A Decade in India

passport
tl;dr
(too long, didn’t read)

The original plan was to land into Bombay on October 1, 2005 and stay for 6 months…I’m still here 10 years later. In what can be termed the longest 6 months ever.

The long version

I landed into Bombay on Oct 1, 2005 and thought I would be back to the shores of California by April 2006. But, life had other plans for me. Just to refresh your memory, what was happening around October 1, 2005:

  • USD-INR was Rs. 44
  • Sensex @ 8634
  • DJIA @ 10,658
  • NASDAQ @ 2151
  • The big song in India was Kajra Re from the movie Bunty aur Babli
  • Louisiana was still reeling from the after effects of Hurricane Katrina (Best quote “Brownie, you’re doing a heck of a job”.)

I’ll be honest, I never expected to last 10 years in India. I used to come to India during the summers as a kid and I would always complain about things not working right, things getting delayed or it smelling. One thing is for sure, some things never change!

Cousins, friends and business associates will ask me from time to time “are you happy in India”. Living in India has it’s own set of pros and cons just like living in the US does. However, after 10 years I can categorically say yes – I like India. The reason is very simple, living in India is an adventure. You will never know what to expect and everyday there is some new thing to deal with. For some, this environment just doesn’t work well if you want things to be consistent, straight forward and proper.

Don’t get me wrong, there are days where I have to shake my head and say to myself “I moved here for this crap?” Such as the recent kerfuffle regarding encrypted internet communications. The Government of India, in their infinite wisdom wanted individuals to save their previous 90 days of chat messages in clear text in case the government requested them. To call this idea stupid would be an understatement, it’s the type of half-baked policy that many Indian government agencies roll out and then quickly back pedal because they didn’t think through the process.

Anyways, they call India an emerging market for a reason. Lots of opportunity, but also lots of issues to deal with you. As I say “if it was easy, everybody would be doing it.”

The Disconnect Between Modi and Me

modi-digital-indiaYesterday, India’s Prime Minister Narendra Modi (@narendramodi) visited ground zero for the home of many unicorns – Silicon Valley. Modi hosted a Digital India dinner to show that India wants to roll out the red carpet for companies to invest in India. Modi is an articulate salesman and its just want India needs. Someone to get out there, cold call, visit countries and get them excited about India and it’s 1.3 billion people.

When I used to live in the US, a colleague of mine at Cisco Systems would always tell me – never confuse selling with installing. In his eyes, they were two distinct activities handled by different teams. The selling was done by the sales guy and the installing was done by someone else. Of course, you really need to make sure the entire process works well or they may not buy again.

Since Modi assumed the office in May 2014 he has been busy trying to handle both sides of the equation. Traveling all over the planet in Air India One selling the vision of India and getting companies to sign on the dotted line for foreign direct investments (FDI). In India he has been battling the Congress party to get many of the needed reforms in place such as the land acquisition act and GST (Good and Services Tax).

For the uninitiated the GST bill will unify the tax code and shifts the power from the States to the Central Government. Currently, each State collects various taxes if you manufacture products and if you move goods from one state to another, it’s like moving it to another country. With GST, the Central Government handles the taxation piece and goods can freely move from state to state, which would be the logical thing to do. Of course, this creates an issue because the guys on the ground that used to get bribes to move the paperwork more quickly are effectively cut from the action.

There are many rules and regulations that need to be passed in order to get India moving in the right direction. Another example is if you are trying to open a restaurant in Bombay, you need over 40 licenses in place to be compliant. My favorite is you need a phonographic license to play music in your restaurant. You can imagine dealing with over 40 departments for running a restaurant will definitely lead to some policy violations and those representatives are all to happy to show up asking for a bribe…welcome to India.

I’ve talked to many people that run manufacturing facilities and they all say the same thing, the Make In India initiative is a joke. The disconnect is Modi is absolutely selling the vision of India but the implementation of policies to operate in India is still stuck in neutral. Fix that.

 

1 Year of Modi

narendra-modi-one-year-LIt’s been a year since Narendra Modi was selected as the Prime Minister by his party – the BJP. During the election campaign his slogan was:

Achhe din aane waale hain

Which translates into “good days are coming”. Well it’s been 1 year or 20% of his 5 year term and I would say most people feel the good days still have not arrived.

During the run up to the election, I kept on comparing Modi to Obama in that both countries were betting that a single charismatic speaker could turn around the fortunes of a country. That comparison of Modi vs. Obama did not go down well with most supporters of Modi. They kept on referring to his 13+ years as Chief Minister of the state of Gujarat and turning it into an economic powerhouse. Obama’s campaign slogan was “Hope” and everyone jumped on the bandwagon (me included) but when I look back at what he has achieved it’s pretty disappointing. It’s partisan politics as usual which means nothing is getting done.

Back in India, Modi is facing the same issue with partisan politics and that logjam is stifling the country. Two big bills Modi and the BJP are trying to pass are the Land Acquisition bill and the GST (Goods and Services Tax) bill. Every week that passes without resolution is another delay that the country cannot afford. The reasons for the delay are very much related to money. With the passage of the GST bill, the state governments no longer collect the money directly but get the money from the central government. It’s a bit like working and getting your own paycheck vs working and the money getting deposited into your parents account who in turn give you an allowance. As you can imagine the state governments that are not under the BJP government are not to happy about this and pretty much stopping every piece of legislation.

Of course, when you speak to a BJP party loyalist they will tell you the previous UPA-led government spent the last 10 years trashing the country and that takes time to fix. I do buy that argument. It’s probably like crashing your car and then expecting the repair shop to fix the car in a day.

However, what is frustrating are some of the proposed changes that have been leaked to the press. One such proposed change is that any international trip must be documented in your tax return. Yes, every time you travel you must document every expenditure down to a taxi receipt because they want to know where the money came from. I can only imagine the conversation that ensued when the idea was hatched:

Babu 1: Let’s track everyone’s international travel

Babu 2: Okay, when they book an airline ticket we can ask them for their PAN card number

Babu 1: That means we have to work with all those airlines to add another field to the booking engine, that seems like a long process

Babu 2: Okay, then why don’t we add a line in the ITR (Income Tax Return) form

Babu 1: Done.

Babu 2: Of course that means a lot more paperwork for the taxpayer, but who cares

As expected, the government has still has not decided what they plan on doing about documenting international travel even though tax returns are due at the end of July…so India.

The only people that are celebrating the good days in India are the ones that are benefiting from the VC gravy-train of money – startups, recruiters, Android developers, iOS developers, marketing firms and advertising outlets. Otherwise everyone else is still waiting for the good days to come.

India's Daughter

bbc-indias-daughter

The BBC’s documentary “India’s Daughter” is about Jyoti Singh (aka Nirbhaya) who was brutally ganged raped by 6 monsters in Delhi in December 2012. The rape galvanized the country and led to several days of protests in Delhi and other cities in India. As usual, a lot of candles were lit but nothing really changed.

This is the first documentary where I had to stop watching for a while because my anger was rising with each passing second. Anger at the culprits, anger at the system, anger at the traditional Indian culture and anger at the defense attorneys. I still for the life of me can’t figure out the logic behind blaming a women for getting raped.

Before the documentary aired in the UK, some of the quotes from the main prisoner who was interviewed, Mukesh Singh, were splashed all over the media. However, while watching the documentary I was more shocked at the words coming from the two defense attorneys. Sadly, their views on women and Indian society is what most people in the outskirts of India think as well. They believe women belong in the home to cook and clean.

Fortunately, Jyoti’s parents were progressive in their thinking and allowed their daughter to go to school and get a job in the medical system. That’s an impressive feat considering that her parents are poor and had to sell some property to pay for her education.

Anyways, go watch the documentary. You can download it from the PirateBay or kickass torrents.

Datsun No-Go Fiasco

datsun-goA couple of weeks ago the Global New Car Assessment Program (NCAP) tested the Maruti-Suzuki Swift and Datsun Go (owned by Nissan), two cars which are sold in India. Most countries have their own automotive standards board like the US has the National Highway Traffic Safety Administration (NHTSA), India has the Society of Indian Automobile Manufacturers (SIAM). NCAP is an initiative by the United Nations to make cars and roads safer around the world. NCAP usually has stricter norms in countries where big companies can push around the government officials…kinda like India.

So what were the results of the frontal impact tests for the Maruti-Suzuki Swift and Datsun Go? They deemed both cars unfit for Indian roads and sent a letter to the CEO of Nissan, Carlos Ghosn, stating he has no business selling a car that is so unsafe and should immediately stop producing the car.

The outrage in India was pretty much…not there. As expected a spokesperson from SIAM had a quote to justify the abysmal results:

Every country has its own safety requirements. Our cars are meeting safety norms set by the government. The protocol followed by Global NCAP was not designed for India and tests must be conducted based on the conditions here.

Of course, the cars tested were both without airbags and I’m willing to bet those are the most popular variants of those cars. The reality is most people will place money above their own safety in an effort to save money. And that’s the crux of the issue where SIAM is stuck, consumers don’t want to pay for expensive safety features and car manufacturers are just giving consumers what they want. But at some point the government needs to make some hard choices and enforce that ALL cars have a minimum set of safety features. If all cars go up in price by Rs. 30,000 (USD 500) then so be it, at least people will not die needlessly.

The crash reports for both cars are below:

The PDF of the Maruti-Suzuki Swift results.
The PDF of the Datsun Go results.

YouTube clip of the Datsun Go impact test:

Modi's Government Transparency Plan

attendanceWhen Narendra Modi, the current Prime Minister of India, was campaigning for the top job in India he talked about the need for more government transparency. Like many, I figured this was true to a certain extent but really more about campaign politics to get more people on his side and more votes. However, a couple weeks ago the Modi government launched attendance.gov.in – a dashboard to see government employees attendance records. I guess the idea is that if government employees work for the public, then the public should be able to track if those employees are actually going to the office.

That’s a hugh step forward for government transparency, currently it’s not available for every Indian government employee but I’m assuming over time it will encompass them all. However, just because they show up doesn’t mean they are actually doing any real work. So, as more and more services go online I’m sure the system will also be able to track their efficiency as well.

The Indian government loves using paper for everything because they probably hate trees. Actually, the real reason is because when things get heated with a particular government scam, the government officials involved cam throw up their hands and say “the files have been lost.” However, by using computers like the rest of the world you can start to track the progress of the work being done and as a by-product you can have multiple backups of those “files” – crazy right?

The attendance system is just the first piece of the puzzle and I think it’s a step in the right direction.

 

 

Spare Capacity

sharing_economyOver the past few years you might have heard the term “sharing economy” being thrown around. Which is a more consumer friendly term for monetizing underutilized fixed assets. This is different from an eBay where you have an old phone which you want to sell and they provide the marketplace to find a buyer for it.  It’s also different from Elance where you are offering your professional services to people looking for those skills. Personally I like the term spare capacity over “sharing economy” because that’s really what it is.

The startup that kicked off the “sharing economy” revolution was Airbnb in 2008 at the height of the financial crisis. Airbnb is a website that provides lodging but not using the traditional method of hotel rooms. Instead it rents out the spare capacity that an individual has such as a room, apartment, condo, house, etc… to people looking for lodging. The timing couldn’t have been better, the financial markets were in a downward spiral and people were looking for a cheaper lodging alternative and the owners of these fixed asset were looking for a way to make some money on the side.

Since then there has been an explosion in services to help people generate cash from what they own. For the taxi/cab sector there is Uber, Getaround and Lyft to name a few. The initial concept for Uber, which started in 2009, was to allow anyone with an iPhone to hail a black sedan (a generic term used to refer to the Lincoln Town Car, Cadillac Escalade, etc…). The idea was that many of these black sedans were just sitting around and waiting for their next scheduled pickup. With Uber the drivers could get connected to a system of people looking for black sedans and monetize their spare time and their car.

What really got me thinking about spare capacity is when I had a chance to listen to Aaron Hirschhorn of DogVacay. DogVacay is like “Airbnb for dogs”, it allows you to find a host family for your dog while you go on vacation for a couple days or couple weeks. That’s a great way for someone to make money on the side that loves dogs and has a house or apartment to host the dog.

The initial title of this blog post was “Boosting the Economy via Spare Capacity” which is correct but I decided to nix the title. But the premise still holds true, you can wait for the economy to turn around or work with what you have. Which explains why so many of these businesses started around the time of the financial crisis, they were ripe for people wanting to do something right now.

India is so ripe for exploiting this spare capacity. I was reading a report about transport trucks and 80% of the owners have less than 5 trucks. Which means the market is highly fragmented and an opportunity to monetize the return leg (backhaul) of the journey. The freight carriers know how to go from point A to point B, but at point B is where the could use a technology enabled spare capacity solution.

The one I always talk about is the spare capacity with my car and driver. I have a driver who takes me to the office and for most of the day he just sits around doing nothing. This is not unique to me, there are many people in the same boat as me. Of course, there are critics who say it will never work because people don’t want to rent out their car. I would argue the same thing could have been said about Airbnb when it started, “people will never give out their homes or apartments for nightly rentals…”. However the stats speak for themselves – Hilton Hotels has around 200,000 room nights in their inventory and Airbnb is already booking more room nights then the largest hotel chain in the world.