Showing posts with label IIPM Management Institute. Show all posts
Showing posts with label IIPM Management Institute. Show all posts

Wednesday, June 05, 2013

Countering terror with sticks

Questionable decisions by para-military bosses in Kashmir have endangered jawans' lives, says Mayank singh

While India’s chattering classes wage a seemingly endless battle against corruption and its elite celebrate the country’s growth trajectory popping champagne on ice, out on the frontiers its brave men from the para-military forces are putting their lives on line in what is turning out to be a campaign which is both brave and foolhardy. Brave because they are willing to do whatever is expected from them unmindful of the costs involved, their lives included, and foolhardy because they are being asked to accomplish a job that seems impossible – countering highly motivated, trained and armed terrorists with wooden sticks that would come handier walking pets than defending the country’s sovereignty!

“Mismanagement by senior officers, an utter lack of foresight and blatant violation of standard operating procedures (SOP) is why jawans are getting martyred in the line of duty on a daily basis in Jammu and Kashmir,’’ confides a senior officer.

Two recent incidents typify this callous neglect in the Kashmir valley. On March 13 this year fidayeens or suicide bombers entered the Bamina area of Srinagar and mowed at will CRPF jawans who had been ordered by the state police to report in riot control gear – which constitutes essentially of a wooden stick or a lathi and a padding to cover their bodies.

Naturally, questions are being asked. In a situation as volatile as the Kashmir valley, who in the Jammu and Kashmir police, as well as the CRPF, thought it prudent and conducive to let their men get into riot gear? What good is a riot gear when confronted with sophisticated assault rifles and improved explosive devices (IEDs)? Classified documents in possession of TSI reveal that against well laid down SOP, it is the local police which is ordering central paramilitary forces. The SOP lays down the bottom line: no operational strategy can be dictated by the local police and has to be made necessarily in consultation with the Inspector General of CRPF and the other paramilitary forces deployed in the region. The documents clearly establish this breach of protocol coupled with a deeply flawed analysis, essential to counter terror. Two orders were issued by the IGP Kashmir (IGPK) on February 9 and February 11 this year. In the February 9 order addressed to CRPF, the IGPK directed the induction of five CRPF counter-insurgency (CI) operation companies and five training companies at Baramulla.

It read: “These companies shall be fully equipped with riot control gear, no personnel should carry any weapon.” Why should an IGP ask for specialist CI platoon to be armed with wooden sticks?

More to the point, on what basis are riots in Jammu and Kashmir equated with similar disturbances in other parts of the country where the Rapid Action Force (RAF) model of deployment is in force: one third of the company in lathi, one third with tear gas shells and one third equipped with rifles?

In the February 11 order, IGP Srinagar sent a signal to all paramilitary head quarters of the Srinagar Area, CRPF, BSF and ITBP to, “make sure that no fire arm is carried on by any law and order component.”

The situation reports accessed by TSI and the Incident Note of the BSF makes it clear that terrorists camouflage themselves with locals and take advantage of such orders at all available instances. Not surprisingly, they successfully struck twice within a span of eight days. The life of a jawan, apparently, is so cheap that an experienced commander can take arbitrary decisions and throw SOP to the winds. The situation report and incident notes – preceded by many such earlier observations - have said that terrorists are frequently using the civil population as shield to fire on para-military forces. Says one such assessment sent by CRPF on March 29, “After completion of law and order duty at about 1915 hours left for battalion head quarters. When our troops were crossing from Macchuwa bridge towards Karawalpora, all of a sudden few people started pelting stones at our vehicle from the right side and after few seconds a round was fired from the left side. So, while stone pelters engaged the troops from the right side, terrorists used rifles from the left.’’ It  adds: “Two of our constables saw a person who waved his AK 47 rifle at a group of five to six people running from the spot.’’ The BSF has a similar tale to narrate. On the March 29 incident, “at about 0730 hrs, while the vehicle in front moved closer to the Nowgam crossing, Srinagar, suspected militants suddenly opened fire on the 5-ton vehicle moving in the rear. By the time they (troops) could take position, the vehicle had moved in front of the Ahmad Hospital and militants had by then disappeared into the by lanes of thickly populated Nowgam area.’’

In both instances, troops did not fire as the collateral damage would have been heavy and would have proved advantageous to separatists groups in rallying people to their cause. In such dangerous situations, the use of lathi or wooden sticks is nothing short of harakiri and officers on ground stand accused of blatantly jeopardising the life of ill-equipped jawans by not allotting sophisticated weapons to them. After all it in on the directives of field commanders that the fighters are willing to take huge risks and the latest orders and its subsequent impact is certain to hit the morale of troops present there.

The Union government's Group of Ministers (GoM) on Internal Security has clearly laid down that “in operations against insurgency, militancy and terrorism, arrangements for coordination of operational planning, deployment etc., should be evolved by the senior most officers representing the central armed forces, in close consultation with the state police chief and officers of other concerned agencies.’’ In reality, it looks the other way round.

“If the situation has really improved, then why is a highly trained force with modern weaponry being wasted in Srinagar for law and order duties which could otherwise be dealt or ought to be dealt by local police? We need officers who not just appreciate the complexities but also have the gumption to take courageous decisions. Otherwise, counter terrorism and counter insurgency will always be fought as per the whims and fancies of officers without foresight, leading to continuous loss of lives,’’ says one reliable source, who adds that in the absence of accountability, really nothing will work.


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, June 03, 2013

A few bad men

Why do Maharashtrians make such lousy home ministers? Yemon Ganguly Shukla probes this intriguing feature in a state with a rich warrior legacy 

It is not easy being a Home Minister in a country like India. Ask L.K. Advani, the leader who so desperately craved to be recognized as the natural inheritor of the legacy left behind by India's first Home Minister Sardar Patel. Despite his image as a hard liner and a nationalist, Advani himself knows that his performance as Union Home Minister was not something that historians will rave about. But he can find comfort in the fact that his far from sterling performance looks incredibly good when you compare it with some politicians from Maharashtra. Just pause and think about it for a moment: how can a state that has given so many towering leaders throw up such abysmal home ministers?

This correspondent wrote a cover story in 2007 for this magazine with the headline: Where Next? That story basically told what everybody in Delhi and beyond already knew. It was about how clueless the dapper Shivraj Patil was as Union Home Minister in UPA-1 and how he appeared more interested in changing his clothes after a terror attack than goading his officials to go after terrorists. In case you have forgotten, the track record of UPA-1 when it comes to terror attacks is worse than that of the NDA regime when terrorists attacked the Indian Parliament and when India had to suffer the ignominy and indignity of the hijacking of the Indian Airlines flight to Kandhar. The capital Delhi was rocked in 2005 by a series of bomb blasts that left hundreds dead and more scarred for life. The next year, bombs planted in local trains in Mumbai killed scores of innocent commuters and inspired a film called "A Wednesday" where Nasseruddin Shah plays an "aam aadmi" who sets out to kill terrorists in his own unique way. In the meanwhile, Naxalites had been rampaging in Bihar, Chhattisgarh, Jharkhand and Odisha. Then came the shocking exposures that most Indians were afraid to admit: the first that some Indian Muslims via the Indian Mujahideen were waging their own twisted version of Jihad and second, that some Hindu groups were plotting terror strikes of their own as revenge. Of course, our honourable Home Minister seemed to prefer calling all these bloodthirsty killers misguided Indians. Even as terrorists struck at will across India, Shivraj Patil seemed very secure in his job and kept proclaiming his undying loyalty to the Gandhi family. By the time the Batla house encounter, where some alleged terrorists and a policeman were killed, Shivraj Patil had become a national joke. And yet he remained the Home Minister and kept changing his dress before every TV appearance. It was only the outrage and perfidy of 26/11 that perhaps persuaded the real ruler of India Sonia Gandhi to let go of this embarrassment of a Home Minister called Shivraj Patil. In any other functional democracy, this man would have been hounded and exiled for his abject failure to protect Indian lives. But then, we have democracy Indian style so the dapper gentleman is now a Governor.

It would be difficult even for the cynical to compare Shivraj Patil with fellow politician from his state Sushil Kumar Shinde who now embarrasses the country almost every week with his laughable performance as the Home Minister. Shinde is another Congressman who pledges and proclaims his undying loyalty to the Gandhi family. Just recall how he reacted and behaved after the horrific gang-rape and murder of Nirbhaya when citizens in Delhi took to the streets to protest. He sounded genuinely puzzled in an interview with the behaviour of the protestors who refused to be cowed down by police brutality. In his opinion, Madam Sonia Gandhi had given an audience to some protestors and listened to them and so the grateful citizens of Delhi should have gone back to their homes because Madam had heard them. Just look at the perverse audacity of his sycophancy.

But then, Sushil Kumar Shinde, like fellow Maharashtrian Shivraj Patil is in the race to be anointed the worst Home Minister ever by future historians. So don't be surprised when he actually manages to repeat a statement in the Parliament without realising he is making a fool of himself on live television. In fact, his appointment as Union Home Minister reflects the casual arrogance with which the Congress treats Indian citizens as subjects.

When Shinde was Minister of Power, half the country shut down because of an unprecedented collapse of the power grid that prompted many across the world to laugh and mock at the sheer incompetence of Indians. Within 48 hours of this disgrace, Shinde was rewarded with the critical post of Home Minister. He has since performed as expected, with the nonchalant incompetence that only a sycophantic courtier can manage.

There is indeed a mystery here: the abysmal performance of Maharashtra politicians as home ministers. The whole world blames the then Prime Minister P.V. Narashima Rao for his failure to prevent the demolition of the Babri Masjid and its horrific aftermath that India is still suffering from. But how many remember that it was S.B. Chavan who was the Union Home Minister at that time? For that matter, do you know that Narashima Rao, though a product of Andhra Pradesh, used to contest Lok Sabha elections from Maharashtra? The irony is: Rao was Union Home Minister in 1984 when Indira Gandhi was assassinated by her own body guards and the Congress presided over the massacre of innocent Sikhs.


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 31, 2013

Movie Review: Kai Po Che

A cut above

When the script is the undisputed star of a cinematic project, a film like Kai Po Che is bound to be the result. The principal pivots of the plot are predictable – cricket, religion, kite flying, male bonding and entrepreneurial ambition. But there is nothing remotely fusty in the efficient manner in which they are woven into the film’s engaging and heart-warming tapestry.

Kai Po Che is in the main faithful to the source material – Chetan Bhagat’s The 3 Mistakes of My Life – and turns the written text into a well-crafted film that thrives on restraint amid all the dramatic flashpoints at its heart.

Three buddies, Ishaan, Govind and Omi, want to set up a sports goods shop and a cricket training academy. Ishaan is a district-level cricketer-turned-coach while Govind is a man adept at playing with numbers. A property owned by a temple trust is acquired, thanks to the good offices of Omi’s maternal uncle, a rightwing political activist. The threesome’s bonding is also severely tested by two cataclysmic events – the devastating earthquake of 2001 and the post-Godhra riots of 2002.    

  
Director Abhishek Kapoor, who is also the co-writer of the screenplay with Pubali Chaudhuri, Supratik Sen and Chetan Bhagat, does not resort to the kind of melodrama usually associated with stories of buddies caught in the emotional eddies of life. Especially impressive is the unfussy way in which Kapoor rings the curtains down on his story of love, humanity and hope.

The performances of the lead actors exude an air of naturalness that adds to the film’s appeal. Sushant Singh Rajput, in his first role on the big screen, makes a deep impression as the no-nonsense Ishaan. Amit Sadh, playing the impressionable Omi, articulates the confusion of a man torn between his commitment to his pals and his rising allegiance to a seductive new cause with minimal effort and maximum conviction. But the actor to watch in this film is Raj Kumar Yadav. As the calm and focussed Govind, he traverses an entire gamut of emotions with the ease and confidence of a seasoned screen performer.


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 11, 2013

The auto bloodbath

Going by how matters have been in the past year, there is little hope that India’s auto industry will grow beyond the single-digit mark in FY2013-14, even if macroeconomic indicators and economic sentiments improve substantially

This kind of brutal bloodbath was not witnessed even after the global financial meltdown of 2008 when it appeared as if Apocalypse and Armageddon had jointly invaded the global economy. From about 1.6 million domestic sales in 2007-08, passenger car sales fell marginally to about 1.55 million units in 2008-09. Not just that, the auto industry registered a spectacular turnaround almost immediately and kept growing at a very healthy pace. By 2011-12, passenger car sales had reached close to 2.68 million units. Something similar happened with sales of commercial vehicles that reflect even better the state of health of an economy. From about 490,000 units in 2007-08, sales crashed to about 384,000 units in 2008-09 in the aftermath of the global financial meltdown. But as with passenger cars, the recovery was swift and sure. By 2009-10, sales of commercial vehicles had recovered smartly to 532,000 units and crossed 800,000 units by 2011-12. The magic one million mark was looking very much within reach. And everybody was going ga ga over the brilliant prospects of the Indian auto industry. Some over optimistic souls even started predicting that the auto industry growth rates in India will keep outpacing that of China and that India could well emerge as one of the five largest auto markets in the world by 2020.

In 2010, the consultancy firm Ernst & Young conducted a study on behalf of Automotive Component Manufacturers Association of India. The E&Y study predicted that the Indian automobile market would clock the fastest growth rates between 2010 and 2020. Average annual growth rate for the Indian market between 2010 and 2020 was pegged at 14%. The average annual growth rate for the Chinese market was pegged at 8%; the forecast was 6% for other emerging markets and just about 4% for developed markets belonging to G-7 countries. According to the survey, domestic sales of cars and SUVs would jump to 5 million by 2015 and further double to 10 million by 2020.


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

Monday, May 06, 2013

DealBook: M&As this year

there has been a steady decline in the appetite of Cash stressed indian companies as well as their global counterparts for M&A deals in the last couple of years. Moreover big ticket M&As haven’t demonstrated expected synergies. Both, deal value and volumes have seen a tremendous downfall. B&E presents a snapshot of how the M&A landscape has panned out so far this year

M&A deals lose sheen


The number of M&A deals and the corresponding deal value for the first nine months of the year are on consistent decline. While in the year 2010 and 2011 deals valued at $42.5 billions and $37.6 billion respectively were completed in the first three quarters, the value fell sharply to $29.4 billion this year. On the other hand, number of deals have fallen sharply from 511 (9M 2010) to 438 for the corresponding period in 2012. The figures clearly indicate that M&As are loosing the sheen and have failed to deliver the promised value over the last few years. Further, with economic uncertainty looming large in and around India, the road ahead for such deals does not seem to be a smooth ride either. Unless organisations around the world demonstrate exceptional performance, the state of M&As is most likely to be dismal.

Cross border deals score well over domestic

82.56% of the M&A deals closed by India companies in the first 9 months of the year were across the border. This involved many big ticket deals like the $1.8 billion acquisition of RBS’ retail and commercial banking business by HSBC UK. Apart from this, Indian companies were also very active in looking out for small and medium acquisitions related to oil & gas and other natural resources. These acquisitions will eventually prove to be the backbone for the vertical integration of businesses and in the coming days, one can expect to see more such deals. On the other hand, foreign companies have also consistently engaged in buying out promising Indian companies. However, most domestic M&A deals have been undertaken to achieve operational and financial synergies between companies.


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

Saturday, May 04, 2013

2 minutes of despair?

In the light of its harmful properties, the widespread use of maida in India must be banned at the earliest

It is almost impossible to find any eating joint in India that doesn’t use maida, which is the starchy white part of the wheat grain, as an ingredient in its kitchen. Maida is also been consumed directly or indirectly in Indian households. But the lesser known fact is that it is identified as a major source of diabetes & related diseases.

Maida causes blood sugar imbalance and has a negative effect on insulin. Besides, it contains anti-nutrients, which can affect the digestive process and make people more prone to heart and kidney diseases. Surprisingly, not many people know that maida is originally yellow in color and the hazardous benzoyl peroxide is added to turn it into white. This additive has already been banned in China and EU. But in India, maida – with benzoyl peroxide as an additive – is still one of the most highly consumed food products.

Today, maida constitutes a major chunk of the Rs.85 billion Indian bakery market, which is growing at 12-15% annually and is a cheap ingredient in breads and other eatables. Even popular FMCG companies use the ingredient. A case in point is the instant noodles category. Even though atta variant noodle categories are becoming prevalent, the consumer demand for the original maida noodles still persists. Not only do companies refrain from educating their consumers about maida’s ill effects, even the government strangely is ignorant. The government must urgently take steps to ban white maida and products that contain it.
 

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, April 26, 2013

International

facebook: ipo debacle

The sizzle and fizzle of the most hyped IPO

Apple’s co-founder Steve Wozniak had reportedly warned Mark Zuckerberg about the glitches he might face on taking Facebook public. But when the hottest and most awaited IPO finally made it to Nasdaq on Friday, May 18, the mood was ebullient. Facebook’s public debut seemed like the greatest coming-out party in Wall Street’s history. Nobody thought that the euphoria would come crashing down barely hours later. For all the frenzy and ecstasy that went into the making of the Facebook IPO, the stock’s performance on the bourse has been quite anticlimactic. In a portentous sign of all that could go wrong and take the whoop out of investors’ joy, the IPO’s execution of trade was delayed by nearly 30 minutes on the first day itself. And things have gone from bad to worse thereafter. The share price tanked by nearly 13.1% by day five of trading. Even earlier, by day three itself, it had become clear that the breathlessly hyped $16-billion IPO would face difficulty in living up to its giddy expectations. The fall in the stock’s value and the accompanying embarrassment turned decidedly disconcerting after news emerged that Morgan Stanley, the lead underwriter of the Facebook IPO, had played some hokey-pokey by not fully disclosing the company’s revenue forecast in the run-up to the IPO. As a result of these avoidable shenanigans, not only is the stock still trading well below its initial offering price of $38 over a week after listing, the company is also now having to contend with shareholder lawsuits and government investigations. The IPO, which was universally touted as the poster child of the business of social media, could well become the new whipping boy for more Wall Street reform. However, not all investors have lost hope. Many believe that the IPO can still take Facebook’s valuation to nearly $104 billion and churn out money in the long run. But the ranks of believers are fast diminishing.

Nokia: Troubled business

Can Nokia pull itself up again?

It has been more than two years now since Finnish handset maker Nokia began losing steam to players like Apple and Samsung. The company has lost nearly 23.8% in global handset market share. Nokia’s handset shipments stood at 82.7 million units in the 1st quarter of 2012 (down from 108.5 million units in Q1, 2011). Analysts fear that considering the rate at which Nokia is burning its cash reserves, it may not be able to ward off the risk of debt default. Just five years ago, Nokia had piled up a whopping $12.54 billion in cash reserves, but over the past five quarters, it has used up $2.7 billion to prop up its faltering business. And there could be another outgo of $2.51 billion in the next quarter. The company’s short-term bonds for 2014 have already been rated as junk by Standard & Poor’s and Fitch.


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

Thursday, April 04, 2013

Will Indian Online travel Boom invite M&As?

The Indian Online Travel Industry has witnessed tremendous growth since 2004. Today, it’s the most Crowded space in The E-Commerce Segment with new players joining The Race every year. Question is – how will this Overcrowded space grow spacious?

As more and more Indians turn to the web for their travel needs, the online travel portal market in the country is gearing up for a bigger action in the coming days. With travel portals now offering a host of new services – putting forth their travel packages and providing safer mode of payments – booking travel online is no more confined to getting a low-cost airline ticket. In fact, these portals are now becoming travel guides rather than just ticketing stations. As per comScore’s data for April 2011, the number of visitors to travel sites in India increased 32% compared to last year. The study by the US-based digital market research company revealed that around 18.5 million visitors (age 15 or older visited) turned to the Internet for their travel needs in April 2011. While Indian Railways led the list of the top 10 visited sites, registering 8.4 million visitors this year (an increase of 8% from the previous year), Online Travel Agency sites (OTAs) secured the remainder of the four top spots in the category. MakeMyTrip reached nearly 3.9 million visitors (up 63%) followed by Yatra Online with 3.5 million visitors (up 82%) and ClearTrip.com with more than 2.1 million visitors (up 80%). Interestingly, the US-based Expedia Inc. secured the #5 position with 1.8 million visitors (up 12%).

This clearly indicates that there is a distinct shift in consumer preference as more and more people now prefer to plan and book their travel, and holiday needs online. According to travel industry research company PhoCusWright, India’s online travel market is the fastest-growing online travel market in the Asia Pacific region. What’s more? The company expects the Indian online travel industry to grow at a whopping 28% rate to top $7 billion by 2012. And it’s because of this reason that OTAs are now exploring newer avenues to generate revenues. In fact, revenue from advertising has already taken a backseat, and the focus now is more on cross selling of products, combination of products, et al. Further, with the rise in the sales of non-air products, industry players are confident that newer product categories will be explored in the travel and holiday space.

The increased pumping of money in the sector has also helped portals spend more to attract customers. In the last couple of years, most of the sites broke-even, securing a comfortable position. For instance, Nasdaq-listed MakeMyTrip registered a profit of $3.7 million in Q4 FY2011 as compared to a loss of $1.3 million in the same period last year. Even for the financial year ending March 2011, it had a profit of $4.8 million as against a loss of $6.2 million in FY 2010.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri

For More IIPM Info, Visit below mentioned IIPM articles

Tuesday, April 02, 2013

Direct Tax Code: A boon for IT Sleuths!

A Closer Look into The Provisions of The Proposed Direct Tax Code reveals India’s Digression from a Trust-Based system of Taxation to one which is Based more on The Element of distrust.

The existing Income Tax Act, which came into legislation in 1961, has often been criticised for being economically inefficient and incompatible with the current requirements and inequitable to all tax payers. Thus, to avoid this criticism and to replace archaic rules, the Ministry of Finance finally came out with the draft of Direct Tax Code (DTC) Bill in August 2009. But, the draft Bill, after being introduced in public domain, received a lot of criticisms on certain amendments in relation to removal of existing tax subsidies, and modifications in the tax rate structure that it sought to introduce. So, in June 2010, the ministry again issued a new revised DTC Bill and presented the draft to the Union Cabinet.

In what the government has claimed to be an attempt towards bringing path breaking changes to the existing tax regime in India, the DTC Bill, which is proposed to be implemented from April 1, 2012, will replace the five decade old legislation. In fact, in the foreword to the Tax Code, Union Finance Minister Pranab Mukherjee said that “the aim is to eliminate distortions in the tax structure, introduce moderate levels of taxation, expand the tax base, improve tax compliance, simplify the language and lower tax litigations.” Meanwhile, the Bill is being scrutinised by the Yashwant Sinha-led Parliamentary Standing Committee on Finance.

Personal income tax, as almost all salaried persons will agree, in our country is one of the highest in the world. More open and honest an employer is in terms of disclosing remunerations, worse it is for the employees because taxable income goes up. There is no denying that the present system is outdated and rewards dishonesty and non-disclosure of income by way of lower tax. The rationale for introducing DTC, government says, is to increase the efficiency and equity of the tax system by eliminating the plethora of tax exemptions or subsidies that create distortions. Its major policies include replacement of profit-linked exemptions with investment linked incentives, particularly for export units, and reduction in the tax rates to bring more people and companies under the tax net. Even the government wants a modern tax code in step with the needs of an economy, which is now amongst the largest in Asia. “In India, tax reforms have lagged behind growth. It is a big challenge for politicians and policymakers to keep the pace of reforms with growth,” Jeffrey Owens, Director of the OECD Centre for Tax Policy and Administration, said during a recent visit to New Delhi, adding, “Indian economy has transformed in the last two decades. Along with high growth, it has increasingly become the importer and exporter of capital. But tax regulations have largely remained the same. You have to change with the changing environment.” While the rationale behind the government’s proposals with respect to the DTC has been largely accepted as a right step in the right direction, a closer look into the provisions of the proposed tax code reveals India’s digression from a trust-based system of taxation to one which is based more on the element of distrust.


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 28, 2013

Towards More Globalised Highways

The Booming Indian CV market has been Seeing a slew of MNCs Lining up to be Among The Numbers. Can they do an Encore of The Script that played out in The Passenger Vehicle Segment?

Just months after the world saw the banking sector in developed countries in a hell bound state, slowdown blues made their way into the Indian market. However, much before the cautionary signals were made public, the commercial vehicle (CV) segment was already feeling the heat and the months ahead took the sector deeper into the woods. This gave credence to a well accepted viewpoint in the industry; that commercial vehicle sales are a barometer of economic activity.

The industry showed a decline in sales by 21.69% yoy for FY 2008-09 with the so-called highly profitable M&HCV segment dipping by 37.01% to record sales of 1.48 lakh units as compared to the 2.35 lakh units sold in FY 2007-08. While Ashok Leyland managed to sell only 47,632 vehicles in the same period with a decline of 37.34%, market leader Tata Motors also felt the heat and its sales declined by 22% to 2,33,843 units.

However, to the respite of CV makers and supporters of the ‘barometer’ analogy, the market took little time in taking a U-turn, as the economy stabilised and started moving back on the growth charts; well in time before the economy also made a strong rebound.

“There is a lot of scope in the CV segment and the projected healthy GDP growth rates also suggest the same,” says Rakesh Kalra, CEO, Mahindra Navistar. The recent budget highlighted the strong investment push needed to develop infrastructure in India and this would boost the demand for M&HCVs (16T & above) & LCVs (less than 3.5T). Domestic sales figures show a yoy growth of 34.18% for M&HCVs and 24.08% for LCVs for the period of April 2010-February 2011 as per SIAM. Three wheelers displayed a rise of 19.96% yoy for the same period. By all counts, such numbers do not hurt! In addition, taxes have not been increased on CVs in this year’s budget. It is not surprising, therefore, that a number of global players have made their entry recently, or are looking for a foothold in this space. Over time, MNCs have virtually dominated the passenger vehicles segment in India. Will they be able to do an encore in the CV segment?

When you look at the incumbents, it looks to be quite a daunting challenge, for the market is dominated by three large players. Tata Motors still holds the pole position with sales of 3,48,544 units and a growth of 22.36% during the April 2010-February 2011 period, followed by M&M that dispatched 92,768 vehicles towards Indian roads with a growth of 23.13%. So far, Tata Motors, M&M and Ashok Leyland account for more than 80% of the total market in India. When it comes to MNCs, the leading company is SML Isuzu (Swaraj Mazda’s alliance with Japanese player Isuzu) posted the best performance with sales of 10,444 followed by Piaggio with sales of 8,444 units. The Volvo-Eicher JV came next with 932 units, while Volvo Buses posted sales of 488 units.


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

Monday, March 18, 2013

“Mismatch in Reforms is Causing Avoidable Adverse impact on Economy”

Ram V. Shahi, Former Power Secretary, Government of India, shares The Dynamics between Power and Coal

Ram V. Shahi, post his tenure as Power Secretary, has been associated with various organisations as head of their energy advisory boards. In an exclusive interview with B&E, he shares the interdependence of the coal and power sectors

B&E: How will the cess of Rs.50 per tonne levied on coal affect power tariffs in the short to medium term?
RVS:
The cess of Rs.50 per tonne on coal will have an effect on the cost of power generated in coal based power stations in the range of 3 paise to 4 paise per KWhr. Its effect at the level of consumer tariff, however, will be of the order of 5 to 6 paise per KWhr in view of transmission and distribution loses. This cess, which will lead to revenue, on a national basis, of the order of Rs.30 billion per year, will go towards encouraging Green Energy. In this very budget, Service Tax on Transmission has been abolished. Therefore, positive impact of abolition of Service Tax would be about 5 paise per unit if we consider inter-regional transmission of power. Thus, additional burden on account of coal cess is more or less offset by the concession in Service Tax.

B&E: How will the move to allow open auctions for coal mining blocks affect fuel availability for power plants and what will be the effects on consumers?
RVS:
The proposed initiative for coal mine development by allotting coal blocks on the basis of competitive bidding is a positive one. However, the criterion for evaluating bids should be the cost of producing coal rather than any premium that the mine developer may be asked to offer to the Government. Development of coal blocks through the process of competitive bidding should be on the same basis as the Scheme of Ultra Mega Power Projects. The objective should be low cost power by way of competitive bids for coal as well as power projects. Obviously, consumers will benefit from less expensive power supply.

B&E: If the pending Bill on Coal reforms which will allow private players to mine coal for non-captive usage is passed, will it bring about much needed power shortages under control?
RVS:
While the power sector reform has moved forward, commencing from the historic legislation Electricity Act 2003, followed by several other policy initiatives, coal sector reform process has remained stagnant at the point when the Bill on coal was introduced in Parliament in 2001. Therefore, the present legislative initiative is a welcome move of the Ministry of Coal. The power industry is heavily dependent on coal just as coal industry has the largest consumers in the power sector, to the extent of 75% of its production. The present mismatches in reform initiatives are causing avoidable adverse impact not only on power sector but on economy as a whole. Therefore, coal sector reforms have to catch up fast with the actions that have happened, and will happen more rapidly, in the power sector.


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

Monday, March 04, 2013

Dutch changed the rules of the economic engine

Robert Schipper, Executive Director, Netherlands Foreign Investment Agency talks to deepak ranjan patra about how the Dutch changed the rules of the economic engine

B&E: You consider Netherlands to be a ‘bridge-head to Europe’ for companies looking to access the European markets. Can you elaborate?
RS:
The Netherlands has had a tremendous geographical advantage and has physically been the trade and transport hub for north-western Europe, its industrial heartland. The Dutch have centuries of experience in transporting goods into and outside Europe. The port of Rotterdam and Schipol Airport are the leading logistics hubs in the world. We speak the main languages of Europe and our population is fluent in English, the language of modern trade and business. To add to this, the Netherlands has a business-friendly regulatory framework and an internationally oriented tax system that makes it advantageous for foreign companies to set up here and conduct their European business from the Netherlands. In fact, many cross border transactions are routed through Dutch holding companies because of the tax advantages we offer and our efficient manner of doing business. A wide treaty network ensures that companies based in the Netherlands avoid double taxation, effectively helping international operations in the Netherlands to become profitable. Therefore, both physically and financially, the Netherlands is a great entry point into Europe, one of the world’s major markets.

B&E: You have worked in various key positions for NFIA in many countries including USA, Japan, Hong Kong and Singapore. How difficult or easy, in terms of regulations and processes, it is to invest in India vis-à-vis other countries?
RS:
One can look at FDI in two ways. One way is that it is necessary to protect your indigenous industry from foreign competition. India has been able to do that since it has a large home market. The Netherlands, on the other hand, has never been in a position to do so and has always been an open economy. Since the Dutch had to access foreign markets to sell our products, we also had to open our doors to foreign companies. This has made our companies very competitive and spawned some of the early multinationals like Philips, Shells, Akzo Nobel and Unilever, some in cooperation with the UK. In a globalizing world I believe that no country can afford to live alone anymore.

India has clearly been benefited by globalization since it opened up in the early ‘90s and we can see the success stories like the IT/ITeS sector. Indian companies have also been tremendously successful in the global economy since they were allowed to expand out. I am confident that in the future, many global players will have their origins in India.


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

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Wednesday, February 06, 2013

TELECOM: APP STORES

Telecom players in India are flocking to the ‘app store’ band wagon. But it’s an idea much before its time, as masses don’t even know the ‘app’ from the ‘store’ says b&e’s Surbhi Chawla

Is it the latest outcome of the competitive dynamics in the sector? RCOM denies the same, and states that the reason for them to come out with an application store or RWorld 2.0 (as they refer it) is driven by 4 C’s – customer experiences based on smartphones, content localisation & SNS generated content, contextual search for content across all Voice, SMS & Data and lastly, clear and simple pricing. Though much of the details in regards to this particular endeavor are not available as of now, one is sure to hear from RCOM and the others (including Airtel) in the times to come. Already there is news that Vodafone is also planning to have its global application store available shortly, and the ones who have already taken giant leaps in this segment would be looking at newer means to create a buzz around their offering. But is this entire strategic exercise worth it at all? It’s noteworthy that even internationally, the likes of Verizon, AT&T, et al have launched application stores, but they have not been able to reap dividends for them. Traditionally those are the handset vendors such Apple and Research in Motion (of BlackBerry fame) who have managed successful tactical application of stores models. So why are Indian operators vying to make their mark in this sphere?

The reason behind this is quite simple. Call rates have been hitting rock bottom because of per second billings and most operators are finding it hard to defend their revenue share. The sector has been hammered badly in the first two quarters of 2009-10. Still, the optimism is back with the industry posting a 4% increase in the revenues making the total tally stand at Rs.397.56 billion for the quarter that ended on December 31, 2009. But the wireless segment could only manage a 0.7% increase (at Rs 265.64 billion) in revenues. Hence it would not be wrong to deduce that the overall outlook for the sector has not undergone a sea change as the worst is far from over for them. Telecom service operators also realize the same and to increase their revenues and more importantly their bottom lines, their strategy has been to aggressively push their Value Added services (VAS). The implicit assumption is that customers aren’t as conscious about pricing of VAS as they are with respect to call rates. 


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.

 

Tuesday, January 22, 2013

Where's the money Mr. Ambani ?

Reliance Infrastructure's grand plans to expand massively seem to have forgotten a simple factor... Funding! Is this what was the nature of the beast? B&E's Ratan Lal Bhagat deeply questions the method in the madness

It would be foolhardy to imagine that the economic stimulus plans of a developing economy (India) and a developed economy (US) would have much in common, but then economic crises' can prove to be great levellers! One of US President Barack Obama's major bets on reviving the US economy is his proposed multi-billion dollar infrastructure plan (the largest since the 1950s, upward of $500 billion). India also recognises the criticality of fast-paced infrastructure development & has planned investments of about $410.61 billion ($1=Rs.48.76) in the 11th 5-year plan (again the largest since the 1950s, don't need to refer that!!!).

That's where the similarity ends, more or less. Obama's end game is that he has to generate millions of jobs from somewhere and has few options to do so. India needs to invest in infrastructure primarily because… errr… we need infrastructure… simple as that, and badly so! The infrastructural support systems like routes of transport (roads, railways & metro lines), power generation and its distribution, and development of Special Economic Zones (SEZs), are integral components in fuelling the growth of any economy. But Indian infrastructural development has been hinged by gross mismanagement of resources, superfluous project delays, and lethargic approach of public project contractors.

Thanks (but no thanks) to them, there is a massive opportunity in this sector for India Inc. now. Consistent underperformance has compelled the government to opt for a more fruitful public-private partnership (PPP) model. This brings into picture private players like Anil Dhirubhai Ambani Group's (ADAG) Reliance Infrastructure Limited (R-Infra). As expected, the company's aggressive business expansions in infrastructure have all the trappings of an ADAG group company, as the group has shown a considerable risk appetite for sunrise sectors.


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.