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

India’s Two Futures (Part 5)

We have a choice. We can continue our daily struggle under the failed system or we can lead the change. We can let the suicide continue – as it has for the past 70 years ago. Or we can rise to stop it, and give birth to a new India, one that our forefathers would have imagined during the struggle for our freedom.

We need a modern Quit India movement – to reverse the wealth destroying interventions that have looted 90% of our riches, to create a new India where it is not the citizens that serve the politicians but the other way around, and to finally add economic freedom to the political freedom that was handed to us in 1947.

It is still not too late. The story that began in 1857 did not end in 1947. The final chapter is still to be written. With governments across India increasing their presence in our lives and businesses, with prosperity becoming more and more elusive for the masses, with individual freedoms being curtailed through legislations and fear, with social and economic mobility becoming harder as small- and mid-sized businesses are crushed, the virus has brought forth a question we have ignored for long – what is the India we want to create for our children?

Swatantrata (independence) without Samriddhi (prosperity) is a battle not even half-won. We must not rest till every child, worker, entrepreneur has been truly liberated in our country. The good news is that it is possible – because India is rich, even as Indians have been kept poor. If enough of us come together, a peaceful political and economic transformation is possible – not in a generation, but before the next election.

This Indian Revolution must begin in our minds. We must begin by replacing the dated romantic ideas of what creates prosperity with the evidence-backed reality of what actually does. Each of us must be a node in this networked spread of new ideas. We must set aside differences of caste, class and community that have been used to divide us. We must unite to set India in a new direction, to choose a different future. The only questions we must ask are – If not us, who? If not now, when?

India’s Two Futures (Part 4)

We were already killing our future selves even before the virus attacked us. By not adequately educating our kids, by not providing skills to our youths, by limiting the jobs for people entering the workforce, by trapping farmers in a web of interventions, by making cities hard to live in for the working. In every case, a set of government actions deliberately hurt us. In doing so, they made the future an extension of the past that killed our prosperity. We let our future be strangled by our politicians for the past 70 years.

India’s present should have been very different. Every one of us should have been at least 10 times richer. There is nothing in the Indian DNA which forces us to be poorer than the average American, German, South Korean, Singaporean or Chinese. It is the rules we live under that have prevented Indians from being prosperous. These are rules made by kakistocratic governments, who see themselves as legitimate successors of the colonial British rulers. Unless we understand how our present has been damaged, we cannot hope to restore our future and rise from the ashes of the virus.

This is the choice we face as citizens of India. We can continue to struggle through our daily lives. Or we can imagine an alternate future. A future in which freedom and prosperity go hand in hand, where the chains are on government and not the people, where every voluntary exchange is not seen with suspicious eyes, where every new-born has an opportunity to dream of success, where wealth creation is celebrated and not taxed, where cities are celebrated as job hubs and not starved of infrastructure.

Are we ready to imagine such a future? If so, are we ready to rise and demand this future?

Tomorrow: India’s Two Futures (Part 5)

India’s Two Futures (Part 3)

To understand India’s post-pandemic future, we will need to delve into our post-Independence past. We chose a path – the British parliamentary political system and the Soviet socialist economic system. Did we have a choice then or was that the only option? Think back to the 1940s when the 2nd World War was ending. Germany, Italy and Japan had been vanquished. Even as Britain and the Soviet Union fought back in Europe, it was the might and innovation of the Americans that tilted the balance in favour of the Allied powers.

The America of the 1940s was already the strongest economic powerhouse in the world. Yes, there had been the Great Depression starting in 1929. But before that, for over 50 years, America had been transformed by entrepreneurs. Central to this period of economic growth was the American Constitution of 1789 which gave maximum freedom to the people and put severe constraints on the government. The American Presidential political system with its exquisitely crafted balance of powers and free-market economic system with its focus on free enterprise had created the world’s richest nation.

India in 1947 had just attained independence as the British left in a hurry. India was a very poor country. A new leadership took over in India. And what do they do? They created a Constitution which borrowed 242 out of its 395 Articles from the 1935 British-written Government of India Act, an act meant to enable a colonial power to keep the people enslaved.

The British Raj 2.0 leadership took India down the path of collectivism that was prevalent in the Soviet Union. India’s leadership chose a future – one which condemned future generations of Indians to perpetual poverty. Even after more than 70 years of Independence, 40% of Indian households are almost entirely at the mercy of government handouts.

What would India’s future have been had we chosen a different path – the American governance system that split powers between the three branches of government, and the American economic system that prioritised personal and economic freedom by limiting government action?

We will never know the answer since we didn’t choose that path. The virus has once again brought us to the crossroads where we need to make a similar choice. Will we make another mistake or will we choose wisely this time around? Which future will we select – suicide or rebirth?

Tomorrow: India’s Two Futures (Part 4)

India’s Two Futures (Part 2)

The India that we will have to live through in the near-term will be very different from the one we were living in till just about a month ago. That’s not the India I am asking us to imagine. I want to focus on a slightly longer horizon. What will India be in, say, three to five years?

There are two futures possible.

The first future is one in which the government becomes even more domineering and overpowering. This is a future in which people rely on the government for everything – our food, home, education, house and even our jobs. The politician becomes our God as lives and livelihoods come under the control of the government.

For those in power, this is nirvana – an opportunity that has come after a couple of generations. Even now, a set of people are already deciding who can travel and where, which industry can open, which item is essential, who should get what. Do we really want this kind of micro-management of our daily lives?

This is like the India of the 1950s, 60s and 70s when the licence raj was at its peak, when central planning ruled the roost. Few of us remember that world, but our parents lived through it. For those in power, this is the India that they would love to recreate.

There is a second future possible – where we determine our own destiny, free from the control of the politicians. It is one which we have seen just glimpses of. It is a future some of us experience when we visit free and rich nations like the US, UK, Germany or Hong Kong. It is a future built on the classical liberal principles of limited government, protection of individual freedom, economic freedom, property rights, rule of law and free trade.

Many will tell us that such a future is no longer possible given the human and economic devastation that we are likely to see in India. They are wrong. India can indeed craft such a future – however impossible it may seem today.

Indians, like people everywhere, respond to the rules and incentives. Striving to better one’s own condition is inbuilt in all of us. The question is will we be able to imagine and work towards this future – because that will pit the people against the politicians.

Thus there are two mutually exclusive paths for India. One is the path of planned poverty, the path that the politicians would take us on; the other is the path to pervasive prosperity, the path that we will have to fight for and create ourselves. Which path would you choose?

Tomorrow: India’s Two Futures (Part 3)