Friday, October 19, 2012

Blood flowed thinner...

An empire torn apart by acrimony and distrust

They have been successful through thick and thin, but the break ups and controversies in their family has been quite embarassing for the Birlas. The fateful year was 1986 when they finally decided to split the Rs.25 billion worth Birla group (in 1983) into six groups. Then trouble knocked hard at their door in 2004 in the form of the disconcerting billion-dollar hullabaloo surrounding Priyamvada Birla’s (widow of M.P. Birla) will. The will gave an outsider – Rajendra S. Lodha the control over the stakes in several M. P. Birla-owned companies. The Birla clan led by B. K. Birla decided to fight together as ‘one’ against their common enemy. R. S. Lodha’s sudden demise in London last year, but Lodha’s sons are now in the fray. It was highly unfortunate that G. D. Birla’s iconic legacy had to move in this direction.


Source : IIPM Editorial, 2012.

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Thursday, October 18, 2012

Many feast to manifesto!!!

The disconnect between reality and manifestos continues...

April 11, 2009: Samajwadi Party (SP) released its ‘concave’ election manifesto. The party promises to remove computers, ban English education, ban machineries in agriculture and also put a ban on share trading. What the party forgot is that it is the service sector that is the largest contributor to GDP and the largest employer as well. And the most noteworthy point is that the service sector is only able to churn out such huge revenues because of English and IT services. If by any chance this dream of SP is realised, then India may not only see drop in foreign revenues but a huge increase in unemployment rate as well. Ironically for these anti-English campaigners, let us remind them that even their website that caters to huge vote bank is written in English itself!

Congress also stressed on economic policies that will aim to achieve inclusive growth and low inflation if voted back to power. Ironically Congress is promising to do something they could have done in last five years. Given the current fiscal and economic condition, the whole manifesto seems more like a fairy tale. The BJP is also not far behind in this vote-luring exercise, and it seems that they are determined about not learning from past mistakes. Or else why on the earth would they promise to rebuild Ram temple and promote hinduvta even when this theme has been counter productive in fetching votes for them? Surprisingly, not even a single party’s manifesto talked about the current economic condition and how would they tackle the same. It seems that amidst their political fights they have found economic matter to be too light to find space in their manifesto.


Source : IIPM Editorial, 2012.

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Wednesday, October 17, 2012

Yo! Barack can’t get it up!

History shows Dutch have been more successful than Americans

The Brits couldn’t do it, Soviets got it premature, the US couldn’t even get it up, while the Dutch seem to be having a field run. We mean the Afghan strategy! Our suggestive innuendos aside, US led allied forces in the inhospitable terrain of Afghanistan can’t seem to get their counter terrorism strategy up and running.

Being the hub of Osama Bin Laden and epicenter of world terror, the sheer unfamiliarity of the land despite years of yankee presence in Afghan is hitting the Obama administration too hard. While Hameed Karzai wants Obama out of Afghanistan, now Obama is returning the sentiment, giving hints for him to be nudged out. But wait, all is not lost. There is a ray of hope, specifically in the central province of Uruzgan, vindicated by the Dutch Army controlling the region.


Source : IIPM Editorial, 2012.

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Tuesday, October 16, 2012

Why Indians Will Hate Obama

 Very soon, you might have Prakash Karat and fellow comrades crooning, ‘I told you so’, as the Indian media slams Barack Obama and Uncle Sam for once again ‘tilting against’ India. You can already hear murmurs of protest as protectionism gathers momentum in America and young Indians find their dream jobs disappearing in the United States. You must have read some pundits suggest how India must adopt tit for tat measures by denying contracts to companies like Boeing. By now, many defense pundits, too, have expressed shock at Uncle Sam denying some key technologies to the Indian armed forces. Then there are those hawks who are now convinced that America is absolutely not interested in genuinely helping India

when it comes to battling cross border terrorism. And rest assured, the Obama administration will take many decisions and make many choices that will anger, dismay and even outrage urban Indians who haven’t stopped fantasizing about the emerging strategic partnership between India and America. For this breed of Indians, Uncle Sam would follow up the nuclear deal by doing everything that is anti-Pakistan and anti-China if they have a conflict of interest with India. Sadly such delusions always get shattered. They will inevitably get shattered by end of this year. So after the Indo-US euphoria of the last few years, get prepared for a phase of disappointment and rage at the perfidy of Uncle Sam. And don’t be surprised if Obama becomes one of the most criticized personalities in Indian media (in any case, even his honeymoon with the American media is on the verge of collapsing).

The brutal fact is: both the media and the middle class Indians will be wrong when they rail at Obama and his policies. The reason behind that is another brutal fact: India stills behaves childishly and naively when it comes to the pursuit of national interests, foreign policy and geo-poltics. No wonder, the discourse on foreign policy in India oscillates between triumphant and childish optimism and naïve pessimism. When India signed the nuclear deal, optimism reached a feverish pitch; when a few Indians don’t get American jobs, the pessimism plunges into depths of despair. That is because most Indians confuse between cold blooded pursuit of national interests and the feel good buzz around emotional bonding. There will always be some occasions when America and India’s national interests do not converge when it comes to dealing with Pakistan. That does not make America anti-Indian. There will always be some occasions when the head will rule over the heart and Uncle Sam will choose China over India (China happens to literally propping up the US economy at the moment by sending surplus dollars to America). That doesn’t make America anti-Indian. There will always be some occasions when political compulsions in America will hurt India Inc. Again, that doesn’t make America anti-Indian. But beyond these simple facts, there is another brutal fact that would hurt many Indians. We tend to think that India is more important than it actually is. Sample this fact: Obama''s Secretary of State Hillary Clinton has visited Tokyo, Seoul and Beijing soon after taking over. New Delhi was never on the agenda. And who visited India?


Source : IIPM Editorial, 2012.

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Fed-up with Satyam? Be ready for more!

Radical restructuring of SEBI is extremely imperative, say Pathikrit Payne & Sray Agarwal of B&E

Is it becoming a unique Indian trend to first shower companies with all kinds of fancy awards only to be egged in the face in a few years’ time after all the wrong doings, malpractices and manipulation that went unheard and unseen in those companies? While the Satyam fiasco suddenly awakened the investors’ community about the intriguing aspect of how lectures on corporate governance & best practices and fudging of accounts can go hand in hand, the matter of the fact is that Satyam is not a one-time case. In1999, two sister software companies namely, Pentasoft Technologies Ltd and Pentamedia Graphics Ltd. had a phoenix like rise and a subsequent fall faster than nine-pins thanks to a mindless expansion spree and attempts of diversifying into real-estates and multiplexes while the core business of software development got compromised. Their promoter V. Chandrasekaran was reported to be associated with broker Ketan Parekh in artificially raising the share prices.

So, does the model sound familiar? If not, then next in the line is the Dinesh Dalmia who promoted DSQ Software Limited. In the year 2000, CBI arrested him for his involvement in a stocks scam of Rs. 5.95 billion and for his attempts to make quick money through unallotted shares worth Rs. 13 million (which were not listed on any stock exchange). He also cooked his books in the typical Ramlinga Raju style. Sadly, corporate India is littered with cases of similar frauds. Just like Satyam, the South India-based IT Company Silverline Technologies was also vested upon with lots of awards and Ravi Subramanian, Chairman of Silverline Technologies was even tagged as the next Narayana Murthy in the making. It was ranked among the top five IT companies in India. Akin to Satyam, Silverline took-over Seranova, but didn’t have money to pay up for the deal. And remember all these were happening just under the nose of SEBI. While Dalmia is still fighting it out to get his bail approved, Silverline is back in business and has been re-listed on BSE.


Source : IIPM Editorial, 2012.

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Monday, October 15, 2012

Global best practices

Safexpress will need to proactively align with global best practices, says Pawan Chabra of B&E

If one goes by the numbers, the future of logistics in India certainly looks dazzling. In fact, according to a study done by Cushman & Wakefield, the Indian logistics industry is anticipated to grow at a healthy rate of 15-20% per annum (way above the average growth rate of 7-10% that the sector have had between 2002 and 2007) to reach a whopping $385 billion by 2015. According to a KPMG report, India’s spend on logistics activities is equivalent to 13% of its GDP, compared to less than 10% in almost all the developed nations. But then this necessarily doesn’t mean big business! The key reason for this astonishing big size is relatively higher level of inefficiencies in the system, with lower average transportaion speeds, higher turnaround times at ports and high costs of administrative delays. Players like Safexpress will need to take the lead in correcting this anomaly.

Moreover, the Indian logistics industry is dominated by unorganised players. Transporters with fleets smaller than five trucks account for over 75% of the total trucks owned and operated in India and make up 80% of revenues. Even the freight forwarding segment comprises thousands of small customs brokers and clearing & forwarding agents, who just cater to local cargo requirements. So, considering this, the biggest challenge for organised players like Safexpress will be to take the growth forward. In fact, “one can even see a major phase of consolidation in the sector in the coming times,” avers Pradhan.

No doubt Safexpress has generated a decent level of loyalty and trust towards the brand in the past few years, but with the sudden flurry of international behemoths like FedEx, DHL, TNT, et al, and considering their edge over domestic players, particularly because of their big pockets, players like Safexpress will definitely find it hard to retain clients.


Source : IIPM Editorial, 2012.

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Saturday, October 13, 2012

BARACK OBAMA: PRESENTS THE NEW BUDGET

So says Obama, who spares nobody in his attempt to save the world
In 2009, the same is estimated by IMF to reach a lower 12.20%! Compare this to say a country like India. In 1990, India’s savings rate was 23%, in 2004 it reached 27.6%, and in 2008, the same touched a mind numbing 40%. China has already touched 50% in this decade!!!

Is there a learning out here? “For too long, our budget has not told the whole truth about how precious tax dollars are spent,” Obama quoted while presenting the budget, “Large sums have been left off the books, including the true cost of fighting in Iraq and Afghanistan. And that kind of dishonest accounting is not how you run your family budgets at home. It’s not how your government should run its budgets either.” Obama, we hope your citizens got your irritation with them quite clearly...


Source : IIPM Editorial, 2012.

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