BEST U.S. COLLEGES–AND THE ONES TO AVOID/Pg.82 RNI REG. NO. MAHENG/2009/28102

PRICEPRICE RSRS. 100100. AUGUST 2323, 2013 FORBES INDIA VOLUME 5 ISSUE 17 AUGUST 23, 2013

INDEPENDENCESpecial Issue Day TIME TO Pg.37 INDIA BRE A K INDEPENDENCE DAY SPECIAL

FREThe boundaries of E economic, political and individual freedom need to be extended

www.forbesindia.com LETTER FROM THE EDITOR-IN-CHIEF Towards Greater Freedom

or a country that became politically free in 1947 and took a stab at economic freedom in 1991, the script in 2013 could not have been worse: An economy going downhill, a currency into free fall, and a widespread Ffeeling of despondency and frustration. A more full-blooded embrace of markets should have brought corruption down and increased competition for the benefi t of customers and citizens alike. But that was not the path we took over the last decade. An expanding pie should have provided adequate resources for off ering safety nets to the really poor even while leaving enough with the exchequer to fund public goods. But India is currently eating the seedcorn of future growth with mindless social spending. Corruption has scaled new heights, politicians have been found hand-in-glove with businessmen to hijack state resources for private ends, and a weakened state is opting for even harsher laws and an INDIA ever-expanding system of unaff ordable doles to maintain itself in power. Politicians have raided the treasury for private purposes, and businessmen fi nd more profi t in rent-seeking behaviour than in competing fairly in the marketplace. As for the citizen, she is angry with the steady whittling down of freedoms, a crumbling education and health care system, and pathetic public services. The current political power arrangement between centre, states, cities and villages is coming apart at the seams. The impending carve-up of Telangana from Andhra shows that super- India is getting large states are not inclusive enough, even as super-cities such as ready for the and are being misgoverned due to a misalignment next freedom between political power and accountability to citizens. struggles, the next Indians are not taking it lying down anymore—as the Anna Hazare movement and the public protests over the Delhi gangrape of 2012 million mutinies indicate. Governance has become the talking point of the next election. The people are fi ghting back. They may not have succeeded in organising themselves too well, but they are speaking up. India, in short, is getting ready for the next Best, freedom struggles, the next million mutinies. In our Independence Day special issue that is now in your hands, we asked several eminent businesspersons, experts, independent thinkers and non-conformists to share both their diagnosis R JAGANNATHAN and remedies for India’s next phase of growth and movement Editor-in-Chief, Forbes India towards greater personal, political and economic freedom. [email protected] This year’s I-Day comes when the country is on the cusp @TheJaggi of major political change. The ideas in this issue should thus be fodder for the electoral battles of 2014 and beyond.

AUGUST 23, 2013 | FORBES INDIA | 3 Contents Volume 5 | Issue 17 | August 23, 2013

INDEPENDENCE DAY SPECIAL Sudhanva Atri for Forbes India for Atri Sudhanva Online Grocers: Bal Krishn 28 Birla and Mukesh Singh

10 5 68 Surjit Bhalla: India Stays Dole Up, 12 Subsidy Down

6 1 3 70 Manish Sabharwal:IND Why the God IA of Jobs Doesn’t Smile 8 on India

13 72 Ajay Shah: The State Should Enter

11 the Picture Only When Markets Fail

74 Dileep Ranjekar: Our Biggest 9 Challenge is to Improve Teaching Competence 92 2 4 7 76 Akhil Gupta: Let the Sun Free India from a CAD Crisis

1. Keki Mistry 2. Wilfried Aulbur 3. Swati Piramal 4. Yogendra Singh Yadav 5. Manish Sabharwal 6. Jayaprakash Narayan 7. Dileep Ranjekar 80 The Lost Heroes of Economic Life 104 The Silver Ceiling 8. Bimal Patel 9. Pratap Bhanu Mehta 10. Ajay Shah 11. Akhil Gupta 12. 13. Surjit Bhalla Freedom Jasodhara Banerjee They championed a free market 92 The Intolerant Indian 107 Imagine There’s No Heaven AMERICA’S BEST COLLEGES 48 Jayaprakash Narayan: Fixing economy against Nehruvian policies Salil Tripathi Features Devangshu Dutta 82 Colleges at Risk Governance with Reforms and 96 All Work and No Play CORPORATE ACCOUNT Forbes’s annual ranking of the top Economic Freedom 110 They Fill Our Lives Genesia Alves 24 How Etihad will Digest Jet 300 colleges—and those you need to Dilip D’ Souza The deal will change much more worry about 50 Wilfried Aulbur: India has its Upfront 98 The Family Way than Jet’s international routes Own Silver Linings Playbook 112 The Private Citizen INDEPENDENCE DAY SPECIAL BRIEFING Sandip Roy Sunil Abraham BIG BET 38 India can’t be a Jugaad Economy 56 Pratap Bhanu Mehta: When 22 The Pursuit of Happiness 100 Imagining Equality 114 Democracy on the Rocks 28 ZopNow Takes a Crack at Forever Business Bats Against Itself More money does not necessarily Nilanjana S Roy Imran Khan Online Grocery We need key policy reforms, and a mean more happiness The fi rm’s ‘three-hour delivery’ wider ambit of freedom 60 Yogendra Yadav: India is a State- promise can make or break its future Nation, Not a Nation-State Subscriber Service: To subscribe, change address or enquire 42 Keki Mistry: How to Rescue the Regulars about other customer services, please contact: FORBES INDIA, Subscription Cell,C/o Digital 18 Media Ltd, Empire Complex, WE VALUE YOUR FEEDBACK. STRATEGY Government-Business Equation 62 Bimal Patel: We Have to Free Our 414, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Write to us at: Cities from the States’ Clutches 10 Letters 20 World Watch Tel: 91-22-40019873 / 4001 9874. Fax- 022-24910804 [email protected] 32 Global Brands from Emerging (Mon –Friday: 10 am - 6 pm) SMS FORBES to 51818 Letters may be edited for brevity. Economies 46 Swati Piramal: How to Make 12 Check-in 116 Thoughts Email: [email protected], Read us online at www.forbesindia.com India a World Leader in Low-Cost 66 Bibek Debroy: Between the To subscribe, visit www.forbesindia.com/subscription/ China can show how companies in To advertise, visit www.forbesindia.com/advertise/ Cover Design by Anjan Das these economies can build brands Health Care ‘Illfare’ State and the Deep Sea

6 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 7 www.forbesindia.com

Magazine  Upfront  Features  Life  Daily Sabbatical  Multimedia  Blogs  News Lists 

INDIA http://forbesindia.com/blog/ MUST-READ BLOGS Lessons From http://forbesindia.com/blog/ Detroit’s Demise Detroit is a very real and sad example of how a boom OUR BLOGGERS turned into bust in less than a generation. The PRINCE SEEMA newfound prudence in the MATHEWS SINGH bond markets from investors THOMAS Writes on who have been burnt by this default, may perhaps be Tracks the sci-tech and all things the real driver of change in world of getting municipal leaders business from that lie at the intersection and planners to make the the rear seat diffi cult choices they need to

BINDU The MOOC Question share their groceries with. ANANTH Massive Open Online Indians, too, have a slightly President, SANJEEV Courses are here to stay. different approach GUPTA INDIA IFMR Trust Question is: In what form? How we Forgot Chhedda Internet Bhargava vs Supermarket... Padmanaban in the Explores how Managing Partner, Now Open! Bhagwati vs Sen Spat fi nance can be a Emerging Opportunity Why don’t we engage in force for good Consulting Even in the West, e-portals are creating robust front- scientifi c public debates end touch-and-feel stores. on critical issues; why People aren’t comfortable do our scientists remain with only an IVR system to socially insensitive?

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TIME TO WHY BANKING IS BREAK FREE AN ATTRACTIVE Download the SECTOR Forbes India App By R Jagannathan & Dinesh Narayanan By R Jagannathan

http://forbesindia.com/thedailysabbatical/ The Bottom Line Do Your Negotiating on Corporate Tweeting Techniques Create DAILY SABBATICAL Research suggests Twitter Value? helps market liquidity of It’s no longer a game little-known companies of hardball. Today’s Crowdfunding negotiations involve a Poor more than just money Investment? Crowdfunding promises to democratise 10 Recipes funding of for Better Thinking startups. But is How action-focussed that necessarily business leaders can a good thing? sharpen their thinking skills

8 | FORBES INDIA | AUGUST 23, 2013 Founder & Editor, Network18: Group CEO, Network 18 & Group CFO: RDS Bawa Publisher, Forbes India: CEO, : Lakshmi Narasimhan President & Editorial Director, TV18: B Sai Kumar CEO, Network18 Media: Sanjay Dua Senthil Chengalvarayan CEO CNN IBN IBN7: Group COO, Network 18 : Dilip Venkataraman Editor-in-Chief: R Jagannathan Ajay Chacko Director Operations, Network18 & COO IBN Lokmat: Sanjay Sharma Design Director: Anjan Das CEO, Forbes India: Gurmeet Singh Operations Director & CTO Director-Online & Events: Broadcast: Piyush Gupta Deepak Ajwani ADVERTISING SALES Senior Vice Presidents: Editor (Features & Special Projects): Vishal Srivastava FORBES MEDIA LLC Abhilasha Khaitan Maulik Thakkar, Kumar P, Chairman & Editor-in-Chief: Editor (ForbesLife India Manavdeep Singh, S Shivakumar, Steve Forbes & Social Media): Peter Griffin Fardeen Sayeed, Niraj Ladia, President & CEO: Mike Perlis Senior Editor (Economy & Policy): Nitya Sharma, Atishay Singh, Chief Product Officer: Dinesh Narayanan Jaskaran Gulati, Preetika Mehta, Lewis D Vorkin Mansi Shah, Sahil Menghani, Senior Editor: Seema Singh CEO / Asia: William Adamopoulos Rashmi Nath, Vibhor Nigam, Senior Associate Editor: Editor, Forbes Asia: Tim Ferguson Cuckoo Paul Prashant Shirke & Kumar Kamble Contributing Editor: Mitu Jayashankar EVENTS Events Head : Alpana Gulati Consulting Editor: Views & opinions expressed in this Sumana Mukherjee Shriram Narayanmurthy, Girish Sharma, Sajjan Sharma magazine are not necessarily those of Digital18 Media Limited (Digital18), its Editor (Markets And Finance): publisher and/or editors. 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AUGUST 23, 2013 | FORBES INDIA | 9 LETTERS TO THE EDITOR Readers Say

Pharma Buzz Web Wars Refer to ‘Fortis’s U-Turn’ (August 9, Refer to ‘Gobble Gobble Google’ (July 2013, issue). Great story on Fortis and 26, 2013, issue). A great research topic its promoters. I appreciate the eff ort would be why American companies like that obviously went in, but I stopped Google, Apple and Amazon have failed reading once I read that “...the rental to crack the Chinese puzzle while here that Fortis is paying to Religare they are doing signifi cantly Trust is more than the earnings before better. The key to this is the dominance interest, depreciation, tax and amortisa- of English language in India that makes tion...”. This, coupled with the lemon it an easy market for Western multina- that Ranbaxy has turned out to be, is all tionals, whereas in China, government that an investor needs to know about ‘help’ is provided to local companies. the company, its promoters and their Rajesh Tyagi, on the web India needs business practices. Amit Bhandari, via email This is bound to happen when there more search is no competition in the search space. engines. Gas Bubbles INDEveryone is busyIA launching ecommerce Without that, Refer to ‘How India has Punctured its sites; who will build a search engine? one can’t Gas Balloon’ (August 9, 2013, issue). China couldn’t aff ord to kick Google out Imports are not a solution to the long- before building Baidu. I strongly feel blame Google term vision of energy independence. It that India needs more search engines. for monopoly only helps serve the immediate need of Without that, one can’t blame Google industries invested in gas-based energy for monopoly. production—for internal consumption Arun Y, on the web or sale. It is ironical that ministries resort to measures like restricting gold Corrections & Clarifi cations imports when policy reform is what can serve the dual purposes of reducing Issue August 9, 2013 current account defi cit and bridging the On Page 14 — By 2015 [wrongly demand-supply gap in energy. mentioned as 2005], nearly half of Varun Narula, on the web the world’s largest companies will have their R&D facilities in India. Water Woes On Page 84 — The article ‘Why Refer to ‘No Country for Pure Water’ Banaskantha Loves lady Rosetta’ (August 9, 2013, issue). Impure water is by Vivian Fernandes was made the root cause for many diseases. Fifty possible by the Inclusive Media percent of people in developing coun- Fellowship of Delhi’s Centre for the tries suff er from one or more water- Study of Developing Societies. related diseases. Eighty percent of these Issue July 26, 2013 diseases are caused by contaminated On Page 72 — water. Providing safe drinking water to twitter.com/Forbes_India In the article people has been a major challenge for ‘The Franchise facebook.com/ForbesIndia governments in these countries. The Four’, the images need of the hour for rural areas is for Stephenie linkedin.com/groups?gid=1959962 mobile water purifi cation systems. Meyer’s and JK Rowling’s books were www.google.com/+ForbesIndia Dr A Jagadeesh, on the web interchanged. The error is regretted.

10 | FORBES INDIA | AUGUST 23, 2013 Check-in

/ APERTURE /

INDIA

three million converged on Copacabana beach in Rio for Pope Francis’s mass on World Youth Day. He has emerged as an unlikely champion for the 73,800,000 youth. “The world crisis isn’t The number of young people who are unemployed globally, treating the young well. We run according to Global Unemployment Trends 2013, released the risk of having a generation earlier this year by the International Labour Organization. that doesn’t work,” he has said. The persistent economic crisis will probably push another As governments show little half a million into unemployment by 2014. The youth intent to fi x this, faith, perhaps, unemployment rate had touched 12.6 percent in 2012,

Sergio Moraes / Reuters is a useful friend to have. and is expected to increase to 12.9 percent by 2017.

12 | FORBES INDIA | AUGUST 23, 2013 Check-in

/ CHANGE AHEAD / government-sponsored / GRADING THE CEO / programmes. For Professionals to instance, Delhi Mayer’s ran 147 Centrally- Turn Babus? sponsored schemes Mixed Marks during the 11th Plan. At the village level too, there is a crunch of personnel who can use government funds to plan and execute projects. The NAC reportedly wants professional managers only for the unlike her three big-ticket programmes. predecessors, Marissa Mayer The question is: Is has now managed to make it it possible to rope in through an entire year as the the sonia gandhi- Clearly, this is an experienced profe- Yahoo CEO. She even got a $1.1 led National Advisory idea whose time had ssionals who’ve typi- million bonus halfway through. Council (NAC) come long ago. cally been dissuaded Did she earn it? Shares are up has reportedly Lack of capacity by the poor pay? Plus, 80 percent, thanks mainly to recommended to the and skilled managers babus often resent INDYahoo’s appreciatingIA stake government that it hire has been a serious the lateral entry of in Chinese internet phenom professionals to run problem affl icting the professionals. Alibaba, but doubts persist, fl agship programmes. numerous and large - DINESH NARAYANAN especially after activist investor Daniel Loeb announced he was selling most of his stake back to the company. Here’s / TRANSITIONS / how her freshman year went: PRODUCTS: B– A revamped Industry Movements home page is more real-time and social. Mail got a facelift, as did some mobile apps and Flickr. Mayer ea sundaram, one of the usha sangwan axed at least two dozen old prod- most experienced fund has been named ucts. But there’s still no killer app, managers in India, has the fi rst female and holes remain in mobile, social, video and automated ad buying. recently joined Pramerica managing Mutual Fund to look after director at the EARNINGS: C Revenue, fl at since portfolio management services. Life Insurance 2011, fell 7 percent to $1.14 billion in the second quarter. Profi t jumped, Sundaram, along with Prashant Corporation Jain and Chandresh Nigam, was part of Zurich but most of it comes from how Ya- (LIC) of India. hoo accounts for its share of Alibaba Mutual Fund where they had collectively decided Sangwan, an LIC earnings. Beyond vague promises of to stay away from IT stocks in 1999. Pramerica veteran since a year-end lift, Mayer isn’t saying MF is sponsored by Prudential Financial Inc. 1981, has worked when things will improve. for the company ACQUISITIONS: B She’s on a shopping spree, with 17 small acqui- unilever has appointed in areas like housing fi nance, sitions and one blockbuster, $1.1 Nitin Paranjpe as the head of billion for Tumblr. She’s still eyeing its global home care business. direct marketing, ad tech and consumer services. Replacing him as Hindustan international operations and, MORALE: B+ Mayer has made Unilever MD is Sanjiv Mehta Yahoo a destination workplace (in pic), who heads operations most recently, again, importing engineering and in the Middle East and North served as executive product-management talent from Google. Her approval rating on the Africa. Mehta has been with Unilever for 21 years director of communications. employee rating site Glassdoor is 84 but has never worked for the company in India. percent, despite her controversial

ban on working from home. Forbes India Sundaram: Prasad Gori for EA Lucas Jackson / Reuters; Getty Images; Marissa Mayer: From Top:

14 | FORBES INDIA | AUGUST 23, 2013 Check-in

/ AUTO TALES / / CHINA EFFECT / GM India’s Cup of Woes Spot the Opportunity as things stand, General Motors 1.14 lakh 25 3% a clutch of (GM) India is not in Chevrolet Taveras were Senior GM India’s investment banks, the driver’s seat. recalled. Manufacturing of Sail management market share including Nomura U-VA suspended. Final recall Late last month, the personnel and Barclays, recently number not announced were fi red company announced its lowered expectations decision to recall 1.14 lakh WHAT NEXT? of China’s growth. units of its utility vehicle  Salvage serious loss of reputation and brand equity Media reports say the Tavera, manufactured  Deal with government investigation gloomiest forecast came between 2005 and 2013,  Costly and tedious recall process from Nomura which because they failed does not rule out the to meet emission and Sheila Jain Sarver (head end here. From early Asian giant’s output specifi cation norms. of GM’s India technical July, GM has halted the growth falling below There has been no centre at Bangalore) production of its Sail 6 percent next year. offi cial statement on the and Sam Winegarden sedan and hatchback The probability of a cause, but media reports (vice president for global citing quality issues. It is hard landing in China suggest GM engineers engine engineering). contemplating a recall. may be benefi cial to India manipulated emission The problem doesn’t Dealers believe this if it manages its economy tests to comply will aff ect INDbusiness. IA with government And it’s not as if GM standards. Post the India’s cars have controversy, GM been selling big. In has fi red about 25 June, it sold 6,575 people, including vehicles, down 11 Anil Mehrotra percent year on year. (India CFO), - ASHISH K MISHRA

/ MARKET WATCH / the BSE FMCG Index of the slowdown. and currency slightly has risen by 227 percent Private banks received better. Chinese demand Slowdown to 6,948. When nothing a setback last month over the past decade Begins to else was performing, when the RBI tightened fuelled a rally in global consumer (and pharma) liquidity to protect the commodity prices such Impact FMCG stocks along with rupee. There are also as those of metals and oil. Stocks Too private banks seemed initial signs that well- Those are now coming to be the best bets. As a known consumer names off as its economy slows. result, valuations have are slipping. In the For instance, some expect the downturn in the sky-rocketed; the index recent round of earnings, oil prices to even drop India growth story spares trades at an earnings market leader Hindustan to $70 a barrel, which no one, not even the multiple of 41. Compare Unilever disappointed bodes well for India. Sensex’s top performers. this to 14 for the Sensex the street with a 7 percent But the recent fall in Consumer companies and the disparity is top line growth. HUL the value of the rupee has have been stock market stark. So now, as FMCG said it has seen growth eroded any gains from darlings for close to fi ve stocks get hit too, it rates slipping since the lower oil prices. If the years. During this time, is a grim affi rmation fi rst half of 2012. ITC also government is able to let the street down with stop the erosion, it may HUL ITC Dabur Marico FMCG Index its top line as cigarette be able to take advantage 22-Jul 696 368 170 215 7,433 volumes declined by 1-2 of the dipping prices, 26-Jul 663 368 171 217 7,267 percent, according to thus easing the pressure 31-Jul 615 336 161 208 6,814 brokerage estimates. on the trade balance.

Stock price in Rs - SAMAR SRIVASTAVA - DINESH NARAYANAN Right: Getty Images

AUGUST 23, 2013 | FORBES INDIA | 15 Check-in

/ IT GROWTH / Bigger, but not Bulkier, the Incubator Way

involve bulking up staff . focussed about business Typically, companies than academic incubators, use solution accelerators, and our programmes are automation and portfolio much longer than those changes to achieve this. of a typical accelerator Tata Elxsi, a Bangalore- [which last about three based Rs 622-crore design months]. The idea is to services fi rm, has taken a help create companies that diff erent route by setting will help us strategically.” up a business incubator. Tata Elxsi benefi ts from The concept isn’t a 10 percent equity stake. new—it started in the US The selected start-ups as a way to encourage get 18 months of ready- entrepreneurship. In to-use infrastructure, India, incubators were dedicated mentors mostly associated with and help from Elxsi’s academic institutions. marketing and business In recent years, a development teams. variant of incubatorsIND Elxsi,IA which recently technology services logistical problems called accelerators is signed up its fi rst startup, companies across the associated with larger taking off , driven by a telecom fi rm called Big country face what its teams. Also, investors the private sector. V, expects to incubate 30 executives call ‘a linear and stock markets tend Tata Elxsi’s initiative, companies in the next growth’ problem: The to give a premium to incub@TE, is diff erent three years. If it succeeds, it more they grow, the companies showing from all these, says Rajesh might just pave the way for more they have to hire. non-linear growth— Kumar, VP, Strategic other mid-sized companies. Managers worry about the kind that does not Initiatives. “We are more - NS RAMNATH

/ STARTUP FUNDS / Scholar- / ASK 50 BILLIONAIRES / investors in Philadelphia Is a College Student VCs Education Worth in 2012, first round the Time and Capital, a Philadelphia VC Money? firm, put $500,000 into a fund for students to invest in startups. Dorm Room NO Fund has since expanded 8.5% to colleges in two more incredible companies. getting their PhD in cities. Its 15 investments, Second, the best VC biology. And as they mostly $10,000 to funds are run like graduate they select $20,000, include screen- startups, so we should their replacements.” sharing software Firefly find students who want How do they find and online used-car to build a VC startup.” their investment retailer ZenKars. We How do you choose opportunities? “They YES spoke to First Round your committees of tap their personal 92.5% partner Phin Barnes. students? “We have networks. They work Where did the idea an open application for to deeply understand originate? “First, college anyone from undergrads problems and meet —Results of an Anonymous Poll of 50 Members of The Forbes

From top: Indiapicture; Dorm Room by Meghan Casserly by From top: Indiapicture; Dorm Room students can create in liberal arts to people incredibly smart people.” World’s Billionaires List

16 | FORBES INDIA | AUGUST 23, 2013 Check-in

/ SMART TECH / games and apps to the TV Samsung and LG who want Google Wants to Plug with their entertainment to make their units ‘smart’. ‘hubs’; companies such Industry insiders like into Your TV, Too as Microsoft and Sony Vishal Malhotra, the head who want to morph of Zee’s internet-based google’s latest launch, no UI. It relies on the TV off ering Ditto Chromecast, is a sleek $35 smartphone, tablet or TV, feel Chromecast USB dongle that plugs PC to provide control, is a mere gimmick. in behind an LCD TV, while the TV merely “I’ve used Android- allowing it to ‘cast’ videos plays the video or based HDMI devices via smartphones, tablets audio ‘cast to it’. that do video and and PCs. Because screen Through this gaming, and cost just resolutions, distance to simple concept and $27. They’ve never the viewer and remote rock-bottom pricing, caught on because control devices vary Google is attempting users fi nd them too greatly across models, to disrupt three complex,” he says. bringing a powerful yet well-entrenched sets their gaming consoles, But initial reviews indicate intuitive user interface of players positioned to like the Xbox and Chromecast is very easy to (UI) to a TV is tough. control the modern living PlayStation, into family use and is near-seamless Google, therefore, is room: The likes of Apple entertainment devices; in terms of playback. betting that the best UI is and Roku who bring and TV makers likeIND IA - ROHIN DHARMAKUMAR

/ MOBILE TIE-UPS /

How Next-Gen Smartphone Users are Being Bought & Sold

after facebook and google, Twitter became the latest to buy millions of Indian smartphone users in July. Now, the actual announcement was about how Twitter had partnered with Vodafone India to you are the product”. So these large if they have Facebook or Twitter, off er its services ‘free of cost’ to web companies are actually buying and they’ll say yes!” Incidentally, 96 mobile subscribers for three months. millions of fi rst-time mobile internet percent of Indonesians use social It had already inked similar deals users by paying off their respective media, mostly from their phones. with Airtel and Reliance, according mobile operators. Of India’s 137 Smaller competitors to Facebook, to Medianama, a digital media news million internet users, roughly 120 Google and Twitter who can’t aff ord site. Google and Facebook, too, million access mobile internet. to pay mobile operators on similar announced such agreements during Sunil Abraham, director of the terms will fi nd their competitiveness the past year, whereby mobile Centre for Internet & Society in shrinking. Meanwhile, a large subscribers could use their service Bangalore, thinks India could be number of Indians will balk ‘free of cost’ through their phones. going down the Indonesia route. at paying for internet usage Nothing is really ‘free’ on the “If you ask the average Indonesian on their phones because the web, which is why we have the mobile user if he or she has internet social networks are all ‘free’.

Getty Images adage: “If you’re not paying for it, access, they might say no. Ask them - ROHIN DHARMAKUMAR

18 | FORBES INDIA | AUGUST 23, 2013 Check-in

/ MED INDEX / / CUTTING EDGE / Health Care For All? Shaping the Future That’s Still a Joke in India arjun kalyanpur IMS Health, which provides information 3.73 lakh doctors and 99,000 chemists. and Sunita Maheshwari, and services for health care, unveiled We list some key fi ndings that point co-founders of Bangalore- India’s fi rst physician-chemist census in towards the skewed reach of medical based telemedicine order to fi ll gaps in the health care value care and decode what the numbers mean. company Teleradiology chain. The census covered 120 cities, - SEEMA SINGH Solutions, are true pioneers. A decade ago, they entered a nascent industry and 44 29% 30-35% built workfl ow systems ➤ ➤ of the top 120 Indian cities ➤ of chemist sales are of a chemist’s sales are from from scratch. In just a fall below the global median of performed without any non-pharmaceutical products 1.2 doctors per 1,000 people prescription few years (by 2010), they Validates that 70% of health started selling the software Shows the poor penetration care expenses come from Confi rms the cause which they’d created for of health care facilities drugs and that the govern- behind the alarmingly across the country ment should give free essen- themselves, and helped high antibiotic resistance tial medicines to all that is spreading rapidly deliver diagnostics for CT scans and MRIs in 9 20% just 30 minutes, 24x7. ➤ cities account for 52% of The company is now 37% ➤ higher consultationIND fees are IA the total doctor universe; transforming itself from 42% of chemists in India are ➤ of chemist outlets are charged by doctors in Mumbai. concentrated in the top 9 most attached to doctor clinics, Number of patients seen by a service provider to populated cities polyclinics, hospital facilities super specialists per week: 82 an industry enabler. Its and nursing homes (Metro A), 130 (Non-metro) cloud-based teleradiology Leads to high migration as well as bankruptcy; nearly Explains why some of the Tells us why big hospitals 3% of the Indian population busiest commercial districts should open tertiary care slips below the poverty in even some top metros branches in small towns line every year due to don’t have a drug store to or address those patients health care expenses address an emergency through remote technology

Data source: IMS Health Physician-Chemist Census July 30, 2013.

/ BETTER LIFE / guidelines are being set in For Indians, the national many countries. “Genetics guideline recommends workfl ow software RadSpa has a role to play in about salt intake of less than has been in the market Salt for 20-30 percent of the fi ve grams of sodium for a little over two years Thought patients who respond chloride per day. with 60 installations to salt restriction or Meanwhile, there globally. They claim a 20 excess,” says Dr Anoop seems to be a connection percent increase in the Misra, director, Centre between the brain and salt productivity of radiologists. over the years, the of Internal Medicine, as well, or at least to The software works by link between higher salt Fortis the iodine in it! connecting one diagnostic intake and rising blood Hospital, In July, a group team in a central location pressure has been well . It of economists to a number of clinics. The documented by several also depends released a enterprise version costs a studies. So much so on habitat: report which one-time fee of $200,000 that the World Health A person showed a rise while the cloud-based Organization has set a who works in in IQ among model is $1 per scan. global goal to reduce a hot climate and the US population, But lack of sales and dietary salt intake to perspires through the linked to the mandatory marketing resources can fi ve grams (about one day is unlikely to develop use of iodine in salt. still pose a challenge

teaspoon) a day per hypertension since he’s Chew on that too! for the duo. Corbis Forbes India, for From top: Mallikarjun Katakol person by 2025. National losing salt anyway. - SEEMA SINGH - SHRAVAN BHAT

AUGUST 23, 2013 | FORBES INDIA | 19 UPFRONT: WORLD WATCH Young Turks In the decades following India’s independence, many new countries were born. Over the years, they have fared differently on various parameters. We take a look at the nations on the top of the heap, in terms of per capita income, and compare them with India.

Qatar Kuwait Ireland The Bahamas Sep 3, 1971 Jun 19, 1961 Apr 18, 1949 Jul 10, 1973 UK UK UK INDIAUK 183.4 173.4 210.4 8.0 89,902 64,222 4,4017 25,134 2.04 2.70 4.78 0.32

Was a protectorate Was a protectorate Independence declared in Occupied by Japan during 1919; the Irish Free State World War II; became a Brit- seceded from the UK in 1922. ish protectorate thereafter. Legislative independence In 1959, a new constitution conferred in 1931. All consti- was written, declaring it tutional ties severed in 1948. a self-governing state.

Singapore Brunei India UAE Aug 31, 1963 Jan 1, 1984 Aug 15, 1947 Dec 2, 1971 UK UK UK UK 276.5 16.6 1,825 358.9 50,641 39,595 3,900 65612 5.46 0.42 1,220.80 5.47 After independence, was part Ranks 2nd highest in the of Malaysia; didn't get sole Was a protectorate world on the Human Devel- sovereignty until 1965 opment Index Sources: worldbank.org, cia.gov, imf.org

Text by Abhivyakta Date of From GDP Per capita Population Chaturvedi, Palakh Chhabria Independence Whom ($billion) income ($) (in mln) Infographic by Sameer Pawar

20 | FORBES INDIA | AUGUST 23, 2013 UPFRONT: BRIEFING

oney and happiness it by proving that the higher the income at the cost of relationships, evaluation in his study, basing his have been married income or the GDP (Gross Domestic peace and ecological stability.” research on open-ended questions on and divorced Product), the more happy the person For Babcock-Lumish, GNH is a what people want out of life—what The Pursuit M umpteen times or the country is. No conditions apply. useful indicator as, along with other they would need for their lives to by economists. A recent study by Between the two polar studies, metrics like GDP and Consumer be completely happy. [The recent University of Michigan professors several researchers tried to bring Price Index (CPI), it provides a Stevenson and Wolfers research of Happiness Betsey Stevenson and Justin Wolfers money and happiness together by more textured understanding of an also measures life evaluation united moolah and mirth after Richard establishing a threshold till which economy. However, Graham says that but they base it on a more closed Easterlin, an economist and professor they hold hands before parting of the above pillars, the top priority for question like “how does your life Does a higher income make people happier? at the University of South Carolina, ways. For instance, in 2003, British the Bhutanese government is to boost fare on a 10-point ladder where 1 The jury is still out on this separated them in 1974. While the economist Richard Layard set the country’s economy as it will be the is the worst and 10 is the best?] Easterlin Paradox stated that rise in $15,000 as the point beyond which key to reducing poverty and improving According to Graham, open- and income does not necessarily increase money does not fetch happiness. health and literacy. “GNH emphasises close-ended questions generate BY SMITA PRANAV KOTHARI happiness, the new research refutes In his 2005 work, Layard reset environment, governance and culture diff erent responses. “A closed the point at $20,000 a year. but half their game is not that far off question is framed in relative terms But on a macro level, what does Gross National Product,” she says. for the respondent and answers to the country’s GDP say with regard to Many organisations conduct this question correlate more closely A rice farmer in Bhutan; Bhutan was the happiness-meter of its citizens? surveys across the globe and rank with income within and across the first country to institute Gross National Carol Graham, who is a senior countries on the basis of happiness countries than open-ended life- Happiness as a measure fellow at the Brookings Institution, a or aspects of it, calling them satisfaction questions,” she says. of prosperity nonprofi t public-policyIND organisation emotional well-being,IA prosperity Moreover, Graham adds that based in Washington DC, and author and so on. The Gallup World Poll the ladder question used in the of several books on happiness (used in most happiness surveys new study is the most framed including Happiness Around the like Legatum Prosperity Index, life-evaluation question and is World: The Paradox of Happy Peasants UN’s World Happiness Report, etc) linked most closely to income. and Miserable Millionaires, says The new study utilises Gallup GDP is a comprehensive indicator of data on the life-evaluation question happiness. “GDP per capita captures High income and not queries on emotional country-level unobservables such improves one’s well-being. Interestingly, Gallup as freedom and governance, public evaluation of life, rankings based on the latter goods, environment, etc, all of which parameters show that money matter a lot to well-being (economists’ but not emotional doesn’t impact happiness, results term for happiness),” Graham says. well-being, which is that are contrary to the new study. However, Terry Babcock-Lumish, the quality of one’s (Latin American countries like a professor of social sciences at West Panama top the rankings in the Point, thinks the contrary. She says everyday experience 2012 Gallup Poll, while Singapore GDP rarely considers components of languishes at the bottom. However, on quality of life like pollution, , the basis of their GDP per capita, CIA or how unevenly goods and services World Factbook ranks Singapore at 7, are enjoyed by a nation’s citizenry. while Panama is way behind at 89). Perhaps for this reason, Bhutan, measures emotional well-being Graham adds that life-evaluation the fi rst country to introduce Gross across 160 countries by asking its questions that consider a longer National Happiness (GNH) as a citizens fi ve questions like “Did you time-period in a respondent’s life measure of prosperity, considers smile or laugh a lot yesterday?” correlate more closely to income three factors besides socio-economic Daniel Kahneman and Angus as it includes people’s ability to do development to compute GNH: Deaton, scientists involved with the what they want to do with their lives. Cultural preservation, environmental poll, defi ne emotional well-being In contrast, emotional well-being protection and good governance. as “the emotional quality of an questions incorporate a shorter time- Sangay Dorji, programme offi cer individual’s everyday experience”. In period (daily experiences) and are less at Bhutan’s GNH commission, their article, “High income improves associated with money because, after says, “GDP is heavily biased evaluation of life but not emotional a point, money can’t make you smile towards increased production and well-being”, the duo mentions more. This is probably why the study consumption, regardless of the that traditionally well-being was by Stevenson and Wolfer with the necessity or desirability of such limited to life evaluation (what life-evaluation question, and that too outputs by continuously inducing people think about their lives). a closed one, as its basis proved that

Corbis people in labouring for higher In 1974, Easterlin measured life money is married to happiness.

22 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 23 FEATURES: CORPORATE ACCOUNT

Jet Airways Chairman Naresh Goyal (left) and James Hogan of Etihad Airways signed a code Measuring Up sharing agreement in 2008. In 2012, 19 percent of Etihad’s revenue came from codeshare with HOW partner airlines.

is that Naresh Goyal’s business model ETIHAD was broken and would not have been able to last very long (see: Jet Airways: Heading South). Old Jet soldier Saroj ETIHAD ETIHAD WILL Datta, who has been part of the airline + EQUITY Net Profi t since its inception, minces no words ($ million) ALLIANCE PARTNERS on the situation. “Raising funds was 2011 2012 DIGEST proving to be extremely diffi cult, and Passengers survival would have been tough if 14 42 (million) not impossible,” he says. Datta had Passengers JET been part of Jet’s senior management (million) 2011 2012 2011 2012 Abu Dhabi-based for 18 years and has been reading the 74 writing on the wall for years now. 8.4 10.3 Etihad has a unique Jet Airways lost its lead position Fleet Destinations Fleet Destinations Size airline-cum-airport INDin the Indian marketIA over the past Size strategy that is likely fi ve years after low-cost carriers 70 86 379 384 to change the way Jet (LCCs) hit their stride. Goyal was unable to adapt to this shift in market operates. It promises preference for LCCs, but not for want to be an interesting of trying. In fact, he tried too hard and partnership. fell fl at. From acquiring Air Sahara to fend off Vijay Mallya and Kingfi sher, JETJET AIAIRWAYSR

to lobbying fi ercely against foreign Net Profi t Passengers BY CUCKOO PAUL airline investment, to trying to make ($ million) (million) his own low-cost airline Jet Konnect FY 2011-12 2011 2012 click, he tried everything in the book -89.4 17.3 16.9 and outside it. Nothing worked. Jet’s Fleet Destinations debt mounted to $2.1 billion and FY 2012-13 Size needed rescuing by a white knight. -243 98 69 Will Etihad save Jet? Addisson tihad Airways’s latest carrier to come into Etihad’s strategy where Abu Dhabi becomes a its older and possibly more glamorous Schonland, president of Innovation Source: Company website Australian CEO James embrace. When the formalities are crucial hub in this part of the world. rivals Emirates and Qatar Airways. Yet Analysis Group, an aviation-focussed Hogan doesn’t have to complete over the next few months, Etihad’s expansive web of bilateral it is gradually making a mark through market research company based in alliances. Jet will have to “up Ethink too hard about Etihad will own 49 percent in the agreements with many airlines is its unique model. It already boasts of the US, says: “We have seen airlines its game” and that would mean what to say. This week, he said: loss-making Serbian national carrier. built on the reality that airline hubs the largest network for any Middle tied into the Etihad network; [they] a change of pace for its people. “Etihad will discuss ways to further At diff erent times in the past bring economic prosperity. In many East carrier, even if less than a third of all show big improvements once Every alliance is only as good as its integrate the two networks and two years, Hogan has made very ways, Hogan is thus not only shaping it is operated with its own metal birds. they come under the umbrella. So weakest partner, and Jet wouldn’t help the airline achieve effi ciency, similar statements about Air Berlin, the future of Etihad, but even the I would expect to see the same at want to be the weak link, he says. build revenue and reduce costs.” Aer Lingus, Air Seychelles, Virgin future of the Emirate of Abu Dhabi. REBUILDING JET Jet.” According to Schonland, the Looking ahead on the changes in He wasn’t talking about Jet Australia and Jet Airways. Just a In fi nancial terms, Etihad’s Hogan’s strategy for Jet Airways and challenge will be how the people at Jet’s network, Amber Dubey, partner Airways, his most high-profi le decade old, the mid-sized Etihad investments have just begun to pay India is unlikely to be very diff erent Jet deal with this change. Change is and head of aviation at KPMG, says investment which is likely to be given (70 planes, mostly wide-bodies) has off . In 2012, revenue from codeshares from what he has done around coming, he warns, no doubt about it. Etihad will now have access to 26 permission for take-off any time now. been executing its own version of the with partner airlines was about 19 the world. Though the Foreign Schonland says the folks at Jet Indian cities. A lot of the key decisions He was speaking in Belgrade, where ‘string-of-pearls’ strategy around the percent of total revenues. Codeshare Investment Promotion Board cleared will have to realise that their focus will obviously be taken jointly. The he signed an agreement with the world, and Jet is only one of them. At and equity partnerships delivered Etihad’s proposal to pick up a 24 is not on Indian competition, but new deal will change the nature of Serbian deputy prime minister to pick the core is not just an equity holding, close to $629 million. In terms of percent stake in Jet, the deal drew global competition. Etihad and its international routes for Jet. Most

Punit Paranjpe / Reuters up a majority stake in Air Serbia, the but a well-crafted airline-cum-airport scale, though, Etihad is still far behind much fl ak for being a sellout. Reality partners compete against global European services are likely to be Sameer Pawar

24 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 25 FEATURES: CORPORATE ACCOUNT dropped and the focus will be on Jet Airways: The Etihad group has been able to connecting to Etihad’s hub in Abu renegotiate deals with suppliers. The Dhabi. Jet will become more regional, Heading South fi rst meeting of all the CEOs in the with a heavy focus on providing 2007-08 08-09 09-10 10-11 11-12 12-13 group was held in May this year. passenger feeds to Etihad. Ernie Arvai 0 The airline industry is notorious for -200 of aviation consulting fi rm AirInsight losing money hand over fi st. Alliances, -400 says the two airlines will try to tie-ups and sharing of resources have -600 provide a more seamless experience -800 been standard practice around the for passengers. Aircraft acquisition, -1000 world for decades. Code-sharing is seat confi gurations, and cabin service -1200 a tool used in dozens of variations will be much more integrated. -1400 by airlines to fi ll their seats. In many

Arvai says the only question Fiscal Year Losses After Tax (Rs. Crore) ways, Etihad is likely to succeed mark is on how deep the alliance Source: Company website because unlike open-ended alliances, will be in operational as well as it has equity and control. The large marketing activities. Given the strong Etihad’s Global Stake alliances (like Star or Oneworld) are management team at Etihad, they co-operative. The Etihad version are likely to establish a plan that % Stake comes with a lot more power because will slowly integrate the aspects Airberlin 29 equity means enforcing rather than that could result in savings, and Aer Lingus 2.9 persuading traffi c to board Etihad, aggressively move forward with those. says Schonland. He is convinced Air Seychelles 40 The fi rst focus could be on ground the model is scalable as long as it Virgin Australia 19.9 handling at jointly used airports, INDcontinues to beIA fi nancially strong and in which one airline will handle *Jet Airways 24 can aff ord investing in each deal. the other’s passengers and baggage *JAT Airways (Now Air Serbia) 49 Speaking on the sidelines of the without duplication of eff orts. * Deal not yet complete IATA annual general meeting in Cape Yet, to really understand what Town earlier this year, Hogan had Jet is likely to go through, it might shared his global plans with the media. help to look at what Etihad has tie-ups is the careful nurturing He is convinced that Etihad will grow done with other airlines globally. of loyal customers. Hogan has organically. Real acceleration for the developed a collection of frequent airline begins in 2015-16, when it starts THE ETIHAD WAY fl ier programmes (FFPs) from airlines taking deliveries of big birds like the In some ways, Hogan and his backers that it has a stake in and plans to weld A380 and Boeing 787. In his mind, the in Abu Dhabi are like the Lakshmi them into his own. In India, an early day is not far when Air Berlin could Mittals of the airline industry. Just step was to pick up half of Jet’s FFP fl y directly to India. This seems to as the steel billionaire fashioned an Jet Privilege fl yers for $150 million. be wishful thinking, considering the empire by buying up key, mostly- The ability to earn and burn miles is opposition there was to the Jet-Etihad distressed, steel projects and turning critical to the creamy layer of airline tie-up. Amber Dubey, who has been them around to form a larger empire, customers. Etihad also owns 70 advising both the Ministry of Civil a big part of Etihad’s ‘multilateral’ percent in Air Berlin’s FFP Topbonus. Aviation and airlines, is among the strategy is to identify loss-making The third is increasing effi ciency. few opinion leaders bullish on the airlines with access to key source Though Etihad’s equity tie-ups are deal. He says it will help the Indian markets. For example, the deal with still in the early stages, Hogan says civil aviation industry by enhancing Air Berlin provided access to the they have led to costs going down capacity, increasing competition German domestic market—one of by over 5 percent last year. This can and bringing down airfares. He is the largest in Europe—in the face work in not so conventional ways. all for freeing the airline business of bilateral restrictions. Like Dubai For example, Air Berlin was cutting from FDI restrictions. “Let there be and Qatar, Abu Dhabi too has little jobs last year, mostly pilots and crew. as many foreign airlines operating to boast about in terms of a home Half the pilots were transferred to in India through their 100 percent market. The latest deal with Air Etihad even as the German carrier cut subsidiaries or by buying into Indian Serbia allows access to the Baltics. its fl eet and its majority shareholder carriers. India will only gain,” he says. The second feature of all of Etihad’s prepared for international expansion. So will Etihad.

26 | FORBES INDIA | AUGUST 23, 2013 FEATURES: BIG BET ZOPNOW TAKES A CRACK AT Bal Krishn Birla (left) and Mukesh Singh, Zopnow founders, at their warehouse in ONLINE Bangalore GROCERY Few companies have managed to crack INDthe onlineIA grocery challenge—a hyperlocal business. Can Bangalore’s Zopnow break the jinx?

BY ROHIN DHARMAKUMAR

serendipitously, Zopnow ended impossible. Very few companies have up unearthing a huge market for managed to crack the economics of products sold under a yoga guru’s this low-margin space anywhere in the name in what is arguably India’s world. Everyone knows of Webvan, most modern retail market. one of the ‘stars’ of the dotcom “Because they are not available implosion, by virtue of going belly everywhere, Baba Ramdev’s up after spending and raising over a [products] are what I would call billion dollars by 2001. Even Amazon, ‘low-distribution’ products. So the a company possessed of almost store loyalty you can get by satisfying boundless ambition and capital, spent a fan of Baba Ramdev’s Amla Candy, nearly fi ve years delivering groceries you’ll never get by selling someone in just a few Seattle neighbourhoods Maggi,” says Damodar Mall, the before expanding into a couple of head of customer strategy for more US cities earlier this year. Reliance Retail’s value business.

on’t forget to get of being an IIT graduate, former who he was going to meet. The Birla is co-founder and CEO. “We NO COUNTRY FOR SLOW MEN me a 2-kilo pack CTO at online classifi eds company detergent wasn’t to be picked up stock over 100 SKUs [stock-keeping The grocery space has long held a of Baba Ramdev’s Asklaila, one-time restaurant owner, at Patanjali Yogpeeth in Haridwar, units] of Baba Ramdev’s products and mythical status among ecommerce “Ddetergent brainchild behind a 20,000-member- where Ramdev’s business empire is he is one our fastest-selling brands,” entrepreneurs because of its sheer size THE GROCERY SPACE powder,” said the voice on the other strong global community of old headquartered, but from a 2,500-sq he says. From soaps to spices to and repeatability. Every household HAS LONG HELD A end of the phone to Bal Krishn Birla. Hindi music afi cionados and the ft warehouse in Kudlu, Bangalore. fl our to cosmetics, these products needs groceries. And very few derive MYTHICAL STATUS Birla, as he is known to most people source of an unending supply of The warehouse belongs to Zopnow. are apparently giving competitors enjoyment from buying them. IN ECOMMERCE DUE in Bangalore’s closely-knit startup “PJs” of dubious antecedents. com, a two-year-old Bangalore from the likes of Hindustan Unilever, It’s a category that is ideal to ecosystem, is a jovial 40-year-old The person Birla was talking to startup operating in that infernal Nestle or ITC a run for their money. be “disrupted” by the internet. TO ITS SHEER SIZE

Sudhanva Atri for Forbes India for Atri Sudhanva who defi es classifi cation by virtue was a former colleague and friend hell of ecommerce: Groceries. Ironically, and somewhat Except that doing so is damn near AND REPEATABILITY

28 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 29 FEATURES: BIG BET

In India, the last three years have still tentative and confi ned to Reliance Retail, he worked with the ordered by a customer. An in-house out economically,” says Mall. seen a mushrooming of grocery one city, they are promising. Future Group’s Big Bazaar and Food designed software (almost all of the But Birla claims that thanks to ecommerce sites in many metros Zopnow’s average order size Bazaar, and Hindustan Unilever), IT has been designed in-house—the volumes and technology, Zopnow (see chart). Everyone is blinded by has gone from approximately Rs says he doubts the ability of any side-eff ect of having two CTOs as today “clubs” nearly three times the size of the overall market: $35- 700 when it started to around Rs grocery retailer to generate more than founders!) automatically generates as many orders per delivery route 40 billion worth of FMCGs across 1,300 today, claims Birla. That’s 3 percent in terms of net profi ts. “picking sheets” which tell an than when it started. As a result the country, of which modern retail about the same ballpark as most “An online grocery business needs employee the exact sequence and the average distance travelled accounts for around 5 percent. leading ecommerce sites in India. to track its profi tability at four levels location of products to be collected. per order has fallen nearly 60 “In cities like Mumbai, almost 40 But the “stickiness” of the grocery —the SKU, the basket, the warehouse “We take around one minute to percent during the same period. percent of grocery orders already category combined with the loyalty and fi nally, the company,” says Birla. pick an SKU currently, compared to To even out the orders across happen over phone, so the customer Grocery shopping: of its customers, three out of four of He says Zopnow has always been two to three minutes when we started slots, Zopnow claims it’s had good is ready for non-store off erings, Who’s checking in which order regularly from Zopnow, profi table on the fi rst two counts, and out. Our goal is to bring that down success through the use of proprietary including the internet,” says Mall. allow it to generate much more is six months away from becoming to 20-30 seconds soon,” says Birla. reward points called “Zoppies”. Many Though none of the players gives revenue from each. “Many of our profi table on its fi rst warehouse. If that sounds unimpressive, customers are okay trading their BANGALORE out revenue numbers, research customers order as often as three Birla expects the newer consider the fact that it currently delivery slots in lieu of extra points, Big Basket (VC-funded, growing indicates that the largest player in the aggressively) times a month from us,” he says. warehouses that he puts up, beginning claims to stock over 10,000 SKUs. says Birla. And once the order is on space is BigBasket with an estimated That means a revenue of nearly Rs with one in north Bangalore in “An average kirana store stocks its way, a customer can track the Zopnow (VC-funded) revenue of $4 million, followed 47,000 per loyal customer annually. a couple of months, to become 1,500 SKUs while a Big Bazaar location of Zopnow’s delivery staff Town Essentials (self-funded, has a great by Zopnow, which is around $2 reputation for fresh vegetables & fruits) “When we started out, we were profi table in 12 monthsIND compared to usually has 7,000-8,000IA SKUs,” live on her browser or mobile app. million in revenue, and MyGrahak. told by many people, including the 24 months it took his fi rst one. he adds by way of comparison. Meanwhile, back at the warehouse, By and large, the majority of players DELHI-NCR venture capitalists, that 6-7 percent The reason, he says, is volumes will Post picking, a barcode-based another software automatically restrict themselves to pre-packaged MyGrahak (self-funded, largest player was what we could expect in terms pick up much faster because potential checkout process eliminates any sends out replenishment orders to food and consumer goods, staying in NCR) of gross margins,” says Birla. customers already know of his brand. manual errors. The bags fi lled with manufacturers or distributors based clear of easily perishable produce Aaramshop (self-funded, works with local While it’s true that many staples In July last year, Accel, Qualcomm products are then assigned to one on depleting inventory due to order kirana stores to deliver orders) like vegetables, fruits or meats. Those and foods off er only low single- and Times Internet invested $2 of the 35 delivery employees, once fulfi lment. Birla claims a three-hour that do deliver fresh vegetables, like PUNE digit margins, concedes Birla, the million in Zopnow, according to again based on an algorithm designed delivery window helps Zopnow BigBasket or Town Essentials, have Pune Express objective should always be to sell Venture Intelligence, a research in-house, which takes a customer’s turn over its inventory much faster a much more complex supply chain. Ration Hut the customer a more profi table service focussed on PE and M&A. precise latitudes and longitudes into than competitors. “We currently Yet, selling groceries online is “basket” that combines, say, sugar at Big Basket, its larger competitor account. Deliveries to farther suburbs turn over our inventory in 21 days, PulsesNbeans quite unlike most other forms of 6 percent along with organic staples that also started from Bangalore and are done through vans that can carry but want to improve that to 15 days. ecommerce. For one, you cannot MUMBAI at 30 percent and steel utensils at has now expanded to Hyderabad enough orders for two three-hour Our suppliers give us two to three create economies of scale across BigBasket 60 percent margin, respectively. and Mumbai, raised $10 million slots (Zopnow off ers four distinct weeks of credit in turn,” he says. the country. Grocery retailing LocalBanya Free from the constraints of in- in venture funding last year. three-hour slots for delivery). Added with the fact that customers makes sense only at a “hyperlocal” store display and checkout formats, But the ace up Zopnow’s sleeve “Unless you have a network of pay cash the same day, Zopnow is EkStop level, because products need to be Zopnow uses custom analytics is the “three-hour delivery” promise physical stores, doing a three-hour close to achieving a zero cash fl ow stored and shipped at as minimal to get customers to add more —either a stroke of genius or a delivery profi tably is impossible. status on inventory, thus freeing up a distance from the customer as “Raising money turned out to be products into their virtual baskets. millstone around their neck. Because it means you’re shipping its cash for more productive uses. possible. Even the assortment of very tough for us. Many VCs told us And as the average number of items every order without getting the “After covering all of Bangalore, products is specifi c to local tastes and they’d write us a cheque only if we in its customers’ baskets has gone THE THREE-HOUR DELIVERY time to aggregate. And small orders our next focus will be on Pune and preferences: What sells in Bangalore decided to start any other ecommerce up from 8-9 when they started out Six to 12 hours is the average sent over long distances never work Gurgaon—two cities with high may not in Gurgaon or Pune. business,” says Birla. But he and to 20-22 now, Birla claims Zopnow’s delivery promise for most of internet penetration, highrises and “In grocery retail, there is little Mukesh Singh, Zopnow’s other co- gross margin has risen to a healthy Zopnow’s competitors, with a few people working in the IT sector. advantage gained from a national founder, persisted, drawn towards 15 percent with added scope to rise even taking up to 24 hours. To be Over the next two years we want presence because the supply groceries because it represented up to 20 percent over the next year. able to deliver orders within three to be in fi ve cities, going up to 20 chain and assortment in each city a “multi-billion dollar domain” That gross margin can easily hours, Zopnow has solved quite cities in the long run,” says Birla. needs to be localised. So each and because they fi gured that translate into a net profi t margin a few supply chain problems. THE ‘3-HOUR DELIVERY’ Big dreams, those. But what the city ends up being largely like an sooner or later Indians were going of 6-7 percent, says Singh, 38. To begin with, the placement of PROMISE IS EITHER A world will be watching is something independent business,” says Mall. to want to spend their weekends Most large grocery retailers, products in its warehouse has been STROKE OF GENIUS OR else: How the business model for Margins are often razor- vacationing or entertaining, instead including Walmart, operate at nearly optimised for the fastest “picking online groceries gets established. thin, and deliveries cannot be of worrying about groceries. half that fi gure. Mall, a veteran of time”—the time taken by one of its A MILLSTONE AROUND There is more at stake in Zopnow outsourced to third parties. And though the results are the modern grocery trade (before staff to assemble all the products ZOPNOW’S NECK than merely its business success.

30 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 31 FEATURES: STRATEGY

those like China Mobile that are eff ect [a psychological eff ect on monopolies in their local markets. customers when they are unfamiliar GLOBAL BRANDS FROM with a product] is also at play. “All B2B CAN DO WITHOUT BRANDING Western consumers, when asked “In B2B marketing, brands play a what they think of a brand that EMERGING ECONOMIES very small role,” says Kumar. “You comes from India or China or any go to the man on the street and ask other emerging market, say it will Companies in emerging markets may not need to build brands. But, if they him to name any of the top B2B be of poor quality,” says Kumar. do, China can show how. It is far ahead of the game than India brands. Chances are he won’t be able The irony, of course, is that to name any. You ask people about consumers from emerging markets ABB, nobody knows about ABB. think the same about brands from BY VIVEK KAUL Before it became Sony-Ericsson, their own countries. “Even Indian nobody knew of Ericsson either.” and Chinese consumers would ig ideas often come out of [a brand consultancy] 100 global started to fi gure out how, if emerging Nevertheless, there are some B2B say that brands coming from small conversations. This brands list had come out. Not a market brands had to go global, companies that have been able to build emerging markets, including their seems to be the case with single brand from the emerging they would need to go about it.” big brands. But they are exceptions. Nirmalya Kumar, professor of marketing, own, are of poorer quality than London Business School Bmarketing guru Nirmalya markets was on it,” says Kumar, Kumar and Steenkamp found “General Electric gets a branding Western and Japanese ones.” Kumar’s latest book Brand Breakout: a professor of marketing and co- one part of the answer in the list because of being in washing machines How Emerging Market Brands Will director at the Aditya Birla India of the top 500 companies in the and other electronic goods.IND Shell gets “THE LOGICIA OF A BUT BRANDS CAN BE BUILT Go Global, which he has co-authored Centre at London Business School. world. China has 73 companies on a name because of gas stations. IBM PRODUCT COMPANY The dearth of global brands from with Jan-Benedict EM Steenkamp. “JB and I started talking about it—the second largest after the US. has a brand name that is consumer- emerging markets can be corrected “This book started one evening in why things are the way they are. First And here’s the nub: Most of these oriented because they were in PCs IS VERY DIFFERENT in the time to come. There are a my apartment [in London] when I we came up with reasons why there are business-to-business [B2B] and they have been around for 100 FROM THE LOGIC OF number of strategies that companies was sitting with my friend JB [Jan- were no emerging market brands companies, or those in the business years or more. Otherwise IBM A SERVICE COMPANY” in these countries can follow in Benedict]. The latest Interbrand on the Interbrand list. Then we of extracting natural resources, or would not be a known brand,” says order to build brands in the West. Kumar. “There are companies like One is to use the diaspora route. Tetra Pak in packaging or Intel with “This strategy involves companies its ‘Intel Inside’ campaign, which targeting immigrants from their own have been able to build brands.” country and building enough scale and Companies from emerging “No country owns contract sales to support a brand push. You see markets don’t need to build global manufacturing like Bangladesh. When a lot of brands doing that, including brands because most of them are I was in Bangladesh, they told me, Pran [Foods] from Bangladesh, Dabur, not in consumer-facing businesses. we have to have our own brands; ICICI Bank and, to some extent, Take Indian IT companies, for we are tired of manufacturing for SBI, Nando’s from South Africa, and instance. They have concentrated on others. But their existing business Corona from Mexico,” says Kumar. IT services, and not built products model is so profi table, the question The second is the cultural where they would have needed is do they need to develop brands?” resources route. Even though brands to create brands. “I suspect that Also, to build a global brand in the from emerging markets are considered the logic of a product company is business-to-consumer (B2C) space, to be of inferior quality by Western very diff erent from the logic of a companies need to create awareness consumers, there are certain things service company,” says Kumar. among Western consumers through that are regarded positively. “Even This is precisely why contract advertising and marketing—that though Brazil has a poor image manufacturers in emerging markets may be an expensive proposition for any brand that comes out of it, haven’t developed brands. “Their for emerging market countries. nobody questions Brazil for fun, existing business model is very “The United States, Europe and beach, sun and sand. That’s why successful. To evolve into a new Japan are probably the three most they have a brand called Havaianas

If there are 1,000 business model with uncertain expensive places in the world to that sells fl ip-fl ops,” says Kumar. contract manufacturers chances of success and doubtful advertise. Given that, no emerging Similarly, China is known for its in China, maybe 100 of them will decide to build profi tability is unlikely,” he says. market can rationally make a case for ancient medicine and silk. India is their own brand and at least 10 will succeed Kumar cites the example of advertising investment,” says Kumar. known for ayurveda, a culture of

Aly Song / Reuters contract manufacturers in Bangladesh. Besides this, the country-of-origin history, yoga and religion. If a brand Susanne Hakuba

32 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 33 FEATURES: STRATEGY

from an emerging market country WHY CHINA IS AHEAD out of China in the next decade.” positions itself around these things, it Kumar is of the view that companies What also aids Chinese has a good chance of being accepted. in China are better poised than those companies is that they think long- in other emerging markets when it term. Indian companies don’t. BRANDING COMMODITIES comes to creating global brands. “Chinese companies have a long- Another route, which is very “When Japan, South Korea and term orientation, which comes from important for India, is through Taiwan started going down the path Confucius. They are playing for the branding commodities. India has of globalisation, their quality of next 100 years. They are not playing several such opportunities from products was poor. Over time they put for the next 10,” says Kumar. Darjeeling tea and Mysore coff ee to in R&D investments “And there is a reason for Basmati rice and Alphonso mango. to improve the that: Indian companies are Once countries are able to brand quality. China is the borrowing at very high rates commodities, they are able to get a only exception as an from the capital markets. The price premium on that. “We have emerging market; major Chinese companies shown it with Columbian coff ee they have world-class have state banks that are (in our book). Even when coff ee manufacturing and supporting them to some prices dip, Columbian coff ee prices nobody questions extent. So they are not paying don’t dip as much. And Columbia the quality of the same interest rates, and is not even the largest producer of Chinese products can play the longer game coff ee. It is Brazil,” says Kumar. when they are much better,” he adds. First, the geographical region produced to Western The Chinese government, where a particular commodity specifi cs,” he says. INDtoo, hasIA an eye for the future. is produced needs to be defi ned And it is easier “We might complain that properly. “I have not seen any eff ort to brand a product that is already the Chinese state is oppressive, on this front in India. I know there is high on quality. Kumar explains this but I have to grant one thing to the a Tea Board [of India] but there is a with a thought experiment from Chinese government—they do make need for a Darjeeling tea board that his book. “Assume there are 1,000 big bets for the future,” Kumar says. authenticates things,” says Kumar. Chinese manufacturers on contract Take, for instance, their bet on Second, the production process for Western product companies and urbanisation: “China knew 30 years needs to be tightened. “There are 14 brands. They are manufacturing ago that urbanisation is going to take steps that go into making some kind iPads and iPods for the world. So place and they needed to have the of wine in France. I bet you that even they can’t be bad. Out of those 1,000, infrastructure in place. They built nine of them are not necessary. But let’s say 100 decide to build their own that infrastructure. Today you can it’s a way to show people that a lot brand and try to diversify out of the say that the Shanghai-Beijing train of care is being taken in producing low-margin contract manufacturing looks half empty. Yes, maybe it the wine to give it special qualities. business where they are always at the does. But they are not building it “Also, a very tough enforcement mercy of Western companies. Out of for today. You have to build the scheme needs to be put in place. the 100 who decide to do their own infrastructure for the next 20 If you try to put champagne on thing, 10 succeed. That means you years. I am sure it is going to be any sparkling wine produced will have 10 global brands coming full some day,” says Kumar. anywhere else, it cannot be called He adds, “The same thing is champagne. Only sparkling wine true for Shanghai and Beijing from the Champagne region in airports. They realise that they France can be called champagne,” are building infrastructure for the says Kumar. And any company next 20 years. We can’t be building using ‘champagne’ for sparkling “ANOTHER ROUTE, an airport every two years.” wine gets sued by the French. WHICH IS VERY This interview was done when “Even the Americans had to IMPORTANT FOR INDIA Nirmalya Kumar was professor of remove the word champagne marketing at London Business School. from their California sparkling IS THROUGH BRANDING He is now a member of the Group wine,” says Kumar. COMMODITIES” Executive Council, Tata Sons

34 | FORBES INDIA | AUGUST 23, 2013 PHILANTHROPY AWARDS 2013

Nominations Now Open

DO YOU KNOW A HERO? DO YOU KNOW OF We’re looking for individuals and A Good Samaritan:IND An individualIA at any level companies who see themselves in a company who has successfully led and as a part of society. People and galvanised support for worthy causes ? organisations who look around and see that much needs to be done to A Cause Marketing Initiative: A company that make India a place where growth is has successfully marketed products or services not restricted to just a few. And who in partnership with a charity? choose to do something about it; who have not just given the time, money, An Outstanding Corporate Foundation: A corporate skill and expertise, but have created foundation that has taken up a with model institutions that will inspire a long-term vision and a sustainable model, and has others and show them the way. already had an impact?

For the 10 categories of these awards, we’re working with our knowledge Perhaps it’s you, or your organisation? partner GiveIndia to draw up short- Perhaps you know of someone else, or an lists. But in three categories, we can’t organisation you don’t work with, who fi ts possibly fi nd out about everyone doing the bill? Then please refer them to us. something worthwhile. Our country is too big for that. We have opened up Neither option applies? You can still help nominations for these three categories. by spreading the good word around.

To nominate candidates for the three open categories of the Forbes India Philanthropy Awards 2013, please visit http://forbesindia.com/awards/philanthropy/nominations

Last date for sending nominations is August 15, 2013. INDEPENDENCE DAY SPECIAL

1991INDIA

201?Business and government need to redefi ne their spaces to expand economic FREEDOM INDEPENDENCE DAY SPECIAL

INDIA CAN’T BE A JUGAAD ECONOMY FOREVER India has to implement key reforms in at least three areas—energy, land and labour—to get its economy back on track. It also needs to expand the ambit of economic and political freedom INDIA BY DINESH NARAYANAN

orld Bank data suggest that India was ninth in the world in terms of new businesses registered in 2011. The cost of starting up a business is still high but W it has steadily fallen from 70.1 percent of per capita gross national income in

2008 to 49.8 percent in 2012. The time taken to start a business in India has Sameer Pawar fallen from 33 days four years ago to 27 days in 2012. Newly released Planning Commission numbers show that India reduced extreme poverty by 15.3 percent in seven years; that is, 138 IS THE INDIA STORY PETERING OUT? business freed. That burst of economic reforms opened million people were lifted out of absolute misery between 2004-05 and 2011-12. In the same As the world was reeling under the impact of the US the fi eld to new competitors and widened the pool of period, millions of Indians moved up the social ladder to be counted as middle class. Sales of meltdown followed by Europe fi ve years ago, the Indian wealth creators. But over the last nine years, the pool luxury cars, designer clothes and high-tech gadgets have been growing at 15-20 percent. A and Chinese economies remained beacons of growth. has remained stagnant, enabling only a limited number Bain & Company report on luxury has been quoted as estimating the number of people with After a mild slump in 2008-09, India quickly recovered of businessmen to remain successful. Even though a disposable incomes of over $100,000 to top 132,000 in 2013, up 60 percent since 2006. the next year. Elections brought the United Progressive Alliance back to power with an improved mandate DOING BUSINESS So, is it time to bring out the bubbly? Not quite. In a costs. India has the largest number of young people among and the latter assumed that nothing more needed to IN INDIA competitive world, you gain only when you outpace your major economies but does not have the mechanisms be done. Hubris set in. It didn’t help that the prime 2013 RANK 2012 RANK rivals, and not merely by doing better than before. Despite in place to train them or fi nd decent jobs for them. minister played the reluctant leader bogged down by India’s Overall Ranking 132 132 all the improvements mentioned above, India ranks a A recent survey by the Centre for the Study of ‘coalition compulsions’. The euphoria soon paved way for TOPIC RANKINGS lowly 132 in the World Bank’s list of countries for ‘Ease of Developing Societies (CSDS) for CNN-IBN shows that the despondency as scams rocked the government, forcing Starting a Business 173 169 Doing Business’. Growth has stagnated at a decade’s low number of people who are satisfi ed with their personal the administration deeper into inaction. The economy is Dealing with Construction of near 5 percent. Refl ecting the economic weakness, the fi nancial situation has dipped over the past two years. The now teetering on the brink because of faulty economic Permits 182 183 rupee is plumbing record lows against dissatisfaction was most pronounced policies, endemic corruption, poor governance and crony Getting Electricity 105 99 the dollar. Industrial growth is barely among the middle class. About a third capitalism that concentrates rather than spreads wealth. Registering Property 94 97 above zero. Consumption demand THE ECONOMY IS of the 19,062 surveyed believed the The government has lost political capital and is resorting Getting Credit 23 23 continues to slump and investments NOW TEETERING country’s economic condition was “so- to fi scally dangerous populism in a bid to get re-elected. Protecting Investors 49 46 have ground to a halt while retail prices ON THE BRINK so”. Nearly half of those felt that the gap It is time to push the frontiers of economic and Paying Taxes 152 149 continue to rise. According to Reserve between rich and poor has widened. political freedom once more. Else, we’ve had it. BECAUSE OF FAULTY Trading Across Borders 127 125 Bank data, private listed non-fi nance India’s Gini coeffi cient (which measures If 1947 brought us political freedom, we took the POLICIES, ENDEMIC Enforcing Contracts 184 184 companies’ sales grew just 4.1 percent CORRUPTION AND income distribution) was 33.9 in 2010 wrong road to prosperity by tying the hands of productive in the March quarter. These companies compared to 30.8 in 1994, indicating forces in the licence-permit-quota raj. That knot was Resolving Insolvency 116 109 are slowing production and cutting POOR GOVERNANCE that income inequality has been rising. untied in 1991, when the economy was opened up and Source: World Bank

38 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 39 INDEPENDENCE DAY SPECIAL

Corruption Perception Bribe Payers Human Development Index (Public Sector) Index (BPI) Index (2013)

1 3 DENMARK UK ISRAEL SOUTH 1 15 AFRICA NORWAY USA NETHERLANDS SOUTH AFRICA 90 74 60 43 0.955 0.936 Very high human Very high human 8.8 7.6 development development

55 85 4 19 RUSSIA BRAZIL GERMANY INDIA 0.788 CHINA INDIA PAKISTAN SOMALIA 0.73 8.6 7.5 High human High human 39 36 27 8 development development

10 27 101 136 146 CHINA INDIA BANGLADESH US CHINA 0.699 0.554 0.515 8.1 6.5 Medium human Medium human Low Human Score development development development Rank Note: Higher score means less Source: Transparency International perceived likelihood of the Score INDIA Note: Higher score means less corruption Rank Score Source: UNDP country’s fi rms to bribe abroad second stage of economic reforms has been awaited inability to acquire land. As on May 1, 2013, nearly half of and demanded for several years, it has not happened. 566 Central sector projects (of Rs 1,500 crore and above) Economists like Columbia University’s Jagdish got delayed due to problems such as lack of clearances Bhagwati have long argued for it. “Further liberalisation (mainly environment-related), inability to acquire land and of trade in all sectors, substantial freeing up of the retail insurgency. The cost overruns for these are estimated to sector, and virtually all labour market reforms are still be around 18.2 percent, the Reserve Bank of India says. pending. Such intensifi cation and broadening of Stage Many of these projects would displace people, destroy 1 reforms can only add to the good that these reforms forests and overrun fertile farmlands, all politically do for the poor and the underprivileged,” Bhagwati sensitive issues. Some industrialists have given up. South told Indian Parliamentarians three years ago. Korea’s Posco and Arcelor Mittal have quit after trying But the din of multi-crore scams, scandals and a for several years to set up mega steel plants in Odisha. dysfunctional parliament has buried the chances of The state is set to lose lakhs of crores in investments. any near-term improvement in the business climate. Industries are also struggling to fi nd skilled workers. Thousands of students passing out of schools and colleges THE BIG DRAG are unemployable. The government’s skill development So what can be done? Although there are several areas policy is in a shambles and what may have been a that are crying out for policy reform and entrepreneurial demographic dividend now threatens to become a burden. freedom, three major ones—land, labour and energy—are Some of the issues are vexed but some are easily creating the biggest bottlenecks to the India growth story. addressed provided there is a committed leadership. None of the problems in the three areas has easy answers. Institutional structures need to be reviewed and The Confederation of Indian Industry has presented predictability and consistency restored to government a list of 62 stalled infrastructure projects—each worth Rs policy. In the following pages, experts in various 1,000 crore or more—to the Project Management Group fi elds analyse some of the key problems facing the in the Cabinet Secretariat for fast tracking. Of these, 35 country and what can be done to address them. India are power projects and 11 are for construction of roads cannot aff ord to waste its entrepreneurial energy and highways. Most of these projects are stuck because of and spirit of innovation. The time for jugaad, in the lack of environment approvals, state level clearances or multitudinous meaning of the word, is over.

40 | FORBES INDIA | AUGUST 23, 2013 INDEPENDENCE DAY SPECIAL

HOW TO RESCUE THE Profile: Keki Mistry is vice GOVT-BUSINESS chairman and CEO of HDFC; he’s been associated EQUATION with it since 1981. Instrumental in setting up HDFC Business needs an group companies, including HDFC enabling environment Bank. A chartered accountant, he from government. But has consulted for Mauritius Housing the relationship between Company, Asian government and business Development Bank and Common- wealth Develop- INDIA has fallen to a new low. ment Corporation This needs fi xing in Thailand, Mauritius and the Caribbean Islands.

BY KEKI M MISTRY

s India marks its 67th Independence Day, there is growing trepidation as to what the future holds for the country. Any assessment of the current economic scenario is swathed A in pessimism. The heady days of aspiring for double-digit GDP growth rates have long a signifi cantly improved growth scenario the masses. Yet it is estimated that a developer The irony is that in the current year remain bleak. in India, consumer in Mumbai requires over 50 approvals from since been put to rest as we appear to have squandered the opportunity. Nonetheless, confidence not everything in India needs to be painted with the brush of doom. There are a number of Twenty-two years after ushering in has sustained, diff erent bodies to put up a residential building. liberalisation, India once again fi nds itself while business These approvals result in severe time and cost sectors that have performed well despite varying economic cycles. Sectors like FMCG, IT/BPO, confidence has pharmaceuticals and retail fi nance have remained resilient despite the economic downturn. on a precipice. However, unlike the 1991 taken a beating overruns, the burden of which eventually falls on crisis which brought in ‘big bang’ reforms, the buyer of the home. It has been a long-standing Rising rural incomes have been a shot in the arm for optimism about its future. Driven by India’s vast domestic the current milieu most urgently calls for administrative demand of developers to put in place an online, single- FMCG companies. The $100 billion IT/BPO industry consumption, several multinationals have recognised reforms to re-instil confi dence in the economy. Government window approval mechanism. This will not only bring has created over 12 million jobs, as India became the the importance of having a slice of the Indian market. approval processes are often perceived to be fraught with in much-needed transparency, but will also streamline back offi ce to the world. Another striking example of a The irony is that in India, consumer confi dence delays, vested interests, opaqueness and speed money of co-ordination between approving bodies. This is a simple well-performing sector is retail fi nance. Given the huge has sustained, while business confi dence has taken large proportions. Any benchmark comparison of India administrative process and an IT platform can easily be demand, home and personal loans, credit cards, two- a beating—particularly with regard to companies with other countries—be it Transparency International’s built. Unfortunately, this is not being implemented. wheeler and car loans have grown exponentially over the in the industrial and infrastructure sectors. Corruption Index, Ease of Doing Business or the Economic The relationship between government and business past decade. Retail credit penetration at 10 percent of GDP Though global economic conditions continue to remain Freedom Index—has India at the bottom of the heap. appears to have fallen to an unprecedented low. It is extremely low, so the potential to grow is immense. fragile, India’s problems today are mostly self-infl icted. This perception has to be removed, as has been reported in the media that Perhaps the most radical, structural change in India’s Persistent bottlenecks in infrastructure have resulted India needs large amounts of foreign NOTHING IS MORE some leading industry houses have economy in the recent period has been the rise of its in the drying up of the investment pipeline. Prolonged investment to support long-term growth. UNNERVING said that they fi nd it easier to make middle class. McKinsey estimates that the size of India’s sluggish industrial growth, an unsustainable current Take the example of the approval FOR BUSINESS investments overseas rather than wait middle class will cross 600 million by 2025, making the account defi cit, constant fl ip-fl ops on foreign direct processes for real estate projects. No one endlessly for approvals. Nothing is country the world’s fi fth largest consumer market. What investment (FDI) policies and a rapidly depreciating disputes the acute shortage of homes SENTIMENT THAN more unnerving for business sentiment characterises this middle class is its high aspirations, a currency have taken a toll on the economy. Having barely in India or that an increase in supply UNCERTAINTY than uncertainty in the regulatory

Prasad Gori for Forbes India Prasad Gori for ‘wanting more’ consumer mindset and its confi dence and scraped 5 percent GDP growth last year, prospects of will make housing more aff ordable for IN REGULATION environment. In the infrastructure Getty Images

42 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 43 Getty Images 44 on policieshaserodedinvestorconfi sector—be ittelecom,power,orroads—lackofclarity an insulationofthepolicefrom directpoliticalinfl police reformsareimplemented. Thisessentiallyentails hour. Similarly,thelawsof landwillberespectedif pending courtcases,judicial reformsaretheneedof breeding groundforlaw-breakers. Withover30million justice isnotdeliveredontime,thenationbecomesa remain pervasiveunlessthejudicialsystemisfixed. If the bottomlineremainsthatcorruptioninIndiawill to corruption.Irrespectiveofwhichpoliticalpartyrules, undoing hasbeenhowimmuneitscitizenshavebecome with minimalgovernmentintervention.India’sgreatest the growthofbusinessinafairandtransparentmanner enabling environmentthatsupports making byputtingasidevestedinterests. governance entailsquickdecision- sheets ofthebankingsystem.Eff have severelystrainedthebalance created. Delaysininfrastructureprojects empowered groupsofministersare slowed down.Foreverypolicydecision, the decision-makingprocesshas decision thatislaterperceivedtobewrong?Asaresult, be repercussionsevenafterrelinquishingthepostfora when thereisnopenaltyforinaction,butcould Today, whywouldabureaucratrisktakinganydecision moving becausethegovernancesystemhasbrokendown. Business freedomentailsan The wheelsofthegovernmentmachineryarenot | FORBESINDIAAUGUST 23, 2013 ective dence. CORRUPTION HAVE BECOME TO CITIZENSITS BEEN HOW IMMUNE UNDOING HAS INDIA’S GREATEST DAY SPECIAL INDEPENDENCE uence. in changingthecoursefor nextgeneration. attempt atsettingthehousein orderwillgoalongway potential atreasonablevaluations thatIndiahas.Asincere countries havethedemographicadvantageandgrowth attracted investorstwodecadesago—arestillintact.Few optimism. India’sfundamentals—theveryreasonswhich also pavethepathtowardsincreasedbusinessfreedom. prefer jobsandgrowththanvote-buyingsops.Thiswill of theelectoratearefastchanging.Theywouldrather and industrialproductivity.Earlier,stategovernments for infrastructureprojectsandimprovingagricultural include landreforms,urbanisationpolicies,clearances reforms liewithintherealmofstategovernments.These elections, itisimportanttorecognisethatmanycrucial businesses aretothriveinaconduciveenvironment. The judicial-police-politicalnexushastobebrokenif Investing inIndiahasalwaysneededpatienceand While muchfocuswillbeontheoutcomeofgeneral D N I the boot.Thedesiresandambitions back, whilethosethathaven’taregiven delivered ongrowthhavebeenvoted Political partiesinstatesthathave muscle toeff ectmajorpolicychanges. their assemblies,whichcangivethemthe states havecomfortablemajoritiesin case. UnliketheCentre,today,most government. Thismaynolongerbethe tended tofollowthediktatsofCentral (The views expressed by theauthorare personal and donotrefl ect thoseofhisorganisation.) IA productivity improving industrial projects and for infrastructure include clearances governments. These the realm of state reforms liewithin Noida. Many crucial factory in Greater Inside aHonda

INDEPENDENCE DAY SPECIAL

HOW TO MAKE INDIA A WORLD

Profile: Swati LEADER IN Piramal is the vice chairperson of Pi- ramal Enterprises LOW-COST and director of Piramal Health- care. She was the fi rst woman VP HEALTH CARE of Assocham in 2008. She’s also Bad regulations and price a member of the Planning Com- Price controls have control are stifl ing pharma, mission and has kept drug prices so infl uenced public low that there is but innovation in health policies in health no money to create care. In 2012, she awareness or make care is blossoming with was awarded the sure the drug INDIA reaches rural areas government support Padma Shri.

disease have increased. Drug prices are so low that there chains such as Apollo and Fortis is creating new hospital is no money left to create awareness or to make sure the beds and new competition, which is pushing up health care BY SWATI PIRAMAL drug reaches rural areas. Drug price controls have failed standards. India is a laboratory for low-cost innovation to deliver medicines to those who need them most. in health care delivery. Aff ordable cardiac care is being he numbers are startling. The Indian pharmaceutical industry—once the pride of Recently, the head of the Dairy Development Board, pioneered by brilliant doctors such as Devi Shetty and in innovation and a leading Indian export to other countries—has slowed from over 17 Amrita Patel, observed that women employed in the dairy eyecare at Aravind Eye Hospitals. New methods of mobile T percent just two years ago to 10 percent this year and trending even lower because industry have a problem of anaemia. delivery are being pioneered in many states. the price control regime is due to kick in later this year. On the face of it, this may They refuse to take the iron tablets WHY HAS THE Digital health services take more than be seen as being in line with the slowing Indian economy. The truth is not so simple. doled out free as they cause gastritis. a million calls a month to answer basic Innovations in iron delivery are not GOVERNMENT questions on health. Cloud computing and The questions are mind-boggling. Why would a government metaphorically handcuff an industry HANDCUFFED AN that was once feared to be taking on the power of the world’s largest multinationals and was ahead taking place at all because iron tablets RFID (radio frequency ID) technology of China in the sheer strength of scientifi c prowess? What has happened to a leader in generic are under severe price control and there INDUSTRY THAT is being used by clean drinking water medicines that could prove, using clinical trials, that our drugs are as good as that of the West? is no money that can be invested in WAS ONCE A provider Sarvajal in rural India (which research and development for a new iron WORLD-BEATER? recently won them a Frost and Sullivan Clinical trials approved by the health ministry have will not come from multinational research labs. An delivery system with fewer side-eff ects. technology award). The Mid-Day Meal dropped from 500 two years ago to nearly zero. When increasing cancer risk and the high prices of drugs The much-vaunted India schemes provided by large NGOs have activists petition the Supreme Court and advocate the imported into India are together making the burden advantage of an English-speaking scientifi c manpower, totally automated plants that bring costs down and banning of any studies, the knee-jerk response from the of this disease unaff ordable to most patients. doctors trained in Western medicine, institutes of maintain high standards of nutrition and hygiene. To scale health ministry is to make notifi cations so absurd that global Can new cancer drugs be discovered in our huge higher education, and a large number of chemists up these models and success stories we need support trials in India are halted by no less a global heavyweight in biodiverse plants and microbes in India? Can we has come to naught. The long bureaucratic delays from the government. Technologies must be accepted and research than the American National Institutes of Health. develop it in India at one-tenth the cost of the West and of more than a year for almost any permission, the diff used quickly so that the common man may benefi t. While activists who have no stake in the issue can make it aff ordable not just for India but for the rest of plethora of expert committees, and aggressive pursuit On the pharmaceutical side, too, there is a silver lining. take up airtime on TV, the nation’s ability to discover the world? For many Indian scientists, that remains a of leadership in science by China, Singapore and Although Indian trials have halted, Indian companies are and develop new cures for untamed diseases in India dream. Has price control been eff ective in delivering South Korea have nullifi ed any ‘India advantage’. sending their dossiers to Western regulators. The high are crippled severely. If India is to depend only on good health to the consumer? More than 60 years after So where is the good news? A few years ago, the quality of science is being accepted and the number of new innovations from the West without regard to the independence, tuberculosis aff ects nearly every other Reserve Bank of India made a small but critical change. new chemical entities discovered in India and developed types of mutations in viruses and bacteria increasingly Indian, 20 million women have anaemia, 70 percent of Hospitals, which were previously classifi ed as a real estate globally is going up. If India is to take her rightful place aff ecting the Indian population, it will be a very children up to age 10 are anaemic, malaria continues to industry to which banks could not lend, were reclassifi ed as at the head table of nations to make the lowest health high price to pay. Research on tropical illnesses that kill and, in a rapidly urbanising India, there’s a double infrastructure. The growth in small hospitals in second and care solutions in the world, she must quickly put in

ravage our citizens and drugs to treat these illnesses whammy: Chronic diseases such as diabetes and heart third-tier towns as well as the rapid expansion of hospital place a regulatory system that is fast and effi cient. Babu / Reuters

46 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 47 INDEPENDENCE DAY SPECIAL

basic functions of state—public order, FIXING justice and rule of law, infrastructure and natural resources development, education and health care—were GOVERNANCE all neglected, as the state sought to take on business functions, and WITH REFORMS predictably failed in both areas. Profile: Second, halting, half-hearted Jayaprakash AND ECONOMIC Narayan is founder eff orts to decentralise power and president of failed; we are now saddled with Lok Satta Party. He is an MLA from the unwieldy 73rd and 74th FREEDOM Andhra Pradesh. amendments, which created over- A former IAS structured, underpowered, and Comprehensive legal offi cer, he was on the National largely ineff ective local governments. and police reforms and Advisory Council Third, there was the failure to for UPA-1, and was a fi nancially empowered part of the Second modernise crime investigation and local government have Administrative insulate it from politicalIND vagaries. IA Reforms Commis- to be part of the solution sion (2005) and The vote is increasingly delinked Task Force for the from public good, and has become will disappear as people get busy improving National Rural UP CM Akhilesh Health Mission. a purchasable commodity, as the voter seeks to Yadav distributes their own lives. Comprehensive judicial and laptops. Freebies to maximise short-term gains. The vast political buy votes are not police reforms will minimise the law’s delays machine initially erected to address public enough anymore to and ensure fair treatment of all citizens. gain or retain power grievances in the face of poor service delivery But these are not suffi cient. If politics BY JAYAPRAKASH NARAYAN has acquired a life of its own. The machine continues to be murky, other reforms will needs to be sustained by corruption and abuse of power. happen at a glacial pace. Blaming politicians and parties is isenchanted as we are with our politics and governance, it is hard for us to realise Vote buying alone is not enough to acquire or retain fashionable in today’s India, but it does not help. Parties that we succeeded remarkably well in building a nation and democratic institutions. power, as all traditional parties resort to the same tricks. have not taken a vow to destroy India; they are only D We did not always fail. We gave ourselves a liberal, democratic and inclusive In an era of competitive populism, any party which focuses determined to win elections and stay in power. Given our constitution; over 550 princely states were integrated into India with great ease on infrastructure, economic growth, education and health current level of democratic maturity and a fl awed electoral and no bloodshed; our unmatched linguistic diversity has been accommodated with great care, and refuses to off er short-term freebies is at a great system, parties will have to pay a heavy price to uphold sensitivity and wisdom by the linguistic re-organisation of states and a three-language disadvantage. As all parties off er freebies, new forms of values in public life. Witness Andhra, where Congress is in doldrums as it refused to surrender to Jaganmohan formula; even in recent decades, our federalism matured signifi cantly with states coming vote-gathering are needed to gain advantage. In a diverse, tribalised society, traditional social divisions of , Reddy, or Karnataka, where BJP lost power as it refused into their own; and we achieved moderate economic growth while preserving liberty. region, religion or language have become playthings of to compromise with BS Yeddyurappa. If what is good for Then why have we failed in many other respects? We sensible incentives and accountability. Instead, they partisan politics. Divisive politics and provoking primordial the country is bad for parties, we only perpetuate the status need to focus on our initial conditions to understand responded by creating a vast party machinery to somehow loyalties pay handsome electoral dividends. The politics of quo. We need to create the right kind of incentives for our governance crisis. Abject poverty, illiteracy, social address public needs in the face of a dysfunctional, unity, common good and individuation took a back seat. parties. Our electoral system rewards vote buying, freebies divisions and universal franchise are an explosive unaccountable bureaucracy. Delivery did not improve; but Once we accept this analysis, the correctives are and divisions; promotes those with ill-gotten money, cocktail. Right from the beginning there has been an perverse incentives distorted the picture further. Over- self-evident. We need to relentlessly pursue economic criminal links, and caste or sectarian base; and discourages inherent asymmetry of power between the poor, helpless centralisation added to our woes. Both the state legislator freedom and competition. Local governments and and punishes honest, competent, public-spirited politicians. citizen, and the public servant with a safe job, secure and bureaucrat thrived in a centralised, opaque system. communities should be eff ectively empowered, and a We need to switch over to a proportional system of income and awesome power. This is complicated by Three post-independence failures compounded our share of tax revenues should be transferred to them. representation, where parties get seats in proportion poor service delivery. Bribes, red tape, governance failures. First, the licence-permit-quota raj was Once people are in control of their own destiny, and local to votes with certain safeguards to prevent political and delays are endemic even for simple services. given free rein for over three decades. In our misplaced independent ombudsmen are institutionalised to enforce fragmentation. Then honesty and political survival will be In this climate, there has been an over-dependence zeal for ‘socialism’, individual initiative and economic accountability, things will change signifi cantly. Service compatible; real governance reform will be feasible and on politicians who seek the vote, because they alone freedom were suppressed, leading to low motivation, rise guarantees with citizen’s charters and penalties for non- eff ective; what is good for the country will be good for have to go back to the people for a renewal of their of the free-loader mentality, monumental corruption, and a delivery will end extortionate corruption and harassment politicians; the best and brightest can once again play a vital mandate. Politicians should have ideally built a stagnant economy. The issue is not capitalism vs socialism; for simple services, and create space for more rational, role in public life; vocal, marginalised sections will fi nd

Harsha Vadlamani for Forbes India for Vadlamani Harsha framework for easy, painless delivery of services with it simply is the failure to defi ne the state’s primary role. The ethical politics. Naxals and home-grown secessionists voice; and national parties will have a national foot-print. Getty Images

48 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 49 INDEPENDENCE DAY SPECIAL INDIA HAS ITS OWN SILVER LININGS PLAYBOOK Profile: Wilfried But the last two years Aulbur is manag- ing partner, Roland have made it clear that Berger Strategy Consultants, a we cannot go to sleep and fi rm with expertise in diverse sectors, still expect high growth especially automo- biles, power and energy. Previously, he was INDIAthe CEO of - cedes Benz India.

BY WILFRIED AULBUR

have had the pleasure of being closely associated with India for the last 20 years. During this period, the country has undergone dramatic change, and largely for the better. I In 1994, at the time of my fi rst visit, the Indian middle class was focussed on saving enough so that their children could go to school in the US and establish themselves overseas. A few years later, around 2000, India had re-invented itself and started to off er many bright engineers an opportunity to have a rewarding career without having to leave their homes and families behind. By 2005, the overall conviction was that India was bound to grow at least at 6 percent, even if it did not put any eff ort into managing the economy and driving growth.

This assessment seemed to be strengthened by the it clear that we cannot go to sleep and still expect the quick rebound of its economy after the ‘Great Financial country to grow at 6 percent. We have seen quarterly Crisis’. Many of us thought that India’s inherent GDP data decrease linearly and reach values around 5 strength, solid banking system and internal consumption percent, close to the infamous ‘Hindu rate of growth’. eff ectively allowed it to decouple from the travails of To ensure employment for the roughly 12 million young the West. Globally relevant launches such as the Nano people joining the workforce every year, we need to grow suddenly drove engineering departments across the at around 8 percent. Anything less is a recipe for trouble globe to look at ‘frugal Indian engineering’ and convinced as events in Brazil, North Africa, and even here at home in the world that India could not only do software but India clearly demonstrate. Sustainable inclusive growth also engineer and produce world-class products. can only be built on a strong economy. We need to get the The progress that India has made as a country over the basics right not just once in a while, but consistently. last two decades is indeed breathtaking. So why is this Areas of concern are many. issue of Forbes India talking about the need for a third Government over-spending has increased from 2.8 freedom struggle to complement the ones in 1947 and 1991? percent to more than 5 percent of the GDP over the

Gautam Singh for Forbes India Gautam Singh for The answer is simple. The last two years have made last four years. A growing current account defi cit and

50 | FORBES INDIA | AUGUST 23, 2013 INDIA

a spending focus on entitlements and GE Healthcare’s it is not the only answer to India’s challenges. subsidies rather than capital outlays has R&D centre Companies must be enabled consistently to in Bangalore. fundamentally weakened the country and Experience shows compete on equal footing with global majors. the location of HQ the currency. The volatility of the rupee and ownership It is vital, for example, to have Indian-owned that we have experienced over the last matters when global automotive or aerospace and defence it comes to job few months as a reaction to remarks by creation and R&D companies. Worldwide experience shows that Ben Bernanke, chairman of the US Federal the location of headquarters and ownership Reserve, on Quantitative Easing is a case in point. matters when it comes to job creation and research The weakness of the rupee not only leads to and development, both vital for India’s future. imported infl ation and correspondingly high interest Further, unresolved issues such as land acquisition rates, it also destroys the profi ts of companies and project approval delays forced some investors to which depend at least partially on imports and cancel signifi cant investment proposals in the country. creates a volatile business environment. For example, the typical time taken from tendering Retrospective changes in legislation have highlighted to the start of production of a coal mine in India is the challenges of doing business in India and created about six years versus about two in Canada and less concerns in the minds of international than even that in Australia. investors who have alternative WE NEED TO GET This is despite the fact that the investment options in other emerging THE BASICS RIGHT production of Coal India Limited, the markets. While foreign direct investment largest domestic coal producer, does will bring in money and skills, and NOT JUST ONCE not keep up with demand growth. As may force local players to up their IN A WHILE, BUT a consequence, India’s coal import

game to benefi t the Indian consumer, CONSISTENTLY will double from 100 million tonnes Danish Siddiqui / Reuters

AUGUST 23, 2013 | FORBES INDIA | 53 INDEPENDENCE DAY SPECIAL

the only light on the horizon is Steel makers depend on reliable created by the dark rain clouds of coal supplies. Delays in land the monsoon that promise not to acquisition and project approval disappoint this time around. mean that coal Yet, all is not lost. Like many of production cannot keep up with my clients, I strongly believe in the demand mid- and long-term promise of the Indian market. The momentum that was built over the last two decades, the exposure that India’s middle class and aam aadmi have got is too signifi cant, too strong to be derailed by a couple of years of bad policies. Public opinion and the realities of the market per annum at present to about 200 million tonnes in will drive politicians to either be voted out of offi ce or to 2020, impacting energy costs and India’s trade balance. do the right thing for the economy and, ultimately, the Coal and iron ore are key feeder industries for steel voters. State election results that either confi rmed effi cient which is at the heart of the automotive, white goods governments (as we see in Gujarat) or drove ineffi cient and infrastructure sectors and therefore vital for the ones out (as in Karnataka) are living proof of an informed industrial heart of the country. Unreliable energy supplies and determined electorate. Recent decisions regarding FDI are also a major impediment for the build-up of a viable and clearance of large projects point in the same direction. Indian electronics industry. This is again an area of great While it is easyIND to be cynical aboutIA the likelihood concern as, according to some reports, and speed of change, there are the negative trade balance due to numerous examples where informed electronics will, in eight to 10 years, INDIAN PLAYERS citizens, an independent press and be as big as the oil trade imbalance. ARE SUCCESSFUL agencies have forced change. Corruption scandals and the DESPITE POOR Take the United States as an subsequent paralysis of the administration INFRASTRUCTURE example. One of the notorious political have also created signifi cant challenges AND UNRELIABLE bosses of the late 19th century was in key industries. Graft impacts not only William ‘Boss’ Tweed of New York’s dealings with government but seeps ENERGY OPTIONS Tammany Hall. He ruled New York into the private sector and increases the for 12 years by giving generously to cost of doing business. Crony capitalism is not the answer the poor, co-opting big businesses by rewarding them to building a viable Indian industry. What is necessary with lucrative contracts and so on. In the process, he is creating an equal playing fi eld for entrepreneurs to and his associates fl eeced the city of millions of dollars. meet their global competition head on. Today, leading His graft was exposed by political cartoonist Thomas Indian global players and exporters are successful despite Nast who ensured that New York’s illiterate and semi- insuffi cient infrastructure, unreliable and expensive literate citizens understood the magnitude of the energy options, infl exible labour laws, complicated problem. Samuel Tilden, a zealous attorney, convicted bureaucracy, etc. With a government that consistently and Tweed who fi nally died in a New York prison. reliably works towards elimination of these defi cits, the Over the last few years, we have seen our versions of Nast sky is the limit for high-performing Indian companies. and Tilden making their voices heard. Movements such as The uncertain and sombre global economic environment the ones by Anna Hazare or Arvind Kejriwal have shown has most likely reduced the Indian GDP by 0.5-1 percent. that India’s masses want more than just energy, roads, water The sentiment of Indian consumers and entrepreneurs and education. They realise that clean government is a must alike is depressed; job security is a concern. The coming to enable effi cient and fair capital allocation. Institutions elections may not bring to power the strong leadership such as the , the offi ce of the Comptroller and necessary to steer the country through this challenging Auditor General and the Reserve Bank of India are environment. Labour cost escalation is not compensated asserting their independence from the political apparatus. by productivity gains which, over time, erode India’s So, does India really need a third revolution?

Jayanta Dey / Reuters Jayanta Dey low-cost, high-skill advantage. It seems, at times, that With a little bit of luck, it is already under way.

54 | FORBES INDIA | AUGUST 23, 2013 INDEPENDENCE DAY SPECIAL

WHEN BUSINESS

BATS AGAINST Profile: Pratap Bhanu Mehta is president of New ITSELF Delhi-based think tank Centre for Policy Research, Indian capitalism is the and is a member of the National single biggest obstacle Security Advi- sory Board and the to further economic World Economic reform. It still inhabits Forum’s Global Governance Coun- a world of deals cil. His areas of research include rather than rules political economy, INDIA constitutional law, governance and international affairs.

BY PRATAP BHANU MEHTA

here is widespread consensus that India does not have a political culture propitious for business freedom. It fares poorly across all global indicators that measure ease of over-regulated but under-governed system. was premised on the expectation of inordinate T doing business. The daily uncertainty, arbitrariness, obstruction and degrading Indian capital But Indian capital, rather than collectively spends its energies returns, ability to renegotiate contracts and so humiliation that anyone trying to honestly do business in India faces is living proof of in extracting its rent fi ghting for rational regulation, spends its from governmental on. Big business saw its interests as separate from an institutionalised hostility to business. But contrary to widespread perception, the main source energies extracting its own form of rent misregulations business in general. They were allowed options to of this hostility is not just the state. The evolution of Indian capitalism itself is in large measure from this misregulation. Industry uses exit and hedge against all risks; they were given responsible for it. The bourgeoisie of this country has not come of age; when it complains inordinate resources in keeping its exemptions intact or captive power, easy credit, cover against the exchange it squeals more like a sulking child than a confi dent class. Instead, it needs to ask manipulating rules to its advantage. While rational from rate, etc. SEZs were an exceptional land grab raj in hard questions about why India is less pro-business. the point of view of particular entrepreneurs, cumulatively, disguise. They could fi ght the state on everything. But it the politics of exemption-seeking impedes reforms. It is really the small entrepreneur who suff ered the brunt When the history of India’s reforms is written, One of the principle objectives of reform is to reduce reinforces the view that the function of the state is not of the state’s anti-business bias. What we call reform has scholars will blame their slow pace on many factors: The the discretionary power of the state so that the ground to set fair rules, but to dole out selective benefi ts. Indian largely been pro-big business as opposed to business. vested interests of the state, the inability of politics to rules regulating economic transactions are open, clear, industry still inhabits a world of deals rather than rules. That the politics of exemption-seeking is widespread take economic arguments seriously, the anxieties of the predictable, competitive and fair. Licences and production There are too many examples of this. Rather than is not a big surprise. What is less remarked upon is the middle classes that continue to depend on the state, the controls were only one aspect of this discretionary power; lobbying for sensible environmental regulation, industry deleterious eff ect this has on the legitimacy of capital. complexities of policy in an agrarian society, the wages of tax exemptions and a plethora of other regulations are its dissimulates by attacking the idea of Many have long argued that Indian populism and the inherited baggage of socialist illusions. other facets. But apart from production, the government environment itself or by quietly seeking WHAT WE CALL capital’s idea of entrepreneurship consists But one infl uence that will stand out is that of India’s has to regulate industry on labour issues, environmental exemptions. India’s infrastructure REFORM HAS not of making innovative products, capitalist classes. For it is now palpably clear that Indian concerns, land permission and so forth. It is wishful is at a standstill not just because the LARGELY BEEN but fl eecing the state. This perception capitalism, despite the developments of the 1990s, is the thinking to suppose that you can have capitalism that government is paralysed. It is also continues to be valid even after a decade biggest obstacle to further economic reform. Individual is not thus controlled. The question is whether the because many of the infrastructure PRO-BIG BUSINESS of liberalisation. The net result is that the capitalists are undermining the long-term prospects of a regulation is sensible and predictable. The government players were more comfortable with a AS OPPOSED wider population does not see an attack

Amit Verma free economy for their own immediate short-term gain. often has its own interests in an absurdly regulated or an deal-based world: Their business model TO BUSINESS on market forces as an attack on freedom, Getty Images

56 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 57 Oliver Morris / Getty Images 58 trick incapitalismistomake one generation’sbadmoney needed tosustainit.Someone onceremarkedthatthe proper ideaofthepublic,itdenuded theveryfoundation the babyoutwithbathwater. Bydelegitimisinga minded andgeneralinitscritique ofthestatethatitthrew sensibility—“public bad,privategood”.Itwassosimple- state. Instead,ittriedtohitchitswagonanill-thought never understoodthatgoodcapitalismneedsa But thefactisithasdonenothingtogetpeopleexcited. is becauseitshandsweretiedbythehostilitytobusiness. is notatthevanguardofdesign.Youcouldarguethatthis technology frontiersofproduction.It manufacturing. Ithasnotexpandedthe apart, notknownforgreatinnovationin in anysense.Itis,someexceptions at another,ithasnotexcitedromance one level,itcanbequiteeffi done muchtoenhanceitscredibility.At century sinceindependence,ithasnot low sociallegitimacy.Butinthehalf- historical reasons,capitalstartedwith the frontiersoftechnology.InIndia,foravariety social purposes,amineofnewknowledgethatexpanded expanding revenuesthatthestatecouldthenuseforother introducing newproductsandeffi ciencies,asourceof faults, presentitselfasaperpetualinnovationmachine legitimising itself.Itwasableto,forallitsvicious biggest obstacletothelegitimacyofcapitalism. the victim.TheconductofIndiancapitalis rather than,asindustrywouldliketopresentit, capitalism asthecreationofacorruptsystem sees itasanattackongraft.ItlooksatIndian entrepreneurship andinnovation.Rather,it Indian capitalhasbeennarrowlyshort-sighted.It Capitalism survivedinmostplaces,part,bysocially | FORBESINDIAAUGUST 23, 2013 cient. But TO ENHANCEIT DONEMUCH HASN’T LEGITIMACY... IT LOW SOCIAL STARTED WITH CAPITALIN INDIA, DAY SPECIAL INDEPENDENCE for publicgoods money was invested In theUS, capitalist after JDRockefeller. University isnamed College atPrinceton The Rockefeller capitalists hadthegoodsensetomanipulatepoliticsbut associated withthemostsordidkindofpolitics.Older as anecessitybymany,isalsosourceofresentment. the experienceofprivateinstitutions,whileacknowledged sources ofgreatsupportforprivatebusiness.Ifanything, be apalliativetofailingpublicinstitutions,theyarenot and aestheticismthathelpsitcapturetheimagination.If part, aesthetic.Itisitsabilitytocreateaveneeroforder Adam Smithalsosurmisedthatcapital’spoweris,in culture, inthetruemeaningofterm.Theeconomist without creatingamassiveinfrastructureofliberal instrumentalist. Youcannothaveliberaleconomics transcend anarrowandpinched-upinstrumentalism. acknowledging, perhapshypocritically,thatitneededto universities, patronageofartsandsoforth.Itwascapital of amassiveinvestmentincreating‘public’goods— rough edges.IntheUnitedStates,thistookonform serve anothergeneration’sgood.Ithastotakeoff capitalists arethebiggestobstacle tocapitalism. all thepeopleforoftime. AsSmithputit, the time,allpeopleforsome ofthetimebutnot Under bothsystems,youcan fool somepeopleall correcting them,theeconomywillhavelittlefuture. contributes tofiscal andmarketdistortions,ratherthan few willcometoitsdefence.Ifthepoliticsofcapital in Indiaisnotduetoitsvirtuesbutaresultofvices, After all,ifmostpeopleareconvincedthatcapital’ssuccess country richinthe’90sbecomestargetofabacklash. creeps up,don’tbesurprisediftheveryclassthatmade As ifthiswasnotenough,capitalismhascometobe Indian capital’sface,withafewexceptions,isnarrowly Capitalism hasthisincommon withdemocracy: this isadouble-edgedsword.Whilethesemight is increasinglydeliveringmanyservices.But bound theimaginationbyitspennypinching. private capitaltoinspireconfidence. Ittoohas been amonstrosity,therehasnothingin the publicsenseofspaceandarchitecturehas Much ismadeofthefactthatIndiancapital D N I rate ofgrowthdeceleratesandinfl class articulatingpowerfulideas. politicians ratherthananindependent servile—a coweringbourgeoisietailing This hasmadeitintellectually operates withthatsenseofvulnerability. has toomanyskeletonsinitsclosetand blurred. Indiancapitalhasasensethatit not becomepoliticians.Nowthelinesare As economicreformslowsdown,asthe IA the ation INDEPENDENCE DAY SPECIAL

INDIA IS A STATE-NATION, NOT A

NATION-STATE Profile: Yogendra Yadav is a senior India has created a new model fellow at the Cen- tre for the Study to democratically deal with of Developing Societies (CSDS), deep diversities. It accepts that Delhi. His interests political boundaries do include democratic Tableaux theory, election representing not and need not coincide studies, survey different states at research. In 2009, the Republic Day with cultural boundaries the International parade. India’s INDIA cultural policy Political Science recognises and Association supports more awarded him the than one cultural fi rst Global South identity Solidarity Award.

the north Indian Hindi-speaking region as the heartland. identity with other regional and religious identities is This vision of nationhood is more European than Indian. taken for granted. Political parties that raise regional and BY YOGENDRA YADAV It draws upon a model of the nation-state that emerged in ethnic issues are not thrown out; they are brought within Europe. Europe’s civilisational unease with diversities has the pale of legitimate democratic negotiation of power. he arrival of Narendra Modi at the centrestage of national politics has renewed an had a long history. Nineteenth century nation-states were Quietly, but surely, India has created a new model of old debate about the idea of India. Underlying the various issues and controversies an attempt to settle this unease by matching the cultural how to deal democratically with deep diversities. This T associated with Modi is a fundamental question: What kind of a nation are we? boundaries of a nation with the political boundaries of model is best described as that of a ‘state-nation’. State- What does the Indianness of India consist of? How do we sustain a national a state. If there was a mismatch, the nation-state model nation accepts that political boundaries do not and need political community across deep social and cultural diversities? Whose country is it anyway? tried either to shift the political boundaries—by creating not coincide with cultural boundaries and that a political This debate takes us back to the ghost of John Strachey, a British colonial administrator new countries or merging existing states—or to alter the community can be imagined across deep diversities. who wrote a primer in 1888 called India. The “fi rst and the most essential thing to learn cultural boundaries by means of cultural integration, India’s experience with diversities is not without its about India”, he advised his colonial masters, is that “there is not, and never was an India, assimilation, coercion and even ethnic cleansing. problems. The continuing alienation in Kashmir, and or even any country of India, possessing, according to European ideas, any sort of unity, This was, of course, not the vision shared by the the ongoing slow-burning insurgencies in Nagaland physical, political, social or religious…. That men of the Punjab, Bengal, the North Western mainstream of India’s national movement. If there was and Manipur serve as a reminder of the failures of this experiment. But these are best seen as failures to Provinces, and Madras, should ever feel they belong to one great nation is impossible.” one thing Tagore, Gandhi and Nehru shared, it was their rejection of the idea that India’s unity requires implement the model of state-nation in its true spirit This bald characterisation has continued to haunt It was natural for some Indian nationalists to try the uniformity. Although they continued to use the dominant rather than the failures of this model itself. In any case, Indians. It does so because Strachey was right in one sense. other option. Instead of stretching the interpretation, expression ‘nation-state’ for their vision of India, they the disintegration of the former USSR and Yugoslavia If nationhood requires people living within a given political they wanted to bend the reality itself by trying to forge a laid the foundation for a diff erent approach serves to remind us that we cannot take our boundary to have one language, one faith, one culture and unity that would conform to received standards. This is that saw ‘unity in diversity’. The Indian continued existence as a political unit for one race, then claiming nationhood for India required how the politics of Hindi-Hindu-Hindustan was born. Constitution and the post-independence “THE INDIAN granted. The civil war in Sri Lanka and the stretching credulity. This is how the early nationalists Guru Golwalkar, the iconic ideologue of the RSS, saw politics has built an institutional CONSTITUTION slow disintegration of Pakistan serve as a responded to the colonial insinuation: They invoked the the challenge of nation building as requiring fi ve unities: edifi ce for recognition of diversity. HAS BUILT AN reminder of what India could have faced if it essential unity of the people of India, but struggled to Geographical, racial, religious, cultural and linguistic. This India’s ‘asymmetrical’ federalism INSTITUTIONAL followed the European-style nation-state. explain how that essence fi tted all the areas that fell within project involved creating a uniform national community recognises the unique situation of various EDIFICE FOR It is time we turned to Narendra Modi the boundaries of colonial India. The one thing they found in the light of the cultural self-image of the dominant states. The cultural policy of the state RECOGNITION and spoke through him to the spirit of John hardest to wish away was religious diversity and divisions. community. Thus their politics focussed on Hindi as the recognises and supports more than one Strachey: Thank God, India is not Europe OF DIVERSITY” Amit Verma The dilemma has persisted in post-colonial India. national language, Hindutva as the national way of life and cultural identity. The co-existence of Indian and we don’t live in the 19th century! Getty Images

60 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 61 INDEPENDENCE DAY SPECIAL

WE HAVE TO FREE OUR CITIES FROM THE STATES’ CLUTCHES The country’s creaking Profile: infrastructure has been unable Bimal Patel is Director, HCP to support its cities’ rapid Design and Project growth. Local governments Management. Patel designed INDIA should be granted autonomy the Sabarmati Riverfront to increase productivity Development project in Ahmedabad.

BY BIMAL PATEL

ndia is witnessing an epochal transformation. From a country that lived in villages, it is becoming a nation of towns and cities. The last time the country witnessed I such a transformation was during the period of the Mahabharata: Agricultural technology spread and village settlements transformed the subcontinent’s ecology, intertwining urbanisation and economic and autonomous. They were unfettered by higher geography and economy. Today, scientifi c, technological and industrial improvements The task of growth set off a virtuous upward spiral of developing our levels of government. Local elites participated in are propelling change. These changes are simultaneously making many rural livelihoods cities is primarily redundant, and turning cities into more productive and attractive places to work in. human, social and economic development. seen as the burden governance and led the development of their cities. Why were Western nations able to of state-level Local governments were expected to raise their On account of this, a vast number of people are migrating from villages to cities. politicians transform their cities from the mess that own resources and had the powers to do so. They Today, as a consequence of rapid growth, Indian cities polluted, unhygienic, fi lthy, congested and hopeless. they were in in the nineteenth century? also had the powers to spend their resources in the are in a mess. They are overcrowded and their meagre Engels’s and Dickens’s writings bring the miserable Who provided the entrepreneurial leadership for this manner that they saw fi t. They had comprehensive control infrastructure is highly stressed. They are polluted, conditions of European slums and cities vividly to life. transformation? Why did this leadership respond to the over their jurisdictions, including police powers. Local unhygienic and often fi lthy. Roads are congested and traffi c Slowly, over a century, Western nations were able to plight of poor and deprived people in their cities? Why was governments were responsible for all aspects of city life. seems unmanageable. Social services and amenities are transform this situation. Starting from small beginnings, the wealth generated by initial urbanisation not siphoned Their staff was accountable to local government leaders. non-existent in most towns and local governments seem they were able to provide more and more people in away by the elite or poorly invested—resulting in the Moreover, local governments were eff ectively democratic. unable to cope. We seem to be descending into a downward cities with better infrastructure, transport, housing, falling productivity and worsening of living conditions in Local leaders were accountable to local populations. If they spiral of urban ills, stagnating urban productivity and schooling, health facilities and recreation. By doing this cities? Why did Western cities not get wanted to be re-elected, local politicians underdevelopment. Will we ever be able to make our they were able to pull off the trick of simultaneously mired in a vicious downward spiral WE HAVE ALL THE had to yield to the demands of their cities effi cient, livable and sustainable? Will we ever be making city lives more comfortable, healthier and of unsustainable urbanisation and TRAPPINGS OF electorates and to seek their well-being. able to make them abodes of happy and fl ourishing lives? happier. This also made cities more productive. Basically, economic stagnation? These are diffi cult AN AUTONOMOUS Are Indian cities similarly When asking such despondent questions, it serves they were able to channel increased wealth, resulting questions to answer unequivocally. autonomous? Are local governments well to remember that when the West fi rst urbanised, from the increased productivity of cities, into urban When one reads histories of urban LOCAL GOVERNMENT. eff ectively democratic? its cities also fell apart. Nineteenth century London and infrastructure investment that improved the well being development in the West it is clear YET, OUR CITIES We have all the trappings of

Alok Brahmbhatt for Forbes India Alok Brahmbhatt for Paris were also unmanageable messes—overcrowded, and productivity of more and more citizens. Successfully that their cities were self-governing LACK AUTONOMY autonomous and democratic local Parivartan Sharma / Reuters

62 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 63 Rupak De Chowdhuri / Reuters 64 clear thattheirprimarytaskis tohelptheirconstituents, of localgovernment.Ifoneobserves thematwork,itis if youwill,forthepopulation todealwiththemachinery only inthesensethattheyare mediators,‘liaisonagents’ local self-governance.Ourcouncillors representthepeople also createsapowerfulillusionthatwehavedemocratic salt donotwanttogetinvolvedinlocalgovernment. It is,therefore,nowonderthatpoliticiansworththeir as theburdenofstate-levelpoliticiansandadministrators. country, thetaskofdevelopingourcitiesisprimarilyseen schemes fordirectlyfundingurbandevelopment.Inour what citiesoughttobedoing,ithassetupvariousstandard government hasgotintotheact.Believingthatitknowsbest sanctioned atthestatelevel.Oflate,evenCentral the contrary,allimportantplansandbudgetshavetobe for developmentordecidewheretospendmoney.On expected toforgeavisionfortheircity,raiseresources not requiredtoanswerthem.Localpoliticiansare of themachinerylocalgovernmentandexecutivesare not theotherwayaround.Councillorsareincharge most places,mayorswalkuptoadministrators’offi subservient tostate-levelpoliticiansandadministrators.In governments—created bystate-levellegislationsand that ourcitieslackautonomy.Theyarecreaturesofstate anyone whohasinteractedwithlocalgovernmentsknows illusion ofself-governanceatthelocallevel.However, elected councilors,wardsandsoon.Thiscreatesapowerful government—municipal corporations,municipalities, We alsoelectcouncillorstoourlocalgovernments.This | FORBESINDIAAUGUST 23, 2013 ces and DAY SPECIAL INDEPENDENCE to thepeoplewhomtheygovern. to ensurethattheyaremade more accountable autonomous andresponsible for themselves,and our citiesistomakelocalgovernments more generated bycitesisusedtomeaningfully transform The mosteff ectivewayof ensuring thatthewealth productivity andreapthebenefits ofeconomicgrowth. Only thenwillwebeabletocontinuallyincreasetheir and happierplacesforallthepeoplewholiveinthem. cities rapidlybecomemoreandcomfortable,healthier in India.Todothiswehavetomakesurethatour a virtuousspiralofsocialandeconomicdevelopment in-a-lifetime opportunitytouseurbanisationsetoff problems of poor people are simply not addressed. a majorityandwehaveelectedrepresentatives,the explaining whydespitethefactthatpoorarein petty corruption.Ifthisisnottrue,therenowayof is notmorethanashortopportunitytoindulgein for mostcivicpoliticians,astintinlocalgovernment who electthemasaclass.Asconsequenceofthis, of individualpetitioners.Theydonotrepresentthose into, mostoften,unwittinglyandinadvertently. and resolvingproblemsthatpeoplehavegotthemselves often contradictoryregulations,obtainingdispensations government offi cials,makingsense ofcomplicatedand of localgovernment.Theyhelpinaccessing rich andpooralike,tonegotiatetheKafk A nationurbanisesonlyonce.Todaywehaveaonce- Local politiciansinIndiahelptosolvetheproblems D N I IA aesque maze development and economic spiral of social set off avirtuous urbanisation to opportunity to use in-a-lifetime we have aonce- . Today construction in estate under A residential

INDEPENDENCE DAY SPECIAL BETWEEN THE ‘ILLFARE’ STATE AND

THE DEEP SEA Profile: Bibek Debroy is Professor Great damage was done by at the Centre for Policy Research, changing the Preamble in Delhi.He is an economist and has our Constitution to make worked in universi- The right debate ties, institutes, about MGNREGS is India ‘socialist’.What industry bodies and why this scheme we have as a result is not for the govern- was necessary more ment.He has than six decades a welfare state, but an authored several after Independence books and articles, INDIA ‘illfare’ one with an interest in trade, education, been down to about 5 percent. It shouldn’t be surprising many of the poor continue to be bypassed. Fourth, even if health, law and governance. that improvements in India’s HDI score from 1991 have the poor have to be subsidised fi scally, it doesn’t follow that resulted from improvements in per capita income, not the state has to deliver those goods and services. Choice, that much from health and/or education indicators. competition and effi ciency are possible with state nancing fi The mammaries of the Indian welfare state haven’t of alternative channels of delivery. Fifth, in the name of BY BIBEK DEBROY yielded much milk. If 15 percent of expenditure reaches equity, an ineffi cient public sector has been erected. target benefi ciaries, that’s not because of leakage alone. It India’s tax-GDP ratio, at 18 percent, isn’t that high. It elfare state’ is an abused expression. Specifi cs diff er across countries and Sweden is also because of the high administrative costs of wouldn’t be that high, even if tax exemptions, 5.5 percent can’t be placed in the same bucket as the USA. If equity is defi ned as every delivery. There is a predatory political and bureaucratic of GDP, are completely eliminated. The problem with ‘W citizen obtaining access to basic needs, no one disputes that goal. Problems class that thrives on social sector the ‘illfare state’ isn’t just fi scal and arise when one fails to target the poor and assumes the state has the capacity schemes and subsidies. There THE ‘ILLFARE’ STATE monetary. It imposes ineffi ciencies to deliver. Sure, the UNDP ranks countries by a human development index (HDI) is another predatory non-BPL IMPOSES INEFFICIENCIES, and prevents private sector growth. It based on purchasing power parity (PPP), per capita income, education and health. Sure, class, typically the urban middle CREATES A DOLE MINDSET creates a dole mindset and kills class, that thrives on subsidies private entrepreneurship. For the ‘developed’ countries perform well on HDI and at a rank of 136 (out of 186), India is way AND KILLS PRIVATE down the pecking order. There is a correlation between HDI and per capita income. meant for BPL (below poverty corporate sector, it encourages capital line). There are several reasons ENTREPRENEURSHIP fl ight, where possible. It imposes a India’s per capita income is $1,492. Even if one deliver. John Kenneth Galbraith was anything but a die- why this leads to distortions. debt burden on future generations. does PPP conversions, India’s per capita income is hard market fundamentalist and even he castigated India’s First, there are fi scal costs to such public Sweden’s welfare state emerged in the 1950s and 1960s, $3,830. But governance is more diffi cult to quantify and ‘post-offi ce socialism’. Those goals of equity concern social expenditure. More importantly, there are forgone when tax rates there were low. Today, fi nding the system pin down. There are some cross-country governance sectors. Had we been serious, we would have recognised opportunity costs of resources. To use the cliché, while unsustainable, Sweden is trying to reduce both public rankings, the World Bank’s governance indicators this and pushed the decentralisation/devolution agenda one may use a ‘Right to Fish’ statute to give a person expenditure and taxes. There are two new Gresham’s Laws being one. There is a correlation between governance since, logically and constitutionally, social sectors are a fi sh a day to eat, lack of expenditure on physical and in policy-making: (1) Good policies drive bad policies out of levels and per capita income too. This is correlation, state government subjects and should become local body social infrastructure means the person doesn’t learn circulation; (2) For every silly policy one can think of, there not causation. While improved governance may lead to subjects. Improved governance is also correlated with how to catch fi sh. The right debate about MGNREGS will be some precedence in some country in the world. higher levels of per capita income, higher levels of per decentralisation/devolution. Instead, there have been is about what these resources might otherwise have Great damage was done to India by changing the capita income may also lead to improved governance. a plethora of social sector schemes devised in Delhi. been used for and why MGNREGS was necessary Preamble to the Constitution to make India ‘socialist’. Therefore, one cannot assume that governance levels in While all subsidies aren’t Central, 14 percent of GDP more than six decades after Independence. In our fear that unbridled capitalism would make developed countries can be imported and applied in India. is spent on them. Had subsidies led to equity and opened Second, state intervention messes up price signals and social mistakes, our ‘illfare state’ has incessantly made Lant Pritchett (Harvard) coined an expression for India— up market opportunities, as they have in other countries, distorts resource allocation. Third, since BPL cases aren’t capital mistakes. The tragedy is that we haven’t learnt fl ailing state. The problem hasn’t been one of enunciating we wouldn’t have debated whether India’s poverty identifi ed and targeted, it is by no means obvious that a rich and continue to muddle along. We have neither the

Amit Verma policies driven by equity but administrative incapacity to head-count ratio is 22 percent or more. It would have to poor redistributive transfer takes place. In all probability, capital, nor the social. We only have the ‘ism’. Xavier Zimbardo / Getty Images

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WHY ENDING DOLES WILL HELP Profile: THE POOR Surjit Bhalla is the chairman and MD of Oxus The government’s Investments, a New Delhi-based fi xation on economic research, asset management bad subsidies and emerging- is supporting markets advisory fi rm. He’s worked corruption, not at the research and treasury depart- the poor ments of the World Bank, and also had stints with Gold- INDIAman Sachs and Deutsche Bank.

BY SURJIT S BHALLA

ndia turns 66 this month. That it has transformed during this time is believed by most of its citizens. Consider that a majority of us were born after 1990, when India’s I per capita GDP was $400 a year. Today, the fi gure is more than four times higher at over $1,600. Yet, most Indian policymakers behave as if, on an average, we are a very poor country and that nearly two-thirds of the total population needs attention in the form of transfers (doles) from the government. Most people, and almost all taxpayers, in India and across the world do not object to money spent in the uplift of the poor and in providing them with basic infrastructure and services. I have yet to meet anyone who protests the provision of roads, water, sanitation, education and health care to the poor. Leaky, corrupt, ‘in the name of the poor’ subsidies are with the lowest taxpayer in the top 20 percent of the the problem and considered objectionable. They provide population. Thus the poor, the emerging middle class little income support to the poor and subtract from the and half of the middle class do not pay any income subsidies that are desperately needed. This is particularly taxes. Second, corporate taxes are paid by the wealthy. relevant in the sterile ‘growth versus redistribution’ Therefore, a substantial proportion of money spent on debate that is currently raging in India. Prime Minister redistribution is fi nanced by the “rich” taxpayer. Manmohan Singh and Congress President Sonia Gandhi Now, the poor and the taxpayer alike are concerned (the duo is hereafter referred to as Manmonia) along with the form taken by the subsidy or redistribution. with their advisor, Nobel laureate Professor Amartya Bad subsidies do not enhance productivity, good Sen, portray that India spends precious little on subsidies do. And the Congress-led UPA, both shades redistributing income. But the facts indicate otherwise. I and II, has been consistent in its advocacy of dole There are at least two obvious reasons why for the bottom half to two-thirds of the population. India, like other countries, spends its fair share on Never in the history of India was two-thirds of the

Udit Kulshrestha for Forbes India Udit Kulshrestha for redistribution. First, it has a very small income tax base, country considered poor—not even by the ‘garibi hatao’

68 | FORBES INDIA | AUGUST 23, 2013 queen Indira Gandhi. Indeed, there is no country in GOOD AND BAD GOVERNMENT SUBSIDIES the world that sets its own poverty line to contain two- IN INDIA, 1999/2000-2011/2012 thirds of its population. The question, therefore, is: 1999-00 2004-05 2009-10 2011-12 What prompts Manmonia to continue and substantially +GDP 1,952 3,242 6,550 8,354 increase its dole expenditure over what had already *Central government 15.6 15.6 15.6 15.8 prevailed before they arrived on the scene in 2004-05? expenditure Their policies have made India a welfare dole state before its time. The table notes the magnitude of Central *Good Subsidies 0.81 0.86 1.19 1.52 government spending over the last decade and the nature *Infrastructure 0.27 0.21 0.32 0.42 of “redistributive” subsidies, both good and bad: That is, *Education & health 0.54 0.65 0.87 1.10 subsidies that enhance individual productivity (through *Bad Subsidies - Dole 1.11 1.58 2.72 2.88 roads, education, health) and dole that merely transfers *Food & employment 0.66 0.99 1.40 1.25 income and reduces poverty (in the unlikely event that *Fuel & fertiliser 0.45 0.59 1.33 1.63 it reaches the poor on a consistent, targeted basis) only on a “maintenance” basis. In 2004-05, good subsidies Source: GOI, Budget data +In Rs ’000 crore * As % of GDP constituted 0.9 percent of GDP, and bad subsidies 1.6 percent. In 2011-12, bad subsidies touched nearly 3 percent. favourable for the cash kind. But not in a country like The dole comprises four broad categories of India: We are still debating the merits of such schemes of expenditure—fuel, fertiliser, food and employment. redistribution. Why? Because of opposition from powerful Even the Congress does not argue that the fi rst two interest groups INDas cash transfers substantiallyIA decrease (but do much to help the poor. Less than 15 percent of dole do not eliminate) the opportunities for big-time corruption. regarding food and employment actually reaches the We continue to persist with ineffi cient and corrupt dole targeted poor. And the remaining 85 percent does not policies for food (PDS) and employment (NREGA). In fact, even accrue to the aam, but not poor, aadmi. A large we want to expand such leaky schemes. This is despite the fraction (about a quarter) of it is mostly unaccounted for. huge evidence of corruption. The reason: My best guess is A majority of the countries that undertake transfers an outdated ideology heavily related to old age, that of our (dole) endeavour to ensure that the deserving policymakers in the Congress and the BJP. Many are properly targeted. The world has had of them were born in pre-independence dirty, India persists with considerable experience with various forms of dole policies like poor India, and their ideology has been shaped the PDS despite transfers— cash, conditional cash, food stamps, huge evidence of by that experience. India has changed, much like etc—and the record appears to be broadly corruption in it the world, but that does not seem to infl uence their view of the country. Their motto is ‘the government is the saviour’. What confi rms this hypothesis is that there was only one 40-plus ‘youngster’ who dared to challenge the public distribution system, and that too when it was a decade old. That ‘youngster’ was Rajiv Gandhi who as PM famously stated that less than 15 percent of the dole meant for the poor actually reached them. To my knowledge, no other leader has dared to question the PDS again. Sonia Gandhi has gone out of her way to reject the wisdom and courage of her late husband. Her view, and the Congress’s, seems to be that the system has failed, and the best way

to improve it is by expanding it. Tiwari / Outlook Tribhuvan

AUGUST 23, 2013 | FORBES INDIA | 69 INDEPENDENCE DAY SPECIAL

WHY THE GOD OF JOBS DOESN’T Profile: Manish Sabharwal SMILE ON is co-founder and chairman of Team- Lease Services. He INDIA has a manage- ment degree from Wharton and There is a dire need for sees himself as a crusader for labour policy and politics to reforms in India. combine to build a serious Since its inception in 2002, Team- Hopefuls line up in narrative around non-farm Lease has placed INDIA UP for application more than half a forms for police jobs. The geography of formal job creation million people in work greatly affects temporary and job creation permanent jobs.

fi xed the sins of commission but not the sins of omission. than 50 percent of China’s exports and 90 percent of its Entrepreneurs have to substitute for the Indian state high technology exports come from multinational factories. BY MANISH SABHARWAL by generating their own power, providing their own The biggest value these multinationals have brought to transport, digging for their own water, arranging their China is not capital but market connectivity, technology and here is a curious acceptance of a hung parliament from the 2014 polls. Even own security and manufacturing their own employees. management. Of course, Indian companies should be world more painful is the omission of a narrative around jobs in the various election This not only raises the diffi culty level for young people beaters but removing all restrictions on foreign investments T narratives being polished and readied: Secularism, socialism, corruption, becoming entrepreneurs but ensures that most Indian will greatly accelerate formal sector job creation. national security, food and so on. Could these two tragedies be related? Indian companies end up being dwarfs rather than babies. The Not to mention the huge demonstration and alumni policy and politics desperately, urgently and forcefully need to pray to one god—jobs. average size of an Indian company is three employees eff ect of multinationals that will ignite more domestic India’s labour markets have been stuck for the last 20 years with 12 percent manufacturing and the policy focus for the Ministry of Micro, Small entrepreneurship of the baby rather than dwarf kind. employment, 50 percent self-employment, 90 percent informal employment and 50 and Medium Enterprises, unfortunately, continues Politicians are confused because the traditional percent agricultural employment. India has not had jobless growth but 100 percent to be small companies rather than new ones. narratives of religion, caste and poverty do not inspire of the net job creation since 1991 has taken place in the informal sector. Why are we Urbanisation: The geography of work greatly infl uences the same level of indignation, outrage or action as before. creating so many low-quality jobs? I believe India’s job emergency has fi ve causes. job creation. India has six lakh villages but two lakh of these They are looking for a new narrative. When Gandhiji have less than 200 people. We only have 50 cities with more launched the non-cooperation movement, Jinnah told Regulatory Cholesterol: Philosopher Balzac once said world, benefi ts are not over and above salary but come than a million people—China has 300. Job creation tends him it would only appeal to the young, ignorant and the that behind every great fortune lies a great crime. This out of it. Today the law requires employers to deduct 48 to cluster and the perennial policy dream of taking jobs to illiterate. Jinnah was right: Satyagraha massifi ed the distrust of the private sector is pervasive in India and percent of salary towards mandatory benefi ts for wage people must give way to the urgent reality of taking people freedom movement because it was a compelling and simple manifests itself in thousands of vague, contradictory and levels up to Rs 6,500 per month. Since most employees to jobs. Consider that unlike the Chinese New Year when narrative. Gandhiji’s genius was recognising that politics unnecessary regulations that smother enterprise. Most at low wages cannot live on half their salary, they prefer 300 million people get on a train to go home, India does not is a battle for hearts and minds. Many current politicians toxic is our labour law regime that makes employment informal employment. This demand for informality is have mass migration at Diwali, Chhath, say they believe in economic reform but contracts like without divorce, ie biased against amplifi ed further by the perception of poor value for two Christmas or Eid. Urbanisation is a policy THE POLICY DREAM don’t know how to get re-elected once employers. Without a radical overhaul of our labour law of the biggest benefi ts: Provident Fund (it is the world’s orphan in India even though we need 100 OF TAKING JOBS they implement it. This implies that regime—by recognising fi xed term contracts, making labour most expensive government securities mutual fund and new clusters like Gachibowli, Gurgaon, TO PEOPLE MUST good economics is almost always bad a state subject, reversing over-regulation and under- its pension scheme has an unfunded hole of Rs 50,000 Mohali, Magarpatta and Bangalore that politics. But a narrative around non- supervision—we will not reverse the 90 percent informality. crore) and ESIC (it is the world’s only health insurance intermingle low rent but high quality GIVE WAY TO THE farm formal job creation is a compelling And informal employment is the slavery of the 21st century. plan with a claim ratio of less than 50 percent). residential and commercial spaces. REALITY OF TAKING political narrative at the intersection of

Amit Verma Employee Benefi ts Regime: In a cost-to-company Sins of Omission: Economic reforms since 1991 have Foreign Investment Regime: More PEOPLE TO JOBS good economics and good politics. Getty Images

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we see sustained long-term failure to deliver returns. function of being investment banker to the government. THE STATE These messages have got to Wall Street. The Even in the hands of good men, why did RBI fail? same private equity and FIIs who blindly supported The fi rst issue concerns unrestricted meddling by the strongmen are now very concerned about ethical state. The present laws and agencies were constructed SHOULD ENTER standards. A new line of business has opened up, in in the age of socialism, when it was thought appropriate serving these investors, of doing ethics checks in India. to give draconian powers to government agencies. THE PICTURE But what about the apparatus of government? This strategy is a recipe for trouble, for public bodies The strongmen in business were exploiting will almost surely misuse these powers. It makes much Profile: Ajay Shah co-leads the opportunities that were present in a malfunctioning more sense to focus the government upon the narrow ONLY WHEN Macro/Finance government. On one hand, this is about messy processes task of addressing market failures. Market failures come Group at the National Institute with a lack of clarity, a lack of rule of law and arbitrary in three kinds: Those associated with market power MARKETS FAIL of Public Finance decision-making. In addition, even when these processes (such as abuse of monopoly), asymmetric information (eg and Policy in New Delhi. Before this, are operated by a clean organisation, there are serious when you eat at a restaurant, you don’t know whether A key pillar of a sound state he was a consul- concerns about the inadequacies of our state apparatus. the kitchen is clean) and externalities (eg, a factory is accountability. Alongside tant in the Mini- stry of Finance’s As an example, consider the Reserve Bank , arguably a emits pollutants that harm you). These three groups of precise objectives and Department of singular success story in India on the question of corruption. market failures justify government intervention—there Economics. He has Every other government agency envies the RBI when it is no case for any other government intervention. precise powers, we engaged in aca- INDIA need layer upon layer of demic and policy- comes to cleanliness all the way down to the rank and fi le. We must reconstruct public bodies around clarity of oriented research This cleanliness has not led to success on core functions. objectives (to address market failures) and equip them in economics accountability mechanisms and fi nance. For most of the last 40 years, RBI has failed in achieving with the minimal set of powers required to pursue market price stability, which is the dharma of a central bank. failures. This requires great care in writing laws that In the fi nancial regulatory aspects that RBI engages in, clarify objectives in detail, in avoiding vague phrases such there is a long history of failure: RBI has failed to create a as “shall pursue the public interest” and in writing down BY AJAY SHAH banking system, a payments system and a bond-currency- precise and limited powers to pursue these objectives. derivatives nexus of the sort that is required for India’s The third pillar of a sound state is accountability. The he corruption scandals of recent years have thrown a spanner in traditional ways growth. RBI is complicit with bad policies fi rst and foremost accountability mechanism, of emanating from the Ministry of Finance when The RBI, despite course, is clarity of objective. An agency can be of doing business in India. That murky ways of doing business are much less being a ‘clean’ T feasible is something to rejoice over. But equally important is the challenge it comes to nurturing public sector banks, and organisation, has held accountable when everyone knows what it failed to deliver of constructing new structures that are impartial, effi cient and supportive when it enables reckless fi scal policy in its is supposed to do. We know what the Election of growth. The way forward lies in clarity of objectives, focusing the government on Commission is supposed to market failures and refraining from arbitrary meddling, and ensuring accountability. do. We do not know what the RBI is supposed to do. The In the bad old days, India had a mix of badly structured of the most dangerous behaviour by strongmen and their contrast in outcomes is striking: government rules and procedures, coupled with large counterparts in the government. By 2007, many people By and large, the Election scale corruption. In areas which required a strong started getting concerned about whether India would fall Commission has delivered on interface with the government, many success stories in into the ‘middle income trap’, which has been observed holding free and fair elections. the world of business had murky ways of getting things in many other developing countries where government These ideas were employed by done. When foreign investment and private equity surged and business cosy up in corrupt arrangements, kill off the Financial Sector Legislative into the country 2002 onwards, this capital was often honest businesses, and settle into cosy stagnation. Reforms Commission, chaired by quite amoral. They cared about getting returns and not This picture has changed quite a bit in recent years. Justice BN Srikrishna, in drafting about the means through which returns were obtained. While enforcement mechanisms in India are not perfect, the Indian Financial Code that With this wind in their sails the strongmen of Indian it is also the case that not all enforcement can be bought aspires to replace all existing business thundered ahead. Their ranks were augmented off . One by one, we are seeing a procession of companies fi nancial law. When enacted by many wannabes who saw the opportunities available crashing and burning as skeletons come out of the closet. by Parliament, this will give a by fl outing rules, getting things done, crushing rivals Of great importance is stock market performance. The quantum leap in governance in through illegal methods, and getting to the prize of companies that have got into trouble in this fashion have the fi eld of fi nance. This strategy billion-dollar valuations off ered by private equity or FIIs. produced phenomenal underperformance of the broad of public administration reform From 2002 to 2008, we got the greatest macroeconomic market. Sometimes, we see 50-70 percent fall in returns in would be valuable in India in

Vikas Khot boom in India’s history, but alongside it, we also got some a short time after an enforcement action. At other times, fi elds far beyond fi nance. Getty Images

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least a two-year programme and simultaneously design ENHANCE COMPETENCE OF EDUCATION FUNCTIONARIES OUR BIGGEST a fi ve-year programme to be entered after Standard XII. We also have about one million education functionaries This would help improve aspects such as subject matter across the country. Their responsibilities include ensuring knowledge, education perspective, refl ective teaching and appropriate teacher-pupil ratio, incentives for children, CHALLENGE IS learning practices, and meaningful student assessment. infrastructure, mid-day meal programmes, consistent supply of text books, conducting examinations and TO IMPROVE PREPARE SCHOOL PRINCIPALS providing academic support to schools. Practically no Profile: Dileep Ranjekar (Co- World over, research has established that a ‘school formal training or development is designed for them. CEO) has been an leader’ has the highest infl uence on the quality and TEACHING integral part of STRENGTHEN INSTITUTIONS the Azim Premji culture of the school. However, we do not have a formal Foundation, right process of developing school leaders. It seems absurd The government has created institutions at the state, COMPETENCE from its inception that while teachers cannot be appointed without a B.Ed district, block and cluster level to ensure administrative in 2001. Ranjekar While we have taken the school joined Wipro from degree, there is no such separate certifi cation required and academic support to schools. They need to have campus in 1976 for principals. We need to launch a programme for a synergistic vision and a shared strategy to realise to children in over 99 percent and played an important role in the preparation and development of school leaders their vision. Elaborate criteria must be evolved of our villages, the quality its transformation to deal with academic, administrative, cultural and for selecting personnel for these institutions along from a vegetable and equity of education has oil maker to a community issues withIND far greater eff ectiveness. IAwith a continuous process of their development. remained elusive global IT company. The National Centre for School Leadership There has to be a periodic review of performance Development, recently launched under and eff ectiveness of such institutions. We are dealing with the auspices of the National University of the development of Educational Planning and Administration, 250 mln children, INDIAN EDUCATION SERVICES the future of our BY DILEEP RANJEKAR needs to make this happen in collaboration nation, and we need Among the various challenges that we face at the a highly competent with several governmental and non- cadre of people to leadership level is the absence of a consistent n 1950, we as a nation made a constitutional commitment to build a socialistic, governmental bodies that have the capacity manage the same vision and continuity in the service of bureaucrats secular and democratic society to secure justice, liberty and equality on several to contribute to such a process. in charge of the education department. The I attributes. We committed to be a nation where the poorest feel ownership National Policy for Education elaborated towards the country, all communities live in perfect harmony, there is no several points on how to make quality untouchability and women enjoy the same rights as men. After 66 years of independence, education possible for all children. One we have hardly progressed on our constitutional promise. Our performance across of the critical recommendations is the various economic, developmental and social indicators is abysmal. More importantly, creation of the Indian Education Service there are serious challenges on equity, justice and care for human beings. to ensure that the education system is managed by professionals who have an It is well accepted that education is probably the most of quality education for all, such as the lack of political in-depth understanding of the subject. non-violent medium for bringing about social change. In will, absence of accountability in the delivery system, We are dealing with the learning and our country, the state has a constitutional responsibility poor-quality teacher education and inadequate budgets. development of 250 million children, to ensure quality education for all. While we have made However, among the most critical actions required is the future of our nation, and we need a signifi cant progress in the last 20 years to take the enhancing the competence of people engaged in education. highly competent cadre of people who school to children in over 99 percent of our villages, are specially trained to manage the same. quality and equity of education has remained elusive. PRE-SERVICE TEACHER EDUCATION In 1986, through an act of Parliament, the state brought Given our diverse complexities and the socio-economic TAIL-PIECE out the National Policy for Education, defi ning goals that matrix, it is absurd to expect that we can prepare a India, the largest democratic system in were consistent with our constitutional promise. The high-quality teacher through a 10-month Bachelor’s the world, can achieve its constitutional policy has been supported by the National Curricular in Education (B.Ed) programme after a poor-quality and societal goals only if our educational Framework, revised from time to time, elaborating graduation process. What is worse, even the given system is dramatically reformed to meet the purpose, process and assessment of education. framework is not delivered with integrity by over 70 the mammoth task before us. And for Unfortunately, neither the policy nor the curricular percent of the private teacher education institutions. this, we need committed and highly framework has reached the seven million people deployed The fact that less than 10 percent of the teachers cleared competent people and institutions. by the government in 1.4 million schools across the country. the national teacher eligibility tests is evidence of that. Developing such competence is Sudhanva Atri for Forbes India for Atri Sudhanva There are several issues involved in the non-delivery We have to strengthen the B.Ed degree, making it at our number one priority. / Reuters Kopcznski Pawel

74 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 75 INDEPENDENCE DAY SPECIAL

LET THE SUN FREE INDIA

The Godawari solar-thermal FROM A power plant near Nokh, Rajasthan, Profile: Akhil is Asia’s biggest. Gupta is Senior A focus on solar CAD CRISIS energy can lead Managing Director to greater energy at The Blackstone independence Investment in solar power Group and Chair- man of Blackstone can lead to a signifi cant India. He previ- improvement in the balance ously served as CEO-Corporate of payments by reducing Development for energy imports as well as, (RIL), focusing on eventually, driving down developing RIL’s oil & gas, refi n- INDIA power tariffs for end-users ing, and telecom businesses. He began his career at Hindustan Lever.

BY AKHIL GUPTA

he biggest freedom a country can wish for is freedom from external overdependence. With our humongous current account defi cit (CAD), which forces us to depend on with thermal power. In fact, solar, at Rs 8/KWH, is T volatile capital fl ows to fi nance our import bills, the rupee has taken a beating, falling THE BENEFITS 14 percent in a matter of weeks. But a bad CAD aff ects more than just the value competitive even now as it displaces peak power, with % substitution of diesel for power OF A SOLAR generation by solar of the rupee; it imports infl ation, weakens government fi nances by raising subsidies, deters diesel power costing Rs 14/KWH on the margin. The INITIATIVE 50% 60% 70% 100% foreign investment and prevents the Reserve Bank from lowering interest rates. Basically, latest long-term PPA bids from thermal power plants were north of Rs 5/KWH. Solar power costs will continue to Annual Savings for End 7.8 9.3 10.9 15.5 a high CAD sucks the economy into a vicious cycle of high infl ation and low growth. Consumer (Rs ’000 Cr) decrease as panels become cheaper and their conversion Reduction in The biggest culprit here is energy imports. Consequently, against any state defaults and adjust such amounts effi ciency increases; thermal power costs, meanwhile, Petroleum Imports a solution that kills many birds with one stone is for the against disbursements to states. The Central will continue to rise with infl ation. The economics, (Rs ’000 Cr) 17.3 20.7 24.2 34.6 government to go big on solar power in partnership with government’s risk will be diversifi ed against 25 states. therefore, are heavily in favour of solar power. As % of Current 4.6% 5.5% 6.4% 9.2% the private sector. The government’s role should be to: (d) Encourage insurers like LIC to provide takeout The private sector’s role here will be to: Develop solar Account Deficit (a) Act as credit enhancer to tie up facilities fi nancing for fully commissioned projects—this projects more expeditiously and cost-eff ectively, using Reduction in Under 2.8 3.3 3.9 5.5 Recovery (Rs ’000 Cr) from multilateral agencies, the US, Japan and enables recycling of equity to be deployed for the next the latest technology and construction practices; enter Implied Solar Capacity 6,792 8,151 9,509 13,584 China for the import of solar panels worth, say, $50 project, and a steady yield stream for insurers. into long-term PPAs with SEBs; invest equity (around $20 in India (MW) billion over the next fi ve years. This will enable (e) Off er a Re 1/KWH subsidy to SEBs if they pay billion), acquire land and undertake execution risks once the creation of 50 GW of solar power capacity. the solar generators on time. This can be funded they are sure of getting debt fi nancing of 70 percent. (b) Assure solar developers that anyone who signs by a renewable energy fund already built through The benefi ts of this solar initiative will be enormous. to fi ve years for thermal. It will lead to greater energy a valid power purchase agreement (PPA) with any a cess on coal production. This subsidy can also It will mitigate India’s CAD issue, resulting in net savings independence and reduce our carbon footprint. state electricity board (SEB) will quickly receive a eventually be recouped from carbon credits. of $500 billion or more in foreign exchange over 25 years. At the conceptual level, this solution works because the low-interest rupee loan for 70 percent of the total All the actions suggested will enable developers to It will help India manage the power crisis sure to loom government borrows at 4 percent dollar cost to facilitate project cost at the same rate in rupee as the dollar off er solar power to SEBs at a net rate of Rs 5/KWH. This large in three to four years given that the development solar power development, while the returns in dollar interest rate at which government has borrowed. reduction in tariff will ensure faster adoption by states of thermal power has slowed down enormously. A solar terms are 17-18 percent per year. The government will

Getty Images (c) Guarantee SEB payments on the solar PPAs as this form of power becomes immediately competitive plant can be built in six to nine months against four shoulder the risk but it won’t cost anything in real terms. Getty Images

76 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 77 INDEPENDENCE DAY SPECIAL

Consider the central issue now. To continue growing from the country’s perspective. Even at Rs 8/unit, the at 7 percent, India needs a 60 percent jump in power cost of generation from solar PV plants is more than capacity by 2018 from the present 1,78,000 MW. Any 40 percent lower than diesel gensets and is already defi cit needs to be met with diesel gensets, where the at retail parity for industrial/commercial customers marginal cost of power is Rs 14/KWH, without taking in some states. Plus, if solar power were to displace into account subsidies and the cost of importing fuel. only 50 percent of diesel used for power generation, The time is ripe for solar power since the prices of it would assist in the reduction of oil imports by $3 equipment (solar panels) have reduced by over 50 percent billion annually. As the grid connectivity improves, the in the last three years, driving down the cost of solar displacement of diesel by solar generation will reach up generation to as low as Rs 8/KWH. India is in a unique to 70 percent. Over the life of a plant, assuming fl at diesel position to capitalise on these falling costs. First, most prices for the next 25 years, an investment of $1 billion parts of India have very high solar irradiance, with the in solar power reduces the import bill by $9 billion. majority of cities receiving insolation of 2,000–2,500 Despite all these obvious benefi ts, the development of KWH/sqm/year compared to 1,000–1,500 KWH/ such solar power capacity is far below potential. Reason: sqm/year in European cities. Thus, a 1 MW solar plant The unavailability of fi nancing, with banks reluctant to generates 72 percent higher energy—1.75 million KWH/ lend to solar plants, being unwilling to underwrite the credit risk of the SEBs. This is why, to give a boost to the sector, the government should develop the public-private THE MATH: HOW IT WORKS participation (PPP) model described earlier. Impact of solar power 2014 2015 2016 2017 Cumulative INDIA on India’s CAD * It can also enhance its creditworthiness (25 years) by making it a priority sector for lending One-time debt investment 10 10 by banks. Given these loans will be backed Reduction in cost of -7.1 -7 importing panels by hard assets and fi xed PPA tariff s for Savings on oil imports 4.8 4.8 4.8 4.8 121 the next 25 years, the only key risk is the Total debt service -0.7 -1.6 -1.6 -1.5 -14 SEB’s credit risk. If the government can eliminate that, the creditworthiness of the Net impact on BoP 7 3.2 3.2 3.3 110 sector will improve and should increase * Figures in $ billion the availability of loans and reduce the Implied power generation 10,476 10,476 10,476 10,476 in MW (Cumulative) cost of borrowing for developers. Now consider the impact of solar power on the country’s CAD. Cumulatively, over year in India versus 1.02 million KWH/year in Germany. the life of the plant, a $10 billion debt investment results Second, the profi le of generation also matches peak in a net improvement of the balance of payments to the demand for electricity—that is, during daytime hours and tune of $110 billion, with the import cost of panels and in summer (as our power requirement is for cooling). debt service being off set by huge savings in oil imports. Last, setting up solar plants near areas of demand can also Not a bad return on the government’s investment. help balance the grid, since there are no constraints on If the government follows the PPP mode, it will the source of fuel. To illustrate, if solar photovoltaic (PV) attract FDI in the sector. If it passes on the benefi t of plants were set up on only 2 percent of the landmass of low interest rates to developers, the solar tariff can fall Rajasthan and Gujarat, they would generate enough power further (a reduction of debt rates from 12 percent to 4 to meet the current energy needs of the entire country! percent should drive the tariff down from Rs 8 to Rs 6). Going solar is also one of the few plausible ways to The solar solution allows the government to reduce bridge a power defi cit in a quick way given the shorter energy imports and improve CAD, mitigate endemic gestation periods for solar plants. Further, they can power shortages and boost GDP growth while taking use small/irregular-sized land plots. In fact, various advantage of globally depressed equipment prices and countries have experimented with concepts such as low interest rates. All this, in turn, will drive power greenhouse-cum-solar plants, which may help produce tariff s down further, a win-win-win for the government- power as well as boost agricultural productivity. developer-consumer. The only question left to ask is Finally, let’s look at the economics of solar power whether India will grab its moment in the sun.

78 | FORBES INDIA | AUGUST 23, 2013 INDEPENDENCE DAY SPECIAL

there is danger of those older voices being forgotten. And then there was the Forum of Free Enterprise (FFE), BR SHENOY Perhaps the least well known of these (outside set up in 1956, which single-mindedly debunked myths THE LOST AD SHROFF the rarefi ed world of economists, that is) is that about socialism in the popular mind and countered the of BR Shenoy. Shenoy’s many treatises provided anti-private sector calumny of the socialists. The Forum HEROES OF the intellectual underpinning to the battle against was the brainchild of AD Shroff —one of the authors of development economics and centralised planning. the Bombay Plan of 1944 and a non-offi cial delegate to ECONOMIC His solitary dissent note to the memorandum of the Bretton Woods conference—who had been opposing the panel of economists on the Second Five-Year Nehru’s socialist views since the mid-1930s. With FREEDOM Plan (of which he was a member) is a must-read consumer activist MR Pai heading the secretariat for 20 critique of defi cit fi nancing and the dangers of over- years, the Forum provided a platform to an array of voices Forbes India ambitious plans. “Controls and physical allocations through writings, lectures and essay competitions. pays tribute to are not a necessary adjunct to planning... There Though better known for his annual analysis of the are great advantages in allowing freedom to the Union budget, eminent lawyer Nani Palkhivala (who was the courageous economy, and to the price system in the use and FFE president for 32 years) needs also to be remembered intellectuals who distribution of the needs of production,” he wrote. for his 1965 book, The Highest Taxed Nation, which NANI spoke outt against PALKHIVALA Shenoy stands out because he was from the academic made the very points that tax reformers of the early the disastroustrous path NG RANGA world, which did not putIND up a strong enough opposition to IA1990s did. In the courts, he not only defended personal of socialismsm in the the Nehruvian socialist world-view. There freedoms but also economic freedom, were right-of-centre economists but few who BR SHENOY challenging bank nationalisation and a Nehruvianan years consistently attacked the economic path that newsprint control order in the 1970s. India was taking the way Shenoy did. A later WAS AN All these people were reviled by the generation of economists—Jagdish Bhagwati EARLY CRITIC establishment and subject to slander CHAKRAVARTI and Meghnad Desai, among them—was vocal OF DEFICITS campaigns, the most common being that RAJAGOPALACHARI in its criticism but they were largely based AND CENTRAL they were American agents. The Swatantra abroad and their infl uence increased only PLANNING Party was labelled a businessman’s party after India liberalised its economy in 1991. (though the majority of industrialists In the overwhelmingly socialist- did not fund it). A central minister inclined political space, it was the founding triumvirate told Shroff that Nehru wanted him to disband the of the Swatantra Party—Rajaji, Minoo Masani and NG FFE. But these voices refused to pipe down. Ranga—who ceaselessly championed an alternative Were these the only dissenters? Certainly not. There economic model. Rajaji, the legend goes, was the one were people like Freddie Mehta, Hannan Ezekiel, DR BY SEETHA who said the ‘licence-permit-quota raj’ had replaced Pendse and Jay Dubashi (who later became an ideologue the . The Jana Sangh (the predecessor of the for the BJP), to name just a few. But it was natural for them hen the history of India is written, no future historian should pity us that Bharatiya Janata Party) was also in favour of an open to speak out against socialism since they were associated in a country where great saints have lived, there was not a single Indian economy but its economic ideology was overshadowed with private industry. The fi rst three worked for the Tata “W to point out the absurdity of the ‘permit-licence-quota raj’.” So said C by its cultural conservatism and jingoistic nationalism. group and Dubashi was director of the Economic and Rajagopalachari (Rajaji) when asked why he persisted in criticising Nehru’s economic It was Nehru’s increasingly statist policies that brought Scientifi c Research Foundation under the Federation policies when no one heeded him. G Narayanaswamy, a close associate, recounts this the three Congressmen together, with the Nagpur session of Indian Chambers of Commerce and Industry. anecdote while penning a piece on him in Profi les in Courage: Dissent on Indian Socialism. of the Congress in 1959 (advocating joint co-operative Eyebrows will be raised that IG Patel, Manu Shroff and farming, considered a euphemism for collectivisation of several illustrious economists from the Bombay school As the debate over two economic And yet a few voices in that wilderness agriculture) triggering the fi nal break with the party and do not fi nd a mention here. But not all of them were models—a welfarist-socialist one and a A FEW VOICES refused to be stifl ed, forcefully and cogently the launch of the Swatantra Party. For 15 years, it presented vociferous or outspoken in the way the others were. Patel market-oriented one—gets increasingly REFUSED TO arguing for a liberal economic order and a trenchant and principled opposition to government and Shroff worked for the government and though they cacophonous, it is worthwhile to remember BE STIFLED, warning of the dangers that the Nehruvian micro-management of the economy, defi cit fi nancing and may have slipped in some liberal ideas into economic a time when such energetic pow-wows ARGUING FOR model posed not just to the economy but high levels of taxation. An impressive showing in the 1967 policy, they were not open dissenters or radical reformers. were near-absent. When the predominantly A LIBERAL to the polity as well (a prediction that elections was followed by crushing defeat in 1971. The party That’s why it is necessary to doff our hats to these left-of-centre intellectual climate—which ECONOMIC came true in 1975). Today, as the economic disbanded in 1974, by which time Rajaji had died and Ranga brave voices which ensured that India will not be dominated every fi eld from academia to punditry space bursts with numerous inexplicably rejoined the Congress. It was left to Masani pitied in the way Rajaji had worried about. ORDER Sameer Pawar fi lms—obscured any contrarian view. illustrious advocates for an open economy, to keep the Swatantra ideology alive till his death in 1998. Seetha is a senior journalist and author

80 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 81 FEATURES: AMERICA’S BEST COLLEGES

David Maxwell, president of THE TOP 300 Drake: Sound management versus self-inflicted horror RANK COLLEGE FINANCIAL GRADE 1 STANFORD UNIVERSITY A+ Stanford, CA 2 POMONA COLLEGE A+ Claremont, CA 3 PRINCETON UNIVERSITY A+ Princeton, NJ 4 YALE UNIVERSITY A+ New Haven, CT 5 COLUMBIA UNIVERSITY A+ New York, NY 6 SWARTHMORE COLLEGE A+ Swarthmore, PA 7 UNITED STATES MILITARY ACADEMY NA West Point, NY 8 HARVARD UNIVERSITY A+ Cambridge, MA 9 WILLIAMS COLLEGE A+ Williamstown, MA 10 MASSACHUSETTS INSTITUTE OF TECHNOLOGY A+ Cambridge, MA 11 UNIVERSITY OF PENNSYLVANIA A+ Philadelphia, PA 12 BROWN UNIVERSITY A+ Providence, RI 13 AMHERST COLLEGE A+ Amherst, MA 14 UNIVERSITY OF CHICAGO A+ Chicago, IL INDIA 15 DUKE UNIVERSITY A+ Durham, NC 16 DARTMOUTH COLLEGE A+ Hanover, NH 17 NORTHWESTERN UNIVERSITY A+ Evanston, IL 18 CALIFORNIA INSTITUTE OF TECHNOLOGY A Pasadena, CA 19 CORNELL UNIVERSITY A+ Ithaca, NY 20 BOWDOIN COLLEGE A+ Brunswick, ME 21 WASHINGTON AND LEE UNIVERSITY A+ Lexington, VA 22 UNIVERSITY OF CALIFORNIA NA Berkeley, CA 23 WELLESLEY COLLEGE A+ Wellesley, MA 24 UNIVERSITY OF NOTRE DAME A+ Notre Dame, IN 25 TUFTS UNIVERSITY A+ Medford, MA 26 GEORGETOWN UNIVERSITY B Washington, DC 27 VASSAR COLLEGE A+ Poughkeepsie, NY 28 UNITED STATES NAVAL ACADEMY NA Annapolis, MD 29 UNIVERSITY OF VIRGINIA NA BY MATT SCHIFRIN Charlottesville, VA 30 UNIVERSITY OF MICHIGAN, ANN ARBOR NA Ann Arbor, MI 31 UNITED STATES AIR FORCE ACADEMY NA Colorado Springs, CO 32 DAVIDSON COLLEGE A+ Davidson, NC 33 RICE UNIVERSITY A+ COLLEGES Houston, TX 34 UNIVERSITY OF CALIFORNIA, LOS ANGELES NA Los Angeles, CA 35 BOSTON COLLEGE A Chestnut Hill, MA AT RISK 36 COLGATE UNIVERSITY A+ Hamilton, NY 37 VANDERBILT UNIVERSITY A Parents and students spend vast amounts of time Nashville, TN 38 UNIVERSITY OF NORTH and money trying to fi nd a school that is the right CAROLINA, CHAPEL HILL NA Chapel Hill, NC 39 WESLEYAN UNIVERSITY A+ fi t academically and socially. They’d be wise to pay Middletown, CT 40 BRYN MAWR COLLEGE A+ more attention to colleges’ fi nancial health Bryn Mawr, PA 41 MIDDLEBURY COLLEGE A+ Middlebury, VT 42 CARNEGIE MELLON UNIVERSITY A

Ryan Donnell for Forbes Donnell for Ryan Pittsburgh, PA

82 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 83 FEATURES: AMERICA’S BEST COLLEGES

n late June, nearly two months Jackie Nealon, Long Island University’s THE TOP 300 after most incoming freshmen vice president of enrolment, LIU takes RANK COLLEGE FINANCIAL had sent in their deposit cheques it a step further in the spring and sends GRADE 43 HAVERFORD COLLEGE A+ securing places at hundreds of admissions offi cers into Long Island high Haverford, PA I 44 COLLEGE OF WILLIAM AND MARY NA colleges across America, Long Island schools to admit students on location— Williamsburg, VA the academic version of a house call. 45 CARLETON COLLEGE A+ University’s Post campus, nestled in Northfield, MN the wealthy New York City suburb of If LIU sounds a bit desperate, it is. From 46 JOHNS HOPKINS UNIVERSITY A Baltimore, MD Brookville, New York, was testing a new a financial standpoint LIU is suff ering 47 HAMILTON COLLEGE A+ Clinton, NY approach in its eff orts to fill up the 250 or from a host of ills common to hundreds 48 LAFAYETTE COLLEGE A+ Easton, PA so empty seats it had in its class of 2017. of colleges today. According to the most 49 COLBY COLLEGE A+ Waterville, ME The week of June 24 was ‘Express recent financial data, LIU has supplied 50 OBERLIN COLLEGE A+ Oberlin, OH Decision Week’ at LIU. High school seniors to the Department of Education, its Post 51 BRANDEIS UNIVERSITY A- were invited to walk into Post’s Mullarkey Waltham, MA 52 HARVEY MUDD COLLEGE A+ Hall any time from 9 am to 7 pm, transcript, Claremont, CA 53 UNIVERSITY OF ILLINOIS, URBANA-CHAMPAIGN NA SAT scores and personal statement in hand, GRINNELL Urbana, IL COLLEGE 54 BERNARD COLLEGE A and LIU’s admissions offi cers promised to New York, NY make an acceptance decision on the spot. UNDERGRADS 55 UNIVERSITY OF WASHINGTON NA 1,693 Seattle, WA All application fees would be waived, and 56 NEW YORK UNIVERSITY B TUITION New York, NY registration for fall classes would be im- 57 WASHINGTON UNIVERSITY $41,000 IN ST LOUIS A+ mediate. An identical event was being held St Louis, MO $1.5 billion Famous Alumni 58 UNION COLLEGE A simultaneously at LIU’s Brooklyn campus. Schenectady, NY endowment: Christine Thorburn,IND59 SMITHIA COLLEGE A+ Post’s aggressive marketing ploy is Northampton, MA Warren Buffett served ’92, Olympic cycler 60 WAKE FOREST UNIVERSITY A+ eerily reminiscent of the on-the-spot low- as trustee from 1968 Ian Roberts ’87, Winston-Salem, NC to 2011 61 UNIVERSITY OF ROCHESTER A doc-mortgage approvals that occurred founder, Upright Rochester, NY 93% freshman- Citizens Brigade during the heady days leading up to the 62 WHITMAN COLLEGE A+ to-sophomore Robert Noyce ’49, Walla Walla, WA housing crisis. But the product here is a retention rate 63 UNIVERSITY OF SOUTHERN co-founder, Intel CALIFORNIA A bit less tangible than a loan that secures 2013: Voted to retain Los Angeles, CA 64 GRINNELL COLLEGE A+ a house. These admissions offi cers are need-blind admissions Grinnell, IA 65 REED COLLEGE A+ selling the promise of a better life through Portland, OR 66 UNIVERSITY OF TEXAS, AUSTIN NA post-secondary-school learning. Austin, TX 67 COOPER UNION A LIU isn’t alone. Mount Saint Mary campus has been running at an operating New York, NY 68 UNIVERSITY OF WISCONSIN, College in Newburgh, New York and deficit for three years. Its core expenses, or MADISON NA Madison, WI Centenary College in Hackettstown, those essential for education activities, have 69 KENYON COLLEGE A Gambier, OH New Jersey off er similar same-day, on- been greater than its core revenues. Like 70 LEHIGH UNIVERSITY A+ Bethlehem, PA the-spot admissions events. According to many other schools, Post is a tuition junkie, 71 COLLEGE OF THE HOLY CROSS A with nearly 90 percent of its core annual Worcester, MA 72 SANTA CLARA UNIVERSITY B+ revenues derived from tuition and fees. Santa Clara, CA 73 UNIVERSITY OF MARYLAND, This year Post raised its tuition and COLLEGE PARK NA Dollar Dunces College Park, MD fees by 3.5 percent to $34,005, yet it 74 UNIVERSITY OF FLORIDA NA Dominate Gainesville, FL off ers steep tuition discounts to nearly 75 BRIGHAM YOUNG UNIVERSITY A DISTRIBUTION 436 Provo, UT every incoming freshman. In fact, a quick 76 COLORADO COLLEGE A+ OF GRADES: Private Colorado Springs, C0 not-for-profit colleges click over to its website shows the deals 77 GEORGE WASHINGTON UNIVERSITY B+ Washington, DC available. If your kid is an A student with 78 TRINITY COLLEGE A Hartford, CT an SAT score of about 1300 out of 1600, 79 VILLANOVA UNIVERSITY B Villanova, PA 253 expect at least a $20,000 rebate per year. 80 CENTRE COLLEGE A- This seeming paradox of raising prices Danville, KY 81 SOUTHERN METHODIST UNIVERSITY B+ while simultaneously off ering deep Dallas, TX 82 MACALISTER COLLEGE A+ 128 108 St Paul, MN 83 GEORGIA INSTITUTE OF TECHNOLOGY NA Best Colleges: Edited by Caroline Howard. Rank- Atlanta, GA 84 MOUNT HOLYOKE COLLEGE A+ ings Calculated Exclusively for Forbes by The South Hadley, MA AB CD Center for College Affordability & Productivity 85 BOSTON UNIVERSITY B Lane Hickenbottom / Reuters Lane Hickenbottom Boston, MA

84 | FORBES INDIA | AUGUST 23, 2013 discounts is a way of life among middling so-called tuition discount rate has risen for THE TOP 300 and lower quality colleges in the market the sixth straight year and is now averaging RANK COLLEGE FINANCIAL for higher education. It’s a symptom of a 45 percent. In some ways colleges oper- GRADE 86 FRANKLIN AND MARSHALL COLLEGE A deeply troubled system where the cachet ate like prestige-seeking liquor brands. Lancaster, PA 87 VIRGINIA MILITARY INSTITUTE NA of elite institutions like Harvard and Yale In other ways they are more like Macy’s Lexington, VA 88 UNIVERSITY OF RICHMOND A+ has led thousands of non-elite schools to off ering regular sales days, only quietly. Richmond, VA 89 CASE WESTERN RESERVE UNIVERSITY A employ a strategy where higher prices and LIU’s Post campus has a puny Cleveland, OH 90 UNIVERSITY OF GEORGIA NA deeper discounts are more eff ective than endowment of $43 million, or about $6,000 Athens, GA 91 SEWANEE—UNIVERSITY OF THE SOUTH A cutting prices and tightening discounts. per each of its 7,000 enrolled students. Sewanee, TN According to the National Association of (That compares to $2 million per student 92 DEPAUW UNIVERSITY A- Greencastle, IN College & University Business Officers, the at Princeton.) Its admissions yield was 93 PENNSYLVANIA STATE UNIVERSITY, UNIVERSITY PARK NA last reported to be 17 percent—meaning University Park, PA 94 UNITED STATES COAST GUARD fewer than two out of every 10 high school ACADEMY NA New London, CT BEHIND THE GRADES seniors it accepts choose to attend. 95 SCRIPPS COLLEGE A+ Claremont, CA If colleges and universities were traded like stocks Of course, LIU’s precarious financial 96 UNIVERSITY OF CALIFORNIA, SANTA BARBARA NA based on their listed tuition prices, higher education position says little about the quality of Santa Barbara, CA would be a short-seller’s paradise. College pricing is 97 INDIANA UNIVERSITY, BLOOMINGTON NA perversely ineffi cient—blue chips and penny stocks the education it off ers—LIU doesn’t Bloomington, IN 98 WHEATON COLLEGE B+ tend to be priced in the same narrow range. Except Norton, MA for a small number of elite institutions that don’t 99 UNIVERSITY OF CALIFORNIA, DAVIS NA need to engage in discounting, listed tuition rates Davis, CA rarely represent actual fair values or real transaction 100 PEPPERDINE UNIVERSITY B+ PEPPERIDGE Malibu, CA prices. And they almost never refl ect the underly- UNIVERSITY 101 UNIVERSITY OF COLORADO, BOULDER NA ing fi nancial well-being of a college. To do that we Boulder, CO created the Forbes College Financial Grades, which UNDERGRADSIND102 CONNECTICUTIA COLLEGE B+ New London, CT measure the fi scal soundness of more than 900 3,474 103 UNIVERSITY OF DENVER B four-year, private, not-for-profi t schools with more Denver, CO TUITION than 500 students (public schools are excluded). For 104 DICKINSON COLLEGE A the purposes of our analysis we used the two most $42,770 Carlisle, PA 105 RENSSELAER POLYTECHNIC INSTITUTE C recent fi scal years available from the Department Closest Beaches: Famous Alumni Troy, NY of Education—2011 and 2010. The grades measure 106 PURDUE UNIVERSITY, WEST LAFAYETTE NA fi nancial fi tness as determined by nine components Malibu Lagoon State Neil Clark Warren West Lafayette, IN 107 BATES COLLEGE A broken into three categories. Beach, Dan Blocker ’56, co-founder, Lewiston, ME Beach, Topanga State  eHarmony 108 HOBART AND WILLIAM Balance Sheet Health (40%): As determined Beach, Zuma Beach SMITH COLLEGES B by looking at endowment assets per full-time Rod Blagojevich ’83 Geneva, NY Bans: 109 UNIVERSITY OF MINNESOTA, equivalent (15%), expendable assets (assets that can JD, former governor, TWIN CITIES NA be sold in a pinch) to debt, otherwise known as a Alcohol, visiting Illinois Minneapolis, MN college’s viability ratio (10%) and a similar measure opposite sex’s dorm 110 VIRGINIA TECH NA Blacksburg, VA known as the primary reserve ratio (15%). Primary room after 1 am 111 COLORADO SCHOOL OF MINES NA reserve measures how long a college could survive Golden, OC if it had to sell assets to cover its expenses. Schools 112 UNIVERSITY OF CALIFORNIA, IRVINE NA Irvine, CA like Pomona and Swarthmore are so asset-rich, for 113 GETTYSBURG COLLEGE B+ example, that they could cover expenses for 10 years Gettysburg, PA without collecting a penny in tuition. Other well- 114 UNIVERSITY OF CALIFORNIA, SAN DIEGO NA known schools like Carnegie Mellon and Syracuse rank among Forbes Top Colleges but La Jolla, CA have primary ratios of about 1.0, meaning they tends to fare well in rankings of regional 115 SKIDMORE COLLEGE A could last about a year. Saratoga Springs, NY schools. However, judged as an ongoing 116 AMERICAN UNIVERSITY B Operational Soundness (35%): A blend Washington, DC business, Long Island University would 117 OCCIDENTAL COLLEGE A of return on assets (10%), core operating margins Los Angeles, CA (10%) and perhaps most important, tuition and appear to be severely troubled, struggling 118 PITZER COLLEGE A fees as a percentage of core revenues (15%). Tuition Claremont, CA year to year to pay its bills. Indeed, 119 WOFFORD COLLEGE B dependency is the most serious risk facing middling Spartanburg, SC colleges today. LIU recently hired a new president 120 KALAMAZOO COLLEGE A  who is restructuring its operations. Kalamazoo, MI Admissions Yield (10%): The percentage of 121 SAINT OLAF COLLEGE A accepted students who choose to enroll tells not According to Forbes’s new Financial Northfield, MN only how much demand there is from a specifi c 122 TEXAS A&M UNIVERSITY, COLLEGE STATION NA school’s target customers but also gives an Grades, which analyses the balance College Station, TX indication of the effectiveness of its admissions staff. 123 SYRACUSE UNIVERSITY B sheets and operational strength of private Syracuse, NY Freshmen Receiving Institutional Grants not-for-profit colleges, Long Island 124 UNIVERSITY OF MIAMI B (7.5%): The most desperate schools use ‘merit aid’ as Coral Gables, FL University’s Post campus gets a grade of D. 125 RUTGERS UNIVERSITY, a tool to lure more than 90% of incoming freshmen. NEW BRUNSWICK NA LIU is by no means alone. Some New Brunswick, NJ Instructional Expenses per Full-Time Student 126 UNIVERSITY OF DELAWARE NA (7.5%): Struggling schools tend to skimp in this area. 107 other schools earn a D—including Newark, DE

127 LOYOLA UNIVERSITY MARYLAND C Getty Images —MS well-regarded institutions like Ohio’s Baltimore, MD

AUGUST 23, 2013 | FORBES INDIA | 85 FEATURES: AMERICA’S BEST COLLEGES

Wittenberg University—according to vast majority of colleges in the US are THE TOP 300 our analysis, and more than half of the bloated with personnel and programmes RANK COLLEGE FINANCIAL 925 colleges we graded on financial that make little economic sense. GRADE 128 TULANE UNIVERSITY A fitness would be considered C students Almost all colleges have noble mission New Orleans, LA 129 SAINT LAWRENCE UNIVERSITY B or worse (see ‘Behind the Grades’, p 85). statements, but few have pervasive Canton, NY 130 DENISON UNIVERSITY A The prognosis is ominous in part cultures or are able to focus employees Granville, OH 131 SARAH LAWRENCE COLLEGE B- because institutions of higher education on core competencies the way great Bronxville, NY companies like Coke, IBM and Wells 132 SOUTHWESTERN UNIVERSITY A operate in an extremely diffi cult business Georgetown, TX environment today. Imagine, if you will, Fargo do. Most colleges and universities 133 WILLAMETTE UNIVERSITY B Salem, OR running a company that sells a commodity try to be all things to all people. 134 CREIGHTON UNIVERSITY C+ Omaha, NE product, where pricing is opaque and “When I was CEO of a business, if we 135 YESHIVA UNIVERSITY A- New York, NY you have hundreds of competitors all had a product that wasn’t selling, we took 136 WORCESTER POLYTECHNIC INSTITUTE A- Worcester, MA clamouring after the same shrinking it of the shelf, and there was no question. 137 CUNY, CITY COLLEGE NA New York, NY customer base—which, by the way, We focussed on what the market 138 OHIO STATE UNIVERSITY, COLUMBUS NA happens itself to be in financial distress. demanded,” says Robert Dickeson, Columbus, OH 139 SUNY, BINGHAMTON (BINGHAMTON UNIVERSITY) NA Then consider that one of your other the former president of the University Binghamton, NY 140 UNIVERSITY OF CONNECTICUT NA chief revenue drivers, subsidies and grants of Northern Colorado and author of Storrs Mansfield, CT Prioritizing Academic Programs and 141 WABASH COLLEGE A from federal and state governments, has Crawfordsville, IN either been cut back or eliminated. Add Services (John Wiley & Sons, 2010). 142 TRINITY UNIVERSITY A San Antonio, TX to this an evaporating competitive moat “Higher education operates in a much 143 UNIVERSITY OF UTAH NA Salt Lake City, UT being stormed by newly minted for-profit diff erent culture, and the decisions have 144 FURMAN UNIVERSITY A INDGreenville,IA SC businesses and cheap online alternatives. usually been about serving more people and 145 BENNINGTON COLLEGE B- Bennington, VT “This environment is so competitive. adding more programmes. Unfortunately, 146 EARLHAM COLLEGE A Richmond, IN Frankly, it’s a horror that we’ve largely there hasn’t been a corresponding cutting 147 HAMPSHIRE COLLEGE C- inflicted on ourselves as a community,” of programmes or majors that no longer Amherst, MA 148 RHODES COLLEGE A says David Maxwell, president of Drake work. They operate this way out of a Memphis, TN 149 LOYOLA MARYMOUNT UNIVERSITY B University in Des Moines, Iowa, referring fear of having to cut people or some Los Angeles, CA 150 CLARK UNIVERSITY A- to the ongoing behind-the-scenes price/ other dimension that isn’t rational.” Worcester, MA 151 PROVIDENCE COLLEGE B rebate wars. “In many ways it’s [a That way of doing business was Providence, RI 152 UNIVERSITY OF TULSA A business] that’s dependent on the decision- tolerable when the market of high school Tulsa, OK 153 CLEMSON UNIVERSITY NA making behaviour of 17-year-olds.” graduates was expanding, as it was from Clemson, SC 154 MICHIGAN STATE UNIVERSITY NA Drake, which has an enrolment of 1990 to 2010. However, a study fi nanced East Lansing, MI 155 MIAMI UNIVERSITY, OXFORD NA 5,300 and was founded in 1881, faced by the College Board and ACT shows that Oxford, OH 156 UNIVERSITY OF VERMONT NA insolvency a little more than a decade the production of high school graduates Burlington, VT ago after most of its senior management 157 UNIVERSITY OF NEW HAMPSHIRE NA Durham, NH had left. But after taking over in 1999, 158 HENDRIX COLLEGE A Conway, AR Maxwell cut expensive underenrolled 159 UNIVERSITY OF CALIFORNIA, Billionaire SANTA CRUZ NA programmes like graduate level nursing Connection: Santa Cruz, CA $60 million from 160 NORTH CAROLINA STATE and redirected resources into high-demand UNIVERSITY, RALEIGH NA George Soros Raleigh, NC off erings like its undergraduate pharmacy in 2011 161 UNIVERSITY OF PUGET SOUND B Tacoma, WA major. For the last eight years, Drake has 162 DRAKE UNIVERSITY C+ Des Moines, IA shown small operating profits, and its 163 FORDHAM UNIVERSITY C+ Bronx, NY endowment has grown to $169 million from BARD COLLEGE Famous 164 COLLEGE OF WOOSTER A- UNDERGRADS Faculty: Wooster, OH $104 million in 1999. While Drake is still 165 UNITED STATES MERCHANT MARINE John Ashbery, poet ACADEMY NA largely tuition-dependent, it earns a C+ for 1,985 Kings Point, NY Bill T Jones, TUITION 166 BARD COLLEGE A- financial health among private colleges. choreographer/ Annandale-on-Hudson, NY But managers like Maxwell are $44,800 dancer 167 LAWRENCE UNIVERSITY B MALE-TO-FEMALE Appleton, WI the exception. By far the biggest Mona Simpson, 168 JAMES MAIDS ON UNIVERSITY NA RATIO: author and younger Harrisonburg, VA problem at most colleges is that they 169 UNIVERSITY OF DALLAS C 42% TO 58% sister of Steve Jobs Irving, TX are governed in a way that fl ies in the 170 CALIFORNIA POLYTECHNIC STATE UNIVERSITY, SAN LUIS OBISPO NA San Luis Obispo, CA Luke MacGregor / Reuters Luke face of sound business practices. The

86 | FORBES INDIA | AUGUST 23, 2013 FEATURES: AMERICA’S BEST COLLEGES

THE TOP 300 support from Transylvania’s board of schools for the buck but also those that are THE TOP 300 trustees, and, according to Forbes’s likely to be around for many years to come. RANK COLLEGE FINANCIAL RANK COLLEGE FINANCIAL GRADE financial health ratings, the small Lucie Lapovsky, former VP of finance at GRADE 171 UNIVERSITY OF PORTLAND C 215 TRANSYLVANIA UNIVERSITY A- Portland, OR college earns a relatively impressive Baltimore’s Goucher College and a higher- Lexington, KY 172 UNIVERSITY OF SAN DIEGO B 216 MUHLENBERG COLLEGE B San Diego, CA grade of A–. Nonetheless, Williams felt ed financial consultant, cautions against Allentown, PA 173 SAINT JOHN’S COLLEGE B compelled to announce that he would ignoring the financial health of the colleges 217 UNIVERSITY OF OREGON NA Santa FE, NM Eugene, OR 174 COLLEGE OF NEW JERSEY NA resign after the 2013–14 academic year. you choose: “Visible signs of financial 218 UNIVERSITY OF SAINT THOMAS B Ewing, NJ St Paul, MN 175 MILLS COLLEGE B Some of higher education’s problems stress can include fewer classes off ered 219 JOHN CARROLL UNIVERSITY B Oakland, CA University Heights, OH 176 MARQUETTE UNIVERSITY C+ go beyond management. Even the metrics less frequently, more classes taught by 220 GUSTAVUS ADOLPHUS COLLEGE C+ Milwaukee, WI St. Peter, MN 177 SAINT MARY’S COLLEGE OF MARYLAND NA of higher education lead to ineffi ciencies. 221 ALBION COLLEGE B+ St. Mary’s City, MD Albion, MI 178 JUNIATA COLLEGE C Today standard academic achievement, 222 HOPE COLLEGE B Huntingdon, PA for example, is measured by credit hours, Holland, MI 179 LOUISIANA STATE UNIVERSITY NA Virtual Leader: 223 SUNY, STONY BROOK Baton Rouge, LA Largest fully online (STONY BROOK UNIVERSITY) NA or ‘seat time’, which can run $1,300 per Stony Brook, NY 180 UNIVERSITY OF MASSACHUSETTS, student population AMHERST NA 224 WHEATON COLLEGE A Amherst, MA hour at schools like New York University. among US research- Wheaton, IL 181 ALLEGHENY COLLEGE B intensive universities 225 AUBURN UNIVERSITY NA Meadville, PA Undergraduates know that they need Auburn, AL 182 UNIVERSITY OF OKLAHOMA, NORMAN NA 120 credits to get a bachelor’s degree. Graduation Rates: 226 ARIZONA STATE UNIVERSITY NA Norman, OK Phoenix, AZ 32% 4-year 183 UNIVERSITY OF IOWA NA However, consultants like Dickeson 227 SAINT JOSEPH’S UNIVERSITY C+ Iowa City, IA ARIZONA 57% 6-year Philadelphia, PA 184 LEWIS & CLARK COLLEGE B argue that competency should be measured STATE 228 ILLINOIS INSTITUTE OF TECHNOLOGY C Portland, OR Sun Devil Stadium: Chicago, IL 185 FAIRFIELD UNIVERSITY B instead of hours. Online-only Western UNIVERSITY Seen in Jerry Maguire 229 UNIVERSITY OF MARY WASHINGTON NA Fairfield, CT INDIA Fredericksburg, VA Governors University has been off ering UNDERGRADS (1996), U2’s Rattle and 186 MILLSAPS COLLEGE B Hum (1988) and Raising 230 WITTENBERG UNIVERSITY D Jackson, MS 58,404 Springfield, OH 187 CLARKSON UNIVERSITY C accelerated, self-paced degrees for 14 years. Arizona (1987) 231 ILLINOIS WESLEYAN UNIVERSITY B Potsdam, NY Last month the University of Wisconsin Mayo Clinic Bloomington, IL Faculty and students protest against state budget cuts, fee increases and the University of California administration's 188 FISK UNIVERSITY B 232 IOWA STATE UNIVERSITY NA Nashville, TN TUITION Collaboration: Ames, IA handling of the California budget crises during a rally at the University of California, Berkeley, in September 2009 got approval from its regional accreditation 189 HAMPDEN-SYDNEY COLLEGE B $9,700 In-State MD/JD and MD/MBA 233 MANHATTAN COLLEGE C Hampden-Sydney, VA organisation to off er similar competency- joint degree programmes Riverdale, NY 190 UNIVERSITY OF SOUTH CAROLINA, $23,000 Out 234 ELON UNIVERSITY B COLUMBIA NA Elon, NC has fallen from its 3.4 million peak in When university presidents do step Columbia, SC based degrees to undergraduates. 235 BAYLOR UNIVERSITY C 2011 to a current 3.2 million—and is up and act more like corporate managers, 191 GONZAGA UNIVERSITY C No one expects change to come rapidly Waco, TX Spokane, WA 236 NORTHEASTERN UNIVERSITY C+ likely to stay there until 2020. This ugly they can face the kind of backlash R Owen 192 GROVE CITY COLLEGE NA to higher education. “A large number of Boston, MA Grove City, PA 237 XAVIER UNIVERSITY C demographic fact, plus the decline in Williams did at Kentucky’s Transylvania 193 UNIVERSITY OF PITTSBURGH NA institutions continue to operate in a triage adjunct professors, less money for clubs and Cincinnati, OH Pittsburgh, PA 238 MERRIMACK COLLEGE D household wealth brought on by the Great University. Williams cut his teeth on Wall 194 UNIVERSITY OF SAN FRANCISCO B- mode,” says veteran college-bond issuer cutbacks in the upkeep of campus facilities.” North Andover, MA San Francisco, CA 239 POLYTECHNIC INSTITUTE OF NYU D Recession, has exacerbated the problem. Street over a 24-year career at Salomon 195 BENTLEY UNIVERSITY B- Fred Prager of investment banking firm Financial woes are also the leading cause Brooklyn, NY Waltham, MA 240 OKLAHOMA STATE UNIVERSITY NA Amit Mrig, president of Denver Brothers, Goldman Sachs and finally 196 HILLSDALE COLLEGE NA Prager & Co. “They will remain reactive, of accreditation suspensions. Indeed, more Stillwater, OK Hillsdale, MI research fi rm Academic Impressions, as chairman of Bear Stearns Asia. After with everything being a crisis. It’s very than a dozen schools among our C- and 241 SEATTLE UNIVERSITY C 197 GEORGE MASON UNIVERSITY NA Seattle, WA Fairfax, VA blames inept leadership across the deciding on a career switch and earning tough for them to pause and get even to a D- rated colleges are already facing some 242 AUGUSTAN COLLEGE C+ 198 PACIFIC UNIVERSITY C Sioux Falls, SD Forest Grove, OR board. “There is a denial bubble in a master’s degree in law and a PhD in point of mendability.” That doesn’t mean kind of accreditation inquiry. The last 243 OHIO NORTHERN UNIVERSITY C 199 UNIVERSITY OF WYOMING NA Ada, OH Laramie, WY higher education,” says Mrig, citing a history from Yale, he was hired in the consumers of higher education need to be in thing you want is for Junior’s college to 244 THE CITADEL NA 200 OHIO WESLEYAN UNIVERSITY B Charleston, SC Delaware, OH study showing that 74 percent of college summer of 2010 to run the Lexington, the dark. Combining Forbes’s Top College lose its accreditation. When that happens 245 TEXAS CHRISTIAN UNIVERSITY A 201 WHITWORTH UNIVERSITY C Fort Worth, TX Spokane, WA presidents state that their institutions Kentucky liberal arts college. By most ratings with its new Financial Grades the feds pull financial aid, enrolment 246 UNIVERSITY OF KANSAS NA 202 FLORIDA STATE UNIVERSITY NA Lawrence, KS Tallahassee, FL plummets and the lights get turned out. cannot sustain additional budget cuts accounts Williams was succeeding. can help you home in on not just the best 247 UNIVERSITY OF NEBRASKA, LINCOLN NA 203 CATHOLIC UNIVERSITY OF AMERICA B Lincoln, NE without negatively impacting quality. Enrolment had risen by 20 percent, Washington, DC 248 VALPARAISO UNIVERSITY B- 204 COLLEGE OF THE ATLANTIC NA Valparaiso, IN University presidents must placate and the 233-year-old school had begun Bar Harbor, ME 249 UNIVERSITY OF DAYTON B 205 UNIVERSITY OF ALABAMA NA Dayton, OH multiple factions outside of their boards construction of a new athletics complex. Tuscaloosa, AL ometime in 2004, Richard 250 SUNY, GENESEO NA of trustees, including faculty, and too However, in May 2013, Williams was 206 UNIVERSITY OF REDLANDS C- C Vos, the admission dean Geneseo, NY Redlands, CA SCHOOLS OF 251 AUSTIN COLLEGE B often inaction is the easiest path. “One socked with a “no confidence” vote from 207 SAINT LOUIS UNIVERSITY B at Claremont McKenna Sherman, TX St Louis, MO S 252 SWEET BRIAR COLLEGE A diff erence between the for-profit world the college’s faculty. Apparently the 208 UNIVERSITY OF MISSOURI, COLUMBIA NA College, a highly regarded liberal Sweet Briar, VA Columbia, MO 253 PRESBYTERIAN COLLEGE C and higher education is that you find professors didn’t like his no-nonsense 209 UNIVERSITY OF ARKANSAS NA DECEPTION arts school outside Los Angeles, Clinton, SC Fayetteville, AR 254 SPELMAN COLLEGE A numerous instances where the same approach to management and in a 35- 210 KNOX COLLEGE C developed a novel way to meet Atlanta, GA Galesburg, IL Some colleges will do 255 MONTANA STATE UNIVERSITY, people make the same budgeting and page document described him as being 211 UNIVERSITY OF ARIZONA NA the school president’s demands to BOZEMAN NA “dismissive and disrespectful”. What really Tucson, AZ anything to improve Bozeman, MT planning mistakes repeatedly and are 212 STEVENS INSTITUTE OF TECHNOLOGY C improve the quality of incoming 256 PACIFIC LUTHERAN UNIVERSITY C not held accountable in any way,” says upset them was that Williams deferred a Hoboken, NJ classes. He would simply lie. Tacoma, WA 213 WESTMONT COLLEGE B their ranking 257 UNIVERSITY OF KENTUCKY NA financial consultant Larry Goldstein of decision to award tenure to two professors. Santa Barbara, CA Over the next seven years, Vos Lexington, KY 214 CALVIN COLLEGE C+ 258 COLLEGE OF THE OZARKS A+ Grand Rapids, MI Point Lookout, MO Robert Galbraith / Reuters Robert Campus Strategies in Crimora, Virginia. Williams’s strategies had unanimous BY ABRAM BROWN provided falsified data—the numbers

88 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 89 FEATURES: AMERICA’S BEST COLLEGES

The Penalty Box THE TOP 300 RANK COLLEGE FINANCIAL Within the last four years these schools lied to the federal GRADE government about the quality of their student bodies 259 UNIVERSITY OF CALIFORNIA, RIVERSIDE NA Riverside, CA 260 SAINT MICHAEL’S COLLEGE C Colchester, VT 261 QUINNIPIAC UNIVERSITY B- Hamden, CT 262 GORDON COLLEGE C Wenham, MA 263 URSINUS COLLEGE B- Collegeville, PA BUCKNELL CLAREMONT EMORY IONA COLLEGE 264 SAN DIEGO STATE UNIVERSITY NA UNIVERSITY MCKENNA COLLEGE UNIVERSITY Admitted: San Diego, CA 265 UTAH STATE UNIVERSITY NA Admitted: Admitted: Admitted: August 2011 Logan, UT January 2013 January 2012 August 2012 Actions: 266 ROLLINS COLLEGE A- Actions: Actions: Actions: Suspended the Winter Park, FL 267 GOUCHER COLLEGE B+ Future data Resignation of dean Two employees provost responsible; Baltimore, MD examination will be of admission; at least ousted; periodic committee review 268 STONEHILL COLLEGE B completed by two two employees now audits of each for data reporting Easton, MA separate staffs control data, and VP department 269 CARROLL COLLEGE C- Helena, MT must sign off 270 SAINT MARY’S COLLEGE A Notre Dame, IN 271 SAINT MARY’S COLLEGE OF CALIFORNIA C Moraga, CA 272 SAN JOSE STATE UNIVERSITY NA behind our ranking of Claremont McKenna San Jose, CA 273 TAYLOR UNIVERSITY B in America’s Top Colleges— Graduation Rates: Upland, IN 30% 4-year 274 MASTER’S COLLEGE & SEMINARY C to the Education Department and 60% 6-year Santa Clarita, CA IND275 CEDARVILLEIA UNIVERSITY C others, artificially increasing SAT and Total Grant Aid Cedarville, OH ACT scores and lowering the admission to Student Body: 276 HANOVER COLLEGE A $17.6 million Hanover, IN rate, providing the illusion, if not 277 RANDOLPH-MACON COLLEGE B+ Mascot: Ashland, VA the reality, that better students were MISSISSIPPI 278 UNIVERSITY OF MISSISSIPPI NA STATE ‘Bully’ the Bulldog, University, MS coming to Claremont McKenna. an AKC-registered 279 MISSISSIPPI STATE UNIVERSITY NA UNIVERSITY English Bulldog Mississippi State, MS He got away with it thanks to 280 CUNY, BARUCH COLLEGE NA UNDERGRADS Inside Mitchell New York, NY a disturbing lack of oversight; he 281 NEBRASKA WESLEYAN UNIVERSITY C+ 16,312 Memorial Library: Lincoln, NE was trusted to hand-calculate the Ulysses S Grant’s TUITION 282 UNIVERSITY OF TENNESSEE, Presidential Library KNOXVILLE NA data and submit it without review. Knoxville, TN $6,300 In-State (opened 2012), John 283 SAINT ANSELM COLLEGE B What had made this long-time employee $16,000 Out Grisham (’77) Room Manchester, NH (opened 1998) 284 EMERSON COLLEGE C+ break bad? “He felt the same pressure Boston, MA 285 MOREHOUSE COLLEGE B to deliver as any executive does,” Claremont Atlanta, GA McKenna spokesman Max Benavidez 286 SAINT JOHN’S UNIVERSITY C- Queens, NY says. (Vos, who resigned in January 2012, for admitted students rather than 287 COE COLLEGE C Cedar Rapids, IA couldn’t be reached for comment.) enrolled ones for more than a decade; 288 CORNELL COLLEGE C Mount Vernon, IA Just as an analyst’s upgrade can and Iona College lied about acceptance and 289 CALIFORNIA LUTHERAN UNIVERSITY C spark a rally in a specific stock, a graduation rates, SAT scores and alumni Thousand oaks, CA 290 UNIVERSITY OF SCRANTON C+ college’s move up the rankings usually giving for nine years starting in 2002. Scranton, PA 291 COLORADO STATE UNIVERSITY NA results in a financial windfall. All have since fessed up and claim Fort Collins, CO 292 SAINT NORBERT COLLEGE B “There’s institutional pressure to have instituted better practices. As De Pere, WI 293 CALIFORNIA MARITIME ACADEMY NA at colleges to achieve at all levels, a penalty for their dishonesty—and an Vallejo, CA 294 BRYANT UNIVERSITY B and that includes rankings,” says acknowledgment of the growing scope Smithfield, RI Troy Onink, a college planning of the problem—we are removing the 295 LUTHER COLLEGE B- Decorah, IA expert and Forbes contributor, “It’s a four institutions from our list of the 296 BELOIT COLLEGE B Beloit, WI hypercompetitive world for the best country’s best schools for two years. 297 ST JOSEPH’S COLLEGE C+ Brooklyn, NY students and for that tuition revenue.” Are there other cheaters out there? 298 LOYOLA UNIVERSITY CHICAGO B- Chicago, IL Claremont McKenna isn’t the only If there are, they also will be taken off 299 WHITTIER COLLEGE C- Whittier, CA top college that lied. Bucknell University the list. Stay tuned. We will be watching. 300 SUNY, BUFFALO (UNIVERSITY AT BUFFALO) NA doctored SAT results from 2006 to 2012; Buffalo, NY NA: No grade for public colleges or those with under 500 enrolment.

Bottom: Getty ImaGes Bottom: Emory University provided numbers See Methodology, Behind the Grades, page 85.

90 | FORBES INDIA | AUGUST 23, 2013 Thoughts Life P/116 INDEPENDENCE DAY SPECIAL

this section of the magazine is, consciously, the dessert that comes after the amuse- bouche of the Upfront INDsectionIA and the solid main course of the Features section. To mark our 67th Independence Day, we thought we’d break the pattern just a little. We look at a number of essential personal freedoms and civil liberties and ask where we stand as a free and democratic country. We go beyond where the laws of our land stand, to also refl ect on the way they are implemented, and the way our society treats these important freedoms. We couldn’t fi t it all into this issue, so please look for more online in the Life section of forbesindia.com Peter Griffi n INDEPENDENCE Life DAY SPECIAL

FREEDOM OF EXPRESSION / / Singh’s biography of Jinnah (both bans by the Modi administration). But let not that lull The Intolerant Indian you into thinking that the Instead of nurturing the spirit of debate, we have Congress champions free become aggressive, bigoted and abusive speech. That party earned for India the dubious honour of becoming the fi rst country to take action against Salman Rushdie’s 1988 novel, The SALIL TRIPATHI By Satanic Verses; a Congress government banned its import, and a quarter century later, another pleaded n 1999, the BJP-led National Democratic Alliance Mitra, who has a PhD from Oxford, expressed his regrets, helplessness when Rushdie honoured the scholar, economist, and philosopher particularly after the intellectual class turned against him. INDIA could not attend the Jaipur Amartya Sen with India’s highest honour, the From Mitra’s perspective, once you are honoured Literature Festival after I Bharat Ratna, a year after his Nobel Prize. One by the state, you cannot question its politics. The a fi ctitious death threat of Sen’s more interesting books is The Argumentative intolerance that lies at the heart of Mitra’s intervention surfaced against him. Indian (2006), celebrating our propensity to challenge is actually as much of a fundamental Indian trait as Congress governments have views we disagree with. Indians argue with one another, is our argumentativeness. And it is depressing. banned books by Aubrey C he says, and from those dynamic encounters new ideas Online anonymity allows many to take potshots at Menen and Stanley Wolpert synthesising diff erent viewpoints emerge, making unity people whose views they disagree with. I happen to agree in the past, and the English in diversity possible in this complicated nation. with Sen on his view regarding Modi, and as a result I’ve translation of a Spanish novel In July this year, in response to a question from a received occasionally creative and amusing, but often about Sonia Gandhi has not journalist, Sen said he would not support Narendra annoying, abusive and personal insults on Twitter. I don’t been imported into India, Modi, Gujarat’s chief minister, to be India’s Prime block them—that would give them the standing they don’t because its publishers fear Minister; he believes Modi fails the secularism deserve—but I use fresh ones to embellish my Twitter bio legal trouble. In late July, the test, which he sees as a necessary precondition (@saliltripathi), because their invective reveals more about Congress’s students’ wing to govern a country as diverse as India. their poor upbringing, and the kind of company they keep, forced a Mumbai restaurant Insults came thick and fast from some of Modi’s than it says anything about me. But other journalists have called Aditi to close, because supporters, some saying Sen had no right to express views felt off ended: I understand withdrew at the bottom of each bill the on Indian politics (he remains an Indian citizen, although briefl y from Twitter, and Sagarika Ghose wrote an op- restaurant manager printed he has spent the bulk of his life abroad). Photographs ed criticising those she felt had insulted her. There is a message, condemning a emerged on the internet of a partly-clad young woman, a point to Ghose’s complaint: There is defi nitely some new tax. The restaurant re- purportedly Sen’s daughter Nandana, an actress. Sen was misogyny involved in such insults, but that is a broader opened after the off ending admonished to control his daughter before telling India problem with the internet, where anonymity emboldens lines were removed from who should govern the country. The photograph went uncivil men to make the kind of remarks they would future bills. Kapil Sibal, viral, appearing on websites supporting the BJP. The BJP not make had their identities been known. (But being become the land of jiski lathi, uski bhains (the one who Minister for Information and Technology, produces distanced itself somewhat from the rude is not the monopoly of men.) owns the stick, owns the buff alo). We drive the opponent laughable lists of websites that he’d like banned, because insults, but one of its parliamentarians, We like an argument, provided we away by shouting louder and vitiating the atmosphere. they blaspheme religions or insult political leaders. Chandan Mitra (who edits the Anyone who get the last word and we are winning. This aff ects every sphere. Take politics: The Hindu The Left does little better. In 2003, a Communist newspaper The Pioneer) said on Twitter: feels offended But those who challenge or question nationalist right has many scalps to its credit, such as government in West Bengal banned Dwikhandito “Next NDA Government must strip him can complain us: Well, they shouldn’t be allowed to. hounding the painter MF Husain out of India, to die (Split in Two), Taslima Nasreen’s memoir, because of of Bharat Ratna.” Sen agreed to return Not argumentative then, but aggressive, abroad in exile; marching against the publication of the fears that it might stoke religious violence. And it isn’t the honour if Atal Bihari Vajpayee, to restrict the assertive, intolerant, abusive. Instead works of BR Ambedkar, who drafted India’s constitution; only about and : Christian activists under whose tenure Sen was honoured, offender’s right of vaad-vivaad or tark-vitark, the spirit attacking art galleries; and banning books, most recently destroyed copies of The Da Vinci Code in a bookstore were to demand its return. A day later, to express of debate based on reason, India has Joseph Lelyveld’s biography of Gandhi, and Jaswant in Kolkata, and seven states initially banned the fi lm.

92 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 93 INDEPENDENCE Life DAY SPECIAL

The sad reality is that Indians don’t appear case the overzealous police were disciplined. to mind such restrictions. The bogey of Otherwise, state hypersensitivity remains potential violence is so successful, most the norm. Quis custodiet ipsos custodes? people think the government is right The moment someone claims in acquiescing with those who claim off ence, the State forces the one who they are off ended instead of protecting speaks to swallow her words. Adults those who wish to speak freely. are suddenly seen as vulnerable infants The law backs them. Even though and the State becomes the nanny. the Constitution’s Article 19(1)(a) grants And earlier this month in Chennai, a all citizens the right to “freedom of speech and text message purportedly from the city’s expression”, it also places “reasonable restrictions” police to the University of Madras on that right, and those restrictions are a grab-bag of said it should cancel a planned concerns, including the interests of the sovereignty lecture by Amina Wadud, an and integrity of India, the security of the State, American scholar of Islam, friendly relations with foreign states, public order, because of fear of violence. But decency or morality, or in relation to contempt of the police said they weren’t aware court, defamation, or incitement to an off ence. of such a message. Who sent it? This is an absurdly long list; as Behram Contractor, This is similar to what happened the gifted columnist who also wrote under the pseudonym in Kolkata earlier this year, when Rushdie was invited, Busybee, said about the Emergency of 1975-77, the but the city’s policeIND played a dubiousIA role by informing only safe topics left were cricket and mangoes. Muslim groups of his likely presence, and then warning Today, anyone who feels off ended can complain to the organisers that they should think again about inviting restrict the off ender’s right to express herself under him, shirking their obligation to protect free speech. Note Section 153(A), saying that the speaker is “promoting the pattern: The authority engineers a situation where enmity between diff erent groups on grounds of religion, it doesn’t have to formally ban anything; expecting the race, place of birth, residence, language, etc”, and doing organisers to use their good sense and call off the event. acts prejudicial to maintain harmony. And the state This creates a culture of fear, not a mind without has made it a criminal off ence to “outrage religious fear. It forces obedience and compliance; it does not feelings” with malicious intent under Section 295(A). spur imagination, nor nurture a spirit of inquiry. Some perspective here: That code was drawn up in It breeds a culture of conformity, not creativity. 1860, soon after the 1857 War of Independence, after And so we learn to argue only within our minds, which the British Government took over India’s governance confi de with a few, keeping our head down. from the East India Company. Laws meant to control In an Irani restaurant, as showed “subjects” are now being used to disempower citizens. us in his poems, and Rushdie in his fi ction, the surly Sections 295(A) and 153(A)—and now Section 66(A) owner would place a list of taboo topics his of the Information Technology Act, under which someone patrons are banned from discussing: No religion, giving off ence through an email or through any online no politics. The owner’s father’s portrait growls activity can be jailed for up to three years—have provided at you as you quietly dunk your bun maska in busybodies of all hues the chance to claim off ence and cutting chai, uncertain if it is safe to talk. seek curbs on writers, artistes, actors, fi lm-makers, I had always thought that if you didn’t like a fi lm, and others they don’t agree with. you told others how bad it was; if you Remember the professor who sent didn’t like an artist, you didn’t go to cartoons critical of West Bengal Chief And so we learn his exhibition; if you didn’t like a book, Minister Mamata Banerjee? Or the to argue only you didn’t buy it. Better, you wrote young woman who clicked ‘Like’ on within our minds, your own, arguing with it. Instead, we Facebook when her friend criticised ban fi lms, exile artists, burn books. the enforced bandh that followed confide with a At such times, the heaven of freedom Bal Thackeray’s death? Arrests were few, keeping our in which Rabindranath Tagore wanted prompt. At least in the Maharashtra head down this country to awake, seems very far.

94 | FORBES INDIA | AUGUST 23, 2013 INDEPENDENCE Life DAY SPECIAL

FREEDOM TO BE A CHILD / / is not good enough for our children. In that world outside, in India, more than 17 million children work an average of 21 hours a week, according All Work and No Play to recent CRY statistics. Despite a complete ban on child labour—including as domestics—extreme poverty From park swings to medical seats, the competition to outsmart others edges children into minimum-wage employment. A and squeeze through the system starts early Delhi Police advertisement (retracted after extreme criticism), featuring a young boy and exhorting the public to ‘help him learn to chop an onion, before he learns to chop a head’, is only indicative of a general insensitivity towards poor children. GENESIA ALVES By But for a small percentage, within the reach of NGOs, childhood may actually be better than their f child rights and welfare are established barometers million children (mostly girls) still do not go to school, parents’. The Angel Express Foundation in Mumbai, of societal evolution and economic progress, India an unspecifi ed number drop out and assessments for instance, connects affl uent, educated adults fl ounders in the doldrums. Sure, we have the Right indicate that learning and literacy are far below par. with underprivileged school children: Encouraging, Ito Education (RTE), the mid-day meal schemes, the You’d hope it’s better in private schools but even here, tutoring and bribing themIND (with treats, toys, food) to IA ban on gender-selection, policies to stop child traffi cking ‘getting in’ becomes about ‘gaming the system’. “Marks are stay in school. “The children I work with seem far and child labour. But we also have the largest population a proxy for merit, though it is possible to acquire [marks] more happy and carefree [than children of a more of children and the highest child-mortality rates. without real understanding or the tools for analysing privileged background]. The pressure and stresses Amongst 400 million children, the competition anything outside prescribed textbooks,” Sengupta says. “The of performance, of doing too many things, is missing starts early. After having my second baby, I was single point focus on exams uses stress as a tool to motivate: from their lives,” says AEF founder Anubha Sharma. ousted from my private recovery room for someone ‘A goal. OMG, how do I get there—hyperventilate—focus— The Foundation for Mother and Child Health with more ‘infl uence’. And it continues. From park breathe…’ No time to explore, discover, follow interests…” (FMCH) runs nutrition and support programmes swings to medical ‘seats’, the scrum is daunting. So far as play is concerned, most of us were lucky and a clinic, also in Mumbai. Executive Director My (admittedly contemplative) 12-year-old believes enough to grow up in benevolent neglect, left mostly to Piyasree Mukherjee says there is no room for the kind her most important right is to ‘education’. Her our own devices within close-knit neighbourhoods. Such of clucking and fussing more privileged parents are generation, being squeezed through the meat-grinder unstructured freedom now belongs to nostalgia. There prone to but “safety, food and education are given of the system, realises no childhood can be ‘carefree’ if is more traffi c, fewer children without ‘schedules’. The high importance”. Left to their own devices, the children among children in areas of confl ict, we are committed you worry about sustaining a productive adulthood. casual groping or cat-calling that occasionally punctured play outdoors, while “the older ones often play at a local to helping all children reach their highest potential.” “India has known for a long, long time that there my childhood idyll seems less noxious against the current video parlour. The biggest entertainer of course, is TV”. Sharma sees changing attitudes fi rst hand. will be so many children to educate,” says writer stories of faceless, possibly malevolent strangers. I want my At nonprofi t educational media organisation Sesame “There are families where the kids are treated quite and education consultant Meeta Sengupta. Even if, daughters to be protected from that sort of distress. So we Workshop India, MD Sashwati Banerjee consciously harshly,” she says, but also “families that create as MHRD data suggests, there are enough seats for organise playdates. We escort the children everywhere. adheres to self-imposed guidelines: “Sodas, junk foods a safe environment for their children, treat them every child in India, “the fact is India does not have Giving my children the freedom to remain children are not allowed, neither are promotions of violence or with love. The children, in turn, reciprocate.” enough good quality schools to meet the legitimate longer means stunting their independence. discrimination [like fairness creams]. We have succeeded Freedom for a child is best defi ned as the aspirations of children and their parents”. for over 40 years in keeping Sesame Street a safe place for acknowledgement of his or her potential and the ability For those on the economic fringes, the struggle usually MONEY CHANGES CHILDHOODS children, and we don’t see it changing any time soon.” to achieve it. The guarantee of security best enables the results in gender-biased choices: Their boys attend Unlike their poorer or rural contemporaries, most necessary childhood freedoms: To learn, play and grow better, often English-medium schools; the daughters’ urban children of a certain socio-economic bracket are THE BAD NEWS, THE GOOD NEWS gradually to shoulder adult responsibilities. Amongst aspirations are reduced to what can growing into a world where families With a determined optimism, this may be the beginning parents and those dedicated to children, you can see the be achieved in the local vernacular. are shrinking, incomes rising and of A Good Time To Be A Child In India. In urban eff orts to provide a dome of security, against daunting Three years in, the RTE initiative Giving my kids juniors are regarded as very infl uential areas, for children with learning disabilities and other odds, where a child can enjoy the freedom of childhood. struggles with basic infrastructure the freedom to consumers. Some of this conspicuous developmental issues, there are more avenues for diagnosis The odds include a government that is overwhelmed, issues like building classrooms, remain children consumption comes packaged as and support. Every day, the discussion on children’s rights, at best, by the logistics of tackling the basic needs teacher-student ratios and the recently ‘educational’ accoutrements. Pre-teens the rights of girls, gains more traction, more facets and of its most vulnerable population and, at worst, by a blighted mid-day meal programmes. longer means with smartTech are ubiquitous. It more column inches. Banerjee says, “Whether providing lack of political will and funds misappropriation. Despite increased budgets and a stunting their connects them to the outside world, their access to preschool education where little exists, tackling It is a cliché, but it will take a village—a touted boost in enrolment, about 8 independence parents reason, because the world outside childhood obesity, fostering respect and understanding village the span of this country.

96 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 97 INDEPENDENCE Life DAY SPECIAL

/ FREEDOM TO LOVE/ The Family Way India might fi nd it easier to tolerate same-sex marriage because at least it’s marriage

By SANDIP ROY

hen my friend Aditya Advani came a man who lived alone wanted a kitchen. out to his mother in the early ’90s, she India might actually fi nd it easier to adjust to being suggested they run a matrimonial ad in a society that tolerates same-sex marriage because at W the to fi nd him a good least it’s marriage. We understand marriage because INDIA husband. In 1993, when he took his partner Michael Tarr it’s in our cultural DNA. It feeds into the Great Indian home to New Delhi from California, Aditya resisted going Preoccupation—seeing the children settled. to a family . “No one is ever going to come to In the West, the LGBT rights movement has pretty my wedding,” he complained. His mother thought for a much morphed into the marriage equality movement. moment and said, “Why not? We could have a ceremony At the Pride Parade in Manhattan this year I watched for you and Michael.” The family’s swamiji dedicated it couple after couple walk past bearing their marital status to Ayyappa or Hariharaputra, son of the union between like a fl ag of honour. One read “Just Married”. Another two male gods, Lord Vishnu and Lord Shiva. “I couldn’t was the fi rst couple to have been married in New York believe my luck,” Aditya remembers. “Openly gay and state. Marriage. Children. Pets. I almost expected the married in my parents’ drawing room at the age of thirty. dancing boys on the Wells Fargo Bank fl oat to start Right on schedule as a good Indian boy should be.” handing out mortgage applications for same-sex couples. Recently Aditya and Michael moved to New Delhi to In India, the movement has until now focussed on raise their new twins. When friends wonder what that’s the repeal of Section 377, the anti unnatural sex law, like, Aditya says it’s been great. India is such a child-friendly a Victorian hangover. But just because consensual society. And the woman who comes to clean the house is sex between adults is decriminalised it does not mean for LGBT South Asians in San Francisco, a representative had a daughter with a close college friend in Texas, perfectly happy not to have to deal with a memsahib. homosexuality has been legalised. Legalisation comes from the Humsafar Trust in Mumbai suggested the and he and his husband also have a son where he is the Heterosexuality might be the default normal in India, with actual rights and that will be the next real frontier. Special Marriage Act in India, meant for across biological father while the surrogate was the lesbian but marriage (and children) is even more so. When I tried The big question hanging over the yet-to-come Supreme religions, could be amended to include same-sex marriage. mother of his husband’s two children in Minneapolis. to get a modular kitchen designed for my apartment in Court ruling on Section 377 is not whether it will re- The Special Marriage Act and the Hindu Marriage The audience, mostly Indian, burst out laughing but Kolkata, the kitchen consultant told me, “Just come back criminalise sodomy as much as whether the court will try Act, both framed almost 60 years ago, are fortuitously Solomon was really saying something quite profound. Our any time with madam to approve the kitchen design.” and close the door on rights. The right to marriage is not gender-neutral already. The framers of those acts were families take shapes that we could not have imagined, I explained patiently that there was no madam just about organising the Big Fat Indian Gay Wedding. It probably not thinking about our ancient traditions where, especially growing up in a society where we had thought around and that I would be approving my own modular comes with far more practical and prosaic considerations as mythologist Devdutt Pattanaik’s work has shown, gender it was not possible to be true to one’s gay identity and be a kitchen, cabinet colours and all. He such as property, insurance, bank is a spectrum and kings get pregnant and women turn into parent at the same time. That is not true anymore. And laws nodded and said, “But we can wait a loans, surrogacy—opportunities that men and Hariharaputra is the son of Hari (Vishnu) and are changing all over the world to keep up with the ways we few days, if needed, for madam.” Legalisation of are often closed off to two men or Hara (Shiva).The fact that our lawmakers left a gender are re-jiggering the notion of what it means to have a family. When it fi nally dawned on him homosexuality women unrelated to each other. loophole is really an amusing oversight, not foresight. That change will come to India too eventually. that there really was no madam comes with The greatest individual freedom But let’s not look a gift loophole in the mouth. At the It’s true that just having laws that happen to be at all, he was shocked. I don’t would be a society where these rights Jaipur Literature Festival earlier this year American same-sex-marriage-ready isn’t the same as having know what threw him more—that actual rights and and opportunities were not tied to author Andrew Solomon was asked about his family. a society that’s ready for same-sex marriage. a man might approve a kitchen that will be the marriage. But that’s a pipe dream. So at He explained that his husband was the father of two But, as an activist friend says, just put it down to good design, or that I lived alone or that next real frontier DesiQ, a recent international conference children with lesbian friends in Minneapolis, he himself karma. And don’t mess with it.

98 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 99 INDEPENDENCE Life DAY SPECIAL

/ FREEDOM FROM GENDER/ Imagining Equality Laws in India straitjacket men and women into strict gender roles

By NILANJANA S ROY

he idea that we are equal stops at the ground and regions—not inherit family property. beneath our feet. The soil of India, the land of The defi nition of an Indian man is simpler: A Bharat, is owned chiefl y by men. According man is someone who can own and inherit land. T to the Food and Agricultural Organization Men have property; women, mostly, do not. of the UN (FAO), women account for only 9.5 percent In 2003, when , the great scholar of land of land-holders. Their fi gures drew on the agricultural rights and gender, interviewed a group of rural women, census of 2000 and 2001, which found just 12 million she asked them whetherIND they might wantIA the land they women owned land, out of 120 million landholders. farmed or looked after registered in their names. Silence fell, Think of this another way: Out of all the factors that and then one woman explained: “We are taking so long in dictate whether you will own your own home—caste, class, answering because no one had ever asked us this before! It economic status—the most signifi cant is something you seems like a dream that we might have land of our own.” have little control over. If you’re born a man in India, you For years, a worn internet meme suggested that automatically have a chance in the land-owning lottery. If women own only 1 percent of the world’s land; the you’re born a woman in India, what are the chances that you FAO fi gures are more realistic, indicating that women will own your own home, inherit property, kneel down on own perhaps one-quarter of the world’s land. In Italy, a patch of earth and think, as you let a handful of dust slip women own 31.9 percent of the land; in Thailand, 33 through your fi ngers, that this is your land? Brutally low. percent; in the United Kingdom, only an estimated 19 Think of the numbers I just cited. Those millions—the percent. If, as Nick Kristof has written, women hold lonely, tiny fi gure of 12 million on one side, the large, up half the sky, it is still hard to imagine what the dominant group of 120 million on the other—are not world would be like if women owned half the earth. abstractions. They represent real people, actual families; Property is important; those who do not own property those fi gures contain our histories as Indians, the history can become property themselves. In some parts of India, of families who were anxious to marry women into women don’t even own their names: Tradition demands landed families, so that they would have something that they change not just their surnames after marriage, by extension, families who saw women as burdens, but their fi rst names as well, as if to underline that their because they had nothing by defi nition. If we’re talking old selves must be packed away and forgotten. And many equality, and freedoms, this is where we start: With the laws, especially those handed down by the British, hark absence of equality, built into the back to a time when a women’s chastity foundation stones of a society. was her husband’s property. The laws on The defi nition of an Indian It was not that adultery make this explicit: It is a crime woman, extrapolating from these women required committed by one man against a husband, fi gures: An Indian woman does protection, they in respect of his wife, and those laws are not own her own home, will there solely to punish men who would probably not buy and own land in required dignity, tamper with another man’s property. her lifetime, will almost certainly— respect and Most of the laws in India slam men and except for a very few communities equal space women back into strict gender roles: To

100 | FORBES INDIA | AUGUST 23, 2013 be a man is to be the head of the family, the keeper of its property; to be a woman is to be, at best, protected, but almost always paternalistically. Few existing laws explicitly protect the rights of, say, the transgendered community or the gay and lesbian community—the laws do not have much room for gender ambiguity. In the aftermath of the December protests against rape and the everyday violence women face in India, many women demanded that marital rape be made a crime. “The entire family system will be under great stress,” argued legislators, and Parliament refused to make it a crime. In many ways, what they were refusing to uphold was the idea that women’s bodies belong to themselves, an idea that is the subject of major debates in the US (over abortion), in Egypt, as women claim public space, and in India, as women try to move beyond the usual norms that would keep them “safely” at home. The system in India has always set the cost for being a woman: The price your family INDIA has to pay before another family will take you in. Against this, we had the recommendations of the Justice Verma Committee report. Asked to frame laws that would protect women against rape and harassment, they pointed out that it would take much more than laws and bills to bring about equality. It was not that women required protection, the Committee members wrote; they required dignity, and respect, and most of all, equal space in all spheres of Indian life that the Constitution had promised us. Over the months, women or feminine men, and all the glorious shades of even as the patriarchy howled back, we saw enough gender ambiguity in between, gender is not an absolute so men stand up for women’s rights, men who stood up much as it is a spectrum, a rainbow coalition. In its poetry, because they wanted, in essence, a more equal world. in its most ancient myths, in its oldest stories, Indians have What the Verma Committee suggested women in always acknowledged the fl uidity of gender; it is only in our India needed was not sops or handouts, or the stifl ing laws that we stick with the binaries of men and women. gag of paternalistic protection. Instead, they wrote, Some years ago, the feminist Gloria Steinem suggested women must have the ability “to insist on total equality that the task before us was to imagine equality. That is hard in relationships, both with society and the state”. to do, but it is also beguiling: An India where women owned Many missed that part of the report, because as with half the land might also be a country where women walked land rights, we are not conditioned to imagine equality. and danced and loitered as freely on its streets as the men Growing up in an unequal world, a deeply riven and unequal now do. An India where we saw gender as any one of several country, it is sometimes hard to imagine what freedom hues in the rainbow, rather than sticking with the rigid for women would mean. One way to try to imagine this divisions of men (the owners) versus women (the owned), freedom is to move away from the restricting straitjacket would not just be a healthier country. It would also be one that pits men against women, so that the gain of one’s rights that was true to its own roots, its own history, repeated is always weighed against the loss of the other’s powers. from to the North-East of having many diff erent Instead, think of how gender functions in the real world: ways of imagining how families might live, and of how men From gays and lesbians, to transgenders, to masculine and women might be friends—even, fi nally, equals.

AUGUST 23, 2013 | FORBES INDIA | 101 INDEPENDENCE Life DAY SPECIAL

/ FREEDOM FROM AGEISM/ are free to work for as long as they wish to. (There are exceptions for industries in which strict physical fi tness levels are necessary.) In India, however, retirement has been a The Silver Ceiling government tool to ensure employment for If the image of youth has changed rapidly in the recent past, the young. So, government employees must retire at 60, while private ones largely do then why hasn’t the image of our seniors? so. This also ensures that while judges must retire, lawyers need not, and while bureaucrats retire, lawmakers—unsuprisingly—do not: 40- and 50-year-olds are considered young in By JASODHARA BANERJEE politics, and parliamentarians in their 70s and 80s are more the norm than the exception. ome years ago, I found myself scrambling for manager, Indians are not comfortable being served food In 2011, the department of personnel scholarships to pursue a master’s degree. At the at restaurants, especially posh ones, by someone who and training decided to keep the retirement age of 26, I realised that I was not eligible for is grey-haired. “It is alright if the chef is grey haired, age of government offi cials to 60, and not S most of them. I was too old. I also learnt that 26 the customer can’t see that,” he said. We also fi nd it INDIAincrease it to 62. A member of the Central was also too old to take up studying for a bachelor’s degree uncomfortable to have subordinates older than us: “An government association had told the media: in engineering, law or medicine in our country. But when I MD who is 45 would not want a manager who is 50. “The government is justifi ed in not increasing did start a master’s course in the UK, I found in my class a He feels uncomfortable,” the HR manager added. the age as it will aff ect youngsters.” man in his late 30s. “I am a mature student,” he had said. “I Those who are older—and have families and But what of the fact that retirement from was not in a position to study when most youngsters do.” responsibilities apart from the job—are reluctant to an active working life aff ects the mental and The words ‘mature’ and ‘student’ do not go together in relocate, travel for ‘20 days a month’, and have ‘higher fi nancial health of seniors? Gallup’s annual India: If you are one, you cannot possibly be the other. expectations’ from the company (read salary, leave). Economy and Personal Finance Survey of 2013 I had not asked my classmate what his circumstances In short, said another HR manager, young employees has found that Americans between 60 and 69 were. But it reminded me of the innumerable people are better suited for roles that require interaction with years of age who work have better emotional in India who are in similar situations—or perhaps not, clients, and erratic and hectic work schedules, while older health than those who do not, and that but simply want to study at an older age—and have no employees are better for consulting and training positions. fi nancial concerns are a prime reason for the opportunity to do so. It brought back to mind my search for The manager also insisted that the age of an applicant rise in the average retirement age. The survey scholarships, and my growing indignation at being turned for any job position is a critical factor: “Even if it is not found that the average non-retired American away because of my age. Exactly why should someone’s age mentioned in the CV, I will calculate it from the other expects to retire at age 66, up from 60 in 1995 have anything to do with the desire to gain knowledge? details. And if not, then I will directly ask the person’s of people in the 46-55 age group, and with work (37 percent said they expect to retire after 66; the number If a person, of any age, wants to become, say, a doctor and age.” That asking a job applicant’s age is illegal in the experience of 26 to 30 years. Defi nitely no brat pack. was 22 percent a decade ago, and 15 percent in 1995). The begin a career much later than most others do, why should US and the UK holds little signifi cance in India. We like to say we are a young country; we like to play percentage of non-retirees who expect to retire before anyone thwart that desire? Especially the government? The average age of employees in a company is also the ‘demographic dividend’ card when everything else the age of 65 has declined from 49 in 1995 to 26 in 2013. By most measures, I am part of India’s famed determined, to some extent, by the age of the industry fails. Statistics do hold up the claim: 50 percent of our Gallup attributes this to “changing norms about the value ‘demographic dividend’: I fall between the 18 to 35 (or 20 itself. So, IT (Infosys an exception) and telecom have population is less than 25 years old; 65 percent is less than of work, the composition of the workforce, the decrease in to 45, or similar variations) age group that is the darling younger people at the helm, while manufacturing, banking 35; we are younger than China, Brazil, Russia and the jobs with mandatory retirement ages and other factors”. of marketers and advertisers, researchers and economists, and FMCG have older CEOs. But younger industries US. But we are also a country with severely entrenched Until the early 2000s—around the time the hype around employers and recruiters. The government is touting the have younger employees and CEOs largely because notions of what one must do at a certain age. Perhaps young India’s growth began to rise—youth were considered likes of me as the future of the nation, there is no older, more experienced the ancient Vedic philosophy of dividing life into four energetic and enthusiastic, but also inexperienced while the rest of the world is looking on talent available, not necessarily stages—Brahmacharya, Grihastha, Vanaprastha and and impulsive, while greying hair was associated with with a mix of growing concern and envy. That asking a job because they prefer younger people. Sanyas—has something to do with it, or perhaps the more experience and wisdom, and also frailty. Now, older people But must my life begin and end applicant’s age is This is corroborated by the fact that recently entrenched practice of mandatory retirement. are associated with redundancy. The image of youth has while I am in that age group? illegal in the US the average age of people on Business Mandatory retirement is taken to be as much a fact evolved rapidly in the recent past. But why hasn’t the Speaking to people who are in India’s 2011 survey of India’s Highest of life as earning a livelihood. But, given the improving image of seniors evolved as well? (This is at least one the business of hiring employees for and the UK holds Paid Executives was 51. The survey (of health and circumstances of our seniors, must it remain so? sphere in which our politicians are worthy examples.) client companies brings forth some little significance executives earning more than Rs 50 lakh Mandatory retirement is unlawful in several countries—the Maybe they could start with letting me become more realities. According to one HR in our country a year) also found the largest number US, the UK, Canada, Australia and Brazil—and employees a doctor after I retire from being a journalist.

104 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 105 INDEPENDENCE DAY SPECIAL Life

/ FREEDOM FROM RELIGION/ Imagine There’s No Heaven There’s a small but growing community of those who shun religion

By DEVANGSHU DATTA

itesh stands out among the lakh or so students cramming for the Joint Entrance Exam in the coaching mills of Kota, Rajasthan. Unlike most R of his comrades, the 18-year-old isn’t praying for a high rank. He has been an atheist since he was 11 and struggling to cope with bullying in his school hostel. As he tells it, “I was physically weak and often got beaten INDIA up. I used to cry and ask God, Why does this happen to me? After the fi ftieth time or so, I wondered who the hell I was talking to. And, on that wonderful night, I became an atheist.” Ritesh is a member of a small community: Those who shun religion in an ostentatiously religious country. Disbelief in God does not necessarily exclude anybody from India’s broad religious spectrum. Buddhism and Jainism are agnostic. Hinduism had ‘Nastik’ philosophers. Many historical fi gures were also atheists. Jawarharlal Nehru, Bhagat Singh and Vinayak Damodar Savarkar, for example. Dr Bhimrao Ramji Ambedkar became a Buddhist, rejecting casteist prejudices. The Dravida Kazhagam movement was founded by EV Ramasami “Periyar”, who required his followers to renounce God. And of course, communists are atheists, by defi nition. Many modern atheists have arrived at unbelief simply who fi nd it too much trouble to claim lack of faith. Yash, a because religion didn’t make sense to them. Jude, a software developer from Mumbai, says, “I haven’t performed software engineer, quit on religion while in school, any religious ceremonies for my daughter. But the only options after running a scientifi c experiment: “I experimented on the Birth Certifi cate are Hindu, Muslim, Christian and with study a little and pray a lot, then pray a little and Other. I ticked ‘Other’ and wrote ‘None’. The nurses objected. study a lot. Then I tried similar experiments with I had to select Hindu in order to avoid a future legal mess.” other kids. It was quite clear prayer never helped.” Given the multitude of forms Indians have to fi ll up, not The Census of India doesn’t have a separate category being a recognised offi cial category has costs. It also takes time for ‘No Religion’, or ‘Atheist’, lumping them together and trouble in many other ways to be offi cially non-religious. with Bahais, animists, etc as ‘Others’. In the 2001 Census, A religious ceremony can be performed instantly and registered the ‘Others’ added up to 0.6 percent (roughly 4.5 million). later. But a civil marriage under the Special Marriage Act This is way less than the global average of 13 percent. requires a licence, a wait period, proof of residence, and other However, ‘Others’ doubled in 2001 over 1991, and may well formalities. If one wishes to donate organs—or the body to have doubled again in 2011. There are also many non-believers, science—after death, legal arrangements must be made in

AUGUST 23, 2013 | FORBES INDIA | 107 INDEPENDENCE Life DAY SPECIAL

advance. If one wishes to avoid one’s was most intolerant and I faced very assets being passed on by the default It takes time harsh reactions from her. My dad was provisions of religious personal laws, it is and trouble in more sad than angry. Strangely, once necessary to make a valid Will and register many ways to be you come out, people who previously it. After death, that Will must undergo officially seemed to be liberal now act like probate. All this costs time and money. fundamentalists. Maybe it’s because In addition to bureaucratic tangles, non-religious they’re dealing with their own doubts.” the non-religious often face emotional Nanda, from Mumbai, had problems blackmail, social pressure and even legal threats. India’s at school “because I refused to go to the ashram or archaic laws, such as Section 295(A) of the , learn verses from the Gita.” She publicly repudiated her make it a criminal offence to question religious doctrine, let religion after the horrors of the 1992-93 riots. Akhtar, alone mock faith. These laws are often used to harass people a 35-year-old from Moradabad, says he’s stopped in absurd ways. Sanal Edamaruku, a rationalist engineer, participating in social and family occasions because of the faces criminal charges for demonstrating that a cross in a inevitable heated arguments centred on his non-belief. Mumbai church was dripping water due to capillary action Marriage is a major fl ashpoint. Geetha, from Chennai, from a blocked drain, rather than through some miracle. was coerced into a temple marriage. Swati, a Banjara Not only can such laws be used to target the woman who runs her own business, says, “I refused non-religious, they have no corresponding shields to get married to a believer and did not, in fact, ever against mockery or ostracism. Quite a few have get married since I couldn’t fi nd a suitable atheist.” suff ered estrangement from their families and have Sarath, a TeluguIND Brahmin atheist,IA says he was “forced been abused by their peers. Asha, a Kashmiri Pandit, to do the Upanayanam [thread ceremony] because my says her reluctance to perform shraddh ceremonies parents want an arranged marriage. I have hopes of for her parents led to a breach with her siblings. ‘saving’ my future spouse and kids if I have an arranged Anita, from a Catholic family in Kerala, says it was a marriage, though I would prefer to marry a Freethinker.” “horrible day” when she ‘came out’ as an atheist. “My mom Nishant, a banker from Ambedkar’s community, faced peer pressure in his college hostel. “There, I was exposed to fasting, vegetarianism, hate towards other religions, Losing Their Religion religious fanboys and fangirls. I faced discrimination when I opposed religious practices, and many forceful theists have long If my conscience or judgement A demanded the inclusion doesn’t permit the acceptance attempts were made to change my thinking.” of a ‘No Religion’ category on of existence of God, or any Babu Gogineni, director, International Humanist and offi cial documents. Lawyer particular religion, I can’t Ethical Union, remembers the occasion “when I was Nikhil Mehra explains how be treated differently for it, an appeal could be fi led: provided my actions do not invited to speak to the Bar Association at Rangareddy A writ petition would have impinge on the rights of others. District Court on Scientifi c Temper. The presiding to be fi led challenging the Following from there, I have judge learnt I was an atheist and refused to preside even absence of a No Religion the right not to engage in though my subject had nothing to do with religion.” category. The grounds would certain religious practices and be freedom of conscience under similarly, I have the right not Social media has helped such scattered individuals Article 25(1) and Article 14. to belong to any religion. fi nd each other. There are multiple Facebook and The core is: I have the right to In terms of the right to Google groups and local meatspace chapters. Nirmukta, live my life as I wish as long equality (Article 14), a as I am within the ambit of standard government form for example, is a rationalist organisation that debunks the law and am not trampling ought to permit atheists to superstition and hosts debate forums. Indians without on the rights of others. not be compelled to forcibly Religion is another society that wants to become an Article 25(1) guarantees the ascribe to a particular freedom of conscience, and that religion. This amounts to a NGO fi ghting for the rights of the non-religious. must inherently encompass suppression of their right As the non-religious band together, they hope to carve the right not to profess any to freedom of conscience. out some space and recognition. As Suchi, a engineer religion. Every citizen has the In that sense, an atheist is from Chennai says, “People need to respect that you right to profess and exhibit being treated unequally since such religious belief as is his freedom of conscience is have put at least as much thought into your atheist approved of by the citizen’s not treated in state action at beliefs, as they have into their religion. Only then can judgement or conscience. par with that of a believer. there be a true separation of church and state.”

108 | FORBES INDIA | AUGUST 23, 2013 INDEPENDENCE Life DAY SPECIAL

FREEDOM TO ADOPT / / and Jains, considered Hindu for legal purposes like this one). Since I am not Hindu, that left the Guardians and Wards Act of 1890 (1890!). But under GAWA, we would be Surabhi’s They Fill Our Lives guardians, not her parents, until she turned 18. Adoption is merely normal, ordinary yet special, There are implications here for much like birth is ordinary yet special and so on: Rules for a ward are diff erent from those for a legally-acknowledged child. Two things about all this. First, Vibha is Hindu, I am agnostic. We asked our social worker, people at the orphanage and our DILIP D’SOUZA By lawyer: Can we therefore adopt under HAMA? Impossible, they said. One Hindu parent cannot hat these nine years have taught my wife national shame, the poverty that blights so many lives? qualify a couple as Hindu for HAMA’s purposes. Vibha and me is this: Adoption is not I really don’t know, and that’s a dispiritingly limiting I was even willing, for this adoption, to submit a some kind of special or unusual thing to thought. That is, except for adopting a child. If there’s one declaration that I was Hindu. Impossible, they W do. Before Surabhi came to us, I think abandoned kid whom we can raise as our own, to whom we said again. No way thatIND ‘D’Souza’ could pass IA I imagined that it would indeed be a special happening, can off er the arms of a loving family, that’s one less child who the HAMA radar. I suspect this was just the and that excited me. Yet today, in what our two children might end up on our streets. This one thing, then, I can do. interpretation of those we asked; had we pushed mean to us, there is no diff erence between Surabhi, The freedom to adopt, there for the taking. we might have proved our point and adopted whom we adopted, and Sahir, who was born to us. But we also learnt from other parents. One couple under HAMA, even without that declaration. Yet, too, the excitement is in how normal this feels. adopted two children but never told them. Came Yet that was the point: This law was an obstacle. We see our two kids running around the house, teasing adolescence, already diffi cult, and the secret blew Instead of giving everybody the freedom to and tripping over each other, quarrelling over the iPad up in their faces. Several profoundly troubled years adopt, it excluded whole swathes of Indians. and watching a fi lm together—things all kids must do. followed. No, we didn’t want that. Another couple had Second, but we did hear about a couple in Absolutely the last thought that occurs to us is that they an adopted son who knew all along, because the family Kerala that challenged GAWA’s guardianship took diff erent routes into our home, into our hearts. would celebrate two birthdays—the second being the doctrine and won a court decision in their favour. As it should be, of course. I know now, if perhaps I day he came home. In his teens, the boy suddenly With that precedent, our lawyer told us, we could didn’t fully comprehend in 2004, that I don’t and never pleaded for them to stop this dual observation. He move court to have ourselves legally pronounced want to feel diff erently about my kids because of the didn’t see it as a special day and he couldn’t bear them Surabhi’s parents before she turns 18. mere detail of how they entered our family. To me, that’s treating it that way. No, we didn’t want that either. As it turns out, neither of those has been a concern something of an epiphany, a thoroughly liberating one. What we did want was a possible tightrope. in these years. Though we still need to move court, life Before we did it, we thought a lot about adoption. I Adoption is no shame to be shoved under the carpet, with the kids is too full to ponder over the implications Vibha: “Ours! We just adopted her!” always believed one reason to do it was scenes we’re all yes, but treating it as a triumph is as irrational. We of being guardians. The only slightly odd memories, Friend (brow and nose wrinkled): “Why?” familiar with in this country we live in. You know: The boy wanted Surabhi to see it as merely normal, ordinary in all this time, are the occasional comments. Still, remarks like that have been occasional. All in all, who got turned away from a fun fair, the woman who did yet special, like birth is ordinary yet special. Now we fully expected that Surabhi would face barbs raising Surabhi and Sahir has been even more wondrous it telling me, “We don’t want his kind in here”. Watching All this was on my mind as we began the process, from kids at school. That’s already happened and I’m and fulfi lling than we imagined it would be. And only my son watching a little girl his age come to our rickshaw six months before Surabhi came to us. There was a fair sure will keep happening. Kids are curious, after all, because this article asks for it, I’m trying to sift through with that sad pecking gesture, helpless in the knowledge amount of paperwork involved, including tax returns and and untrammelled by adult notions of what is and is not experiences that we don’t much think about anyway. that in time, he will learn to live with it as I have learnt to letters of recommendation from friends and relatives. acceptable. What we can do is raise her to be assured Surabhi is part of our lives, period. Just as Sahir is. do, as all Indians have learnt to do. Also a visit from a social worker who and comfortable about her place in our family, trusting Just as their cousins and aunts and grandparents are. In some ways, I think about such spoke to Vibha and me, but separately. that this much will be her safeguard against getting hurt. And that’s just the way I want it. Sure, there are people scenes every day, and have done so Adoption is no Tedious business, but routine. This meant we had to feel confi dent and secure about our who will ask why we adopted our daughter, whereas for years. Saying this, I’m not trying to shame to be There were peculiar obstacles also. home before Surabhi arrived. What kind of relationships nobody ever asks why we gave birth to our son. make some kind of statement. This is shoved under the In 2004, there were only two Indian do we have? Are they strong and nurturing enough In an ideal world, nobody would ask either question. just something I know about myself. laws governing adoption. One was the that a new child will feel secure? In answering those, But it hardly matters, because either way our answer And it brings the hard question: carpet; treating Hindu Adoption and Maintenance Act adoption taught us something about ourselves too. is the same: “Because we wanted our child.” What can I do about these kids? it as a triumph (HAMA) of 1956. But HAMA is only So what did we not expect? The friend who saw Surabhi We wanted Sahir. We wanted Surabhi. What can I do about our greatest is irrational too available to Hindus (and , Buddhists in Vibha’s arms as a baby and asked: “Whose baby is that?” They fi ll our lives.

110 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 111 INDEPENDENCE Life DAY SPECIAL

/ FREEDOM FROM MONITORING/ October 2012, defi ned the Indian privacy principles as notice, choice and consent, collection limitation, purpose limitation, access and correction, disclosure of The Private Citizen information, security, openness and accountability. The report also lists More surveillance than absolutely necessary actually the exemptions and limitations, so undermines the security objective that privacy protections do not have a chilling eff ect on the freedom of expression and transparency enabled by the Right to Information Act. By SUNIL ABRAHAM The Department of Personnel and Training has been working on a privacy think I understand why the average Indian IT entrepreneur particularly wise thing to do, as privacy is the precondition bill for the last three years. Two versions or enterprise does not have a position on blanket for security. Ann Cavoukian, privacy commissioner of the bill had leaked before the Justice surveillance. This is because the average Indian IT of Ontario, calls it a false dichotomy. Bruce Schneier, AP Shah Committee was formed. Ienterprise’s business model depends on labour arbitrage, security technologist and writer, calls it a false zero sum INDIAThe next version of the bill, hopefully not intellectual property. And therefore they have no worries game; he goes on to say, “There is no security without implementing the recommendations of about proprietary code or unfi led patent applications being privacy. And liberty requires both security and privacy.” the Justice AP Shah Committee report, is stolen by competitors via rogue government offi cials within The reason why the secret recipe of Coca Cola is still expected in the near future. In a multi- projects such as NATGRID, UID and, now, the CMS. secret after over 120 years is the same as the reason why a stakeholder-based parallel process, the A sub-section of industry, especially the technology captured soldier cannot spill the beans on the overall war Centre for Internet and Society (where industry, will always root for blanket surveillance strategy. Corporations, like militaries, have layers and layers I work), along with FICCI and DSCI, measures. The surveillance industry has many diff erent of privacy and secrecy. The ‘need to know’ principle resists is holding seven round tables on a civil players, ranging from those selling biometric and CCTV all centralising tendencies, such as blanket surveillance. society draft of the privacy bill and the hardware to those providing solutions for big data analytics It’s important to note that targeted surveillance to identify industry-led eff orts on co-regulation. and legal interception systems. There are also more a traitor or spy within the military, or someone engaged The Indian ITES, KPO and BPO controversial players who provide spyware, especially in espionage within a corporation, is pretty much an sector should be particularly pleased those in the market for zero-day exploits. The cheerleaders essential. However, any more surveillance than absolutely with this development. As should any for the surveillance industry are techno-determinists necessary actually undermines the security objective. To other Indian enterprise that holds who believe you can solve any problem by throwing summarise, privacy is a pre-condition to the security of the personal information of EU and US enough of the latest and most expensive technology at it. individual, the enterprise, the military and the nation state. nationals. This is because the EU, after What is surprising, though, is that other indigenous Most people complaining online about projects like the enactment of the law, will consider or foreign enterprises that depend on secrecy and the Central Monitoring System seem to think that India data protection in India adequate as confi dentiality—in sectors such a banking, fi nance, health, has no privacy laws. This is completely untrue: We have and, at that, it does not even comprehensively per the requirements of its Data Protection Directive. law, ecommerce, media, consulting and communications— around 50 diff erent laws, rules and regulations that aim address data protection, which is only a sub-set of This would mean that these enterprises would not also don’t seem to have a public position on the growing to uphold privacy and confi dentiality in various domains. the overall privacy regulation required in a nation. have to spend twice the time and resources ensuring surveillance ambitions of ‘democracies’ such as India Unfortunately, most of those policies are very dated What would an ideal privacy law for India look like? For compliance with two diff erent regulatory regimes. and the United States of America. (Perhaps the only and do not suffi ciently take into account the challenges one, it would protect the rights of all persons, regardless Is the lack of enthusiasm for privacy in the Indian exceptions are a few multinational internet and software of contemporary information societies. These policy of whether they are citizens or residents. Two, it would private sector symptomatic of Indian societal values? companies that have made some show documents need to be updated and defi ne privacy principles. Three, it would establish Can we blame it on cultural relativism, best exemplifi ed of resistance and disagreement with harmonised through the enactment the offi ce of an independent and autonomous privacy by what Simon Davies calls “the Indian Train Syndrome, the blanket surveillance paradigm.) Privacy is a pre- of a new horizontal privacy law. A commissioner, who would be suffi ciently empowered in which total strangers will disclose their lives on a Is it because these businesses condition to the small minority will say that Section to investigate and take action against both government train to complete strangers”? But surely, when email are patriotic? Do they believe that security of the 43(A) of the Information Technology and private entities. Four, it would defi ne civil and addresses are exchanged at the end of that conversation, secrecy, confi dentiality and, most Act is the India privacy law. That criminal off ences, remedies and penalties. And ve,fi it they are not accompanied by passwords. Privacy is importantly, privacy, must be individual, the is not completely untrue, but is a would have an overriding eff ect on previous legislation perhaps diff erently confi gured in Indian societies but it sacrifi ced for national security? If enterpriseand gross exaggeration. Section 43(A) is that does not comply with all the privacy principles. is defi nitely not dead. Fortunately for us, calls to protect that were true then it would not be a the nation state really only a data security provision The Justice AP Shah Committee report, released in this important human right are growing every day.

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/ FREEDOM TO DRINK/ illogical rulings, and similar things in places like getting drunk, getting into fancy cars and killing people, Bangalore? It appears to be smaller, local political but they are isolated incidents. Statistics show it is not parties drumming up publicity and visibility by a problem of the young rich. Alcoholics tend to be older targeting an unpopular class of people. and from middle- to lower-middle class backgrounds. Democracy on the Rocks Their contention is that ‘young rich people’ like to We are a hypocritical country in many ways and I The government’s stance on alcohol shows how party, drink and they get addicted to alcohol; this is fear that a major part of that is because of politicians we are quickly losing our civil liberties the problem and this is our solution. When they court who speak for the entire nation. The idea that someone poorer masses, they demonise these ‘rich partygoers’, else’s religious or moral beliefs should dictate behaviour who are ‘amoral’, women who dress ‘provocatively and to me is something I am not able to wrap my head drink’. I can say that I’m an adult, I can go out and have around. I have always been extremely alarmed by anyone a drink. Although it’s legal, from a moral standpoint who claims to speak for a group of people on behalf IMRAN KHAN By it’s not a high ground. It’s not a position that you can of India. And it is always one guy who is speaking for easily defend, saying, ‘I have a right to party.’ When you the country, saying this goes against Indian culture. n September of 2011, I fi led a PIL challenging the years ago, nobody cared about alcohol permits, the rule try, the way they will counter it is: The government is It’s not about the alcohol; that is just indicative. It’s a Maharashtra government’s ruling to raise the was not enforced. Now in 2005, 2006, the Maharashtra trying to stop people from drinking and you are trying to slippery slope; you allow this to happen and god knows legal age limit for consuming alcohol from 21 to government passed a legislation raising the legal age to 25. encourage people to drink and obviously you are wrong. what else will follow. You’ll already have people in power, I 25. It was something that everyone was talking But nobody got the memo; bars, restaurants, police, media, It’s very easy to sellIND this image of irresponsible rich kids IAin offi ce, in politics, standing up in front of the nation they about at the time and for the wrong reasons. It wasn’t citizens, nobody was aware of it. In 2011, the Maharashtra are representing and openly voicing bigoted about alcohol. It was always about civil liberties. state government proposed to pass a legislation to raise views. Next, in a small town somewhere, As a person who was not specifi cally informed, I was the legal drinking age to 25. They were proposing to pass someone might pop up and say, Maybe just reading the papers at a superfi cial level. I said, this is a legislation that was already passed fi ve years ago! it’s not right for women to show anything part of the Maharashtra government’s alcohol de-addiction The police were enforcing a proposal which, as far above the knee, just to be safe. And, from a policy. The intention of alcohol de-addiction is sound— as they knew, wasn’t a law yet. They started raiding moral standpoint, they’re trying to protect alcohol is dangerous; I’ve lost friends to drunk driving and restaurants, clubs, bars; and people’s homes. There was this women. If a woman stands up to protest? had family members struggle with alcohol addiction—but really hilarious story. There was a sweet little old lady who You want to show your skin? You’re a slut! the method that they were choosing was incorrect. What used to make chocolates. These guys stormed in, literally The point is that the position that you’re they were doing is taking away people’s right to choose. kicked the door down like jack-booted warriors, and took defending is not sympathetic but it is correct. The parallel that I was drawing, just as an ordinary her to jail for making chocolates with rum fondants! It is a civil liberty, it is a right in a democracy. citizen, was this: If I choose to start protecting women Law and order in India is a very loose phrase, People forget that in a democracy, you from being raped—which is a huge problem we have—I a fl uid concept. Sure, we must look at it from the have to take the bad with the good cannot tell women how to dress in order to protect other side—our cops are woefully underequipped, and government has to be “of the them. My intention may be correct. But we need to undertrained, underpaid, using bamboo shields and people, by the people, for the people”. make things safer for women, not tell them to cover up. World War II era rifl es; what’s in it for them?—but All we have is government of the If we have a population problem, we cannot tell our this is a police-state acting beyond its authority. people. It is neither by nor for. citizens how many children to have or start sterilising Essentially, they were putting forth legislation to We are looking at gross civil liberties people, no matter how good the end result may be. bring back prohibition. Historically, that has never violations in this country, liberties which are In a democracy, if you feel that alcohol is bad, in worked. Prohibition leads to an increase in risky alcohol being taken away at an alarming rate. Our the way that drugs like heroin and cocaine are bad, consumption; instead of sitting down casually and having a bureaucracy, politicians and people in power then ban it. But when you allow alcohol—and tax it beer, you sneak into a back alley, buy a quart of rum, knock have reached comic-book levels of villainy. heavily—and then say, You’re 18, you can marry, have it back and run home. That is risky drinking behaviour They’re literally moustache twirling would- children, enter a legal contract, go to war to protect your and does not lead to a decrease in alcohol consumption. be rapists. They are trying to slide in and say, country, be sentenced to death for a crime, but you can’t Instead you create a new class of criminals, bootleggers, How much leeway will these people give us? handle a drink, then it’s ludicrous. and they—and their customers—will What if I take away their right to this? To that? In Maharashtra, we are living If alcohol is bad, now be tempted to slip the police a How villainous can I be before they actually under the Bombay Prohibition Act in the way that bribe if they are caught. What have we strike back? It’s come to a point where you of 1949, which was never repealed. achieved? We’ve lost revenue, increased ask, ‘Are you really this evil?’ I think we are The loophole is the alcohol permit drugs like heroin risky drinking behaviour, increased fi ve to 10 years away from a Turkey-style (which states that you’re an alcoholic and cocaine are corruption and increased criminality. rebellion with bloodshed on the streets. and need alcohol to survive). Ten bad, ban it So what led to all these outdated, As told to Peter Griffi n and Shravan Bhat

114 | FORBES INDIA | AUGUST 23, 2013 AUGUST 23, 2013 | FORBES INDIA | 115 Bill Owens it somuch. fear despots why That’s contagious. is Freedom Thoreau David Henry law free. the make to have menthat is it menfree, make never lawwill The William Faulkner it. we practise butbecause freedom, weclaim because not We free be must Peter Marshall right. is to dowhat opportunity the but as weplease, todoas right the not as freedom, of wethink May Albert Camus better. to be a chance but nothing is Freedom Elbert Hubbard of freedom. price the is Responsibility Mahatma Gandhi toerr. freedom connote not it does if having notworth is Freedom Life 116 | FORBESINDIAAUGUST 23, 2013 Thoughts On Freedom

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