Jul 092012
 

My column in today’s DNA

 

Way back in 1964, media theorist and technological determinist Marshall McLuhan stated, “The medium is the message”, a line that has been quoted extensively. McLuhan’s work looked at the impact of communication and communications technology on culture. The most famous example that McLuhan used to explain his theory was the ordinary light bulb. He explained it by saying that the light bulb is pure information. It is a medium without a message. “Whether the light is used for brain surgery or night baseball is a matter of indifference. It could be argued that these activities are in some way the ‘content’ of the electric light, since they could not exist without the electric light. This fact merely underlines the fact that ‘the medium is the message’,” he argued.
The presence of the light bulb, ie, the presence of electricity, changes the world as we know it. It enables a whole host of activities that were not even thought of when there was no electricity. To appreciate this better, we need to imagine a world without electricity: all work done in daylight hours because there is no power to light bulbs; no fans, no computers, no heavy industries; jobs restricted to agrarian, manufacturing to basics. Services — such as banking, insurance, health care — would be restricted to the elite, education would be the purview of a few. A world without electricity is a world that is deeply unequal in nature, a world in which people are mainly restricted to traditional professions; a world that existed 100 years ago.
Electricity is more than the delivery of energy. Its very presence changes the way in which we live, work, and do business. Its availability liberates people from feudal social structures. It is hardly surprising that nations and societies whose citizens have access to energy on a continuous basis are far more egalitarian than nations and societies that don’t. The lack of electricity is associated with societies and regions with deprivation, poverty, feudalism, crimes against women, and social unrest.
The presence of electricity, on the other hand, is empowering people and opens up choice and opportunity in the way they conduct their lives. A country or a state that looks for energy security for its people is one that cares about the well-being of its citizens. On the other hand, a country or a state that does not prioritise energy access for all is failing miserably in its duties by its citizens.
It is estimated that 1.5 billion people across the world, or almost a fifth of its population, have absolutely no access to electricity. Over 400 million people have never experienced electricity. When the sun sets, their world goes dark, and stays that way till the sun rises again.
However, the demand for electricity has to be balanced with methods of generating it in a manner that is cost effective and sustainable. In the last two decades, the world has been slowly looking at renewable energy — solar, wind, tidal waves, energy sources that are replenished by nature — as a method of ensuring energy security for the vast majority of its citizens.
A Modern Day Landscape
This year, 2012, has been declared by the UN General Assembly as the International Year of Sustainable Energy for All. Governments, private enterprise and NGOs such as Greenpeace are working at the grassroots to help bring electricity off the main grids, purely at the local level. Called the Smart Energy Access strategy, it allows the transition “from rural electrification to universal electrification by making use of the versatility of micro grids. That is, its functionality as an off-grid system, the ability to incorporate multiple generation sources, adapt to demand growth, and to be integrated with the central grid, while retaining the ability to separate and operate as an island grid if needed.”

Large power plants are vital to power heavy industry and large-scale growth. Dhule, for example, is the home for the world’s largest consolidated solar power project, Jaitapur for the largest nuclear plant. Neither will be ready this year, or even the next. Both will take time. Providing electricity through a central grid may be the ideal method of doing so, but in a world of growing aspirations it may be impossible to get people to wait so long.
Development is not possible without energy. And sustainable development is not possible without sustainable energy. India needs to empower its people by providing energy access to all — cheap, clean energy that powers homes, businesses, and schools. An energy policy that puts the household at its core and builds up from the needs of the household may be the way ahead.

Jul 062012
 

My feature in today’s Lokmat

Maharashtra is reeling under its worst power shortage ever. It is estimated that the State faces a shortage of between 1500 – 2000 MW.  For a state that has is to being the number one inIndiain industrial production, that kind of a shortage is a huge blow. Industry, small business and households are reeling under acute power cuts. Factories are relocating, industries are shutting down, unemployment is rising, and there seems to be no end in sight to the power crisis.  In regions such as Marathwada 12-13 hours of electricity cuts, on a daily basis are no longer the exception, but the norm.

 

Maharashtra has some big power projects coming up. There is the world’s largest consolidated Solar energy plant being set up in Dhule. There are large thermal plants being set up and the one of the world’s largest nuclear power plants is slated to come up in Jaitapur. But, these take time. Also, there are fears of environmental pollution, safety concerns and the like. The fact remains with large power projects, you need vast tracts of land that have to be acquired from various stake holders, get environmental clearances, run the gamut of PIL’s and hopefully when all that is done the power plant will be operational. While all this is happening households, industries and businesses are without power.

 

The solution may lie in looking at micro-grids rather than centralised grids. Micro grids are bonsai versions of the large centralised electricity production and distribution systems, and they work purely at the local level.  They are aimed at achieving local level electrification within certain parameters of environmental & cost efficiency, and if needed they can tie into the larger electricity grid. Private enterprise and NGO’s such as Greenpeace are working at the grassroots level to help bring electricity, off the main grids, purely at the local level. Micro hydro electric power plants, solar power, power generated through bio mass are all being used, in various locations, in various states

 

One of the companies involved in purely local level power generation is the Husk Power Systems, that is bringing electricity to parts ofBihar.  is estimated that over 80% ofBiharhave never received electricity. They have been using kerosene lamps for lighting purposes. Kerosene is expensive. A litre costs around Rs.40. An average family requires around 13-14 litres a month for just basic lighting purposes. Rice Husk, on the other hand, is abundantly available. It is a waste product that costs very little, yields high levels of energy. HPS has bootstrapped a solution to provide electricity generated from rice husk to the community. Each power plant supplies power to a community of 300-400 households. There are around 60 plants in operation inBihar– mostly in North Western parts, and has a customer base of 25,000 households (roughly 1.2 lakh people).

 

In a little village called Pratap Patti, villagers are enjoying 6 hours of uninterrupted power supply for the very first time in history. Rather than install expensive power meters, the company charges per appliance per month. On an average, a family pays around Rs.120 per month for 15watts of power, much cheaper than kerosene. Also, safer, cleaner and brighter.

 

(rise husk power lighting up the village of Pratap Patti – the blue hues are from light supplied by it. the yellow light is the headlights of a car ,and the left hand side of the road has no light)

Also, the company believes in involving the local community in the process. It trains locals, especially women to take care of the plants. The feeling of community ownership is huge. The plant manager of a Husk Power plant said that they don’t even have barbed wire protecting the plant. No one will steal anything because of the utility it gives the village at large.

Cheap, efficient, and effective – maybeMaharashtraneeds to look at its own variants of the micro grid to address the energy requirements of its people.

 

On Rice Husk power generation

  • Rice husk is purchased & dried
  • It is poured into the funnel of a biomass gasification plant.
  • The furnace is maintained at a temperature of 400-500 degrees C
  • The rice husk burns, and this generates the energy required to light up homes.
  • ON an average it costs about Rs.50 to generate 1 watt of power
  • About 2 kgs of rice husk yield 1 kW of power.

 

 

Jun 162012
 

The last few weeks have been pretty gloomy if you have been following the Indian Economy. There has been a potential downgrade of rating, lower GDPfigures, lower industrial output, inflation seems to be up, interest rates are up, fuel prices are going up. And that is just the stuff we get to see – stuff that is out in the public space. Underlying all this is what is popularly called  policy paralysis. If it was paralysis it would be better because atleast then some level of status quo would be maintained. This was more policy yo-yo – confusion in terms of economic direction, chaos in terms of goals, too many people working at cross purposes,  too much grandstanding , too much ego and too much double guessing, too much dogma and too few conversations between opposing factions.

To top it all, as though behaviour like this can be topped, there is absolute non communication on any aspect of the economy by the person who is most likely to have an impact on a jittery market, a stressed out business class, and a nervous foreign investor – the Prime Minister. While various ministers have assured you that ‘all is well’ with the economy – it is a bit difficult, if not impossible to take them seriously. There were these slew of gloom and doom stories – the Economist, WSJ, Reuteurs and the rest all ran stories that asked some very critical questions, and rightly so, on the India growth story.For all intents and purposes this became the general perception about the economy

Democracy

This spending binge is not only misallocating resources, but also crowding-out private-sector credit. Over the coming year, the government will borrow around $110 billion to fund its revenue shortfall; it plans to front load most of the borrowing in the first six months. Since Indian banks are required to hold government notes, the success of the bond sale is guaranteed.

Wonky Economics

The Congress-led coalition government, with Brezhnev-grade complacency, insists things will bounce back. But India’s slowdown is due mainly to problems at home and has been looming for a while. The state is borrowing too much, crowding out private firms and keeping inflation high. It has not passed a big reform for years. Graft, confusion and red tape have infuriated domestic businesses and harmed investment. A high-handed view of foreign investors has made a big current-account deficit harder to finance, and the rupee has plunged.

 Lack of Business confidence (the S&P report, page 2)

Local business confidence in India has deteriorated for various reasons, including perceptions of “policy paralysis” within the central government. India was able to boost public and private investment in infrastructure in recent years, sustaining high GDP growth of around 8%-9% during the three years leading up to the recent global  slowdown (in 2008). However, a perceived slowdown in government decision-making, failure to implement

have all been blamed for the crisis. Unlike the west where the Government and various agencies speak in one voice to reassure the market and investors at large,  India has been true to form and has had everyone and their idiot cousin postulate on what is ‘wrong’ with the economy. That is everyone except those who should.

And suddenly that has changed. The last week or so there have been a set of articles and interviews by leading industry & business heads who are leading the fight back on behalf of India. While there is a lot that needs to be fixed in the economy it isn’t flatlining. The doomsayers may find support in those who oppose the government tooth and nail because it suits them to highlight what a terrible government this is (and it is). But, for a lot of us who have to run businesses, enterprises, attract investments, pay salaries, meet tax demands, a downward spiral based on a ‘tom tom’ drum effect is scary. It is not political brownie points to be scored, it is a matter of our own survival.

By no stretch of imagination are these people saying ‘problem, what problem?’ but they are far more measured in their view of the problems and possible solutions. After all, business leaders don’t want a loss in confidence in the economy either. Last week Aditya Puri of HDFC started the ‘let’s build back the confidence in India’ ball rolling. He said 

 If you sort out the issues on power, you don’t have to import iron ore, you sort out some of the issues on food, you sort out the issues on pricing of petrol…I strongly believe that India’s structural story is still intact.

Kochar and Kamat of ICICI, said something very similar

The issue is not being critical of the Government or wonder about the economy. The problem arises when that is the dominant narrative.  Kaushik Basu, the government’s chief economic advisor in today’s ToI

There is reason to believe that India today is caught in a pessimism spiral. When this happens — and this is well-known in psychology — we tend to filter information, picking up the bad news and overlooking the good. If we resist this propensity and do some serious structural analysis it will be seen that, while some missteps did occur and there is room for self-criticism, there is also reason to believe that the Indian economy has, over the last few years, deve-loped deep strengths which it did not have ever before. Hence, as far as medium to long-term prospects for the Indian economy go, we have reason to be upbeat

I am somewhat  upbeat. The prospect of a new finance minister or the PM taking over the  finance function, makes me hopeful of a lot of the plans my company wants to get operational . It has been a virtual standstill for the last one year in terms of people having the confidence to invest in new areas. It is different when you run a business, you are responsible for jobs and salaries and an economy with some measure of confidence is always better for a small business than an economy on the verge of a nervous breakdown.

Finally, by no stretch of imagination is India out of the woods. There needs to be well stated intent, clarity of purpose and decisive action. Forget elections, you can’t let down 1.2 billion people and their aspirations. IF the road to reform, and the road to recovery are not set upon immediately – we are heading towards chaos and turmoil – not just economic but political and social.

Some interesting data points can be found here.

Apr 242012
 

My column in today’s DNA

Determination.

The Right of Children to Free and Compulsory Education Act 2009, known simply as the RTE, came a century after Gopal Krishna Gokhale made an impassioned plea to the Imperial Legislative Council for introducing Free and Compulsory Primary Education in India. He said,  “the state should accept in this country the same responsibility in regard to mass education that the government of most civilized countries are already discharging and that a well considered scheme should be drawn up and adhered to till it is carried out.. The well being of millions upon millions of children who are waiting to be brought under the influence education depends upon it…”

 

Nine decades after this speech, the Right to Education became a fundamental right, and a 100 years later the Government of India delivered the Act that allowed for Universal Public Education. The Act mandated that education not only be provided byGovernmentSchool, but also that 25% of all seats in every school inIndiabe reserved for children from economically weak sections. Needless to say, private schools had an objection and challenged the Act. Last week the Supreme Court upheld the law, but exempted unaided minority schools from the ambit of the law.

 

Naturally there has been a debate about the SC ruling. Many are fuming about the restriction of economic choice of private schools and an assault on the right to do business, others are aghast that their children will be studying with the children of their servants, and there is outrage that minority appeasement is being followed by exempting unaided minority schools from following this law.

 

The first thing to remember is that education, especially school education inIndiais not a business. It is not supposed to be run on the principles that govern a business – namely profit. Private Schools, across, the country  are by a myriad of charitable public trusts. The trusts receive land from the government at low or no cost  and are supposed to, by law, reserve seats for economically weak classes. Much the same as hospitals that are built on land granted by the government. Neither do. If a SC ruling is needed to ensure that these ‘charitable trusts’ are forced to honour the letter and spirit of their contracts, then so be it.

 

For those who are having kittens at the prospect of their children studying with the children of ‘servants’, they will get over it. It was probably the same reaction people had  when the British Raj mandated that all Indians of all castes had access to schools paid for by the Government., or that white families had in the Southern States of theUSAwhen the Government mandated the end of segregation in schools. The coming together of children from all backgrounds is going to do them all good. The children will possibly take to it a lot better than their parents.

 

The second, equally important thing to remember is that minority does not mean religious minority. It can mean any minority – religious, linguistic or indeed a sect. Many  quality schools in cities fall under this category. What the SC has done has exempted, in addition to religious schools run by unaided trusts,  some of the best schools from being part of the RTE. And this exemption is discrimination. This needs to be challenged because the law of the land applies to all, and there is no such thing as unaided. Trusts are given a wide range of tax exemptions on their activities- and it can be argued that these constitute aid by the tax payer.  It also needs to be repealed because you will have a slew of educational trusts applying for minority status, defeating the purpose of the law.

 

If you look beyond the cities, across states, private schools have begun providing school education. This means schools run by Trusts, and usually those Trusts run by politicians. They were granted this to enable the state to provide better education for children. In many cases these trusts have taken over the infrastructure of existing government schools with the promise of providing better quality of education to the students. Should these not be required to provide free education to economically disadvantaged ?

 

Finally, the problem is not with either the RTE or the SC ruling. The problem is with a Governmental hypocrisy that decrees profit in education to be a ‘sin’.  Maybe, parents and schools should lobby the Supreme Court for allowing businesses to run schools on the principles that govern good business. Not allowing businesses to run schools and perpetuating this sham of ‘charitable trusts’ will stunt RTE for the right to receive education will be best fulfilled when there is a corresponding right to provide education.

 

Dec 102011
 

I like data. when I used to be in corpodom – I would analyze tons and tons of data, trying to see patterns that would give us a competitive advantage. Unlike most in my company, when viewer ship figure came in, I would ask for raw data – trying to find things beyond the obvious.

Today, I was looking for data for a column, and i just stumbled upon the Google Public Data Explorer – spent a nice hours looking at interesting visual comparisons.

Time taken to start a business – How does India stand vis-a-vis the BRIC countries, developed nations (Have only included the US & Germany in this) and the rest of the world.

The data is from the World Bank, Development Indicators.

http://www.google.co.uk/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ic_reg_durs&scale_y=lin&ind_y=false&rdim=country&idim=country:IND:CHN:USA:DEU:BRA:RUS&ifdim=country&tdim=true&tstart=-285917400000&tend=1291919400000&hl=en&dl=en&icfg&uniSize=0.035&iconSize=0.5

 

I would hate to start a business in Brazil. And, I am surprised that it takes more days to start a business in China rather than India. And, India has improved – from 89 days in 2003 (we started our business that year) to 29 days in 2010 (we started our second business in 2009 – the film business).

High Technology Exports (as a % of Manufacturing)

http://www.google.co.uk/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=tx_val_tech_mf_zs&scale_y=lin&ind_y=false&rdim=country&idim=country:IND:CHN:USA:DEU:BRA:RUS&ifdim=country&tdim=true&tstart=-285917400000&tend=1291919400000&hl=en&dl=en&uniSize=0.035&iconSize=0.5&icfg

 

It is interesting to see how China has overtaken the United States slowly but surely. And, that gap is widening. Both Brazil and Russia do better than India. I am not sure if there is any policy in place that looks at addressing this.

Internet Users as a Percentage of Population

http://www.google.co.uk/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=it_net_user_p2&scale_y=lin&ind_y=false&rdim=country&idim=country:IND:CHN:USA:DEU:BRA:RUS&ifdim=country&tdim=true&tstart=-285917400000&tend=1291919400000&hl=en&dl=en&uniSize=0.035&iconSize=0.5&icfg

 

While Indians are the third largest population grouping on the net, the number of Indians are a tenth of the population. It would be interesting to know how many of these net users are regular – how many of them use the net beyond e-mail. Facebook says it has 38 million registered accounts out of India, but that doesn’t tell you level or nature of activity.

Adolescent Fertility Rates – births per 100 for women aged between 15 to 19

http://www.google.co.uk/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=sp_ado_tfrt&scale_y=lin&ind_y=false&rdim=country&idim=country:IND:CHN:USA:DEU:BRA:RUS&ifdim=country&tdim=true&tstart=-285917400000&tend=1291919400000&hl=en&dl=en&uniSize=0.035&iconSize=0.5&icfg

This is an abysmal figure, vis-a-vis India. And, going beyond the fact that these barely educated girls are becoming mothers – and will continue to be in the reproductive phase for the next 2 decades (at least), it also reflects poorly on the state of women’s rights in India. Compulsory Education. Compulsory enforcement of the age of marriage. Religious leaders -across the board be damned. This figure needs to go down. Else India will, literally, screw itself out of resources.

Agricultural Land

http://www.google.co.uk/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ag_lnd_agri_zs&scale_y=lin&ind_y=false&rdim=country&idim=country:IND:CHN:USA:DEU:BRA:RUS&ifdim=country&tdim=true&tstart=-285917400000&tend=1291919400000&hl=en&dl=en&uniSize=0.035&iconSize=0.5&icfg

That is a seriously large %. I wonder how growth will be sustained if less than 40% of the Land is usable for other purposes including industry, cities and habitation. This figure is especially worrying, when you compare it to the Agricultural Value Add (As a % of GDP).

http://www.google.co.uk/publicdata/embed?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=nv_agr_totl_zs&scale_y=lin&ind_y=false&rdim=country&idim=country:IND:CHN:USA:DEU:BRA:RUS&ifdim=country&tdim=true&tstart=-285917400000&tend=1291919400000&hl=en&dl=en&uniSize=0.035&iconSize=0.5&icfg

60% of land, is delivering 16.21% of value … there is something very wrong in this statistic.