Farmers poor income: Who is responsible- RBI/Gov/Middle-men? Fallacies or Puzzles?

Farmers as usual for last 70 years, are in limelight and slogans have changed (Jai Jawan, Jai Kisan to Double income mandate), but focus and condition have not!

So why Indian farmers are poor? Middlemen / Small land holdings / Lack of storage facilities,  Poor productivity – all of this combined or none of the above?

The issue is why despite so much focus and attention, farmers condition keep on getting from bad to worse? So some puzzles on RBI / Govt role

Puzzle 1: Inflation targeting & poverty of farmers

1. The policy of Govt / RBI is to keep inflation rates low as that’s is one of the key economic parameters
2. The rise of food prices creates maximum havoc politically ( onions have led to the loss of many govt, though don’t know as to why Onion is such sensitive topic when its share in household budget is less than 1%. Media focus probably?)
3. So Govt works overtime to keep food prices low
4. India being an agrarian country, almost 60% of the population is dependant on agriculture. Agriculture is food production
5. Remember Govt is committed to keeping food prices low
6. That means, Govt is committed to keeping the income of this 50 % of population low ( while all costs are education/housing/travel/health/electronics etc rising)
7. So why it is a surprise that farmers remain poor. Remember, Govt and policymakers are working to keep prices low. So overall policy is succeeding not failing

Puzzle 2: Interest, Inflation, and elasticity of food prices

1. In India weight of food products in CPI is close to 50% ( 14% in the US, Singapore 16% and Japan / Thailand exclude fresh food from inflation ).
2. RBI is targeting inflation so one can that it is targeting food inflation given such high weight.
3. Now food consumption shall be inelastic in nature for most of the items. Nobody starts consuming 20 kg of onion or 100 kg of potatoes per month if prices drop to 50 paise per kg.
4. So how low-interest rates will help in the demand side. They might kill the supply side only. So is RBI killing supply side rather than managing the demand side?

So are these fallacies or realities? please, point out counter-arguments or what I am missing here?

Goodbye (regular) Venture Capital, Hello Massive!


I have spent almost two decades in Startups / Investments and believe strongly that venture capital is probably the best option as a career. And no it is not the glamour or the usual challenges and interaction with new teams, new ideas day in day out and being in changing landscape every day/month/quarter but the real fun is in the ability to impact the world in a meaningful way.

Despite all the criticism of VC world – about loss-making business models, utopian ideas and the inability of many funds to outperform many indices or even return capital, the fact remains that venture capital industry is one of the finest product of the dark ugly big capitalism. In no other models, interest is aligned so beautifully where motivated founders slog day and night while dreaming of changing the world by bits and pieces and many time succeed as well.

Hence apart from those massive returns, the biggest contribution of venture capital has been its ability to change the world, create hope in society and on top set an example of fairness and equal opportunity where one crazy passionate entrepreneur can change the world and create wealth without resorting to all dirty underbelly tricks of capitalism. Hence I am not only proud of this career but am rather a staunch worshipper at the altar of this VC world which continues to dream big and aim big.

However as I pound the street raising my next fund with a good track record of success and failure, I have much time caught myself wondering about the big goals which drive me and the question which I ask all founders as what keeps me awake in the night. The fact of matter is that the biggest problem which haunt me are no longer next big idea in e-commerce, deep learning, possibilities in B2B space or consumption  but rather the large and real problems of declining forest cover, sad state of water / sanitation, environment, polluted & choked rivers / ocean and our ever declining bad air which we are breathing in and out.

Having set up an NGO (SAVEN) to protect environment at age of 18 in 1990s, I probably feel more strongly about it but despite all my hope, energy and commitment, fact of the matter is I am not doing anything real about it and much worse is that all of us who can do something, are busy and excited about bitcoin prices, next food delivery company or doctor discovery app while (secretly) hoping somebody else to appear and save us from the coming catastrophe.

The existing scenario of supercharged investors, euphoric entrepreneurs, and the orgasmic environment was best captured by Adam Smith in supermoney.
“We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter fall upon the summer air. We know, by the rules, that at some moment the Black Horsemen will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors. Those who leave early are saved, but the ball is so splendid no-one wants to leave while there is still time, so that everyone keeps asking, “What time is it? What time is it?” But none of the clocks have any hands.”– From Supermoney by Adam Smith.
Today one doesn’t need to be a climate scientist to figure out that environment is in deep peril. Oceans are silent, choked by plastic. Air is nothing but smog. Poverty is very well alive and kicking and pesticides have infiltrated every food system. However, the response from all of us is more on a confused state where people look at leaders and leaders look at politicians and who only look at short-term voters.

The fact is that we need to solve this problem our selves as it is too important a problem to leave to others and hope for others to solve. Hence at this juncture of my life when I have the luxury to choose, and the choice is available so my thought is as to why I am not solving this and the fundamental question comes as if not now then when, if not us then who?

As humans, we have created challenges for Nature by housing, transportation, and food and now in turn chickens are coming home and we are staring at these big challenges. I believe that if we are able to drive talent, money & networks to solve complex problems, we shall be able to solve them. Google Driverless cars are such an example. To start with, we are looking at opportunities in Agriculture, Electric Vehicles & Storage, Pollution (Air, Water, Plastics), Renewable energy, Sustainable housing, Water & Sanitation and aiming to solve them by using science, technology, and venture capital thinking of scale and disruption.

Hence time has come for me to say goodbye to regular venture investing space and say hello to Massive challenges, Massive efforts and Massive opportunities.

Hello Massive,

مرحبا ضخمة,



Why can’t India fix its air or clean Cities!

1. Delhi Air is bad. well not bad, it is at Gas chamber level.
2. Long exposure can kill and present level of pollution is three times more than code red levels.
3. So you expect whole population to be running out of city in order to save their life!!
4. Well, NO, a few are tweeting about it while rest are like goats in slaughterhouse. Calmly waiting for the turn.
5. Little bit annoyance but otherwise business as usual while choking on Air!
6. So who is at fault – AAP (Govt)? BJP (LG/MCD)? Congress (Opposition)? NGT (law enforcer) or Supreme Court (Quasi executive these days)? Or Constitution of India ( the framework designer)?
7. Think hard before jumping to an option or forming an opinion?
8. For a moment think hard as who is accountable/responsible for Delhi Air?
9. Where do bucks stop and which official will lose his/her shirt or get suspended/terminated if things are not working?
10. LG / CM / Pollution control Chiefs / NGT Judges or Supreme Court!!!
11. In fact none of these. All of these have power to meddle but no accountability or no skin in the game! Promotions will continue as well as increments without any relation to the performance! So crisis keep on happened and we turn to most obvious / visible face and jump on it in the moment of crisis.
12. So the moment a crisis happens, we jump to blame the most visible/obvious option – Politicians the law makers.
13. Politicians are lowest hanging fruit to blame for any crisis but remember they are law makers. Given no of laws passed in India, they are working very well. so what is the issue?
14.  Again is Delhi Air only crisis, we the Indians are facing?
15. Look around – each of India city / town or village is crumbling? is it so all across world? Well no. London had crisis 60 years ago.  Barcelona was nightmare 20 years back but beautiful city now.
16. All countries / cities go through crisis but they come out better – in terms of Laws / execution / enforcement & punishment except India. We in India seems to be just going down and down on a bottomless pit in every city. Traffic chaos, law & order chaos, deaths by unsafe building, traffic accident etc just growing. No wonder India ranks on top on each of these ghastly metrics. Like any other country, India also try to solve every crisis by making law.
17. India starts with the law and then everything else becomes hazy. Take Rape cases for ex? how many prosecuted for Rape? how many punishments finally got done? Remember Nirbhaya anyone? Anyone got hanged despite judgement?
18. India administrative structure is a round musical chair where goal was “Rule” not governance.
19. Officials are appointed for short term with no long-term vision or accountability.
20.  And as officials frame rules themselves, they build zero accountability. The simple motto is all privileges but none of the risk or accountability.
21. In Mumbai station stampede, how many officials got arrested or suspended?
22. Look at NTPC boiler bias with 28 ppl dead, any body arrested? If it would have been a private entity, all directors would be in Jail but in case of public sector or Govt, ex gratia from taxpayers!!
23. Zero accountability / short-term tenures and appointment of a generalist with little understanding of the subject, create indifference.  Around us, all we see is simply a function of indifference and team of people busy calculating their next increment or posting rather than delivering real kick-ass service. No wonder Swachha Bharat failed, Delhi is choking and there is traffic chaos on every road.
24. Coming back to Delhi Air, what is happening ? which officials is there on solving air issues? or rather which experts?
25. Majority of heads in the department which monitor pollution/air quality, have no clue or at best, have the same perspective as a newspaper vendor? Delivery of a newspaper doesn’t make you expert on world affair (though lot of Newsreaders wont agree!)
26. Officials will be there for ¾ years and might get next posting in say Ministry of Culture and might have a stint in Ministry of sports before getting in pollution management.
27. Are they best person to take the call and advise top leadership?
28. Can any administrative structure without accountability, knowledge and long-term ownership can think strategic while it pays to be tactical?
29. So think again, worry hard and choke your lungs. Delhi air is not going to get cleaned by this Govt or any Govt
30. They are not designed for it. Expecting govt to solve pollution is akin to solving maths by chewing gum.
31. The problem to pollutions / air quality will be not be solved by any Govt but by private sector / startups using the innovation to bridge this chasm. Time to goMassive on these issues have come.


Swachh Bharat, Delhi Air Pollution, Why Govt fails big time?

It is again that time of the year in Delhi. Monsoon is over, Winter (thanks to changing climate) is yet to come, but the air is slightly cold and foggy. Noise related to pollution has again started to appear on social media timelines – Posts on Paddy stub burning, trucks coming, open construction etc. But the fact of the matter is that the winter of 2017 is going to be as much polluted if not less than the winter of 2016 which was as bad as that of 2015. Before the hidden politician amongst us jumps and starts looking at the performance of rhetoric driven AAP Govt, let us look at the performance of another regime which is also trying to another big problem plaguing India and that is cleanliness in India.

PM Modi launched a drive to make India clean on 15th Aug 2014. Work started on a war footing with words backed by large budgets & media campaigns.  Govt has spent/allocated more than 26000 Cr ($3.5 bn) on Swachha Bharat since 2014 but there is hardly any impact seen on the ground. Despite ‘in your face’ campaigns, large money spending, the situation has not improved at all. Take a stroll in any of our marquee cities like Bangalore, Mumbai, Varanasi, Agra etc and landscape remains as dirty as ever. Earlier there was just garbage all over now there is garbage with hoardings of Clean India! There are campaigns and big talk of toilets being built everywhere but in reality, everything is as it was prior to 2014 except an addition of storage room aka a dysfunctional toilet in every rural household and this futile exercise has consumed close to $ 3.5 bn in hard cash. Now again before we start looking at the failure of BJP and its inability to move things, we need to ponder and need to look beyond parties. It’s not AAP / BJP / Congress failure but a failure of Govt or rather a failure of the way the Govt thinks.

If one looks carefully and analyze the way govt acts it will come out that Indian government rarely thinks in terms of performance, the end result, or NPS score of target consumers/customers but always think in terms of money being spend/allocated and scheme names. This thought process has led to a scenario where whole government thought process is limited to budget/cess/allocations & vanity matrices like 100% literacy, 100% village electrification (If 10% of houses get electricity, its considered electrified for the purpose of govt record) and naming all such schemes after Nehru Ji, Gandhi Ji and now on Atal ji and DeenDayal ji.

If there is any doubt on this line of Govt thinking, kindly look at advertisements released by various Govt under various regimes. It does not matter if the advertisement was released by Jayalalitha or Karunanidhi, Mayawati or Akhilesh, Manmohan Singh or Modi, the template remains same.  Some scheme name, a big photograph of the leader along with data on the quantum of huge crores being spent,  so many families benefitting, blah blah. Suddenly you wonder if there was really a regime change or the same set of people are still running the government under a different set of masks!

Hence If one looks at Swach Bharat campaign from a government perspective, the whole campaign looks super success full with  26,000 Cr allocated, more than 52 million toilets built, India is on way to becoming super clean. But the reality on the ground is totally different. Was there any issue on the Govt intent? NO, Govt was as determined as it can be but core issue has been thought process where Govt can only think from budget outlays. Nobody focussed on fundamental problems related to toilets/sanitation and challenges related to it.

The fact of the matter is that India is neither ready nor can afford western model of toilets. First, there is no sewage system in any of the villages or towns and on top of it, there is hardly any water. In India, the difference between have-nots and haves is just one simple thing – access to clean running water. Only rich and middle class have access to it while resting of the India battles for few liters of potable water every day. With a focus on having toilets,  a person who was using 300 ml water in open defecation earlier,  now needs 3-liter water at his house and this house has no running water no access to sewer lines and no place to build sewage pits. The house in villages is either interconnected or clustered together having no scope to build open pit system. Even if one builds an open system, what to do during monsoon flooding or filling of tanks in 2 years as there is no manpower working in these areas? So if one looks at the constraint on the ground – no water, no waste disposal system, the idea of “Swachh Bharat” by building toilets was DOA ( dead on arrival) however the whole Govt machinery just went ahead with the plan –  as it knows one thing best which is to create a budget and collect money for it. So whole Govt went ahead with 26,000 Cr in hand even without understanding the basic problem of sanitation and challenges related to water, disposal, treatment etc.

So again before passionate hidden politicians jump and start blaming Modi govt. pause and see what happened in Delhi.

Delhi Govt in all earnestness appointed IIT Kanpur to do a study and find out the cause of pollution in Delhi. The report which has its own serious flaws in methodologies / simplistic observations/conclusions,  was still adopted by Delhi Govt but none of the simplistic solutions was implemented by it. Why? The simple reason is that solutions were like 1000 cuts war on pollution rather than any big bang budget approach and to make matter worse the improvement would have shown by 2022 (the election is in 2020). Since there is no big budget allocation, no ribbon cutting, and no big hoardings, the report and solutions have been conveniently parked in a cold storage.

So what is the solution? The only solution to all such problems is one that is delinking budgets from any action. Govt needs to think in form of solutions/ results rather than in terms of budgets and big bang approach.  For example in the quoted IIT Kanpur report, roadside dirt in summer had very high weight. A small team could have taken a cluster of Delhi and implemented changes to see if vacuuming the road and covering construction is creating any localized impact and what could solve this. A lot of A/B testing in startup parlance but with focus on finding a solution rather than big bang talk with focus on election!. Likewise, for Swachh Bharat, It would have been better if Govt had done trials on some select cities like Agra, Varanasi, Bangalore etc and figured out what is working and what is not working. Or in villages, the focus could have been on building community toilets rather than at individual homes.

Executing small projects is not complicated and there is enough talented manpower with the Govt in addition to the large budgets, but then small projects don’t get allocation or gravitas from the top. Further, these projects can’t be run by politicians as they are tied to the 5-year horizon and neither by bureaucrats with transferable jobs. This project needs people with long-term engagement as well as skin in the game with suitable rewards as well as accountability and punishments. Until the existing system thinks in terms of a long-term model with proper accountability and lifetime postings, India will remain refugee to musical chair policy making and will slowly decline to a hell hole in terms of quality of life in no times as policies designed for slavery don’t work in democracy on a long-term basis!
The end

Job less Growth & Booming Share markets

Are businessmen turning investors?

No longer mid-size /SME entrepreneurs investing in their own growth/plant expansion etc.

However same capital is finding its way to investments in – Mutual Fund, Share markets, Real estate and a tiny bit in startups!! as the rate of turn and paperwork in own business is lower than returns from investments.

This sums up all mystery of jobless growth in a booming share market.

धर्म ऐवम कर्म


“जो धारण किया जय, वो धर्म होता है। एक कर्म प्रधान व्यक्ति के लिए, कर्म ही उसका धर्म होता है अंतह कर्म ही धर्म है |”

Tale of GST and why it has to be complex

IF GST becomes simple i.e. no multiple rates, no rates within the industry, it will lead to simplification of business. Ease of business will jump, business will boom as the cost of doing business will drop drastically, which will lead to lower costs and higher consumption.

Given India’s massive population and interlinked economy, this will put India on another path of growth as the economy will boom, profits will soar, jobs will get created. But this has a huge downside.

Simplified tax/GST laws will almost eliminate corruption. No longer there will disputes as all will be taxed at uniform rates. Hence no ambiguity, no money laundering and hence no scope for corruption.

If there is no corruption/ bribe to be made, there will no longer be demand for prized postings ( good postings cost massive money) as an industrial town will be same as a rural town from income-generating perspective.

When there will be no demand for prized postings, the favorite business of postings/transfers will grind to halt. Nobody will pay crazy sums to superior powers for a favorite posting.

This, in turn, will choke the earning capability of the chair which used to take these decisions. This lack of money will further choke the money supply to the elections.

Hence to keep wheels of democracy running, one need complicated GST/ tax laws.

Jai ho democracy.