Archive | economics RSS feed for this section

Three subjects I love in my MBA program.

26 Apr

As you all know, I am pursuing my PGDM (part time executive) program at IFMR, Chennai. Love the college and the profs there.

Of the many subjects I learn during this 3 year course, I enjoy 3 in particular. Here is what they are and why:

Organizational Behavior:

One of my favourites. It’s a subject which teaches you how to run the people aspect of any business successfully. It’s about how EQ & iQ can help you work with your team members in complete sync. This course also teaches on traits to be a successful leader, a good team member, or how to recruit the right person for a job, and what kind of HR practises we need to put in place to foster a good culture. OB (as it is usually referred to..) is also about strategies you can put in place to make a company a great place to work .

I learnt the dynamics of group behaviour and , conflicts and negotiations and various other theories on managing teams and on how to become a good manager.

Learning it part-time helps me connect what I learn in class to what is happening in my organization.

Course Materials include case studies and text book : Organizational Behavior by  Robbins, Judge and Sanghi

Economics:

I majored in this subject during my UG . Again, love the subject . There are days when I wish that i had become a pure economist and a researcher than becomea marketing guy. I get to understand the Indian and world economy from Macro and why people but and do what they do from Micro Economics. Through practical examples and theory from Greorgy Mankiew books , I love reading reading up on economics .

Marketing :

The bastard son of Sales.  I am a complete marketing guy. And I love Brand Marketing specialization because I am all about communications and relationships. I have always known that one day I would become  brand marketing and communications guy. I just honed in on digital marketing and e commerce at later stage of my career .

I am not a great fan of advertising but love the idea of building brands through publica relations, BTL, word of mouth and digital .

An open letter to HBR team

1 Jan

To,

India Today Group and the HBR team

Extremely sad and shocked at the increase of the price of HBR from Rs.500 to Rs.750! Not sure why this suddenly increase in price. Is it cos of the new design or because it is a double issue or it is New Year?

What is the point in making the new design more accessible to reading when you are making the magazine less accessible for people to buy?

As long as the price was at Rs.500 I used to eagerly wait for the magazine to come out. Cos Rs.500 for me was an opportunity cost in financial planning. Rs.500 was a sacrifice I made for a movie outing with my finance. I used to think – even if I missed a movie with her, that’s fine! I get to read HBR management stuff. She understood.

Now, I can’t give her that reason. I can’t tell her that I sacrificed my time with her for a book which cost Rs.750.

What about the rest of us? What about new managers climbing the corporate ladder who may not have big salary but have big dreams and want to learn management ideas and thoughts from icons of HBR but cant because of the increase in price. Others may get access to HBR cos their HR would be good enough to buy it for them in office. Student’s studying MBA may get access to it from the coll library.

So what happens to the rest of us? Are we to be denied the pleasure of reading HBR?

The Entrepreneur (India edition) is Rs.100. that makes sense. That makes big sense to buy. And the content is good. Not as classy as HBR but good nonetheless.

So here is my big question: Why on earth did you guys raise the price back to Rs. 750?

If you are charging HBR print edition so much, why not give free online access to your articles and archives?

You know what is even more sad? Me not buying HBR won’t make any difference to you. It won’t cause a dent in your brand, sales or the policy you follow.

But hopefully there ought to be more ppl like me out there who will read this blog, nod their head and voice out their concerns as well… That may probably be a wake up call for you guys to rethink your pricing strategy in India.

A Dejetced Big Fan!

Sri Vikas

The Dream team at 7 Race Course Road

20 May

If i could use one word to describe the results of this election : Beautiful !

It is so heart warming to see India giving a big thumbs to stability and reforms .

Now that Congress is all set to form the govt here is my take on what key cabinet positions should be like :

cm_images_Government

Prime Minister : Dr Manmohan Singh

Principal Economic Adviser to the PM :  Montek Singh Alluwallia

Finance Minister : C. Rangarajan

Commerce Minister : Mr. Kamal Nath

Home Minister : P. Chindambaram

External Affairs Minister : Shashi Taroor

HRD :  Sam Pitroda ( Surprise !.. Surprise !)

Railway Minister : Laloo Prasad Yadav ( Yes, despite the fact that he partially dumped Congress. For the greater common good )

Communications & Telecom Minister : Dayanidhi Maran

Defense Minister : Mani Shankar Aiyar

Panchayath Raj Minister :  Rahul Gandhi

Aviation Minister : Praful Patel

Science and Technology Minister : Kapil Sibal

Rural Development Minister : Sachin Pilot

Micro and Small medium Industry Minister :  Jaipal Reddy

Tourism Minister : Jyothiradithya Scindia

Power Minister : Pranab Mukerjee

Agriculture Minister : Suresh kalmadi

Petroleum Minister : Murali Deora

Law and Justice Minister : Bhradwaj

This is a list of young and experienced group of ministers which i believe can be part of the Cabinet Ministry for the next government .

aaah! clarity finally.. In my journey

15 Apr

You know .. I just figured how i am gonna drive business in my company. Havent even informed Ryan yet. You know .. Ryan , Business Head for BODYFUELZ – my boss.. So he had asked me this question the other day – Vikas , how are you gonna drive business in this company ?

Been mashing up my thoughts for a quiet a while now . Actually a month . Close to a month …

Well , when i did figure out I kinda had this englightment inside me . Like this – “Boom! thats It ! This is what i want to do . this is what i should be doing. this what i am good at . Or i could be good at but not yet there.”

So ahem .. here is what  I would be doing with my future . At least the discipline I gonna dedicate my career.

I will put it in points just in case i read this blog couple of months from now when i need direction.

– Economics + Digital Media : I am trained economist. Rather : trained to understand economics. So no matter what others think ,  I tell ya folks,  Economics is so KOOOOl! Seriously it is .. It makes you compare and understand and figure out how a consumer spends or how he/she is likely to spend, with the money earned. It is fasicnating. It is human drama and it is has all the ingredients to make it a pot-boiler.

Now if I marry economics to digital media , you have a Blue Market Career. Fancy words, fancy titles .. you know the drill!

–  Social Media Communitions : You have heard of social media marketing but this is new. Social Media Communications is the package of social media technologies , corp comm and public relations. I haven tried it yet but something tells me ( it is the guts i say , MIND IT!) that this concept is gonna rock.

–  E Business : Get the word right . It is not e- commerce. It is E- Business. Watch this space to know more on what is the difference between the two.

– Connected Marketing : Word of Mouth, Viral  and Network hubs. String them together and you have a great campaign. Figure out a way to convert that to sales. Man, you will rock the boat!  You know,  I actually wanna rock my life, my relationships and my company once in a while .. Shake out the toxins and bring in fresh air. It will do good.

Word of Mouth : This is repetative. But I love this concept so much  that it needs to be revisted in my list.  If i can crowd source, buzz market, social network, tech process, thought lead, create hubs and start a wom plague then connect with a sale. I get done more with less.

heads up : Digital Branding is here to stay . What it lacks is a  Jermiah kind of a guy who will walk the talk and talk the walk. I mean , who is will  talk about it ( become a thought leader… ) and walk the talk ( …and show how it is done) . I am gonna be that guy or die trying . I am no technologist . I dont code. I observe  ( i am a buddhist by practise you see..) and i will be the “watcher” and then make my move from behind the scenes .

What will happen in future with these ideas ? Dont know.  Dont care.. but this is me now ..

The Fear of Deflation in Indian Economy

20 Mar

Today’s Economic Times has the screaming article Indian Economy staring at deflation. Is it good news ? in its front page.  Too late .. I have already predicted and reported on this .

On Feb27th of 2009 I had posted a blog  Inflation down to 3.36%. Nothing to be happy about. This blog was posted when 3.36% inflation figures were released by the government.

Is it good news ? Of course not. Why should it be ? Think about it. Deflation arises when less money is chasing more products. So the question now comes – Is it that we Indians have no money to buy ?

On the contrary,Indians have the money to invest. How else would you explain record number of new mobile connections sold ? How else will you explain Mercedes selling more cars in India than in most of the so called “‘mature”, “developed”  markets ? How else can you explain the IPL commercial values involved? How else can you explain DTH connections sold in drones in the last 6 months?

So you see , we can safely say that we Indians have the money to spend. What prevents us from spending a lot ( unlike last year) is the fear factor.

France , America, Britian has millions of job loses reported . France had 3 million out on streets protesting against wage cutes and unemployment. How many such rallies have we seen in India? I will let you answer that question.

First, let us accept the accept that the Indian economy clocked 9% G.D.P last year and it was fueled by entrepreneurship . But, unlike our counterparts ,Indians are largely insulated by the bad economic troubles. But true to our risk averse mind set we are saving our money and too scared to invest or buy in indulgence. Therefore , demand is low.

There are 2 ways at looking at it. Positive and Negative. Taking the current discussion under consideration, we are forced to look at the negative reasons. And negative reasons are very scary indeed.

What can be done ?  Two things – Awarness and Proactive solutions by the government and private companies and banks.

Self Awareness from the people is hard to come by. The government representatives should come out and talk directly to the people instead of just giving out talks in press conference . TV news channels can give a good coverage by inviting top brass to address people directly.

Address the Nation : When was the last the time we actually sat in front of the TV and listened to Presidential speech on the eve of Independence day ? Be honest about it .. But , this is the right time for Ministry of Finance, Planning Commission, RBI head to directly to the people. We should also have business icons and thought leaders like Naryana Mooorthy, Sam Pitroda, Sunil Mittal, Sachin Tendulkar, Dhoni, and writers , celebrities talk directly to the people. The idea is to instil confidence and security to the people.

Go Vernacular : Talking in high jargon filled English is not gonna do the trick. The biggest curse of India is that we have not been able to permeate the growth of the economy to the villages. Few people realise that villages, tier 2 and 3 cities hold the key to super power status of India. They may not be English educated but they have spending power. And like Unilever’s CEO Mr Paul said in a interview , ” We will have to drive people’s habits” . Very True!

But talk to people in their language.

Start spending but in a controlled way . Educate, Empower and set example and spread the word. Be a thought leader yourself. Ask your friends to spend but not in excess. Try to include Indian products in your grocery. This will fuel domestic economy and also in the long term make us a potential market and make it more investor friendly .

Simple things are can go a long way. You dont have to be a Chief Economist to drive change.

Just a thought : We should stop IMF and S&P500 and other agency give investor ratings during recession. Otherwise people are gonna reach such stats and go into a shell and reduce spending and brakes the FDI’s.

Inflation down to 3.36% : Nothing to be happy about.

27 Feb

In month of August – September 2008 our Inflation stood at 12 % .  The whole media industry went hay wire crying that India is a gonner. That Indian economy is dead and that the government did everything wrong with its monetary policies. Little did they realise that increase inflation was simply cos of the global problems affecting India. The primary reason being that crude oil was almost hitting $ 150 per barrel. 

Now, we have an inflation dip . In the today’s Economic Times article Inflation dips to 14 month low , there is a line which says – and i quote – 

With inflation ceasing to be a major concern, aggressive rate cuts are expected from the Reserve Bank to stimulate the economy.

 

This got me thinking… Are we safe in the inflation front? 

Now, let us visit the fundamental of economics  in a simple way 

Inflation is lots of money chasing very limited goods available in the market. Happens when the shop keepers and distributors and dealers increase the cost of the goods . This an offset of very vibrant, positive and booming economy. Inflation is good to a certain extent but when it crosses a benchmark percentage then it is a problem because it will inevitable affect the common man. 

A deflation is when the reverse happens. When the cost of the goods nosedives to unexpected lows. A clear sign of the economy slowing down and leading to a recession. 

Now that we have checked the economic theories , let get out with the analysis. 

 

When the Economic Times claims that there is nothing to worry about, I will have to disagree on their claims. 

Why ? 

Fear Factor 

Let me explain…

People like you and me are worried about tomorrow. We have a fear that we may not have a job tomorrow when we go to office. So we are saving the money which we earn so that even if we lose job tomorrow  we have enough money to sustain for couple of months till we find a new job. Last year we had dozens of HR people chasing us offering jobs everyday .Today it is the opposite. Even IIM- C Day Zero placements results are dismal by its high standards.

What we dont realize is that when we dont spend money to buy goods , there is no liquidity in the market. When there is no money circulating in the market , the goods remain unsold and hence productions slow down and comes to a grinding halt. This in turn on a macro scale slows down the entire economy. 

This is not a good thing to happen. Because this 3.36% on dip in inflation takes a much worrying scenario of –  Will we go into a deflation? Which is an even more serious issue. 

Had this 3.36% of dip inflation come down in a gradual way , then we may not be so alarmed. Because inflation numbers are always fluctuating in a good economy. It shows movement. It shows dynamism. It is kinetic energy of the economy in play. 

But this is not usual circumstances because of global economic crisis

 India cannot go into a recession. Our economic fundamentals are not build that way. But we can go into a stagnation. NO growth and No Fall . The economy will stagnate . People will keep buying the basic commodities for they day to day living. But they will buy it in lesser quantities at not so regular intervals. 

So you will have your mom will buy 2 apples less than when she usually buys. Your wife will buy spinach once a week. Fish and meat on occasions. Wont renew your gym, magazine subscriptions. Cut back on all spending, basically. So you have buying at a slower pace. Neither here nor there. 

The US economy is no where near on a comeback trail. 40% of US treassuries is with China and Japan and even they are having a major economy problem. So , the fear of job loss, the fear of unstability is going to be there for a long time. 

Hence dont be surprised when inflation further dips to 2 % and 1 % . But I hope at least then news media like Economic Times and Business Line wont take things lightly. 

What is the cure?

3.36% is something to be worried about.

Therefore banks should take cue from the govt stimulus policies and start lending more to consumers. For that to happen RBI should crack the whip with more stern actions on the banks which don’t take advantage of the stimulus packages and other monetary policies regulated recently. ICICI bank did a good job on fixing the 10% interest rate on lending last week. More such steps should be taken by  other banks as well.

Citizens should start spending more and try to buy more of  Indian products. This will in turn increase domestic demand and breath life in to Indian industries and reduce dependency on exports. Will help in the fiscal scenario as well! 

And the government can also take measures to increase the consumer confidence by releasing ads in print , tv and radio . A kind of awareness program.

Hope this post helps in sorting out issues on the inflation worries.

Drop in your comment if you agree of disagree on this.

Fiscal Policy : Are we planning to go into a recession?

26 Feb

I want you guys  to read the article Wrong Doctor, wrong treatment from the editorial of the Business Line and give it a serious thought. 

But i must caution that if you are not a keen follower of economic policies happening in India and across the world then you will not be able to grasp the real concept behind what the author is trying to convey in the article. Written in clear and simple words the author of the article is wondering if tthe Govt going dangerously wrong in itr fiscal and monetary policy. 

I personally think there is a element of  merit in the arguments put forth in the article. 

Are we trying to spend the money which we dont have ? Is it not similar to what happened in America in between 1993 and 2007 , the effect of which is now seen as the economic recession now. So, are we getting the wrong economics right in the wrong propotions? 

Are we spending more than what we should be spending ? Are we taking the fiscal problem in a lighter sense ? 

I dont care what economist you believe in . I personally go for Keynesian . Always have. But you may be a Friedman fan for all I care.

But today’s economic situation is so differenent in its scale and scope that I am willing to let go of Keynesian theories and embrace which will work and sound logic from an development prespective. 

I implore you guys to read the article . 

Please drop in your queries, doubts, ideas, thoughts so we can have a sensible discussion this and take it forward.

Also read my post on Is India still in recession to understand what is happeining to our economy.