Google's Page named as business person of the year for 2014

Google's Larry Page has emerged as the 'business person of the year' for 2014, edging past the likes of Alibaba co-founder Jack Ma and Facebook CEO Mark Zuckerberg, according to Fortune magazine.



Page, who is Chief Executive Officer (CEO) and co-founder of Google, came on top in the 20 global corporate leaders' list compiled on the basis of various factors including company's performance, leadership style and total shareholder returns, the magazine said while bringing out its list.



Apart from Jack Ma and Zuckerberg, others in the race included Apple's Tim Cook and fast food chain Chipotle co-CEOs -- Montgomery Moran and Steve Ells-- and Fedex chairman & CEO Fred Smith.



Besides, five women have made the cut to the top 20 list.

Interestingly, Amazon's Jeff Bezos, who led Fortune list in 2012, failed to make in to the top 20 list.



As Google's core business continues to thrive, Page, who topped the list, is making "huge bets on new technology -ingestible nanoparticles, balloons that beam down broadband- that could define the future," the magazine noted.



Page and his company have packed a lot of evolution into just over 15 years of existence, it added.



The women contenders were Ultra Beauty CEO Mary Dillon, ITT CEO and President Denise Ramos, TJX Cos CEO Carol Meyrotwiz, Theranos Founder and CEO Elizabeth Holmes and Williams-Sonoma President and CEO Laura Alber.



The list is based on various parameters like financial results of the company including 12-month and three year growth in profits and revenues, company's stock performance and total shareholder returns over the same periods.



Besides, several non-financial elements like business influence, leadership style, strategic initiatives played a part in evaluation.

Improving an unworkable law

For the land-acquirer, the land act ordinance tries to lessen the indirect price of acquisition and transaction by diluting requirements for social impact assessments and referenda. For the land-loser, it not only retains all forms of compensation and rehabilitation, but also grows the number of those eligible for lucrative pay-offs

The government of India continues to search for the right way to do land acquisition. Last week, the Union Finance Minister announced an ordinance to amend the Land Acquisition Bill that his party, the Bharatiya Janata Party (BJP), had helped vote into law a mere 15 months ago. It had been in force for less than one year. That law, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR), had been pushed through by the United Progressive Alliance (UPA) in its dying days. It had many detractors. Private industry said that it was the biggest obstacle to growth. Most State governments, including several Congress-led ones, thought it was unworkable. I wrote that embedded in LARR were the seeds of its own destruction.

That LARR would be changed was obvious in the first weeks after the BJP stormed to power at the Centre. There were whispers and much speculation, but nothing official. Now, it is out in the open and we can pass judgement. So, what does this ordinance reveal about the thought processes of the leaders of the Modi government? Is this a new approach? Is it any better than the old one? What could have been done differently?

Focussing on the land-loser

We need to ignore the predictable noises being made by the usual suspects. The pro-business crowd, from Goldman Sachs to Dalal Street, can barely suppress its elation. Several pro-farmer groups, especially significant non-governmental organisations like the National Alliance of People’s Movements, whose ideas had formed the initial blueprint of LARR, have called this a giveaway to the corporate sector. Anti-BJP political parties like the Congress, the CPI(M), the Samajwadi Party and the Trinamool Congress have vowed to fight these changes with all their might. All these people cannot simultaneously be right.

“Compensating non-owners is a vital and non-negotiable element of LARR. How that will be achieved without the social impact assessments remains unclear.”

To get analytical clarity, we need to start from basics. LARR was meant to make the acquisition process just. It was designed in the mode of the Congress’s other landmark laws on information, education, and food — using a rights-based approach — where the primary objective was to deliver “fairness” to the people affected by land acquisition. LARR expanded the definition of project-affected people and expanded the rights, protections and compensations for people who lose land or livelihood as a result of acquisition. All these were laudable and necessary. But LARR was also a purely political and fundamentally bureaucratic approach based on little or no recognition of some simple economic principles — on land markets and on transaction and opportunity costs. The underlying presumption was that the price of land matters to the land-loser but not to the land-acquirer; as a result, LARR raised the price of land acquisition to unsustainable levels.

Price matters to acquirer and loser

This price is not simply the money paid for acquisition and rehabilitation and resettlement. That is just one component of price, its direct component. There is a second component, an indirect price. This includes (a) transaction costs, which include the cost of doing social impact assessments, conducting referenda, running the massive new multilayered acquisition bureaucracy, etc. and (b) opportunity costs, which arise from the time taken to conclude an acquisition — doing social impact assessments, conducting referenda, etc. — time during which capital is not invested, infrastructure is not created, and production does not take place. If all the steps defined in LARR were accomplished in the allotted time, each acquisition would require about five years; in practice, it could take a lot longer.

The Modi government’s ordinance — unlike the UPA government’s law — is based on the principle that price matters to both the land-acquirer and the land-loser. Their interests are opposed, because the land-acquirer would like to pay the least he or it can get away with, and the land-loser would like to get the most he or it can manage. So, how does the ordinance solve this problem? Quite simply, as a matter fact, by splitting the direct and indirect prices for acquisition and keeping the direct prices unchanged while attacking the indirect prices.

For the land-acquirer, the ordinance tries to lessen, as much as it can, the indirect price of acquisition, the transaction and opportunity costs that have been listed. This it does by weakening or removing the requirements for social impact assessments and referenda. For the land-loser, the ordinance not only retains all forms of compensation and resettlement and rehabilitation, but also grows the number of land-losers eligible for these lucrative pay-offs by bringing into the ambit of LARR, 13 categories of acquisition that had been excluded earlier. These include the Land Acquisition (Mines) Act, the Atomic Energy Act, the Railways Act, the National Highways Act, and the Metro Railways (Construction of Works) Act. These inclusions were indicated in LARR, but are accomplished in this ordinance.

The reason this ordinance is likely to work in the short term and the reason it may run into trouble in the long term is the same — the underlying land market in India. Land prices in India are now the highest in the world (with the possible exception of China, where, for approximately the same reasons as in India, prices have reached unprecedented levels). For most pieces of agricultural land, these market prices are several times higher than the possible returns from keeping the land in agricultural use. When these very high prices are quadrupled or doubled, it creates a windfall for land-losers, a fortune they could never earn from agriculture. The Modi government is betting that the vast majority of people will be dazzled by the money and will acquiesce to acquisition. And by vastly increasing the scope of LARR, by bringing under its ambit several more types of acquisition and many more people, the government and the BJP can claim to be as pro-farmer as anyone else (even if the enlargement had been envisaged in the original law).

For the land-acquiring interest — be it the private or public sector — reducing the time for acquisition by several years, and thereby reducing the opportunity cost, is a huge benefit. When this is topped up with the reduction or removal of the cash cost of social impact assessments and referenda, it becomes a windfall for the acquirers too. LARR had placed an impossible double-burden on land acquirers: pay double or quadruple the highest prices in the world, and wait for several years to begin work on the ground. The first burden remains and its consequences are grave. What those consequences may be must be carefully worked out by people competent to do so. But the second burden has been mitigated by this ordinance. It should make life easier for the land-acquirer.

Price factor

What, aside from partisan politics, could go wrong? There are many things, but I will mention just three. First, the assumption that everyone responds to price is incorrect in India. There are priceless pieces of land that no amount of money can buy. The Niyamgiri hill region in Odisha where the Vedanta mining project ran aground is an example. Without referenda it may be very difficult to identify priceless land; which means that deadly face-offs over acquisition will continue to flare up. Second, the social impact assessment was meant primarily to take stock of the non-land-owning project-affected population. Compensating non-owners is a vital and non-negotiable element of LARR. How that will be achieved without the social impact assessments remains unclear.

Third and most important: the price of peri-urban land has reached such levels in the most dynamic urban regions of the country, that just doubling it (even without the added transaction and opportunity costs) may make many public projects unaffordable and private projects uncompetitive (especially in a globalised economy). The blunt instrument of acquisition is already inappropriate in many such settings; using LARR, even after the ordinance, it may be impossible. New, creative methods that make stakeholders out of landholders must be devised, perhaps by following the better outcomes of some of the experiments being attempted in some States.

Is this ordinance a better way than LARR? Yes. Is there a better way than this? Very much so, and it is based on finding State-level solutions rather than these top-down, one-size-fits-all strategies devised by the Centre. And above all, as a friend says, what we need are good intentions combined with clear analysis and hard, detailed work. Unfortunately, all these are in short supply.

Citizenship (Amendment) Ordinance, 2015 Promulgated

The President of India has promulgated the Citizenship (Amendment) Ordinance, 2015 on January 06, 2015 with immediate effect which provides for the following amendments to the Indian Citizen Act, 1955: • At present one year continuous stay in India is mandatory for Indian Citizenship which is relaxed stating that if the Central Government is satisfied that special circumstances exist, it may, after recording such circumstances in writing, relax the period of twelve months specified upto a maximum of thirty days which may be in different breaks. • To enable for registration as Overseas Citizen of India (OCI) by a minor, whose parents are Indian Citizens. • To enable for registration as Overseas Citizen of India (OCI) by a child or a grand-child or a great grandchild of such a citizen. • To enable for registration as Overseas Citizen of India (OCI) by such spouse of a citizen of India or spouse of an OCI registered under Section 7A and whose marriage has been registered and subsisted for a continuous period of not less than two years immediately preceding the presentation of the application under this section. • In respect of existing PIO card holders central government may, by notification in Official Gazette, specify a particular date from which all existing PIO card holders will be deemed to be OCI card holders. The Indian Citizenship Act, 1955 provides for acquisition, termination, deprivation, determination of Indian Citizenship and other related aspects. The Act provides for acquisition of Indian citizenship by birth, descent, registration, naturalization and incorporation of territory under certain circumstances, and also for the termination and deprivation of citizenship.

Playing dumb on climate change

Scientists have often been accused of exaggerating the threat of climate change, but it's becoming increasingly clear that they ought to be more emphatic about the risk. The year just concluded is about to be declared the hottest one on record, and across the globe climate change is happening faster than scientists predicted.

Science is conservative, and new claims of knowledge are greeted with high degrees of scepticism. When Copernicus said the Earth orbited the sun, when Darwin said species evolved by natural selection, the burden of proof was on them to show that it was so. In the 18th and 19th centuries, this conservatism generally took the form of a demand for a large amount of evidence; in the 20th century, it took on the form of a demand for statistical significance.

We've all heard the slogan "correlation is not causation," but that's a misleading way to think about the issue. It would be better to say that correlation is not necessarily causation, because we need to rule out the possibility that we are just observing a coincidence. Typically, scientists apply a 95 per cent confidence limit, meaning that they will accept a causal claim only if they can show that the odds of the relationship's occurring by chance are no more than one in 20. But it also means that if there's more than even a scant 5 per cent possibility that an event occurred by chance, scientists will reject the causal claim. It's like not gambling in Las Vegas even though you had a nearly 95 per cent chance of winning.

While there have been enormous arguments among statisticians about what a 95 per cent confidence level really means, working scientists routinely use it.

But the 95 per cent level has no actual basis in nature. It is a convention, a value judgement. The value it reflects is one that says that the worst mistake a scientist can make is to think an effect is real when it is not. This is the familiar "Type 1 error." You can think of it as being gullible, fooling yourself, or having undue faith in your own ideas. To avoid it, scientists place the burden of proof on the person making an affirmative claim. But this means that science is prone to "Type 2 errors": being too conservative and missing causes and effects that are really there.

Is a Type 1 error worse than a Type 2? It depends on your point of view, and on the risks inherent in getting the answer wrong. The fear of the Type 1 error asks us to play dumb; in effect, to start from scratch and act as if we know nothing. That makes sense when we really don't know what's going on, as in the early stages of a scientific investigation.

But when applied to evaluating environmental hazards, the fear of gullibility can lead us to understate threats. It places the burden of proof on the victim rather than, for example, on the manufacturer of a harmful product. The consequence is that we may fail to protect people who are really getting hurt.

And what if we aren't dumb? What if we have evidence to support a cause-and-effect relationship? Let's say you know how a particular chemical is harmful; for example, that it has been shown to interfere with cell function in laboratory mice. Then it might be reasonable to accept a lower statistical threshold when examining effects in people, because you already have reason to believe that the observed effect is not just chance.

This is what the US government argued in the case of second-hand smoke. Since bystanders inhaled the same chemicals as smokers, and those chemicals were known to be carcinogenic, it stood to reason that second-hand smoke would be carcinogenic, too. That is why the Environmental Protection Agency accepted a (slightly) lower burden of proof: 90 per cent instead of 95 per cent.

In the case of climate change, we are not dumb at all. We know that carbon dioxide is a greenhouse gas, we know that its concentration in the atmosphere has increased by about 40 per cent since the industrial revolution, and we know the mechanism by which it warms the planet.

The 95 per cent confidence limit reflects a long tradition in the history of science that valorises scepticism as an antidote to religious faith. Moreover, while vigorously denying its relation to religion, modern science retains symbolic vestiges of prophetic tradition. A vast majority of scientists do not speak in public at all, and those who do typically speak in highly guarded, qualified terms. They often refuse to use the language of danger even when danger is precisely what they are talking about.

Years ago, climate scientists offered an increase of 2 degrees Celsius as the "safe" limit or ceiling for the long-term warming of the planet. We are now seeing dangerous effects worldwide, even as we approach a rise of only 1 degree Celsius. The evidence is mounting that scientists have underpredicted the threat. Perhaps this is another reason we have underreacted to the reality, now unfolding before our eyes, of dangerous climate change.

Scepticism is built into science's DNA - which is why the world is underestimating the effects of climate change even when there is overwhelming evidence

5 things that differentiate NITI Aayog from Planning Commission

NITI Aayog vs Planning Commission

Parameter	NITI Aayog	Planning Commission
Financial clout	To be an advisory body, or a think-tank. The powers to allocate funds might be vested in the finance ministry	Enjoyed the powers to allocate funds to ministries and state governments
Full-time members	The number of full-time members could be fewer than Planning Commission	The last Commission had eight full-time members
States' role	State governments are expected to play a more significant role than they did in the Planning Commission	States' role was limited to the National Development Council and annual interaction during Plan meetings
Member secretary	To be known at the CEO and to be appointed by the prime minister	Secretaries or member secretaries were appointment through the usual process
Part-time members	To have a number of part-time members, depending on the need from time to time	Full Planning Commission had no provision for part-time members

Dictatorial democra

It has recently been claimed that Jawaharlal Nehru was an ardent democrat and that he always upheld the democratic spirit in his belief and activities. In reality, however, history recounts a very different story.

When he became the Prime Minister of India, he seemed to be a power-monger and in order to retain authority, he discarded all democratic values. First, his relationship with the President suggests that he was a strong believer in Prime Ministerial ascendancy, emphasising that we had adopted the cabinet system as in Britain. In his reckoning, the President must act upon the advice of the cabinet and, thus assume a passive role. But, obviously, the President, as the Head of State had a dignified role to play and, as a person, he was entitled to have his own ideas, prejudices and beliefs. This was the reason why, soon after the Constitution came into force, the then President, Dr Rajendra Prasad, was not able to maintain cordial relations with Nehru.

In fact, Dr Prasad once wrote to him that in certain matters, he would take his own decision. Nehru sent two copies of the letter to Alladi Krishnaswami Ayar, one of the framers of the Constitution, and MC Setalvad, the Attorney-General, for their opinion. However, both of them stressed that in a cabinet system, the President must accept a passive role and abide by the ministerial advice. Inspired by this favourable opinion, Nehru intended to belittle the President. Dr Prasad once again raised the issue before the Delhi Law Institute and claimed that the Constitution did not ask the President to act upon the ministerial advice in all matters. Surely, for Nehru, it was fuel to the fire.

In certain minor matters such as the religious ceremony in Varanasi in which Dr Prasad washed the feet of the priests and pundits, his visit to Somnath temple and presence at the funeral of Sardar Patel, he acted against the wishes of Nehru. As regards General Thimaya’s resignation, Nehru’s Tibet policy and corruption in high places, Dr Prasad expressed considerable dissatisfaction. He did not support the imposition of President’s rule in Kerala in 1959 and the introduction of the Hindu Code Bill in Parliament. He even sent a message, under Article 86(2), urging Parliament to carefully and cautiously consider the Bill as it was awfully defective (Editorial, the Modern Review, November 1978).

As Nehru felt slighted, he wanted to reach a parting of the ways with Dr Prasad after the conclusion of his first term. But, it was Abul Kalam Azad who persuaded the Prime Minister to offer a second term to Dr Prasad. But when the latter sought a third term, Nehru firmly opposed the proposal. Dr Prasad reluctantly resigned office in 1962.

Nehru picked Dr Radhakrishnan for President with the fond hope that the distinguished philosopher would be immersed in his library and would hardly interfere in political affairs. But the Prime Minister was disillusioned because the new President also wanted to play a positive role in matters of State. He was annoyed with Nehru’s defence policy which led to our military debacle against China in 1962 and he had reportedly wanted to remove Nehru from the office of Prime Minister. The rift soon widened and Nehru decided to give him an honoured farewell after the end of his first term.

Similarly, as head of the cabinet, Nehru behaved like a political colossus. Of course, under Article 75(2) of the Constitution, the cabinet is ‘collectively responsible’ to the Lok Sabha and, hence, the cabinet collectively takes the decision in all matters. But Nehru discussed such matters with only a few colleagues of his choice and expected others to readily agree. As VK Kulkarni has pointed out, Nehru merely raised the issues at cabinet meetings and such meetings ended there (Problems of Indian Democracy, page 158). In this way, the cabinet became, as Percival Spear wrote, a mere ‘registering body’ (A Modern History, p 437). In 1956, Bombay was bifurcated by Nehru without the resolution of the cabinet. CD Deshmukh, Finance Minister, promptly resigned. But, Nehru bluntly observed that he was the Prime Minister and that ‘the Prime Minister can lay down the policy of the government’. During his time, a number of ministers notably RR Diwakar, Dr KM Munshi, S Chetty, KC Neogi and C Biswas, had resigned. Nehru functioned in league with some “yes men”.

Of course, Sardar Patel, the Home Minister and No. 2 in the cabinet, believed that the Prime Minister was primus inter pares. No wonder he couldn’t suffer Nehru’s attitude. In the Prime Minister’s scheme of things, though the cabinet was the ultimate policy-maker, ‘the Prime Minister is supposed to play an outstanding role’. Sardar Patel wanted to resign, but Mahatma Gandhi persuaded him to continue.

Within the Congress, Nehru sought to play the role of supreme head. In 1950, a contest for the office of the party president led to a major crisis. JB Kripalani and P Tandon were two rival candidates, the former represented the Nehru group and Tandon stood for Patel. Eventually, Mr Tandon won the election. But Nehru, in order to keep the party within his grip, observed that the Congress must choose either him or Mr Tandon. As Chalapati Rau has observed, ‘The struggle really was who was to lead the Congress, Tandon or Jawaharlal’ (Jawaharlal Nehru, p 205). Though Mr Tandon was duly elected in a democratic manner, he had to step down. Nehru became the party president and retained the office till the early part of 1954. To quote Rajni Kothari, ‘All future incumbents of the post until his death owed their position to Nehru’s will” (Politics In India, p 169). Some of his colleagues, like C Rajagopalachari and JB Kripalani parted with him and founded separate political parties, in order to fight against the Congress.

Moreover, Nehru virtually reduced Parliament to a subordinate institution. Constitutionally, of course, the cabinet is responsible to the Lok Sabha. But Nehru held the Prime Ministerial office three times and, on each occasion, he was backed by an overwhelming majority. So, he was never worried about the stability of the government which was actually made independent of the Lok Sabha. On occasions, he even dared to incur the wrath of the judiciary for his irresponsible comments. He was truly a dictator in the democratic structure.

Lateral entry

Since Independence, the federal democratic system has been governed by the elected executive, generally referred to as the Council of Ministers, headed by the Prime Minister as primus inter pares. This elected executive usually changes every five years, depending on which political party gets first-past-the-post in the elections. The winner is given the responsibility to run the country in accord with the Constitution. However, to ensure systemic continuity there exists an impersonal, permanent executive aka the complex hierarchical bureaucratic structure, the famed steel-frame of the country.

If the country has witnessed peaceful transitions from one government to another, the credit, inter alia, has to go to the often-maligned steel-frame; howsoever rusted it is alleged to be. This stereotypical Weberian institution, predicated on rational and predictable rules, has ensured the sustenance of the often doddering and toddling baby steps of Indian democracy. And the bureaucracy usually has its recruits selected through one of the toughest examinations in the world as conducted by the Union Public Service Commission. The civil service remains pretty much ensconced in the system to provide the critical support to the elected executive in the task of governing the country.

Of late, however, the bureaucracy has been under fire. Trenchant criticism has been mounted against its conservatism and status-quoist approach. It has been argued that the civil service has been failing and flailing in its duty to adapt itself to the demands of development. One needs to appreciate that the Indian bureaucracy or any bureaucracy for that matter is genetically programmed to be status-quoist as wilful chopping and changing with a system of governance can result in instability. This could be dangerous for a complex, plural democracy like India with multi-layered societal diversities. We can’t afford to ignore the examples of Latin America, Africa or East and South-east Asia where such experiments have often resulted in balkanisation and failure of governance.

Given the multiple constraints in a complex, plural society like ours, the civil service has definitely delivered though observers feel that it has started showing signs of fatigue and does require a face-lift to suit the changing times. And it is with this in view that the Central government is considering proposals to effect reforms in our civil service to keep it in step with time. One such reform is lateral entry to the civil service. The Centre is trying to institutionalise lateral entry from academics and the private sector into some senior government positions.

This is a long overdue reform with far-reaching implications. Critics feel that in order to change the way in which the bureaucracy works, it has become imperative to move from a closed to a more open system for recruiting future administrators. The bureaucratic glasnost is believed to be one of the prerequisites for enhancing the quality of the quotidian governance. In the past, there have been suggestions by government-constituted expert groups to institutionalise lateral entry into various critical positions requiring esoteric and specialised knowledge. But, such suggestions have often been pigeon-holed and not followed up in right earnest. However, with its commitment to good governance, the federal government has been exploring various ways to enhance efficiency and effectiveness for better delivery of public services and benefits. Ergo, in all likelihood, this reform measure might now materialise.

The system of lateral entry has always existed. Nandan Nilekeni, the former Infosys official, was inducted to oversee the Aadhaar scheme which has the potential to transform India's social welfare sector. Another illustrious example is Raghuram Rajan, the present Governor of the Reserve Bank of India, a position usually held by career bureaucrats. The practice, however, has been ad hoc in nature and marked by dilettantism. Given the strong umbilical linkage between governance and prosperity amid growing complexities in society, Western countries like the UK, the USA, Australia, Holland and Belgium have already thrown open specific government positions to qualified personnel. This is  a better way to attract the right talent for the job.

A judicious combination of domain knowledge and relevant expertise is a critical requirement in governance.  These attributes are often not present in a cadre of generalists. Moreover, the increasing penchant for politically correct recruitment through reserved quotas also restricts the scope for merit in critical areas requiring definite skills and competence. The second Administrative Reforms Commission (ARC) also envisaged a shift from a career-based approach to a post-based approach for the top tier of government jobs. The ARC felt that civil servants ought to compete with domain experts from outside the regular cadre for senior positions.

An important dimension of this reform is to encourage genuine competition by setting up an independent authority to supervise the proposed recruitment process. Without an independent authority with well-laid out norms, there is a chance that lateral entry may turn out to be an excuse for a back-door entry of the spoils-system to recruit politically-aligned persons. This will further subvert the system thereby defeating the whole purpose behind the move.

The proposed lateral process of recruitment is also believed to be a move to prise open the stranglehold that the IAS has on key appointments. While the move is definitely welcome, it should be ensured that it does not entail change for the sake of change. After all, a system which has delivered over the years can’t be jettisoned overnight. The baby should definitely not be thrown with the bathwater. One has to be very cautious while bringing in such far-reaching systemic changes. After all, Nandan Nilekeni has also been gasping for breath in the Unique Identification Authority of India (UIAI) with the Aadhaar initiative going nowhere.

Such changes will only be cosmetic if other factors remain unaddressed. And this includes the insulation of the civil service from political interference. Besides, while allowing lateral entry, the members of the civil service should also be allowed to move out, do a stint in the private sector and come back to rejoin the government as per protocol. Private sector enterprises also need to benefit from the rich and varied experiences that civil servants have. For sure, a change of this nature will not be easy as there is bound to be stiff resistance from within the bureaucracy.  The government, however, ought to push ahead with this paradigm shift in Indian governance as the national interest is always greater than the interest of a few though the proposal does need a more broad-based discussion with all the relevant stakeholders.