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Agri-logistics management is much easier with technology. The Sohan Lal Commodity Management’s business model could play a crucial role in resolving India’s food grain storage problems. The country incurs losses to the tune of Rs 80,000 crores each year due to storage problems alone.
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Indian food regulator may end up with egg of its face when it finds that the product it has banned has been given OK nod in much evolved and advanced regulatory systems, says Joe C Mathew If there has been one very positive outcome of the Maggi instant noodle ban, it was the revelation that India lacks adequate number of food testing laboratories and, the ones that are functional, need serious quality upgradation. Extensive media coverage highlighted the gaps that exist, and the on-going government efforts to strengthen India’s food regulatory system. However, very few took a critical view on how respective governments over the last decade or so, spoiled the country’s chance to develop a quality food and drug testing and regulatory system in the country as the problem with India’s food and drug regulatory system was known for umpteen number of years now. The most ambitious attempt to overhaul the country’s food and drug testing and regulatory capabilities happened in 2003, when the central government launched a World Bank funded Food and Drugs Capacity building project with exactly the same vision. To be fair, the archaic Prevention of Food Adulteration (PFA) Act got repealed during this time, drug laws got amended, and the FDA Bhawan, which houses the Food Safety and Standards Authority of India (FSSAI) and the Central Drug Standard Control Organisation (CDSCO) was built. Modernisation of testing laboratories and augmentation of regulatory checks also happened during this period. The project got completed in 2009. The World Bank must have assessed it to be a moderately unsatisfactory project, but the Magi episode points out that it was worse. Joe C MathewThe government’s failed attempt to link all state drug regulatory authorities through a common e-platform even after it was first mooted in 2003 is perhaps a glaring example of how implementation fails to achieve the desired effect. The first issue was the delay in getting the States shift to a single digital platform. The compatibility issues created problems with real time data transfer. Data upgradation - be it number of samples picked up, new products approved, or prosecutions taken – are all mission imperfect even to this day. What is consistent is the promise to deliver. If the latest reports are to be trusted, the government is once again trying to revamp the drug and food regulatory system and increasing its manpower multiple folds. New divisions to regulate emerging sectors such as medical devices are also in the works. It would be worth looking at the operational problems highlighted by the World Bank in 2009 while embarking upon new programmes. To quote the report: “The food and drugs sector being in the Concurrent List of the Indian Constitution, both the Centre and the States have independent authority to pass legislations. This division of responsibilities between the Centre and the States in legislation and implementation of food and drug regulation in a large country like India with varied state capacities and commitment was a major challenge throughout the project”. The World Bank analysis makes it further clear. “The Concurrent nature of the food and drugs sector was one factor which led to a lack of interest and commitment in some states to a project mandated by the centre. States were particularly slow in addressing human resource issues which were at the heart of achieving effective oversight and regulation in the food and drug sectors”. It also points out that during implementation it turned out that the design was too ambitious in assuming that the complexity of multiple Center-State interactions can be managed centrally and advises that with the benefit of hindsight, one might have chosen a more focused design with only a few States selected for capacity building along with the Center and more decentralized implementation. Since the problems that turned the World Bank project “moderately unsatisfactory” remain the same, it would be prudent for the government to realise that mere efforts and shifting deadlines will not improve the country’s food and drug regulatory infrastructure. More work has to be done, otherwise, Indian food regulator may end up with egg of its face when it finds that the product it has banned has been given OK nod in much evolved and advanced regulatory systems in other parts of the world.
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These days, the technology that has made Internet possible reminds me of the Coca-Cola bottle that was thrown out of an airplane in the South African movie "Gods Must Be Crazy". Joe C MathewWell, the story goes like this: The empty bottle, which fell unbroken, opened up a world of possibilities to the tribal people who were living a contented life somewhere in the Kalahari Desert. They had never seen a bottle before. So, the foreign element, which came from the skies were looked at with suspicion to begin with, considered as God sent later, and became an essential part of anything and everything that they did - a toy, a musical instrument, a craft tool and whatnot, - in the days that followed. My first encounter with this technological "Coke bottle" happened some 20 years ago, when my neighbour aunt, who had a son based out of the United States of America, shared the thrill and bewilderment of sending "emails" at the click of a button and getting "instant" replies. Within no time, live online chats - written, voice and finally video- made emails look snail mails to her. Ever since the network of computer systems connected us across the world, the "God sent" technology has remained ubiquitous, tightening its grip, utility and control over our lives, thoughts and actions each passing day. From a society that got introduced to the utility of Internet, we are fast becoming an Internet society. And as the Kalahari tribe did in the movie, we are keen finding new uses for the technology every moment. The BJP government led by Prime Minister Narendra Modi rode to power on the back of technology. The ruling coalition intends to stay on power by introducing Internet-based systems to change the way Indian citizens live and work. Internet is the key to the government's electronic delivery of services like e-health, e-education, e-mandis, e-taxes, e-courts, e-jails and e-prosecution. The government's flagship programme Digital India talks about technology for farming, technology for security, financial inclusion, trade promotion, etc. Let me quote the official projection: By 2019, the government wants broadband connectivity in 250,000 villages, universal phone connectivity, 400,000 public Internet access points and 250,000 wi-fi enabled schools. It wants at least 10 crore jobs to be created through such technological interventions by this time and turn India as a leader in information technology use in services - health, education, banking, and wants its citizens to be digitally empowered through public cloud and internet access. In "Gods must be Crazy", its director Jamie Uys, wraps up the entire enthusiasm for the newly-discovered tool of universal utility in the initial few scenes itself. The movie begins to take a different path as the tribal leader Xi decides to get rid of the "Coke bottle", in spite of all its virtues, as it spoils the tranquillity that prevailed in his village. Like Uys' Coke bottle, Internet technology has also started creating troubles for our "tribal" chieftains. Terrorism has attained new dimensions during the Internet era. The Wikileaks episode has created headaches to national leaders in several countries. If Lalit Modi's tweets are giving sleepless nights to the political elite in India, call it a "Coke bottle" effect. The advantage, connectivity brings in, however, far exceeds, its problems, at least, for now. That's perhaps the only reason why I have just downloaded an android App to facilitate my movement in Nashik, the temple town, where hundreds of pilgrims are gathering who seek the God's blessings by being part of the ongoing Kumbh Mela. Whether technology is going to be the manna for all our governance bottlenecks or not, it's going to be a technology enabled holy dip for me this time, for sure.
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Ashish Nanda, director of Indian Institute of Management, Ahmedabad (IIM-A), believes autonomy with accountability is paramount to building professional institutions of global excellence. In an exclusive interaction with BW Businessworld, Nanda shared his views on skill development, management education and the country’s legal system. Before joining IIM-A in 2013, Nanda was Robert Braucher Professor of Practice at Harvard Law School, and, before that, a faculty member of Harvard Business School. Excerpts:On Skill Development:The debate about skill development should focus on creation of opportunities, not just jobs. To benefit from our demographic dividend, we must build the capabilities of India’s youngsters as they enter employable age so that they seek and leverage opportunities: opportunities to work in skilled jobs, but also opportunities to entrepreneurially develop new businesses and create jobs. And for that, our post-secondary education system needs to change on three fronts. One, undergraduate education should have an emphasis on liberal arts, so that the students develop broader perspectives and sample various subjects to choose the ones that they relate to the most. Two, professional education should be close to practice so that graduates of professional schools have a good understanding of the real world when they enter it. Three, programmes should be offered in short bursts for practising professionals, for education is now a life-long activity and, to remain on the cutting edge and to renew themselves, executives are now increasingly going back to school throughout their work lives.On New IIMs:There is no doubt that we do not have the capacity to cater to the huge demand for quality management education in the country. For instance, less than one per cent of our applicants find their way to IIM-Ahmedabad every year. This is not to say that others are not qualified enough to receive world-class management education. However, we need to think carefully whether setting up of more IIMs will solve this problem. Perhaps the easiest part of institution building is development of physical infrastructure. But how do you ensure quality faculty? How do you ensure the best education for students? Developing a culture of academic excellence takes time. To build capacity, perhaps we should follow a mix of building some new IIMs and also strengthening the existing ones. Leading IIMs that have the software of academic excellence can grow hardware of additional physical capacity, and they can also mentor the new institutions that are being set up. We are already doing it in the case of the new IIM coming up in Nagpur.On IIM (Bill) 2015:It is in a draft form and the ministry is in the process of getting stakeholder comments at the moment. I hope the Bill, in its final form, empowers IIMs rather than centralising control. Autonomy ensures efficiency, effectiveness, and innovation. And autonomy goes hand-in-hand with accountability. If IIM administrations are responsible for decisions, they should be held accountable for results as well. Centralisation is not the answer. It disempowers and reduces accountability.On India’s Legal Services Industry:There is a joke in international legal circles. They say that the forecast about the Indian legal services has been consistent for over a decade now: that the industry will open up to foreign competition within the next three years. The fact remains that by not allowing international law firms to practice in India, we are losing out. Several companies with Indian operations, including Indian multinationals, are choosing locations such as Singapore to execute cross-border deals or to conduct arbitrations because they prefer to work with the best of global legal talent in an efficient legal milieu. So, we are losing business. Opening up the Indian legal system to foreign players will not only bring some of that business back onshore, but will also offer jobs and career opportunities for young Indian lawyers. Increased competition motivates indigenous law firms to improve their quality. - Joe C Mathewjoe@businessworld.com(This story was published in BW | Businessworld Issue Dated 10-08-2015)
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Most pharmaceutical companies in India – both multinationals and domestic – are still shying away from leveraging the huge opportunities that exist on the digital platforms, says a study conducted by D Yellow Elephant, a digital marketing advisory. The "Indian Pharma Digital Health Report 2015", released by the agency analyzes 40 pharmaceutical companies in India across 10 key digital parameters, ranging across websites, apps and 10 social media platforms, namely Twitter, Facebook, LinkedIn, YouTube, Google+, Instagram, Pinterest, Vine, Slideshare and Blogger. The report has segregated all firms in key buckets of Digital Primes, Aspirants and Onlookers basis analyzes of presence, engagement, response, and consumer followership among few key parameters. "The pharmaceutical sector in India, whether Indian companies or global players, are atleast 5-7 years lagging behind their global counterparts on digital engagement", said Aman Gupta, managing director of D Yellow Elephant. "If compared to other sectors, the time lag could go upto 10 years and above", he adds. The survey also revealed that some of these companies, though lagging behind in India, are seen proactive in using digital platforms to engage with healthcare professionals (HCPs) and patients abroad. "The report is an attempt to help the pharmaceutical sector entities in India catch up on the time gap, identify the loopholes and help them incorporate digital medium in part of the decision making process", Gupta states. Highlighting the key findings of the report, Chandni Dalal, Lead, Digital Strategy at D Yellow Elephant said, "Out of 40 companies surveyed, only 9 companies managed a score above 50 over a scale of 100 points. This shows the reluctance to effectively engage with their stakeholders on the digital platform." "The report is an attempt to underline the opportunities that exist and draw a roadmap for these pharmaceutical companies in India to engage better with the HCPs, and the patient community," she said, that with the advent of smartphones across geographies, it is high time that the potential is realized. "What better way than effectively use these platforms to bridge the gap to healthcare access in a country like ours," she explained. According to Dalal, "Some of the results have been predictive with LinkedIn emerging as the most popular social media platform, with 95 per cent presence; but only about 14 companies showing an active engagement. For their part, pharmaceutical companies in India are venturing on the digital highway, but basic building blocks like having an India specific website is still amiss.” Only 30 per cent companies have an India specific website. In the age of quantified self, Indian patients and HCPs are exhibiting an expectations market, with the advent of digital health, big data and dialogue exchange; Indian pharma has long stayed behind the curve on social media.
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Be it the on-going debate on land acquisition, or the formation of National Institution for Transforming India (NITI) Aayog, there is no trace of “co-operation” among states, points out Joe C MathewThe Constitution of India does not mention the term ‘federal’. Though, it contains dozens of provisions that encourage and mandate federalism in the country. The Constitution provides the central and state governments clearly demarcated jurisdictions and powers. There is a Union list, a Concurrent list, and a State list that prescribe the power of the centre, the areas where both central and state nod are required, and finally, the areas that are in the exclusive domain of the state. Joe C MathewIf defence and international affairs are the responsibilities of the central government, law, trade, economic and social planning etc. come under the concurrent list. Land, water and agriculture - the most discussed topics of the day, are state subjects. In other words, whatever legislation the central government frames, it becomes operational only after the states ratify it by legislating corresponding state laws. You may argue that the central government has powers to override the State, but even at its worst, it remains quasi-federal, and does not go out of the broader spirit of federalism, which the Constitution provides. Seen from this context, there is nothing path breaking about the central government’s plan to ask states to legislate its own land acquisition laws. It is very much within the federal spirit, which the Constitution has always stood for. As we know, the central government does not have sufficient numbers in the Parliament to pass The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015. It has been in force through Ordinances for some time, and cannot be prolonged for ever. The only practical option, it seems, is to advise the states to go ahead and enact laws that are modeled on the centre’s proposal. To call it federalism is ok, to call it pragmatism would have been ideal, but to project it as a great piece of ‘cooperative federalism’, the new mantra of the government, is stretching it too far. Be it the on-going debate on land acquisition, or the formation of National Institution for Transforming India (NITI) Aayog, there is no trace of “co-operation” among states. It is more of co-operation among same political parties, and competition between political rivals. The central government could have easily passed the land acquisition bill if there was co-operation cutting across political parties, among the members of the Parliament. Similarly, NITI Aayog meeting would not have witnessed the boycott of all chief ministers from Congress-led government if “cooperative federalism” prevailed. In fact, Modi government’s publicly stated approach, at least when it comes to attracting investments, is to focus more on competition, than on co-operation. Its plan to rank the States on the basis of “ease of doing business”, and its effort to encourage states to woo investors to their respective geographies are all meant to promote competition among states. The idea is not to say that competition is wrong, but to hint that it is competition, and not cooperation, that is the flavour of the season. If curtains fall on the land acquisition drama with states competing to enact legislations without a model central law, it will be competitive federalism at its best.
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S.C. Ralhan, a machine tool manufacturer from Ludhiana, is a worried man these days. The city, which is a leading manufacturing hub for a host of products ranging from auto ancillaries, bicycles and sewing machines to garments, among others, has of late seen a sharp fall in export shipments. In the first 15 days of this fiscal (April 2015), the city saw 1,306 standard size containers move out from its manufacturing units to various ports across the country. This amounted to a 27 per cent drop in the the number of containers that were shipped out of Ludhiana a month earlier (1,785 units during 1-15 March).“We need oxygen,” says Ralhan, voicing concern for the exporters’ community that has been passing through its worst phase in recent times. Incidentally, Ralhan also happens to be the president of the Federation of Indian Export Organisations (FIEO), the apex body of all government supported export promotion agencies in the country.Since December 2014, exports from India have been showing a negative double-digit growth. In May 2015, the total value of goods exported stood at $22.4 billion (Rs 1, 42,573 crore), which was 20 per cent lower than the $28 billion (Rs 1, 66,045 crore) recorded in May 2014. The figures for the fiscal year gone by were also disturbing. The cumulative value of goods exported from the country during 2014-15 at $310.5 billion (Rs 18,97,026 crore) was 1.23 per cent lower compared to $314.4 billion (Rs 19,05,011 crore) logged in 2013-14.Ralhan’s concerns are very real, as the decline is not only in terms of value but in actual volumes as well, as the reduction in the number of export shipments in Ludhiana illustrates. This trend is borne out by data on containerised exports from major ports. Around 20.65 lakh containers were shipped in July-September 2014. The number came down to 19.74 lakh in the October-December quarter and further dipped to 19.69 lakh in the January-March 2015 quarter. On a year-on-year basis, the January-March 2015 quarter, the number, however, was marginally higher (1.75 per cent) compared to the corresponding three months of 2014.The slump in exports has continued even after the announcement of the Foreign Trade Policy (FTP) in April, belying the hopes of exporters who were expecting the FTP to prop up exports through government support.The Key Players Much of India’s problems stem from the turmoil in the global economy, particularly on account of the slowdown in the developed markets. Although India’s trade with Greece is minuscule, the crisis in the European Union (EU) country, which is going through its worst economic turmoil ever, has had a serious impact on the country’s exports on two fronts. First, the value of the euro has eroded significantly owing to fears of a possible breakdown of the euro zone. This has made Indian exports more expensive to European customers, who contribute nearly 18 per cent of India’s export revenues. Second, a 25 per cent depreciation of the euro against the US dollar in recent months has taken away the price advantage enjoyed by Indian exporters in the US as well.The upshot of the EU crisis has been that not only has it curtailed the region’s ability to import Indian goods, but also made EU products cheaper in other key trade destinations such as the US. Thus, the price competitiveness of Indian exporters in the US market, which accounts for another 18 per cent of India’s export revenues, has also been eroded because of “cheap” exports from the EU region.“The economies of most of our major trading partners are in a declining phase. India’s exports have lost some of its buoyancy,” says Rajeev Kher, the outgoing commerce secretary, adding that there are no quick fix solutions to this problem.The tepid growth in the US and the EU markets, which together account for almost a third of India’s export earnings, only partly explains the sluggishness in Indian exports. Trends in international commodity prices have also played a major role. For example, refined petroleum products that account for almost 20 per cent of India’s $310 billion export revenues, have seen their prices crash in the international markets following the fall in crude oil prices. The trade data for May 2015 shows that the petroleum product exports (by value) declined sharply by 59.1 per cent, and led to an overall decline of 12 per cent in India’s export earnings during the month.Given India’s dependency on oil imports, there is little that the government can do to help arrest the decline in the oil-related export-import growth. Hence, the “oxygen” that Ralhan seeks is a call to push non-petroleum exports in segments where negative growth is evident. Engineering goods that approximately have a 20 per cent share in India’s exports could be one such area. Other key areas are chemicals and pharmaceuticals and gems and jewellery, which contribute 14 per cent each. Agriculture and allied products, and textiles and clothing, which account for 10 per cent each, are other major components of the country’s export basket. Most of these sectors have seen growth slowing.Even in the engineering sector, the slowdown is visible. For instance, the provisional export figure of $1.59 billion in April 2015 for the machinery sector was just 3.18 per cent more than $1.54 billion registered during the same month last year. The chemicals and pharmaceuticals sector grew 5.59 per cent in April (from $2.5 billion to $2.6 billion) as opposed to the double-digit growth expectations of the industry. Gems and jewellery exports were down almost 10 per cent (from $3.26 billion to $2.95 billion). Agriculture and allied products saw a decline of over 20 per cent during this period, marine exports fell 15.96 per cent, and the plantation sector showed a negative growth of 6.26 per cent. Textiles and allied products were also in the negative territory in April.Heading SouthwardThe slowdown in the engineering sector can be easily explained. Over 60 per cent of these exports are to the US and Europe where demand continues to be sluggish. “Indian forgings or semi-finished (engineering) products lack the price advantage due to euro’s weakening against the dollar,” Ralhan says.The recent decline in the export of tiger prawns was due to the rupee’s appreciation which made it prohibitively expensive in its key markets, like the EU and Japan. The chemicals and pharmaceuticals sector is also affected due to currency woes, and its growth projections have been scaled down to 5 per cent from 10 per cent earlier.India being an important player in generics at the global level, changes in the international generic market is impacting exports in a big way. With fewer medicines going off patent globally, the opportunities for Indian pharmaceutical companies to make one-off gains by launching their generic versions have dried up. The players have no option but to export existing generic medicines, the value of which can only go down. Growth will depend on selling more of the existing medicines, or pricing them better. “Governments across the world are delving deep to contain healthcare industry expenses. The control of prices and downward revision of prices are a driver to encourage patients to take to generics. Japan, Canada and Australia are some examples,” says P. V. Appaji, director general, Pharmaceutical Export Promotion Council.Meanwhile, the growth of exports in the cotton and textile segment has been impacted by a sudden fall in demand for raw cotton from China. Though, there are other issues that can harm the sector’s long-term export growth. For one, the textile industry experts fear the ongoing Preferential Tariff Agreements among countries will have an adverse impact on the sector. This will put countries that are not party to such agreements at a disadvantage, they say. “Most of our competitors have grown ahead mainly because of the tariff advantage granted by developed countries like the EU, Canada and Australia,” says Siddhartha Rajagopal, executive director, Cotton Textiles Export Promotion Council.The US is on the verge of signing the Trans-Pacific Partnership (TPP) Agreement, which will give preferential access to countries like Vietnam and Malaysia to that country. Countries like Bangladesh, Pakistan and Turkey already get duty-free access to the member states of the EU. “The tariff disadvantage translates to around 8-10 per cent for Indian companies, which for an industry operating at a margin of 5 per cent is extremely difficult to overcome. Hence, while Indian exports grow incrementally, export from competitors grows exponentially,” says Rajagopal, adding that the foreign trade policy had very little to offer to the textile and clothing sectors, despite being the second-largest employment provider in the country.FIEO’s Ralhan says there is an urgent need to review the benefits announced in the new FTP to sustain the growth of exports at a time when a majority of the developed economies are struggling to recover from the slowdown. He rues that the export incentives doled out by the government do not constitute even 1 per cent of India’s total export earnings.Long To-do ListAccording to him, the small-and medium-scale sector should be given more support under the ‘Make in India’ campaign. Availability of cheap credit, timely refund of export incentives, restoration of benefits that were available in the previous trade policy, judicial re-classification of export markets, technology upgradation funds for export-oriented sectors, tax benefits for capital investments, etc., are among suggestions made by the export body to revive the growth of Indian exports. “The situation is grave. The non-performing assets of banks have gone up as companies are unable to repay the loans. The government should realise the gravity of the problem. And the moment they do that, we are sure, they will come out with a package for exporters,” says Ralhan.Commerce minister Nirmala Sitharaman though takes a more pragmatic view of the situation. Stressing that the government should be choosy in extending export sops to the industry, she says,“How long would they continue to ask for support? There are so many other sectors of the economy which also have export potential. Shouldn’t we be helping them?” Incidentally, Sitharaman’s ministry plans to announce a special scheme to neutralise or reduce the cost of credit to the exporters. Exporters point out that they are not just looking for more sops. “Trade facilitation is what we need badly. A comprehensive electronic clearance system itself can bring down the significant transaction costs,” says Ajay Sahai, director general and CEO, FIEO. The government has announced its intention to introduce trade facilitation measures. Whether the “oxygen” arrives on time, and whether it gets administered in the required doses, will remain a question. At least for now. (This story was published in BW | Businessworld Issue Dated 27-07-2015)
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Jan Dhan Yojana, Aadhaar and Mobile form the JAM Number TrinityWell, when this whole exercise began a couple of years ago, it was known as direct subsidy transfer. Later on, it became direct benefit transfer. Now the Narendra Modi government calls it the Jan Dhan Yojana, Aadhaar and Mobile (JAM) Number Trinity.JAM is a just a catchy acronym of a programme that allows Indian citizens to authenticate themselves by using their unique 12-digit Aadhaar numbers, to receive the subsidy amount directly in their bank accounts opened through the Jan Dhan Yojana, and to use the mobile banking platform to carry out money transactions if their bank branches are inaccessible. Joe C MathewThe seriousness, the government attaches to JAM, can be understood from the Economic Survey 2014-15, which states that if the JAM Number Trinity can be seamlessly linked, and all subsidies rolled into one or a few monthly transfers, “nirvana” or the real progress in terms of direct income support to the poor may finally be possible in India.We are not going to discuss about the merit of the programme, but about the current status of the JAM infrastructure, as that is the basic pillar on which the entire programme has been fashioned today. Let’s begin with the Pradhan Mantri Jan Dhan Yojna, an ambitious programme launched in August 2014. The target was to achieve universal financial inclusion by helping 750 million unbanked households in the country to open bank accounts by January 26, 2015. The government has certainly missed that deadline, as official data indicate that till 24 June 2015, Indian banks had opened only 98.98 million rural accounts and 65.3 million urban accounts under this scheme. Among these accounts, 85.18 million are zero balance accounts, or bank accounts opened by the poor for essentially availing the subsidy and other government social security payments – the potential JAM beneficiaries.Next comes the generation of Aadhaar numbers for the citizens and link it to their Jan Dhan bank accounts for the purpose of authentication. Official figures indicate that as on April 20, 2015, the Unique Identification Authority of India has enrolled 67 per cent of the total population. In other words, 817.82 million Aadhaar numbers were assigned to people out of a total population of 1.21 billion (on the basis of 2011 census). Not a bad achievement, though Adhaar seeding of Jan Dhan accounts stood at a dismal low, 64.18 million, at that time.Finally, the just released Socio Economic and Caste Census (SECC) 2011 data tells us that 71 per cent of rural households already own mobile connection, the third component of the JAM strategy. The SECC data on urban population is not yet ready, but the number of rural households itself is an indication of the task ahead. Over 50 million or 29 per cent of India’s 179.17 million rural households needs mobile connectivity for achieving “nirvana” through successful application of the JAM Number Trinity.The question that needs to be asked now is not whether Jan Dhan bank account enrolment, aadhaar generation and mobile penetration can create an ideal platform for financial security, but by when.When will JAM become an inclusive platform for the government to try out its experiments on providing financial security to its 800 million vulnerable population?
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Ashish Nanda, director of Indian Institute of Management, Ahmedabad, believes autonomy, with accountability, is paramount to building professional institutions of global excellence. In an exclusive interaction with BW/Businessworld, Nanda shares his views on skill development, management education and India’s legal system. Before joining IIMA in 2013, Nanda was Robert Braucher Professor of Practice at Harvard Law School, and, before that, a faculty member of Harvard Business School.Excerpts:On Skill DevelopmentThe debate about skill development should focus on creation of opportunities, not just jobs. To benefit from our demographic dividend, we must build the capabilities of India’s youngsters as they enter employable age so that they seek and leverage opportunities: opportunities to work in skilled jobs, but also opportunities to entrepreneurially develop new businesses and create jobs. And for that, our post-secondary education system needs to change on three dimensions. One, undergraduate education should have a liberal arts approach, so that the students develop broad perspectives and sample various subjects to find the ones to which they resonate. Two, professional education should be close to practice so that graduates of these professional schools have a good understanding of the real world when they enter it. Three, programs should be offered in bite size chunks for practising professionals, for education is now a life-long activity and, to remain on the cutting edge and to renew themselves, executives are increasingly going back to school throughout their work lives.On New IIMsThere is no doubt that we do not have the capacity to cater to the demand for quality management education in the country. For instance, less than one per cent of our applicants find their way to IIM – Ahmadabad every year. This is not to say that others are not qualified enough to receive world class management education. However, we need to think carefully whether setting up of more IIMs alone will solve this problem. Perhaps the easiest part of institution building is development of physical infrastructure. But, how do you ensure the best quality of faculty? How do you ensure the best education for students? Developing culture of academic excellence takes time. To build capacity, perhaps we should follow a mix of building some new IIMs and also strengthening existing IIMs. Leading IIMs that have the software of culture of academic excellence can grow hardware of additional physical capacity, and they can also mentor the new institutions that are being set up. We are already doing it in the case of the new IIM coming up in Nagpur.On Indian Institute of Management (Bill) 2015It is in a draft form and the ministry is in the process of getting stakeholder comments at the moment. I hope the Bill, in its final form empowers IIMs rather than centralises controls. Autonomy ensures efficiency, effectiveness, and innovation. And autonomy goes hand-in-hand with accountability. If IIM administrations is responsible for decisions, it should be held accountable for results as well. Centralisation is not the answer. It disempowers and reduces accountability.On Legal Services Industry In India:There is a joke in international legal circles. They say that the forecast about the Indian legal services has been consistent for over a decade now: that the industry will open up to foreign competition within the next three years. The fact remains that by not allowing international law firms to practice in India, we are losing out. Several companies with Indian operations, including Indian multinationals, are choosing locations, such as Singapore, to execute cross-border deals or to conduct arbitrations, because they prefer to work with the best of global legal talent in an efficient legal milieu. So, we are losing business. Opening up Indian legal system to foreign players not only brings some of that business back onshore but also offers jobs and career opportunities to young Indian lawyers. Increased competition motivates indigenous law firms to improve their quality.
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As the global economy slows and we can’t sell more at high value, it makes more sense to sell high volumes at less value like China - in this case sell more shrimps if the market for king prawns is downOf late, Indian shrimp exporters are finding increased demand for small size prawns in traditional markets such as Japan and European countries at the cost of their most prized king prawns. The customer preference is dictated by the price difference between the two. Sluggish economic growth and depreciation of the value of their currencies are making people price conscious in most of India’s key export destinations. Whether it is shrimp in Japan, medicines in Russia or handicrafts in Europe, the order book is only to satisfy the bare minimum requirement across sectors. The result is slow growth, or decline in growth of exports as is being witnessed today. Joe C MathewThe world is possibly looking at yet another global economic slowdown, and Raghuram Rajan, governor, Reserve Bank of India, has been cautioning us on this for some time now. What should be our response to survive and grow in such difficult times? Does the change in preferences, to go for low cost or less priced versions or models, in the developed world, give us some hints? In a way, India’s frugal engineering, is helping many global companies to design, develop and make in India the most competitively priced products for the world. The focus of Modi government’s Make In India campaign should be to get more such global players into India. But that is a long-to-medium term plan. Is there any short term strategy? The Foreign Trade Policy (FTP) 2015-20 announced in April has a small paragraph devoted to facilitate retail e-commerce exports. As a platform for retail exports, e-commerce channels are too insignificant at the moment in India. But insignificant numbers, or lack of numbers, need not always be looked down upon. It could hold immense promises. For instance, if a Moradabad brass handicraft exporter sells his product at a fraction of its retail price in a European market by cutting down trade margins and reaching out directly, online, to the consumer, she will be generating demand, and not sitting on a demand slump. Global online marketplaces such as e-Bay believe so. From a supplier base of 25,000 e-Bay is looking to have 100,000 Indian merchants using their platform for retail exports to international markets in a year. Does it signal sluggish sentiment? Well, what FTP 2015-20 has done is to acknowledge the growing role of e-commerce in exports by extending sops that were exclusive privileges to conventional exporters until now. Thus, exports of goods through courier or foreign post office using e-commerce, of freight on board (FOB) value up to Rs 25,000 per consignment, shall now be entitled for rewards under the Merchandise Exports from India Scheme (MEIS). This support is to offset infrastructural inefficiencies and associated costs involved in export of goods, which are made in India, especially those having high export intensity, employment potential and thereby enhancing India’s export competitiveness. Detailed operational guidelines on this policy decision are yet to come, but it is generally perceived as a move in the right direction. If we can’t sell more at high value, let us try to compensate that with high volumes at less value. China has conquered the world with this strategy, and we may not be able to replicate this in every sector. Though, there is no shortcut to learning how to adapt to the changing customer needs. The faster we do that, the quicker will be the turnaround in our export fortunes. Blaming global slowdown alone will not help. Let us harvest small shrimps, in plenty.
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