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Thursday, December 23, 2010

Entrance exams: Are they asking the right questions?

The last decade has been a decade of changes and reforms. You can also include the entrance or competitive examinations to that fold. In this post I’ll discuss some changes as well as existing gaps in various competitive examinations.

There was an era when three posts were considered to be the most prestigious in the Indian set up. They were the PM (prime minister), the CM (chief minister) and the DM (district magistrate). When it comes to competitive examinations, three of them stand out for their rigor. They are IIT-JEE (for entry into the IITs), CAT (for entry into the IIMs) and civil services exams conducted by the UPSC. Let’s consider the changes in the formats of respective examinations one by one and consider the likely fallouts.

Monday, December 20, 2010

Akshaya Patra - "Feed the children" initiative

This post is a bit different from my past ones as it’s my humble attempt to espouse a noble cause. At the end of the blog, even you would come across an opportunity to make a difference. So let’s begin. By the way your mere click has ensured that 50 underprivileged children would be fed today.

Wednesday, December 8, 2010

IIT & IIM: Do we really need to expand?

As India looks to outpace other countries in terms of economic growth - higher education, because of its criticality, is in the limelight (better late than never). With the focus being on higher education, two of the best known Indian Institutes, IIT & IIM find a mention in our day-to-day discussions. As efforts are being made to increase the number of IITs & IIMs , questions are being raised whether that's leveraging the brand or diluting it?
We do know that India needs more quality educational institutes. With the claim to fame of many IITs & IIMs being “one of the toughest institutes to get into”, it’s more a commentary on the paucity of seats rather than intellectual rigor. So doing nothing is not an option.
Before I start putting down my views, I would bring to your attention a group that opposes expansion of IITs & IIMs even if brown-field i.e. increasing capacity of existing institutes. They argue that it might commoditize the brand (make no mistake quality is not their concern). Such arguments make no sense as IITs & IIMs are not Guccis & Armanis. IITs/IIMs stand for quality not exclusivity. 
Let us now look at some pressing concerns that justify the “need to expand”.
“During 1955 to 1975, the growth rate was high (10.5%) as the IITs were being set up and establishing the UG programme. In the next twenty years, there was a slight increase in the output (less than 1% per year). Since 1995 the growth rate increased to 4.2% per year mainly due to the addition of IIT Guwahati and IIT Roorkee.”
Source: ENGINEERING EDUCATION IN INDIA (2007)

The above data clearly shows that we need Greenfield investments i.e. open new IITs & IIMs as they mainly power the growth in intake. In fact IITs that accounted for 5-8 % of total output of engineers in 1980s now account for less than 1%. 
Many feel that expansion might lead to quality of education being compromised with. It’s a valid concern and needs attention (I will try to come up with remedial steps in the later part of the blog) but do you feel that the quality of new colleges will be worse that the existing private set up where students are forced to join if they can’t make it to the sought after colleges. I don’t think so as the “quality gap” is so enormous that we would certainly find the new ones, in terms of quality, somewhere in-between.
Even though IITs & IIMs might be under funded by global standards but they are still much better off than their Indian counterparts. So the question is whether we would be better off opening new colleges under new names rather than using the umbrella of IITs & IIMs? My answer would be that the name provides them greater attention and care which a new institute desperately needs. NITs have been greatly benefitted by the tag.
We all have great faith in the brand name of IITs & IIMs. Are these brands that weak that expansion would dilute them to the extent that it threatens their existence? That’s not the way, great brands operate. In fact, if properly carried out, expansion would only strengthen them. Greater student & alumni base would mean greater reach, influence and impact. Mind you, it would come in handy when we face the onslaught of foreign universities. By the way these are the outputs of some well known international engineering institutions: Urbana-Champaign 1950 degrees, Purdue 1840 degrees, Georgia Tech 2300 degrees, Tokyo University 3000 degrees, Tsinghua university about 4000. (Source: ENGINEERING EDUCATION IN INDIA, 2007)
Let’s now look at some of the methods that can expedite quality enhancements at the new colleges:
  • With increased intake, we must aim at increasing the bandwidth of well known professors i.e. number of students that s/he can address at a given time. This can be facilitated by ICT based live or recorded lectures. Technological intervention would also help in facilitating better educational aids or resources. The Masters as well as Fellowship programmes need to be strengthened as well.
  • We have buddy system in place where an old IIT/IIM mentors the new IIT/IIM but that doesn’t include student set-up. Peer learning and mentoring by seniors can help students at new IIT/IIM catch up faster. We should provide online platform to facilitate such exchange of information. Student exchange programmes can also be incorporated to facilitate co-operation. 
  • At least for the first few years, mentor IIT/IIM should help out their new members with their placements. It might seem unthinkable given the sort of competition but modalities can be worked out as new IITs/IIMs have relatively fewer intake.
  • Private sector, both India and abroad, have been the biggest beneficiary of the outputs of IITs/IIMs. PPP model for faculty development where industry provides visiting faculties or funding can be looked into. The academic exposure would benefit the employees as it could be a welcome break or “going back to basics” for them. It would be a win-win situation for both as private sector stands to gain through quality output and colleges through quality faculty.
Some reach out only for the riches whereas some reach out to help each other out. So if alumni and students of established IITs/IIMs reach out to their newer counterparts, they can certainly consider themselves better IITians if not prouder. Else a caste system in the intellectual and educational set up is in the making as there is a very thin line between being elite and being elitist. Please avoid it.

Tuesday, November 23, 2010

QE II and the recovery story: Is it time for austerity?

(The article was adjudged the best entry at Consilium – The Policy Design Competition at IIM Lucknow)
Quantitative Easing II better known as QE II has been globally the most  discussed phenomenon in the recent times. Through this mechanism the US Federal Reserve will buyback 600 bn US$ worth  of bonds, at about 75 bn US$ a month, and infuse newly created money in the system. The buyback follows the QE I that saw an infusion of 2 trn US$.

The step can lead to lowering of interest rates or yields in the US thus incentivizing investors to look for greener pastures abroad that provided greater returns. Considering the deflationary concerns in the US and the unusually high unemployment rate, “doing nothing” was not an option for the regulators. With Chinese not allowing Yuan to appreciate to the levels acceptable to the US, Fed through QE has taken it upon itself to undo the “trade imbalance”.  QE through lowering of interest rates aims at spurring demand as well as consumption. This will generate jobs as well as lead to appreciation of asset prices which have touched new lows thus leading to foreclosures and defaults. As far as global economy is concerned, even they can benefit through FII inflows.

Tuesday, November 16, 2010

Bihar: The road-map to prosperity

For the past few weeks, I have been going through various panel discussions, books, blogs & news articles, both national and international that had some relevance or relation to Bihar. Through this blog dedicated to Bihar, my focus will be on laying out a roadmap for a prosperous Bihar. I will include the findings from the above exercises as well as inputs from discussions that I had with my Bihari as well as non-Bihari friends. Let us now start our expedition.


Thursday, November 4, 2010

The Marketing of a Movie


The idea for writing this blog came after I had an almost-live experience of coming across a press conference of the Akshay starrer Housefull (though I sensibly avoided it) when in Ahmedabad. In this blog I would discuss the different stages and ways in which buzz about a movie is created i.e. how a movie is marketed? I would limit myself to only those aspects that pitch the movie to the audience rather than a director pitching it to the producer or to the movie star.


Let’s take the first step of this journey which is also known as the muhurat or the launch. The first few selling points could be the star couple, launch of a new star son or daughter, the acclaimed director or coming together of the pairs rarely seen together. Subhas Ghai’s Saudaagar that saw late Raj Kumar pitted against Dilip Kumar generated a lot of interest as historically as per rumors ego-clashes kept these actors from acting together.  The example of Saawariya that sank without a whimper but was in the news regularly due to launch of Ranvir and Sonam is a case in point. The off-screen chemistry or gossips about the lead couple have been traditionally exploited to create a much needed first impression. The prestige of the occasion is measured by the quality of the audience rather than its quantity i.e. which celebrities made it to the launch.

Sunday, October 24, 2010

Why will the 50-overs format be soon over?

Which are the most awaited series in cricket nowadays? Some may say Ashes, some may rate Border-Gavaskar trophy as their favourite or some may even find Aus-SA test match rivalry exhilarating. Well if I ask you to limit yourself to the “limited overs” format, IPL might be the one to go for. Some cricket enthusiast might even include Champions league T20 (though I won’t). Now let’s qualify it even further. How many 50 over series or tournaments are on your radar? You might vote for Champions trophy. Can you come up with a few more? Seems tough, isn’t it?

Now it’s the turn of the players to pick their favourites. You will find the Aussies and the Poms engrossed with the Ashes or the Indian team bragging about their No.1 tag. The Proteas consider winning Test series in Australia as their biggest cricketing achievement. Come IPL and you would find players braving injuries to showcase their talents. In fact it has even affected their commitments to their national teams.  


Wednesday, October 20, 2010

The Decoupling Theory

One term that has been doing the round nowadays on the web, on biz news channels or newspapers is “Decoupling”. The decoupling theory holds that Emerging economies have broadened and deepened to the point that they no longer depend on the United States or Europe for growth. Emerging markets (EMs) are nations with social or business activity in the process of rapid growth and industrialization. So let’s start our exploration of the decoupling theory (DT) now.

Decoupling as we all know is separating or detaching. But what’s the reason that we hear so much about DT? The two likely reasons are shaky recovery of the developed economies with V shaped likely to make way for a U or even worse W shaped recovery and the robust performances of the emerging economies like China & India.  So what does DT entail for the world economy? One, it signifies the growing strength of the developing countries as well as weaning strength of the countries like US & UK. Add to that it also tells that emerging countries are gaining self sufficiency i.e. consuming what they are producing within themselves.


Thursday, October 7, 2010

Public Offers made Public - IV

After introducing Public Offers in the first part, discussing some regulatory changes in primary markets in the second part, pros and cons of the 25% listing norms in the the third part, the fourth and the final part will focus on ASBA, another revolutionary change by SEBI.

ASBA or Application Supported by Blocked Amount is a new method introduced by SEBI for making investments in IPOs, Mutual Funds and NFOs. SEBI has tied up with self-certified syndicate banks which shall provide this facility.

Monday, October 4, 2010

Public Offers made Public - III

After introducing Public Offers in the first part and discussing some regulatory changes in primary markets in the second post, the third post will focus on the pros and cons of the recently proposed 25% listing norms.

On 4th June 2010, the Ministry of Finance amended the Securities and Contract (Regulation) Rules, 1957 to set a limit of a minimum 25% public shareholding for initial public offers (listings) by companies on Indian stock exchanges as well as for continued listing.

Friday, October 1, 2010

Public Offers made Public - II


After introducing Public Offers in the first part, the major focus of the second part of the series will be to discuss some of the Regulatory Changes in Primary Markets in the recent past and their likely implications.

Reduction in IPO timeline from 22 days to 12 days: Market regulator SEBI has amended the existing rules regarding the time period between closure and listing of IPOs. The window has been reduced from 22 days to 12 days.

Public Offers made Public - I

In this series of blogs, I’ll focus on some of the recent changes in the regulations related to public offers. I will also discuss some of the likely impacts of these changes. In the first part I will introduce public offers in brief.  


In order to finance their expansion, firms rely on different methods to raise capital. While deciding the mode of financing, the company looks at different aspects of capital i.e. cost of financing, amount of capital required, capital structure, size and reputation of the firm etc. The primary methods used by corporations to raise capital are: Bonds, Stocks, Borrowing & Retained profits. In this blog we will focus on the stocks as a method of financing.


Friday, September 24, 2010

The Theory of Relativity

Friends, just like most of us, even I am not fascinated by the complexity of Science. So you can be rest assured that this post is not about scientific applications of the theory of relativity. But the essence is derived from it. That’s why this theory assumes so much importance as it touches us every day. Let’s explore how?

Einstein's theory of time and space, special relativity, proposed that distance and time are not absolute. The ticking rate of a clock depends on the motion of the observer of that clock; likewise for the length of a "yardstick.” So if you haven’t guessed yet, this post is about Relative Grading. A much used term in academic set up especially in the past few decades. As the common saying goes, “Nothing is absolute, everything is relative.”

This is how IITK introduces Relative Grading, “Many ideas and things were shipped from Washington DC to Kanpur. When a packet from one of these shipments was opened, a brilliant proposal of adopting "relative grading" emerged. And IIT Kanpur was amongst the first, in the country to adopt this relative method of evaluating performance.” Their inputs have been used in the following paras to shed more light on this topic.

Monday, September 20, 2010

Rebranding in Real Life

After discussing a few social issues, college experiences and even movies, this time we’ll discuss marketing in real life i.e. not limiting ourselves to consumer products. The topic for this discussion will be 'Rebranding'. First let me define it. Rebranding is the attempt or an exercise, usually by an established brand (which could be a company, a person etc.), to develop a new position in the minds of stakeholders which could include customers, competitors, fans etc. It’s mainly an attempt to keep oneself relevant with changing times.

Thursday, September 16, 2010

One day of Entrepreneurship

This blog is an outcome of the fun we had fulfilling a course requirement. Yes, you heard it right. The course was or should I say is “Managing new Ventures” and the assignment was to come up with a venture with an investment of Rs. 1000. The activity could include selling food items, providing printing services, consultancy etc. We were divided into teams of six each and given a week’s time to show and present our learnings. It was an exciting task given the opportunity to become an entrepreneur for a day.

Now I will share my learnings that we had about entrepreneurship after the task and class discussion. I know it would be premature on my part to come to a conclusion after a very short stint in a predictable environment but nevertheless a few generic but exciting things did come to the fore.

Monday, September 13, 2010

A peep into "Peepli-Live"

"सरकार मरने का पैसा देती है!” This line pretty much forms the basis of the storyline of Aamir Khan produced film: Peepli Live. In other words, "a farmer in need of money would prefer to commit suicide if the government gives him muaawzaa (compensation)". You all might be wondering if I am trying to do a movie-review in this blog. Well my answer would be a Yes as well as a No. Yes because I will discuss the different realms touched by this movie and a No because this blog is not a commentary on the quality of filmmaking or acting or for that matter the music of this movie.


Friday, September 10, 2010

The Anonymous Whistle-blowers

During our college days, we all have either experienced or heard about ragging. But occasionally some of us have been rescued by the timely intervention of anti ragging squad. No, I am not going to discuss ragging in this blog as I am still not sure what is the exact definition of ragging? Rather I will discuss something that has really put me in moral dilemma. I would like to share it with you to see if we can find a solution. Going back to the earlier example, the anti-ragging squad is usually tipped off by one of the juniors i.e. the sufferers. In order to avoid the wrath of the seniors, that junior informs the administration more often than not anonymously. He does this to avoid being ostracized by seniors or sometimes even by some juniors (some consider it as fun). Juniors undergoing ragging do shower silent praises on such a person. After all he is nothing less than a savior for them. He does what most wanted to do but didn’t have the courage to do so.


Wednesday, September 8, 2010

The Past, The Present & The Future of Asia.

We all love keenly contested battles. Isn’t it? Such contests can take place on the sports ground, in the academic setup, on the battlefield etc. The one such battle that I am going to talk about, is taking place on the global scale. It’s the battle to become the next economic superpower of Asia. In this blog I’ll discuss the three countries that look set to stake their claim for the Numero Uno tag. The great thing about this contest is that we could have three different leaders at three commonly classified points of time i.e. the Past, the Present & the future. So, let me break the suspense on the trinity (if there was ever one). They are Japan, China & India. Let’s us analyze their strengths, weaknesses and the possible road ahead.


Sunday, September 5, 2010

Can you Spot Match-fixing?

After raising some of the issues related to our student lives, this time I would focus on a topic that I would, honestly speaking , not have wanted any further discussion on. The topic is “match fixing”. Back in the early 1990’s when I devoted considerable time analyzing even remote things associated with cricket; I was really shocked when a series of well known cricketers were implicated in it. It was disturbing to say the least as I really loved the game and still continue to do so (though the time devoted has come down considerably)    
But it seems that greed is too humane a tendency to buckle down against feeling of patriotism, professionalism or ethics. The incidences over the years have thrown some interesting features about this phenomenon or should I say menace. Let us discuss a few of them.  

First is the variety of ways in which bets can be placed or different ways in which outcomes can be influenced. Those familiar with betting on soccer games especially during the recent FIFA world cup must be aware of odds being placed on more than just the final outcome of the match. It could be number of corners, red cards, yellow cards, goal difference etc. Similarly other sports also provide enough opportunities as well as ways to bet. I will discuss two types of fixing that normally take place in cricket and try to see if both of them finally converge at some point or substitute the other in different formats. 


Thursday, September 2, 2010

The side-effects of Campus Placement Process

In my previous blog, I tried to jot down some of the benefits that the campus placement process has brought. Most if not all of us would agree that campus placement has been one of the most positive development in the field of education and has increased the purchasing capacity of the Indian youth with its wide reach.

Tuesday, August 31, 2010

The Campus Placement Process

Scene 1: The setting, early 1980s. Rakesh has done his father proud. He has made it to the coveted government engineering college. He is the first engineer from his locality. Well-wishers have made a beeline to his home. They have garlanded him and the sweets are being distributed to one and all. The boy, who was better known by his nickname “Raju”, has a new name now; “engineer sahib”. There is glint in his eyes. This glint symbolizes excitement. He knows that the road ahead is not easy. He will have to fight it out for the few available government jobs when he passes out after four years. But he is least worried rather he is excited about joining the engineering college. He has heard great things about it. It’s a temple of learning to him. He is keen to learn under the guidance of a few well known professors as well as eager to quench his thirst of knowledge at the institute’s library and laboratory, two things he sorely missed at the district schools and colleges.

Thursday, August 26, 2010

Out Of Home but not Out Of Sight

Don’t worry I am not going to share stalking techniques through this post. Rather through this blog, I will try to break the monotony of topics based on finance and social issues. I will try to share my learnings from one of the projects I did with an FMCG major. It came under the ambit of Sales and Distribution.

Some if not all of us must have noticed that right from the time we wake up and till we finally go to bed, consumer products especially FMCG ones touch us on various occasions be it while bathing, eating, shaving etc. But the plethora of options available to you at the nearby retail stores would have given you a fair indication that there is a lot of competition in this sector. So firms are looking at different ways through which they can reach out to their customers at different places and at different times. This is where the concept of OOH or “Out of Home” comes to play. The appeal of this topic lies in its innovativeness as it adds a “service” dimension to what used to be a purely “sales” product.

Sunday, August 22, 2010

The Need for Indian Case Studies


After a hiatus of almost three weeks due to the academic projects, exams and the launch of The Money Manager-the pan-IIM finance magazine, Saketvaani is back with you to ignite the discussion. This time the focus would be “the case for Indian case studies”. Though all of us may not be familiar with case studies but you can use words like journals, research papers etc. interchangeably for cases. First let me tell you the reason behind choosing this topic.

I have finished almost 70% of my MBA education in an Indian B-school and most if not all the cases that I have come across are prepared by foreign B-school (read Harvard Business School: HBS). Should it really be a cause of concern as haven’t we been brought up mainly on books by foreign author? So why complain now, that too in a B-school clamouring for global recognition?

Monday, August 2, 2010

Bonds and Bonding

Have you ever tried to find out what similarities do the financial instruments have with our day-to-day activities? Some might be wondering for the logic behind this question whereas some might say that it’s too obvious as the instruments are meant to take care of our day-to-day financial needs depending upon our incomes and risk taking capabilities. Let me put a more specific question; what are the similarities between Fixed Income instruments and relationships in real life? Before you start guessing let me simplify the task by defining the two terms. By fixed income instruments, I mean those financial instruments that help you earn low but fixed returns on your investments thereby reducing your risk. The most well known example is bond. On the other hand by relationships, I mean those existing between a boy and a girl or a man and a woman. I am counting out those arising out of family ties, friendships or those existing between same sexes. In better words let’s limit ourselves to those relations that might culminate into marriages.

Monday, July 26, 2010

Is regulation the only way to create sustainable cities?


There has been too much emphasis off late on regulations being the only way to create sustainable cities. Through this blog, I would like to express my opinion on the above mentioned topic. 

I think we can play with the question a bit i.e. we can aim at creating self-sustaining cities rather a sustaining one. This is because one of the prerequisites for sustenance is the participation of the stakeholders and in this case it is residents of the city. For it to thrive, the actions of the dwellers will have to be in sync with the requirements of sustainability i.e. taking care of the environmental concerns, politically acceptable and economically beneficial. I know this balance is hard to achieve but so is the concept of “sustainable cities”.

Wednesday, July 14, 2010

Base Rate System : A change for the real ?


(My heartfelt thanks to Mr. G. C. Nath, Senior V.P., CCIL for his invaluable insights on this topic)
There hardly is an adult nowadays who hasn't felt the need or has gone ahead to avail a loan. You can blame it on the increasing consumerism or the inflationary forces. Anyways, I am not going to discuss the rate of inflation or conspicuous consumption rather I will focus on the rate of interest on these loans. These rates were affected by a major change that took place on the 1st of July, 2010. This happening was; "coming into effect of Base Rate System".This blog is on Base Rate System and its likely impacts. 


Sunday, July 4, 2010

Marketing strategy for Vodafone

This presentation was developed for the telecom giant Vodafone as a student project.

video
Is the future bright and orange or dark and gloomy?
Falling revenues, tightening margins, changing regulations, technological changes: the obvious connect is Indian Telecom Industry. So, is the future dark and gloomy for the mobile service providers? Well not exactly. With MNP (mobile number portability) round the corner, the quality service providers do have an edge with the empowered customer now having more choices. Add to that with the spectrum for next generation mobile technology 3G going under the hammer early next, the falling could have a solution. And if you could catch the long tail i.e. the vast untapped rural sector, you might hit the jackpot

Sunday, June 27, 2010

Family creates value

The idea of writing this blog came to my mind when I was in Ahmadabad for my summer internship.Apart from the Gujarati splendor what I witnessed was a quite different type of business lingo. The bosses and the sirs were replaced by bhaiyaa, bhai or even pappa. Even though the firm that I worked for happened to be a B-School but things were no different over there either. In fact this lingo was more common when the discussion was among the higher-ups in the firm.So what was so different about the businesses in Ahmadabad or rather the Gujarati style of functioning? It was the style or type of ownership. They were the Family owned businesses (FoB).


Sunday, June 20, 2010

Too Big To Fail


I have always wondered, why things are so hard to change even when we are at a consensus that they must. Take the case of corruption, inefficient bureaucracy, casteism, communalism... the list is endless. The reason is that they have become "too big to fail (TBTF)". Take the case of government office saddled with corruption. Though a lot of people are at a receiving end due this menace but they are mostly the external stakeholders of this system. On the other hand, those benefiting from it, the peon, the kirani babu and the bada saheb can directly affect this system and most importantly, they are a sizable lot characterized by greed. In order to satiate their insatiable desire, they go out of their way to guard their territory.

Wednesday, June 9, 2010

ICT based distance learning programme - IV

In this fourth and last blog of this series, I will share the framework that I have developed for a model distance learning institute. 
The learner centric model for a Distance Learning institute
Note: C&A:Curriculum & Assessment, LR:Learning Resources, Infra:Infrastructure (Technical and Physical)

Friday, May 28, 2010

ICT based distance learning programme - III

In the third part of this series,I will present the consolidated findings of some of the breakthrough research done in this field.Please refer the First part for Introduction and Second part for the Importance of ICT.

ICT based distance learning programme - II

After introducing ICTs and some common terms associated with it in my last blog, in this part I will enumerate, why ICTs are assuming greater importance in the field of education.

ICTs are a potentially powerful tool for extending educational opportunities, both formal and non-formal, to previously underserved constituencies—scattered and rural populations, groups traditionally excluded from education due to cultural or social reasons such as ethnic minorities, girls and women, persons with disabilities, and the elderly, as well as all others who for reasons of cost or because of time constraints are unable to enroll on campus. With advancement in technology, not only the robustness has increased but so has the cost involved in its deployment.

Saturday, May 8, 2010

ICT based distance learning programme - I

(This is the first of the series of posts that I am devoting towards creating awareness about the distance learning programmes which,if implemented effectively,could play a crucial role in democratizing education. The Second Post will be on the importance of ICT in distance education and the Third will be on the findings of breakthrough researches in this field. In the fourth and the last one, we'll develop a framework for a Distance learning programme.  Looking forward to your comments.)

Distance education, or distance learning, is a field of education that focuses on the pedagogy, technology, and instructional system designs that aim to deliver education to students who are not physically "on site" in a traditional classroom or campus. It has been described as "a process to create and provide access to learning when the source of information and the learners are separated by time and distance, or both." The University of London was the first university to offer distance-learning degree in 1858. Almost all the countries have at least a distance teaching university and many countries such as UK, Australia, Canada,USA and India even offer DE programmes within on-campus universities.

Wednesday, March 3, 2010

Union Budget 2010

(This article was originally written for the CNN-IBN blog)

Burgeoning fiscal deficit, inflation breathing down your neck and the promise to keep the growth story intact, not the best time to be the Finance Minister. Pranab Babu had his task cut out. How does his respond? Does he come up with a populist budget (the WB election issues are there) or he buckles down the pressure exerted by the India Inc.

Let’s try to analyse it under different heads:
 
Tax: 
The new income tax regime ensures that the salaried middle class ends up paying less and the upper middle class lesser. We were just discussing fiscal deficit by the way and the deficit will now go up by 26000 cr. Tax savings by an additional amount of Rs 20,000 for investments in long-term infrastructure bonds are now allowed but is it enough considering the major portion of the savings still finds its way to the savings bank account. I think the FM has missed out here. The excise duty inches up 2% (on car and SUVs) and the oil prices shoot up not because revolutionary deregulation has become a reality but basic duty on petroleum products has been enhanced. So FMCG companies gain as the middle class spends more but who loses out, it’s him again, the ‘aam aadmi’, who doesn’t earn enough to be taxable but still relies on kerosene. Though there was a relief from the service tax front as it stay put at 10%. Raising the rate of Minimum Alternate Tax (MAT) from 15 per cent to 18 per cent of book profits could be the cause of complaint for the infrastructure firms. 

Reforms: 
GST, the tax reforms aimed at uniformity, transparency, widening the tax net and that has found favour in more than 100 nations still seems to be in the dock as no concrete roadmap was announced. Labour reforms, oil deregulation, fertilizer subsidies, the most hotly debated topics considering the existing scenario didn’t get the due attention. So, it seems the structural deficiencies causing deficit are here to stay.
 
Agriculture: 
Nutrient based fertilizer subsidy is a step in the right direction but unless followed up with more radical steps so that the benefits directly reach the farmer, it could be the case of too little too late. Providing project import status with a concessional import duty and full exemption from service tax to installation and commissioning of mechanised handling systems, pallet-racking systems, cold storage, cold room and processing units in mandis and warehouses will reduce the wastages during handling and storage. It’s high time we looked at agriculture as a source of revenue by taxing the rich farmers and passing on the benefits to the marginal and landless farmers. 

Infrastructure: 
It was noteworthy that forty-six percent of plan allocations in 2010-11 will be for infrastructure development. It goes to show that the FM has realised that for the sustainability of the Indian growth story, infrastructure has to be robust. Tax breaks on investments in long-term infrastructure bonds is a welcome step. The major concern would be proper execution of such projects. 

Social Sector: 
Increased allocation to rural development initiatives like National Rural Employment Scheme, Bharat Nirman, Rajiv Awas Yojana for slum dwellers etc shows that Bharat will no longer be neglected vis-à-vis India but the major cause of concern with such schemes have been corruption and leakages in the system. Unless these issues are properly dealt with, they would be a burden on the exchequer. The NREGS too needs to go beyond funding temporary activities like digging up wells, check dams etc. It could be used to develop permanent assets for irrigation. Provision for further capital for regional rural banks will help in credit penetration as well as stop fund leakages as targeted beneficiaries can be directly paid through bank accounts. National Social Security Fund has been created for workers in unorganised sector. This is modest beginning but a much needed initiative nevertheless. 

Other Initiatives: 
Clean energy cess on coal produced in India, concessional duty on solar power rickshaw developed by Council of Scientific and Industrial Research, increased allocation for new and renewable energy are a proof of the progressive thinking of the government but it needs to be sustained to be effective. The higher education was neglected by the FM that too considering the immense possibilities of PPP in this sector. The continuing shortage of skilled workforce should have rung a bell or two by now. 

All in all a budget that will yield positive results if the initiatives are effectively implemented. Else it could be the classic case of, ‘Too much boast, little toast”. 

Rail Budget 2010

(This article was originally written for the CNN-IBN blog)
So, the first Railway Budget of the new decade is now out of the bag. It won’t be wrong to say that it is on expected lines considering the track record of the incumbent Railway Minister, Ms Mamta Banerjee i.e. High on populism.
The good news for the commuters is that the train fares have not been raised. Seven years without any increase in fare, must be some sort of a record in an inflation ridden world. The transportation of essential commodities like food grains, kerosene and fertilisers will attract lower freight rates. Commendable effort provided the benefits are passed onto the consumers.