The Financial bulletin, September 2016

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FROM THE EDITOR

The Financial Bulletin Money Matters Club IBS, Hyderabad Estd.—2005

Dear Readers,

Editorial Enquiries Contact Money Matters Club Contact No +91 8125221721

Faculty Coordinator Dr. Sudhakar Reddy

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Archit Athani Aakanksha Yadav

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It gives me the immense pleasure to come up with the September 2016 issue successfully.

This issue reflects a totally different economic aspect of Olympics and gives tribute to the Indian Women at Rio Olympics 2016 . The articles also acknowledge the recent technological advancements like Augmented Reality, Big Data, UPI and India’s very recent Reliance Jio .

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Tribute to the Indian Women at Rio Olympics

By Supriya Saha, IBS Hyderabad

Olympics games are considered as the world’s most

Bengaluru, the youngest contender in the women’s

renowned sports competition with more than 200

golf contest.

nations participating. The Olympics games are held

Their successes have won them the sycophancy of

every four years, with the summer and winter games

millions and turned a public eye on the high

alternating by occurring every four years but two

barriers, they had to conquer to even make it to Rio

years apart. The 2016 summer Olympics took place

in the first place. It was sheer perseverance and

in Rio de Janerio, Brazil from 5

th

august to 21th

august. India sent 117 athletes (53- female, 64-male)

endurance that got them here and made the entire nation proud of them.

to Rio Olympics which is the largest squad so far, returned with two medals.

Sakshi Malik, P.V Sindhu, Dipa Karmakar, Lalita Babar & Aditi Ashok these were the names that made Rio Olympics a celebration in India. Game of the girls, it was female power to the fore, the women over shadowing the men. For a country were inequalities

between

men

and

women

and

discrimination against women have been an age old

issue, a series of world class performance by Indian female athletes created a euphoria in the entire nation. India owes both its medals to women: the wrestler Sakshi Malik, whose bronze-winning performance opened India’s account at the Games, and PV Sindhu, whose stunning silver-winning slams in the badminton singles final against Spain’s Carolina Marin kept the entire country on the edge of its seats until the very end. Dipa Karmakar, first

Indian female gymnast ever to compete in the Olympics, she amazed everyone by producing the Produnova or the death vault. She missed the bronze by the proverbial whisker. Lalita Babar, who started her athletic journey from the fields of rural Maharashtra to the prominent tracks of Rio where she finished 10th in the final of the women's 3000m steeplechase. Aditi Ashok, an 18-year-old from

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Big Data Analytics and Its Future

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By Shreeya Rawat, IBS Hyderabad examination of huge amounts of data to retrieve information, examine patterns and correlation which would not have been possible otherwise. It helps in better decision making leading to consumer satisfaction. Big data involves the understanding of 4 V’s i.e. volume (data quantity), velocity (data speed), variety (data type), and It is the science that gave us powerful computers,

veracity (messiness the data creates).

sensors and other technological devices that took

Today Big data has seeped in almost all the fields

the world by storm. These devices transform our understanding of everything from the study of a foetus to the study moon. From monitoring the heartbeat of a man to the tracking of cosmic rays, nothing is beyond the purview of analytics. We can now identify psychological disorders by merely

observing the changing lifestyle – be it

social media usage, purchasing patterns of buyers or his visits on sites like Google where the search results hint the epidemic even before the experts.

So how all of this is possible? And what makes it possible?

The answer is big data. So what is big data and from where it is coming? Whatever we today are being recorded digitally and this enormous data is big data that can be processed and analysed in

diverse fields.

It is a collection of huge data sets which could be analysed computationally to reveal patterns, trends, and associations, especially relating too human

behaviour and interactions. Every day

like healthcare, finance, homeland and security, traffic

control,

telecom,

search

engines,

manufacturing, retail business etc.

With the options a consumer prefers, his choices are recorded, studied and analysed to understand his behaviour and thus helps in the better understanding and further delivering the product of

his choice.

The future belongs to the big data analytics as companies are now relying on it to help understand the patterns and trends and thus reducing time and cost.

Future of big data has been analysed and predicted by many experts and they say that it will only continue to grow and there would be great improvements in methodologies used in analysing big data and better tools will be developed which will benefit both coders and non-coders.

But there may be a hitch as it may fall short of staffing as its growth is very fast.

we create millions and billions of data and 90%

It is the most aggressively growing area today as

of the data available today has been created in the

this industry has a worth of $100 billion on its own

past few years. Big data analytics involve

and is growing at almost 10% percent a year making it twice as fast as software business as a

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FB whole. In the coming times, all industries are going to rely on Big Data Analytics creating more opportunities for all.

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The Importance of Economic Literacy in India

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By Vasudha Narang, IBS Hyderabad buying a new house, starting a new business, or investing in new stocks. Economics teaches you what, when and how? If an individual knows to deal

his

problems

on

micro

problems

automatically macro problems will be solved.

Even a country gets benefits from economically literate population as it improves public ability to Current population of India is around 1.2 billion. It

is increasing at eruptive rate. Problem arises when growth of population is more than growth of economy resulting in lower standards of living, poverty, unemployment and so on. The growth rate of population is still high compared to other countries. As a result, growing population sabotage the

increased

economically

output backward.

and

country

India

has

remains unsound

economic infrastructure, resulting in inadequacy of

good transportation, irrigation and power leading to slow economic progress. Indian economy also suffers from disguised unemployment as major part of population is engaged in agriculture and can be easily removed with unchanged output.

There are many other problems India is suffering from, reason being illiteracy of economics for common people. Surprisingly, there has not been much efforts taken by government to promote economic literacy. Certainly, it is very important for one to learn to how economic changes affect our jobs, community, standards of living, even households. People should know how economic issues can affect them as consumers, producers, investors, workers and many other roles they play.

A person with better knowledge of economics will definitely take better decisions when it comes to 6

fathom and evaluate public issues.

Economics as a subject must me mandatory in schools. Even young children must be taught basic economic concepts in an interesting way so that

they develop

good

understanding

of

economic issues going in country as they grow up. In the secondary years, they should be given chances to analyze economical issues in country and give their own solutions on the same. This can give them better ability to solve problems and take better decisions in their personal lives. Waiting until students are in college to teach economics is simply a matter of "too little and too late."

A study shows only 44% of students take economics as a separate subject that too in high schools. Also a survey conducted on high school seniors asking them basic questions on economic terms used in daily life and economic issues of country stated they could only answer 4 out of 10 correctly. The results remain the same – a great deal of ignorance of youth when it comes to economics. “The reality is that we are all economists. We all deal with scarcity as we make choices and calculate how to ration various items and resources that we consume, produce and utilize�,

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FB a very true statement quoted by kurt billz. As the statement says we all are economists and have the ability to take efficient decisions for ourselves. We all should have the ability to understand where are our taxes being utilized, why Is inflation increasing, why is unemployment not decreasing, where is government investing funds and resources of our country. All of us have the power to raise our voice when anything goes wrong. And nothing of the above could be implemented without basic knowledge of the subject. So, we all must make efforts to increase economic literacy in our country.

.

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UPI:Moving towards a Cashless Future

By Sharanya , IBS Hyderabad

From being considered as a mere third world country to slowly but surely

do is create your UPI account by

becoming an economic powerhouse to

entering your bank account number and

reckon with, India has well and truly

then you will be provided with your

come a long way in the last decade or so. Under the

unique identification code. Whenever there is a

inspirational guidance of the ex-RBI governor Rd.

transaction of money between a sender and a

Raghu ram Rajan, the financial and economic

receiver all they need to know is each other’s UIC.

sectors have witnessed a great boom. One of the

Not only does this save processing time but also it

many revolutionary visions that he had was to turn

adds security value to the transaction. Also, it

India into a cashless economy and like many of his

reduces the complexity as the system requires only

other visions, this also is very much likely to turn

one ID and mobile phone thus making it easier for

into reality.

the less financially literate sector to carry out the

Traditionally, we Indians are known to take cash with us wherever we go and according to 2016 survey, we use cash in 95% of our transactions. This may seem to be a trivial matter from a common citizen’s point of view but if we look at the picture

from a larger perspective, it is sure to ring alarm bells as it costs a lot to RBI to keep cash running in the economy. Thus, switching over to a more

transaction as compared to carrying out complex banking transactions. The receiver is available 24*7 unlike in NEFT and RTGS. If one switches over to this system, he does not need to maintain mobile wallets and credit card/debit card details.

Also, multiple bank accounts with multiple IDs linked to only one phone make inter and inta bank transactions easier.

efficient system of transaction becomes the need of

Its significance in the Indian economy is manifold.

the hour. RBI, in association with national payment

The cashless transactions reduce cost of printing

corporation of India(NPCI), has thought of coming

paper currency and minting coins thus reducing

up with an initiative known as unified payment

paper and commodity wastage. The track of all

interface which, if implemented, can prove to be a

monetary transactions are kept and it helps in

masterstroke in the context of the Indian economy.

curbing black money. The easy operation leads to a

UPI is entirely a cashless transaction. All you need is a smartphone which supports the UPI interface and considering the Indians’ affinity for mobile phones, this recipe looks like a sure success in the making. Currently, NEFT and RTGS are the two methods used in the country by banks for funds transfer. In both these systems, the processing time taken is very long. However, in UPI, all you need to 8

greater involvement of people from remote corners of the country who are not financially literate enough to operate through banks. UPI’s open architecture and flexibility will lead to new innovation previously unheard in global payment system. The most important point is that implementation of UPI will promote digital transaction and will be a leap to make India a

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FB cashless economy. This goes hand in hand with PM Narendra Modi’s vision of digital India. The cost of printing cash and maintaining ATMs will come down and we can save a lot of money and spend it for the persons in need.

Thus, keeping in mind that India is a cash heavy economy, UPI is a significant step ahead with enormous potential to lead us to a growth environment with cashless payment and easier interbank transfer. It will be also interesting to find out whether rapid digitization of money will also change the Indian mind-set towards risk and investment. Again, this could change the face of finance in India.

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Future of Augmented Reality

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By Chhavi Verma , IBS Hyderabad Augmented reality (AR) is the integration of digital

how it is accessed. Young women may no longer

information with live video and the user’s

have the patience to line outside fitting rooms and

environment

for

could opt for an online AR fitting trial. It will be

Augmented Reality (AR) are commonly those of a

this shift in public expectation that nudges

computer, camera, processor and screen. Augmented

companies from all sectors to aggressively invest

reality recognizes a visual picture or film, blends

in AR.

in

real

life.

Devices

used

new information and displays the virtual result. All of this takes place in real time, producing

extraordinary results.

The potential applications are limitless. They span numerous sectors from training on installation maintenance to technical design of spaces such as

Perceived as the technology of future, Augmented

shops, industrial installations and booths, from

Reality is making its way in the market place by

e-commerce to tourism and from marketing to

continuing

education.

to

work

with

top

brands

and

communities. The numerous applications emerging from the steady development of ground breaking Augmented Reality is transforming the way people see and learn from their surroundings and is revolutionizing companies’ business models.

It’s been on the back burner for a while, with early stage augmented reality appeasing marketers a few years ago with scan able QR codes that could bring up web based information based on a physical experience. Google Glass tried to take Augmented reality to the next level, with a heads up display (HUD) that allowed users to interact with their environments more directly but it failed to take off in part because audiences weren’t ready and in part because the technology wasn’t there. Now apps like Pokémon Go are allowing people to engage with their environments more meaningfully on devices they are already using. The technology is definitely advanced enough for users to enjoy using it.

Although Pokémon Go is a game for teenagers and millennials but it has irrevocably changed societal expectations of what information is presented and 10

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Clogs and Clots of Indian Judiciary

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By Surbhi Gupta, IBS Hyderabad The judiciary is the system of

without

courts that interprets on the

judgement.

basis of facts and evidences and applies the law in the name of

the

state.

It

basically

provides a mechanism for resolution of disputes and often tasked with providing equal justice under law.

The Indian Judicial system is one of the oldest legal

systems in the world today. The Constitution of India provides for a single integrated judicial system with the Supreme Court at the apex, High courts at the middle level, District and subordinate courts at the bottom level.

being

awarded

with

proper

Some of the instances of Indian Judicial failure is the Bhopal Gas Disaster Judgement where decision was passed almost after 20 years and also the Jessica Lal murder case where the young model was shot dead at Delhi bar by Manu Sharma where he went underground for several days and even the eye witnesses denied to identify him as the murderer and this is the classic instance of ‘Justice delayed is Justice Denied’.

Apart from the major cases, many cases of rape, murder remain unsolved for many years and the

The Indian Judicial system is very slow and lethargic

victims are not provided fair justice.

and fail to meet the needs of the common mass. More

Thus it can be clearly stated that the Indian Legal

than three crore cases are pending today and the numbers

are

increasing

each

day.

Several

recommendations have been made to overcome the problem but it primarily address the benefits of courts and judges and the people approaching the courts for justice are ignored.

systems requires a major boost and a complete

reformation in order to fulfill the needs and meet the expectations of the citizens. Just giving recommendations won’t help as it needs to be implemented at the earliest. Government should trim down the number of holidays and working

The basis reasons for the failure of Indian judicial

days and certain arrangements should be made for

system are:

the pending cases and new cases with increasing



In reality it focuses on serving the political authorities and providing protection to the criminals

who are subtly backed by the politicians. 

the number of courts. Indian Judiciary system should be impartial and free from all sorts of external or unauthorized influences.

Inadequate resources in terms of judges, courts, lawyers, funds and staffs as the ratio of judges to people is 10.5:10,00000 which is the poorest in the world.



45% of the Judicial posts in high courts are vacant today.

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Tax is no More Taxing

By Ankita Gangwani, IBS Hyderabad

The Goods and Services Tax, the biggest reform in

up being only beneficial without having any

India’s indirect tax structure since the economy opened

disadvantages. The losses made by the sectors

up 25 years ago, at last looks set to become reality.

after implementation of the new tax structure will

GST is worldwide accepted and France was the first

be borne by government. For this different slab

country to introduce this. It is a system of taxation

has been made.

where there is a single tax in the economy for goods as

So it is evident that GST will arrive like a dawn

well as services. It will replace all indirect taxes like excise duties, service tax, custom duty levied on goods and services by the Indian Central and State government. Any person, who is providing or supplying goods and services, is liable to charge GST from its customers.

after the darkest hour bringing along a new hope

for the economy. The GDP may see a rise with its implementation. It is now upon us to make the best use of it and take the country to its new height.

It will simplify India's tax structure, broaden the tax base, and create a common market across states. GST is a blessing for consumers but for government it serves as a rewarding cup along with a double edged knife. So

let’s see what rewards could government bag.

To start with, government is going to enjoy a simpler life because of replacement of 17 indirect taxes. Along with this, a rise in revenue will be noticed as evasion which was the major setback in revenue generation will cease to exist as more transparent structure will be available followed by a decrease in number of exempted goods. This tax structure will bring the fragmented states into one nation one family. The tax is

going to bring down the logistics cost due to fall in check posts. To add to this comes the benefit enjoyed by manufacturing sector which in turn will boost the Make in India campaign. The manufacturers have got the incentive as input tax credit along with protection from imports. Also, the less developed states will get a lift.

As everything has two sides so how can GST will end 12

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Financial Inclusion

By Anupama, IBS Hyderabad to the account holders. This makes banking accessible and reasonable for all the sections of the economy. Reduction of the extraneous formalities which are of no use for the lower

India even after sixty-seven years of independence, a

sections of the society encourages them to use

large chunk of our population is still deprived of the

banking services. One step taken by RBI

banking advantages. This depression has led to

added to this was easing of KYC (know your

financial instability and underdevelopment among the

customer) norms for opening of accounts.

lower income groups of the financial products and



Delivery of Banking services at

your

services. This warning has created the inclusion of

doorsteps

financial services in our economy from the Government

correspondent mechanism by the banks is

and Reserve Bank of India.

marking growth in the banking industry. Ease

What is Financial Inclusion?

of

–

Adoption

of

business

accessibility and affordability to the

unbanked population is being fulfilled by the

Financial inclusion is the delivery of financial services

business

at affordable costs to vast sections of disadvantaged and

correspondents.

Business

correspondents are making banking services

low income groups.

reachable to the rural households through

Government initiatives

suitable technology and innovations in the

Financial inclusion will revolutionize the economy,

services

focusing majorly on the rural parts of the country,



of payments directly to the accounts of

through availability of financial instruments because of: 

PMJDY



Gold Monetization Scheme



MUDRA



DBT

Electronic Benefits Transfer (EBT) – Transfer beneficiaries is reaping enhanced benefits and relief to the beneficiaries. Government has begun the procedure of transferring payment directly to accounts of the beneficiaries. This “human-less” transfer of payment is expected

Impact of Financial Inclusion in India

to reduce government’s cost of transfer and



Creation of habit of savings among people

monitoring. Once the benefits start to accrue



Providing formal credit avenue.

to the masses, those who remain unbanked



Plug the gaps and leaks in the public subsidies and

shall start looking to enter the formal financial

welfare programmes.

sector.

RBI’s initiative towards Financial Inclusion in India 

Initiation of no-frills account – No frills account provides basic facilities for deposits and withdrawal

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Constraints 

High operations cost in extending the financial services to the remote areas is

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FB making it difficult for the banks to enlarge its scope.

Catering to illiterate people or to the population who are versed only in regional language is hindering the growth due to non-development of suitable communication mode.

Way forward Innovations in the banking technology and making financial services reachable to the poor sections of the society with better business prospects, will strengthen the financial deepening adding to resources of the banks leading to the expansion of credit delivery. Initiatives in the banking technology are meant for financial inclusion with collaborative efforts, objective also being the reduction in the transaction costs. This step towards financial inclusion along with the government development programmes will prosper the financial growth and economic development in our country acting as a key driver towards an inclusive growth.

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Brain Drain

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By Rupal Bhatnagar, IBS Hyderabad It is always believed that one should gain education in

and talented people within their own country, they

their own country and give it away in some form or the

look out for human resources from the other

other. That is what is called being patriotic, but there

nations. Once they get good global exposure and

are cases when people are not given proper resources

are introduced to the high quality life and

and hence are compelled to migrate. It would be wrong

facilities, the students become averse to go back to

to say that such people are self-centred because if they

the home country. According to the 2008 HRD

aren’t getting appropriate opportunities here, they

minister, there are about 38% of doctors in US

aren’t left with any other choice. Brain drain is actually

and 36% of scientists at NASA are Indians.

a healthy process only for developed countries like US

At this alarming situation, the government must

and UK but sadly for a country like India it has proved to be totally opposite.

put efforts in the improvement of educational as well as job sectors. It is high time that one needs

This started in 1960s when the proficient youth started

to prevent its precious and valuable brains so that

moving from the poor countries to the rich countries in

no further Satya Nadellas and Sunder Pichais

search of better job opportunities and living conditions.

drain out of our county.

After independence the country has been trying to struggle to eradicate poverty from our nation but

struggles require armies of trained personnel – the scientists and specialists in their particular fields.

However, I

nstead of contributing to the riches of

India, the Indian scientists, scholars, engineers, doctors and economists immigrate to other countries, it is difficult to see how India can implement the policies and attain the goal of prosperity.

But how did the situation turn so severe? Why didn’t the workforce decide to stay back in India and work?

The answer lies deep in the realities of our nation itself.

India doesn’t provide equal and fair opportunities to everyone. The academically well qualified people prefer going abroad for higher research. A recent study conducted by IIM-B shows that the students going for higher studies abroad has increased by 256% in the last 10 years. When 53,000 Indian students went abroad for higher studies in 2000, the figure shot up to 1.9 lakh in 2010. When foreign countries fail to find appropriate 16

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Special Economic Zone:Boon or Bane

By Gaurav Singh , IBS Hyderabad Geographical areas in a country intended to serve as an engine for economic growth supported by quality infrastructure complemented by an attractive fiscal package, both at the Centre and the State level, are termed as Special Economic Zone. SEZs enjoy different business and trade laws from the rest of the country, which are liberal in nature and ensure minimum possible regulations to encourage easy trade with more flexibility. They are characterized by increased trade, skilled

workforce,

state-of-the-art

infrastructure,

increased

investment, and employment. Dedicated financial policies are introduced to encourage setting up of business in the zone regarding investment, taxation including tax holidays where upon establishing in a zone they are granted a period of lower taxation, trading, quotas, customs and labour regulations.

Foreign Direct Investment is what may be a core motive of establishment of SEZs as they are comprised of fast growing industries having skilled workforce with top infrastructure and moreover have perk of flexible and liberal economic laws. A great percentage of income tax exemption attracts investors the most with manufacturing sector getting benefitted highly as they are open for 100% FDI. A large flow of investment in infrastructure and productive capacity leads to generation of additional economic activity and creation of employment opportunities which ultimately proves to be a boon for the nation.

On the contrary, as enterprises and developers are exempted of taxes in SEZs for a period of five years, it can result in loss of revenues for the country and which ultimately builds pressure on the common men. Land acquisition policies for establishing SEZs are inadequate and unjust which leaves original owner of land i.e., farmer in loss and helpless. On some occasions, undue advantage is taken by traders as they buy land on cheap rates and keep it for their personal use which also contributes to real estate boom and deviates the sole purpose of SEZs establishment.

Special Economic Zones have undoubtedly proved to be an effective way of promoting trade and commerce in the country, generating employment opportunities, and encouraging manufacturing activities which

propels the economy of the nation. However, they have also received criticism for becoming the labour camps in some countries and exploiting the fundamental labour rights, natural resources and government policies in the name of economic development.

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Competetion in the E-commerce Industry in India

By Megha Sohane, IBS Hyderabad No battle for the online future of India is more intense than the one now being waged in e-commerce. Sales are still tiny, at $16 billion last year, but India is the world’s fastest-growing e-commerce market and is also prized by America’s and China’s Internet Titans. India has become the biggest test of E-commerce champions i.e., Amazon, Flipkart, Snapdeal and Alibaba. Every popular founder

now wants it to be his second-largest market, after America, and are backing their plans with billions of dollars of investment.

As these companies jostle for market share, they are spending feverishly on logistics and discounts to lure

consumers online. The importance of e-commerce stretches beyond individual firms and into the wider economy. In the West e-commerce companies piggybacked on an existing infrastructure of shops, banks and logistics firms. In India the game being played by the e-commerce pioneers is leapfrog. It could become a model for emerging markets around the world.

In a report according to Morgan Stanley Research India's ecommerce market now increases the 2020 estimate from $102 billion to $119 billion. This inferences the estimate of the total Indian Internet market size from $137 billion to $159 billion. According to the US bank, "We expect Internet penetration to increase from 32% in 2015 to 59% in 2020, translating to a near-doubling of the Internet user base". It estimates India will have almost 320 million online shoppers by 2020 compared with 50 million in 2015.

Research says that every second 3 more Indians experience the internet for the first time. By 2030 more than 1 billion of them will be online. In June last year one in four mobiles used in India was a smart phone, up from one in five just six months earlier. Adding more facts, India boasts the world’s fastest-growing large economy.

India is adding three Internet users every second and is already the second-largest Internet market globally in terms of users, according to the report dated February 12. Here we can say that Indian ecommerce market to grow fastest globally over 3 years.

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Mergers and Acquisitions , but why?

By Shreya Bagaria , IBS Hyderabad

Behind every merger there are reasons why the combining of the two companies would be a good business decision. The underlying principle is simple: 2+2=5. In other words, the combination of the two companies will be more beneficial than the sum of its parts. Acquisition of firms improves the financial performance of the business. The following are the factors which will help to improve the performance of the business

Diversification:

For diver sifying, a company would acquir e another company, which is an

unrelated industry, in order to reduce the impact of a particular industry's performance on its profitability.

Sharpening business focus: For sharpening the focus of the business, companies often merge with other companies that have deeper market penetration in their key area of operations. 

Eliminate competition: Mer ger s and acquisitions help to gain a lar ger mar ket shar e in the product's market share and eliminates competition.



Growth: Hor izontal mer ger s ar e those mer ger s in which the company that acquir es gets the opportunity to grow market share by purchasing a competitor's business for a price.



Synergy: Ever y business tr ies to mer ge with those businesses that has complementar y str engths and weaknesses. By combining business activities, performance will increase and costs will decrease.



Taxation: A pr ofitable company can acquir e a loss maker and use the loss to their advantage and reduce their tax liability.



Economies of scale: The company which is mer ged can r educe its fixed costs by eliminating duplicate departments and operations and reduces the costs thus increasing profit margins.

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Reliance Jio and the Strategy behind the Leader in 4G Segment

By Yash Mehrotra, IBS Hyderabad Mukesh Ambani unleashed war on telecom companies on September 1, 2016 by launching Reliance Jio, the ₹1.5 billion startup has taken the whole telecom industry by a storm. The speech given by Mukesh Ambani in the Reliance Industries’ annual general meeting in Mumbai alone nosedived shares of telecom incumbents such as Bharti Airtel, Idea Cellular and Reliance

Communications upto 9%.

Reliance Jio Info Comm. Limited is an upcoming name in the world of mobile network providers and broadband services in India. With amazing and unbelievable great speed, the Reliance Jio 4G Mukesh Ambani is all set to change the face of telecom industry once and for all by introducing data packs at very minimal

prices and by charging nothing for any outgoing calls.

It’s amazing and totally unbelievable what Mukesh Ambani has introduced to the world in the form of JIO as by introducing Reliance Jio which is competitively very cheap, it shatters industry standards by a long shot.

Take for example, the contemporaneous market price for 300MB of date will charge someone around a minimum of ₹150 or more, but when it comes to reliance jio you will get 1GB of data for as low as ₹50. The other pack offered will cost you ₹500 which will give you 4GB of 4G data on regular usage, unlimited free internet usage during the night, and 8GB of tethered mobile usage. That works out to be about ₹42 per GB.

So, the bigger the plan, the more the incentives. With every Reliance Jio sim and regardless of which pack you opt you will get absolutely free unlimited voice calls to any number at all with free local or STD calls, no roaming, and also free surfing of movies, music and live TV free till December 2016.

As a teenager I would totally go for Reliance Jio, as we can prevail these services till December 2016, and I don’t want to be left behind and not avail the benefits offered by the same, whatever be the strategy behind the whole idea, but it still offers so much of data at such a minimal price. Mukesh Ambani may or may not change the plans after December but right now for the 3 months it’s the best deal that any telecom company can offer. Mukesh Ambani has revolutionized the telecom industry by bringing down the curtain and showing the real face of the telecom industry. When got stung by Mukesh Ambani other telecom companies

bought their prices down to that of Jio’s, this shows that the telecom companies used to overcharge us with such high prices.

Though prices may again go up after December but the common people won’t forget that they were overpriced for so long. So I think Mukesh Ambani has changed the whole telecom industry at a single stretch and got us free from those heavy prices that used to be charged upon us by the telecom companies.

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Economics Behind Olympics

By Aditya Sharma, IBS Hyderabad

The Olympics have evolved dramatically since the first modern games were held in 1896. In the second half of the twentieth century, both the costs of hosting as well as the revenue produced by the spectacle grew rapidly, sparking controversy over the burdens being shouldered by host countries. A growing number of economists argue that both the short- and long-term benefits of hosting the games are at best exaggerated and at worst non-existent, leaving many host countries with large debts and maintenance liabilities. Instead, many argue, the bidding and selection process should be reformed to incentivize realistic budget planning, increase transparency, and promote sustainable investments that serve the public interest.

The 1970s marked a turning point, writes Andrew Zimbalist, author of Circus Maximus: The Economic Gamble Behind Hosting the Olympics and the World Cup. The games were growing rapidly, with the number

of Summer Olympics participants almost doubling and the number of events increasing by a third during the 1960s. Every Olympics since 1960 has seen major cost overruns). The killing of protestors in the days before the 1968 Mexico City Games and the fatal assault on Israeli athletes at the 1972 Munich Games tarnished the image of the Olympics, and public scepticism of taking on debt to host the games also grew. In 1972, Denver became the first and only chosen host city to reject its Olympics after voters passed a referendum refusing additional public spending for the games.

L.A.’s success led to a rising number of cities bidding—from two for the 1988 Games to twelve for the 2004 Games. This allowed the IOC to choose the cities with the most ambitious—and expensive—plans. In addition, as researchers Robert Baade and Victor Matheson point out, bidding by developing countries has

more than tripled over the past two decades. The result has been an increase of bids going to countries like China, Russia, and Brazil, which have been eager to use the games to demonstrate their progress on the world stage. However, these countries have needed to invest massive sums to create the necessary infrastructure.

Costs spiralled to over $45 billion for Beijing’s Summer Games in 2008, over $50 billion for the Winter Games in Sochi, Russia, in 2014, and an estimated $20 billion for Rio de Janeiro in 2016.

The 1984 Olympics in Los Angeles are the only games to have produced a surplus, in large part because the city was able to almost totally rely on already existing infrastructure. As the costs of hosting have skyrocketed, revenues cover only a fraction of expenditures. Beijing’s 2008 Summer Olympics generated

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FB $3.6 billion in revenue, compared with over $40 billion in costs. Vancouver’s Winter Games in 2010 generated $2.8 billion compared with $7.6 billion in costs, and London’s Summer Games in 2012 generated $5.2 billion compared with $18 billion in costs. What’s more, much of the revenue doesn’t go to the host—the IOC keeps more than half of all television revenue, which represents the single largest chunk of money generated by the games.

As costs have risen, a consensus has grown that the Olympic Games need reforms to make them more affordable. Many economists have pointed out that the IOC bidding process encourages wasteful spending, by favouring potential hosts who present the most ambitious Olympic plans. This so called “winner’s curse,”

means that over-inflated bids—often pushed by local construction and hospitality interests—consistently overshoot the actual value of hosting. Observers have also criticized the IOC for not sharing more of the fast-growing revenue generated by the games.

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Urjit Patel :Know the Man

By Pallavi Garg, IBS Hyderabad

We all know that our honorable RBI Governor Mr. Raghuram Rajan has been replaced from his service by Mr. Urjit Patel, who is the Deputy governor of RBI and has been selected for this post by the PM of India Mr. Narendra Modi. He’ll be starting his term of service for next 3 years from the upcoming September.

According to his past performance, he is equally compatible as that of the former governor. So here are some really interesting facts about Urjit Patel. 

He had an experience with International Monetary Fund and has made some of the remarkable decisions regarding changes in the monetary policy with the panel.

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In his past life as the deputy governor, he has played a remarkable role and is considered as an efficient governor for India. He is going to start his term of service for next three years from the upcoming September as dated on 4th.

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Mr. Patel joined RBI in the year 2013 and is serving for the central bank from then only.

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On the counter part of education, Mr. Patel has completed his M Phil in the domain of economics from the Oxford University and also holds a degree in Ph.D. in economics from the Yale University, USA.

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Prior to his appointment as the Deputy Governor at RBI in 2013, Patel was advisor (Energy and Infrastructure) with Boston Consulting Group, while he has also worked with Reliance Industries in the past.

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In addition to all that, he also had a work experience with the Ministry of Finance as the consultant.

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Likewise, Mr. Rajan, he also has worked with the International Monetary Fund in the 1990s and particularly he was assigned to the desk comprising of countries like the Myanmar, India, USA etc.

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Along with all that he also stands responsible for the introduction of measuring the inflation rate on the basis of retail or say on the basis of the consumer prices instead of measuring it on the basis of the wholesale prices.

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This change in the inflation rate was really appreciable as because it worked really well in the Indian economy. And also this parameter provides a better gauge against the frequent price changes.

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After joining as the new RBI Governor, Mr. Patel had to achieve some of the major goals as kept in front of the RBI.

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The first and foremost goal would be of controlling the higher rate of inflation in the country along with undertaking the increased rate of bad loans of the banks.

This is a major emerging issue of the economy, i.e. bad loans of banks, if the rate would not be controlled then it could result in a great harm to the banking sector of India, and hence it has to be carefully undertaken.

So, these were some of the facts about Urjit Patel and the challenges and opportunities as faced by the governor of RBI India.

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