From the Desk of Chairman (May 2023)

The first rumbling against the growing influence of AI could be heard from none other than the modern-day patron saint of technology Elon Musk.”.


Yuval Noah Harari is famous as a historian and as a modern-day philosopher. That is only a small part of his bio data. For those who have had a chance to read his literature, he is a fortune-teller of sorts. His book “Sapiens: A Brief History of Humankind” is one of the finest books that I have ever read. “The Economist” re- cently published an article written by him on Artificial Intelligence (AI). I started reading his well-written piece with the intention of being worldly wise. Instead, I came away frighted about the future of the world in which you and I live. A couple of months back I had written about Chat GPT more in the form of an introduction to the emerging field of AI in this journal itself. After reading Harari, I now get the creepy feeling that the ‘cheese is definitely being moved’ without me or for that matter anyone else reading this piece noticing it. Please bear with me for taking the liberty of generously quoting from Harari’s article. It is with the intention of warn- ing you about what the future beholds. “Language is the stuff almost all human culture is made of. Human rights, for example, aren’t inscribed in our DNA. Rath- er, they are cultural artefacts we created by telling stories and writing laws. Gods aren’t physical realities. Rather, they are cultural artefacts we created by inventing myths and writing scriptures. Money, too, is a cultural artefact. Banknotes are just colourful pieces of paper, and at present more than 90% of money is not even banknotes—it is just digital information in computers. What gives money value is the stories that bankers, finance ministers and cryptocurrency gurus tell us about it. Sam Bankman-Fried, Elizabeth Holmes and Bernie Madoff were not particular- ly good at creating real value, but they were all extremely capable storytellers”. Going forward, Harari foresees situations where we might soon find ourselves conducting lengthy online discussions about abortion, climate change or the Rus- sian invasion of Ukraine with entities that we think are humans—but are actually AI. The catch is that it is utterly pointless for us to spend time trying to change the declared opinions of an AI bot, while the AI could hone its messages so pre- cisely that it stands a good chance of influencing us. Further Harari poses these questions: “the new AI tools would have an immense influence on our opinions and worldviews. People may come to use a single AI adviser as a one-stop, all-know- ing oracle. No wonder Google is terrified. Why bother searching, when I can just ask the oracle? The news and advertising industries should also be terrified. Why read a newspaper when I can just ask the oracle to tell me the latest news? And what’s the purpose of advertisements, when I can just ask the oracle to tell me what to buy”? In ancient India, Buddhist and Hindu sages pointed out that all humans lived trapped inside Maya—the world of illusions. What we normally take to be reality is often just fiction in our own minds. People may wage entire wars, killing others and willing to be killed themselves, because of their belief in this or that il- lusion. We have just encountered an alien intelligence, here on Earth. We don’t know much about it, except that it might destroy our civilisation. We should put a halt to the irresponsible deployment of AI tools in the public sphere and regu- late AI before it regulates us. And the first regulation I would suggest is to make it mandatory for AI to disclose that it is an AI. If I am having a conversation with someone, and I cannot tell whether it is a human or an AI—that’s the end of de- mocracy”. The first rumbling against the growing influence of AI could be heard from none other than the modern-day patron saint of technology Elon Musk. He along with a group of AI experts and industry executives are calling for a six month pause in developing systems more powerful than Open AI’s newly launched GPT-

  1. According to them powerful AI systems should be developed only once we are confident that their effects will be positive, and their risks will be manageable. Even AI is aware of this concern. When I asked Chat GPT about the future of AI, this is what it had to say, and here I quote excerpts from my conversation with it. “As an AI language model, I cannot predict the future with certainty, but I can pro- vide some insights and possibilities based on current trends and advancements. AI is rapidly advancing in various fields, including healthcare, finance, transporta- tion, and manufacturing, to name a few. AI is also becoming more accessible and affordable, allowing more businesses and individuals to adopt it”. Even AI is con- cerned about such apprehensions. According to Chat GPT “However, with the increasing use of AI, there are also concerns about its impact on jobs, privacy, and security. It is crucial to ensure that AI is developed ethically and responsibly, with appropriate regulations and guidelines in place to mitigate any potential negative effects.” In future, when I say “So help me God” I must specify which God – God or AI God? Will you, the real God, please stand up?

The much coveted and much fancied start-up world is staring at a cold winter. Af- ter a stable geopolitical world that existed for more than two decades, the bitter cold of an unfamiliar winter is a strange territory for startups who had enjoyed the fruits of a world where money was virtually free, peace was guaranteed, and infla- tion was unknown. Since the early 2000s the stock market has not experienced such a massive correction, and many overvalued internet companies have also folded up. This has led to a sharp decline in venture capital funding and significant contraction in the startup industry. During this startup winter, investors have be- come more risk-averse and funding for early-stage companies is fast drying up. This has made it difficult for startups to secure the much-needed financing to get themselves off the ground, and it has also made it harder for existing startups to raise additional rounds of funding. All of a sudden, the focus of startups is on cap- ital efficiency and profitability. The specter of having to conform to fundamental financial principles is haunting the innovation eco system. The primary reason for this change is the structural change in the interest rate structure. According to Fareed Zakharia, the political commentator, countries are competing with each other on the principle of producing goods in their own countries. In the bargain the economics of efficiencies have given way to promotion of local industries. Ac- cording to him those coming out of IITs are more drawn to the AI driven innova- tion eco system and related areas and entrepreneurships are likely to flourish in those areas. He and his partner are betting big on areas where heavy investments are not required to build startup empires with Aadhaar and Jio playing a crucial role though they really want the Indian entrepreneurs take a leap of faith with cut- ting edge technologies. Nitin Kamath of Zerodha has a different take on the start- up world. According to him, because of the disconnect between the valuations and fundamentals of the businesses the future for startups at least in the medium term looks grim. Many of the late-stage entrepreneurs will throw in the towel ear- lier than later. With the tide turning now, the investors are demanding stricter anti-dilution provisions, guaranteed returns while making their investments. A discussion on startups cannot be complete without understanding the geopolitical realities like the rise of China and the antipathy that US entertains about that coun- try. Overall, startup winters like what we are experiencing can be challenging for both the entrepreneurs and investors, but they can also lead to a period of consol- idation and innovation as the industry adapts to the new economic environment with better financial discipline. However, it also paves the way for a new era of in- novation and entrepreneurship, while leading a more cautious and deliberate ap- proach to investments, with a focus on sustainable business models and revenue growth. While entrepreneurs focus continually on valuations, one shift they seem to have forgotten is the focus that they need to give to governance issues. The earlier they focus on this, the better it is for them when things turn, with the winter behind you.

The city of Kochi had a proud moment the other day when the Prime Minister of the country inaugurated the Kochi Water Metro. Kerala is a state endowed with a number of rivers and canals so much so that it is sometimes called the Venice of the East. Waterways also may not be new, but to put the waterways to decongest the city traffic definitely is. Kochi Metro Waterways is a project that aims to devel- op water transport infrastructure in Kochi. The project involves the development of waterways for transportation of goods and passengers within the city and its suburbs. The waterways include rivers, canals, and backwaters. The project is ex- pected to provide an eco-friendly and efficient mode of transport that can reduce road traffic congestion and air pollution. It is also expected to boost tourism in the region. The Kochi Metro project is being implemented by the Kochi Metro Rail Limited (KMRL) in collaboration with the Inland Waterways Authority of India (IWAI). The project involves the construction of jetties, terminals, and other infra- structure facilities along the waterways. It is an ambitious project that aims to promote eco-friendly and efficient water transport in Kochi. Its success will of course depend on the development of necessary infrastructure and the willingness of the public to adopt water transport as a viable mode of commuting.


The other day the Supreme Court had an occasion to examine a provision con- cerning tax deducted at source (TDS) by an assessee and the remittance of the same to the government. This matter came up before Justices M R Shah and C T Ravi Kumar. The Judgement given by the Justices is not only interesting but classic. The facts of the case in summary form were that US Technologies Pvt Ltd., an as- sessee deducted tax in respect of certain payments but paid part of such deduc- tions to the tax authorities after some delay. The tax authorities after a survey of the assessee’s premises noticed that the entire amount of TDS was not paid by the lat- ter to the authorities. The Additional Commissioner of Income Tax (ACIT) in an order passed under Section 271C levied a penalty equivalent to the amount of TDS deducted for the relevant assessment year. The Kerala High Court upheld the Or- der passed by the ACIT. This Order of the High Court was challenged by the As- sessee before the Supreme Court contending that they are not liable to pay penal interest as provided by Section 201(1A). As per Section 271C (1)(a), if any person fails to deduct the whole or any part of the tax as required under the provisions such person shall be liable to pay a penalty equal to the amount of tax which such person failed to deduct. Referring to the facts of the case, the Apex Court reckoned that it was a case of belated remittance of TDS deducted by the assessee, and not a case of non-deduction of TDS. While holding that Section 271C(1)(a) was applicable to the case, the Court observed, “The words used in that Section are very clear and the relevant words used are “failed to deduct. It Does not speak about belated remittance of TDS”. Significantly the Bench added that as per the settled position of law, the penal provisions are required to be construed strictly and literally. Further, as per the cardinal principle of interpretation of statute, and more particularly the penal provisions, they are required to be read as they are; nothing to be added or taken out of the penal provision, observed the Court. The Supreme Court further observed that wherever the Parliament wanted to provide consequences of nonpayment and/or belated remittance of TDS, it has provided the same in Section 201(1A) and Section 276B of the Act. The Court thus allowed the appeal and set aside the Kerala High Court’s order while ruling that the Asses- see was not liable to pay the penalty under Section 271C of the Income Tax Act. You cannot fault an Assessee if he says common sense is not so common or com- mon sense can also be a subject matter of interpretation!

Before concluding, please permit me to sign off this piece by extending my com- pliments to a remarkable achievement posted by the Prime Minister of the country in his exercise in communication to his constituents – Mann Ki Baath. This initia- tive has no precedence in India and is in itself a unique one. It is a direct commu- nication between a ruler and his subjects. When Modi started this exercise, many people including me, thought of this more as a publicity gimmick and nothing more. I have been pleasantly proved wrong. Moreover, this has served the PM and his government to convey their messages without adulteration of any kind. Going by the feedback received and compiled, it is serving a purpose. Not because the 100th episode was aired live in the UN, but because it provided an extraordinary platform to the PM to directly interact with his people. For Modi who is quite tac- iturn in nature, this platform filled a crucial void. Different people may have varied opinions about what the PM conveyed through these one hundred episodes de- pending on their political affiliations. But no one can deny its utility and useful- ness. Mann Ki Baath is, in one sense, a demonstration of democracy in full flow. Whomsoever conceived this vehicle of communication, may have borrowed the original idea from the US. Franklin Roosevelt used to interact with his people when he was the President during WWII. He used to call these conversations over the Radio as “Fire Side Chats.” In fact, Mann Ki Baath in India is more important and more challenging than for any other nation, what with so many languages to deal with and different cultures prevailing in different parts of the country – a challenge that Modi won hands down.

Last week turned out to be the saddest one yet, for all of us at Bizsol. We lost one of our colleagues Nana Pansare. He was just 31. Having worked with him ever since my days at Nashik I have always thought of him as someone who accidental- ly happened to be in the fiercely competitive corporate setup. He was literally a man of few words – extremely shy and totally self-evasive. As an employee he had always been an enigma, at least to me. During the employee appraisal process the task of assessing his performance had been an unenviable task for his bosses. He did not possess any of the external posh and polish you normally associate with the frontline associates in the corporate sector. But his performance on the job told an entirely different story. He checked all the right boxes when it came to his performance, thereby proving all of us, including me, wrong. He had a unique un- derstated confidence about his job. When he suddenly passed away after a brief illness, he created a huge vacuum in the process. In death we reflected how im- portant and how dedicated he was in his work. A gap that would be difficult to fill. His life and work were an object lesson for us at Bizsol. People like me who conve- niently assess people based on their external appearances and felicity with lan- guage, he showed us all a different kind of way to the art of management. Nana, wherever you are, you continue to live the way you lived when you were amongst us. All of us at Bizsol have learnt a lot with your dedication to work. When you meet the God Almighty, He is sure to wonder why He had forgotten to create such noble souls like you anymore on earth. Nana may your soul live in eternal peace with Him.


Thank you!

Venkat R Venkitachalam


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