Author: Rajesh Jain

This brings to a close the contest. Some closing thoughts:

• We need to educate ourselves about the process of development. This is important if we have to answer two key questions – why is India poor, and what can be done to make India a rich, developed country in a generation (say by 2040)?
• India’s challenges are far too big for us not to think big – we need bold ideas and action. Little of this seems to be forthcoming now. We seem to be in a paralysed state at the Centre when it comes to decision-making.
• In India, there is little discussion around big ideas in the English media. The here-and-now news stories take precedence over educating readers and viewers. But then, that is what the audience wants, perhaps.
• Democracy is about informed voting. In India, we are oscillating between abstention and transactional voting (cash for votes, in a new avatar). Is there a way we can inform more voters?
• In a week, we will know what the voters of five states have decided. As the new governments take office, is there a way we can engage with them to ensure we bring forth better policies to drive development and governance?
• In the next elections, we need one party to get 300+ seats on its own in order to ensure a stable government that actually implements the right policies for the future of the country.

I will explore some of these topics in the coming weeks.

Winner 11, Abhishek Puri:

Broadband.

This is one answer and highly underrated option. The following scenario is envisaged:

1) Optic fibres running across to get the data without caps. We need fibre to home instead of outdated copper. Last mile access is contentious; while opening up last mile for private players is contentious, this needs to be debated. Britain has opened it up under strict regulations and British Telecom has been forced to upgrade it’s infrastructure to retain customers.

2) Heavy public investment for scalable architechture. Not 3G guzzling up spectrum but community Wifi’s (pay per use or perhaps involving the municipalities making the people accountable directly for the level of involvement).

3) Create an ecosystem of open source applications to harness ideas; make it easier for people to access services. (Open Source standards promote interoperability; closed source is meant for perpetual profiteering at public’s expense).

4) Opening up the Government’s accumulated data through API’s etc; create models around it. For e.g., data from GPS installed in public transport would easily display the estimated arrival time through SMS if needed on the mobile phones. (“Hacker culture” is missing in India; most of the Bangalore flotsam is moronic army of debuggers and script kiddies).

5) Teleconferencing would make it easier for people to people contacts; Gujarat has shown the way! Why can’t India have something similar to Skype? (There is a move to have something similar in the GNU world where encryption would be based on open standards).

6) Education sector would get a boost; not only invite faculty, stream educational videos, hold tele-sessions but teach kids for a wonderful world of Internet. (Pilot experiments in Bihar/Gujarat have been well received; the idea needs scaling up).

7) Spin off benefits from e-commerce applications.

The potential is huge; if you are planning it to share with BJP, the easiest way out is to break the ISP’s monopoly, hold TRAI responsible for execution (not DoT) and revise Broadband definition to at least 2 Mbps (UNLIMITED, WITHOUT any caps).

Anshuman Goenka’s second response to Question 10   “How Can We Change the Functioning of the Education Sector?”:

Start with an imaginative vision for the sector.  This could be, for illustration,

• Accelerated universal literacy: Currently India’s literacy is 74%, up from 65% in 2001. Functional literacy is lower. At the current rate, we would be fully literate by 2035, functionally literate perhaps a decade later. Instead, India should target 100% by 2020. Simultaneously, we should raise the bar of literacy reach completed universal primary education by 2025 (~40% of the 360m school-aged children out of school).
• Skill train 300 million non-farm professionals by 2020: Organized sector employs about 6% of India’s 450 million labor force, to which 12 million are added every year. To be globally competitive, we need to increase organized sector employment to 50-60% of the labor force, and therefore, train about 300 million people in the next decade across blue- and white-collar jobs which will be absorbed in manufacturing & services (paying $5-50,000 pa at entry). This will need a 10x increase in the capacity of higher educational system (current intake about 3m) and de novo creation of a defunct vocational education system. Sector-level targets across sectors (eg construction, textiles, IT etc) should be developed – but these should be guidelines, and have adequate buy-in at the industry level.
• Develop India as global knowledge hub: Target to develop new 25 world-class, research-intensive universities in the next decade (one in each state, and one in each major academic domain) and 500 in the following decade (one in each district). Simultaneously, this should be linked to a measurable output, eg increase India’s share of world publications and global patents from the current 4% and 2% respectively to about 15% (our share of world population is about 16%; this is also a possible goal as China does 9x our patents)

Implement policy and organizational changes to reach this vision.  I would focus on three areas, and develop a detailed plan around each area.  These would be:

• Role of the state: Instead of the provider of capital and services, the state should create this vision and catalyze its achievement. This would entail ensuring equitable access (eg universal voucher-based access till the secondary-school level, merit-based access using loans & scholarships thereafter), playing the role of a regulator (eg homogenization across state educational boards, accreditation of universities) and enabler (eg a student loan guarantee program). Selectively, the state should continue to be a provider too – the IITs and IIMs have been great success and the state could lead the creation of the first two world-class universities.
• Role of the private sector: Private enterprise and capital, including foreign participation, should be welcomed at every stage – from primary school to higher education. Specific areas where private capital may not initially flow but which have positive externalities (eg schools in upcountry India, training of blue-collar professionals and long-gestation capital intensive projects such as research-oriented universities) need to specifically stewarded through a combination of fiscal incentives, output-based rewards and JVs between the state and the private enterprise. Simultaneously, there needs to be a comprehensive regulation of private participation; the regulator should be independent with representation from the state, industry bodies and topic experts; the scope of the regulator should cover entry certification, quality monitoring & accreditation, and economics.
• Role of citizens: Individual, family and community support towards the larger educational vision could be ensured with public education & civil society initiatives (eg induct public figures from film & cricket in a Teach for India program), individual and family-level support (eg enhanced tax breaks)

Monitor and steward the implementation

• Simultaneous central and delegated responsibility: As a symbol of political commitment, the senior-most minister in the Union Cabinet should be the Education Minister (and not be diluted into the wider HRD) – this would bring political capital behind this change. The Central Education Task Force should draw upon private talent (like the PM’s EAC or UIDAI) and have the ability to steward the change. At the same time, this Task Force should be linked with state and village-level citizens’, students’ and teachers’ associations to collect feedback and monitor change.
• Think independently of but work together with the existing educational system: We need not be fettered by the bad habits of our legacy systems and think independently of the system to create something new. However, in doing so we cannot disregard what exists – and need to carefully, selectively use the legacy systems as a tool of change. For example, we could recruit selectively from the current system, draw entrepreneurs from it, overhaul legacy infrastructure for new uses.
• Intermediate targets: Each aspect vision should have an intermediate target, eg, to move from 74% to 100% literacy in a decade, set a 5 year national target of 90%. Also, break it down at the level of each state & district – so for Bihar to move from 63% to 100% it needs to achieve a 4% improvement every year.
• Transplant best practices: In 2011, literacy in Kerala was 94% as opposed to 63% in Bihar. By creating a professional task-force familiar with the two states, we should try to identify 8-10 key state level policy tools from the high achiever regions that can be used elsewhere. Further, within Bihar, select districts and blocks that need most intensive effort. For another example, draw upon the success of ISB to develop a model university in areas such as infrastructure, curriculum & faculty.

Continued tomorrow.

Winner 10: Anshuman Goenka, in response to Question 1 – “What should the government’s role be in India?”: 

To answer this question in the context of India 2011, and avoiding the temptation to venture into political theory, one can think of two main areas into which specifics can be built in – the political role, the provision of essential public goods, and, the economic role. While public goods are sometimes placed within the economic role, it may be argued that public goods are in fact wider.

First, the political role – this is a set of issues under the broader umbrella of nation building. A country like India requires thought leadership from the government, in addition to whatever other arms of civil society (eg, academics, media and business) offer. Government needs to delicately balance – on the one hand, the need to be not intrusive, and on the other, firmly implement the agenda it has agreed. In the first place, this agenda should mean an implementation of law and order. However, more than most other societies, a changing country like India needs the law to constantly evolve and reflect the needs of the society. Often, implementation of the law will place the Government in a tricky position when it is seen to be in conflict with either the conservative elements (eg in enforcing laws against child marriage, dowry or less commonly pre-natal sex selection, in Hindu Code Bill or Muslim Personal Law) or their liberal counterparts (eg in laws against homosexuality). In both cases however, it is the business of Government to have laws that reflect and interpret the demands of society in the context of time, and once made have them clearly enforced.

In the India of 2011, this also involves the critical issue of civil service and judicial delivery, of addressing the related issues of corruption. In addition, for example, the issues raised by anti-corruption NGOs, by activists close to the tribal people displaced by mines, SEZs & dams and by regional platforms in states as distant as J&K and Nagaland – all these are important and the business of the Government, within its political role. On all these, and similar issues, the Government should be seen as aware of & sensitive to shades of society on raise issues of interest only to a segment and not the whole population – and where, issue by issue, a political balance needs to be established, between the demands of the segment and the needs of whole, based on the merit of the case.

Of course, the political role also involves the areas of foreign affairs and defense – both critically important to a country of India’s global and geographic standing. Less clear is the even broader business of nation building. In a country where large masses have been precluded from formal education or work, the agenda of nation-building must include, at a minimum, offering awareness and hope, to bring those precluded into the mainstream. But how does a Government offer awareness & hope, and at the same time not get into an ever spiraling compound of entitlements for education / work / food / healthcare? Again, in a task of balancing, the Government has to pick and prioritize areas which should be the domain of the state.

This brings us to the second area of public goods. There is both a political and an economic argument (market failure & externalities) for public goods. In some areas the case for entitlement and the role of the Government is widely agreed, eg in disaster management, in primary education & primary healthcare, in protecting the environment and in ensuring large scale public infrastructure. However, in almost all these areas, it is now widely agreed the private enterprises are better for service provision. Then, the role of Government, as a regulator or administrator, is to ensure that private provision is fair & efficient. It is important for the Government to define the boundaries of public goods – based on a democratic, parliamentary process. If stretched to include airlines and textile companies, this argument can lead to the unmitigated disaster of state capitalism.

Thirdly, and finally, an important role for the Government is economic. When economic activity largely lies outside the business of Government, and when the need for economic growth is widely agreed, the Government’s role is limited to an enabler, catalyst and umpire. Some areas such as central banking and revenue administration must be in the realm of Government. India has achieved a rate of marginal tax that is among the lowest in tax-levying countries, but now needs to ensure that tax administration is fair & efficient, encompasses a larger number of citizens. India’s financial administration must balance inflation and growth, must ensure low and high-compliance taxes and yet pay for public goods.

All of this is again about balancing. In some senses therefore, this is similar to the answer to the question of what should be the Government’s role in India. It should be, and seen to be, responsive to society, dynamic over time, and above all fair & efficient. Sadly, that sounds very general and hazy. But perhaps this haze itself has a merit – for it requires genuine stewardship through the haze that is human and humane, and is not reduced to a narrow, algorithmic implementation of clearly defined agenda.

Continued tomorrow.

Winner 7:

Prakash, in response to multiple questions:

1. India should have a high land tax. A high land tax will automatically incentivise the best usage of land. A tax slab, beginning at land value of Rs 15 lakhs onwards, maybe. That should protect most subsistence farmers.It will either improve the government revenue, or bring land value down. The first improves welfare by reducing the inflation tax, the second improves welfare by reducing the barriers to entreprenurial activity.

2. Announce an employment prize. Announce a really large prize for employing people. Calculate the mathematical product of all salaries paid out to people within a particular period. Give the prize to the entrprise that has the highest score . It will ensure that those desirous of the prize will have to employ a lot of people to win the prize.

**

Remove land ceilings and tax land instead after taking out a slab for protecting the small farmer. use the proceeds of this tax to scrap all octroi and entrance taxes. India is to be treated as one agriculture market.

**

1. Charge market rates, for electricity and fuel. Crackdown on theft of electricity.

2. Boost infrastructure investment into electric rail, intercity and intracity (metros and trams). The less we depend on diesel, the better for us.

**

For tertiary education, scrap the idea of provision of education and concentrate on certification.Have free entry of private institutions.

Winner 8: Pratik Mhatre, in response to multiple questions:

Focus on urban centers and focus less on far-flung regions in terms of infrastructure development (even providing reliable high-speed Internet access can open up numerous business opportunities). Instead divert those resources on making our metropolitan regions more productive and efficient. Foster an entrepreneurial climate by creating knowledge corridors around institutions of higher learning. Do not fight the natural trend of clustering by trying to spread economic growth around. Some regions will always be more productive than the others. We can instead focus on making them stronger by playing to its strengths.

If there is anything we can learn from the urban development of Silicon Valley or Research Triangle in the U.S., it is the underlying importance of the feedback loops of higher education institutions and the talent they attract. The trick in making the graduates stick around by offering them a climate of entrepreneurship through social & professional networking and heavy investment in infrastructure that focuses on quality of life. Urban areas with great weather already have an upper hand and India seems to be blessed with such regions.

Winner 9: Jeevak Kasarkod, in response to multiple questions:

Population and Poverty Alleviation: Through legislation certain deterrents to a booming population needs to be employed. The suggestion I provide will be highly unpopular but it needs to be kept out of partisan debate to be effective and adopted. I recommend heavy taxation on having more than one child and some policy similar to a cap and trade scheme. If you keep the human/emotional aspect out, I see the population growth problem to be similar to the green house gas emission problem.  Both are exponential growth curves that fast outstrips a potentially linear resource growth in the very near future. If that truly is the case then GHG cap and trade schemes can be applied to human population curtailment. One possible scenario is, if a higher income level family intends to have more than one kid they will have to pay a hefty sum to an entitlement scheme where you have volunteer lower income families that have decided not to have babies. This way you deal with the population problem and some scale of redistribution of assets.

National Security through non-intrusive foreign policy: No military intervention in foreign countries where India has no personal interest. India can contribute with foreign aid or volunteer programs but no military intervention even if it is the morally right thing to do. We need to first fix our internal issues before we spend abroad.

Jeevak’s full note is available here.

Continued tomorrow.

From a blog post a year ago:

If I knew a few years ago what I know now, I would have done a much better job in building my present business.

Watching the Cashflow: It has been rightly said that the one of biggest reason for failure small businesses is (deteriorating) Cashflow. If billings take time to convert into cash, then it can lead to a difficult predicament – expenses continue to happen on schedule, and incoming cash slows down (even though sales numbers may hit their targets). So, keep a watch out for collections in the business, and monitor aging reports of debtors (especially those over 60 days) closely.

This week’s links:

• The Really Smart Phone: from WSJ. “Researchers are harvesting a wealth of intimate detail from our cellphone data, uncovering the hidden patterns of our social lives, travels, risk of disease—even our political views.”
• Margins: by Fred Wilson. A second post. “When you think about your business; starting it, building it, scaling it, and financing it, pay a lot of attention to your margins. Understand what kind of business you operate and where it fits in the margin universe.”
• The New Geopolitics of Food: from Foreign Policy. “From the Middle East to Madagascar, high prices are spawning land grabs and ousting dictators. Welcome to the 21st-century food wars.”
• Getting Indian Entrepreneurship right: from Wall Street Journal. “A new start-up is required to go through 37 procedures to obtain a construction permit and obtaining a permanent water connection permit requires a waiting period of 45 days.”
• India’s Big Story: by TN Ninan in Business Standard. “Even as the country grapples with in-your-face corruption and complex challenges in economic management, bear in mind that rapid economic growth, dramatic changes in Corporate India and a transformed quality of life for many millions, has been and remains the most compelling story of our times.”

Winner 5: Rakesh Babu, in response to multiple questions:

We need electoral reforms first, then you can continue with the economic reforms. This will solve 90% of the problems
**
Information to farmers about what crops to grow, what the prices are etc.
**
Make users pay more for using electricity at peak time.
Give incentives for solar energy.

Winner 6: Umang Saini, in response to multiple questions:

In two words – Be Transparent and Collaborate
a. Transparency via IT – Realtime analytics on government spending, projections, major initiatives for big social programs. Hard deadlines, milestones and clear roadmap.
b. Collaborate – Let big institutes succeed by collaborating with the best in the world and fulfill their roles.
Side note on Energy / Infrastructure – It’s bad, but we have tolerated far worse in the past. The assumption being that above two will help resolve some challenges in Infra, Transport, Healthcare, Agriculture, Energy, Education, Judiciary etc. as well.
**
Incentive Structure –
Current policy incentives force the agriculture sector to maximize production and get out of the way. Thus longer supply chain reduces the end benefit to the producer.
To short-circuit the supply chain, small and medium farms need to integrate vertically and cross sell additional products like carbon, water certificates, organic products etc.
One example of increasing farm incomes are by tying up the rewards to sustainable practices can be seen in this presentation link
Equivalently Jwar / Bajra should give higher returns to a farmer compared to Basmati rice , for them to shift to these crops. Current policy is forcing farmers to plant paddy and bombard it with subsidized chemicals in order to maximize their incomes and short term gains.
**
Reliability –
There is huge potential in smart micro-grids which will match demand with supply in a more efficient manner. Standard demand-response techniques which create Negawatts will thus ensure more reliability.
Generation –
Good potential for Micro-power generation plants – 100kW to 2MW in Gas, Nuclear, Solar and Wind. Bloom Energy Box being a good example of innovation in micro clean energy generation.
Distribution –
Electricity act 2005 allows to break distribution monopoly enjoyed in cities, a fixed last-mile distribution tariff, say 0.40p per unit kWh will ensure that theft will automatically come into check and systems/services/reliability will improve.
**
I agree that villages can no longer be islands, however their micro-economies still cannot afford solutions deployed even in tier 2-3 cities. They seek solutions that scale down to their immediate short term gaps

Continued on Monday.

Winner 3, Mockingbuddha, in response to Should India be a soft state or an assertive one?

A little bit of history.

America faced this problem while it was growing big, in fact one of its Presidents got elected for saying that America will stay out of world politics. They even tried to stay out of World War II.

As we can see, circumstances forced them to a bigger role, and to say the least, they have acquitted themselves pretty well.
India too can, and will, when the world stage calls for it. Till then let us stay content playing second fiddle and minding our own business…

We got a million problems to solve.

Winner 4, Sushil, in response to multiple questions:

The role of the government very simply put should be to use the countries resources for the betterment of the country (not themselves).
**
Next Generation:
Rather than teaching them that this is how it works, we need to take the initiative to tell them what is correct.
Most people who break traffic signals on a daily basis are educated urban people. So clearly education is not only what we need. There is a higher social responsibility that we have !
**
1)introduce age limit for politicians
2)minimum qualifications,
3)use e-governance extensively
4) police and judicial reforms
5)bring all including PM under empowered Lok Pal
6) plug loopholes and leakages in expenditure.
7) computerise land records
8)connectivity on top priority to remote villages-
9)grid independent per generation and distribution
10) use communication technologies to provide distance education, health, information, training.
**
India needs economic reforms in almost every field, but the 2 major ones in my opinion are infrastructure and agriculture.
**
The government-citizen model should be that of coaching (selection) staff – cricket team. The coaching staff (citizens) will propose changes, corrections, improvements in their own right, but the final execution is that of the cricket team (government).
Accountability and performance is the only way that the government will keep working.
That said the selection committee/coaching staff should be specialists in their particular field and should be representatives of a bigger society.
**
What I am suggesting here is that every farmer should not be given a tax break or free seeds or fertilisers … It should be directly proportional to their incomes and farm outputs. Today there are farmers who drive in the fanciest of cars and have incomes of more than 1crore from farming, but still use all the incentives.
Also there should be a timeline or number of times that the same family or its generations can use “right/incentives”. WE need to make them “self-sufficient”
**
Power generation has to be focused on renewal energy sources. For a country like India where we have sunlight for 10 months of the year, we have been extremely poor in investments for research in Solar Energy. The government needs to come about with revolutionary investments and incentives to make solar energy attractive for the common man and not just a Tax Deduction for the wealthy few.
**
Indian agriculture needs everything that we can give :
1) Better seeds, fertilizers etc.
2) Better water supply systems so that there is less dependency on “Rain”
3) Cheaper loans and freedom from “loan sharks”
4) Better storage facilities – warehousing/cold storage
5) Centralized markets for fast selling of produce and hence reduction of losses.

Continued tomorrow.

Over the next few days, I will reproduce excerpts from the winning entries. The detailed responses for most of the winners can be found in the comments of the original posts.

The winners, in no particular order:

Winner 1: FirstBallSix, in response to “Is there an alternative to entitlements for the social sector?”

At this moment, India has a huge demographic advantage in terms of the percentage of overall population that can be part of the workforce (in other countries, the population is aging). This is India’s moment – we should do everything to seize the moment.

The best role the government can play here is that of an active enabler. Just a passive “no hindrance” role will NOT suffice (though many people want it that way) – we need an absolutely positive approach to this decade and the next.

Winner 2: Aaren, for answers (reproduced partially below) across multiple questions:

The objective of government in India should be the provision of some key services – law & order (public safety, the enforcement of contracts, etc.), defence (protecting the people from external threat) and the development of MINIMAL regulation to permit markets to solve all other problems. As an extension of this, the government should not be involved in the provision of employment or education, industrial / agricultural policy should be restricted to minimal governmental intervention.
**
Direct Cash Transfers – based only on economic criteria, none on on caste / religion based critiera would be a good starting point.
The long term, the key is to move AWAY from an entitlements-based regime. We need to give people opportunity to access the market, and stop there.
**
Local government is a great place to start, but the key is to empower people.
**
Given that increased urbanization is inevitable globally, and even more in India, the solution does not lie in giving rural Indians a method of building a good life for themselves in their villages, it lies in improving our existing and developing new urban communities where the rural populace has a chance to improve their lot.
**
We need to –
a. Permit private sector investment and involvement in education. Nothing quite works like competition and the profit motive, the market will weed out poor performers
b. Promote school vouchers and cash transfers to the poor to pay for schooling – school choice and/or charter schools are great methods of improving access and quality to primary and high school education
c. Look to build more universities – either completely private or with governmental support or in public / private partnership
d. Appoint regulators who will ONLY overview curricula from a standpoint of minimums in skills or knowledge that students should have AND monitor testing efforts to see how much students are learning.

Continued tomorrow.