Showing posts with label IIPM Think Tank. Show all posts
Showing posts with label IIPM Think Tank. Show all posts

Monday, July 29, 2013

China does a mini-Kargil

The objectives are big

China has sent a complement of 50 troops 19 km into Indian territory in the DBO sector in the middle of the strategically-significant Depsang Bulge. The sector is at an altitude of 17,000 feet. Protracted discussions have just begun. China claims the territory as its own; India is busy finding ways to secure a retreat of Chinese troops. The development reflects poorly on Indi's so-called China experts.

China has been frantically developing its national power with economic acitivity, expansive military infrastructure and technology build-up. On the contrary, India has been a meek reactionary hobbled by  lack of foresight and diffidence in the name of caution.

A comprehensive study done by the Eastern Command two years back had brought out that China was ready to initiate its conspiracy against India. The report clearly enunciates the Chinese ‘External Calm and Internal Intensity’ strategy that will not be aimed at achieving any military gains but to  to humiliate India, undermine its rise and dent its position.

The present local position held by the Chinese troops is 30 km south of Daulet Beg Oldi. Daulat Beg Oldi and its airstrip are located just south of the great Karakoram pass; it offers India a means to snap the road route between China and Pakistan and guard the eastern gates to the Siachen glacier. Thus it can, if China holds on, be interdicted.

Zorawar Daulet Singh, an expert on China-India military relationship, says, “The Ladakh incident has been provoked by the Chinese to bring about a new operating environment on the border and draw Delhi’s attention to the tactical level.” It sounds plausible when one analyses China's demands.

On one side, China is setting conditions to stop construction activities at Daulat Beg Oldi and at Chumar where a helipad is being built, and for some tin sheds at Fukche to be dismantled. What has miffed China is the Indian steps to better its infrastructure. Infrastructure development has been in the media for decades. It’s not that we are doing it secretly. Now, once China has completed its infrastructure build up it aims to hinder Indian side of infrastructure buildup.

Border patrols have increased from both sides as China increased its number every year. This is an extension of what was being tested for years. It can be termed as a mini Kargil. Although it was not an off-season intrusion, it was well planned and caliberated. There are clear signs that the Chinese are gradually adding up to the symbolic escalation as they started with tents, increased their numbers, added flags and they will keep waiting for Indian reactions and then will accordingly keep adding to the provocation. No country will throw its soldiers in and this is least possible from a country like China which plans its moves with great care.

If we draw a parallel with the war zone campaign, then this move by China is quite clearly akin to  ‘External Calm and Internal Intensity’. The primary aim here is to lull the adversary into lethargy and inactivity, exactly like it happened before 1962. The slogan ‘Hindi Chini Bhai Bhai’ sums it up the best. As in 1992, the army had drawn a precise analysis of 10 years of the Chinese plan ahead. In Indian army relocation plan and dual tasking official document of Indian Government had led to ending the posture taken during Operation Chequerboard. This operation was launched during General K Sundarji’s time when China had tried to grab a post in Sumdorong Chu. Gen Sundarji had deployed troops in an offensive posture and which had resulted in China backing off. But after the Army’s relocation plan this posture was discontinued. It might have been a wise decision then as it was based on operational information that China was not ready to fight a war for the next 10 years as it was to focus on building its economy and infrastructure. But the analysis that no fight would take place till 2002 also meant that China would be ready for action after 2002. What was our response apart from changing the posture? Did we engage in improving infrastructure and operational capacity? India has not bought artillery guns for two decades, Our air defence has holes, helicopters are lacking, tanks are night blind. Our field formations do not have proper practice ammunitions. The list is long even if we do not talk of the approved strategic roads after the Kargil Committee Report. We have awakened late and started proper allocation in 2010 which will take another 10 years to develop. So, since 1992 poor appreciation and bad military management have hobbled India. TSI, through its sources, has learnt that almost 30  to 40 per cent of the army’s vehicles do not have fuel to run them. In August 2012, an executive order was issued that no new vehicle would be bought.

Ironically the defence Budget increases every year but does not take cost escalation and inflation into account. A senior officer informed TSI that for nine years the utilization of Capital expenditure has been the maximum 9 percent of the allocation. “The first half of the year is wasted in delaying the files and then executive orders are issued and the allocations are blocked,” he adds.

From August the weather will make any troop movement impossible. China had tried the same strategy with Japan but met with strong resistance. It also used pressure tactics with Vietnam and the Philippines and is now doing the same with India. India not only needs to discuss issues with China in clear terms but also focus its priorities and build its national power in a synergized manner. Otherwise, it will only have to capitulate to the smart moves of the adversary.

Dr Dibyesh Anand, associate professor, Westminster University and an expert on China, believes there is relative paucity of neutral and non-nationalist scholarship from the mainstream Indian media, which prevents a dispassionate analysis and gives space to hawks who fit this event into the older lens of bad China/good India/impotent Indian government.  He says: “The way out is to temper down the tension, and ensure serious conversation between Beijing and Delhi without the media baying for each other’s blood,” says Dr. Anand.


Sunday, June 2, 2013

A Toxic Tale

Animal Planet is crawling with them. So is Nat Geo Wild. It’s snakes and the modern day snake charmers, herpetologists with a penchant for one way conversations – folks like Austin Stevens, Jeff Corwin, Brady Barr, the man who started it all, the late great Steve ‘Crikey’ Irwin, and of course, our  home grown sweet talking snake wrangler – Gerry Martin, who seem to have taken over all the prime time slots on animal tv.

They make for wonderfully exciting viewing, I will give you that. Most folks, even those that love dogs and cats and birds, and find monkeys cute and white mice adorable, shudder at the thought of a snake slithering along their arm.

Snakes inspire revulsion and reverence in equal measure. The scales, the forked tongue, the unblinking eyes and the possibility of a lethal liquid flowing through their switchblade fangs elevates them to the status of a god for a few and the very devil for the rest.

So I can understand why it is like standing barefoot on the very edge of reality tv to watch a man as mortal as you and me, literally kiss death as his lips touch the raised hood of a king cobra. These men catch mambas by their tails, taipans by the neck and play with rattling rattlers like they were a child’s toy. The tiniest scratch from any one of these snakes could lead to a painful and hideous end for these experts.  Even with antivenom, the recovery process is uncertain, slow and very painful. So those men are risking a whole lot for good television. Should you try this at home? Sure, go ahead. If you’re as incredibly lucky as I once was, you will survive both the encounter and the feeling of having been monumentally stupid when the realization of how close you were to a grisly death has washed over you. And if you are not, you will be in that privileged ringside seat to the spectacle of watching the limb that suffered the hemotoxic bite disintegrate in front of your very eyes as you writhe in the kind of agony that might make getting impaled on a stake feel like a vacation. Or you could try guessing which of your organs is shutting down first as the neurotoxins motor along your arteries. Whichever the nature of the venom, it is unlikely to be a quiet death, I promise.  

Here’s my story that I might have shared in bits and pieces on earlier occasions but this time I present it to you in its entirety as a prelude to ‘what to do when the naughty one from Eden comes calling’.

A few springs ago, I was walking out of my office which was then sitting pretty near the green glades of Sanjay Van near Qutab Institutional Area, when I spotted the guards crowding around a pair of flower pots. I peered over their shoulders and saw them poking at a long slim snake with sticks. More than two feet long, a deep dirty brown with bands running rings around it. Some wanted to kill it with sticks, some suggested burning it while a few where of the opinion that it should either be left alone or carried outside the premises and released.

One of the men said that he had often seen these snakes around the area. Now that got me thinking. If this snake was common in the area, it was important to know whether this snake was venomous or not and what should one do if one of these snakes just pops up around a corner. So I suggested that they put the snake, unharmed and whole, in a container so I could take it to the zoo and get it identified and find suggestions for a viable protocol if this kind of an encounter was to happen again (mobile phone cameras weren’t really de rigueur in those days and so physically carrying the snake was the only way out).

A plastic bottle was procured and the snake, still sluggish in the cool of the morning was poked and picked and placed inside the bottle. One of the guards thought the snake might find the confines of the bottle claustrophobic and punched a few holes into the cap. But now the holes seemed big enough for the snake to escape through them and so he stuck a few twigs to plug the holes. Equipped thus I stuck the bottle between the seat and the door to keep the bottle upright and drove off to the zoo. A speed breaker later, the bottle keeled over and a forked tongue flickered out of the port window in the bottle cap. If the snake got out, it would be impossible to find in the folds of the car’s insides. I had to pull over and set things right. Like I said, it was a monumentally stupid decision to transport a potentially dangerous reptile in this fasion and then to drive with this distraction through Delhi’s notoriously hostile traffic.

Anyway, we both survived the trip to the zoo where I explained my situation to the folks manning the gate and I was ushered in to reptile house. I held out the bottle with the gaping holes in the cap (the twigs had given in to gravity and had fallen through. The little snake had climbed along the length of the twigs and was now poking its head out of the bottle). The man at the reptile house shrank back in horror. “Krait! It’s a Krait”, he whispered. My hands must have started shaking involuntarily at the exclamation for the bottle vibrated in my hand and the snake dropped down again to the bottom.

A krait?! I had been cradling a krait all this while? t krait in Re first time I came across those five dreaded letters was in Rudyard Kipling’s Rikki-Tikki-Tavi, that unforgettable tale that pitted a pair of cobras against a brave and wily pet mongoose. In the story, Kipling’s krait was smaller but as venomous (as a matter of fact, ounce for ounce, krait venom is even more potent than cobra venom) and dangerous as those hooded emissaries of doom. “It is still a little chilly these days. This one got out a little too soon and that’s why you are still alive”, snapped the zoo ‘expert’. “Half an hour is all it will take for this little devil’s neurotoxins to take you to the brink of respiratory failure”, he added.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Tuesday, May 7, 2013

Bid adieu to these 10 WMDs!

The only thing that can perhaps be worse than hiring the wrong employee is hiring the wrong leader. In this incisive analysis, Prof. Arindam Chaudhuri, Honorary Director, IIPM Think Tank and Prof. A. Sandeep, Group Editorial Director, Planman Media, identify 10 CEO traits that are an agglomeration of bad news for the companies that they lead.

It’s the position that makes the most bucks. But then, it is also the position where the buck stops rolling. The CEO is answerable to every stakeholder imaginable for the success or failure of any operation/division; be it marketing, HR, operations or finance. He takes decisions, sets the direction and sets the organisation up to execute on his strategy; and can be the critical difference between a company that ups the ante and one that falls of the cliff.

The traits that define a good CEO have been the subject of scrutiny and debate over several years, but it remains largely unresolved. That’s certainly bad news for corporate boards, who would want to go to any extent to ensure that they have the right man. Based on exhaustive research and industry interface over the years, we present an expansive primer of 10 typical traits of unsuccessful CEOs, which should act as red flags for any company.

#1 the best one-trick pony you met

To be true, multi-tasking is a way of life today, but one really wonders if it is the trait that should be associated with CEOs. If you look at expert analysis, CEOs looking to specialise in one area, with the belief that it leads to better efficiency and performance, need a very urgent reality check. Dr. Louis Csoka published a benchmark report titled ‘International Communications Research in December 2006, which proved that multi-taskers were not only more educated in comparison (78% more) but were also better paid (200% more!). It is also affirmed in a research by Dr. Levenson (University of Southern California), Dr. Gibbs (Chicago Graduate School of Business) and Professor Zoghi (Bureau of Labour Statistics) titled, ‘Why Are Jobs Designed The Way They Are?’, that in world leading organisations, ‘multi-tasking’ “leads to greater productivity” as compared to specialisation. One case in point is highlighted in the NHS Report from Institute for Innovation and Improvement, which wrote of Microsoft founder Bill Gates, “Gates is the original multi-tasking man...” In fact, Gates’ belief in multi-tasking is so supreme that “once, Gates hung a map of Africa in his garage, so he could have something to occupy his mind for the precious seconds spent turning on the engine of his Porsche.” In other words, there is a significantly high probability that single/limited tasking CEOs would easily find their way into the ignominious list of worst performing CEOs.

#2 let’s be history together!

Does your organisation revolve heavily around one power figure, with his immediate deputies leading the rest in following his cue blindly on every occasion? If that be the case, you must delink from this organisation at the earliest opportunity. The right CEO is one who identifies potential insiders and grooms them relentlessly into leadership positions, and keeps a list of potential successors ready. The wrong CEO, simply put, is one who does not do that. Global HR consultancy Heidrick & Struggles reveals an interesting research finding, which states that “merely announcing who your next CEO will be, can move the market value of your company by 5% or more!” Centre for Economics & Business Research also proved in its benchmark research of 350 FTSE firms in 2005 that firms with unplanned succession planning for CEOs underperformed their counterparts, who had proper succession planning in place.
 

Friday, May 3, 2013

“You cannot start suddenly if you are not ready”

Dr. Gopichand Katragadda, MD, GE India Technology Center, believes that companies have to be far more patient with reverse innovation opportunities

B&E: GE has been a pioneer in applying a reverse innovation philosophy. How does GE prioritise vis-a-vis reverse innovation and glocalisation?
Dr. Gopichand Katragadda (GK):
The progress of technology is great, and you need to leverage what has happened. There is no point in inventing everything. So I think this is where we falter in a big way. We talk of indigenisation, and we study for 30 years trying to catch up with where other countries have taken off. By the time you are there, other countries are 70 years ahead, because that is the pace of innovation. So you need to leverage what is already there and then move forward from there. For instance, a gas turbine is the same gas turbine and an aircraft engine is the same air-craft engine, whether it is designed for the western market or the Indian market. So why do I need to develop a new aircraft engine for Air India, or for any other airline? There is no unique need that is driving that. On the other hand, in the field of healthcare, TB is a need that only India can articulate the best, because we have an unresolved issue there. So who else should solve the problem other than those who are here on the ground? So let’s not worry about the aircraft problem and let’s solve the TB problem, where there is no solution in sight so far.

B&E: Could you elaborate on some more areas where the Indian market needs new solutions?
GK:
Since we were discussing health-care, I’ll continue on that. I talked about TB. The information systems in India are not so robust. So when it comes to my insurance, I can’t go from one place to another, just quote a number and be set. So I should be able to carry a smart card that contains all my medical information and doctor’s advice. It’s a unique need that offers a lot of opportunities. When it comes to ultrasound, you cannot do a sex determination for the baby in India. But if you are doing an examination and you are smart enough, you can make a guess at some stage of the pregnancy. How do you mask the sex of the baby while providing all the clinical information for the doctor, is another unique area in India. Diabetes and cardio-vascular diseases might be there elsewhere, but we have a higher incidence of them. So talking about and working on obesity, these are some of the areas that India needs to work more on as we have a higher incidence of these diseases at a younger age. When you have a life span exceeding 80 years in US, it is unfair to compare that cardio vascular disease ratio with ours, because we are getting these diseases at the age of 50 or so and it is constantly moving down.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Saturday, April 27, 2013

At the cusp of a great execution opportunity

The real estate sector in India has come off its peak two years ago and is currently being dragged down by a host of issues. For the sector to get back on the growth track, there’s much riding on how leading players such as DLF get their act together again.

For the last two years, the real estate sector in India – whose market size is expected to reach $90 billion by 2015 – has been witnessing slowing demand and inventory pile-up. The unsold inventory in residential real estate so far this year has been the highest in Delhi-NCR at 102,758 units, followed by the Mumbai metropolitan region at 90,512. Bangalore comes next with 46,596 units, and Pune follows with 40,734 units (PropEquity statistics). At the same time home loan interest rates have refused to come down and this has dampened sales even further. Growth in home-loans dropped to 12.1% for the year ended March 2012 from 16% in the last fiscal year.

Even the prospects of commercial property have dimmed severely. The drift is likely to continue for the next few quarters, with absorption of office space expected to drop by 10-15 % for 2012 due to lower demand from the IT/ITES sector. Demand from IT/ITES sector has dropped from 68% in 2005 to 35% at present due to increasing cost pressures faced by IT firms.

To make matters worse for the industry, most of its leading players are reeling under high debt. The cost of debt for most real estate companies is in the range of 12-15%, on the basis of which the combined interest burden itself on them is between Rs.40 billion and Rs. 50 billion. With home sales at abysmal lows, real estate companies are finding it difficult to deliver their projects or repay their growing debt on time.

Apparently, nearly half of the 930,000 under-construction residential units in the country, scheduled for delivery by 2013, are likely to be delayed by up to 18 months. Analysts say many of these delayed projects might be up for sale as developers will not be able to revive them due to shortage of funds and cost of debt servicing.

According to industry estimates, the combined debt of the country’s top 11 listed real estate companies stands at around Rs.350 billion. While many small and mid-sized Indian property developers face the risk of default, the big ones are trying to overcome the situation by delaying projects, discounting properties and even selling assets. Leading real estate player Unitech is selling land parcels to pare its debt, which stood at Rs.51.9 billion as of December 2011. It had a land bank of 605.4 million sq. ft. in

March 2008, but by December 2011, it had declined to about 304 million sq. ft. Another leading real estate firm, HDIL, which had a debt of Rs.41 billion as on December 31, 2011, recently sold a two-acre plot in Andheri, Mumbai, to the real estate arm of Adani Enterprises for Rs.9 billion.

Even the country’s largest real-estate company – DLF – which ranks #73 on this year’s B&E list of Most Profitable Companies, has been finding it extremely difficult to raise funds and reduce its mountainous debt of Rs.227.58 billion as of end of December 2011. Its debt burden rose to around Rs.200 billion on the back of a tenfold rise in its interest costs since 2008. The interest outgo in the fourth quarter of FY2012 increased to Rs.6.03 billion from Rs.4.55 billion in the year-ago period. The company, as a result of its huge costs, has not been able to post an increase in quarterly profits over the last two years, and its sales growth has also fallen over the last four quarters. For the quarter ended March 2012, DLF posted a 39% drop in consolidated net profit at Rs.2.11 billion. Similarly, consolidated total income dipped 4% to Rs.27.47 billion as against Rs.28.70 billion in January-March 2011. To ease the pressure on its books the company has set a target of raising Rs.60 billion to Rs.70 billion from divesting non-core assets such as hotels and IT parks by the end of financial year 2012-13.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 

Wednesday, April 24, 2013

“Rajiv Gandhi was young, but a very dynamic person...”

Former Union Minister Mohan Dharia, who resigned from Indira Gandhi’s government in protest against her policies, speaks to B&E about Rajiv Gandhi

B&E: You were once a close confidante of Mrs. Indira Gandhi. You knew Rajiv well too. How do you judge him as a Prime Minister?
Mohan Dharia (MD):
Rajiv Gandhi became the PM at a time when the when the country was passing through a gloomy period. People had sympathy for Rajiv who became the Prime Minister at a young age. His knowledge was limited. He was not aware of the problems of the people at the grassroots level. However he was a very dynamic person.

B&E: So would you say that Rajiv was a visionary leader who had imagined a modern India? Or is that description an overrating?
MD:
He seriously wanted to modernise India. When US denied to give India the technology of supercomputing, it was he who encouraged the creation of the indigenous Param Supercomputer. That not only proved his vision but also his honest intent.

B&E: If you were to compare Rajiv with his mother Indira and grandfather Pandit Jawaharlal Nehru, what would you say?
MD:
All of them had totally different personalities. Nehru was the architect of our foreign policy even before independence. He always honoured our democracy. Indira Gandhi was a person with a strong determination and courage. She nationalised the commercial banks and also abolished the privileges of former rulers. Then, even A. B. Vajpayee had described her as Durga Mata. But somewhere down the line, she forgot the assurances given to her countrymen. On the other hand, though Rajiv was very young and ambitious, he was more humane than his mother.

B&E: Rajiv did ask you to become the Deputy Chairman of the Planning Commission. You refused. What did you tell him?
MD:
When he asked me to become the Deputy Chairman of the Planning Commission, I expressed my inability to do so, as there were basic differences in our approach. In my two hour-long meeting with Rajiv, he fairly conceded his ignorance and assured me to amend his approach on many issues like removal of illiteracy, training and skill development to increase the employability of individuals, development of vast wastelands through micro watershed management, water conservation and more. He however had an open mind and we became close friends in the Congress camp.

B&E: You had a view on Rajiv naming many schemes, buildings and institutions after his family members...
MD:
It was wrong on the part of Rajiv to name programmes or big contributions after his family members. The reason being that if tomorrow an opposition party grows to power, it would not show interest in running schemes that are named after leaders of the opposition party/parties.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 

Friday, April 19, 2013

National

Airlines in Trouble

The New Year started on a bad note for Air India whose bank accounts were once again frozen by the service tax department for non-payment of dues. This is the second time in two months that the Central Board of Excise and Customs (CBEC) has frozen the account of the national carrier. Earlier, the tax department had frozen 11 accounts of Air India and 10 accounts of Kingfisher Airlines in the month of December for defaulting on service tax payments. The service tax arrears of AI now amount to Rs.3 billion. In all, Kingfisher Airlines and Air India owe the government a total of over Rs.3.6 billion towards service tax. While AI has failed to pay its arrears for the month of December last, Kingfisher also defaulted to pay its service tax dues for December, which could lead to freezing of its bank accounts once again, besides attachment of its properties and imposition of additional penalties. The freezing of accounts is not the only issue that has the aviation industry in a state of turmoil. The aviation regulator DGCA is also reviewing airlines on the measures of safety. The regulator’s audit had suggested withdrawal of Kingfisher’s flying permit and slashing of operations of AI Express, even as it criticized other carriers like IndiGo, SpiceJet, Jet Airways, GoAir, Alliance Air and JetLite on issues like non-reporting of incidents, lack of pilots, proper and regular training, absence of qualified safety officials and non-compliance of safety audits.

100% FDI

The New Year kick-started with good news on the economic policy front. The dream of 100% FDI in single brand retail becomes a reality after the Department of Industrial Policy and Promotion notified it on January 10, 2012. According to the DIPP’s press note, “Foreign Direct Investment (FDI), up to 100%, under the government approval route, would be permitted in single brand product retail trading.” However, there are some caveats to the removal of the investment cap. In respect of proposals involving FDI beyond 51%, the mandatory sourcing of at least 30% would have to be done from the domestic small and cottage industries, which have a maximum investment in plant and machinery of $1 million. Though 51% FDI in single brand was allowed in February 2006, not much investment has come in the sector. During the past three and half years, FDI worth only Rs. 1.96 billion was received in the sector. The new policy will help global fashion brands, especially from Italy and France, and other international brands to strengthen their interest in the growing Indian market. Global chains like Gucci and Louis Vuitton can now have full ownership of their Indian operations. Many of these chains have already set up operations in India by partnering with domestic firms, but this policy will allow them to buy out the domestic partners.

Websites in legal jam

Search engine giant Google, social networking site Facebook and other online content providers are facing charges in an Indian trial court for allowing posting of obscene online content on their sites. A trial court in Delhi issued summons to 21 Internet companies for objectionable content posted on their websites. The Indian government has sanctioned the prosecution of executives from companies like Google and Facebook along with other 21 Internet companies. The companies can be charged for “promoting enmity between groups” or for carrying “deliberate malicious acts intended to outrage.” Since some of the charges are non-bailable, the government had to indicate whether it agreed with the need for the websites to stand trial. The case, which has stoked worries about freedom of speech in the world’s largest democracy, was brought by a private petitioner seeking to remove images considered offensive to Hindus, Muslims and Christians from websites.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
 

Monday, April 15, 2013

Inflation & growth: Can the twain meet?

Persistent Hikes in key policy rates have failed to slay the monster of inflation. Instead, it has inflicted collateral damage: slowdown in India’s manufacturing growth. B&E was the first to identify that India was slipping into a definite slowdown (cover story; August 4, 2011). What can policymakers do to bring down prices without hurting growth?

It is the season of bad news. News of scams and scandals, protests and labour strikes, a wobbling Sensex, soaring food prices and policy paralysis in the government have been hitting the headlines with metronomic frequency. The depressing state of affairs in the global economy and the spreading debt crisis in Europe are an added aggravation. In the past, India weathered the global financial crisis with aplomb thanks to the timely intervention from the Centre, which understood the gravity of the situation and promptly reacted by releasing three stimulus packages in quick succession amounting to Rs.1.86 trillion during 2008-09. But after a brief sunshine, the storm clouds are back on the horizon.

The worst piece of news to have hit the Indian economy in recent days is that the country’s factory output has slowed to its lowest pace in the past 30 months. According to figures released in September this year, the manufacturing PMI, or Purchasing Managers’ Index, for India, slid more than two points to 50.4. This a shade above the 50 mark, which separates contraction of manufacturing activity from expansion.The September survey finding – based on data from more than 500 manufacturing firms – was the lowest since March 2009, when the Index had slipped below 50 owing to the global slowdown.

That India was inching towards economic slowdown was first indicated by numbers thrown by the Index of Industrial Production in July. The IIP figures showed factory output growth dipping to a 21-month low at 3.3% in July 2011 as compared to 9.9% in the corresponding period a year ago. To add to the cup of misery, the Wholesale Price Index based inflation stood at 9.22% in July, much above the 5.5% mark, which the RBI thinks to be the comfort zone. Such persistently high inflation above 9% has not been witnessed anywhere else in South Asia/South East Asia or even Latin America in recent times.

Both the PMI Survey and IIP raise certain questions and fears about the future course and direction of the Indian economy. As a result, fresh doubts are being voiced about the ability of the economy to sustain its present growth momentum. HSBC chief economist for India & Asean Leif Eskesen thinks that Indian manufacturing growth is clearly slowing in response to the tighter monetary policy, uncertainty created by high inflation and weak global economic environment. Economists of different hues concur that as the effects of a dozen interest rate hikes by the RBI over the past 18 months continue to reverberate across the economy and so long as global economic conditions don’t improve, growth in India’s manufacturing sector will remain subdued in the foreseeable future.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail

IIPM Links
IIPM : The B-School with a Human Face

Monday, March 25, 2013

Perfect Technology, Flawed Destiny

The Launch of MNP has seen Significant churn by users of CDMA towards GSM. Is this indeed The Death Knell for a Technology that’s already falling out of Favour in India?

CDMA (Code Division Multiple Access) technology has been at loggerheads with the far more widespread GSM (Global System for Mobile Communications) technology since quite a long time. The irony is that basic technological common sense has always favoured CDMA, since it can handle many more calls per MHz. and has a better data transfer rate. However, GSM has been able to cover around 75% of the world’s cellular phones; partly because it is supported by a global entity, the GSM Association. On the other hand, CDMA is promoted by American firm Qualcomm and has not gone much further beyond North America.

In India, however, CDMA came with a lot of hope, albeit for a different set of reasons, as RCOM used it to disrupt the entire pricing structure in the industry. The technology brought down tariff rates to a few paise per minute from a few rupees. Players like RCOM and Tata Teleservices have offered handsets at incredibly low prices, thus connecting the common man with the telecom revolution. Lately, it has also transformed the way we surf internet on the move. CDMA has a peak download speed of 2MB/s compared to 384 kbps for GSM.

However, this great technology appears to be dying a slow death in India, due to lack of spectrum. The shift made by major CDMA players including Tata Teleservices and Reliance to the GSM platform has also cost the technology dear. RCOM and TTSL, after getting 3G spectrum, are focusing more on the GSM business, as the chances of increasing data revenue on the network are high. The third major player MTS is currently looking for M&A partners in India.

The allowance of Mobile Number Portability (MNP) has also hit CDMA technology hard. The first 10 days of port in and port out, after the implementation of MNP on January 20, 2011, suggested that a large number of subscribers are moving out of the CDMA platform and opting for GSM. Data available till January 31 suggests that more than 50,000 subscribers opted out of CDMA, wherein only 2,000 people chose to give up GSM in favour of better voice & data services. “A large number of people are porting just for the experience for now. In the long term, MNP would not make much of a difference, as the handsets and tariff rates of CDMA technology are cheaper then GSM,” says S. C. Khanna, General Secretary, AUSPI (association of CDMA players) to B&E. Hemant Joshi, Partner, Deloitte, Haskins & Sells, supports, “Since the future is in data services and CDMA banks on having good quality data services on their network, it is likely that subscribers will stabilise after the initial churn (of CDMA users post MNP), which could be due to several reasons,” said.

However, the fact is that the trend of preferring GSM is not new over the past few years. As per TRAI data, GSM subscribers for September 2010 numbered 578.49 million (84.12% market share) compared to 109.22 million (15.88% market share) for CDMA. This is in fact a morose scenario for CDMA, since it commanded a share of 26.35% in September 2007. Interestingly, out of six players in CDMA, four have around 12% market share and continue to see a fall in their subscriber base. A major chunk of market share in this space is commanded by RCOM & TTSL.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles


Wednesday, March 6, 2013

India’s Most Authoritative B-School Survey

Watch out for the B-school special issue of B&E that hits the stands on November 26, 2010. Never before has been witnessed such an innovative & credible B-school ranking process, where the respondents are the people who matter – the top honchos of corporate India



Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles


Sunday, March 3, 2013

Dried concrete jungles

The elixir of all life is fast moving to achieve rare commodity status in urban India with water tables going down due to massive rise in consumption, severe pollution of surface and ground water resources and slow pace of setting up rain water harvesting projects. It is high time a modern consumption based tariff policy and other initiatives are taken by the center to promote effective water management in urban India

Their origins can be traced to the early medieval period post the fall of the Kushan empire and the name’s first ever mention was in the Mahabharata. They were immortalized in Indian history post their 1669 uprising against the Mughals. In 21st century India, their claim to fame on one hand is bolstered by the maximum no. of crorepatis they have produced in a single state in India and the infamous back to the medieval ages “khap panchayats” legitimizing the insanity called honour killing. But for all the fame, the thing for which the Jats of India least get reported is their united stand on issues that concern every citizen. Yet another display of their strength and clout was on display when in the Tonk and Ajmer districts of Rajasthan, large gatherings of Jat farmers staged a two day protest against beginning a massive boring operation to extract the remaining water in the cachement areas of Banas river. The reason? Bisalpur dam, the chief water resource for the cities of Jaipur and Ajmer, has all but dried up with one of the worst ever monsoon delays in decades in the state’s history. The Jats oppose the move on account ofthe cachement area being the only resource for drinking and irrigation. Are these the first signs of the water wars’ prophecy? With urban India sliding into an unprecedented perennial water crisis, it might just come true.

The annual per capita availability of renewable freshwater in India has fallen from 5,277 cubic meters in 1955 to 1730 cubic meters presently. Given the projected increase in population by the year 2025, the per capita availability is likely to drop to below 1,000 cubic meters i.e., to levels of water scarcity. According to a study done in 2008 in 7 of the 15 most populated cities of India including Delhi, Kolkata and Mumbai, average domestic water consumption was 92 litres per capita per day (lcpd), while those in Amsterdam (156 lcpd), Singapore (162 lcpd), Hong Kong (203 lcpd), Sydney (254 lcpd) and Tokyo (268 lcpd) are much higher. With mass immigration making our cities akin to clogged potholes and rampant unplanned industrialization causing billions of tonnes of toxic waste being dumped in our surface and ground water resources, supplying fresh water to residents is a Herculean task. As per the study (see table), on an average, some of the most populated metros receive water once or twice in a whole day for a few hours with the frequency falling to once in 2 days cases in select regions.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Tuesday, February 5, 2013

CITIBANK: VIKRAM PANDIT

More so when it wears the Citi crown! Is Vikram Pandit drowning in a vicious cycle? by Deepak Ranjan Patra

Pandit has made some progress to help Citi avoid slipping into oblivion last year by slashing a great chunk of its non-core assets and businesses. Moreover, Pandit has also managed to cut Citi’s payroll bills by almost 20% to $25 billion, by downsizing employee strength from a high of 375,000 to 265,000 globally. But then, it’s a competitive and comparative world. So when Vikram Pandit says, “We have made enormous progress in 2009... We greatly improved Citi’s capital strength, reduced the size and scope of the company, and refocused our business strategy to take advantage of our unmatched global network,” in a press statement, it raises a lot of eyebrows. From a loss of over $27 billion in FY2008 to just $1.6 billion is surely an enormous progress for Pandit, but it’s prone to questioning from the rational observer for two basic reasons. First, Citi’s peers are at a healthy profit; and second, Pandit’s excuse for the loss, $6.2 billion in debt repayment, is just a small part of $50 billion that the bank has taken from the government. Investors are concerned that the bank, wishing to return to the top of the tables, is still a clear laggard.

With the heat rising against him, Pandit has now decided to play new cards; by reshuffling the top honchos. Some of the moves are clearly well thought of. The most critical of the list is the replacement of Terri Dial, Chief Executive of Consumer Banking for the Americas by Manuel Medina-Mora, head of Citigroup’s Latin American businesses. The move, as believed at the Citi headquarter, is expected to bring in an overhaul in the retail banking business. But Pandit hired Dial amidst similar sentiments among his first major hires after joining Citi. Also, Medina-Mora has absolutely no banking experience in the hyper competitive North American retail market. Is this just a plain shot in the dark?

However, Pandit has received a little cushion from rating agencies like S&P, who left Citi’s ratings unchanged despite the weak Q4 results. The agency finds Citi’s financial performance stabilising. Scott Sprinzen, Primary Credit Analyst, S&P tells B&E, “Citi has completed a number of major actions during the past 18 months to offset the impact of net losses on its equity base, increase its total capital, and bolster the quality of its capital.” Also net additions to the loan-loss reserve ($802 million) were the lowest in several quarters and total allowance for loan losses stands at a satisfactory level of 5.9% of total loans. Adds Tanya Azarchs, Secondary Credit Analyst, S&P, “Cost-cutting efforts continue to yield results.” (Citi refused to comment).


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Sunday, February 3, 2013

Wrong said Fred!

$99 billion purchase of ABN Amro – suicidal!

To every proverb, there is an anti-proverb; and in capitalism too! Here’s what Fred Goodwin (CEO, RBS) said about the October 2008 purchase of ABN Amro, “We are happy we bought what we thought,” and this was the anti-statement from Philip Hampton, Chairman, RBS, “The ABN Amro acquisition can’t be undone… it was the wrong price, the wrong way to pay, at the wrong time and the wrong deal!” The two contradictory statements in a way, say it all. The consortium (RBS, Fortis and Santader) with synergy expectations of €2.28 billion annually, ended up overvaluing the financial entity and paid 3x of book value, a blood-freezing $99 billion; and this came at a time when other banks were trading at book value! ABN Amro had sold its LaSalle Unit to BofA, therefore it made no sense for the consortium to pay such a hefty sum for the under performing bank with emaciated Asian operations. It all came down to one reason – ego; of not allowing Barclays to win. Wrong price, wrong value, wrong time & well... a completely wrong deal.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

Friday, January 25, 2013

Is he the ‘suitable boy’?

It would not be surprising if Vivek Paul is actually being considered for the role, but his experience may not fit the bill. Right Mr. Tata?

His name springs up whenever there is a crisis of leadership in any big ticket company, especially in the IT sector. After all, Vivek Paul was known as the poster boy of the Indian IT industry, the way he took Wipro’s international business to towering heights as CEO before he stepped down in 2005. An MBA from the University of Massachusetts, Paul brought the first wave of investment into India through GE medical equipment and a change in the global business mindset towards the country. Paul began his career with Main & Company, and later on he joined PepsiCo. He spent around 10 years in GE after 1990, and was elevated to the post of CEO of GE’s medical equipment joint venture. In 1999, this GE veteran was handpicked by Azim Premji to run Wipro’s software unit in India. He was later on elevated to the post of Vice Chairman of Wipro and CEO of its global IT, product engineering and business process service segments. He has been credited for Wipro’s growth from $150 million (when he joined in 1999) to a $1.4 billion company with 50,000 employees in 2005. A month after resigning, he become a partner at Texas Pacific Group (TPG) capital and put in his papers in December, 2008.

It is in the news that he will replace Ramadorai. In fact, his name was also being taken for the post of Satyam CEO before it went to A. S. Murthy. Compared to Ramadorai and Chandrasekharan, “Paul is more competent, but less likely to take the job actually,” avers Rob Enderle, Principal Analyst, Enderle Group. But perhaps the Tatas may go for a strong and experienced veteran who has been into the same business for a long time.


Source : IIPM Editorial, 2012.
An Initiative of IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.