The auto industry is against the move to electrify transport. Is this its last gasp or does it have a point?

The automotive industry is being described by some, who feel the future is electric, as status-quoist. After all India’s two-wheeler manufacturers have openly attacked proposals by the NITI Aayog to make all sub-150cc motorcycles and scooters electric. So it is being ridiculed as ancient, not open to new ideas and scared of becoming extinct. But there are some severe issues with electrification in India that urgently need to be addressed and the industry, while dragging its feet on the issue, does have some points. The government and policy-makers would be silly to ignore them. While India has enough electricity, the electrical grid is nowhere near capable enough of handling the tremendous load that even disaggregated home-charging will place on the system. Of course, that will be built up over the next decades, but the other problem, that of cost, is not going to go away in a hurry.

Electric motorcycles and scooters are expensive, particularly if they have a functional range of over 100 km. The average commuter motorcycle costs around Rs 50,000 today, but an e-motorcycle with 100 km range will cost Rs 1 lakh at the bare minimum, possibly more. The batteries also will have a lifespan of around 1,500 cycles, which would be decent for a mobile phone, but you wouldn’t change your 100 cc motor after five years, would you? Nobody will buy electric vehicles for altruistic reasons, no matter how much greenmail the government and environmentalists indulge in, unless the motorist sees actual benefit of the product. In a two-wheeler, running on electricity is less than half as expensive as running on petrol. Even in extreme scenarios, that means a saving of Rs 500 a month. If fuel prices increase faster than electricity prices, buying an electric two-wheeler does not make sense and the government’s FAME-II subsidy scheme is but a drop in the ocean. The fact is the four-stroke 100cc petrol motorcycle brought mobility to millions of Indians, giving even the impoverished a mode of transport that empowered them economically. The economic impact of the motorcycle thanks to the mobility it produced was crucial to India in the late 1980s through the 1990s, much like the mobile phone in the mid-2000s and cheap over-the-air data today. Going electric is a noble goal but if we set targets in a very short-term, it will leave millions of Indians behind. It is elitist and if we are to work towards “sabka saath, sabka vikas”, we will need to work towards solutions that make environmental friendliness affordable.

Writer & Courtesy: The Pioneer

Mercedes-Maybach stands for the ultimate in exclusivity and individuality. The luxury brand combines the perfection of the MercedesBenz S-Class with the exclusivity of Maybach. Now the top model from Mercedes-Benz is even more refined. A new radiator grille, optional two-tone paintwork and new exclusive colour combinations in the interior ensure an even more majestic look. The world premiere is at the Geneva Motor Show (6.–18.3.2018).

A reinterpretation of the MercedesMaybach radiator grille with its fine, vertical struts accentuates the front end. The grille was inspired by a pinstriped suit. It celebrated its world premiere in the Vision Mercedes Maybach 6, the exclusive coupé study which thrilled connoisseurs and fans of the brand in 2016.

The two-tone exterior paint finish is also a classic Mercedes-Maybach theme. In future there will be nine different colour combinations available on request. The double clear coat is available as a further new option for all dark colours. It creates a brilliant surface finish with a piano lacquer effect and a
special impression of depth. The second bodywork clear coat, including intermediate sanding, is intricately applied by hand in the Maybach Manufaktur by specially trained varnishers.

The exterior look of the top model is rounded off by a new luxury 20 inch multi-spoke wheel. There are also three exclusive 20 inch wheels to choose from for the Mercedes-Maybach, including the wheel with a 20 hole design familiar from the Mercedes-Maybach S Cabriolet. Two new exclusive colour combinations
are offered in the interior: armagnac brown/black and savanna beige/black.

The black Maybach Exclusive nappa leather upholstery appointments can also be ordered with a choice of copper-, gold- or platinum-coloured contrasting topstitching. Also new in the range are trim inserts in design flowing lines Magnolia.

With a length of 5,462 mm and a wheelbase of 3,365 mm, the flagship of the Mercedes-Benz model range exceeds the long-wheelbase S Class Saloon by 20 cm in both dimensions. Rear passengers benefit from this increased size, as well as from standard equipment that includes Executive seats on both left and right and other exclusive details such as innovative voice amplification. The huge success of the Mercedes-Maybach speaks volumes: since the market launch of the Maybach in February 2015 over 25,000 MercedesMaybach S Class models have already been delivered to customers. In 2017, too, more than 1 in 10 S Class models sold was a Mercedes-Maybach.

By Romil Raj Bhagat Burau Chief – Middle East is based in Dubai.

Sales of cars and utility vehicles have taken a huge hit and upcoming changes in safety standards and emissions will drive sales even lower

The past few months have been particularly brutal for the Indian automotive industry. Sales of cars, utility vehicles, motorcycles, scooters and heavy commercial vehicles have all fallen, and no manufacturer has been spared. After several years of consistent growth, the market’s sudden decline has caught every manufacturer off-guard, and with several other producers making entry into India soon, it has made plans go awry. Over the past few years, the capacity of close to a million new vehicles has been added in India and with Korean car-maker Kia about to inaugurate its new facility in Anantapur, Andhra Pradesh, later this year, even more capacity is coming on stream. But everyone in the industry is puzzled by the scale of the decline and is wondering when sales will start growing again.

One reason, a line being parrotted by all large manufacturers ever since the four-decade-old veteran of the industry Maruti-Suzuki Chairman RC Bhargava mentioned it, is that sales tend to decline in the months leading up to a General Election. This afflicts not just the auto industry, but consumer sentiment is also depressed before elections simply because of political uncertainty filling the air. Consumers tend to hold on to their money lest a new Government comes in and changes policy. But the contagion for the Indian automotive industry started earlier than expected this electoral cycle, beginning with the devastating floods in Kerala that all but wiped out sales during the Onam festive period. The northern festive season while seeing some sales increases were muted as was the wedding season. Since 2019 rolled around, sales have jumped off the cliff — last month Maruti-Suzuki saw sales drop by a fifth over the same month (May) last year.

So the impending elections, where Narendra Modi romped home in a canter, cannot be the sole reason. Of course, outlier events such as the Kerala floods had an impact, but the decline in sales is a clear indication of economic distress. Even with some rate cuts making loans cheaper, several banks, particularly those worst affected by Non-Performing Assets crisis, have been reluctant to participate in retail loans. This is evident in fewer promotions and even advertising for car loans. The Reserve Bank of India’s aggressive series of rate cuts will serve no purpose in fostering growth if banks do not start lending again. However, with political stability and a need to boost the economy, there is a feeling that loan disbursals will kick into a higher gear soon.

But the industry will not be out of the woods that easily, for several reasons. First, there is a mandatory requirement of five years of insurance for all vehicles. This is a direct result of low rates of repeat insurance purchases, particularly for two-wheeler owners. At the same time, the Government has insisted on manufacturers adding safety features to their products. For car manufacturers this has meant everything from anti-lock brakes, two-front airbags minimum, reversing sensors and speed alarms. Two-wheelers, too, get newer braking systems called a Combined Brake Distribution (CBD) system. Higher rates of insurance will mean that many of the accident victims — and India has over 1,50,000 road fatalities heavily skewed towards pedestrians and two-wheeler users — will get some semblance of coverage.

In cars, some of these features had already started to become standard, so cost escalation will be minimal but in two-wheelers many of these features are relatively new. Mandatory insurance coupled with an increase in third-party insurance rates mandated by the insurance regulator has seen prices increase almost 10 per cent, driving a pin through the ballooning growth and bursting it. Sales for scooters, growing at a frantic pace over the past decade, have dropped by a third.

A bump in prices dictated by policy could be a temporary thing, but a double-whammy like this hurts sales in an already troubled consumer economy. And it is only going to get worse. A few years back, after a very polluted winter in the National Capital, the Government decided to accelerate the process of introducing new emissions norms. It was decided that vehicles would shift to Bharat Stage-IV (BS-IV) almost immediately and mandatorily introduce Bharat Stage-VI (BS-VI) norms starting from April 1, 2020. Skipping BS-V norms meant that manufacturers had to skip an entire generation and force them towards expensive innovation.

It has also meant that costs will go up on BS-VI vehicles — all of which will need new types of fuel treatment, injection, exhaust and catalytic systems. All of which add costs. While the automobile and commercial vehicles have moved to the comparable Euro-VI emissions standards in Europe, for two-wheeler manufacturers, the move to BS-VI is an all-new emission standard anywhere in the world, and India, as a result, will manufacture the world’s cleanest motorcycles.

Nobody can argue about these features. Extended insurance will help accident victims and owners and lead to proper measurable statistics for insurance companies leading to differentiated rates and better coverage. Better safety features should help manage road fatalities, although amendments to the Motor Vehicles Act, if cleared by the Parliament, will make the biggest difference. As for better emissions, it is apparent to all who live in the plains that air quality has dramatically worsened. Any action to improve it should be welcomed. Yet, there is also no doubt that this triple threat has hurt consumer sentiment with increased prices that might keep demand suppressed for longer.

This is not a good thing for the Government — the automotive industry directly employs one and half million people and indirectly supports over 10 million families. While changing policies, promoting safety and better emissions are good things, the Government should try to keep a measured approach when it comes to changing norms going forward, particularly with the push for electrification. There is no doubt that electric mobility is the future, but a healthy and thriving automotive industry is important. Changes in policy should not be made in a knee-jerk reaction or because of the need to follow global fads. There are huge challenges to adopt electric mobility in India and we are seeing the result of what poor policy planning can do to an industry.

(The writer is Managing Editor, The Pioneer)

Writer: Kushan Mitra

Courtesy: The Pioneer

Car sales have fallen in recent months. Is this because of consumer demand contraction and a lack of appealing models?

The Indian automotive industry is on the skids — after five years of increasing sales growth, the last couple of quarters have been devastating in terms of sales. In May, sales for the single-biggest driver of the Indian car market Maruti-Suzuki dropped 26 per cent on a year-on-year basis. Most other car manufacturers fared equally badly. While many in the industry had mentioned that there was a historical slowdown in consumer demand across categories, the slowdown this time has not only been steeper than usual but it began earlier and even as the elections concluded, demand remains quite slow. There is some expectation that demand might recover now that a stable Government has been sworn in, but with economic growth figures being depressed, any signs of growth might just be a mirage.

But is it all just about the economy? There are those, who believe improvements in public transport in major metropolitan areas — with Metro construction and the rise of app-based taxi services such as Ola and Uber — have played a role in the decline. That might be the case with a very small, select group of potential car buyers. But it is unlikely to have had a major impact on two-wheeler sales, let alone commercial vehicles, both of which are also suffering, thus hinting that the sales slump is all to do with the economy rather than changing patterns of ownership. And if it were not for the demand boost from private taxi owners, demand might have been even more muted. But in India, last-mile connectivity is still a problem even in cities with tolerable public transport. Commuters in areas such as the National Capital Region (NCR) have such huge distances to traverse that owning personal transport is a necessity for many Indians. So, how can the Government as well as the auto industry boost car sales? One way will be for the auto industry to wean itself off the large net margins it has for years, passing through some of the efficiency benefits. The Government, while promoting public transport, must realise that the automotive industry is vital to the economy and job-creation. It should rationalise some of the excise duty norms for personal transportation. In addition, muted economic growth would mean that interest rates are almost certain to come down but banks have to start issuing more loans. With a stable Government at the helm and economic growth high on Narendra Modi’s agenda, the industry should be able to recover smartly.

Writer: Pioneer

Courtesy: The Pioneer

China’s ‘Taobao’ model is worth emulating by Indian policy-makers to revitalise the e-commerce industry and harness multiplying effects of digital technology in rural areas

Soon, the din of a bitterly fought, fractious election, where the discourse veered around some of the most irrelevant issues, will recede  and the focus of the new Government will revert to policy interventions and formulating the forthcoming Budget. Economic policies of an elected Government have the single largest bearing upon the destiny of its polity. An increase in per-capita disposable income is one of the most vital indicators of successful governance and one that invariably favours the incumbent. Undoubtedly, the predominant electoral issue, which was relegated to the background, hinged on declining rural and urban income, decreased savings and slowing consumption. Conversely, closer to voting, poll dynamics showed that by March 2019, “net future expectations about the economy clocked a positive 48.6 per cent” as people were more optimistic about the larger economic course of the country in the likely event of Modi’s second coming.

With the median age of India’s population being 30 years, this aspirational demograph has gone past the roti-kapda-makaan basics of the last century to mobiles, internet and entrepreneurship. As forward planning yields results only after gestation periods of a three to five year lag, policy-makers will have to find ways to leapfrog job creation once the new regime is in place by June. India’s consumption story has been losing momentum in major sectors like FMCG, cars and two-wheelers and services activity — slipping to multi-quarter lows as income stagnates — which is reflected in declining rural demand. The next Government will be confronted with the challenging task of lifting investment sentiments by remonetising the economy as consumption fuels jobs and income from job-earnings fuels consumption in turn.

Policy-makers have a key role to play in fostering an enabling environment that supports innovation for both agri-entrepreneurship and micro-entrepreneurship. Consider this: The combined market cap of the three largest IT companies of the US — Apple, Microsoft and Amazon — equals India’s GDP and importantly, just the Chinese e-commerce major Alibaba’s m-cap equals 20 per cent of our GDP. These growth models necessitate that policy-makers fire on all cylinders with newer paradigms to kick-start innovation and growth in the IT enabled sectors as also focus on the nascent digital platforms as job-creators.

The focus of this article is specifically on rural e-commerce as a propeller for job-creation. This will need public private-partnerships with the likes of Amazon, Walmart, Reliance Retail and other e-commerce platforms on a national scale. The nascent e-tail market in India is projected to grow at 30 per cent annually, targeting $73 billion by 2022. Herein lies the biggest untapped job-creation potential, a prerequisite for which is deepening electronic payments through smartphones in order to reduce cash payments and encourage digital mode of transactions for online commerce.

China embarked on creating rural jobs a decade ago by implementing the ‘Taobao’ model for expanding employment avenues, alleviating poverty and vitalising the rural economy by harnessing multiplying effects of digital technology in rural areas. Consequently, e-commerce grew rapidly in China as trade volumes increased from less than 1,000 billion yuan ($120.8 billion) in 2004 to nearly 30,000 billion yuan ($4.44 trillion) in 2017.

The prototype has thrown surprising results for India to emulate: Though e-commerce is always more developed in urban areas, surprisingly online retail sales in rural areas grew faster than the national average. From 2014 to 2017, online retail sales in rural China increased from RMB 180 billion to 1.24 trillion, a compound annual growth rate of 91 per cent, compared to 35 per cent nationally. So, replicating this model in India, we can just imagine how this surge can alter the rural job-scape, which is in need of policy interventions. The experience in Taobao villages has sparked strong interest among policy-makers to tap the potential of e-commerce as a tool for poverty alleviation, financial empowerment for stay-at-home employment and rural vitalisation. The breakthrough was seen most in the ratio increase of women-to-men entrepreneurs in e-commerce being at near parity, compared to a ratio of 1:3 in traditional businesses.

The Alibaba Group initiative of the Rural Taobao Programme, in collaboration with the Government, supported rural clusters with real-time access to a wide range of goods and services, replacing the expensive brick and mortar shop-floor business model. This helped farmers earn more for their produce as they could directly sell their produce to urban consumers in online platforms. The programme required job-stepping multiple initiatives to streamline cross-country linkages in infrastructure by laying the ground work for service networks in counties and villages; providing training in e-commerce and promoting entrepreneurship; and developing rural financial services through the Ant Financial subsidiary of Alibaba.

The Rural Taobao Programme has now expanded from 212 villages in 12 counties in 2014 to more than 30,000 villages in 1,000 counties in 2018, spreading from the coast to inland. It focussed on improving rural e-commerce supply chains, promoting connectivity between agriculture and commerce and enhancing e-commerce training. The scheme grew rapidly and by 2018, had supported 1,016 demonstration counties, covering 737 poverty-stricken counties (89 per cent of the total), including 137 counties with extreme poverty (41 per cent of the total). The experience in China offers a compelling model to pursue as a ‘Global Best Practice’ prototype for India. The report demonstrated how digital technology has the potential to harness inclusive growth, unlike previous revolutions, especially when policies and public-private sector work in synergy. Experience in other developed countries has made for a compelling case to adapt and integrate digitally enabled ecosystems as an engine for transformational growth in providing jobs and enhancing livelihoods to the rural population at their doorstep, without the need to migrate to bigger cities.

Achieving inclusive growth is a vital pillar to achieve Sustainable Development Goals of the United Nations. To achieve this, digitisation has been proven to have had a multiplier impact on inclusive growth in China as its e-commerce market has become the largest in the world within a span of just 10 years, moving millions out of poverty. To further this model, it needs collective collaboration with best research minds globally to work together and evolve paradigms that will optimise the power of digitisation in order to bridge income and opportunity inequalities.

The data coming out of the Chinese model offers great insights into how India can integrate open e-commerce platforms with mobile payments and digitally based financial services “in order to support SMEs access larger potential markets than the gravity model for trade in the physical world.” Why this model is best adaptable in India is because the platform-centered ecosystem has low entry barriers for capital requirements and also because education and digital skill requirements are minimal, which is a perfect fit to India’s rural demographics, where people with low literacy levels can be gainfully employed.

China, too, was earlier a high-cash economy until the mobile payment revolution happened. Before the advent of digitisation, in the pre-digital commerce era, only proximity to a well-developed commercial area afforded residents access to an array of physical marketplaces and consumer products. Now through Alibaba’s Taobao and Tmall e-platforms, the average shopping distance on these platforms is close to 1,000 kilometres, compared with a few kilometers in traditional retail markets. And in less developed regions, people are buying a wider variety of consumer goods online, offsetting the disadvantages of their local markets. This has enabled 10 million SMEs and start-ups in remotest of villages to start businesses from home and work on flexi-timings, shrinking urban-rural income disparities.

As China leads the world in mobile payments and online money transfers with 1.25 billion internet users, digital footprints, Artificial Intelligence (AI) and algorithms are helping in risk-assessment in real time. “So now, Chinese startups have access to credit without collateral via the innovative ‘310’ credit model: 3 minutes to apply for a loan, 1 second to get it approved, with 0 manual interference,” signifying speed, precision and efficiency.

Digital platforms have evolved into an institutional form where they act as the nodal institutions to create an enabling environment for SMEs with support in marketing, product management, online operations, customer service, cash management, logistics, business advisory and data analysis, covering essentially every aspect of running a business. The Tao Factory platform on Alibaba connects 40,000 factories from more than 30 industries with Taobao sellers to form an integrated supply chain market. This calls for well-tested pilot-modules if the Chinese experience has to be successfully Indianised. Once disadvantaged groups can participate in the modern digital economy, positive results could follow in a sustainable way.

I personally anticipate unprecedented rapid structural and growth oriented reforms to gather pace under Modi 2.0 because ‘Team Modi’ will be on performance overdrive in his follow-on term. Modi has the pulse of the nation right, knowing too well that emerging India strives to enter the middle-income category, with a per capita income of $2,000, wherein the aspirational classes seek empowerment through an honourable livelihood instead of welfarist handouts by the State.

(Multiple references have been made from the Digital Technology and Inclusive Growth Report of the Louhan Report 2019. The writer is an author, columnist and chairperson for the National Committee for Financial Inclusion at Niti Aayog)

Writer: Bindu Dalmia

Courtesy: The Pioneer

By signing an executive order to protect its networks from foreign espionage, the US has drawn the first blood on what was hitherto whispered as a need to counter Chinese ambitions

US President Donald Trump recently signed an executive order on ‘Securing the Information and Communications Technology and Services Supply Chain’ that effectively walked the talk on clamping down on the growing Chinese presence and influence. While the order itself was ostensibly country-agnostic and company-agnostic, the unmistakable target was a leading Chinese company, Huawei. Predicated under security concerns, the statement from the White House said that the order, “declares a national emergency with respect to the threats against information and communications technology and services in the United States (US) and delegates authority to the Secretary of Commerce to prohibit transactions posing an unacceptable risk to the national security of the US or the security and safety of its people.” Soon, the US Commerce Department added Huawei to the ‘entity list’ of banned organisations. Against the backdrop of the ensuing US-China trade wars, this latest American salvo has huge implications for Chinese products and services going forward, as it questions the construct of “Made in China,” given the inextricable and complex Government-industry interlinkages that beset the ownership, interests and operations of major Chinese organisations.

Unlike most unilateral decisions initiated by Trump, this executive order had bipartisan support across the political divide, symbolising the overwhelming threat perceptions within the US that are emanating from China. The Huawei action was looming for some time and the US had been sabre-rattling on the same with other Western powers. While Australia had acceded to the warning and banned the organisation earlier, the European nations were sceptical about the US’ seriousness. Given that the Chinese multi-national had outmanoeuvered the European companies like Ericsson and Nokia in grabbing market shares across emerging markets of Africa, Latin America and Asia — the expectation of reciprocal protectionism would rise within Western capitals to support their own organisations as the Chinese state does.

The US went as far as threatening its allies to withdraw “intelligence” inputs unless they stopped using the Chinese manufacturers like Huawei for building their 5G infrastructure. At the heart of the fears is the new internet architecture that could possibly “link” industrial equipment, personalised data, security cameras and civic facility details among others and transport the data dump to a repository in China, from where a apocalypse-like situation of a virtual “shutdown” of American military-economic-civic infrastructure could be effected if China so wanted in a crisis!

Given the Chinese ambition, investments and strategic outlook, such fears of data protection are not entirely unfounded. Expectedly, the Chinese have likened the US move to a “cold war mentality” and alluded to the US fears as unsubstantiated paranoia. Given the construct of the organisation itself and the rules governing its principal place of origin and headquarters ie, China, it is certainly obliged and vulnerable to the diktats of its Ministry of State Security.

Like most Chinese offerings, the winning appeal of Huawei was in its cost-effective technology and terms of trade. However, the recent move has added a ‘non-commercial’ angularity of dealing with Chinese companies. Last year, the global list of top 500 companies, as measured by Fortune magazine, had an unprecedented 120 Chinese companies making the cut (just shy of 126 by the leading nation, US). This sudden emergence of Chinese companies owes its success in huge measure to the complex commercial-political wiring of Chinese organisations that baffles most corporate-watchers as to their real ownership and control structures. Founded in 1987 by a former People’s Liberation Army (PLA) officer, Ren Zhengfei, who now owns only one per cent of share, it has grown into a $106 billion global conglomerate with a mammoth $14 billion dedicated towards R&D. Despite its immense size, scale and the competitive intensity of its domain, it still grew at a staggering 21 per cent over the previous year. Today, it serves 45 of the top 50 telecom operators worldwide and its network already reaches one-third of humankind. Somewhere, questions abound about such rapid rise, access and the ‘invisible-hand’ that drives such surreal growth. Given its formidable presence and invaluable necessity in the infrastructure of some third-world countries, it will not be easy to ‘ban’ its products across such countries — though it certainly marks the beginning of larger implications for ‘Made in China’ that go beyond a corporate entity.

Partly on account of genuine fears and partly on account of the escalating trade war, the recent US move has drawn the first blood on what was hitherto whispered as a need to counter the Chinese juggernaut. In a barely veiled threat, the Chinese have reminded the US about its own vulnerabilities with American organisations like Qualcomm, who generate over half of their revenues from China, as indeed the likes of Intel and Apple, who rely on Chinese parts and market! Many of China’s strategic sovereign imperatives like the ‘One Belt, One Road’ or in this case, the ‘Digital Silk Road’, which promises hyper speeds and capacities of 5G (promoting ‘Internet of Things’) communication, envisages a pivotal role for organisations like Huawei. The sovereign intent on becoming a Cyber and Artificial Intelligence (AI) superpower has fuelled the Chinese State to support and fund many aggressive and audacious investments that make the world nervous, given the known Chinese ambitions and penchant for means. The temerity and commitment behind developing cutting-edge technology that could have multiple “spin-off” usage and data-sharing has the Western world worried.

The Chinese are past masters in reverse engineering and sourcing technology licitly and illicitly, especially in matters of defence equipment and overall security preparedness. However, due diligence and care has to be ensured with evidentiary proof of potential misuse or “leakage” before censuring or ascribing any questions on the Chinese organisations as it should not violate the principle of fairplay in the global economy. The onus is now on  China to demonstrate transparency and unveil its control and command structures behind its corporates as also convince the wary world of its intentions and ambitions. Unfortunately, it will be an uphill battle for China given its history and its prevailing instincts to convince the world, otherwise.

(The writer, a military veteran, is a former Lt Governor of Andaman & Nicobar Islands and Puducherry)

Writer: Bhopinder Singh

Courtesy: The Pioneer

India is home to abundant non-conventional energy sources such as the sun, water and wind that can be harnessed to supply reliable electricity to households and micro-enterprises

The pandemic and the resultant lockdowns put a temporary stop to economic activities across the globe, impacting millions of people and their livelihoods. The Asian Development Bank (ADB) estimates this loss to be around $4 trillion, which is nearly five per cent of the global Gross Domestic Product (GDP). As a young, developing nation with 65.97 per cent of the population still residing in the villages, the pandemic not only tested India’s economic resilience but also exposed the growing urban-rural divide and income inequality. As we continue to step up our fight against the Coronavirus, we are certain that the post-pandemic world would be different from what we left behind. The rebuilding exercise should, therefore, begin with rural India — where, as Mahatma Gandhi said, “The soul of India lives.”

Rural India has always found it challenging to unleash its economic potential due to a variety of fiscal and social factors. A major reason among them is the continued unavailability of reliable power. Per capita electricity consumption in rural areas still remains significantly low due to erratic power supply. Research data show that there is a strong positive correlation between economic development and electricity consumption. For example, China started growing at double digit when the demand and consumption of power in rural areas doubled and the small-scale businesses expanded rapidly. Similarly, rural India, too, has a growing demand for reliable electricity but due to supply side constraints, this demand remains partially unfulfilled.

How do we address the challenge and ensure reliable power for all? We must strengthen the last-mile power delivery system, which is largely dominated by State-run Distribution Companies (DISCOMS). But as DISCOMS continue to remain trapped in mounting losses and operational inefficiencies, last-mile power delivery has taken a backseat. The DISCOMs, therefore, need to streamline and strengthen their distribution networks with greater focus on enhancing customer satisfaction, timely complaint redressal, regularised billing processes and transparency in finances at all levels. Addressing challenges such as power theft and billing inadequacies can help DISCOMS enhance their delivery efficiency.

In addition, the proposed amendments to the Electricity Act, 2003, particularly the unlicenced sub-distribution and payment security mechanism, will boost private sector investments in the distribution sector, reduce their losses and strengthen operational efficiencies of DISCOMS. Private investments will not only help DISCOMS deal with financial stress but will enhance the quality of services and healthy competition. This will ultimately have a transformative impact on last-mile power delivery and ensure access to reliable power for rural households.

India is home to abundant non-conventional energy sources such as solar, water and wind that can be effectively harnessed to supply reliable electricity to rural households and micro-enterprises. Renewable energy provides low-cost power models and can be deployed even in remote areas despite the geographical barriers. Expansion of renewable energy-based mini-grids in rural India can be further incentivised and be provided additional policy support for generation and distribution of electricity at affordable rates to rural households.

Mini-grids serve as the primary source of electricity in regions where grid-connected power has not found its way yet. A recent survey on the impact of COVID-19 in mini-grid villages of Uttar Pradesh (UP) and Bihar revealed that 90 per cent of the rural households trust mini-grids for reliable power supply. However, despite mini-grids becoming a trusted source of reliable electricity for rural India, they often run the risk of reverse migration of customers to centralised grids when the necessary infrastructure is available.

This concern, however, can be addressed by integrating mini-grids with centralised ones to provide enhanced access to electricity supply. A fully-integrated power system is an optimal solution for electrifying un-electrified villages with reliable power. Integrated power supply models can minimise the cost by introducing efficient planning, investment and operation of assets with significant economies of scale. Ghana, for example, built an integrated grid, providing power to 85 per cent of its urban population and 41 per cent of the rural population. Integrated power systems can speed up the rural electrification process and ensure reliable supply.

The health and economic crises triggered by the pandemic clearly underline the significance of providing reliable power for all critical rural infrastructure such as health centres, micro-enterprises and schools. Productive uses of energy such as for irrigation, small businesses, tailoring, food storage and so on will further ensure adequate livelihood options for rural communities with greater economic resilience.

How will reliable electricity help rural India rebuild its economy?

Rural healthcare: This is a key area that will lead to a new economic revolution in the post-pandemic world. India’s healthcare preparedness was found to be inadequate during our fight against the COVID-19 pandemic. Primary health centres, which approximately serve 65 per cent of the rural populations, need to be modernised with state-of-the-art infrastructure, especially uninterrupted power supply. Reliable supply can provide crucial support to critical functions of these health centres, especially during medical emergencies. The survey also revealed that a majority of the rural households depend on community health centres for their medical needs. Inadequate and irregular supply of electricity may affect their functioning with critical implications for rural populations. Electrifying and modernising the health centres will, therefore, be a key step towards rebuilding the economy and reshaping the lifestyle of rural populations. Millions of dollars can be saved if rural populations have access to high quality healthcare services. This will not only have a lasting economic impact on  health delivery but will lead to better social outcomes such as improved health and hygiene.

Modernising agriculture: Farming remains the primary source of livelihood for nearly 65 per cent of Indians. Yet, agriculture productivity is significantly low in India and accounts for only 15.4 per cent of the GDP. The growth in agriculture has been moderate in the past decade at nearly three per cent per annum. Critical functions such as irrigation, harvesting, post-harvest handling and storage, all require reliable power supply. In regions where rainfall is scanty, groundwater is the main source of irrigation. Electricity demand in rural India is majorly driven by irrigation. Villages with access to electricity have seen an uptick in agricultural productivity with availability of low-cost irrigation technologies. For example, rural households that would sell paddy at a low price earlier sell hulled rice as there is an electricity-powered rice huller in the village. These are few of the examples of the transformative impact of reliable electricity supply. Modernising agriculture will unlock myriad employment and business opportunities for rural India.

Big push to micro and small businesses: Formalisation of the rural economy is an essential step in providing necessary infrastructural support to budding micro and small businesses. Reliable electricity supply encourages creation and expansion of new businesses in rural areas and can potentially open the door for greater economic activity and investments. Villages with access to reliable electricity have already seen the emergence of micro enterprises such as training centres for computer skills, coaching institutes and travel agencies. The income levels of households engaged in small business have witnessed a steady increase, too. These are replicable models that can be extended to other villages and reliable power can help rural India unleash its economic potential.

As we seek to rebuild the rural economy, reliable electricity will play a crucial role in promoting micro-enterprises, doubling farmer incomes and creating sustainable job opportunities. The cumulative impact of improved healthcare, modernised agriculture practices and rise in rural enterprises will be significant and will enable rural India’s transformation into a hub of economic activity. A new India is waiting to be born out of the COVID-19 pandemic.

(Writer: Jaideep Mukherji; Courtesy: The Pioneer)

A fear of surveillance made users switch to this platform but now it has admitted it has been compromised. What next?

Security and the knowledge that communications are direct and private are the underpinnings of any major communications service. So the knowledge that Whatsapp, the world’s most widely-used communication service with an estimated 1.5 billion users across the planet, was targetted by a private intelligence firm, wherein spyware could be installed on a target’s phone, is deeply unsettling. It is unclear how much access the spyware gave governments. The Israeli firm behind it claimed it only sold to governments it had ‘vetted’ but it is clear that the spyware defeated the purpose of the social platform encrypting its messages from end-to-end. It is also unclear how many people were impacted by the breach, how long it was active and who used the breach, which some suspect was the Saudi Arabian government. But it is clear that governments and intelligence agencies across the world are constantly searching for ‘backdoor’ entries to software systems, targetting everybody from political opponents and human rights activists to journalists or even spouses. In fact, in many countries, including Western democracies that take human rights seriously, laws allow spy and police agencies a huge amount of leeway to legally intercept calls and install spying software on devices.

Will this scare users away from WhatsApp onto other platforms that claim that they are even more secure? Unlikely as WhatsApp has a huge user base though smaller groups of users could use services such as Telegram to communicate, as several terrorist cells already do. Not that they are perfect. In fact, they are more than likely to have vulnerabilities that have been exposed by intelligence agencies and private firms and are being used by governments as we speak. In fact, larger services like WhatsApp can ironically be more secure because their large software development teams can patch up security holes quickly if they want to. And for most regular users of such applications and of software in general, there is usually nothing to fear, but when dictatorial governments use such intercepts without any judicial oversight, there is a problem. One thing is clear though. In the cat and mouse game of spying and information arbitrage, things are unlikely to change anytime soon. Software will always have holes that will be exploited. We can only hope that those doing the exploiting are not making fools of us all.

Writer: Pioneer

Courtesy: The Pioneer

Chris Hughes has argued that the platform is an existential threat to the world and needs to be fragmented

Facebook co-founder Chris Hughes made his millions when the social networking giant went public, but after that he has taken a strong advocacy point and even during a visit to India almost eight years ago, warned of the dangers of the social media platform. Now in an opinion piece in The New York Times, titled “It’s Time to Break Up Facebook”, he lays out in plain detail why the social media behemoth should be fragmented. In essence, he says, it is a clear and present danger to modern life and a threat to democracies. It is a cause taken up by US Senator from California and contender for the Democratic nomination for the 2020 US presidential election, Kamala Harris as well, who ironically represents the San Francisco Bay Area where Facebook is based. Other nations, too, particularly in Europe, have tried to look at ways to curb the social media giant.

But this takes us back almost 15 years when the world was railing against the massive power of another American technology giant, Microsoft. But look at where it is today. And while Microsoft is a pale shadow of the consumer company it once was, it remains a technology icon and a vital piece of the software puzzle. Breaking up Facebook may be as impossible to achieve as breaking up Microsoft was. However, there is little doubt that it does need to be reined in. It has played havoc with the media and has become a tool of fake news and promoting hate. Mark Zuckerberg might have a baby face but his company is doing more harm to humanity than helping it, and there needs to be a proper global consultation on how to combat social media firms and their viral manner of spreading news. Companies like Facebook and Twitter cannot use the fact that they are technology companies as an excuse to prevent being regulated like media companies, considering that they have played havoc with the rules and regulations of fairplay and objectivity. There is no doubt that technology has democratised the media, making it more accessible and able to demolish constructed narratives but it has also allowed hateful agenda to spread very fast with disastrous consequences. India should also sign up with other democracies and look to read the rulebook to Facebook.

Writer: Pioneer

Courtesy: The Pioneer

India does not even have a data protection policy. This is something that our policy-makers need to look forward to instead of batting for the right to be forgotten

As a concept, the Right To Be Forgotten (RTBF) evolved in the 1990s in western Europe and subsequently developed as part of human rights jurisprudence. France became a pioneer of this issue when it recognised the “right to oblivion.” This right was available to all convicted individuals, who had served their prison sentences. Often, in cases like these, social stigma is attached to individuals even after they have served their punishments. In general, people had ready access to the criminal history of such cases and the actual commission of a crime would perpetuate stigma. As a result, individuals suffered regardless of the geographical location.

The RTBF is reflected in Article 17 of the General Data Protection Regulation (GDPR) of the European Union (EU). The EU Parliament took nearly four years of preparation and debate to approve the GDPR in 2016, which was finally enforced on May 25, 2018. The GDPR framework replaced an outdated Data Protection directive from 1995. It contains provisions that require businesses to protect their personal data as well as privacy of the EU citizens for transactions that occur within the member states of the EU. It also regulates the exportation of personal data outside its boundaries.

In the Indian context, RTBF is envisaged in the Justice BN Srikrishna Committee report (2018) on Data Protection Bill. The report held that the “rights of the citizens have to be protected, the responsibilities of the States have to be defined but data protection can’t come at the cost of trade and industry.” Thus, there is also a strong possibility of this right making its way into the Indian legislature. The rationale of the Supreme Court of India in the Puttaswamy judgement has upheld other fundamental rights securing individual liberty in the Constitution. In addition, individual dignity is one of the basis for right to privacy. Privacy itself was held to have a negative impact (the right to be let alone) and a positive one (the right to self-development).

The sphere of privacy includes the right to protect one’s identity. This right recognises the fact that all information about a person is fundamentally their own and he/she is free to communicate or retain it for himself/herself. This core of informational privacy is, thus, a right to autonomy and self-determination with respect to one’s personal data. Such a notion has also been echoed in the Srikrishna Committee report (2018) on data protection.

Further, it believes that a free and fair digital economy, one that empowers the citizens, can only grow on the foundation of individual autonomy, working towards maximising the common good. However, the report manifests an approach to balance free speech with RTBF. Many have pointed out that the Bill doesn’t lay down the golden principle of allowing individuals to be true owners of their own data. The report further includes a balancing test with five criteria for the judiciary to weigh the freedom of speech and expression with RTBF.

RTBF is sometimes referred to as the Right to Erasure (RTE). As it is commonly misunderstood, RTBF is not synonymous to the RTE. It is rather an extension of it. The underlying principle of RTE is that when there is no compelling reason for the subject’s data to be processed, he/she can request the data controller to erase/remove their personal data, stop any further distribution of their personal data or potentially prevent third parties from processing their personal data.

RTE was applied to only proprietary databases. For example, if one wishes to unsubscribe from a

magazine, he/she can ask the concerned firm to delete all information that they possess of him/her. RTE did not apply to search databases as RTBF does. Hence, RTBF is actually an extension of the RTE.

The debate around this has gained a lot of traction in India after the Supreme Court recognised Right to Privacy in its landmark case of Justice KS Puttaswamy (Retd) and Anr vs Union Of India and Others. The apex court held that right to privacy is part of the right to life and personal liberty as guaranteed under Article 21 of the Indian Constitution. A nine-judge Bench held that “life and personal liberty are inalienable rights. These are rights which are inseparable from a dignified human existence. The dignity of the individual, equality between human beings and the quest for liberty are the foundational pillars of the Indian Constitution…” The verdict has given impetus to demands for recognition for other fourth generation human rights in India, like the right to be forgotten and RTE.

The right to privacy guarantees liberty in private spaces, electronic or otherwise. This means that the information, which is not in the public domain, is protected from coming into the public domain. Right to be forgotten, on the other hand, involves information that is already in the public domain and is required to be delinked from the individual, who has claimed the right to be forgotten.

Further, the RTE operates in an even niche area, where an individual can target a specific database and claim a RTE against it for the removal of information which concerns them. But the fourth-generation communication rights, like the right to be forgotten, come with their own set of flaws.

First, one of the major problems is that the guarantee of the right vests with only a few individual corporations. Take the example of Google. As per Google’s Transparency report, it can remove only 41 per cent of the URLs against which some issue was raised. This means that the authoritative framework for implementing such a right now vests with a corporation and it is performing an adjudicatory function while deciding to accede to a request of removal. This is something which the Indian legal system does not envisage; wherein adjudicatory role is an essential state function.

Second, there is a concern that accused criminals can wipe out valuable evidence while their guilt is under adjudication. This can turn out to be an implementation nightmare for security agencies, especially those who are collaborating on international crimes and possibly terrorism.

Third, the sheer reach of the internet make a case for something, like the right to be forgotten absolutely impractical. If there is an adjudicatory order, for instance against Google, the information, which a claimant is seeking to protect, is not necessarily saved by such a request. This simply because Google is not the sole repository of that information. Details may be available through other search engines and may still be hosted as it is a primary website. Hence, it is highly problematic to put such a right in motion. Regardless to mention, it also involves significant expenditure to bring it into force.

Fourth, India does not even have a data protection policy. This is something that our policy-makers need to look forward to instead of batting for the right to be forgotten. Because in the absence of such a system, multinational corporations, which practically administer and govern the internet, are beyond the jurisdiction of the Indian law and courts. Hence, even a guarantee will be meaningless if the decisions of our courts are not respected/recognised.

(Raghav Pandey is an Assistant Professor of Law and Anoushka Mehta is a student of Law at the Maharashtra National Law University, Mumbai)

Writer: Raghav pandey/Anoushka mehta

Courtesy: The Pioneer

Instead of imposing blanket rules, Governments globally can implement a regulatory model involving a negotiation with technology companies that is based on identified issues

Technology companies have fundamentally changed the way in which we obtain information, communicate, travel, transact in goods and services and consume content. However, they’ve also been responsible, in many ways, for some of the most pressing issues we face today. For example, concerns that TikTok exposes children to predatory behaviour led to the app being taken off the stores of Google and Apple; although this has since been reversed. YouTube has faced similar issues in the past. Social media platforms like Facebook and Twitter are being used to bully and harass, especially those from socially marginalised communities and to magnify extremist content and propaganda. There are multiple instances where Facebook has been involved in leaking user information, harvesting user data, using targeted advertising to influence election results and pushing political propaganda. It has, along with Whatsapp, also been used to propage “fake news” and spreading disinformation and misinformation, which has been linked to violence and deaths in India, Myanmar and Sri Lanka. Uber, Amazon and Apple have all been criticised for their lax labour standards. And Google, Facebook and Amazon have been accused of (and sometimes held liable for) anti-competitive behaviour. More generally, there is also a lack of transparency in the way these companies function and most of them have access to vast amounts of user data, which is collected, stored and sold to advertisers with minimal oversight.

Many of these issues exist and are exacerbated because some of these technology companies, especially “Big Tech” firms (generally refers to Amazon, Facebook, Alphabet, Microsoft and Apple), have large businesses and because of their significant global market share and revenue. A major reason as to why these companies were able to rapidly scale to their current sizes lies in their leveraging what is known as the “network effect”, wherein the value of certain goods or services increases as they gain more users. These platforms have also been able to invest in improving their services, especially by collecting and leveraging large pools of user data to improve their machine-learning algorithms.

While utilising network effects is not problematic by itself, the vast wealth of these firms has also meant that they could often simply buy out and integrate the products or services of competitors, or prioritise their own platforms over others and, hence, entrench their dominant positions. Furthermore, until recently, they faced virtually no regulatory oversight and were given free rein with how they chose to conduct businesses. This was, in large part, a consequence of the public support that these companies enjoyed and because they, and technology more generally, were seen as offering a way to enable access to information — providing “free” services or helping consumers obtain goods and services at lower costs. However, issues that have arisen have made it clear that there is no longer a question of whether to regulate technology companies but rather one of how best to do so.

Regulators around the world are grappling with this problem in multiple ways. The European Union (EU) introduced the General Data Protection Regulation (GDPR) to regulate the use of personal data of those in the body. Germany introduced a law requiring platforms to remove hate speech and other illegal content within 24 hours of being informed of such material. Singapore introduced a Bill that seeks to impose penalties on users and platforms for spreading “false statements of fact” in the country. Furthermore, Australia passed a Bill that forces technology companies to hand over encrypted data to the police.  More recently, the lower House of the Russian Parliament went so far as to vote to support a Bill that would essentially allow it to create its own domestic internet, ostensibly for national security reasons.

Some of these measures can have unintended consequences. For instance, the GDPR has been criticised for its broad definitions and because its stringent data protection requirements are more likely to disproportionately affect smaller companies by driving up costs, potentially stifling competition. Similarly, in India, there are concerns that regulations, often aimed at fixing issues caused by larger platforms, could significantly impair the ability of start-ups to scale their businesses. Moreover, some of the more extreme measures that have been introduced (such as those requiring building in backdoors to encryption and restricting the Internet to national boundaries) have the potential to alter the nature of the Internet itself and have wide-ranging implications for civil liberties, security and rights such as privacy.

India is also in the process of framing regulations applicable to this space. Over the course of the last year, the Government published the draft Information Technology [Intermediaries Guidelines (Amendment) Rules] 2018, the draft Personal Data Protection Bill and the draft National e-Commerce Policy. While each of these regulations was ostensibly introduced to solve specific issues and sought to regulate distinct areas of the digital economy, they also had overlaps, which affected each other. For instance, the Intermediary Rules primarily sought to address misinformation and “fake news” on social media platforms by requiring intermediaries to take certain steps, such as proactively monitoring their platforms for unlawful content. However, the definition of “intermediaries” is broad enough to encompass practically all entities from social media sites, messaging platforms, e-commerce platforms, cyber cafes, payment companies and internet service providers, thereby making these rules applicable to these entities as well. The draft e-Commerce Policy, in addition to introducing data localisation and other requirements, also seems to be conceptualising a State-controlled, community-owned-model for data, referring to it as a “collective resource” and a “national asset.” This has implications for entities beyond e-commerce companies and can impact how the right to privacy is developed in India. It also potentially runs counter to the Supreme Court’s decision in Puttaswamy vs Union of India, where privacy, framed primarily as an individual right, was held to be a fundamental right.

Technology companies can vary widely in the function and services they provide, even though they all share the attribute of providing goods and services through the internet. Therefore, in order to avoid unintended consequences and over-broad application, regulations must be narrowly crafted to address specific identified issues. Regulations must be framed in a manner that they are differentiated on certain metrics (such as the function served by the platforms, the potential impact on users and businesses and the aim sought to be achieved by regulation). One possible method for crafting regulation on this basis is by having more stringent requirements apply to companies that are of a certain size and scale and cross certain prescribed thresholds (whether measured in revenue, user or subscription base, or a combination of such other metrics). Another is by regulating intermediaries based on the function they undertake or the service they provide. However, given how digital companies integrate multiple services such as payments, chat, networking and the like onto the same platforms, this could also be challenging, and would require extensive collaboration with other regulators.

Another key component to consider in this context is the companies that are being currently regulated. It is especially important to include dialogue with technology companies in the context of the digital economy, given that platforms are best placed to understand the limits and abilities of the technologies they deploy. This is also why it might be useful, instead of just seeing regulations as a way to impose liability on companies, to also see them as a means of increasing platform accountability. A regulatory model that takes into account dialogue with these companies, and is based on principles of platform accountability, transparency, and ensuring effective redressal mechanisms may be a more effective way to address some of the challenges presented by digital platforms, than the sort of blanket regulations that are the norm today.

(The writer is junior fellow at the Esya Centre)

Writer: RK Pachauri

Courtesy: Aishwarya Giridhar