The Memory of Water

The Memory of Water

In a chanced upon BBC programme on homeopathy, after nearly an hour of supposedly rigorous reporting and apparent scientific enquiry, it concluded that homeopathic drugs were nothing but water. If they worked, it was because of a placebo effect. And if millions of people swore by its efficacy, well, there was still no scientific basis to it.

Science, of course, has a way of refusing to accept what it cannot prove. Sometimes it even has difficulty approving of ‘new proof’ that comes along to upset old apple-carts. That is how it is rigged, the much revered scientific temperament.

But science can scarcely keep up with the effects of technology, spawned out of its own womb, let alone the alchemy of success which invariably has a magic ingredient, difficult to define, let alone prove.

Take thespian Amitabh Bacchchan’s recent endorsement of the JustDial initial public offering (IPO). He was offered and bought some 67,000 shares in the private entity just before it went public, and began to be traded on the bourses. He bought his shares for under Rs. 7 lakhs @ Rs. 10 a share, sold to him at par value. Now, newspaper reports say he has made over 10,000% profit in about 4 months, his shares being valued at over Rs.6.5 crores now.

Of course, no one besides Mr. Bachhchan, the promoters, some of the underwriters, their friends and relatives, often also the friends and relatives of the promoters, and other such privileged insiders were allocated shares at par.

The rest of the investing public had to buy them for several hundred rupees each in order for it to prove particularly magical for those who got the shares at par. And then, because of the well- calculated Amitabh Bacchchan charisma as the endorser and compere of the IPO’s publicity, the JustDial shares shot up very healthily on listing, having been over-subscribed some 11.6 times.  Thereby putting a smile on the faces of even those who bought/were allocated the shares at several hundred rupees each.

This success shows there has been astute planning and execution in the JustDial public launch, but only a modicum of the exactitude of science in it. The most of it is a potpourri of the product’s track record, its intrinsic merits, the foresight of its owners, and the formidable Amitabh Bacchchan star- effect as its endorser.

Brands actually have very little to do with science but a lot to do with well-researched aspiration. If a brand can exude the virtues of ‘style’, ‘quality’, and  enduring ‘value’, and project a little exclusivist snob-appeal at the same time, it is going to be a very successful brand indeed. Dreams do sell. The promoters of JustDial and Mr. Bacchchan and all the brands he endorses, know it. And public adulation and appreciation is a product of a chemistry the likes of which no laboratory can create.

The other ingredient of success, its magic, is anticipation. To see something of an opportunity early, and proceed to act upon it that is. Multi-brand retail for example, may not be off the ground yet, some 12 months after the investment rules for it were announced, but apparently there has been a four-fold increase in  FDI into ‘agricultural services’.

These include cold-storages, warehouses, and other back-end infrastructure essential to conduct a modern multi-brand retail operation. The other sweetener is that 100% FDI is permitted  under the automatic route for  the setting up of such infrastructure, affording the future entrants such as Walmart, Carrefour and Tesco complete control over its ‘value chain’. This, at 100% ownership, though the front- end is not to be 100% foreign- owned for the near-term future.

India has received a modest Rs. 70 crores in FDI into the ‘agricultural services’ sector in the April-June quarter of the current fiscal, after RS. 875 crores last year. Areas covered include seeds, cattle breeding and livestock rearing, horticulture, nursery services etc. apart from cold storages and warehousing.  It’s the induction of new technology and know-how crucial to running things on an internationally acceptable level.

India is already, even with genetically-modified cropping , the world’s largest fruit and vegetable grower, has the greatest area under wheat, rice and cotton cultivation, and produces the second biggest global crop of rice and wheat. But it loses an estimated Rs. 50, 000 crores worth of agricultural produce every year due to primitive post-harvest infrastructure. This in a country of so many poor people is particularly sad. But, as our laws and attitudes change, so do our realities.

The fact is that inadequacy and lack of infrastructure is a perennial problem that causes demands for new states, parts of which feel perpetually and justifiably neglected. Hyderabad with its lop-sided development outstripping all else, is not Andhra Pradesh, but is still a prize, and of the biggest, to fight over!

Meanwhile statistics flow over us from every side to illustrate every point. Another recent report says the country loses $68 billion or some Rs 414,800 crores in GDP due to electricity shortages. We are falling behind year after year in keeping up with ever expanding demand in this sector. Elsewhere, a report says most companies use 30% of their energy bills in diesel for their generators thereby putting up its production costs.

Our poverty statistics are also over-cooked, as it is impossible to live on the per capita incomes stated by the Planning Commission and some absurdist Congress spokesmen. The Food Act, on the other hand, will be difficult to implement. It also begs the question why do we waste food on the one hand and give it away on the other?

The choking off of most liquidity has seen GDP Growth on its downward spiral, fresh shoots in core sector activity or exports notwithstanding. The Finance Minister talks of being confident of trimming the current account deficit by cutting non-plan expenditure. It is possible, of course, but still a less than dynamic solution to the problem. Going without is much less than generating more.

The rupee fall and future threats of greater volatility when the US ‘tapers’ its stimulus, has crippled several large chunks of the economy including the oil, aviation, automobile, real estate and banking sectors.  Besides, if the US does not raise its debt ceiling in a matter of days from now, the IMF thinks it could be catastrophic for the world economy including us.

But even on our own patch, we need less text book economics and rigid science that has shown meager results, and a lot more imagination to get things going again.   

(1,092 words)

October 6^th 2013

Gautam Mukherjee