Friday, August 31, 2012

Lessons from momma

John Abraham is admired for his amicability and humility, and he’s gotten even more grounded after filming for Aashayein. Playing a gambler ‘who discovers new meanings of fortune and life through a dramatic turn of events,’ John has dedicated this film to his mom and her lessons in leading life to the fullest. Hope the film fills the viewers’ hearts with hope and faith too!


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Thursday, August 30, 2012

Oil price deregulation and the auto sector!

Deregulation of petrol and diesel prices has given rise to a lot of hue and cry in the domestic auto industry. B&E reaches out to various experts for a commentary on how the dynamics of the auto industry may change. by Sanchit Verma

“Why should the government pay `5,000 crore per quarter for the petrol being used in anyone’s car?” Replying to opposition’s demand to roll-back fuel recent price hike, when Union Petroleum Minister Murali Deora asked the above mentioned counter question, it was absolutely clear that the government was determined to go in for the kill and save as much as $25.6 billion per year spent on subsidizing prices of petrol, diesel, gasoline et al. Anticipation of a budget deficit of 5.5% might have made the Congress-led UPA government opt for deregulation, but this certainly was one of the landmark decisions since opening up of the country’s economy around two decades ago. The question remains, how is freeing up oil prices going to affect the auto industry, an industry which is directly associated with fuel prices?

While the auto industry is divided on the impact of the fuel price rise, it’s quite obvious that in the near future price deregulation is bound to hit the sales of vehicles in the country. A research report from CARE Ratings suggests that the automobile industry would be one of those industries, which would face a higher degree of negative impact. According to the research, while growth of the two-wheeler segment would fall by 200 basis points, sales of passenger vehicles would be marginally affected and the same for domestic commercial vehicle would have a very insignificant impact. Comments Revati Kasture, Head – Industry Research, CARE Ratings, “The 5 -6% increase in petrol prices by the said move of EGoM would bring in difficulty for many households, which are already reeling under the pressure of high inflation.” This, certainly, is something to be worried about for the industry, as it’s only this year that the industry has managed to revive its performance after last year’s poor show due to the sluggish economic conditions.

P Balendran, VP, GM India also opines that high fuel price would have a negative impact on the demand scenario in the short term. Going by his words the industry may witness a drop of around 5 to 10% in sales over the next month or so. But then, as per industry reports, Indian car makers, be it market leader Maruti Suzuki, Hyundai, Tata Motors, Ford or General Motors, have posted record sales in July (prices of petrol and diesel were hiked in the last week of June). While Maruti’s sales have surged 29.18% to record the auto maker’s second monthly sales of over 1 lakh units during the year, passenger vehicles sales of Tata Motors has jumped by a whopping 62%. Similarly, domestic sales of Hyundai Motors India Ltd have jumped over 24% up during the last month. However, for pessimists considering just one month sales figures may be myopic to reach to any conclusion, but then considering the fact that fuel prices were deregulated in June, this should have been the month with the maximum of the impact.


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Wednesday, August 29, 2012

The absence of any specific contectual factors of the UPA-I

In the absence of any specific contectual factors of the UPA-I, the present government seems to be taking a completely neo-liberal approach. by nilotpal basu

The government’s neo-liberal approach manifest in the severe adverse conditions that the aam aadmi is faced with as a result of the spiraling prices of essential commodities – particularly food. The government has refused to act to do anything meaningful to redeem the situation. The price question is being attempted to be dealt with through monetary measures and tinkering of the interest rates. While nobody is contesting that agricultural production – particularly food production has to be enhanced – but the fact remains, today, the main problem is distribution. 6 million tonnes of foodgrain lies stored in our godowns – part of which is as the Supreme Court has observed – in a state of rot. The government has persistently refused to release them to the poor and the vulnerable through the Public Distribution System.

Overall, the conditions of the people – the aam aadmi – has been precarious during this tenure of the UPA government. The economic situation is not changing for the better and the aam aadmi is at the receiving end. Their condition becomes even more unbearable in the phase of the huge gains that the ‘high and mighty’ have come to enjoy. These are highlighted by the pronounced display of corporatisation of politics and charges of cronyism. The social and the political tensions create a situation of palpable disquiet.

The situation and the government’s critical role ought to have been set out through an articulate direction. Primarily, as is the fundamental requirement of our Constitution, the Prime Minister ought to have led the charge. Prime Minister’s stoic silence to respond to the aam aadmi’s aspirations has been an overwhelming feature of the last year. And, that itself is an eloquent statement!


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Tuesday, August 28, 2012

How many of us give a real answer to this question when asked across a computer screen?

Though these results can’t be extrapolated to draw conclusions about the Indian situation, one can’t deny the dependence on digital socialising that surely has changed the nature of social interactions. “I am quite a regular on Facebook thanks to my daughter. I’ve traced several old friends through this network. We’re in touch through e-mails, but then meeting personally as regularly as you e-mail is definitely different. Visiting a profile page isn’t as real as visiting your friend’s home and therefore, his or her life. Half our stories are told by the setting and the mood of our houses. Personal interactions build trust and comfort. In digital interactions, the veil always remains. In those ‘only positive’ digital discussions, there isn’t much room for discussing the grey areas of life and that’s why this sense of disconnect and a feeling of lack of real friends,” suggests 52-year-old Kanika Wali, a homemaker, from her personal experiences.

While inept use of great technology can still be blamed for creating a social disconnect among its users, similar rationalisation by psychologists for lack of empathy in present generation seems short-sighted. This hypothesis ignores that they grew up with abundant resources, undivided attention and constant protection. Perhaps, it will still take the world a while to realise that screen interactions (for now) can only help in finding long-lost friends and sharing memories, and not in creating new stories!




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Monday, August 27, 2012

CHINA-PAK NUKE DEAL: NUCLEAR SECURITY

The on-going Sino-Pakistan nexus is highly dangerous for long term global peace and stability

General David Petraeus, Commander of US Central Command suspected Pakistan’s involvement with Taliban and other terror groups during a hearing by Congressional Committee. China’s ostensible logic that the US-India nuclear deal automatically justifies its assistance to Pakistan makes no sense. Only a clear lack of logical reasoning or a blindly biased viewpoint would lead someone to paint India and Pakistan with the same brush.

The Chinese argument for extending assistance to the Chashma reactors is twofold. First, it will be built under the nuclear watchdog IAEA’s guidelines, and hence be for peaceful purposes. Second, it is not defying NSG protocol, as the original deal was struck in 1985 (before formation of NSG). To India’s despair, US and its allies in Western Europe are fence sitting on this critical issue. Obama does not want to antagonize China, whose support he will need in more pressing problems like the sanctions on Iran. On China’s part, it is another indicator of its intent to put pressure on India. What the Western world fails to comprehend is that this could have deadly repercussions for the whole world.

Source : IIPM Editorial, 2012.

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

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Friday, August 24, 2012

THE MIDDLE PATH APPROACH

IT’S NEITHER AN EXTREME OF ADVENTURISM NOR AN EXTREME OF CONSERVATISM, THE APPROACH THAT INDIA’S LARGEST PRIVATE SECTOR BANK, ICICI BANK, NOW SEEMS TO FOLLOW IS THE MIDDLE PATH

It was on May 1, 2009, when Chanda D. Kochhar took the reins of ICICI Bank from her mentor Kundapur Vaman Kamath who had transformed ICICI – a crumbling development financial institution – to India’s most visible universal bank. For Kochhar, who was instrumental in establishing ICICI Bank during 1990’s, and who successfully built the nascent retail business with a strong focus on technology, innovation, process re-engineering and expansion of distribution and scale, the timing of her taking over as the Managing Director & CEO of India’s largest private sector bank was indeed challenging. The going was certainly not great, the global liquidity situation was tight, and it was absolutely a burgeoning task for her to steer the bank through the period of financial turbulence.

It was just a few months (September 2008 to be precise) before her appointment as the MD & CEO of ICICI Bank, that the bank had to confront baseless and malicious rumours regarding its financial strength, as well as news that some of the top management had been selling shares for the last few days. It was around the same time that Lehman Brothers collapsed and given the sparkling timing of the collapse, ICICI Bank faced an unprecedented crisis with speculation mounting that its exposure to Lehman held enough potential to wreck the whole bank. The edgy traders hammered the stock down and nervous depositors queued up outside the bank premises to withdraw their money.

In a short period of two weeks or so, many people had unanswered questions on their mind and withdrew their deposits from the bank. The deposits of Infosys Technologies Ltd. in ICICI bank came down to a mere Rs.100 million from Rs.10 billion over the nine month period (April 2008 to December 2008), citing reasons of “better interest rates and relative safety of deposits”.

But the bank, under the stewardship of Kochhar (who was then entrusted to manage the crisis) was quick to respond to the rumours of bankruptcy. As damage control measures, the top brass came out in the media assuring depositors that their money was safe. The Reserve Bank of India (RBI), too, on September 30, 2008, issued a statement to this effect. But what perhaps was more daunting was the bank coming under fire in the media for allegedly using strong arm tactics to collect credit card and loan outstanding amounts.


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Thursday, August 23, 2012

WELCOME TO THE NEW AGE WAR OF WORDS

SUTANU GURU ANALYSES HOW ACTIVISM IS EMERGING AS ONE OF THE BIGGEST CHALLENGES FOR CEOS IN THE 21ST CENTURY. HE ALSO ARGUES HOW ACTIVISM HAS OFTEN ENDED UP SAVING CAPITALISM

Power corrupts and aboslute power often corrodes common sense. No matter what your ideology, you will agree that this is one of the fundamental lessons – or maxims if you please — that has literally brought Capitalism to its knees since the autumn of 2008. Look at it another way: everyone seems to agree that the real reason for the existential crisis that has thundered across capitalist societies is the apparent absence or utter failure of regulation. Put it even more simply, Capitalism faces its gravest crisis since the Great Depression of 1929-33 because the system of checks and balances that is supposed to function in a free market system and a democracy virtually collapsed. Hubris, arrogance, myopia and even megalomania seem to have replaced common sense vision as glorified CEOs and bean counters strutted across Wall Street like Lords of the Rings. If they had listened to the common sense voices of what we can now portray as “activists”, Wall Street today would not look like an ageing harlot who lives under the delusion that she is Marylin Monroe re-incarnated.

Yes, we come to the most cliched and arguably most abused terms in contemporary times of angst and anguish — activism and activists. In this 21st century, as globalization gathers pace relentlessly and as technology enables citizens to access what was once the privilege of the high and mighty, the CEO is realising that he can ignore activism at his own peril and he might even end up destroying his company if he underestimates the power of activism. Name a theme or a a cause and you will find a hyper ventilating and often angry swarm of ‘activists’ who appear determined to make governments and companies “do the right thing”. They can force General Motors to make safe cars; they can force Nike to use more humane labour practices in China and also force Ratan Tata to relocate his Nano plant out of West Bengal. Yes, it is time the 21st century CEO realised this simple fact: growing corporate power will now frequently confront the growing power of activism. The activists have possibly nothing to lose except their ideology; the CEO and his company can lose tens of billions of dollars in market capitalization!

Many seem to think that activism is a recent phenomenon. But I would disagree. Personally, I think the now discredited ideology of Marxism was the single greatest feat of activism in modern economic history of the world. It is trade unions inspired by the vision of Karl Marx that finally convinced the wealthy and the powerful that not sharing wealth with workers would inevitably lead to revolution. Henry Ford might have brutally treated his workers; but he knew that they could also be his customers.


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Wednesday, August 22, 2012

GEORGE WORTHINGTON, CHIEF ECONOMIST, ASIA – PACIFIC IFR MARKETS, THOMSON REUTERS

Bold but politically unpalatable reforms such as freeing up the labour market are necessary to permit a higher rate of sustainable, non-inflationary growth

Most important for sustaining rapid growth over the medium term is increased spending on infrastructure. While the dire fiscal situation precludes anything like the massive state-driven outlays on roads, rail, ports and airports seen in China, the private sector is picking up some of the slack as new roads and other facilities in major cities demonstrate. Billions of dollars’ worth of investment being undertaken by mobile telecoms providers reflects confidence in India’s growth story. Access to foreign capital by Indian firms will be crucial to fund booming investment over the next decade. Further liberalisation of the foreign investment regime is likely to progress only slowly, and there is a risk that rising inflows provoke tighter regulation or controls as the authorities focus on the currency.

Another potential barrier to sustained investment growth is the public-sector’s massive deficit. The government’s funding requirement, if not brought under control, risks crowding out private-sector capital expenditure. Pending tax reforms and revenue from sources such as the recent spectrum sale will help narrow the budget gap, but a stronger commitment to reforming the state sector and further disinvestment is needed to ensure a sustainable fiscal position in coming years.

Faster trend growth in the economy would help also improve the government’s balance sheet, and though the way to that goal is clear, the will is not there. Bold but politically unpalatable reforms such as freeing up the labour market are necessary to permit a higher rate of sustainable, non-inflationary growth. For the governing coalition, such issues are likely to be put in the too-hard basket for now. But even without such positive developments, the next few years should see the Indian GDP expand by an average of at least 8% on the back of solid private investment and rising consumption. In that context, local markets and investment opportunities will prove attractive for international investors; attracting capital for a virtuous cycle of growth and investment will not be a problem for India’s increasingly dynamic economy.


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Tuesday, August 21, 2012

Scarlet on the red carpet

Though she might look stunningly gorgeous when walking the red carpet, the truth is that Scarlett Johansson actually gets all nervous and sweaty when 101 cameras are flashing at her on the red carpet! Though she likes the hair and make-up part and also choosing from umpteen pretty dresses, she definitely doesn’t like walking the red carpet after that! We wonder if this little piece of information makes the millions of men who break into a sweat at her sight feel any better!


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Monday, August 20, 2012

THE NEW AGE ENERGY IMBROGLIO

While the upstream regulator has enjoyed a relatively clean track record until the RIL-RNRL fracas, the downstream regulator is yet to get really started by Virat Bahri

Considering how our hydrocarbon reserves are a rare and precious national asset, the role of a strong regulatory body with the highest levels of competence and ethical standards becomes all the more paramount. And in the upstream sector, DGH was supposed to play that very role when the New Exploration Licence policy was instituted in 1993. The government had realized then that with the increasing role of the private sector, there was the “need to establish an agency that could effectively supervise the activities of all these companies in the national interest.” The DGH’s primary role includes reviewing exploration programmes for adequacy, technical and financial evaluation of development plans of commercial discoveries, review of reservoir performance at major fields, collection and preservation of data/samples related to discoveries (subsequently sharing with prospective bidders), advising the government on award of acreages, et al.

It was widely believed that DGH was playing a neutral and admirable role until the turn of this century, the years when late former ONGC Chairman Subir Raha was at the helm. Officials at ONGC continue to be critical of what they allege as unfair treatment meted out to them in favour of private operators like Reliance. They claim that ONGC had substantive discoveries around D6, but DGH took needlessly long time to approve the same. The fracas between Subir Raha and the ministry over the latter’s wish to appoint DGH director V. K. Sibal on the board is well known in business circles.

The killer blow really was the clear bias that Sibal showed towards RIL Chairman Mukesh Ambani during the gas row between the Ambani brothers. RIL had cited that its new price for gas was justified since the production cost had gone up from around $2.47 billion in 2004 to $8.8 billion by 2006. Anil Ambani’s RNRL contested the claim, also alleging that RIL was artificially keeping production low due to lower demand for the gas at the higher price of $4.2 per mbtu. V. K. Sibal sided openly with the elder brother and gave total approval to the increased investment estimates. Sibal even stated that the CAG had approved the capital expenditure in 2006, but CAG denied it. Media took up the cudgels on the issue of Sibal’s daughters being provided flats by RIL in Mumbai. The CVC decided, based on these parameters, that Sibal’s term should not be extended, even though the Ministry of Petroleum and Natural Gas had asked for the same. The data is critical, since the government enters into profit sharing agreements with exploration companies once they recover their costs; so a deliberately inflated cost would ultimately mean loss of money to the government.


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