Mersal, Mitron and the New India paradox!

For those outside of South India, a week ago, the word Mersal would have called for a detailed introduction. Today it doesn’t. The leaders of BJP in Tamil Nadu with their outbursts against Mersal, have ensured that the film became a National hashtag! I watched Mersal and frankly my take was that it was a regular masala pot boiler meant strictly for the actor Vijay’s fans.  Towards the end, Vijay gets into a monologue against the corrupt medical system in the country looking into the camera lens.  In between, he also trashes the recently introduced GST with what are clearly illogical and false arguments. Somewhere in the beginning of the film there is an innocuous line taking a dig at Demonetisation as well!

In Mumbai where I watched the film, there was no applause or whistle for the GST lines. Probably there were, in other parts of the country particularly Tamil Nadu. Enough for the TN wing of BJP to take offence and call for muting of these lines in the film. Some other leaders of BJP went further.  They dragged the religion to which the actor Vijay belonged – apparently Christianity and pointed out that, it was the reason there was another line in the film where his character says it is better to build a hospital than a temple in the village!

Inane arguments and counter arguments occupied national prime time in the week following Diwali and at the end Mersal, which would have been anyway a super hit became a super-duper hit. I’m certain that remaking rights in other languages will go at a fancy premium now. One can only get Mersalled (meaning “Amazed” in colloquial Tamil) looking at these developments!  The particular clip with the GST lines went viral that too with English Subtitles and what was just meant for Tamil Nadu is now being consumed by people all over!

The same last week we saw another “Mersalling” development. A short clip of a mimicry artiste by name Shyam Rangeela went viral on WhatsApp. In that clip, you can see Shyam doing an immaculately close mimic of the Prime Minister Narendra Modi. This act was originally part of a Star TV show – The Great Indian Laughter Challenge. But after the clip attained gigantic viral velocity, the producers decided to edit off this portion. I watched the clip and was “Mersalled” by the talent of this guy. His act of Modi was spot on, with liberal throw ins of Mitron and Bhaiyon Aur Behenon,..  just like how Modi does in his speeches.  After this development, I am sure his phone must be ringing endlessly and he has already become a mini celebrity in the highly competitive 24*7 sound bite seeking world!

Those who are tuned to the FM Station Radio Mirchi would be familiar with their very popular satire show “Mirchi Mitron”. In this satirical program again, there was a voice which could be identified with Modi having conversations on current topics with different people. Though this was popular, in a surprising move, this section went off air since early this year.

In all this, there is a clear pattern. Political satire in India is on a ventilator where pulling the plug comes easily. It looks like it’s no longer cool to take pot shots at the ruling party or its leaders. Either the party will take strong exception and flex its majoritarian muscle to come down heavily on the perpetrators of these satire (the Telugu version of the film Mersal is still languishing at the censor table) or eerily the creators develop a sense of self-censorship and exercise restraint (Like in the case of Star TV and Radio Mirchi). In any case, these don’t augur well for a New India!  Has New India’s leadership lost its sense of humour? Is political satire so damaging??

In the “Old India”, political satire was thriving and flourished peacefully. In Tamil Nadu, where BJP made a ruckus about few lines against the Government, one gentle man by the name of Cho Ramaswamy used to shred parties and their leaders with his sharp wit, that too for 60 years till his last breath last year. Being a man of multiple talents, he used multiple platforms – from Theatre to films to Magazines to TV to take his political satire to people. In his heyday, he didn’t spare any of the ruling party or its leaders. And naturally Indira Gandhi and her Congress party for most of his life were at the receiving end of his relentless jibes. Never to make a personal attack on his adversaries, Cho used wit, sarcasm and comedy to drive home the point. Later on, he trained his guns on the Dravida parties. The magazine Tughlaq was popular when he edited the same. His TV shows gained high TRPs among middle class Tamils. His plays were usually sold out. And the irony starts here. In spite of Cho’s continuous attack, Tamil Nadu was among the handful states in the country that withstood the Anti-Indira wave in the aftermath of the Emergency in the 1977 Loksabha elections. So, the people of Tamil Nadu enjoyed Cho’s satire but made smart, practical choices while voting in the elections! They used to vote for Congress at the centre and one of the Dravida parties at the state!  My point is that people by and large don’t take these political satire seriously. They do enjoy the same but make their own smart choices.

We keep hearing that the New India is about being confident, looking ahead and keeping insecurities aside.  But, it looks like the leaders in BJP do not think so. While I am not sure if the Prime Minister is himself against satire trained against him or his party, it is clear that in his party there are those who send clear signals to that effect. And that doesn’t augur well for the New India which the PM is persistently pitching for! So why not he openly invite Shyam Rangeela to perform the Mitron,… act in front of him in a public meeting in his next Man Ki Baat address???  That could be his best tribute to Cho, undisputedly one of India’s best political satirists whom Modi himself considered as one of his mentors and well-wishers!

Postscript: This is now part of folk lore. R.K Laxman had just caricatured Jawaharlal Nehru after the 1962 war against China in his own inimitable style. Did the TOI editor get a call from the PMO to demand an apology the next day? Well, Laxman got a call from Nehru himself the next day where he told him, “Mr. Laxman, I so enjoyed your cartoon this morning. Can I have a signed enlarged copy to frame?”

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Kumarakom yesterday, Vagamon tomorrow!

If there is one state in India, which has almost got its act together on tapping its tourism potential, it must be Kerala. I say, “almost” and mention Kerala in relation to other states of India. For a relatively small state, Kerala boasts of varied choices for a traveler from beaches to hill stations to back waters to Ayurveda to Culture and more.  In a strange twist of irony, for a state which still has its ideological moorings firmly tilted to the “Left”, it is “smart marketing” that has played a great part in positioning the state as ‘God’s Own Country’ over the years. To its credit, certain gaps notwithstanding, Kerala does live up to this tag line to this day.

I’m certain that there are other states which are bigger in size in India that can provide a better offering than Kerala to tourists. Karnataka, for example. And some of them have now realized the potential, tourism as an industry offers and are boarding the bus, though late.  The tourism circuit of Kerala over the years has evolved from just back waters of Kochi and hills of Thekkady in the 80’s to now Kumarakom, Alleppey, Munnar, and spots in Malabar area like Wynad, Bekal,… Outside of this circuit are a few places that are in the verge of earning their stripes. Of them is Vagamon, a hill station in the Idukki district and closer to Kottayam in terms of access, which I had the opportunity to visit last week.

Being a native of Kottayam, I have had the chance to visit Kottayam many times. It was the default summer vacation option while growing up. And with family roots still entrenched there, social visits have been a regular.  Though Vagamon is just 40 Kms from our place in Kottayam, we never thought of exploring this location in the past. Not just familiarity, but proximity also at times breeds contempt isn’t it?  Having been hearing of this place as an emerging hill station, we decided to visit Vagamon and spend a night there during this trip.

For long, Vagamon was mainly known for its milk – Vagamon milk is popular in the surrounding areas. Like all hill stations of India, though the British were the ones who discovered this place, I understand that it is the Christian missionaries in Kerala who developed Vagamon and among the first to live there. A Dairy farm that still exists was the early business activity to flourish and hence the popularity of Vagamon milk!  So one can say that it is a place where honey and milk literally flows! The road leading to Vagamon from Kottayam is patchy having been battered by the recent heavy rains. For a Mumbaikar used to pot holed roads resembling craters of the moon, they were still bearable, but then Mumbai is no bench mark for a tourist destination! As you near the place, the scenic beauty of the place and the accompanying chill weather just enthrall you.  The views on the way give you an idea of what to expect.

The resort where we stayed (Treebo Adrak Summer Sand Resort) is right at the heart of the town and has fantastic views. Located next to the Pine Valley which is one of the places of tourist interest, is neat, clean and very well maintained. The property is great and picturesque. However, for such a nice property, the staff is inadequately trained and is marred by slow and laidback service. We see this dichotomy in many small towns in India.

All places of visitor’s interest are in a span of 5 Kms which include breathtaking viewpoints, idyllic Tea estates, the Dairy farm, the Pine Valley,… and could be covered within few hours. Being a fledgling tourist destination, the infrastructure is just developing. One of the popular viewpoints has now become a paragliding point where frenzied construction activity is going on. I realized that as of now, Vagamon is more of a one day outing place for those nearby during holidays and long weekends.  The result – all the points of interest were overcrowded and vehicles parked alongside the narrow roads clogging the approach. The Prime Minister’s Swachh Bharat Abhiyan was tottering, with people who bring food along eating alongside roads and littering the place with plates, cups and left over food! This was sad for a state which I always thought was in the forefront of Swachata. Though declared a plastic free zone, plastic could be freely seen strewn in places where people thronged.

The 3.5 hour drive back to the Kochi International Airport, half of which is through hilly terrain is quite scenic. Airtel 4G connection of mine failed the test, as in many places my phone was out of coverage. On the other hand, our cab driver’s JIO connection passed with flying colours when we need to access Google maps. Not to mention of the equally effective cell phone coverage of BSNL in those far off areas! The drive through also gives an insight on why the “Left” is so well entrenched in Kerala.  Red flags flutter in regular frequency in a gap of 10-15 Kms even in those remote areas.  Even in a non-election season like this, there was a nukkad meeting going on being addressed by a spirited leader with at least a 100 keen listeners!  But one cannot dismiss the flowering of the Lotus here and there.  In fact, the day we were leaving Kochi, BJP was kicking off its “Project Kerala” in Kannur with Modi as the main face in posters alongside the Kerala BJP President Kummanam Rajashekaran, who incidentally resembles Modi in some angles. Yet, it will take years of labour to dislodge the Left from probably its last bastion in India!

With Nature in abundance, Vagamon has immense potential to be the next Munnar or Kumarakom of Kerala. Additional place of interest for Westerners is a place called Bharananganam which is on the way from Kottayam to Vagamon. It is the abode of Sister Alphonsa who was the first woman of Indian origin to be canonized as a Saint by the Catholic Church.  But, to get into the God’s Own Country circuit, Vagamon needs to be developed in terms of its infrastructure. Incidentally, the same day I saw a quote of the new Central minister for Tourism Alphons Kannanthanam who hails from Kerala, talking of Vagamon in the same breath as Munnar as an area to focus for tourism development.

The jury is still out as to whether development happens first and then tourism picks up or the other way about. But there is always a tipping point. Like for Kumarakom, when in the last week of December in the Year 2000, the then Prime Minister Vajpayee decided to ring in the New Year at Kumarakom.  The musings of Vajpayee from Kumarakom still reverberate in the air! Similarly, another event that catapulted Kumarakom to its today’s glory was Arundati Roy’s Booker prize winning novel “The God of Small Things”. Set in the village of Aymanam which is at a calling distance from Kumarakom, the novel made many Western tourists include Kumarakom part of their itinerary!

May be Prime Minster Modi, who in his last Mann Ki Baat address called upon people to explore new destinations in India to boost tourism, could emulate Vajpayee and take a break at Vagamon during Diwali! Who knows, in that calm, cool and scenic setting far away from the political nerve centre of Delhi he may discover some new ideas to bring back John Maynard Keynes’ “Animal spirits” of the country!!!

Demonetisation and it’s after”math”!!!

Ever since the RBI released its Annual report 2 weeks ago, Demonitisation (DeMo) is back in the news. And with its eminent Ex-Governor Raghuram Rajan now in India to promote his book, DeMo continues to hog the headlines and Op-Ed pages. The analysis of DeMo swing from scathing criticism of being a “big mistake” by the likes of Ex-Economic Advisor Kaushik Basu to calling it a “huge success and a course correction” by the likes of Gurumurthy, the veteran commentator on public affairs. So, as it happens in most issues these days, “for every spin there is an equally effective and opposite counter spin”! And where you stand on an issue depends on where you stand on the ideological divide.  On social media, it was a hashtag war between #DeMomenisationsuccess and #DeMonetisationfailure!

Ten months on, based on all the data available (99% of DeMo notes coming back to the banks) it seems that DeMo has not helped in sucking out the black money. In retrospection, I wonder how the government expected anybody in India to give up their prized possession (currency notes in this context) at all in the first place. In my own experience, when coming out with marketing promotion programs for the trade, we usually take twice the time for foolproofing the program compared to conceiving the program itself. This is from the wisdom of previous programs over the years where, we found that the Indian brain works over time always to find loop holes/gaps in any program announced. So, in a sales promotion program for example the trade will end up earning the incentives while you never achieve the increased sales objectives!

This is what happened in DeMo as well. If you remember, the day DeMo was announced, the chattering class’ verdict on WhatsApp group and dining area discussions was that it was a “Master stroke”! While the middle class and upper middle class folks who didn’t have unaccounted cash had to just find ways of beating the lines to exchange their notes, the ones who had, started cranking their brains. The result was the everyday tweaking of the rules and adding more terms and conditions for currency conversion. The then Economic Affairs Secretary Saktikanda Das became a celebrity overnight, thanks to his daily media briefings on what else – change in rules!

By now, it is clear that notwithstanding the anti-DeMo commentary of economists, there was overarching, tacit support for the DeMo move from common public. Inspite of loss of business for traders, loss of jobs for casual workers and loss of income for farmers the Note Bandi didn’t evoke much unfavourable mood towards the BJP so far. I am not sure if it will, from now on. What explains this paradox?

Many of the commentators have alluded to the human trait of Schadenfreude to explain this. That the poor were happy because this was one move which affected the rich and privileged and that the Prime Minister Modi had the guts to do so. This is a good possibility. But there could be more to this as well.  Within days of the DeMo announcement, the initial despair among people who were caught unawares with a lot of unaccounted cash turned into a relief, when they found ways and means to deposit the same into the bank. Among many ingenious ways, one was to tap into their own staff and workers to distribute the cash and get them deposited into their bank accounts. A report said that by Dec, the deposits in Jan Dhan Accounts peaked to Rs.74,609 crore! As of Sep, it was just 4,273 crore! The number of Jan Dhan accounts itself went up 5 times in this period!  My guess is that, in this process of conversion through the conduit of using others’ accounts, there must have been a cost.  The government must have lost an opportunity to earn taxes on the unaccounted income but those who had a lot of unaccounted cash ended up incurring a “conversion tax”! And I am certain that those who were witness to the rich incurring this tax felt certainly happy that DeMo was an equalizer of sorts. And not just being a witness, there would have been many who would have benefited from the sudden largesse of their masters as well and got their share of the “conversion tax”. So, instead of the government collecting taxes from the haves and distributing to have-nots by way of welfare measures did DeMo make it as a Direct Benefit transfer from the rich to the poor without the government in between?  Probably.

It’s evident now that the DeMo move has been a rocking political success for the government. On the economic front, though the objective of sucking up the black money has not been achieved directly, certain fringe benefits have accrued. Like reduction in cash circulation, increase in Digital transactions, and increase in bank deposits,…  These may leave the country in good stead in the future.  In the short-term however, the country skipped its GDP beat.

So when one does the after”math” of DeMo, it may well be like the popular “Elephant and the Blind men” story. For some, it’s a failure. For some, it’s a success. For some, it’s a partial success and for some it could be a partial failure. I would like to go with Rajan’s assessment that the short-term economic losses far outweighed the long-term benefits.  In hindsight, one is always wise. Other times – otherwise!

Lal Krishna Narayana Murthy!

On the 18th of August, just as trading in the bourses started in India, Vishal Sikka, CEO and MD of Infosys decided to extend his working day sitting in San Francisco till late hours to announce his resignation. Within minutes, his farewell note to his staff found its way to the media and a more detailed and emotional post was up on his personal blog. The “Moving On” post happens to be his first post in 15 months!!! The Infy scrip which was faring well the last few days in anticipation of the “buy back” announcement on the 19th, took a battering and ended up 10% down by end of the day. And during the course of the day, Infy Board stood behind Sikka and sort of blamed N.R.Narayanamurthy (NRN), for his dogged, open insinuations in the last few months which it claimed eventually led to Sikka’s exit. In the end, the self-proclaimed Kshatriya warrior capitulated as conspiracy theorists would add in good measure “to Brahminical dogma”!!!

Following this, water cooler conversations in offices and WhatsApp discussions were around this story as if the whole of India is invested on Infosys. But then, why not? For long, Infy was the bellwether for the Indian IT Industry. For Indians, It was a proud success story in post liberalization India.  In the success of Infy, there were many sub texts. The arrival of India in the global scene as a software power. The rise of Bangalore as another Silicon Valley. The ascent of the Indian Middle Class. The revenge of the Brahmins post the “Mandalisation” of India and so on. Some of these sub texts – real and some just façade as time would tell later!

Those were heady days for the Indian Software Industry and Infy was its leading beacon. There was not a single day in my memory when there was no positive news about Infy in the pink papers. Infy led the way and other IT companies followed. Visit of world leaders to India were not complete without a Tee off at the Infy golf course in Bangalore. Same for head honchos of global corporations.  A visit to the impressive campus in Bangalore was part of the itinerary for the chairman of Brother Industries, Japan – my previous company on his maiden visit to India. I heard later that his positive impressions in that visit hastened Brother’s investment plans in India. As Infy basked in that glory, NRN was inseparable. Slowly and steadily, beyond his business and his association with Infy, he became the conscientious voice for the country.  So much so, when UPA was searching for a successor for Abdul Kalam as President of India, an opinion poll threw up NRN as a strong candidate.

Though Infy was a story of 6 middle class entrepreneurs, the story of NRN was most visible. As the senior most founder he ensured his imprint was ubiquitous in Infy. When he sacked the other Murthy (Phaneesh) – till then the highest paid employee in Infy and head of Global sales on grounds of sexual harassment of a female colleague, NRN’s personal stock went up. “The day flying Business class reaches me to my destination 5 minutes earlier, I will shift from Economy to Business!” – This was NRN’s response to the question on why he continued to fly Economy on business trips at the top of his career at Infy.  NRN’s decree that the founders will not hang in and will hang up their boots at 70 was seen as a revelation in India Inc, where founders seldom retire. And when he soon walked the talk by stepping down as CEO for Nandan Nilekeni, it was seen as one of a kind of move. Till this point NRN had not made one wrong move. But after yesterday’s story, most of the ire got directed on NRN.

I was skeptical to the extent of being cynical when NRN chose to return to Infy briefly that too with his son in tow. Later, after anointing Sikka as the CEO and MD after an extensive search, when NRN stepped down from Infy for the second time, one expected that he would walk into the sunset quietly. The events in the last few months where NRN almost behaved like an activist shareholder frequently venting his ire on the affairs of Infy through the media shows that he too is a mere mortal. To be fair, I am certain that NRN would have tried to represent the concerns of employees and shareholders over corporate governance at Infy privately to the board before going public. That he chose to resort to the media means that there is more to this than meets the eye.

Cut to Goa, June 2013. The BJP National Executive was meeting in what was not another routine Executive meet. In the meet, it was clear that the path will be cleared for the then Gujarat CM Narendra Modi, to become BJP’s PM candidate for the 2014 Lok Sabha polls. Lal Krishna Advani, BJP’s tallest leader and architect of its growth till then, chose to skip the meeting.  He then subsequently sent in his resignation letter when Modi was chosen to lead the party’s campaign. Ironically it was the same Advani who played a stellar role in shielding Modi on his role in handling post Godhra riots in the very same Goa in 2002! Even after the spectacular victory of BJP in the 2014 polls, Advani did not have one word of wholesome praise for the chief architect of the win namely Modi but chose to credit “All party kaaryakarthas”!!! And in many public appearances along with Modi in the last 3 years, he hasn’t displayed too much benevolence in accepting Modi as “the” new leader for the BJP.  When the history of BJP is written, Advani will certainly occupy a significant space unless otherwise he chooses to become a footnote with his continued petulance.

That brings us to the point of the “Art of letting it go”!

Whether it is NRN, Advani, Mulayam or Ratan Tata it demonstrates the fact that stepping down, giving it up and walking away into oblivion doesn’t come so easy for humans.  But for forced reasons like health or regulations, can and do leaders walk into the sunset gracefully and remain there? Pranab Mukherjee, the recently retired President of India when asked what kind of legacy he would like to leave he said, “Don’t want to leave a legacy.  Will melt into the mass”!! Hope Lal Krishna Narayana Murthys of the world heard that.

The “Art of letting it go” is certainly fading and it’s time we make it a “Science”.

 

 

 

Mera Swachh Bharat Mahan!!!

It’s now 4 years since the Prime Minister Narendra Modi espoused the dream of a Swachh Bharat during his 1st Independence Day speech. “A clean India would be the best tribute India could pay to Mahatma Gandhi on his 150 birth anniversary in 2019,” said the PM as he launched the Swachh Bharat Mission.  On 2nd October the same year, the Swachh Bharat Mission was launched throughout length and breadth of the country as a national movement. After the initial dust and noise and just when we as common citizen almost forgot about the mission, it was back in news recently. All for the wrong reasons.

This time over a set of hoardings which were put by the Railways ministry in Delhi Railway station to educate people about the need to pick up trash and use dustbins.  Meant to promote the Swachh Bharat drive, the hoardings showcased apes evolving into cleanliness conscious humans leading up to Dalit icon Dr. Ambedkar using a garbage bin.  Enough for the most productive factory in the country today namely the ‘Outrage factory” to go over drive on social media to insinuate Railways and the Government of lampooning Ambedkar! To be fair, the campaign also used other icons like Bhagat Singh, Mahatma Gandhi and even the latest craze in town – Baahubali in the same context.  The hoardings have been pulled down since then. A classic example of how in India we routinely miss the woods for the trees and chase wrong priorities. Instead of an outpouring against this, probably an assessment of how the programme is working and coming up with ideas to make it work could have done Ambedkar proud and the PM happy.

On the eve of the Prime Minister’s next I-Day Speech for which he is crowdsourcing thoughts, I would like to look at how the Swachh Bharat Abhiyan has fared so far.  First up, there have been many positives since the campaign kicked off:

  • The overall sanitation coverage in the country as per reports has increased.
  • Few states have become “Open Defecation Free” – a clear target the Prime Minster outlined of making the entire country “Open Defecation Free” by 2019.
  • Toilets are being constructed in towns, villages and even in cities. Even in Navi Mumbai I have seen a few E – toilets which have sprung up along the highways since the campaign started.
  • Dustbins have been placed in many places though they may not be sufficient.
  • I hear that in Varanasi the Ghats have been cleaned and they are spic and span now thanks to the efforts of an individual – Temsutula. Similarly in Mumbai, different Citizen’s Movements have taken up cleaning of the Versova Beach and now other beaches. I understand that the Centre has picked the Versova Volunteer model for cleaning up many beaches across the country.
  • We frequently see from the Railway minister’s twitter handle pictures of many “Super Clean” Railway stations from across the country.

So far so good. But just as I suspected, while the Prime Minister’s initiative made cleanliness part of our country’s discourse, it has not been into our conscience.  In Mumbai, the notorious paan spitting out in the open has not stopped nor it hasn’t come down even. In my own office building, which got a new coat of exterior paint few months ago, one cannot miss the red splash of paan juice in the corners of stair cases when you decide to take the stairs down. Or for that matter, endless cigarette butts right under the “No Smoking” sign.  Banana peels are back near the roadside corner shops. Sights of garbage overflowing onto the street from the common garbage bins and the overbearing stench of the same are regular now.  Empty packs of Frooti, Lays chips and the like lay strewn all over the place where people gather for leisure and this is from Kashmir to Kanyakumari.

If Swachh Bharat movement is about cleaning and cleaning alone, I would admit that it is probably beginning to work.  But if you look at the movement as a mission to “Reduce” cleaning in the first place then it is tottering.

If one looks at Japan, (a country, you could say, that suffers from a neurotic disorder of maintaining cleanliness) for pointers, it is interesting. Strange as it may sound – they have fewer dustbins in public places. The underlying thought being – “Why litter in the 1st place?” Of course where they have bins, it will be a dozen of bins in rainbow colours to separate different types! More importantly, the need to clean your surroundings is ingrained as part of school education. I’m told that in Japanese schools there are no Janitors. Instead school children are taught and encouraged to do cleaning themselves. Thereby an important lesson is indoctrinated which is “If you don’t want to clean, don’t litter!!!” Tidiness in Japan is not a result of billions of Yen spent on cleaners, dust bins or Clean Japan campaigns. It’s due to people following one fundamental principle – “Don’t throw garbage in the open”!

Japanese children cleaning in schools

Back to our country, it is clear that any amount of Swachh Bharat Gyan cannot make the present and older generations to make an attempt to stop littering in the open. Our hope only is with the next generations. May be we need to follow the Japanese model of moulding our children early by making them clean their surroundings at home and school daily. So that they understand the premise that if they don’t litter they don’t have to clean. In my earlier posts on this (read here), I had mentioned that Swachh Bharat Abhiyan is not about cleaning but to cease the need for cleaning.  Well, in order for the Swachh Bharat Dream to come true, let the next generation actually do some cleaning. Time for a new slogan – “Mera Swachh Bharat Mahan”!!!

Our Tryst with GST* – * Conditions apply!!!

GST – The Good and Simple Tax, as our acronym lover PM touted during the launch on 30th June is finally a reality after almost 11 years of intense labour. This along with FDI in retail must count among the most awaited reforms in India by India observers.

So, the advent of a single tax which subsumes, at last count, some 17 different taxes and myriad cesses certainly must count as the single largest Tax reform undertaken in India. Not to forget the application of tax only on value added in the chain. Along with this simplification, the fact that goods from one state can pass thro different states without wait, harassment and accompanying corruption portend a new beginning for trade in our country. In the pre-GST era, logistics and warehousing strategy of companies have been dictated by tax compliance rather than supply chain considerations. In the sense, the number of warehouses and their size would be driven by billing point concerns rather than geographical spread of demand. In the GST era, warehousing will depend on supply and demand equations and not taxation points. And hence like in most developed countries, companies will get to run larger, integrated and fewer of warehouses. Development of more efficient logistics hubs, warehouse consolidation and ensuing FDI will become a reality soon. This is a new dawn for retail, supply chain and logistics industry.

So with all the seemingly obvious benefits of the GST regime, why is it that there is still some cynicism and negativity from different quarters about the move? Why is P. Chidambaram once the prime mover of GST when UPA was in power, cautioning all of us to “Get Set for Turbulence”? The GST in the current form is nowhere close to the one which was originally conceived. Rolling stones probably gather no moss. But a rolling GST gathered whole lot of moss on its way from the wisdom of empowered committees to standing committees to GST council. The current version of GST is a product of what I call “co-operative federal bullying”. The result is instead of the One Nation, One Market, One Tax premise, what we have is One Nation, One Market, One Tax name, 3 Sub Tax names, Multiple Rates, Few Exceptions, Some flexibilities and with an *. * – Conditions apply.

Being part of the GST council, the states in their own wisdom, ensured that we as a country don’t get away with a simplistic tax which may throw many Chartered Accountants out of jobs. However, I understand that without having a set of different GST rates (in some cases different rates for the same category as per user segments) or without excluding items like Petrol, Alcohol, Real estate,.. consensus could never have been built in getting GST off the ground. UPA’s failure to make GST a reality during their regime stems from this. So the choice before the centre was to accept what the states demand and bring about a not so ideal GST or wait endlessly for a few more years may be decades before some major economic crisis forces all concerned to come to an agreement on the ideal GST. From that point of view I agree with the stand taken by the Govt. to bring in GST in its present form with its shortcomings, with a hope of ringing in the changes in the coming years. Kudos are in order hence.

The Congress party which at every opportunity reminded us that the seeds for GST in India were sown by the UPA, however, chose to be petulance personified and boycotted the GST launch. While rubbishing the GST in its present form its main “anGST” against GST was that it is being rushed thro and should be delayed by 3 months till September. We all in India know that in our country whatever may be the preparatory time available, things get accomplished at the last minute. If we get more time, we stretch our deadlines accordingly. That if we have more time, we will be more prepared and can do trial runs before actual roll out,.. exists only in theory. Don’t we see in our Indian weddings, folks tying up some loose ends literally till the baraat arrives and continue to do so as the wedding is in progress?  Finally when the wedding gets over, its smiles all over.  So even after the GST roll out, there will be glitches, teething problems and surprises which I am sure we will find ways and means of getting over. Pushing back by another 3 months is not going to make things any different.

It must be commended that this Govt. stuck to the date of July 1. It would have been very easy for the PM and the Govt. to throw in the towel and put off the launch by a few months. But then, there are other implications. Come Oct. it is the peak festival and hence business season in India. Does It help if the roll out happens when India is in the midst of its biggest Annual economic cycle? Will it help if GST is launched in Jan. in the final quarter of the fiscal year???

The ruling party, the BJP counts traders as its important traditional support base for the party. That the party still decided to go ahead with the tax reform which professes maximum disruptions for this group is a significantly courageous move.  In India economic reforms have always been carried out under duress; when push comes to shove. The heralding of GST must be the 1st major economic reform brought in when not under any kind of stress but just to ease up things for the future. This certainly conjures up the arrival of Acche Din for our country.

Still our penchant for complicating things comes to the fore here as well.  Though the GST collections have to be shared between the state and the centre, could it not have been done at the back using technology rather than coming up with 3 variants like SGST, CGST and IGST??? Does the Anti-profiteering clause make sense? Will not competitive economics eventually drive pricing??

GST is indeed a Good and Simple Tax. So there is nothing like a good or better time to introduce the same. But, we should not forget that this is India and we are Indians. So, conditions apply.

Modi Sarkar and the Gita Saar!!!

As Modi Sarkar completes 3 years in office this week, the media is abound with pieces on the hits and misses. Depending upon who the author is and his/her political leanings, the pieces portray either a Glass Half Full or Half Empty picture. Very few have been honest portrayals.

As Aam Aadmis, it’s but natural that our opinions are influenced by what we read/see in the media. So per what we see these days, the economy is doing rather well – India is the fastest growing economy in the planet. The stock markets are on fire and at historical highs! India’s consumer price Inflation stands lowest since we started publishing consumer price index in 2012. In the past weeks the Rupee has been strengthening Vs. the Dollar though this is a double-edged sword.  FDI has been seeing record inflows.

And if you go by some of the pronouncements of the Govt. there again the last 3 years have been very busy for the Govt. of India. Infrastructure projects mainly on Roads and Railways have been unleashed like never before. Govt. has been kicking off programs like Make in India, Skill India, Start up India,..,.. to increase the employment and employability across sectors. Price control though a very socialistic intervention has been resorted to particularly in the healthcare sector to prevent fleecing of the common man. Programmes like Jan Dhan Yojana, Swachh Bharat and Aadhar have been given a fresh impetus right from the top.

In the 1st 18 months, the Prime Minister took it upon himself to travel to countries that mattered to signal the change and restore confidence on the India Story. The results have been emphatic. World over, it is now acknowledged that this Govt. under Modi is on a crucial transformative path and probably this time this is for real and long-term. (In the past India always flattered to deceive).  The inflow of FDI and announcements of various projects in Mfg. and Infrastructure are there to see.

So far so good.

While this is the flavor in the media by and large, it will be interesting to know what the sense on the ground is. If one goes by electoral results as in a democracy it is the barometer of an incumbent Govt.’s performance, there are no two ways about Modi Sarkar. By and large in all types of elections, Modi and his government have got a thumbs up from the electorate. In Economic times’ survey of the Indian Industry, the Industry has clearly thrown its weight behind Modi Sarkar.

In Britain, mid-term opinion polls ask a simple question to respondents: “Are you better off today than you were three years ago?” It would be interesting to know the outcome if somebody does a similar mid-term poll in India to understand what’s in peoples’ mind.

My hunch is that the response will be a farrago of sorts. First, that the conditions on the ground are yet to change. And, second that still the people are happy with the Govt.’s performance.  And yet this is fully understandable. For all the economic indicators and the efforts which have been put in by the Indian Govt. so far, on the ground, results are yet to show up. The fastest growing economy or the influx of FDI or the flag ship programmes kicked off by the Govt. or the massive increase in infrastructure spending and the many other initiatives are yet to result in changes in the life of the common man. In terms of jobs/increased disposable incomes to workers, farmers, middle class,..  And yet no one seems to complain. People still have immense hope on the Prime Minister and his Sarkar.

This is where the Saar (essence) of Bhagavad Gita comes in. In Chapter 2, Verse 47 of the Gita, Lord Krishna says, “You have the right to work only but never to its fruits. Let not the fruits of action be your motive, nor let your attachment be to inaction.”

representative visual

The public so far seem to be satisfied as long as their Govt. is earnest in their intentions and seen to be carrying out their job sincerely. The hope being that this is still “Work In Progress” and results will follow sooner or later. The common man’s response to Demonetisation is a good example of this behavior.

It looks like the Govt. is also taking this Gita Saar seriously and moving forward on a mission mode without getting too much flustered by the noise around it.  I must say here that while this is true for most of the ministries, there are some which have not taken the Gita Essence seriously. I am not sure if the Smart City project has gone beyond announcement of a list of cities. No one knows what the Ministry of Agriculture is up to in transforming the agricultural landscape which has been fraught with draught related woes at times and flood related at other times. That is to name a few.

So when the PM does a review of the performance of ministries on completion of 3 years, we hope he cracks the whip on those who have not taken their mission seriously. And reminds them of their Karma and another gem from the same Gita which says, “The meaning of Karma is in the intention. The intention behind action is what matters”. And declares,  Abki Baar Gita Saar!!!