Ola and Uber: Win – Win For Everyone

I’m a fairly heavy user of Ola Cabs and Uber; I really like their service, and often feel that they are currently under pricing and making a loss to gain a lead on each other in the taxi aggregator business.

This is a very interesting business where Ola or Uber don’t own taxis on their own, but partner with other individuals who own taxis and register with them.

You can hail a taxi using their app, and the taxi drivers logged into the app get a request that they can accept and come and get you. You can load the Ola app with money using your credit card so you don’t have the hassle of using cash to pay the driver. Uber allows you to link the account to Paytm and avoids the hassle.

Uber is a San Francisco based company which was recently valued at over $40 billion dollars and Ola is a home grown company based out of Mumbai  which is estimated to have a staggering valuation of over $2.5 billion (Rs. 15,000 crores). This valuation is very recent as it just took funding of about $400 million a couple of weeks ago.

Although the latest round of funding gives them a very high valuation; that they were doing so well is nothing new because this is not the first time they have gotten funding, and earlier this year they had reported that they are doing about 200,000 rides per day.  

So, the company is doing well (as least in terms of valuation), it’s a good service for customers, but I often wondered how the taxi drivers fared?

On a recent trip to Delhi, I used Taxi For Sure, which is a similar service, and has been recently acquired by Ola Cabs, and the man driving the taxi told me that he was actually the owner of a fleet of cars but his drivers made more money than him on a regular basis due to the salaries Ola and Uber pay.

I didn’t really take him seriously but this article today in the ET about Ola Drivers protesting a pay cut caught my attention due to that conversation. Apparently, Ola has an agreement of paying Rs. 38,000 per month to hatchback drivers, and Rs. 46,000 per month to sedan drivers, but they want to cut that by Rs. 8,000 and increase the working hours for the sedan drivers. The drivers are protesting and rightly so because this was not in their contracts and no company should be allowed to change the rules like this.

I don’t know the details of the contract but I certainly hope that the company doesn’t get away with any high handedness like this. It will be a shame if that happens because this is a great service for everyone involved, and it is very heart warming to see that a start up has created such great livelihood opportunities for so many people who till only a few years ago could have never dreamed of owning their own small business.

UFO Moviez IPO Review – Subscribe or Not?

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

Investment sentiment in the markets has changed dramatically in the last 15 days or so, as it is becoming more and more difficult for the Modi government to get its modified land acquisition bill passed in the Rajya Sabha. Investors have started doubting the government’s abilities to get other important economic bills passed, like GST Amendment Bill etc. Stocks, which were looking extremely attractive in the first week of March at higher valuations, have suddenly turned expensive at a relatively lower valuations. This is what a steep fall in stock markets could do to your investment sentiment.

Had this IPO of UFO Moviez came a few days ago, it would have got a welcome high subscription. But, now the investors have turned cautious and the company would find it difficult to attract a large number of retail investors. The company plans to raise approximately Rs. 600 crore in this Initial Public Offer (IPO). The issue got opened today, April 28th and will get closed on April 30th.

About UFO Moviez Limited & its Business

Incorporated in June 2004, UFO Moviez India Limited is a pioneer in satellite-based digital cinema distribution network and in-cinema advertising platform. As on February 28, 2015, UFO’s global network spans 6,626 screens worldwide, including 4,911 screens across India and 1,715 screens across Nepal, the Middle East, Israel, Mexico and the USA.

Since the beginning of its operations, UFO has digitally delivered more than 8,800 movies in India until February 28, 2015. In fiscal year 2014, UFO Moviez digitally delivered more than 1,500 movies in 22 languages to 4,703 screens with aggregate seating capacity of approximately 2.15 million viewers across India.

Revenues of the company are diversified and come from three primary sources, (i) movie producers and distributors, for the secured delivery and screening of their movies, at approximately 52% (ii) advertisers, through in-cinema advertising, at approximately 24% and (iii) exhibitors, through equipment rental and sales for digital cinema equipment, at approximately 24%.

Increasing digitisation in the Indian exhibition sector would be a boon for companies like UFO Moviez. According to media research, Jodha Akbar, which was released in 2008, had a number of analogue prints which was double the number of digital prints. For Rajneeti, released in 2009, digital prints constituted around 60% of the total number of prints created for the movie. Films like Rockstar, Bodyguard and Singham released in 2011 with 70-80% of the total prints in digital format. Dhoom 3, released in 2013, was the first film to go completely digital.

Financials of the Company

For the financial year ended March 31, 2014, total income of the company was Rs.  421.09 crore as against Rs. 337.50 crore for the year ended March 31, 2013. The company reported profit after tax (PAT) of Rs. 46.54 crore for the financial year ended March 31, 2014 as against Rs. 33.39 crore for the financial year ended March 31, 2013.


Note: Figures are in Rs. Crore, except per share data & percentage figures.

For the nine months ended December 31, 2014, its total income has been Rs. 357.23 crore and it clocked a net profit of Rs. 36.86 crore, resulting in a net profit margin of 10.32%. The company reported EBITDA margin of 33.89% for the nine months ended December 31, 2014, 31.28% for the year ended March 31, 2014 and 31.69% for the year ended March 31, 2013 respectively.

The company expects to report lower advertising revenue and EBITDA for the quarter ended March 31, 2015 as compared to the quarter ended March 31, 2014, primarily due to lower number of new blockbuster movies released during this quarter and also due to the cricket world cup 2015.


Note: Figures are in Rupees, except P/E Ratio & RONW.

What’s on Offer?

UFO Moviez has fixed its price band to be between Rs. 615-625 per share. But, unlike earlier IPOs, there is no discount for the retail investors. The issue is a complete offer for sale of shares by its existing shareholders, 3i Research (Mauritius) Limited and private equity fund, Providence Equity Partners. 3i and Providence are selling close to half of their stakes in the company. UFO Moviez will not receive any proceeds in this offer.

The offer comprises of a sale of approximately 97.09 lakh shares to the investors as the offer gets fully subscribed. 35% of the issue size is reserved for the retail individual investors. At Rs. 625 per share, the selling shareholders are expected to pocket in approximately Rs. 607 crore.

Anchor Investors – UFO Moviez yesterday issued approximately 28.8 lakh shares to the Anchor Investors, namely Reliance Mutual Fund, SBI Mutual Fund, Kotak Mahindra Mutual Fund, Pinebridge Global Funds, Jupiter South Asia, Amundi Funds, Ashmore SICAV and Bharti Axa Life Insurance, at Rs. 625 per share, thereby raising Rs. 180 crore.

Bid Lot Size – Investors need to bid for a minimum of 24 shares and in multiples of 24 shares thereafter. So, a retail investor would be required to invest a minimum of Rs. 15,000 at the upper end of the price band and Rs. 14,760 at the lower end of the price band.

Objective of the Issue – As mentioned above as well, the issue is a complete offer for sale of shares by its existing shareholders and the company will not get any proceeds from this sale.

IPO Grading – The company has opted not to get its IPO graded by any credit rating agency. SEBI had made IPO grading voluntary in December 2013.

Listing – The shares of the company will get listed on both the exchanges i.e. National Stock Exchange (NSE) and Bombay Stock Exchange (BSE).

Should You Subscribe or Not?

A unique business model, highly efficient management and dominant presence in high-potential growing businesses make this company a worthy investment. But, at Rs. 625 a share, the company is seeking a valuation multiple of 36 times its annualised earnings for the nine months ending 2014-15, which I think is not worthy considering the digital technology business to be riskier and low incremental growth in FY 2014-15.

The company has grown at a really fast pace in the last 3-4 years, but whether it will be able to grow its revenues and profits at a similar pace or not, it is yet to be seen. There is a scope for listing gains, but at these valuations, the company has left very little scope for the investors to make money post listing gains. I would like to put my money in UFO Moviez at a price below Rs. 500, i.e. at a discount of 20%+ from its expected issue price of Rs. 625.

How do you get anything done?

Reading and writing about the land acquisition bill has made me somewhat gloomy, and question how you can get anything done in a Democracy like India? Congress is intent on blind opposition to whatever the government proposes instead of educated debate, and since the government doesn’t have enough seats in the Rajya Sabha, it can’t pass any bill on its own.

That may just be a good thing too because had they been able to pass any bills on its own they would most likely pass certain bills that are not really in the best interest of everyone but just the vote bank that they cater to.

In this environment then, how do you get anything done?

I was reminded of the US government shutdown in 2013 when I was thinking about this. The US has these constitutional limits on borrowing that they have and once you reach the limit, the government can’t borrow anymore and since the government is financing itself through borrowings, once the limit hits, they aren’t able to pay their bills which most importantly include salaries of government employees.

This is an artificial limit in the sense that the US is not borrowing from another country but from its own Federal Reserve so in a way the amount that it can borrow is unlimited. The shutdown came into effect because the opposition party there – the Republicans vehemently opposed what’s commonly known as Obamacare, and wanted the Democrats to make cuts that would make Obamacare defunded and more or less untenable.

The Democrats and the Republicans went into a standoff and common Americans sufferred. Ultimately a deal was reached, and the limit was raised, but it was not after a lot of damage was done.

At the end of it people viewed the Republican party negatively in this face off and put a big part of the blame on them for the shutdown that took place.

I think Indians can take heart from that situation because ultimately if the Modi government’s efforts are thwarted by the Congress just for the sake of opposition, and the people take note of it and protest, they will have to withdraw such opposition.

The power of the people is what counts and recent examples like Net Neutrality and repealing Section 66 has shown that the voice of people now more than ever is heard and is more powerful than ever in this country.

Do States have large amounts of unused land already?

I wrote about some of the sticking points in the Land Acquisition Amendment yesterday, and a related question to that is of course how important is this act itself? Is it really stopping progress? Don’t state governments already have large land banks that they aren’t able to use?

I think it is important to first accept that even if all states had large tracts of land that were unutilized, you still need a good Land Acquistion Act because private companies and public enterprises will continue to acquire lands in the future, and it is necessary to have a mechanism in place for farmers, and others to be able to protest and stop such acquisitions where they are not satisfied  with the compensation given to them. Otherwise, you end up in a situation where the governments are buying people’s ancestral lands much against their wishes.

At the same time you must ensure a framework that allows private companies to acquire lands in a reasonable fashion because in some cases the current unused land may simply be unattractive. In other words, they will continue to acquire lands because the current ones may not be in a place where infrastructure or labor force is available. These lands may have initially been acquired with a politically motivated intent of ‘development’ of backward classes which is what HT reported to be the case in UP.

Or in the case of Maharashtra, the state has a policy to buy land throughout the state but not all locations are equal and it is inevitable that some areas have land which is unused whereas others have demand for land where no land can be allocated.

O Unused Land, Where Art Thou?

There are two prominent news stories that talk about unused land. The first one is the report by HT that I linked earlier, and the second one by DNA that pretty much talks about the same states, and report that some states have large tracts of unused land. However, they don’t break down the numbers and simply state that according to documents obtained by them 30 – 50 percent land is unused. This is not very tangible information, and while it makes for a good headline it doesn’t do much beyond that.

The HT story goes into numbers and says that there are 21,000 hectares of unused land in MP, 15,000 hectares in Maharashtra, 4,000 in Tamil Nadu and 329 hectares in West Bengal. It doesn’t give a break up on any other states except for Gujarat where it says that most of the land acquired has actually been allotted and there is only 500 hectares of unused land in the state.

It is not hard to see why Gujarat is doing well; because the state is doing well in providing infrastructure and other services that are necessary to set up a business in the land of course.

As far as I can see, the argument that there are vast tracts of unused lands already available does not hold water based on the information we have available right now.

Thoughts on the Land Acquisition Bill

The unfortunate incident of a farmer committing suicide in the AAP rally has polarized the debate on the Land Acquisition Act even more, and it has become virtually impossible to get to know the factual details of the act, and the amendment, and learn for yourself whether it is good or bad.

I spent a few hours last week reading the original bill from 2013, and the recent amendment, and there are three main points that are the sticking points as far as I am concerned.

Consent Clause: The existing act has a consent clause which states that 80% of the “affected families” should give their consent to the land acquisition before any land can be acquired by a private company, and 70% for a project under public private partnership.

Notice that this is not 80% of the landowners but 80% of affected families that include the landowners, the tenants, anyone else who depended on the land for their livelihood in the last 3 years, as well as any scheduled tribes or forest dwellers who may lose the right to access the land because of the acquisition.

The new amendment lists out five categories for which it waives off the consent clause, and these five categories are defence, rural infrastructure, affordable housing, industrial corridors, and infrastructure and social infrastructure.

If you look at these five categories, pretty much any project that you can think of can be categorized under this and subsequently you can waive off the consent clause on them.

So, you have an existing situation where you have such a strict clause that not only do you require 80% consent from the landowners, but 80% consent from all affected families, and you have an amendment which for all practical purposes waives off any consent at all.

I think both these situations are really bad. It is not practical to expect 80% approval for any land acquisition specially when you include affected families because just to assess who those affected families are will pose a very real practical and challenging problem. It is not hard to see why land acquisitions have become really difficult in the current situation.

On the other hand, if you remove the consent clause altogether, you give the government wide reaching powers to acquire land from people even when a large percentage of them are unwilling, and I think that is not a fair situation either.

Getting rid of the affected families terminology: The amendment gets rid of the affected families phrase and from what I understand only the landowners will have a say in acquisition. It is very difficult to practically ascertain who the affected families are  and unless someone has any ideas on how this can be practically implemented, I don’t see how you can continue to have this terminology and have a good act.

Impact Assessment: The existing act provides for an impact assessment which means that there would be a committee of people who will evaluate whether the potential benefits of the project outweigh the costs, and if there is un-utilized land at the end of the project it is returned within five years, among other things.

The new amendment removes the impact assessment for the five categories, which means you don’t need an impact assessment at all if you are under one of these five categories. I have presented a very simplified version of the impact assessment because they want to get rid of it altogether which I think is completely unreasonable because if you are going to potentially displace a large number of people the least you owe them is a proper assessment of what it is going to take to rehabilitate them.

In my opinion the existing act cripples action because you just can’t go through the restrictive clauses, but the amendment is over-reaching as well because it will remove all the checks that were present to protect the rights of the people.

There has to be a middle way to do this because it is essential that India finds a way to make this happen. There is no way that the millions of Indians who come into the labor force every year can be absorbed in the agricultural or services sector, so developing manufacturing is a must, and to develop an industrial base, land is an imperative.

Punjab National Bank (PNB) Branches to Open a Sukanya Samriddhi Account (SSA) & PNB’s Centralised Contact Number

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

The Government of India notified the rules for Sukanya Samriddhi Account (SSA) on December 2, 2014, Prime Minister Narendra Modi launched this scheme on January 22 and the RBI issued a circular to all the authorised agency banks on March 11. But, even after a series of such events, no bank was ready to open this account even a few days back. People were returning disappointed from the bank branches where they were told by the branch staff that no such notification/circular was received by them regarding any such scheme.

But, Punjab National Bank (PNB) has now officially started opening these accounts at 1604 of its branches all over India. Though the bank has not provided the list of these 1604 branches which have started serving for this scheme, it has provided a centralised customer care number calling which you can get the address of the branch nearest to your place. The number is 011-25744370.

Here is the link to the website of Punjab National Bank (PNB) on which you will get all the information regarding this scheme – PNB Website Link. Under Public Provident Fund & Govt. Saving Scheme, “Sukanya Samriddhi Deposit Account” is listed. When you click on that, it will take you to the following page – “Features of Sukanya Samriddhi Deposit Account.

As PNB must be having all the latest information about this scheme, I would like to highlight the features of this scheme once again as given by the bank on its website.

Depositor – For this scheme, Depositor is an individual who on behalf of a minor girl child of whom he or she is the guardian and deposits amount in account opened under this scheme.

Guardian – In relation to a minor girl child, Guardian means:

(i) either father or mother; and

(ii) where neither parent is alive or is incapable of acting, a person entitled under the law for the time being in force to have the care of the property of the minor.

One Girl One Child – Depositor cannot open multiple or more than one account in the name of a Girl Child. Natural or legal guardian of a girl child allowed to open one account each for two girl children.

Under this scheme, natural or legal guardian of the girl child shall be allowed to open third account in the event of birth of twin girls as second birth or if the first birth itself results into three girl children, on production of a certificate to this effect from the competent medical authorities where the birth of such twin or triple girl children takes place.

Age Restriction for Opening of Account – The account may be opened by the natural or legal guardian in the name of a girl child from the birth of the girl child till she attains the age of ten years and any girl child, who had attained the age of ten years, one year prior to the commencement of these rules shall also be eligible for opening of account under these rules. Scheme has been commenced from 02.12.2014.

Documents to Open the Account – (i) Birth certificate of girl child (ii) Address proof (iii) Identity Proof

Maximum and Minimum Deposit – Minimum – Rs. 1,000/- Per Year (thereafter any amount in multiples of Rs. 100). Maximum – Rs. 1,50,000/- Per Year.

Term Period – Deposits can be made till completion of 14 years from the date of opening of the account. The maturity of the account is 21 years from the date of opening of account or if the girl gets married before completion of such 21 years, the operation in the account shall not be permitted beyond the date of her marriage. In other words, No Deposit for the period from 15th to 21st year of account.

Interest After Maturity of account – If account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time.

Interest will be compounded yearly and will be credited to account till the account completes fourteen years from the date of opening. Interest for the Financial year 2014- 15 is 9.1% p.a. and for Financial Year 2015-16, it is 9.2% p.a.

In case of account holder opting for monthly interest, the same shall be calculated on the balance in the account on completed thousands, in the balance which shall be paid to the account holder and the remaining amount in fraction of thousand will continue to earn interest at the prevailing rate.

Regularisation of irregular account and Penalty – Where minimum amount of Rs. 1000/- a year has not been deposited, then such irregular account may be regularised on payment of a penalty of Rs. 50 per year along with the minimum subscription of Rs. 1000/- for the year(s) of default any time till the account completes 14 years.

Mode of Deposit – Deposit can be made in cash; or by cheque or demand draft. Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account.

Premature Closure of Account – (1) In the event of death of the account holder, the account shall be closed immediately on production of death certificate issued by the competent authority and the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

(2) Where the Central Government is satisfied that operation or continuation of the account is causing undue hardship to the account holder, it may, by order for reasons to be recorded in writing, allow pre-mature closure of the account only in cases of extreme compassionate grounds such as medical support in life- threatening diseases, death, etc.

Pre-Mature Withdrawal – To meet the financial requirements of the account holder for the purpose of higher education and marriage withdrawal up to 50% of the balance at the credit, at the end of preceding financial year shall be allowed but such withdrawal shall be allowed only when the account holder girl child attains the age of 18 years.

Transfer of Account to Other Place – The account may be transferred anywhere in India if the girl child in whose name the account stands shifts to a place other than the city or locality where the account stands.

Closure on Maturity or Before Maturity due to Marriage of Account Holder – The account shall mature on completion of 21 years from the date of opening of the account. But, in case marriage of the account holder takes place before completion of such period of 21 years, the operation of the account shall not be permitted beyond the date of her marriage. In such closure of accounts, account holder will have to give an affidavit to the effect that she is not less than 18 years of age as on the date of closing of account.

Branches Authorized to Open Account – 1604 branches are authorized. Please contact at 011 – 25744370 for address of branch.

In case you do not understand any of its features and have any query regarding this scheme, please share it here, I’ll try to respond to it as soon as possible.

Chinese strippers deliver mammoth to the trunk of your car

Let’s start this week with a very interesting article about Chinese scientists editing the genomes of human embryos. There has been a lot of debate about whether this should be tried out or not, and it was inevitable that someone did try it out. The current experiment has failed, but it is only a matter of time that they succeed.

In somewhat related news, scientists have completed sequencing the whole genome of the woolly mammoth. Actually bringing back an extinct species is still some time away, but it seems like the expert opinion on the issue is that it can be done.

It seems like the government is working on making the idle gold lying in temples and with public to work, will be a good thing if it actually works. 

Amazon is always trying new delivery methods, this one is quite novel as well – delivery in the trunk of your car. 

Buy your kid a domain name – does actually sound like a great idea.

British Indian votes crucial in UK election.

Finally, there are many good lessons to learn from our bigger neighbor but perhaps the lesson to hire strippers at funerals is best avoided. 

Have a good weekend!

Sukanya Samriddhi Yojana Calculator, Toll-Free Number & List of Post Offices in Mumbai to Open an Account

This post is written by Shiv Kukreja, who is a Certified Financial Planner and runs a financial planning firm, Ojas Capital in Delhi/NCR. He can be reached at skukreja@investitude.co.in

Mumbai’s Postal Department has recently launched a new website www.sukanyaaccountmumbai.in for the investors in the Mumbai region to guide and help them open accounts under its most popular scheme Sukanya Samriddhi Yojana. This website provides all kind of information about this scheme, including its salient features, frequently asked questions (FAQs), application form for account opening and most importantly, the “Sukanya Samriddhi Calculator”.

List of Post Offices – The website also carries a list of 417 post offices located in Mumbai along with their complete addresses and respective contact numbers (landline). You can now contact any of these post offices nearest to your place and talk to the concerned officer directly regarding any features of this scheme.

Toll-Free Number – Mumbai post has also taken the initiative to start providing info regarding the scheme and also resolving investors’ queries on its customer care toll-free number 1800-223-060. You can now dial this toll-free no. and have your queries resolved regarding Sukanya scheme.

Call Back Facility – They have gone one step forward by introducing the call back facility as well, in which you need to provide your name, e-mail id, contact number and PIN code and they will call you back and provide all the necessary information.

Facebook Page – Mumbai Post has also created a dedicated facebook page for this scheme, namely Sukanya Samriddhi Account Mumbai Postal Region.

At a time when most of the banks are just not ready to provide any info regarding this scheme, all these initiatives are really appreciable.

Sukanya Samriddhi Calculator

What impressed me the most is the availability of the excel-based calculator on this website. I did not expect such a move by a postal department in such a short period of time. I really appreciate such proactive steps taken by the Mumbai postal department. This calculator calculates for you the expected maturity value that you’ll get after 21 years based on your annual or monthly contributions. You can check the maturity values based on your variable contributions as well.

You can get an idea about the maturity values from the below pasted tables as well based on your annual or monthly contributions and a constant rate of interest of 9.2%.

Maturity Value Table – Yearly Contribution


Maturity Value Table – Monthly Contribution


So, I think the investors in the Mumbai region now should not feel helpless as the Mumbai postal department has done a wonderful job by providing all kind of information about this scheme on its website and also by launching a toll-free number for handling investors’ queries.

Application Form

Toll-Free Number – 1800 223 060

Will the Make In India campaign succeed?

The Make in India Concept

I don’t think there are many Indians today who haven’t heard of the Make in India campaign that was launched last September by the Modi government.

The idea behind it is rather simple – increase the share of manufacturing in the GDP, and the reason for that is rather simple as well.

With the exception of oil producing countries, there hasn’t been a single country in the world that has been able to go from developing to developed without having a strong manufacturing base.

This is simply because agriculture can only support a small percentage of population in a developed country and services can only support the better educated ones, so there are millions of people who have to rely on manufacturing jobs to get a better life that an industrialized and developed country promises.

This is obviously a great concept and anyone can see the utility of it, but how does it translate into reality and if you were to evaluate this tangibly – how would you do that?

How do you measure the success of Make in India?

I think the answer to that is fairly straightforward – If five years from now – the share of manufacturing in Indian GDP grows considerably then the campaign would have succeeded in its goal else it would have failed.

I have kept this statement deliberately qualititative because you could say that the Modi government has set up a target of doubling exports to $900 billion by 2020 and if they don’t meet that target then the campaign would have failed, or have any other hard number like that, but realistically, after the last ten years, would falling short of a hard number really be a failure if the manufacturing sector has improved in general?

But how do you know whether the campaign is just a lot of publicity without any real weight behind it before the lapse of five years?

I think you have to look at the GDP numbers and manufacturing PMI index every quarter to see if you can detect any trend and look at the reforms and big ticket investments that take place day to day.

For instance, the currently concluded Hannover Messe fair doesn’t seem to have gone down well because investments for only a few hundred million dollars have been committed as opposed to investments of 1.3 billion dollars when India was the partner country in 2006.

On the other hand, there have been several proposoals and deals from companies like Airbus, Areva, Asus, and Volkswagen that sound promising and will be a very good boost to manufacturing if they come to fruition.

Obviously, the key question here is if they will ever come to fruition, and that hinges on policy changes like the Land Acquisition Bill as well as overcoming the bureacracy and red tape that genereally exists in the Indian landscape.

Will Make in India be successful?

There are a lot of challenges that the current government face in order to make this successful. They don’t have a majority in Rajya Sabha so passing any reforms are difficult, the global economy has picked but it is still not at the pre-recession levels, and in general, it is now believed that it won’t be as easy for a developing country to create a manufacturing base as it has been in the past due to a number of technological advancements that allow roboitics to replace people on the shop floor.

That said, I have no doubt in my mind that this endeavor will be successful because there is a lot of political will to make things happen and this can be seen with the number of small steps that are taken almost every day.

Where the previous government was mired in inertia and scams, the current government has been action oriented and energetic.

Just the absence of self goals like going after Vodafone or Nokia with huge tax bills will go a long way in promoting investment in India.

I don’t think I’m alone in my optimism and since we started consulting people I’ve seen a general change in the mental outlooks of almost everyone I speak and this is best expemplified in the willingness to accept a much higher return on equities over a long period of time. People are in general much more optimistic on what the future holds for them, and I agree with that optimism.

The way things are going, the next ten years are going to be a lot better than the last ten years.

Net Neutrality in India

Ever since Airtel launched the ‘Airtel Zero‘ program, there has been a lot of anger against this program by netizens, and the anger is not going unnoticed either. In fact, Flipkart which was one of the partners of the Airtel Zero program not only pulled out of it day before yesterday but said that they will take steps in the future to align themselves with the cause and support Net Neutrality.

If you are not following this issue closely and have largely been following this on the surface you probably think Airtel Zero is a very sinister program, and may be surprised to hear what it actually does.

Airtel Zero is a pack that gives you free data access to certain apps that have a tie up with Airtel. For instance, if Flipkart, Facebook and Twitter were to get into a tie up with Airtel under Airtel Zero – you could potentially get access to these three apps for free. Airtel would charge the apps in order to make the money it is forgoing by letting you use these apps for free.

That piece of info might surprise you because this actually sounds like a good thing for the consumer, and while you thought about the issue you were perhaps imagining some China type controls on Indian internet.

Then, what’s the problem? Why are people up in arms and want to pay more money to Airtel for their data plan?

The problem is that companies like Airtel who connect you to the last mile of the internet have control over what you can see on the internet, and at what speeds, and they have the ability to slow down a particular site in favor of others. While Airtel has very clearly stated that it has no intentions of slowing down other sites, the fear is that it will eventually come to that.

Net Neutrality was debated very hotly towards the end of last year in the US and the key reason for that was the internet service providers there were very close to getting their ways on controlling speeds, and that is a very dangerous thing.

At that time, there was a lot of online agitation against making such changes and I wondered if such a thing could be replicated in India. Therefore I’m very glad to see that Indians have been able to rally together and get corporate and government attention to this cause when the situation is even not that alarming.

Even Mark Zuckerburg had to pay attention and post his thoughts about Internet.org which sort of violates net neutrality, but I think is generally a good thing for the people who use it.

This issue becomes complicated to discuss intelligently because the phrase itself can mean many things, and when you paint it all as negative it does injustice to some of the more positive things that fall under it such as Internet.org.

I think the way to look at Net Neutrality is to keep in mind the underlying spirit of the concept which is that on the internet everyone big or small is the same. You should have access to OneMint the same way that you have access to Economic Times or Moneycontrol. The smaller players shouldn’t be disadvantaged by larger players with deep pockets, and in the case of Airtel Zero that was going to happen because only companies with deep pockets would have been able to strike a deal with them and allow access to their apps for free. I personally feel Internet.org  does no harm to smaller players as far as I can make out and enables people with little resources to access some parts of the internet, and that to me poses no threat to anyone and doesn’t violate net neutrality. I know this position is vehemently opposed by others, but I don’t buy into that myself.

Giving every one access to the internet is important and protecting the interests of a one person startup and getting them the same rights as a million dollar corporation is what this is about in my mind, and what needs to be protected.