The auto bloodbath

Going by how matters have been in the past year, there is little hope that India’s auto industry will grow beyond the single-digit mark in FY2013-14, even if macroeconomic indicators and economic sentiments improve substantially. By sutanu guru
This kind of brutal bloodbath was not witnessed even after the global financial meltdown of 2008 when it appeared as if Apocalypse and Armageddon had jointly invaded the global economy. From about 1.6 million domestic sales in 2007-08, passenger car sales fell marginally to about 1.55 million units in 2008-09. Not just that, the auto industry registered a spectacular turnaround almost immediately and kept growing at a very healthy pace. By 2011-12, passenger car sales had reached close to 2.68 million units.

Something similar happened with sales of commercial vehicles that reflect even better the state of health of an economy. From about 490,000 units in 2007-08, sales crashed to about 384,000 units in 2008-09 in the aftermath of the global financial meltdown. But as with passenger cars, the recovery was swift and sure. By 2009-10, sales of commercial vehicles had recovered smartly to 532,000 units and crossed 800,000 units by 2011-12. The magic one million mark was looking very much within reach. And everybody was going ga ga over the brilliant prospects of the Indian auto industry. Some over optimistic souls even started predicting that the auto industry growth rates in India will keep outpacing that of China and that India could well emerge as one of the five largest auto markets in the world by 2020.

In 2010, the consultancy firm Ernst & Young conducted a study on behalf of Automotive Component Manufacturers Association of India. The E&Y study predicted that the Indian automobile market would clock the fastest growth rates between 2010 and 2020. Average annual growth rate for the Indian market between 2010 and 2020 was pegged at 14%. The average annual growth rate for the Chinese market was pegged at 8%; the forecast was 6% for other emerging markets and just about 4% for developed markets belonging to G-7 countries.

According to the survey, domestic sales of cars and SUVs would jump to 5 million by 2015 and further double to 10 million by 2020.


Is it any surprise then that every automobile company in India and its third cousin has been making a beeline for the Indian market? Is it any surprise that states like Haryana, Maharashtra, Tamil Nadu and Gujarat are fighting pitched battles to attract automobile companies to their states. Is it any surprise that the quick decision of Narendra Modi to encourage Ratan Tata to relocate his Nano manufacturing plant to Gujarat in the aftermath of Singur added spice and polish to his already glowing halo? And why not since the numbers being bandied about have been so jaw droppingly awesome. The same E&Y study predicted that the size of the Indian auto industry will balloon from $25 billion to $110 billion by 2020; the value of exports will rise from $3.5 billion to $30 billion and the size of the auto components industry too will balloon from $26 billion to more than $110 billion by 2020.

So what happened? Far from maintaining the much touted growth momentum, auto sales have actually crashed in recent months. The decline in sales has been so widespread and so precipitous that 2012-13 is guaranteed to register an actual decline in numbers as compared to the previous year. And hardly anybody seems to have been spared from the onslaught. Hyundai has seen sales falling more than 16% y-o-y in March 2013. Tata Motors has had to suffer the trauma of a more than 60% fall in sales in the same month. The only company that seems to have come up smelling of flowers in the aftermath of his bloodbath is Mahindra & Mahindra, whose gamble on the rising popularity of multi-utility vehicles seems to be paying off.

The two wheeler market too, is going through a series of potholes. The market leader Hero Motocorp has reported an 11% y-o-y decline in sales in March 2013. The erstwhile partner of Hero, Honda seems to be the only major two wheeler company whose fortunes continue to improve in this gloomy scenario. But across the board, the breathless optimism about the prospects of the Indian auto industry seem to have evaporated.

Virtually no one is willing to bet on anything more than single-digit growth rates for the industry even if macroeconomic conditions and economic sentiments improve substantially in 2013-14. In effect, we could be looking at car and SUV sales of about 2.5 million units in the year 2013-14. So if the E&Y forecast about domestic sales of 5 million units by 2015 has to come true, Indian consumers will need to double their car and SUV purchases in just one year. Even the most optimistic of Indians does not expect GDP growth rate to improve substantially beyond the 5% or so it has managed to eke out in the year just gone by. Equally important, despite the Reserve Bank of India finally taking some steps, nobody expects a dramatic fall in interest rates. But the most important factor is what we call investor as well as consumer sentiment. With General Elections round the corner, the citizen or the analyst is not expecting any drastic step or any bold decision that could boost sentiments in the economy. In fact, with each passing week, the intensity of bad news keeps increasing. The current account deficit is already at an astonishing 6.7% of GDP, the highest ever in the history of independent India. Latest figures reveal that manufacturing output, including that in the so called core sector has actually declined. Newly released data also shows that cutting fares has not improved passenger traffic for airlines. Consumer inflation also remains stubbornly high, refusing to come down below double-digit levels. In the event, it is but natural for consumers to postpone their car purchases till the situation improves. Says Kumar Kandaswami, Senior Director at Deloitte India to B&E, “The only macroeconomic reason for the slowdown is that people buy cars only when there is some growth in disposable income. And there hasn’t been much in recent months. Other factors like interest rates and fuel prices have also played their part.”

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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Words, places and other friends...

You are one of those people to have followed their hearts. When did you realise that writing was your true love?
The discovery that I could write a novel was an accident. I had been reading a lot of novels when I was unemployed. As soon as I secured a job for myself, I was assigned a project. Not much work was coming in, so I began writing a novel. I had just read Great Expectations by Charles Dickens then and was very impressed with his writing. I realised that one could write a novel in an autobiographical narrative style. I enjoyed the entire writing process. It involves lot of reading. I have always enjoyed reading books. Reading is my real and true passion. Reading stimulates my imagination and writing exercises my imagination. This is ecstasy!

Was there ever any fear of your book not being appreciated?
I have never had any fears when it comes to becoming a writer. Of course I am very much concerned as to how my books would fare in the market and how readers would react to my writings. The outcome and results of one's efforts are the surprises of life. It’s my earnest desire to produce a work of genius. This quest to author a masterwork propels me to plunge into novel writing.

Do you think it was easier to venture out into writing because of your location? Would this have been possible had you been living in India?
I wrote my first novel in Delhi. I wrote my second novel during a rainy Thanksgiving weekend in Seattle. So the location does not matter. The most important factor is my ‘state of mind’ at that time. I am eternally grateful to the Indian system. In India, English Literature has a special place. This gives a window into Western civilisation. And the US has such a great County Library System. I took advantage of the Library Culture to write my second novel.

Your first book, An Adolescent Mind, is a semi autobiographical novel. How did the idea of the subject come to you?
I had the story idea of my first novel for a long time in my head. It is a slice of life story. It is written on the basis of experience. I wrote the novel by fusing real life experiences like first love, peer-pressure, political events, Indian society, the media and the imaginative. Also, I must admit that I have this tendency to mythologise myself. An auto-biographical novel gives me such a platform.

While writing, is there a method that you follow?
I do not have any method to writing. In many ways writing a novel is a mystery. Something inexplicable happens. And thoughts flow in the form of words. And my fingers tap on my computer keyboard. I believe divine inspiration comes into play. I am just a medium. A novel is a miracle.

It is very tough to play with fiction... what’s the inspiration behind your second book True Colors of Love?
I read Notes from the Underground by Fyodor Dostoevsky. It is a brilliant short novel. I began toying with the idea of writing a book which had an off-beat narrative. True Colors of Love is an experiment in that sense. The narrative is in the second person. It is also based on certain real life experiences. I have depicted first love; the pathos and the urges of a young man and his fascination for a nymphet.

How do you tackle creative blocks?
Writing a second novel is a tougher call. All of us have a story to tell. There is one novel in all of us. Writing True Colors of Love was challenging. And I am glad that I accepted it. After I wrote the first chapter, I could not go forward. Oftentimes beginning a novel is easy. The middle game and the end-game present greater challenges. I was able to overcome the challenges by extensive reading and plunging into a dream world. Will power also played an important factor. There are times when the ink of the pen goes dry. At that time I feel exhausted. It is tiresome. There is no peace. Then later, when I stick to the task, it all comes up well. And the novel is complete! Perseverance is the key.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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

What's Left ?

The Communists are becoming increasingly irrelevant in Indian politics. That's a tragedy, write Snehangshu Adhikari and Rajasekhara Panicker

Look back at the exhilarating yet chaotic scenes after Lok Sabha elections in 1996. The Congress had been handed a resounding defeat and a coalition headed by Atal Bihari Vajpayee of the BJP lasted a mere 13 days. As non Congress and non BJP parties and leaders huddled together to form a government and nominate a prime minister, the name of the late Jyoti Basu kept cropping up frequently. After much debate, the party bosses at CPI (M) vetoed the idea of Jyoti Basu as a prime minister. Many party leaders , in hindsight, call it a historic blunder. That was perhaps the first and last time a Marxist came close to becoming the prime minister of India.

Now remember the tumultuous scenes after the Left withdrew support to the first UPA government in 2008 over the Indo-US nuclear deal. Prior to the 2009 Lok Sabha elections, the media was full of CPM party leaders Prakash Karat and Sitaram Yecchury. They were supposed to be kingpins and kingmakers in the aftermath of the elections. Nobody talked about Narendra Modi as a prime ministerial candidate. Mayawati and Mulayam Singh Yadav were supposed to be serious contenders. Why, this magazine even had Sitaram Yecchury on the cover as a possible prime minister of the country.

Look at the political scenario in the country today as we approach yet another Lok Sabha election. Love him or hate him, you can't stop talking about Narendra Modi as a potential candidate for prime minister. Mayawati and Mulayam Singh Yadav still nurture their ambitions. But who is talking about Prakash Karat and Sitaram Yecchury? It appears as if the mainstream media has completely written off the Left Front as players of any consequence in Indian politics. In fact, it is battling hard to retain its last bastion in Tripura, where campaigning for Assembly elections is on in full swing.

Says Amrito Maiti of the Revolutionary Socialist Party: "Yes the craziness towards our movement has decreased a lot, but it doesn't mean that people have totally banned Left ideology. It's really a posititive sign that just within two years of Mamata's, tenure we have already started getting responses from the mass."

The fall from the heady days of 1996 when Jyoti Basu was a serious contender for the top job has been quite precipitous. Most analysts are being compelled to ask: What's Left? If you go by how mainstream media deals with parties and issues, it is clear that the Left in India seems to be in terminal decline. The real shock for the Left came during the 2009 Lok Sabha elections. The CPM lost 27 seats and the CPI lost 6 seats. From controlling close to 60 Lok Sabha members, the Left was virtually reduced to a rump with control over barely 30 members. Then came even more electoral shocks. In Kerala, the Left lost narrowly to a coalition led by the Congress. Worse, the unchallenged 34 year old reign of the Left Front came to a humiliating end in West Bengal where it was decimated by Mamata Bannerjee. Now, Tripura is the last state in which the Left Front runs a government. This is indeed a far cry from the heady days after independence when the Left won the first democratically contested elections in the world in the 1950s. The Left has also steadily lost ground in its other bastion – the trade unions. There was a time when Left oriented trade unions were in complete command in the industrial heartland of Maharashtra. It is the Shiv Sena that has taken over there. Even at the national level, the Bhartiya Mazdoor Sangh, which claims affiliation to the BJP, now claims to command more members and cadres than the Leftist trade unions.

What went wrong with the promise shown by the Left? After all, in a poor country like India, the Left, with its commitment to the poor and the working class should have held a natural advantage. It should have been a natural alternative to the Congress party since most Indian voters seemed to show hardly any liking for right wing Hindu parties like the Jan Sangh. In fact, the CPI was a far more 'national' party than the Jan Sangh. It had influence and electoral clout in states ranging from Bengal to Andhra Pradesh to Bihar to Punjab to Maharashtra to Kerala to Odisha to Tamil Nadu. It was the first non Congress political party to form a state government in Kerala. In fact, when the then Prime Minister Indira Gandhi adopted extreme Left economic policies like nationalisation, it looked as if the ultimate triumph of the Left in India was but a matter of time.

But those dreams and hopes look like a chimera in contemporary India. It would be a surprise for everybody if the Left manages to significantly improve its tally in the forthcoming Lok Sabha elections. The obvious thing to ask is what exactly happened with the Left parties and the Left movement in the country.    Both in terms of ideological influence and electoral success. The first thing to note is that the collapse of the Soviet Union led to a universal crisis of credibility for the Left throughout the world. As long as the Soviet Union stayed intact and appeared to be a formidable adversary to the United States, the Left always had a kind of romantic appeal. But the collapse of the Soviet Union revealed fundamental fault lines in the world of communism and Marxism, fault lines that could not be papered over by slogans and propaganda. Of course, as the accompanying article by colleague Saurabh Shahi shows, the Left still displays resilience and still attracts support across the world. But there can be no doubt that it is no longer considered to be a serious alternative to capitalism and capitalist democracy.

In India, the decline of the Left had started much before the collapse of the Soviet Union. One of the key reasons was a kind of suicidal fragmentation of the Left parties and movement across India. Till the 1960s, the CPI was a monolith that dominated the Left movement and discourse in India, including electoral politics. But in the aftermath of India's humiliation by the Chinese military in 1962, the cleavages in communist India were very clear. Eventually, the CPI split and resulted in the formation of two parties – the Communist Party of India (CPI) and the Communist Party of India (Marxist), better known nowadays as the CPM. Since the 1970s, it is the CPM that has been the dominant communist party in the country with the CPI playing second fiddle. This was not the only split. More ideologically aggressive factions formed their own versions of Marxist-Leninist parties and the Left no longer presented a united front. A large number of Marxists turned armed revolutionaries and launched the Naxalite movement. Naxalite movements and outfits have flourished in states like Andhra Pradesh, Odisha, Madhya Pradesh, Maharashtra, Bihar, West Bengal, Jharkhand and Odisha. In fact, in many parts of central and eastern India, these armed Leftists virtually run parallel governments of their own. Ironically, even as the mainstream Left has lost ideological influence and electoral clout, it is the Naxalites that have proven to be more potent, more resilient and more durable. But then, even those romantically inclined towards the Left know that the Naxalite movement will not succeed in its aim of liberating the masses and overthrowing the Indian State.

The other big body blow to the fortunes of the Left was delivered about three decades ago when a series of events and policies led to the rise of communal politics in India. The year 1986 can be termed as the defining one in this process. In that year, the government headed by the late Rajiv Gandhi overturned a Supreme Court verdict that made it mandatory for Muslim men to pay maintenance to divorced wives. This is the now infamous Shah Bano case. This decision was seen as a meek and abject surrender to radical Muslim bodies and was taken despite strong objections from liberal Muslims. The same year, the government allowed hard line Hindu outfits to lay claim to the Babri Masjid as the birthplace of Lord Ram. This decision too was seen as a kind of surrender to hard line Hindu radicals and was taken despite strong objections from liberal Hindus. These two decisions sparked off a series of events that eventually led to the demolition of the Babri Masjid in 1992 and the subsequent emergence of the BJP as a serious contender for power. In 1984, the BJP had managed to win barely 4 seats in the Lok Sabha. By 1996, the tally had gone well beyond 100 and the party actually formed a short lived 13 day government at the centre. The Left was no longer a natural alternative to a moth eaten Congress. The BJP had taken over that role even as it expanded its presence across India. The growing gap between the Left and the BJP was visible in the 2009 Lok Sabha elections when both were decisively rejected by the voters. The vote share of the BJP was close to 19 per cent while that of the CPM was a little above 5 per cent. More important, while the Left struggles to preserve its last bastion in Tripura, the BJP rules in states like Chattisgarh, Madhya Pradesh, Karnataka, Gujarat and Punjab. Yet another irony is: firebrand socialists of yore with disrinctively left leanings, like George Fernandes, became part of a coalition led by the BJP. This was something that even the marxists couldnt have imagined back in their heydays in the 1970s.

Says Khsiti Goswami, RSP: "But the ground reality is not exactly the same so far. Rather, be it Left or others like Congress or BJP, nobody has that much capacity at least to have some control over such coalition tenure. For the time being, it's either Congress or BJP being considered as major party of the nation. But at state level the equation has always been different."

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

BBA Institute

A Socialist's Baptism By Fire

Francois Hollande's adventure in Mali has signalled that the French policy of "Francafrique” is all but over, says Saurabh Kumar Shahi

It feels like only yesterday when Socialist Party candidate for the French presidency, Francois Hollande, while trying desperately to outsmart incumbent Nicolas Sarkozy, was promising a complete overhaul of French foreign policy, including clamping down on military adventurism in Africa, which France has historically seen as its playground. To give him his due, he did expedite troops pullout from Afghanistan. More importantly, just weeks ago, Hollande refused permission to intervene militarily in its former colony, Central African Republic, where President Francois Bozize was forced to accept a power-sharing deal with insurgents who looked set to take over the state. However, something changed this winter.

Mali, another former French colony, has been in the line of fire for quite some time now, mostly because of some inadvertent indirect actions of France itself. France under Sarkozy had enthusiastically supported Islamists against Gaddafi. These Islamists then ethnically cleansed the Tuaregs, a sort of Berber people, who were part of the rainbow Libyan armed forces. The Tuaregs were then driven back to their traditional homelands in Northern Mali. Armed with the leftover Libyan army weapons, these Tuaregs assembled in northern Mali to claim their own state. As the Mali government dithered, the Algerian Islamists saw an opportunity to shift their base away from Algeria where they were being hunted by the Algerian forces. They moved to northern Mali to apparently support the Tuareg revolt, but then  took over themselves. France was quiet until last week when the Islamist forces advanced into positions in central Mali and captured Konna, that left the capital Bamako, still 600 km away, vulnerable, if  the French are to be believed.

With the Mali government still dithering, Hollande ordered the first military strike of his career. As this story goes to print, France has deployed 550 troops; C-160 transport aircraft and attack helicopters and has carried out several sorties of Rafale jets bombarding the rebel bases and frontline, managing to slow the speed to their advance. However, the retaliation was more severe than the French commanders had thought and France lost one attack helicopter and some men in the initial fight. Three other helicopters were damaged and rendered out of action. Sources suggest that the French decision of strategic bombing and other air attacks without decent ground support will prove to be disastrous.

In days to come, Hollande is going to face problems on several fronts. First, the almost complete and across the board support inside France will change if the victory is not swift. According to sources, the victory will not only be late to come but might not come at all. The quality and training of French Special Forces was exposed just weeks ago when a French mission to rescue a French hostage, an agent of the French secret service DGSE, from Somali Islamists was botched up, leading to the death of another personnel and capture of another without recovering the first. It was later revealed that the French special forces involved in the botched mission were spotted the moment they landed in Somalia, a couple of kilometers from where the hostage was being held, leading to a tip-off that helped the rebels quickly arrange men and machines. It just added another embarrassing legend to the reputation of an Army that has historically shown great enthusiasm for surrenders without a fight.

Second, Hollande's policies have increasingly started matching those of Centre and Centre Right parties. His last eight months have been disastrous with ratings comparable to what Sarkozy had. The more he turns right, the more he loses his traditional votes. Says John Rees, an independent political analyst based in Paris, “There is very little difference between Sarkozy's response over Libya and Hollande’s response over the Mali crisis. That is sad because Hollande promised so much. Its his inability to deliver on the domestic front, his inpability to live up to the high hopes that many in France hoped that he would deal with austerity, which has driven him into an incredibly reckless foreign policy in the hope that it would bolster his poll ratings. These gambles sometimes work but in recent history in Europe they have often turned out to be incorrect.”

In fact, the admission of mistake has already started coming with an unnamed Elysee Palace official  being quoted to have said, “What has really struck us is how up-to-date their equipment is, and the way they've been trained to use it. At the start, we thought they would be just a load of guys with guns driving about in their pick-ups, but the reality is that they are well-trained, well-equipped, and well-armed.”

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

IIPM Global Exposure
IIPM Best B School India
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Cashing on the cash

Direct cash transfer schemes are still quite perforated

After series of debates and arguments, over the decades, the incumbent government has finally realised the flaws of direct subsidy and thus announced their intentions of implementing direct cash transfers to the people. There is not even an iota of doubt that the subsidies were always vague in nature and rarely reach the actual beneficiaries, these are meant for. Most of the time, the subsidies meant for the bottom of the pyramid trickle up and reach to those who are at the top of the pyramid. There are innumerable examples of government employees and rich villagers carrying BPL cards and thus availing the benefits meant for the poor and needy popula. This is a major reason for the money collected as annual taxes from common Indians got redirected to the coffers of the rich and not for who it was collected from and the real poor. Eventually, the band of bottom of pyramid kept on widening and never saw any breakthrough. In spite of several economic measures, the gap between rich and poor never got bridged. Be it fertilizer subsidy, gas subsidy or oil subsidy, most of these services were majorly availed by those who had enough and by those who belonged to the upper category of haves and not by those who struggled as have-nots and are lingering in poverty!

After six decades of policy making, the policy makers adopted the globally practised direct cash transfer scheme. No doubt, this very scheme is million times better than the currently practised subsidy scheme. At least, the money paid by tax payers would reach the families. If one goes by global examples, cash transfers have helped many nations reach their target audience directly. For instance, a huge paradigm shift was brought in Sierra Leone through cash transfers to farmers with an intention of aiding them to purchase agricultural tools and inputs.

However, there are lot of misses between the cups and lips when it comes to implementation of the said policy. Firstly, there are still hundreds of villages where banking facility is not inclusive. As per the latest Census, merely 60 per cent of all households have access to banking services and the formal banking system. Still, more than 60 per cent of the rural population does not have bank account and only 25 per cent of rural dwellers uses banks for availing credit facility. In such a bleak scenario, direct cash transfers through bank transfers would fall flat. Thus the first and foremost challenge to the policy makers is to bring these villagers under the ambit of conventional banking system ensuring that every single individual has bank account. Moreover, there still exists a huge task of opening a bank account for all these villagers and even before that providing them with relevant documents (read: identity and address proofs) to do the same. Further, every village, through numerous channels, have to be educated about the benefits of banking system and thus have to be roped into the concept of ‘financial inclusion.’

The next issue with direct cash transfer is in the access to cash itself. Most of the households in villages are male dominated. In simple words, the financial decisions are sole proprietary of the males in the family. This would not only become victim of gender discrimination but also may dilute the very objective of cash transfer. It has been widely seen that if cash handling by men is quite skewed as compared to women. Even in NREGA schemes, the cash disbursed to workers are used more for household by women and more for alcohol and tobacco by men. In a classic case of Malawi (published in a paper titled, ‘Cash Transfers in the Context of Pro-Poor Growth’), it was found that “the value of cash transfers was undermined by the exceptional increase in maize prices during the 2001-2002 season: in May 2001, the monthly cash transfer purchased 70 kg of maize, but only 16 kg by February 2002. As a general lesson, cash transfers are likely to be inadequate in the absence of measures to address wider economic instability.” Going by various precedence, there is a huge probability of the money being used for anti-social and non-essential purposes. This may lead to alcohol abuses and other form of misuse and thus leading to incidences of domestic violence too.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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

PAUL BRACKEN: PROFESSOR OF MANAGEMENT AND POLITICAL SCIENCE, YALE UNIVERSITY

China, too, is shifting its nuclear forces to mobile missiles and submarines. These weapons can be put on alert in a way that would be highly visible to US satellites and the global media. Thus, the Chinese can easily “nuclearise” a crisis with US or anyone else. They do not have to detonate a nuclear weapon, but only alert adversaries to the dramatic increase in the political stakes and dangers of a showdown.

Russia, not wanting to be left out of the act, has recently staged the largest nuclear exercises in decades to remind everyone that it remains a serious nuclear player, too. These individual developments are troubling. But they cannot be understood in isolation from the larger multipolar system of major powers that is forming. To a great extent, this is a nuclear multipolar system: possessing nuclear weapons contributes to a country’s global status as a major power.

To see this, consider the following question: When was the last time that the US or anyone else seriously proposed that India sign the Nuclear Non-Proliferation Treaty (NPT) – that is, that India give up the Bomb. Given America’s economic problems and looming defense cuts, as well as growing Chinese power, there is no longer even a remote possibility that this demand will be made. India has become an accepted, legitimate member of the nuclear club, the fiction of the NPT notwithstanding. It is even less likely that China or Russia would disarm for the sake of a nuclear-free world.

But the most urgent problem stems from the breakdown of major countries’ one-time nuclear monopoly and the empowerment of smaller countries like North Korea, Pakistan, Israel, and, quite possibly, Iran. A new set of rules for diplomacy, military strategy, and arms control is needed to stabilize this emerging nuclear order. Pretending that it does not exist is not a strategy.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

 

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

Who let the street down?

As Yet another turbulent year draws to a close, it’s time to see who quashed investors’ hopes on the street. Though the second half of the year saw share prices of a number of top companies coming back on track, some stocks still remained painfully low. B&E finds out the top value destroyers for the year among the BSE 100 constituents

Slow demand hits all

IT giant Infosys topped the chart biggest wealth destroyers (in %). Affected by a slowdown in revenue from Western clients remained the biggest problem for the company. Between Jan 2, 2012 and December 15, 2012, it lost 15.91% of its m-cap. ONGC stood second with 15.66% reduction in its m-cap due to slow oil and natural gas discovery in the new fields and poor yield from existing assets. Two companies from Adani group made it to this not-to-be-proud list. Adani Enterprises suffered due to increasing international prices and a forced 7% promotor’s stake sale to meet compulsory share holding norms, while Adani Power faced issues due to low margins. GMR infrastructure suffered various bottlenecks including sectoral and its own internal issues.

Western disturbances hit Infy

In absolute terms, Infosys and ONGC lost market capitalization to the tune of Rs.178.94 billion and Rs.106.60 billion respectively between Jan 2, 2012 and December 15, 2012. Among others Bharti Airtel saw its m-cap coming down by Rs.39.42 billion due to lower user base and less than expected average revenue per user. However, it is expected that the capex made by the company may soon bring a change in its fortune in the next financial year and a good recovery is on cards for the telecom giant. Rising non-performing assets troubled Punjab National Bank to a great extent during the year. During the given period, the bank’s market capitalisation fell by Rs.3.38 billion.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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