Monday, March 15, 2010

Traffic Ramaswamy

I wish I have the time, dedication and courage to follow in the footsteps of Traffic Ramaswamy. Kudos, Mr. Ramaswamy.

For those of you who have not heard of him, there are a couple of stub articles about him, here and here.

Justice on the cheap

A brilliant observation from Pratap Bhanu Mehta's op-ed in the Indian Express.

Quotas are our justice on the cheap; as happened with SCs, once we gave them, we absolved ourselves of larger and more difficult ethical questions about discrimination and so forth. Formal representational equality makes it politically harder, not easier, to articulate the case for substantive equality.
Quite right. We've had a SC president, an SC Chief Justice. But at grassroots level, SCs are still discriminated againt. This is the fallout of our attempt at social engineering.

Wednesday, March 10, 2010

It's official! I need boobs (and a vagina)

No, I am not talking about fulfilling my sexual desires. Or any kinky tranny fantasies.

I considered (note past tense already) contesting the soon to be held BBMP Elections in Bangalore. I wanted to do some research on my home council and my chances of winning (given that I speak very little Kannada and that my target voters are English understanding, educated middle-class). I trawled the State Election Commission website to get details about where my ward/council is located. It is 195 - Konnankunte.

This is located in South Bangalore. Some initial analysis gave me some promising numbers. 31 parts, a total of 38608 registered voters (20381 male, 18227 female). Assuming that turnout is about 65% and of that if 40% votes are needed for victory, one would need about 10,000 votes to win. Not impossible, considering that there are 2-3 large apartment complexes in the ward which would be my target voter base. I chalked out a strategy as well. Print 15,000 flyers promoting myself. A couple of YouTube videos, which would hopefully go viral. A television / print interview if I am very lucky. I started having the right ideas.

But wait! Can I actually contest? So, I checked the rules list. There lay the sucker punch.

1. Every person whose name is in the list of voters for any of the wards of the municipal area shall, unless disqualified under this Act or any other law for the time being in force, be qualified to be elected at the election for that ward or any other ward of the minicipal area and every person whose name is not in such list shall not be qualified to be elected, at the election for any ward of the minicipal area:
Provided that a person shall not be qualified to be elected-
(a) To a seat reserved for Scheduled Castes or Scheduled Tribes unless he is amemeber of any of those castes or tribes;
(aa) to a seat reserved for Backward Classes, unless he is a member of such classes.
(b) to a seat reserved for women unless such person is a woman.
Umm...quick check. Is my seat reserved for SC/ST/BC/Woman? Let's have a quick look.Oh, wait, I cannot read Kannada (sorta dashes my hopes to win anyway). Scroll to 195...that's it...General...yes..but wait..what's that? General (Women). Ah fark.

So, by virtue of affirmative action policy, today I am unable to contest in council elections. I've also been denied the chance to study medicine. Or even think about pursuing a career in the civil services. For all practical purposes, I am among the millions who face reverse discrimination everyday in India. Thank you, India.

If only I had boobs.

Tuesday, March 9, 2010

A Preamble

The Preamble of the Constitution of India reads:

WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a [SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC] and to secure to all its citizens:

JUSTICE, social, economic and political;

LIBERTY of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity;

and to promote among them all

FRATERNITY assuring the dignity of the individual and the [unity and integrity of the Nation];


Few read the disclaimer.

Nothing in this article shall prevent the State from making any special provision for women and children.

Nothing in this article or in clause (2) of article 29 shall prevent the State from making any special provision for the advancement of any socially and educationally backward classes of citizens or for the Scheduled Castes and the Scheduled Tribes.

Hurrah. We're all equal as Indian citizens. Unless of course you're a Scheduled Caste, Scheduled Tribe, 'Other Backward Caste' (as opposed to?), or pretty soon; a woman. In that case, you're more equal than others. About 50% more equal, actually.

According to our government, an economically deprived Brahmin is of course more 'socially advanced' than his 'I'm-not-really-qualified-to-be-here-except-for-being-a-lower-caste' counterpart who's is on the third generation of the reservation dole.

Do you keep wondering, Dr. Singh, why we leave India and enrich the USA and others? I'll take my chances in a free society, thank you very much.

What a farce.

Monday, March 8, 2010

A list of things to make India better - Part 1

Now, I am not a professor of economics nor a person of the masses. But, I am a working citizen and a taxpayer. This is a list of ideas that I think should be implemented to make India better.

1) Removal of farm subsidies on fertilizer and electricity: This pushes the farming sector to ensure better better farming practices and become more energy efficient. It will aslo mean that lesser number of people will be involved in farming as only those with enough farm lands will survive the game. Political suicide, yes; supremely practical, yes. When people are removed from farming, they switch to other industries, which could do with skilled workers. Ideally, not more than 10% of our people should be farming. Imagine what we could do with those extra skilled workers.

2) Make high-speed broadband a reality and a fundamental right: The information age is the one which has propelled India into a high-growth economy. Yet, internet access at a non-commercial level has low prevelance, is expensive and absurdly slow. We need to make internet access a fundamental right and increase penetration. Government policy should allow for low cost, high speed broadband a reality for all Indians. If Australia, a country with two and a half times the landmass as India can do it, why can't we? India has only about 11% of the population using the internet, compared to about 48% for China. While mobile telephony rates are very low, internet access rates at extremely high. South Korea has the world's cheapest broadband internet. After adjusting for USD purchasing power parity, it comes to US85 cents a month per megabit. A simple calculation for USD PPP in India tells us that the purchasing power of 1 USD in India is about 17 rupees. (Nominal India GDP = USD 1,206,684, PPP adjusted GDP = 3,288,345, 1 USD ~= 45 INR). By comparison, an 8Mbps broadband connection in India  costs INR 2999 per month (navigate to link here), which means, the advertised monthly per Mbps is ~INR 375, or a whopping 19 times more expensive than in S.Korea.

3) Improve the postal system: India has an extensive and well developed postal system. It is also fairly efficient and cheap. But sadly, our postal system has fallen behind the curve and in the information age is not competitive. Proof lies in the mushrooming of numerous private courier services. Post offices are far and few between, unfriendly and time-consuming. It is time we used a model like that of Australia Post. It is fantastically efficient and highly competitive. Few simple things to make India Post better are:
  • Increase the number of post offices. There need not be full service offices, but should include essential services like ordinary, registered and speed post. Ideally, there should be a post office outlet within every 1 km radius at an urban center.
  • Bring technology to the post system. We must have the ability to buy and print postage online.
  • Make post office outlets multi-functional. They should sell stationery, packaging material, etc. How often is it that you've wanted to send a parcel and have fumbled for packaging? CDs, batteries, bestseller books; all stuff that one should be able to browse and buy at a post-office.
  • Tie-ups with corporates are essential. Most of the postal revenue is from non-personal mail. The post office should tie up with corporates and other offices to provide pickup services at the door. If I am say, a phone company, and need to send out 1 million phone bills, I'd happily use India Post if it can agree to provide me the option to pick up stuff at my office, instead of me having to go to the post office. This can scale from small to large volumes, guaranteed by the fact that businesses always have mail to send.
  • Rework the postal code. The postal codes are no longer as efficient. We need to have the ability to pinpoint to a single street in entire India using the postcode alone. A system similar to the UK, using alphanumeric postcodes or as in the US, using 'extension codes' are a good way to go.
Improving the postal system and providing increased broadband coverage would go a long way in improving online retail. If both are a reality, then online shopping can become real in India like it is in the US.

4) Roads and traffic: My pet subject. Make driving license tests stricter. Increase traffic fines. There is no sense if the speeding fine is only INR 300 when it costs about INR 150 for a single day in fuel costs. Ensure a 'points' system like the UK is followed. Automatic award of points for any and all traffice offences. Strict suspension or revocation if one gets too many points. Revenue sharing of fines between state government and police force, down to the last traffic cop. More on this in a separate post.

5) De-urbanization: Sounds contradictory to (1), doesn't it? But it actually means reducing the urban congestion at developed centers and developing alternate urban facilities. Tax-breaks, tax-holidays, deferred taxation are incentives that government can provide to promote business in lesser developed areas. Add road/rail/air connectivity, provide basic urban infrastructure of electricity, water and roads, provide tax-discounts to citizens moving there and you've done a lot to spreading the wealth and reducing your infrastructure issues.

Google gets it right again

Filed under entertainment. How appropriate.

Wednesday, March 3, 2010

Energy security and urban infrastructure - Part 2

Many days have passed since my last blog post. Unfortunately, my blogging seems to be sporadic at best. I've got a sinking feeling that this latest effort of mine will end up like previous efforts. In slow death!
Well, I've been busy with household chores, working out at the gym (yeah!) and figuring out how to sue the Government (uh-huh!).

Since my last post, Pranab-da, the darling of the Congress party has presented the Finance Bill in the Parliament for FY 2010-2011. A full speech transcript is available here. Hurrah for reducing my tax burden, Pranab-da. Job well done!

Apart from the changes in the direct taxes structure, there were 2-3 things that caught my eye as promising in the budget. Firstly, it was the increase in petrol prices. Secondly, the modification of fertilizer subsidy mechanism (strictly speaking, done before the budget). And most importantly, it was the plan outlay for infrastructure which is now a whopping 46% of the total plan.

Predictably, there is much outrage on the fuel price hike. There is much breast-beating going on with many Congress allies, especially the DMK and the Trinamool Congress demanding a rollback of the hike as it affects 'the common man'. The rationale is not difficult to follow: an increased fuel price means increased transportation costs, which means an increase in the prices of goods, especially foodstuffs; which really strains the food budget for any household, considering that food inflation has been at double-digits for a very long time now. Of course, they are quite prepared to ignore the massive fiscal deficit that the petroleum subsidy causes, and unwilling to discuss how they will overcome that. More importantly, they are unable to provide any concrete mechanisms for improving the transport infrastructure that will bring down transportation costs.

Let's discuss how transportation affects food prices. Not all food is produced where it is consumed and vice-versa. For food stuff produced in one location, it needs to be transported to its ultimate destination. Depending on the the perishability of food, the mode of transportation is chosen which affects the final cost. The fastest and most expensive transport mechanism is by air, followed by road, then rail and finally by sea or river freight. Foods which are not easily perishable, typically staples like rice, wheat and corn and best suited for cheap haulage by sea and rail. Fresh produce like meat, dairy, seafood and vegetables are best suited to be transported by road and to a good extent by rail as well. However, all food transportation will involve a certain percentage of road transportation which provides the 'last mile connectivity' to the supermarket shelves.

The final cost of a food product on a supermarket shelf is a sum of its component prices which include price at first sale, transportation costs, wholesaler and retailer margins, profit margins (for branded foods) and most importantly; costs incurred due to wastage. Wastage of food can occur either during storage (before and after harvest) or during transit. Let's consider a few food categories.

For a staple like rice, which has low perishability, wastage typically occurs at storage. Due to the policy of needing to maintain 'buffer stocks', millions of tonnes of rice are wasted annually while rotting at godowns of the Food Corporation of India. They serve no purpose (except to fatten rats) and cost millions of rupees which gets added to the final price of rice at the supermarket.

What about a more perishable food like bananas? We've all but forgotten about seasonal foods. Seemingly, all types of fruits and veggies are available year around? Miracle in agriculture or miracle of cold storage? I reckon it is the second. Because farmers are not encouraged to grow seasonal fruits and veggies, prices of fruits and veggies are increased due to the increased costs of storage. Further, cold storage facilities in India are highly suspect and deficient (blame it again on high capital and energy costs). This results in large scale wastage and again pushes up the costs. Not to forget that we're still lagging in the business of food processing which will turn perishable food into processed food instead of waste.

Lastly, highly perishable foods like meat, seafood and dairy. Luckily, the dairy revolution in India has meant that dairy prices are seemingly reasonable and within the grasp of the average Indian. Much needs to be done in the meat and seafoods. As our demand for meat and seafood increases, we need to better streamline the supply chain to reduce prices.

Sadly, an estimate of the cost of food wastage in India is pegged at Rs. 58,000 crores or about USD12.6 billion! This is a shocking figure in a country which is the poster child for a hungry nation.

Now, onto how transportation costs affect food prices. As we've already discovered, the cost of food must include the cost of transportation. So, in order to reduce the price of food, we must need to reduce the cost of transportation and also increase its efficiency. A more efficient transportation system will ensure lesser wastage which in turn decreases food prices. Tranportation costs are calculated as a function of weight and distance. In other words, how much does it cost to transport 2 tonnes of bananas over 1000km? Now, the reason sea and rail transport are cheaper is because of their ability to transport large quanities over large distances within specified transit times. A train needs to stick to its schedule and is usually not bogged down by hassles like traffic and border checkposts. So, in order for road transport to become cheaper and more efficient, we need to reduce the transportation cost/tonne and the time taken for transportation. Let's look at ways to do this.

The easiest way to reduce the cost of transportation per tonne is to increase the tonnage capacity of road vehicles which perform long distance haulage of food. Note that this also applies to non-food stuff. It is evident that higher capacity vehicles are more efficient at haulage simply because the capacity to cost relation is not linear. A 6 wheel, 10 ton truck is cheaper to run than a 18 wheel, 26 ton truck. But if you divide the running cost by the tonnage hauled, then the 18 wheel truck is more efficient by far. So, how do we promote the use of larger trucks for haulage. Simple answer: improve the highways and urban infrastructure. By providing highways that are capable of handling 18-wheeler trucks, you're providing the first steps to encourage people to convert to these vehicles. Most of today's National Highways are quite capable to handling 18-wheeler trucks, but not all. However, this must apply to every single km of national and state highways. There is no point of constructing a 100 km highway that can support an 18-wheeler if in the last 2 kms it becomes a one-lane highway suitable only for a 10-ton truck! Sadly, that is the case today. In developed western countries, it is not uncommon to see 18-wheeler trucks traveling downtown, because roads are constructed such that the maximum possible transport is done using these efficient vehicles. Is it any wonder then that prices of retail products in America and often cheaper than in India (after adjusting for purchasing power)? But that's only one piece of the puzzle. More important is to ensure that 18-wheeler drivers are comfortable driving on India's highways. Imagine driving a truck costing 1 crore rupees on the highway at a 110 kmph only to be slowed down by a cyclist coming down the wrong side. More on that later, though!

The other aspect is of course speed. Speed of transportation is critical for 2 reasons. Firstly, it reduces transit time which reduces the possibility of wastage due to spoilaeg, an important factor in food stuffs. Seondly, it allows a fleet operator to achieve quicker turnaround times thereby providing them with more trips in a time period. This allows them to reduce the margin charged on transportation costs and make it up by volume. It is not unsurprising to see hundreds of trucks to be stuck at border checkposts waiting to get the appropriate clearance. A quick and paperless way of flagging trucks through state borders is essential to achieve this. By creating a system akin to a flight plan, it is possible to reduce and eliminate unnecessary and time consuming border checks. For e.g.; a trucker needs to provide a 'flight plan' for the transport: typical stuff like origin, destination, weight, nature of cargo, etc. prior to the start of the journey. This can be done by the trucking company itself, without having to visit the notorious inspection office. This gets uploaded to a centralized system. Every border patrol office then has access to this data. In order to further streamline this, each truck which has filed a valid 'flight plan' is then tagged using a smart device (RFID?) which can then be read by remote devices at border patrol stations. This reader can then compare it against the previously uploaded 'flight plan' and determine if the truck is to be stopped or waved through. A cursory check to ensure that the contents are as yet sealed would ensure a simple and tamper-proof mechanism to prevent fraud and smuggling. Oh well, just an idea. Pipe dreams in India.

Finally, the most important takeaway from implementing the above 2 ideas. The improvement in road transportation will reduce our total consumption of fossil fuels. By reducing the fuel wastage due to vehicle inefficiency and wait times, the potential savings of fossil fuels is enormous.

Let's see where these ideas all go. Will I ever become energy and transport minister?