India’s Mission 10-20-30 (Part 2)

The right frame of reference to look at the future is to view what we are living through as a War. But this is not just a localised skirmish between two groups or even nations. It is one which has rapidly engulfed much of the world. Few of us have lived through a World War. All we know are the stories which mark the start and end dates. The hardships faced during a World War are not what we have personally experienced. This is about to change.

In his blog post “The Third World War”, Atanu Dey writes:

World Wars are events that are global, cause severe economic damage, and result in very large numbers of deaths. Unlike ordinary wars, which are localized, by definition world wars involve the entire planet and no nation is entirely immune from the death and destruction that follows.

This world war, unlike the previous two in the last century, is not a military war. But like them, it will lead to some economic, social, and political upheavals that could not have been anticipated at the start. The start of world wars can only be identified in hindsight, when the whole world is engulfed in conflict.

Once this pandemic is seen as WW3, several implications follow. First, it is not going to be short-lived. World wars last several years, not a few months. Second, it is an inflection point. The before and after images of the world are radically different. Expect the unexpected. Third, all aspects of the world are affected negatively. The body blow to global health will cause economic disruption at all levels, and in all sectors. The tiny village in a poor nation will suffer, as will the mega region in an advanced industrialized nation.

Fourth, the political effect. Governments, which under normal circumstances gradually ratchet up their economic control, as they do in any war, increase their power and control at breakneck speeds. This is the most pernicious effect of this WW3, and this will cause more death and destruction than the pandemic will end up doing directly.

As Atanu concludes: “We were born after the two world wars of the last century, the last of which ended 75 years ago. People are used to wars around the world but have become accustomed to a world without a world war. We just don’t think it is possible that we will have to suffer a world war, or that global progress will be halted and reversed.”

Once we have a better understanding of what we are living through, we can start imagining the future. Based on that, we can take actions today which can reduce the impact of the worst that can be expected. In every war small or big, it is the poor who bear the brunt. India has lived with poverty for far too long. Till 1947, we could blame the British. After 1947, it has been the actions of successive governments that have created what I have previously called “perpetually planned poverty.”

What do we need to do to make sure the Third World War does not plunge tens of millions of Indians deeper into poverty? What can we do to build a New India from the ravages of the virus? How can we turn our greatest crisis into our biggest opportunity? What will it take to create ‘The Indian Miracle’ – like what China did starting in the 1980s?

Tomorrow; India’s Mission 10-20-30 (Part 3)

India’s Mission 10-20-30 (Part 1)

The recent story, “At Stake: 11 crore jobs, 30% of GDP,” in the Indian Express (May 2) leads with:

From a Delhi-based machine-part manufacturing enterprise which can’t pay its 24 workers to a paint-maker in Pune fresh out of insolvency but facing a funds crunch, a start-up which got a Rs 90-lakh order to make masks but is waiting for banks to give credit, to a Ludhiana export unit whose bills haven’t been cleared — no other sector has been pushed so far to the edge by the pandemic and the Covid lockdown as Micro, Small and Medium Enterprises (MSMEs).

These make up the heart of the larger industrial ecosystem, acting largely as ancillary units for the big enterprises, and employ, across 5 crore units, an estimated 11 crore persons.

At stake are not only these jobs but the future of what makes up 45 per cent of the country’s total manufacturing output, 40 per cent of exports — and almost 30 per cent of the national GDP.

How are MSMEs defined? From the story: “Even as the government is working on a new definition of MSMEs, the present classification for the manufacturing sector designates a micro enterprise as one with investment in plant and machinery not exceeding Rs 25 lakh, small enterprises with investment between Rs 25 lakh-Rs 5 crore and medium enterprises with investment between Rs 5-10 crore. For service sector classification, micro enterprises have investment in plant and machinery not exceeding Rs 10 lakh, between Rs 10 lakh and Rs 2 crore for small enterprises and Rs 2-5 crore for medium enterprises.”

I wrote earlier about the need to Unlock India and India’s Two Futures. 40+ days into the lockdown, Indians are hurting. In our effort to shield 130 crore lives from the virus, we are creating yet another epidemic which will kill many more – from lost jobs, destroyed livelihoods and concomitant starvation. The consequences of Covid will run deep through India (and the world). But India, because of its large poor population, will face even greater hardships. There is a need for bold measures now – before it is too late.

We need to change our frame of reference – we are not looking at an impact of a few months with everything returning to normal after that. There is no return to the world of early 2020. Because what the virus has unleashed is the Third World War.

Tomorrow: India’s Mission 10-20-30 (Part 2)

Liquidating Lutyens’ Delhi – Part 2

Lutyens’ Delhi was a symbol of the power and control that the British rulers exercised over the colonized people of India. In 1947, when the government of India changed hands from the British to Indians, Lutyens’ Delhi should have been returned to the people. The functionaries of the government of independent India should have demonstrated their commitment to the cause of nation building by living modestly, as befitting a nation that could not afford to continue to fund the extravagant lifestyles that the British enjoyed at the expense of the poor of India. But they did not do that.

How much do Indians pay for those who rule over them is hard to estimate. Just Lutyens’ Delhi has immense wealth locked up, wealth that could — and must be — given back to Indians. There are hundreds of bungalows sitting on prime lots of more than an acre each. Each bungalow occupies land valued at several hundred crores. A conservative estimate of the land value comes to around Rs 5 lakh crores.

Here is what I propose that Prime Minister Modi should do to stop this waste of public assets (and free up the locked-up wealth), and at the same time provide for the financial support to the poor during this crisis.

First, the politicians and babus must vacate their publicly provided, free accommodations in Lutyens’ Delhi. We ordinary citizens have to pay rent or buy our own houses. Why should the netas and babus get it for free? Like the rest of us, they should get a salary, and rent or buy the housing they want and can afford. This can be accomplished in a month. Remember, demonetisation was done overnight. The Prime Minister should give them all a month’s notice and demonstrate to the world that he means to correct the wrongs of the British Raj and that India is not going to tolerate it anymore.

The second part is to sell off the public property that is Lutyens’ Delhi. Public property, by definition, belongs to the public, and the public has the right to use it as and when they need to. The proceeds of the sale of Lutyens’ Delhi rightfully belong to all Indians equally, rich and poor. But because the economic effects of the pandemic disproportionately falls on the poor, I propose that the 15 crore families (about 60% of the population) who have been hardest hit be the first to receive their share of the money raised by the sale.

Each of the 15 crore families should receive Rs 30,000 in the next few months. It is not a large amount but it will help them enormously to get back on their feet. With the money, their demand for goods and services will pull industry to increase production, which in turn will generate jobs. While helping the poor, it will give a much-needed boost to the economy without damaging side-effects.

I call this proposal “Prime Minister’s Lutyens’ Delhi Liquidation Relief Yojana” or LLR Yojana. It is not a “universal basic income” (UBI) scheme since it is limited to the poor, and limited to the desperate time India faces now. For the longer term, I have proposed the Dhan Vapasi model, which looks a little like a UBI scheme but is actually a larger idea to bring all public assets currently under-utilised into production. That will increase jobs, incomes, and help create the infrastructure for boosting economic growth.

Liquidating Lutyens’ Delhi – Part 1

The ongoing global pandemic is proving to be the biggest challenge India’s economy has faced in the last few decades. The nation-wide lockdown has temporarily slowed the spread of the disease but it has also brought enormous hardship to the poor, who cannot afford the consequences of the loss of livelihood and the economic downturn it will inevitably lead to.

The poor urgently need assistance to avoid the dire effects of not having an income for several months. The rich have the luxury of dipping into their savings or borrowing; the poor don’t have those options. They have to rely on public assistance, and they need it now, not in some distant future. They need a basic income if they have to survive.

Problems are always unwelcome but sometimes if properly understood they present rare opportunities for much-needed and necessary changes. The pandemic presents an opportunity for the government of India to do what should have been done right after India became independent of the British Raj over 70 years ago.

The British rulers of India lived lavishly at the expense of Indian taxpayers — and everyone pays taxes. As foreign rulers, they considered it just and proper that they should live like kings while the people of India suffered poverty and deprivation. They lived in Lutyens’ Delhi in style befitting an imperial power ruling over colonial subjects.

With the end of British Raj, the white rulers vacated Lutyens’ Delhi. Those who took over control of the government of independent India — politicians and bureaucrats — moved into those lavish quarters. It is impossible to justify that. How can those who were supposed to serve the public live like they were imperial rulers of a subject people, and extremely poor people at that?

The basic morality and ethics of the governance of a democratic nation entails that the government is for the people, not for the politicians and bureaucrats. They are public servants, who serve at the will of the people. To serve the people, they must not live like kings. And it is not just a matter of optics. It is more than that it doesn’t “look good.” It shields those in government from understanding the daily struggles of the average Indian.

It is time for the Indian netas and babus to stop living in the lap of luxury, like their British predecessors did. It is also time to provide to the poor the financial support that they desperately need now. The pandemic has connected the two issues: to provide the poor the needed financial support, and to halt the waste of public money that goes into funding the extravagant lifestyles of the politicians and bureaucrats in Delhi and elsewhere.

Tomorrow: Liquidating Lutyens’ Delhi – Part 2

India’s UBI Moment (Part 5)

As I wrote in my previous series, India is at a crossroads. As a nation, we must choose between two futures – one in which the “Government is Everything”, and the other in which “We, The People, choose our own destiny.” No country which has mortgaged its future to the government has ever become prosperous. People create wealth, not governments. To do that, people need economic freedom, not controls.

Dhan Vapasi – Universal Basic Income (UBI) done right – is what can open India to a new future, a Nayi Disha. I don’t think there is any other solution which leads to a happy ending for Indians in our lifetime.

Over the second half of 2018, my team prepared a lot of material that is relevant now and can accelerate the process of Dhan Vapasi.

We had also tried to get traction with the Lok Sabha and Rajya Sabha MPs by sending them the Dhan Vapasi Bill and Report in October 2018. Of course, hardly anyone was interested in putting an end to the loot.

That is why we need to make the demand for Dhan Vapasi into a popular movement. It will be hard to reach out and persuade the masses – all they care about is the outcome, and not the how. But for the middle-class in India, the means matter. If the country is saddled with inflation and higher taxes, it will undo the good work and upward mobility that has been seen since 1991. It will mean that our children will probably have fewer opportunities than we did. The pandemic could lead to a Great Depression which will cause great economic and social upheaval.

That is why we need to start a debate in India on the right way forward. Politicians respond to pressure from the people because they need their support to stay in power. If enough of us come together, we can make change happen and ensure that 2020 will forever be remembered as the year India attained Sampoorna Swatantrata (Complete Freedom). Or, it will be a missed opportunity like 1947. The choice is ours to make.

India’s UBI Moment (Part 4)

How can we go about making Dhan Vapasi happen?

Developed countries can afford to fund UBI through their reserves, taxes and borrowings. India cannot do that because it will kill off future growth for a very long time. The right way for India to do UBI is to think of it as a universal wealth return funded by public asset monetisation.

I recognise that selling public assets immediately will be difficult and cannot be the first step. Yet, there is a need to get the economic engine of India moving. One way to do this is to borrow $2 trillion from abroad – from sovereign wealth funds and other foreign funds. There are trillions of dollars earning zero to negative interest rates (meaning they pay the banks to hold their funds) around the world. We need to tap into these sources, and promise them 1-2% in positive dollar-based, sovereign-backed returns.

The first trillion dollars can be used to activate the wealth return program. India has about 260 million households. Returning Rs 1 lakh each year to each family means a spending around $330 billion every year. A trillion dollars provides the money to do this for the next three years.

What Dhan Vapasi does is to free up unused resources. It is not printing and distributing money, but about bringing new resources to use.

Money in the hands of people will get the economy moving as they spend on necessities and more. The programme must be universal because there is no time to be wasted in bureaucratically figuring out who is eligible and who is not. Not to mention every Indian has an equal claim on these surplus public assets.

The second trillion dollars should be used to build the infrastructure India so desperately needs – housing, roads, high-speed rail, ports, airports, new cities, healthcare facilities, and so on. The government should make the money available for the private sector to build. This will also get job creation and manufacturing going rapidly and at a large scale. As global enterprises see the opportunity in the Indian market, they will start to move manufacturing to India – starting a process which will create jobs in India and raise Indian workers up the value chain.

In addition, India should cut all taxes to below 10% to become one of the lowest tax in the world. That would leave money in the hands of people. In addition to cutting taxes, the government must implement the structural reforms that so many have written about in the past.

Here are a few additional ideas I had written recently:

  • Focus on the core things that a limited government should do – ensuring rule of law, protect economic freedom, property rights, free markets, free trade, decentralisation, and so on.
  • We have to understand which ideas and policies made rich countries rich, and implement those by embedding them in a new set of rules for India.
  • Government should get out of the way of people. Let trade and voluntary exchange flourish. Let the entrepreneurs take over the task of creating wealth. They will find ways to solve problems.
  • And finally, for all of us: for 10 years, forget about everything that divides us, and let us all unite for a single mission – to rebuild India from the ruins of the virus, to make India the nation it was destined to be, to make every Indian free and prosperous in our lifetime.

As India prospers and grows, the ensuing wealth creation will enable India to repay the $2 trillion in the coming years by monetising the $20 trillion public assets once the economy gets going.

Tomorrow: India’s UBI Moment (Part 5)

India’s UBI Moment (Part 3)

Here is what I said in the Dhan Vapasi launch video in August 2018 – and every word holds true even now 20 months later, with even greater force and urgency now given the economic catastrophe that lies ahead.

Even as rulers change, if the rules remain the same, outcomes will not change. For 71 years, 20 governments and 3 generations of Indian, politicians have stood before us giving solutions for poverty, unemployment and corruption. But little changed. These hamesha problems are still there with us. What India needed was a Nayi Disha, a new direction. It was from this thinking that was born the idea of Dhan Vapasi.

Let’s get back to our questions. Where is our dhan? What is the public wealth of India? This is wealth that is in the public lands, the mineral deposits and the public sector corporations and their assets. We are all shareholders in this wealth. This wealth is not in foreign banks, it is in India – around us. It is not black money, it’s our money. And how much is this wealth? ₹ 1500 lakh crore. That is 15 followed by 14 zeros. This comes to ₹ 50 lakh for every family in India.

India is rich, yet Indians have been kept poor. The median Indian family earns just over ₹ 1 lakh a year – less than ₹ 10,000 per month for a family of five. They save very little, if it all. And that’s what we have to change. That’s why we need our wealth back.

This wealth is under the control of the politicians and bureaucrats. They have stolen our wealth – just like the British rulers did before them. Just look at the luxury in which they live. They have palatial homes, travel in comfort and have massive security – all paid for by our taxes.

The chowkidars have become zameendars.

It is time to stop this theft. It is time to demand our wealth back.

Getting this wealth back means we can choose how to spend it for our family.

What we spend becomes income for the sellers. When we spend on food, it is income for the farmers. When we spend on other goods and services, it helps boost employment and creates jobs. When discretion in political and bureaucratic decision-making in who gets the benefits of various schemes is eliminated, we can end corruption.

Dhan Vapasi is that practical solution which will eliminate the triple evils of poverty, unemployment and corruption. Dhan Vapasi is the universal prosperity revolution that will fulfil the vision the creators of our Constitution had for all Indians – to secure to all citizens freedom, equality and prosperity. Dhan Vapasi is the real freedom to live life on our own terms – without the government as our master, with fellow Indians as partners in progress. Dhan Vapasi is about fairness and justice. Dhan Vapasi is the right of every Indian.

So, how can we get our wealth back? How do we make Dhan Vapasi happen? The politicians and bureaucrats are not going to give our wealth back. Not only have they not told us about this wealth, they continue stealing from us. Dhan Vapasi will need another freedom movement – to free our wealth from the control of the politicians and bureaucrats.

I failed in 2018 to get traction for the Dhan Vapasi idea. It does not mean the idea was wrong. I perhaps erred in how I presented the idea to the people. Or maybe the timing was wrong. Or maybe I mixed up the economic ideas with the desire for political change.

Now that India faces its greatest economic crisis since Independence, it is time for us to revive and revisit the idea. Dhan Vapasi is the right way to do a broader version of universal basic income (UBI) and create hope, jobs, incomes and prosperity for every Indian family.

UBI done this way does not require any added burden on taxpayers (everyone in India). In this sense, the Dhan Vapasi variant of UBI is unique to all other UBI ideas floated around the world.

Tomorrow: India’s UBI Moment (Part 4)

India’s UBI Moment (Part 2)

Let me start with some bit of personal history. It was in 2017 that Atanu Dey, a friend who is an economist, first proposed the idea of returning wealth controlled by the government to the people. We had been discussing how to put India on a path to prosperity. We had previously tried two initiatives. One proposed a new Constitution for India that emphasised personal and economic freedom, and constraints on government power. The other was about giving Indian cities greater autonomy via urban governance reforms because cities are where wealth creation happens. We could not get traction for either.

It was then that Atanu wrote a note to me with a simple idea that was not immediately obvious to me – the Indian government controls a lot of wealth which is lying unused, misused and abused, and if this wealth is monetised and returned to the people, it can truly transform their lives and India’s future. Really? How is that possible? Did India have this kind of wealth? India is a poor country, right? But Indians are rich? How is this possible? And the government – why are they not telling us about it?

As I understood the idea, it became clear that it was bold, path-breaking and transformative. Over the next few months, we spent time refining it. I put a team as part of my “Free A Billion” initiative to work to try and estimate India’s public wealth – wealth that belongs to the people but is controlled by the government. This is locked up in minerals, surplus land and the assets of the public sector units (PSUs). As we did the research, the numbers amazed us.

$20 trillion dollars was the estimated wealth under the control of the government. That would approximate come to Rs 1, 50, 00, 00, 00, 00, 00, 000. That’s 15 followed by 14 zeros.   In other words, more than Rs 50 lakh for every Indian family.

Put in simple terms: India is rich, but Indians are poor.

And the secret to doing UBI right for India was to monetise this public wealth and return it to the people in smaller chunks every year – Rs 1,00,000 every year to every family. This would double the annual income for more than half of the families in India.

That was the origin of the Dhan Vapasi (Wealth Return) idea – launched with this video on August 15, 2018.

Tomorrow: India’s UBI Moment (Part 3)

India’s UBI Moment (Part 1)

The idea of a Universal Basic Income (UBI) has been there for long. It has been part of a utopian world rich enough to provide a safety net for every citizen via a fixed monthly income so they also have the freedom to do what they want with their time.

It is therefore not surprising that the UBI idea is now making a comeback in the times of economic distress. With the developed world seeing massive economic destruction in the wake of the coronavirus, there have been calls on governments to protect incomes by giving everyone a minimum living wage. Rarely before have we seen incomes for people and revenues for businesses plummet to zero in so short a time. This is truly an extraordinary moment in history.

What is clear is that governments will have to intervene. With the economy under lockdown and production not happening, businesses face the risk of closure. Layoffs have skyrocketed in the US. In India, millions of migrant workers are in detention centres – caught in no man’s land between their workplaces and villages. The government is seen as saviour and omnipotent.

Poorer developing nations like India do not have the financial muscle to risk printing money at massive scale. The inevitable outcome will be some combination of higher fiscal deficits, higher inflation, currency depreciation and increased future taxes. Many countries have tried such approaches in the past with very bad outcomes.

So, what should India do? Is there a way for developing countries like India to do UBI right? Yes!

Tomorrow: India’s UBI Moment (Part 2)

Webinar: Accelerating Beyond Covid

I did a webinar for Royzz & Co. (a Mumbai-based law firm) on April 18, 2020. The title was: “Accelerating Beyond COVID – 19: India, AI and Acquisitions“. I spoke for about 30 minutes, and then there was about 35 minutes of Q&A. Here is an outline of the themes that I covered.

  • India’s 2 Futures
    •  Fork in the road: the 1947 Moment
      • The political and economic choice we made then
    •  The 2 options we face now
      • Everything Government
      • We Determine our Destiny
    • A Nayi Disha for India
      • Public Asset Monetisation
      • Dhan Vapasi
  • Business: Search for Growth and Profits
    • The power of AI
      • Data is the starting point
    • AI applied to Customer Analytics
      • 200-20 Rule: where profits come from
      • Identify your Best Customers based on Customer Lifetime Value
      • Velvet Rope Marketing
      • Madtech Growth Flywheel
  • The Leader’s Top 2 Initiatives
    • AI Inside
      • Analytics
      • Process Automation
      • Predictions
    • Acquisitions Outside
      • Think 2008
      • Stressed Assets
      • Cash and Deals