Archive | 6:02 pm

Is India still in recession ?

14 Dec

If you Google this topic you are going to get numerous answers with some mind boggling stats to tell you that India is into recession or slowly moving into it.

I am going to give you a different opinion altogether! I don’t believe even for one second that India is into recession. In fact I will take the “audacity of hope” as my tool to declare that India wont even go close to recession.
You may argue back saying , “dude! don’t you read newspapers or watch news ? did you not check the IIP stats? The numbers are negative man! Our sensex has taken a complete nose-dive. People are loosing their jobs left-right and center. and you still think India is not into recession or moving into it?” ..

I stick by what I just said .You see, India is having a spill over effect of a global recession. And it is that spill over effect that is causing these job loss spree. But compared to our western counterparts Indian companies are not giving out the pink slips in droves. No Sir!

Tell you why …

First , India is not a globalized economy. That is , India is not completely globalized like European countries, Japan and China.

Second , India was already facing a huge inflation problem when the sub-prime crisis (which triggered the global meltdown) started . By the way, Indian lending laws are so stringent and fundamentally strong that , our country cannot just go into sub-prime like crisis at all. We Indians are firm believers in saving money and spending in thrift. So dont worry.. India wont go into a sub prime crisis.

Finally, India’s growth story is not due to any external factors . nay.. India’s growth story is completely domestic driven. The so called middle class income expansion is not just coming from IT and ITES services (which is prone to global imbalances) alone. India is a huge growth engine moving forward in all factors. Our business honchos, policy makers made sure that India and its currency stays as much immune from global currencies as possible.That is why , India is not seeing an companies going bankrupt. How else would you explain ICICI, HDFC and other banks flourishing so well when banks from other parts of the global are going bankrupt? come on .. tell me .. why ?

So how can we explain the negative stats of IIP . Just for the perspective. Our numbers are like  -0.4% as compared to 12.2% last year. This is primary because of decline in exports and fear factor among Indians.Did you know that in theory a recession in the rich world should hurt India less than other emerging markets: exports amount to only about 22% of India’s GDP, against 37% of China’s.

Read the real story of numbers here : Negative show: Industrial output contracts in October.  Read the complete article please.

China is making massive money from it exports like hell because they make goods a rock bottom prices due to availability of cheap labour.

Allow me to explain…

Let us take the example of a manufacturing firm of foreign origin/ or even Indian origin which produces 2000units of its products. 100o units for exports and the other 1000 units for domestic consumption. The company shall be termed X. Let us focus on export units – 1000 nos . Due to the global financial problem people in the other side of the globe don’t have enough money to buy the  products of the company X which they usually do.This would mean the products earmarked for shipments remain unsold in warehouses thereby increasing the inventory. Now, the companies get money only after the products are shipped to the other side and bought by consumers. The money/income thus received is then used to pay for the labour involved, raw materials, profits taken and then a huge chunk is put back into the company to produce more of such products for exports again.

Are you with me ?

Good.. So , when there is no money to re invest , obviously the company wont be able to produce any more goods. Also, the manufacturers will be cautious to use the reserve surplus to manufacture more goods because the economic outlook is bleak.  Eventually and in the long run when there is no enough money to pay, people are shown the door.

Meanwhile, even if we Indians have enough money to spend , we will suddenly check the global scenario and a friend will advice to his colleague , “damn, see US and Europe is into recessions, people are losing jobs.. and that India guy who studied in IIT and such a rich fellow . He killed his family and committed suicide cos of bad debts. Maybe we should be careful now . If  such big big countries can have problems ..how soon do you think we will get into trouble like that . Let us be careful now, yaar! Who knows when we will lose our jobs? Let us save now . We can spend when time are good . ”

Wife will advice her husband , ” listen, don’t buy too much from the stores , ok? We will manage . I saw TV news about the finance problem. And i heard from my mom that her friend’s son lost his job . Did you check the share market points today ? It was down and in red for the whole day , yesterday. We have enough for next 2 days . Just buy little “, and for the first time she will use the word budget … ” Let us have a budget from next month, ok ? ” … Sensex, Budget are words which are new to her dictionary..

Mom will catuion her son/daughter ( who  just joined a firm fresh out of college) , ” Listen, don’t go out too much with friends and waste your salary on movies , clothes or jewellery. Manage with what you have. and beta .. don’t resign or jump jobs. When you get the first salary. Give half to me, I will put in your savings. Don’t buy that bike now. Intrest rates are high . Buy it after 6 months “…

The panic button is on and the story goes on …

Media will use the panic to give you more sensational news from abroad and get you more worried.. It is cyclic..

We start saving a lot more than we should. Hence,money gets stagnated .

When you don’t buy stuff how are you going to give money back to the manufactures to produce more? If they dont have enough to produce, how are they going to pay your salary? When they don’t have enough money to pay your salary ,cos of no work getting done , why do you expect them to pay you for nothing and not ask you to leave?

Simple right?

So, as you see .. the story is we get sentimental and extra cautious when we hear the news around us .

Don’t do that ..!

Check not the news .. check the real facts . Check real information released by the government and listen to well known business industry leaders.

The India Finance Ministry with RBI under the leadership of Dr Manmohan Singh and Deputy Planning Commissioner Montek singh Ahluwalia is doing a good job. The steps taken as of now ( with two stimulus package and petrol price reduction) is showing signs . Inflation has come down. The full impact is yet to be seen. A third stimulus package is on the cards. So relax.. Our policy makers are much better than our counterparts in other parts of the world.

India is having spill over effect. Not a recession. True , our economy has slowed down. From an extremely robust GDP growth of 8-9% we now predict 6% . But that would still make our country one of the fastest growing economy in the world. Only India from the so called BRIC (Brazil,Russia,India,China) nations is faring well compared to others.

But remember in economics and finance, as in other aspects of life the rule still holds water – What goes down should come up. And what comes up , should definitely go down” . Be it Sensex, economy, failure, success, happiness, sadness, love, hatred ..  You can just play the game of the gods..

As one great poet cum dramatist so aptly put ” the world is stage …. ”

I realize this is a very long post. Might be boring for some. But I have tried to put facts and my thoughts in a very simple way. I am no economist and will gladly accpet that I am wrong if proved so ..

I welcome your suggestions and ask those who read to spread the word around if you see merit in my opinions.

Also, check this article,China and India : Suddenly vulnerable , from Economist on what they think about the effects of global recession on India and China.

Mozilla wants your vote

14 Dec

I am a staunch believer of Open Source Software and I love using Mozilla browser as compared to IE.These days I enjoy using Google Chrome a lot too 🙂

Mozilla is now planning to spread the good word and like a true Open Social Software company it is inviting people from its community ( basically all those who download and use mozilla browser) to vote for its Marketing plan. These plans are submitted by regular people ( its a wow democracy ) like you and me . Of the 300 entries, 10 has been shortlisted. All you need to do is go through the plan and cast your vote.

Vote for Mozilla Marketing Plan here :

Impact Mozilla

What consitutes a good business plan ?

14 Dec

For a long time now I have  been asking/searching around for samples of a good marketing/business plan. I just wanted to know what are the elements/formats involved in writing a sound and viable plan. Never got around finding it till today.

You see, I am very much passionate about starting my own company. One day I would like to become a job and wealth creator. But to start any business you need a good business plan. If you want to be an entrepreneur , then you better be armed with a damn good business plan when you go asking for VC money.

Businessweek magazine’s online version has a very good example of how a business plan should look like . I recommend all you guys to read Businessweek regularly and  as often as possible to update your knowledge on various aspects of business and not just business news.

Seahorse Power company started by Jim Poss won the best business plan award at Babson’s MBA program.

Here the article :

How to Write a Winning Business Plan

Check out the business plan here :

Seahorse Power business plan

Innovation is the key to social media marketing not random banner ads

14 Dec

The article Advertisers face Hurdles on Social Networking Sites in The New York Times is once again bringing to light on the fact that putting up banner ads and fan page in social networking sites need not be entirely successful. Being a social media evangelist myself, i echo same point here as well.

Putting up in-expensive banner ads or creating a fan page is not good enough. The users will sign up/become a member of the fan page just to show their solidarity to the brand. Fair enough. But that is not branding .

Branding is all about reinforcing the name of an existing brand and the product or luring in new customers to buy the brand. To put in simple language , that is.  Bottom line .. all this is done is to increase sales.  Dynamic banner ads is not the solution for that .

One thing is that social media marketing and networks are at a very nascent stage. In order to leverage social media companies should find much better ways to use social networks in branding and lead generation.

One good way is to start a blog ,connect with relevant bloggers and run a viral campaign. Implement multiple viral/buzz/online word of mouth marketing campaigns and learn from trial and error method. But make sure there is one “BIg IDEA” behind every campaign which is run. For this , the marketing teams should innovate and launch highly customized products to users and propagate it without being intrusive and irritating.

Stop picking on Rahul Dravid please …

14 Dec

I don’t get it . Why is the media hounding Rahul “The Wall” Dravid all the time? Sure.. he is having some major problems in scoring .So what ?

He is the same guy who was the toast of the media when he won matched for India in both forms of the game. In fact , he is the most successful player in Indian cricket history for playing test matches abroad. scores of budding cricket players have watched an learnt from him – stability,concentration and technique. He is not called “The Wall” for nothing.

R.Dravid is not the lord of offside like Saurav , nor is he swashbuckling player like Viru, a brilliant genius like tendulkar or the “sweet timer” of the ball like Laxman. But none of the mentioned players has the power of concentration, technique and stability like Dravid has. period. He was the guy who on numerous occasions held a partnership together from the other. He kept the ball running and scores ticking . He did it in his own way. He enjoyed the game for how he played. He done all that he can for his team. So , it would be really nice if the media left him alone. He is going through a lean patch . if so .. then so be it.  Instead of predicting or calling for his retirement . Let him leave when he wants at his own pace. It is so easy for us to sit on the fences and criticise him on how he plays . Let us not do that anymore..

Let him play his game .

what exactly do you mean by CTC – Cost to Company?

14 Dec

I always used to wonder what exactly does CTC mean. when i asked this question to the HR of my previous company, even he couldn’t give me a proper reply.
I searched a lot in internet and never got a clear cut simple answer until i read a small piece of explanation found in pagalguy forums .

Here is a reply on what ctc is all about . I picked this one because it is simple ,clear and short:

” CTC, is the Cost to the company. Many companies don’t give you a clear idea of how much Cash you would end up getting in hand. All they tell you is the total pay package. This package includes non-monetary benefits like Accommodation, Telephone, Training Costs etc. To inflate the figures, companies will give you Child Education Allowance (if you are unmarried) or some insurance policy that you do not need , or they will say that the training that they are providing you is worth some mindless figure. This is how a 30,000 cash in hand can easily become 5-6 lac package.”

Aint that simple enough for you ? If not .. then try sending me a much simpler and easy to understand info on what CTC is all about.