editor from the
www.advancedge.com Editor-in-Chief Kamlesh Sajnani
Author and activist Helen Keller once said, “Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.”
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You can imagine, how profound this thought would have been for the deaf and
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blind Keller. Life would have been very different for her had she succumbed to
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the natural negativity her situation would put her through. And then, the world would have been deprived of Keller’s genius. But instead, she chose to keep her hopes up, and fought her situation with the confidence that she could — and would — make something of herself and her life. Now, people like you and I have been through this negativity at one time or another, albeit on a much smaller scale than the inimitable Keller. But what she
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believed holds true for all of us. Especially for you, my dear reader, as you prepare for what will possibly be the most important test of your life, one that will define your future. And under such pressure, you will certainly come across moments when you feel depressed, perhaps when your performance in mock tests isn’t as good as you expected, or when a certain section or topic or area continues to befuddle you, or even perhaps if you’re finding it difficult to balance your time
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paraphrased by countless personalities, both real and fictionalised, from Superman to Irrfan Khan, from Nelson Mandela to Gandalf from Lord of the Rings. Never lose hope. Because if you do, you’ve not only lost the battle, but you’ve given up your dream of a great future. This is only a passing moment of indecision, of confidence lost and waiting to be regained.
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With three more months remaining till the CAT, and all the other entrance tests,
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your spirits up and your studies going on. It’ll only be a matter of time until you
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just follow your preparation strategy, and keep talking to your mentors to keep realise that you’re on the best possible path to achieve your dreams, and that’s only because you’ve managed to stay optimistic, and focused on your goal. Study hard, study smart, stay positive.
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Aditya Prakash Iengar Editor
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CONTENTS 05
COVER STORY Cracking the CAT: All you need to know
August 2018
22
CORPORATE WORLD The future: AI, Machine Learning & Analytics
25
Trading blows in a global trade war
08
CORPORATE INTERVIEW KABIR BHASIN Founder, Furlenco
28
The fall of the Indian rupee: Is all well?
11
COUNT DOWN
31
YOGA TALK Keep calm & do Shavasana
32
STUDY HOUR Test Q&As
34
Word Dose: Of biomes and the spud
36
Globescan
38
SuDoKu
16
19
13 Major Economic Landmarks of Independent India
STUDENT SPEAK SNIGDHA DUTTA First year MSc Finance, JBIMS
NEWS SNIPPETS News in brief
Disclaimer : The views expressed in the articles by contributors and others are not necessarily those of the Publishers, unless specifically stated therein. While no effort is spared in ensuring the accuracy of the information published herein, readers are advised to reconfirm the current facts before acting upon any such information. The Publishers regret their inability to accept responsibility for any inadvertent errors of commission or omission in this issue. Readers are recommended to make appropriate inquiries before incurring expenses or entering into commitments in relation to any advertisement appearing in this publication. The publishers do not vouch for any claims made by the advertisers of any products or services. The Publisher, Printers or Editor shall not be held liable for any consequences in the event of such claims not being honoured by the advertisers. All rights reserved. No part of this publication may be reproduced, in any form or means, or stored in a database or retrieval system without prior permission from the publisher.
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COVER STORY
Cracking the CAT: All you need to know The last few months prior to the CAT are very important, for both first timers and repeat takers. It’s normal to have a lot of questions at this time, when tension starts building up. In this article, we answer some of these most often asked questions for you.
T
he CAT is a behemoth of a test, taken every year by about 2 lakh students in an attempt to get into the world of management. This test is probably the biggest hurdle to joining a business school, and naturally, MBA aspirants at this stage, 3 months before the CAT, are full of doubts and questions. “Am I preparing correctly?” “Am I taking enough mock tests?” “Am I spending enough time every day on my preparation?” These and a lot more are just some of the anxious queries filling the already stuffed brains
of CAT takers. However, at this stage, it is essential to concentrate on preparing for the all-important CAT, rather than get troubled by the numerous questions that keep coming back to the anxious minds of the students. Here are the answers to some of these questions to help you take the load off your mind.
How many tests should be taken in the last 3 months? For the last 3 months, we recommend taking 1 test per week and analysing it well. In
the last 1 month you can increase your test taking frequency to 1 in every 4 days. That makes it to about 15 tests in the last 90 days with proper analysis. In fact, more important than just taking the tests, is their analysis. If you don’t learn from each test before proceeding to the next, there is really no point in taking a large number of them one after another, since you might keep repeating your mistakes. Try out various strategies for each test like • VA questions first and then RC questions OR RC first and then VA. • LR Questions first and then DI questions OR DI followed by LR By working in this manner, you can come to understand which strategies are working for you, and which aren’t. It is also important to attempt a variety of tests. This is because you may score well in a test that is more suited to your strengths, while it just may turn out that the CAT may carry more questions of the kind
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COVER STORY
you are uncomfortable with. An exposure to a varied range of problems and the rationale behind them will ensure that you are better prepared for the final day. Finally familiarity increases speed. In a high stress test like CAT every second counts. And in most cases you lose time in trying to understand the question and figuring out how to solve it. This time required gets drastically reduced if you are already familiar with such type of question and know exactly how to tackle it. By taking more tests you are exposed to a wider range and type of questions. This can really help you on the C-Day.
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How much time each day should be spent on studying for the CAT? The closer one gets to CAT, the more you have to devote time to completing your backlog, taking tests, analysing them and revisiting the weaker concepts. That means you have to increase your study time for CAT to about 4 hours a day. However, the manner in which those four hours are utilised can make or break the deal. Whenever you sit for studying, your phone should be in airline mode. For the next few months try to become a social pariah by bidding adieu to Facebook, Twitter, Instagram, Pintrest and every other social platform. Your career should be more important than your 10 seconds of fame on social media. Also, how you divide the study time should depend on your individual strengths and weaknesses. Some may prefer to spend more time on the Verbal section, while others on Quant. Ultimately, you must ensure that your progress in
In a high stress test like CAT every second counts. By taking more tests you are exposed to a wider range and type of questions. each section is equal. This holds greater relevance if you are aiming primarily (perhaps even exclusively) for the IIMs, because at these institutes, cut-offs — even sectional ones — matter. So, you should be spending more time in practicing your weaker sections and bringing them at par with your stronger section. At the same time you shouldn’t completely forget your stronger section and let it become weak without regular practice. Furthermore, organise your day in such a way that the hours spent studying are those when your brain is most alert. Working professionals, for example, shouldn’t study at night after a hard day’s work. On the other hand, if you’re generally more active and alert during the late hours, perhaps a night-time study routine would be best suited for you. You need to understand that preparing for a test like the CAT is not at all like preparing for exams in school and college, w h e r e you need to spend long hours memorising the material.
Can topics that appear too tough be ignored? Students usually find topics such as Modern Math tough, but you must remember that Modern Math questions in the CAT are not always tough, nor are Arithmetic questions always easy. Your aim is to maximise your score in all sections, and you can do that by solving all the easy questions. If you leave out Modern Math entirely, you will have narrowed your selection to only the easy questions in Arithmetic and Algebra. In such a scenario, how do you maximise your score? Tough questions from any topic should be ignored in any case. For example, in one of the IMS practice tests, a student didn’t answer a question based on playing cards because he felt it involved permutations and combinations. When he looked at the problem later, it turned out to be a simple linear equations question. So, read problems properly before leaving them — they might be sitters.
What exactly should be done while analysing a test? There are two answers to this dilemma — for questions that were attempted, and those that weren’t. For attempted questions • C h e c k whether your mistakes w e r e s i l l y,
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COVER STORY
• • •
For un-attempted questions • Try solving each one of them without seeing the solution. Classify the questions into the following buckets and tackle them accordingly: o Identification Error: These are the questions that you could solve now very easily but did not attempt in the test. This shows inefficient test taking strategy and question identification. To improve you need to practice various strategies using the Take Home SimCATs. As you move closer to the test, the number of questions in this bucket should decrease. o Time Factor: These are questions that you did not attempt in the test and now also could do it after being at it for a long time. This indicates a lack of familiarity about that area. You need to practice, practice and practice more. o Conceptual Clarity: Did you have to leave out the questions this time also because you couldn’t figure
out how to do it. This shows lack of conceptual clarity in a particular area. Go back to the drawing board and learn the concept and practise it by taking up questions of this sort. Once you have done this analysis, you should have an idea of the areas where you have been faltering. Therefore, pick an area that you need to work on and spend 2 to 3 days on solving every possible question of the kind from the material given to you (Concept builder, section tests), the previous years’ papers; also, refer to your Basic Reference Material.
Taking a test with a group of friends is beneficial, as it complements each other’s strengths and weaknesses. If you’ve done this second rectification step correctly, rest assured that in the tests ahead, you will be able to solve any question relating to the topic you picked.
What would be a good test prep strategy for the final leg of preparation? A suggested strategy is to take a test every 4 days. If you take a test on Day 1, get into the analysis mode for Days 2, 3 and 4. Make sure you get in touch with the basics of your weak areas in this time period. Before beginning a test, ensure that you have an overall target
score and sectional target ones. While taking the test, you can mentally slot the questions into those that you can • Understand and solve • Can solve but will take time • Can’t solve (whatever the reason may be) By dividing the questions in this manner, you will be able to prioritise and plan your time. Also, developing this habit in practice tests will hone your ability to pick the “right” kind of questions. One of the main reasons people don’t do well in tests like the CAT is that they get stuck with problems and can’t move on. If you find that you began a problem assuming you can solve it but can see that your attempts aren’t leading you to the answer, let it go and move on to the next. You already have an idea of what you can attempt, and there might be an easier question elsewhere.
Does analysing a test with a group of friends help? Taking a test with a group of friends is immensely beneficial, because people tend to complement each other’s strengths and weaknesses. With, say four friends, you will have four different approaches to solving a problem. When you analyse a test by yourself, you will probably come up with time saving approaches for around 5 to 6 problems because a single person can come up with only a limited number of perspectives. With a group, however, you can be assured of multiple approaches to a problem. For example, some sums may not require you to use calculations — someone else might see that, while it may not strike you. A
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careless or conceptual errors. Check if there are better ways to solve the questions. Were you able to comprehend the problem irrespective of the level of difficulty? If the concept is new, learn the concept and move on. If answered correctly, check the explanatory answers — was your solution the best possible approach to the problem? Should you really have attempted these when, and if, there were easier questions elsewhere in the section? Why were you attracted to that particular question?
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CORPORATE INTERVIEW
‘MBA taught me new ways of thinking’ …says serial entrepreneur, KABIR BHASIN. Armed with an MBA from the prestigious S.P. Jain Institute of Management & Research (SPJIMR), Kabir shares his entrepreneurial journey, right from transforming East Lifestyle into a brand, to starting new ventures such as Furlenco. In conversation with Kalyani Majumdar... Q. You studied at SPJIMR. How was your experience studying there? Initially, I entered S.P. Jain with the aspiration of getting a certificate that I had completed my MBA degree and get a job. But everything changed after the first lecture. It was a marketing lecture, and I remember sitting at the back of the class at first. Fifteen minutes later, I moved to the absolute centre of the front row! The teaching was highly insightful; the first 15 minutes blew my mind. In the next two years, every single lecture blew my mind with concepts that I thought I’d already known, thanks to my work experience, and also as I was part of my dad’s business at the time. So with each lectures, teaching me new concepts and new ways of thinking, I went from merely wanting a degree to something far deeper.
Q. Tell us about your work experience before joining S.P. Jain.
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I started working with United Brewery for a year—institutional selling of mineral water. After that, I worked in the merchant services department of Citibank for about a year. My father was running his business, but I didn’t want to be a part of it back then. One day, while I was at Citibank, he called me in distress, and told me that the workers were on strike, he was locked out, and he needed me to come and help him out. Naturally, this was my father asking for my help. There was no way I would refuse! So I quit my job at Citibank, which, by the way, made the VP quite unhappy! I worked with my father for the next 6 months, and then I joined S.P. Jain. So I had around 2.5 years of work experience before I entered the programme.
Q. You are a second generation entrepreneur. Please tell us about East Lifestyle and the journey so far. How did you transform East Lifestyle? I entered the business with quite a bang because the strike was on. Lock out at work. So my first task was to sort out this problem. And
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since it was primarily a matter of communication between the management and labour, I visited the workers at their houses, called a meeting and by the second day, they were back at work. I don’t think that apart from this, I added any value in the initial period. But soon after my MBA programme, I started implementing a few changes within the business, just to make it friendlier to the generation in which we live—technological advancements, a slightly different method of working, and a significantly higher emphasis on design. I introduced a design department within the firm and we released a range of our own products and started working on building a brand. We went deep into examining ourselves — do we have a vision and do we have a mission? When we realised that we didn’t, the important task was to figure out who we were, what our current vision was. It turned out that we were furniture makers, but that’s not much of a vision. So we decided that we wanted to be the makers of the finest furniture in the world. This became a vision. How we were going to do it then became the mission. And introducing a design department was an important result of this discussion. You have to have innovative designs if you want to be a leading manufacturer in the world.
really take off. But I learnt a lot from the design business that I ran for a little over a year. Soon after I shut down the design outsourcing firm, a company from Singapore approached me to buy out the range of furniture that they used to give out on rent in Bangalore. This company would bring furniture from abroad and give them on rent. But now they were selling the same furniture at a very high cost! I realised that the furniture could be made here in India, and sold at half of the prices they were trying to sell me! This is what led to the germination of the Furlenco idea. Now of course, merely having the idea is not enough. As I started working on it, I realised that the funds required to launch a business like this were a lot, especially purchasing all the furniture that I would rent out, and then other costs like cost of warehousing, delivering the furniture, servicing the product, bringing it back, office administration, etc. On paper, it would take around 30 months to achieve profitability. So in 2008, I just sat and waited, with the idea jotted down on paper. Then, in 2010, a gentleman named Ajith Karimpana walked into my store and asked if I would rent out the furniture. Even though my immediate response was that we didn’t do rentals, Ajith’s idea of setting up the furniture rental business stuck with me, and we became partners and eventually started Furlenco. Since Ajith was an investment banker, he could put in the initial capital, and that’s how Furlenco initially took off. Ajith is currently the CEO of Furlenco.
We wanted to be the makers of the finest furniture in the world. This became a vision. How we were going to do it then became the mission.
Of course, it helped tremendously. And S.P. Jain has a specialisation in family businesses. They actually have a module where they teach you specifically about transition, change, etc, within a family business, which is very different from a corporate. This was an interesting part of the programme which helped me in the transition and make changes within the business.
Q. What led you to start your venture with Furlenco? What gave you the idea? I started three businesses before setting up Furlenco, and these included a motorcycle export business, a design, outsourcing company and then a period design firm. Apart from the design outsourcing company, the other companies didn’t
Q. Do share with us your learnings at Furlenco. What were the hurdles or challenges that you faced? I think we were fortunate to have an open mind to education. And I had enrolled for the startup leadership programme, which is essentially a self-help group of start-up entrepreneurs. Within this group, I learned concepts that I hadn’t even learned at S.P. Jain! An example of one of these learnings is Lean. Lean production is very popular in operational circles. But I learnt how to set up a lean business. And within the lean concept, it is very important to constantly test and move forward. We didn’t know
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Q. Do you think an MBA degree from one of the top B-schools helped you approach the existing family business differently?
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what product to launch in the market. What was required? What did the market want? So, instead of conducting a market research, we launched a bunch of products in the market, but just one piece of each product, without even knowing who the ideal market would be! Initially, we didn’t see any result. So we dug a little deeper, trying to figure out the demographic that needed furniture on rent. My immediate response was: Expatriates, i.e., people moving in from outside the country. We started with this idea, and it turned out to be a goldmine. That’s really when we saw a growth spurt. The main challenge was to bring in the furniture at the right time as per demand. We had to start from scratch, since there was no historical background in this industry!
Q. Another very interesting venture that you started is fan-a-gig. What inspired you to start this venture? Fan-a-gig is a passion project. It is terrible that we don’t have enough live events in India, especially with regard to music. Artistes like Pearl Jam and AC DC really shaped my life, but these bands rarely ever come here. So I wondered if we could put together a few million dollars with other people who also wanted to get these bands to come perform in India. However, even though we put in a lot of money, it didn’t work out.
Q. What do you think of management education in general? In general, it is rather overrated, especially because of the number of management colleges that exist in our country right now, vis-à-vis, the number of management colleges actually imparting quality education; the latter are few and far between. I have had MBA degree holders who graduated recently, and I find a huge dearth of quality. So, if you are not doing MBA from one of the top twenty B-schools, you probably shouldn’t waste your time doing an MBA. It is very embarrassing for me to say this, given that my MBA education changed my life, but I think the entire quality of education within the country itself is facing a problem, irrespective of whether they’re engineering students or design students. Apart from the top one percent of the institutes, the rest of them need to improve. And MBA education is not done through textbooks. It is the quality of the professor, and his passion. We don’t have enough of such professors, and the ones we do have move to the top 20 institutes.
If you are not doing MBA from one of the top twenty B-schools, you probably shouldn’t waste your time doing an MBA.
Q. Any new ventures in the offing? The projects I am involved with right now are all in stealth mode, so I can’t talk about them at this time. A lot of them are revolutionary business ideas, and I am rather protective about what we are doing!
Q. As an entrepreneur, what is your take on the concept of work-life balance?
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actually a love story, and an operational text book that I read at S.P. Jain, but it is written like a novel. It is about a factory manager who has tremendous problems in his factory, and which then spill over to his personal life. And he realises that if he is able to manage his factory efficiently, his personal life falls in line automatically. A must read for any business student.
I don’t think there is such a concept for an entrepreneur. Work and personal life balance does not exist. There is just life. Everything is encompassed within that singular framework—that this is my life within which I work, I play, I network. So, at least for entrepreneur, I don’t think this concept should exist. I’d read a great book, The Goal by Eliyahu M. Goldrat, which impacted me significantly. It is
Q. What advice would you give to MBA students and future entrepreneurs? Only if you have the ability to overcome your fear of risk, take the entrepreneurial plunge. You must enter a business that has something in alignment with you, the individual. For instance, if you’re from an extremely wealthy family and are used to the good life, and if you get into the waste recycling business, whereby it involves picking up waste material from various different sources and sorting them and pull out an end product, you may not end up liking what you’re doing. Never enter a business just because of the profit, it must be something you agree with. Remember, always do that you will ultimately be proud of. A
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13 Major Economic Landmarks of Independent India Amarendra Singh
T
he Indian economy has come a long way since achieving independence. In 1950-51, the country’s economy was tottering with a GDP of a mere Rs. 2.7 lakh crore. In 2017-18, it has grown in Rs. 170 lakh crore in behemoth. Recently, the Indian economy has also become the world’s sixth largest economy, with US$2.597 trillion in size, and is projected to become the world’s fourth-largest economy by year 2022, according to projections by the International Monetary Fund. To celebrate this achievement, and our 72nd Independence Day, let us have a look at some of the biggest socio-economic milestones in the country’s journey so far that made this feat possible.
Green
Post independence, Indian population growth outpaced the food production, which was erratic and stagnant (total food grain production in India was 76.67 million tons in 1959-60, and 74.23 million tons in 1966-67). As a result India was a net importer of food grains (India imported over 10 million tonnes of food grain in 1965-66 and a similar amount the previous year). This called for urgent measures to improve crop yield in the form of new technology adoption, developing and using high yielding crop varieties, and application of chemical infused fertilizers. This decade of revolutionized approach to agriculture is known as the Green Revolution of India. In just under a decade, India’s food grain production reached 121.03 million tons. The Green Revolution helped India become a food grain surplus nation. India has also shown a steady average nationwide annual increase in the kilograms produced per hectare for some agricultural items. India’s food grain production is expected to increase 277.49 million
tonnes, exceeding the previous record of 275.11 million tonnes during 2016-17. While it was great for food grain production, the Green Revolution was not without drawbacks and limitations. Its biggest drawbacks were its limitation to just a few states, promotion of mono-cropping and excessive use (rather misuse) of chemical fertilisers. Also, despite producing so much food grains, India has still not been able to provide food security to her people – there are almost 195 million undernourished people in India (25% of the world’s hunger burden). India currently ranks 74th out of 113 major countries in terms of food security index.
1968: National Policy on Education At the time of independence, the literacy rate in India was around 12%. Since then, Indian governments launched and sponsored a variety of programmes to increase education and literacy in both rural and urban India. Development of high-quality scientific education institutions such as the Indian Institutes of Technology, and formation of National Council of Educational Research and Training (NCERT) to advise governments on formulating and implementing education policies were the result of these efforts. However, the outcome was not as desired. In 1968, the first National Policy on Education
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1967: revolution
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(NPE) was announced with the objectives of ‘radical restructuring’ and providing ‘equal educational opportunities’ to all. The policy called for compulsory education for all children up to 14 years, better training and qualification of teachers, and focus on learning of regional languages (‘three language formula’) at the secondary education to reduce gaps in communication and idea exchange. The NPE was far reaching, and has retained its basic structure since then. It was modified in 1986, to remove disparities and to equalise educational opportunity for Indian women, Scheduled Tribes and the Scheduled Caste communities. In 1992, it was again modified to include common entrance examination on all India basis for admission to professional and technical programmes in the country. Presently, the Gross Enrolment Ratio (GER)1 in higher education is 25.2% (against the desired level of 30% by year 2020). China’s GER is 43.4%, and USA’s is 85.8%. The literacy rate improved to 80% in 2017, from 12% in 1947. In 2014-15, there were about 26 crore students enrolled up to secondary education, with girls making 48% of the total enrolments2. As per All India Survey on Higher Education (AISHE), India’s 59.34% colleges are located in rural areas, 9.3% colleges are exclusively for girls. At the Undergraduate level, girls make 47.3% of all the students enrolled in higher education.
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1969: Nationalisation of Banks The measure of Bank nationalisation came in to effect on 19th July, 1969 following the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance that transferred the ownership of 14 of India’s largest commercial private banks, estimated to control over 70% of all deposits in the country at that time, to the government. In the first decade of independence, more than 360 private banks failed across the country, resulting in depositors losing their entire money. Additionally, private commercial banks were seen as only helping the large industries and businesses, completely ignoring agriculture sector. The move helped the nationalised banks to become the majority lenders in the Indian economy, and penetrated the Indian hinterlands with their widespread networks. At present, India has the highest number of bank branches in the world. As per RBI and IMF, there were more than 1.26 lakh bank branches in India in 2015—the highest in the world. The objective of
geographical reach was also met as the overall spread between the rural (34%), semi-urban (28%) and the urban areas (38%) is fairly even. The nationalised banks have over 30% branches in rural areas, while private sector banks largely (80%) cater to the urban and semi-urban population. One of the primary ideas behind that move was to increase general public’s confidence in the banking system and encourage them to save and invest. While India’s formal banking sector has soared to US$ 1.7 trillion, it is also struggling with the recovery of US$ 210 billion problem loans. Some regional banks have also been ensnared in fraud scandals. Collectively, these issues can negatively impact India’s growth outlook in future.
1970: Flood
Operation
Also known as the ‘White Revolution’, the Operation Flood was a project undertaken by the National Dairy Development Board (NDDB). As the world’s biggest dairy development programme, it transformed India from a milk-deficient country, to the world’s largest milk producer. The scale of milk production changed from just 17 million tons in 1950-51 to 165 million tons in 2016-17. The project not only multiplied per capita availability of milk in India (from over 50 gm/day in 1950-51 to 351 gm/day in 2016-17), but also made dairy farming the largest self-sustainable rural employment generator in India. As per the report by Edelweiss Securities, the Dairy industry in India was estimated to be over Rs. 5.4 lakh crore in value in 2016, and is expected to expand to Rs. 9.4 lakh crore trillion by year 2020. The industry is not immune to malpractices. An investigation by the Federation of Indian Animal Protection Organisations (FIAPO) found that dairy animals, especially in the urban areas, are unfairly treated. A majority (64%) of dairy animals were found to be ill, injured or distressed. Practices such as illegal use of drugs and hormones to increase the milk let-down were found to be prevalent.
1983: Launch of Maruti and growth of Indian Automotive sector While the Indian automotive industry started
Gross Enrolment Ratio is a statistical measure for determining the number of students enrolled in Under-graduate, Postgraduate and Research level studies as a percentage of the entire population 2 Ministry of Human Resources Development report 1
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1984: Information Technology (IT) industry comes of age Origins of the Indian IT Sector can be traced back to late 1960s when Tata Consultancy Services (TCS) was started by the TATA group for software development services. TCS developed punch-card facilities for TATA Steel. However, in 1974, Burroughs Corporation, a mainframe manufacturer based in USA, offered TCS to export programmers for the installation of system software. Around the same time, Wipro and Patni Computer System started developing software and providing services. In 1981, Infosys started with a focus on providing software services and also developed an IT business model, which was later adopted by most of the Indian IT companies. However, till 1984, IT was not considered an industry and was not given any subsidies. In 1984, some strategic reforms were made, which designated IT as an industry. The government formed New Computer Policy of 1984, which lowered the import tariffs on hardware and software, recognised the software exports as a ‘de-licensed 3
industry’ making it eligible for bank finances, freed it from the license-permit, and allowed it to set up offshore units of foreign companies in India. Later on, in 1986 Policy on Computer Software Export, Software Development, and Training set out the objective of expanding the Indian software export and development through data communication links. Post the 1991 liberalisation, the growth was rapid. At present, IT industry is an important sector of the Indian economy and has emerged as an important contributor to its growth. The IT sector’s size has increased at a rate of 35% per year during the last decade, with the aggregated revenues of US$ 160 billion in 20173. The share of IT industry is around 7% in Indian GDP in 2016-17, up from 1.2% in 1997-98. IT sector is also one of the biggest job-creators in the country, adding over 1 lakh jobs last year.
1991: Economic Liberalisation of India During the mid-80s, India was staring at severe currency devaluation, low investor confidence and balance of payments problems on the back of high imports and large fiscal deficit. By the end of 1990 India had foreign exchange reserves that could barely finance 3 weeks’ worth of imports. The Indian government also came close to defaulting on its loan. This forced the government to pledge 67 tons of gold to the International Monetary Fund (IMF) in exchange for an emergency loan of US$ 2.2 billion to cover the balance of payment debts. This situation led the ouster of Chandra Shekhar government, and election of PV Narasimha Rao led government. Faced with hard choices, the new government allowed economic reforms that opened up the Indian economy for the outsiders through FDI, ended the Licence Raj and public monopolies, reduced tariffs and interest rates. This tone change in Indian economy allowed the country to progress towards a free-market economy model, substantial reduction in state control over the economy and increased financial liberalisation. India’s GDP stood at Rs 5.86 lakh crore in 1991, which has swelled to Rs. 170 lakh crore in 2017. Whereas, the annual GDP growth rate averaged 4.4% during the 1970s and 80s, it accelerated to 5.5% during the 1990s and early 2000s, and further to 7.1% in the past decade. When compared with the largest emerging global economies, this India’s growth stands out as being unique.
1995: WTO agreement India became a member of the World Trade
NASSCOM estimates
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developing in the 1940s, a distinct growth started only in the 1970s. Cars were considered ultra luxury products; their manufacturing was strictly licensed, expansion was limited and there was a restrictive tariff structure. As a result, India was also lagging on the technological and engineering of automotives. However, things started to change and the government recognised the importance of having a home grown car manufacturer and amending the policies for the same. In 1982, license and JV agreement was signed between Maruti Udyog and Suzuki Motor of Japan wherein Maruti had the license to produce 40,000 cars per year. Things changed with the Motor Vehicles Act (1988), Central Motor Vehicles Rules (1989) and economic liberalisation of 1991, which de-licensed Indian Automotive Industry, and allowed foreign automobile manufacturers in the Indian market. In the financial year 2017-18, the Indian passenger vehicle industry produced 4 million vehicles (cars, utility vehicles and vans) annually. Out of these 4 million units, Maruti alone contributes 1.56 mn. Units and commands the largest market share in terms of volumes. Currently, there are 12 Indian manufacturers, 7 joint venture manufacturers, and 14 foreign owned manufacturers in India. The industry presently accounts for more than 7% of the Indian economy.
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Organization (WTO) on 1st January, 1995, and opened up India’s global trade. Following the liberalisation and structural reforms of 1991, country was ready to reform its trade practices. Under WTO, which now claims 196 countries, there are three specific benefits that are accorded to its members – The WTO grants each member ‘Most Favored Nation’ status, which means that WTO members treat each other the same and do not give preferential trade benefit to any one specific member. WTO members have lower trade barriers with each other, which includes tariffs, import quotas, and regulations. This helps expand market for any product, leading to greater sales, more jobs, and faster economic growth. Lastly, as a majority of WTO members are developing countries, they can access ‘developed markets’ at lower tariffs. India gained a lot from these provisions, as the country’s exports grew from US$ 26.33 billion in 1994-95 to US$ 302.84 billion in 2017-18, registering a CAGR of more than 11%. While beneficial for trade, the WTO also poses some serious challenges to some of the Indian industries, esp. the agriculture. WTO has issued a food subsidy cap of 10%, which could jeopardise the food subsidies given to poor farmers under the ‘minimum support price (MSP)’. India has also ratified the Trade Facilitation Agreement and can not deny market access to other countries, making it very challenging for domestic farmers to compete with foreign players due to their limitations of technical know-hows, production, quality etc.
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1995: Pulse Polio Immunisation programme Until the early 1990s, India was hyper-endemic for Polio; it is estimated that on an average, 500-1000 children were paralyzed daily due to the disease. Polio vaccination against polio started in 1978, which covered around 60% infants till 1984. Vaccine efficiency was low, and Uttar Pradesh and Bihar were the biggest suffering states. In 1995, India launched Pulse Polio immunisation programme, which aimed at 100% coverage. Under this programme, the transmission of polio virus was finally interrupted with sustained and extraordinary efforts. Since 2004, the annual pulse polio vaccination campaigns were conducted 10 times each year, and virtually every child was tracked and vaccinated. The last reported cases of wild polio in India were in West Bengal and Gujarat on 13th January, 2011. On 27th March, 2014, the
World Health Organization (WHO) declared India a polio free country, as no cases of wild polio were reported for three years. A research4 published in 2015, estimated that India’s Polio eradication programmes averted over 3.94 million paralytic polio cases, more than 3.9 lakh polio deaths, and over 1.48 billion disability adjusted life years. The research also estimated that the programme contributed a US$ 1.71 trillion (Rs. 76.91 trillion) gain in Indian economic productivity between 1982 and 2012. Life expectancy grew up to be 68.89 years, which was only 32 years at the time of independence.
1998: National Highways Development Project (NHDP) The National Highways Development Project (NHDP) was a project to upgrade major highways in India to higher standards, which included their rehabilitation and widening. Although, national highways account for only about 2% of the total road length in India, they carry about 40% of country’s total traffic. The project was started in 1998 and managed by the National Highways Authority of India (NHAI). It represents 49,260 kms. of roads and highways work and construction in order to boost economic development of the country. A research conducted by Asian Institute of Transport Development (AITD) for NHAI found that proximity to national highways has positive impact on the rural populace. Governments can form efficient anti-poverty policies; it increases rural population’s overall well-being, mobility, and provides better access to amenities like electricity, drinking-water, sanitation, and so on. The government has planned to end the NHDP programme in year 2018, and consume the ongoing projects under a much larger Bharatmala project.
2014: Foreign Direct Investment (FDI) in several sectors Foreign investments are considered extremely crucial for the Indian economy, which needs in excess of US$ 1 trillion to overhaul its infrastructure such as ports, airports and highways to boost growth. A strong inflow of foreign investments will help improve the country’s balance of payments, boost investor
“The Estimated Health and Economic Benefits of Three Decades of Polio Elimination Efforts in India” – Arindam Nandi, Devra M. Barter, Shankar Prinja, T. Jacob John 4
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2015: Paris Agreement and India’s Renewable Energy push In December 2015, the Paris Agreement (within the United Nations Framework Convention on Climate Change (UNFCCC)), dealing with greenhousegas emissions mitigation and related issues was signed. The Agreement’s long-term goal is to limit the global average temperature increase to 1.5 °C, lest risk serious effects of adverse climate change. India was responsible for contributing over 6% of the global CO2 emissions, and was the world’s fourthlargest carbon emitter following China, USA, and the European Union. In its nationally-determined contributions (NDCs), India promised to reduce its emissions intensity (Greenhouse gas emissions per unit of GDP) by 33% to 35% below 2005 levels by the year 2030. It also promised to ensure that at least 40% of its energy in year 2030 would be generated from non-fossil fuel sources, such as Solar, Wind or Bio-fuels. Additionally, the country would rapidly increase its forest cover so that an additional carbon sink of 2.5-3 billion tonnes of CO2 equivalent is created by the year 2030. To achieve this, India will have to shift from
coal-based power generation to renewable energy sources that include 100 GW from Solar, 60 GW from Wind, 10 GW from Biomass and 5 GW from small hydropower by year 2022. In June 2018, India had an installed capacity of 343.90 GW, out of which more than 35% was from non-fossil-fuel sources. 21.65 GW comes from Solar, 34.05 GW from Wind, 8.70 GW from Biomass and 4.48 GW from small hydropower. According to a report5, India was on course to achieve the promises made in the NDCs for the year 2030. It also says that the projections made in India’s draft National Electricity Plan (2016), which talks about stabilisation of coal-powered electricity to 250 GW over the next decade and an expansion of renewable energy to 275 GW by 2026-27 would, if implemented, were expected to have substantial impact on its emissions. It is also estimated6 that the growth in India’s renewable energy sector could generate more than 3.30 lakh new jobs over the 2017-2022 period.
2017: Goods and Services Tax (GST) A widely debated move, the implementation of the Goods and Services Tax (GST) has been India’s one of biggest economic reforms. It was also very complex to achieve—from amendment of Constitutional division of tax base between the Centre and the states, to building political consensus across the federal spectrum. It is also country’s first valueadded tax that functions entirely on IT! The primary objective of GST was to bring all indirect taxes and services under juts one overarching integrated tax. The introduction of GST did away with the multitude of taxes and levies and subsumed them under Central GST (CGST) and State GST (SGST), which enabled the introduction of a standard tax rate across the country. Prior to GST, goods moved around India as if they were transiting through different countries, rather than through various states under the same federal union. Second objective was to prevent rampant tax evasion. With a transparent rule there is strong belief that tax payers’ behaviour will alter favourably. The Economic Survey of India 2018 claimed that post GST, the number of unique indirect taxpayers increased by 34 lakh, and by June 2018, it increased to 54 lakh. Obviously, the implementation of GST will make the Indian economy more efficient, compliant, and beneficial. A
Report was jointly prepared by the NewClimate Institute, Netherlands; Environmental Assessment Agency; and the International Institute for Applied Systems Analysis 6 As per ‘Council on Energy, Environment and Water and the Natural Resources Defense Council’ estimates 5
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sentiments and strengthen the rupee exchange rates against global currencies, including USD and Euro. Since the beginning of year 2015, the Indian government has relaxed FDI rules and opened up food retail, airlines, private security firms, and defence sectors to foreign investment. Other sectors in which FDI norms have been relaxed include e-commerce in food products, broadcasting carriage services, private security agencies and animal husbandry. Presently, up to 100% FDI is allowed in the Defence Sector, 74% in brown-field Pharmaceuticals, 100% in brown-field Airport projects, 100% Civil Aviation, 100% under automatic route for cable networks, DTH and mobile TV, 49% in insurance sector. Government also launched the ‘Make in India’ initiative under which FDI for 25 sectors was further liberalised. The government claims that FDI in India increased to US$ 61.96 billion in 2017-18, from US$ 60 billion in 2016-17. However, according to the United Nations Conference on Trade and Development (UNCTAD) report, FDI to India decreased to US$ 40 billion in year 2017 from US$ 44 billion in year 2016.
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STUDENT SPEAK
‘Have an answer to the question: Why MBA?’ This is what SNIGDHA DUTTA, a first year MSc Finance student at JBIMS, has to say about the importance of choosing a career path early on, and how to choose a B-school to get that success. In conversation with Advanc’edge, Snigdha shares her learning so far. Q. Tell us a bit about yourself. I have done my graduation in Commerce. I did my M.Com also simultaneously. I was also pursuing Chartered Accountancy, which shows that I have been in the finance field for all these years. Now, I have my CA final left, and MSc Finance in JBIMS came up.
Q. Was doing an MBA always on your mind? Pursuing an MBA degree along with CA had always been on my mind. I’ve interned with companies like Goldman Sachs, SBI, etc, and I realised that CA teaches you the very core of Finance, but not the finesse of it, the way you handle people, how you manage your time, your structures, etc. Studying for
CA means studying on your own, with your own drive, which means that you’re interactions with others, is quite low. An MBA gives you an edge in that regard, as it takes you through meeting people, dealing with human emotions, pressure, set timelines, etc. Initially, a year into my CA, I knew I’d get my MBA degree, but it happened sooner than I expected!
Q. Did your work experience help you in handling the tests? My work experience didn’t help me with the tests, per se, but what did help was that I was already dealing with few people there, and handling time limited structures. So from that point of view, preparation gave me a flow. I was always a student, I was always preparing. I always knew what finishing a part of the curriculum or a portion was like. My work experience gave me an overarching view as to how I would sit in front of a person and talk myself through. So not studies, but more for the softer skills.
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Q. How did you prepare for the tests? IMS has a unique quality of knowing exactly how much needs to be imparted to students in the few weeks of test preparation. Being in the weekend batch, I was only attending two days out of seven, but I never felt burdened. I’ve never been very good at planning my studies. If I feel I have to take a test, I will sit down right now and take a three hour test and see where I stand and prepare accordingly. Most people don’t do it like that. They prepare and then they take a test. For me, the benchmark has always been to take a test, see where I am, and then start preparing. If I feel I don’t need to prepare for a particular subject, then I don’t!
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STUDENT SPEAK
Q. Any suggestions for future test takers? If you start preparing around eight months before the CAT, it is essential to take the first two or three months to be clear that you really want to do this. Don’t just take the test because there’s nothing else to do, or because everyone else is doing it. The CAT is not a test that anyone and everyone can take. In the first couple of months, go through the entire curriculum, get the BRMs, all the modules, get your bearings, identify your strengths and weaknesses. Once you’ve done that, you know what to work on, and therefore, which faculty to sit with for an extra hour!
Q. Do you think sitting for mock tests helped? They did, immensely! In the first mock test, I scored miserably, 40 or 42, and it was totally unexpected, as I’d kept boasting about how I was good at both Math and English! But the minute you sit for a test you realise that a lot of other factors play an important part. Even if you’re a seasoned test taker, a mock CAT is completely different. But the first mock stripped me of my over-confidence and showed me that there were tiny nuances I was ignorant of in areas that I was confident about. So I knew that I needed to work on those areas, and that gave me a direction to my preparation. The mocks also show you that there will be areas in which you won’t do well consistently. So it just makes sense to strategise accordingly and not attempt those areas, and instead build on the other areas of strengths. And of course, once you’ve taken a lot of mocks, the actual test seems a bit like a mock anyway, so the psychological pressure is just a little bit lower!
A lot of the time, candidates are just nervous and cannot speak up during a GD. So, they actually stop the discussion, because they want to gauge if the non-speakers actually know their content or not. And if they see that a candidate does indeed know their stuff, and he or she is someone they can work on and polish, they will still offer admission. There were candidates in my panel who probably did not come up with a brilliant solution to a problem, but they spoke, and they gave an opinion that made sense and was relevant, not just something out of a textbook. And they finally got the opportunity. So because the MSc Finance batch is such a small batch-sized course, the teachers and the faculty invest a lot.
Q. What are the things that one must take care of during GD? It is essential to sit for a couple of mock GDs before sitting for the actual one. That gives you a holistic perspective on the kind of GDs there can be, and how to navigate yourself through them. These mock GDs also help you get in touch with all the current happenings. And of course, brushing up your general knowledge helps enormously when you sit for a GD. You should also not interrupt people when they are putting across their views. Make your point clearly and be thorough with your content, as the B-school representatives or moderators who sit for the panels are smart enough to understand whether you are just beating around the bush, or you actually do have a point.
In the first couple of months, go through the entire curriculum, get the BRMs, the modules, identify your strengths and weaknesses.
The GD at JBIMS was unique, actually. For instance, the moderators never stop the discussion, and we students just keep talking. But during my JBIMS GD, we were actually made to stop, as three of the candidates were not speaking! JBIMS does this particularly, at least for MSc Finance, because since it is a batch of just 30, they want the best, and not candidates who are not good at their task.
For PIs, first and foremost, carry your resume. Next, being presentable is important. Wearing formals is a must, and you must take care of the little things, like keeping your shoes polished. As far as your resume is concerned, don’t put in content that you don’t know. You should be thorough with every single point in your resume. The panel might ask you a question from one of your projects that you mentioned in your resume, and you should be convincing in your answers. Otherwise, it’s a big trap that you’ll never know how to come out of.
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Q. Tell us about your group discussion experience at JBIMS.
Q. According to you, what are the important points one must remember before going for a personal interview?
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STUDENT SPEAK
Q. How was your PI? I had 20 minutes of a grilling interview that was purely technical. They wanted to test every bit of finance that I knew. They wanted to challenge me, find out if I was good being a chartered accountant, or not. So they tested me from apps to audit, options and derivatives. So personally speaking, it was core finance for me.
Q. Did you have any location preference while applying to B-schools? For me, the B-school brand mattered, and so did the course or the programme the institute was offering. The location was never really a priority. If I managed to get into the programme that I wanted and the brand that I was targeting, I would have moved. The same applies to my work as well, if it’s good, rewarding work, I will move.
Q. What are your plans after you finish MSc Finance? As of right now, I am interested in the field of equity research. I have been working in this field for 5 to 7 months now, and there are aspects that continue to intrigue me. I understand the core theory, but how it functions and how it triggers the markets is very interesting. If I had to think of a second option, I would choose corporate finance. That is more in line with what I have been doing in CA.
Q. You have completed one year at JBIMS. What’s your experience been like so far? This last one year has been immensely rewarding. It was a mix of good, bad and ugly emotions. Being in specific committees has their specific perks and privileges, but also their downsides. But it is essential to be a part of a particular committee. I’d say this to every person who joins a college like JBIMS, because that is how you get a tester of how a college functions, what being in a position of authority is like. Often, you can be sandwiched between the authorities. At JBIMS, that doesn’t happen much because we are left completely on our own. But, that pressure is required, because learning that will help you in your corporate life as well.
I have become more aware of my time and other people’s time, and I feel it is almost a sin to waste someone else’s time!
Q. How is life at JBIMS? As part of the campus life, what should one look forward to at JBIMS?
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On an ordinary day, you would probably spend 9 or 10 hours in college. Days are never really hectic, because they are interspersed with leisure activities as well.
JBIMS is a completely student-oriented college, so it is essential to have a close bond with your batch mates. So, from deciding who your faculty would be, to arranging the lectures and bringing companies on board, all of this is done completely by the students, the administration is not involved. For instance, there is a person in the student academic committee who schedules all the lectures with the professors. Basically, if you are in a particular committee, you know you are responsible for every one of your batch mates. JBIMS will make you immensely responsible and accountable to people. The faculty are either visiting faculty or industrial professionals. So more often than not, classes are held post lunch.
Q. What are your personal learnings after joining a B-school?
I have become more open about my opinions now. Also, I have become more aware of my time and other people’s time, and I feel it is almost a sin to waste someone else’s time! If I commit to something I stick to it. If you’re on your own, studying on your own, you tend to procrastinate. But JBIMS has really inculcated this feeling of staying committed to a task. I have also realised after coming to a B-school the critical importance of building contacts and networking.
Q. Anything you would like to tell future MBA aspirants? The first and the foremost thing you have to do is have an answer to the question: Why do you want to do an MBA? And even though you know your end career goal, when you are preparing for the tests, don’t stay hung up on whether you want to do an MBA in HR, Finance or Marketing, or any other field. Stay focussed on the fact that you are a student, and you first have to sail through your exams and your GDs and PIs in that phase. So basically, even though it is important to know the end point, you should always keep thinking about the path. A
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NEWS SNIPPETS
News in brief
Here are some interesting titbits from over the last month The Golden girl of India: Hima Das
France is the winner of the FIFA World Cup 2018
18 year old, Hima Das created history by winning India’s first gold medal at a global track event. Das clocked the finish line in 51.46 seconds at the IAAF World U20 Championships in Tampere, Finland. Her father is a farmer and she hails from Dhing, a small village situated around 30 km from Nagaon in Assam. Andrea Miklos of Romania came second with a timing of 52.07 seconds to claim silver, while USA’s Taylor Manson took home bronze after clocking 52.28 seconds.
France won the FIFA World Cup after beating Croatia’s bold challenge in a thrilling final in Moscow’s Luzhniki Stadium. This is the second time that France lifts the World Cup. It was one of the most exciting World Cup finals played in the recent times. Croatia and France delivered an exciting game that brought the joint highest goal tally in a final since 1958. Even though Croatian team goes back home as the beaten finalists, but they have surely won hearts and their approach to this match earned them a prolonged standing ovation.
Rupee plunges to record low
RSTAR to the rescue!
The Rupee has just hit a new all-time low, as it collapsed to a record low of 69.10 against the US dollar, as rising crude oil prices deepened concerns about the country’s current account deficit and inflation dynamics. The rupee had touched its previous record low of 68.86 per dollar on in November 2016. Global oil prices have climbed after the US asked its allies to end all imports of Iranian oil by November. Concerns over supply disruptions in Libya and Canada also pushed prices higher. Brent crude was trading at nearly $78 a barrel in Asian trade today. Given that India is the world’s third largest oil importer, any hike in global oil prices will inflate the import bill and disrupt the fiscal position.
The Rising Sprawl-Tuned Autonomous Robot (RSTAR) is a robot that can dig you out of the rubble. Scientists have developed this robot that can change its shape to crawl through tight spaces and climb over rough terrain. It can aid the rescue teams to locate and take out people trapped under debris. It utilises adjustable sprawling wheel legs attached to a body that can move independently and reposition itself to run on flat surfaces, climb over large obstacles and crawl through a tunnel or even narrow gaps . Its speed and relatively low energy consumption make the robot ideal for a broad range of applications that may require longer work time.
Loon, Google’s sister-company has partnered with Telkom Kenya to announce its first commercial deal to deliver connectivity to the remote regions of rural Kenya through a network of giant balloons. Originally known as Project Loon, the technology behind the internet balloons was developed under parent company Alphabet’s experimental division, X. Loon’s balloons float high in the stratosphere, around 20km above sea level; a height the company says is out of range of air traffic, storms and wildlife. The balloon that is the size of a tennis court is made from polyethylene, filled with helium and powered by a solar panel. The balloons are designed to stay aloft for months at a time, and move by surfing wind channels, predicting speeds and directions so that they can navigate in the direction they need to travel. Each balloon carries an antenna, which relays internet signals transmitted from the ground, extending coverage over an area of 5,000sq km.
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Balloons to bring internet in rural Kenya
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NEWS SNIPPETS
The Thai Cave rescue operation On June 23rd, 2018, the Moo Pa (Wild Boars) academy team had no idea what was in store for them. The team whose ages ranged from 11 to 16, became trapped with their 25-year-old coach, Ekaphol Chantawong, inside the six-mile Tham Luang cave in the Doi Nang Non mountain range. It was only after nine days that the rescue divers located the team of 12 boys and their coach alive and safe about 400 metres further along from the elevated area known as Pattaya Beach, sheltering on a ledge surrounded by water. The main entrance was separated from their refuge almost by two miles through a narrow and flooded passageway. Thankfully, it was a break in monsoon rains and authorities took advantage of that and began to immediately pump out water. The round-the-clock pumping paid off making it easier for the rescue team to approach the cave. The boys had no previous diving experience and yet the only way for them to be rescued was to use scuba equipment, so each boy was accompanied by two divers with the rescuers facing an 11-hour round trip.
Bank of Baroda’s war on bad loan recovery A dedicated team of lawyers has been set up by the Bank of Baroda to speed up recovery of bad loans that get entangled in litigation. The stateowned bank has 380 high-value bad loan accounts with a total outstanding of about Rs 15,000 crore. In these, the bank is either the sole lender or the consortium leader. Such recovery efforts are expected to bring back the bank’s profits, erased by higher provisions against bad loans. In the January-March quarter of 2018, the bank incurred a net loss of Rs 3,102 crore. In the same period last year, it had made a net profit of Rs 154 crore. The bank has also started special grooming of officers on various modes of recovery before they are posted to the stressed assets branches.
India scrapped 12% tax on sanitary products India has scrapped its 12% tax on all sanitary products following months of campaigning by activists. The announcement has been welcomed by the campaigners. This comes a year after the government introduced the tax, known as GST, on all goods, which included the 12% duty on menstrual hygiene products, as it was branded as luxury item.
Green signal from RBI to Federal Bank to open overseas offices The Kochi-headquartered, private sector lender Federal Bank has received the regulatory nod to open offices in Bahrain, Kuwait and Singapore, but is awaiting local clearances before it starts operations. The South based bank leads the diaspora remittance and it already has representative offices in Abu Dhabi and Dubai, and its desire to expand comes even as a majority of its larger peers are downsizing their overseas presence after the Nirav Modi scam and poor asset quality back home due to toxic loans. However, a timeline has not been set as to by when the bank expects the approvals from local regulators.
Patanjali broadens its product horizon further After successful launch of range of products, Baba Ramdev’s Patanjali is now planning to enter the Khadi and frozen vegetables market with an investment of Rs 10,000 crore. The company wants to open nearly 10,000 retail outlets across the country by 2019.
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Futuristic aircraft by Aston Martin Recently, Aston Martin unveiled ‘sports car for the skies’, the three-seater hybrid-electric vehicle at the Farnborough Airshow. This futuristic personal aircraft aims to revolutionize travel. The Volante Vision Concept design has vertical take-off and landing (VTOL) capabilities and will be able to hit speeds of around 200 miles per hour (322 kph). The Volante Vision Concept will take full advantage of the latest advances in aerospace, electrification and autonomous technologies, coupled with Aston Martin’s signature design. However, the vehicle is clearly a luxury product, thus pricing would commensurate accordingly.
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NEWS SNIPPETS
ATM Frauds In recent months there has been a spike in fraud cases related to ATMs. The government indicated that nearly a quarter of the ATMs run by public sector banks are vulnerable to frauds as 74% of the cash dispensers are running on outdated software. The statement on state-run banks came in response to a question in Parliament on ATMs running on software that was outdated and lack basic security features. The increase in fraud cases has prompted Reserve Bank of India to issue a fresh advisory, asking banks to upgrade software in a timebound manner and closely monitor compliance.
India among 10 Asian economies that might outperform US by 2030 A report by DBS says that Indian economy is expected to see robust growth and amount to over USD 28 trillion in real GDP terms on aggregate, more than the US by 2030. India is one of the Asian economies expected to outperform the United States in real GDP terms, along with China, Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. However, the report also mentions that these countries do face certain challenges too in terms of climate change, rising inequality, worsening environment for trade, and technological disruption that can drag growth numbers.
Herbal brands preferred over Colgate toothpaste? Patanjali is giving tough competition to toothpaste-giant Colgate as the country’s largest toothpaste maker Colgate-Palmolive saw its market share fall below 50% for the first time in decades in May even as Baba Ramdev’s Patanjali and other herbal brands continued to bite into the big multinational’s shares.
2019 will see a rise in hotel tariffs and airfares Rising oil prices are expected to push up the cost of air travel in 2019, with fares likely to rise by 2.6 percent and hotel rates might go up by 3.7 percent. Also, the downside risks from a trade war might impact certain countries including India, New Zealand, Norway, Germany and Chile, as airfares are expected to rise by more than 7 percent, said the annual business travel forecast from Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA). To maintain margins, airline fares have seen a steady increase.
Jeff Bezos is the world’s richest man Amazon founder, Jeff Bezos is the richest man in the world. He crossed another milestone as his wealth topped $150 billion, the highest ever by anyone in modern history leaving Microsoft co-founder Bill Gates at the second position, according to Bloomberg Billionaire index.
Venezuela inflation will hit 1,000,000 per cent in 2018, according to IMF The South American nation’s economy has been steadily collapsing since there has been a crash of oil prices in 2014 that has left it unable to maintain a socialist system of subsidies and price controls. IMF projects that Venezuela’s inflation rate is likely to top 1,000,000 percent this year. The nation has become one of the worst hyperinflationary crises in modern history.
French IT services group Atos, in its $3.4 billion acquisition of US information technology group Syntel will help in expanding their North America footprint. Both Atos and Syntel have a significant presence in India. Syntel, which has 23,000 engineers in 30 countries, has over 18,000 staff based in India. Atos has about 16,000 people. All of Syntel’s management team is expected to join Atos.
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Atos buys Syntel for $3.4 billion
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The future: AI, Machine Learning & Analytics Most of us understand how dependent we are on technology. Companies particularly are painfully aware that emerging uses of technology like artificial intelligence and machine learning can make or break their future. As a future manager, it makes perfect sense for students to delve into this domain. Dr Suresh Srinivasan
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recent report by global consultancy firm McKinsey states that today, artificial intelligence (AI) is packed into everything we see around us, from products and services that we buy to most of the customer problems that are being solved by companies. The report says that AI is ‘the’ transformational technology of our digital age, and its practical application throughout the economy is growing apace. According to management consulting firm Boston Consulting Group, rapid advances in machine vision and language processing are becoming organisational cornerstones. Companies are striving to strike a balance between people’s skill sets and machines, thereby radically enhancing their competitive advantage. This results in better understanding for the company, lets them address customer pain points, and at the same time do all of it with more efficient processes. Bain & Company, another of the Big Four consultancies, says that the next phase of
automation, based on machine learning, artificial intelligence and advances in robotics, will affect more than 50% of today’s workforce. The firm further cautions that the pace of such technological adoption will most likely become more rapid in coming years. So how significant are
Next phase of automation, based on machine learning, AI and advances in robotics, will affect more than 50% of today’s workforce. artificial intelligence, machine learning and analytics (AIMLA)? Are these only management jargon or catchphrases that help consultants make tonnes of money? Is AIMLA here to stay, gradually becoming inherently ingrained in the way companies are run, or is it just a passing phase like many
other technology jargon? As a student, do you really need to bother with what these are, and is this the right time for you to acquire skill sets in these areas, in addition to your domain expertise?
Here to stay The mega-trend that is clearly visible today strongly indicates that AIMLA has crossed the inflexion point. You don’t need to be a genius to figure out that AIMLA is the future, and it’s already here! Of course, as far as organisations are concerned, there are leaders and laggards in AI implementation; some companies—and industries—are far ahead of others in using AI to gain competitive advantage. At the end of the day, AI and machine learning are about accuracy in prediction, and many companies are fairly advanced, using large scale neural networks and algorithms that are learned and trained through large volumes of training data. The laggards will definitely need to catch up in the AI game in the coming days just to survive, let alone having competitive advantage.
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Well, all of these extensively use AIMLA.
Not quite ubiquitous
How it works Artificial intelligence is applied in machine learning. By training machines with adequate historic data, the algorithms gain an ability to automatically learn and improve from experience, without the requirement for any specific explicit programming. Data accumulation, writing
algorithms, training the algorithms and prediction forms the essential basics of machine learning. These are widely used in healthcare, aviation and many other sectors of the economy. You’ve certainly seen or used products like Google Assistant, Amazon Alexa and Watson Assistant pioneered by IBM?
Companies like Google, Amazon, IBM and Microsoft are miles ahead of the rest of the companies in their preparedness for AIMLA soaked products and services. However, even in developed economies like the US and Europe, many large companies are still only scratching the surface when it comes to AIMLA. Why are some companies far ahead of others in AIMLA adoption? Management foresight, access to skilled workforce and the ability to allocate funds to AIMLA projects are some of the reasons that help some companies leap ahead of others in AIMLA implementation. Many companies are fighting for their survival in competitive markets today, and are unable to convince shareholders to invest for the medium to long term. To be fair, there are risks today in AIMLA investments to a certain extent—standardisation of the
INDIA INC: AT A GLANCE Coca Cola joins race for GSK’s consumer healthcare biz
Coca Cola will jointly bid with other companies to acquire GlaxoSmithKline’s consumer nutrition business for around $4-billions. This will help Coca Cola gain a significant foothold in the lucrative pure health-nutrition space aimed primarily at children. Other companies in the acquisition race include Nestlé, Danone and Hindustan Unilever.
PayPal eyeing more acquisitions after iZettle
Auto industry deals at all-time high
The deals being made in the Indian auto industry are at an all-time high. Eighteen announcements have been made so far in this year, amounting to a total of around R3,500 crore. With a high level of technology disruption, inorganic growth strategy seems to be the main stay for large auto companies.
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PayPal Holdings Inc is looking for MORE acquisitions following its recent takeover of iZettle in May 2018, the Swedish fintech startup, for $2.2 billion, which was PayPal’s biggest ever deal. Earlier, PayPal’s largest acquisition had been that of Xoom Corporation in 2015, for the sum of $890 million. Fintech is a highly innovation driven segment where companies innovate through acquiring startups that push boundaries. Some of the biggest fintech companies in India include Paytm, Mobikwik, Mswipe, CCAvenue, Early Salary, etc.
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technology has not yet evolved, and there are still questions as to whether AIMLA projects should be done internally within the company or better outsourced to the so called consultants.
Implementation challenges Successful AIMLA implementation requires an intricate mix of data science knowledge, skill sets and programming tools along with business and domain expertise. Companies need to pay a price to either attract such unique skill sets within the company or outsource the AIMLA project to worthy third party consultants. Naturally, such initiatives come with substantial costs, and drain management time away from their day to day initiatives. Hence, they take a back seat. Given such a scenario, there is a natural tendency of the senior management of companies to procrastinate and delay investments in AIMLA, and resource allocations top such perceived ‘futuristic’ requirements. Such companies will soon realise that they have themselves out of the race and are behind the curve, and will be soon be forced to fall in line.
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AIMLA and decision making Managers at all levels take decisions. These decisions are required to solve problems that today are complex, in uncertain environments and a rapidly changing business landscape. Managerial decisions are regularly made in such dynamic environments, and no manager takes any decision with 100% information. All of these mean that the only confidence with which managers take decisions today in the midst of such uncertainties is based on the comfort factor that machine
Creating appropriate skill sets in the field of AIMLA can transform the managerial landscape in the country. learning and predictive analytics provide these managers. Decisions backed by data insight will become, or in fact is actually becoming, the new normal!
Nothing new The whole concept of AI is not new, neither is it a wave of tsunami that has just arisen. AI has been in practice since the mid-1950s and had been revived in the 1980s and 1990s, when many of the techniques including in the areas of data mining and medical diagnostics were commercialised. However, back then, AI could never progress beyond a certain point as it was bound by the lack of hardware to process large data sets. Then came the 2000s, which saw the emergence of cheaper hardware that could harness huge datasets. Especially with sensors become extremely affordable in the last few years, the ‘cybermechanical’ integration in the form of the Internet of Things (IoT) reaching new levels has now resulted in an explosion of data availability and capture. All of these, clubbed with data science skills sets, the capacity to write algorithms and managerial insights to solve business problems has now pushed deep learning and predictive analytics to the forefront in the last few years.
What you need to do If we look at this mega-trend from a student’s point of view, and take a medium to long term view of your careers and the type of skill sets which employers will look for in you, the pieces will easily and obviously start falling in place. Data science knowledge and skill sets, programming tools like Python and natural language processing, clubbed with a strategic thinking mindset with clear understanding of business and domain specifics are skills that you need to steadily acquire and equip yourselves with in order to be marketable. Gaining a strong grounding in statistical techniques will help you hone your business, functional and strategic thinking skill sets, as leadership at all levels require some amount of hands-on computing capability. Basic techniques like descriptive statistics and inference, moving to regression analysis and then further moving to advanced techniques like clustering, dimensionality reduction and ensemble learning techniques, slowly but steadily, builds a solid base for aspiring managers. Some business schools are thinking ahead of the curve and have realised that creating appropriate skill sets in the field of AIMLA has a potential to transform the managerial landscape in the country. Business schools like Great Lakes Institute of Management, Praxis Business School, etc, have pioneered nurturing business analytics over the last five years. Now with specialised majors in the area of AIMLA, such institutes are also addressing the much needed raw material, i.e., the potential managers with requisite skill sets to power the AIMLA movement and advance the same globally! A
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Trading blows in a global trade war The trade war sparked off by the US primarily with China shows no signs of deescalating, with both countries retaliating against each other’s measures. The US targeted other countries as well, including India. However, all of this may well result in an actual weakening of the US economy, instead of the opposite.
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arly in July of 2018, the Donald Trump-led United States administration slapped a 25% import duty on close to US$35 billion of Chinese goods imported into the US. In obvious retaliation, China immediately reacted by announcing duties and tariff on US imports. Within a week, the US responded by expanding the list to cover import items that accounted
for more than US$200 billion, with a 10% import duty. China responded to this as well. For instance, China has imposed an additional duty of 25% on all imports from US with respect to soya bean, chemicals and medical equipment.
Logic behind the war The whole idea and the philosophy behind US President Donald Trump’s trade war is to protect the American domestic industry.
Effectively, Trump has gone on record multiple times stating that such a move would save jobs in the homeland, bring back investments into the country and turn it back into a vibrant manufacturing hub. These were some of the promises based on the back of which he, and the Republicans, came to power a couple of years ago. As a part of the presidential campaign, Trump had also given his commitment to reduce trade deficit with China, which currently stands at around $400 billion. The US’s consumption of Chinese consumer goods alone is close to a trillion and a half dollars. iPhones, for instance, are assembled in China and imported into the US. Annually, the import of the iPhone reaches a staggering number close to 60 million phones. This results in a trade deficit of around $15 billion for just one model of iPhone alone. The way the import tariffs are currently being levied by the Trump administration have left critics scratching their heads on whether there is any kind of coherent strategy to achieve the campaign promises, or if these are absolutely indiscriminate and nothing but knee jerk reactions.
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Dr Suresh Srinivasan
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Is the Trump administration shooting itself in its foot? The trade war seems to be an indiscriminate move, because, although it initially appeared that the US’s guns were trained on China alone, the Trump administration initiated tariffs on a range of imports from steel to aluminum from many other countries as well. The European Union, Canada and India were not spared. In near outrage, many countries and blocks in Europe retaliated strongly, stating that it would impose tariffs on US products on the likes of Harley Davidson, Levis jeans and other American products. This may have given the Trump administration pause, as it gradually started to exempt countries from the enhanced tariffs.
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Impact on China The trade war fired off by Donald Trump has already started to create damage, and till date, the Chinese seems to be the most impacted. It is well known that China has traditionally been an export oriented economy, although the government has been seriously pushing for domestic consumption to drive growth in the last few years. However, over the last few months, the trade war between China and the US has steadily escalated. And at the end of the day, China still being a highly export dependent economy, such tariffs hurt it badly! China has been grappling with other economic problems as well, including a high level of debt, less growth and a currency that is highly manipulated and known to be so. In such a context, the trade war with the US comes at a highly inopportune time, even as the country is in the midst of addressing its economic
problems. Naturally, it could seriously aggravate the situation. Market sentiments too are negative, and the Chinese stock markets have responded adversely to the ongoing US trade restrictions. The Shanghai composite index is already down by close to 15% during the current year (at the time of this magazine going to press). The sentiments in the entire Asia Pacific region too have been pretty negative, including in countries like Taiwan and South Korea.
Harley ignites Indo-US trade conflict With respect to India’s trade with
Market sentiments too are negative. Chinese stock markets have responded adversely to the ongoing US trade restrictions. the US, American motorcycle manufacturer Harley Davidson served as the flint that ignited the fire. Harley Davidson motorcycles had been taxed at 100%; Trump continued to be unhappy even when India reduced duties on Harley motorcycles to 75%, followed by a further reduction to 50%. Ultimately, Trump was batting for a zero tax benefit for Harley motorcycles, as the US does not reciprocally tax Indian motorcycles imported into the US. The trade policies between the US and India started getting complicated when US taxed Indian aluminum and steel.
India has not fully retaliated yet; rather, experts believe the Indian administration is only contemplating introducing import duties close to around US$250 million on 30 import items from the US. These items include dry fruits, chemicals and high capacity motorcycles, including many higher end models of Harley Davidson. Indian stock markets have also not reacted to the situation. It is possible that Indian companies view these developments more as an opportunity for boosting India’s own exports, which is one of the main agenda points in its policy making. Given the high tariffs China is imposing on US imports, a potential gap can emerge in the export of Indian goods to China, especially those that China is currently importing from the US on a large scale. These goods include soya bean, groundnut and oilmeals, of which India has a surplus capacity to export. The price of these goods imported from India can become far more competitive when China imposes such enhanced tariffs on the US imports.
Impact on US firms Trump’s trade policy is now definitely having its effect on American corporates. Harley Davidson, for example, which has manufacturing bases outside the US in countries like India, Brazil and Australia, is now planning to shift more operational capacity out of the US as the trade war between the US and India continues to escalate. Given that one of Trump’s presidential campaign promises was to increase manufacturing capacity in the US, moves like Harley’s flight from the US point to the exact opposite, and additionally, also defeats another of Trump’s promises of creating
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more jobs within the US. Many more American companies are also bearing the brunt of the trade war. For instance, in the recently concluded Farnborough Air Show, orders booked by European aircraft manufacturer Airbus for supply of commercial aircraft to airlines around the world has surpassed the orders bagged by the American company Boeing. This sends a very clear signal that US companies are bound to be singled out by global companies and countries when the choice of products and imports come up. This is a harsh reality that the Trump administration will have to face. American companies will now need to lobby to ensure that the Trump administration takes a more balanced and sensible approach
when it comes to policy making, with respect to global trade. To summarise, the global trade war that is unfolding is not a very healthy development in the global context. The Trump administration’s move against all logic to introduce punitive tariffs on imported steel and aluminum has hit the credibility of the World Trade Organization (WTO). The Chinese have already filed a complaint against the US at the WTO after Trump called for placing additional tariffs, and although China has been known break rules in the past, especially in unduly devaluing its currency, thereby giving Trump a reason to retaliate, the route Trump has chosen may wipe out whatever little he has positively done for the US economy.
The US, for sure, needs to consider the health of the Chinese economy, and cannot inflict such a blow on it, given the economic challenges China is currently facing. Still being a high growth economy, a weakening of the Chinese economy can impact the region adversely, and the overall exports of the US to the region is an issue that has the worrying potential of triggering off a weakening global economic trend. More importantly, such incoherent policies unduly weaken the position of American companies globally, thereby hurting job creation within the US! In all, the notion of free trade and free markets seems to be slowly slipping into a distant dream, which is not a healthy development, and the US needs to sit up and take notice. A
INDIA INC: AT A GLANCE Regulatory nod to RInfra’s sale of Reliance Energy stake to Adani
The Maharashtra Electricity Regulatory Commission (MERC) has approved the proposed stake sale of Reliance Infrastructure’s integrated Mumbai power business (also known as Reliance Energy) to Adani Transmission Ltd (ATL). The sale value is estimated at R18,800 crore. RInfra is planning to use the proceeds of the deal to pare its debt of R15,000 crore. Reliance Energy distributes power to nearly three million residential, industrial and commercial consumers and covers an area of 400 sq km. It caters to a peak demand of over 1,800 MW, with annual revenue of R7,500 crore with stable cash flows
DoT gives conditional nod to Vodafone-Idea merger
The regulatory approvals are coming in for the mega merger of Vodafone India with Idea Cellular. The Department of Telecommunications (DoT) has conditionally approved the merger. The conditions include an upfront payment of R7,268 crore, split between a bank guarantee of R3,342 crore for one-time spectrum charges claimed from Idea and a cash payment of R3,926 crore towards one-time spectrum charge from Vodafone India. This will be the largest merger in the telecom sector and will catapult the company ahead of Bharti Airtel. Currently, Airtel has just over 31% of the revenue market share, while the combined VodafoneIdea entity will have 37.5%. Reliance Jio will be third with around 14.5%.
M&As amount to R5,500 crore in 2018
Indus Software taken over by Ebix
After acquiring payments solution firm ItzCash and e-learning firm Smartclass Educational Services, Ebix Inc acquired Pune-based Indus Software Technologies for about $29 million. The acquisition of Indus will increase the employee strength of Ebix in India by 900 to nearly 7,200 employees.
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The tale of Mergers and acquisitions (M&A) continues in India, with deals announced with respect to Indian companies reaching close to around R5,500 crore during the first half of the current year. This is more than double as compared to the last year.
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The fall of the Indian rupee: Is all well? Most Indians have watched the plunge of the rupee to nearly `70 to a dollar with growing concern. Several factors have contributed to this fall, including rising prices of crude oil and the global trade war sparked by the US. An analysis of what led to the rupee’s fall, and what we can expect in the near future. Dr Suresh Srinivasan
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uring 2018, the Indian rupee has continued to weaken steadily. From the beginning of this year, the rupee has lost almost 7%, and is now inching closer to `70 to a US dollar. In fact, for the first time in history, the rupee has actually breached the `69 to a US dollar mark! Things could have been worse, the rupee may have broken through the `70 mark as well, but interventions by the Reserve Bank of India (RBI) have managed to arrest the freefalling rupee. Although there is a multitude of reasons for such a weakening, a couple of factors that drag the rupee down are extremely obvious—the increasing price of crude oil, and the fear of escalation in the global trade war.
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Factor 1: The crude truth
international price of Brent crude oil has increased by around 20% during this year alone, and has crossed $80 to a barrel. It is to be noted that this is the highest the price has reached in the last four years. Geopolitics is the main reason for such an increase in crude price. The Donald Trump-led United States administration recently pulled out of the Joint Comprehensive Plan of Action (JCPOA), more commonly known as the Iran Nuclear Deal, which was signed between Iran and the United Nations Security Council comprising China, France, Russia, the United Kingdom, United States and Germany in 2015. The US’s
controversial action of pulling out of the agreement and warning Iran that the strongest ever sanctions were likely to follow triggered off a series of uncertainties, resulting in the eventual increase in the price of crude oil.
India’s import of crude India imports large volumes of crude from Tehran; it is the largest supplier to India after Saudi Arabia and Iraq. India imports close to 0.8 million barrels a day from Iran. Tehran is considered to be a trusted trade partner of India, and offers favourable terms for its supply of crude oil to India. India may have to suspend this
The steadily increasing price of global crude oil is a major factor that contributes to the weakening of the Indian rupee. From the beginning of the year, international crude oil prices have largely risen. The
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Inflation With crude price ever increasing and fuel price rising at the pumps, inflation is steadily growing. Retail inflation reached its highest levels in the last five months. For the last eight months, inflation had remained higher than the RBI’s medium-term target of 4%. The Reserve Bank of India (RBI) increased interest rates for the first time in the last four years to battle inflation. Although inflation has not been a major issue up until this point
in time, it is seen as a problem in the near term future, as crude prices remain high, with an outlook to increase further. The depreciation of the rupee is expected to increase the import bill of crude oil, thereby exerting pressure on the fiscal deficits, which as all of us know is already under enormous strain.
Factor 2: Trade war The second major reason for the weakness in the Indian currency is the brewing global trade war. Trade war not only infuses negative sentiments in economies, but also has another
In 2018 alone, retail prices of petrol in the pumps have increased close to 10% and diesel by around 15%. dimension to it—triggering off a global currency war. With global oil prices increasing, most of the Asian economies, which are net oil importers, will demonstrate a trend of weakening currencies. If India does not depreciate its currency and forcefully hold it up, as it did recently through the RBI’s intervention, then the Indian exports could become uncompetitive in the global markets. In essence, it would be a healthy trend for India to allow its currency to depreciate in line with the rest of the regional currencies, in order to remain export competitive.
Factor 3: cooldown
Investment
The third reason why the rupee is seeing such depreciation is due to the fact that foreign investors are pulling funds out of emerging markets, including India. The foreign portfolio investors have pulled out close to US$2 billion from the Indian markets. India’s foreign currency reserves are also steadily falling, and have now been depleted by more than $5 billion within a short span of two weeks. The total reserves are now inching closer to breach the $400 billion mark. If the RBI attempts to arrest a further fall in the value of the Indian rupee and decides to intervene, the reserves would plunge further to breach the $400 billion mark. Traditionally, the impact on exports is considered to be positive when the currency depreciates. However, this may not hold true in the current scenario. This is mainly because it is not only our currency that is depreciating. Since all Asian economies are facing the same issue, India will not really gain any undue advantage. Going forward, it is expected that the rupee could depreciate further, and will most likely breach the `70 to a US dollar mark, and be range bound between `69 and `72 to a US dollar. India’s dollar denominated oil imports will now increase, thereby exerting pressure on the Indian rupee. This will lead to inflation and consequently increased interest rates, which in effect means that the liquidity of funds in the market will reduce, thereby reducing the growth rate of the economy. At a time when the government is going all out to demonstrate higher growth, such a scenario will be a surefire dampener. More importantly,
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favourable track of imports from Iran. Clubbed with the fact that the US is calling for more severe sanctions on Iran, and India is importing close to 80% of its crude oil requirements, analysts claim that the increasing crude oil price is one of the major risk elements that confronts the Indian economy today. The risk perception is high and hence, there is a fear that the rupee will depreciate even further in the future as well. A depreciating rupee along with higher oil prices is a major dampener for the Indian economy. Over the last four years, the current NDA government has been lucky as the oil price has remained quite low. This has greatly helped the government in keeping the budgetary deficits low. However, as we creep closer to the election year of 2019 and with the oil price inching upward, the economic health of the country looks to be in for a shake up. In 2018 alone, retail prices of petrol in the pumps have increased close to 10% and diesel by around 15%. This is an extremely sensitive issue when it comes to the sentiments of the voting public, especially in the election year.
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populist spending will expand the deficit, which is something the government is seriously attempting to consolidate and curtail. So from a pragmatic point of view: Can the government come up with alternatives to fix the problem at the earliest? Not really. And that is certainly not good news for the current government that is aspiring to run for a second term. On balance, two main issues will drive the strength of the Indian rupee. How the crude oil price moves over the short to medium term, and the extent to which our Asia Pacific neighbours depreciate their currencies. India needs to ensure that its currency
Rupee could depreciate further, and will most likely breach the R70 to a USD mark, and be range bound between R69 and R72 to USD. depreciates almost in line with the regional currencies in order to ensure the competitiveness of its exports. This could, however, be further aggravated by the trade war, if it gets escalated, which
can exert further pressure on the currency of countries in the region. Overall, the weak outlook of the Indian rupee, prevailing weak economic conditions and election year approaching, in totality, spell negative sentiments. It is not difficult to realise that the outlook is going to be complex and uncertain. A Dr Suresh Srinivasan is a Chartered Accountant, has an MBA (Bradford UK) and a Doctorate in Strategy. He is the Director of the 2-year PGDM at Great Lakes Institute of Management, as well as a Professor (Strategy & Accounting). He is also a management consultant.
INDIA INC: AT A GLANCE India, Japan help raise acquisition volumes
Blockbuster deals in Japan and India helped push acquisition volumes in the Asia Pacific region to a record high during the first half. Asia-Pacific companies were involved in $734 billion of announced mergers and acquisitions in the first six months of this year, according to data compiled by Bloomberg.
Adani to acquire L&T’s Marine Infra co?
Adani Ports and Special Economic Zone (APSEZ) has announced that it is in talks with Larsen and Toubro (L&T) to acquire its 97% stake in Marine Infrastructure Developers Pvt. Ltd. (MIDPL), the developer and operator of Kattupalli Port near Chennai, for R1,950 crore.
Fairfax acquires ITI Reinsurance
The Prem Watsa-led Fairfax Financial Holdings unit Digit Insurance has acquired privately owned reinsurer ITI Reinsurance from Fortune Financial Services, an associate of Sun Pharma’s Dilip Shanghvi, for about R500 crore. This is being looked at purely as a long term investment, a spokesperson has said.
Walmart pushes Flipkart deal back by 3 months
There seems to be a number of delays in Walmart closing the Flipkart acquisition. Walmart is postponing the completion date for its acquisition of the 77% stake in Indian e-commerce upstart Flipkart to June 7, 2019. This is around three months after the original deadline that had been set for March 9, 2019. Meanwhile, Walmart’s acquisition of Flipkart has made several of the rich richer. Sachin Bansal, who co-founded Flipkart with his friend Binny Bansal in 2007, is estimated to have pocketed around R5,500 crore from the acquisition, through his exit as a shareholder.
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Ikea to open first India outlet in August
Swedish furniture and furnishings giant Ikea is readying to open its first Indian mega-store in August, in the Telangana capital of Hyderabad. Known for its iconic products and design, as well as competitive pricing, Ikea has brand appeal among urban residents. It remains to be seen whether the pricing strategy of the global furniture giant will be competitive enough to attract a large market segment or if it will cater to those with a higher disposable income.
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STUDY HOUR
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Are you a Brainiac? In this section, we shall explore several different types of questions from the various areas of entrance exams like the CAT, CET, GMAT, etc, and how to best solve them.
Quant DIRECTIONS for questions 1 and 2: Answer the questions on the basis of the data given below. The factorial of a natural number ‘n’ (or n!) is defined as the product of all natural numbers less than or equal to ‘n’.
DIRECTIONS for question 3: Answer the questions independently of each other. 3.
Given: m = 1! + 2! + 3! + 4! + …. + 99! + 100! 1. Find the last two digits of ‘m’. 1] 3 2] 9 3]13 4]19 Exp: 10! is the least factorial, which has two zeros at its end. ∴ The last two digits of m will be same as that of 1! + 2! + … + 9!. The last two digits of 1! + 2! + … + 9! = 1 + 2 + 6 + 24 + 120 + 720 + 5040 + 40320 + 362880 are 13. Hence, [3].
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2. Find the remainder, when ‘m’ is divided by 168. 1] 33 2] 129 3] 153 4]67 Exp: 168 = 23 × 3 × 7 ∴ 7! = 1 × 2 × … × 7 = 23 × 3 × 7 × (5 × 6) is divisible by 168. Hence, all factorials from 7! to 100! are divisible by 168. The remainder obtained by dividing ‘m’ by 168 is the same as that obtained by dividing 1! + 2! + … + 6! by 168. Now, 1! + 2! + … + 6! = 1 + 2 + 6 + 24 + 120 + 720 = 873 = 168 × 5 + 33. Hence, the remainder is 33. Hence, [1].
In the given figure, m∠ACD = 20°, m∠ABD = 40° and BC = BD = AC. Find m∠BAC. 1] 40° 2] 70° 3] 60° 4] 55°
Exp: Let m∠ACB = x°, then as BC = BD m∠BDC = m∠BCD = m∠ACB + m∠ACD = (x + 20)° => m∠CBD = 180° – 2 × (x + 20)° = (140 – 2x)° (sum of all angles of a triangle is 180°) Now, in ∆ABC, BC = AC => m∠BAC = m∠ABC = 40 + m∠CBD = (180 – 2x)° and 2 × (180 – 2x) + x = 180° => 3x = 180° x = 60° ∴m∠BAC = 180° – 2x = 180° – 120° = 60°. Hence, [3].
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Verbal
Q.1 A. Having thus compared state and non- state dispute resolution systems with respect to civil justice, it is time to turn to criminal justice. B. Here we immediately encounter two basic differences between the two: first, state criminal justice is concerned in punishing crimes against the state’s laws. C. The purpose of state-administered punishment is to foster obedience to the state’s laws and maintaining peace within the state. D. A prison sentence imposed upon the criminal by the state doesn’t, and isn’t intended to, compensate the victim for his injuries. E. Second, as a result, state civil justice and criminal justice are separate systems, whereas these systems are not distinct in non-state societies.
1] A & B 2] A, C & E
3] B, C & D 4] D & E
Q.2. A. Sunshine pierced the haze that had enveloped London. B. It came down Fleet Street, turned to the right, stopped at the premises of the Mammoth Publishing Company, and, C. entering through an upper window, beaming pleasantly upon Lord Tilbury, founder and proprietor of that vast factory of popular literature, D. as he sat reading the batch of weekly papers which his secretary has placed on the desk for his inspection. E. Among the secrets of this great man’s success was the fact that he kept a personal eye on all the firm’s products.
1] A & D 2] A, B & C 3] A, B & E 4] C, D & E DIRECTIONS for question 3: The passage given below is followed by a question. Choose the most appropriate answer.
Q.3. Reading has always been different from writing. Writing prioritizes sound, as the spoken word must be transformed or deconstructed into representative sign(s). Reading, however, prioritizes meaning. The faculty of reading has, in fact, very little to do with the skill of writing.
Which of the following, if true, weakens the above argument the most? 1] A person who knows how to write must also know how to read. 2] One cannot read anything that hasn’t been written in the first place. 3] It is not possible to write anything coherent without paying at least some attention to the meaning. 4] In languages such as Chinese, the script is based on the meaning of the words, not their sound
Answers: 1. Statement A suffers from a dangling modifier: the clause beginning with ‘having’ does not have any subject in the rest of the sentence, which reveals who is doing the comparing. ‘It is time to turn to’ should be changed to something like ‘we should now turn to’. There is a prepositional error in statement B: ‘concerned’ should be followed by ‘with’ not ‘in’ in this context. In statement C, there is a parallel construction error: the verbs ‘foster’ and ‘maintain’ are parallel, so they should be in the same form, i.e. the infinitive form. The remaining two statements, D and E, are grammatically correct. Hence, [4]. 2. There is a parallel construction error in statement C: the correct form of the verb should be ‘beamed’ not ‘beaming’, in order for it to be parallel to the verbs ‘came’, ‘turned’ and ‘stopped’ in the sequence (in statement B). There is a tense error in D: since the event described is in the past tense, the verb ‘place’ should be in the past perfect not present perfect, i.e. ‘had placed’ not ‘has placed’. Note that ‘to keep a personal eye on something’ in E is simply another way of saying ‘to keep an eye on something personally’. Statements A, B and E are correct. Hence, [3]. 3. The given argument states that reading and writing are very different activities and not closely connected at all, with reading focused on meaning and writing focused on sound. Option [4] challenges this dichotomy, but only for specific languages like Chinese, not all languages. [3] makes a similar point, but a phrase like ‘at least some attention’ makes it rather vague and feeble. The argument claims that writing ‘prioritizes’ sound, not that it doesn’t pay any attention to meaning. In [2], it is not necessarily the same person who does both the reading and the writing, so it does not really affect the argument. But the opposite is true in [1] – a person who can write must, of necessity, also be able to read, so the two abilities are inextricably intertwined. This weakens the argument that the two have little to do with each other. Hence, [1].
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DIRECTIONS for questions 1 and 2: In the following questions, there are sentences that form a paragraph. Identify the sentence(s) or part(s) of sentence(s) that is/are correct in terms of grammar and usage (including spelling, punctuation and logical consistency). Then, choose the most appropriate option.
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WORD DOSE
Of biomes and the spud In this fertile central region of Chile, the rain gauges record ten to eighty inches annually, a precipitation to the liking of that portion of the evergreen sclerophyllous biome, which here faces, across 8000 miles of Pacific Ocean, its more illustrious Australian counterpart. To the north, presumably, it peters out; to the south, where the annual rainfall is closer to eighty inches than ten, where fogs and mists abound, and where rivers and lakes have not yet become glaciated masses of solid ice, the evergreen sclerophyllous biome has wet ears and wet feet, a circumstance which, towards the Pacific Coast from where this writer pens these lines, would surely evoke the mountain grey gum, the messmate stringybark and the brown barrel, the last known to our local timbermen as cuttail. But in Chile, we are marching, with the old Imperial Incas, who acted, like the Romans before them, as margraves to their civilization, up against the huge Gondwanan rainforests, at first subtropical rather than temperate, and rooted in deep, fertile soils, produced by the region’s innumerable volcanoes. And to those who define Civilisation as any place conducive to the cultivation of the spud, this is sacred ground, for the evidence suggests that Solanum tuberosum, a nightshade, originated in these uplands of southern Chile. An extract from David Foster’s The Glade Within The Grove
MAT CH T HE WO R D S W IT H T H E IR M EA NING S 1. Fertile (fur-tahyl) (adj)
7. Presumably (pri-zyoo-muhblee) (adv)
13. Timbermen (tim-buhr-men) (n)
2. Rain gauge (n) 3. Precipitation (pri-sip-i-teyshuhn) (n)
8. Peters (pee-ters) (v) 9. Abound (uh-bound) (v)
15. Rooted (roo-tid) (adj)
4. Liking (lahy-king) (n)
10. Glaciated (gley-see-ey-ted) (adj)
5. Illustrious (ih-luhs-tree-uhs) (adj) 6. Counterpart (koun-ter-pahrt) (n)
a. Preference or inclination, a taste for something b. Decrease or fade gradually before coming to an end c. Another word for potato
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d. Producing or capable of producing abundant vegetation or crops
14. Margraves (mahr-greyv) (n) 16. Conducive (kuhn-dyoo-siv) (adj) 17. Cultivation (kuhl-tih-vey-shuhn) (n)
11. Pens (pens) (v)
18. Spud (spuhd) (n)
12. Evoke (ih-vohk) (v)
g. Bring or recall (a feeling, memory, or image) to the conscious mind
m. Tending to produce, helpful, favourable
h. A device for collecting and measuring the amount of rainfall
o. Persons who work with timber (wood prepared for use in building and carpentry)
i. Covered or having been covered by glaciers or ice sheets
p. Used to convey that what is stated is very likely, though not known for certain
e. A person or thing that corresponds to another person or thing in a different place or situation
j. Exist in amounts
large
numbers
or
f. Rain, snow, sleet, or hail that falls to or condenses on the ground
l. The action of cultivating land to grow crops
k. Highly distinguished, renowned, famous
n. To put down in writing
q. With roots deep inside the soil; Establish deeply and firmly r. The hereditary title of some princes of the Holy Roman Empire
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April 2018 August 2018 only.
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A quiz to boost your General Knowledge 1. The 2018 ICC Women’s World T20 tournament is the first stand alone ICC women’s event in the shortest format of cricket, and will be held in November this year. There will be a total of 10 teams in the tournament. In which country will it be held? a. West Indies b. India c. England d. Australia
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2. Which of the following IITs generates the highest revenue through research, inventions, consultancy and patents? a. IIT Madras b. IIT Delhi c. IIT Bombay d. IIT Kharagpur 3. The Great Barrier Reef, a UNESCO world heritage listed site, has been adversely affected by rising sea temperatures due to climate change. The 2,300-km long reef contains the world’s largest collection of coral reefs, and houses 1,500 species of fish and 4,000 types of mollusc. Recently, which of the following countries has announced plans to try and save the reef? a. Japan b. Australia c. Indonesia d. Maldives 4. Who among the following actresses was conferred in
June 2018 the prestigious Chevalier dans l’Ordre des Arts et des Lettres, or the French distinction of Knight of the Order of Arts and Letters, for her contribution in enhancing Indo-French ties in cinema? a. Kalki Koechlin b. Deepika Padukone c. Twinkle Khanna d. Konkona Sen Sharma
5. This state government has launched the online portal ‘Aabhaar Aapki Sewa Ka’ for pensioners, in order to provide transparency in pensions. Through the portal, 80,000 pensioners of the state will now get all the information related to pension and payment online. Which state has launched the portal? a. Gujarat b. Maharashtra c. Madhya Pradesh d. Chattisgarh 6. This drug is a naturally occurring hormone that causes uterine contractions during labour and helps new mother lactate. However, its misuse in the dairy industry has led to the Government of India banning the manufacture of the drug’s formulations, except for domestic use to the public sector only. Name the drug. a. Prolactin b. Oxytocin c. Serotonin d. Endorphin
7. A law has recently been passed declaring that only Jews have the right of selfdetermination in the country. The law stipulates that this country is the homeland of the Jewish people, and strips Arabic as an official language alongside Hebrew. Members of the Arab community have condemned the law as racist and bordering on apartheid. Name the country. a. Iraq b. Palestine c. Israel d. Jordan 8. Lawrence Haddad, a British economist, and David Nabarro, who has worked with the WHO and UN on health and hunger issues, have been recently awarded which of the following prizes of 2018 for improving the availability of nutritious food for pregnant women and children to reduce the effects of malnutrition in developing countries? a. World Food Prize b. World Health Prize c. World Nutrition Prize d. Nobel Prize for Healthcare 9. According to data on language released as part of Census 2011, which is the most spoken language in India, that has risen from 41.03% in 2001 to 43.63% in 2011? a. Gujarati b. Telugu
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c. Bengali d. Hindi
10. The Supreme Court of India recently ruled that women have the constitutional right to enter the famous Sabarimala temple, with a 5-judge constitution bench stating that women have as much right to pray in the temple as men without being discriminated against. The temple is located in which state? a. Haryana b. Kerala c. Andhra Pradesh d. Bihar 11. Spectre and Meltdown are devastating vulnerabilities that affect modern PCs, causing various problems such as slowdown, reboots, as well as raising security concerns about attackers exploiting security weaknesses and accessing security keys, passwords, and files. These vulnerabilities affect which of the following? a. Intel processors b. AMD processors c. Motherboards d. RAM 12. The UN Micro, Small and Medium-sized Enterprises (MSME) Day is observed every year to recognise the importance of MSMEs in achieving sustainable development goals and in promoting innovation, creativity and sustainable work. On which day is the UN MSME Day observed? a. June 24 b. June 25 c. June 26 d. June 27
13. Which of the following IITs have developed the online tool “TreadWill” to help people deal with stress, lethargy and other depressive symptoms through different online exercises, questionnaires and games? a. IIT Kharagpur b. IIT Khanpur c. IIT Bombay d. IIT Delhi 14. Which union ministry has published a report entitled Women in Prisons, which aims to build an understanding of the various entitlements of women in prisons, issues faced and possible methods for resolving them? a. Ministry of Social Justice b. Ministry of Home Affairs c. Ministry of Women and Child Development d. All the above ministries, jointly 15. Left handed batsman Fakhar Zaman recently broke several records, one of which was the fastest to score 1,000 runs in one day internationals, beating the likes of Vivian Richards, Kevin Pietersen and Babar Azam. Which country does Zaman belong to? a. West Indies b. South Africa c. Pakistan d. England 16. The Government of India recently increased the monetary threshold for filing appeals in tax disputes in courts and tribunals in an effort to bring down the tax litigation in the country. What is the new monetary threshold for filing appeals in tribunals?
a. `10 b. `35 c. `25 d. `20
lakh lakh lakh lakh
17. In the 2018 Global Real Estate Transparency Index (GRETI), the UK tops the list, followed Australia and the US. Other countries in the top ten include France, Canada, Netherlands, New Zealand, Germany, Ireland and Sweden. What is India’s rank? a. 28 b. 35 c. 42 d. 66 18. Who is the author of the book Sapiens: A Brief History of Humankind? a. Yuval Noah Harari b. Stephen Hawking c. Arnold J Toynbee d. J Bronowski 19. Which of the following state governments recently launched the ‘I am not afraid of English’ initiative to make primary school students fluent in English? a. Chattisgarh b. Uttar Pradesh c. Haryana d. Jharkhand 20. The world’s largest visa center is also an Indian visa center, with 18,500 square feet of commercial area. It was launched recently by Indian home minister Rajnath Singh in which of the following cities? a. Dubai b. Bangkok c. New Delhi d. Dhaka 21. The 2018 Nelson Mandela
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International Day was dedicated to ‘Action Against Poverty’, honouring former South African President & Nobel Peace Prize winner Nelson Mandela’s leadership and devotion to fighting poverty and promoting social justice for all. On which day is the Nelson Mandela International Day observed? a. February 11 b. August 5 c. December 5 d. July 18
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22. India’s first greenfield skill training center will be established in order to impart training to the trainers and create a skillbased ecosystem to meet expectations of the industry. Students will be trained in SAP, Internet of Things (IoT), healthcare and agriculture, mobile repairing, solar technician and technician mechatronics, IT Networking and Cloud Computing, etc. In which state will this center come up? a. Tamil Nadu b. Odisha c. Gujarat d. Assam 23. The 5-day World Sanskrit Conference has delegates from over 40 countries attending, and the purpose of the conference is to promote, preserve and practice the Sanskrit language across the world. In which country was the 17th edition of the World Sanskrit Conference held in 2018? a. India b. Mongolia c. Indonesia d. Canada
How to Play Fill in the grid so that every horizontal row, every vertical column and every 3x3 box contains the digits 1-9, without repeating the numbers in the same row, column or box. You can’t change the digits already given in the grid. Every puzzle has one solution. Hint: Don’t fill in numbers at random. While filling a particular square, write numbers 1-9 on a pad and start eliminating those numbers that already appear in the same row, column or 3x3 box.
ANSWERS GLOBESCAN
SUDOKU
1.a 2.c 3.b 4.a 5.d 6.b 7.c 8.a 9.d 10.b 11.a 12.d 13.b 14.c 15.c 16.d 17.b 18.a 19.c 20.d 21.d 22.b 23.d
For more similar puzzles, visit: www.sudoku.com
1.d
WORD DOSE
2.h
3.f
4.a
5.k
6.e
7.p 8.b 9.j 10.i 11.n 12.g 13.o 14.r 15.q 16.m 17.l 18.c
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