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This article delivers a very good understanding of what it's like to be an entrepreneur in India. Kudos. One of the coolest things I've read about Jio is somet
by reactspa 6y ago
This article delivers a very good understanding of what it's like to be an entrepreneur in India. Kudos.
One of the coolest things I've read about Jio is something I read on a previous post on HN: that the name and logo were designed to be the mirror image of oiL.
> Later, Reliance profited from other parts of India’s protectionist regime. Their synthetic fiber arbitrage worked like this: to make manufacturers self-sufficient, the Indian government allowed them to import raw materials only in proportion to the goods they exported. Ambani persuaded the government to let him import polyester filament yarn in proportion to the nylon goods he exported. Nylon was available cheaply in India, polyester filament was 600% more expensive when locally sourced in India than its cost when imported. So Ambani set up a closed loop: make nylon clothes from locally-sourced materials; sell them abroad; use the import quota to import polyester filament; sell it at home. And, just to be safe, he took care of the demand side, too: at least according to The Polyester Prince, Ambani sent money abroad to buy his own products at duty-free ports, and then sold them for cheap, gave them away, or even dumped them in the ocean.
All true except in many cases, the exporters didn't need to actually export anything. If the right bribes were paid (Congress Party's modus operandi), it was all a "receipts game"... you just needed receipts that "proved" that you had sent goods abroad, that money had hit the bank, etc.
There was a huge fertilizer subsidies scam in India a couple decades ago which was another case of "receipts game". (The scam involved subsidies [given by the government] for using fertilizer [similar to Agricultural Subsidies in the USA]. Turns out that most of the subsidies were going to politicians who weren't using any fertilizer, they were just providing the correct receipts that "proved" that they had bought -- and presumably used -- fertilizer.)
Finally, I worked at a bank in India for a short while, just after the major devaluation of the currency in the nineties (the Indian Rupee was devalued by over 50% in two phases). Around midnight, the day before the surprise announcement by the Reserve Bank of India (and the Government of India), a bunch of treasury operations staff at the bank got marching orders to go to the office and sell off, as much as they could, the Indian Rupee, and buy foreign currencies. They worked all night. The client made millions from this bank's operations alone. The client? Reliance.
- puranjay 6y agoIt's an open secret in the Indian bureaucratic establishment that Reliance will hire retiring bureaucrats and get them to work their networks to find out what's happening in the government before it actually happens. I don't even blame Reliance. These were the cards they were dealt with. They just knew how to play them better than anyone else.
- pankajdoharey 6y agoIndia is a tough market with overregulation and corruption as the article points out. Being an Entrepreneur must be hard in India.
- hawkoy 6y agoYeah. Increasing number of entrepreneurs here prefer to incorporate and operate their companies in other countries and sell there.
- raghava 6y agoJeff Bezos himself isn't spared from Jio tax[1], what chance does a measly entrepreneur stand against Ambani and Jio! [1]https://techcrunch.com/2020/07/23/amazon-reportedly-in-talks-to-buy-a-9-9-stake-in-indias-reliance-retail/ https://techcrunch.com/2020/07/23/amazon-reportedly-in-talks...
- gramakri 6y agoSpeaking of scams, my favorite is the fodder scam - https://en.wikipedia.org/wiki/Fodder_Scam https://en.wikipedia.org/wiki/Fodder_Scam . Large amounts of receipts and paperwork for fodder, sheds, farms, cattles... none of which existed. It was all an epic work of fiction!
- ra7 6y agoIn recent memory, another favorite is the 2G spectrum scam - https://en.wikipedia.org/wiki/2G_spectrum_case https://en.wikipedia.org/wiki/2G_spectrum_case. The Telecom minister taking bribes and bending rules to grant licenses to his favorite companies, the Prime Minister unable to control his own minister and letting the scam occur, the propagation of "zero loss" theory. It was very... entertaining to see corruption exposed at the highest level in the government.
- EHEFctspyh 6y agoFrom the 2G spectrum scam wiki page you shared "....On 21 December 2017, the special court in New Delhi acquitted all accused in the 2G spectrum case including prime accused A Raja and Kanimozhi.[12] This verdict was based on the fact that CBI could not find any evidence against the accused in those 7 years. As per the judgement, "Some people created a scam by artfully arranging a few selected facts and exaggerating things beyond recognition to astronomical levels..." I am not sure what to make of this, more so considering that this happened when the opposing party, BJP, was in power. - Was there no scam at all? Was there a scam but they just accused the wrong people? Is the judiciary and/or CBI complicit? And, if so is BJP complicit too, because ideally they should have every incentive to ensure the rule of law is enforced to the fullest degree considering that the accused were from the opposition Congress party?
- signal11 6y ago> Was there no scam at all? Mihir Sharma’s book Restart (2014) has a good chapter on this. The answer it seems was, no. It’s not in the national interest to charge maximal prices for natural resources, and this is followed by many countries even today — China and the US included — and such rights are given away for a nominal or modest price, and always with a view to ensuring wide market participation. Even European spectrum auctions have a clear aim of ensuring a sustainable market of 4 or more effective competitors. This has been historic practice in India also. For instance, the British colonial government gave India’s other big industrial group — the Tatas — rights to coal and iron mining in the late 1800s for free to set up India’s first steel plant. Even the BJP’s own Vajpayee government did this. The CAG’s “notional loss theory”, he argues, is rubbish. And looking at the events in India’s once vibrant Mobile Telecom industry, which has has now been reduced to an effective duopoly, one can argue Sharma was right.
- febed 6y ago> The client made millions from this bank's operations alone. The client? Reliance. That's a huge revelation, why wasn't this news? Reliance is the perfect example of crony capitalism.