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Indian Govt beats Infosys by more than two times in revenue growth!

Howzaat!! :-)
Check this out for Indian governments tax receipts growth.
Check this out for Infosys's quarterly results

Growth numbers for India governments revenues (primarily tax receipts) sound like 40-50%!!! What a JUMBO JUMBO growth rate to have.
Comparitively Infosys's growth rate numbers are more like 18-20%.

So here's the news India government at a huge $30bn base still grew by more than double of Infosys with just a $3bn base!

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Thursday, January 10, 2008
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Today’s BS has an interesting article in it’s Editorial page… written by Rediff CEO Ajith Balakrishnan.

Interesting point of view on how phenomenally talented people of Florence like Michaelangelo, Da Vinci, Galileo etc produced a lot of work of art and science but never really managed to convert it to other forms of successes like financial or industrial success…
How ideas and technology become decorative rather than tools of progress…

Friday, October 26, 2007
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Hey I want to sell power, computer games & medicines too!
Was reading this story on rediff about the unrelated diversifications of Indian Corporate groups.

Me and my partner Samarjeet regularly discuss this...

I guess, upto a point it is diversification and beyond that it sounds like pure opportunism. It's like saying hey I have the money, I can win in anything. Are the rest of the players fools then, to loose to your 5% attention on 20 different businesses? ;-)

Point is, we feel business is not won because of the 20,000 employees working for you, but the top 4-5 main guys working for you and if you are doing too many things then the attention of the people who matter will be so much. So to counter it what do these ppl do? They buy people who matter. Problem with this is it is then they who run the company. Your value-add is limited. So if they are as good as you then all is fine. But if they were as good then in a capitalistic system, prey why are they not doing it themselves?

There's a difference ain't it? Between the Ambanis and these top people they buy? That's the point... :-)

Saturday, June 30, 2007
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GDP growth and the caste conflict in India
Two things have caught my attention recently.

One is the fact that India is growing ever more faster on GDP and market terms. We achieved 9.4% GDP growth, reached $1trillion in GDP and $1 trillion in combined stock exchange market caps! Phenomenal achievement. (Also read that Amartya Sen and team of others are going to put together an index of Happiness as opposed to GDP as a measure of stage of development a country is in. I am eagerly awaiting to read more on that front.)

The second portrays the other side of the reality in India. This occured when I opened up the Wall Street Journal at the Frankfurt Airport (was on my way back from San Jose after exhibiting for my company iksula at the IRCE 2007). The Top editorial was on the Gujjar violence in India. As I read it, it dawned on me that, interestingly, rarely has any community in India fought about not having enough schools or colleges nearby, leading to their children not getting the right institutions that could better their social status. Instead 60 years after Independence, we now have communities fighting to be included in a list that gives them the results of having better schools etc, straight away as a shortcut. I feel that this skewed incentive to communities needs to be corrected in some way, so that they fight for the fundamentals and not for the outcomes that come for free!!!

Meanwhile loads of things happening on the personal front and in my company iksula too. However I do not like opening up too much of my personal life through a blog and so as usual I continue to write about things in the domain of my non-personal thought.. :-)

Sunday, June 10, 2007
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Private Equity: Just an arbitrage or long-lasting value?

Just read this Fortune article on Private Equities. It is simply the best article I have read in a long time. And here's Basab Pradhan's very well-thought out comments on it.

The key focus of the Fortune article is to mention the advantages of a PE managed firm over a public company. My feel on these advantages are as follows:
1) More of the Top Manager/CEO skin in the game (asking them to invest significant part of his net worth into the business etc) --> This I guess makes him behave like an entrepreneur rather than a manager.
2) CEO pay is not under public scrutiny and so the company can pay x times what a public company pays, but most of it as a variable pay--> There are two kinds of people up the Corporate ladder. The kind who say "bhaut chal liya yaar. Ab toda aaram ho jaaye. (I have done a lot now let me relax a bit in life)" vs the guy who is still hungry. This high-variable pay attracts the latter kind of people and this helps promote growth.
3) Freedom to take tough decisions that may rattle a quarters earnings --> For those who have read Akio Morita's "Made in Japan", he must be turning in his grave and saying "Hey guys that was my idea!" :-)

So would these advantages last long or would the public companies adopt these and evolve? Is the PE industry then just another arbitrage-based industry?
Well I guess, if these things were so easy to copy, then since the public companies themselves are not all made up of fools, they would have figured it out long back. The degree of freedom of apublic company is limited by the structure they are in. So logically they will continue as they are, with just incremental evolution and I guess PE guys would keep making money for a long time to come...

Sunday, January 07, 2007
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My New Years in this Millenium

I just realised that the last 6-7 years have been pretty mobile for me. It was fun trying to remember where I spent each of the last 7 New Years:
2007 - Mumbai
2006 - IIM Ahmedabad
2005 - Chittorgarh, Rajasthan
2004 - Home (Kerala)
2003 - Some street in Denver
2002 - Grand Place, Brussels
2001 - Chennai
2000 - Home

Good memories..

Tuesday, January 02, 2007
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A case for the need for Consultants from Donal Rumsfeld's famous quote

Here is the quote:
"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know."

I am trying to apply this to companies:
There are 3 combinations:
known knowns: Since we know these things, we do not need outside help
known unknowns: Since we know that we do not know these things, we take training or recruit people or acquire companies to solve this
unknowns unknowns: These could hit you hard and this is where I hypothesise that we need Consultants - the McKinseys of the world!

Interesting isn't it?

Tailpiece: BTW if this framework where to come from McKinsey or BCG it would have 2 axes and 4 combinations. That made me curious what the fourth otion is:
It is and here I am extending Rumsfeld, unknown knowns. Prey, what are these?

These are things we know, but do not know we know. For an individual this could be what is in the sub-conscious mind. For a company, this could be the knowledge residing in the company which others do not know exists. This is the problem that is solved by Knowledge Management Systems within a company!

Effect of caffeine waning. Time to go back to work...

Friday, November 17, 2006
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Copyrighting my quote about the Internet
"Knowing and not knowing are 60 seconds apart!"

Friday, November 17, 2006
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Food sector Product/Service Idea for India

The idea is simple. A healthy balanced diet food combo meal that is packaged and delivered fresh to your house/office mainly during lunch.

Genesis of the idea: I have been eating in hotels for 10 years now. Just celebrated the 10th anniversary and I am sick of it. Not because of taste issues or because I am bored. These can be corrected by changing restaurants. What however cannot be corrected anywhere is non-availability of healthy, balanced-diet food. Restaurants are designed for once-in-a-while eaters. They do not recognise the changing social demographics and see that some of the guys n gals are coming everyday. They cannot customise food for you due to various constraints. And they are so uneducated about nutrition and health that the more-than-needed oily food that they serve, lacks proteins and vegetable content. This is a huge problem for bachelors and couples who do not cook. (solutions like keeping a cook at home solve the problem for the older couples and certain segments, still it doesn't solve the problem for everyone)

More about the food meal: This is a meal that has the right combination of carbohydrates, proteins, vitamins etc and is avaialable in Veg n Non-Veg. It could be a modification of the existing Thali to remove the junk like pooris, oily curries etc. Basically remove anything that is fried and/or oily. Add to this more vegetables and protein-rich components.
The food needs to be tasty and you do not get the same thing everyday but maybe same thing with once in a fortnight or something (just so that you can keep eating it and not get bored)

Delivery: Made fresh, packaged and delivered to your home or office similar to Dabbawalas. You can order in any city in India through phone or internet. Reliability and freshness is of supreme importance. I want it packaged, preferably in bio-degradable material.

Pricing: Can be slightly different city-wise. Let's say around Rs. 70-80 per meal.

Promotion: Put some Sani Mirza or Abi Bachchan etc just to make me feel good that I am eating something trendy. (just kidding :-) )

Can someone deliver this product/service combination? I think there will be a huge consumer segment for this.

Sunday, November 12, 2006
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India and China are VERY different

I had always thought of writing my opinion on this but never got to. But yesterday was the last straw. I happened to read or hear India and China being referred to in the same breath 4 times within one hour over TV and Newspapers.

I do agree that there are some similarities like we are both branded as "developing", are fast growing compared to the so-called "developed" countries, are big in terms of size and population.
But that's about it. We have:
- Different culture: (from my experience)When most Indians meet Chinese they almost have nothing in common. Infact get along better with Westerners than Chinese.
- Different political setup: India is a Democracy and is perceived by the world to continue as a Democracy. China never was and no one even expects it to become anytime in the near future.
- Different economic setup: India is slowly but surely moving away from a Govt run country to a private enterprise run country. Whatever the goverment runs happens slowly (infrastructure), whatever the private companies run grow fast (telecom). China is largely still a govt run country! But the govt being more dictatorial is much more effective and fast
- Different strengths: While both have loads of manpower, China's strength is in manufacturing and India's in services and IT.

(Here I am not referring to differences like religion, Architecture, looks or language because these have lesser imapct on economics than the above.)

This is not to say that either India is better off or China is. Nobody can predict that. Future is unpredictable. But given these differences, though there are some similarities between the two, the differences are STARK! Their futures are going to be VERY VERY different.

Dear Economists, Western businessman, Professors, Book-writers, bloggers and citizens of the world:
DO NOT refer to India and China as if they are synonyms! :-)
(Smiley is to tone down the whole thing :-) )

Imagine in the 60s when US and USSR where growing together and into similar things like defence and space, there might have been many who talked about them in the same breath! I hope you see the stupidity now. Please do not take this to mean that I am saying that India is like US and China like USSR. The point is that, two countries looking superficially similar, but having deep-rooted differences in culture, politics, economics and strengths can never have the same future.

Thursday, October 05, 2006
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Due to Adnan Hajj, who photoshop-ped history, now people will say:
"Where there is smoke,
there is Adobe Photoshop"

Tuesday, August 08, 2006
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Awestruck by Mumbai

I am writing this at a very sad moment for Mumbai. 7-8 blasts have happened in the local trains here. The trains have stopped running for now and there's chaos on the roads.

I was just walking around to see what's happening and found some crowding on the road. I approached it to find out more. Suddenly a man from among the crowd turns and asks me "Saab aapko kidar jaane ka hey. (Sir, where do you want to go?)" I found a Lancer stopped on the road and this man and others are busy ensuring everyone get's home in the absence of the local trains! Amazing how in an otherwise crowded and tough city, human values shine through.

I am new to Mumbai and had expected it to be a tough experience. I thought I would come here and spent an year or two just because life in India can never be complete without the Mumbai experience. But my short stint here has shown me a totally and unexpected facet of Mumbai.

Just the other day I bought some peanuts from a kid who was frying it besides some road. I gave him Rs. 2/- and walked away. This lad calls me loudly and in a "Sir you need to be more careful" way tells me that he gave me just Rs. 1/- worth of peanuts and hands me back a one-rupee coin.

Some days back, I felt the taxi-wallah who took me from the airport back home had taken me on a longer path and mentioned it to him. He explained to me in detail why this was not the case and I was convinced. I reach home and then pay him and leave. He calls to me loudly and asks "Saab aap naaraz to nahi hena? (Sir, I hope you are not angry at me.) "

Many such small and to a lot people unnoticeable incidents...

It is not that I didn't have any bad experiences at all. But by and large I am awestruck by Mumbai. This could be the beginning of a new life altogether!

Tuesday, July 11, 2006
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The Emperor is naked

I just finished reading this very interesting article by Pankaj Mishra in New York Times.

This according to me summarises a lot of the confusion surrounding India on whether we have become a developed nation/superpower or not. There’s this economic theory called Lewis’s Dual Sector growth model which is supposed to take countries from Developing to Developed. This model was the foundation stone of Developmental economics.

Put simply it states that the marginal productivity of labour in a slow growing sector is near zero while in another one is significantly high. This leads to labour mobility and without any reduction in the slow sector, growth in the other sector. The surplus is reinvested leading to capital stock formation. This process leads to GDP growth.
We can crudely put agri as the slow sector and mfgr/IT as the second sector.

Long back economists realized that labour mobility is tricky. There is an endowment failure. A farmer cannot become an IT professional that easily. The model doesn’t work at all.

India is facing this issue in a big way. The solution, atleast partly, is to solve the endowment failure problem of the poor through better education and access to cheaper credit. These are problems that can be solved. It is an interesting challenge too. Frankly, it is my life’s ambition to make some reasonable savings and then exit corporate world and work on some such projects. God permit :-)

Monday, July 10, 2006
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Back to Blogging after a two year sabbatical

I am impressed by the sheer passion of Ravi in writing and in participating in this whole new expression revolution that blogging has now become. It has sufficiently inspired me to return to blogging after 2 years :-)

Monday, July 10, 2006
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Check out my latest initiative: IIM cat walk It is an attempt to build a community to share information on CAT, IIMs, other top B-Schools, and management education in India.
I was always concerned about myself consuming the internet without contributing to its richness. This is an attempt to bring in rich content to the net.

Don't forget to checkout the CAT Forum and register for it.

Tuesday, May 24, 2005
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Scary Movie Part 1
Post 2004 election India
Return of the RobinHoods

And just wait and watch for the rest of the parts of this movie for which we paid money and have bought the tickets.

Saturday, June 05, 2004
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From BS editorial:
Food and Agriculture Minister Sharad Pawar has ruled out the resumption of foodgrain exports this year.

At the same time, he has indicated that grain procurement operations would be extended to all those states where such arrangements do not exist, and that the public distribution system (PDS) would be expanded substantially.....

...Banning exports will merely mean shutting out the market for India's surplus grain, and will add to the discomfiture of exporters who have undelivered contracts in hand....

...In recent years India has emerged as a major exporter of rice and wheat and has been formally recognised as such by the International Grain Council. All this will now be history.

This is not the only worrying aspect of the new policy. The proposal to extend grain procurement operations from 15 per cent of the country to all of it, will render private wholesale trade virtually irrelevant in this sector.

It could even take the clock back to the days when people had to queue up at ration shops for buying grain...

...India has built up unsustainable grain inventories in the past, and these were pruned by exporting over 33 million tonne, conducting open market sales of nearly 20 million tonne and by liberally using food for welfare and drought relief schemes...

Going by Mr Pawar's reckoning, the central grain pool inventory is, in any case, likely to touch 33 million tonne on July 1, against a buffer stock requirement of only 24 million tonnes. With the monsoon projected to be normal, another bumper kharif crop seems round the corner — which means the government's stocks will climb further.

Under the circumstances, there is absolutely no need for Mr Pawar to ban exports or revert to tried-and-discarded models of food management, when the objective should be to reduce the subsidy bill and let markets function with greater efficiency, while providing farmers a price cushion.

Instead, Mr Pawar seems to be moving in exactly the opposite direction. Any modification in the grain procurement and distribution system that eliminates or reduces the role of private trade would be inappropriate, inadvisable and perhaps even financially unsustainable. And to shut out exports is of course to be completely anti-farmer.

Saturday, June 05, 2004
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TN Ninan in Business Standard:
...Most of all, there is the bald truth that rapid growth by itself achieves quite a lot on the employment front. All of this could perhaps be short-handed to argue that there is precious little that is wrong with the reform programme, except that there hasn’t been enough of it.

This is certainly not to argue that there is no unemployment in India, but to suggest that the UPA’s understanding of this very important problem is defective and probably born out of the syndrome that makes people dislike good news.

The result is that it is barking up the wrong tree with its preferred solutions, when the old arguments of reformers probably hold more water: create a flexible labour market instead of trying to protect the high-wage islands, get rid of small-scale reservations so as to allow the growth of labour-intensive industries, reform agriculture and create the infrastructure to support rapid economic growth.

The reformers in the UPA government may have exactly these policies and objectives in mind, but they will be hamstrung by the assertions of the Common Minimum Programme. More’s the pity.

After 6 years (or atleast last 2-3 years) of good rule by the NDA where reform was better thought out, we are now going to see the UPA take a short term view and take us back by years. Thanks to all those who voted. You guys did a great job.

Saturday, June 05, 2004
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Communist anyone?
More from Sunil Jain's article:
As in India, in China too, there has been a decline in employment in state-owned enterprises, from 103 million in 1990 to 68 million now.

But in China this was made up by the increase in urban private industrial employment, from 6 million to 42 million in the same period.

I would love to hear the comments of Communists on this? Not that I dislike them or anything but if they argue rationally they have to answer to this piece of stat.

And take this:
While the Left parties in India are fundamentally averse to foreign investment, and to making life easier for the organised manufacturing sector (where wages are at least double those in the unorganised sector), the states of West Bengal and Kerala, where there have been Left-run governments, have the highest unemployment in the country; indeed even the highest growth in unemployment has been seen in these states.

Saturday, June 05, 2004
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Public Policy: Is it really well thought out?
From Sunil Jain's analysis on Job vs growth in Business Standard:
In the textiles sector where India has a very low export share, for instance, years of tax-breaks for small units discouraged larger units from coming up and stunted the country’s ability to service large orders.

The share of big players is 93 per cent in the spinning sector, to cite one instance of the importance of large manufacturers, and India’s share of global exports is 26 per cent.

In the weaving sector, larger players have only a 4 per cent share in local production, and their global share is a mere 3 per cent.

Read this article: Part 1 Part 2 Part 3

This I believe is a classic case of a public policy thought out from the narrow angle of helping small scale units alone rather than about the textile sector at large. Why do we want to have only small scale textile units grow? Or why do we want people to get jobs by only incentivising small scale. Shouldn't we do things to achieve the final objective that is more job and higher growth for textile industry as a whole rather than assume one solution i.e. the small scale is THE solution and then incentivise that?

If we incentivise small scale and it achieves 3 percent global export share and 10,000 people work in it, is it better than getting 25% share and 70,000 people getting jobs?

Saturday, June 05, 2004
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