Anmol Ratan of India - Mr. Ratan Naval Tata

I had arrived at Frankfurt airport early in the morning on 16^th December, after a long trans-Atlantic flight. After settling down in the transit lounge with my diet breakfast, pulled out copies of FT & IHT from the newspaper shelf, the two newspapers that I usually like to spend my time with while in transit. I was pleasantly surprised to find this article on Mr. Ratan Tata, yet again, in FT: 
Chai with the FT: Ratan Tata

Mr. Ratan Tata is much more visible in the UK press rather than the Indian press - call it just co-incidence or the sheer ignorance of the Indian media. James Crabtree of FT Mumbai Bureau has a knack of beautifully weaving the mundane into the extraordinary to make an interesting article. This article did not have any specific insights, just a chat over a cup of tea; but I kept thinking about it for a long time on board my onward flight back home. It was a mixed feeling of national pride and happiness; especially after reading a lot of negativity about India in the recent international press, thanks to the sleepy governance, absolute policy vacuum, ineffective law & order and above all rampant corruption.

I arrived home and the next day I read that Mr. Ratan Tata had to send in a written apology to PM for his comments in an earlier article in FT linked below:

Tata raps India for driving off investment
I went through the article once again but I did not find anything at all in his comments that could even remotely qualify for an apology from him. On the contrary, I thought it should be the PM who needs to tender a public apology to the people of this country for the mess that we are in today.

There is already so much material available about Mr. Ratan Tata that it would be futile for me to add the repetitive quotes, texts and incidents. However, I would like to add that in my view, he is one of the very few “Level-5” leaders of contemporary India. (Level 5 Leadership concept by Jim Collins is beautifully explained HERE, courtesy Mr. Sanjeev Sabhlok of Freedom Team of India). 

Mr. Ratan Tata has been and will always remain a great source of inspiration to me personally, ever since my first job at erstwhile Tata Exports, now Tata International. 

I am sure there are thousands of professionals like me who have followed him very closely and learned from his two decades of leadership style at Tata Sons. 

Mr. Ratan Tata did not have it easy and smooth though, especially during the first decade of his career as head of Tata Sons. Here is one article that chronicles some of his rough-rides:

Ratan Tata: When the ride got rough
The various controversies and business challenges faced by the group during Ratan Tata’s tenure

Mr. Ratan N. Tata takes a bow after two decades of a very successful Captaincy. It is sad to see an icon like Mr. Tata retire from active career. I am sure he will continue to inspire the people of India by doing stuff that interests him personally and that eventually translates into Nation Building!

On this last working day of 2012, as we come to a close of the year, this blog-post is offering heartfelt respects and bidding good-bye to one of the most successful business leaders this nation has produced - truly an Anmol Ratan.

See you around soon, Mr. Tata!

Here is wishing everyone a Very Happy & Prosperous 2013!

RIP Cricket - it is Tricket now!

Six international umpires are allegedly willing to fix matches for money. (Reuters)

Cricket sting shocker: Pakistan, Sri Lanka umpires ready to fix matches at T20 World Cup
THE INDIAN EXPRESS, New Delhi, Mon Oct 08 2012, 22:24 hrs

Cricket stung again, this time umpires 'caught out'

TNN | Oct 9, 2012, 05.03AM IST

Question: Do we really need sting operations, blaring over TV channels and the screaming headlines flashed over front pages next morning, to prove the obvious?

What once was a fine game called Cricket has since degenerated into what I call as “Tricket” - A reality show, a Tamasha – sheer waste of precious time. Since last few years, probably after the first season of IPL, I have stopped watching this show, just like every other reality show.

But there are millions of innocent cricket-loving-fans across India, who follow the game with their heart and soul. Pouring out their deepest emotions, they discuss and debate the fine details and nuances of every single game; whichever the format, doesn't really matter - Test, 1-Day, T-20. These discussions extend over long hours, before and after every match, at dinner-table, coffee-breaks, bars and restaurants and more lately, over social networking sites. Blissfully unaware and ignorant of the politics and commerce that would have already decided the course of the match, the series and the awards – until such sting operations are flashed out.

With due respect to millions of cricket-fans, we are all being taken for a jolly good ride in this make-believe age of reality show called Tricket. Everything that revolves around the core (The Match) - the controversies, the gossips, the parties, the cheerleaders, the press-meets, including the sting and expose; are all clearly manufactured and choreographed by professional event managers; to make a grand spectacle out of the fine game that once was Cricket, into a Reality Show that I now call Tricket. 

But looking back last 2 years or so, there have been very serious corruption and match-fixing charges involving international players and now with this latest one, even the elite panel umpires - I wonder what else is left of Cricket. During this rather quick transition from Cricket to Tricket, one thing that has suffered the most is the spirit and the purity of game. Hence, I replaced the C of Cricket by T, for Tamasha.

Sad that Cricket is long gone. And Tricket is left with one fan less, for sure.

FDI - The Final Analysis

FDI in Multi-Brand Retail saga has played out over the last one year and finally ends up as a diversion-tool to the Coal-gate scam and a face-saver for Dr. MMS.

Volumes have been written and hundreds of hours of air-time spent endlessly debating the decision. Arguments For V/s Against the decision always depending upon the ideological background they came from – Left, Right, Right of Center etc. This post is not about the debate on FDI - it is about the Final Analysis, from the perspective of a common-man, keeping it simple yet relevant to the issues directly affecting the common-man.

All major stakeholders, especially the ones who are heard and talked about in Mainstream Media, have obviously taken the stand on FDI in multi-brand retail depending upon their respective stakes and interests involved. A week after the surprise roll-out of the FDI policy last Friday, 14^th September 2012; the jury is still out and opinion hugely divided on the decision of FDI in Multi Brand Retail.

I noticed the discussions & opinions against FDI largely revolving around poverty, poor Kirana stores, farmer suicides, rural-urban divide etc. are liberally dished out. Perfect recipe to generate a particular “Popular-Sentiment” among the common-man. These are mostly used as “emotional-fodder” to mislead and influence the common-man to believe that FDI is basically anti-national and anti-poor. Needless to mention that none of these points are supported with any data or valid reports. But there is also a growing segment among Aam-Aadmi that would like to make an informed choice and opinion – and NO, they are not anti-national or anti-poor.

For clarity and ease of understanding the real impact of FDI in multi-brand retail, let us break the discussion into two major segments – Political & Socio-Economic.

POLITICAL: It would be wise not to waste precious space as it is abundantly clear, beyond any doubt, that all of the major political parties have played “politics” over the issue. They were least serious about the economy, the food prices, the farmers, the Kirana stores etc etc. I will quote here just one article from Indian Express dated 30^th November 2011, and that would be good enough to conclude this part: 10 years ago, NDA had pitched for 100% FDI in retail sector.

SOCIO-ECONOMIC: Let us now analyse some of the popular “senti-meters”.

Provision Store, Photo: K.V. Srinivasan THE HINDU 

Kirana Story: There are about 8 million Kirana (Provision) stores across India. Out of these, about 5-6 Million are located across those parts of India NOT covered under the FDI policy norms, that is, they are outside the limit of the 50 odd cities with a  minimum population of 10 Lakhs. But hold on, that does not mean the remaining 2-3 million Kirana stores will get completely wiped out. FDI in Multi-brand retail will directly hurt but only the inefficient and the least competitive domestic retailer (this includes the Kirana store as well as the organized large retail stores) and force them either to improve or perish. This is the only collateral damage, if you will, as a direct result of international competition. As a consumer, I treat this as highly desirable for the overall economic health and social good. These inefficient and unhealthy retail entities would not be treated with any brute force or muscle power but by simply offering Competition and Choice in the hands of the end-consumer. So the consumer eventually enjoys a more efficient and competitive Kirana deal. Why should this logic be so difficult to crack?

Farmers story: Before we even talk about any perceived threat or negative implications of FDI affecting the farmers, let us pause and rewind 60 years; let us do some introspection and ask ourselves - how many farmer suicides we have been able to prevent with the help of our Socialist policies and protected markets? Let us try to find one single valid report which confirms that farmers are happy selling their produce to APMC (agricultural produce marketing committee) yards. Opposing the FDI decision would simply mean the status-quo be maintained and our farmers continue to lay their lives for the argumentative and socialist Indian.

Quoting here from an article linked: Consortium of Indian Farmers Associations (CIFA) Secretary General P Chengal Reddy welcomed the move saying that it would help in raising the income of the farmers.

Voices against the FDI decision have consistently failed to substantiate their views with data and reports against the FDI reforms - no case-history, no past-performance data, no examples; against FDI. Most of it has been worrisome forecasting and imagination. Thanks to the flawed and  “mixed-bag” of Socialist policies over the last 60 years, our farmers and the poor have turned into Statistics, instead of precious Human Capital. These numbers are not “due-to” but on the contrary, for the “lack-of” freedom of choice in the hands of common-man, including the Small and Marginal Farmer (SMF). Precisely for this reason, there are vested interests - political and otherwise, trying to oppose and block reforms. The rest of us are following empty rhetoric and loads of misleading information.

Employment story: Without wasting too much space, Let us ask ourselves – where is the employment plan for the millions of our young graduates over the next 10 years? Agriculture sector is already over-crowded as too many people in our country live off agriculture, making it the most inefficient sector. Manufacturing sector is just crawling and nothing exciting is happening here to absorb millions of graduates. IT and ITES economy is already feeling the effects of a slow-down and saturation, even if this sector remains the best bet currently, it would not be able to absorb the huge numbers of graduating young India. That brings us to the Retail sector: organized retail market is only 5% of the total retail market size in India - this is the situation 20 years after the first round of economic liberalization.

Many domestic corporates entered the Multi-Brand Retail sector as large organized retail format stores during the last 10 years, with lot of noise and huge investments. While some have already vanished, almost all of the current players are still looking to break even. One such first-generation corporate, perceived to be one of the most successful, with supposedly very efficient cost-management and highly trained with the ground realities of Indian Retail, is currently suffering operating losses of, hold your breath, 5000 Crores. So much for those offering valued opinions and Swadeshi arguments for protecting Indian companies to develop and exploit the retail market.

Given this situation, opening up of Indian Retail through FDI route to the foreign companies would be the surest way. Going by various reports and this news article, it would generate an employment of about 10 million over the next 10 years horizon. Of which, 4-5 million would be directly employed, while the rest indirectly employed. We can agree that this is just a projection and it may or may not happen, but do we have Plan B?

Consumer Story: The total volume of retail market in India is valued at something like US$ 450 Billion. How about listening to the consumer who actually contributes to this massive size of the Indian retail market? We have heard many voices against FDI reforms from various sectors who want to protect themselves from any kind of external (read Global) Competition. Consumer will be the biggest loser if she is denied a wider choice, better quality, cheaper price.

Wonder why FDI is being treated to be some kind of a Charity or a Saviour to solve all our Socio-economic problems? It is pure commerce and it must be viewed that way. FDI is not an NGO coming to India to solve all our problems of infra-structure, storage, supply-chain and help improve agricultural economy. No, let us first get that out of our Socialist mindset. A market worth $450 billion, with an ever growing young and middle-class population is a dream market for a retailer. NDA government in the year 2002 had proposed opening Indian Retail market through FDI for 100% @ US$ 10 Million entry ticket. UPA puts up a price tag at 51% @ US$ 100 Million in 2011-12. Retail Sold at wholesale? I wonder!!

Furthermore, we have examples in countries like Brazil, Argentina, Chile, Indonesia, Malaysia, Thailand etc where 100% FDI in multi-brand retail has worked out. I have specifically avoided mentioning China only to avoid trigger an unnecessary debate leading to the typical comparison between India and China.

FDI is not enough: In order to enjoy the full potential of FDI in multi-brand retail and to draw maximum advantages, India needs urgent back-to-back reforms to provide sound policy and regulatory environment. Some of the key areas crying for reforms and policy guidelines are: Manufacturing, Agriculture, Consumer Protection Laws, Labor Laws. Without these key reforms, FDI as a stand-alone reform will never be able to help India achieve the desired objectives.

In the final analysis: The debate should not be over whether or not to allow FDI in multi-brand retail, but about the the Process, Safeguards, Regulatory Framework - “Terms of Engagement” - the term (meaning MoU or an Agreement) currently in fashion among the corporate culture of USA.

TN, The Welfare State!

Few days back someone had casually mentioned that private bus operators in TN had paid a sum of Rs. 25 Lakhs (INR 2.5 Million) each as individual contribution to the ruling party AIADMK, with a request for Bus fare hike across the State. I did not give much importance then to this unconfirmed and unverified information during a casual conversation. Only when I saw this small news item at Page 9 of The Hindu dated 2^nd December, it reminded me of this conversation last week.

Busfare hiked to favour private operators: Stalin

Equipped with this unconfirmed and unverifiable piece of inside information, suddenly I found myself in a much better position to “understand” the below comment made by Mr. Stalin in this news item:

“The secret behind such a steep increase in bus fare will come out soon.”

Surely he knows better the reasons and the background to all decisions such as Bus fare hike and the kind of motivation that prompts them – to be more direct and precise, “been there, done that”!

But this is just a piece of co-incidence and trivia that I share here. 
What took me by complete surprise in this article is the below quote from the ever-so-young Octogenarian Mr. M. Karunanidhi himself. Here is the excerpt, emphasis is mine:

Even government officials, citing the huge loss incurred by the State Transport Corporation, had sought a hike. But, Mr. Karunanidhi said that he was not bothered about the corporations' loss.

“The corporations were introduced for the benefit of the people. I will not burden the people,” he had said.

Now just to clarify that this statement was not in the context of raising Corporation tax or any other Taxes; but in direct response to Bus fare hike requested by the State Transport Corporations. Either this kind of statement would pass as “smart politics” to please the masses of a Welfare State, or it shows complete bankruptcy of common-sense among the leaders of this country.

Pity that the masses, including the educated and employed, get carried away by such irresponsible statements made by the leaders of the status of a Chief Minister. This statement should have been shot down and questioned, seeking clarifications. Corporations are run on the tax-payers' money and public servants running these corporations, taking directions from such irresponsible politicians, have no authority to let the public corporations bleed, just to satisfy someone's political gains and objectives.

But the problem here is not the politicians alone. The very fact that they get away with such remarks and statements and we, the people, admire and listen to their speeches shows that we are all a part of this rotten system, together. Even worse are these "private" bus operators, if indeed they have voluntarily contributed to this corrupt practice. In which case, they are not private businesses but the extended arm of collection-agents and rent-seekers of the political parties in power.

As common people, it is very important to educate ourselves on the finer aspects of a Welfare State and clearly understand that there is no such thing as free lunch. I conclude here quoting these lines from a very nice article by V. Anantha Nageswaran, explaining in very simple language, the functioning of a welfare state and how it ruins the Economy and Society at large:

The rupee, a mirror for India

When governments at the Centre and in the states promise to offer everything free to the citizens of India, someone has to pay. ...

Either it taxes people to a greater extent or it asks the Reserve Bank of India to print more rupees and lend those rupees to the government. This government is doing both. The former discourages economic activity and the latter leads to inflation. So, inflation arises due to governments promising to offer everything free to the people because such an approach raises demand, and kills incentives to work and produce. This is not economics. It is common sense. ...