Ban on Ola, Uber’s carpooling service is regressive: Karnataka IT minister

Jayadevan PK March 3, 2017 7 min

When we went to Karnataka IT minister Priyank Kharge’s office in Bengaluru last month to interview him, he was being pitched by a startup looking to raise series funds. This is a common sight at the minister’s office. He’s set in motion a series of startup-friendly initiatives since he took office in 2016.

Kharge is 38 years old — the youngest minister in the state cabinet. He usually wears khadi clothes and a Nehru jacket, but can quote Henry Ford on entrepreneurship with the same ease as he talks about Ambedkar’s politics, job losses and automation.

Priyank Kharge usually wears khadi clothes and a Nehru jacket, but can quote Henry Ford on entrepreneurship with the same ease as he talks about Ambedkar’s politics, job losses and automation

He’s set up a a one-stop cell for startups to interface with the government and rolled out a startup-friendly policy with the aim of helping create 20,000 new businesses in the state. But, with neighbouring states bidding aggressively for investments, is Karnataka doing enough? Are policymakers able to keep pace with technology-led disruption?

When quizzed about the recent ban on carpooling services by Karnataka’s transport department, Kharge said: “The ban on carpooling was a regressive step.” We talked about competition with other states, automation and job losses, and the government’s startup policy. Edited excerpts from the interview follow.

What is your view of the changing technology landscape?

Now it is either we innovate or perish. Whether it’s cybersecurity, artificial intelligence (AI), big data sciences or space. These emerging technologies need to be the focus for any government. Unless you are skill-ready for this, you are not future-ready. The government will position itself as a thought leader in these domains.

Whether it’s cybersecurity, artificial intelligence, big data sciences or space. These emerging technologies need to be the focus for any government

What is your take on aggressive competition from Andhra Pradesh and Telangana?

Healthy competition is good. But sometimes, unhealthy competition creates a bad ecosystem for investments. Karnataka has matured. We don’t have to go that extra mile to give free land, water, electricity and subsidies. We’ve matured as an investment destination. I agree with you that India is a fiercely competitive ecosystem. Just when you have Invest Karnataka, you have Telangana, Kerala and so on. I have competition from Chattisgarh, Jharkhand, Assam and others.

The thing I ask is how can Karnataka maintain lead position. We were the first to start the Global Investors Meet which the other states replicated. Now, the only way I can maintain my lead is to come out with more progressive guidelines, policies and to ensure that I identify emerging areas and see how I can draw up polices for them. Also, it’s not just infrastructure. I can announce a space park tomorrow, but announcing parks won’t help investments. I have to ensure that I’m skill-ready for them. If Telangana, AP, Jharkhand, Assam, Maharashtra or other states are announcing parks (I’m sure they have) but I’m the only state in the country that can assure a complete ecosystem — subsidies, policies, ease of doing business plus a knowledge ecosystem that nobody has, then that’s our strength.

If Telangana, AP, Jharkhand, Assam, Maharashtra or other states are announcing parks but I’m the only state in the country that can assure a complete ecosystem — subsidies, policies, ease of doing business plus a knowledge ecosystem that nobody has, then that’s our strength  

Competition is good. Unhealthy competition is not good. If you are telling that you are giving free land, free power… how long can you give all this. Today, you are taking it from someone and giving it (to companies). Tomorrow, you have to give it back. You have to re-appropriate finances somehow. It’s like iski topi, uske sar. We don’t really need to do that. We have got over Rs three lakh crore investments in the last three years. More than 1,600 companies have invested in Karnataka providing close to nine lakh jobs. This validation is not done by me. It’s from the Government of India. So, it’s not like I’m blowing my own trumpet here. It is a fact.

How do you plan to address the consumer electronic ecosystem? You’ve recently had a big win from Apple?

It’s too early to talk about that. But our stand on electronics manufacturing is very clear. We have one of the best electronic system design and manufacturing (ESDM) policies in the country. We’ve got brownfield clusters, greenfield clusters and we’re pushing manufacturing outside of Bengaluru as well. We have subsidies and our concentration is also on chip manufacturing. We have a semiconductor venture fund out of which Rs 20 crore has been invested and Rs 40 crore is awaiting nod from the committee. We’re looking at high-end manufacturing of electronics. You’re just saying Apple, I’m saying why shouldn’t Samsung manufacture here. We are one of the biggest markets, they should come and manufacture here. So, if I get a big ticket investment like that, I’m sure the component manufacturers will also invest here.

You’re just saying Apple, I’m saying why shouldn’t Samsung manufacture here. We are one of the biggest markets, they should come and manufacture here  

(Edit Note: The minister had earlier said that Apple has decided to make iPhones in Bengaluru, the state capital. However, later his tweet was deleted, raising a few eyebrows. He did not comment on the status of the project when asked.)

How do you think automation will impact jobs and how do you plan to work on policies with that in mind?

There’s always a scare whenever a new technology company or change happens. There’s this famous saying by Henry Ford — ‘If I’d asked people what they wanted, they’d have asked for faster horse carriages. Nobody would have asked for the car.”

When cars came, people said we’ll lose jobs. When industrialisation came, people said we’ll lose jobs. When the internet came, they said we’ll lose jobs. There’s always skepticism… we should wait and see. With every new technology also arises new opportunities. Today’s big startup ecosystem didn’t happen overnight. I’m sure that it will be creative disruption.

Tech companies like Ola and Uber are disrupting traditional businesses. It poses a unique challenge for policy makers. How do you navigate these challenges?

I agree with the industry. Policies won’t match the speed at which technology moves. It’s always up to us. If I talk about Ola and Uber, the department has banned carpooling in many states. I personally think it is a regressive step. It’s taking one step ahead and two steps back. But unfortunately, the transport department is right. It is just enforcing a 1988 act (the Motor Vehicles Act). At that time there was no Uber, Ola, Mega cabs or Meru. The onus is on the government to ensure that our policies are up to date. But, it is very difficult because there’s so much of disruption happening. Now the biggest cab aggregator doesn’t own a single cab; similarly for content, hotels. Our policies have to be as disruptive and progressive. It’s happening and I think our government is much more progressive.

If I talk about Ola and Uber, the department has banned carpooling in many states. I personally think it is a regressive step. It’s taking one step ahead and two steps back

Startup policy wants to groom around 20,000 startups. There’s a lot of work to be done. About 3,000-4,000 startups every year.

That’s a big number right? I think the question you want to ask is, can you actually get 20,000 startups?

Yeah.

The reason why we have such ambitious targets is so that we achieve at least  90% of it. It is not very difficult. Today, in the ecosystem we have 7,000 registered startups. About 2,400 startup have registered with the startup cell in the last four months alone. So, I need to do some more confidence building with startups so they can at least believe that the government can help them in some way. It’s not that all 20,000 startup can be success stories. Today, 95% of them are failing. If the government of Karnataka can ensure that through our policies, if only 90% fail, therein lies my success. This is why we are coming up with different initiatives. The idea is to ensure that we give them a platform.

Lead image: Rajesh Subramanian