Showing posts with label IIPM New Delhi. Show all posts
Showing posts with label IIPM New Delhi. Show all posts

Saturday, September 7, 2013

Travel became a travail

It is dangerous for Indian Muslims to travel to Pakistan as tourists as I realised
FIROZ BAKHT AHMED ,SOCIAL COMMENTATOR AND GRAND NEPHEW OF ABUL KALAM  

My honeymoon with Lahore - my dream city, a place of fun and frolic and home to world’s best institutions like Aitchison College and Punjab University, eateries like Salt’n Pepper Village, Food Street and Zaiqa and water parks like, Sozo Water Park, Joy Land Park and Starlet shoes - has ended. During my second — and perhaps last visit there - from June 4 to June 13, I found ourselves: me, wife and our three children at the Sarwar Road Police Station, Lahore Cantonment.

Through these columns, I implore Muslims of India never to venture into Pakistan as tourists since there is no guarantee that they would return unless they are part of some government delegation. Pakistanis loathe Indian Muslims, terming them variously as enslaved and spies. My children who were enthusiastic about visiting Lahore — a city about which famed Urdu writer Kashmiri Lal Zakir had said, “Jinne Lahore nai vekhya/wo te jamiya hi naiee!” (He, who hasn’t seen Lahore/ He isn’t even born!) - are now absolutely Pakistan phobic.

On June 9, day five of our stay in Lahore at about 5 pm, the children wanted a joyride in Joy Land Park. While we were about to enter the park, we were threatened by ISI sleuths in civil dress who had been following us from Wagha. Without our knowledge, they diverted our three-wheeler towards the Sarwar Road Police Station in the Lahore Cantonment.

In the police station, we were told that we had entered a ‘prohibited’ area. My wife said we were tourists and there were no sign posts in any case. But our interrogators had sinister designs and began preparing papers to throw us behind bars.Even if a tourist unknowingly goes to the amusement park, he can land into the hands of ISI rangers. During the grilling, they kept repeating that Pakistani tourists get even worst treatment at the hands of Indian agencies. My consistent denial demeaned me in their eyes.

We were staying at the prestigious 125-year-old Aitchison College from where our passports, visas etc, were hauled in by the police. I was wondering what threat perception we posed, an enthusiastic bunch of tourists consisting of three school going children, me and wife?

The ISI spies had plotted impeccably to snare us - only to be later victimized as Sarabjits and Surjeets for whom neither Pakistan nor India are frankly much concerned. Our arrest documents were written and passports and other papers confiscated. Fortunately, College bursar Col Mehboob, a retired army man, spoke to the police assuring them of our bonafides. Even that was not enough and I had to call the editor of The Nation. It still took us five hours to get out of the dreadful and scandalous clutches of ISI officers after a written apology.

Pakistan, unfortunately, is run by ISI agents and its military. They are suspicious of all Indians. The `soft corner’ for Pakistan, after this treatment has absolutely vanished, particularly against the country’s intelligence apparatus. Bigwigs there are double faced and can do a ‘U’ turn at the drop of a hat, a reason why that country is on the verge of disaster.

At the police station, I could not help but wonder: the El Dorado that Quad-e-Azam Mohammed Ali Jinnah created as a dreamland of Muslims after thousands of sacrifices, is not even a semblance of the dream he had spun. Pakistan’s landscape is dominated by terrorism, corruption, inflation, honour killings and sectarianism - to name just a few burning problems.


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

ExecutiveMBA

Thursday, June 27, 2013

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?


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

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

Saturday, May 4, 2013

Better off 'building tomorrow's enterprise’?

Infosys has disappointed the street with its financials over the last few quarters, and even lost its bellwether status. However, an unperturbed management is banking on much better numbers in the medium to long term with its strategic transformation. Can they pull it off?

As I entered Gate No. 2 of the Infosys headquarters at Electronic City, Bengaluru, I could detect a heightened buzz in the environment, which I am otherwise very familiar with. A number of additional security personnel were combing the area, and no vehicles were being allowed to stop anywhere near the gate; in fact, even visitors were not allowed to stand and wait in the vicinity. Later, I realised that all this was happening because the President of Tajikistan Emomali Rahmon was visiting the campus on that particular day. Visits by heads of state & renowned foreign dignitaries to the Infosys campus is not uncommon, and there is a special area within the campus that has trees planted by these people. Respect was the foremost criteria on which Infosys Chairman N. R. Narayana Murthy built the company and indeed, it continues to be respected for much more than the manner in which it has grown from scratch to a $6.99 billion company in 30 years, and led the industry in absolute profitability for most of them. However, the past few quarters have seen the company miss some of its sheen on the bourses. Investors are particularly peeved with the company’s muted guidance that compares unfavourably to TCS and Cognizant (and to NASSCOM!), while being quite in line with the guidance of Wipro. When you look at the results of the quarter ending June 2012, Infosys posted a revenue of Rs.89.09 billion, a growth by 29.02% yoy and a profit figure of Rs.22.04 billion, a growth by 20.9% yoy. In comparison, TCS posted a revenue of Rs.114.11 billion, a growth by 32.47% yoy and profits of Rs.27.97 billion, a growth by 35.64% yoy. In dollar terms, Cognizant, which overtook Wipro in terms of revenues last year, has even overtaken Infosys with revenue of $1.795 billion as compared to $1.75 billion for the latter. Due to these reasons, TCS has now become the bellwether of the stock market, a position that Infosys held earlier. Moreover, the company’s guidance of around 5% revenue growth for FY 2012-13 has disappointed investors, since NASSCOM has provided a guidance of 10-14% in terms of industry growth.

Infosys maintains that the environment is volatile enough, and there is nothing materially positive to justify a higher guidance for them. Some critics say that the company’s single-minded focus on margins is the reason (making it lose some lucrative deals in a scenario where players are getting too aggressive on price), while some say that the company’s succession plan hasn’t gone well. It’s reluctance to latch on to M&A targets is a debate that certainly wasn’t born yesterday, though the company did manage one acquisition of late (the $350 million acquisition of consulting firm Lodestone) to show that it really is serious about inorganic growth now. To make matters worse, Infosys has delayed increments for its employees, which is all the more disconcerting for company watchers, who feel that this will only lead to an increased attrition of quality manpower.

In an exclusive with B&E, S. D. Shibulal, CEO & MD, Infosys, defends, “People link price and margin directly. Margin is a reflection of the company’s aspirations, philosophy, efficiency in operations, how do you manage, et al.” He asserts that there are as many as ten levers on margins that he can identify, which include things like onsite-offshore ratio, utilisation, pyramid structure and client choices apart from price. Moreover, he asserts that client deals today are strategic, and Infosys doesn’t really walk away from deals just because it has to bring its price points down. However, he also admits that having industry leading margins has remained a long term strategic focus area for Infosys.


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

Tuesday, April 30, 2013

Indian CEOs’ perceptions of the business climate in China; an exclusive ICMR survey

Business & Economy magazine in association with the Cornell University, IIPM Think Tank and the Indian Council for Market Research (ICMR) conducted a survey to understand what doing business in China really means. The survey is aimed at helping Indian companies better understand not only the challenges and opportunities of doing business in China, but also the country’s policies with respect to Indian business. 109 CEOs and top executives from India participated in the survey. A structured questionnaire on the current economic & business environment in China was designed and telephonic interviews were conducted pan India. The sample included respondents across sectors/industries – pharma, IT, FMCG, manufacturing: automotive, auto components, electronics, steel, telecom, textile equipment and others.


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

Saturday, April 27, 2013

Challenging the protege

Lula's reviving ambitions could set him on a collision course with 'protege' Roussef in the coming months

The stocky and bald ex-president of Brazil, Luiz Inácio Lula da Silva, who has been the lynchpin of the ruling Workers’ Party (PT), seems to be ready to square up with his handpicked successor Dilma Rousseff for the presidential throne again. Although he has said that Brazil needs a mother (referring to Dilma Rousseff), his personal ambitions are on the ascent. He recently intoned, “I am not going to let some Tucano be President of Brazil again.” Tucano is the brash nickname for his arch rival from the opposing ‘Brazilian Social Democracy’ party. Further, he also drove home a point at a Brazilian TV show, where he said that he can contest the next election if Rousseff “doesn’t want to run.”

There is no denying the fact that Lula’s popularity in Brazil can daunt the staunchest of opposition. If he so desires, he can bring the entire country to a standstill and mesmerize voters with his charisma. After returning from successful cancer treatment, he has already started to flex muscles within his Workers’ Party. That Lula’s veto is valued by civilians was clear when Lula backed one Mr.Haddad for the Sao Paulo mayoral post, trampling the ambition of the more popular and currently serving Marta Suplicy.

So far, he has only presented himself as a back up to Rousseff. But considering that the elections are still some way off, it is quite possible that Lula is only playing himself in! But Rousseff has matched his performance and even taken some tough decisions. She has sacked eight ministers who belonged to Lula’s coterie.

These are writings on the wall that Lula cannot take his election for granted. He has to match the roll-off benefits of his protégé Rousseff. And lastly, Lula has to push back on some of his strong armed tactics; or else cracks in his relations with Rousseff could start becoming evident sooner rather than later.


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

Thursday, April 25, 2013

How long will Hero rule the motorbike-land?

Homegrown business brainpower from the Munjals have ensured that Hero MotoCorp hangs on to the crown for more than eleven years. And during these years, the most unexpected of moves from Bajaj have failed to dismantle Hero’s machines

In the summer of 2001, Hero Honda’s (now Hero MotoCorp) 78 year-old boss Brij Mohan Lall Munjal got the opportunity of a lifetime. He had the chance to invite 3,000 Hero Honda motorcycle owners for a grand celebration. Reason – each month, between April and July that year, Hero Honda had outrun the long-standing no.1 seller of two-wheelers Bajaj Auto in sales (volumes). So August 2001 it was, a time for Hero Honda to declare that boom time was over in Bajaj land. That Munjal Sr. wanted the world to acknowledge his company’s ascension to the throne was proven by the manner in which he used the merrymaking opportunity to pull down Bajaj a peg or two. He organised a grand celebration in Pune – Bajaj’s hometown!

The 2001-02 season proved a watershed year for Hero Honda. The uncorking of the Hero champagne bottle in Bajaj territory also symbolised a shift in tectonic plates in the two-wheeler business. During that year, for the first time in 45 years since scooter was made commercially available in India, sales of the product fell. In FY2001-02, sales of this product dipped 2.6% y-o-y to 0.85 million. On the other hand, sales of motorcycles continued to rise (by 36.8% that year to 2.89 million). By the time that financial year ended, Hero Honda had been crowned the new #1, with a market share of 49.60% (as compared to 35.08% a year back), miles ahead of the new #2 Bajaj whose market share fell to 24.60% (from 36.26% a year back).

Eleven years later, Hero MotorCorp remains the #1 in the domestic circuit with a 45.17% market share, while Bajaj – despite retaining the silver – has become smaller with a 19.10% control of the Indian market. In fact, how dominant a force Hero has grown into () can be understood from the fact that the manufacturer is today the world’s largest two-wheeler manufacturer (in volumes).

Three big changes have occurred in the industry during the past decade. First, the sight of geared scooters across showrooms is history. [The last time Bajaj rolled out this product was in 2009.] Second, having parted ways with Honda, Hero MotoCorp is an ‘independent’ powerhouse that seems to be growing in stature each quarter – much like the Bajaj of the 1980s & 1990s. Third and most important, competition in the category has risen tremendously, especially with the arrival of players like Honda, M&M and TVS, that have both geared and non-geared products on offer.

The shift of demand from geared scooters to motorcycles stripped Bajaj of its glory. While the scion of the Bajaj dynasty, Rajiv, was not slow to judge fluctuating moods in the market, his effort to salvage some pride can be only termed “reactionary”. Going by numbers, Bajaj does not appear deserted or facing a storm – actually, the situation seems fine. Today, motorcycles account for 92.67% of its sales volume (FY2011-12), as compared to just 8% fifteen years back (remember the Boxer, the Champion and the KB100 & KB125 brands?). But its high-quality positioning strategy seems to have fallen weak before Hero’s price leadership and made-for-the-masses positioning. The current market share difference is proof (Bajaj’s 19.10% vis-a-vis Hero’s 45.17%). Despite 25 products launched in the motorcycle segment since 2000-01, not only is Hero (which has launched only 16 products in the segment) sitting more comfortably on top, Bajaj is finding hard to deal with the walking dead of the present decade – scooters!


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

Friday, April 19, 2013

“Perhaps the US Navy seals did capture Osama alive...”

Cairo-based max rodenbeck, middle east bureau chief at the economist, discusses Bin Laden’s death, the involvement of Pakistan and the effects of Osama’s death on other terror outfits.

B&E: Recently, America celebrated the end of Osama bin Laden, as the end of the mastermind behind the biggest terror threats worldwide. Is it actually such a victory?
Max Rodenbeck (MR):
Understanding that he was one of the biggest criminals in world history and the biggest threat to peace, the celebration was called for. But to hope that this would bring an end to all kinds of terrorist attacks like those masterminded by the al-Qaeda under bin Laden’s leadership, I think it is premature to think that such a thing will happen. Osama’s death is a big blow to al-Qaeda, The outfit has grown considerably weaker in the past ten years, and it is not clear as to who will be the successor to Osama.

B&E: While reacting to the news of Osama’s death, the British PM had said that there was a need for the West to be cautious of a backlash. Also, Taliban has vowed to launch an attack on US and Pakistan to avenge Osama’s death. How real are these threats?
MR:
More than considering them real or not, it is better to understand these as short-term threats. The most striking response to Laden’s death from the Muslim world has been the silence. There was not a great deal of comment at all. Besides the people who are on the fringe of Islamic radicalism – the Jihadist fringe, which is a very small fringe element in the Muslim world today – the rest are not upset about Osama’s death. But in terms of an immediate backlash, it is pretty likely that some of those groups associated with al-Qaeda will feel the need to either express their anger or reassert the fact that they still exist by launching an attack.

B&E: Reports have claimed that Osama bin Laden, in recent times, was not as active as he was, say about 10-15 years ago. What are your views?
MR:
It is true that Osama’s leadership has not been that important in recent years. In fact, the central leadership of al-Qaeda has not been that critical. The work of al-Qaeda around the world over the last couple of years has been carried out by groups that are only remotely linked to al-Qaeda. Laden’s leadership has been less important of late. I think this has also largely been because he has been unable to communicate. His leadership position had weakened even before his death.
 

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

Tuesday, April 16, 2013

B&E Indicators

Poor growth

Since the first quarter of financial year 2011-12, growth has been slowing down consistently and presently it is pegged at 6.9%, least in last 2 years. While services have been performing better with a 10% growth, industry has been trailing with a moderate 4.3% growth. As per experts, negative global outlook is the key reason behind this dismal performance. Worse, forecasts suggest the trend to continue for two to three more quarters.

Missing Investments


Consumption slowed down considerably in 2011 missing all its targets for the year with government consumption, one of the major constituents, seeing a negative growth. However, on the back of a strong middle class, private consumption has led the race to a respectable position. Investments have also been sluggish due to negative returns that the financial markets are offering.


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

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

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

Monday, April 15, 2013

Asian bond market report

Capital flows into emerging East Asian bond markets remained strong as investors chased yields during the first half of the year. Relatively strong economic fundamentals, interest rate differentials, and the potential appreciation of regional currencies acted as the key pull factors for these countries to offer higher yield on relatively longer tenure bonds.

Indices heading south again


Unresolved sovereign debt issues in the United States and the ongoing Eurozone debt crisis has jolted investors’ confidence on global asset markets. Rising risk aversion has sharply dragged down global equity markets, particularly in the aftermath of Standard & Poor’s (S&P) downgrade of US sovereign debt. However, considering the baseline scenario, MSCI indices show that the Emerging Europe stock markets have been the worst affected lot since the 2008 financial crisis. And the scenario has been further aggravated by the sovereign debt crises in mature markets and the potential impact on the wider economy. This has led investors to re-think their definitions of risk-free and risky assets and prompted safe haven flows into gold, the bonds of higher rated corporates.

Us stands tall at the top spot

As suggested by an Asian Development Bank report, demand for local currency (LCY) government bonds picked up in the middle of 2010 and remained strong throughout the first half of 2011. Overall, there has been a bullish flattening of yield curves in most markets; in many cases there has been a downward shift of the entire yield curve. Total LCY bonds outstanding in emerging East Asia grew 2.4% on a quarterly basis in 2Q11 to reach $5.5 trillion, with growth driven more by the region’s corporate markets rather than its larger government markets. The most rapidly growing corporate bond markets in 2Q11 were Indonesia (8.9%), the People’s Republic of China (PRC) (6.3%), Malaysia (4.9%), and Singapore (4.7%).


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

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

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

Monday, April 8, 2013

Will they keep getting it right?

Post the recovery in the global economy, Indian IT firms have the opportunity to chart a new growth story. An analysis of their results provides valuable insights on the way forward

Even though he has got himself out of Infosys, it will remain hard for Infosys founder and former Chairman N. R. Narayana Murthy to stay out of public attention. And he makes it even harder due to some of the statements he makes, which may not win popularity awards, but bring us face to face with valid truths that we often try to sneak away from. In a seminar organised by the Project Management Institute a few days back, Murthy lamented on the laid back attitude of Indians, low focus on merit in society and how this affected our work. And around the same week, he was busy drafting a letter to FM Pranab Mukherjee on how delays at immigration were discouraging foreign clients from coming to India, and that IT firms should sponsor world class VIP lounges at airports.

Without a shadow of doubt, the Indian IT sector has been a study in contrast as compared to the economy in general. The sector has registered blistering growth (revenues of Rs.4.38 trillion in FY 2010-11 and growth of 19% yoy as per NASSCOM), generated high employment, developed a powerful export model and also delivered on creating benchmarks in terms of best business practices.

Normally, we describe India’s IT story as TCS, Infosys, Wipro & Cognizant (followed by Mahindra Satyam, HCL Technologies and the rest of them). These four have been often used as the barometers for experts to judge the entire sector and where it is headed.

By that yardstick, there have been a number of mixed signals in the results of these companies for the quarter ended June 2011. And not surprisingly, the ‘basics’ that the Indian IT sector swore by at one point in time are also losing some of their relevance over time and CEOs are often seen talking about inflection points. B&E analyses the broad picture that emerges from these results and also strategic implications for IT companies.

It is known how the results showed a surprising contrast between the performances of Wipro and Infosys on one hand and TCS and Cognizant on the other. Infosys revenues grew by 23% yoy to reach $1.67 billion for the quarter, but net income after tax grew by only 17.8% yoy and declined by 4.5% qoq to reach $384 million. Wipro, on the other hand, posted IT services revenues of $1.41 billion, an increase by 16.9% yoy while net income just increased by 1% yoy to touch $295 million. In the case of TCS, revenues increased by 34.4% yoy to reach $2.4 billion and net income increased by 30.6% yoy to touch $532 million. Cognizant, which beat Wipro in terms of revenues to reach the number 3 position in the quarter, saw revenue rise by 34.4% yoy to reach $1.48 billion and net income reach $208 million, a growth of 20.78% yoy.


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

Monday, April 1, 2013

It’s Time to Shun Berlusconi

Italy’s High Level of Government debt makes it Vulnerable to a Worsening Sovereign debt crisis. Can Italian PM Silvio Berlusconi, who is Currently Facing Sex & Power abuse Charges, save Italy from a free fall?

While the Italian Prime Minister Silvio Berlusconi has been extremely successful in organising his famous “Bunga Bunga” parties (which he denies of and is currently facing sex & power abuse charges), the 74-year-old TV magnate-turned-conservative politician has totally failed when it comes to handle the Italian economy which has been struggling to gain momentum following the 2009 recession that forced the value of its economic output to shrink by 6.7% (Q1 2009).

A closer look at the numbers and one can easily sense the real trouble. First, at 130%, the debt-to-GDP ratio of Italy is surpassed by no other eurozone nation (except Greece and Ireland, which have already opted for EU-IMF bailout package). Second, its anemic nominal GDP growth rate of 1.23% per annum over the past decade makes it the second slowest growing economy in the euro area after Portugal (Portugal’s growth rate has averaged only 1% during the past ten years). If this isn’t enough, Italy’s recovery has already started losing momentum as GDP growth slows to 0.1% (q-o-q) in Q1 2011 from 0.3% in Q3 2010, the weakest performance over the last one year.

In fact, several economists expect the Italian GDP growth to slow to 0.6% in 2011 from 1% in 2010 as major fiscal consolidation at the domestic level, as well as in most of its European trading partners, weighs on demand. While fiscal tightening across Europe is set to dampen demand for key Italian exports as four of its five biggest trading partners (Germany, France, Spain and UK) are in Europe, private consumption (which comprises over 50% of Italy’s GDP) too is expected to remain under pressure considering high unemployment, subdued wage growth, and tight credit situation in the country. Softer domestic and export sales could even prompt some companies to stop hiring and slim workforces. This, combined with public sector job cuts, is set to put upward pressure on the unemployment rate, which is already hovering at 8.7% at present.

Further, the economy lacks one of the most important components of all if growth is expected to be sustainable – the gross fixed investment, which has once again started falling after growing at a healthy rate of 4.6% during first quarter of 2010. In fact, the rate of gross fixed investment is expected to deteriorate further as the weak economy erodes profit margins and puts downward pressure on capacity utilisation. What’s more? Moody’s Analytics anticipate the growth in gross fixed investment to come down to literally zero by Q3 2011.
 

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

Monday, March 25, 2013

Fare the Well, Dear Mr. Governor

Amidst recurring controversies regarding Governors serving The Political Interests of The Centre, A debate to either Abolish or Relook The Constitutional position of The Governor is The need of The Hour.

The position of the Governor which was conceptualised by the founding fathers of India’s constitution to provide for an independent and impartial post which would rise above partisan interests and raise his conscientious voice in the event of a crisis or conflict in a state, has unfortunately disappointed us on more occasions than one. Recurring controversies of Governors being seen working in a partial manner and even dubbed as “political agents” has dampened the integrity of the post and calls for an urgent need for reforms of the highest order to protect the larger national interest of fair governance. The question here is whether it is time for India to totally abolish the post of Governor or not.

While one might believe that the current turmoil in Karnataka has led us to prompt this debate, one look in the recent past reveals cases where Governors of states in both the UPA and NDA regimes have not only acted partially; they have also tried to overrule the electoral mandate. Apart from the recent furore created by the BJP in the case of H R Bharadwaj and E S L Narasimhan, serving governors of Karnataka and Andhra Pradesh, former governors of Bihar and Jharkhand Buta Singh and Syed Sibte Razi also came under immense scrutiny after having invited a party in minority to form a government, thereby obstructing the NDA to come to power. During the NDA regime too, there was the case of Arunachal Pradesh where the Governor played a very dubious role in the formulation of the government after Gegong Apang switched sides.

According to senior political expert Subrot Kamal Dutta, “The past 20 years have seen people with political background being nominated to the Governor’s post, which has definitely declined its dignity. Even the Supreme Court has come down heavily on the Centre over the conduct of the Bihar and Jharkhand governors in the past. The post of the Governor has to be apolitical, and only people with relevant judicial and constitutional experience should be nominated. Impetus has to be on each individual to keep the post as apolitical as possible.” Taking a fair view on the ongoing turmoil in Karnataka, one could contest that Governor Bharadwaj was only carrying out his duties by acting to ensure that an individual under scanner for alleged acts of corruption to the tune of Rs.5 billion does not stay at the helm of affairs. After all, the constitution legally provides for the Governor to act against corruption, which is what Bharadwaj did. Even if we were to believe that his actions were not influenced by the Congress, his stand invited the ire of the BJP who blamed Bharadwaj of acting hastily only to divert the nation’s attention from reports of the CWG and 2G scams that the UPA was reeling under. Either way, the Governor’s actions, even if justified, stand to lose credibility on account of political gimmicks, the kinds unlikely to end anytime soon.


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

Monday, March 18, 2013

For Them, it’s About Social Sustainability

By Betting big on CSR, ITC has Once Again shown What It Takes to be one of the Fastest Growing Companies in India.

When Y. C. Deveshwar took over in 1996, ITC was experiencing an unmatchable mix of challenges. Its cigarette business had been slapped with an excise duty demand of Rs.8.03 billion, its diversification into hotels and paperboards had still not bore fruits, its forays into financial services, edible oils and international trading too were still incurring losses. In short, the company was facing a severe criticism, both from its investors and industry experts.

Cut to today, and things have completely changed for this FMCG giant. Though severe taxation and regulatory environment for cigarettes in India continue to be a cause for concern, innovation and an unrelenting consumer focus have enabled ITC to deliver a splendid performance to make its way to this year edition of B&E’s Fastest Growing Companies in India. In fact, initiatives across the brand portfolio, in terms of modernisation of cigarette packs and introduction of new brands and variants, helped ITC declare a strong topline growth of 16.3% (y-o-y) to Rs.181.53 billion in FY2010 from Rs.156.11 in FY2009. Needless to say the major contribution came from the cigarette business that reported a 14.3% rise in gross revenues, from Rs.151.15 billion in FY2009 to Rs.172.83 billion in FY2010. Earnings too grew by a robust 27% (y-o-y) to Rs.40.61 billion in FY2010 from Rs.32.63 billion in FY2009.


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

Monday, March 11, 2013

“Not Much Extra Cost for Green Buildings”

Navin Raheja, MD, Raheja Developers shares the Complexities of The Sector

Raheja Developers is among the biggest green building developers in NCR region with investments worth Rs.10 billion tied up. Navin Raheja, MD, shares with Mona Mehta his experiences venturing into this sunrise sector 

B&E: How do cost premiums stand for green buildings viz-a-viz conventional ones and between residential and commercial, which have better returns?
Navin Raheja (NR):
When the green building movement first started nearly a decade ago, the cost increase for projects was around 10 to 15 percent but today in reality, it is around 2-4% but cannot be passed onto occupiers in a competitive market like India. Secondly, there's lack of information on green building systems with too much dependency on select few consultants. Thirdly, there's difficulty in assessment of costs and requirements for compliance causing costly delays. The per sq.ft returns on commercial development are the highest as they are leased while residential are sold out at competitive prices resulting in negligible returns.

B&E: What are the long term returns in green buildings and can they break even within 3-5 years of operations?
NR:
Green buildings reduce carbon emissions by about 40% compared to conventional buildings. The break even in case of a green building commercial project can occur within 3-5 years time of starting operations due to savings in energy which could go upto 80% & water between 25 to 40%. A green building can also earn Carbon Credits, approximately Rs.7 to 8 million annually for 10 years, for every 2 lakhs sq ft of conditioned area


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


Thursday, March 7, 2013

INTERVIEW: THE AMBASSADOR OF GEORGIA

B&E: Keeping in mind the current scenario, do you think that Russia will ever agree for negotiations?
ZK:
Georgia is ready to talk with Russia, but only under one condition – full respect of Georgian territorial integrity and sovereignty. Knowing the position of current Russian leadership, we have little hope. This is because Russian leaders, namely Prime Minister Putin and President Medvedev, have expressed unwillingness to discuss, enter into a relationship and negotiate with the present Georgian leadership. This once again confers that the objective of Russian incursion to Georgia is not only meant to occupy but also reverse the political regime of our nation. Regarding the Russian military presence in the region, it does concern us and seems to be a threat. But I would say it is not only a threat for Georgia but also another attempt of Russia to show the rest of the world that they are running the show in Caucasus region. It is also a demonstration that Russia is averse to peaceful political solutions of any problem arising in the region.

B&E: Is it the reason why you wish to join NATO? And do you think NATO can help you?
ZK:
Joining NATO had been a long term objective for Georgia. It is not something new. Referendums held in Georgia a few years ago demonstrated that more than 70% of the population was supporting Georgia’s aspiration to join NATO. Needless to say that becoming a member of NATO will immediately make us feel that we are a part of the large Euro-Atlantic family. And it would also make us feel safer. By the way, one more reason for Russia to wage war on us in the year 2008 was that Georgia and Ukraine were denied NATO membership because of Membership Action Plan (MAP). Russia took it as a signal that the West is not supporting Georgia any more. At least, the West will not militarily support Georgia if Russia attacks. And this is what unfortunately happened during the 2008 war. But I repeat, we never wanted to join NATO with a view of initiating any military actions to recover the territories. So, Russia perceived European countries joining NATO as their military weakness – especially members of the NATO. Till date, Georgians continue to support our endeavour to join NATO. We will eventually become a member of the NATO family. And thus, we are continuously undertaking major reforms to be compliant to meet the necessary demands of NATO. For example, Georgia participated in the peace keeping operations in Afghanistan with an extended military unit. The Day when all the members of NATO will consider Georgia ready to join, we will be given the green signal.

B&E: You cannot win a war with Russia. Do you have alternative ways to secure that 30% land?
ZK:
You are absolutely correct. One has to be a fool to think that Russia can be defeated militarily by any of its neighbours. Also, 2008 war demonstrated the weaker sides, which are quite important. The alternative is very simple – peaceful, diplomatic ways. You can always achieve what you aim for. It only takes more time. For example, you saw Russia retreating from Afghanistan; you have also seen reunification of Germany. However, we are dedicated to find solutions of long term disputes peacefully in order to recover those territories.


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