Wednesday, October 31, 2012

INDIA: LOK SABHA

Education needed in Lok Sabha

Over 27% of them have assets more than Rs.10 million, and an enormous 50% have more than Rs.5 million. Quite understandably, the ruling Congress Party has the highest percentage of MPs exceeding Rs.10 million of assets (45% of the crorepati MPs come from Congress; their representation in the Lok Sabha is 30%), and 52% of the total assets combined are owned by them. The per capita assets of the less educated MPs sums up to Rs.19.3 million compared to Rs.13.7 million for MPs with better educational qualifications. Coming back to education, the literacy level of our MPs has improved over time as now 75% of our MPs are graduates, but there are 6% still who are not even matriculates.

This is not to say that the uneducated should not be allowed into Parliament. But to say that the education system was supposed to make better individuals out of human beings; and if MPs are supposed to run this country, it would not be a bad idea to force uneducated MPs to undertake open school education.


Source : IIPM Editorial, 2012. An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Tuesday, October 30, 2012

Here are the real Nobel Prize winners

You would think that the Nobel Prize has been given to Osama instead of Obama; such has been the ballyhoo and brouhaha generated over the act of edifying the first Black President of a country that historically treated blacks as slaves and chattel to be traded in the American version of Mandis. But then, surely Obama deserves it more than the now deceased former Prime Minister of Israel Menachem Begin who was once designated a “terrorist” by the British! And much more than another deceased soul (may his soul rest in peace) named Cordell Hull who – as American Secretary of State – refused exile to God knows how many Jews who wanted to escape from Nazi Germany. All of them subsequently died in concentration camps.

But for whatever it is worth, here is the Business & Economy list of Nobel Prize nominations for next year across categories:

peace: This was a very, very close contest. In one corner stood two brothers who have completely redefined the concept of brotherly love. In the other corner stood a ‘brother’ who has completely redefined the very concept of ‘neighbourly’ love. In one corner stood Mukesh & Anil Ambani and in the other corner stood the Chief of Lashkar-e-Taiba Hafiz Saeed. Ultimately, it was clinched by Saeed for his actual demonstration of ‘peace’ and ‘love’ during 26/11

economic sciences: Yes, the prize is not for ‘economics’ but ‘economic sciences’ since virtually all economists across the world have been mesmerised by the delusion that the study of quirky human behaviour is an exact science. There were many contestants for this prized prize – most belonging to the political and corporate class who understand ‘money’ like no one else. After much deliberation, debate, wrangling and mud slinging, the nomination was conferred upon the honourable Sharad Pawar for taking economics even beyond the frontiers of science. How else can you explain an inflation rate of zero percent and less when the prices of sugar, oil and vegetables have soared by more than 100%?

literature: If you believe that great literature transcends wretched reality in a sublime manner that borders on fantasy, then this one is a no brainer. The unanimous verdict was The Draft Direct Tax Code that has been circulated for debate and discussion. This masterpiece contains a sparkling gem that says that the market value of the plum houses that bureaucrats occupy in VIP Delhi will be added to their taxable income. Now if that does not border on fantasy, I don’t know what will.


Source : IIPM Editorial, 2012.

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Monday, October 29, 2012

“Competition is no cause of concern!”

R. S. Sharma, CMD, ONGC, in an exclusive with B&E counts the challenges and the strategies to tackle them.

B&E: ONGC profits fell by 3% in the last fiscal, how much of it would be attributed to the economic slowdown and volatility of oil prices and how are you tackling the same?

RS: Actually, we have a lot of upsides and these come into play when you are under pressure, especially when the crude price came down from $147 per barrel to $34 per barrel; we were in a much better position to withstand that onslaught because of the same strong fundamentals. When oil price peaked we never got this upside because of the subsidy sharing mechanism. Thus we were naturally hedged in the business. So during those times we got maximum $69 per barrel against $147 and the remaining $70 was shared as subsidy discount. And we gave a huge discount of almost 50% .But the same phenomenon played in our favour when the prices crashed. For us the prices did not crash from $147 to $34, they came down from $69 to $34. And of course our last fiscal’s performance has not been able to match up to our growth trend over the past few years. Well the prices are again on a rise but the government cannot do away with the subsidy mechanism yet we are more comfortably placed in comparison to others.

B&E: KG basin has been in the news for long. What are your plans for the KG basin production? What is your take on the coordination and competition with private players like RIL?

RS: ONGC is working on developing East Coast discoveries in an integrated manner in three phases starting from this year itself. Twelve wells have been planned to be drilled in the first phase and more than 35 wells in the subsequent phases. Reserves are estimated to be quite substantial.

Production is expected to commence from 2011. It is a global practice that in the oil and gas business the sharing of infrastructure and resources is very common among the operators. To derive the benefit of economies of scale, to synergise and reduce the cost, sharing of rigs and resources is a common practice. We are happy that we have good synergy with Reliance. They are our equity partner for Panna Mukta field and we are also in talks with them for the sharing of infrastructure, some of the board facilities, online processing facilities, pipeline structure, et al. So I am sure that in times to come instead of duplicating all these investments it will be of national interest if we shared our resources. As for competition, it is very good from the country’s prospective and also if there is no competition one does not get enough motivation to do better. So to stay ahead ONGC is applying the world class technologies and domain experts. As a result we find that our own efficiency has improved. Our exploration success has improved in the last 4-5 years as we have been sourcing and deploying best of these technologies in our activities. And I would say that competition is not a cause of concern as in this business India is so much dependant on imports that I don’t see a situation in the coming future where this competition would be detrimental to the interest of the business.


Source : IIPM Editorial, 2012.

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Sunday, October 28, 2012

“We are an aggressive company, but we are not stupid...”

V. Balakrishnan, CFO, Infosys Technologies believes today, cash is king and liquidity is heaven...

Cash in bank, and accounts receivables of Infosys. Bala says tracking these two figures forms his daily ritual every single day before starting work!  

B&E: Critics say that Infy is perhaps not very aggressive on M&As...

VB: We are aggressive but we are not stupid. We are very clear about why we want to do an acquisition – not for adding revenue, but to bring in some strategic benefits to the organisation. It can be growth in a new vertical or geography, growing some other smaller services bigger, or to bring some intellectual capital within the company that we can leverage.

B&E: Kris says for Infosys, there’s a world before 15/9/2008, when the US crash happened, and a world after! What was your viewpoint then?

VB: Those were funny days. Most customers did not know where they were going. We were very clear it was a function of the market. We were sure about the offshore model, as that was the best method for saving.

B&E: The Wall Street disaster?

VB: I predicted the Bear Stearns disaster six months before it happened in a conversation with senior Bank of America executives. I told them how Bear Stearns will crash, given Sterns’ leverage. They did not believe me. That was that. I even predicted much before everybody else how Lehman would collapse. When the crash really happened, one of the BoA top guys called me up and said they couldn’t believe it how I had forecasted the crash. Then these executives took out the news item, framed it and shipped it to me. [The executives printed the words, ‘Bala, The Nostradamus’ below the news. Balakrishnan retains that frame in his cabin till date. See top, next page! Ed]
 

Source : IIPM Editorial, 2012.

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Friday, October 26, 2012

Africa is just an ‘mtn’ away

Having achieved 100 million customers in the Indian market, Sunil Mittal is betting big on the MTN deal to create a Global Conglomerate, says Surbhi Chawla

The Indian telecom industry – reckoned as one of country’s burgeoning sunrise sector continues to leapfrog with 10-11 million subscribers being added every month all through the year gone by. And it comes as no surprise that Bharti Airtel continues to be the undisputed leader of the telecom pack by standing tall with 105.18 million subscribers as its share till July 2009 (according to COAI). While the world was battling with the economic turmoil with most companies witnessing massive erosions in their market capitalisation, Airtel has been seemingly untouched. Its market capitalisation in fact increased yoy to Rs.1,559 billion (as on August 18, 2009) compared to Rs.1,454.55 billion a year ago. Key growth indicators, revenues and net profits too have amplified by 36.77% and 26.40% in FY 2008-09.

However, given the tough economic conditions, achieving such figures has certainly been strenuous for Airtel, with Sunil Mittal demanding that the company be measured vis a vis the investments it has made (Rs. 700 million) in hard infrastructure rather than just cash flows (which are still in the negative) and profits. Add to it the fact that the landscape of the Indian telecom industry has transformed dramatically in the last two years making it increasingly competitive with a slew of new operators like Aircel coming in.

Even the existing operators like Vodafone Essar Ltd., Idea Cellular Ltd, et al, have started expanding the number of operated circles. This in the background of the ever existing and bloodying price war that all operators have played from time to time; a war that resulted in pressure on the Average Revenue Per User (ARPU). Airtel, for its bit to maintain the flow of subscribers, expanded its reach in the rural segment to tap the customers that lie at the metaphorical middle and bottom of the pyramid and ensured that it’s revenues were not impacted as it was backing on value added services (VAS).


Source : IIPM Editorial, 2012.

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ENERGY: LNG

Qatar emerges as a new king in LNG

When compared, the natural gas market today is about 60% of the crude oil market; but is estimated to grow by some 25% by 2010 and 35% by 2012. And thanks to the clean fuel initiative clubbed with rising oil prices, LNG seems to see a new dawn altogether. Take for instance, in 2005 Japan imported 58.6 million tons of LNG, South Korea imported 22.1 million tons while in 2004 Taiwan imported 6.8 million tons. Recently in 2006, Spain imported some 8.2 million tons. While the US seems self sufficient with its gas production, the same isn’t the case in Europe.

Qatar has spent billions of dollars with the help of Russia. Qatar is further exploring avenues, in partnership with ExxonMobil, to create petroleum products using gas, instead of crude oil. Further, Qatar has invested $4 billion to build the world’s largest natural gas processing facilities. For all practical purposes, Qatar and the world have only one person to thank for finding out a way in transporting gas where none existed. Crown Prince since 1977 and Emir since 1995, Sheikh Hamad Bin Khalifa Al-Thani rocks!


Source : IIPM Editorial, 2012.

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Thursday, October 25, 2012

Mobile handsets have travelled a great distance in india

from the ceo to the office boy, from the business tycoon to the paan waala, from urban to rural; mobile handsets have travelled a great distance in india, and so has nokia. but thanks to the latest twists in the tale, nokia may need to adapt quite a bit very soon

Also, it developed phones for all price points. They backed this up with an intensive distribution strategy and were greatly helped by the tie up with HCL Technologies. “We realised that one of the main challenges was the geographical spread of the consumer and hence we invested extensively towards overcoming this challenge,” reveals Vineet Taneja, Director, Marketing Nokia India. Little wonder that Nokia phones are available across almost 2 lakh outlets in India, and span from telecom outlets to watch stores, even local kirana outlets. This Finnish mobile giant realised that focusing only on urban Indian consumers would not help it realise the vision that it had set for itself. Hence it made a conscious effort to reach out to the rural consumer through micro financing options. Nokia vans visit tier 3 & 4 cities and villages to demystify the use of mobile technology and also gain business. As a result of these endeavours, Nokia today has a retail point within every 5 km, or for every 20 sq. km. And with over 400 million subscribers already in the market, Nokia commands a formidable 64% share.

However, it would not be wrong to say that Nokia’s best times are now behind it in India. Mobile phone penetration is reaching its zenith, and growth rates are expected to head downwards in a few years. Also, players like Samsung, ZTE and other branded and unbranded players have developed strong entry level portfolios and have already started to snatch some share from it. It is visible when you see that Nokia used to have a market share of over 75% till a few years back. Another concern could be the smartphone segment. With 3G making inroads in the country, a sudden surge is anticipated in smart phones. Globally too, Nokia is not very strong in this category with players like Apple iPhone, research in Motion’s BlackBerry and Palm ruling the roost, but the company believes that its latest offering N 97, could spring a surprise. Unfortunately, global markets haven’t agreed so far. It is the first device that comes in with Nokia’s application software Ovi (meaning door in Finnish) pre-loaded, so its progress will be interesting to watch. That brings us to the next big challenge. As mobile phone growth slows down, Nokia will have to now rely on the power of its software more and more in order to drive revenue growth in the future. So Ovi could play a major role. But here too, it will have to compete with Apple’s App Store (which has a much wider portfolio of offerings), as applications could increasingly become a major factor of consideration for people buying cell phones. ‘Connecting people’ sure isn’t like it used to be!

Read more......

Source : IIPM Editorial, 2012.

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Tuesday, October 23, 2012

ELECTION BUDGET

You will find no number crunching, no jargon and no guru speak from so called Dalal Street mavens on the Budget. sutanu guru & pramod kumar bring you the real budget story – a story of the lead up to the 2014 Lok Sabha Elections.

Days after the Congress-led UPA won that famous victory that left die hard pundits gasping for breath and excuses, some people were quietly and furiously busy in one house at Gurudwara Rakabganj Road and two houses in South Avenue in Delhi. Many of you must have read about how that non-descript residence in Rakabganj Road was actually the war room of Rahul Gandhi; most of you may not be aware that the house was ‘loaned’ by the owner of one of the biggest media houses of the country. The foundations for the Union Budget 2009-10 that was presented by Pranab Mukherjee were being laid by these mostly low profile characters who passionately believe that Rahul Gandhi must, and will, become the Prime Minister of India by 2014. Do remember: Pranab Mukherjee was yet to be ‘officially’ announced as the Finance Minister at that time.

Soon after the Cabinet was formed, it met formally to vet the address of President Pratibha Patil to the Joint session of Parliament. This meeting itself, more or less finalised the broad contours of the forthcoming budget. One key decision taken during this meeting was to abolish the controversial and widely criticized fringe benefit tax. Some of you who do recall the ‘routine’ and ‘yawn inducing’ speech of the President in the first week of June will not be surprised at all by the speech that Pranab Mukherjee finally delivered on July 6. In fact, even as the Finance Minister was busy meeting industrialists, industry lobby bodies and representatives of trade unions, farmers and many other self appointed guardians of public well being, he always found time to meet and discuss the broad agenda of the forthcoming budget with the other members of the core committee of Congress. This core committee includes Sonia Gandhi, Manmohan Singh, Pranab Mukherjee, P. Chidambaram and Ahmed Patel. In addition, informal channels with Rahul Gandhi’s team of close advisors were always open.


Source : IIPM Editorial, 2012.

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Sunday, October 21, 2012

India speaks out on his passion and vision...

The man who has been fighting to save water in India speaks out on his passion and vision...

B&E: Water problem in India is whether due to non-availability or mismanagement?
RS: It’s obviously due to mismanagement. See, in 1947, when India was liberated from the clutches of the British, we had plenty of ground water. You could have got water where ever you dig. But, see what has happened today. Tube wells are failing, ground water level is decreasing, lakes are disappearing... Who is responsible for all these? Just five minutes back I was crossing over a river called Kali (he had a chat with B&E in the middle of his train journey). You cannot call it a river anymore. It’s just a narrow flow of black, filthy water. We revere our rivers as our mother; but what we did to our mother? Is it not rape? We have thrown all our garbage into these rivers, we poured the industrial waste into these rivers. In fact, we have done almost every possible thing to pollute rivers and now we are crying for water. Common people don’t have time to think for all these and they can not do much to stop these irregularities. That’s why they have chosen their leaders. But the leaders who don’t have far sight are busy with other things.

B&E: How has been the response to your mission towards water conservation in Rajasthan?
RS: Public co-operation was really good. If you show people something good and prove that in front of them, they really appreciate and follow you. That’s the good thing about our country. But the government didn’t support me in any manner; didn’t give a single paisa. Instead did everything to discourage me; created number of problems and put many hurdles in my way. But I had a ‘Sankalp’ (determination) and as such never stepped back. Government filed many cases against me. It said that the water is mine; and some one like me is not supposed to put hands in its resources. But I fought for the justice. I told water or any resource is not a government asset but natural asset and it belongs to everyone. I directly fought with the government & got the justice.

B&E: What are your future plans?
RS: My ambition is to see rivers in India flowing as rivers. Two years back we carried Yamuna Satyagraha in Delhi to save Yamuna. Now I have taken Ganga project. Ganga the perennial river, which is sacred and worshipped by millions of Indians for the ages, is polluted now. We need to sensitise the masses about the damage being caused to Ganga by hydro electric projects and by domestic and industrial wastes. Though government now declared Ganga as National River, there are still plenty of conservation activities that need to be done. Overall encroachment, ground water exploitation and pollution are the three major threats to Indian water resource. When come to the first point, rivers across the country are facing a threat of real estate. Apart from increasing pollution, it destroys river bed. However, it has not yet acquired dangerous proportions. We can counter it through collective action. Fighting against these threats is my priority.


Source : IIPM Editorial, 2012.

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Saturday, October 20, 2012

CIA midwife’s Islamism

How the US toppled a popular regime in Iran

By the end of Second World War more and more countries which were pillaged and plundered under the colonial yoke, declared their freedom. National liberation movements emerged victorious. Iran under the leadership of Mohammad Mossadegh was also not an exception to this trend. Iran had been undergoing a struggle for constitutionality from the start of 20th century. The election of Mohammad Mossadegh as the Prime Minister in 1951 was a natural consequence to that trend. But the otherwise frail and emotional Mossadegh gave the biggest post-world war shock to Britain and US by his decision to nationalise the oil industry. Till that day, the Anglo-Iranian oil company, later British Petroleum, was virtually looting Iran’s oil wealth. This was more than enough for the former colonial masters to topple his government. CIA’s Near East and Africa division chief Kermit Roosevelt arrived in Tehran to orchestrate the operation, code named TP-AJAX. They used every tactic ranging from propaganda to bribery. On August 19,1953 CIA sponsored coup d’tat successfully accomplished and Mohammad Reza Pahlavi, the Shah of Iran became the ‘puppet’ monarch of Iran for US. For 26 years Reza Pahlavi ruled according to the Washington scriptures. Opposition parties, especially the Tudeh Party (Communist party of Iran) were brutally suppressed.


Source : IIPM Editorial, 2012.

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