THROUGH THE AMAZON GANGES Amazon is on the offensive in India as it builds on its 10-year legacy in the market to create solutions that impact its global growth and the ecommerce sector itself Rs 150 www.businessworld.in RNI NO. 39847/81 I 21 OCTOBER 2023 THE ECOMMERCE ISSUE INTERVIEW: T. KOSHY, MD & CEO, ONDC +INSIDE: Manish Tiwary, Vice President & Country Manager – Consumer Business, Amazon India
www.businessworld.in RNI NO. 39847/81 I 21 OCTOBER 2023 CHAMPIONS OF CHANGE A look at leaders who are driving positive changes in society through social welfare initiatives and ESG practices
I n an extraordinary display of proactive governance and visionary leadership, Uttar Pradesh has emerged as a beacon of economic transformation in India. The state’s relentless efforts to boost its economy have not only elevated its investment landscape but also firmly established it as a frontrunner among its peers. Thanks to the unwavering dedication of Chief Minister Yogi Adityanath’s administration, Uttar Pradesh has surpassed many states in terms of investment growth and capital inflows. A pivotal indicator of this remarkable transformation has been the state’s substantial rise in its share of the total cost of projects approved by banks and financial institutions. Once again, Uttar Pradesh stands tall, leading all other states in the total share of approved projects by banks and financial institutions, as confirmed by the August 2023 bulletin of the Reserve Bank of India (RBI). Uttar Pradesh continues to assert its dominance with a commanding 16.2 percent share for the fiscal year 2022-23, maintaining its pole position for the second consecutive year. These figures unveiled in the RBI bulletin underscore the fact that, under the visionary leadership of Chief Minister Yogi Adityanath, Uttar Pradesh has not only earned the trust of investors from across India and the world but has also garnered strong support from national banks and financial institutions. A TESTAMENT TO VISIONARY LEADERSHIP UNPRECEDENTED PERFORMANCE
During the Monsoon session of the legislative assembly, opposition leader Akhilesh Yadav had cast doubts on the One-Trillion Economy resolution and questioned the government’s roadmap. In a resolute response, Chief Minister Yogi Adityanath addressed each of the opposition’s concerns methodically. The RBI’s August 2023 bulletin not only vindicates Chief Minister Yogi’s arguments but also provides a robust retort to critics. Consistent Growth Trajectory in Uttar Pradesh A meticulous analysis of this report, rooted in the financial underpinnings of projects assembled by banks and financial institutions, along with expert calculations, reveals a noteworthy trend. Uttar Pradesh has demonstrated a consistent pattern of growth in its share of the total cost of projects approved by banks and financial institutions. Remarkably, the growth averaged at approximately 4.4 percent between 2013-14 and 2020-21. Subsequently, it surged to 12.8 percent in 2021-22 and reached an impressive 16.2 percent in 2022-23. This steadfast growth trajectory indicates that Uttar Pradesh has been continuously receiving robust support from the banking sector, ensuring a consistent influx of investments and projects. In stark contrast, other states have experienced irregular growth patterns. While some states witnessed sudden spikes in growth within a year, others encountered significant fluctuations in data between the periods of 2013-14 to 2020-21 and the years 2021-22 and 2022-23. Surprisingly, some states even witnessed a decline in growth instead of an increase. For instance, in Gujarat, where the average growth rate stood at 14.3 percent between 2013-14 and 2020-21, it declined to 14 percent in 2022-23, reflecting a marginal decrease of 0.3 percent. Similarly, in Odisha, the average growth rate from 2013- 14 to 2020-21 was approximately 4.5 percent, which dropped to 2.2 percent in 2021-22. However, in 2022-23, there was an unexpected upturn, reaching 11.8 percent. Maharashtra witnessed a decline in its growth rate, descending from an average of 13 percent between 2013-14 and 2020-21 to 9.7 percent in 2021-22, and further receding to 7.9 percent in 2022-23. In Karnataka, the growth rate averaged at 8.5 percent between 2013-14 and 2020- 21, but it declined to 6.9 percent in 2021-22, with a slight rebound to 7.3 percent in 2022-23. Similarly, in other states, the growth rate dwindled from an average of 9.4 percent between 2013-14 and 2020-21 to 4 percent in 2021-22 and 5.5 percent in 2022-23. These fluctuations underscore the exceptional stability and growth witnessed in Uttar Pradesh’s economic landscape under the visionary leadership of Chief Minister Yogi Adityanath, firmly establishing the state as a trailblazer in economic transformation. Investor Trust and National Support Uttar Pradesh’s incredible economic performance is a testament to the trust it has garnered from investors both within India and on the global stage. Chief Minister Yogi Adityanath’s administration has tirelessly worked to create an environment conducive to investments, and the results are speaking for themselves. Businesses and investors alike are flocking to Uttar OPPOSITION’S DOUBTS ADDRESSED AND VINDICATED Chief Minister Yogi Adityanath holding meeting with officials chalking out strategy to take UP to greater heights Chief Minister Yogi Adityanath felicitated an entrepreneur
Pradesh, recognizing the state’s potential as a hub for growth and prosperity. The state’s strategic location, coupled with a massive consumer base, has made it an attractive destination for industries spanning manufacturing, technology, and agriculture. Uttar Pradesh’s leadership understands that economic growth is not a mere statistic but a pathway to improving the lives of its citizens. As such, the government has implemented policies and initiatives that promote ease of doing business, infrastructure development, and skill enhancement, all contributing to the state’s remarkable economic journey. Moreover, national banks and financial institutions have extended their unwavering support to Uttar Pradesh’s economic transformation. The RBI’s bulletin highlights this support through the substantial share of approved projects in the state. This partnership between the government and financial institutions is essential in ensuring that projects are adequately funded, allowing them to thrive and contribute to the state’s overall economic growth. A boost in economy Over the past half-decade, the Yogi Adityanath-led government in Uttar Pradesh has exhibited unwavering commitment to fortifying the state’s economy. Through a series of strategic measures aimed at streamlining governance, expediting business decision-making processes, improving business convenience, and enforcing regulations effectively, the government’s resolute efforts have borne fruit. The tangible results of these endeavors became strikingly apparent during the recently concluded Global Investors Summit held in February 2023. The summit witnessed a staggering influx of investment proposals, collectively valued at a whopping Rs 36 lakh crore. This resounding vote of confidence from investors, both domestic and international, reflects a growing enthusiasm for Uttar Pradesh as a premier destination for business ventures. The allure of Uttar Pradesh as a business hub has prompted a significant number of investors to contemplate setting up their ventures within the state’s borders. In response to this heightened interest, banks and financial institutions have been swift in extending their support by expediting project funding approvals. This proactive stance is poised to stimulate the rapid realization of these investment proposals, bolstering the state’s economic landscape. As these investment initiatives gain traction and materialize in the coming months, Uttar Pradesh is poised to set new benchmarks in economic growth. The increased confidence in his leadership serves as a testament to the state government’s resolute dedication to fostering economic prosperity in Uttar Pradesh. YOGI GOVERNMENT’S STEPS TOWARDS WHITE REVOLUTION The Uttar Pradesh government, led by Chief Minister Yogi Adityanath, has taken a significant step to ensure fair prices for milk producers and the availability of quality milk to the public. They have decided to lease six state dairy plants for a period of ten years. These selected plants include both shutdown facilities and those not operating at full capacity. This move aims to strengthen the Pradeshik Cooperative Dairy Federation (PCDF) and benefit the Dairy Federation, semigovernment milk processing and marketing institutions, and dairy cooperatives. The dairy plants in Gorakhpur, Kanpur, Noida, Prayagraj, Azamgarh, and Moradabad will be leased while retaining ownership with the PCDF and milk unions. The lease will focus on management and operation without altering the plant’s basic structure. Currently, the annual turnovers for these plants range from 11 crore to 438 crore. The Request for Proposal (RFP) mandates that applying firms must have a minimum milk handling capacity of 50 percent of the plant’s capacity being leased. While the annual lease rent will remain constant for the first three years, it will increase by 5.50 percent from the fourth year onwards. Several prominent dairy companies, including Banas Dairy Gujarat, Sabar Dairy Gujarat, Mother Dairy New Delhi, and COMFED Sudha Dairy Bihar, have expressed interest in leasing these plants. The decision on the lease allocation will be based on the condition of each dairy plant.
UP has registered exceptional growth in exports, attributing this success to a well-guided leadership of Yogi Adityanath. Uttar Pradesh is rapidly gaining recognition as a top-tier destination on both the national and global stages. The groundwork for this progress was laid in 2018 when Prime Minister Modi inaugurated the state’s Geographic Information System (GIS). Another pivotal step was the initiation of the One District One Product (ODOP) scheme on the state’s first foundation day. This visionary scheme aimed to revitalize neglected sectors facing challenges such as pollution, power shortages, and neglect from various departments. By leveraging Uttar Pradesh’s strengths, particularly its Micro, Small, and Medium Enterprises (MSME) clusters, the state’s economy has experienced a significant resurgence. These clusters, once on the verge of decline, have seen remarkable growth over the past six years, resulting in a threefold increase in exports. Even in the face of challenges posed by the COVID-19 pandemic, this achievement solidifies Uttar Pradesh’s path toward potentially becoming a trilliondollar economy within the next five years. Uttar Pradesh is swiftly emerging as a major investment hub, excelling in banking services for entrepreneurs and attracting the highest number of tourists. The Chief Minister pointed out that systematic efforts across various sectors are now yielding visible outcomes. Achievements in Industrial Park Development The Chief Minister highlighted significant accomplishments in park development, with the MSME department spearheading the establishment of private industrial parks for the first time. This innovative approach opens doors for government incentives to be extended to three new parks, featuring plots ranging from 10 to 50 acres. Entrepreneurs purchasing land in these private parks will enjoy a 50 percent stamp duty exemption along with various other subsidies outlined in the MSME Policy 2022. The state government’s pioneering Pledge Park Scheme, the first of its kind in the country, is set to offer substantial advantages to entrepreneurs. Echoes of UP’s Vibrant Film City Reach Mumbai’s Shores Chief Minister Adityanath acknowledged the paradigm shift in Uttar Pradesh, from a region grappling with challenges just six years ago to a technological hub with North India’s first data center. The resounding buzz surrounding UP’s Film City has reached Mumbai, capturing the attention of directors, producers, and actors eager to participate in its growth. The state’s business-friendly environment is a key factor contributing to its newfound appeal. EXPORTS TRIPLE IN 6 YEARS
YEAR-LONG REGISTRATION FOR ENTREPRENEURS Under Chief Minister Yogi Adityanath’s guidance Uttar Pradesh has introduced a year-long opportunity for entrepreneurs to register both online and offline. With 96 lakh MSME entrepreneurs in Uttar Pradesh, the government offers accident insurance cover of Rs. 10 lakhs to those registered for GST with a turnover exceeding 40 lakhs, providing security against accidents or 100% disability related to GST. Additionally, a pioneering step involves offering a Rs. 5 lakh accident insurance cover to 90 lakh MSME entrepreneurs for the first time. Online and offline registration options remain available throughout the year, and the One District One Product (ODOP) initiative promotes local businesses without using government land. CM Adityanath also urged MSME entrepreneurs to participate in the ongoing skill mapping of migrant workers, an effort that has already employed 40 lakh individuals in their home districts and villages. Immediate registration for eligible entrepreneurs is encouraged. ODOP and Vishwakarma Shram Samman Garner National Recognition The Chief Minister highlighted the success of the One District One Product (ODOP) initiative launched in 2018 and the Vishwakarma Shram Samman Yojana introduced in 2019. These schemes have gained significant recognition in the country, honoring traditional artisans and promoting self-reliance. CM Adityanath expressed confidence in the global expansion of Uttar Pradesh’s diverse crafts, emphasizing the potential to captivate the world’s attention. A Visionary Leadership’s Impact At the heart of Uttar Pradesh’s unprecedented economic performance lies the visionary leadership of Chief Minister Yogi Adityanath. His administration’s commitment to development, innovation, and inclusivity has been the driving force behind the state’s success story. Chief Minister Yogi Adityanath’s leadership has been characterized by a relentless pursuit of excellence. His ability to envision a One-Trillion Economy for Uttar Pradesh and then work diligently to transform that vision into a reality is nothing short of remarkable. Under his leadership, the state has seen an infusion of investments in critical sectors, job creation, and infrastructural development that have propelled it to new heights. Furthermore, the government’s commitment to social welfare programs and the empowerment of all sections of society has created a more inclusive and equitable Uttar Pradesh. Initiatives such as skill development programs, women’s empowerment schemes, and support for marginalized communities have not only uplifted the lives of countless individuals but have also contributed to the overall social fabric of the state. In Conclusion Uttar Pradesh’s remarkable economic performance, as showcased in the RBI’s August 2023 bulletin, is a resounding testament to the state’s visionary leadership, proactive governance, and unwavering commitment to progress. Chief Minister Yogi Adityanath’s administration has not only silenced critics but has also set an example for other states to follow. The state’s consistent growth trajectory, driven by a surge in approved projects and investments, has solidified its position as a frontrunner in economic transformation. Investor trust, national support, and a conducive business environment have all played pivotal roles in Uttar Pradesh’s success. As Uttar Pradesh continues its journey towards becoming a One-Trillion Economy, the world watches with anticipation, eager to see how this transformation will impact economic landscape. GARBAGE-FREE CITIES The Yogi Government is taking proactive steps to achieve its commitment to the Swachh Bharat Mission by implementing a self-assessment system in every urban body across Uttar Pradesh. This initiative aims to make the state’s cities garbage-free and aligns with the Swachh Survekshan 2023 objectives. The self-assessment process, conducted through a dedicated Google form, will define evaluation parameters for Garbage Free City standards. Urban bodies are required to complete and submit their self-assessment reports by August 30. A review of these assessments will take place on September 4, ensuring timely and accurate submissions. Amrit Abhijat, Principal Secretary of the Urban Development Department, emphasized the importance of this initiative in empowering urban bodies to actively evaluate their progress and identify areas requiring attention. The self-assessment system, initiated in April, aligns with the government’s strategies for effective implementation, ultimately contributing to cleaner and more sustainable urban environments in Uttar Pradesh. CM with artisans during a function held at Lok Bhavan The Urban Development Department gets an award from President Draupadi Murmu in attaining 3rd place in Smart City Conclave.
Under Chief Minister Yogi Adityanath’s leadership, the Uttar Pradesh government has launched a comprehensive plan to upgrade healthcare facilities in the state. This initiative targets three prominent institutions: King George’s Medical College (KGMU) in Lucknow, Maharshi Vashistha Autonomous State Medical College in Basti, and Government Medical College in Gorakhpur. The government has initiated the meticulous implementation of this plan, supported by allocated funds and efforts to secure financial and administrative approvals. The primary goal is to swiftly address essential equipment, infrastructure, and other requirements in medical colleges and healthcare centers, ultimately ensuring ‘Optimal Healthcare Diagnosis’ for the state’s population. This commitment underscores the government’s dedication to providing quality healthcare and promoting universal development across the state. Investments in KGMU, Lucknow Significant investments include Rs 1.36 crore for a medical gas pipeline and oxygen plant at KGMU, Lucknow. Out of the sanctioned Rs 27.26 crore for this project, 95 percent (Rs 25.90 crore) has been disbursed. An additional Rs 4.28 crore under the GST head supports the construction of the Center for Orthopedic Super Specialties at KGMU. Revitalizing Government Medical College, Gorakhpur A comprehensive plan comprises 24 major construction projects at Government Medical College, Gorakhpur, with a budget of Rs 21 crore. Rs 2.47 crore has been released for a storage room and other facilities. This demonstrates the government’s commitment to universal development and healthcare diagnosis. Enhancing State Medical College of Basti Efforts are underway to expedite the construction of a new building at Maharishi Vashistha Autonomous State Medical College in Basti, with a budget of Rs 7.71 crore. Rs 2 crore has been allocated, with administrative and financial approvals in progress. Successful completion of these projects will improve healthcare diagnostics and facilities for the local community. UTTAR PRADESH GOVERNMENT REVAMPS HEALTHCARE ACROSS STATE Chief Minister Yogi Adityanath inaugurating Mission Niramaya to ensure good health for the people of Uttar Pradesh
On the occasion of Vishwakarma Jayanti, the Uttar Pradesh government demonstrated its commitment to fostering entrepreneurship by disbursing loans worth an impressive Rs 50,000 crore to Micro, Small, and Medium-sized Enterprises (MSME) entrepreneurs. This historic move establishes Uttar Pradesh as the first state in India to provide such a substantial sum of loans to entrepreneurs in a single initiative. Chief Minister Yogi Adityanath underscored government’s actions align with the vision of Prime Minister Narendra Modi to realize a ‘New India’ and highlighted the successful implementation of the ‘One District One Product Scheme’ initiated in 2018. Chief Minister acknowledged the pivotal role played by MSME clusters in the state’s economic landscape, citing their contributions to employment generation and increased exports. Uttar Pradesh witnessed a notable increase in the credit-todebit ratio, rising from 10 to 11 percent to reach 55-56 percent over the past 5-6 years. The government aims to further boost this ratio to 60-62 percent through initiatives such as largescale employment fairs, training programs, and the promotion of digital payments. The Chief Minister assured full support from the ‘double engine’ government in enhancing the skills of artisans blessed by Lord Vishwakarma. It is worth highlighting that the Uttar Pradesh government, under the leadership of Chief Minister Yogi Adityanath, has been consistently working towards empowering the state’s youth, women, businessmen, and small entrepreneurs to achieve self-reliance. Over the last six years, loans totaling Rs 66,000 crore have been disbursed, with Rs 16,000 crore previously distributed to 1.90 lakh handicraftsmen, artisans, and small entrepreneurs, and an additional Rs 50,000 crore distributed during this event. Uttar Pradesh Leads in Har Ghar Jal Scheme Implementation Uttar Pradesh has achieved a remarkable feat by surpassing Chhattisgarh and Meghalaya in the implementation of the Har Ghar Jal scheme, outperforming eight other states in the last seven months. Approximately 54 percent of rural families, amounting to 14,276,748 households, now have access to clean drinking water through tap connections provided by the state government, benefitting around 8 Crore people. The Yogi government aims to extend this access to 26,237,840 rural households by 2024. In July alone, Uttar Pradesh exceeded Madhya Pradesh, Chhattisgarh, and Meghalaya in providing new tap connections, marking a significant achievement. Since January 2023, the state has consistently outperformed others in granting new water tap connections, leaving behind states like West Bengal, Jharkhand, Rajasthan, Kerala, Maharashtra, and Assam. The success can be attributed to the government’s unwavering commitment to ensuring clean drinking water access for every citizen. The state’s dedication to the Har Ghar Jal scheme aligns with Prime Minister Modi’s clean water initiative, setting new standards and demonstrating unmatched speed in implementation. The Jal Shakti Minister praised the teams involved in projects like Namami Gange, rural water supply, and the Jal Jivan Mission for their contributions to this achievement. UP GOVT EMPOWERS MSMES WITH RS 50,000 CRORE LOAN Chief Minister Yogi Adityanath inspecting industrial products in a MSME unit
Prime Minister Narendra Modi lauded Uttar Pradesh twice during his Mann Ki Baat programme. Firstly, he celebrated the achievement of 1.25 lakh students from 800 schools in Varanasi participating in the G-20 quiz, setting a new world record. PM Modi also highlighted the Varanasi Milk Group, which is working on collaborative management to boost the income of milk producers and cattle herders, reflecting the White Revolution in UP. In addition, the Prime Minister congratulated and spoke with Pragati and Priyanka from Uttar Pradesh, who won medals in archery at the World University Games and participated in the 20 km race walk team, respectively. Chief Minister Yogi Adityanath expressed gratitude to PM Modi for acknowledging Uttar Pradesh’s achievements in Mann Ki Baat. He praised the new generation’s interest and participation in the G-20 quiz, calling it a reflection of the country’s development. PM MODI PRAISES UTTAR PRADESH ACHIEVEMENTS IN MANN KI BAAT ASHOK LEYLAND TO SETUP UNIT IN UP In a significant stride towards advancing India’s electric vehicle (EV) industry, Ashok Leyland, the globally renowned commercial vehicle manufacturer, has inked a memorandum of understanding (MoU) with the Uttar Pradesh government. This strategic move aims to establish an electric bus manufacturing unit within the state. Chief Minister Yogi Adityanath extended a warm welcome to Ashok Leyland in Uttar Pradesh, acknowledging the significance of a company of Ashok Leyland’s stature choosing the state as its investment destination. He emphasized the state’s vast population and its status as the largest youth capital in the country. “We are committed to providing security and facilities to all investors. Over the past six years, industrial groups that had previously hesitated to invest in Uttar Pradesh had begun expanding their operations in the state,” stated the Chief Minister. Dheeraj Hinduja, Chairman of Ashok Leyland, who was present at the MoU signing ceremony, expressed his enthusiasm, stating, “We are celebrating the 75th anniversary of Ashok Leyland this year. Signing this MoU with the Government of Uttar Pradesh to establish a manufacturing plant in the state underscores our commitment to shaping it.” He lauded the favorable administrative environment in Uttar Pradesh for industrial development and expressed the company’s readiness to fully leverage these advantages. Highlighting the efficiency of decision-making, Hinduja revealed that discussions on this investment commenced on August 10, and within just 36 days, everything had been finalized. He commended Chief Minister Adityanath and his team for their prompt actions and praised Uttar Pradesh’s transformation under his leadership. Regarding the proposed unit, Hinduja disclosed that it would commence operations within the next 18 months, following a phased approach to e-mobility initiatives. Chief Minister Yogi Adityanath was witness to historic signing of MoUs with Ashok Leyland
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4 | BW BUSINESSWORLD | 21 October 2023 ECOMMERCE IN INDIA has achieved an astonishing level of growth, demonstrating the outstanding leadership and resilience of major players like Amazon India and Flipkart. The enthusiastic embrace of digital platforms, the diverse array of products on offer and the evolving preferences of consumers – from small towns to mega metropolises – have been among the myriad factors that have driven this persistent expansion. This remarkable digital journey of the Indian marketplace is truly a cause for celebration. Our cover story in this issue tells the story of one of the country’s largest tech and ecommerce players, Amazon India. With over 100,000 employees, Amazon stands out as a mega employer in the private sector. It is committed to digitising 10 million small businesses, facilitating $20 billion in ecommerce exports, and generating two million direct and indirect jobs through the country. Manish Tiwary, Vice President and Country Manager of Amazon India’s consumer business, tells us that Amazon has already made significant strides towards these goals, having digitised over 6.2 million small businesses, enabled cumulative exports worth $8 billion, and created over 1.3 million direct and indirect jobs in India. He emphasises that Amazon’s focus on customer-centric innovation continues, particularly in catering to the needs of approximately 80 per cent of new customers hailing from the smaller towns. The company is dedicated to enhancing shopping experiences, delivery speeds, and overall fulfilment for this demographic, aligning with the diverse preferences of India’s next 500 million consumers. Amazon’s journey is reflective of the sector itself. As we watch India’s ecommerce sector evolve and mature, we can’t help but applaud the numerous opportunities and challenges it presents to both businesses and consumers. This dynamic space is set to captivate our attention in the years to come. Market research experts at Redseer give us yet another cause for celebration. They predict a substantial upswing in festive season sales this year, with a potential to surge by 20 per cent, to a staggering Rs 90,000 crore. Improved profit margins from larger purchases and a jump in brand advertising expenditure are expected to spur this explosion in festive purchases, which would indeed, be worth rejoicing after the tepid growth in ecommerce for several quarters. This festive season we can expect gross merchandise value (GMV) to soar beyond Rs 5 lakh crore. The Indian ecommerce landscape has witnessed a truly remarkable surge. The number of annual transacting users has skyrocketed 15-fold to reach 230 million this year, and we eagerly anticipate a minimum of 140 million online shoppers during the festive season ahead. Our cover feature documents these remarkable milestones in the journey of India’s ecommerce industry. Happy reading! Of course, we also bring to you all our regular features and columns. Happy reading and Happy Dussehra! ANNURAG BATRA [email protected] ECOMMERCE NOT A ZERO-SUM GAME EDITOR-IN-CHIEF’S NOTE
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8 | B W BUSINESSWORLD | 21 October 2023 MAILBOX YOUR COMMENTS TALK BACK www.businessworld.in RNI NO. 39847/81 I 07 OCTOBER 2023 THE EXPERIENTIAL With the resurgence in cinema, high-end experiences and personalisation at scale, the closestto-consumer sector is going full-steam Rs 150 ECONOMY UPTURN INSIDE:BSE’S DREAM RUN+THE WORLD CUP BOOST TO ECONOMY MANOJ ADLAKHA, Founder and CEO, RedBeryl Lifestyle Services SANJEEV KUMAR BIJLI, Executive Director, PVR INOX AJAY BIJLI, Chairman and MD, PVR Cinemas VIKAAS GUTGUTIA, FOUNDER & MD, FNP- FERNS N PETALS SOON A SUPERPOWER This refers to the editorial (“ Developed India By 2047?,” BW, October 7) . India aims to become a developed nation by 2047, the 100 anniversary of its independence. To achieve this, key factors include increasing per capita income, improving health parameters, reducing income inequalities, enhancing education, fostering social cohesion and reforming the criminal justice system. Despite challenges, India’s progress over the years has defied skeptics who doubted its ability to sustain democracy and overcome socioeconomic disparities. While other countries achieved faster growth due to their smaller size, India’s scale and diversity make its potential achievements significant. As a democracy, India has experienced political disruptions, but the peaceful transfer of power remains a hallmark. IMMUNE INDIAN INVESTORS This refers to the editorial (“ Protect Indian Investors,” BW, October 7). The Indian markets are experiencing a period of growth and optimism, with the BSE Sensex reaching new highs. Investor confidence plays a significant role in driving the market’s valuation of a company. However, recent events involving the Adani Group and allegations of short selling have caused value erosion and raised concerns. It is crucial to address manipulative actions like short selling to enhance corporate governance. The spread of misinformation and rumour can have a detrimental impact on investor confidence and the broader economy. Swift intervention by regulators, institutions, government and courts is necessary to protect stakeholders, ensure market stability and maintain India’s economic momentum. Upholding the rule of law and maintaining trust in institutions is essential for India’s progress as a developed and progressive economy. PALAK PANDEY, EMAIL BLIPP THIS PAGE TO GIVE US YOUR FEEDBACK INSTANTLY Submissions to BW |Businessworld should include the writer’s name and address and be sent by email to the editor at [email protected] or by mail to 74-75, Scindia House, Connaught Place, New Delhi-110001 KRITIKA NAG , EMAIL
ALLOCATION FUNDS MULTI ASSET DEBT EQUITY GOLD* GET THE ADVANTAGE OF A 3-IN-1 FUND GET THE ADVANTAGE OF A 3-IN-1 FUND 0923 Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Multi Asset Allocation Funds combine the advantages of equity, debt and gold* in a single scheme. Invest in them to diversify your portfolio and give your investments an opportunity to grow. Multi Asset Allocation Funds invest in at least 3 asset classes with a minimum of 10% in each. *They can take exposure to Exchange Traded Commodity Derivatives having Gold/Silver as underlying goods and such other goods as permitted by SEBI. Visit www.icicipruamc.com/note to know more about the process to complete a one-time Know Your Customer (KYC) requirement to invest in Mutual Funds. Investors should only deal with registered Mutual Funds, details of which can be verified on the SEBI website (www.sebi.gov.in/intermediaries.html). For any queries, complaints & grievance redressal, investors may reach out to the AMCs and / or Investor Relations Officers. Additionally, investors may also lodge complaints on https://scores.gov.in if they are unsatisfied with the resolutions given by AMCs. SCORES portal facilitates you to lodge your complaint online with SEBI and subsequently view its status. To know more, Contact your Mutual Fund Distributor | Visit: www.iciciprumf.com An Investor Education & Awareness Initiative
10 | BW BUSINESSWORLD | 21 October 2023 14 Jottings A shout-out to Corporate India as tax collections grow; Drug sales crawl; The unemployment rate is falling; AMD pitches for AI chip space, and more 16 Columns Minhaz Merchant (p. 16); Vikas Singh (p. 18); Srinath Sridharan & Steve Correa (p.20); Raghav Chandra (p.22); Amit Kapoor, Bibek Debroy & Aditya Sinha (p. 24); Srinath Sridharan (p. 28); Shubhranshu Singh (p. 30); Kiran Karnik (p. 75); Krishan Kalra (p. 76) 34 Invention of the Decade How Generative AI is poised to profoundly impact sectors like banking, high tech industries and life sciences,while contributing between $2.6 trillion and $4.4 trillion annually to the global economy 38 In Conversation VMware CEO Raghu Raghuram on the thought-provoking discussions that will shape the discourse surrounding Generative AI in the coming years 40 A Force to Reckon With A stellar stock market debut, robust financial performance, growth expectations and new drug launches – there is a lot going on for Mankind Pharma 44 AI at the Workplace A look at how artificial intelligence has become a pillar of positive growth for Microsoft in 2023, as it impacts the way people work and how companies become more efficient while unlocking creativity 48 In Conversation Sandip Patel, Managing Director for IBM India / South Asia region, on IBM’s vision for India, and much more AMAZON’S CUSTOMISED PLAYBOOK Cover design by SHIV KUMAR Still Bullish on India Newer challenges from the likes of ONDC and other external factors notwithstanding, Amazon remains bullish on India as a global growth market 62 CONTENTS VOLUME 42, ISSUE 26 21 OCTOBER 2023
21 October 2023 | B W BUSINESSWORLD | 11 The pages in BW Businessworld that are labelled BWi or Promotions contain sponsored content. They are entirely generated by an advertiser or the marketing department of BW Businessworld. Also, the inserts being distributed along with some copies of the magazine are advertorials /advertisements. These pages should not be confused with BW Businessworld’s editorial content. TOTAL NO. OF PAGES INCLUDING COVER 124 50 Sweet Success A look at how Triveni Engineering & Industries is seeking to replicate the success of its sugar business in its other verticals 54 Interview Nitin Bansal, MD, India & Head-Networks, Southeast Asia, Oceania and India, Ericsson on the 5G services and their growing usage in the coming years 58 Festive Fervour Experts are saying the upcoming festive season could prove to be a landmark for India’s booming ecommerce sector. A look at the factors fuelling this optimism 66 In Conversation Manish Tiwary of Amazon India on the company’s India journey, its distinctive strategies for the Indian market and its outlook on the evolving ecommerce landscape 70 Interview T. Koshy, MD and CEO of ONDC on the disruptive power of the Open Network for Digital Commerce (ONDC) in India’s ecommerce landscape 72 In Conversation Suhas Rajkumar, Founder & CEO, Simple Energy, which recently launched its first electric 2-wheeler in the country, on the company and its plans 78 Spicy Account An indepth look into the Indian spices market, and how it is set to grow to a whopping Rs 298,909 crore in size by 2028 88Y. Suresh Reddy 88John Paul 89Kalpana Viswanath 89Pradeep S. Mehta 90Rajesh Krishnan 91Ravi Sreedharan 91Ruby Ahluwalia 92Santosh Raosaheb Surve 92Sudha Srinivasan 106 Master Strokes Babu Thomas, Head of the IT Department, Federal Bank discusses the digital transformation at the bank in a chat with Shailja Singh, Director of Technology Sales at IBM India & South Asia 118 Gadget Review Is Transcend 16 HP’s best gaming laptop? Read our review of the latest offering from HP to know our verdict WINNER PROFILES 84Rajashree Birla 85Ahaana Bharat Ram 85Akshay Soni 86Anjali Makhija 86Anjlee Prakash 87R.V. Ramani 87Umang Mathur 82 THE IMPACT MAKERS Influential leaders and contributors in social welfare, initiatives and ESG, who have made a significant impact on society, driving positive and lasting changeapproach 121 Last Word Kishore Jayaraman of Rolls-Royce on sustainability, technological advancements in engine technology, and much more Photograph by BiancoBlue
Friday & Saturday October 20 & 21, 2023 Pullman, Aerocity New Delhi Shri Hardeep Singh Puri Hon’ble Union Cabinet Minister, Ministry of Housing & Urban Affairs, Ministry of Petroleum & Natural Gas, Government of India Shri Arif Mohammed Khan Hon’ble Governor of Kerala Dr Dipak C Jain Former Dean at Kelloggs School of Management, Northwestern University, Illinois, USA and currently Co-Chair of Academic Council of China Europe International Business School (CEIBS) Social Security and Aging Finance Institute Dimitris Manikis President, Europe, ME, Eurasia, Africa Wyndham Hotels & Resorts K B Kachru Chairman Emeritus & Principal Advisor, South Asia Radisson Hotel Group Nakul Anand Executive Director ITC Limited Puneet Chhatwal MD & CEO The Indian Hotels Co. Ltd (IHCL) Rajeev Menon President, Asia Pacific (excluding Greater China), Marriott International Inc. Dr Jyotsna Suri Chairperson & MD The Lalit Suri Hospitality Group Dr Binod Kumar Chaudhary Chairman & President Chaudhary Group Ajay K Bakaya Managing Director Sarovar Hotels And Resorts Zubin Saxena MD & Area Senior Vice President South Asia Radisson Hotel Group Anil Chadha Divisional Chief Executive ITC Ltd, Hotels Division Ranju Alex Area Vice President South Asia Marriott International Puneet Dhawan Sr VP Operations India & South Asia Accor Sunjae Sharma MD India & SW Asia Hyatt India Chander Baljee Chairman & MD Royal Orchid & Regenta Hotels Sudeep Jain MD, SWA, IHG Hotels & Resorts Nikhil Sharma Market MD, Eurasia Wyndham Hotels & Resorts Samir MC Managing Director Fortune Park Hotels Ltd Ashish Jakhanwala CMD & CEO Samhi Hotels Ltd JB Singh President and CEO InterGlobe Hotels Navjit Ahluwalia Sr VP & Country Head - India Hilton Vikramjit Singh President Lemon Tree Hotels Ltd Rahul Chaudhary MD & CEO CG Corp Global, and CG Hospitality Holdings Sanjay Sethi CEO and Managing Director Chalet Hotels Limited Philip Logan COO, Royal Orchid Hotels & Regenta Hotels Ratan Kant Sharma CMD, Triton Hotels And Resorts Pvt Ltd Kartikeya Sharma CEO - iTV & Rajya Sabha MP PRESENTING PARTNER POWERED BY CO-PARTNER CATEGORY PARTNERS CONSULTING PARTNER LIGHTING PARTNER BEVERAGE PARTNER & SUMMIT 2023 7 POWERED BY: PRESENTS C0-PARTNER: SILVER HOSPITALITY PARTNER HOST PARTNER KNOWLEDGE PARTNER CELEBRATION PARTNER MEDIA PARTNERS TRAVEL PARTNER ORGANISED BY INDIA ’ S FINEST SUNDAY NEWSPAPER
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JOTTINGS Photograph from BW Archives A Shout-out to Corporate India as Tax Collections Grow! I NDIA’S FISCAL JOURNEY h a s reached a remarkable milestone! The Union Finance Ministry was thrilled to announce that gross direct tax collections for the current fiscal year have surged past the Rs 11-lakh-crore mark, to hit an impressive Rs 11.07 lakh crore as of 9 October. This achievement is a testimony to the nation’s thriving economic activity, reflecting an outstanding 18 per cent increase compared to the previous year. It’s time to celebrate, as this signifies a consistently positive trend in revenue generation. Equally remarkable is the net direct tax collection, totalling Rs 9.57 lakh crore, showcasing a remarkable 21.8 per cent year-on-year growth. What’s even better is the timely refunds of Rs 1.5 lakh crore, providing the much-needed financial relief to taxpayers. Direct taxes, including corporate income tax and personal income tax, have exceeded ministry expectations. The government’s budget projection for 2023-24 was set at Rs 9.23 lakh crore for corporate tax and Rs 9.01 lakh crore for personal income tax. Notably, the net direct tax collections between 1 April to 9 October have already reached an impressive 52.5 per cent of the full-year estimate, totalling Rs 18.23 lakh crore. This extraordinary success in revenue collection is not just a testimony to our financial health but also our nation’s resilience. Corporate India has played a pivotal role in keeping the central government’s fiscal deficit at just 36 per cent of the annual target during the initial five months of the 2023-24 financial year. In the midst of various global headwinds like the war in West Asia, this resilience of India’s manufacturing and services industries augurs well for the Indian economy. —Ashish Sinha THE INDIAN pharmaceutical market has grown at a snail’s pace of 2.1 per cent in September this year, making it the fifth consecutive month of slow growth in sales. Pharmaceuticals sales had grown by 13.2 per cent in September 2022. Data from All Indian Origin Chemists and Distributors, a pharmaceutical distribution company, suggests that even this measly growth in sales had been supported by new drug launches and the 4.6 per cent increase in prices of medicines. Volumes growth of drugmakers declined by 5.6 per cent against a 4.7 per cent uptick last year. Therapeuticals that registered a major growth included anti-infectives and those for respiratory and pain, gastroenterology, cardiac and neurological disorders. Vitamins, anti-diabetics, gynaecological and dermatological products witnessed a decline in sales. Industry sources have pegged the growth rate in the pharmaceutical industry at mid-single digits for the 2023 calendar year at five to six per cent. Rating agencies pin hopes on FY2024, when the Indian drug market is expected to grow at a rate of eight to nine cent. — Shivam Tyagi Drug Sales Crawl 14 | BW BUSINESSWORLD | 21 October 2023 Photograph by Belchonock
21 October 2023 | B W BUSINESSWORLD | 15 THE UNEMPLOYMENT RATE IS FALLING DOWN SINCE THE NATIONAL Sample Sur vey Of fice (N S S O) launched the Periodic Labour Force Sur vey (PLFS) in April 2017, India’s population has increased from roughly 1.35 billion to 1.42 billion in 2023. A brand-new generation has walked into the job market since, both in the countr y ’s vast countryside and its exploding towns and cities. Notwithstanding the less than one per cent growth in population annually and the consequent rise in the Labour Force Participation Ratio (LFPR) – or percentage of people seeking jobs – the unemployment rate has shrunk! The LFPR has increased from 50.7 per cent to 60.8 per cent in rural areas between 2017-18 and 2022-23. In urban areas the LFPR has expanded from 47.6 per cent of the population to 50.4 per cent of it during this spell. The great news that emerged from the PLFS survey released on 9 October is AMD, A FORMIDABLE force in the semiconductor industry, is strategically bolstering its software capabilities. It has recently announced acquisition of Nod.ai, an AI startup, which could enable it to challenge Nvidia’s undisputed dominance in the AI chip space. Acquiring Nod.ai will enable AMD to streamline AI models for its chips, to be able to lure data centre operators and other customers. Nod.ai is known to have garnered significant funding for its technology. What sets AMD apart is its commitment to construct a robust software foundation. It had created an AI group earlier this year, now comprising about 1,500 engineers, with a keen software focus. The company intends to continue growing this team, adding 300 more hires in 2023 and beyond, making it clear that they’re in this for the long run. The message is clear – AMD is committed to bolstering its software capabilities and challenging Nvidia’s AI chip dominance. This intensified rivalry is excellent news for the tech industry and consumers alike, promising innovation, advanced technology and an array of choices. — Rohit Chintapali AMD Pitches for AI Chip Space that the number of jobs t o o h a v e e x p a n d e d , increasing the Worker Population Ratio (WPR) or percentage of employed Indians. In rural areas, the WPR increased from 48.1 per cent in 2017-18 to 59.4 per cent in 2022-23. In urban India the number of people engaged in gainful labour sprang up from 43.9 per cent to 47.7 per cent of the population between 2017-18 and 2022-23 I n r u r a l a r e a s t h e unemployment rate has shrunk from 5.3 per cent in 2017-18 to 2.4 per cent in 2022- 23. In urban areas the unemployment rate decreased from 7.7 per cent in 2017-18 to 5.4 per cent in 2022-23. Before we shout “Balle! Balle!” in joy, here’s a rider. The sample size of the PLFS survey was 4,19,512 Indians (2,43,971 in rural areas and 1,75,541 in urban areas) or 0.029 per cent of the 142 crore who call India their home. We hope that the next census will bear out these good tidings. — Madhumita Chakraborty Photograph by Tribhuwan Sharma
16 | B W BUSINESSWORLD | 21 October 2023 ANADIAN PRIME MINISTER Justin Trudeau is a dynast. His father Pierre Trudeau was prime minister of Canada from 1968-1979 and again from 1980-1984. Pierre Trudeau was a French-speaking separatist. He fought for decades to make Quebec, Canada’s large French-dominated province, a separate sovereign nation. The apple doesn’t fall far from the tree, as his son Justin has shown. Pierre Trudeau lost power in 1984 but Quebec’s bid to secede from Canada continued. A final 1995 referendum for an independent Quebec was defeated by the narrowest of margins: 50.58 per cent voting against secession and 48.42 per cent voting in favour. Quebec has subsequently reconciled to being a part of Canada. It is economically prosperous and Montreal is one of Canada’s trendiest cities. Vancouver in British Columbia on Canada’s west coast may have beautiful views but Montreal has undefinable cool. Justin Trudeau became prime minister in 2015. Now in his third term, Trudeau has been one of Canada’s most controversial leaders. While he cultivates a modern woke image and has packed his cabinet with ethnic minorities and women, a racist gene occasionally pops up. In 2019, Time magazine published photographs and videos of Trudeau in 2001, when he was 30, wearing blackface and brownface make-up at a themed party. Trudeau admitted the make-up idea was racist and apologised. More serious allegations have haunted Trudeau in his near-decade as prime minister, including corruption, nepotism and kow-towing to China. Trudeau is accused of shielding China over its interference in Canada’s 2019 and 2021 general elections. But the most serious charge against the Trudeau government is that it has turned a blind eye to the activities of Khalistani terrorists in Canada. The controversy over the murder of Hardeep Singh Nijjar, a proscribed Khalistani terrorist, is the tip of the iceberg. By alleging in Canada’s Parliament that the Indian government was “probably” involved in Nijjar’s murder, Trudeau is caught in a bind. He has produced no evidence to substantiate his charge of Indian state complicity in an extrajudicial assassination. If Trudeau cannot provide concrete evidence, the Opposition will use it to defeat him in the next general election. Trudeau’s popularity ratTime Up for Trudeau C Minhaz Merchant COLUMN MINHAZ MERCHANT The writer is the biographer of Rajiv Gandhi and Aditya Birla and author of The New Clash of Civilizations (Rupa 2014). He is founder of Sterling Newspapers Pvt Ltd., which was acquired by the Indian Express Group
21 October 2023 | B W BUSINESSWORLD | 17 politics. As Dipanjan Roy Chaudhury explained in The Economic Times: “Trudeau’s government has faced growing criticism over the past several months after media reports surfaced alleging that China sought to interfere in the 2019 and 2021 Canadian elections. Earlier this year, a Canadian law-maker stepped down from Trudeau’s Liberal Party after a media report raised questions about his dealings with China. Canadian MP Han Dong was accused of lobbying with a Chinese diplomat to keep two Canadians imprisoned in China. “Sources claimed that Trudeau is attempting to shield Chinese inroads into Canadian politics, including the Liberal Party structure, through a diversionary strategy. Canada’s economic situation has worsened through the year and the Leader of the Opposition is pushing for an early election, creating a big challenge for Trudeau’s political future.” The rupture in the relationship between India and Canada may heal over time. But until the Canadian government stops giving safe harbour to Khalistani terror groups, the fissures will deepen. The proscribed terror organisation Sikhs For Justice (SFJ) has threatened Hindus in Canada to leave or face attacks. Ottawa has given free rein to the SFJ whose criminal activities would have been banned in any other liberal democracy. Minor trade impact The economic impact of the India-Canada dispute is unlikely to be serious. Canada accounts for just 0.50 per cent of foreign direct investment (FDI) flows into India. India’s annual exports to Canada are a miniscule $4.10 billion, giving India a tiny annual trade surplus of $0.05 billion. The number of Canadian companies operating in India is, however, substantial. At last count, 600 Canadian firms had operations in India. Several Canadian financial and insurance companies as well as pension funds are active investors in India. The overall impact though is likely to be limited. Canada is not a member of any forum where India has a presence – BRICS, SCO, Quad, I2U2 (India, Israel, UAE and US) and RIC (Russia-India-China trilateral). The exception of course is the G20. Trudeau’s attempt to persuade the Anglophone countries – Britain, Australia, New Zealand and the US – to make common cause against India has proved unsuccessful. The four Anglophones have far too much invested in their strategic alliance with India as a bulwark against China. They have issued proforma statements on Trudeau’s accusations but refrained from any direct criticism of India. Britain in particular is alive to the Khalistani threat disrupting peace in the country. British Prime Minister Rishi Sunak was quick to declare that the Canadian issue will not affect India-UK relations. Australia, which too has a large number of Khalistani supporters, is sitting on the fence. No evidence has yet emerged to back Trudeau’s allegations against India’s role in Nijjar’s murder. As Canada’s Opposition leader Pierre Poilievre said coldly: “The prime minister hasn’t provided any facts. He provided a statement. And I will just emphasize that he didn’t tell me any more in private than he told Canadians in public.” ing has already plunged to an all-time low of 33 per cent. Trudeau, who runs a minority government, needs the support of the New Democratic Party (NDP) to stay in power. The NDP is headed by Jagmeet Singh, a known Khalistani sympathiser. Singh has attended pro-Khalistani rallies and had praised Nijjar despite his status as a fugitive. If Singh’s NDP withdraws support from the Trudeau government, it will fall. To appease Jagmeet Singh’s NDP, Trudeau has been forced into a gamble: accusing India for Nijjar’s death, despite the lack of evidence. A more sinister reason is Trudeau’s reported complicity with China over Beijing’s growing influence in Canadian Trudeau’s attempt to persuade the Anglophone countries – Britain, Australia, New Zealand and the US – to make common cause against India has proved unsuccessful. The four Anglophones have far too much invested in their strategic alliance with India as a bulwark against China Photographs courtesy: PIB
18 | B W BUSINESSWORLD | 21 October 2023 I N THE EXPANSIVE realm of the global economic landscape, India finds itself at a critical juncture, poised to achieve a seemingly unassuming milestone – a per capita income of Rs 2 lakhs. While this ‘numerical’ marker may not immediately capture global headlines, its implications for India’s trajectory is profound and equally multifaceted. Beyond its numeric value lies a narrative intricate in its details – a symbol of progress, an indicator of heightened economic dynamism. The pivotal question that emerges from this juncture is whether this can act as a catalytic force, propelling India into an era of sustained and accelerated growth. Moving beyond basics to aspirational spending: To grasp the significance of this pursuit of development and prosperity, it is essential to delve into the complex interplay of economic indicators and trends that weave India’s economic narrative. A Crux study of January 2022 claims that India’s per capita income had pierced the ‘inflection’ point of approximately Rs 1.75 lakhs. This inflection point is a pivotal factor in discretionary spending and plays a significant role in steering the wheels of rapid GDP expansion. The study provides an insight into the intricate relationship between per capita income and economic growth and underBy Vikas Singh The author is an economist and columnist scores the interconnection of economic progress. The conduits through which this relationship manifests itself are multifaceted and manifold, the study highlights. The Crux study cites several macro indicators, provides examples, and highlights the interplay. The strategic investment in infrastructure is the bedrock for progress. Similarly, the impetus of economic reforms will drive transformative change across sectors; and are important value drivers. Equally the steady ascent of both the manufacturing and service sectors, and the cultivation of innovation and entrepreneurship as vehicles for enhanced competitiveness will power the growth engine for decades. A deliberate focus on education and skill augmentation that empowers the workforce, are multipliers. Inclusive finance will empower marginalised segments of the population and augment consumption, triggering the virtuous growth cycle. Export-oriented policies, in tandem with soft diplomacy will propel India onto the global economic stage. The stability of macroeconomic policies, healthy democracy and demography provides the solid framework. Breathing life into the broader ecosystem: Together, these facets coalesce not only to elevate individual income levels but also to initiate a cascading effect – stimulating increased consumption and invigorating investment, thereby breathing life into the broader economic ecosystem. A Crux study of January 2022 claims that India’s per capita income had pierced the ‘inflection’ point of approximately Rs 1.75 lakhs. This inflection point is a pivotal factor in discretionary spending and plays a significant role in steering the wheels of rapid GDP expansion PAVING THE WAY TO SUSTAINED PROSPERITY COLUMN
21 October 2023 | B W BUSINESSWORLD | 19 But beyond that, policymakers must bring in transformational reforms. A case in point is the exclusion of farmers from the growth narrative. India needs farmers-focussed rural-oriented Agri policies. Similarly, our investment in societal multipliers like education and health is abysmally low. The impact is even lower. The lives of citizens are entangled within an overarching, and often inflexible administrative framework; and needs a citizen centric reform. Similarly, the judicial system is overloaded, and requires comprehensive and transformative reforms. Surpassing the USD $2,000 GDP per capita threshold signifies more than just an economic milestone – it possesses the potential to propel India into a realm of expansive growth akin to China’s trajectory. The parallel is striking. China’s rising GDP per capita was mirrored by an acceleration in Nominal GDP expansion, underscoring the pivotal role of growth rates. Beyond the static numerical value of GDP lies the dynamism of growth rates, signifying not just economic activity but also amplifying spending capacity. This surge in individual income has the potential to evolve into the cornerstone of India’s economic ascent, unlocking a panorama of prosperity that is not just fleeting but enduring and pervasive. Eco vibrancy, social mobility, and prosperity: In the grand tapestry of India’s economic evolution, the leap to a Rs 2.5 lakh per capita income stands as a pivotal chapter. It is a moment that beckons prudent policies, strategic investments, and a collective determination to navigate the labyrinth of complexities accompanying growth. It is a juncture that holds the promise of steering India towards a future marked by economic vibrancy, human flourishing, and lasting prosperity. Each step taken from this juncture onward will determine whether India’s economic narrative becomes a tale of transformative success, leaving an indelible mark on the global economic landscape. India stands at the precipice. Its decisions will shape its destiny. To achieve long-term GDP growth and increase per capita income, India must take a multifaceted approach involving cooperation from different sectors of the economy. In the dynamic economic environment, certain key factors become crucial in facilitating and speeding up this growth path: regularly assessing strategies, adjusting policies to changing conditions, and closely tracking progress. India’s economic transformation requires not just a straightforward progression but a proactive and flexible approach to shaping policies. Yet, this expedition towards prosperity is not devoid of challenges. The study highlights that India may continue to underperform its potential. Significantly prosperity and development may come at the cost of the 25 per cent excluded, and at the bottom of the socio-economic pyramid. Navigating through a complex labyrinth of obstacles: The study flags several headwinds even as India steers its course towards a ‘prosperous’ per capita income. It must navigate through a complex labyrinth of obstacles. Income disparities cast a shadow on the benefits of equitable distribution of growth. Population pressures pose challenges to efficient resource management and comprehensive infrastructure development. Gaps in education and skills hinder the unlocking of the full human potential. Bureaucratic complexities can throttle innovation and entrepreneurial drive. The agricultural sector requires a careful modernisation process to meet the demands of a rapidly evolving world. Similarly environmental considerations loom large in an era that values sustainability. Confronting these challenges necessitates a concerted and holistic approach – a collective commitment that prioritises investments in human capital. Policies and practices must fortify and expand infrastructure, cultivate inclusivity, foster innovation, and steer growth towards a trajectory that is both enduring and sustainable. Photograph by Denisfilm
20 | B W BUSINESSWORLD | 21 October 2023 gence, leadership ability or physical fitness. Traits such as determination, perseverance, self-discipline, and emotional intelligence play pivotal roles in shaping our journeys. Yet, it is the gradual erosion of these qualities through the accumulation of small concessions that often leave us feeling defeated. In the pursuit of our goals and dreams, it is not typically a single, cataclysmic failure that sets us back, but rather a series of seemingly minor compromises that collectively undermine our potential. Determination, that unwavering resolve to pursue our goals, serves as a compass guiding us through the maze of life’s challenges. It is the force that propels us forward when obstacles loom large, and hope seems distant. Without determination, the path to achievement becomes meandering and uncertain, like a ship adrift on a boundless sea. It is this very trait that enables us to set our sights on distant horizons and press on, one step at a time, toward our dreams. Angela Duckworth’s research suggests that when it comes to high achievement, grit may be as essential as intelligence. That’s a R VIKRAM SARABHAI, D the father of India’s space programme, defied scepticism and limited resources to establish ISRO. Despite challenges, he founded ISRO in 1969 and secured funding for India’s first satellite in 1975. His legacy lives on through ISRO’s achievements, proving that with unwavering determination, even a developing nation can excel in space exploration. The Indian Space Research Organisation went on to achieve numerous milestones, including the Chandrayaan and Mangalyaan missions to the moon and mars. On 23 August at 18:03 IST Chandrayaan-3 touched down making India the fourth country to land on the moon successfully, and the first to do so near the Lunar South Pole. In a world that often glorifies instant success and quick fixes, the sane voice of Jocko Willink, astutely observed, “Most of us aren’t defeated in one decisive battle. We are defeated one tiny, seemingly insignificant surrender at a time that chips away at who we should really be.” This profound statement sheds light on the intricate dance between human traits, personality, competition, stress, and resilience, more so today. Jocko should know. He is an author and a retired Navy Seal instructor. One of the mantras in the SEAL Teams is “Never Quit”. At the elite United States Military Academy, West Point, a cadet’s grit score was the best predictor of success in the rigorous summer training programme, ‘Beast Barracks’. Grit mattered more than intelliNever Give Up PEOPLE TALK By Srinath Sridharan & Steve Correa “The 40% rule is simple: When your mind is telling you that you’re done, that you’re exhausted, that you cannot possibly go any further, you’re only actually 40% done. The human mind is an amazing thing. It propels us forward and holds us back.” — The Navy SEALs
21 October 2023 | B W BUSINESSWORLD | 21 allows us to forge deeper connections, resolve conflicts amicably, and build a support network that becomes an essential pillar of our resilience. Yet, amidst the clamour of daily life, it is the subtle, imperceptible erosion of these qualities that often leaves us feeling defeated. The small concessions we make, the compromises that seem insignificant in isolation, gradually chip away at the foundation of our character. Skipping a workout, succumbing to procrastination, or allowing momentary frustrations to erode our emotional balance may appear inconsequential now. Still, over time, these tiny surrenders accumulate, altering the course of our lives. It is this gradual erosion that we must guard against, for it is not a single, decisive battle that shapes our destiny, but the sum of countless small choices. The modern world is a breeding ground for these surrenders. The incessant pressure to conform to societal norms, the allure of instant gratification, and the constant comparison with others through the lens of social media create fertile ground for the erosion of our resilience. In a culture that values shortcuts and quick fixes, the slow and steady path towards personal growth often goes unappreciated. Stress, too, plays a pivotal role in this incremental battle. The relentless demands of contemporary life can gradually whittle away at our resilience, leaving us emotionally and mentally drained. Yet, it is precisely through the crucible of stress that some of our most potent traits – such as adaptability, problem-solving, and courage – can be forged. When managed wisely, stress can be a catalyst for growth, teaching us to withstand the weight of adversity and emerge stronger. So, what qualities must we cultivate to fortify our resilience in the face of these relentless pressures? It begins with self-awareness, an understanding of our values, and an unwavering commitment to them. Resilience is the product of self-awareness, a steadfast dedication to your values, and the unwavering belief that challenges are opportunities in disguise. significant finding because, for a long time, intelligence was considered the key to success. She argues that “the gritty individual approaches achievement as a marathon; his or her advantage is stamina.” Perseverance, the tenacity to persist in adversity, is the unyielding spirit that carries us through life’s trials. It is the belief that every setback is a temporary detour, not the end of the road. Perseverance instils in us the resilience to weather storms, learn from failures, and emerge stronger, ready to confront the next challenge. It is the quality that separates those who surrender at the first sign of difficulty from those who emerge victorious. Self-discipline, often regarded as the linchpin of personal growth, is the inner fortitude that empowers us to make choices aligned with our long-term objectives. It is the ability to resist the allure of instant gratification, to prioritise the important over the urgent, and to stay committed to our values and goals. Emotional intelligence, the art of understanding and managing our own emotions while empathising with others, is the glue that holds our relationships and social fabric together. It enables us to navigate the complex tapestry of human interactions with grace and empathy. Emotional intelligence Srinath Sridharan is an author, policy researcher & corporate advisor Steve Correa is an executive coach, OD consultant & author The small concessions we make, the compromises that seem insignificant in isolation, gradually chip away at the foundation of our character. Skipping a workout, succumbing to procrastination, or allowing momentary frustrations to erode our emotional balance may appear inconsequential now. Still, over time, these tiny surrenders accumulate, altering the course of our lives Photograph by AlexShadyuk
22 | B W BUSINESSWORLD | 21 October 2023 NFRASTRUCTURE development is a prerequisite for realising our vision of reaching the milestone of US $5 trillion GDP by 2025 due to the multiplier effect it would have across sectors such as steel, cement, auto, real estate among others. Infrastructure projects require long tenure financing that can only be provided by debt funds. For long, the biggest problem with private sector participation in infrastructure projects in India has been the lack of suitable debt capital. Our bond markets were insignificant and clearly not deep enough to attract patient capital, such as from pension and insurance funds. While asset-liability mismatch held back the banks from going far into infrastructure lending, the huge NPAs of public sector banks (the closest equivalent to development financial institutions), caused a virtual dry down in private sector funding. As a consequence, in the last five years the government has hardly launched any PPP projects. Almost all the infrastructure projects today are essentially government funded – under schemes like EPC or HAM. While this has helped the speed of execution, it is not sustainable in the long run. At present, India has a BBB- rating from S&P Global Ratings for India’s creditworthiness, which is neither too good nor discouraging. However, the recently announced inclusion of India’s sovereign bonds into the important JP Morgan’s Government Bond IndexEmerging Markets (GBI-EM) index is a significant positive recognition of India’s economic credibility and thereby good news for its overall sovereign rating. It could also be the beginning of a new renaissance in private sector investment in infrastructure. It will also assist the government in its various fiscal measures to influence the economy. India will be represented and is expected to reach I COLUMN Benefits to the Infrastructure Sector from Inclusion in Bond Index the maximum weight of 10 per cent in the JP Morgan Global Diversified Index (GBI-EM GD). This inclusion will be phased through a 10-month period from June 28, 2024 to March 31, 2025, which means an inclusion of one per cent per month in the 2024-25 period. The key advantages that will benefit Indian infrastructure will be as follows: uFirst, as with any positive financial sector news, the overall attractiveness of India as an investment destination and of Indian infrastructure projects to foreign investors will improve. vSecond, inclusion in the GBI-EM GD will improve the rating of Indian sovereign debt as the index is tracked globally. wThird, and most importantly, since a total of 23 Indian sovereign bonds with a cumulative value of $330 billion will be included in the GBI-EM Global Index, there will gradually be higher demand for these bonds and so, the government will be able to raise money by offering lower interest rates. In effect, this will, theref o r e , r e d u c e the borrowing cost for the government. According to r e p o r t s t h a t have appeared, the price of the 10-year benchmark 7.26 per cent, 2033 government bond, Raghav Chandra Photograph by Blackboard373
21 October 2023 | B W BUSINESSWORLD | 23 account deficit, currently under stress due to rising oil prices in the international market, by channelling fresh flows in the debt market at reduced cost. The impact will be felt also on the corporate bonds. yFifth, another beneficiary of this inclusion will be the beleaguered Indian rupee. With lower cost of borrowing and expected inflows between June 2024 and March 2025 due to a higher demand for the rupee, the exchange rate will be supported against the US dollar and volatility in the global commodities market. The Indian bond market is worth about $2 trillion. Thanks to the fact that the government has removed restriction on foreign ownership of government bonds, there will be greater visibility and credibility for Indian bonds. Besides, India needs to spend about $1.4 trillion on infrastructure to realise the vision of emerging as a $5 trillion economy by FY2025. Yet scaling up investment in this sector remains a challenge with demand for funds far exceeding supply. In fact, according to some estimates, India’s infrastructure financing gap exceeds five per cent of GDP. The government had envisaged an allocation of Rs 111 lakh crore ($1.4 trillion), under the National Infrastructure Pipeline (NIP) in December 2019 for a five-year period between FY2019 and FY2025, covering diverse projects in roads, rail, ports, airports, power among others. The pipeline anticipated 80 per cent investment by the government and government entities and 20 per cent by the private developers. However, the private sector has not been able to meet its end of investment. The current development will help to increase the attractiveness of the increasing number of real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) formed for monetisation of infrastructure assets held in private hands. More infrastructure and developmental spending will lead to more overall demand, further growth and overall superior spin-offs all around for the economy. which settled at Rs 100.63, or 7.17 per cent yield within two days of the announcement, may approximate 7.05 per cent by mid-October. This is a definite positive relief for the government of India. Since Covid, the fiscal deficit in India has remained aggravated due to higher borrowing for meeting the Covid crisis and the lack of funding globally due to uncertainty. As a percentage of the country’s GDP and difference between the government’s total expenditure and revenue, the fiscal deficit stood at 6.4 per cent in 2022-23, and 6.7 per cent in 2021-22. In fact, as a result of the government’s heavy expenditure following the Covid outbreak in 2020, the fiscal deficit for 2020-21 had reached a figure as high as 9.3 per cent of the GDP. Considering India’s massive development and infrastructure aspirations, this ensuing cost reduction in borrowing will put the Indian government at an advantage as it plans to raise up to Rs 6.55 lakh crore through sale of bonds in the second half of 2023-24. xFourth, at a more structural level, this development will lower India’s cost of funding. It will help the liquidity and ownership base of Government Securities (G-Secs) and support to finance not only the fiscal but also the current The recently announced inclusion of India’s sovereign bonds into the important JP Morgan’s Government Bond Index-Emerging Markets (GBI-EM) index is a significant positive recognition of India’s economic credibility and thereby good news for its overall sovereign rating. It could also be the beginning of a new renaissance in private sector investment in infrastructure The author is a former Secretary, Government of India Photograph by Wittayayut
24 | B W BUSINESSWORLD | 21 October 2023 Urban Density, FSI, and the Quest for Sustainable Indian Cities URBAN DENSITY, the concentration of people within a specific urban area, is becoming a palpable concern, especially in countries like India where rapid urbanisation and population growth are intertwined. India’s metropolitan areas, like Mumbai and Delhi, are emblematic of this swelling issue. Prominent scholars such as Edward Glaeser, in his influential book Triumph of the City, have accentuated the pros and cons of urban density. He argues that while density can foster innovation, collaboration, and economic growth, it can also strain infrastructure, environment, and most crucially, housing. This is palpably depicted in movies like Gully Boy, where the protagonist’s life is significantly shaped by the cramped and constrained environment of Mumbai’s slums. The challenges brought on by urban density have invariably led to a serious re-evaluation of India’s urban planning policies. Specifically, housing constraints have become pronounced because of strict regulations tied to the Floor Space Index (FSI) and the Floor Area Ratio (FAR). Floor Space Index denotes the ratio achieved by dividing the total Built-Up Area (BUA) of every level by the plot area. To illustrate, an FSI of 1 on a plot of 100 sqm means 100 sqm of BUA. Similarly, FAR is a concept akin to FSI. An FSI value of 1 can equivalently be expressed as 100 per cent FAR. Typically, the building envelope is regulated by the Development Control Regulations (DCR) of a city, dictating the FSI, the maximum extent of ground the building can cover, the maximum height or number of floors permissible, required building setbacks and margins, mandated open spaces, minimum parking provisions, among other specifications. These measures, which dictate the built-up area relative to the size of the plot, have often been criticised for being outdated and restrictive, especially in ARTHSASTRA by Bibek Debroy, Amit Kapoor & Aditya Sinha Clockwise : Bibek Debroy, U Amit Kapoor & Aditya Sinha Photograph by Himanshu Kumar
21 October 2023 | B W BUSINESSWORLD | 25 the Indian context. Their inflexibility exacerbates housing shortages and often indirectly encourages unauthorised constructions. Reforming these metrics is essential if India wishes to develop sustainable and inclusive cities. Recognising and addressing these constraints, renowned urban theorist Jane Jacobs in her seminal work The Death and Life of Great American Cities highlighted the importance of adaptability in urban planning. Similarly, for India to tackle its urban density and housing challenge effectively, a paradigm shift in its approach to FSI and FAR regulations is imperative. In the early 1900s, the rise of skyscrapers and increasing population density in urban areas of the USA necessitated the regulation of building forms to ensure access to light, air, and to maintain public safety. This led to the introduction of zoning laws, with the 1916 Zoning Resolution in New York City being one of the earliest instances of such regulations. These laws were designed to control the height and bulk of buildings, ensuring that streets received adequate sunlight and air. Over time, these initial regulations evolved into the contemporary concepts of FSI or FAR. After World War II, the United States experienced significant urban expansion and economic growth, necessitating the need for evolved urban planning tools like land-use zoning and FAR to manage the profound urban development. India embarked on its journey of urban planning post-independence in 1947, feeling the imperative need for planned urban development as cities started experiencing population and economic growth. The Bombay Town Planning Act, 1954, marked the introduction of the first town planning Act in the country. India adopted the concept of FSI, understanding the benefits of standardised metrics to regulate urban development and strike a balance between built-up areas and open spaces, aiming for orderly growth, efficient infrastructure development, and prevention of unorganised construction. Over the decades, FSI became a pivotal component in the DCR formulated by different cities in India. However, it is crucial to acknowledge that the implementation and permissible FSI significantly vary across Indian cities due to the diverse nature of urban development challenges prevalent in the country. A report by NITI Aayog in 2017, titled India: Three Year Action Agenda, shed light on a pressing concern. The permissible FSI in Indian cities is remarkably restricted, with values oscillating between 1 to 1.5. This limitation has led to a conspicuous absence of towering structures in our urban landscapes. Taking Mumbai as an example, its geographic layout bears significant resemblance to iconic skylines like Manhattan and Singapore. Yet, Mumbai’s skyline remains stunted in comparison. One can’t help but realise that by granting a more flexible FSI, we can significantly amplify our utilisation of urban spaces, mirroring the growth and development witnessed in international counterparts. Further, FSI is known to significantly vary across different cities in India and even within the same city, reflecting disparities in developmental control. For instance, central urban areas often have different FSI limits compared to peripheral areas, leading to uneven development and land use. Moreover, several cities are undergoing rapid expansion, and builders are constructing buildings on the outskirts of cities to accommodate this growth. However, these outskirts are often not classified as urban due to the prevailing definitions of urban and rural areas, which are based on outdated criteria. Typically, the building envelope is regulated by the Development Control Regulations (DCR) of a city … These measures, which dictate the built-up area relative to the size of the plot, have often been criticised for being outdated and restrictive, especially in the Indian context. Their inflexibility exacerbates housing shortages and often indirectly encourages unauthorised constructions. Reforming these metrics is essential Photograph by MaxGoth
26 | B W BUSINESSWORLD | 21 October 2023 Bibek Debroy is Chairman, Economic Advisory Council to the Prime Minister. Amit Kapoor is Chair, Institute of Competitiveness, India & Lecturer, Stanford University. Aditya Sinha is OSD, Research, Economic Advisory Council to the Prime Minister The discrepancies in classification bring forth the urgent need to revisit and revise the definition of urban and rural areas in India. Many areas, despite showcasing urban characteristics such as high population density and predominant non-agricultural employment, are still classified as rural. This mismatch affects the application of FSI and hampers optimal land utilisation, leading to haphazard and unorganised growth. To resolve the issues arising from discrepancies in FSI and urban-rural classification, there is an imperative need to take three steps: u A comprehensive reevaluation and update of the criteria defining urban and rural areas to reflect the current realities and accommodate the evolving urban landscape in India. v A thoughtful revision of FSI limits to ensure uniformity and consistency across urban extents and outskirts, allowing for optimal and sustainable land use and development. wFormulation and implementation of inclusive urban planning policies that consider the expanding city peripheries and enable well-integrated and balanced development. Given the challenges presented by rapid urbanisation and increasing housing demands in Indian cities, the Government of India has acknowledged the crucial role of optimising FSI in facilitating urban development. Recognising this, various state governments are actively reviewing and modifying FSI regulations to align with the evolving urban landscape and developmental needs. Initiatives to ease norms have been notable, with states relaxing FSI norms, particularly in core city areas, aiming to promote vertical growth and accommodate the burgeoning population. Furthermore, the central government’s emphasis on affordable housing, especially under the Pradhan Mantri Awas Yojana (PMAY), has incentivised many states to offer additional FSI to developers, fostering the development of affordable housing projects. In addition to addressing housing needs, innovative approaches like Transit-Oriented Development (TOD) are being proposed, allowing higher FSI around transit corridors, promoting optimal land use and encouraging public transport usage to alleviate vehicular congestion. Regular consultations with urban planners, developers, and various stakeholders are being conducted to recalibrate FSI norms, ensuring harmonisation with the city’s infrastructural capacities and developmental aspirations. The integration of digital platforms in some states facilitates improved visualisation and management of city plans, including FSI allocations, contributing to more coherent and sustainable urban development. Moreover, the ongoing reviews of FSI regulations are increasingly considering environmental implications, ensuring alignment with eco-friendly practices and balancing development with environmental conservation. The ongoing urbanisation and city expansions in India necessitate a proactive stance by states in reviewing FSI in cities, as it’s paramount to achieving balanced and sustainable urban development. Floor Space Index being a crucial regulatory tool, determines the extent of built-up area permissible on a plot, impacting the urban density, land utilisation, and skyline. The varying needs of growing cities, with escalating housing demands, urban amenities, and infrastructural developments, warrant periodic assessments and recalibration of FSI norms. States must endeavour to address the discrepancies in FSI allocations to harmonise it with the evolving urban morphology and to mitigate the issues of haphazard developments and urban sprawls. Additionally, states should integrate environmental considerations, public infrastructure capacities, and urban resilience in FSI reviews to foster cities that are not only growth-oriented but also sustainable, inclusive, and resilient. A more nuanced and responsive approach to FSI could significantly contribute to shaping the cities’ future, enhancing the quality of urban life, and propelling overall urban progress. ARTHSASTRA by Bibek Debroy, Amit Kapoor & Aditya Sinha Photograph by Ritesh Sharma Photograph by Manoejp7
28 | B W BUSINESSWORLD | 21 October 2023 N RECENT MONTHS, the term “AI” has become a buzzword in technology and business circles, often used to describe a wide range of innovations. For those of us from non-tech industries, ChatGPT’s introduction a few months ago was the biggest trigger for our AIspeak. One of the common myths that AI is simply just automation + data, probably trivialises a field that has rich history, a rapidly evolving present, and a future with impossible possibilities and plausibilities. The concept of artificial intelligence has been around for over half a century. It originated in the 1950s when pioneers like Alan Turing and John McCarthy began exploring the idea of creating machines that could simulate human intelligence. Early AI systems were rule-based and had limited capabilities, but they sparked a fascination with the potential of machines to mimic human cognition. Over the ensuing decades, AI underwent significant advancements. Expert systems, neural networks, and machine learning algorithms emerged, each contributing to the field’s growth. Artificial Intelligence started to excel in areas like game playing, language processing, and data analysis. However, its widespread adoption remained limited due to computational constraints and the absence of vast datasets. The turning point came in recent years with the explosion of data and computing power. The availability of vast amounts of data, combined with more power ful processors and improved algorithms, allowed AI systems to surpass human capabilities in tasks such as image recognition and natural language understanding. This data-centric approach has indeed been a crucial component of AI’s recent success. ”Is AI just Automation + Data? That’s like saying humans are just bones + flesh. Sure, it’s an essential part, but there’s a whole lot of magic happening in the brain circuits!” Automation, often dismissed as a simplistic facet of AI, is, in fact, an essential element of its evolution. Artificial Intelligence’s ability to automate tasks is what sets it apart from traditional programming. Rather than explicitly instruct a computer on how to perform a task, AI systems learn from data and adapt their behaviour accordingly. This evolutionary leap from rulebased automation to data-driven adaptation is at the core of modern AI. While automation and data are foundational to AI, they represent only a part of its complexity. Modern AI encompasses a wide array of subfields, including computer vision, natural language processing, robotics, and reinforcement learning. The technical nuance behind why AI transcends the simplistic notion of automation plus data lies in its capacity for adaptability and autonomous decision-making. Unlike traditional automation, which follows pre-defined rules and instructions, AI I Is AI just Automation + Data? (A)muse & Musings By Srinath Sridharan
21 October 2023 | B W BUSINESSWORLD | 29 However, advances in machine learning, particularly deep learning, marked a turning point, proving the potential of AI in real-world applications like image recognition and natural language processing. This breakthrough reignited investor and industry interest, leading to a resurgence in AI research and development. The availability of vast amounts of data, increased computational power, and a growing community of researchers and innovators worldwide have further accelerated the current AI renaissance, fostering a climate ripe for groundbreaking advancements and transformative applications across various sectors. Sceptics often point to the concept of AI hype because they believe that the potential and capabilities of AI are sometimes exaggerated or oversold. In the rush to embrace AI, there can be unrealistic expectations set by proponents, leading to disappointment when AI systems fail to meet these lofty standards. Additionally, some argue that the term “AI” is used broadly to describe a range of technologies, from simple automation to complex machine learning algorithms, which can create confusion and misunderstanding. It is balanced worry that excessive hype can lead to misallocation of resources, inflated investment expectations, and a failure to address the ethical and societal challenges associated with AI. Amidst the discussion of AI’s technical intricacies and its remarkable progress, it’s crucial not to overlook the profound ethical implications that accompany this technology’s rise. As AI finds its way into everyday life, questions of fairness, accountability, and transparency come to the forefront. Concerns about algorithmic bias, data privacy, and the social consequences of automation-induced job displacement demand thoughtful consideration. Moreover, there’s a pressing need for the establishment of robust ethical frameworks and regulatory measures to guide the development and deployment of AI systems responsibly. Without careful attention to these ethical dimensions, the rush to embrace AI’s capabilities could inadvertently lead to unintended consequences and societal challenges that may overshadow its potential benefits. Artificial Intelligence is progressing so fast that even our most imaginative sci-fi writers are just trying to keep up. The pace of AI advancement is like trying to predict the weather in a tornado – we can hardly see what’s flying by, let alone what’s coming next! The writer is an author, policy researcher & corporate advisor While automation and data are foundational to AI, they represent only a part of its complexity. Modern AI encompasses a wide array of subfields, including computer vision systems, particularly those driven by machine learning and neural networks, have the ability to learn and improve from data without explicit programming. They can identify patterns, make predictions, and adjust their behaviour based on changing circumstances. This dynamic nature allows AI to handle complex tasks that go beyond the capabilities of rigidly automated systems, making it a versatile technology with the potential to revolutionise industries by solving problems that were previously deemed too intricate for automation alone. Moreover, AI’s ability to process vast amounts of data and extract meaningful insights goes beyond simple data handling, making it a powerful tool for decision support and innovation. The recent surge of activity in the field of AI globally can be attributed to a confluence of factors that have rejuvenated interest and investment. One crucial aspect is the end of what can be termed an “AI funding winter” that persisted for much of the two preceding decades. During this period, AI research and development faced challenges in securing consistent funding and recognition, partly due to unrealised expectations from earlier AI booms. Photographs by Phonlamai
30 | B W BUSINESSWORLD | 21 October 2023 I N MY OPINION the Unified Payments Interface (UPI) is as defining and significant for India as universal adult franchise or the green revolution. It has strengthened our society, polity, democracy, economy and global standing. It has shown us again that money is a social technology. In a cash hoarding culture, it has evidenced that money itself has no commodity value but rather its value emerges based on how it allows credit to originate, get transacted, recorded and settled. It is this social technology of transferable credit that is a primal force called money, or finance. In India UPI is revolutionising it. Within no time, it has transformed the Indian digital payment landscape and emerged as the default choice for money transfers, particularly smaller transactions. Consequentially, India has emerged as a global leader in payments, thanks to its next-generation real-time payment systems. Factors such as the proliferation of smartphones and widespread internet access have catalysed this transformation. According to RBI data, UPI transactions have witnessed a 428 per cent surge, soaring from Rs 2.9 lakh crore in July 2020 to Rs 15.33 lakh crore in July 2023. Unified Payments Interface transactions breached the Rs 1,000-crore mark in a single month for the first time in August 2023. India has topped the list for digital payments. Our payment volume is more than the sum of all digital payments made in the next four leading countries. Of all real-time payments made worldwide in 2022, nearly half were made in India. The “digital public infrastructure” as it Digital Payments – A Revolution of Consequence GUEST C0LUMN By Shubhranshu Singh, VP Marketing, Domestic & IB, Tata Motors, CVBU MARKETING ADVERTISING &
21 October 2023 | B W BUSINESSWORLD | 31 is termed, is India’s low-cost, tech-based provision of identity, payments and data management. In hindsight, the foundational importance of Aadhar is now manifest. The near universal coverage allowed the basis for the Unified Payments Interface. Launched in 2016, it accounted for nearly 80 per cent of all non-cash retail payments in India now. The third pillar involves data management facilitated via Digilocker. The repository and the key is the ubiquitous cell phone. This combination of financial access, ease and inclusion has proven itself a game changer, a ‘win-win’ for all concerned that has aided velocity, volume and profitability. Almost every government scheme – central or state – is run with ‘direct benefit transfers’ straight into Aadhaar-linked bank accounts. What makes it even more impressive is the demonstrated ability to scale and the complexity it has managed to harness in delivering it. Its enabling digital ecosystem includes government agencies, regulators, tech firms, public corporations, NGOs and universities working together effectively in real time. This is also a fabulous example of tri sector collaboration involving the publicsocial- private sectors with key players seamlessly operating across boundaries. ture. We also have the software services muscle to help implementation and maintenance. With scale, India’s self-sufficiency in domestic payments can scale up to cross-border payments and remittances as well. Unified Payments Interface apps are free of charge to consumers or businesses – unlike the vastly profitable duopoly of Visa and MasterCard. I would term the QR code as a ‘Quiet Revolution’. It is a mark of new India with the ability to connect a billion people in an instant payment system. That a homegrown digital network has made bigger strides than any in the developed West is a source of pride but more importantly, it has the power to bring all transactions into the formal economy, thus shaping it. The scan-and-pay system is the bedrock “digital public infrastructure,” that allowed an unprecedented channel for instantaneous benefits transfer and fiscal transactions. We are a unique country where physical infra is chasing digital infra. Equally significantly, it is a publicprivate model that positions India as a provider, guide and facilitator for the world’s poorer nations. India has topped the list for digital payments. Our payment volume is more than the sum of all digital payments made in the next four leading countries. Of all real-time payments made worldwide in 2022, nearly half were made in India Now, India has an opportunity of doing a Made in India for ‘Paid in India’. With India’s support the third world can leapfrog beyond where the West is at present. These digital building blocks can be used modularly to enable global transformation. India is offering its technologies and platforms for free, hence the expectation is that Indian-made digital systems can become the widely accepted infrastrucPhotographs by Indiapicturebudget
32 | B W BUSINESSWORLD | 21 October 2023 GUEST C0LUMN MARKETING ADVERTISING & Truly revealing is its composition – more than half the digital payments are small or micro payments. That is a significant behavioural shift in what has long been a cash-driven economy. I was Director Marketing for South Asia at Visa between 2011-2014 when some of the most significant advances were begun that redefined India’s digital payment ecosystem. The UIDAI began the work then for basic pillars of the digital infrastructure – the identity number which eventually led to bank accounts and mobile phone apps and made it easier to deliver services. I did a campaign called ‘Dream To Advance’ to publicise use of Visa Debit online. We had made an ambitious plan to make banking correspondents at every street corner by biometrically enabling this infra. I met Mr Nandan Nilekani a few times back then and came away energised on every occasion. It was clear the ambition, plan and consequences were game changing. Back then nothing but cards and net banking existed. Independent payment processors were just beginning to come into play, principally through mobile bill payment facilitation. Mr Nilekani had a clear vision of where we ought to be. Thanks to consistent governmental backing, today we have reached the first horizon. The UIDAI, NPCI, Jan Dhan, UPI have all been built one atop another. In markets where digital payments have taken hold, the converted do not regress to earlier methods. Making voicebased and offline digital payments as an expansion of the current infrastructure will bridge the gap between rural and urban areas. The rural penetration has been hampered by sparse internet access and lower levels of literacy. ‘Conversational payments’ will address this gap and UPI users will be able to make verbal transfer instructions on their phones which will be processed using AI-based speech recognition to initiate transactions. The service, which will use open-source AI language tools, was developed by the Indian Institute of Technology Madras. Near Field Communication Users will also be able to make transactions without the internet by using ‘near field communication’ technology, a system widespread in contactless card transactions, that uses a connection between two close-by phones. This will enable retail digital payments in situations where internet /telecom connectivity is weak or not available. Access to digital tools remains unequal. Only 15 per cent of rural households have internet access. India has the world’s largest population of illiterate adults, some 300 million people. But we have the technical smarts and the resolve to overcome these barriers. India’s digital infrastructure has outpaced protections on user data, leading to a series of high-profile breaches. We passed a landmark personal data security Bill in the last session of Parliament. As Indians, we ought to be proud of our status in the world of digital payments. It took vision, cooperation and political will to ensure the effort that now helps hundreds of millions at the margins of society. Strength to this truly remarkable and foundational movement and a big salute to the pioneers who made this happen. Making voice-based and offline digital payments as an expansion of the current infrastructure will bridge the gap between rural and urban areas. The rural penetration has been hampered by sparse internet access and lower levels of literacy
34 | B W BUSINESSWORLD | 21 October 2023 Generative AI is no passing fad and is certainly not among the technological innovations that have fired public imagination, only to be superseded by others. It is poised to profoundly impact various sectors, like banking, high tech industries and life sciences. An In Depth report By Rohit Chintapali The Ray-Ban Meta smart glasses are integrated with Meta AI IN DEPTH GENERATIVE AI TECH INVENTION OF THE DECADE!
21 October 2023 | B W BUSINESSWORLD | 35 ENERATIVE ARTIFICIAL INTELLIGENCE (AI) came into the limelight during a turbulent market phase, reminiscent of blockchain’s prominence two years ago. During that period, sceptics predicted the rise of cryptocurrency and the potential disruption of traditional finance, currency systems and the broader economy. Similarly, the tech industry was abuzz with discussions on the metaverse just last year, only to witness a significant shift towards Generative AI following the mammoth debut of ChatGPT in November 2022. However, in the case of Generative AI (GenAI), it is evident that this is not merely another fleeting trend. But why? Quick ROI Anup Purohit, CIO at Wipro, distinguishes between GenAI and other trends like blockchain and the metaverse, pointing out that Generative AI offers quick Return on investment (ROI) without the need for massive investments in development. Instead, companies like Wipro can leverage solutions from industry leaders like Nvidia and VMware. “Unlike some technologies, Generative AI is readily available and doesn’t require a complete ecosystem overhaul,” Purohit With a simple “Hey Meta,” users can interact with Meta AI said during the VMware Explore (Singapore) event. He emphasised the role of companies like Wipro in delivering business solutions to customers across various sectors, making Generative AI a practical and accessible tool. With its readiness and adaptability, Generative AI, in Purohit’s perspective, is not a passing fad but a significant and enduring presence in the technology landscape. A McKinsey & Company study suggests that generative AI has the potential to contribute between $2.6 trillion and $4.4 trillion annually to the global economy, which is a figure that surpasses India’s current GDP, which stands at $3.75 trillion in 2023. At VMware Explore, Deb Goswami, Head of Developer Programs for Big Data & Analytics in the ASEAN and ANZ regions, explains that Generative AI has established use cases with clear ROI and does not disrupt existing development processes to the extent that other technologies do. “The path to adoption is clearer with Generative AI in comparison to other emerging technologies,” he says. Generative AI is poised to profoundly impact various sectors, such as banking, high tech industries and life sciences. In banking, its full implementation could yield an annual value ranging from $200 billion to $340 billion. Similarly, in retail and consumer packaged goods, GenAI’s potential impact ranged from $400 billion to $660 billion per year. Talking to BW Businessworld, Raghu Raghuram, CEO at VMware, highlights the adoption curves of various technologies, emphasising that accessibility and the range of use cases play crucial roles. “Generative AI’s rapid growth is attributed to its accessibility; anyone with a browser can harness and benefit from the technology individually. This stands in contrast to the metaverse and blockchain, which require more specialised setups,” he says. “Moreover, Generative AI offers a vast array of enterpriserelevant use cases, with the potential to significantly boost developer productivity by 30-40 per cent, making it highly appealing for addressing contemporary business challenges,” says Raghuram. Photograph courtesy: Meta Photograph courtesy: Meta
36 | B W BUSINESSWORLD | 21 October 2023 Goldman Sachs research suggests that the integration of tools utilising advancements in natural language processing into various sectors and communities has the potential to boost productivity growth by 1.5 percentage points globally over the span of a decade. Generative AI to Boost Metaverse In 2022, amid a tumultuous year for tech stocks, payroll concerns and layoffs, Meta Platforms faced a significant financial challenge in the form of metaverse. Following the pandemic, during a time when the world was deeply immersed in the online realm, Meta’s founder and CEO, Mark Zuckerberg, introduced metaverse as the next major frontier, positioning Facebook as its primary pioneer. He had committed wholeheartedly to crafting an immersive realm accessible through virtual reality (VR) headsets and specialised glasses, albeit one with an eerie element of floating torsos. This endeavour necessitated a brand and name alteration and absorbed billions of dollars in investment. However, when Meta made a significant shift away from the Metaverse to refocus on AI, it became clear that the world was not yet prepared for the full realisation of the metaverse concept. Even though Zuckerberg has begun delivering on his commitment to make 2023 a “year of efficiency” for Meta, he has not entirely abandoned the metaverse, and perhaps rightly so. It’s essential to understand that the metaverse is poised to significantly transform the human experience, introducing an additional layer of perception to our daily world. This became evident through the overwhelmingly positive and awe-inspiring reception of Meta’s collaboration with EssilorLuxottica in September when they unveiled the Ray-Ban Meta smart glasses collection, reaffirming the potential impact of metaverse. Although the $299 glasses were presented as a means to liberate users “from the limitations of a handheld camera” by enabling direct photo and video capture from the glasses, they effectively serve as both a conduit and a gateway to the metaverse. If a substantial number of people embrace these glasses, it could empower Meta to further advance its metaverse endeavours, potentially introducing enhanced features beyond mere photo and video capabilities. In fact, these glasses are actually designed for a purpose beyond mere moment capture, a sentiment underscored by Mark Zuckerberg himself. During the launch, Zuckerberg affirmed, “We consider this a significant milestone on the path to creating the ultimate Augmented Reality glasses.” The Ray-Ban Meta smart glasses are integrated with Meta “I think generative AI is foundational. It’s more of an infrastructure and building block for the next generation of applications.” RAGHU RAGHURAM, CEO at VMware IN DEPTH GENERATIVE AI
21 October 2023 | B W BUSINESSWORLD | 37 concerns, bringing to the forefront more profound worries related to deep fakes and voice scams, which demand heightened vigilance and scrutiny. As data becomes increasingly integral to facilitating services and solutions, it is accompanied by a growing concern for privacy, particularly at the enterprise level. This heightened awareness has motivated both large and small companies to venture into the realm of privacy and introduce services with a strong privacy focus. For instance, VMware recently joined forces with Nvidia to introduce the VMware Private AI Foundation. This solution is aimed at empowering enterprises to refine large language models, create more secure and private models for internal use. In the time ahead, more such developments will prevail. The question that looms, irrespective of the technology at hand, is: To what extent should personalisation be pursued and at what cost to individual privacy? Kit Colbert, CTO at VMware, revealed to a group of journalists at VMware Explore that concerns about risks, including data leakage and IP contamination, emerged early in discussions about Generative AI at VMware. These concerns led to a deliberate examination of how to handle GenAI properly. Subsequently, these internal discussions resonated with customer feedback, demonstrating that the same concerns were shared in the broader industry. “This came up naturally in the intervening months since ChatGPT came out and crystallised into the ‘Private AI’ announcement that we made,” he said. As we venture into the metaverse-era fueled by AI, the issue of privacy will persist as a paramount concern. Companies such as Meta, Twitter, Google and even enterprises will undeniably leverage the capabilities of devices like Ray-Ban glasses to facilitate interactions with the world from the comfort of your living room along with other services. This implies that these companies could potentially identify and collect data about objects within your home, as well as behaviours and more, for the sake of advancing the next level of personalisation. The question that looms, irrespective of the technology at hand, is: To what extent should personalisation be pursued and at what cost to individual privacy? [email protected] VMware CEO Raghuram points out that Generative AI would significantly reduce the cost of content creation, be they images, scenes, characters or dialogues. This affordability enhances a wide range of scenarios, including crafting virtual and real-world experiences. “I think generative AI is foundational. It’s more of an infrastructure and building block for the next generation of applications,” he says. Privacy Remains a Concern Regardless of which technology emerges as the dominant force in this decade or the next, the discourse will increasingly revolve around the topic of privacy. Heightened anxieties regarding data have already compelled nations to formulate strict regulations, particularly in a world where cybercriminals continually enhance their data theft techniques, deploying them for elaborate and large-scale malicious campaigns. However, Generative AI amplifies these AI, Meta’s cutting-edge conversational assistant, optimised to deliver a hands-free, on-the-move experience. With a simple “Hey Meta,” users can interact with Meta AI to ignite creativity, access information and command various features using only their voice. During Meta Connect 2023, Zuckerberg unveiled an upcoming update for the glasses, promising multi-modal capabilities that will enable them to perceive your surroundings when you pose questions. This groundbreaking advancement has the potential to redefine the concept of search, potentially sparking a fresh competition in the realm of AI-powered glasses and search engine. While Meta’s Quest 3 undoubtedly boasts superior power, it’s foreseeable that we’ll reach a juncture where devices like the Ray-Ban glasses can provide comparable capabilities. Furthermore, the integration of AI and Generative AI will unquestionably play a pivotal role in shaping the Metaverse journey, contributing significantly to its evolution. Generative AI could create additional value potential above what could be unlocked by other AI and analytics. AI’s potential impact on the global economy, $ trillion ~15-40% incremental economic impact ~35-70% incremental economic impact 11.0-17.7 13.6-22.1 6.1-7.9 2.6-4.4 17.1-25.6 Advanced analytics, traditional machine learning, and deep learning1 Total use case-driven potential All worker productivity enabled by generative AI, including in use cases Total AI economic potential New generative AI use cases *Updated use case estimates from “Notes from the AI frontier. Applications and value of deep learning,” McKinsey Global Institute, April 17, 2018. Photograph courtesy: Meta
38 | BW BUSINESSWORLD | 21 October 2023 Given the extensive AI developments emerging from the United States and China, what is your perspective on India’s role and prominence in this field, especially in view of the comparatively lower visibility of AI initiatives originating from India? AI is still an emerging field, with Nvidia’s processors leading the way, and AMD and Intel making notable strides. A significant portion of innovation is also happening within the global open-source community, encompassing frameworks like PyTorch and various language models. This collaborative effort extends beyond borders, including the (possible) involvement of researchers from India. It isn’t just about the US and China. India possesses immense potential across various sectors and it should actively embrace open-source innovations. I am confident that India is working on creating solutions tailored to its unique needs, such as Large Language Models (LLMs) for Indian languages and I would be surprised if there weren’t ongoing initiatives in this regard. The opportunity still remains in the AI space for India. AI infrastructure has been in the spotlight since Nvidia struck deals with Reliance and the Tata Group recently. “AI WILL BE CORE INFRASTRUCTURE FOR GLOBAL ECONOMIES” VMware CEO RAGHU RAGHURAM, in a chat with BW Businessworld’s Rohit Chintapali, provides a glimpse of the thought-provoking discussions that will shape the discourse surrounding Generative AI in the coming years, offering a compelling vision of the future of this groundbreaking field. Excerpts How pivotal will the AI-related infrastructure be for India from an economic perspective? AI will be considered as core infrastructure by economies in a few years. Let’s face it, India probably has the most advanced open infrastructure in the world that’s being copied or being leveraged by a lot of different countries. That’s infrastructure. Amazing things are happening in India. Similarly, India is capable of creating things in AI as well. I am hugely optimistic to see what comes out of India next. Lots of companies are addressing the problem of privacy in AI space. VMware has entered the space with ‘Private AI’ now. How does your approach differ from others? We are not necessarily looking at it from a competitive angle. This is a problem that has not been solved for enterprises yet and that’s why we chose to tackle this problem. In fact, when we were collaborating with Jensen (Huang, Nvidia founder and CEO), he said: “Hey, this is exactly what VMware should be doing.” And that shows ‘Private AI’ is pretty unique. The scale at which we are tackling the issue makes it unique. Secondly, it is built on platforms that customers already have. Thirdly, VMware is in a position to bring these innovations wherever the customer wants it. Most of the other alternatives take your data to the public cloud – we don’t say that. While you clearly can do that with our solution, you can also choose to have it in your INTERVIEW
21 October 2023 | B W BUSINESSWORLD | 39 data centre, in your sovereign cloud, or in your edge – wherever it is that you want to. With AI now at the crux of all tech conversations, supplanting topics like the Metaverse and Blockchain from previous years, what leads you to believe that Generative AI will emerge as the dominant technology of this next decade? All these technologies have their own adoption curves. And these adoption curves are usually dependent on two things: accessibility and range of use cases. In the case of Generative AI, one of the key reasons it took off so fast is because you do not need anything special to leverage it. If you have a browser, you can start experiencing the technology and getting value from the technology as an individual user. That is not the case with Metaverse. Certainly, that’s not the case with Blockchain. Secondly, the set of use cases relevant for enterprises to solve today’s problem is huge with Generative AI. For example, the technology can make developers 30-40 per cent more productive. Cloud will clearly be facilitating the proliferation of most technologies including Generative AI. What will VMware’s strategy be post the Broadcom acquisition? VMware’s definition of multi-cloud extends beyond public clouds. It includes private clouds, edge and more. Hock Tan (Broadcom president and CEO) is very excited with that definition and the possibilities. He sees a lot of untapped opportunity in helping customers with their existing data centres and that’s not something that we ever disagree with as a standalone company as well. There are still a lot of customers that want to do a lot more in this space. He says: “Let’s capture that low hanging fruit, even as we continue to build out our multi-cloud portfolio.” That’s the plan. [email protected] “India probably has the most advanced open infrastructure in the world that’s being copied or being leveraged by a lot of different countries. That’s infrastructure. Amazing things are happening in India”
40 | B W BUSINESSWORLD | 21 October 2023 A Force To Reckon With ANKIND PHARMA, the fourth biggest player in the domestic pharmaceutical market rang the stock exchanges bell in early May this year, since then the company’s stock has been the north star rising over 23 per cent in less than four months from its listing price. The company posted handsome results for FY23 and for quarter one of FY24 with revenues rising by 12.4 per cent to Rs 8,749 crore and by 18 per cent to Rs 2,579 crore respectively. The company’s 97 per cent of revenues are generated within India. Speaking exclusively to BW Businessworld, Rajeev Juneja, Vice Chairman and Managing Director, Mankind Pharma says the company is not focused on stock market but the attention is always on the company’s long-term growth which will keep its stock healthy. “We should be the most admired and respected company. Our ambition is to become an institution which is loved by its consumers and the rest of the metrics such as the stock market and valuation will always be a by-product,” Juneja states. SPOTLIGHT CORPORATE M Rajeev Juneja, Vice Chairman and Managing Director, Mankind Pharma A stellar stock market debut, robust financial performance, growth expectations and new drug launches – there is a lot going on for Mankind Pharma By Shivam Tyagi