The future is coming. Are you ready ?

I read this very interesting article on the growth of the much used device for everyday requirements. Below are some very great thoughts that the author has shared which I completely agree upon..

Hope you find it interesting...

Forty-six years ago, Intel cofounder Gordon Moore published his observation that the number of transistors that could be put on a silicon chip doubled about every two years—meaning that computer capacity would also increase geometrically.

At the time, Moore believed that this growth might continue for “perhaps 10 years.” In fact, he was off by three decades and counting. Over time, advances in chip technology have proceeded almost like clockwork, with capacity sometimes doubling even faster. This spring, Intel announced yet another new chip that keeps Moore’s Law right on track.

Intel says a vertical ridge on its new 22-nanometer Ivy Bridge 3-D Tri-Gate chip creates much more real estate for transistors. “Just as skyscrapers let urban planners optimize available space by building upward, Intel’s 3-D Tri-Gate transistor structure provides a way to manage density,” according to the May 11 announcement. But how long can this doubling go on?

At one extreme, pessimists argue that it can’t continue for too much longer—that the circuits are becoming so tiny now that physics will prevent it. Already, the scale is difficult to comprehend: Intel’s May release noted that “more than 6 million 22nm Tri-Gate transistors could fit in the period at the end of this sentence.” The pessimists say that the shock of running into a wall will be a terrible blow to the high-tech sector, which has worked in an environment of exponential growth for years.

At the other extreme, some futurists contend that Moore’s Law will hold for many more decades. Indeed, they say, we stand at the cusp of a “singularity,” another point like the invention of agriculture or the industrial revolution when suddenly everything changes.

THE NEW BIG BRAINS IN TOWN

Some of these writers and thinkers predict that the time will soon come (writer Ray Kurzweil points to 2025) when computers will be, briefly, as smart as people—shortly after which, they will surpass us, leading to some very strange consequences.

In his 2005 book, The Singularity Is Near, Kurzweil argues that “the pace of change of our human-created technology is accelerating and its powers are expanding at an exponential pace … within several decades, information-based technologies will encompass all human knowledge and proficiency, ultimately including the pattern-recognition powers, problem-solving skills, and emotional and moral intelligence of the human brain itself.” By the end of this century, he believes, “the nonbiological portion of our intelligence will be trillions of trillions of times more powerful than unaided human intelligence.”

Kurzweil says that this shift will lead to revolutions in medicine and other fields as brains faster and better than ours solve problems with ever-greater rapidity. Others see negatives ahead, including a complete collapse in the value of human labor—and maybe even a decision by the new management that our services are just generally no longer required.

This scenario might sound farfetched, but the singularists can’t be dismissed out of hand. Exhibit A is the astonishing technological progress made in the past 50 years. In his book, Kurzweil talks about being given access to the biggest computer in New England in 1968, an IBM 360 Model 91, which had 1 megabyte of core memory and rented for $1,000 an hour. Today, the most basic Dell desktop comes with 2 gigabytes of random access memory—2,000 times more memory than the 360 had—and it can be purchased for $279, or $43.80 in 1968 dollars.

High-end capabilities keep growing as well. In 1997, Deep Blue, an IBM computer, beat Garry Kasparov in chess. This year, Watson, another IBM super computer, beat two all-time champions of the long-running U.S. trivia game show, “Jeopardy”—perhaps less of a mathematical challenge than the chess game, but a testament to the virtues of a 4-terabyte memory. (A terabyte is 1,000 gigabytes.) “I for one welcome our new computer overlords,” quipped contestant Ken Jennings at the conclusion of the three-day match.

SURE THINGS

Whether Kurzweil’s singularity is near or far, the consensus seems to be that chip capacity, bandwidth speeds, and storage capacity—the three key elements of IT growth-—will all keep increasing at exponential rates for at least the next 10 to 20 years.

Chip capacity.

Intel’s latest chips are just 22 nanometers wide, not far off from the point where the rules of classical physics no longer apply. Ten nanometers is the absolute limit for transistor miniaturization—any smaller and you’re getting close to the atomic level, where non-classical effects arise, says Bruno Thedrez, a professor of communications and electronics at ParisTech. However, he adds, stacking chips will provide a third dimension for growth for some years to come.

Bandwidth

Jakob Nielsen, the Internet design guru, has noted that the amount of bandwidth available to high-end Internet users has grown by roughly 50% every year since 1983. Nielsen, in an update, recalls that he wrote his original article on this topic in 1998 on an ISDN line that could download 1 megabyte per second, and that this year he could download 31 mbps. Looking ahead, Thedrez says that scientists have pushed 100 gigabytes per second over a single-wavelength optical fiber and that within 20 years there is now no technical reason that fiber capacity couldn’t climb to 50 terabytes, or 50,000 gigabytes. Wireless bandwidth growth is a bit more problematic, Thedrez says, first because the power required would make your phone too hot to handle, and second, bandwidth is already divided by governments. It’s a lawyer limit, he jokes, the one kind physicists have no tools to fight against.

Storage

Mark Kryder, former chief technology officer at Seagate, the hard-disk company, and now a professor of electrical and computer engineering at Carnegie Mellon University in Pittsburgh, says that the capacity of hard disk drives increases about 40% every year. He estimates that by 2020, people will be able to buy a 15-terabyte, 2.5-inch disk for less than $150—and says that he thinks there is a good chance he is being too conservative. To put it into context, that’s a much more powerful and compact disk than anything available on the market today for consumers at any price. By comparison, Best Buy now offers a 10TB external disk for $1,799 that’s about 5.9×7.3 inches.

However, Kryder says he suspects the storage industry’s 40 percent growth rate will break down between 2020 and 2025. At that point, he says, the industry will either move toward a different technology or, if exponential growth is continuing in other parts of the computer, such as the processor, more effort will be made to ensure that storage can keep up. “If one component (processor, memory, storage, for example) becomes much more costly, resources will be shifted to bring its cost down and in line with the others,” he says. “Economics really does control what gets developed.”

HOW THINGS WILL CHANGE

But do we really need a 15-terabyte disk drive? “Throughout my 45 years of working in the storage industry, people have always said that they couldn’t imagine what they would do with more storage capacity, but demand has always been there for the exponential increase,” Kryder says. “Today, for example, we look at YouTube videos that have much less than HD resolution. Why don’t YouTube videos come in 3D HD? As processing speeds, communication speeds, and storage capacities increase, they probably will.”

Assuming all this acceleration stays on track, will it matter? Beyond the joys of 3D YouTube video, will such advances bring any real gains to humanity?
The answer seems to be, yes. While Thedrez observes that applications have always expanded to fit the available bandwidth-—sometimes in ways rational thinking would not predict—he also says that future growth should help the trend toward cloud computing and pave the way for the coming Internet of Things. In addition, many complex problems should become easier to solve. Consider the impact on medicine, where computers seem likely to change everything.

My opinions - I also remember once during one my B-School projects that I had worked on for Microsoft where I had read about IBM using idle pc's during office hours when employees have lunch or take a break from their work by locking their workstations. This unique feature would help IBM solve global issues of solving complex health related projects by using the processor speed of idle computers to enable faster time for completing a said process or task. Several of IBM's machines as I type today are still solving complex issues from identifying remedies for cancer and AIDS to reaching to the remotest of people in the deserted areas of Africa.

We can contribute ourselves (virtually) to the global evolution by helping such organisations in eroding poverty and gaining victory over diseases for which we yet have to find solutions

Till next time lets look up in the sky and watch the clouds while the IT geeks manage us through the virtual cloud.

- Prasad

New TV Channel

-- From Dr. Manohar Pandit (Shared)

C Channel India inauguration was to start in a short while. At the stroke eight the EBC test card disappeared and a bright montage started appearing on the screen. The Alps, the US one hundred dollar bills, gold coins, façade of Swiss Banks and a crisp white Gandhi cap figured prominently in the montage. In the background was the exciting music that was fused with the sound of coins pouring out of slot machines. For a moment the screen went blank and then appeared the gold moulded logo of CC India. The imposing logo disappeared and what was seen on the screen was a posh office cabin with a huge executive table and the CC India Chairman sitting behind the same. He got up from his chair, waved and started walking towards the camera. He stood under a spotlight, paused for a moment and started his inaugural speech. He emphasised the need for his channel. He vouched that he is the pioneer to start such channel. He mentioned that there are large numbers of channels dedicated to different interests and activities. The Chairman continued, ‘switch on the TV and you have channels from news to nature, from fashion to food, from sports to spiritualties, from monks to money. You name it and you have a dedicated channel. But CC India is different, it’s the first of its kind in the world to have a dedicated C channel. It’s for the C that has become an integral part of daily life of every Indian. It’s this C without which no Indian can ‘see’ the desired. This C has not only survived the odds but also had a spectacular growth.

Yes, this C stands for corruption. Nowhere in the world has corruption had such magnificent growth as it has in India. Corruption has successfully blunted the conscious in all strata of our society. What was done in the past infrequently and for few rupees is now a routine and involves billions and billions of rupees. With globalisation the rupee has become convertible (partly officially and fully unofficially) and found a solace in form of USD in Swiss Banks. Corruption is no longer limited to taking bribes in Indian Rupees. Wine and Women are rampant but relatively insignificant in today’s corrupt society. These are still the stepping stones for the multibillion dollar scams that are here to stay. The vision of CC India is to make every citizen well-versed about corruption. We need to teach our citizens to effectively practice corruption. We will telecast interviews of prominent personalities who successful practised this art. In fact we plan to station OBVs in Tihar and similar jails for instant and better coverage. We also have in mind talent search programmes and reality shows for showcasing innovative ways of corruption. We will on grand scale organise the award presentation ceremony for corruption practices in different fields. We would call for nominations, though the process will not be immune to the corruption. CC India also plans to have a management school for the post-graduate diploma programmes in Corruption Management and Corrupt Practices. E-corruption will be offered as super specialisation. We have a long list of eminent faculty for this. We feel those who graduate with this diploma will have an edge over others in government jobs. The details for this programme will be available soon.

Broadly we will have dedicated programmes like talk shows, quiz etc on corporate corruption, political corruption, household corruption. Corruptions in service sector will have priority and will include banks, insurance, hospitals, sports, schools etc. Our focus will be on younger generation. We have already bribed the school authorities to show our programmes to them as these are our building blocks and will take India to newer and unsurpassable heights in corruption. May the demons bless us for success. Long live corruption” The Chairman concluded.
Fortunately there was a power failure and TV went blank. Perhaps CC India missed out on bribing the power distribution company.

Disclaimer: This is a fiction and there is no resemblance with any living or dead person or with any institution. If any then it is just a matter of coincidence.

This blog aims at creating awareness to curb corruption. The blog is a part of a fiction written by the author. Those who desire to read full story may electronically request the author.

India’s Entrepreneurial Deficit

One of the drivers of India's growth going forward is how well the professional class adapts to emerging opportunities in the new India. Historically, Indians have been reasonably riskaverse, preferring salaried jobs rather than take the plunge into doing something on their own. These days, the IIM graduate taking the entrepreneurial road is still the exception than the rule — which is why these cases make headlines in newspapers rather than being the norm.

The reasons why so few of our qualified people take the plunge are manifold. First, there is the issue of financial safety. Most of us who come from middle class backgrounds simply do not have sufficient funds to take risk, particularly when there is no financial back up. Family commitments can also intervene and diminish risk-taking capability — children's education, parents' medical, retirement worries, etc. Surprisingly, education can often become a handicap. You have more to lose when you can get a job in a good investment bank or consulting firm or a leading corporate. And, therefore, the safer path often seems more attractive.

Second, many communities and societies do not have a risktaking culture; it's simply not built into their cultural DNA. Plus there is no family or community knowledge or network of how to go about starting a new business or the issues involved in doing so. Equally, there are other communities where risk-taking and starting new businesses are in fact the norm and the expected thing to do. But these communities are fewer than we need.

India's culture of promoters is also unique. Banks require personal guarantees, private equity investors need there to be a strong promoter/manager and investors need a prominent face. All this militates against a professional set-up and reinforces the need to put yourself as the entrepreneur even more on the line. A number of people could be, and are, uncomfortable taking on this added burden. Much better to simply carry on doing your secure job.

This is a shame. To broadbase our growth, India needs an army of entrepreneurs. New businesses create new jobs and increase the value added in the economy. Profitable businesses contribute to enhanced tax collections and make the economy more efficient and streamlined while creating new and unique opportunities for growth. Over time, some of these firms could globalise and become world leaders in their respective areas. Indians have the talent, expertise and increasingly the experience to start new businesses in knowledge-based areas so that we have the opportunity to become the innovation centre of the world, gradually taking on the mantle from the US. As more ideas spread and businesses start to capitalise on opportunities here, capital will surely come in to support such endeavours. All of this will create a virtuous cycle of new investment, new jobs, more trained people and higher GDP growth. This private enterprise will also find its way more and more into rural areas and we are already seeing that with the many “bottom of the pyramid” strategies.

Hence we must foster and encourage such entrepreneurial activity. However, how to do it? Clearly, we need more risk capital at play. But more than anything else, we need more entrepreneurs. Business schools should encourage courses on entrepreneurialism and foster a higher degree of risk-taking. IIMs and other B-schools should create communities of alumni where active mentoring can happen during the coursework and internships should be organised in start-up companies so that students get a firsthand feel of such environments. Similarly, mid-career entrepreneurs should also be encouraged as they could have specific domain knowledge or understanding of their business which can help them differentiate their ventures. Capital providers are also more likely to back such individuals.

Successful entrepreneurs should get the basics right. From day one, they should have a “best in class mindset”. It is impossible to create a world-class service or product without a world class organisation. Or at the very least, with a highly effective organisation. Hence a lot of thought should go into the team and the organisation build.

As far as financing is concerned, it clearly should be linked to the business's growth plans. However, it must be methodical and planned from the beginning. All too often, the capital structure strategy and financial planning is an afterthought. Second, the business should be staffed with a good CFO who can help put in place good controls right from day one, and help plan for downside eventualities. Entrepreneurs are apt to get carried away by their own sales pitch. There should always be a Plan B in case things do not turn out as expected.

From a people standpoint, it is always a challenge to migrate from a start-up, to hiring and managing other professionals as business grows. Often the entrepreneur's own competency could be an issue and recognising this can be a difficult task. Good people systems should be created early in the game as retaining good people will always be a challenge in India in the foreseeable future. Stock options can be handy here.

From a governance standpoint, it helps in the long run to get excellent directors — those who are independent, involved, and unafraid to give point of view. Over time, they can help tremendously in adding value to a business. Also ensuring the best compliance and reporting systems helps in valuation.

To sum up, there is no doubt that India needs the practice of starting new businesses to grow and become broader. Our educated and trained young people need to be encouraged to hew their own paths and thus help create a more jobs for a growing India and broaden the development paradigm.

Introducing traceability in financial transactions will strike a blow against black money

On my views of having a transparent banking system and its future growth in India, I quite liked the views of the author of the below article (Ashok Jhunjhunwala, a teacher teaching electrical engineering at IIT Madras and a member of the PM’s Scientific Advisory Committee) share his views on the same. Some of his views are quite realistic but I'm afraid that the challenges and mechanisms proposed could be easily dented if adequate secure monitoring isn't carried on.
None the less something new for a better tomorrow...
--
Dictators in Tunisia and Egypt have fallen. Internet technologies played their small part in this. India is not like Tunisia and Egypt. Its economy has belied expectations and grows at 8 to 9% year after year. As large sections do not benefit adequately from this growth, there has been considerable focus on government programmes to make it inclusive. At the same time, our press has demonstrated its independence. The RTI Act enables citizens to demand and get information. Our CAG stands tall, just as our Election Commission and courts do. Yet India is in a crisis. Its citizens are tired of governance deficit, corruption, black money and an inspector-raj.

Everyday we see scams (sometimes even when they are not there) being exposed in the media, demonstrations, Parliament jams and court orders. But there is little positive action. What is needed is action against black money, the driver of all corruption. Are we citizens ready to move beyond protests and take a small step that could hit at the heart of black money?

Black money thrives in the cash economy. If we introduce traceability in financial transactions, it will be difficult to hide. We can do this using some simple available technologies. It is possible to carry out all transactions in electronic form, where money is transferred from the payer’s bank account to the payee’s. The back-end core banking system of almost all banks allows that. ATM withdrawals, any-branch banking and Internet banking thrive on it. The Internet, however, is used by a small section. Credit card (and debit card) based payments and transaction could be another way, but have not caught on much (except for use of debit cards for cash withdrawals).

But India has over 750 million mobile phone connections, and growing at 15 million per month. Over 500 million individuals are believed to have mobiles. In a few years, mobile telephony could touch most of India’s adult population. It is now possible to link one’s mobile phone to a bank account. So, it is possible to carry out most transactions including money transfer, bill payments, balance enquiry and checks on past transactions. A bank’s computer uses the caller line identification (CLI) and a customer’s PIN to authenticate her, following which any transaction can be carried out using an application loaded on her phone. End-to-end encryption makes transactions secure. Transactions are instantaneous: for example, any payment is notified by sending an SMS to the payer as well as payee.

The Mobile Payment Forum of India, RBI and National Payment Corporation of India worked with banks, telecom operators and technology providers to make money transfer possible between customers of any two banks, any two operators and any two technology providers. One does not even need the bank account number to make payments, as the payee’s mobile number and a mobile money ID (MMID) uniquely map to her bank account.

Mobile payments would make cash redundant. One could pay a vegetable vendor who displays a mobile number and MMID at the shop. Similarly, auto fare or kirana shop payments can be made instantaneously. Money can be transferred whether the recipient is near or far. Doing so from Mumbai to an Orissa village would now be a simple matter. A single day amount could be small, say Rs 50, or as much as Rs 50,000.
Safe, secure, simple, instantaneous, and with a complete list of payments and receipts in one’s passbook, there is no reason why anyone would not use this method. Using mobile payments instead of cash could be our way to bring in traceability and say no to the black money economy.

Do all banks provide mobileto-mobile payments? About 10 banks do and another 15 will by the end of next month. Will there be teething troubles? Sure, but nothing that can’t be handled. Will transaction charges be too much? Banks and telecom operators can make transactions below Rs 1,000 free and charge one or two rupees for transactions up to Rs 10,000. Will SMS come in real time? Telcos can ensure that.

One may argue that many in rural India and some in urban India do not have bank accounts. With financial inclusion initiatives, no-frill accounts can be opened quickly. In fact, mobile payments would incentivise people to open such accounts. Further, telecom operators are tying up with banks to come up with phone-based pre-paid cards (mobile wallets) for making payments and transferring money as in mobile banking. Will illiteracy be a bottleneck? Several banks and technology providers use mobile voice banking: one just has to speak to carry out a transaction. So, there may be some hiccups, but there are technological answers.

Many of us will remember that computerisation of railway reservations in the 1980s dealt a blow to rampant corruption. As an example of technology being used to bring in transparency, mobile payments give us a much bigger opportunity. In due course, we would demand that government recalls 500 and 1,000 rupee notes and makes it mandatory for all shops and vendors to accept only electronic payments. But let us take the initiative. Let us get our MMID and start making mobile payments instead of using cash. Let shops start displaying their mobile numbers and MMID. That would be a big statement against black money.

- Prasad

Money Losing Value Drop by Drop

A major outcome of relentless food inflation is the declining share of each individual item in our grocery basket. The decline may be in dribs and drabbles. But added across 800 million households, the number is now large enough to start affecting business.

Cooking oil is a good example. Last January, a kg was available for 48. This year, it’s worth 60. City people who buy branded packs have no choice. But what does a village family do? It is used to buying ten bucks worth loose oil daily. Last year, that fetched a full 200-ml bottle. Now that bottle is a quarter empty. Does the family increase its cooking oil budget? It can’t afford to. Not when atta, vegetables, sugar, rice and salt are all simultaneously more expensive. The family merely uses each teaspoon more carefully. Very soon it will buy even fewer teaspoons. A good crop of soyabean, groundnut and cotton seed last summer led to ample local oil supply. What we are eating today for 60 is this home-grown produce. This is also the cheapest oil will ever be this year. A good mustard seed harvest is on its way in March. That should extend local supply by another month. By May, it will run out.

Thereafter India is back to depending on imported palm oil and soya oil. Both are at least 20 more expensive than desi oil. Local prices have to match that to make import worthwhile for traders. You can expect oil to touch 80 by June. That village family’s bottle would then be almost half empty. This is the true meaning of inflation. Its ten bucks are worth less and less. India’s loose oil market is four times the packaged oil market. When millions of families with similar purchasing habits face the same budget constraint, the impact is immediate. Demand is slowing. Last week, wholesale prices fell by 100 per quintal for two straight days for want of buyers. Even though Holi and the marriage season are only one month away.

Is business worried? You bet. Industry likes oil to be at 40. That is when business booms. Rising prices make the oil in corporate tanks more precious but harder to hawk. After growing 10% annually for several years, India’s cooking oil market is decelerating. It grew 7% last year due to high prices. This year, industry would be lucky to see 4% growth. In case global prices start spiraling due to bad weather in producers Malaysia, Indonesia and Latin America, accelerated Chinese consumption, or the wider inflow of hot money into commodities, Indian household demand could weaken further.

The upshot of demand uncertainty is a corporate crisis of confidence. Refineries for imported crude palm oil at Mundra and Kandla owned by giant Indian and multinational companies are currently shut or running spasmodically because tanks are full. Betting on a bull run, many imported a lot of crude palm oil in October-November. Since local oil was cheaper, they lost money. Several fingers were burnt.

Logically, their business should improve in summer once local oil finishes and imported palm oil is the only supply. But how much should one import when there are few takers even at 60? If everyone contracts, oversupply could lead to price undercutting and loss. If few do, spiraling prices would scare away more consumers. Besides, it might push the government into imposing stock control limits. When net profit margins are 2%, credit limits are tight, breakeven a fantasy and crude palm oil is worth $1300 a tonne, the risk becomes exceptional.

Brands are more insulated from demand volatility, being urban and middle class. But they are a fraction of the total. In a $16-billion edible oil market, they are worth only $4 billion. Already margins are squeezed by rising costs, advertising expenditure and competition. Sales promotions will further reduce profit. There have been seasons when we tolerated branded sunflower oil for 100. Today, with everything more expensive, it pinches. We will switch to something cheaper.

Cooking oil shows the grim aftermath of general price rise. Free trade has brought ample oil and fair prices. Inflation has driven away buyers. Instead of supplyside constraints, it faces a demand slowdown. Instead of moving up the value chain to brands, India will regress to more loose oil.

For stretched Indian families, it is the only way left to still buy some...

Living the dream...

Got this interesting article in today TOI, interesting observations:

At last, a dream job offer! "You have a job offer! Would you like to be a police officer? Please click on the link below," said an email from an old friend. A dream job, what with all that i could collect including the royal salutes i would get, i thought. But who would offer someone on the wrong side of 50 a job in the police force, i wondered? Had my old friend married the police chief's daughter, i tried to recollect – and in any case, why would my friend who had not bothered to keep in touch all these years except for a friend request on a social networking site, want to pass on this opportunity to me?

Never mind, i told myself – if he had such a lucrative offer for me, it was for me to grab it and enjoy the good times that come along with it, not to question it to extinction. I would begin my day with the kanda-poha at the 'zunka bhakar' stall, which incidentally did not sell any zunka-bhakar. I could now amble into the closest sabzi mandi and the vendors squatting there would hand over a bunch of the green veggies – all for free! All the farm produce would be my privilege, although out of reach for the common man on the street – real farm produce, mind you, the stuff which we sit down to at lunch and relish, not the colourful, exotic ones on Farmville. Then i would be entitled to my pav-bhaji at the street corner vendor who had put up his stall in the middle of the road flouting all urban rules. Several 'chai-paani's awaited me!

Being a cop, i would no more be the aam admi reeling under the burden of the spiralling food price index that stoked the inflation fire in our country. I
would be khaas – not aam! No more meaningless ranting about rising prices on my blog – just do the daily beats around town and find your choicest picks for your family's living needs. I was elated. I had always regretted not having chosen the enviable IRS or IAS career options at the appropriate juncture in my career. It could've been a great life if i had, what with plum postings and lucrative inflows guaranteed to come my way, which was assured once i was deeply ensconced in the bureaucratic race.

I even convinced myself about how i was cut out for the job – being suspicious in nature, i was not the kind to fall into the trap of the several forms of windfalls – of millions of dollars and pounds to be claimed – by way of inheritance, lotteries or for simply being the claimant of my email account, which i was often informed to be a lucky one. Never the easy pawn for such clever trappings, one had always avoided responding to such spurious offers.

One had also been wiser by the steady advice from friends which warned me about the perils of clicking on files with bizarre sounding titles like 'Black President in the White House' or any other enticing titles. But this was a lucrative job offer!
So what was i waiting for when life's greatest opportunity was a knock, er, a click away? Click! A new window opened up to Citiville, another game on the social networking site, Facebook, on the lines of Farmville and Fishville. "Allow access?" it asked me, when, thankfully, realisation dawned upon me – that i would have to make do with the onions without stench and live on that Farmville produce, and bid goodbye to the moolis and the moolah i was dreaming about!

Water Matters

Water Matters!
The water sector in India has long been neglected and ignored but lately has been given great importance. And why not? Many states in India today have abundant supply of water, but how well is this resource used? If you come to think of it, the management of water today in the country has not lived up to its expectations.

For example, in states like Maharashtra, Andhra Pradesh, Tamil Nadu, Karnataka water is one resource over which fights have risen and have gone to such extent that river directions have now to be re-routed to specific states to satisfy water requirements. Although, this has been well debated even at several instances, how well is this water utilized? Of the total water available in the country, much of it has been used primarily for drinking, irrigation, household and industrial purposes. Drinking water today has been contaminated to such extent that MNC’s today s are so proud of selling products that speak about safe water for all. The health ministry launches several campaigns for people talking about drinking clean water and utilizing water efficiently, but is the ministry today taking attempts to ensure how well these campaigns are monitored.

The solution to all these problems lies with the efficient use of water and its proper management. Before each one starts taking potshots at each other, we have to look deep within our own households and organizations about what effective measures do we take to use water wisely. Recent statistics indicate that there is huge gap between the water supply and its water treatment. The result: Contaminated water getting discharged into the sea and risking the life of aqua marine creatures in addition to damaging flora and fauna. For us to improve our society we need to co-operate with the health authorities by ensuring the efficient use of water using various methods like rainwater harvesting, groundwater management and not simply keeping taps running waiting for monsoons and municipal water cuts. Industrial units and hospitals need to comply with strict measures of ensuring safe disposal of waste. Residential buildings should lead effective programs for their societies thus treating waste water in their premises reducing the burden of its treatment on municipal corporations. Several projects in the country have now been awarded contracts under JNNURM (Jawaharlal Nehru National Urban Renewal Mission) to undertake safe disposal of waste water such that it doesn’t interfere with drinking water pipelines and keeps the society clean and safe. The World Bank has also awarded several millions of dollars for such projects and looks at India ahead than a developing country.

It’s time that we use water safely and allow organizations to participate in helping the society be one place where water reaches even those corners of the country at the most lowest prices. Just as we spend money on drinking clean water it’s also our priority to spend some part on its treatment

Let’s all strive to make a joint effort today for a better tomorrow…
(Written for the Deccan Chrnoicle, Hyderabad, India)

The Bright side of Indian Economics

Change Is Our Only Hope In The Next Decade

IN THE SEASON OF SCAMS AND PARLIAMENTARY paralysis, it is easy to take a glum view of the future. Ratan Tata proclaims India a banana republic; institutions of the state lack integrity; a community is on warpath demanding lower social status; a region wants to separate from a state; workers of the world unite only in killing one another in eastern India; insurgency and counter-insurgency shed innocent blood; and even vegetables make you cry.

Yet, there is much to be hopeful about, if only you lift your head out of the continuous present in which contemporary culture dunks you and keeps you submerged. This Limping out of the Asian crisis at the turn of the century, few would have thought that India would accomplish what it has over the last 10 years. If we could achieve so much these last 10 years, why should the next 10 be bereft of hope?

Change must come to a number of different areas. The potential exists, resources are aplenty, only the will to act is missing. Political funding must become transparent and accountable. Every rupee that a party or its functionary spends must be traceable to its source. The current non-institutional form of mobilising resources for politics is the root of corruption. Politicians make money for themselves and for their parties through loot of the exchequer, sale of patronage and extortion, all with the collusion of civil servants. Other democracies fund their politics, but without such comprehensive depravity. This can and must change.

The legal system cannot continue to be dysfunctional. What prevents us from appointing 100,000 new judges over the next 10 years, to clear up the backlog of cases that creates a perversion of justice called undertrial prisoners, and shrink the life expectancy at birth of any piece of legislation to 18 months till disposal of the final appeal? Our police forces are sadly undermanned, poorly trained and politicised. Overhaul them, we must.

India faces a desperate shortage of talent. We need a revamped, expanded education system, a parallel stream of clearly defined, certifiable skill modules that offer young people the possibility of continuous skill upgradation all the way to a professional degree. We need a political culture that stops patronising power theft, and instead, encourages payment of realistic user charges to transform all infrastructure deficit into a huge growth opportunity. And we need to shed our current fear of technology, to realise its full potential whether in inclusive banking or education or tele-medicine. Regulatory wisdom in India comes twinned with geriatric suspicion of technology, scuppering a universe of possibilities.

If there is one thing that we need to carry over from the decade that is coming to a close, besides the philosophy of inclusive growth, it is the slogan, Yes, we can!

Till next time, wish you the very best in the year ahead 2011.

- Prasad

Small economies, big headaches

Another financial storm, another bailout. In May, it was Greece. Now, it’s Ireland, an economy that accounts for just.0.3% of world GDP. Over the past few weeks, Ireland has been the central figure in an unfolding tragi-comedy . The EU was pressing Ireland to accept a rescue package. Ireland insisted it didn’t need one. It has finally settled for a bailout estimated to cost €80-90 billion.

The drama has not impressed the financial markets. There have been huge sell-offs in several markets, including India. You have to wonder how a country , which registers as a place where men sport skirts, can give the jitters to the world economy.

Ireland is being mentioned in the same breath as Greece. But the two situations are different. In Greece, the EU bailout was necessitated by the refusal of private investors to provide funds to the Greek government. Ireland contended that its government finances were fully funded until the middle of 2011. And yet the EU has pushed funds down Ireland’s throat. Why?

The immediate problem in Ireland is with banks, not with government finances . In 2008, at the height of the subprime crisis, the government assumed full or partial ownership of three large banks and guaranteed the liabilities of the entire banking sector until the end of 2010. The guarantee was recently extended up to June 2011.

But these measures have not stabilised the Irish banking system. Bank losses from real estate have mounted. Corporate deposits have been fleeing Irish banks. Ireland’s banks are on ventilator support — they now survive on liquidity provided by the European Central Bank.

The markets rightly believe this can’t go on. Today’s banking problem will become tomorrow’s sovereign debt problem . The banks will require massive infusion of funds. The funds will have to come from the government. With public debt at 100% of GDP, the government will find it difficult to borrow. Yields on Irish government bonds have gone up by over 200-basis points in recent weeks. That raised the spectre of a default on Irish government guarantees of bank debt.
Should this happen, two consequences will follow that could prove lethal to the world economy. One, there will be a run on banks in other troubled economies such as Portugal and Spain. Two, banks in UK, France and Germany will incur huge losses on the substantial exposures they have to banks in Ireland.

As with Greece earlier, saving Ireland is all about saving banks elsewhere in the EU. A more accurate analogy would be with the Iceland crisis in 2008. In Iceland too, banks went bust leaving other EU banks heavily exposed. The operative word is ‘contagion’

Any more bailouts anyone ?

Emerging economies as saviours ?

OVER the past two years, industrial countries have experienced bouts of severe financial instability. Currently, they are wrestling with widening sovereign-debt problems and high unemployment. Yet emerging economies (EEs), once considered more vulnerable, have been remarkably resilient. With growth returning to pre-2008 breakout levels, the performance of China, India, and Brazil is an important engine of expansion for today's global economy.

High growth and financial stability in EEs are helping to facilitate the massive adjustment facing industrial countries. But that growth has significant longer-term implications. If the current pattern is sustained, the global economy will be permanently transformed. Specifically, not much more than a decade is needed for the share of global GDP generated by developing economies to pass the 50% mark when measured in market prices.

So it is important to know whether this breakout growth phase is sustainable. The answer comes in two parts. One depends on EEs' ability to manage their own success; the other relates to the extent to which the global economy can accommodate this success. The answer to the first question is reassuring; the answer to the second is not. While still able to exploit the scope for catch-up growth, EEs must undertake continuous, rapid, and at times difficult structural change, along with a parallel process of reform and institution building. With government policy remaining on course, we should expect a gradual strengthening of endogenous domestic growth drivers in EEs, anchored by an expanding middle class. Combined with higher trade among them, their future is one of reduced dependence on industrial-country demand, though not a complete decoupling.

Distribution as well as growth matter. EEs still need to manage better their growing domestic tensions, which reflect rising income inequality and uneven access to basic services. A failure on this front would derail their strengthening domestic and regional growth dynamics. This's better understood today, with distributional aspects of growth strategy being firmly placed on EEs' policy agendas.

While EEs can deal with the slowdown in industrial countries, the financial-sector transmission mechanism is more challenging. Today's low interest-rate environment is causing a flood of financial flows to EEs, raising the risk of inflation and asset bubbles. The hiccups in western banks have served to disrupt the availability of trade credits, and, if amplified, could destabilise local banks.

These risks are real. Fortunately, several EEs continue to have cushions and shock absorbers. Having entered the 2008-09 crisis with sound initial conditions, they are nowhere near exhausting their fiscal and financial flexibility — and hence their capacity to respond to future shocks. Overall, EEs are well placed to continue to navigate successfully a world rendered unstable by crises in industrial countries. Yet, again, the decoupling is not complete. A favourable outcome requires industrial countries' ability and willingness to accommodate the growing prominence of EEs. The risks here are significant.

The flow of knowledge, finance, and technology that underpins sustained high growth rates in EEs is closely linked to an open, rule-based, and globalised economy. Yet this global construct comes under pressure in an environment in which advanced countries have stubbornly high unemployment and bouts of financial volatility. Hence, such continued openness cannot be taken for granted. Political and policy narratives are becoming more domestic and narrow, while the global agenda and the pursuit of collective common interests are having greater difficulty being heard. These challenges will grow.

Managing an increasingly complex set of transnational connections is an even bigger challenge in a multi-speed world that is being turned upside down. Such a world needs better global governance, as well as overdue institutional reforms that give EEs proper voice in global institutions. In the absence of such changes, the global economy may bounce from one crisis to another without a firm hand on the rudder to establish an overall sense of direction. The result is what economists call Nash equilibria, or a series of suboptimal and only quasi-cooperative outcomes. Where does all this leave us? EEs will be called on to play an even larger role in a multi-speed global economy characterised by protracted rehabilitation of over-extended balance sheets in industrial countries. Left to their own devices, they are up to the task. But they do not operate in a vacuum. EEs' ability to provide the growth lubrication that facilitates adjustment in industrial countries is also a function of the latter countries' willingness to accommodate tectonic shifts in the operation and governance of the global economy.

Let us hope that these global issues receive the attention they require.

A Pill For Bad Memories - Pop it, forget it

Its been a long time no action from my side...well work has kept its toll on me lately...but yes that doesn't mean I stop my thoughts to flow on the web. This thought is a killer which wont kill you but yes will surely get you outta of the mess.

Our mutual interaction tends, given that we are a species as complex and complicated as nothing else, to produce both feelings of euphoria and acute depression. The latter, however, may have a cure at hand: an antidote for bad memories. An international team of scientists, led by the University of Puerto Rico, has reportedly discovered a drug that can lessen the painful impact of bad memories. The protein called Brain-Derived Neurotrophic Factor (BDNF) works by ‘flooding the mind with feelings of security and safety'. A dose of the substance is supposed to reduce fear and anxiety making us all happy and contented human beings, dispensing with the services of spiritual gurus.

There are other benefits. The heartbroken, by way of amorous matters or otherwise, could find prompt relief. Then, it could help us, in India, get over several issues. The Partition, for example. All we need to do is get an Indian pharma company to make a generic version of the substance and produce it on a massive scale. The resultant pill or syrup could then be supplied, through all available private and public sector means, to the whole population. And, of course, we supply it in requisite doses to neighbouring countries.

Once it is consumed, we will be so full of the milk of human kindness, all mutual hostility so utterly forgotten, that we will be trampling over each other to shower kisses and hugs on our previously-hated ones. The fringe benefit will be that the fundos on either side, both the well-bearded and the saffron sort, will, in the Marxian sense of things, wither away and die. That, as some of us might aver, is a consummation devoutly to be wished for. Irritating sceptics, however, might try to point out that this whole culture of having a pill for everything is somewhat odd, or perhaps even undesirable.

They could be force-fed the pill on a priority basis. And then we can take another pill so that all of us can forget anything nasty happened.

Hahaha....

Till next time...let me pop the pill and tell you its feedback !

Finding true love

THE notion that finding a perfect match is a science, has been known to Indians for millennia.

Complex calculations of the relative positions of stars in the candidates’ horoscopes, even more convoluted research into their familial prospects and assets, besides of course, close scrutiny to assess personal attributes, have always been de rigeuer pre-nuptial activity. The cumulative information and practical wisdom that reposes in the heads of people traditionally charged with finding alliances in India, have proved to be convenient and speedy shortcuts for marriageable offspring and anxious parents alike, with classified matrimonial advertising adding a 20th century dimension. Now, after years of seeking true love via pop quizzes in lifestyle magazines, the west has finally caught on that the perfect mate can be obtained less by mastering the art of love than by analysing empirical evidence. It stands to reason. If Netflix can recommend appropriate movies for customers based on an algorithm that analyses previous choices, why can’t singletons find their possible mates using scientific markers? Online, that too.

While the idea of romantic chemistry via novel formulae devised by websites offering ‘focussed’ choices seems more dependable than singles bars, they do not come cheap. One service, for instance, that has based its USP on the ‘fact’ that women are attracted to the smell of men who have immune systems very different from their own, charges nearly $2,000 to bolster their subscribers’ chances, by taking deep background checks to a new level: not only credit and criminal records but also DNA profiles! Some sites delve into matching characteristics and traits, others compare and match family, social and educational backgrounds, interests and aspirations. The underlying principle is obvious — finding a mate has to be more exacting than finding a date.

Could this be the next lucrative outsourcing idea?

Why can’t we buy basmati for Rs 40/kg?

RICE COMPANIES are toasting a reported decision by the government last week to let basmati be exported at a reduced price tag of $800/tonne or close to Rs 40/kg. But if foreign consumers can be supplied this luxury food so cheap, how come you and I are paying through our noses for it? I'd help you join the dots. Logically, if basmati can be exported to Europe, Saudi Arabia, USA and Iran at just Rs 40/kg, we should be able to buy it for even less in local wholesale markets, right? Wrong. Because this price does not exist. Cheap basmati is an oxymoron. The cheapest basmati variety currently is Pusa and no rice mill in Haryana and Punjab is selling it for less than Rs 60/kg or $1100/t. Add retail margins and you have an MRP of at least Rs 75/kg, which is what we pay mostly. The top-end basmati variety Pusa 1121 is priced Rs 75/kg at factory gate or $1500/t, which makes it the world’s most expensive rice. Moreover, if Indian consumers are willing to pay two times more for what basmati fetches abroad, surely it would make more sense for our canny brands to concentrate on the more profitable domestic market instead of exports. But they are not. In short, India’s new rock bottom basmati export price is the stuff of consumer fantasies. There is no sign of it in the marketplace.

So why did the government agree to drop basmati’s threshold price in the world market for boosting business at a time when the country is short of 15 million tonnes rice? The answer to that lies in the magic word Pakistan. The rice industry has figured that “threat from Pakistan” is the easiest phrase to motivate or explain away any government decision. And it worked like a charm once again.

Basmati exporters say it is necessary to bring down the MEP to help them wrest back the global market share they lost to Pakistan. Exporters also argue that while some varieties such as Pusa 1121 are incredibly expensive, others such as Pusa Basmati can’t cross the $1100-barrier. But they omitted to mention three vital facts. One, though they claim to have lost market share, India’s basmati export has actually spurted sharply in the last six months. Two, Pakistan has always priced itself at a 20% discount to Indian basmati. So if the average price in Karachi is $900/t, India at $1100/t is par for the course. Three, there is no basmati available in India for $800/t. Meanwhile, the decision is certainly troubling for us taxpayers and consumers. For more than a decade now, we have been funding research, export subsidies and legal costs of protecting basmati in the world market all in the name of safeguarding a premium and heritage product. But now it seems the product has lost its premium positioning. At Rs 40, many other non-basmati varieties cut the grade too. So it’s time taxpayers question government spend on basmati. Availability of rice is an even bigger reason for worry in this drought year. Rice companies have often argued that exporting one tonne of basmati earns enough dollars to import 2.5 tonnes ordinary rice. Not any more. If the Rs 40 price is correct, then exporting one tonne basmati allows India to import less than a tonne long grain rice today. If India turns net rice importer, we won’t be able to make good the shortfall.

Consumers have a right to be upset with any export promotion scheme that allows food to leave the country at prices which are not available to them. At a time when parmal rice is retailing for Rs 40/kg in most metro cities, if the government is convinced basmati is also available at the same price, it has been horribly misled. Either that. Or basmati brands are charging us extortionate prices.

Foolish chaps....

Will post more interesting observations as and when I find some.

Cheers !

Prasad

An interesting Ad

The Budget and People Like Us

Ever since I started earning for myself, I have followed, at least attempted to follow, Budget proposals closely. And the one constant has been this: whatever the announcements, by whoever, it invariably never ever makes any positive difference to my own budget. I don’t gain a penny, but lose many.

Amazingly, whether it is Manmohan Singh, Yashwant Sinha, P Chidambaram or Pranab Mukherjee, after no Budget have I, or some People Like Us (PLU) that I know, rubbed two hands in glee and said, ``Wow, this year’s gonna rock for us.’’

Somehow, in the end, we end up spending a bit more than the last year. If LCDs become cheaper, the cable guy jacks up his rates. If tea becomes cheaper, milk gets dearer. If cars cost less, petrol costs more. If I save Rs 3,000 at the end of 365 days because the income tax exemption limit has been raised, I spend Rs 6,000 more because transportation charges have gone up and my subzi walla says he’ll have to take a little extra for that tomato, potato, bhindi and lauki.

For the bulk of PLU, especially those employed by others, which is almost all of us, the bottom lines, more or less, remain what they are and life goes on in exactly the same manner after the Budget as it did before it. If anything, you should be happy when the Budget guarantees status quo. Because, come to think of it, the Budget seldom has anything for the PLU.

So you peer close to the TV as the finance minister makes his grand speech, quoting from everybody under the sun – from Gandhi to Mandela, Kabir to Nanak, saint to scoundrel – to make the boring exercise sound interesting. And you look busy as hell as you turn away the kaam wali bai when she asks if the Budget will make any difference to her life. You don’t take the unimportant calls, and the important ones you try to cut it suitably short, making sure the sound on your TV is loud enough to reach the guy on the other side of your phone. You skip your breakfast and delay your lunch. And you discuss with everybody the various things that were announced by the FM but are actually of no use to you – like branded jewellery being fully exempt from excise duty.

But when you get out of your office at the end of the day – with most of your proposals on hold because your boss, too, was busy with the Budget – and hit the hard road home, you realize nothing has changed for the better. The edgy cab driver suddenly charges you more because fuel prices have gone up, the pirated CD you pick up is rented out at Rs 5 plus and the gardener you pass by makes a quick request for a wage hike because he’s just heard Budget se bhao badh gaya hai.

And so, what did I gain from Pranab da’s budget? Zilch. As usual. But then that’s always the story with the Budget and People Like Us. Why do I keep forgetting!

-Prasad

Watch out Wall St villains, here comes Obama!

A NEW administration is taking shape in the US. One of its first tasks will be to find ways of tackling the economic slowdown and ensuring the long-term survival of its financial system. Some of the steps taken so far by the current administration, represented by treasury secretary Henry Paulson, have come in for criticism for providing a lifeline to unrepentant and spendthrift financial institutions. So, what will the new administration do that’s going to be drastically different?

For one, do not expect anything radical too soon. The US system works in curious ways, but cuts across party lines when it comes to confronting national crises. Therefore, the Obama government is sure to continue with the work of implementing and monitoring Paulson’s $700-billion TARP package. But—and this is the best part—do not for a moment think that the Dick Fulds of this world have been forgotten or pardoned. Once the new administration feels the time for crisis management is over, it will go after all the people it thinks are responsible for the current meltdown—the guys who sold the mortgages to families that clearly did not have the capacity to repay, banks which then created virtual pyramids out of these simple loans, rating agencies that put their seal of approval on these instruments, bank CEOs who lulled shareholders into a false sense of comfort by repeatedly lying to them about their company’s failing health and impending demise. The compelling imagery of once-powerful CEOs in handcuffs (a la Enron, Boesky, et al) is all too potent and depicts in a single, two-dimensional frame the robustness of the American judicial system.

This kind of action will not only be expected but demanded from the Obama administration. There will be tremendous political pressure to go after the Wall Street villains because of two over-riding reasons. One, the popular vote seems to have communicated resoundingly that it does not view the Republican Party’s close links with the financial buccaneers too kindly. And, two, it does not like being weighed down by the uncomfortable burden of having to bail out their derring-do. Plus, and this is important, there is this uncomfortable vision of many CEOs landing safely with multi-million-dollar bonus parachutes while middle America hunkers down for an extended period of unemployment and lost wages.

Here is the most unsettling image: Lehman CEO Richard Fuld picked up a $22-million bonus in March 2008 even as the firm was struggling to stay afloat and would eventually go bankrupt six months later. There are some other CEOs who could be in the firing line too. Merrill Lynch CEO John Thain, who merged his bank with Bank of America, received a $15-million cash bonus on joining the bank in November 2007. Goldman Sachs showed $20.2 billion as payroll costs in 2007! Goldman Sachs chief Lloyd Blanfein earned about $68 million bonus in 2007, of which about $27 million was hard cash. Some CEOs read the writing early enough to forsake their bonus - Bear Stearns CEO James Cayne gave up his months before the firm was absorbed by JP Morgan Chase and Deutsche Bank CEO Josef Ackermann has also publicly declared that all top executives of the bank were surrendering their bonuses.

This could also lead the new administration down another possible, and interesting, path. There is already growing demand that the government re-examine the salaries of its regulators, who are supposed to keep a hawk-eye on the multi-million-dollar baggers. Part of the reason behind this call is that these lower salaries keeps the talent away from the regulators — guys who will be able to recognise a scam or a notice a danger signal before it becomes manifest to everybody else. Or, somebody who can understand the arcane and complicated instruments conjured up by highly-paid quants in banks and hedge funds. There is the also the question of motivation. A columnist recently wrote about how junior level officers from the US central bank (Federal Reserve Bank) and the markets watchdog (Securities and Exchanges Commission) would be completely overwhelmed by the complexity of the instruments they routinely had to vet and approve.

Some of the inequities come through when you juxtapose Fuld’s bonus with the salary earned by, say, Fed boss Ben Bernanke. According to a copy filed by news agency Reuters in October: “Ben Bernanke may be one of the most influential people on the planet right now as he heads the US Federal Reserve’s efforts to contain the crisis. But his $191,300 a year looks like loose change when compared with the near $500 million earned by Richard Fuld in his eight years in charge at Lehman.” The other powerful central bank in the world - European Central Bank - does not pay its top man Jean-Claude Trichet more than 350,000 euros (close to $440,965). And, at that, his salary is not necessarily the highest among all the European central banks. For instance, the Italian and Belgian central bankers earn more than Trichet. Even Bank of England’s Mervyn King probably earns just marginally more than Trichet.

One can only hope that some ripple waves from that action also wash up on Indian shores.

Path to nowhere leads to success...

I was a gung-ho liberaliser when economic reforms began in 1991. At the time, a sceptical politician asked me which sectors would benefit most. I replied it was not possible to predict the winners. In that case, he sneered, why embark on a path with no destination.

The answer is clear today, now that India has averaged almost 9% economic growth for several years. This success required a path which, by design, had no destination. The reforms tore down the planned road and opened entry into a million possible roads, facilitating ideas that no planner had dreamed of.

Before 1991, no planner visualised a future economy excelling in computer software, business process outsourcing (BPO), R&D, or brain-intensive manufacturing. But deregulation plus global connectivity created a million new possibilities, and innovative risk-takers did the rest.

India is globally famous for computer software. Yet government policy hobbled this industry for decades. Narayana Murthy of Infosys says it took almost two years in the 1980s to get a telephone connection and a licence to import a computer. Politicians and trade unions opposed computerisation as a threat to jobs. The 1993 bank-union agreement, two full years after liberalisation, nevertheless provided for bank branch computerisation at just 0.5-1% per year, meaning full computerisation would take 200 years!

Without widespread computerisation, software engineers could not develop high skills locally. But Indians who went to the US became the whizz kids of Silicon Valley. “Body shopping” followed — foreigners hired Indians to work on software projects in the US. India’s software skills were honed in Silicon Valley and then shipped back. No planner could have planned this: it was the spontaneous outcome of enterprise and global connectivity

Similarly, no planner could have created BPO. Nobody predicted in 1990 that thousands of foreign companies would move back-office and technical services to India. General Electric was the first to experiment with the idea. It succeeded so well that MNCs galore followed suit.
Initially, companies thought only low-tech jobs could be outsourced, but Indians quickly graduated to the most skilled tasks. Moody’s and Standard and Poor’s took a long time to upgrade India’s credit rating to investment grade, yet have shifted some of their own rating operations to India.

India has become a global R&D hub. Here too, General Electric led the pack. Renault-Nissan is partnering Bajaj to make a small car that can beat Tata’s Nano. The R&D has been entrusted by the Franco-Japanese giant to Bajaj. India’s boom in brain-intensive manufacturing was unplanned. Most people thought India would follow the path of labour-intensive exports pioneered by East and South-East Asia. India failed dismally here, thanks mainly to rigid labour laws. But, to everyone’s surprise, India became world class in brain-intensive industries like pharma and automobiles.

Indian pharma is now a global player, and all top companies have become MNCs, acquiring companies across continents. This was made possible after India agreed to international patent rules, something the government opposed tooth and nail and was finally forced to accept in the Uruguay Round of 1995. This failure of planned strategy was the beginning of Indian success. Indian pharma companies initially feared they would be wiped out, but soon found that integrating with the global economy was an opportunity, not a threat.

The auto industry has become world-class. Why? Auto companies need constant new models and improvements to compete. Auto MNCs in India found that Indian engineers could do this quickly and cheaply. An auto component giant like Delphi takes three months to go from a new concept to prototype to commercial production. Bharat Forge claims it can do this in one month. Such skills have made it global No 2 in auto forgings.

When the economy opened up in 1991, many predicted that Indian companies would go bust or be taken over by MNCs. Nobody dreamed that one day Tata Steel would take over Corus, which was six times as big; or that Tata Motors would acquire Jaguar and Land Rover; or that Hindalco would take over Novellis, which was several times its size.

How did Indian minnows take over global whales? By borrowing massively from abroad. But such massive borrowing was prohibited by government policy till recently. The curbs aimed to thwart irresponsible borrowing. No planner realised that the curbs also thwarted Indian takeovers of global giants. The government has long discouraged private initiatives in education, and education for profit is banned. Supposedly non-profit private engineering colleges have come up, often owned by politicians, and often collecting illegal fees under the table. Their educational standards are spotty at best. Yet, these unplanned colleges, warts and all, have driven brain-intensive manufacturing. Government colleges produce only 45,000 engineers a year. Private colleges produce nine times as many. For decades, telecom was a government monopoly. In the 1980s, the government vetoed proposals for cellphones, saying they were a rich man’s toy. No planner anticipated that after liberalisation in the 1990s, cellphones would be bought by everybody from rural shopkeepers to urban carpenters. Nobody foresaw that Indian companies would create the cheapest calls in the world, attracting 8-10 million new subscribers per month. No planner saw any comparative advantage in wind energy. Indian wind speeds are generally low. Yet Tulsi Tanti, a textile manufacturer, launched Suzlon to make windmills. He is now world No 5 in windmills. Essel Propack has become the world’s top producer of laminated plastic tubes (for toothpaste, drugs and cosmetics). Nobody planned this. Subhash Chandra, a rice merchant, was looking at an international fair for plastic packaging for rice. The plastics dealers told him, by the way, that laminated plastics were replacing aluminium tubes for toothpaste. This accidental discovery helped transform Chandra from humble rice trader to world No 1 in laminated tubes.

One of my favourite posters says, “Some people look at things as they are, and ask why. But I dream of things that never were, and ask why not.” India has succeeded by becoming a place where people can think of things that never were, ask why not, and then just do it...

Cheers till next time !

Upsetting Oil Pricing Conundrum in India

Indian Oil Corporation (IOC) calculates inter alia the landed import duty paid price of petrol and diesel every fortnight. This calculation is based on a formula that is linked to international prices. IOC’s landed price of petrol in Mumbai for the second fortnight of May was, for instance, Rs 38.1 per litre and for diesel Rs 48.8 per litre. The marketing companies had to, in other words, pay this amount to the refiners to buy the products. Next, the Central government imposes an excise and educational cess on the purchase cost. In May, this was Rs 14.4 per litre and Rs 0.4 per litre for petrol and Rs 4.6 per litre and Rs 0.1 per litre for diesel respectively. The total cash required by the marketing companies to purchase petrol and diesel in May was, therefore, Rs 52.9 per litre for petrol and Rs 53.6 per litre for diesel. The companies then sell these products at the ministry of petroleum mandated price of Rs 49.7 per litre for petrol and Rs 35.6 per litre for diesel (Mumbai prices). As such, they lose Rs 3.2 and Rs 18 for every litre of petrol and diesel sold respectively.

That, however, is not their total loss. They have to also pay sales tax to the state governments. In Mumbai, this tax is Rs 10.6 per litre and Rs 7.1 per litre for petrol and diesel respectively. Thus, the total cash loss suffered on account of the sale of 1 litre in Mumbai is Rs 13.7 and Rs 25.1 for petrol and diesel respectively. This is, in other words, the amount by which prices would have to be increased at the retail outlet for the companies to simply break even on a cash basis. Such a hike is, of course, out of the question.

Many in the public domain believe that the imbalance can be redressed by reducing the central and local taxes to make the public sector oil companies profitable. However, it is actually not about reducing the taxes to bring the prices down. That is just an indirect way of maintaining the subsidies. On one hand, the balance sheets of the oil companies might look healthier and higher profits might allow theme to disburse handsome dividends. On the other hand, the government revenues would come down and higher revenue deficits will bring the finance ministry into the FRBM dragnet. It is not a Morton’s fork but a Hobson’s choice for the government — to link the retail rates of petroleum products with the market rates.

In case of most other commodities, the high consumer price checks demand. This helps restore the supply-demand balance. As prices are not linked to the rising market rates, oil demand is not checked commensurate with the price change. It obviously creates an asymmetry in the supply-demand balance and can be only restored at much higher prices. By then, it might be already too late for the Indian economy.

Now let us look at two sensible, yet asynchronous, viewpoints on resolving this pricing conundrum. In the same piece, I prescribe the policy framework for a comprehensive petroleum policy. First, we should accept that high oil prices are here to stay. This does not mean we will not see sharp declines from present levels. What it does mean is that we will not see prices stabilising at levels significantly below a triple digit number. Second, we must create a mechanism that leads to a ‘graduated’ reduction in subsidies, an orderly alignment of domestic prices to international levels and a more efficient disbursement of financial support to the poor. Third, we must reverse ‘dieselisation’. And finally, we must recognise that the sine qua non of energy security is a robust and competitive domestic petroleum and energy sector.

One can only wonder if Rs 200,000 crore in oil subsidies, nearly 2% of India’s GDP, is not alarming enough for the government to pay heed to such sensible opinions.

Till next time, I better fuel up my tank before another bombshell price hike occurs !!!

Your Guide To Becoming The Ultimate DJ

Hi guys and girls...Its been a while since I posted....was a lil busy with my final yr exams.....so finally im done with them....

This post is up on public demand with many folks askin me to give them some tips and info on the basics of DJ'ing. So here it is a lil warm up for u to get into this field which offers u fame as well as a chance to earn a quick buck...but always remember there is a lot of hardwork which goes in the making of mixes. My guru's well they have been supporting me all this while...I love mixes by DJ Tiesto, Paul Van Dynk, DJ Aqeel For the unusual sounds ;) and also DJ Suketu....and my close buddy DJ Tarun...whoz name i always write for the help hez given me all this while. So lets begin...

Here in you'll learn how to set up your DJ equipment, add components, use different types of DJ equipment, how to mix, advanced beat mixing and beat making and more..
For the beginner DJ it can be a bit much to take on the wild world of DJing when you don't have a clue and even if you do you may be skeptical of spending so much money for something you may only do as a hobby. I put together some DJ gear tips to help ease your mind
There first thing you need to ask your self is how or in what capacity will I be using my DJ equipment? How much do I want to spend? Where will I buy all of this DJ equipment, and most importantly what DJ equipment do I need? I have DJ equipment tips to answer all of these questions and more.

Say you want to be an all-purpose DJ. Meaning you want to be able to be a club DJ and battle DJ. You allowed your self a budget of $600. (INR 24,000/-).But let me make this perfectly clear. There is no substitute for high end high quality DJ equipment. You'll only be kidding yourself if you think you can go pro on cheaper DJ equipment. If you want to pick it up as a hobby then this is a good place to start.

Two DJ turntables - Remember you need DIRECT-DRIVE turntables. They offer the best torque for cueing records. The Stanton T.60 Direct Drive Turntable has enough power to get you started.

One DJ mixer - Break in your mixer slowly. Learn all of its features to maximize you DJ skills as you build them. Later on you should try experimenting cutting the music in and out with different mixer settings. Try to develop your own unique style. As I mentioned before the reason why CD players have caught on is because of the versatility. Because they are digital they not only play music CDs but they also play MP3s. So if you have MP3s you have virtually doubled your arsenal of DJ music.

If you're a Mobile DJ you can have pre made mixes to play at your gigs while you sit back and eat and drink your way to a nice pay day. Because they're so small and light they are very portable. Which means instead of lugging around heavy turntables and crates of records you can cut your load by 2/3 while increasing your DJ music library not to mention saving time and money.

Having a set of Pro DJ CD players is a must for every Mobile DJ and an option for the Club DJ because Clubs still rely on vinyl. Before you purchase your first set you need to keep some things in mind.

1. Does it play MP3s and regular music CDs and CDRWs?
2. Does it have real time scratch capability?
3. Does it feel like you are spinning vinyl?
4. Can you cue the next track while the current one is playing?
5. Is there pitch control like a DJ turntable?
6. Is it shock proof?
7. Does it have memory points to save your cues of your favorite CDs?
8. Is there an S/PDIF digital output?
9. Is there a sampler and loop function?
10. Also, being able to burn a CD is always nice.

These are the basic features you need in any DJ CD player you purchase

One pair of DJ headphones - So now you have your turntables, your mixer, your amp and speakers. But you missed one small but crucial detail, headphones. There are ample number of headphones for DJs from Sony, Pioneer, and Technics which will help guide you in making the right decision.

Headphones have one important function. They help the DJ mix the beats together seamlessly. By monitoring one turntable in the headphones while the other turntable is playing for the crowd you can get the proper mix and proper transition from one table to the next.

There are a lot of people who would still like to lay their hands on the various softwares available.....so guys some useful info for you too....

DJ Software Programs - DJ software may be your answer if you don't have the money to spend on DJ equipment but you do own a fancy computer. You can become a DJ in the digital world with a little time and a little creativity. Creating DJ music on your pc can be fun.
Software for DJs is abundant. There are so many to choose from it's hard to tell who's who and each one has a specific purpose. Depending on your application, you can DJ using a laptop with Final Scratch, or create remixes with Cakewalk or master with Sound Forge. DJ software that is in-expensive could be your answer for recording and mastering that final mix. It will show you what you need to record and how to choose the right software. DJ software is not difficult to learn. I find that experimenting works best initially that way you get to learn where everything is and how it works.

After you get to understand how it works you should join a message board where other users post helpful information and documents to help you be more productive.
Fruity Loops is another DJ software program that is in high demand. The best thing about Fruity Loops is its ability to emulate so many of those famous sounds you hear from old school 70's artists to today's artists.

Sony Media Sound Forge v8.0 - Sound Forge by Sonic Foundry. For the price this DJ software is one of the best solutions on the market for editing music and mastering your final mix. Sound Forge offers its users the ability to easily create and edit music with a few simple clicks of the mouse. I have been using Sound Forge for a few years now and I have no complaints. It has a wide range of effects and processors and the help section has come in handy as well. It's a very user friendly product.

Traktor mp3 DJ - The Traktor mp3 DJ software program is another great product for up and coming DJs. It offers beat matching, pitch features and loop. A good package overall.
So I hope this tutorial will guide u for becoming a DJ. So get a funky beat and and cool song...and jus mix !

Happy mixing !