Government Funded Mafia, or a brief history of SIDCO

SIDCO, or Kerala Small Industries Development Corporation, was set up around 40 years ago to make life hell and completely quash entreprenuerial spirit in Kerala. Their website however says the following:

"This Corporation is rendering assistance to SSI's in the State, like providing Infrastructure facilities, distribution of essential raw materials, marketing of the SSI products,undertaking Civil and Electrical works etc. Moreover Kerala SIDCO is supplying Bitumen to Local Bodies as Nodal Agency and Paraffin Wax to small scale industries."

They also have text scrolling through the top of the screen saying "We serve small scale Industry on a Large Scale". Someone must be really proud of that line.

Even if this were true, this doesn't seem like much to accomplish over 40 years. Their performance figures give a slightly clearer picture. Comparing the two years given, you can clearly see the performance getting even worse. For example, out of the 135 idling units, they have rehabilitated all of 6 units in the first year, and none out of the 160 units the next year. On closer inspection you will find that even the 6 units "revived" in the first year, were given a total of only Rs. 2.2 lakhs, and that too from state government funds, and not from SIDCOs own funds. This my friends, is just the beginning of the dark and devious story of a modern day Lochness Monster.

My father, oh no actually my grandfather "purchased" land from SIDCO in the mid '60s. They had just been given a lot of funds from the Central Government, part of some misdirected scheme to help Small Scale Industries (SSIs). We were allotted the land and sheds back then, under a "Hire-Purchase Scheme" where we paid the rent every month, and a portion of the rent paid would be adjusted against the final value of the land as assessed by the time the paper work got done, and SIDCO got the title deeds for the property from the government which they would then transfer to us.

We started paying rent from 1965 or something, and whenever we enquired, the paper work was still getting done, and we continued without the title deeds to our factory. We were lucky, being a fairly well to do family, and we could raise some funds from other sources to run the business. The vast majority of the other "owners'" of the sheds in our Industrial Estate were genuine really small scale entrepreneurs. No bank would finance them without collateral (there's definitely a series of postings coming on banking to explain that and a lot more). Whats more, no bank would accept an allotment certificate from SIDCO as a realizable security. The banks were way smarter than the entrepreneurs in that case. Many people had to pledge their houses to get bank loans, which was of course the worst way to encourage an entrepreneur. SIDCO has ruined the lives of people who's business went down. They wait or travel all day from office to office, visiting bureaucrats, politicians, lawyers and anybody else who might perhaps be able to do something, anything at all.

In 1994, SIDCO came out with a final offer for "outright sale" of the factory and sheds. They fixed a new (considerably high) value for the sheds and said they would consider 75% of the rent paid as part of the purchase price. We took the offer up immediately, and somehow raised the funds to pay the balance amount. Out of the 46 odd units in the Estate, only 3 managed to raise enough money or initiative to "buy" the land and factories. With that SIDCO gave as allotment certificate allowing us to pledge the property to any financial institution, and gave us more assurances that the title deed would be given soon.

At this point, one may question, quite rightly, whether these SIDCO guys were part of some masochistic cult or just plain inefficient. The answer is neither. See, once the Central Government gave funds to SIDCO to "promote" industry, SIDCO just sat on their asses and didn't really do anything. They built a few hap hazard industrial estates and parks. However, anyone who was aware of SIDCOs practices would stay away from their Estates, and in fact, from Kerala itself. So SIDCO has like lots of employees, tons of them, and what do they do? Well pretty much nothing, if tea and lunch breaks don't get credits. Who pays them to do nothing? Well, SIDCO does, from the rent it charges. Once entrepreneurs get their title deeds, they'll stop paying rent, and SIDCO will go defunct. So, the employees union is actually objecting to giving the title deeds to the rightful owners.

Unfortunately, SIDCO employees unions were very strong and we are still waiting for the deeds. The Hindu on April 28th, 2005 reported the Chief Minister's statement that SIDCO estates property is going to be sold. They also report the CPI Leader Mr. E. K. Ismail's defense of the decision in his press conference on June 1st, 2005.

He said there were 621 small industrial units functioning from 17 industrial estates of SIDCO. The State Government did not have to spend any funds to start these industrial estates since were built way back in the 1950s entirely with Central Government grant, he said.

SIDCO too had made no investments in these industrial estates, though it had collected more than Rs. 5.27 crores from the entrepreneurs since 1975. The Government could have allotted the land and buildings in these estates to the entrepreneurs under the rules governing the subject, but that too did not happen all these years despite several requests from the entrepreneurs. They could not even borrow funds from the banks since they do not have the title deeds on the properties.

The people who run units in these estates could not be called big industrialists. Though the units are all small ones, they employ thousands of workers. The Government, through its decision to issue title deeds on the properties to the entrepreneurs, had done only what it should have done years ago.

Its more than a year now, and nothing seems to have happened. If all this above, didn't really give them the Mafia feel, they came out with a new regulation that to transfer the property, (which is rightfully ours, which they should have given us years ago, which they haven't spent one paisa on maintaining) the seller has to pay SIDCO 25% of the value they have assessed for the plot. If this isn't extortion....

The Basic Plan (or Managing the Government)

Though India is progressing, I can't wait for my grandchildren's grandchildren to get the full benefit of "progress". I am going to speed it up by taking over the country, as an elected dictator. Well, I hope to get elected by a large enough margin, and several consecutive terms so it'll be practically like a dictatorship.

On to my mandate...
I believe that a government should be run like a large corporate. Except that while in a corporation's case, maximising income will be the main goal, for a government the main aim should be at the welfare of its people. So how does that make a government like a company? The government should basically learn from the way a corporation is managed, and take the best practices from it.

To start with, a company will reduce always try to reduce overheads and maximise efficiency. The government should really learn from this. For a company, a customer will not be willing to pay for inefficiencies in it, and will switch to another brand or supplier. In India I feel people evade so much tax partly because they feel (rightly so) that the government is wasting a large amount of their money. I feel that if the government is made totally efficient and transparent, and awareness is created, citizens will willingly pay taxes, and look down on those who don't. Further, once it is completely efficient, and not a penny of the taxpayers' money is wasted, the government can justify imposing severe penalties for evasion.

A company will aim at customer delight, and for a government, its citizens should be treated as the customers. I am a socialist and I believe that the government should maximise efficiency and subsequently spend the income generated on welfare, education and employment generation. However, I am not an "old school" socialist. I understand that to share the pie, we have to first bake the pie.

So as the elected leader, I will generate wealth for the country, and give equal opportunity to everyone, and as equitable a standard of living as possible, by uplifting the poor, rather than simply trying to drag down the rich.

Now on to the plan of action:
I believe as the leader of the country, I should function pretty much as the CEO of the company. A successful CEO should not just balance the budget, or project the next year's targets. He should give vision to the company, and motivate the employees and make everyone take pride in the organization.

So first, I do the MBA, get it over with and join a consulting company, to help Information Techonology and Communications companies formulate strategies, as well as help any company implement IT related strategy. Why IT? Well, I believe that nothing can speed up progress and increase efficiency in a company as good implementation of IT. In the case of the government, proper distribution and penetration of IT will not only drastically improve efficiency, it will also empower people, particularly in our largely rural setting. It will give people more direct access to the markets and the government, and keep up to date with all relevant advances.

To build a company, or a nation, I need a strong team. Networking with trusted leaders in every field and region of the country, I will build a team of energetic people who want to make a difference. After building the team, we will do an in-depth "market survey", which any manager will know is the first step in any project. After the market survey, we will prepare a business plan, with the road map for the next 20 years. I don't feel that a five year term is enough for any government to achieve any real goals. We will have to get the complete trust of the people, by explaining our plan to them, with road shows in all parts of the country, with question and answer sessions and so on. I hope that if prepared enough, we will win the first elections that we stand for, with a large enough margin to effect real policy change. The country needs a leader, not a politician.

About the blog:
I hope to incorporate all my ideas on implementing various management practices in government organizations and functioning which I come across. I will also try to write about how to learn from the current government's mistakes. Further, I aim to also collect and document my thoughts on leadership, ethics, and so on. I know I am not a management guru or anything, but believe that with focus, hard work and God's grace, I can really make a difference. Like I said, I'm on the lookout for a good dedicated team. If anyone has any advice to give, or have any ideas on how to run the country, leave a comment, or join the team.

A good "houseperson"

(I wonder whether houseperson is the politically correct form of househusband? )

Since Beks started with her full time job like a month ago, and since I have been more or less unemployed except for short stretches, winding up things, I have taken over charge of the house. I have been getting used to the role, and studying what is required.

Management, like Maths and logic, is I feel a general discipline and you can use the same principles in most things you do. To be a good househusband or houseperson, is practically running a company. One has to think of inventory and purchases (of food items as well as soaps and stuff), production planning (what to cook? when to cook), supply chain management (washing clothes as soon as one set is dry and getting it ironed), cash flows (utility bills) and stuff. Luckily most of the strategic decisions are taken as a team when you're married, but the day to day stuff is all up to me.

I have to make sure that Beks doesn't run out of clothes or underwear, is fed (with a balanced diet if possible) and that everything runs smoothly. In India, a houseperson is also particularly concerned with Human Resource Development, teaching your maid to cook your favourite dishes, and mapping out weekly schedules of when the books need to be taken off the shelf and dusted and so on. One also has to choose between outsourcing (getting a cleaning agency, or giving clothes to the dhobi) vs doing it in-house.

Anyway, I'm coping with it and doing pretty well. However, making rubber flip flops were easier in a lot of ways, at least i didn't have to think of producing different colours every day or anything. And sometimes, getting an order to be supplied is easier than having to decide on what to cook everyday.

Now I'm home alone though, while Beks is with her parents in Chennai. When the roles of the houseperson was reversed, when Beks went on a trip, I would do everything else except make the bed. This was my primary task at the time (or atleast folding the sheets) and I used to use the "freedom" to leave the bed messed up, sometimes for up to a whole week till she got back. I think it was also a semi-masochistic tendency, since it made me miss her much more.

But now, I have imbibed the responsibility of overseeing the whole house, and taken ownership of the project. This is the first trip she's taken since she started working, and now everyday in the morning, the first thing I have to do is take off the pillows, fold the sheet and make the bed, tucking it in tightly, and that the designs of the bed sheet are aligned with the bed, just the way Beks has taught me to do it. I guess I'm becoming a better houseperson.

Teachings of Flu

Don't worry, I'm not turning this blog into a religous blog and Flu is not an ancient Chinese Scholar.

Anyway, been down with a mild flu for the past two days. Luckily it kicked in just the day Beks got back so it also gave me an opportunity to be exceedinly needy. Anyway, am stuck at home with nothing to do. No energy to really think creatively (a.k.a. finish my essays) and at the same time, not sick enough to just pass out the whole day.

Since I had mentioned that every experience teaches you something, I was wondering what (if anything) a flu teaches you... What can alternate bouts of shivers and sweats teach you about life? Perhaps patience, perhaps boredom, dunno really. At least if you're in school, or working for somebody else, a fever can be a couple of days to stay at home, watch movies and so on. Btw, I watched Almost Famous today morning. But right now, the flu is equivalent of getting sick during summer holidays for me. I'm going to try and finish my Lord of The Rings marathon, finished the first two, and now onto Return of the King. Got the special edition DVDs from a cousin and each movie is around 45 mins longer! Thats a total of 6 dvds for the entire series.

The last time I got the flu, in Feb, a week in bed, and much higher fever and severe chills somehow gave me the confidence to decide to close down our company. The decision was something the whole family had been too nervous to make, not sure how it would turn out. I'm not sure how the flu helped me in making the decision, but at some point between the half sleep and continuing dreams, I saw very clearly that it was the right choice, and that it could be done. Anyway, waited till I got healthy again before telling my father about it, so that he wouldn't take it just as a sick persons ramblings or fears. At first he thought that I was making the choice because he was putting too much pressure on me, and my uncles suggested that we run it in an even smaller scale, but I decided firmly that we would close down, and that it could be done. Anyway, we never thought things would work out quite so well, but it often happens that things thought to be huge problems are not so, and some things we dont think about at all, actually turns out more difficult. Anyway, having said that, let me also mention that I don't believe in problems: just situations, whether you see it as a problem or not is up to the observer.

Wi-Fi and Business Cycles

I recentlyWi-Fi enabled my house and now I can listen to internet radio in the bathroom. Believe it or not, I actually do that, and now I think I should get a Wi-Fi card for my PDA since its a little cumbersome to drag my laptop into the bathroom everytime. I'm hooked onto the piano jazz channel on Accuradio.

I never thought radio would make a revival. Wasn't it completely dead like a decade ago or something? Even the WorldSpace satellite radio system never became popular except with some hardcore radio afficionados. However, after using netradio for a couple of days, I am sure that it's popularity, though already high will increase manifold. I guess once Wi-Max becomes popular, (which I think is more likely to happen that public Wi-Fi like Google's experiment in Mountain View, Calif), network radios will probably replace even iPods.

Its amazing to think that a product, even one as popular as an iPod will have a life cycle and one day will be replaced by something else. So does that mean that the principle in Physics, where everything that goes up must come down eventually, can also be applied to businesses?