Dark clouds over India… Not just the monsoon.

Dark Gloomy Clouds

Cloud of gloomy news about the Indian economy today…

Rough ride ahead for the economy

“The Indian economy has reached a stage where no macroeconomic indicator is in favour. It has large fiscal and current account deficits, a falling currency, slow growth and high inflation. To make matters worse, there is no visibility as to how we will get out of this situation. The present situation and future possibilities indicate a tough ride for the Indian economy ahead.”

S&P sees downgrade risk rising for India as debt costs climb

“Given mounting economic stress, the credit metrics of corporates are unlikely to show a significant improvement this fiscal year, analysts at India Ratings wrote in a July report. The current economic situation provides limited elbow room to RBI to cut interest rates and for the government of India to embark on large-scale policy stimulus.”

Young Indians struggling to find a suitable job

Close to 66% of Indians surveyed by the staffing firm said it was hard for workers aged 25 years and below, to find a suitable job and 79% believed these young workers accept a job below their education level. Over three-fourth (79%) of survey respondents said it was equally difficult for older workers to find a suitable job and 71% of them believed that such workers are often forced to take jobs below their education level.


What should we do?

Media, Ratings Agencies, Polls and opinions do not shape the future. Action does… I believe this is the time to act and invest in India:

– For farmers, the rain gods have delivered the best showers in 20 years.
– For entrepreneurs, bright young minds are eager to work with you on challenging problems.
– For investors, Indian Bank Interest Rates, Government & Corporate Bonds are at all-time high yields.

As the cliche goes, “it is darkest before the dawn”… How will we shape our future?



Simple way to reduce India’s growing Trade Deficit – stop buying gold!!

As of April 2012, India’s Exports are at an all-time high of $300 Billion. But the problem is that Trade Deficit is also at an all-time high of $ 180 Billion. This is serious problem as it is threatening to undermine India’s growth.

One obvious reason for the Deficit is Rising Oil prices. From 2000 to 2012, there has been a phenomenal increase in oil prices – 1970s was the only other time when it grew more. In the current World Politics, India cannot do anything about it in the short term. In the medium to long term, India needs to invest aggressively in renewable energy sources like Solar, Wind and other alternative sources like Nuclear (if the risks can be managed carefully).

But can we do something simple in the short term to reduce this problem?

Even if you spend 10 minutes thinking about the problem and researching, one answer should be obvious. India’s completely unnecessary and frivolous gold purchases and resulting gold imports is one of the major reasons for the Trade Deficit. If we completely cut out Gold imports, the huge Trade Deficit can be brought down by 30%.

There will be many objections to such an idea:

Objection 1) Gold is the only real saving. See in difficult times, Gold value goes up.

Answer 1) But Gold’s “supposed” value is only because people think it is useful. It is practically useless. Let us spend the money on something useful – education, health, infrastructure or even basics like drainage. “Let us build Sewage Drains instead of Golden Chains“!!


Objection 2) But if everyone sells Gold, then value of Gold will go down causing people’s savings to go down.

Answer 2) Most people dont do anything useful with their gold savings anyway. Let them at least, invest the savings into something more useful. Even spending the money on something else and not saving is better than saving in gold. In anycase, there is enough gold in India already that even if people just continue to circulate the gold that is already in the country, there will be enough gold for a long time.


Objection 3) What if countries go back to the Gold standard? India can be the richest country in the World!

Answer 3) Ask any reasonable economist. The World economy is not going back to the Gold standard. No matter what happens – severe depression, recession due to natural calamity or huge war, there is no chance the world is going back to a Gold standard.


Can we make a pledge – to sell unnecessary gold and diamonds and not to buy any more useless jewelry. It is killing the country. It is not worth it.

Alternatives to buying gold:

– Buy a solar panel instead. It is equally shiny and will give you useful electricity during those power-cuts.

– Buy some native handicrafts – handloom, pots. It will help poor artisans and keep art alive.

– Buy better food – organic, locally grown. It will help farmers.

– Buy books, ebooks, computers, internet access. It will help you.

Envisioning next generation school education in Tamil Nadu… and elsewhere

Some of the problems that plague schools in Tamil Nadu (TN), in India & many developing countries are:

  • Lack of good teachers
  • Very high teacher-student ratio
  • Too much focus on just chalk-talk-and-exams
  • One-way dissemination of data/knowledge rather than interactive problem solving

Following is a vision & plan to improve school education in TN but might be applicable with changes in other places as well.

There are  large changes happening in the Education scene (like other areas of life) in India – some key changes in 2010 here. One major change in TN in 2011 has of course been the new AIADMK State Government headed by Jayalalitha. The new government has proposed some major initiatives as part of their election manifesto and is seeking Central funds to implement the ideas. From an education standpoint, there are a few promised initiatives that the TN Govt seems keen on moving forward with:

  • Free laptops for Senior School Students and Engineering Students
  • Free Cable connections for the public
  • Revamping “Samacheer Kalvi” with better books (post election promise)

But they don’t directly solve the problems stated in the beginning.

Meanwhile, the Internet, Smartphones & Tablets have been driving rapid innovation in education frameworks throughout the world, like:

  • Next Generation Learning Project by Gates & HP Foundations has funded many interesting educational projects based on sound education research done by many organizations.
  • The Khan Academy has shown how a single person can inspire new ways to learn online and now has a large library of free education videos.
  • India’s National Program on Technology Enhanced Learning (NPTEL) initiated by IIT & IISc has put together a large collection of college level educational videos.

But there are still many challenges in immediately making these online & computer-based initiatives available usable for school education in Tamil Nadu:

  • Broadband Internet penetration is still less than 1% of population in TN, India
  • Computer penetration is less than 5% of population
But on the other hand we have very different dynamics with television penetration:
  • Almost 90% of the population has access to Television – previous DMK govt had provided free TV sets to Below Poverty Line (BPL) families.
  • New TN government is planning to provide free (or very low cost) cable TV access via the Arasu Cable network.
Given the above situation, I have a simple proposal to improve school education in Tamil Nadu using a Hybrid approach of one-way lectures as well as interactive learning.
Phase 1 (2012 to 2014): Using existing infrastructure & technologies
  • Create High Quality Educational Videos for each class from 1st standard to 12th standard for the entire syllabus and make it available freely to all students/families – via Cable/Satellite Television as well as DVDs, USB sticks for laptops. These should be made highly interesting to keep student attention.
  • Students should be able to see these videos on their TV sets any time they want and review it as often as needed based on their individual pace.
  • In order to facilitate better access to these educational videos, there should be atleast 12 new TV channels created via Cable TV or Satellite TV – one channel for each year/standard. With Govt Arasu cable and Doordarshan capabilities, additional TV channels should be easy to provide. The class lectures should be repeated many times in a day & over the weekend to allow multiple reviews by students who dont have DVD/Player or USB/Laptop access.
  • The focus of school classrooms should be interactive discussions, exercises, Q&A, group work. One-way chalk-talk lectures should be done only via the above mentioned videos.
  • Teachers have to retrained to manage these class interactions effectively. They also no longer have to teach the same lectures over and over again every year and instead interact with students.
  • Even in areas where teachers are not so effective, students can learn much better than current system by using the high quality educational videos.
In this phase, some students in some rural areas & poor urban areas might still not be able to make full use of the above educational methodology. But accessibility can steadily improve with time with goal of 100% access by 2015.
Phase 2 (2015 to 2020): Using better Computer penetration & Internet connectivity
  • By 2015, India (especially TN) should see much broader Internet (via 4G or newer wireless) connectivity.
  • If TN govt does make good on promise of free laptop to students, computer penetration should be quite high. Even otherwise, Internet access devices should also become a lot cheaper by 2014 – good wireless equipped Tablet PCs for under Rs 8,000 should be available.
  • Even higher quality (better than Phase 1) Educational Videos should be made available to students. By 2015, these videos should be accessible to 100% of all students – either via Cable or Satellite TV or via laptop/tablet & USB sticks.
  • Students should be able to do the interactive portion of their learning via the Internet using tools like Moodle – interacting with other teachers & students throughout TN and other places.
More detailed planning & clarification of vision still needs to be done. Also in-depth cost/budget assessment needs to be done.
But more importantly feedback is needed on this vision/rough plan.
Does this make sense? Please add your comments below and add a note if you would like to work on this project.