Turning the GDP (Gross Disappointing Product) tide!

Many years ago on my visit to China, I found most of the newspapers there giving a lot of attention in their front pages to decline in GDP, tapering of FDI into China and other such economic issues. In a blog post that visit, I rued that in India, our media doesn’t still focus on economic Roti, Rozgaar issues but spend disproportionate amount of columns on mundane political news and views. For the past few months, it has been good to see in India too, the media at last waking up to the slow down blues in the economy.  For more than a year or so, the entire country was pre-occupied with the Modi re-election issue and everything else did not matter.

Since the re-election of Narendra Modi and his government that too with a majority better than last time, the euphoria and the resultant expectations have been very high.  However, the party has been cut short by the bad news coming in on the economic front, day in and day out. There was a great opportunity for this Government with a new face as the Finance minister to have seized the opportunity when she presented the Union budget on the 5th of July and fire the economy. The budget was a decent one but one that was devoid of Out of box, bold ideas which would set the economy on fire. In doing away with the brown brief case and opting for the bahi kaatha, Nirmala Sitharaman’s budget was a ritual breaker but, was not a path breaker! Hence, ever since the budget, there has been quite a few negative reactions as manifested in the tanking of the markets, depreciation of the rupee and a massive FPI pull out!

The initial reaction of the Government to these reactions were in expected lines that our economy was still resilient, one of the fastest growing and hence no need to panic. However soon enough, with bad news emerging on the Automotive sector first and then even on FMCG, the Government was forced into action and from then on we have been seeing a slew of measures, cabinet decisions and sops to revive the economy. Q1 GDP at 5% turned out to be the last straw.  Coinciding with the Q1 GDP results, the Government announced the merger of PSU Banks as a way forward in banking reforms. Economy was finally on top of the news cycle and the Government’s attention, Kashmir notwithstanding!

It was widely expected and hoped that some of the important initiatives of the Modi Sarkar in the 1st term like the thrust on Highways construction, massive investments in improving Railways infrastructure, improving air connectivity to the smaller towns, making electricity available to the last village and so on would start yielding results in terms of improving economic activity and fuel growth in the country. Added to this, Modi Sarkar has been constantly increasing outlays on MGNREGA in every budget. Why these measures have not started yielding results on the ground both in terms of economic growth and job creation is mysterious. It may be a good idea for the Chief Economic Advisor to come out with a White paper on the outcomes achieved for the massive outlays in Modi Sarkar 1.0.

In the back of all these, the question becomes, are the measures so far announced by the Government enough to resuscitate the economy? The reversal of some of the proposals in the budget are certainly welcome moves but those just contain the damage.  And the other measures like opening up of FDI and so on are necessary but not sufficient to get us back to where we were last year (8%) and then hit our dream goal of 10% GDP growth which increasingly is becoming a pipedream.

During Modi Sarkar 1.0, the Government leveraged well on the windfall it had from the crude prices and not passing on the entire benefit to the consumer to “manage” the economy with heavy public investments. The hope was that gradually the private investments will pick up once the sentiments change. But unfortunately, due to the NPA and the overall banking crises, it did not fire up the economy so much but, just kept the wheels of the economy going. Now, under the current circumstances however, continuing of public expenditure alone may not be sufficient. The recent red herring on the increasing debt of NHAI may in fact become a dampener here. For India as a country, the next few months are supposed to be very high on economic activity with the impending festival season. And the fact that the monsoons have been bountiful for most parts of the country notwithstanding the floods in some parts, there is still hope even for this year.

So, in order for the economy to fire up, ways and means have to be found for increasing private investments and individual spending/consumption. I am no economist but here are some thoughts:

To get private corporate investments going:

  • Modi Sarkar should bite the bullet and announce 100% FDI in Multi Brand Retail. Though India as a country missed the retail bus 10 years ago, it is still not late. Some of the global retail majors may not be as bullish today as they were a decade ago on India due to our policy flip flops and the current industry shift to E-Commerce. But still considering the country’s size and the potential it offers, India is still an exciting market for say specialised vertical retail stores. In announcing this, we should do away with the myriad sourcing conditions and allow the retail water to find its own level. Retail gives fillip to low end jobs, manufacturing industries as well as commercial real estate.
  • Copy the STPI (Software Technology Parks of India) strategy that helped in boosting the software industry in India in the 90s and come up with a similar framework for boosting Electronic hardware manufacturing in India. This will help India in becoming a preferred country for those who are looking at alternatives to China. Again we are late in this game and today Vietnam has emerged as an alternative to China for low cost manufacturing. But still considering the long term view, I believe we still have opportunities here.
  • Every Government recognises the potential of Tourism as an industry to provide jobs and improve economic growth. However, to unleash and unlock the true potential of India, we need massive capacity building in hotels, recreation facilities, connectivity and infrastructure. Government should provide time bound tax cuts for investments to private sector in this area to targeted locations in India which need infrastructural boost. The tax cuts must be linked to time bound completion of projects.
  • As a purely short term stimulus, any capacity building in manufacturing industry by way of new factories, expansion of plants,.. should be provided with tax relief.

To improve consumption and spending:

  • Holiday season is upon us. Provide relief on Income tax to individuals for money spent on holiday travel and stay in select locations in India which require boost on tourism (Uttaranchal, North East, Leh for example) with a cap of say Rs. 1 Lac. This will motivate public to take vacations and boost tourism in certain locations which have potential, decent infrastructure and connectivity but are untapped. Usually this has a spiral effect. When more people throng these places, automatically investments start pouring in for development.  For every 3 years, the locations can be changed in order to make it widely spread.
  • On the real estate front, today the supply is high and the demand low. This is mainly because the property rates are artificially pegged high and the home loans still high. This jinx needs to be broken. Though I have seen the Government announcing a slew of measures in the past few years, the housing market has not taken off. Considering the fact that the private real estate lobby is not going to cut prices ever, there is a need for the Government to intervene and disrupt the market. Like in countries like Singapore, Malaysia,.. Government must float either own companies or joint ventures to construct affordable housing in a massive scale and allot to citizens who do not own a single house in a transparent manner. The Government can offload its equity and then exit after say 20 years from these companies once the overarching objectives are reached. This will also disrupt the existing real estate industry and make it fall in line in terms of pricing and best practices, both of which are found wanting in the current scheme of things.

To revive the “animal spirits” in the Indian economy. Animal spirits are related to the points mentioned above i.e. both consumer and business confidence. I have put this separately as there are some low hanging fruits here which can be taken:

  • Sell Air India as of day before yesterday!
  • Get going on “Actual” disinvestment of Public Sector units already identified as non-strategic. Identify another Arun Shourie to make this happen in this term!
  • It is not enough to merge PSU Banks but to offload equity, get professional management and turn them to “HDFC Banks”!
  • Today many of the Government’s grand projects are stuck or going slow due to land acquisition issues. Identify the issues and fix them by bringing about the necessary changes in the Land bill!
  • Use the current crisis of job loss to build consensus around Labour reforms. Adopt the “GST council” approach for labour reforms. Today all state governments will eagerly come on board considering the pressure all states have on generating jobs.

As I write this blog, I am seeing that the Finance Minister is addressing a press conference. This is her 3rd one in the last 2 weeks. Glad to see the Government demonstrating the needed sensitivity to the economic situation and willingness to take steps. Our only urge is that instead of incremental small steps, we need big leaps.

Only that will ensure we turn the tide over Gross Disappointing Product and achieve real Gross Domestic Product rates quickly!

Calling it a Day!

It’s sad when someone takes his own life.

It’s sadder when the person is relatively young!

And even more sad when he is known to be a successful entrepreneur, a role model and founder of an iconic home grown brand!

As news started trickling in on Tuesday of the missing of Café Coffee Day’s (CCD) founder VG Siddhartha, leaving behind a letter purportedly written by him, a sense of foreboding loomed large.  When news of his death by suicide was confirmed the next morning, there was a pall of gloom, even among those who didn’t know him personally. That the brand he created touched many a lives across the country was enough to trigger a wave of emotions in the media, social media in particular.

In general, people who have interacted with Siddhartha talked high of him as a gentleman who knew his moorings well. And who didn’t have an air of himself even after reaching a reasonable peak in his career quite early in life.  In his interviews which surfaced after this tragedy, he can be seen talking passionately of taking his brand to the high streets of the world. There is no much evidence of him being a corporate bully or as a person who grew too much for his shoes or as one who wanted to grow by hook or crook!

In the letter which surfaced on Tuesday, Siddhartha basically talks of three reasons which sort of forced him to call it a day! Pressure from investors, high debt and finally bullying by tax authorities. The narrative that followed this unfortunate incident had two extreme tones mostly picking up threads from the letter and joining the dots. One painted Siddhartha as a victim. In this version, people slammed the Government of the terror it unleashed on hapless businessmen like Siddhartha in the name of Tax compliance. “Tax Terrorism must stop” was the clarion call.  The other narrative painted Siddhartha as a businessman who took advantage of his political lineage and used it to grow while crushing others.  This narrative sort of led to the conclusion that he was no more a crook in a nice pinstripe suit.

Like in most situations these days, the truth could be somewhere in between.  I don’t know of Siddhartha personally.  So, I don’t have personal likes or dislikes of him. I don’t own CCD shares either. Though, I like some of the CCD outlets, as a once upon time filter coffee connoisseur, regret to say, I am not a fan of the CCD coffee!! Ergo, I do believe that I can have a very detached view of this situation.

First up, I do not want to buy the victimhood argument which is being bandied about. In his own admission, Siddhartha has admitted to some financial misdealing. It is the tax sleuth’s job to go after suspects in the way they have been trained to. There is no record of this particular IT officer having singled out Siddhartha for harassment without evidence. On the other hand, what would have been the reaction if the story was slightly different? Had Siddhartha not taken his life but taken a flight out to Cayman Islands under the cloud of debt, tax evasions and investigation trail, what would have happened?  The same commentators would be today slamming the Government and the authorities concerned of letting go of Siddhartha just like Nirav Modis and Vijay Mallyas of the world! Here the angle of Siddhartha’s Father in law, S.M.Krishna being a BJP sympathiser now will be put to use to flog the argument further.

Secondly, that he built an iconic brand that employs 30,000 people cannot be brought forward again to defend his omissions and commissions. Any entrepreneur as far as I know, doesn’t start out with a mission of giving jobs to people. Most probably the larger objective is to build a successful business. When the business grows, people are obviously employed to attain or manage that growth.  So this argument is a non-starter.

Thirdly, the overwhelming victimhood narrative is also because the brand Café Coffee Day touched the lives of many people all over the country and so many had their own CCD stories to share. Of businesses that were “started up” over coffee meetings, over jobs that were landed, over romances that blossomed, over handsome deals that were stuck and so on. My question is, what if Siddhartha did not build Café Coffee Day chain but, a nondescript but equally successful business that supplies components to a global car manufacturer that employed 30,000 people in his factories?  I bet the emotional outbursts in favour of this Siddhartha would be far lower!  It must be also remembered that apart from CCD, Siddhartha ran a slew of businesses from Coffee Estates to Hotels to real estates to being an angel investor!

My point is that in the absence of clear details, it is too early to curse the tax authorities or the Government of pushing Siddhartha literally over the brink!

At the same time, in the absence of full facts, it is also not correct to paint Siddhartha as a villain! In the aftermath of the tragedy, WhatsApp University started spreading unnamed posts of how Siddhartha evaded tax through a complex web of dubious transactions. As they say, there is no smoke without fire or in this case there is no coffee without the bean!  In fact, activists like SR Hiremath have been raising noise about Siddhartha’s dealings as early as Aug 2015!

Be that as it may, it could very well be that as Siddhartha himself admits in the letter, he committed grave mistakes. The point is, if at the end of the day his assets outweigh his liabilities, what was the need to take such an extreme step? He could have very well faced the law, paid up his dues and still walked tall. This is where there seems to be more than that meets the eye, certainly.

In life, Siddhartha imparted many lessons for wannabe entrepreneurs on how to build a successful and adorable brand in such a short time. In his unnatural “Calling it a day” as well, he has imparted a few key lessons!

In Sanskrit the word Siddharth means “One who is in possession of all desirable things”! Yes, VG Siddhartha also was in possession of all desirable things except peace of mind. Most likely.  May his soul find that peace in this journey!

Image Courtesy: TheNewsMinute

Agenda for Modi 2.0!

Dear Mrs. Sitharaman,

First things first. Congratulations on becoming the finance minister of the country. Ever since you have taken over, there has been a flurry of unabated, unsolicited advice on what you should do and should not, in the upcoming budget. I was extremely reluctant to add to that already long list. But then your extremely gracious and earnest tweet the other day, welcoming all suggestions and inputs changed my mind.  Being from Trichy as well, I could see the “Trichy Tehzeeb” in that request!  Hence this piece, with my wish list not just from the budget but overall from the Modi Sarkar 2.0 from an economic agenda point of view.

I am not an Economist. I am just a keen and informed observer of Indian politics and a well-wisher of our country. So, my points may or may not stand the scrutiny of economists but hopefully will pass muster with the readers of this post.   I promise that I am not going to repeat a lot of stuff which has already been suggested by the erudite in their pieces.  So, here we go:

  • First up, the positive effects of implementation of GST and the kicking off of several infrastructural projects from the 1st term will start bearing fruits in the coming 2/3 years. So, I suggest that the 5 year term till May 2024 be divided into 2 parts – First 3 years till 2022 and the second 2 years till 2024. Take all the tough decisions in the 1st part and use the 2nd to stabilise things.
  • Second, in Modi 1.0, there have been quite a few hits but some misses too. In the 2nd term, on the back of a solid mandate, Team Modi should play on the front foot with confidence, while at the same time leaving alone deliveries outside the stumps and negotiating short pitched deliveries and bouncers with alacrity. In governance parlance, this means implementing even the not so populist decisions with confidence and not getting muddled in unwanted distractions.
  • Third, please request the economic ministries to come up with a list of things to be done to rev up the economy which is stuttering. Divide this list into 3.
    • 1 – Low hanging fruits which don’t need legislative backing
    • 2 – Which need bills to be amended, passed in the parliament
    • 3 – which need the states to take action

Get going on this list systematically. Have a target of 60 days to accomplish everything in the 1st list. This will give a clear message to all stake holders that this government is not the one to rest in its electoral success laurels!

  • Fourth, you are now in Japan and there is a lot we could learn from the Japanese in terms of going about things. One of the things I learnt from working in a Japanese company is “Prioritisation”! As Indians, we tend to focus on 100 things at the same time and spreading ourselves extremely thin. This was one grudge I had on Modi 1.0 which embarked upon so many projects simultaneously like Make in India, Skill India, Stand up India, Digital India, Smart City project, Ujwala programme and so on. If you closely measure the success, it is only the programmes which had focus like Ujwala, Rural electrification, Rural housing that met with success. In Modi 2.0, I would suggest that the Government takes up a maximum of 2 or 3 projects at a time, focus on the delivery with finite timelines and then move on to the next set of 2/3 ideas. This is what Japanese do.
  • Fifth, in India we have been talking of linking outcomes to outlays. But seldom has the same been acted upon. So, in the coming budget presentation on the 5th of July, please do not announce plain outlays but outlays that can be linked to quantifiable  outcomes.
  • Sixth, we usually see that in the budget, there are many outlays which are just carried forward year after year with a % increment or a % cut. For example, since 2013, money from Central Budget has been allocated to Nirbhaya fund to support initiatives towards ensuring women safety. One really doesn’t know how this fund is being utilised and after 5 years what this fund has achieved. This is just one example. In every budget, there are many sundry allocations like this. Please review item-wise outlays in the last 3 budgets,  respective outcomes achieved and allocate outlays in the coming budgets only if they make sense.
  • Seventh, considering the state of the economy, there is a need to mobilise resources to generate income and keep fiscal deficit under check. As Prime Minister Modi has been talking of “Minimum Government and Maximum Governance” one way of mobilising resources is by Government exiting many businesses that are no longer strategic in nature and monetising those assets. In Modi 1.0, in every budget, we had an item called “Proceeds from disinvestment” and this was achieved by making some PSUs like LIC pick up shares from the disinvested PSUs. During NDA-1 under Vajpayee, there was a clear focus on “Real” Disinvestment with a full-fledged ministry and a determined minister like Arun Shourie doggedly pursuing it. UPA did away with this and since then Modi 1.0 included, there has been no serious disinvestment in the country. I suggest that Modi 2.0 take this up seriously. A functional ministry named as “Monetisation of PSU Assets” (since disinvestment is seen as a bad word) should be formed. I also add that the proceeds from this monetisation be parked in a separate account and used for welfare schemes. By this, any criticism of the move can be countered by demonstrating that the proceeds of the same are being used for social welfare. A creative way needs to be found for accounting like this.
  • Eighth, in Modi 1.0, there was a big push towards infrastructure projects like highways and roads which was really commendable. The same should be continued with additional vigour. However, as admitted by Nitin Gadkari the pace of the projects could have been faster but for complex land acquisition issues. This is a big issue even today. In the 1st term, after initial belligerence, the government chickened out of the much needed amendments on the Land Acquisition bill. I remember Modi taking this up with rigour in 2014 basically because all the states identified certain provisions in the existing Land Acquisition bill as impediments for timely closure of infra projects.  Since the states are equal stake holders in this issue, please have discussions with a fresh outlook, strike a consensus and pass the amendments to the bill smoothly in both houses of the parliament. Renaming this as “Land Partnership bill” or something like that instead of the negative sounding Land Acquisition bill will help too to remove the negative connotation around this!
  • Ninth, taxation in India is still complex. GST implementation was a landmark Tax reform. I am sure there is a road map towards further simplifying the same with reduced tax slabs and simplifying procedures. Now, in this term please focus on Direct taxes. I hope that the panel working on overhaul of this will submit their recommendations quickly and your government should adopt the same ASAP. In simple terms, the mantra should be lower tax rates with no or very few genuine exemptions. Some of the exemption clauses we have are weird and defy all logic. For example the current clauses we have for LTA exemptions for salaried. Applicable for 2 years in a block of 4 that being calculated from the year 1986 and so on!!! Someone needs to do a Zero based hard look at all the existing exemptions for personal and corporate taxation and do away with most of them which don’t make sense in this day and age!
  • Tenth and the last one. On the 5th July when you leave your office for the parliament to present the budget, your team will hand over a brand new brown brief case which will have the budget speech. You and your team will pose with that brief case for the cameras and then you will read out the budget speech from the bunch of documents. And here’s what I suggest. Please, please do away with this brief case and the papers. Instead, amble along in style, pose for cameras with your hands “free” and as you rise to present the budget in the parliament hall, download the speech from the ministry’s secure server and project it in a large screen. Doing away with the rambling, long speech that would be just uber cool, while at the same time giving a push towards Prime Minister’s “Digital India” dream!

Pic Courtesy: Livemint

Jet Airways – Positioning lessons from its crash landing!

On Wednesday last week, as I was queuing up to board an Air India flight to Delhi, I could see the tarmac at the Mumbai airport lined up with idling aircraft of Jet Airways, whose operations was being cut down by the hour. Eventually, by evening the airlines shut down its operations completely, albeit “temporarily” as per the company’s statement. And in a twinge of irony, the last flight was a Jet Connect flight from Amritsar to Delhi that landed in Mumbai in the wee hours of Thursday.  I say “in a twinge of irony” because one of the reasons for the airline to get caught in turbulent weather, was its many experiments in positioning wrongly so, trying to compete with budget/low-cost airlines with Jetlite, Jet Connect and so on, when it hit financial air pockets way back in 2009 and later.

Unlike this generation, people born before the pre-liberalisation took their 1st flights when they started working! So did I. Way back in the early 1990’s for the initial few years, it was all Indian Airlines for work related trips. Though Indian Airlines in that period wasn’t bad, when Jet Airways burst into the scene, post opening of the sky along with other private airlines like East-West, Damania, Modiluft and so on, it brought in a whiff of fresh air. I remember vividly those times. The airports with inadequate infrastructure to handle the explosion of airlines and traffic, by and large resembled railway terminus’s and bus stations with multiple loud announcements of arrivals, departures and boarding calls.  “Chaotic” was an oft-repeated description of airports, then.

Amidst all the initial slew of private players, only Jet survived. It is clear that Naresh Goyal, the original promoter of Jet Airways had mastered the one core competency that mattered to excel in business in India – that is of “managing the environment”! But, I must admit that apart from managing the environment, Goyal could get another aspect of business right. That is of managing customer needs and experience well.

In those initial days, –  I am referring to the mid 90’s, Jet Airways experience was really out of the world,  particularly for frequent flyers. You could tele-check in and get your favourite leg space seats without much of an issue. Upgrade vouchers could actually be used to upgrade to business class even at the airport while checking in. There was a wide variety of meal options apart from just Veg and Non Veg. In fact for breakfast, in Vegetarian, they used to have South Indian and North Indian choices!  Dinners were 3 course meals. Hot and cold towels were provided even to Economy passengers! You could redeem your award tickets without much fuss and disappointment. In the initial few years, one needn’t pay even the taxes for award tickets (That changed pretty soon). With fares almost same as of other airlines, there was no reason unless otherwise the flight was full, to look at alternative airlines! I can say that from a user perspective, it was truly a golden era for Jet Airways!

The golden run for the airline continued in the 1st decade of this century, but with conditions attached. This was when it became a market leader by way of market share and leadership pangs started catching up. But still, due to its superior service and its On-time record, it was business travellers’ first resort.

The advent of low cost or budget airlines in the scene in India somewhere around 2006, must be one watershed moment in the history of Jet Airways. Captain Gopinath, the founder of Air Deccan redefined airline business in India with his no frills, low-cost offering exemplified by R.K.Laxman’s “common man” as the brand mascot. By lowering air fares to the extent of making it cheaper than train fare, Gopinath ushered in a whole set of middle class travellers into flying. In doing so, Gopinath with Air Deccan became of subjects of case studies in B-schools. The whole landscape of air traffic changed so fast in that period that, Air Deccan with its mindless pricing strategy, ended up disrupting itself and few other airlines on the way.

The global recession of 2008 and the cost consciousness that ensued among corporates world over, brought the curtains down on the party of the expensive, premium priced, full service airlines. In India, it meant Jet and Kingfisher who were truly premium, full service airlines at that time. This is where, I feel Jet was caught in the wrong foot. When it started losing market share to low-cost air lines and new entrants like Indigo, Go Air, Spicejet… Jet decided to pursue its own “budget airline” strategy which in my mind was a big mistake. Extending the brand is a trap which many companies fall into, with their eyes wide open.  Here, Jet Airways, hither to a market leader with a full service offering and impeccable service reputation, decided to extend its brand and launch a budget airline called Jetlite and then later Jet Connect. At the outset, it seemed like a smart strategy to prevent losing market share to the newly launched low-cost carriers, that too in those prevalent muted global economic conditions.

In the process, what happened was a systematic dilution of the brand equity of Jet Airways and all it stood for. In the name of cutting costs, service offerings were trimmed. It was no longer a frequent flyer’s delight. Service started falling apart. I started seeing the writing on the wall sometime in 2011/12. You could never get a seat of your choice even when you web checked in early! Choice of food became limited. For a flight taking off at 7.30 pm, instead of dinner, a snack meal was beginning to be served! Even the After mint (post meal mouth freshener) which was served in Jet Airways in the beginning, which became so popular that it was sold in super markets and stores as Jet Mukhwas suddenly disappeared from the in-flight meal. Here, I must add that I have seen many passengers asking for extra sachets of the same and hoarding them to their homes!  Award ticket redemption process now online, became a farce. There were just few seats for award tickets in a flight and you would never get them. If you redeem award tickets for your family, seldom you will get confirmation of the same while you book. Upgrade vouchers became just pieces of paper because upgrades were limited to few fares.

In the midst of all this, Jet’s financial woes only multiplied. A mistimed acquisition of Sahara Airlines only worsened the situation. Few quarters back, realising its original mistake of taking the budget airline route, Jet jettisoned its low-cost brands and decided to stick to just its full service offering. Considering the fact that global economy had revived, I thought that it was a wise move and hoped that Jet will soon be back to its glory!  Well, it did not. The low-cost hangover continued. The pricing was of full service. But the service was of budget airline! Can you imagine as recently as in Feb, on a 5 and a half hour flight from Mumbai to Singapore, there were no personal screens and one had really sleep through to kill time? And my co-passenger who requested for a glass of water got it after reminding the crew for the same at least 3 times! And of late dinner served in Jet Airways resembled more like junk street food! And I can only say that Jet’s frequent flyer programme – Jet Privilege which was once upon a time really world-class, is a pale shadow of its former self! Jet Privilege was such a strong brand that Goyal hived that off as a separate entity and monetised it. Even that infusion didn’t help to improve the user experience, though. Keeping the financial troubles aside, I was of the opinion that Jet was sinking as a brand anyway! And the culprit was its positioning! Was it a full service airline with offerings of a budget airline or was it a budget airline that was overpriced??

What if, had Jet continued to stay the course of a full service airline?

What if, in that period when low-cost airlines were mindlessly cutting prices, had Jet focused on “business value flyers” and on superior service?

What if, had Jet went after bottom line instead of preserving market share in that turbulent economic period?

So many what ifs! As I said, in hindsight, pontification is easy. But this hold lessons for companies for the future. After all, business cycles repeat themselves.

Having said that, singling out Jet is also a tad unfair. Airline business globally is a tough business to wade through. One that requires continuous infusion of Capex and which sucks up huge Opex. Only airlines that have thrived are those protected by state monopolies or those who have got their positioning and cost efficiencies correct. In India, the woes of Airline industry have been compounded by high taxes, fluctuating fuel prices, high interest rates and crony capitalist policies. In the history of Airline Industry, Jet is only the latest to bite the dust. Before, we had East-West, Modiluft, Damania, Air Deccan, Sahara, Kingfisher, Alliance Air and myriad other smaller airlines which all exited the scene in one pretext or the other! And we all know how Air India has managed to pull through while being in ICU for so many years.  And it is also clear that the other airlines are all clutching at straws and managing to stay afloat. That must really beg some critical policy related questions among the policy makers in India. While on the one hand trying to expand air travel to smaller towns in India, is the current Aviation policy regime really business friendly?

Seeing an Indian brand, which was once upon a time close to world-class fold up, is really unfortunate. Hope wisdom and luck prevails and we soon see Jet get its Jetwings of yore!

Image courtesy: https://www.thenational.ae

Daag Acche Nahin Hain!

Just as I was checking my Twitter feed this Sunday morning, I saw the #Surfexcel trending. Initially I ignored attributing it to some sponsored marketing campaign. But when I saw a whole bunch of individuals from the Right to the Left tweeting on the same, I decided to check it out. There, I could see other hashtags calling for a boycott of Unilever products and so on. The reason for the furore being, this ad (watch here) which Hindustan Unilever (HUL) has made for Surf Excel for the upcoming Holi. I watched the ad and I thought it was a brilliant ad though the theme has got a bit repetitive particularly with HUL these days!

People calling for a boycott of Surf Excel and Unilever products though, had a different take. They questioned the need for the company to pick up on a Hindu festival (Holi) to push their product. Few also quizzed if Unilever would do an ad around any Muslim festival. There were also many other tweets with images of Muslim festivals photo shopped with Surf Excel and its now famous tag line – ‘Daag Acche Hain’!  Notwithstanding all this, the ad achieved the purpose of creating a buzz and finally going viral.

This comes closely in the heels of another ad from the same company created during the Kumbh Mela! This ad (Watch here) for their Brooke Bond Red label Tea literally kicked up a storm in the social media tea-cup! . Though extremely well made, it is clear from the ad that the product and its attributes were secondary while the primary objective was just to ride the buzz around the Kumbh. While the commercial went viral on many WhatsApp groups as a great ad, on Twitter though, folks derided the company HUL for hurting the religious sentiments of Hindus. The supers that appeared at the end of the ad said, “Kumbh Mela is the largest religious gathering in the world. At this holy gathering, many elderly are abandoned by their families”!

I am not sure what kind of research went behind, to make a statement like this.  Nevertheless, the ad, I repeat very well made and executed, came across as a botched attempt where just to bring in the “Kumbh” story, you build a very touchy and probably insensitive narrative. I would rather prefer the approach by Fevicol in a similar context for the Kumbh where, they weaved a positive story (watch the ad here) around the event while plugging the attributes of the product effectively.  In the Red label ad, the product got thrust upon in the story at the end. With the massive uproar about this ad in social media, I am told that the company decided to take down the same. However, it didn’t stop it from going viral on social media platforms where it got trolled heavily.

These days, companies when they brief the agency for their commercials, I think must be outlining their 1st objective as “It should go viral”! As I had written in my earlier posts, “Stir up to sell” is an old ploy in marketing and advertising.  Achieving the objective of getting ad go viral is of late falling into very predictable tropes like Hindu – Muslim unity sentiment, Indo – Pak emotion and so on.

The larger point I am trying to put forward though, is different.  Few days back, I received as a forward on WhatsApp a clip which, I then gathered was a trailer for an upcoming web series titled ‘Metro Park’. Watch it here. I watched it, had a hearty laugh and forwarded the same to few other WhatsApp groups as is the wont these days. Little did I realise that, even for what I perceived as a routine comedy clip, I would receive some critique questioning, if the makers would dare to make fun of any other religion’s practices in a similar way!

A few years back, the Surf Excel Ad and the Red Label Kumbh ad would have just got beamed across homes through your television sets and the agencies would have just walked away with awards galore. But today, there is no such getting away easily. Though personally I thought that the Surf Excel Holi Ad is a brilliant one which weaves in the product attributes into the Holi story, while at the same time talking of Hindu-Muslim brotherhood… the extreme reactions against the ad actually conveys something else. That of bringing to the fore the fault lines that exist/existed all along in our society.

First of all, the repeated emergence of these themes in ads is itself an aberration in my view. A Unilever company in another country say in the US or in Europe I feel, will not take pains to come up with an ad promoting Hindu-Muslim unity in the guise of promoting their product. After over 70 years of Independence and declaring ourselves as a secular nation, if we have to keep clutching at straws (read as films and TV Commercials) to promote self-belief as a secular nation, something has gone wrong somewhere. Secondly, the extreme reactions a TV commercial promoting harmony evokes among us, also is worrisome.  While social media playing the role of a watch dog is good, more often than not, it is barking up the wrong tree.

‘Daag Acche Hain’ (Stains are good) may be a good tag line for a detergent.  However, “Communal”, “Bigoted” as tags are stains. And as a country we could do without such stains. Kyunki woh Daag acche nahin hain!

140 Years of a habit called “The Hindu”!

On the 20th of September, the very popular newspaper from the South – The Hindu completed 140 years since its first issue! In these “cash out and exit” times, one cannot but acknowledge and revere the newspaper for 140 years of sustenance and survival. For those from South India in general and Tamil Nadu in particular and for those who were born in the pre-liberalisation era, The Hindu is not just a newspaper but a habit!

I presently live in Mumbai and I don’t read The Hindu daily these days and my Hindu reading is limited to when I travel to Tamil Nadu. On and off, I do get to read some interesting articles from The Hindu which land in one’s social media timelines!  This week, my memories flash back to my growing up days when reading The Hindu daily was a karma one performed religiously.

I probably started reading The Hindu newspaper when I was in class 2 or 3. Initially it was just the last page which was the Sports section where one would catch up on the previous day’s action mainly of Cricket and later Tennis! I have vivid memories of writer Rajan Bala’s lucid writing on some of the test matches accompanied by some fantastic action pictures from the cricket field.  Once Rajan Bala moved on from The Hindu, the cricket column was taken over by R.Mohan. Both were extremely knowledgeable of the game and with their command over the Queen’s language, brought the nuances of the game in front of our eyes in the pre-TV era. The following day in the school, we used to discuss not just the game but also the style of writing and the language used. Such was the impact of the writing on us!

Gradually, we graduated from the last page sports columns to the first page political news and also the Sunday supplements. The Hindu those days had an impeccable reputation for being factual and accurate in News reporting. So much so, the joke those days was that even if a murder happens in broad day light right in front of its office at the Mount Road in Chennai and their reporters saw it with his/her own eyes, the news will get published only after the police FIR was filed and police confirmed that it was indeed a murder!

For many in Tamil Nadu, The Hindu was the teacher for the English language! The newspaper was seen as an ultimate authority on the language. One could hardly find a mistake in the spelling or the grammar those days. These days it is no more the case, I’m told. ‘Know your English’ – a weekly column which used to appear in the newspaper was extremely popular and as kids we used to read the same with immense interest and curiosity to discover unknown aspects of English!  If today, I am in a position to write this blog in half decent English, some credit certainly goes to The Hindu!

After being in the habit of reading The Hindu, whenever I used to travel outside Tamil Nadu and got to read other English newspapers, the difference used to be glaring! One, The Hindu those days was in the forefront of adopting technology, though from a very conservative and traditional ownership background. So the typesetting and page layoutting were top class. You will never find an article in the first page with “Continued in Page ….” line. I see this even today in papers like The Indian Express! The reproduction of photographs even in the B&W era was again of highest quality. Talking of adoption of technology, I clearly remember that The Hindu was the 1st to use “facsimile” technology to transmit and receive pictures from outside when reporting events outside of Chennai. Those pictures used to carry a line (received through facsimile technology!). That fax as a technology became very common place later is a different aspect altogether. When The Hindu adopted it, it was a pioneering effort.

As far as I remember, political reporting of The Hindu used to be pro-establishment. It never used to taken an antagonistic line. But, I reckon that this changed when N.Ram took over as the Editor. Ram as an individual is known to be unapologetically left leaned and since him taking over the reins, one can clearly say that the paper ceased to be neutral.

It was under Ram’s leadership that The Hindu broke one of the biggest corruption story of the country namely the “Bofors scandal” which broke the back of the Rajiv Gandhi government. Any pretensions of The Hindu being pro-establishment ceased after that. Somehow, for reasons not very clear, The Hindu didn’t pursue the Bofors story to its logical conclusion. In fact, journalist Chitra Subramaniam who was the architect of that story had to continue her expose in the Indian Express later!

When I moved to Bombay in the late 80’s, no filter coffee and not able to read the The Hindu every morning, meant serious withdrawal symptoms! The Hindu used to be available only with select newspaper vendors that too in select suburbs like Matunga! The day’s paper used to be available only by 4 pm. Initially for a few Sundays going to Matunga in the evening to have filter coffee and pick up the Sunday Edition of The Hindu was a routine that I did not miss. Slowly, one got weaned over this habit and started getting used to The Times Of India albeit very, very reluctantly!

Today, when I go to Tamil Nadu and pick up a copy of The Hindu to read, I do see it as a pale shadow of its former self! The language is no more engaging and the political reporting has clearly moved from being neutral to be clearly biased. And I notice that this is what many of my folks also felt.  Even those who were very loyal to The Hindu those days, talk of it with a tinge of irony!

Probably this is a sign of the times where not just The Hindu, but media in general have lost their moral compass and have started to pursue an agenda. Even amidst this, I do feel that The Hindu commands a sense of respectability among its peers. With Times of India invading into the South, The Hindu is no longer the dominant newspaper it used to be till the beginning of this decade. Still in these days of 140 characters of Twitter journalism, for The Hindu to chug along for 140 years, is no mean achievement. To the habit called The Hindu, here’s wishing another 140 years of a re-engineered future!

Postscript: While on the newspaper reading habit, please do read my humorous take –‘Paper Vandhaacha?’ (Read here) on how the newspaper is intertwined with the lives of a Tambrahm mama!

Pic Courtesy: The Indian Express!

One upon a time, “the Nation wanted to know”!

The year was 2007. When in my erstwhile company we decided to go for a brand campaign on TV for the 1st time, being in the business of business and enterprise products, we had English News and Business channels in mind. Our original idea was to spend much of the budget on NDTV 24*7, then an established leader in the category and some money on CNN-IBN, a challenger. Our creative agency and its media buying arm strongly suggested to add to the media mix Times Now, an upstart which had gone on air a year ago in 2006. I was hesitant and my 1st question was “Who watched Times Now?” I was told that Times Now with its firebrand anchor and All in All Arnab Goswami had the fastest growing viewership. Over and above that were willing to give an excellent deal. I gave in and we decided to put some money on Times Now as well for the campaign. Till then I never used to watch Times Now and was basically an avid NDTV and at times CNN-IBN watcher. To catch up with the campaign on Times Now during prime time, I started watching Times Now on and off in end 2007, mainly due to work compulsion!

For most Indians though, their tryst with Arnab started probably a year later in November 2008 when the dastardly terrorist attack on Mumbai happened. With rival channels beaming the entire counter operation live much to the exasperation of those carrying out the operation, it was Indian News Channels’ worst face palm moment in history. Being head quartered in Mumbai unlike other English channels which beamed from NCR, Times Now could deploy the maximum resources during the 3 day non-stop coverage of the attacks on Mumbai and garner the most eye balls of eager citizens wanting to know what was going on. For Arnab and Times Now, the 26/11 Mumbai attacks did what the 1991 Gulf war did for CNN!

I reckon that during this period, Times Now  became a serious player on prime time and in fact started boasting of TRPs ahead of NDTV 24*7 and CNN-IBN. There was no looking back since. The heady days of UPA-II offered much opportunity for Arnab to take the Government to the cleaners with scam after scam. The CWG scam, the 2G scam, the mining scam and the “Anna movement” all came in handy for Arnab. From here on, it is my belief that he ceased to be a News anchor or a journalist and started morphing into being the very righteous and highly moralistic “vigilante” leader! And the Nation lapped him up!

At 9.00 pm every night, Arnab was no more reading news. He was not even anchoring a news show. He was actually giving his “Address to the Nation” to gullible Indians for few minutes followed by debates where participants were literally “pigeon holed” and harangued. Those not on his side were interrupted, insulted and were handed over sermons. He became the advocate, prosecutor and the judge every night.  But in all this, he was doing well for himself. Arnab became a brand. In fact, became larger than the channel itself. Times Now became an undisputed leader in its category. For the middle class English news watching public, he was a hero who could question and tear apart a politician on live TV without fear. They kept goading him with more TRPs and he became unstoppable. So much so, in 2014 during the election season, when Rahul Gandhi wanted to give an interview and the Congress party decided to go with NDTV and Barkha Dutt, Arnab challenged them with facts and figures and ensured that the only interview Rahul gave was “Frankly speaking with Arnab”. And we all know how much that interview contributed to the Rahul folklore on social media! In the same token, in the run up to the election, the only English Channel to which Narendra Modi gave an interview was Times Now for Arnab!

While being on top of the game and world, Arnab decided to leave Times Now and he started his own channel named Republic TV which went on air in May 2017.  Here again, he has continued his vigilante model – only that his vigilantism is being applied only against the opposition party! Republic TV continues to rake up scams supposedly pertaining to the UPA era and at times even of the Rajiv Gandhi era! The Bofors story keeps popping up, not surprising as the original Bofors story architect, Chitra Subramaniam is associated with the channel. With the channel being funded mainly by Rajeev Chandrasekhar who is now been given a Rajya Sabha ticket by the ruling BJP, Republic TV’s loyalty is no more a secret. It never was. But now even that translucent mask is off!

Arnab is today a metaphor for the aggressive, noisy, angry, rooting for nationalism type of journalism. And the success of Arnab has led to a spawning of Arnab Goswami wannabes in channel after channel! From Rahul Shivshankar to Navika Kumar to Bhupendra Chaubey to Rahul Kanwal to Gaurav Sawant to Anand Narasimhan we have a parade of angry men and women masquerading as news anchors in every channel!  And night after night one can see them howling at guests who for whatever reason choose to appear on their shows!

Similarly the success of Times Now and now the apparent popularity of Republic TV within a short span has led to every channel following the shouting match formula on prime time! Among channels, with the exception of NDTV 24*7 which has chosen to stay away from debates on prime time, there is hardly any product differentiation! In fact, Times Now seems very much a clone of RepublicTV in almost all aspects – the stories of the day, the editorial line they take, the boxed debates, the profile of guests, the doorstepping of reporters, the Arnab like anchors in Rahul Shivshankar (an Arnab protégé) and Navika Kumar and even in the harebrained hashtags they come up with every evening! No wonder Arun Shourie, known for his penchant for one liners, came up with the sobriquet of “North Korean channels” for both!

9 pm prime time news has been my every night fixation for years. Not anymore. I have stopped watching Republic TV.  Rarely do I watch Times Now. And more importantly, I just give a fleeting glance for not more than 5 minutes of even the other channels.  Results from unscientific polls conducted with my folks over WhatsApp reveal similar trends. That of die hard news consumers shunning Arnab and his ilk in particular and English news channels in general.  Now this trend is not reflecting on the viewership data at least for now. But then, methodology adopted for opinion polls and collecting viewership data in India are as unscientific as they can get and hence I treat them with the same contempt.

News today is more noise. And hence it is nothing but entertainment.  Soon news channels will fight for being classified under General Entertainment category. If a finger has to be pointed on one person for this degeneration of the News TV genre in India, it should be on Arnab Goswami. There was a time when the entire “Nation wanted to know” from Arnab. Every night. Not anymore.

Postscript:  Malayalis tend to pronounce “News Anchor” as “News Anger”! Time for the nation to follow Mallus on this one!!!