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IThink's Diary is moving to www.athinkersdiary.wordpress.com w.e.f 1st April 2012.

See you there.

YF - IThink

IDEAS FOR A BETTER TOMORROW – PART 2 – POLITICAL AND ADMINISTRATIVE SYSTEMS

Why do we need government? The answer to this question is far simpler than what you think it is. We need government to remain human. A government, in its simplest form is a bunch of people with a mandate (which has been willingly entrusted, or forcibly acquired) to make and enforce rules which forms the basis of our orderly existence preventing us from cheating, defrauding, murdering or raping whoever comes in our way. Without government there can be no civil society. Government, even if in the form of a dictatorship, is better than either no government or weak government. A government needs to be stronger than the collective forces acting in its opposition (both within society and outside it) to survive and remain effective.

Now the next question which comes to our minds is what differentiates a good government system from a bad one. Well, it depends upon what the subjects being governed perceive to be the best form and nature of governance for them at a given point in time. But there are still a few basic rules using which we can arrive at key elements of governance which are beneficial regardless of form, nature or ideology of the adopted or dictated governance model.

The characteristics of a good governance system are–

· The adopted / dictated governance model preserves the basic rights of individuals being governed helping them to lead a life of dignity.

· It acts to protect the common good of society / state / nation as a whole.

· It acts to preserve the rights of those being governed against any present / future, internal / outside threats to their collective and individual freedom to the best of the collective capacity of the nation / state / society.

· It is always representative of the opinion of those being governed.

· Its acts to improve the quality of life of those whom it governs.

· It constantly reforms/re-engineers itself to suit the changing preferences / structure of society of which it is a subset.

In addition to the characteristics mentioned above, some societies /individuals believe it is the obligation of a good government to also ensure redistribution of wealth, social and class equality, social ownership of production / economic activity etc. However, historical evidences and facts do not support such vagaries of judgment and hence they are excluded from this discussion.

Change in governance therefore happens mainly on account of factors like (a) inability of incumbent government to reform itself (b) Governance model having outlived its utility and thus rendered obsolete and vulnerable to replacement (c) Government initiates actions which either undermines basic rights of individuals or it fails to protect them from internal / external vested interests. The governance fabric in India currently suffers from all three of these deficiencies although at varying degrees. Spend some time with each of the deficiency and you arrive at the conclusion that most problems confronting Indian polity and administrative setup can be traced back to any of the three deficiencies outlined above. Now that you are aware of the context in which the presented ideas are to be reflected upon, let’s move on to check on the ideas themselves –

Idea # 1 – No More Idiots & Goons Please: An overwhelming 80%+ members of the XV Lok Sabha (Lower House of Indian Parliament) are at least graduates. However, relying on qualifications alone can paint a misleading picture about the intellectual capabilities and ethical standards of our elected representatives. For e.g. we get no information on the proportion of graduate Lok sabha members belonging to top colleges, average colleges or bad colleges; we don’t get any information on the performance levels (marks) achieved by these members. We also have no clue as to whether the qualification obtained by the member, from premier college or otherwise, has had any positive impact upon the member’s political career. What we do know is only that 80% of them successfully obtained a graduation degree, period.

A better approach will be to look at the past achievements of Members which clearly establish whether the member is intellectually and morally capable enough of handling the responsibilities which form the part of becoming a Member of Parliament. A standard cutoff or minimum achievement benchmark may be fixed to allow only individuals with demonstrated leadership qualities into politics. Organizational HR policies have built in provisions for preventing idiots and goons from landing into the organization, there is no reason why such a filter should not be implemented in politics. Only people who have achieved excellence in their chosen field across categories like Economics, Agriculture, Social Service, Public Administration, Science and Technology, Media and Arts, Business, Defense, Sports, Education, Health etc. should be allowed to contest elections.

Idea # 2 - Kill Paper: Paper is a valuable tool in the hands of bureaucrats which help them regulate the level of activity or the lack of it in any government set-up. What makes paper invaluable is the fact that it can be made to serve a variety of purposes e.g. it is used as a medium for official communication (notes, memos, letters etc.), as a medium for signaling action (circular, notice, office order etc.), as a proof or evidence (slip, statement, letter etc.) and as medium to keep record of past deliberations (minutes, buff/duplicate copies etc.). Now the basic issue in all this is that creation of such paper based communication, its transmission to the receiving party, its delivery and handling, acknowledgement and action on the contents by the receiver through another chain of paper trail eat up precious departmental time and results in HUGE wastages of time and effort. About 90% of a government department’s time is spent on preparing, modifying, approving, dispatching paper based communications or awaiting responses on them. Not to mention the rather high possibility of papers getting lost or hijacked at any given stage (which makes their use all the more desirable for the bureaucracy) requiring one to invent the wheel afresh.

By killing paper and removing it from the bureaucratic set-up we will not just be liberating entire governmental system from delays but corruption as well. It is therefore important that every government department create necessary computing infrastructure for handling office communication and place centrally accessible tools like IP messengers, staff locator, email etc in the hands of its staff. Departments can then issue a circular stating that henceforth all inter and intra departmental official communications to be conducted over digital medium only. Of course there will be huge challenges in the first 5 years of transition, however given the huge long term benefits to the system likely to result from such implementation; the idea is worth giving a try.

And just in case you are thinking if computerization on such a huge scale might send government budgets shooting up into the sky, take a look at Akash – a $35 tablet developed for the Ministry of HRD by Datawind (UK) and IIT Rajasthan. Resources are never a constraint; it’s just the mind stupid!

Idea # 3 - Project / Performance Tracker: The task of administration becomes much easier if there is ample participation of citizens in the administrative process. Don’t agree? Read further. Citizens have sufficient stake in the developmental works carried out by the government. However, due to absence of ‘easy access’ of relevant information on the development tasks being carried out leave citizens out of the loop. This creates an environment where projects get implemented only on paper as lack of public awareness and lax monitoring standards allow government officials to walk away with developmental funds meant for public structures.

A national portal which has details on all projects of central, state, and local governments currently active in each city/village of the country should be set up. Details like allocation launch date, implementation time line, project owner, local contact, current status etc. will place vital information in the hands of citizens and make them more participative in the administrative process. Such a measure will help citizens track each and every project and report matters relating to slow progress etc to correct authority so that corrective measures are taken up in a timely fashion ensuring that the project itself doesn't get derailed.

The next time you see pot holes on your roads, remember it is there because the money meant for repairing it is being spent on a family holiday in Switzerland by the public engineer since citizens like you had no clue about a project for repair of roads which the government sanctioned last year!! Now go and get your local MP to raise a demand for the portal in the parliament.

Government functions on money collected from citizens in the form of taxes. Citizens therefore have every right to know how, where and how effectively their money is being spent by the government. If the government is not taking sufficient steps to ensure accessibility of citizens to such information it is most likely on account of the fact that it wants to allow criminal elements within and outside government to feast on public money. In fact I feel citizens have every right not to pay taxes to the government until it creates a system for easy access of information on ongoing and planned projects.

Idea # 4 – National List of Corrupt and Lazy Public Servants: It is important to shame the corrupt and lazy government officials especially when life time employment opportunities are available in the government sector. Major news papers in the country can come with a once in a year ranking of 10 Best Government Employees / Minister, 10 Most Lazy Government Employees / Ministers and 10 Most Corrupt Government Employees /Ministers across all major government departments (at National, State and Local level). People may be given choices and asked to participate and mark their choice in an online / offline survey.

Such an exercise will benefit all parties concerned. The system will be benefitted by increased awareness about corrupt officials. Citizens will be benefitted as they will have information on corrupt and lazy officials whom they can ask to be removed by approaching relevant authorities. Newspaper companies will make money from sponsorships, promotional activities, and ad revenue making the whole exercise economically viable.

The above mentioned ideas may not be fully foolproof. In fact in all probability they may just be an attempt at gross over simplification of a complicated administrative problem which no one except IAS (Indian Administrative Service) officers and IAS aspirants are supposed to understand or appreciate. Worse, I may not have even anticipated the problem correctly. I may be all wrong, I don’t discount that possibility.

I don’t know how you like to spend your days, what things you did today before you landed onto this blog or what you plan to do after reading this piece. But speaking about me, I have just helped society in electing good intelligent people, saved a billion or more trees from being felled and turned into paper, saved a trillion or so of tax payers hard earned money from being spent on holidays and jewelry by corrupt government officials and kicked some lazy and corrupt government butt right in the centre. Some people get their daily high imagining that they are doing some really weird stuff, I am one such man. And yes, regarding the Ideas – I don’t give a &%#$ to what you think.

Keep Thinking

YF - IThink

Note: In order to appreciate the value and significance of the ideas being shared, readers need to be fully aware of the nature and extent of issues posing barriers in the development of above sectors. However, since such issues are already well documented in popular media, repeating them here would have only amounted to duplication. Hence no attempt is being made to discuss the background of various issues at length and attention is solely focused on explaining relevant ideas. It has deliberately been assumed that readers are either already exposed to sufficient information on the given issues or do not mind acquiring the same. A search through Wikipedia or Google coupled with an hour of reading might be just adequate to assimilate adequate information on any of the above mentioned sectors of Indian society.

Disclaimer: The ideas presented in this post are personal and have no connection whatsoever with anybody else. The ideas have been shared with the sole and sincere intent of putting original thought process up to the scrutiny of intelligent readers and inviting their reaction and feedback; readers should keep this context in mind and avoid taking ideas outside of their intended context. Last but not the least, there are no copyright or patent or whatever restrictions on readers preventing them from sharing the ideas contained in this post with others. So in case you feel like sharing this post, go ahead and do it.

Here are two good papers on administrative systems written by eminent researchers like Prof. Anil Gupta (IIM Ahmedabad) and Canice Prendergast (University of Chicago), please read them to get a better perspective on certain key aspects of the subject.

Paper1

Paper2

IDEAS FOR A BETTER TOMORROW – PART 1 – SOCIAL JUSTICE, LAW AND ORDER

This is the first in a series of forthcoming posts on how a number of issues confronting India today can be easily tackled through new and innovative ideas. The entire series is divided into 7 parts with each part addressing issues pertaining to a distinct sector. This post covers ideas which attempt to address the current set of problems confronting law and order landscape in India. The remaining 6 posts will deal with other areas spanning diverse range of subjects like Political and Administrative systems, Healthcare and Education, Economic systems, Public Infrastructure, Innovation and Environment. The following list gives the order in which various sectoral issues will be taken up in the next 6 posts –

Part - 2 - Political And Administrative Systems

Part - 3 - Health And Education

Part - 4 - Public Infrastructure And Housing

Part - 5 - Economic Systems

Part - 6 - Research & Development

Part - 7 – Population And Environment

Ideas For a Better Tomorrow – Social Justice, Law and Order.

A number of problems faced by India have their origin in the pre-historic law and order infrastructure which has long outworn its utility. Rampant corruption, climbing crime rates, violation of human rights etc. are to large extent derivative products of our ineffective justice and policing machinery. A society cannot expect to better its prospects without addressing shortcoming on the law and order front. Justice, law and order can be likened to the plumbing and sewerage lines in your house. Efficient plumbing and sewer lines are needed to manage and channelize ‘waste’ and without them the whole house would start ‘stinking’. Similarly, society needs a dedicated law and order infrastructure for managing and ‘correcting’ delinquent elements in society. Without such an infrastructure in place, justice suffers casualty.

The issues with Indian social justice, law and order institutions can broadly be classified into four major blocks – 1) Absurdly high turnaround times in disposing off cases resulting from inability of courts in handling high case volumes 2) No proper methodology for fixing accountability on lower police and judiciary ranks resulting in horrendous performance levels 3) Antiquated laws which have neither been replaced nor refurbished. 4) Process shortcomings like less resources, inadequate technology use and political interference. Any idea aimed at bettering the social justice, law and order in the country will have to address these four issues adequately to be relevant. Let’s check if they do.

Idea # 1 – Private Courts with Independent Jury – Yes, private courts! The idea is to take some routine processes of delivering justice off our real courts and handing them over to the market. Special private enterprises can be given licenses to ‘hear’ certain types of civil cases and criminal cases for offences where the maximum amount in dispute is under a crore or where the imprisonment term applicable is up to 1 year. The private court would be a large processing centre with separate lines for ‘hearing’ different types of cases. Each line can have a number of ‘hearing officers’ who will look into ‘case files prepared by lawyers representing their individual clients. The private court will generate income only from a flat fee payable by disputing parties for getting the case ‘heard’ thus eliminating any chances of collusion and impairment of justice. The hearing officers will sit and discuss the case in detail with lawyers and their clients directly and submit a case report to an at least 10 member Jury made up of eminent people with at least 1 retired judge or lawyer. The Jury will hear the case summary from the hearing officer and take a decision. Jury member may be rotated and new members from civil society be frequently brought into the system to increase civic participation in the whole process. To eliminate the possibility of Jury not turning up, participation in the parallel judicial process be made a mandatory requirement under a proper Act imposing strict penalties on non compliance.

The creation of private courts will not only quicker delivery of verdict on petty cases, it will also de clog our courts and enable them to handle bigger cases more efficiently. Such courts can definitely be thought of as a parallel structure to our Trial Courts/ District Courts.

Idea # 2 – Private ‘Life Security’ / Investigators: Now a lot of you may already be thinking that ‘it’s already there’, but hey! Truth is that it’s not. What's out there is some form of a private ‘detective’ firm. The difference which I am trying to draw between private detectives and private investigators is that the latter will not take up cases of detection for individuals but will conduct investigation for the police for a fee. It can also work to provide Quick Response security blanket to ‘customers’ who may choose to subscribe the service. A hand held security alarm device / Mobile app etc. backed with a network infrastructure which also has Police teams on board can help policemen reduce time to respond to a distress call.  Specialized services for women can be developed whereby private security teams backed up with technology and better support systems ensure fast response times to women callers.

Our policemen suffer from shortage of trained personnel, technology and support systems. This idea describes an added layer to the existing infrastructure (and in no way an alternative) for bettering security infrastructure especially in large cities where there is a tendency of criminals to get away with crimes due to lack of resources with police units.

Although the above two Ideas will address the twin problems of technology deficit and shortage of personnel to result in some improvement in the overall law and order scenario, it cannot in itself lead to complete makeover of Indian law and order landscape. Governments need to take special measures to ensure that the issue of lack of accountability in enforcement agency like police and lower judiciary is soon fixed. Political interference in police departments work also needs to be urgently addressed vide a proper legislation making police accountable to either the judiciary or an independent regulator.

Note: In order to appreciate the value and significance of the ideas being shared, readers need to be fully aware of the nature and extent of issues posing barriers in the development of above sectors. However, since such issues are already well documented in popular media, repeating them here would have only amounted to duplication. Hence no attempt is being made to discuss the background of various issues at length and attention is solely focused on explaining relevant ideas. It has deliberately been assumed that readers are either already exposed to sufficient information on the given issues or do not mind acquiring the same. A search through Wikipedia or Google coupled with an hour of reading might be just adequate to assimilate adequate information on any of the above mentioned sectors of Indian economy.

Disclaimer: The ideas presented in this post are personal and have no connection whatsoever with anybody else. The ideas have been shared with the sole and sincere intent of putting original thought process up to the scrutiny of intelligent readers and inviting their reaction and feedback; readers should keep this context in mind and avoid taking ideas outside of their intended context. Last but not the least, there are no copyright or patent or whatever restrictions on readers preventing them from sharing the ideas contained in this post with others. So in case you feel like sharing this post, go ahead and do it.

YF - IThink

MARKET DISRUPTION 2.0 : NOKIA 808 PURE VIEW

 Mobile phone history doesn’t need to rely on Christ acting as a reference point in time. It relies on Apple. With Apple as reference, history of mobile phones can be broadly described across two very distinct yet connected dimensions - ‘Before Apple(BA)’ and ‘After Apple(AA)’.

Before Apple Inc. launched the i-Phone in 2007, mobile industry was an entirely different ecosystem from the one prevailing today. There were at least a hundred form designs to choose from, a thousand different permutations and combinations of various specifications on offer, there were mobile phones with themed form factor like dedicated design for gaming (Nokia NGage), Music (Sony Walkman), Photography (Nokia N90) Business (Communicator, Blackberry) etc. Some entirely revolutionary / weird designs like the Nokia 7380 “Lipstick” phone also saw themselves landing on retail store shelves.  Nokia was the preferred player in the mass market mobile and smart phone categories while Motorola, LG and Samsung forming the Me-Toos. Blackberry solely serviced the ‘niche segment’ of Blackberry Boys - The Corporate Class. Everyone knew what their strength and weaknesses were and every player and every phone was different from another. Specialization was the name of the game with Nokia specializing in optics and user interface, Motorola in design (remember Razr?), Samsung and LG specialized in being good copy cats and Blackberry specialized in enterprise level solutions.

Enter Apple. The launch of I-Phone in 2007 not only left the customers gasping for breath but the mobile phone industry as well. Overnight, the industry ecosystem changed from one based on ‘difference & specialization’ to one based on ‘similarity or resemblance to I-Phone’. Marketing rules were re-written and product managers of every major mobile phone manufacturer geared up to produce his/her version of the I-phone. I-Phone soon became a disease, an epidemic which spread fast and corrupted the reasoning faculties of product managers of “all” mobile manufacturing companies by its sheer awesomeness. It was a well thought of, well researched, well equipped, well designed and well marketed, rock solid product. It is not always that you come across a product which is desired not just by the customer but the ‘entire’ competition. Paradigm shifts in marketplace are a rare phenomenon, but it wouldn’t be wrong to say that I-Phone brought about a paradigm shift in the ecosystem for marketing of mobile phones.

Post I-Phone every major player scrambled their resources together to bring their own I-Phones alive. Google sensing this opportunity developed Android which filled up part of the gap that needed to be filled towards achieving I-Phone like products. Within years of I-Phone launch every player launched products which in one way or the other resembled the I-Phone. Slowly but surely varied design forms of the past started to disappear. The marketplace saw an unparalleled convergence of form factors towards a single form factor – the ‘all screen and no buttons’ candy bar design made famous by the I-Phone.

Now, you must be wondering why I am sharing all this with you. Well, the blogosphere for the last 2-3 weeks has been abuzz with excitement about Nokia’s announcement of Nokia 808 Pureview, a mobile phone sporting a 41 megapixel camera. For those who are not initiated to photography, it is enough to know that even a high end, full frame digital SLR camera like the the Canon 1D Mark IV or the Nikon D 3X/S have not breached the 25 megapixels mark. So how exactly did Nokia pull this feat off and how it will impact the market for mobile devices? To understand this lets proceed further.

I have recently acquired a taste for digital photography and from what I have learnt so far, digital SLR manufacturers do not aim for high megapixels but for the ‘right balance’ of key elements like details, sensitivity, and magnification. Each element brings with it a set of problems which have to be tackled through separate interventions. High end SLR cameras try to stretch each element to their optimal level (available with present technology levels) and have checks and balances in place for tackling the problem areas associated with enhanced state of such elements. Lower end cameras make sacrifices on all fronts so that they minimize on the problems. For e.g. a high end SLR camera packs the ability to shoot with 24MP sensor at high sensitivity (needed for low light performance). Delivering this is not easy and require larger sensor and processing power hence such cameras cost anywhere between $1000 -  $6000. SLRs on the lower end of the price spectrum are more likely to pack a 12 or 14 or perhaps 16 MP sensors with fairly ‘OK’ low light performance. Hence they need sensors smaller than those on high end bodies. All this brings us to one question – What is megapixel, and why is it important – if at all?

A pixel is the smallest unit in which a picture can be represented. As per Wikipedia - A megapixel (MP or Mpx) is one million pixels, and is a term used not only for the number of pixels in an image, but to express the number of image sensor elements of digital cameras or the number of display elements of digital displays. For example, a camera that makes a 2048 × 1536 pixel image typically uses a few extra rows and columns of sensor elements and is commonly said to have "3.2 megapixels" or "3.3 megapixels", depending on whether the number reported is the "effective" or the "total" pixel count (as opposed to the 2048 × 1536 = 3,145,728 finished image pixels). Simply speaking it’s a number signifying the size of your image or the amount of ‘details’ captured or in other words ‘resolution’.

Even the highest end of mobile phones shoots pictures at a maximum resolution of 5-8 MPs. This is because due to their small form factor they have to limit the size of the sensor which sits on the back of the phone. Tiny sensors on mobile phone cameras limit the amount of details which can be loaded on them without showing distortions in images in the form of ‘noise’. So exactly how does Nokia 808 Pureview achieve a 41 MP resolution?

Simple, it doesn’t. Nokia has pulled off a very clever act here. Everyone of us have witnessed the limitations of digital zoom facility available in cameras/phones. Whenever we try to zoom a picture taken through our phone cameras we invariably see a loss of detail. This is because your phone captured the image at 5 MP and delivered you the image with 5 MP of details. Now, what Nokia Pureview does is it captures 41MP of image data but delivers only 5 MP of details. Don’t get upset, what this means is you get an ability to get 3x or 4x zoom in your phone camera and that too without losing precious details!!! And to achieve this all Nokia has had to do is to pack a sensor slightly larger than your average point and shoot camera to bring about extraordinary image rendering capability through a mobile phone.

At last we have something which is truly innovative and does not follow what I-Phone has achieved in any manner. But in all probability Nokia is going to screw this great opportunity pretty badly. The 808 Pureview design released by Nokia already shows the biggest flaw – unimaginative design, it packs an oversized camera atop an I-Phone like device – sic. What a waste!!!

Its time somebody started thinking.

 YF - IThink

UNION BUDGET 2012-13 ­– WHAT TO EXPECT FROM THE FM?

Hi Readers,

With the fate of about 14% of the 6839 candidates contesting for Uttar Pradesh (UP) legislative assembly seats still waiting to be sealed (the last phase of polling will be on 3^rd March 2011), for now, print and television media in the country have enough fodder coming their way to bother about any other story with any degree of seriousness (our “Almighty Goswami” is too busy dissecting political equations panning out in UP). This gives me valuable head start over ‘economic pundits’ and experts in coming out with a list of budget expectations and prophecies. Regular readers already know that although I don’t quite believe in the whole business of making predictions, I do give in to its temptation every now and then.

Before we actually have a look at the list of budget expectations/predictions, let’s check out a few facts about the economy and; receipts and expenditure position of the government. This is particularly important because unlike experts I have to put my entire line of reasoning up for scrutiny by intelligent readers to actually make any sense. Some readers of non-Indian origin may find this post a bit too India specific, true but you can still look at it as a case study in macroeconomic analysis. So, here I go.

INDIAN ECONOMY AS ON Q2/Q3 FY 2011-12

Overall growth in GDP came down from 8.4% in Q2 2010-11 to 6.9% in Q2 2011-12.

Growth in Manufacturing sector was worst affected, it came down from 9.1% in Q1 2010-11 to 3.2% in Q2 2011-12.

Headline inflation came down from ~9-10% levels in October 2011 to ~6.5% in February 2012, the level is still on the higher side and unacceptable.

Total FII inflows into the country came down substantially from US$ 39473.9 million in 2010 to only US$ 4688.11 million in the period up to January – October 2011.

High volatility in the FOREX sector, Rupee depreciated sharply against the US Dollar during Q3 2011-12.

On the Balance of Payments (BOP) front Current Account Deficit improved marginally to 2.6 as on September 2011 as compared with 2.8 in FY 2010-11. However, there is some concern about the higher level of CAD being financed by capital inflows. In a normal situation, such modest levels of higher CAD, financed by capital flows is sustainable. But, during any global economic crisis and in case of unexpected reversal of capital flows, BOP may come under stress.

Both Revenue and Fiscal deficit have shown massive increase over previous year’s levels. While the increase was expected and budgeted in the BE for FY 2011-12, the actual increase during the fiscal could surpass budgeted estimates. Even the mid year figures are way above the FRBM (Fiscal Responsibility and Budget Management) targets of 45%.

Now, that we know exactly where the economy and Government’s, finances are headed let’s try to arrive at key objectives (macro level) which the government may want to achieve with the Budget –

Ensure that the growth momentum doesn’t derail.

Ensure FRBM targets are met.

Measures to hedge risk on BOP front.

Based upon the above objectives of the Government we can expect the following from Finance Ministers Budget speech on 16^th March 2012 –

The FM had hinted in his speech for Budget FY 2011-12 that Direct Tax Code will be brought into existence on 1^st April 2012. Although DTC may not be tabled in the budget session in its entirety, some key provisions of the DTC are likely to find their way into the FMs speech.

Goods and Services Tax (GST) which is another big ticket reform which has reported to be delayed yet again (it was earlier expected to be rolled out by April 2011), due to problems faced by the Government in bringing consensus among states. I don’t think GST anyways fits into the immediate plans of the Government (it benefits businesses by way of simplification of sales tax structure) so it can be ruled out completely.

Subsidies on petroleum products will be removed completely for some products or at least brought down significantly (the budget exercise was rescheduled to a later date for a reason). Remember, it has FRBM and growth targets!

No major populist, social sector scheme will be announced in the budget. However, existing schemes will be continued.

Aviation sector may receive a support package in the form of tax sops and grants, but no major game changing policy expected as most of the taxes which hurt the sector are levied by States.

While some clarifications may be given by the government on 100% FDI in single brand retail, expect the FM to be silent on the issue of FDI in multi brand retail.

More services likely to be brought into tax net in the run up to GST implementation.

Tax benefits to export oriented units may be round the corner.

Announcement of big ticket infrastructure projects, higher outlay for existing infrastructure projects like highways etc likely.

From the looks of it, it seems that no major change in status quo will be attempted by the FM in this budget except that subsidy on some petroleum products like LPG and Kerosene are definitely on their way out. Major reforms like DTC and GST could have been implemented but administrative delays and possible resistance by pressure groups have prevented that from happening.

That’s all from me for now. Till our next encounter – Keep Thinking.

YF - IThink

TEN ‘NEXT BIG THINGS’ FOR THIS DECADE

DIGITAL IMAGING INDUSTRY – You just have to look at the growth in the number of DSLRs (Digital Single Lens Reflex Camera) and P&S (Point and Shoot) devices to understand that DSLRs are the next big thing. The DSLR market grew 69% YOY as of March 2011. In the point-and-shoot (P&S) category, Sony was the market leader with market share of 31% in terms of unit sales (shipments) during 4Q CY2010, followed by Nikon with 24%, Kodak 13% and Canon 12%. In the Digital Single Lens Reflex (DSLR) camera category, Nikon was the leader with a 51% share in terms of unit shipments during 4Q CY2010, followed by Canon with a 46% share. Mobile phones today are giving our youth a taste of what digital imaging is really capable of and hence more and more youth are likely to gradate to DSLRs and High Zoom P&S devices. Need proof? I already have invested in a Nikon DSLR and so have a dozen of my acquaintances. If you have surplus cash invest in the stocks of digital imaging companies like Nikon or Canon or even Adobe (Photoshop is the best image editing software). In five years time you will be heavily rewarded.

NEW AGE SERVICES - Just in case you haven’t noticed, chances are that your barber has already matched or even exceeded your own monthly income. The proliferation of “Salons” is taking over the country by a storm. There used to be a time when getting a hair do only involved visiting a “UMT” (Under Mango Tree, an euphemism for a road side barber shop) barber and getting ones hair done for as little as Rs.5. But gone are those days. Today, a Salon charges anything from Rs.100 – Rs.500 for a simple haircut. If you are one of those Metro sexual types and willing to shell out money on personal grooming, a visit to a Salon can set you back by Rs.5,000 – 10,000 (facial, brows, pedicure, manicure etc.) on average depending upon the type of Salon and location. The industry is growing at a rapid pace and many organized players are jumping to establish themselves. If you have money, invest in one of such chains or better start your own…it will certainly pay off in the long run. You can also look at setting up training institutes for training students on a range of vocational occupations which have become popular due to the rapidly growing Indian economy.

HOUSING – This one’s going to be big, far bigger than anything your imagination can ever fully capture. To look for explanations, one doesn’t have to look beyond the large population with growing purchasing power, limited “non-agriculture” land bank, lack of decent housing spaces in urban areas, gross inadequacy in utilization of available urban land bank by Urban Development Agencies. Put all this together and you have a sector waiting to breach the inflexion point. Take my word, in India, housing is one sector where you cannot go wrong with your investment, irrespective of how stupid your decision actually was.

LOW INCOME HOUSING – There is vibrant market in urban India as evidenced by housing finance growing at a CAGR of over 36% in the past decade. But the smallest flats being built are around 500 sqft and cost over Rs.5 Lacs (USD 10,000). A household earning Rs.10,000 or 12,0000 per month can just afford such housing if they get adequate financing. Although Central Government has taken right steps in the form of Interest Subvention Scheme for Housing the Urban Poor (ISHUP) for providing interest subsidy to deserving beneficiaries, lending to low income groups hasn’t really picked up so far mainly due to inability of banks in financing these borrowers. The coming years will see new “Non MFC (Micro Finance Corp) models” developed within the financial services category to address the need for low income housing. The opportunity is too big for anybody to ignore it for a long time. After all it’s a question of at least $ 250 billion in opportunity waiting to be tapped.

CROWD SOURCED BLOGS – It’s already happening at the upper end of the market spectrum. Bloggers are beginning to realize that the universe of topics that people usually like and associate with are far too greater for them to address individually, hence the need for collaboration. I have come across at least 20 blogs on economics and psychology which have more than 10-15 contributors each. The momentum is likely to gather more steam in the coming years as more and more bloggers realize and accept their limitations thus opening up their blog to other contributors as well. Such collaborative framework in blogosphere will make it more formidable as compared to traditional media and information sources like magazines etc.

SME CONSULTING BUSINESS – SME (Small and Medium Enterprises) businesses in India are run either by first generation promoters or their family members who have no clue as to how to take the business to the next level. The result is that most SMEs are unable to make the cut in the market and forever remain dependent upon Government for protectionist favors to ensure survival. Although, consultancy culture in India is yet to take off in a big way, whenever it does it will be a big thing, too big to only have M/s McKinsey and Co. and M/s Boston Consulting Group as sole players. Needless to say there is a need and space for a number of category specific indigenous consultancy players to enter the segment.

ONLINE MARKETING – Flipkart has finally brought true online marketing to India. Although the company is yet to start making money, its business model and success story have managed to get more than just passing glances. More businesses in india will realize the benefit of taking their brick and mortar business online through a viable delivery mechanism. After a decade of achieving mass popularity, “Online” will become a relevant word for Indian businesses and customers alike.

MAIRRAGE & ‘DIVORCE’ CONSULTANTS – People are getting married, well you can argue that they have always been. But what’s different this time is the sheer numbers (Delhi/NCR has close to 1 Lac couples getting married on a single day during mairrage season). Many people like me are lucky enough to find their partners themselves, but most, a whooping 70-80% to be precise, are not. These individuals rely on the judgment of their parents to find them a suitable groom/bride, who in turn rely on a number of traditional sources like newspapers, community magazines, marriage bureaus etc. But given the overwhelming failure rate of marriages formed through the help of these channels, credibility of such channels have taken a big hit. There is a need for a professional entity which handles not only the task of matchmaking but the entire ‘chain’ i.e. right from “due diligence / KYC and particulars verification of candidates” to Marriage Party Arrangement services to Divorce services. The idea behind the suggestion is that with more services on offer and bigger size the entity will enjoy more credibility and need I say more economies of scale.

TRAVEL AGENCIES – Indians have started visiting foreign destinations like never before. Even travel within the country has grown substantially. The last year saw about 900 million domestic tourists and 10 million international tourists in India. India earned about $ 17,000 Million in revenue from ‘Fee from Tourism (Foreign tourists spending in India)’. About 15 Million Indians left port last year for various foreign destinations. The numbers are huge, and they become even more so when you consider the fact that the services rendered by most travel agencies operating in the country can be best described as “Misleading”. There is a huge scope for a few innovative players in this category.

ORGANISED DOMESTIC HELP SERVICES – I may plead ignorance but my wife knows the importance of a good domestic help. Despite being in a city where domestic helps are both hard to come by and highly priced, we have changed 3 maids in the past one and half years. We had no other option, they weren’t just good enough. Ok we were not expecting any professional attitude or cultured behavior but little things like “not stealing food items from the kitchen” and “non-absenteeism” are definitely expected if one if shelling out hard cash for the service. There is also these great concerns about security, almost none of the domestic helps working in our area are registered with any Police Station, Organization which accredits them for providing their services and keeps record of their whereabouts. It’s not uncommon to hear every other day about a certain robbery or murder being committed by a domestic help. Organized domestic help services will be hugely successful in the Metro cities even if they are priced on the higher side. This is a huge market opportunity which marketers ought to tap soon.

YF - IThink

BUT THEY DIDN’T VOTE

They are adorable and they are torch bearers of our future. They dictate the marketing strategies of global marketers. Advertisement jingles are written exalting them. Global research firms have termed them ‘Demographic Dividend’. They form a set of “aware” citizens who stand at the forefront of the fight against corruption, injustice…etc. They make their presence felt, be it appreciating Kolavari D or lambasting political anergy. But whenever it comes to taking control of a situation, showing leadership and really making a difference – they are too busy decorating their Facebook and Twitter profiles. Ladies and Gentleman, Mumbai BMC (BrihanMumbai Municipal Corporation) elections had a voter turnout of mere 44 percent. For a city which boasts the largest set of young and affluent people in the world, the statistic is an eye-opener.

It’s laughable; exactly what is the Facebook generation up to? People who spend hours on social networking sites criticizing every step of political action (or inaction) have deserted democracy in its hour of need. Today, they stand naked, exposed before us all. They are no better and in fact worse than the worst politician the country has ever seen. To their credit, the politicians did their bit by participating in the election process; our young people weren’t so gracious to do their bit. Perhaps they were too busy with their Facebook profiles, Demographic dividend my foot! They are just a bunch of worthless opportunists who can do no good, that’s what they really are.

I think it’s time they stopped their indecent, immoral and imprudent remarks about politicians and politics driven corruption on their respective social networking pages. Their lazy, meritless and meaningless rhetoric is going to do us no good. We are better off in a world without such nonsense. God help them. (I will be happy if he doesn’t).

PLEASE….Keep thinking and ACT whenever you are required to.

YF -  IThink