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Friday, May 31, 2013

The Indo-Uzbek tango

A primer on how Uzbekistan’s affirmative relationship with India and the future

The Uzbek-Indo relations trace back many years. They were always based on mutual respect, appreciation of regional and global role, as well as a common cause to enhance bilateral ties in all fields of interest. In Uzbekistan, we have a strong feeling of admiration and respect for India’s great contribution to the history of mankind through its ancient and marvellous civilization.

Recently, on January 26th, India celebrated the important holiday – The Day of the Republic. At that day of 1950, India adopted its first Constitution, which has laid a foundation on the principles of democracy and secular country. The Constitution was juridically a well-drafted document and it combined all the needs of Indian society. This important detail confirms that the Constitution stands as a guarantor of political stabilization in the country. During more than 60 years of independence, India has excelled in all spheres, such as economy, politics and social reforms. Nowadays, the Indian economy is on a high growth trajectory and is also the second fastest growing economy in the world.

At the moment, India makes its own satellites and launches them; it has progressed in spheres closely associated with exploration of space and has started up several atomic nuclear stations to provide its population with electricity and power. It should be noted that all aforementioned economic and social reforms, as well as achievements were reached only in a democratic way. India aspires to develop peacefully, since there weren’t any significant revolutionary changes and social clashes.

In this light, the significance of the mutually beneficial cooperation with South Asian countries, particularly with India, in the framework of fostering regional security has been repeatedly underscored by the President of the Republic of Uzbekistan H.E. Mr. Islam Karimov.

India’s leadership among South Asian countries, thanks to a number of objective geographical, demographic and economic parameters, is bolstered by its active regional policy. India’s position on ensuring political stability in South Asia has a significance for all dimensions of regional security

Now, India is one of the most worthy partners of Uzbekistan. Every year, Uzbekistan’s relations with India have been progressing – this is also because there has been historical friendship between the two nations. The high-level mutual visits are frequent and political trust and friendly cooperation is on the rise. India is closely associated with Uzbekistan historically and culturally. The world recognized India as one of the cradles of civilization, appreciates its ancient philosophy and rich culture. During several high level visits in these decades, the two sides discussed a number of issues such as extending bilateral partnership, talked about international and local conflicts, regional security and providing stability, struggle against terrorism and extremism.

At the moment, Uzbekistan and India have established a solid juridical base between the two countries. It consists of more than 70 interstate, intergovernmental and interdepartmental agreements. There is an exchange of many cultural, economic and other delegations regularly between parliaments and governments of India and Uzbekistan.

On November 29, 2012 in Delhi, the sides held a round of political consultations between the delegations of ministries of foreign affairs of the Republic of Uzbekistan and India. The sides discussed the realization of bilateral agreements signed in the framework of the State visit of the President H.E. Mr. Islam Karimov to India in May 2011.

In May 2011, President H.E. Mr. Islam Karimov paid an official visit to India and the two sides signed a list of agreements which provides for and ensures the development of a long-term constructive partnership. It has served as a grand milestone in the history of the bilateral relations, and means that the Uzbek-Indo relations have entered a new stage of development. And it clearly shows that the two sides have a common wish to develop the friendly cooperation.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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

Tuesday, May 7, 2013

Indira Gandhi’s proudest moment: Victory of 1971

Events that led to the surrender of the Pakistani forces in 1971, saw Indira Gandhi earning the name of ‘Iron Lady’. Her uncompromising attitude won India a war that even four decades later, is highlighted in history books as event that made India proud of its empathetic foreign policy and powerful armed forces

Forty one years ago on December 16, 1971, the Pakistan Army – under the-then the commander of the Eastern Command of Pakistan, Lt. Gen. A. A. K. Niazi – surrendered to the Indian Army at the Dhaka Racecourse (also known as Ramna Racecourse ground) in Bangladesh. The surrender of the Pakistan army – before the-then commander of the Eastern Command of India and the General Officer Commanding-in-Chief of the Indian and Bangladeshi forces, Lt. Gen Jagjit Singh Aurora – was a landmark event that will be remembered as one of India’s most glorious moments. Also, India’s victory over Pakistan and the birth of Bangladesh (the erstwhile East Pakistan) have gone down in history as the-then Indian PM Indira Gandhi’s biggest achievements.

The victory of India over Pakistan in the war of 1971 has been one of the most successful wars ever fought in the history of democratic India. It became a shining example of how resolute leadership at the political and military levels can bring desired results. This war not only resulted in the surrender of 93,000 prisoners of war but also brought a new country into existence. What was so special about this episode? It happened to be the only instance that saw a new nation being born as a result of a war between other nations.

In many ways, it was the 1971 victory that made Indira Gandhi the icon that she is today. It was also a time of some hardcore nationalistic diplomacy during a time when the whole world had turned against India for its decision to go ahead with the war. The United States had exercised an enormous amount of pressure to avert India’s attack and even threatened India with dire consequences. But Indira Gandhi chose to ignore it.

Under Indira Gandhi’s leadership, India provided shelter, food and medicines to about 10 million people who in their attempt to escape attacks by the Pakistani army, fled East Pakistan to flock to the states of West Bengal, Tripura, Meghalaya and Assam. India extended full support to the Bangladeshi freedom fighters providing them arms and training facilities. India sent its troops to fight against the Pakistani forces under a Joint Command with Bangladesh – at the fag end of a nine month-long war that put Bangladesh on the world map. The success was achieved with the support of civilians and well-organised rebels under the ‘Mukti Bahini’. Indira Gandhi’s stand was also solidly backed by the erstwhile Soviet Union.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

ExecutiveMBA

Sunday, May 5, 2013

"It is one of the ideas I am most proud of"

Dr. Li Ka-Shing doesn’t really need an introduction. With a net worth of $25.5 billion, the Hong Kong business magnate has built one of the greatest business empires. In this interview, he speaks about the goals of his charitable giving and the role of his gifts in transforming lives through learning

Can we reflect a bit on the idea behind the Li Ka-Shing Foundation? It would be great to have some insight regarding your motivation to set up an independent foundation, and perhaps about the particular aims that the foundation’s projects have tried to further. You have referred to it in the past as your ‘third son’ Li Ka-Shing (LKS): It is one of the ideas I am most proud of. Maybe even the idea I am most proud of. I had made donations before [the Foundation was set up in 1980]and giving had been part of my life ever since my companies had achieved enduring success. But, I was worked over by thoughts about what would happen if times would turn bad and cash would be tight and scarce, and by the fact that without a system and an independent entity that implements it, this philanthropic work could not develop and grow on its own. Running a business is difficult work and takes a lot of time and attention, and there are additionally many temptations which could lead one away from the hard work that philanthropy requires. Then, early in the morning, I had the thought of creating the Foundation and thinking about it as a ‘third son,’ an independent, autonomous entity that would pursue its mission, stay true to its course and have the resources to do so.

The ‘third son’ metaphor is particularly suggestive for Asian cultures – educational, even.

LKS: That is true. In fact, I refer to the Foundation as a ‘him’ in some of my messages, to reinforce the imagery of personhood. It is a powerful metaphor in a culture where wealth is passed predominantly along family lines. Thinking about an instrument for doing social good as a child – as your child, in particular – focuses you as the giver on building an entity that is robust, one that has inner strength.

It is relevant that the over-arching goal of the Foundation is ‘to promote a culture of giving’ for which the Foundation itself is a paradigm example?

LKS: This is true. There is an example in the act of setting it up, especially in a culture in which these organizations are unusual. But, the Foundation tries to develop and nurture a culture of giving within its projects as well. For example, we have built and are supporting hospices for terminally ill cancer patients in China. To date, we have built 42 hospices that care for 20,000 terminally ill patients every year, enabling them to spend their last days in comfort and dignity.

I sense a strong commitment, a bias, even, towards projects – such as the hospice for the terminally ill and the surgical cleft lip and palate repair centres that address, and redress slights to human dignity. Would you agree?

LKS: I do feel a special commitment to helping people lead their lives in dignity. As is often the case, it relates to a personal experience. I was 15, and my father had passed away a year earlier. A relative whose circumstances were even direr than mine and who was having a very difficult time making a living in Hong Kong said that she needed to bring her children back to Chaozhou. I gave her enough money for food for her whole family during their long boat journey back to mainland. This was a heavy burden for me at the time, as I was poor, and had to work hard to support my own family. But she had no one to turn to except me. On the day that they were to depart on the ship, she came to me, crying. She said that all the food they had prepared for the six-day journey had been stolen. I had no other resources. But I felt compelled to help her. So, I took the clothes that my father had left behind and pawned them for cash. It was my first and only time in a pawn shop. I took the cash, bought food, and returned to the pier only to see that their ship had just raised the first sail to set off. I hired a sampan to go after them, but a sampan is no match for a sailboat in terms of speed, and we fell farther and farther behind. But, I noticed that everyone on their ship had gathered on one side, waving to me and yelling something I could not understand. I was too far away to hear what they were saying. The ship finally raised all three sails and gained greater speed. We went after them for over an hour to no avail. Finally we had to give up and turn back. I was certain I had disappointed my relative and I felt heavyhearted. Later, I received a letter from her. She had returned to her home village. She said that my attempt that day to catch up to them to give them food had touched the captain and all the passengers. They all shared their own food with her family. My attempt had gained her their respect. The passengers on the boat were shouting at me to go back because they wanted to let me know that they would themselves take care of my relative and her children. They took care of her, because they saw that she was cared for by someone else. This episode will always stay with me. It shows how care can restore and even create dignity, which, once created, begets more care.

Read more....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

ExecutiveMBA

Thursday, April 25, 2013

Can JSPL keep its global expansion plans on track?

Jindal Steel & Power Ltd. (JSPl) has reasons to cheer as it has been able to deliver growth in profitability for the past fiscal when the entire sector has been facing severe margin pressures. But in the midst of environmental and regulatory hurdles back home and an unfortunate debacle in Bolivia, can the company keep the investor sentiment bright? Ashish Kumar of B&E undertakes an insightful visit to the company's Raigarh plant and interacts with senior officials on how they plan to keep the growth story going
When you land on the airstrip of “Jindal Airport” inside the three million tonne per annum capacity integrated steel plant of JSPL at Raigarh, the first thing that strikes you about this once sleepy town in the state of Chhatisgarh is the visible abundance of yellow metal. And no, we don’t mean gold, but the numerous yellow coloured JCB machines and cranes that keep the town bustling 24/7, a sight unimaginable over two and a half decades ago.

As is the norm with industrial townships, the plant area stands out as an island of affluence relative to the surrounding area, and the company has painstakingly endeavoured to provide its employees with every possible facility. In fact, to further secure their commitment, the company provides stock options to all employees, from the topmost official in the plant to the driver who took us around the area. However, the influence of the company on the town is quite evident when you talk to the locals around, so much so that a sizeable number of them prefer to deposit their hard earned money with JSPL for safekeeping, rather than with the five odd bank branches in the area! While the Jindal Hotel in Raigarh has no relation to the group (just a case of clever branding), the town has a state of the art auditorium set up by the company, where locals can watch the latest movies. JSPL has also provided mobile healthcare vans, among other facilities, as a part of its drive to ensure harmonious relationships with the community there. So far, their land acquisition drive in the area has been successful (read: no major flare up, even though all locals haven’t accepted the compensation/R&R/employment terms), making it rare in a milieu wherein numerous projects have been stuck in land acquisition controversies.

However, there are some very serious stakeholder issues that JSPL hasn’t been able to maneuver its way through as well. It faces the ire of the Coal Ministry due to delayed development of the Jitpur coal block allocated to it in Jharkhand (along with 29 other companies who got coal mining blocks). Their proposed 5 million tonne per annum steel green field project in Jharkhand is stuck for quite sometime due to this. Moreover, while the company has taken several initiatives to minimise environmental degradation like making bricks and cement out fly ash and planting some 3 million trees (initiatives that were visible in and around their Raigarh plant), it has also come under close scrutiny of the environment ministry for beginning construction work in the non-forest area for the Angul steel plant in Odisha, before the forest area was cleared by the ministry. In addition, the National Green Tribunal cancelled the environmental clearance for their coal & washeries plant in Chhattisgarh, as it claims that the public hearing of the matter was not conducted in the right way. Land acquisition issues have similarly cropped up with regard to the Rs.350 billion steel plant project in the West Midnapore district in West Bengal. Commenting on the issues, N. A. Ansari, whole- time director and executive director, JSPL Raigarh laments, “Lack of clear cut policy measures has affected not just us but the whole sector. Regulations need to be practically feasible and consistent to reduce the environment of uncertainty.”

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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
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IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Wednesday, April 24, 2013

The next ‘Red’ wave!

‘Multi-polar world order, political dynamics, economic transformation’ – if you’ve had enough of all these terms and want to understand China, then this is the book that can help without taking a toll on your head

When Fareed Zakaria (in his book The Post American World) says that we are moving towards a multi-polar world wherein America will have to factor in the position of countries like China and India, then it must mean something. There are hundreds of authoritative commentators out there writing about the rise of China. Unfortunately, most of them are based out of China. So what we generally get to read is a ‘view from the top’. From that perspective, Shaun Rein’s The End of Cheap China: Economic & Cultural Trends That Will Disrupt the World comes across as one of those rare, reliable handbooks that one can pick up to actually understand how China has become one of the world’s most influential economic and political centres in a short span of time, and where it’s headed from here on. As a writer, he attempts to answer what everyone is wondering, “What is China evolving into and what does that mean for the rest of the world?” What makes Rein’s book the real deal is his background. He first came to China as a teenager in the 1990s when the government was pushing for a major privatisation of the economy. At that time, the market was inefficient: buying a plane ticket was a nightmare and fresh milk was non-existent except for in 5 star hotels. More interestingly, members in his wife’s family were personal friends with Zhou Enlai and Mao. This helps Rein in portraying the dynamics of the relationship between China’s masses and governments. Additionally, he is able to draw on inferences from data compiled by his market research firm over a decade. When you have access to such insights, something compelling is bound to come forth. In the book, he interviews billionaires, senior government officials, poor migrant workers and even prostitutes to track China’s changes. There are chapters on modern Chinese women, lessons from China’s sex industry, and how Chinese demand for commodities will cause tension with the rest of the world. Rein goes on to analyse how companies can benefit from these changes and argues that China will successfully make the transition to a modern developed economy. If you happen to be a businessman who wants set up operations in the Mainland but don’t know much about the country, this book is a good place to start.

Read more.....

Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

Sunday, April 7, 2013

Forward march to revisit past fallacies!

Instead of taking a close look at its own policies that led to the recent public agitations, The government is now looking at ways to attack freedom of press, just for being the carrier of bad news.

Prime Minister Manmohan Singh on August 30 announced the setting up of a group that will specifically deal with regulating the media in order to make it more accountable. The decision was taken at a cabinet meeting, which saw some adamant pressure from members who were upset with the way the media covered the anti-corruption agitation of Anna Hazare. According to sources, there was also a strong belief among a majority of the PM’s colleagues that the entire movement was actually fuelled by the media. In the wake of these developments, the government is now looking to devise ways and means to address the issue by curtailing exaggerations in press reports. Some of the ministers have even been critical of the ‘anti-government’ slant in the coverage, and have been pressing for curbs both in the Cabinet meeting as well as in the newly-constituted Group of Ministers (GoM) on media and paid news. The composition and powers of the group are not clear yet. Interestingly, the government says it wants to put curbs on the media without curbing the freedom of the press.

The last time that India witnessed a regime of media censorship was in the 1970s when Indira Gandhi had imposed emergency rule in the country. The suspension of all civil and political rights soon followed and so did political censorship. In fact, this continues to be the only dictatorship that modern India has ever witnessed till date. To be fair, the recent move by the present government cannot be compared with the Emergency, but the agenda to control free speech looks alarmingly similar and, as experts put it, deplorable and regressive.

The Anna Hazare movement is not the first instance where the government failed to gauge public sentiment. Neither is this the first instance that the government has tried to curb the freedom of the press. In 2007, the government came out with a draft Broadcasting Services Regulation Bill, tagged as the country’s ‘most sweeping attempt to infringe on free speech’. Serious concerns were voiced on the belief that live telecast of the 26/11 Mumbai strikes had helped the Pakistani terrorists. The government had then proposed restrictions on live telecast of such emergency situations, permitting only “authorised feeds” to be telecast. The proposed law, which is still under consideration, is actually the result of a Supreme Court decision in 1995 when the court mediated a dispute over telecasting rights of a live cricket match. The court deemed India’s airwaves a scarce resource and “public property”, which should not be monopolised by the government or private broadcasters, but regulated for national interest. The Apex court recommended that the government create an independent statutory body to act as the custodian of airwaves. The proposed move saw some stiff opposition from media agencies who took up the matter with the PM. In their representation, the editors said the proposed measures to “gag the electronic media” had caused immense disquiet in the journalistic fraternity and among all those who believe in the right to freedom of expression.

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 28, 2013

A Question in Time... of Time!

In This well Entrenched analysis, B&E’s Angshuman Paul goes Inside The Legacy Organization of Emami and breaks down Various Issues The Group is Addressing... most to do with Succession Planning and Strategic Orientation.

When you visit the Kolkata Head Office of Emami Group at EM Bypass, you get an immediate feel of a penchant for tradition. Exactly 15 large statues (or statuettes, if you may) of the elephant God Ganesha jump out to catch your attention in the lobby of Emami’s corporate office. It’s obvious that they’ve been placed in that order to make a very definitive point to the critical visitor – and a point that reaffirms the essence of this organization, the family way of doing business. It’s quite obvious that this penchant is as prevalent in the management philosophy of the corporation, from the structure, to leadership, to the way span and scope of control has been built, and obviously, to how succession planning has been laid out in this well and truly Indian corporation.

Entrepreneurship Professor John Davies at Harvard Business School wrote in one of his papers that “in family businesses (companies whose ownership is controlled by a single family)... the lack of effective governance is a major cause of organizational problems.” Strangely, however much the world of self-fulfilling analysts and business correspondents like I might wish to the contrary, Emami seems to be an anti-thesis to John Davies’ argument, the outlier, or the exception that remains as a symbol of positive performance for statistical distributions. Emami has remained committed through decades to governance benchmarks that have promoted and encouraged transparency, open communication and almost a matrix approach to behavioural management.

At the same time, unlike their rival company Dabur, which has been particularly keen on trying out almost each and every new jargon in the stream of professional management, Emami has stuck steadfast to the belief that the family-way to run a business, is the right way. Uniquely, theirs is a closely knit group despite the business currently being run by the children of the two founders – R. S. Agarwal and R. S. Goenka – who are in fact unrelated by blood, though they have an identical first name of Radhe Shyam, and apparently even schooled together.

From the early 1970s, when Emami started manufacturing cosmetic products from just one small factory in Kolkata and distributed products through hand pulled rickshaws, today, when Emami is in a position to create products that can be game changers in the Indian FMCG world, the growth has been superlative – some opportunistic, some opportune. For example, when Fair & Handsome was launched, the first year generated Rs.270 million, and resultantly created a market of men’s fairness creams worth Rs.2 billion. Today, the Emami brand occupies a turnover of around Rs.1 billion, purely driven by a well timed opportune exploitation of the Indian male’s cosmetic sentiments. At the same time, Navratna and Boroplus are the undisputed front runners for the company at an annual turnover of Rs.3 billion each. Today, the company has factories in Kolkata, Abhoypur, Amingaon, Panthnagar, Baddi, Dongri, Silvassa & Vapi. From undertaking exercises in brand extensions, the company has now set up an R&D division, which spends about Rs.400 million on research into FMCG products. It is now increasing presence by at least 10,000 stores per year. If that’s how family-businesses are run, then perhaps the anti-thesis to Davis’s theorem is truer in India than the truism purported in his original conjecture.

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

Monday, March 11, 2013

“We Believe that all The Channels Will Co-Exist”

Kensaku Konishi has been leading the Initial surge of Canon in India that began from 2006, A surge he attributes to Major Strategic Realignments and the Aggressive Pursuit of Localised Campaigns. In this Exclusive Discussion with Virat Bahri, He talks about the Company’s long term plans in India and the Recent Key Initiatives being taken to Build on The Initial Momentum.

B&E: What were the major strategic changes you took when you joined Canon India operations?
Kensaku Konishi (KK): When I came here, first of all people’s responsibilities were not clear. They simply liked to do it function by function. When we talked about camera for instance, not one person could tell me the reason why the sales was bad. That is why we changed our organisation from function-based to product-based. We set up separate copier, camera and printer divisions and appointed division heads with authority and responsibility. That also upped their morale. Secondly, we also needed more people as sales is a very local oriented activity. It was about taking care of channel partners and end users. Earlier there were only 400 people, we doubled up to 800. We started the city campaigns as well. The Indian market is very big. Our share was small, so we could not adopt nation wide campaigns. So we launched citywide campaigns. All resources were put into a city, including people money, et al and we also focussed on channel contacts, partner meets, training, et al. Through these activities, we improved market share. In 2009, we had some campaigns like print city campaigns to conduct such activities city by city together. Since the beginning of this year, focus has shifted to tier 2 and 3 cities as well. We use trucks as mobile showrooms carrying all 80 different models and visiting tier 2 and 3 cities. That creates a lot of enthusiasm and noise in the local city.

B&E: What is the significance and rationale behind the recent foray into exclusive retail stores?
KK: Earlier, the home market was just cameras for us. Now we do believe that a lot of homes are using printers. We realised that the home market is getting much bigger than before. We learnt that from our Image Express initiative when we went to tier 2 and 3 cities like Udaipur, Jaipur and Indore. A similar number of printers and cameras are being sold at single spots in these cities. There is definitely a big group of people using printers in their homes. Shopping patterns of new families are also changing. Many people told me, when I came here, that shopping malls are great in India; people go and see but do not buy. Now they’re buying – movies, restaurants, apparel as well as electronic gadgets. Unfortunately, our traditional retail shops sometimes do not have the kind of scale to go to such shopping malls. They are normally satisfied with a growth of 10-15%. That is why we will intentionally open our exclusive stores in such kinds of busy and modern shopping malls or streets to conduct our sales. We now have traditional channel, national retail chains and brand shops. We believe that all these will coexist because of the diversity of the customers, and this brand shop will improve the brand image for the customers and help our channel too.

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Sunday, March 10, 2013

POLICY LEAD: GREEN BUILDINGS

United Nations Environment Programme (UNEP) has stated that “No Other Sector has such a High Potential for Drastic Emission Reductions then the Building Sector”. India can be a Major Contributor to it if its Green Building Revolution picks up but for that, Government Policy and Private Sector must work in sync.

Exclusively for green buildings, the globally recognized Leadership in Energy and Environment Design (LEED) certification system established by the US Green Building Council (USGBC) is present in India as LEED India run by the non-profit organization India Green Building Council, a part of CII. Currently, it has more than 700 registered and 120 buildings in 2010 alone with around 1500 buildings registered and around 300 certified since the system's inception in India. But, it's in cost premiums incurred by developers of green structures wherein lies the twist in the tale. Or is there a twist? As per numerous experts, the total capital investments in a green building are just 3-5% higher than that of a conventional building. On the other hand, the breakeven for a green project occurs within 4-5 years, atleast 2-3 years earlier than conventional cases owing to reduced energy usage mostly in air-conditioning and maintenance. As per Chandrashekar Hariharan, CEO and Co Founder of Bangalore based BCIL, a major green building developer in South India, “There is indeed no extra cost. However, it must be added that where there are additional elements -- such as air-conditioners or any other facility that one builds as an energy-efficient feature, one should look at paybacks. The cost of such amortization of capital are low today extending some times to as much as 7 to 15 years, thanks to the very low tariff regimes for energy, water and waste collection. Our cities have to stiffen these prices. This is imperative for encouraging new technology and to improve payback frameworks."

The real difference lies in the category of a building. A majority of investments in India and globally are into commercial green buildings simply because of basic difference that commercial properties are leased out in more than 90% of the cases while residential property is almost always sold to the end consumer. Thus, for an office space, the long term benefits accrued through savings in air conditioning etc are huge for the client making it viable to pay a premium for the same. Its only in case of high end residential space where customer is more sensitive about the product than the price and can consider paying extra for a green residence while in the mass market low/mid end residential space, customer is extremely price sensitive prohibiting entry of green developers.

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Wednesday, March 6, 2013

B&E’S POWER TALK SERIES

Managing Director and CEO, IDFC, Defends his Strategies to B&E’s

B&E: What is your capital adequacy ratio at the moment and what is the outlook for the period ahead?
RBL: According to the RBI guidelines 75% of our assets must be invested or lent for infrastructure projects. We must always maintain a capital adequacy ratio of 15% at any point of time. But we are doing a good job and are operating with a CAR that is much more than 15%. Our capital adequacy stands at around 25%.

B&E: Your current balance sheet size is only Rs.350 billion? How do you expect it to grow over the next five years?
RBL: No one can predict the future. So it is hard to comment. But, our balance sheet has grown over 30% in the past 5 years and I am sure that the growth will be faster in the years to come. Moreover, with increasing private participation, the country’s infrastructure sector too is set to fly high bringing in lot more opportunities for us. We have a very robust prospect to grow our balance sheet size in the next few years.

B&E: There are a lot of environmental concerns related to infrastructure sector. How do you see these affecting the sector and IDFC?
RBL: It will certainly have an impact on the whole infrastructure sector. But if you see this from IDFC’s point of view, bulk of our investment is in power projects and it is certainly different from constructing a road. A power project enjoys a greater degree of freedom as compared to a highway project. Environmental issues will undoubtedly affect the infrastructure sector, but I think, over the next 5 years, the sector still has enough opportunities for the company to grow rapidly. As far as our investments are concerned, we have taken all the necessary approvals and we will continue to do that on a continuous basis.

B&E: There are complaints coming from the banking sphere that Infrastructure Finance Companies are enjoying an unfair advantage over the banks because now they can raise funds through tax free bonds and External Commercial Borrowings. What’s your take on this?
RBL: I do not think it is true because there is an upper limit on the amount that we can raise through these sources. However, I think competition is healthy for the industry. It is really important for us to tap domestic savings and overseas funds to finance our infrastructure growth as the country still needs a great amount of funds to meet its infrastructure development dreams.

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Tuesday, March 5, 2013

Tehran has the last laugh on the Arab streets

As America shapes its Iranian discourse on the flawed logic of Arab’s Persian mistrust, Tehran has the last laugh on the Arab streets, says Saurabh Kumar Shahi

The results can barely be reassuring for those who would like to deem that the Islamic Republic is becoming alienated from its regional neighbours and that Arabs are all set to be on their feet alongside Israelis to shore up military exploits by Israel or the US against Iranian nuclear mark.

Among the respondents, 57% thinks that Iran’s nuclear programme is intended at developing nuclear weapons. Nonetheless, 77% of these exclusively Arab respondents perceive that Iran has the right to follow its nuclear programme; only 20% consent that Iran should be stressed by the global community to discontinue the programme. The figure for the support is up from 53% in 2009.

Ironically, in Egypt and Morocco, two of the Arab countries whom the West perceives as strongly anti-Iran, 81% and 84% respectively consider that Iran is within its sovereign right to do so. Even in Wahabi Saudi Arabia, around half of the population wants Iran to develop such weapons and consider that act rightful. However, the most extraordinary conclusion in this year’s poll is that 57% of the respondents consider that Iran’s attainment of nuclear weapons would be a positive and constructive outcome for the region, whilst merely 21% deem this to be a negative outcome.

This strengthens this magazine’s estimation that however much a few Sunni Arab privileged – and they are not many frankly – might wish to witness Iran being “cut down to size”, there is extremely diminutive popular support for conflict with the Iranian regime on the Arab alleys.

It appears Washington has been building its perceptions about things based on the views of Arab diplomats and so-called experts who have been widely out-of-sync with opinion on the streets. Asked to rank the two nations that pose the principal threat to the Arab world, 88% of the voters named Israel and 77% named the US – the top two scorers on this query, by orders of enormity over any other nation on the globe. Contrary to that, merely 10% Arabs think Iran to be a bigger threat than both these countries. And just to put it in perspective, these polls were not conducted in Syria, Iraq, Qatar and among Gazans and other Palestinians – the groups who are supposed to be pro-Iranian and staunchly anti-American.

And if that was not enough, when asked to name the world leader that they approve of the most, 12% of the Arab respondents named Iranian President Mahmoud Ahmadinejad. It makes him the third most admired leader in the Arab world – after Turkish Prime Minister Recep Tayyip Erdogan and Venezuelan President Hugo Chavez. “Arab perceptions of the US are shaped principally through the prism of the Arab-Israeli question. And Arab perceptions of Iran are truly the function of perceptions of the US and projection for harmony in the Middle East,” says Hillary Mann Leveret, an Iran watcher based in Washington DC, while talking to B&E.

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

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Friday, March 1, 2013

Sanjiv Batra

Chairman, MMTC with jayant mundhra on past, present and future of the company...

One of the mini ratna public sector enterprise Minerals and Metals Trading Corporation of India (MMTC) is not only one of the leading bullion traders in the country, but also recognised as an assaying and hallmarking centre for gold jewellery by the Bureau of Indian Standards. Also, a co-promoter of two of India’s brand new exchanges — Indian Commodity Exchange Limited and United Stock Exchange Limited — MMTC has a track record of uninterrupted profit and dividend payment for the past 40 years. In a bid to woo retail customers of gold and bullions in the country, the comapny has recently tied up with Gitanjali Jewellers for the ‘Festival of Gold’ a jewellery exhibition to showcase quality jewellery. In an exclusive interaction with B&E, Sanjiv Batra, CMD, MMTC, talks about the present trend in the Indian gold market and how the comapny is planning to leverage it. Excerpts:-

B&E: How has been the journey of MMTC since its inception? Are you planning to move ahead?
SB: The company was incorporated in 1963 to regulate the international trade of minerals and metals. From a turnover of Rs. 67.79 crore in the first full year of operations (1964-65), we have grown by leaps and bounds to a turnover of over Rs. 45,000 crore (for financial year 2009-10). At present, we are trying to bring in more machinery to India to produce as many as 356 tonnes of gold and 144 tonnes of silver per year. The journey has been an encouraging one, and indeed we are learning everyday.

B&E: The recent economic turmoil has impacted almost all companies across the globe. How did you manage to sheild yourselves?
SB: Let me tell you about a survey that we did in 2006 in connection with the acceptance of the gold that we were producing. After surveying our distributors, we found that as many as 90% gold sales was heading south. But post-2007, when the economic turmoil hit the market, things started changing in our favour. The economy might have gone down, but the demand and price of gold remained strong throughout the period. Moreover, the upheaveal in the country’s share market encouraged investors further to go for gold as a safe bet. And such a trend in demand was unseeen till last year. However, till March this year, we witnessed 240 million tonne of gold. This trend helped us to grow strong even during the slowdown.

B&E: Does price play a significant role when it comes to gold in a market like India? How are you using the potential of the market?
SB: Gold is always considered as an asset and it is the surging demand that encourages its growth. Besides India, the trend is similar in other countries too. It was only during 1999-2003, when gold prices were unstable. For the past seven years, the prices have gone more on the positive side. Interestingly, this has happened despite many crises happening on the way.

India has always seen a strong demand for gold. If you look at the figures, this year we had to import more gold so as to meet the domestic demand. This clearly indicates that despite trading at a high price level, the passion for acquiring the yellow metal has not received a dent in India. While the gold production in the world is receding, India is showing a complete different scenario. Since our market is internal-driven one, if the Indian consumers are happy then it’s really good for us.

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Thursday, February 7, 2013

So what do we do about burning cars?

As car manufacturers double up efforts to ensure cars don’t catch fire, it is important for customers also to understand how they might be ‘the’ problem in such incidents. by Pawan Chabra

The email came directly from Nikkei in Japan to us some time ago. The question was quite straightforward: “Have you heard about the Nano units catching fire? Do you think you can get inputs for us?” For once, despite our immodestly sensationalist bent, we were given to defend the various incidents that were being alluded to by the Japanese media giant. Without doubt, a photograph (like the one yours truly has provided above) of a car burning brighter that Roosevelt’s July 4 celebrations, especially of a model that has been at the top-of-the-charts for the most part of last year, is enough to let the Marxian spin doctors weave their immediate socialist hypothesis of why they always knew that small and cheap cars like the Nano would have lesser quality parts, with almost all the commentaries ending with, “Didn’t we tell you?” We’d say, pretty wrong!

Firstly, the facts. Yes, Nanos have caught fire – and those cases are well documented; one suspects more so because of the hype with which this small a-promise-is-a-promise-car was launched. How many new car brands have been launched with this kind of rabid coverage? Ashok Raghunath Vichare, the buyer of the first Nano, is a mini-celebrity in his own way, after having received his from the Chairman of Tata Sons and Tata Motors, Ratan Tata, under massive media coverage. Almost the same coverage was provided to the episode involving a Nano that took place on March 21, 2010 at Mumbai’s Eastern Express Highway. Just 45 minutes had passed after an insurance agent Satish Sawant had collected his brand new Nano from a showroom in Prabhadevi, when the car – while he was driving it home – burst into flames. A similar incident involving a Nano happened in Vadodara (Gujarat) on April 7, 2010 – and there, all the Gueveras jumped out of their graves demanding immediate justice.

Tata Motors’ spokesperson Debasis Ray is more forthcoming, when he accepts, “There were three separate incidents in September and October 2009 of smoke coming out – not fire – from behind the steering column and localised meltdown of some plastic parts in three Tata Nanos. Those incidents were traced to a defective combination switch. Supplies of these switches were changed immediately and further issues have been comprehensively addressed since then.” As per him, the two fire incidents that took place have already been investigated by a team of experts, highlighting that the Nano has all the required certification by the Automotive Research Association of India, the designated authority under the Ministry of Heavy Industries, Government of India, for road safety and other parameters.

While it makes sense to criticise any car manufacturer for manufacturing defects, the fact is that many incidents of cars catching fire are not really linked to issues with the manufacturers. Ajay Seth, a Delhi-based businessman, had a near death experience when his Hyundai Accent caught fire due to a leakage in the LPG pipe. However, Seth was unable to claim the damage from the insurer as his car had a retrofitted LPG kit which literally didn’t have any certification. The case was similar with Pramod Sharma, another Delhi-based businessman; who opted to give his car to a neighbourhood service centre instead of an authorised service station. The car caught fire during the servicing process and the dashboard console soon turned to ashes. “Though the owner of the garage didn’t charge for the damage, my car has been continuously troubling me since then. I am planning to sell it rather than continuing to invest in it,” Sharma tells B&E.

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