Innholdsfortegnelse for January 17, 2016 i Business Today

The issue you are reading now is special in more ways than one for us. We have just completed our 24th year of publishing the magazine and are entering our 25th year in 2016. In January 1992, we published the first issue of Business Today magazine. It was perhaps the perfect time to start a magazine focused on Indian economy and business. The previous year, India had come close to defaulting on its external payments and had to seek a bailout from the International Monetary Fund (IMF). The pound of flesh that the IMF demanded was economic and market reforms. Till then, the Indian economy was largely closed, and worse, was characterised by the Licence Raj, with the government having a major say in every aspect of business. When the…

ABOUT: Services now account for over half of our GDP, but manufacturing is about 17 per cent. If India has to cater to the growing needs of its 1.3 billion people, it needs to find an alternative to forex-guzzling import of products ranging from mobile phones and cars to consumer goods and shoes. India needs to design and manufacture its own products. Hero MotoCorp Chairman, Managing Director & CEO, Pawan Munjal, explains how India can become a globally competitive manufacturing nation capable of designing and developing products that are acknowledged as the best in the world. I find writing this article quite timely. I recently visited the Silicon Valley in the US, where I met some of the brightest minds engaged in path-breaking design and innovation. I have been a…

ABOUT: Developing countries neither have the resources nor the inclination to provide security of health, education and minimum living expenses to each citizen. Hence, search for wellbeing has been one of the biggest reasons for migration from least developed countries to developed countries. But with India gaining strength, both economically and geo-politically, perhaps it’s time to give every Indian a social security net. Reetika Khera, Associate Professor, Humanities and Social Sciences Department, IIT-Delhi, outlines how we can achieve the goal of 100 per cent social security. In November 2004, when the National Rural Employment Guarantee Act (NREGA) was being debated, one commentator remarked that the draft had “entered national policy debates like a wet dog at a glamorous party.” As I sat down to write for Business Today’s glamorous end-of-the-year…

ABOUT: Banking is changing like never before, and largely because of the rapid advancement of technology. Automated teller machines, internet banking and other advances have already made dramatic differences to consumer experience. Now, payment wallets, mobile banking and other advancements are going to revolutionise it further. Vijay Shekhar Sharma, founder of One97 and Paytm, is a digital entrepreneur working in the areas of fintech and retail. He is also one of the recent recipients of the payment bank licence. Here he talks about how technology could solve financial inclusion issues. Financial inclusion is not just about having a bank account for everyone in the society. It is about creating an ecosystem that enables and encourages people to use financial instruments in their everyday life. There are four key instruments of…

ABOUT: Despite India’s honourable commitments to emission control under the COP21 talks at Paris, coal will continue to remain India’s largest source of energy to power its economic growth over the next 25 years, with a little help from hydro, solar, wind and nuclear energy. But how could these two contradictory goals be achieved? The answer, says Rajiv Kumar, Senior Fellow, Centre for Policy Research, lies in ‘Clean Coal’. Or, as environment-friendly as it gets. But use it — we must — before it becomes useless. A desynthesis of the commitments at the 21st annual conference of parties (or COP) in Paris makes it evident that India will continue to rely on coal for its energy needs along with the renewed focus on building up capacities for renewable energy based…

ABOUT: Despite growth in public and private hospitals, and primary care centres, and increased sophistication in medical insurance products, the poor in India still have very little access to proper medical care as compared to those in developed countries. What is the solution? K. Srinath Reddy, President, Public Health Foundation of India, looks at the way ahead for universal health insurance in India. Globally, over 100 million people are pushed below the poverty line every year, while nearly 250 million people incur catastrophic out-of-pocket spending (OOPs) on health care. In India, nearly 50 million people are impoverished and about 150 million incur catastrophic expenditure because of unaffordable health care. The need to provide protection against such financial distress and increase access to affordable health care has led to the rise…

ABOUT: India’s Green Revolution took place in the 1960s. The white revolution or Operation Flood – the exponential increase in dairy production – started in the 1970s, and ended in the 1990s. Since then, there has been only incremental thinking on the agricultural productivity front. And the biggest problem is that the bulk of the Indian farming community has not been able to escape the tyranny of monsoons. If the rains fail, so does our crops. How does one move beyond the over dependence on rains as many other countries have done? Professor M.S. Swaminathan, renowned geneticist and father of the Indian Green Revolution, shares his thoughts. On the occasion of the 50th anniversary of our Republic, the then President K.R. Narayanan had identified two areas as the most significant…

ABOUT: Somewhere along the rapid growth of India’s vast road and railways network, river-based navigation got the short shrift. But with global demand to align economic growth with environmental harmony, water navigation is getting a second look. Pravir Pandey, Member, Finance, Inland Waterways Authority of India, explains why inland waterways-based movement of people and goods, particularly National Waterway- 1 between Allahabad and Haldia on Ganga-Bhagirathi-Hoogly River System, is of truly national significance. “Any river is really the summation of the whole valley. To think of it as nothing but water is to ignore the greater part” – Hal Borland in This Hill, This Valley In ancient times the Ganga and some of its tributaries, especially in the east, were important transportation routes. According to Megasthenes, the Ganga and its main…

ABOUT: A vast majority of our 2.2 million graduates find themselves at sea once they exit their colleges since most of our college education only partially equips them for jobs. This scale of unemployment — and the need to prevent them from straying into antisocial activities — is one of the biggest challenges of our society. How should India go about making its graduates and working population job worthy for the next 25 years? Sanjeev Duggal, CEO & Director, Centum Learning, a skilling company with presence in 21 countries, writes on how to change India’s skills landscape. When she got married, Rajni Bala’s dreams were similar to those of most young women of her background – having a contented married life with a loving husband and children. Reality, however, turned…

ABOUT: The early Indian planners focused on technology and management education to help bright students become great technocrats and managers in a country that was being built ground up. But now, there is an increasing feeling that this overemphasis on professional skills in higher education is resulting in lopsided growth. All developed countries have a healthy liberal education system that throws up rounded leaders. A few years ago, Ashish Dhawan, Co-founder of Chrys Capital, one of India’s biggest private equity funds, Pramath Raj Sinha, Founding Dean of ISB, Vineet Gupta, MD, Jamboree Education, and Sanjeev Bikhchandani, Founder and Vice Chairman of InfoEdge (Naukri.com), joined hands and pulled in many others to conceptualise and build Ashoka University, a private university focused on liberal arts education. They write about the importance of…

ABOUT: India’s babudom is being rated among the worst in Asia. Unless bureaucratic reforms make fundamental and structural changes by holding bureaucrats accountable, India will continue to struggle as political initiatives take painfully long to translate into actions. Vinod Rai, former CAG of India and Visiting Senior Research Fellow at the Institute of South Asian Studies, in the National University of Singapore, explains why revamping Indian bureaucracy is essential to make India future-ready. The Indian bureaucracy is much celebrated and, at the same time, much reviled. It has been called the ‘steel frame’ and is also called ‘babudom’. Its performance draws reactions ranging from total despondency to cautious accolade. However, in the present times, across all sections of society, it has ceased to draw unqualified praise or recognition for its…

ABOUT: The cheerleaders of Indian economy love to say that this century belongs to India. What they mean is that India will move from being an emerging economic superpower to a full fledged economic and diplomatic powerhouse before the end of this century. But to be truly influential at the global level, India needs to relook at its current foreign policy. T.C.A Rangachari, former ambassador to France and Germany, and former director of Academy of International Studies, Jamia Millia Islamia University, writes about what India needs to do about the future in foreign policy. What would India’s global posture and role be as it approaches its centenary in 2047? To answer that question, we need to consider what India and the world might look like then. The shift in the…

Excelling Through Innovation This refers to your special issue on chief executives in India (India’s Best CEOs, January 3, 2016). For me, the CEO means: Chief of a company ensures and makes its Earnings best at Operational levels as long as he is CEO of that company. The CEOs package has analysed well how these men and women have excelled through technological innovations, especially when the economy is crawling. All credit goes to the BT team. Mahesh Kumar, New Delhi Revamping Bankruptcy Law This refers to the interview with T.K.Vishwanathan (New Bankruptcy Law Is Necessary for Reviving Economy, January 3). It was an interesting interaction lucidly unfolding plenty of information and throwing fresh light on the whole gamut of insolvency issues, jurisdictional infirmities, jurisprudential inadequacies, and the urgent need…

ABOUT: India is already the seventh biggest economy in the world today when measured by nominal GDP. It is also the fastest-growing major economy. And it is expected to be the world’s third-biggest economy by 2050, or perhaps even earlier. But just becoming a big economy is no good if you do not know how to balance your budget. In this column, former deputy chairman of the Planning Commission, Montek Singh Ahluwalia, prescribes what the governments of the future should aim for, in terms of deficit, expenditure and raising of resources. Twenty five years is a horizon over which serious structural change is really possible. So here is my wish list for what future Budgets, and Budget processes, should be. Fix the FRBM Act India’s fiscal deficit (Central and state…

ABOUT: Since the economic reforms started in the 1990s, the depth and sophistication of financial products have been improving every year. But much of the focus of these products has been on rich and middle income consumers. It is recognised by everyone that without proper financial products for the have-nots, no real progress on financial inclusion can take place. Chandra Shekhar Ghosh, Founder, MD & CEO, Bandhan Bank, with his deep knowledge of microfinance in India, makes suggestions .... At the outset, let me be candid about one thing — the term ‘financial inclusion’ is being used in India in a very narrow sense. The barometer of financial inclusion here is how many deposit accounts a bank is opening. Though bank deposits are critical, financial inclusion is more than that…

ABOUT: With Delhi’s air pollution reaching alarming proportions and most of the other major metros on the verge of hitting dangerous levels of air pollution, there’s need for drastic action in the interest of public health. Without doubt, if this generation needs to make the world a better place to live for future generations, clean air has to be our biggest priority. Environmentalist and activist Sunita Narain, Director General, Centre for Science and Environment, exhorts, it’s now or never. As I write this, the Supreme Court has passed far-reaching orders to control toxic air pollution in Delhi and its neighbouring areas. The Chief Justice recognised the public health emergency in the city caused by the runaway air pollution and initiated crackdown with a slew of measures – from tax on…

ABOUT: A critical component of the United Nations’ 2030 agenda for Sustainable Development Goals is health for all. However, despite a decade-long work under the National Rural Health Mission, a vast majority of Indians remains out of the heath care-for-all umbrella. The more recent National Urban Health Mission of 2013 and the Rashtriya Swasthya Bima Yojana have only just begun. The WHO representative to India, Dr. Henk Bekedam, suggests ways to marry national and state priorities to bring quality health care to every Indian citizen. In the words of Dr. Margaret Chan, Director General of the World Health Organization, “Universal Health Coverage (UHC) is the single most powerful concept that public health has to offer.” UHC refers to a goal for each nation, whereby all citizens have access to quality…

ABOUT: In many of our urban areas, health-care facilities rank with the best in countries like the US and the UK. But problems start cropping up as you move away from the cities and deeper into rural India. Despite over six decades of effort, the Indian government — and voluntary organisations working in the field — have not been able to reduce the disparity between health-care facilities in big cities and those in remote areas. But now, technological advancements hold out some hope. Robyn Norton, Principal Director, Professor of Global Health and James Martin Professorial Fellow, University of Oxford, and Professor Vivekananda Jha, Executive Director of George Institute of Public Health, India, share their thoughts in this article. Of all of the forms of inequality, injustice in health is the…

ABOUT: Indian policy makers have had mixed feelings about commercial farming by big corporations. On the one hand, the benefits of technology and productivity of commercial farming operations cannot be overlooked. On the other, there is a feeling that unfettered growth of commercial farming can harm and render the millions of small and marginal farmers jobless. As a result, commercial farming operations almost never get government approval in most states. D. Shivakumar, Chairman and CEO of PepsiCo India, writes about how to make commercial farming work in India. The health of Indian agriculture will be a key determinant of a number of things over the next decade. It accounts for 15 per cent of the gross domestic product (GDP), and is growing at 2-4 per cent per annum. This sector…

Solid infrastructure is, of course, a pre-requisite when building smart cities. But application is crucial. There’s no point in installing faucets in every home, if the water is undrinkable ABOUT: India has embarked on an ambitious quest to create 100 Smart Cities. A vast number of existing cities will need to be re-imagined and converted into Smart Cities. The challenges in the process of doing so are unique. Karin Wanngard, Mayor of Stockholm, deliberates on how to transform an old city into a Smart City… the Stockholm way. The capital of Sweden, Stockholm, was founded in the year 1252. Today, my city is at the forefront of the technological revolution. It attracts the leading IT companies as well as skilled professionals from all over the world. Indeed, new and thriving…

ABOUT: NextGen companies as well as managers find the skills of today’s youth hopelessly inadequate to cope with the challenges of the future. As corporate India grapples with the ‘Educated Unemployable’ with a flurry of private skilling campuses, their effort barely amounts to a drop in the ocean. Manish Sabharwal, co-founder and Chairman, Teamlease Services – a temporary workforce and skilling company – and a member of India’s Central Advisory Board of Education explains why skilling needs to be the future of education in India. Currently, India has 20 million young adults pursuing a degree in a physical classroom, five million getting their degrees via distance and online courses, four million pursuing vocational education, while only 400,000 are apprentices. Is this system architected to cater to the one million youth…

ABOUT: Some of India's landmark legislations such as MGNREGA, insurance for all, direct benefit transfer, education for all and health for all, have been instruments of bringing social equilibrium. But with crores of cases pending in Courts across the country, delayed justice continues to deny justice to the common man. How could law become an instrument of social justice? Ranjeev C. Dubey, Managing Partner, N South, Advocates, outlines what must be done to bridge the gap between the rich and the poor over the next 25 years. Here is a core eternal truth: removing the symptoms of an ailment is not the same as curing the ailment. India’s main problem is that in the past two decades, we have acquired a peculiar fascination for symptomatic treatment. When women are raped…

ABOUT: For six decades, India had the desire but never the determination to be self-dependent in defence requirements. Vested interests played their part in keeping India dependent on foreign purchases. But no power in the world can claim military supremacy by buying its way through defence needs. Anil Sardana, CEO & MD, Tata Power (lead contractor for Pinaka Multi Barrel Rocket Launcher and Akash Missile Launchers), and Rahul Chaudhry, CEO of the company’s Strategic Engineering Division, write on why ‘Make in India’ matters for India’s defence preparedness. To be a sovereign state means to be free from the control of any external influence. But to anyone who has read about the challenge India experienced during the Kargil War and Operation Parakram (planned after the Parliament attack), would realise the limited…

ABOUT: Despite the appointment of multiple commissions to reform the governance of police forces across the country, the government has lacked the political willpower to implement their recommendations. Prakash Singh, former DGP of Uttar Pradesh and the Border Security Force, who leads a movement for police reforms and bureaucracy’s accountability, explains how to create a professional, well-trained and equipped, and a motivated police force. It is one of the ironies of modern India. While we are able to send a mission to the moon, while there has been a revolution in information technology, while we have taken a quantum leap in nuclear science, while we have today the fastest growing economy of the world, while we are preparing to run a bullet train, we are still saddled with a colonial…

ABOUT: It would be a travesty if India’s economic growth were to be a prisoner of an antiquated tax regime, multiple and over-lapping tax structures and corrupt compliance officials. Can the economic interests of the Centre, the states and local bodies ever align to agree on a simple, transparent and a just taxation formula? Or, will that remain a Utopian thought? Former Union Finance Minister Yashwant Sinha puts together his thoughts on how India must handle its tax reforms challenge. Man created the State to govern society. The State levied taxes to run the government. Over a period of time, taxation was used to achieve other socio-economic and political objectives. The nature of taxation changed and it became more and more complex. Now we are struggling to make it simpler.…

ABOUT: Despite the best efforts by policy makers and state-owned banks, the last mile problem has been an insurmountable hurdle in the way of financial inclusion for the poor. Many solutions have been tried but most have reported partial success. Bindu Ananth, Chair — IFMR Trust & IFMR Holdings, is possibly the best person to write on this given the number of years she has spent in studying the problems at the ground level and figuring out solutions that work. In this column, she busts some common fallacies about financial inclusion. I write this from the sidelines of my city’s (Chennai’s) worst flooding in 100 years that has rendered lakhs of people homeless and bereft of livelihood. As the daunting task of re-building looms ahead, one key issue, among others,…

ABOUT: If we want to meet the goal of 24x7 electricity to every citizen in the country, while reducing the pollution and smog enveloping our urban areas, the best solution for the medium term seems to be solar energy. But, while enormous progress has been made on that front, more needs to be done to take full advantage of the power of the sun. Chetan Maini, who developed India’s first-ever commercial electric car, the Reva, writes about how to harness the full power of the sun for clean energy. Earlier this year, Prime Minister Narendra Modi set a new target for India’s solar mission – five-fold increase in solar power generation to 100 GW by 2022. This would be equivalent to around 10 per cent of the power mix of…

ABOUT: The highly restrictive Mandi system has been the bane of India’s agricultural marketing and distribution. It’s not just trader-centric, leaving the farmer to fend for himself, but is also blamed for hoarding, collaborative price surges and spoilt farm produce. It may have run its course. But what’s the alternative? Dilip Mookherjee, Director of the Institute for Economic Development, and Professor of Economics at Boston University, who specialises in incentives and institutions, suggests the path to a more efficient and transparent agri supply chain. How would you like to see a five times increase in production of crops and a three times increase in incomes of small farmers in India, all within the next decade? This would raise the Indian economy’s growth rate, and nearly eliminate poverty and food price…

ABOUT: Forty-five years after Operation Flood — that made India the world’s largest milk producer — India continues to be on the lookout for the next breakthrough in agricultural produce and productivity. As India's population grows, it desperately needs the next big burst in productivity to feed the millions being adding to the population year after year. What’s the roadmap to the next White Revolution? R.S. Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation, suggests the way forward. India is the largest producer of milk. It is a matter of pride. I feel privileged to have closely witnessed a part of India’s journey from being a milk-deficient nation to becoming its largest producer. It is an honour to be a witness to the revolution that started about 50 years ago…

ABOUT: With the government kicking off its plan to build a hundred smart cities, its next priority is to identify how many of these will be built from scratch. More importantly, what all must a Smart City have? What should be prioritised and what must be avoided? Technology entrepreneur and investor Jack Hidary, who was one of the architects of the Cash for Clunkers programme in the US for disposing of old cars, suggests a template for a brand new Smart City and says India should avoid making the mistakes of the West. There is a big push for smart cities. The government has allocated significant capital both at the central and state levels to make these a reality. Smart cities promise to reinvigorate local economies and improve the quality…

ABOUT: It’s well recognized that school education plays a crucial role in economic and social development of a society. While India has clearly made some progress on school education, the situation on multiple dimensions is alarming. Anurag Behar, CEO of Azim Premji Foundation looks at the possible solutions. Let us start by considering two things. One, in the past 10-odd years, the proportion of children in private schools has gone up from 15 per cent to over 30 per cent. This is three to five times more than any mid- to large-sized country, not including failed states. We are world champions, hands-down, on the matter of private schooling. In the same period, learning levels (even the narrowest of definitions) have dropped across the board – both in public schools and…

ABOUT: Many of the criminal and civil laws followed in India were framed in colonial times. Indeed, a huge number of Indian laws needs to be scrapped and new ones passed to help us progress. The man who has written extensively about it is Bibek Debroy, celebrated economist, head of the panel for restructuring Indian railways, and a member of Niti Aayog, the body that replaced the Planning Commission. He shares his views. There is a quote from Publius Tacitus (Gaius Cornelius Tacitus), author of several texts including ‘Annals’. As commonly cited in English, the quote goes, “The more corrupt a State, the more numerous the laws”. That’s not quite correct. Tacitus wrote, “Corruptissima re publica plurimae leges”. We indeed have a clause about a corrupt State and another clause…

ABOUT: New global geo-political realignments, rapid technological shift in arms and armed forces’ preparedness call for a relook at India’s defence policy. India might still be primarily Pakistan-and-China focused, but tomorrow’s enemy may not necessarily be the proximate enemy. Admiral Arun Prakash, former Chief of Naval Staff and former Chairman, Chiefs of Staff Committee, outlines how to prepare for the new adversary. When 20th century French Premier George Clemenceau said, “War is too important a matter to be left to the generals,” he was not disparaging the military, but merely emphasising the political character of war; a thesis mooted by German strategist Carl von Clausewitz. Terming war as ‘an instrument of policy’, and a ‘branch of political activity’, Clausewitz placed the onus of responsibility for conduct of war squarely on…

ABOUT: The structure of the police organisation is essentially a relic of British times. Despite the amendments that have followed, Indian policing system remains stuck in a bygone era, even though the threats and the criminals they are supposed to tackle have changed beyond recognition. In this article, Julio Ribeiro, one of India’s most feted police officers, a former commissioner of Mumbai Police, and former director general of Punjab Police during the era of militancy in that state, looks at what needs to be done to make the police in India fit for the next 25 years. When I joined the Indian Police Service 62 years ago, in 1953, the British had just left our shores and, along with them, the English officers who had dominated the senior ranks. But…

A new year is always a good time to reflect on both the year gone by, as well as what could lie ahead. The year 2015 will go down, in my mind, as the year in which great expectations from the government were belied. Despite some sincere efforts by the Modi government, the economy failed to improve as quickly as people expected or even as much as the government itself had forecast. Indeed, the mid-term review of the economy that has just come out from the chief economic advisor’s office moderates expectations – talking about growth in the 7-7.5 per cent range instead of the 8.1-8.5 per cent that was being projected by the government at the beginning of the year. Part of the reason was that the global economy…