Econocrat
Tuesday, 12 April 2016
How Does India Become Cashless?
Monday, 28 March 2016
The dilemma that is ' Net Neutrality '
Tuesday, 14 October 2014
Innovation in payment banking
The innovative firms that have taken the first-mover risk in this new market may not necessarily be able to transform themselves in the new mould.
A couple of months back, Reserve Bank of India (RBI) governor Raghuram Rajan had noted, “The key to cheap and universal payments and remittances will be if we can find a safe way to allow funds to be freely transferred between bank accounts and mobile wallets, as well as cashed out of mobile wallets, through a much larger and ubiquitous network of business correspondents.” The question is, how is all this to be operationalized?
Do we really require Banks for Financial Inclusion?
Thursday, 6 February 2014
Defence Planning - A Ticking time bomb!
There
is something faintly dubious when one reads about a recent report in a reputed
publication (Business Standard, Feb 3,2014)
that the armed forces of India have two major problems (a) of every
years capital budget , which as we all know is for acquisitions/procurement of
weapon systems, hardware & platforms, just 5 percent is earmarked for
new acquisitions (i.e Rs 2955 crores in FY 14), with the balance going for payments due
on account for past years acquisitions & purchases, and (b) even then, the forces are just able to spend just 50-60% of
that remaining balance capital allocation!
Just for perspective for readers. The BMC
pothole fixing & road maintenance budget for 2014-15 is Rs 2500 crores – nearly as much as the entire Indian Armed Forces
capital budget.
Is
this not a travesty for one of the worlds
most admired professional military, and a favorite Institution of all Indians?
This
is what we do in Information Technology (IT) when evaluating a technology. We
look at TCO (Total Cost of Ownership) where capex, opex, upgrades, and almost everything (incl
‘known’hidden costs)is
itemized, costed and then added up over its life
cycle, and then matched off with alternative options. This by and large leads
to a fairly correct decision – even with hindsight.
I
wonder after decades of procurement and defence
planning – basic principles which were ennunciated by
Robert McNamara as Defence Secy,USA
in the 60’s/70’s such as Zero based Budgetting (ZBB) and Program,Planning
& Budgetting System (PPBS). That these have been given short
shrift in the corridors of Sena Bhavan
and South Block?
What
is ZBB? Every year the entire budget is reviewed afresh line item wise, without
any reference to the past sanctions or outlay. And as if it is a brand new
budget, with no memory! It validates therefore whether there are increases or
decreases in that particular line item from the last year. And what are the
provisions to be made hence in current year – less, more or same.
PPBS
– is a tool, which the US DoD uses for long range
forecasting, to establish strategic priorities, by costing, tracking
expenditures and achievements against this during a budget year or over its
long range defense plan. I guess typically, your
raising of a mountain strike corp, or carrier battle
group (CBG) or new air command (SAC), etc would ideally be matched off with
concomitant expenditures and achievements till date, and then prioritised.
So
why are we not using these tools, or some Indian jugad
variant of it?
The
issue is a
cultural one. Armies generally measure their strength with boots on the ground.
This is hardwired into their pride and their DNA. So opex
is key. Navies and Air Forces are equipment,
technology and hardware intensive – so capex is key. Force projection for these two arms is a
multiple of such capital assets, and not how many guys they have on their
payroll!
Now
you have between these three services lopsided ratios of capex:opex or teeth to tail ratios which are inherent in
nature. And cant serve as a
common reference point.
So
what do we need to do ? Clearly defence
planners (IHQ?/COSC/CDS?) need to reconcile
this.
So
while an Army marches on its stomach and in their boots. It does not mean that
all responses lie in that direction. For e.g the
formation of the new Mountain Strike Corps (MSC) for the China response. What ought to
have be done is square off with
alternate plans & strategic options viz cyber warfare, use of tactical battlefield ‘low yield’
nuke weapons, use of air force elements , long range missiles, satellite
imagery, weapons & early warning, blocking off the Mallaca
straits with Naval battle groups, getting staging/berthing rights in Vietnam, Japan for maritime forces,
etc, etc.
So
for perhaps lesser revenue outlays (which is the pain point of the moment) it
may be able to have more effective response while keeping the teeth:tail ratio sharp.