Saturday, February 2, 2013

An evening with Kapil Sibal

[Disclaimer: The views expressed in this posting are entirely my own and are not, in any way, representative of TiE or the Govt. of India]
On Wednesday, January 30th, TiE Silicon Valley hosted a reception and talk by Kapil Sibal, Cabinet Minister of Communications and Information Technology with the Government of India. He had come to the Bay Area with a delegation that included the Secretary of Technology, J. Satyanarayana and the Joint Secretary of Technology, Ajay Kumar. Their mission was to communicate their vision of  embarking on a very ambitious agenda to develop the Electronic Systems Design and Manufacturing (ESDM) industry in India. There are a number of incentives being made available by the Government of India to the right entrepreneurs and companies. They expect that India’s ESDM demands will be in the order of $400 billion by the year 2020.

Kapil Sibal was everything that I had heard of and read about - erudite, articulate and humorous. He started by talking about the current state of the GDP in India where the service industry accounts for 57% of the GDP; Agriculture is 14% and the balance is Manufacturing. "If India is going to survive as a Global Economy, the shift from Service to Manufacturing needs to happen. We need to move from Software to Hardware," he said. Getting there needs a change in mindset. People in India tend to live in the "glory days" of the past - how India's GDP was the highest in the world during the days of Emperor Asoka. They rue that all the wealth was looted by East India Company. "The past," he said, "is an impediment to the future." By 2020, they would like 65% of all electronics products to be manufactured in India

Next Ajay Kumar gave a presentation on the policy initiatives for promoting this vision. This presentation can be viewed here. The subsidies and incentives are very impressive and the plan seems to be very well thought out to allow them to reach the objective.

Kapil Sibal now took the stage to answer questions. The audience (of ~ 150 professionals in the Bay Area) did not hold back. I have attempted to paraphrase (to the best of my recollection) some of the questions asked and answers provided by Kapil Sibal.

Q1: We attempted to set up a manufacturing facility in India and shipped expensive equipment to Chennai. These machines were sitting in Customs for many months before we decided to scale down our operations in India and move the manufacturing to Singapore.

A1: I am not aware of any issues with importing machinery to India. People are doing this every day without any problem.

Q2: I tried for many years to set up my IT operations in India. It is just too frustrating because of all the red tape we had to face. While the presentation I heard today is very encouraging, my experience is telling me is that it is far from reality.

A2: I don't know the details of your specific problem. People are successfully setting up IT operations in India by the thousands.

Q3: What will it take to get subject matter experts to take on the important decision making roles in the Indian Government?

A3: Why don't you relocate to India and stand for the elections. We can talk after you win the elections.

Q4: Can you talk about the status of the UID project. I have read reports that this has resulted in Identity Theft and abuse of power.

A4: UID is very successful. It is merely a number. It is not possible to abuse it for anything. Don't believe everything that you read.

Q5: We are a Venture Capital firm with an India fund. We had funded companies in India due to some favorable laws. However, the laws changed and were applied retroactively. This resulted in unfavorable conditions for us. We are now skeptical about investing in India.

A5: There was just one law that we changed to be retroactively effective. This has happened numerous times in the U.K.  - where changes were applied retroactively. If you don't chose to invest in India, there are plenty of others who will.

At the end of the session, it seemed to me that Kapil Sibal was not used audiences who spoke to him at his level. It is not as if the questions were "hostile". They were genuine issues and concerns that people faced. I would have preferred if his responses were more along the lines of, "Your issue of grave concern to us. We have a grievance council set up. I encourage you to follow up with them - so that not just your specific issue is addressed, but we have a process and a knowledge base for handling similar issues."

I was reminded of an episode from BBC's "Yes PrimeMinister" (which I had seen many years ago) when Sir Humphrey Appleby rationalizes a significant pay raise to civil servants (in the wake of severe budget cuts in the Government) by simply moving civil servants from one pay category to another and showing that even after the pay increase, because of the reduction in staff (euphemism for lateral movement of staff) the actual salary budget for civil servants got reduced :)

1 comment:

Mridul said...

I am surprised you expected better from kapil Sibal ! This seems to be pretty much in-line with what I would have expected to happen :-)