IIPM - ARTICLE AND PUBLICATION

Saturday, October 04, 2008

Senior Congress leaders redfaced

They had not done their homework properly for the Hubli tour
The young AICC general secretary seemed never to tire of

cracking the whip at senior Congressmen who had accompanied him on the tour, unmindful that the junior party functionaries were listening on. The Karnataka Pradesh Youth Congress Committee president Krishna Byregowda and Congress Committee president Mallikarjun Kharge had a particularly humiliating time with Rahul Gandhi on the third day of the Dharwad tour. Kharge couldn’t even interact with the NTTF students, and as if this weren’t bad enough, he was kept waiting a full 15 minutes at the gate. He was finally rescued by former minister R. V. Deshpande, who prevailed upon Rahul to tell SPG that they should let the man in. In keeping with the dynastic norm none would of course admit any of it; but their red faces said it all, saying merely, "It happens, it happens.”

Rahul did not appear in the least pleased by his “interactive” session with “select” Youth Congress workers in Hubli who, to give the young Gandhi his due, were repeatedly caught fumbling when asked precisely what organisational work was under way in their areas. However, the young Gandhi enjoyed his interaction with the tribals and youth, a large number of whom had gathered to welcome him. Then he had a meal of chappatis and honey with the Hubli locals and other villagers.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

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Friday, October 03, 2008

It’s no ‘Bunk’

23% premium sounds logical for BII
It seems like banks have had enough of playing ‘cheerleaders’ in

the M&As game. And if you thought the ABN Amro deal was all there was, Malaysian Banking Bhd (Maybank) is here to prove you wrong with its 55.7% stake-buy in Bank International Indonesia (BII) – a $1.5 billion deal announced on March 26, 2008. Also, with Maybank making a further open offer to other minority shareholders for the remaining 44.3% stake, the overall deal is expected to create a $2.7 billion dent in Maybank’s pocket.

Dato Desa, CEO, Maybank, justifies the deal as, “The strategic and financial rationale for the acquisition is extremely compelling. The acquisition will transform our growth prospects in Indonesia...” Surely, this is a huge step forward in Maybank’s strategy to regionalise its operations through investments in high-growth markets. The logic for the deal, too, sounds valid with margins in Malaysia drying-up fast due to competition intensifying by the day. However, Maybank’s stakeholders appeared critical as its share prices fell to a 3.5-year low post-announcement to 8.40 Ringgit. Some analysts, too, saw the deal as being over-valued, especially considering that BII performed under-par for the past 2 years, with profits falling by a whopping 36% during 2007, and another 13% during 2006 as Julian Chua, Analyst, Citigroup voices, “The price tag on BII is 50% higher than initially assumed for mediocre franchise...” However, Citigroup & FitchRatings are of an opinion that in the long-term, Indonesia has good prospects & Maybank has taken the right cue. As a matter of fact, Maybank says that it is targetting an increase in the loans of BII by over 20% in 2008.

Chris Oh, Analyst, JP Morgan Chase also supports this move as he divulges, “The BII was a ‘must-have’ strategic acquisition for Maybank. BII is projected to have minimum sustainable return of at least 20% beyond FY 2010 (sans factoring-in synergies).” Adding all this to Malaysia’s growing trade-ties with ASEAN trading partners, $2.7 billion suddenly appears ‘loose change’!

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Wednesday, October 01, 2008

To bypass US, make a US of us...

The Tatas with near hundred companies have created a captive economy which can sustain in lean times by supporting each other. India needs to emulate the same to avoid pinpricks of global recessions...
The US is nowadays the favorite whipping boy of the world. If

it does well in it’s economy, it is blamed for its carbon emissions and replacing the cultivation of foodgrain with the production of biofuel. Therefore when the economy of the US starts faltering, ideally the world should be happy as it gives the right kind of opportunity to dethrone the sole remaining superpower of the earth. A slowing American economy is also a harbinger for reduction in the level of carbon emissions as bankrupt Americans coupled with more bankrupt banks would consume less thereby consuming lesser fuel. But alas, even in it’s demise, the world abuses it. When it booms, the Americans are asked, ‘Why are you booming?

Your consumptions and insatiable appetite would someday ruin the world’, while at the first impression of a slowing down in the American economy, it is then abused again, ‘Why the hell are you slowing down? Why can’t you manage your own backyard properly? Don’t you realize that many millions across the world would be unemployed if your economic machine stops rolling?’ One should pity the Americans. It’s like damned if they do and damned if they don’t. But why is it that for all the hype of emerging economies all across the developing nations, the world’s well being is still dependent on the consumption pattern of 300 million Americans? And for a change, is it possible to forgive the poor Americans and think about alternatives so that the world can be relieved of the typical cycle of recession and boom while out rightly relegating the FIIs to oblivion for their ‘fair weather friend behavior’ and the habit of pulling the carpet beneath the feet and catching nations off guard especially when they are about to celebrate their newfound economic well being? Look at India. While everyone was expecting that the sensex, after having a stupendous run for quite sometime and having breached the magic figure of 20,000 would embrace 30,000 soon, things went awry.

Even before the euphoria could settle down, the investors were shaken up from their siesta with rude jolts whose end is still not in sight. The sensex is tumbling every day and is becoming more in flux than the twists and turns of the film ‘The Runaway Bride.’ And all of a sudden the fairy tale of India’s incredible growth story seems so elusive. The economy still remains the same with more or less the same growth rate but suddenly there’s so much gloom all around as if there’s no tomorrow. That’s the power of sentiments and that’s the caveat attached with the blessings of globalization. Just consider this most weird and yet the factually true correlation.

The Ahmedabad Police is having sleepless nights in securing the Kankaria lake for fear of more suicides by investors who have lost millions due to sudden crunch of the stock market, which happened because the American banks were losing money for giving loan to those Americans with questionable creditworthiness who borrowed and spent but did not return the money on time which led to massive losses for the American banking sector, the economic hit of which may be to the extent of $600 billion which in addition to the trillions of dollars having already been spend on the American ‘War on terror’ is leading to an American economic slowdown because of which the Indian companies see a reduction in their future estimate of earning leading to reduction in the price of their shares leading to suicides of those who have put either all their savings or rather have borrowed money to invest in the stock markets for quick gains. Phew!!! Not that leveraging to that extent is good but in essence this time the suicides were happening for no fault of the Indian economy. India is just paying the price of not having a strong internal economy.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Monday, September 29, 2008

It’s the money, stupid

Commercial banks have aggressively extended loans to farmers. But the money is being used for purposes not even remotely related to agriculture. By ASIF AHMED
“A man, who has never sown seeds in the scorching heat in the month

of June, will never know what real summer is. And a man, who has never watered his fields in the chilly winters of December, may never know what winters mean,” said the late Rajesh Pilot, a former cabinet minister, while addressing a rally of thousands of farmers years ago. The 60-year old Bhopal Singh, a resident of the fertile area of Khanpur village in the holy land of Haridwar district, remembers that speech quite clearly.

Pilot was right. For the Indian farmer, life had never been as tough as it is today. Ironical, I thought, as I gazed at the paddy fields in Khanpur, which were simply amazing. They were like green carpets or huge golf courses spread over bighas and bighas of land. But what was difficult to understand was the reason why the average Indian farmer is buried under huge debt even after 60 years of Independence, why can’t he send his son/daughter to a primary school, and why his annual crops fail to bring a smile to his face.

Even today, despite the rise of manufacturing and services sectors, agriculture has a dominant role to play in the Indian economy. Despite a decline in its share in GDP, it provides livelihood to nearly two-thirds of our population. Besides, agriculture provides raw material for industrial growth. Enough has been said on the issue, but not enough has been done to give a push to agriculture which, if accelerated, can actually propel the annual GDP growth to double digits. The 11th Plan document calls for agriculture growth of 4%, but the sector has hardly seen any capital investments and, over the past five years, the sector has witnessed a CAGR of a mere 2.3%.

One thing that Indian farmers need desperately is ‘credit’, and to the credit of the UPA government, it has considered it to be a top policy priority. According to the RBI’s latest annual report, the credit flow to the agricultural sector exceeded the target for the third consecutive year in 2006-07. Credit flow from commercial banks to the agriculture sector during the current financial year is likely to touch Rs.2,40,000 crore, as against the target of Rs.2,25,000 crore, union finance minister P. Chidambaram recently said that the figures were impressive even at the micro level. We decided to check out if this was indeed true.

“As the lead bank in Haridwar district, it is the responsibility of our bank to act as a coordinator between the bankers and government machinery. It is our responsibility to implement all the government-sponsored schemes, which are operating in the district as well as pinpoint and rectify any problems in the credit-delivery mechanism. Not only have we achieved the government objectives, in most of the cases, we have even surpassed the targets by significant margins,” says a bank officer, who’s in charge of the lead bank’s (Punjab National Bank) branch office in Haridwar district. In an attempt to give a push to credit delivery in India, the Punjab National Bank recently organised a loan mela (it was actually called a camp as the Reserve Bank of India has asked banks to refrain from using the word ‘mela’ as it diluted the event’s image) in Haridwar to clear all funds for the government-sponsored schemes that were pending in various branches. The idea was to help the banks in the region to achieve targets in different schemes before the closure of FY08. “The effort was worth it as a total of 450 borrowers were sanctioned loans worth Rs.3.5 crore,” the manager adds.

“The situation has improved, since manager sahib came to our branch,” feels Karam Singh, a farmer in his late forties. Short-term credit, which has a repayment period of one year, is disbursed through KCC (Kisaan Credit Cards), which has become the lifeline of small farmers. “Through KCC, we are now able to repay our debt, meet our day-to-day expenses, build pucca houses, and use the credit for marriage purposes,” was a constant refrain one heard from almost all the farmers we met in the area.

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

Saturday, September 27, 2008

Programme is riddled with corruption

Of course, there’s corruption and there are issues related to misappropriation of funds, allocation, quality and speed of work under the scheme. In the case of Bihar, CAG observed that there have been cases of diversion and misuse of funds, inadmissible payments, ineligible beneficiaries, and incomplete construction. Over Rs.90 crore budgeted for the scheme remained unutilised, and the state failed to obtain an assistance of Rs.401 crore from the Centre. CAG also detected that 3,050 houses had been made at the cost of Rs.4.78 crore for ineligible beneficiaries, and around 7,000 houses were either incomplete or abandoned for the past 2-5 years. The same is true for other parts of India.

Another problem with the project is that the houses are allocated to female members of the household in order to promote women empowerment. Nevertheless, the CAG report suggested that in 17 States and two Union Territories, as many as 37.75% of the allotments were made in favour of male members, thus defeating the main objective. But everything isn’t bleak, and this was proved by our experience in Bihar’s Samastipur, where the locals seemed happy and satisfied with the Yojna.

In addition, officials from local bodies—and sometimes the beneficiaries themselves—come up with ideas that have redefined the project. For example, in Begusarai district of Bihar, beneficiaries collectively worked as labourers to build the houses of other villagers who, in turn, helped them later. The result: the village saved Rs.5,000 per house. This model—which is like an informal self-help group—was later implemented in others districts of India.

Similarly, under another scheme in Patna district, the beneficiaries are given a loan of Rs.20,000 each at 4% interest to be repaid in 84 months at an EMI of Rs.275 per month. This was to prevent the beneficiaries from taking external borrowings at exorbitant interest. “Following this, the banks have come up with a scheme to assist them,” says Atul Mishra, Project Officer, DRDA. “The idea was an instant hit as it impacted the local moneylenders,” he adds.

With the national elections due next year, the UPA government would like to take electoral advantages from the Indira Awaas Yojna. Regional parties would do the same, as would local leaders. Nevertheless, the UPA hopes to gain all the brownie points by taking credit for the scheme, and blaming the states for not doing enough to implement the scheme. It is a smart move and the UPA believes it can get away with it.

But as we saw in Samastipur and other districts of Bihar, it won’t be a cakewalk for the ruling party at the Centre as other politicians and political parties have already convinced people that they had built the houses for the villagers. Each leader will claim the credit for building the houses, for giving a roof over the heads of the poor households. And it’s the voters who will finally decide.

The Snapshot
The Centre is responsible for policy, planning, finance, implementation, guidance, monitoring, and evaluation of the scheme

At the state and district levels, the responsibility rests with SLCCs, DRDAs and ZPs

The block development officers and panchayat samitis are the grassroots implementers of the rural housing blueprint

The Problems

Against the target of 109.53 lakh housing units, less than half were constructed or upgraded

CAG observed that there have been cases of diversion and misuse of funds, inadmissible payments, ineligible beneficiaries, and incomplete construction of the houses

Over a third of the houses were in favour of males defeating the purpose of empowering women

For Complete I I P M Article, Click on IIPM Article

Source : IIPM Editorial, 2008

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative
Read these article :-
ZEE BUSINESS BEST B SCHOOL SURVEY
B-schooled in India, Placed Abroad (Print Version)
IIPM in Financial times (Print Version)
IIPM makes business education truly global (Print Version)
The Indian Institute of Planning and Management (IIPM)
IIPM Campus

Top Articles on IIPM:-
'This is one of Big B's best performances'
IIPM to come up at Rajarhat
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IIPM makes business education truly global-Education-The Times of ...
The Hindu : Education Plus : Honour for IIPM
IIPM ranked No.1 B-School in India, Management News - By ...
IIPM Ranked No1 B-School in India
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The Hindu Business Line : IIPM placements hit a high of over 2000 jobs
Deccan Herald - IIPM ranked as top B-School in India
India eNews - IIPM Ranked No1 B-School in India
IIPM Delhi - Indian Institute of Planning and Management New Delhi ...domain-b.com : IIPM ranked ahead of IIMs