State of the Indian Economy

This is about the state of Indian economy, not so much about global. October of 2019 has passed with a barrage of content everyday talking about the bad health of the Indian economy. Presumably it means that the growth of the Indian economy is stalling. May not be stalling completely but definitely not growing as fast as they expect it should. So yes, the GDP numbers confirm the story. We know by looking at the newspapers. Not sure if we can tell that anecdotally, do we see scores of unemployed people on the streets or posh restaurants and shops deserted now that wasn't t he same earlier ? Not really. I keep seeing scores of unemployed people on the streets every day and I have been seeing them even when the economy was supposed to be going great guns. And as far as expensive shopping and entertainment is concerned, those Indians seem to have a lot of money to burn, if you listened to the firecrackers this diwali or in other festivals. The restaurants are occupied enough to make any reduction in food bills unlikely. So where is the slowdown evident ? The newspapers and other media aren't lying though ! Now, after the elections, its even in the government numbers. Just 5 % it said for the last quarter. Way less than comfortable for us in India, When more than 5% is achieved by China, whose economy is more than 3 times the size of India's. Even Uncle Sam gets to 3% frequently. Why are we Indians going so slow ?

I know many people who just blame this government. They have complains about demonetization, GST and the fact that the government has struck down on black money transactions. Blast them. It's remarkable that so many people believe that its impossible to run the country without using unaccounted wealth. The complainypants even have a problem with Jan Dhan accounts because they say the rural/illiterate folk don't deserve banking services and they won't use them properly anyway. Who cares about them? Who cares about teaching them to operate banking services ? Mind you, those having a grudge on Jan Dhan accounts are actually employers who are saying that they are better off with their workers receiving cash from them as salary instead of depositing money into employees' bank accounts. You know why, right ? Yes, demonetization hurt those same people too. GST is making it slightly more difficult to hide tax payables. So here we go - those crooks are now out to complain about the slowdown in the economy. Yes, the Indian economic system is stunned into inaction, it has gotten a serious shock of a different kind of electricity, named honesty.

There is now an abysmally low amount of trust left in the Indian financial system. Nobody trusts the company books and nobody trusts the company auditors. Companies with AAA credit ratings are going bust in a few weeks, so nobody trusts the rating agencies. Nobody trusts the NBFC when it spells out its NPA's, thinking that there must be a lot more. Nobody trusts the banks either with their NPA numbers. The situation was the same earlier as much as I know - when I used to mention fundamental analysis of stocks, the wise folks used to say that *all* companies cook their books so fundamental analysis is a fundamentally hopeless adventure. Repaying loans is just not a culture here. Now that the banks are getting serious about loan recovery whenever they lend, the rich dudes just don't want to invest anymore ! Even with RERA, the real estate industry still resembles a crime scene. The lobbyists are out to dilute RERA clauses at individual state level.
Now, where do we go from here ? Who is going to invest in this economy ? So far, the deep pocketed crooks used to game the system, taxation had so many holes that for the rich, stealing tax was a given. The rich knew that they could get away with sub-standard delivery of goods/infrastructure and mint money from the government contracts. Recovering money for a finished task from the government or any private entity is incredibly tough in India. The rich now balk at investing in India because the screws seem to be tightening for them, as far as taxation and loan repayment is concerned. The foreign investors are coming to their senses about the reality in India now too.

Why is Indian labour so unproductive ? Facebook and other social media are a good explanation for employees in IT industry, I know. But simple work ethic is poor among all classes of workers here. The chinese have 9-9-6 (12 hours of work, 6 days a week), they have developed their own manufacturing industry through so much hard work, relentless sacrifices and ingenuity. Where do I see such parallel in India ? Indian manufacturing taking off is a pipe dream - Indian workers are simply not working as hard and as efficiently as what is required to make manufacturing competitive. Land prices in India are sky high, wherever you go. Wherever you go in India, we see population. Tiny villages with barely any electricity look like towns, towns look like cities with non-existent dust roads and cities look like a never ending slum expanse, of limitless illegal construction.

Talk about competitiveness of Indian industry now. Indian traditional goods involve manual labour and are works of art. Mass produced goods are made so inefficiently that export competitiveness is poor. See how the local industry captains are howling in terror when the government announced a possibility of joining RCEP ? The Amul top management is terrified that exports from New Zealand will overpower the sales of dairy in India ! Do we wonder how dairy products from New Zealand, manufactured with developed country costs, then exported 10k miles and brought to India with added shipping costs and import duties still manage to beat Amul dairy products in quality or even price ? What the hell is going on ? Amul says that farmers in New Zealand are more mechanized and run their work like an established industry while the Indian farmers are running it like a family cooperative at a smaller scale, so we can't compete. What a pity. When the government announced a deadline for gasoline vehicles and introduction of electric vehicles, the auto industry captains were up in arms. They could not imagine getting to produce an electric scooter or a car even in five years time. Bajaj and TVS keep pointing to negligible infrastructure for charging EVs. But I don't see how they act so incapable. Tesla has been running the EV show for a decade now in the US. Why can the local auto industry come to manufacture EVs in five more years time ? To be fair, the government has backed off from setting a deadline in stone and Bajaj seems to have announced an electric scooter named Chetak recently. Who knows how much they have planned on producing though. The Maruti boss is crying hoarse, wanting GST reduction and going about shutting plants and laying off workers in panic mode. Maruti seems to have 40 thousand crores in cash reserve. The auto sales slowdown is barely 20% over the last year. Why can't Maruti manage to use its reserves to support its distributors and retails in such times ? Is a 20% drop in sales life threatening to some company as established as Maruti is and that has been running stellar profits for last two decades ? How are these companies being managed ? The industry captains cheered the recent steep corporate tax rate cut to match global levels. I am afraid the industry has just got a short term let-off the hook. Now the companies can simply project an inflated profit margin for free, no incentive to gain efficiencies anymore ?

The 5 trillion dollar economy target is unraveling fast, looking like a pipe dream now. I don't know what the government has in mind for now but at least it is responsive to industry concerns and is coming up with as many tax cuts and minor adjustments. But no major reforms, no land acquisition smoothening, no labour reforms, no judicial reforms that are truly epochal. It is still damn difficult to run even a proper legit business in India. Is this government capable of taking any so called "courageous" decisions any more, even with the brute parliamentary majority that it enjoys ? They seem to be in election mode continuously. Even state/municipal elections seem to impact national level policy announcements, mostly resulting in delays in getting real reforms done. Is it really possible that a country in this twenty first century, which is still on the edge over a Mandir-Masjid construction ever get its priorities sorted to begin the monumental nation building work that becoming a 5 trillion economy is going to require ? The Supreme court of this land has spent years deliberating on the existence of a mythological figure after all.

It is going to take time, for us Indians to get out of the jugaad mentality and take a honest look at ourselves in the mirror. To stop taking short-cuts. To be diligent. We need a complete moral, ethical and cultural change.

Greta Thunberg - Crusader daring

Greta Thunberg, is the name on everyone's lips and her speech all over the news. Its truly remarkable that a sixteen year old has so much awareness of industrial pollution and concern about the environment and our collective future. Very few sixteen year olds can match that up indeed ! I hope her parents or other adults are not pushing her into this cause even though its such a Nobel noble cause.

But I feel her anger is mis-directed. Listening to her, doesn't it lead you into thinking that "If only the world leaders pay heed, we would all be saved" ? Is it just the obstinacy of presidents and prime ministers which is getting us into trouble ? Clearly, getting those leaders to sign on some document won't revert this deadly threat of environment destruction. And to solve this problem, a government dictat is definitely not the right way to go.

Greta is making an fervent, emotional appeal, alright. But governments make a move based on logical, scientific and popular appeals, not emotional ones. Industries make a move based on scientific and economic data, not emotional outbursts. So Greta's thoughts should really be re-directed to those who really need to listen - the people.

The unthinking people, really. Those jet-setting all over the world, the blind consumerist who generates enormous mounds of plastic waste, who can't stay indoors without air-conditioning, nor move outdoors without gas guzzling SUV's. Those who order Californian apples and almonds into India and then travel all the way to California to eat Idli-sambar in Indian restaurants ! When are they planning to reform ?

Elon Musk BY Ashlee Vance

The extraordinary Elon Musk.

The world knows a lot more about the Zuckerbergs and Jobs' than Elon Musk. That is a problem and Ashlee Vance eliminates it with this gripping biography. You won't turn a page without an exclamation saying "That was crazy, Elon !".

Childhood

He had exceptional lineage and a well travelled, highly educated family that valued adventure and creativity. He did not have a supportive environment at his home and yet he excelled in math and science. Even as a child of 10, he had a strong sense of purpose and deemed study of some school subjects such as the Afrikaans language as pointless, partly because he did not fathom any future staying in his home country of South Africa. But when he realized that not learning them well enough would restrict him moving to the next grade, he could turn things around and do very well in all such subjects. He was bullied in school quite badly, enough for him to end up at the doctor with blood all over his face. Then very strangely he holds up that bullying he faced as a positive moulding effect on his personality and says that his own kids who would never face such cruelty would miss out on that. Being a smart parent even as a super busy entrepreneur, he restricts his kids' cartoon watching and playing games that are not something not as soft as pressing buttons for making cute sounds and encourages problem solving. At that age, Musk would often go into his "zone" - lost in his thoughts and completely unaffected by anything else happening around him. Was it one of the most over-diagnosed Silicon valley disease - Autism ? Not likely and even if it was, it would so incredibly high functioning that it should render everybody else as diseased.

Early startups

His early startups, including Paypal were true successes of his innate adventurous spirit and academic skills. They fully leveraged his natural strengths. He caught on the ideas of a fintech company and digital payments system before anyone did and while everyone else was still making a 'unprofitable-cutesy-site.com'. This is also the time when Musk habituated into a 100 hours work week. Musk was always adventurous and risk taking and such qualities truly came into common instance from hereon.

SpaceX

The work culture in the Silicon valley and other software industries is well known and well criticised. Impossible sounding deadlines are set, employees are stressed and overworked. Never mind the what the deadlines are, they are not met anyway and there is a mad scramble to deliver something, somehow. It encourages short term fixes to basic problems encountered during testing phases. Ugly remnants of past mistakes are left behind in the product and the software engineers even have a name for it - technical debt.
Now, can any company in the business of aerospace technology operate in that kind of work culture ? Mistakes in the end product are prohibitively costly. A single snag costing a human life means curtains drawn on the company itself.
Well, Yes ! Musk and his team operated in that high octane environment for years together, could not only extract the most out of his employees in terms of effort but also in terms of innovative output from them. A Boeing or some other established aerospace player tends to indulge in much paperwork with apparently slow and wasteful procedures to make a simple device or change something that failed. SpaceX employees usually made things in-house with a tenth of the budget and time. Nevertheless, the magnitude of the requirement was such that SpaceX pushed Musk to the limits and nearly bankrupt down to the last 100 grands. Don't forget that he started with around 100M out of his early ventures.
There are several innovations that emerged out of SpaceX and some of them sound quite fundamental and impactful. Not so long ago, none of the engineers and scientists in the business of making rockets reckoned that re-usable rockets was easy or even possible. The stress and thrust of a launch was too much for any material to withstand. Musk made re-usable rockets his key to achieving economies of rocket launching and thus making his company a profit out of it. Welding together large sheets of metal could be done in a much better way with friction stress that yielded lighter artifacts.
Most remarkable is Musk's ability to get down to fundamental physics with someone while reasoning and arguing about what can be done and what can't be done. Some employees find him aggressive, brusque and demanding, so be it. He has a vision and he is shooting for it.

Electric cars

On developing electric cars, Musk continued with the Silicon Valley style of project management and work culture, with apparently disastrous consequences. The project had massive cost overrun and delay and would not have been a viable show unless Musk pumped his personal wealth into keeping it going. One must say though that the if there was anyone who could build an Electric car that captured the imagination of ordinary folks and inspired the rich to buy a sports electric car, it had to be Musk. Musk did'nt want to just build a higher range electric car, he also wanted the car to go from 0 to 60 in 4 seconds. Anyone else would never have begun something so ambitious. Musk is a visionary too, and the first one to realize that improvements in the Lithium-ion battery were sufficiently good to make a full range electric car possible. Conventional car companies of the time and even today will be hard pressed to identify innovative ideas of the calibre that Musk came up with, such as free charging stations for his electric cars, touch screen controls and automatically extending door handles.

Overall ...

Musk has set for himself the loftiest goals, that most people would consider borderline insane. He wants to save humanity by accomplishing the staggeringly ambitious feat of interplanetary colonization, particularly on Mars. Note that while planning to save humanity, he didn't think of making efficient seawater de-salination or controlling global warming or making vaccines or building sanitation for all. He goes all flat out for the fantastic. And continues to calculating the number of rocket trips it might take to send people to Mars. And he could explain all this to someone while finishing dinner in a cafe with a dollop of desert sticking on his chin.
But in aiming that high, he has already accomplished so much that was previously thought impossible. It might have taken more time and more money than he imagined but he has clearly done what he declared as a near term goal !

Does this world need more Zuckerbergs and Bezos' and Jobs' ? yes.
But do we need more Elon Musks ? Bloody sure yes !