Fate of the Make in India program?

Recently, the Modi Government launched the ambitious ‘Make in India program’, where investors from the world over were requested to include India in their manufacturing plans and to invest extensively here. The aim is to convert India into a manufacturing hub for the world, very similar to China, as we offered the largest bunch of young, trained and motivated workforce's in the world. Intricately planned and amazingly thought through, details of Sectors that are desirable, the ‘Smart Cities’ that are being developed into such hubs and also the ‘Industrial Corridors’ that would work in unison have all been identified, but has any focus been put on one aspect – The Ease of doing business in India?

It is quite embarrassing that as a nation, we seem to unfailingly go after all our big FDI investors with a hunting crop! Tax notices have been served in the past on Vodafone, Nokia and BMW. Is this perhaps because our rules are so opaque, and our bureaucrats love to keep things shrouded in mystery and adhocism so that, suddenly, one fine day, they have the opportunity to use their Discretionary Powers to suddenly re-interpret the rules? Why is it not possible to publish a clear document recording all the Rules, Legal and Financial compliance's at the time of granting of the License? Will it not avoid this silly season of litigation and arbitration with Governments pulling in their ‘Sovereign’ punches – as Finland was forced to do some months ago?

Now, sadly, Nokia has announced that it will shut its Chennai facility on the 1^st of November, as it couldn't be transferred to the purchaser, Microsoft on account of pending Tax Claims by both the State and Central Governments. This move has put some 6,600 people out of work (directly) and adversely affected some 10,000 others indirectly. What will happen to Vodafone and BMW, next? With this kind of business climate and officialdom, the Make in India campaign is doomed to failure, unless the License-Permit Raj run by the bureaucracy is eliminated.

Just a couple of days after posting this article, I learn with dismay that the World Bank has demoted India a further 8 places to be 142 out of 189 (please see Economic Times link), for the period June 2013 to May 2014, which is the last year of the UPA Government. Thus, it is amply clear that all efforts of the UPA Government, if anything, did nothing to improve the business climate in India, leaving this unenviable task to the NDA Government that is now in power. The World Bank was thankfully quite candid in mentioning that this dismal performance cannot be a reflection on the performance of the new political dispensation which had been in power for a few days at the time of this evaluation.

I do hope that this will be a wakeup call to the NDA Government and they will configure all their policies in such a manner that India reaches to within the top 25 countries in year one, and higher as the years go by. For any foreign investor, who has 141 options better placed than India, it is not conceivable that he will overlook all 141 options and pick India to invest in. We have got to change the way we do business. 

Update as on 24th November 2014.

Since I wrote this article, I am thrilled to note that the Government of India in a surprising exhibition of alacrity, adopted the World Bank Report Ease of doing Business as a guidance tool, and has promised that they will configure the policies in such a manner as to be in full consonance with the requirements of Ease of doing Business and has even promised that they will try their best to ensure that India figures within the top 50 in a years' time.

Needless to say, this a sea change for an Indian Government and the openness, the speed of response and the appropriateness of the response is most heartening. 

The Make in India team have also since become quite active on Facebook and Twitter (@makeinindia) and have been collaring many followers, who, one would imagine, would encourage, motivate and guide the policy with their comments, including me.

More recently, a report titled Country Brands Index came out, something that I was personally not aware of, wherein they analyse a country's strengths in various criteria - economic, environmental and social and rate a country on how it is perceived by the rest of the world. Hence, a country that is high in the perception index, enjoys a high degree of reliability perception and hence people would be less hesitant to buy a product manufactured there. Thus, countries themselves become brands! 

I was amazed that just when India embarks on a Make in India program, a report, upon aligning with which, would ensure the success of the Make in India program, came to my notice, and I have introduced the same to the Make in India team. I do hope they will recognize the benefits and work toward a high CBI rating in 2015 and make us all proud. 

If India rates within 25 on the #EaseofdoingBusiness and within Top 20 on the #CBI2015, there will be nothing that can stop the flow of investment to us.

http://economictimes.indiatimes.com/news/economy/indicators/india-ranks-142-in-latest-ease-of-doing-business-report-world-bank/articleshow/44967304.cms

http://www.thehindu.com/business/Industry/nokia-to-shut-down-its-chennai-factory-from-nov-1/article6478317.ece

http://www.makeinindia.com/

Great outreach, Minister of Road Transport & Highways

The tragic loss of Cabinet Minister Shri. Gopinath Munde in an urban road accident, caused by something as silly as a jumped red light, and the fact that despite having one of the lowest vehicular densities, India holds the dubious distinction of suffering the highest road fatalities in the world, brought about a change in the attitude of the Government, and is taking pragmatic steps in attempting to curb this loss of life. 

In this connection, I was really impressed by an outreach program launched by the Ministry of Road Transport and Highways, who have drawn up a comprehensive road safety bill, and has put the same out in the public domain and quite creditably sought inputs and suggestions from the public. Everyone must salute this outreach of the ministry and extend all support. 

http://morth.nic.in

http://morth.nic.in/showfile.asp?lid=1424

http://morth.nic.in/index2.asp?slid=1479&sublinkid=933&lang=1

As I have written before on the topic of Highway Safety in this blog, and I was hoping to also cover the aspect of Urban Traffic Safety in another article, this opportunity was a Godsend. I reproduce the mails I sent and my suggestions:

“Suggestions for the Road Transport and Safety Bill” 

Dated 14th Sepetmber, 2014

"I congratulate you in taking steps to make our roads safer. I also applaud your outreach program in seeking public opinion and thank you for this opportunity to offer my suggestions.

I would like to bring to your notice that some automobile companies seem to treat India as an unregulated third world market and resort to shoddy adaptation of their international left-hand drive vehicles before releasing them in India. Thus, in some brands of cars, among other shortcuts, the trafficator switch remains on the left, making it very confusing for people who normally drive cars which follow the Indian standard of trafficator switch on the right. In a critical situation, this may lead to accidents. India must not permit this anymore.

Further, car manufacturers also follow purely commercial considerations while deciding on the inclusion of safety features which make Indian cars quite unsafe to use as even basic safety features such as Crumple Zones, Air Bags and ABS are treated as 'luxury' features.

I request you to clearly define what constitutes an acceptable Indian automobile, with some of the minimum safety standards being recorded in an advisory and enforced strictly. Provision of 2 Air Bags, Crumple Zones, 5 Seat Belts and Trafficator on the right should be made compulsory, is my submission.

Another area of grave concern for us, is the fact that our National Highways constitute under 10% of our road length but contribute over 30% of road fatalities. Thus, just making our highways 4-laned are not making them safe, as we do not enforce any regulation of the highways to make them into safe traffic ecosystems. It is of utmost importance to urgently introduce a Highway Code that restricts access of tolled highways to certain classes of vehicles that are manufactured highway worthy, and also define lane restrictions and speed restrictions for users.

Needless to say, this has to be implemented and administered very strictly without jurisdiction constraints. Perhaps a National Highway Patrol is the need of the hour. In this area, I would recommend the study of the Malaysian model of the Highway Code and it's adaption to our country".

Thanks & regards

Dated 17th September, 2014

I had written to you with a couple of suggestions on 14/09/2014, and I write again to bring to your attention another aspect that plagues our traffic systems and renders it quite dangerous. I hope you will consider bringing in suitable changes to address the following:

Unlike in most of the developed world, driving in India is viewed as a purely technical exercise, of getting from point A to point B without causing a collision. The License testing system that is in place also emphasizes this, and no credence or focus is laid on courtesy and discipline. India is known to have the “most civilized people with the least civil drivers”, and this has got to change.

• Never giving way to traffic on the right at an intersection,
• Ignoring traffic lights in the absence of a constable or during off peak hours,
• Not giving pedestrians the right-of-way even when they are using the Zebra Crossings,
• Not giving Emergency Vehicles the right-of-way,
• Overtaking from the left,
• Honking needlessly and aggressively,
• Driving on the wrong half of the road to beat a minor jam (and causing a major one),
• Blocking intersections when stuck in a jam or in slow moving traffic,
• Parking in a callous manner like hogging 2 parking slots or parking such as to inconvenience other road users,
• Arguing loudly and crudely or getting physically violent when involved in an accident,
• Ignoring lane discipline and
• The tendency to run away after witnessing or causing an accident, especially after causing someone to be injured,

Are all unacceptable in modern civilized societies, and India must aim to become the benchmark in courteous and civil driving.

I request you to consider the introduction of a set of rules that impose a very high expectation from a road user which are tested by the RTO’s during License issue / renewal, and ruthlessly failing anyone who does not observe these courtesy rules. Perhaps we need a booklet that lists all the expectations from a driver, 

• Including what he is expected to do when he is involved in or witnesses an accident, 
• Who gets the primacy of road use, 
• Incident scenarios with expected behavior mentioned thereof, 
• Honking on the road unless it is a dire emergency, should be eliminated totally, and 
• Every road user made to think about; and make all allowances for other users needs to be encouraged.

I do hope you will see value in this suggestion, as it will surely result in minimizing urban traffic accidents and fatalities thereof, and make driving on our roads a less dangerous and stressful exercise. I would like to mention here that changing driving behavior is a generational change, and if we bring in the rules now, we may see genuine change in 10-15 years. Let us waste no more time.

Thanks & regards,

Hemanth Sharma

www.sharmahemanth.blogspot.in

Rape the girl and hang her by the neck?

In the background of the news of several rapes taking place in Uttar Pradesh, recently, a lady friend of mine shared a picture on Whatsapp, which showed that crimes like rape are handled with alarming deftness and shocking brutality is some Middle Eastern countries, where a rape accused is variously beheaded, stoned to death, shot by firing squad or finished off using other such methods, within a time-frame varying from a day to a week. My friend was asking the question that every woman is asking today – what needs to be done in India to ensure that women feel safe in this country? Why not take a leaf out of these Middle Eastern examples was something that was begging to be asked too.

Considering the fact that current DNA Mapping methods impose a typical two-week window before they can be used as evidence, the summary executions apparently practiced by our Middle Eastern friends will thus be based only on circumstantial evidence, something I believe that the Indian legal system would normally not permit. Further, I'm also not sure if the research on that Whatsapp picture was really credible, and even if it is credible, should we as one of the finest model democracies; make the mistake of benchmarking ourselves against medieval autocracies like the countries mentioned?

However, I do agree that the situation in India is alarming, with a daily update on news of rapes, rape & stripping and parading the victims, rape & acid attack to deface the victims and the most gruesome of all, rape & hanging in public of the victims. Watching the news has become simply depressing. What kind of male psyche is it that not only sexually violates random women and young girls, but also makes them want to mutilate and kill their victims? The killings are not even hidden or masked in any manner, but are instead, displayed in full public glare like as though they were trophies on a hunter’s wall? That is a level of mental illness and depravity that I have never seen before.

It is quite sad to say that one gets an impression that some of these rapists have no doubt, been emboldened by the unknowing support some politicians seem to be giving them, by questioning the victims’ antecedents, dressing and intent (what was she doing walking on the street at 8pm?). Now that the perpetrators know that retribution is weak, and that a whole gaggle of paternalistic politicians would be happy to wink at their crimes with a 'boys will be boys' homily. The politics of Uttar Pradesh and Bihar should not define our approach to this problem, and India needs a very harsh and fresh look at the Law that should aim to prevent such crimes by changing the mindset of the male population. Of course, in this context, genuine social change will take generations to come about, hence the only viable near-term alternative is to instill fear. We have to make this crime inconceivable to each and every male. Period.

Name-Shame-Defang. There is little doubt that we need to speed up the legal process by quick and conclusive investigation using scientifically proven methods. The Perpetrators have to be named and tried in public, while the victims must be kept totally anonymous and under protection of the state. The current practice of calling the victims to the witness stand, where then an attempt is made to tear her credibility to shreds and also call to question her personal life must be done away with. Rape investigation that is proven by scientific methods should require no cross examination by a sleazy lawer, and any woman, regardless of the fact that she may even be a prostitute, possesses an inalienable right to safety and security and not be raped! Social ostracization of the perpetrator needs to be ensured, not of the victim.

Finally, as the act of rape is considered as measure of one’s manhood in some society’s in India, all such men must be made to understand that it is just not acceptable behavior, and if they do indulge in such a criminal act, the State, in addition to the normal imprisonment and fines, will ensure that they can never do it again, with the introduction of new punishments like medical castration for proven rapists. Deterrent harsh punishment - Democratic process. That is the key. Especially, if the so-called masculinity of the rapist, something greatly treasured and protected in feudal India, is taken away from him and he is neutered and shamed in front of his society, I dare say that younger wannabe rapists wouldn't ever dare try it.

The Death Penalty, of course has already been provided by the new law for rape-murder cases (post the Delhi gang rape & murder case), but it should not apply to the ‘rarest of rare’ cases, but should be applied to each and every case of rape-murder. The choice of punishment and sentencing should not be left to the social construct of a Judge, but predetermined by law. Case proved? – Apply this punishment:

• Molestation or Eve Teasing if proven in a first offense – Imprisonment for the maximum term and maximum fine. Repeat offenders will need to be prosecuted for rape, or the next more serious offense.
• When rape is proven in a first offense – Castration, Life imprisonment and maximum fine. Repeat offenders will need to be prosecuted for rape-murder, or the next more serious offense.
• When rape-murder is proven, on the very first offense – Castration, and Death Penalty. We need to ensure that there is no chance of Repeat offenders.

A new department tasked with the Protection of Women’s Rights and Safety similar to the National Human Rights Commission, with suo-moto powers to initiate investigation and manage the prosecution needs to be set up and they need to automatically take up the investigation and prosecution of all women's protection cases. The investigation needs to be predetermined in terms of the steps to be followed and the precautions to be exercised, so that the evidence can be collected flawlessly and scientifically. The local police will then not be able to demonstrate incompetence (willfully or otherwise) or gloss over the case and protect the perpetrators. I would love to see Ms. Kiran Bedi head such a department.

Here are some of the distressing stories that made the news recently (story courtesy NDTV):

The tiny village of Karta in Badaun, Uttar Pradesh, woke up on Wednesday morning to the chilling sight of two teen girls hanging from a tree in an orchard. The girls, cousins aged 14 and 15, had gone missing from home the night before.

http://www.ndtv.com/article/india/two-teen-sisters-allegedly-gang-raped-hanged-from-tree-in-up-532605

The horrific crimes against women just refuse to cease. On Tuesday, a tribal woman was allegedly gang-raped by 10 men, including her husband, in Madhya Pradesh's Bhilai Borkhedi village. She was also allegedly made to drink urine and paraded semi-naked in the village.

http://www.ndtv.com/article/india/woman-allegedly-gang-raped-by-10-men-including-husband-made-to-drink-urine-541646

32-Year-Old Woman Allegedly Gang-Raped in Badaun

http://www.ndtv.com/article/india/32-year-old-woman-allegedly-gang-raped-in-badaun-541726

And so on the story goes. Even as I write this, there is another story about a women raped and hung in Uttar Pradesh. Do we have the will and weapons to end it?

The Agent Orange of Indian politics – Narendra Modi

The Election Map 2014.

Photo courtesy NDTV.

One has to only see the Map of the Elections 2014, to understand what a 'Saffron Wash' looks like! I have never imagined that a vast and complex country like India would suddenly all fall in line and vote for the future, placing their collective faith in one man, and one party - the Bharatiya Janata Party (BJP), but that is how it turned out to be, on that historic day, 16th May 2014.

Caste and Community Politics

For too many years, parties like the Congress, Janata Dal [Secular] (JDS), Janata Dal [United] (JDU), Samajwadi Party (SP), Bahujan Samaj Party (BSP), Rashtriya Janata Dal (RJD) and many others have been fighting their elections by appealing to voters along Caste, Community and Religious lines and tasting electoral success due to the polarization of the voter base. The first to perhaps use this as a tactic was the Congress where they used the Minority card with spectacular success, and perhaps this emboldened all the other parties to practice the politics of divide and rule, due to which large sections of the populations were kept in status-quo on development parameters so that they are encouraged to vote along caste or communal lines, i.e. primarily be 'predictable' to the Party's Election Managers. 

One believes that this approach has retained the minorities and the backwards firmly in the underdeveloped sections of our society, as their education, financial self-reliance and intellectual independence or individualist thinking were inconvenient to such political parties. It is also a personal impression that one carries, that political parties who practiced divisive politics did so only for the sole aim of capturing power, and once they were in Government, tended to just work for personal benefit and collect funds for future elections. Any genuine development that happened was in spite of the political leadership and not because of them. (Perhaps an extreme view, maybe even too cynical a stand, but one is entitled to ones opinion in a democratic polity, however cynical or dismissive it may be, as one is disappointed at the development rate of the country since independence).

We can play this game too!

The BJP, when it was formed, apparently wanted to fight elections on the laudable plank of Gandhian Economic and Nationalist principles, as they perhaps saw the rot that Indian politics had seeped into in the late ‘70’s. Thus, what was a ‘Back-to-the-Basics’ political approach in 1984 seemed to give them very poor dividend with just two seats in the Parliament, and they perhaps strategized that they could play the game too, but by reaching out to the ignored majority, as all the other parties of the day, spoke exclusively for the minorities, who were kept largely illiterate and willing to be motivated to vote en mass along religious lines as advised by the Political leadership or the Religious leadership that the politicians harvested. 

Thus, it looks like the BJP was perhaps forced to play the same game and represent the voice of the majority. On account of this strategy, the benign and affable persona that both Advani and Vajpayee embodied was studiously replaced by strident Hindu Nationalism or Hindutva, and again, by dividing the population up, they tasted fleeting electoral success. Unfortunately for them, the entire political class could now boldly wear their minority / caste appeasement politics on their sleeves as a prize with which to stop the BJP, and thus was born the 'Secular Card' in Indian politics. In actual fact, it was the Communal and Casteist Card, but as the parties practicing it could use it to beat down the majority population and seen to be speaking for the minority or oppressed voices, it achieved a smokescreen of acceptability. 

Due to the coming together of the so-called ‘Secular Forces’ to vote out the 13-day NDA 1 Government in 1996, the 13-month NDA 2 Government in 1999, and finally replace a full-term NDA 3 Government in 2005, the BJP was perhaps forced to become more stridently ‘majoritarian’ in their politics and speak for their own Vote Bank, as that was after all, the card game that all the big boys were playing. Unfortunately, it was a slippery slope, and despite providing perhaps the best six years of governance India had seen post independence, they lost power, and India was forced to endure the most corrupt and retrograde government for 10 years, virtually pushing us back into the dark ages. (Please read my other post on this subject, at: http://sharmahemanth.blogspot.com/2013/06/the-story-of-indias-politics-policy-and.html). 

Economic model of the Left Leaning

It may be prudent here to mention that the polarization was not just on account of politics and Vote Banking, but the same was seen in the economic policies of the various governments too. I may disagree very strongly with the economic policies of Nehru and the socialist slant that I believe kept India under developed and impoverished for many years, but I genuinely admire the man, as I think he did what he did, because he honestly and sincerely believed that it was good for the nation. Unfortunately, his daughter, Indira Gandhi chose to wear Nehruvian Socialism on her lapel like a badge, and brought upon this country the most impractical and undemocratic economic policies that kept the nation desperately poor until the Balance of Payments crisis in the 1990’s which forced World Bank mandated economic reforms. It seems like she did so, not because she honestly thought it was beneficial to the nation, but because, by using it, she could foist upon us a Begging Bowl Style Welfare State, where every largess is given by the hand of the Government, and the act of giving of these scraps would keep her party in power forever. Thus, in every election, she was able to flog the ‘Roti-Kapada-Makaan’ slogan, and never had to invent another memorable slogan while she led the Congress. 

Unfortunately, the only bunch of truly honest politicians (political honesty of course, not personal - as I have no knowledge of the same), the Left Parties, perhaps feeling that Indira Gandhi’s economic policies resonated with their own world view, chose to support her, and they ended up even developing close political ties as well, landing plum posts in academia, and our history books and all school textbooks were authored by left-leaning academics perpetuating a uni-polar world view. Thus, when the NDA 2 and 3 Governments sought to redefine some of India’s most ridiculous economic policies, like the rationale of a Public Sector Industry, the rest of the political spectrum stood shoulder to shoulder, shrilly denouncing their reform measures as Anti-People. This begs the question, "One wonders what was really Anti-People, the Income Tax act of the 1970’s which imposed an atrocious tax rate of 97.75%, or the NDA’s decision to have a Disinvestment Ministry"?

Agenda Changers

Thus, observing India and its politicians from independence to the 1990’s, one is left with the impression that all the political parties tried hard to locate and create a series of buttons on the people of India, that they could press when they needed and control the actions of the compartments of caste, religion and community that they had devolved the population into. This was a nice and cozy arrangement that was protected by a conspiracy of silence so that power could be won; corruption indulged in, crony capitalism practiced and generally to perpetuate the practice, that we jokingly back in school, called “Downliftment of the Uptrodden”! A pun on the Congress mantra of Upliftment of the Downtrodden. Making everyone equally poor and keeping them that way was the order of the day.

A few enlightened political practitioners, perhaps the most patriotic folk from a much sullied clan, began to see through this Divide and Rule policy that was keeping India in the dark ages, and began several movements to challenge the established order. Perhaps the most articulate and visionary person of those that wished to break the nexus is Dr. Jayaprakash Narayan, who founded the Loksatta Party, to fight elections on the basis of an Anti-Corruption plank and genuine Local Development issues. Dr. JP, who is a gentle and somewhat self effacing intellectual has unfortunately not been able to inspire a mass movement, but remains the darling of a small group of patriotic Indians. 

The national stage for a shrill and noisy Anti-Corruption plank was however taken over first by India Against Corruption (IAC), and later by the Aam Aadmi Party (AAP). While one is not very clear about their views on the issues of polarization and communalization of politics, they effectively showcased the 'Good Governance', 'Probity in Public Life' and 'Corruption-Free Politics' approaches, that seemed to deeply resonate with the mood of the people. 

I believe that even as recently as the 2013 Delhi Assembly elections, the BJP fought their campaign on traditional hindutva policies, and were perhaps shocked to see AAP picking up the second largest block of seats and preventing them from forming the Government. I wonder if this single experience was a turning point in the life of the BJP? Did it make them sit up and think? Did it perhaps give them the courage to jettison the shallow hindutva agenda, and perhaps focus on 'Good Governance', 'Overall Development for All', 'Economic Advancement' and the other enlightened policies that it now espouses? If yes, then the AAP has perhaps willingly or unwittingly bestowed upon India the best gift in politics.

Politics in a New India

After the BJP has recorded such a historic win, in which one believes would not have been possible if millions of its traditional non-followers have not positively contributed, giving them a chance to form a stable BJP Majority Government or an NDA Tsunami Government of 336 seats in Parliament (the Election Commission is yet to officially declare the results while this is being written), I believe it will be very difficult (if not virtually impossible) for any party to unseat them using a communal or divisive agenda. To get them voted out, NDA would have to perform miserably poorly on their poll promises, be more corrupt than the UPA, or the incumbent will have to promise and deliver even greater development and social advancement assurance. 

One finds it difficult to envisage a stage in future when a Deve Gowda or an I.K. Gujral can form a Government simply because they wanted to “keep communal forces at bay”! I genuinely hope that the influence wielded by Mulayam Singh Yadav, Mayawati, Lalu Prasad Yadav and other caste or communal satraps will fade away and all the people of India join together in future in demanding the highest economic and social development indices from their Government, for all of India, and stop clamoring to be declared ‘backward’ so that they can pick up the few scraps thrown into their enclosure by a welfare state.

Sadly, even as I write this, I hear on the news that there is talk among the decimated parties like the Congress, the JD(U), the RJD and others who are speaking about all 'Secular Forces' uniting to counter the 'Communal BJP'. It looks like some people will never learn, as they are Pathetic, Myopic, Political Pygmies and their small minds can think of no other counter to the development agenda that India has mandated. Please grow up! India does not care. The Youth of India does not care. The vast thinking minority population does not care. Even your own electorate will probably not care if you intend to keep them starving while the rest of the nation looks forward to the fruits of development. 

Unfortunate collateral damage of Agent Orange

While one is glad that India has spoken and spoken very clearly in favor of the Parivartan & Vikas i.e. Change & Development Agenda of Modi and rejected the divisive politics of the UPA, one has to take stock of the collateral damage too. Just like Agent Orange, the blind and ruthless instrument of the Vietnam War that destroyed all types of green cover, regardless of whether they were useful, inconsequential, or environmentally threatened, or whatever, similarly, several excellent politicians have been swept aside by the Modi Tusnami, and India and the Parliament will be poorer in their absence. Some of the people that India will no doubt miss in the Lok Sabha for their suave and articulate presence are Dr. Jayaprakash Narayan, Arun Jaitley, Jaswant Singh, Sachin Pilot, Milind Deora and Yogendra Yadav. Gentlemen, all.

Personally speaking, I will not miss the presence of Mani Shankar Aiyar, Sushil Kumar Shinde, Salman Khurshid, Kapil Sibal, Manish Tewari and Chidambaram. I believe these people were the button pushers perpetuating the old order under the dispensation of the Congress First Family. I hope they will see the folly of their ways, reform themselves and aim to serve the nation instead of a family. Each of them being brilliant in their own right, could put their vast intellect to better use.

The Election results 2014

Photo courtesy NDTV.

The painful creation of the State of Telengana

Those of us who have been following the Telengana story for the past few years will have mixed feelings about the creation of the state, particularly about the methods adopted by the ruling dispensation to do so. Sometimes, I wonder if India is really a democracy or not.

There are several pockets in India where the residents feel that their culture, language or way of life is being ridden roughshod over by the majority population. In some cases, it is also a situation of the area being neglected in terms of development or distribution of revenue, despite that area being a positive contributor. I personally feel that anyone who is feeling oppressed enough to seek a separate state should be given an opportunity to state their case, and if practical they must not be denied the right, especially in face of objections by the majority group or oppressors.

This is the analogy that makes sense. I see this as a case of one of the children in a family complaining that he is feeling claustrophobic while sharing a room with a domineering older / bigger / meddling brother and needs a space to call his own. Any parent that would like to see all their kids get the best opportunities to grow and blossom should have no objection to such a request. Why should the people of Seemandhra have any say in this matter? The resolution in the state assembly rejecting the motion of a separate state, is akin to the domineering older brother having a right to veto the separate room request of the oppressed younger brother, is it not?

Ideally, the best solution is a Referendum carried out only in the area that is seeking a separate state, and open only to the residents living there. Unfortunately, India is a poor Democracy and does not have any legal provision for the same, nor does it have a clean record on this issue. To understand the views of a few more people, I recently posted the following Status Update on my Facebook Wall and requested my friends to respond. This turned out to be a very interesting discussion, and I thank my friends for their active contributions. Please see an extract of the same below:

Hemanth Sharma

February 10 near Malleswaram

I'm really perplexed with all this brow beating and dramatics on the Telengana issue. Why should some folks have an objection if some other folks want a separate state? It is after all, going to remain within the Indian Union and unquestioningly bow before the Indian Constitution, right? 

An apt analogy is a parent getting a request from one of their two kids that he wants to have a separate room, because he wants to put up posters of his favorite bands, paint the walls in his happy colors and listen to his kind of music, without having to constantly live according to the dictates of his bossy older brother, with whom he has uncomfortably shared a room for 60 years!

Which parent will object to such a request? Also, why will the 'bossy older brother' in this case, even have a say in this matter? It really beats me!! Anyone sees this the way I do? Please write in!!

Sharath C. Srinivas From what little I have heard from my Telugu friends - it apparently is all about Hyderabad, the crown jewel, as that is where a lot of the wealth and power is. It is like one brother wanting to keep the big screen TV in his room.

Ramnath Venkateshwaran It's more complex all of big brothers friends use and claim the room and younger brother is made to sit outside like ..aatak untu lekhak..illa.. (a Kannada saying that means you can play with us if you want, but your score will not count).

Ramya Ramnath The brother should also learn to share the room if needed. In this case, Telengana wants all the Andhra people to leave that’s not fair!!

Hemanth Sharma Thanks, Ramnath, Ramya & Sharath for continuing to use the ‘separate room’ analogy. If it is about Hyderabad, so what if it is in another State? Seemandhra investors in Hyderabad will continue to own what they already do, and are legally free to invest more in Telengana. So what’s the risk? There’s more to it than meets the eye!

Praveen Paul So let Hyderabad remain a "twin state capital". Chandigarh has benefited so profitably from such bigamy....:0

Sharath C. Srinivas The risk is about losing the clout and the influence, as non Telangana politicians will be outsiders and won't get a piece of the pie. A major portion of the corporate gain in Hyderabad gets shared with those in influential positions, and outsiders won't be welcome to the grand party next (bedroom) door.

Hemanth Sharma Sharath, this is what one hears, but it doesn't make sense. Most of the investors in Bangalore are not Bangalorians and they face no issues in enjoying their properties. Why should an Andhra investor be worried about his investment in Hyderabad? His rights are protected by the rule of law, is it not?

Hemanth Sharma Praveen, actually, the situation is ideal for the development of a new, modern and high tech capital city for Andhra. They should take the opportunity to create more gold plated real estate, more industries and businesses.

Sharath C. Srinivas Rule of law? , and it will take a few generations to create another city equivalent to Hyderabad. The same issue exists all over, even here in the state of New York, the vast majority of the tax revenue comes from NYC, and the rest of the state is actually poor, even by US standards. 75% of the state of Georgia's tax revenue comes from Metro Atlanta, and the rest of the state is very poor, by global standards.

Anand Srinivasan Agree with you. Looks like both sides want Hyderabad as part of their state, as it is the largest cash cow.

Hemanth Sharma Anand and Sharath, The protests are apparently not anything about the revenue that Hyderabad that generates for the state, as the Central Government will handhold the new state for 10 years. It actually seems like a more self-centered objection as considerable personal wealth seems to be at stake. Where is the national interest in that?

Praveen Paul Show me the money...Or as they say in Tamil...kai le kasai...wai le dosai.. (one eats well if one has soiled ones’ hands by working hard).

Hemanth Sharma Thanks, Praveen. If all the Seemandhra protesters stop trying to be holier than thou (“we want our homeland to be united” farce) and admit that they are actually protecting their own personal wealth, they would be so much more believable.

Raghuveer Rao Let the people decide ...have a referendum.

Hemanth Sharma Raghuveer, there's a catch to this, unfortunately. India being a Representative Democracy, the people are expected to leave all the decision making to their elected leaders, and there is no genuine precedent for a referendum. However, in this case, I agree that it may be the best tool to gauge public sentiment and must be tried.

Of course, a referendum must be carried out only in the districts that make up Telengana and not across the state. To return to my original analogy, it will not be fair if the bossy older sibling is given a right to veto the request of the younger for a separate room!

Hemanth Sharma Praveen, Sharath, Anand and Raghuveer I shortly would be writing a blog article using this discussion. Thanks for your views.

Chris Anand We have enough division in the name of diversity. This stereotyping is handed down through generations and I can tell u that some have been passed down from my late grandparents to me as well. Hopefully education and a world view will break that chain and we can expect a more unified India one or two generations from now.

Hemanth Sharma Chris, going back to my original analogy, how do you address the claustrophobia that the younger sibling feels? Should a parent not ensure that his personality also gets as much chance to shine as the older sibling?

The central issue here is that one bunch of people feel that their culture and their opportunities are being overshadowed by the dominant bunch. Is a common language a sufficient bond? Apparently, not.

Raghava Gopi Krishna See, it is more a political game to mislead people. People of AP have seen their worst government in last 10 years, and AP which is known as the Food Bowl of India, but during this government, which claims to be farmer friendly, farmers have even declared a ‘crop holiday’, which is unprecedented. Lack of governance takes a big toll on job creation and Hyderabad is suffering.

The only one thing that happened well is the loot, at a never before scale, where an Ex. CM’s son is implicated in scams of 50k Crores. This is a record in itself. Now just as it did in 2009, the ruling party and its cronies are out to fool the People by getting some new flags (political parties) that will eventually merge with some or other party for their personal gain.

Things will change only when people became more rational than emotional, besides creating state will only increase non plan expenditure for both states as it will have 2 Governments and all their usual excesses, which the poor people have to foot.

Raghuveer Rao In 1948, Junagarh joined India based on a plebiscite. So there is precedence.

The problem with representative democracy is that elected representatives from other states, who may or may not have any sense of sentiments on the ground effectively get to decide the fate of the people.

Hemanth Sharma Raghava and Raghuveer, excellent points. However, what I meant was that there is no legislation that mandates referendums and also, India has not covered itself in glory while using this route. 99% of the residents of Nagaland apparently voted for independence, but India overruled them and annexed the state. A referendum carried out in Dadra and Nagar Haveli, which were Portuguese colonies, on the question of whether they want to join India was apparently never even published, and other such inconsistencies.

Please see http://www.tfd.org.tw/iri-asia/cms_file.php?id=75&dl=1

Perhaps a genuine referendum, that is carried out only in Telengana will accurately measure the mood of the people. I’m fully supportive of such a move.

A similar exercise is being carried out for the grant of possible independence to Scotland from the UK. If the referendum is extended to all UK residents instead of just Scotland, I wouldn't be surprised if the independence motion is defeated. Since it would be confined to the people of Scotland alone, I'm expecting a new nation to be born soon.

It would be ideal if we did the same here. But as Raghava says, perhaps we are too corrupt and politically sleazy as a nation to do the right thing. We definitely need to learn a thing or two from our former colonial masters!

Selection Criteria for Retail Properties in India

I recently got an opportunity to consult with a small retail chain, thanks to a consortium I’m a part of and I was asked to write a small piece on the important points to be considered while selecting properties for retail. I promised to revert with “8 to 10 Bullet Points” in a few minutes and ultimately churned out this report that runs into six pages! As it is compressing some 22 years of experience gained by leasing and or project managing close to a million square feet of space, I thought it would be a good idea to share it with others who may find the information useful, or for students of retail who could understand the dynamic of site selection based totally on personal experience.

Opening Remarks

Please note that these points are generic points and hence are not placed according to any priority, but sometimes, depending on the Format, Size, and Target Audience, some of these points may attain a higher level of importance or even a criticality, which needs to be established subsequent to a detailed study.

Further, the criticality of Property selection is heightened when one is choosing a High-street location, as the costs are generally high and the foot traffic is not always assured. Thus, the following considerations would be most relevant for the selection of High-street locations.

Mall location considerations are entirely different and will depend on the success of the mall to attract the appropriate footfall in sufficient numbers, together with the design of the mall, the traffic flow and store design. Thus, mall locations will require a detailed and separate study.

Considerations

Property Identification can be clubbed into four main considerations:

A.      Format / Business Considerations

B.      Commercial Considerations

C.      Technical Considerations

D.     Hygiene Considerations

A.     FORMAT / BUSINESS CONSIDERATIONS

Depending on the merchandise being sold, location would be ideally located in certain markets in the city where similar merchandise is sold or is famous for. Thus, taking on the traditional or established players in the city and offering a differentiated experience or merchandise to be considered.

Audience Classification

•          Luxury
•          Premium
•          Budget

The network plan will need to be defined. Under each of the above classifications, one needs to clearly define whether one is targeting the following groups:

•          Impulse /
•          Daily Needs

Thus, an Impulse Luxury item will need to be located in the middle of a high income shopping district that hosts sufficient footfall of the audience who can afford the merchandise, on the other hand, Luxury Daily Needs products can be a little less exacting in choice of location as one hopes to promote premium and budget customers to try the merchandise. Similarly, Premium Impulse merchandise needs to be very aptly located on High Street / Malls / Luxury Destinations.

Work Place / Residence Locations of Audience

Studies have shown that a large percentage of customers prefer to stop by and shop for their requirements while driving on the way home from work. Thus, being located on a street that connects a popular work district to a high end residential district is always a good idea. However, it is critical to be located on the left side of the road (Indian driving characteristics).

High Street Considerations

When a High Street Location is being considered, one has to primarily determine whether the street is a One Way or not. If it is a one-way and does not funnel people from a work district to a residential district, it will not be an ideal choice.

Distance of Storefront from the Street

Most retail formats require vast amounts of visibility into the store to encourage passersby to promote themselves to visitors after being enticed by the displays in the store. Thus, if the storefront is too far setback from the pavement, the impact of the display is minimized.

Availability of Storefront Parking

Most formats that have some parking facilities in front, are seen to perform better than those on high-streets that do not have parking. Thus, properties that have some parking in front of the store, subject to the point about the distance of storefront from the street, will be desirable.

Store size

The size of the store shall be as per the requirements of the business, and shall be able to carry the entire assortment of merchandise correctly and efficiently. The added requirements of the space for the Stock Cycle and the Staff Cycle need to be provisioned for. If the space is too less, this will result in the assortment getting pruned, and if the space is too large, it will be inefficient and result in higher costs.

Width of Frontage

Based on the format under consideration, the site being selected shall offer a minimum credible width to achieve a defined Entrance, offer Good Visibility and ensure an Attractive display.

Site Aspect Ratio

This is the ratio of width to the depth of the site. Depending on the format, rectilinear spaces would be ideal, where the width is not too large and the depth consequently too shallow. On the other hand a narrow frontage with a very long throw for the depth is not desirable.

Signage Space

One of the most important aspects that need to be considered. Buildings that are intelligently built will have made specific and sufficient planned spaces provided for signage. The store will require adequate signage length to make a good impact and further, the width of the signage shall have a minimum such that a standard width of material can be used for the signage without wastage.

Visual Clutter

Storefronts that have clean signage and ensuring that the width and specification adopted by all the tenants of a building follow the same guidelines, the visual presentation will be orderly and impactful. If everyone follows their own standards, this will result in visual clutter and nobody’s signage will be effective. Thus, poorly designed buildings that have not specifically planned for sufficient signage needs to be avoided.

B.      COMMERCIAL CONSIDERATIONS

Cost of Rent

The monthly cost of rent outflow shall be based on the profitability analysis for that neighborhood. The potential of the location to support its rental shall ideally be judged on the basis of the expected turnover at that location. Based on analysis, rent outflow shall be pegged at an Allowable Percentage of the Expected Turnover, say 10%. Thus, if the required turnover level cannot be achieved within the time frame agreed, the site would be under severe strain.

Rent Escalation

All landlords will expect the rent to escalate at a particular rate each year, and would typically expect an escalation rate that covers for inflation. This can be bunched together and charged once in 3 years to ensure that the store gets a chance to stabilize before suffering a higher rental.

Cost of CAM (Common Area Maintenance) or Utilities

In some cities, Commercial properties are required to pay higher costs towards Water and Power Utilities. Thus it is important to understand the cost of utilities fully before committing to a property. In managed properties like malls, this is a shared expense and depending on the professionalism and efficiency of the mall, the costs can vary between 20% to 50% of rent outflow. Thus, it is as important as the rent, and similar to rent suffers from some escalation too.

Cost of Signage

Municipalities of several cities charge a license fee for the signage f a store, beyond a particular size or area. This could be of sizable value and hence it is important to peg the cost of this license as part of the input Operating Costs.

C.      TECHNICAL CONSIDERATIONS

Availability of Power

It is important to correctly determine and establish the amount of Connected Load that one will require. Typically, all buildings would have been designed on some assumptions and the power connection available would be a finite defined limit. If the formats requirements exceed the permitted load / available connection, the enhancement costs are quite prohibitive and due to the shortage of power in most Indian states, quite long in lead time.

Use of Generator

Generators are used when the connection is of lower capacity or is not available to the store at the time of launch. However, captive power generated using fossil fuels typically costs about 2.5 times public utility power, and hence quite unaffordable in most instances. Even when the connected load of sufficient capacity is available, generators are used when there are power failures and due to the cost consideration mentioned before, the absence of mains power for extended periods of time could have serious financial impact on the store. It will not be out of place to mention here that power generated by use of fossil fuels is highly polluting in nature and it will be necessary to minimize the use of such devices.

Space for Air Conditioners – ODU’s

The building shall have sufficient setbacks and locations that can take the mounting of the required number of air conditioning units. As these generate considerable heat and also a fair amount of noise, they may be objected to by neighbors; hence it is critical to locate them appropriately. Conversely the length of the piping permitted between the ODU and the IDU is finite and has to be taken into consideration while deciding if it is feasible to have cost-effective air conditioning in the site.

Ceiling Height

Most retail formats have some standard fixtures that they need to display and stock their merchandise, and hence the services need to be placed above that height. Thus the ceiling height or more accurately, the clear height below the lowest beam of the site shall be sufficient to house the fixtures and also have remaining height in which false ceilings, lighting, ducting and other services can be comfortably run and efficiently maintained.

Columns

While columns are an integral part of any building, it must be noted that modern and well designed buildings have a minimal number of columns, ensuring that the space utilization is of a higher efficiency. Multiple and closely spaced columns result in the racking not being laid out in the most useful manner resulting in low efficiency.

D.     HYGIENE CONSIDERATIONS

Handicapped / Wheelchair Access

Some municipalities insist that certain types of public buildings provide for free and unrestricted handicapped access. This needs to be evaluated, and checked if the building under consideration requires the same, and whether it meets the criteria.

Toilets

Availability of clean and safe toilets for staff and customers.

Safety and Security

The site that typically has staff working till late hours, stores high value merchandise or stores cash collections overnight shall have sufficient evaluation of the safety and security aspect for all the three store cycles, i.e. The Stock, Staff and Customer Cycles.

Presence of Pavement, absence of Electrical Infrastructure

Other aspects that need to be looked into are whether the pavement / footpath in front of the store is sufficiently wide and safe for customers to use, and whether there are any obstructions from Transformers, Telephone Junction Boxes, etc that can adversely affect the visibility of the store and also render the pavement unsafe for pedestrians. Particularly, the presence of un-cleared garbage and badly broken down pavements and roads in front of the stores needs to be avoided.

Traffic Conditions

To permit customers to cross the road with ease and safety, the traffic shall be sufficiently light and well regulated, or if the traffic is very dense, safe Zebra Crossings and or Subways / Skywalks shall be available at a reasonable distance.

Legal Documentation and Ownership

Properties need to be leased from people who are the rightful owners and sufficiently rigorous due diligence needs to be carried out by an expert law firm to establish the same. The Lease Document shall be drafted in a scientific and totally legal manner that can stand to scrutiny by any public office. Finally, properties that are taken on lease for commercial activities shall be declared Commercial and documented as such. Residential premises shall not be leased for commercial activities as this is a contravention of the law.

Concluding Remarks

While the above list is a comprehensive list of Look-Out-For items for a person entrusted with property search, each format will have its own specific and specialized requirements that need to be studied in detail and locations appropriate for the business identified. In the event that a more specific study is required to define the requirements of a specific store format, the same can be provided subsequent to a detailed study of the format, the assortment, the profitability and the catchment analysis.

Ideally, for a chain store a detailed Net Work Plan shall be drawn up in consultation with Operations and Marketing, reflecting the market potential of the city and the desirable locations that one would like to be present in, and based on the same the site search should be initiated. Please do contact the undersigned for more detailed support.

Thank you.