Dedicated to my friend

This is for the man of the moment, who with his sheer grit and determination, accomplished what most people don't even think about once they get married and have kids. 

So it started in 2002 when a small-town boy dreamt to get into the IITs. Unfortunately, it didn't materialize: having missed it by a whisker.  Since 2005, I have seen a rage in his eyes of not being able to live up to his potential and the ambition of the young boy was to be part of a premier institution, be amongst the top talent in this country, and in a way make most of his talent and do something big in life.

            जब तक न सफल हो, नींद चैन को त्यागो तुम, संघर्ष का मैदान छोड़ कर मत भागो तुम।

Unlike most of us who carry the baggage of failure upon us, he tried, tried, and tried hard.

           आख़िर उसकी मेहनत बेकार नहीं होती, कोशिश करने वालों की कभी हार नहीं होती।

Fast forward to 2021, when life had something big in store for him. When all of us were settled and binge-watching, he accomplished his dream to be part of India's premier institutions and got into IIM Calcutta. 

           मिलते नहीं सहज ही मोती गहरे पानी में, बढ़ता दुगना उत्साह इसी हैरानी में।

Normally, people just dream of something and once they get it they seldom care about it. But this guy made the most of the opportunity he got and ensured he lived every moment fully up to his potential.        

           कुछ किये बिना ही जय जय कार नहीं होती,कोशिश करने वालों की कभी हार नहीं होती।

That he has been bestowed with the prestigious Arvind Kumar Memorial Award nominated by a thumping majority of his batchmates is a testament to his potential, exceptional entrepreneurial spirit, and a leader in him.

All these years we have read and heard inspirational stories of how people startup at 50 or make big at a very young age. Here we have someone amongst us, who we know very well and will act as an inspiration for our kids and all of us.

Most of us including me have settled in life for whatever we got, but his relentless efforts and indomitable spirit have led him to relinquish a life of comfort and pleasure to pursue unconventional paths in life.

So whenever you feel like giving up or feel that you are settled or it's too late, think of this guy and get going to pursue your dreams!

Wish you luck, and in all humility take a bow, my friend!

Demand Vs Supply Economics. Steps the government should take immediately

 Over last several months, several reforms have been rolled out by the NDA government. Most of these are supply side mesaures and top 3 of them are:

1. Reduction in corporate tax.

2. 20Tn Rs Atmanirbhar package - mostly in form of credit.

3. Farm Bills - Freedom to farmers to sell produce out of APMC.

However, these measures will only help when there are proportionate reforms on the Demand side. The middle class which is the highest contributor to direct and indirect taxes needs sufficient cash in hand or incentives to spend. The government should do the following in the least effective immediately:

1. Slash personal income tax by half across all brackets or double the brackets with same rates(the former option being better).

2. Incentivize the middle class to spend on the items having higher GST rates and provide them tax exemption on the GST paid.

3. The business class gets tax benefits on purchase of cars via depreciation benefits. The government should pass on these benefits to the salaried class. This will give huge boost to the collection of compensation cess and GST along with the direct and indirect jobs the auto industry would create.

Krishnamurthy Subramanian: The new CEA's view on Demonetization: Did the poor really suffer?

In the political battle that has emerged out of the demonetization exercise, both proponents and opponents are ostensibly defending the interests of the poor. Some politicians are relying on anecdotal evidence to advocate the difficulties being faced by the common man. We instead use data from the National Sample Survey Organization’s (NSSO) survey to estimate such difficulties faced by the poor. The survey provides estimates of earnings in cash and kind by different income categories. We use the survey data for 2011 which comprised approximately 500,000 individuals across the country. Our estimates suggest that the poor are likely to have visited a bank branch at most once to exchange their earnings in the old currency notes to new currency notes. Thus, we infer that the politicians advocating the difficulties faced by the poor are being disingenuous in pushing their claims for political gains.

To estimate the above, we make the following arguments. First, the poor are unlikely to have substantial savings stored in Rs500 and Rs1,000 notes. Second, the bottom half of the population ends up spending almost their entire earnings on consumption. Third, only two weeks have passed since the demonetisation was launched on 9 November. Therefore, the weekly earnings of the bottom half of India’s income earners provide us the estimate of the cash that the poor would have in their kitty, which they would have to exchange in a nearby bank or post office. Finally, since the survey was conducted in 2011-12, we inflate the earnings by the average rate of inflation per annum during the period from financial years 2011-12 to 2016-17. This is likely to overstate the earnings of the bottom half of the population because, unlike salaried individuals and other richer sections of society, the earnings are unlikely to get adjusted for inflation in a consistent manner. However, the overestimation of earnings would only reinforce the bias against the inference that the poor are likely to have visited a bank branch at most once to exchange their earnings.

As the adjoining table clearly demonstrates, the bottom half—be it rural workers, daily wagers, weekly wage earners, or fortnightly wage earners—earn less than Rs1,350 per week. In fact, even the bottom half among the urban population earns at most Rs1,970 per week. Even if the bottom half of the population has saved up to two weeks of their earnings, the amount they have to exchange will be less than the Rs4,000 limit that was set by the government in the first week. The above inference assumes that the daily, weekly or fortnightly wage earners were fully employed in the past several weeks so that they could not only earn enough for their consumption but also to save. In practice, such wage earners are chronically underemployed. As a result, the total cash in the hands of the bottom half is likely to be less than Rs4,000. Thus, it is quite clear from this data that the bottom half of the country’s population would have by now visited the local bank or the local post office at most once to exchange their old currency.

Click here for enlarge

This conclusion then suggests that the long queues seen stem from two sections of the population: (i) people from the top half of the country’s income distribution, i.e. the richer folks, who want to exchange their honestly earned savings for new currency; and (ii) people who are acting as agents for the dishonest. The significant decrease in the queues after the government decided to use indelible ink to identify people that have exchanged their currency suggests large presence of the second category of people.

Beyond doubt, the former category is inconvenienced and the government and the Reserve Bank of India should take all steps to ease their difficulties. But this category comprises people from the top half of the country’s income distribution, certainly not the poor. In contrast, those from the second category who stand in the queue are only making efforts to earn a premium from the dishonest, who are willing to pay them such premium to convert their black money into white. No politician who genuinely wants the country to clean up the black money menace should sympathize with the latter category. After all, they are abetting the dishonest in evading the legitimate tax and penalty.

With respect to the difficulties that the country’s poor are likely to face till 30 December, note that around seven weeks of earnings are left before the deadline for depositing the demonetized notes. So, based on the estimates provided in the adjoining table, the maximum cash earnings of the bottom half would be around Rs8,000. Even if we suppose that they will be paid entirely using old currency till December, at most two more visits to the local bank or the local post office would suffice to deposit their old currency. Of course, it is quite likely that these workers refuse to accept their wage in old currency. In that case, they would not need to make the visit at all. As workers in this income category are likely to have been underemployed sometime in the past, they would have a bank account to receive Mahatma Gandhi National Rural Employment Guarantee Act payments. Therefore, future wage payments can be made via cheque by honest employers. In this case, such workers may have to visit the bank once to encash the cheque.

Note, we are not arguing that poor people are not facing difficulty because of demonetisation. Of course, standing in the queue for a day can mean loss of a day’s earnings for the poor. However, using the large sample data and careful analysis, we would like to highlight the exaggerated claims of disingenuous politicians who profess to be fighting for the poor.

Source : Livemint

Emotions

Its funny how our emotions play with us. Yes, they do. Coz one thing is for sure that we don’t control them. Rather, they are the ones who govern us, more importantly our moods. They kind of embody a subtle form of our being who speaks the same way we do and can be heard only by us. They are like a constant background score of our conscious life. I don’t remember a single moment of my life where there was no on going commentary of my other self in my mind, either paraphrasing or narrating the on going events. Sometimes that other self might multiply. It can morph into those small devil and angel that appear at the side of one’s head in the cartoon movies. Both fighting and suggesting different ideas to the poor mortal human, who can’t help but listen to them. They appear just like that. Poof! Especially when you are contemplating some issue, which might be as small as choosing between coffee and tea or as big as considering to different carrier options. They are just like an undetachable part of our existence. 

People claim there is only one way to control these noises, meditation. Meditation! I I’ve tried it once. But it becomes rather more difficult for me. These voices literally begin to chit-chat with each other, completely ignoring my presence! Who gives them such energy to go on and on. They don’t seem to be mortal to me. They simply remain an unknown, unnamed part of me. When I am hungry, they are hungrier, tempting me to take just anything edible that I see first. When I am bored sitting in a meeting, they are even more jaded, trying to pull me out of the meeting room. When I am scared, they are scared as hell. Constantly prompting me to check behind the curtains, beneath the bed.

In the end, they are a constant companion. They don’t leave us alone like people do. They are with us through thick and thin. I do admit that I am grateful they don’t leave me feeling lonely at times I need someone the most. Though they might not always help in placating my worries or anything, but they do stick around. Thank you… me!!

How IPO shares gets allotted to retail investors

A series of recent initial public offerings (IPO) saw good participation by retail investors. In almost all the good issues, the quota for retail investors was oversubscribed. This is a good signal for the market as it shows significant interest from investors in equity as an asset class.

However, retail investors who had applied for some recent IPOs seem more confused as there is no logical explanation to the manner in which shares were allotted. For example, in the issues of Alkem Labs and Dr Lal Pathlabs, where retail portion was oversubscribed over three times, several retail investors have complained they did not receive even a single lot of shares despite subscribing to the full quota of Rs 2 lakh.

The method used to allot shares were changed in 2012 by the Securities and Exchange Board of India (Sebi). But the allotment process has come under investor scrutiny as there is renewed interest in some of the high-quality issues in the recent times. 

In order to understand the rationale behind the allocation, we need to look at the guidelines issued by Sebi. Firstly, we need to understand that applications are segregated into three categories -- institutional or qualified institutional buyer (QIB), NII (non-institutional investors) or HNI (High-networth investor) and retail individual investor (RII).

In the case of QIB, the merchant banker has the discretion to allot shares. In the case of QIB, shared are allotted proportionately. Thus, if shares are oversubscribed by say, five times then an application for 1,000,000 shares will receive only 200,000 lakh shares.

But when it comes to retail investors, the process is a little more complex. First of all, only RII are allowed to invest in smaller lots worth between Rs 10,000-15,000 as compared to Rs 5,000-7,000 before 2012. A maximum of Rs 2 lakh per IPO can be applied by an applicant in the RII category.

The total number of applications received in the RII category is grouped together to determine the total demand in this category. If the aggregate demand in this category is less than or equal to the retail portion at or above the offer price (in case of a book-build operation), full allotment may be made to the RIIs to the extent of the valid bids.

However, if demand in this category is greater than the allocation in the retail portion at or above the offer price, then the maximum number of RIIs who can be allotted the minimum bid lot will be computed by dividing the total number of equity shares available for allotment to RIIs by the minimum bid lot, this is known as ‘Maximum RII Allottees’.

Assuming that there are shares worth Rs 10 lakh to be allotted in retail segment and the minimum lot size is worth Rs 10,000. Thus only a maximum of 100 applicants will be receiving the minimum lot of Rs 10,000. Since Sebi says that no RII will be allotted less than the minimum bid lot, in case of over subscription, allocation of shares lower than the minimum lot is not possible. In this case, the Maximum RII Allottees are 100.

In case there is a small oversubscription then first the minimum lot is distributed among all participants and then the balance available equity shares in the retail portion shall be allotted proportionately to the RIIs who have bid for more than one minimum bid lot.

But in case the number of RIIs is more than Maximum RII Allottees, the RIIs (in that category) who will then be allotted minimum bid lot shall be determined on the basis of draw of lots. The draw of lots is now a computerized process and thus there is no room for partiality.

Source : Business-Standard

Prepare for your GDPI

This is the time in the year, when most of the guys get calls from B Schools for interviews after their CAT/XAT/NMAT/GMAT scores are ready.

Its very difficult to predict however, what questions you might end being asked in the interview, make sure you are prepared the best and you atleast have an idea on most of the current happenings in India and the world.

 Global economics:

•    Slow global economic recovery
•    Turmoil in global stock markets
•    Fall in oil prices: Its impact on India and OPEC countries
•    U.S. economy – jobless recovery and growth pangs
•    Japan and Abenomics: Recent move of negative interest rates
•    Chineses Economy: Its rise and stagnation

 Indian economy:

•    Current state of the economy
•    Reasons behind slow GDP growth
•    Budget 2016-17
•    GST Bill
•    FDI reforms;
•    SMART Cities plan
•    Swachh Bharat
•    Startup revolution in India
•    Make in India
•   Agriculture

 Global politics:

•    China - political & military muscle-flexing
•    Syrian crisis – Role of the Islamic State
•    Rise of Islamic State in Iraq and Syria
•    Presidential Elections in US
•    Rising authoritarianism in Turkey
•    North Korea versus South Korea 
•    ISIS
•    Terrorism in Afghanistan & Pakistan

Besides, based on your academic credentials, be prepared on most of the basics of the field you graduated in. If you hail from a business background, prepare yourself on the operations and marketing aspects of your business. If your family has an industrial background, make sure you know well about the big players in the market and your vision of getting it there.

PS: The blog http://mrunal.org/economy may prove very helpful for guys appearing for competitive exams.

No pain, No gain

"Ache Din Aanewale hai", he said and people believed. Everybody wants a feel good factor in life. You and I,everyone under the sun wants to live a risk free, carefree, happy and a much easier life. When we were kids our happiness was no homework or no parents at home to bother you for studies. As we grew up, in teenage we wanted to fall in love, get admission into engineering/medical colleges etc.. In early phase of your career, everybody wants to be in relationship, have amazing sex,look perfect and make money and be popular and well respected and admired by everyone. Everyone would like that — it’s easy to like that.

One day, my senior asked me "What do you want from life?". I told him "I want to be happy, have a great job and enjoy life to the fullest". And he replied "Do you really think that you are gonna get all of this so easily?" Sounded so ubiquitous that it didn't even mean anything later on. I started thinking the opposite way? And that statement of my friend wasn't a disappointing one, but thought provoking. I asked myself: What is it that I want in life? If I think I am ambitious, am I willing to struggle to achieve them? What amount of pain can I suffer and let go to get to that level in life, where people will call me a successful guy? I did not have clear answers to any of them.

Everybody wants to have an amazing job and financial independence — but not everyone wants to suffer through 60-hour work weeks, long commutes, obnoxious paperwork, to navigate arbitrary corporate hierarchies and the dull confines of our chaotic conurbations. We want to be rich without the risk, without the sacrifice, without the delayed gratification necessary to accumulate wealth and so do I.

Everybody wants to have an awesome relationship — but not everyone is willing to go through the tough conversations, the awkward silences, the hurt feelings and the emotional psychodrama to get there. And so they settle. They settle and wonder “What if?” for years and years and until the question morphs from “What if?” into “Was that it?” Because happiness requires struggle.

If you want an amazing physique like Hritik Roshan. You will have to appreciate the pain and physical stress that comes with living inside a gym for hour upon hour, calculate and calibrate the food you eat, plan your life out in tiny plate-sized portions.

If you want to start your own business or become financially independent learn to appreciate the risk, the uncertainty, the repeated failures, and work tirelessly on something you have no idea whether will be successful or not.

Anybody who has studied human behaviour will understand that our needs are more or less similar. Positive experience is easy to handle. It’s negative experience that we all struggle with. Therefore, what we get out of life is not determined by the good feelings we desire but by what bad feelings we go through and the ability to sustain to get us to those good feelings.

People want a partner, a spouse. But you don’t end up attracting someone amazing without appreciating the emotional turbulence that comes with weathering rejections, building the sexual tension that never gets released, and staring blankly at a phone that never rings. It’s part of the game of love. You can’t win if you don’t play.

What determines your success isn't “What do you want to enjoy?” The question is, “What pain do you want to sustain?” The quality of your life is not determined by the quality of your positive experiences but the quality of your negative experiences and the lessons learnt from these experiences.To get good at dealing with negative experiences is to get good at dealing with life.

If you want the benefits of something in life, you have to also want the costs. If you want the beach body, you have to want the sweat, the soreness, the early mornings. If you want the yacht, you have to also want the late nights, the risky business moves, and the possibility of pissing off a person or ten thousand.

If you find yourself wanting something month after month, year after year, yet nothing happens and you never come any closer to it, then maybe what you actually want is a fantasy, an idealization, an image and a false promise. Maybe what you want isn't what you want, you just enjoy wanting. Maybe you don’t actually want it at all. But the truth is far less interesting than that: I thought I wanted something, but it turns out I didn’t. End of story and you realize "I wanted the reward and not the struggle. I wanted the result and not the process. I was in love not with the fight but only the victory".

Who you are is defined by the values you are willing to struggle for. People who enjoy the struggles of a gym are the ones who get in good shape. People who enjoy long work weeks and the politics of the corporate ladder are the ones who move up it. People who enjoy the stresses and uncertainty of the starving artist lifestyle are ultimately the ones who live it and make it.

As I keep saying "Pain is better than orgasm".Be ready to live a life full of pains(in the context of your hard work) which are worth the successes they offer.

Marrige is function of time and people. M = f(P*T)

          While many people do not believe there is such a thing as “finding your perfectly matched soul mate,” I've seen plenty of evidence that we can become each other’s soul mates as the result of a deep and lasting love relationship. If humans can develop finely honed skills in music, athletics, and language arts, wouldn't it be equally possible for them to become perfectly suited and completely irreplaceable to their spouses? A musical genius develops perfect pitch and can create soul-stirring compositions of musical beauty.Someone who becomes fluent in a language “thinks” in that language—there is no effortful retrieval once the language becomes second nature.  

For a couple love and respect for each other have been practised so repeatedly that thoughts of separation or divorce are completely alien. As in case of Indian marriages, if not love, then respect for each other is so well practiced that thoughts of separation or divorce are completely off the mind. Both of them become indispensable to each other over a period of time. The relationship becomes so multifaceted that none can live happily while the other is unhappy.Two individuals who have become perfect for and irreplaceable to each other have become soul mates. In this way, soul mates become each other’s “one in a billion perfect match.” This for me is the form that a soul mate takes in one’s life. 

As I typically say, arrange-married couples are launched by their families in an atmosphere of great extravaganza, these couples pass a threshold of being indispensable for each too early. This transition by the way would be different for each couple. Perhaps this shift is the result of successful reconnection because of the two families which too get married to each other along with their children. However this is not a passive process. Marriages don't get better a time passes alone, but they get better as and when two partners continue to treat each other with love, respect and affection. So marriage is a function of time and people. M=f(T*P);

As a result of this, partners must continue to treat each other with love and respect , despite the challenges life brings.

Whenever two individuals become each other’s soul mate, the remaining years of marriage are grounded in security and a rare and special form of intimacy. As I see it, during the soul mate phase of a well-nurtured marriage, the developmental tasks would be to celebrate and make meaning of the life you have lived together, operating as sacred keepers of each other’s thought processes, and to become generative together towards others. One hallmark of couples who have passed into the “soul mate” phase of their marriage is that they continually bless and inspire others through the way they treat each other and those around them.

In the mid stages of marriage, couples realize that just love for each other is not enough. They need to work and toil so hard to live a perfect life and fulfill the aspirations of their kids. This is the period when the priorities suddenly change. For e.g if they have kids, then the mother's allegiance is always towards the kid and the man is busy working hard, earning dollars or rupees to fulfill the aspirations of his childhood. Both mom and dad live the life they couldn't through the kid. During this period, the time spent with each other is minimal. The communication happens through the kid, but the love for each other remains.

In the final stages of life, the love that can be felt is a deeper, more satisfying level of love than anything that anyone encounters in the first few years of the relationship. In one sense, to make a comparison between the experiences of love at these two relationship stages is like comparing apples and oranges. I would argue that love of a deep and meaningful kind is only possible when based on real knowledge. If being loved is based on being known for who you are and cherished despite your flaws, then the feelings one has during the initial goody goody phase of a relationship can’t be love. These feelings would be some combination of other pleasurable things like hope and attraction or may be physical pleasures. If you doubt this, then consider the difference between your first crush or first love and your real marriage which you had endured all these years, the person who has been by your side through thick and thin, who has invested his/her time and energy in you.

As an analogy, imagine the way it would feel to move into your dream home, full of excitement and thrilling plans for the future (in parallel to the goody goody  phase of a relationship). Now, imagine the feelings of love and attachment you would have about the same home after making every square inch of the home suited to your personal tastes and filling it with layer upon layer of joyful memories over the course of a full and rich life (in parallel to the tested romanticism phase). The feelings you would have in either case cannot be compared as equals, but I would guess that most of us would cry harder if the home full of memories caught fire.  

So what is the reason behind the hight success rate of Indian marriages? It is the time and energy which two people invest in each other along with their families, which makes it a highly stable framework in place anywhere in the world.

Arvind Subramanian,CEA Vs Raghuram Rajan RBI Gov. Different tales.....

                 When Arvind Subramanian was appointed as CEA, the decision was hailed and supported from all the quarters. Former FM P Chidambaram, mentioned that Subramanian had for long been a choice for this post. He was appointed as CEA,despite the fact that he had been highly critical of NDA's budget in 2014. This showed that the government was ready to accept criticism and for a course correction in the eventuality. There have been many hits and misses in last 18 months. One of hits have been we have achieved a greater macro economic stability. Most of this had been aided by lower imports and lower commodity prices. We need to achieve a savings rate of 36% as it was in the high growth era, low inflation(in the range of 4-6%) and million jobs per month. The budget needs to be focussed on agriculture, infrastructure and education. This is where the CEA and RBI governor can play an important role. With two of these finest minds in the world, we need no other economist to prepare a blueprint for the economy and fire it on all cylinders.

Here is a good article on The Hindu comparing the stints of both these personalities in their respective roles so far.

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Chief Economic Advisor (CEA) Arvind Subramanian started 2015 on an over-optimistic note. He is likely to have ended it in disappointment. The economy is slowing down: in the first six months of the financial year, real GDP grew 7.2 per cent, slower than the 7.5 per cent in the corresponding earlier-year period. In 2016-17 too, GDP growth will not be significantly greater unless some specific steps are taken, the CEA has said. Thankfully, there are few takers in the government for the main measure he is suggesting: a further pause on fiscal deficit reduction.

About a year ago, barely months into his job in the Finance Ministry, Dr. Subramanian projected a sharp recovery with growth of up to 8.1-8.5 per cent. He forecast the acceleration even though he did not expect any big-bang reforms (on this count, his forecast was correct). In his scheme of things, the spurt in growth would come from incremental policy pushes, such as to subsidy reforms, direct benefit transfers, and financial inclusion of the poor.

The brave outlook underestimated the weakness in the exports sector. It relied on the Rs. 70,000 crore of public investment that was earmarked in the year’s budget — as suggested by him — for building infrastructure to stimulate private investments. The stimulus he had designed was implemented. It proved insufficient to generate the growth impulses needed to kick-start the over $2 trillion economy and rekindle animal spirits gone numb in the dying years of the United Progressive Alliance’s 10-year stint due to policy paralysis and corruption scandals.

As things stand, it seems unlikely that industrial growth will cross 5 per cent. Growth in lending by banks to industry, a proxy for investment sentiment, hasn’t budged from a 20-year low. Corporate balance sheets are burdened with mountains of debt. The worst exports performance since 1952-53 is inevitable.

A government not shy of its business-friendly credentials should have picked up these stress signals early on and administered the remedies, but its mandarins were too excited: international agencies had declared that 2015 was going to be the year in which India would race past China (the Chinese economy is about five times as large as India’s) to be the fastest growing economy in the world.

It was. But that this had probably more to do with China slowing down rather than India picking up, and the stark difference in size made the comparison between the two economies irrelevant. But the cheerleaders among bureaucrats and ministers couldn’t be bothered with technical minutiae — all that mattered was that India is a bright spot in a gloomy global economy.

Why is growth slowing?

In the boom years during the UPA government’s tenure, four engines had powered the economy. Of those, just two are still running: government investments and private consumption. Exports and private investments, the other two, are out of steam. The UPA years saw an investment boom, which was bound to turn sooner or later, and has.

Lower borrowing costs could restart the investments cycle but the hands of the Reserve Bank of India Governor, Raghuram Rajan, are tied. An agreement that the government and the RBI signed a year ago has made controlling inflation the main objective of monetary policy. The agreement formalised a policy goal that the central bank has always pursued anyway, except that it set the targets in terms of consumer price inflation. Moreover, government-owned public sector banks have been slow to pass on to borrowers the rate reductions that Dr. Rajan has announced. Banks are a cartel and keep interest rates high because higher interest rates mean bigger profits.

Dr. Rajan is well on course to bring inflation within the 6 per cent target that the government set around the same time the CEA made his cheery growth forecast. In fact, the ‘rock star’ Governor, with whom the CEA has worked closely earlier in the International Monetary Fund, has had an excellent year. India was still one of the ‘fragile five economies’ when the year began. Yet, it is the only one to have come out of the phase of heightened currency volatility and current account deficit instability that characterised the group. Besides, the purse-string managers of the government’s budget in North Block, who haven’t yet let its fiscal deficit slip, Dr. Rajan too deserves credit for restoring India’s macroeconomic stability, which the government hasn’t quite leveraged to push growth, just as it has been caught sitting on its hands despite the favourable global trends in oil and commodity prices.

On growth, Dr. Rajan has been spot on. By the end of the summer, he had cut the Reserve Bank’s GDP growth projection for the year not once but twice. In July, even as Dr. Subramanian was sticking to 8.1-8.5 per cent, Dr. Rajan’s call was 7.4 per cent.

The overconfidence in Delhi lasted till the last day of November, when new official data released, revealed a slowdown instead of the promised smart recovery. Within hours, the government cut its growth projection to 7.5 per cent.

In the following weeks, the CEA did a few mea culpas on earlier positions, raised fresh concerns about the state of the economy and declared the official data puzzling and unusually difficult to interpret. And he called for reassessing the government’s commitment to fiscal deficit reduction.

Environment for lower interest rates

Abandoning the committed path for fiscal rectitude now will put macroeconomic stability at risk. It might end up hurting growth rather than supporting it with the government and the RBI working at cross purposes. How? To fund a wider deficit, the government will have to borrow more, which could push up interest rates and crowd out private borrowers.

Inflation might have been tamed but the Reserve Bank’s key interest rate, despite cuts adding up to 125 basis points in 12 months, is still high for a revival in investments and growth. Although higher public investments are desirable, the government needs to do all it can to create the environment for lower interest rates, not higher.

Public investments can be increased without deferring deficit reduction, though. There is a perceptible improvement in the quality of government spending with a shift towards capital expenditure. This can be built upon. Savings from efficiency in spending remain an underrated resource. The government ought to cross the political hurdles for strategic disinvestment. If the government’s fiscal consolidation would distract from the demand in the economy, much of its spending will also add to it. Government employees’ salaries and pensions are set to rise as the Seventh Pay Commission award is accepted and disbursed. The hikes are bound to result in a surge in demand for goods and services. So are other transfers from the government.

The growth and the outlook won’t seem as lacklustre if Dr. Subramanian had corrected his forecast earlier, as Dr. Rajan had. He publicly differed with Dr. Rajan and took a bet on accelerating growth, and it looks as if he is going to lose the bet.

Source: The Hindu

Learning from the trailblazers: Raghuram Rajan shares workplace tips

         Raghuram Rajan has always got a rock star attention. He must be given credit for having spoken succinctly on many issues bothering India and being an economist, he has always given an economic angle to it. He rightly says, for India to unleash its full potential, there has to be fierce competition between different groups. These groups might be students, organizations, states, state-governed-organizations etc. The competition has to be so healthy that we learn from each other's mistakes and successes and strive hard to keep adding value to the society. 
         
         RBI governor Raghuram Rajan's speech at IIT Delhi's convocation last week included references to physicists, Indian kings, economists and scientists. Rajan recalled some of their exploits while building a case for diversity of viewpoints in a vibrant organisation and many of his ideas are fitting mantras for modern workplaces.

Here are his viewpoints on modern workplaces, which he says must be open to debate and the top level leadership must be open to accepting questions.

Richard Feynman, physicist

What Rajan said: "Feynman (a Nobel winner) found the atmosphere at the Institute of Advanced Studies at Princeton stultifying. He found the atmosphere sterile because there were no students to ask him questions — questions that would force him to rethink his beliefs and perhaps discover new theories."

In the corporate world, a work environment where debates and discussion are not fostered is not innovative. Sycophancy might help a manager consolidate his or her power but that would be detrimental to the company's interests. 


Raja Raja Chola, of the Chola dynasty

What Rajan said: "In building the Brihadeeswara Shaivite temple at Thanjavur, ( Raja Raja Chola) incorporated sculptures of Vishnu as well as the meditating Buddha, thus admitting to alternative viewpoints."

When it comes to matters of diversity at the workplace, men, women, the disabled and those belonging to the LGBT community, among others, all possess a distinct point of view that must be accommodated and valued.

Shahenshah Jalaluddin Muhammad Akbar, the Mughal king

What Rajan said: "When (Akbar) invited scholars of all manners of persuasion to debate the eternal verities at his court, he was only following older traditions of our Hindu and Buddhist kings, who encouraged and protected the spirit of enquiry."

Beyond simply admitting alternative viewpoints, it's important to accept them. A pool of diverse opinions can help shine a light on the problems being discussed, resolving the issue in an unexpected manner. 


Albert Einstein, the theoretical physicist

What Rajan said: "Ideas start with questioning and alternative viewpoints, sometimes seemingly silly ones. Einstein built his theory of relativity pondering the somewhat wacky question, of what someone travelling in a train at the speed of light would experience." 

As the governor said, nothing should be excluded, but everything should be subject to debate and constant testing. No one should be allowed to offer unquestioned pronouncements. Conventional wisdom must be challenged on an ongoing basis. 


Source: Economic Times

Learning too much from the past?

Decision making is a very important aspect in all spheres of our life; be it business, academics, profession, personal life etc. Given the nature of Indian society, our decisions naturally get altered based on our surroundings, upbringing and more importantly our past experience.

I read the below article in my favorite news paper The Hindu Businessline, which succinctly describes all these factors which we consider in the decision making process. The crux of the article is, while it is good to have rich experience in framing a decision, it is equally important to focus on the process. Time, people and situations change. We must learn from the past and alter the process based on the current environment. I always believe, in any life game, the rules or the processes which added value to you or to the society a few years ago might not necessarily add value now. Therefore, it is necessary to learn our lessons hard and correct ourself.

Since, I keep a lot of interest in politics, I hope Modiji our PM reads this article and understands that whatever worked in past might not necessarily work in future.

Here's the article from the hindu businessline.

What worked in the past may not work in the future unless we focus on the process.

We rely on the weight of experience to make judgments and decisions. We interpret the past – what we’ve seen and what we’ve been told – to chart a course for the future, secure in the wisdom of our insights. After all, didn’t our ability to make sense of what we’ve been through get us where we are now? It’s reasonable that we go back to the same well to make new decisions.

It could also be a mistake.

Experience seems like a reliable guide, yet sometimes it fools us instead of making us wiser.

The problem is that we view the past through numerous filters that distort our perceptions. As a result, our interpretations of experience are biased, and the judgments and decisions we base on those interpretations can be misguided.

If our goal is to improve decision-making, we can use our knowledge of those filters to understand just what our experience has to teach us and learn how to overcome our biases.

We focus on what we can see

In the business environment, the outcomes of decisions are highly visible, readily available for us to observe and judge. But the details of the decision process, which we can control far more than the result, typically don’t catch our attention. If the aim is to learn from experience – mistakes as well as successes – acknowledging that process is crucial.

Circle of advisers

Honest feedback – an unbiased, undistorted assessment of one’s experience – is essential for improving decisions. Yet decision makers are often surrounded by individuals who have incentives to feed them censored and self-serving information – and these people are not necessarily a crowd of yes-men.

Overvaluing experience

We can’t place all the blame for our distorted view of the world on the environment and our inner circle. Some of the blame lies with us. We tend to search for and use evidence that confirms our beliefs and hypotheses, and we gloss over or ignore information that contradicts them – an exercise of selectively building and interpreting experience known as the confirmation bias.

How not to be fooled

The following techniques can uncover the real lessons experience offers and help you base decisions on a clearer view of the world.

Sample failure: Failures and the processes that lead to them are doomed to stay in the dark unless special occasions are created to bring them to light. To identify what could be done better in the future, companies can also conduct decision post-mortems to analyse underlying processes.

Don’t miss near misses: Another oft-ignored event is the near miss – a failure that’s disguised as a success, but only because there are generally no dire consequences.

Pursue prevention: Recognising a potential problem requires a different approach than solving an actual problem. One strategy is to harness employees’ collective talents by allowing people to raise concerns about the firm’s operations. Disagree: As Peter Drucker wrote, “The first rule in decision making is that one does not make a decision unless there is disagreement.” To devise healthy strategies, executives need to hear many perspectives.

Disconfirm: Rather than finding clues that corroborate your hunch – all too easy in an information-rich world – start by asking yourself how you could know you were, in fact, wrong.

Source:  Experience is not always wisdom

Emerging entrepreneurs

The year 2014 has come to an end. What a turbulent and cacophonous year it was. Nevertheless, ending this year on a motivating note. Here is the list of articles in which the stories of emerging entrepreneurs in India is shared. Who says, India lacks talent? It's only a matter of time when the Make in India program will get transformed into Make for India, Live for India and Serve for India.

Pipping hot news and in your palm too

Giving electric scooters a positive charge

Powering up payments on the go

Incubation model help building ecosystems

Softbank invests $90mn in housing.com

The PPP way to growth

While big-ticket reforms are held up, let’s address infra concerns

Again a goodread from The Hindu's Businessline, an excellent newspaper for policy making articles.

That the Narendra Modi government ran into a wall of Opposition in Parliament in trying to push reform legislation in coal and insurance is unfortunate Even so, ordinances cannot institutionalise a new model of governance; at best, they may only signal to a restive industry that the Centre means business and buy some time to cobble up a consensus in Parliament. But even if such a consensus on amending laws on land acquisition, labour, mining and the financial sector takes time in coming, there are enough areas where supply side constraints can be eased without breaking into so much as a sweat. One of these is allowing for renegotiation in new PPP projects, if not in existing ones. The 3P India initiative, announced by Finance Minister Arun Jaitley in the Budget, marks a salutary attempt to address “weaknesses of the PPP framework, the rigidities in contractual arrangements, the need to develop more nuanced models of contracting, and speedy dispute redressal”. This process needs to be cranked up for the over 900 PPP infrastructure projects in the fray, involving a credit exposure of nearly ₹9 trillion.

In this context, the recent RBI circular extending the so-called 5:25 scheme to existing infrastructure projects is to be welcomed. These projects can now get finance over 25 years, with the banks being allowed to refinance or sell out their loans every five years. This is a way out of the stressed assets logjam that has frozen up both the supply and demand for credit. The growth of bank credit to infrastructure sectors fell from 45 per cent in 2011-12 to 18 per cent in 2013-14 and has been trending downward since. Banks cannot lend beyond a tenure of 10 to 12 years due to their asset profile, and this impacts both the viability of the loan and the costing/pricing of projects such as roads and metros, among others. The India Infrastructure Finance Company, set up in 2006 to overcome the asset-liability mismatch, does not seem to have made enough headway.

However, as the Finance Minister observed, finance is only one of the problems weighing down PPPs. Contracts need to be renegotiated when macroeconomic shocks overturn earlier assumptions. To ward off allegations of crony capitalism or litigation from bidders who lose out in the first stage, it is important to create a credible institutional mechanism. This is precisely what 3P India should set out to do, besides thinking up innovative financial instruments and concession agreements. It could ease up exit conditions, so that promoters can use the freed up capital for other projects. Pricing should combine public purpose considerations with those of risk and efficiency. Pushing big ticket reforms is no cakewalk in a raucous polity such as ours. Yet, a robust PPP framework can make a difference in cranking up investment and growth.

For those who don’t like Mondays; how does ‘everyday Friday’ sound?

I came across this article on economic times blog. I think its worth reading once:

The most difficult task for any boss or organization is to ensure employees look excited about coming to work on a Monday morning. An HR head from a multinational firm once told me how he gauges the engagement levels of employees by their mood on the morning of the first day of the week. That gives him a sense of whether he needs to dig deeper into any issue that may be bothering them or grasp any matter that may require the organization’s immediate attention. If the mood is good on a Monday morning, then there’s nothing to worry about.

What is it about Monday mornings that makes it a little less exciting than Fridays? A funny video that has been doing the rounds on WhatsApp brings out the employees’ state of mind quite clearly. It first shows a sprightly penguin jumping around in gaiety on a Friday, and then the scene cuts to a Monday morning that features a lazy seal trying to drag itself uphill.

But jokes apart, unlike most beginnings – a new venture, New Year, a new house, a new journey, a new job or may be a new posting – why is the beginning of the week considered to be a little less motivating for some? Is there something missing at the place of work that employees love Fridays more than Mondays?

Beginnings, otherwise, are usually exciting. There is an element of surprise at the start of one’s journey. There are expectations in anticipation of forthcoming events. The adrenaline levels are high, which translate into better productivity levels. But these beginnings are not a weekly affair. They don’t make an appearance as often as a Monday does. In an employee’s mind, the week can appear like a mountain on a Monday that has to be crossed to get to Friday.

What if there was no sense of a mountain and the workplace recreated an atmosphere of “Everyday Friday” even on a Monday? (This requires a rider: It does not mean employees can wind up early, not plan for the next day and not come to work the following day, like on a Friday!) But the ambience can be made more Fridayish. It only requires a little extra effort on the part of the organization and the leaders therein. May be the first meeting on a Monday could be set in an unconventional place – it could be a garden or a cafe nearby.

This would ensure two things. One, it would perk up employees and two, to everyone’s surprise, it may even have a positive effect on creativity and productivity levels of employees who would then certainly look forward to coming to work on a Monday.

For powerpoint presentation meetings, other fun things could be considered. Based on feedback from employees (their involvement is important) on how Mondays could be made more exciting, the organization can come up with a different plan.

A Towers Watson Global Benefits Attitudes survey shows how levels of workplace disengagement significantly increase when employees experience high levels of stress. According to the research, of those employees who claimed to be experiencing high stress levels, over half (57%) also reported that they were disengaged. In contrast, only one in ten (10%) employees claiming low stress levels said they were disengaged and half of this group claimed to be highly engaged.

The report talks about how companies need to take more responsibility towards employees’ wellbeing and happiness. This would only go a long way to ensure higher productivity levels at the workplace.

As a rule, organizations could make Mondays a `stressfree’ day; let people warm up to the week, just like the motor of a car requires a little bit of revving after a few days of immobility before it gets rolling on the road. Let employees gradually gear up to the week. On a higher gear, even a car cannot take a steep climb. If employees have lower stress levels at the start of the week, they would be well conditioned to deliver better results during the week.

Three months into implementing this exercise of Everyday Friday, it would be interesting to know the impact of the same on Monday attendance levels. Organizations could make this their New Year resolution.

Source: EconomicTimes Blog

Hydro power potential in South Asia

Himalayan rivers offer immense potential to the power sector in South Asia. China has been building huge dams on Bramhaputra river. India needs to form a coalition with its neighbouring countries like Nepal,Bhutan,Bangladesh and even Pakistan to tap the potential of these rivers as far as power generation is concerned. This region is so blessed by water and sun, if the hydropower potential and solar power potential is harnessed, we would not required to sign and nuclear power treaty with any nation in the world. All we need to do is get our act together and expedite the projects.

Here I share a good read on The Economist on the hydro power potential in the Himalayan region.

South Asia’s hydro-politics

Heartbreak

Every single person under the sun will go through the pain of heartbreak in his/her life. The pain is one thing which everyone from all walks of life, can relate to.No one in the world will be able to instantly take away your tears or heal the wounds that have been inflicted upon you. Only time can help here. However, what is hardly ever said about heartbreak is , the lessons we learn and take away in the times of emotional tragedy.

Without love for the other, there would never be this pain. And, without heartbreak, there would never be such amazing love. This may sound like the ultimate paradox, but losing someone you love proves to be an incredible learning and growing experience. You may be reading this thinking “Fuck you, you bastard. My heart’s in shambles right now and you want me to think this is going to turn into a good thing?” As confusing and almost insane as it may sound, having this happen may change you in so many different ways. One thing which it will do is definitely bring you out of your comfort zone. Your preconceived notions about people will change.

Having a hard goodbye, to someone you love, is one of the toughest thing to do but moving on with your life will only enhance the times you have with other loved ones. Going forward it will only deepen every minute you spend with the people about whom you truly care. 

One important lesson which you will learn is to be able to start forgiving with more ease and forgetting about the things that don’t really matter so much. Your endurance to bear this hardship will only make you a stronger person. You will be able to make out whom you should let in and who can’t stay in your life.This will open your whole life up to more and more great experiences because you will be able to share it with people who genuinely care for you and whom you really care for.

Nevertheless, it’s not a perfect system and it should not happen to anyone. Sometimes we become absolutely helpless. But, there will be another tomorrow, another day felt with warmth,affection,passion and love will embrace you one day..

Just remember that your bumps and bruises will heal and the scars will faint over the period of time. Time will help you heal, and heartbreak itself will help you grow. In what is, undeniably, the hardest, most painful life lesson one could ever learn, heartbreak will help mould the rest of your life. Only if you don't let the heartbreak get converted into a setback, it will teach you to love better and love more and more importantly value love.......