Friday, May 18, 2018

FDI in Retail

Few years back the country was struggling with the question, " Should India allow FDI in organized retail ? " Since the question seems to affect the livelihood of small grocery store owners, no political party was ready to take the risk to answer it in affirmative. Foreign retailers may also have realized that it will be difficult to get an outright support for such a move in a country like India.

 E commerce since then hit the Indian shores and likes of Flipkarts, Amazon and Snapdeals started giving deep discounts on the power of foreign money which got pumped into these companies. The real motive of the E commerce revolution was to change the behavior of people how they shop by incentivizing the spend through online stores rather than buying from physical stores. The initial promoters may be Indian, but soon most of these companies were owned by foreign PE funds with less than 10% owned by the Indian entrepreneurs. And finally picture got evident with Walmart taking control of Flipkart which is nothing but indirectly an FDI in retail.  Walmart have just replaced the foreign funds , so in the nutshell Flipkart was anyway a Foreign company operating in Indian retail segment so in the nutshell FDI in retail entered India a long time back.

Thursday, April 2, 2015

Ashok Khemka Transferred to Museum Department by BJP Govt

Ashok Khemka, one of the celebrated IAS officer is again transferred from transport ministry to Archaeology and Museums Department, thanks to the Haryana BJP government. Mr Khemka has been transferred for the 45th time in his 23 years of career. Now this brings a question, how different is BJP government from Congress. Ache Din are back for few who do not wanted him in transport ministry.  

Mr. Khemka was trying to fix the problem of overloading of trucks in Haryana. Haryana like most of India has a great problem of truck overloading. Overloading of trucks leads to following problems:

 1. Accidents / Loss of Life : Overloading reduces the maneuverability and control of trucks  which causes hundreds of accidents where innocent people loses life.

2. Loss of Revenue:  Overloading also leads to loss of hundreds of crores of government revenue in the form of state taxes.

3. Damaging Roads: Overloading of trucks is also a big reason behind damaging roads, the road are designed for bearing certain pressure. Overloading leads to higher wear and tear of road causing monetary losses to the government.

4. Environment Pollution: When trucks carry more load than what it is designed to carry, it leads to environmental pollution. The inefficient burning of fuel in the engine leads to emission of harmful pollutants in the environment.

Now with him gone, what are the chances that the next officer taking strict action against truck overloading.  As per some news reports, " Mr Khemka had ordered district officials to penalize such vehicles which caused problem to some"

So the main question which comes to my mind:

Q Who is getting affected by the problem of Overloading? 

A.  "We the residents".

Q What are we going to do about transfer of Mr Khemka. 

A. Nothing, some may write blog, some may like it on FB , some may share but will do nothing. 

Q What should we do?

A.  We should demand reasons for transfer of Mr. Khemka to a department where people like him will be wasted. We should also demand that he should stay in transport ministry.

Q  Who  is to be blamed for such incidence ?

A. Not the politician but we the people who will not do anything sit idle.

Q. Who is to be blamed if a overloaded vehicle runs over someone ? And it can be anyone of us.

A. Please answer

PPF Vrs Kisaan Vikas Patra

I have observed that a lot of people invest in Kisaan Vikas Patra (KVP) or Indira Vikas Patra (IVP) instead of PPF. Although both are debt based investment with equal interest rates. So let  us evaluate both the schemes having already evaluated SSY and PPF. Does investing in KVP/IVP really makes sense? Please refer to the table below

 If we observe the table, interest rates are same for both PPF and KVP, but KVP has the disadvantage of interest being taxed at the time of redemption (EET). So for all the people who fall in tax bracket PPF (EEE) is much better investment. People who do not fall in tax bracket will have advantage with KVP as the interest rate fluctuation risk is not there as the interest becomes fixed at the time of purchase of KVP and it also provide better liquidity.

For people seeking liquidity, KVP is a better instrument but if the investment has been done to avail 80C exemption then premature withdrawal will amount to foregoing the tax gains. Overall if someone is not very keen on short term liquidity ( liquid after 2.5 years), PPF is a much better investment option.

Category PPF KVP/IVP
Eligibility All Indian Residents All Indian Residents
Minimum Yearly Deposit 500 One time Deposit
Maximum Yearly Deposit Rs 1,50,000 No Limit
Duration 15 years, can be extended 5 Years to 7 years
Current Rate of Interest 8.7% (Floating) 8.70%
Complete Withdrawal After 15 year Allowed after 2.5 Years
Partial Withdrawal 50% of deposit after 6 years Allowed after 2.5 Years
Income Tax Benefit Investment Eligible for 80 C Benefit Eligible for 80 C Benefit
Income Tax Benefit Withdrawal Interest / Principal Exempt from Tax Interest is taxed
Accounts allowed per family One account per person No Limit
Loan Facility Loan available on PPF Deposit Loan Available 
KYC Norms Stringent Relaxed

Wednesday, April 1, 2015

Sukanya Samriddhi Yojna Vrs PPF

Government of India announced a new scheme called Sukanya Samriddhi Yojna (SSY) in Jan 2015, which is targeted towards benefitting the young girl child. The rate of interest offered in the scheme is 9.2% which is 50 basis point more than the popular PPF ( Public Provident Fund) Scheme. I thought of comparing SSY and PPF for the eligible population as it will be difficult to choice between the two instruments for most of the people.

All Indian Residents
Only Girl Child Below 10 Year
Minimum Yearly Deposit
Maximum Yearly Deposit
Rs 1,50,000
Rs 1,50,000
15 years, can be extended
21 years Max (For Deposits)
Current Rate of Interest
8.7% (Floating)
9.2% (Floating)
15 years, can be extended
21 years Max
Complete Withdrawal
After 15 year
After attaining age of 21
Partial Withdrawal
50% of deposit after 6 years
50% once girl attains age of 18
Income Tax Benefit Investment
Eligible for 80 C Benefit
Eligible for 80 C Benefit
Income Tax Benefit Withdrawal
Interest / Principal Exempt from Tax
Interest / Principal Exempt from Tax
Accounts allowed per family
One account per person
Only first 2 girl child, 3rd is allowed in case of twins birth
Loan Facility
Loan available on PPF Deposit
No Clarity on it

Overall, the scheme is very good debt investment for the people who ha ve a girl child less than 10 year old. They can open a account in most of the Public Sector Banks or Post Office. The deposits can be transferred to the any location within India in case it is required. The scheme has the edge of higher interest rate with almost all the other benefits which PPF enjoys.

Indian Diet and Cancer Risk

Every now and then we keep hearing that someone has been diagnosed with cancer. Cancer rate are growing rapidly in India. The change in life style and eating habits due to development and wealth are the leading causes of it.  While searching on Google I came across a good study done by Sinha R, Anderson DE, McDonald SS and Greenwald P on cancer risk and India Diet.

This summary table from the research tells us about what is good and what is bad for us in terms of cancer risk.


Saturday, March 28, 2015

Salman Khan Hit and Run..

In 2002 a accident happens. In 2015 Salman Khan finally gives his statement that he is innocent. It took 13 years for our system to bring him to the court of law and still the proceeding are going on. This is not a civil case but a criminal one..

Some of questions that haunts me..

Isn't delay best way to hamper the law. Keep waiting and nothing will happen, you will loose faith in such a system. Why ?

The legal system is for the rich ? Would it take same amount of time if one of the celebrity gets hurt or killed in a drunk and drive case ? I am not sure. Some of the things in this country are not fair.

Does money works like lubricant in the system. Is it a true democracy where people do not enjoy equal legal rights in some sense. God save this country.

Modi ji speaks about problem faced by business man, one of the major issue is non payment by customers. The laws are there but enforcement is too slow. Section 138 does allow for criminal proceeding against the defaults but system can be made too slow by defaulters. Filling of the case takes a lot of time, after which defaulters will not come to hearing 2-3 times, then they will ask for extension of dates.. finally a long time is passed and during the process the businessman may not even survive as cash flow management becomes difficult and even good business plans falls flat. Judicial reforms are a big need of this country. I am waiting for the ache din ..


Friday, March 20, 2015

National Pension Scheme (NPS) Save and Earn..

In times of uncertainty when Job security levels are declining due to ever changing technology, retirement planning becomes very vital. Retirement planning is also vital as most of the private sector jobs do not offer any pension post retirement. It make sense if people make a habit of saving at a very young age to protect the future.

But usually investment in pension funds means  short term pains with a hope of long term gains. Why hope, because a pension plan may not provide us the required return due to market conditions.

Recently announced budget gives few positives of investing in pension funds where the pain of parting with money and liquidity is slightly reduced. People can now directly invest in (NPS)National Pension Scheme for gaining income tax exemption. The exemption was previously available only when the investment was made by employer for employee. NPS now provides us the tax exemption  upto investment of Rs 50000 annually under section 80 CCD which is outside regular 80C limit of 150000 per year. So with this new announcement, it provides us with a dual advantages of both short term gains as well as long term security. People falling in highest tax bracket can save upto 15,000 Rs by investing in the scheme.

People who are not worried about liquidity or nearing age of  60, can benefit the most out of this investment. The money investment in NPS can only be withdrawn at the age of 60. To get benefit for 80CCD, one has to put money in Tier 1 account, where only upto 20% of the sum can be withdrawn after retirement and rest is converted into monthly pension(annuity).

NPS provides multiple option of choosing between various debt and equity capital allocation based on the risk profile of the individual. So one can invest in even pure debt instrument which will provide nearly 7% to 8% return ( based on prevailing interest rates) negating any chances of capital loss. For people in even 10% tax bracket, the first year return will be close to 18% which is not available in any safe financial instrument.

In all its a good scheme who is not short of funds and ready to part with some funds for a long period of time for good long term gains. The only current issue with NPS is the taxability part at the time of withdraw of money or annuity payments. As per the current law the income is taxable at the time of withdraw however the rules are not clear if indexation benefits which are currently available with debt schemes can be applicable. In case the indexation benefits are available, the scheme is still better than debt based scheme. The clarity of this should be brought about by Union Government about it.  I strongly feel that the issue of indexation will be sorted and eventually allowed by the government.


Thursday, February 19, 2015

Why Crude Oil Prices are Falling ?

Crude Oil prices are falling at a very fast pace. The prices have eroded by 50% in past one year which is causing a lot of disruption in global economy. Some of the countries like India who are dependent on imported crude are benefitting out of it and producers like Iran and Russia are bleeding due to reduced prices.

There may be multiple reasons for the fall in crude oil prices. Some of the reasons which I feel may affect the pricing are below stated but the real reason may be very different.

Theory X

Reduced Oil Demand in Future:  The current price is the reflection of the future demand which has reduced due to poor health of global economy. The reduction in demand is may be result of cooling of Chinese economy, uncertain Europe and other countries. At the time when anticipated demand was reducing US opened flood gates of the Shale Oil. The prices started falling as soon as the US Shale Oil production started to increase and it started competing with crude oil from the crude oil supply from OPEC.

The theory fails to explain why the prices will fall as much as 50% as conditions are still better than what the world has already seen. Infact when US is growing at 3.5%, the size of US growth can provide fillip to the international demand and can absorb some of the supply. Why OPEC didn't reduce its production when the demand was seen to be lower like it usually do to support the price in the market ?

Theory Y

USA counter strategy for Iran and Russia: Both Iran and Russia who do not share very good relations with USA are largely dependent on the sale of crude oil to sustain its economy. The price reduction will hurt them the worst. It also suggests that wars between the country will increasingly be more economic than traditional. The theory has its merit and demerits, the shale oil production is largely held private in US and works based on economies. So it may not be the government who is driving the production.  OPEC could also have reduced the production but it never went for it.

Likely Reason

Technology: For years together the world has been dependent on crude oil and coal for its energy need. There may be some new technology which is about to enter the market which both USA and OPEC is aware. The technology can be Solar or other rewnable energy which can even change the pecking order of the economic strength of the countries. Once such a technology comes, the oil fields will be worthless and it makes sense both for USA and OPEC to pump out as much oil as possible without worrying about prices till such a thing happens.


Tuesday, February 17, 2015

World Cup 2015 Format

Although I do not follow much of Cricket nowadays but World Cup (WC) is special, once in a four year event does attract even people like me who seldom watch Cricket.

When I was looking at the format of WC 2015 it was quite baffling but at the same time it makes commercial sense for ICC.

In WC 2015, the teams are divided in a pool of 7 team each. Out of 7 teams four teams from each of the pools will qualify for the Quarter final (QF) stage. From the QF stage the format of the tournament will be knock out.

Now if we look at each of the pools, their are 3 team in each of the pool which hardly stand any chance to qualify for the next stage and it will be mostly 8 test playing nation who will qualify for the knock out stages. In some way the first 42 pool matches are not of much consequence unless there is a major upset like Ireland beating West Indies.

In the nutshell, the WC is nothing but 4 QF, 2 Semi Final (SF) and 1 final. The most promising or consistent team may not end up being a winner but someone who is lucky and wins the last 3 matches will win. The format does not make any sense as  42  pool matches out of total 49 WC matches are of not much significance.

If we look at the commercial side of it, it may be done just to have India in contention atleast till the QF stages, so in absence of series of major upset, all major test playing nation will remain in the tournament till QF and there will be hardly 3 matches ( 2 SF and 1 Final) after that stage. India providing bulk of the viewership will make sure that ICC in making a lot of money out of the event by playing atleat 8 matches in the tournament. !

So if you a hard core Indian Cricket Fan, sit back, relax, even if we loose a game or two in pool stages, its going to hardly matter, just pray that we win the last three matches.

Monday, February 16, 2015

Biographies: Sachin, Steve Jobs, Srila Prabhupad

A post after a long time. Happen to read 3 biographies in last one and a half months. These are the people who have inspired me the most and reading their biographies was a real treat. I tried to compare the personalities and life of the 3 great personalities. This is my interpretation and people may have different opinion on the same. Here 10 is the highest rating and 1 is the lowest.

  Sachin Steve Jobs Srila Prabhupad
Passion about subject 10 10 10
Command in the area 10 10 10
Struggle in the Initial Stages 6 5 10
Struggle in middle Years 7 8 8
Support from Family 10 7 1
Financial Condition at Initial Stage 6 6 2
Years of Struggle 3 4 15
Faith in God 7 8 10
Personal Characteristics      
Humility 10 3 10
Hard Work 10 7 10
Planning Initial Stage 6 5 5
Planning Later Stages 7 6 9
Positive Attitude 10 8 10
Courage 10 10 10
Determination 10 10 10
Discipline 10 5 10

Sunday, December 22, 2013

Hope is a good thing !

Sometime life brings us to a point where logic leads to difficult situations ahead but people who stay hopeful comes brilliantly out of it. Needless to say the dialogue from Shawshank Redemption is truly legendary " Hope is good thing ",indeed it is the best thing..

When I look and analyze various kinds of individuals, I found that people who have very strong belief in God tends to do better than others. The faith in God gives them hope that they will do well in life and odds are with them. This leads to increased passion of achieving things which may not seem plausible if looked with reason. Religion provides hope to people and is very important as it leads to positive outcome in life.

Second category of people who I feel at times achieve much more than their potential are the one who are little stubborn, cocky as they tend to remain confident about their abilities and this hope leads to better results..

I feel that Logic by no means is second to hope but when logic seems to be not helping and their are no more option left for someone, Hope is a good Thing !

Sunday, November 17, 2013

Sachin you were the Best !!!

No words to describe what Cricket Fans are going through when Sachin says Good Bye to Cricket, it was an emotional Farewell as people are not able to imagine India XI without Sachin in the team.

What makes Sachin great is not just the classic technique, positive and attacking style of batting, humility and soft spoken personality,  but the sheer hope he provided to the Indian Cricket fans for a long period of time when Indian team was carried on the shoulders of one man - SRT.  I can still remember the days when most of India used to switch off televisions after the dismissal of Sachin. Has the cricketer being supported well by the other team mates during that period, the records of Indian team could have been very different.

Tuesday, October 2, 2012

and they say Inflation is good...

Woke up on a lazy working day with a copy of mint in my hand and  eyes still half closed searching for my specs.. Much needed hike in diesel prices it reads and I thought,  finally the government seems to be waking.. the fiscal deficit might come slightly under control, might send a positive signal to the market..

After a few days I met Dinesh, a skilled painter with bony physique,  who was finishing the final coat of our drawing room is it going I asked him and he looked too busy with his job not really interested in answering any thing. After 5 minutes he comes to me with his clothes spotted with drops of paint and shoulders drooping with the toil of the whole day work and explains, " the price for cooking gas has become 100 Rs/ kg now, price of wheat floor has increased by 5 Rs a kg. My room rent which I share with 3 other inmates has increased from Rs 1500 to 2000 , I am finding it very difficult to sustain here in this city, sending money back home seems to be impossible, I  don't know where to go and how to survive "

I thought to myself, " Dinesh's monthly earnings must be close to Rs 4000 as he was being paid 200 Rs a day by the contractor, All is not so well in India after all ".

Was the diesel price hike the only way to control fiscal deficit, why not put additional duty on the prices of diesel cars? Whenever I see people buying diesel cars the thought hits me, this car is going to consume gallons of fuel subsidized at the cost of people like Dinesh. the thought comes and go and I get busy in other consuming thoughts ..


Is it worst than 2008

The world is seeing massive turbulence, European economies are struggling to repay their debt, USA is yet to recover from 2008 recession and is struggling to create employment, Chinese economy seems to be finally cooling off and India too looks to in a state of confusion.

The question which is haunting the economist currently is that  ongoing crisis will lead to even a far bigger crisis ?


Wednesday, September 14, 2011

Why Depreciating Rupee is good for short term..

If you look at Indian currency INR (Rupee), it has been depreciating from past 45 days, the reason might be the outflow of dollars. High inflation numbers and poor industrial performance is also not helping the stock markets. We are seeing the spur in demand of precious commodities like gold and silver as lot of economist are fearing a double dip recession. Our currency has now depreciated to more than 48 per dollar from 44.5 just 45 days back which is nearly 7 to 8%. But this deprecuition of currency might be good for the country in short term.

1. It will make exports Competitive and might improve the capacity utilization of manufacturing companies. 

2. Increase the investment in Indian equity and Debt market as dollar will get god valuation.

3. Curb outflow of investments from India and the money might be invested in Indian businesses.

4. Natural Hedge against the selling by FIIs as the FIIs will loose in dollar terms.

Tuesday, September 13, 2011

Thursday, September 8, 2011

Why Jan Lokpal law can slow India down..

We might all be cheering hard for Jan Lokpal which the Anna team has presented but are we aware that it can adversely affect the growth of the country. Following are the prominent reasons which might derail the good growth in India if very strong anti-corruption bills are passed.

1. Dis-incentive for Government machinery: The government machinery, banks, public institutions are so used to bribes that it has become a part of their compensation. Infact the salaries offered by government is so less that it barely makes up for their needs and reflect their experience and qualifications. These people are there on those roles just because  they are getting incentives from extra money they make. This also improves the speed in the system as they try to push the proposals. 99% of times wrong proposals are not passed by bribing, its just that the deserving proposal gets those extra legs and gets passed on priority. Time is money and the whole business suffers if the speed of transactions reduces.

2.  Fear of doing Wrong: Anyone and every one can do things wrong at times. Consider a bank manager working in a PSU, who passed 100 loans every day, he can get a few loans passed wrongly as people submit fake documents difficult to differentiate. Now if you will hang that person for doing wrong in 1% of those cases, he will never work efficiently. The fear of complaint, disrespect will make people take a lot of time in doing routine things and the speed of the whole value chain will be greatly reduced. For example, if I give a slap to Sehwag for getting out below 10 and no incentive for hitting a century, will he still like to play cricket. And everyone seems to know Cricket well and criticize Sehwag in this country

3. Change the draconian Laws first: The laws are required to be reformed before a strict anti-corruption law is in-acted. If you check out the rules of financing, rules of land acquisition etc. If the entrepreneur start following them as per the books, the business in India will come to a stand still. Rules might favor the established players as they have powerful lobbies and they also fund the political parties. The young entrepreneur will find it impossible to do business in India if he follows the draconian rules and not bribe his way through.

4. Crores of cases in Jan-Lokpal: If every person in India can simply write an application and get his complaint registered in Jan-lokpal how will you solve such crores of cases wnd who will monitor it ? How will you prevent people from filing wrong cases just to ridicule or blackmail the honest public servants ? The whole country is already struggling with so many pending cases in our courts. If things are pending in arbitration, it will adversely affect the growth of the country and velocity of money.

5. FDI in India: Most of the foreign direct Investment in India is nothing but the black money of Indians itself which is routed through tax heavens and is invested in fresh projects which create economic activity and employment opportunities.The tax laws in India are deterrent to a lot of growth. If people pay less tax and invest more in growth it provides compounded returns.

6. Law can not change people: Law can only create deterrent for people, it can not change people in a day.

7. Don't confuse corruption with Cop asking for money:The masses are mostly behind Jan Lokpal,specially the middle class as they feel that it will stop people in influential position abusing their power. How will you stop a cop asking for Rs 100 when actual fine is 500 and one has to wait for it in court for 5 days. You want to happily want to pay-off Rs 100 and get rid of it. If the cop is smart, you will be actually ready to pay even 500 to cop and still avoid the procedures. No law can change the way things are done in a civilized society. It takes generations to bring the change. If you change the system to no court hearing , pay 200 fine and leave. Will I have any problem in doing so ?

Everyone wants corruption free country but the question is you want anti-corruption over growth. Most honest countries might not be the most progressive or having the highest growth in the country. When India has almost half the population below poverty line, we need to ask our self, " do we need most honest country or do we need more people who are prosperous". Growth slowly tickles down and create opportunities for all. One white collar jobs lead to creation for 3 blue collar jobs. The thought is good but the timing is still a concern to me.

Wednesday, September 7, 2011

How to Handle Terrorism ?

Yet another bomb blast rocking the country, a lot of people died, few lost their limbs and will suffer for life because of it. Life isn't fair after all. I don't understand why do terrorist target the innocent people. Don't they have their own families ? How do they sleep in night after committing such heinous acts ? Is there any end to it?

The problem is only getting difficult with improvement of technology. Terrorists are using modern method to create panic in the society. It is very difficult to locate handful of such crack heads from millions of people. How can we handle or reduce such cowardly attacks?

1. Extra Vigilant Society: We need to be extra vigilant in crowded areas, It might look a stressful activity but  a vigilant society might reduce the number of such blasts. We need to be sure whom we are renting our hotels and flats to. We need to be careful about any unusual activity done by our co-passenger. We need to report all such activities to police at the earliest. I think its need of the hour to be extra vigilant.

2. Strict Punishment for Terrorist Activities : Make life so difficult for terrorist that they think 7 times before planning any activity. They should dread being charged for terrorism. People who support the terrorism by providing material or non material support should be be made equally liable for punishment. I dont really care about human rights activist here, We need to firstly save our human race and humanity.

3. Education: Education and knowledge improves perspective towards things, makes people more understanding and tolerant towards each other. It might not completely stop the terrorism but the more and better educated world will certainly have lessor terrorism.

4. Eradicating Poverty and inequity in society:  Somewhere or the other inequity and poverty in the society gives rise to such activities. The epicenter of such activities are mainly shabby localities where people find difficult to make a living and are lured by crime and terrorism.

5. Peaceful resolution of conflicts: Government should work with the terrorist organizations to reduce the conflicts, should peacefully resolve the problems, create jobs and employment opportunities for such people who can get healed and treated so that the poison of terrorism can be washed away from our system.

6. Reforming the antiquated systems: Some of the antiquated systems and institutions like Madarsas should be reformed and brought under clear guidelines and curriculum. These are the places where innocent peoples were systematically brain washed into believing in Jihad .

7. Better Intelligence Network and Infrastructure : Although terrorism is very difficult to curtail just by our intelligence agencies, but the way our intelligence system works, there is a huge opportunity for improvements. The whole anti-terrorism infrastructure needs to developed again. A part of money we pay as tax should be used for improving our security by investing in modern technology and infrastructure to fight terrorism.

Tuesday, September 6, 2011

Another Politician goes to Jail ..

Amar Singh became the new addition to the list of politician who went to judicial custody for various charges in last few months. Interestingly the whole drama of not turning up to court by showing medical reasons was strictly sorted by the court which usually does not hesitate in just giving the next hearing date. Amar Singh now have to just be happy with medical facilities of the prison. 

Mr Singh has also just added his name to the prominent list of politicians who tasted the salt of prison off-late like Mr. A.Raja, Mr. Suresh Kalmadi, Mr. Madhu Koda and Ms. Kani Modzi.   As the number of politicians going to Jail are increasing, it looks to be a positive sign for the Indian democracy. It also sends a good message to the political class that no one is untouchable when it comes to judiciary. If not in their own political term,politicians will be taken to the task once their term end for their misdeeds. So politicians should better do good things to stay away from a prison term. 

Our politicians must realize that doing corruption and escaping charges is become increasingly difficult for them as the media and use of technology is increasingly making the system more transparent.Government at times is also forced to stay away from influencing the judiciary to respect the popular sentiment of the citizens of the country. I hope it makes more politicians honest. 

Some of the question which comes to mind are how many of the politicians will finally be convicted, how much time will they stay in jail and how long will the case remain pending for judgement? I hope we witness some of the judgement in our lifetimes if not politicians.  

Tuesday, August 30, 2011

Its a high speed ride: Are you ready ?

The speed at which the changes happen in this globally connected world is astonishing. It took several decades for TV to reach India after it came in US markets, mobile phones took much lesser time and nowadays you see launches of all the products and services happening globally. There are new technological innovations happening in the various markets which gets quickly integrated in the world markets.

The Good..

1. Innovation improves efficiency of the system, if production of particular product was taking 2 resources before, it is now taking less than 2 resources.

2. It brings bigger market for the companies. They can produce more, sell more. It might also affect the economies of scope and scale and make products cheaper. A lot of companies are getting into backward and forward integration which is improving both the margins and also reducing the cost for consumers.

3. Better products and services for consumers.

The Bad ..

1. The companies find it difficult to sell their products, specially if they are not the most competitive or do not have the quality or pricing as per world standard.

2. In a highly competitive world, the jobs will either be mechanized, outsourced or become redundant hence one has to keep improving their capabilities as per the new requirements of the market.

The Ugly ..

1. Due to higher speeds the business cycle times have reduced and the boom and bust are happening a lot faster than they usually happen. This is making a lot of people vulnerable, specially who are not financially secure.

2. Doing business becomes more difficult as the markets are moving towards perfect competition and margins are eroding very fast. Technologies gets copied very fast and companies find hard to protect the intellectual capital.

With the world changing at the fast pace, this speed is only going to increase in future as their are no breaks in this system.