Atmanirbhar Bharat

Taming the Dragon!

This is intended to be a sequel to my last week’s blog– Return of the Dragon. If you haven’t read it, please read here.

The military standoff between India and China at the border is slowly turning into a diplomatic one with both sides waiting for other side to blink first. Marathon disengagement talks are going in parallel with coercive military build-up on both sides. And in India, we have set in motion a slew of things in an effort to “tame the Dragon”.  But what real options do we have to tame the Dragon?

I remember vividly that whenever we used to have these military tensions with Pakistan triggered by some terrorist attack, though we are a militarily and economically stronger nation, experts would say that a full blown war with Pakistan is not an option between two nuclear powered countries. At the same time, we were told that we must raise the cost for Pakistan to carry out terrorist activities, whatever that means. Since there is little economic activity going on between India and Pakistan, it doesn’t really make any difference to Pakistan even if we sever all economic ties.

Between India and China too, a full blown war is out of question considering the fact that we are both nuclear powers. The issue of longstanding boundary dispute can be resolved through talks and diplomatic efforts. But, since both countries cannot give up even a square inch of land, a solution to the boundary dispute is not coming any soon. Under these circumstances, the best option which is face saving for both is achieving Status Quo Ante!

At the same time, while pursuing diplomatic engagement to get the troops back to where we were before this round of escalation, it is necessary for India to raise the costs for China to deter it from indulging in border escalations.  This, I believe can happen only on the trade front.  On the trade front, I believe that China has more to lose than India if relations are spoilt.  And this is opposite to what the commentariat in the India media feel. That being the case, what are some of the options?

  • China is an exporting economy. For the past few years (coincidentally since Xi took over in 2012), the Chinese economy has been floundering, after years of high growth. Under the circumstances, it cannot shut business with a country like India which is poised to be the most populous country in the world soon. In 2019, we imported US$75 billion worth of goods from China. Those who say that this is miniscule compared to the total exports of US$2.5 Trillion China does, are missing the larger point. As globalisation weakens and Nationalism grows and in particular when large economies like the US, Japan and Germany are talking of de-risking from China in the wake of Covid-19, spoiling trade relations with India and denting the prospects for trade growth is the last thing China can afford. So, leverage on this aspect.
  • A quick look at the last quarter’s import data shows that Electronic Components, Telecom Instruments, Industrial Machinery, Computer Hardware and Peripherals are the top 5 categories of imports from China and take up almost 33% of total imports. As a country, we must roll out a solid, strategic plan for developing the domestic Electronic Hardware manufacturing industry. This cannot happen overnight. But can happen with a vision and a roll out plan in the next ten years. Considering the fact that the role of electronics, is on the continuous rise in every aspect of our life and every aspect of engineering, the scope for just catering to the domestic market and then emerge as a competitive, key part of global supply chains is huge. There has been talks in the past to build a globally competitive electronic manufacturing industry in India but this is the right time to translate those talks into actions on the ground.
  • Ever since, we lost lives of our soldiers in the border standoff, the cries of “Boycott China goods” have become louder and more visible. A total and real boycott of these is not neither feasible nor advisable under the current circumstances. Chinese components are a key cog in the Indian manufacturing wheel today.  Instead, whatever government does needs to be only “covert” and not overt. In short, kick off “Salaami slicing” in aspects of trade and commerce.
    • For example, for all government purchases, government cannot openly declare that it will not buy “Made in China” products. However, it can signal a preference to “Made in India” products.
    • Just last week, government made it mandatory for sellers to indicate the “Country of Origin” for their products offered on the GEM (Government E Marketplace) portal. While this was touted as a move to promote the Prime Minister’s Atma Nirbhar Bharat vision, that it was a move to identify products coming from China was not lost on trade observers. Government can do more covert actions like this.
    • For big infrastructure projects, go slow on Chinese companies. (There are many ways of doing this)

  • In the private consumption space, there is a groundswell of opinion among the common public against Chinese products. Usually this sentiment is very temporary. But now, as the government cannot take part directly in festering any Anti-China emotion, it can use the party, its loyal trade bodies and Non-profit bodies to do the job in keeping the sentiment alive for a long time. Though in terms of dollar terms, the reduction in imports in the consumer goods space may not be significant for China as a country, any reduction in demand and orders particularly with the weakening demand due to Covid-19, will affect the Chinese sellers. For example, for the upcoming festival season in India, even if the orders are reduced by half than usual for the many consumer items including domestic appliances, garments, plastics, gift items, decorative items etc. it will be significant blow.  And if that demand turns into orders for Indian manufacturers, it will also aid the economy here.
  • Creating stumbling blocks for Chinese origin businesses like more scrutiny of compliance matters is another way of covert signalling. For example, just last week, without citing any reason, India customs officials said that there could be delays in clearance of goods imported from China. Moves like these will raise the costs for those importing Chinese goods in India and indirectly act as a deterrent for promoting those products in India in the long run. Here, I would like to add that these moves cannot be sustainable in the long run. But, in the short term helps in messaging. And the Indian government doing this now is a smart thing to do. Manufacturing activity and demand in India is any way weak and tepid at this point in time. So, any delay of a few days here and there is not going the move the dial significantly. I am sure that this will be a short term prick rather than a long term change in process.

Now, there is a distinct possibility that China does retaliatory moves (we hear, it is already acting on delaying customs clearance of goods from India). But as I mentioned, today, India imports 5 times more than it exports. So, as of today, it hurts China more than it hurts India. Of course the imported goods are a part of the Indian economic activity and hence any delay or disruption affects those who are in that sector. It is a small cost to pay compared to the cost our defence forces pay with their lives at the border securing our sovereignty.

In conclusion, to tame the Dragon, we must first believe we can, punch above our weight and play to our strengths as a large consuming and growing economy. “Challenge is a dragon with a gift in its mouth. Tame the dragon and the gift is yours” goes a saying. Time to replace the word Challenge with China?

Notes from my Lockdown diary – Part 4

Lockdown continues in India and so do my notes. The way it goes, it looks like I can publish a complete book compiling all these notes! Even as the thoughts of publishing a book crossed my mind and I sat to type this blog, the wife somehow got a wind of it. “Instead of torturing people with your blogs, you are now planning for a full book? Of all the negative effects of Covid-19 we have to suffer, this must be the worst!” she pronounced.  The wife is always right. So, the book plan had to commit suicide.  Notes writing gets a reprieve.

(If you have not read the earlier parts, please read here, here and here.)

It seems there is no reprieve though, from doing the household chores for a long time. The other day, our regular household help (God bless her), called up the wife to check if she can start coming, as there was some news of things being relaxed.  She apparently felt bad to just receive her salary without doing her work for the past two months.  I could hear the wife telling her nicely not to worry and though the ghar ka Bhai is not as good as the Bai in work, she could manage with him!  And added in some measure about being Atmanirbhar and all!

It then struck me later as to why the wife made this point to the Bai. Few days ago, after I finished the J and P of BJP (Jhadu and Pocha), I asked the wife, glaring at the somewhat shining floor, “Now your bench mark for a clean and spotless house must have changed, no? And also your expectations from the Bai, no?” I know, there are better ways to fish for compliments. “Benchmark and all I don’t know. What I know is, I have to keep the Bai happy at any cost. She doesn’t break mops within two days, doesn’t finish Vim liquid in one week and finally doesn’t keep showing off her quality of work once done!” the wife quipped.  I should have known this better. Of just doing the work and not indulge in pompous self-praise!  In the married life of men, the adage “Once bitten, twice shy” doesn’t exist. It is always the case of “Many times bitten, and still don’t learn”!

Like a few days ago, looking at the many “Exercise at home” videos flooding the social media timelines these days, I started doing a hundred “Jumping Jacks” in the morning. When I started it itself, the wife warned that the downstairs people may feel like some earth quake happening. Better said in Tamil – ‘Keezha irukaravaalukku Thalai la idi vizharaapola irukkum’! I took it as her another jibe at my bloating weight and went ahead with it. Sure enough, within two days the managing committee members called to warn me of dire consequences if I continued with my indoor exercises. The end result – Not just jumping jack, even a simple pranayam has been locked down!

Last weekend was another case of not learning. Being a Sunday, I declared loudly that I will cook the lunch. The daughter who is the proverbial cat on the wall in terms of taking sides exclaimed, “But Appa, not your usual Rasam and Potato curry!” “Of course not! Today I am going to make Sambhar and thoran” I should have stopped there. I didn’t. In my zeal to impress, I added, “That too not the “podi potta Sambhar, but arachuvitta Sambhar”! Now for the uninitiated, Sambhar though is a common South Indian dish is made differently in each of the states. This arachuvitta Sambhar is a speciality in Palakkad Tambrahm households, where you don’t use the ready-made Sambhar powder but actually add the freshly ground spices and masala. So, obviously the Sambhar made this way tastes much better. It also calls for more skill to get the mix right.

Now here’s the audacity thing. The wife usually makes this arachuvitta Sambhar very well. So at home, that is the “gold standard”!  And though I make the regular Sambhar of and on, so far I have not tried or made this arachuvitta Sambhar before in my life! But then as most of you part of WhatsApp groups would have realised, everybody else is into trying and learning one new recipe or the other and sharing in groups these days! So, I also thought why not try something new and add that as a lockdown learning badge!

I googled for a proper recipe of the arachuvitta Sambhar and got into preparation of the same.  Though the recipe was in simple English, the doubts that emanated were endless, as you got down to work. For every doubt I went to the wife, I was promptly reminded that commenting on cooking is very easy while cooking is not! Did I have choice other than agreeing?  I followed the recipe and the wife’s tips to the “T” and everything was going as per plan.  Or so I thought. Blame the bad light or my reading glass, instead of reading as ¼ TSP of Methi seeds (Vendayam), I read it as 4 TSP of Vendayam, fried the same along with the other ingredients and ground into the paste. And this paste is the most crucial input for the arachuvitta Sambhar! Those familiar with the drill would by now know what will happen if you add 4 TSPs of Vendayam!

While the Sambhar was boiling, I attempted to taste it. I could realise that my first attempt in arachuvitta Sambhar has flopped badly. The Sambhar was bitter in taste thanks to the overbearing taste of Vendayam (Methi seeds)! When it was judgement time, the wife was at her gracious best when she said, “The bitter after taste notwithstanding, it was not bad for a first attempt!” I was relieved on hearing the same before she continued, “Change your blog title from ‘Notes from my lockdown diary’ to ‘Lessons from the lockdown’ and learn from them!”

Not a bad idea, isn’t it?

I am learning.

Packaging of the Package!

In India, in the past few days, most Indians or at least the urban folks have been hooked on to the television by 4.00 p.m. every day. Ever since Prime Minister Narendra Modi made a grand announcement of ushering in an Atmanirbhar Bharat with an economic package of Rs. 20 Lac Crore, not just the devil, hope was also in the detail. So, it was left to the finance minister Nirmala Sitharaman to announce the details that would not belie the hopes of millions of Indians.

In India today and probably the world over, if one has to depend on the media commentary to make up one’s mind on an issue, it is virtually impossible. On any topic, the tone of the commentary and its conclusion can be guessed without even reading the piece or watching the full clip, by just looking at the author’s name or the medium carrying it. These days, very rarely you get to read a piece that gives a balanced opinion on a topic, the two or more sides of it, the pros and cons and possibly the positive and negative impact.  So, even to the slew of announcements the finance minister has been making, the reactions have been on predictable lines. The pro-government media/authors have been only praising the initiatives while those opposing have only picked up holes in the announcements. Balanced commentary is increasingly becoming as oxymoron.

It is under these circumstances that I feel, any government today needs to be super-efficient in its communication, so that it has the intended impact on people.  The usually communication savvy Modi Sarkar, has been found wanting particularly in these dire times, when it is utmost critical to bring in comfort and then confidence to the public at large. I will explain why and will try my best to provide a balanced view.

  • First up, the intention of the government not to get bogged down by Covid, but use it as an opportunity to re-define strategic priorities for the country is welcome. To that extent, Modi’s speech on the 12th May, was pretty much on point. There was a vision and though delayed, a financial economic package to the tune of Rs. 20 lac crore,  which are both commendable.
  • The details of the package were to be released in the next few days which is what happened in the last few days, beginning 13th Feb and ending today.
  • The announcements do reveal that the government has done a lot of homework and that probably explains the delay in the unveiling of the package. Having said that, there has been issues with the content and form.
  • First the content.
    • The government in its wisdom chose to use this opportunity not to just announce the economic stimulus package but also address long pending reforms and amendments in laws which is appreciable.
    • Globally, there is an Anti-China mood and having a strategic game plan to take advantage of the changing winds is important. So, some of the measures announced I believe, are in that direction which augurs well for the country.
    • While few may understand that some measures are meant for short term remedy and others are meant for long term transformation, most of us cannot make the distinction.
    • It would have been better if the Government had broken down the announcement into two parts.
      • The first one, to just focus on the immediate short term stimulus/support measures that will “comfort” the ailing strata of the society. This announcement was the one which was widely and eagerly expected. So, what is in it for the MSMEs whose businesses have suffered badly, the urban and poor workers who are left without work and wages, and the farmers who have lost their income?  In this regard, some of the initiatives like the expanded MSME credit facility even without collaterals, free ration to the poor including those without ration cards and the Additional MGNREGA allocation are greatly appreciable.
      • There has been all around pressing calls for cash transfer to the poor as the panacea for the migrant crisis that has unfolded. The government’s view is that, it believed in empowerment rather than entitlement as a route to support poor at this stage. Also, there is a view that money transfer may lead to longer lines in front of liquor shops. There are no doubt, merits in these arguments. But, considering the current acute distress situation, it would have been good if, the government opted for cash transfer to Jan Dhan accounts of women for the next six months.  That would have addressed the lack of money and the alcohol problem in one bullet.
      • The second part could have been reforms and parliamentary actions that are more strategic that will give “confidence” to investors – domestic and foreign.  Muddling all these and choosing to announce major and a lot of minor initiatives together, has resulted in a problem of comprehension.
      • On each of the days of announcement, Twitter and WhatsApp groups were buzzing with more questions than answers, as to what all these actually meant the Aam admi. If the urban elite couldn’t make out that, how do we expect the poor who are expecting some immediate succour desperately from the government to comprehend what is in it for them?
      • If restricting the announcement to the top four or five big “new” initiatives would have reduced the stimulus to Rs.15 lac crore or something, so be it. That is better than creating a Shock and Awe with a huge amount and eventually leaving the public to just count the zeroes in it for the rest of the year.
  • Second the form.
    • In India, most of us suffer from what I call as the “More Points in Power point” syndrome. We feel that if there are more points in the slide, it is always better. In the corporate world, this syndrome translates itself into “More strategies”, More Key Actions”, “More priorities”, More slides, More everything!
    • In this case, the government too being a victim of this syndrome, ended up re-hashing many old initiatives, repeating stuff which have already been announced in the last budget. For example, the “One Nation One Ration Card” initiative was first announced if I am right in 2016. Stuff like reforming the Essential Commodities Act etc. have been touched upon in the past budget speeches.

The result is that, the Finance Minister ended up making her third budget speech for this year, the only difference being, it was in tranches. From the government’s point of view, this would have helped in deflecting the headlines for a week from the migrant crisis and other related bad news. But, I am not sure if the budget speech type announcements have helped in either “Comforting” the needy or building “Confidence” among the business community!

When marketing Guru Philip Kotler first talked of the P’s of marketing, he just referred to 4 P’s – Product, Price, Place and Promotion.  As marketing evolved, more P’s like Positioning, People and Packaging got added over a period of time. In the modern retail world, packaging got a lot of prominence due its influencing role at the point of sale. In today’s era of political communication too, I believe, even an economic or a stimulus package needs to be “Packaged” properly to reach its desired outcome.

Lest we forget, Narendra Modi has been the maiden recipient of the Philip Kotler Presidential Award.

Cartoon credit: Satish Acharya