaran Kailash circuit, the chains are more than just symbolic. They are used by soothsayers from the nearby villages to flagellate themselves as they go into a frenzy while "talking" to the mountain spirits. They become the medium through which the Gods speak to the villagers, and vice versa.

According to the temple priest, the older chains are considered more potent by the villagers. If they need to borrow the older chains to be used in the village temples, they have to deposit two new ones as security. Also, a chain borrowed from the temple is to be carried "without touching the ground", even if it is tucked away inside a bag.

Animal sacrifice is the most accepted form of thanksgiving here. Villagers and shepherds come here to offer animals in gratitude for a successful crossing, or after surviving another winter in the mountains. Perhaps quite appropriately, the main prasad here is mutton-curry and rice. While this may not be to the liking of many Hindu purists in the plains, its best to leave those who survive in the mountains to frame their own rules!

Unanswered Qs:

* Is there any other temple in India where Kartik is considered the protective diety of nomads and shepherds?
* Mythology says that Kartik lost a bet to his brother, Ganesha, and destroyed himself. Does it talk of a sister named Matala-Devi who sits atop a craggy peak on the opposite side of the river?


Manimahesh Parikrama - http://www.bharmourtreks.com/show_tour.php?tourid=3&cat=1
Kaylong Kartik Temple - Mythology - http://www.bharmourtreks.com/show_tour.php?tourid=3&cat=1

Thursday, September 07, 2017

All That Gas

At Sector-105, Noida, this is quite a regular sight on any given day - vehicles waiting for their turn at the CNG filling station.

Cars, buses, mini-vans all stretch out for more than 500 mts crawling bumper to bumper, twiddling their thumbs, wasting precious time, until they finally reach the fuel nozzles.

What is it that makes the transfer of Compressed Natural Gas (CNG) from the fuel station to vehicles, such a time consuming process? How much CNG is being wasted while waiting to get CNG?


* (2016) - BS - 72 new IGL stations - http://www.business-standard.com/article/companies/igl-says-has-set-up-72-new-cng-stations-so-far-this-year-116050200855_1.html

When History Repeats Itself

Each time I read a book by William Dalrymple, I wonder why our country does not produce such engaging scholar-storytellers. The book, "Return of a King" is no exception. It is meticulously researched and weaves a story that blends the contrasting versions of the victorious and the vanquished, into one 500-page, eminently readable tome.

In this book, the author also has is also a personal angle tucked away in the story. Dalrymple's great-great-grand uncle was an active participant in the Afghan wars, first as a bureaucrat in Punjab, and then as a soldier and prisoner-of-war in Afghanistan. So it also serves, to some extent, as the family history of a Scottish Highlander.

The book describes a period is spread across three centuries, from the time of Nadir Shah's invasion and plunder of Delhi in 1739 to the entry of British and US forces in the 1980s,  with the proclaimed intent of "fighting terror" and "restoring democracy" in what had become the stronghold of Osama bin Laden and his band of Arab fighters.

At the time of Nadir Shah, it was his Shiite Persian followers - the Qizilbash - along with his former soldiers, who formed the ruling elite of Afghanistan. The Sadozai clan was formed by a soldier named Ahmad Shah Abdali/Durrani who was to defeat the Maratha forces in the Third Battle of Panipat in 1761, while the Barakzai clan arose from a gunner is Nadir's army named, Haji Jamal Khan.

While the central theme is politics, intrigue and power-struggles between these two clans, the book makes you wonder about the Afghanistan that would have existed long before it was taken over by Islamic soldiers of fortune, and of the times when fighting "Jihad" against "Infidels" was not the rousing war-cry that destroyed a rich cultural heritage.

It offers glimpses of economic linkages cultural traditions that persisted even until the last century -- of Shikarpuri merchants whom kings approached to fund their war-efforts; of Nepali pilgrims visiting the remains of Hindu holy sites in the mountains; of regular raids that took place across the Khyber Pass into the plains; slave traders who flourished in the markets of Kabul, Khulm and Balkh, all the way to Bukhara.

You wonder what a different world it would have been a few thousand years ago, when Princess Gandhari of Mahabharata moved out of Khandahar to marry a king in the Gangetic plains, and then went on to blindfold herself and listen to a courtier's commentary of the internecine war that destroyed her dynasty.

Later, did Alexander's army too wreak vengeance on villages just as the British army did in the early 1840s? Did they also plunder and rape, torch villages and cut down all fruiting trees, just as the British did in the Jalalabad valley and in villages like Istalif, the Shomali plains (which is today home to the USAF base at Baghram)?

What thoughts would have crossed the minds of the thousands of people who were taken away as slaves - so many that an entire mountain range is now called the Hindukush ("Hindu Killer") where most perished? In this context, some of the narratives make you cringe, such as the one by Josiah Harlan that describes how Uzbek slave-traders sewed their captives to their horse-saddles:
"To oblige the prisoner to keep up, a strand of coarse horse-hair is passed by means of a crooked needle, under around the collar-bone. a few inches from its junction with the sternum; with the hair a loop is formed which they attach a rope that may be fastened to the saddle. The captive is constrained to keep near the retreating horse-man, with his hands tied behind his person, is altogether helpless" 
This story revolves around the return of a king, and yet, it reads like a play that has been performed many times over on the same stage. The costumes change, religious leanings change from Hindu and Buddhist to Islam; languages switch from maybe Kharoshti/Prakrit, Pali, and Sanskrit to Persian, Pashto, Dari and English, but the same tragedy gets repeated over and over again.


* GoodReads - "Return of a King" - https://www.goodreads.com/book/show/13454654-return-of-a-king
* Istalif village - http://www.istalif.com/

Sunday, August 13, 2017

Promising the Skyscrapers: Jaypee's Corporate Debt Burden

There was a showdown yesterday in our neighborhood yesterday. About 4000 homebuyers staged a protest against the Jaypee Group for its failure to deliver their apartments on time.

The anger and rustration of homebuyers is undertandable. Having been promising a "Wish Town" with sprawling lawns, gold courses, playgrounds and various other amenities , and having invested  their life savings to buy a home of their own, they are now being left in the lurch. Apartments that were to be handed over in 2011 are still undelivered. Across the expressway, a vast array of unfinished apartment complexes can be seen on the horizon -- empty shells of brick, cement and concrete, with no sign of life, or work-in-progress.

A number of protests have been taking place from time to time. The last one led to a blokage on the expressway, and this one was aparently triggered by a decision in the High Court. The Allahabad bench of the National Compaly Law Tribunal (NCLT) admitted IDBI bank's insolvency plea pertaining to Jaaypee Infratech. The company had failed to repay a loan of INR 8500 Crores (USD 1.3 billion).

Behind the anger and frustration of the homebuyers is the larger picture of Corporate Debt in India. Thanks to poor internal controls, bad debts in Indian banks has shot up to INR 7,00,000 Crores (USD 109 billion) over the last two years. In order to defaults companies have been on fire sale of assets: Reliance Communications (RCom), which had debts of over Rs 47,000 crore sold its tower business to escape default default, the Ruias have sold their oil refining business to Rosneft, GMR and GVK parts of their airports and power businesses, and Vijay Mallya parts of his liquor businesses that were mortgaged to fund Kingfisher Airlines.

Jaypee group’s debt is over Rs 75,000 crore (USD 11b). So, according a report in the Hindu:
"... the group has agreed to sell its 20mtpa of cement assets to Kumar Birla-led Ultratech for Rs 15,900 crore. This will leave its listed entities with about 6mtpa of cement capacity, three thermal power plants, one hydropower plant, an expressway project and land parcels. It is looking to sell most of these assets at the right price, but buyers are not easy to come by. Aside from selling stake in its land parcels and the Yamuna Express Highway, the group is looking to sell its remaining cement plants for Rs 4,000 crore and its Bina thermal power plant for Rs 3,500 crore. In the last year, the group has defaulted on payment obligations worth $350 million. Analysts say its capacity to service its debt has not improved."

No wonder there are few takers when the Jaypee Group boss, Manoj Gaur, tries to tell the homebuyers that their "investment is safe".


* (2017) - http://www.hindustantimes.com/noida/noida-authority-jaypee-tell-homebuyers-not-to-panic-assure-their-money-is-safe/story-nYjtbZb1bR6tzfYbZitI2N.html

Jaggi on the slowdown (30may17) https://swarajyamag.com/economy/not-just-demo-pm-modis-black-money-chase-is-x-factor-in-growth-slowdown

(2017, May) Financial Express - http://www.financialexpress.com/industry/banking-finance/demonetisation-impact-bank-npas-mount-to-rs-614872-crore-set-to-rise-further/558916/
- They now constitute 11 per cent of of the gross advances of Public Sector Unit (PSU) banks. In all, the total NPAs including both the public and private sector banks were Rs 697,409cr in December 2016. These figures were compiled by Care Ratings.

 - 31 May - Reliance Defaults -  https://www.bloombergquint.com/markets/2017/05/31/an-ambani-default-won-t-fly
Andy / Bloomberg - http://m.economictimes.com/industry/banking/finance/banking/at-this-rate-fintech-will-slaughter-indias-banks/articleshow/58782969.cms

The Hindu- http://www.thehindu.com/business/Industry/the-biggestever-fire-sale-of-indian-corporate-assets-has-begun-to-tide-over-bad-loans-crisis/article8573163.ece

Wednesday, August 09, 2017

USB Vulnerability

Ever so often, whenever I pick up a USB memory stick, a certain train of thought crosses my mind.
"Here is a miracle device", I remind myself, "which one of the 6 billion+ across the world, one that has made data-transfer and battery charging so amazingly simple, and yet, contains within it the power to destroy nuclear plants, water and power supply grids and to unleash starvation, misery and death across the world!"

A few years ago, the Economist highlighted positive features of the 'thumb-drive' in an article very aptly titled. "In Praise of the Humble USB". While reading this piece, I was delighted to know that a computer architect of Indian origin,  Ajay Bhatt, had a key role to play in creating this amazing interface, which his parent company, Intel, decided to make 'the cheap USB plug and socket an open standard, available to manufacturers everywhere free of all royalty charges and licensing fees'. This one move destroyed the Firewire standard that had been patronised by Apple, and made USB a de facto standard across the world.

The ease with which the USB drive could be used also made it a handy tool in the hands of spies, spooks and saboteurs. The most famous example of this is the Stuxnet virus which CIA and Mossad used to destroy a thousand centrifuges in Iran. Ever since I heard of this cyber-attack, I have been awed by the sheer scale of destruction that can be unleashed through the USB drives. It also led me to the mistaken belief that the Iranian nuclear program had been irreparably damaged because of Stuxnet.

A recent documentary by Alex Gibney - "Zero Days" - suggests that in the real world, things are not what they seem. In their eagerness and impatience to destroy the Iranian nuclear centrifuges, Mossad apparently changed the codes created by their CIA/NSA collaborators, and released a version that was a lot less subtle, and left behind an electronic trail that was being used against the USA. It seems Iran has now built up one of the largest cyber-armies in the world, one that was behind two major warning attacks: one on the largest oil company in the world, SaudiAramco, destroyed every line of code on 30,000 computers, and then a surge attack on banks in the USA that crippled commercial operations.

As a friend recently pointed out, our biggest vulnerability is that new technology is being built on old systems that were not intended to be on a network. So, by default, we have gaping holes in just about all the things that now run our lives - utility supplies, banking & finance.

Even the ubiquitous USB works on FAT-32 system which has since evolved into exFAT and NTFS. However, the base continues to be FAT32, and as long as this is the case, our systems will continue to be inefficient - and utterly vulnerable.


Stuxnet - Alex Gibney's Zero Days - https://youtu.be/AcgUGujn_nY
* FAT32, exFAT and NTFShttp://www.pcworld.com/article/3109559/hardware/why-your-usb-drives-file-format-matters-fat32-vs-exfat-vs-ntfs.html

Saturday, July 08, 2017

SpeedPost Courier Racket

India Post works like magic these days. If you pack a handloom saree and send it by SpeedPost it magically transforms enroute, into a cheap rexine handbag!

This is exactly what happened to us last week. My wife had been eagerly waiting for her first "Dubakka" cotton handloom saree sent from Maanini Vastra Samskriti India PL (MVSI), Bangalore. Photos had been exchanged on WhatsApp, a design had been carefully chosen and confirmed. When the packet arrived by Speedpost (no. CK 02481962 5 IN) yesterday, it looked like a saree packet, it weighed like one, but when we opened it, the packet contained a tacky, cheap rexine handbag.

SpeedPost packet no. CK 02481962 5 IN

Puzzled, we called up MVSI immediately. Had they, by any chance, sent us a handbag that was meant for another customer? The answer was an emphatic "No!". The company did not deal in anything other than handlooms. In fact it had carefully built a reputation as a reliable partner to a larger initiative by a group of handloom enthusiasts from "Kaithari", a social network that had been working tirelessly for the revival of handlooms across South India.

At a time when artisans in remote villages in Karnataka and Andhra Pradesh were losing their livelihoods to a change in fashion trends, groups like Kaithari and MVSI had come together with a revival initiative, linking weavers in small towns like Udupi and Dubakka (AP) to markets in urban India. Over 1200 sarees of the "Udupi weave" had been sold by MVSI, and the "Dubakka weave" (aka Chitkula Sarees), was just beginning to notch up sales.

Convinced that this was not a mistake at MVSI we examined that Speedpost packet a little more carefully. The packed had indeed been tampered while in transit. The brown tape had been carefully sliced open with a blade, the contents switched, and the packed re-sealed with transparent cello-tape.

While a formal complaint is being registered with India Post / SpeedPost, the question is - Is this a one-off incident or does it represent a larger problem plaguing India's booming e-commerce industry?

Two years back in 2014-15, the postal department’s revenues from e-commerce majors had more than doubled to over Rs 1,000 crore, up from Rs 500 crore the previous year, and just Rs 100 crore in 2013-14. While the e-commerce majors get all the attention, fact remains that SpeedPost, with its unmatched national network, remains the first choice for entrepreneurs in remote corners of the country.

Many rural communities depend on Speedpost for their livelihoods. Unless strict action is taken against such pilferage "Make in India" and the fledgeling "Digital Economy"is bound to suffer. This is one magic-show that India Post customers can do without.


MVNI - https://www.facebook.com/maaninivastrasamskrithi/


Dubakka Sarees aka Chituka Sarees - http://www.thehindu.com/lf/2005/06/03/stories/2005060301840200.htm

Monday, June 26, 2017

Compromise Managers

"Angamaly Diaries" is a fabulous movie.

A 2017 crime-drama film in Malayalam, directed by Lijo Jose Pellissery, it tells the story of internecine conflicts, and gang-wars in a small town in Kerala. What makes the movie outstanding is the way it brings out the color and celebration of life - eating, drinking, singing, dancing - with the darkest of out instincts, of murder, vendetta, and strikes a fine balance between the two.

It is the last part that really caught my attention here - especially the role of individuals who are designated as "compromise managers" by the warring factions.  These are people who are allowed to step in when the cycle of murder and retribution reaches a stalemate where there can be no winners, or when it is clear that if the fight were to continue into a war of attrition, the winner would be an "outsider".

The one person designated as the Compromise Manager is an insider, a person who, despite being identified with one gang, has over a period of time, won the trust and confidence of the rival gangs as well. From this precarious position, he tries to make the key decision-makers, often the most violent individuals, recognize their own long-term selfish interest in agreeing to a compromise formula.

Thanks to this arrangement, the role of the state law-enforcement agencies and its ponderous legal system gets sidelined in favor of solutions that are more local. Money and business opportunities stay within the community, and the focus shifts from settling scores in the neighborhood, to putting up a joint front for challenges that come from outside.

Needless to say, CMs can be effective only when the costs (including bribes, jail-terms) of using the official legal system are much more than the benefits. In this case the town does have an active police officer, but the CM understands that in increasing crime-graph reflects poorly on the career of government officers. Similarly, the lawyers find it more lucrative to extract fees for striking a compromise rather than legal charges.

If the small town or village represents a microcosm, the UN perhaps represents the defunct legal system that is simply not in a position to resolve conflicts. This movie makes you wonder - who would be best positioned to be a compromise manager in conflict between nations-states?


* Movie - Angamaly Dairies (2017)

* Director - Lijo Jose Pellissery - https://en.wikipedia.org/wiki/Lijo_Jose_Pellissery

Friday, June 23, 2017

An Award Ignored

Strange are the ways of the Indian media.

A few days ago, an Indian scientist-entrepreneur based in Japan won the country's top environment award for 2017, and it was barely mentioned here. Bits of the news appeared on the web-editions of India Today and DNA, both apparently sourced from a newsfeed site called UNIIndia.

Dr. Shrihari Chandraghatgi, CEO of EcoCycle Corporation, was awarded the Environment Award for 2017 in Japan for "developing cutting edge technologies to address burning environmental problems". This award is the highest honour given every year jointly by the Ministry of Environment, Japan, National Institute for Environmental Studies (NIES), Japan and The Nikkan Kogyo Shinbun (a media group). What is more,  Chandraghatgi is the first foreigner to win this award.

What exactly is the cutting edge technology developed by Chandraghatgi to address 'burning environmental problems"? According to information available at his company website, EcoCycle has developed a unique technology for environmental remediation and recycling of organic solvents in semiconductor industries. It uses microorganisims to clean the soil and groundwater contaminated with chlorinated solvents and hexavalent chromium. The company has also developed unique on-site emission analytical techniques for semiconductor industries.

India does not have a significant semiconductor industry. Much of its requirements are imported. While this may have been a reason for the rather tepid response here, it fails to see the larger picture. In one of the interviews, Chandraghatgi gives an open offer aimed at India - "Now it is my turn to work in India where large scale health problems are reported because of consuming toxic groundwater. If any organization, government or NGO, wants to take up such cause with concern of public health, I am ready to provide my technology and vast experience free!"

Will this offer be taken up in right earnest? Or will we continue to wear our blinkers and look-up towards the West - USA, Europe - technological breakthroughs that are relevant to India?


* (20Jun17) -UNI - "Agri. Microbiologist Dr Shrihari Chandraghatgi gets Japan Award" http://www.uniindia.com/agri-microbiologist-dr-shrihari-chandraghatgi-gets-japan-award/states/news/906665.html
- Dr Shrihari is currently helping Ministry of Industry, Thailand in forming environmental regulations and educate with remedial technologies.
- In 2017 he established a NGO, Kibono Hikari literally means Ray of Hope to help under privileged children in India with educational and medical support.

* (21Jun17) - IndiaToday - "Indian Agri-Microbiologist given Environment Award in Japan" - http://indiatoday.intoday.in/story/indian-agri-microbiologist-given-environment-award-in-japan/1/983894.html

* (21Jun17) - DNA - http://www.dnaindia.com/india/report-indian-agri-microbiologist-given-environment-award-in-japan-2479336

* (2015) - Son's donation for Scoriosis treatment - http://bangaloremirror.indiatimes.com/bangalore/others/baby-anjummehboob-patel-shrihari/articleshow/47062930.cms?

* EcoCycle Corporation, Japanhttp://www.ecocycle.co.jp/e_organization/e_organization.html

Friday, June 09, 2017

"Tatkal" Railway Bookings

It is amazing how the Indian railway reservation system has evolved over the last two decades.

Today I tried my hand, for the first time, at a system called "Tatkal". It is a system for last-minute bookings, for travelers who have not planned their journey in advance. The computerized system turned out to be a lot easier than expected.

I needed to make a quick trip to Mumbai, which is about 1400 km from New Delhi. There are about 20 trains connecting the two cities, giving you a wide range of options. You could start your journey at midnight, or take the last train after 11:00PM. You could cover the distance in 15.15 hrs in the fastest train, the Rajdhani Express (no. 12952), in 1st class AC comfort, for INR 4755, or reach there at a more leisurely pace in the Amritsar Express (no. 11058), which takes no less double the time - 31.15 hrs. A journey on the latter, on a 'sleeper' ticket would cost you just INR 600 (USD 9.30!).

You also realize that in the egalitarian world of Indian Railways, even the slowest train is called an "Express" :)

My travel priorities were quite straightforward:I did not want to start my journey at unearthly hours, and I waned to travel cheap. This brought down my choices to five trains, all of which were fully booked. So I opted to go for "Tatkal" which is a option that sits discreetly as a narrow banner, alongside the others: General / Ladies / Handicapped.

The first option was Paschim Express (22 hrs) and it showed 17 seats available when I logged in at 11:00AM. However, by the time I reached the payments page, the IRCTC website went into its 'daily maintenance' mode. When I returned an hour later, all the seats were gone!  The next best option seemed to be the 12284 'Nzm Ers Duronto' (20 hrs), and this too was running on a waiting list.

Now, a surprising thing happened when I opted to take a wait-listed ticket. The IRCTC servers now gave me a pop-up "Vikalp" option - in case this ticket was not confirmed, I had three other trains to choose from, all of which were the next available trains to Mumbai. This saved me the trouble of going back, retracing all the steps to make an alternate booking. Cool.

The ease with which the whole process was completed reminded me of the late 1990s when the only option was to line up at the railway reservation counters. You had to reach the station two months in advance, stand in a long line, and wait for your turn at the counter. There had been times when the bookings closed by the time I reached the window, or was shortchanged by the ticketing officers. Either way, you lost at least half a day for rail bookings.

Now, thanks to IRCTC, the online booking system has become amazingly simple. So much so that it is easy to forget that it represents just a small fraction of the effort put in by a government agency, CRIS (Centre for Railway Info Systems), to help railways carry 6 billion passengers, and 6 million tons of freight, every year!

Scope for Improvement:

* Acronyms are confusing - it would be useful to have the full-form appear on a mouse-over. Eg. Train no. 12172 s described as "HW LTT AC SF", which is no better than Morse-code. Turns out that this is "Haridwar Lokmanya Tilak Terminus Air-Conditioned Super Fast Express"!


* VIKALP Scheme - http://contents.irctc.co.in/en/vikalpTerms.html

* Raghuram (2007): Turnaround of the Indian Railways - http://www.iimahd.ernet.in/publications/data/2007-02-03graghuram.pdf

* Tatkal Booking Guide - http://contents.irctc.co.in/en/TatkalBooking.html

Thursday, June 08, 2017

GST Explained by the Revenue Secretary

In less than a months' time, the tax system in India will take a radical shift to a comprehensive Goods and Services Tax (GST) model. In most countries, GST is understood as a single indirect, comprehensive, broad-based consumption tax. In Singapore the GST rate is a flat 7% while in Australia, it is 10%. Other countries have a graded VAT system with different tax slabs.

The Indian model GST is going to be unique - and seems rather confusing. From 1 July 2017, we are going to have a GST with five different slabs, ranging from 0% to 28%. The norms for reporting and compliance too seems quite formidable. This impression is getting reinforced by 'expert analysis' on YouTube and the social media.

This was the background and context to a recent meeting organised by the Indian Express, to bring Dr. H. Ardhia, the Revenue Secretary himself, to interact with the pubic. It was a decidedly anxious audience  of about 400 people who assembled at IIC on 6 June, 2017.

It was a packed hall, ringed with people who could not find vacant seats. The two empty chairs on the stage were taken up Vishwanathan from IE, and Dr. Ardhia, who was described as a PhD in Yoga!

First came the big picture: The long legacy of Indirect Taxes (Customs, Excise Duty, Service Tax, VAT, Stamp Duty, Entertainment Tax, etc.,), how the division of responsibilities between the central and state governments had resulted in various inefficiencies, and how steps were taken to gradually move from VAT to a nation-wide, common GST system.

The total tax collection for FY 2015-16 was INR 14600 billion (Rs 14.60 lakh crore), of which indirect tax revenues was Rs 7.11 lakh crore and direct tax collection came in at Rs 7.48 lakh crore. In India, the ratio of direct vs. indirect taxes was 35:65 - just the opposite of what it ought to be, and the sheer absurdity of the fact that in a country of 1.2 billion people there are only 2.4 million people who earned an annual income of over INR 1 million!

A substantial part of the session was set aside for answering questions from the audience. Surprisingly there were hardly any long-winded queries - most of them were short and sharp, with matching responses from Dr. Ardhia, with a dose of good humor. At the same time, it was a bit disconcerting to note from the responses, that the Revenue-Secretary too was not entirely clear on how the government would cope with various interpretations of the GST Act 2017.

Starting from 1 June 2017, we are sure too see many months - and perhaps years - of GST-related turbulence and turmoil.


* Taxes to be subsumed in GST - http://www.gstindia.com/gst-knowledge-series-5-taxes-to-be-subsumed-in-gst/

* (2017) - Dept of Revenue - collection during current year - http://www.dor.gov.in/revenue_ctc
- 2011-12 Corporate tax 3.2 LCr -- Income Tax 1.7 LCr = Total 4.9 Lcr
- Customs 1.44 LCr -- Central Excise 1.4 LCr -- Service Tax 0.97 LCr = Total 3.9 LCr

* E&Y on GST Compliance - http://www.ey.com/in/en/services/ey-goods-and-services-tax-gst

* Global VAT / GST Rates - http://www.vatlive.com/vat-rates/international-vat-and-gst-rates/

* (2016) - Tax collection in 2015-16 exceeds target by Rs 5,000 crore - http://timesofindia.indiatimes.com/business/india-business/Tax-collection-in-2015-16-exceeds-target-by-Rs-5000-crore/articleshow/51718111.cms

* State Tax Revenues - https://en.wikipedia.org/wiki/States_of_India_by_tax_revenues
- Total for all states, 30,331 billion (30L cr)
- Top five - WBengal (4518b), AP+Telengana, UP, TN, Karnataka
- Kerala is at no.9 at INR 1382b

* (2017) Budget Explained -- http://indianexpress.com/article/explained/budget-union-2017-tax-fiscal-deficit-expenditure-revenue-breaking-down-the-budget-4503206/

* Revenue Secretary - http://www.dor.gov.in/revenue_secretary
- Dr. Hasmukh Adhia

Sunday, June 04, 2017

Breathing Life into Statistics

There is lies, damn lies and statistics. And then there is Prof. Hans Rosling.

Rosling was Swedish specialist in Global Health, and a tireless evangelist for the cause of statistics - especially the art of presenting dull, boring numbers in stunning visualizations.

The first time I saw Rosling in action was in this TED video, made about 10 years ago:

Earlier this year, in February 2017, I was saddened to know that Rosling had died of pancreatic cancer. And today, for some reason, I found myself going through a BBC documentary on him, followed by an urge to revisit a few of the simplest statistical tools that I had learnt to use, but forgotten from disuse and disinterest, over a period of time.

While I could sail past the concept of Averages, and even wrap my head around the Normal (Poisson) Distribution, I had forgotten all about Standard Deviations (SD), Statistical Correlation and Dependence..

As explained in this video, the SD process consists of (1) collecting data (2) calculating the average/mean of the data set (3) subtracting this mean from each of the data units, and squaring the differences, (4) calculating, once again, the mean of the squared units, and, finally, (5) calculating the square-root of the 'mean of differences' to get the Standard Deviation, which tells you how diverse the numbers in your data-set are.

Why exactly do we go through this five-step process? What is the logic behind all this squaring and subtracting? I still don't know...but it does remind me that I had asked the very same question in a classroom many years ago, and failed to get a satisfactory answer. Then, as now, the whole thing seemed like a form of gymnastics with numbers.

And yet, Hans Rosling seems like the sort of guy who would have given me a clear, logical answer, and triggered in me a passion for data. How wish I had come across such a teacher, a few decades ago!


TED Video - "The Best Statistics You've Never Seen!" - https://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen?utm_source=tedcomshare&utm_medium=referral&utm_campaign=tedspread

Don't Panic: The Facts About Population - https://www.youtube.com/watch?v=FACK2knC08E

Gapminder Foundation - http://www.gapminder.org/

Obituary (Feb., 2017) - Hans Rosling: Data visionary and educator dies aged 68 - http://www.bbc.com/news/world-europe-38900572

Saturday, June 03, 2017

Travelers to Tibet

The Great Himalayan Range has always been a formidable barrier that limited India's interaction with Tibet and China.

Unlike the North West frontier, it has not been a thoroughfare for invading armies. Instead, it has always been the doughty traders, monks and herdsmen who connected the tribes living in the Tibetan plateau to those on the vast, fertile plains of India. The rivers that cut through the plains have always always been important for us, but did we really care where exactly they originated from?

Among the 20 longest rivers in the world, five flow though in Asia. Three of these have unique names: Yang Tse (no.3, 6300km), Huang He (Yellow River, no. 6, 6464km), Mekong (no.12, 4350km). The remaining two are hyphenated because they by one name in one country, and another name as it flows into a distinctly different region - the Brahmaputra–Tsangpo (no.12, 3848km), and Indus–SĂȘnggĂȘ Zangbo (no. 19, 3610km).

Charles Allen's book, "A Mountain in Tibet" tells the fascinating story of how these hyphenations came to be. It is about a few officers and agents of the British East India Company who are obsessed by shikaar (hunting), the desire to escape boring desk-jobs, and by the lure of the Great Unknowns. These young men (most, less than 27) venture into the mountains, hoping to accurately map new places, and opening new trade routes into Asia.

People and places come alive in Allen's narratives. It starts from the earliest expeditions by Moorcroft and Hearsey, the Schlagintweits, and then, to the undercover, spying expeditions undertaken by the Bhotia pundits from Milam village in the Kumaon mountains - Nain Singh Rawat, and his clansmen. It takes you through remote mountain villages and passes (Mana, Niti, Dakeo), across the the sacred lakes of Rakas Tal and Mansarovar, to Mt. Kailas and beyond.

One common thread that runs through Allen's narratives is that if it were not for the European - mainly British -  adventurers, armed with sextants, compasses- and musical snuff-boxes -  the world would not have known anything about the Tibet, or about the real origins of the great rivers that sustain life in South Asia.

Is this really true?

Some of the oldest surviving Sanskrit texts from India are being discovered in ancient Tibetan monastries. "Mulamadhyamakakarika", a 2nd century founding texts of Mahayana Buddhism, was found in Drepung Monastry. The Lankavatara Sutra was found in the Potala Palace in Lhasa. The Bhadrakalpika Sutra, dating back to the 4th century was found in Xinjiang. An Indian monk, Bodhidharma (5-6 century CE), is recorded as being one who popularized Buddhism in China, and then on, to Japan.

Obviously, a lot of people have been going to and fro, long before the first Europeans set foot on the Himalayas. And yet, Allen would like us to believe that until his heroes stepped in, Tibet was 'unknown to the world'.

Today, in the age of Google Earth and satellite pictures, this is common knowledge that can be verified by anybody sitting in front of a laptop screen. Yet, it is intriguing to know that despite a history spanning at least 4000 years, the origin of these rivers was not common knowledge.  People living in the Indus or Bramhapurta valley may not have known that their river originated in the barren Tibetan plateau, thousands of kilometers away. Then again, in the vast web of Himalayan rivulets and streams that feed a river, is it a significant discovery to claim a single-point source?

"A Mountain in Tibet" is a really interesting book. It is also another reminder that we continue to look at ourselves through the purple blinkers worn by the Europeans, and that this will continue until we start producing great non-fiction writers who tell our side of the story.


Friday, June 02, 2017

Microwave Ovens and WiFi Routers

I never cease to wonder about the electromagnetic spectrum. Much of it is invisible to our senses, and yet, we have reached a stage when it is quite impossible to survive without it.

The microwave oven in out kitchens sends out waves at around 2.45 GHz (2,450,000,000,000 vibrations/second!), heating up food at the molecular level. The ubiquitous WiFi that keeps us connected to the internet - and the rest of the world - are "harmonized" worldwide in the 2.4 and 5GHz bands. Even without getting into the world of electronic waves that send signals across great distances (radio, satellite and space probes), getting a grip on regular household devices seems complicated enough!

Both the equipment's - the microwave oven and the WFi router - produce signals in the Industrial, Scientific and Medical (ISM) bands that have been allotted by ITU for non-communication purposes. There seem to be 12 frequency ranges in the ISM band that ranges all the way from 6.78 MHz to 245 GHz. Out of this, home equipment like ovens and WiFi routers use the frequency range 2.45-2.5 GHz.

Since a licence is not required for equipment produced in this range, the part of the spectrum is also crowded with radio-communication services, including amateur satellite services. Thanks to this dual-use, the WiFi equipment you purchase from one country country is likely to interfere with the microwave oven imported from another country. So, if you are heating a mug of coffee in your microwave oven, your internet connection may get disrupted.

International standards - especially IEEE 802.11 a/b/g/n - tries to deal with this problem:
  • 802.11a supports bandwidth up to 54 Mbps and signals in a regulated frequency spectrum around 5 GHz. More expensive, usually used by businesses. Higher frequency makes it difficult to penetrate walls, so its best for open areas.
  • 802.11b supports bandwidth up to 11 Mbps, comparable to traditional Ethernet. Usually for home networks.
  • 802.11g supports bandwidth up to 54 Mbps; uses the 2.4 GHz frequency for greater range
  • 802.11n is an improvement on 802.11g in the amount of bandwidth supported by utilizing multiple wireless signals and antennas (called MIMO technology) instead of one.

It is still mind boggling to think that we have actually figured out ways to precisely control devices that produce more than a trillion vibrations per second! How do we do it? And why is it that microwave ovens need chunky magnetrons to produce the same kind of signals that are produced by lightweight WiFi routers?

In an emergency, can I rig up my WiFi router to heat up a mug of coffee? :)


ITU - http://www.itu.int/en/Pages/default.aspx


Wireless Standards - https://www.lifewire.com/wireless-standards-802-11a-802-11b-g-n-and-802-11ac-816553

Wednesday, May 31, 2017

A Stake in Beef

India is a predominantly vegetarian country, right? A place where the cow is worshiped as a holy animal?


Take a closer look at this graphic:

Amongst all the states in India, meat is consumed by more than 60% of the population in just four Westerns states - Punjab, Haryana, Rajasthan and Gujarat. In all the remaining 24 states, a vast majority of the population is non-vegetarian.

Dig a little deeper and you find that the meaning of "non-vegetarian" changes from state to state. While you can have eggs, chicken, fish and mutton anywhere, if you are inclined towards beef, legal slaughter of bovines is permitted only in nine states: One in South India (Kerala), and all the remaining ones in East India. In some states you could be jailed for up to 10 years for cow slaughter (!!).

This touchiness with cows is a fairly recent phenomenon. According to historians, "Brahmins who once had no compunctions against slaughter of animals, including cows, and were the greatest beef-eaters themselves". The elevation of the cow as a "holy animal" came as a political strategy to counter Buddhism which was predominant across India, until a 1000 years ago. It was the means of stealing the thunder from the non-violent Buddhists, and it worked like a charm.

Cut back to India today, and you find the government trying to push through a new policy that places severe restrictions on the use of agricultural markets for the sale of animals for slaughter. Over the past two weeks there has been an uproar in many states - protests by the meat and leather industries, political protests ending with the killing of a cow in a public square, and #beefcurryfestivals in South India - culminating in a High Court judgement yesterday, staying the latest government order for a few weeks.

Now that we have a breather, it may be worthwhile to examine both sides of the raging debate, which can be divided into two categories - emotional and rational.

The emotional argument is simple. It just states that "Cow is a holy animal for Hindus from time immemorial"; Cows are referred to as "Gau-Mata" (cow-mother), equated with human beings, and implies that harming the cows would hurt the religious sentiments of the Hindu community. There is little you can do to counter an emotional arguments hinged on hysterics, so let us move over to the next category.

The rational arguments come in different categories:

* Constitution, Law and Public Policy:
In 1996, the Supreme Court ruled that a ban on cow slaughter violated of the fundamental right of butchers to carry on their business under Article 19(1)(g). Then in 2005, a bench of seven judges upheld the total ban on slaughter of cow and cow-progeny and stated that cattle never became “useless”, at the most, they became “less useful” (!).  The latest rules to regulate the cattle market - framed under section 38 of the Prevention of Cruelty to Animals Act, 1960.
By bringing in all farm animals under the new rules, the stage has been set for challenging the SC ruling that was aimed only at protecting cows. Should some animals be more equal than the others?

* Public Health:
Excess of protein consumption - especially red meats - has been proven to have bad effect on health. Also, according to WRI, reduction in meat consumption can lead to lead to a per capita food and land use-related greenhouse gas emissions reduction of by 15 and 35 percent, by 2050.

* Animal Rights:
Clearly, there is a case for humane treatment of animals. As of now, cumbersome rules and regulations make cattle trade a surreptitious activity. This only worsens the condions in which the animals are transported, stocked, slaughtered and traded in different states.

* Economic Value:
Farmers invest in animals after considering life-cycle costs. Once cows stop giving milk, the farmers see no point in spending scarce resources for feeding the animals, so they are sold to the local butcher. In India the going rate is between INR 15,000 and 40,000, depending on the age and weight of the animals. If the animals cannot be sold they would be just abandoned on our roads and highways, resulting in traffic accidents. 

Ultimately, rational arguments seem to matter only if they can provoke a powerful emotional counter-argument that makes people vote in a certain way. As of now the argument on religious sentiments seems to have the upper hand.


Saturday, May 27, 2017

SMEs in India and Japan

Small businesses are often called the backbone of economies. Relatively low profile and unseen, they play a major role economic growth and prosperity, innovation and job-creation, in most countries.

Governments refer to these small businesses as Small and Medium Enterprises (SMEs). In most countries, they represent over 95% of all enterprises, and a significant chunk of national GDPs.

However, there are also significant differences in the way different countries view SMEs. Take, for instance, a comparison between India and Japan:

As we can see in this table, Japan sets the bar much higher for SMEs. A company with a capitalization of JPY 300 million (USD 4m) and up to 300 employees would qualify as an SME in Japan but would definitely be considered a "big" enterprise in India.

Also, in Japan, many SMEs occupy super-specialized niches that cater to a global market, while in India such companies are few and far in between. Some of these world class Japanese SMEs are:

  • K. Yairi - maker of hand-crafted guitars
  • Roland - manufacturer of electronic musical instruments - synthesizers, electric pianos and drums
  • Shimano - Bicycle components, fishing tackles and rowing equipment
  • Tamiya - Plastic model kits, educational
  • Molten - Sports equipment
  • Olfa - Cutting tool, DIY stuff
Many of these companies are over 70 years old, and have evolved through tough competition in the domestic market. High expectations in terms of quality and price from the customers at home helped them carve a niche for themselves in the global markets as well. Perhaps this is one of the key factors that has, so far, prevented Indian SMEs from creating world class products.


* Indian Ministry for Micro, Small and Medium Enterprises (MSMEs) - http://msme.gov.in/

- 23 million SMEs - provide 75 million jobs (two out of every three private sector jobs)
- They represent 99% of all enterprises
- less than 250 employees and less than €50 million annual turnover (or €43 million annual balance sheet).

- 98 percent of all identified U.S. exporters -- supporting nearly 4 m jobs through both direct and indirect exports

Thursday, May 18, 2017

GST in India: For Better or Worse?

Apple has started manufacturing iPhones in India. According to a WSJ report, the the iPhone SE series is being produced by Wistron, near Bangalore. Since the locally manufactured or assembled products will not attract import duties, it seems the prices are going to about USD 100 lower than imported phones.

Import duties and taxes make a big difference to a companys' fortunes. India's tax system is often cited as one of the top reasons why global manufacturers prefer to stay away from India. For instance, JCCII, a body representing Japanese corporate's, puts out every year "Suggestions to the Government of India". These suggestion have remained more or less unchanged for many years, and it is always complaints about the tax system that tops the lists.

In the latest 2016 list too, JCCII's tax-related suggestions include -
  • Removal of Permanent Establishment (PE) taxation
  • Easing of Transfer Pricing assessments by classifying Japanese Trading Companies (Sogo Sosha), not as traders but as Service Providers
  • Exemption from Minimum Alternate Tax (MAT) in the SEZs
  • Exemption from Dividend Distribution Tax (DDT) paid to foreign shareholders
  • Exemption of Service Tax on exports from India
In other words, the Japanese companies are saying, "If you don't let us take our profits home, we will not be able to invest more in India". In the official cover note JCCII also says, "While we await...the all-important GST bill, our concerns on the Tax system...remain."

So is the GST going to really improve our tax system and east of doing business? Much of what I have read so far has been gung-ho about GST, and about how it is going bind the whole country into one large happy market for goods and services.

An interesting contrarian view is held by Aravind Datar, who is quite convinced that GST, in its present form, is only going to worsen the ease-of-doing-business scenario in India. Here is the video -

The critical points are -

* More Laws, More Confusion: As of today, 29 states in India have their own VAT / Sales Tax laws, and separate laws for Service Tax and Excise Duty (total 32 laws). When GST is adopted by all the states we will have 29 StateGSTs (SGSTs), one Central Service Tax (CST) and one Inter-State GST (IGST). In all, 31 laws instead of 32.

* Lack of Checks and Balances: The GST Council can make only recommendations, which cannot be enforced. The state governments are free to make GST laws as they please (as per the 101 Amendment, Article 246A, and the Supreme Court judgement of 11 Dec., 2016)

* Cumbersome Reporting Requirements: Service providers currently file their returns twice a year. Now they will have to file 49 returns every year! (3 returns per month online - 10, 15, 30th + 12 TDS returns + 1 annual returns = 49)

* Discouraging Economies of Scale: Any company earning more than INR 2 million will have to file returns. So this will only encourage those who want to stay below that threshold, as in the old "License Permit Raj" days.

* Enormous potential for tax evasion, and tax-related harassment: Unlike other countries which have one single GST rate (eg. Singapore - 7%), we are going to have slabs - 0%, 5%, 10%, 28%. This encourages ambiguity, and the discretionary powers of tax officers.

* More Ambiguity, Not Less: Lack of clarity on General Anti Avoidance Rules (GAAR) and Place of Effective Management (POEM) is sure to discourage manufacturers and FDI investors.

Datar is a great communicator and his speeches, articles and arguments are quite convincing. Is there anybody in the establishment who has come up with a point-wise rebuttal of the concerns raised by him?


* (2017) WSJ - https://www.wsj.com/articles/apple-assembles-first-iphones-in-india-1495016276

* JCCII's Suggestions to GoI (2016) - http://www.jccii.in/Docs/0333_2016_suggestions_jccii_summary_english.pdf

* Aravind Datar on GST - https://www.youtube.com/watch?v=xGmJyxugA2E

* (2015) Aravind Datar, IE - GST's Seven Deadly Defects - http://indianexpress.com/article/opinion/columns/gsts-seven-deadly-defects/