Our Life, Our Times :: 44 :: Cry of the automakers

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Maruti Suzuki plant

Auto sales are not encouraging even in this festive season. Massive discounts and even new models have failed to increase the footfalls in the showrooms. The sector claims that volumes touched the two-decade low in July and is set to dive down further. Demands have remained subdued and according to the manufacturers like Maruti Suzuki, Hyundai, Tata Motors and Mahindra & Mahindra there has been a double digit fall in dispatches to the dealers.

The commencement of the festive season with the Ganesh Festival followed by Navratras has not stimulated the demand. Maruti Suzuki continues to suffer from a sustained crash in demand. The Company’s volumes fell 86% in August 2019 to around 98000 from around 145000 in the same month last year. No wonder Maruti Chairman is crying hoarse about the slowdown. The head of sales of the South Korean automaker Hyundai too said “the pain continues to haunt” and the footfalls in the show rooms have become scarcer. Overall the volumes have been negative. He came out with a new perspective that the sentiments are down despite two new entrants – South Korean Kia Motors and the British MG Motors – in the market. The two neophytes, however, have a strong waiting roster and are likely to eat into the market of the existing brands. Both the brands are expected to market their products at more than Rs.10 lakh. These may, therefore, eat into only the up-market segment, leaving the bread-and-butter segment untouched where sales refuse to pick up.

For that RC Bhargava of Maruti Suzuki provides supposedly cogent answers. According to him, cars are getting expensive and are no longer affordable. Even the cheapest model in the Maruti stable, the Alto 800, has faced a drop of 50% in demand. He says that the man who wants to graduate to a four wheeler from his two-wheeler finds the former has gone up and away – beyond his reach. Bhargava seems to suggest that the slowdown is only partly true. He feels, there are numerous other factors that seem to be at play among which mobility-sharing is certainly not one.

According to Bhargava, the factors like stricter safety and emission norms (BS VI), enhanced insurance costs and higher road taxes in several states have depressed the sentiments. He also said that at a time when automobile sales are at a historic low the hike in the taxes on petrol and diesel in addition to higher road taxes and registration charges has not helped matters.

One cannot perhaps agree with him when he says that the Indian car buyer is not like the European or the Japanese buyers the per capita income of whom is far higher. But, when it comes to regulating the system everybody wants the best regulations which push up the unit prices making them unaffordable. He feels the affordability of a product has to be seen in the context of Indian incomes. One might, therefore, ask whether to make vehicles affordable in India the government should allow manufacture of products that are shoddy, even those that are made by the foreign manufacturers who have set up shop in this country? How long are we going to be left behind advanced versions because of our low income? In that case we might as well revert to bullock carts or horse-driven carriages.

Even the argument that the price of the entry model too has gone beyond those who contemplate graduating from a two wheeler to a four-wheeler cuts no ice. Bhargava’s own Maruti Suzuki discontinued manufacture of the former entry level vehicle Maruti Suzuki 800 presumably for lack of demand. Even the production of Tata’s Nano that was specifically meant for this very segment had to be discontinued for severe attrition in its demand. Indians are an aspirational lot, they were more so till before the slowdown hit the country. Few, therefore, would like to be seen in a Maruti Suzuki 800 or a Tata Nano. The fall in demand of Alto 800 could well be because it is now identified as the entry level vehicle from the Maruti stable in which many on-the-up individuals feel shy to be seen in. We Indians keep a keen eye on others, especially our neighbours, so that we show off ourselves as better than them. It is nothing but a proclivity towards one-upmanship.

Although with the prevailing frequent jams on urban roads one tends to think that the downturn is because probably the country has reached a point of saturation in so far as personal vehicles are concerned. But that is not true as, at 22 persons per thousand owning cars (in 2016), India is far behind Europe and America where car ownership is close to almost hundred percent. But if and when we attain the vehicular saturation as seen in the US God alone knows what will happen to our mobility. People would not be able to go about their businesses, policemen would not be able to chase criminals, fire services would not be able to reach the site of the fire and people are likely to remain rooted wherever they happen to be for reasons of massive traffic jams. 

Obviously, we are presently better off though now and then we come across news of jams here and there. One feels the country will do well to shun parity with the US or European countries in terms of number of cars per thousand heads. The urban scene in most of these countries is revamped and is generally a couple hundred years old whereas even the recently built roads in our cities cannot take so many automobiles – big or small. These constraints have to be acknowledged and not ignored.

We have passed through a severe downturn in the automobile industry and yet one sees reports of high-end luxury cars costing a crore or so descending on the market. A recent report said the Swedish automobile giant Volvo is putting out two luxury sedans/SUVs for the well-heeled costing more than a crore. As already stated Kia and MG Motors have accumulated a healthy waiting line-up. Reports have been seen of Mercs, Audis, BMWs of the luxury segment doing well. Quite clearly, it is the bread and butter segment that has been hit hard.

 But that too is likely to witness a turnaround soon as green shoots are now visible. The farm sector is progressively showing greater strength after a very generous monsoon and, hopefully, it will stimulate the entire economy triggering a general revival. One cannot forget that it was the automobile sector that the country rode to a double digit growth rate. Surely the growth wil return; it is only a matter of time. As economists say downturns and upturns are cyclical and, generally, one follows the other, mostly after reasonable gaps

*Photo from internet

Memories of an ordinary Indian :: 29 :: On to UPSC in New Delhi

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Dholpur House

After Jabalpur I had quite a whirl. I went to Bhopal on a short posting from where I went to Jammu & Kashmir (about which I have recorded my memories quite extensively). From J&K I was sent again on a brief posting to Visakhapatnam from where I came up north and landed in Delhi. This was a posting that was significant for me as it was on deputation in the Union Public Service Commission. Initially it was for three years but lasted for more than four years.

It is here that I learnt a lot about the methods and office procedures used in the Government of India. The Commission is meant for recruitment to the superior services of the Government of India by the methods of competitive examinations, interviews, promotion, contract and deputation from other organizations including those of the government. Located in the Dholpur House on Shahjehan Road well known to the civil service aspirants I was in little awe of the organization. It is through this formidable organization that two of my older siblings joined the civil services after qualifying in the tough written examinations followed by rather testing interviews. Later I, too, followed them and joined the civil services. I spent around four years and seven months in this remarkable organization, initially as Under Secretary and later as Deputy Secretary. The Chairman of the Commission was one Mr. Damle of the ICS (the ICSs were still around in 1970s) and the Secretary was one Mr. Rajendra Lal who was known for his penmanship all over the Government of India. It was from him that I learnt the art of drafting, that is, whatever little I know of it. In those days we were only three deputy secretaries and one Controller of Examinations in a higher rank. There were about half a dozen Members of the Commission who were either retired civil servants or distinguished men from other areas, including the defense forces and various scientific fields.

After a brief induction training I was placed in the Appointments Wing of the Commission. I had two sections under me, both headed by very competent section officers and I worked under the supervision and control of Deputy Secretary (Appointments) who was a very genial officer of the Central Secretariat Service. I had to process cases of appointments (including ad hoc appointments in the superior posts) by selection and by promotion by the method of screening by departmental promotion committees headed by a member of the commission nominated for the purpose by the Chairman of the Commission. As there were two under secretaries in the Appointments Wing ministries of the Government of India were allotted between the two. There was, however, a third under secretary who used to look after only the appointments of the officers of the All India Services.

Things went in an even tenor till I was promoted as deputy secretary. I was then placed in the Recruitment Wing of the commission which dealt with recruitment by interviews. I inherited a huge amount of arrears as the post had remained vacant for a few months. The secretary used to monitor the progress of disposal of recruitment cases every week. The cases used to be identified by the date by which applications were to be submitted for recruitment to the advertised post. The short-listing of candidates used to be initiated by the under secretary concerned and the short-listed candidates would be recommended to the specified member of the commission for approval after a recheck by the deputy secretary. For very senior posts the cases would be routed via the secretary.

 Level jumping was prescribed in the office of the Commission and hence as under secretary and deputy secretary I could submit cases directly to the Chairman – an officer of the rank of secretary. The target used to be to issue calls for interviews within a month or so of the last date for submission of application and my arrears were formidable – dating back almost a year. Slowly I worked my way through and started nibbling at the arrears. Working late hours and on Sundays and holidays I brought the arrears down to very manageable levels and my room which used to have piles of folders of applications in hundreds lined up along the walls started looking more decent. In the weekly monitoring meeting around three months after my promotion I saw the Secretary breaking into a smile as I gave him the figures.

The recruitment by interview entailed scrutiny of applications by the under secretary and then by the deputy secretary. Depending on the number of posts advertised and number of applications received a reasonable criteria used to be decided upon keeping in view the qualifications and experience of candidates to short-list them for interviews. Generally 7- 8 candidates would be called for interview for a post and the rest would be weeded out.

No wonder there would be writ petitions by rejected candidates in high courts and the Supreme Court and they were in pretty high numbers. Dealing with them took quite a bit of time and one had to be careful with the use of language in response to the petition as the image of the Commission could not be compromised. It is because of them that I learnt to organize matter and tried to use the most appropriate words in the response. With a remarkably adept secretary above me I used to keenly see the corrections made by him by his highly sharpened pencils. Much later one day when a file with a response to a writ petition came back without any correction by the secretary I could not believe my eyes. Thinking that he had just signed on the file in a rush I went to him and asked whether he had seen the rather lengthy draft. When he said he indeed had I felt very elated as I thought my day was made.  

There was a Hollerith Section in the Commission. Though I had nothing to do with it the in-charge of the Section once invited me to take a look. The machine was an electro-mechanical punch card machine that helped in summarizing information. Applications received by the UPSC for recruitment by examinations would be routed through the Hollerith Section creating records of each applicant in punch cards with the vital items of information like year of birth, educational qualifications and so on. It was kind of a precursor to computers which have now replaced the Hollerith machine. Much later, in 1982 I saw somewhat similar machines being used in China for manufacturing cloth with designs punched on punch cards.

The lunch break at the Commission used to be interesting. More than half a dozen officers of the level of under secretary and deputy secretary used to meet in one of the rooms for tea and refreshments. There would be gossip and jokes and peals of laughter. Some of them are still around and we keep in touch by very rare phone calls. That is what happens when people start aging.

*photo from internet 

Our Life, Our Times :: 43 :: LRS leaks foreign exchange

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Vijay Mallya

Vijay Mallya, Nirav Modi and Mehul Choksi are not the only people who have parked their wealth abroad. They have, however, done so after having cheated the Indian financial system. While Mehul Choksi traded his ill-gotten wealth for an Antiguan citizenship, the two others named above have not been reported to have done so. While Mallya is waiting for an order regarding his extradition, the two others are yet to get into the Indian nets.

These three are examples of cheats who bribed their way to build their wealth and are now awaiting retribution. There are, however, others like the film actor Akshay Kumar who milks the Indian film lovers and goes and buys a whole hill in Canada. Many Indians who love his films that are tinged with nationalism perhaps do not know that he is a citizen of Canada and allegedly spreads the lie that he has dual citizenship of India and Canada when India has no provision for dual citizenship. That does not detract from the fact that he is seemingly honest about his money matters and is a very popular actor, so much so that his brand endorsements make around $35 million (around 250 crore) per annum for him apart from the Rs. 30 crore that he reportedly charges per film. Though he invests most of his money abroad yet curiously he is in good books of powers that be, including Prime Minister Modi. Why cannot he spend a few of his millions in India where people seem to be crazy about him? If he does so, the fact is not widely known.

Akshay Kumar’s millions are all presumably legitimate whereas Mallya’s and those of others are not. As it happens there are numerous Indians who are now parking their funds abroad, apparently, preparatory to their own shift in foreign climes. While the government is trying to get as much foreign portfolio investments (FPI) as possible the country witnessed the highest ever monthly remittance abroad of $1.69 billion by resident Indians in July 2019 under the liberalized remittances scheme (LRS). Accounting this with the preceding four months, the outflow of money in foreign exchange has hit $5.8 billion in the first four months of 2019-20. Since 2014 the outflow under LRS amounts to $45 billion (3.5 lakh crore in rupee terms @ Rs 70 to a dollar).

Under the LRS resident Indians are allowed to remit up to $250,000 in a financial year for various specified reasons, such as going overseas on employment, studies overseas, emigration, maintenance of close relatives, medical treatment, etc. The resident Indians can also transfer money under LRS for opening foreign currency account overseas, purchase of property and making investments in mutual and venture capital funds. The RBI data reveals that the outflow of funds under LRS during the last 5 years (from 2014 to 2019) has been far more than FPI in the same period, thus negating the latter’s beneficent effects.

Various reasons, from economic to social and cultural, have been attributed for the rise of this phenomenon. The reasons are somewhat imprecise and analysts have not been able to pin-point the specific reasons for the (mis)use of the LRS. Investment experts and others in the business of fund management say that the sharp rise in outflow of funds under LRS over the last five years indicates flight of capital and of small and mid-sized businessmen from India. Many of these affluent businessmen wish to shift base to developed countries where work culture is better, profits are high, taxes reasonable and life is hassle-free. Others feel that the taxes now are too high and that on payment of such high taxes in an advanced and developed country they could get a much better quality of life. Then, of course, the social factor, that of a persistent unease in society, bugs many who increasingly find their universe suffering from lack of societal harmony and cohesion.

Expressing their anxiety many investment experts feel that even if 50% of the amounts sent abroad stayed back in the country and got invested in it country it could have resulted in a big multiplier effect in terms of job creation and growth of the economy. Hence many experts in the field think the government should arrest this trend. It seems to be valid proposition as many of us in India are unscrupulous and make dishonest use of facilities extended by the government. Foreign exchange is precious and is hard to come by. Misusing the facility, one should think, is criminal. Analysis of the data has shown that the amounts parked abroad during 2014-19 are almost 9 times more than what was sent abroad during 2009-14.

One tends to feel the provisions of LRS are far too liberal than necessary. While the RBI has prescribed the ways to monitor the outward remittances it has also recently redefined the term “relatives”, remittances for the upkeep or medical treatment of whom ballooned in recent years.

 If the RBI has to be very generous a mechanism needs to be devised to check whether the amounts sanctioned were used for the purpose(s) they were released. The system in existence should not provide for un-noticed leaks of precious foreign currency. Besides, care has to be taken to ensure that outward remittances do not out-strip or negate the inward investments. The health of the economy has to be the prime consideration when the government extends various facilities and offers concessions to the people. Their abuse should be checked and punished wherever noticed.

*Photo from internet

Destinations :: Salzburg (2004)

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Salzach River flowing through Salzburg

Who can ever forget the Academy Award winner film Sound of Music? Though Salzburg is named after the salt it used to produce it is also known for music. Mozart was born here and in recent times the movie Sound of Music was filmed here.

Only two and a half hours away by train from Vienna day-tripping to Salzburg is easy. Several trains leave from Vienna for Salzburg during  the day. We caught one from Westbahnhof (the Western station in Vienna). We had got off here in 1987 when we travelled from Munich to Vienna.

Mirabell Palace in the background

A large number of day-trippers take the train in the morning. Young men and women seem to carry their bi-cycles along as I noticed a whole bogey dedicated to stands for bi-cycles. Salzburg is on or close to the foot of Alps and hence it has its ups and downs that should be difficult for cyclists. For young people, however, that does not seem to be an issue.

Salzburg Tourism has done a good thing by organizing a tourism counter right on the platform. It is a great help for the day-trippers who have very little time in hand to go round the place. Quite a lot of time is taken to travel from Vienna and back– almost 5 hours consuming the best part of the morning. We bought tickets for a package of sight- seeing by a tourist bus.

Baroque architecture

It was a whirr. I do not remember much of what we were shown that mostly had a lot of Mozart, the Abbey and a few baroque structures after which we were dropped on a square for wandering around. Yes, we had a bit of Sound of Music in our itinerary which was the Mirabell Palace, an imposing neo-classical structure by the side of the Salzach River that flows through the city, its waters eventually draining into the Danube basin. The Palace has some exquisitely laid gardens. It is located in the Historic Centre of Salzburg and is a World Heritage Site. Mozart used to play here when he was a child and the song “Do Re Mi” of the film Sound of Music was filmed in the gardens of this Palace. The Palace is also associated with Adolf Hitler whose wife Eva Braun got married here to a senior Nazi official.

The Square that we were dropped in is also a World Heritage Site with

A Salzburg street

period buildings all around. In one of these buildings somebody was running a restaurant. We climbed up as it was an outfit on the first floor offering a fine view of the Square below. We had whatever looked palatable to us, relaxed for a while and got back to the bus for our return trip to Vienna. So, that was it – short and crisp.

Bhopal Notes :: 79 :: Horrendous Bhopal roads

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An example of Bhopal rods

The local newspapers have gone hoarse crying about the condition of the city roads. This happens practically every year as the slightest of rainfall damages them. This year, however, the story was entirely different. The rainfall in the city broke all records set many years ago. Not only did it rain to complete the quota fixed by the weather men taking into account the average rainfall of pre-determined number of years, it rained and rained to register an excess of more than 160 cms – the average being just about 100 cms. The month of September was the wettest in many years. The sun hardly showed up as the weather men said multiple (monsoonal) systems were operating to shower rain and thunder on Central India.

The heavy rains came in very handy for the road building agencies of Bhopal to explain away the broken down roads practically all over the town. True, it rained much more than it does every year but that cannot explain the mess that the roads are in all over the town. Even in the years the rains are not as much as it was this year roads are always a casualty. What probably is true is defective road building, improper mix of material, lack of proper supervision, corruption, etc. These factors take centre stage when the road building agencies come out to build roads. If these factors continue to play the same kind of role as they have been doing so far, the citizens of this town can forget about good and durable roads anytime soon.

If the new MP government is serious about remedying this chronic problem it will have to bypass the usual corrupt officials – elected and/or permanent – and change the very defective culture of building roads. Currently, roads are built where text book methods are hardly ever used. As long as this is not done roads will have to be laid and re-laid after every monsoon. Despite availability of a huge bank of engineers our governments are not able to build world class roads. Can it all be blamed on the politician-bureaucrat nexus? Perhaps so, but only partially. The rest can be blamed on wrong technicalities involved in building roads and endemic corruption.

Curiously, heavy rain is not a factor for deterioration of roads in heavy rainfall areas in equatorial South-East Asia. One can recall even around forty years ago roads in the Malaysian capital Kuala Lumpur and outside were remarkable for their quality as also durability. When we as trainees from the Indian Institute of Public Administration had an interface with Malaysian officials we were told that roads were built in accordance with the text book principles of building roads. Besides, before commencement of road construction all utilities were asked to dig roads for cable/pipe laying to their hearts’ content as for twenty years after the road is built none would be allowed to dig up the roads regardless of any reason and even those that happen to be compelling. Corruption was not a factor as road building was a nation-making enterprise.

Something like this needs to be done here also as roads are laid and re-laid periodically without providing any relief to the tax payers whose moneys are repeatedly used to lay and relay the roads. This, coupled with the use of ideal mixes of material, observance of proper process in road building and elimination of corruption will yield better results by way of satisfaction of the road users, construction of durable roads without requiring frequent re-laying of roads saving tax payers’ money on building of roads that do not last even a season.

Now that a highly educated minister is helming the Department of Urban Administration one can reasonably hope that things in so far as road building is concerned will improve appreciably. Nothing is beyond Indian engineers. They have after all built such good roads under the sharp supervision of Highways Minister Nitin Gadkari that even the Leader of the Opposition in the Parliament, Sonia Gandhi, had an occasion to praise him for his good work.

An initiative in this regard is called for from the minister. The roads are in terrible disrepair all over the city where, the newspapers are crying, they have disappeared and in their place only craters have appeared which have turned out not only as vehicle wreckers but also as bone breakers. Money should not be a problem as there is enough liquidity in the country. The government needs to take a bold step to take loans to build this infrastructure that will help in boosting the state’s economy providing large scale employment to the youth who are now sitting idle.

 One needs to recall that to get out of the Great Depression of 1930s the US took the Keynsian way out to increase government spending and started building, inter alia, the highways to boost the economy and slackening employment. The MP government needs to do likewise though currently there is nothing parallel with the US effort of 1930s. But road building has its own advantages for the economy particularly when these last a generation and not just one monsoon. As a bonus, road building boosts employment for the youth who are now idling away.

*Photo from internet

Memories of an ordinary Indian :: 28 :: Jabalpur (Part 3)

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(Continued from previous post)

Dhua Dhar Falls

Das had worked up a good friendship with the politicians of the district. An MP from Katni was one such politician. He asked us over for lunch on a Sunday. While the food was fine what was more interesting was the way his younger son handled an American Willys Jeep. It was smaller than its Indian counterpart and was petrol driven. He asked us to join him for a ride. First he took us outside the town where he came across a herd of spotted deer (chital). He cornered one against a wall in a manner that the animal had no way to escape. Using his carbine Das fired three shots but none hit the deer which, like cats, seemed to have nine lives.

From Katni towards Shahdol a few miles up the road we came across a herd of black bucks. Some of them were in a playful mood and some other were prancing around. As soon as they saw the vehicle they took a sharp right turn and ran hard on the barren earth. Not to give up, the MP’s son gave them a chase; and what a chase it was – like the one we had seen in the film Hatari. Bouncing on the rough and bare ground we went at full speed after the black bucks which gave a show of their prowess of running hard and leaping high up in the air covering several yards in the process. It was a sight to see against the setting sun. We watched them till their coiled dark horns faded in dust raised by their hooves as they sprinted away from us – a sight I am unlikely to forget until I die.

That road – Katni to Damoh – used to host fifty years ago such incredible wildlife. When our batch mates posted in Damoh and/or Sagar would come to Jabalpur for meetings they would often report sighting of a tiger or a leopard. All that seems to have gone with our watchword “vikas”! We haven’t been able to carry our natural world along with us even with our Hindu Rate of growth of 3%.

Jabalpur had that incredible sight Marble Rocks on the River Narmada. The River flows through gorge cutting the marble rocks on two sides On full moon nights it is an unearthly sight. There are boats available on hire with expert boatmen who can steer their boats safely through the deeper parts of the River. Close by is a fall that becomes aggressive as the monsoon progresses.

In around seven month’s time Das was posted out to Sagar. But before that I had moved out to the Narmada Club into a single room tenement where Dungee would often drop in during early evenings. Das’s replacement was Vinod Pandit who became a friend in no time. Our common factor was that his wife happened to be from Gwalior which was my birth place and we would go in our childhood to the same Hukkus where she and her family would often drop in.

The All India Congress Committee meets every year at some place chosen by its big wigs. Since it was the only political party worth the name and since it was in power at the centre and numerous states its annual meet used to be a very big affair. Those were the hey days of the Congress. We would receive directions from the headquarters in Delhi to provide all kinds of facilities to the delegates. In 1967 the AICC decided to meet at Jabalpur. The state government allocated a rather small building for a Posts & Telegraph Office. The divisional Engineer Telegraph was One Mr Tripathi and a good friend. He offered to do up the building and the surrounding patch of land. And what a job did he do! Freshly whitewashed and immaculately painted he even turned the front patch into a garden with potted plants.

He asked me to do up the inside. I asked our furniture maker to provide the best he could and he did so. Our boys went on a spree to decorate the building with whatever departmental posters they could lay their hands on. A few photographs of Bheda Ghat were the toppings for the cake and the place was ready for business.

 Mr. Khan, our Director was asked by the PMG to check whether we had done our bit. I went to receive him at the station on a borrowed scooter. On my way back I had a fall that broke my shoulder. The boss went and saw the place we had created and came back very satisfied. He informed the PMG accordingly from my residential telephone. Much later when I had been transferred and was in Bhopal I got a letter of appreciation from the Member of the P&T Board. It seems, the minister of communications visited the office during the AICC session and wrote in the Visitors’ Book that he had been attending AICC sessions for thirty years but he never came across such a handsome looking Posts & Telegraph Office. I was sorry that this did not come earlier so as to enable me to share it with my junior colleagues who had toiled hard to make it what it became. Anyway, it was good recompense for the effort put in.       

(Concluded)

*Photo from internet