Showing posts with label IIPM Ranking. Show all posts
Showing posts with label IIPM Ranking. Show all posts

Saturday, June 01, 2013

Book Review: Cell Phone Nation

India without the wires

The cheap mobile phone is probably the most disruptive communicative device in history. In India its potential to stir up society is breathtaking, argue well known historian Robbin Jeffery and leading anthropologist Assa Doran.

The authors are familiar with the emerging landscape in India for more than two decades now. Jeffrey is a visiting professor at the Institute of South Asian Studies and Asia Research Institute, at National University of Singapore, and has also written on the rise of vernacular dailies in India. Doron, a research fellow in the College of Asia and the Pacific, Australian National University, Canberra, too has an earlier India book - Caste, Occupation and Politics on the Ganges: Passages of Resistance.

“Like shoes, mobile phones have become an item that almost everyone can afford and aspire to. Unlike shoes, mobile phones often get taken to bed,” the duo writes in Cell Phone Nation: How Mobile Phones have revolutionised business, politics and ordinary life. The authors explore this theme in the context of India to understand the impact of the cheap mushrooming of communication devices, a revolution for a country that until 1991 had only one phone for 165 people.

All this changed in the first decade of the 21st century and by 2012 mobile phone subscribers in India exceed 900 million out of the 1220 million population. It is ironic  that India had far more mobiles than it had toilets of any kind; 53 per cent of the country’s 247 million households still defecated in the open; but mobile phone density in 2012 approached 72 per cent.

The impact of the simple version of the device has been deep. Village councils continue to ban unmarried girls from owning phones. Families have debated whether their new bride should surrender them. Cheap mobile phones have become photo albums, music machines, databases, radio, flashlights… Religious images and uplifting messages continue to flood tens of thousands of millions of phones each day. On the other hand pornographers and criminals have found a tantalizing tool.

Each of the eight chapters is worth a book in itself. The canvas has been divided over the concept of three ‘Cs’. The first is ‘Controlling’, which examines how people struggle to control information, beginning with sub-continent’s Mughal rulers 500 years ago but quickly moving to radio frequency spectrum and nexus of big business, politicians and bureaucrats, and discusses the 2-G scam and infamous Radia tapes.

Second part of the book focuses on who did the connecting ranging from the fast living advertising women and men of Mumbai to small shopkeepers persuaded by their suppliers of the fast moving consumer goods to stock recharge coupons for pre-paid mobile services.

Also what made the cell phone revolution possible in the billion-plus nation conscious its caste and class hierarchy is that it developed the cheapest mobile call rates in the world and turned pre-paid mobile phone plans into a complex and much talked about subject. In 2010, a US dollar (Rs 50) bought more 200 minutes of talk time on an Indian mobile phone; in Australia, it often bought less than one minute. At one point of time, the cost of making an international call from India for three minutes was Rs 300. Today, it is as low as Rs 20.

With mobile phones invading every section of the society, authors tell us how masses became consumers. This occupies the third part of the canvas - consuming in a multitude of ways. “Mobiles were used for business and politics, in households and families to commit crime and foment terror. Some of the practices enabled by the mobile phones were new and disruptive,” the authors observe.

At the most phones brought fundamental changes in the lives of people at the bottom of the pyramid whether it was fishermen in Kerala or Banaras with tips on the rough weather on seas or marginal farmers with farm advisory or money transfer in unbanked areas.


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

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Thursday, May 02, 2013

Why everybody at SpiceJet loves Raymond

Two years back, Neil Raymond Mills took over as SpiceJet’s new chief. Then, the airline was unwell. He began by slashing costs. Strategies that didn’t make economic sense were forgotten. Today, the airline appears a turnaround tale. Reality is, the job isn’t over yet. Worse, harsh history could repeat itself

A simple analogy. If you drive a car at a constant speed minus stops, you burn less fuel. The gains don’t become apparent after each short drive. But in a quarter of a year, the reduction in fuel consumption starts to show. The results become more pronounced in a year. Much is saved in gas and cash. Common sense. But most airlines in India ignore such small money-saving acts. SpiceJet is not one of them. At the airline, this “constant speed” philosophy is communicated as a compulsory key message to each of its newly recruited pilots. These cockpit handlers are supposed to remember it every time they leave an air strip. The idea is to get the pilots to save anywhere between 0.5% to 1% of the airline’s fuel bill. A small chunk saved. But at SpiceJet, if a cost can be avoided, it is.

Cost-cutting doesn’t always help
The company’s hardheaded emphasis on lowering costs does affect its operational efficiency metrics. Unfavourably at times. In July 2012, SpiceJet’s On-Time Performance (OTP) on domestic routes was 84.3%. That meant, about 16 of every 100 flights were delayed beyond 15 minutes. Much of this is can be blamed on the constant speed norm that is in place at the airline. This makes the airline’s record only better than the havoc-stricken Air India’s (OTP of 81.2%) and now-stripped-to-the-bone Kingfisher Airlines’ (81%). All other airlines recorded OTPs in the 90%-plus range [IndiGo: 95.3%, GoAir: 90.3%, and Jet: 91.6%]. The company isn’t one to worry about offloading passengers to peer carriers (and cancelling flights) either, when load factors don’t justify economics. The carrier strives to maintain an average load factor (LF) of over 75%, and plans to increase it over the quarters to come [in Q1, FY2012-13, LF was 80.8%]. Result: SpiceJet’s flight cancellation record (2%) is only better than those of Air India (3.2%) and Kingfisher (8.2%). Others boast of a lower figure (IndiGo: 0.1%, Jet:1.4%, GoAir: 1.6%).

Mills... a number-loving turnaround guy
But CEO Neil Mills, who has turned around the airline in the past two years, knows that these numbers only tell a part of the SpiceJet story. He is familiar with how budget airlines work. An industry veteran of over 20 years, this former CFO of Middle-Eastern LCC Flydubai knows his numbers fall on the rational side. He measures every paragraph in the book by weighing data. That is exactly how he helped build Flydubai from scratch. He plugged cost holes at the company, and improved its balance sheet, helping the airline grow from a drawing on the whiteboard to a fleet of nine operating aircraft in just a year-and-a-half. Before Flydubai, he was at easyJet for 12 long years. Under him, the company grew from 4 to 174 aircraft, and became one of the biggest, most profitable airlines in Europe.

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

Tuesday, April 16, 2013

“Allowing FDI in india’s airlines will not help”

B&E: At present, we have many airlines which are in serious need of funds in India, be it private carriers or the State-run airline. Do you think raising the FDI limit by up to 24% for foreign carriers will help improve matters?

Gordon Bevan (GB):
No. Opening the doors to FDI won’t encourage foreign airlines at the moment. It might make the investment climate in India more attractive, but not enough to warrant placement of capital in these markets. The airlines that have large exposure to the Indian market can manage to attract their traffic without local airline investment. Each airline can negotiate its own deal with carriers to secure Indian connecting traffic, but on international routes there may be duplication of effort. If Lufthansa acquired Jet Airways, what should the airline do with the Jet services to US? Lufthansa would want that traffic to route via Frankfurt or Munich. There may be a shrinking of direct services as the quickest way of gaining an ROI is to pump traffic through the owner’s hub system. I am sure the Indian Govt. would have an opinion on a shrinking, foreign-owned airline by now.

B&E: So are you suggesting that partnerships and code-sharing agreements instead of an acquisition would be better for the acquirers?

GB:
Many airlines have learnt that they can secure additional revenues from partner airlines without tying capital in airline ownership. The fashion is now for airlines to co-operate in a JV on a route or country-pair, deriving the best of both carriers without the cost of investment. Ultimately, airlines are about securing traffic and revenue streams. Except in very rare instances – Swiss and Lufthansa is a good example – foreign airline ownership does not deliver this aim.

B&E: There is a serious concern that it is the LCCs who will benefit more from this FDI limit if it is allowed, as they will enjoy better valuations at the moment due to their profitable status at present. Your views on this?

GB:
India represents all of the conditions to attract foreign LCC investment. LCCs would see the Delhi and Mumbai domestic markets as one where they could carve a sizeable market share. They are battle-hardened having had to compete with their own legacy carrier and legacy carriers at the other end of the route. The more successful LCCs already have high brand recognition within the Indian diaspora in countries like Malaysia, Australia and Europe. Exporting this brand to India would not represent a difficult challenge.

B&E: The count of domestic passengers in India is 55 million. Now is this enough a market size for foreign carriers to get greedy about? 

GB: I am not sure whether foreign legacy carriers can get too excited about a domestic market of 55 million that spends an average of $60/sector within India, or not. The reason 55 million Indians travel domestically is because of the level of fares at the moment. More interesting is the 38 million passengers that fly to and from India. In almost all cases airlines can pitch for this traffic without investing in Indian carriers. The domestic air market is also subject to non-air competition. Although the domestic air market has more than doubled in five years, average ticket prices have fallen to US$60 from $125 on average. Growth is developed through discounting – a message that legacy carriers are familiar with but not receptive to. It is clear that Indian domestic fares are unsustainably low. There is nothing wrong with low fares if it is related to the cost of production.


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

 

Friday, April 12, 2013

“We Will follow our Motto of Keeping Supply Below Demand!”

Enrico Galliera, Commercial & Marketing Director at Ferrari SpA, joined the Italian luxury carmaker just a year back, after working for over two long decades at various positions in the marketing department of the Italian pasta-maker Barilla Holding Spa. In an exclusive interview with B&E, he reflects upon Ferrari’s rough ride during the slowdown, its performances in markets like China, Japan & South Africa, its attempt to create fuel-efficient engines, and his “supply-less” motto for succeeding in new markets.

B&E: Ferrari is a very well-established brand in the luxury car segment. It believes in selling premium quality than volumes. But contrary to conventional wisdom, even the luxury car sellers suffered considerably during the recent slowdown. How was the slowdown experience at Ferrari, especially when compared to the tough times faced by players like General Motors, Toyota and other labels which focus on volumes?
Enrico Galliera (EG):
As compared to what the volume players in the automobile industry went through during the economic crisis, the time was still a relatively better period for Ferrari. As we generally work with a 12-month waiting period, the economic crisis cannot be termed the worst period for Ferrari so far, though we did get hurt to an extent. To be honest, it would be wrong to say that we were totally insulated from the economic crisis. But what saved our topline during the 2008-2009 period was our entry into newer markets like South Africa, which helped the company manage overall volumes. The fact that South Africa, in such a short time has become the 15th largest market for Ferrari out of the 59 countries that we are present in, gives you a fair idea of how the market played a saviour.

B&E: So do you plan to enter other countries in the African continent, just in case you would require more cushion if there is another slowdown soon?
EG:
Actually, yes. The response we got in the South African market has motivated the company to expand to other African countries as well in the near future. We already have Ferrari owners in markets like Mozambique, Angola and Nigeria, and I am sure, given a tough business scenario in the near future, these emerging markets will serve us well.

B&E: China is another market which has over the years, impressed luxury automobile sellers. Your company has spent 7 years in China, but it has all been rather silent there. Has your time in China been a rather dull one?
EG:
No. We have seen huge growth and penetration in the Chinese market over the past few years. China has been and is a very important market for Ferrari. Though I confess that after entering China in 2004, we did take a few years trying to understand the market. But today, we are geared-up to increase our volumes there as well. To quote a figure, Ferrari sold over 300 units in China in 2010, which market a y-o-y increase of 40%. That for us is phenomenal. And going forward, we only expect the sales to rise higher. It was a slow start, but we are catching up very fast.

B&E: Next, to Japan and Egypt – what degree of pressure do natural disasters like the Tsunami in Japan and unforeseen events like the unrest in Egypt put on the sales of your company?
EG:
Such incidents for that matter, are surely bad signs for any luxury carmaker. Japan is undoubtedly one of the most important markets for Ferrari. But trouble there had begun even before the catastrophic events unfolded in April this year. Even before the Tsunami, there was a slowdown in sales due to the stagnant situation of overall economy of the country. With the Tsunami occurring, our problems in Japan have only been aggravated. The company is today really concerned about Japan and how long it will take for such an important market to recover. At the same time, unrest in Egypt and several Middle-Eastern countries is also a major concern for the company.


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

Living on Presidential lethargy

Inordinate Delay in Deciding The Fate of these Mercy Petitions Raises Concerns over The Consistency, Transparency and The Very Objective of these Procedures.

Timely trial. Well, that sounds some sort of an oxymoron in the Indian judicial system. But 25 pending mercy petitions with the President with some since 2003 is certainly more than unbelievable. There is no doubt that the hype that surrounds sentencing of capital punishment to convicts and mercy pleas cause a lot of stress on the President’s ability to take an objective decision under Article 72 of the Constitution that empowers the President of India to grant pardon or commute the sentence of a convict found guilty by court. But holding it for as long as eight years, for sure, sets a bad example for the system as a whole.

Perhaps, this is exactly what the Supreme Court (SC) vacation bench comprising Justices G. S. Singhvi and C. K. Prasad might have felt when it expressed ‘surprise’ over the delay and sought an immediate reply from the Delhi government on the matter. “The counter filed by Delhi Government will clarify as to why the petition for pardon has not been disposed of for last more than eight years,” the SC bench said.

However, the subject of ‘inordinate delay’, which can amount to a ground for Court to commute the death penalty under section 433(a), has some other contours which also deserve ample attention. These include reasons behind what constitutes delay, the impact of delay on the death row convicts, applicability and scope of fundamental rights protection to death row convicts and whether death sentence can be commuted into life on account of delay. The inordinate delay in the execution of the sentence is one circumstance, which has to be taken into account while deciding whether the death sentence ought to be allowed to be executed in a given case.

Without going into the details of how prolonged delay in deciding on a mercy petition could translate for the case and convict in question, former Chief Justice of the Delhi High Court A. P. Shah speaks in favour of timely trials. “There should be no doubt that a reasonably expeditious trial is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21,” Shah told B&E.

The issue has been a matter of debate for quite sometime and the politicisation of the case of Mohammad Afzal, who has been awarded the death sentence in the 2001 Parliament House attack case, only brought matters to fore. A. P. J. Abdul Kalam, as President, received Afzal’s mercy petition on October 4, 2006, and forwarded it to the Ministry of Home Affairs (MHA) for advice. Since then, the ministry has been examining the petition in consultation with the Government of Delhi. The MHA usually consults the state government concerned before submitting the mercy petition back to the President with its advice. The President’s powers under Article 72 are always exercised with the aid and advice of the Council of Ministers. The delay by the MHA to submit Afzal’s petition to the President with its advice indicates the dilemma the government faces in keeping the issue free of political considerations. Also, the apparent pick and choose policy adopted by the government (which is absolutely contrary to the stand maintained by the MHA) does not speak high volumes of the procedure in place as well. BJP has even termed the delay in deciding Afzal Guru’s petition (despite Guru himself asking for speeding up the process) as Congress party’s strategy to avoid a religious electoral backlash.


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

Thursday, April 04, 2013

The Best a man can get?

When P&G bought Gillette for $57 billion in 2005, it earned Criticisms galore. Six years later, The Brand has already added $32 billion to P&G’s kitty. If Gillette’s India Market Performance improves fast, the coffers will only swell further. And there are signs of that happening.

The electric shaver and the safety razor have cut deep into the American and European markets but many Indians still strop their own razors or visit a barber for a shave. In fact, as per a CII official, over 50% of India’s 600 million males shave outside their homes in salons. Naturally, for Gillette, the world’s top razor-blade maker, India is a highly attractive market with a vast potential. Indian men on an average shave only 2.5 times a week, far lower than, say, Koreans and Japanese. But cracking this market, especially the mass segment, is not proving to be easy for Gillette. Years of conventional marketing and advertising have won it a premium brand image, but Gillette lags behind rivals in India because consumers can’t afford to buy its flagship products. So while it dominates the Rs.10 billion blades and razors category at the top-end of the market, family-owned Indian companies such as the Houses of Malhotra and Vidyut dominate the mass market.

Gillette India’s revenue of Rs.8.52 billion for FY2009-10 (July ‘09 to June ‘10) looks healthy given that it contributes to 19.4% of its parent Procter and Gamble’s India business (which amounts to Rs.44 billion). But Gillette’s India glory-tale is chicken-feed when compared to the brand’s global revenue of roughly $8 billion! Understood that the brand globally contributes to a much lower 10.13% of the total sales of P&G, but the fact that India contributes just 2.37% of Gillette’s total revenue invites nothing less than shame for a 28 year-old brand. Across the world, Gillette accounts for about 70% of the razors and blades sales, but in India, it has failed to live up to its spectacular global performance. And even though it is currently the market leader in the five billion-units-a-year razors and blades market in India with roughly 40% share, its performance here pales in significance to its global dominance. Just 10% of Indian men who shave use Gillette blades, compared with about 50% worldwide.

Gillette’s personal care products – shaving systems and cartridges, razor blades, toiletries, and shaving brushes – represent what the company is all about in India. The category accounts for a little over Rs.6 billion in sales – 70.42% of all that the company rustled up sales-wise during its last accounting fiscal (ended June 2010). Next in the pecking order is oral care, comprising toothbrushes and other oral care products. This division brought in sales of Rs.2.2 billion or 25.82% of all sales. Then there is the portable power products division, made up of battery sales, which rang in 3.76% of its sales.


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

Tuesday, March 26, 2013

Steve, You just went too Soft there!

Ever since it began, Microsoft was Globally hailed for its Innovations, and even feared, Hated & Fined for its Anti-Competitive practices. But especially since Steve Ballmer took The Helm, Microsoft has only Moved Downhill, becoming a Pale shadow of its former self

Two childhood friends Bill Gates and Paul Allen, who had a strong passion for computer programming, started a company in 1975, which preliminarily developed interpreters for microcomputers. Since then, Microsoft has been the temple of innovation and a clear market leader under the leadership of Bill Gates. Great empires are built on foundations laid by great visionaries, and it is undeniable that Bill Gates and Microsoft were right up there among the harbingers of the software industry as we know it today. The magnitude of their contribution can be gauged from the fact that global IT spending touched $1.5 trillion in 2010 according to IDC.

But the true test of visionaries is the ability to create empires that last beyond them. In 2008, Bill Gates had declared, “We have achieved the ideal of what Microsoft wanted to become.” By this statement of Bill Gates, who stepped down as Microsoft CEO in 2000 (and Steve Ballmer took over) and as executive Chairman in 2006, one would like to believe that he crossed that rubicon as well. But is Bill’s statement a statement of achievement, or still one of wishful thinking? Well, they do say that time will tell. And to be frank, it has been doing so for quite a while, though we do not believe that Bill would exactly like to hear its verdict so far! To understand that, we need to look at what transpired since the time Gates stepped down and Ballmer stepped in.

It took Steve Ballmer 20 long years to become the top man at Microsoft, ever since he dropped out from Harvard to join the company. Incidentally, even his joining heralded a turning point of the IT industry with the dot com bubble bust, and ironically, the relations between Steve and Bill were also hardly the kind you would expect between a CEO and his succèssor. The Wall Street Journal reported the same and an internal source in the board clarified the entire issue. Steve was reported as having said, “Once Gates leaves, I am not going to need him for anything”. And he even reportedly added, “Use him, yes, need him, no.” In fact, Gates even stormed out of that meeting, according to sources. Two camps had been built since then, with respective allegiance to Ballmer and Gates.

With a start like that, the signs seemed quite ominous. In 2000, the company’s M-cap was recorded at a mammoth $586.2 billion, and was leading the list of top companies in the world. Even the conglomerate GE, which stood at second place was way behind with an estimate of $474,956 million. It’s almost a decade since then, and Ballmer’s leadership has come under scrutiny not once but on many occasions. The company’s M-cap in the fourth quarter of 2010 was only recorded at $238,784.5 million, almost one third of what it was in 2000 as reported by Financial Times Global 500. The decline is a clear indication of the pessimism of investors in the company. IT analyst Jeff Kagan comments to B&E on the company’s major problem, “Microsoft has happy customers and it is a natural for them to transform and lead the new industry. They have just not done that over the last decade”.


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


Tuesday, March 12, 2013

The Lara Workout

It’s fashionable to be fit, and after Shilpa Shetty and Bipasha Basu revealed their secret workout plans on fitness DVDs titled Shilpa’s Yoga and Love Yourself respectively, it’s Lara Dutta’s turn to enter the fray to become a fitness diva. Titled Yoga: Recovery and Rejuvanation, this is the first of a series of 3 DVDs she plans to launch. We wonder which Bollywood star will follow suit and try to rejuvenate their careers too!

Read 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

Thursday, March 07, 2013

Ancient Remedies For Spinal Maladies

Ayurveda Stands-up to Support Paraplegic Patients denied Hope by Allopathic Doctors

Rajinder Johar worked in KG Medical Hospital in Lucknow. He, along with his wife and a daughter, lead a happy and content life. Little did they know that an unfortunate incident would change their lives, especially that of Rajinder, forever. The family still shudders on recounting the events of the day when some burglars entered their home and on encountering fierce resistance from the family, they fired gunshots at Rajinder. This was March 1986. Shot directly on his chest and cervical spine, Rajinder was at the mercy of medical assistance for the next six years. “Being a paramedic person myself, I knew that the injuries were severe, which could render me invalid. Even years of treatment couldn’t help, and I had to accept that I would be disabled for the rest of my life,” said Rajinder. Rajinder has been suffering from paraplegia (paralysis of two limbs) and today, runs a charitable trust called ‘Family of Disabled’ to serve those with disabilities.

A recent study done by the Indian Spinal Injuries Centre revealed that more often than not, spinal injuries in India result in paraplegia. Road accidents and falls from a height are the most common causes of spinal injuries, and the report stated that 65% of people end-up being paraplegic. Moreover, 69.25% are declared failed cases (ie, “they can’t be overcome neurologically”) as opposed to 39.8% in the US. In such cases, it has been observed that apart from the regular medical treatments, patients also turn to alternative ways of healing; Ayurveda being the most desired of them all. Owing to India’s history of Ayurvedic practices, people from across the globe visit our country to seek aid for various kinds of injuries. To make this practice popular and to encourage researches on treatments through Ayurveda, Maniben Sarkari Ayurvedic Hospital in Ahmedabad has been granted Rs. 5 crore by the government and declared as a centre for excellence, and is now aiming at becoming the best Ayurvedic hospital in the country. The hospital intends to set-up a research and treatment facility especially for neurological disorders, especially hemiplegia (half body paralysis) and paraplegia.


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

Wednesday, March 06, 2013

Deal with its chronic problem of lack of feedstock

After a decadal starvation of investments, Indian fertilizer industry is hot again in the books of investors and seems ready for a great run in the days to come. Before that, it will have to deal with its chronic problem of lack of feedstock.

Moreover, with the food price inflation still pricking the government and the demand for food grains increasing faster than ever, the government has now started taking keen interest in agriculture related sectors including fertilizers. One can understand the same from the very fact that in FY09 the government fully met its humongous subsidy obligation of Rs.1 trillion that accentuated due to a sudden and unprecedented rise in input prices. In fact, explains N. Raju, Analyst, Fitch Ratings India, that in order to keep fertilizer prices under control at the pick of the price cycle and check it from hurting the demand scenario by any means, the government paid for almost 90% of the cost of many categories of fertilizer recovering only 10% cost from the consumers. In a way such secured environment has also contributed to the resilience in the particular sector. As a result, apart from all plans for new plants and capacity expansion, the existing players have started operating at a higher efficiency level than what they were operating earlier. As per reports, on a cumulative basis (including private, public and co-operatives), the Indian fertilizer industry increased its capacity utilisation to 76.9% of installed capacity (84.1% in case of private sector) from 61.2% in the previous financial year (67.1% for private sector). This in turn has resulted in a total production of 16.3 million MT of fertilizer in FY10 (estimated), a surge of 14% over FY09.

Meanwhile, adding an impetus to the on going resilience, the government itself is attempting to revive 5 closed urea plants with an installed capacity of 2.2 million MT. Praising the move, Manoj Gaur, Executive Chairman, Jaypee Group, which has recently joined hands with Duncan Industries to revive the latter’s urea plant in UP, explains, “In order to ensure food security for the country’s 120 billion people, good agri-production has now become mandatory for us. And in this scenario, fertilizer will play a very critical role. Every year we import nearly an average of 7 to 8 million tonnes of urea, while our own plants here are closed. So, revival of these plants and their modernisation for better output is the need of the hour.”


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

For More IIPM Info, Visit below mentioned IIPM articles


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 IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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 IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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 IIPMMalay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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Tuesday, January 22, 2013

The US foreign policy

Obama has little choice but to go after earnest development in the US foreign policy

B&E: The media is abuzz with speculation about the possible opening of a United States interests section in Tehran. If the US makes a formal request, will Iran agree?
MM: I think the realising of the word “if” in the US takes considerable time. In the last few months, we have been asked this question of “if America raises such a request” many times; yet, we are still not faced with such a request. Till now, these things have come up through mass media and that is why you have received mass-media type answers. Let’s be patient. We’ll surely respond if we receive any such request.

B&E: Seymour Hersh argues that there has been a shift in the American position vis-à-vis an attack on Iran? What’re your comments on that?
MM: From the very commencement of this question historically, two options were on the table: an alternative based on cooperation, and an option based on altercation. We, at all times, prefer the choice based on cooperation. Time and again, we would listen from some part of the ruling party in the United States that they are bearing in mind the other option – that is confrontation, an assault or military strike on Iran. Maybe this has forever been in their minds, and is even now; but the problem is that they aren’t understanding what could happen. They cannot inflict on the taxpayers another conflict and that’s why we do not see any likelihood for a new conflict by the Americans in our region.

B&E: What do you think would the consequences be, if the United States did attack Iran?
MM: They know what will be the reaction. We have informed them. 


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

For More IIPM Info, Visit below mentioned IIPM articles.