From The Desk of the Chairman - September 24

Last month, I was away on sabbatical missing in the process my editorial piece for Bizsol Update. That said, it is necessary for me to mention where I had been to, for a particular reason.? I was on a backpack tour of the Eastern belt spanning South Korea, Taiwan and Indonesia.? We had to cancel our scheduled trip to Philippines, as originally planned, as it was hit by typhoon Gaemi which forced us to take an unscheduled break at Taiwan missing Philippines in the process.? That is not the reason why I am mentioning my tour itinerary here.? The tour in itself was an education for me not because of the monuments and museums enroute.? I was truly impressed by the sheer electronics/digital backbone that was visible across these countries that we travelled to, supporting the public infrastructure/facilities.? When we were busy making the tallest statues of national leaders (that, in turn, have the irritating the habit of routinely falling down) and mandirs of the most revered of our gods, these tiny countries (in comparison to us) were busy developing their modern-day digital infrastructure, albeit seamlessly.? They are the new tigers in the broader economy of the world.? I truly got a reality check of the world around us – literally and figuratively too.

Piyush Goyal, the Minister for Commerce and Industry is as smart as they come.? He is articulate and also reputed to be very diplomatic in whatever he says or does.? He recently captured the eyeballs for his uncharacteristic comments about eCommerce platforms.? He alleged that Amazon’s proposed $1 billion investment in India is to compensate itself for its huge losses that it had suffered in the previous year and that smelt of predatory pricing.? In his opinion that is in no way a great service to our country. Moreover, such investments are in no way in the best interest of the host country (read India). Goyal posed a loaded question along the way - “Are we going to cause huge social disruption with this massive growth of eCommerce”?? His tone and tenor took the people, particularly the eCommerce industry stakeholders, by surprise.? They demanded that the minister should clarify his stand and allay their fears.? After all, you cannot run with the hare and hunt with the hounds – An invitation to Amazon cannot be followed by such criticisms.? Post-haste, the next day the minister came out with a clarification "I am not against e-Commerce, but I am for fair trade and ensuring that e-Commerce platforms are not used to harm small retailers and domestic industries".? He added: “We are very clear that we want to invite FDI in Technology and we want the best of the world. We are not against online platforms at all."?Goyal's clarification came as a relief to the e-Commerce industry, which had expressed concern over the minister's earlier comments. The sector has been growing rapidly in India, with major players like Amazon, Flipkart, and others investing heavily.? However, this episode once again brought out the difficulties being faced by the government and the ruling party in marrying the professed policy on trade and the policies being implemented on the ground especially when the party’s support base consists of an overwhelming majority of the trader community.? Be that as it may, the matter has been laid to rest at least for now albeit with some loss of face for the Minister concerned.

“The concept of bail dates back to 399 BC, when Plato attempted to arrange a bond in order to liberate Socrates. The circuit courts in Britain established a bail system in the Middle Ages. The contemporary concept of bail is largely derived from all of the medieval regulations that control it. ?According to Kautilya's Arthashastra, avoiding pre-trial custody was optimal, hence the concept of bail existed in ancient India as well. Bail was practiced in the form of ‘Muchalaka' and ‘Zamanat' during the Mughal period in the 17th century”. (Deepali Padhy, Opinion Express).? This has led to the oft repeated legal principles that has evolved over time in India, viz., “Bail is the rule; Jail is the exception”.? This is the principle laid down by the apex court way back in 1978 through a landmark judgment in the case State of Rajasthan vs V Balchand by Justice V R Krishna Iyer. The honourable Justice emphasised the rights guaranteed by the Constitution of India to buttress his decision.? This avant-garde verdict of Krishna Iyer has become a beacon of hope for all those who are jailed rightly or wrongly ever since in India.? Just the other day this principle came to be restated by the apex Court in a case under the Prevention of Money Laundering Act (PMLA). ?PMLA explicitly provides that those who are arrested under this Act are not eligible to seek bail. Consequently, the Court’s hands are tied whenever a request for bail is made to it.? However, apart from expressing disquiet on this provision of the Act, all Courts subordinate to the apex Court can at best express their discomfort and little else on matters of bail applications.? The Supreme Court wants an accused to be set free and the Act says no.? True reasons for this are not difficult to fathom.? Everyone including the Supreme Court knows that the Acts are, by and large, drafted keeping in mind a given political situation resulting in those who are opposed to the party in power are prevented from going to the public seeking votes for years together till the case is disposed of.? It happens in all politically motivated cases.? However, impeding the freedom of an individual is anathema to the spirit of jurisprudence except under extreme circumstances.? Moreover, considering the time taken to decide a case in the quagmire of judicial processes, an accused would continue to remain in custody even beyond the period of incarceration prescribed for a given crime.? This has resulted in a situation where the judges are becoming extremely creative in interpreting the laws while pronouncing judgments. The judges are extremely reluctant when it comes to interference with personal liberty and freedom of an individual. It is time an element of certainty is brought to bail related provisions, keeping in mind that a ruling party is not able to use endless legal processes itself as a way of punishing an opponent.?

In independent India there have been very few instances where people cutting across class, caste, creed or any other affiliations had come out to protest across the country. That was not so in the case of the rape and murder of a medical student in Kolkata. And rightly so.? The brutality of the crime had been such that the whole country had risen in revolt against the apparent lackadaisical approach of the West Bengal government in dealing with this crime. As the state government gives the impression of being complicit in the crime, the student community has risen in revolt against the government and the hospital authorities.? These protests are happening all over the country and show no signs of abating.? ?Such a horror has happened in a state whose Chief Minister is a woman.? The way the government is conducting the investigations in this case gives the impression that that the government itself has something to answer for.? If anything, the state government has lost its plot and is looking for scapegoats to pin the blame on.? The entire investigation is totally botched up.? Can you imagine the Chief Minister of the state herself taking out a street march to protest against herself!? The whole thing looks simply bizarre defying logic or reason. After the gruesome rape incident that had happened in Delhi a few years back, we were led to believe that things would change.? How wrong we were!? After this incident it is clear that we have not changed – neither the subjects nor the government apparatus. We have been led to believe that we Indians do not want daughters because a female progeny is a liability on the family whereas a man can earn and support a family.? So goes the conventional wisdom.? I had attributed this attitude to illiteracy and ignorance of the population in general. ??I am convinced now that I was wrong.? ?After this incident at Kolkata, I for one, am convinced that India is safe only for the male gender.? Female progenies are doomed and condemned. I have two prayers before God after the Kolkata episode. I want only sons born in our family and our extended families so long as we decide not to migrate to another country that is safe for all genders.? ?The other prayer to my God is to forgive us for not being able to even protect that poor girl in Kolkata when she needed protection the most.? Let me say this much.? I am shocked and I am sorry for what happened.? Permit me to refrain from writing anything more on this subject beyond this point as my fingers are unsteady with rage.

Like every year this year also I watched the jamboree that Reliance Industries Ltd (RIL) had put up on live TV.? They call this the company’s Annual General Meeting.? Ever since the days of the company’s founder Dhirubai Ambani the AGMs have been treated as gala affairs. And why not?? ?Dhirubai himself was a rare phenomenon.? He made the masses (read shareholders) rich year after year just by holding on to the shares of RIL.? Today the event is being streamed live to our drawing rooms instead of us having to sweat it out in a crowded stadium in Mumbai.? Never mind that the focus of these annual events has progressively shifted to electronic form with attendant glitz and glamour.? For Reliance it used to be an event where the finer points in the balance sheets used to be discussed, and promises being made to improve the quality of printing of these annual reports.? After Dhirubai’s departure from the scene the occasions are used today purely for marketing the image of the company and company’s products. Wait.? The last statement is not wholly true. Today the AGM is not merely a meeting of shareholders and its board of directors.? It is get-together of the royal family of the Indian corporate world.? That is not all.? The Reliance AGM is only about the first family of corporate India.? If in previous years this was evident, this year it was emphatically evident. Those who came to your drawing rooms through your TV sets were all Ambanis and no one else.? That is the storyline of India’s biggest business empire! In the past there used to be a self-imposed compulsion for the presence of some professional faces on stage.? Now even those pretenses have also gone.? Today it is an Ambani show all the way. Why envy what the family have legitimately earned?? Wait, if you had waited till the end of the meeting there was more.? After the much-celebrated event of the youngest progeny of Mukesh Ambani’s marriage the family has got one more member. Lo and behold.? The matriarch of the family after all the business of the AGM formally welcomed the newest addition to the family in the AGM!? I had to pinch myself to convince myself that I was indeed in the midst of an AGM and not a glitzy private family affair.? The shareholders are happy. So, should you be too.? ‘The more things change, the more they stay the same’ – so goes the lyrics of a famous song.? Ever since the advent of professional managers into the hallowed boardrooms, corporates had been taking pains to recruit a few professionals to buttress their claim to be a “professionally run company”.? Reliance does not seem to be fazed by any such compulsions as the company’s hallowed reputation alone is enough to dwarf all such tall requirements!?

Narendra Modi made a sudden visit to Ukraine last month.? It was a cleverly crafted move.? Vladimir Zelensky, Ukrainian President was peeved by Modi’s visit to Moscow and clearly upset by him embracing Putin who is a persona non grata for a lot of leaders, particularly for Zelensky.? The latter openly expressed his displeasure of Modi’s gesture of hugging Putin when the former visited Moscow.? Some repair work was called for.? For Modi, the well-traveled global leader that he has turned out to be, it was an unmissable opportunity to garner invaluable goodwill for himself and also shore up something for India.? It was an outing well worth the risk.? Considering the close relationship between India and Russia besides the close comradery between Modi and Putin, the task before the Indian PM was nothing short of a diplomatic minefield in Ukraine.? The prevailing impression in Ukraine was that India operates under the shadow of Russia and was perceived to be an enabler for Putin. Though optics-wise the trip was successful, tangible takeaways were limited as expected. Zelensky reserved his contentious take on Modi’s visit until after the latter had left Ukraine. ?Zelensky still had a curt message to India that he expressed after the departure of the Indian Prime Minister to the effect that India’s standoff with China put restraints on Modi’s peace efforts. The visit might not have achieved any tangible benefits; but as optics go, it has salvaged India’s reputation as an honest broker for peace in the midst of a war.? No mean achievement this.

Just as I was winding up this piece, here comes the latest figures for GDP and GVA for the first quarter of 2024-25.? GDP is estimated to grow by 6.7% for the first quarter and GVA by 6.8% for the same quarter.? A quick explainer may be in order, for the uninitiated.? In the corporate corridors while chalking out policy decisions a corporate executive resorts to various economic metrics to measure the economic performance of a country before dovetailing their recommendations to those figures to draw meaningful conclusions. Gross Domestic Product (GDP) and Gross Value Added (GVA) are the economic measures that are routinely deployed by the economists.? The differences between them are quite nuanced and are used in different contexts with different implications.? Having said this, let us now see how these two metrices differentiate themselves. ??GVA measures the value of goods and services produced in an economy after subtracting the cost of inputs and raw materials.? It thus represents the contribution of each sector to the economy and is calculated as:? GVA = GDP – Taxes on Products + Subsidies on Products.? On the other hand, GDP measures the total value of all final goods and services produced within a country during a specific period.? It includes the value added by all sectors of the economy and is calculated using the following formula:? GDP = GVA + Taxes of Products – Subsidies on Products.? GVA focuses on the value added by each sector of the economy, such as agriculture, manufacturing, services, etc. It provides a sector-specific view of economic performance allowing analysts to understand the contribution of different sectors to the overall economy.? GDP provides a comprehensive measure of the total economic output of a country. It reflects the total income generated within a country, including taxes, and is widely used as an indicator of overall economic health.? GVA provides an insight into the contribution of specific sectors while GDP gives a broad picture of a country's total economic output. Understanding both metrics is crucial for making informed economic decisions and policies.

Thank you.

Venkat R Venkitachalam

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