editor from the
www.advancedge.com Editor-in-Chief Kamlesh Sajnani
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Contributors Dr Suresh Srinivasan
Write to the editor at: editor@advancedge.com
I like to play the guitar. In my youth, I used to quite active on the music scene, singing and rocking with the city bands. The years have taken a toll on me, of course, but music remains an integral part of my life. It’s what I identify with, what makes me who I am, my “go-to stressbuster”, if you will. Don’t be surprised at the soliloquy above. It is my attempt to tell you that each and every one of us has something that we completely, identify with, that makes us who we are. Do you know what yours is? Can you pinpoint with utter certainty what it is that affects you profoundly, that soothes and calms you? Because this kind of knowledge about yourself is extremely important, and is all the more so now that you’re gearing up for the final round of the selection process – the personal interview.
The interview panel will ask you all sorts of questions, from your career to your interests, et al, but what they’re fundamentally asking is this: Who are you? And that is the one question whose answer you need to know perfectly. Ask yourself that. Try to piece together the little things that make up “you” – like playing music, or writing, or travelling, heck, even bungee jumping! Stand in front of a mirror, and look at yourself carefully, and try to understand who you are. Once you know that answer, the self-assurance and confidence that come with that knowledge will give you the best edge to crack that interview. You will find more – and perhaps more helpful – advice in this magazine issue to aid you in the interview. And of course, for all of you who didn’t quite manage to hit that sweet spot between your dreams and the CAT, and got a less-than-expected score, remember, all is not lost. This is only the first blip in your career, one of many to come. Use this blip as a learning experience, work on it, and come back stronger. So retaking the CAT next year is definitely an option. But if you’d rather not miss a year, there are always other tests you should look at, and you can still make the MBA graduation in two years’ time from now. Finally, have you thought of stepping outside Indian lands? Check out our cover story for all the details and more. Whatever you do, I wish you all the very best. Keep calm, & success will be yours.
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Aditya Prakash Iengar Editor
contents 06
COVER STORY
08
MBA BUZZ
22
NEWS SNIPPETS
25
CORPORATE WORLD
28
Expectations from the 2018-19 Union Budget
32
The PM’s speech at WEF in Davos: A few highlights
36
STUDY HOUR
Moloka’i
38
Word Dose: Despondency
COUNTDOWN
40
Globescan
Top 10 movies every business student must watch
42
SuDoKu
If not, then what: Alternatives to CAT 2017
What after CAT: Giving your best in PI
12
CORPORATE INTERVIEW
15
MUST READS
Aparna Mishra Founder, Club CafeBiz
In Search of Excellence Dreams from My Father
16
February 2018
News in brief
Indian economic snapshot 2017-18
Test Q&As
ERRATA: The profile page of XIME in last month’s issue of Advanc’edge MBA carried an incorrect picture of a different institute. While the team strives to make every issue completely accurate, this error is deeply regretted. 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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HSEDCOVER ARRUPOHARYSTORY HDDUNTAS
Advanc’edge Mastering Business Acumen February 2018
COVER STUDY STORY ANDHRA HOUR PRADESH
If not, then what: Alternatives to CAT 2017 Now that the CAT results are out, many of you may not have scored as per your expectations. But don’t give up hope, because all is not lost. In this article, we explore other options that you might want to look at. The Advanc’edge Team
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is to start working somewhere, preferably in the field in which you would want to specialise. This means that when you’re taking the CAT next year, not only do you know more about your preferred choice of field and career, you’re more confident, and, of course, you have a year’s worth of work experience. This adds a lot of weight to your profile, as the selection process at all the institutes includes a weightage for work experience. If you are already working somewhere, use this additional year to plug your gaps, as mentioned before, and do
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t has been a month since the CAT 2017 results were declared. For those of you who scored as expected (or perhaps even better), it is time to rejoice. And there will be many of you who would have fared lower than your expectation. In this article, we discuss the other options open for you in case you have failed to crack the CAT. So, in case you feel that your CAT scores are not that great and you might not get admission into your dream B-school, you can explore these three different paths. Option 1: Retake the CAT The first and foremost option is the most obvious. Wait for another year, prepare again, plug all the gaps that you feel still remain, and take the CAT again in 2018. If you think this doesn’t seem like the ideal option, think again. In this one year, you can actually increase y o u r chances of getting an admission into your dream business school. If you are a fresher, the best course of action
Advanc’edge Mastering Business Acumen February 2018
something that adds to your profile. Get involved in community service, start a serious hobby that you can build into a passion, learn a language, get an additional certification. Think of this extra year as a gift you can use to make sure you crack the CAT next year. Option 2: Other tests Then there are the other tests, of course. If you’ve already registered for and taken the SNAP, NMAT, TISS, XAT, etc, you have already covered your bases. A good score in any one of these tests will ensure that you are halfway to a good business school. Even if you hadn’t registered for these tests, there are lots more to do. To start off, take tests like the MH-CET. This test is the entrance exam to some top business schools in Maharashtra, including names l i k e
Jamnalal B a j a j Institute of Management Studies, etc. Similarly, the other
HSEDCOVER ARRUPOHARYSTORY HDDUNTAS
Option 3: International education Finally, the third option is to explore getting an MBA degree from an international university. Naturally, this has its own advantages and disadvantages, but it is certainly a viable option, especially if there are programmes that begin in 2018, which means that you don’t miss out on a year at all. To pursue an international MBA programme, you will need to write the GMAT. Reportedly, the GMAT is easier than the CAT, which is said to be the toughest MBA entrance exam. The advantage of the GMAT is that it can be taken anytime during the year, which means you can prepare for it and take the test when you’re most confident. So you can always prepare for both the GMAT, as well as to retake the CAT in 2018. One of the best takeaways from studying at an international university is the diversity of your peers. With a class comprised of students from 10 or 11 different countries and faculty from across the world, the learning experience is almost unparalleled when you consider the exposure you get. So, at global MBA programmes, since there are individuals of so many different nationalities in one class, students end up learning not only
from their professors but also from their classmates. Today, European universities top most of the lists, with European business schools having the seven highest 5-year MBA gains in the world. For instance, at IMD (Switzerland), students have earned US$2,11,000 five years out of school after arriving in Lausanne, Switzerland with a median salary of US$84,000. This equates to almost three times the pre-MBA salary! Moreover, graduating students are placed in companies across the world, which leads to even more exposure in terms of culture, markets and
fact, one-year programmes are also slowly becoming popular in the US, as business schools look to offer an alternative to students who don’t want to be out of the workforce for two years. MiM programmes Finally, there are also Masters in Management (MiM) programmes offered in institutes across the world. MiM programmes are designed for people in the early stages of their career – right after their undergraduate degree or after about a year on the job. Most business schools do not even require or ask mandatorily for professional experience for their MiM programmes. The programme is mainly targeted at candidates with non-business related undergraduate degrees such as in Humanities, Science, Arts or Engineering, and at those with a background in business studies. The length of MiM programmes are also usually just a year, and include a compulsory internship. As for tuition fees, MiM programmes are cheaper than MBA programmes. While tuition fees at the most expensive full-time MBA programmes can reach as high as €70,000, the most expensive MiM programmes cost only around half of that. The primary disadvantage for most Indian students is the cost involved in getting an MBA from an international business school. However, that disadvantage too is slowly fading, as more and more institutes have started offering scholarships that can go as high as even the full course fees. Apart from this, getting loans for studying at an international institute is far easier today than ever before; this adds to the affordability of these international programmes. A
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state specific tests are TANCET (Tamil Nadu), ICET (Andhra Pradesh), PGCET or KMAT (Karnataka), etc. You can also choose to get enrolled in niche programmes like the Business Analytics programme at Praxis Business School, Kolkata. Given that Data Analytics is becoming one of the most important aspects of an organisation’s functioning, the demand for quality business analysts is growing, and Business Analytics programmes offer a highly successful career option.
Advanc’edge Mastering Business Acumen February 2018
workforce. This also means that the students get access to a large network of alumni who are working in companies across the world. Another advantage of an international MBA is that except in the US, most programmes are a one-year or 15-month course. This means that students don’t have to invest two full years to get their MBA and get a career boost. In
MBA STUDY ANDHRA BUZZ HOUR PRADESH
What after CAT: Giving your best in PI A thorough reading of the current economic and corporate scenario along with strong analytical skills can help candidates create the required great first - impression to the interviewers during the Personal Interview round. The Advanc’edge Team
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Introduction phase A typical business school interview starts with a question, which can be something like… ‘tell us about yourself’. The panel expects a crisp ‘elevator pitch’ type of answer for 60 seconds, briefly touching upon your academic achievements, any personal achievements and areas of interest. Such a question is a great opportunity for the candidate, as it serves as a tool to steer the interview panel towards an area
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s the saying goes: “You get a chance to make a firstimpression only once”, and that should not be missed. The Personal Interview is a remarkable platform to create that sought-after ‘first impression’. To achieve this, you can’t just wish it happens that way. You have to work for it. This is certainly possible if you systematically work towards making an immaculate first impression. And the only what you can do it is to prepare proactively ahead of the personal interview.
In any PI, the first impression is very important.
Advanc’edge Mastering Business Acumen February 2018
The key words you use in your introduction will impact how the interview shapes up as a whole. in which you’ve prepared well. Remember, the key words you use or the things you mention during the introduction will have a major impact on how the interview shapes up over the next 15 minutes or so. Steering towards a comfortable domain While responding to such a question, after providing some brief personal details (which anyway is available as a part of your CV with the panel), make a statement like “I regularly keep track of some of my favourite companies and the strategies they pursue.” This could be an
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HSEDARRUPOMBA HARYHDBUZZ DUNTAS
Advanc’edge Mastering Business Acumen February 2018
MBA STUDY ANDHRA BUZZ HOUR PRADESH
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open ended statement and in effect the candidate is steering the interviewer towards an area on which the candidate has clearly done a detailed work and is well-prepared and rehearsed. When you make relevant statements like these, it is highly probable that the members of the panel will dwell deeper into such statements. And hence, the next question will go something like this: “Alright, tell us something about one of your favourite companies and what strategies you figured out that they have been following?” So, if you have proactively prepared some detailed analysis on a company like say, ITC or Infosys, you are much better off for constructively holding on to at least 20 to 25% of the interview time by laying down a clear analysis with suitable examples. Of course there could be some dynamism and everything is not likely to go exactly the way you planned, but, you are likely to be in control of a large part of the conversation that is likely to follow.
Brushing up your business GK There is no better way than preparing on certain companies and industries that are your favourites. Pick a few industries (telecom, FMCG, ITES, etc) and choose at least one company in each of these industries. Read thoroughly about them, understand them, look up for the current major issues in these industries, how these companies are performing and how their competitors are reacting. Such preparation will place you well for the discussions you need to hold on to in the personal interview. Reading the Corporate World sections in Advanc’edge MBA will
PIs can often be a minefield, so mind what you say! help you as a starting point, which you can develop further through regular reading of a business daily, tracking such companies and industries until the date of the personal interview. Being familiar with emerging industries like e-commerce and internet based aggregators (Ola, Uber, etc) will be useful. You will appear to be someone who keeps track of the latest developments in emerging industries. Demonstrating analytical capability Demonstrating analytical capability in the personal interview is another area that is extremely important. For instance, five areas where you can focus are detailed below. These can be used somewhere with many of the questions that come along in the personal interview: Familiarising with India’s population is important. India’s overall population is 1.3 crore.
Advanc’edge Mastering Business Acumen February 2018
Then make a note of the number of people who are above the poverty line. Find out about the literacy level of the nation along with the economic status and per capita income. It is also essential to know the household income and spending patterns of Indian citizens. Reports of the National Council of Applied Economic Research (NCAER) are very useful and will help you in this front. Additionally, familiarise yourself with areas of retail market in India: its size, players, growth potential, etc, telecom/ broadband/ mobile/ Internet penetration and India market capitalisation, top 30 Indian companies and many other such topics. These will help you in anchoring your conversation on solid analytical logic. But most of all, stay on your toes, be ready for quick changes of topics in conversation, and keep calm. All the very best! A
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HSEDARRUPOMBA HARYHDBUZZ DUNTAS
Advanc’edge Mastering Business Acumen February 2018
CORPORATE STUDY HOUR ANDHRA PRADESH INTERVIEW
The start-up starter kit: Passion, integrity, persistence With an extensive experience spanning 18 years across functions, Aparna Mishra finally took the plunge, and started Club CafeBiz, helping start-ups find their own feet. In an interview with Alolika Banerjee, she talks about the best first steps one can take.
Q. What is Club CafeBiz all about? Cafebiz, is a platform for start-ups, entrepreneurs, women who want to start something on their own, and even people with limited resources but with amazing vision. At Club CafeBiz, we nurture them, make them ready to face the harsh realities of this world and prepare them to face everyday challenges in their daunting journey ahead. Q. What triggered you to start your own venture after so many years of experience in the corporate world? I had always wanted to start something on my own, right from my childhood. I wanted to be in a position where I had the privilege to generate employment for others, rather than seek employment for myself. And, thankfully, I had reached a position in my career where I could think of a unique enterprise to bring about a difference. And then there was no looking back. I was already motivated, and I never shirk work. So, all of these provided me the right ingredients to set forth on my own venture.
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Q. Do you think an MBA degree is essential to making it big in the corporate world? Well, I wouldn’t say it is absolutely essential to help a person achieve his or her own dreams. If you are motivated, talented and dedicated enough, then there’s no stopping you. But having said this, I would like to add that an MBA degree is still important. It gives a platform to students to go out and get an experience of a near-corporate scenario in the two years at a B-school. These years are priceless and add a whole new dimension to their process and approach.
Advanc’edge Mastering Business Acumen February 2018
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CORPORATE HSEDARRUINTERVIEW POHARYHDDUNTAS
Advanc’edge Mastering Business Acumen February 2018
CORPORATE STUDY HOUR ANDHRA PRADESH INTERVIEW
Q. What do you have to say about today’s current start-up culture? The start-up culture in today’s scenario appears to be very positive. A lot of both young and notso-young people are coming out and exploring the option of trying out something on their own. I am very happy at how things are turning out. This spells good news for the country’s economic culture. More and more people are stepping out to make a mark, and that is indeed very good for the country’s financial situation. Q. What do you think is the reason behind the emergence of multiple start-ups in today’s world, compared to the scenario 20 years back? This a start up wave we’re witnessing in our country. When I quit my job in 2008, this start up wave was somewhat nascent, and moving slowly, but now it has picked up enormously. Not only is this good for the entire world, but it will also add to the economy. Today’s youth is open to taking risks. Now they are earning for their living, becoming the CEO of their company and also focussing on being a job creator. They are not looking at 9 to 5 arrangements. Moreover, the government, the various start-up communities, the online media, etc are also building the startup ecosystem around the world.
Q. What are the three qualities you look for in candidates while you hire people for your own company? I prefer woman candidates to men. Being a woman myself, I may be biased towards women, but then, that is what I am. I prefer candidates who are good at extracurricular activities, mostly in sports or heading any events/ communities in their colleges. Also, I am always on the lookout for good soft skills. Q. How do you maintain this amazing balance between home and work? You know, when you love your work, you manage it well. And that is what I am. I love my flexibility. The companies I have worked with have really taught me to do many things at the same time but prioritise them according to the need. And I follow this to the core.
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First, work in a start-up and learn the nitty gritty, acquire skills, and only then start your own dream.
Q. What are the three qualities that are most essential to become an entrepreneur? If I had to put my mind to it, the three qualities would be passion, integrity and persistence.
Q. A day in the life of Aparna Mishra is like... To be honest, this is a difficult question, since all my days are different. Thankfully, my work keeps me so occupied that there is nothing repetitive about each and every passing day. However, what is clear is that each and every day is filled with a sense of passion and fervour to follow my own dreams and achieve even the impossible.
Q. CafeBiz takes part in multiple activities. What has been the most interesting and memorable activity so far and why? The most interesting activity for me is the mentoring sessions with start-ups. The start-ups of today lack three things: Promotion, Network and Marketing. The tech start-ups mostly need good people in marketing & sales. They look for network & branding. Since I have worked in sales, marketing, customer operation & strategy domains for 18 years, I can help them with my hands on experiences. I don’t believe in preaching high to start-ups. So here in Cafebiz, we build them , guide them and nurture them.
Q. Who has been your inspiration in life? I can’t pinpoint anyone in particular, but when I was working, I used to read inspirational stories, watch videos of successful entrepreneurs. I used to watch CNBC Awaaz regularly. These things have germinated this seed in me. So for me, the credit goes entirely to all the successful entrepreneurs, who, all together, inspired me and motivated me to take this risk.
Q. Your words of advice for the management aspirants of today... If you want to start your own venture, my advice to you would be to work in a start-up company of your choice first. Learn the nitty gritty of the business, and once you’re convinced that you have acquired the requisite skills, only then should you start their own business. Because remember, the grass is always greener on the other side. A
Advanc’edge Mastering Business Acumen February 2018
MUST STUDYREADS ANDHRA HOUR PRADESH
HSEDARMUST RUPOHARYREADS HDDUNTAS
Since you’re planning on doing your MBA, you need to be well read, and not just on current affairs. In this section, we offer you some choices of books that will broaden your perspective, and you will find that you will never be at a loss in a discussion!
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New York Times bestseller for quite a few years, In Search of Excellence is a must read for anyone who is keen to make a mark in the competitive world of management. The authors, Robert H. Waterman, Jr. and Tom Peters, researched on more than 43 companies to discover the secrets of the art of management.
No matter how varied the companies might have been, all of them shared certain basic principles of management. So anyone who is ambitions and yearning for success, this book is certainly a must Name: In Search of Excellence read for him or her. Amply illustrated with anecdotes and examples Author – Robert H. Waterman, Jr. from the experiences of the best-run companies in the world, this and Tom Peters book spells out the secrets of success in easy and simple terms. Publisher – Profile Books Ltd Genre – Non-fiction Price – ` 339
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reams from My Father is the story of US President Barack Obama, much before he assumed the centre stage in American politics, to understand the forces that shaped him as the son of a black African father and white American mother. It was a unique struggle that took him from the American heartland to the ancestral home of his great-aunt in the tiny African village of Alego. The book, where Barack retraces his family’s unusual history, delves deep into his own awakening to the fears and doubts that exist not just between the larger black and white worlds but within him. Name: Dreams from My Father Lyrical, unsentimental, and powerfully affecting, this memoir Author – Barack Obama became a #1 New York Times bestseller when it was reissued in 2004. A Publisher – RC gripping read from one of the most influential and compelling voices Genre – Autobiography in American politics. Price – ` 236
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Name: Moloka’i Author – Alan Brennert Publisher – Griffin Genre – Fiction Price – ` 853
Moloka’i is the true-to-life chronicle of people who embrace life in the face of death. Such is the warmth, humour, and compassion of this novel that few readers will remain unchanged by Rachel’s story.
Advanc’edge Mastering Business Acumen February 2018
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et in Hawai’i more than a century ago, Moloka’i is an extraordinary epic and a deeply moving testament to the resiliency of the human spirit. Rachel Kalama, a spirited seven-year-old Hawaiian girl, dreams of visiting far-off lands like her father, a merchant seaman. Then one day a rose-coloured mark appears on her skin, and those dreams are stolen from her. Taken from her home and family, Rachel is sent to Kalaupapa, the quarantined leprosy settlement on the island of Moloka’i. Here her life is supposed to end, but instead she discovers it is only just beginning.
COUNTDOWN STUDY HOUR ANDHRA PRADESH
The Insider - 1999
Top 10 movies
every busine ss student mus t watch Wall Street - 1987
Director: Oliver Stone Actors: Charlie Sheen, Michael Douglas, Tamara Tunie Genre: Crime, Drama
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Synopsis: Bud Fox is a Wall Street stockbroker in early 1980's New York with a strong desire to get to the top. Working for his firm during the day, he spends his spare time working an on angle with the high-powered, extremely successful (but ruthless and greedy) broker Gordon Gekko. Taking the advice, “greed is good” and working closely with Gekko, Fox soon finds himself swept into a world of yuppies, shady business deals, the good life, fast money, and fast women; something which is at odds with his family, including his estranged father and the blue-collared way Fox was brought up. In MBA or business, we talk a lot about ethics. Are they always followed or often compromised? Greed, insider trading, and going to the top are just a few of the things Wall Street will show you. One of the best movies on business, stock market and ethics. Not to be missed for an MBA student!
Advanc’edge Mastering Business Acumen February 2018
Director: Michael Mann Actors: Russell Crowe, Al Pacino, Christopher Plummer Genre: Biography, Drama, Thriller Synopsis: Balls-out 60 Minutes producer Lowell Bergman sniffs a story when a former research biologist for Brown & Williamson, Jeff Wigand, won't talk to him. When the company leans hard on Wigand to honour a confidentiality agreement, he gets his back up. Trusting Bergman and despite a crumbling marriage, he goes on camera for a Mike Wallace interview and risks arrest for contempt of court. Westinghouse is negotiating to buy CBS, so CBS attorneys advise CBS News to shelve the interview and avoid a lawsuit. 60 Minutes and CBS News bosses cave, Wigand is hung out to dry, Bergman is compromised, and the CEOs of Big Tobacco may get away with perjury. The film is a story of an insider who takes on an entire company that is involved in wrongdoing. If you are an MBA student, The Insider is a must watch for ethics, integrity and the issues of a whistleblower.
HSEDARCOUNTDOWN RUPOHARYHDDUNTAS
Citizen Kane - 1941 Director: Orson Welles Actors: Orson Welles, Joseph Cotten, Dorothy Comingore Genre: Drama, Mystery Synopsis: A group of reporters are trying to decipher the last word ever spoke by Charles Foster Kane, the millionaire newspaper tycoon: “Rosebud”. The film begins with a news reel detailing Kane's life for the masses, and then from there, we are shown flashbacks from Kane's life. As the reporters investigate further, the viewers see a display of a fascinating man's rise to fame, and how he eventually fell off the “top of the world.” Citizen Kane is an all time classic for MBA students. The movie teaches students about the issues and challenges they might face in what they are doing, but that sticking to ethics is their choice.
Office Space - 1999
Synopsis: Office Space is a comedic tale of company workers who hate their jobs and decide to rebel against their greedy boss. This comedy is about an individual who one day decides he's fed up and won't put up with the everyday drone of the 9-to5 anymore. So, while everyone else is clocking in he's busy clocking out. This movie is an inside look at office politics at its finest. It is a case study in bad management and will give you an up, close and personal look at exactly what consultants do. As MBAs, at one time in our past or sometime in our future, we can all relate to this movie, and thus it's perfect to be included on this list.
Advanc’edge Mastering Business Acumen February 2018
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Director: Mike Judge Actors: Ron Livingston, Jennifer Aniston, David Herman Genre: Comedy
COUNTDOWN STUDY HOUR ANDHRA PRADESH Synopsis: The story begins as “Don” Vito Corleone, the head of a New York Mafia family, oversees his daughter's wedding with his wife Carmela. His beloved son Michael has just come home from the war, but does not intend to become part of his father's business. The business chief of the Mafia is just like the head of the family, kind and benevolent to those who give respect, but given to ruthless violence whenever anything stands against the good of the family. An up and coming rival of the Corleone family wants to start selling drugs in New York, and needs the Don's influence to further his plan. The clash of the Don's fading old world values and the new ways will demand a terrible price, especially from Michael, all for the sake of the family. The movie is a lesson in adherence to personal values. In one of the most famous lines in the film, Michael's character says, “It's not personal, it's strictly business" while referring to a murder. Should we — can we — ever separate our professional lives from personal values?
The Godfather - 1972
Director: Francis Ford Coppola Actors: Marlon Brando, Al Pacino, James Caan Genre: Crime, Drama
Something Ventured - 2011 Director: Daniel Geller, Dayna Goldfine Actors: Bill Bowes, Herbert Boyer, Po Bronson Genre: Documentary, Biography, History Synopsis: Behind some of the world's most revolutionary companies are a handful of men who (through timing, foresight, a keen ability to size up other people, and a lot of luck) saw opportunity where others did not: these are the original venture capitalists. All were backing and building companies before the term “venture capital” had even been coined, companies that led to the birth of biotechnology and the spectacular growth in microprocessors, personal computers and the web. Something Ventured uncovers the ups and downs of the building of some of the greatest companies of the twentieth century, and the hidden dramas behind some of the most famous names in business.
Synopsis: Inside Job provides a comprehensive analysis of the global financial crisis of 2008, which at a cost over US$20 trillion, caused millions of people to lose their jobs and homes in the worst recession since the Great Depression, and nearly resulted in a global financial collapse. Through exhaustive research and extensive interviews with key financial insiders, politicians, journalists, and academics, the film traces the rise of a rogue industry which has corrupted politics, regulation, and academia. It was made on location in the United States, Iceland, England, France, Singapore, and China. The film is a shocking post mortem of the most significant global economic crisis in decades, pointing to shared culpability across many financial institutions, government organisations, and business leaders.
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Inside Job - 2010
Director: Charles Ferguson Actors: Matt Damon, William Ackman, Daniel Alpert Genre: Documentary, Crime
Advanc’edge Mastering Business Acumen February 2018
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Smartest Guys in the Room - 2005 Director: Alex Gibney Actors: John Beard, Tim Belden, Barbara Boxer Genre: Documentary Synopsis: Enron dives from the seventh largest US company to bankruptcy in less than a year in this tale told chronologically. The emphasis is on human drama, from suicide to 20,000 people sacked. Along the way, we watch Enron game California's deregulated electricity market, get a free pass from Arthur Andersen (which okays the dubious mark-to-market accounting), use greed to manipulate banks and brokerages (Merrill Lynch fires the analyst who questions Enron's rise), and hear from both Presidents Bush what great guys these are. The film is a real life lesson in business ethics. It makes you think and be cautious of things that appear too good to be true. This film is not only a good watch but is almost a class in itself, and even more important because it actually happened. It is a must watch for any MBA student; it will remain with you and cause you to really think about the difference between doing things right and doing the right things!
Mad Men (TV Series) - 2007 Creator: Matthew Weiner Actors: Jon Hamm, Elisabeth Moss, Vincent Kartheiser Synopsis: Mad Men is a drama series about one of New York's most prestigious ad agencies at the beginning of the 1960s, focusing on one of the firm's most mysterious but extremely talented ad executives, Donald Draper. The agency is enjoying success, but the advertising game becomes more competitive as the industry develops. The agency must adapt to ensure its survival. Don Draper is a talented ad executive at the top of his game, but the secrets from his past and his present threaten to topple his work and family life. Despite being based in the 50's and 60's, Mad Men still exhibits many of the fundamentals of marketing that will never change.
Synopsis: A remake of the hit 2001 BBC TV series The Office (2001), this is a mockumentary that documents the exploits of a paper supply company in Scranton, Pennsylvania. Made up of head chief Michael Scott, a harmlessly deluded and ignorantly insensitive boss who cares about the welfare of his employees while trying to put his own spin on company policy. With an office including the likes of various peers who have their own hangups, The Office (2005) takes an interesting look at the lives of its co-workers. Advanc’edge Mastering Business Acumen February 2018
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The Office (TV Series) - 2005
Creator: Ricky Gervais, Stephen Merchant Actors: Rainn Wilson, John Krasinski, Jenna Fischer
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Advanc’edge Mastering Business Acumen February 2018
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Advanc’edge Mastering Business Acumen February 2018
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News in brief
Here are some interesting titbits from over the last month VLCC enters men’s Electric vehicles can save fuel cost by `40,000 grooming segment annually
The fact that men’s grooming is a booming industry has been further strengthened with VLCC’s entry into men’s products. With the launch of various products like face wash, shaving gel and moisturiser, VLCC plans to touch the `100 crore revenue mark in three years. The company said that it aims to tap 10% market share of the men’s grooming category in three years, as this market in India is expected to grow at a CAGR of over 17% through 2020.
Online retail driving commercial vehicle sales E-commerce companies are appearing to be a major driver for the commercial vehicle segment. This is after online sellers and logistics companies are consolidating warehousing solutions and opting for hub-and-spoke model under the unified GST regime. India’s largest commercial vehicle maker Tata Motors’s sales to ecommerce transporters have increased 20% in the first eight months of the fiscal year. The logistics sector for the ecommerce industry is expected to grow to about `14,000 crore by 2020. Currently, online retailers now deliver to 12,500-15,000 pin codes out of nearly 100,000 pin codes in the country.
Using electric vehicles fully powered by renewable energy is expected to save fuel costs to the tune of `40,000 annually. This is four times more than earlier estimates. According to a report by Bengaluru-based research firm Equitorials, cost of solar and wind energy has decreased significantly, and is far lower than coal-based power. This will enable the transition to all electric vehicles on Indian roads by 2030. Meanwhile, power minister R.K. Singh has said that his ministry will soon come out with regulations to promote e-mobility in India.
Housing market looking up Property markets are looking up, with sales registering the best performance in five quarters. This is being attributed to the effects demonetisation being ironed away, as 22 of the top 30 markets either hovered around their five-quarter best or bettered their previous peaks. The implementation of the Real Estate (Regulation & Development) Act or RERA too is expected to help future movement of inventory smoother. Besides affordable pricing, improving consumer confidence due to implementation of RERA and various other government incentives for low-income group housing have worked in favour of smaller cities.
2 lakh jobs expected due to automation Nearly two lakh Robotic Process Automation (RPA)-led jobs are expected to be generated in the country by 2021. According to Daniel Dines, CEO and Co-Founder of UiPath, a Bangaluru-based software company, India is poised to become a powerhouse for RPA, because of its growing talent pool and cost advantage. RPA has been gaining traction as a way of automating repetitive, tedious tasks to handle higher-value analysis and decision making.
Hospitality sector expects higher revenues, profits in 2018
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The hospitality sector is expected to perform better in 2018 in terms of revenues and profit margins than last year. With blips such as the demonetisation effect and the GST rollout affecting the industry, 2018 promises to be better given that most of such issues have been ironed out. Experts predict the upturn based on strong growth rates in foreign tourist arrivals and airline passenger movement.
Vodafone-Idea merger in final leg of approvals Idea Cellular has said that the talks for a merger with Vodafone is in the final leg of regulatory approvals. The deal is expected to be complete in the first half of 2018. Both companies have already received approval for the proposed combination from the Competition Commission of India, SEBI & stock exchanges and recently from National Company Law Tribunal.
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Newspapers add 110mn new readers in 3 years In contrast to the global trend, the Indian print media has registered a steady growth, with total readership shooting up by 110 million, or an impressive 39%, in the last three years. According to the latest report of the Indian Readership Survey, the total readership of the dailies now stands at 407 million, compared to 295 million in the last IRS report released in 2014. Rural India has contributed 70 million of these new readers, while the urban markets have added 40 million readers. The total readership of English newspapers (28 million) is now fourth highest in the country, after Hindi (176 million), Tamil and Marathi (34 million each) dailies.
TCS, Infosys join global drive for tech reskilling Indian IT giants TCS and Infosys have joined a global drive for tech reskilling of one million workers in the first ever such IT industry initiative. Other partners in the initiative include Accenture, CA Technologies, Cisco, Cognizant, Hewlett Packard Enterprise (HPE), Pegasystems, PwC, Salesforce and SAP. According to a World Economic Forum report on workforce reskilling, one in four adults reported a mismatch between the skills they have and the skills they need for their current job. The IT Industry Skills Initiative is ostensibly to meet this skills gap challenge and address job displacement.
89% Indian respondents affected by frauds Over 89% of executives in India have reported that their companies were victim to at least one instance of fraud over the past 12 months, up from 68% in 2016, the Kroll Annual Fraud and Risk Report has revealed. India witnessed the highest incidence of fraud globally across three categories — theft of physical asset or stock (40%), IP theft, piracy or counterfeiting (36%) and corruption and bribery (31%). The report revealed that most common perpetrators of fraud incidents in India over the past 12 months were joint venture partners, with 45% respondents naming them as the primary perpetrators. Junior employees were the second most common perpetrators causing fraud incidents (43% respondents).
Reliance Jio topples Samsung from feature phone top spot Reliance’s JioPhone has overtaken Samsung to become the top feature phone brand in the quarter to December by shipments. This is the first time that it has overthrown segment leader Samsung, according to a report by Counterpoint Research. Reliance Retai’s JioPhone had a 27% share of the segment of the market that comprises devices typically under `2,000. Samsung followed with a 17% share, with Micromax coming in third. Overall feature phone shipments increased by 51% on-year and a massive 32% sequentially, when compared to the 10-12% and 6-7% that the industry generally ships.
Bullet train to be ready by 2023? India’s first high-speed rail project between Mumbai and Ahmedabad should be completed by 2023. In September last year, Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe had laid the foundation of the high-speed rail project, commonly known as Bullet Train project, between Mumbai and Ahmedabad.
Lower rise in banks reporting NPAs Around 58% of banks have reported a rise in non-performing assets (NPAs) in July-December last year, having reduced significantly from 80%. According to a report by the Ficci-IBA, this reduction gives a strong indication of stability in credit environment. The survey drew responses from 19 public sector, private and foreign banks representing 59 per cent of the banking industry by asset size. However, only 28% banks reported a rise in the number of requests for restructuring of loans, as compared to 40% in the previous round. US chipmaker Qualcomm has been fined $1.23 billion or roughly `7,800 crore by EU antitrust regulators for paying Apple to only use Qualcomm chips, rather than those made by rivals such as Intel. The fine represents 4.9% of Qualcomm’s 2017 turnover. Qualcomm shares fell as much as 5& in pre-market trading. According to an EU official, Qualcomm’s move meant that no rival could effectively challenge Qualcomm in this market, no matter how good their products were. The investigation, launched in 2015, covered the period from 2011 to 2016 and took into account Qualcomm’s market dominance in LTE baseband chipsets. There will be no repercussions for Apple in the case. Advanc’edge Mastering Business Acumen February 2018
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Qualcomm fined $1.23bn for Apple payment
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Sci-fi author Ursula Le Guin passes away Bestselling science fiction writer Ursula Le Guin has passed away in Oregon. She was 88. The award-winning science fiction and fantasy writer explored feminist themes, and her best known work was the Earthsea series. Le Guin won an honorary National Book Award in 2014, and was known for her vocal opposition to what she called “letting profit define what is considered good literature”. Despite being a finalist for the Pulitzer Prize in 1997, a rare achievement for a science fiction-fantasy writer, Le Guin often criticized the “commercial machinery of bestsellerdom and prizedom.” She gained fame with her novel The Left Hand of Darkness, which won the Hugo and Nebula awards – both top science fiction prizes – and conjures a radical change in gender roles well before the rise of the transgender community.
US government shut down for three days The US government was shut down for three days due to a failure to pass legislation to fund government operations and agencies. This stemmed from disputes over the extension of status of persons affected by the immigration policy, as well as a dispute over whether funding should be allocated towards building a MexicoUS border wall, a keystone policy during Donald Trump’s presidential campaign. During the shutdown, all government systems were ceased to function, except for essential and emergency services. The shutdown ended after Republicans and Democrats voted for a temporary funding bill, with the Democratic leadership agreeing to back the bill after accepting promises from Republicans for a debate later on the future of young illegal immigrants.
Maruti Suzuki to Petrol, diesel prices touch record highs showcase largest Petrol and diesel prices kept touched record highs in January in the national capital and other metros. display at Expo India’s largest carmaker Maruti Suzuki will showcase over 18 vehicle models at the Auto Expo 2018 in Greater Noida, which is the largest vehicle display by the company. With the display, Maruti Suzuki intends to send a strong message around its intent, which is built around the theme of Transformation. The company is looking to build concepts for cleaner technology and future compact vehicle design. Included in Maruti Suzuki’s line-up is a concept electric vehicle, that reinforces the company’s commitment to launch an electric vehicle in India in 2020, as well as a working model of a next generation hybrid vehicle aimed at bringing down emissions and reducing dependence on fossil fuels.
Petrol was sold at `72.43 per litre in Delhi, the highest in three years. It cost `72.51 on August 2014, according to data from Indian Oil Corp. In Kolkata, Mumbai and Chennai, petrol was sold at `75.13, `80.30 and `75.12 per litre respectively, also at over three-year high levels. The previous highs were `75.46 (Kolkata, October 2014), `80.60 (Mumbai, August 2014) and `75.78 per litre (Chennai, August 2014). Similarly, diesel prices, which have been touching new levels, shot up across all major cities. In Delhi, diesel was sold `63.38 per litre. In Kolkata, Mumbai and Chennai, prices touched cost `66.04, `67.50 and `66.84 a litre respectively.
2017 second hottest year on record: NASA
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International space agency NASA has declared 2017 as the second warmest year on record since the late 1800s when climate records were first started, after 2016. Without the warming influences of El Niño, 2017 is the hottest year on record, the space agency said in a report. NASA’s study, undertaken jointly with National Oceanic and Atmospheric Administration, incorporated data from 6,300 weather stations from around the world. The average global temperatures in 2017 were found to be 0.90 degrees Celsius warmer than the mean 1951 to 1980 levels.
India in world’s bottom 5 countries in environmental health India has been ranked as one of the bottom five countries worldwide in terms of environmental performance, slipping from 141st place in the last ranking in 2016 to 177 among 180 countries this year. The latest global Environmental Performance Index (EPI) was released by Yale University and Columbia University in collaboration with the World Economic Forum. The new report highlighted air pollution as a leading threat. Environmental health also includes two other components of water and sanitation and exposure to heavy metals. Advanc’edge Mastering Business Acumen February 2018
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Indian economic snapshot 2017-18 The Indian economic scene looks upbeat, although there are inherent challenges. At a time when the global economic growth appears to be positive, the Indian economy too looks set to grow significantly. An analysis.
Dr Suresh Srinivasan
T
he financial year 201718, towards the end of which we are marching, is a crucial year that is expected to consolidate all the efforts of the current BJP government in delivering its election promises. It is also an important year, as the same government will come back to the people of the country for being re-elected in the forthcoming general elections scheduled for early next year.
How has the country functioned in 2017-18? Has the economy improved over the last four years? Are the market indices and indicators reflecting such progress? What does the future have in store for the economy? Before analysing the Indian economy, we need to understand the status of the global economy, which is picking up pace quite well as compared to last year. Reliable forecasts expect that the global
economy will grow at around 3.5% during 2017, and that the growth momentum will continue in 2018, with the growth rate expected to reach 3.7% in 2018. According to the forecast of the Asian Development Bank (ADB), the Chinese economy, which has seen double-digit growth for the last two decades, is expected to cool down to 6.7% in 2017, and will further slow down to 6.4% by 2018. In effect, the global economic and geopolitical factors are reasonably positive, leading to a firm possibility of a conducive environment for growth in the next 12 to 18 months.
Stock prices of Indian IT companies have surged, contributing to the rise of the Sensex
In 2017-18, India’s economic growth is expected to reach 6.7%, although this is lower than the earlier projections of 7.3%. Primarily, the cascading effects of the note ban and demonetisation, and the implementation of the goods and services tax (GST) have had a profound short term negative effect on the Indian economic activity and its growth. However, the rating agencies also point out that the short term
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Economic growth
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negative effects are slowing waning, and longer term benefits will start emerging in the next 6 to 36 months.
Services sector A recent report by Morgan Stanley, the global financial services firm, on India’s Information Technology sector has thrown a positive light that the industry problems are lessening. More specifically, global technology investments and outsourcing will pick up and Indian IT companies are bound to benefit from this. With this report, the outlook of most of the large companies in the Indian IT sector improved and their stock
Although lower than earlier projections of 7.3%, India’s economic growth is expected to reach 6.7%. prices surged, giving a boost to the benchmark index Sensex of Bombay Stock Exchange. In fact, this is one of the primary reasons that moved the Sensex beyond 35,000 points to reach historic highs over the last month.
Manufacturing sector The overall growth story in the economy, recovery of key indices of Index of Industrial Production (IIP), purchasing manager’s index (PMI) and overall optimism surrounding the long term benefits that the key reforms including GST can bring to the economy, are being positively perceived by Indian corporates as well as foreign institutional investors (FII). The FIIs had already invested more than a billion dollars in the Indian markets this year alone, which is an extremely optimistic sign. It is interesting to note that India’s growth declined to a three year low of around 5.7% at the beginning of the current fiscal,
India INC: at a glance M&A flow to remain stable in 2018: EY According to EY, mergers and acquisitions activity in India is expected to remain robust during 2018, especially with the economic conditions getting more stable. Last year, India recorded more than a thousand M&A deals, with a disclosed deal value of around $40 billion.
Ola takes over Foodpanda Cab aggregator Ola has acquired online food delivery start-up Foodpanda in a stock deal valued at US$40 million. This provides an opportunity for Foodpanda to leverage Ola’s strengths as one of India’s largest platforms to penetrate the Indian market. Interestingly, Ola’s largest competitor Uber too has its own food service, named Uber Eats.
ONGC secures loan for HPCL takeover
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Oil and Natural Gas Corporation (ONGC) has tied up an over-`18,000 crore loan from three banks to part finance its `36,915 crore acquisition of Hindustan Petroleum Corp Ltd (HPCL). The purchase price will go to the government for liquidating its share out of HPCL. Meanwhile, HPCL is reported to be in talks to acquire Mangalore Refinery and Petrochemicals Ltd (MRPL) to become India’s third-largest oil refiner. The merged HPCL and MRPK will then become subsidiaries of ONGC.
Infosys working on creating synergies with acquisitions With its new CEO Salil Parekh, Infosys is striving hard to generate synergies from the recent three acquisitions it made over the last two years. These are Israeli automation technology firm Panaya, Noah and Skava, and cost the company more than `2,500 crore.
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Employment Until such manufacturing growth fully sets in, the Indian economy is expected to have a higher unemployment rate of around 3.5%, higher than earlier projections. The employment is a “lagging” indicator, which will be followed by investments and manufacturing sector growth, which are “leading” indicators. That is the reason that recent reforms like GST needs to sink into the economy, and eventually result in higher investment
Unemployment rates are expected to be higher at around 3.5% and manufacturing output for unemployment levels to reduce. The present BJP government will have to strive to improve the employment rate before the upcoming general elections scheduled for early 2019.
Inflation With industry output and manufacturing sector steadily growing, stronger demand resulted in India’s monthly whole sale price inflation (WPI), which stood at around 3.58% for December 2017, as compared to 2.10% during the last year. Crude price This is a cause for concern, and can seriously impact India’s finances if the trend continues. Crude price globally has steadily been on the rise, and is likely to impact India’s imports severely. Petrol prices at Indian pumps reached the highest level since 2014, and diesel also touched a record high. The government has been cutting excise duties to a certain extent in order to not let the entire burden be passed onto the retail consumers, but with everything said and done, the retail prices are, in fact, increasing.
Exports India’s exports have grown at around 12% per annum during the first nine months of 2017. But still, we are likely to fall short of the growth in exports we achieved during the previous year. To top it all, import concerns, mainly due to the enhanced crude bill, could be worrisome. With the manufacturing sector still to cash in on the full potential perceived on the back of the “Make in India” projects, exports have not been up to the mark.
Disinvestment The Oil and Natural Gas Corporation (ONGC) will acquire the government’s entire 51.11% shares in Hindustan Petroleum (HPCL) for more than `37,000 crore. This will result in India reaching its divestment target of `72,500 crore in 2017-18. In the past, many years’ governments have failed to achieve disinvestment targets, as a result of which the fiscal deficit targets also slip. In summary, the Indian economy’s stability has increased, investor perception has turned positive and the mood is upbeat. We seem to be well poised for a strong growth in the next two years. A
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nine months ago. The turnaround, therefore, is commendable, wherein sentiments and perceptions have positively improved and a high growth path is being firmly established. India’s industrial production increased close to 8.5% in 2017 as compared to a year ago. The manufacturing sector across segments showed positive outlook. The index of industrial production (IIP) that measures the country’s industrial output in certain core sectors increased as compared to last year, and stood at more than 125. The manufacturing sector grew by more than 10% as compared to the last year. The Manufacturing Purchasing Managers index, an indicator that demonstrates the quantum of output and new orders, has expanded at the fastest rate in the last five years and touched 54.7 by the end of 2017. Any reading above 50.0 indicates the economy is growing and expanding. More investments are likely to pour in, and is expected to pick up on the back of such expansion. More importantly, once the GST system becomes well-tuned, output from smaller and medium sized manufacturers is expected to steeply increase.
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Expectations from the 2018-19 Union Budget The current economic scenario in India makes for a challenging task for the Finance Ministry to come up with a Budget that will provide a boost to economic growth. Especially since this is also the ‘prep’ year for the general elections, a lot is expected from the Union Budget 2018-19.
Dr Suresh Srinivasan
T
he International Monetary Fund (IMF) expects the Indian economy to grow at around 7.5% during the following two fiscal years, i.e., 2018-19 and 2019-20. At this rate, India is expected to be the fastest growing economy in the world, as China’s double-digit growth over the last two decades has been cooling down and its growth is getting closer to the mid-single digits! However, we also need to understand that the country is limping out of one of its biggest reforms, the introduction of the goods and services tax (GST),
which was implemented from July 1, 2017. Even as the economy was recovering from the onslaught of the “note ban” that was implemented in November 2016, GST disruptions and the short term negative impact had a major impact on the economic activity of the country. Although the negative effects are slowly waning by now, the economy may need the coming fiscal year 2018-19 to completely recover. Structural constraints in many industries like banking and telecom are likely to put more pressure on the government’s finances. For instance, Reliance
Jio’s entry into the telecom market has slashed revenues to a very large extent of all the existing telecom players, thereby making them financially weak. This has made them unable to pay the government towards the spectrum sale, and the repayment of loans taken from the banks for these spectrum payments has also taken a hit. In effect, such financial weakness of telecom companies adversely impacts government’s fiscal deficit (shortfall in spectrum revenue to the government), and puts enormous strain on banking financials (banks will require more funding from the government to strengthen their capitalization).
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Rural and populist schemes
GIven that this is the year before the 2019 general elections, a lot of popularist measures are expected from the Union Budget. Advanc’edge Mastering Business Acumen February 2018
The farmer distress stories are taking front page news and are ubiquitous across the length and breadth of the country. With the Union elections in India scheduled to be held in 2019, it is given that the present BJP government will prepare itself with populist initiatives to ensure a seamless continuation of power. This will be the last “full” budget before the general elections.
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Now, the present BJP government has secured a certain amount of comfort and trust from educated urban voters that it is indeed aggressively on the reform path, and that this is likely to do good to the economy in terms of employment and income levels. However, the government cannot ignore the farmers and the rural communities if it has to come back to power. This will trigger and entail many social and rural initiatives; such populist measures and schemes, many of which could be announced in the 2018-19 Union Budget, will have at least some component of expenditure allocated for the fiscal year 2018-19. This will, in turn, exert further pressure on the budget finances. From all the above perspectives, the budget for the year 2018-19 is certainly expected to be challenging, both from the ability of the government to
Implementation of the GST and its short term negative effect had a major impact on India’s economic activity. increase revenues as well as the reduction of budget expenditure to preserve the fiscal deficit.
Fiscal discipline The actual fiscal deficit for the current year 2017-18, which closes in March 2018, is expected to widen from the budgeted target of 3.2% of the country’s gross domestic product (GDP) to around 3.5%. Some analysts
even peg the possible deficit to more than 3.5%. The primary reasons for such a widening of the deficit is the shortfall in budget revenues, mainly due to disruptions in the economy due to the implementation of the GST and the resultant lower tax collections, lower economic activity and growth due to the note ban wherein many sectors including construction, infrastructure and real estate were severely hit, and the overall corporate performance stalled, resulting in lower corporate tax collections. Again, the spectrum revenues from the telecom companies will also be strained, further impacting the budget revenues. The finance minister could possibly move the fiscal deficit target for the proposed 201819 budget to 3.5%, and attempt to achieve the same in the forthcoming year.
India INC: at a glance Facebook takes over biometric ID firm for added security Facebook has acquired a biometric ID verification startup named Confirm that specialises in remotely verifying IDs like drivers licences. The acquisition is part of Facebook’s effort to minimise the presence of fake profiles on its platform.
Google picks up video game exec A veteran Sony and Microsoft video game executive has joined the hardware development unit at Alphabet Inc’s Google. According to analysts, the addition to the team is ostensibly to help the company hone its efforts in mixed-reality technologies.
No-staff Amazon concept store opens in Seattle
Tata hires firm for salary hike consult Tata Sons, the holding company of the Tata Group, has appointed an international executive search firm to give an independent opinion on the salary hike of its chairman, N Chandrasekaran, who will complete his first year in office next month.
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Online retailer Amazon has opened its Amazon Go concept to the public yesterday in Seattle. In this brick and mortar setup, shoppers can buy milk, potato chips, ready-to-eat salads and other products off its shelves and just walk out, and they will be billed directly from their Amazon account. No cashiers, no registers and no cash – this is how Amazon sees the future of store shopping.
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All eyes will be on Finance Minister Arun Jaitley for the Union Budget 2018-19.
Aggressive targets
disinvestment
In order to bridge the shortfall in tax revenue, the government is also likely to become extremely aggressive in disinvestment targets. A number of initiatives already seems to be in the making to get as much revenue as possible by selling the government’s shares in public sector units (PSU). Oil and Natural Gas Commission’s (ONGC) acquisition of Hindustan Petroleum Corporation’s (HPCL) shares from the government is alone expected to bring in around `35,000 crore to the government kitty.
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International crude playing spoilsport
While the IMF and World Bank are optimistic of India’s economic activity picking up and achieving a higher growth rate of 7.5%, the increasing crude price, which has already moved from around $50 a barrel to around $60 to $65, is a concern that may widen the deficit further. Over the last four fiscal years, international crude price has been fortunately lying low in the range of $35 to $50,
without exerting much pressure on fiscal deficit targets. However, this may not hold good for the year 2018-19.
Enhancing tax burden improve revenue
to
While streamlining and improvement of economic activity is expected, the biggest concern for the 2018-19 budget will be the continued income shortfall, clubbed with increased budget expenditures. Especially since this is a general election preparation year, increased budget costs cannot be avoided,
The IMF and World Bank are optimistic of India’s economic activity picking up and achieving a higher 7.5% growth rate.
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which means the only way to balance the budget and minimise the deficit will be to throw the spotlight on tax revenues. In all probability, the government may not increase the corporate tax rate, which is anyway considered to be quite high compared to peer group countries. Then how can it collect more revenues through taxes? The government can possibly introduce an additional surcharge on the income tax to bridge at least some part of the income shortfall. For example, this surcharge may be levied on high income individuals. The finance minister is also expected to look at tax revenues from long term capital gains, which are currently taxed at a lower rate as compared to the short term capital gains. In some situations like shares and mutual funds, long term capital gains attract zero tax. The government may, and is expected to, tinker around with such provisions to possibly enhance tax collections. Also, for income from sale of assets to be defined as a ‘long term’ capital gain, the taxpayer must have held it for 3 years. The government could also possibly look at redefining this period with an objective to enhance tax collections from long term capital gains. With all these challenges, the finance minister is expected to have to walk the tightrope in managing the additional revenue and controlling the budget expenditure. The stock markets have already soared up over the last month to levels unseen before in Sensex and Nifty history. Any budget provision adversely perceived by the foreign and Indian investors could pull down the sentiments adversely. It is truly a challenge! A
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The PM’s speech at WEF in Davos: A few highlights After two decades, an Indian Prime Minister attended the WEF summit and delivered the opening address. In his speech, PM Narendra Modi addressed several issues affecting the world today, including protectionism, climate change and terrorism. Dr Suresh Srinivasan
I
ndian Prime Minister Narendra Modi recently attended the World Economic Forum (WEF) in Davos, Switzerland to woo the international investor community and signal the progression of India’s economy as a global power centre. He is the first Indian prime minister to attend the WEF summit in over two decades, and address the gathering in its opening plenary address. Last year, this slot was taken by the Chinese President Xi Jinping.
the pace at which reforms are being carried out and eventually opening up the Indian economy.
Reforms Given the democratic backdrop and the ability of his government to push through many key reforms, albeit slowly and steadily, the PM reasoned that the country’s resources had to be spread across quite a few challenges, in order to place the
future generations on a better pedestal. One might have surmised that the PM’s tone was somewhat apologetic, and that he was possibly justifying why the Indian economy had not showed signed of the very aggressive growth that was expected out of it three to four years ago. He did not aggressively market India as an investment destination, nor did he harp on some of the regular
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Strengths
Modi reiterated the strengths of India, its strong value systems and its economy, and highlighted the strong foundation that sits on the strength of India’s democratic ideologies. He also emphasised how such principles encourage the party in power to secure the views of diverse groups and still maintain harmony. However, he also pointed out that such strength by itself sometimes becoming a hurdle for faster decision making; these remarks were made in the context of
Prime Minister Narendra Modi delivering his address at the World Economic Forum in Davos
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slogans that he has used in the past to market India, including the “Make in India” pitch. However, Modi did not fail to highlight the depth and rigour his government went through in implementing a massive reform like the Goods and Services Tax (GST). He also highlighted the various reforms that had been pushed through during the last four years, wherein the government managed to abolish more than a thousand unnecessary regulations.
India vs China: A subtle message Somewhere in his address, the PM also brought out the point that on the global platform, India can bring very different and unique capabilities to the table, capabilities that are very different from, say, China’s ironhand or be it the protectionism now strongly practised by the
The PM touched on the significant number of reforms that have been implemented. United States. Parts of his speech clearly signalled that India and its economy, due to its democratic underpinning, is definitely sitting on a stronger foundation and a more stable platform, as compared to the economy of China. It was also possibly a strategy for the Prime Minter to address the gathering in Hindi, the language choice significant in itself, given that Xi Jinping’s
address last year was in Chinese. In the light of the fact that Modi is capable of making lengthy extempore speeches in English to very large gatherings, the choice of Hindi for this important forum seems to have been a deliberate subtle message. There was an element of spiritualism as well in his speech. As he reiterated on Indian values, the PM demanded that world should unite not only for economic growth, but also for social growth. In this context, he made references to the country’s priority towards unifying people, rather than dividing them. He also quoted from scriptures that if we could work together, then the world would be free of unnecessary walls and cracks. Some of the points the PM raised in his speech at Davos focused on areas like protectionism, climate change and terrorism.
India INC: at a glance TCS market cap crosses `6 lakh crore The market capitalisation of Tata Consultancy Services surpassed the `6 lakh crore mark for the first time ever to become the second Indian company to achieve this milestone after Reliance Industries Limited. In the intraday trades, TCS’s market capitalisation briefly breached the market cap leader RIL as well.
Freefall in Telecom cos share prices The telecom tariff wars don’t seem to end! Shares of Indian telecom service providers fell on Wednesday after Reliance Jio Infocomm Ltd cut tariffs to counter bigger rival Bharti Airtel Ltd’s revision in data plans. Telecom companies are currently playing a price war in a race to acquire consumers.
Can’t say social media is good for democracy: Facebook Facebook Inc has issued warning that it can offer no assurance that social media was on balance good for democracy. However, the company has stated that it is making efforts to stop alleged meddling in elections by Russia or any other agency.
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No compensation for Tesla CEO Elon Musk Tesla Inc has announced that its CEO Elon Musk will receive no guaranteed compensation of any kind, and that he will be paid only if the company and all of its shareholders do extraordinarily well. Musk’s compensation will be based on a combination of market capitalisation and operational milestones.
STUDY HOUR ANDHRA CORPORATE PRADESH WORLD
PM Modi highlighted the implementation of the GST as an example of a major reform
Protectionism The PM was very categorical in highlighting the fact that the national economies and the so-called big countries like the United States, are moving away from “free market” economic principles and showing clear signs of protectionism and an anti-globalisation spirit, which is not an encouraging trend for the global economy. The PM expressed concern over the selfcentredness of many nations, and in fact equated it as being similar in menace as compared to terrorism and climate change! He was categorical in saying that globalisation is fading. This was a strong message to the Trump administration, and it will be interesting to see the American response.
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Climate change
This is another area which the United States and the Trump regime may not like to hear talk about. However, Modi was candid enough to highlight the challenges the world would face in the midst of changing climate. He called it a serious problem and requested nations to unite in
In his speech, the PM made it clear that India does not have ambitions of exploiting natural resources of any other country. order to address it.
Terrorism While touching on the subject of terrorism, the PM showed strong aggression, and went on to say that it is the next biggest problem in the world. Although he did not mention or name Pakistan, he reiterated the challenges India faced and the threats posed to mankind as a whole. He expressed his concern regarding the trend of radical extremism that is deepening among the educated youth, and cautioned the distinctions nations use in the discrimination of “good” and “bad” terrorism.
Advanc’edge Mastering Business Acumen February 2018
In explaining India’s stance on the matter, the PM was emphatic that India has always stood for peace and humanity, and has not only supported its neighbouring countries during times of in crises, but has also contributed toward global peace. In this context, Modi made it clear that India does not have political or geographical ambitions, and will never exploit the natural resources of any other country. The PM’s address reiterated his point that protectionism, diverse views on climate change and terrorism could polarise and divide the world and nations would start seeing themselves through the narrow lens of “domestic walls”. He highlighted the concept of the globe being a single family, and insisted that world leaders work together and remain united during times of crisis. Indian leaders have perceived his talk to be very positive, uplifting and moving his stature beyond national leadership levels. The PM also touched upon issues like technology, digitalisation, data security and knowledge, stating that data and knowledge are the biggest assets. From these references, he highlighted the importance of cyber security and nuclear security, both of which he claimed to be the biggest challenges the world is facing today. 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 Sr. Associate Professor. He is also a management consultant.
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ANDHRAHOUR STUDY PRADESH
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 Q.1 A box contains a number of apples. When the apples are divided into groups of 5, 4 apples are left, when divided into groups of 4, 3 are left, when divided into groups of 3, 2 are left and when divided into groups of 2, 1 is left. What is the minimum possible number of apples?
1] 49 3] 64
2] 59 4] 39
The number of apples always fall short of one, to be a complete multiple of 5, 4, 3 and 2. Hence, the number of apples = LCM (5, 4, 3, 2) – 1
= 60 – 1 = 59. Hence, [2].
Alternatively,
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When the apples are divided into groups of 2, 1 apple is left; hence there is odd number of apples in the group. Option [3] is eliminated. When divided into groups of 3, 2 apples are left; hence the numbers of apples in the group is not a multiple of 3. Option [4] is eliminated. When divided into groups of 4, 3 apples are left. Hence, option [1] is not possible.
Q.2 If log8m + log8
1] 1 3] 24
=
, then m is equal to: 2] 6 4] 4
Advanc’edge Mastering Business Acumen February 2018
If log8 (m )= ; then 82/3 =
\
= 22 \ m = 4 6 = 24.
Hence, [3].
Q.3 A alone takes twice as long as B and C together to do a peice of work. B alone takes thrice as long as C and A take to do the work together. If all the three of them work together, they can complete the work in 36 days. Approximately in how many days can C, working alone, complete the work?
1] 73 3] 117
2] 87 4] 144
Let a, b and c be the number of days A, B and C alone take to complete the work respectively.
Then from the question, we get the following
equations. =
;
=
;
=
Solving these equations, we get that, C alone will take 86.4 days = 87 days.
Hence, [2].
HSEDAR STUDY RUPOHARYH HOUR DDUNTAS
Verbal English is a lingua franca, and by its nature, a lingua franca is a language of convenience. When it ceases to be convenient – however widespread it has been – it will be dropped, without ceremony, and with little emotion. People will just not get around to learning it, not see the point, be glad to escape a previously compulsory subject at school. Only those who have a more intimate relation to it, its native speakers, may feel a sense of loss – much as French people do today when their language is passed over, or accorded no special respect. And those who are conscious of having made a serious investment to learn the language – having misread the signs of change afoot in global communication – may also feel cheated, even disappointed, when others seem to be excused from having to know it.
1.
Colour is mostly irrelevant at night. Because of how the eye sees, even the most incendiary reds and oranges turn into a monochrome of silvers and greys under the waning moon. The retina, the sensitive lining of the eye’s interior, is layered with photoreceptive cells called rods and cones. Rods, which detect the intensity of light, can sense low levels of illumination. But cones, which distinguish colour, require a threshold of light higher than that provided by the fading moon.
1] Only in light brighter than moonlight can we see colour.
2] In the absence of that threshold, colour washes away.
3] Yet, when we look at a moonlit landscape, we don’t get the feeling of looking at a black and white world.
4] But the rods help us see sufficiently well enough that we don’t notice the muted colours.
1] But the rest of the world will be glad to drop a language that no longer suits their needs.
2] But the world as a whole will shrug and go on transacting its business in whatever language next seems useful.
3] For them, the decline of English will indeed be an important event, one that leaves them will a skill that no longer has any value.
Answer: Option [3] starts a new topic, i.e. why we don’t get the impression of seeing in black and white in moonlight. The penultimate sentence of the given paragraph states what the rods do, and the last sentence contrasts that with the function of the cones, with a sentence starting with ‘but’. So option [4], which also starts with ‘but’ and goes back to the function of the rods, is both logically and stylistically inappropriate. While both [1] and [2] are logically correct, [2] fits better stylistically, as it repeats the word ‘threshold’ from the last sentence of the given paragraph, and it continues the idea of when we don’t see colour rather than when we do see it. Hence, [2].
2. The decline of English, when it begins, will not seem of great moment. International
4]
When English is no longer the international lingua franca, it is anybody’s guess what language or combination of languages will take its place.
Answer: Option [1] merely repeats what is said in the fourth sentence of the paragraph, so it cannot be said to complete the theme. Option [4] starts a new theme, i.e. the question of what language will replace English as the new lingua franca. So it does not complete the theme either. While [3] follows well enough from the last sentence of the given paragraph, it contradicts the theme of the entire paragraph, which is that the decline of English will not seem important. Only [2] fulfils this criterion, as it states that the world will ‘shrug’, i.e. be indifferent to the decline of English. Hence, [2].
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DIRECTIONS for questions 1 to 3: Each question has a paragraph from which the last sentence has been deleted. From the given options, choose the sentence that completes the paragraph in the most appropriate way.
ANDHRAHOUR STUDY PRADESH
WORD DOSE Despondency
In the living room sat a magnificent mini bike. For a brief moment, Lily was filled with what seemed like insurmountable exhilaration. It was Christmas and kids wanted their gifts. But Lily knew that the mini bike belonged to her brother and that she had been relegated to that doll. She couldn’t imagine anything better than that bike. Lily’s resentment could not have been more palpable. Then, her eyes caught sight of a baby doll sitting on the couch with a huge bow. Tommy always got cool things: skateboards, gliders, science kits. The mini bike was just the latest cool thing. Hadn’t Lily asked for the bike with as much fervour as her twin brother? She was infuriated. Lily threw a superficial glance at the gifts and thought nothing more of the scarlet bike. She threw her doll into the fireplace. “Lily!” mother hollered suddenly, her thunderous voice tantamount to the rumbling storm building outside. Mother continued to castigate Lily most thoroughly, rebuking her for insolent behaviour and lack of respect. To Lily, Mother was irrational, hurling hurtful invective. “Oh, Mother,” Lily sighed, crumpling to the floor, despondent.
MAT CH T HE W OR D S W IT H T H E IR M EA NING S 1. Insurmountable (adj) (in-sermoun-tuh-buhl)
8. Superficial (adj) (soo-per-fishuhl)
14. Castigate (v) (kas-ti-geyt)
2. Exhilaration (n) (ig-zil-uh-reyshuhn)
9. Scarlet (n) (skahr-let)
16. Insolent (adj) (in-suh-luhnt)
3. Relegated (v) (rel-i-geyt’d)
11. Thunderous (adj) (thuhn-deruhs)
4. Resentment (n) (ri-zent-ment) 5. Palpable (adj) (pal-puh-buhl)
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6. Fervour (n) (fur-ver)
10. Hollered (v) (hol-er’d)
12. Tantamount (adj) (tan-tuhmount)
7. Infuriated (adj) (in-fyoor-ee-it)
13. Rumbling (adj) (ruhm-bling)
a. Boldly rude or disrespectful b. Great warmth and earnestness of feeling c. Sent or consigned to an inferior position, place, or condition d. To cause to collapse or give way suddenly e. Shallow; not profound or thorough f. Insulting or abusive words or expressions g. The feeling of displeasure or indignation at some act, remark,
person h. Producing thunder or a loud noise like thunder i. Furious; enraged j. Incapable of being passed over, or overcome k. Deep, heavy, somewhat muffled, continuous sound, as thunder l. A bright-red colour inclining toward orange m. To express sharp, stern disapproval of
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15. Rebuking (v) (ri-byook-ing) 17. Irrational (adj) (ir-rash-uh-nl) 18. Invective (n) (in-vek-tiv) 19. Crumpling (v) (kruhm-puhl-ing) 20. Despondent (adj) (dih-sponduhnt)
n. Obvious; evident o. Equivalent to the value, force, effect, or signification p. Not in accordance with reason; illogical q. Feeling or showing profound hopelessness, dejection, discouragement, or gloom r. A feeling of excitement and happiness s. Shouted; yelled t. To criticise or reprimand severely
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HSEDAR STUDY RUPOHARYH HOUR DDUNTAS
February 2018
Advanc’edge Mastering Business Acumen February 2018
ANDHRAHOUR STUDY PRADESH
A quiz to boost your General Knowledge 1. In a report entitled “2018 World Economic League Table”, India is set to overtake France and the UK to become the world’s fifthlargest economy. The report was created by a Britain-based agency. Name the agency. a. World Bank b. World Economic Forum c. Centre for Economic and Business Research d. International Monetary Fund 2. Who has been appointed the new Chief Election Commissioner? a. Sunil Arora b. O.P. Rawat c. Ashok Lavas d. A.K. Joti
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3. The Indian Institute of Spices Research (IISR) heads agricultural research related to spices in India. The institute is a subsidiary of the Indian Council of Agricultural Research. In which state is it located? a. Kerala b. Karnataka c. Orissa d. Karnataka
4. The United Nations Security Council (UNSC) is responsible for maintaining peace and security internationally, with 15 members, five of whom hold permanent membership. Recently, six countries joined the UNSC as non-permanent members. Which of the following is one of the six? a. Russia b. Kuwait c. Japan d. Ukraine
5. The Raisina Dialogue event is organised by the Observer Research Foundation and the External Affairs Ministry. Its third edition was held in January 2018, and its theme was “Managing Disruptive Transitions: Ideas, Institutions and Idioms”. Israeli Prime Minister Benjamin Netanyahu inaugurated the event, with over 500 delegates from 90 countries participating in the event. In which country is the event hosted? a. Israel b. Egypt c. India d. Britain
8. The ‘Bird Language’ is an endangered language that was recently included in UNESCO’s list of Intangible Cultural Heritage. The language is characterised by unusual and very efficient whistle phonetics. This form of communication dates back over 500 years to the Ottoman Empire, but has suffered a decline due to technological advances. Which country does this language belong to? a. Turkey b. Nigeria c. Botswana d. Uruguay
6. Noted Urdu poet Anwar Jalalpuri passed away at the age of 71. He was known to have translated the Bhagvad Gita into Urdu, and received his state’s Yash Bharti award. Which state did he belong to? a. Kerala b. Haryana c. Maharashtra d. Uttar Pradesh
9. According to the Reserve Bank of India, the second highest source of foreign direct investment (FDI) in 2017 was the US, followed by UK and Singapore. Which country was the highest? a. Russia b. China c. Mauritius d. Japan
7. George Weah was recently elected as the new president of Liberia, defeating nearest competitor Vice President Joseph Boakai with 61.5% of the vote. The former sportsman, is the only African to have won both World Player of the Year and the prestigious Ballon D’Or for Europe’s best player. Which sport was he associated with? a. Cricket b. Football c. Sprinting d. Long jump
10. The world’s largest amphibious aircraft is the 36.8 m-long AG600, with a 38.8-meter wingspan and 4 turboprop engines. It is around the size of a Boeing 737 and can carry 50 people. The aircraft has can be used for military purposes, but will also be used for rescue operations. Which country developed the aircraft? a. Germany b. Japan c. US d. China
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HSEDAR STUDY RUPOHARYH HOUR DDUNTAS
12. The Australia Group export control regime is an informal forum whose agenda is to ensure that exports don’t contribute to the development of chemical or biological weapons. Which of the following countries joined the group in January 2018? a. Singapore b. Netherlands c. India d. Japan 13. The Indian Institute of Corporate Affairs (IICA) recently signed a memorandum of understanding with a payments bank to provide training on payment banking. Its employees will be trained on issues pertaining to payment banking. Name the payments bank. a. Paytm Payments Bank b. India Post Payments Bank c. Airtel Payments Bank d. Vodafone m-Pesa 14. This actor is the first AfricanAmerican to win a Golden Globe for best actor in a drama television series for his role as Randall Pearson on NBC’s breakout hit “This Is Us”. Name the actor. a. Sterling K Brown b. Idris Elba c. Mike Colter d. Anthony Mackie
15. Five time BJP MLA Jairam Thakur was recently sworn in as the Chief Minister of which of the following states? a. Uttarakhand b. Manipur c. Gujarat d. Himachal Pradesh 16. India recently signed agreements with which of the following countries for the return of immigrants who are living illegally in that country? a. US b. UK c. Saudi Arabia d. Singapore 17. A World War II Memorial Museum was recently inaugurated by this country in January 2018. The memorial contains remnants of the soldiers, as well as traditional items of the local Tangsa community, and is built on a cemetery site. Name the country. a. India b. China c. Japan d. Italy 18. Elina Svitolina recently won the 2018 women’s singles Brisbane International tournament in Australia. Which country does she belong to? a. Belarus b. Russia c. Ukraine d. Netherlands 19. Which of the following cryptocurrencies recently overtook Etherium’s Ether for the first time as the second largest cryptocurrency in terms of market cap? a. Dogecoin b. Bitcoin c. Litecoin d. Ripple
20. This suburban railway station recently entered the Limca Book of Records in 2018 for being run by an all-women staff, comprising personnel from across departments, including commercials and the RPF. The station is expected to further the cause of adding women to the Indian workforce. Name the station. a. Egmore Railway Station, Tamil Nadu b. Matunga Railway Station, Maharashtra c. Purulia Railway Station, West Bengal d. Srirampur Assan Railway Station, Assam 21. Which of the following sports brands was the fastest growing brand on social media in 2017? a. Formula One b. Adidas c. Puma d. Champions League 22. Which of the following cities will host the annual meeting of the World Economic Forum in 2018? a. New Delhi, India b. New York, USA c. Davos, Switzerland d. Tokyo, Japan 23. In which country did the world’s largest ice festival recently start? a. Norway b. Greenland c. China d. UAE 24. This country recently banned the teaching of the English language in primary schools. The reason given is the curb the invasion of western cultures. Name the country. a. Syria b. Iran c. Bolivia d. Kazakhstan
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11. This Indian author was recently felicitated in Colombo by the Writers and Publishers of Sri Lanka for his contribution to children’s literature. He is an award-winning writer with 32 books to his credit, and his writings have been translated into 14 Indian and 13 foreign languages. Name the author. a. Ramendra Kumar b. Amish Tripathi c. Samit Basu d. Jhumpa Lahiri
ANDHRAHOUR STUDY PRADESH 25. World Hindi Day is observed every year to mark the first anniversary of the World Hindi Conference, held in 1975. On which day is it observed? a. 3rd November b. 26th January c. 18th May d. 10th January 26. Which of the following states has become the second after Sikkim to be declared Open Defecation Free? a. Arunachal Pradesh b. Nagaland c. Mizoram d. Manipur
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27. The world’s largest human genome research project was recently launched to document the genetic makeup of one lakh people and help generate precision medicines. The project will collect the genetic data of an ethnic majority from all over the country and 9 other ethnic minority groups with a population of more than 5 million. Which country has launched this project? a. US b. Japan c. China d. Germany
28. By a new law that came into force from January 1, 2018, men and women in this country will be given equal pay. Companies and government agencies that employ more than 25 people will have to follow strict equal pay policies, and face a fine in case of non-adherence. This is the first country in the world to enforce equal pay for women and men. Name the country. a. Sweden b. Iceland c. Netherlands d. Rwanda
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.c 2.b 3.a 4.b 5.c 6.d 7.b 8.a 9.c 10.d 11.a 12.c 13.b 14.a 15.d 16.b 17.a 18.c 19.d 20.b 21.a 22.c 23.c 24.b 25.d 26.a 27.c 28.b
For more similar puzzles, visit: www.sudoku.com
1.j 2.r 3.c 4.g 5.n
WORD DOSE
Advanc’edge Mastering Business Acumen February 2018
6.b 7.i 8.e 9.l 10.s 11.h 12.o 13.k 14.m 15.t 16.a 17.p 18.f 19.d 20.q