More rate cuts: Not so fast: Economic Times 31st July 2025

 

Why TACO Ploy will work for the US: Businessline 29th July 2025

 

Book review: Finding socialism in capitalism: Financial Express 27th July 2025

 

Arun Maira’s Reimagining India’s Economy critiques number-driven growth and urges a human-centric, sustainable approach. With insights from business, government, and social sectors, the book challenges capitalist norms and calls for citizen-first economic thinking.

When we think of a person who worked as chairman of BCG and also in the Tata Group before topping it with a position in the Planning Commission, what comes to mind is the possible economic ideology espoused. The experience canvas is quite vast considering one business group has been associated with nation building while another works for corporates and strategises how to grow profits. And the last entity, when in existence, was part of the government super structure looking mainly at the welfare aspect of economic paradigms that could be used to foster growth.

But when this person who worked in the private sector cogently argues with the board of directors of the company to slash employee bonuses when financials are not good and still pay high dividend to shareholders, you get to know how the wind blows.

When growth becomes numbers, not outcomes

Arun Maira, who has impeccable academic and professional credentials, has consistently focused on the ‘human’ quality required for growth in his previous books. In this new book titled Reimagining India’s Economy, which is part biographical and part ideological, he lays bare some hard truths. It is hard hitting as he does disparage our fascination for numbers, as statistics don’t tell the entire story.

Yes, we do tend to revel in the GDP numbers when claiming a higher step in the world’s echelon. But he questions the quality of this growth all the time, which is what we could miss when viewing the rather spectacular progress we have made. This is the continuous theme in this book as he furthers his stance that these numbers don’t matter unless we are able to improve the lives of people in every way.

Interestingly he points out that when we want to work for the betterment of the country, we don’t necessarily have to join the civil service, which is still a coveted job.

The private sector, which is associated with capitalists, has a very important role in bringing about growth per se and hence has a very important place in the production matrix.

He surely makes us think when he draws comparisons between citizen and customer welfare. Capitalism obsesses with the latter as we work to sell products and services and hence say that the ‘customer is king’. But we need to go beyond and look at citizen welfare, which involves focus on social aspects such as education and health. This is important because even today we applaud any incentive in the budget for the industry but scorn any welfare measures, labelling them as  freebies.

The cost of market obsession

That’s why he also argues that the market is not the best solution because whenever it is left to these forces, the dice are in always in favour of the moneyed class. This kind of marketisation has, in his view, led to increasing inequalities in the country in terms of wealth and income over the past 50 years. This may not be an extreme view given that global studies on the same also highlight this development. In a similar vein he argues against too much competition not just in the market and across countries, but also in schools and the education system.  It leads to rising inequality, which is clearly visible in the job market.

He makes other interesting points when it comes to reimagining the economy. The ageing population needs attention, which is addressed well in developed countries but not in ours, given the size. Further, education needs to lead to productive jobs generating sustainable income. Here the reader can identify with numerous people employed in the logistics chain where scurrying across towns and cities is just not sustainable in the medium run. Further, in today’s world we cannot work without thinking of ‘sustainability’ and this is a joint responsibility of all countries where there is need for collaboration. Environment degradation has already affected us and will rapidly affect nations in times to come if enough is not done.

He warns against some of the quick fixes that policy makers tend to depend on to get results, which though look impressive to begin with, tend to falter along the way. A good example is increasing the number of people with skills but without growth in number of jobs. Similarly, reducing taxes and giving subsidies to attract investments reduces funds with the government to spend on education and health, resulting in deterioration in quality of human resources. Making it too easy for employers to fire workers, which is a pet demand from industry, reduces the incentives to employers to invest in skilling employees, thus lowering overall levels of skills in the country.

Maira’s ultimate message is that we need not argue about whether the state or capitalist runs the economic enterprise. It should focus on how we treat people and work for them. In a way this is also of paramount significance as we need to have a prosperous society to even keep the capitalists’ bells chiming. A point that can be made here is that today when the private sector is lamenting unsold products because of inflation, the reason is also that the workers are probably not being paid adequately even while shareholders reap substantial benefits. Therefore, their models must necessarily work to enhance the wellbeing of workers.

Maira shows consistency in all the books that he has written where he emphasises the need to look at the social aspects of growth numbers. His ruminations while writing the book in exotic Landour are an extra which readers will relish as he takes them along the sequestered paths that inspired him to write this book.

Reimagining India’s Economy: The Road to a More Equitable Society

Arun Maira

Speaking Tiger

Pp 320, Rs 599

India-UK Free Trade Agreement: A $34 billion game-changer for exports and employment: Indian Express 25th July 2025

 A positive outcome of the tariff saga started by the US is that countries are getting together to sign deals with one another. The Free Trade Agreement (FTA) with the United Kingdom was finalised in May and has been consummated by the signing of the deal. This would be India’s biggest deal signed in 10 years and UK’s fourth since its exit from the EU. India has signed, with alacrity, a deal with the UK which will raise the total volume of trade to around $34 billion per annum from the present levels of around $2-25 billion. More importantly, it represents the first of many steps undertaken to sign deals with other nations to leverage mutual benefits.

The India-UK FTA would eliminate duties on 99 per cent of Indian exports to England. India will gain mainly through higher exports in fish products, chemicals, jewellery, leather products, readymade garments and electronics, which are largely labour-intensive, and will in turn benefit the small and medium enterprises (SMEs) specialising in these products. Intuitively, this will be a boost for not just the SME group per se but also for employment, as such treaties are signed with other countries, too. Units in Tirupur, Surat, Ludhiana, Chennai, and cities in Assam and elsewhere would stand to gain. The present deal seeks to eliminate tariffs on a majority of products that previously faced duties ranging from 4 to 16 per cent. Exports could rise potentially by 20-40 per cent, depending on the responses of the concerned industries.

Advertisement

From the UK’s point of view, there would be free flow of goods such as automobiles, whisky and gin, among others, which will also help push up employment, thus bringing about symbiotic benefits to both countries. There would be easier access to around 64 per cent of UK’s exports to India. Further, as Indian companies invest more as part of the expansion plans in the UK — it can go up to £6 billion — there would be more jobs created which can cross the 20,000 mark. The effective tariff rate for goods from the UK would come down from 15 per cent to 3 per cent, which includes duty on whisky coming down from 150 per cent to 75 per cent immediately and to 40 per cent over a period of 10 years.

One area that will work well for India is agriculture, covering various crops as well as fisheries. This includes spices, vegetables, fruits and pulses. As India works to leverage the strength of its agriculture, this FTA provides space for expansion and will take us closer to the target of $100 billion which has been targeted by 2030. At the ground level, there would be streamlining of the sanitary and phytosanitary regulations in the UK, which has hitherto been a major hurdle in the export of farm products.

The other significant benefit for us would be in textiles where duty-free exports would be permitted. This is significant as countries like Bangladesh, Pakistan and Cambodia have had the advantage of similar structure, making it tough for our exports, presently in the region of just $1.5 billion. This comes at an opportune time when there could be other pressures on our textile exports to the US.

A similar gain can be seen in the case of engineering, where our exports were just $3.7 billion to the UK, which imports as much as $195-200 billion from the world. With the free trade agreement in place, it should be possible to double our exports to the UK. Similar benefits can be seen in pharma, electronics, software, jewellery, etc. In fact, the NHS would start to use generics manufactured by India — a big boost to the industry.

At the individual level, there has also been a deal on allowing Indians to work in the UK on a temporary basis with fewer pressures on paying for social security being one of the main gains. Indians would gain from cheaper import of higher-end cars as well as chocolates and whisky, with the duties coming down substantially, thus making them more affordable.

How can this deal be viewed? First, it is something which provides a thrust to our exports and hence employment. Second, furthering relations with the UK opens the door to negotiate with other nations and the EU should be next on the radar. Third, such a deal also provides a template to be followed when it comes to negotiating one with the US, already in the discussion stage. Fourth, the deal has focused on an entire array of goods and while manufacturing always looked to be on the cards, the fact that agriculture has a lot to gain is significant as we are harnessing the strength built in this sector. This will help to make the sector more commercial and farming more remunerative as such deals are struck with other nations. Finally, this deal reflects the government’s strong commitment to boosting exports as part of its broader effort to integrate the Indian economy into global supply chains.

Spectrum: A Template For Railway Reforms In The Next Decade Free Press Journal 22nd July 2025

 

The focus on railways has largely been on introducing faster sophisticated trains, adding new lines, developing metro systems, etc., which has added quality to the services. As the government would continue to spend on railways, this would be an opportune time to also bring in reforms to align with services in other model countries

The government’s capex over the last 10 years has been concentrated in two areas besides defence. These are roads and railways. The focus on railways has largely been on introducing faster sophisticated trains, adding new lines, developing metro systems, etc., which has added quality to the services. As the government would continue to spend on railways, this would be an opportune time to also bring in reforms to align with services in other model countries. 

Two areas come to mind here. The first is to reform the overall systems in certain aspects of its functioning, which will enhance security and quality. The second is privatisation of railway stations to enable the railways to earn a return from the same. This will fall in the category of leveraging assets to create new revenue streams. 

Given the series of learnings from various incidents in the last year or so, attention can be paid to the security issue. First, the train compartments in suburban trains need to have automatic closing doors. This will reduce the chances of commuters getting injured while travelling on trains. This is necessary to make travel more humane for millions of people. 

Second, the concept of general compartments in long distance trains needs to be done away with. It has been observed that this service is generally used by the relatively less literate people in lower income groups. The compartments are overloaded with 2X the capacity, if not more, which leads to other problems such as brawls and accidents. All tickets should be sold on the basis of reservations. This will lower the chances of stampedes at railway stations where passengers rush in to get seats. 

Third, the safety equipment used should be made first in class to eschew accidents which have taken place in past due to faulty rails, signaling, etc. Fourth, the compartments need to be changed or revamped to make the toilet systems modern in terms of disposal of sewage. Fifth, all railway stations need to be fenced completely just like airports to ensure that the perimeter is sealed and that it is open only to passengers. This will ensure that touts and petty criminals do not have access to these facilities. 

Last, the capex of the government could also address the issue of lengthening platforms across the country and levelling them to enable trains with higher capacities to run based on feasibility as well as ensure safety of passengers boarding or alighting from trains. This will also address the issue of general compartments being dispensed with. We must have futuristic planning, buffering in a higher number of passengers.

These suggestions are basic hygiene issues that can be addressed quite comfortably with the requisite budgetary allocations. In fact, the Western Railways in Mumbai had lengthened all the city platforms to accommodate 12 coaches from 9 in a seamless manner, which shows that the ability to implement is quite good. 

The other aspect is privatisation of railway stations. The model works on similar lines as airports, where there is an enhancement of facilities combined with user charges. It has been seen in India that when fares are increased, traffic is rarely affected, as people have to travel and the railways provide the connection to most places in the country. As a corollary, the modernisation approach can include these user charges. 

First, entry to all stations should be for travelers with the ticket code allowing the same. While visitors should ideally be kept to minimum, it may not be possible to exclude them given the different age groups that travel. There can be a substantial increase in the platform ticket fare from Rs 10 to Rs 50, which will automatically reduce the number of persons coming to see-off families and friends. 

Second, there has to be an overhaul of the porter system, a closed group as of now, which exploits passengers. The charges that are fixed must be made mandatory for the porters, with penalties for any deviance. Simultaneously, introducing lifts and escalators will enable passengers to handle their own luggage. 

Third, the other exploitative service at stations pertains to taxis. A prepaid facility should be made mandatory with a GPS tracking system to ensure that all fares are tracked on a real time basis. Fourth, the refreshment stalls need a revamp to ensure hygiene. This is something that the developer can fathom in terms of the number of outlets as well as pricing. While ideally the pricing must be kept on the lower side, given the financial background of majority of the travelers, the demand-supply equilibrium can be achieved by an implicit price discovery process. There can be differentiated outlets to cater to those travelling by higher classes. 

There is a cost involved in bringing about this major transformation in the look and experience on trains which can be recovered as user fees just as it is done in case of airlines. Broadly, around 350 crore passengers would be travelling by long distance trains this year of which 300 would be in the second class and 50 in the upper classes. Charging Rs 200 on an average for higher classes and Rs 50 for the second class can garner Rs 25,000 cr per annum. 

Various permutations can be worked out on this count, which can be either divided between the government and private partner or, else, retained with the latter in case the stations are auctioned out to private parties. These two ideas need to be picked up and pursued over the next ten years across the country, which will surely yield results. 

Ratings: What works with bonds can aid investors elsewhere too: MInt 22nd July 2025

 https://www.livemint.com/opinion/online-views/credit-rating-agencies-securities-and-exchange-board-of-india-debt-instruments-private-placements-ipo-grading-insurance-11752841665161.html

A template for skilling: Financial Express 22nd July 2025

 One of the anomalies in our system is that there is talk of demographic dividend where there is a large young population. At the same time there is a constant lament that we do not have adequate trained youth who can be hired for various jobs. This is a serious issue of demand and supply, which on deeper thought leads to the question of skilling the population. So, while we have a large number of youth with varying levels of education, the skill gap is still quite high. That there is scope to improve on this metric is a no-brainer.

There should be a medium-term strategy to bring about an alignment. There is some urgency given that the large-scale spread of use of technology and artificial intelligence can exacerbate the problem. Post-Covid, there has been a tendency among companies to gravitate more toward using technology that is displacing labour.

Skilling must begin in schools

First, there is a need for students in schools to be exposed to different crafts such as rudimentary carpentry, plumbing, electrical jobs, etc. These are skills which would be required all through one’s life. While presently the majority do hire such workers for their jobs, having the knowledge helps in times of emergency. At the school level, the mind is also alert and receptive to acquiring skills. This is evidently the case with sports and should be extended to other skills too. Ideally, this should be a part of the curriculum for all schools. This can be kept mandatory for two years in the 9th and 10th classes.

There can be a buy-in with the boards to set aside some marks for completing such courses. Several school boards also include foreign languages as part of the grading process. This can be included in a similar manner. In fact, schools have classes for art, craft, and physical training that can be extended to these skills too. Children from the lower income groups would be going to state-assisted schools—also called municipal schools—which should be covered in a more comprehensive manner. At a practical level, it may make sense for state boards to include these options in the curriculum and then expand to all-India boards depending on the outcomes.

Second, we need to have specific courses which look at honing these skills. Just like there are streams like arts, science, medicine, engineering, and information technology, there could be ones looking at practical skills that make students fit for joining industries such as construction, automobiles, or textiles that suffer from a skill shortage. By making it a formal course with a degree instead of a certification from vocational training institutes, an element of seriousness is introduced. In fact, there can be aptitude tests to guide students on what courses suit them best. The qualifying marks in school, which is normally fixed for professional courses, can be fixed at a lower level to draw students who are not good at academics. Also those who are unable to pass the school-level board exams can be nudged to these courses that are oriented more towards actual use of skills rather than textbook learning.

Link training to real jobs

Third, the employment-linked scheme of the government introduced last year was largely successful. The concept of having internships with companies is a novel way to get the youth have access to on-the-job training. Some public infrastructure spaces can be the perfect ground for grooming such students. There is a lot of investment in railways, ports, airports, among others. These organisations can accept students who have finished basic courses in schools and colleges and need to be provided jobs on real projects.

Here, the government can get youths to register with their qualifications in a database that can then be evaluated periodically and candidates short-listed for internship programmes. The companies which require such labour and are willing to train them in the requisite skills can also be enrolled. In this manner, demand and supply for such skills can be matched. The government can offer incentives in the form of a tax break or allow the cost to be reckoned under corporate social responsibility. A similar modality has been implemented in the internship scheme announced last year by the government; it can be modified for this purpose.

The problem is acute today given that employment generation has been a challenge. Spaces like logistics, retail, and construction have generated a good number. While some jobs like delivery do not require specific skill sets, they may not be sustainable for the individuals in the medium term as one cannot build a career in the same. As more unemployed individuals join this workforce, the earnings tend to get depressed. Construction too has challenges where developers are not able to get skilled persons like carpenters, electricians, etc. The major headcount is in menial jobs, which again do not help one move up the income

Hence a relook at our education system is necessary where a separate opportunity can be created for those who aren’t good in academics. In this manner the skill requirements in industries such as construction, auto repairs, sewing, handicrafts, etc. can be filled by creating a formal workforce with these qualifications. The on-the-job training via internships should focus more on manufacturing rather than services as this is where there is more value to be added. Besides, when we are talking about India becoming a part of global supply chains in manufacturing, having a skilled manpower is an imperative. It must also be noted that the government is only an enabler and has taken the first few steps. The states need to join in focusing on fine-tuning the education systems, but at the end of the day it is private enterprise which needs to hire and train labour. This can be a template that can be pursued for the next five years or so until 2030.

Companies controlled costs in FY25: Interview with Business Today 20th July 2025

 https://www.businesstoday.in/magazine/interview/story/companies-controlled-costs-in-fy25-bank-of-baroda-chief-economist-madan-sabnavis-484450-2025-07-14

Book review: Talent management: Financial Express 13th July 2025

 When one thinks of a startup, one visualises a pack of youngsters with unbridled enthusiasm working round the clock, trying out new ideas that might work. There is fun and hard work and the environment is electric. This is a stylised fact about startups. But there is also the case of founders or staff gradually losing steam after some time or looking for jobs outside. There could be conflicts within, and so on. An area often not looked at seriously is human resources development, where everything is taken for granted. Often, one of the founding members takes on this role to get the right people. But after a point there is need for professionalism. This is the starting point of Saurabh Nigam’s book, People Powered Startups.

The title is apt, because startups are all about people who make an idea fructify, and there has to be focus on these resources. These people could come with different backgrounds in terms of qualifications and experience that make these ventures work well to being with. But, managing this eclectic set of people with different skill sets and egos becomes very important. Therefore, attracting, retaining and nurturing talent becomes very important as the organisation evolves, and requires a different approach to people management. These structures, according to the author, need to be flexible and dynamic and cannot mimic those of large companies. Very often this point is ignored by these startups and there could be less attention paid to these finer points.

Some of these points can be elaborated upon. To attract the right talent, the employer branding is important and often the founder names become the brand. This, it has been seen, has been the most powerful factor when it comes to attracting talent. The talk is always about a venture which has been started by a person X with a team that has A, B and C which are all very well-known names in the industry. The approach to recruitment has to be creative and compensation carefully structured to balance between the ability to pay in the medium term as well as being above the market to entice potential recruits. In a way there is some risk being taken by the potential recruit in joining such an enterprise. Here, employee engagement becomes important because it should not be the case that the best come and leave because they feel out of place.

The author provides several examples to drive home these points. He also emphasises the  importance of compliance and a positive workplace culture, giving examples of Zerodha and Zomato —names that will have high reader-connect. He also emphasises the need to have the right performance management systems in startups with continuous feedback, along with goal setting, so that a direction is clear for everybody. Within feedback he shows how important it is to stress on strengths, areas of improvement, collaboration, communication, etc. All these traits are even more important in a startup organisation.

Managing people may not sound important when a startup is in the formative years. However, when there are myriad changes taking place in terms of size of the organisation, both in terms of turnover and people, HR management becomes critical. For navigating change there is a lot that needs to be done. This can include having leadership training programmes, for example. People who are good in doing a certain job would also have to be groomed as the firm expands in size. They need to move to a different level where they spend more time on strategy and less on implementation and have to build and lead teams. This will lead to better innovation, which will be the crux to accelerating growth of the form.

There are three specific themes which Nigam talks of in the area of innovation in HR. One is the frontiers of the workspace, which has become progressively very important. There has been an increase in the concept of remote working as well as hybrid models that have to be considered, as the new generation of professionals is no longer attracted to coming to work every day physically.

Further, the transformative potential of AI is something that cannot be ignored and has to be part of the process of decision making. The other is the importance of DEI—diversity, equity and inclusion.

This, according to Nigam, can be a strategic advantage for the startup as it helps in building employee engagement. The last is of significant importance, where the wellbeing of employees is addressed.

Burnout is quite common in such setups and the job of the HR vertical is to ensure that employees are healthy and happy as these are preconditions to attain higher levels of productivity.

Another aspect that the author highlights which probably is taken for granted in such enterprises is the need for continuous learning and development. He gives several examples of what different companies, including Google, had done in their formative years to keep this box ticked.

Nigam also talks of conflict management that can be due to personality differences or even work related, which can cover goals of the startup or the strategies to be followed.

In today’s age, having a strong social media strategy is important as this is probably the strongest mode of communication that reaches out to a large audience. This is the route chosen for creating a strong employer brand, which is important. This is quite a useful playbook for startups to see how many boxes have been ticked.

Do low interest rates spur growth? Business Line 12th July 2025

 https://www.pressreader.com/india/businessline-mumbai-9WVZ/20250712/281809994915281?srsltid=AfmBOoooYY_tT_EVsdTKq8WQKm_XBBw41hU8vsnWzmINRm1CTpUx5QKv

India's consumer habits cannot be second guessed as they evolve: Mint 30th June 2025

 https://www.pressreader.com/india/mint-mumbai/20250630/282106347632934

Devolution dilemma: Centre, states and a way to share the pie better: Indian Express June 28, 2025

 https://indianexpress.com/article/opinion/columns/devolution-dilemma-centre-states-and-a-way-to-share-the-pie-better-10093634/