Showing posts with label IIPM-Article. Show all posts
Showing posts with label IIPM-Article. Show all posts

Saturday, October 13, 2012

Pupils, you're on your own now!

Whether or not they agreed with his style of working, MPs would surely miss this headmaster in the next Lok Sabha
 
On the last day of 14th Lok Sabha, while MPs would be wondering whether or not they would return for the 15th Lok Sabha; they were certain of one thing – that they will not get to hear the commanding and firm voice of Somnath Chatterjee, Speaker of Parliament, again. Somnath has willingly retired from active politics. And during the emotional farewell when he was given the title of headmaster, he wasn't angry but proud. Now he would be spending his days away from the hullabaloo.

Born on July 25, 1929 in Tejpur, Assam, Somnath Chatterjee completed his preliminary education from Kolkata and then got his post graduate degree from Cambridge. In 1971, he contested for the Lok Sabha elections for the first time from Bolhpur and remained as an MP till the 14th Lok Sabha in 2004. During his tenure as an MP he raised many important issues for CPI (M). A front bencher in the Parliament, he commanded tremendous respect; in fact he used to always get preference during a discussion on any topic. And that is the reason why he was given the Best Parliamentarian award in 1996. In 2004, when Sonia proposed his name for the Speaker's post it was supported even by the BJP. He has been known as the most well-versed person in the guidelines and rules of Parliament and during his tenure as Speaker, he tried to follow the rules to the fullest.

Mostly clad in dhoti kurta at his residence, this CPI (M) comrade loved going to Bolhpur with his family every year to attend every Durga Puja. During one of his visits to Bolhpur, when school children asked him about the activities taking place in Parliament, he had a brain wave; that Lok Sabha and Rajya Sabha activities should be telecast. His idea was the base of the 24-hour telecast of Parliament activities. During his tenure as Speaker, he made some important decisions. One amongst them was that even the Zero hour should be telecast, since it is during this time that most of the members actually come up with their local problems.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Thursday, October 11, 2012

Insiders make more sense...

Chandrasekaran is perhaps the right person to take over the baton of TCS from Ramadorai

Ramadorai joined Tata Consultancy Services (TCS) in 1972 as junior engineer. He was appointed as the Chief Executive Officer of the company in 1996. Later in 2004 he also became the Managing Director of this Tata Group company. He holds a Bachelor of Engineering in Electronics and Telecommunications from Indian Institute of Science, Bangalore and a Masters degree in Computer Science from the University of California. He has more than 36 years of experience and has received Padma Bhushan in 2006 for his contribution towards the development of the IT industry. He has been instrumental in building TCS to a $5.7 billion global software and services company and he is recognised amongst other influential IT leaders in the world.

N. Chandrasekaran, the Chief Operating Officer of TCS is more likely to take over the mantle from Ramadorai. He has leadership qualities needed to ensure success in the global environment, including global aptitude, long-term perspective, skilled communication and literacy in technology. Under his leadership TCS ventured into new markets, including Europe, China and Latin America.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Wednesday, October 10, 2012

Reading the future of books and movies...

Most would agree that the art of this age are movies, and since decades writers have made little money from their work. So, is it time for writers to ruminate about the subject of their books in context to their scope of becoming entertaining masala films? Ravi Subramanian, author of books like I bought the Monk’s Ferrari, opines, “Movies are one more viable option for authors to make revenue and get noticed. In Hello, for instance, the only person who benefitted from the movie was Chetan Bhagat. The movie bombed, the producers lost money, its actors didn’t profit much. The real benefit in terms of profile, money, visibility, was Chetan Bhagat. I think writing books with an eye on the movies, is not a bad option because it gives you a fair bit of recognition. The movies go far and deep in this country. In India as they say, only two things sell – cricket and Bollywood. If you can write a book that can be adapted to a movie, or if you can tweak your book to adapt around for a movie, I think you can be fairly successful. Though movie writing itself doesn’t pay you too much.”

Cinema is a medium that has the entire nation hooked. So is it not high time authors tweak their Modus operandi? A strong relationship can be forged between films and books, what remains to be seen is how long this will take to blossom.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face


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Tuesday, October 09, 2012

Two wars, none the smarter...

Europe gloated during the meltdown, claiming it would be left untouched. The claims return to haunt a failing Europe

I945: Europe is completely devastated and in ruins after the Second World War. It is also facing the haunting spectre of Communism emanating from the Soviet Union. And yet, Western Europe rises from the ashes and emerges as a powerhouse of economic growth and all round prosperity. The resurgence is thanks largely to the Marshall Plan implemented by the United States.

1957: A handful of European nations come together and form the European Economic Community that seeks a ‘European’ perspective on global as well as local issues. This is the first tentative attempt by Europe to emerge out of the trans-Atlantic embrace with America. Many more nations join by 1967 and Europe starts dreaming of a unified market that can emerge more powerful than America.

1993: The European Union emerges as an actual rival of the United States with 500 million citizens and 30% of the world output. By now, Europe is frequently critical of America and its policies – political, strategic as well as economic. The criticism climaxes after the foolhardy George Bush decision to invade Iraq in 2003 and many start openly talking of EU as a rival to the US and euro as the rival to the dollar.

2008: In the early days after Lehman Brothers collapsed, there is much glee amongst many in Europe. Analysts and hacks point out how Europe has fostered a more ‘responsible’ model of capitalism while America has gone beyond the pale. In a parody that seems inconceivable now, European media praises banks for responsible lending and handling of assets.

That perverted euphoria lasts just a few days. Within a matter of days, it is revealed that toxic assets, bankruptcy, bad debts, collapse and contagion had as much to do with Europe as America. In fact, the ‘star’ economy of the continent Iceland, that had delivered blistering growth rates for a decade, became the first country to go completely bankrupt as a result of the meltdown. The government in Iceland has collapsed and protests have become the order of the day when people wake up from the numbing shock of seeing a ‘market’ disappear into oblivion.

In 1945, Europe was in ruins physically. By the end of 2009, it could be in ruins in financial terms. All the smart talk and looking down at Uncle Sam has vanished as the major economies of Europe start prostrating themselves. But this time, Uncle Sam itself is in such deep trouble that Europe cannot even dream of another Marshall Plan!

The recent events in France are a classic case of disconnect between reality and perceptions. The government still insists that the economy will actually grow despite the meltdown. But workers and citizens in France have a dramatically different viewpoint. In end January 2008, more than one million protestors took to the streets in Paris demanding higher wages and job protection. One shudders to think what will happen when the economy starts actually shrinking in 2009-10 and workers ‘actually’ start losing jobs by the thousands. Then there are the poignant and depressing tales from England about how investors have lost billions of pounds in savings because they gambled on Iceland. Many British citizens started parking their savings in Iceland based banks because they offered higher interest. All that has vanished and hundreds of thousands stare at poverty because their deposits were not guaranteed by any State.

Credit rating agencies are now waking up to the financial nightmare unfolding in Europe. They started by downgrading Spain, Greece, Portugal, Latvia and now Russia. Ireland is next in queue. And don’t be surprised if England follows suit because as an economy, it is even more leveraged than that of the United States. Overall, the European economy is slated to shrink by close to 3% in 2009 – something that has not happened since the Great Depression.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Monday, October 08, 2012

Creative capitalism in fact holds all the answers?

Muhammad Yunus, Nobel laureate, explains why creative capitalism in fact holds all the answers to improve human life, as told to B&E’s Neha Sarin

B&E : So are you trying to say that there is really no difference between Creative Capitalism and Corporate Social Responsibility?
MY: What actually is Corporate Social Responsibility?! It is something which started with the idea to help other people; but today, CSR has only become money to gain better public relations. You sponsor a cricket team, a rock concert, that’s CSR. The money goes to the R department and does not go to help poor people. CSR budget is now public relations money.

B&E What kind of government support did you get for your concept of Micro-credit and Grameen Bank? What are the kinds of hurdles you faced to achieve what you had dreamt of?
MY: There were so many hurdles. This was something new. So I knew it was very critical. The kind of words they used irritated me for a while. You had to give money to the poor women. You had to deal with them. You had to address unknown women. These were the hurdles we faced. Then there were legal hurdles too. Initially we did not have any law, which explained how you could lend money without any security. We did not have any banking structure like the government banking system had. When you took some money from the government, it puts some money in the bank @ p.a. interest of 5-6%. As a token of support the government deposits the money. But in our case, we did not even take money from the government. We took it from the borrowers. We take money from them and then lend them to the poor people. That’s how we have always worked, and worked well….

B&E: Aneel Karnani (a Strategic Management professor at Michigan University) criticises the whole idea and system of Micro-credit. He said that giving money to the ladies-folk creates all the problem due to the low level of education and women freedom in these societies. Do critics like him make your job more difficult?
MY: People come with different perceptions. If lending money to poor women make them laugh-at and criticised, let the people laugh. I don’t know what this gentleman sees wrong with it. But he may have some points. I don’t want to argue with that. But it does not convince me that he can lend money to the rich. See, in this world if you want to do something, people will criticise and say something.

B&E: Isn’t it risky that money is lent to poor people?
MY: That is not true at all. In Grameen Bank alone, we have a high rate of return of about 97-99%. Whether we work in India or Bangladesh or Somalia or Costa Rica, it does not matter. High rate of return has impressed people about micro-credit systems.

B&E: For how many people did you actually stand as a guarantor? And what was the amount you lent in total?
MY: There were almost 20,000 borrowers to begin with in the first place. And the total amount that was borrowed amounted to a massive 20 million taka (an average of 1,000 taka per head)!

B&E: With such a huge risk potential, didn’t your strategy backfire or at least weren’t you hesitant to some extent considering the possible negative outcomes?
MY: See, we trust people. It is a continuous system. We do well with them. So they come to us again. Then they stay back with us. We remind them. It is not a one shot thing. So there is no such room of doubt.

B&E: Which was the bank that actually helped you in the end?
MY: The bank is called Janata Bank. It is a government-owned bank and sits in the campus of the University where I teach.

B&E: So what kind of response are you receiving from the market today ?
MY: Yes, we don’t give advertisements in any form of media or newspaper. Yes if you talk about word of mouth we do. We write and people read about it everywhere. Through this, the whole world came to know. Thus the word spreads and naturally so. And about the response, the results are there to prove that it has all been really well accepted. Our model of CSR has done wonders; and that is what real socially responsible capitalistic business should learn to do. No business grows forever without the growth of the entire society and it’s time the global capitalists learn the truth…


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, October 06, 2012

How 2G is India’s First Pro-Poor Scam

The chatterati and the pundits seem to be behaving as if the 2G scam marks the end of the Indian civilization. There is passionate agonizing over how the carpetbaggers of crony capitalism have looted more than Rs 1.7 lakh crore (almost $40 billion) of potential revenue due to the Indian exchequer. There are inevitable and familiar laments about how the money could have been used to build more schools, health care centres et al for poor Indians (the real scam being that enough schools and health care centers for the poor have not been built even 63 years after independence; 54 years of Nehruvian socialism; 39 years of Garibi Hatao and 20 years of economic reforms).

Forgive me for being cynical; but I think the poor of India would actually cheer and welcome 2G style scams because they have actually given something worthwhile to the poor. Look at it this way: till former Minister A. Raja started doling out telecom licenses like prasad in a crowded temple, a handful of telecom operators were making a killing and the really poor could not still afford the tariffs charged by them. Post the monumental 2G scam, telecom tariffs actually dropped to a paisa a second and even lower. More importantly, intense competition forced telecom operators – both old and new – to look beyond saturated urban markets. The fact is: most of the 300 odd million new subscribers since 2008 live in small towns and rural India. For them, the power of mobile connectivity at often Rs.100 a month is literally a dream come true. Also, do not forget how smart entrepreneurs have grabbed this exploding market by importing Chinese handsets. Most of these models are in sync with this new market: they offer long battery (upto 72 hours, even 72 days!) life to people for whom long and unending power cuts are an unending reality.

Ask these poor Indians about the moral, intellectual and existential issues raised by the 2G scam and they will laugh at you. And justifiably. For more than 60 years, they have helplessly witnessed false promise after promise and scam after scam without any material difference to their wretched lives. Now, scam or not, they have got something concrete and worthwhile. As far as they are concerned, the pundits can go on debating to kingdom come.

And don’t underestimate the poor or their ability to figure out what is good for them. The perpetually scam tainted MRNEGA is another example of a pro-poor scam. Everybody knows corrupt politicians, bureaucrats and contractors are still brazenly using NREGA funds to line their pockets. And yet the poor in rural India consider the scheme to be a divine blessing. Their logic? Earlier, they used to get nothing; now they at least get something. Raving and ranting and railing against NREGA corruption is not going to change that.

The fact is: Indira Gandhi was dead right when she categorized corruption as a global phenomenon. You must be living in cuckoo land if you think there is no corruption in countries like Japan, USA, UK et al. The best a society can do is miniminize corruption; it can never be eliminated.


Source : IIPM Editorial, 2012.

For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Saturday, September 08, 2012

Ready for a divine holiday?

In the hills of Tirupati, nature and man have collaborated to proffer the traveller more than just a holy communion

It was still dark outside. Lord Balaji was being awakened. Slokas were being recited. Tightly packed among the throngs of people offering their orisons, I tried to get a peak of the devotees who were rolling on the ground around the temple, slowly chanting the Lord’s name. Some minutes later we all shuffled in a single file along a long path. In no time I was face to face with the imposing and awe-inspiring idol of Lord Balaji. Five moments later, before I could entirely take in the magnificence before me, I was asked to move along. Roughly 60,000 people come for a darshan of Lord Venkateswara/ Lord Balaji every day to this ancient temple at Tirumala. I’d travelled in a car for some 150 kms from Chennai to reach; pilgrims often abandon their vehicles and climb roughly 4000 steps for a darshan, for their prayers to be fulfilled by Lord Balaji. I had witnessed the Suprabhatam (awakening the Lord) that morning; similar sevas are conducted through the day, where the Lord is given a bath, the Lord is given breakfast, to finally when around 10pm the Lord is put to bed.

3200ft above sea level, the Tirumala Hill comprises seven hills. On the seventh hill is the sacred temple of Sri Venkateswara. Legend has it that Thondaiman, the ruler of Thondaimandalam (present-day Kanchipuram), built the temple after Lord Vishnu appeared in his dreams. Its current grandeur and richness is primarily thanks to the competition among rulers of South Indian dynasties, be it the Pallavas of Kanchipuram (9th century AD), the Cholas of Thanjavur (10 AD), the Pandyas of Madurai, or the kings and chieftains of Vijayanagar (14th-15th century AD), who all attempted to out-do each other in their offerings to the Lord. This tradition especially gained strength during the reign of the Vijayanagar dynasty, and to this day there are people who offer bags filled with jewels to the Lord.

Another offering especially associated with this temple is that of hair. Both men and women completely shave their head as a gesture of sacrifice in return for fulfilment of their prayers or as penance. The temple earns in millions annually through the sale of tonnes of devotees’ locks! Thus through receiving the offerings of hair and people’s wealth, the temple has built a reputation of being the richest temple in the world.


Source : IIPM Editorial, 2012.
For More IIPM Info, Visit below mentioned IIPM articles.
 
IIPM : The B-School with a Human Face
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Thursday, August 30, 2012

“We often work without competition”

In an exclusive with virat bahri, Aricent CEO Sudip Nandy talks about how focus has been one of Aricent’s key strengths and how they will leverage it to enhance value proposition and growth prospects for the future
 It’s been over 4 years since Aricent was set up as a conglomeration of different entities post the acquisition of a majority stake by PE giants KKR and Sequoia Capital. The company has seen an impressive success rate, with revenues at $484 million in FY 2009-10 (from $238 million in FY 2005-06, a CAGR of 19.4%). The company’s business model has several unique hues to it; starting from the exclusive focus on telecom to the multiple client engagement model to the intense focus on design as well as R&D. In this exclusive with B&E, Aricent CEO Sudip Nandy discusses the company’s plans to grow in the telecom space and how the sector is expected to evolve further.

B&E: Tell us about how Aricent evolved as a pure play IT company in the telecom vertical. Do you feel it remains a compelling strategy?
Sudip Nandy (SN): Different parts of Aricent have got different ages, some of the parts are very old. For instance, the larger part of the building where we are sitting was one of the entities called Hughes Software Systems. These were independent companies in the 1980s and 90s. Hughes was listed on the BSE. In 2004, Flextronics acquired Hughes Software Systems in India and made it a part of Flextronics Software Systems in India. They continued buying a few more companies in India. In 2006, Flextronics became a part owner, and a significant investment was brought in by PE KKR and Seqouia Capital. At that point, we became Aricent. It just so happened that the larger entity called Hughes Software Systems and so many of the other entities that got acquired under it, were focussed in some way or the other on the communication eco system. There was a synergy in what was there together. The decision was taken that we should focus on the telecom and communications area since the feeling was that this is going to be a very very high growth area. Three years on, we find that was highly prescient in terms of where we are today. It is not only high growing; it is going to find its way into all parts of life and industries. It’s almost like internet in the mid-1990s. Communication in the next ten years is going to be embedded into everything. We think that with the focus we have, we are able to a) better predict what the future could bring b) invest ahead of the curve and c) when required beat out competition but often work without competition on our own work with clients. Over the last four to five years, we have been growing well and have been able to ride the crest and the trough.

B&E: You have had a long experience at Wipro. What motivated you to make the shift to Aricent?
SN: I have had a more broad experience in technology from 1989 onwards, with a little under 26 years in Wipro. And this is the first change; about an year and a half back I joined Aricent. And at Wipro, Aricent was our competition number 1! And when we talk about Aricent in comparison with other IT companies in India there are some unique aspects; besides the fact that we are sharply focussed. Companies are struggling and are at different levels of readiness in terms of the kind of consulting they have created. For us, around 20% of the revenue comes from situations which is really consulting; where the revenue per employee would be in the $300,000 per employee range; where in normal outsourcing and services business, it would be in the $50,000 per employee range. Second interesting thing is that the model that we have is what we call rightshoring. Around 82% of our people in US and Europe are actually local people. For other companies, the figure is around 20% and the rest are expatriates from India. We are more strategic for customers here whereas in my previous job, I would say we were probably more tactical for the customers. More positive was the sense of what is possible in Aricent. We had an innovation piece that was chugging along and doing very well; and then there was this engineering piece, and there was also a piece which was products and licences. All three had a significant communication component but it was not woven together. If you put the missing piece of strategy, it becomes a very compelling and complete story. Secondly I understood the business very well as we were competing with Aricent. The possibility of creating a new class of company was a motivating factor.

B&E: With respect to your co-creation strategy with clients, what are the different models of revenue you employ and how is it working out?
SN: We do co-creation because the work we are doing is very strategic. Often when services companies work with customers, it’s more of a play on the cost side, whereas our work is more to do with creating new and enhanced revenue streams. Most people go and talk to a CIO and get business, but with a CMO it is a very different discussion and value proposition. Even if it is not licensing of something we have created, we have different models – fixed price model, fixed price + sharing of rewards, capped royalties, et al. We haven’t made it a huge part of our business yet but it could over time become a huge part of our revenue. In situations like cost saving, clients want to share the risk and to keep you happy, they give a bit of a reward. With co-creation, they want to share the reward. We don’t own the IP in these cases; the customer owns it. We have not just people doing delivery work but also project management for the customer and defining their product road map. They have their eyes and ears on the ground to understand what competition is doing and how we can be a step ahead. Our people also work for customers on the strategy front. This is very different from a purely product engagement.


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Monday, August 27, 2012

Can they unravel this funds mystery?

Leave aside regulatory changes, the Indian mutual fund industry today faces a number of issues which are characterized by lack of investor awareness, low penetration levels, high dependence on corporate sector and spiraling cost of operations. Structural changes in business models are what AMCs now require if they want to sustain profitability by Mona Mehta

When viewed from over 25,000 feet above the ground, the pace of change in Indian asset management industry appears almost miniscule. Year after year, it seems, industry turn out the same old products with growth showing no superlative jump. But that’s only the bird’s eye view. Drill deeper, and a very different picture emerges – one in which a handful of mighty forces are spurring some dramatic changes, in an industry which is perhaps considered dormant till date.

In fact, apart from dramatic stock market performance, the year gone by was the year of reforms for mutual funds (MFs) in India. The key changes included elimination of entry and exit loads on purchase of schemes, the government allowing MFs to be traded on the bourses, et al. While some were in favour of investors, others pampered the industry. Whatever the situation may have been at the start of 2009, most investors definitely seemed relaxed and happy as the year ended. But the question stayed – how will the year 2010 unfold for this beleaguered industry which is still adjusting to the regulatory changes? Will the promise of growth sustain in the near future? Well, it is already halfway through 2010, and the questions still remain unanswered.

Despite clocking growth rates that are amongst the highest in the world, Indian MF industry continues to be a very small market comprising just 0.32% share of the global assets under management (AUM) of over $20 trillion. Though the ratio of AUM to India’s GDP has gradually increased from 6% in 2005 to 11% in 2009, it’s still significantly lower than the ratio in developed countries, where AUM accounts for 20-70% of the GDP. Even a recently released report by PricewaterhouseCoopers (Indian Mutual Fund Industry – Towards 2015) states that although the Indian mutual fund industry has weathered the financial crisis with AUMs posting a year-on-year growth of 47% in FY2009-10, retail participation has witnessed just a marginal increase to 26.6% from 21.3% posted during the previous corresponding period. In fact, the net sales of Equity and Balanced funds in FY2009-10 have been one of the lowest in recent years. Further, if statistics are something to go by, AUM as a percentage of GDP is still less than 5% in India as compared to 70% in the US, 61% in France and 37% in Brazil. This obviously means that low penetration level is a bottleneck in spurring industry growth.

What’s more? Since the crisis of October 2008, the domestic fund market has seen the steepest fall. As per a recent data from the Association of Mutual Funds in India (AMFI), the industry’s average AUM plunged 15.89%. While UTI MF saw the sharpest fall of 18%, ICICI MF too witnessed a decline of 15.86%. Experts say this was mainly owing to the overall liquidity crisis and outflows due to advance tax and 3G auction payments. Telecom companies sucked over Rs.1 trillion from the system.


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Wednesday, August 22, 2012

India’s GDP growth is all set to accelerate further

Even though the uncertain financial situation in Europe and the Middle East warrants caution, there are stll several reasons for optimism on the domestic front

In line with regional trends, India’s economy surged in the March quarter. GDP growth accelerated to 8.6% y-o-y, the fastest since 2007 and around India’s trend rate. The drivers of growth were similar to the rest of Asia. From an expenditure perspective, exports and investment fuelled growth as government consumption faded. On an industry basis, the main growth drivers were manufacturing, construction and services related to retail trade, financial markets, transportation and businesses.

While India’s y-o-y growth rate was slower than most East Asian and ASEAN economies, in many ways it was more impressive. Unlike other economies, India’s GDP growth was not inflated by a low-base effect, as the economy managed to maintain steady growth throughout the global recession. India is the only Asian economy where consumer price inflation has spiked, which has weighed heavily on production growth of nondurable consumer goods. Growth was also dragged down by weakness in the agricultural sector, which employs around half the workforce and has strong linkages with the broader economy.

One of the bright spots of the first quarter national accounts was surging investment, which grew at the fastest pace since the first quarter of 2006. From 2007 to 2009, weakening foreign capital flows and falling business confidence weighed on private investment. But following several years of subdued investment and the recent spurt in demand, capacity utilisation has risen. With business confidence and foreign capital flows up sharply over the past year, private investment has surged.

Encouragingly, strong growth in investment spending looks to carry over into the June quarter. Loan demand appears to have risen sharply as surplus funds in the banking system have rapidly fallen in the past two months. Credit growth has picked up, while purchasing managers’ indices indicate new orders are rising at a strong pace.


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Monday, August 20, 2012

Is recession over (yes/no/maybe)?

The IIPM Think Tank analyses the five largest economies (excl. China) – US, Japan, Germany, France, UK

President Barack Obama recently applauded a government report that indicated the American economy’s rise by 3.2% in the first quarter this year, saying, “This means that our economy as a whole is in a much better place than it was a year ago”. It was the third straight quarterly expansion, even though it was weaker than the 5.6% gain in Q4 2009.

The US Commerce Department confirmed spending rose by 0.6% in March 2010, after a revised 0.5% rise in February. In March, spending adjusted for inflation increased by 0.5% after a similar gain in February. Personal income grew by 0.3% following a 0.1% rise in the month prior, whereas real disposable income expanded by 0.2%. In the spate of increased spending, savings fell at an annual rate of $303.9 billion, the lowest since September 2008. In the 12 months ending March 2010, personal consumption expenditure price index excluding food and energy rose by 1.3%. Thomson Reuters’ Small Business Lending Index (measuring overall level of financing) specified a rise of 4% in March, the highest since October 2007.

The US Labor Department’s monthly snapshot showed US has added jobs for 4 consecutive months, peaking at 290,000 jobs in April, highest in the last 4 years! A contradictory report shows that the unemployment rate has crawled up to 9.9% from 9.7% in March. But there’s a valid reason – the new found confidence has led to a significant increase in the number of people looking for jobs again, who had previously given up. As per government figures, 195,000 returned to work force this year in April. Average work-week was inching to 34.1 hours and hourly wages were also up by 1 cent in April.


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Monday, August 13, 2012

Living with a flawed destiny

Investments in defence at the cost of social good are unpardonable

Global annual military expenditure stood at around $1.46 trillion, as per a report in 2009. The top 15 countries with the highest military expenditure spent around 81.4% of the total. It is estimated that the world needs only about $260 billion annually for the next 10 years to eradicate all the basic malaise; be it poverty, insufficient healthcare, lack of shelter and clean water, illiteracy and sustainable energy. Given that kind of a comparison, there’s a clear paradox that countries are facing; are the investments towards defence supposed to only protect the ‘advantaged’ well earning masses?

US alone has spent over $5.5 trillion on nuclear arms till date, and has a current stock of over 10,000 nuclear weapons. US spends $35 billion a year on defence (or $96 million a day). Similarly, France has spent not less than $1.5 trillion on nuclear arms. USSR has spent $3.5 trillion on nuclear arms.


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