Friday, February 08, 2013

Water Woes Intensify

When it was predicted about a decade back that the next World War would be fought for control of water, sceptics dismissed it as a mere hyperbole. Now, with killings over water being reported from across the country, the spectre of the past is becoming a scary reality. The team of anil sharma, raju kumar and nishant bhadreshwar take stock of the situation

It is a truth universally acknowledged that a single man in want of a wife must be a good provider. However, what the word ‘provider’ encompasses has acquired a new meaning in Rajasthan. Here, a man must be able to provide water to the family apart from other things. Sounds like a leaf out of Ripley’s ‘Believe It or Not’, but the acute water scarcity in the state has made a lot of people wary of marrying off their daughters in villages where women would inevitably have to trudge for miles everyday to fetch some water. “Often, women have to walk for miles to collect water. Many people are reluctant to marry off their daughters into such communities,” says Rameshwar Chaudhari, a resident of village Chopra Dhotra in Jodhpur district of Rajasthan. His village is facing severe water crisis.

Rajasthan, spread over 10.4% of the country’s geographical area and sustaining more than 5.5% of the human population and 18.70% of the livestock, has only 1.16% of the total surface water available in the country. This year, the ground water situation has turned alarming in the state with only 30 water blocks out of the total 237 left in the safe zone. With increase in the population and subsequently the demand for water for various purposes, the state is already in the middle of a terrible water crisis. The per capita annual water availability in the state is about 650 cubic meters against the minimum requirement of 1,000 cubic meters. “I am 60 years old and have never seen a situation like this. We get water only once or twice a month and even that comes with low pressure. It takes over half an hour to fill a bucket,” says Kamla, a resident of Naulakhi in Sri Ganganagar district. The crisis has also become so acute in Atru in Baran district that the water department—in spite of spending Rs.20,000 daily on the supply of water—is finding it difficult to meet the local demand through tankers.

The local administration in Akhlera in Jhalawar district, having a population of over 12,000, is now planning to engage 150 plus tankers to supply water. The only source of water in the town, Amalvada Deh dam, is drying up fast. Similar situation has emerged in Sojat Road in Pali district where the administration has demanded a special 65 wagon water train to overcome the crisis. Women in Bhilwara town of Rajasthan recently blocked the road in front of the municipality, demanding increased water supply. “We want more tube wells to be dug up so that we can get water,” says Kamla, a housewife. Water is being supplied once in every five days in the town famous for its textile industry.


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.
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Wednesday, February 06, 2013

Even Viagra may not work!

Losses of patent rights in the pharmaceutical industry prove how the biggest of dreams can turn into the worst of nightmares. And there are no exceptions. by steven philip warner

It wasn’t just another day for Jeffrey Kindler at office. Kindler, for the past four years, had been serving as the General Counsel at Pfizer. It was precisely two days ago, when he had been hastily appointed as Pfizer’s CEO. He switched on his office desktop for the first time and typed-in an email to Pfizer employees, which read thus: “July 31, 2006: To meet our challenges in a rapidly changing industry, we will need your continued help. I would like to discuss our challenges openly...” The note was headlined: “We move forward from a position of strength.” This was to some surprise, as his firm had been clearly suffering a stagnated top-line and a falling stock (which, under his predecessor Henry McKinnell, had fallen by 43%). Today, a Ronald McDonald shoe and a rubber chicken (that he was gifted by his bosses at McDonald’s on his exit) are placed neatly in a shelf in his New York office, and it serves as a reminder of his being the first big pharma CEO who had had no previous pharma experience (before becoming the General Counsel). Under Kindler’s watch, in May 2008, Pfizer’s stock price nosedived to the sub-$18/share level only for the second time in over 12 long years. As of March 2010, the stock is gasping at $17.75. Pfizer’s revenues have continued being indifferent to Kindler’s presence (they’ve hovered between $47 to $49 billion!). But the biggest worries of Kindler go far beyond just the humdrum tales of a battered stock price & a browbeaten bottomline (its net profit for FY2009 represents just 43% of what it earned four years back!).

It’s amusing how one man’s meat can become another man’s poison, even in the world of pharma. For his predecessor Henry, the acquisitions of Warner-Lambert (in 2000 for $90 billion) and Pharmacia (in 2002 for $60 billion) proved to be glorious moments (as the first deal gave Pfizer a control over the world’s no.1 selling $11.4 billion-a-year drug Lipitor, while the latter helped it pocket its now third-bestseller Celebrex, which earns $2.5 billion-a-year); for Kindler, the very same deals are now giving nightmares of a dry drug pipeline! Today, Kindler is grudgingly shouldering the burden of launching blockbusters to make up for the loss of its patents over the next few years.


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.

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Tuesday, February 05, 2013

BPO INDUSTRY: EMPLOYMENT SCENARIO

Good ol’ B.O is worried that Indian (and Chinese) BPOs are taking away American jobs! His worries might actually be true, irrespective of whether he can do anything about it

Even Gaurav admits that his work pressure has almost doubled over the last one month, much to an extent that his company is contemplating options to add three new faces to his team. In fact, he is also expecting a 15-20% hike in his salary this year. And why not? As per Nasscom, the industry can achieve an export target of $60-62 billion by FY2011 employing 2.5-3 million professionals directly. Even as per IDC India estimates, the domestic BPO market is expected grow to $6.82 billion by 2013 at a CAGR of 33.33%. “But, to succeed, these companies will not only have to strengthen their focus on domestic outsourcing business, but will also have to expand their client base across industries while paying heed to process efficiency & service delivery through technology advancement. Companies should now look at Shared Services Center (SSC) design and execution as one of the key focus areas to deliver a more significant impact on their client’s business,” cautions Rajeev Sharma, Director, Osource India (an outsourcing service provider for BFSI, Telecom, Pharmaceuticals & Hospitality companies).

Even big wigs like TCS and Wipro are quite bullish on their hiring plans. While TCS plans to hire 30,000 employees in FY2010-11, HR managers at Wipro too are looking forward to add 7,500 people to the company’s payrolls and that too over the next six months. In fact, Wipro has just given a pay hike (8-15%) to its employees. However, the irony is that despite having an impressive track record (pre-recession) and remarkable future estimates, the outsourcing industry in India still suffers from hitches like lack of staff with right skills & high attrition levels. But, is there a solution? As per experts, the best way out for companies is to treat employees as their internal customers apart from following the Pyramid rule while infusing fresh talent in the company (so that a clear growth path is defined at the beginning itself). Also, cross training at all levels by domain experts is required in a big way. Moreover, the shared service functions (HR, Finance, IT Support, et al) should be made on fair parameters of performance, rewards & responsibilities.


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.

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Monday, February 04, 2013

Crunched to death!

The financial crisis brought the world to its feet!

The foundation stone of the current financial crisis was definitely laid during the prior boom period, which lasted between 1996 to early 2005. Financial institutions like Fannie Mae, Freddie Mac, Lehman Brothers, Bear Stearns, Merrill Lynch et al, were enthusiastic enough to run after the lucrative sub-prime market and create an artificial buying power for borrowers. Giving no importance to financial due diligence, the lenders were quick to introduce new, riskier products with insufficient asset value as collateral. As a matter of fact, the total amount of mortgage-backed security issued tripled to $7.3 trillion and the securitised share of sub-prime mortgages increased from 54% to 75%; all thanks to the booming ‘credit derivative market’ which made risk transfer easy. The low interest rate further encouraged Americans to opt for housing loans or mortgages. But when home prices in the US began to decline in 2006-07, mortgage delinquencies rose and securities backed by sub-prime mortgages (which were widely-held by financial institutions), lost most of their value. Later on, when this housing bubble busted, three out of the five largest investment banks (once the cynosures of Wall Street) of US, failed, triggering instability in the global financial system. This resulted in a decline of capital for many banks, thus creating a credit crunch.

Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch and American International Group (AIG), are all in a perilous state today. The Federal Reserve on its part has been adding every bit to the domino effect. Its loan of $114 billion to protect the creditors of Bear Stearns and the US Treasury’s backstopping of $5.2 trillion in Fannie Mae and Freddie Mac sent a wrong signal to the failing behemoths. Lehman Brothers, stating that it had debt of $613 billion (with an asset base was of $639 billion) opted for Chapter 11. Days later the Federal Reserve gave $85 billion loan to AIG for a 79.9% stake. Mark Zandi, Chief Economist, Moody’s Economy.com, avers, “The crisis began with sub-prime mortgage borrowers defaulting on their loans, driving many private lenders out of businesses and causing billions in losses for investors. A year later, the crisis has engulfed a growing number of prime borrowers as well, pushing them financial brink and costing investors billions more.” 


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

For More IIPM Info, Visit below mentioned IIPM articles.
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Friday, February 01, 2013

Keynesianism on steroids

It was ERTA that made US economy bleed in 1982

Failure is the pillar of success! Who else can explain it better than Ronald Reagan who, in order to give economic prosperity to his country, threw it deliberately into a recession. In August 1981, he introduced the Economic Recovery Tax Act (ERTA) with a focus on huge personal and corporate tax cuts, reduced government spending and a so-called “balanced budget” (it was projected to have a deficit of $80 billion) to drive away stagflation that had begun to afflict the US economy. His program was based on supply side economics that tax cuts would push consumer spending, thus leading to an increase in investments, which would result in economic growth.

He felt that the revenue, generated due to economic expansion, would be enough to meet the shortfall due to the initial tax cuts. Instead, his program led the US economy into one of its worst depressions. Inflation peaked to a high of 14% and in fact, many critics even characterised the economic policy of Reagan as being “Keynesianism on steroids.” So, to fight with it, the then Fed Chairman Paul Volcker had no option than raising the interest rate. And that was enough to be the death nail. US was suddenly experiencing its worst recession since the Great Depression of 1930s. In fact, by November 1982, unemployment rate in the US had reached 10.8%, the highest since the Great Depression. 17,000 businesses had failed and thousands of Americans had become homeless. US stayed in depression for one year, before Reagan was forced by strong measures from the Federal Reserve Board to pull the nation out of its nightmare. 


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.

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