February 21, 2017

Speaking in Outlook Business Leading Edge 2017

23rd Feb 17

Thank you very much ma’m, Mr Rajan Raheja, congratulations to you and your entire team on the 10th anniversary, Ms Mahalaxmi, the Editor of Outlook Business, Mr Indraneel Roy, Vaidyanathan, you were talking about ‘e’ I thought you forgot to mention about e-voting. India was one of the first few countries to start electronic voting and I do hope all of you have voted before you came here. Otherwise, I would urge the organizers to allow a few people to go and vote and come back.
Lot of good friends over here, lot of colleagues, Ms Arundhati Bhattacharya, Mr Niranjan Hiranandani, Mr Ravi Uppal Bharatpuri, Pawan Goenka, Prahlad bhai is here, actually I know so many people here. And that’s why it’s something like coming back home, coming back to your own city. And, therefore, also a delight that our very own Outlook Business completes 10 years today, my compliments to the entire team there, the management team, the editorial team, ladies and gentlemen.
Subject is very interesting when you are trying to juxtapose working of government or politics, working of business enterprises and possibly also a magazine. To my mind, there is not so much difference in the principles behind the working of any of these organizations, certainly things have changed. Mr Bill Gates came and addressed us on transformative ideas on what India should look at in the days ahead and one of the things he raised is that with the advent of fourth generation of technology, the nature of work is going to change across the board. We are not going to have the same kind of work that was going on maybe a few years ago as we move along the technological ladder. And, in that sense, as Charles Kettering had said – the world hates change yet it is the only thing that can bring progress. And, therefore, all of us in our own way are continuously evolving and moving our own business models, moving what we are doing, changing the way we work, and really progress is impossible without change. And those who cannot change their mind really cannot change anything.
And, therefore, when we got this opportunity to be in government, very clearly we realized that unless we change the way things used to happen or the way things were happening over many years, we cannot bring about a transformation in India. And, therefore, disruption had to be the order of the day. And that disruption is only possible if we have certain sound principles around which we run the government.
I remember one of the biggest angst that most people had before Prime Minister Modi took charge was about uncertainty, about the fact that government was almost in a form of policy paralysis. And, therefore, one of the first and most important elements was that the country needed decisive leadership. I think Prime Minister Modi has redeemed himself well to some people, in fact, it sounds too decisive. But for any organization to succeed you need a leader who is willing to take bold decisions, who is willing to really be right there in the front, lead from the front. And I was just sharing with Ms Bhattacharya, Mr Rajan Raheja just mentioned to me that look if you really want to move the engine of the economy we need to work on NPA resolution. And I was sharing with Ms Bhattacharya that only last week we had a very very detailed analysis on what needs to be done to solve that problem and address that challenge in a holistic manner where Prime Minister was again leading from the front. And that’s the kind of leadership that Prime Minister Modi has been able to bring to fore. He’s been able to look at a root cause of what are the issues before the government, before policymakers, what is the cause of the problem, what is the cause of the situation? And after a root cause analysis really prioritize what needs to be done to address those problems.
In fact, one major element in the working of this government has been working with great degree of transparency. We have tried to focus on all our actions to see how transparency can be brought to fore, more and more engagement with the people, more and more sharing of information with the people so that they are empowered with data, people know what’s happening, everybody has an equal opportunity to participate in whatever is happening. And with that equal opportunity also you are able to reduce the discretion that used to be the order of the day once upon a time.
I still remember when the 204 coal blocks got cancelled; almost overnight I was stranded with the challenge of addressing the coal shortages. And when we came out with a new framework under which auctions would be the order of the day and starting from coal but ultimately every natural resource, every national asset can now only be given out through a transparent auction process. But when we form the final legal framework under which we would do it I remember on a Sunday afternoon flying down from Mumbai to Delhi, I reached there in the afternoon about 4 o’clock and then till midnight we sat in the Coal Ministry poring over the entire framework, the law, the rules, to see that there should be no discretion left so that even if the honorable Prime Minister tells me that I need to favour maybe Pawan Goenka, I cannot do it. There should be absolutely no discretion left in the framework and that’s the kind of effort that we have done over the last two and a half-three years.
Of course, in my own area of work I have tried to introduce innovative financing models where that could help us implement programmes to large scale, implement them effectively, more efficiently so that results can be faster felt by the people of India. I have often repeated the story of the LED bulbs, some of you have heard it please pardon me for being repetitive. But I do believe that’s one program that encompasses all the principles around which this government has worked and within that also demonstrates what potential, what game changing potential we have in India as a large market, as a big business opportunity. In fact, before our government came in, the country was barely having a .2% share of the world LED market. The government had a company called Energy Efficiency Services Limited which used to purchase these 7 W LED bulbs for about $4.5 (Rs 310). They would give a subsidy on that and then sell it to the consumers. In the year 2013-14, they had sold 600,000 (6 lakh) LED bulbs in the entire year.
When we looked at that programme, we realized the potential that that programme has to bring down carbon emissions by about 80 million tonnes a year if we replace all the bulbs in the country, the incandescent old bulbs that we used to use with LED bulbs, there was a potential saving of 80 million tonnes of carbon dioxide, there was a saving of about $6.5 billion annually on consumer’s electricity bills. And it would bring down the consumption of electricity by about 112 billion units, that’s almost 10% of India’s current consumption. And you will appreciate that the level of prosperity that large parts of India has lighting is the main usage of electricity. But at the speed at which it was going it could never have any game changing impact. And if the project was to be based on subsidies we could never scale it up to large levels. And we decided to do away with the subsidy. We decided to scale up the programme so that we could replace 770 million old bulbs with LED bulbs by 2019. And we did hope that we will be able to bring down prices with technological up-gradation, with honesty in our procurement. The entire procurement process is most transparent through, again your e-bidding and e-auction, to take a leaf from Vaidy’s statements. We improved on the financing pattern, earlier the government used to buy these bulbs and would pay over 5 years saying that we want to make sure the bulb works for 5 years.
And when I sat down with the industry participants, I realized that Rs 60 out of that 310 only reflected the additional cost and the risk elements that the suppliers were factoring in for payment coming in 5 years. We were able to scale up that programme and I am delighted to share with you, today, as against 600,000 bulbs in the year 2013-14, that same government company, it’s a government company mind you, working in all the constraints of the government framework, is selling 600,000 LED bulbs of 9 W now every day, 600,000 every day!
It’s only 2 years since we launched that programme, 1st May, 2015, I remember the first bulbs being sold. And the procurement price of 310 plus taxes has come down in our most recent procurement, and now we don’t procure a 7 W bulb but a 9 W bulb, 30% more lumination. The price is only Rs 38 – 88% deduction. But the suppliers don’t have to come to any Minister or any Secretary. All bidding is transparent, all tenders are issued through the net, all bids are introduced in the net, transparently released, all bids are announced in the public domain without the name of the bidder, of course. Payment is on the 30th day, you don’t have to ever go to anybody for payment, 100% payment on the 30th day through the RTGS, again e-payment. And we take a bank guarantee for ensuring the quality of the product; the quality checks are most strict. In fact, Secretary Muniz, the erstwhile Secretary of Energy in the United States, went all over the world showing the Indian specs and this Indian programme has been the most robust energy efficient programme anywhere in the country. And today, India’s share is nearly 16% of the total LED sales in the world, from .2 to 16%.
And this one government company, and maybe Outlook Business could do a case study on that, in terms of its ramp up of operations has sold 210 million bulbs in the last 22 months, 210 million bulbs. The private sector, of course, has also benefitted so if you open television I think you see more Syska LED ads than any other ad. In fact, I was very surprised, there’s nobody from my sector in your whole partnerships here. Whereas every programme these days I find there’s a lot of solar suppliers and LED suppliers.
The point I was trying to make, ladies and gentlemen, was this is an outcome-oriented government. Every action has to have a defined outcome. Every action has to be closely monitored. And I will share with you the way we have groomed ourselves or the way we also learn from the experiences of our leaders. Pardon me for being anecdotal but I think it helps you understand the mind behind the leadership or the mind behind the government. This programme had just got launched in early 2015 and I was having a meeting with the honorable Prime Minister on the progress of the coal block auctions. So I had gone to his home one day early morning. I was telling him what’s happened, how many blocks are auctioned, what prices we have got, well prepared with all my data and everything. Arundhati ji knows I am always full of data and statistics. And at the end of the conversation I was just about to get up and he says, ‘पियूष LED के कितने bulb बिक चुके हैं अभी तक? I was foxed absolutely. I didn’t have any clue at all what was the progress, how many LED bulbs. It’s the smallest of my actions in the entire Ministry under me. In fact, for the first 3 or 4 months, Rajanji I didn’t even know that this department reports to me. I became a Minister in May 2014, it was only in August that I got a cabinet note on energy efficiency. I said what have I got to do with this subject? They said no no, there’s a whole Bureau of Energy Efficiency under you. That’s the first time I came to know in August 2014 that this department reports to me.
And he’s asking me how many LED bulbs and I had no clue about it. I said sir, मैं चेक करके आपको बताता हूँ | He said, पियूष ऐसे काम नहीं होगा | I am sorry for the gentleman from out of the country but I will translate it. I was just using hindi to reflect on you his angst or his, let’s say, concern, when he said it to me. पियूष ऐसे काम नहीं होता है | The work doesn’t get implemented like this. He said unless you are going to monitor what’s happening religiously, and unless you hold people accountable for what they are doing, you will never be successful in getting outcomes out of your work.
And I remember I came back to my office that day, I got my whole young team together. And Pawan knows, Arundhati, some of you who have interacted with my team, know that I have a lot of young boys working with me. We got that whole team together and in one week they prepared a mobile app and I am just showing it to you so that to reflect on you how transparency and how open government can help. This gives you a real time data of how many LED bulbs are sold every minute, it updates itself every minute. It’s the Ujala site, Ujala as in light. And as we speak right now, 212,148,109 LED bulbs that EESL has sold, this is not the whole industry. The rest of the private industry figure is also… and the number is changing as we speak, so it’s one minute has got over. And on this site, it’s public, any of you can load it free of charge. On this site you can actually go to your state, go to your city and within that city you can ask for the addresses of wherever these LED bulbs are available by EESL. And if you touch the address which you think is closest to you it takes you on Google Map and directs you the entire journey and the time it will take you to reach that kiosk where you can buy the LED bulb.
Now that’s the thinking which has helped us to introduce, probably, business management practices in government, implement our projects to scale, work with the state governments and other stakeholders in partnership. All of this could not have been possible unless I got all the stakeholders onboard. After all, I can only sell this through the states and the DISCOMs. I can only bring down prices by talking to the suppliers of these bulbs. So it’s been a complete partnership of all stakeholders truly reflecting the spirit of cooperative federalism which has helped us do these kind of game changing and transformational initiatives. Along the line, time-bound execution has been a credo of this government that whatever we take up to do in a certain timeframe, we focus on getting it done.
I will share another very recent example. On the 17th we were doing this meeting about which I just mentioned. At the end of the meeting, over a cup of tea I just mentioned that we need to have a similar focus on electric vehicles. This happened on the 17th, we wound up at about 2.15, so 2.15 in the afternoon I just happened to mentioned that we need to have a similar focused approach on what we will do to, on the electric vehicles. And I am sorry Vedi, I am picking up from where you left, the ‘e’ has become the focus of my talk, though it was not what I had planned. But I said we must look at electric vehicles also more holistically and move it out of the framework where today when I go to buy a hybrid car I get an Rs 80,000 subsidy or I buy an electric car, maybe a lakh and a half or whatever. That is only a constraint to the success of this project. We can’t scale it up then. We know we have a thousand crores so so many cars is the maximum we can do.
So I just said we need to have a brainstorming to address this issue. You won’t believe it, ladies and gentlemen, 17th evening, my office had a notice from the Prime Minister’s office that on 23rd of this month you have to make a presentation before the honorable Finance Minister and three other Ministers to discuss about electric vehicles. That is responsive government. That is a government which is willing to take on aggressive targets, take on game changing and innovative new projects, take on projects which have a dimension which goes far beyond a current benefit or a political benefit. After all, these electric vehicles is not going to give me any political dividend in the elections going on or even in the ‘19 election for that matter. But it will be a game changing programme for India in terms of our reliance on imports for oil and petroleum products, in terms of leading the world in our fight against climate change as a responsible global citizen, in terms of, in the long run bringing down cost of transportation. Because I am personally convinced, electric vehicles are going to bring down, significantly, the cost of transportation.
I don’t know if Tatas will be very happy about that unless Tatas is also willing to evolve into electric vehicles Mr Upal. But the bigger idea is that this country is full of opportunities, full of new ideas that the youth of India have, that the younger people are brimming with. The question is, are we willing to think out of the box? Are we willing to look at government just like we would look at any other business enterprise? Are we determined to make a difference to the lives of our people? Are we willing to reinvent the way things have been done for, maybe, 7 decades of independence? Are we willing to redesign our lifestyles around a more responsive citizenship or a more responsive citizenry? Are we willing to reform the way governments work, the way businesses work?
And demonetization, in some sense, was one step towards that reform we are looking for in this country, moving the informal economy into the formal economy, bringing down tax evasion which instead of becoming a norm should become an exception and making more and more people responsive towards paying their taxes honestly. And are we willing to restore India to that old glory which many of our older generation people often talk about, that “sone ki chidiya” that India was once upon a time and that we, each one of us in this room desires to see India as.

Thank you very much ladies and gentlemen.

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