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www.economictimes.com | Bangalore | 28 pages | `10
June 22-28, 2014
The Online
vs Offline
Retail
Slugfest
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Its Raining Tourists
in Kerala
p.26
Mahindra
Rides into
the US on
an Electric
2-Wheeler
p.12
The El Nio
Cloud of
Uncertainty
p.04
p
.0
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inance minister Arun Jaitley has
strongly defended the steep hike
in rail fare and freight rates, say-
ing the railways can survive only if us-
ers pay for availing facilities.
Passenger services have been sub-
sidized by the freight traffic. In recent
years, even freight fares have come
under pressure, he said in his first re-
action to the 14.2% increase in passen-
ger fares and 6.5 % increase in freight
rates announced on Friday. It is a dif-
ficult but correct decision, he said.
The choice before the government
was to allow the railways to bleed and
eventually walk into a debt trap or
raise fares, according to Jaitley. India
must decide whether it wants a world-
class railway or a ramshackled one.
The railway minister has taken
a difficult but a correct de-
ci sion...The Indian
Railways for the last
few years have
been running at a loss, he said in a Fa-
cebook post on Saturday.
He said the Railway Board had pro-
posed a 5% increase in freight and
10% increase in passenger fares on
February 5, 2014 when the United
Progressive Alliance government was
in power. The proposal was to ration-
alize freight rates with effect from
April 1, 2014 and the passenger fares
with effect from May 1, 2014, he said
adding that the proposal was en-
dorsed by the then prime minister
Manmohan Singh.
Jaitley pointed that the Railway
Board accordingly notified the in-
crease on May 16, 2014, on the day of
election results, but the then railway
minister countermanded the order.
By withdrawing the countermanding
order, the present Railway minister DS
Sadananda Gowda has taken a chal-
lenging decision, he said.
Our Bureau/New Delhi
whats news
JUNE 22-28, 2014
02
Washington: Prime minister Narendra
Modi, once denied a visa to enter the United
States over massacres of Muslims, is expect-
ed to receive the honour of address-
ing a joint session of the US Congress
during a visit to Washington in Sep-
tember.
California Republican Ed Royce,
chairman of the House of Represent-
atives Foreign Affairs Committee,
wrote to House Speaker John Boeh-
ner on Friday and asked that he in-
vite Modi to address a joint session of the
House and Senate during his trip.
In every aspect whether it be in politi-
cal, economic or security relations
the United States has no more
important partner in South Asia,
the letter said. It is not an over-
statement to say that the US-India
relationship will be one of the de-
fining partnerships of the 21st cen-
tury.
Boehners office did not imme-
diately announce a response to the letter,
which was also signed by North Carolina
Republican Representative George Holding.
Congressional aides said they expected
an invitation would be issued to the Indian
leader.
The administration of President George
W Bush denied Modi a visa in 2005 under a
1998 US law barring entry to foreigners who
have committed particularly severe viola-
tions of religious freedom.
The United States, which sees India as a
natural ally and potential counterbalance to
China in Asia, is eager to expand business
and security cooperation with the Modi gov-
ernment. However, the relationship has
failed to live up to that billing, due to bureau-
cratic and regulatory obstacles in India to
expanded business ties and a political dis-
pute over US treatment of an Indian diplo-
mat accused of mistreating her nanny,
which some analysts blamed on a lack of
policy focus by the Obama administration.
Reuters
US lawmakers seek to honour Modi with address to Congress
Govt says it knows
identity of Indian
kidnappers
New Delhi: The government has
said it has established the identity of
the captors who have kidnapped 39
Indians in Iraq, but stopped short of
revealing their identity and indicat-
ed that some contact may have been
established with the kidnappers. On
Saturday, the external affairs minis-
try spokesperson reiterated that all
the 39 Indians are safe. Sources said
negotiations are ongoing with cap-
tors through regional powers and
players that wield influence with the
captors. Though the government re-
fused to name the group, it is widely
believed that ISIS is behind the kid-
napping. The ministry has also re-
ceived details about the wherea-
bouts of several Indians of the
10,000-strong community across
Iraq. As many as 49 out of 1,300 In-
dian staff in a Turkish company in
northern Iraq want to return. And
20 out of 1,000 Indians in a factory
from southern Iraq are also keen to
return and government is in touch
with company management.
Dipanjan Roy Chaudhury
Russian forces on
combat alert
Moscow: Russi an presi dent
Vladimir Putin on Saturday ordered
military forces in central Russia on
combat alert as well as a drill of air-
borne troops, a day after Ukraine
ordered a cease-fire with pro-Rus-
sian rebels. Nato said earlier this
week that Russia has resumed a mili-
tary build-up on the border with
Ukraine where pro-Russian separa-
tists have been fighting government
forces for weeks in a conflict that has
left about 300 people dead and dis-
placed over 34,000. AP
Suspense over
Gogois exit
Guwahati: Amid indications that he
might be replaced, Assam chief min-
ister Tarun Gogoi has refused to con-
firm the move to replace him and
said any such decision will be taken
by the Congress high command only.
I wont say yes, I wont say no, Go-
goi told a press conference here
when asked if his replacement was in
the offing. It is going to be a high
command decision only... I am going
to Delhi tomorrow, he added. As-
sam senior minister Himanta Biswa
Sarma, who is leading the dissident
camp of the party in the state, is likely
to meet the Congress leadership
soon. In a separate development, Go-
goi opposed a fresh proposal from
the external affairs ministry on grant-
ing visa-free entry for Bangladeshi
nationals below 10 years and above
70 years.
PTI and Bikash Singh
Sebi calls for tax
clarity on trusts
and securities
New Delhi: Market regulator Securi-
ties and Exchange Board of India has
sought clarity in taxation on real es-
tate investment trust, infrastructure
investment trusts and debt securi-
ties in the forthcoming budget that
would draw investors to the mar-
kets. Sebi will soon finalize norms
for REITs, but is awaiting clarity on
taxation issues, Sebi chairman UK
Sinha said on Saturday. The regula-
tor wants a pass-through status for
investment trusts and a uniform
withholding tax rate for all catego-
ries of bonds. A pass-through tax
status would mean that the trust it-
self does not face any tax but inves-
tors are taxed on their profits indi-
vidually. He said Sebi was ready with
guidelines that would be announced
immediately after tax clarity from
the government. Sinha also high-
lighted the issue of certain anoma-
lies in withholding tax on debt secu-
rities and hoped for a quick resolu-
tion. Currently, tax rates vary for
different categories of debt. All that
we have asked the government is
that try and reconcile it because if
you are looking for long term and
big money, especially for infrastruc-
ture companies, so long as the
anomalies exist people will hesitate
to invest. That is the point we are
making, Sinha said. Sinha also
stressed on the need to encourage
small and medium enterprises to
get listed.
Our Bureau
FM defends sharp
rise in rail fares
The residents of Worlis Campa Cola society in Mumbai stalled the demolition of the illegal apartments
yet again by disallowing the authorities from entering the compound on Saturday. Santosh Bane
India must
decide
whether it
wants a
world-class
railway or a
ramshackled
one
Arun Jaitley,
finance minister
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s a procession of governors pays
courtesy calls to newly elected prime
minister Narendra Modi and home
minister Rajnath Singh, their excel-
lencies cannot escape the scrutiny
which surrounds the question of
their continuance in their respective
Raj Bhavans. Many are former chief
ministers, or once ac-
tive politicians, or gov-
ernment servants re-
warded by a particular
regime. The current
government, as the last
one did in 2004, wants
them out; its list of those
who they want to pack
off to these gubernato-
rial retirements is as
long as an arm.
Seasoned political
watchers consider this
unseemly nudging of
governors and other ap-
pointees of a previous
regime at the head of constitutional,
statutory and even some executive
bodies as par for the course. All re-
gimes do it, is a common consensus,
and yet, the ugliness this engenders at
the beginning of a new government in
that pink afterglow of an electoral vic-
tory is not a good portend. Is there a
way out? Should India, like the United
States, institutionalize partisanship in
appointments; a change of regime au-
tomatically leading to a change in
these posts?
The Indian System
In 2004, when the UPA
government took charge
they lost no time in pack-
ing off governors from
the NDA regime from Raj
Bhavans across the coun-
try. A court case, the
judgement for which was
delivered in 2010, then
enshrined certain rules
under which a governor
could be removed before
his/her tenure is up.
These included flouting
of rules of conduct. This
pretty much means that the govern-
ment has to depend on the incum-
bents own decision on whether or not
they want to quit their posts.
It is true that the UPA [govern-
ment] removed governors before
their term was up. It is also true that in
1977 the Morarji Desai government
dismissed at least nine state govern-
ments when the Janata Party came to
power. All this is now water under the
bridge. We have a court judgement
which is very clear, says Congress
spokesperson Raj Babbar.
The matter is, however is not so sim-
ple, according to Sanjaya Baru, ex-
media adviser to former prime minis-
ter Manmohan Singh and director for
geo-economics and strategy at the In-
ternational Institute for Strategic
Studies. The appointments of gover-
nors and others are political and have
been so since Indira Gandhis time.
There is no justification for people to
stay on once the government chang-
es, he says. Look at the roll call of
governors, mostly former chief minis-
ters or loyal government servants like
ESL Narasimhan and MK Narayanan.
Why would the new government want
to keep them on?
Amitabh Mattoo, director of the
Australia-India Institute and govern-
ance expert, agrees that the time has
indeed come to make certain changes
A way out is for
a convention to
be built that
governors resign
on their own
once the
government that
appointed them
is no longer in
power
Amitabh Mattoo,
governance expert
in the way these posts are dealt with in India.
The judgement by the Supreme Court in the
2010 case states that the president can remove
the governor from office anytime without as-
signing any reason, but this power cannot be
exercised in an arbitrary, capricious or unrea-
sonable manner, he says. The fact, however,
is, that more often than not, governors are ap-
pointed for partisan reasons by the govern-
ment of the day, he adds.
The Way Out
The way out is for a convention to be built that
governors resign on their own once the govern-
ment that appointed them is no longer in pow-
er, says Mattoo. Such a situation will take years
and may not exactly be followed by all in faith
though. Mattoo says that failing this, and look-
ing at the way the whole controversy over the
tenure of governors is brewing, an amendment
to the Constitution becomes inevitable. Two
things need to be added as amendments to the
way in which governors are appointed. One,
governors should be appointed only on the ba-
sis of the recommendations of a panel which
includes the prime minister and the leader of
the opposition. Secondly, the tenure of the gov-
ernor is made co-terminus with the government
that appoints the governor, he says.
The embarrassment of waiting and nudging
Constitutional post holders to vacate these
seats has occupied much of the weeks news
cycle and needs a more settled solution.
India follows the Westminster model, but
this very American institutionalization of par-
tisanship seems to be the way to go. Especially
after the comprehensive breaking of the Con-
gress dominance and a genuine two coalition
political system that seems to be emerging.
When a Cold Chair
Becomes a Hot Seat
Governors are no more than ornamental office bearers, but a new government at the
Centre invariably kicks up a storm by nudging incumbents to resign. Is there a way out?
Governor of Rajasthan Margaret Alva with prime minister Narendra Modi in New Delhi on Tuesday
:: Nistula Hebbar
A
news analysis
JUNE 22-28, 2014
03
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he first big challenge to Narendra Modis
prime ministerial skills is now possibly in
plain sight and its developing not in India
but thousands of miles away off the coast of
Peru, South America. The now-notorious
El Nio weather phenomenon is not yet
fully developed it will reach its full frui-
tion around September and October, but
already it is being linked to a weak mon-
soon, soaring prices of vegetables and the
possibility of poor agricultural output. The
BJP fought this election around the inabili-
ty of the previous government to rein in in-
flation and the rising prices of essential
commodities. Now it is faced with the very
real possibility that inflation could well
head higher in the coming months.
The signs are hardly positive. The mon-
soon shortfall is currently around 42% and
with land temperatures high and little sign
of rain in a number of regions, crop plant-
ing is delayed. During the 2009 drought,
one of the worst India faced in many dec-
ades, rainfall deficit in June was running at
similar levels. Delayed planting of key
crops such as onion has already forced
prices upward.
What is El Nio and how will it affect the
monsoon? The big problem here is one of
uncertainty about the future path of the
monsoon, about the extent of any weak-
ness in rainfall and even the extent of the El
Nio phenomenon. It has been, and still
is, very difficult to predict the monsoon
and the effect of the El Nio on it, points
out Balaji Rajagopalan, professor at the
University of Colorado in Boulder (US),
who has researched the links between the
Indian monsoon and the El Nio.
The El Nio Cycle
Indeed El Nio, and the role it plays in peri-
odic droughts which hit the Indian subcon-
tinent, was one of the foundational ques-
tions that drove modern weather research.
In his book on Victorian famines, writer
Mike Davis calls the El Nio Southern Oscil-
lation (or ENSO to give it its full name) the
elusive great white whale of tropical mete-
orology for almost a century. And despite
more than a century of research, it still, in a
sense, remains that way.
El Nio arises in the eastern Pacific,
along the coast of South America. In nor-
mal years, there exists both a tempera-
ture and air pressure difference between
the oceans there, and the western Pacific,
thousands of miles on the other side, near
Indonesia and Southeast Asia. The waters
of the eastern Pacific near South America
are colder, and are associated with higher
atmospheric air pressure over them, as
compared with the waters of the western
Pacific which are warmer, and are associ-
ated with lower atmospheric pressure.
As we learnt in high school geography,
wind always blows from a region of high
pressure to a region of low pressure, and
this is what happens over the Pacific, with
winds blowing from the east to the west. In
turn, the air over the western pacific rises
into the atmosphere and then cycles back
east, and the whole process starts again.
During El Nio, the sea temperatures
off the coast of South America are much
warmer than in other years. Along with
this, the air pressure over it is much weak-
er as well. This sharply narrows the differ-
ence between the western and eastern
Pacific, making the cycle much weaker. In
a sense the region of low pressure moves
away from Asia and towards South Ameri-
ca. The Indian monsoon too is affected by
this movement of low pressure air away
from the Asian region into the middle of
the Pacific and is dragged away from the
Indian land mass. The result: rains and
winds over India which are far lower than
normal. Indeed, large parts of South and
Southeast Asia become drier. Conversely,
the Pacific coasts of South America, in-
cluding countries such as Peru, become
much wetter and see much higher rainfall.
This, very broadly, is how El Nio
works. In actual fact though, its hardly
that simple.
An Old Puzzle
As the chart on the next page (El Nio and
the Indian Monsoon...) shows, strong El
Nio conditions (the shaded region to the
right) usually occur along with a weak
monsoon. But note that there have been
cases, most notably in 1997, when a very
strong El Nio was accompanied by a nor-
mal monsoon. We were anticipating a
major disaster in 1997, as El Nio devel-
oped, but nothing happened, says K
Krishna Kumar, a meteorologist currently
consulting with the meteorological de-
partment in Qatar, but who has been with
the Indian Institute of Tropical Meteorol-
ogy since 1982. Kumar and Rajagopalan
were co-authors on a paper in 2006 which
pointed to a simple fact: ...severe
droughts in India have always been ac-
companied by El Nio events. Yet El Nio
events have not always produced severe
droughts.
The reasons for this complex relation-
ship are still unclear. In 1997 for instance,
one possible reason for the normal mon-
big story
JUNE 22-28, 2014
04
Here Comes
:: Avinash Celestine
El Nio could lead to a weak monsoon,
posing the most serious challenge yet
to the new government
Monsoon shortfall is
currently around 42%.
Land temperatures are
high, there is little sign
of rain in a number of
regions, and delayed
planting of key
crops such as onion
has already forced
prices upward
Trouble
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inance minister Arun Jaitley has
strongly defended the steep hike
in rail fare and freight rates, say-
ing the railways can survive only if us-
ers pay for availing facilities.
Passenger services have been sub-
sidized by the freight traffic. In recent
years, even freight fares have come
under pressure, he said in his first re-
action to the 14.2% increase in passen-
ger fares and 6.5 % increase in freight
rates announced on Friday. It is a dif-
ficult but correct decision, he said.
The choice before the government
was to allow the railways to bleed and
eventually walk into a debt trap or
raise fares, according to Jaitley. India
must decide whether it wants a world-
class railway or a ramshackled one.
The railway minister has taken
a difficult but a correct de-
ci sion...The Indian
Railways for the last
few years have
been running at a loss, he said in a Fa-
cebook post on Saturday.
He said the Railway Board had pro-
posed a 5% increase in freight and
10% increase in passenger fares on
February 5, 2014 when the United
Progressive Alliance government was
in power. The proposal was to ration-
alize freight rates with effect from
April 1, 2014 and the passenger fares
with effect from May 1, 2014, he said
adding that the proposal was en-
dorsed by the then prime minister
Manmohan Singh.
Jaitley pointed that the Railway
Board accordingly notified the in-
crease on May 16, 2014, on the day of
election results, but the then railway
minister countermanded the order.
By withdrawing the countermanding
order, the present Railway minister DS
Sadananda Gowda has taken a chal-
lenging decision, he said.
Our Bureau/New Delhi
whats news
JUNE 22-28, 2014
02
Washington: Prime minister Narendra
Modi, once denied a visa to enter the United
States over massacres of Muslims, is expect-
ed to receive the honour of address-
ing a joint session of the US Congress
during a visit to Washington in Sep-
tember.
California Republican Ed Royce,
chairman of the House of Represent-
atives Foreign Affairs Committee,
wrote to House Speaker John Boeh-
ner on Friday and asked that he in-
vite Modi to address a joint session of the
House and Senate during his trip.
In every aspect whether it be in politi-
cal, economic or security relations
the United States has no more
important partner in South Asia,
the letter said. It is not an over-
statement to say that the US-India
relationship will be one of the de-
fining partnerships of the 21st cen-
tury.
Boehners office did not imme-
diately announce a response to the letter,
which was also signed by North Carolina
Republican Representative George Holding.
Congressional aides said they expected
an invitation would be issued to the Indian
leader.
The administration of President George
W Bush denied Modi a visa in 2005 under a
1998 US law barring entry to foreigners who
have committed particularly severe viola-
tions of religious freedom.
The United States, which sees India as a
natural ally and potential counterbalance to
China in Asia, is eager to expand business
and security cooperation with the Modi gov-
ernment. However, the relationship has
failed to live up to that billing, due to bureau-
cratic and regulatory obstacles in India to
expanded business ties and a political dis-
pute over US treatment of an Indian diplo-
mat accused of mistreating her nanny,
which some analysts blamed on a lack of
policy focus by the Obama administration.
Reuters
US lawmakers seek to honour Modi with address to Congress
Govt says it knows
identity of Indian
kidnappers
New Delhi: The government has
said it has established the identity of
the captors who have kidnapped 39
Indians in Iraq, but stopped short of
revealing their identity and indicat-
ed that some contact may have been
established with the kidnappers. On
Saturday, the external affairs minis-
try spokesperson reiterated that all
the 39 Indians are safe. Sources said
negotiations are ongoing with cap-
tors through regional powers and
players that wield influence with the
captors. Though the government re-
fused to name the group, it is widely
believed that ISIS is behind the kid-
napping. The ministry has also re-
ceived details about the wherea-
bouts of several Indians of the
10,000-strong community across
Iraq. As many as 49 out of 1,300 In-
dian staff in a Turkish company in
northern Iraq want to return. And
20 out of 1,000 Indians in a factory
from southern Iraq are also keen to
return and government is in touch
with company management.
Dipanjan Roy Chaudhury
Russian forces on
combat alert
Moscow: Russi an presi dent
Vladimir Putin on Saturday ordered
military forces in central Russia on
combat alert as well as a drill of air-
borne troops, a day after Ukraine
ordered a cease-fire with pro-Rus-
sian rebels. Nato said earlier this
week that Russia has resumed a mili-
tary build-up on the border with
Ukraine where pro-Russian separa-
tists have been fighting government
forces for weeks in a conflict that has
left about 300 people dead and dis-
placed over 34,000. AP
Suspense over
Gogois exit
Guwahati: Amid indications that he
might be replaced, Assam chief min-
ister Tarun Gogoi has refused to con-
firm the move to replace him and
said any such decision will be taken
by the Congress high command only.
I wont say yes, I wont say no, Go-
goi told a press conference here
when asked if his replacement was in
the offing. It is going to be a high
command decision only... I am going
to Delhi tomorrow, he added. As-
sam senior minister Himanta Biswa
Sarma, who is leading the dissident
camp of the party in the state, is likely
to meet the Congress leadership
soon. In a separate development, Go-
goi opposed a fresh proposal from
the external affairs ministry on grant-
ing visa-free entry for Bangladeshi
nationals below 10 years and above
70 years.
PTI and Bikash Singh
Sebi calls for tax
clarity on trusts
and securities
New Delhi: Market regulator Securi-
ties and Exchange Board of India has
sought clarity in taxation on real es-
tate investment trust, infrastructure
investment trusts and debt securi-
ties in the forthcoming budget that
would draw investors to the mar-
kets. Sebi will soon finalize norms
for REITs, but is awaiting clarity on
taxation issues, Sebi chairman UK
Sinha said on Saturday. The regula-
tor wants a pass-through status for
investment trusts and a uniform
withholding tax rate for all catego-
ries of bonds. A pass-through tax
status would mean that the trust it-
self does not face any tax but inves-
tors are taxed on their profits indi-
vidually. He said Sebi was ready with
guidelines that would be announced
immediately after tax clarity from
the government. Sinha also high-
lighted the issue of certain anoma-
lies in withholding tax on debt secu-
rities and hoped for a quick resolu-
tion. Currently, tax rates vary for
different categories of debt. All that
we have asked the government is
that try and reconcile it because if
you are looking for long term and
big money, especially for infrastruc-
ture companies, so long as the
anomalies exist people will hesitate
to invest. That is the point we are
making, Sinha said. Sinha also
stressed on the need to encourage
small and medium enterprises to
get listed.
Our Bureau
FM defends sharp
rise in rail fares
The residents of Worlis Campa Cola society in Mumbai stalled the demolition of the illegal apartments
yet again by disallowing the authorities from entering the compound on Saturday. Santosh Bane
India must
decide
whether it
wants a
world-class
railway or a
ramshackled
one
Arun Jaitley,
finance minister
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he first big challenge to Narendra Modis
prime ministerial skills is now possibly in
plain sight and its developing not in India
but thousands of miles away off the coast of
Peru, South America. The now-notorious
El Nio weather phenomenon is not yet
fully developed it will reach its full frui-
tion around September and October, but
already it is being linked to a weak mon-
soon, soaring prices of vegetables and the
possibility of poor agricultural output. The
BJP fought this election around the inabili-
ty of the previous government to rein in in-
flation and the rising prices of essential
commodities. Now it is faced with the very
real possibility that inflation could well
head higher in the coming months.
The signs are hardly positive. The mon-
soon shortfall is currently around 42% and
with land temperatures high and little sign
of rain in a number of regions, crop plant-
ing is delayed. During the 2009 drought,
one of the worst India faced in many dec-
ades, rainfall deficit in June was running at
similar levels. Delayed planting of key
crops such as onion has already forced
prices upward.
What is El Nio and how will it affect the
monsoon? The big problem here is one of
uncertainty about the future path of the
monsoon, about the extent of any weak-
ness in rainfall and even the extent of the El
Nio phenomenon. It has been, and still
is, very difficult to predict the monsoon
and the effect of the El Nio on it, points
out Balaji Rajagopalan, professor at the
University of Colorado in Boulder (US),
who has researched the links between the
Indian monsoon and the El Nio.
The El Nio Cycle
Indeed El Nio, and the role it plays in peri-
odic droughts which hit the Indian subcon-
tinent, was one of the foundational ques-
tions that drove modern weather research.
In his book on Victorian famines, writer
Mike Davis calls the El Nio Southern Oscil-
lation (or ENSO to give it its full name) the
elusive great white whale of tropical mete-
orology for almost a century. And despite
more than a century of research, it still, in a
sense, remains that way.
El Nio arises in the eastern Pacific,
along the coast of South America. In nor-
mal years, there exists both a tempera-
ture and air pressure difference between
the oceans there, and the western Pacific,
thousands of miles on the other side, near
Indonesia and Southeast Asia. The waters
of the eastern Pacific near South America
are colder, and are associated with higher
atmospheric air pressure over them, as
compared with the waters of the western
Pacific which are warmer, and are associ-
ated with lower atmospheric pressure.
As we learnt in high school geography,
wind always blows from a region of high
pressure to a region of low pressure, and
this is what happens over the Pacific, with
winds blowing from the east to the west. In
turn, the air over the western pacific rises
into the atmosphere and then cycles back
east, and the whole process starts again.
During El Nio, the sea temperatures
off the coast of South America are much
warmer than in other years. Along with
this, the air pressure over it is much weak-
er as well. This sharply narrows the differ-
ence between the western and eastern
Pacific, making the cycle much weaker. In
a sense the region of low pressure moves
away from Asia and towards South Ameri-
ca. The Indian monsoon too is affected by
this movement of low pressure air away
from the Asian region into the middle of
the Pacific and is dragged away from the
Indian land mass. The result: rains and
winds over India which are far lower than
normal. Indeed, large parts of South and
Southeast Asia become drier. Conversely,
the Pacific coasts of South America, in-
cluding countries such as Peru, become
much wetter and see much higher rainfall.
This, very broadly, is how El Nio
works. In actual fact though, its hardly
that simple.
An Old Puzzle
As the chart on the next page (El Nio and
the Indian Monsoon...) shows, strong El
Nio conditions (the shaded region to the
right) usually occur along with a weak
monsoon. But note that there have been
cases, most notably in 1997, when a very
strong El Nio was accompanied by a nor-
mal monsoon. We were anticipating a
major disaster in 1997, as El Nio devel-
oped, but nothing happened, says K
Krishna Kumar, a meteorologist currently
consulting with the meteorological de-
partment in Qatar, but who has been with
the Indian Institute of Tropical Meteorol-
ogy since 1982. Kumar and Rajagopalan
were co-authors on a paper in 2006 which
pointed to a simple fact: ...severe
droughts in India have always been ac-
companied by El Nio events. Yet El Nio
events have not always produced severe
droughts.
The reasons for this complex relation-
ship are still unclear. In 1997 for instance,
one possible reason for the normal mon-
big story
JUNE 22-28, 2014
04
Here Comes
:: Avinash Celestine
El Nio could lead to a weak monsoon,
posing the most serious challenge yet
to the new government
Monsoon shortfall is
currently around 42%.
Land temperatures are
high, there is little sign
of rain in a number of
regions, and delayed
planting of key
crops such as onion
has already forced
prices upward
Trouble
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soon, despite a strong El Nio, was
another phenomenon, which oc-
curred independently of El Nio.
The mechanism involved was simi-
lar to El Nio (a difference in pres-
sures and temperatures between
two different parts of the ocean
which sets up a cycle of wind move-
ment), except that this time, the cy-
cle didnt occur in the Pacific, but
between the western and eastern
Indian Ocean. This so-called Indian
Ocean Dipole (IOD), effectively
acted as a counterweight to El Nio,
dragging the Indian monsoon back
towards the Indian landmass.
This tug-of-war between the El
Nio phenomenon, and other sep-
arately occurring weather phe-
nomena, makes the complex prob-
lem of forecasting a monsoons
strength much more so. A positive
IOD [such as that which occurred
97] can nullify the impact of El
Nio, points out a senior govern-
ment scientist. Forecasters will be
looking to see how the IOD will be-
have this time around as well.
The 2006 paper pointed to an-
other possible indicator of how
strongly El Nio affects the Indian
monsoon. It argued that Indian
droughts are much more likely to
occur in years when the warming
effect of El Nio in the Pacific ex-
tends far beyond the eastern Pacif-
ic and into the central Pacific Ocean
as well. If true, this means that just
knowing the existence of an El
Nio phenomenon isnt enough
its also important to understand
exactly which parts of the Pacific
Ocean are getting unusually warm.
However, currently our El Nio
prediction models dont have the
ability to account for this factor,
says Kumar.
Adding to the problem is that El
Nio doesnt occur before the
monsoon it evolves along with it.
El Nio is not a predictor of the
monsoon, says the government
scientist. It co-evolves along with
it. They are not two independent
systems interacting apart from
each other.
Rajagopalan says: El Nio is
firmly established around Septem-
ber and thats when the correlation
between Indian monsoon patterns
and El Nio is the strongest.
Unfortunately of course, govern-
ments and farmers dont have the
luxury of waiting till then to under-
stand the nature of the effect.
Reading the Signs
So what will scientists be looking at
in the coming weeks? Apart from
the direct indicators of the drift in
El Nio, as captured through vari-
ous indices and measures, they will
also look for possible phenomena
like the IOD that could counteract
the adverse effects of El Nio. On
that front, the news isnt good
earlier this week Japanese weather
forecasters pointed to the possibil-
ity of an IOD which could actually
reinforce the impact of El Nio,
and force monsoon winds and rain
away from the Indian subconti-
nent. I would also look at inci-
dents like the occurrence of rainfall
over the eastern Pacific, says Ku-
mar. Once that happens, it dis-
turbs the monsoon circulation
which gets displaced away from the
Bay of Bengal. However this has not
happened as yet.
Ultimately though, as Rajagopa-
lan points out, there is no getting
away from the complexity. I dont
see monsoon forecasting getting
much simpler any time soon. We
will have to learn to manage our
risks much better in this context.
The stakes are high enough. As
Sulochana Gadgil and Siddhartha
Gadgil pointed out in a paper some
years back in the Economic and Po-
litical Weekly, despite agricultures
share in GDP declining substantial-
ly over the past several decades,
the impact of severe droughts has
remained between 2% and 5% of
GDP. The 2002 drought they found,
lead to a 15% impact on food grain
production. And ironically, they
found that while the adverse effects
of a drought on GDP remained rela-
tively unchanged, the positive im-
pact of a good monsoon on GDP
had actually declined since 1980.
The new government has its
work cut out.
big story
JUNE 22-28, 2014
05
India
Australia
South
America
Trade wind drops
In
creased convectio
n
When trade winds drop,
warm surface water may ow eastwards
Warm sea currents replace the cold
water and establishes a deep layer
of warm water along the coast
Normal Year
Walker Circulation*
India
Australia
South
America
Warm surface water piling up
* Walker circulation is an ocean-based air-circulation system that inuences the Earths weather
Cold water pressing upwards,
replacing the warm surface water
Trade winds blowing westwards
El Nino Year
El Nio
Phenomenon
An El Nio arises when the temperature
and pressure differences between the
Western Pacic (Asia) and Eastern Pacic
(South America) weaken. This causes
a displacement of low pressure areas
towards the central and eastern Pacic,
weakening the monsoon
El Nio years (the shaded
region) have not always been
accompanied by drought.
Severe droughts however, have
occurred in El Nio years.
Note: El Nio strength is as per
NINO3 index. Monsoon strength
measured as deviation from
the mean. Dotted line is a trend
line of the relationship. Chart
adapted from Unravelling the
Mystery of Indian
Monsoon Failure During El
Nio, by K Krishna Kumar et
al, published in Science, 2006.
Underlying data courtesy Balaji
Rajagopalan, a co-author.
Monsoon status as per IMD.
2.0
2.0 2.5 3.0 3.5
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
-0.5
-0.5
-1.0
-1.0
-1.5
-1.5
-2.0
-2.0
-2.5
-3.0
M
O
N
S
O
O
N
S
T
R
E
N
G
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EL NIO STRENGTH
1961
1917
1878
1994
1970
1973
1964 1872 1889
1946 1945
1908
1879
1949
1938
1954
1886
1922
1924
1903
1948
2010
1999
1984
1937
1960
1885
1880
1962
1995
1912
1895
1929
1932
1891
1913
1907
1939
2001 1952
2000 1876
1985
1873 1974
1966
1928
1968
2004
1986
1911
1920
1979
1904
1915
1991
1957
1902
1951
1941
1982
1965
1905
1987
2002
2009
1918
1972
1899
1877
1997
1983
1901
1871
1881
1943
1977 1921
1897
1887
1936
1934
1884
1990
1926
2008
1953
1914
1900
1919
1993
1940
1963
1969
1923
1896
1888
1930 1925
1894
1958 1933
1892
1874
1942
1916
1893
1975
1959 1947
1988
Drought
Status
Flood
Normal
El Nio and the Indian Monsoon (1871-2012): Its Complicated
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n February 23, 1900 The Times of India
ran a brief item on the increase in
exports of hides, bones and horns from
drought-devastated Gujarat. A govern-
ment inspector had taken totals from
all the railway stations in the region
and come to a total of 139,984 maunds
of hides.
Assuming that six hides go to an Indi-
an maund, it is pointed out in the official
note that the figures under review must
represent a mortality of cattle of more
than 800,000, wrote the Times, noting
that two years back, in 1898, the amount
exported was just 6% of this total. The
hides went to tanneries and the bones
were ground and exported, along with
the horns which were used to make glue.
It is hard to underestimate the quan-
tity of misery that underlies this brisk
note. Cattle had always been a critical
resource for farmers in Gujarat, provid-
ing them with dairy proteins in their
diet, labour and manure for their fields
and perhaps even some surplus income
through sale of butter and ghee. In
famines many farmers tried to keep
feeding their cattle and only let them die
in utter extremis.
Tropical Scourge
This is the rare fact that Mike Davis does
not cite in Late Victorian Holocausts: El
Nio Famines and the Making of the Third
World (2002). There can be few other
relevant ones not included in this data-
driven, yet passionate book. It is packed
with tables and maps, and hops from
India to China to Brazil and other places
in-between, yet makes for gripping
reading due to the controlled rage that
drives Davis exploration of how a global
climatic event combined with capital-
ism as practiced by European empires
to kill well over 60 million people from
1876 to 1902.
Davis acknowledges that the El Nio
Southern Oscillations (ENSO) impact
is now being seen as so huge and wide
that it is tempting to go back in history
and link it to many historical events, like
the French Revolution. But he points
out that ENSOs real impact is felt in a
fairly well-defined tropical area, and
much less in temperate regions beyond
(like France). But his point is that it isnt
ENSO as much as the response to
it which caused a disaster of truly plan-
etary magnitude, with drought and fam-
ine reported as well in Java, the Philip-
pines, New Caledonia, Korea, Brazil,
southern Africa and the Maghreb quite
apart from the epicentres in China and
India. ENSO was an enabler, but Euro-
pean empires ruthlessly took up the
opportunity.
Davis starts with India where ENSO
seems to really flex its muscles first,
with failure of the southwest monsoon.
From here the effects fall eastwards,
reaching the northeast coast of Brazil as
much as two years later. In 1876 the vice-
roy, Lord Lytton, was a particularly bad
choice to deal with problems. He hadnt
wanted the job, had no knowledge of In-
dia and may have been addicted to opi-
um. But this didnt prevent him being
quite focussed on enforcing the eco-
nomic doctrine of the day, which was a
fervent belief in free markets, as long as
they worked to the benefit of the British.
Capitalist Conspiracy
This wasnt quite how it was expressed.
In the nearly 20 years since the Rising of
1857 the British had been at pains to
paint their raj as a force for the benefit of
India, compared to the undisciplined
looting of the East India Company days.
This was why the telegraph and railways
had been built, both of which would as-
suredly prevent such things like famine
deaths by first informing the authorities
of the problem and then helping them
rush aid there. Indian peasants were be-
ing helped to move beyond a subsist-
ence economy by growing cash crops,
like cotton, for which Britain provided a
ready market.
In 1876 these arguments were shown
to be not just hollow, but hypocritical.
Growing cash crops helped the British
recover land revenue efficiently, and
benefitted traders and moneylenders.
But in a pattern which can still be seen to
this day in crops ranging from onions to
mangoes, farmers often fail to get the
benefits traders take the bulk of the
profit, moneylenders most of whats left
big story
JUNE 22-28, 2014
06
Social Darwinians
argued that human
beings had to struggle
and losers were
weak and deserved
to lose. Famine relief
was seen as a waste
because the people
who needed it
didnt deserve it
:: Vikram Doctor
O
In The Shadow of
El Nio
Todays leaders are better equipped
to handle the meteorological
phenomenon unlike their Victorian
predecessors who preferred
profiteering to famine relief
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and farmers are left more vulnerable for
no longer growing even their subsist-
ence crops.
Lytton wasnt just expressing an eco-
nomic doctrine, but also a broader phi-
losophy that would later try to gain
some scientific standing by allying itself
with the late Victorian eras great scien-
tific hero, Charles Darwin. Applying his
vision of the natural world evolving
through a struggle for survival, the so-
cial Darwinians, as followers of Herbert
Spencer and Francis Galton (Darwins
cousin) would be called, argued that hu-
man beings had to struggle and losers
were weak and deserved to lose.
Famine relief was seen as a waste be-
cause the people who needed it didnt
deserve it. The Gujarati is a soft man...
accustomed to earn his good food easi-
ly. Very many, even among the poorest,
had never taken a tool in hand in their
lives, wrote one bureaucrat.
A Few Good Men
The older school of British administra-
tors, like the Duke of Buckingham in Ma-
dras, tried to resist such policies, but were
overruled or eventually fell in line. A strik-
ing example was Sir Richard Temple who
in Bengal in 1873-74 stopped a famine with
rice imported from Burma and doled out
in adequate amounts along with dal for
protein. But after a viceregal reprimand
he changed tacks so completely that when
sent as Famine Delegate to South India he
decreed a famine ration so small it pro-
vided less sustenance for hard labour
than the diet in the infamous Buchenwald
concentration camp.
This was in the camps that the govern-
ment finally opened. Lytton was forced
into this by bad publicity back in the UK.
This came from journals like The States-
man, which deputed a correspondent to
cover the famine, but Davis also notes
the impact of foreign observers, partic-
ularly Americans as missionaries or
travellers like the ex-President Ulysses
Grant, whose world tour of 1877-79 en-
sured his group, including journalists,
saw the effects of ENSO in almost every
tropical country they visited. They
werent deferential to the British and
were truly appalled by what they saw
and reported.
The late 19th century ENSO events
also resulted in an even more impor-
tant long-term change the rise of In-
dian activists to challenge British rule.
Davis points out how the words of crit-
ics like Dadabhai Naoroji, whose paper
The Poverty of India came out in
1876, were given weight by the famine,
while institutions like the Poona Sarva-
janik Sabha, which came up to deal
with famine in the Deccan, were radi-
calized by the poor response of the
British into taking a more radical route
than first envisaged. AO Hume, a Brit-
ish administrator who retired during
Lyttons tenure, was moved to help
start the Indian National Congress after
seeing first hand the negative effects of
the hypocrisies of his peers.
Communists Were no Better
Much of this was linked to the relief
camps. Pushed into starting them, the
government made sure these provided
little real relief. The camps became very
efficient as places to die, thanks to the
diseases that spread among the weak-
ened people and the lack of hygiene (an-
other person Lytton ignored was Flor-
ence Nightingale, who had long lobbied
for better hygiene in India). Lytton re-
tired in 1880, but his legacy was contin-
ued by successors like Lord Curzon,
who also had to deal with drought stem-
ming from an ENSO event around 1899-
1900, but again allowed thousands to
die due to inadequate relief and unre-
stricted food trading.
Davis is careful to focus blame on the
British and not on ENSO. It is easy to as-
sume and some of this can be seen as
we gear ourselves for the current ENSO
that such an unstoppable force inevi-
tably brings death in its wake. But Davis
counters this by looking at ENSO-linked
droughts before 1876, going back to
Mughal times. All these caused hard-
ship, but not on the same scale since
farmers were more self-sufficient, fol-
lowed traditional water conservation
techniques and grew grains like
drought-tolerant millets.
Davis may be a bit too lyrical in lauding
traditional rural practices. They might
have withstood drought better, but prob-
ably at the expense of weaker sections,
like women and Dalits. And it is Amartya
Sen despite being vilified as a doctrinaire
leftist, who gently criticized Davis in a
generally admiring review of his book.
Sen pointed out that capitalism alone
cant be blamed for famines, since some
of the worst of the 20th century took
place under communist regimes. And he
points out that technology like railways
can be a force for good it could, and
sometimes did bring food to famine hit
areas, so it redoubles the blame on the
British that often it did not.
Some Winners
If Europeans were directly enabled by
ENSO, Americans gained indirectly.
North America benefits from ENSO with
better rains, and in the period covered
by Davis the US recorded bumper har-
vests. Railroads helped take these to
ports, from where they were exported,
undercutting grain markets across the
world. This contributed to agricultural
depression, though some of this grain
did come to India as food aid from
American churches (much to their fury,
the British taxed it).
Perhaps the most important result of
the chaos of this period was that it finally
helped meteorologists understand ENSO.
Davis details how by the late 19th century
the British had weather stations across
the world and the data they produced
started to be analyzed by scientists like
Gilbert Walker who was appointed direc-
tor-general of observatories in India in
1904. Explaining the recent monsoon fail-
ures was high priority and Walker slowly
started to identify the patterns of ENSO,
though it would take decades before Ja-
cob Bjerknes at UCLA would put most of
the pieces in place.
This understanding is what can
change our experience of ENSO today.
Its vast scale is unstoppable, but unstop-
pable should not mean we are unable to
respond. Knowing that it is coming
makes it all the more important to be
prepared. If Indias leaders still fumble
in their response to ENSO today their
fault will be even worse than the failings
of those late Victorian viceroys so devas-
tatingly detailed by Davis.
Cattle had always been
a critical resource for
farmers...In famines
many farmers tried
to keep feeding their
cattle and only let
them die in utter
extremis
As the Bengal famine of 1943 showed,
the British governments argument that
their raj was for the benefit of India
was not just hollow but also hypocritical.
Over 3 million people died
big story
JUNE 22-28, 2014
07
GET T Y I MAGES
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ighteen kilometers off Ahmedabad airport, two
tall buildings rise out of literally nowhere. The twin
towers with cobalt blue glass faades are anomalies
in the otherwise brown, dusty landscape. At 122 me-
tres and 28 floors high, the towers are the tallest
in Gujarat. But height isnt really their claim to
fame. The towers are the first buildings to go up in
Narendra Modis dream project: the Gujarat Interna-
tional Financial Tec (GIFT) City. GIFT City, in all like-
lihood, will be Indias first smart city to be built
from scratch.
At GIFT City, the action is happening on the
ground and under it. An army of workers is
sweating in the sweltering sun, pounding
roads and erecting buildings for a
school, a fire station and a cooling
plant. Workmen are also burrow-
ing underground, digging what
will eventually be a 12-km long
maze of utility tunnels, through
which everything from power ca-
bles to fibre optic cables to water
pipelines will be routed.
When GIFT Citys cooling tow-
ers will become operational,
buildings wont use air-condition-
ing but district cooling technolo-
gy, a far more energy-efficient
process that circulates chilled wa-
ter through buildings to cool
them. Solid waste will be sucked
out from homes and offices at 90
km/hr using pipelines leading di-
rectly to a waste processing plant.
When fully functional, GIFT
City will have a command centre
with information and communi-
cation technology (ICT) infra-
structure spread across the city
which will manage everyday
chores like traffic movement. The
closest most Indians have been to
experiencing anything like this is
inside a cinema hall, for the price
of the latest Hollywood sci-fi flick.
But, that may change.
A Hundred Cities
In its election manifesto, the BJP
had promised to build 100 hi-tech
cities. The NDA government
seems to be keen to fulfil that
promise. You cannot build cities
overnight. It takes 20-30 years
to build a new city. Instead
of just making new cities, our
idea is to make our exist-
ing cities smart, Union
minister for housing and
urban development Ven-
kaiah Naidu told ET a cou-
ple of days ago. There
will be a mix. One, to con-
vert an old city into a smart
one. Two, to build new
cities wherever possible,
said Naidu.
cover story
JUNE 22-28, 2014
08
:: TV Mahalingam
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Indian cities dont decide their own destiny.
That needs to change
Ajit Gulabchand, chairman, HCC
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dia. Currently IBM is working on
2,500 smart city projects globally. At
the heart of the smart city is a vast
and all-pervasive ICT network that
serves three broad purposes: im-
proving a citys economic efficiency;
promoting a better quality of life for
citizens; and thereby promoting a
sustainable urban environment.
Like Kant puts it: In the new smart
cities like Dholera [in the DMIC], we
have planned for ICT as another layer
of infrastructure along with roads,
sewage. It is embedded right in the
planning stage of the project.
So, how different are the new smart
cities likely to be from other cities?
For one, most of them are not expect-
ed to be large urban sprawls like the
existing metro cities. Take GIFT City,
for instance. GIFT City has two main
features: a smart city and a global fi-
nancial hub, says Ramakant Jha,
managing director, GIFT City. We
see nearly 30,000-40,000 people
working out of GIFT City by the end of
next year. In 10 years, GIFT City will
create 5 lakh direct jobs and anoth-
er 5 lakh indirect jobs, says Jha,
adding that 60,000-80,000 peo-
ple will be living in GIFT City by
2024. But then, is GIFT City re-
ally a city? Or is it just a well-planned
central business district (CBD) with
fancy technology?
After all, when it is fully built up,
GIFT City will be about 900 acres in
size less than a tenth in size of Dubais
International Airport (8,500 acres).
But then, consider this: the two most
talked about smart cities in the world,
Songdo (South Korea) and Masdar
(UAE), are just about 1,500 acres each
in size larger than GIFT but much
smaller than Dubais airport.
Reluctant Urbanizer
GIFT Citys planners have moved
away from the notion that Indian plan-
ners traditionally suffered fromto
build long, sprawling green cities
which frankly isnt going to work, ar-
gues Angshik Chowdhury, director,
operations, of Smart+Connected Com-
munities at Cisco India. Increasingly,
most economic activities are going to
happen in cities that are compact,
where there is primary emphasis on
transport and job creationGIFT is
not a very, long sprawling city and the
ability to manage the city is built in,
a dds Chowdhur y. Ci s c o s
Smart+Connected portfolio includes
remote access to city infrastructure
For instance, seven new smart cities
are being developed from scratch
along the proposed Delhi-Mumbai In-
dustrial Corridor (DMIC). We expect
the first phase [40-50 sq km] of three
smart cities Dholera [Gujarat], Shen-
dra-Bidkin [Maharashtra] and Global
City [Haryana] to be delivered by
2019, says Amitabh Kant, secretary,
department of industrial policy and
promotion (DIPP). Kant, a former CEO
and managing director of DMIC (hes
still a director on the board), expects
these cities to be home to 2-2.5 million
people by 2040.
India is not the only country build-
ing such cities (see Whats Happening
Beyond India, pg 11). Brand new smart
cities are mushrooming in China, the
UAE and South Korea. Meanwhile,
cities like Barcelona in Spain and
Montpellier in France are implement-
ing smart city solutions to deliver bet-
ter services to their citizens. In fact,
over the next 20 years, over $41 trillion
is expected to be spent on smart city
projects. Given this, it is not surprising
that everybody from the computing
giants like Cisco, IBM, Oracle to
surveillance solutions vendors are
licking their chops in anticipation.
About 10% of the overall cost to build
a smart city [or upgrade a current city]
will be the cost for implementing
surveillance solutions, says Sudhin-
dra Holla, country manager, Axis
Communications India, the Indian
arm of the Swedish manufacturer
of network cameras.
Whats Makes it Smarter
So, what is a smart city all
about? Smart cities are
not about just e-govern-
ance. A smart city is one
that uses technology to
transform its core systems
to optimize the best use of its
finite resources, says Rahul
Sharma, executive director
and partner, global busi-
ness service, IBM In-
JUNE 22-28, 2014
09
We see nearly
30,000-40,000
people working out of
GIFT City by the end of
next year
Ramakant Jha, MD, GIFT City
All about Gujarats GIFT City
cover story
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management solutions
for connected parking,
traffic, safety and security.
On the other hand Dhol-
era, which is planned as a manu-
facturing hub, is spread across 900
sq km twice the size of Ahmedabad.
Does India really need such cities?
If there is one thing everybody agrees
on, it is that India is urbanizing and really
fast. A 2010 McKinsey report throws up
numbers that are any urban planners
worst nightmare. By 2030, 590 million In-
dians will live in cities, up from 340 million
in 2008. It took almost 40 years (1971-
2008) for Indias urban population to grow
by 230 million. The next 250 million city
dwellers will be added in half that time.
The report suggested that India build near-
ly 25 satellite cities near large tier I and tier
II cities, each accommodating up to a mil-
lion people.
India has been a reluctant urbanizer
but urbanization is inevitable, says Kant.
When America was urbanizing, both land
and gas prices were cheap. As a result, the
cities were built as large urban sprawls,
adds Kant, pointing out that Indian cities
dont have that luxury. The use of ICT is an
opportunity for Indian cities to leapfrog to
the level of cities in developed countries,
says Kant.
From Scratch or Not?
What is likely to be the Indian govern-
ments approach? Given that building cities
from scratch is time and capital consum-
ing, retrofitting smart technology in exist-
ing cities may be the way forward. It is
easier to do it in a greenfield project as you
start with a clean slate. Also, in a greenfield
project, you can offer all services togeth-
er, says Aamer Azeemi, managing direc-
tor, Cisco Consulting Services, India who
has spearheaded the American network-
ing giants ICT master planning efforts for
Dholera. However, brownfield projects
(building on sites that have
been developed before) are
more expensive and tend to be
painful to implement. Just imagine the
hassle of laying fibre in any part of Mumbai
city, says an industry executive.
Kant says that the cost of ICT in the
proposed DMIC greenfield cities is just
3-4% of total project cost. However, retro-
fitting cities with smart technologies can
cost 1-2% more. In brownfield projects,
cities first tend to offer services that have a
revenue potential. How do I make parking
smart so that it generates revenue to sus-
tain other activities, asks Ciscos Azeemi.
In greenfield projects, city managers tend
to leverage the greatest asset they have
the right of way for the information
highways they have built. A lot of cit-
ies invest in putting fibre on the
ground and lease that out as it is used
to offer common services, he adds.
Building cities smart or otherwise
from scratch is easier said than done. The
most important part of building a city is to
focus on its economic centre, says Ajit Gu-
labchand, chairman, HCC, whose con-
struction company is developing a hill
city called Lavasa in Maharashtra.
A good starting point is to ask: what is the
anchor identity of the city? What is the soul
of the city? says Vinayak Chatterjee, chair-
man, Feedback Infra, a consulting firm. Is it
a refinery city or a university city? That an-
swer will tell you where the city must be lo-
cated and its master-planning contours.
For instance, refinery cities have to be based
near ports, and a university town could be
based in the hills, he adds.
That will also determine how large or
small a city is spread. That explains why
Dholera, which is focused on manufactur-
ing, will be almost 250 times larger than
GIFT City, which is focused on financial
services.
Then comes, what Chatterjee calls, the
anchor magnet of the city. For instance,
in Jamshedpurs case it was the Tata Steel
factory.
New or Renew
I will be glad if we have the economic plans
and financial models tied up for five new
smart cities in the next five years. That
would be a considerable achievement, says
Chatterjee. My suggestion would be that
the government, in addition to developing
these five cities, pick five towns from each
region in India and improve basic and core
infrastructure, governance in these towns.
These could become a model for rejuvena-
tion of existing towns, adds Chatterjee. Its
a point of view others see merit in.
The greater wave of urbanization is
happening in tier II and tier III Indian cit-
ies, says Ayona Datta, senior lecturer in
Citizenship and Belonging, University of
Leeds. The government would serve peo-
ple better by focusing its resources by
building schools, colleges and hospitals in
these cities rather than creating large, ex-
pensive cities from scratch that serve the
interests of very few people.
Another industry watcher ET Magazine
spoke to put it more bluntly, Today, we
have over 4,000 towns that are badly in
We expect the DMICs first
phase [40-50 sq km] of 3
cities Dholera, Shendra-
Bidkin and Global City to
be delivered by 2019
Amitabh Kant,
secretary, DIPP & director, DMIC
cover story
JUNE 22-28, 2014
10
Dadri-
Noida-
Ghaziabad
Investment
Region, Uttar
Pradesh
Manesar-Bawal
Investment Region,
Haryana
Khushkhera-
Bhiwadi-
Neemrana
Investment Region,
Rajasthan
Pithampur-
Dhar-Mhow
Investment Region,
Madhya Pradesh
Ahmedabad-Dholera
Investment Region, Gujarat
Shendra-Bidkin
Industrial park city near
Aurangabad, Maharashtra
Dighi Port
Industrial area,
Maharashtra
WHAT ARE THEY?
There is no widely accepted
definition for the term smart
city. Mostly, it describes cities
that use networked
infrastructure to improve
business friendliness, quality of
life and promote sustainable
urban development
WHY IS EVERYBODY
GLOBALLY TALKING ABOUT IT?
As of 2008, half of the world lived
in urban areas. By 2030, 60% of the
worlds population is expected to
live in cities and towns.
Governments worldwide from
South Korea to China to the UAE
are building smart cities
ground up
HOW BIG IS THE
OPPORTUNITY?
Globally, investments in
smart cities are likely to
touch $41 trillion in the
next 20 years.
WHATS THE
BIG DEAL IN INDIA?
By 2030, Indias urban population
is expected to soar from 340 million
in 2008 to 590 million. A McKinsey
report says: Took India nearly 40
years [between 1971 and 2008] for
the urban population to rise by
nearly 230 million. It will take only
half the time to add the
next 250 million
Specs and the City
Everything you need to
know about Smart Cities
WHATS THE INDIAN
GOVERNMENT DOING ABOUT THIS?
Plans to build a 100 smart cities
something that the BJP had
outlined in its election manifesto.
Union minister for housing and
urban development Venkaiah Naidu
told ET that along with building new
cities, old ones will be converted
into smart cities
The DMIC
Blueprint for
Seven Cities
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need of urban renewal. Do we really want to
put financial resources and bureaucratic
bandwidth behind creating brand new cities?
The choice is this: do you want to have anoth-
er baby or adopt an orphan?
Beyond the Hype
Globally, greenfield smart cities are still
experiments in progress. Their financial
models are untested and breakevens a long
time away. There has been considerable de-
bate on whether smart cities are a passing
fad. In a debate in The Economist last year,
Anthony Townsend, a researcher who spe-
cializes in new technology in cities, had this
to say about smart cities: in their rush to
leap into a well-planned digital future, the
designers of these prototypes have ignored
historical experience, how people shape cit-
ies, and the messy and organic nature of ur-
ban development. Sterile utopian enclaves,
they have failed not only as real estate devel-
opments but also as incubators of future ur-
ban lifestyles.
Simply put, researchers are asking if smart
cities put technology as the prime catalyst of
change and not people. My fundamental
problem with the smart city model is the as-
sumption that a city can be built with technol-
ogy and...technology alone. Cities are built
and shaped by people, says Datta.
Land acquisition is another problem that
new cities are likely to face. In Dholera, farm-
ers from 22 villages have already formed
groups to protest the acquisition of fertile farm
land for industrialization, says activist Sagar
Rabari of Jameen Adhikar Andolan Gujarat.
More importantly,
even if India builds
new cities, can it
manage them effec-
tively? For that, India
may have to get some
structural fixes in
place. India has two
tiers of governance
central and state which work in parallel.
There is no concept of city level governance
in India. City mayors are not powerful in In-
dia unlike the rest of the world. Indian cities
dont decide their own destiny. That needs
to change, says Gulabchand.
A hundred smart cities may sound like a
woolgatherers wishlist, but the good news is
the intent behind that vision and the gov-
ernments realization that India badly needs
to overhaul its urban infrastructure. As one
analyst who did not want to be named sums
it up: If we manage to renew even 10 of our
tier II cities in the process, it would mean a
great deal for India.
arita, 35, is not keen to move out of Rakhi village locat-
ed within Naya Raipur, the new capital city of Chhat-
tisgarh being built on an area of 8,013 hectares. Sarita
and her husband, a vegetable vendor, are not quite
sure about living a life in one of the tiny 400 sq ft flats
built by the Naya Raipur Development Authority
(NRDA) in a newly constructed resettlement colony
within the new capital city.
We have nothing against the compensation package per se. But can we
get this kind of fresh air in a closed flat, asks Sarita. Her friend Leela and
most others from her village have already moved out
of the village, and are now living in government-built
houses located a kilometre away. Leela says her family
received a compensation of `6.9 lakh per acre for
their two acres, with a written commitment from the
authority that her family would receive `15,000 per
acre for the next 20 years with an increment of `750
added annually.
Naya Raipur, which will be fully functional only in
2031 and is expected to house 5.6 lakh people by then,
may offer the new government a few lessons as it goes
about translating its vision for 100 smart cities into real-
ity. There are reasons to believe that
the new governments plan to build
100 new cities has its origin in Naya
Raipur. Prime minister [then chief
minister of Gujarat] Narendra Modi
visited the city in 2012 and he tweeted
about it too, in the context of Varana-
si, says N Baijendra Kumar, principal
secretary to the Chhattisgarh chief
minister and chairman of NRDA.
As the Naya Raipur experience re-
veals, the biggest hurdle to building a
new city in India is the process of ac-
quiring land and resettling existing vil-
lagers. We made a conscious decision
of not disturbing 44 out of 45 villages
located inside the city. We have up-
graded their infrastructure without
dislocating the villagers. In case of one village [Ra-
khi], the rehabilitation was necessary, as the village
is located too close to the new mantralaya [secretar-
iat], Kumar adds.
As world-class amenities including star hotels, an
18-hole golf course, a convention centre, an IT spe-
cial economic zone, shopping malls and university
complexes are being built in the new city, villagers
with land are turning into crorepatis overnight.
Meet Jodha Ram Sahu who happily moved into a 1,000 sq ft home after
surrendering 18 acres of land that he and his family had in Rakhi village. Sa-
hus compensation: a cool `1.25 crore. I utilized part of my compensation
to buy 28 acres of agriculture land, 30 km away from here. Those are interi-
or areas, but with this new city becoming fully functional here, that land too
will fetch higher prices, Sahu says.
Officers and ministers have fully operational offices in the new city. The
Jindal Group has acquired 34 acres of land in the new city and is building its
state corporate office. Among the public sector companies, Container Cor-
poration of India (Concor) that comes under the administrative control of
Indian Railways has bought land to build an office in the new city. As more
infrastructure gets created an underground electricity and telecommuni-
cation network, amongst other projects more companies will follow.
Inside Naya
Raipur, the new
capital city of Chhattisgarh
that is still a work in progress
:: Shantanu Nandan Sharma
A
B
R
A
V
E
MASDAR CITY SONGDO
N
E
W
W
O
R
L
D
S
cover story
JUNE 22-28, 2014
11
Whats happening beyond India
These cities are being built from scratch
WHERE IS IT? 17 km east of Abu Dhabi, near
Abu Dhabi Airport
HOW BIG IS IT? 6 sq km
WHO OWNS IT? Masdar, a 100% subsidiary of
Mubadala Development Company, an Abu
Dhabi government vehicle
WILL BE READY BY: Construction kicked off in
2008. The cost of the city is expected to be
upwards of $19 billion and will be ready
some time between 2020 and 2025
USP: Mazdar city will be the hub of a
cleantech city. The International Renewable
Energy Agency, Siemens, GE and Mitsubishi
have already signed up as tenants
HOW MANY PEOPLE WILL LIVE IN IT?
Over 40,000 will live in Masdar and 50,000
will commute to work when it is completed
WHERE IS IT? 65 km southwest of Seoul
HOW BIG IS IT? It was built on 1,500 acres
of reclaimed land
WHO OWNS IT? Gale International, Posco
and Morgan Stanley Real Estate are
developing Songdo
WHEN WILL IT COME UP? Construction of
the $35-billion project began in 2004;
expected to be completed by 2017
USP: Likely to become Koreas premier
international business district and one
of Asias largest green business districts
HOW MANY PEOPLE WILL LIVE IN IT?
By 2017, 65,000 residents are expected
to live in the city. Three lakh people
are expected to commute to the city
for work
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vs
From Don McLean, who drove his Chevy to
the levee as he said bye bye to Miss American
Pie, to Bruce Springsteen, who loved a girl
for her Pink Cadillac with crushed velvet
seats, to Tracy Chapman, who asked her
man if his fast car was fast enough so they
could fly away, cars have been
celebrated in more songs
than the humble two-
wheeler (though folks
like Arlo Guthrie did
kick bike tyres). Oh,
not to forget the com-
memoration in a dozens
of movies, including the
animated Cars, in which
they star in the main role.
But somewhere down the road, it
appears the American auto indus-
try has hit a bump, dislodging a
few shibboleths in the pro-
cess. It has been coming
for years, but it has gotten
noticed only in the past
year or two.
In 2012, analysis of cen-
sus data by the University
of Michigans Transporta-
tion Research Institute
showed that 9.2% of US house-
holds didnt have a car, compared
with 8.7% in 2007. Just the year before, Fed-
eral Highway Administration data showed
bjects in the American auto industrys windshield
may be smaller than they appear, ran the opening
line of a recent story on the United States auto indus-
try. The narrative centred on the prospective decline
of the sector following the cooling of Americans love
affair with cars. Which is why, if you havent noticed,
Americans and indeed auto companies from the
rest of the developed world have begun flooding
India with their wares. By the way, this is not the first
sector where Americans have bequeathed their ex-
cess to the Third World: from smoking to consump-
tion of junk food, Americas hand-me-down gifts are
many, even as the US tries to clean up its own air and
body. Now thats a whole different story well tackle
another time.
But what if the object in the American auto indus-
trys windshield is not merely a shrinking domestic
market, but an even smaller foreign-minted vehicle
like say, an electric-powered two-wheeler? Would it
sell, and ride, in a country that is not only addicted to
gas, but has had a century-old love affair with the car?
As the Americans would say, geddouttahere! But
thats what this outrageous, audacious story is about:
An Indian company that thinks its elec-
tric two-wheeler can spark off a revolu-
tion in the US. Dream on, did you
say? Mahindra does.
Slowdown on the Highway
America is car country. From
the time Henry Ford knocked
together the first automo-
bile and it broadly coin-
cided with the discovery
of a vast trove of oil and
gas, America has been a
country on the move
on f our or more
wheels. Never mind
if only one or two
people were in it,
and never mind if the
vehicle was idle and
parked in a garage or
parking lot or the
street for 95% of its life
span (imagine an air-
plane being parked
for 95%; the airline
would go bust in no
time). No one ever
questioned thi s
model. Assembly
line production +
easy f i nance +
cheap gas + expansive
road network = auto
heaven. Whats there to
complain?
Driving, and first car owner-
ship, has been a rite of passage in
America. More songs have been written about cars
and driving in America than two-wheelers and riding.
going global
JUNE 22-28, 2014
12
:: Chidanand Rajghatta | Washington, DC
O
Mahindra in Michigan
Can the Indian automakers launch of an electric two-wheeler spark a change in
consumer behaviour in a country that has had a century-old love affair with cars?
The electric two-wheeler is targeted
at urban commuters and students
Anand Mahindra (centre) at the launch of
GenZe in Michigan in May this year
vs
going global
JUNE 22-28, 2014
13
that the percentage of people acquiring a
drivers licence in the age group 20-24,
when most Americans start to get behind a
wheel regularly, had fallen to 80%, down
from 87% in 1995. Several other data points
indicate that Americans, particularly teen-
agers, are driving less, getting their licences
later, and waiting much longer to purchase
their first car. The stigma about not having a
car is evaporating. In fact, it is entirely pos-
sible that over the next decade, owning a
car will constitute a new kind of stigma.
The reasons are not hard to find. From the
growing trend of urban living to rising price
of gas, from improved public transit to new
sharing paradigms like Zipcar (a car-sharing
company), individual car ownership is ex-
pected to continue declining. Unlike in In-
dia, where two-wheeler ownership picked
up the slack of four-wheeler unaffordability,
Americans have never embraced the hum-
bler vehicle, although the biker culture is al-
most as old as car craze. But high-end bikes
cost as much as a car. So is there a market for
a low-end two-wheeler, an electric driven
one, that addresses the needs of the college
crowd or urban sophisticate who dont have
to go roaring down Hwy 66?
Plugging Into US
The folks at Mahindra in India were working
on a new electric bike for an overcrowded
domestic market when the thought struck
its chief honcho Anand Mahindra: If we are
going to do it, why not do it in a completely
new way, like a start-up, and why not in
America? In some ways, it was counter-in-
tuitive an electric two-wheeler in a coun-
try of fast cars, cheap gas, and wide roads?
But as narrated above, this paradigm was
being undermined by newer develop-
ments, and what better way for a young up-
start Indian company to get a piece of action
at low cost, and stay ahead of the curve, par-
ticularly when the domestic economic envi-
ronment was so tough?
So we shipped off a young, bright team
from India to Silicon Valley to get a sense of
the ecosystem there, Mahindra recalled
in a recent interview, as the first Mahindra
GenZe was unveiled at a new facility in Ann
Arbor, outside Detroit, ground zero of the
American auto industry. We figured that
if we were to sell in America, the product
had to be conceived, designed, and Made
in America.
It was an outrageous
idea, but Anand Mahin-
dra is not short of au-
dacity. A gracious and
charismatic man who
can switch from desi
lingo to Amerispeak in
a jiffy, he is, after all, a
product of both the
American and Indian
system, having gradu-
ated from Harvard Col-
lege and Harvard Busi-
ness School before tur-
bo - c ha r g i ng t he
company founded by
his Ludhiana forbears
into a $16-billion enter-
prise. He has the Punjabi-American appe-
tite for risk, and few ventures have proved it
more than bringing his tractor manufactur-
ing operation to the home of Caterpillar and
John Deere. Mahindra, he boasts, is the
best-known Indian brand in rural America.
Touristy Indians may not see it in New
York or San Francisco, but trawl around in
middle America and you are
more likely to see billboards
for Mahindra tractors than
Tata products, although the
latter is regarded as the In-
dian titan in America. We
are selective in the way we
approach the market, says
Ruzbeh Irani, Mahindras
chief group communica-
tions and ethics officer,
pointing to their advertising
on the conservative Fox net-
work and sponsorship of
events like Nascar and Na-
tional Bull Riding, stuff ur-
ban America may turn its nose up at. Its
the kind of smart, discriminating approach
Mahindra hopes to bring to the marketing
and selling of the GenZe, which will be
manufactured at its 37,000 sq ft facility in
Ann Arbor, down the road from Detroit. A
companion North American Technical
Center in Troy, employing more than 100
engineers, will develop a range of vehicles
for Mahindra Global Automotive, although
GenZe is the immediate focus.
Targeted mainly at students and urban
commuters, the GenZe is an electric pow-
ered two-wheeler that Vish Palekar, CEO of
the spin-off, calls a pick-up truck on two-
wheels. It has a specialized storage com-
partment (useful for students and spacious
enough for three grocery bags) and a de-
tachable lithium-ion battery that can be
charged from any standard electrical out-
let. Which means that although its range is
only 30 miles (around 50 km), you can
charge the battery while in class or library,
if your overnight charge has taken you more
than you anticipated.
Ticking the Right Boxes
The really nifty part is GenZes weather-
proof 7 Cruise-ConnectTM screen, which
is much more than an instrument panel. It
shows your speed, energy consumption,
battery status, estimated range, as well as
how much carbon dioxide you helped re-
duce by riding a GenZe, something which
its executives think will appeal to an envi-
ronmentally conscious generation. You
can even charge your laptop and phone
along the way, boasts Mahindra. With the
top speed set at 50 kmph, most states in
the US will not require a motorcycle li-
cence to operate it.
Initial reviews and inquiries have been
promising, particularly considering the
price point and Mahindras efforts to tie up
financing for students through banks and
local credit unions. Company officials
would not discuss the exact price but the
market scuttlebutt is that it will be around
$3,000 half the price of a Segway (a two-
wheeled, self-balancing, battery-powered
electric vehicle) which is typically what a
college student might spend on a decent
used car, with the added burden of gas, re-
pairs, insurance and the like.
Cooool! When did you say it is being
launched? a nephew who studies engi-
neering at Texas A&M asked me, when told
about the new toy in the offing (Mahindra
has since opened its first showroom in Palo
Alto, near Stanford University, and has be-
gun accepting bookings). I hope you have
booked one for us, said the wife, who, de-
spite two cars at home, prefers to metro to
her yoga class and from there on to her of-
fice, to escape traffic and parking issues.
Still, it is far from certain that the product
and its initial appeal will meet both the ex-
pectation and requirement without further
tweaks, including the mileage issue. But
Mahindra is evidently looking beyond just
GenZe and beyond even further editions of
the product. The company clearly wants to
erase a derailed 2010 foray to sell its India-
made pick-ups and SUVs in America amid a
dispute with its distribution partners. This
time, it wants to enter from the ground up.
The cachet of a product conceived in Cali-
fornia and made in Michigan is some-
thing few companies can boast of, and at a
fraction of the cost it would have taken to
set-up a four-wheeler facility, Mahindra has
got its nose in the Michigan tent. Theres
more than a sniffing chance it will make
something out of it.
With a top speed of 50 kmph, the GenZe wont require a licence in most US states
Mahindra has an
appetite for risk,
and few ventures
have proved it
more than
bringing his
tractor
manufacturing
operation to the
home of Caterpillar
and John Deere
T
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T
I
M
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S
O
F
I
N
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I
A
e
P
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P
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R
15 14
JUNE 22-28, 2014 JUNE 22-28, 2014
5 - 1 4 - 0
2 0 1 4
&
4 - 0
2006
4 - 0
2010
8 - 0
2002
2014
2010
2
0
0
6
2002
2
5
3
9
46
49
2014
414
2010
325
2006
352
2002
357
MIROSLAV KLOSE
(GER)
PAULO WANCHOPE (CRC),
TOMAS ROSICKY (CZE),
MIROSLAV KLOSE (GER), TIM CAHILL (AUS),
OMAR BRAVO (MEX), DAVID VILLA (ESP)
GABRIEL HEINZE (ARG),
CLINT DEMPSEY (US),
STEVEN GERRARD (ENG)
AND 22 OTHERS
2014
3
goals
THOMAS MUELLER
(GER)
2010 2006 2002
1
2
3
goal each
goals each
goals
ANALYS I S BY GRAMENER. COM At the end of first 16 matches in the group stage; comparing all the World Cups from 2002 Novice countries are those making their World Cup debut
2014
1
2010
2 20
02
0
2006
2
BRA, HON, BIH
2014
3
2
US, POR
2002
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2006
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2010
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B
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a
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as the least interestin
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ga
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1
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atch
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DRAWS 1-0 WINS HIGHER THAN 1-0 WINS
2014
2010
2006
2002
2014 2010 2006
BOSNIA AND HERZEGOVINA
ANGOLA, COTE D'IVOIRE, CZECH REPUBLIC,
GHANA, SERBIA AND MONTENEGRO, TOGO,
TRINIDAD AND TOBAGO, UKRAINE SLOVAKIA
2002
CHINA,
ECUADOR,
SENEGAL,
SLOVENIA
h
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ed 1
2014
435
2014
470
2010
520
2006
578
2002
2010 2006 2002
49
2014
6
54
2010
1
70
2006
1
61
7
4
,
7
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2002
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H
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T
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R
t a recent round table meet in Delhi, the top management
of one of Indias largest marketplaces, Snapdeal.com,
were all smiles conveying how product categories sold
online are increasing and next on their list is selling bath-
room fixtures on the web store. The 30,000 sellers on
their platform will soon burgeon to more than 1 lakh. The
expanding online seller and buyer base is also revamp-
ing the website, from English only to offering Hindi and
Tamil interfaces as well. Around 60% of our sales are
beyond the top 10 cities. Our reach is more than that of
organized brick-and-mortar retail. We believe online
shopping business will be bigger than offline retail by
2015, said Kunal Bahl, co-founder, Snapdeal.com
whose list of investors include eBay, Temasek, Black-
Rock, PremjiInvest and other venture funds. Bahl feels
this growth will be driven mostly by tier II shoppers and
beyond. In these areas (like Mysore, Nagpur) organized
retail has limited or no presence.
In Mumbai, Kishore Biyani, founder CEO, Future
Group, one of the countrys largest brick-and-mortar
retailers, is unfazed by competition from online start-
ups. Online selling, the way venture funded start-ups
are doing it, is a gross margin negative business and
not sustainable. I dont see ourselves competing with
online sellers as both models online and offline
will converge. Not everything will be sold only online
or only offline.
In the $490-billion India retailing business organized
brick and mortar retail and online shopping account
for less than 10% or about $35-40 billion of the pie at
present. In a decade, consultancy firm Technopak esti-
mates organized retail both online and offline will
be a little over $200 billion and both formats are trying
equally hard to get a larger share of the buyers wallet.
The likes of Jabong, Flipkart, Amazon are honing algo-
rithms to sharpen their knowhow on what the shopper
is looking for; and the likes of Future Retail, Croma and
Shoppers Stop are moving to omnichannel models
selling both on and offline while improving the expe-
rience of shopping within their stores.
Says Ajit Joshi, MD and CEO, Infiniti Retail (which runs
Croma stores): In India people are yet to experience
good shopping [a mall experience and large stores]. Its
not that people will buy everything online. While there is
growing competition from online retailers, the brick-
and-mortar stores are also expanding. Croma has 97
operating stores, down from 101 six months back. Four
non-profitable stores were shut down.
Online vs Offline
In an expanding market both models have room to
grow, each offering its unique strengths and weakness-
es. Online scores on reach, shipping products to re-
mote corners of the country, while offline is a largely
urban, big city phenomenon. According to
Technopak, 56% of the business of organ-
ized retailers comes from top 24 cities.
While for webstores the buyers are
across the country.
Says Sachin Bansal, co-founder
and CEO, Flipkart.com: E-com-
merce solves the problem of ac-
cess by making millions of prod-
ucts available to shoppers with a
few clicks. Besides, online shop-
pers dont have time and place lim-
its. On the other hand people going
to shops get instant gratification, can touch and feel the
products; and for some brands, like Zara, buyers have
no choice but to purchase them offline. Adds Bansal:
Those who prefer to touch and feel products, and that
is still a majority of shoppers, will go to the shops.
Biyani of Future Group believes any product
that can be identified by a model number
will be sold more online than offline. For
instance, the Google Moto phones
were sold online by Flipkart and not
in any retail outlet.
While there is room for both
models to exist and expand, each
is looking at new ways to increase
clicks and footfalls. Online sellers
are adding new categories what
started with books and music now
includes furniture and jewellery. For
spotlight
JUNE 22-28, 2014
16
Brick & Mortar
The arrival of a slew of
nimble e-commerce
startups is making
traditional retailers rethink
their model and move
towards an omnichannel
strategy, of selling goods
both offline and online
I dont see ourselves
competing with
online sellers as both
models online and
offline will converge
Kishore Biyani,
founder CEO, Future Group
All brands like
Zara, to name
just one, are not
available online
Makes more sense
for perishable items
like grocery
Provide warranties on
big-ticket items,
something that you
dont always get online
Provides an
opportunity to
touch, feel, try
Delivery is
Immediate
The Offline Advantage
A
:: Shelley Singh
$34bn
in 2013
$147bn
by 2023**
Total retail*
business in
India in 2013
$490 bn
Size of organized retail
vs
*organized, unorganized and online
**projections