Monday, December 31, 2007

CMA Canada has worked to build a strong, professional relationship with the Government of Canada

Cost management in the most complex organisation: the government

The largest and the most complex organisation in Canada is the Government of Canada, says Mr Richard Monk, Chairman, CMA (Certified Management Accountants) Canada. “It makes over $200 billion in expenditures annually, manages a workforce of some 4,50,000 people, and provides some 1,600 different programs and services across Canada and around the globe.”
Such sheer size and complexity create significant challenges to comptrollership, financial management and accountability, he adds, during the course of a recent e-mail interaction with Business Line.

CMA has ‘more than 37,000 CMAs and 10,000 CMA students,’ as informs. And as the new chief of the body, when Mr Monk spoke of his priorities in the latest issue of , first came the aligning of ‘major governance initiatives,’ and second, continuing ‘to cultivate relationships with international associations with similar values and services to those of CMA Canada.’

The most common form of cartels is ‘price-fixing’

Cartelist behaviour is difficult to detect

A few days ago, the Monopolies and Restrictive Trade Practices Commission (MRTPC) found 44 cement companies guilty of cartelisation under the aegis of Cement Manufacturer’s Association (CMA) during the period February to April 1990. “Even though it took 17 years for the MRTPC to come to a decision on an old case of the pernicious cement cartel in India of 1990s, it is a case of better late than never,” says Mr Pradeep S. Mehta, who recently published Competition & Regulation in India, 2007 ( ).

“Alas, the MRTP Act, 1969 does not have the teeth to do anything other than asking the cartel to cease and desist — in simple terms, to stop them from doing so,” rues Mr Mehta. The larger issue, according to him, is of the recent cartelisation in cement prices, fuelled by the economic boom in the country. “That case is yet to come up, and considering how slow the inquiry process moves, the same may also get dated.”

Sunday, December 23, 2007

Pure fantasy is the extreme argument that markets are or soon will be completely integrated

Don’t get carried away by globaloney

Redraw the map of the world to reflect not land area but the extent of actual economic interactions, suggests Mr Pankaj Ghemawat, author of Redefining Global Strategy ( ).

“It is the single device I have found most useful in working with more than one government,” he says, during a recent e-mail interaction with Business Line.

“Redraw, for example, in terms of trade or investment with a particular country, or potential economic interactions such as GDP (gross domestic product) divided by some composite measure of distance.”

Monday, December 17, 2007

The Eee PC is based on the ‘easy’ concept

Gee, it’s ‘Eee’

The most valuable thing in Andrew Tsui’s bag, when we recently met in eWorld premises, was a brand-new Eee PC. “Yet to be launched in India,” he said, opening what looked like a shrunken version of a laptop, weighing less than a kg.

Only weeks earlier, the product had hit the shelves in Taiwan, Asus’ home turf. “The first 150 or so units were bought by our rivals to dis-assemble and find out what we have done,” reminisced Tsui, over a leisurely South Indian lunch in Chennai. “At least for the next nine months we don’t expect any competition to our Eee PC.”

The (impending) Direct Tax Code is intended to simplify the tax laws insofar as income-tax is concerned.

We need to mature in tax law admin

Tax laws in many countries tend to be complex, but with India beginning to occupy an increasingly important place on the world stage, the benchmark for comparison has to be changed, says Mr Ketan Dalal , Executive Director, PricewaterhouseCoopers (PwC), Mumbai.

“India will increasingly be compared, not against other developing countries, as in the past, but with the dominant and mature economies,” he adds, during an exclusive interaction with Business Line, over the phone and e-mail, shortly after the release of PwC’s ‘2007 Tax Risks in India survey’.

Friday, December 14, 2007

The “right of first refusal” clause

Impact of Yuvraj case on sports talent market

Yuvraj Singh is having a ball these days, both on and off the field. However, with the litigation process still in progress, it looks like he may have to endure the suspense of what the remaining deliveries in the over have to offer.

As you may be aware, Yuvraj’s former sport marketing agency Percept dragged him to court in a bid to match a competitor’s offer for the budding cricketer as their association was coming to an end. The Mumbai High Court’s verdict was in the cricketer’s favour.

Basically, Percept wanted to enforce a ‘right of first refusal’ (RoFR) but was not allowed to do so. The Court held that the post-expiration RoFR clause of a talent management contract between Percept Talent Management and Yuvraj Singh was unenforceable.

India is attractive to foreign companies because of sustained high growth and improved market access

Broad consensus needed on policy direction

On December 7 another winter session of Parliament ended with the growing divide between the ruling coalition and the Left showing no palpable signs of improvement. While none of this immediately undermines India’s attractiveness to f oreign companies because of sustained high growth and improved market access, what impact can lack of accord in policy have India? A broad consensus is very important, says Mr Christian Murck, CEO of global consulting Apco Worldwide (Asia).

As someone whose experience in Asia spans 25 years, Mr Murck gives his candid views in an exclusive interaction with Business Line on the Indian economy, the potholes lying on the way of India and China to becoming economic superpowers and why both the nations need to know each other before working as partners.
Excerpts from the interview, carried out first over the phone and subsequently through e-mail.

Monday, December 10, 2007

A truly parallel computer would have simultaneity built into its very nature.

‘Quantum’ jump

Quantum computers and quantum information technology remain in a pioneering stage, says Vishal Sahni, author of Quantum Computing ( “Currently, there are obstacles to be surmounted, before we have the knowledge to thrust quantum computers up to their rightful position as the fastest computational machines in existence.”

Quantum systems possess immense computational power due to the startling property of quantum bits (or qubits) that they can exist in a superposition of two or more states at once, thereby opening up immense possibilities such as quantum parallelism, quantum entanglement, teleportation, superdense coding and so on, he explains, during the course of a recent e-mail interview with eWorld.

“The scale of quantum physical phenomena is so vast, that even a super computer built on von Neumann style computing cannot realistically model quantum physics at the atomic and sub-atomic level. On the other hand, quantum computers, which mimic the quantum physics themselves, are capable of vast parallelism and could theoretically simulate such phenomena.”
Excerpts from the interview.

One should be able to work in any team or take the best out of it.

Myths about Indian Civil Services

Civil services all over the world are about administration. “The sublimity of administration consists in knowing the proper degree of power that should be exerted on different occasions,” a French philosopher once said. With such power at hand and the sheer influence it can have, today Indian Civil Services should have been the most sought-after position. But is it still attracting the kind of talent it used to?

To find an answer, Business Line engaged former Secretary to the Government of India, Dr G. Sundaram who served under various capacities in the Ministries of Defence and Environment.
He was one of the first to suggest introduction of VAT (value-added tax) in the country way back in 1986. Like all brilliant students, civil services was then a natural progression for Mr Sundaram who, after obtaining a Masters Degree in Economics from the University of Madras in 1958 and teaching Economics in the Madras Christian College, joined the services in 1962.

Operating margins convey the efficiency of operation of the company and thereby influence its profitability

Due diligence, by the dozen

Before you invest in a company, there are at least a dozen factors to consider, says Mr Sandeep Shenoy, Strategist, PINC Research, Mumbai. “Whenever an investor forays into stock markets, he is faced with more questions than answers, and feels intimidated by the sheer scale and dynamics of data around him,” he adds.

To help arrive at a proper decision, he emphasises the need to take into account aspects about a company’s working, the financial and business environment. The 12 factors, according to Mr Shenoy, are as follows: Addressable markets, business model, promoter ability, operating margins, growth or scaling up, operating leverage, asset sweating, debt equity ratio, cash flows, dividend and taxes, value proposition, and cyclicality and dependency.

Excerpts from the interview.

'Hydro is the best suited for us since its operating cost is next to nothing and it is renewable'

11 myths that make nuclear deal unclear

Intense debates have been on about the nuke deal at the political level, generating possibly more heat than light. “Many half-truths and myths are doing their rounds,” frets Mr Shivanand Kanavi, Vice-President (Special Projects), Tata Consultancy Services, New Delhi.

A theoretical physicist from IIT Kanpur and Northeastern University, Boston, he has carried out research at IIT Bombay. After a teaching and academic career, Mr Kanavi became an economic consultant and later turned to business journalism, before joining TCS.
Author of books such as Sand to Silicon: The amazing story of digital technology (Rupa & Co. 2006) and Research by Design-Innovation and TCS (2007), Mr Kanavi is currently writing a book on India’s nuclear programme.

The sovereign rating pertains to both local and foreign currency debt

Delving into Pakistan's `negative' rating

Pakistan is at `a turning point,' recognises a recent report from Standard & Poor's Ratings Services (S&P). "A rapid succession of events over the past eight months has led to considerable uncertainty about the fate of the Musharraf administration, which has governed Pakistan since October 1999," it begins, sombrely.

"The relative certainty of an authoritarian administration strongly focused on the economy and with a generally good policy mix will likely give way to an elected government whose policy orientation, cohesion, and efficiency have yet to be revealed and tested," continues the November 27-dated report.

About a month ago, soon after Pervez Musharraf declared a state of emergency in Pakistan, S&P revised the outlook on the sovereign rating to `negative', stating that the action would `prolong and exacerbate the uncertainties, potentially putting downward pressure on the ratings if fiscal and external balances deteriorate.'


Marketing in domestic formulations has become a competitive function

M&A the main driver for value unlocking in Indian pharma

‘Generics’ is the old story in the great Indian pharmaceutical space. The new kids on the block are ‘contract research and manufacturing services’ (CRAMS) providers.

The emphasis is on future leaders rather than established captains, and the rapid expansion plans charted by these emerging breeds make them a perfect fit for private equity players, who are hot on heels to get their slice of the growing pie.

Naturally, funding is less of an issue for these smaller companies, says Mr Navroz Mahudawala, Associate Director, Transaction Advisory Service of Ernst & Young (E&Y).

Tuesday, December 4, 2007

'Teaching and learning must be led by the learning needs of the children, not by what technology is available'

Internet as teacher support

Internet-aided teaching has the potential to improve teaching and learning more than any other recent innovation, declares Alan Pritchard, author of Effective Teaching With Internet Technologies (

“If you get it right it’s amazing how the children respond… even those who you wouldn’t expect it from can surprise you with what they do… what they end up producing and what they learn,” reads a teacher’s quote that Alan cites in his book.
He says that the level of motivation in the class can be higher when the communication capabilities of the Net are used, especially if the communication is synchronous — happening in real time.

'A focused approach and clarity of career choices - the traits in an employee'

‘We seek self-achievers’

“Inducing transformation in people management may have caused some short-term unrest and disruption, but the gains we began reaping have masked this and continue to give us a competitive edge,” says Srinivas Kandula, Global Head-HR, iGATE Global Solutions, commenting on the price the company had to pay while ascending to the 3rd rank, from the previous year’s 29th position, in the ‘DQ-IDC 20 Best IT Employers Survey 2007’.
For the dramatic improvement in the ranking, Kandula gives credit to HR (human resource) policy changes, employee friendly initiatives and the adoption of a ‘German’ model in the company.
“The good practices of the past and the integrated people management model in the last one year led us to the third spot,” he adds, during the course of an e-mail interaction with The New Manager. Excerpts from the interview:

Feedback is the breakfast of champions

8 words to banish from your vocabulary

Eight words and phrases that Justin Herald advises the young to banish from their minds are: “Failure, can’t, rejection, impossible, never, victim, hard done by, and but.”

Instead, make a special place for these eight in your vocabulary, he says: “I can, I will, passion, persist, break through, possible, why not, and attitude.”
Justin should know. It was ‘attitude’ that transformed him. At the age of 25, with only $50 to his name, he set about changing the course of his life. ‘Justin created Attitude Inc, a clothing brand that became an international licensing success that turned over in excess of $20 million per year. His website receives over 30,000 hits a day.’

The trickle-down effect of telecom in India is beyond measure

Four important factors in spectrum allocation

Spectrum issue is hot. Different battles are simultaneously on, be they between the public and the private sector telecom companies, or CDMA (code division multiple access) and GSM (global system for mobile communications) , pitching for ‘level-playing’. A committee set up to suggest norms for spectrum allocation is to meet on November 26 and 30.

“There are at least four factors that have a significant impact with regard to spectrum allocation,” says Ms Sairee Chahal, founder of the New Delhi-based SAITA Consulting. “Infrastructure priority, trickle-down effect of telecom, regulatory transparency, and eye on the future,” she lists, during the course of an e-mail interaction with Business Line.
Excerpts from the interview.

Friday, November 30, 2007

'Power Grid initiated the bidding process as the CTU for the IPTC project'

Private participation in power transmission

Power generation and distribution have always garnered a greater share of news, compared to transmission, says Mr Tanmoy Mondal of Ernst & Young. “If the electricity sector has to grow with anefficient pricing mechanism, as conceived in the Electricity Act, 2003, ‘power transmission’ needs investment to match that for generation and distribution,” he adds, during the course of a recent e-mail interaction with Business Line.

A PGDM (IIM-Calcutta) and B.Tech (IIT-Kharagpur), Mr Mondal works with the Business Advisory Services of Ernst & Young. He has advised several clients in the energy sectors in India and abroad on matters related to process reengineering, reform and restructuring, financial modelling, policy and regulations, and private participation.

Excerpts from the interview:

'Analysts have to be careful in valuing a brand'

Comparative brand valuation across industries

“A brand valuation exercise in India is typically a more subjective exercise compared to a business valuation exercise in India,” says Mr Sanjiv Agrawal, Partner and National Director, Valuation & Business Modelling services, Ernst & Young. “This is primarily due to the limited availability of data required to apply the usual methods of brand valuation,” he reasons, during the course of a recent e-mail interaction with Business Line.

Mr Agrawal has through his 20-year career conducted valuations for/of companies across various sectors, including metals, consumer goods and retailing, media and entertainment, software, telecom, and financial services.

Excerpts from the interview:

Monday, November 26, 2007

What IT requires is industrialisation

Shun `culture of waste

What are the vulnerabilities of the Indian IT industry, and what can be the counter measures?
Pat comes the reply from Rahul Patwardhan (Pat), CEO Global Service Delivery (GSD) India and Director - Application Services, LogicaCMG, thus: "The Indian IT (information technology) industry is currently resting on its laurels. It has to think ahead and move away from the current unipolar thinking."

Indian IT companies need to look internal to their business and see how they can reduce manpower on the bench (currently at average of 30 per cent), adds Pat, during the course of a rapid telephonic conversation with eWorld recently. "The industry needs to strive for utilisation that is similar to the manufacturing sector. IT seems to have gotten used to a `culture of waste' and productivity has taken a backseat," he rues.

Question that arises is how does one interpret the term `total turnover of the business' in the absence of clarity.

On how ambiguity robs the SEZ-sop of its sizzle

Our tax law generously speaks of a 100 per cent tax holiday, but it may turn out to be a mere theoretical benefit, fears Mr Bharat Varadachari, Tax Partner, Ernst & Young. "The issue is with the formula for computing income-tax deduction with respect to the profits of an SEZ (Special Economic Zone) unit under Section 10AA of the Income-Tax (I-T) Act, 1961," he explains, in the course of a recent e-mail interaction with Business Line. "Based on the plain text of the formula, it appears that companies that have established SEZ units in the same legal entity that houses other businesses/units may not be able to fully realise the income-tax deduction," Mr Varadachari elaborates. "If this were the result, it means that one of the stated fundamental objectives of the SEZ policy framework, which seeks to grant tax-free status to exporters, would stand violated."

Excerpts from the interview:

The largest complications arise at the technology level

Spectre of competition - sacrifice at the spectrum altar?

Any decision on spectrum should not sacrifice the long-term interest in favour of the immediate benefits, says Mr Bivek Anand, Associate Director, KPMG Advisory Services. Talking to Business Line about the ramifications of the currently strumming spectrum debate in the telecom space, Mr Anand insists that the regulator must guard against diluting the index of competition in the industry, in the long run, by acting in the interest of short-term benefit to the consumer.

“After all, a sustained and healthy competition among the various players is the key to enduring benefits to the consumer,” he adds, in the course of a subsequent e-mail interaction. “Any decision, which leads to a significantly higher competitiveness of any one player, while resulting in immediate benefits to consumers (in terms of more services, higher QoS or quality of service, lower tariff), will be detrimental to the industry’s competitiveness in the long run.”

Excerpts from the interview.

The financialisation of the economy and information control go hand in hand

Steer clear of ‘mass market investing’

Though there is nothing inherently antisocial about genuinely free markets, you should look at the language of politics and the markets with suspicion and examine things for yourself, cautions Lila Rajiva, co-author of Mobs, Messiahs, and Markets (Wiley, 2007).

“If ethical and productive individuals produce ethical and productive societies, then we all have much more power than we think,” she adds, on a reassuring note, during the course of a recent e-mail interaction with Business Line.

Excerpts from the interview:

Airlines typically increase surcharges as and when ATF prices rise

Hedging, the only logical option for airlines to control ATF cost

In Greek mythology, you’d read about King Minos who held Icarus and his father, Daedalus, captive in the Labyrinth, a prison. “The Labyrinth’s original purpose was intended to hold the horrible creature, the Minotaur, a bea st that was a product of one of the King’s mistress’s affairs with a bull,” informs Wikipedia.

To escape from the prison, “Daedalus fashioned a pair of wings for himself and his son, made of feathers and wax…” In the current story of Indian aviation, the Labyrinth may well be the high cost of fuel, even as the industry would like to fly high.

Tuesday, November 20, 2007

'A quarter million dollar investment return in less than a quarter!'

‘Speech expands reach’

In the world according to C. Mohan Ram, you ‘just talk’.
Simply talk, “Summa Pesunga”, “Bas Baath Keejiye” – that’s what he wants to promote through LatticeBridge Infotech Pvt Ltd (LB), Chennai, a company he founded in 2002.

“Speech Expands Reach,” declares Ram. He talks about reaching more people, more markets, and more profit, all through speech, while recently interacting with eWorld over lunch.
“We are also working on something like simple ‘tags’ with only speaker and mic and connectivity to a central sever (with ‘personal assistant’ for everyone) to do connections, transactions and search for information, etc, simply speaking through this simple device,” describes Ram about how newer devices, such as a minimal mobile, can help overcome the shortcomings of low PC penetration.

'Experience from mature markets suggests that MNP is unlikely to be a resounding success in the short term'

Will number portability port profits out of telcos?

We live in ‘interesting times,’ observes Mr Prashant Singhal, telecom industry leader in Ernst and Young (E&Y), applying a Chinese saying to the ‘number portability’ announcement.
“Interesting times, but good or bad?” you may wonder. “Either interpretation holds up well when applied to the recent policy statement on number portability by the Department of Telecom,” answers Mr Singhal, in an e-mail inter acion with Business Line.
“This exciting development in the telecom sector is bound to open new vistas for growth. It can be seen as a pragmatic policy move consistent with the movement in technology. But it might end up being a drain on the telcos’ profit sheets.”

Excerpts from the interview.

Stress management

Getting a handle on stress

There is no such thing as a single technique that fixes stress, says Dr Wolfgang Linden, the author of Stress Management: From Basic Science to Better Practice (

“Fixing” stress responses makes little sense if the causes are unknown and remain unaltered, he adds.“Stress needs to be understood as a process of individuals interacting with their environment. And it doesn’t help to push techniques if the life context of the individual is not understood,” emphasises Dr Linden, during the course of a recent e-mail interaction with The New Manager .

‘Welcome to the Linden Lab,’ greets the home page of the Behavioural Cardiology Laboratory, Department of Psychology, University of British Columbia, Vancouver, Canada ( Research conducted in the lab, one learns, “is based on the firm belief that psychological distress can affect physical health.”

What can be tackled easier, however, is the unintentional evasion…

Is tech-driven compliance lending fizz to taxes?

How do you reconcile these numbers: Economic engine growing at 10 per cent and direct tax kitty swelling at 40 per cent? “Clearly the result of increased compliance,” says Mr Manasvi Srivastava , Vice-President Operations in BMR Managed Services, New Delhi.

“Since the growth numbers of taxes are so out of sync with growth in economy and the extra collection is indicative of increased compliance, the question of estimating the residual non-compliance assumes importance,” he adds, in the course of a recent e-mail interaction with Business Line.

“While the Finance Minister and revenue officials have expressed concern at the low growth in Central Excise revenue, the conclusions arising out of the galloping rate of growth in direct taxes as well as service tax should not escape our study.”

Thursday, November 15, 2007

'Maintaining balance between business opportunity in India and business opportunities overseas is a key challenge'

Risk management can be a competitive weapon in financial services
Good credit management in financial services is all about data and covers the entire value chain of credit origination, credit decision and credit management, says Mr Ashwani Puri, executive director, Pr icewaterhouseCoopers.
“The Basel II guidelines also require the use of internal rating models and credit risk models, which again are dependent on historical and portfolio data,” he adds, during a recent e-mail interaction with Business Line.
“Initiatives like CIBIL (Credit Information Bureau India Ltd), use of credit scoring models and reduced reliance on judgment would go a long way towards improving the credit origination qualities.”
Excerpts from the interview:

'People do differ in how self-important, conceited, egocentric they are'

‘The best and most lasting changes are voluntary’
Human beings have great potentials for good and evil, says Mr Howard Gardner , the Hobbs Professor of Cognition and Education at the Harvard Graduate School of Education.
“We have Slobodan Milosevic but also Nelson Mandela. Both Goethe and Goebbels were outstanding in the German language; one created great art, the other fomented hatred. Mohandas K. Gandhi, in my view, was the most important human being of the last 1000 years,” mentions Mr Gardner in a recent email interaction with Business Line.
“No one is born good or bad. How they turn out depends on the values of those around them, the models that they observe, the reactions to their behaviours, the events of the wider world, experience and luck.”
Mr Gardner, a leading thinker about education and human development, has studied and written extensively about intelligence, creativity, leadership, and professional ethics. His most recent books include: ‘Good Work, Changing Minds’, ‘The Development and Education of the Mind’ and ‘Multiple Intelligences: New Horizons’. His latest book ‘Five Minds for the Future’ ( was published in April 2007.

Excerpts from the interview:

Monday, November 12, 2007

There are eight priorities that Western companies need to focus on now

India plus China in ICT

Is it `India and China' or `India vs China'? It is the former, says James M. Popkin, co-author of IT and the East ( There is an increasing recognition, he observes, that India and China possess significantly complementary skills in most areas of the ICT (information and communication technology) ecosystem.

"For example, China's overall success in the hardware segment and India's overall success on the software front, China's success being driven by high levels of FDI (foreign direct investment) even in the ICT sector, and India's primarily home-grown investment environment etc." Pooling best practices and learnings on what has contributed to the success in each of these areas will provide an order of magnitude of greater bene- fit to both countries, foresees Popkin, interacting with eWorld over e-mail.

Friday, November 9, 2007

Microcredit is a proven way to increase income

Microcredit is effective for women in self-employment

When working on poverty eradication, the first message that we must communicate is that poverty is not hopeless, says Mr Eric Thurman, co-author of ‘A Billion Bootstraps’ (
“People should not be trapped in horrible lives of deprivation. Microcredit can help. Currently more than 100 million families around the world are improving their lives thanks to microcredit. That number needs to be many times larger. The number is growing, but the acceleration can and should be much faster.”
Think about the poverty at its most basic level, he urges. “Economic poverty has only two root causes, a lack of income or a lack of assets. Some people are so poor that they lack both. Poverty diminishes as incomes or assets rise.”
The essential of ‘how to combat deep poverty’, therefore, is to help people increase their incomes and assets, explains Mr Thurman, during the course of an e-mail interaction with Business Line.

New consumers are playing a big role in driving oil demand

Are Indian oil companies ‘bidding on the riskiest properties’ overseas?

Oil price hit $84 a barrel a few days ago, amidst fears that the Kurdish rebel problem would lead to the snapping of Iraq’s supplies. And closer home, despite an appreciating rupee, we have been oscillating between ominous expectations of petrol and diesel price increases, to political assurances of ‘no hike now’ with short shelf life, though.

“An interesting and scary thing about high oil prices is that we realise how incredibly interconnected global economies are, and how little we understand the consequences of these connections,” observes Ms Lisa Margonelli, the author of ‘Oil on the Brain’, in the course of an exclusive interaction with Business Line.
“Despite the deep interconnections, we live very differently: after all, Americans continue to use this enormous amount of fuel per capita and that is simply not available to other consumers,” she adds.

Any rise in interest rates would probably have intensified capital inflows into India

Sponging out the liquidity

The rise in CRR (cash reserve ratio), the sixth this year, will squeeze some liquidity from the financial system. “Yet, it should not hurt bank lending much, if at all, since banks are quite flush with liquidity,” observes Mr Ramkishen S. Rajan, Associate Professor, School of Public Policy, George Mason University, US. “This still begets the question why credit growth had slowed down in recent times.”

The tightening CRR policy clearly indicates to the markets that the RBI (Reserve Bank of India) is hawkish and is concerned about the liquidity flushing around in the system and views risks associated with this to far outweigh those related to possible growth slowdown, he adds, during the course of an e-mail interaction with Business Line, soon after the release of the mid-term monetary policy review.


Monday, November 5, 2007

The best way to tackle change of any sort is through our behaviours

The higher you go, the less feedback you get from others

What determines your success? “It is overcoming your personal constraints that determines your success, rather than just playing to your strengths,” says Flip Flippen, author of The Flip Side: Break Free of the Behaviours That Hold You Back (
The book is a guide to ‘top ten killer constraints’ that confront us at home and at work. These constraint types come with snazzy names such as the Bulldozers or the dominant ones; the Marshmallows that thrive in nurturing; the Quick draws, who are impulsive; the Critics, who nitpick; the Ostriches, characterised by low self-confidence; the Flatliners displaying low passion; the Turtles, resistant to change; the Volcanoes, visibly aggressive; and so on.
Personal growth, achieved by overcoming constraints, is more than just personal, argues the author, during the course of a recent e-mail interaction with The New Manager. “It is not ‘about me,’ but it is about those whom I serve and care about. When I don’t grow, it has a tremendous impact on others. Usually that impact is not good unless I am giving them my best – which I can’t do without dealing with my personal constraints.”

Flippen heads The Flippen Group, which he founded in 1990 with a simple philosophy: ‘We grow people’. A fast-growing leadership development organisation in the US, the company’s educational processes and curricula are in use in 5,000 school districts and campuses in 42 states, claims Excerpts from the interview:

Our workers in Gulf have to compulsorily save for their retirement and for returning to India

Strong Re & remittance-dependent families

Much has been written about rupee appreciation and its adverse impact, especially on exporters. Not enough, though, has been discussed about a huge section of the population that is dependent on foreign remittance, observes Mr Bhaskar Rao, Executive Director, Wall Street Finance Ltd, Mumbai.
“These people have lost their income by almost 20 per cent as compared to last year. This, coupled with the inflation and the high interest rate, has seriously affected them,” he adds during the course of an e-mail interaction with Business Line. “Rupee has appreciated beyond sustainable levels. The exchange rate is not justified by its fundamentals at the current level.”
Mr Rao, who was earlier CEO of the company, has about 25 years of experience in the banking and financial services sector, covering areas such as forex, treasury and global money remittance. Wall Street Finance Ltd is involved directly with the end-customers as a service provider for remittance.
Excerpts from the interview:

Tax treatment for FIIs

What happens when sub-accounts convert to FII status

Conversion of a sub-account to FII (foreign institutional investor) could potentially trigger tax consequences, which may well be significant, cautions Mr Vipul R. Jhaveri, Partner, Deloitte Haskins & Sells, Mumbai.
“Unless FIIs get to evaluate the same, they may expose themselves to a tax burden that they may neither have anticipated nor bargained for,” he adds, during an e-mail interaction with Business Line.
As per the market regulator’s draft proposal on participatory notes (PNs), FII sub-accounts will not be allowed to issue PNs; and an 18-month-period has been stipulated for winding up derivatives positions taken through the PN route.
“From the income-tax perspective, it would be very important to see the conversion process that SEBI (Securities and Exchange Board of India) prescribes and, in particular, whether it will involve a ‘transfer’ of securities under the Income-Tax Act, 1961 (the Act),” explains Mr Jhaveri.


Wednesday, October 31, 2007

High integrity and a record of accomplishment - The basic traits

Wanted, women directors

“It is not enough for best-employers and HR (human resource) leaders to simply focus on increasing the ‘number’ of women in the workforce — either at the entry-level or at the mid-executive level. The priority should also be on including women in top-management positions at the board of directors, president-level or CEO-level.”

Thus reads a snatch from the ‘mandate’ of ‘Forum for Women in Leadership’ (WILL Forum), which is to hold its launch meeting on November 23-24 at the Infosys Technologies campus in Bangalore, with about 40 women business executives in leadership positions nominated from across corporate India expected to participate in ‘an open dialogue on their aspirations, opportunities, nurturing mindsets, mentoring, and harnessing the rewards of collective thinking for improving the workplace.’


Thursday, October 25, 2007

PNs have been exploding in India

All you wanted to know about PNs

A search for PN on yields 37 results, beginning with ‘pain’ (physiology). The rest include part number, Pitcairn Island, planetary nebulae, pseudo noise, peripheral neuropathy, practical nurse, proton neutron, portable network, primitive notion, and project nothing.
“Participatory note or PN was a fairly unknown term to most people, including those who invested in the stock market,” observes Mr Sunil Rongala , a PhD in economics, in a discussion with Business Line on the currently hot topic.
It has been about a week since the market regulator SEBI (Securities and Exchange Board of India) decided to crack down on PNs. And suddenly we realised the power that PNs have over the Indian stock market. “They (the holders of PNs) decided to go in for a mass sell-off after SEBI decided to impose sanctions on them,” recounts Mr Rongala.
Excerpts from an e-mail interview, in which he dwells upon what it is about PNs that has inspired so much fear and loathing.

“Look for the hated, the unloved and the distressed business.”

‘Indian market is overridden with greed’

Nobody likes sober messages when the Sensex is hurtling from one high to another, and an eager crowd cheerily goads the index on for the ascent to the next K.
But Mohnish Pabrai, Managing Partner of the US-based Pabrai Investment Funds ( ), is different. He sombrely observes, “Currently the Indian market is overridden with greed and there isn’t much fear. The Sensex is up over 5x in four years.”
Pabrai is the author of The Dhandho Investor (Wiley, 2007), a book that distils ‘the Dhandho capital allocation framework of the business savvy Patels from India’ and guides the intelligent individual investor in applying the framework successfully to the stock market. For starters, dhandho (pronounced dhun-dhoe), literally translated, means “endeavours that create wealth,” says Pabrai. The Hindi word dhanda, as you may know, means ‘business’.

Tuesday, October 23, 2007

PNs in a sense are extra-territorial instruments

Participatory note policy driven by a short-term view of market

The proposed policy changes about PNs (participatory notes) seem to be a reflex action in an attempt to contain the inflow and thereby the Sensex that seems to be gaining momentum of a runaway train, says Mr Vipul R. Jhaveri, Partner-Direct Tax in Deloitte, Haskins & Sells, Mumbai.

The proposal of the market regulator SEBI (Securities and Exchange Board of India), as you would remember, triggered an immediate reaction in the market, causing a big fall in the indices in the opening session, and trading had to be suspended for an hour. The Finance Minister had to quickly make a statement to pacify the market sentiments, and he has since then been, in response to high volatility in the bourses.


Three requirements for a VPN solution are: authentication, integrity and confidentiality

Hackers are just a step behind

Like many organisations, American Century Casualty Co (ACCC), an insurance company based in Houston, US, used to insist that its network access be restricted to users on the corporate LAN (local area network), as narrates Charlie Rubin in a recent article in Communications News (

ACCC had to think of a policy change ‘during the year-end holiday break in 2006, when some of the state-wide claims managers asked if they could do some work from home’. However, Stephen Gentilozzi, the company’s IT manager, had no real solution for the managers at the time.

Employees are the lifeline of any organisation

Psychometric tests minimise human bias in selection

What are the qualities that an employer looks for in a prospective employee? Employers usually look for traits specific to ‘that’ particular role. For instance, to hire a bank professional at the administrative level, you would l ook for good numeric skills, high attention to detail and being agreeable; while for a senior level manager you might look for strategic and independent thinking, result-orientation, ability to work under pressure, etc.

“Having a well-planned list of desired characteristics goes a long way in ensuring that the process of assessment is sound. This is what makes an assessment valid and objective,” says Mr Vikas Dhawan , Psychometrician at The Psychometrics Centre, Cambridge Assessment, UK (, sharing his personal views with Business Line, over the e-mail.

Excerpts from the interview.

There’s an important distinction between a ‘workship’ and a friend

‘Work relationships, a key concern today’

Can you be friends with your boss and should you be friends with your boss? What about someone you meet at work and become friends with — does that friendship have different rules and considerations because you work together, compared to a friendship that is personal or with someone you met when you were both in school together? How can friendship help you advance in your career without being called an opportunist?

These are just some of the questions that Jan Yager explores in Who’s that Sitting at My Desk? (

A PhD in Sociology from the City University of New York, Yager is adjunct sociology professor in the University of Connecticut, Stamford campus. On, you will find a long list of books she has authored.

Excerpts from an e-mail interview:

Thursday, October 18, 2007

ODIs are generally issued by foreign securities brokering houses and foreign banks

If ODI is not one-day international, what’s it?

Chennai, Oct. 17 Participatory notes or PNs are back in the news, with the SEBI (Securities and Exchange Board of India) issuing a draft discussion paper on ODIs (offshore derivative instruments).

If that is too much of an alphabet soup to start, on a day that saw the markets in a tizzy, here is Ms Bahroze Kamdin, Director, BSR & Co, a firm of chartered accountants, explaining things about the new animal that has been let loose on the bourses!

Excerpts from an e-mail interview.


Never ‘marry’ the stock. Divest at the right time to reap the profits.

‘You are part of the herd if you act on market rumours’
When the Sensex is galloping from K to K, at the rate of more than 1,000 points a week, there is little time to invest in thinking.
“Invest in the human soul. Who knows, it might be a diamond in the rough,” exhorts Mary McLeod Bethune, but her plea is sure to fall on deaf ears, especially when bulls move faster than usual on Dalal Street these days, rough-riding the bears, and allowing the Doppler effect to play out on any cautionary suggestions.
For the few who may like to take time off for heeding to counsel, here is Ranjit Kapadia, a Mumbai-based investment expert, who shares his insights with Business Line over the e-mail.

Most crises occur due to liquidity needs

Market crises have a life of their own, separate from value
“While it is not strictly true that I caused the two great financial crises of the late twentieth century — the 1987 stock market crash and the Long-Term Capital Management (LTCM) hedge fund debacle 11 years later — let’s just say I was in the vicinity.”
With these solemn lines begins A Demon of Our Own Design – Markets, Hedge Funds and the Perils of Financial Innovation (Wiley, 2007), by Mr Richard Bookstaber.
“If Wall Street is the economy’s powerhouse, I was definitely one of the guys fiddling with the controls. My actions seemed insignificant at the time, and certainly the consequences were unintended…”
Arguing that market crises — like what the US has seen with the subprime mess — are an inevitable result of the market’s penchant for leverage and its abuse of derivatives and other innovative securities, the Demon created a stir on Wall Street.

Wednesday, October 17, 2007

Automotive industry is set to have a major impact on India’s future economic growth

Increased dieselisation in cars

What is the most significant trend in the Indian passenger car segment? The increased adoption of diesel, says Mr Sanjay Sondhi , Managing Director, Honeywell Turbo Technologies.
“In Europe, more than 50 per cent of passenger cars are diesel, and all indications show that India is following this trend,” he adds, in a recent e-mail interaction with Business Line. Mr Sondhi estimates the penetration of diesel vehicles in India to increase from 37 per cent today to 42-45 per cent over the next 5 years.
Two other major trends that he sees are:
The increasing popularity of small-sized diesel engines, driving both Indian and global OEMs (original equipment manufacturers) to develop low-cost cars to bridge the price gap between the two-wheeler and the current range of small cars available in the market; and
A significant share of the three-wheeler commercial vehicles being upgraded to four wheelers such as the Tata ACE, driven by tightening emissions and safety regulations.

Excerpts from the interview.

Tuesday, October 16, 2007

Banking services to the unbanked rural population

Thumbs up

One in every nine persons on earth is a rural Indian, nearly 70 per cent of Indian villagers do not have a bank account, and tapping them would require multiple banking channels, says P.P. Manjunath Rao, Country Manager Sales, Financial Solutions Division, NCR Corporation.

“Low-cost ATMs (automated teller machines), smart cards and mobile payments are some of the solutions,” he adds in an e-mail interaction with eWorld. “The recent directive from the Reserve Bank of India (RBI) on financial inclusion (‘banking for the common man’) is a key driver for the growth of such solutions in India.”

A clean power

‘Nuke deal has come at the most opportune time’

Chennai, Oct. 11 The Indo-US nuclear deal is the only way to increase the share of nuclear power in the total electricity generation in the country, says Dr R. Kalidas, former Chief Executive of NFC (Nuclear Fuel Complex), Hyderabad.
“I also strongly feel the deal will be good for many companies in the country. Once the gates for nuclear trade open, many foreign companies will come in with their merchandise,” he adds, in a recent e-mail interaction with Business Line.

“This will increase competition for Indian firms. Even NFC, the only manufacturing unit in India for nuclear fuel and many hardware items, may not be spared from competition.”
Dr Kalidas is of the view that NPCIL (Nuclear Power Corporation of India Ltd), the public sector undertaking that spearheads India’s nuclear power programme, may then look for other suppliers.

Stock market indices reflect the state of the economy in the longer run

Honestly, who is making money these days?
Like Cade in King Henry VI, you may fear ‘neither sword nor fire,’ but being ‘whipped three market-days together’, as the Bard’s Dick says, could be real trouble.
To help, Boult volunteers in Pericles, Prince of Tyre, “Shall I search the market?” It is doubtful, though, if Boult’s exercise would yield answers that you badly look for, especially if, like Launce in The Two Gentlemen of Verona, you are frightened of ‘the hangman boys in the market-place’ who had stolen ‘the other squirrel’!
So, we go to Krishna Kumar Karwa, Managing Director of Emkay Share & Stock Brokers Ltd, Mumbai, to get clarity on pressing questions about the soaring bourses.
He is a chartered accountant with about two decades of experience in the capital market across research and risk management, portfolio and corporate advisory, who co-founded Emkay in 1995 along with Prakash Kacholia.
Well, here is Krishna handling, over the e-mail, a rapid volley of posers from Business Line.

`No impulsive action; only deep breathing!'

Seven axioms for investors

Retail investors must understand that the present frenzy on stock markets is largely confined to big companies, and that the high prices are due to massive FII (foreign institutional investor) buying in large companies, cautions Mr Kanu Doshi, a Mumbai-based chartered accountant.
“FIIs are drawn to our capital markets because of our strong Indian rupee and buoyant economy coupled with the weakening US dollar,” he explains, during the course of a recent e-mail interaction with Business Line.
“By definition, big size companies are part of all indices and hence the unabated rise in the Sensex. Exit from big size companies for a large investor is much smoother than from smaller companies, should it become necessary on account of any unexpected contingency.”
While there is no sign of a scam or a bubble at this stage in the markets, small investor should be well advised to refrain from buying anything at these high prices, insists Mr Doshi. His counsel to the retail investor is to book profits by selling 50 per cent of holdings, only to repurchase at a correction that is to come sooner than expected.

Excerpts from an interview.

The sole selling agent promotes the sale of the lottery tickets

Will the lottery agent fall into service tax net?

A bumper draw of sorts is currently on, with more than Rs 2,000 crore as the sum at stake. And, the amount seems to be only a teaser of what can be bigger jackpots that the taxman is gunning for, from the lottery industry.
“The lottery industry has been contributing significantly to the exchequer of the governments, particularly the States running the lottery,” observe Mr D. Arvind and Mr J. V. Niranjan, Chennai-based indirect tax experts associated, as partner and senior manager, respectively, with BSR & Co, a firm of chartered accountants.
“State governments have been angling for a slice of the pie by seeking to levy sales tax on the sale of lottery tickets happening within their State,” they add, in a recent e-mail interaction with Business Line.

Friday, October 12, 2007

In Brazil, the shareholders are not responsible for the company’s liabilities.

On how to set up business in Brazil

With qualified professional advice, a well-prepared market plann and a good tax strategy, investments in Brazil can be rewarding, say Mr Gilberto Ayres Moreira and Mr Fabio Appendino , Partner and Associate attorney-at-law, respectively, in Gaia, Silva, Rolim & Associados (, a law firm based in Brazil.

The firm is active in several areas of corporate legal services, “such as environmental protection, restraint of trade, mining, shipping, aviation, oil and gas, finance, insurance, communications and telecommunications regulations.” Apart from a team of more than one hundred professionals, in key Brazilian cities like São Paulo, Rio de Janeiro, Belo Horizonte, Curitiba and Brasília, the firm also draws on the support of correspondents in many foreign countries.

Tuesday, October 9, 2007

Effective advertising helps build the relationship between a company and its customers

‘Brand-asset due diligence needed in acquisitions’

Hutch became Vodafone through a series of high-voltage ads across media, recently. The pug has been retained, assures Vodafone, as an ‘endearing symbol’ that signals the continuation of ‘the good things’ even as the new company builds on ‘strong fundamentals’. But it may be some time before the ne w brand name gets etched in the minds of people, and the customers connect with the old pug in its new house. For, rebranding is always a major exercise, especially in the context of big-ticket acquisitions that result in brand changes, as happened in the case of Hutch.