Conversation with Narendra Modi, Chief Minister of Gujarat

We contacted Narendra Modi’s office on Monday, introducing ourselves as recent graduates from US colleges on an all-India tour. We received a meeting confirmation 2 days later. It was clear that Modi enjoys meeting young people, and the efficiency of his office was representative of the state of Gujarat as a whole.

What Sets Gujarat Apart?

The meeting began with Modi explaining what sets Gujarat apart from the rest of India. Firstly, his policy-driven approach to governance allows businesses to run with minimal interference, so long as they operate within the clearly prescribed rules and regulations set forth by the state government. Secondly, maintaining 24-hour power supply to every household and business across the state has always been a top priority (Gujarat was the only state where we didn’t experience a single power cut). He is also currently working on spreading broadband connectivity across the rural villages of the state. Thirdly, Gujarat’s implementation of the National Highway Authority of India’s (NHAI) schemes has been more effective than other states. These are some of the drivers behind Gujarat’s unrivaled intra-state road connectivity and infrastructure.

The DMIC and GIFT

The Delhi-Mumbai Industrial Corridor (DMIC) is a large-scale national project which will likely shape the country’s economic future as it is implemented. Modi believes that Gujarat will be a key beneficiary of the project. He also holds a positive outlook on its feasibility- so much so that he has commissioned the erection of 9 state highways (which are already built) in support of the corridor.

Gujarat International Finance Tec-City (GIFT) is Modi’s baby. We were shown a premium quality coffee table book on the project as he explained its place in the future of Gujarat. His vision is to make a financial hub of international standards in India. Gujarat would be a natural birthplace for such a project as it houses the highest number of Chartered Accountants in the country and is a breeding ground for people who are interested in financial services. If all goes as planned, we envision GIFT turning into the financial hub of India, in spite of Mumbai being the official financial capital (like how Hong Kong is China’s financial hub, in spite of Shanghai being the official financial capital).

Graphic design of GIFT skyline

Constant Learning

When asked what the rest of India should learn from Gujarat, Modi instead chose to talk about what Gujarat learns from the rest of the country. He explained that if he notices anything working successfully in other states (be it in public works, the arts or education), he immediately sends a 10-person team there to understand the strategy. Modi also routinely dispatches all his MLA’s to different states to learn about those states’ best practices and adapt them to Gujarat’s growth model.

Wrapping-up…

Modi runs a tight ship, and this has allowed him to build a state with road connectivity, power supply and infrastructure that is superior to any of the states we have covered so far. It is a combination of the CM’s leadership and the enterprising nature of the Gujarati people that has made the state what it is today. With such large-scale economic and financial projects underway, we expect to see it develop into a major commercial hub of the country.

Notes From Israma: Mineral Water Plant & NREGS

Reverse Osmosis Water Plant

After seeing the Amul operation at Israma, the sarpanch (head) of the village took us to a “mineral water plant” installed in the community. We learnt that an ex-resident of the village, who is now settled abroad, had donated an INR 250,000 reverse osmosis water plant to the community. Water from the plant is sold for INR 0.25/liter to the villagers who use it for all domestic purposes. Revenue generated from sales is used for maintenance. The low price makes clean water an affordable utility and reduces wastage of a precious resource. Moreover, the practice of making regular payments for utilities is a positive step towards good civic discipline. Lastly, clean water will reduce the incidence/spread of water-borne diseases. We thought this was a remarkable initiative which could be replicated in other villages across the country.

RO Plant Installed In Israma

NREGS

We learnt that the NREGS has not taken off in Israma. The numbers confirm this fact. 3 factors explain this phenomenon:

1. Literacy rates are high in the village and majority of the youth move to urban areas in search for skilled jobs.
2. Physical infrastructure in Gujarat is much better relative to other states in the country. Therefore, there is little (if any) need for locals to work on infrastructure projects.
3. Primary sector employment and opportunities to generate a supplementary income (think Amul) are abundant.

The Real Amul: Our Visit to Israma

Politics is outside the door of this collection center. Inside, it’s just business.

— Amul Society Supervisor

In order to fully understand (and appreciate) the Amul model, we visited Israma, a village in the Anand district of Gujarat. Milk collection at the designated centers takes place twice daily, at 6am and at 5.30pm. An Amul tanker arrives at the village at 10am to gather milk collected that morning and the previous evening. This tanker takes the stock to the Amul factory in Anand for pasteurization.

Milk Storage Tank At the Collection Center

We reached Israma at 6:30am and found that the collection process was under way. The fat content of the milk is checked by a masked officer who uses a digital instrument which is connected to a computer that runs Gujarati software. The villagers are paid every 5 days but have the option of taking daily payments. The center is supervised by a Society Chairman, elected at the local level by members of the co-operative. Israma has a total population of 2,500 and 360 co-operative members (nearly every family in the village is involved). Membership can be obtained by supplying 700 liters of milk or by contributing for 180 days (in addition to paying a fee of INR 10).

Collection Process

Villager pouring milk into collection bucket

The Israma collection center was established in 1965. Last year, it generated profits of INR 900,000 which were re-distributed among the villagers in direct proportion to their contribution. This center has an ISO standard which is reviewed annually. In order to meet the requirements, the center maintains its own scorecard and updates it every month. The unit also has a cattle feed storage room where 17kg sacks of mixed grains are stored. These are sold to farmers at a discounted price.

The ISO Certificate

Grain Storage At the Collection Center

1,100 such centers are spread across the Kaira and Anand districts of Gujarat. Most villagers in these districts are members of the co-operative as it is a robust secondary source of income. In times of drought, this option is no short of life-saving. Amul is working towards providing broadband internet to these centers.

This institution works on simple traits – trust and teamwork. The system is unique in that it provides incentive for each farmer to be diligent and maintain healthy cattle. The center is decorated with posters that educate villagers on how to provide optimal nutrition for their cows. It sets an example for efficiency, hygiene and solidarity. To see such a co-operative thrive was heartwarming, and we hope Amul’s presence in rural India continues to grow for years to come.

Science City and the Akshardham Temple

Ahmedabad is decorated with signboards pointing to Science City, home of the Vibrant Gujarat campaign. Eager to see what all the fuss was about, we visited the uniquely positioned theme park. After marveling at the aesthetically pleasing infrastructure and energy/space exhibits, we were hit by an overshadowing observation- the place was dead. Though elaborately designed, the science hall consisted mainly of satellite images of India (think Google Earth), and the energy park’s main feature was a pond where one can squirt water onto a tiny dancer to make her swivel around (this was actually quite fun).

It is disappointing to see such a large-scale project going down the drain- especially one that can have enormous relevance today, with energy being such a hot topic. The infrastructural foundation is set and the hardest part is over. Now, to bring in the crowds it just needs to be made more exciting.

Space Hall at Science City

Pathway to the giant globe

A few features that we believe would increase footfall are solar-powered bumper cars, science-themed mini golf, and a more educational demonstration of how hydro-power is generated.

It was interesting to see that the Akshardam temple was more happening than Science City. We entered to the sounds of screaming uncles and aunties who were catching a quick TORATORA ride before their afternoon prayer session. The water slides, although not fully-functional at the time, supplemented the 8-9 amusement park rides to create a bewildering cross between Six Flags and Swaminarayan worship. Refreshments are served at numerous stalls and the screening of Mystic India in the temple theater is worth catching if you have the time.

Conversation with Dr. Bakul Dholakia, Ex-director, IIM-A

We were fortunate to get an appointment with Dr. Bakul Dholakia, ex-director of IIM Ahmedabad, at his office in Adani House. He is currently a senior advisor on education to the Adani Group. We learned that during its inception, IIM-A entered a 5-year tie-up with Harvard Business School to formulate its case-oriented curriculum. It did not make a big deal out of this in order to invest in the longevity of its own brand, avoiding any short-term association with HBS.

Dholakia believes that the IIM model would be scalable if the institution had the autonomy it deserved. Since IIMs were first established as government-sponsored institutions, they face the shackles of governmental control till date. The government interferes in matters ranging from faculty pay-scales to admission criteria. As faculty must be PhDs with published research, industry expertise and international exposure, there is a miniscule population of capable professors in the country that fit the profile. Furthermore, consulting/corporate houses would stop at nothing to get their hands on these superstars – luring them with plush offices and packages. The only weapon an IIM has in the fight for faculty is money, and here the government places it in a chokehold. Since the institutions do not have control over how much faculty is paid, there is limited scope to expand to the size of top-tier business schools in the US.

Dholakia spent years fighting for IIM’s freedom from the government, but to no avail. He ultimately devised ways to expand under the conditions set by the authorities, i.e. by establishing foreign exchange programs and the exclusive 1-year course. However, this still does not allow IIM to achieve a fraction of its potential.

Our Solution: The government should provide assistance to educational institutes during their nascent stages, and then gradually provide autonomy as the institutions prove their success both economically and administratively. This would not only incentivize efficiency and independence on the part of these institutes, but it would also allow them to be competitive on a global scale.

In closing, we asked Dholakia to share his thoughts on the future of the Indian education sector. He stated that in management studies, the days of simple finance or marketing degrees are over, and that increased specialization will be the future of higher education in India.

Ahmedabad at the Forefront of India’s Education Story

The Gujarat Forensic Sciences University, the first of its kind in the world, was inaugurated on August 25, 2009. Narendra Modi (Chief Minister of Gujarat) and K.S. Radhakrishnan (Chief Justice of the High Court of Gujarat), along with other dignitaries, presided over the ceremony. The institution is a milestone for the Indian judicial system, where lack of evidence is cited as a critical issue impeding justice delivery. The crowd of 500+ students, parents, journalists and forensic scientists rose in unison and observed pin-drop silence as Modi entered the auditorium. After numerous eulogies, he was invited to address the audience.

Modi described the event as equally significant to Gujarat as the establishment of the Narmada dam. His excitement for putting Gujarat at the forefront of education and research in forensic science was evident. The one international (German) student was bombarded with cameramen, as this institution also aims to attract those looking for entries into foreign agencies such as the CIA, FBI, etc.

Modi swarmed by students and journalists after the ceremony

After witnessing history in the making, we left for the National Institute of Design (NID). We were welcomed by the post-modern architecture and displays of students’ 3D car models (Renault recently sponsored a competition to design an Indian coupe). The artsy student body strut the campus knowing they are the best of the best (think the MIT of design in India). There was arrogance in the air, and we loved it. The head of PR explained that as designing becomes an increasingly acceptable profession in India, the acceptance rate of <10% will only go lower. We are unanimously long on this institution.

Amul (Anand Milk Union Ltd.)

We visited the headquarters of Amul (Asia’s largest food products company) in Anand, Gujarat, and spoke to the MD after touring the milk factory. Unlike other dairy product companies, Amul is a co-operative, wholly owned by thousands of villagers who become members by paying a fee of INR 10. These members are also Amul’s milk suppliers, selling their cattle’s milk to the company. They are paid in cash based on the fat content of the milk they sell. They also receive training on animal husbandry from the company and other welfare benefits. They democratically elect local representatives, who in turn select the firm’s board of directors. The entire retained profits of the firm’s activities thus go back to the villagers, in the form of development aid and/or dividends.

Demonstration of tech infrastructure in Amul lobby

The Amul initiative gives otherwise distressed farmers an opportunity to raise cash for daily sustenance. This cooperative has brought prosperity to the villages it operates in, and reduced farmer suicides, by providing them a second source of income. As advised by the MD of Amul, we plan to visit an ‘Amul village’ and get a true sense of the development that the organization has brought about on the ground level.

The Amul complex in Anand, Gujarat

We expected this unusual structure to make the management of the firm a little more challenging. We found out however, that the Board (comprising of ‘illiterate’ villagers) interfered little with the top management. The MD had several opportunities to expand, take on debt and make investments in technology even though this meant lower returns to the cooperative members. Also, political corruption/interference within the electoral procedures of Amul was limited, especially when compared to labor unions, university student councils and other democratic bodies in India.

Cow and milkman figurines in the waiting room

We were positively surprised by this level of efficiency, and walked out with a favorable impression of this ‘socialist’ organization, despite having been trained in America to think like die-hard capitalists.

Reliance Netconnect vs. Tata Photon (Ahmedabad)

Netconnect wins Ahmedabad.

Netconnect:

Photon: