Category Archives: Lectures

How E-Commerce is Transforming Retail in India

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Manish Tiwary, Country Manager, Amazon India, on what drives the company to provide the same access to every customer, seller, and product owner.  And how technology is making entrepreneurship completely secular.

(The Third V Narayanan (Pond’s) Memorial Endowment Lecture)

I started working in 1996. I have spent close to two and a half decades now. I am very privileged to get a chance to work with consumers across markets and across various channels. I started my career in traditional trade or the Kirana, as it is called. I was also fortunate that someone gave me the responsibility of setting up organized trade for Hindustan Lever. For the past eight years, I am part of Amazon, the e-commerce company and I am also on the board of a few companies like ‘More’. It’s a practitioner’s outlook into how this market will evolve and the role e-commerce will play. 

It’s important to go back to the basics. How do we fulfill consumer demand in a sustainable manner and continue to delight the customer? That’s what business is all about. India, as a country, has never been short of aspirations. There are thousands of influencers who take consumer needs, wrap them in a very compelling story and share it. With rising incomes and penetration of technology, a huge demand is being created. 

In my first job as a trainee, as part of a group, I was asked to launch a new brand of shampoo and that was big news.  99% of households in India used to have one shampoo. The same shampoo was used by dad, mom and children.  That was the era back then.  At max, you could walk into a store and probably get ten brands if you were lucky. We were so excited five years later when conditioner started coming into the country. Fast forward 25 years. Open your Amazon app and type on the search bar ‘shampoos,’ you will have close to 1100 brands in 48,000 SKUs. Very importantly, we get consumers to select easily. 

Filters and refinement

When you log on to the app, you will see something called filters and refinement which help you shop. How are these filters decided? If all of you decided to buy an air conditioner and you search for air conditioner with remote and when x number of people search, we realize that people are looking for a specific air conditioner with a remote. So we put a filter called ‘Remote.’ Next time when you search for an air conditioner, it’s easier. You click on ‘remote’ and it will shortlist the choice.

You might have experienced ingredient free shampoos—sulphate free, phosphate free, etc. We have 26 filters for ingredient free shampoos on Amazon. It is a real life shopping app created backwards. That gives you a clearer idea of how aspirations and consumption habits are changing in this country. All this obviously leads to a number. If you google, there are enough predictions which say that from 800 billion dollars, we will probably hit $2 trillion in the next 10 years in terms of consumption.   

Supply-side stakeholders

While the demand is moving forward, you also need a supply side. There are two important stakeholders in the supply side—brand owners and manufacturers.  How do you reach them? Rewind ten years back. Distribution was a big barrier. You had to physically go and distribute to lakhs and lakhs of stores. To get people to know about your brand, you had to advertise. The smallest unit of advertising would be a local language channel. Even that would be really expensive. 

People had good ideas but they could not get it into the market. Therefore if you wanted a sulphate-free shampoo, where would you go? Every city has its own place where you can buy some of these imported goods like Palika Bazar in Delhi. Half the time, you came across expired stocks, so you would not get the good experience.  

Second, how would you reach the brand? Traditionally, we have 13 million stores which do CPG/FMCG. We have an awesome set of retailers who can do the best CRM without having technology. They know every consumer. They can give great service but have limited assortment. It was a challenge for them to organize fresh stocks. Then modern trade moved in. Organized trade in India has seen a success but in limited pockets.

Given the context in this country, it would be challenging for organised trade to expand beyond a point because three costs are critical in organized trade—people, land and utilities. There is a common perception that India is a very cheap market. People costs are not very high but utilities and land are probably as expensive as the most expensive real estate, including things like electricity. Even in the retail trade, you will see most of them are coming up in state where utility bills are low like Andhra and Telangana. So the financial model, if you are going to sell with the MRP, is not very robust in India. Add to that the lack of availability of clean real estate. Bulk of the real estate in India is heavily litigated. It’s done wonderfully. But it has a limited role.  

Where e-commerce scores

That’s where, e-commerce comes in. It’s a little bit like mobility. Today everyone has mobile phones. People were looking for things and there were aspirations. E-commerce gives visibility; of course, both from the brand side and market side, there were some challenges. People get used to technology very fast in this country. When relatives come back from the US, no one can believe that they can walk out without their wallet in India. They get completely zapped.  We have 280 million digital transactions every day in India.  We have more people using the Internet than the population of the entire Europe.

Now put all of these together—a consumer base, the middle class earnings going up and aspirational people wanting to try more products, the retail environment in the country between the small kirana store and organized trade and the penetration of technology. That is where Amazon comes in.  

Journey from selling books

We entered this country nine-and-a-half years back to be precise. We celebrate our first 10 years in July. We started as small warehouse in Mumbai with 100 sellers and we used to sell books. At the start, the ecosystem was quite underdeveloped. The digital sophistication wasn’t there and people needed a catalogue. Many sellers never moved from a kirana to organized e-commerce. They just moved from kirana store to commerce.  

We took it as an article of faith that the customers in India, just like anywhere in the world, would love selection, good prices and convenience. Therefore, we started investing well ahead of what we thought was the customer demand. Our approach was quite clear. It was to use technology to enable all kinds of sellers to get access to the consumer base across the country and use technology to cut down costs in the value chain, so that we could provide the best prices to the consumer.

At the start, we realized that even as a company, there were lots of areas which we never knew how to handle. For example, cash on delivery was a unique India phenomena. Ten years ago, there were some companies doing e-commerce like Flipkart and rediff.com. But they were largely restricted to a few categories and urban centers. We wanted to use technology to remove the privilege of just the urban population who had access to all these, in a sustainable manner. We always start with the customer first. 

Keep it short & simple

If you want to be a seller on Amazon, you’re supposed to write one page, which is called the press release. It is focused on the customer need that you are addressing, how you will leverage technology to address it in a sustainable manner and the customer delight which differentiates you from current offerings. If you get the consumer model right, the financial model is easier. A lot of companies get the financial model right but the consumer model is not right and therefore the offering fails. 

Our model is very unique. In the beginning, a flywheel is difficult to move. But once it starts moving, it takes its own momentum. Our strategy is to get more selection from sellers and get them to offer better value and better convenience. We get more selection, more consumers and we deliver it faster. The flywheel keeps on moving. It’s a very unique philosophy in the management world. And in its own small way, it has served the company well over the last 26 to 27 years globally, and now in India. 

Amazing things in Amazon

There are a lot of peculiar things we do when we want to achieve this. We don’t do presentations. The annual strategic review happens in six pages. Even the font is decided—Calibri 11. We free the salesperson from the paper. We get the idea sharp and are focused on data.  

In most companies, if you went for a meeting and the big person said, ‘I like the idea,’ everyone says, “We like the idea.” In Amazon, it’s called social cohesion and is banned.  Whenever we measure a P&L, we just don’t look at the transactional P&L. We have instrumentation to measure the downstream impact of a customer. When people shop on Amazon, we know, using data, if they get the shipment in six hours and what is the likely chance of how much more would they shop. That’s what machine learning does for us. It’s a very fine-tuned science. 

From one warehouse &100 sellers

When we started, we had one warehouse. Today, we occupy 43 million cubic feet of space. Wherever you are, whether it’s Ladakh, Andaman, Majuli islands, Assam or Lakshadweep, we deliver to every pin code in this country. If you are sitting in Chennai or Bangalore, the chances are that 30% of your deliveries will happen within two days. We’ve created a massive infrastructure of warehousing and transportation to enable this. 

When we started with 100 sellers, we went to the shops and mundis and begged people to start selling online. Today, if any of you want to sell, it takes exactly six minutes to become a seller. That’s it. Anyone who has a good idea can come online and sell nationally. You just have to focus on your product and your design and leave distribution and advertising to us. Every time a consumer clicks, you pay. Otherwise, you don’t even have to pay for advertising.  More than 11 lakh sellers work on amazon.in and that includes all kinds of people from startups to current unicorns to women entrepreneurs. We keep on adding close to three lakh sellers every year.

The flywheel gains momentum

Anyone with a good product should be able to sell anywhere.  We have 100 million plus customers. We feel good about the kind of traction we are getting. We have Amazon Prime, which is, in my opinion, India’s largest loyalty program. Our thought process is very simple. The prime offering is so good that it would almost be irrepressible for you to say no. We offer reading content on Kindle, music on Amazon Music, video content on Prime Video, shopping on Amazon.in, games and many more to come. The flywheel keeps on moving faster. We sell over 20 crore products. We love selection in that sense. 

We want to ensure that we digitize close to 2 million small businesses by 2025. We’re almost halfway there. We’re also really big on exports because every seller who joins us can export to 188 countries. They have to do nothing. We take care of all the complexity, the shipping and the paper work. We plan to export $20 billion of goods by 2025. In a year, we are now crossing 3 to 4 billion already. We are a pretty large employer in India. 1.30 lakh people work for us. We could hit 20 lakh sellers by 2025. In this journey of 9.5 years, we believe that our initial thought that customers would love selection, pricing and convenience seems to be playing well. Most of the unicorns in India in the CPG and technology space were born on Amazon.  

It’s still day one

Within the company, we keep saying it’s still day one for us. What is day two? When a company becomes large and bureaucratic, when you have eight layers between you and the person who runs the company, that is day two and it is a sign that the company is in chaos. That’s a reality, because a lot of large corporations don’t exist after 40 to 50 years. Similarly, for e-commerce, I believe it is still day one. It’s still a very small percentage of the market, though people talk a lot about it.

We want to drive that every customer in India should have the same access and that every seller, every product owner who has a good idea, should get the same chance as a large industrial house, in order to succeed.  This is what technology is doing to India. It is making entrepreneurship completely secular. Anyone can succeed at any age, and become an entrepreneur. And that’s where technologies like E-commerce, digitization, the cloud and artificial intelligence are helping us.    

Q&A

What is the penetration of E-commerce in rural India? Will E-commerce expansion be at the cost of the kirana stores? Can we sustain the growth of E-commerce that was achieved during the pandemic?

It is probably 2% penetration. People choose different channels to shop depending on what they need. There are very few people who will say, ‘I’ll only shop online or I’ll only shop offline.’ During pandemic, there were lockdowns and restrictions but the government allowed e-commerce to operate. A lot of people started becoming sellers online. We have close to 2.5 lakh small stores which sell online. This accelerated during the pandemic. For a small retailer, working capital is very important. During the pandemic, we reimbursed their money every day, so that the cycle was faster. Most of our sellers operate online and offline. The ability of the Indian entrepreneur to adopt technology is mind boggling. If we continue to delight our customers and sellers, we would go continue to grow.

The expectation of large discounts from customers on e-commerce is growing. How do you manage this?

If the seller finds it efficient to sell online, he or she will offer you a better discount. Our job as a marketplace is to create the infrastructure and having the ability to serve every pin code and to put together physical warehouses, trucking companies, etc. so that the sellers can reach any customer they want quickly and make the marketplace experience seamless. We keep on getting more sellers and they keep offering better prices. The use of technology has removed unnecessary costs from the supply chain for our sellers. 

In the influencer marketing trend, the review plays a vital role in creating customer perception. How do you handle this?

The good thing about social media is that you can always find the right person. It’s not that you have to go to a film star to start with. Nowadays, youngsters have started doing reviews. They can become popular, depending on the quality of their content. The ability of an influencer to be awesome depends on how truthful and neutral his or her review is.   

What is your take on ONDC (Open Network Digital Commerce)?

The team which is doing ONDC is also the team which created UPI, the national payment interface. We work quite closely with ONDC. The thought is awesome. It’s about creating a pipeline where any seller can come in. Consumers can choose which seller they want, who will be the payment provider or the logistics provider and so on. This is how UPI works in some ways. It’s early days yet. We are partnering to make sure that we can execute it.  

When someone starts selling, which is better—online or offline presence? How can people be protected against online e-commerce scams?

If you’re starting new and small, I would always encourage you to go the digital way. It’s far more cost effective. It lets you focus on what you’re good at. Offline is very challenging. We leverage technology to weed out false reviews and scams. We are pretty good in machine learning and AI. We can never say we’ve got rid of scams but we keep on getting better. The key thing is to protect the customer and the seller, who are our main constituents.

What about Amazon getting into offline model, like Reliance does? How do you balance your large supply chain? 

Online model itself is so nascent right now. So I wouldn’t worry about offline. Of course, Amazon is experimenting in North America and in other parts. We should not get obsessed with the physical market. We should be obsess with the consumer. Every time ask yourself, what can you offer better: Offline or online mode? Amazon warehouses have millions of products. We insource our technology and it is a strength area for Amazon. How we manage to handle the supply chain of 20 crore products and still get them to you with probably 99.8% efficiency is almost a trade secret. Our backbone is technology and nothing else.  

How will 5G impact e-commerce?

Any technology upgrade is good for us. Faster speed of data is critical for our business and so 5G will be good for us.

With the purchasing power of consumers increasing in India, who do you think will be the mainstay of Amazon’s revenues—Indian market or global markets?

I think we have the best of both worlds. I have spent 25 years in India and I get technology from North America. We have spent a lot of time understanding consumers. Our ability to read signals on what is good or bad is much faster in online than offline. A lot of people tend to think of Amazon as an American company, which legally it is, but it’s exactly like Hindustan Lever. We appoint people who work here and who have a great amount of expertise and knowledge.  

In Amazon, which is important—customer or employee?

The customer always comes first, the seller comes second and then the employee. That is our philosophy and I’m saying it in a very serious note. We don’t have fancy offices. They are bare bones. Everyone in the company, including the owner, has to fly economy, even if it’s a 20 hour flight, because we believe every rupee or dollar we save, we can put it back so that it helps a customer. The seller comes second. If a seller does something which impacts a customer, we will always protect the customer first. Obviously, we need great quality of employees. If we’ve not taken care of our employees, we can’t take care of our customers.  

What’s your word of advice to entrepreneurs waiting on the fence to launch startups? We see that only a few succeed.

If I am younger, I would want to do something on my own. It depends on what stage of lifecycle you are in. If you have a good idea and if you’re focused on the customer, give it a shot. Some would succeed and some wouldn’t. You have to be innovative to succeed.

In creating a work culture, how do you ensure that it is embraced at all levels of the organization, especially since you have a global model? 

People think of us as a technology company. The strongest thing in Amazon is people practices. Let me give you an example. The first day I joined the company, I came in early and the door was locked. There was a guard walking outside who said that if I wanted him to open the door, I must raise a TT. It means a Trouble Ticket. It is a digital company. You don’t have secretaries who look at your mail. Your room size is identical. You don’t have a permanent seating space. It is genuinely mobile. The culture is extremely strong and there is no hierarchy. We keep on saying, work hard, play hard and make history. Amazonians want to do something which can create a difference in this world. People think we are an e-commerce company. But then, we are an entertainment company, a cloud company. There is no better place for people to innovate than Amazon.  

By and large, who do you think transact fairly in e-commerce—Indian customers or international customers?

I don’t know what it means by fair. Our philosophy is that 99% of customers are always right. We don’t put systems in place which penalize a good customer because we have a bad customer. That Indian customers return more in online than international customers is a myth. Consumers in India behave exactly the way consumers behave elsewhere. They love the ability to return anything in seven days, if required.  

Does not digitization lead to loss of employment?

I completely disagree. What has changed the most in India? The sheer number of people working for technology. May be 30- 40 years back, the thought of employment was a government job. Right now and I’m not talking about Amazon-  think of Swiggy, Zomato or Flipkart- I can say it with confidence that anyone who’s past class 12 and has a driving license in this country, can get a job worth 30,000 rupees. After Seattle, we have the best brains in artificial intelligence and machine learning, working in India. We have Amazon’s second largest office in the world. Technology, in my opinion, is what will take India far beyond the 5 trillion mark.  

Relevance of data science across all functions

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Academic institutions the world over are creating Data Science courses, degrees, institutes or colleges. Students are overwhelmingly seeking data science degrees. Industry and government are seeking to employ data science literate candidates. Prof Nalini Ravishanker, Department of Statistics, University of Connecticut, shares her experience with Data Science in recent years in a few application domains.

Data science is an emerging discipline with a plenty of job opportunities. Data scientists are trained practitioners in analysing data in the best possible way for facilitating good decision-making. In the US, data science has become ubiquitous and every university has a data science program of one sort or another. You can think of data science as a tripod, according to the National Science Foundation. Its three legs can be thought of as statistical methods, computing algorithms and domain discipline.

The world is full of uncertainty. Statistical methods enable us to quantify uncertainty. Computer science is what gives us efficient algorithms. So if computing algorithms and statistical methods pair up, then we have a coherent discipline, where we have efficient algorithms for handling complex, big, humongous, streaming data or any kind of data coming into play. We can forecast and do efficient decision making under the blanket of mathematical statistics or probability, so that you have confidence in what you are doing. It’s not ad hoc. This is a disciplined way of doing things. The third leg of the tripod is the domain discipline. You could be running a marketing firm, a cybersecurity firm or a finance operation that produces data. If you want to analyse it well, in order to make decisions, then perhaps you should think about this new discipline that is cropping up called data science.

Good data scientists are definitely very savvy data analysts who facilitate decision making under uncertainty. Earlier, data engineers did all the warehousing. They brought the data, cleaned it up and brought it to the table. Then the data was passed to the analysts who did all the statistics and computer algorithms. But that division is becoming fuzzy now. Today, a data scientist most likely has to do some data engineering as well. They also need to talk to one another. Everyone is looking to hire data scientists. If you train yourself in data science, you will have a job. There are tons of places where data science is being done these days.

Case Study 1: Freeze Loss Mitigation

We did IoT data analysis for an insurance firm to mitigate insurance loss. The IoT data came across time. Thus, it is time series analysis done in collaboration with a company called The Hartford Steam Boiler (HSB), which is in Hartford, Connecticut, near my University. I’ve been working with this company since 2019 on this project, which concerns freeze loss mitigation. Pipes freezing is a very common problem in the cold parts of the United States. The water pipes may break and the whole house or your building gets flooded. It is a catastrophe for the client and the insurance firm, which has to pay out huge settlements. The whole idea from the insurance firm’s point of view is about what I can do at the client’s place to bring down this risk of freeze loss.

Here is the idea: HSB will install sensors in some locations in a building where they can detect the temperature. The client will have to monitor it. The temperature inside the building will be transmitted back to HSB. There will be engineers and other analysts looking at their dashboards and computers, looking if there is a potential for a freeze. If the temperature gradient keeps going down, then they would alert the customer by a telephone call or a text message. Then they sit and hope that the insured person will take action, hopefully go and raise the thermostat in their house. The problem is, no client is going to take the time to call HSB and say, “Thank you for the alert. I just fixed the problem.” So HSB is left guessing.

And here is where they seek help from a data analyst. They know what the temperature trajectory looks like. They also know what the outside temperature looks like. They came to us and said, “You call yourself time series experts. Can you use this information and tell us how and when to alert the customer first? And second, can you tell by just looking at the data before the alert and after the alert, whether the customer at the other end could have taken action or not?”

It seemed like a tall order. But that’s how data science works. This project was a joint venture between people in computer science and statistics. I was involved with the head of the Computer Science department. He and I formed a team, with our graduate students. For the last four years, we’ve been tackling problems like this.

Need for Effective Alerts

The data ranges from 2020 to 2021, covering just the winter months in the US. HSB installed 509 sensors with at least one alert event, spanning 38 States, 28 parent companies and 28 device locations (like kitchen, basement, etc.). Our team has integrated machine learning methods (ML) with statistical inferential methods to produce effective alerts. Imagine you watch a movie in your house or take a nap. An alert keeps coming. A false alarm can get really irritating. It’s just like crying wolf. The next time real alert happens, you will ignore it. Effective alerts are not false alarms.

We came up with a method to modify an existing machine learning algorithm to reduce the number of false alerts. The second thing we did was to detect the action taken by the insured, after the alert. The pattern of the insured’s data may or may not change. So we compared the before-data with the after-data, again, using statistical ideas, to say whether, with a high probability, we think the customer took action or not. The methodology we use is called causal impact methodology in a Gaussian process modelling framework.

The third thing that we did was clustering the sensors. Imagine there are 1000s of sensors and they keep growing every week. We can cluster the sensors, according to the behaviour of the temperatures. For instance, out of the 4000 sensors, 600 behave one way; 400 behave another way and so on. That is useful for a variety of reasons. Here we use data science algorithms called nearest neighbour methods. All our work is generally coded in Python and/or R. This work was done with Python code. The first deliverable was better alerts to customers. (Fig: Deliverable 1) 

Between October and February, the external temperature is quite low. There is always the possibility that pipes might freeze. The internal temperature is higher because we all live in heated buildings. But there are points where the internal temperature is dipping. For some reason, we begin to suspect that it can go further and the customer is alerted at this point.

Suddenly, after this, there seems to be a jump up and then it starts to fluctuate again. So, basically what we think is that the customer took action. Obtaining this alert was through isolation forest plus algorithm that we developed. We use something called data thresholding and distance based filtering. We cleverly used the correlation between outside temperature and inside temperature. Of course, there are lots of equations involved. 

The second deliverable (Fig: Deliverable 2) is to detect customer action by just looking at the temperatures. There are four scenarios that you can see: True Positive, True Negative, False Positive and False Negative. The next thing that we do is to set clustering sensors. In a neighbourhood system, we come with a distance metric. It is like saying if somebody is close to me or not close to me. People that are close to me, come into the same cluster. People that are far away belong to different clusters. Heuristically, we were able to cluster the different temperature data into six different groups. They are useful for people analysing the data.

The R method also allows us to come up with new clusters. As new data comes in, they don’t have to fall into the same groups as before. Week by week, we start learning. So, this is a dynamic learning process, where we have used all kinds of tools and models to understand the data. In summary, although I took a very simple example of IoT temperatures that an insurance company is using, the methods are very general and fundamental. We have R code and Python code on our GitLab link that people can leverage and try and apply and see if it works. This can be applied in many disciplines.

Case Study 2: Marketing Promotion

When a firm gives promotions, how effective are they? To which kind of customers should they give promotions or should they stop giving promotions? We call this as the promotion effectiveness study. The datais from a leading personal care manufacturer who spends lots of money and wants to know the increase in revenue to justify the increase in promotional spends. Can they quantify it for different time periods? That is the new thing we can bring to the table. We can do it in a hierarchical way for different retail outlets, different channels, different regions and so on and find out how to optimise the promotional spends. 

The study is done in collaboration with a company called Cogitaas AVA. It’s a Mumbai based consulting company. The selling is done on four sales channels: general trade, general trade-wholesale, modern trade and super stockist. The data is monthly, over 36 months. The previous thing we saw was a 15 minute data over a long period of time. That is high frequency data. This is just monthly data, the kind of data many retailers might use on volume, sales, price, number of retailers, etc. There are about 15 or 17 regions in India, like Uttar Pradesh, Andhra Pradesh and Tamil Nadu. 

As a data analyst, the first thing you do is visualization, using bar graphs. We looked at the regional distribution in the x axis and the channels in the y axis. We can see in which state, which one is dominant. We can also do it by region and channel. We see spikes followed by depression. If there is a promotion, the sales increase.

We also look at trade promotions—both deep and shallow discounts given to retailers to increase distribution and not to the end customer. We did for different products and modelled the sales in week t – week by week. There is advantage in looking at data as it comes over time. We modelled the sales for 104 weeks under four channels for 17 regions. We built static and dynamic time series statistical models.   

  The client believed that a unified management could be cost saving. The data scientists are not doing any analysis as standalone but reacting to the client’s needs. So if the client gives us the mandate, we think of the best way to implement the client’s request. So we clustered different regions and used similar statistical models within each of those clusters. 

The model that you build for Tamil Nadu need not be the model you build for Gujarat. They could all have their own little models. The dynamic model identifies time periods of above average and below average impact because our goal is to see the impact of promotional spend on sales. We are able to assess in which periods of time, the impact is high and in which periods of time the impact is low and for which channel it is high, low, etc. This kind of deep dive will help the firm to understand better and track the promotional dollars. One of the deliverables was the dynamic impact of spends by channel and region.

We can do all the slicing and dicing with the kind of models that we build. Then we can create dashboards for firms. They can click the channel or region and see exactly what is happening and get their ROI calculations, which is the final output. We can also do this for E-commerce platforms and dynamically measure the impact on sales and identify campaigns that deliver healthy ROI. The dynamic time series modelling is becoming a routine part of data science.

When you think about data, the data wrangling is a common term we use. Then the next step is developing an effective analysis modelling framework to tackle the questions; computation–coding with speed and accuracy; and then creating a dashboard. In almost every situation, the firm would expect the data analyst to help with the automation and create a dashboard with some interactive tools for their people to use.

Academic-Industry Collaboration

From an academic point of view, what are the outcomes that people like me see from collaborations with industry?

  • First of all, we advance the science, because we develop new methods. Every time, someone from a firm comes to us with a problem and that problem cannot be solved by existing methods effectively, there is an opportunity to develop new methods. That pushes the science forward.
  • We can also develop code, which is very useful. If everyone keeps on coding the same algorithm over and over again, it’s a waste of human resource. So the code is developed and shared. People can use code that is available and then automate the methods for deployment.
  • That is also a useful tool for our students to learn. We train graduate students in data science for the workforce. 
  • We also produce publications to push the science and put the work that we have done in the public domain.
  • We can have healthy industry-academia partnerships. Firms like HSB or Cogitaas partner with academia (UConn DS). The firms can provide interesting open problems, which can be used as course projects or as capstone projects.

Q&A

If I’m worried about losing my key customers, can we have alerts to say, ‘Watch out. This customer could potentially leave.”

You’re talking about churn. There are many well-known models for churn. What methods one uses will depend on the kind of data that one is able to get.

What are your expectations of students applying for the data science programs?

My university as well as any other university that starts these programs would have some gateway. Many US institutions make it as open as possible. We are not saying that only statistics undergraduates or computer science undergraduates should apply. In the curriculum, for example, in my university, we have differential calculus, an intro course in statistics and some training in R and Python. Some quantitative literacy is definitely necessary. Many universities offer an intro to data science course, which levels the field and makes those who join, at least, minimally competent, so that when they start taking next level courses, they could catch on.

My own experience this year has been that when I taught applied statistics for data science students, there was deep silence for the first few weeks. Anytime I would ask a question, the class would just stare back at me and I was scared. But then you would be surprised at how things changed. Towards the end, if I asked a question, there were six hands shooting up. The students are very resilient and they catch up very fast.

How important is data cleaning in the context of the big data world that we are all living in?

It’s very important because we all know that it is garbage in, garbage out. So we need to put good data into the modelling. First of all, there is a lot of missing data. Then we have to come up with good methods for imputing. We must look at the data from different points of view with checks and balances. Everything has to gel. We spend a lot of time making sure that the data is kosher before we trust and put it into a model.

Is the intro to data sciences course a preparatory course for MS program in the US or is it a standalone course offered by the university?

The intro to data science will be the first course that the ‘masters’ students take after they enroll and come to the program. The performance in the intro course is not necessarily a gateway to enroll for the MS program. The intro to data science carries three credits out of the 30 credits in our program.

How do you ensure the genuineness of the data? Will you be able to identify if the firm is deliberately giving wrong data?

We look in many ways and do lots of checks and balances. I think if a firm works with me, I’m hoping that they are not falsifying the data. If we suspect that the data may be falsified, there are ways in which we can detect. We can look for consistency across time and do some pattern recognition.

How do you address issues that come because of using data from multiple data sources? How do you deal with data security?

Dealing with multiple data sources is very easy. We start building models using hierarchy. Data privacy and security is a very critical thing today for the clients. My university does not want to take responsibility for storing client data on our premises. So all of our analysis is done on the company’s machines. No data comes into the university.

Moonlighting is a serious issue now. How can we prevent employees dealing in data science, from passing on the data to a competitor?

Companies generally make sure that you can only access the data with a computer and you cannot pull out any data from there. You have to do the modelling within the system. The permissions must be provided in such a way that even if you want to, you cannot take anything out of that data. We also have to sign MOUs. There are very strict laws. Even before we start the work, there has to be a contract.

We come across cases where the client has a lack of clarity on the business problem. How can we solve this issue?

 We get clarity through dialogues. The first few weeks goes in a dialogue between the two parties. That is why perhaps you need an experienced person. Converting a management problem into a data science problem calls for skills and requires a lot of interactions and dialogue. It takes some time. Once you narrow it down and clearly define the problem, then the solutions are bang on. So when you implement it back into your company, you get exceptional results.

How do you get value out of data science? How would you advise the students who want to pursue a career in the field of data science?

I am a statistician, a half data scientist as per my definition. I would, of course, say it’s very, very valuable. The workplace needs data scientists. We know that things change. Once upon a time, Physics was the king. Then Bio became the king. Now everybody wants a trained data scientist. That is why the universities are all responding by opening data science programs, including IIT Madras. There is a need and, therefore, if the students are willing to invest a year or year and a half of their time to study data science, they will get jobs.

Managing National Defence Post-1962

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Air Marshal M Matheswaran, AVSM, VM, PHD (V), Founder & President, The Peninsula Foundation; Mr V Balamurugan, Director, Combat Vehicles Research and Development Establishment (CVRDE); and Dr Stanly Johny, International Affairs Editor, The Hindu, shared their expert views on the theme. The session was chaired by Mr N Sathiya Moorthy, Convenor, Policy Matters – Chennai.

Air Marshal M Matheswaran:

When we talk of National Defence, 1962 is a milestone. In ‘62, we lost the war. When a nation loses a war, the accountability goes right up to the top leadership. And in history, no leadership has ever been spared by any country when they lose a war. Nehru, the architect of independent India, who set very strong foundations on various important strategic areas was heartbroken in 1962 after the war. He wrote to John F. Kennedy on November 19, one day before the Chinese declared ceasefire, requesting assistance to save India. So ‘62 was a disastrous milestone in the Indian history.

There are many reasons for why it happened. There are a few important quotes from well-known scholars and practitioners. One is Clausewitz, who says, ‘war is politics by other means.’ So political leadership, must be well versed in the issue of war and policy. The other person is a Roman general called Vegetius, who almost 2000 years ago said that ‘if you want peace, prepare for war.’ If you put these two together, your strategy is well built up. If a country goes through achieving its objectives, without fighting a war, then it has actually done its job. That’s what Sun Tzu says: Achieving your objectives without fighting a war is the best way to resolve a conflict or win over your adversaries.

What went wrong in ‘62? If you read Nehru’s Discovery of India, you will very clearly understand that his ambition for India was to be a leader in the international order. India was a young country that was put together in 1947 as a modern nation state and an ancient civilization. Many others including Gandhi said that India has a place at the top on the international road. But that was a paradox. Nehru was also a realist. Therefore, on the advice of Homi Bhabha and the others, he laid the foundations for India’s nuclear and space capability and defence industrial space, along with Krishna Menon, whom we all abuse for much of what went wrong in 62.

Misreading China

There were certain fundamental flaws. They all believed that India will not initiate war with anyone. It doesn’t desire to covet anybody else’s territory. Therefore, they thought that we needed to have minimal capability. They didn’t read Vallabhbhai Patel’s warning. China was declared as PRC on October 1, 1949. Within one month, Xinjiang was occupied and within six months, Tibet was occupied. That was the clear indication. But they didn’t read that. Therefore, the military was not very well prepared and it was ill equipped for the border regions. The political nature didn’t even understand the nuances and difficulties of the border terrain. So when ‘62 happened, we were completely shattered.

We could have still not lost the war if we had used the capabilities of the Indian Air Force that existed at that point of time. With the air power that was available, we would have made a mincemeat out of it. The Chinese withdrew after November 19, simply because the logistics and the winter would not have enabled them to stay there. The Chinese Air Force or the PLA Air Force in the 60s had no reach anywhere into the higher regions of Tibet. We didn’t use our air power, other than for airlifting a few people. These were fundamental strategic mistakes.

Ramping it up

Post-62, we woke up and turned around the way we looked at defence. The first was beefing up the numbers and the weapons in the Indian military. From less than 200,000, today we are 1.1 million in the army alone. The three services put together, we are 1.4 as the third largest military in the world. There was a rapid build-up of military capability in terms of production of equipment and arming the military.

By 1964, Nehru died and Lal Bahadur Shastri who succeeded him as PM was not very well judged by others. Pakistan’s Ayub Khan thought Shastri would be inexperienced. They tested the waters in the Rann of Kutch in April and May and then launched the Operation Gibraltar in ‘65 September. Here was the mettle of a leader, who on the advice of the military, instead of limiting ourselves to J&K, took the battle to the adversary and opened the attacks on the international border. We were a few miles away from Lahore in the latter part of September. But once again, as an excellent strategic decision, we stopped. The Pakistani designs were defeated. They didn’t get anything that they wanted. Military professionals see it as a stalemate. Then followed the Tashkent agreement and Shastri’s death and India decided to get back to the pre-war lines. That, I would say, was a strategic mistake.

The finest of them all

1971 was one of the finest executed wars in the military history of the world. We had a political leadership that was extremely savvy. Indira Gandhi was the best leader we could have had at that point of time. She was realistic and ruthless. She had a diplomatic core that advised her quite well. She had an exceptional military leadership—Manekshaw, PC Lal and Chatterjee. We prosecuted a war at the time of our choosing and we created conditions to shape the battlefield the way we wanted to. We also shaped the international system by signing the friendship treaty with the Soviet Union in August and shaping the UN Security Council to our advantage, for the period that we wanted. We had diplomacy, political leadership and military strategy working beautifully in this entire process. This was an exhibition of Indian political leadership rising to the occasion when required.

Without technology, national defence is incomplete. The international order is a ruthless one. When we aspire to be great power, the existing hegemony wants to retain the status quo. They don’t like a rising power and so economic barriers and technology denials will work against you. You will be targeted in a post 1945 nuclear world, if you want to go nuclear. Deterrence was an extremely important requirement.

Going Nuclear

Indira Gandhi’s decision to go nuclear in 1974 was an extremely brave decision. But thereafter, we had weak links. We should have followed it up consistently post-74. But our economic situations and weak technological base did not give enough confidence to the political leadership. Therefore, post-74, though we had a lot of imported military weapons and capability and our military was extremely fit and battle ready, as a nation which wanted to be a rising power, we were weak. That took a long time and we paid a lot of penalty for that.

Post-Indira Gandhi, everyone had a role in our development process, including Rajiv Gandhi, Narasimha Rao and Vajpayee. When the Vajpayee government in 1998 went ahead and declared ourselves a nuclear weapon state, the government was ready with multiple strategies. We knew how the existing hegemony would come at us and we dealt with it successfully. This is a fine example of managing the National Defence extremely well. Today, the same people who didn’t want us to go nuclear, have given us exemption from NPT.

Need for critical technologies

What matters in today’s world in defence is control over critical technologies. We hear ‘Make in India’ and ‘Atmanirbhar Bharath’ in a big way. We’ve created a strategy that worked well and achieved our objectives in atomic energy and space. But in the other dimensions of defence technologies and defence industrial base, private sector entry was banned for a long time due to a flawed policy. It was opened up only later, after 2001.

Notwithstanding that, the defence of a nation depends on its economic strength in the 21st Century. Those who dominate world market will be leading the military paths. The Ukraine war is a fight between the US and its allies to retain the economic control of the world. If we want to be a great power, we cannot be second fiddle to anybody. We need to have critical technologies in our control.

The French strategy

That was, in fact, the French strategy. Post-1945, they saw the writing on the wall for the international system that the US would be the world leader and the rest would have to play second fiddle. They were not willing to do that. So arms, military industry and arms exports became an extremely important critical element of French economy. By 1960s, they wanted to export arms to 100 countries and they achieved that. Today, France is capable of making every critical technology within that country. It’s not dependent on anybody. When you create that capability, you can buy from anyone. You can globalize and be interdependent. This is where we missed the opportunity and are trying to correct now. It’s not enough to have slogans but we have to go beyond that.

Focus on four verticals

Military capability or national defence is dependent on the interface between four verticals which are a) the military or the defence; b) the industry; c) research and development and d) the academia. They all should be integrated. Last week, I was in Coimbatore and interacted with the teachers. I was horrified to hear that there are colleges that are dropping disciplines of Physics and Mathematics because students are not opting for it. When a country doesn’t have fundamental sciences taken up by the students, it has a serious problem. This is the main area that we should be addressing in the context of our national defence strategy.

Of course, we are capable of defending ourselves. 1962 can never happen again. We can bring in our local superiority against the Chinese in the areas that they can threaten us. We can sort them out. I consider Pakistan as a nuisance and we know how to deal with them. It’s not easy for China to create a two-fronted sight. But if it creates that, we will have a serious issue because we are not modernizing at the rate that we want to. The Air Force today is at 32 squadrons as against the requirement of 45. These are issues of concern which we need to do address.

Mr V Balamurugan, Director-CVRDE:

R&D is one of the pillars of critical technology. CVRDE is the Combined Vehicle Research and Development Establishment. Post-1962, we went for licensed production of Vijayanta tank at Avadi. Prior to that, there was no R&D lab at Avadi. We found a unit from Ahmednagar and then subsequently it was made as a detachment and set up as a full-fledged lab. In the summer of 1975, it was redesignated as Combat Vehicle Research and Development Establishment.

In CVRDE, Atmanirbhar is not just a word. It is being implemented practically. Between 1975 and now, Arjun Main Battle Tank (AMBT) –Mark I has been developed for the armed forces, inducted and operationalization done. Recently, we got the order for 118 tanks of the next higher version of the AMBT-Mark I alpha. These are likely to be inducted, starting somewhere in mid of 2024. Apart from the Arjun story, we have also developed the Arjun variants. DRDO has made major contributions in the various domains.  

We have also made ARRV—Armoured Recovery and Repair Vehicle. This has got the capability of recovering and repairing the Arjun Tank when it gets bogged down in the battlefield. Based on the core competency in CVRDE in different domains, we also ventured into the LCA: Light Combat Aircraft. In that, CVRDE developed the design for aircraft mounted, auxiliary gearbox.

Getting our bearings right

The bearings in the LCA were imported. We took the pain of developing the indigenous bearings of the aircraft through a vendor in Gujarat. Though bearing is a small element, considering the speed in which it operates and the quality requirements, it took almost four to five years to develop it. It has been successfully introduced and will be undergoing bulk production. Now we have more requests from air force to develop bearings which have become obsolete or difficult to source.

Coming back to the tank technology, we have been importing to the extent of 62% in Mark I, mainly the engine, transmission, gun control system, Gunner’s Main Sight and so on. But in the last two to three years, we launched the indigenisation program by which the engine is developed with the partnership of BEML and transmission developed with the partnership of L&T. Within the next two to three years, the entire tank systems and technologies will be from within the country. With Atmanirbhar Bharat, the lifecycle support will be much better and easier to upgrade of the systems.

In DRDO, we have the eight clusters working in different domains. Basically for example, we have the ACE cluster from which the Pinaka multi barrel rocket system has been launched. We have the ATAX developed by our Pune-based lab. It has a 48 kilometre artillery range, which no other country has achieved. We have composite bridges which the army can use to cross. The Hyderabad lab is working on missiles – Agni V and BrahMos. We have an air defence system made by DRDO. ASAT developed in 2019 is a remarkable development by DRDO. It is able to accurately aim and hit a satellite at lower orbit, travelling at 300 km kilometre per second.

Helping a pandemic-hit nation

During Covid, we made a lot of contributions to the country. We made ventilators which were not available then. It helped the army also. We made medical oxygen plants using the technology developed by DRDO on the lines of the oxygen generating system in the aircraft. Netra AWACS developed by DRDO is being used effectively now for the country’s defence preparedness. We are also developing torpedoes, sensors and sonar for tri-services, basically the Navy.

DRDO has 52 labs. Each one is working in its domain. Parachutes are being developed from which a heavy base can be dropped. It can also be used for the Gaganyaan mission. DRDO also launched a lab called DYSL cell. They have been asked to develop core technology areas like quantum computing. So the defence preparedness of the country has been enabled by DRDO in a much better way.

Aligning with defence needs

We now have a practice of having the DcPP—Development cum Production Partner, wherein we take the industries on board. The defence production capability of the industries will be enhanced through hand-holding by DRDO. The government encourages design and R&D by private industries. The defence PSUs and DRDO are supporting them.

So between 1962 and now, the HVF at Avadi started production of Vijayanta tanks and CVRDE has gone into a bigger role of making the various tanks indigenously. After Doklam, CVRDE is developing a light weight tank of 25 tonnes with amphibious capability, meeting the requirements of the army for high altitudes. It will be air-transportable and give other benefits. We’ll be rolling out a prototype in April 2023 successfully. Thus we are also dynamically aligning with the requirements of defence.

Dr Stanly Johnny, The Hindu:

Much has been written about the 1962 War. Over the last 60 years, India and China have evolved a great deal. China is now the world’s second largest economy. They have built the world’s largest navy. They are a big military power, which is almost on the brink of triggering another Cold War with the United States, which remains the world’s most important military and economic power.

India is now the world’s fifth largest economy. We are a nuclear power, unlike in 1962. India has also evolved. It has become a much bigger, stronger and confident economic and military power. It is expected to play a major role in the Indo-Pacific region in the coming years and decades. Both India and China are nuclear powers. But despite the evolution of the status of both countries, the friction points on the border still stay. We saw that in the Galwan clashes. Just a couple of weeks ago, there was another incident which appeared in the media reports, after which the defence minister talked about it in the Parliament.

The three phases of India-China relations

What went wrong in 1962? The clashes started in 1959 in Lanzhou, and other parts of the Himalayan border, which eventually led to an open war in 1962. We are still debating what triggered the Galwan clashes. In my sense, China has historically looked at India, through the prism of its own rivalry with great powers. There could be different phases in China’s relationship with India—from 1949 to 1962; from 1962 to the end of the Cold War; and in the post-Cold War period, as Vijay Gokhale, India’s former Foreign Secretary, recently wrote in the Carnegie paper.

In the 1949 to ‘62 period, China wanted India to stay neutral. It appealed to India’s relationship with the developing world. But in the post-‘62 period, China’s relationship with the Soviet Union was collapsing on one side, and on the other side, China was warming up to the Americans in the 1960s and the 1970s. China would establish some kind of a quasi-partnership or alliance with the United States. India was moving closer to the Soviet side in the 1970s. So China’s focus was to draw India from the Soviet Union.

China was also exploiting India’s foreign policy challenges by building stronger ties with Pakistan. In the post-Cold War period, engagement started in late 1980s, with Prime Minister Rajiv Gandhi’s visit to China. We saw a period of engagement, tranquillity and also an inclination on both sides to address the border question. There was also a period of economic engagement and trade.

India as a counter weight

But in these three phases, China looked at India through that prism of great power rivalry. Initially, in the 1949 to 1962 period, China was obsessed with the United States, then with the Soviet Union and then in the post-Cold War period, China sees the United States as its number one geopolitical rival. China looks at India as a potential counterweight to its own regional ambitions. China wants to stop India from becoming an ally of the United States.

China is perhaps using limited, low-level coercion as a deterrent tactic. The message to New Delhi is that if you are moving completely to the American side, if you are going to become a pillar in the in the United States’ Indo-Pacific strategy, don’t forget that you have an unsettled, undemarcated and undefined Himalayan border, running to thousands of kilometres long with us. China expects low levels of geopolitical setback for this strategy and they don’t think India will become more aggressive in its response to Chinese coercion. In their cost benefit or risk assessment, it could create issues in its relationship with India and tensions would rise, but at the same time, they don’t expect this to explode into a full-fledged conflict between India and China.

Building long-term capability

How is India going to address this challenge? India has to emphasize the bilaterality of its relationship with China. To effect a change in China’s approach towards India or to look at India as a regional power, India has to build its capacities. India has already evolved a great deal, but when you do a comparison with China, there is asymmetry in terms of hard power—it may be economic or military power. The focus has to be on a long-term strategy of building India’s own capacities where our defence preparedness, internal cohesion and the resilience of our democratic institutions will come. Democracy is one natural advantage India has vis-à-vis China.

The Chinese did the same thing. From 1949 to mid-1950s, China was a Soviet ally. They were communist brothers. But despite this ideological brotherhood, in the 1970s, China moved towards the United States, hosting President Nixon and Henry Kissinger. They broke away from the Soviet Union and became a quasi-ally of the United States, which Mao called the imperial power. With the United States, they wanted to contain the Soviet Union, which they identified as their primary challenge. From the 1970s, until recently, China was very much focused on building and strengthening this relationship with the United States, irrespective of its ideological convictions. Only now, after attaining the military and economic confidence under President Xi Jinping, the Chinese are directly challenging the United States. This is what the Chinese model is.

But compared to India, the United States does not share a Himalayan border with China. This is one of the major challenges India will have to face. India is a huge nation with a peninsular coast on the one side and a large population. Our economy keeps growing and we have the natural potential to become a regional power. The border problem is an immediate challenge, which we have to address. At the same time, we need to have a grand strategy to transform India.

Q&A Session

When do you expect India to reach a level where we can compete with China?

Air Marshal Matheswaran: We must have a clear national strategy, like France, which I discussed. In critical areas, we have no option but to create capabilities irrespective of what the cost is. Those capabilities don’t come overnight. It has to be addressed in education, R&D, industrial investment, and, of course, users’ inputs. Our investments in R&D have been abysmally low. But we are now moving up. If we go past 3.5% of GDP in R&D investment, it would give us a significant leap forward to address some of those issues. We need to have a good roadmap. If you study China, they bought as much equipment from Russia as we have done, if not more. They monitored every weapon system that they took from Russia, reverse engineered and produced better ones of their own. Have we done that? That’s the question.

If China were to attack us tomorrow, will there be hundreds of battle tanks coming across the border? What kind of battle will be happening?

Air Marshal Matheswaran: War is always complex. It is ultimately all about politics. It’s a political objective that defines ultimately how a war will be fought. It will also depend on the capabilities. You need to retain the dominance of the narrative in the context of the war. As Stanly pointed out, I don’t see a major war coming between China and India. Neither is China foolish nor is India adventurous. Both are civilizational states. They have tremendous political maturity. The needling by China is to keep us under pressure. We need to grow out of that and put them on the defensive and then it can be sorted out.

What is the status of our defence exports?

Balamurugan: We are already an exporter to the South Asia and recently to Arabian countries. We are trying to push a lot of things forward. In another three to five years, we’ll be having our own technologies in many defence areas. Regarding critical and pioneering technologies, we will develop them in another 5 to 7 years’ time and then we can export them to others.

In India, we seem to lack civil-military integration. This is one of the things China achieved after Deng Xiaoping took over power. When will India achieve a civil-military integration?

Air Marshal Matheswaran: Every citizen must have an inbuilt passion to contribute to national defence. We should have started with compulsory military service. As we are a huge population, the challenges are many but we could have found a solution for that. In the US, those who come into critical areas of governance—be it bureaucracy or the political leadership- should have military service. This was practiced in more than 250 years of its history. Of course, now things changed after Obama came. But internally, there is a lot of debate going on there.

It was mentioned that India has 32 squadrons as against the requirement of 45. Can the requirement come down if we have high quality and expensive aircrafts?

Air Marshal Matheswaran: It doesn’t work that way. The required number has its own importance. Given the environment in which we live in, given the large threats, we have to keep our powder dry and that needs a certain minimum optimal size of military forces. 45 has been arrived at, based on that calculation. Technology will keep leaping forward. Despite that, those numbers are absolutely necessary.

How will you rate the nation’s defence preparedness?

Air Marshal Matheswaran: We are capable of handling the threats that are there around us. But why do you want to be always under pressure and tension? Remember, victory is winning without war. So we must create a deterrent capability.

When we take up indigenization, there is a common mindset that imported equipment is always superior. How do you handle this?

Balamurugan: When we develop indigenously, we have to meet very strict international standards. For example, when we develop an armoured fighting vehicle engine, there is a qualification cycle called NATO cycle. It has to run for 400 hours without any problem. Same is the case with transmission. It has to perform flawlessly and meet the international standards. We have to qualify the equipments to that kind of testing.

One more advantage we have is the harsh Indian weather and climate conditions and temperature profile. We develop to 60 to 70 degrees hardening, so that they will work comfortably in India. There is no compromise on qualification and therefore, it is much better when the defence equipment comes from India. If we talk about missiles, they are not available for imports. We have developed all kinds of missiles such as surface to air and air to air, including the Brahmos.  

How do you view the foreign policy followed by the present government?

Stanly: In the first five years of this government, there were challenges as well as engagement. In the neighbourhood, India faced a number of challenges. We faced resistance in several neighbouring countries, which have had traditionally and historically good relationship with India. In its second term, the government has tried to fix some of those issues and has built again with Bangladesh, Nepal and Sri Lanka. India took a very positive position in helping the Sri Lankan people during their economic crisis.

Shaping Tamil Nadu Towards a Trillion Dollar State

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Dr Palanivel Thiaga Rajan, the Tamil Nadu Finance Minister, outlined his views and perspectives in his address at the Fourth R K Swamy Memorial Lecture.

Many states have announced their trillion dollar goals, including the state of Uttar Pradesh. Of course, the first difference between us is that by population and size, Uttar Pradesh is about three times that of Tamil Nadu. So even when UP gets to a trillion dollars in roughly the same time as us, it would still be—at a per capita level—one-third at best. Whereas, in Tamil Nadu, we are already effectively a ‘below-replacement’ rate society. But, slogans and targets are important in the political discourse. They are important in setting a common agenda for everybody to work towards. For Tamil Nadu, I want to discuss about how we to the trillion dollar goal with three different perspectives: one, purely a mathematical or macroeconomic perspective; two, an administrative or a top down perspective; and three, a people-based, bottom-up perspective. 

Numerical perspective

The problem with targets is that there are two or three major variables beyond our control. The first is population. Economy has a very different feel, depending on the size of the population and the rate at which it’s growing. The second is that we don’t control the value of the dollar. And finally, the targets are set in nominal terms or that day’s money. When you set it in nominal terms, you have a variable of inflation or the weakening of money, which is also not in your control.  

If we assume that we’re starting roughly at around 300,000 and we have to get to a trillion dollar, assuming that there is not any dramatic movement in the exchange rate, then mathematically, we’re looking at a compounded annual growth rate (CAGR) of  about 14 to 15% a year, between now and the year 2030. That seems like a lot. But it is neither that big a stretch nor historically unprecedented. For example, in the years 2006 to 2011, we achieved about 10.15% real growth without the effects of inflation. If we assume inflation was 5 to 6%, we were averaging 15 to 16% growth. The odds are that inflation stays closer to 6% for the foreseeable future for various reasons around the world. So it’s eminently doable in terms of just the mathematical requirement.

The tailwinds and headwinds 

We have some very good tailwinds and a couple of looming threats. From the tailwinds perspective, the diversification and logistical delinking from China and the increase in the scale and scope of the Indian economy, all benefit Tamil Nadu disproportionately. We are one of the preferred destinations of the global de-risking and decentralization. As has been the case since 1991, the year of the reforms, we generally have a levered rate relative to the Indian average. If the Indian economy grows at 6 or 7%, we tend to grow at 8 to 10%. That’s because we have relatively good infrastructure, a very well educated, large and young workforce and better connectivity than most people in terms of ports, airports, internal transportation, etc. These are some of the good tailwinds. We have seen 40 to 50% increase in global investments since last year. We’re continuously fielding new inquiries and trying to close new transactions. In many ways, we will benefit from that. This morning, I had the Vice President of Uber Global from the Bay Area here, talking about how they could help with public transportation models and new approaches.

The one real fear I have which is not unique to us, is that we are in an unprecedented situation in terms of global liquidity and global fiscal constraints. If you look at global monetary policy since 2008, there has been unprecedented excess liquidity—probably to the order of 4 or 5 trillion pre-Covid and then another 2 or 3 trillion since then—sloshing around in the system. Very few countries like Singapore are desperately issuing new securities and soaking up the excess liquidity in the market.

After the pandemic, most governments did a lot of fiscal stimulus. As long as was only monetary stimulus, inflation was contained, as the money was not actually reaching the hands of the people who could spend it. But fiscal stimulus by design gets it into the hands of every citizen or the lowest part of the economic structure. They spend it and then they invest it like low level stock investing as opposed to the big conglomerates that get access to the liquidity and buy real estate, market assets, etc.

I’ve never seen this rapid rate increase in the 20 years I lived in the US. Of course, it started from unprecedentedly low levels. I’ve never seen this kind of a rapid rate increase by the Federal Reserve of the United States and many other banks are keeping up with it. So there is a reasonable risk of a global recession and the central banks of the world cannot engineer a soft landing through an unprecedented storm of liquidity and inflation.

The Top-Down Perspective

As government, our job first is to manage the fiscals of the state properly. It is an undeniable truth that states that borrow for capital investment and states that control their interest payments as a percentage of their total revenue spending, tend to have better growth, going forward. That is a truism. I quoted it right out of the RBI book at my maiden speech in the Tamil Nadu Assembly in July 2016. It’s as true now as it was then.  

So from that perspective, our first job as government is to bring the fiscal under control and meet those two criteria—that we borrow only for the sake of investment and that we control the interest cost as a percentage of the revenue. Now, both these deteriorated dramatically between 2014 and now.

From 2003, the passage of the FRBM act in Delhi and the FRA act in Tamil Nadu, till 2014, across all parties, the fiscal of the state kept improving. Debt-to-GDP came down from 28% to 16 or 17%. Interest revenue came down from 21-22% to 10 to 11%, till there was a serious political leadership vacuum. Our view may have been different than that of Ms Jayalalitha of ADMK. But as long as there was some leadership executing some view, the fiscal was in control. After her incarceration in 2014, things turned dramatically worse. And for eight years in a row, we had record revenue deficits, culminating in a revenue deficit of about 62,000 crores in 2021.

We have started to make a big dent in that in 21-22, though coming to office after 10 years and spending about 20,000 crores more than what was planned in that February in the interim budget and losing about 8000 – 9000 crores in revenue due to multiple lockdowns for second and third waves. We reduced the revenue deficit and the fiscal deficit by 16,000 crores last year, the first turnaround in eight years. And we are on track this year to do something similar. So when we borrow less for revenue expenses, we are able to invest more.

We have a debt ceiling, both in terms of the FRA act and more stringently by the one imposed by the union government on all states using their Article 293(3), the equivalent of first lien rights where they limit our borrowing. So, the less we borrow for revenue spending, the lower we pay in interest later. The more we invest this year, the more capacity we build as buffer for the future. Under the terms of the 15th Finance Commission, if we do not use the allowed borrowing limits, we are able to roll them over till the period of expiry of the 15th Finance Commission, which is 2026, after the one year extension that the Prime Minister gave them due to COVID. So, we are doing that part properly.

Caring for MSMEs

The second part is to improve the ease of doing business. Because the government can only do so much, what we really need is private investors, private entrepreneurs and independent businesses, particularly the MSME sector, which creates about 70 to 80% of all jobs, to step up. We need to make it easier for them to do what they do, which is to take risk, build rewards for themselves, create employment for people and improve the overall economy of the state.

We are doing quite a lot. We are now actively engaged with the state-level bankers’ committee, ensuring access of credit and distribution of client base, to reach as many entrepreneurs as possible, partly through improving communication and training through the MSME department whose Secretary happens to have double hat as the expenditure secretary in my department. So we work closely together. There’s a lot more we can do. Guidance Tamil Nadu, which is a single window promotion agency, almost routinely wins Best Agency of the Year awards. We are generally reducing the red tape.

I’m also starting to have discussions with my counterparts in Andhra, Telangana and Kerala, particularly with Telangana, which is the most direct competitor to us. I’ve had a couple of conversations with my friend KTR to make sure that we don’t get cannibalized into transactions that are disruptive or destructive of value. But that’s something that’s on the fringe.

Need for execution skills

The biggest constraint for the government of Tamil Nadu is not money but the capacity to execute on time, under budget, and deliver finished outcomes as planned. That’s not new or unique to the government of Tamil Nadu and that’s all over the place. But in Tamil Nadu, we have a problem because our capital expenditure ratio went down from almost 3% of GSDP in 2011 to about 1 to 1.5% at the bottom, in 2021. Now, when you reduce your spending that much relative to the scale of the economy, clearly, the capacity of execution does not sit around idle waiting for you to spend that kind of money. So some people go out of business, some machines get moved, some companies diversify, some relocate. And so overall, our ability to execute as quickly as we can provide the funds is in fact a bit constrained. And that’s partly a legacy problem. After seven, eight years of falling investment, it’s not likely that you can just turn that switch on overnight. So it will take us a while. Particularly, we’re very focused, therefore, on more and more PPP model, rather than the Government of India’s model where you build something first, and then try to monetize it later. We believe that doing it as PPP—not for core things like citizen services like drinking water but for construction, for infrastructure, for ports, airports, roads, and so forth.

Ms Jayalalitha too had a model under her Vision 2023, though it never got executed. The vision was to double capital expenditures from 3% to 6%. By having the 3% borrowing  plus 1.5% surplus in revenue plus 1.5% of private investment, either through funds or directly into projects or in partnership with the government in some other PPP way, we can get to 6%.

But certainly our ambition is to get to 3% and to find another 1% or 1.5% in PPP. The greater value of a PPP model is not just that we leverage capital but they will bring the execution skills, the EPC capacity, the engineering talent, the ability to deliver on time under market discipline of the capital they have raised and their need to answer to. So top-down, this is the way we see it. We need to ramp up annual capex back to 3% of GSDP.  

We’ve just put that in a quantitative model this year. Nominal GDP is estimated about 24.5 lakh crores. If we continue down this path, we will be at 30 lakh crores or so in two years. So, 3% of 30 lakh crores will be about 90,000 crores. If we have reduced or eliminated the revenue deficit by then, which is the track we are on, barring a global recession, we will end up tripling our capex in two or three years. As long as we can find the execution capability to do that much capex in time, then, we will suddenly see a huge multiplier effect and not have a problem in reaching our 15-16% CAGR in nominal terms.

The People Perspective

But there’s a third component or a third perspective to this. Just because I have the money or engineering capability or a company with the administrative bandwidth or systems, it does not guarantee outcomes. At the end of the day, it is the people that are the most important asset or limitation of any society, community or state. And since we are in a global economy, whether we like it or not, the final deciding variable is per capita productivity. The higher we have per capita productivity, the more globally viable and competitive we are and the better the quality of life that we can deliver to our citizens, if we do everything else right.

And in particular, I would focus first on the notion of inclusion. Different people have different philosophies. The Economist recently carried an article and was called the Gujaratification of India. It basically showed how the investment ratios have changed—how much towards capex, towards social spending, and so forth. They compared Gujarat and Tamil Nadu and said the two of us have roughly the same per capita income. But the poverty rate in Gujarat is four times the poverty rate in Tamil Nadu. We are fundamentally different societies in terms of the distribution of wealth, consumption, education and access.

This is a very important distinction. When you build refineries and robot driven manufacturing plants, you’re going to pick only the cream of the crop. But if you want to build a wide-based average productivity model, where many people get better off and not a few, then you have to increase per capita productivity and increase inclusion in the quantifiable economy.

Investment in children and women

So from that perspective, I would say the more we invest in children, the better. For example, in the remedial education program, Tamil Nadu is a pioneer. Our Illam Thedi Kalvi scheme has now been presented at the UN General Assembly. For 2% increase in spending, we have achieved a 17% improvement in the remedial upside of children coming back to school.  We have started under the chief minister’s leadership, a pilot program to provide free breakfast to young children. Most mothers are not able to get up, cook and supply food to their children before they go to work or before the children go to school, which is often very early – 7or 8 o’clock in the morning.  

The other huge variable, I think, is to truly be inclusive of women in every aspect of the economy. We take some pride in Tamil Nadu, in that, with the Justice Party government at the helm, starting in 1921, women were given the right to vote and stand for office. We had women legislators. We had a woman deputy speaker or leader of the Madras Legislative Council. Compulsory elementary education when legislated in 1921, covered both boys and girls.

We have almost 85% of all our 18 year old girls either graduated from high school or gone through high school. That’s not so in most other places. In Gujarat, it’s 50%. But that is only a beginning. That is nowhere near enough. Every time I go to a school or a college, especially women school and women colleges, I exhort them to continue. Having gotten good education, having come this far, having more girls as rankers in the exams too few of them get to operate in the quantifiable GDP calculable economy. Many of them get married or for other reasons, they don’t participate.

So the government is focused on increasing their activity in multiple ways, starting with something as simple as providing free bus transportation, so they’re not dependent on anybody and can actually find their way to work, even if it is a domestic work or anything above that. The free bus rides enable them, empower them and free them up from constraints. We focus on a lot of other ways to bring more women into the workforce.

We found Tamil Nadu has the highest gross enrolment ratio into tertiary education at 52%, almost double the national average and 15 points higher than the second state which is Kerala. But there is a dismally low college enrolment rate for girls coming out of government sponsored or government run schools. So, we have now put out a new scheme where any girl who comes out of a government school and joins ITI or a polytechnic will get 1000 rupee a month scholarship. And anyone who comes out at 12th class and joins a regular college will get 1000 rupee scholarship.    

Matching jobs and skills

In Tamil Nadu, like most places in India, we have a surplus of college educated graduates who are looking for work on the one hand, and many companies who say that they don’t have enough employment-ready or skilled-ready workers to recruit, on the other hand. When you expand the scale of education, this is only to be expected. Partly to fix those problems and partly to give proper career guidance and counselling to current high school students and their parents, our CM Mr Stalin has inaugurated his pet scheme, called ‘Naan Mudhalvan.’  It provides the kind of skill and work ethics to increase the employability of the workforce. This is for both existing young people who don’t have jobs, as well as future generations that will come out of school.

We are working closely with many different models, including with multiple organizations from Germany, where they have a skilled apprenticeship model of very highly paid skilled trades, particularly in the automotive and robotics and other sectors. I learn that IBM is working closely with us and creating a lot of certified programmers for particular kinds of needs.

So I would say in conclusion, that, barring a global recession, we will get to our goal in time. On the other hand, if we were to see a global slowdown, Tamil Nadu is better hedged than most others. Above all, I was a risk manager in my career in the financial service industry. I’ve applied my own way of thinking and will ensure that we’re properly hedged as best as we can be. A recession doesn’t mean that money disappears. It just means that growth slows down or goes negative. That’s when governments really need to step up spending and support the bottom of the pyramid and stimulate demand.  

Need for 3 Cs

In the final analysis, there are probably three important things that I can see if we have to achieve relatively above average outcomes. The first is, we should have compassion. To me, the overarching quality of a public servant, of a government, of a party is humanity. We are here for improving the lives of people, starting with those that are the worst of the least and provide them with opportunity. Not that everybody stays at the same place all the time.   Some people improve, some fall behind, some get hurt, some lose their jobs. So we ought to have a system that is flexible and dynamic enough and we should be able to find those in need today. There is no such thing as permanently in need and permanently not in need. So we need to think more dynamically about that.

The second quality, I would say is competence. Everybody talks big. The question is: Can you deliver what you say you will deliver? I think very few people focus on that and very few people actually deliver that. I’m very proud to say that my chief minister every day holds us to that standard. 

To do all of this, you really need political courage, because without reform, there is no improvement. You can’t keep doing the same things and expect that suddenly the world will give you better results. You got to do things differently and better. And in politics, reform is a very dangerous word.

Yes, Minister!

Many of you may have seen the comedy series called ‘Yes Minister’ and ‘Yes Prime Minister.’  The civil servant, Sir Humphrey who wants to put a noose around his minister’s neck, waits till the minister makes a proposal and he says, “Yes, yes, that’s all good. Very good. That’s great.” And then he says, “But Minister, that’s a very courageous decision.” That’s the anathema in politics. Not many people can make courageous decisions. I’ve been very fortunate to have a chief minister, who, himself makes courageous decisions and most importantly, backs me limitlessly when I have to make courageous decisions.  

Elections in India – Past, Present and Future

Dr N Gopalaswami, Former Chief Election Commissioner

The Election Commission was formed a day prior to India becoming a Republic, to convey the message that it is an independent body. In the first election that was held in 1951-52, there were only 17.32 crore electors. There were 403 constituencies. Contrast this to 2019 elections when we had 543 constituencies; 91.19 crores of voters and 10 lakh and 10 thousand booths, said Dr Gopalaswami.

According to him, the makers of the Constitution deserve applause for believing in universal adult franchise, even though 15% literacy rate was found in men and only 7% in women. However, when it came to voting, women participation was very low to start with. In the 51-52 election, it was only 1.15%. But in 2019, women have overtaken men by 0.17%.

Tracing the evolution of election commission over the years, he touched upon the crucial role played by former CEC Mr T N Seshan in making the election commission an independent and powerful body, enforcing the model code of conduct, introduction of voter ID cards, etc.

He also traced the evolution of EVMs. In 1982, the then EC started using the EVM but in 1984, its use was stayed by the SC and ballot paper was restored. It took another 8 to 9 years before the constitutional amendments were made and EVMs were re-introduced. EVM has gone through various iterations. The latest machines allow a maximum of 384 candidates to fight an election in a constituency. TN was the first state to use EVM for an entire state election, followed by Punjab. In the 2004 Parliamentary election, the entire country went with EVMs. Integrity of the machines has been verified through VVPAT, he said.

Dr Gopalaswami highlighted that there are many reforms that need implementation and listed some of them: giving rule making power to EC, proxy voting for overseas Indians, need to relook at electoral bonds, power to de-register political parties, preventing people with serious criminal records from contesting and so on.

On one nation, one poll, he said that it is technically possible but politically, it may be difficult. As a pre-requisite for this, Article 365 should be done away with.  Regretting that electoral participation in cities is very low, he paid tributes to India’s first voter Shyam Saran Negi from Himachal Pradesh, who died at 105 years recently, having voted in 17 parliamentary elections and upholding the spirit of democracy. 

The Changing Leadership Expectations

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Commemorating the 100th joint lecture series of MMA and Andhra Chamber of Commerce, Mr D Shivakumar, Group Executive President, Aditya Birla Group, gave a presentation on how leadership expectations are changing fast and how it is impacting our lives.

A staggering amount of change has taken place in the world. It’s only when you step back and look at it that you realise how much the world has changed. Let me take you through the last hundred years and how things have changed. Post-World War II, America became the dominant power; reconstruction of Japan started; The World Bank came into being; and Europe was being reorganized. Government played a key role in rebuilding the economy. One could not do anything in the world without the government. Leadership then revolved around military strategy and generals, and politics was about the ‘great man’ theory and a rules-based world order.

The 1950s were industrialists’ era. The model of leadership was around what the industrialists were doing. We learnt from them. In the 1960s, the world saw the hardware era. We had the supercomputer and IBM System/360 mainframe computers. In the 1970s, we saw the start of global branding. Nescafe and Coco-Cola were one of the first few brands to go global. The 1990s witnessed globalization, thanks to the rise of China as an absolute manufacturing powerhouse. We got cheap products, well below the inflation rates in most countries. The 2000s saw mobile phones coming through. I was involved with mobiles for close to a decade. In 2005-06, when I started in Nokia, there were just 90 million subscribers in India. When we said we’ll connect the 90 million to the 900 million who were not connected, everybody laughed at us. Today, all of us have mobile phones. The digital era started.

The current era, from 2020, is the platform era. It is about disruptive ideas. Each of these eras had a lesson for leadership. Till about five years ago, our leaders communicated their thoughts to the outside world through media and journalists—but not anymore. They now communicate through social media. There are 600,000 journalists in the world today, and 3.2 to 38 million influencers in the world. They trust influencers. Today’s leaders do not need journalists. They have their own vehicle.

Elon Musk is communicating his strategy for Twitter through tweets. The Wall Street Journal and economists are reading all his tweets, figuring out what he wants to say and do. Media has become more of a reflective commentary. All breaking news is on social media. That’s the first big and dramatic change for leaders. 

A birth and a death

In society, we see visible changes everywhere—with every new thing that arises, something else dies. Journalists are dying because of influencers. The mobile phone brought the death of the disposable camera. The leadership has to recognise that they have to kill or give away some of the skills they had in the past. Thirty years ago, dictation was a big skill for leaders; a leader dictated notes to the secretary. Today, nobody does that. Short-hand was a big skill for leaders’ assistants. Now short-hand is there but there are no assistants. Selfies are the death of autographs. I was in Australia for the T20 World Cup semi-finals and finals. Everywhere I went, nobody was taking an autograph. On the boundary line, people called the player and took selfies. That’s the new norm. OTT is the death of sleep, thanks to binge watching. We only thought of binge drinking and binge eating. People stack up for the weekend four or five web-series and watch them non-stop. Till you recognise that something of the past is dead, you will not change as a leader. 

Top 10 most valuable companies

Look at the most valuable Top 10 companies of 2012 and the most valuable Top 10 companies of 2022. How things have changed in 10 years! In 2012, Apple was the most valuable company in the world at $559 billion followed by Exxon at $409 billion, Petro China at $278 billion and Microsoft at $270 billion. In 10 years’ time, only three out of those ten companies are on the list. In 2022, Apple continues to be number one at $2.4 trillion. Its market value multiplied four times. Saudi Aramco is now at No 2 at $1.9 trillion followed by Microsoft at $1.8 trillion, Google $1.3 trillion and Amazon $1 trillion. Exxon Mobil is still on the list and its value has increased from $409 to $470 billion. Tech companies now dominate the list.

Top 10 most valuable brands

Let’s look at the most valuable Top 10 Brands of 2012 and 2022. Only six brands have lasted from year 2012 to 2022. In 2012, Coca-Cola was the number one brand with a brand value of $78 billion, followed by Apple, IBM, Google, Microsoft, GE, McDonalds, Intel, Samsung and Toyota. 

In 2022, Apple is the number one brand at $482 billion. Its market value has gone up by about six times. No 2 is Microsoft. Its value is $278 billion, up by about five times. No 3 is Amazon. It wasn’t on the list in 2012. No 4 is Google, up 3.5 times from $70 to $251. Samsung has gone up 2.5 times, from $33 to $87. Toyota has gone up from $30 to $59. Coca-Cola is still on the list but its market value has gone down from $78 to $57. Coke used to be the number one brand for 10 to 15 years. It has gone down because people now want to be healthy. Six of the Top 10 brands of 2022 are Tech brands. So whether it’s the most valuable company list or the most valuable brands list, it is technology which dominates and not traditional manufacturing industries.

Companies—then & now

What types of companies we had about sixty years ago? We had the military, government companies, private companies and family companies. Today, we have multinationals, family companies, private equities and venture capitalists (PEs/VCs), NGOs, Government companies, SPAC and startups. The leadership, which was confined to the military, government, family and private is now a much broader spread. Startup leadership is as much celebrated as MNC or private enterprise leadership. There are more avenues for leadership to grow and the dimensions of leadership in each of these areas are very different.

So, what are the changing leadership expectations and how does one look at it? Leadership development is a four billion dollar business. However, 50 to 60 percent of leaders don’t meet the targets in the first 18 months despite the industry doing well. The average tenure of a CEO is five years, and in India, it is four years. Gone are the days when you had a CEO with 15 years’ tenure. Recently, the government has announced that the tenure of the head of public sector banks has to be minimum 10 years. But overall, the CEO’s tenure is shrinking. It’s about maximising in the short term—trying to do everything right in 3 or 4 years’ time and getting out before anything goes wrong. 

Everybody talks about the VUCA world—volatile, uncertain, complex and ambiguous. My definition for VUCA for leadership is Versatility, Uncomfortable (Being uncomfortable in comfortable times), Collaboration and Agility.

The 10 changing leadership needs

#1: Leaders must lead and change, not react. In the past, you had reaction time. Today, it’s not there. They must be prescient to say what will happen in the future. They have to guess and put into play some mechanism, so they can win.

#2: A leader has to be a ‘knowledge sponge.’ A sponge keeps absorbing water. The amount of information out there is dramatic. You have to keep soaking in information. In the past, just knowing the industry information was good enough. Today, you need to know more than that because competition can come from anywhere. The competitor to a bank may not be another bank. It may be UPI. We now do banking through netbanking, ATMs or mobile banking. Today’s competitor will not be a competitor tomorrow. The whole motor industry was looking at each other—Volkswagen looking at Toyota, Toyota at General Motors and General Motors at Ford. But who came along and disrupted? Tesla. 

Look at the two wheeler market. Where are the EVs coming from? They are not coming from the current players but completely new guys like Ola and all kinds of new people. Once you gather the knowledge, you need to put out the insights for your people in the industry.

#3: Develop people, though you have a short-term. It is the qualitative thing. Develop them through meetings, coaching, the way you conduct yourself and the questions you ask than the answers, you provide. The best leaders ask a lot of questions. The ability to develop people is a very big expectation today. All young people who join an organization want to work for a boss for two years and learn as much as the boss knew from 20 years.

#4: Build relationships. The days of independent growth are over. You are dependent on somebody else. So, build relationships—with government, society, competitors, media and industry people—with everybody in the ecosystem. The industrial era was based on getting licenses. Once you got your license, you could build a relationship with anybody. That’s not true now. Today, you have to build relationships with everybody in your ecosystem.

#5: Be accountable. If anything goes wrong in your company, you have to stand up and say, ‘I am accountable.’ Look at all the layoffs happening in India. Every CEO says ‘I’m accountable,’ and ‘I’m sorry.’ But people ask, “What did you do about it? The leader must ask, “Why did I expand when I didn’t need to?”

#6: The leader must have high self-awareness. Unfortunately, when you are a leader, nobody tells you the truth. It’s only through multi-source feedback; by talking to 20 or 30 people; and by talking to competition, you can know the truth.

#7: Leaders must inspire. It may be through personal work, habits and behaviour. Inspiration does not come from lofty speeches. It must come from lofty ideals and walking the talk.

#8: Communicate using different platforms. Today’s leaders must remain on email, Twitter, LinkedIn—as many modes of communication as possible. They have to be 24 by 7 with the team. Whether people listen or not it is a different matter but that’s what they expect from their leaders. When you have a web call, half the guys don’t switch on their cameras. You hope that somebody is listening to you.

#9: There’s no place for complacency. You have to be accountable. You cannot postpone even for a minute something which you can do right now.

Most of these are soft skills. Leadership is no longer about hard skills, which are a given now. It is expected that leaders must know about strategy, Porter’s 5 Forces Model, etc. The hard part is the soft aspects of leadership, where most leaders get challenged and fail.

#10: Be REAL.

For leaders to be successful, they need to be REAL, which is my acronym for Relevance, Excellence, Authentic and Luck. Leaders have to be relevant. Remember the birth of something new is the death of something old. Social media is here to stay and leaders have to be on social media and relevant for today’s context. They have to excellent and cannot be substandard. Authentic does not mean being nice to people. It means being consistent and true to who you are. Being authentic means sticking to a few values and communicating them consistently all the time. You can only do that, if you put in the best work. You need a lot of luck to be a leader today. As the world shortens, you must have luck by your side. You might do all the right things and still fail. So you need that L called Luck.

Q&A

How can we handle success and failure?

The biggest problem for leaders today is success traps. They have been successful in the past with a particular formula and try to repeat it. The only industry it might work is in government controlled organisations. It may not work in a world which is disruptive. So watch out for success traps.

In organizations, it is tough to retain leaders beyond five years. So, don’t we need collaborative leadership?

Collaboration is just not for the rank-and-file. It must be across the line. There is no substitute to collaboration. You need to collaborate with people outside the organization. For example, I have good friends in many of my competitor firms. As an industry body, you have some common items to deal with like GST, etc. You must collaborate on a few things as leaders. You have to compete in the consumer’s mind. Between competitors, you don’t need to punch each other.

People say that luck favours those who help themselves. What do you say on that?

I agree to it. For leaders who consistently follow the process and prepare themselves for the future, luck comes knocking on their door. You need to be prepared for luck to favour you.

What kind of challenges will the leaders face now?

The biggest challenge for leaders will be the ‘time capsule’ condensation. More and more have to be done in lesser and lesser time. When I started my career as a CEO, I could take a week or two to gather all the information, assimilate it and come back with an answer. Today, the team comes to you, briefs on what is happening and needs an answer in the evening. Second, the amount of things you need to cram in your head which is 10 times more than what it was ten years ago. Third, you need to communicate very well. If you cannot communicate today as a leader, people write you off. It is sad but true. You must be a very good speaker and communicator. For example, Obama is a great speaker. When Obama’s speech writer went to the UK, a UK leader asked him to give suggestions on how to speak like Obama. You cannot be another Obama. You have to be articulate. You must be able to synthesize everything in your head and put it down in a simple manner for people to understand. Staying relevant is another big challenge.

How can one handle pressure as a MBA graduate or an upcoming entrepreneur?

Everything in life will have pressure, whether you’re doing MBA, BE or B.Tech or running a hundred core company or sourcing capital or technology. Sometimes it is self-induced and sometimes it’s not. If we are pessimists, we invite pressure ourselves. Some are optimists and don’t take pressure when they should actually be taking some pressure. Both ends of the spectrum are wrong. To handle pressure, first you must be healthy—by exercising, eating right and having right habits. When you are a leader, you must have energy and focus.

What are the personal habits that we have to change as leaders to have work-life balance?

Work-life integration is a deeply personal thing. It is entirely up to you. How you use the 24 hours a day is in your hand. If you spend 18 hours at work, then you have to recognize that the six hours you spend in the family is short. Sometimes you need to give your family more time; sometimes you need to give your work more time because both family and work will throw crises and challenges. No boss or company can give you work-life integration. It’s yours. If you don’t like the company and your boss, it’s better to leave it. That’s all.

Why do we see the great resignation today? In the pandemic, a lot of people sat at home and started introspecting, “What am I doing with my life?” There’s mass resignation and demand for work from home. As long as the individual is talented, he or she is the king. Talent is at a premium today. Going back to the REAL acronym, you need to be relevant and be the best in your job. Then if one door shuts, three days will open for you. Remember, the company is no longer accountable to you for anything. You are accountable to yourself and your family for everything that happens. It’s all on your plate. 

What is the strategy that Apple followed to stay on top?

Apple was very strong in desktop. Then they came with iPhone and iOS and built a beautiful world around it with all the apps. Over the last 20 years, they have been consistently innovative and looked at the product and service as an extension and not just as the product. That’s the biggest thing they have done right. They focused on design and user interface. The products are simple.

With things like moonlighting, frequent job-hopping and demand for WFH, what is expected of leaders?

I tell my teams, “Look, this is the company policy. I cannot change it.” As an example, if the policy says there’s no work from home, I have to stick to it. I always tell them, “Do what is right for the institution or the company. Then, you’ll always win. If you put yourself out of the institution, it’s unlikely that you’ll win in the long term.” I also tell them to work well with other people. Unfortunately, due to shortening life cycles, there’s a lot of jealousy and pettiness at work today. I tell all the teams, ‘Don’t indulge in that.”

You are the President of Mobile Marketing Association. Can you share the current status of 5G rollout and why there is a delay in it?

5G is here to stay. The 5G licenses have happened. One of the companies has committed 13 to 15 billion dollars of investment on 5G and the second company has committed four to five billion dollars. The latency and speed with 5G will be amazing. You can download a three-hour movie in under a minute. Metaverse will happen and everybody will go around with glasses and see the world in 3D. 5G’s impact will be dramatic. We went to one of the labs of Microsoft and could see a doctor in Bangalore operating on a patient and on his shoulder was sitting a doctor in Mysore on Metaverse, guiding him on the surgery. Assisted learning and assisted guidance will be one of the biggest things in metaverse. All of shopping which we do in two dimensional now will happen in 3D. You can wear the glasses, pick an apple in a store, check it and buy, all these sitting in your home. 5G’s impact will be phenomenal. Right now, I think, 70 countries in the world have 5G. To roll it out, it takes times as you need to build equipment and a whole ecosystem behind it. It doesn’t happen overnight. 

You spoke about lot of jealousy in workplace. Not much training seems to happen now in Organisational Behaviour. Should corporates focus on this area?

Now, on-the-job-training has died. Companies don’t want to invest in employees as they leave in two or three years. Second, bosses are very insecure and they fear their subordinates will overtake them. There are a number of reasons why this happens but as leaders, we have lost the ability to train people on the job. Each of us, as leaders, must do that.

Has spirituality got anything to do with success?

Yes. IKIGAI, the Japanese term is about purpose. One of the things is about spirituality. Many people say that spiritualism is the route to rid oneself of pressure. There are many different thought processes, but I think ultimately, it’s down to the individual. You must be comfortable at what you’re doing. There are some people who are hyper and successful, who don’t take pressure. There are people who are very calm and serene but don’t deliver. There is no one formula for any one individual, but I see the growth of yoga, ayurveda, organic and naturals. I can see that people are trying to reach out and touch the roots from where they came. So spiritualism is a big movement. Whether it is the answer, I don’t know. But definitely, it’s on the rise. 

What is your advice on the habit of reading?

It depends on your learning style. Some people read books and learn. Some people learn by working in project groups. Some try experiments, fail or succeed and learn. You have to figure out what’s the best learning style that you are comfortable with. Then stay with it. For me, it is learning from a book reading. I read many articles, look at the information and see if a trend exists. That has worked for me all my life and that’s why I tend to read a lot.

Sustainability Week Celebrations

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Bharathidasan Institute of Management (BIM)’s Centre for Sustainable Development identifies and amplifies the best practices of sustainable living at the grassroots. MMA collaborated with BIM to organize ‘Sustainability Week’ celebrations at MMA Management Center recently.


Mr Anshul Mishra, IAS

Member Secretary, CMDA

When we talk about sustainability, it means that we consume something to the extent that it is enough for us and it should be left for the future generations too. How do we achieve sustainability in our lives and more so, in urban settings? Urban areas are the ones where we see a lot of consumption happening, which leads to unsustainability. It is not restricted to consumption of goods and food but everything including concrete. The human behaviour is such that it is very difficult to understand the implications of such consumption. Most of the time, we adjust our consumption based on our income. That is where the indifference curve of choice comes into play. Three years ago, I bought an iPhone 8 when iPhone 10 was already there in the market. After that, I was tempted to buy a new IPhone but somehow resisted that. Now recently, I bought an iPhone 14. You can look at this issue from many angles. IPhone 14 may have better features like higher data storage and faster functionalities which are required for me at this stage. So I migrated to that. But we need to consider if we really need to upgrade and the amount of energy which goes into making iPhone 14 or any other products.

Wish we had 2.5 Earths!

I finished my Masters one year ago from a US University. They gave us an exercise to do on green cities. There was software and we had to enter our consumption pattern like the mode of transportation, if we have a car, what we consume, what are our habits, etc. The combined result suggested that if we consume the way we consume, then we need 2.5 Earths to live 60 or 70 years of life. So the consumption pattern and the way we consume goods and services define how sustainable the planet is going to be and how sustainable our lives are going to be. There could be many initiatives at the local level. We heard about how Auroville area is developed and how it functions in a more sustainable manner. But local initiatives alone are not enough because the way urbanization is happening and the rate at which urban areas are growing is incredible. We cannot stop it. We cannot ask people not to come to urban areas which are our growth centers. They give people opportunities for better quality of life, more employment and more income. That’s what human beings want. To tackle this problem, we need to understand the concept of sustainable urbanism.

Urban areas have more concrete, more buildings, but they drive economic growth—that translates into increased personal income and more economic activities. Urban areas support millions of people all over the world. Whether it is good or bad can be a different debate, but it is there and we need to manage it. Making urban growth more sustainable is the challenge and it has many aspects; it just not just about the environment or ecology. Sustainability is also related to social, economic, ecological and health related issues of urban life. We are worried about environment and ecology. We talk about energy efficiency, reducing energy consumption, making more energy efficient buildings, energy efficient transport systems and all that. We are moving towards battery-operated vehicles, solar energy, wind energy and many other sustainable renewable source of energy.

Promote Mixed Income Housing

But in the urban scenario, we must understand the social aspect of sustainable urbanism. We have urban poor and the government tries to provide housing for urban poor. Most of these projects of urban housing are not equitable in many senses. They find a land to construct houses for the urban poor. When the slum dwellers are shifted to that place, two things happen. One, the environment, which was present in the slum area, just gets transferred to another concrete slum. There is no change in the quality of life. The other thing is that the people who were living in the slums, were living very near to their workplaces. They are suddenly shifted 15 to 20 kilometres away. So they lose their livelihood. To address this problem, we must tweak the rules and regulations in such a way that we promote mixed income housing. So far, mixed income housing is not at all discussed in various platforms in India and most of the developing countries as well. But developed countries, including the Western countries have policies to promote it. What we have to do is to incentivise the developer or the builder to promote and construct smaller houses in all the areas and not only limit them to far away areas. If we develop smaller houses everywhere, many poor people or those who are above the poverty line would be able to access them. One may argue that it is costly and people may not buy it. In that case, the government should preserve land near the core areas of the city to provide housing for the poor at a cheaper cost. This is how we can deal with social aspect of urban sustainability.

Going for Densification

When we allow our urban sprawl to spread all over the city and along the peripheries, the cost of transportation increases as cheaper houses are available only in the outskirts. Most people who work inside the city have to travel that much distance; every day, they have to invest time and money to reach their workplace. This is a big challenge and the economic aspect of sustainability gets hit. Again, we have to work on the rules regulation. CMDA has come up with a proposal of densification within the core areas, along the growth corridors and along the metro line. This is an important new concept in India, but other countries have already adopted it. By this, we ensure that there is connectivity between where people live and where they work. There is easy access to transport systems. We can reduce dependency on car. The economic aspect has thus an inbuilt aspect of environmental sustainability. Dependence on cars leads to more congestion on the roads, more pollution and more consumption of fossil fuel. So for sustainable urbanism, we need to address these problems in an urban setting.

Two New Mega Bus Terminals

CMDA has taken up this issue in a big way and announced two new major bus terminals in Chennai’s outskirts—at Kilambakkam and Kuthambakkam—where we will go for net zero building. Large spaces will be available in the bus stand. They will have solar panels to ensure that whatever energy is required in the bus stand will be met by the energy produced by the solar panels. Another aspect of urbanism related to social life is about the accessibility of public facilities like park. It should be accessible to every section of the society—children, women and people of old age. It must be safe for women. Of course, the challenge is huge. Pollution is another major issue. Chennai is still better because of the nice breeze that we get in the evening, but in Delhi and many northern cities, it is really bad, so much so that the courts have come down heavily on pollution. Overall, we see untimely and unseasonal rains and extreme weather conditions, like the 2015 Chennai floods. Everybody blames the government. But importantly, we need to address climate change.

Shoreline Management

We are also working on integrated shoreline management. CMDA has announced that it will take up the entire 50 km stretch of shore line in Chennai—from the Ennore creek to the Kovalam beach—and develop an integrated plan to renourish and revitalize the entire coastal line, ensure that it is conserved and protected properly ecologically and at the same time, there is accessibility for the public. We are going to form a Special Purpose Vehicle (SPV) for this. We want to ensure that there is always connect between the people and nature.

Dr Asit K Barma, Director, BIM delivered the introductory remarks. He spoke about the Tamil Nadu Chief Minister’s Fellowship Program (TNCMFP) and the state’s tie-up with BIM as its academic partner. “Usually, the government ties up only with the top-notch IIMs. We are privileged that this opportunity has come to BIM this time and for which we thank the TN government. I am also happy to share that the TN government is completely committed to this Fellowship program,” he said. He also explained the very tough selection process followed in selecting 30 participants from over 80,000 prospective applicants.


Mr N Bala Baskar, IAS (Retd), Member, Board of Governors, BIM gave a presentation on Auroville’s experience and challenges in ushering sustainable development.

Auroville was designed as a city for 50,000 people, in a circle with a 5 kilometre diameter. The inner circle represents the city and the outer circle is fully dedicated to the green belt. The word ‘sustainable’ was not fashionable when the project was launched. Auroville is a complex vision that came from the vision of spiritual guru Sri Aurobindo. He was a poet and dreamer. But the doer of that vision was The Mother, who was Sri Aurobindo’s spiritual partner. She organised the Aurobindo Ashram and is the one who gave shape to Auroville. It was started in the 1960s with the objective that people should come there to evolve to the next stage of consciousness. On 20 Feb 1968, Auroville was inaugurated. The soil from 27 states was brought to the site, was mixed together and placed in an urn there, to symbolise human unity and to realise the core dream of Sri Aurobindo. It was an UNESCO supported project. It still supports the Auroville experiment. From a barren land in 1960s, it has now transformed to a lush green forest with over 2 million trees. This is a great model for sustainable development. A lot of indigenous trees are there. A banyan tree near the Matri Mandir is the geographical centre of the Auroville township. Roger Anger is the French architect who designed Auroville, based on a simple sketch given by The Mother. Agni Jata is a house built in raw clay. Normally, raw brick is burnt and then used to construct the house. But here, the house was built with raw clay and the whole house was burnt up. It still stands there.  There are also avant garde houses. There is a Bharat Nivas which is part of the International Zone. There is also a Tibetan Pavilion here, which is a sustainable building. The human space is where the ‘houses for living’ is modelled. It is almost a replicate of the Greek City model where the space is self-contained and everybody could meet each other. These are units of 5000 people, completely self-contained. Auroville runs a lot of businesses to sustain its own economy. There is an organic dying unit. They follow their own education system. There is a kindergarten, transition school and law school. There is no passing examination or certification in any of these. There is a Centre for Scientific Research. Auroville generates solar energy to cater to a canteen that cooks food for 700 people. It was installed in 1977. At that time, it was Asia’s largest parabolic solar concentrator. Auroville’s Consulting division provides a lot of guidance to those who want to launch sustainable development projects / initiatives. There is a Sadhana forest that has become yet another lush green forest and is maintained by an Israeli national. There is a lot of demand from people to come and live in this forest. There is also another forest on the outskirts called ‘Aranya forests’ developed by a boy and has a lot of bio-diversity. He has trained a lot of children to become friendly with the environment. 

Mr Vishesh Gupta, Chairperson, Bharat Soka Gakkai (BSG) spoke on the theme, ‘Sustainable Human Behaviour.’

BSG engages in the fields of peace, culture and education, with a special focus on sustainability. It has a membership of 300,000 across India. Most of them are voluntary members. Many of them are SDG professional experts, working for UN organisations like UNDP, TERI, etc. It has a task force of 12 people to find out how BSG can contribute to the achievement of SDGs by 2030. Here, the role of the government is very important. The corporates also must support the government. It has launched an App to support the Sustainable Development Goals of the United Nations. This app is called ‘BSG for SDG’. The app is a one-stop-platform for all things related to SDGs. The app serves as a platform to help adopt ‘Sustainable Human Behaviour’ as a way of life – an essential requirement to achieve the SDGs. BSG’s 3-step formula  to achieve SDGs is:

  • Learn about SDGs and share the learning with others
  • Reflect on what should be done
  • Empowerment and taking lead-Take action.

BSG organised an exhibition called, ‘Seeds of Hope in Action,’ to spread awareness about SDGs and make SDGs into reality, across many educational institutes across the country. It also created SDG clubs in these institutes to sensitise students towards the cause of sustainability.