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Rebuilding Brand India

Rebuilding Brand India

We owe a lot to the Indians, who taught us how to count, without which no worthwhile
scientific discovery could have been made. ~ Albert Einstein
 
India is the cradle of the human race, the birthplace of human speech, the mother of history, the
grandmother of legend, and the great grandmother of tradition. Our most valuable and most constructive materials in the history of man are treasured up in India only.
~  Mark Twain
If there is one place on the face of earth where all the dreams of living men have found a home from the very earliest days when man began the dream of existence, it is India.
~ French scholar Romain Rolland 
India conquered and dominated China culturally for 20 centuries without ever having to send a single soldier across her border.
~  Hu Shih, former Ambassador of China to USA 
 
Many of the advances in the sciences that we consider today to have been made in Europe were in fact made in India centuries ago.
~ Grant Duff (British Historian of India)
 
India was the motherland of our race and Sanskrit the mother of Europe’s languages. India was
the mother of our philosophy, of much of our mathematics, of the ideals embodied in Christianity… of self-government and democracy. In many ways, Mother India is the mother of us all.
~  Will Durant (American Historian 1885-1981)
 
 
These are but a few of the praises that have been said about the soil you and I sit on today. The CIA ranks India as the 4th largest economy in the world in terms of Purchasing Power Parity. Since it counts EU as the 2nd largest it actually puts India at 3rd when we go toe-to-toe as a country. Just recently Business Insider ranked India as the 4th in the most powerful militaries in the world.
 
Yes, this soil of India where an army of 35 lakh individuals, a relatively new constitution,a fiercely independent judiciary and a government elected by the largest democratic population in the world leads and protects the 2nd largest population in the world comprising of: 
  • 2nd largest followers of Islam
  • Largest followers of Hinduism
  • 10th largest followers of Buddhism
  • 2.4 crore Christians
  • 2.1 crore Sikhs
Brand India is over 3000 years old and we have held the world in awe with the deep diversity displayed in our culture, economics, ecology and religion. We don’t have to rebuild a brand that has given the world Yoga, the Gita, Sanskrit, Chanakyaneeti, the Shunya, the path of non-violence, the power of civil disobedience and what was in Mohenjadro – the oldest and globally trading civilization known to mankind.
 
India truly is the “land of opportunity”,  where a deep history is evolving through the eyes and efforts of a young population in a democracy that with all its aches and pain is still respected around the world for what it has achieved.
This is the very country that according to a recent Bloomberg article grew at 6.8%annually for the past 20 years. The same country where until 2007 we had a Christian lady leading the largest elected political party, a Sikh prime minister leading the country who were both answerable to a Muslim President that the country loved unconditionally. They were all presiding over a population that is 75-80% Hindu – which my friends is the strength of the fabric of Brand India.
The sons and daughters of this very soil have gone to lead some of the largest and most popular brands around the world. Their companies and in fact even their start-ups compete,out think, and out-innovate the sharpest minds in the world. You can walk into almost any developed country in the Western hemisphere and there is an awe in the eyes of the foreigner how well Indians perform when they have a platform.
It isn’t a hidden fact that Indians as a community are the highest per capita income earners in the US, UK,… we beat them in their own backyard!
 
So what happens to the Indians that stay in India ? How is it that almost of 5 trillion dollar economy in terms of PPP has such a low share of the global trade and an even lower image of the “Made in India” brand?
 
In my opinion the rebuilding of India has to start with you and me… It is us, we Indians and the makers of the “Made in India” brand that will have to make the change we want to see.Our chalta hai attitude which is a silent acceptance of shoddy service, low quality and fleecing of money from the system is the cause of where we stand today.
Our apathy towards the plight we collectively share is truly staggering. Our collective acceptance of an onerous bureaucracy has given us the dishonour of being in almost the bottom quadrant in the ease of doing business rankings released by the World Bank and International Finance Corporation in 2014.
The budding and upcoming entrepreneurs in this room would be shocked to know that in our own land we require 70 odd clearances to start a business, we have to file over 100 returns in a year and follow a maze of 50+ labour laws – most of which were made when your grandparents were born… some that were made when their grandparents were born.
 
This system is broken and it is breaking the back of Indian entrepreneurs. We accept it as a part of our culture but is that what was envisioned by the forefathers of our constitution that the fight they lead to give us freedom and self-governance has come back to drown the voice and expectations of a young India. We have gone from the land of a billion opportunities to a hole of a trillion “offo”-rtunities.
 
Offo-rtunity… how apt that word is for our predicament today. But does it need to stay that way? Can we change?
What brought me back to India after over a decade abroad is the fact that India has grown at tremendous rate for over two decades by a people that are so shackled by its system – a system created during the Nehruvian scarcity & socialist economics of the 1950’s through the late 1960’s that the growth itself is awe-inspiring.
So I imagined, what would happen if those shackles were removed? We would be unbeatable! The very Indians that cannot eke out a living in their own land go on to do tremendous work outside the country. If we offer them that system here, we can literally change the world within and outside our borders!
The fight to unshackle us is not going to be easy but nothing that comes easy is worth anything anyways. This fight requires you and everyone you can influence to change their very attitude towards mediocrity. it isn’t acceptable and cannot be acceptable in any form whether it comes from the government or the private sector.
 
If we want to provide world-class service to the world then that service has to first be given to us, isn’t it? If we want to make the “Made in India” brand the brand that signifies quality and trust… then shouldn’t we be the first adopters of that brand and work out the kinks before the world sees them? Why should our best commodities, products and services only be built for exports? Who will test them and ensure that they can stand toe to toe with global brands?
 
It is an observed practice followed by our successful Asian neighbours where the established companies nurture the younger companies and work with them to make them globally competitive. The people in those countries take the products and services made by their companies very seriously and refuse to accept sub-standard products – that is how their economies have produced innovative yet stable product lines.
So let’s copy that attitude and apply it to our companies. The next time you receive shoddy service or a DOA product, make it a point to protect your rights and ensure that the company not only rectifies the error, it makes it a policy to ensure that those errors aren’t repeated. If you don’t get the protection of your rights go to the consumer protection forums through online mediums which get you almost instant results.
 
Do the same when it comes to services provided by the government. The people that live in high offices react when din reaches unbearable levels. If only a few of us make that effort to change the country by changing ourselves, by accepting Jugaad innovation but being a jugaadu customer, we can eradicate the malaise of mediocrity that plagues our India.
So as I have said this in not so many words during this speech. The rebuilding of the brand of India isn’t going to happen without rebuilding the attitude of the Indian. When we take mediocrity or merely “good enough” as our standard of expectation we get into a downward spiral that has embedded its roots deep into foundation of our proud country. The generation before us has taken us this far and they have given us the baton to take this country forward.
 
Therefore before we rebuild brand India… let’s rebuild ourselves first.
 
 
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Protect our Protectors

Before I open up with my views on this highly controversial topic, I must tell you that I grappled with the thought of writing this article for the last 24 hours. My intention here is not to indulge in any jingoism or chest thumping. I am torn apart with this topic and it my intention here to just vent out my thoughts and ask the readers to really think about how we can play our part in shaking up the annals of the government wherein the last gasp of a soldier’s breath is not terrifying enough.   index   The picture above is of BSF Constable Sanjay Dhar from the 192 Battalion who was martyred on July 16th in the Arnia subsector along the India-Pakistan border in Jammu & Kashmir. Reports state that this is the second ceasefire violation since in this week and the third in July by Pakistan. It should also be noted that Late Constable Dhar, four BSF jawans and four civilians were also injured in the firing across the borderand . According to the BSF website this is is the 2ndBSF casualty at the border this year. (Surprisingly the BSF website is yet to update the martyr list or offer condolences on its website to their fallen comrade while UP BJP has –that is just a minor observation) Do you know how the brave men and women of our armed forces are taken to their final resting place? What is the protocol for bidding a final goodbye to those that lay down their lives protecting our nation’s border? I visited the BSF website and the Indian Army to find out the procedure for paying the last respects to Constable Dhar but I was unable to find anything specific. After a lot of effort I finally chanced upon this link which lays out the procedure for a military funeral in this land we call India. (This link was found by Google eventhough the webpage is hosted on the Indian Army website.) During the search I came across a lot of articles, posts, videos that were heart breaking if not gut wrenching. Statistics like 3,987 soldiers had been killed in action from the end of the Kargil conflict in 1999 upto 2012, over 100 soldiers commit suicide each year. In comparison, USA which is actually fighting a war in the hostile territories of Iraq and Afghanistan had lost 6,802 soldiers. The intention here isn’t to talk about how much better the kill ratio is for the US troops but it is definitely to talk about the value the American public has placed on the people that die fighting for their country outside their view and on foreign lands and how little we place on our own soldiers that are actually dying protecting our own borders and our right to lead a life of freedom. Why isn’t the media getting angry about the slaying of Indian soldiers including brutal mutilations (beheadings, castrations, etc)? Why hasn’t the PM or the Defense Minister made a statement to the nation about the destruction of yet another Indian family (does the media even care about the devastated family that Constable Dhar’s untimely death has left behind?) I find it truly disgusting that we have taken the price of an Indian soldier’s life as being worth nothing at all, there is no statement from the MLA or MP of Constable Dhar’s constituency about taking up the case of Constable Dhar to Defence Minister Arun Jaitley’s office. So is Constable Dhar going to be cremated and forgotten in the ever burgeoning scrapbook of soldiers that are Killed-In-Action? It is my fervent request that each person that reads this post.

  1. Send a letter to their local MP to take up the case of this slaying in their sphere of influences
  2. Ask the Pakistani government to apologise for this death and if they cannot
  3. Then order the ARMY to STOPTHIS FLAG MEETING BULLSHIT.

If the Pakistani army cannot stop firing across the LoC, we have no reason to keep talking to them. THIS IDIOPLAMACY OF MEETING THE ENEMY THAT IS ACTIVELY MARTYRING OUR INDIAN BROTHERS AND SISTERS IS ABSOLUTE RUBBISH. It is a well known fact that Indian soldiers protected 93,000 Pakistani soldiers at the end of the 1971 war from being butchered in Bangladesh by the seething public that was seeking revenge for the atrocities that were meted out to them by the Pakistani soldiers. But now that same country is actively supporting militancy in our country, killing our soldiers and we are more concerned about playing cricket with them? We are meeting with them over flag meetings and “asking” them to stop killing our soldiers? I still salute and stand behind the PM Vajpayee’s decision to send the troops to the Indo-Pak border and sending then (and current) Pakistani PM Nawaz Sharif to face the real fear of war with the 3rd largest army in the world and twice the size of Pakistan’s army.The Pakistani PM at that time realized that messing with the Indian elephant will lead to total destruction. However the last 10 years of “idioplamacy” (idiot diplomacy) is a demotivation for our troops and such daily deaths still cannot be taken lightly and forgotten. But this voice cannot reach the Parliament until each one of us does our bit in contacting our MP and asking them to raise their voice against the horrifying statistic of one Indian soldier’s family wailing for the loss of their brave soul – DAILY.   I am going to write to my MP on Monday… I want to suggest that you do the same by finding out the address and writing a letter requesting them to bring this up for discussion in the floor of the house and getting a reply in a timely manner. The contact details for our MP can be found here at www.NoCorruption.in. These men are putting their lives in danger each day, it is time we take out a few minutes of our time for them. “The value of life can be measured by how many times your soul has been deeply stirred” – Soichiro Honda

LinkedIn’s Inmail Credit – An Example for Other Businesses to Follow

I had recently written a post regarding unnecessary meddling in the Indian aviation sector by DGCA. A day after that Captain Gopinath wrote an article for the Economic Times which voiced similar concerns (albeit on a different tangent) on the sector too. Captain is a pioneer in the sector and I have a huge amount of respect and adulation for him (I have read his book, Simply Fly , twice and recommend it to any budding start-up as a book on winning against insurmountable odds in India) I sent him an Inmail to review my post and give his thoughts.

Being a busy man as he is, he may not have found the time to respond to the Inmail (I have my fingers crossed that he read the post J) , LinkedIn sent me an email stating that my Inmail credit that had been used to contact Captain Gopinath was hereby being returned and that I thought was – “Simply” Amazing! From my perspective, I am the one who wanted to reach out to someone I have a not direct connection with (yes Linkedin says I have a 3rd level connection with him, but that is just to flatter me), they gave me that opportunity to atleast have my voice reach him, he chose not to respond/missed my Inmail on account of not logging in, in the 7 days response time frame that LinkedIn has as a policy for InMails – which is absolutely his choice and they felt apologetic enough to refund the credit because the “intention” of using that credit wasn’t completely utilized.. I “simply” want to say – Wow! Kudos! Shabaash!

131112-LinkedInInMail-700x357

In a world where most businesses will hide their inability to complete a service (please don’t ask for a list, I’ll have to send you the yellow pages for the city you reside in) here is a public listed company that is taking the onus for a job that they couldn’t complete and refunding back what they took from me without a class action lawsuit (which would support the lawyer’s annual bonus).  I remember that back in the US when I had an account with Charles Schwab , they would refund my wiring fees because I had to call in to get the wire done as there was some glitch in using their online system to wire money, they would gladly charge and refund the wiring fee for calling in. With such a commitment to service there isn’t a doubt that these two companies hold such a dominant position in their markets.

This is an example for other companies to follow. If you don’t provide the service that you intended to, fess up and give your customers a credit back. If a booking is made for a hotel and the pool or gym is shutdown – refund to the customer (without haggling) a few hundred rupees that would have been input in the costing of his room based on him using the facility. Let me be clear, I am not advocating for those customers that choose to not use the facility even if it is available, but if it is not available – refund that portion (or give a dining credit) at check-in itself so that the customer is already ecstatic at your honesty (it is the best policy J) and is easy to please.

Another example would be that, if I choose to fly Air India (yes.. I “simply” do), a full service airline and they cannot reach on time or they give this food packet to me in the name of breakfast – kindly refund the money it would have cost to have given a real breakfast or refund the money on the extra taken due to your tardiness and for which my company paid a heftier price in booking through your airline.

This is the dinner on Air India.. Fit for the Maharaja of the skies?

This is the dinner on Air India.. Fit for the Maharaja of the skies?

Yes we aren’t in an Utopian world, but in my experience a policy wherein you own up to your mistakes and offer something back to the customer (it doesn’t have to be spectacular but don’t be cheap either) – they will appreciate you for your upfront honesty and they will choose you in the future (even if you were pricier) because they are sold on your commitment to get the job your customer intended (please mark this word – intention and not your own convoluted, contradictory and magnifying-glass-needed-to-read policy). They will appreciate you back and you will have a customer for life.

A start-up that ingrains this into their DNA from the very outset will go a very long way… that is “simply” a given (yes this will be the last time I will say “simply”)

Err.. okay that was the last time, I promise J

(I am requesting your comments on what other types of companies can institute this, how your company is instituting this (please don’t put up any ads advocating for your company – we will remove the comment) and whether you have seen or experienced this in dealing with a particular company. Please keep your comments anti-inflammatory and non-threatening to avoid being censured)

 

 

 

 

 

 

 

The Olive Tree

As an angel investor and an individual who possesses a serious entrepreneurial streak I sit through atleast 150-200 business pitches in a month. As a fellow entrepreneur I am in awe of all entrepreneurs as they should be complimented and encouraged for having the guts to plunge into what is – the scariest and the most thrilling roller coaster ride of one’s life.

Their energy and belief don’t make it easy for us “angels” investors (who came up with that adjective?) but an entrepreneur should know that it is quite difficult to point out the flaws your business plan and to balance the criticism with an equal amount of positivity and encouragement so as to ensure that the entrepreneur is motivated to go back to the drawing board instead of jumping off a cliff (metaphorically!)

What I find particularly unnerving and confusing is how to deal with an entrepreneur once you have entrusted him/her with your hard earned money? You have placed your trust in the team and the idea but are you planting the seed in a greenhouse, where it requires your care and attention (and a pep talk)? Or in the forest where it has to fend for itself?

On the one you have a school of thought that suggests that angel investors take an activist role in the running of the company, revamping all procedures and plans and replacing them with the experience that they have collectively gained through running businesses of their own. The other school of thought suggests playing the role of mentor or even a helpline operator, giving the entrepreneur their own space and focussing on problem solving by focussing on the results instead of the methods employed to get there.

But which one is right? Whilst grappling with this conundrum I came across the following poem from Sabine Baring-Gould. The message conveyed in the poem is self-explanatory and it definitely inspires me to be a more open minded investor.

In my honest opinion, what got me to invest into the idea was the energy, zeal and the uniqueness of the entrepreneur and his/her idea – so why kill all of that by bringing my (or the lead investor’s) own company running methodology? I am not promoting giving the entrepreneur free reign and let the cattle run wild – but it does make me conclude that an angel investor(s) should decide with the entrepreneur on the KPIs/metrics that they want to track and then actively and periodically track those metrics and any statutory compliances. The investor should get involved in two scenarios – one when a metric starts to move away from the desirable range that was previously agreed to and second if the entrepreneur specifically reaches out for help.

But meanwhile if the entrepreneur is performing and meeting all his/her metrics and he/she wants to have a lasertag game at the office and start an incentive program that offers a cold beer to the staff on Monday evenings – I say go right ahead!

The Olive Tree

Said an ancient hermit bending
Half in prayer upon his knee,
‘Oil I need for midnight watching,
I desire an olive tree.’

Then he took a tender sapling,
Planted it before his cave,
Spread his trembling hands above it,
As his benison he gave.

But he thought, the rain it needeth,
That the root may drink and swell;
‘God! I pray Thee send Thy showers!’
So a gentle shower fell.

‘Lord! I ask for beams of summer
Cherishing this little child.”
Then the dripping clouds divided,
And the sun looked down and smiled.

‘Send it frost to brace its tissues,
O my God!’ the hermit cried.
Then the plant was bright and hoary,
But at evensong it died.

Went the hermit to a brother
Sitting in his rocky cell:
‘Thou an olive tree possessest;
How is this, my brother tell?’

‘I have planted one and prayed,
Now for sunshine, now for rain;
God hath granted each petition,
Yet my olive tree hath slain!’

Said the other, ‘I entrusted
To its God my little tree;
He who made knew what it needed
Better than a man like me
.

Laid I on Him no conditions,
Fixed no ways and means; so I
Wonder not my olive thriveth,
Whilst thy olive tree did die.’

– Sabine Baring-Gould-

Investment Idea : A Visitor Travel Management App

When you reach an obstacle, turn it into an opportunity”

–       Mary Kay Ash, Founder of Mary Kay Cosmetics

1.    What Inspired This Idea

I had just landed in Goa for a friend’s wedding and was welcomed with the news that I had been mistakenly assumed to be on an earlier flight. In the melee of boarding over 40+ people that had arrived on the flight (that I was noted to be on) and instead of calling me to check whether I had missed my flight or whether I would be boarding another flight, the “cool” wedding planner decided to assume that I was not attending (only if he knew that my friend would cause some serious body harm if I had infact done that).

So with the wedding venue almost 90 minutes away and the closest car atleast 60 minutes out, it gave me time to research whether someone had thought of something better than the manual process of making excel lists and ticking off who had or had not arrived for a wedding or a meeting even after RSVPing (yes, those that show up unannounced deserve to be waiting at the airport!). There were a few blogs from Bizzaboo and Plannerwire and the only thing that came closest to helping with event management was Eventbrite, but it didn’t cover all the aspects I mention below.

 

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Read more on: http://bit.ly/1qeJqIb

DGCA: Now Approves Business Models too?


I like Tony Fernandes. He is the CEO of Air Asia with a spunky attitude which has made him one of the richest people in Malaysia. Here is an individual that turned around an unsuccessful airline and has made it the best low cost airline in the world two years in a row in just over 13 years! Then he challenged his fellow rival in the airline and F1 racing league, Sir Richard Branson, to a duel which he won and got Branson to… well this picture is worth a 1,000,000 words

Yes that is Richard Branson (right) in an AirAsia cabin crew uniform serving Tony Fernandes (left)

    He is also the owner of a the English football team, West Ham United, runs a group of budget hotels under the brand name, Tune Hotels and when he has time off from doing all this, he plays the Donald Trump equivalent in the Asian version of The Apprentice.

About a year back, AirAsia teamed up with Tata to create a budget airline for the Indian skies under the name AirAsia India. Their pricing and business model that has made them so successful in South East Asia and which would be, in my opinion, a boon for travellers in India, was going to be implemented at the launch of their airline.

    Alas, Tony didn’t know that the same authority that decided to grant him a license to fly AirAsia planes in the Indian skies was also responsible for fixing the prices that an airline could charge on a flight! Last year DGCA allowed airlines to provide ala carte pricing to customers allowing them to opt-in and out of services that they would like to have during their travel. (A copy of that order is available here). At that time the move was welcomed by all industry players, the rules of the game were simple and the industry could finally start clawing back from the precarious financial position that they faced with a running net loss of over Rs. 10,000 crores for the last fiscal (as an industry).

    So when Tony decided to charge customers for check-in baggage – as allowed in the DGCA order and as charged to the 5.1 crore passengers carried on AirAsia flights in 2013, his executive team would have expected to jolt his competition but none of their probability analyses would include intervention from Big Brother, DGCA themselves! As per the order given on the government website there is no requirement for AirAsia to get DGCA’s approval to charge a particular fee to their customer as long as it doesn’t violate the checklist given in the order. From what I can understand, AirAsia India was within its right to charge its customer whatever fee it wanted as long as it was transparent and it didn’t interfere with the base pricing of the ticket – AirAsia India didn’t do any of those – so why did the DGCA intervene?

    To prove a point (what it is, will be a mystery) DGCA forced AirAsia to offer 15 kgs of free check-in baggage to customers and made it reduce pricing for other things too. Such myopic moves from the regulator would be one of the primary reasons why AirAsia’s plans to breakeven by October 2014 have now been pushed off to December 2014 (they don’t mention it most probably to avoid the wrath of the regulator).

Tony Fernandes expressed his anguish to the Times of India calling his entry into the India Airline industry his “worst reception” and when such a statement comes from the 2010 Forbes Asia Businessman of the Year – it is time for us to be disgusted and appalled at the over-reach from the DGCA.

    On what authority (and research) did DGCA intervene in a company’s pricing strategy? Will they be responsible for repaying the losses created by the consequences of their actions or is it the responsibility of businessmen to cater to their whims and fancies instead of their customers?

    The DGCA would be better off monitoring the state of operations of an airline that has seen its cash balance fall to less than the revenue it earns for a day and infact has borrowed from travel agents to keep its engines whirring. They should get their babus cracking down on the predatory pricing charged to the customers wherein a full service airline like Air India and a no-frills competitor like Indigo have the same fare between two cities. Instead they are stressing out the new player that is doing what the DGCA should have been doing – breaking up this cartel.

    Was the DGCA sleeping when Kingfisher was racking up fantastic losses and not paying its staff or the airports or taxes or for fuel? It took them an age to decide on the course of action for the now defunct airline? What is it doing to recover that money or will us tax payers be subsidizing those losses too?

    Please DGCA it is time that you focus on what you can do right. You and other regulators and government authorities are better off governing not “ruling” the entrepreneurial class.

(This is my first post on a series of posts about the undue stress placed on entrepreneurs by an overzealous regulator and they not only make business difficult, in some cases they destroy ambitions altogether. Look forward to your comments and suggestions on this post and for what I should cover in future posts)

An Example of Horrible Pricing Strategy – Blackberry India’s BB10 Pricing

I must start this article by stating that I have been using a Blackberry for the past 10 years and I will continue to use one for the foreseeable future. It’s only using a Blackberry that I can punch out a 3 page email in under 5 minutes flat and I still receive emails on my Blackberry faster than any of my friends and while my friends may make fun of my “oh-so-yesterday” device – I am not one to jump ship on someone so quickly.
So while I may not be in the market for a new device as of now, I eagerly look forward to new Blackberry devices, hoping, praying and wishing that they finally get their marketing plans right and give the market what it really wants. The company has been doing very well under interim CEO, John Chen, by focusing its efforts on the enterprise market, promoting its QNX platform and launching new phones in partnership with Foxconn at multiple price points in the overcrowded smartphone market as it looks at selling its devices to the 85 million strong community of BBM users to buy its phones (BBM is available cross platform now)
These changes have definitely helped the company’s fortunes as the struggling smartphone pioneer delivering Q1 results that have surprised the market and the stock rallied 34 percent in the month of June 2014. The company launched a low cost device in Indonesia call the Blackberry Z3 (which is now getting available in all markets) and has announced a partnership with Amazon that will bring the Amazon’s appstore to Blackberry and allow the enterprise device maker to focus on regaining leadership in its core market.

 

Blackberry’s India strategy for the pricing of its devices is bewildering and confusing though. First they launched the Z10 device in 2012 at the same price-point as an IPhone which almost guaranteed the failure of the devices launch. Later on, it priced the Q10 and Z30 phones at even higher price points (oddly the Z30 was priced at almost the same price as the Z10 when it was launched) which only led to a faster exodus of Blackberry’s customers to rival phone makers. However, the Z3 was going to be its game changer, I likened it to the Blackberry Curve that was an instant hit with young professionals and teenagers and expected Blackberry to launch that phone at the same price point it had launched this phone in Indonesia of under $200.

 

However, whoever did the research and decided the price point for this device be put at Rs 15,990 made a grave and fatal mistake. For starters Z3 is priced Rs. 1000 less than the Z10 device and Rs. 9,000 less than the Z30 device. A comparison between all 3 devices is available here and it is clear that the Z3 is going to cater to the mid to low segment of the smartphone market and with that assessment I agree with Anupam Saxena of Times of India and Nandagopal Rajan of Indian Express who have given the phone good reviews but complain about the phone being priced out of the market.

 

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The Z3 at Rs 12,000 would have offered a very compelling and competitive case for those looking for low cost Android phones in a price sensitive market like India. Alas, Blackberry India has made another pricing and positioning error and this is extremely disappointing for a Blackberry enthusiast like myself. I request BlackBerry’s team to convene a meeting with its sales and marketing team (separately and then jointly later) and find out the acceptance of Rs. 15,990 for the Z3 in the market – they will be surprised and will be forced to react faster than they ever have before.

 

Cross Subsidy Surcharge: A Dacoit in Robinhood’s Clothing

Robin Hood

The verb “cross subsidize” as defined by the Oxford dictionary is “Subsidize (a business or activity) out of the profits of another business or activity.” But what happens if that industry is facing the awesome prospect of losing $27 billion per year from 2017 onwards as reported by the World Bank? To put the number of $27 billion into perspective, it is equal to the entire nominal GDPs of Nepal and Zimbabwe… combined!

In my honest opinion the in-sync folks at Wikipedia have defined “cross subsidization” aptly, as “the practice of charging higher prices to one group of consumers in order to subsidize lower prices for another group.” When I read that definition is immediately reminded me of a heroic outlaw in English folklore, Robin Hood, who is famously known for “robbing from the rich and giving to the poor”. In this post and the many more that I intend to write, it is my intention to bring to your attention the malaise that has spread in the Indian Power setup from the introduction and the subsequent revisions in what many of us see as a harmless line item in our electricity bills.

The current scenario in the Indian power sector is very grim when one concentrates on the sheer magnanimity of the numbers.

  •  India possesses the 5th largest power system in the world
  • 21% of the power generated by the India power generation companies is lost during transmission
  • Bangladesh loses a mere 10% in comparison
  • A World Bank report on June 24, 2014 stated that more than 300 million Indians (the entire population of the United States) still live without electricity today
  • 200 million of them live in villages that are supposedly “electrified”
  • The same report also stated that the sector was bailed out in 2011 with 1,90,000 crores
  • That number exceeds the GDP of Bahrain by 10%!
  • The sector was bailed out in 2001 with 35,000 crores of the tax-payers money

These poor metrics and massive bailout could have all been forgotten if the sector was aiding in “amp”ing up India’s GDP but when a FICCI report in 2013 points out that India loses $68 billion or Rs. 4,14,800 crores of its GDP due to power outages – it is time to sit up and take notice.

In my opinion the CSS (short form for Cross Subsidy Surcharge) is a dreaded dacoit that keeps raids the rich to buy narcotics and give it for free to the poor which give them the temporary high but the dacoit maintains its stranglehold. It should be noted that CSS was introduced by the previous BJP government when it passed the Electricity Act of 2003 and opened the power sector for competition. The intention at that time was to give the government run power companies some compensation for losing its customer base to cheaper and more efficiently run private power producers while they restructured themselves for this competition.

However this well intentioned move, atleast in hindsight, acted like treating a heroin addict by feeding him some more heroin and asking him to cure himself by reducing the amount of heroin he takes… such an approach rarely works! The government run entities latched on CSS like a lifeline and 6 years after CSS was to be abolished it is being used as a ploy to keep out competition and to harass consumers of power that can get cheaper power but that will not be in the best interest of the utility. The utility will tell you that they need CSS to provide free or low cost power for the agriculture sector and residential consumer but subsidization for one industry while upsetting the apple cart for all other industries is preposterous if not just plain illogical.

In certain states CSS is more than the cost of making power! For example TANGEDCO now charges a CSS of Rs. 3.40 to Rs. 3.61 per kwh while Maharashtra charges a CSS of Rs. 2.30 to Rs. 2.75 per kwh and both have increased their CSS in the last year. To see how ridiculous and anti-competitive these tactics are, just open the last annual report of Tata Sponge as available on its website. Their cost of power when they generated it for themselves was Rs. 1.47 but when they buy it from the open market or the utility the cost is upwards of Rs 8 – a large chunk of it attributable to the enormous CSS charges that are forced onto the customers.

This anomaly has led to a deathly downward spiral, one where the large users of power find it more feasible to own and operate captive power plants versus buying power from the open market or the utility. This leads to loss in valuable and profitable revenue for the entire industry – the power generator, the power transmission utility and the power distribution utility. The 3 are then stuck with power consumers that get power ridiculously cheap and below cost rates ranging from 0 (yes nada) to Rs. 2 per kwh and in the effort to balance their budgets they have to keep increasing the CSS charges and therefore driving out competition and customers too. This also has an adverse affect on inflation as electricity is a key cost for most industries.

In conclusion new government would serve the nation by ending this madness and abolishing the practice of CSS once and for all. If states want to subsidize power for residential and agriculture they should use their state subsidies budget to do the same and not lay the burden on other industries by charging them what is in effect an agricultural tax. Abolishment of CSS will give power and other industries the much needed shot in the arm (pun totally intended) to spur growth in the industry through an increase in power generation plants which will increase long-term employment and generate an affordable and growth filled future for our country.

Electricity Prices Set to Increase by 35 Percent!

A perfect storm for electricity consumers that was created by the policy paralysis of UPA-II, high interest rates and the slow pace of development of power plants as developers faced innumerable headaches and delays in securing 143 licenses and filing 1982 compliance reports. This storm will reach devastating strength as the states of Delhi, Punjab, Rajasthan, Chhattisgarh, Uttar Pradesh and Karnataka have decided to raise power tariffs by 10 to 35 percent!

The problems in India’s critical power sector have been simmering below the surface for a very long time and the burgeoning Indian population with its increasing usage of technology – from using smartphones to rural electrification schemes that has increased power consumption from 443 kwh per capita in 2004 to 684 kwh per capita in 2011 as per the data compiled by the World Bank.

The problems being faced by the Indian power sector are too many to list out in a single blog post but as a power consumer we should all beware that such large hikes in tariffs are going to be the norm moving forward – unless the government makes some serious and immediate changes to its power policy. If the government is serious about giving world class power infrastructure for supporting the needs of residential and commercial customers, it first has to ensure that setting up a power project is a pain free and an under-table ridden process.

The government should also seriously give a thought to replacing the defunct and often misused depreciation and subsidy based schemes and give power plant developers access to easy, low-cost and long-term debt. Climate Policy Initiative studied the impact high interest costs have on power tariffs, noting that unfavourable debt terms add as much as 32% to the cost of renewable power from wind energy alone! One can only imagine what an impact the adoption of business friendly policies would have on procurement cost of other sources of power. The same report also mentions that access to cheaper debt can reduce the subsidy burden of state and central governments by upto a whopping 78% just for wind power alone!

So while highly recommending power consumers to urge their local representatives in the power corridors (pun not intended) of Delhi to give the neglected power producers the support they need, I also recommend that the power consumers who have an empty roof-top, should look at sourcing their power from distributive solar power generation systems. These systems can provide the consumer access to long term solar power at an affordable and sustainable tariff while giving them valuable ‘day-time’ power – a time when most power distribution companies face tremendous power shortages.

More on that soon…

Dropping Out Of The Rat Race…

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A picture that says so much about our highly competitive society.

The rat race is well and truly on in all facets of our society. In my opinion the Indian society has a unique relationship with standing in line, the need to be first and to get something (even if it’s a glimpse of a deity) before the other guy.

This culture most probably finds it’s roots in the times when India was a extremely poor country with limited jobs, food and opportunities. However this behaviour should have subsided as the country grew economically at an increasing pace therefore opportunities multiplied and scarcity was reduced. This transition would support logic and reason.

On the contrary the rat race is getting worse today. The competition begins from admissions for you newborn into a decent preschool to getting a decent job, from getting a decent house to getting on a local train.

Infact we as a people have a weird relationship with standing in a queue to get something (have you seen the queue to get on a plane – even though everyone has a confirmed seat!)

However will this culture continue? Can a growing nation and the plethora of prospects that come with growth provide us the security to happily give up our scarcity mindset and grow ourselves as a people…as a society.. as a nation.