New India Manifesto – Chapter 22: Targeted Shared Company (TSC)
Major issues in the employment market in India
People in India are facing a massive unemployment crisis. The pride associated with government jobs has resulted in crores of Indians chasing lakhs of jobs. Individuals who cannot find a job via exams are willing to pay large sums as bribes to get a government job. Some succeed, such as becoming professors in aided colleges in India. The college management takes a hefty sum of 50 lakh to 1 crore rupees to provide jobs. Cooperative banks are another area where hefty amounts are paid as bribes for a low-income job. The status associated with such jobs is why people are chasing such jobs. The TSC model developed in this chapter is a fund parking opportunity for such people, employing them at the company they invest money in.
Leaving India is another trend that is rapidly gaining momentum. People believe that they can earn quick money in foreign nations. Many consultancy agencies defraud Indians in the name of abroad jobs too. Most people who left India for their job have also renounced citizenship, and the brain drain is affecting India by causing a shortage of highly skilled professionals. There are not enough opportunities within India to solve the unemployment crisis and brain drain.
Many unemployed people apply for schemes like Mudra loans and take loans for starting small businesses. However, knowledge of the people regarding the range of businesses that can be created is limited. An ordinary Indian would start a food stall, grocery store, or other business that finds nearby customers. Only a tiny percentage takes such loans to expand in the international market. People cannot think in those domains as they are not exposed to such information. Regular loans are denied to IT sectors as only minimal material purchase is involved. Starting a business in an already saturated market will add extra pressure to existing businesses of that exact nature.
Most non-IT jobs in the private sector are low-paid. Many people in these low-paid jobs want to switch employment and aim for self-employment, but immediate alternatives are rarely available.
Infrastructural shortages, corruption, red tapism and bureaucratic inefficiency, lack of technology, lack of political will and low-quality educational system that is not job oriented are significant causes of continued unemployment in India.
Targeted Shared Company and its Features
Targeted Shared Company refers to a company in which financial resources, responsibility and debt liability, are shared between the government and the private parties.
The government and specific individuals jointly own targeted shared companies for the mutual benefit of the parties involved.
It includes elements from public companies, private companies, cooperatives and joint-stock companies and has features that are not part of these company types.
It is flexible regarding rules so that company profit is highlighted above other interests. The government can make different rules for the targeted shared company on a case-by-case basis during the formation of each company for various purposes.
There is no compulsory requirement for initial capital, especially regarding cash with the individuals involved in the company.
If required, the government can adjust the rules mentioned in a targeted shared company’s initial agreement to ensure these companies stay afloat. This is possible only in a company model where the government participates.
TSC is required to create larger companies with more enormous investments instead of smaller businesses with smaller loans. In addition, it can help in advancing the Indian market and can reduce the import of many items into India.
Some people invest their lifetime savings in pyramid schemes and lose all their money. The main reason for falling into this kind of trap is higher returns on investment. Some people are not interested in bank interest rates and expect higher returns. TSC allows such people to invest in companies that can give higher returns.
TSC can end red tape as the government is clearing documentation for TSC.
Model TSC 1
The government will first twist the existing loan distribution system for TSC.
The government will study import patterns from websites like Alibaba and Amazon Global. For example, after reviewing imports from Alibaba, the authority appointed by the Indian government to learn it has concluded that automotive parts are imported massively into India, especially for car brands of non-Indian companies. Moreover, according to the authority that studied it, a Chinese company is ready to sell its technology and machines for manufacturing certain automotive parts. It will also provide people with training for tutoring on how to use that technology. However, the project’s total cost, including land, infrastructure and machinery, is ten crores. There will also be a list of people required for various positions in this job. The authority also creates selective positions to market and distribute the product.
Thousands of TSCs will be created at the same time. Therefore, waiting for a private investment of 10 crores in this particular company is futile. So based on the positions required government will issue a notification of interest to the public. The hierarchical structure and placement of all positions will be mentioned in it.
In the notification of interest, people can come forward and pledge their property or people without collateral can also express interest in a collateral-free business loan. Even if people have collateral or are interested, only people needed for that positions based on their educational qualifications will be selected first. Only in case of non-availability will other options be pursued. Then, loans of different amounts will be issued, and the company share structure will be declared based on the loan.
There will be a freezing period for loans, and the government will not charge interest on loans during the freezing period. Additionally, the government handles the documentation, taxation and legal paperwork, and the company’s shareholders need not be concerned about it. The government will hold a particular percentage of shares of TSC for providing such benefits to the TSC.
After this, the company’s loanees are also skilled in their positions. So, the people taking loans are also employed in the same company. There will be an annual review system based on various parameters, and in case any employee who is also a shareholder underperforms, they need to quit their job. They can continue as shareholders, or if they want, they can also sell their shares.
The government will also provide free B2B and B2C website and app source code, generally designed for all TSCs. In addition, the marketing head will ensure online presence and social media marketing. However, the maintenance and update of the website are from expenses of the company account.
The hierarchical structure is already mentioned during the company formation. The board will not approve individual salary hikes, the extravagant expense for increasing the luxuries of employees, and all other costs other than those related to company products or services. The salary increase or salary cuts will be considered together annually after considering factors such as inflation and company profits.
The government-appointed individual will be part of the company’s board, and the salary of this individual will be based on the company’s revenue. Other employees can pitch ideas to the board members, which should be recorded digitally. All actions of the company will be recorded and accessible to shareholder-employees of the company. There will be property confiscation and jail term for the board members in case of any fraud. The government-appointed board member will be removed and immediately replaced if a company is underperforming in over three quarters. Employee-shareholders can recommend a non-shareholder combinedly in case of a replacement.
The fifty-one per cent shareholder ownership model is not applicable for TSCs where the project idea comes from government-supported channels. Government has the final say, and the voice here stands not for the welfare of employees or the public but for the company’s shareholders. If all the shareholders jointly want something, the government will only favour their choice. The company’s shareholder-employees will have a significant role in ensuring resources are fully utilised by the company even though there are government-appointed board members. The government will compensate any loss a government-appointed board member creates due to fraud.
If the company makes high profits and wants to buy out the government and all shareholders are jointly vouching for it, it should be allowed. The government will sell its stake to the shareholders or the person the shareholder points out, and TSC will be converted to normal company rules and regulations.
If the TSC is making a loss and the government wants to infuse money government will buy an additional share in the company by taking up the paying responsibility of local body taxes, electricity bills and water bills. So, the one-year probable amount of these utility bills will be transferred to the company as an infusion. In case of loss-making, the shareholders can also sell their shares and bring more capital to the company. Government can further infuse money by not taking its profit share and allowing it to be reinvested into the company by purchasing more shares.
Government can sell additional shares amassed if another buyer from the public wants these shares. So, in this case, the government will keep the received money with itself. However, selling these shares does not affect the government’s say via board members.
The government’s say in a TSC does not mean the entire government can interfere in a TSC. 1-2 individuals appointed to the TSC board by the government who is also acceptable for employee-shareholders are the ones with a say. When TSC owners lose confidence in them, their say ends, and new replacements will be made.
In the shareholder-employee model, since one person has twin roles, it can help in loan repayment. The profits from being a shareholder can be used to pay EMI of loans, and the salary from being an employee can be used as one’s income.
If the company continuously make lower revenue in four quarters, then the company will be sold or restructured to reduce the total losses.
Model TSC 2
This method provides higher independence to TSC shareholders, and the shareholder-employee will decide major decisions for TSC for themselves. The government gives the loan to the people who provided the project idea.
Suppose a person out of college submits a startup idea of developing a website that has not been implemented in the state or nation before. In that case, the government will consider the idea. The futuristic profitability from the idea’s success will be analysed. Funds will be allocated based on the lifetime academic performance of applicants. If NEEIS comes into existence, then performance in other academic areas will be considered.
However, if students can submit an extraordinarily impressive idea, then no academic performance matters in such a scenario. When they present the project idea, it should explain the international market, national market, marketing methods, current competitors, market potential and many areas. The government will introduce a long list of guidelines for submitting a project idea.
Ideas like soap, book and juice manufacturing will never be allowed as project ideas. What is required is introducing foreign technology, creating innovative software or any industrial idea, such as creating a machine or machine product that has yet to be experimented with in India.
The maximum amount allocated without collateral for such a startup individually can be 10 lakh. The government will allot land and building at its own expense and charge rent as a share in the startup. The government will bear all documentation, utility bills and tax expenses which will be adjusted with the share percentage. The amount can be increased if more friends or colleagues from college are in the same startup. If appropriate collateral exists, the amount can be increased from 10 lakh for one individual.
The founders will have some restrictions regarding taking larger salary slips and buying luxuries. All expenses from this loan allotted amount will be submitted through an official channel login designated for them. They should take only a small amount to meet food and housing expenses, and once the startup becomes a success, they can buy luxuries or whatever they want from the returns of their startup. The government will appoint a board member only to check the company’s expenses rather than regarding other decision-making.
This model can be developed to create software companies, new gadgets and innovative machines. In addition, new foreign technologies can also be introduced if technology transfer is available.
People can also choose a usual loan route without government participation. However, TSC will provide many perks, and people will keep their purpose if monitored. So startups may prefer the TSC model over private companies.
Model TSC 3
Sports talent management agencies, real estate agencies, brand development agencies, and public relations agencies are some of the most underdeveloped areas in India. Only a few agencies exist, and there is no scope for more agencies due to the current underdeveloped markets in India.
Escrow system, NEEIS, creation of national-level brands replacing international brands and PR management in a business will be promoted vehemently by state and central government. It will create a new market for agencies. Social science experts, especially economists, sociologists, political scientists and marketing experts from the commerce sector, especially MBA graduates, will find new opportunities in this newly developed market.
People skills are the first requirement of people engaging in this job, and TSC will be approved for people with such skills from humanities and commerce backgrounds. There should be a loan amount range between 30 lakhs to 70 lakhs for TSCs. 10 lakh each without collateral can be allocated to 3-7 people in a TSC. Every sector has a saturation point, and more than 1 TSC for one crore population in one industry will not be approved.
The government will build the office building, which will take a share of 20 per cent in the company for rent and building investment. The TSC shareholder-employees will only take a minimal amount as salary. They should be able to bring clients with their charm and skills. Once they can bring clients, they get an additional amount based on the incentive-commission approach instead of increasing salary. This will ensure that the company remains profitable in the long term.
In this type of company, other than internal fabrication works, website development, computers and transportation expense, there is no further machinery investment, and the most amount is only for salary payment. So, there will not be an additional infusion amount by the government in such TSCs until they are in the profit zone. This is unlike other startups; if they fail to convert their people skills into bringing brands as clients and signing up sportspersons to promote such brands, then they should be shut down. There is no interference from the government, and only extravagant spending is questioned. Once NEEIS is implemented, many stars from the school and college levels will get paid by brands if these types of companies exist. State-level sports leagues and game leagues for different sports and games will get a higher reach and a larger market.
This model will also allow many rising celebrities to get additional income and is affordable for celebrities too. Agencies will have multiple clients and will only take a percentage of the sponsorships or company partnerships amount they get for the clients. So, clients are not paying money to agents directly. Agents make money by helping clients make money.
Model TSC 4
This model is where an entire company comprises loanees and investors where the shareholders do not want employment.
However, in case of returns from TSC company are long-term, the loan will be provided for a long time, such as 30 years for collateral. So, the property will be locked for 30 years. In the case of TSC, where returns are in the shorter-term tenure of the loan will be reduced to lower years.
For example, creating a tourist destination artificially in a place may require a long-term investment. The government may find land for the project, and infrastructural development may require large funding. A TSC can be developed in such a place, and the shareholders will benefit from the long-term investment. TSC will benefit from every single business that is started on the premises of that tourist spot.
Mining companies will be created and use labour zoning methods in foreign nations. However, the returns and profits will be faster than tourist projects. So the tenure of loans will be lower years.
TSC Types in which the above Different Models can be Applied
A. Building and Road Contract Companies
Civil engineers and local jobless youth join to start a local building and road contract company.
B. Labour Zoning Company
Mining companies, IT companies, and manufacturing industries can be started in different parts of the world using the TSC model. In case of any instability in the away country, the Indian government will guarantee the invested amount.
C. Reskilling Employment Model
Companies that arise based on the new capabilities of reskilled individuals.
Four Ways to Join or Start a Targeted Shared Company
A. Zero Collateral or Capital
An unemployed person willing to take risks to find a stable income belongs to the first category of people. They do not need any property or any other capital asset. All they have to do is that they need to apply for a loan amount. They have to affirm that in case of company failure, they are liable to repay the debt amount to the government. The business amount allocated will be marked similarly as a business loan in their credit ratings. Loans for general projects in which smaller loans were regularly distributed previously under schemes like Mudra will be reduced or stopped to create funds for TSC.
The group taking loans will get access to the total amount to spend in their bank account only if they take “individual risk“, as in the case of startups.
In all other situations, there will be “government allocated risk“, and the amount is handled under the supervision of the government.
Creating large companies above the tier 3 macro level using the no capital method is difficult in case employment should also be provided for all. However, if a workable model can be developed, it should be considered too.
B. Property as Collateral
When people pledge their property, they can be awarded higher loan amounts. The company capital can increase to above 100 crores if 100 properties worth one crore each are pledged. This method can be used to create companies with large capital sizes.
C. Savings Method
Individuals willing to be part of this method already have an investment amount and do not require government financing via loans.
Such people may not require employment in this company and are looking for an avenue for investment.
D. Non-resident Share Investment
This works like a mutual fund, as the non-residents will invest money in different companies as small shares. This method will provide a capital infusion to new companies and ensure non-resident income channelling.
I am only providing some methods above, and other regular methods to find capital, such as crowdfunding, and VCs, are all included. A mix of different methods can be applied for the same TSC, as funding is what matters.
Major Classification of Investment
A. Investment Only: In this method, investment in the company and running the company behind the boardroom or shareholder meetings is the only concern of the members.
B. Employment+Investment: In this method, the investors are part of the boardroom and also part of the employee workforce. So, the employees will earn a salary and also part of the company’s profit share.
TSC Risk-based Classification
A. Individual Risk
The company members are responsible for developing the required ideas and the company’s main niche. The government will provide funding support for assigning loans to each individual and pooling the money.
Some benefits in the ‘government allocated risk method’ will not be available in ‘full individual risk.’ For example, suppose the government believes additional capital infusion via tax bills and utility bills advancement amount is not worth it due to poor performance. In that case, such additional benefits will not be available. TSC board members do not decide on capital infusion and will have another TSC authority that evaluates account books and company health.
B. Government-Allocated Risk
The government will provide the idea it collected from various sources and will provide details how the project must be implemented in this method. The government-appointed board member will have a significant role in ensuring the day-to-day working of the company.
Skill-Based Analysis While Creating the Workforce of a TSC
These factors should be kept in mind while recruiting people needed for TSC.
- Skill Addition:In this process, new skills must be learnt, and the person should have the potential to learn those skills quickly. If machinery is needed to be operated, the handler should be able to do it.
- Skill Enhancement:In this process, people with existing skill sets start a company and will upgrade their skills on their own while running the company. The government will provide many platforms that enable them to do so.
- General Works:Any work requiring only general skills comes under this category. There is no requirement for high-level specialisation for positions. Clerical jobs and shop sales employees are some examples of general work.
Company foundation – Relationship basis
- Anonymity: Company members are not related to each other and have no prior relationships.
- Friend or Family circle: In this case, people who are close friends, collegemates, and family members come together to establish a company.
Three types of Niche allocation
- Inter Allocation: People with different niches come together and are placed in a company.
- Intra Allocation:People with the same niche come together. It does not mean that 100 per cent are of the same niche. However, the majority of individuals will belong to the same niche. For example, a meat processing plant has primarily people with the same skills.
- Diverse Allocation:People ready to join under anything are prepared to learn any skill or do any job as assigned. It means that they are prepared to learn a niche for a livelihood.
Location of plant/services unit
- Nearby – Individuals want the company to be established in nearby regions, i.e. within a 40-kilometre radius. The primary intent is that it should be within the travelling limit. Many women who are unavailable in the workforce will be willing to participate if they can travel to the workplace daily without shifting residence.
- District – If the region needs to be extended so that workforce from different places can meet, then the area can be extended within a district.
- Statewide – Individuals will not be provided location preference in case of statewide plant/services unit. This option can be selected for large companies where large plants are required.
- Nationwide – Large companies are established based on import and export feasibility. Individuals who are only part of investment and not concerned with employment are part of this type.
Grouping company size
A. Based on the number of members
Micro: It will have 1-10 individuals – Only startups and businesses that are rare will be allowed
Medium: It will have between 10- 100 individuals
Macro: The total number of individuals will cross 100 for the macro level.
B. Based on the initial capital amount
Micro: The total amount will be from 10 lakhs to 25 lakhs rupees
Medium: The total amount will be between 25 lakhs to 1 crore rupees
Tier 1 Macro: The total amount will be between 1 crore to 10 crore
Tier 2 Macro: Company with an initial capital amount between ten crores to 100 crores
Tier 3 Macro: Company above 100 crores
Role of Central and State Government
The role of central and state governments differ according to the situation. If the state government provides land and building, then the state government will have a higher share in TSC. So according to documentation, the loan provider shares will vary between these two tiers of government. However, only the central government can appoint board members, and non-political skill-based appointments will only be allowed. In case of any breach, it will be considered as corruption. The centre makes the appointment after consulting TSC members and after they are satisfied with the credentials of the future board member.
Separate Trading Platform for TSC Companies
People can purchase company shares directly from this platform as private company stock. Interested TSCs can register on this platform.
Total shares: Individuals and the government can exit their total shares in the company after the freezing period. In such a case, all TSC shareholders may exit due to loss or receiving excessive profits from selling. In case of loss, government shares may be given to members if the loss results from market failure or similar reasons. In case of profits, the government will keep the entire amount.
Per cent of shares: Individuals can sell a per cent of company shares to private investors. People can buy anytime but can sell only one year after the purchase of shares.
Speed Assessment and Govt. Responsibility
The government will take responsibility for the loan amount, and individuals can be bailed out if the total days required to start production exceed the agreed date. It can be extended if individuals are ready to wait for another date, and the loan interest will be calculated only when production starts. The central government will buy back the shares of individuals who want to exit the formula due to delays from the government part. Bureaucratic individual accountability will ensure action against officials involved in the project’s delay.
Data Analysis Centre
The central government will create a vast body that includes different sectors and analyses various products and services traded between countries. The body will analyse the potential opportunities in different sectors. The body’s findings will not be published or available to the public. The analysis will include all transactions where there is outward money flow. For example, Envato is an Australian software company with significant income from Indian startups and individuals. An Indian alternative can reduce the external flow of the Indian rupee.
Members of the data analysis centre official will only get an average salary. DAC will develop model projects for new companies, and if the company is activated, it will receive higher pay as a commission. Such a person will also get an opportunity to become a board member of the company.
The data analysis centre will create a list of all companies worldwide and create a profile of their working model. Enhancing these ideas will help make ideas that can be used to develop TSC.
The public will be invited to contribute business models; if a company is developed using this model, that person will be rewarded. Additionally, such individuals can be part of the advisor team of that company developed if they are interested in doing so. People can choose the reward they want. They can be given a share of the company, a board member opportunity, or a one-time reward for their idea.
TSC companies developed based on the market can be categorised into six types. DAC will actively engage in studying these six types.
- Companies that are intended to expand their Indian presence into the international market.
- Companies that serve the domestic market.
- Companies that can replace Indian imports.
- Companies that produce foreign items intended to be sold in foreign countries instead of serving the Indian market.
- Companies intended to simultaneously serve the national and international markets, such as IT software.
- Companies created to increase inward remittances, such as mining companies in another nation.
First Movers and Improvers company
A first mover is a firm that develops a service or manufacturing product that achieves a competitive advantage by introducing it first to the market. Before rivals join the market, being first often helps a firm to create strong brand awareness, fresh investments, and customer loyalty.
Improver enterprises can benefit by learning from the faults of their predecessors, and it will help to establish a new innovative market. The new firm can fix and improvise the new items to make them better and more affordable, ultimately gaining the market share of the first movers.
The data analysis centre will add new fields and potential existing models to its database that can generate a new outlook.
Since employees are the owners, they have the psychological satisfaction of working harder and will be more innovative in companies as they receive profits from the company. Also, in case of non-performance, there is auto termination which will ensure being lazy will terminate their job.
Performance Classification and Salary
This classification is essential and should be mentioned to all TSC shareholder-employees before starting a company. If the individuals who co-own the company stop performing, they should be removed from their jobs. Saying this information before beginning the company will ensure this is not a free lifetime pass.
Performance classification is based on industry standards and is based on similarly placed jobs in other companies. Employees should be classified each quarter, and decisions should be taken based on various parameters. People falling under negative performers should be removed based on automation. Underperformers will get the opportunity to their performance. There should be a point system of 100 points, and once they do not cross a particular threshold, they should be considered fired. If this decision is left to TSC shared co-owners, it may result in rivalry and hate.
The classification system should be as below
- Extra and smart performers – 80 to 100 points
- Regular performers – 60 to 80 points
- Average performers – 40 to 60 points
- Underperformers – 20 to 40 points
- Negative performers – 0 -20 points
The salary should also be determined based on this performance classification and skills. Each specialised job, such as engineer, IT customer support etc., should have its salary structure and performance rating points.
Fifty-one per cent of decision-making power does not apply to TSC companies with government-allocated risk. One primary reason is if a few individuals group against others; then there will be infighting. The authority to take decisions such as business models is rested with the government. The government will allocate a separate board related to the niche associated with the company. The board’s responsibility is to ensure investor returns, profit maximisation and product/service client happiness. Employees-oriented working is only a secondary concern.
Each decision made by the council is accessible to TSC shareholder members, so there is no chance of corruption. In case of hiding any action, the board members will be terminated, and their properties will be confiscated to make up for the losses. If the board member cannot bring profits to the company, they will be replaced.
New Job Market
TSC can generate 1+ crore employment and is a direct method for attaining 100 per cent employment in a nation.
Assembling Machines Model
Instead of assembling machines, in TSCs, humans are assembled to create a company faster. Government can assemble people with a particular set of skills from different fields and enable them to access certain infrastructure facilities and machinery via loans using this method to fill specific gaps in the various sectors of the nation.
Taking Over Existing Projects and Companies for Land and Infrastructure
There are many loss-making and failed projects in India. Most of these projects are started by state and local governments for political stunts. Using TSC to take over these lands and infrastructure can help utilise existing resources. Taking over these companies does not mean that they should run what previously existed. The purpose of taking over is only for land and infrastructure rather than for turning the current loss-making business profitable.
Salary and Employment Creation of TSC
Each job profile will be analysed, and jobs inside the company will be allocated based on their current abilities and potential ability to learn new skills. The salary structure will be determined based on the market and location average. No members will be provided with a job to fill a position or create employment for someone.
Creating a position for inserting a person is seen in government establishments. It is one of the main reasons for loss-making in the government sector. The job is not required at all, and the government does it just to increase PSC jobs and claim to the voters that they have increased job opportunities for youth. Therefore, this type of approach will be banned for TSCs. No position will be created just for generating employment and will only be created if it is required for the company’s existence.
The eight-hour work model is not applicable as profit-making is the primary motive of TSC shareholders. New employment will be avoided if they can work one more hour daily and avoid creating a new position.
Existing Companies Conversion
Existing companies can convert to targeted shared companies. The companies will share profit, company share and a percentage of selling product price with the government. In return for sharing their profits, payment of electricity bills, water bills, taxes, and other government-related expenses will be waived until the company exists. No local bodies can engage in any additional payment request as the targeted shared companies are directly engaging with state and central government. However, their company books should be transparent and accessible to the government.
Special Note: This is the twenty-second chapter of the book New India Manifesto by Blessen T. Sam. The concepts introduced in this book are unique, and referencing the book and the author is appreciated. Support the hard work of the author to modernise India by purchasing a print copy of the book from Amazon or Flipkart.