Demonitisation day #5.
Doubts about the thoughtfulness and preparation behind the move have been widely cited. The system is beginning to appear stretched. FirstPost and Mint present a fairly balanced view of the repercussions of demonitisation.
Given the logistical nightmare, and the 100 percent chance that this will result in sheer chaos, anarchy and anger his vote base (since traders will be the worst hit) why did Modi commit political suicide?
If the PM took such a risk, it shows his supreme confidence and a quid pro quo of deep trust between Modi and his electorate. He, as Swapan Dasgupta writes in his column for The Times of India, would have calculated that the electorate, though being made to go through utter inconvenience and hardship, will “appreciate forthrightness and loftiness of purpose.”
But he would be hurting. No matter how strong the conviction and unshakable the trust, Modi isn’t blind to the factors at play — the market slipping into a recession, daily lives suspended in a surreal act of faith and common man getting increasingly restive as the days tick by and the system near a total collapse. – Sreemoy Talukdar, FirstPost.
I don’t have any reason to doubt the sincerity behind the move. That much more reason to believe that Narendra Modi has turned out to be a special Prime Minister.
I know that I can’t completely gauge the problems people are facing from this move. An acquaintance had to default on his rent, footfalls at restaurants have fallen, and for sure those that rely on daily wages have been hit. Life continues to be orderly. I’m encouraged by the few conversations I had when standing in line at a bank on Sunday. I believe that the desire to stay the course is still present. Let’s just hope that we can reboot the system before this spirals out of our control.
8th November ended like any other day. I’d just gotten home from work. My father called me. Excitedly he told me that our PM, Narendra Modi had recalled 500 and 1,000 denomination notes. I responded that it’s probably a hoax and switched to youtube to check just in case. It was true. A number of my colleagues who I discussed this with echoed my initial disbelief on having first heard of demonetisation. Living through a full day after demonetisation has been that much more unreal.
I can’t imagine that an extreme step such as this would ever be taken. As my Dad explained, the last time this was done was in 1978 under similar circumstances. India needed this. Edelweiss Securities predicts that the crackdown will unearth 3 trillion rupees ($45 billion). Perhaps I believed our politicians didn’t have it in them. But Modi ji’s turned out to be a politician like no other. He’s allowed his determination to lead him into the unknown. If this move fails to deliver impact, it’ll hound him. If it works, at least temporarily black money will entirely cease to exist in India. Fake money will be invalidated. Indeed, the nexus between terrorism, corruption and tax-avoidance will receive a blow.
And that’s significant.
As the dust of today’s discussions, evaluations, analysis and experiences settle, it’s becoming clear that although this was a much-needed reset of our entire system, it just might be that the entire potential of what is possible was missed.
First, a little background. A little before tax-season the government announced an amnesty scheme under which tax defaulters could come clean for a penalty and avoid criminal prosecution. Although the scheme was widely availed, it came nowhere near the goals our PM had set. Perhaps he have felt that some thing more would have to be done. I’d resigned myself to “yet another unfulfilled campaign promise”. It would continue to be business as usual.
India (and Bharat) is a clear, desperate large-scale use-case to go-digital. In our cash-led economy, an INR 10 denomination note has an average lifespan of less than 10 months.
Our PM himself appreciates technology for the transparency and accountability that technology brings with itself. He’s also cited the parallel economy being a key driver of forces that are destroying us from within.
Since the early years of 2000 – 2012, digital entrepreneurs have been tracking the Internet in India. We’ve achieved big changes at a snail’s pace. First came broadband, then smartphones, mobile internet, finally e-commerce. This is over a 12+ year time period. If we think forward, will it take us another decade for us to go cashless?
And therefore skepticism. We need to be there desperately, but the inertia won’t allow. Just the other day I was asked by a potential hire, “Do you really believe you’ll sell digital payments to a group that believes in dealing in cash”? I’ve always had a ready answer, but it’s a tough argument to fight. Even now, my son’s private school conveyance hesitated to share his bank account details. We simply didn’t have the cash on hand to pay him.
If one sets out to change India to stop having to rely on cash, until last night this felt a little like an impossible task. I only know now that I felt like this. I’m simultaneously embarrassed and impressed on the boldness and on how our PM’s decision has turned out.
So just maybe, I need not have to wait a decade for this change. Let’s take a fresh look at what was possible.
We’ve just spent an entire day where 500 and 1,000 notes are not legal tender. Throughout the nation Banks and ATM’s were shut. There was some chaos as people scrambled, but systems haven’t entirely failed or stopped. If you’re a daily wage earner and if you were paid in 500’s on Tuesday, you’d have a difficult time. In the coming days there will be more pressure on the system to change those 500’s into new 500’s or 100 denomination notes. On Thursday 11th, ATM’s will be back online, but if you don’t have a bank account, you won’t have access to more than INR 4,000 in the new currency right away. For sure that won’t cover the month’s rent and groceries.
Over the last 2 years, we’ve introduced Aadhaar – a biometric based system capable of identifying citizens, we’ve linked the Aadhaar system to bank accounts, and have recently introduced Unified Payment Interface, a simple account-to-account cash transaction system suitable for smartphones. If we’d made it possible to pay with UPI almost everywhere, there wouldn’t be as much pressure on the system for availability of 100’s and smaller denomination notes. Even in a hybrid system those who need cash to bridge expenses could have had them on priority while the others must pay digitally. Universal acceptance is key.
Let’s look at some of the counter-arguments I’ve got. Not everyone has a bank account, but they may have instances where they’d have to pay large sums (school fees comes to mind).
On the acceptance front, skepticism has prevented retailers and common utility providers from adopting digital. That could have been eliminated.
But just this one day, I believe that we could have prepared ourselves to digitise and made a leap. Even if it is only my limited view-point, on this one day we all accepted to be inconvenienced for the greater good. A nation that can be organised to give up their money and recognise the larger picture, they’re certainly ready to let go of their other fears. This opportunity, this reset might not arise again.
We’re getting quicker at transforming our ageing private / public systems and protocols. Reliance Jio’s doing it in telecom (they’re India’s only 100% VoLTE operator), railway tickets, our cooking gas subsidy system and many other examples come to mind. This pace of change is exciting.
There’s no doubt in my mind that 8 November is historic and a big leap forward. It has strengthened my faith in our version of democracy and in our leader. It’ll strengthen the common man by merging the parallel economy and forcing cash out into the open. It has encouraged me to think about what’s possible, what our future ought to look like and what we’ll need to do in order to get there. Thank you Honourable Prime Minister Narendra Modi for growing our picture by that much. Thank you for surprising me.
I’m transitioning from an independent software developer to a new role as a small cog in a very large machine who’s intent is to digitize India. As every day flies by, the sights and sounds I see change dramatically.
I’ve been keeping an eye out for games that have successfully managed to compress vast timelines into gameplay experiences. Spore is one such game. In the game, you’re introduced to a world in the first person as a single-celled organism who’s species evolves with time. With each evolutionary cycle you can introduce mutations in your species’ gene code to better match the environment you’re playing in.
When playing with a concept such as evolution, the gameplay experience has to balance what’s happening now with long term goals that might not be directly apparent. Focus too much on survival and the game risks a common experience. Defocus and you’ll miss engaging the user entirely.
Spore’s gameplay designers have cleverly placed easter eggs that subtly motivate the player through the game. In the screengrabs below the player’s focus is on his survival in a sludge pool filled with potential opportunities and threats. In the background you’ll spot large multi-celled organisms that indicate what the player could evolve into.
“We are going to take percentage of Hindus to 100 in country …”,
– 22 December 2014, firstpost.com.
I don’t want to focus too much on what has been said or done in the past few months with respect to religious conversion. Who did what and which side is right or wrong. In fact I’d rather think of every conversion as unnecessary and not seek redressal but simply stay still.
But the heart desperately seeks a language to speak in. Religion is simply a matter of faith and faith by definition should not require a passport.
If we must indeed discover our identity as a nation, as Swami Vivekananda wanted us to do so. Can we not find it in our strength rather than our vulnerabilities?
We’re going through a significant degree of change here in my home country. As far as historical trends go, this is the fastest pace for any change and we squarely blame technology for what’s happening. Oddly, one might live through an entire decade and yet not notice this change.
In a conversation last night with a friend, I learned a great deal through his outlook on how things are shaping up. His family is talented and have many gifts to share with the world. His Mother’s written several cookbooks and has deep insight into to food and lifestyle choices we make. He himself intends to create a niche portal to service pets.
Another friend of mine who has been tracking the growth of e-commerce in the United States from inside the industry alerted me to what’s actually happening here. While today, valuations are driven by captive e-commerce infrastructure, the more reliable metric is still lifetime value of the customer. Flipkart, Amazon and the other incumbents are essentially responsible for developing the long tail of e-commerce here in India*. To help understand the scale of change that’s needed, the contrast you need to grasp is that for every one e-retailer in India, there’s essentially a 1,000 and more in the US.
Another segment that’s changing rapidly are B2C services in India. They directly stand to benefit from the digitization of the last mile between the business and its customer thanks to mobile internet.
On my way to work, my auto driver started up a casual conversation with me. In the midst of the conversation, he asked me if I knew that Ola cabs had enabled auto drivers on their digital service. I had indeed. He then politely asked me if he could have my number to refer back to Ola and claim a reward of a hundred rupees. I said I’d gladly share and sign up.
Those drivers who go out and get themselves a tourist cab might opt-in to Uber and a myriad of other services. I can now hail a cab or an auto within 15mins no matter where I am in Pune. This is especially helpful late nights and in the outskirts of the city.
One place I can see where this’ll help is at our local airport. If you talk to the prepaid autos at the airport, they’ll often charge 1.5x to 2x the fare back to the city. The cops there don’t want to do anything about this as they’re looped in on the take as well. The justification for the premium is that all auto drivers need to pay a fee to enter the airport (to whom?). The next time I’m there I’m going to try hail an auto for myself using the App from outside the airport. I hope that’ll work.
The question “What’s the next $Bn startup out of India?” just got a whole lot more interesting!
* I am what one might call a skeptic, but its hard to argue against overwhelming evidence and specifically Amazon’s decision to permanently set up shop here having patiently waited since the mid-2000’s.
It’s rare to experience two very different perceptions around the same central idea, on the same day.
Those of us from Pune will remember that Microsoft India at one point (~ 1998) did consider setting up operations in Pune. This weekend I had two different conversations with colleagues of mine from Pune around Microsoft’s role in our eco-systems.
Both of them were well-educated individuals from different cultural backgrounds. I hope they’ll forgive me for using the content of our conversation here on my blog. But there’s an overarching purpose which our conversations illustrated. I happen to simply be the medium to have spotted the content of both these conversations.
My purpose of relating it here is to encourage thought around what is soil to a farmer?
One of them highlighted how important it was to bring products-led thinking and technology to India’s IT leadership efforts. He said, and I paraphrase – the work in Microsoft India, Hyderabad is hardly the kind that an IIT’ian would aspire to.
Without focusing on the truth or otherwise of this statement let’s move on to the next one.
The other one highlighted how sad it was that Pune lost out to Hyderabad in bringing Microsoft to India. He asked, what is it that we’re missing that Hyderabad has? We have the talent, educational institutions and so on.
In my own journey, I’ve travelled to the United States and studied, worked there in the hope that their culture will influence me enough to give up on any unnecessary habitual ways that I’ve acquired from the culture that I belong to. This is true of an ongoing trend of so many thousand students who make the journey every year.
I’ve also seen first-hand how brilliant migrants from tier-II, tier-III cities aspire for different lives in tier-I and metro cities of India.
For both of these migrants, their journey is essentially the same. Some stay, some don’t.
In order to build a product eco-system with self-belief, we’ll need many, many Satya Nadella’s who can find work to aspire to and in the process, find themselves in Pune. Of those many, perhaps one will build a Microsoft that Pune can call its own. Then both queries will be satisfied.
Our General Election is underway and I’m scheduled to cast my vote on the 17th with others from my city. The media is practically running out of confrontational verbs, “Rahul Slams Modi”, “Pawar Criticises Election Commission” and so on. The mind is exhausted by the narrow focus of the information it’s being fed and is starved for the truth.
How do you pick out the right candidate?
I think that’s the important question. If we overestimate the impact of our individual vote, in the process we might be led to believe we’re helping a party win over the candidate. Rather the opposite is true. The candidate I pick represents me in parliament, if he wins. I learned that lesson the hard way in our last general election.
However, your vote does eventually decide who will lead our nation.
Last night, I watched Christopher Hitchens and Tariq Ramadan debate if Islam is a religion of Peace. Tariq’s opening argument, struck a deep chord with me. He interprets Islam as a means of self-education for the individual to help realize the road to peace irrespective of whether the times you live in are violent or peaceful.
This post is not about the religion, or any other religion but about our co-existence and continued prosperity.
Pick the party that can show all of us the way to work together in a way that does not compromise the fundamentals rights that we’ve been granted through our constitution. The one that respects the universal need for peace.
While we leave civic education to schools, our schools can reach only a fraction of our population. The other portion, including our educated adults, people like me still grasp at straws when making this important choice.