Grow up Mr Chetan Bhagat – this is real life and not one of your novels …

Just the day before yesterday one of my closest friends pointed me to the following blog from Chetan Bhagat in the Times of India:

http://blogs.timesofindia.indiatimes.com/The-underage-optimist/polish-the-diamond-first-before-marketing-india-abroad-make-sure-we-are-really-ready-for-business/

Let me start by saying that given his writing skills, that I very much respect, this is certainly a well written piece. But in my honest opinion maybe he should just stick to writing fiction instead of insisting on continuing with political commentary. His blog title says it all “The Underage Optimist”. So my advice to Mr Bhagat – GROW UP!

Just as the usual caveat I will say that these comments are relevant in the context of this particular blog and looking back on some of his older blogs I must say that I do NOT in general reject everything that he has ever written about.

My immediate reaction to the blog was that people who really understand the diamond business are always more interested in rough uncut diamonds and its only the suckers, self included, who buy the polished end goods. If India actually had a source of rough diamonds and we wanted to do business with people in the diamond business they would not be interested in buying over priced cut and polished diamonds from us!

Instead if we could get our act really right then we would offer the whole package consisting of supply of raw uncut diamonds and services to help convert them in to over priced made to order end products and have them delivered to the end users. We can let the middle men just be that: providing us branding so as to be able to drive up the value of the end goods.

But then why stop at that? It is interesting to note that the brand owners make the most amount of margins in the entire supply chain! So why can’t we aim to be the brand owners ourselves? I love the high end stuff made in India: clothes from ColorPlus, leather goods from HiDesign, coffee beans from Kalamane, to name a few. So what I would like to see is these brands on Rodeo Drive or on the Magnificient Mile or on Fifth Avenue! Where is the agenda for that?

Make in India is easy to sell: steal land from farmers who are committing suicides in ever increasing numbers anyways and give it away for dirt cheap prices to the MNCs to setup factories and fuck up the environment even more that the Chinese did!

Millions of jobs created in the process – to be replaced by ever increasing automation within the next decade or two!

Really? Are we all that easy to be fooled in to drinking the koolaid or sweet lime soda, we are Indians after all, and be drunk on it!

The reason, as explained to me by a lot of near and dear ones, is that this is the low hanging fruit so why not grab it and get going from there! Makes sense except that do we then understand what we are signing up for? As the legendary Zen master said “Only time will tell.” Except in this case the damage will be irreversible and there wont be a time after that!

Why this degree of pessimism you ask? Au contraire my dear reader this is history repeating itself time and again all over the world ever since the start of the Industrial Revolution. And let us acknowledge the simple truth that we are where we are due to the systemic issues inherent to the Indian culture! In that regard I do agree with the comment in Mr Bhagat’s blog from the billionaire industrialist about how Indian families treat their daughter-in-laws.

So whats the alternative you ask; and I ask in return: Are you really ready for it? Well then read on:

Here is my manifesto in ten simple points: 

1. Reduce population growth rate to start with by offering financial incentives to couples willing to have just one kid and more specifically long term incentives to couples willing to adopt kids. 

2. Eliminate low skilled jobs by adopting high end technology where ever possible including GM crops, especially eliminate low skilled jobs in urban areas. 

3. Make an undergraduate degree in science or commerce mandatory for all kids whose family income is below a certain level and offer financial incentives to ensure that they avail of this facility. 

4. Make military service compulsory for anyone who fails to comply with the minimum education requirement. 

5. Simplify tax code and make it easier for the middle class to consume imported goods while of course upping the ante on the quality control required on made in India goods. Make the ISI mark mean something!

6. Promote high end manufacturing in India, i.e. limit Make in India to high tech. Also promote brand creation and export.  

7. Strengthen IP protection laws across the board and get rid of govt subsidies on life saving drugs. Instead focus on generics and let insurance companies drive healthcare costs with close objective oversight. 

8. Improve the education system to focus on “Why” rather than “What” and “How” right from primary education; e.g. Why is multiplication different than addition? 

9. Abolish caste systems and all reservations across all religious and social boundaries. Meritocracy must be enforced. 

10. Focus on unification rather than division. Limit division strictly to improve government administration and governance.

I also have some more tactical items such as make real estate ownership mandatory after X years of residence in a particular city/state and give special tax breaks to people who qualify for this, i.e. do away with MHADA style lotteries and instead promote housing based on location stability. 

This can also be reflected in terms of employment policies wherein you have incentives to hire from the vicinity but nothing to stop you from hiring from outside subject to additional taxes  This is like taking the concept of immigrant visas and applying it at a local level.

Now that is some grown up thinking if I may allow myself to say so! Any comments Mr Bhagat?

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2 thoughts on “Grow up Mr Chetan Bhagat – this is real life and not one of your novels …

  1. Hi,

    I agree with the principle argument – that don’t go the lowest hanging fruit, that is setting up labour shops (factories) and produce low end goods in India, which will return at 10x their cost for sale in India.

    Here are my humble 2 cents regarding the suggestions you propose:

    1. Agreed. The population explosion needs to stop.

    2. Agreed. But in short term, low end jobs is the only possibility, given that <10% population is 'skilled'. It'll take years of massive skill upgradation to fructify your proposal. But it should still be the long term goal.

    3. Strongly disagree. You'll be abetting to the process of mass churning of engineers and accountants who'll fly abroad at the first opportunity. Because they can't find an appropriate job here in India (present reality)

    4. Constitutionally not possible. Military service can't be forced in a democracy. Article 14, 19, 21 stand violated.

    5. Agreed.

    6. Agreed. But the reason I gave in point #2 is valid here as well. Brand creation is definitely something we should work on. Say something like Khadi, or the 'n' types of silk sarees woven across India. There's no need to create an Indian version of Louis Vuitton. Luxury goods are as much based on perception as their true worth. And a 'poor' country selling luxury brands doesn't ring the same bell.

    7. Agreed.

    8. Agreed. Shift focus from quantity to quality (of education) at all levels. Improve Indian R&D ecosystem by paying the PhDs their true worth. Call it shallow, but money is a great motivator.

    9. Strongly Agree. But easier said than done.

    10. Agreed.

    A couple of pointers from my side:

    1. Reform the Legislative System of India. Put minimum qualifications for election to the Parliament and State Legislatures.

    2. Specialization and lateral hiring in bureaucracy. A 'generalist' IAS being the head of NHAI doesn't cut it. You need an industry leader in that position.

    3. Incentive based salary structure in government jobs.

    4. Single point tax system like GST. Everything is paid by the consumer because even a businessman is a consumer and hence can't evade the tax

    5. PPP projects with clear role demarcation. Government gets you the clearances, you get the real work done. Penalty for any delay.

    6. Education – Only 8% people are graduate in India. To be able to read and write is meaningless when push comes to shove. People need to be educated in the real sense. Again, incentive based schemes like Mid Day Scheme or scholarship based on merit and not purely on caste or gender.

    7. Adopt the public health model of the US, where everyone pays health insurance and gets the best service in return. Operate health insurance as a business and not charity.

    " Don't give people food directly, train them to earn it "

    Thanks.

    Liked by 1 person

    • Thank you for your feedback and suggestions in this matter. I have certainly enjoyed our debate over the last few days and I look forward to exchanging thoughts and opinions of many other topics with you.

      Like

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