Saturday, June 18, 2011

Selling the family silver

In the 1930s, in what is now known as the ‘Great American Streetcar Scandal’, newly established automobile companies started gobbling up electric streetcar companies with a view to replacing the electric streetcars across cities with oil powered buses. Systematically, they went about destroying the streetcar companies in city after city till about the 1970s by which time their mission was accomplished.

By then the American transportation landscape became what is today — almost no public transport in most cities other than the very big ones and heavy dependency on cars. In order to benefit their core business, they systematically went about buying and then deliberately destroying their competitors.

The UPA Government today is involved in multifarious scams. The scams range from an assortment of selling telecom licences cheaply to overspending on sports extravaganzas. Apart from these, there are other scams under the guise of poverty alleviation schemes. All of these are direct scams where the exchequer is getting looted one way or the other.

While this is happening, there is another category of scams that is not getting the attention it should. This is the type of scams perpetuated like the ‘Great American Streetcar Scandal’ — where there is no misappropriation of money — hence ‘Type B’ scams. These scams are the deliberate and systematic destruction of value across Public Sector Units so that their competitors in the private sector benefit.

Two immediate examples come to mind — BSNL and Air India. Not too long ago BSNL was Number 2 in mobile subscribers’ market share; since then it has seen a steady decline to Number 4 today. It has not been allowed to buy equipment nor enhance capacity. A tender floated in 2007 to procure equipment was cancelled by the then Telecom Minister (a certain A Raja).

As a result, BSNL lost crucial time until it was finally allowed to buy equipment for about half the number of lines it wanted. After that one more equipment tender was cancelled with the result that BSNL has been steadily losing subscribers while the others have merrily added capacity. What could have been a great PSU is now reduced to an ‘also ran’ and will soon be a dead unit, unless someone with foresight revives it.

Air India is of course hit by a double whammy. On the one hand it has invested in brand new planes (68 of them) and on the other it is not allowed to bid for newer routes so that it can fly those planes and recover the money. Net result? A debt burden of about `40,000 crore and losses of about `7,000 crore. And guess who is flying on many of the newer routes?

No prizes for guessing who benefits in both these cases. The private sector, in both airlines and telecom, has gone from strength to strength in the same timeframe. Coincidentally, both BSNL and Air India are not listed — which prevents their close scrutiny.

Whether the beneficiary companies in this regard channel the benefits in cash or kind to those in power who enable this is a separate investigation. And in those murky cross-holdings and money paid to consultants and stakes given to various people may lie a story. But regardless of whether that has happened, this is a new type of scam — where the Government deliberately kills its own enterprises so that private companies can benefit.

(Published in The Pioneer Today as an Op Ed)

Tuesday, June 14, 2011

Convenience Fees

Login to the Indian Railways site and book a ticket. Pay a "convenience fee" of 20 rupees per ticket. Ditto for almost any other site. Whether it is online movie ticket booking or online e- transfers, online users in India are being ripped and milked.

In any other country web users get a discount - for taking a load off the physical infrastructure required to run either a bank or a ticketing booth. Not in India. In India online users pay a "convenience fee" over and above the actual transaction. There is no real reason except that those who book are the "upper crust" mostly taxpaying and used to being looted by all and sundry including the government. The companies use these users to subsidize their other non-productive assets.

Take the case of the railways. When was the last time you saw an army of ticket bookers for Jet Airways or any other airline? Why is that the railways need a humungous infrastructure to book tickets staffed by their own when airlines have depended on agents and suchlike for almost a similar timeframe? And while the railways and road transport services have their own e-infrastructure for ticket booking that supports both agents and individual customers, the answer atleast for the railways lies in politcs. The railway minister(s) job is to create jobs for their constituency. And thus it happens that we recruit ever more people into an already bloated railways - and many of them end up looking forward to a career in ticket booking. And you, the ignoramus who wants to travel by train, instead of standing in the long queue to worship the deity who will hand over your ticket chooses to book online. Shit. That means the more people book online or at agents, the less the job creation engine of the Indian railways will run. Therefore, you idiot, you will be penalized - with what shall we call it - convenience fee each time you book a ticket sitting in your home. All this for travelling toilet class. (More on IR here.)

The story of banks is exactly the same. When there is an army of clerks waiting to do slowly and inefficiently, the same thing that can be done flawlessly and at lightning speed - those who want to use it will be charged - otherwise their inefficiencies will be exposed and they will have to let go off people. So, you, the smart internet banking user are subsidizing them.

Ditto for the RTCs. APSRTC and Karnatakas RTC are light years ahead in the game - thought I suspect it was the former which was the lead thanks to Chandrababu Naidu. APSRTC had counters all over Bangalore for its Tirupati trips while KSRTC counters were hard to find in the capital city of its state. Now KSRTC has caught up and has a great network of both good buses and ticket counters. Needless to say it is making money as well. There are a few RTCs still do not have an e-ticketing infrastructure because I suspect their ticketing employees could be unemployed. Keralas run down RTC is one such example. While every private bus operator in Kerala and to Kerala is making money Keralas RTC somehow survives with old buses and striking employees. Whatever. Well, nobody is dying to buy Kerala RTC tickets - they book online with KSRTC and APSRTC and pay the convenience fees too.

The reason is similar for most others - except the answer is not in politics, the answer is in milking the class which is willing to pay.

So, thats for you the smart consumer. Who says you need to give charity? Each time you pay convenience fees, you are donating to the health of yet another unhealthy organizations. The government deems that is their right to milk you - one who is contributing to their efficiency.

You are staring at an industry dammit

Yet another day, yet again we have to hear "Why cannot India produce a Google or an Apple or a Facebook". There is a very simple reason for that.

The next time somebody asks you this question, ask them back. "Why has Europe or America not produced a Nano?" Get the connection?

Yes, the answer is very simple. In any country what you will build or make or sell depends on whether there is a market available for the same.

In India there is no real market for Microsoft. If Windows is prevalent in India it is because of piracy. Google happens to be in India because it makes money in the US. Ditto Apple. The few thousands who buy Apple products in India are not enough for a company to sustain itself - with newer products, RnD and so on.

In India there is a market for the Nano. If the Nano does well in India, Tata will sell the Nano in other parts of the world. Like Bajaj sells its bikes in the Far East.

That is as far as the market is concerned.

The second is the practicality. Can you sitting in India start a company that will offer Americans an amazing internet shopping experience? Or ticket booking experience? Unlikely. Firstly, you will realize (as I did) that starting a company is not a joke and many give up (I gave up even before I started). Unlike in Silicon valley, where you can walk into one office and walk out in the space of a day with your company registration certificate, here it is an obstacle race. And thats when you just begin. After that running it is an altogether different story. Importing stuff is not easy - considering you dont have hi-tech computers and servers being manufactured here - it swallows tremendous amounts of money. All in all, a lot of things need to fall in place for a company to start.

Infosys is an exception - started by first time entrepreneurs. Wipro and TCS come from reasonably established business houses. And having said that - even then - they are all exceptions and thankfully we have a system that lets such new businesses survive - even if there are a few chokepoints prior to that.

And all said and done, the ITES industry is an industry - an entire industry. An industry the likes of which do not exist anywhere in the world. Yes, anywhere in the world. Yes, neither Philipines nor China nor any other country have any ITES company worth its name - despite the so called prevalence of such industries there. That gives you the second question to ask, "Does Infosys have any competitors from Philipines or China?"

If that doesn't silence your ignoramus questioner, let me know...

Sunday, June 12, 2011

Of washing machines, socialism, environmentalism and Bangalore

Do see this video, by the incomparable Hans Rosling - where he talks about the magic washing machine. Yes, I personally love the washing machine - saves a ton of time and as he says, helps us read and do many other things - hopefully productive.

But what he brings out really, is the common thing across washing machines, socialism, environmentalism and Bangalore - hypocrisy. Let me explain.

Many people - who work in highly paid jobs or have made their money working in highly paid jobs or businesses - all decidedly capitalist - suddenly adopt a socialist approach. Take any "successful" politician who talks socialism and you will find that the actions taken by the politician in his or her own personal life is decidedly not socialist. They talk socialist and ensure that they loot the money of the socialist people. They float socialist schemes (NREGA) and their own cadre loot the money in between. They fly in on the chartered planes of capitalist entrepreneurs and leave you with vacuous words of socialism.

Many of us who work in the corporate world have similar idiotic notions. Anybody who talks of socialism while taking a capitalist salary is a hypocrite at best and an ignoramus at worst. All it means as Hans puts it is that you want the "other" to be deprived of what you got.

Many years back, in the verdant landscape of Munnar - there was talk of a power project being built. And I, all of some 10 odd years old argued with a local resident - another 10 year old - on the proposed dam that would submerge many acres of forest land. He replied without batting an eyelid - that the dam would give them electricity and I was shellshocked. Many years later, I realized that I, living in the city had access to 24 hour electricity while they barely had electricity for 8 and the realization hit home - as Hans says that the whole idea is that people like us - try to live more sustainable lives - is more environmentalism than about opposing dams or power plants.

Which brings me to the final point. Bangaloreans love trees on roads and each time a tree is cut, some publication somewhere will write a couple of stories about the same - ironically on cut trees. But do check out Bangalore from the air - no trees at homes or in apartment complexes - the trees are either on roads or on public property. Here too, if you care about the city, please let charity begin at home - your own. Build rainwater harvesting systems, conserve water, use public transport, use solar water heaters (if at all), grow trees (or vegetables) wherever you can.

Either way Hans Rosling makes you think. Do watch the video. And btw, do check if A Roy has a washing machine in her jungle retreat...

Tuesday, June 07, 2011

They want you to be addicted

Lovely report this from the Green Auto Blog. The report quotes a Saudi prince who is worried about increasing fuel efficiency standards and increasing oil prices.

As oil prices increase, other technologies become more and more affordable. Not necessarily in a direct way, but as oil prices go up, it becomes more worthwhile to invest in newer technologies and figure out an alternative means of fuel. Dependency on oil is bad for all us in more ways than one - except for the producers since they can hold the world ransom to their oil. The sooner we get rid of this dependency, the sooner we can work towards a more peaceful world.

No prizes for guessing why the Saudis (and obviously the other producers) want you to be addicted to their oil. That way the money keeps rolling into their coffers and we, the stupid lemmings, invest in our own suicide. They dont want you to be free - they want your dependency. Quite a situation for us humans who claim to be free eh?

And which is why, we must all be happy that oil prices continue to keep going up.

But while we wait for alternative technologies, what can we do? Perhaps try to reduce usage of plastics, oil and try to get to a more sustainable way of living - including use bicycles for transportation or public transport.

Sunday, June 05, 2011

11 years

Yes, its been 11 years since I rolled into Bangalore - on a Sunday like this - at about 9 am in the Udyan Express from Mumbai - sleeper class. June 5th it was and I was surprised at about 12 noon, when the weather did not really feel like June in Mumbai. Mumbai was hot, Bangalore was pleasant. And what weather glorious weather it was. Yet, 11 years ago, I was not sure if this city was good. The weather was nice, but little else otherwise. Roads were sad. Electricity was not great. The city was not professional like Mumbai. There was little else to do unlike Mumbai. Public transport sucked big time.

But in 11 years, the city has come a long way. Yes, we had to live through the construction of the Silk Board flyover and the market flyover. We had to live through a million traffic jams (and continue to do so - but the difference is that there is hope now). A zillion electricity cuts - which have become a million now. But none was as great as the great attempt to drag Bangalore into a "halli"ness by the fumble harmer (deliberate spoonerism) and his family (it still continues with a certain chaprasis help). Roads were dug up, development stopped and we had to hear pontifications on poverty from those who drove SUV's and owned government allotted petrol pumps.

In the last 3 odd years, infrastructure construction has been going at a great pace, public transport (BMTC is probably Indias best or second to BEST) rocks, Metro construction has been going at a fast clip and Bangalore is developing. Rickshaws are still not professional, traffic cops can fine more motorists and surely the educated motorists of this city can have more traffic sense, but yes, the city feels like a city more and more.

Yet 11 years ago, I had no inkling of how this city would be my home...

Bangalore has advantages very few other places have. With its weather, it is a great place to create cycling tracks on roads. It is a great place to walk - even to work. There are many lakes here which are dying and can be rejuvenated. With its size, it offers a great quality of life that large cities cannot provide. Did I mention it has great food options? And yes, it has the potential to be Singapore and more. Hopefully this vision will be realized...

Friday, June 03, 2011

Petrol powered everything

Electric vehicles are facing some bit of a resistance - both in mindshare and in actual adaption. And perhaps in countries like India a definite delay in introduction - except for the brave Reva. Imagine a world where petrol powered everything. Cannot? Take a look at these two videos. One by Nissan:

And one by Renault

Link via Autoblog Green.

Peaceful nation

Heard about the peaceful nation in our neighbourhood? Yes, yes, the country of the pure. Very peaceful nation it is, except when it is provoked.

What happens when it is provoked?

Oh, then its largely peaceful politicians make blustery speeches threatening entire humanity with the worst.

Ah, but its politicians are peaceful arent they?

Oh, they are largely peaceful, except when their army gets provoked - at which point the army kills a few of those peaceful politicians.

Ah, the army right? Must be a disciplined sort of army right?

Yes, yes, very disciplined army they are - except that there a few rogues in their army who often get out and start wars.

Ah, peaceful wars right? Yes, yes, very peaceful wars. So peaceful that they dont think that the other side will attack at all. Or defend for that matter. Their wars are meant to be one-sided wars where they expect to walk in with guns and the like and walk out with land. But sometimes the other side grinds them to dust and they become very angry.

Sometimes eh?

No, all the times actually.

So, is the army perpetually angry?

Well, you can say that. And then again, not all of the army. Just a fraction of it who are radical.

Ah, so then they must be very easy to subdue and control right? I mean, if the majority is peaceful and the small tiny minority is rabid, it is easy right?

Not when they are controlled by their largely peaceful intelligence agency.

Oh, so they have a peaceful intelligence agency as well eh?

Yes, very peaceful intelligence agency - except that it too has its share of rogues who influences the rogue part of the army.

Is that all they do?

No, they also sometimes, engage with largely peaceful charitable organizations who have their rogues - you know the kinds who dont follow the code of the charitable organizations. They engage with these rogues who often take the law into their own hands and encourage them to kill a few while they are at charity.

Oh, so there are these charity organization that terrorise and kill people?

No, not all of them. Just the rogues.

So where are the silent majority?

Oh there are the ones who garland those rogues, sometimes. Otherwise they are very peaceful too.

Very interesting. I hear that their army has nuclear bombs too?

Yes, just about a hundred of them.

But does a peace seeking army need nukes?

Sure, why not?

But just putting two and two together, if those fraction of rogues in the army meet a fraction of rogues who inturn meet a fraction of the rogues of the charitable organizations who manage a recruit a rogue into their airforce and get their hands on a rogue plane and a rogue nuclear device?

It still remains a peaceful nuke?

Hows that?

It will be dropped on some peaceloving part of the world...

And then?

Dont ask...

(Tried to put something together, not sure if it came out the way I intended it to...)