Reality Check India

Fundamentally, stop ramming extraordinary people down our throats

Posted in Uncategorized by realitycheck on August 20, 2011

I dont know about Anna Hazare, but let me tell you who else is a media creation.

Citizen Narayana Murthy

Lt Citizen Nandan Nilekani

Well  the linear growth of the company they founded has plateaued. The ceaseless push of the market to keep doing more of the same thing – quarter after quarter can tire the best.  I welcome Mr Nilekani in public life, but here is the catch.

When these people are thrust on to prime time TV, commenting on crucial government policy, they should be scrutinized with the same microscope as Anna Hazare was. If the media wont do it, we will.

The interview of ex Infosys CEO Nilekani with Sagarika Ghosh of CNN-IBN

Anna’s protest is Naive, Simplistic, Unjustified

I continue to be astonished at the lack of depth in what these gentlemen say on public policy. It is like reading a mismash of 60% IT sales PPT + 20% leadership self help books + 19% jargon +remaining 1% – the words fundamental and extraordinary.  After listening to a long interview you invariably come off with – What did he just say ?

I watched the interview two times and I can say this:

If Arvind Kejriwal or Kiran Bedi had given an interview of this quality, TV Channels will be screaming, “Do you want these people to frame laws ?”

The entire interview was based on tearing to pieces a strawman.

The Lokpal alone is not a magic bullet

Surprise !  no one said it is.

I dont know what his brief was from the government, but he turned this interview into the weakest sales pitch ever for the UID project.

Sample this :

I am just saying that for millions of people corruption is at the point of interaction. When they are trying to get their PDS, when their are trying to get their pension, when they are trying to get their bank account open, when they move from a village to a city and nobody is willing to recognise them.

That is where corruption is.

And that is where the things we are doing like giving an Aadhar ID for every person, especially those who have no ID, (comes in).

Not about petty corruption, this is about high corruption first.

Look, I support the Aadhar project, minus the biometry wallet padding.  But how many people have experienced corruption while opening a bank account ?  How many experience corruption when getting PDS ?  When you move from village to city – you still need address proof with or without Aadhar.  I digress.  The point is the current protests led by Anna Hazare have little to do with this type of corruption.  Mr Nilekani is completely misreading the mood of the people. Sure there is petty corruption, but it is about the high corruption that people are most wired up about.  The media is already trying to paint this to be about petty corruption because then it can say that this is a selfish protest.  The truth is, for the first time in the history of India we have a protest where there are no personal benefits attached.  I had to take a break from twitter because bloggers who I have followed for years mocked the protestors in a non stop deluge of abuse and ridicule. I felt I had to respond to each of them and burnt out in the process.  Do they not see the significance these protests ?  Do you see them shouting slogans on the street on specifics of Jan Lok Pal ? 

 

You know, you have the IT industry, the BPO industry, the FMCG industry, the manufacturing industry, the auto industry, the financial industry which are very competitive open market kind of situations.

Oh really Sir, all the above are comfortably ensconced in their 20 to 500 acre free trade tax free havens. The policy was such that you had to move to SEZ to stay competitive. This created conditions for a large scale land grab which is at the heart of most scams today. This includes the 2G scam, where big realtors are accused by the CBI.  They lobbied the government to extend their tax holidays while there is no strategic value to the country on account of their produce.  This is not to be misconstrued as attacking them, just saying that the extra cash due to tax benefits do not materially enhance their abilities.  For instance, none of them can do what a Huawei is doing to China or a Samsung to Korea.  In contrast, IT companies make us particularly vulnerable to immigration policies of the west.  Many may not know that Infosys is currently caught up in a serious case of Visa fraud before a East Texas District Court related to alleged misuses of B1 visas.  There was a US Senate hearing about it late July which the Indian media blanked out. One could argue that,  B-1 use is an open secret why single out Infosys. If that is the case, then why are Nilekani and Co the media darlings and not other IT players.

Why protest when excellent people are already looking at it ?

Nilekani says he has developed great respect for politicians after his two years in public life. The same two years where mega  scams and coverups happened.

I am very very impressed with the quality of questions, the homework, the due diligence, the seriousness that they view these things with. And it’s very bipartisan, you can’t make out who is from which party because they all ask (questions) on the issue. So when you have such an excellent system of law-making…and you know they have asked us so many thing to clarify, they have called so many experts, they have called people who are against what we are doing to the committee.

So it’s a very comprehensive approach to law-making. So when this law is in front of the appropriate standing committee, why do we need an agitation? It escapes me why this is going on.

Well that is the point, the comprehensive law making with all due diligence has failed us for 65 years.  It will only improve if they are pushed by either voting them out or by stressing them by protests.  It has always been like that.  Why is Anna’s protest so abhorrent to you ? The issue that riles people is the excellent people you cite are making kooky arguments about stake sale vs issuing new shares.

 

I have major issues with the Jan Lok Pal bill.  That in no way impacts my full support to the protests who have a generalized anger on corruption. High corruption. By the current government. Not the retail version.

 

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16 Responses

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  1. Anil said, on August 21, 2011 at 1:23 am

    I think Mr. Nilekani has made some really valid arguments. Jan Lokpal or for that matter any monitoring body without a smoothly running system and processes in place will do no good. It is absolutely true that the majority of Indians face corruption in their interaction with the government for various services. It may be PDS for some, Driving License, Property registrations for the others.. An effective fix is only automating and improving the processes and increasing efficiency and transparency. Mr. Nilekani also had solutions for big ticket corruption in saying that right kind of policies need to be in place. I guess you did not see through the entire interview. In fact of all the screaming and cacophony I have been hearing on the media of late, this is one man who had some earnest direct opinions that came from what he practiced and not intellectual masturbation. He was also open for a Jan Lokpal or Lokpal and openly admitted he was no authority to comment on it.

    About the Anna movement, it is plain BLACKMAIL as can be clearly seen now. First they said they just wanted their version to be included for discussion, then they wanted it tabled in the parliament, now they have a deadline for passage of the bill. This is absurd and ridiculous in a fully functioning democracy as India.

    About the credentials of Infosys as a company, I guess more than a lakh of people have benefited through direct employment, and a few lakhs more indirectly. It definitely is a world class player in the services sector and there is no need to be condescending about it. Every business can do immensely well or fail, one can only try hard. Similarly, other companies in the BPO, IT sector have done quite well do tackle the unemployment problem to a large extent. No one is stopping anybody from doing a Huawei or Samsung in India. We will get there eventually someday.

    And lastly corruption is not just limited to politicians. It is very unfair to just say the politicians are the reason behind it. It is inherent in our society. Reforms are what is required. If the politicians are ineffective we have ourselves to blame for electing them. Go out and vote. Be the change you want to see.

  2. realitycheck said, on August 21, 2011 at 4:24 am

    >>Mr. Nilekani also had solutions for big ticket corruption in saying that right kind of policies need to be in place.

    This isnt about intellectual masturbation, Nilekani does not say anything beyond platitudes and the low grade sales pitch for UID. What value does “the right kind of policies need to be in place” add more than say “We should all be good people”. The right kind of policies are already there, the right kind of policing isnt.

    >> About the Anna movement, it is plain BLACKMAIL as can be clearly seen now. First they said they just wanted their version to be included for discussion, then they wanted it tabled in the parliament, now they have a deadline for passage of the bill. This is absurd and ridiculous in a fully functioning democracy as India.

    Pressure tactics. If this protest leads to cornereing the government and withdrawal of the Govt Lok Pal which is worse, then everything Anna does will be forgiven, correct ?

    >> About the credentials of Infosys as a company, I guess more than a lakh of people have benefited through direct employment, and a few lakhs more indirectly. It definitely is a world class player in the services sector and there is no need to be condescending about it. Every business can do immensely well or fail, one can only try hard.

    This is the social justice argument.

    No fair critique of IT Czars are entertained because it is seen as a elite (almost casteist) campaign against low end work. Never mind they are the ones sitting on 12-15,000 Cr cash not knowing what the hell to do with it. Never mind all their kids study on “donation” seats in elite US universities (Nandan Yale/Murthy Cornell). Nandan was awarded the “Legend in Leadership Award by Yale” for his $5M donation http://opac.yale.edu/president/message.aspx?id=83 . Before you scream “Personal Attack!!” , I would not mention these details if they were in private life, but this scrutiny is par for the course when they are on prime time TV telling us what is right on crucial issues.

    I bet you didnt know about all this, because you have not been told these things by the media. Hail – The middle class brainy messiahs springboarded into your living room.

    Step back NOW and look at the situation. Hazare was being hauled over the coals for a Rs 2 Lakh “temporary spend” from his trust account on this birthday, which was put back in a few days time. Bloggers, who I used to kind of respect mocked him, his village (for no alcohol/meat/tobacco policy) and his undemocratic protests. None of them will put Nilekani under the same microscope. Nilekani drop 2,500 Lakhs (sure its his money but there are corporate tax holiday issues involved) on Yale and no one utters a word.

    Companies like Huawei do not just emerge, they need extensive state patronage in their early years. There is no such policy in the Indian government. In all likelyhoold, whether you are on 3G or on 2G, GSM or CDMA, I am and you are accessing the Internet from a Huawei device. This bothers me to no end. India walking blind into a technology era without basic abilities in value add high tech including material sciences.

    The lopsided SEZ/STPI private enclaves are anti competitive. You would not understand what I am saying unless you are on the ground. For a level playing field – a challenger needs to obtain SEZ space, arrange for water, diesel for gensets, transport bus for staff, landscaping etc etc. This places the incumbents who already have cash reserves at a major advantage. Had the $20B (my low estimate of total value of all tax holidays – call me stupid) been paid to local government, these facilities would be public and incumbents can be easily challenged.

    You are free to choose your heroes. I pick Anna over these guys.

    • Anil said, on August 21, 2011 at 8:38 am

      Its not about picking Anna or Nilekani. Its about having a sustainable full proof or even a model which works in the long run. I was just saying that the ideas put forth by Nilekani makes a lot of sense. With a government system like ours where the corruption is so high even at grassroots level, just putting up a draconian monitoring body and focusing so much on it as if it is some magical potion and a ‘solve all’ solution is just foolish and ridiculous. There is absolutely no guarantee that Lokpal and its members will be incorruptible. They are human beings after all. So the root of the issue is the tardy processes, inefficiencies. We don’t need more of that with a Lokpal office.

      And about your comparisons with Huawei. Let me give you some facts. You so passionately argue that SEZ/STPI model is bad. Huawei is based in a SEZ in Shenzhen. You say existing IT companies have been enjoying tax holidays. Huawei has had government grants sometime to the tune of USD 10billion. Doesn’t that make it difficult for others in China? So whats your point? You say u are worried because MNCs like Huawei, Samsung are doing so well. And yet you are not cool with Infosys and other IT companies getting a push from the government with tax holidays and such. Anyway I don’t want to get into arguing with you and deviating on the topic of Lokpal. Why are we arguing about personalities? Each one has their own background. Just because Anna lives a simple spartan honest life, does he have the right to dictate terms to the nation? Just because Nilekani is a rich businessman, who can afford to send his children to Yale, can he not offer viable solutions on national TV. He has run an organization which has a workforce of over a lakh. Everyone is entitled to have an opinion and more so such accomplished men as Mr. Nilekani to voice them over national TV.

      Just take a look at your solution. Vote them out. Really? And then get BJP. They do the same thing, so vote them out again. Is that it? I have seen what process change can bring to services from the government. It has happened in Bangalore to a large extent in the RTO, Bangalore One and several such initiatives. One thing is for sure, no matter what you do there would be corrupt crooks be it in politics or elsewhere. But with better processes, it would make it that much harder for crooks to device plans to beat the system and profit. Thats the only thing that works in the long run as can be seen from several examples across the world with well functioning democracies and private organizations. Monitoring bodies can play a small role after a well functioning system is in place, otherwise you can’t scale it to monitor everyone in the system.

      • realitycheck said, on August 21, 2011 at 9:41 am

        No, I am saying extend all possible tax benefits including SEZ to companies that can be as strategic to India as Huawei has been to China. Read my dozen posts on SEZ with facts and my specific takes on SEZs like Shenzen and Jebel Ali https://realitycheck.wordpress.com/2006/11/08/sez-online-chat/ https://realitycheck.wordpress.com/?s=Shenzen

        Scrutinizing Nilekani is legitimate. If he wants to test public waters, he better be prepared for it. Yes the fact that he gave $5M to Yale and got both his kids in is important public knowledge. Why ? Because he could be framing our education policy next. Do you they are scrutinizing Anna’s military record a we speak ? They want to attack him for getting the job as he was only a 7th std pass.

        I am saying his company, and by extension he, is one of the primary beneficiaries of the tax holiday scheme. I further assert that unlike Samsung/Huawei companies that rely on this model put India at a permanent disadvantage because of vulnerability to foreign immigration policy. Huawei/Samsung deal with products which have protection under various WTO statues as well the the thirst of a human to get a better product cheaper. This does not translate to humans as much as we try. What does Infosys do with the cash from the tax holidays ? It invests them in mutual funds, hedge funds, and land. Can you tell me what Huawei and Samsung do with their cash ?

        Adhoc tax holiday, both direct and indirect, by the way is the grandest discretionary power – so it is a bit rich of him to lecture us that discretionary powers of the government is the root cause of big ticket corruption.

  3. realitycheck said, on August 21, 2011 at 9:43 am

    Dont know why wordpress ate half my letters. Well hope my above comment makes sense.

  4. Anil said, on August 21, 2011 at 11:35 pm

    How do you know which companies are strategic to India? And why can’t that be Infosys or some services company? What makes you think that Infosys is any less significant a player? Infact the Chinese have invited Infosys to set up shop there to learn from them. Just because it has got itself strangled in some visa issues doesn’t mean the whole company has a flawed business model. There are a 1000 other things which the company has implemented quite well to reach the level it has today. Every company is in some legal trouble every now and then. And about SEZ policies, there is always room for debate and improvements. What may be good for China in a communist setup may not necessarily be good for India. It is for the policy makers to decide.

    And what makes you think that Murthy or Nilekani’s children wouldn’t have made it on their own in these institutes. This kind of baseless allegations without proper source of information is very very unfair to them. Let me tell you one thing. These big business schools often prefer to admit scions of big companies for several reasons. One, they have a fairly good chance of being influential leaders in society later. Two, It helps establish a network that help the school and its alumni alike. Imagine you being a classmate of an Ambani or a Tata’s son. It is definitely beneficial both ways. There are several cases like that. Now whether this is good or bad is debatable. But definitely you can’t call it corruption. By the way, Murthy’s son is a very accomplished student as I know from some circles. So don’t go about personal bashing without knowing facts. And I guess its better you keep the arguments to the merits of the Anna Hazare fast and their demands instead of getting personal about third parties who have their opinions.

    Your argument about comparing Huawei and Infosys is getting really weak. Infosys is not a charitable organisation. It is a business with a sole aim of making its shareholders wealthier. So they can do whatever they deem fit to make it profitable. If they think just hoarding all cash up in a bank locker is the best bet, so be it as long as their share holders know. Government gives a tax break for a reason. It sees employment creation which otherwise would have been difficult. It hopes to develop and nurture an ecosystem to attract IT industries. If you feel the provisions and concessions made are exorbitant or unreasonable, fight for it. The reason such a thing is happening is probably because there is no policy in place which clearly defines and justifies concessions. This is something new happening in India, maybe it will mature and eventually we will have some policies and procedures in place. Please debate and raise awareness. Thats exactly what Nilekani said in the interview if you listened carefully.

  5. Nerus said, on August 22, 2011 at 1:39 am

    I refer to this sentence in your article: “The point is the current protests led by Anna Hazare have little to do with this type of corruption”. You are referring to petty corruption in PDS shops etc.

    On the contrary, one of the most irreconcilable aspects of the 2 lokpal bills (Jan vs Govt) is the jurisdiction to combat low level corruption. The Govt bill (rightly, in my opinion) limits Lok Pal jurisdiction to Ministers and Group A officers. The Jan Lok Pal bill demands that *ALL* govt employees be brought under the jurisdiction of the Lok Pal.

    Ipso facto, the Jan Lok Pal bill, and the protests, have much to do with petty corruption.

    • Barbarian Indian said, on August 23, 2011 at 8:54 am

      That is a very valid criticism of the JLP – scope must be metered to practical limits.

      However, disagree the protests are about petty corruption. We now have strong feedback from the ground, they are about overall disenchantment with economy, lack of opportunities, sense of injustice – ergo mainly big ticket issues.

  6. rc said, on August 22, 2011 at 2:10 am

    >> Government gives a tax break for a reason. It sees employment creation which otherwise would have been difficult.

    Prove it.

    Tell us how withdrawing tax breaks impacts Infosys or any of the SEZ heroes in anyway. Do you know the size of Huawei and Samsung R&D budget ? They need the tax breaks. You seem to admit our IT companies invest tax break money into Mutual funds and Lank banks and that is good for us. Innovative !!

    The fact that both Nilekani and Murthy had paid millions to Cornell and Yale and their wards study there should be public domain knowledge. Why ? Because they are being sold to us as having middle class values and we need information to buttress that. There is nothing wrong in paying with his own legally earned money to send his kids to Ivy league. I am not saying the kids are dummies, clearly they arent.

  7. Anil said, on August 22, 2011 at 11:40 pm

    Prove it? Go to Bangalore and ask the people if it werent for the IT sector, would they think so many jobs would have been available in Bangalore. Would the government manage to provide employment for such a large number of people. Added to that, there is so much of innovation happening because of the environment.

    You are not getting my point. Infosys works for the share holders and they always do what is best for them like any company does. There is nothing innovative about that, thats how companies work if you didn’t know. These tax breaks given to companies in SEZ affect the bottom-line and make them more competitive. You please clarify your stand on Huawei and tell me in what way are they better. I don’t understand this mindset that service companies aren’t as great or strategic as product companies. Huawei wasn’t also known for innovation by the way when they started. They make cheap knockoffs of other products and they have had their share of legal troubles. Even today, they struggle with service delivery and integration and wonder how the Indian companies are so good at it. I know because I have worked in the Telecom sector. By the way Huawei is a private company and nobody really knows what their REAL profit margins are.

    You are making your own conclusions arbitrarily just because you feel so. I don’t think Nilekani was introduced or people perceive him as having a spartan middle class life. But he lives way below his means is a well known fact which is a personal choice he has made. I don’t think this choice in anyway affect the views he has. I don’t understand what point you are trying to make.

  8. rc said, on August 23, 2011 at 2:39 am

    >> Prove it? Go to Bangalore and ask the people if it werent for the IT sector,

    Change it to, “… if it werent for the tax breaks”. Please dont turn questioning the tax breaks into attacking the IT sector because it is low end.

    Sure it adds to their bottomline. Why is their bottomline important to the Indian people ? What if they had 2000Cr cash reserve instead of 15,000Cr.

    Why is a healthy bottomline for Huawei important to the Chinese people ? Because a healthy bottomline allows them to invest into R&D and manufacturing (Do you know Huawei’s tiny Indian R&D unit is bigger than that of most Indian tax beneficiaries ? ). The more Chinese people pad Huawei’s bottomline the more ground they cover. Today, except for advanced material sciences they are totally independent of the west.

    I am sorry you think Nilekani and Co should be treated with kid gloves. Any contrary opinion is seen as a ‘IT social justice attack’. Repeat : I dont care what work they do. If it doesnt add strategic value to India – just pay normal corporate/excise/duties like everyone else. Period.

  9. rc said, on August 23, 2011 at 2:40 am

    Also note that elimination of tax breaks will result in rationalization of tax for all companies. This will lead to higher growth, better infrastructure, better accountability.

    In other words, Inclusive Corporate Growth.

  10. Anil said, on August 23, 2011 at 10:27 am

    The lower bottom-line will give little incentive for anyone to take that plunge and setup shop. Yes, there will be millionaires made out of this. You are free to become one too. But again, if you feel SEZ incentives are way too much compared to the benefit to the Indian people, you can fight through protests, representation to government or whatever legal means there are. But just saying Infosys is not strategic to India etc are plain baseless and that too comparing it to a company like Huawei.

    Please don’t go into the same thing over and over. What difference does it make whether a company invests back in R&D, manufacturing or in a service workforce? As long as they have a working business model, it doesn’t matter. Not all companies need to invest heavily in R&D to be good. Each company has its core business or USP in which they are good at. Not all companies require to be R&D centric. Having said that, there are other companies in India too which focus on R&D.

    I didn’t say Nilekani should be treated in anyway. I just said, don’t let his background affect your judgement on his views. Look at the logic of the argument and find flaws. Don’t get personal on where his kids studied or how much money he made. That frankly can’t really make a difference to a persons argument or views. Does it? You were the one dismissing his views because he was supposedly shown to you to be one with middle class. Don’t mix that up with taxes etc. And yeah you saying repeatedly or even shouting repeatedly that Infosys does not add strategic value to India does not change a thing about the way it is.

    • Barbarian Indian said, on August 23, 2011 at 10:53 pm

      But again, if you feel SEZ incentives are way too much compared to the benefit to the Indian people …
      I didn’t say Nilekani should be treated in anyway. I just said, don’t let his background affect your judgement on his views ..

      Sorry to butt in, but here is what I feel about the issue.

      SEZ benefits were justified for kick starting companies. These behemoths no longer require any kick starting. Now, obviously letting benefits expire will reduce over all revenue (simple econ) but let is think of this for a moment.
      1) SEZ benefits no longer required
      2) Govt still providing SEZ benefits – despite normal instinct of Govts to try and fleece more
      3) coincidentally, certain corpo honchos are becoming public intellectuals

      Do you see a problem with that? I think this is disastrous.

      Just like free agent voters among individuals exist, corporations can also be “free corporations” or “crony corporations”. Crony corporations will do exactly what they can – stifle competition, bribe ministers, acquire land banks for a pittance to bulk up balance sheets, pay employees less and so on and so forth.

      Arbitrary corporate benefits are far more dangerous than arbitrary individual benefits. SEZ and other absurd corporate incentives must be rationalized and indexed as much as possible – at the very least the discretion element must be eliminated.

  11. Pappu said, on August 25, 2011 at 3:57 am

    Service industries aren’t close to being as great as product companies. Please talk to someone working in a reputed product related startup and someone from Infosys. The skill level of the ones working in product development is considerably higher. Infosys employees sound like duffers on tech. Btw, bangalore is infested with service oriented people who haven’t a clue about ‘innovation’. ZOHO came out of Chennai 🙂 But I’ll bet on Pune to be software’s intellectual capital.

    It also matters if the company invests back in R&D rather than services, because it sets up a decent environment for innovation. Otherwise you are just nurturing a half evolved tech brain.

    Also Nilekani should learn to shut up along with N Murthy. Bring on the hackers, not these fkers.

    RC,

    SEZs can be set up with electronics manufacturing too. It’s not going to help India come up with great electronic products. Lack of local talent is the major stumbling block. Its true both for software and hardware. It’s funny that the Indian govt thinks setting up a couple of semiconductor foundries will boost electronic manufacturing industry here. The margins are so small that none of the major industrial houses will even bother.

    I think India has missed the bus on Electronic Manufacturing Services, and it’s impossible to compete with Chinese, Taiwanese now unless it puts import barriers like the one Trai is attempting to, which will increase the cost of these devices in the local market, plus a decline in quality, atleast in the short run.

  12. Anupam said, on August 28, 2011 at 4:56 pm

    I think I see a great flip flop on your side here.

    The caveat emptor post was brutally against the movement. That post was one of the first few posts I saw on the Jan Lokpal bill and had alarmed me considerably. Only on attending a question answer session with the one of the men who made the bill, Justice Santosh Hegde, and on reading the draft myself, was I reassured that it wasn’t apocalyptic as it was supposed to be.

    The bill surely has some points that merit debate. But we can see that the system has its own checks and balances in place to see that it is moderated. What we must do through the protest is to make sure we engage the government and not let them fade away from action as they usually do.

    This movement, no matter what, is a watershed development in this country. Even to make corruption an election issue, such a movement is vital. I am glad to see that our opinions have converged somewhat after having started poles apart.


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