Insurance Against Ticketless Travel In Mumbai Trains

Kiran Karnik, former President of Nasscom, was the closing keynote speaker at the Indian Business Conference 2008. Karnik said, Innovation will the key to India’s future. And good innovation doesn’t just mean product innovation (new products coming out of India), but could also include process innovation. For e.g.

For anyone that has traveled in a crowded (understatement) local train in Mumbai, where there’s hardly any breathing space, what are the chances that a TC (ticket checker) walking into the train and checking for tickets. Not to mention, the serpentine queues at the ticket window in case you’re not a regular monthly pass holder. So an Indian entrepreneur came up with the ingenious idea of providing insurance for getting caught traveling without ticket. You pay 500 rupees to get insurance, and if you do get caught traveling without a ticket, you pay the 250 rupees fine to the TC and then turn in your receipt for a full refund.

You can run the numbers to figure out the value proposition for the traveler and whether this is a profitable venture. But on the surface it sounds like an unethical business practice – the venture is encouraging people to travel without ticket. Well, here’s the twist – if you’ve ever been caught by a TC, you probably also know that there’s a pretty good chance you can bribe your way out of it without having to pay the full penalty. Hence, the Indian Railways doesn’t see a dime. However, this venture insists you pay the fine in order to get a receipt. Therefore, it discourages you from bribing the TC. Less corruption!

This story was originally published on this blog and was later even picked by Freakonomics.

Photo courtesy: WSJ.com. View the complete slideshow here.

Five Differences Between India and China

Rajiv Lall, Managing Director and Chief Executive Officer, Infrastructure Development Finance Company (IDFC), was the opening keynote speaker at the India Business Conference 2008. The India-China economy comparison is inevitable in any business conference. As the head of IDFC, Lall talked about India’s infrastructure issues by comparing it to China’s.

Note: I haven’t had the time to figure out how to insert a table within WordPress, therefore I created an img. Please click thru the img to see full table text.

Indian government finances 50% of its infrastructure projects. Therefore, India is not as highly levered as China where the govt only invests 16% from the budget and 54% is funded by debt from banks and private sector. However, India has very high subsidies and inefficient distribution system and hence loss-making operations. For e.g. 45% of the total power distributed is lost due to theft (illegal tapping of power lines).

In India, only 44% villages have power. Farmers enjoy subsidies, and power is delivered for free to villages. On the other hand, 99% of China’s villages are powered. Rural taxes are often higher than those in urban areas.

Said Lall, India’s biggest challenge – Leadership. Enough said!

Thomas Friedman redefines the flat world

I attented the Personal Democracy Forum last month.  New York Times columnist, Thomas Friedman, in his keynote announced the addition of 3 new chapters to this popular book “World is Flat” (3rd edition) . 

Mahatma Gandhi once said, “Be the change you want to see in the world”.  That was Gandhi’s message to 250+ million Indians, challenging them to organize and rise up against the British rule.

Thomas Friedman reading out his new chapter announced, “If it’s not happening, it’s because you’re not doing it”.  This is the new form of Citizen Activism in the age of Internet and Technology.  Users have all the necessary tools (read blogs, forums, feeds, widgets) to organize virtual campaigns and put pressure on the big corporations and governments.

Check out the recorded version of Friedman’s keynote here.

More on the flat world and this from the perspective of employers – Back in the days, people wrote and presented their resume as a proxy of who they’re.  Today, companies can go on the internet and gather the information themselves.  The human proxy has been dropped and entities are more transparent.

India Unleashed 2007

Notes from the The South Asian Business Association (SABA) conference at Columbia University:

India shining:

• 50% of India’s population is under 30 years old
• India #1 in milk production and #2 in fruit & veg production
• Hindalco – World’s #1 Aluminium producer
• Mittal – World’s #1 Steel producer
• Reliance invests 22M in Chevron, Dow Chemicals and few other US based companies

Challenges facing India:

• Bringing 600M non-urban population into the mainstream
• Building infrastructure – 350B dollars invested
• Power Crisis – the culture of “free power” has to go
• Water shortage
• 50% illiteracy in Bihar & UP
• 5.7M HIV infected (projected: 50M deaths/year by 2050)
• Education & Health – address social infrastructure problems
• Agricultural productivity and inefficient supply chain – new retail chains like Reliance Fresh & Bharati-Walmart should help eliminate inefficiencies in raw produce procurement from farmers
• Nuclear threat and inflammation a huge threat (India’s nuclear weapons capability annual expenses = 0.5% of GDP – Amartya Sen in The Argumentative Indian)

Arun Shourie, former Disinvestment Minister and former editor of Indian Express, emphasized that every Indian is a reflection of India; non-Indians look at us and develop an impression of India and Indians. On a lighter note (joked Shashi Tharoor), don’t be alarmed if an American walks up to you with a broken laptop at the airport.

• Economy steadily growing 9% YOY
• Exports growing 23% every year
• Forex Reserves touch 200B
• Remittances into India 24M/year
• 6M new mobile subscribers/month

But then…

• 98% of parliamentarians voted on minority vote
• 60% voted into parliament by less than 40% voter turnout

Shourie’s Quote of the Day: While India is not the land of snake charmers anymore, we also can charm snakes.

Shashi Tharoor stressed upon the significance of nation’s “soft power” – the ability to influence or persuade other nations without military power. Soft power could be derived from spreading culture and awareness (Bollywood and tourism), political values (biggest democracy and secular governing body) and foreign policy (credibility).

Move over “melting pots” and “salad bowl”, the thali is here.  Tharoor used the thali as an analogy for Indian diversity – assorted platter, yet each its own.