Through the Looking Glass

  What the numbers say—how men and women spend their day differently; and how much bijli, sadak, paani can improve productivity Here’s a question that has been of interest to me: in a country of 1.4 billion people, if only approximately 400 million are in the workforce, what is it that the remaining billion people do? We now have some answers. Time Use Survey 2019, compiled and released by the Ministry of Statistics and Planning Implementation (MOSPI) reveals interesting data about the pattern of time use by Indians. This is how the day of an “average” Indian goes. (Yes, there is no average Indian person – this is the average of the times spent across men and women in rural and urban India.) Out of the 24 hours in a day, almost exactly half is spent in “self-care and maintenance” – this leaves only 12 hours, which is typically used for these five activities: employment and related activities (2.7 hours), unpaid domestic services for household members (2.2 hours), culture, l...

Financial Express Shape of economic recovery will determine employment, debt and exchange rates The immediate fiscal deficit dynamics and growth outcomes for India post Covid-19 lockdown have been the subject of intense analysis and discussion. The human crisis of lives and livelihood did demand both an immediate and urgent response. With the lockdown now opening and economic activity picking up, it is important to look beyond FY21 to see how India could fare in the first half of the next decade. Discussions have focussed on whether the economic recovery will be L, U, V, W, or a swoosh, a la the logo of a famous sports brand. These descriptors refer to the shape of the chart when plotting real GDP (on y-axis) over time (on x-axis). The GDP in FY20 is estimated to be Rs 204 trillion (Rs 204 lakh crore) and if it had continued to grow at 8% in real terms, GDP would have reached Rs 300 trillion by FY25. Depending on the inflation trajectory, the nominal number would have been highe...

Financial Express Development and Progress go hand-in-hand; getting on and remaining on the ladders key to economic growth for individuals and nations As India changed and economically progressed, it brought hope. There was indeed a pathway out of the poverty that the slow growth of the many decades had foisted upon the society. There was now a way to get out of ration queues to become tax-payers – from being dependent on the State to giving back to the country. A sliver of the population would jump right off the subsistence farms and move to the cities. The pathway was to get into one the burgeoning services sectors: get into IT to bring in the moolah or become an air-hostess to serve the customer flying in and out of the country; sell the young generation a home, or the loan and insurance on it. One needs to have found the right steps on the Ladder of Development to eventually get on the Ladder of Progress. The Ladder of Development The ladder of development is basically a...

Financial Express This requires confidence, coordination and capital; resolution can't be imposed using policy actions When commemorating anniversaries, we tend to reserve our special attention for round-number, decadal years. Last year, around this time, the world—and India—remembered and recounted its lessons from the Great Financial Crisis (GFC) that reverberated across the globe in September 2008. Since it is the nature of history to repeat, but not to rhyme, decadal recounting of experiences and learnings serve as good markers, but may not be timed to perfection. The challenges in the local banking and non-banking finance companies 11 years post the GFC require us to take a relook at the learnings, especially, on the aspects that eventually led to the calming of the markets. India is nowhere near the situation that the world witnessed 11 years ago—however, GFC offers helpful pointers on how to navigate the sometimes choppy waters. The business of finance is built on t...

The Financial Express Large digital databases like the GST Network can give granular insight, create predictive models; this can lead to more grounded interventions A lot has been said about the current economic slowdown. Econometricians have opined on whether the fall in growth rate is structural or cyclical; economists have wondered whether the response has to be from the supply side or whether demand needs a boost; politicians have traded barbs on whether the issue is the mismanagement of the local economy or the impact of the global trade wars and suchlike; industry and stock market participants have loudly called for succour, fiscal prudence be damned, as their profits and positions suffer even as bureaucrats and government think-tanks continue to talk of India becoming a $5 trillion economy. Since the macro-economy affects all participants, it is natural for all of them to have an opinion and voice it out clearly. As they perceive the current slowdown from their own vanta...

The Financial Express From purely a financial perspective of current account deficit, the distinction between goods and services does not matter The exports performance of Vietnam continues to be contrasted with that of India: the most recent example being the editorial in this newspaper, “Can India learn from Vietnam to manage export-led growth?”. The article, similar to other analyses on this topic, focusses on the significant ramp-up in the exports of Vietnam, especially over the last decade or so. With Indian merchandise exports remaining range-bound over the last few years in the $300-330 billion annual range and Vietnamese exports having risen from $150 billion in FY14 to $244 billion in FY18, there is hand-wringing for India having missed a trick. It is important to acknowledge the growth of exports in Vietnam but before we jump to conclusions and recommendations for India, we need to explore this growth more deeply so that we can draw the right lessons. Exports is one p...

The Financial Express The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at the Global Aviation Summit in Mumbai in January earlier this year. The Finance Minister, in her maiden budget, laid the foundation of building an important component of the aviation sector: “As the world’s third largest domestic aviation market, the time is ripe for India to enter into aircraft financing and leasing activities from Indian shores. This is critical to the development of a self-reliant aviation industry, creating aspirational jobs in aviation finance, besides leveraging the business opportunities available in India’s financial Special Economic Zones (SEZs), namely, International Financial Services Centre (IFSC). Government will implement the essential elements of the regulatory roadmap for making India a hub for such activities.” The announcement of this policy statement in the Budget follows the release of the ‘Rupee Raftaar’ report at...

The knife-edge balanced nature of Government finances means that there is little leeway available for the Central and State Governments whenever there is a shortfall in receipts or an increase in expenditure. In both cases, they automatically reflect in a substantial change in the fiscal deficit. As India moves towards a US$5 trillion GDP economy, the current slowdown and the longer-term runway offers two ways to recast the current fiscal architecture. For the time being, we can park the debate on whether it makes more sense for the governments to run a counter-cyclical fiscal policy (i.e. pump in more money in the economy in times of slowdown even if it busts the fiscal deficit commitments) or keep true to its commitment on fiscal deficit numbers (irrespective of any slowdown in collections or in the economy). We take it is as a given that commitment to the fiscal deficit number matters more, especially since this is a number tracked closely by investors, credit rating agencies and...

Since the implementation of Goods and Services Tax (GST) in India, the Central Government is now a primary decision-maker on almost all the taxes in the country. With an effective veto power in the GST Council and its ability to set the income and corporate taxes and various custom duties, the Central Government now has a say on the rates at which taxes are levied across almost all commodities. Of the total revenues collected by the States and the Centre, around four-fifths of it is decided for by the Central Government. The taxes collected by the Central Government are then shared with the States in the ratios laid down by the Finance Commission (FC). What this the practical application of the above mean? In FY2020, the total receipts collected by the Central Government is budgeted to be Rs 26 lakh crore (or Rs 26 trillion). If the budgeted number holds, Rs 8 trillion will be shared with them as part of the FC formula. This leaves the central government with receipts of Rs 18 trill...

Talk on Location-Casting: Taking You Near Your Customers More details here . Unfortunately, no video. 

Run by the Centre for Civil Society, Vedica Scholars brings together a bunch of bright ladies who are interested in business and public policy. Link

The Financial Express Unless it reverses sustainably, India’s net foreign assets are expected to remain negative India’s financial relationship with the world has two large components: (1) a large trade account deficit balanced by services exports and remittances which still leaves a meaningful CAD financed by (2) large net inward flows of foreign capital. India’s large and consistent current account deficit (CAD) shows up in its changing net international investment position (NIIP). Data released by the Reserve Bank of India shows that as of March 2016 foreigners own $361 billion of assets in India more than what Indians own abroad (17.4% of India’s FY16 GDP), up from $165 billion in June 2010 (11.3% of the then annual GDP). A negative NIIP is the balance sheet corollary of running a persistent CAD: the valuation impacts of NIIP in an uncertain world can in turn impact CAD. Look beyond P&L to balance sheet India’s financial relationship with the world has two l...

The Financial Express A spike in prices near the next general elections could test the building up of fiscal buffers An important point that Ruchir Sharma makes in his new book, The Rise and Fall of Nations is: don’t ask what the world would look like if the current trends hold; ask what happens if the normal pattern holds and cycles continue to turn every five years or so. It is anybody’s call whether oil at $100 per barrel was a short-term ‘current trend’ or a long-term normal. Be that as it may, it would pay to build out a scenario of oil going back to $100 per barrel to see how India’s current account could look. This will help (1) stress-test the strengths of the Indian current account in dealing with such a situation and (2) detail the policy imperatives that should act as a guide in an uncertain world. Given the importance and magnitude of energy imports into India, the country has been surprised significantly—both on the upside and the downside—due to gyrating energy pr...

The Financial Express As the practice of sharing becomes more prevalent, cities will develop their own culture, and it is fascinating to see that emerge Over the last month or so, since car-pooling apps launched their pooling or shared services in Mumbai, they have become a favourite mode of transport for many of us office-goers. Concerns on sharing rides with unfamiliar people have given way to the joys of looking forward to meeting with strangers. The stories that are narrated, the experiences shared, the friendships that are made make up for the few minutes of detour that sharing inevitably entails. Of course, the cost of travel coming down has also been a big positive. The co-passengers typically cover the same route as I do, and both of us can do with company in the hour-long ride. It speaks volumes of Mumbai’s infrastructure that a 12-km ride back home in the evening via the Western Express Highway typically takes around an hour. Earlier, the way to while away time was to ...

The Financial Express A revised estimate of the labour market in 2022 finds 500 million Indians could still be dependent on agriculture India’s consumption story is predicated upon the millennial and post-millennial demographic performing productive, paying jobs. A revised forecast of India’s labour market by 2022E is sobering: half-a-billion people are expected to be dependent on agriculture, contributing to only a ninth of the GDP. The pace of transition is not encouraging—we examine the implications of this on urbanisation, inequality and women empowerment, among other factors. A review of 24 industry reports commissioned by the National Skills Development Council (NSDC) and their comparison with similar reports that NSDC had put together around the end of the last decade shows a sharp fall in overall expected job creation. The earlier forecast expected to see 654 million working Indians by 2022E, this number is now lower at 575 million. The earlier estimate pegged Indians em...

The Financial Express For the citizen to be confident, the state has to first believe that it can enforce the rule of law In Mumbai (and this may be true in many other cities in India), many traffic signals start blinking the yellow lights after around 10 pm. These traffic signals are not tucked away in the low density residential areas; they are a common sight on key arterial roads and dense junctions. The blinking yellow lights are supposed to signal to the traffic that they are on their own—the drivers and the pedestrians need to look out for their own selves: the state or the law will have been considered to have done its bit by warning them to slow down. The scenes at many such junctions left to fend for themselves suggest that the state abandoning its responsibility creates a low equilibrium for all its citizens. The traffic slows down, gridlocks emerge which take patience or fights to sort out, loud honking and road rage add a dash of rough music to the brew and pedestria...

Forbes India The country faces many challenges in diverse sectors but reforms in education and skilling its workforce can script a new growth story India’s demographic dividend has already begun and over the next few decades will be powering the rise of its workforce. India’s workforce of 484 million people (in 2011) has the potential to increase to 850 million by 2025. This compares with the peak workforce of 830 million that China is expected to have in 2016. As China loses numbers in its workforce, potentially, 366 million people would have joined the Indian labour pool over a decade and a half. Women have hardly been a part of India’s workforce and therefore, their entry will power the demand for jobs and supply of labour. India needs to create 20-24 million jobs a year, or around 2 million jobs a month—double of what we are accustomed to hearing. India has failed to move people out of agriculture, with half the workforce (240 million people) still stuck in an activity that ...

You can watch the 10 minute speech here:  YouTube

Akhilesh Tilotia, associate director with the Kotak Institutional Equities says that the business world will need to adjust to digitized world as e-commerce and data analytics is reshaping business models. You can watch the video here: Link

The Free Press Journal Friday, July 17, 2015, 12:48 AM IST Looking all around, it appears that Mumbai’s infrastructure has developed tremendously in the last few years. Bridges, flyovers, expressways–these are all major changes in the way the city moves. But yet, commuters travel for hours to get to their destinations. Why is that and what more should be done?, says Akhilesh Tilotia. Has infrastructure in Mumbai been a game-changer for the city? The idea set me thinking about how one judges whether the infrastructure that has been created is indeed enough, forget being labeled a game-changer. I reflected on my 12 kms daily commute from the new business district of Bandra Kurla Complex to my home on the Jogeshwari Vikhroli Link Road (JVLR) which takes about 60 and 80 minutes. This is almost the same time taken by my wife from her work place in Airoli to home, a similar distance. This translates into an average speed of between 9km/hr and 12 kms/hr, not very far from the officia...