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 20, 2012 · 7:58 am

Why Indian Software Product Companies Need More than Ideas and Funding

There has been a lot of discussion around why India, home to some of the world’s largest IT services firms—and often dubbed as an IT superpower—has not been able to produce even one large independent IT product company.  Companies which have built some products have either remained small, closed down, sold themselves off, or have switched to services to sustain themselves.

Some of the reasons that have been offered as explanation are as follows.

Indians are not good at innovation. This is the most superficial explanation that you hear, usually from those outside the IT fraternity, with a limited understanding of this industry. This is flawed because of two reasons.

One, it makes an inherent assumption that building products require innovation while providing business solutions as services companies to enterprises do not require  innovation.

Two, by labeling Indians as not good at innovation, it fails to explian how Indians have built extremely successful product companies in the United States and how they have excelled in product management and other so called innovative functions in large non-Indian technology companies.

Indians are risk-averse. Well, there is some truth in the statement. The services business worldwide, because of various reasons, is  fragmented and that gives a chance to smaller companies to remain small and still make money. Usually, not so with product companies.

After the success of TCS, Infosys, and Wipro, many smaller companies in India positioned themselves along similar lines and started offering services using cheaper manpower. Since the demand was high, they managed to survive, without taking too much of risk. Since the major investment often were done after winning a contract, it was fairly de-risked. The presence of large number of such companies in India has given an impression that Indians do not take risks and and follow something that is tried and tested. But let us not forget that it is because a few companies took the risk initially, others could cash in on the wave.

In any case, while the statement does manage to explain, to some extent, why too many companies have not entered the product business, it still does not explain why those who have, have not been able to succeed much.

There is no ecosystem. Most of those who have tried their hands in creating products believe that India does not offer a supportive ecosystem. They are not exactly off the mark.

India does not offer any major incentive for creating IP. The demand from local market is not very strong, unlike in some other countries. Further, the services branding is so strong that few VCs/investors back a company which wants to play long term in products. If many of them do invest in some product start-ups, it is for quickly selling to large technology companies.  They are always pushing the start-ups for maximizing revenues in a short time, not always a great way to create long term value.

All these factors have created some hurdles for product companies, feel those who want to change this. I think they are right.

But to be sure, it was the same scenario when services business started. Indian government has always been late to step in, if at all. The local demand was absent. And there was little funding. In addition, there was no skilled manpower. But Indian companies started at the low end by tapping the Y2K opportunity and slowly climbed up the value chain.

So, while it is true that a supportive ecosystem would absolutely help the growth of India as a product hub, it is difficult to believe that itself would kickstart the product revolution.

Indians are not good in marketing. Many believe that Indians, in general, lack in marketing capability and products require far more marketing skills than services, which survives on cold calling and sales efforts.

I am not sure whether I agree with this statement.

Some Indian marketing ideas now serve as global case studies. Further, assuming, for a moment, it is true I believe, it is too tactical a thing to offer as a reason for  lack of product success stories from India. Indians are not exactly known for following systems, processes and standards. But Indian IT services companies lead the world in quality, standard practices, and creating systems and processes. Something like this can always be learned.

There have been laudable efforts in recent years such as NASSCOM Product Conclave and the formation of ProductNation. I am sure they cam surely address some of these gaps such as lack of ecosystem, help the companies in marketing and market the idea that India has everything to offer world class products that it has already done in a few areas such as banking. In core banking, for example, a majority of top providers are either Indian or have an Indian genesis.

I have my own reason to offer. Again, I would like to clarify that I offer it as yet another reason and would not claim to be the only/principal reason. I call it lack of user/product centricity.

If we look at history, we would find that while India was the place that was home to great ideas/abstractions/philosophies/sciences—such as concept of zero, algebra/geometry, astronomy, Ayurveda. Our neighbor China has always been known for inventions and discoveries of tangible things—such as magnet, tea, paper, silk.

Is it just co-incidence? I don’t think so. Our domination in modern days—India in services and China in products—stems from the same differences that existed a few hundred years back.

And you can tell this from your experience. During one of my flights from San Francisco to Seoul (some time around 2005-06), I met the owner of a  small Californian garment manufacturer, who had outsourced to a unit in China. He had come to India once to do preliminary survey but went back a little confused. What he told me can be a pointer to possibly what we do not have. I will not use the word “lack”. It is just a different way of looking at things.

He told me when he went to China and started talking to prospective partners, the discussion steered towards the type of garments he manufacturers, who they are meant for, quantity of manufacturing and so on. He was perfectly comfortable with those  queries.

In India, he was asked questions about how many people he would like to employ, what is the cost of production there, what is the saving that he is expecting, even before they asked him about his users/products. He did not have clear answers about many of those questions and left confused.

When I met him, he did not have any concrete plans for India but he had not given up on the idea. He had hope that he would come back one day. For some reason, he believed, Indians could do it better. The only tangible reason I could gauge from the conversation is this: if they are designing so well for Bollywood, they can do a great job!

I think we all have faced similar situation. If you talk of a new business idea, the discussion here steers more towards business models, funding, marketing challengers. Rarely do we go into things like users and and the actual products!

Frog Design, owned by Aricent, a company with Indian genesis, opened a development center in India, but decided to open its design studio in China. The reason was the same.

This is also what separates an application development for a client and a product development. While the technology and development process are similar, in a typical ADM project, the client briefs the specification. The same is the case with outsourced product development, where Indians have succeeded significantly. In a commercial product, the firm has to do its own user research to decide the features.

One may debate on whether a Steve Jobs of way of deciding for the user or a Nokia/Samsung way of detailed user research is better, but the commonality in both is that the user is foremost in the minds of the designers. Without that, creating a great product may only happen as an accident, once in a while!

Many would argue that B2B product development is different. I would disagree. While B2B means the user research cycle may be a little shorter, it  nevertheless requires the same user centricity that  any B2C product requires. You are finding about the user and designing accordingly. You are not designing to a specification.

The difference is subtle but crucial.

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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 28, 2012 · 9:24 am

Retail FDI is not just about Farmers, Consumers and Traders

The much-awaited policy decision to allow foreign direct investment (FDI) in multi-brand retail has become the most high profile reforms measure announced by the UPA government. It has not just been a booster shot for the UPA government—which seemed to be doing nothing right just a few weeks back—it has shifted the debate from corruption and policy paralysis to reforms, with businesses and middle class now finding themselves on the side of the government.

But what is the issue about? In short, those who support it argue that it will not only give consumers more choice (and hence more power), it will fetch better prices for farmers. Those who oppose it primarily argue that it will kill the small traders—the kirana store owners. So, the debate has essentially become one with small traders’  interest on one side and farmers’ (and to a smaller extent consumers’) interest on the other.

But here, we are missing out a really, really big point.

Wall-Mart is the largest civilian employer in the world, with more than 2 million employees. Tesco is the largest private sector employer in the UK. Woolworths and Wesfarmers are the two largest employers in Australia. Carrefour is one of the largest employers in the world, though because of its distributed business, it is not the largest employer in its home country, France. Sears, Target, Home Depot all feature among the largest employers in the US.

Wall-Mart employs more than two million people globally. In the US alone, it has 1.4 million employees—that is a little less than half a percent of the total US population. Tesco employs more than 500,000 people and Carrefour some 475,000 people. Both Woolworths and Wesfarmers in Australia employ more than 200,000 people each. Together, that is a little less than two percent of Australian population.

And how many employees does Futures Group—the largest retailer in India, a country of 1.3 billion people—employ? Just about 35,000 including its insurance and other businesses.

If you consider this aspect, there is not much to debate. The employment generation potential of organized retail sector is immense. And potentially widespread.

When IT came as a big bang service industry to India, it created a big employment opportunities. But that was restricted to a certain section of the society—the engineering graduates. And it created jobs in a few locations. The BPO industrt democratized it by providing opportunities to graduates, took the action to tier two cities, and reduced the time to impart right skill to these people to make them productive. Retail is the next logical wave. It will further democratize the organized services sector by  creating the jobs for those who have had some high school education, who can speak local language and maybe have some working knowledge of English. And the time to provide skill training to make these people productive reduces further.

The case of big box retail, hence, is justified, looking at it purely from an employment generation perspective.  It is sad our politicians and public commentators are missing the point.

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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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September 4, 2012 · 11:31 am

Officially Open: India Launches Open Data Beta Site

India has finally launched the beta version of its open data site, data.gov.in. The site is part of the country’s plan to provide open and transparent access to data collected by various government departments and agencies, as outlined in the recently formulated  National Data Sharing and Accessibility Policy – 2012 (NDSAP-12).

The stated advantages, as envisioned by the policy, include maximization of use of data, avoidance/minimization of duplication of efforts on collection, facilitating integration by leading to common standards, providing ownership information, faster and better decision making, and of course, equitable access to information by all citizens.

Ever since the then Federal CIO of the United States started in May 2009, many counties have launched similar sites. India is the latest country to join the bandwagon.

The data.gov.in site has debuted with 13 raw datasets provided by seven departments and four apps provided by four departments. As part of the plan, data management offices are being created in each of the departments to be headed by a senior official called data controllers. Five ministries/departments have already identified their data controllers, whose names are available in the site. These are Department of Public Enterprises under the Ministry of Heavy Industries & Public Enterprises, Department of Disinvestment under Ministry of Finance, Department of Fertilizers under Ministry of Chemicals & Fertilizers, Ministry of Food Processing Industries, and Ministry of Micro Small and Medium Enterprises. The departments will be responsible for uploading the datasets directly, for which NIC is helping them by providing training and technical help. It is conducting a workshop on 5th October focused on this.

India, however, is not a part of open government partnership, a consortium of more than 50 countries. The initiative was started by nine countries, including India, but India withdrew just before launch. India was reportedly “concerned about the Independent Review Mechanism” which opens participating countries for reviews by outsiders.

However, India has been supporting the open government community by helping create what is called an open government platform—an easy-to-use toolbox that allows smaller countries to go for similar portals without worrying about technical challenges. The platform was launched in last March.

The launch of data.gov.in marks a new chapter in governance. It is a pity that it has got almost no mention in the media, especially when corruption and the role of public institutions are being debated so intensely.

In the US, the opening up of government data to public has seen innovative applications being created by third party organizations using the data (maximizing use).

Many say a more laudable goal in India would be the avoidance of duplication of efforts and resources in collecting data. This, however, is a lofty expectation to have from a transparency initiative like this, because it is not lack of availability/knowledge but personal ego battles and/or lack of coordination between departments that are the reasons for this duplication of efforts and resources. A recent example is the tussle between Home Ministry and the UIDAI on collecting data for National Population Register and Aadhaar.

But the private sector, academics researchers, and NGOs/advocacies can surely benefit from getting easy and timely access to government collected data. With analytics and data vizulazation becoming the hottest areas in technology, an initiative like this could not have been more timely.

 

 

 

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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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