Events

PIC, in collaboration with the Venture Center, Janwani, BHAU Institute, Mahratta Chambers of Commerce (MCCIA) and Science and Technology Entrepreneurship Park (STEP), launched the Social Innovation Forum (SIF) on 20th March 2017. The inaugural lecture was delivered by Mr. Anshu Gupta, Founder of the NGO, Goonj and the programme was chaired by Dr. Raghunath Mashelkar.

Set under the massive canopy of the ancient Bodhi Tree at the Gokhale Institute of Politics and Economics (GIPE), the SIF came alive with beautiful lighting and the cheerful presence of the crowd. Mr. Gupta began his talk by introducing the audience to Goonj and the work done by the organisation. Established in 1999, Goonj has been working relentlessly to promote development through clothing in about 22 states of India. The organisation has 12 offices, around 600 workers and they deal with approximately 3000 tonnes of material every year. Logistics form the backbone of Goonj.

Addressing a common myth about Goonj, he clarified that Goonj is not about collecting clothes and distributing them to the poor, but rather about engaging the poor as labour and providing them clothes in return. When a disaster occurs, human storage capacity is directly affected and we are left without any extra clothing. More people die due to a lack of clothing in winter, than due to a natural calamity. In spite of this, lack of clothing has never been considered as an ‘issue’ and it is the dismissal of such real issues as “non-issues” that has hampered our development consistently.

Mr. Gupta questioned the definition and rationale of development work. “If development is a scale of 0 to 10, then 0 stands for the most basic things such as food, 3 square meals a day and perhaps primary education until the 5th grade”, he said. He pointed out that there are people working on a segment of the population that falls in the minus category, wherein bringing them to zero would mean survival and not development or progress. “On landing at Mumbai or Bangalore airport, if we feel we have arrived as a nation, then there is something fundamentally wrong in our thinking”, he opined.

Mr. Gupta focused on the difference between charity and development. Charity and development have an inversely proportional ratio. Charity is not a sustainable solution and must therefore be eliminated from our society. A society that engages in charity will never develop or progress.

There exist today a lot of models for development and scale-up and we often debate on which is better. “An ‘either-or’ model is not what this country needs though”, said Mr. Gupta. If we want to work on a massive scale, then we must be able to see through the lens of the people for whom we want to work and use their wisdom and skills to solve their problems. Efforts must be collaborative and our benchmarking as a nation must really improve.

The National Conference on Social Innovation (NCSI)-2016 Report was then released by Mr. Gupta and Dr. Mashelkar. Mr. Krishna Thiruvengadam, an Innovator who made a presentation at the NCSI-2016 also shared his story with the audience and thanked the organisations for supporting him. In his concluding remarks, Dr. Mashelkar said that India has a lot of potential energy and it must now be translated into kinetic energy. Speed, scale and sustainability are the challenges for India and we must face them head-on.

Over the last few decades, the world of sports has seen tremendous transformations globally and especially in India. Based on this backdrop Mr. Sundar Raman, former COO of IPL and CEO of Reliance Sports talked about the opportunities and challenges of Sports in India, on 17^th March 2017. The Programme was chaired by Dr. Vijay Kelkar. The programme opened with an interesting quiz, conducted by Mr. Harish Kumar of ‘Choose to Thinq’ and the audience participated enthusiastically.

Mr. Raman began his talk by using the example of Jamaica, a country not bigger than Pune City, but which has won 33 gold medals in the last 3 years. “It doesn’t matter how big a nation you are from, how rich or poor you are, what matters is how big your ambition is”, said Mr. Raman

The size of the world sports industry is 600 billion dollars and India is a 6.5 billion industry. The challenge is to harness the power of the 1.25 billion people. 50% of India’s population is 24 years old or below and Mr. Raman emphasised that we have the highest base of commercialization in terms of opportunity. Conducting a revenue comparison between other countries and India, he mentioned that India is still just about scratching the surface. “So what can we do?” he inquired.

Mr. Raman recommended that we begin with focusing on improving our governance and infrastructure for Sports. A PPP model should be adopted, CSRs of companies must be encouraged to support sports initiatives, laws should be created to support athletes and federations should be equipped for commercialization.  The longest impact is possible only if we start building a culture for sports, even at the grassroot level.

Elite athlete support must also be provided consistently over a period of time to players and athletes. Identifying focus sports, is an aspect he threw much light upon. Citing the example of the UK as a country that excels in ‘seated’ sports such as rowing, cycling, equestrian, etc. he revealed the prudent strategy adopted by the UK to focus on ‘seated sports’ and how their National Lottery helped fund their endeavours.

The Best in class facilities must also be extended to athletes and we must enable them to participate in international tournaments. Speaking about the Indian Premier League (IPL), Mr. Raman elaborated on how the IPL brought in a wave of pro leagues for other sports in India. The Indian Super League (ISL) for instance, was the third highest attended football league globally, just behind the Bundesliga and the Premier League. The unique achievement of the IPL was the creation of a unified sporting entity, wherein people rivaled with each other based on the team they were supporting but at the same time, they came together for the sport.

Mr. Raman further talked about the sacrifices made by players to attain their goals and how logistical hindrances often dictate the fate of such dreams. Lastly, he highlighted Khelo India, Mission eleven Million and the efforts of the Reliance Foundation to promote Sports and change its landscape in the country.

On 16^th February, Dr. Milan Vaishnav’s book When Crime Pays: Money & Muscle in Indian Politics was launched at Yashada, Pune and the programme was chaired by eminent professor and political commentator Dr. Suhas Palshikar.

Dr. Vaishnav began by giving the audience a flavor of the book. Displaying a map of India broken into its 543 parliamentary constituencies, he revealed that roughly one-third of MPs face at least one on-going case and one-fifth are named in a serious case such as extortion or murder. Narrating the case of Pappu Yadav, a politician from Bihar with a significant criminal history and considerable time spent behind bars, he then explained the dynamics of voting as a process and the psyche of the voters.

Dr. Vaishnav mentioned that the book is about understanding a central paradox – how can the nexus between crime and politics survive and indeed, thrive, in a democracy? “Politics functions a bit like the market, in that there is a supply and a demand”, he said. The research for the book was conducted by triangulating data from the 70,000 affidavits submitted by MLA and MP candidates from 2003 to 2014, the qualitative field work and the surveys.

Throwing light on the motivations of parties behind absorbing such criminals, he mentioned that money has a large role to play in it. As the costs of elections have exploded, parties have started favoring self-financing candidates. Criminal candidates have deep pockets and are hence capable of covering their own campaign costs, making them a very lucrative choice for parties. They also have access to resources and the incentives to deploy them.

In certain contexts in India, criminality actually signals the ability to ‘get things done’. Statistically speaking, a candidate with one case against him/her has a 22% chance of winning, as compared to the 7% chance of a candidate with no case. The public attaches much credibility to criminality as they feel the criminals can protect their interests through redistribution of benefits, coercion of law and order, enforcement of social insurance and quick dispute resolution. Dr. Vaishnav emphasised that voters should not be underestimated and transparency is hence of paramount importance.

In his concluding remarks, Prof. Palshikar spoke of the difference between the politics of 1980s and the politics of current times – earlier politicians used to take help from criminals and now criminals themselves have become politicians. He highlighted the role of money in politics by talking about the transformation of party workers to paid campaign workers and stated that democracy is ‘messy’ in its very essence and India is not the only democracy to portray that quality.

PIC hosted a first of its kind panel discussion on 14^th February 2017, just before the PMC Civic Body Election 2017. Vice president of PIC, Dr. Vijay Kelkar chaired this panel discussion. Ms. Kishori Gadre of Janwani & Dr. Deepak Shikarpur facilitated the panel discussion.

Leaders of five main political parties participated in this panel discussion- Adv. Vandana Chavan of NCP, Mr. Abhay Chhajed of INC, Mr. Yogesh Gogawale of BJP, Mr. Shyam Deshpande of Shiv Sena & Mr. Hemant Sambhus of MNS.

While talking about the challenges faced due to rapid urbanisation, Adv. Vandana Chavan, MP, Rajya Sabha, highlighted the need for dedicated ‘Municipal Governance Cadres’ as also the need for capacity building. Equally important, she believed, was sustainability over smartness.

BJP city president, Mr. Yogesh Gogawale talked about the need for a greater coordination among all decision-makers and stakeholders for better governance. He also stressed on the importance of people’s support and participation for better governance.

Agreeing with him, Mr. Abhay Chhajed of INC, mentioned that issues like road connectivity, metro projects, sufficient water supply, waste segregation, correct use of amenity spaces, pollution, etc should be given priority in administration and planning. Water and waste management were highlighted as priority areas for the INC.

Shiv Sena leader Mr. Shyam Deshpande put forth the idea of having a ‘Pune City Development Code’ for faster permissions & implementation of projects. He assured the audience that if elected, his government would provide better public transport by purchasing 1000 buses for PMPML. The need for Special Purpose Vehicles (SPV) for slum rehabilitation projects was also highlighted.

MNS leader Mr. Hemant Sambhus stated that they have a blueprint ready to develop the city in a holistic way, so as to avoid problems during implementation

A Panel discussion

On 5^th February 2017, a panel discussion on the Union Budget was organised at the Gokhale Institute of Politics & Economics (GIPE) with Panelists from Institutional Members of PIC.  The programme was chaired by Dr. Ajit Ranade, noted economist and Member, PIC. The Panelists who participated in this discussion were Dr. Achintan Bhattacharya from the National Institute of Bank Management (NIBM), Prof. Pradeep Apte of GIPE, Dr. Rathin Roy of National Institute of Public Finance & Policy (NIPFP) and Dr. Shubhashis Gangopadhyay of the India Development Foundation (IDF).

Dr. Ajit Ranade opened the session by stating that this was the first budget post demonetisation, the first budget that has merged the railway budget with the union budget, the first budget to have eliminated the distinction between planned and non-planned spending and the last budget before GST would be introduced.

Dr. Rathin Roy stated that there has been a continuous decline in the revenue deficit and fiscal deficit ratio. He also highlighted the fact that over the last 30 years, the ratio of what the Government borrows for its yearly expenditure to the Government’s total borrowing has been continuously rising, which he considers nothing less than a national crisis. He opined that public finances cannot be run when over two-thirds of the Government’s borrowing is for yearly expenditure, which it should be financing out of public taxes. He threw light on the increased spending on Transport and later also emphasised universal basic income being counter-intuitive to the ‘growth’ of the economy.

Dr. Achintan Bhattacharya delivered his talk through the lens of a common man. He stated that it was a fantastic budget from an accountant’s point of view, wherein everything was arithmetically very well balanced. Reflecting on the budget, he pointed out the discrepancies in the priorities and commitments of the Government observed that the budget was not very different from the previous years, barring a few minor changes.  Doubling the PM Fasal Yojana was one of the positive aspects of the budget in his view, but he underlined that the insurances are being given by the Agricultural insurance corporations, which are loss making units. He also observed that agricultural lending had been increased by 1 crore but the government’s promise of lending the differential, which is the interest subvention, had not been mentioned at all. He concluded his talk by making an appeal for distributive justice.

Prof. Apte introduced his view on the budget by stating that there was a lot of rigidity on expenditure and given this scenario, revenue design and capital expenditure are the only two areas where innovations would be possible. He projected that if banks are given a target of 10 lac crores to be extended to farmers, this would only encourage another source of booking Non-Performing Assets (NPAs).  On the contrary, nearly 63000 Public Sector Enterprises (PSEs) will get integrated with the formal banking sector, which would be a positive aspect.  He ended his segment by stressing on the fact that we suffer from a great information deficiency and our policies are therefore not very knowledge-based. More importantly, the delivery of development outcomes is crucially dependent upon the nature and quality of manpower that we have and that budgetary allocations are not going to be a panacea for our developmental problems.

Dr. Gangopadhyay drew attention to the Railways becoming a part of the union budget as a very good move, as transport and logistics is one area where we lack and this merger would play an integral role in boosting that area.  He pointed out that every government had been taking credit for spending more on MNREGA and raised the question that if this really was happening then where all the development has taken place. Speaking of agriculture insurance, he emphasized that it hasn’t been implemented in any other country and is no different to a payout from the government (or the non-agriculturalists) to the agriculturalists. Lastly, he raised another pertinent question regarding the impact of social sector spending on the GDP. “The objective of economic policy is not to help the poor, but to help the rich and poor”, he said, and concluded that there were barely any innovations in this year’s budget

At a time when demonetisation was still fresh in the air, PIC organised a unique talk on this theme by Mr. Saurabh Mukherjea, CEO of Ambit Capital Ltd. The programme was chaired by Prof. Rajas Parchure, Professor of Finance at the Reserve Bank of India (RBI) & Officiating Director of Gokhale Institute of Politics and Economics (GIPE).

Mr. Mukherjea began his talk by describing the chain of events that took place before the announcement of demonetisation on 8^th November 2016. The attack on black money had been initiated by the Government as early as May 2015 through acts such as the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, the Benami Transactions Act and the Foreign Account Tax Compliance Act (FATCA) -India’s Tax Information Agreement with the US.

Ambit Capital had earlier observed that such legal moves would have led to a natural reduction in the purchase of gold and land. Given that half of our savings in India are in the physical form, these reductions in purchase would force money into financial savings, hence bringing down the cost of capital.

In a country with a GDP of 18 trillion Rupees, the Government had demonetized 15 trillion, leaving out 3 trillion Rupees. In India, 85% transactions of value occur in cash. Traveling from 18 trillion to 3 trillion would translate into economic mayhem, until we remonetised. The first instinct was that since India is a low income economy, with low internet penetration and 30% illiteracy, there would be rapid remonetisation.

A survey conducted by Ambit Capital with 82 SMEs revealed that more than the immediate cash crunch that was affecting them in their daily transactions, their concern was more long-term and existential in nature. Being pushed to go white would mean having to comply with all kinds of regulatory obligations such as minimum wages, PF, environmental laws, etc., all of which would eventually turn them into a loss-making proposition.

Forecasting the consequences for SMEs, Mr. Mukherjea said that large listed entities would backward-integrate and buy out the supplier because the supplier would be a regulatory arbitrage. Manufacturing companies would get eaten out and mergers and acquisitions would take place under duress. Also, when a large capital-intensive listed entity, which is labour light, acquires a smaller entity which is labour intensive but capital light, the consequences for unemployment are evident. This would lead to consumption consequences and investment would take a knock as the business model of SMEs will have collapsed.

Mr. Mukherjea also spoke of the electronic trail that was being laid in the process of cash deposits made by the public. He drew attention to the relevance of big data and the likely ways in which the Government would track down the black money. He also mentioned that it would be unlikely for the Stock market to be adversely affected by demonetisation, as it includes only listed entities and as these entities consolidate the market, their pricing power would improve. Cost of capital and land would also drop.

Looking ahead, Mr. Mukherjea estimated that with cheaper land and capital, over a 2-3 year period we might develop into a manufacturing country. A disruption would be likely for the SME sector and they would have to reinvent themselves into an efficient white model and try to find success in export markets. The domestic economy will consolidate around larger companies with adverse near-time consequences for employment, consumption and investment. However, job creation is also on the horizon and we may see a very different India over a period of time.