Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Wednesday, 30 November 2016

Automation is Inescapable



In 1952 , American technocrat / visionary , John Diebold wrote a book titled :

  AUTOMATION

Since then , it has remained some kind of a " Bible " for enthusiasts of automation ( - that includes , me ! )

Fast forward to 2016 ( 64 years later )

A few days back , here is what the World Bank President , Jim Yong Kim said ;

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"  In large parts of Africa , it is likely that technology could fundamentally disrupt this pattern .

Research based on World Bank data has predicted that the proportion of jobs threatened in India by automation is 69 % , in China it is 77 % and in Ethiopia the percentage of jobs threatened by automation is 85 %

Now , if this is true , and if these countries are going to lose those many jobs , we have to understand what paths to economic growth will be available for these countries and then adapt our approach to infrastructure accordingly

Mechanization and technology have disrupted traditional industrial production, upended manual jobs and call time on the work that has been done by generations of families

This trend is not isolated to the US . It is affecting people in countries everywhere  "


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QUESTION :

NDA government is trying hard to raise share of Manufacturing in our GDP , from current 16 % to 25 % , as is the case with most developed / industrialized countries


It is hoped that such a transition will enable us to provide jobs to those 12 million youngsters , joining our " Army of Unemployed " , each year


But what if that increase in " Manufacturing " comes about through vastly increased " Automation " ?


In that case , instead of being able to provide jobs to those 12 million , we may end up laying off / retrenching , even those who are currently engaged in " Manufacturing " !


Increased competition forces manufacturers to constantly cut costs


And since , they have very little scope to cut costs of land / machinery / materials / money ( interest ) etc , they focus on ways and means to cut " Labour Costs ( Salaries / Wages ) " - often through replacing humans with automatic machines


And wherever they can , factories are moving out of the cities / countries ( those " high wage islands " ) to areas where labour costs are still low !



POSSIBLE  ANSWERS  :

*   Reduce the " Cost of Money " , through lower Interest Rates to Companies
     (  This is expected to happen soon since the banking system is flush with funds after the
      recent demonetization )


*   Reduce the " Cost of  Land " , by mandating that the farmers providing their lands to
     become " Equity Share Holders " in all new projects ( whether Public Sector or Private
     sector / Infrastructure or Factories )


*   Reduce " Cost of Machineries ", by providing accelerated depreciation for new projects
    This will also spur the demand for Capital Goods, boosting " Manufacturing Employment "


*   Reduce " Cost of Materials ", by reducing GST rates from 18 % to 12 %



*   Reduce " Cost of Manpower " , by raising tax exemption limit to Rs 10 lakh

    By increasing " Consumer Surplus " , this will reduce wage-increase demands



*   Reduce " Cost of Corruption " by eliminating corruption ( embedding RFID chip in notes )


*   Reduce " Cost of Inflation " by limiting  " Annual Wages-Salaries Increases " to 75 % of
    the preceding year's GDP number ( ie: if GDP for 2015, is 8 % , maximum salary / wage
   increase that can be granted on 01 April 2016 , will be 6 % ) . 


This mechanism will set in
   motion , a VIRTUOUS CIRCLE , in reduction of CPI / WPI !



In short , we must make ours, a " Low Cost Economy " as far as " Manufacturing Sector " is concerned


But to save jobs , the above mentioned measures won't suffice !


That would require Indians to compete with the jobseekers around the World - compete with the jobseekers everywhere , in their own countries !


It is going to be a " Dog eat Dog world " where it will be " Survival of the Fittest " !


That would require us to turn India into " Back Factory of the World " described in my following blog ( sent as email to NDA Ministers / Secretaries / MPs / MLAs )


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Wednesday, 9 September 2015

" BACK FACTORY " OF THE WORLD ?


China is known as the " Factory " of the World 

India is known as the  " Back Office " of the World 

Can India become the " Back Factory " of the World ?


Wrong question !


Right question is : WHEN can we become the " Back Factory " of the World ?


Answer is " hiding in plain sight " !


This week , an astronaut , sitting in a satellite 400 km above the earth and hurtling through space at 16,000 km per hour , operated a robot on the earth


Earlier , scientists sitting in NASA space centre or  in Shri Harikota space centre , have operated Mars Rovers / MOM ( Mars Orbital Mission ) remotely


From a distance of millions of miles


And soon , astronauts  will be sending emails to earthlings from millions of miles away , using " Space Internet " on their Mobile phones 


Invariably , each such team of scientists , comprised Indians !


So , WHEN can our scientists - and software Start Ups - enable Indian workers , sitting in Hyderabad / Chennai etc , to operate / manipulate , machinery in factories of Europe / America / China ?


I believe this can become a reality by 2020 , if Central Government and State Governments , just get out of the way of our scientists / Start Ups and leave them alone !


Then tell them :

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" You are our next generation of Freedom Fighters . Free our millions from 
poverty / starvation / jobless depression / ignominy / suicides


Like war - ravaged people of North Africa , Indians cannot invade Europe / Australia / Canada , in search of jobs / better life


We depend upon you to bring the jobs to India - jobs such as ,


  *   Operating Machinery in Factories abroad

  *   Controlling Air Traffic at Airports around the World

  *   Operating upon patients in Hospitals , all over

  *   Teaching students in Schools , in remote Africa

  *   Any job that currently requires immediate presence of a worker


And , if you set up a " Back Factory " , you don't need to pay Corporate Income Tax for next 10 years !


Simply register on web site of Income Tax Department as a " Back Factory " owner and file annual " Zero Corporate Tax Return "

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When this happens , 


Millions of skilled Indian workers will operate factories around the World , 
    sitting in , internet connected " Back Factories " in small Indian towns


Foxcon will not need to replace its high-wage Chinese workers with one 
    million robots ( as officially announced sometime back )


    At half the wages of those Chinese workers , Indians will operate Foxcon
    factories , all over the World , remotely !


" Contract Labour Act " will need to be replaced with " Back Factory " Act 


*  " Minimum Wages Act " will need to be scrapped !


*   India will not need to fight with WTO on " Manpower / Service Exports " 


*   " Make in India " will morph into " Make from India " 



I hope NDA Ministers and members of NITI Aayog will ask , Narayan Murthy / Sam Pitroda / Azim Premji / Sundar Pichai / Satya Nadela / Ray Kurzweil etc :



"  How soon can this be done ?  How can you help ?  "

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01  Dec  2016

www.hemenparekh.in / blogs








C(l)auses of Corruption ?



Mumbai Mirror ( 21 Nov 2016 ) , carries a news report , titled :

State to drop cost escalation clause from govt contracts "

Parts of this report read :

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The state will soon remove cost escalation as a clause from all government contracts to curb corruption and prevent wastage of taxpayers’ money.


Contractors are notorious for submitting a
lower cost estimate for an infrastructure project and later demanding additional funds to complete the work. They misuse the clause and bribe government officials to get the extra payments cleared, activists allege.


Chief secretary Swadheen Kshatriya told Mirror the proposal to strike off the cost escalation provision would be discussed at a meeting this week.


“ We will be taking two decisions. One is to do away with the
cost escalation clause and second is to have fixed fees for architects in projects and not let them correlate percentage wise,” he said. “ The escalation clause is the root cause of many problems.”


Some officials are concerned that if the provision is dropped, it may lead to higher initial quotes from contractors.


But Kshatriya said: “Let them be higher at one point, but later there should not be a problem. There has to be a
concept of total cost.


Nearly four decades of experience has shown that escalated prices do not give an idea of how much a project will eventually cost. The final quote must give the government a fair idea about the cost.”


Currently, the architect’s fee also goes up if a contractor revises the project budget. The Devendra Fadnavis government wants to delink the two and fix the architect’s charges.


“We are looking to get this cleared soon. The ideas have been discussed in coordination committee of senior secretaries,” Kshatriya said.


Additional chief secretary (finance) DK Jain said the plan was being formalised.


Former IPS officer YP Singh, who has unearthed many scams, welcomed the step.


“The Bandra-Worli Sea Link is a classic case of cost escalation. It was estimated to cost Rs 400 crore, but the MSRDC ended up paying Rs 1,600 crore, including interest. The public is also charged a toll,” he said.



“To finalise an agreement at a certain amount and disburse another amount to the contractor is against the tendering principles.”


The costs of many of the state’s dams also ballooned in what is now known as the
irrigation scam.


“The cost escalation policy is a major driver of corruption. Every single contractor delays projects and then jacks up prices, making a farce of the entire the tender process,” Preeti Sharma, national spokesperson of the Aam Admi Party.


Activist Anjali Damania also welcomed the government’s decision, but said it may not be enough as contractors and corrupt bureaucrats would eventually come up with a workaround.


 “A third-party audit by a reputable company or an institute should be mandatory [ for every government contract ],” she said.


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Dear Shri Devendra Fadnavisji ,


Although my following suggestion ( email )  was sent to  Chief Ministers of all the States , you are the only one to have acted upon it !


While congratulating you - and your team of Secretaries - on this excellent initiative , I request you to also amend the other " Clauses " ( other than escalation clause ) , listed in my email - especially those pertaining to ( willful ? ) delays on part of the concerned officers of the government in granting various permissions / clearances / NOCs ..etc


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Sunday, 6 July 2014

The Invisible Corruption



WHY  INVISIBLE  ?

Because it is cleverly camouflaged in the " Terms of Contract " that companies sign with Central Government / State Governments / Municipal Corporations / umpteen Government Agencies


This invisible corruption is rampant in Infrastructure Projects that get spread over months / years


And every possible trick / excuse ( officially called " Reasons " ) is used to ensure that these Projects get delayed as much as possible !


Examine carefully and you will find that the more a Project  gets delayed , the more that Contractor stands to gain ! Anyone believing otherwise , has got to be naive  !


HOW  ?

These contracts contain " Cost Escalation Clauses " which decide the extra / additional amounts payable to the Contractor , over and above the ( so called ) " Fixed Price " quoted at the time of tendering

Under these clauses , the Contractor is eligible to claim / demand extra payments , whenever ,


SOMETHINGS THAT  HAPPEN 

   #   costs of certain " Inputs " go up above a certain agreed level , eg :

    *    Prices of Raw Materials

    *    Prices of Water / Gas / Electricity

    *    Cost of Labor

    *    Foreign Exchange Rate

    *    Consumer Price Index

    *    Interest Rate


    If any of these go up above certain agreed levels , the quoted price to go up by X / Y / Z amount , as per the Formula which determines the % age contribution of these elements , in the quoted price


SOMETHINGS  THAT  DO  NOT  HAPPEN

   *    Environment Clearance for the Project

   *    Land acquisition and Handover to Contractor

   *    Hundreds of permissions from dozens of Govt Depts/Muni Corporations

   *    Issue of Import Licenses

   *    Release of Foreign Exchange

   *    Issue of NOC from umpteen departments

   *    Issue of Compliance Certificates from various departments

   *    Approval of Designs / Design Change Requests ( from Govt as well )

   

If any of these are NOT issued / given by certain " Dates "  ( very easily managed  !  ) , then the quoted price to go up by X / Y / Z  amount


Invariably , these clauses are heavily  tilted in favor of the Contractor


And equally invariably , colluding Government officers / bureaucrats / politicians , responsible for drafting / approving these " Clauses " , leave them vague !


This is apart from framing the Tender Specifications in such a manner that only a certain preferred bidder will qualify !


If you doubt what I have said , then just file a RTI application , asking for a copy of,

Original Tender Document

Final Contract

*  Number of Price Revision Requests received / granted


for any project of your choice  !


If Shri Narendra Modi is keen to reduce corruption , he should start by instituting

MODEL  INFRASTRUCTURE  PROJECT  CONTRACT ,

which clearly spells out what price / time revisions can be granted and when


At the same time , internally , there must be a provision for DEMOTION / PENALTY for those officers who fail to give permissions / approvals / NOC etc, by specified dates ( milestones for the project )

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01  Dec  2016

www.hemenparekh.in / blogs



Tuesday, 29 November 2016

One Nation , One Vote ?



For the past few months, Shri Narendra Modiji has been requesting all concerned to debate:

" Should we not have simultaneous polls on the same day , both for Lok Sabha and all the State Assemblies ? "


He would like all citizens to express their views on this , even as he tries to get a consensus on this issue from all political parties , whose whole-hearted cooperation in this is essential since this reform would require amending the Constitution with two third majority


I suggest that NDA government , go about this process as follows :


AWARENESS  CREATION  PHASE  { Now - March 2017 }

Publicizing ( in Newspapers / TV / Social Media / Government web sites / Hoardings / Radio etc ) , the advantages / benefits of this reform

Debates in Town-Hall type of meetings all over the country

Debates in Schools / Colleges / other Educational Institutions

Competition among Start-Ups / Entrepreneurs for creation of Mobile App for " Opinion
    Survey " and selection of winning app {  #OneNationOneVote  }



OPINION  GATHERING  PHASE { 18 - 19 - 20 th APRIL 2017 }

*   Exhort citizens to download mobile app {  #OneNationOneVote  } and record opinion
     ( app can be downloaded ONLY ONCE on a given smart phone and self destructs after a
       single use . Additional security features can be incorporated to prevent duplicate use
       eg: Aadhar Card Number )

*   Those not having Smart phones can log in at the Election Commission web site ( Aadhar
     No and Voter Card Number ) and give their opinion

*   App will stop working on 21st April

*   Software will display the OPINION SURVEY results ( on Election Commission web site )
    on 22nd April . The results will also be viewable through the App on mobile phone



#   CONSENSUS  GENERATION  PHASE  {  May 2017  }

*   Central Government to hold SEVERAL meetings of all political parties in which , the
    Government would ( step by step ) present ,

    #  Opinion Survey findings

    #  Provisions of the Constitution which would need amending - and its " wordings "

    #  Nature of amendments in State Laws ( if any )

    #  Time table / Schedule for implementation

    #  Logistics ( Manpower / Software / Hardware required )

    #  Onetime Cost ( expenses ) vs  Recurring Savings


*  Just as in the case of Lok Sabha proceedings , these meetings must be televised so that
   citizens get an opportunity to listen to the views expressed by the leaders of political
   parties



#   IMPLEMENTATION  PHASE  {  20 April 2019  }

*   Conduct simultaneous polls , using my earlier suggested app " VotesApp "

    {  http://myblogepage.blogspot.in/2012/12/votesapp.html  }



As far as the OPINION SURVEY is concerned , I suggest following questionnaire :
-------------------------------------------------------------------------------------------------------

Do you believe holding simultaneous polls for Lok Sabha and all the State Assemblies, on
    the same day , is desirable ?...............YES / NO


Do you believe simultaneous polls would result in less hardship for people ?......YES / NO


Do you believe simultaneous polls would reduce the cost of conducting elections ?
    YES / NO


Do you believe simultaneous polls would enable Administrations ( both at Center and in
    States ) to focus on matters of importance / priority to citizens ?.......  YES / NO


Do you believe such polls can be conducted much more efficiently / transparently /
    economically , using mobile app such as " VotesApp " ?................. YES  /  NO


Do you believe , use of Mobile App ( such as " VotesApp " ) would result in a huge saving
    due to eliminating the need for

    *    935,000 polling booths 

    *    1.7 Million EVM ( Electronic Voting Machines / each costing Rs 41,000 )

    *    10,000 tons of paper

    *    10,000 liters of indelible ink

    *    Deploying 11 million  Election Officials and Security staff

    *    Declaring holidays to enable 863 million citizens to go out and vote

    *   Millions of man-hours of advance preparation, stretching over one year

    *   Weeks of counting before declaring results for 5000 seats ( MPs and MLAs )
         .... YES / NO 


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I urge NDA Ministers / Secretaries / MPs / MLAs etc to look up my earlier blogs as follows :

One Poll  ,  One  Time  ( 06 Sept  2016 )

   { http://myblogepage.blogspot.in/2016/09/one-poll-one-time.html


One Day Polling is possible  ( 31  March  2016 )

  {  http://myblogepage.blogspot.in/2016/03/one-day-polling-is-possible.html  }


Honey ! I shrunk  the  EVM   (  21  Oct  2015  )

   {  http://myblogepage.blogspot.in/2015/10/honey-i-shrunk-evm.html }


#   ROMP - A Panacea ?  (  06  Aug  2015  )

   { http://myblogepage.blogspot.in/2015/08/romp-panacea.html  }


Filtering  Candidate  Information ?  (  18  Sept  2016  )

   {  http://myblogepage.blogspot.in/2016/09/filtering-candidate-information.html  }


Advantage  Incumbent  ?  (  05  Sept  2016  )

   {  http://myblogepage.blogspot.in/2016/09/advantage-incumbent.html  }


How  to  Save  Rs  5511  crore  ?  (  12  Dec  2015  )

  {  http://myblogepage.blogspot.in/2015/12/how-to-save-rs-5511-crores.html  }


A  Software  Powerhouse  ?  (  24  April  2014  )

  {  http://myblogepage.blogspot.in/2014/04/a-software-powerhouse.html  }

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In 2016 , " technology " is the MOST POWERFUL force which is re-shaping the social / economic / political behavior of our citizens .


Millions of our citizens , taking to Mobile Wallets / UPI etc , is an outstanding example of how smoothly / eagerly , they are " embracing " technology for their day to day transactions


And , in the process of " adapting " , they do not mind temporary inconveniences / hardships , for a long term benefit !  Just look at recent local body election results in Gujarat and Maharashtra !


The citizens , seem to be saying :

 " We are fed up of indecisive regimes of the past . Just decide something / anything . There is no way  we can get any worse . From where we are , things can only improve , if you decide "


No one understands this better than our " decisive " PM , Shri Modiji  !


And no one understands , as well as he does , the power of technology to improve lives of millions of poor Indians !

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30  Nov  2016

www.hemenparekh.in / blogs