Modi in the Valley

There are lessons and reflections for Narendra Modi in Silicon Valley

This is the original English version of an op-ed published in Hindi, in Nai Dunia, Indore, today.

If California were an independent country, it would be one of India’s important trading partners: last year we imported more than $5.3 billion worth of goods from that state. While IT services exports catch most of the limelight, India also exports items like cashew nuts, coffee, tea, engine parts, metal screws, rice and vegetable extracts. California hosts more than 4,75,000 Indian-Americans and is deeply connected to our technology industry. Silicon Valley companies have invested heavily in India over the last twenty years, and their presence contributes to the livelihoods of several lakhs of people in India — from IT & BPO employees to the taxi drivers who drive them to work. So much is Bangalore’s technology sector connected to America’s that we like to joke that the traffic in the city is lighter during public holidays in the United States.

So there are very good reasons for Prime Minister Narendra Modi to visit California, instead of limiting himself to the usual New York-Washington circuit that India’s political leaders usually do. Reaching out personally to top investors and business leaders helps promote India as a destination for investments, where we are in competition with China, East Asia and Eastern Europe. Whatever may be the domestic criticisms of the “Digital India” initiative, it is a good calling card for the Indian prime minister as he engages the some of the world’s most influential technology leaders. His personal charisma and public speaking skills make him a fantastic salesman and marketer of the India story.

Also, unlike our own businesspeople, it is likely that foreign business leaders will be more straightforward in telling him why they find it hard to do business in India. The country will benefit from such candid feedback, especially if Mr Modi diligently follows up on it once he is back in New Delhi.

That, essentially, is the real problem. Even without Mr Modi visiting Silicon Valley, it is a well-known fact that India has the talent, the resources and the market to make it a potentially exciting destination for investment. Yet, much of this potential cannot be realised because of the government gets in the way. Complicated tax laws, for instance, raise costs of doing business, increase corruption and invite political rent-seeking. Poor contract enforcement is merely the tip of the iceberg of a pervasive lack of trust in society, which deters investors. Lack of attention to basic public services, like water, electricity, education, health and transportation shifts the costs onto the private sector. This not only raises costs for investors (and makes India more expensive a place to operate from than it should be) but also creates social divisions, because others do not have them. We all know the problems with land acquisition and labour reform.

Mr Modi can’t be unaware of these issues. In his interactions with investors, he would probably have reassured them that his government will address these challenges. While he might get away with these responses as this is his first visit, he might not receive a patient hearing the next time. In other words, he has staked his personal credibility on addressing the challenges faced by investors and he will now have to deliver on them. This is not easy because it is unclear if his government realises that the entire Delhi Straitjacket has to be removed from our economic lives, not mere tweaking at the margins. We have not seen any sign of that since the Modi government came to power. Worse, even as Mr Modi promotes Digital India, his government scores such shocking self-goals like the recent one concerning a very poorly drafted National Encryption Policy that it was forced to withdraw after strong public criticism. The Modi government has done nothing to repeal the horrible IT Rules (including the infamous Section 66A) that were introduced by the UPA government.

After the success of the visit, Mr Modi will have to pay attention to the essential task of economic reform. Whether to satisfy the aspirations of the domestic population or demands of foreign investors, the answer is the same: economic liberalisation on a much bigger scale than Prime Minister Narasimha Rao’s in 1991.

While no one might have told him this, but Mr Modi would do well to reflect on why Silicon Valley creates companies like Google, Tesla or Facebook that have a global mindset. Most startups there begin with a plan to capture the global market. Their dreams are big. Of course, the ecosystem enables them to fulfil those dreams, but the big dream is the starting point. Most of our entrepreneurs in contrast, limit their dreams to the borders of our own country. The Delhi Straitjacket is partially responsible for this, but there is also a mindset problem, in that we are content to think within our “narrow domestic walls”. Elon Musk wants to transform the way the whole world travels. He wants to even transform the way humans travel to space. If there is something Mr Modi should learn from Silicon Valley is the need to unshackle our richest, most capable and most talented people to open their minds and push the envelope of human achievement.

Those who criticise Mr Modi for going on too many foreign trips miss the point, for his trips help raise India’s profile abroad. What we should discuss is whether his government delivers on the reforms necessary to meet the additional expectations he has created at home and abroad.

Cheap tablet, unaffordable mistake

The macabre antics of the India’s human resources development ministry over Aakash are the equivalent of Marie Antoinette’s “let them have cake” attitude

The matter is so serious that mincing words is the irresponsible thing to do. There is a demographic bulge on the horizon and two crucial areas will determine whether that bulge will result in a demographic dividend or severe demographic discount. The first is whether the 30 million children born every year will be educated and skilled enough to be productive members of modern society. The second is whether the Indian economy will generate enough jobs to provide them with adequate livelihoods. The median age in India is around 26 today, which means half the population is under that age. The general shortage of skilled manpower in everything from the armed forces to IT companies to cafe chains indicates that a substantial fraction of this population is not employable—because of the failure of India’s education system.

Unless something is done ten years ago, the demographic dividend will be diluted. Unless something is done now, the demographic dividend will be wiped away, leaving India with a demographic discount. As before, people will call it the “problem of overpopulation” instead of calling it by its real name—the problem of under- and misgovernance. Government exists to ensure the well-being of all its people. It is perverse to contend that population must be controlled because the government is incapable of serving it. It is the government that must boost its competence to ensure that it can perform its functions satisfactorily regardless of how big or small the population is.

In India’s case, the traditional and massively failed approach is to treat both education and jobs as if they were contagious diseases: insulated behind high walls, preventing ordinary people from having easy access to them. The government has failed to deliver education and jobs. So after over sixty years of failure, it’s time to try a different approach. Liberalise education (and labour) and let the solution begin to scale at the same pace as the problem. (See Ajay Shah’s article in this month’s Pragati)

The UPA government’s right to education act is not the answer, although some may claim it’s an improvement over the past. Instead of liberalising education so that the private sector can deliver education at prices and qualities that the people want, the UPA government has placed the entire education sector under the thrall of the Delhi Straitjacket. Disguising a bad policy—which is bound to increase corruption in society—in the language of “rights” may be increase the feel-good factor among sections of the public, but we are still moving in the wrong direction.

Why is all this relevant to a discussion on a cheap tablet computer? To show how deeply wrong Kapil Sibal’s priorities are. First, instead of working on a war-footing to work out how to strengthen the delivery of primary and secondary education, Mr Sibal is focused on the higher education sector. The clever excuse might be that primary education is a state subject. That still doesn’t mean that he should be tilting at the windmills of higher education at the expense of the taxpayer. The education cess imposed on transactions is grotesque—what does the government do with its ordinary tax revenues that it has to collect more money, ostensibly to improve education, but then subsidise fast depreciating assets solving a non-existent problem?

Second, as Atanu Dey has extensively written in the context of the One Laptop Per Child project, what Indian education needs is good teachers and good schools—not gadgets. Once you have good teachers and good schools you might want to supplement it with gadgets. But go look at any central or state government university, college or polytechnic—look the quality of the teachers, their pay scales, their morale, their working conditions and their work culture. No gadget, however cheap or indigenous, can help when campuses are decrepit shells of what they ought to be. How can anyone with a conscience accept that providing college students with a cheap, indigenous computer will even begin to provide them with education and skills they need to be productive members of society?

Third, let’s say—for the sake of argument—that some college students do need computers. Let’s further assume that they cannot afford the Rs 10,000 that can purchase a decent netbook. Should this mean that the Government of India must immediately procure these from a vendor (while lying to the public that the product is “indigenous”)? That’s what Mr Sibal announced initially when trying to create international headlines with the news of a $35 ‘indigenous’ tablet.

Clearly something—most likely reality—didn’t work out. So Mr Sibal has another announcement. “There have been some problems with DataWind (the company the government had contracted with) I must confess,” he admitted. “Therefore, I have got into the act. The IT ministry has got C-DAC and (state-run) ITI Ltd into the act, and I am going to ensure that this product is fully indigenous and truly an Indian product.” Mint, quoting unnamed government sources reports that the “..government is now planning to launch an upgraded version of the tablet as a completely indigenous product under the supervision of a high-powered committee comprising members from the Centre for Development of Advanced Computing (C-DAC), department of information technology, the IITs at Kanpur, Mumbai, Chennai and Jodhpur, and some public sector units.” (Aside: The message to investors is beware of contracts you sign with the Indian government.)

So a bureaucracy will design a gadget and a public-sector unit will produce it, before a subsidised product is ‘sold’ at Rs 2,276. What is the justification for the implicit and explicit subsidies that are being thrown at a gadget, especially in the computer market where the brutal forces of Moore’s Law relentlessly lower prices faster than the speed at which two Indian government departments can organise meetings?

Here’s a simpler, cheaper solution: why not get the government give vouchers (of say, Rs 10,000) to every student it intends to reach. Let the student use it to buy the computer of his or her choice from the open market, paying the difference in case the choice is more expensive. This is still an unnecessary expense but may be a far more efficient way to go about putting computers in the hands of college students. There is no need for Datawinds, C-DACs, IITs, ITIs or any public sector units at all.

Finally, it should shame every thinking Indian that a cabinet minister—ironically, one in charge of education—can get away with lies that every educated person knows are lies. Can anyone, anywhere in the computer industry claim a product is indigenous without being laughed at? After claiming that Datawind’s gadget was indigenous, Mr Sibal now says the new government-produced gadget will be really indigenous. These are lies. Should the national motto be so cheaply sacrificed at the altar of an inferiority complex? When it comes to educating our kids, maintaining our health or defending our country, the right approach is to procure the best that the money can buy, whether foreign or indigenous. Indigenousness is not a virtue, even when it is practical.

In the economic history of India, the UPA government will be held singularly responsible for squandering an excellent decade—of high growth, healthy revenues and a strong fiscal position that it had inherited from its predecessor. It has wasted eight years pushing dogmatic approaches to education and resisting labour reforms. Mr Sibal’s antics—there’s no more civilised way to describe his championing of the cheap tablet—show just how frivolous the UPA government is on a matter intimately concerning our future. “No schools, eh? Let them have a cheap tablet then.”

How to spot the next revolution

Demographics, mobile phone penetration and the army’s disposition

Earlier this month, after the protests in Tunisia caused the reigning despot to fly to Saudi Arabia, this blogger said that the phenomenon is unlikely to spread. In the event this was proven wrong by Egypt. Bear this in mind as you read the rest of this post.

How can we tell which country is susceptible to political transformation brought about by “people power”? Here’s a rough guide:

First, look at demographics. Scholars such as Samuel Huntington, Jack Goldstone, Gunnar Heinsohn and Henrik Urdal argue that if there are a large number of young, healthy, educated and dissatisfied men, the stage is set for unrest. Of these Mr Heinsohn goes the furthest, predicting that when the population of 15 to 29-year-olds crosses 30 percent of the overall population, then, regardless of the cause, violence will ensue. The countries of sub-Saharan Africa, Arab North Africa, the mainland Arabia and Pakistan meet this criterion. Turkey and Iran are exceptions. [Related link: The New Security Beat blog has a good discussion on this]

Second, look at mobile telephone and internet penetration. Mobilising large numbers of people in short periods of time requires ubiquitous access to mobile phones and the internet. This is important because state machinery can pre-empt large protests if they have enough time to identify, intimidate or imprison the field organisers. That is why Twitter (and to an extent Facebook) beat SMS text messages, and why text messages beat phone calls and pamphlets. A tweet is likely to reach any given fraction of the population orders of magnitude faster than a SMS text message. Most importantly, they work in combination—a tweet can be relayed on SMS, and vice versa.

(In fact, the failure to account for this factor might be one reason why I underestimated the likelihood Egypt will stir. Both Hosni Mubarak and I might have been stumped by the speed of the mobilisation.)

While technology allows faster mobilisation, it does not create leadership or an alternative political vision. It is not surprising that some of the recent “leaderless” uprisings do not have a clear idea of “what next?” beyond the toppling of the current regime. What this means is that organised political groups—like the Muslim Brotherhood in Egypt—can wait for the uprising to oust the incumbent, even let a transition government operate for a while, before stepping in to take over. Not unlike what the Pakistani military-jihadi complex did following the ouster of General Musharraf.

Third, when it comes to the crunch, look at whether the security forces—specifically the army—will fire upon their own people. This is both a yes/no question, as well as a question of extent.

In countries with compulsory military service, it is less likely that the army will fire on its own people. In countries where the armed forces are insulated from the general public—culturally, socio-economically or ideologically—then it is more likely that the army will not have such compunctions. That is why Iran has a special revolutionary guard that is distinct from the army. This is also why the Pakistani army engages in massive domestic skulduggery, because its leaders do not want to be in a situation where they have to fire at Pakistanis from the Punjabi heartland.

Worked Examples

Demographics: median age 29, (borderline) check.
Mobile phone penetration 95.3%, check. Internet 4.5% no check.
Army: Didn’t fire

Demographics: median age 24, check.
Mobile phone penetration 77%, check. Internet 21.1% no check.
Army: ?

The rest is left as an exercise for the interested reader.

When BlackBerry went to New Delhi

BlackBerry must comply with Indian law. India needs a new debate on privacy.

Yes, terrorists can use anything to communicate with each other, plan attacks and help carry them out.

Hafiz Mohammed Saeed can write letters, in code, and send it by post to his sleeper agents in India. He probably does that. But not all means of communications are alike in their ability to help terrorists carry out attacks. A terrorist with a satellite phone with real-time voice and data connection is far more dangerous than a terrorist who carries letters in his pocket. So the argument that terrorists can use anything to communicate is not a valid counter to the argument that government agencies can prevent, investigate and prosecute terrorists better if they are capable of intercepting or blocking real-time communications.

For instance, there is a reasonable argument that the damage to life and property in Mumbai during the 26/11 attacks might have been lower if the terrorists had been denied access to real-time communications, from satellite phones, to cellular phones to broadcast television. There is also a reasonable argument that the ability to intercept the phone calls made by the terrorists plays an important role in prosecuting them in courts of law and in courts of public opinion. India’s law enforcement agencies have had the ability to tap your phone for ages, but apart from the odd political scandal, it is difficult to build a case that this has somehow led to the infringements of the rights of ordinary citizens.

The current debate over Blackberry’s messaging system must be placed in this context. The ongoing discussion between the Indian government and Research In Motion (RIM), the Canadian company that provides BlackBerry services, involves two inter-related issues.

First, whatever might be RIM’s values, business practices and corporate policies, its business in India is governed by Indian law. The contention that “no one else has a problem with our service” is no defence—India has security considerations that might be peculiar to it, and as long as the requirements are constitutionally legitimate, RIM must comply. It is disingenuous to conflate the legitimate authority of a constitutional democracy—imperfect as India’s is—with that of the demands made by totalitarian or authoritarian states. The two are morally and practically different. [See this editorial in the Globe and Mail].

RIM could insist—as it has just done—that it is not treated any differently from others in the field, but it cannot get away with the excuse that its corporate policy overrides the rule of law in India.

Second and the more important issue is for India to establish due processes to determine just who, under what circumstances and under what checks and balances gets to actually block or intercept communications. A national debate over digital privacy, powers of government and mechanisms for redressal is now urgent, as the Indian economy and society become ever more reliant on communications networks.

It is clear that citizens need greater, more credible safeguards. It is also clear that the government needs to be more capable of addressing threats that arise from advances in communications technology. What is not clear is whether the political establishment sees these as priorities worthy of wider public deliberation. The usual practice of passing legislation without adequate parliamentary debate is neither likely to reassure citizens of their rights nor offer new ideas to law-enforcement agencies.

This blog has consistently argued against blunt measures like banning telecommunication services, even and especially in insurgent & terrorist affected areas. Governments must learn how to operate in an information-rich, networked world. Therefore, to the extent that the Indian government’s threat to block BlackBerry services is a device to press RIM to better co-operate with the law-enforcement agencies, it is tolerable. Such a threat is credible only if it can hurt both the government itself and RIM. This appears to be the case.

However, it would be a serious mistake if the government were to make such a ban permanent. Not because India needs the BlackBerry, but because the underlying rationale is self-defeating.

Vyuha – a new blog on The Indian National Interest

Perspectives on cyber strategy

Srijith K Nair joins us on INI, with Vyuha where he:

aims to explore the cyber security strategies (and to a lesser extent, the overarching information security aspects) that are of paramount importance to India in this networked 21st century and beyond.? Towards this end we will be covering important events and developments that shape this area while expounding our views on the issues. In doing so we hope to influence, ever so slightly at the least, the doctrines and the key players involved in promulgating them. [Vyuha]

Srijith is fellow for cyber strategy at The Takshashila Institution’s national security programme. The new blog will feature posts by Srijith and his colleagues at the cyber strategy policy research team.

Jumping over Mamata’s nuclear hurdle

Meet the Academician Lomonosov

Swaminomics points out that the issue of land acquisition—epitomised by Mamata Banerjee—will prove to be the real hurdle in building nuclear power plants after the India-US nuclear deal (linkthanks BOK). Mr Aiyar is right—land acquisition is an important issue. (See the December 2007 and August 2008 issues of Pragati).

But who says nuclear reactors must be built on land? The Russians are building a floating nuclear power plant (FNPP), and the first, the Academician Lomonosov, is expected to be completed by 2010.

FNPP via RIA NovostiThe FNPP will be a barge able to move with the help of a tug boat. Transportation will be done without nuclear fuel, so on the move it will be non-threatening hardware.

The FNPP will look like a small island with an area of between 7.4 and 12.4 acres. It resembles a “symbiosis” of a nuclear-powered vessel and a standard land-based nuclear plant. It could well arouse amazement and fear, as radiophobia is widespread. Nevertheless, according to Sergei Kirienko, chief of Russia’s Federal Nuclear Power Agency, “the floating nuclear power plant with several levels of protection will be much safer than a land-based one.” [RIA Novosti | See the infographic]

Peering into the criminal mind

A revolution in investigative affairs?

The use of brain mapping in investigation, and most recently the acceptance of brain mapping reports as evidence by Indian courts has raised many eyebrows. Today’s New York Times has a report by Anand Giridharadas on this:

The Brain Electrical Oscillations Signature test, or BEOS, was developed by Champadi Raman Mukundan, a neuroscientist who formerly ran the clinical psychology department of the National Institute of Mental Health and Neuro Sciences in Bangalore. His system builds on methods developed at American universities by other scientists, including Emanuel Donchin, Lawrence A. Farwell and J. Peter Rosenfeld.

Despite the technology’s promise—some believe it could transform investigations as much as DNA evidence has—many experts in psychology and neuroscience were troubled that it was used to win a criminal conviction before being validated by any independent study and reported in a respected scientific journal. Publication of data from testing of the scans would allow other scientists to judge its merits—and the validity of the studies—during peer reviews.

“Technologies which are neither seriously peer-reviewed nor independently replicated are not, in my opinion, credible,” said Dr. Rosenfeld, a psychologist and neuroscientist at Northwestern University and one of the early developers of electroencephalogram-based lie detection. “The fact that an advanced and sophisticated democratic society such as India would actually convict persons based on an unproven technology is even more incredible.” [NYT]

The use of this technology for investigation should be of relatively lesser concern, especially when the alternatives are of the unpleasant sort. But Dr Rosenfeld does have a point, especially when it comes to admissibility of these reports for securing convictions.

It is difficult to understand why Mr Giridharadas’s report does not quote any Indian scientist on the subject. It leaves out an important point: on September 6th, The Hindu reported that “an expert committee studying the efficacy of brain mapping criminal suspects has concluded that it is unscientific and should be discontinued as an investigative tool and as evidence in courts.” Rakesh Maria, Mumbai police crime branch chief, has been quoted as saying ‘that while BEOS was a useful technique of examination, it couldn’t achieve conviction all by itself. “The technique needs to be corroborated with other evidence.”‘

The stuff for military novels (2)

The flying assassin

In line with what some readers suggested, and also in line with Sharon Weiberger’s post over at Danger Room, the new secret technique that the Americans have brought to bear in counter-insurgency operations in Iraq and Afghanistan-Pakistan (possibly) involves unmanned aerial vehicles fitted with a networked “tagging, tracking and locating” system.

The new system now being deployed was first used on aircraft in Afghanistan, then was installed on Predators in Iraq starting about a year ago. Officials said introduction of the devices coincided with the 2007 U.S. troop buildup in Iraq, and was an important, but hitherto unknown, factor in the subsequent drop in violence in that country.

The technology allows suspects to be identified quickly. “All I have to do is point the sensor at him,” said a military officer familiar with the system, “and a missile can be off the rail in seconds.”

The devices are roughly the size of an automobile battery, but are heavy enough that outfitted Predators in some cases carry only one Hellfire missile instead of two. At times, the systems also have been in short supply, requiring that crews move the devices from one Predator to another as they land and take off.

The unique capabilities have prompted competition among U.S. forces for access to specially equipped Predators, military officials said. The fleet being assembled for use in Pakistan has been assigned to the CIA and U.S. Special Operations Command, meaning fewer of the aircraft are available for conventional forces. [LAT, linkthanks Vivek Hirpara]

Pragati July 2008: A better connection with Israel

Issue 15 - Jun 2008
Issue Contents


“Adamant for drift, solid for fluidity”
India needs leadership and a renaissance in its foreign policy
Harsh V Pant

Business interests vs national interests
As Indian companies grow abroad
Sameer Wagle & Gaurav Sabnis

The myth of illiberal capitalism
Multi-polarity, democracy and what the US might do about them
Dhruva Jaishankar


A survey of think-tanks
The post-American world; Asian geopolitics
Vijay Vikram


The India-Israel imperative
Indo-Judeo commonalities: the symbolic and the substantive
Martin Sherman


Fruits of knowledge
Apply knowledge-economy processes for food security
Mukul G Asher & Amarendu Nandy

Needed: A new monsoon strategy
The focus should be on groundwater recharge
Tushaar Shah


Know your consumer?
A review of Rama Bijapurkar’s We are like that only
Aadisht Khanna

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