Wednesday, March 23, 2016

Cleaning up a 'Dirty' Economy

“In a few decades, the relationship between the environment, resources and conflict may seem almost as obvious as the connection we see today between human rights, democracy and peace”  
~ Wangari Maathai , Winner of the Nobel Peace Prize 
It was with some dismay that I began to notice the growing amount of filth everywhere. Around the years 2001-2 the economy had begun to pick-up speed again and in a couple of years I had almost begun to hope for a slow down. Maybe I thought, we should slow down, rethink our path to economic progress.  It seemed like we were paying a very high price for economic growth. Something of great beauty and value was being lost in all the hurried pursuit for prosperity.
With every passing year things would only get worse. Every where you went the heap of rubbish got bigger. Plastic bottles, wrappers, carry bags and broken plastic stuff had made it everywhere - into the country side, along highways and railway tracks, in farms, on hills, in forests, in rivers, lakes and ponds. Anywhere you went, it was impossible not to encounter thrash. It was only higher up in the mountains or deep into the forest that you could escape it. 
While homes, offices, hotels and malls became swankier, public places grew more chaotic and dirtier. Filth was not the only thing that grew with the economy but also the chaos on the roads, at the airports & train stations. I mostly chose to stay at home. Whenever I did go out, it was depressing to see the filth ruin the most beautiful of places.
“Wouldn't we all benefit from living in societies that were more careful, more resourceful, more respectful and more forward-thinking?”  
~ Jane Davidson, University of Wales Trinity Saint David
I wrote a blog a few years ago on the conflict between environment and human aspiration, how both were necessary for our survival & living. And that the solution to the conflict may lie in technology (in its refinement and sensible application). Also as I looked around at the struggles of well meaning people to do their bit for environmental conversation, I realised how the the onslaught of mindless action of many was negating the little progress that few could muster to counter the environmental degradation. The offenders always outnumbered and out did the defenders. I came to believe that Government intervention was the most powerful instrument to reverse this. That it was the most effective instrument we had to drive the behaviour of the people and businesses towards a more sustainable patterns of activities and consumptions. That it could be the prime driver for refinement and application of technology. That what it does and does not do can have big impacts on the environment.
So it was great pleasure that I began observing an interesting pattern emerging on the intent of this government on the sustainability and environmental damage mitigation front. To see the government leading the change is most welcoming.
“Some people are of the opinion that environmental protection and development are against each other. But the truth is that they can both be achieved at once.”  
~ Prime Minister Narendra Modi
India has a huge population and the littlest of things they do gets aggregated to big impacts. The current problems have stemmed from infrastructure inadequacy, a loose policy framework that encouraged expedient behaviour, lack of systemic view in finding solutions to economic and social problems and public apathy. 
So the Modi Government is clearly heading in the right direction. It seems to be using a combination of several instruments to drive this change - Expanding Public Infrastructure, Systemic Changes, Public Programs, Policies, Direct Action, Encouragement for Voluntary Action and above all Pursuit of Technology Solutions, to create a more eco-friendly economy.
As a result of some direct and purposeful action to reverse environmental damage, and may be some as consequence (intended or otherwise) of its drive to make the lives of its citizens better, the government is ensuring that the future carbon foot print for India will be substantially contained.
While a lot of local action is needed to conserve the local environments, the measures taken by this government is likely to have an overarching positive impact on the environment. Let’s take a brief look at what it is working on. 
Woefully inadequacy of public infrastructure and an inefficient public systems have resulted in generating huge waste so far. The government in trying to change this primarily with a combination of Clean Energy, Expansion of Energy Efficient Public Transportation Infrastructure and Digital Infrastructure that let’s people do more from wherever they are, cutting down the need for travel and transportation.
E.g. about 7 Billion People travel by Indian Railways every year (or about the size of the population of Australia, everyday!). And yet, there is ample room to move even more people to this more energy efficient (and cleaner) transportation system.  - by growing the rail network to connect more cities and towns, improving connectivity, increasing capacity, de-bottlenecking of high traffic routes, expanding suburban rail network, building Metros in cities etc. 
A target driven program for clean energy would likewise have a positive impact in cleaning up the air.
But of these three things, the creation of the digital infrastructure (physical infrastructure and services) under the #DigitalIndia program is likely to have the biggest impact in reducing waste, arresting and reversing the environmental damage, as it helps in reducing travel & need for physical infrastructure and accelerates the sharing economy.
The table below summarises some of these initiatives

India has approximately 17.5% of the people and 20% of the Cattle population with just 2.5% of the land mass and 4% of share of fresh water resources. That makes these resources very precious requiring their efficient, effective & sustainable use & management.
From farms to the cities this government is devising some commendable programs to improve the quality of life for its citizens through better management of the environmental resources of Land, Water and Air. The Smart Cities program e.g. has a conditional transfer of central government funds to the local city governments with emphasis on minimising the environmental impact through recycling waste and water, generation of energy from waste, efficient use of space, multiple use infrasture etc. to reduce the environmental impact of urban centres.
See the quick summary below on some of the programs that could have a positive environmental impact

“When we realize we can make a buck cleaning up the environment, it will be done!”  
~ Dennis Weaver
Driving public behaviour towards sustainability through taxes, incentives and regulations can be an area that can bring about deeper changes through nudging the private enterprise to explore technologies, methods and products that minimise and reverse environmental impact. It is also an instrument that can drive consumer behaviour. Though the government is actively pursuing change through this means, it is under exploited. Hopefully there would be further momentum in this direction as the government gets more room for action in this arena, with improvements in its finances and the economy.
The table below shows some of the recent policy initiatives of the government 

“Human history becomes more and more a race between education and catastrophe.”   
~ HG Wells
Lastly, the Prime Minister, has been making earnest effort to send out the message of our responsibility towards the environment, backed by social messages on the national Radio & TV, but what can make things even better is a combination of structured education program, setting up of new standards and replicating innovative initiatives at every level of the government (and by businesses and self-help/voluntary groups). It would help drive the change deeper.  More importantly, if India hopes to provide leadership to the world in the 21s century, it must lead in environmentally friendly practices.
The Prime Minister appeal to people to take responsibility and volunteer for programs such as #SwachhBharat (CleanIndia), has been finding enthusiastic support especially from the young, it would help a great deal if these private initiatives find encouragement and supported at every level of the government.
Here is a table of some ideas the government could take up to accelerate the creation of a clean economy

In summary it is welcoming to see the government lead the change. It should gladden the hearts of all those individuals and groups that have so far been fighting lone battles in their quarters, this time the government seems to be fighting the battle with them.
Look forward to your comments and ideas.

Wednesday, March 2, 2016

The Making of a New Business Eco-System

A bad system will beat a good person every time.  ~ W. Edwards Deming

Complexity, Opacity, Lack of Access is a barrier to the start-ups and small businesses, favouring the established and mostly the larger enterprises.

That’s how things have been for all this while. 

It is what the much celebrated ‘liberalisation’ of 1991 failed to achieve -  The democratisation of the business landscape. The complexities & limitations in the business environment continued to ensure that the established businesses got the bulk of the benefits. 

The big businesses continued to be seen as the engine of growth. With government policies and actions seen in the light of the impact it had on them 

The Modi government seems to be building out a new business eco-system. It is going bottom up. That’s why Budget 2016 must be read differently. 

Budget 2016 is another step in the direction of upending the established business eco-system in India. Will this be the beginning of the end of crony capitalism? I sincerely hope so. And I have good reasons to believe so. 

The little guys have been at a disadvantage as a result of lack of access to resources, poor infrastructure support, and a complex regime for doing business in India.

The established enterprise with their battery of lawyers and armies of accountants and clerks could navigate and maybe even thrive in a complex environment for doing business. Big businesses had enough resource to compensate (even build their own) infrastructure. Available resources were quickly hogged by those with the means (and ways) to access them. 

The little guy so far had been left to his wit and grit to pursue his enterprise.

To make it easy to understand, let’s look at the how this new business eco-system is  being built, from three different perspectives - Access to Resources, Support Infrastructure and Simplification of the Business Environment.

Access to Resources

Mudra Loans, Stand-up India Assistance, Start-up India Fund, New Bank Licences, Railways Start-up Fund etc. have the potential to giving access to resources to hundreds of thousands of entrepreneurs and small businesses...
Of course one can argue that not all these investment will end-up producing value or result in a sustainable enterprise but the seeding is wide enough and large enough to increase the probability of a substantial number of them making it through. 

Supporting Infrastructure 

While large and established organisations can create their own support infrastructure or build systems to compensate for it’s lack, it is severely limiting and detrimental to the growth of small businesses...therefore, ensuring availability and access to Power, expansion of the Railway Infrastructure, Reviving Small Airports, Rural Roads & Electrification, Improving Connectivity (WiFi at Railway Stations etc.), Expanding Skilled Manpower Availability (SkillIndia), Low Cost Life, Health and Accident Insurance,  Digital India (E-filings, E-Tendering, M-Banking, M-Governance etc.), EPF contribution by the government, National Scheduled Caste and Scheduled Tribe Business Hub, Tax Breaks for Start-ups, Lower Taxes for newer and Smaller Businesses (first)…are initiatives that will have the biggest positive impact for the small businesses & entrepreneurs. 

Simplification of the Business Environment

Ease of doing business matters more to the start-ups and small enterprises with limited resources...The New Bankruptcy Code, E-Filing of returns, a new Tax Dispute Settlement Mechanism, Transparency and Speed brought about by use of Digital Technologies in the tax compliance, Guarantee of Quick Tax Refunds, Simplification of Tax Compliance for small businesses, Freer Access to AgriMarkets, Opening up of the bidding for government business to smaller enterprises, Measuring the performance of the Centre and States for Ease of Doing Business across nearly 300 parameters...are all adding up to make for a less daunting regime for doing business in India.

Pardon my excessive enthusiasm but I see all this as addressing the maladies I have faced in my experience as an entrepreneur.  Things that increase the cost of doing business and odds of success. 

Taken together, it seems like, the Modi government’s effort towards building out a new business eco-system. Something that has the potential to completely alter the politics and economics of this country. It’s a deep democratisation of the business landscape, with potential for a deep impact on people’s psyche.  Stand-up India seems like the most appropriate slogan for it - people standing up for themselves and standing-up to change things around them, versus hankering for whatever dole they can bargain for. It’s a shift from dependence to taking responsibility. And it’s only fair that those who choose to stand-up for themselves and others, those who mean to contribute to wealth creation, get better (maybe preferential) treatment.

These initiative are pushing me towards unmitigated hope. Of course more needs to be done. Yes, implementation is important.  But that’s on going work.

Maybe I am imagining it all up.  But it is a vision worth pursuing for the government. It is a one that has the potential to do a lot of good all around. Also, hopefully Narendra Modi and his team will get enough time to realise the full extent of this vision.

So what do you think?

I would also love to hear from you of initiatives that I may have not listed here that add to this impact.