Indian startups find fertile ground in HR services

Technology helps manage India’s vast human resources Ayswara Murthy, Contributing writerBANGALORE, India --- Human resources departments have been late adopters of technology, but now they seem to be in a hurry to make up for lost time. Last year, investors pumped a record $165 million into Indian startups developing cutting-edge solutions for a rapidly changing HR landscape. In the first half of 2018, 13 deals collectively valued at $71 million have been closed, says Venture Intelligence, a Chennai-based investment database. But these bets just scratch the surface of the challenge of optimally selecting, training and placing India’s enormous workforce. Despite being a data-rich segment best positioned to take advantage of the progress in artificial intelligence (AI) and machine learning, HR has been slow to innovate. “The most popular HR tech software in the world is still Microsoft Excel, regardless of what anyone tells you,” laughs Rishabh Kaul, co-founder of Belong, a data-driven hiring tech startup. But Kaul says a growing number of companies have started to use sophisticated tools for recruitment, on-boarding, sentiment analysis and so on. Investment are flowing into the areas being transformed as companies ponder what digital transformation means to them. A report last year by Sierra Cedar on the HR Tech Landscape Study for Asia said that 50% of India-based organisations surveyed were looking at improving or developing a new enterprise HR systems strategy in 2017. One of the many reasons driving this trend was because organisations now desired to adopt emerging technologies like embedded analytics, mobile capabilities and integration with social platforms, it said. Industry publication, People Matters, has been running an HRTech Start-up Program for the past four years where early-stage startups in the HR technology space are invited to interact with investors, mentors and buyers while showcasing their products. Their fifth and upcoming one in Gurgaon in August has generated a lot of interest. "Last year, we had shortlisted about 27 companies who had pitched their platforms at the event. This time we have planned to showcase 50 startups that have been in operation between 3-5 years, across domains like recruitment, employee benefits, talent management and more," according to Nikhil Bhardwaj, Sales and Partnerships Manager at People Matters. Samir Kumar, managing director of venture capital fund Inventus, says enterprise software in general has seen good funding interest. “With faster customer adoption of HR tech solutions, investors have become more open to funding such ventures,” he says. Inventus has invested in the learning and assessment platform designer Knolskape.Early last year, Belong raised $10 million from Sequoia Capital India. In 2017, the largest investment in Indian HR tech was the $62 million bagged by cloud-solution provider PeopleStrong. “The market for technology products is slightly over $1 billion and it’s growing at 30% a year. Considering the size of the Indian workforce, the investment hasn’t been proportional but it’s increasing,” says Chaitanya Peddi, co-founder and product head at Darwinbox, a comprehensive HR solutions provider that raised $4 million last June. “No one solution would work in isolation for one company,” says Hari Krishna Reddy, co-founder and CEO of Param.ai, a recruitment-software developer. “Some companies would choose to invest more on assessment, some on building the application-tracking system, some on background verification. As long as you are only selling a technology product (and not a database, for example) you are not restricted to India either. You are geo-agnostic and domain-agnostic.” Today, companies are constantly revaluating their purpose, rethinking what they are doing and how they can be competitive, says Kaul of Belong. “There is a convergence of skills happening.” Banking jobs, for example, are no longer limited to the banking sector, but also in internet companies that are moving into the payments space. So, people with certain skills have many more options today and companies are keen to stand out. While creating a job posting on a database service using skills as keywords, an AI system understands how the different skills are connected. Because skills are being added at a high rate, if you fail to mention one of these, you miss out of the very people are you looking for, says Kaul. Also, with a lot of the ‘new-age skills’, it’s still a challenge for HR to set benchmarks. How do you know how competent your potential new recruit is in these sorts of skills? Then there is the universal struggle of engaging and retaining employees. How do you get people excited enough to stay when they have so many job options? “My dad spent his entire life working in one company and that was common,” says Kaul. “But millennials will have at least 7-10 jobs in their lifetime, with average tenure of 2-4 years. These are big changes and we will be able to solve them using analytics and data, because there are a lot of insights that can come from publicly available data, both about people and companies.” Beyond recruitment, larger themes have become important around HR. “One is the future of work. No one was talking about that even five years back. Today, we are thinking deeply about the different kinds of people who are going to be working and in what sort of jobs. Whole aspects of HR, right from the time someone thinks of a new opportunity till he retires, all are being disrupted by technology,” says Kaul.There is also a lot of potential in using technology to improve the level of engagement and the culture within the company. “A competitor can copy your product, your supply chain, your distribution model but they can’t copy your culture and the kind of people it attracts,” says Peddi of Darwinbox. “And currently the way many companies are accessing engagement is by running an annual survey. You draw your conclusions based on that and design interventions for the rest of the year. This is not going to work. It has to be more continuous; I’d rather know the daily pulse of my employees.”“To know that, you need a system in place that will evaluate employee performances objectively and in real time,” Peddi explains. “And whatever data is already getting generated, you can assess it yourself rather than asking your employees directly how engaged they are. This is how you really identify who are the actual contributors, what kind of people are successful in your organisation. This will have direct implications on your recruitment. It’s all going to be very different from how we are doing it today, which is pretty much guesswork,” he says. Tables1. PE/VC investments in HR tech startups in India//www.datawrapper.de/_/jo9oK/<iframe src="//datawrapper.dwcdn.net/jo9oK/1/" scrolling="no" frameborder="0" allowtransparency="true" width="600" height="400"></iframe>2. Top PE/VC investments in HR tech (2017-YTD)//www.datawrapper.de/_/ZfqZw/<iframe src="//datawrapper.dwcdn.net/ZfqZw/4/" scrolling="no" frameborder="0" allowtransparency="true" width="600" height="352"></iframe>

Scrapping of Article 370: J&K’s new status packs promise of economic revival

Mired in a cycle of violence and isolation, Jammu & Kashmir (J&K) hasn’t been the best ecosystem for businesses. While Article 370 is far from the only factor that ailed businesses here, it is one of the most prominent. With this special provision allowing the state to make laws that often don’t conform with laws applicable elsewhere in the country, the state government was arguably compounding the problems created by insurgency. With a captive market and little competition, existing industries —historically restricted to agro-related, tourism and handicrafts — were heavily monopolised.Prime Minister Narendra Modi had, a few months ago, blamed Articles 370 and 35A for standing in the way of the region’s development. “We can build IIMs but professors are not ready to go there as their children don't get admission in schools. They can't find homes. This ends up harming the interests of J&K,” he had said in an interview to a news channel in April.Investment and job opportunities, he had said, were scarce "because of Pandit Nehru’s policies, which need to be reviewed”. And review (and revoke) it they did.Traders upbeatIn Jammu, the business community concurs with this line of thought. Traders termed special status of J&K as a major obstacle for the state’s industrial growth. Manoj Sharma, a businessman running a telecom store in Jammu, said the special status should have been abolished long ago as it was creating hurdles in the development of the state on par with the rest of the country.“Can anyone pinpoint any benefit of special status that the people of Jammu & Kashmir have received?” he asked.Mohin Kumar, who runs a tile and marble store in the same city, said that as manufacturing units are far from the state, the cost of products is quite high as compared with the other parts of the country.“Now, we are hopeful that manufacturing units will be set up in Jammu & Kashmir, which will ultimately lead to a decline in costs, proving highly beneficial to the masses,” he said.Praveen Khandelwal, the Secretary-General of the Confederation of All India Traders, welcomed this “much-awaited” move and said that it will not only integrate the country but also integrate trade and commerce.“More and more traders and industrialists would like to set up their units in J&K and have their own commercial establishments. This will ultimately accrue more revenue for the government. Earlier, even people from Jammu were reluctant to trade in Kashmir and vice versa, but now, with all laws equally applicable to all the parties, it’s not just inter-state trade that will benefit but also trade within J&K,” he said.Realty boom predictedThe first benefit for locals is expected to come from the depressed property market, with real estate observers predicting prices to rise by up to 50 percent. In Srinagar’s prime areas, real estate prices are lower than in the suburbs of non-metro cities, with real estate transactions limited and market appreciation curtailed.Land rights, a critical component of the now-reworked Articles, had always been an impediment for new industries, with the state refusing to provide provisional registration without land availability. Businesses that couldn’t buy land for their operations couldn’t even resort to the Right-to-Use option, as the provision for the same hadn’t been implemented in the state until five years ago.J&K's under-developed power infrastructure also meant that the government could not assure industries of uninterrupted power supply. The state’s capital expenditure on industries never crossed 0.2 percent of Gross State Domestic Product in the last five years and has, in fact, been dipping. It was a mere Rs114 crore in 2016-17, according to the Centre for Monitoring Indian Economy.As late as in 2016, J&K was ranked 31 among 34 states and Union Territories in the index of ease of doing business. Earlier, the state government had created a range of incentives for industries but they were derailed by delay in sanctions and disbursement. Eventually, it enacted sweeping reforms across 18 different state departments, mostly in labour, which allowed it to climb up to 22 in the Ease of Doing Business State Ranking, which was jointly released in 2017 by the World Bank and the Department of Industrial Policy and Promotion.The ranking hasn’t improved since then but in December last year, the J&K government under Governor Satya Pal Malik declared 75 services in various departments to be ‘online only’ as a part of Business Reforms Action Plan (BRAP).Another damning indictment of J&K’s economic condition is its unemployment rate, which stood at the monthly average of 15 percent between January 2016 and July 2019, in contrast with an all-India average of 6.4 percent. Akshay Sharma, a cameraman from Jammu, rues the peak in unemployment and meagre availability of jobs in government and private sectors. But now he is optimistic.“We are hopeful of the opening of new industries in the state, which will ultimately give opportunities of employment. At the end of the day, an unemployed youth needs employment,” he said.But these are still early days and the future of the region is uncertain, as are the powers of the new government. For now, only those with a large risk appetite will attempt to establish businesses here, preferably in association with local players.“Of course, it won’t be easy,” said Khandelwal, “Now that J&K is a Union Territory, the central government will make all attempts to keep the development here in line with the rest of the country.”Hours after abrogating Article 370, the government announced “a major investment summit” in the region in October, around Dussehra, which “will be attended by all the prominent leaders of India”.“The Centre will begin to formulate policies from its side. In the interim period, traders will have time to make up their mind about new business ventures or plan to extend their existing operations,” Khandelwal opined.

Angel tax worries Indian startups

Bengaluru, Karnataka: India’s efforts to combat money laundering by taxing funds raised by shell companies is having unintended consequences for its thriving start-up ecosystem.In their search for offending ‘shell’ companies, tax authorities have been indiscriminately targeting start-ups that have raised funds from individual, or angel, investors. This has brought about 40-50 start-ups under tax scrutiny.Sreejith Moolayil, co-founder & COO of True Elements, a Pune-based food start-up, received a notice from income-tax (IT) authorities in December 2015 asking him to justify the valuation of his company. He had raised $153,000 in fresh capital in January that year, and despite making over 15 visits to tax officials to explain his case, was asked to pay 40% of the investment he had raised. “After two years of discussion, the department concluded that our valuation method was not acceptable, and the money raised using a discounted-cash-flow (DCF) method exceeded a ‘fair-market value’ of the firm,” says Moolayil. “We were asked to pay Rs. 4 million as tax including penalty and interest.” A DCF analysis projects future cash flow and discounts it, using the cost of capital, to estimate its present value. “Although our start-up has met the projected revenue that the investment was based on, the assessing officer wasn’t convinced,” said Moolayil. He has spent more than Rs 150,000 defending his case and is now appealing against the order.Moolayil has now formed a WhatsApp group of more than 45 start-ups who have been slapped with notices by IT authorities. In January, he started an online petition asking government to scrap the provision of the tax code that’s responsible for the mess.To curb money laundering using shell companies, the government in 2012 introduced section 56(2) (viib) in the Income Tax Act. This amendment treats the difference between the amount of capital that a company raises and the fair-market value of the business as income and levies a 30% tax on it.Since the section applies to angel investors and not to venture-capital funds or non-resident Indians, it has been dubbed an “angel tax” by the start-up community. Founders argue that the valuation of a start-up is a based on financial projections and negotiation with its investors. The concept of a ‘fair-market value’ is vague and meaningless in this context. “Why does the question arise when you have a legal DCF certificate,” asks Nikunj Bubna, founder of What’s Extra India, a start-up that helps retail chains run loyalty programs. “Who decides a start-up’s ‘fair market value’? How do you do this for start-ups when there isn’t any cash flow visible yet, when the business model is new or your ‘proof of concept’ hasn’t yet emerged?”Incorporated in 2009, his company raised funds through a rights issue in 2014. After wrangling with IT officers over the course of 7 meetings, the company was sent a tax notice in December 2017.Start-ups face another challenge: section 68 of IT Act says that if the source of funds is not substantiated, government can tax it as unexplained cash credits. In due course, What’s Extra’s investors too got notices questioning the source of their money.Basically, the IT department claims it cannot fathom why any company which has neither assets nor profits should be so highly valued. Speaking off the record, a Pune-based tax official who’s handled angel-tax cases says, “The DCF methodology needs to be questioned. Cash-flow projections of many start-ups are incredibly high. How can we trust them?” he asks.“The IT department doesn’t understand software,” replies the founder of a Bangalore-based start-up. “We don’t have assets except our software and our value is based on this software. According to them, our fair-market value is zero because we don’t have assets like a traditional company.”Abhishek Goenka, leader (corporate and international tax), PwC India, says that the discretion currently available to IT officers should be taken away. “As long as the issue of shares is done at a valid price, backed up by a valuation report, there is no need for it to be referred to an IT officer; unless there is something patently incorrect or perverted.”In the first half of 2017, the angel-tax issue caused a 53% drop in seed funding, estimates the National Association of Software and Services Companies. VCC Edge, the data research arm of News Corp, reported a drop in the total number of early-stage deals to 217 in the first half of 2017 from 368 in the same period in 2016.V Balakrishnan, former CFO at Infosys and an angel investor in start-up Clonect, says they too got a notice from the IT department. “We were able to clarify our position with them and get a clean chit. If you are an investor and you find that your company gets these kinds of notices, it pisses you off. You don’t want to invest anymore in the industry,” he says.“Also, these start-ups are young companies run by young entrepreneurs and if you subject them to such harassment without reason, it sends the wrong message. The government has realised that there is a disconnect in the regulation and they are looking at it seriously. It will be resolved very soon,” he believes.Says Sharad Sharma, an angel investor and co-founder of the think tank Indian Software Products Industry Round Table (iSPIRT), “The angel-tax issue is the not the main factor in this slowdown. It’s one of the many contributory factors. We expect an advisory from the ministry of finance to tax officers. This will ensure that start-ups are not needlessly targeted and will clarify the interpretation of the law,” he saysIn 2016, government relaxed norms by exempting start-ups that are recognised by the government. This February, media reports suggested that start-ups incorporated before 2016 and which have $1.5 million in angel funding would be exempted.Sharma suggests moving to a regime where data analysis is used to unearth fraud so that regular start-ups are not needlessly harassed. There are various stages to appeals related to valuation and, since it depends on individual discretion, it can take up to 8-10 years to go through the entire chain of appeal.Says Bubna, “I lost potential investors because I now have this tax notice on my books as a liability. I lost employees because the future of the company suddenly started to look uncertain.” That’s the price entrepreneurs pay for the heavy hand of government.

Indian companies wants Chinese solar panel ban

Bengaluru, Karnataka: Last year was a turbulent one for the Indian solar industry. In May, Acme Solar created history by winning a bid for the 200 MW Badla Solar Park in Rajasthan quoting a sale price of Rs.2.44 (3.75 cents)/unit but, by year-end the viability of the project was in question.The Director General of Safeguards (DGS) and the Director General of Anti-Dumping (DGAD) had launched independent investigations into Chinese solar photovoltaic (SPV) imports, which makes up 90% of the supply in the Indian market. Both investigations were the result of petitions filed by the Indian Solar Manufacturing Association (ISMA) on behalf five Indian manufacturers.While the DGS has come out strongly in support of the petitioners and proposed a 70% tariff on SPV imports from China and Malaysia for 200 days while more permanent measures are being examined, the Madras High Court issued a stay order on the implementation of these ‘safeguard’ regulations. A case has been filed by the conglomerate Shapoorji Pallonji Group, which has diversified interests including power development, challenging the tariff as “arbitrary”.Says Kanika Chawla, policy specialist at the Council on Energy, Environment and Water (CEEW) in Delhi, the question is, “Do you want to make cheap energy in India with imported panels or do you want to make solar panels in India?” The petition claimed that China, which has been hit by anti-dumping tariffs in the United States and Europe, is now accelerating its exports to India, a large solar market that is growing at an exponential pace on the back of the government’s ambitious targets. India today is the largest buyer of Chinese SPV products, mopping up more than a third of their export supply. China meets 90% of the global demand.Exports from China, Taiwan and Malaysia of cells and modules increased by 33-45% just between July and December 2017 even as prices fell by about 25%, according to the petitioners. They fear this staggering growth of imports could potentially wipe out the nascent Indian SPV-manufacturing industry.As the industry awaits the judgement in this case, ISMA had withdrawn its petition with the DGAD last July to file a more robust one by end April or early May. It was only recently that solar importers saw a resolution of a six-month long battle against changes in basic customs duty on SPVs that had resulted container loads of SPVs stuck at ports.This lack of clarity on government policy is hurting investor confidence and developer appetite, says Chawla, “By government, I mean all of its machinery – the ministry of finance, commerce, energy and dedicated officers like DGS and DGAD. The collective needs to take a clear view, even if it is to impose trade regulations, which is not necessarily the right thing to do in my view,” she says.While the ministry of non-renewable energy (MNRE) has tried to protect the developer’s interest by arguing against imposing stringent duties, it’s the ministry of finance that will take call. There is strong support for tariffs within the government.Currently, solar manufacturing in India is limited to production of cells and modules. For the critical, capital-intensive upstream processes like production of polysilicon and wafer, India has no manufacturing capacity. Manufacturers like Jupiter Solar Power, one of the ISMA petitioners, import wafer that are processed into cells, which are then shipped to module manufacturers. Jupiter’s managing director, Dhruv Sharma, is confident that domestic solar manufacturing can fill the gap in supply once duties are imposed.Solar capacity addition is estimated to decline to 4-4.5 GW in 2019, according to a latest report by ratings firm ICRA. Only 4.5 GW capacity was auctioned and awarded in 2017 as against 7.3 GW in 2016. Prior to the current slowdown, the MNRE had projected an addition of 8-10 GW of solar-power generation capacity every year.According to the MNRE, installed capacity of cells and modules are currently 3.16 GW and 8.4 GW respectively. The ISMA conservatively estimates that once duties are imposed, Indian cell-manufacturing capacity will increase to 7.5 GW in 12 to 15 months and to 12.5GW in 18 to 24 months. Simultaneously module-manufacturing capacity will increase to 15GW.Sharma sees this happening in two ways. Many existing manufacturers are not operating at full capacity, he says, and it’ll be easy to scale up the operations in the short term. “Once we have the demand visibility for the next few years, we can double and triple our current capacity,” he says.More important, he expects the additional duties to encourage Chinese manufacturers to set up facilities in India as they have in Malaysia, Vietnam and Thailand to bypass duties in markets like US. “Large manufacturing capacity coupled with a captive market will automatically increase investment in upstream activities like the manufacturer polysilicon and wafer,” he adds.But Chawla points out that the high cost of capital, coupled with an incomplete domestic supply chain, make investors apprehensive about a small industry that yet to develop economies of scale. “Chinese PVs are cheap for several reasons, primarily government support which means they don’t have to raise capital through market forces. If India is not committed to doing the same and doesn’t have the same deep pockets for its manufacturers, these tariffs are going to come at the cost of more expensive solar power,” she says.The bigger challenge is that it’s very difficult for any industry to grow capacity based only on tariffs, says Vinay Rustagi, managing director of energy consultancy Bridge to India. “Duties don’t last forever. In the absence of fundamental competitiveness, no investor would make such big-ticket investment decisions based on provisional, short-term protections,” he says.While safeguard duties are traditionally imposed for 4 years, often with a step-down structure with progressively reducing rates, the long-gestation period of these industrial facilities invites all kinds of risk. To illustrate his point, he points to 2012 when similar duties were proposed. There was a lot of interest which ultimately didn’t materialise into real investment and capacity because the duties were never implemented.Another big unknown is the lack of clarity on who will the cost of duties on projects that have already been awarded. “I think if the duty is imposed, many of them will become completely unviable and highly likely they will never get off the ground, unless the government mitigates the risk for them,” says Rustagi. In all future bids, the cost of duties will be borne by the power purchasers.“It’s better to take a comprehensive, strategic view of the industry we want to support. Instead of trying to manufacture solar panels, the global market for which is dominated by China, focus on horizon technology like storage solutions, electric vehicles, where import lines haven’t already been established but are likely to develop very quickly," said Chawla.Years(solar cells/ photovoltaic cells)(other photocells)Quantity (Million Nos.)Value (US$ million) Quantity (Million)Value (US$ Million)2014-15113.5603.343.143.392015-161631960.264.449.962016-172812817.349.786.632017-18 (Apr-Oct, 17)*225.11869.564.346.87Timeline (for reference)2012 - DGAD finalises duties to tune of $0.48 per unit to $0.81 per unit on the solar cells & modules imported from US, European Union, China, Malaysia and Taiwan but the ministry of finance did not impose the same and let the duty lapse eventually after 4 years.2013 – EU slaps tariffs on Chinese pv imports; China responds by taxing wine…2014 – US imposes hefty import duty on PV from China and TaiwanJuly 2017 – anti-dumping duty petition filed by ISMA, DGAD begins investigationDec 2017 – Application for safeguards filed by ISMA, DGS begins investigation Jan 5 – 70% import duty proposed for 200 days by Director General of Safeguards Jan 22 – Madras high court interim stays safeguard ordersMarch 5 – withdrawal of anti-dumping petition by ISMA with intent to file new, updated petitionMarch 12 – oral hearing /written submission concludes; awaiting judgement April end/early May – new anti-dumping petition by ISMA is expected.

Expertspeak: Why does the north-south divide extend to internet shutdowns?

Internet shutdowns have become quite the norm in India. Whenever there are any incidents of violence or protests being fuelled by inflammatory social media posts, the authorities suspend mobile internet and broadband services, sometimes for days on end. In fact, the communication ministry has issued rules that allow the government to temporarily shut down phone and internet services during a “public emergency” or for “public safety”. In a democracy, internet shutdowns are an infringement of the fundamental rights to freedom and expression, apart from inconveniencing people.As ubiquitous as these shutdowns have become, your average citizen in southern India — comprising five states and a sole Union territory — may not have heard of them. Until December 2017, there was only one reported internet shutdown in south India. Compare that with 69 instances of disruption of the internet in the rest of India last year. Of all the statistics that reinforce the north-south divide, this is one of the more stark ones. An attempt to correlate the occurances of shutdowns to internet penetration levels was inconclusive.At this point, the reasons for this divide are purely speculative, says the legal director of the Software Freedom Law Centre, Prasanth Sugathan. “Legally speaking, there are no specific state-wise laws that are applied in such cases to explain the disparity,” he said. “If you look at laws that are used to impose internet shutdowns — the commonly used CrPC Section 144 or the Telegraph Act that’s been used in some cases — they are applicable uniformly across the country.” The same is true of the Temporary Suspension of Telecom Services Rules that were announced last August by the Centre.We spoke to Rakshit Tandon, who works in an advisory capacity with various police cyber cells, notably UP and Gurgaon, and whose his advice was sought during some of the internet shutdowns on the laws and implementation structures and processes. When asked whether there was a difference in policing and the attitude of police to such shutdowns in the north and the south, he said it depends on the situation and the attitude of the people.Delving into the sole internet shutdown in south IndiaIt is worth looking more closely at the sole internet shutdown in south India — in Adilabad district of Telangana on December 16, 2017. Internet services were reportedly suspended by the state government as a precautionary measure in the wake of clashes between two tribal communities. There was disruption of mobile call services as well for some time in the Agency areas in old Adilabad district, according to news reports. The government deployed a large number of police personnel and the Rapid Action Force in the area following the clashes; Section 144 was enforced in Utnoor.Internet services were disrupted for about 40 days in the district, according to Adilabad superintendent of police Vishnu S Warrier. “The ban was lifted only after we were sure that there won’t be any more trouble,” he said. And people didn’t complain, because they too wanted peace, he explained. “There were some long-standing tensions between the two tribal communities that came to a boil on December 15. A lot of rumours were being circulated on social media — like a person was killed and a village was attacked by another community. Provoked by these fake reports, some people actually tried to set fire to a village. To maintain law and order and prevent rioting, we had to shut the source of these rumours, which were spreading rapidly on social media according to reports from our intelligence units,” he said.But what was about this particular law and order situation warranted a shutdown of the internet? Warrier believed the shutdown helped avoid “hundreds of rioting incidents” and was “necessary and effective”. Despite being a sparsely populated area, internet penetration is high in the area and almost everyone, especially young people, have smartphones with mobile internet, he said. That’s why the rumour-mongering was successful, explained Warrier. He added that villages here are far-flung — certain places are only accessible only by foot — which made mobilisation and deployment of polices forces from the district headquarters tough. “In the face of such limitations, we decided to shut down the internet. And it worked. If it hadn’t been effective, the ban wouldn’t have stayed for so long. The government would have reconsidered it after one or two days. But based on our feedback about the local situation, it was deemed necessary and effective,” he said.Tandon too mentioned instances when the police were successfully able to use internet shutdowns to squelch rumours and maintain calm, but these strategies are only effective during the initial stages of unrest, he said. “It’s not an easy decision to make, but the moment a law and order problem arises, a curfew comes into effect, or people are harming each other and public/private property, an internet shutdown is the only option we have,” he said.But police must ensure they use internet shutdowns sparingly and as the last resort when nothing else works. To enable effective decision-making in this regard, they need to build open-source intelligence labs or social media intelligence units which supplement the traditional methods of intelligence gathering. “The Haryana police started one a lab to enable proactive policing during the Jat agitation. The lab employs systems that are able to analyse a large number of tweets/posts based on keywords, views, location, etc, and sends off alerts about malicious content so they can be nipped in the bud.”Additional district commissioner of police, cybercrime, Hyderabad, Raghu Vir said social media monitoring cells functioning out of the commissioner’s office comb through social media posts, alert to certain keywords. Offensive posts are flagged and sent to the cybercrime cell, which then alerts the networks to remove such content. “Facebook responds immediately, they understand the situation on the ground. I don’t know how fast they are in other countries, but in india they are very quick.” Each day, his team takes down at least 10-15 inflammatory posts. It’s an ongoing battle and the first line of defense against government-mandated internet shutdowns.