Friday, May 31, 2013

Avoiding the Armageddon

Can the UN-sponsored Arms Trade Treaty check illegal gun running?

The illegal trade of arms internationally, and the impunity with which gun-running has proliferated in many parts of the world, poses a serious threat to global peace and harmony. It is estimated that around half a million people lose their lives annually due to armed violence. International bodies have lamented this deplorable state of affairs, decrying the fact that there are “more international laws regulating the trade of bananas than weapons!” Under such circumstances, the Arms Trade Treaty (ATT) that has been adopted by the UN General Assembly on April 02, 2013, has the potential to offer some succour. If implemented in right earnest, it could tighten the noose around outlaw militias, who show no compunction in running their operations in defiance of international law.

Will the treaty come good on its promise? The stakes are high for the world leaders, particularly the permanent members of UN Security Council. It took them seven long years of diplomacy, lobbying and arm twisting to bring the treaty on the table. Surely, they would not like all the diplomatic jousting to end up as a smoke-and-mirrors exercise.

The value of the global arms trade is estimated to be worth $70 billion per annum. But rampant abuse of the trade is particularly vicious in some parts of the world. Africa, alone, loses 18 billion per annum due to armed violence. According to an estimate by Oxfam (2007), the continent’s economy has taken a crippling blow on account of bootlegging in arms and its attendant consequences, shrinking by 15 per cent annually. But the anathema is not endemic to Africa only. According to a well regarded 2012 Routledge Studies in Peace and Conflict Resolution publication, "the relative importance of diversion or misuse of officially authorised transfers, compared to international entirely illegal black market trafficking has been thoroughly confirmed.”

The mystery of one in seven of the 7-8 million annually manufactured weapons being stolen without a clue about the offender’s whereabouts is still dumfounding for the authorities!


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

Thursday, May 30, 2013

Raisina Hills to the rescue?

A besieged Congress-led UPA seeking to clear crucial pending bills may opt in for the ordinance route, reports Pramod Kumar

When in trouble, seek divine intervention. That is what UPA-2 appears to be doing. Besieged under a slew of scams that have stalled the Parliament in the last few sessions, the government is battling its ghosts and wondering how best to go about introducing various important bills that are pending because they cannot be introduced on the floor of the house.

In their endeavour, the Congress is tacitly dependent upon the man sitting on the Raisina Hills, the incumbent of the Rashtrapati Bhavan, Pranab Mukerjee, to bail them out with a series of ordinances which UPA is now set to introduce, having failed to win parliamentary approval.

The situation is on a razor’s edge. The BJP-led opposition parties are hell bent on blunting any move perceived to be electorally motivated in favour of the ruling party – and that includes a clutch of crucial bills which the government now plans to introduce as ordinances.

Leader of Opposition Sushma Swaraj told TSI, "Our party is keen to expose the Sonia-Manmohan government for what it is – a corruption-laden, incompetent  dispensation. Merely introducing bills and glossing over uncomfortable facts is not enough. We want a debate on floor of the House."

According to her, the litany of opposition grievances is pretty long and so far the government has not come up with any cogent answers. It is this stonewalling by the opposition parties which led to the logjam in the Parliament, as a result of which important bills have been put on the waiting list. The fact that all trade unions sinking their differences decided to protest against the government’s economic policies is a telling comment on the UPA government, she says.

But insiders in the Congress believe that if the Budget Session of the Parliament also goes the way of other sessions – adjourned more often than deliberated – it suits the government because a lot of things do not come on record. Statements issued out of the house or on TV channels may have entertainment value but not very much else.
 
Union Parliamentary Affairs Minister Kamal Nath agrees that the current monsoon session of Parliament is going to be crucial. (See interview) There are 55 bills, 13 non-legislative financial bills and 16 new legislation which are waiting to be introduced. Nath says he is hopeful of cooperation with the opposition parties, which is why important bills like Crime Against Women, Land Acquisition and Food Security are likely to be introduced within the first fortnight of the monsoon session.

Congress sources believe this session is going to be as stormy as the last, given the number of potentially ticklish subjects on the table: the Westland Helicopter scam, Afzal Guru’s hanging and rampant inflation, to name just three.

But the government is mentally prepared now: if critical bills like Food Security, Lokpal, Job Reservations etc are not passed in Parliament, they are quite prepared to to sent it to the Rashtrapati Bhavan for endorsement. Even if it is for the sake of tokenism or appearances, the UPA government would be seen to be making moves in that direction and go to elections in 2014 on those grounds seeking a mandate.

Says SP’s Ram Gopal Yadav: "The problems are a creation of the Congress itself. It is surprising that despite renowned economists at the helm, Manmohan Singh and Pranab Mukerjee, things have gone so wrong. Industrial production has come down, inflation is out of control, people are buying Chinese goods instead of Indian and the UPA government is shameless enough to say that economic reforms have been given a boost as compared to the NDA regime."

BJP’s maverick Ram Jethmalani credits the UPA government with one major gain during its two tenures: the untrammeled growth of black money in the economy. He says this is a government of multiple scams, often involving family members of VIPs. "It is no surprise that bills are pending. History will assess the Manmohan Singh government to be the most corrupt ever. Will people still vote for Sonia, that is a million-dollar question,’’ he says.

Some of these charges may well stick. Manmohan Singh, during Congress’s Chintin Shivir in Jaipur recently compared the progress of his government with the NDA’s and also added that the benefits provided by this government is not reaching the masses. That, some people in the party quipped, was the job assigned to Singh’s government in the first place.

Which is why Rahul Gandhi was given charge as Congress vice-president and his role confined to the party organisation. Party strategists believe that Rahul should be seen as being instrumental in introducing bills close to minority causes. The Congress scion has held three important meetings with Manmohan Singh and Finance Minister P Chidambaram  to hammer out these issues and has impressed upon the government to launch a full-fledged advertisement campaign highlighting the gains of the UPA government – cautioning at the same time against NDA’s Indian Shining type of campaign. Minister of State for Information and Broadcasting Manish Tiwari has been put in charge of this Congress blitzkrieg.

All this has put Kamal Nath in a jam. He has sounded the party high command on the most vexed of all his problems: if so many bills are already pending, how can the government introduce fresh bills on the floor of the house?

Congress leaders indicate that a special committee under the chairmanship of Congress think tank member Sam Pitroda will assess just how the party will proceed to change these bills into ordinances. This panel could also well decide the Congress agenda in the crucial months ahead leading upto General Elections 2014.


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

ExecutiveMBA

Tuesday, May 28, 2013

Why have committees at all...

...if the government has no plans to follow their recommendations?

The 1992-93 Mumbai riots timeline is a good place to understand the government's attitude towards commissioned reports. Acting in uber haste, the government had then set up the Justice BN Srikrishna Commission. The objective? To show that the government really meant business. Cut to the ending months of the commission's enquiry, and Justice Srikrishna himself reportedly joked that his report could perchance be thrown into the sea during Ganesh Chaturthi, a key festival in Mumbai. Reports now confirm that his conjecture could have been close to the truth. The commission's recommendations were either rejected or accepted as per one's convenience. None of the governments since the Mumbai riots have had the gumption to implement the commission's recommendations, which have been considered to be some of the most insightful.

Putting on hold recommendation from various national committees is almost a norm in India. For instance, various administrative reform reports (presented by Administrative Reforms Commission) with respect to reforms are lying idle since the last 12 years. The reports suggest transformative reforms in Indian administration, taking a cue from the best practices around the world.

The 2009 Yashpal Committee report on Renovation and Rejuvenation of Higher Education gave brilliant suggestions to restructure the Indian education system. One of the critical suggestions applauded by both academia and industry was disbanding UGC and AICTE, who have a history of being corrupt and shamefully incompetent with respect to setting education standards. Till date, this has not been done, despite promises to the contrary.

In some cases, even accepted reports are not implemented due to plain financial reasons. For instance, recommendations of the 2001 Nanjundappa Committee (a high-powered committee on removal of regional imbalances in Karnataka), for example, could not be implemented in totality or even in a significant minority for many years because, as one Chief Minister put it, there were not enough finances to implement the recommendations.

Beside the political cat-fight with respect to implementing reports, especially those related to economic development or industrial reforms, there is one other reason why these suggestions are not being implemented – and that is the complexity of the reports and their presentation. Very few policy makers in India have formal academic backgrounds in economics or finance to have the capacity or competence to understand what the intellectuals authoring the reports are alluding to. In a related story, one of our sister magazines (Business & Economy) had documented that while administrations like those in the US have ministers and bureaucrats who are formally educated with advanced degrees for their jobs, Indian ministers were simply political appointees than chosen due to their competence. This needs to change immediately.


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

Monday, May 27, 2013

Responsible policing

Behavioural training of police can refurbish their image

When the Indian public life is riddled with corruption, scam, crime and other ghoulish social manifestations; a recent incident with my colleague forced me to wonder whether every stakeholder in the paradigm is worth demonizing! My colleague and his wife went for a holiday to Trivandrum via Cochin. They reached there by bus from Cochin at 11:00 at night only to find that all budget hotels were occupied. Despite visit to several hotels, they failed to find one that had rooms vacant for them. After their visit to probably the last hotel in that area, they saw a police van standing next to their cab. Drawing inferences from their past experiences, they knew that they were heading for trouble. He almost imagined how these police would take them to the police station, harass with all sorts of nonsense and then draw money from them. But on the contrary, the police team was in fact eager to search hotel for them at that wee hours! And the gesture was extended by none other than Assistant Commissioner of Kerala Police who was patrolling the area at that time. He then assisted them to a compatible hotel and arranged an accommodation and further offered them an accommodation at police club the next day. What was the icing on cake was that he called up the next afternoon and gave his advice on the places of interest in the city. This is seriously a rare 'encounter' one can ever have especially if one is from a city like Delhi. Cases of police misbehaving with civilians are plenty across the nation. In a recent case reported from Jalpaiguri, West Bengal, 2 ITBP personnel molested the wife of a shop-owner during a search operation.

 It is my sincere conviction that this one man is not in isolation to experience but a flag bearer of a changing police attitude across the country. The Shipra Path police station of Jaipur being recognized as the best Asian police station, the mission of Tamil Nadu police of ‘Friends of police Movement’, Mumbai Police’s determination to protect, particularly, the weak and downtrodden et al. are some of the genuine pointers towards the same.

After recent cases of heinous crimes that rocked the nation, there are certain police forces in India which have already taken steps to curb crimes committed on women and children. It was way back in 1987, when UNICEF proposed a project in training of the force for better security of women and children. A very few police forces at that time came forward to comply with. However, Mr. Ajai Kumar Singh of Bangalore Police was the only exception where the programme was implemented. An outlay of Rs.50 lakh per annum is spent annually by police force in Karnataka for training of its police with perceptible positive results. Another welcome step was taken by the National Human Rights Commission in association with IGNOU in 2011 by launching a 5-days online training programme on creating mass awareness of human rights for police personnel.


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

Saturday, May 25, 2013

Fiona Apple to Her Fan

Back in 2000, a teenage Fiona Apple fan named Bill Magee decided to approach the singer after a gig and hand her a letter. In it, the 16-year-old spoke of his school's gay-straight alliance — of which he was a member — and asked if she could possibly reply with a sentence or two in its support. The next week, the following handwritten letter was delivered by FedEx to Bill's house.

February, 2000

Hello Bill,

I got your letter a few days ago, but this is the first chance I've had to sit down and write (it's my day off)
Of course, I'd love to help — sign me up. As far as a few sentences go, here's what I've got — I hope it's OK:
It's hard to conjure up some new profound way of commenting on this issue — I'm so tired of it being an issue at all, and I suppose I'm lucky, because I see the truth so clearly. All I know is I want my friends to be good people, and when my friends fall in love, I want them to fall in love with other good people.
How can you go wrong with two people in love? If a Good boy loves a good girl, good. If a good boy loves another good boy, good. And if a good girl loves the goodness in good boys and good girls, then all you have is more goodness, and goodness has nothing to do with sexual orientation.
A person who loves is a righteous person, and if someone has the ability and desire to show love to another — to someone willing to receive it, then for goodness' sake, let them do it. Hate has no place in the equation; there is no function for it to perform. Love is love, and there will never be too much.


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

Friday, May 24, 2013

Delhi's unsafe elders

The number of old people who are murdered everyday in India represents a rising and disturbing graph. Pratham Dwivedi probes deeper

Old is not always gold. In 2010, 3,339 persons above the age of 50 were murdered in India, according to the National Crime Records Bureau (NCRB). The figure increased to 3,489 by 2011. In Delhi, not the safest place for old people to live, 35 of this age group were done to death during the same period.

In 2011, the Delhi Police launched a scheme under which thousands of old residents were registered with their senior citizen cell. They were in turn provided  with identity cards bearing close personal details.

But clearly the problem is too big to be tackled easily. On August, 2012, RK Bararu, 75, former official of  the Information and Broadcasting Ministry and his wife Durga Devi, 74, were killed at their residence in East Delhi's Shakarpur. As the police investigation showed, the entry was friendly and the motive was robbery. The victims' throats were slit and the rooms ransacked.

Mathew Cherian, Chief Executive Officer of Helpage India, an NGO working for senior citizens says 50 per cent of the perpetrators of violence against senior citizens are close family members.

According to a Helpage India report released in 2012, primary abusers against senior citizens were their sons in 56 per cent cases, followed by the daughter-in-law with 23 per cent.

Mathew says the police-public trust deficit here is critical. “A big reason for citizens' insecurities is the trust deficit between them and the lower level of police. They believe the cops will pass on critical information to criminals. This trust deficit has to be reduced.”

In March, 2012, a 66-year-old man died after he was allegedly pushed and kicked by two police constables at the Dhaula Kuan police station. The deceased Anil Kumar was returning from a party with his son when his car broke down near the police station.


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

Friday, May 10, 2013

From class banking to mass banking

On July 19, 1969, 14 private banks were nationalised in India. Over four decades later, the ruling Congress party continues to bask in the legacy of Indira Gandhi and her crucial decision that changed banking in India
The decision by the central government to nationalise 14 private sector banks in July 1969 is often cited as a defining moment for India. Arguably the most important economic decision taken by any Indian government since 1947, its impact – political, social and economic – is something that even the reforms of 1991 cannot compare to. In fact, it was because of this decision that Indian banks emerged relatively unharmed from the recent global financial crisis.

The road to this social control of banks, however, wasn’t constructed overnight. Although the idea of social control of banks emerged in 1967, the Economic Programme Committee of the All India Congress Committee (AICC) in its report in 1948 had already strongly recommended that banking and insurance should be nationalised as part of a total package for establishing “a just social order”. The matter, however, rested for a decade and a half until the political climate called for it.

The reasons behind this decision, by the then Prime Minister Indira Gandhi, were dictated both by economics and politics. In January 1966, when Indira Gandhi ascended to power with the help of the ‘Syndicate’ of older and more established Congress leaders (K. Kamaraj, S. Nijalingappa, Nilam Sanjiva Reddy, Atulya Ghosh, Srinivas Mallya, S. K. Patil among others), India was besieged by several problems.

Severe droughts had brought down the crop yield, prices had shot up by 16% and US food aid was heavily dictated by geopolitics. A foreign exchange crisis was brewing with the International Monetary Fund (IMF) demanding that India devalue its currency. On a separate front, the country flared up with identity politics in Punjab and Haryana, inter-state feuds between Karnataka and Maharashtra over the newly independent Goa, anti-Hindi agitation in Tamil Nadu and tribal troubles threatening peace in the north eastern states


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

Tuesday, May 7, 2013

Can Naresh Goyal turn around Jet Airways like he did a decade back?

The airline industry does attract colourful figures like the media-shy Naresh Goyal. It would seem that the smell of gasoline encourages more emotions than economic decisions. Bleeding bottomlines, a confused operational model, a mixed fleet and an unforgiving environment. How can Goyal rescue a company in such turbulence?

It’s impossible to capture Naresh Goyal’s style of running his airline in a simple phrase. Rather, if there’s any one who loves dirty little business secrets, this czar of Indian aviation is right up there. We are not referring to his ownership of 18 lesser-known companies, or even how he manages the cash flow at the Isle of Man-based Tail Winds Limited (which owns a 79.99% stake in Jet). It’s his decision-making style that keeps people guessing which foot he will put forward next. If there is a CEO in India Inc. who can fire 2,000 employees and recall them in a day by politely blaming his management in public for keeping him in the dark, it is the very diplomatic Goyal (in October 2008). If there is a businessman who can dare to risk souring a two decade-long relationship with a supplier as powerful as Boeing by placing a $3 billion-worth order for 15 Airbus A330s only because Boeing couldn’t assure ‘immediate’ delivery of the aircraft he’d wanted, it is the impatient Goyal. ‘Gut-feel’ is the word that explains how he takes decisions at Jet. Till date, his intuition has led him down the right lane in a market where the honours are unevenly divided. But the common sight of heavy losses at Jet in recent quarters, and the revelation that the airline had been trying to save Rs.350 million by delaying service tax payments (in March this year) makes many believers doubt this fact.

But he isn’t new to having his back to the wall. A decade back, Goyal had come to face with a similar situation. An airline bleeding for four consecutive years (losses totalling Rs.5.25 billion between FY1999-2000 and FY2002-03) in an industry that had only bad news (losses of airlines in India during the period amounted to Rs.25.51 billion) made critics question the longevity of Jet. But Goyal brought his airline back into the black (Jet made profits of Rs.10.35 billion in the four years leading to FY2006-07). He did well by paying attention to cost-cutting and better utilisation of Jet’s fleet – between FY2002-03 & FY2006-07, Jet’s annual expenditure per aircraft dropped 41.13% to Rs.971.41 million and its load factor increased 39.21% to 71%.

The present situation is in part a reflection of what occurred ten years back. During the past four years, Jet’s losses have risen to Rs.11.14 billion (with an accumulated loss of Rs.17.3 billion) and the industry is struggling for life (losses of Rs.244.68 billion). The challenge for Goyal is clear – save the airline. Problem is – this time, the numbers read worse. That the company has reported negative earnings of Rs.10.62 billion in just the past four quarters (leading to Q3, FY2011-12) is only a quick summary of the trouble tale. Over the years, competition has intensified implying a division of the revenue pie, Jet’s market share has plummeted (from 48.7% in 2002 to 28.8% today), swinging moods in EU and US markets haven’t helped Jet’s international operations (which contributes to 55% of its topline; during Q3, FY2011-12), ATF prices have skyrocketed (by 235.5% in the past eight years), a weakening rupee has made aircraft-leasing, en route navigation costs and fuel more expensive and recent actions by the fuel supplying companies and the IT department have only made living tougher for Jet. What should Goyal do?


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

Underestimating the Indian Voter Again and Again and...

The so called mainstream media is at it again – making a fool of itself and displaying unending contempt for the native intelligence of the Indian voter. Once again, we are being told by pundits and sycophantic and servile courtiers masquerading as columnists that the Congress and the UPA have got their mojo back and look set to win the Lok Sabha elections due in 2014. The reasons offered are many. For one, the BJP is in a mess and has failed to capitalize on the serial scams haunting the Congress since 2010. Then again, the voter is wary of a rag tag Third or Fourth Front government propped up by outside support and will reluctantly vote again for the Congress. The most servile are writing about how Rahul Gandhi and his computer baba log are drawing up a “fool” proof strategy to woo voters. The pink papers have been screaming hoarse about the return of P. Chidambaram as the Finance Minister and how he will get the economy back on a high growth path. A related part of this delusional narrative is hailing the decision to allow FDI in retail and capping the use of subsidized LPG cylinders at six a year as proof that the UPA government is determined to push for “reforms”. Of course, the game changer is supposed to be what Jairam Ramesh so cutely described as “Aapka paisa, Aapke Haath”. Yes, I am talking about the decision to resort to cash transfer of subsidies to beneficiaries using the Aadhar scheme. So powerful is the alleged impact of this game changing decision that even mainstream media professionals who are critical of the Congress and the Gandhi dynasty are complaining that the ruling party is resorting to bribing the voters to win another election. In all of this, there seems to be a near unanimity that the Congress will pull off yet another stunning victory. They draw parallels with 2009 when the NREGA scheme was used as a bribe to the Indian voters to win elections. Of course, there are many who are still saying that the Indian voter is still so angry, so outraged and so pissed off with the corruption, hubris and arrogance of this government that they are determined to vote against the Congress. But such voices have been drowned in the cacophony of predicting yet another Congress victory.

I can only marvel and laugh at such malarkey and nonsense. For ages, the New Delhi-based mainstream media has utterly failed to read the intentions of the Indian voter. It has a habit of getting it wrong almost every time. And yet, it persists in such hogwash. Allow me to quote columnist Tavleen Singh who was a young reporter in 1977 when Indira Gandhi lifted the Emergency and called for elections. She writes:

“It became clear that Mrs.Gandhi wanted to restore her image as a democratic leader and this could only happen if the coming elections were seen to be fair. Within days of the elections being announced, most of the opposition leaders who were still in jail were released. They were no longer worth keeping in jail since nobody, not even the opposition leaders themselves, thought in January 1977 that Mrs.Gandhi had the slightest chance of losing this election. Every report, even from her own intelligence agencies, indicated that she might lose a few seats; but that there was no chance of a total defeat.”

That was 35 years ago. Since then, in election after election, the mainstream media has almost always forecasted it wrong – the only notable exception being 1984, when Rajiv Gandhi won a historic mandate after the assassination of Indira Gandhi.

It would be easy to conclude that most of the mainstream media is blindly and abjectly supportive of the Congress and the Gandhi dynasty when it comes to forecasting election results. A hell of a lot of our mainstream media is guilty of that. But the bigger crime is its failure to read voter intentions. Just go back to the spring of 2004 and you will realize what I am talking about. Let me give you just one example. The much talked about research agency AC Nielsen was commissioned by NDTV and The Indian Express to conduct an opinion poll and make a forecast for the 2004 Lok Sabha elections. In a largest of its kind survey, around 40,000 respondents were asked about their voting intentions. The forecast was that the then ruling NDA would win between 287 to 307 seats and rule India for another five years. The BJP was projected to win around 200 seats while the Congress was projected to win around 100 seats. Let me give you one more example from the same year when assembly elections were held along with Lok Sabha elections in Andhra Pradesh. A prestigious survey that featured in the Outlook magazine had the following forecast for the state. The then ruling Telugu Desam was given around 165 seats while the Congress and its allies were given around 125 seats. So NDTV said in 2004 that the NDA would rule India for another five years and Outlook said in 2004 that Chandrababu Naidu and his party would rule Andhra Pradesh for another five years. We all know what the actual results were.


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

Monday, May 6, 2013

INDIA-EU FTA

Although India and the European Union have been engaged in negotiations on a free trade agreement since June 2007, a deal doesn’t seems likely to be coming anytime soon. What’s stopping them from arriving at a consensus?

Further, EU has been quite insistent on its requirement for ‘TRIPS-plus’ intellectual property protection which exceeds the standards imposed by the WTO’s agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). If this happens, India’s pharmaceutical sector – which is known for providing cheap life saving drugs to many countries of the third world – will almost crumble. The reports that have come out till now suggest that EU is pressurising the Indian government to extend the period of patents beyond 20 years; data exclusivity which delays the entry of a generic medicine in a market by 10-15 years even after the expiry of a patent; and the patent-registration linkage, which prevents the registration of a generic manufacturer before the expiry of patent. According to a report jointly prepared by Corporate Europe Observatory and India FDI Watch, the consequences of such a decision would be far reaching. “As the source of 92% of the AIDS medicines used in developing countries today, India is the pharmacy of the developing world. So, the impact of this also stretches far beyond India,” states the report.

On the contrary, the Indian apparel and textiles sector is one of the few sectors that has a significant upside potential if the India-EU free trade agreement comes into play. The EU accounts for about 50% of India’s annual apparel and textiles exports of over $13 billion. Hence, the FTA holds a lot of significance for the domestic textile industry, which at present is outpriced by its less developed counterparts in the region. For instance, apparels produced in India cost around 15-20% more than those produced in Bangladesh. Agrees Ajay Sahai, Director General & CEO, Federation of Indian Exports Organisation (FIEO), as he tells B&E, “Because of its least developed country status Bangladeshi textiles and apparels enjoy duty-free access to the EU markets, which is not the case with Indian garments. This will change as soon as the FTA comes into play.” No doubt, the FTA if finalised could improve the weakening sentiment in the Indian textile industry, but then it’s also a well known fact that the retail market of Europe is saturating and hence the supermarket chains like Tesco, Metro, etc are desperately trying to expand their operations beyond the current areas.

Read more.....

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



Friday, May 3, 2013

Fdi in aviation: new hope for the needy?

Allowing foreign carriers to pick up to 49% stake in India’s airlines looks good on paper. But one policy change, born out of financial desperation, won’t save the sector

Ten months back, when speculations were rife that foreign carriers would be given the nod to invest in the ailing Indian aviation sector, B&E had voiced its opinion through an article titled, ‘The agony & hope for India’s domestic airlines: call it FDI’. Our argument was: Little logic supported the cause of foreign carriers investing in India. In mid-September 2012, policymakers in India decided in favour of allowing foreign carriers to buy up to 49% stake in domestic carriers – precisely what the Department of Industrial Policy and Promotion (DIPP) had been recommending for over a year. The move won many-a-cheer from camps desperate for non-Rupee pay orders. Irrespective of whatever hopefuls imagine will be the outcome of this policy change, our argument stays. FDI rule change is necessary, but not sufficient to change to fate of airlines in the country.

Not to say a domestic industry that has lost $7.93 billion since FY2006-07 won’t see matters improve. But expecting foreign carriers to play good Samaritans to those wounded fatally would be a pipe dream.

who could benefit...

Imagine that foreign airlines can change the fate of Indian carriers in quick time. A year later, the loss-laden Kingfisher could see Rs.150 billion of debt and accumulated losses wiped off its books. Similarly, Jet Airways which still carries a red ink-laden earnings sheet (losses of Rs.23.50 billion in the past 5 years) could see Rs.155 billion being infused in it, making the airline healthy again. Air India (the biggest loss-making carrier in the world during the past decade, with losses amounting to Rs.2.24 trillion!) could seek God’s intervention, and have Rs.878.40 billion of debt and accumulated losses washed off its taxpayer-funded linen. At present, these three airlines – which control 46.6% of our domestic air traffic – are in the most urgent need for foreign support.

Others are capable of flying the distance on their own. IndiGo is debt-free and is profit-making (profits of Rs.12.83 billion in the past 3 years). SpiceJet is sitting on low debt (Rs.7 billion) and is back to its profit-making ways, having reported Rs.561.5 million in earnings in Q1, FY2012-13. Better still, analysts are forecasting a better than before FY2012-13 and FY2013-14 for the carrier. And GoAir, with zero debt, is today a tightly run airline, and growing fast, having learnt much from its experiments in 2006 & 2007.

... AND who will

In the case of Kingfisher, a 5.34% stake is already held by foreign institutions. This leaves Mallya with a chance to offload the remaining 43.66% to foreign airlines. Experts opine that this could be a good time to implement a big-stake-buy-for-cheap strategy. Going by its current market value, Rs.5.10 billion is all that a carrier would require to buy the maximum allowed stake in the airline. But two questions arise. Why would a foreign carrier want to invest in a carrier – with a skeletonic fleet of just 10 aircraft – losing Rs.38.84 million each day [it has lost Rs.74.50 billion since FY2007-08]? Second, would a little over Rs.5 billion suffice? The amount infused would mean little to an airline that (as per CAPA) requires an “immediate” infusion of Rs.32.09 billion to continue operations. Mathematically, selling a 43.66% stake would make just enough for Mallya to see his airline in the skies for another 131 days (without including current outstanding moneys that KFA owes to many-a-party, including the taxman). It is easy to reach answer the hows and whys in the case of two other “needy” carriers – Jet and Air India.


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

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Unavoidable Curiosity

While the rover parties on in Mars, it’s quite clear none of the Presidential candidates makes sense

“Two years ago I set a goal of sending humans farther into space than we have ever been – to an asteroid by 2025 and to Mars in the 2030s,” Obama said in response to questions posed in September 2012 by ScienceDebate.org, a non profit that regularly questions Presidential candidates on their stands on issues related to science. “It’s important to remember that the $2.5 billion investment made in this project was not spent on Mars, but right here on Earth, supporting more than 7,000 jobs in at least 31 states,” Obama added. Romney’s response was, “The current purpose and goals of the American space program are difficult to determine... With clear, decisive, and steadfast leadership, space can once again be an engine of technology and commerce.” Without doubt, none of them makes sense, a fact seconded by the founder of ScienceDebate.org, Shawn Lawrence Otto, who said, “We noticed the candidates for president weren’t talking about any of the major science challenges facing the country and affecting voters’ lives.”

Really, 43 years after mankind’s first notable successful adventure en route to space, NASA’s Curiosity rover may have started its party on Mars, but could not the $2.5 billion price tag of this mission have been used somewhere more productive?

If a life saved is a life gained, then shouldn’t the US government have been saving lives in Africa than searching for life in Mars?


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