Sheila Dikshit

What Micromax is to Nokia, Kejriwal’s AAP is to Dikshit

Arvind-Kejriwal3Vivek Kaul 

It is never really a great idea to compare a political party to a management concept, given that politics is more messier than business ever can be. But that is what I had done, over a year back, when a section of what had come to be known as Team Anna, decided to form a political party.
I had compared the Aam Aadmi Party (as it subsequently came to be known) to a disruptive innovation (You can read the article here).
Disruptive innovation is a term coined by Harvard Business School professor Clayton Christensen. “These are innovations that transform an existing market or create a new one by introducing simplicity, convenience, accessibility and affordability. It is initially formed in a narrow foothold market that appears unattractive or inconsequential to industry incumbents,” is how Christensen defines disruptive innovations as.
The business landscape is littered with examples of hundreds of disruptive innovations. It typically involves a small entrepreneur coming up with a product which big business of the day is not interested in. A good recent example is that of Indian mobile phone brands like Micromax and Karbonn, which took on Nokia, which was the biggest mobile phone brand in India until a few years.
The Indian brands concentrated on selling low priced smart phones, mostly sourced from China, something that Nokia was not interested in. This allowed the Indian brands to gradually capture a major section of the market. By the time, Nokia woke up, these small Indian businesses had already become big boys. Micromax recently signed Hollywood star Hugh Jackman as its brand ambassador. (To its credit Samsung did not fall into the Nokia trap and is now the leading mobile phone brand in India)
Another great example of a disruptive innovation, which I have often used and which fits the situation beautifully in this case, is that of home grown detergent Nirma. 
Karsanbhai Patel introduced Nirma detergent in 1969 and priced it at Rs 3.50 per kg. Those were the days when soaps were more popular than detergents when it came to washing clothes. A major reason for this was the fact that detergents were expensive. Hindustan Lever’s Surf (now Hindustan Unilever) sold at Rs 15 per kg. And the lowest price detergent was sold at Rs 13.50 per kg. 
Given this huge disparity in price, Nirma sold well and continued to grow. Hindustan Lever kept looking the other way for a very long time simply because it was not interested in servicing the end of the market where the margins were low. By the time Hindustan Lever reacted, Nirma had established itself as a pan India brand. 
Hence, there are two ends to a disruptive innovation really. One is the new business which launches something which caters to a specific section of the market. The other is the established big business which is not really interested in that section of the market. This allows the new business to grow itself. By the time big business starts to see the smaller business as a threat, it has already grown big enough. The disruptive innovation thus challenges the status quo product. 
Along similar lines, Arvind Kejriwal and the Aam Aadmi Party are the disruptive innovation, and the existing political parties the status quo product. To their credit Arvind Kejriwal and his supporters understood that urban voters wanted a change and tailored their campaign in line with that. They understood that there was an opportunity for a political party which fields honest candidates and does not work along narrow caste or regional lines.
This basic idea seems to have worked. A pre-poll survey carried out by CNN-IBN, The Week and CSDS Pre-Poll has projected that the Aam Aadmi Party will get anywhere between 19-25 seats in the upcoming Delhi assembly elections. It gives the Bhartiya Janata Party anywhere between 22 to 28 seats and the Congress party 19 to 25 seats in a 70 member Delhi assembly. 
If AAP were to get even one third or half of the projected seats, it would be unprecedented. No political party established from scratch has ever done so well. 
So what has worked for the Aam Aadmi Party? There promise of providing a clean corruption free administration has gone down well with the Delhi voters. Cynics might turn around and tell you, what is the big deal about that? Every political party worth its salt promises a corruption free administration. 
While that is true, a promise of a corruption free administration coming from politicians who are already corrupt, does not mean anything for the voter. When the same promise comes from someone like Arvind Kejriwal, an IITian who worked for the Indian Revenue Service, and then quit to run an NGO, it holds some value. It tells the voter that there is still some hope left in the world. Hence, more than the message, who is saying it, turns out to be more important.
The other factor that worked well for Aam Aadmi Party is the fact that the big boys Congress and Bhartiya Janata Party were looking the other way, like often happens in the case of a disruptive innovation. 
The big boys never really took the Aam Aadmi Party seriously. The feeling was that where would this new kid on the block raise the money required to fight an election? How would the new party put the organisation required to fight an election in place? 
The Aam Aadmi Party turned the conventional wisdom right on its head when it came to raising money. It has been raising money directly from the people. As far as setting up the party organisation is concerned it has done a remarkably good job in a very short period of time. 
The party has also innovated when it comes to reaching out to people. It has been organising small mohalla sabhas attended by a few hundred people at a time, all across Delhi. The existing political parties, used to big rallies, have not seen this as a threat. This has helped the party consolidate its position all across Delhi. 
The Aam Aadmi Party has also been innovative when it comes to advertising, using auto-rickshaws as well as humans standing with banners at key junctions in Delhi.
Also, the existing political parties were confident that it would be next to impossible to reach the voter in such a short period of time. In this case the Aam Aadmi Party has been helped by the media, for which Kejriwal and his party have been a new and an exciting story, full of hope. And hope always sells well among readers. What has also worked is the fact that Kejriwal has been extremely media savvy, always willing to give an interview.
All this has clearly rattled the Bhartiya Janata Party and the Congress. In a recent interview to the Tehelka magazine, chief minister Sheila Dikshit
of the Congress Party said “My reaction to the Aam Aadmi Party (AAP) is nothing..absolutely nothing.” Only a person who is rattled could have said that. The Bhartiya Janata Party has been forced to project Dr Harshvardhan, as its chief ministerial candidate, instead of going in with its Delhi unit chief Vijay Goel . It’s obvious that the party wanted to project someone with a clean image to take on Kejriwal. But it left that decision to very late in the day.
What has worked well for the Aam Aadmi Party is the fact that Delhi votes majorly along class lines and not caste lines. Its real test will come when it starts contesting elections in other states, where caste and other political factors will have a major role to play.

The article originally appeared on www.firstpost.com on October 31, 2013

(Vivek Kaul is a writer. He tweets @kaul_vivek) 

Five questions govt needs to answer on food security

 sonia-maino-la-fidanzata-italiana-di-rajiv-gandhi-29-gennaio-1968-ap2Vivek Kaul 
Sonia Gandhi wants the chief ministers of fourteen states in which the Congress party is in power to role out the food security scheme in letter and spirit, and in quick time. Some media reports suggest that the scheme will be rolled out on August 20, which also happens to be the birth anniversary of Sonia’s late husband Rajiv.
While there seems to be a great hurry to launch the scheme there are some basic questions that the government needs to answer.
a) It has been pointed out time and again that the right to food security is likely to benefit 82 crore Indians. It seeks to cover 50% of the urban population and 75% of the rural population. The trouble is that no clear eligibility criteria for identifying the intended beneficiaries has been specified. It has been left to the state governments. As Jean Drèze wrote in a recent column in the Business Standard “For instance, the identification of eligible households is left to the discretion of the government. In the absence of clear eligibility criteria, no one is really entitled to anything as a matter of right; this defeats the law’s purpose.”
So the question is how will be the intended beneficiaries be identified.? The lack of a mechanism already seems to be causing problems. A report in the Daily News and Analysis points out that a presentation being made Sheila Dikshit, the chief minister of Delhi, was cut short by food minister KV Thomas. As the report points out “Dikshit’s presentation was cut short by food minister, when she mentioned that 32  lakh beneficiaries of existing schemes would be covered by the food security ordinance. She was reminded that in Delhi 72 lakh people are estimated to gain from the food security scheme. She had mentioned that Delhi had 2.62 lakh BPL card holders and 2.21 lakh are in the rehabilitation colonies and other 40,500 are in slums. Even these figures made just 26 lakh persons. Delhi CM then added another 10 lakh beneficiaries covered under the Antyodaya Ann Yojana and Anna Shri Yojana. She was told to undertake a fresh survey and draw the list of beneficiaries.”
Haryana Chief Minister Bhupinder Singh Hooda was in a similar situation. “Similarly, Hooda also come out with a figure of just 39 lakh beneficiaries.  He was also told that as per the population of his state, he needs to draw a list of not less than 1.69 crore,” the DNA reports.
So the calculations of the Delhi chief minister tell her that there should be 36 lakh beneficiaries(26 lakh + 10 lakh beneficiaries under the Antyodaya Ann Yojana and Anna Shri Yojana) of the food security scheme in Delhi. The food minister feels that there are 72 lakh estimated beneficiaries. Dixit has been asked to do a fresh survey and draw up a list of beneficiaries. The gap of 36 lakh (72 lakh minus 36 lakh) need to be filled.
Hooda needs to fill in an even bigger gap of 1.3 crore (1.69 crore minus 39 lakh). Both Hooda and Dixit want to launch the scheme on August 20, which is a little over a month away. How are so many people going to be identified in such a short period of time? And the bigger question is why has no method for identification of intended beneficiaries be prescribed? Sheila Dikshit plans to distribute food security cards to those eligible for the scheme. 
b)What is the food security scheme going to cost every year? The finance minister P Chidambaram in the budget speech he made earlier this year said “I have set apart Rs 10,000 crore, over and above the normal provision for food subsidy, towards the incremental cost that is likely under the Act.” The total food subsidy in the government budget for 2013-2014(i.e. The period between April 1, 2013 and March 31, 2014) is set at Rs90,000 crore. Chidambaram’s estimate will be lower for this year simply because the scheme will be launched in large parts of the country only during the second half of the year.
Economist Surjit S Bhalla writing in a column in The Indian Express puts the cost of the food security scheme at Rs 3,14, 000 crore. Bhalla’s calculations are fairly simple and straightforward to understand and put across the likely cost of the scheme more than clearly.
The Commission for Agricultural Costs and Prices of the Ministry of Agriculture in a research paper titled National Food Security Bill – Challenges and Options puts the cost of the food security scheme over a three year period to Rs 6,82,163 crore. During the first year the cost to the government has been estimated at Rs 2,41,263 crore. Andy Mukherjee, a columnist for the Reuters, puts the total cost of food security at $25 billion or Rs 1,50,000 crore (assuming $1 equals Rs 60).
And if all these numbers aren’t enough there is the original estimate of Rs 27,000 crore when the idea of the Right to Food Security was first mooted in the National Food Security Bill tabled in the Parliament in December 2011. As Jean Drèze and Amartya Sen write in An Uncertain Glory – India and Its Contradictions “The additional resources required to implement the Bill were officially estimated, at that time, at Rs 27,000 crores per year.”
So how much is the food security scheme eventually going to cost the government and in turn the taxpayers? The estimates as one can see vary anywhere from Rs 27,000 crore to Rs3,14,000 crore. Can the government at least provide us a clear estimate of that? Or would that even be possible for the government to do, given that it has specified no method to identify the intended beneficiaries. Hence, it has no idea of how many people it will eventually end up covering under the scheme. So how does it calculate the cost? 
c) The food security scheme aims to provide subsidised wheat and rice to nearly 82 crore people. In order to procure the required rice and wheat the government already has an elaborate procurement system in place. It uses the Food Corporation of India and various other state agencies to buy rice and wheat directly from the farmers. The rice and wheat thus bought will be later sold at a subsidised price by the government.
What does the government plan to do in bad years when the production and/or procurement of rice and wheat are hit? In the current year the procurement of wheat by the government has declined by 33 per cent to 25.08 million tonnes. This has been attributed to aggressive buying by private traders. As of now this is not a reason for worry for the government primarily because of the excess wheat that it had bought during the previous years.
But what happens in a year during which production of rice or wheat is hit. As the CACP research paper cited earlier points out “With 60 percent of India’s farmland dependent on monsoon rains, drought years can slash production and force the country to import large quantities. The government already procures one-third of the cereals production and any increase in procurement will have enormous ramifications on the cereal economy/markets and would crowd out private sector operations with a consequent effect on open market prices.”
The government has the option of importing grains. But that is easier said than done, specially in case of rice. “Rice is a very thinly traded commodity, with only about 7 per cent of world production being traded and five countries cornering three-fourths of the rice exports. The thinness and concentration of world rice markets imply that changes in production or consumption in major rice-trading countries have an amplified effect on world prices,” the CACP paper points out.
Andy Mukherjee of the Reuters explained the consequences of what would happen during a year of bad harvest, a lot more clearly, in a recent column. “When the domestic Indian crop is insufficient, the programme may destabilize a thin global rice market…Once the bulk of Indian consumption bypasses the local open market – where prices can and do rise in years of bad harvest – the full brunt of the country’s demand will have to be met by supply from Thailand, Vietnam, Pakistan and the United States. That will in turn cause prices to surge for countries dependent on imports, such as Nigeria, Senegal, Bangladesh, Indonesia and the Philippines,” he writes. Not only is the price of rice going to go up in India, the world prices will go up as well. We will start exporting food inflation in the years to come.
d) Are the states really ready to launch the food security scheme? Of the fourteen Congress governments in the country only two have committed to launch the scheme on August 20, 2013, the birth anniversary of Rajiv Gandhi.
The government plans to use the public distribution system (PDS) to distribute rice and wheat. Estimates made by CACP suggest that the currently the system has a leakage of 40.4%. “In 2009-10, 25.3 million tonnes was received by the people under PDS while the offtake by states was 42.4 million tonnes- indicating a leakage of 40.4 percent,” the research paper points out. This is a marked improvement from 2004-05 when the leakage was around 54.1%.
Drèze and Sen in their book An Uncertain Glory – India and Its Contradictions divide the PDS into ‘old-style’ PDS and ‘new-style’ PDS. “Basic features of the old-style PDS include narrow coverage, large exclusion errors, erratic supply of food and massive corruption. The new-style PDS is based on a focused effort to tackle these interrelated problems, and to achieve broad coverage, low exclusion errors, regular supply, and relatively small leakages,” write the authors.
States like Tamil Nadu, Chattisgarh, Andhra Pradesh, Himachal Pradesh, Odisha and Rajasthan, are a part of the new style PDS, Drèze and Sen point out. But large states like Uttar Pradesh and Bihar are still on the old style PDS. This will ensure a tremendous leakage of rice and wheat that is distributed at a subsidised price in these and other states which still have old style PDS. 
e) The government ultimately plans to move food security onto the cash transfer system from the current PDS. So beneficiaries will be paid in cash which they can use to buy rice and wheat from the open market. But what will happen to the elaborate grain procurement system that the government has built through the Food Corporation of India in that case? As Drèze and Sen write “If the PDS were to be replaced with cash transfers, the government would have to devise good ways of using all the rice and wheat it procures every year. The procurement system has a momentum of its own, and is unlikely to be dismantled any time soon. Upbeat estimates of massive ‘food subsidy’ savings in the event of a transition to cash transfers effectively assume a discontinuation (or at least a sharp reduction) of foodgrain procurement, but this assumption is rarely discussed. Nor is the political feasibility of discontinuing food procurement given any room in these calculations.”
These are important questions for which the government needs to answer or they will comeback to haunt us in the time to come.
The article appeared on www.firstpost.com on July 15, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
 
 
 
 

Babalog prophecy: Why Akhilesh won’t ever transcend Mulayam


Vivek Kaul

Scandinavian crime writers have been fairly popular over the last few years. The likes of Henning Mankell and Stieg Larsson have taken the world by storm. The latest Scandinavian sensation is Jo Nesbo, who has been writing a series of novels featuring a very “disturbed” Oslo police detective, Inspector Harry Hole.
Hole has a drinking problem. He has done drugs at various points of time. And the love of his life has left him and disappeared after she gets embroiled in one of the cases that Hole is investigating. On top of this Hole shares a rather philosophical relationship with his father who is dying of cancer. Nesbo writes the following paragraph in the context of the relationship that Hole shares with his father in a novel titled The Leopard:
There were those who asserted that sons always became, to some degree or other, disguised variants of their fathers, that the experience of breaking out was never more than an illusion; you returned; the gravity of blood was not only stronger than your willpower, it was your willpower.

Nowhere is this truer than in the context of the Indian political scenario, when the sons and daughters take over the mantel of their politician parents. India is full of political scions who have taken over, or are taking over, or will take over from where their parents left or are likely to leave.
Let me try and make a random list of politicians who fulfill this criterion, starting from Jammu Kashmir in the north and working my way down south to Tamil Nadu.
Omar Abdullah, the current chief minister of Jammu and Kashmir is the son of Dr Farooq Abdullah and grandson of Sheikh Abdullah, both career politicians.
Himachal Pradesh is ruled by Prem Kumar Dhumal whose son Anurag Thakur is a member of the Lok Sabha from Hamirpur and also a joint-secretary of the Board of Control for Cricket in India(BCCI).
The chief minister of Punjab is Prakash Singh Badal. His son Sukhbir Singh Badal is the deputy chief minister and the president of the Shiromani Akali Dal.
Sheila Dikshit is the chief minister of Delhi. Her son Sandeep Dikshiit is the member of Lok Sabha from the East Delhi constituency.
Orissa or Odisha as it is now known as is ruled by Naveen Patnaik son of the late Biju Patnaik.
Andhra Pradesh has scions of NT Rama Rao battling for political space. Jaganmohan Reddy the son of the late Y Rajshekar Reddy is giving the ruling Congress party a tough time.
Tamil Nadu has the Karunanidhi, his sons, his nephews, his grandsons, and so on, all hoping to stay relevant in a space which is getting a little too crowded for Karunanidhis.
Karnatka has BS Yeddyurappa the enfant terrible of the BJP. His son B. Y. Raghavendra is a member of the Lok Sabha from Shimoga. The state also has the Deve Gowda clan.
Maharasthra has too many political clans for me to start listing them here (that probably needs a separate piece in itself). But the latest political scion to join the bandwagon is Aditya Thackeray, son of Uddhav Thackeray and the grandson of Bal Thackeray.
This is a random list and is not complete in anyway. But it list remains incomplete without Akhilesh Yadav, the son of Mulayam Singh Yadav, and the current chief minister of Uttar Pradesh.
The phenomenon of political scions is not limited only to the states.
Patrick French in his book India: A Portrait carried out a very interesting piece of analysis on the Indian members of Parliament. Every Indian MP under the age of 30 was a hereditary MP i.e. his or her family member had made a career out of politics. More than two-thirds of the MPs under the age of 40 are hereditary.
Twenty seven MPs were what French calls “hyper-hereditary” i.e. they had several family members who made a career out of politics. The Congress party leads the race here. All the MPs that the party has under the age of 35 are hereditary. 88% of the Congress MPs under the age of 40 are hereditary. Regional parties have a greater proportion of hereditary MPs, in comparison to the national parties.
So what does this tell us? It tells us that the Indian voter loves to elect political scions into positions of power. It tells us why Motilal Nehru’s great great grandson is leading the race to become the next Prime Minister of India. It tells us why Akhilesh Yadav, the son of Mulayam Singh Yadav, was elected the chief minister of Uttar Pradesh.
But that’s just one part of it. It also tells us that politicians like businessmen want their sons and daughters to take over from them. A businessman after having built a good business which throws up a lot of money wants his progeny to manage it. The same seems to be the case with the politicians. Having built a good business model over the years they want their sons and daughters to run it.
This leads to a situation widely prevalent in the Hindi film industry where it’s difficult for an outsider to make it big as a hero. Most of the current crop of heroes are descendants of people who have had something to do with the Hindi film industry. These “heroes” are jocularly referred to as “baba log”.
But it is difficult to separate cause from effect. The Indian voter likes electing political scions and that is why we see more and more baba log entering politics. But at the same time since baba log have cornered most of the space in Indian politics, who else does the voter vote for?
It is a chicken an egg question.
Nevertheless, expecting baba log to change things that their parents or uncles or aunts or grandfathers weren’t able to do, is expecting a little too much from them. The case in point is Akhilesh Yadav. He ran the “umeed ki cycle” campaign during the elections in Uttar Paresh. The campaign was produced by former Hindi film director Arjun Sablok, who directed flops like Neal n Nikki and Na Tum Jaano Na Hum.
The voter was taken for a ride thinking that all that had been wrong during the rule of Mayawati, and also during the rule of Mulayam Singh Yadav, would change in the days to come. That was not to be.
The question that one needs to ask here is why political scions enter politics. That should provide us an answer to why it’s best not to expect any sort of change from baba logs. A political scion enters politics to carry on the family tradition of being in politics. He also understands that at some level he will not have to struggle to make it on his own. Things will be handed out to him on a platter. In short he is taking the easy way out, in most cases. And anyone who takes the easy way out to make himself relevant in this world has his own interests on the top of the agenda and not of the voters who elected him in the first place. The top interest of a political scion is furthering the cause of the family and the people who support the family.
Hence Akhilesh Yadav is in the process of becoming what his father was and probably still is. To end, let me quote Jo Nesbo again:
There were those who asserted that sons always became, to some degree or other, disguised variants of their fathers, that the experience of breaking out was never more than an illusion; you returned; the gravity of blood was not only stronger than your willpower, it was your willpower
The bigger sucker saved Buffett. But Mallya may not have any such luck
(The article originally appeared on www.firstpost.com on July 5,2012. http://www.firstpost.com/politics/babalog-prophecy-why-akhilesh-wont-ever-transcend-mulayam-368232.htmll)
(Vivek Kaul is a writer and can be reached at [email protected])