India’s exports surge 37%....touch $250 billion

This is the kind of story I like to read in the mornings! Enough of all the negativity and all the depressing self-criticism that’s been going on for so many days. In the middle of all this negativity, let’s pause and savor the spectacular growth of the economy.

Exports are an extremely important component of a fast growing country’s growth story. Exports add to the GDP directly. Higher exports means higher production, more jobs, more incomes and more distribution of wealth. Higher exports also mean higher share for the country in world trade; giving it higher punch in the world economic order. With exports touching nearly $250 billion and imports $350 billion, India’s total trade is now $600 billion odd. At this level, India is amongst the top 15 countries worldwide in world trade. Now, given the fact that India is in the top 5 in GDP (measured in Purchasing Power Parity (PPP) terms), this may seem like a poor ranking. However, it must remembered that there are a few traditional “trading hubs” ahead of us in the list – Hong Kong,  Singapore and Taiwan. Take them out and we are pretty much in the top 10-12 countries!

In addition to the size of the exports, what also matters is the quality of exports. So if Raw Materials and agricultural products were the main items of export, then it would have been one thing. But if the biggest export item is Engineering goods, then that speak volumes for the progress the country has made. Engineering is one of the areas in which India has been hailed worldwide. So it’s heartening to note that India’s exports are made up of  technology and production led items rather than nature-gifted items. The other item of interest is pharma exports....mostly generics....again it is expected that pharma will continue to be a growth sector for India. In addition, there are the traditional strengths of India – Gems and Jewellery and Textiles. Overall, a good portfolio.....on which the foundation for much stronger exports in the future can be built.

What must be appreciated is that exports have risen even while the rupee has appreciated against the US dollar. In the last 12 months or so, the rupee has appreciated by about 6% which means that exports in $ terms have become 6% more expensive (while their rupee prices have remained the same). This export growth even when the currency is appreciating is unusual and very encouraging for a developing country. Usually, developing countries try and depreciate their currencies.....or hold them down artificially.....in order to give a boost to their exports. For eg., the biggest trade issue between the US and China is that China does not allow its currency to appreciate. If it did, China’s exports would suffer very badly....since most of China’s exports are done at very small margins. In India’s case on the other hand, the growth of 37.5% in exports has come in spite of currency appreciation. This shows that the demand of Indian exports is less price sensitive.....this is again a reflection on the quality of our exports.

Twenty years of liberalization has given a huge fillip to our exports performance. Many things have changed in this period. But there are two major changes that have happened which has led to this export orientation. First and foremost, the attitude of Indian businessmen to exports has changed.....today, they have the confidence to look at the entire world as their oyster. Secondly, the availability of high technology has eased a lot with India opening up its economy. Hence quality of Indian exports has improved allowing India to compete worldwide. Overall, India is now known for its high quality engineering (and IT) exports rather than Iron Ore or Cotton fibres....

What next? In the next 3 years, the target is to increase exports to $450 billion. If imports simultaneously climb to $550 billion, the total trade will cross $1 trillion. By that time, the Indian GDP is expected to be about $2.5 trillion or so. When expressed as a % of GDP, Indian trade will be about 40%, a healthy number. This number would indicate that the economy is sufficiently integrated globally, but not overly dependent. In the case of China, trade is nearly 50% of their economy and of course in trading hubs like Hong Kong and Singapore, trade is more than 75% of their GDP. Most developed European countries (Germany, France, UK, Italy) also have trade at about 40-50% of their GDP. Since these countries are small in population and high in technology terms, they have traditionally been very strong in global trade. Now, the tide may be reversing as developing countries.....largely Asian.....take the trade route to development. It would be good that if pan the government for everything that's wrong, we also stand up and applaud their performance when they do well!

The real truth is that India’s trade performance is giving it a lot of punch in global politics. The Russians realized that real global strength comes not from military power but from economic power. Most Europeans nations have a very high Per Capita Income  (PCI) and are thus called rich countries, but they don’t have that much political clout in the world. Which is why they have banded together to form the European Union. India, on the other hand has low PCI, but is now acquiring more and more political clout worldwide because of its trade sector. If the world is noticing India today, it is as much for its trade performance as for its large domestic market. If India gets a permanent seat in the UN, it will be as much for its economic clout as for its population size. This is a time to cheer. Without any cynicism please!

Hazare is no Gandhi.....Gandhi would have sacked the Bhushans

It’s shocking how Anna Hazare is allowing the Bhushans to hijack his anti-corruption agenda. They are making a joke out of themselves and in the process derailing a movement which found so much support among the urban middle-class. But, the question in today’s post is not about the Bhushans.....it’s about Anna Hazare. Why is he allowing the Bhushans to deflect the nation’s attention away from the main issue? Why is he making tactical mistakes at this crucial hour?

A comparison between Gandhi and Hazare was made a few days ago when Hazare emerged “victorious” from the battle with the government. Even then, I never thought the comparison was valid. Gandhi was battling a valid cause against an imperious British Raj which was an imperialist force occupying India. Hazare was battling a legally elected government with proven credentials (the people gave it a 2^nd term in 2009). His hunger strike was always blackmail to me. But forget all of this. Just look at how different Gandhi and Hazare have been in the kind of company that they kept. Gandhi had Nehru, Sardar Patel, Shastri, Rajgopalachari and others as his nearest allies to help dialogue with the British. These were savvy people; people who understood the language of the colonialists and who could communicate in it to achieve their own objectives. They knew the ways of the British Parliamentary system. Eventually, when freedom was given to India.....it was as much for Gandhi’s pressure tactics as it was for Nehru and Patel’s ability to hammer out an independence Act in the British Parliament. Gandhi without Nehru and Patel would have failed and we would still have been slaves. Now look at Hazare’s company. It includes the likes of the Bhushans who are unashamedly asking that a different standard be applied to them than applied to public servants. Hazare with the Bhushans on his side will fail. Hazare with better people will succeed.

The issue again is not of whether the CD is right or wrong. It may well be doctored (or it may be genuine). No one knows that at the moment. But in spite of this controversy, Anna Hazare is hesitant in sacking the two. He would be happy to ask government ministers to be sacked on mere accusations, but he isn’t asking for the same from his aids. If he were to just ask the two to step aside, he would bring the focus back on the main issue. Yes, it’s possible that other members of the civil activists group may also be targeted if the Bhushans were sacked. But that’s real life. Each person has hidden skeletons lying in his backyard. If the goal is to remove the skeletons from the backyard, then it’s only fair that people who have skeletons in their backyard should not be on the panel. It should be remembered that the Bill itself may undergo several changes as the dialogue progresses. What if the final Bill looks different from the original Jan Lokpal Bill that Hazare proposed? Won’t the panel then be targeted and allegations made that they sold out to the government? It helps not only Hazare but also the government that no such suspicions are raised after the final Bill is drawn out. It’s in the interest of both of them to ensure that the Bhushans are immediately asked to step aside.

It’s not only the question of the CD. There is also the land-stamp-duty case in Allahabad. No one feels good that a piece of land in the heart of Allahabad is bought for Rs 5 lacs.....when its actual worth is some Rs 18-19 crores. Of course, the Bhushans will have an explanation for this. Just like ministers have when they are accused. But why should they demand special treatment when the same is not extended to others? Then there is the fresh new allegation that Shanti Bhushan is one of those who sat on the bill for the last so many decades. When he was the Union Minister of Law in 1977, he did precisely nothing on it. How come he’s now pointing a finger at the others? Has he suddenly had a change of heart?

However, the points that Harish Salve made on Times Now last night were the most pertinent of them all. He complained that those who indulge in accusing others and denigrating their reputation without any proof in hand cannot complain when the same is done to them. During the show, Arvind Kejriwal accused P Chidambaram, Pranab Mukherjee and Kapil Sibal of not being clean. Does he have any proof? When he was chided by Harish Salve, he tried to say that he hadn’t said it. Why didn’t Arnab play that portion of the recording back to him? He should have. And why is Arvind Kejriwal going around saying that he will be targeted next. Does he have something to hide? If he doesn’t, then why is he worried? Is he trying to pre-empt something? Is he building his defenses in anticipation of what dirt may come out on him?

And I cannot understand what is wrong in Kapil Sibal briefing journalists on his points of view. In the frenzy that followed the hunger strike, no one gave the government a chance to be heard. It was the same during the 2G matter.....no one gave Kapil Sibal much of a chance when he said that 2G policy was never one of maximizing revenues. That the government saw it differently....that it believed that mobile telephony was as fundamental a need of the 21^st century as cheap kerosene is (hence low pricing was more important than higher spectrum charges). What’s wrong if he puts his point of view out now using media? If Arvind Kejriwal and the Bhushans can use media, it’s fine; if Kapil Sibal uses media, it’s unethical!

Anna Hazare should not get into such a low level game. This is the muck in politics that he should keep out of. And he should keep good company around him. Those who believe in democracy; who understand the Constitution; who understand how Parliament functions; what the Laws are.....not lofty idealists who are far removed from the realities on ground. It’s ok for Hazare to be an idealist....a dreamer.....but his cronies have to be far more grounded. Like Nehru and Patel were.

The real truth is that Anna Hazare is no Gandhi. He is when it comes to personal morals and ethics. But he isn’t when it comes to building a team. Gandhi knew when to step in and step out. Anna does not. Gandhi had the guts to go on hunger-fast against his own people for the ills of society that they perpetrated (untouchability; caste system). Anna so far has not spoken to his followers about their own corruption. But most importantly, Gandhi kept the likes of Nehru and Patel to talk to the British.....people who were above board; people who the citizens of India trusted. Hazare is keeping the Bhushans for company; This is the big reason why Hazare is no Gandhi....

Bhushans claim the CD was doctored. Even then they should step aside.....

Expectedly, Prashant Bhushan has claimed that the CD that has been floating around in the last few days has been doctored. As evidence, he is relying on reports from two sources: one appears to be a private acoustic phonetics expert from the US and the other a private laboratory from Hyderabad (headed by a former Director of Central Forensics Science Laboratory). The story in yesterday’s papers had quoted a source that was a government agency with high credentials.....one that has been used in several cases in the past. So who’s right and who’s wrong?

Whoever is right and whoever is wrong will be decided in due course. However, what I find unacceptable and funny actually is the press conference Prashant Bhushan convened on the matter. Flashing these two reports, he became the judge of his own case and ruled that he was innocent. As if one would expect him to do anything differently. So he is the accused, the investigator, the lawyer as well as the judge all rolled into one. This could well be a preview of the proposed Lokpal. All powers rolled into one. With no place left to appeal.

Hindustan Times has issued a clarification today on this matter......the author of the piece Vinod Sharma is a well regarded journalist. He has stated that at the right time, the report from this reputed agency will be brought out. Apparently, this reputed agency had conducted something like “waveform analysis” done on “sonic software” to justify its claim that the tape was not doctored. Apparently, this technology is not available with any private lab in India. We will have to wait for HT to bring out this report.....a written copy of which it seems to be having in its possession. The HT clarification today also states that they did try to get in touch with Truth Labs (the Hyderabad private agency) and their Chairman refused to share details of the investigation undertaken by them, except stating that they had the necessary equipment to do the investigation.

The point however is not whether the tape is doctored or not. Maybe it has been. The point is that different rules should not apply to different sides. When Shashi Tharoor was hauled out of government, he was done so without anything having been proven guilty. Now, I would like to believe that Shashi Tharoor is not one of those typical corrupt politicians that one frets about all the time. He’s been a career diplomat and on a different day, he may well have been found on the side of those who are today for the Jan Lokpal bill. But he was asked to step aside.....pending the facts of the case coming out. Why should the same rules not apply to the Bhushans? Why should they not step aside so that a fair enquiry can be held into the matter?

The Bhushans have got the anti-corruption movement into too much of the wrong kind of limelight. On the one hand, you have Anna Hazare who appears to be a voice of reasonableness now.....he recently stated that he would respect the decision of Parliament, whatever it was (even rejection of the bill).....and on the other, you have these two who appear to be more interested in holding on to their high visibility seat in the drafting committee than in the adverse fall-out that it is causing the anti-corruption movement. Taking advantage of the mood prevailing in the country, Prashant Bhushan has smartly chosen to link the current tapes controversy to the on-going 2G investigation because the judge named was the one investigating the 2G matter. In many ways, he is trying to pre-empt the judgment of the SC. If the SC calls the 2G parties guilty, this will be acceptable to all. But if the SC says that the 2G matter is not sufficiently proven, then Prashant Bhushan will accuse the government of having applied pressure on the SC judges using this tape......threating the judge of an expose of his corruption. Either which way, Prashant Bhushan would have harmed the government. Incidentally, in this entire CD episode, the government itself has stayed out.....its really a wrangle between the Bhushans and Amar Singh.

And what about the land controversy around Shanti Bhushan? The fact that he had recently bought a land in Allahabad for Rs 5 lacs.....a deal that should have costed him close to Rs 18-19 crores. A statement was made yesterday in this regard. That the land deal had actually been inked many decades ago, but the seller had refused to honor the deal. Finally, the court ruled in Bhushan’s favor recently and hence the deal was consummated only recently....at the old rates. Would we have tolerated such an explanation if it had been a politician? We would have said that the politician had influenced the judgment. Even if this were true, should the tax not be calculated at market rates....to the best of my knowledge, stamp duties are linked to the ready reckoner of market rates. Why was tax of only Rs 45K paid?

This piece is not about supporting politicians. It’s about having one rule for all. What is true for the goose should be true for the gander as well. Ideally, we should have the maturity for proper investigation to happen and then form our views. But if we don’t have the maturity....and if we like to conduct our trials in media....then why should the same rules not apply to civil society activists? If we believe that politicians should step aside while the investigation is going on, why should civil society activists not step aside in similar circumstances?

The real truth is that even if the Bhushans are eventually proven right, they should step aside right now for the larger cause. If they did step aside, they will give the anti-corruption movement a higher moral authority. Shashi Tharoor did not lost his credibility just because he stepped aside......in fact he strengthened it......the Bhushans also won’t lose theirs either if they step aside. But the public at large will feel reassured that the activists are willing to hold themselves to the same high standards they are demanding for politicians and public servants.

Anna should lead by example. The Bhushans should be thrown out.....in fact, investigated.

This is beginning to look like the ultimate tear jerker on TV. A script written to bring in the viewers! Old man Anna goes on a fast against corruption. His two closest aides are the father-son duo of Shanti and Prashant Bhushan. Anna wins the battle as the government comes under pressure from a clearly undemocratic blackmail-like agitation. The frenzied mobs hail this as a victory against corrupt politicians. Both Bhushans then get onto the panel which will draft the actual anti corruption Bill.....and suddenly comes the twist in the tale! The two Bhushans are themselves caught......there are accusations of them being corrupt; their integrity is questionable.....the story just got more interesting!

One of the things that irked me the most during the 4 days when democracy was hijacked by Anna and his armchair critics was the smug feeling of self righteousness amongst his followers. Those who crowded Jantar Mantar; those who made their first appearances on TV (especially as members of panels); those who “liked” the movement on Facebook were all right. Those who had a divergent point of view.....even just questioned the methods while supporting the cause otherwise.....were supporters of corruption and in fact, evil. It appeared as though all politicians were corrupt; all citizens were moral uprightness personified. The accusation against the Bhushans should prove a point I have been making all along – all Indians.....OK, let me correct myself....most Indians are guilty of corruption themselves. And I don’t mean of just giving bribes. I mean actually stealing money from the government by not paying taxes as required under the law. Taxes that could have been utilized for the uplift of the poor. It now appears that the Bhushans are guilty of much more.....that of indulging in open corruption. That of trying to bribe the judiciary.

Many of Anna’s supporters are shattered. As I am sure he is himself. He’s made a brave statement that if this is true, then both Bhushans would be dropped. Many who supported the movement feel that this is all a government ploy to discredit the movement. But I fail to understand how this matters. Is the truth more important or the motivation behind the release of the CD? In fact, isn’t this also a whistleblower operation that someone has conducted against a corrupt person? Let’s say the government did engender the release of the tapes at this time. How does that take away from the truth? The forensic labs have said the tape was not spliced. Prashant Bhushan has himself admitted that the voice could be his fathers. His only defense was that the tape was spliced. That’s proven not to be the case. If we ask ministers to be sacked on the basis of prima facie involvement, should the same rule not apply to the Bhushans? Will they now show decency by resigning before they are thrown out by Anna?

Then look at the charges made against Shanti Bhushan in his recent land purchase in Allahabad. A 7800 sq. meter plot of land in the posh area of Civil Lines in Allahabad was bought by him for just Rs 5 lacs when its actual market value is said to be Rs 18-19 crores. Why did Shanti Bhushan underdeclare the value of the land? Obviously to save on the stamp duty. He paid only Rs 45000 as stamp duty when he should have paid more than Rs 1.5 crores. Now isn’t this a copy book case of what politicians are accused of? Did he learn these tricks when he was a politician himself so many years back?! Should this man have been allowed at all by Anna in his coterie of confidantes?

Of course, the world at large may not know that Prashant Bhushan is the lawyer who has petitioned the President of India for clemency for Afzal Guru....the one who was proven guilty of attacking Parliament and was given the death sentence by the Supreme Court. Prashant Bhushan’s argument was that Afzal Guru “was not the main culprit....he didn’t personally attack the Parliament but was only involved in the conspiracy”. Just like Osama Bin Laden, Dawood Ibrahim and their types don’t deserve the death penalty because they didn’t carry out any attacks personally! Frankly, I don’t mind his taking this position in this case.....as a lawyer you often take cases which are interesting and there is nothing wrong with that. My problem is that how can such people suddenly claim to be so morally superior to the rest of their countrymen that they start preaching to them? After all, how can a public personality separate out his “professional conduct” from his personal beliefs?

The purpose of this piece is not to belittle the anti-corruption movement. India needed one and it’s finally had one. All thanks to Anna. But the purpose of this piece is to drive a little sense into the million of followers who believe that hunger strikes are the way to rule the country. It is to stop Anna Hazare’s ambitions to start one more hunger strike.....this time for the right to recall MPs. It is to remove the self righteousness that pervaded the entire movement. It is to bring back a semblance of maturity to the issue and force a more balanced debate. It is to make sure that democracy is not replaced by mobocracy. I strongly decry the fast-undo-death route as being blackmail against a legally elected government. But I decry even more the idiotic role of the followers.

The real truth is that the Bhushans should resign. And be sued. In fact, Anna Hazare should sue them personally. It’s a classic case of the pot calling the kettle black. If we drill deeper, we will realize that before we can point fingers at politicians, we need to point them at ourselves first. We cannot take the “holier than thou” attitude we have taken so far. We need to do many things that I have listed in my earlier posts to root out corruption; not just go out in frenzied morchas to enact a bill that will most certainly harm the very democracy that has given us the freedom to carry out such morchas in the first place.....

Finally Maximum City gets Maximum push! And why Bombay should be an independent city-state....

Bombay is known for its big thinking. It is the financial capital of the 2^nd fastest growing major nation (very soon to become the fastest growing!). And yet, its rulers have never ever behaved in a way appropriate with the dreams of this city. For decades, the city has suffered from being a part of a state that has been run inefficiently to say the least. Finally it took the PM to give the push for its renewal some five years back. Now with a smart CM in place (Prithviraj Chauhan is an urban and educated person), we can finally have some hopes that progress will happen.

The statistics are encouraging. Some 330 kms of roads are planned to be built in and around Bombay. This would cost about Rs 34000 crores ($7.5 billion). Interestingly, unlike in other major cities of India, where a series of “inland ring roads” are built to expand the city, Bombay is resorting to a series of “over-the-sea rings”.....a string of roads over the sea to link distant places to one another. The Bandra Worli Sea Link is just 4.7 kms, but it is planned to be extended at both ends. The Worli end will first go to Haji Ali (3.6 kms), Priyadarshini Park on

Napean Sea Road

(2.2 kms), Girgaum Chowpatty (1.2 kms), Nariman Point (5 kms), Cuffe Parade (1.3 kms), Colaba (4 kms).....and then from South Bombay towards Wadala (11 kms), Panjarpol (5 kms) and end at Mankhurd (6 kms) on the East. On the Bandra side, it will extend to Versova (11 kms) and Virar (54 kms). This would be a 109 kms long ring starting from the extreme North point of Virar, extending over the sea to the Southernmost point and then to the East........Then there is the much-needed and very ambitious project of the 23 km long sea-link from Sewri in central Bombay to Nhava on the New Bombay side....a project that can propel this city in one giant leap into the grouping of the best cities worldwide. This sea link would then be extended a further 20 kms to Panvel. There is also the 17 km long Sion-Panvel “over the land” road (since most new projects are over the sea, this “over the land” definition sounds almost quaint!) to be built at a cost of some Rs 1000 crores.

There is a also investment of Rs 10,000 crores in the new metro’s 1^st phase (underway) and the now-cleared Rs 12,000 crores in Phase-2. Together, the length of new railway lines laid would be about 43 kms. This is nothing really considering that the Delhi metro is nearly 200 kms long. There is need for much more coverage; much more comfort of travel and much more imagination. Then there are the opportunities offered by sea travel....a well developed means of transport in almost all port cities around the world. But our environmental laws are so outdated that they prohibit even setting up sea-side restaurants and bars; forget building entire transport systems over the sea! Such misplaced concerns for environment have wreaked havoc on the growth of the city. Except for pandering to narrow self-interests, they do the environment no good.

To the politicians and babus, these numbers are staggering; in fact unnerving. To the ambitious citizens of Bombay however, these numbers are mere necessities. The ability of Bombayites to pay higher tolls in return for better services is well known. When the Bombay-Pune expressway became operational, many thought that people would resist paying some Rs 150 rupees toll for a 100 kms stretch of road. But the driving experience; the saving of time is so dramatic (Bombay-Pune is now just a 3 hour journey!), that today, the road has become a lifeline for Bombay. Likewise, when the Bandra-Worli sea link started, there were some doubts about whether it would hit break-even.....the toll of Rs 50 for a short span across the sea was one of the worries. Today, if my numbers are right, there are more than 50,000 cars using the sea link daily and break-even is around the corner! Time is money in this city.....a consideration the babus often fail to make when planning mega projects since they themselves don’t value time that way. People in Bombay don’t pay for distance.....they pay for time. When will our babus understand this???

I suspect there is a reason why Bombay’s infrastructure has been delayed this much. There is probably an unreported scam here (aaaarrrggghhh!). If all the infrastructure had been built early on, wouldn’t the real estate valuations dropped in South Bombay? Why would anyone pay Rs 75000 per square ft to live in South Bombay, if he could live in New Bombay paying one-tenth of that......if the travel time between these two is brought down to say, 30 minutes? I am serious about this.....I think the rich and powerful South Bombayites connived with the Government in delaying projects......in the process making much of Bombay into the biggest urban chawl. As per census reports, nearly half the city today lives in slums, a statistic that every proud Bombayite finds difficult to handle. These slums are very different from the slums in any other city.....they house amongst the richest slum dwellers anywhere in the country.....slums in Bombay come with AC and double-storeyed construction! These “slum dwellers” would happily stay away from the central business districts if only their commute times could be reduced.

Brings me to the most contentious issues facing Bombay. Shouldn’t Bombay be made an independent city-state like Delhi, Singapore or Hong Kong? The reasons are simple enough. Bombay needs to be a global city and it needs infrastructure the way global cities have. If it remains a part of the state, it will always get second grade treatment.....as a bulk of the state’s MLAs would come from outside Bombay and would like to spend the monies there. This would starve the city. There is very real and much larger problem of the kind of culture these MLAs from outside thrust on Bombay. We’ve seen the attitude of RR Patil and co in this regard......rather than cleaning up “dance bars” (as much a cultural part of Bombay as Bollywood!), they just shut them down under the garb of morality. Bombay needs its own government, its own resources, and its own culture. Bombay needs politicians and babus with a vision. It should be made into an independent city-state. If need be, it can subsidize the rest of Maharashtra for a few decades....after all, the only hurdle to its independence appears to be the loss of revenues and the impact that would have on the interiors of Maharashtra. Making Bombay independent will also free up the politicians of Maharashtra to focus exclusively on the needs of that state.....but I guess the politicians would rather enjoy the lifestyle of Bombay than spend time in the interiors!

The real truth is that Bombay is an ambitious city in search of an ambitious leadership; a bunch of big thinkers. It needs politicians who see their city being on par with Shanghai and Hong Kong one day. Politicians who don’t look at it just like the proverbial golden goose.....a source of revenue and nothing else. This has to end. And it has to end now.....

Another Indian takes over as CEO of a large global corporation. Why Indians CEOs are becoming popular worldwide.....

It was reported today that Rakesh Kapoor would take over as Global CEO of Reckitt Benckiser (some $14 billion in size) in a few months time. He is one more CEO of Indian descent after Vikram Pandit, Indra Nooyi, Vindi and Ajay Banga, Sara Mathews and so many more who have reached the absolute pinnacle of the corporate world. Today it’s difficult to even list all of them down. Begs the question: Why are so many Indian managers succeeding globally?

There are several reasons for this. One is obviously the shift in the global economic order towards the developing countries; especially the BRICS (Brazil, Russia, India, China, South Africa) countries. The skill-sets required in running Ops in these countries are totally different from those required in running businesses in the developed world. Even 15 years back, nearly 80% of global consumption took place in the US and Western Europe. In a time like that, it was obvious that you needed managers who understood that environment. Hence the Americans and Europeans dominated the world scene. Today, when global consumption is shifting towards the BRICS nations, it is obvious that the skill sets required are going to be available with managers in this region.

But what skill sets are we really talking about here? In my mind, there are 2-3 strong skill sets that Indians have that is driving their career success:

1)      Sensitivity to pricing: Indians have been raised in an environment where every rupee counts. I remember when I used to work in Frito Lay nearly 15 years back.....the pack of Ruffles (now Lays) was priced at Rs 10. Isn’t it amazing that even today, it’s priced at Rs 10! Of course, the quantity of chips contained in a pack has reduced from 50 gms to some 35 gms now. But what’s important in India is the absolute price point (the money that you shell out), not the quantity of benefits contained. Take another example. I used to work in Revlon till 10 years back and we used to sell the global hot-selling Revlon Nail Enamel in India. It was priced at Rs 90 a pack ($2) and the American parent company thought we were pricing it too low. It sold globally for $4.5. They could never understand why we couldn’t sell much more than we actually did. Revlon had a premium imagery but people simply could not afford to pay that much to buy that “luxury”. The big daddy in this business in India was Lakme which was pricing its product at Rs 35 or so (<1$). In an environment like this, it was tough going for Revlon.....till the time it launched a “mini pack”......half the volume; nearly 40% lower price; and guaranteed 100% premiumness of a global brand! This pack worked wonders. Sales of Revlon Nail Enamel packs went up from some 200K units a year to a couple of million units a year! In fact, I am told that this India-designed pack has now been taken to several other developing countries around the world. Or take the sachet example.....an American cannot even start to understand this concept. It’s not like Americans are not price sensitive. They are; but their price sensitivity is of a very different nature. They compare on a price/ml basis.....and are willing to buy large pack sizes if that brings the price/ml down. The biggest selling shampoo unit in the US is the 1 litre pack if I remember right. Almost everything that sells in a discount store is in large or extra large size! At that size, the price/ml is the lowest.....the American does not mind the absolute price point being higher (he can afford it); he wants the price/ml to be low! In India on the other hand, the absolute price point is important; even if the price/ml is higher (the sachet costs more on a price/ml basis than even a 100 ml bottle of shampoo)! Growing up in such a competitive environment.....is becoming increasingly relevant as the global consumption shifts towards price sensitive developing countries around the world. This is one of the strongest learnings that an Indian upbringing gives you!

2)      Jugaad: The operative word of this great philosophy that Indians live by (!) is “adjust”. Indians are known to adjust to anything.....4 people will adjust and sit on a scooter meant for two! Eight people will adjust and cram into a home meant for four! A Merc will adjust on the road next to a bullock cart! And so on an so forth. The spirit of adjustments is very critical when it comes to managing the impact of low prices. To reduce prices, product designs need to be changed. Adjustments need to be made. So the shampoo that Levers puts out in India is far better than anything available locally; but it is made up of cheaper ingredients than the same product available in the western world. In fact, products like Wheel and Fair and Lovely would probably fail the stringent product tests that Unilever worldwide would have. P&G refused to adjust their product design specially for India; and preferred to maintain global prices in India; its relatively small size is proof that that strategy doesn’t work. Take the Tata Nano....in the Western world, people might shudder to even call it a car (!)....but in the emerging markets, it’s a dream come true! This ability to adjust downwards.....while still retaining the premium imagery required.....is not something that managers in the western world are comfortable with. And Indians are stepping in to occupy such emerging opportunities.

3)      The education system: Lower pricing needs jugaad to make adjustments. And jugaad needs a strong R&D orientation to design products that fit the requirements.....the strong academic credentials of most Indians abroad helps them in this regard. Developing new products with new product designs to cater to specific price points needs an ability to think out of the box. Not in the conventional R&D that the western world excels in.....but in some form of native ingenuity. This is where Indians score. With a strong emphasis on academics in general and science and engineering in particular, Indians tend to be good in giving shape to their “adjusted” requirements. The sachet could only have been designed in India! The Nano likewise!

The real truth is that Indians are ideally suited for the new world order. There will be many more Indians who will make it to the top worldwide as economic activity shifts to the developing countries. In fact, I expect many global corps to base their headquarters in India.....after all, headquarters should be in the midst of the action!

The South shows the way! Voters are the real civil society activists

A few days back, the country’s democracy was held hostage by a well-intentioned man who unfortunately adopted a disruptive hunger-strike to force his will. And a whole bunch of his urban educated followers who very largely were ignorant of the impact of the proposed solution.....blind followers trying to purge their own internal guilt of being corrupt by taking up the cause of a media-supported struggle against corruption. On the other hand, the people of TN, Kerala and Pudicherry showed that there is a different way to get change. A democratic way. And an equally powerful one.

Equally powerful, because all polls suggest that the current corrupt and ineffective DMK government is on its way out. As it should be. The party has been indulging in shameless activities in Delhi and Chennai...... causing great embarassment to its alliance partners.....many of whom are now getting tarred with the same accusations. It’s been abusing the special powers a coalition system confers upon it. The voters of TN are likely to show the boot to the DMK. Likewise, in Kerala, the LDF is likely to be thrown out, in line with what happened in the Lok Sabha elections a couple of years back. People in Kerala are known to get disenchanted by the ruling political configuration every five years; and throw it out every five years. This time also, they are expected to do the same to the LDF.

All three states polled upwards of 75% yesterday. Now I know the naysayers will suddenly jump up and say: What about all the illegal money that was doled out to woo the voters? Is this democracy at all? Are these people really voting for a particular political party or are they voting for the immediate cash they are getting in their hand? My answer is simple: All this is unpardonable. It should be stopped. However, it’s not as big a deal as it is made out to be by the TV channels. It’s practically impossible to influence crores of voters by doling out cash to each of them. It’s only in certain pockets, where results are likely to be close, that parties try and play games. Besides, how do you know that the person who takes money from one party actually votes for that party? Or is not taking money from the opposite party also? Even if flawed, I still consider this to be indicative of at least some degree of accountability....compared to none that exists for the civil society activists who routinely shun the process of democracy.

The people who vote have a right to demand that action be taken against corruption; those who don’t, have no right. The urban people continue to disappoint the most. Chennai came up with the lowest polling % at some 62%. Within the city, if one were to take the voting amongst the educated and affluent.......all supposedly Anna Hazare’s supporters.....I can bet it would be lower than 40%. These are the armchair experts who want to dictate terms to the nation and subvert its democracy. So called intellectuals who don’t want to dirty their hands. In the corporate sector, they are called the ivory tower experts.....the marketing guys who haven’t done sales ever. The sales guys who have never understood what brand building or R&D is. And the R&D guys who don’t know what the consumer wants at all. The corporate sector is ruthless with such people.....such people wouldn’t survive for long. And yet, at Jantar Mantar, these ivory-tower experts held the country to ransom.

Those who do not vote usually end up deriding the entire system of voting. They believe that the votes are rigged; many of them have never even voted after the EVMs have come around. Most of them are cynical. Actually, most of them are looking for excuses to justify their inaction. All of them are happy to enjoy the holiday; almost none of them want to enjoy one of the best fruits of democracy....

The urban folks live in a chimerical world of make-believe. They have no idea of the real issues facing the country. I read somewhere that there is probably less corruption in WB and Kolkata than in Delhi. But the city of Delhi progresses remarkably with every passing year.....but the city of Kolkata still lives in the 1960s. Which city do you think people want to live in? People want a corruption-free society; but I can bet that they want a prosperous country even more. Corruption can be solved down the line.....but economic progress cannot be delayed any further. Those hit the worst by corruption are willing to delay action on corruption.....in want of economic progress. The better offs don’t value their economic progress.....and would be happy to derail it to achieve some lofty goals. Such a contrast between two divergent sections of society!

The real truth is that only voters speak the real voice of India. The UPA government should listen to them and should have handled the pressure put by the activists better. They should have force-fed Anna Hazare the way they do Sharmila in Manipur.....Incidentally, its not like her voice has not been heard; but the government has decided that it does not want to amend the Armed Forces Special Powers Act. That’s the right of the government.  Protests are fine, but threats are illegal. In fact, the government should make hunger strikes illegal.....