Archives for June 2016

Whenever we start criticizing the way BJP is running the central government, we are accused of being anti-national or a traitor. BJP and its leaders do not know how to talk to people who may even be their well wishers and they react with ferocity.

As a citizen of India, we consider it our duty to point out when the government is making a mistake. When these mistakes can cause serious harm to the country, we try to stop the government from pursuing that harmful course.

We would like to point out five blunders that have been made in the time the NDA government has been in power.

1. Make in India

Make in India is an invitation to foreigners to come and make in India. It tells the world that we Indians are idiots; our businessmen are too stupid to set up businesses; we need outsiders to do manufacturing in this country.

“Oh, you white people! You are the superior race; we beg you to come and teach us how to make stuff in India.”

“Make in India” is the anti-thesis of swadeshi! The Swadeshi Jagran Manch, a sister organization of BJP and RSS, is hiding its head in the sand somewhere far away.

We have made rapid strides in technology and manufacturing capabilities since independence. Our engineers have the capabilities to make practically anything and everything; all they need is the opportunity to do so. They have proven it again and again, whether it is making a nuclear weapon or sending a spacecraft to Mars or something as simple as a car. We are one of few countries in the world with the capabilities of designing and manufacturing automobiles. The biggest stumbling block for Indian engineers and entrepreneurs has always been its bureaucrats and politicians. With BJP at the helm of affairs this stumbling block has become larger and more menacing.

BJP came to power on the promise of supporting Indian entrepreneurs, engineers, and businesses; however, the opposite has happened. All over the country, entrepreneurs and industrialists are frustrated; their businesses are sinking, and the Government of India has no time to listen to their woes. GOI has no empathy for our local entrepreneurs. Ask someone who is going through the pains of running a factory in today’s India. I can assure you that he will tell you stories that are so horrible that it will either make your blood boil or curdle. Some public sector banks, following the dictates of the present government, do not even care about their own written commitments and are doing all that is possible (legally or illegally) to throw local businessmen out of business, businesses that were nurtured for decades. The atmosphere for Indian entrepreneurs, industrialists, and businesses has never been more hostile and depressing since independence.

This is an anecdote given by a prominent businessman who desires to remain anonymous for obvious reasons.

“In October 2015, IIT Bombay Alumni Association organized Global Business Forum (GBF) at Goa. Manohar Parrikar, Defence Minister, was present at the GBF. I saw him. No, I did not meet him. My friend, S, who is a batch-mate of Manohar and is a significantly more accomplished engineer and technocrat than Manohar, was also present at the GBF. S put in a formal request for a one-to-one meeting with Manohar. The appointment was granted and S went to meet Manohar. Later I asked S about his meeting. S was furious. He said that he is not stupid enough to discuss strategic technological ideas for national defense in the presence of foreigners. When S went to meet Manohar, there were three foreigners representing global corporations sitting besides Manohar. Apparently, the message that Manohar wanted to convey to all IIT alumni present at GBF was that, look, if you want to do business with Ministry of Defense, you will have to go through one of these white guys first. Manohar, apparently, believes that in the new environment when Modi government is going to outsource defense manufacturing lock-stock-and-barrel on a long term basis to multinationals, the best he can do for alumni of his alma mater is to act as a liaison between the alumni and the new colonial masters. I also attended the Special Interest Group of Make in India at GBF where the loud-and-clear message was that Indian entrepreneurs should learn to pick up small mercies thrown their way by the large global corporations as part of their local content commitments under Make in India.”

Like any Indian, I am aghast, ashamed, and angered by “Make in India.” The insult to the abilities of Indian engineers, entrepreneurs, and businesses is galling and too big to swallow. The red carpet that the Modi government is rolling out for foreigners is in sharp contrast to the treatment that it is giving to Indians. It pains to be treated as a second-class citizen in one’s own country and more so by people who claim to be ultra-nationalists. Surely, nationalism is much more than just singing Vande Mataram, shouting Bharat Mata Ki Jai, and putting up gigantic flags across the country?

2. Startup India

Most people wrongly equate startups with business ventures. There is a difference between being an businessman and being a promoter of a startup. The concept of “startup” is basically an American concept.

In India, the traditional system is a family-based entrepreneurship model. The idea of an investor-controlled startup model is foreign to us. Indian businessmen build businesses with their blood and sweat with dreams of handing it all over to the future generations. The American startup model is based on making a quick buck, converting x to 10x in short time, and retiring (or running away).

GOI has released Startup India Action Plan dated 16 January 2016. The Action Plan defines Startup as follows: “Startup means an entity, incorporated or registered in India not prior to five years, with annual turnover exceeding INR 25 crores in any preceding financial year, working towards innovation, development, deployment, or commercialization of new products, processes, or services driven by technology or intellectual property…provided further that a Startup shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.”

Without getting involved with all the legal jargon, we can be clear that most new ventures started across the country every year will NOT be eligible to be classified as “startup.” GOI is going to set up a centralized Inter-Ministerial Board (IMB), which will certify a venture as startup or not a startup. No prizes for guessing the hidden under-the-table costs involved for getting the certificate from IMB. For a country of the size of India having a central body for such a certification seems a sure recipe for corruption.

IMB certification is not the only hurdle that a venture has to jump before being certified as a startup. It has to be funded or supported by either a private equity fund or venture capital or some specified government agency. If a technocrat puts in his own or family funds and starts a venture, he/she will not be eligible for being called a startup, thus ruling out the indigenous family-based business model in one stroke.

The Action Plan announced by the Government of India is crafted to ensure Indian businessmen to sell a significant part of their company equity to one or the other sharks (read, Private Equity/Venture Capital Funds). Government will fund the sharks to buy the equity of such startups and to make money from the innovation strengths of Indian innovators. The government support to the sharks is announced to be of the order of about Rs. 10,000 crores.

Why has the government decided to extend the support to various funds which are known sharks and not found it worthwhile to trust public sector banks for this purpose? The government is setting up a “Fund of Funds” to provide financial support to “daughter funds.” There are too many unanswered questions that such a concept throws up. As it appears, in the name of startups, the government is providing budgetary support to a private financial sector outside the nationalized/public sector banks. Since the Action Plan itself acknowledges that startups are prone to failure, this may well finally turn out to be a grand racket, whereby public money lands up in private hands with no accountability and no gains for the country as a whole. There is also the question of regulating the relationship between the sharks and the poor promoter of a startup. Why fund the sharks without any protection of actual innovators and technologists?

According to the champions of the “Startup scheme,” no venture in the history of independent India is eligible to be classified as a startup. Just imagine! Reliance, TCS, Infosys, Wipro, Mahindra, Kirloskar, and Nirma DO NOT QUALIFY to be classified as startups according to the definitions and criteria stipulated by government. On the other hand, major e-commerce giants like Flipkart, Snapdeal, etc., did not have any innovation content when they started. All of them are clones of e-commerce companies in USA.
What gets classified as innovation and what gets rejected will be a matter of discretion which will lie at the hands of foreign-owned funds who will say whether they have found the idea worth investing in or not. In other words, we are heading towards East India Company Version 2.0.

Most developing countries have grown their industry on the basis of reverse engineering and small steps in the fields of technology. India is no exception. Instead of innovation, if the government had emphasized technological relevance for the country, it would surely have made more sense. Most technological innovations are small smart steps taken in the course of a long journey. By supporting smart, educated entrepreneurs, government and banks can create an eco-system where innovation flourishes. Instead of the grand Start-up Action Plan, government could have applied its mind to change the mindset of bankers who look only at collaterals and refuse to look at the capabilities of entrepreneurs. Of course, that is not as easy as handing over Rs. 10,000 crores to hungry foreign sharks.

Is the Startup Action Plan based on lessons learnt from global experiences? The concept of startup comes from the USA which is going down in terms of industrial growth. Germany, China, Japan, Israel and South Korea have entirely different entrepreneur eco-systems with no focus on startups. Is it not strange that India is copying a falling giant instead of learning from successes of the rising stars?

There can be no denying the fact that the USA has followed policies which have led in the past 50 years of the rich becoming richer and the poor becoming poorer. It is a fact that 1% of USA owns more than 95% of the wealth of USA. This level of inequality has on one hand led to social tensions and on the other is leading to stifling of industry and entrepreneurship of that country.

The Startup Action Plan has gone almost unnoticed by the media which is more concerned on covering sensationalist headlines. Even Indian banks have taken no notice of the Action Plan. Will this blunder be corrected before it destroys us?

3. Smart City

Bhopal is one of the twenty cities chosen for Smart Cities Mission (SCM). No native Bhopali is happy about this. Within the city of Bhopal, opposition to the Smart City Scheme is already building up. Though there is no clarity about what is meant by the SCM, it is seen as an attempt to create islands of ultra-superior infrastructure within the existing cities; thus, we will have ultra-modern islands in a sea of underdevelopment or no development at all. Imagine skyscrapers next to slums.

Creating islands of prosperity with first world quality infrastructure is meaningless. Modi came to power proposing that each Member of Parliament (MP) chooses one village to develop as a model village using his MP Local Area Development (MPLAD) Fund. A few MPs did follow Modi’s proposal, but most MPs soon realized that creating one village with far superior facilities (than all the other villages within one constituency) will be politically disastrous due to reactions from other villages. If a constituency has 2000 villages, a MP who develops only one village risks losing votes from 1,999 villages. No wonder most MPs refused to go with the suggestion of developing a model village and ignoring all others. Translate this model village idea to model city and you get the picture.

A similar situation is likely to unfold in twenty cities of India with SCM. In Bhopal, it is proposed to develop about 2% of the city in the style of Singapore or Paris. It is foolish to think that 98% of the city that is not developed will applaud the development of the 2%. As persons who believe in the politics of taking care of all sections of society, the whole idea of SCM is abhorrent is abhorrent to us.

4. Smriti Irani

The damage done to field of higher education in India by this lady is too enormous to ignore.

While the lady pleases the die-hard BJP loyalists with her fiery speeches and aggressive gestures, on campuses across the country, a significantly large percentage of the students (and even faculty members) refer to her in such insulting words that are largely unprintable. The hatred is, of course, mutual. She has never failed to insult and hurt the most respected of the academic community at every public and private forum. She believes that this country’s education system has been ruined by all those who were stupid enough to get educated beyond secondary school. She believes that the God has chosen her to kick, punch, and be the messiah of this bunch of idiots with PhDs, DLitts, and such other fancy degrees, and if they do not prostrate before her and accept her divine authority, she is fully justified in delivering more kicks and punches.

Let us take one example. From the days of Jawaharlal Nehru, the process of selection of Director for an IIT was carried out in a set pattern.
1. A selection committee chose four or five famous professors. Being shortlisted by the committee was a matter of honour.
2. The shortlisted professors were called to Delhi in a respectful manner.
3. Each professor was called in at a different day and time without anyone of the selected few knowing the other selected ones.
4. Initially, Jawaharlal Nehru himself used to be present in these personal discussions (not called interviews, keeping in view the VIP status granted to the selected professors).

The proud Smriti Irani found the whole system of treating learned professors with dignity and respect, highly objectionable. She insisted that there should be a shortlist of twelve professors for each IIT and the process of selection of directors for three IITs should be combined. At her direction, 36 professors were called for personal discussions all at the same day and time. The earlier respectful approach was dumped and replaced by treating the whole bunch of 36 senior-most professors of the country as a herd of sheep. It would have been easy to stagger the discussions with them over one or two days and call each of them at a separate time. But, that would have deprived Smriti the sadistic pleasure of making them wait whole day looking at each other’s faces with an expression of an embarrassment. To make it worse, the interviews were cancelled twice AFTER everyone had assembled.

The above is just one instance. One has to sit with academicians at any of the reputed institutions of the country to hear similar sad stories of insults and embarrassments. There is no doubt that Smriti is having a great time kicking everyone with a respectable degree. Stories of this sadistic fun are being passed on from senior professors to junior faculty and then to the students. In the process the damage that she is doing to higher education and to the morale of the faculty is enormous.

5. Arun Jaitley

Arun Jaitley has done nothing. Arun Jaitley can be accused of no wrong except that he has done nothing whatsoever and has only continued in the tracks set by his Congress predecessors.

Arun Jaitley was a nondescript and mediocre lawyer till he was lucky to be picked up to be a Cabinet Minister in the Vajpayee Government. As a politician, he is an expert in playing his cards well. He has always been close to the top guns in the BJP. While he is an expert of knowing which side of the bread is buttered and on keeping the bosses in good humor, his arrogance and egoistic nature will prove to be his own undoing. Is it any wonder that he has never won an election so far?

Arun manages to camouflage his lack of intellectual depth and mediocrity with his impeccable language, style, and mannerisms. Unfortunately, language, smartness, and style can help one only to some distance. In the long run, one needs to perform.

Performance comes from capabilities, knowledge, ability to build and carry a team, creativity and, in politics, by being in touch with ground realities. Almost everyone who has been watching Arun Jaitley for past two years is convinced that he lacks all these qualities.

Modi came to power on the promise of a new economic model and all round economic development leading to prosperity for all. Instead, the country has landed up with a finance minister who has zero knowledge of economics, one who is pushing the earlier government’s anti-poor economic agenda, one who has no new ideas, and one who is not even ready to even listen to new ideas.

The businessmen who funded Modi’s campaign in 2014 would, today, rather not discuss about Modi or politics. They are disappointed, hurt, and feel cheated. Even Indian capitalists feel that the country has been sold out.