Mr. Prime Minister, I will try my level best

A couple of hours ago, I happened to watch our Prime Minister, Dr. Manmohan Singh, address the nation. Given the spate of criticism faced by the government in the wake of corruptions and controversial reforms, the public at large felt an address to the nation was long due. Even his self-proclaimed “khamoshi” (silence) that was meant to save the “aabroo” (dignity) of the corruption laden nexus of corporates and politicians, wasn’t successful at all.

These are some of my observations from the PM’s address to the nation. Before you proceed, I would request you to either go through the text of the speech or the video so that we can have a more meaningful discussion.

Identify your "Consultant Type"

Consulting as a profession has been growing steadily with more and more firms setting their base in India. Consulting landscape has also been helped by maturing of Indian business set-up as well as growing popularity of professional courses like MBA. But joining a particular industry, sector or a profession, is just the beginning. After all, our professional career could well span over 35 years. Similarly for consulting, while problem-solving skills, analytical capability and a consistent academic record may help you join a good consulting firm but it doesn't ensure that you would enjoy your stay as well.

As I complete my first year in consulting, I have tried to come up with a framework, based on one's interest areas, to suggest what lies in consulting for him/her. I have tried to simplify it by using two major focus areas and I would once again reiterate that it doesn't talk about the capabilities that you need to excel as a consultant.

Five common challenges that Consultants face in India

The idea of penning this blog came to my mind, when I decided to take stock of my short but eventful stay in consulting. At the start of my consulting career, I got to interact with a few US based partners or principals (as they call them over there) and it gave me some insights about how consulting works in the US. My further interactions with Indian clients and colleagues tells me that India is different from its foreign counterparts. In this post, I will focus on five major challenges that consultants usually face in India. Before igniting the discussion, I must say that the list is not exhaustive and the challenges may differ based on the consulting firm one is associated with.  

Interest rate hikes: Has the time to apply brakes arrived?

The RBI interest rate policies despite evincing lots of interest have become predictable off-late. Given the fact that the last 13 revisions have resulted in rate hikes, there is an understandable gloom associated with it. Our personal loans are getting costlier, buying your dream home isn’t easy, budding entrepreneurs have seen the cost of capital head north etc. Before we discuss further, let’s first try to understand the rationale behind these rate hikes by RBI. 

The policy being referred to is “Monetary policy” by which the monetary authority of a country like RBI, controls the supply of money by controlling interest rates; monetary base and reserve requirements. The policies are designed keeping in mind, the rate of economic growth, inflation, unemployment or exchange rate. The current RBI policy also referred to as contractionary policies, seeks to address the high inflation levels in India by suppressing demand. The rationale is that higher interest rates would lead to less borrowing thereby reduced investments and demand for capital goods. In addition, higher interest rates will also lead to people saving more thereby reducing consumption i.e. demand.  

Seems logical and sound, isn’t it? It is, but empirically it has been established that monetary policies are effective in targeting price stability, exchange stability and financial stability in short term or at best medium term. The Reserve Bank has so far, hiked its key policy rates 13 times, totaling 350 basis points since March 2010 i.e. the hike has been continuing for more than 18 months.  

The US Double Dip: It could well be a reality

Initially the experts predicted a V shaped recovery i.e. a fast recovery for the US but then shifted to the left in the alphabetical order i.e. U, a slower path to recovery, but the existing scenario might push them further to the right i.e. to W or double dip. A look at the common economic indicators like unemployment rate, growth rate, rate of inflation or interest rate etc. would tell us that the future is murky. Add to that the increasing clout of countries like China or should we say decreasing impact of US on the global setup is only worsening the cause. The inability of the US to force appreciation of Yuan is a case in point. The usual backers of US like UK, France, Japan are themselves deep into crisis so no help can be expected from that quarter. The world economy discussing “decoupling” shows that the perception is that the US is lonely as well as depleted in its battle with recession.

Karl Marx & Mckinsey: Thought Leaders?

I am no fan of jargons as unlike simple words they don’t focus on the meaning i.e. clarity of thought. But one term mainly used in B-schools, firms or you can say the business world has been intriguing me a great deal. In fact if you go deep into its meaning, you would find that its influence lies beyond the corporate world. The term that I am referring to is “Thought Leadership”.

Leadership is about making an impact

Due to a busy schedule saketvaani couldn’t come up with any post in the month of January to ignite the discussion. So this is the first blog of the New Year and even though a bit late, I’ll take this opportunity to wish you all a happy new year. In this blog our point of discussion will be leadership. I’ll share some of my learnings from a course on leadership which I must say has been a very enriching experience.

Let us first define leadership. Leadership is about doing meaningful things or making your people see meaning in things. If you ask me the single biggest thing that’s important to leaders then my answer would be "their ability to make an impact". This is the parameter on which they are judged. So we may debate whether Hitler was a success or a failure but what we can say with certainty that he had an impact.

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.

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.

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. 

Women corporates: the key to better balance between growth and risk ?

So, the gender issue is back. We are again debating the existing divide between the male and the female workforce. But thankfully the issue doesn’t pose itself as a problem this time.Rather, it tries to find a solution. It aims to strike the right kind of balance between growth and risk in the business world. The recent financial turmoil has ensured that we debate it now else it will be too late. So, the million or should we say the billion dollar question is: Is increased women participation the key to better balance business growth and risk?