Skills Development for Higher Education

At a  juncture when the percentage of employers facing difficulty in finding skilled workforce is as high as 81per cent in Japan, 71 per cent in Brazil, 49 per cent in US, 48 per cent in India and 42 per cent in Germany, one wonders what is it that we are turning out from our universities and colleges. Even for India- the youngest country in the world, if the percentage is 48 per cent, it is an alarming situation, to put it mildly, because it means that half of our companies and businesses are finding it difficult to run their daily operations due to the lack of skilled workforce. 

India has the largest number of young people (age group of 14-25) and the highest global unemployment rate- these are pointers to the nature and efficiency of our education system. Against this, the job market is increasingly being redefined by specific skills. Nobody runs businesses and companies the way people did, let’s say, 20 years back. The entire skills set required to work in a company that competes at the global level has undergone change, and education, particularly Higher Education, cannot afford to overlook the new realities of the 2^nd decade of the 21^st century.  

Across the world, skills development has been addressed with considerable seriousness. Sample this, according to figures of 2008, the percentage of workforce receiving skills training is 96 per cent in Korea, 80 per cent in Japan, 75 per cent in Germany, 68 per cent in UK and 10 per cent in India. Moreover, it is estimated that 75 per cent of the new job opportunities to be created in India will be skill-based. While the skills set has changed and employers look more and more for 21st century skills in the job seekers, it is required to take a close look at the academic nature of our curricula and their mode of transaction. It is not that we do not have enough degree holders in the country; we have a number of them but the world of business and industry thinks that they are not employable. Surveys and studies are conducted at regular intervals and it is reiterated in the surveys and studies that 80per cent workforce in rural and urban India does not possess any identifiable marketable skills.

Against the oft-quoted figure of 500 million skilled workforce required in India by 2022, sample this:

“Of late, employability of graduates coming out of our educational system is becoming a matter of great concern. I am told, only 25per cent of the general graduates across all streams have employable skills.” E Ahamed (Minister of State for HRD and External Affairs)

Let’s face it, we are not Finland that has more than 40per cent of its population going into vocational education. Compared to vocational education, our students are found pursuing degrees in colleges and universities of higher education. One cannot change that fact, all one can do is to turn this into an opportunity, turn universities and colleges into skills development hubs.

Leaders of business and industry in India have regularly voiced their concern over the lack of skilled manpower ready to be absorbed in various sectors. We have the government intervening by establishing National Skills Development Council (NSDC) and several other skills development initiatives in the pipeline but unless our Higher Education wakes up to this and responds proactively, the youths coming out of it would find it hard to claim a place in the world, and thus the growth of this country will also remain under threat because without the requisite human resource the magic growth is impossible.

In a country where there is a large dropout rate of children quitting school at young age and a minimal percentage going into higher studies, do we have more choice than tapping into this small percentage by upskilling them in order to render them readily employable? In sync with this, S Ramadorai, Advisor to the Prime Minister in National Skill Development Council, says,

“60per cent of India’s 1.2 billion people are in the working age group. However, only 10per cent of the 300 million children in India between the age of 6 and 16 will pass school and go beyond. Only 5per cent of India’s labor force in the age group 19-24 years is estimated to have acquired formal training. Despite this, our economy is clocking an 8.5per cent growth. Imagine what could be if we could leverage our demographic dividend fully.”

Let’s also understand that in a large country like India, only government agencies and system cannot accomplish this task of upskilling the youth. Private companies with requisite experience in skills training may also be roped in to expedite the process of enhancing the skills development of youth in colleges and universities. In today’s world, particularly in India, the future and relevance of Higher Education is inextricably linked with Skills Development; the earlier Higher Education accepts this and acts accordingly, the better it is for the country and its growth. Skills Development is not an additional course that can be added to a university curriculum but it requires to be integrated into the training and education of a youth who will have to be readily employable and competent enough to run the operations of a company or business in India. A youth seeking job in the market today is expected to have salient life and soft skills which he has no clue about till s/he faces an interview. Higher Education does little to address the skills requirement of a youth raring to go into the world and make a mark. To make it amply clear as to how Higher Education has got to address the issue of skills development and employability, no better evidence than what Planning Commission’s Approach Paper to the Twelfth Five Year Plan says:

“There is a need for a clear focus on improving the employability of graduates. Indian higher education is organized into ‘General’ and ‘Professional’ streams. General education which is an excellent foundation for successful knowledge based careers, often fails to equip graduates with necessary work skills due to its poor quality. Graduates now require the skills beyond the basics of reading, writing and arithmetic (the ‘3Rs’).  Skills such as critical thinking, communication, collaboration and creativity (the ‘4Cs’) are now important in more and more jobs. Accordingly, there is need to focus on the ‘4Cs’. Special emphasis on verbal and written communication skills, especially in English would go a long way in improving the employability of the large and growing mass of disempowered youth.” (101)

In simple translation, it means that Higher Education in India cannot live on an ivory tower any more. It has to reconsider its role in the growth and development of the country. Unlike the days of yore, now it should ensure that students studying in colleges and universities are equipped with soft skills such as communication proficiency. Unlike the existing model of university education, skills development may be integrated into the core practices of a university.

Policy papers in India are beginning to show their commitment to skills development and employability through it but that is not enough either. The true reflection of their commitment would be when they make it mandatory to establish Skills Development Centres at university and college campuses and provide specific funds for the same. These Centres should be endowed with the task of training each and every student of the college and university in terms of soft skills and life skills and prepare them for the jobs they dream of. Ideally, in a perfect India of hopefully some not-so-distant future, universities should buzz with skills training and the youths coming out of universities should show us the way forward. Ideally, a youth completing his/her education should not hunt for the job; in fact, the employers should come to the doorsteps of the university and look for these skilled youths. Is Higher Education ready for this? This is the key question because the answer will determine the future of this country.

How they fool us, the outraged

As long as we engender a society that allow law enforcers to get away with their own crimes, law breakers will only be emboldened. We must make Police Complaints Authorities around the country meaningful.

Outrage is a good thing, when it is against injustice. It shows that society does have a line it does not want crossed. It also puts pressure on the system to respond. Here's the problem with it though, it tends to ignore what is already unclear. No new clarity emerges from either the outrage or the response. Media coverage of outrage does not help with clarity either, unless the media is looking deeper.

So it will be with the entire rape debate in India. In fact even before public fury over the Delhi gang-rape has quietened, as it inevitably will, media has already started breaking more rape stories from around the country. More accountability will be demanded, as will the death penalty.

Yet, if there is one government authority that is laughing all the way to the bank, it's India's police. Here is why.

The Delhi HC has reportedly asked the local police to show it the chargesheet before initiating proceedings in the gang-rape. Why would a High Court do that? Chalk it up to experience. For years the accused in rape cases have not been sincerely prosecuted, and people have been let go with lesser charges or sentencing than was to fit the crime. The Delhi Police has a particularly soiled reputation already, and responding to this week's outrage as it were, the High Court stepped up the ante.

If a High Court in the capital territory of the nation does not trust the police's due process, what does that tell you? Let me come back to this question in a different way.

Each day in India, in buses, trains and crowed public places, women are groped, fondled, teased and made the subject of lewd remarks. Eve teasing is so common, women have simply resigned themselves to it. Women just try to avoid being in situations where they will be groped. They do not hope for much else. They do not bother going to the police. Such is the reputation our police have in handing their cases.

The police need to first accept complaints from women. Instead, as is widespread in India, they dilute complaints, humiliate the victims, and eject them from the stations. Their starting point is a judgement of the victim. And much of the problem lies here. When it comes to women, most policemen are part of the original problem. Sexual harassment of any kind - the most violent kind or a lesser kind - is about the power that one sex wants to show it can wield over the other. Usually it's men over women.

Still, the outrage in the nation is missing what the police and the governments are hoping will not come up.

Police Complaints Authorities

In 2006, the Supreme Court ordered the state governments to create one PCA per district in every state and a PCA at the state level headed by a retired judge. Human Rights groups called it landmark order. The apex court of the nation wanted PCAs to look into complaints citizens had against police misconduct or abuse of power. It could be everything from custodial torture or death or rape to not accepting FIRs to falsifying evidence.

The SC had wanted policemen to be penalised for not doing their job. It also wanted to reduce government-interference in police transfers. It wanted PCAs to act against errant officers after hearings and investigations.

Imagine this: The Supreme Court of this nation believes, that unless there was an authority to check the police, India's police would not serve its taxpayers. It would continue to operate to 'control' and 'keep order', for its political masters at state and centre, the way the British had setup the system.

Just from the woman's point of view, here is how PCAs with teeth, had they come into force, would have made an impact in bringing down rape and crimes of lesser nature. Women today would be able to file complaints against police officials with the PCA when they do not act in fairness with them at a police station. They would able to walk into police stations with dignity after a crime to get protection, not further abuse.

If errant officers were penalised quickly, police would not themselves not behave with the kind of impunity they do now.

Yet, the majority of India's states have ignored the SC's order. Only six states setup so-called "PCAs" and mostly toothless ones, and with shady appointments that violated the principle of independence the SC wanted. Delhi set up its public grievance commission as its PCA, precisely what the SC did not order. India Together reported on all this in August 2012, as a review on whether states had complied with the SC's order. In the few states with PCAs, police officers ignore hearings and go about their business as usual. State governments themselves do not follow their own PCA verdicts to act against abusive officials. Television media have mostly let this story go.

Have you even once heard of action against police official for not investigating a complaint by a woman? Are the police who mangle charge sheets, FIRs,and file false charges every prosecuted? 

In the meantime, thousands of men freely roam around the country to grope and molest women at will in public places. It takes a lot of force and pressure to get a complaint registered, even with witnesses. It is no one's case that PCAs will fix all our problems. There is much else in our society's attitude to women itself that needs attention.

But if police do not act on the most basic violations, it is a free ride for men. It sends a message of what the real social rules in the country are, not the ones on the books. The culprits feel that it is a natural order for them to be able to do what they want and get away with it. And if PCAs with teeth kept a watch on the police, it would send out the opposite message that as a society we will uphold the dignity of our women.

I do not buy the death penalty argument. From outrage to revenge is a short hop. You can sentence as many losers as you can to the gallows. More will appear, especially from amongst those who have little to lose, with a very low sense of self-worth and self-esteem.

As long as we engender a society that allow law enforcers to get away with their own crimes, law breakers will only be emboldened. This is why corruption is such a problem in this country. Like our other authorities, our police system does not have an integrity of its own to justify doing the right thing, or to remedy a wrong done to restore public faith. The PCAs will not fix all the problems but they would have sent a message to outraged women that someone would listen to them and dispense justice. That is one course-correction our society needs.

The Delhi gang-rape case is also chance for the media to get its act right. For all the coverage that rape cases get (read: ratings), very little coverage if any has been given to how state governments everywhere from Delhi to Tamilnadu have said 'we don't care' to the Supreme Court.

It is easy to drive up fury. The illumination really needed is on what the governments and police do not want you to know, and therefore not demanded. The demand for death penalties in fact is a lovely distraction for our babus and cops. 

Complaints? Who's listening? 
Six years ago the Supreme Court issued a detailed order listing the steps needed to insulate police work from politics, and to make it more accountable. But the progress since then has been slow. 

Last November, the Bangalore city police booked a case against three citizens, charging them for assaulting a traffic police officer. The main accused was Amulya Somashekhar, a volunteer of the civil society movement India Against Corruption (IAC). Amulya, her mother and friend were charged. Amulya, in turn, said that the officer had assaulted her for refusing to pay a bribe.

The local IAC volunteers asked for an independent inquiry, only to realise that there was no independent body which accepts complaints against the police. The police, instead, were preparing to conduct their own internal inquiry into the matter.

It was in 2006 that Supreme Court ordered that every state and district should have an independent authority to handle citizens' complaints against the police. This body, named Police Complaints Authority (PCA), is to be headed by a retired judge and can hold hearings on allegations of police misconduct and atrocities. Its final order would be binding on state governments. Karnataka still does not have a functioning PCA; although the government has - under pressure to comply with the SC order - appointed a head of the Authority, it does'nt have any staff or office yet!

Other than setting up PCAs, the SC ordered six key measures for police reform, in its 2006 judgment in Prakash Singh Vs Union of India. The reforms include establishing minimum tenure for senior officers and a procedure for appointing DGPs, setting up a body to make policy decisions on policing, and another to decide on promotions etc., so that political interference decreases in routine police work. Since police is a State subject in the Constitution, the states were supposed to bring these reforms.

Around the same time as the SC order, the central government-appointed Soli Sorabjee Committee prescribed a Model Police Act for states to follow. This committee was among the many that successive governments had set up since 1977 to recommend police reforms. Most states were following the archaic Police Act of 1861. The new state Police Acts were to have provisions for PCAs as well.

Only a few states have Police Acts now; those that have PCAs are even fewer. Six years after the SC order, only six states have PCAs - these are Assam, Haryana, Tripura, Uttarakhand, Goa and Kerala. Of this, only Kerala has district-level PCAs, in addition to a state-level PCA. Meanwhile, cases of illegal detention and custodial torture by police continue to be reported across the country.

Five Union Territories - Pondicherry, Chandigarh, Delhi, Daman and Diu, Dadra and Nagar Haveli - also have PCAs. Of these, Chandigarh's has been the only well-functioning PCA. Pondicherry's PCA has been defunct since its Chairman's retirement in June 2011. Delhi does not have a separate PCA; instead its existing Public Grievance Commission (PGC) - an independent body that accepts complaints on all government agencies - was given additional responsibility as a PCA. A single PCA has been set up for both Daman and Diu, and Dadra and Nagar Haveli.

Existing PCAs ineffective

State governments have done much to tweak the composition and powers of PCAs. The court order had clearly prescribed how PCA members should be selected, and how investigations should be carried out in response to complaints.

Each PCA is to be headed by a retired High Court/Supreme Court judge, selected by the state government from a panel suggested by the serving HC/SC Chief Justice. Other members should be similarly selected from among members recommended by the State Human Rights Commission, State Public Service Commission, or Lokayukta. Appointments should never be done directly by the state government.

But so far, all state governments have made only direct appointments, which are perceived as political appointments. The directions on the composition of the PCA have been blatantly ignored, like in the case of Haryana, where the PCA has only a single member, the Chairman, who is a retired IAS officer.

PCAs are supposed to have only one retired IAS and IPS member each, and no serving officers are allowed. But Kerala state PCA has two serving officers - Principal Secretary and Additional DGP - as members. Its district PCAs have the Collector and district SP as members. Having serving officers, especially from the police, defeats the purpose of an independent, approachable public authority. It also violates the court's order that all members should work full-time for PCAs.

In the case of Kerala and Haryana, the violation of the court order is written to the state laws itself. Their state Police Acts prescribe the current composition. Tripura Police Act has followed the SC order in principle, but violated it in practice. Tripura has two retired police officers in its PCA, as opposed to one such officer allowed as per the Act. Goa is yet to its Police Act; the PCA in that state was set up based on a Government Order.

The SC order also prescribed that at least one member in the PCAs should be a woman. But only four PCAs - Uttarakhand, Pondicherry, Tripura and Chandigarh - have women members. This is as per the NGO CHRI (Commonwealth Human Rights Initiative), which was an intervener in the Prakash Singh case, and has been following up on the SC order implementation.

Another problem that makes PCAs ineffective, is the investigation process. Only Assam has its own independent investigators, as mandated by the court order. All other PCAs forward complaints to the police department, asking it to investigate its own officers. Most complaints  are on illegal detention, refusal to file FIRs, custodial torture, filing of false cases, and extortion. The CHRI report says that many complainants reported being threatened by police, on filing the complaints.

In most cases, the police report would say that the officer is not guilty, and PCA would dismiss the case. Retd Justice T A Wilson, Chairman of seven district PCAs in Kerala, says that 95-97% of cases get dismissed based on police reports. "It is only in remaining cases that any hearing happens."

"Police Acts/GOs have no provisions for independent investigators. So PCAs cannot demand these from the government," says Devika Prasad, Senior Programme Officer for police reforms at CHRI.

PCAs also have no power to take action against police officials who do not cooperate. Often police officers do not attend hearings, and cases may lag for years.

Hardly any police officers punished so far

The number of complaints to PCAs is high, but action against officers is rare. In many cases where PCAs ordered punitive action, the order was ignored by the government. PCAs can order either a departmental inquiry or filing of FIR against officers, and government is bound to follow this. Governments ignore the order using a provision in State Acts/GOs that allow them to 'disagree' with PCA orders. The Acts say that "recommendations are binding unless the state disagrees with the order."

Devika Prasad says that this loophole is often used. "Even if government disagrees with an order, a departmental inquiry should be held before closing the case. But cases are closed or neglected. There have been hardly any cases in which action was taken," she says.

Chandigarh PCA, one of the more active authorities, had recommended suspension of many officers. According to Chandigarh administration's official website, the PCA received 237 complaints from September 2010 (when it started) till June 2012. It disposed of 204 of these, recommending disciplinary action in 50 cases, against 90 policemen.

But no action was taken against these officers, and a PIL came up for hearing in the Punjab and Haryana High Court this June, saying that the PCA should be given more teeth. At the hearing, Chandigarh Administration clearly responded that PCA was already exceeding its jurisdiction by ordering suspensions and transfers. It said that PCA was only a recommending body, and that government could disagree with its recommendations.

Lack of government support also prompts PCAs to pass weak orders. It took Haryana PCA one-and-half years to pass its first order for punitive action. Most PCAs also choose to recommend departmental inquiry, rather than filing of FIR. Since departmental inquiries are easier to ignore, most have been lagging for years.

There is no clear data on what action was taken on PCA orders; most often PCAs themselves are not kept in the loop. Only Goa PCA has been proactively asking police to submit action-taken reports.

Justice Wilson says that he has recommended action in 10-15 cases since May 2010 (for all seven districts combined), but was not informed of action taken. "I only heard some rumours;  the concerned officials have not informed me. The problem is that government does not want to take action," he says. Even then, these district PCAs continue to get cases, some of them as much as 30-40 new cases per month.

The CHRI report quotes some complainants as saying that the PCAs'Â weak orders were not worth the risk of complaining against the police, and that such orders would work against them if they went to court later.

No funds, no rules

Many PCAs do not have well-equipped offices, staff or funds. Police Acts and GOs do not mention anything about funding of PCAs, and sometimes no allocation is made. For instance, Kerala's district PCAs still function from the offices of each Collector, who also gives them discretionary funds. There is no state government funding, and the Chairmen are not given vehicle allowance to travel across districts.

Also, the rules for daily functioning of PCAs have not been made, making it difficult for the public to understand or question them. The format for filing complaints, communication on hearings etc., are randomly prescribed. When a case is dismissed, the reason for dismissal is not clearly mentioned in the orders. PCAs themselves are supposed to make the rules and get them approved by government. Only Uttarakhand PCA has sent draft rules to state government so far. PCA sent the draft in 2008, but the government returned them without approval in 2011.

States like Assam and Haryana have laws that make it difficult to file compaints - in these states complainants have to file a sworn statement against the accused, along with a fee. If the complaint is judged frivolous, the complainant can be punished with a fee or penalty.

Other states stuck

According to CHRI, five states - Andhra Pradesh, Madhya Pradesh, Mizoram, Tamilnadu and Uttar Pradesh - have ignored the SC order completely. Others have drafted Police Acts, or passed notifications on PCAs, but will have PCAs with similar problems as the existing ones.

Gujarat PCA, for example, is to have serving police and government officers in state PCA; its district PCAs will have district SPs as Chairmen. Himachal Pradesh's Lokayukta will act as its state PCA.

The Supreme Court had set up a committee earlier to monitor implementation of its order. This committee, headed by retired SC Justice K T Thomas, submitted its final report in 2010. The report blamed states for their unwillingness to set up PCAs. The SC then sent notices to some states asking for explanation. Prasad says that there have been no hearings of late.

Existing PCAs too are facing more hurdles, while some are becoming more proactive. The Goa government now plans to dissolve its PCA through its new Police Bill. The Bill, yet to be passed, says that Lokayukta will act as the PCA. On the other hand, Assam and Tripura PCAs recently published their performance reports. The Tripura authority has outreach programmes now to create awareness. The Haryana PCA has a website and accepts complaints online.

The autonomy and routine functioning of these bodies, as envisaged in the Supreme Court order, remains a distant dream. 

Want to change India? Let’s begin with ourselves

Let’s not kid ourselves and point fingers. Yes, Prime Minister Manmohan Singh seems spineless unless it involves US economic interests, Home Minister Sushil Kumar Shinde’s comments on protests against the Delhi gang rape seem to suggest he is little more than a court jester, and the much-hype-but-no-substance Rahul Gandhi seems to be doing what he does best – hide in his mother’s pallu. As if that were not enough, we are blessed with an opposition that’s just as terrible a circus as our government.

But this innocent 23-year old did not die this horrible death thanks to a brutal gang rape, or because of them. She died because of us. Because we Indians refuse to see girls and boys as equal, because we are quick to blame what women wear rather than put our own attitudes and prejudices under the harsh glare of truth, because we have a kya kare, kalyug hain, hota hai. theek hai attitude when it happens to someone else, because we blindly vote for men like Abhijeet Mukerjee because he represents a certain political party, or worse, refuse to vote at all, balefully claiming that there is no hope for India and preferring to take the voting day holiday as an opportunity to get out of the city.

And when we vote, do we vote just for so-called ‘development’ that only benefits the rich and the middle-class like us? Or will we like Nobel laureate Amartya Sen has repeatedly urged us to, look beyond GDP and growth rate figures that the power hungry like Narendra Modi use, to real development that really matters – food security, infant mortality, female infanticide, maternal mortality, female literacy, etc?

Which is why, despite having a per-capita income nearly double that of Bangladesh, India still has a lower life expectancy than Bangladesh, has a greater proportion of underweight children and has far higher child mortality and infant mortality rates.

If we ignore these truths, unless we change India from the bottom up, India won’t change – whether you impose a death penalty or not, men will still rape and as vast sections of India see increasing hopelessness, evils like Naxalism and terrorism will only spread their cancerous tentacles. While we are horrified at the brutality of the crime, let’s also not ignore the lives of some of the rapists in this case. It doesn’t  justify the seriousness of the crime, but, as the Indian Express reports, it’s also a fact that these men were mostly school dropouts because they couldn’t afford education, came from broken families, one’s wife died of cancer – and with his economic status he surely couldn’t afford proper treatment, no opportunities and lived in hovels.

Tough laws won’t change our attitudes nor completely stop crime when some perpetrators see little hope in life anyway and use rape not just as an opportunity to satisfy lust but also perhaps an opportunity to explode in anger at a perceived slight (in this case when the male companion accompanying the girl slapped one of the rapists on being taunted) and use rape as a weapon to get back at society that he is angry at because it ignores him and treats him like rubbish.

It’s like America’s school killings that chillingly seem to be as regular as clockwork – para-dropping God into American schools won’t help, what is needed is a mindset change where Americans are willing to give up the right to own assault weapons, and heck that’s where God is needed!

So let’s hope the protests in Delhi won’t end, that they will spread throughout India, that each of us will participate till we bring about change. Why protest? If we don’t protest people like Shinde will continue to ask why he should care about protesters. If we don’t protest, a government that believes that they as rulers are above the law won’t be serious about implementing laws. Just this Wednesday, 18-year old Paramjit Kaur, committed suicide in Punjab because of police insensitivity and inaction towards her terrible gang rape. While Paramjit is gone, unlike other cases, the Akali Dal government realised action was needed and two local policemen have already been dismissed from service and a senior police officer suspended.

I guess the only reason that happened was because that government got the shivers seeing the scale of protests in Delhi. Else, given a typical Indian government’s insensitivity, their ‘we are the rulers, why should we care about what happens to the common man’ attitude will just continue. Why did the Delhi Police behave so terribly towards protesters? It is because the government gave them the leeway to do so. The police’s attitude in India is a direct reflection of the government’s attitude. If that needs to end, the only way out is protest, till inept governments finally get booted out at the ballot box.

But protests alone will achieve very little and whatever they do achieve, will be fleeting. It’s more important to bring about change in our mindsets, our prejudices. Let’s put them under the harsh glare of truth. As a man once said over 2000 years ago to a mob that was about to stone a woman caught cheating, “Let he who is without sin cast the first stone”. That mob melted, because the truth has the ability to sear us.

And let’s vote. Vote not for sexist buffoons, outright liars, people who have blood on their hands, people who project just a one-sided model of development in their hunger for power, but let’s make an effort to really look for the right people – and for that, I suspect many of us will have to look into our mirrors. Because if we believe we know what India needs, perhaps it’s time we step up to the task.

Gourmet Food: The New Item on Indian Consumer Menus

Pegged at US$1.3 billion, the gourmet food market in India is expanding at a compound annual growth rate of 20% and is set to cross US$2.7 billion by 2015. The trend is driven by multiple factors like rising disposable incomes, exposure to diverse cuisines via travel and the media, and the increasing number of specialty restaurants in the country. The opening up of foreign direct investment in retail is expected to give a further boost to this category.

During their recent trip to India, chefs Gary Mehigan and George Calombaris of the television series Masterchef Australia, were in for a surprise. One of their engagements in the country was to judge dishes prepared by contestants at Godrej Nature's Basket gourmet stores in New Delhi and Mumbai as part of a social media campaign organized by the retailer. Over 700 participants submitted their recipes in this contest and, of these, six finalists were chosen to compete before the two chefs. Mehigan and Calombaris were pleasantly surprised to see that they enjoy a considerable fan following in India.

The popularity of these international chefs is indicative of the steadily growing interest of Indians in international gourmet cuisine. There are other signs, too. Take New Delhi's bustling INA market. Once a hub for expatriates to shop for ingredients for dishes like the French pot-eu-feu, Hungarian goulash, Lebanese kibbeh or British Yorkshire pudding, the market now attracts a large number of Indians hunting for handcrafted ham, almond tagine sauce, Swiss truffles, porcini mushrooms, Greek olives and much more.

"The gourmet retail space has witnessed rapid expansion in the last five years and is expected to grow manifold over the next few years," says Pratichee Kapoor, associate vice president for food services and agriculture at New Delhi-based research and consultancy firm Technopak Advisors. "Currently pegged at US$1.3 billion, the gourmet food market in India [including retail, cafes and restaurants] is growing at a compound annual growth rate [CAGR] of 20% and is set to cross US$2.740 billion by 2015."

Kapoor notes that retail brands such as Foodworld Gourmet, Foodhall, Godrej Nature's Basket, Mason D'Gourmet, Le Marche and Nuts 'n' Spices are vying for a big share inthe growing pie with a wide product range and premium offerings.

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Take Foodhall from the Future Group, one of India's largest retailers. Launched over a year ago as a premium lifestyle food destination, Foodhall targets the well-travelled urban Indian consumer. The store also has a working bakery and an open kitchen to serve freshly cooked food. At present, there are two Foodhall stores -- one in Mumbai, spread over around 15,000 square feet, and another in Bangalore, which is around 30,000 square feet. The Future Group plans to open around 10 more Foodhall outlets over the next two years. These will include both large format as well as smaller satellite stores.

Godrej Nature's Basket, the retail venture of the consumer products-to-real estate conglomerate the Godrej Group, started in 2005 as a single fresh food store. In 2008, it launched a range of gourmet food items and has grown into 24 stores located in Mumbai, New Delhi, Bangalore, Pune and Hyderabad. These stores are somewhat smaller than Foodhall locations, at around 2,000 square feet per outlet. According to Mohit Khattar, managing director at Godrej Nature's Basket, the average capital expenditure is around US$70 to US$80 per square foot. Each store stocks 5,000 to 10,000 unique products depending on its size and location. "Some stores have done fabulously well from the first quarter onward but on average most stores tend to break even in the seventh to eighth quarter post launch. We are open to looking at expansion within the cities that we are already in, as well as new cities," says Khattar.

Knowing what to stock on the shelves can be a tricky proposition. While some products are driven by customer demand, there are others that Khattar and his team bet on based on their experience. "This keeps us ahead of the curve. Customers [like] to check out what's new at our stores," Khattar notes.

Organic Haus, a store that imports organic products from about 22 German and Austrian brands, is also in expansion mode. The first outlet opened a year ago in the city of Ahmedabad, the second one launched in Mumbai earlier this year, followed by a store each in Gurgaon and Pune recently. The total investment in all four stores is approximately US$3.6 million. Organic Haus is now looking at Bangalore for its next store. Besides the company-owned stores, the firm also plans to expand its presence across the country through shop-in-shop outlets and a franchise network. An e-store is also on the menu.

"We will gradually expand our offerings to include baby foods, a greater variety of gluten-free products, milk and milk alternatives, as well as snacks," says Dilip Doshi, chairman of Organic Haus. "Indian consumers are increasingly becoming health conscious and opting for organic products, [which are] recognized for their [health] benefits. This growing awareness of the importance of non-synthetic, naturally produced organic products [is] encouraging us to expand."

Health is a growing concern among Indian consumers and, thanks to the stringent international certification, imported organic products are more readily adopted by them.

Interestingly, the quinoa and amaranth grains, which were once part of the staple Indian diet but lost relevance as new food fads set in, are now back. This time, they are appearing on the gourmet shelves and capitalizing on the health craze -- even despite a steep price tag. Quinoa, for instance, is priced at US$10 for 500 grams.

Of course, gourmet by definition makes a dent in consumers' wallets. So while 200 grams of Finello mozzarella cheese costs US$60, an equivalent of the same in a popular Indian brand such as Amul costs about a dollar. And while 100 grams of Clipper organic decaff coffee costs US$18, that of Nescafe costs half that amount.

KEY DRIVERS
So why is there this new fascination with gourmet food among Indian consumers? Harish Bijoor, brand strategist and visiting professor at the Indian School of Business, notes that the trend is in line with India's growing economy. "As people rise in the pyramid of achievement and earning scales get tipped progressively, [they] rise from basic levels of wants, needs, desires and aspirations," he points out. "Food that is basic gives way to food that is not-so-basic [and] gourmet food is at the pinnacle of not-so-basic food. Gourmet food grows as an economy progresses and people start tipping upper-end income scales. India has a sizeable chunk of the population that is tipping top-end incomes -- a chunk as large as the entire population of Japan."

Bijoor suggests that gourmet food has a great future in India. "And this future does not stop at caviar and truffles alone," he says. "In the developed and developing world at large, greed is considered to be good. Gourmet food is greed driven. This greed is not crass; instead, it is a refined greed. When people [are not able] to eat too much food of low value, they look for too little food of high value. Gourmet food is best eaten in small measure."

According to Technopak's Kapoor, the increasing number of specialty restaurants in India is further evidence of the growing demand of Indian consumers and their widening culinary horizons. She notes that Indians are getting more adept at choosing their "daily bread" from menus featuring exotic dishes thanks to the increasing number of international fine dining specialty restaurants, such as Hakkasan, Le Cirque, Megu and the B Bar, that are making a beeline for India.

The Le Cirque at New Delhi's luxury hotel the Leela Palace is the first Asian outpost for the iconic French-Italian New York restaurant. The restaurant, which opened about a year ago in the Indian capital, offers a wine list that includes 80 Italian and 100 French labels, in addition to signature dishes like arancini risotto, tuna in pistachio crust and paupiette of black cod. Megu, which opened earlier this year, again at New Delhi's Leela Palace, offers a quintessentially Japanese culinary experience. Fresh seafood and many other ingredients are imported from Tokyo's Tsukiji market. Megu's wine list has over 600 labels and 60 varieties of sake from Japan. A meal for two (without alcohol) at these restaurants could cost anywhere around US$200 to US$250.

Anurudh Khanna, executive chef at The Park hotel in Delhi, has been watching the changing customer tastes closely. "Nowadays, the customers are well accustomed with and aware of the various cuisines and the rare gourmet ingredients available all across the world," he says. "They actually know their food well. For example, they want to know whether the truffles being used in their dish are summer or winter, black or white. Similarly, they are choosy about having a particular cheese in their pasta...."

Restaurants at The Park use a host of gourmet ingredients, including bratwurst sausages, foie gras, crabs beluga, edamame beans, single-origin rare Jamaican chocolates and brie de meux cheese. Until recently, Khanna had a problem sourcing most of these items, but now he has a dedicated chain of local suppliers including Global

Gourmet, Caspian Caviar and Olive Tree Trading. "The demand for various exotic cuisines and their ingredients have increased so tremendously that everything is now easily available in India across various supermarkets and departmental stores," he notes. Orga Foods in Coimbatore, Tutto Bene Delicatessen in Pune, Bon Appetit in Pondicherry ... gourmet food in India now has several addresses.

FROM REEL TO REAL
The increasing number of food shows on television is also playing a key role in refining the Indian palate. Consider TLC, a channel belonging to Discovery Network, and its impressive array of iconic hosts, such as Nigella Lawson, Bobby Chinn, Anthony Bourdain and Andrew Zimmern, among others. Currently, TLC has over 25 food shows covering all types of cuisines ranging from German and Mexican to Asian and Italian. In November, it launched Man vs. Food Nation and will soon roll out Season 2 of another food show called Jamie at Home.

"TLC introduced cuisine programming to the Indian [audience] way back in 2004. [Since then], it has gained traction and is enjoyed by [a wide range of] viewers. We launch over 10 food series every year on TLC," notes Rahul Johri, senior vice president and general manager of South Asia for Discovery Networks Asia Pacific. Johri suggests that typically consumers "want to experience in real life what they watch on television -- from fine dining to wine tasting sessions."

Avni Biyani, who is at the helm of the Future Group's Foodhall, agrees. Speaking on the sidelines of the Fine Food India Expo held recently in New Delhi, Biyani added: "We are also trying to make the consumers aware about subtle differentiators. For instance, we are importing potatoes from Holland. We tell [people] which varieties of potatoes are good for fries, for curry and for a mashed preparation. Visual merchandising in our stores is also driven by the same intent -- we stock products according to cuisines so that it is easier for people to pick up ingredients that complement each other. So the sesame oil goes in the Chinese section and the olive oil in the Italian."

Pointing out that just about 30% of business at Foodhall stores comes from expats, Biyani notes: "It may not be right to say that the palate of Indians has changed, but we can safely say that it is evolving." The Fine Food Expo 2012 saw over 150 exhibitors from developed food markets across the globe.

Recently, the German wholesale player Metro Cash & Carry also introduced an international foods section with a range of more than 2,000 gourmet food items at its wholesale outlets in Yeshwanthpur in Bangalore and Zirakpur in Punjab. The group runs 12 wholesale centers in India. "As the Indian palate is being increasingly exposed to global cuisines, the demand for international and gourmet foods is growing significantly ... hence this initiative," said Rajeev Bakshi, managing director of Metro Cash & Carry India at the launch of the section.

It is estimated that on an average, imported food produce accounts for around 10% to 15% of the total organized food retail space in India. According to a study by Technopak, dairy imports (cheese, creams and dips) grew 160% over the previous year to touch US$185 million in 2011. The second fastest growing import category is wine, having expanded 58% over the same period. The packaged food segment has grown by 45%.

NOT WITHOUT HICCUPS
There are challenges to be met, though. Godrej Nature's Basket's Khattar lists a few: Multiple licensing requirements, surging realty prices, import restrictions, constantly changing laws, the absence of good storage facilities and the Agricultural Produce Market Committee (APMC) Act. (The APMC Act impacts all retailers who sell fruits and vegetables. The Act dictates that all fresh produce must come in through the mandis or wholesale markets and not directly from the farmers to the stores.) "The low awareness regarding specialized food, not just among the masses but also the workforce, is another challenge in growing the industry manifold," adds Khattar.

Technopak's Kapoor believes that the opening up of foreign direct investment (FDI) in retail could be a game changer for the gourmet food category. "Though foreign players are keen to enter the market, the restrictions on imports and high customs duty have kept them at bay for a long time. Now with FDI opening up, we [are likely to] witness the growth of such players."

Another Day, Another Scam: How the CAG Report Impacts India's Overall Outlook

Yet another major scam has surfaced in India. According to a recent report by the Comptroller and Auditor General (CAG), allocation of coal blocks without auctioning them has led to a loss of US$33 billion to the national exchequer. This is more than the highly-publicized scam involving the licensing of telecom spectrum for 2G wireless in 2008. But, while political skirmishing continues in Delhi, the CAG appears to be on less sound ground this time, according to some.

At the India Economic Forum meeting in Mumbai earlier this year, one of the speakers was the Comptroller and Auditor General (CAG) of India, Vinod Rai. He expressed surprise that he -- a backroom numbers man -- was being recognized at the meeting. "The CAG is not used to such publicity," he told afterward. "In a short while, I will be anonymous once more."

Rai had sprung into the limelight at the time because of the CAG report on the telecom scam involving the licensing of spectrum for 2G wireless in 2008. The CAG is the auditor to the government and, in this watchdog role, it had uncovered various irregularities in the allotment of 2G telecom licenses. The loss to the exchequer was put at Rs. 1.76 lakh crore (US$32 billion).

Now Rai is back in the limelight due to another big-ticket scam, this one involving the allocation of coal blocks to private companies. The loss figure for this incident, according to the CAG, is Rs. 1.86 lakh crore (US$33 billion). The report on the scam was one of three tabled in the Rajya Sabha -- the upper house of Parliament -- on August 17. The first dealt with alleged irregularities in the implementation of the public-private partnership for Indira Gandhi Airport in New Delhi. GMR, the private partner in the project, disputed the report, saying, "Delhi International Airport has not received any undue benefits from the government before, during or after the bidding process." The second report said Reliance Power had gained Rs 29,000 crore (US$5.2 billion) by diverting excess coal from the mines allotted for its Sasan project in Madhya Pradesh. This was denied by Reliance Power CEO J.P. Chalasani. "The CAG charges are incorrect," he said. "The CAG calculations are erroneous."

But it is the third report, titled "Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production" that has set off another round of chaos in Delhi.

According to the report, "Delay in introduction of the process of competitive bidding has rendered the existing process beneficial to the private companies. Audit has estimated financial gains to the tune of Rs 1.86 lakh crore (US$32 billion) likely to accrue to private coal block licensees." The private companies mentioned in the CAG report include respected names such as the Tatas and the Birlas.

Opposition parties have been holding up the functioning of Parliament. They have called for the resignation of Prime Minister Manmohan Singh; the coal portfolio was in his charge for part of the time covered in the report. The government has fought back with the argument that as no coal has been evacuated from these mines as yet, the loss is actually zero. This is new Finance Minister P. Chidambaram's contribution to the debate. During the telecom scam, Telecom Minister Kapil Sibal (who was appointed after the previous minister -- and principal accused -- A. Raja was sacked and later arrested) had similarly argued that the loss in the telecom scam was nil. Neither minister has done his image any good, critics note.

Although the scam is snowballing in Parliament, corporate India has been dismissive. This is not a case of breaking laws, they say. Nor, it seems, has anyone made any money. Yes, the private companies will gain in the long run. But they argue that the incident is equivalent to the government giving land at a discounted rate to an IT company to set up a campus. People don't typically grumble about that, as it creates jobs.

"What is the scam?" asks Tata Steel managing director H.M. Nerurkar. Speaking at the annual general meeting of Indian Refractory Makers Association, he said: "There was a policy and people have followed the policy. Coal is just a pass through. If coal prices increase, it will be reflected in power rates." Adds S. Raghunath, professor for corporate strategy and policy at the Indian Institute of Management in Bangalore (IIMB): "The CAG observations may not be totally fair to those who were responsible for implementing government policy. In many areas, the projection of reality by different stakeholders has made accurate analysis difficult." But The Times of India reports that the Central Bureau of Investigation is preparing to file several first information reports (FIRs) in the scam. So there may yet be uncovered dimensions.

Meanwhile, even as Chidambaram was detailing his zero-sum theories, he received a boost on another issue from the Supreme Court: Hearing a petition filed by Janata Party president Subramanian Swamy, the court held that neither Finance Minister Chidambaram nor bureaucrats of the ministry of finance had any role to play in the telecom scam.

But Chidambaran's charge as the new finance minister to jumpstart India's slowing economy is slipping deeper into inertia. First, it was the anti-corruption crusade by Anna Hazare, which pushed the government into policy paralysis. That threat was defanged when Hazare disbanded his movement and decided to join politics. But now the CAG report has sent the government back into a standstill.

"The cacophony over the CAG reports is pushing back reforms," according to the Associated Chambers of Commerce and Industry of India (Assocham), India's apex chamber of commerce. A survey by the chamber found an overwhelming number of economists and industry leaders agreeing that recent government initiatives were being drowned out by the political noise. "The national economic agenda is being used as a football in the political arena," the chamber noted. "Reform measures like foreign direct investment (FDI) in retail ... and banking and insurance liberalization are certainly going to be pushed back by a few years." Says Assocham president Rajkumar Dhoot: "This is sad because the economy needs a non-partisan approach. The GDP growth has touched a nine-year low of 6.5%.”

PARALYZE OR MOBILIZE?
"The CAG report is a political millstone around the government’s neck," adds Rajesh Chakrabarti, a professor of finance at the Hyderabad-based Indian School of Business.

"It will further reduce the government’s already eroding credibility and provide wholly understandable fodder to an otherwise directionless opposition." M.V. Rajeev Gowda, professor of economics and social sciences and chairperson of the Centre for Public Policy at IIMB agrees, calling the report "another blow to the government, [which is] already reeling from various allegations of scams. It is not at all clear that the huge numbers that the CAG has come up with are accurate or meaningful. But the report piles up more ammunition against the government, this time targeting the prime minister himself, someone who has always been above allegations of corruption. So it will likely lead to more policy paralysis."

Raghunath of IIMB has a different view. "The recent CAG reports will enable the government to introduce further reform moving toward equity and transparency," he says.

"These developments will contribute to keeping the system relatively clean and from going out of kilter. Continual intervention in the policy and its deployment in different sectors will ensure that the entire regulatory process moves toward greater efficiency and transparency."

The companies that have been named aren't likely to face much flak, Gowda states: "Since the media keeps focusing on the allegations against the government, the corporates named as beneficiaries have escaped attention," he notes. "In any case, unlike in the 2G scam where there were clear transactions between corporates and corrupt politicians, it is not clear that a direct link can be shown in the coal case."

More worrisome is the potential impact abroad. "The CAG report worsens our image," says Gowda. "The country is seen as a milieu steeped in corruption. This is not a good image to attract global players." Adds Chakrabarti of ISB: "In the global competitiveness report of the Davos group, corruption features as the biggest problem for India in investor perception. Two years ago, it was a distant second to infrastructure."
The immediate impact is likely to be on private equity and FDI, and foreign institutional investor (FII) purchases, experts say. FII inflows have been strong. For the month to August 24, foreign investors had pumped in US$1.3 billion into Indian stocks. But experts feel that was in the expectation of fresh reforms under Chidambaram.

Anecdotal evidence about FDI is mixed. Furniture retailer IKEA's demand for some relaxations in the rules for sourcing from small-scale units is unlikely to me met. "I will not allow any relaxation that affects my people and my industry," says Vayalar Ravi, Union minister for micro, small and medium enterprises. At the same time, six other retailers, including Tommy Hilfiger and Brooks Brothers, have submitted proposals to set up 51% owned units in India. This is allowed for single-brand retail. Multi-brand retail, over which the controversy is continuing, may also eventually be permitted entry. But the state governments will be allowed to take the final call on whether such companies should be allowed to operate in their territories. This is unlikely to enthuse multinationals who will find the Indian market truncated and segmented.

"India has a 5%-6% growth rate with a large population base and a large market," notes Pankaj Karna, managing director of Maple Capital Advisors. "It is growing faster than most markets in the world. This makes it difficult for strategic players to ignore the country, especially if they are not in India as yet. So I think FDI interest will continue across sectors. Small and mid-cap plays are likely to increase; I don’t see any let up on that. The issues will be the big ticket areas. Proposals significantly impacted by policy and environment in India today will wait and watch. Overall, big inflows will certainly get impacted, while investors will continue to be on the sidelines, or experiment with small-ticket plays on India." In June, the latest month for which figures are available, FDI into India fell 78% to US$1.2 billion compared to US$5.7 billion for the corresponding month in 2011.

Private equity is also getting cold feet. "Investors are reassessing their commitment and allocations," says Deepak I. Shahdadpuri, managing director of BCP Advisors. "In the short term, I think we will continue to see a slowdown as foreign investors take stock of the global macro and India-specific issues. The recent CAG report only highlights the level of 'alleged' scams and corruption embroiling India Inc. and the government. Combine this with the lackluster performance of private equity as an asset class to date in India. (Between 2004 and 2011, India has only returned US$24 billion versus the US$72 billion in capital invested.) It's not surprising then that private equity is in reassessment mode."

"I think there are two-three trends that are emerging," adds Karna of Maple. "New fund raising is going to be most impacted. Governance issues, fundamental economic indicators, and the exchange rate have affected overall returns from India for existing funds. For existing PE funds, I think there is actually enough committed capital. But deployment velocity may get impacted."

"However there is no denying the potential opportunity in India," concludes Shahdadpuri. "Investors will return once their confidence in the government is restored." The fear is that it may take a new government -- elections are due in 2014 -- for that to happen.