MINT ON THE DECADE 03 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN ART
It was the decade when sales figures made more news than artists or art commissions, but also when the definition of contemporary Indian art practice took an aboutturn B Y A NINDITA G HOSE firstname.lastname@example.org
························· he centrepiece of artist Sudarshan Shetty’s 2006 exhibition titled Love was a stainless steel dinosaur making love to a shiny sports car. Love, the artist pointed out, begins with a basic human emotion, but at the other end of the spectrum it becomes a market phenomenon. Shetty’s installation, a metaphor for the old falling in love with the new, illustrates a decade in which Indian art made strange bedfellows with the bazaar. It was a decade when sales figures made more news than artists or art commissions. The 2000s really started in the mid1990s, though. Sotheby’s held the first auction dedicated to Indian art in 1995 in New York, flagging off a steady ascent of Indian art on the global circuit. Between 2000 and 2010, the auction market for Indian art shot up from around $5 million to an estimated $85 million. The start of the decade also marked the launch of Saffron-
Different shades: Anish Kapoor’s pigment works on display at the National Gallery of Modern Art in New Delhi.
art, India’s largest auction house, which rapidly elbowed its way onto the scene alongside established international veterans such as Christie’s and Sotheby’s. Several factors underwrote the growth of the Indian art bazaar: the Indian economy, the new affluence of its population, and the global interest in the “India story”, of which art was the newfangled frontier. At the vanguard of the wave were works by the modern masters such as S.H. Raza and F.N. Souza. In 2005, Mahishasura, a painting by modern artist Tyeb Mehta, sold for $1.58 million at a Christie’s auction in New York—the first time a work of Indian art breached the $1 million barrier. Since then, the barrier has been broken several times. Contemporary art from India enjoyed a spillover of this success. The immature market was unable to contain the euphoria. Prices spiralled out of control. And between 2005 and 2006, TURN TO PAGE Z4®
04 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
Gaining lustre: Peter Nagy, director, Nature Morte Gallery, walks past a 2010 installation by Subodh Gupta called Bird.
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2002: RAQS MEDIA INVITED TO DOCUMENTA The 2002 edition of the prestigious art exhibition, Documenta, in Kassel, Germany, invited Delhibased Raqs Media Collective to show its work.
2005: TYEB MEHTA WORK SOLD FOR $1.58 MILLION
2009: MELTDOWN HITS INDIAN ART MARKET The global recession hit the Indian art market in early 2009—Bodhi Art Gallery’s global operations shut shop, art funds such as Osian’s and Copal were unable to pay back investors. Green shoots emerged in March 2010 with the auction market getting back on its feet and artists Bharti Kher and Arpita Singh creating highflying auction records.
the canvas got vulgar: some investors and gallerists even colluded to place false bids. In all of this, the art being produced became secondary—almost assembly line. Perhaps, the best illustration of all that was wrong were the art funds that came up, the most notorious of them being Neville Tuli’s `100 crore Osian’s Art Fund and Ajay Seth’s Copal Art Fund that aspired to touch the `1,000 crore mark. This frenzy was very much in tandem with the money-minded upswing in other parts of the world, although on a far different scale. While Indian art was making its million-dollar debut, British artist Damien Hirst was tagging his diamond-studded skull, For the Love of God, at $100 million. On the upside, the boom spurred ambition. Subodh Gupta became the first Indian artist to have his name recognized across the globe, even participating in prestigious charity events such as Bono’s RED Campaign. This wasn’t a flash in the pan. In the past few years, there hasn’t been a Biennale that hasn’t featured him—from Art Basel to the Venice Biennale, and other fairs in London, Paris, Zurich, Brisbane and Seoul. Other artists such as Atul Dodiya, Jitish Kallat and T.V. Santosh acquired an artistic vocabulary that internationalized their collector base. Their art was getting bigger too, forcing galleries to step up curatorial practices and ramp up their spaces. Gallery Chemould in Mumbai, one of the country’s oldest showcases for contemporary Indian art, moved to a larger space in 2007. Several new galleries—Project 88 and Chatterjee and Lal in Mumbai, Galleryske in Bangalore—were founded. New magazines of art news and criticism such as Art India and Art & Deal flourished. Jawaharlal Nehru University in New Delhi instituted art history graduate courses that are producing a new generation of museologists and art critics. India even got its first international scale art fair, the India Art Summit, in 2008. There was one factor in par-
ticular that orchestrated the upswing. This was not an auction house or an artist, but an art gallery—the Bodhi Art Gallery. Founded in 2006 in Mumbai by Amit Judge, a dynamic entrepreneur who set up, among other businesses, the coffee chain Barista, it transformed the rules of the game. At its peak, Bodhi had centres in New Delhi, Singapore, New York and Berlin. The artists whom Bodhi represented with style and panache across the world, loved the gallery. If art critic Girish Shahane calls Bodhi the most prominent emblem of the art market’s dizzying climb, it is also the emblem of its free fall. When the global recession hit the Indian art market in early 2009, all of Bodhi’s international outfits were forced to shut shop. Prices of some of their feted artists came down by 50-70%. At the peak of the meltdown in March 2009, the aggregate of sales of the three auction houses for Indian art (Christie’s, Sotheby’s and Saffronart) was under $5 million. In the summer of 2008, this figure had been $21.4 million. But pundits saw virtue in this debacle. When the bubble burst, it sifted the collectors from the speculators. The art world brought back that crucial connect between artistic achievements and prices that had gone haywire during the boom. After the recalibrations that
$1 million Modern artist Tyeb Mehta’s ‘Mahishasura’ broke the glass ceiling for the Indian art market by fetching $1.58 million at a Christie’s auction in New York in 2005, crossing the milliondollar mark for the first time. The record was broken several times subsequently: FN Souza’s ‘Birth’ sold for $2.5 million in 2007, and most recently, SH Raza’s ‘Saurashtra’ went for $3.49 million at a Christie’s auction in June 2010.
followed, Indian art is once again poised for glory. This time, however, all parties concerned will be cautious. The first “green shoots”, according to a report by London-based art market research firm ArtTactic, were seen last March. Aside from the fact that the Indian art market came full circle, it was the decade when the very definition of contemporary Indian art practice took an about-turn. The 2002 edition of Documenta, a major exhibition of contemporary art that takes place every five years in Kassel, Germany, heated up the scene by inviting Delhi-based Raqs Media Collective to show their work. This was the beginning of the collective’s engagement with the contemporary art world that has resulted in some highly compelling installation work in recent years. The 2009 Venice Biennale, too, invited performance artist Nikhil Chopra to represent India, establishing a new way in which emerging artists from India would engage in the global dialogue—with more confidence. Most importantly, this was the decade when the creature called the Indian art collector came into being. Up until this decade, serious collectors of Indian art such as Emmanuel Schlesinger and Charles Herwitz had been European or American. Collectors such as Anupam Poddar, Kiran Nadar and Rajshree Pathy are promising additions functioning outside the market realm. Poddar’s 7,500 sq. ft nonprofit Devi Art Foundation is in effect India’s first contemporary art museum. And the good news is that the Indian government is working to make this sort of philanthropy tax efficient. We do have miles to go in terms of developing a viable infrastructure for art education and appreciation, but it seems like the word ‘art’ itself has acquired a new energy in the nation’s consciousness. The celebrated British sculptor Anish Kapoor’s recent foray into India made big news, making for a fitting endnote to the decade. And it is quite the metaphor then that his Sky Mirror stationed in the lawns of the Capital’s National Gallery of Modern Art, looks skywards.
SUBODH GUPTA He became the first Indian contemporary artist to achieve name recognition across the globe (and hit the $1 million mark), with participation in prestigious charity events such as U2 vocalist Bono’s RED Campaign. In the last few years, his work has featured at every single internation al art fair and biennale.
NEVILLE TULI Nearly all the art funds established in the boom time of 2006 failed to deliver or simply folded. But Tuli became the face of Indian art funds gone bust because of his grandiose declarations at the time of the boom. Tuli’s `100 crore Osian’s Art Fund failed to pay back investors the promised amount when it reached maturity in 2009.
ANUPAM PODDAR India’s first serious art collector, he and his mother Lekha set up the country’s first museum of contemporary art, the Devi Art Foundation, in 2008. The Poddars are bold art collectors who buy with great discretion, often picking artists before they have ‘arrived’.
MF HUSSAIN The master modern artist was in the news through the decade for his selfimposed exile following threats by rightwing groups over his controversial paintings of Hindu goddesses. In an unfortunate turn of events, his acceptance of Qatar citizenship earlier this year somewhat closed the debate.
MINT ON THE DECADE 05 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
Competition has raised the standard of banking and efficiency while vigilance has kept the system healthy, but the industry has disappointed rural India in a big way B Y T AMAL B ANDYOPADHYAY email@example.com
························· n 16 December, Punjab and Sind Bank (PSB), the smallest and last unlisted government-owned bank in India, completed its public issue of 40 million shares. It was subscribed 50.75 times, and following the share sale, the government’s stake in the bank dropped to 82%. The listing of 115-year-old PSB completes a cycle that began in the mid-1990s, when Oriental Bank of Commerce (OBC) sold shares to the public. This was also the key takeaway for Indian banking in the past decade—demonstrating the success of the nation’s public sector banks, the key driver for the banking industry, and accounting for 70% of banking assets. Delhi-based OBC was the first public sector bank to be listed in 1994, following an amendment to a law that made it possible for the government to lower its stake in stateowned banks to 51%. The last state-owned lender to sell shares in an initial public offering before PSB was United Bank of India (UBI). It listed on the stock exchanges in February 2010 after raising around `330 crore from the public. Before UBI, Indian Bank, which has the dubious distinction of
THE DECADE IN
wiping out its reserves and equity by posting massive losses in the 1990s, listed on the bourses in 2007. In the mid-1990s, when Indian Bank posted the highest-ever net loss by any bank in the country, it was crumbling under piles of bad assets and not too many bankers and analysts thought it would survive. PSB, too, has not been in the best of health in the past, and there were efforts to merge it with another state-run bank. Interestingly, the government has not sold its stake in these banks. Instead, banks have raised money from the public by issuing fresh shares and, in the process, the government’s stake has been diluted. This has made the banks more competitive and efficient as they need to meet the expectations of their investors. And, to do that, they need to keep the consumers happy as otherwise business will not grow. Overall, the focus has shifted from growth in balance sheet to key financial parameters such as return on assets and return on equity even as public sector banks compete fiercely among themselves and with foreign and private banks. Listing of state-run banks— spread over the last one-anda-half decades—and the arrivTURN TO PAGE Z6®
Miles to go: Farmers transport watermelons to a village market near Allahabad. The fruits of the banking industry’s development in the past decade are yet to reach large sections of the rural market.
06 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE FINANCIAL CRISIS YV Reddy: Reddy, a former Reserve Bank of India governor, is credited for saving the Indian financial system from the crisis that rocked the globe in the wake of the collapse of US investment bank Lehman Brothers. He was prudent, conservative, and did not allow Indian banks to indulge in those exotic derivatives that he himself did not understand.
THE MORTGAGES BOOM Deepak Parekh: The creator of the mortgage market in India. It’s still a very small percentage of the country’s gross domestic product and has a long way to go, but growth and awareness about the mortgage market is Parekh’s contribution to the Indian financial system. Housing Development Finance Corp. Ltd continues to be India’s biggest mortgage player.
THE RETAIL REVOLUTION KV Kamath: Kamath saved ICICI Ltd, the financial institution, by merging it with ICICI Bank Ltd and creating India’s first universal bank. More than that, the first half of the decade belonged to him for the creation of retail banking. Until his arrival, banks only chased corporations to build assets and individual borrowers were not on their radar screen.
HARIKRISHNA KATRAGADDA/ MINT
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BANKING ® FROM PAGE Z5
al of two sets of new private banks (once in the mid-1990s and then early in the past decade) have made the industry competitive and consumer oriented. Mortgages, auto loans and personal loans are the products of this decade. ICICI Bank Ltd was the first to sense the opportunity in retail loans in a growing economy, but others caught on quickly and now this is a big business. While corporations can tap the capital market for money or raise funds overseas, India’s growing middle class with rising disposable income wants to buy houses and cars, invest in the stock market, holiday abroad and send children overseas for higher education. For all these, it relies on its friendly banker who sits in an open office, entertains customers with coffee, and discusses Sachin Tendulkar’s 50th century and terror threats in Mumbai with equal ease. Till ICICI Bank, HDFC Bank Ltd and Axis Bank Ltd—the so-called new-generation private banks—came into being, it was difficult for most consumers to enter a banker’s cabin. In all key parameters, the industry has done well in this decade. For instance, the collective net profit of the industry was `7,100 crore in 2001. By 2010, it had risen eight times to `57,109 crore. Bad assets, as a percentage of loans, were 6.83% in 2001. This has come down to 1%. The net worth of the industry—capital plus reserves—during this period has risen from `57,146 crore to `3.56 trillion. The Indian banking system could remain in-
sulated from the global credit crunch and its impact in the wake of the fall of US investment bank Lehman Brothers Holdings Inc. on the strength of its high capital-to-assets ratio and low bad assets. The ratio of operating cost to total assets has come down from 2.68% to 1.87% and return on assets rose from 0.57% to 1.05% between 2001 and 2010, highlighting the industry’s efficiency. In 1991, the year India moved ahead with a process that it had begun in the mid-1980s and embraced economic liberalization, the loan outstanding in the industry was `1.24 trillion, about 24% of the nation’s gross domestic product (GDP). By 2000, it rose to `4.6 trillion, but as a percentage of GDP still remained about 25.75%. In the last decade, the loan book grew to `32.4 trillion, a little over 55% of India’s GDP. Along with the growth in the loan book, the reach of banks is also increasing. The overall number of branches has gone up from 61,724 in 1991 to 67,061 in 2000 and 81,802 in 2009 (the latest data available), but the average population serviced by one bank branch has dropped only marginally, from 15,000 in 1991 to 14,000 currently. And this is the national average—the coverage in rural India is much less than in urban India. Despite being innovative, robust, resilient and well capitalized, banking largely remains an urban phenomenon in India, and bankers are reluctant to tap the big business opportunities in rural India. That’s the biggest failure of the Indian banking industry. Indeed, some of the figures
The divide: (Top) A bank official attends to customers in Bangalore; (above) a bank branch at Sampla in Haryana’s Rohtak district. In 1991, rural branches accounted for close to 57% of the national network, but this dropped to 38.6% by 2009. During this time, the share of branches in metros rose from 10% to 18%. are glaring. For instance, in 1991, there were 35,134 rural branches, accounting for close to 57% of the total national branch network. In 2000, this number dropped to 32,673 and 48.7% of the branch network. By 2009, it dropped further to 31,549 and 38.6%. During this time, branches in metros rose from 6,191 to 8,957, and finally, to 14,761 (from 10% to 13.4% to 18%). The share of rural India in bank deposits and credit, too, has been slipping continuously, reflecting the industry’s priorities. For instance, in 1991, there were a little over 100 million deposit accounts in rural India— 31% of the total. By 2000, their number rose to about 126 million, but the market share slipped marginally to 30%. In 2009, the number rose to about 199 million, but as a percentage of total number of accounts, it remained the same—30%—as the overall number of deposit accounts rose from 355 million in 1991 to 662 million in 2009. The share of metros (in terms of accounts), however, rose from 19% in 1991 to 20% in 2000 and 23% in 2009. In terms of money
kept in these accounts, rural India’s share remained unchanged at 15% in the previous decade, but dropped to 9% this decade, while the share of metros rose from 39% in 1991 to 43% in 2000 and 56% in 2009. The contrast is sharper when it comes to accessing bank loans. In 1991, there were about 32 million loan accounts in rural India—52% of total accounts. By 2000, this dropped to 25 million and 46%. In 2009, the number rose to 34 million, but as a percentage of total number of accounts it slipped further to 31%. In these two decades, the share of metros rose from 6% to 33%. In terms of money raised through these accounts, rural India’s share slipped from 21% in 1991 to 13% in 2000 and 11% in 2009, while share of metros rose from 40% to 56% and 60%, respectively. Competition has raised the standard of banking and efficiency while vigilance has kept the system healthy, but the industry has disappointed rural India in a big way. Bankers know this and will probably make amends in the next decade. GRAPHICS BY PARAS JAIN/MINT
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THE DECADE IN
CONSUMER INDIA Several factors shaped consumers in the past decade—the mainstreaming of the other India, rising incomes, growing sophistication levels and increasing comfort with the phenomenon of consumption
HUGE INCREASES IN REAL PER CAPITA INCOME From being almost flat at the turn of the decade, it gathered pace from 2003 onwards.
RURAL JOB GUARANTEE SCHEME The Mahatma Gandhi National Rural Employment Guarantee Scheme has set the benchmark for labour rates in rural India and, hence, made the base level of wages paid go up. Buying power: Consumption comfort is now here to stay, even more so because people realize that being a consumer gives them things that being a citizen does not. B Y R AMA B IJAPURKAR ························· he language of change in India is “slow burn”, “morphing”, creeping trends and “tipping points”, that is, of slow-paced, but steadily accelerating change, which eventually gathers critical mass and becomes the new reality. It appears like nothing much is changing—until we notice that change has happened already, almost by stealth. In addition, change happens when a lot of small changes, each insignificant by itself, occur together, causing a confluence or wave of change. Finally, change in any market is caused as much by what suppliers do (or haven’t managed to do). There have been many change waves and many tipping points that have occurred this past decade. The confluence of change in Consumer India that started in 2000 has gathered force, and by the end of the decade has brought about profound change, when read together. The “strong” India (productively occupied, incomes rising, access to life-enabling basic
amenities) has gotten stronger, and is getting larger. The worry of 2000 that the strong India would be swallowed up by a weak and dispirited India several times larger than it is now no longer true. The creeping trend of the decade has been the 90 million people of Bihar leaving the realm of weak India. Road connectivity has improved in leaps and bounds— the data is there for all to see and experience—and large parts of the rural hinterland are now connected with roads and, barring a few states, very well connected indeed. Weak India has been connected firmly now to strong India, because where there are roads, interactions of all kind happen. The facilities that urban India has, the opportunities for money earning and avenues for money spending are now being “taken to” rural India. Steady income growths have happened and on an average, an Indian household has improved its by income about 1.7 times. It is also a fact that the top 20% earners in India have between 2002 and 2010 increased their share of the in-
RATAN TATA Building India’s truest, large multinational, and transforming his group to be relevant to what new India needs, and for turning into reality the dream of the middle class’ lakhtakiya car—the Nano.
KISHORE BIYANI Pioneering and shaping new accessible public spaces for the Indian middle class, and enabling aspirational India to explore its boundaries and express itself through the language of consumption.
T SUPERIOR RURAL ROAD CONNECTIVITY Better roads mean the fruits of economic growth don’t trickle down, but they are “taken to” hinterland India.
come pie by close to 10% (estimate by the National Council of Applied Economic Research’s Centre for Macro Consumer Research). The income of the top 20% crossed the 50% of total income, both in rural and urban India, last decade. The income of the lowest 20% earners in India also increased about 1.4 times between 2005 and 2010, and more if one were to look at the entire decade—so it is not that the tide of economic growth is not lifting everyone with it. However, if one were to think about the share of the income pie, their share has declined by a little less than 1% in rural India and by 2% in urban India. For businesses, this means that serving the top 20% of urban and rural India, now mercifully a continuum connected by roads, telephones and television serials, is where serious growth in profitable consumption will come from. Consumption comfort is now here to stay, even more so because people realize that being a consumer gives you things that being a citizen does not, including education, 24x7 power and clean water. The poverty effect is fading. The price discovery mechanism, thanks to all the sales of rural land, in recent times has shown even marginal landholders what the value of their assets are. Seeing more consumption fuels a desire for more consumption, and in the last decade, Consumer India has seen many new things. It has seen prices coming down and has seen new priceperformance points, even if many of them were set by Chinese goods! The consumer has learnt how to learn—and is willing to adopt new ways of doing things, as long as they make sense. The liberalization generation has pretty much come of age—and though its impact on shaping new consumption patterns will be felt in full swing
KV KAMATH Creating the bold, techdriven, universal banking footprint reaching as much of the middle and upper classes as possible, with gennext financial products and services.
SUNIL MITTAL Pioneering and shaping a new generation industry that is the central nervous system of India’s consumer economy and building a large, worldclass company.
over this coming decade, its consumption comfort is at a whole new level compared with their parents. Both pragmatic consumption to improve the quality of living as well as “feel good” consumption will boom—at all income levels. Sophistication levels and tech friendliness of Consumer India have exploded this last decade, in many interesting ways. When Indian Railways enabled online booking with a network of agents as well, it not only enticed people like you and me to go to places where planes didn’t go, but also explained the power of the Internet to a huge number of people of all ages and places in the social structure. In tourist locations, you see practically uneducated people handling sophisticated video and digital cameras with ease and not just nervously clicking on a specified button! The cellphone has made vast swathes of the country understand messages, pictures, music downloads, missed calls, and all the rest of it. The driver of a car had to explain to me how the sensor tag on the car worked, as it sailed through the Gurgaon toll road. He said that it is like a mobile phone; it has
to be charged and it talks to the big phone, which is in the booth, by signal. New airports, new metros, sea links, malls, all have information imparting value, and make for more sophisticated consumers. There is no doubt that tech comfort and sophisticating of the masses are happening. Perhaps, if one had to pick three things that have changed Consumer India for ever, it is the growth in visible consumption that will breed more consumption—what was the exception to own has become the norm; it is the empowered and discerning consumer, both rich and poor, who is saying, “I will not be seduced by low-grade marketing gimmicks, but I will unhesitatingly open my purse to hard reasoning.” And the good news is that with the blurring of urban and rural boundaries, physically and in the consumer mindset, we at last have markets of scale. Many of them, not just one, but then in India a small percentage of a large number is a large number! Rama Bijapurkar is an independent market strategy consultant, and author of We Are Like That Only, Understanding The Logic of Consumer India.
MINT ON THE DECADE 09 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN CINEMA In India, many of the changes in cinema were prosaic, with management graduates beginning to run the show, more professionally, in production houses
B Y S ANJUKTA S HARMA firstname.lastname@example.org
························· inema became intensely democratic in the 2000s. It tried to communicate the incomprehensible. Closer home, writing and marketing won over big budgets and stars. In its purest form, cinema is the most modern, subsuming and democratic of art forms. Its obvious and simultaneous assault on all the senses may seem literally dictatorial, but no two consumers have the same reasons for buying a movie ticket and surrendering to being held hostage in a dark theatre for more than two hours. For some, the reason is what passes off as the purpose of cinema: escapism. For others, it is the subject, and for others still, it is technology. Behind the camera, a film belongs to many people, although the unifying vision may be of the person sitting on the chair in front of the monitor. In the decade that has passed, this democracy expanded, even leapt. Hierarchical structures and roles were altered by technology and specialization. Movie-making became more about team work. For both the consumer and the maker, cinema became intensely democratic. Digital
A scene from Rajkumar Hirani’s ‘3 Idiots’. The remarkable success of the film—it made `315 crore worldwide at the box office in 19 days—proved that a combination of witty writing, skilled direction, star value (Aamir Khan, in this case) and a clever marketing strategy (Khan made a crosscountry tour in disguise to promote the film) can never fail a producer.
technology made the tyranny of the magnificent film camera expendable. People made movies using small, hand-held cameras, and went on to be applauded at Cannes, Venice and Toronto. The laptop became a screen on which to watch Transformers, Juno and Munnabhai MBBS. Alongside this democratization, stories and subjects became diverse. The week the twin towers fell, some American culture critics declared the death of irony in movies and pop culture. I happened to be in a culture reporting postgraduate programme at the time and followed the debate for a year. As 2002 ended, irony was of course back in scripts. But something had changed in American movies. On the one hand, Hollywood, like the nation itself, was paralysed by paranoia. The threat of aliens, terrorists and bombers became de rigeur in pulp movies. In the independent space, directors explored subjects of identity and racial politics not only in the US, but elsewhere in the world as well. And 2002-03 was the beginning of a visual movement in cinema that attempted to communicate, with the help of technology, what was perhaps TURN TO PAGE Z10®
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THE DECADE IN CINEMA ® FROM PAGE Z9
THE SMALL BOX OFFICE FILM Terms such as “crossover films” and “multiplex films” were used liberally to describe small, offbeat films in the early years of the decade. But they became a viable genre only in 200607 after three films. UTV Motion Pictures spent `2 crore to market Dibakar Banerjee’s ‘Khosla ka Ghosla’, a 2006 film, made on a budget of `3 crore. Sagar Bellary’s ‘Bheja Fry’ was made in 2007, with a budget of `50 lakh. Only 60 prints of the film were released across India, and its total box office collections after nine weeks was `6.15 crore. Again in 2007, Aamir Khan’s ‘Taare Zameen Par’, made with `8 crore, made `37 crore after a 15week run in theatres. The smallfilm model worked for films such as Neeraj Pandey’s ‘A Wednesday’ and Anusha Rizvi’s ‘Peepli (Live)’.
THE SATURATION RELEASE PHENOMENON Around 2005, with more film releases every week and more prints of each film released, the shelf life of movies went down. Rarely did a film survive beyond four weeks. In 2008, Indian Film Co. released 1,550 prints of the AamirKhan starrer ‘Ghajini’, which meant about seven shows in multiplex screens every day, across metros and Btowns. No other film had a chance of surviving with this distribution plan. The success of ‘Ghajini’ made saturation release a strategy for producers.
incomprehensible in real terms—or which was “surreal”, the word most used to describe the spectacle of the American Airlines flight crashing into the twin towers. The Wachowski Brothers, who made The Matrix in 1999, became consummate storytellers of complex philosophical ideas in the past decade with their two follow-ups, The Matrix Reloaded and The Matrix: Revolutions. Later on, films such as Wall-E directed by Andrew Stanton and Inception directed by Christopher Nolan made the hyper-real more real than the ugly, street real we’ve seen in movies before this decade. And the US was forced to look outward. Could Danny Boyle’s Slumdog Millionaire about a wretched Indian slum child’s dramatic reversal of fortunes have won a dozen Oscars and Golden Globes in the pre-9/11 world? Perhaps not. Underlining many of these films was a perception of doom, which permeated movies all over the world—from Korea to Norway. Even the smaller, indie films—we even began to see them in India—smacked of larger social forces at work, dictating and threatening human life. The sterling Indian example of this wave was Love, Sex Aur Dhokha directed by Dibakar Banerjee—a grainy, powerful, hyper-real experience for the Indian movie-goer. Still, in India, many of the significant changes were prosaic and logistical. There was a metamorphosis in the way movies are made, which had less to do with technology or style, and more with economics. For the first time, the producer became a corporate machine. Management graduates ran the show at UTV, Big Pictures, Indian Film Co., PVR Pictures and other film corporations. They placed their stakes on stars and big budgets—basically anything that grabbed eyeballs. The mid-2000s was a time when Kapoors and Kumars, like kids in a candy store, could demand to be satiated by a few crores. Predictably, big budget translated largely
into some monumental flops in the history of Hindi cinema—Chandni Chowk to China, Blue and Kites. According to trade analysts, the Mumbai film industry lost close to `1,000 crore between 2006 and 2009. The old-world producer’s formula—or the lack of one—on the other hand, worked. Mukesh Bhatt’s Vishesh Films invented a genre of saleable, medium-budget films with risqué subjects, packaged with catchy songs and newcomers. He also discovAR RAHMAN ered Emraan Hashmi and Mallika The only truly Sherawat. Vidhu crossover artist Vinod Chopra profrom India, the duced the biggest music composer hits of the defrom Chennai won cade—the Munnabhai films and 3 Idithe Oscar for his ots. score in Danny Thankfully, Boyle’s Slumdog through the decade, Millionaire. the only foolproof formula for a film’s success was good writing. It was the decade when the writing duo of Rajkumar Hirani and Abhijat Joshi redefined the Hindi blockbuster. Munnabhai MBBS and Lage Raho Munnabhai combined social commentary with a brand of gentle humour that may not embrace all kinds of viewers, but which alienates very few. The box office jingled not to big names, but clever writing and marketing. Who can ever forget Aamir Khan travelling to remote villages in disguise, promoting the lead character he played in 3 Idiots? The strength of other directors such as Anurag Kashyap, who made Black Friday and Dev.D—revolutionary films when they released and beJAMES CAMERON came something of a phenomBy investing a decade and enon—is a combination of a more than $300 million, young, edgy sensibility, good Cameron made Avatar. He writing skill and promotional strategy. proved that technology can The next few years, everyenable magical flights of the where in the world, will be the imagination. He visualized years of reckoning for the proanother world and other ducer. When all kinds of conspecies of living beings, tent become acceptable and easily accessible, how do you and yet made their story retain the magic of making universally appealing to the movies? And how do you make human mind and emotions. money out of discovering talent?
THE BIG BUDGET MYTH With the corporatization of Mumbai’s film industry in the early 2000s, the old producer was replaced by executives who agreed to hikes in the fees of stars and budgets of movies. In 2002, producer Bobby Bedi signed on Aamir Khan for `5 crore for Ketan Mehta’s ‘The Rising’, a leap of more than `3 crore in the rates that he and some of his contemporaries such as Shah Rukh Khan had been asking. By 200506, stars began getting as much as `20 crore for a film. Later in the decade, budgets of movies began to be dictated by production value and stars rather than script. A classic example was the first `100 crore film ‘Blue’ (2008), which received scathing reviews and made only `65 crore at the box office.
Quantum leap: A still from James Cameron’s Avatar, which became the highest grossing movie ever.
THE WACHOWSKI BROTHERS American comic book writers Andy and Larry Wachowski altered the way cinema can be used to tell stories and communicate complex philosophical ideas with The Matrix series.
AAMIR KHAN Aamir Khan redefined the way a film can be promoted and marketed. Lagaan, Rang De Basanti and 3 Idiots, the three blockbusters of the decade, had him in the lead role. As a producer, he made small films such as Taare Zameen Par and Peepli (Live) commercially successful.
MINT ON THE DECADE 11 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN
CAPITALISM The spread of cellphones, the speedy resolution of the crisis at Satyam Computer, and the independence and behaviour of RBI and Sebi are three positive outcomes of the past decade AP
lier? Ironically, for years the market did have reservations. The price-earnings multiple of Satyam was for long at a discount to its competitors. But then, things seemed to be getting better. The company won awards for “corporate governance” and the discount narrowed. The independent directors were exemplary stalwarts, the auditor was a Big Four firm, not a little one subject to blandishments. Again, the full story may never be properly written for years to come. Suffice it to say that “awards” have lost some of their credibility and shine! The pleasant surprise was the reaction of the state. Not many know that the incumbent minister for company affairs belonged to the Rashtriya Janata Dal, which the urban media believes lacks all sophistication. And yet, it was the ministry under his leadership
Spreading net: The mobile phone phenomenon continues to grow in India despite being hit by one of the biggest scandals towards the end of the decade.
B Y J AITHIRTH R AO email@example.com
························· oday, India is, above all, the country of cellphones. The phenomenon continues to grow despite the fact that the decade ended with the cellphone getting tangled up in probably one of the biggest scandals of crony capitalism anywhere in the world. But it was not just about crony capitalism everywhere. The sober manner in which the Satyam Computer Services Ltd scam was handled and how quickly the derailed situation was righted has to remain a great tribute to the actors involved—be it the department of company affairs or the Securities and Exchange Board of India (Sebi) as institutions or Housing Development Finance Corp. Ltd (HDFC) chairman Deepak Parekh and former Nasscom chief Kiran Karnik as individuals. Autonomous institutions such as the Reserve Bank of India (RBI) and Sebi came through as credible and as possessed of both good sense and integrity. Ironically, their autonomy is under attack as the politician and the bureaucrat based in Delhi want to take away their freedom and their financial stability. In passing, one wonders whether RBI and Sebi function well because they are not located in Delhi. Delhi seems to corrode everything it touches. The Telecom Regulatory Authority of India (Trai), which could have done a sensible job, has proved itself inept and possibly tainted. The spread of cellphones, the speedy “resolution” of Satyam,
and the balanced behaviour of RBI and Sebi—for this writer, these are three positive outcomes of the last decade—all of them strengthen democratic capitalism, which with all its faults (and there are many: think Enron Corp., think Lehman Brothers Holdings Inc.) remains the freest, the most transparent, and the most efficient system for allocating societal resources and for encouraging mutually advantageous exchange. The mobile phone revolution comes as a tribute to C.K. Prahalad, who tragically passed away during the decade. It was he who articulated clearly the possibility that capitalists could earn a profit serving intelligent consumers at what he described as “the base of the pyramid”. It is fascinating to note that it is the poor consumers who change caller tunes often—even though it costs them a not insignificant amount in relative terms—making the phone companies the largest “sellers” of music today. Railways changed the world a century and a half ago. Cellphones are doing something similar. The scale is bigger, the speed more breathtaking—and the effects are such that only future historians will be able to properly assess them. Satyam was a strange occurring. The bahuroopiya (traditional artists who dress up as others) talents of the Janusfaced promoter of the company hit the country hard. After all, information technology (IT) was supposed to be the clean poster boy of the new India. How did this happen? How did the markets not smell it out earBHARATH SAI/MINT
Troubleshooters: In the wake of the Satyam crisis, the Centre appointed a threemember board for the firm. (From left) former Sebi member C. Achuthan, HDFC chairman Deepak Parekh and former Nasscom president Kiran Karnik at a conference in Hyderabad in January 2009.
that moved swiftly, sensibly and, dare I add, patriotically. No government funds were expended. But the government provided crucial leadership when it was needed. Persons with credible integrity and competence were appointed to take charge. They moved quickly and transparently. A big player in Indian IT was put back on the rails. Customers, foreign and domestic, were relieved; employees were saved from whimsical layoffs. Foreign customers and investors noted how much better was the quality of public intervention in the Satyam affair than it had been for Enron or WorldCom. The Satyam episode sets an important precedent. Scams and frauds will not disappear. But when they happen, Indian industry can recover in a sensible manner with minimum disruption to stakeholders. This is perhaps why even with the ongoing slowdown in the global economy, large Indian IT companies have continued to show good growth rates. Their customers trust them. Capitalism requires that there be institutions and institutional processes that are stable, predictable, fair, and that legitimate commerce is encouraged, while frauds (the Achilles heel of capitalism) are restricted, given that complete elimination is not possible. Sebi stayed focused on keeping the capital market fair and transparent. In the long run, this is going to ensure the efficient allocation of capital, which China sorely
lacks, and which India lacked in the infamous permit licenceController of Capital Issues regime. The political establishment in Delhi is clearly under pressure from “lobbyists” to allow business conglomerates to start banks, which no doubt, will serve the purposes of these conglomerates rather than the interests of the public. The autonomous RBI responded with a masterstroke. It asked for “public comments”. This process leverages the principle of transparency to ensure that backroom deals in Delhi do not become public policy on the sly. The chambers of commerce have supported their big members. But some of us have also been able to add our bit in the glare of public scrutiny. Giving business conglomerates banking licences will ensure that India descends into crony capitalism in a fast-forward mode. Hopefully, RBI will resist. The current climate of big business scandals should come in handy for the doughty officials in RBI to ensure the ongoing separation of banking and commerce in our country. Of course, many other things happened in the decade. As an optimist, this writer has picked three events and trends— whatever you call them. With all the prevalent negative vibes of today, it was, on balance, a good decade and, hopefully, a precursor of another good decade ahead. Jaithirth Rao is chairman of Value and Budget Housing Corp. Pvt. Ltd.
12 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN
ECONOMIC BEHAVIOUR PRIYANKA PARASHAR/MINT
Guiding light: Daughters of farmers at KGBV School in Lucknow. In emerging India, people are keeping aside more money to spend on education, health, entertainment and communications: items that enable them to prepare for the future and also help them better enjoy the present.
The acceleration in economic growth over the last 10 years ensured that average income more than doubled between 2001 and 2010.
Surging aspirations among even the poorest Indians as well as the effects of a few government programmes have altered everything from eating behaviour to school attendance.
Higher demand for milk, fish, pulses, meat and eggs could not be matched by higher production, ensuring that the price of proteins soared towards the end of the decade.
India isn’t there yet, but is moving to a stage where people are less worried about their present and immediate future; at this point they will start demanding better social and physical infrastructure B Y N IRANJAN R AJADHYAKSHA firstname.lastname@example.org
························· wenty years after the advent of radical economic reforms and at the very end of a decade of unprecedented growth, it is worth asking a simple question: has all this made any difference to the lives of ordinary Indians? The popular view is that a narrow elite has captured the benefits of high growth, while the condition of the vast majority has either stagnated or actually deteriorated. From this comes the rhetoric about how there are two Indias living next to each other in an uneasy truce. It is time to bust
that myth. There can be no doubt that far too many Indians still hover at the edge of crushing poverty. They have been denied the opportunity to participate in a booming economy: lacking the skills to take a modern job, unable to grow tiny businesses because they have been shut out of the financial system, and bullied by a government apparatus that is either corrupt or violent. A million mutinies can still explode around us. Yet, there is also evidence that the lives of ordinary Indians are gradually improving. Growth is benefiting at least eight out of every 10 Indians.
The United Nations Development Programme said in its Human Development Report 2010 that India has been one of the star performers in advancing human development since 1980. It is sixth in the list of countries that rapidly improved their human development indicators. What is even more interesting is that the past decade saw the biggest advances in human development compared with the 1980s and the 1990s. The National Council of Applied Economic Research said earlier this year that there are now more high-income households in India than low-income households—46.7 mil-
lion versus 41 million. At the start of the decade, there were 13.8 million high-income families and 65.2 million low-income families. Sixty-two percent of Indian households are now in the middle class, earning between `45,000 and `1.8 lakh a year, an income range the think tank believes provides enough income for discretionary spending on consumer goods. Real incomes have doubled in the past decade. Higher incomes usually change the economic behaviour of people. They tend to eat better, getting more of their nutrition from protein-rich foods such as pulses, meat, eggs and milk rather than from cereals. The higher consumption of meat and eggs may also indicate that traditional caste barriers are weakening. The proportion of money kept aside in the average family budget for food declines in tandem with higher incomes. Relatively more is spent on education, health, entertainment and communications: items that enable people to prepare for the future and also help them better enjoy the present. We see a lot of this already happening in India; you can call it aspirational spending or crass consumerism, depending on your political beliefs. Government data on consumer spending indicates that spending on food, as a proportion of total family budget, has expectedly gone down in the past 10 years. `4 out of every `10 spent by an average Indian at the turn of the century was on food; that proportion is now down to `3 out of every `10. One-tenth of the spending budget has been released for other uses. What are we doing with this money? The data shows that proportionately more money is being spent on items such as healthcare, communications, transport and education. Consumer goods for household and personal care have also grown in importance in private spending. The spread of mobile phones is a known story. But few know that perhaps seven out of 10 homes now have ceiling fans. Radios and wristwatches are almost ubiquitous. People are putting their children in school, even private schools that have mushroomed in urban slums. School enrolment numbers have soared though studies by activist group Pratham show that few children can read and write adequately. Dropout rates are still too high. However, the fact that nearly all children enter primary school is no small achievement. Indicus Analytics chief economist Sumita Kale has pointed out that India accounted for 25% of the world’s out-of-school population in 2001; that is now down to less than 10%. Keeping children in school and ensuring the school system works are the next big challenges.
AVERAGE ANNUAL HDI GROWTH RATE (in %)
1.44 1.66 19912000
Is the condition of the average Indian improving? The pat answer usually provided is ‘no’. It is well known that India fares terribly when measured by human development indicators. We are a country with more mobile phones than toilets, for example. But here’s the good news: India has been one of the top 10 gainers on the Human Development Index since 1980. And these improvements have accelerated in the past decade. It’s a start—and an overdue one.
Look at some other random signs around you: ordinary people on the move, better dressed than before, with the omnipresent mobile phone, dreaming of a scooter, ready to buy a shampoo sachet or a small packet of biscuits, and, above all, uniformly certain that they want their children to have a better life than theirs. These are the first signs that the raw battle for survival is receding and Indians have become more aspirational. What does this all amount to? There is perhaps a pointer to the future here. We can think of the process of national change in four stages. The first stage of mass poverty is dominated by the struggle for survival. The second stage leads to growing personal consumption. Then comes the stage when people start looking to a better family future through higher spending on health and education. The fourth stage is when people are less worried about their present and immediate future; they start demanding better social and physical infrastructure. In the language of economics, the social discount rate starts falling as affluence spreads. India, in the first decade of this century, was perhaps in the third stage of progress. Sustained growth over the next decade could put India at the cusp of a political revolution, when ordinary voters become less obsessed with immediate handouts and start demanding better schools, hospitals, roads, electricity supply, and the like. Opportunity would then become a more potent issue that entitlements.
FOUR THEMES EAT, PRAY, LIVE
WE DON’T NEED NO EDUCATION?
MUNNI, ZANDU BALM AND ALL THAT
The malnourishment numbers are frightening, and percapita cereal consumption has stagnated over the past few decades. But there are also encouraging signs that diets are growing richer, with more consumption of proteinrich foods such as milk, eggs and pulses.
The Pink Floyd anthem may still be hummed by children spoilt for choice, but the poor desper ately want to send their children to school. Pri mary school enrolment has soared, though subsequent dropout rates continue to be high. Also, a broken schooling system ensures that Pappu can’t read.
Higher incomes mean that the average family has to keep aside relatively less money for food. A bigger proportion of the family budget is available to basic consumer goods such as shampoo sachets and biscuits. Most homes now have electric fans, and wrist watches are ubiquitous.
A lot has been said and written about India’s magnificent telecom boom. And it shows no signs of abating. A telephone was once consid ered a luxury. It is now an essential tool for liv ing in a connected world—be it college kids tweeting or farmers using mobile phones to get price information.
MINT ON THE DECADE 13 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM AFP
THE DECADE IN
Melting point: A file photo of a glacier in Antarctica.
The fallout of growth and a growing need to make sure people have first rights to resources at their disposal made environmental issues take centre stage in the past decade B Y S UNITA N ARAIN email@example.com
························· n the last decade, India’s environmental movement had a rebirth. It was first born in the 1970s, when the industrialized world was seeing the impact of growth on its environment. In that decade, the air and rivers of London, Tokyo and New York were full of toxins and bad health. The world was learning the pain of pollution. The world’s first major conference on the environment—the Stockholm meet—was held to find ways to deal with this growing scourge. India’s key environmental legislations were enacted in this period—the Water Pollution Act, 1974, and then the Air Pollution Act, 1980. But we were innocents in the world of pollution. We had not yet witnessed the sharp growth that would, in turn, destroy our environment. It was also in the 1970s that the second challenge related to the environment—issues of access and sustainable management of natural resources— took root. High in the remote Himalayas, women prevented timber merchants from cutting down their forest. But their fight was not to protect the forest.
Their fight was to assert their right to the resources of the forest. It was a battle over the right to resources. It was an environmental movement because the women of this village in Chamoli district, now in Uttarakhand, knew that they had to protect the forest to protect their livelihood. It was a call to redefine development and growth. It was only in the past decade that these two sides of the environmental challenge truly came home to India. Importantly, this was the decade where environmental issues took centre stage in the country and began to be talked about extensively, even considered in policy formulation; frankly, nobody today would dare to say they aren’t environment friendly. Car companies sell their products for luxury and sustainability; real estate giants boast about rainwater harvesting systems; Bollywood stars dance their fondness for all things green. And governments say they want low-carbon economies for the future. Being green is the “in thing”. Still, things are going bad. The pollution in our rivers is worse today than it was three decades ago. The garbage in cities in growing by the day, even as governments scramble to AFP
Showing dissent: Protesters take part in a demonstration in London against mining firm Vedanta Plc.
find ways of reducing plastic and hiding the rest in landfills in far-off places. Air pollution in cities is worse, and toxins continue to hurt our bodies and damage our lungs. This, in spite of efforts to contain the problem: We have invested in building sewage treatment plants to deal with water pollution; we have improved the quality of fuel that runs our vehicles, changed emission standards and set up institutions to regulate industrial emissions. But still we find we cannot catch up in this game of growth and its toxic fallout. In the last decade, the struggle for control of resources intensified. Everywhere in the country where land was acquired, or water sourced, for industry, people fought against it, even to their death. In Sikkim, bowing to local protests, the government cancelled 11 hydroelectric projects. In Himachal Pradesh, dams are so controversial that candidates who said they wouldn’t allow them to be built won elections. In Narendra Modi’s Gujarat, it is said that his party fared badly in recent local elections only in those places where farmers had previously opposed industrial projects. South Korean giant Pohang Iron and Steel Co.’s (Posco) iron ore mine, steel plant and port in Orissa have come under fire. In Maharashtra, mango growers are up in arms against a proposed thermal power station in Ratnagiri. The decade saw a million pollution mutinies. In India, vast numbers depend on the land, the forests and the water they have in their vicinity for their livelihood. They know that once these resources are gone or degraded, they have no way to forge ahead. This is the environmental movement of the very poor. Here, there are no quick-fix techno solutions in which the real problems can be deferred. There is only one answer: changing the way we do business, with the poor and with their environment. It will demand we reduce our need and increase our efficiency for every inch of land we need, every
tonne of mineral we dig, and every drop of water we use. It will demand new arrangements to share benefits with local communities so that they are persuaded to part with their resources for universal growth. If we can listen and learn, maybe, just maybe, this environmentalism of the poor may teach not just us, but the entire world, how to walk lightly on earth. These are the same choices environmental movements in rich countries asked them to make, some two generations ago. They made the wrong choices. This is why the challenge of climate change remains a challenge. Today, these societies are rich, they have cleaned up their streams and their black
smoke. But their economic growth and their lifestyle is putting the entire world at risk because of climate change. They have no real answers about the future because they want to keep tinkering with the present. They are looking to find small solutions to the massive problem of increased emissions that are linked to growth. Western environmental movement also has a different history than ours. It began after these societies had acquired wealth. So, the movement was a response to the garbage, the toxic air or the polluted water, resulting from the growth of their economies. They had the money to invest in cleaning, and they did. But because they never looked for big solutions, they al-
ways stayed behind the problem—local air pollution is still a problem in most Western cities, even if the air is not as black as ours. It is just that the toxin is smaller, more difficult to find or to smell. They keep spending, keep investing in technology to deal with the present. As such, the rich world’s environmentalists are garbage managers, nothing more. We seem to want to emulate them, with much lesser resources and much more inequity and poverty. The fact is we cannot find answers in the same half solutions they invested in. This is the challenge of our next decade. Sunita Narain is head of the Centre for Science and Environment, New Delhi.
14 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
Perceptions of wealth: A woman tries out a gold necklace at a showroom on the outskirts of New Delhi. This was the decade that urban middleclass India began to slowly step out of the protection of governmentassured returns into the world of marketlinked products.
AHMED RAZA KHAN/MINT
THE DECADE IN
R42 lakh The pot on 1 January 2011 with a small investor in the Nifty, who started with `10,000 a month from 2000.
It was the decade when money became Money and India learnt not just about guiltfree consumption, but investment as well B Y M ONIKA H ALAN firstname.lastname@example.org
························· have an early childhood memory of my mother not letting me drink milk in a kaanch ka glass (glass tumbler) standing out on our small balcony in a middle-class Delhi apartment complex. “It attracts attention,” she’d say. To what, the 10-year-old me wondered. To consume or display any sign of wealth in public was to attract the envy of others less fortunate was the final distillate of the long lecture that my grandmother jumped in to deliver. Cut to 2010. The same mum now sits happily in a glass-fronted café to sip a cappuccino. Granny, rest her soul, watches indulgently from elsewhere, wishing, I’m sure, that she were here too. That Death by Chocolate looks so good. The last decade of the 20th century retained traces of the old traditionalist attitude to money. Shrugging off the decade that still carried traces of our colonial past in the first two digits, and entering the 21st century seemed to free many of us from the past. And the most visible sign of this is in the way our relationship with money changed. We saw what a transition from a gross domestic product (GDP) of 4.4% that we began the decade with to double that halfway through the decade could mean for us. We realized that from mere middle class, we were morphing into something called the mass affluent. Suddenly debt became a good four-letter word—home loans grew at an average 21% a year to `3.15 trillion in 2010. Credit card use streaked ahead at 17% a year, and by 2010, kids were buying Levi’s on EMI (equated monthly
I 2004 GDP growth at 8.5%, low interest rates set the stage for the Great Indian Bull Run.
2008 World economy crashes; India’s GDP growth falls to 6.7%, market crashes 25%.
2009 India bucks the trend—GDP growth recovers to 7.4% and market grows 26%.
instalments) to look cool on a budget. This new ease with debt has deep linkages with how people view their future. Long-term debt is a statement of confidence in the ability to go on leveraging your own human capital—it will not get diseased or die (life expectancy in India at nearly 70, is up from about 55 just 25 years ago) or lose the job—for the duration of the loan and the confidence that incomes will only go up year after year. It was the decade that urban middle-class India began to slowly step out of the protection of government-assured returns into the world of market-linked products. A new list of acronyms joined the list of LIC (Life Insurance Corporation of India), UTI (Unit Trust of India), SBI (State Bank of India), PPF (Public Provident Fund), NSC (National Savings Certificates)—names heavy with the safety of government ownership. The upstarts called ELSS (equity-linked saving scheme), Ulip (unit-linked insurance plan) and SIP (systematic investment plan) came from companies that sounded like banks or had a glitzy Wall Streetlike feel to them. They came with their swanky sales team and promises of untold riches. Along with the Reserve Bank of India and the Securities and Exchange Board of India, new regulators called Irda (Insurance Regulatory Development Authority) and PFRDA (Pension Fund Regulatory and Development Authority) were called upon to patrol money street. Halfway through the past decade, the reality of our future struck home and one of the biggest booms in real estate turned sleepy middle-class residential blocks into a hotbed of builder activity. Soon, Mumbai became
more expensive than Manhattan, with one-tenth the amenities. It was the decade that we began having belief in our new place in the world. When travelling abroad, our gadgets were as good or better than the erstwhile rich, our eyes widened less (and then not at all) at the acres of malls on display, and our money now stretched well to cover converted spends, even in dollars and pounds. This was a decade when the green backed disciples of Ayn Rand ruled the world and brought it close to tipping over. We saw countries go bankrupt. We saw market fundamentalists run to the government seeking help to clean out the mess created by the greed of banks that grew too big to fail. And it was the decade where the pious preaching of the US and Europe to developing countries on good governance looked ridiculous. The decade had a Bollywoodlike end, throwing into focus structural problems in the way Wall Street was running the world. It was the decade where, from the shelter of a half-open economy, we watched the erstwhile leaders falter under the
twin forces of greed and politics. Images of Lehman Brothers Holdings Inc.’s Dick Fuld defending his actions, that of his firm and Wall Street’s greed for bonuses at any cost and that of auto chief executives flying to Washington in their private jets to ask for alms from the government became iconic. If greed was out of control, so were large acts of generosity. Bill Gates and Warren Buffett set precedents in sensible and sustained giving. Meanwhile, in India, an intense drama played out towards
S NAGANATH President and CIO, DSP BlackRock Mutual Fund, for growing retail investors’ money while keeping the fiduciary role in focus.
D SWARUP Former chairman of PFRDA, for moving Indian pensions from defined benefit to defined contribution.
CB BHAVE Chairman of the Securities and Exchange Board of India, for his singleminded focus on protecting the small investor.
the end of the decade, when simmering tensions between two regulators spilled out into the open, and the insurance and capital market regulators were locked in a never-seen-before public brawl. If one was looking after investor interest, the other was clearly influenced by corporate fat cats. India saw the amazing spectacle of the finance ministry using a cannon ball to settle the dispute, when a rap on the knuckles would have done equally well. Though the ruling was in favour of the errant regulator, investors were eventually the winners. Tough changes in insurance rules made the virulent insurance product, the Ulip, lose its sting (and its allure). On the stock market front, domestic market crashes began to be caused by global events and not just Indian events such as the Ketan Parekh scam or the Communist parties’ alliance with the Congress after the 2004 elections. Indian markets crashed due to 9/11 and in 2008. But, though the world came close to ending several times, India managed to pull through—recently freed aspirations swept aside any roadblock to growth. And through all this chaos, the tortoise walked a bit further each month. Whatever the market. Whatever the scam. Whatever the politics. Economics. Religion. Nothing stopped him from putting it away. Whatever happened, his SIP kicked in. He put away `10,000 a month in the Nifty on the 10th of each month starting 2000. And on 1 January 2011, he has a pot of `42 lakh. And growing. He’s still got 20 years to retirement. He leaves event chasing to others. He knows that India’s coming-out party is still on and will be for another two decades.
16 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI 째 WWW.LIVEMINT.COM
MINT ON THE DECADE 17 TUESDAY, FEBRUARY 1, 2011, DELHI 째 WWW.LIVEMINT.COM
18 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
Sparking unrest: A 2002 photo of firefighters trying to douse flames on a train in Godhra, Gujarat, after it was set on fire by a mob. The riots that followed in Gujarat sharpened the polarity between the Hindus and the Muslims.
The Maoist rebellion: Defying government boasts of annihilation for four decades, Leftwing extremism assumed its most potent avatar since the Naxalbari uprising of 1967. Building on the core issue of nongovernance, Maoists cut a swathe through Andhra Pradesh, Chhattisgarh, Bihar and Jharkhand, and touched large areas in Orissa, Maharashtra, West Bengal and Madhya Pradesh. To maintain steam, Maoists have morphed, changing from landtothetiller slogans to adopting issues of tribal rights, caste inequity and displacement by projects. Cadre profile has changed tellingly from urban intelligentsia to include victims, broadening the base to an estimated 30,000 members of the People’s Local Guerrilla Army and various groups of militia. Now under pressure, Maoists still offer the sharpest reflection of the failures of the Indian state.
THE DECADE IN Salwa Judum: The chief minister of Chhattisgarh, Raman Singh, will go down in history for supporting the Salwa Judum terror campaign to combat Maoists. Initially, building on resentment against Maoists, the movement quickly grew to a brutal vigilante force, working in concert with the administration, the police and the paramilitary. It has killed numerous innocents, destroyed villages, and corralled tens of thousands into squalid camps in a failed “scorched earth” bid to deny Maoists recruits and territory. The stench of compact with business wafts strongly— reminiscent of the movie ‘Blood Diamond’, Chhattisgarh has signed several metals and mining projects with major companies in these areas even as conflict rages. Critics of the regime such as Binayak Sen have been charged, jailed or muzzled. Singh’s acolytes are forcing a similar pace in West Bengal and Orissa. Reaction could prove uncontrollable.
The arc of fire: If there was ever an indication that India needs a calm neighbourhood, the past decade provided the indication. A restive, fractured Pakistan can only spell trouble for India’s northwestern region—and aid foment of homegrown jihadis and their newly arrived counterparts, armed and willing Hindu radicals. Nepal’s cataclysmic civil war that ended in the ouster of monarchy in 2006 has not led to either lasting peace or prosperity. An implosion there will flood India with greater migration, and greater socioeconomic and political pressure in the northern periphery. Bangladesh is emerging from years of despotic rule and a somnolent economy, but pressures in other areas such as rising population and rising fundamentalism could force greater migration into India’s NorthEast and East, and fuel an already explosive ethnic firemixture. Above it all lays the game board of Chinese Checkers.
FRACTURES Maoism, the demand for more states, increasing pressure on resources and other internal dynamics made the threat of greater schism in India all too real B Y S UDEEP C HAKRAVARTI email@example.com
························· n the work-in-progress schizophrenia that is India, the past decade was one of rude shocks. A smaller, less dispersed and less economically diversified country may well have wilted under such a hail of chaos. Riots in Gujarat in 2002 sharpened the polarity between Hindus and Muslims. Terror strikes from imported and home-grown jihadists regularly peppered several cities; it marked Parliament in 2001 and scarred Mumbai in 2008. Kashmir continues to bleed bodies, the economy and national psyche, and, to a lesser extent, so do Manipur and Assam—adding to the general mess of leadership egos and sledgehammer, kleptocratic rule. More farmers have died this decade by suicide driven by expensive farm inputs, debt and warped policy than since the starvation deaths brought on by the great famine of the 1940s. Near-total abdication of governance and justice led to the rapid spread of extreme left-wing rebellion led by Maoists in six central and southern states, with three more in partial churn. In turn, this bred a cynical compact between the government and business to eject rebels from mineral- and resource-rich areas, using state-sponsored vigilantes riding on police and paramilitary forces. The state-controlled Salwa Judum in Chhattisgarh, for example, has killed scores of innocents, razed villages and forcibly corralled tens of thousands in squalid camps in the name of protecting them and their land from Maoist incur-
sion. (In 2007, I heard the chief minister of Chhattisgarh compare Salwa Judum to Mohandas Karamchand Gandhi’s way of non-violence.) Such mayhem in what I call OutLand—out of sight of the urban, middle-class India of the In-Land, and so, less worthy of policy and media attention— has not been seen since the Naga and Mizo wars of the 1950s and 1960s. Now, the government of West Bengal is employing a similar tactic. Altogether, bad blood overtook one-third of the states in India. Meanwhile, all through the past decade, India consistently scored low on all parameters except those that denote overall economic growth. It is rated by global institutions as being among the most corrupt in the world, among the poorest in terms of absolute numbers of the poor, and among the least healthy and least literate. Deep-rooted official corruption and inefficiencies haven’t yet been dented by the welcome—though gradual— spread of the Right to Information Act; and increasing political maturity of the electorate. Such a situation leaches cohesion. How much more of this India can take will depend on how quickly governing and Corporate India—on all sides of the political divide—prevent further slide. And, by doing so, rise above the perpetual crisismanagement mantra of “India is resilient”. Self-fulfilling prophecies can have a bad day at the bazaar. The dangers lie in fault lines becoming sharper. The jihadist element has the power to terrify India, but not yet fracture it. Worst-case situations of renewed schism in the North-
East will severely reorient India’s political and defence priorities, but not fatally hurt the hub and heart of India. That hurt will come from within. The overriding issue of governance remains the go/ no-go factor in India’s make or break. The Maoist rebellion is not the only issue. While it has spread into new areas in terms of operations, propaganda and recruitment, the Communist Party of India (Maoist) and other, smaller rebel organizations are under pressure from the police of various Indian states, and Central agencies and paramilitaries under the ministry of home affairs. Several senior and mid-level Maoist leaders have been arrested or killed in the past two years. Big strikes against careless Central Reserve Police Force troopers in Chhattisgarh in 2010 have bolstered the Maoist morale—if only for a while. Current policy initiatives in the Maoist sphere and elsewhere are worrying as these
appear not to be oriented to solution, but to maintain conflict at “acceptable levels”. As I have earlier written in this newspaper, counter-insurgency capabilities take precedence over addressing issues of administration, education, job creation, food security, rehabilitating the dispossessed on account of projects or natural calamity, and issues of migration. Such attitudes will trigger deep political and geographical implications, beyond the likely reality of more states born out of a demand for better governance and development— some estimates suggest close to 50 states from the present 28: Telangana, Bundelkhand, Vidarbha, Marathwada, Jammu, Kashmir, Ladakh, Uttar Kannada, Dakshin Kannada, Gorkhaland and Bodoland, among these. A prescient report by New Delhi-based Centre for Policy Research as far back as 1997 still offers some of the best future commentary. “A demographic explosion over the next 50 years will create any number of political, economic, social and environmental tensions,” warned the report titled India 2047. “The different growth rates of different communities, castes, and regions could become a political time bomb… Above all, the consumption standards of the poor will be eroded by rising numbers.” Pressure will come to India much earlier. In 2020, India’s urban population will have gone up from around 23% of the total at present to 40%. In absolute numbers, this would mean an increase from around AP
Gaining ground: A file photo of members of the Communist Party of India (Maoist) carrying out training exercises in Chhattisgarh.
290 million to 540 million—an immense challenge, even with a rapidly growing economy. Alongside, while the proportion of rural population will lessen, it will still be in the region of 820 million. The same area, 350-400 million more people, and around the same number of new jobs to be created. In addition, there is the enormous challenge of providing basic services such as adequate food—in roughly the same amount of arable land as at present—clothing, housing and water. The pressure will increase with every successive decade. According to an estimate, the “replacement level” (a couple replaced by two children) should ideally have been reached by 2000. This “stabilization” of population is unlikely to be reached till the close of this century. At current levels of incapable irrigation, uneven agricultural productivity, and increased rates of rural displacement on account of direct human intervention (watershed and water-table loss, deforestation, projects, conflict), human displacement will be on a scale larger than anything seen thus far in India, I suggested in a paper written earlier this year for a private think tank. What of the effect of people on the move with nowhere to go, but already crushed urban and semi-urban zones? If India proves incapable of dealing with such intense dynamics, greater schism is inevitable. India is already a country of vast city-states. The National Capital Region, Mumbai-Pune, Chennai-Bangalore, Kolkata and other existing and emerging metropolitan hubs will grow continually. It isn’t any longer far-fetched to foresee these In-Land hubs emerging as autonomous areas with controlled access, with vast spaces of lesser, forgotten development falling away into null zones beyond the pale of governance by the Republic of India—Out-Land, ruled by armies of rebels and ambitious warlords. India will have brought fracture upon itself. Sudeep Chakravarti writes on issues related to conflict in South Asia. He is the author of several books, including Red Sun: Travels in Naxalite Country, and is a professional member of the World Future Society, Washington, DC.
MINT ON THE DECADE 19 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN
This was a period in which Indian literature went forward and expanded outward at the same time, bringing into its embrace many of the literary riches of its past and present that were hitherto restricted to specialists or speakers of a particular regional language JAVEED SHAH/MINT
B Y C HANDRAHAS C HOUDHURY firstname.lastname@example.org
························· he book business encompasses three universes that overlap substantially but have distinct identities and histories. These are: publishing (the book as a physical object, the mechanics of book editing, design and printing, the size of the market and the quality and diversity of the publishing houses within it), book selling (the bookshop as a site for browsing and buying, and as a cultural space, the distribution networks of publishers, book launches and other publicity methods), and, less tangible than the other two, but the thread running through it all—the idea of literature, of a reading culture. This is the acknowledged potential of the written word, deeply considered by an individual writer and then sifted through multiple quality-control filters, for nuanced thinking that calls on all the riches of language, unforgettable ver-
Reading habits: A book store in New Delhi. The spread of the Internet and the growth and burgeoning power of Amazon.com have precipitated a crisis for bookshops, which were previously the site where all the elements of literature came together.
bal patterns, provocative ideas or narrative methods, worldchanging argument or a defence of the status quo, spiritual elevation or thrilling timepass, for a mirror on the world or a vision of an alternative world. From a global perspective, not since Gutenberg invented the printing press in the 15th century has there been a more momentous decade in the history of the book. Both bookpublishing and book selling have changed shape enormously from the turn of the millennium onwards. In the West, the decline of print culture and the arrival of the ereader and the e-book have made it possible to imagine a day, due within our own lifetimes, when the printed book (like the printed newspaper) will be no more than a curiosity. Indeed, a hundred years from now, the very word “book” may not mean anything, as we move further into a TURN TO PAGE Z20®
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Print culture: A file photo of people visiting a book fair at Pragati Maidan, New Delhi. The trade book market (which comprises books published for the general reader, and not textbooks or technical books) grew threefold between 2000 and 2010, with 15 billion books published in 2010.
‘Time Out’ arrives in Mumbai (2004): Cities need their own literature to make an adequate reckoning with their past and their internal diversity. From September 2004 onwards, Mumbai (followed later in the decade by Delhi and Bangalore) found space to figure itself out every fortnight on the pages of ‘Time Out’, edited by Naresh Fernandes. The magazine, arguably the best written in India, balances culture, consumption, listings and bright citytalk, and is now central to the life of India’s first city of literature.
THE DECADE IN LITERATURE The Jaipur Literature Festival (2006): First held in 2006 with a few participating authors and a tiny audience, the Jaipur Literature Festival, the brainchild of William Dalrymple and Namita Gokhale, has now become SouthEast Asia’s biggest literary event, attracting the best minds in Indian and world literature and thou sands of interested spectators.
‘The White Tiger’ wins the Booker (2008): After being awarded the Booker Prize, Aravind Adiga’s ‘The White Tiger’ sold in huge numbers around the world, including close to a hundred thousand copies in hardback at home, demonstrating what a big untapped audience there is for literary fiction. Crucially, it also ignited the debate on the quality of India’s development postliberalization from a site other than nonfiction.
1,500 In 2010, this was the estimated value of the trade book market (covering books published for the general reader, and not textbooks or technical books) in crores of rupees. This is three times the size of the book market in 2000.
When Penguin, the market leader in the trade segment (with about 15%), started up its operations in India in 1987, it published seven titles that year. In 2000, it was up to 124 titles a year. This year, it was about 240.
® FROM PAGE Z19
world of integrated multimedia. Simultaneously, the spread of the Internet, and the growth and burgeoning power of Amazon.com have precipitated a crisis for bookshops, which were previously the site where all the elements of literature came together. Meanwhile, globalization has, arguably, made “literature” a bigger and richer space for most serious readers, making more kinds of books more easily available to more readers, permitting old books to be sold alongside new books, and allowing readers, through the Internet, to have a stronger say in book discussion and, thereby, sales. India’s book economy is on a different arc, however, and, like the Indian newspaper industry, is still on its way up rather than down. For an observer of Indian literature in English, the last decade was full of bright lights on all three counts of publishing, book selling, the density and internal diversity of the idea of literature, and the spread of a reading culture. (For the purposes of this essay, I include under “Indian literature in English” both work originally written in English and that translated into English). We might think of this decade as one in which Indian literature went forward and expanded outward at the same time, bringing into its embrace many of the literary riches of its past and present that were hitherto restricted to specialists or speakers of a particular regional language (see, for instance, the box on the Clay Sanskrit Library project). As the hub of the many literary cultures that make Indian literature the most complex and multilingual national literature in the world, Indian literature in English has a huge responsibility, one that it realized better this decade than in any one previously. The birth of many new publishing houses and imprints in the last decade, the explosion in the number of books published, the increase in the number of bookshops (particularly the big chains such as Crossword, Landmark and Odyssey), and the growth of the online book trade all point to one thing. The book business is growing rapidly. Further, many more players have a slice of that pie than was the case 10 years ago. A number of major English trade publishing houses in India appeared over the
last decade, with major new players such as Random House, Westland Books, Hachette, Navayana and Srishti claiming a share of the trade even as they helped increase its size with their distinct emphases. Widening Internet penetration has stimulated e-commerce, allowing readers in places without bookshops to buy books, and even those in areas with bookshops to access a much wider range of books or buy books at substantial discounts. Online book selling, almost negligible in 2000, now accounts for about `100 crore worth of business every year, divided up between players such as Flipkart (where I do most of my shopping), Rediff and Indiaplaza. The physical Indian bookshop, though, with some honourable exceptions, continues to be a disappointing place for the serious reader. Stocking an inadequate range of titles and manned by staff who have no real interest in or knowledge of books, bookshops in India don’t yet manage to fulfil the publisher Andre Shiffrin’s idea that “the good bookshop doesn’t just have the book you want, it has the book you never knew you wanted”. A great part of the appeal of books, we must remember, is their allure as physical objects: the way they are designed, bound, typeset. This was the decade in which, for the first time in India, books as objects met world standards. When I was a literature student in the year 2000, it was possible to distinguish a book published by an Indian publisher from a foreign one just by taking a look a it. This is no longer the case, and Indian bookshops now take pride in a wealth of books by Indian writers that don’t just read well, but look great. If there is something that Indian publishing needs now, it is better editors. To this book reviewer, too many Indian books are currently let down by their sloppy English: hoary cliches, confusing syntax, superfluities, stilted dialogue, clumsy metaphors, unselfconsciously purple prose. Indian literature itself occupies a much larger place in world literary consciousness than it did at the beginning of the decade, with a small raft of big Indian names giving way to a whole schooner of exciting voices. Indian novels in English no longer exhibit the selfconsciousness of most earlier works in the language, and good new novels appear now
not in their ones and twos, but at the rate of a couple of dozen a year. Unfortunately, writers in English have a much greater chance of being published in markets outside India (something that distorts foreign perceptions of Indian literature). This is slowly changing, but it may take another decade to take full effect. The revolution must begin, however, by more Indian readers consciously seeking out literature in translation. Another pointer to the maturation of Indian literature in English this decade was the emergence of genre fiction of various kinds, from thrillers to chicklit to campus novels to pulp fiction in translation, thereby opening out the market for Indian fiction dramatically and bringing in readers hitherto deterred by or unsympathetic to novels. Most of these books don’t yet meet the standards of the educated reader of literary or genre fiction (and some, as Aadisht Khanna pointed out in a hilarious piece in Mint Lounge in September, are so bad they’re good), but they are part of the story of Indian literature this decade as much as an Amitav Ghosh or Aravind Adiga. As a sign of India’s growing power within the world of Anglophone fiction, the decade was also marked by the establishment of a number of indigenous prizes for Indian or South Asian works of high literary merit. The Crossword book awards, established in 1998, were joined this decade by the Man Asian Literary Prize, the DSC Prize for South Asian Literature, the Hindu Best Fiction award and the Shakti Bhatt First Book award. While still putting down roots in the Indian book world, these prizes allow us to envisage a day when these, rather than overseas stamps of recognition such as the Booker, will be seen as the primary arbiters of Indian literary merit. Book coverage in mainstream newspapers and magazines, though, is not noticeably better than it was in 2000. This is one of the last missing links in the maturation of Indian literature, for without robust literary debate and the reasoned evaluation of books, literature is hamstrung both at the level of its influence in the public sphere and its power to reach new readers and widen the tastes of existing ones. Currently, Indian literature is more deep and diverse than it has ever been, but no one newspaper or journal—per-
AMARTYA SEN A collection of scholarly essays about Indian history published in 2005 by Sen, The Argumentative Indian was a surprise bestseller, being a part of and a stimulant to a wave of highquality nonfiction about India.
CHETAN BHAGAT Formerly an investment banker, Bhagat opened a massive new market with four bestselling novels about the problems and pressures of young people in India told in their kind of language, starting with Five Point Someone.
NILANJANA ROY To Roy we owe the first really good Indian literary blog (www.kitabkhana. blogspot.com), which provided an articulate and often amusing Indian perspective on books and literary matters both domestic and foreign.
JOHN CLAY A retired American investment banker with a degree in Sanskrit litera ture, Clay brought together more than 30 prominent scholars of the language to set up the Clay Sanskrit Library with a hundred volumes of classical Indian literature in Sanskrit.
haps not even all the periodicals collectively—is able to take full stock of this on its pages, and many outstanding titles (particularly academic publications, books from small presses, and works in translation) come and go without a trace. What Indian literature needs in the next decade is something like a New York Review of Books or a London Review of Books—a New Delhi Review of Books perhaps?—to consolidate the many gains of the decade gone by. Chandrahas Choudhury is the author of the novel Arzee the Dwarf (2009), recently listed by World Literature Today magazine as one of 60 essential English-language works of modern Indian literature. His forthcoming book is India: A Traveller’s Literary Companion (HarperCollins, January 2011).
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THE DECADE IN MEDIA Newspapers and radio grew from strength to strength during the period, but it was television that defined the decade, while the biggest media property created was the Indian Premier League IMAGING BY UTTAM SHARMA/MINT
B Y S HUCHI B ANSAL email@example.com
························· he last decade belonged to television in India. No, our newspapers did not lose circulation, readership or advertising revenue like their counterparts in the developed markets. On the contrary, most dailies, especially the vernacular ones, added new editions and increased print orders. But television ruled the decade in terms of sheer channel proliferation, reach, content and distribution. In short, it was television’s turning point. In 2000, we had a choice of 50 channels. As we bid farewell to 2010, 581 private satellite channels can be viewed in India. This is in addition to 31 channels from state-owned Doordarshan. The data was collated by Amit Mitra’s TRP (television ratings point) committee appointed by the government to study matters linked to audience measurement. The decade witnessed partnerships being formed and broken between Indian companies and global media conglomerates. Through Turner International, Time Warner inked a joint venture with Alva Brothers of Miditech for entry into India’s Hindi entertainment space. The project flopped. Later, the board of
Time Warner Inc. approved the acquisition of NDTV Imagine Ltd by Turner Asia Pacific Ventures Inc. During the period, NDTV Imagine (owned by NDTV Networks Plc) bought back NBC Universal’s 26% stake in the company that operated its non-news business, including the Hindi general entertainment channel (GEC). Wire service Reuters, too, sold its 25% share in Times Global Broadcasting back to the promoter Bennett, Coleman and Co. Ltd (BCCL) to exit the venture. Viacom18 Media Pvt. Ltd, the Viacom Inc. and Network18 Group joint venture, however, successfully launched the Hindi GEC Colors, which briefly even dislodged Star Plus, the market leader in the segment. Colors, now No. 2, succeeded in a market where Real, from Alva Brothers and Turner, and 9X, from Peter Mukerjea’s INX Media, didn’t make the cut. For some, the game changer of the decade was wider distribution, both digital and analogue. Cable and satellite (C&S) homes have jumped from 25 million 10 years ago to 120 million today. Direct-to-home (DTH) operators such as Dish TV, Tata Sky, Airtel Digital TV, Reliance BiG TV, Sun Direct and Videocon hooked an addiTURN TO PAGE Z22®
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THE DECADE IN MEDIA ® FROM PAGE Z21
FDI in print media—‘The Independent’ buys stake in ‘Dainik Jagran’.
The launch of private radio—in the last decade, radio frequencies have been auctioned twice. The rise in the number of such stations—over 300 today—has led to an increase in advertising revenue.
Reality television on Hindi general entertainment channels have changed the definition of entertainment.
tional 30 million homes to their digital platforms in the last five years. Farokh Balsara, the media practice head at consultancy firm Ernst and Young (E&Y), believes that broadcasters have started earning between 5% and 10% of their revenue from distribution. In developed markets, subscription contributes 30% to a broadcaster’s total revenue. This adds to the top line and the bottom line as well, he says. Going beyond statistics, the single biggest facet of media that defined the decade was something intangible: It was the evolution of television as a great leveller where ordinary consumers/viewers found a voice and a face through countless reality shows. The decade was a celebration of the common man on the small screen. Housewives from Gorakhpur to Jhansi shared screen space with Amitabh Bachchan on Kaun Banega Crorepati; others with singing and dancing skills enjoyed their brush with fame on talent shows. Viewers became participants, winning stardom, however fleeting, and money. “Consumerism is not just about buying. It is about the assertion of individuality, and television recognized it,” says Satyajit Sen, chief executive officer at ZenithOptimedia, a specialist in buying media. Since democracy means equal opportunity, television also moved away from metrocentric audiences and brought small-town India to the fore in its serials. For channels such as Star Plus and Sony, all roads led to tier I and tier II cities for research on viewer expectation. Brand messages riding on the back of entertainment television, fuelled aspirations in such towns. E&Y came up with a report called The Dhoni Effect where the star cricketer became a metaphor for Ranchi (his hometown in Jharkhand) and explored how small towns look to consume. E&Y’s Bal-
sara says that advertising revenue (in television and print) is shifting. It’s coming more and more from these small towns. According to him, this shift took place in the last decade. While TV channels in regional languages such as Bengali, Marathi and Bhojpuri multiplied, also growing has been newspaper readership in Punjabi (28%), Marathi (12.6%) and Telugu (25%) in the last four years, according to round-two data from the Indian Readership Survey (IRS) of 2010. The IRS figures show that Hindi readers have grown 27% in the last five years. Readers of English dailies, meanwhile, grew 16% since 2005, although the numbers registered a marginal decline in the last three rounds. Though television ruled the decade, media expenditure on newspapers continued to remain marginally higher than on TV. A study by media agency GroupM shows that TV earned `9,914 crore in 2010, while newspapers touched `10,363 crore. However, in its 2011 forecast, television revenue is set to overtake that from newspapers as it surges at 20%, compared with 7% for the more traditional medium. The slower growth rate does not necessarily make print vulnerable since it is an under-served category. The reach of English dailies is 3.7%, while that of Hindi newspapers is 15%, according to IRS data. And foreign direct investment (FDI) that was thrown open in the last decade with a 26% cap, may attract strategic investors if the sector is further liberalized. The decade saw two big newspaper launches in Mumbai, the bastion of The Times of India, with the entry of the Hindustan Times, published by HT Media Ltd, which runs Mint, and Daily News and Analysis (DNA). However, the country’s biggest media property in the last decade was not a newspaper or a channel, according to advertising professionals. It was the Indian Premier League. In the upcoming season four, the cricket tournament is likely to
draw advertising worth `1,300-1,500 crore. Zenith Optimedia’s Sen says it’s a distinct property as it reflects a young, vibrant, new economy. The property has got it all—eyeballs, passion, glamour, fans, money and public relations (PR). The success of private radio took the industry by surprise. All India Radio’s turf was threatened as radio rose from a `100 crore media category to a `1,113 crore sector in 10 years. Auctions for FM stations pushed the private channel numbers up from 20 to 245. With bids for another 806 stations to be slotted soon, the category is poised for further growth. Of course, an increase in the FDI cap from the current 20% would help. The sector could also see consolidation if the government allows one company to own more than one frequency in a city. The media growth story has been accompanied by episodes that have evoked controversy. Leaked phone taps of conversations between corporate lobbyist Niira Radia and some journalists sparked off a media ethics storm. Earlier in the decade, The Times of India’s Medianet division, offering a platform for PR releases, was the subject of debate. BCCL, the owner of The Times of India, also set up a private treaties, or ads-for-equity, division. Under this, BCCL took stakes in companies in exchange for advertising space. Several newspapers and television channels, including HT Media, also launched similar outfits to drive the ads-forequity business. Many of them later shut shop. A news channel head said that companies expected free coverage instead of routine advertising time on the channel. “They wanted to blur the lines between advertising and editorial and we were not prepared for that,” he said, giving reasons for the division’s early demise. At the very least, the leaked phone taps have led to a debate on media malpractices with journalists embarking on a bout of soul-searching to cap a decade of bustling growth.
Holding ground: A newspaper stand in New Delhi. Though television ruled the decade, media expenditure on newspapers continued to remain marginally higher than on TV.
SUBHASH CHANDRA The chairman of Zee Group, Chandra launched India’s first Hindi entertainment satellite television channel in 1991, and broke fresh ground in the last decade with the launch of DTH business.
AROON PURIE A qualified chartered accountant, Purie launched India Today magazine in 1975. He changed the dynamics of the Hindi news channel segment by launching Aaj Tak in December 2000.
RAGHAV BAHL A journalist with a degree in economics, Bahl, in 1999, launched CNBC India, which was renamed CNBCTV18 in 2004. Bahl’s content company Television Eighteen India Ltd has since turned into the Network18 Group that straddles news and entertainment, films, mobile content, data termi nals, jobs and travel portals, print media and a television shopping network.
PETER MUKERJEA The former CEO of Star India Ltd, Peter Mukerjea changed the dynamics of the Hindi television entertainment with the launch of Kaun Banega Crorepati in 2000. Master of onair promotions, he managed to make the cable operator pay for content, pushing the channel into profitability.
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Global role: A file photo of the Parliament building. India has increased its clout in the global polity during the past decade.
THE DECADE IN 1999 Tax breaks for housing and reduced excise slabs that reduced lobbying and streamlined indirect taxes.
2001 9/11 attacks on the World Trade Center.
POLICY & POLITICS
The coming together of various strands, especially given the accelerated ascendancy of China, advanced the shift in the balance of power towards the East in the decade. This set the stage for the consequent change in geopolitics, giving India a greater role at the global high table B Y A NIL P ADMANABHAN firstname.lastname@example.org
························· ddressing a joint session of the US Congress on 14 September 2000, then prime minister Atal Bihari Vajpayee, alluding to the problem of cross-border terrorism emanating from Pakistan, said: “In our neighbourhood—in this, the 21st century—religious war has not just been fashioned into, it has been proclaimed to be, an instrument of state policy. Distance (in an obvious dig at the US) offers no insulation. It should not cause complacence. You know and I know: such evil cannot succeed. But even in foiling, it could inflict untold suffering.” There were few takers that day. However, this outlook changed dramatically in little under a year, when, on the bright morning of 11 September 2001, as the denizens of the Big Apple readied for a new work day, a group of Muslim youth in a suicide mission used civilian aircraft as weapons to bring down the iconic World Trade Center in New York, causing the worst terrorist tragedy that led to nearly 3,000 fatalities. All of a sudden, Vajpayee came across as prescient as the US in particular, and the world in general, woke up to the perils of cross-border terrorism. In fact, 9/11 went on to become a crucial turning point; like all cataclysmic events bringing on
A 2004 Congress wins general election on ‘aam aadmi’ plank.
change faster than would otherwise have happened. In the case of India, this and the coming together of some favourable circumstances—the economy taking off—created the ideal circumstance for it to etch what was its best decade ever since independence. The 9/11 tragedy launched the US into one of the biggest global conflicts that took its troops first to Afghanistan and then later into Iraq. Few realized then that this war would drag on for the entire decade (its epitaph is yet to be written), and now an exhausted US is looking to cut its losses and prematurely withdraw its forces from Afghanistan.
Not only did the inability to win the war take the sheen off US invincibility, the human and economic costs diminished its capabilities, thereby making it easier for challengers such as China to play catch up. The other fallout was that it brought the US closer to India. The about-turn that Vajpayee, who was the head of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), had effected by boldly reaching out to the US, challenging domestic age-old perceptions, immediately after India conducted its nuclear tests in May 1998, made it that much easier. As the war got prolonged,
ATAL BIHARI VAJPAYEE Shed Indian foreign policy’s longstanding position and developed strong relations with the US. This single change has influenced India’s emergence in global polity.
YASHWANT SINHA Laid the foundations for the growth surge by providing tax incentives for housing. It unleashed the housing boom and stoked middleclass aspirations.
the structural fault lines in the US economy gradually started emerging, putting the brakes as it were on the world’s largest economy. The 2008 shock only confirmed the worst fears about an over-leveraged economy, sending the US into a slide from which it is yet to recover. This coincided with, what in retrospect was, India’s best decade of economic growth. The gradual loosening of policy controls in the previous two decades created the context, while the trigger was provided by the benchmark effort of finance minister Yashwant Sinha when he offered a slew of fiscal incentives in his Union budget for 1999-2000 that set in motion the housing boom. The coming together of these trends, especially given the accelerated ascendancy of China, only advanced the shift in the balance of power towards the East. Undoubtedly, this set the stage for the consequent change in geo-politics giving India, gradually albeit, a greater role at the global high table. Having played such a crucial role in this transition, the BJP could not really be blamed for getting complacent and coining the now infamous India Shining slogan. To be sure, it was not just the BJP; almost everyone missed out on the fact that while one India was soaring along, the other was noticeably lagging behind. To top it all off, the BJP made strategic mistakes in some key alliances, resulting in its unexpected defeat in the 2004 general election, serving up its principal opposition, the Congress, an accidental win. The agenda of the incoming Congress-led United Progressive Alliance (UPA) got pre-defined for two reasons. One, its electoral plank was de-
SONIA GANDHI Declined the offer to become prime minister after the unexpected victory for the Congressled United Progressive Alliance in the 2004 elections. She, howev er, continues to drive the political agenda of the government through the National Advisory Council.
fined around aam aadmi. Second, the fallout of the hubris of the India Shining campaign ensured that the UPA forced, what in retrospect seems to be, a huge course correction in development policy, by moving the country towards a more rightsbased or entitlement regime. Not a bad thing really, because the two Indias are rapidly giving rise to income inequalities, which, in urban areas, is startling. This included the Right to Information, the Right to Education, the Mahatma Gandhi National Rural Employment Guarantee Scheme, land rights for scheduled tribes and forest dwellers, and the unsuccessful attempt at providing 33% reservation for women in the Lok Sabha and the state assemblies. Similar to what the Mandal committee did for the so-called backward classes in 1989, the shift to a rights-based regime has created a sense of empowerment— and, in many instances, is beginning to redefine social and economic relations across the country; too early though to quantify them. It is another matter though, that the policy discourse has tended to get polemical as the UPA has progressively, particularly in its second avatar, mired itself in governance issues. To its credit though, the UPA has, just as the decade closed, also initiated debate and willy nilly turned the country’s focus on the contentious debate: environment vs growth. Explosive incidents such as those in Singur only provided a messy context to conduct this debate; the ongoing climate change talks and India’s gradual shift in stance—watering down its conventional claims on who should bear the burden of climate change—at global climate change negotiations have only made this debate more acerbic. In his inimitable manner, environment minister Jairam Ramesh, has authored this shift to a rules-based regime. The trick is whether politicians that follow will be willing to stay the course and not go down the tempting path and revive the business of ad hoc decisions. In the final analysis, there is no doubt that the last decade was India’s finest ever in terms of tangible gains. While the national discourse on social policy has definitely moved to being inclusive, the big concern is that the UPA, which has ruled for most of this period, has dropped the ball on crucial policy reforms. In that sense, the country could, in the next decade, lose out on the great opportunity that it has created for itself in the decade that just concluded.
MINT ON THE DECADE 25 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
The fact that poverty is multidimensional has been long recognized, particularly after the introduction of Human Development Indicators by the United Nations. Yet, three decades of the anchoring of calorie norms also meant that the consumption of 2,400 calories in rural areas and 2,100 in urban areas continued as the definition of poverty for many in the academic community as well as the large majority of activists working for the poor. The Tendulkar committee not only used this opportunity to revise poverty estimates, it also redefined the methodology by doing away with the calorie anchor and expanding the normative basket to include other amenities.
Shared meal: The poverty line has gone beyond the basic needs of food to those which represent access to opportunity such as education and health. The Tendulkar committee redefined the methodology of estimating poverty by expanding the normative basket to include health and education as integral parts of the poverty line along with food. It did so not only to account for the multidimensional aspect of poverty, but, more importantly, because poverty was no longer only about food in an economy growing at more than 9% per annum.
THE DECADE IN
POVERTY B Y H IMANSHU email@example.com
························· ow many poor people are there in this country of 1.2 billion people, the world’s most populous after China? There’s no easy answer, with poverty estimates ranging from single digits by Surjit Bhalla, 26% according to the Lakdawala committee, 37% by the Suresh Tendulkar committee, 42% by the World Bank, 77% by the Arjun Sengupta committee and around 80% by Utsa Patnaik using the calorie measure. Incidentally, all these estimates are for the same year, 2004-05, and using the same distribution of consumption expenditure from the National Sample Survey Organisation. What changes when poverty is measured differently is not the actual number of poor in the country but the way it’s defined. Fortunately, some of the confusion created by the multitude of figures has been put to rest after the Planning Commission officially accepted the report of the Tendulkar committee set up to revise poverty estimates.
H Arjun Sengupta committee report highlighted the deprivation that characterizes the masses along with high growth.
But why do we have so many estimates? Partly because of the dissatisfaction with the old official poverty estimates based on the Lakdawala committee and the differences in the perception of poverty. There are also the more fundamental questions of what constitutes the poverty line and, in turn, what normative requirements this should meet. This is an issue that has been debated over the decades in the Indian context. The debate has not only been on what should be the norm, but, lately, also on what its dimensions should be. Things have moved much beyond the usual basic needs of roti, kapda and makaan. The fact that poverty is multidimensional has been long recognized, particularly after the introduction of Human Development Indicators by the United Nations. Yet, three decades of the anchoring of calorie norms also meant that the consumption of 2,400 calories in rural areas and 2,100 in urban areas continued as the definition of poverty for many in the academic community as well as the RAMESH PATHANIA/MINT
The invisibles: High illiteracy, lack of sanitation and drinking water, housing and so on, question the ability of poverty estimates to reflect the actual level of deprivation.
large majority of activists working for the poor. This was despite the fact that evidence from successive independent nutrition surveys did not correspond to either the spatial pattern or the intertemporal trend of calorie intake. The Tendulkar committee not only used this opportunity to revise poverty estimates, it also redefined the methodology. While doing away with the calorie anchor, it expanded the normative basket to include health and education as integral parts of the poverty line along with food. It did so not only to account for the multi-dimensional aspect of poverty, but, more importantly, because poverty was no longer only about food in an economy growing at more than 9% per annum. It was the recognition of the fact that what kept a large majority of the population poor was also the lack of opportunity to participate in the growth process, education and health being the biggest obstacles to access such opportunities. At the same time, it improved the way price indices were used to update poverty lines spatially as well as across states and across rural and urban areas. With the acceptance of the Tendulkar committee report, some of these confusions have been put to rest. But that does not mean that the issues have disappeared. Some of the issues that were raised by the debate on poverty continue to remain valid. More so, in a country where the economy is growing at the fastest after China and is at the cusp of joining the league of middle income countries. For example, the issue of differences in the aggregate private final consumption expenditure from the National Sample Survey and the National Accounts remain an important issue that
India has made enormous economic strides in the past 10 years, but it needs to come to grips with poverty. The disconnect between growth and its ability to reduce poverty underlines the need for a better estimate of the number of Indians who are poor
of Indians live under `20 a day. This data, first highlighted by the Arjun Sengupta Committee, almost became a buzzword for the media, activists and a large majority of the population. This is despite the fact that this neither represents poverty estimates nor is a correct statement based on data. But the amazing longevity of this number has continued to baffle many, including the government. Despite several clarifications and counter claims, this number still continues to highlight the extent of deprivation in the country and will continue to be quoted. needs to be resolved. But more importantly, whether the poverty line actually represents the minimum basic requirements is a matter that will continue to be debated. There are those who continue to argue that the present poverty line is close to a destitution line. But even otherwise, while the poverty line has gone beyond the basic needs of food to those which represent access to opportunity such as education and health, there are many dimensions which need to be included. This is expected in a dynamic country, simply because the normative content of poverty lines is not meant to be fixed in perpetuity. This is a reflection of the country’s stage of development and also represents the aspirations and expectations from the growth that is central to the development of the economy. A growing economy needs these norms to be evaluated
continuously in conjunction with the existing reality. Access to opportunities, represented by education and health, are not demands that arise from ethical and moral philosophy only, but also from the existing reality where lack of food no longer represents the only dimension in which such deprivation can be measured. For those who believe that the country has made immense progress in the last decade, the high level of poverty is not only appalling, it is also not consistent with the larger ambition of being seated with the global powers. On the other hand, a large number of secondary sources have confirmed the existence of high illiteracy, lack of sanitation and drinking water, housing, malnutrition and so on, which raise questions over the ability of the poverty estimates to reflect the actual level of deprivation. It is this disconnect between growth and its ability to reduce poverty that underlines the need for a better estimate of poverty. This is not a question of mere statistics or academic rigour, it is fundamentally about the quality of growth, the nature of polity, and, above all, the ability of the masses to participate and enjoy the growth that the economy has seen in the last decade. Similar recognition, although limited, has been seen in policy paradigms where access to information, employment, education and food are no longer a means of governance but are seen more as a fundamental right, which is essentially part of being a citizen. Himanshu is assistant professor at Jawaharlal Nehru University and visiting fellow at Centre de Sciences Humaines, New Delhi.
26 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN SCIENCE It was largely a dismal decade for Indian science, but one that held out hope as well—in the form of academics trying to focus on marketbased research, growing interest in integrated science programmes, and the emergence of a wave of hitech startups CERN
2001 The Human Genome Consortium for the first time finishes sequencing the human genome. Opens up a cache of opportunities for the field of bioinformatics—especially for India—which, on the bank of its ITled growth, led to several software startups testing applications to study genes, their role in diseases and developing new age diagnostic kits. This, in turn, was the key trigger for similar attempts by Indian scientists to sequence an Indian human genome. The big bang theory: A part of the CMS particle detector is lowered underground. The CMS experiment is one of the four main ones that will collect data at CERN’s Large Hadron Collider.
B Y J ACOB P . K OSHY firstname.lastname@example.org
2001 Isro develops the GSLVclass rockets, which facilitate missions such as ‘Chandrayaan’ and also propels the ANTRIX corporation— Isro’s commercial arm—as one of the key players in the multibillion global satellite launching industry. The GSLV rockets are also expected to be the key load bearers for future manned missions to the moon in the next decade.
2005 C.N.R. Rao, scientific adviser to the prime minister, raises alarm that China was fast overtaking India as a scientific superpower. Though this was largely a policy measure, it triggered the current focus of India’s science bureaucracy to revamping undergraduate and graduate education—establishing the Indian Institutes of Science Education and Research as well as dramatic budget allocations towards basic science research.
························· n January 2001, at the dawn of the decade in which climate science would somersault from doomsday fantasy to an obdurate orthodoxy, and stem cells would emerge as the new insurance, prime minister Atal Bihari Vajpayee exhorted India’s largest annual congregation of scientists—the Indian Science Congress—to double the country’s food production from 209 million tonnes (mt) then. It wasn’t that there was a dearth of food for India’s billion—just that an inefficient public distribution system made it incumbent to produce more to feed its economically diverging citizenry. Unfortunately, food production hardly increased through the decade, and this January— when it’s a little above 230 mt— Prime Minister Manmohan Singh expounded on this year’s theme, Quality Education and Excellence in Science Research in Indian Universities, at the science conference. He didn’t rake up missed food production goals. Then, scientists here have been long used to policymakers ignoring previous goals and setting new ones. Undeniably, it was the decade in which the Indian Space Research Organisation (Isro) catapulted a nearly 1,400kg satellite into the moon’s orbit at a cost that is a fraction of what the US National Aeronautics and Space Administration spent on lunar missions of similar scope, but it was also the period when India’s research spending stagnated at 0.8% of gross domestic product (GDP). Every major economy, dedicated over 1% of its annual earnings to research and development (R&D) activities. Incidentally, Vajpayee, in that
PETER HIGGS Englishborn theoretical physicist Higgs is known for his proposal explaining the origin of mass of elementary particles. The Higgs boson, an elusive particle, is thought to be the cornerstone of establishing the validity of the socalled Standard Model of Physics.
VS RAMACHANDRAN The neuroscientist is known for his work on how a specific class of neurons— mirror neurons—play a key role in determining why humans have empathy towards newage approa ches to treating psychiatric disorders such as depression.
CRAIG VENTER Considered the guru in the field of synthetic biotechnology, Venter and his group is on the verge of creating bacteria in laboratories that are indistinguishable to the human immune system.
same speech in early 2001, had pledged to hike R&D spending to 2% of the GDP. Scientists at the Council of Scientific and Industrial Research, India’s largest consortium of publicly funded research bodies, cumulatively patented more than they had ever done in the history of independent India, but the venerable body continues to spend more money in maintaining these patents than extracting commercial value out of it. For the first time ever, Indian scientists contributed intellectual capital as well as locally engineered hardware to international collaborative experiments such as the Large Hadron Collider instead of scrounging for “donated time” or being merely “observers” in previous experiments of such ambition and scope. It has become the norm for the country’s science ministers over the past few years to mention that all international research collaborations that India now undertakes—whether it’s funding solar research or
hunting for microbes in the Arctic—is always on “equal” terms—or matching research budgets, with other countries. It was also the first decade ever that there were three times as many research publications out of China than India, a far cry from the 1980s when the trend was the reverse. Moreover, every major international science prize—be it the Abel Prize for mathematics or the Nobel Prize for sciences—eluded Indian scientists and were at best, and in keeping with half-a-century-old tradition, won by someone of Indian origin and duly celebrated. A nation whose rapid economic rise is partially powered by information technology (IT) and IT-enabled services, which churns out over 700,000 engineering graduates and around half-a-million science graduates every year, barely has a singledigit percentage of them opting for PhDs and going on to research careers in Indian academic institutions. To cite Organisation for Eco-
nomic Co-operation and Development data, India has 119 researchers per million of population, compared with 1,564 in China, 2,706 in the UK, 4,605 in the US, and 6,807 in Iceland. Even in terms of the number of researchers per 1,000 people employed, India, with 24 researchers, ranks below China (115), Japan (131), the US (324) and the European Union (231). It isn’t that Indian science administrators are blind to the reality of the paucity of disruptive science in India. The Planning Commission earmarks generous funding commitments to improve science infrastructure in its Five-Year Plan documents, yet, skimming through the annual budget documents shows that a significant chunk of the money goes unspent. This discrepancy, it is argued, is largely due to a lack of absorptive capacity within India’s universities and research institutions. Ossified teaching departments that rarely encourage interdisciplinary research; bright, science students opting for careers in engineering, management and eventually investment banking instead of research, and a dearth of options that can lure smart students, pursuing their research in the US and Europe, back to Indian research labs are the key problems that stymie this spending. There are slivers of hope,
That’s the number of women who have won India’s most prestigious prize for scientists under 45, the Shanti Swaroop Bhatnagar Awards last year. In the 52year history of the awards, only 14 women among 463 scientists have won, and this is the first time that so many won in a single year. Over the past few years, concerns have been raised over the dwindling contribution of women scientists to top class research out of India. The government even constituted a task force to look into this. Last year’s haul, several say, was a significant achievement and will greatly encourage women to have longer and more fruitful careers in science research.
though, and this is most evident in recent trends that indicate scientists and academics in India’s most hallowed institutions, actively involved in “commercializing” their research. Taking cues from their counterparts in universities abroad, researchers at the Indian Institutes of Technology (IITs) now actively flaunt their commercial and industrial consulting projects as much as citations in high impact factor journals. It isn’t unusual now to hear of government research labs discuss taking a “stake” in a start-ups, or actively negotiating with international companies to sell intellectual property for profit. Over at least the past seven years, several multinational firms including Microsoft Corp. and International Business Machines Corp. have been setting up their key research centres in India, often recruiting the brightest of Indian scientists and researchers to power their patent pipeline. It isn’t unusual now to see several fresh graduates spurning hefty pay packets to set up their own companies and often in extremely competitive spaces such as microprocessor design, low-cost computing solutions as well as nanotechnology-based drug-design. Cracking the Joint Entrance Examination to the IITs continues to be the ambitious engineering aspirant’s pet torment, but a small but growing proportion of these students now use these tests to pursue undergraduate courses at newly minted institutions such as the multi-city Indian Institute of Science Education and Research, where the traditional three-year bachelor of science courses are being replaced by more holistic fourand five-year dual degree science programmes that encourage students to explore and delve deeper into disciplines such as physics, mathematics, chemistry and biology, than be monochromatic, assembly line software graduates. Indeed, in line with global trends, President Pratibha Patil has already declared this decade as being “decade of innovation”. Whether that will be another missed target—like the food production goals—is something only the calendar will tell.
MINT ON THE DECADE 27 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM RAJNISH KATYAL/HT
Abhinav Bindra’s gold medal at the Beijing Olympics in 2008— the first ever individual gold for India at the Olympics.
Success at the Commonwealth Games and the Asian Games— in a range of sports.
Centrepiece: A view of the Jawaharlal Nehru Stadium during the closing ceremony of the 2010 Commonwealth Games in New Delhi. Saina Nehwal stormed into the ranks of world badminton by winning the Indonesia Super Series in 2009—the first Indian to do so.
THE DECADE IN SPORT It was a period during which the foundations were laid for what would be India’s best showing in the Commonwealth Games and the Asiad of 2010 B Y S HARDA U GRA email@example.com
························· n the last few months of this decade, India had its moment of athletic epiphany. It saw women with grips that melted bone as they wrestled, and men whose fights featured muscle memory of both weaver and warrior. There were eagle-eyed archers and runners of invisible muscle and unconcealed will. One boy used child-sized hands to push off pommel horse and floor to show us how to fly without wings. Another produced a 24-second exhibition of sea creatures, ranging from serene dolphin to noisy speedboat. A shuttling girl proved that great walls could be built outside China, and four more showed how a team could be tied together by the wind. There were mothers who boxed and fathers who meditated. And they were all ours. At the end of a breakthrough decade, the Commonwealth Games (CWG) and the Asian Games became Indian sport’s set pieces shown to its widest audience. The country’s athletic
M.S. DHONI The smalltown boy from Ranchi led the Indian cricket team to their second world cup win, this time, in the shortest version of the game. He recently signed a threeyear deal with Rhiti Sports Management to manage all his endorsements, brand associations, patents and digital rights, on a minimum guarantee of `210 crore
community didn’t miss a step. Over 100 medals at the CWG and India’s best-ever Asiad. If there has to be a lingering memory, let it be the sight of Indians walking out on opening night, a community of the confident. Beijing gold medallist shooter Abhinav Bindra, who carried the flag in Delhi and usually competes in silent halls, says it was the loudest ovation he believed Indian athletes had received from, “our own people. We knew they were rooting for us”. They had to, after this decade in which our athletes have shattered glass over and over again. Glass that was actually a ceiling, glass that restricted access, created boundaries, sealed borders. Our athletes swung the hammer of their intent at all of it, around them. Some did so quietly, some loudly, some with their fists pumped, others with looks of cold titanium. They did so across sport, in those we thought we couldn’t play, did so in those in places Indians usually never went. We may have been dazzled by a string of brightly-lit achievements, headlines and medals today, but before all this happened, the decade was about the gritted teeth and unseen sweat of Indian sport’s history makers. Arjun Atwal’s victory on the PGA Tour was preceded by the lonely journey of Jeev Milkha Singh, the first Indian to set out on the European Tour in 1998. It is only appropriate that the man in Saina Nehwal’s corner today is Pullela Gopichand, who, in 2001, won India an All-England badminton title after a gap of 21 years. Early in the decade, long jumper Anju Bobby George became the first Indian to win a world athletics championship medal in 2003, and Sania Mirza the first Indian woman tennis player in the world’s top 30. Squash player Ritwik Bhattacharya didn’t treat his sport as an admission ticket into an American university, hit the pro tour in 1999, won titles and a careerhigh ranking of 38. This was the decade Narain Karthikeyan found his way into the most expensive and exclusive clubs in
SAINA NEHWAL The shuttler from Hyderabad, in her early 20s, became the first Indian to win a badminton super series tournament and created history by making a hattrick of them in 2010.
ABHINAV BINDRA The ace shooter became the first Indian to win an individual gold medal at the Olympics after winning the 10m air rifle event at the 2008 Beijing Olympics.
international sport, the Formula 1 grid. The decade that began with boxer Gurcharan Singh weeping on his knees after losing his Olympic quarterfinal match in Sydney on countback, ended with Vijender Singh’s Beijing bronze and Guangzhou gold. Sydney 2000 was Bindra’s first Olympics, when the general mood in the Indian contingent was “defensive, closed”, clouded by what looked like an “inferiority complex”. It was, he said, “as if we were almost embarrassed by our skill levels versus the best in the world”. Michael Ferreira, a four-time world billiards champion, speaks of setting off to the West in the 1970s. “One almost had to apologize for being Indian.” Now Ferreira laughs, “It’s like, hey, listen bugger, we’re Indian—who are you?” In many ways, this decade has produced the perfect storm for Indian sport: a changing economy, an aspirational younger population, and as Mahesh Bhupathi summarises it, “the support of the private sector and the urge of more kids to take to sport as a career”. A deep-pocket private sector has put its money outside cricket and the first elite sport projects such as the Mittal Champions Trust or the Olympic Gold Quest have begun to shepherd India’s best. It is the forward-looking sports federations and ambitious athletes that have
benefited the most. The Indian Boxing Federation has signed a four-year marketing deal with Percept, and Shailendra Singh, its joint managing director, says he has generated funding of around `10-12 crore in the last 18 months. Along with supporting the country’s best boxers, it’s introducing the “Fight Night” concept to “build boxing as a sport-entertainment property and connect with the audience and consumers”. The Big C is still extremely mega, but the rest of the sporting landscape has widened, opened up. Cricket may still be the lion on our sporting Serengeti, but now there’s room for other smaller, more nimble game. While private enterprise may deserve its “zindabaad”, let’s not forget the little guy. When asked who he dedicated India’s first individual Olympic silver to, shooter Rajyavardhan Singh Rathore certainly didn’t: “To the taxpayers of India,” he said. An armyman who had fought insurgents in Kashmir, in 2002 Rathore embarked on his own Olympic campaign two years before Athens 2004. He applied for leave, sought permission from the Indian Army and the sports ministry for funding. He filled in forms in triplicate and received around `66 lakh for training and travel. That silver at the Athens Games in double trap was the result not of chest-thumping
speeches about desh ki izzat, but logic and planning. As was Bindra’s gold. As will be others. The taxpayers behind Rathore are still at work. Of the `318 crore sports ministry grant from August 2008 until the end of the Guangzhou Asian Games for the training, competition and training infrastructure for athletes, sports federations received grants worth `68 crore (the rest went to creating training infrastructure, conducting camps). The athletes won a total of 165 medals. Even if the cost of hiring foreign coaches and equipment were to be doubled and the figure turned to a highly over-estimated `150 crore, that would work out to approximately `90 lakh per medal. The paucity of success in Indian sport today is not because of financial reasons. It’s to do with sporting expertise and the lack of accountability of those in power over what, in athletics terms, is the last 10m of any sporting campaign. All that is left now, however, are those final metres. We are now past the crossroads and wondering where to go. On its way to finally stepping onto the global state in sport, India is looking out over the last mile, and must now understand that it is a vertical climb. Bindra doesn’t do metaphor, and to him, the decade gone by is gone. The only big picture that matters is what lies ahead. “This is a new decade, a new generation. We need a new administration because we have the talent, we have the numbers.” He says the government funding that worked for the CWG needs to be sustained but also spread out to start junior and development programmes. “Let sport be run by professional people. These are changing times. Those who have run our sport for all these years can go retire and play some golf. It’s time to bid them goodbye. Indian sport deserves better.” The strongest, thickest, most dense and powerful piece of glass is waiting to be shattered. Sharda Ugra is a sports journalist and currently a senior editor with Cricinfo.com.
28 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
THE DECADE IN TECHNOLOGY
Over the past 10 years, tremendous amounts of money, time and talent have been wasted on products and services that simply don’t solve problems in an Indian context, or are poor copycats of successful Western businesses B Y S IDIN V ADUKUT firstname.lastname@example.org
························· he last decade has been a remarkable one for the Internet in India. In many ways, the Internet has gone mainstream. While it is still by no means a household necessity as much as a telephone or a cable TV connection, it has achieved its place in our daily discourse, if not on our desktops. Over a million Indians have Facebook accounts. Indian issues routinely rank among the top terms to trend on Twitter and other social networks. We are, at least by some metrics, a force to reckon with on the Web. Yet, India today has an Internet user base of just 70-80 million, a penetration of less than 8% of our population. And even this number may not be accurate. This also may or may not include the number of people who use the Internet on their mobile phones. (But that is a whole other can of worms. If someone downloads a ringtone or a song from the Internet by clicking on a form or without consciously browsing, is he or she a user of the Web?) But even if we assume that this number of 80 million is accurate enough, it pales in comparison with not just the traditional Western benchmarks, but even Asian ones. Japan has around 100 million users and China has a mammoth five times as many users. India accounts for only 10% of Asia’s 825 million Internet users. At our current annual Internet user growth of 30% per annum—the average rate according to the Internet and Mobile Association of India (IAMAI)—it will take India seven years to reach where China is today. The traditional wisdom is that India has failed to achieve penetration because of poor broadband coverage and prohibitive costs of personal computers and other access devices. An August 2010 report by IAMAI on the Internet in rural India says the way forward is for public and private partnerships to develop deeper access. The report seems to say that the best way would be Internet kiosks in rural areas. Once this core infrastructure has been set up, the report concludes, “private operators will be keen to exploit this untapped market and eventually expedite Internet reach and growth”. The obvious response to that is: given that penetration is much higher in urban areas, this should mean that private operators must have rolled out compelling products in urban markets. In fact, for the most part of the last decade, they haven’t. A few months ago Promod Haque, a managing partner with investment firm Norwest Venture Partners, told The Economic Times newspaper that India was where the US was a decade ago in terms of Internet and retail products. The best way, then, to look back at a decade of the Internet in India is to figure out how we’ve managed to achieve so little of substance in so long. And the answers to this question perhaps lie in the stories of the successes and failures of the last 10 years. Things started very promisingly. It was in 1999 that Rajesh Jain sold his IndiaWorld collection of
T 1999: INDIAWORLD SOLD TO SIFY IndiaWorld was sold to Sify in 1999. (Just outside the decade but still significant.) A landmark in the history of the Internet in India, it spawned a thousand startups and hundreds of entrepreneurs. But Rajesh Jain’s windfall of `499 crore remains singular in Indian dotcom history. Unfortunately, the deal opened doors to neither highquality successors nor widespread Internet usage.
2001: LAUNCH OF IRCTC Today, the idea of buying travel tickets online seems like a nobrainer. Some of the credit for this should go to IRCTC. Uniquely for a public sector enterprise, the online rail ticket booking system had a website that coped with tremendous load, and taught customers to use their credit cards online. It recently went through a redesign that made it even easier to use. An outlier, when it comes to public sector websites.
2004: MOBILE CONNECTIONS OVERTAKE LANDLINES IN OCTOBER Thanks to aggressive pricing and cutthroat competition, mobile phones went from being luxury to necessity in less than decade. Everybody pitched in: service providers, handset makers and retailers. Now with 3G rolling out, the mobile phone will also overtake personal computers when it comes to Internet usage. But will customers find enough relevant mobile Internet products?
256kbps The minimum speed that qualifies as broadband in India. While prices remain low, where access is available, Indian broadband speeds continue to lag behind China and most Western countries. Meanwhile, after years of pilots, South Korea is expected to get services offering 1 Gbps download speeds by 2012. In India, access and application remains a bigger a problem than pure speed.
websites to Satyam Infoway for an astounding `499 crore. Even at the time—and this was well before the dotcom bubble had burst—the valuation of the deal was enough to lift eyebrows right off your face and toss them over your head. The IndiaWorld deal looked set to open the floodgates. Not for the Internet in India as much as for eager Internet entrepreneurs. The actual issue of Internet usage, penetration, and viability of goods and services took a back seat. All that mattered was getting funding and then getting listed. Overnight, small players such as Mom And Pop Cement Sales Corp. became MomPopCemCo.com. What happened next is popular history. Besides the fact that it was an irrationally exuberant bubble, other reasons were also cited for why dotcoms never took off in India. Connectivity and computers came tops. Then came things such as literacy, English language dependence, aversion to online transaction, paucity of credit cards, and so on. But also a lot of the services and portals were rip-offs or/and were terrible. Thankfully the launch of the Indian Railway Catering and Tourism Corp. Ltd (IRCTC) railway booking site in 2002 and its sustained success brought a reality check. The Internet business model could work in India. Provided it made sense to the consumer. IRCTC was convenient, quick, easy to use, reliable and secure. It catered to a need that was almost universal in India—booking train tickets. A handful of businesses since then have been able to replicate this success. Matrimonial, career, basic retail and taxation services sites have grown and some have made money. Then, in the latter half of the decade, we had a mini-boom that heavily focused on travel websites or social networks. The first came on the back of an explosion in low-price air travel, and the consequent need to aggregate flight search and data. The second was a purely reactionary strategy to trends in the west. Start-ups hashed out an array of clone social networks hoping to become the next MySpace, Bebo or Facebook. Most of those social networks have now been wiped out by the success of Facebook and, to a lesser extent, by that of Orkut. Much like the way me-too Indian web portals were obliterated a decade ago. From a business perspective, the decade closed with MakeMyTrip’s listing on the Nasdaq. Why did MakeMyTrip succeed? Influential tech blog TechCrunch had this to say: “Unlike entrepreneurs who waste their time trying to build, say, ‘an Indian Facebook’—MakeMyTrip wasn’t a reskin, it actually solved problems unique to India.” And that nicely summarizes the last 10 years of the Internet in India. Tremendous amounts of money, time and talent have been wasted on products and services that simply don’t solve problems in an Indian context, or are poor copycats of successful businesses. To the average Indian today, the Internet is simply not relevant enough. Which is why the mobile phone has so thoroughly overtaken the Web across the country. On the odd occasion
Surf’s up: Students from schools in Bangalore learn how to surf the Internet. when one does need to book a ticket or check an exam result, there are always Internet cafes nearby. The next decade comes with several opportunities. The mobile Internet has to be at the top of that list. Penetration is high and growing, even though exact data on live users is embroiled in Byzantine controversy. Social networks will change the way we are consuming news, communicating with each other and forming communities. This will determine how marketeers and advertisers tap into the Web and these communities. But most of all what can propel the Internet in the next 10 years is e-governance. The government of India continues to boast of some of the poorest public service websites in the world. (The Commonwealth Games website intermittently had wrong scores, stale medal tallies even the wrong Indian flag during the tournament.) These sites offer little information and hardly any services. Which is why the IAMAI report on rural Internet had 34% respondents saying “didn’t feel need” as one of their reasons for not using the Web (second only to the 84% who said “not Internet aware”). Projects such as the one being run by the Unique Identification Authority of India to provide an ID to every Indian must encompass Web services. Citizens in this country must be able to access everything from birth certificates to land records online. And they must be able to do this in their own languages. The Internet, like the mobile phone, must be something that adds value to their lives. Without these meaningful products, investing in urban or rural penetration is a waste of time. One lesson from the last 10 years is this: the Internet for Internet’s sake is pointless.
GR GOPINATH Gopinath laid the founda tion for India’s lowprice civil aviation boom. But the captain also provided a boost to ecommerce. Along with IRCTC, Air Deccan was a pioneer in the online ticket booking business. Helped along by a spike in credit card issuance, he also taught customers the virtues of booking early and of not entirely taking online special offers at face value.
SHASHI THAROOR Did the Internet have any significance outside the rar ified circles that used it in the metros? Was it impor tant enough to get noticed in the Prime Minister’s Of fice? Shashi Tharoor found that out the hard way. The diplomat turned politician adopted Twitter with gusto and used it to both commu nicate and interact. Unfor tunately, he became a mag net for controversies.
SANJEEV BIKHCHANDANI Bhikchandani’s story is al most flawless. He started with borrowed money in a oneroom office armed only with a scooter and a plan. He began uploading news paper job postings on his website. Today, Naukri.com is the market leader in the online jobs industry. Over the years, he’s lasted the boom and bust and success fully listed his firm.
DEEP KALRA Kalra’s MakeMyTrip.com listing in the US was only the fourth Indian listing in that country since 1999. Like Bhikchandani, Kalra was a pioneer in an indus try that since seen a raft of imitators. But he has exhib ited tremendous staying power. When the SARS outbreak hit, travel dotcoms fell like flies. MakeMyTrip survived and now flourishes.
MINT ON THE DECADE 29 TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM DAVID GUTTENFELDER/AP
Terror in Mumbai : An Indian soldier takes cover as the Taj Mahal hotel burns during gun battles between the military and militants inside the hotel in Mumbai, in November 2008. SPENCER PLATT/AFP
THE DECADE IN
World War IV began on 11 September 2001. But most countries continue to fight it using the same principles and strategies that were used in earlier wars B Y R AGHU R AMAN email@example.com
························· he past decade, 20012010, was one during which World War IV began. Over the last 100 years, the world has witnessed three major “world wars” and we are now at the beginning of the fourth one. The world was largely oblivious to the cataclysmic changes during the world wars even though the signs were there for all to see. Unfortunately, very little has changed. Each of these four world wars—of which two are well known—had peculiar characteristics. The First World War began in the summer of 1914 and ended four years later with millions dead, wounded and displaced. Devastation of this scale was possible because of technological advances in weaponry characterized by their automation. Technologies such as machine guns and artillery barrages essentially automated killing to an extent unimaginable until then. The Second World War (1939-45) was characterized by mobility. Fighter aircraft, longrange bombers, submarines, fleet carriers and blitzkriegs enlarged the theatre of operations. At its peak, World War II saw more than 100 million military personnel mobilized all over the world and every major nation participating in the conflict. With over 50 million fatalities,
this war was the deadliest conflict in all history. Automation which was predominant during WW I was refined and provided mobility during WW II. The crescendo of this lethal combination was best demonstrated by the atomic explosions in Hiroshima and Nagasaki, where more than 200,000 were killed by a nation attacking them from halfway across the world. The Third World War or the Cold War began immediately after the victors of WW II divided up the spoils of the war and continued the bifurcation across the globe. East and West Germany, the Koreas, the Soviet Satellites, Vietnam, Cuba, most parts of Africa and many parts of Asia were forced to join this proxy war between the two superpowers and their allies. The essential characteristic of the Cold War was subterfuge. Cloak and dagger operations, murky overthrowing of governments, funding of terrorist movements (who would, of course, be rechristened as freedom fighters if they won), deniable black ops and unsavoury links between causes ranging from ideological to downright criminal were the essence of this war. While the Cold War may not have caused as many casualties in a similar time frame as both the earlier wars, its damage potential has been very high and exacting. Virtually every conflict in the world today can trace its roots in the Cold War and many
America attacked: A hijacked flight crashes into the south tower of the World Trade Center on 11 September 2001 in New York. of those conflicts will continue to take their toll for the foreseeable future. The Cold War ended with the fall of the Soviet Union in early 1990s, and had the unintended consequence of laying the foundation of World War IV—global radical fundamentalism and terrorism. With the Soviet Union crumbling, the sole remaining super power could project its power unopposed into any part of the world that suited it, and the US did exactly that. Former global powers stood mutely as the US demonstrated that it could attack any nation unilaterally without even the fig-leaf of a UN sanction. Until, on 11 September 2001, the Al Qaeda struck back and sounded a rallying call of “franchise” terrorism. It is not that terrorism had not been used before this instance. West Asia, Sri Lanka, and, at closer home, Punjab, the North-East and the Kashmir valley had echoed with blasts and terror attacks, but 9/11 was a harbinger of WW IV in many other ways. To begin with, the sheer
scale, elaborate planning and audacity of the attacks were without precedence. Secondly, the Al Qaeda had taken the battle into the strategic base of their enemy instead of limiting it to a theatre defined by them, thus out-flanking considerably superior forces. Thirdly, it had used a small body of troops to achieve an objective far beyond its capabilities in conventional terms. These three subtle elements indicated the paradigm shift of the new war that we face now. Essentially, the terrorists had managed to pull off an operation that combined the guile and planning of Cold War operatives, the cold professional execution capability of Special Forces and demonstrated the strategic ability to mount a “turning move” by opening a new front in the ground of their own choosing. The punch drunk reaction of the most powerful country in the world wasn’t because of the power of the punch; instead it was testimony to the fact that the US was fighting WW IV with the doctrines and structures of the
previous wars. The US carpet bombing of Afghanistan and its vision of WMDs in Iraq were manifestations of not having made the orbital shift between the old and the new wars. But the US was not alone in this time warp. The Madrid bombing indicated another surprising paradigm shift of the global terror war. Unlike conventional forces, which seek strong command and control channels, the Al Qaeda and other terrorist groups encourage loose affiliations and “cut-outs” in its command and control structures, providing the broad philosophy and resources and leaving the actual operations to local units. The London and Mumbai attacks reinforced this shift when countries with some of the most powerful armies of the world were cumbersome in their response to this new paradigm. The rapid growth of terrorism as a preferred tool of waging war is testimony to its efficacy and a guarantee of its sustained proliferation. Thus demanding that in-depth intelligence and surgical utility of force be the essential characteristic of WW IV—rather than absolute superiority of force. There is reasonable certainty that the years to come will see an escalation of strategic terror that will affect the whole world directly and indirectly. And yet, we fight WW IV with the same structures that stood us in good stead during the previous wars. The focus of most nations is still on adapting the conventional structures rather than developing more suitable ones from scratch. Our armies and para-military forces are still organized and trained based on erstwhile “allout decisive war” doctrines rather than newly developed ones that focus on pre-emptive action rather than overwhelming force. And until we go back to the drawing board and redevelop structures based on intelligence rather than force, we will continue fighting the war on terror with sub-optimal results. Raghu Raman is an expert and a commentator on internal security.
30 MINT ON THE DECADE TUESDAY, FEBRUARY 1, 2011, DELHI ° WWW.LIVEMINT.COM
Maruti miracle Could anything stop Maruti’s complete domination of the car market? It wasn’t competition but the enemy within that threatened to put the brakes on India’s largest car maker as it rolled into the last decade. The stand-off between the Indian government and Suzuki Motor Corp.—Maruti’s two joint venture partners—finally got resolved in 2002, but the impasse meant that several years were lost as plans for new models and fresh investments were frozen. In 2000-01, the company made a loss of $60 million, the lowest point in Maruti’s 27-year-old history. But after the government divested its stake and stopped meddling, Suzuki climbed into the driver’s seat to make up for lost time. The second half of the decade saw a slew of new models from Maruti, but it was the Swift, launched in 2005, that changed the perception of the company. The contemporary car, with its cutting-edge styling, was a breath of fresh air in an ageing line-up. The Swift opened up the nascent premium hatchback class and five years on it’s still the benchmark. As the decade closed, Maruti’s market share may have dropped, but it’s still cranking out a record number of cars. This juggernaut remains a well-oiled machine and still quite the best auto company in the country.
Ramping up: An M&M assembly line at Nashik. During the last year or two, M&M has gone on a diversification spree, to make practically everything on wheels—from twowheelers to trucks.
Hits and misses
THE DECADE IN WHEELS With the economy embarking on a growth surge at the start of the 10year period, Indians with money in their pockets started lining up outside automobile showrooms. As markets abroad plateaued, car makers flocked to India for a share of rapidly growing sales B Y H ORMAZD S ORABJEE firstname.lastname@example.org
························· decade ago, at the dawn of the new millennium, you didn’t have to be a jyotishi (soothsayer) to figure out that the Indian automobile industry was poised to go through the roof. The India growth story had well and truly begun, income levels were rising rapidly, and a car was the first thing on consumers’ minds the minute they could afford one. That was to be expected in a country where motorization was (and still is) woefully low at around six cars per 1,000 people. Not surprisingly, cars sales zoomed north and have more than tripled from 700,000 units in 2000 to 2.3 million in 2010, to make India the fastest growing car market in the world after China. The number of brands has gone from 11 to 28 along with a fivefold jump in the number of models in the past 10 years. However, it’s not been an easy ride. Intense competition has forced car companies to either reinvent themselves to stay in the race, or get left behind
and even perish. But, despite the seismic changes in India’s rapidly evolving car market, the ranking at the top, even after a decade, is unchanged. Maruti, Hyundai and Tata still remain the “Big Three” auto makers, driving home the point that it’s hard to topple well-entrenched players.
Home truths The start of the last decade was a watershed for homegrown car makers, with some of them just not strong enough to withstand the surge of global competition. Premier Automobiles Ltd had already faded into oblivion. The iconic Padmini was dead and, by the middle of the decade, parts of the historic Kurla factory in Mumbai had disappeared and given way to high-rise apartments. Premier’s erstwhile rival, Hindustan Motors Ltd, struggled too, but showed greater resilience thanks to its booming auto component business, which continues to prop up the lossmaking car division. It was a tough time for Tata Motors as well. Quality problems caught up with its much-
hyped Indica, and within two years of its launch, demand for it fell sharply. The hot-selling Sumo, too, was under attack from the superior Toyota Qualis, and flat sales in the early part of the decade didn’t help. During these difficult times, Tata Motors Ltd was open to an alliance with a global car maker. There were talks with Peugeot to jointly produce a car and it’s rumoured that the top Tata management secretly met General Motors Co.’ (GM) bosses to see if they had any interest in the Indica project. Would Tata Motors cease to be an independent passenger car maker? It didn’t quite come to that. The turning point for Tata Motors was the Indica V2, launched in early 2001. The V2 was a do-or-die attempt to iron out all the bugs. It worked. Though quality still wasn’t up to international standards, it was hugely improved and crossed the threshold to be good enough for Indian customers. From then on, the Indica simply clicked and went on to become one of the best-selling cars of the decade. The reason for its success is that the Indica was conceived for the Indian market and not merely adapted for it like most international models. The Indigo, the saloon derivative launched in 2002, was a big hit too, and Tata hasn’t looked back since, going on to buy Jaguar-Land Rover to truly become a global player. So, if history is anything to go
by, don’t write the Nano off just yet! Another company that’s been completely transformed in the last decade is Mahindra and Mahindra Ltd (M&M). It’s hard to believe that M&M’s flagship in 2000 was the crude, cramped and basic Armada that was hopelessly outclassed by the Tata Sumo. The hugely improved Bolero was launched that year, but no one in M&M could have imagined that this hardy sport utility vehicle (SUV) would be its bestseller in 2010. But it was the Scorpio that changed the face of M&M completely. As the most exciting SUV the company had made in 50 years, it transformed M&M’s image from a firm that made crude yet reliable utility vehicles for rural India to a far more sophisticated and upmarket brand that urban India embraced. The roaring success of the Scorpio gave M&M the confidence to go onto bigger things and the company’s been on a roll ever since. There have been a few blips—the joint venture with Renault SA fell apart and the Xylo, M&M’s next big thing after the Scorpio, didn’t quite have the same impact. During the last year or two of the past decade, M&M has gone on a diversification spree, to make practically everything on wheels—from two-wheelers to trucks. Is M&M spreading itself too thin? That’s what the current decade will tell us.
Of the newer companies, Hyundai’s success in India is unparalleled. The South Korean company has been around for a little more than a decade, but in this relatively short span of time, it’s won the hearts of Indian consumers with its small range of cars. The same can’t be said for Fiat SpA, which, after a spurt of success with the Palio in 2001-02, has floundered for the better part of the decade, only to be rescued by an alliance with Tata. Renault, too, is struggling after parting ways with M&M and its sole model in India, the Logan (now given to M&M), was a flop. Long-standing rivals Ford Motor Co. and GM have undergone a transformation too. While Ford has bounced back from the sidelines with the hugely successful Figo, GM India is half owned by the Chinese, and seems all the better for it. Toyota got off to a slow start with only a handful of models, but closed the decade at an alltime high, with waiting lists stretching back to Japan for the Etios and the Fortuner. For Honda, it’s been the reverse. For the better part of this decade, it was the most sought after brand, but the fizz has evaporated, thanks to steep price increases and stronger competition. If there is one company that’s come this decade with a mission to conquer, it’s Volkswagen AG. The German giant hasn’t made a dent in the Indian market yet, but if there one firm to put your money on for the next decade, it’s this one. Hormazd Sorabjee is the editor of Autocar India, the leading car magazine in the country.
MEN WHO SHAPED THE AUTO INDUSTRY RATAN TATA: No single person has had an impact the on the Indian auto mobile industry as much as the head of the Tata group. He put India on the global map with the acquisition of JaguarLand Rover. Both the Indica and the Nano were products the car world said could never be done, but he proved his sceptics wrong. While the Indica is an unqualified success, the Nano still has to prove itself. But, given Tata’s track record, no one would bet against it.
ANAND MAHINDRA: He was responsible for the transformation of Mahindra and Mahindra from a rural player to a sophisticated and mainstream auto firm. The Scorpio was the springboard that took his company to greater heights. On the back of the success of the hugely successful utility vehicle business, Mahindra has expanded into twowheelers and trucks. The acquisition of Ssangyong is a step towards going more global.
JAGDISH KHATTAR: The former chief executive of Maruti led the company through the better part of the last decade, from a loss in 2000 to profits and a successful initial public offering. He had a shrewd understanding of the market, and an ability to quickly innovate and adapt his marketing tack to suit customer needs. His unrelenting focus on customer satisfaction made Maruti the most trusted car brand in India.
P. CHIDAMBARAM: In 200809, as finance minister, he gave excise concessions to cars less than 4m in length and started the smallcar race in India. The incentives encouraged smallcar production in India, with several multinationals making the country their global base for the production of such cars. The smaller engine capacities under the regulations led to an overall improvement in fuel efficiency.
MINT ON THE DECADE 31 TUESDAY, FEBRUARY 1, 2011, DELHI 째 WWW.LIVEMINT.COM