How to serve the unbanked!

We need new banking systems that work for the poor

The last time that licences were given out for setting up private banks in India was way back in 2004. The Reserve Bank of India, vide its guidelines on February 22, 2013, has once again got the ball rolling on the issue of allowing entry of private banks into the Rs.73 trillion banking sector. It is hoped that more banks in the country would lead to the government achieving its target of providing access to financial services for the entire bankable population. With 720 million potential users still remaining outside the banking framework, there is a huge gap that the banking industry could help to bridge.

But deepening of financial inclusion requires providing access to services and credit to a large number of highly dispersed and often remotely located individuals and agents. This raises transaction costs significantly, which if passed on to clients in the form of higher interest rates would price banks operating in rural areas out of the market. The billion rupee question is: Will the new bank entrants be willing to run the gauntlet and serve the objectives of financial inclusion even at the cost of taking a hit to their bottom line?

As private banks cannot justify on commercial grounds the business model that allows them to deal with the triple whammy of low savings balances, small transaction sizes and a large number of customers, they will typically pull back their physical presence in rural areas to discourage the custom of poor. But to ensure that the objective of financial inclusion is met, it is essential that poor people are ensured of low-cost ways of transacting. The ability to undertake remote transactions is therefore a key element of financial accessibility.

To achieve universal banking access, new banking systems are needed that work for the poor and yet are commercially sustainable. Will the new licensees be able to meet these requirements?

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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

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

Africa's low-key Drone war

Last week the New York Times reported that the US is planning to establish a new base for its drones in north-west Africa. While the base is to be used initially to fly unarmed surveillance drones, according to the article the US does not rule out the possibility of using the base to launch strikes in the future. One day after the NYT piece, Reuters reported that a base would be established in Niger. According to “a senior government source” says Reuters, “the U.S. ambassador to Niger, Bisa Williams, made the request at a meeting on Monday with President Mahamadou Issoufou, who immediately accepted it.”

Mali will no-doubt be one of the initial targets of the US drones, bordering as it does on Niger. The deployment of French surveillance drones in Mali was reported last October and there has been speculation that British drones could be deployed as part of its military support to French forces in Mali. However, British Defence Minister, Philip Hammond, said recently that he had decided against sending drones as they are needed in Afghanistan.

While drones have mainly been used in South Asia, unmanned drones have flown in African skies for many years.

According to David Axe’s must read article, America’s Secret drone War in Africa, the first known US attack in Africa involving a drone took place on January 7, 2007 when a US Predator drone tracked a convoy near the southern Somali town of Ras Kamboni and guided in an attack by a US gunship. Since that first attack, US drones have operated more or less continuously over African soil.

Despite President George Bush telling reporters in 2008 “I want to dispel the notion that all of a sudden America is, you know, bringing all kinds of military to Africa. It’s just simply not true,” many US bases have been established including bases for unmanned drones. The most well-known of them is in Djibouti, but bases exist in Ethiopia and the Seychelles.


Asked about the presence of US drones at press event in the Seychelles in 2009 US diplomat Craig White said: “The government of Seychelles invited us here to fight against piracy, and that is its mission…. however, these aircraft have a great deal of capabilities and could be used for other missions.”

In addition to theses bases, informed analysts say that a base in Congo is being expanded and could be used to for drone raids. Other US military bases have also been established in Burkina Faso, Mauritania, Uganda and there are plans to open a base in south Sudan to carry out intelligence gathering and surveillance flights using other aircraft.

Somalia continues to be one of the main focuses of US drone operations in Africa (see Bureau of Investigative Journalism – US Covert War in Somalia). Although most of the US military activity in Somalia is covert, occasionally their officials confirm the use of armed drones. According to Chris Woods of The Bureau of Investigative Journalism (TBIJ), there have been around 23 US airstrikes in Somalia since 2007, many of which have involved US drones.

In July 2012, UN officials released a report complaining that the presence of unmanned drones in Somalia posed a danger to air-traffic and risked violating the long-standing arms embargo on the country. The report detailed three specific events – a drone crash into a refu­gee camp, the flight of a drone dangerously close to a fuel dump and the near collision of a drone with a large passenger plane over Mogadishu – calling them near disasters.

Last year, a British citizen was killed in a US drone strike in Somalia. Bilal el-Berjawi was travelling in a car just outside Mogadishu when a drone launched three missiles, killing him and others travelling in the car. According to the Guardian, el-Berjawi may have given his location away when he talked on the phone to his wife who had just given birth a few hours before. It should perhaps be noted that the UK does not count el-Berjawi as a British citizen as it unilaterally stripped him of citizenship in 2011.

In June 2012, a “mystery air-strike” on a convoy of trucks was reported in Northern Mali. The original report from the Magharebia website (which it should be noted is sponsored by United States Africa Command) stated that seven “terrorists” of a brigade linked to al-Qaeda in the Islamic Maghreb (AQIM) were killed while several others were injured. US intelligence officials contacted by the Long War Journal would neither confirm nor deny US involvement in the strike.
In Libya too, there have been persistent reports from officials that drones continue to fly despite the official end of the conflict in October 2011. US officials initially refused to comment but later acknowledged their presence for “surveillance purposes”. There have been disputed reports about whether a drone was in the area during the attack on the US consulate in Benghazi in September 2011.

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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’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

"Unfortunately, my dream remains unfulfilled"

Please tell us about your educational background and your scientific achievements.
 I completed a Masters in Botany from the Punjab University in 1957 and bagged a gold medal. Then I taught for two years at the Emerson College, Multan. After that, I joined the Government College, Lahore, and taught Botany there until 1962. Thereafter, I went to the Edinburgh University, Scotland, and did a PhD in biochemical genetics in 1966. After completing my doctorate, I moved to Canada and stayed there until 1989. During my career in Canada, I was simultaneously involved in research in Germany and the United States. From 1989 to 1993, I was associated with the King Faisal Specialist Hospital, Riyadh, Saudi Arabia. I was there for four years. Then I returned to Pakistan where I worked as the executive secretary of the Pakistan Academy of Sciences for two years, and between 1996-2011, I was the science adviser for the Organisation of Islamic Cooperation’s Standing Committee on Scientific and Technological Cooperation. The most recent development is that I have been elected as Secretary General of the Pakistan Academy of Sciences. This is a non-governmental organisation. I was also chairman of the Natural Commission on Biotechnology under the Science and Technology Ministry. Unfortunately, the commission was wrapped up by the government in 2009.

India, People’s Republic of China and other countries have made enormous progress in biotechnology and benefited immensely. Why has Pakistan lagged behind?
This is because the policies of the government in Pakistan are such that there is little emphasis on advances in science and technology, which is so crucial for economic development. What I wish to convey is that my passion has always been science and I have emphasised it in several of my earlier interviews. Unfortunately, this dream remains unfulfilled. Once again, in my capacity as the Secretary General of the Pakistan Academy of Sciences, in collaboration with my colleagues, we shall try our best to explore avenues for strengthening science and technology in the country. In genetic engineering, I have authored eight books and monographs. In addition to science, I also have a keen interest in Urdu literature. I have a collection of short stories in Urdu and a collection of humourous writings as well.

Why have we not been able to compete in science with India?
 This is because science and technology has never been a national priority in Pakistan except for a few years when Professor Ataur Rahman was the Science and Technology minister.

Prof. Dr Anwar Nasim, Don’t you agree that primary and secondary education is much more important in countries like Pakistan rather than producing PhDs?
Primary and secondary education is equally important because elementary education provides the foundation for higher education. There can be no higher education without sound elementary education. There are many examples of self-made people in Pakistan who emerged from very poor backgrounds such as Professor Abdus Salam. I, too, hail from a poor village in Jhelum.

What about our science budget? Don’t you agree it’s very nominal?
Our science budget is dismal! It’s only 0.5 per cent of our budget allocations. It should be at least 2 per cent.

You have been working in the domain of biochemical genetics. What is your opinion about genetically modified organisms (GMOs)?
After devolution, there is no adequate infrastructure to provide regulatory guidelines for the release of GMOs.
The Environmental Protection Agency is still looking for some degree of stability and continuity.

And how do you view organics? There is a trend across the world to go for organics in preference to GMOs, despite the fact that the former are relatively expensive.
Options such as organics should be critically examined, and if found appropriate from the human health point of view, should be practiced. But to answer any of these questions, one needs a rich source of scientific expertise.

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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

Saving a crippled telecom infrastructure. Tough task.

With demand for high-speed Internet on the rise, optical fibres appear the only medium that can provide relief. But there are bottlenecks. Worse, the failure to execute a pan-India fiber optic installation plan can lead to a disastrous outcome

Another comparison with China. And a parameter that would be of interest to netizens – speed of broadband Internet. According to a 2012 ‘State of the Internet’ report by Akamai Technologies, the average broadband speed of Internet in India is 0.95 Mbps, while that in China is 2.1 Mbps. Even Philippines, Vietnam and a host of other countries that you would term “Third World” record Internet speeds far greater than in India. And since we are already talking comparisons, Asian countries like Japan and South Korea are years ahead of India with 10.5 Mbps and 14.7 Mbps of average Internet speeds respectively. What is interesting about these numbers is that ISPs in China, Japan and South Korea have been delivering over 2 Mbps of connectivity speed for over a decade now! And India? Thanks to 40 million copper loops (last mile connectivity count as per TRAI) spread across India and owned mostly by State-run telcos MTNL or BSNL (of which only 50% can support even 1 Mbps of Internet transfer), except for rare glimpses of real broadband connectivity, Internet users (on various devices including tablets and mobiles) in the country are still feeding on “pseudo-broadband” connections! The advent of fiber optics can however improve the situation. But given the current ecosystem, fiber optics in India appears a thing of the future.

The Delhi metro rail is an example of how optical fibers can infuse efficiency into a process. To ensure on-schedule running of trains and minimum waiting time for millions of users every day, the system works on a high speed optical fibre network that was set up at an initial cost of Rs.200 million a decade back (the network connects all the spoke servers at various stations to the central server at Shastri Park station). What if such a highly efficient fiber optic-enabled communication network was made available to everyday mobile phone or Internet users sitting at work or home? Greater voice clarity, better TV viewing experience and faster data transfer would change the experiences of millions of users of telecommunication devices in the country.

Lack of infrastructure is the reason why such experiences would be hard to come by for the average Indian, for at least the next decade. Some refer to coaxial fibers or wireless technologies as alternatives. At present, coaxial fibers used by cable operators (serving 80 million households across India) are not capable of carrying high bandwidth digital signals. There is much data loss and disturbance during signal transfers on coaxial fibers. Of the thousands of operators of cable TV across India, less than 7% have the expertise or pockets to make coaxial fibers ready for two-way data transfer (a necessity for high-speed transfers). As for wireless technology, 3G or 4G wireless technologies are an option. However, experiences in the past two years have made clear that additional spectrum (needed by telecom operators to serve the broadband needs of millions of customers) isn’t an asset that can be bought for a song. As per TRAI, in Delhi alone, on average, ‘each’ wireless operator would need about 300 MHz of spectrum to meet broadband connectivity demands – 1400% more than the ‘total’ spectrum allocated in the 2010 auctions. Therefore wireless mode is not a practical alternative to fiber optics. It is also important to note that when compared on the basis of loss of data, fibre optics is the best medium. Copper or coaxial cables are not reliable when transmitting data over long distances. These mediums require repeaters at regular intervals to ensure data reaches the intended destination, adding to the cost of equipment required to install a reliable system. On the contrary, fibre cables can transmit data over very long distances without the aid of repeaters.

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

BBA Institute

The Separation and the Quran

Why an Oscar-winning Iranian movie needs to be positioned shrewdly by the US to gain back the ground they lost after the recent act of burning of the Quran

America witnessed a surge in hate crimes against Muslims post 9/11. A report by the Journal of Applied Social Psychology explored that the number of anti-Muslim attacks in America in 2001 increased exponentially from 354 to 1,501 following 9/11. At the same time, US simultaneously invaded two Islamic nations – Afghanistan and Iraq – to fulfil their interests. Consequently, Muslim nations largely consider US as an anti-Muslim country.

In the last few years, the US government and elite intellectual class has attempted to change their cultural moorings and accept Muslims as part of their country. But the Quran burning incident in Afghanistan involving five American servicemen, and the more recent killing of 16 Afghan civilians by an American army man have not helped matters at all.

But where politics and military have failed, the arts might have a solution. In the 84th Academy Awards, an Iranian movie titled ‘A Separation’, directed by Asghar Farhadi, bagged an Oscar in the Best Foreign Language Film category. No Iranian movie had ever won an Oscar previously. In addition, Sharmeen Obaid-Chinoy became the first Pakistani ever to win an Oscar Award for her documentary ‘Saving Face’. But really, it’s not that these two did not deserve the Oscar – the outstanding and brilliant quality of these two Oscar winning packages puts that suspicion away – the more important point is that the Academy could have so easily outmaneuvered its members’ votes to deny the Oscars to both – what with the abysmally low level of relations that US has managed to engineer with Iran, Pakistan and the Muslim world in general.

The fact that the Academy awarded these two productions is a largesse, especially considering that not just does the Academy of Motion Picture Arts and Sciences have members of Jewish decent but also that its President, Tom Sherak, is a Jew.

The news of two “Iranian and Pakistani Muslims” winning an “American” award from an academy with “Jewish” members should have been carpet bombed by the US administration through paid media to promote the rigmarole goodwill message to the Muslim world. Such a PR move over two months would have allowed America to gain back much of the ground it lost post the past few anti-Muslim incidents. While Obama was busy churning out apology notes for the Quran burning, there was no note of congratulations from the state department to either the award winners or to Iran and Pakistan as a whole.

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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

 

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

The fading magic of Nitish Kumar

The Bihar CM’s second term has been nothing short of turbulent. However, he refuses to accept that the people of the state are angry. With promises on investments and an improved power scenario not delivered, will Nitish’s arrogance prove costly?

The magic of Bihar Chief Minister Nitish Kumar seems to have started fading gradually in the second term of his regime. Against tall claims of the ruling government, the ground realities don’t augur well for the state. The poor law and order situation and the red-tape that has marked his present term has had an adverse impact to the extent that investors have already started rethinking on their proposals to set up industrial units in Bihar. The recent spate of unnecessary violence in Madhubani district is a glaring example of the shambles that law and order in the state is currently in.

In the first phase of NDA rule in the state, Bihar had acquired considerable attention throughout the country and even abroad for its remarkable performance in the improvement of law and order and other successful experiments like speedy trials, fast-track courts and prompt action against criminal activities. But the situation has changed faster than expected. Take the example of the much-touted Adhikar Yatra that was recently undertaken by Nitish. The escalating resentment of the people has become so evident that the CM was greeted with slippers, black flags, stone-pelting and anti-government slogans. The people’s anger forced Nitish to give up the Yatra and he has also refrained from participating in meetings in Ara and Buxar. No other prominent leader has hitherto faced such resentment in the state. Skeptics point out that his arrogance and absolute disregard for popular sentiment lie at the root of the quandary.

On a recent visit to the state, Markandey Katju, Chairperson of the Press Council of India, attacked the Chief Minister for the poor law and order situation in the state. In a programme organised by the Director General of Police (DGP) in Patna, Katju, a man known for not mincing his words, said while referring to public angst during the Adhikar Yatra, “He (Nitish) is shying away from facing his own people. The CM had been living in an illusion and is not doing any introspection for things gone wrong.” The reactions that followed warrant even more attention. After listening to the attack on the government made by Katju; the DGP, along with several other bureaucrats, chose to leave the function midway. The organisers disowned Katju’s speech later on and tagged it as ‘unwarranted’.

Moreover, political analysts feel that Nitish’s prime ministerial ambitions and his engagement in national politics have taken prominence at a time when the state is in dire need of Nitish, the administrator. After all, Nitish’s first term was marked by a show of guts and courage and a solemn promise to deliver on the administrative front. However, he now chooses to stay busy in yatras rather than delivering on promises of economic upliftment.

There was a time when industrialists were making a beeline for investing in Bihar. But the manner in which companies like Adani Power & Essar have given up on their proposed plans in the state is not very encouraging. Investors are realising, for instance, that chances of improvement in the power scenario are quite bleak and wonder how industry would function in this milieu. Recently, State Bank of India Chairman Pratip Chaudhuri also insisted that the Bihar Government must cater to outstanding land and power issues to encourage investors.

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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

Can Samsung keep its edge in smartphones?

The South Korean player enjoys a clear lead over its Finnish rival in the smartphone sweepstakes currently but there are quite a few curveballs to come in the hyperactive mobile phone market before a clear winner can emerge.

Until as recently as 2008, Nokia had an invincible lock on the mobile phone market in India. The Finnish giant was by far the strongest Richmond in the field, controlling a humongous 75% of the Indian mobile handset market by volume. But over the next couple of years, even as the handset market was going through a watershed technological change and churn, Nokia made the mistake of taking its eyes off the emerging market trends and has had to pay a heavy price for the lapse.

By the time it realised its mistake, the South Korean major Samsung had already taken the market by storm, introducing a whole new dynamic to the Indian mobile phone market: smartphones, which have operating systems just like PCs (with Android being the most popular). The past two years have seen Samsung make hay and sunshine of the Indian handphone market while Nokia has been left to nurse a bloody nose in the smartphone sweepstakes.

From the staggering peak of its market leadership four years ago, it has seen a heartbreaking fall with its current market share declining to 31%. In comparison, Samsung’s share in the volume game has moved up from 5% to 28% over the past two years alone, according to a research report by Cyber Media.

The cardinal sin Nokia made was to forget that technology is ephemeral in nature. So when smarphones became the hottest flavour in the handset business, Nokia was caught napping. So far it had played the market on the strength of its feature phones and had nothing equivalent to offer in the sizzling smartphone category. Its Symbian platform looked antediluvian and anachronistic in comparison to Samsung’s offerings on Google’s Android.

Unlike Nokia, Samsung had abandoned the Symbian OS early on and succeeded in developing leading-edge handsets using multiple operating systems. At the same time, it developed its own operating system – called Bada – to push smartphones into the mid-market and cannibalize the feature-phone segment. It was also quick to launch several attractive models on Google’s Android platform, which helped it gain global market leadership in the smartphone segment.

The Korean tech giant with an estimated revenue of roughly $200 billion globally started its tech world ascendancy in late 1980s and ’90s as a component manufacturer and supplier of DRAMs, and other flash memory chips for companies like GE and (its love/hate partner/foe) Apple Inc. In the ’90s, once it got the hang of basics like DRAMs, and LCD displays, it quickly scaled its electronics business, investing big sums to create economies of scale and outprice the competition.

On the strength of its broad product portfolio, differentiated retail and multiplatform strategy Samsung has, in recent years, gone about breaking Nokia’s hegemony and its premium brand perception. Nokia’s fortunes have been in reverse gear as it’s two biggest markets – China and India – have gone on to lap up the feeding frenzy over smartphones.

Today, Samsung has a clearly established lead in the lucrative and rapidly growing smartphone category with 43% market share as compared to Nokia’s 23%, according to a CyberMedia Research report. The saving grace for Nokia is that it’s still the overall market leader in the Indian mobile handset market with Rs.119.25 billion revenue and a 38% overall handset market share, compared to Samsung’s 25.3% share and Rs.78.90 billion in revenue. But there is no denying the fact that the tide has clearly turned Samsung’s way, as there’s no good alternative yet to its smartphone dominance in the Rs.312.15 billion Indian mobile handset market (some other industry estimates put it around Rs.550 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

 

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

Global oil market update 2012

It seems that Price rise has stopped having a negative impact on demand, at least that’s what’s happening in the oil sector. Despite rising retail prices, demand for oil has strengthened in 2012, mostly driven by overwhelming Chinese consumption. On the supply side, though the non-opec producers have fallen short, opec has filled the gap to maintain a smooth flow.

China rules the day
Global oil demand is expected to remain strong in the second quarter of 2012. This demand growth is primarily driven by accelerating non-OCED income, which has almost negated the adverse impact of higher oil prices. Region wise, oil consumption is expected to shrink in Europe and North America. And the reasons are obvious. While Europe is struggling to get its debt loaded countries out of the trap, North America is still to come out of the aftermaths of the 2008 recession. Hence, economic activity in both these regions is bound to be disappointing. On the other hand, consumption in Asia-Pacific is expected to hold on to strong growth. More so, for the overwhelming Chinese demand. China is expected to maintain its dominance in 2012, by consuming as much as 9.9 mb/d, a growth of 0.4 mb/d y-o-y.

Gasoline drives demand
Global demand for oil grew about 0.3% year-on-year in the first quarter of 2012. Average demand during this period remained at 89.5 mb/day. However, marginally improved economic activity in various parts of the world is expected to give another 0.7% y-o-y push to the oil demand during the second quarter. In total, global oil demand is expected to expand by 0.8 mb/d or 0.9% in 2012 to 90 mb/d. What’s good for the oil producers is the fact that the demand growth is expected despite a 15% rise in global crude prices during the year. This demand growth is mostly anchored by gasoline and diesel. Having fallen to around 80 kb/d last year, gasoline demand is forecasted to expand by 180 kb/d in 2012, as it continues to replace diesel and petrol.

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

 

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

The enemy within

The BJP is in the throes of virulent factionalism with state satraps pitted against central leaders. Can they get their act together in time?

The story of little known Kuljeet Singh Chahal is symptomatic of how the Bharatiya Janata Party (BJP) continues to sideline potentially popular leaders in favour of its nominated oligarchs. It also provides an insight into the faction ridden ways of the saffron brotherhood and why the party hasn’t yet emerged a serious contender for the 2014 sweepstakes.

Chahal’s entry into politics came through the Delhi University campus. His talent was spotted quite early by party leaders and by the time he was aged 27, he became BJP’s youngest district president in Mayur Vihar. During the last Delhi Assembly elections, he wanted to contest from Vishwasnagar and that is where his troubles began. His claims were overlooked in favour of O. P. Sharma, political adviser to BJP’s Rajya Sabha MP and Leader of Opposition Arun Jaitley. Chahal was then nominated as Secretary of the Delhi unit of BJP but subsequently embroiled in a fake case after which he was sacked.

Scores of young and upcoming leaders have similarly been sacrificed at the altar of factional politics engineered by top leaders, which, in turn, threatens to gnaw at the very foundations of the party. Most media discussions, which focus on the roles of the BJP state satraps – B. S. Yeddyurappa, B. C. Khanduri, Vasundhara Raje Scindia & Narendra Modi – miss the larger picture: the ongoing, no-holds barred tussle between the BJP central leadership and its popular Chief Ministers (CMs), who may lack the elan in stylish TV debates, but more than make up for it with their mass support in the states. Says A. P. S. Chauhan, professor and head of the department of political science at the Gwalior-based Jivaji University, “The battle of attrition between central leaders and popularly elected ones is three decades old... For the BJP, it means real trouble.’’

Top central leaders of the party are too squeamish about contesting elections and prefer safe passage into the Rajya Sabha. The ones who win can only do so if they have the support of the state leaders. In fact, one of the frontrunners for the Prime Minister’s chair, Arun Jaitley, is also from the Rajya Sabha. Sushma Swaraj, Leader of Opposition in the Lok Sabha, had to go as far as Vidisha in Madhya Pradesh to win an election with the support of CM Shivraj Singh Chauhan. L. K. Advani is dependent on Gujarat CM Narendra Modi to pull his political chestnuts out of the Gandhinagar fire, while Murli Manohar Joshi and Rajnath Singh have had to change constituencies to avoid defeat.

Public statements by Yeddyurappa, Vasundhara Raje and Gujarat veteran Keshubhai Patel make no bones about vicious infighting within the party rank and file. State-level leaders, often at the receiving end of central diktats, have had enough. Top BJP leaders well ensconced in their air conditioned rooms in Delhi are hell bent on putting mass leaders in their place, even if it seriously damages the party’s poll prospects.

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

 

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
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“New challenges emerge as an industry evolves”

Vinnie Mehta, Executive Director, ACMA, believes that the components industry has a bright future

B&E: Last year passengers car segment in India witnessed a major slump in sales. As growth of the auto components industry largely depends on automobile sales, how do you expect industry players to tackle the situation?
Vinnie Mehta (VM): The automotive industry in India continues to be a growth driver for the economy. In the recent past, sales of passenger vehicles have come under some pressure, however, small commercial vehicles, LCVs, tractors and two-wheelers have done well and are witnessing on-track growth. Therefore, the effect of performance of the vehicle industry on the auto components industry varies. We expect overall growth of the auto components industry to vary between 8%-10% in the current fiscal.

B&E: What are the major challenges this sector usually encounters?
VM: Although, current business sentiment in the domestic market is moderating, the long-term growth prospects of the Indian automotive industry remain intact. Primary demand drivers like aspiration for owning vehicles, growth of the economy, et al are the main reasons for this. It is this huge potential that has attracted several global companies to set up their manufacturing base in the country and has led many Indian companies to invest in capacity expansion, R&D, and product innovation. However, inflation, interest rate and fuel price hike, are major deterrents to the growth path and need intervention. Infrastructure inefficiencies and procedural delays are also few key issues that are eroding the competitive advantage of this sector. We have been urging the government to take measures to ensure availability of capital at internationally competitive rates to upgrade and innovate.

B&E: What about the structural deficiencies? What would be the best approach to deal with them?
VM: While the growth prospects of the Indian auto components industry remain promising, there are new challenges as we evolve into a critical part of the global auto ecosystem. For Indian suppliers, on one hand there is the need to maintain competitiveness in an inflationary environment and on the other they need to compete with the best in an increasingly uncertain global market. OEMs internationally are reducing the number of suppliers that they wish to work with, leading smaller Tier-Is to become supplier to the larger Tier-Is with the T1s assuming the role of ‘Systems Integrators’; this trend may well be visible in India in the near future as the industry evolves. Currently in India, Tier-IIs and Tier-IIIs are the weakest link in the supply chain.

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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

 

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

Doing business 2012

Enabling private sector growth and ensuring that poor people can participate in its benefits are objectives that require a regulatory environment where new entrants with good ideas, regardless of their gender or ethnic origin, can start businesses with ease and where firms can invest and grow, generating more jobs. The countries which can provide this turn out to be the best places to do business

Reforms are the order of the day

Over the past year Sub-Saharan Africa has seen a sea change in terms of regulatory environment to make it easier for domestic firms to start up and operate. In a region where relatively little attention was paid to the regulatory environment only eight years ago, regulatory reforms making it easier to do business were implemented in 36 of 46 economies between June 2010 and May 2011. That represents 78% of economies in the region, compared to 56% over the previous six years. Globally in 2010-11, governments in 125 economies implemented 245 institutional and regulatory reforms as measured by Doing Business – 13% more than in the previous year. This shift has been particularly pronounced in low- and lower-middle-income economies, where 43% of all reforms were recorded.

Africa turns the heat on asia

Globally, more efficient regulatory processes often go hand in hand with stronger legal institutions and property rights protections. OECD high-income economies, by a large margin, have the world’s most business-friendly environment on both dimensions. On the other hand, economies in Sub-Saharan Africa and South Asia are most likely to have both weaker legal institutions and more complex regulatory processes. However, some regions break away from the general trend. One is the Middle East and North Africa, a region where reform efforts over the past six years have focused mainly on simplifying regulation. Today economies in the region often combine relatively weaker legal institutions with relatively more efficient regulatory processes.

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

 

2013 : DNA National B-School Survey 2013
Ranked 1st in International Exposure (ahead of all the IIMs)Ranked 6th Overall
Zee Business Best B-School Survey 2013
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

“All we are asking for is a level playing field”

KOSHY K. VARGHESE, EXECUTIVE VICE PRESIDENT – MARKETING, MRF LTD.

B&E: MRF has become the first Indian tyre company to cross the turnover of Rs.100 billion in one year. In fact, the company has registered growth in excess of 30% during the financial year ending September 30, 2011. So, how do you plan to keep pace with the rising demand in the near future, both in the aftermarket and from OEMs (original equipment manufacturers)?
Koshy K. Varghese (KKV): We have been growing at a CAGR of over 30% for the last two years, and Rs.100 billion turnover is something we are really proud of, because we are the first Indian tyre company to achieve this. However, this fiscal might not be as good as the last one, primarily because the raw material prices have gone up sharply over the last one year. As far as rising demand is concerned, the company has been investing Rs.9-10 billion annually in new plants for the last few years. In fact, we are in the process of setting up a new plant with an investment of Rs.8 billion in Trichy which will start operations by early 2012. Post the commercial operation, this new plant in Tamil Nadu will add 15% to the overall turnover of the company.

B&E: MRF is reportedly considering several overseas acquisition options. Is the decision triggered by the rising prices of raw materials in the country?
KKV: We may look at acquiring plants outside India. We have not come across anything as yet. If we do get we will definitely acquire. But it will not be just to offset the rising costs of raw materials. We are looking at it as a tool to increase our turnover. Further, as a company which has a global footprint – today exports are about 10% of our total sales – it is good to a look at options of having manufacturing bases outside the country. Therefore, we will definitely go for an acquisition if a good opportunity comes up. But it has to make business sense and fit into our overall strategy.

Read more.....

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

 

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

“We support choice & are platform agnostic”

B&E: You have recently announced the launched of Samsung Galaxy Note, a hybrid between a smartphone and a tablet. Such products haven’t really caught up in India as of yet. What make you sure of its success?
Ranjit Yadav (RY): We don’t look at Samsung Galaxy Note as a hybrid product; we have created a new category of devices. It has a smart-pen built in, which allows you to create and capture content in ways much more different than then before. This is meant for a person on the go, who can purchase this one device where he can do all his activities together, whether it’s consumption of content, portability and creation and sharing of content. So he doesn’t need to reach for his phone, MP3 player, tablet or notebook; all at the same time. This one core device can do all the disparate things of these separate devices. It has a built in Stylus, which can help in doing so many things: you can paint, write, take notes, create or capture. Within a year, we want to sell one million units of Samsung Galaxy Note.

B&E: Are you working on a converged ecosystem for Samsung products, because as you know Apple which is strong in the mobility space, is planning to launch its own television soon, which is being talked about as a strongly conversed product. Even companies like RIM have a similar strategy. What is Samsung doing in this regard?
RY: Convergence with digitisation and connectivity pipes being available is a reality. It plays very well into our plans, as our products are best suited for a converged world. Many of our devices like Galaxy Note are excellent examples of convergence devices. Similarly, in television, we have smart television. We have, as an example, a function called “All Share”, where you can share all your applications across devices. It starts from our basic central theme that we want to give consumers choice; we don’t want to choose for them. We believe they are smart and know what they want. So we will bring best in class in every aspect we can. So we have supported the Android platform, we also have our own Bada platform and we also have products on the Windows platform. We support choice, and are agnostic to platforms. And that’s our strength; we can work on multiple platforms, and bring out innovative products.

B&E: You have become the largest tablet player in India. However, the real challenge seems to be reaching out to the sub-10K tablet space that is increasingly getting crowded. What are your plans for the same?
RY: The tablet category is new, and it’s still about creation of a category here. So we are working on that front. Our emphasis is on creating the category, educating consumers, and getting the usage going. We first focus on the consumer experience, and with time and when technology costs allow us; because technology has this particular advantage with economies of scale, you can bring down costs.

Read more....

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

 

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

Rubbing Salt in The Wounds

Post The Steepest-Ever hike in Petrol Prices since December 2008, The Government is all set to Increase The Prices of Diesel, Kerosene and LPG. There is no Respite to The Common man’s agony.

While Buddhadev Bhattacharjee, former Chief Minister of West Bengal, failed to read the pulse of the electorate and thereby played his own crucial role leading to the historic fall of the red bastion in West Bengal; but his biting observation during the electoral campaigns that a hike in oil prices would be the Centre’s gift to the electorate soon after the elections apparently seems to have come true. Soon, after the election results of the four states and a union territory were declared, the oil marketing companies (OMC’s) guided by informal advice from the Ministry of Petroleum (to be read as the central government) called for a steep hike of Rs.5 a litre in petrol prices. While, the opposition parties, for their own hidden political motives, lambasted the government for the decision, the aam admi (common man) has been left unto himself to bear the brunt of the whammy. An approximately 56% increase in the retail price of fuel over a period of two years (the retail price of a litre of petrol in New Delhi on 15 May 2009 was Rs. 40.62, which post nine successive hikes and the Rs.5 per litre hike on 15 May 2011 is pegged at Rs.63.41) is certainly too harsh for the mass. But interestingly, the government considers that the price rise in petrol will have “marginal impact” on consumer sentiment. And laughably OMC’s argue that the increase has been “moderate”. But then, certainly it’s moderate. At least when one considers the fact that the empowered group of ministers is likely to take decision on increasing the prices of diesel, kerosene and LPG very soon. The real tough time will start only after their announcement.

While the timing of the OMC’s decision was undoubtedly a political one, the economic aspect of the decision, given the crude oil prices in the international market (hovering over $110 a barrel), can not be totally criticised. The recent hike in retail prices will help the OMC’s, in particular, to reduce their under recoveries (analysts at Bank of America Merrill Lynch estimate that despite the price hike, the absolute figure of under recoveries would still be more than Rs.1 trillion). On the economic front, while the likes of Kaushik Basu, Chief Economic Advisor in the finance ministry, and Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, argue that the increase in administered retail price of petroleum products would have a relatively less harmful effect on inflation compared to a slippage in the fiscal deficit, the opposition claim that the hike will have an adverse effect. In fact, they (Left in particular) argue that if a rationalisation of the tax structure on import of crude can be done, wherein the cess revenue earned by the government due to increase in international crude oil prices is returned to the OMC’s, then there would be no need to hike the prices and unnecessarily burden the common man. Truly so, a back of the book calculation makes it amply clear that various taxes shave off around 40% of the price of petrol. At this juncture it needs to be remembered that the taxes are levied as a percentage of the basic price of the fuel and aren’t fixed per litre. However, the government on its part is unlikely to tinker with the prevailing taxes as any reduction in taxes would definitely upset its finances and blunt its effort to keep the fiscal deficit within the set target of 4.6% of GDP.

Read more.....

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

 

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
IIPM – FLP (Flexi Learning Program)

Truth Vs. Statistical Truth

The Controversy over NSSO’s self Contradictory Unemployment data not only has Highlighted The Drawbacks in The survey, but has also raised a finger at Policymakers who, for The First time, questioned the same.

Soon after the results of the 66th Round of the National Sample Survey Organisation (relating to data collected in FY2009-10) were declared, it became the subject of a huge controversy and debate. In an apparent change in the scheme of affairs, the controversy this time around was spurred not by the usual critics of the government and its statistical system, but from within the government circles itself. Deputy Chairperson of the Planning Commission Montek Singh Ahluwalia slammed the National Sample Survey Organisation (NSSO) report for indicating fall in both employment and unemployment rates at the same time. He ended up claiming that there has been a ‘gross misrepresentation’ of the NSSO data. And the whole system, rather than questioning the priors, decided that the data must be wrong, and the NSSO was reprimanded for its ‘faulty’ investigative methods – something that had been accepted without question and with a lot of pride on many occasions in the past decade or so.

The controversy began when the NSSO, in its survey report titled ‘Employment and Unemployment in India’ (which was conducted between July 2009 and June 2010 and included a sample of over 1,00,000 households), found that employment in labour force had fallen from 42% in 2004-05 to 39.2% in 2009-10 and the unemployment rate had fallen from 2.3% to 2% in the same period. What this essentially translated into was that despite more than an average of 8% economic growth during these five years, sufficient jobs had not been created, suggesting that the government’s economic policy was not inclusive. But countering the argument, Ahluwalia pulled up NSSO for the self contradictory figures saying that the data collection methodology used was faulty. Subsequently, Secretary, Ministry of Programme Implementation T. C. Ananth, went on record to admit that the data was ‘confusing’. “Once you break up labour force participation for women, children and subsidiary status it becomes clear that employment has increased,” he clarified, claiming that the computation of the unemployment rate was a problem as it failed to take into account people who may be self employed. But interestingly, the NSSO data also shows a consistent fall in self-employment – an indicator that more jobs were being created because of economic growth.

As amusing as these official interventions may seem, there is no denial in the fact that the results of the latest survey of the NSSO reveal some important shifts in India’s labour markets and the nature of the growth process that determines these changes. Policymakers, who currently choose to stay in denial, need to take note of these trends seriously and analyse them in detail. For instance, there was an addition of 40-45 million people in the age group of 15-59 between 2004-05 and 2009-10 and unemployment rate for that period has fallen from 2.3% to 2% of the labour force. Agrees Pronob Sen, Former Chief Statistician of India, as he explains, “It is because of the fact that the additional people in the working-age population and some past unemployed people were given jobs, the unemployment ratio has come down.”

Read more....

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

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
IIPM – FLP (Flexi Learning Program)