Paint It Black

Paint It Black

The Modi government’s Income Declaration Scheme (IDS) 2016- at 45% tax, cess, and penalty, all inclusive, is rumoured to be turning  into a damp squib.

Though the government has not put any figures to the amounts/values disclosed, and taxes obtained so far, almost at the end of the 4 month period of its currency, this, citing confidentiality - unofficial sources put it at much less than the Rs.50,000 crores it had hoped to collect.

The government’s  ill-conceived scare tactics, a departure from past, more unctuous schemes, is backed by a recently passed, and as yet untried, draconian law, against black money hoarders. It has not, reportedly, impressed the money bags.

They have seen or heard of 10 such schemes already, between 1951 and 1997, some of which even offered better terms.

This, despite the moral hazard of rewarding tax evaders. But then, all voluntary disclosure schemes suffer from this infirmity. It boils down to- does the government want the money or not.

But most were failures still, with only one in 1985/86 yielding Rs 10,778 crores in taxes, and the VDIS scheme 1997, run by then Finance Minister P Chidambaram, garnering Rs. 33,000 crores.  But then, VDIS 1997 charged a flat 30% tax, with no add-ons.

In the 1997 scheme, and every other past scheme, the ‘voluntary’ tax-payer that did come out of the shadows, to ‘regularise’, mostly his undeclared immovable property, got away, as a practical via media and additional hidden incentive, with a massive undervaluation of assets.

It was that, or nothing, for the government. This, at even 50% of what they were actually market priced at/worth, and  so, the  tax paid thereby was also at half of  the nominal percentage charged to tax. So in 1997, it was just 15%!

Something like that may still be operative in 2016, but remember that the property market is in a slump at present, and some owners may think this undervalues their property, even for discounted taxation purposes.

And there was no draconian new law before, or in 1997, to try out on the unimpressed.

The still unimpressed in 2016 however, are told that much data has been allegedly mined on him and his doings, to be unleashed once the amnesty period ends. How this will pan out, remains to be experienced. But the whole thing does not sound very politic. To annoy masses of urban well-to-do is not desirable, even for a clear thinking Communist, let alone the BJP.

As it stands, till the 30^th of September, only days away now, no questions will be asked on source of funds as long as the 45% is paid.  

For a while, the administering arm, the Central Board of Direct Taxes (CBDT), ensconced centre-stage in the Finance Ministry, was itself confused about whether a person could actually pay the tax and penalties with black money. But when hardly anyone came forward, the CBDT clarified that the taxes could be paid using ‘unaccounted for’ cash.

After the deadline, there are criminal prosecutions and jail sentences lying in wait, per the new laws. And yet, the rumour goes, IDS 2016 will   be hard pressed to even recover the money spent publicising it!

Not that VDIS 1997 did any better 19 years ago, if one draws up both sides of the balance sheet. I know, for a fact, that the advertising costs alone, in 1997, was much in excess of Rs. 33,000 crores!

The reason that many people are still sitting on the fence is, due legal process will have to be followed. And in India, it will take a month of Sundays, with the eventual outcome, including appeals, pushing back the final verdict for many years.

For people protecting enormous ill-gotten, or previously concealed wealth, a long period of ponderous litigation, is just what the doctor ordered.

A similar prior flop show resulted when this government, went trying to repatriate concealed and untaxed money of resident Indians stashed abroad.

This, in order to redeem one of its most memorable election pledges. It attempted to look in bank accounts, tax havens, properties invested in abroad, Panama, The Bahamas, etc.  But again, hardly any catch resulted.

The CBDT personnel, clearly out of their depth, were confronted by a thicket, in places, a veritable tropical forest, of expensive to probe international and sovereign laws to deal with, holding companies, proxy directors, cross-holdings involving NRIs, and people with other nationalities, extradition treaties, and so on.

It is no wonder that most Indian bribe-takers in defence deals, are so brazen, issuing loud challenges for proof of their involvement. They know the Indian government cannot catch them, with the best will in the world, at least, not via due process, and not through that tangled thicket abroad either. And we have no Abu Ghraib or Guatanamo for tax offenders with en-suite water boards. At least, not yet.

It is unclear however whom the latest scheme, IDS 2016, and the threats of retribution, after the expiry of the four-month amnesty period 1^st June to September 30^th , is designed to intimidate. And whom indeed, it aims to please. Where does the politics of the thing lie?

If it is designed to impress the numerous but ordinary, poor, voter, who pays no tax either way. If so, it is not going to resonate with his voting bone. Taxes the rich pay, or don’t, are not very high on his priority list. And neither does it afford him  much malicious, vicarious pleasure, to see traders and businessmen, leaders, sundry grand people, many of whom are his employers, harassed by a  political system that runs, itself, on- you guessed it, black money!

Large, threatening, print and TV advertisements, that fly in the face of earlier promises of curbing ‘tax terrorism’, have been roundly ignored by the target audience.

Presumably, so paltry is the yield, just days from when the scheme ends,  that the infamous raid parties have reportedly hit the chole bature and jalebi walas in Khao Gully in Mumbai. This, to try and meet their targets.

A voluntary scheme therefore, has been turned into a hustle, if not a  desperate shambles.

What will happen later? Will recalcitrant people in the Opposition be targeted using the draconian black money law plus the money found under his mattress? Will the black money laws become a weapon in the hands of the government, never mind how much tax money it produces?

But, underlying this cumbersome and slow motion cops and robbers show, is the undeniable fact of a too narrow taxation base, both in terms of individuals, numbering just some ten lakhs. This out of a huge population of 1.25 crores.

There are also some 10,000 listed public companies, and perhaps ten times that number, private, smaller, small, outside the bourses.

Not a lot, for the essentially rent-seeking CBDT to harass, even if the foreign investors are roped in.

What is needed desperately is to expand the tax base and lower the nominal tax rates. P Chidambaram did this in his ‘dream budget’ around the VDIS scheme, citing the tendency towards greater compliance at lower tax rates (The Laffer Curve).

Since then, nobody has tried to push tax rates down, and include, say, rich farmers. Will this government do so? If it does, it might actually collect more taxes and fewer brickbats.

For: The Sunday Guardian

(1,221 words)

September 22^nd, 2016

Gautam Mukherjee

No War! Trading Cuts And Bites With Pakistan Is Best

 No War! Trading Cuts & Bites With Pakistan Is Best

The ‘Dogs of War’ are baying on Twitter/Facebook, in editorials and TV debates, post the Uri massacre at the Indian Army’s brigade HQ.

But let us realise we are not going to fight Pakistan alone this time, their nuclear sabre-rattling notwithstanding.  

And the first casualty of an all-out war would be the sudden death of India’s ‘fastest growing economy in the world’ tag.

Without war, at 8% growth in GDP in 2016-2017 per Niti Aayog projections, the trend sustaining - and the forthcoming GST dividend could add another 2% by 2019.

A further 1% could come from a well-watered rural economy, this year, and for two going forward, thanks to the El Nina effect.

India could well grow its $2 trillion real economy and its $2 trillion stock market capitalisation for the next two decades, at compounded double digits. It has every chance of becoming a ‘low middle income economy’ within a decade, even given the size of its population.

But only if it does not take this bait of war.

It would then, over time, be in a much better position to sharply increase its military spending from the paltry 1.7% of GDP at present, contribute along the way towards regional security, and grow stronger with each passing year both economically and militarily.

China’s $ 50 billion CPEC in Pakistan is its meal-ticket to economic revival, and this is at the core of the true narrative of present developments.  

It has already occasioned joint protection of the work ongoing in Gilgit/Baltistan, and mass arrests of protesters there, even before India asserted its claim on PoK and the territory, just five weeks ago.

At the other end of the proposed CPEC, in Balochistan, thousands have been killed ever since India declared its support for its independence movement.

Many more ethnic Balochi men, women, and children have been abducted and gone missing. All this is now fodder to the mill at the UNGA in New York for the first time.

But apart from the likelihood that we would lose this war, given China’s vast military superiority, we would certainly set our economy back a decade at least.

Our GDP rates would plummet. A per day cost of war in 2016 would top Rs. 5,000 crores, considering Kargil, a one theatre operation, in 1999, was estimated to cost between Rs. 5000-10,000 crores a week.

A 14 day ‘short war’ today would cost  at least Rs. 250,000 crores, assuming multiple fronts and contingencies, and raise the nation’s fiscal deficit by 50% to about Rs. 8 lakh crores, up from 5.32 lakh crores in 2015-16. This was a healthy 3.9% of GDP, down from 4.1% the year before. This hypothetical war will also have a sharp knock-on inflationary effect.

It would also ruin the upward trend in FDI/ FII investment, take a 50% hit on the bourses, drop the rupee to Rs. 100 to the US dollar, put paid to our high tech manufacturing ambitions and render bleak the chances of revival in the near term.

War with Pakistan now would suit China very well though, and eliminate a strong rival from contention.

China’s determination to protect the JeM, keep India out of the NSG, shower nuclear power stations, military equipment, enter into defence pacts with Pakistan, has to be also viewed in this context.

However, this is not a ‘do-nothing’ prescription against Pakistan’s very competent ‘sub-conventional warfare’ model.

If India changes course, to stick, no matter how insolent the provocation, to responding likewise, we can give tit-for-tat indefinitely, and even make some pre-emptive thrusts and parries. Honour and blood will yet be served, while our economy keeps chugging forward.

India can ramp up its own ‘Defensive Offence’ programme, long advocated by spymaster and NSA Ajit Doval, and create mayhem in India’s legally owned  PoK/Gilgit-Baltistan.

We can also fan the revolt in independence-seeking Balochistan till success is theirs. With these regions breaking away as the ultimate objective, other regions, like NWFP, and Sindh, are likely to join the revolt.  

We can provide, men, materials, training, diplomatic and economic support long term. We can use proxies, ‘non-state actors’, specialised operatives, soldiers, commandos - but all in mufti and disguise with ‘plausible deniability’ stencilled on them.

 And this, with plenty of scalps taken to assuage what Pakistanis have been doing to us for over three decades.  This slow burn would also prevent China from wading in, and blaming us for the privilege!

Besides, our diplomatic effort to isolate Pakistan as a terrorist state is working. Not only is it under censure from America, Russia, Britain, France, Germany, but also from Afghanistan and Bangladesh, in the SAARC.

More condemnation, perhaps even economic sanctions, may well be on its way.

But not only does Pakistan and China want to seize the Kashmir Valley to secure the CPEC and water flows; humiliating India and trashing its global aspirations, are also important objectives.

This diabolical joint plan is meant to be decisive, but how can it be, when it is essentially a ‘war of a thousand cuts’, in operation since the 1980s?

For: The Quint

(842 words)

September 21^st, 2016

Gautam Mukherjee

The Time Has Come For India To Get Serious About Hindu Studies

The Time Has Come For India To Get Serious About Hindu Studies

Former High Commissioner to Bangladesh, Veena Sikri, currently the Chair of the ICCR Committee for Assessment of Indian Cultural Centres,  recently introduced an erudite Irishman, a no-onion-no-garlic Hindu scholar to a small group in New Delhi.  

The gentleman is coincidentally from the Swami Vivekananda era Sister Nivedita’s home-town, in Ireland.  The brief interaction, with a select group of invitees, took place at the Syama Prasad Mookerjee Research Foundation (SPMRF), premises at 9, Ashoka Road, New Delhi.

Incidentally, the very rooms occupied by the Foundation today, were once occupied by a much younger Narendra Modi, in the nineties, before he became Gujarat Chief Minister. This was when he was a BJP spokesperson, frequently seen on TV panels broadcasting out of New Delhi.

The Irishman we met is the Director of the Oxford Centre For Hindu Studies (OCHS). This organisation is located in Oxford, that too for the last 20 years, currently on Magdalen Street, in a small space between two shopping malls.

But OCHS is a bona fide part of the hallowed Oxford University offering, with all the academic quality and rigour that implies. 

OCHS was introduced to Oxford University originally via the good offices of its Theological faculty, traditionally, culturally and historically, devoted to Christian studies.

Now OCHS qualified students go out to  research/guide/teach in Religious Studies faculties in Europe, America, Africa, Japan, indeed all over the globe. And Das, its Director, encourages them to expound their well informed and considered views as ‘public intellectuals’.

India herself has been largely missing-in-action in this endeavour so far, with a mistaken Nehruvian belief that religion, particularly the Hindu religion, is obscurantism, and will hold back progress.

Nehru as India’s first prime minister, actively discouraged any governmental involvement or support in the propagation or dissemination of the Hindu  religion. He even frowned on private attempts to do so.  This tone and tenor set by him, has largely been the story for the 70 years since Independence.  

Meanwhile, at least in the course of the last twenty years, seeking scholars from all over the world have come to earn a doctorate in ‘Hindu Studies’ from Oxford University.  

The Irish-Hindu prime-mover of OCHS we met goes by the name Shaunaka Rishi Das, in the manner of some Western devotees of Hinduism who take on a Hindu name without much regard to caste associations. Or perhaps, in all humility, making sure that ‘service’ to humanity, rather than caste pedigree, is the meaning highlighted in the name chosen. 

OCHS has been quietly doing serious work on a non-sectarian and apolitical basis over the years.  This, said Das, has been a strategic decision to successfully skirt any controversy.

Currently, OCHS is about to inaugurate a Bhagwat Puran project, a mammoth undertaking, as the Purana, in the uncompromised Sanskrit original, is in 14,500 verses. The project will be launched, in Chennai between the 6-8^th of January 2017.

It will draw upon many streams, narratives, styles, and traditions, from different parts of ancient India on the Purana.

Another book on the anvil is on the prominent and well-funded  Swami Narayan Sect from Gujarat, that not only boasts of magnificent temples in India, but also in London (Neasden) - visited by British royalty, prime ministers, politicians, tycoons, and many-hued celebrities.

Other works in progress include the Bhakti Movement in the ‘Braj era’, Bengal Vaishnavism, and the confluence of Hindu, Christian and Islamic traditions that pre-date the British Raj.

Although the OCHS is little known in India as of now, The Oxford University Press, and Rutledge, have published a number of its scholarly works on, for example, the Tantra traditions.

There is also a Journal of Hindu Studies, and a programme of Continuing Education on Hinduism online as well.  

Das made the very relevant point that Indian Christianity is 2,000 years old, and peculiarly and distinctly Indian in its cultural moorings, and Indian Islam is not the same at all as that which prevails in parts of West Asia. The Sufi traditions of Indian Islam are quite unique.

OCHS is now working to collaborate with a number of well-established universities in India, who have all been welcoming. Together, it proposes to work on academic explorations of Hinduism so that this work, neglected here for so long, can be extended, into the land of its origin, with both primary and secondary resources developed locally over time.

Das pointed out that faculties of Religious Studies do not exist in Indian  universities as of now, but there is a great need to establish them in a format that will work alongside India’s  ‘secular’  constitutional position.

The manner in which OCHS is strictly non propagandist, sectarian or political, does, in fact, fit the ‘secular’ needs of India.

But unfortunately, in the attempt to be secular, there are no serious Hindu studies being conducted in Indian universities at all, leaving the field to be sometimes distorted via Western and other foreign efforts that do not adhere to the highest standards of academic research.

The best Indian work, and it does exist, is currently being done in  various Ashrams and religious organisations only.

But in the public space, the  raging debate between aggressive Marxism from the socialist, and the Left, versus the Nationalist Right, are both missing the need to speak from the point of view of India’s considerable cultural and philosophical ‘Heritage’.

It is time, said Shaunaka Rishi Das, to plant ‘oak trees’, that no man can expect to see full grown in his lifetime. But still, there is the civilisational need to plant the oak trees anyway.

For: Nationalist Online

(920 words)

September 14^th, 2016

Gautam Mukherjee

The Multi-Million $ Future Of Digital India

The Multi-Billion $ Future Of Digital India

It’s not just because Reliance Jio, the $15 billion investment off the Reliance cash balances, just launched, has made an aggressive pitch towards instant market leadership.

Jio is offering free ‘voice’, while charging for data usage, the real revenue McCoy, but in small chunks, for little money, so it doesn’t pinch.

In the end, Jio won’t take in less in aggregate, but will do so with better lures.  Will it appropriate Modi’s Digital India vision unto itself? Well, the backbone of it, could well be the smartphone, unless someone comes up with a better widget.

It’s clever stuff, this battle for the concept definition itself, but is cellular telecom the lion’s share of it?

Jio will need 80 million subscribers paying at least Rs. 180 per month in usage fees for it to break-even. However, the 60 year old Mukesh Ambani says he’s not going to lose money on Jio for sure.

Others are grudging the flood of interconnectivity they have to provide the new Jio riders, but, as the man says, for how long? It’s illegal to refuse.

The notion that the smartphone will rule the bandwidth is fuelled and reinforced by the Mobile App, the medium through which a lot of digital traffic/eCommerce is growing, rather than via the older laptop/tablet formats.

Even if mobile telecom isn’t synonymous with Digital India, the internet certainly is; and 3G, 4G and 5G speeds, plus fibre-optic cabling, will continue to batter down the dimensions of both time and distance.

Money, they say, never sleeps, but neither does the eCommercial marketplace. It is awake for the insomniac, and never takes a day off.

Jio could well be the blockbuster service provider, given the potential of the Indian telecommunications market. It already boasts over a billion cellphones in use, many of which are voice only.

Older people tend to be technology averse, but India is 65% between the ages of 15 and 35, and this ‘demographic dividend’ will pay out for at least three decades more.

The smartphones today range from the rapidly bundling features and upgrading inexpensive variety, to the more aspirational, not so cheap ones.

People are consuming entertainment, data, advertising, news, views, music, photos, videos, all on their devices.

They are receiving tax returns, banking information, governance, subsidies, payments, surveillance, quite often on the move.

And people are forever upgrading to more, for less. Even the defence of the realm depends on it. Corruption is being curbed via the direct interface between senders and receivers. It cuts out the rent-seeking middlemen.

eCommerce already dominates air/train/travel and hotel/car bookings, offering tighter rates and fares. The entire travel agency business has morphed into eTravel. It now accounts for 70% of the entire caboodle of eCommerce.

eTailing, on the other hand, in India was at $6 billion in 2014, out of the  $16.4 billion of the  online business. This, with 16% of India’s population, largely under 35, online in 2013, according to Forrester Research, quoted By PWC.

Out of this same 16%, only 14% of it, or 28 million people, were online buyers - for books, accessories, electronics, apparel-constituting 80% of what they bought.

But now, apart from the holdall Amazons and Ali Babas joining the desi Flipcarts and Snapdeals,  there are property portals like Magicbricks, and multiplying online shops and showrooms for almost everything.

So what is the size and shape of India’s digital future including the much vaunted smart cities? The kitty was projected to grow to $22 billion by 2015, and five to seven-fold in number of online buyers by 2020. This means at least 200 million online consumers by then.  

If revenue grows at present rates where CAGRs’ are sometimes in the 30% plus area, the monetary value could become $105 billion, or much more by 2020.

If 200 million people were to become online purchasers, perhaps 500 million, rural and urban, would be just browsing online.

Significantly, our online buying penetration is already, in absolute terms, bigger than most countries, barring China, where 50% of its much bigger population, is buying online, if not exclusively, today.

The question is why? It is just faster and more cost-effective, even if it hasn’t realised its full potential yet.

The tentacular Indian post offices are going to join in too, as the COD last mile, and as payment banks.

But can the online model, pimped out and pumped up on outrageous valuations, VC funds, and cash-losing discount-selling, survive; let alone grow, manifold, in just four years?

Yes, because the delivery is potentially fantastic, and just about everything is clambering aboard!

The American Mall, the quintessential late 20^th century place to ‘hang-out’, is dying.  The same thing has been happening in metro India, though people in smaller towns, coming to the experience later, still like the razzle dazzle, the bright lights, the airconditioned swank.

But tier two and three towns are also huge internet users, for hooking up, as much as for selling, or buying.

Premium stand-alone markets in all our metro cities, with the steep rents, are morphing into upmarket restaurant-land. The retail footfalls however, are falling.

The office space market too is becoming a special interest zone- IT, banking/insurance back offices, larger brokerages, consumer sales/ marketing for white goods, vehicles, servicing establishments -need them.

Other high tech 24x 7 establishments, straddling time zones, use them for the concentrated infrastructure.

But many other small businesses no longer do, pointing to their cars, smart phones, laptops, memory sticks, and homes, instead.

Manufacturing, except for yesterday’s labour intensive variety, is also tending towards using fewer people, more machines/robots. Though robotics is a revolution yet to happen substantially in India, the objective of greater manufacturing employment may well mean more skilling and high-tech robotic factories in future, rather than early industrial revolution manual assembly lines.

Institutions - hospitals, schools, museums, universities, government offices, still need large places to congregate. But even here, a lot of what was physical has now gone virtual/digital.

This is inevitable progress, and therefore, a wave to ride, because there is no ducking it. And watch out, this brave new world ups the ante every quarter.

For: Nationalist Online

(1,016 words)

September 11^th, 2016

Gautam Mukherjee

Railway Surge Pricing For The Classes But None For The Masses

Railway Surge-Pricing For High-Standards, Speed, Safety, Cleanliness, Catering

The usual suspects are raising a predictable hue and cry against the Indian Railways surge pricing formula. Restricted, for now, only to its premium fast trains like the Duronto, Rajdhani and Shatabdi, used by the burgeoning middle class.

The idea is the common man, the masses, the very poor, can continue to use the hundreds of slower trains at no extra charge. That the clamour should fly in the face of a basic Marxist tenet, that the rich should be soaked for the benefit of the poor, is doubly inexplicable.

Besides, the Railway Ministry, farmed out to important coalition allies by the UPA, has been  criminally neglected in every way imaginable. This, starting with policy paralysis and rampant populism at the expense of deficits to the balance sheet, and ultimately the tax payer.

But the cavalier attitude also extended to dilapidated track and signalling equipment, ancient rolling-stock, degradation of all facilities, no growth, neglect of safety, illustrated by frequent accidents and loss of life, no innovation. The Indian Railways was on the absolute brink of collapse, when NDA II took over.

Happily, it is at last getting the priority and management it deserves, to restore the 4^th largest railway network in the world, back to health.

Under the latest dynamic formula, the better-off can either book well in advance to be amongst the first 10%, or pay more for the privilege, on a rising scale that goes up to 50% ,as the train fills up, closer to the day. This is exactly like budget-airline pricing, and in keeping with other railway systems elsewhere.

Earlier, urgent across-the-board hikes in passenger fares, freight-rates and tatkal/cancellation rates, after long years of  rate freeze, and blatant disregard of direct costs incurred and indirectly, a huge employee profile, did some good. But it was far from enough.

All these band-aid hikes, and other investments on new track, connectivity and so on, were contemplated by the UPA, but it just didn’t have the determination to implement any of it. But it doesn’t stop it and others who want a free lunch forever, from criticising the moves now.

 The new process kicks in, ‘on an experimental basis, for three months,’ from the 9^th of September 2016, probably to service the ‘festive season’ rush.  

Indian Railway officials are confident it will work through the year, because the premium ‘fast’ trains, still very few in number, are most often overbooked, and never dip below the 90% capacity mark.

The protest against the move comes from socialist intelligentsia blindly subverting its own logic, instantly spawned ‘railway activists’, the politically dwindled but vociferous Left, and some ubiquitous left leaning politicos.  

They accuse the Indian Railways of trying to make up their losses (Rs. 34,000 crores in the passenger segment alone), by taxing premium passengers with high ticket prices. Isn’t that what a good Marxist would do?

Some sputtering middle class objectors, long used to tax payer subsidised fares, claim that they would rather fly on a budget airline for two hours, than pay the Indian Railways up to 50% more for ‘a 16 hour journey’.

But there too, they might have to think again. If they want a cheap seat on a 200 or so seater budget airline aeroplane, they had better book way in advance! So those who expect a general exodus to air travel may well be confronted with rising prices and inadequate space there.

Union Railway Minister Suresh Prabhu has been making strenuous efforts to improve the product. There are new and better designed/appointed coaches, swifter travel times, using new state-of-the-art engines, better passenger safety/security, on board, and on the track. 

There are bio-toilets, quality linen, superior catering, wi-fi. Some 400 stations are being radically upgraded to modern airport standards.  There is on-board ticketing if necessary, streamlined administration, and a personal responsiveness to tweets sent direct to the minister.  

Brand new offerings such as Bullet and Maglev trains are on the way, no doubt at different price points. Taken together, the attempt is to offer a 21^st century array of product to Indian consumers for the first time.

On the freight side too, declining revenues will be corrected once efficient, fast, commodious and most importantly, dedicated freight corridors are operationalised.

 Care is being taken by the Modi government to protect the pockets of those who cannot afford higher prices. Even as it is catering to a very specific and insistent demand for a superior train travelling experience from the burgeoning middle classes.

For: ABP Live

(744 words)

September 9^th,   2016

Gautam Mukherjee

The Multi-Billion Dollar Shape & Size Of Out Digital Tomorrows

The Multi-Billion Dollar Shape & Size Of Our Digital Tomorrows

It’s not just because Reliance Jio, just launched, has made an aggressive pitch towards instant market leadership. It’s offering free ‘voice’, while charging for data usage, the real revenue McCoy, but in small chunks, for little money.

In the end, Jio won’t take in less in aggregate, but will do so with better lures. 

Will it appropriate Modi’s  Digital India vision? Well, the backbone of it, could well be the smartphone.

It’s clever stuff, this battle for the concept definition itself, but is cellular telecom all there is to it?

The notion is fuelled and reinforced by the Mobile App, the medium through which a lot of digital traffic/eCommerce is growing, rather than via the laptop/tablet.

Even if mobile telecom isn’t synonymous with Digital India, the internet certainly is; and 3 G, 4G and 5G speeds, will continue to batter down the dimensions of both time and distance.

Money, they say, never sleeps, but neither does the eCommercial marketplace. It is awake for the insomniac, and never takes a day off.

Jio could well be the blockbuster, given the potential of the Indian telecommunications market. It already boasts over a billion cellphones in use, many of which are voice only. Older people tend to be technology averse.

But other gadgets are inexpensive, and not so cheap, smart phones - consuming entertainment, data, advertising, media, music, photos, videos - receiving tax returns, banking, governance, subsidies, payments, surveillance.

And people are forever upgrading to more, for less, and even the defence of the realm depends on it.

eCommerce already dominates the travel business, morphed into eTravel, and this accounts for 70% of the entire caboodle.

eTailing, on the other hand, in India was at $6 billion, out of the  $16.4 billion of the  online business in 2014.

This, with 16% of India’s population, largely under 35, online in 2013, according to Forrester Research, quoted By PWC.

Out of this, only 14%, or 28 million people, were online buyers - for books, accessories, electronics, apparel-constituting 80% of what they bought.

But now that the Amazons and Ali Babas are joining in, along with the Magicbricks. So what is the size and shape of our digital future?

The kitty was projected to grow to $22 billion by 2015, and five to seven-fold in number of online buyers by 2020. This means 200 million consumers.  

And would the monetary pile be $105 billion, or more? And how many  more people just browsing online- 500 million maybe?

Significantly, our online buying penetration is already, in absolute terms, bigger than most countries, barring China, where 50% of its much bigger population, is buying online, if not exclusively, today.

The question is why? It is just faster and more cost effective, even if it hasn’t realised its full potential yet.

The tentacular Indian post offices are going to join in too, as the COD last mile, and as payment banks.

But can the online model, pimped out and pumped up on outrageous valuations, VC funds, and cash-losing discount-selling, survive, let alone grow, manifold, in just four years? Yes, because the delivery is potentially fantastic, and just about everything else, is clambering aboard!

The American Mall, the quintessential late 20^th century place to ‘hang-out’, is dying.  The same thing has been happening in metro India, though people in smaller towns, coming to the experience later, still like the razzle dazzle, the bright lights, the airconditioned swank.

But tier two and three towns are also huge internet users, for hooking up, as much as for selling, or buying.

Premium stand-alone markets in all our metro cities, with the steep rents, are morphing into upmarket restaurant-land. The retail footfalls however, are falling.

The office space market too is becoming a special interest zone- IT, banking/insurance back offices, larger brokerages, consumer sales/ marketing for white goods, vehicles, servicing establishments -need them.

Other high tech 24x 7 establishments, straddling time zones, use them for the concentrated infrastructure.

But many other small businesses no longer do, pointing to their cars, smart phones, laptops, and homes, instead.

Manufacturing, except for yesterday’s labour intensive variety, is also tending towards using fewer people, more machines/robots. Though robotics is a revolution yet to happen substantially in India.

Institutions - hospitals, schools, museums, universities, government offices, still need large places to congregate. But even here, a lot of what was physical has now gone virtual/digital.

This is, therefore, a wave to ride, because there is no ducking it, and watch out, it ups the ante every quarter.

For: ABP Live

(748 words)

September 7^th, 2016

Gautam Mukherjee

Take-Aways For India From The G20 Summit At Huangzhou

Take-Aways For India From the G 20 Summit At Hangzhou

America may have a better perspective on China than China itself. President Obama called it a ‘middle-income economy,’ with ‘mercantilist’, self-advantaging ideas, that need changing.

This, in an interview with Indo-American journalist Farid Zakaria, on the eve of the G20 summit at Hangzhou. And prior to the next pyramiding at Laos coming up.

This was President Obama’s last scheduled official visit to Asia before the end of his presidency.

Making his words count, Obama intoned his oft repeated mantra, that with increasing power, comes increasing responsibility, and that it was incumbent on a responsible country to respect the rule of international law. It was also necessary for durable international trade, for both sides to gain, and be able to see their relative advantages.

He pointed out that America, (as the paramount military power), did not have to uphold international law, but does so, to keep the world in order and harmony.

This notwithstanding its historical tendency to pre-empt and meddle wherever it sees fit, its dodgy record with ISIS, and indeed the cosiness of the G2 with China at the beginning of the Obama presidency!

In the specific context of the South China Sea, Obama suggested that China cannot flout the decision of the International Court of Justice at the Hague, just because it had found in favour of the much smaller and militarily weaker Philippines.

Obama may well have articulated what is on the mind of other countries in the littoral such as Vietnam, Japan, Taiwan, and India, for that matter. After all, what the US can get away with, is not what China can.

That Modi visited Vietnam to sign a slew of defence, oil, and other pacts just before going to Hangzhou, a visit by an Indian prime minister after 15 years, underlines the shifting emphases.

India has also been increasing its military support of Afghanistan, with tacit US approval, growing into its broader responsibilities, as a counter-weight, that will, more cogently, include the Indian Ocean going forward.

India, in a 35 minute meeting between Prime Minister Modi and President Xi Jinping, reiterated its concerns, now backed by America.

These include the CPEC going through PoK/Gilgit-Baltistan, and Balochistan; India’s NSG bid blocked at Seoul, chronic cross-border terrorism from China’s all-weather friend, the stymied UN declaration  of the JeM chief Masood Azhar as a  wanted terrorist, and China’s own frequent transgressions on the LAC.

Modi blandly said it was important to be sensitive to each-other’s aspirations.

China, on its part, asserted that ‘hard won’ understandings with India needed to be taken forward.

But all this, of course, is standard diplomatese. What is different in the Hangzhou exchange however, is India’s firm stance, its push-back, that has challenged the constant China/Pakistan narrative.

India recently beefed up its security at Ladakh, with over 100 tanks, overruling China’s malafide objections; and likewise in the North East, with airports, road, and rail being made made functional, and Brahmos missiles stationed already.

It has also obliquely put Pakistan/China on notice, both in PoK/Gilgit-Baltistan, asserting it plainly to be Indian territory. And in Balochistan;  openly backing the Balochi bid for independence from Pakistan.  

Both of these  policy initiatives have received enthusiastic responses from the people of the respective regions, and their diaspora abroad. India has also restarted its Balochi service on AIR.  

This meeting has come just after the signing of LEMOA with the US, as part of a burgeoning defence partnership.

The support of the others in the UNSC, including old friend Russia, not only to India’s own UNSC bid, also implies further military support from NATO/ANZACS.

America/Japan renewed their assertion that India is a force for non-proliferation, and needs to be included in the NSG and before the end of the year. China now admits to being ‘cornered’ on this, but it remains to be seen how it plays out.

It has, for example, deployed its stealth bombers in the Tibet theatre, after warning India, prior to the Hangzhou Summit. It has also quickly announced a defence pact of its own with Pakistan, after India’s LEMOA signing.

 In the broader G20, India has raised the issue of international terrorism strongly. It tends to do so at almost every forum it attends now, and a consensus is definitely building towards combating the menace multilaterally.

Similarly, another bugle call that is increasingly resonating everywhere, is on the matter of illicit funds - from corruption, drugs, gun-running, smuggling, extortion, etc. moving around/hiding in tax havens, morphing across international financial systems.

Apart from this money’s unsavoury origins, its mostly tax-evaded configuration, it sometimes is yet another vital adjunct to the bloody business of international terror – its financial lifeline.

And, in the midst of all this and other weighty talk on the global economy, there was no mention of the unrest in the Kashmir Valley at all.

For: Nationalist Online

(800 words)

September 5^th, 2016

Gautam Mukherjee