India - U.S $ 2 Trillion Economy!! So??

Off late I've been trying to read a little about the macro-economical perspective and happenings of the various countries. Being a B-School grad but having failed to interpret the economical shift that's taking place across globe is the primary reason for me to dive deep into such subjects and make an effort to understand a little more about what's happening around the world.

Just as I was busy reading about the reasons behind the depreciating value of Rouble - the Russian currency and the economic trouble that Russia is facing, I realized that two of the world's respectable economies i.e Russia and Japan are expected to register a negative GDP growth rate in 2014 as compared to 2013. Interestingly what caught my eye was the same report by IMF published in December 2014 which predicted the negative growth rate expected India's Real GDP to grow at about 5.6% to help India to enter the U.S $ 2 Trillion club soon, this brought a little cheer to me. 

Having secretly celebrated the fact about India's expected growth rate, I continued reading a little more about India being a U.S $ 2 Trillion economy by FY 2014. Just as I progressed with my reading I encountered a lot of questionable facts and stats that brought my celebration to halt. The first and foremost reason being the sorry state of Human Development Index in India. India continues to stand at 135th position out of 187 countries that were surveyed by United Nations and shows little or no sign of growth in that perspective. The world average of HDI is about 0.700, however India as a nation manages to score 0.583(even our neighboring island country Sri Lanka ranked better than us), I don't wish to comment further on this parameter as a yardstick to measure India's glory.

With a marginal growth in the IIP (Index of Industrial Production) of about 1.2% in the period of April-December 2014 and the widening of Current Account Deficit by 2.1% in the last financial quarter due to increase in imports over exports the ambiguity in the India's growth story continues to loom. This draws my attention towards one of the widely talked about initiative by the government of India, 'Make in India'. As a lot of hopes and euphoria is build around the 'Make in India' campaign what remains the biggest challenge is the ever pending Land Acquisition Bill and complex tax structure (GST Bill) that has prevented a lot of multinational organizations from investing in India and the infrastructural vulnerability that India has been facing since ever, has been adding to the country's woes. 

Government of India strongly needs to revise the APMC (Agricultural Produce Market Committee) Act which remains inefficient in resolving various issues in the Agri-Sector. Since past few months GoI has tried really hard to bring down the minimum support price to the farmers as a measure to keep the inflation low, however this has had an adverse effect on the demand in rural India which comprises of around 60% of India's population. A concentrated effort to revive the inadequate storage and transport facilities and corrective measures to bypass the presence of middlemen may help to improve upon the present situation.

Having talked on various issues and challenges that stand tall ahead of a U.S $ 2 trillion economy one of the bigger concerns for India is, the faster growing young population. For any nation a young population is just like a double edged sword, if you fail to turn them into an asset by giving them adequate employment opportunities you are just adding on to your liabilities. India accounts for over 15% of global work force, however over 276 million of India's work force continue to earn less than U.S $ 2 per day (as per the India Labour and Employment Report 2014). 

All these and many more reasons, theories, factors and results interest me to learn and unlearn about  India as an emerging economy. My blogpost doesn't aim to demean India's growth story but to highlight a few observations and information that I happened to read in past few days or so.

References:

Harvard Business Review: https://hbr.org/2014/05/a-crossroads-for-india-and-its-business-landscape/

International Monetary Fund: http://www.imf.org/external/pubs/ft/weo/2014/02/

United Nations Human Development Report 2014: http://hdr.undp.org/en/content/table-1-human-development-index-and-its-components

Knoema Data Atlas: http://knoema.com/nwnfkne/world-gdp-ranking-2014-data-and-charts

Institute of Human Development : http://www.ihdindia.org/ILER.html

and a few more

Open for any feedback / recommendations / suggestions.

iPhone 6 does the trick!

Not too far ago on September 19th 2014 when iPhone 6 and iPhone 6 Plus were launched, Tim Cook and the Apple Inc. drew a lot of attention across the globe just like any other launch of an Apple product does. However the event received a mix response from the tech gurus universally. Some accused Apple Inc. of losing its technological edge over the period of years in the 'Tim Cook era' to its competitor, Samsung while others applauded their latest development in face of iPhone 6. 

Having known this, it still didn't stop Apple to garner a pre-order booking of over 4 million iPhone 6 and 6 Plus in its first 24 hours of availability and another 10 million devices were sold in next 3 days, this in itself was a record by any cellphone manufacturing company. In India, Apple has managed to sell over half a million iPhone 6 in last three months.

Over past few days, I have been wondering what has made Apple the most valuable company in the world, when its market share in cellphone category is just about 10% and that in the computer and peripherals category is about 8%. Only when I read through few articles I realized that in last one year or so Apple products have seen a considerable rise which has added a lot to the brand and its value.

Apple Inc. has now taken the world by the storm by posting a mind boggling sale of over 74.5 million units of iPhone 6 in just three months since its launch. Apple's profit have now risen to the all time high of U.S $18 billion with over 37% increase. No company on this planet has ever achieved such a high till date.

Tim Cook and team have been under a lot of pressure to fill in the void after Steve Job's demise in , but by looking at Apple's performance in last few quarters I am sure Steve would be proud of his successor as Tim has successfully managed to take the Apple Inc. to the heights which Jobs always aspired for. Steve Jobs and his aspirations are not new to this world, and it is only when you Aspire you can manage to reach where Apple Inc. is. 

Meanwhile it will be interesting to see what Tim and Co. deliver in the month of April when they reveal Apple Watch as the Apple Inc. is know to scale the pinnacles of technological advancement each time they deliver a product.

Ache Din – A distant dream for people of Banaras

The holy city of Banaras is probably older than the history and this evidently reflects from the ethnicity and culture of the people living there. The tehzeeb and nazakat of Banaras makes it apple of every tourist’s eye, who wishes to visit India. However all this is put to shame when you look deeper into the current public administration system of the city. The reason I am making this statement is because of what I experienced while discussing the schedule of ‘Banega Swach India’, a Campaign of NDTV in association with Dettol and PVCHR, to be held at Assi Ghat in Banaras on 14^th of December, with Shirin Shabana Khan and Anup Shrivastava in the PVCHR’s office. Amidst the conversation, I heard a shaky voice requesting to enter the office. She was an old lady from a marginalized community from a remote village in the Varanasi district. Ms. Shruti Nagvanshi, co-founder PVCHR requested her to take a seat and called for a cup of hot tea for the old lady. After a couple of minutes of silence the lady broke into tears and narrated her story. She was being harassed by her neighbour for no fault of hers or her family. She said that she tried reaching the local police administration but her requests fell on to the deaf ears because the person who troubled her and her family, had strong influence in the local police station. Ms. Shruti Nagvanshi patiently listened to her grief and immediately tried reaching the Senior Superintendent Police office. The SSP office was quick to respond to Ms. Nagvanshi’s request and assured of fair justice and protection to the old lady and her family. The point that I am trying to highlight here is that, the basic needs of a citizens like security is jeopardized in our biased administrative system. People like Ms. Nagvanshi are making strong difference in the society but for how long will this tyranny of ill managed administration continue.

The weaver community is still struggling to meet their basic necessities, cleanliness and hygiene is gone for a toss from the banks of river Ganga, traffic and road transport system is adding to the woes of the residents and many big and small notorious activities take place in the district of Varanasi in broad daylight. This shows that not much has changed in past 6 months in the city since Prime Minister Narendra Modiji has been elected as Member of Parliament from the same constituency. At the end of the day it is left for the citizens of Banaras and organizations like PVCHR to stand tall for their rights and advocate for fair and transparent administrative and legal system. The entire country is living in hope of Ache Din, which to me appears to be a distant dream atleast for another 3-4 years for the citizens of Banaras.

Banaras – The Pluralism capital of India

Banaras is older than history, older than tradition, older even than legends, and looks twice as old as them put together!! – Mark Twain

The holiest and the oldest city 
in India stands as an epitome of cultural heritage for centuries now.

Varanasi erstwhile Banaras – happens to be my native city and has been the apple of every tourist’s eye who desires to visit India. The city wakes with chants of Ganga Aarti at Dashashvamedh ghat and Azaan at Gyanvyapi Mosque, while the rest of our nation is still in slumber. This cultural and religious confluence of Banaras deepens with the presence of Sarnath, where Lord Gautam Buddha delivered his first sermon after attaining enlightenment at Bodh Gaya and the city is equally close to heart of Jains as 3 Jain Tirthankars were born in this Holy city. Banaras has been an archetype of pluralism across the globe.

Known for its various centres of religious and cultural importance like Kashi Vishwanath Mandir and Ghats at Ganges river basin, Banaras holds a distinguished place in the world for people of all the religions.

Banaras has also been a knowledge hub since centuries with various Kings and their princes attaining primary wisdom on the banks of Ganges, Banaras also hails Banaras Hindu University established by Pandit Madan Mohan Malviya in 1916 A.D which is also the largest residential university (even bigger than any of the IIMs and IITs) in India. 


Apart from boasting the religious and educational excellence Banaras is also home to 4 Bharat Ratna recipients (highest civilian award in India), most by any city across the country.

No wonder during Indian General Elections of 2014, BJP’s then Prime Ministerial candidate and India’s current Prime Minister Shri. Narendra Modi chose Banaras as his constituency.

Banaras today is at the centre of Indian politics, but the fact is that safeguarding its religious sanctity along with the pluralism and sociocultural inclusiveness should be a matter of high priority to all the Indians. Inspite of living almost 1500 kilometers away from the city it is just not possible for me to get over the bond that connects me to this cultural hub of India. With over 50 lakh tourists visiting the city annually, Banaras today has become the face of Indian cultural diversity.

The thought of Banaras and its importance to our nation frequently lingers in my mind and I recently read about a few intellectuals who have identified the need to preserve the Banaras' Culture and come up with a solution through a summit called the Banaras Convention. This summit seems intriguing and the agenda put forth by the organizers is engaging and I wish them the very best in their noble initiative.

Words aren’t enough to describe how divine my Banaras is, it is for us as individuals to visit the city once and experience the euphoria and for the administration and civilians to maintain the pluralism and inclusiveness of Banaras for eternity.

#UnionBudget2014

The Union Budget 2014 was presented by the current Finance Minister of India Shri. Arun Jaitley. The budget as expected was high voltage affair as any other event is in era of Modi Sarkar. All the eyes were on the Finance Minister's brief case, as to know the road map of Ache Din and this what the finance minister had to offer.

10 things that will work in interest of Aam Admi and his Ache Din!!

1) Say Cheese - A moment of cheer

-> Income tax slab raised from 2 lac p.a. to 2.5 lakhs per annum

i.e. if you are earning ₹ 20,833.33 a month  then you are not liable to pay any  income tax.

2) The entrepreneurial boost

-> Corpus of ₹ 10,000 Crore through venture capital funding and soft loans for young and budding entrepreneur.

3) Smart bann raha hai India

-> Allocation of ₹ 7,060 Crores for developing 100 smart cities in India.

4) Coz ExPORTs and ImPORTs are incomplete without PORTs

-> Building of 16 new ports across the coastline of India.

5) Cigarette smoking and Gutkha Chewing is now also injurious to wealth

 -> Hike in Excise Duty Of Cigarettes By 11% - 72% and Gutkha form 60% to 70%.

6) Giving wings to Insurance    

-> Increase of FDI in Insurance from 26% to 49%, inturn helping the 70 Billion USD insurance industry to penetrate deeper in our country.

    

7) Turning Delhi into Dubai and Banglore into Bejing

-> ₹ 50000 Crore worth urban infra projects.

8) Padhega India, tabhi toh badhega India

-> ₹ 28635 Crore to be funded for Sarva Shikasha Abhiyaan.

   

9) Fair-e-tail

-> E-commerce sales in retail allowed without any additional approval.

10) Har ghar kuch kehta hai
-> ₹ 4000 crores for National Housing Bank with a view to provide cheaper credit for affordable housing to Urban Poor and Low Income Group.

4 things that do not work for Aam Admi!!

1)  FM, why you no Meherbaan on our Kisaan ??
-> Not much help in agriculture sector with only ₹ 5000 Crore for irrigation and infrastructure and ₹ 500 Crore for Price stabilization


2)  No Power to generate Power


-> Failure in taking decisive measures in strengthening the power sector in India, except some relief in Coal import duty.

3)  Healthcare Mis-Management
-> No strong reforms for supplementing better health care facilities in Bharat; 4 AIIMS with a budget of only ₹ 500 Crores.

4)  Women Security – Not a priority !!       


-> Allocation of ₹ 150 Crore fund for security of over 20 Crore of women in large cities. i.e. ₹ 7.5 / woman, really!!??



I would personally rate this #UnionBudget2014 as 6.5 on 10, however it is left for the government to execute the plans in the right spirit and best of interest of the pupil of India.

Ache Din Kab Ayenge??

It has been around 50 days since the newly formed government has been in action. With promises of better governance, rein in prices, employment and entrepreneurship opportunities, reduced corruption, bringing back of black money, so on and so forth, the BJP led government stormed to power. Many believed that it was the charisma of Shri. Narendra Modi which helped the BJP realize its long awaited dream. However the outcome at the end of one month is not as pleasing as the citizens of the largest democracy in the world, who empowered a single party with a clear mandate to govern the nation, anticipated to be.

With increase in passenger fares and freight rates in Indian railways and recent hike in the petrol and diesel prices, things are gradually appearing to be going from bad to worse.

                        

Rome was not built overnight and similarly India can’t change within the blink of an eye, as some say “The mess of ten years cannot be cleaned in a month”. However NaMo’s extremely advanced strategic management and marketing team failed to mention the bitter pill that would complement the dessert of Ache Din that BJP offered during their election campaign. This has surely left the masses aghast.

Although the government has had a little to cheer about INS Vikramaditya and commercial success of PSLV C 23, it is obvious that such milestone projects did not take place in a span of 30 days and were the brain child of ISRO during the times of former NDA and UPA governments and not that of the current government.

I might appear cynical about the approach of our present government, but all I’m worried about is people’s changing perception of the slogan ‘Ache din aane wale hain’.

                              

The existing council of ministers are so engrossed in discussions of Article 370 and Uniform Civil Code, they seem to have forgotten that as per their own manifesto released during elections, curtailment of corruption, employment generation and containment of inflation remains their top most priority.

With meteorological department predictions of below average rainfall which eventually may lead to inflation, it will be interesting to see the policies and reforms of the existing government to revive the Indian economy at the earliest.

Even though a span of 30 days is too little to judge any government, too much delay in showing signs of development could metaphorically reflect an old saying "Curiosity Killed the Cat" with assembly elections in the states of Maharashtra and Haryana delivering unfavourable results for the BJP. 

All eyes are now set on our visionary prime minister to make things right and keep the ball rolling in the arena of progress and development. My best wishes are with him and all my fellow Indians. May India scale up the pinnacles of success in years to come.

In my next blog we shall discuss the 'Hits and Misses' of the recent Finance Budget of Modi Sarkar.

Here is the link for the next blog that discusses Hits & Misses of Union Budget 2014:

http://aniketnsingh.blogspot.in/2014/07/budget2014.html

New Poster Boys of India, Bansals of Flipkart

'If you can imagine it, you can achieve it; if you can dream it, you can become it' - Ward, Williams

Since the inception of mankind, human being have evolved; right from Stone Age till date (we can also term this age as a Digital Age).Today the world has become more like a cluster of digitally connected networks than anything else.Since Y2K the Computer Age has taken over the world by storm,especially the emerging economies like India.Some individuals and firms have been able to reap most out of it while others have just wondered about how the world around them has changed within the blink of an eye.

Two such individuals envisioned the Digital Age approaching India well in advance, they realised the need to establish a strong E-Commerce platform that can serve as many as 45.3 Million active Internet Users in India (Figures suggested by an IMRB International Survey Report, Sep 2008.Although the figure today is considerably higher than it was in 2008 with almost 164.81 million active internet users by March,2013) 

These two gentlemen were pass-outs from one the most prestigious institute in India, the Indian Institute of Technology, Delhi.They worked with one of the leading e-commerce company, Amazon and then ventured into the world of e-commerce with a website named 'www.FLIPKART.com' which initially focused only on selling of books.Later they diversified their business by venturing into sales of consumer durables like Electronic goods, Apparel for men & women, Home and Kitchen Appliances etc. and helped the company to become India's most preferred online shopping destination.

Their names are Sachin Bansal and Binny Bansal (not related by blood though).

Flipkart Online Services Private Limited was formally incorporated in October 2008, the time when most of the countries in the world were suffering from Economic slowdown.'Where others saw risk, they saw opportunity',an opportunity to grow, to expand, to use the potential of an emerging economy, to empower hundreds and thousands with a robust e-commerce platform to shop.

There is an old saying that 'The road to Success never runs Straight', this holds true in the case of Flipkart as well,remember this was the era when so called Mall Culture peaked in the minds of Indian consumers.Yes India was an emerging economy, yes there was a sharp increase in the number of Internet users across the country, yes the owners were IITians (assumed to be the sharpest of the whole lot) and had a past experience of working in a company with more or less similar Business Model but what they didn't have was adequate funds to purchase inventory and run their business without many financial hurdle.There was a stiff challenge to convert this huge number of active internet users into customers(may be not all but most of them), to make an Indian customer imbibe the online shopping model, to replace the Brick and Mortar structure with Click and Order and most importantly to make the customer believe in online purchase. 

All these problems were addressed one after the other.Accel India and Tiger Global - the venture capitalist firms invested heavily in Flipkart in its early years and ensured financial stability. Now with finances in place the next task was to make the people of India believe that online purchases can be trusted.Due to the absence of the actual physical appearance of the product before purchase, the customers are highly sceptical about the products moreover the payment of their purchase was another big question mark for the customers as till date, there are a considerable number of credit and debit card users who refrain from using their details for an online purchase.These problems were resolved by bringing about the Cash On Delivery model.Though this kind of mode of payment had its own challenges, Flipkart somehow has been able to find their way through it by innovating their business.

Now comes yet another important aspect of Flipkart's success,their Marketing Mix.The Virtual to Real connect that Flipkart was able to establish was noteworthy.The advertisements and the promotional activities of Flipkart not only amused the customers but they also conveyed the relevant messages with tag lines and phrases like 'Shopping ka naya address' (which in english translates to,'The new address of your shopping Destination').These advertisements and promotions helped Flipkart to establish trust amongst its existing and potential audiences. Flipkart have also ensured that their prices remain as low as possible in comparison to most of their competitors across various segments so as to attract more number of customers.Also, being a website it is available to all individuals 24x7, thus ensuring maximum possible reach and availability.

With timely and strategically important acquisitions Flipkart continued to expand its business in best possible manner.With acquisition of Letsbuy.com in 2012 Flipkart also established strong roots in the Electronic Goods section.

Today Flipkart is a giant in Indian e-commerce industry with sales of over  1 Billion U.S Dollars.But back in 2007-2008 it was only an idea, a thought, a vision foreseen by Sachin Bansal and Binny Bansal. The rise and glory of Flipkart teaches numerous lessons of management and life.The Bansals of Flipkart have now become role models for hundreds of budding Entrepreneurs with their success story and with Economic Times (a popular Business Daily) bestowing Sachin Bansal as 'The Entrepreneur of the Year', 2012-13 has set the bench mark  for all the aspiring entrepreneurs.

References:
http://www.thehindu.com/sci-tech/technology/internet/india-is-now-worlds-third-largest-internet-user-after-us-china/article5053115.ece

http://www.imrbint.com/old/media/45..pdf

http://www.iamwire.com/2011/07/sachin-bansal-flipkart-ceo-interview/
http://m.economictimes.com/news/news-by-industry/services/retail/flipkart-hits-1-billion-in-sales-a-year-ahead-of-schedule/articleshow/31549992.cms

http://articles.economictimes.indiatimes.com/2013-09-26/news/42426999_1_business-model-tiger-global-accel-partners