Category Archives: Indian Economy

Cambridge Analytica Scandal – Is Data Privacy A Mirage?

Cambridge Analytica Scandal – Is Data Privacy A Mirage?

The unauthorized “harvesting” of personal data of over fifty million Facebook users by Cambridge Analytica is the latest in a continuing saga of data related scandals. Breaking his long silence, Zuckerberg apologized to his billion plus users worldwide and called it a “breach of trust” and vowed to take steps to protect user data. But the damage has been done.

As many averred, Zuckerberg’s apology inherently assumes Facebook users will continue to trust it and that all will be forgiven and it will be business as usual. That may well turn out to be true. But given the seriousness of this “breach of trust”, this may have serious consequences on its fortunes. One immediate fallout is the #DeleteFacebook campaign that quickly went viral. Also Facebook stock lost almost 9% in value.

Facebook’s supreme success rests on a business model built on profiting from customer data and its priceless derivative – customer insights. Notwithstanding Zuckerberg’s apology and promises to clean up, it is anybody guess if he will really follow up or implement only cosmetic changes.

This brings into focus the importance of consumer data in today’s data driven economy. It is common knowledge that vast amounts of data are being generated every day, particularly by social media users. Using sophisticated analytics, this data can be mined to yield powerful insights about users. In fact it is a common practice for marketing companies to use these insights to create a full behavioral personality profile or characteristics of an individual.

Products and service or even a political ideology could then be effectively tailored or custom fitted for that profile in what is called micro targeting. This data driven super customization has wide applications – in retail marketing, business espionage, political campaigns etc. It is for this reason that today data is seen as the most important resource and companies would do anything to get their hands on it.

Given the multiple use of this cutting edge knowledge resource born out of the confluence of technology and high end quantitative skills, it is indeed awing and worrisome at once. It is like a knife that can be used in the kitchen as well as to kill. The exploits of companies like Cambridge Analytica have justifiably caused disquiet among large sections of society.

Cambridge Analytica, like many other companies, are way ahead of the curve in using these precious insights in seeking to “change audience behavior”, or to generate  favorable outcomes in the targeted populations in a general election. Hence their popularity with political parties worldwide, including India.

As can be seen, there is nothing illegal per se in Cambridge Analytica’s business model. In fact all major corporations worldwide are engaged in exploiting data in one form or other for their bread and butter. But the illegal gathering of profile information of millions of users without their express consent is what is under scrutiny.

But what has been a rude wake up call for many is the fact that companies like Cambridge Analytica can potentially disrupt a democratic process like an election. Undercover videos shared by Britain’s Channel 4 News show how the company actively planted news – typically fake news in the “bloodstream of the internet and let it grow” to achieve desired social and electoral outcomes.

This it very much akin to what the Soviet Union was doing decades ago to brainwash its people. The distinctions between legal and illegal is often blurry and Cambridge Analytica and its ilk appear to have exploited it to the hilt. To confound the issue, in many countries, regulators have still not woken up to combat this malefic use of data.

The problem is indeed acute in countries like India where political parties have shrewdly worked off radar to use the services of Cambridge Analytica and its subsidiaries to “influence social behavior” in the election process. How far the election processes have been subverted is anybody’s guess. But it is equally futile to point fingers at the Congress party or the BJP since all of them have at some point in time used these services.  It is like the Democrats in the US blaming the Republicans because the Trump campaign used them in 2016. But it came back on the Democrats when it was revealed that they too – the Obama campaign in 2012 -had extensively used these services.

The scary part here is that the users whose data is being fought over, have practically no say in the matter because they have already shared their private information on the internet. It has left their hands and there is no way they can get it back. How this will be used and shared or who will use this is being decided by companies like Facebook who are primarily motivated by profits and not overly concerned about user privacy. That such breaches and data hacks occur regularly speak volumes of the gap between current laws and their rigorous enforcement.

And this will definitely not be the last of data breaches or breaches of trust. But the real problem is that we are confronted by an insurmountable issue here that threatens individual liberty and the inalienable right to lead a private, yet social life.

In the end, these social engineers who stole personal information of millions of unsuspecting users in reality turned out to be deadly data terrorists who deployed their stolen assets to disrupt cherished democratic processes and skewed election outcomes in so many countries at the bidding of their paymasters.

The bitter truth is that we live in a world where nothing is private.  Google, Facebook, Twitter, Amazon and any number of known and lesser known companies already know more about us than we can imagine. We have to reconcile ourselves to the fact that, however unpalatable it may be, data privacy is just a mirage.

The need for agile, yet draconian laws on data usage together with forensic monitoring of disposal of data has been repeatedly pointed out by experts in the field. Hopefully, the wait may not be long. Social media companies have long taken the naïve user for a ride. It is time they stepped off the roller coaster.


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Is the PNB Fraud Just the Tip of the Iceberg?

Is the PNB Fraud Just the Tip of the Iceberg?

Another major financial scam hit headlines in January 2018 involving “fraudulent and unauthorized” transactions involving letters of undertaking (guarantee) to Antwerp based diamantaire Nirav Modi amounting to over Rs. 12,500 crores at the Punjab National Bank (PNB). Initial reports have suggested that this originated at a branch in Mumbai where a manager allegedly took advantage of the incomplete integration of the bank’s core banking platform with the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network. The LOUs provided Nirav Modi access to huge foreign exchange loans provided by banks including the State Bank of India, Axis Bank, Allahabad Bank and Canara Bank. The diamantaire’s subsequent default on the loans blew the lid.

It is well known that the Banking industry all over the world, including India, is a highly regulated industry. Yet, with so many regulations and agencies monitoring it, Indian banks have been subjected to high profile, high value frauds with a regularity that is numbing. What is even more galling is the apparent ease with which the fraudsters seem to get away and live happily ever after. It makes us wonder if the authorities are really capable of providing a safe and secure banking environment for the people in India or are really just paper tigers. Whatever be the truth, the money has disappeared and there is little hope of retrieval.

This scam is reminiscent of the fraud that bought down Barings Futures Singapore (BFS) in the late 90s. Investigations had then revealed that Nick Leeson, a broker at the Bank’s Singapore office allegedly unbeknownst to the management, had entered into unauthorized speculative trading, that bought the bank down.

It is precisely to fix these types of frauds by lone wolves as well as risks arising from technology related issues that the Bank for International Settlements (BIS) brought out guidelines for enhanced scrutiny in the subsequent release of the Basel II guidelines. These robust guidelines have further been expanded in Basel III release and have largely succeeded in plugging these types of frauds worldwide. Like many countries, India too has mandated its banks to adopt these guidelines to bolster their risk management capabilities.

It will be instructive to look at the level of scrutiny banks in India, in particular, are subjected to. Firstly, each of these banks has their own set of guidelines for periodic – usually annual – mandatory audit of high value transactions both by internal as well as external auditors. This means, in the PNB scam case, at least ten internal and external audits of the five banks must have reviewed the same high value transactions of Nirav Modi at different points in time.

In addition, these banks themselves conduct periodic governance, risk and compliance audits that would specifically look into any operational or enterprise risks. Over and top of all this, the Reserve Bank of India (RBI) meticulously inspects the banks regularly. This includes on site as well as offsite surveillance of the banks by dedicated teams.

The million dollar question on everybody’s mind is how did the diamantaire manage to pull wool over the eyes of PNB and the regulators? The obvious answer is that the auditors and agencies appear to have been silenced by invisible hands.

A look at the data published by RBI is indeed telling. (Please see table below – Bank-wise and Bank Group-wise Gross Non-Performing Assets report published by RBI at The non-performing assets (NPA) or bad loans as a percentage of gross loan jumped from 6.55% in 2015 to 12.90% in 2016 and then to 12.53% in 2017.


It must be mentioned here that loans take several payments cycles and considerable delinquency (non-payment of dues) and/or a default to be classified as an NPA. In other words, Nirav Modi’s loan accounts and consequent exposure to banks arising out of the letters of undertaking would have been in active audit and regulatory scrutiny for considerable amount of time before it became a hot potato.

The report itself points to the fact that RBI knew about this precipitous jump in NPAs at PNB in 2016 or even much earlier. This would have automatically raised red flags internally and triggered closer review by the regulator. There is absolutely no gainsaying the fact that Dr.Raghuram Rajan, the then Governor of the RBI, must have been fully aware of this scam.

As is the wont of such high profile scams, many questions, including the most obvious ones, remain unanswered. If data available in public domain was already pointing to almost doubling of delinquent accounts in just twelve months at PNB, what actions did the regulators take? Were they prevented from discharging their duties? If so by whom? What was the role played by the then Ministry of Finance?

At least some things can be deduced from the above report. PNB must have been aware of this much before the RBI or the Ministry of Finance were informed since they compiled and sent the data to RBI.  The RBI knew what was going on at PNB long before the matter became public. Hence the arrest of low level officers at PNB or the alleged lack of connectivity to SWIFT are nothing but scapegoats in what now appears to be a premeditated loot of public money.

The PNB executive management and the auditors cannot escape responsibility for their negligence and apparent inaction, for that is tantamount to abetment of this colossal crime. The need of the hour is to revamp the bank’s executive management and clean up its audit and compliance processes. PNB has to step up the transparency in disclosures and come clean on the fraud so the real culprits face the law.

Recent media reports have pointed to the involvement of a senior politician of the UPA regime in this scam. Fingers point to a former minister in the UPA regime who has also been at the center of multiple other corruption accusations. Given India’s post-independence history of corruption, this comes as no surprise at all. That the scam leaked into public domain is the real surprise if at all there is any.

Banking, as we all know, is a business built on trust and relationships. Repeated breach of public trust in banks in India are symptomatic of a deeper malaise in the banking system.  It is now incumbent on the government and it’s investigating agencies to get to the bottom of the PNB scam and book the culprits – be it lowly officers or the high and mighty political overlords and bring them to justice. Any delay will only widen the public’s trust deficit in India’s banks.

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Posted by on March 8, 2018 in Banking, Economics, India, Indian Economy



India’s Surgical Strike – Calling Pakistan’s nuclear bluff


A lot has been written about the surgical strike carried out by the Indian army deep inside Pakistan occupied Kashmir (POK) on September 29th. Media reports have indicated that India is likely to share more details of this daring operation. But first things first. India needs to be congratulated on the planning, flawless execution, post-strike information and media management of a surgical strike that changed everything about India forever. It was a retribution for the attack on the Indian Army Brigade Headquarters at Uri in which 19 soldiers were killed. It was a punishment that a resurgent India handed out that Pakistan will not forget for a long time to come. Experts believe the strikes are only a preface to more such operations that India will impose on Pakistan.

Concern has been raised in the media about Pakistani response. There are justified apprehensions about possible tactical nuclear strikes. While nothing can be taken for granted, there are reasonable grounds to believe that a possible retaliatory nuclear strike would have been factored into India’s strategic calculations. India’s readiness to respond would be a given.

How Pakistan reacts, and suffers the consequences of its response will be seen in the coming days. For now, they clearly seem to have been severely whipped. It has also left the door wide open for future cross border strikes by India.

A central piece to this episode is the message it has delivered. The optics of the strike itself have unambiguously broadcast India’s larger strategic intent to the world – Pakistan in particular and through it, China.

Some analysts have expressed the view that India has turned a new leaf only after the dastardly attack in Uri. A closer observation of available pointers paints a different picture. In fact, the writings were on the wall soon after Prime Minister Modi took office. Many may not even recall that Modi’s first visit outside Delhi in June 2014 was to the aircraft carrier INS Vikramaditya. He also spent Diwali with the Indian troops in the rarefied heights of Siachen Glacier.

Modi’s top priority was to focus on India’s military strengths and vulnerabilities that play a pivotal role in his grand vision to transform India, particularly the economic transformation. As the Chief Minister of Gujarat, he became painfully aware that any such vision would be susceptible to terror campaigns from across the border.

It was no surprise then that Modi upped defense spending making India the world’s largest defense buyer. The massive arms purchases have yielded important diplomatic dividends – a huge leverage with major powers that came in handy in pursuing India’s regional and global strategic agenda. The recent US smack down of Pakistan, for voicing a nuclear threat against India was no accident. It was a well-deserved end result of two and a half years of dogged diplomacy.

In retrospect, the twin focus – building military competence and refurbishing diplomatic ties with key nations and international institutions – was a deeply thought out strategy that became a keystone to Modi’s pet initiatives.

Many only see Modi’s focus on rapid economic growth and miss the underlying twin focus. But a sufficient and necessary condition for India’s economic transformation is military might and relief from cross border terror.

While the painstaking preparations were afoot over two and a half years, the killing of Indian soldiers on Myanmar border in the east created an opportunity for India to test its new doctrine. The much acclaimed ‘defensive offense’ mandated a new normal involving hot pursuits and strikes on foreign soil. But Pakistan failed to see the writing on the wall and continued to live in a la-la land of bogus nuclear deterrence. They even mocked India retorting that “Pakistan was no Myanmar”.

The Uri attack provided a perfect opportunity for India to execute an already fine-tuned and tested doctrine on its western front. It was ripe and ready for whipping Pakistan and calling its nuclear bluff. However, it has to be mentioned that the Uri brigade camp had shown surprising incompetence in allowing the attack – given that post-Pathankot, there was sufficient intelligence to up the vigil.

On another front, India’s self-imposed taboo on mentioning Balochistan, POK, Gilgit, Pashtun etc. together with the lobby of peaceniks, Aman ki Asha types, et al had succeeded in holding back the country. But Modi’s Independence Day speech on August 15th this year actually broke this shackle. It succeeded in opening the flood gates of discontent in the local population in those areas, encouraging them to rise against an oppressive state. It has provided India a new set of levers against Pakistan.

The optics of the surgical strike referred to earlier, as well as the Independence Day speech, have helped launch the country into a new international orbit. This molting of India has provided three key visuals for Pakistan, China and the West, in that order.

First, India has called Pakistan’s nuclear bluff. Any future terror attacks on the country will invite retribution that will impose high costs on Pakistan. However, there is no guarantee that Pakistan will cease and desist its cross border terror. But there is no doubt that there will be a befitting retaliatory strike deep inside its territory.

Secondly, it had a powerful message for China. The China Pakistan Economic Corridor (CPEC) runs through territory over which India has legitimate claim. China is investing over US $46 billion in the project and has been concerned about the constant security threats from unrest in Balochistan and POK. By raising the Balochistan issue, India has successfully put a spoke in China’s wheel. It has raised serious doubts about the security and hence the very viability of the project. It is a warning for China not to fish in troubled waters. Again, it has opened new bargaining positions for India against China.

Striking deep into enemy or foreign territory is a capability that currently only the US and Israel are known to possess. The surgical strike into POK announced India’s entry into this elite club. India can execute hot pursuits or deep strikes in enemy territory to enforce its regional agenda and achieve strategic objectives.

India’s surgical strike shows a new and assertive paradigm where terror attacks will no longer be business as usual, notwithstanding Pakistan’s nuclear fig leaf. Burying the now dead self-imposed ‘strategic restraint’, India seems determined to act upon safeguard its strategic interests.


Pathankot -Quelling the terror from across the border

The recent attack on the air force base at Pathankot has come as a shocker. That the terrorists were neutralized before they could cause mayhem and destroy air force assets is no consolation. Fact remains that a strategic and offensive forward airbase was brought to its knees by handful of terrorists is a shame for India. pathankot

Prime Minister Modi spoke for millions of Indians when he repeatedly expressed surprise over how a small band of terrorists could even breach the security at a strategic forward air force base.

As if this was not enough, there was legitimate angst over rushing NSG forces from far away Delhi when more than sufficient battle ready army special forces units were on hand in Pathankot itself to neutralize the terrorists.

The attack only followed a familiar and predictable pattern. Every time India has reached out to Pakistan and an overly eager Indian leader visited Pakistan, the response has been a high profile attack on India.

All this have only raised doubts over India’s operational capabilities and spawned a sense of temporary disbelief in its ability to fight terror. The questions in minds of millions of Indians seems to be – Will we ever learn? Can we ever put an end to this cross border terror?

In one sense, the Pathankot attack has forced India once again to revamp its counter terror strategy and put in place new deterrents that will keep Pakistan at bay forever.

Economically, Pakistan is a basket case and has no hope in hell for several generations to come to provide for its hungry millions. Hence it has willingly become a front client state and an errand boy for western powers and other paymasters in their global strategic designs and power projections. More importantly, it has played the convenient role of a proxy to these powers in their covert operations.

Pakistan has been immensely rewarded for this –financially, militarily and politically by these powers. Most importantly they have turned a blind eye towards its terror strategies directed at India. It had also repeatedly earned the mileage with the West to admonish India periodically and pressured it to start talks with Pakistan.

But the unfolding strategic realignment in Middle East is an important development that India should carefully exploit. The lifting of sanctions on Iran and the Russian pounding of Saudi proxies in Syria have contributed to souring US-Saudi relations. Further the fall in oil prices and continued budgetary deficits have not only enervated Saudi Arabia but have reduced its ability to fund and reward its friends and allies including Pakistan.

It is important for India to note that the US has successfully sidestepped powerful diplomatic lobbies – Israel, Saudi Arabia and internal lobbies – and has negotiated a deal with Iran. This is a very significant, yet understated, strategic development with long term consequences that will definitely impact the world including India.

While only time can tell what US intentions are, many observers feel the Iranian deal is more to usher a ‘balance’ in the Middle East region. If a long term ally Saudi Arabia can be sidelined, Pakistan may not be far down in the list, given that it has far outlived its utility in helping the US war in Afghanistan. The lesson for India is that US can jettison decades long relationships to take care of its interests. In this context, President Obama’s pointed reference to terror camps in his last State of the Union address should be a source of serious concern for Pakistan.

India should step up its diplomatic offensive to exploit this “new balance”. India surely understands these ground realities and the broader context of the very survival of Pakistan as a sovereign state in the long term. For over six decades unfavorable headwinds had tied its hands in using its superior armed forces and punishing Pakistan for its wanton acts of terror. However, there may be a window of opportunity now for India as we see a broader strategic realignment of US foreign policy in Middle east.

But India has to step up rapidly and prepare the ground for a new strategy to counter terror. India’s new policy should strengthen three key pillars – economic sanctions, covert operations and revamping internal security apparatus to make it leak proof. Needless to say the operational efficiency of its multifarious forces and agencies have to be reviewed and stepped up.

Firstly, as mentioned the aforementioned strategic realignment provides new opportunity for India to impose a de facto regional economic sanctions regime against Pakistan. There cannot be trade with a neighbor that uses terror as a state policy. Period. India must fully and forcefully exercise its options to impose economic & trade sanctions.

Economic sanctions against Pakistan have never been taken seriously by India. On the other hand, the subcontinent is witness to churlish and even puerile efforts to grant a MFN trade status to Pakistan. India must take a clear and resolute stand that it does not support the economic revival of Pakistan. It is plain naiveté to support and foster an economy that ultimately seeks to wound India.

Economic sanctions cannot be administered if the required investment and infrastructure are not in place.India must invest money and relevant resources to build the infrastructure to administer and monitor such sanctions. Like the border fence this will be an invaluable investment and will be a forceful deterrent against terror from Pakistan.

India, which is a water starved country, has been more than generous in sharing the waters of its rivers in the Himalayas with Pakistan. Playing Cricket with India brings in huge financial benefits to Pakistan. India must stop playing cricket with Pakistan until every terror camp is closed. Water, trade, Bollywood films and cricket must be brought under the purview of economic sanctions.

The second pillar of the strategy is covert operations. There is no need to elaborate on what India should do. It has the wherewithal – resources and logistics to make this happen. The political leadership has to make this leap.

The third pillar of the policy is operational efficiency. Much has been already said about gearing up the security agencies. Post Pathankot, India is already working on this and needs no elaboration.

Pathankot attack may have been an embarrassment for India, but the evolving international political scenario provides the Modi administration a new window of opportunity to contain Pakistan. Defense Minister Parikkar has to be lauded for taking a forceful stand. Prime Minister Modi has to be given credit for building diplomatic relations with countries India can count on.

However, it is time the political leadership changed its mindset and gave the professionals the go ahead to quell the terror from across the border. In the interim, talks with Pakistan must continue, but no concessions should be given on anything.

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Posted by on January 18, 2016 in India, Indian Army, Indian Economy, Terrorism


Modi’s US visit puts India in the big league

In many ways, the just concluded visit to the US by Prime Minister Narendra Modi stands out. The visit significantly upgraded Indo-US bilateral relations via the new avatar of India’s foreign policy – economic diplomacy. This economic diplomacy is and will continue to define the contours of a new relationship with the US. If the response he received from President Obama, the leaders in US political spectrum or the tech majors is any indication, then Modi’s visit was a home run all the way.


Modi’s visit to the US and in particular the Silicon Valley in California has generated a lot of interest and analysis. His visits to technology innovators like Tesla, Google and Facebook as well as his address to a packed audience of largely Indian Americans have been widely reported in US and the international media. Also an array US politicians lined up to meet, greet and take selfies with Modi. This prompted Obama once again to call Modi a rock star. This speaks of the positive image Modi has cultivated in a country that not long ago had denied him a visa.

While a galaxy of world leaders converged for the 70th session of the United Nations General Assembly (UNGA), it was Modi who converted this annual ritual into a charm offensive seeking investments and support for a national mission. The only other leader who attracted this kind of attention was Pope Francis.

Modi’s visit to the US has impacted at least three major areas – technology, diplomacy and defense – all of which will pay rich dividends to India in the coming days.

First, the technology ecosystem. The Digital India initiative is a smart deployment of technology to deliver governmental services to all citizens in a large country where even basic infrastructure may be deficient. Given the slow pace of recovery of the US economy, tech giants have been eyeing greener pastures in emerging markets. Silicon Valley honchos realizing the India opportunity, were candid in their admiration and have expressed eagerness to be part of this massive transformational Digital India initiative. They can play lead role in the successful design, execution and delivery of this mission.

The Google- GOI initiative to provide Wi-Fi facilities at over five hundred railway stations will connect millions of Indians and open up new opportunities for a whole ecosystem of large, medium, small and tiny enterprises. From the tea vendors to MNCs, it will revolutionize the way they do business. This will be replicated all over India by providing broadband access to approximately 500,000 villages in collaboration with Microsoft. Tesla is exploring how its TeslaWall – a wall-mounted battery charged by solar energy that is scalable to power whole neighborhoods – can be used to power villages and transform rural India. It is expected that cumulatively these initiatives will open up the flood gates of employment for millions.

There are sure gains on the diplomatic front as well. At a time when the US is silently redefining its foreign policy strategy, India has gravitated to the spotlight, which is no accident. The Syrian crisis, Paris climate change talks later this year, China’s faltering economy and dissension among its European allies have forced a rethink. Given the US’s inclination to work with Russia in resolving the Syrian crisis, notwithstanding loud ‘protests’ from the administration, it accentuates the ennui of the sole superpower and a newfound, albeit, hesitant willingness to share responsibility for policing the world.

India -specifically Modi – has astutely recognized this emerging white space and is projecting itself as a responsible player in international geopolitics. India’s approach to the Paris talks – that “will set the tone not just for today but for decades to come” – as well as increased involvement / deployment of Indian forces overseas are calculated strategic moves to bring India to the forefront in global geopolitics. Many may not be surprised to see Indian forces joining multinational forces to fight ISIS.

Modi’s US trip will have ramifications in the G4 group too. Today among the G4, arguably though, it is India that is on best terms with the US. The G4 – Brazil, Germany Japan & India – seeks to secure for themselves a permanent seat in the UN Security Council, is also a de-facto emerging economic block. India’s rising influence with the US is bound to yield ample collateral advantage in deciding trade and bilateral relations with three key economies of the world to its full advantage.

The $3 billion deal to buy Chinook and Apache helicopters has not only taken commercial / defense cooperation to a new high, but it has also handed a huge ‘influence quotient’ to India. This deal also has an ulterior message to India’s adversaries – Pakistan and China. They will have to reassess the cost of provoking India. Modi’s demand from US soil to the UN to unequivocally define terrorism is a pointer to the new confidence emanating from his proximity to Obama.

From India’s perspective, this enhanced attention and groundswell of goodwill in US power centers is surely a welcome development. It has indeed come a long way in a very short time, given that in the past, Indian prime ministers came and left the US almost unnoticed even by Indian Americans.

While the US media has been gushing about the visit, the Indian press back home has been critical and even questioning every outcome of the visit. They seem to ignore the facts on the ground and be driven by an agenda to project Modi in poor light at every opportunity. This is indeed regrettable.

One can definitely measure the success of his visit by the quantum of investments flowing into India. But what many have missed is the qualitative shift in the US’s perception of India as an economic power house. One could argue that its ‘influence quotient’ at the White House has been gone up. Positive image and diplomatic gains – intangibles as they are – are often perceived and experienced than measured quantitatively.

Modi returned to India with a bagful of benefits – some tangible than others. But he certainly moved India from a country perceived in America as always only providing a knee-jerk response to Pakistan’s atrocious Kashmir remarks at the UN to one which is setting a new economic agenda and controlling the narrative to its benefit like a global power.


Digital India –Technology for economic transformation

Prime Minister Narendra Modi came to power with a massive mandate in May 2014. His mantra has been good governance nasscomand economic development. Given the massive scale of poverty in India – in spite of the impressive growth witnessed in the last decade – the path to economic salvation complex and merits serious thought and policy initiatives. As Modi seeks to put the Indian economy on a high growth trajectory north of 7%, his government is betting on deploying a broad spectrum of cutting edge technologies as the catalyst to enable this massive economic transformation. Digital India initiative will play a pivotal role in facilitating this transformation.

The reliance on technology rather than ideology is a refreshing paradigm shift. Unlike the socialist ideology forced upon the nation for over six decades that resulted in stagnating poverty and measly growth rates, technology has proved to be a reliable catalyst in economic transformations of nations. More importantly India, where a majority of whom are under 35 years of age, is impatient and in no mood to suffer economic hardships any longer.

Industrial Revolution of yesteryears is a striking example of how new inventions and technology spurred western economies. In more recent years, the advent of mobile phones has enabled widespread reach of telecom and mobile enabled services to remote areas in poorer economies of Africa and Asia. Kenya’s mobile banking is a shining example. Hence the reliance on technology is prudent and has the highest odds to success in enabling this massive transformation.

Digital India will provide both government and non-governmental service providers a platform to co-create and co-share a transparent, leak-proof – read corruption free – and efficient delivery of services to every nook and corner of the country. This connectivity will hasten a feedback loop to the federal and regional governments by providing instantaneous data on various program implementations and other vital data.

In fact Prime Minister Modi, in his recent address at the NASSCOM summit on 1st March 1, 2015 stressed the importance of digital technology in service delivery, governance, transparency and an effective deterrent to corruption. Even at a minimum, this will be a phenomenal achievement that will set the stage for rapid economic resurgence. The benefits are immense.

However this reliance on technology is fraught with the obvious risk of obsolescence. Rapid changes in technology can render huge investments redundant and can hurt developing economies badly. Hence the window of opportunity for deploying extant technologies as an agent of transformation is minimal to small. This is precisely why we find the almost obsessive pace with which the government is working to execute the digital India initiative.

Leveraging digital technology as a transformational catalyst envisages three key prerequisites – technical knowhow, ability to consume digital technology and capital. They will dictate the success of Digital India campaign.

Unlike cryogenic engine technology of the yesteryears when the country was held to ransom by western technology, India has access to the best in class digital know-how via its very own home grown IT majors. Hence access to know-how and skilled human assets would not be a problem.

Secondly, mobile usage in India is at a record high and growing and consequently the ability to consume services via digital technology is high. India currently has approximately 90 crore mobile users! This is a vast user penetration and an incredible service delivery platform for the government.

However, availability of capital could be a major challenge. The Modi government has been investor friendly and has produced the right sound-bytes to attract fresh investments. Many analysts who have followed the Modi government for the last nine months believe that the government may not face serious challenge in raising funds externally. Internally, the recent auction of coal blocks that netted over 1 lakh crores points to new financial muscle and determination of the government.

That leaves the execution and delivery of the project which may be the weakest link in the chain. While PM Modi has the right credentials in delivering, as seen from the Gujarat experience, he is on test as to how these lofty ideas are translated on a broader canvas to benefit the country.

It is, however, imperative to point out that for the first time in over six decades, the Indian government has mustered the courage to dream big – a clear vision rooted in pragmatism and not on empty ideology or rhetoric. This has gladdened the heart of middle India. For starters, the Digital India initiative has prevailed over its biggest obstacle – selling the vision and winning hearts; it is a major victory at that. But risks persist in making this dream a reality.

India today stands at the cross-roads – a poor nation with lofty dreams that has squandered away its resources and treasure to corruption and a perverted politico-bureaucratic ecosystem bent on exploiting the country rather than serving it. It is this very same system that will help execute and deliver on Modi’s lofty vision for a digital India. Modi will need all hands on deck since Digital India is fraught with high risks, but the rewards are huge too.

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Posted by on March 1, 2015 in Economics, India, Indian Economy, Indology, Trade


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The Rise and Rise of Narendra Modi


I have long resisted the temptation to put down my views on Narendra Modi. It is common knowledge that the electronic & print media in India have consistently projected a perverse and dismal image of Modi, notwithstanding the fact that he has been unequivocally cleared of any wrongdoing by a special investigating team (SIT) appointed by the Supreme Court of India.

In the midst of this polarization manufactured by a very powerful section of electronic and print media,  a well informed and intelligent discussion becomes impossible. However, even at the risk of being ignored, I want to highlight some key issues that have not been widely discussed by mainstream political pundits.

India is witness to a huge transformation that is sweeping the country as a result of three simultaneously occurring and evolving phenomenon. This transformation will influence future course of events in India and will in due course determine who the next PM as well as impact decisions beyond 2014. Narendra Modi has fully understood these forces and has used them to his advantage. This has paid him handsome dividends already – as seen from the massive following at his rallies and the stunning electoral success in the recently concluded regional elections. The three forces are the people’s expectations to deliver on development, India’s ‘demographic dividend’ and the skillful deployment of technology and internet – specifically social media,  in governance and mobilizing the people. Let me elaborate;

Many so called pundits have us believe that using development as an election plank is a new phenomenon. They in fact accuse Modi of starting a new expectation cycle from the people on economic development. This is far from the truth.

For six long decades Nehruvian-socialist shibboleths were peddled as panacea for removing poverty.  Keen observers have always been aware that the political parties – all of them – have been guilty of keeping large sections of society poor and underprivileged. Their logic was that these sections were susceptible to enticements and could be won over with trinkets, gifts and cash disbursals that came in handy to win elections. This, arguably though, is one of the reasons why we find slums dwellers in every city across India. That this has become an uncontrollable eye-sore is another matter.

To cover up incompetent governance and rank corruption, they raised a host of phony issues  and engendering  what Nehru would have called ‘fissiparous’ policies  – like appeasement politics – that did not have any real mass approval  and ultimately ended up against India’s interest.  But today there is widespread anger and demand for governance from every section of society.  Modi has shown the courage to change the narrative from rigmarole sloganeering to execution & good governance. What Modi has done in Gujarat is not unique; he delivered what a reasonable leader in a democracy is expected to deliver and his government performed the duties expected of it.  The time has come where anyone with a good record of governance will win the heart of India. This expectation has taken deep roots and Modi  has positioned himself  at the right place at the right time to encash his good work. .

Secondly, Indian political class today is a genre of senior citizens desperately clinging to office. With over 65% of Indians below the age of 35, the gerontocracy has long lost its connect with people. Overwhelming incompetence and corruption have accentuated disconnect. On the other hand, this demographic segment has played a very significant role so far in independent India in courting and influencing public opinion on a range of issues that  have shaped national discourse – from the gang rape in Delhi to exposing a media personality’s sexual indiscretions or drumming up support for a transparent administration.

Modi has smartly influenced this segment by showcasing his record of governance in Gujarat and offering the ‘India First’ theme. The Gujarat government’s efficient delivery of basic service to the people of the state and the attendant transparency has attracted millions to his fold. From there on he has shown superb leadership in keeping and growing this following by reporting to them at huge rallies the accomplishments in Gujarat and his dreams for India. This has captivated the under-thirty fives as well as larger sections of middle class.

Thirdly, Modi is tech savvy and has not shied away from using IT to enable development. He has an overwhelming following on Twitter – over 3 million followers. His YouTube videos are a big hit.  He is creatively engaging this group by crowd-sourcing new ideas for the 2014 election. The India272 website is an outstanding example where he has requested his fans to suggest campaign slogans, new ideas for development and electioneering. On the contrary the UPA regime and other parties have not only not courted them, but angered them by censoring social media. Winning the hearts of this massive segment is the biggest win for Modi.

Modi has definitely won the hearts of the people in his fight to capture Delhi. He is the hot favorite and is all set to become the prime minister. However, it would be naïve to conclude that the battle is won. There are any numbers of inimical forces that are determined to keep him away from taking charge of India. These are both internal and external forces that are working in tandem to stop him in his tracks. These forces will mount as many challenges as possible – legal, constitutional, political etc to block him.  So his path to Delhi is not exactly a bed of roses and he is fully aware of it. But the most heartening thing is that he has awakened an India that was long suppressed and emasculated by a perverted political model that defied logic for six decades.  If the British divided and conquered India, the Nehruvian socialist perfected a new art of appeasement to further splinter India. Both have greatly damaged the soul of India, but have not succeeded in destroying India. Modi will have his hands full in cleaning up the mess in 2014.


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