3 DEC 2022 BW Businessworld E Book

www.businessworld.in RNI NO. 39847/81 I 03 DECEMBER 2022

LOGISTICS: ON A

The National Logistics Policy FASTER
(NLP) seeks to transform

India’s logistics sector into an
integrated, cost-efficient and

sustainable ecosystem

TRAJECTORY

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EDITOR-IN-CHIEF’S NOTE

THE NATIONAL LOGISTICS POLICY

ANNURAG BATRA “I was taught that the way of progress was neither swift nor easy.”
— Marie Curie
 [email protected]
THE FOCUS on infrastructure as a prerequisite of development is several
decades old, but logistics has received attention only recently. Logistics
involves an ‘ecosystem’ that interlinks several sectors and industries. In
her Budget speech, Union Finance Minister Nirmala Sitharaman had
proposed a National Logistics Policy (NLP) that would not only create
a single window e-logistics market, but also focus on generation of
employment and skills and uplift MSMEs. Unveiling the policy in New
Delhi on 17 September, Prime Minister Narendra Modi described the
National Logistics Policy as a significant step in fulfilling India’s ‘pran’
(resolve) of becoming a developed country. “To ensure quick last-mile
delivery, end transport-related challenges, save time and money of the
manufacturers, prevent wastage of the agro-products, concerted efforts
were made and one of the manifestations of those efforts is today’s National
Logistics Policy,” the Prime Minister said.

It goes without saying that in a world driven by trade and commerce,
supply chain efficiencies are a key prerequisite for growth and prosperity.
This issue’s cover feature package focuses on the NLP and its ability to
strengthen supply chains and mend logistical issues in India. Union
government data indicate that the country’s logistical ecosystem has
spawned an industry worth $200 billion, supported by more than
20 government agencies, 40 partner government agencies, 37 export
promotion councils, 50 IT ecosystems, banks and insurance companies,
along with more than 200 shipping and 36 logistics services companies.

The National Logistics Policy 2022 will establish a single-window
e-logistics market and assist in skills development. It will give MSMEs
an edge in the market and improve the country’s market and export
competitiveness. The NLP paves the way for a Unified Logistics Interface
Platform (ULIP) and Ease of Logistics Services (e-Logs). The ULIP is
an integrated platform that seeks to bring together 30 systems of seven
ministries that are directly or indirectly involved with logistics by
developing around 102 application programme interfaces (APIs) covering
nearly 1,600 fields.

Inothersegmentsof themagazine,webringyouvoicesfromtherealmsof
business, academia and even law. Columnists Shuva Mandal and Saurabh
Bindal offer an interesting perspective on privacy, as enshrined in the
Indian Constitution. Incidentally, a draft of a new Digital Data Protection
Bill, has been released recently to replace the Bill that was withdrawn from
Parliament earlier this year. Of course, we also bring to you, all our regular
columns and features that you look forward to. Happy Reading!

6 | BW BUSINESSWORLD | 03 December 2022



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www.businessworld.in SUBSCRIBER’S COPY NOT FOR RESALE I RNI NO. 39847/81 I 19 NOVEMBER 2022 MAILBOX

BI-NSDCIHA’SOTOOLPS Rs 150 YOUR COMMENTS
BUILDING BLOCKS OF THE FUTURE
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pivotal role that the Institute of Rural Management
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Done That institutions that are working in rural areas or the
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10 | BW BUSINESSWORLD | 03 December 2022



CONTENTS

VOLUME 42, ISSUE 03 03 DECEMBER 2022

14 Jottings Photograph by Nightman1965 71 Sanjay Goyal, Lite Bite 42
Foods
A New Year toast to ‘One Earth, 66 PV Raju, Biological E & Logistics Policy:
One Family, One Future’; Biocon Bibhudatta Mohanty, 72 Sridhar Nunavat, Roadmap For
takes over Viatris Biologics’ biz; Vedanta Ninjacart Growth
India wins Round II at COP; A year 68 Sahil Verma, Dabar &
of woe, and more Jagadeesh Kunchey, ITC 73 Vikram Singh Meena, Touted as the next big
69 Rajesh Singhmar, Chep TechEagle step in India’s infra-led
16 Columns 70 Sangram Sawant, growth story, the National
Pescafresh 74 Pramod Ghadge, Logistics Policy is expected
Vikas Singh (p. 16); Minhaz Unbox Robotics to improve efficiency and
Merchant (p. 18); K. A. Narayan & Photograph by Suresh Gola productivity as well as
Sunandan Bhanja Chaudhury (p. 75 Apurva Mankad, promote infra expansion
22); Jayesh Shah (p. 24); Amit WebXpress and development
Tiwari (p. 26); Kiran Karnik (p.
28); Amit Kapoor, Bibek Debroy 80 Spotlight Cover design by
& Aditya Sinha (p. 30); Ajai DINESH S. BANDUNI
Kumar Dayal (p. 32); Hardayal Apoorva Ranjan Sharma, Cover photograph by
Singh (p. 34); Shuva Mandal & Co-founder, Venture
Saurabh Bindal (p. 36); Noor Catalysts++ Group on the TU-UNSPLASH
Fathima Warsia (p. 40); Kaushik entrepreneurial ecosystem
Prasad (p. 146) including the size, scope and
nature of involvement of the
54 Logistics of angel investor community,
and much more
Growth

How the National Logistics Policy
dovetails with Modi government’s
infra focus and how it is at the
centre of a vision to make India a
developed country by 2047

58 The Supply Chain

Fix

Srinath Sridharan writes that the
logistics policy has the potential
to be a game changer for India’s
growth dynamics, but like all
policies its success will depend on
its effective implementation on
the ground

64 Supply

Chain Gurus

Individuals who are
using technology
to optimise supply
chains and
boosting business
outcomes

12 | BW BUSINESSWORLD | 03 December 2022

40 UNDER 40 PROFILES 90 Marketing Photographby Zentro

92 Aabhinna Suresh Khare, Bajaj Mavens
Capital
BW Businessworld
94 Aayush Puri, Anacity felicitates 40 brand
mavericks under the
95 Abhinav Chetan, Digital for age 40 who are driving
Non-Profits & Digicated modern marketing’s
transformation
96 Abhishank Babbar, Bira 91
126 Puneeth Bekal, Mastercard 148 Interview
98 Aditya Babbar, Samsung India 127 Sameer Nanjangud, Skoda Auto
Electronics Volkswagen India Actress-cum-entrepreneur Priyanka
128 Saumya Rathor, PepsiCo Chopra and Anchit Nayar, CEO - Beauty
99 Ahmed Aftab Naqvi, GOZOOP 129 Shivam Ranjan, Motorola Mobility E-Commerce, Nykaa on Chopra’s haircare
Group India brand Anomaly and the collaboration with
130 Sonam Bikram Vij, PepsiCo India Nykaa
100 Aman Arora, Keventers 132 Sowmya Iyer, DViO Digital
133 Subhamoy Das, GroupM Media 152 Bookmark
101 Ameya Padmakar Velankar, Uber India
Systems India 134 Taniya Biswas, Suta A review of B.V.R. Mohan Reddy’s book
135 Tarun Kankani, DMI Finance Engineered in India – From Dreams to
102 Ankit Khirwal, Upgrad Billion-Dollar Cyient
136 Vignesh Murali, Equitas Small
104 Antara Kundu, The Body Shop Finance Bank 154 Gadget Review
India
137 Vikas Chawla, Social Beat Whether the Urban Pro X and Urban Pro 2,
105 Arushi Awasthi, Hero Vired 138 Vishwas Anand, Schneider Electric the two smartwatches launched recently
by Inbase are worth their time and money
106 Ayaaz Khan, Max Life Insurance — Deep Majumdar gives his verdict

107 Bhawna Sikka, GSK Consumer TOTAL NO. OF PAGES INCLUDING COVER 158
Healthcare
156
108 Burhanuddin Pithawala,
HealthPlix Last Word

109 Chandni Davda, WWE Actor-producer and
philanthropist Sonu
110 Chirag Chheda, IDFC First Bank Sood on his Sood
Charity Foundation, its
111 Isha Sharma, Wholsum Foods philosophy and the
work it does, upcoming
112 Jaspreet Singh, Financepeer projects and much
more
114 Kedar Kulkarni, Puretech Digital

115 Khushboo Solanki Sharma, Zero
Gravity Communications LLP

116 Manisha Dokania, Edelweiss
Mutual Fund

118 Medhavi Nain, House of Beauty

119 Muralidharan Kannan, ACC

120 Neha Dk. Pizza Hut India

121 Neha Kulwal, Admitad India

122 Nikunj Kewalramani, Posist
Technologies

123 Pranay Swarup, Chtrbox.com

124 Prateek Malpani, Wakefit
Innovations

ThepagesinBW BusinessworldthatarelabelledBWiorPromotionscontainsponsoredcontent.Theyareentirelygeneratedbyanadvertiserorthe
marketingdepartmentofBW Businessworld.Also,theinsertsbeingdistributedalongwithsomecopiesofthemagazineareadvertorials/advertisements.

Thesepagesshouldnotbeconfusedwith BW Businessworld’seditorialcontent.

13 | BW BUSINESSWORLD | 03 December 2022

JOTTINGS

A New Year
Toast to ‘One
Earth, One
Family, One
Future’
P PhotographbyG20IndonesiaMediaCenter
RIME MINISTER Narendra Modi has assumed document. The fact that this quote got included in the
the leadership of the G20 just when the world final statement, even when most member nations were
economy faces recessionary trends and almost not in favour of equivocating on the conflict, reflects

a year-long war in Eastern Europe. The G20 India’s appeal and diplomatic ability to be able to engage

summit in Bali was expected to see intense discussions with all and even opposing sides. G20 Sherpa Amitabh

and deliberations on the war and that did indeed, happen. Kant credited the full-fledged ‘Leaders’ Declaration’

Indonesian Prime Minister Joko Widodo acknowledged to India’s leadership among developing countries and

that the discussion on the conflict was the “most emerging markets.

contentious” at the summit. India played a key role in India will try to leverage this appeal in the year ahead by

this prickly discussion and worked with all developing focussing on those thorny issues of food security, energy

countries and emerging markets to draft the final joint security, climate crisis and debt crisis. India’s theme for

statement and the preamble to the statement. the G20 group of nations will be ‘One Earth, One Family,

Prime Minister Modi’s words to Russian President One Future’. Here’s hoping that India’s presidency of

Vladimir Putin at the SCO Summit in September, “Today’s the G20 be inclusive, ambitious, decisive and action-

era must not be of war”, stood out in the 1,186-page oriented. —Arjun Yadav

BIOCON TAKES OVER
VIATRIS BIOLOGICS

BENGALURU-BASED Biocon has said that its biosimilar through an $800-million equity infusion into Biocon
arm, Biocon Biologics, has received all the necessary Biologics and the remaining $1.2 billion will be paid
regulatory nods for acquiring the biosimilar business of through debt.
Viatris, revealing that the
company is in the process Biocon Biologics will
of finalising an $800 also issue convertible
million equity infusion as stocks of around $1
part of the deal. billion and pay about
$335 million in cash to
Biocon’s Chief Viatris stakeholders in
Financial Officer, M. B. Chinappa said that the company 2024. According to a Biocon statement, its subsidiary has
would draw loans to pay for the acquisition. The company received the debt part of $1.2 billion.
had announced the $3.3 billion cash and equity deal to The equity infusion of $800 million will be enabled by
acquire Viatris in February this year. parent company Biocon investing $650 million and Serum
Life Sciences funding the remaining $150 million.
The deal involves payment of $2 billion in cash on
completion of the acquisition, which will be funded — Shivam Tyagi

14 | BW BUSINESSWORLD | 03 December 2022

INDIA WINS
ROUND II
AT COP

THE UNITED NATIONS (UN)has said that

the world is speeding down a “highway to hell”

amidst the poor progress in the climate crisis,

which is perhaps, the biggest challenge of the

21st century. An irony at the United Nations

climate summit in Egypt was the parade of

petroleum-fuel guzzling private jets of the

global elite. Another, if anticipated, sophistry

was the tirade by leaders of rich nations about

the consequences of using fossil fuels, after

having been the prime consumer of most of the Photograph by UN Climate Change

earth’s resources of coal, oil and natural gas. that at COP 26 too, India had opposed and stood its

Developing India, now among the fastest growing ground on the Net Zero deadline. There is a distinct

economies in the world, took pot-shots at rich nations attempt to ‘forget or overlook’ the historical contributions

and rejected their push to include language like “major and responsibilities of developed countries, said India’s

emitters’’ and “top emitters” in the cover text of the UN Environment Minister Bhupender Yadav.

climate summit. To tackle climate change, developed India also pitched for access to finance and technology

nations want all top emitters, including India and China to to developing nations to enable them to combat climate

make major cuts in emissions (to limit global warming to change. “Developed countries must take the lead – after

1.5°C) and not just the rich countries, which are practically all the bulk of both finance and technology transfer is

more responsible for climate change. It may be recalled available with them,” said Yadav. — Abhishek Sharma

Photograph by Annazkr A YEAR OF WOE

THE YEAR 2022 was supposed to have been a year of crude oil) and wheat (with Ukraine unable
healing, of recouping the time and momentum lost since to ship out its wheat crop). Here at home in
a pandemic brought the world literally to a standstill two India both the developments reflect in the
years ago. But, like the new strains of Covid-19 that began consumer price indices published by the
to surface, rumblings in the sphere of politics and geo- National Statistical Office in mid-November.
politics kept the world economy and that of India too, on
a roller-coaster ride. A war in Ukraine pushed up prices The Consumer Price Index (CPI) showed a
of both petroleum products (as buyers shunned Russian 6.77 per cent jump year-on-year in October,
while the Consumer Food Price Index (CFPI)
jumped up by 7.01 per cent. The indices show
a significant jump in the prices of cereals
(12.68 per cent), vegetables (7.77 per cent),
milk and milk products (7.69 per cent), fuel
and light (9.93 per cent) and clothing and
footwear (10.16 per cent). In short, both roti
(bread) and kapda (clothing) now costs significantly more
than a year ago, even if makaan (housing) does not. Are
you at all surprised that the commodities that showed
little or no increase in prices are the ones that sell most
in times of celebrations and festivities, like sugar and
confectionary (nil) and oils and fats (-2.15 per cent)?
Goodbye, year of woe!

— Madhumita Chakraborty

15 | BW BUSINESSWORLD | 03 December 2022

COLUMN By Vikas Singh

India Needs
to Leapfrog to
an Integrated
Healthcare
Ecosystem

IF HEALTH IS WEALTH,wearethepoorestnationintheworld.Healthcare tributors to productivity and income.
is a story of exclusion, unaffordability, and poor-quality. They encourage and enable individuals
What is understood and appreciated well is that when the economy im- to work more, earn higher incomes over
proves,sodoesthehealthof itscitizens.However,lessunderstood,andrarely their lifetime. Similarly, health optimis-
appreciated is the less obvious; that the opposite is equally true. es human resources, is key to upward
Most believe health is the ‘absence’ of illness. Our policymakers have mis-di- mobility, reflecting in an individual’s
agnosed the healthcare ecosystem and focused on short-termism. They look at investment in nutrition, preventative
healthcare from the narrow prism of ‘operational and technical’ infrastructure healthcare, sanitation, education and
(hospitals and doctors) when the solution is social and economic. India’s current a better life.
provision of just two per cent of GDP on healthcare expenditure is lamentable.
Not only is the volume inadequate, the character of the investment equally dem- Economic burden
onstrates ‘short-termism’. Hospitals and the other ‘physicals’ are more ‘visible’ and The impact of good health starts early:
a vote catcher and do increase the GDP, but the real multiplier is the investment healthier children attend school regu-
made in the preventives. larly, enhancing their potential and
translating into ability and cognitive
Good health is an asset, has intrinsic value, and instrumental virtue development. A healthier workforce is
Health is a catalyst for a broader and virtuous growth cycle; and must be an integral more enthusiastic and engaged; invests
part of economic discussions. And yet, investment decisions around health are in knowledge and has better learning
evaluated purely as a cost. A Crux study across 14 states, with 1,500 people, 120 outcomes and enhanced output. An-
practitioners (policymakers, health professionals and economists), highlights a other significant dimension of health
co-integration between healthcare investment, health proxies (life expectancy, is itsimpactonsavingsandinvestment.
workforce productivity, happiness, upward mobility) and economic growth. Good health increases life expectancy,
motivates saving. Equally, it encour-
It has a lesson or two. A unit change in healthcare expenditure can potentially ages entrepreneurial pursuit. Both sav-
enhance life expectancy by 10 per cent, and increase GDP by 0.5 to one per cent ings and investment trigger economic
depending on the timing, geography, character of investment and the presence of activities and are long-term economic
the other enablers (governance, tributaries) etc. About half the economic growth positives.
differentials between developing and less developed geographies can be attributed
to poor health. The study used cost curves and articulates that it will take less than Inadequate public infrastructure,
Rs 2,000 per capita to improve healthcare by 50 per cent. The investment will pay poor facilities, deplorable services
back in three years through the labour market, both by optimal labour-force par- have kept most poor unhealthy, pull-
ticipation and productivity gains. Several other economic indicators improve too. ing down the other social indicators.
Inadequate insurance coverage, lower
Health is a precursor to better income. It leads to higher productivity across penetration of healthcare add insult to
several contexts. Lower absenteeism, better morale, ability to take risks, are all con-

16 | BW BUSINESSWORLD | 03 December 2022

‘injury’. Indifferent health affects individuals in several ways. The cumulative cost is The pharma and the diagnostic enti-
substantialandthepriceonepaysoveralifetimeisstaggering. Theunhealthyearn ties have a bigger role than imagined.
significantly lower (income-health gradient), due to fewer earning days (92 per cent Policymakers need to prioritise pre-
vs 68 per cent) and 35 per cent lower earnings per day. This perpetuates. The accu- vention, expand access, and create the
mulated effect of bad health reflects as a substantially lower asset at retirement. healthcare infrastructure. India needs
decadal goals, implementable strate-
The non-monetary cost of poor health, and health inequity is even more distress- gies and holistic plans.
ing, triggering a vicious cycle. It lowers life expectancy, diminishes capability, return
on investment and reduces the earning potential of the individual, increasing The key to scale and access is to cre-
inequality. There are several other negatives, including untenable economic and ate a robust technology and futuristic
flawed life decisions, perpetuating lifetime inequality, and hurting the next genera- health ecosystem that will prevent,
tion too. The study estimates that poor health drags down the GDP by a tenth. detect, and cure. We need to invest in
capacity, and intelligence (non-invasive
An interesting insight from the Crux study is the enhancement of human and digital health record), identify and op-
physical capital that triggers higher spending on health, revealing complementarity erationalise appropriate technology,
rather than the substitutability relationship. The cause and effect of investment to predict and take precautionary ac-
in health and economic growth is virtuous and meaningful; and occurs both at the tion, shield from future pandemics and
micro and macro levels. It enhances human capital, triggering higher productivity health disasters. Similarly, we need to
and helping robust growth. Similarly, an increase in healthcare expenditure creates operationalise a tech-enabled delivery
awareness at one level, prompts action on the other. This drives integrated and and diagnoses framework.
regular health interventions (both preventions and cure).

Enabling framework and institutional capability are catalysts Health is key to upward mobility

Timing, geography, and character of investment is important. Institutional We are only beginning to understand
weakness and absence of enablers result in misallocation of funds, inefficient and appreciate the fact that investment
and suboptimal outcomes. We also need a far-reaching institutional reform. in health is an important determinant
Institutions must envision a broader set of common priorities, formulate plans of economic development. Good health
well, implement better. They must design innovative funding and procurement develops capacity, enhances potential,
models, create wider partnerships and collaborations with other stakeholders. and yet it is much more than a personal

We are only beginning to understand and appreciate the fact that

investment in health is an important determinant of economic

development. Good health develops capacity, enhances potential, and

yet it is much more than a personal issue. It’s an economic multiplier

and an influential factor in establishing a robust economy

issue. It’s an economic multiplier and
an influential factor in establishing a
robust economy. Other indicators flour-
ish too, notably positive effects on social
cohesion and well-being.

The key lesson is that well designed,
effectively implemented, judicious
healthcare investment is a GDP boost-
er. It sustains a better economy. Good
health and wellness are key to upward
mobility. They determine and enable
several drivers to life and living.

Universal access to healthcare must
be an agenda on every policymaker’s
mind.

The author is an economist and columnist

Photograph by Ideyweb 17 | BW BUSINESSWORLD | 03 December 2022

COLUMN

Minhaz Merchant

Bullish on India
D
ESPITE GRIM TALK of a “funding winter”, venture capitalists (VCs)
remain bullish on India. The startup ecosystem has obviously slowed
but the numbers tell a nuanced story. According to Tracxn data, over
140 new Indian VCs were founded between 2020 and 2022. They
have invested in more than 4,500 startup deals during this three-
year period. Ankur Mittal, a partner at Physis Capital, said while

markets remain volatile, “As long as domestic investors continue

to have faith in the resilience of the Indian economy, this (positive)

trend appears to be accelerating.”

Other indicators are positive as well. Sales of vehicles in October

2022 rose to 2.09 million units. Power consumption, a bellwether for economic activity,

increased 13.31 per cent year-on-year in September 2022. Private equity (PE) funds

are as bullish as VCs on India’s growth.

Electric Vehicle (EV) startups are meanwhile attracting global interest. In the first

nine months of calendar 2022, a total of 26 EV deals valued at $904 million were

signed. India’s EV ecosystem is still small with a paucity of charging stations retarding

growth. But that is changing rapidly. The government has set a target of achieving by

2030 an EV share of 30 per cent for cars, 70 per cent for commercial vehicles and 80

MINHAZ MERCHANT per cent for two-wheelers. India’s largest carmaker, Maruti Suzuki, has raised capital
IS THE BIOGRAPHER
expenditure in 2022-23 by 40 per cent to Rs 7,000 crore. A late starter in EVs and
OF RAJIV GANDHI AND
ADITYA BIRLA AND SUVs, Maruti is doubling down on both.

AUTHOR OF THE NEW Fast moving consumer goods (FMCG) firms say that despite tepid sales in rural
CLASH OF
India due to inflationary pressures, overall revenue is picking up following two years of
CIVILIZATIONS (RUPA,
2014). HE IS FOUNDER Covid-constricted growth. As Christian H.M. Ketels, who teaches strategy at Harvard

OF STERLING Business School, told The Economic Times on 28 October 2022: “The Indian economy
NEWSPAPERS, WHICH
will become the world’s third largest in the foreseeable future. The demographics are
WAS ACQUIRED BY
THE INDIAN EXPRESS beneficial. India has a lot of people ready to enter the labour force in the next few years.

GROUP India is also becoming more attractive to foreign investors for its own market and as

an alternative supplier to China.”

And yet pessimism about India’s economic prospects persists among a section of

Indian analysts. Their pessimism contrasts sharply with the views of foreign inves-

tors. Even in the stressed edtech sector where Byju’s and other startups have incurred

huge losses, foreign investors are gung-ho. Jeff Maggioncalda is CEO of Coursera,

the world’s largest online course provider. He recently visited top Indian universities

and colleges to understand the local education sector better. Coursera has 110 million

learners on its platform. Of these Indians comprise the second largest number (17

million) after the United States (20 million). With an annual growth rate of 34 per

cent, Maggioncalda says, it’s a matter of time before India overtakes the US to become

Coursera’s largest market.

A common mistake Indian analysts make is to ignore the size, scale and growth of

the informal economy, much of it based in tier-2 and tier-3 towns. Not only are smaller

cities snapping up SUVs and EVs, they account for much of the growth in ecommerce.

Traditional data doesn’t always capture economic activity and jobs in micro, small and

18 | BW BUSINESSWORLD | 03 December 2022

medium enterprises (MSMEs). With the A common mistake try comparisons or rankings’, is conveniently
broadening of the Goods and Services Indian analysts make is ignored by commentators.”
Tax (GST), many small manufacturing to ignore the size, scale
units have become formalised. But a sig- The dependence of Indian commentators
nificant number remain under the data on foreign indices leads to inconsistent conclu-
radar. The result is misleading data on
both jobs and the overall economy. and growth of the sions in the absence of accurate domestic data.
informal economy, Part of the problem lies with the government.
Among the key data points that es- much of it based in tier- In a data vacuum, private organisations like
cape formal surveys is the participation the Centre for Monitoring Indian Economy
of women in the labour force. V. Anan-
tha Nageswaran, the government’s Chief 2 and tier-3 towns. Not (CMIE) are quoted globally. The CMIE data
Economic Advisor (CEA), recently ex- only are smaller cities does not fully capture jobs data in the growing
plained this lacuna in Mint: “The debate snapping up SUVs and informal sector. How big is India’s informal
over the inclusion of unpaid work in the economy? Estimates put it at 15-20 per cent.
calculation of gross domestic product
is a long-standing one. Given practical EVs, they account for One sign of how GST is gradually formalising
difficulties, this was not pursued fur- much of the growth in this “grey” economy is the rise in tax collec-
ther. In recent years, this has become a ecommerce. Traditional tions. These are running well ahead of Union
hot-button issue, since India’s female Budget estimates in 2022-23.
labour force participation rate (LFPR)
is claimed to have declined considerably data doesn’t always The flurry of new projects in defence, infra-
since 2005. It is a conclusion that fails capture economic structure and automotive will provide many
both experiential and rigorous scrutiny.” activity and jobs in of the jobs India’s expanding young popula-
Nageswaran added: “The use of inter- tion needs. Service companies could add sig-
national agencies’ estimates of India’s
female LFPR is troublesome too. India’s micro, small and medium nificantly to that. Tracxn’s data shows that an
female LFPR is widely quoted as too low, enterprises (MSMEs) average of 1,500 new startups are being funded
citing the ILO’s estimate of 19 per cent for every year. While job layoffs at Byju’s and other
2020. However, this is ILO’s modelled
estimate. It is essentially a black box in large startups dominate headlines, smaller
terms of how and why it varies from our
official estimates. Their official caveat, startups are vacuuming-up excess staff.
‘imputed observations are not based on
national data, are subject to high uncer- The gig economy is playing its part. Food delivery partners of Swiggy and Zomato
tainty, and should not be used for coun-
are on a hiring spree. Young people without tech qualifications now have opportuni-

ties in logistics, warehousing, realty and hospitality. But does NSSO and CMIE data

capture this? Probably not.

Over the past few months, Amazon has acquired land in and around Mumbai to

build three data centres. One of these acquisitions last month in Thane, a satellite

township of Mumbai, was a 54-acre piece of land. At Rs 1,870 crore, it is the largest

outright land purchase this year.

Data is the new oil. It is time the government improved its own data protocol to

ensure more complete and accurate information on the economy and jobs.

Photograph by Akinshin 19 | BW BUSINESSWORLD | 03 December 2022





‘IN THE CORNER’ with KAN and SU!

5 Common Myths Perhaps, the most striking exam-
about Leadership ple of this common myth is when
we observed one leader who
By K. A. Narayan & Sunandan Bhanja Chaudhary claimed that he had never missed a
target for the last many decades,
V OLTAIRE HAD ONCE SAID, “Common sense is not so common!” only to lead the company to the
In our experience, “Common Understanding of Leadership is brink of a disaster, by misrepre-
not so common either”! senting sales and not booking
Having worked for various corporations and having met expenses! Classic case of equating
hundreds of leaders, we have observed some strange myths results with Leadership!
leaders wear on their sleeves. These myths aren’t necessarily in
the conscious space of leaders but play out in their interactions Myth#2 : “I am entitled to leader-
with the rest of the system. How do we conclude that these are the “myths” ship because of my pedigree!”
leaders carry? Our answer to this question is: when we see them behave and In our years of experience, we have
contrast them with many tall leaders in the world. noticed a rat race across the world
where leaders assume that they are
We all draw inspiration from great leaders who stood the test of time like J. entitled to leadership because of
R. D. Tata, J.J. Irani, N. R. Narayana Murthy (Infosys), T. Thomas (Hindustan their pedigree. Little do they real-
Unilever), Varghese Kurien (AMUL), Ramesh Chauhan (Parle), A.M. Naik ise that getting through the best of
(L&T), and their like – who are all institution builders in our country. engineering and B-Schools is only
Myth# 1 : “When I deliver results, I become a leader!” a gateway to a great job but does
Does simply delivering results make one a leader? No doubt, leaders need not make someone a leader.
to deliver results but the means to the delivery is the key. There are various
situations where one may miss targets for various genuine reasons. Real Leadership is when you have
leaders accept failures and learn from them. They have a sharp business inspired your team/ colleagues for
acumen with an ability to recover from temporary setbacks and build cred- several years, working in different
ibility through authenticity. Hence, all stakeholders stand by them in situations and making others suc-
times of adversity. ceed! This is a true reflection of
leadership. On the contrary, quite
often one witnesses the supremacy
of IQ over EQ in staking a claim to
leadership. We have seen the team
and the followers being pushed to
the wall due to blatant display of
IQ over EQ.

Degrees do not entitle you to be a
leader but it is the strength of the
EQ that is the true hallmark of a
leader. History has many stories of
great leaders and all of them have
one thing in common and that is a
strong EQ!

Mr J.J. Irani, former MD of Tata
Steel, was known for his humility
and down to earth approach, which
endeared him to the people he
worked with and won him several
acclaims. One has heard stories
about how he used to visit workers’
homes on special occasions, dine in
their canteens and even celebrate
festivals with them.

22 | BW BUSINESSWORLD | 03 December 2022

(L to R) N. R. Narayana

Murthy, Varghese

Myth# 3 : “Status & titles maketh Kurien and J. R. D Tata

a leader!”

How often do we see people reach

the top before their time – the sta-

tus as well as title gives them the

illusion of leadership.

Such leaders normally assert

their power on their teams and

many a times let them down in

times of crisis. We have seen lead-

ers who have not even flinched an

eyelid in throwing their team

members under the bus in front of

the Board so as to look good.

The fact is that status and title

are meant only for role effective-

ness and does not in any way con-

fer leadership qualities on them! Two CEOs who are being discussed in corporate circles for their success are

Unfortunately, such leaders are Sandeep Bakshi of ICICI Bank, who is turning around the huge private sector

generally insecure about their bank into an agile and hierarchy free bank and Ignatius Noronha, CEO of

own success and try to build an D-Mart, who is rumoured to be India’s richest professional manager with a

aura of superiority based on the net worth of Rs 7,800 crores.

chair they occupy. We hear stories of Sandeep Bakshi visiting branches of the bank incognito,

sitting in a corner and observ-

Above all, the test of true leadership is at times of crisis and ing, and the staff don’t even
during turbulent times. J.R.D. and Narayana Murthy are known recognise him! Noronha on
the other hand, has humble

for their simplicity and yet, have built lasting institutions. The beginnings but has created
latter, even today travels by economy class. Varghese Kurien one of the best grocery-to-
was known for his vision and delivering a flood of milk in India. apparel retail chains in India.

All very unassuming and known for their brilliance Myth # 5 : “Leaders are
always at the top of the pyr-

amid!”

Myth # 4 : “Elegant dressing and Some of the best run institutions have leaders across all levels. They become

stylish articulation” the breeding ground of leadership. Corporates have started recognising that

There are many who have an intui- leaders can and should be at all levels – those who are willing to take charge

tive sense of style in dressing and and can inspire followers.

communication. They can pass We have observed that many times anyone who leads a project or assign-

through any interview and impress ment is perceived as a leader! In this age of knowledge, all subject matter

all the bosses to gain their confi- experts irrespective of their age or level can potentially be leaders. Above all,

dence. It is only over a period of the test of true leadership is at times of crisis and during turbulent times.

time that their true colours play out J.R.D. and Narayana Murthy are known for their simplicity and yet, have

when they are put under scrutiny. built lasting institutions. The latter, even today travels by economy class.

True leaders do not focus on Varghese Kurien was known for his vision and delivering a flood of milk in

dress sense or the ability to be India. All very unassuming and known for their brilliance.

articulate. In contrast people who Years of research throw up one single common thread that Great Leaders

wear their attire as humility and have, and that is “resilience” – the ability to sustain ambition in the face of

empathy are known for their lead- frustration!

ership. In contrast two examples in

the recent past give a glimpse of K. A. Narayan, President -HR, Raymond Ltd, is fondly known as KAN in industry for his well-known ‘Can
what leadership is all about! Do’ attitude. Sunandan Bhanja Chaudhury, Client Partner, Pedersen & Partners, is known as SU by
friends and family, both off and on the golf course!

23 | BW BUSINESSWORLD | 03 December 2022

COLUMN

D ESIGN THINKING is not new; the build low-cost prototypes.
term was mentioned by Nobel Lau- l Phase 5: Test
reate Herbert A. Simon way back Test the prototypes, refine
in 1969 in his book, The Sciences of them if necessary, retest and

the Artificial. As Sarah Gibson of find the best solution.

Nielsen Norman Group has writ- The above phases are

ten, there were innovators like Charles and not sequential, as is evident

Ray Eames, whose moto was “learning by from the diagramme and

doing” and who looked at needs and con- will be repeated till the ideal

straints before getting down to designing solution is found.

the famous Eames chair which is in vogue In short, it is an iterative

even today. The concept has evolved over process which emphasises

the years and the credit for bringing it into n the need to empathise

the mainstream should go to Tim Brown of with the User/System,

IDEO, a global design and consulting firm. articulate the problem at

But what exactly is Design Thinking? It is hand clearly, think of vari-

an approach to solving problems and creat- ous solutions, build proto-

ing innovative solutions. It is considered to types and test them to fig-

be very useful for problems that are not well ure out the best fit.

defined, aka wicked problems. “Wicked” One of the best examples

problems, is a term introduced by Horst By Jayesh Shah of successful implemen-
tation of Design Think-

How Real is ing is what was done by
Design Thinking? GE Healthcare to make
their MRI machines child
friendly. Observing that
most children cried during
the entire procedure, they
transformed the ecosystem
from a black hole to pirate
ships, beaches, oceans and

sandcastles; a classic case of

listening with empathy and

Rittel and Melvin Webber in 1973 to define trying to eliminate the pain points.

social and cultural problems that are com- Another example was of Oral B. The company wanted to upgrade its

plex and difficult to solve because of their electric toothbrush and asked its designers to add functions like tracking

inherent nature. brushing frequency, playing music, et al. However, the designers figured

The process of Design Thinking consists out that customers were looking for something different and recom-

of five steps: mended that they make the toothbrush easier to charge and ordering

l Phase 1: Empathise replacement heads more convenient. The designers focused on what the

Understand the problem domain through users wanted rather than what the company brief was.

empathy with the target group and focus on Apple, Netflix, Airbnb and UberEats are some other organisations

their needs. that have successfully applied design thinking principles to create and

l Phase 2: Define innovate products and solutions.

Analyse the information gathered and de-

fine problem statements and create perso- IS DESIGN THINKING APPLICABLE UNIVERSALLY

nas. So can Design Thinking be applied to any and every problem or domain?

l Phase 3: Ideate As Sebastian Kummetz Brunetto, Co-founder INNOVATION RADI-

Start brainstorming and looking for alterna- CALS has said, there are clear dos and don’ts for this. It should be applied

tives and possible solutions. when dealing with complex problems where we do not understand the

l Phase 4: Prototype problem domain and do not have a solution in mind. These are typically

Experiment, find possible solutions and in the realm of human behaviour and change in the world. He further

24 | BW BUSINESSWORLD | 03 December 2022

there are many more joining the

bandwagon.

What is it that the naysayers

have against it?

u It promises too much

v Is too simplistic

w Cannot be applied to any

problem

x Is old wine in a new bottle

y Companies may have had

a vested interest in promoting it

EMPATHISE Some experts have an issue with
DEFINE the first step of Design Thinking
itself, which is “Empathise”. How

IDEATE can one empathise with some-
PROTOTYPE thing one has never experienced,
they ask? Bryce Johnson, Inclu-

TEST sive Lead at Microsoft Devices
says, “I can never truly experience

or get in the shoes of a woman who

There is no doubting the fact that Design Thinking has has experienced childbirth”. Ac-
cording to him, to compensate for
deliveredphenomenalsuccesses,butonethingisclear this, designers and technologists

– it is not a one size fits all approach must design with, rather than de-
sign for.

Natasha Iskander, Professor of

states, do not use Design Thinking in pro- Urban Planning and Public Service New York University says, “Design

cesses that are not open ended. If you know Thinking privileges the designer above the people it serves and in doing

or want certain results in advance do not use so, limits participation in the design process”. By giving the designer

this approach. total authority, it squashes more inclusive design practices. Her take

For Design Thinking to be successful the on the empathise phase where the designer must listen to the users and

right problem statement needs to be chosen, understand their perspective is that it is still the designer who is deciding

and the assembled team needs to live the what is relevant and what is not. This, is what she believes, makes design

methodology. It takes people into uncharted thinking exclusionary.

territory and the team members need to be In conclusion, what is the verdict on Design Thinking? There is no

open-minded and ready to be critiqued and doubting the fact that Design Thinking has delivered phenomenal suc-

challenged. More often than not, it is the cesses, but one thing is clear – it is not a one size fits all approach. It must

promise and the over-the-top expectations be embraced judiciously and needs deep investment in terms of time,

that lead to real or perceived failures. patience, commitment to the cause and a team that believes, because

To be clear, Design Thinking is different great innovations do not happen overnight. Interestingly, alternative

from Design. It is a process, an approach approaches are now being suggested by experts like Bryce Johnson who

to problem solving that can lead to innova- emphasises on recognising exclusion, designing for inclusion, solving for

tive solutions; the key phrase being, “can one and extending to many. Bruce Nussbaum talks of Creative Intelli-

lead to”. It is not a panacea. In fact, major gence and defines it as the ability to frame problems and to make original

advocates of Design Thinking like Bruce solutions. He argues that like IQ and EQ, organisations need to look for

Nussbaum have, over time, become sceptics CQ (Creative Quotient) in their teams for design to succeed. Then there

of the methodology. While accepting the are other approaches like Human-Centered Design, Interaction Design,

contribution of the process in taking the Life-Centered Design and Strategic Design.

field of design to a much larger space, the Time will tell which of these, if at all, will become the successor of De-

inherent promise of delivering creativity sign Thinking; who knows, maybe none.

does not always happen, in his opinion. He is The author is a digital transformation expert and currently Executive Director,
not alone in questioning the methodology; AutomataPi Solutions

Photograph by Hristianin 25 | BW BUSINESSWORLD | 03 December 2022

AmitScope Amit Tiwari , Global Head
Marketing Demand Center, TCS

Redefining.
Recalibrating .

Rebooting –
CMO’s Role
in the Digital

Economy

T HE NEED FOR CMOS to adopt a more strategic stance tions and storytelling with dynamic
stems from the changing needs and behaviours of con- content-management tools that
sumers. Also marketers today, more than ever before, are facilitate and occasionally auto-
swamped by an increasing number of MarTech stacks mate the creation and delivery of
and tools they have available at their fingertips. All these real-time communications.
multiple channels and tactics have inevitably resulted in Additionally, they are expected to
nurture communities, maximise
an increasing pressure to simultaneously engage cus- connections, and design stories to
build customer loyalty.
tomers while delivering on growth initiatives.
In this complex mix, what ulti-
This friction may help explain the churn in the CMO mately matters is how the CMO
succeeds in creating value for cus-
position more than in any other C-suite spot. While organisations are entrust- tomers by encouraging them to
interact, share knowledge, and col-
ing business growth squarely on the shoulders of the CMOs, they are doing so laborate. Understanding these
integrated concepts is the first step
without necessarily providing them the authority to make the vital decisions. in aligning marketing strategy with
the company’s growth strategy.
This leaves the CMO with very little room to execute effectively.
THE INTERNAL CURRENTS
OWNING THE CX JOURNEY Chief Marketing Officers are fre-
quently assumed to be the owners
Today, the CMO is often called upon to play CXO and add experience value to and drivers of CX, the scope and
the brand. They do this by defining and steering the customer experience jour- depth of which can be expansive
ney right from ideating, designing and then building the systems/tools/pro- and stretch beyond the traditional
cesses to deliver on that perfect experience to ensure value augmentation to domain of marketing. For the
the customer throughout his journey. CMO this includes the ability to
discover growth, build platforms,
Chief Marketing Officers are also expected to be intrinsic data scientists and
have complete knowledge of customer data including identifying when cus-
tomers are looking for a specific good or service, figuring out what issue they
are attempting to resolve, and determining what options will best suit them –
all in real time. Sharp conversion, customisation, and prediction abilities are
required.

The CMO is also expected to be the undisputed cheerleader not just of the
brand, but also the CX by combining established strategies like public rela-

26 | BW BUSINESSWORLD | 03 December 2022

and leverage assets in order to con- Today, the left-brain is as actively involved in marketing decisions as creativity

tribute to enterprise-wide success. and CMOs need to be sharply attuned to and actively encourage a data driven

The key to creating operational intelligence to thrive in the workplace. Another big shift for CMOs is optimis-

value within the organisation lies ing for lifetime value (LTV) – rather than just near-term transactional goals.

in a DDOM where diverse teams Now, more than ever before, brand identity is everything. The strength of a

align around a shared growth robust, vibrant brand has sustained many organisations through challenging

agenda and marketing approach, times, and presently, as customers are overwhelmed with options in nearly

to increase speed, agility, and col- every category, its impact has become undeniable. Chief Marketing Officers

laboration across the C-suite. For need to consider carefully the difference between the value that marketing

instance, if a business’ customers currently creates and what it should create according to its potential to drive

are shopping primarily online, sales, profits, and company growth. Because, as much as things change, they

then CMOs and CIOs should be in also stay the same. Chief Executive Officers look to the CMOs and their teams

sync. And if the business’ customer to drive growth and that should be the central agenda for all CMOs.

experience is guided strongly by in-

person interactions with front-line THE HORIZON AHEAD

staff, then HR and the CMO should As expectations for supporting the scope, speed and complexity a business

be on each other’s speed dial.

Managing the intersections –

and often complexities – with oth-

ers in the C-suite is a challenge

many CMOs face. Over here an

interesting concept of measuring

behaviour (such as trust and trans-

parency across an organisation)

rather than performance could be

useful. This would help especially

when overlapping roles and

responsibilities within the organi-

sation make it tricky for CMOs to

clearly communicate the value of

marketing. For instance, while

leads to improving CX may be the

top agenda for CMOs, translating

that emphasis into an

increase in sales and rev-

enue will be the priority Today’s CMOs have no requires become even greater, the challenges for

for counterparts in choice but to share some the CMO will multiply too.
finance. Considering Next-generation CMOs will have to master

and adapting to what’s of the CTO’s digital and the nuances and power of the brand, keep pace
important across the technical skills, as well with the emerging capabilities of technology
C-suite and setting the and navigate the hyper-speed shifts in culture

agenda in a language as the CHRO’s emphasis and consumer behaviour. Additionally, they will
that makes all stake- need to build and foster fluid, adaptable teams,
holders feel invested is a on human resources
work effortlessly with external stakeholders and,

vital skill CMOs today and CFO’s financial above all, measure and optimise everything they
need to master. do. While CMOs are already experiencing most

THE RIGHT MIX prudence. How has it of this today, the future is expected to hold more
In the pre-digital era, impacted and amplified of the same, but with even greater velocity and
perplexity.

marketing was consid- the mission of marketing While being a modern day CMO is certainly
ered to be a creative, leadership? not for the fainthearted, never before has mar-
right-brain function. keting been more fun or challenging.

Photograph by Vector Mine 27 | BW BUSINESSWORLD | 03 December 2022

KIRAN’S KONTRARIAN KORNER

T RUST IS THE LUBRICANT that By Kiran Karnik
smoothens and speeds up busi-
ness transactions, accelerating TIME THAT
economic growth. It is social capi- TRUST
tal, of immense value; far more TRIUMPHED
important, in many ways, than
financial capital. Whether in an organi- “community”: even if the person is not one who is personally known
sation or in sports, trust in team-mates is (like the neighbourhood ironing-man), the fact that she or he is part
an essential pre-requisite for success. of the local community is an implicit guarantee or safeguard, ensuring
Like the trapeze artist who leaps into against any form of cheating.
empty space, tens of metres above the
ground, with full faith that her partner ‘LOVE ALL, TRUST A FEW’
will swing across in time to catch her, In most business transactions, though, companies inevitably follow at
team members need trust in each other. least one part of Shakespeare’s advice: “Love all, trust a few, do wrong to
In cricket, the batsman often takes a none…”. However, even for the few whom they do trust – and, of course,
quick single without knowing whether a for the many that they may not – there is the safeguard of legal agree-
fielder has pounced on the ball, based ments. The adage of “trust, but verify” is modified to “trust, but hedge”
purely on trust in the call from his team- (through legal contracts). With formalisation and impersonalisation of
mate. business operations, legal agreements have become essential. On the
positive side, they have enabled expansion of supplier and customer
Traditional institutions like “angadias”, base into new geographies and to unknown entities.
precursors to contemporary couriers, are
purely trust-based. They are known to be Contracts do help, but the importance of trust has not diminished.
entrusted with deliveries of even cash and One aid to this are organisations which serve as trusted intermediar-
diamonds, and decades of doing so have ies. Banks, for example, play this role in many a transaction. So do
reinforced their reliability, credibility and platforms like Flipkart or Amazon, which facilitate remote (online)
trustworthiness. Similarly, when you give buying and selling, or connecting customer and provider (like Ola,
a piece of household equipment for repair Uber or Airbnb). In the financial world, products like bank drafts
to the local handyman or shop, it is on a (banker’s cheques) serve as trusted instruments, providing confidence
mutual trust basis. No paper is exchanged: to customer and buyer.
leave alone a legal agreement, there is not
even a receipt. Much of this is based on Trust in institutions is key for businesses, but also for all other areas
of life. In a strong democracy, it is critical that people have trust in
the government, judiciary, banks, business, media, and civil society
organisations. Interestingly, one survey (Edelman Trust Barometer)
indicates trust in societal institutions (NGOS, business, government
and media) is the highest in India, as compared with other major
countries. India scored 79 points in 2020, and 77 in 2021, against
global averages of 54 and 56. Surprisingly, in 2021, the United States

28 | BW BUSINESSWORLD | 03 December 2022

was at the bottom of this group (with 48
points). On trust in government, India was
ranked fourth in 2020, with 79 points (be-
hind frontrunners Saudi Arabia and Chi-
na, with 82 points, and UAE, with 80). The
United States and the United Kingdom
were at the low end with 45 and 42 points.
A special report in May 2022 (again by
Edelman) showed India as the top ranker,
amongst 14 countries, in domestic trust in
business companies.

Such surveys are, of course, questionable,
given their small sample sizes and limited
geographical coverage. Some researchers
have claimed that trust in institutions is de-
creasing globally. There is also a view – based
on anecdotal inputs – that in India business
is not really trusted: neither by people, nor
by the government. For long, NGOs have
been viewed with a degree of suspicion by

Trustininstitutionsiskeyforbusinesses,butalsoforallotherareasoflife.Inastrong
democracy,itiscriticalthatpeoplehavetrustinthegovernment,judiciary,banks,
business,media,andcivilsocietyorganisations.Interestingly,onesurvey(Edelman
TrustBarometer)indicatestrustinsocietalinstitutions(NGOS,business,government
andmedia)isthehighestinIndia,ascomparedwithothermajorcountries.India
scored79pointsin2020,and77in2021,againstglobalaveragesof54and56

both government and business. cashier or vendor. A rate list was put up of available items (daily need
items like vegetables, etc.) and people picked and weighed what they
EROSION OF SOCIAL CAPITAL wanted, depositing the amount due into a box. Similarly, a network of
Of late, many feel that media (mainly tel- 15 “honesty shops”, with payment based on trust, operate in schools in
evision) has lost their trust. If this is true, Ernakulam, with the first having opened in 2008. These, and many
such mutual lack of trust in vital institu- other instances (like the angadias we began with) show that trust
tions signifies an erosion of precious so- is yet a strong characteristic in India. Yet, these are instances at the
cial capital. India has been strong on social individual level. The challenge is in building and growing trust in
capital, thanks substantially to its family institutions, which, by definition, are impersonal.
bonds, social structure and traditionally
cohesive communities. Decrease in trust Trust can, of course, take a different form – especially in innovative,
is, therefore, a cause for deep concern. Are “beat-the-system” India, where reward is desired, but risk and retri-
we heading towards a situation where – bution is not. Those in this camp may well favour the US’s “In God we
to quote Shakespeare again – “There’s no trust” or Omar Khayyam’s thought: “I am going to commit every kind
trust, no faith, no honesty in men; all per- of sin because I trust God is compassionate – he will forgive.” Let us
jured, all forsworn, all dissemblers”? hope that people continue to trust other people – not just the compas-
sion of God – and, in turn, evoke their trust.
On the other hand, there are interesting
examples of strong trust. Development Trust is a two-way street. Both institutions and people need to act
Alternatives, an NGO, set up a “Inam- with this in mind, and enhance India’s USP: its social capital.
dari ki Dukan” (Shop of Trust) in a village
near Orchha in Madhya Pradesh, with no The author loves to think in tongue-in-cheek ways, with no maliciousness or offence
intended. At other times, he is a public policy analyst and author. His latest book is
Decisive Decade: India 2030 Gazelle or Hippo (Rupa, 2021)

Photograph by Andrey Khrobostov/CANVA 29 | BW BUSINESSWORLD | 03 December 2022

ARTHSASTRA by Bibek Debroy, Amit Kapoor & Aditya Sinha

STATE OF
MUNICIPAL

FINANCES

From left to right: Bibek Debroy,
Amit Kapoor & Aditya Sinha

Photograph by Andrey Popov nicipality.
Despite this provision in Article
F ROM WEALTH (KOSA) COMES the power of the Government
(danda).” This is a quote from Arthashastra, a treatise on state crafts 243X, many states have failed to de-
by Kautilya, written sometime in 300 B.C. Collecting taxes, fees, and volve the independent authority to
penalties is a fundamental way in which any level of government can revise existing tax rates. Similarly, it is
generate revenue for making investments for creating basic provi- difficult for the ULBs to introduce new
sions for the citizens. This is true for the Urban Local Bodies (ULBs) taxes/ charges. Praja’s Fiscal Empow-
erment of City Governments found
too. As per the 12th Schedule of the Indian Constitution, urban local that “3 out of the 14 cities (Pune, Bhu-
baneswar and Cuttack) do not have in-
bodies are supposed to deal with 18 municipal functions. However, as per Praja’s dependent authority to introduce new
taxes from the assigned list of taxes
Urban Governance Index 2020, no state has been able to devolve all 18 municipal according to the respective Municipal
Acts”. As far as financial transparency
functions to the Urban Local Bodies. One reason for this is the non-availability of is concerned, only two cities (Mumbai
and Coimbatore) out of the 14 cities in
adequate financial resources with the ULBs to deal with all 18 municipal functions. the study publish the outcome/perfor-
mance budget.
But why is it so? lTaxes, duties, fees, etc., which could
A study of the State of Municipal Fi-
The74thconstitutionalamendment be levied and collected by the Munici- nances in India by ICRIER, prepared
for the 15th Finance Commission,
empowers the state legislatures to im- palities, as per the procedure to be laid found that Municipal own revenue as a
per cent of GDP rose between 2010-11
pose taxes which aid the municipality’s down in the state law. and 2012-13 but thereafter, it declined.
The basket of local taxes in India is not
finances.Thus,constitutionally,itisthe l Taxes, duties, fees, etc., which would very exhaustive. In most cases, the local
taxes are taken over by the states. The
responsibilityofthestategovernments beleviedandcollectedbythestategov- major tax in the basket of local bod-

to create avenues for the ULBs to raise ernment and a share passed on to the

resources. Article 243X of the Consti- municipalities.

tutionhasrecommendedthatthestate l Grant-in-aid that would be given to

governments transfer powers to the the municipalities from the state.

ULBs for imposing taxes by and funds l Constitution of funds for crediting

of the municipalities. This includes: and withdrawal of money by the mu-

30 | BW BUSINESSWORLD | 03 December 2022 Photograph by Himanshu Kumar

the Union-level Finance Commission
recommend grants for ULBs. Clearly,
states are responsible for the finances
of ULBs. Reform-linked grants (as
in XV-FC) can nudge states to invest
more in ULBs. But states should do
more.

In order to improve the state of mu-
nicipal finances, states should do the
following:
u The states should regularly set up
SFCs and accept their recommenda-
tions timely.
v States should empower ULBs
through state municipal acts to intro-
duce new taxes/fees/penalties, tweak
these taxes and have independent au-
thority to approve their own budget.
w The pre-requisite for empowering
the ULBs with such powers requires the

The basket of local taxes in India is not very exhaustive. In most
cases, the local taxes are taken over by the states. The major tax in
the basket of local bodies is property tax, and it contributes around

60 per cent to the municipal tax revenue in the country

ies is property tax, and it contributes working paper by Manish Gupta and elected representatives and permanent
around 60 per cent to the municipal Pinaki Chakraborty found that states bureaucracy to be trained regularly to
tax revenue in the country. No won- do not promptly act on the recommen- dealwithfinancialmattersof thismag-
der the “own taxes and user charges dation of the SFCs. nitude.
of the ULBs in India are grossly inad- x States should eventually allow
equate to meet the expenditure need The Union-level Finance Commis- ULBs to deal with all 18 municipal
of ULBs”. sions are supposed to be concerned functions.
with Union-state fiscal relations. How-
Technically, the State Finance Com- ever, Eleventh Finance Commission For India’s economic growth story, it
missions (SFC) are supposed to recom- onwards, the Terms of Reference (ToR) is important for our cities to have basic
mend the distribution of net proceeds of the Union Finance Commission infrastructure that can provide a robust
of taxes and duties between the state have a specific item requiring them to foundation for unleashing the econom-
and the local governments. The SFCs “make recommendations to augment ic potential in our vibrant cities. This
are supposed to be constituted every the consolidated funds of the states cannot happen in the absence of em-
five years. But there are two issues: to supplement the resources of local powered ULBs. Empowerment cannot
uA lot of state governments do not set bodies”. The 11th Finance Commission comewithout Kosa.Andtheabsenceof
up SFCs regularly. As per the XV Fi- awarded Rs 400 crores for municipali- Kosamakesgovernancedifficult.If not
nance Commission of India’s report, ties. The XV Finance Commission, in to the Union-level Finance Commis-
only15stateshavesetupthefifthor the its final report, recommended a total sion, states should at least pay heed to
sixth SFC. Some states have not even amount of Rs 1,21,055 crore to local the advice of Kautilya.
gone beyond the 2nd and 3rd SFC. bodies for the period 2021-22 to 2025-
v Even if the states reconstitute the 26. But one should ask if the state gov- Bibek Debory is Chairman, Economic Advisory
SFCs, they do not accept the recom- ernments fail to set up SFCs, which is Council to the Prime Minister; Amit Kapoor is Chair,
mendations of the SFCs. A NIPFP a constitutional requirement, should
Institute for Competitiveness & Lecturer, Stanford
University; Aditya Sinha is consultant, EAC-PM

31 | BW BUSINESSWORLD | 03 December 2022

COLUMN Could Ecommerce
Shake Up the World
Ajai Kumar Dayal of Advertising?

R ETAIL HAS TRADITIONALLY meant getting products from manufac-
turers and stocking, displaying and selling them in brick-and-mortar
stores. The problem of transporting, storing and displaying products,
hundreds and thousands of them, was overcome by online stores by
merely listing and displaying them with images. They also eliminated
one key problem that physical retailers faced, i.e understanding what
to stock and how much, by using a much more accurate gauge of de-
mand; customer clicks and views.
This radical change in the last two decades is making it increasingly difficult for
physical stores to compete. Of course, along the way Amazon, as the torchbearer, had
to come up with a plethora of solutions for their challenges; getting outside sellers to
stock, list and sell their products, opening up their stocks and pricing to sellers, allowing
sellers to provide their own promotional content on the store and solving the sellers’
logistics problems with their muscle. It worked perfectly.
When Amazon and customer systems were linked through APIs (Application Pro-
gramme Interfaces) with thousands of outside sellers now active, it created unprec-
edented demand of course, but it also generated massive volumes of data which became
difficult even for their huge computing resources to handle. A massive computing and
storage behemoth, Amazon Web Services, (AWS) was created to meet Amazon’s own
needs, but also as an independent revenue stream and it garnered external business
of $31 billion in the last year.
Many people have tried to copy the unique business model with varying degrees of
success. But the biggest challenge that arose was how to ensure that customers actually
find products among the millions that are listed. The algorithm they created pushed
up products most seen and ordered, to the top of the page. People soon learnt how to
game this to their advantage, viewing and placing orders and quietly cancelling them
later. Advertisements were introduced and with sponsored products a seller could pay
to place his new product at the top of the search. But still, the customer would often not
find the best product for her needs which could be listed 10-15 pages later.
This is an ongoing problem which may not be solved in a hurry, not because it can-
not be, but also because advertising has created a $31 billion revenue stream which
Amazon will find difficult to ignore. In 2021, this was more than the total worldwide
advertising spend in Newspapers which was $29.5 billon. It was 14 per cent of Ama-
zon’s online store sales and 6.7 per cent of its’ total global sales for the year, which was
$469.8 billion.
Amazon is therefore hoovering a lot of the ad spend that would otherwise go to other
media including newspapers, television and indeed, even to new media like You Tube.
Does it mean that selling the platform itself is going to become more important going
forward than the selling of actual products?

32 | BW BUSINESSWORLD | 03 December 2022

What Amazon does, is soon copied, The advertising market in India clocked $11.1
replicated, adopted by other online plat- billion last year, of which digital advertising was
forms around the world and combined around 31.6 per cent or $3.5 billion. Ecommerce
together, the global online business in advertising was 20 per cent of this. As online
2021 was $ 5.2 trillion. This was about 22 retail business grows, so will the emphasis on
per cent of the $ 23.65 trillion total global ecommerce advertising
retail sales in the year.
this global trend is not going to change. The movement towards greater ecommerce is
Ecommerce in India in 2021 at around both inevitable and desirable and with each year the platforms will increase efficiency,
$25 billion, was 7.8 per cent of the $1.07 adoption and reach.
trillion total retail sales in the country (in
comparison, in China ecommerce consti- It just means that physical retail has to adapt to this new reality and fast. Various
tutes 43 per cent of total retail sales). kinds of hybrid models have appeared, marrying the physical and the digital – phygital
as it is sometimes called – but these are still baby steps. The entire category beginning
The advertising market in India from the simple grocery must gear up with greater convenience, proximity, speed
clocked $11.1 billion last year, of which and service. In the organised sector, there is no alternative to better service, customer
digital advertising was around 31.6 per friendliness and efficiency. Just putting up ‘SALE’ signs and having promotions is not
cent or $3.5 billion. Ecommerce adver- going to be the panacea for their difficulties. The stores will have to find more ways to
tising was 20 per cent of this. As online engage with their customers to ensure that feet do not leave the store without bags.
retail business grows, so will the empha-
sis on ecommerce advertising, divert- Similarly, with the growth of advertising driven ecommerce, we are going to see the
ing resources away from traditional ad blossoming of many new brands. Already a number have popped up on sites like Ama-
spends. Digital advertising will dominate zon, Flipkart and Myntra. Companies like Mensabrands have made it their mission to
the advertising world in the years ahead push new brands and young and peppy labels are not just rearing to create space in their
and in this, ecommerce ads will grow dis- categories, they are willing to spend big to do it, even roping in big cricketers, film stars
proportionately. and influencers. It is going to make life complicated for traditional brands, be they in
fashion, cosmetics, personal care or even electronics. A plethora of ecommerce based
So physical retail will face a double electronic brands already outsell established brands in many categories.
whammy. The growing spend on ecom-
merce advertising will consume resourc- In this new age, no business is safe. It is time to examine your risks and start taking
es which would otherwise have pushed action before your business becomes irrelevant.
offline retail business. Not only will they
lose sales to the platforms, they are also The writer has over 30 years’ international experience in marketing, managing brands, retail and
going to lose visibility which would have ecommerce businesses and consults and comments in these areas
driven customers to them.

Before people start picking up picket-
ing placards it must be pointed out that

Photograph by Milindri/CANVA 33 | BW BUSINESSWORLD | 03 December 2022

Guest Column / Hardayal Singh

sor at the University of Bath and an international
authority on fiscal psychology, invited our attention to
one of his studies. Taxpayers the world over, he pointed
out, demand all kinds of freebies from their govern-
ments – better hospitals, schools, unemployment
allowances, old age pensions, etc. Their enthusiasm
wanes considerably when they have to pay higher taxes
to obtain these benefits.

PUBLIC REVENUE & PUBLIC SPENDING
Prime Minister Modi appears to have emphasised this
very point: Taxpayers who wrote to him were able to
make the required fiscal connection between public
revenues and public spending.

They supported public spending only when it resulted
in genuine welfare measures but did not want politi-
cians and bureaucrats to squander the state’s resources
frivolously, especially on freebies designed to win
brownie points with vote banks.

Budget
Ruminations: How to
Disburse Subsidies

R But there lies the rub. Although the statistics of the
Income-tax department in our country show that the
ECENTLY, PRIME MINISTER Narendra Modi made a number of taxpayers on its rolls has now increased to
telling point: taxpayers, he said, resent their hard- more than 84 million, only 1.13 per cent of our popula-
earned income paid as tax being wasted on freebies, but tion (about 15 million) actually pay tax. The rest get
are ready to pay even more tax, if revenues are genu- away by claiming deductions which reduce their
inely used for uplifting the poor. Implicit in this state- incomes below the exemption limit.
ment are three important thoughts for fiscal reform for
consideration of the Finance Minister in the run up to So one major challenge before the present govern-
the forthcoming Budget. ment is to find ways to make more people make the fis-
cal connection between taxes and public spending. This
The first of these takes me back to the freezing is possible only if more people from the middle class
January morning of 1992, when Alan Lewis, our profes- begin to pay taxes. A strong, well informed public opin-
ion emanating from such people may well restrain
political parties in power from announcing vote catch-
ing but unsustainable subsidies.

Better quality public spending may also happen if
both the Central and state governments are compelled

34 | BW BUSINESSWORLD | 03 December 2022

Although the statistics of the Income-tax department in our country show
that the number of taxpayers on its rolls has now increased to more than 84
million, only 1.13 per cent of our population (about 15 million) actually pay
tax. The rest get away by claiming deductions which reduce their incomes
below the exemption limit. So one major challenge before the present
government is to find ways to make more people make the fiscal connection
between taxes and public spending. This is possible only if more people
from the middle class begin to pay taxes

to transparently transfer all benefits (rather than just a ter both for us as well as them to give them a monthly
few) to the bank accounts of the targeted beneficiaries. stipend. This way we don’t distort the price of any good
This is the second reform implicit in the Prime or service, and they also learn to live within a budget,”
Minister’s statement. Direct transfer to bank accounts he explained.
of the targeted beneficiaries is a far more efficient way
of disbursal than income tax reliefs or grants that go to Following this one fundamental principle could
reduce the cost of consumption or production of goods. have prevented many distortions in our economy.
Farmers in Punjab and Haryana, for example, would
This way the government, taxpayers and the society not have been seen fighting for more remunerative
at large can know how much subsidy is being given to minimum support prices. Nor would they have grown
whom, for what purpose and at what cost. The govern- paddy in unsuitable climatic conditions of Punjab and
ment can also immediately know whether it can afford Haryana.
the subsidy or not.
Finally, the PM also implied that nothing in life
SUBSIDIES & PRICE DISTORTIONS is free. As significant as the direct cost of a benefit is,
The librarian of our university explained this reform to its opportunity cost – the benefit – is lost when the
me. “We can, if we like,” he said, “provide you free pho- same resources cannot be put to an alternative use.
tocopying facilities, instead of charging ten pence per Subsidies, therefore, should never be based on populist
copy. This price however helps us to cover our costs for considerations but on well- considered social cost ben-
providing you this facility. When you pay a price you will efit analyses.
make copies only of articles you really need. This prevents
overuse of the machine; also, the service pays for itself. The writer was Chief Commissioner of Income-tax and is the
author of the Moral Compass – Finding Balance and Purpose
“When we want to help poor students, it is much bet-
in an Imperfect World (Harper Collins India, 2022)

Photograph by Boykung 35 | BW BUSINESSWORLD | 03 December 2022

COLUMN ByShuva Mandal and Saurabh Bindal

Left to right:
Shuva Mandal,
Managing Partner,
& Saurabh Bindal,
Partner,
Fox Mandal &
Associates LLP

Privacy:
A Utopian Dream

T HE CONSTITUTION that “no person shall be deprived of his life or personal liberty except according
of India gives to “we the to procedure established by law.” Having a life with liberty forms the basic fabric
people” what are known of the Constitution. Life and Liberty cannot be denied to any person except as per
as fundamental rights. procedure established by law. When the Constitution was drafted, the Constituent
These rights were so Assembly had already debated about the pros and cons of not using “due process”
inalienable to a human under Article 21.
being that the drafters
deemed it fit to put them in the text of The Courts in India have interchanged the periphery of Article 21, which was
the Constitution. These were brought circled by “procedure” established by law to read it as “due process”. Article 21, today,
in to reinforce the dream of having a stands as the vanguard of fundamental freedoms of an individual. It has been read
dignified life, which of course, becomes to include the right to health, the right to sleep, right against noise pollution, the
part and parcel of human autonomy. right to shelter, the right to food, and so on and so forth.

This dream was envisaged by the Privacy as a Right
drafters because of the struggle for Privacy, the right of an individual to be private about his affairs and that might in-
freedom. One such fundamental right clude his personal details, was never envisaged as a particular right in the Constitu-
acknowledged in the Constitution was tion. In 1954, in the matter of M.P. Sharma and Ors. v. Satish Chandra and Ors. (AIR
the right to life under Article 21. 1954 SC 300), the Supreme Court, while addressing the issue of powers of search,
seizure, and constitutional propriety, held that the drafters of the Constitution had
Article 21 of the Constitution states

36 | BW BUSINESSWORLD | 03 December 2022

not drafted the right to privacy in the
text of the Constitution and therefore,
the same could not be read as part of the
Constitution. It is pertinent to note that
in the entire case, the parties did not ar-
gue about the right to privacy, however,
the Hon’ble Court made these observa-
tions, which eventually one would see
did not hold ground for much long.

The M.P. Sharma debacle was fol-
lowed by the Supreme Court in Kharak
Singh v. State of U.P and Ors. (AIR
1963 SC 1295), wherein the majority
of judges held on the lines of the M.P.
Sharma case. Kharak Singh involved a
challenge to Regulation 236 of the U.P.
Police Regulations, which involved se-
cret picketing of a habitual criminal’s
house, nightly domiciliary visits, peri-
odic inquiries by police officers, as well
as tracking and verification of habitual
criminals.

Justice Subba Rao’s Observation It is very interesting to note that Justice Subba
It is very interesting to note that Justice Rao, giving a minority opinion on the Kharak Singh
Subba Rao, giving a minority opinion judgement held that the right to personal liberty
in the Kharak Singh judgment, held under Article 21 of the Constitution takes in not
that the right to personal liberty under only the right to be free from restrictions placed on
Article 21 of the Constitution takes in movements, but also free from encroachments on
not only the right to be free from re- one’s private life. Justice Subba Rao, under Article 21
strictions placed on movements, but read privacy as an essential right
also free from encroachments on one’s
private life. Justice Subba Rao, under marking of the periphery of right to privacy. Finally in the case of Justice Puttas-
Article 21, read privacy as an essential wamy v. Union of India ( (2017) 10 SCC 1), the Supreme Court gave its stamp to the
right. It was the Maneka v. Union of In- right to privacy as a fundamental right.
dia (AIR 1978 SC 597) judgment by the
Supreme Court that turned the tides. The Justice Puttaswamy case
The petition filed by Justice Puttaswamy was a case that sought to challenge the
It upheld the inter-relationship of constitutional validity of the Aadhaar card scheme. The judgement was rendered
fundamental rights. It further led to by a nine-judge bench that was referred the case by a three-judge bench. While
reading of rights in the Constitution, referring the case, the three-judge bench held that judgment on the M. P. Sharma
which otherwise did not form part of it. case had been rendered by a Bench of eight judges and the judgment on the Kharak
The Court in the Maneka Gandhi case Singh case by a Bench of six judges. Both these benches have held that the right to
upheld the minority view held earlier in privacy is not a constitutional right. However, much smaller benches, subsequently
the Kharak Singh case that had read the have held it to be a constitutional right.
right to privacy in the text of the Con-
stitution. In order to bring judicial propriety, it was appropriate to refer the question to a
larger bench of nine judges. The nine-judge bench held that the right to privacy can
Post the judgment on the Maneka
Gandhi case, significant strides have
been made to read the right to privacy
under the Constitution. This led to

Photograph by Bivash Banerjee 37 | BW BUSINESSWORLD | 03 December 2022

COLUMN By Shuva Mandal and Saurabh Bindal

Photograph by Yod67 Justice B. N. Srikrishna Panel
The Puttaswamy Judgement led to the formation of the
be read to be part and parcel of different Justice B.N Srikrishna Committee in 2017. The Justice B.N
Articles under Part III of the Constitu- Srikrishna Committee was given the task to:
tion. l (i) examine various issues related to data protection in In-
dia,
In the Puttaswamy case, an argument l (ii) recommend methods to address them, and
was raised by the Union that since pri- l (iii) suggest a draft data protection Bill.
vacy as a concept is covered by differ-
ent statutes, there is no need to accord The draft Bill, known as the Personal Data Protection Bill,
“privacy” the status of a fundamental 2018, was presented to the Ministry of Electronics and Infor-
right. The statutes being referred to mation Technology by the Committee on 27 July, 2018, with
are the Information Technology Act, the objective of protecting the autonomy of individuals with
2000, the Credit Information Compa- respect to their personal data, specify norms of data process-
nies (Regulation) Act, 2005, the Right ing by entities using personal data, and set up a regulatory
to Information Act, 2005, the Collec- body to oversee data processing activities. The said Bill was
tion of Statistics Act, 2008, the Protec- never tabled before the Parliament.
tion of Children from Sexual Offences
Act, 2012, the Juvenile Justice (Care The Government of India, in line with the Personal Data
and Protection of Children) Act, 2015 Protection Bill, 2018, tabled the Personal Data Protection Bill,
and the Aadhaar (Targeted Delivery of
Financial and other Subsidies, Benefits It is underscored that though privacy has been
and Services) Act, 2016, there is no need given the status of a fundamental right and
to accord “privacy” the status of a fun- individuals can get the same enforced against
damental right. the State, a robust law, for protection of personal
data, that forms part of informational privacy of an
However, this argument was negated individual is the need of the hour
by the Court on the basis that a funda-
mental right stands on a different ped- 2019 before the Lok Sabha. The Bill was thereafter referred to
estal than a statutory right. The Court a Joint Parliamentary Committee that gave its recommenda-
further in the Puttaswamy case, com- tions on the Bill in 2021. However, the Bill was withdrawn by
mended the Union of India to make law the Government of India this year.
regarding the protection of personal
data. It held that informational privacy A Fundamental Right
also forms part of the right to privacy. It is underscored that though privacy has been given the sta-
tus of a fundamental right and individuals can get the same
enforced against the State, a robust law, for protection of
personal data, that forms part of informational privacy of
an individual is the need of the hour. As held by the Hon’ble
Supreme Court in the Puttaswamy case, privacy can only be
curtailed by the State, based on a law that is reasonable and
has proportionality attached to it.

In today’s world, everything is information driven. There-
fore, it becomes more important that the personal data of
individuals be protected from private players. Unless, this is
done, Privacy appears to be a utopian dream.

Shuva Mandal is Chairman and Managing Partner,
Fox Mandal & Associates LLP and specialises in corporate, mergers and

acquisitions and private client advisory
Saurabh Bindal is Partner, Fox Mandal & Associates LLP

38 | BW BUSINESSWORLD | 03 December 2022

L ATE Shri Pralhad P. Chhabria, the PRALHAD
founder of Finolex’s autobiography
tailored into a short film named – AN
“Pralhad” by Finolex has finally made INSPIRING
its digital debut on YouTube. The plot SAGA
of the film is centred on Shri Pralhad P. Chhabria’s
commercial success during the early years of Indian Pralhad, a short film based on the
industrialisation, and it incorporates the key principles
of Finolex Industries. The online world premiere of this life of Late Shri Pralhad P. Chhabria,
short film “Pralhad,” which chronicles the incredible
early steps of a 14-year-old boy who turned a meagre the Founder of Finolex, was
investment of Rs. 10 into a corporation worth Rs.
10,000 crores, has finally occurred. Aabid Shamim, released recently. The audiences
Annapurna Soni, and Chinamay Das have all appeared
as extras alongside Ritvik Sahore, who plays the late have reviewed this masterpiece as
Shri Pralhad P. Chhabria.
a highly recommended film with a
The film, based on the book “There’s No Such Thing
as a Self-Made Man” has Ritvik Sahore, best known for feel-good inspirational story which
his role in “Laakhon me Ek,” as the lead protagonist.
Following its release, it gained popularity on social lifts one’s spirits and fuels positive
media sites by trending with the hashtag “Celebrating
Pralhad.” Among the film festivals that have praised and productive thinking
it are the Moscow International Film Festival, the
London Film and Television Festival, and the Prague with or humanity at large. The life of Shri Pralhad P.
International Film Festival. Chhabria, the renowned Founder of Finolex Group,
inspired Schbang Motion Pictures. Though his life
When asked about his excitement for the successful is worthy of a feature film, we are delighted to share
launch of the short film on YouTube, Mr. Prakash P. this one incident with the world through our short film
Chhabria, son of late Shri. Pralhad P. Chhabria said, ‘‘Pralhad’’. The company he founded is an inspiring
“This story beautifully illustrates the real values story worth studying for future generations of Indian
of life very closely. We hope that this film inspires entrepreneurs,” said Harshil Karia, the film’s producer
all entrepreneurs starting today with the Indian and founder of Schbang.
entrepreneurship ethos. It is the ideal combination of
understandingpeopleandhavingakeenunderstanding Finolex, the company that has been providing high-
of today’s society. Late Shri Pralhad P. Chhabria, the quality products to customers in both urban and rural
founder, is proof of this.” areas since 1981, has made a financial contribution
to this Schbang Motion Pictures production. Finolex
“We are constantly looking for powerful stories has become one of the most well-known brands in the
that need telling, whether for the brands we work Indian market as a result of Pralhad P. Chhabria’s
mathematical ability and belief in the supremacy
of engineering. The late founder’s family business is
thriving today to serve Finolex’s loyal clients, with over
900 dealers and 21,000 retail touch points spread across
India. Finolex has greatly aided India’s plumbing
and sanitation initiatives, as well as its agricultural
endeavours. The plot of the short film expertly
incorporates each of these prodigy’s ideal characteristics
and inspires the generation of the upcoming budding
entrepreneurs and businesspeople.

39 | BW BUSINESSWORLD | 03 December 2022

Noorings [email protected]

THE CRUEL CRUEL likes of the metaverse and artificial
TECH WORLD intelligence platforms not deliver-
ing, the changes in online shop-
A sector that continues to be the cornerstone ping and hybrid lifestyle behaviour
of many of the present-day growth stories is facing apart from the global slowdown.
a tough period not only for the businesses involved
Indian tech players continue to
but also for its people grow but India, given that the
country serves as a large base for
T by Noor Fathima Warsia these firms, is affected and the im-
HE YEAR 2022 unfortunately would end up becoming one pact is in several forms. Senior
that was about cost restructuring and layoffs. Throughout the leaders are looking at new chap-
year, grim news kept coming from the startup sector, wherein ters and younger employees are in
while edtech was perhaps the worst hit, the likes of ecom- the market before they could
merce, social commerce, delivery apps, auto and cab share spend enough time at their cov-
services and mediatech companies were not spared either. eted workplace.
In hindsight, one wonders whether the writing was on the
wall, given that most of the hit platforms were facing challenges due to the There are also changes in struc-
changes in how consumer behaviour was changing again and how tech-fo- ture in cases such as Meta. The
cused initiatives like online learning or online shopping were impacted. newly appointed Meta India chief,
Sandhya Devanathan, who begins
Twitter was the first to occupy headlines for its layoffs. While the primary her role in January will report to
reason was the change in the microblogging platform’s ownership and Elon Dan Neary, the vice president of
Musk’s plans for the company but the starting point revolved around Twit- Meta for the Asia Pacific region.
ter’s performance itself. It did not take long for the big tech companies and This hierarchy goes back to the
others to follow suit. Meta initiated a layoff of 11,000 people, Amazon is let- pre-Ajit Mohan era. Mohan was
ting go of approximately 10,000 of its staff and Alphabet said it would sack the first Meta, then Facebook,
about 10,000 ‘low-performing’ employees. Microsoft, Snap and Shopify are head to report directly to the US.
some of the other names that joined the list even though the numbers were
much lesser. Does this shift mean that India
is losing significance for global big
Different reasons have been cited for the ‘colossal’ losses. These include the tech firms? Hardly. Markets such
as China are not open to these
companies and India is the big-
gest marketplace they have in
Asia. Since Asia’s tech economy
will continue to grow, India will
continue to be important. How-
ever, there is no denying that
these moves create pressures and
will demand more from the In-
dian professionals in these firms.

Even though some of these
pains are short-termed but in
comparison to the last few years,
it appears as if the honeymoon pe-
riod has ended. Layoffs in droves
leave a sense of insecurity and
risk. This was not the modern
world’s tech dream so far. ‘Math
men’ are facing new challenges.
And this means the year ahead
will see many interesting changes
in the tech sector, where India will
continue to play a pivotal role
globally.

40 | BW BUSINESSWORLD | 03 December 2022

IN CONVERSATION

UNLOCKING Arré Voice is disrupting the audio
THE space beginning with women
creators. In an interaction
POTENTIAL with BW Businessworld, Niyati
OF VOICE Merchant, Co-founder and COO,
Arré spoke about the app, the
opportunity and their future
plans. Excerpts:

What is the strategic intent be- real-time feedback from women
hind Arré Voice? using the app along with roll-
Arré Voice was conceived with ing out access to other genders
the goal of tapping the creator in on the platform. The app is cur-
everyone and the potential enter- rently for Android users only but
prise in every creator, starting with will be available on iOS this year.
women. The online world mirrors We have several new features
the offline, in terms of safety and planned to improve the user expe-
opportunities for women and rience, showcase talent and move
this presented us an opportunity towards monetising content for
to invert the lens on the creator women creators through creator-
ecosystem and build one that was led transactions. Currently, we
women-first. Arré Voice aims to are onboarding creators in Hindi,
start this journey right at the be- English, Tamil and Telugu and
ginning of the creator value chain, soon plan to open up to most In-
by providing tools to enable any- dian languages including popu-
one with potential talent (citizen lar dialects followed by a global
creator), to be a pro-creator, and rollout. The app has communities
eventually monetise on or outside across music, storytelling, mental
the app, while we continue to work wellness, K-pop, language learn-
with professional creators through ing and more, each creating fun
Arré Studio. This is the new blue- and interesting use cases of the
print for Arré and it throws open 30-second Voicepod format.
business models outside of advertising and subscription
towards more creator/community-led monetisation tools. What about the growing influence of the creator econ-
omy?
Why did you choose Voice? The journey of a citizen creator to become a professional crea-
Voice is a straightforward and honest form of expression and tor has been disrupted through apps like Instagram, YouTube
consumption. It is appearance, language and literacy-neutral, and other SFV apps that allow anyone with a smartphone
making it easy to invite anyone with a smartphone to be a to create for easy discovery. We have seen an expression of
creator. We have enabled features to allow for consumption a vast amount of content, the discovery of talent, building
time on social media actively as well as screen-free and hands- of potential brands and businesses, which were previously
free time while performing daily tasks. With audio, we aim untapped. This has not only provided consumers with a range
to reach the widest possible creators at the lowest possible of entertainment options beyond the traditionally known
production costs. premium long-form content but has also led to a redefinition
of what audiences perceive to be premium content, fuelling
What are your plans for growth? a completely new and growing creator economy. For many,
Women and those who identify as women are currently in- this began as a means of expression which moved from a side
vited to use the app. We are constantly updating our product hustle to becoming the primary source of livelihood. Arré
features to strengthen safety and community rules, based on Voice seeks to capitalise on precisely this tailwind.

41 | BW BUSINESSWORLD | 03 December 2022

THE MEGACOVER STORY LOGISTICS

LOGISTICAL

The National Logistics
Policy (NLP) seeks to
galvanise the sector into
an integrated, cost-
efficient, resilient and
sustainable ecosystem,
revving up economic
growth
By Ashish Sinha

42 | BW BUSINESSWORLD | 03 December 2022

INTEGRATION

A

S INDIA CHASES the kind of growth
that will make it a developed country
by 2047, it is seeking to set its economy
in order one sector at a time through
policies that it hopes will help remove
all bottlenecks and promote efficiency
and competitiveness.

A case in point is the recently an-
nounced National Logistics Policy
(NLP) the successful implementation
of which is expected to enhance the
overall economic prosperity by lower-
ing the cost of doing business and en-
suring seamless movement of goods. It
will ensure that India compares favour-
ably with the best countries in global
benchmarks by 2030 in the Logistics
Performance Index ranking. How?
By addressing infrastructure and pro-
cedural gaps, adopting international
best practices to improve linkages with
global value chains and developing
green channels for EXIM (export im-
port) trade.

“The creation of an integrated plat-
form to bring all the agencies and docu-
mentation systems is a mammoth task,”
says Mihir Shah, Partner – Government
and Public Sector (GPS), EY India. “But
the policy paves a path for the develop-
ment of the Unified Logistics Interface
Platform (ULIP) and Ease of Logistics
Services (e-Logs),” he adds.

43 | BW BUSINESSWORLD | 03 December 2022

COVER STORY LOGISTICS

Gati Shakti and
the National
Logistics

Policy

together are
now taking India

towards a new
work culture

ULIP is an integrated platform that making, lower cost of servicing, efficient infrastructure with changes such as In-
seeks to bring together 30 systems of deployment of resources and reduc- dian Railways offering the land it owns
seven ministries that are directly or in- tion in time to market with a lot more at 1.5 per cent lease instead of earlier
directly involved with the logistics sec- transparency built into the system,” says 6 per cent, which made many projects
tor by way of developing around 102 ap- Jagannarayan Padmanabhan, Director, unviable.”
plication programme interfaces (APIs) CRISIL Market Intelligence & Analyt-
covering nearly 1,600 fields. E-Logs or ics. Unveiling the policy at Vigyan Bha-
a digital system for registering, coordi- wan in New Delhi on September 17,
nating, and monitoring the resolution But the moot point is how long will it 2022, Prime Minister Modi called it a
of user issues, is being developed on take for the policy to take effect? “The significant step in fulfilling the ‘pran’
which authorised user associations will impact will start showing over the of India becoming a developed coun-
register and upload their issues/sugges- course of next 12 to 18 months while a try. “To ensure quick last-mile delivery,
tions. These two will enable informa- few interventions will take long to show end transport-related challenges, save
tion exchange on a real/near real-time visible impact,” says Ravi Jakhar, Chief time and money of the manufacturers,
basis amongst all stakeholders involved Strategy Officer, Allcargo Logistics. prevent wastage of the agro-products,
in the logistics ecosystem. “The visible impact that will be felt on concerted efforts were made and one
an immediate basis is speeding up of of the manifestations of those efforts is
“There was also a need to benchmark the processes related to clearances as today’s National Logistics Policy”, the
and standardise the infrastructure and there is provision for several measures Prime Minister said.
services across all the touch points. The that make it easier for businesses to
New Logistics Policy at its core aims to engage with government agencies and While declaring that the PM Gati
provide this uniform look and feel to fasten the pace for requisite approvals Shakti National Master Plan would
all stakeholders concerned. The vis- and make it simpler and clearer. The be supporting the National Logistics
ible benefit would be in faster decision policy also supports development of Policy in all earnest, Modi also acknowl-
edged the support from states and the

44 | BW BUSINESSWORLD | 03 December 2022 Photograph by PIB

Union territories and mentioned that per cent (US and Germany) and 11 per duction in logistics cost by 10 per cent
almost all the departments had started cent in Japan. In India, logistics costs could increase the country’s exports by
working together. “A huge data of in- assessed using statistical models range about 5-8 per cent.
formation related to different infra- between 8 per cent and 14 per cent of
structure projects of state governments GDP. These assessments are not uni- The sector’s size is currently pegged at
has been prepared. Today, data from form and do not necessarily reflect the between $250 billion and $300 billion.
the central and state governments in ground realities of India. Thus, there The share of rail has come down consid-
about 1,500 layers are coming on the is a need to measure logistics costs for erably over the last three decades with
PM Gati Shakti portal,” the Prime Min- domestic as well as exim trade using improved roads and delayed freight
ister said, adding, “Gati Shakti and the an objective cost measurement frame- corridors. However, with renewed fo-
National Logistics Policy together are work. As per an industry estimate, a re- cus on freight corridors, rail is expected
now taking the country towards a new to increase its share significantly. The
work culture. The talent that will come
out of the recently approved Gati Shakti Rampraveen
University will also help it a lot.” Swaminathan,
Managing Director
Logistics Overview & CEO, Mahindra
Today, India’s logistics sector is ham- Logistics
strung by lack of skilled labour, lower
penetration of technology/digitisation, “Moving cargo away
non-standardised infrastructure assets from roads and toward
and administrative procedures, and alternative modes of
sporadic development of infrastruc- transportation (water,
ture. rail and air) will be
critical to lowering
Logistics cost is an important deter- logistics costs”
minant of economic activity. Specific
interventions to reduce logistics costs
are dependent on an objective assess-
ment of logistics costs. Logistics cost of
the top 10 countries (as a percentage of
GDP) ranges between approximately 8

Photograph by Perig76 45 | BW BUSINESSWORLD | 03 December 2022

COVER STORY LOGISTICS

sector, though highly unorganised, has breadth of the country. States may also Jagannarayan
already adopted digitisation through E- consider earmarking resources for the Padmanabhan,
WayBills, taxation post the adoption of development of logistics infrastructure Director, CRISIL Market
the Good and Services Tax regime and and adopt reforms in public procure- Intelligence & Analytics
the adoption of FASTag. These digitisa- ment policies,” says Shah of EY India.
tion efforts have made the movement “Thevisiblebenefitwouldbein
of goods across the country including In a recent interaction, Rampraveen fasterdecisionmaking,lowercost
last-mile deliveries more seamless and Swaminathan, Managing Director ofservicing,efficientdeployment
faster. With the National Logistics Poli- & Chief Executive Officer, Mahindra ofresourcesandreductionin
cy government is aiming to standardise Logistics said moving towards a mul- timetomarketwithalotmore
the processes over the next two years ti-modal way of transporting goods transparencybuiltintothesystem”
there by bringing the logistics indus- would be one of the bigger challenges.
try on a digital platform and make the Currently, nearly 65 per cent of India’s
overall industry more efficient and cost cargo movement happens using road
competent. transport which entails high input costs
including the fuel cost, delays etc. “Mov-
Logistics is estimated to have about
14.4 per cent share in India’s GDP. More
than 22 million people rely on it for in-
come. The Department of Commerce’s
logistics division was established on
July 7, 2017 and given the responsibil-
ity for an integrated development of the
logistics sector. In 2019, the sector was
valued at Rs 15.1 lakh crore ($190 bil-
lion). Ninetynine per cent of the sector
is unorganised and includes owners of
less than five trucks, brokers or trans-
port companies’ affiliates, small-scale
warehouse owners, customs brokers
and freight forwarders, among others.

Mega Challenges T.A. Krishnan, Ravi Jakhar,
CEO & Co-founder, Chief Strategy Officer,
The NLP provides a vision for the de- Ecom Express Allcargo Logistics
velopment of an efficient logistics eco-
system across the country. However, its “Although rail networks are “The policy also supports
success hinges on active participation much cheaper and could be an development of infrastructure
by states and Union territories to drive alternative, however, multi- with changes such as Indian
policy synergies and ensure effective modal system for handling Railways offering the land
implementation. Currently, 14 states cargos and parcels needs it owns at 1.5 per cent lease
and Union territories have developed to be in place to make this a instead of earlier 6 per cent,
their respective logistics policies along successful replacement” which made many projects
the lines of the NLP, and have compo- unviable”
nents like setting up of warehouses,
cold storage and container depots and
earmarking land to set up logistics
parks. “For 13 other states, it is in the
draft stage. It is of paramount impor-
tance that the remaining states/UTs
formulate policies aligned to NLP so
that synergies and economies of scale
can be achieved across the length and

46 | BW BUSINESSWORLD | 03 December 2022

ing cargo away from roads and toward 10% T.A. Krishnan, CEO and Co-founder,
alternative modes of transportation Ecom Express agrees, “Although rail
(water, rail and air) will be critical to The reduction in networks are much cheaper and could
lowering logistics costs,” Swaminathan logistics cost that be an alternative however, multi-modal
said. Another challenge is the lack of can to boostIndia’s system for handling cargos and parcels
proper logistics infrastructure, such as exports by about needs to be in place to make this a suc-
warehousing and cold chains, he added. 5-8 per cent, as cessful replacement.”
per an industry
According to Padmanabhan of The second challenge, according to
CRISIL, for NLP to become a mega estimate Krishnan, will be the creation of a uni-
success, it needs to overcome five ma- fied logistics interface platform and the
jor challenges. These are: to align the 65% adoption of digital infrastructure in
stakeholders with the common vision; the logistics space. “There are two clear
building an open source system which The share of the challenges with this: One, the integra-
can be a common interface; getting the cargo movement tion of various e-platforms will be a
states and their departments aligned to challenge as there are many e-platforms
this objective; working in a time-bound in India that and all of them need to be integrated
manner to showcase the results; and happens using seamlessly into one platform, which
building capacity at all levels and having road transport, will be a huge task. And second, the
training programmes. which entails high behavioural changes with a large set of
users of such systems, especially with
Jakhar of Allcargo believes that the input costs unorganised segments of businesses
dedicated freight corridors will bring relying on this, to increase adoption
in a paradigm change across the sector of this integrated system,” Krishnan
when operational. When the Unified adds. However, since the journey to-
Logistics Platform is integrated and wards digitisation for the country as a
becomes much more integrated across whole began a few years ago, it won’t
the spectrum of logistics stakeholders, be a humungous task to achieve this,
it would lead to transparency and vis- says Krishnan. And we certainly hope
ibility. To that effect, the key will be to so. To reap any benefits from key policy
begin with collaboration across various initiatives, all stakeholders must join
logistics stakeholders and implementa- forces to implement the project within
tion of the policy will be the key when it the specified time period.
comes to enhancing logistics competi-
tiveness. “The biggest challenge is on- [email protected]
ground execution of plans and we must @Ashish_BW
expedite freight corridors,” says Jakhar.

Photograph by Tryaging 47 | BW BUSINESSWORLD | 03 December 2022

COLUMN LOGISTICS

By JAGANNARAYAN
PADMANABHAN,

Director and Practice
Leader-Consulting,
CRISIL Market
Intelligence & Analytics

TOWARDS fragmented and has multiple stakeholders e.g. shipper,
AFFORDABLE transporter (road, rail, sea), customs, freight forward-
LOGISTICS ers, warehouse provider, etc. and hence there was a need
to standardise and align these processes and provide a
single view to all the stakeholders. There was also a need
to benchmark and standardise the infrastructure and ser-
vices across all the touch points — the new logistics policy
at its core aims to provide this uniform look and feel to all
stakeholders concerned. The visible benefit would be in
faster decision-making, lower cost of servicing, efficient
deployment of resources and reduction in time to market
with a lot more transparency inbuilt into the system.

THE NATIONAL LOGISTICS POLICY (NLP), Challenges
launched on September 17, 2022, provides
a much-needed fillip to the $150-billion lo- The challenges are quite a few. The most import ones
gistics industry. The policy aims to bridge the include aligning the stakeholders with the common vi-
gap between the logistics cost of India (14 per sion while building an open source system which can be
cent of cost of goods sold) and those of developed markets a common interface. Getting the states and their depart-
(8-10 per cent). ments aligned to this objective will also be a challenging
task especially while working in a time-bound manner to
The NLP envisages world-class infrastructure, mod- showcase the results. And last, but certainly not the least,
ern warehousing, digitalisation, regulations, tracing and will be the challenge of building capacity at all levels and to
tracking, ease of arranging shipment, and timeliness. have training programmes so as to ensure a level-playing
field between all stakeholders across states and their re-
The policy’s four critical features are integration of the spective departments.
digital system, a Unified Logistics Interface Platform,
Ease of the Logistics Services, and a system improvement With an eye on enhancing integration with regional
group. and global value chains, the NLP will have sector-specific
logistics plans, encompassing coal, steel, fertiliser, food
The logistics business, by its very nature, is quite grain, cement, and port connectivity.

48 | BW BUSINESSWORLD | 03 December 2022 Photograph Courtesy: Wallpaper

The NLP provides businesses gain access to af-
fordable logistics.
a much-fnieleldiped
Optimal cycles will en-
to the 150-billion- hance efficiencies and re-
dollar logistics duce carbon footprint for
industry the logistics industry, while
improved industrialisation
The national and state master plans will identify the will create job opportunities
optimal multimodal transport mix to decongest roads at scale.
by promoting railways, inland waterways and coastal
shipping. The industry has two
components: transporta-
An annual survey of logistics across states will be con- tion and logistics services.
ducted, focusing on three pillars — infrastructure, ser- In the last decade, the em-
vices, and operating and regulatory environment. phasis was on augmenting
transportation infrastruc-
Quicker Decision Making ture, predominantly na-
tional highways and, more
The NLP will smoothen inter-ministerial coordination recently, expressways.
for quicker decision-making and lower execution costs, Railways, another significant mode of transportation, is
helping micro, small and medium enterprises and small also attracting investments with budgetary support. Ports
have continued to see inflow of private capital. Govern-
ment-run ports are likely to be converted into the landlord
model over time, resulting in significant reduction in time
taken and, thereby, costs.

High Cost Of Logistics Services

Logistics services, including storage and warehousing, en-
tail relatively high cost and time as this component is more
fragmented, unorganised and geographically dispersed.

With improvement in logistics service delivery and
seamless data transfer, a meaningful modal shift is antici-
pated, i.e., rail and inland waterways taking a larger share
than roads, which currently hog 60 per cent.

This calls for state governments to align their policies
with the overall framework, build capacity at the district
level, and even mirror the structure of the Centre.

A high degree of private sector participation and open
access to data would help entrepreneurs build applica-
tions as per the needs of end-customers, which are varied
and well-diversified.

The ability to access data in multiple languages and feed
from the larger set of stakeholders is also critical.

To sum up, the NLP, along with the Gati Shakti pro-
gramme, can spawn sharper focus on this sector. How-
ever, as always, success will be a function of effective
execution, and sustaining efforts over an extended pe-
riod of time.

Photograph by Zhudifeng 49 | BW BUSINESSWORLD | 03 December 2022

COLUMN LOGISTICS

By ABHAYA
AGARWAL,

Leader - Infrastructure,
Government and Public
sector,

EY India

WHAT INDIA CAN LEARN FROM
GLOBAL LOGISTICS LEADERS

THE NATIONAL LOGISTICS POLICY (NLP) an- been launched to develop well-connected transportation
nounced in September this year defines the infrastructure. Gati Shakti, the National Master Plan for
future of logistics integration in India. Cost-ef- multimodal connectivity, is a digital platform for integrated
fective and efficient logistics are also crucial in planning and implementation of infrastructure connectiv-
making the country a manufacturing hub and ity projects. The Bharatmala Pariyojana (34,800 km) aims
increasing the role of exports in enhancing the economy of to optimise the efficiency of freight and passenger move-
the country. India’s current logistics cost is 16 per cent to ment on highways. Sagarmala’s objective is to unlock the
18 per cent of GDP but improved automation, digitisation, potential of India’s coastline and waterways with port-led
and mobility of the network of highways, expressways and development at its core.
other initiatives are expected to lower logistics costs to 10
per cent of GDP. To bring a perspective, Germany, about one-tenth the
size of India, has an integrated transportation infrastruc-
Globally, many countries and enterprises have undertak- ture consisting of a rail network of 40,327 km; highways,
en initiatives to bring about a sea change in their logistics railways and inland waterways of nearly 60,000 km; a road
strategies to become more competitive and there is ample network of 12,000 km; and inland waterways of 7,450 km.
evidence of the significant benefits received. India can take A more focused approach, therefore, is needed toward
a leaf from the book of successful case studies globally to building a well-integrated assets platform.
give the NLP a quick start for a faster and more effective
implementation. Defining a few of them below. Digital Transformation

Robust Integrated Platform The pandemic accelerated tech adoption in sectors that
depended heavily on logistics such as retail, e-commerce,
Over the past few years, several large-scale initiatives have FMCG, auto, healthcare and manufacturing. Using

50 | BW BUSINESSWORLD | 03 December 2022