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BEST U.S. COLLEGES–AND THE ONES TO AVOID/Pg.82
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www.forbesindia.com
LETTER FROM THE EDITOR-IN-CHIEF
Towards Greater Freedom
F
or a country that became politically free in 1947 and
took a stab at economic freedom in 1991, the script in
2013 could not have been worse: An economy going
downhill, a currency into free fall, and a widespread
feeling of despondency and frustration. A more full-blooded
embrace of markets should have brought corruption down and
increased competition for the benefi t of customers and citizens
alike. But that was not the path we took over the last decade. An
expanding pie should have provided adequate resources for off ering
safety nets to the really poor even while leaving enough with the
exchequer to fund public goods. But India is currently eating
the seedcorn of future growth with mindless social spending.
Corruption has scaled new heights, politicians have been found I N D I A
hand-in-glove with businessmen to hijack state resources for private
ends, and a weakened state is opting for even harsher laws and an
ever-expanding system of unaff ordable doles to maintain itself in
power. Politicians have raided the treasury for private purposes,
and businessmen fi nd more profi t in rent-seeking behaviour than
in competing fairly in the marketplace. As for the citizen, she is
angry with the steady whittling down of freedoms, a crumbling
education and health care system, and pathetic public services.
The current political power arrangement between centre,
states, cities and villages is coming apart at the seams. The
India is getting
impending carve-up of Telangana from Andhra shows that super-
ready for the
large states are not inclusive enough, even as super-cities such as
Mumbai and Delhi are being misgoverned due to a misalignment next freedom
between political power and accountability to citizens. struggles, the next
Indians are not taking it lying down anymore—as the Anna Hazare
million mutinies
movement and the public protests over the Delhi gangrape of 2012
indicate. Governance has become the talking point of the next
election. The people are fi ghting back. They may not have succeeded
in organising themselves too well, but they are speaking up.
India, in short, is getting ready for the next Best,
freedom struggles, the next million mutinies.
In our Independence Day special issue that is now in your hands,
we asked several eminent businesspersons, experts, independent
thinkers and non-conformists to share both their diagnosis R JAGANNATHAN
and remedies for India’s next phase of growth and movement Editor-in-Chief, Forbes India
towards greater personal, political and economic freedom. [email protected]
This year’s I-Day comes when the country is on the cusp @TheJaggi
of major political change. The ideas in this issue should thus
be fodder for the electoral battles of 2014 and beyond.
AUGUST 23, 2013 | FORBES INDIA | 3
Contents
Volume 5 | Issue 17 | August 23, 2013
a
di
n
INDEPENDENCE es I
b
or
DAY SPECIAL or F
Atri f
a
v
n
a
h
d
u 28
S
Online Grocers: Bal Krishn
Birla and Mukesh Singh
I N D I A
10
5 68 Surjit Bhalla: India Stays Dole Up,
12 Subsidy Down
6
1 3 70 Manish Sabharwal: Why the God
of Jobs Doesn’t Smile
8 on India
13
72 Ajay Shah: The State Should Enter
the Picture Only When Markets Fail
11
74 Dileep Ranjekar: Our Biggest
9
Challenge is to Improve Teaching
Competence 92
2 4 7 76 Akhil Gupta: Let the Sun Free
India from a CAD Crisis
Life
1. Keki Mistry 2. Wilfried Aulbur 3. Swati Piramal 4. Yogendra Singh Yadav 5. Manish Sabharwal 6. Jayaprakash Narayan 7. Dileep Ranjekar 80 The Lost Heroes of Economic 104 The Silver Ceiling
8. Bimal Patel 9. Pratap Bhanu Mehta 10. Ajay Shah 11. Akhil Gupta 12. Bibek Debroy 13. Surjit Bhalla Jasodhara Banerjee
Freedom
They championed a free market 92 The Intolerant Indian
107 Imagine There’s No Heaven
Features AMERICA’S BEST COLLEGES 48 Jayaprakash Narayan: Fixing economy against Nehruvian policies Salil Tripathi
Devangshu Dutta
82 Colleges at Risk Governance with Reforms and
CORPORATE ACCOUNT Forbes’s annual ranking of the top Economic Freedom 96 All Work and No Play 110 They Fill Our Lives
24 How Etihad will Digest Jet 300 colleges—and those you need to Genesia Alves Dilip D’ Souza
The deal will change much more worry about 50 Wilfried Aulbur: India has its Upfront
than Jet’s international routes Own Silver Linings Playbook 98 The Family Way 112 The Private Citizen
INDEPENDENCE DAY SPECIAL BRIEFING Sandip Roy Sunil Abraham
BIG BET 38 India can’t be a Jugaad Economy 56 Pratap Bhanu Mehta: When 22 The Pursuit of Happiness
28 ZopNow Takes a Crack at Forever Business Bats Against Itself More money does not necessarily 100 Imagining Equality 114 Democracy on the Rocks
Online Grocery We need key policy reforms, and a mean more happiness Nilanjana S Roy Imran Khan
The fi rm’s ‘three-hour delivery’ wider ambit of freedom 60 Yogendra Yadav: India is a State-
promise can make or break its future Nation, Not a Nation-State Subscriber Service: To subscribe, change address or enquire
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42 Keki Mistry: How to Rescue the about other customer services, please contact: FORBES INDIA,
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32 Global Brands from Emerging Cities from the States’ Clutches 10 Letters 20 World Watch T(Mel:o n9 1–-F2r2id-4ay0:0 1109 a8m73 - / 6 4 p0m0)1 S9M87S4 F. OFaRxB- E0S2 t2o-2 5419811088 04 foLrebtetesr.isn mdiaay@ bnee tewdiotrekd1 f8oorn blirneev.ictoym.
Economies 46 Swati Piramal: How to Make 12 Check-in 116 Thoughts Email: [email protected], Read us online at www.forbesindia.com
China can show how companies in India a World Leader in Low-Cost 66 Bibek Debroy: Between the TToo saudbvescrtriisbee,, vviissiitt wwwwww..ffoorrbbeessiinnddiiaa..ccoomm//asduvbesrctrisipet/ion/ Cover Design by Anjan Das
these economies can build brands Health Care ‘Illfare’ State and the Deep Sea
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Tracks the
all things the real driver of change in
world of
that lie at the getting municipal leaders
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8 | FORBES INDIA | AUGUST 23, 2013
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AUGUST 23, 2013 | FORBES INDIA | 9
LETTERS TO THE EDITOR
Readers Say
Pharma Buzz Web Wars
Refer to ‘Fortis’s U-Turn’ (August 9, Refer to ‘Gobble Gobble Google’ (July
2013, issue). Great story on Fortis and 26, 2013, issue). A great research topic
its promoters. I appreciate the eff ort would be why American companies like
that obviously went in, but I stopped Google, Apple and Amazon have failed
reading once I read that “...the rental to crack the Chinese puzzle while here
that Fortis is paying to Religare Health in India they are doing signifi cantly
Trust is more than the earnings before better. The key to this is the dominance
interest, depreciation, tax and amortisa- of English language in India that makes
tion...”. This, coupled with the lemon it an easy market for Western multina-
that Ranbaxy has turned out to be, is all tionals, whereas in China, government
that an investor needs to know about ‘help’ is provided to local companies.
the company, its promoters and their Rajesh Tyagi, on the web
India needs business practices.
Amit Bhandari, via email ITNhis is boDund toI hapApen when there
more search
is no competition in the search space.
engines.
Gas Bubbles Everyone is busy launching ecommerce
Without that, Refer to ‘How India has Punctured its sites; who will build a search engine?
one can’t Gas Balloon’ (August 9, 2013, issue). China couldn’t aff ord to kick Google out
Imports are not a solution to the long- before building Baidu. I strongly feel
blame Google
term vision of energy independence. It that India needs more search engines.
for monopoly
only helps serve the immediate need of Without that, one can’t blame Google
industries invested in gas-based energy for monopoly.
production—for internal consumption Arun Y, on the web
or sale. It is ironical that ministries
resort to measures like restricting gold Corrections & Clarifi cations
imports when policy reform is what
can serve the dual purposes of reducing Issue August 9, 2013
current account defi cit and bridging the On Page 14 — By 2015 [wrongly
demand-supply gap in energy. mentioned as 2005], nearly half of
the world’s largest companies will
Varun Narula, on the web
have their R&D facilities in India.
Water Woes On Page 84 — The article ‘Why
Refer to ‘No Country for Pure Water’ Banaskantha Loves lady Rosetta’
(August 9, 2013, issue). Impure water is by Vivian Fernandes was made
the root cause for many diseases. Fifty possible by the Inclusive Media
Fellowship of Delhi’s Centre for the
percent of people in developing coun-
Study of Developing Societies.
tries suff er from one or more water-
related diseases. Eighty percent of these
Issue July 26, 2013
diseases are caused by contaminated
On Page 72 —
water. Providing safe drinking water to
twitter.com/Forbes_India In the article
people has been a major challenge for
‘The Franchise
facebook.com/ForbesIndia governments in these countries. The Four’, the images
need of the hour for rural areas is for Stephenie
linkedin.com/groups?gid=1959962
mobile water purifi cation systems. Meyer’s and JK Rowling’s books were
www.google.com/+ForbesIndia Dr A Jagadeesh, on the web interchanged. The error is regretted.
10 | FORBES INDIA | AUGUST 23, 2013
Check-in
/ APERTURE /
I N D I A
three million converged 73,800,000
on Copacabana beach in Rio for
Pope Francis’s mass on World
Youth Day. He has emerged as
an unlikely champion for the
youth. “The world crisis isn’t The number of young people who are unemployed globally,
ers treating the young well. We run according to Global Unemployment Trends 2013, released
eut the risk of having a generation earlier this year by the International Labour Organization.
R
es / that doesn’t work,” he has said. The persistent economic crisis will probably push another
ora As governments show little half a million into unemployment by 2014. The youth
M
o intent to fi x this, faith, perhaps, unemployment rate had touched 12.6 percent in 2012,
ergi is a useful friend to have. and is expected to increase to 12.9 percent by 2017.
S
12 | FORBES INDIA | AUGUST 23, 2013
Check-in
/ CHANGE AHEAD / government-sponsored / GRADING THE CEO /
programmes. For
Professionals to Mayer’s
instance, Delhi
Turn Babus? ran 147 Centrally- Mixed Marks
sponsored schemes
during the 11th Plan.
At the village level
too, there is a crunch
of personnel who
can use government
funds to plan and
execute projects.
The NAC reportedly
wants professional
managers only for the unlike her three
big-ticket programmes. predecessors, Marissa Mayer
The question is: Is has now managed to make it
it possible to rope in through an entire year as the
the sonia gandhi- Clearly, this is an experienced profe- Yahoo CEO. She even got a $1.1
led National Advisory idea whose time had ssionals who’ve typi- million bonus halfway through.
Council (NAC) come long ago. cally been dissuaded Did she earn it? Shares are up
has reportedly Lack of capacity by the poor pay? PlusI, N80 peDrcent, thIankAs mainly to
recommended to the and skilled managers babus often resent Yahoo’s appreciating stake
government that it hire has been a serious the lateral entry of in Chinese internet phenom
professionals to run problem affl icting the professionals. Alibaba, but doubts persist,
fl agship programmes. numerous and large - DINESH NARAYANAN especially after activist investor
Daniel Loeb announced he
was selling most of his stake
back to the company. Here’s
/ TRANSITIONS / how her freshman year went:
a
Industry Movements hPoRmOeD pUagCeT iSs :m Bo–r e A r eraelv-atmimpee dan d bes Indi
social. Mail got a facelift, as did For
ea sundaram, one of the usha sangwan saoxmede a mt loebaislet tawpop sd aonzedn F olilcdk pr.r Moda-yer ori for
most experienced fund has been named ucts. But there’s still no killer app, d G
a
managers in India, has the fi rst female and holes remain in mobile, social, Pras
recently joined Pramerica managing video and automated ad buying. m:
a
Mutual Fund to look after director at the EARNINGS: C Revenue, fl at since dar
portfolio management services. Life Insurance 2011, fell 7 percent to $1.14 billion Sun
Jain and ChandresShu Nndigaarmam, w, aalos npga rwt iotfh Z Purraischha nt C(LoIrCp)o oraf tIinodni a. ibhnuo tto h maeco scseotcu oonfnt idst fqcoourma irtetses s rfh.r Paorrmoe fi oh tfo jAwulm iYbapa-ebda, uters; EA
Mutual Fund where they had collectively decided e
to stay away from IT stocks in 1999. Pramerica Sveatnegrwana nsi, nacne L IC eaa yrenairn-gesn. dB leiyfto, nMda vyaegru iesn p’rto smayiisnegs of on / R
MF is sponsored by Prudential Financial Inc. 1981, has worked when things will improve. acks
for the company ACQUISITIONS: B She’s on a cas J
u
uNnitiilne Pvaerran hjpaes aasp tphoei hnetaedd o f ihno aurseinasg lfii knea nce, ssbhiitloiloiponpnsi nfaognr ds Tp ournemeeb, blwrl.oi tSchhk be1’u7ss sstmteirla,l l$el 1ya.ec1iq nugi - Mayer: L
direct marketing, a
iRtse pgllaocbianlg h hoimme a csa Hrei nbduusisntaenss . international ad tech and consumer services. Mariss
Unilever MD is Sanjiv Mehta operations and, YMahOoRo Aa LdEe:s tBin+a tMioany ewro hraksp lmacaed e ges;
most recently, a
(in pic), who heads operations again, importing engineering and m
in the Middle East and North sdeirrevcetdo ar so ef xecutive pGrooodgulect. -Hmear naapgpermoveanlt r taatlienngt o fnro tmhe Getty I
Africa. Mehta has been with Unilever for 21 years communications. employee rating site Glassdoor is 84 op:
but has never worked for the company in India. percent, despite her controversial m T
o
ban on working from home. Fr
14 | FORBES INDIA | AUGUST 23, 2013
Check-in
/ AUTO TALES / / CHINA EFFECT /
GM India’s Cup of Woes Spot the
Opportunity
as things stand, 1.14 25 3%
General Motors lakh a clutch of
(GM) India is not in Chevrolet Taveras were Senior GM India’s investment banks,
the driver’s seat. recalled. Manufacturing of Sail management market share including Nomura
Late last month, the U-VA suspended. Final recall personnel and Barclays, recently
number not announced were fi red
company announced its lowered expectations
decision to recall 1.14 lakh WHAT NEXT? of China’s growth.
units of its utility vehicle (cid:2) Salvage serious loss of reputation and brand equity Media reports say the
Tavera, manufactured (cid:2) Deal with government investigation gloomiest forecast came
between 2005 and 2013, (cid:2) Costly and tedious recall process from Nomura which
because they failed does not rule out the
to meet emission and Sheila Jain Sarver (head end here. From early Asian giant’s output
specifi cation norms. of GM’s India technical July, GM has halted the growth falling below
There has been no centre at Bangalore) production of its Sail 6 percent next year.
offi cial statement on the and Sam Winegarden sedan and hatchback The probability of a
cause, but media reports (vice president for global citing quality issues. It is hard landing in China
suggest GM engineers engine engineering). contemplating a recall. may be benefi cial to India
manipulated emission The problem doesn’t Dealers belieIve thNis Dif it mIanaAges its economy
tests to comply will aff ect business.
with government And it’s not as if GM
standards. Post the India’s cars have
controversy, GM been selling big. In
has fi red about 25 June, it sold 6,575
people, including vehicles, down 11
Anil Mehrotra percent year on year.
(India CFO), - ASHISH K MISHRA
/ MARKET WATCH / the BSE FMCG Index of the slowdown. and currency slightly
has risen by 227 percent Private banks received better. Chinese demand
Slowdown to 6,948. When nothing a setback last month over the past decade
Begins to else was performing, when the RBI tightened fuelled a rally in global
Impact FMCG consumer (and pharma) liquidity to protect the commodity prices such
stocks along with rupee. There are also as those of metals and oil.
Stocks Too
private banks seemed initial signs that well- Those are now coming
to be the best bets. As a known consumer names off as its economy slows.
result, valuations have are slipping. In the For instance, some expect
the downturn in the sky-rocketed; the index recent round of earnings, oil prices to even drop
India growth story spares trades at an earnings market leader Hindustan to $70 a barrel, which
no one, not even the multiple of 41. Compare Unilever disappointed bodes well for India.
Sensex’s top performers. this to 14 for the Sensex the street with a 7 percent But the recent fall in
Consumer companies and the disparity is top line growth. HUL the value of the rupee has
have been stock market stark. So now, as FMCG said it has seen growth eroded any gains from
darlings for close to fi ve stocks get hit too, it rates slipping since the lower oil prices. If the
years. During this time, is a grim affi rmation fi rst half of 2012. ITC also government is able to
let the street down with stop the erosion, it may
HUL ITC Dabur Marico FMCG Index its top line as cigarette be able to take advantage es
g
a
22-Jul 696 368 170 215 7,433 volumes declined by 1-2 of the dipping prices, m
y I
26-Jul 663 368 171 217 7,267 percent, according to thus easing the pressure ett
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31-Jul 615 336 161 208 6,814 brokerage estimates. on the trade balance. ht:
g
Stock price in Rs - SAMAR SRIVASTAVA - DINESH NARAYANAN Ri
AUGUST 23, 2013 | FORBES INDIA | 15
Check-in
/ IT GROWTH /
Bigger, but not Bulkier, the Incubator Way
involve bulking up staff . focussed about business
Typically, companies than academic incubators,
use solution accelerators, and our programmes are
automation and portfolio much longer than those
changes to achieve this. of a typical accelerator
Tata Elxsi, a Bangalore- [which last about three
based Rs 622-crore design months]. The idea is to
services fi rm, has taken a help create companies that
diff erent route by setting will help us strategically.”
up a business incubator. Tata Elxsi benefi ts from
The concept isn’t a 10 percent equity stake.
new—it started in the US The selected start-ups
as a way to encourage get 18 months of ready-
entrepreneurship. In to-use infrastructure,
India, incubators were dedicated mentors
mostly associated with and help from Elxsi’s
academic institutions. marketing and business
In recent years, a I N DdevelopImenAt teams.
variant of incubators Elxsi, which recently
technology services logistical problems called accelerators is signed up its fi rst startup,
companies across the associated with larger taking off , driven by a telecom fi rm called Big
country face what its teams. Also, investors the private sector. V, expects to incubate 30
executives call ‘a linear and stock markets tend Tata Elxsi’s initiative, companies in the next
growth’ problem: The to give a premium to incub@TE, is diff erent three years. If it succeeds, it
more they grow, the companies showing from all these, says Rajesh might just pave the way for
more they have to hire. non-linear growth— Kumar, VP, Strategic other mid-sized companies.
Managers worry about the kind that does not Initiatives. “We are more - NS RAMNATH
/ STARTUP FUNDS / Scholar- / ASK 50 BILLIONAIRES /
investors in
Student VCs Philadelphia Is a College
Education Worth
in 2012, first round the Time and
Capital, a Philadelphia VC Money?
firm, put $500,000 into a
fund for students to invest
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R sharing software Firefly find students who want How do they find
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ct spoke to First Round your committees of tap their personal 92.5%
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p: I Where did the idea an open application for to deeply understand
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m t originate? “First, college anyone from undergrads problems and meet —Results of an Anonymous Poll
Fro students can create in liberal arts to people incredibly smart people.” oWf o5r0ld M’se Bmilbleiorns aoifr eTsh Le iFstorbes
16 | FORBES INDIA | AUGUST 23, 2013