Category Archives: Digital Economy

July 10, 2014 · 10:39 am

FDI in E-commerce: The welcome decision that wasn’t

As soon as the Finance Minister said something about e-commerce in his maiden Budget speech, the social media was abuzz with discussion about FDI in e-commerce being allowed. In Twitter, the tone was celebratory, with many complimenting the FM and PM Narendra Modi for this revolutionary decision. Some even started discussing what it means.

What added to the confusion is that PwC actually issued a statement welcoming the decision to allow FDI in e-commerce. And that was quoted by many in Twitter.

Even some media brands started tweeting the same. The Economic Times, India’s largest business newspaper was one of them.

In fact, ET actually did a story quoting PwC. All these were unfounded and just shows not just how social media behaves but how the respected media brands, in order to be the first with the story, compromise severely on fact-checking. Now, this is what the FM said.

FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell its products through retail including E-commerce platforms without any additional approval.

It is very clear. Isn’t it? “The manufacturing units” will be allowed to sell “their” (ignore FM’s speechwriter’s grammar for a while) products through retail including e-commerce platforms. I could not listen to the speech properly but cautioned against some premature celebration

So, for sure, there is no implications for either the Amazons or the Flipkarts.

Does it mean it is a useless statement with no implications for anyone practically? That seems to be the tone of the despaired tweeple after they realized this.

But  even that is a misinterpretation. The companies that will surely benefit from this will be those foreign companies that manufacture in India.

Dell, which used to sell directly online before the new regulations came into force (now it sells through a partner), can start selling again directly through online channel. So can Lenovo. And Nokia. And Samsung. And many more product companies that already manufacture in India.

Will some of them start selling directly? Let’s wait and see.

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May 2, 2013 · 7:16 am

The Realities of Twitter Democracy!

In September 2011, as the then editor of Dataquest, I wrote an editorial, The Opportunities and Threats of Facebook Democracy. While Dataquest was one of the first publications to do a cover story on how social media was effectively used in the fight against corruption earlier that year (in April), and had celebrated the new power that social media had given to the common people, in this editorial, I had warned against attaching too much importance to the voice emanating from social media by the leaders and policy makers. My reason, of course, was the low penetration of social media. In a large diverse democracy, jumping into conclusion based on what a small section of people belonging to a particular socio-economic section say, was a potentially dangerous and suicidal thing to do, I argued.

The reason I called it Facebook Democracy was that a lot of the campaign by India Against Corruption was actually carried out on Facebook. It was the main mobilization platform.

Since then, Twitter has been used by politicians very effectively to drive their messages. Many politicians and political parties have taken professional help for that purpose. All of us know the power of #pappu and #feku campaigns. While penetration of Twitter is still miniscule compared to the size of  Indian electorate, some politicians have managed to have a very large fan following, going up to more than a million. And there are at least ten Indian politicians on Twitter who have more than a lakh followers. Considering that not more than 100 million Indians are online, those numbers are not unimpressive.

Unimpressive they may not be. But as it turns out, most of these followers are fake.

Social media management platform maker, Status People, actually provides a way to check your (and others’) fake followers. I actually checked out the the fake followers of the top ten Indian politicians on Twitter by number of followers and checked how many fake followers they have. 

And can you imagine what the average looks like?

It is 59%.

That is, as much as 59% of the followers of these politicians on Twitter are fake. And typically, the bigger the number of followers, the bigger is the percentage of fake followers, though there are small exceptions.

Here is the table.

Politician Twitter Handle Total Followers Fake Followers (%)
Shashi Tharoor @shashitharoor 1756468 62
Narendtra Modi @narendramodi 1560092 65
Dr Manmohan Singh @pmoindia 538323 55
Sushma Swaraj @sushmaswarajbjp 447766 52
Arvind Kejriwal @arvindkejriwal 314614 54
Omar Abdullah @abdullah_omar 274937 54
Subramanian Swamy @swamy39 165408 42
Ajay Maken @ajaymaken 151118 55
Derek O Brien @quizderek 149448 38
Varun Gandhi @varungandhi80 118728 52

The numbers are as on 1st May 2013

And here are some realities.

  • Narendra Modi, the potential PM candidate of BJP, heads the list in terms of  percentage fake followers, with 65% of his followers being fake.
  • As many as 8 of the 10 in this list have more fake followers than they have genuine followers. Derek O’ Brien and Subramanian Swamy have the lowest percentage of fake followers in this list.

What Does This Mean?

This, of course, does not suggest that politicians are doing something deliberate to create fake profiles/followers. And since there is not much to choose between different parties, it is not a political statement that one is making. In fact, many politicians themselves will be shocked to know this.

For that matter, there is not too much of a difference between politicians and other celebrities when it comes to the percentage of fake followers. I did check that for a couple of them. In case of Amitabh Bachchan, 73% Twitter followers are fake. For Shah Rukh Khan, that number is 70%.  But in case of celebrities, it is a reaching out to the fans, so it does not matter how many fans follow them.

For politicians too, it is a great platform to get their message across, engage with media and at least a certain section of people, who are using this medium. The problem begins, when, their PR managers try to make us believe that they are great leaders because of the large fan following. That is when we get it completely wrong.

In fact, fake followers is just one part. The above platform, Status People, also measures how many of the followers are inactive. For each Twitter profile, it divides the followers into three parts: fake, inactive and good. When you take just those followers that it terms are good (who are real and active), the total followers number drops drastically.  Here is the above list of politicians with their “good” followers.

Politician Twitter Handle Good % Good Followers
Shashi Tharoor @shashitharoor 10 175647
Narendtra Modi @narendramodi 10 156009
Dr Manmohan Singh @pmoindia 16 86132
Sushma Swaraj @sushmaswarajbjp 16 71643
Arvind Kejriwal @arvindkejriwal 14 44046
Omar Abdullah @abdullah_omar 13 35742
Subramanian Swamy @swamy39 21 34736
Ajay Maken @ajaymaken 12 18134
Derek O Brein @quizderek 22 32879
Varun Gandhi @varungandhi80 13 15435

The numbers are as on 1st May 2013

So, in effect, Shashi Tharoor’s active are just 1.75 lakh Twitter users, not 1.75 million.  The prime ministerial candidate Narendra Modi has just 1.5 lakh followers, not 1.5 million. Varun Gandhi just has 15,000-odd  active followers.

In short, these numbers denote their actual sphere of influence. Except for Tharoor and Modi, these numbers are in thousands; in a country of a billion. And when you combine this to the fact that Twitter reaches only a certain class of people, it follows quite logically that extrapolating the influence/opinion of Twitter to the real world is not a great idea. Not yet.

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March 4, 2013 · 4:01 am

How Realistic is Chidambaram’s ATM Promise?

The Union Budget for 2013-14, presented by the finance minister of India, P Chidambaram, has been thoroughly analyzed by analysts, media and economists. Many have pointed out the fine prints, and there are loads and loads of analysis on what it would do to Indian economy, different sectors, and different sections of our demographics.

But in all these discussions that I have eagerly followed, I am yet to come across any comments on one of his promises: that every public sector bank branch would have an ATM by March 2014. This is what the FM said in his budget speech (see section 86)

Financial inclusion has made rapid strides. All scheduled commercial banks and all RRBs are on core banking solution (CBS) and on the electronic payment systems (NEFT and RTGS). We are working with RBI and NABARD to bring all other banks, including some cooperative banks, on CBS and e-payment systems by 31.12.2013. Public sector banks have assured me that all their branches will have an ATM in place by 31.3.2014

I know it is neither as serious a matter for economists as current account deficit nor as interesting for everyone as an all women’s bank branch. It does not impact as many people directly as the tax slabs; neither does it have enough controversy in it to deserve comments from politicians.

Yet, this part of the speech got my natural attention, when I was listening to the speech live on TV. Having been a little familiar with the current numbers—thanks to my twin interests, payment systems and data journalism (lots of my tweets are around these numbers)—I was finding the target a little too ambitious. 

So, I got into some extraction of numbers and a quick analysis of those numbers. And here is what the FM’s promise translates into. 

By the end of March 2012 (that is end of FY 12), India had 67,466 PSU bank branches. That may not be such a huge number when seen in context with Indian population. But the number of ATMs that were attached to some of these branches (called onsite ATMs in Indian banking parlance), were much less. All PSU banks together had only 34,012 onsite ATMs. That number, of course, increased to 36,767 by December 2012.

The public sector banks have, on an average, added a little more than 3500 branches per year in the last five years leading to FY 12. So, even by a conservative estimates, the PSU banks are likely to have not less than 72,000 branches by the end of March 2014—the reference date for the FM for all of those branches having an ATM.

So, going by the current numbers, 35, 233 onsite ATMs need to be added between 31 December 2012 and 31 March 2014 (15 months) for all the PSU branches to have an ATM. That is almost doubling (96% growth, to be precise) the onsite ATM base in PSU banks.

Do you think it is realistic? Especially, when you consider that between March 2007 to March 2012, they have added 23,723 onsite ATMs. And there is no major acceleration considering in the nine months after that—that is between March 2012 to December 2012—they have added only 2755 onsite ATMs.

So, there are only three possibilities. One, I am terribly wrong somewhere. Two, there is something happening inside which we don’t know. And three, the FM has just been carried away without caring too much to be realistic. After all, it is an election budget.

The first possibility is inconsequential. The second possibility calls for a celebration.

The third possibility is  a dangerous proposition. I thought whether the Budget is good or bad in a year, at least the basic arithmetics gets done to put the ends together. 

There is one more probability. Maybe, the FM was wrong but only technically. Maybe, he meant that for every branch of PSU bank, there would be an ATM. What it means is that the number of PSU branches and no of PSU ATMs would be same, irrespective of where those ATMs are located. If we go by that number, the total ATMs (both onsite and offsite put together), they have 63, 739 ATMs. That means in the next 15 months, going by the same estimated number of branches (72,000), they need to add 8261 ATMs, slightly aggressive going by the last five years’ numbers but not exactly unrealistic.

So, the FM’s speech should have read

Public sector banks have assured me that for each of the branches that they have, they will have one ATM in place by 31.3.2014

And that is no less laudable goal to have. Since the FM talked about the ATMs in the context of financial inclusion, how does it matter if the ATM is “in the branch” or anywhere else?

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November 29, 2012 · 12:12 pm

Why A Hasty Approach May Derail the Direct Cash Transfer Scheme Completely

The UPA government has announced the Direct Cash Transfer (DCT) scheme, with an eye on the elections. As expected, the opposition has cried foul,  terming it “bribe” to the voters.

That is politics. And not really the topic of discussion here. In fact, this piece is not even about the economics of it. Economists agree that it is more efficient to pass on the benefits to the deserving directly through cash transfer than indirectly through subsidies. In any case, the government has been talking about it for quite some time. The Budget Speech in the last two years have referred to it explicitly. Many studies internationally have shown that they have, by and large, had a positive effect.

The points that I raise here are not about the politics or economics of DCT but the implementation hurdles that remain. Because even with this limited rollout, it could be the world’s biggest such project. Rushing in to implement may create problems that could shake off people’s confidence on the scheme. This could lead the opponents to project it as a faulty idea per se.

So, here are some of the issues.

1. What about those without the bank accounts? India has less than 25% of people in rural areas, who have access to bank accounts. How will they get the benefit? Does it mean that some of them—those who have bank accounts—will get it and others will not get it? That will be as anarchical as it could be. And the backlash could be severe.

2. How will subsidies and DCT co-exist, even if for a limited period? The government says that the scheme will be fiscal-neutral as it will replace subsidies. Practically, how will that happen, especially in fuel (kerosene), food, and fertilizers? Till all the people are in a position to get the benefit of DCT (today, those who do not have Aadhaar or bank account will not be able to get it), the government cannot touch the public distribution system. Which means it cannot effectively cut  subsidies. So, the mechanism has to be in the point of contact (ration stores and the like) to ensure that some beneficiaries do not avail both the benefits, which is next to impossible, as of now. So, the government will continue to run both for the foreseeable future. And surely, it will not be fiscal neutral.

3. What are the alternate channels of supplies? While it is good to say, on paper, that by getting the money directly, the beneficiaries, can opt to buy the products from anywhere, no one is clear what is that anywhere. In many areas, no alternative supply and distribution channel exists. So, how will cash help them?

4. How do you ensure that the money is spent on those products and services for which is intended? How does the government ensure that the money is spent on the products and services that intends to subsidize? In some countries, these subsidies are conditional and are given to women. There is no such plan in India. So, in many families, where men spend a lot of earnings on alcohol and such things,  more cash means more money to get drunk. The possibility is very real in India.

The issues raised here are not meant to argue against the implementation of DCT.

But the fact remains that changing the entire subsidy regime requires a lot of thought and preparation. The government started on the right note by appointing a task force to suggest the ways and means of implementing this.

The task force, headed by Nandan Nilekani, Chairman, UIDAI, submitted a detailed report, recommending creation of what it called a Core Subsidy Management System (CSMS) to implement the new subsidy regime.  The task force foresaw the gap that exists in the payment system reach and recommended this

Since it may take a while for the payment systems in the country to gear up for direct transfer of subsidies, an intermediate step may be considered where the subsidy difference is transferred to wholesalers/retailers in the first phase, and only later on to customers.

But the government has disregarded it and has announced DCT right away. Also, there is no news on where the rollout of CSMS has reached.

With all its good intentions, the government will have only itself to blame, if the whole idea backfires.

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November 9, 2012 · 7:25 am

Whatever Its Algorithm, Klout Must Fix Its Basic Technical Issues

There has been a lot of debate about Klout, its score and its relevance. While some are addicted to it, many others dismiss it outrightly. Most of the criticism has been about the way it measures influence or its algorithm;  its non-transparent mechanism; and its scant respect for individuals (you have a Klout score the world can see and all your information with Klout, even if you have never heard of it).

There has been some good articles on what exactly is wrong with Klout. Here are a few. Why I quit Klout, Why You should too… and The Problems with Klout. You can find plenty of such posts and articles and you may tend to agree with many of those concerns. Others argue that it is still experimenting and should be given some time before it is dismissed. This is especially true about the criticism Klout draws about its presentation of the topics of influence, which sometimes are more than funny. I myself am supposed to be influential about  games. I still cannot figure out ABC of games that my six year old son plays so dexterously.

But, most of the criticism about privacy, transparency and efficacy of its algorithm are subjective. The disastrous measurement of topics of influence, which many argue, is a proof of non-efficacy of its algorithm, can probably improve as it is something that is a first in the world.

But what I cannot digest at all is that something that claims to measure the influence of the entire populace of the world is struggling to get some of the basic things in place.  I am talking of its interface with Facebook. While Twitter updates and interactions get updated in 48-72 hours (And you think that is too slow?) the Facebook interface is pathetic. And I am being polite. Sometimes, it takes a FB interaction 7 days to show up as moments in Klout, sometimes it takes 10 days, sometimes more. As of today (9th November), my last FB interaction that shows on my interaction page is of 25th October and that shows on my moments page (which presumably goes to make up the Klout score) is of 23rd October.

What is more, it is not a complete list. Anywhere between 20-50% of those interactions never show up. After I double-checked that they were public interactions, I wrote to them and they admitted that, it was a problem. “We are working on this issue currently and hope to release improvements soon,” I got the reply on 9th October. That is exactly a month back. I am not being judgmental on the time they are taking. But what I am absolutely worried about is that in the meantime, they continue with presenting the score to the world, which by their own admission, is not based on correct data. One can keep arguing about the algorithm. But there is nothing to argue if your data captured itself is not accurate.

In the same mail, they tried convincing me that it is only display of moments  that is an issue and the FB interactions are still being captured for calculating the Klout score. When I wrote back refuting this claim, I got a single line reply that they are investigating it and “have taken note of your account”. This was on 10th October and nothing has happened. In the meanwhile, I have tried disconnecting and reconnecting Facebook and still have faced the same issues.

The problems that potentially arise from this are multiple. One, the Klout score is based on only partial and haphazard data of users. That puts a question mark on the basic offering itself: the score.

The delay also is an issue. If there is a uniform delay in Twitter, FB, and other networks, one can still justify it saying it is a delayed feed. But imagine trying to create score from your activities and interactions on Twitter on 1st, on FB on 15th and Google Plus on 30th and combining them to create a score. What will that denote? And how will you relate that to any offline/online events? It becomes a useless number.

While many dismiss Klout, I am still of the opinion that it should be given a chance. But rather than trying newer things and fancy toppings, it must get its basics right. There is no excuse for basic technical issues. I would say proceeding further without getting its data integrity right will be a dangerous path for Klout.

 

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October 3, 2012 · 11:24 am

RBI’s Payment Systems Vision 2012-15: Moving Beyond Regulation

The Reserve Bank of India (RBI) has released its Payment Systems Vision 2012-15. This is the central bank’s fourth such document. It published the first one in December 2001, detailing the payment system vision till 2003. Subsequently, it has continued publishing it every three years—in 2004 for 2005-08, in 2009 for 2009-12, with the latest one coming a couple of days back.

RBI had actually released a draft in June 2012 for comments. Based on the feedback, it has made some changes and released the final document.

A vision document by a regulator/policymaker achieves two great purposes.

One, it gives some clarity to the stakeholders on the direction of policy making, without the fear of flip-flops that we have seen in a few sectors such as telecom.  The actual rollout speed may be a little faster or slower, but it is not a guesswork.

Two, by making the vision clear to all, a good regulator can carry all stakeholders with itself to pursue a shared dream. That is progressive policy making.

This progressive yet cautious stance, that has won RBI appreciation worldwide, has helped India achieving significant success in converting a significant part of transactions to electronic transactions, though cheques still remain the biggest mode of payment, as far as volumes go.

It is interesting to examine how the vision has progressed. In its 2005-08, the vision was “the establishment of safe, secure, sound and efficient payment and settlement systems for the country”. So, it wan an intent, more than anything else.

The next vision document (2009-12) became bolder when RBI asserted that it wanted to “to ensure that all the payment and settlement systems operating in the country are safe, secure, sound, efficient, accessible and authorized” . It was now no more an intent; it was a mandate it gave to itself as a regulator. It promised the nation to make it happen.

Also, with the UPA government focused on aam aadmi and social inclusion,  financial inclusion as an idea was taking strong roots among policy makers. That thrust saw RBI adding “accessible” to its Payment Vision. It was sort of a passive intent towards inclusion.

That passive intent has become a proactive stance in the current vision statement as it adds the word “inclusive” to the vision. Financial inclusion initiatives have progressed a lot between then and now.

But that addition was along expected lines. What is more noteworthy are the addition of interoperability and compliance.

When RBI released the draft vision in June, the mission statement read something like this: To ensure payment and settlement systems in the country are safe, efficient, interoperable, authorised, accessible, inclusive and compliant with international standards.

There was a separate vision statement (a long-term goal perhaps): To proactively encourage electronic payment systems for ushering in a less-cash society in India.

But the final vision document released recently integrates the above goal to the vision statement itself and the final statement reads:

To proactively encourage electronic payment systems for ushering in a less-cash society in India and to ensure payment and settlement systems in the country are safe, efficient, interoperable, authorised, accessible, inclusive and compliant with international standards.

That is not surprising. In May this year, the then Finance Minister Pranab Mukherjee released a white paper on black money, that stressed on the need to move to electronic payments to curb the circulation of black money. Since then, RBI has taken a few measures such as slashing of debit card transaction charges that would help more and more people turning to electronic transactions.

However, RBI realizes that a less-cash society is still more of a dream than a vision and it is worded accordingly: to proactively encourage. But by making it part of the main vision, it is ensuring that it is a dream that it will pursue. It is not  daydreaming.

Some of the major visions that the document lists are

  • efficiency and effectiveness enhancement in the payment systems (a continuous process)
  • standardization, portability and inter-operability (a new objective)
  • development of infrastructure and integrated payment system (RBI has been pursuing this for some time)
  • managing risk in payment systems (has been an overall objective)
  • compliance with international systems (though RBI has taken a number of steps, this is for the first time that it has been inserted to the vision)
  • promote access and inclusion (A major driver of RBI’s economic policies, but has been inserted to Payment Vision for the first time)
  • payment systems literacy and visibility (goes with RBI’s thrust on increasing financial literacy)
  • new products and innovation (something that  has been dealt with RBI in various forms of late)
  • moving towards a less cash society (a dream worth pursuing)

With this Vision Document, RBI has played more as a visionary economic policy maker than just a smart and progressive regulator.

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September 24, 2012 · 7:58 am

Can e-Literacy and Illiteracy Co-exist?

In the midst of a slew of big-bang reforms announced by a recharged government in the last few days, a small but crucial cabinet decision has escaped everyone’s attention. The cabinet has approved the National Policy on Information Technology 2012.

And those who have covered it have highlighted either the big numbers—targets of three fold increase in IT industry size from $100 billion to $300 billion by 2020, creation of a 10-million additional ICT manpower pool—or the more ideological stances such as commitment to accessibility and open standards and open technologies.

One point that has gone largely unnoticed is the the goal of making at least one e-literate individual in every household. On the face  of it, it is very well-intentioned. Unlike IT industry size and open standards, this is something, when achieved, would benefit the common people directly.  As more and more government services become available electronically, a better comfort level in accessing those services directly without the help of any middleman will not just be more convenient for common people, it will give them a greater sense of power.

But there are many questions that need to be answered. Unlike a lot of other points, the policy document does not go into any more details on this.

So, what is e-literacy? How do you define it? How do you measure it? It is a laudable idea but is it practical to have it at a goal? And especially in a country with such a high illiteracy rate? What are the broad possible paths to proceed towards such a goal, even if we do not have exact answers to all the questions, right in the beginning?

(To set the expectations right, I am not really trying to answer these questions, but am raising them to set a broad agenda for discussion)

For one thing, it is good that the policy has used the phrase e-literacy and not the dated term computer literacy. We have gone past the era of computer. “e” is no more synonymous with computers.

But that very fact also means that we have to start with basic definition. The definition of e-literacy is still vague. In fact, the more used term in the international forums is the phrase “digital literacy”, which I believe, by and large, represents the same idea, as opposed to something like “computer literacy” or “media literacy” or “internet literacy” which are somewhat restricting.

The simplest definition of digital literacy is, I believe, the Wikipedia definition—the ability to locate, organize, understand, evaluate, and analyze information using digital technology. It involves a working knowledge of current high-technology, and an understanding of how it can be used.

The question is how to create measurables, action plans, and monitor the progress. Going by the international practices, the approach has mostly been through embedding it with traditional education or through integrated small programs. Both could be effective but the first approach is restrictive, as it excludes a large part of the population. But not impractical considering the goal is to have one individual e-literate per family. Integrated small programs are not scalable in a country like India and the progress is difficult to measure.

The challenge before India is that every one out of four people are illiterate. Going by the latest Census (2011) figures, the average household size in India is between 4 to 5. This, in pure arithmetic terms, means we have to make one-fourth of the population e-literate. However, since the current level of comfort with digital technologies and Internet is fairly high in a section of people in urban areas, the task of making at least one person e-literate is far more challenging than just achieving a number.

I believe  RBI’s National Strategy for Financial Education can be a good reference to start with as it addresses the question holistically; some of the challenges are similar; and the plan takes into account the Indian realities. In fact, it is not a bad idea to find the synergy between the two plans. Because, at the core of it lies a desire to achieve inclusion.

While today, no social inclusion is possible without financial inclusion, tomorrow, the same can be said about digital inclusion. Without digital literacy, there cannot be digital inclusion.

If we are starting now, we must take a holistic approach that takes into account the socio-economic factors while formulating any plan of action for e-literacy.

I am happy that the government has considered this to be important enough to include it as an objective in the National Policy on IT.

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September 18, 2012 · 12:20 pm

Sibal’s Supercomputer Dream: Putting It in Perspective

So, Kapil Sibal has decided on his new obsession for the next few months. And this time, it is not a still cheaper tablet or, for that matter, a new mobile operating system to challenge Apple or Android. The lawyer-turned-minister has set his sight on nothing less than building the fastest supercomputer on earth. Sibal has reportedly written to the Prime Minister detailing a plan prepared by the state-owned research & development outfit, Centre for Advanced Computing (C-DAC) to achieve this feat by 2017, at a cost of some Rs 4,700 crores.

Critics may link it to the speculation of his possible removal from HRD ministry in the imminent cabinet reshuffle. But to be fair to Sibal, reshuffle or no reshuffle, he is never short of big ideas.

Kapil Sibal is a dreamer. That is a good thing. Few of the politicians at his age are. And we surely need a few of those dreamers.

But that also is his problem. He still has the hangover of his extremely successful past as a lawyer, and often has excessive confidence in his own ideas and abilities. So, even when his basic intention is laudable, it is seen as maverick-ism. While he has the ideas, the dreams, the passion, and a rare sincerity of approach, he lacks the vision to realize those dream. All his dreams, from Right to Education to low cost laptop, are low on vision. They lack a practical approach (that is they do not take into consideration the ground realities), but more importantly, they are not aligned with the shared vision of the government. So, depending  on who is talking, these ideas get dubbed as wishful thinking to megalomania, and a lot many things in between.

Take the Aakash tablet.  Using affordable technology to enhance education quality is a great dream. The government stepping in to help in whatever way possible to the private sector to make that happen is also a good approach. But why should the government align itself to a single brand? A single project? No one could explain this to Mr Sibal.

Now comes the supercomputer dream. While we don’t know the exact details of the “blueprint”, based on whatever media has reported, it already sounds flawed. Here is why

1. The focus is purely on speed. It is a petaflops speed supercomputer that the minister and C-DAC want to build. The application is secondary. While performance is not a bad objective to have, spending Rs 4700 crore to just be on top of the table sounds a little too much. I am still refraining from dubbing it megalomania. But will not quarrel with those who do.

2. Why do the vision and nuts-and-bolts have to come together? Why should it be assumed that C-DAC will build it? The same question was asked in case of Aakash. No bias against C-DAC. They have great capability. But for those interested in facts, though, C-DAC Param has not featured among the top 500 supercomputers in the last two years.  But should not a thrust on high performance computing through policy initiatives be a better approach to encourage the building of such supercomputers than adopting a project?

3. The focus is entirely on the speed of one supercomputer. What India needs is many such supercomputers in all aspects of our economy: oceanography to identity verification; drug research to weather forecasting. Just for the record, in the last six-monthly list (June 2012) of world’s 500 fastest supercomputers,  India had just 5 of them, up from 2 in November 2011 list. In contrast, China had 68. And we thought China just scores in physical infrastructure, India is the IT superpower!

In 2007, China was just slightly ahead of us. In November 2007, China had 10 of the world’s fastest supercomputers, while India had 9.  In June that year, China had 13, while India had 8.

See how we compare now.

At one time, China was just a little ahead of India. Now, it has overtaken Japan to be at No 2 position

China comparisons apart, India’s supercomputing journey has not been anything laudable as such.  Based on the Top 500 data, India’s share of fastest supercomputers in the list has not really increased. The average number of India’s supercomputers in the Top 500, between 2003 to 2007 was 6.8, with as many as 11 featuring in June 2006. Between 2008-2012, that average has come down to 4.4 per list, with highest being 8 in November 2008.

INDIA’S PERFORMANCE

MONTH NO OF SYTEMS IN THE LIST RMAX (TFLOPS) TOP RANK ORGANIZATION
Jun 2012 5 303.9 58 CSIR
Nov 2011 2 132.8 85 Tata Sons
Jun 2011 2 132.8 58 Tata Sons
Nov 2010 4 132.8 47 Tata Sons
Jun 2010 5 132.8 33 Tata Sons
Nov 2009 3 132.8 26 Tata Sons
Jun 2009 6 132.8 18 Tata Sons
Nov 2008 8 132.8 14 Tata Sons
Jun 2008 6 132.8 9 Tata Sons
Nov 2007 9 117.9 4 Tata Sons

Even the top performance has not seen any great improvement. In November 2007, the world’s fastest supercomputer was about four times faster than India’s fastest supercomputer. In June 2012, that ratio had increased to 54. Yes, the fastest supercomputer on earth was 54 times faster than the fastest in India.

Indian computing has not been able to keep pace with the world.

All this is not to suggest that Indians do not have capability to build a fast supercomputer or the dream to build a fast supercomputer is misplaced.
Far from that, India needs a lot of effort in high performance computing so that Indian companies and organizations can build many such supercomputers for application in all areas. The country badly needs that. And if the fastest one happens to be Indian, that would be an icing on the cake. The icing, however, should not be confused with the cake!

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September 15, 2012 · 1:15 am

FDI in Multi-brand Retail: E-Commerce Will not be the Same

Whether it is a desperate attempt to secure a place in history or a genuine attempt to break policy paralysis, the Cabinet has taken the bold decision to allow 51% FDI in multi-brand retail, albeit with a provision that state governments would decide if they would like to allow it in their states.

Though many see this as a compromise for somehow moving ahead, one feels it is a masterstroke.

Firstly, it suddenly takes away the legitimacy from the opposition to FDI in retail by CMs like Mamata Banerjee and Narendra Modi. An average citizen of Delhi or Mumbai, who wants global brands in his city, is bound to ask, who is she to come in the way of our access to the global retail outlets?

Secondly, if the implementation happens well, soon the citizens of states that have not allowed FDI will see the difference it makes, as they visit cities in other states with such outlets.  It will be difficult to resist the “middle class” pressure for the governments then. Imagine, for example, in the National Capital region, Gurgaon having all the big global retail brands, with Noida not having a single one of them!

Finally, if the government and the supporters of FDI in retail, play it well, it should be sold to citizens as a farmers-friendly rather than large business-friendly policy which it actually is. With the farmers and the middle class supporting it, it will only be the small traders who will be opposing it. While they are a powerful community in states like Gujarat, UP, and Tamil Nadu, states like Karnataka, Odisha, and Bihar will not find any strong reason to oppose FDI. Most of India’s potential locations, such as Delhi, Mumbai, Gurgaon, Pune, Hyderabad, and Jaipur will have the new brands. The large cities that will be left out will be Chennai, Bangalore, Ahmedabad, and Kolkata.  Out of which, it will be interesting to see how things unfold in Bangalore, as the state has no logical reason to oppose it.

But the most interesting thing to watch will be e-commerce. Initially, the policy was vague about e-commerce. But in April this year, the government clarified that all the rules that are applicable to offline retail would be applicable to e-commerce as well. This clearly meant that all the plans of companies like Amazon had to be shelved. With the new policy change, they can enter in India. So, expect a new era altogether in e-commerce. Good luck, Flipkart!

But interesting will be to see how offline retail brands such as Wal-Mart or Tesco unfold their India strategy in this policy regime? Access to the top two cities and some of the other biggest markets will surely make India entry attractive. But once they enter and build their supply chain, especially the procurement network, there is nothing that is stopping them from selling online to the entire Indian population, irrespective of where the buyers are located. They will not violate any law as they will not have to open any “outlet” in those states.

Question is: will that happen? Will the politicians still not try to hound them? Or as many optimists hope, all this is meaningless discussion, as soon, most states will open up FDI in multi-brand retail.

In either case, a vibrant, more competitive retail market has implications for the e-commerce market.

The fun has just begun.

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August 7, 2012 · 9:49 am

Do We Need a Wikipal?

Politically speaking, the decision by Anna Hazare to disband Team Anna and take up the fight through electoral politics is both good news and bad. Good because it upholds the supremacy of electoral democracy—which was being pooh poohed by the likes of Arvind Kejriwal just a few months back. But what I feel bad about—and I am not a supporter of M/s Bedi and Kejriwal—is that an experiment to take an alternate route has failed. Yes, despite the power of Facebook and Twitter to support it this time around, as many of us never forgot to add. But as I have pointed out many times, including in this blog (Digital divide is now political…), reach of social media—or for that matter Internet—is too limited to fight a successful battle against the government and the system.

So, do I mean to say that we have little hope—as long as we have a democracy and as long as we, as a people, are not completely honest, we will have to tolerate this large scale, systematized corruption?

Not necessarily. But if we have to really find a solution to the problem of corruption, it has to be taking a different approach that fundamentally changes certain key parameters, not taking the same path again and again.

The big proposed entity called Lokpal—that is thought to be the panacea for all ills by Anna and his supporters—is nothing but yet another costly addition to the already overburdened system. If the Legislature, Judiciary, the Executive and the Press could not do it, by what logic do we expect yet another new body with its base in Delhi to eradicate corruption? The demand has been for more power to it. There is no logic given by anyone how more power itself will translate into more effectiveness in checking corruption. After all, the members would be people from amongst us. Why should one believe that they would be more honest than you and me—and our politicians and bureaucrats?

The problem is we are seeking a solution in the old, centralized model with a set of people having absolute power over everyone. Just that instead of being called MPs or ministers or secretaries or editors, they would be called Lokpals.

What if we take a fundamentally new approach? Instead of trying to check corruption by instilling fear of punishment after the act of corruption is done, what if we can ensure that corruption is minimized by making it more difficult to do it, i.e instilling fear of getting caught while doing it. That should be done by bringing in transparency.

Such transparency is possible only when there is easier access to information by a wider section, ideally members of the general public.

Two fundamental principles are cornerstones of this approach: one, instead of centralized systems, we go for decentralization; and two, instead of giving real power to people, we give it to a computer system.

Decentralization does not necessarily mean chaos. Wikipedia—despite whatever limitations it may have—has shown us how the collective power of people can be credible and dynamic at the same time. But to ensure that we prevent mobocracy and chaos, there has to be defined rules and processes (as in Wikipedia) and massive information infrastructure to store, forward, and process information. That requires a powerful (ideally distributed) computer system.

As everything becomes available to a wide set of people, the system will ensure that few dare to indulge in violating the rules. A person may not fear another person; but everyone fears the public.

We have seen that happening in cricket. The third umpire—though there is a person whose name is associated with it—is actually a computer. The replay is on a huge screen for the world to see. And technology ensures that there is no intended wrong decision. The same principle will work here.

In a technology-enabled system, the information itself will have the power to make everyone exercise restraint. A huge computing plaform—lets say a supercomputer—can, on a continuous basis, monitor for exceptions. There can also be ways and means to lodge anonymous complaints by the whistle blowers. Initially, people may misuse it to trouble opponents, but soon, the system will take care of itself. If the processes and technology are good, a false complaint will result in calling out the bluff. By moving from an investigation mode to a prevention mode, the system itself will become more “less corrupt”. There will be experts, advisors, information analysts—from any walk of life. But the power will not lie with them; it will lie with the computer in particular and the whole system in general. The system would be fault tolerant and designed to learn from experience.

Of course, any such system can be effective only when there is a lot of information generated electronically. That means a lot of government processes need to be automated. Thankfully, that is increasingly happening. That will supplement the reactive mechanism of the Wiki model by a proactive check on processes and exceptions. In such a scenario, RTI would be seamless and would be like a Google search.

Instead of instilling fear of punishment after the corrupt act is done, it would instill fear of exposure while doing corruption. So, not only would one get caught but would get caught before he/she gets any benefit out of that.

Such a system will ensure the following

  • Any exception is caught and reported, almost in real time
  • All information is stored in multiple locations so if something that cannot be brought to public notice in real time because of sensitiveness of the issue, they can be exposed in future by the system. Remember WikiLeaks?
  • Ensure speed and efficiency in addition to transparency

By making all the citizens participate, we would give collective responsibility to everyone while rigorous processes with technology underneath ensuring that there is no chaos because of that. This will still not be able to eliminate corruption but will make it far more difficult to do corruption, thereby significantly reducing it.

What do we call such a system? Did you say Wikipal?

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