Vedanta chairman Anil Agarwal hails Indian talent for Jugaad, but is it always a good thing?

The limited availability of resources in India requires people to use unconventional methods to solve problems, but it also creates room for the growth of innovative startups. These days the daily visit to a grocery store has been replaced with browsing through products on a smartphone app, while cloud kitchens deliver home-cooked food and income for housewives. Beyond the usual technical jargon, Vedanta Chairman Anil Agarwal credits the unique Indian instinct to come up with ‘jugaads’, for this growth.

Reaching out to young Indians through a LinkedIn post, Agarwal referred to Indian youth as dreamers and innovators who play a role in the growth, which has made India the fifth largest economy. He mentioned how carrying groceries on a cycle all the way home as a child, used to leave him exhausted, and mentioned how apps such as Zepto and Swiggy have changed that. He highlighted 44 Indian startups that became unicorns this year and said these firms have become a part of daily life in India thanks to tech.

The word means different things for different people

He summed up this innovative approach to surpass limitations as ‘jugaad’, which was also added as a word in the Oxford Dictionary in 2017. It has been defined as a flexible approach to problem-solving through the use of innovation. But while it sounds good as far as improvisation goes, jugaad has also been described as a band-aid, which only helps for the time being.

In an economy, it can’t replace long-term solutions coming from policy reforms and economic freedom. For instance, the failed Paytm IPO and a sudden rise in losses for Byju’s, are raising concerns about the startup bubble bursting. The absence of business fundamentals from the valuation process which turns startups into unicorns also raises doubts. The delivery services that Agarwal mentioned, are facing strikes by underpaid employees, who work for 12-15 hours. Many of them are sweating it out on cycles in the heat now since they can’t afford motorbikes and fuel prices.

The times when jugaads have backfired

Former RBI governor had also slammed the culture of ‘jugaad’ in India back in 2015 when he said that shortcuts and evasion aren’t sustainable for solving problems. He had highlighted the need for building institutions to ensure growth in the longer run.

As for Anil Agarwal’s firm Vedanta, it was hit by a Rs 25 crore fine by the National Green Tribunal for violating environmental norms to expand its facility in Odisha. Another jugaad by the firm to use shorter chimneys for its smelter, that saved costs but increased pollution, backfired in Tuticorin. Police firing on local protesters against Vedanta’s smelter, led to 13 deaths.