IIPM B School

Friday, November 9, 2012

Sonia’s dream budget

This year’s Budget may be finalised at 10, Janpath, and not 7, Race Course Road. The FM has a new team to help him balance political and economic pressures. By PRAMOD KUMAR

On the last day of this month, in a leap year, the UPA government will unveil what could be its last full-fledged Budget before the general elections in 2009. It obviously implies that the FM P. Chidambaram will need to do a tough balancing act between pre-poll populist pressures and a desire to carry forward the reforms agenda to please both foreign and domestic investors. This year, India’s two pillars of reforms, PM Manmohan Singh and Chidambaram, will have an almost new Budget A-Team to win the electorate’s hearts, and also push economic growth and reforms.

Heading the team is finance secretary, Duvvuri Subbarao, an economist who has had the benefit of a stint in the Prime Minister’s Economic Advisory Council. Subbarao, who began the corporate practice of offsite retreats for the Department of Economic Affairs officials, is an Andhra Pradesh cadre IAS topper of the 1972 batch. Helping him closely will be revenue secretary, P.V. Bhide, expenditure secretary, Sanjiv Mishra, the chief economic advisor in the finance ministry, Arvind Virmani, and the newly-appointed advisor to the finance minister, Shubhashis Gangopadhyay, who joined less than a month ago. Mishra is the only old hand in this Budget group. Gangopadhyay and Virmani, both reputed economists, have a crucial role in the Budget exercise with the government facing the dual challenges of a possible inflation jump and deceleration in key sectors. Nor is news on the global front encouraging with the threat of recession in developed economies like the US looming large. Virmani, appointed last July, is a Harvard economist who did his thesis under Nobel laureate Kenneth Arrow. He is a ‘Manmohanite’, having worked with the current PM during his FM avatar as his advisor on policy planning. He will bring to the table his recent experience in the Planning Commission, where he was the principal advisor.

Read more.....

Source : IIPM Editorial, 2012.

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

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links

IIPM : The B-School with a Human Face

Thursday, November 8, 2012

Global plans

With steel as the lynchpin of his global plans, Ratan Tata ensured a dramatic transformation of Tata Steel. By a. paul, s. nahata

Alison Richard, Vice Chancellor, University of Cambridge told B&E, “Whenever a company decides to go global, it has to start from the thought process of the leader. Very small details can play a major issue in playing globally.” It was in the year 2004 that the Ratan Tata led Tata Steel – which had at that time a steel producing capacity of 4 million tonnes per annum (MTPA) – took the most praiseworthy giant stride for any Indian steel corporation when it gobbled up the considerably significant Singapore based NatSteel Asia, a 2 MTPA steel producer, for $343 million. Ratan Tata’s shrewdest focus was on transforming the steel value chain dramatically. His tactic was to supply low cost steel produced in India to NatSteel, which would then churn out a high-value finished product to cater to quality-intensive global industries like aerospace, automobiles, construction etc. In 2005, the target for was the 1.7 MTPA Thailand based Millennium Steel, which Ratan Tata successfully negotiated for $130 million! In the same year, he also acquired a significant 5% stake in Australian Coal Mines.

But the most brilliant of all moves Ratan Tata has ever made came in the year 2006, when this exemplar leader bid for Corus – a mammoth 18.3 MTPA UK based steel corporation. He closed the deal at a whopping $12.1 billion in January 2007. Though he became an immediate toast of the nation, random criticism for the overly priced deal by experts and analysts alike came in from all quarters. In fact, Standard & Poors immediately downgraded Tata Steel’s credit rating from BBB to BB, a grading that holds even today for the firm because of the massive debt servicing levels due to the Corus buyout. Even the share price of Tata Steel suffered massively at that time, going down from Rs.537 on October 5, 2006, to Rs.419 on March 6, 2007, what with shareholders on a selling spree. But the ever-confident Ratan Tata had then told his detractors that shareholders, who’re thinking in the short term, will rue their decision to sell Tata Steel’s shares. Prophetically, exactly one year after the deal, the share value rose thunderingly to Rs.988, settling to more sensible levels as on February 3, 2008, to Rs.776.

Read more.....

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

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face

Wednesday, November 7, 2012

Civilising anew

A benchmarked in education

“The mind is not a vessel to be filled but a fire to be kindled”- as Plutarch had said. And the good news is that this piece of wisdom seems to have percolated down to the Indian Government…what else could explain the momentous pact that India signed with the ASEAN countries at the Fifth India-ASEAN Summit at Cebu, which was primarily aimed at strengthening the Student exchanges between India and the other ASEAN countries. Education has ceased to be a mundane classroom lecture and has risen from being mere bookish knowledge to an IQ based orientation. Indian premier Institutions like the IIMs, IITs, IIPMs, MDI and many more had already sowed the seeds of student exchange a long time back and this pact between India and ASEAN countries has further fortified such interactions and broadening of horizon. The fact that India was a host to about a hundred students from the ASEAN countries goes to prove beyond doubt that India is not just focusing on its horizontal growth through economic activities that has burgeoned by 30%, but also on its vertical growth by incorporating better education means.

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

Tuesday, November 6, 2012

Building a naveen state

DHRUTIKAM MOHANTY feels that Orissa’s CM Naveen Patnaik can become the head of state for the third consecutive term

At the age of 50, Naveen Patnaik entered politics, contested the Lok Sabha by-election in 1997, necessitated by his father Biju Patnaik’s death, and was elected an MP. Soon after, he formed a new party, faced fresh polls and became a Cabinet Minister at the Centre and, later, the CM of Orissa, both in 2000 and 2004. On 26 December, 2007, his Biju Janata Dal (BJD) celebrated its 10th anniversary, which also marks Naveen’s completion of a decade in Orissa politics. His phenomenal rise is like a fairy tale. His journey from a writer to a wily politician is interesting. In 1985, his first book on Indian costumes, ‘A Second Paradise’ was launched and sold over 30,000 copies in America within a few days. In 2008, he is being called a truly ‘developmental’ CM.

He was adjudged one of the best CMs in various polls conducted by media houses and industry associations. Moreover, he took the initiative of taking Orissa towards industrial revolution. In the recent past, the state has bagged the biggest FDI project – the Posco steel project with a proposed investment of Rs.52,000 crore. Within four years, the state has signed 105 MoUs with both domestic and foreign firms with an entailed inflow of Rs.277,400 crore. Big names like L.N. Mittal, Ratan Tata, Anil Agarwal and Anil Ambani have announced plans to set up projects in Orissa. One of the state’s top bureaucrat explains, “Partly because we have a system where if the CM says something, it will be done, nobody can oppose him. But mostly, this is perhaps the only state where you can meet the CM and be sure that he won’t ask you for money.” When asked about his much-lauded incorruptibility, Patnaik says, “I am not married. I don’t have children. Who am I going to leave all the money to? I have never been interested in possessions. If you own too many things, they end up owning you.”

Still, Patnaik is not free from corruption charges. BJP’s national VP Jual Oram criticized the CM for his alleged involvement in a multi-crore kickback in the case of the MoU signed between Orissa and South Korean steel major Posco. He demanded a CBI probe into the matter. Further, opposition Congress members have blamed the CM for closing the doors of government offices for new entrants in the name of reforms. Sivananda Ray, VP of Congress says, “Actually, in last seven years, employment generation in the government sector was almost zero.”

Read more......

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

Monday, November 5, 2012

Oil never melts in water

Water scarcity may lead to doomsday, globally

Geo-politics with water is a new concern, albeit it takes the second fiddle to oil as a political tool. Fresh water is only 0.4% of the total water bodies on Earth and its availability is decreasing, by 30% to 40% over next 20 years. Middle East, though oil rich, is not water rich. This region has 1% of total water reserves, being shared by 5% of world’s population, it’s home to. The politics over water in Middle East has already started. As always, Israel is the bully in the region, depriving Jordan, Syria & Palestine of their due share of water. In 1994, Israel and Jordan signed a ‘peace treaty’ in which Israel promised to provide 50 million cubic metres of water per year. Israel changed like a chameleon, refusing to honour the treaty in 1999. Back home, there was a conflict of interest between India and Bangladesh over water sharing of Ganga. The construction of Farakka Barrage, became bone of contention between the two. An amicable agreement was reached in late 1990s to share the water more equitably. The misuse, pollution and wastage of water is making it a scarce to humans.

Read more......

Source : IIPM Editorial, 2012.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM : The B-School with a Human Face

Friday, November 2, 2012

THE OVERRIDING DOWNTURN IN THE RECENT PAST

THOUGH LATIN AMERICAN ECONOMIES LIKE ARGENTINA, VENEZUELA AND COLOMBIA HAVE SHOWN SOME RESILIENCE AGAINST THE OVERRIDING DOWNTURN IN THE RECENT PAST. BUT, WITH HUGE SOVEREIGN DEBTS AND THEIR GROWING INCAPABILITY TO SERVICE THEM AT A STANDARD RATE, THEY STILL STAND ON THE VERGE OF COLLAPSE, FEELS MANISH K. PANDEY…

For most countries, tolerating a short-term deficit to stimulate the economy is a reasonable tradeoff. But, for Argentina, however, the picture is complicated by the country’s limited access to foreign capital as it has been in default since 2001. Though Christina’s predecessor, her husband Nestor Kirchner had restructured most of the debt and even repaid money borrowed from IMF, Argentina still remains in default of over $20 billion of debt from its 2005 restructuring and over $6 billion in Paris Club debt. Worse, Argentina’s total debt, not counting that held by the holdouts, as of today stands at $140 billion (almost 50% of GDP)!

The Argentine government has also been questioned by analysts on the validity of certain economic indicators, which the government is reported to have skewed seemingly to get a favourable market standing. For instance, inflation has been ‘officially’ hovering around 9% since 2006. But it was privately estimated at 12-15% that year and over 15% in 2008. All this has led to a scenario where investors are left with little (or say no) faith on the Argentine government. According to Argentina’s central bank, capital flight from the country has reached $5.5 billion in Q2 2009, bringing a total of $11.2 billion in H1 2009. In fact, since 2007, capital flight has reached about $43 billion on worries over its economic outlook. Economist Rodrigo Alvarez from consultants Ecolatina, warns that capital flight from Argentina has reached levels similar to those of 2001. In his view, the government needs to restore confidence before it’s too late. Even as per Morgan Stanley analysts, Argentina’s fiscal accounts are moving toward deficits, which will likely increase worries on fiscal sustainability and “the country’s ability to honour its debt service obligations.” Considering this they have even lowered their “forecasts for Argentina’s fiscal balance to -0.6% of GDP (from 0.0%) for 2009 and -0.9% of GDP (from -0.4%) for 2010.”

The scenario is somewhat similar in Venezuela where high levels of government spending and unorthodox economic policies are catching up very fast. In fact, the country’s GDP has already fallen by 4.5% in Q2 2009, following a 2.4% decline in the first quarter.

Read more........

Source : IIPM Editorial, 2012.

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

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM : The B-School with a Human Face

Thursday, November 1, 2012

GOLDMAN SACHS: LESSONS OF SUCCESS

You could call Goldman Sachs the greatest market manipulator and cry foul at every announcement that it makes. Yet, in an unrivalled environment, the best option is to learn from the Alpha male of Wall Street – the brat of the whole lot! by gyanendra kashyap

Despite widespread criticisms, Goldman Sachs'' share price has marked a 240% rise in just a year (touching $176.51 as on November 10, 2009). As a matter of fact, during Q3, 2009 alone, the firm made profits of more than $100 million on trading revenues in 36 days and profits of more than $50 million in 53 of the 65 trading days – all these, when financial institutions were still scrambling for schlock bankruptcy covers (the latest victim being CIT). So what gives at Goldman that makes it so different from its peers?

Peter Nerby, New York-based analyst at Moody’s Investors Service communicates to us that the superior performance of Goldman Sachs over its peers is based on the "firm''s risk management expertise and controls, as well as the strength and diversification of its franchises." Although that is simply put, the statement does contain the very foundation of the spectacular success of how Chairman Lloyd has managed his firm. But his success has been supported by three strategic focuses he used over the past few years.

Yes, to some extent, Blankfein has benefited from the miasmal state of affairs of his competitors, who were forced to wrestle with large trading losses and internal restructuring. A less competitive market and higher fees have indeed contributed to the staggering profit figures (revenues and profits, in this industry, are a function of volumes and margins). David Viniar, CFO of Goldman Sachs, while angrily denouncing several allegations levelled against Sachs (he termed the accusations an egregious distortion of facts), has gone on record saying, "We are very aware of what''s going on in the world, but we have to trade that off with being fair to our people who, we believe, have performed admirably throughout the crisis."

And this is precisely the first learning for other banks – treat criticism as hyperbole and reward your top performers, blasphemously (if that means obtaining a scurrilous reputation, so be it), for "people" surely are the topmost tangible asset. Competitors like Morgan Stanley, who have lost talent regularly since the mid 90s and have had to pay out billions of dollars to settle lawsuits/issues in the past years, have never managed to match the sparkle of Sachs to an extent (for records, Mika Watanbe, Executive Director, Morgan Stanley, communicated to B&E his refusal to comment on the issue).

Read more......

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

For More IIPM Info, Visit below mentioned IIPM articles.

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links
IIPM : The B-School with a Human Face