November 30 december 31, 2016

EVENTS

inaugurating the llector, Ernakulam Co t ric st Di , la ul fir anch. Jose V JoK Mohammed Y Sa nakulam North Br Er ’s nk Ba l ra de Fe V, DGM & Zonal new premises of ral Bank, Sunny N de Fe , ad He 1 k or n Thomas, Ex MP seph, GM & Netw ul, Ex MP, Thampa Pa n ia st ba Se Dr , nk I Varghese, Retd Head, Federal Ba chi Corporation, K Ko r, lo cil un Co b, co Kumar R AGM & and Gracy Babu Ja ad and Santhosh He al on gi Re & M , DG CGM, T M George also seen. e ar ad He Branch

n receiv akrishna s 2016 h d a R Award ector K puty Dir Reader’s Travel leisure destie D m s ouri ller est Kerala T onde Nast Trave as voted the b ecretary Vinod w S C h m e ic s h ri th u w To ing of Kerala w Delhi. Union lf a h e b e N on India in rd. nation in ded over the awa n a h i h Zuts

j, Sanitanchayati Ra onfera P t, n e m p C lo f Rural Deve e-day BRICS n Minister o dictory function of thre io n U r, a m t vale ingh To Narendra S ing Water addressing a ’ held in Kochi. k g n n ri ti D e g d d l Bu tion an ipatory Loca ic rt a ‘P n o ence

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angua wn Official L To f o s n o ti ra leb fortnight ce seen. g the Hindi n ti lwal is also ra e u d g n u a a h in K r a P m R ku D M Sasi OLIC). HLL C SBT MD C R ommittee (T C n o ti ta n e Implem

Eastern group’s Eastea dealer scheme winners with Navas Meeran, Chairman, Firoz Meeran, MD & Nabeesa Meeran, Director.

Incite people that tax paying is a privilege

W

Editor & Publisher

Varghese Paul Kozhikode Vineeth Mukundan 8714986177 Chennai Augustine Joseph Ph: 09381000534 Bangalore Gireesh Gopal +91 7204560000 Adithya +91 9538060591 54, 2nd Main, Vyalikaval Bangalore - 560003 Manager-Marketing Sajan K 09895344485 Keethara Publications Pvt Ltd 38/125 1st Floor, Narakathara Road, Kochi-682 035, Kerala, India.

9207734485 www.passlinebusinessmagazine.com E-mail : passline.com@gmail.com

ithdrawal of high value notes in the country made a havoc among the people, particularly for those who live in rural India.

Though Modi is requesting for merely a fifty days’ (from Nov 8 -Dec 31) patience of the people to clear the confusion, financial experts and economists are saying that it will take minimum six months to one year to bring back the economy on rail. The stated reason for the sudden act of Modi is to clean-up India from the evils like black money , corruption, money laundering and for nipping the buds of terror funding.

There is, no doubt, that the Indian economy has a parallel economy consisting of ill- gotten money generated from the above said crimes, which is as equal as the legitimate one. Will this act of demonetisation of notes hamper the menace of black money in the country? Paperless economy may fetch certain transparency in the system but completely eradicating the stash money is not at all possible. Because, the corruption in the country is deep rooted. Until and unless the mind set of people change, this illegal activity will persist.

People from certain corners are arguing that the high tax prevailing in the country is the reason for the black money , which is not all correct. During Indira Ghandi’s regime the income tax rates was 97% which was very high. But now , except land and gold , both direct and indirect taxes are comparatively low in India when we compare with our Western counterparts. Eminent constitutional expert Nani Palkhivala once said that there are three types of people in India.First one is minority of honest people who will pay the tax even if it is on an unfair rate. Second category of people those who are dishonest and they will evade tax even if it is just minimal. The vast majority of third category of people, basically honest, will pay if the tax rate is reasonable, if it is unrealistic rate they will not.

Instead of making abrupt act of marauding the economy , the government should firmly deal with the second category of people those who are dishonest basically. And approach the third category of people with affordable rate of tax and make them aware the need of taxpaying .

But, the second category consists of politicians, bureaucrats and high end businessmen, most of them are influential to respective ruling parties .Then the question arises who will bell the cat?

Varghese Paul

4

RESPONSE FEATURE

November 30 - December 31, 2016

PASSLINE

Jeejas recipes scent of yore Curry powders, pickles and grain with motherly ilk

T Jeeja Kannan

oday’s house makers always hanker on instant food items to cope up with the busy chores. Thereby, curry powders have become an inevitable ingredient of our daily meals. Almost all super markets, malls, shops, outlets are stacked with various brands of curry powders.

Among them, we are familiar with much touted or popular brands or unnamed local stuff. Although there exist a lot of rumors/canards about its quality and purity we have no other option except to use it because this mixer is a part and parcel of our daily menu. In this context, really there is a void to be filled by a refined brand of curry powder. To patch up this gap

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November 30 - December 31, 2016

here emerges a traditionally blended curry powder `Jeejas’ produced

by Jeeja Enterprises at Palakkad which was warmly welcomed by Malayali housewives.

Jeejas Managing Director Jeeja Kannan says, “Curry powders that awake the taste and smell of the traditional one which our mother of yore prepared, were not available now in the market. To fulfill such a demand Jeeja , a house maker and daughter of a mother passionate for cooking, inherited the virtue, craved to introduce fresh and delicious recipes to the Malayalee housewives through the Kerala markets to sustain our cuisine heritage and culture should it not miss our new generation.” Jeeja is hailing from renowned Meledath family in Pattambi as the daughter of V M Unni Nair, officer in PWD, and mother Sarojini Amma, house wife. The urge for entrepreneurship spurred the vivacious Jeeja to venture into the market by forming Jeeja Enterprises inaugurated by O Rajagopal, MLA, at Kallekad in Palakkad in June 2016. The project started with chilli powder which was an instant hit in Kerala hearths because Jeeja’s curry powders are Under the process adopted in her erstwhile home: fresh chilli is washed three times consecutively and smothered by oil and powdered; and the curries made out of it caters the taste and aroma of the curries cooked in our erstwhile homes.

Jeejas’ curry powders recall the sweet memories of recipes made by our aged mothers. Jeejas’ products are natural, free from any preservatives evoking best response from

consumers. The organic nature of Jeejas’ products itself carved a niche in the market.

As the consumers whole heartedly welcomed Jeejas’ provisions, the enterprise’s spirit catches up with the demand to market new items. Thereby, their sambar powder and rasam powder, mutton and chicken pickles will trickle to the market

by December end. Jeejas’ powders of turmeric, coriander seed, chilli, wheat, rice are available in the market s of 14 districts in Kerala, later to spot the foreign countries , says Jeeja . The distribution network in Kerala is being handled by Navaneet Distributors in the name of their son, Navaneet and managed by her husband and social activist K C Kannan. “ For this, offices are to be opened in 14 districts. Besides, the first office outside Palakkad was opened in Malappurm on the eve of Onam. Arrangements are made for distribution in 85% of the places. Target is set to present Jeejas’ items at the national level in three months.

Next step will be exports to Singapore, Malaysia and the Gulf countries.

Our aim is to become the number one curry powder brand in Kerala, Kannan muses, adding the target is to make a company of Rs 50 crore sales turnover in 2020”.

It is the passion for business and guts to face any challenges that led Jeeja to venture into

The products are manufactured by means of modern machines in a neat and tidy place. Powders are mostly made by pounding in the granite mortar (ural).

business. Jeeja has business blood in her veins as her three brothers named Satish Kumar, Dinesh Kumar and Ajith Kumar are indulged in business distributing various products; and they have two sisters namely Sheela Bai and Meera Bai. Jeeja gained the market awareness and experience by working for 8 years in various corporate offices as development officer in different states like Chennai, Bangalore, Hyderabad before coming back to Kerala. She had tryst with real estate, chitty business in the marketing section. Navaneet Distributors,

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being the sole distributor of Jeejas products and wide social contacts of Kannan, helped Jeejas to flourish in the business. Hence, Jeejas can curtail the expenses on that count widening profit margin. A notable feature of Jeejas is that the profit of the concern is set apart for three purposes. One portion is shared by the management ; another part is given as incentive to employees and the third portion will be spent for CSR activities undertaken by the charitable trust named Sree Bhadra Charitable Trust.

Jeeja’s role model is Beena Kan-

6 nan of Seematti. Her success story has inspired Jeeja to venture into textile field as she had interest in fashion designing and had started preliminary work for it in Thiruvananthapurm. But destiny destined her otherwise as a family advisor endorsed her to the food processing business; and she faithfully accepted it. It is the support of her husband and family and the stress on quality and value were the prime factors that prompted her to be an entrepreneur. Noted cine actress Urmila Unni and the serial actress Meghna Vincent who mesmerized umpteen house wives through her character as `Amruta’ in the serial, are the brand ambassadors of Jeejas’ products.

As Kerala spices and condiments have a mass appeal globally Jeeja decided to launch the curry powder business. The thriving business in curry masala at that time indicated the infinite scope of success of the business in this category. In tandem with the present trend of the people to encourage the organic products Jeejas thought of the future demand for the unadulterated pure products persuaded them to curry favour with the food product business. On the onset, they had plan to bring a noted brand of chilli powder from Maharashtra and sell it in Kerala. On a rethought, they decided to deviate from the decision as it was found to be disadvantageous and launched their own enterprise. ``Fund crunch was the biggest hurdle to start any project in Kerala.

Government’s pronouncement of lending finance profusely to new enterprises was hollow. Banks’ financial help ended in mere words. No bank lent her. The finance was raised from friends and pawning own gold.

Some Samaritans lent money waiving interest with the assurance that the refund can be made when and after the business became successful. District Industries Centre and Pirayi panchayat authorities stood with us in thick and thin till our venture became profitable. When the business thrived, the once skeptical banks now offering monetary assistance”, Jeeja laments.

Jeejas is using the chilli collected from the fields of Guntoor in Andhra Pradesh. We are very keen on gathering good quality chilli from agents and farmers and powdered in the flour mills of Jeejas in Palakkad.

Coriander seeds are fetched from

November 30 - December 31, 2016

Guna and turmeric from the largest turmeric market at Sangli. Thirteen types of basmati rice are collected in accordance with its size. As Palakkad is a paddy bowl there are plenty of ethnic paddy fields there.

Jeejas brings such paddy variety in the market. Jeejas pays money to farmers for farming and while harvesting they procure the paddy. The organic manure for agriculture is brought from North India.

There is uniqueness for Jeejas wheat powder as it is sans maida.

There are two types of wheat powder for the use of diabetic and nondiabetic. The packets are super scribed as `wheat powder’ instead of `atta’. The products are manufactured by means of modern machines in a neat and tidy place. Powders are mostly made by pounding in the granite mortar (ural).

There is plan to introduce brancoated rice for diabetic people.

Jaya, R8 rice are used for this. `A new product a month’ is the slogan of the company. Anti-cholosterol cooking oil, organic manure used for different plantations under the brand name of Jeejas Enterprises will be marketed. Pickles are available in 100 gm, 200 gm packs viable for one month use.

Pickles are packed in earthen urn protected by thermocol pack, instead of packets

and bottles. Bes t quality will be the specialty of Jeejas products so that the price will be a shade higher than other co’s products available in the market. As Jeejas’ products are without any preservatives its shelf life will be short. “ Best use within 3 months’ is the warning on the pack.

We maintain stringent quality measurers on par with export standards even for local markets, reveals Kannan.

As there are only 30 staff now the demand of the Jeejas products propel them to work at least three

K C Kannan

Navaneet

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shifts a day to execute the flooding orders. And the company is contemplating to recruit more hands, assumes Jeeja . Jeeja is proud of herself having interest in cooking and can manage herself a feast of 2000 guests in any function of that kind.

Steps are being taken to merge proprietorship concerns Navaneet Distributors and Jeeja Enterprises under the tag line of` private limited company’ following which Kannan will be the Chairman and Jeeja Kannan will be the Managing Director.

Jeeja Kannan

7

FINANCE

November 30 - December 31, 2016

KSFE delivering to all ; trusted by all

our branches will be connected by core software within six months (181 branches are already connected). ECollection, Net-through payment are already established in top locations.

We are also on the way of providing the facility of on-line auction in chits so that a customer can participate in chit auction from anywhere in the world. The concept of virtual branch is also under consideration.

How about your chit business going ahead? Private players are complaining that the Government is suffocating them with stringent laws in order to create monopoly for you, is it true?

Joshy Paul Kerala State Financial Enterprises (KSFE) is one of a few Stat owned public sector entities making profit and paying dividend to the Government each fiscal. It is a one stop shop for middle class and upper middle class community for their financial needs. The organisation is mainly indulged in chit business. Being a public sector enterprise, unlike other private players in the chit business, KSFE is transparent and trustworthy. Replying to Passline queries, KSFE Managing Director Joshy Paul is unveiling his plans and strategies for further impressive growth of the institution in coming days. Excerpts:

K

erala State Financial Enterprises(KSFE), a fullyowned State Government Institution and pioneer in NBFC business in the State, has been focusing on middle-class and upper middle class of society for their financial needs.

Do you think that the institution needs a paradigm shift from its routine business strategies to modern and much more improved strategies to cope with the challenges from today’s highly competitive financial market?

The prime objective behind the establishment of KSFE in 1969 was to save common people from the clutches of unscrupulous fly-by-night chit fund operators. After the years, the prime objective is still the same. We have chits with a monthly instalment of 1,000 in which common people

are enrolled. We are doing traditional, not conventional; Business with a touch of modernity. TRUST factor is the differentiator.

As a business organisation, we then opened our doors to all classes of people of society. Already there is a paradigm shift. Now KSFE is a financial super market. We have a wide gamut of loan products- Chitty based loans, Gold Loan, Housing Loan, Personal Loan, Car Loan etc, and also attractive deposits schemes. We are working on products that would attract youth and all segments of society including NRKs with in Chitty Fund Act (CFA) 1982 and Foreign Exchange Management Act (FEMA).

Today is a world of technology and every organisation utilises it for its growth and development. We are also on this path of growth and all of

KSFE’s aggregate business is more than 30,000 crore and we are aiming at one lakh crore business within next 5 years. As you know we, as well as private players, are working under the same Act, CFA 1982. The central theme of the Act is giving maximum protection to the subscribers. Fly-bynight operators crushed the dreams of many a common people; forced them to lead a miserable life; because of loss of money. Last month also, media carried the story of chitty scam in Thrissur district.

KSFE, as a business organisation, is competing with all players. It is a fact that we have the trust of people more than that of any other competitors, as KSFE is a company wholly owned by the Government of Kerala.

We are guided by the Central Chit Fund Act 1982, Companies Act, Income tax Act, rules and regulations of RBI and Central Excise and Service Tax department. So, such allegations are baseless.

What are the plans and the strategies for the current fiscal and the closure of the current fiscal is 6 months ahead. Can you achieve your earmarked targets?

For the last few years, KSFE achieved and exceeded its business budget through branded Chits. For the current financial year also, we have launched branded Chit named “PONNONA CHITTIKAL 2016” for this ONAM festival season. As FEMA approval is in place now for NRK’s investment in chitty, we are also exploring ways and means to penetrate to NRK base. Recently, our Finance Minister Dr T M Thomas Issac made an announcement in media that the State would raise 25,000 crore from

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NRKs, through KSFE Chits. We are sure that we can achieve and exceed our targeted business. It is a fact that we have been on an upward trend since beginning and is one of the most profit generating PSUs of the Government of Kerala.

Is there any plan to convert the institution into a bank or floating another company for tapping the opportunities in the banking business, since you have enough capital base?

This is a matter of policy of Government, not under my portfolio to answer or comment. We have the strength and capability both in terms of financial capacity, human resources and a strong base of customers.

What is the status of modernisation in the institution?

We will be fully on Core Banking solution—Centralized Accounting Software for Business Application (CASBA)-- within 6 months. 181 branches were already connected. Once that was established, digital passbooks and other apps would be enabled. Ecollection and Net thru payments are up in many branches. We are also looking forward to formulate a virtual branch to promote NR business, e auction etc.

Now banking and finance industry are in deep-neck trouble due to the NPAs, how your assets performing at this scenario?

Our NPA is not at the high end, but I admit that we have not yet reached at the desired level. We are covered under Revenue Recovery mechanism and not SARFAESI Act (The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002). We have initiated an intensive program IDLI (Intensive Drive for Liquidity Improvement) and our branches are now practicing CACD (Current Action for Current Default).

We are hopeful that these initiatives would bring in best results this fiscal itself. All our advances are fully covered by sufficient security, and as such there are no threats of NPA in KSFE, as our loans are in retail portfolio.

The percentage of NRI exposure of the institution?

As of now there is no specific Categorisation NRI. The July 2015 amendment of FEMA enabled us to receive NRK remittance to chitty channelized through banks. We are shortly introducing Special chitty scheme for NRKs who could use it as an investment and borrowable instrument.

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ANALYSIS

November 30 - December 31, 2016

PASSLINE

Pinarayi Vijayan – Kerala’s Deng Xiaoping?

P C Cyriac

R

emember Deng Xiaoping?

The dynamic leader of China, who took over as the General Secretary of the Chinese Communist Party and the Ruler of the Peoples Republic of China, after the exit of the Great Helmsman, Mao Zedong, in 1978. He was the man who made the classic statement, “ I am

not bothered about the colour of my cat, so long as it catches the mice ! “ With this statement, Deng conveyed the message that he had no love for ideological rigidity and that he was embracing pragmatic policies.

Soon after, Deng had embarked on a massive liberalisation mission. The Socialistic policies were all abandoned. Private property rights were restored. The farmer was permitted to retain and sell privately the agricultural produce beyond the limit fixed. Foreign Direct Investment was welcomed and liberal incentives were offered for industrial investments in the Special Economic Zones , where top class infrastructural facilities were made available at concessional rates. Massive infrastructural Projects like Highways, Railways, Ports, Airports, Water Supply Projects and Sewage Treatment Plants , Housing Complexes were

all planned with a long term vision and executed at break- neck speed.

Land required for the Projects was got acquired without any problem, as Deng made no liberalization in these areas and continued to maintain an iron grip over the authoritarian administration. And he had no reason to worry about the next Elections, as he continued to have the Single Party system of Government. ( Even today, in China, there is only one party permitted to function . I mention this specifically here, as some time ago, I had to encounter in a College, while chairing a Panel discussion there, an SFI leader who could not believe that China was still a ‘one party democracy’. And on another occasion, one met a Village Panchayat President who also thought that China had a multiparty democracy.). Though there are constraints in repeating a ‘Deng Act’ in a Democracy, if Pinarayi Vijayan who enjoys absolute authority over the Party and the State machinery now, can manage to throw away ideology into the Arabian Sea and follow pragmatic policies, it will create a big impact.

In 1978, when Deng had begun his journey, India and China were more or less at the same level of economic development. Almost the same level of GDP, same amount of export earnings, foreign exchange reserves, power generation capacity and in most of the other economic parameters. And after Deng embarked upon his adventurous voyage, China began to grow at tremendous speed , registering two- digit growth figures year after year, continuously for three decades! No wonder, they have forged ahead, leaving us far behind. And just as Deng had inherited a China where the major sectors of the economy like agriculture, industry and infrastructure were all in doldrums, now Pinarayi Vijayan has taken over the reins of administration of Kerala, which is facing severe economic problems and with its agriculture and industry in decline . It

is common knowledge that but for the remittances from the Gulf, Kerala would be in deep trouble. The revenue receipts of the Government are inadequate for our requirements . In fact, the bulk of the income is spent on Salaries, Pensions and Welfare Doles, leaving only 25% of the available resources for development schemes. Loans also are taken to the maximum possible extent year after year. But they are used not mainly for capital investment, but only for payment of interest on the earlier loans and for the usual day to day expenses of a profligate State. Dr Thomas Isaac, the erudite Finance Minister of the State has already explained the problem in the much publicized and much discussed White Paper he had issued soon after the new Ministry took charge. It is clear that the State should take drastic steps to control its expenses and increase its income. In the State Government’s Budget which he presented, Dr Isaac had made a bold statement that there would be a ban on new appointments and the formation of new Corporations and undertakings.

But after five days of Budget discussions in the Assembly, he had to beat a hasty retreat and withdrew this declaration. Obviously, he could not

Chief Minister

Pinarayi Vijayan has demonstrated his readiness to become tough by telling the employees plainly that office time should not be spent for other activities and that files should move fast. He has now got to demonstrate that he means business, by taking action against those who fail to deliver.

9

ANALYSIS

withstand the pressure from the Party ideologues. Though a Dr Isaac may not be able to overrule them, Pinarayi can, if he desires to do so; if he has the will to do so. But, will Pinarayi Vijayan be able to emulate China’s Deng and free himself from the iron grip of the ideological rigidities of the Marxist Party and adopt pragmatic policies and control extravagant expenditure ?

It is really impossible to reduce the outflow on Salaries and Pensions, all of a sudden. But new appointments have to be stopped immediately. Pressing requirements can be met by re-deployment of the surplus staff available in every Department.

The Creation of new Departments and Undertakings has to be avoided.

Posts which are unnecessary should be abolished when the incumbents retire. A good opportunity for abolishing the Commercial Tax Checkposts (which are dens of corruption as well) and re-deploying the Staff there, is coming up when the new GST system of taxation gets implemented and the whole country becomes a single market. But, the Finance Minister chose to overlook this and made an announcement that even after the GST , the Check posts would continue as Data Collection and Facilitation Centres ! Even if the Government takes severe and unpopular measures and cut inessential expenditure and bring down the deficit over a Five Year Period, at the end, all the savings would vanish when the Wage Revision of the Government Staff is implemented. In Kerala, the wage revision is effected once in five years, unlike in the Central Government, where it is done once in ten years. The Pay Commission set up by the State Government, after recommending liberal improvements in the Staff emoluments had suggested last year, that in future , Wage revision should be made once in ten years only. One hopes that the LDF Government would implement this recommendation and bring down the deficit. It can do so, if Pinarayi Vijayan really has the political will.

The payment of Pension for the Retired employees is also a commitment which cannot be dishonoured. At the same time, the Central and the State Governments have realized the acute necessity to control the expenditure under this head and they have changed the Pension system and brought in the Contributory Pension System, where both the State and the employee would make pension contributions each month.

November 30 - December 31, 2016

This scheme was implemented by the Centre and all other States, ten years ago. Kerala implemented it five years ago. Now the Left Democratic Front in their Election Manifesto has promised to review this . And the Budget is silent about it. One hopes that Pinarayi Vijayan will avoid this review, in the interests of the State and its economy.

Another area where Kerala is losing a lot of money is our one hundred and odd Public Sector Undertakings, making losses of the order of hundreds of crores of rupees, every month! It would be a boon if these Undertakings are examined closely and remedial measures taken. Major Surgeries and even mercy killing may be called for. Only a person with the tough image of a Pinarayi Vijayan can manage to take these drastic decisions and heal this running sore on Kerala’s economy.

But will he do this?.

Yet another major area requiring urgent attention in Kerala is the creaking infrastructure . Massive investments are required here.

But where is the money? We have already seen how little the Government would be able to muster from its own revenues for this sector. Even with the expected increases in the tax inflows by making the collection process more efficient and plugging loopholes , a substantial increase in revenue can be expected only after the GST gets implemented. But the demand from the infrastructural sector is so huge that a massive inflow of private investments alone can save the day. The Budget recognizes this and hopes to attract the private funds , especially those from the Gulf, through the Kifby (the Kerala Infrastructure Fund Board) which will get a structural facelift and be presented as the channel through which private investments can flow in to the several ambitious infra projects which Kerala hopes to propose before the investor community. But, it is to be noted that for the private sector investors to get enthused, several policy initiatives ushering in changes in Kerala’s work culture is a must.

For example, the ubiquitous and condemnable practice of the Head load workers organizing themselves into militant groups and collecting money for loading and unloading operations, though they do no work and though the operation is done by machines. This type of ‘nokku kooli’ exists nowhere else in the whole

World ! If the Government abolishes this corrupt practice and sets the people free, it will be a great morale booster . Pinarayi Vijayan is capable of doing this. But will he do this?

Though political corruption in Kerala is much less, compared to many other States in India, the people, the businessmen, entrepreneurs and ordinary citizens who have to approach the Government offices and agencies for getting things done, are driven from pillar to post by the rent-seeking petty officials. Systems and procedures in our Government offices are made deliberately complicated and the Employees’ Unions dictate terms here. The procedures have got to be simplified and liberalized, responsibility for finishing tasks has to be fixed and the supervisor should be held accountable for results. Deterrent punishments also should visit upon the employees who misbehave. Chief Minister Pinarayi Vijayan has demonstrated his readiness to become tough by telling the employees plainly that office time should not be spent for other activities and that files should move fast.

He has now got to demonstrate that he means business, by taking action against those who fail to deliver.

Recently the Government completed its first 100 days in

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office, but the occasion was marred by the Chief Minister’s exhorting the people of Kerala to join the All India Strike Call made by the Central Trade Unions. And on the 101st day, life was paralysed in Kerala alone and not in any other State! And this, only after a few days of his calling upon the Staff, not to waste time !

Keralites stayed home that day as they feared violence by the strikers.

If only Pinarayi had told the workers that while they were welcome to go on strike, he , as the Chief Minister of all the people, was duty-bound to give protection to those who wished to work! He lost a golden opportunity to send the right signal. Yet , all is not lost. The Chief Minister has shown that he was capable of resisting the diehards and move on with pragmatic policies, by standing firm and ignoring inner party opposition on appointing a Harvard Economist as his economic advisor, despite her well -known neo-liberal mindset. He has just begun his innings and there is still time for course-correction.

Let’s hope that Pinarayi Vijayan will not let Kerala down and will not miss the opportunity to go down in History as Kerala’s Deng Xiaoping!

(The writer is a former Principal Secretary to the Tamilnadu Government’s Industries Department).

10 REALTY

November 30 - December 31, 2016

PASSLINE

Dream homes from the legendary craftsman

Anil Varma

A

man who has a graduation in Civil Engineering; 25 years of impeccable track record in developing more than 5 million sq ft of realty; a person who fulfilled the dreams of thousands for their dwelling into reality; an associate with number of construction ventures in South India; the Director and share holder of the best selling real estate brand in the State – Asset Homes from 2006 - 2016, he is none other than Anil Varma, the master craftsman. Will you hesitate to buy an apartment or villa of his Midas touch from his new venture, Varma Homes ? No, never, is it n’t ? Here is the glad news! Anil Varma has commenced his new venture Varma Homes Pvt Ltd and

launched his maiden project Varma Regent at Ponekkara, Edappally , Kochi.

“Varma Regent is a modest, luxury apartment project having one, two and three BHK facilities,” says Varma. “ It will have a total of 40 units ranging between 553 to 1389 sq ft with all modern amenities and quality construction made out of leading brands in building materials. ‘ Varma Regent’ is ideally located at Ponekkara, the place which has easy accessibility to the nerve centres of the city and to lessen the travel agonies of proud buyers of Varma Regent the Kochi Metro is commencing its first phase upto Edapally. Our price range for Varma Regent is from Rs 30 lakh to Rs 60 lakh and we target employed class those seeking affordable houses. We avoid the contractors in our sites and the company is executing the construction work directly to reduce the cost. And also we take

maximum care to avoid unnecessary expenses. Apt project planning, timely completion, responsible fund management through joint ventures etc will help us to pass proper value to our investors for their investments,” Varma adds.

Varma Homes would construct altogether 500 homes with the investment of Rs 300 crore in different parts of the State in a short span of time.

The group starts with the tag line of ‘Constructing Happiness’ is planning 7 projects initially, in Thiruvanthapuram, Kochi and Thrissur. The company will also commence construction of villas and apartments in Coimbatore shortly. According to Varma, “ Coimbatore is a good market. There is not much speculation there and compared to Kochi the spur of local demand is always there. Not only that, unlike Kerala, construction cost and land cost are less”.

Along with ‘Varma Regent’ the company has started initial works on projects in Thripunithura, Vennala and Thiruvamkulam in Ernakulam and Kuttanelloor in Thrissur district and also a project near Technopark in Thiruvananthapuram.

Thripunithura and Vennala will have three and one apartment complexes consisting of 90 and 48 units respectively. In Thiruvakkulam it will be a villa and apartment project of 120 and 160 units. In Thrissur there will be 140 units of apartments and in Thiruvanathapuram the company will construct 72 apartments.

Kochi is listed in the 5th position of the Ministry of Urban Development’s Smart City Mission; and in order to provide basic amenities of the city the Central government is funding Rs 2,076 crore. Naturally, through e-

governance, and proper water management Kochi city will be in a commendable status for living. As part of this development, techies and industries from Chennai and Bangalore may opt for a change of place and in that case the demand for homes will rise tremendously and the company is looking this as a better prospects in future. The group has also plan to associate with Central and State government’s proposed affordable housing projects .

“The firm has an idea to invest Rs 275-300 crore in commercial property development also in the very near future. The company is aiming for the construction of a knowledge park in Kochi for the IT and IT enabled services,” Varma points out. As regards the prevailing market condition he said, “ The market is slowly picking up; the real buyers are now buying, not speculating, it is a good sign. The regulatory measures being taken by the government is a boon to the industry and for genuine players in the industry . But the Act is a biased one, totally in favour of the buyers and no clause to address our grievances” .

Anil Varma’s wife Dr Mini Varma, an ayurveda practitioner, is actively participating in the company affairs as Director. She is a senior visiting faculty in major ayurvedic institutions and with her advice and support the company is making plans on engineering green eco – friendly spaces that compliment the nature.

The couple is having a daughter Arathy Varma, studying in 12th standard at Bhavan’s Vidya Mandir.

11 IMPACT

November 30 - December 31, 2016

PASSLINE

Prospect for Indian Americans and

Vincen Xavier Palathingal

Why & How Trump won?

R

epublican nominee Donald Trump shocked the world as he shattered the dreams of Democratic nominee Hillary Clinton to become the first woman president of the United Sates. It was a very tumultuous election season for the last 18 months as Trump was ridiculed for his rhetoric and bitter language by the intellectuals and main stream media alike. Most of the opinion polls predicted an easy Hillary victory. However, the American People had the last say as they decided to stick with Mr. Trump and gave him a

thumping victory on November 8th.

Mr. Trump will be sworn in as the 45th President of the United States on January 20th, 2017.

President Trump is expected to lead USA to recovery from massive government over-spending, a broken domestic industry, a failed immigration system and a weak foreign policy. Trump movement spoke for the common man. For those who worked hard and played by the rules, American dream was always within reach. However, more recently, the American system has changed for the worse as the big government advocates in Washington are stifling the American small businesses by overregulation and draconian executive orders. President Obama seemed to believe that private business is a natural opponent of social justice, the same way socialist politicians in the rest of the world always understood. Secretary Clinton didn’t find anything wrong in collecting a ton of money while serving as Obama’s top diplomat from countries and interests around the world who do not share American values and who are trying to sabotage American system by infiltrating at the highest echelons of US government.

The political correctness of American leaders in general have reached a

point where they were even ready to disown the founding fathers and their contributions due to all the social structures and beliefs of their times, such as slavery and the exclusion of women from political processes.

Their reluctance to call America’s enemy ‘radical Islamic terrorism’ by its name to appease the Muslim world was not helping anyone at all. This was the backdrop for the common folk in America embracing Trump’s straight talk and common sense approach. Mr. Trump used social media very effectively to counter the main stream media who were vastly hostile to his campaign.

Indian Americans

Trump’s agenda of ‘Making America Great Again’ will be very beneficial for Indian Americans. His background in business has acquainted him with the challenges entrepreneurs face every day, especially the small business owners. He has proposed to reduce taxes heavily and to relieve tax payers by excluding childcare expenses from taxation. He intends to abolish estate taxes, lower business income tax to 15%, and remove limitations and taxation of foreign investments in America. American economy has only grown about 1% over the last year, the weakest recovery since

the Great Depression, predictable consequence of massive taxation, over regulation, bad trade deals, and enormous bureaucratic quagmire.

This is a reason why wealthy, hardworking and self-employed Indian Americans are going to benefit tremendously under Trump’s economic agenda. His plan will enable growth, by encouraging small businesses and providing tax-cuts throughout.

The benefits of a growing economy will be enjoyed by all.

Mr. Trump exhibits enormous strength when it comes to strong defence and controlling illegal immigration, a very popular message in the majority white community. He wants to put a stop to the refugee intake from the war torn Arab countries. Mr. Trump along with a huge majority of US citizens believe that there is not enough data on these potential refugees to vet them properly in stark contrast to Hillary’s call to increase the refugee numbers by 500% from President Obamas record. Trump emphasized the need to defend ‘law and order’ at any cost. In continuing violence against police in major US cities, he was always on the side of the police unlike Hillary who sided with agitating sections of the society.

Indian Americans who are extremely concerned about the safety and security for their loved ones always appreciated the strict law and order they found in America compared to their motherland and would like to keep it that way. Trump’s reluctance to bring refugees with possible terrorism ties or those with potential to become radicalized while in the United States are indeed the natural preference of peace loving Indian Americans as well.

Trump’s administration wants to ensure the safety of the American people, by securing the borders and force the numerous sanctuary cities to cooperate with the enforcement of federal immigration law. A firm policy in that direction will cut the influx of illegal migrants, who might engage in criminal activities. Most Indian Americans being legal immigrants have nothing to worry about this approach. Once the illegal immigration is under control the focus could shift to fixing the issues in the legal immigration and that can be very benefi-

12

November 30 - December 31, 2016

PASSLINE

India under Trump presidency cial to Indian Americans on H1 visas waiting for extremely long time to get their permanent residency.

In 2016, H1-B visa applications hit record-high again. 236,000 workers applied for the work visa which was up 3,000 from 2015 and a notable 172,500 from 2014 (CNN). Each year only 65,000 applications are accepted, out of which 20,000 are reserved for graduate students. Clearly, H1-B is overloaded in terms of its demand.

Decreasing this quote is neither in the American interest nor practical.

It is no surprise that H1-B has been a popular mechanism for recruiting qualified and affordable labor to perform skilled jobs. It has also led to several job-creation outlets, as these skilled workers a) diversify the corporate landscape by expanding businesses, and b) continue to contribute to the economy, which leads to a bigger pie and therefore a bigger share.

H1B visa program is a key tool that ensures that United States remain the leader of the technology revolution. Trump’s administration focused on ‘Making America Great’ cannot afford to overlook the benefits of such tools.

He intends to renegotiate trade deals, especially NAFTA, a very unpopular trade deal with Canada and Mexico.

He proposed to withdraw from TPP, that he contends will destroy the US car industry. Per Peterson Institute, TPP would increase the US automobile trading deficit by $23 billion by 2025. He also intends to apply tariffs and duties to countries that take advantage. He proposed massive investment to improve US domestic infrastructure including roads, bridges and airports, a direct indication of “improving America”. These proposals if implemented are in the best interest of Indian Americans too, as manufacturing returning to America from China and Mexico will create a lot more job opportunities in the science and technology domains, a natural strong hold of Indians.

India

Trump has very strong views when it comes to partners of the United States. His rhetoric throughout the campaign process was very concerning to the existing strong allies of the US. He questioned these part-

nerships and countries like Japan, Germany, South Korea, all felt very uncertain of their future relations with the US. However, his support for India, especially Prime Minister Modi, has been constant. He has expressed his admiration for Modi’s energy in reforming India. He, too, wishes to cut massive, unnecessary bureaucratic spending – like Modi has – and “looks forward to working with him”. More importantly, he has called India a “natural ally”, and stated that India and the US will be “best friends” since “no other relationship is more important to us”.

Trump is the number one enemy of Islamic fundamentalism emanating from Pakistan, which India has been dealing with for decades. In our fight against extremist violence and radical Islamic terror, Trump realizes that India will be a vital partner. President Trump is expected to approve a Congressional bill to declare Pakistan a terror state when the legislation reaches him at the White House. He intends to seek Indian assistance to deal with Pakistan. He had only praises for India and its leaders.

All the data so far indicates that he could continue the Bush-Obama

agenda of strengthening India as a US partner in Asia with more vigour and sense of purpose. Everyone is familiar with Obama’s India pivot to counter China’s growing influence.

Trump has the foresight to realize that apart from countering China, India will play a major role in defeating the radical Islamic ideologies.

During the campaign, Trump attended an event hosted by the Republican Hindu Coalition in New Jersey.

While addressing the Indian and Indian American audience at the event, Trump was quick to suggest that with his election, “India and the Hindu community will have a true friend in the White House”. He appreciated the Indian values of “hard work, education and enterprise” and acknowledged the immense contributions Indian Americans make to the American economy. He also applauded the community’s entrepreneurial spirit and its efforts to educate its youth.

In summary, Trump supporters believe that Trump presidency is the opportunity of their life time to restore the lost trust in the American dream and for the country to come together as a unified nation under one flag and one constitution shar-

ing common values and aspirations.

America should not become a loose union of various ethnic people happen to live together in the same geography for sharing a large economy.

America should be a real country, with protected boarders and love of the country shared by all its citizens.

Trump win is a win for America and American exceptionalism. America should remain ‘the shining city on the hill’, a place where law & order and security are norms not exceptions.

America should remain the hope for the entire world and a place that is everyone’s dream, the same dream which we want to pass onto our next generations. Trump presidency is an opportunity for the American People to ‘Make America Great Again’ and India and Indian Americans stand to benefit tremendously in this endeavour. With increased diplomatic ties, military cooperation, economic trade, all based on shared-interests, the Indo-American relation seems as stable as ever. Trump and Modi is poised to take this to the next level where the Indo-American partnership could become the most defining partnership in the 21st Century.

13 TRADE DEAL

November 30 - December 31, 2016

PASSLINE

TPPA UNDER SERIOUS THREAT

The Trans-Pacific Partnership Agreement has become a political football in the US presidential elections and with the public mood so antiFTA, this trade deal faces the real possibility of being discarded.

By Martin Khor

I

t was signed in February by the 12 countries that spent five years negotiating it, and was widely expected to come into force within two years, after each country ratifies it.

But now there are growing doubts if the controversial Trans-Pacific Partnership Agreement (TPPA) will actually see the light of day. Ironically, it is the United States, which led the negotiations process, that may in the end be its undoing.

The TPPA has become one of the hottest issues in the US presidential election process. Opposing the TPPA is at the centre of Donald Trump’s campaign.

Bernie Sanders championed the anti-TPP cause, saying: “We shouldn’t re-negotiate the TPP. We should kill this unfettered FTA which would cost us nearly half a million jobs.” Hillary Clinton also came out against the TPPA, a turnaround from her position when she was Secretary of State. To counter suspicions that she would again switch positions if she becomes President, Clinton stated: “I am against the TPP, and that

means before and after the elections.”

They may all be responding to a popular feeling that trade agreements have caused the loss of millions of manufacturing jobs, stagnation in wages and the unfair distribution of benefits in US society. Besides the presidential candidates, two other players will decide the TPPA’s fate: President Barack Obama and the US Congress. Obama has been the main advocate for the TPPA, passionately arguing that it will bring economic benefits, raise environmental and labour standards and place the US ahead of China in Asian geo-politics.

So far, he has not succeeded. Obama must get it ratified by Congress before his term ends, in the lame-duck Congress session after the election on Nov 8 and before mid-January 2017.

It is unclear whether there is enough support to even table a lameduck TPP Bill, and if tabled, whether it will pass. Last year, a related fasttrack trade authority Bill was passed with only slim majorities. Now, with the concrete TPPA before them, and the swing in mood, some who voted for fast-track have indicated they won’t vote for the TPP. Most Democrats have indicated they are against the TPPA. They include Clinton’s running mate for vice-president, Senator Tim Kaine, who had voted for fasttrack, House Minority Leader Nancy Pelossi and House Ways and Means Committee Member Sandy Levin who

said: “It is now increasingly clear that the TPP Agreement will not receive a vote in Congress this year, including in any lame duck session, and if it did, it would fail.”

Congress Republican leaders have also voiced their opposition. Senate Majority Leader Mitch McConnell said that the presidential campaign had produced a political climate that made it virtually impossible to pass the TPP in the lame duck session. House Speaker Republican Paul D. Ryan, who had helped write the fast-track Bill, said he sees no reason to bring the TPP to the floor for a vote in the lame duck session because “we don’t have the votes”.

Meanwhile, six House Republi¬cans sent a letter to Obama in early August last week urging him not to try to move the TPP in a lame duck session. Though the picture looks

President Barack Obama and the US Congress.

Obama has been the main advocate for the TPPA, passionately arguing that it will bring economic benefits, raise environmental and labour standards and place the US ahead of China in Asian geo-politics.

grim for Obama, he should not be He said when the elections are over he will be able to convince Congress to vote for the TPP. He added that many people thought he would be unable to get fast-track through Congress, but he was able to prevail.

To win over Congress, Obama will have to respond to those on the right and left who are upset on specific issues such as the term of monopoly for biologic drugs, or the inclusion of ISDS (investor-state dispute settlement) in the TPP. To pacify them, Obama will have to convince them that what they want will anyway be achieved, even if these are not legally part of the TPP.He can try to achieve this through bilateral side agreements on specific issues, or insist that some countries take on extra obligations beyond what is required by the TPP as a condition for obtaining a US certification that they have fulfilled their TPP obligations.

Obama could theoretically also renegotiate specific clauses of the TPP in order to appease Congress. But this option will be unacceptable to the other TPP countries.

In June, Malaysia rejected any notion of renegotiating the TPPA. “The question of renegotiating the TPPA does not arise even if there are such indications by US presidential candidates,” said Dr Rebecca Fatima Sta Maria, then the secretary-general of the International Trade and Industry Ministry.

Singapore Prime Minister Lee Hsien Loong, on a recent visit to Washington, dismissed any possibility of reopening parts of the TPP as some Congress members are seeking.

In January, Canadian Trade Minister Chrystia Freeland said a renegotiation of the TPP is not possible. Japan also rejected renegotiations. What happens if the US Congress does not adopt the TPP during the lame duck period? The 12 countries that signed the agreement in February are given two years to ratify it.Theoretically, if the TPP is not ratified this year, a new US president can try to get Congress to adopt it in the next year. But the chances for this happening are very slim.That’s why the TPP must be passed during the lame duck session. Or it may have to be discarded, probably forever.

That would be a dramatic marker of the changing winds in public opinion on the benefits of free trade agreements, at least in the United States, the land that pioneered modern comprehensive free trade agreements. –

Third World Network Features.

( Martin Khor (director@southcentre. org) is executive director of the South Centre)

14 INNOVATION

November 30 - December 31, 2016

PASSLINE

GOODBYE FOSSIL FUELS John Samuel

I

t is difficult to believe that our cars and passenger buses won’t be running on fossil fuels like petrol and diesel anymore and that batteries will be the primary source of energy to run our cars and buses.

The Lithium ion battery has been in service for the past couple of years, Tesla Model S is the most advanced of the lot. Tesla Model S has a range of about 350 km per charge. This is considered to be sufficient for a couple of days drive in the city. The battery can be charged at home during the night using a 240 volt outlet for a fast charge or a 110 volt outlet which will charge a bit slower. An average city drive won’t exceed 150 km on a busy day well within the prescribed range of 350 km. You may have a solar panel on your roof enough to power your car batteries at night, making your fuel cost very low indeed.

Lithium ion batteries are environment- friendly as they produce no carbon dioxide, toxic discharge or particulate matter thus substantially reducing global warming and leaving our world pollution free.

Lithium ion used in batteries last for several years, about 10 to 12 years which is the useful life of the car..

There is no technology so far that can compete with Lithium as a primary source of energy for cars that can be recharged with solar energy.

The big question is whether the world has enough Lithium to make

several millions of batteries to power our fleet of cars and buses? Where are the sources of Lithium and how much do we have?

Ford company believes that there is sufficient quantity available in several parts of the world enough to last up 90 years. The total requirement for a 90 -year period to power our cars and buses and other storage application is about 12 to 20 million tonnes and the global resources available amount to 39 million tonnes far in excess of our needs for another 100 years.

The major sources of Lithium are as given below: Bolivia 5.4 million tonnes Chilie 3.0 million tonnes US 0.45 million tonnes Afganistan,Ghanzi province has resources as big as Bolivia’s 5 million tonnes.

Recent studies have shown Woyoming in the US has about 2,28,000 tonnes and if extrapolated there could be as much as 18 million tonnes in the same formation.

Thus it can be safely assumed that

there is sufficient reserves to meet our needs including our transporting needs for a long time.

So what are the impediments in the large scale usage for developing countries like India? a) Tesla Model S costs around $35,000 which translates to around Rs 23 lakh. This is clearly out of common man’s grasp.However, these prices will come down over time. Government subsidies may help. b) Range Anxiety: A standard Lithium ion battery has an average range of 350 km per charge in a longish inter district run. You may reach the upper end of the range; aniexty grips us will we run out of power? Where is the next charging station? Such doubts will haunt us; this is called Range Anxiety.

So what to do now ? Big Question !

Phinergy-- an Israeli company has developed a Metal-Air technology that can end the Range Anxiety experienced in rechargeable Lithium ion batteries.

Phinergy’s Aluminium-Air battery has 50 aluminium plates, with each aluminium plate providing 32 km of driving that equals to about 1500 km of uninterrupted driving. One may have to fill up some pure drinking water every 150 km or so. So wherever you are you will reach the next supercharger station for a quick charge or reach your home at night for your easy recharge.

The big hurdle with Metal-Air technologies was the interference of CO2 causing failure.

Now Phinergy has solved this problem by using an electrode with a silver based catalyst which allows Oxygen to enter the cell and blocks CO2.Thus, pure Oxygen reacts with aluminium to release energy.

AL-Air is not rechargeable once the

energy is expended. The 25 kg of Aluminium converts to an oxide. For a recharge the plates need to be replaced or the battery is swapped with a new one at a marginal cost.

The spent aluminium residue can be easily recycled into new aluminium plates that go back into the batteries.

Phinergy’s AL – Air battery is to be seen as a range extender with the Lithium ion battery being the prime mover used in day to day running and charge at night or whenever. In a longer drive, the AL-Air battery recharges the Lithium battery automatically at next convenient recharge point.

Thus completely eliminates anxiety.

Phinergy has a collaboration with ALCOA of Canada and has tested this Hybrid extensively in their demo car.

Once this kind of hybrid car is on the roads, carbon emission problem in cars and buses will be down to nil; running cost may be reduced to a third and most of all, use of fossil fuels in passenger transport will be a thing of the past.

The Ministry of Transportation under Nithin Gadkari plans to convert about 1,50,000 public transport buses electric battery operated ones.

The imported battery costs around Rs 55 lakh but our ISRO scientists have made a similar battery for Rs 5 lakh which is one tenth the price of imported ones!!

It is also possible to possible to retrofit our petrol/diesel cars with Lithium batteries at a cost of around Rs 1,50,000 provided our government supplies these batteries at susidised rates.

All this is likely to play out in the 2017-2020 period. Good bye fossil fuels.

(The writer can be contacted at jsamuel120@gmail.com and 9995300152)

15 PROJECT OPPORTUNITY

November 30 - December 31, 2016

PASSLINE

LED digital advertising display boards

Prof Job K T LED Digital Advertisement Display Boards are designed for both indoor and outdoor purposes by using technologies such as photoelectric display technology, video technology, multimedia technology, network technology, computer technology and automatic control technology to display various information factors such as words, texts, images, drawing, animation, stock quotation as well as various multimedia information and TV & video signals. The display board is formed by LED parts and has such advantages as high definition, bright colour, wide visible angle, stable operation, long service life and low power consumption. Due to its unit modular construction, the size of the LED display panel can be flexibly controlled according to customers’ requirement.

In the future, the competition of the advertising market will be of customer value, brand value, customer management and professional quality. Recently domestically famous

advertising companies like Focus Media, Oriental Pearl, Tulip Media, Advision Media and Vastitude Media march into the outdoor advertising LED display market.

Some of the advantages of LED Digital Advertisement Display Boards are:  The video images of LED advertising signs can raise strong visual impact, which will attract the high volume foot traffic to watch.  LED advertising screen can adjust advertising pictures and change at any time according to customers’ need and support the latest and newest content.  The advertising pictures displayed by the advertising display screens can be displayed for many times every day, which can transmit different information to customers and further improve the audience rate of the advertisement.  The LED advertising screen is high-definition video display with huge picture, strong innervations and bright colours, which have very strong impact force.

Until the last decade, India didn’t see any serious deployment of digital signage system for advertising or other purposes. But the last five years saw a large number of companies investing on digital signage and related services and the growth graph has shown upward trend. It is estimated that this industry will seek revenue of about USD 3.20 billion by 2019 and a 25.8% growth is anticipated between the years 2016 to 2019. The report also says that the major growth in this sector can be attributed to 40 to 52 inch range LED display boards.

Off late, India has seen rapid urbanization and the boom in the IT sector has led to the rise in per-capita income of the people. This has direct effects when it comes to spending, both by the consumers and by the sellers. More connectivity to the Internet across the country has made

businesses to invest more on advertising online and offline. So, sellers have started to consider upgrading to the digital signage as their advertisement tool as a worthy investment. Buyers also find these advertisements to be more engaging and it makes them willing to spend more time exploring the product.

for encouraging the usage of LED streetlights for local civic bodies and municipalities for parks, roads, and parking areas.

Improving product life and increasing application capacity are few of the key strategies adopted by industry participants in order to provide product differentiation. The vendors

The future of Digital Signage in India is definitely on the stronger side.

Video walls, that inculcate digital signage, could be the next big thing in shopping and advertisement industry in India. So India is already gearing up for digital signage era.

The outdoor LED display market in India is estimated at over USD 1.6 billion in 2016. Increasing demand for better resolution and affordable solutions is expected to drive the industry over the forecast period.

The industry is characterized by rising trend towards interactive media.

The technology enables end-users to carry out uninterrupted advertising, thereby, growing deployment in real estate offices, car showrooms, retail outlets and shopping malls.

Key features such as environmental friendliness, durability, impact resistance and energy efficiency are expected to fuel outdoor LED display industry growth. Further, growing number of sports activities combined with increasing promotional activities of corporate brands have encouraged promoters to advertise their applications, which is projected to boost growth over the next seven years.

Varied government initiatives and stringent norms regarding emissions are anticipated to offer prominent growth opportunities by 2022. For instance, the Government of India has initiated varied pilot programmes

operating in the industry are offering end-to-end solutions to their customers from manufacturing to installation at the site along with after-sales services.

Commercial Advertising/Sponsorship Programme that will encompass a variety of digital and static options to include Railway Stations, Rental Car Centres (RAC), Commercial Centres, Bus Stations, Visitor Information Centres, Free Mobile Charge Stations, Video Malls etc.

This opportunity includes ex-terminal advertising and is comprised of but not limited to attended/unattended displays, brochure advertising in RAC and Railway Station, bus/transportation advertising, Rapid Transport Systems, platform advertising, digital baggage claim advertising and jet bridge advertising.

16

LED Digital Advertisement Display Boards offers the advertisers a new medium to reach potential customers. This new medium is not like the traditional advertising media. It is somewhat like television, in that the display is an electronic device; however, the viewers have no control over what is displayed or when, the only control is to choose not to watch. By placing these devices in high foot traffic areas, a large number of potential viewers will have the opportunity to see the advertising that is being displayed on the device. By placing an ad on one or many of these devices, an advertiser will be in a good position to share information with viewers about their product or service that they might be in the market for.

Exclusive in store “Digital Video Marketing” approach to Alterna-

tive Out-of-Home Video Advertising (AOOH), allows the host location to entertain and educate their customers at the “point-of decision‟; and other advertisers to reach customers who are already out in the marketplace spending Money.

Due to the changing nature and reduced effectiveness of traditional advertising, this venue is rapidly becoming the premier AOOH advertising method today. This is a fresh emerging market that many media experts predict will capture a rapidly growing share of the traditional advertising media that are increasingly losing their effectiveness. Alternative out-of-home advertising is one of the fastest-growing segments of the media industry, expanding at double-digit rates every year from 2016 to 2020 and posting compound annual growth of 25.8%.

The primary objective of the project is to place 25 digital signs in 15 pre-identified railway stations with high volume foot traffic. The secondary objective is to increase revenue growth by selling ad space to advertisers within each geographic venue. Each ad will contain a clear, specific call to action designed to drive customers from the host location directly to the local advertiser. It also has a community focus

PASSLINE

November 30 - December 31, 2016

like awareness on cancer, HIV, announcement of arrival and departure, weather announcements etc.

Committed salesmen will be assigned two specific venues and are responsible for filling and maintaining ads for each assigned site. The ideal goal is to have each advertiser place his ads in a minimum of 1 to 5 locations. The sales teams will work from the field making direct or face-to-face contacts. Most of the follow-up will be done online using a highly specialized web-video conferencing.

Skilled technical teams are required to install and maintain the hardware and software of Digital Display Boards. It has to have creative staff to create attention grabbing content and commercials. Exclusive agreements with Indian Railways, Government shopping complexes, Private Clubs, Golf Clubs and Retail organizations to install digital signage networks. These venues have a potential annual sales volume of Rs. 250.00 lakhs in revenue.

Indian Railways to encourage entrepreneurship among the educated youth is offering business opportunities to manage vehicle parking, food courts, toilets, waiting rooms, publicity boards in railway stations etc.

The space for installation of digital display boards at Railway Stations may be granted for a minimum period of five years. The coverage of Digital Display can be enlarged to bring all other important Railway Stations in the country.

The requirement of 25 digital signs in 15 pre-identified railway stations is discussed. Each Railway Station is a venue which can address the specific needs of the foot traffic.

The project can hire multi-talented graphic artists well versed in the use of all digital and film media formats.

These artists will create, develop and construct all ads commercial spots and short form infomercials.

Screen and media selection as well as all technical areas will be managed by the Project Manager and all unit installations are done by select professional installation contractors. SAMSUNG 40”, 52”, 75” or 85” LED screens can be used for digital display. The heart of the system will be a media player and software designed.

The implementation of 25 digital display boards at 15 locations will require the investment as indicated as above:

interest on loan, depreciation, repairs & (Rs.in lakhs/ ( Rs.in maintenance, insur each) lakhs)

ance, commission 1 Software Development LS 10.00 10.00 and administrative ex2 Screens of 54” SAMSUNG 50 6.50 325.00 penses. The budgeted 3 Stand 25 4.00 100.00 expenses for the first 4 License/Approvals 25 1.00 25.00 three years are shown 5 Office Interiors LS 5.00 5.00

TOTAL 465.00 below.

The Indian Railways The capital structure will constitute has taken a decision to bank borrowings and share capital. encourage entrepreneurship among A company can raise Rs. 350.00 the educated youth by offering the lakhs as investment funding from business opportunities to manage Banks and balance of Rs. 115.00 vehicle parking, food courts, toilets, lakhs mobilized as share capital. waiting rooms, publicity boards in The investment funding will be rerailway stations etc.

S. Description Unit No (Nos.)

Sl.No. 1 2 3 4 5 6 7 8 9 10 11 12 13

Cost

Particulars Rentals to cloud computing Salary Electricity charges Rent of the space Travelling expenses Interest on loan Depreciation Repairs & maintenance Insurance Commission@ 10% Administrative expenses Connectivity Charges Service Tax@ 14.50% TOTAL

Total

1st Year 1.50 36.00 16.00 37.50 12.00 35.00 42.50 8.50 4.25 36.00 6.00 4.50 52.20 291.95

(Rs. in lakhs) 2nd Year 3Rd year 1.60 1.65 38.00 40.00 16.80 17.60 37.50 37.50 12.60 13.25 35.00 30.00 41.00 39.00 8.50 8.50 4.25 4.25 37.80 40.00 6.30 6.60 4.75 5.00 54.80 57.55 298.90 298.93

The income, expenditure and profit for the initial years of operation is provided as shown below.

Sl.No. 1 2 3

Particulars Income Expenditure Profit

1st Year 360.00 291.95 68.05

paid in six years after an initial moratorium of one year.

Long term plans call for to either develop a franchise operation or expand adding at least one location in every quarter.

The major source of income is the revenue from the ads. It can offer time slots of 10 seconds, 20 seconds and 30 seconds for 25 inserts in a day for one week per display board. The normal charges is taken as Rs.10,000/- for 10 seconds for 25 insertion in a week. Thus, the total monthly revenue from 25 display boards is considered as Rs.30.00 lakhs or Rs.360.00 lakhs in a year.

The income subsequent years is projected at 5% over the previous year.

The major expenses will be rentals to cloud computing, salary to the employees, electricity charges, rent of the space, travelling expenses,

2nd Year 378.00 298.90 79.10

3rd year 400.00 298.93 101.07

Encouraged by the new policy of Indian Railways, a project opportunity to install 25 LED advertisement digital display boards at 15 locations in Railway Stations is developed. The proposal is found to be to technically feasible and financially viable. The project deserves the wholehearted support of Indian Railways for commercialization.

(Professor JOB K T is a retired Senior Faculty of Centre for Management Development, Thiruvananthapuram and approved consultant by various Departments. Presently he is the Director, Enterprise Development Service, Thiruvananthapuram, offering training, consultancy, asset valuation and Quality Management System services to small and medium enterprises. He can be contacted at Mob: 9847135571 or e. mail: jobkt012@gmail.com)

17 TRADE

November 30 - December 31, 2016

PASSLINE

Powertek: Adopting innovations in time A ccepting changes and adopting innovations are the key word for success in each and every venture.

Most of our entrepreneurs turn back for the changes in their respective businesses. They will justify it with several reasons.

Their activities become obsolete soon and the success will become elusive for them . There are few, who accept the changes and sail through troubled waters to embrace the shore with glittering success. Powetek lies in the second category.

Headquartered at Pathanapuram in Kollam district Powertek Enterprises, the manufacturers of Powertek brand machiney, has six branches in Kerala. The industry has begun its operation in 2013 and this ISO certified Company is mainly indulged in manufacturing food processing machines and construction machines for cement bricks, concrete mixer, interlock, paper plate and paper cup, chappathi making and all kinds of bakery for industrial purposes.

Harish Kumar, the Managing Director of the company, had started his career as a designer in an advertising agency in Dubai. “ To become an entrepreneur was my dream in Dubai days. Opportunities and options were immense but I was searching for an entrepreneurship opportunity that suit a builder from common man and it ended up in Powertek”, he clarifies.

Humble start Like many enterprises, the beginning was not a cakewalk for Powertek. It was full of challenges and hurdles .

The time was not conducive to start an industry at that time. We started it in a single room office; but in due course Powetek Enterprises and its products grew as most sought- after machine brand in India within a short span of time. “ 60% of the industrial machine market is held by the Powertek brand in Kerala right now. It was possible only through a lot of effort and research. We should make awareness among our customers about the products thoroughly. Powertek has already established its presence with six branches in the State and a manufacturing unit in Coimbatore.

We will inaugurate our new office in Irinjalakuda immediately, said Harish, who was over-

whelmed by his success. To garner customers satisfaction is a tough task in the machinery field, even then Powertek is marching ahead with its nearly 3000-customer base . Started operations only in Kollam and adjacent districts, Powertek has spread its wings to national level and to countries like the Middle East, Africa and the US. “ Powertek is a trouble- shooter for other entrepreneurs,” said Harish. “ We always support and assist the new entrepreneurs to face the

ing the challenges nonchalantly, fine team work and powerful service are our success mantra and our strategy is net work servicing by focussing the genuine customers. We always stand with the entrepreneur who wants to achieve success in their venture .

When we grow, people surrounding us also should grow, I always believe in it and I think that is the reason for all my success seen now. For sustaining long time success in the business, one should have patience and decency . Today, we give more

challenges and hindrances for the smooth running of the industry. We help them to procure licences, clearances from different government offices, loans from different financial institutions, subsidies and we also help them to import machines from abroad. I am aware about the importance of the small scale industries for the development of Kerala, and we were ready to accept the timely changes in the business; that is the reason why we could withhold the brand value of Powertek even in the most troubled period. Overcom-

priority for extending our net work in international level now”, added Harish Kumar. Saranya is Harish Kumar’s wife and the couple has a daughter Hridya.

Diversifications Powetek has tremendous diversification plans on the anvil. Candle manufacturing unit, electronic component factory are their immediate priority.

Harish Kumar is also venturing to a different field of entrepreneurship by commencing a matrimonial bureau based in Kollam in the very near future.

18 FINANCIAL PRODUCTS

November 30 - December 31, 2016

PASSLINE

SHADOW BANKING INCREASES THE RISK OF ANOTHER GLOBAL FINANCIAL CRISIS

T

he financial products offered by the shadow banking sector allow investors to be further removed from their investments and banks to escape regulation, increasing the risk in the sector overall.

By Necmi K Avkiran Banks may still be evading increased regulation by shifting activities to shadow banking. This system is well established as part of the financial sector, but it provides products that separate an investor from an investment, making it more difficult to evaluate risk and value.

This lack of transparency increases the risk in our financial system overall, making it vulnerable to the types of shocks that caused the 2008 global financial crisis. A current example is the socalled “bespoke tranche opportunity” offered by shadow banks. This is similar to the notorious collateralised debt obligations, packages made up of thousands of mortgage loans some of which were subprime, blamed for the global financial crisis.

Shadow banking comprises hedge funds, private equity funds, mutual funds, pension funds and endowments, insurance and finance companies providing financial intermediation without explicit public liquidity and credit guarantees from governments. Shadow banking is usually located in lightly regulated offshore financial centres.

In the period leading up to the global financial crisis, a large portion of financing of securitised assets that allowed regulated banks to exceed limitations on their risk-taking was handled by the

shadow banking sector.

To this day, shadow banking continues to make a significant contribution to financing the real economy. For example, according to the Financial Stability Board, in 2013 shadow banking assets represented 25% of total financial system assets. While the average annual growth in assets of banks (2011-2014) was 5.6%, shadow banking growth stood at 6.3%.

A comparison of countrybased share of shadow banking assets between 2010 and 2014 reveals the largest rise for China from 2% to 8%, while the USA maintains its dominance of the shadow banking markets with around 40%.

The failure of private sector guarantees to help shadow banking endure the global financial crisis can be traced to underestimated tail risks by credit rating agencies, risk managers and investors. Credit rating agencies lack of transparency, when it comes to explaining their methods (often disguised as “commercial-in-confidence”), continue to make it difficult for a third party to check assessments.

An excess supply of inexpensive credit also contributed to risk before the global financial crisis of 2008. This was because investors overestimated the value of private credit and liquidity enhancements.

One of the key challenges for regulators now is to devise rules and standards requiring shadow markets to hold enough liquidity to be sufficiently sensitive to risk.

However, where investors and financial intermediaries fail to identify new risks, it is less likely that the regulators – who have fewer resources – will succeed.

Raising capital require-

ments can limit the capacity of financial intermediaries to expand risky activities, although monitoring overall bank leverage may be better. This is because credit ratings cannot be relied upon in the presence of neglected risks. Similarly, monitoring rising exposure of regulated banks to shadow banking or untested financial innovations can also become part of the regulator’s arsenal.

But there remains a major problem that is unlikely to be resolved by any regulation. Regulation is meant to strike a fine balance between close supervision and allowing space for financial innovation because loss of diversity can create stronger channels of transmission and could expose financial systems to greater systemic risk.

Too little regulation encourages excessive risk taking, while too tight a regulation is bound to strangle the financial sector that

provides the lifeline for the economy. Striking such a fine balance is next to impossible in a dynamic, global financial sector.

The Basel Accords, set up to strengthen regulation after the financial crisis, will continue to play a key role in helping manage systemic risk like this. For example regulations can collect data that would be useful in macro prudential regulation, taking action to reduce various risks and remaining alert to unfolding trends on the ground.

Regulators need to heed the trends in shadow banking as part of this, to ensure transparency. However the nature of this sector, the long chains and multiple counterparties with unclear financial obligations, will continue to make the job of the regulator very difficult. – Third

World Network Features.

( Necmi K Avkiran is Associate Professor in Banking and Finance, The University of Queensland).

19 IMPACT

November 30 - December 31, 2016

PASSLINE

Trump presidency

2 days that

events literally shook our world.

The victory of Donald Trump over the favourite Hillary Clinton shook the financial markets, but only for a while.

The transition from candidate Trump to president–elect Trump was quick.

Trump succeeded in sending out the message that much of what he said during the election was campaign rhetoric. Market got the message that he will not upset the apple cart.

Global markets stabilized and sanity returned to currency and stock markets.

Trump the maverick Dr V K Vijayakumar

T

ransformational events are very rare. Two transformational events happening simultaneously, unleashing profound consequences is exceptionally rare indeed!

But that was what happened on November 8 and 9: the demonetization of 500 and 1000 rupee currency notes in India and the victory of maverick politician Donald Trump in the US presidential elections. These two

Normally, Republicans are pro-business and pro-free trade. Therefore, markets like Republican presidency.

But Donald Trump is a maverick whose economic views are far removed from the US mainstream.

For instance, Trump has declared that he will impose 35 % tax on Chinese imports and repeal the NAFTA (North American Free Trade Agreement). Mainstream economic thinking in the US is pro-free trade.

Therefore, Trump’s protectionist stance has invited strong criticism from economists, including many Nobel laureates. This can have very

bad consequences, if implemented. Trump’s priority is “America First”. This means he will clamp down on out-sourcing, which is a major job creator for India.

Trump has promised to spend $ 600 billion on infrastructure. At the same time, he has promised tax cuts too.

Corporate tax cut from 35 % to 15 % will have huge implications. The total tax cut proposal amounts to a staggering $4.4 trillion over a 10-year period. This, along with spending on infrastructure, is expected to raise the US debt burden by $ 6.6 trillion. The market perception is that Trump’s Keynesian policies will be inflationary and therefore, the Fed is likely to start raising interest rates steadily from December this year. Consequently, the dollar has strengthened pushing bond yields up in the US. This is not good news for emerging markets. Emerging market currencies have depreciated. However, INR continues to be stable.

The real impact of the Trump presidency will be felt only when he implements his policies. If Trump implements all that he promised, that will be hugely disruptive for global markets.

The demonetization bomb

On November 8, through a broadcast to the nation by the prime minister, the Government of India demonetized 500 and 1000 rupee notes. These notes ceased to be legal tender from November 9. The announcement, which came like a bolt from the blue, created ripples in the nation. Citizens have been given time till December 30 to deposit the banned notes into their accounts.

Also, many essential services like

hospitals, petrol bunks, railway stations etc. were allowed to accept the banned notes for a specific time period.

The 1978 parallel This is not the first demonetization in independent India. In January 1978 the Morarji Desai government had demonetized 1000, 5000 and 10000 rupee notes in an attack on black money. But in 1978, such high denomination notes were very scarce and were rarely used in dayto-day transactions. In modern India, 500 and 1000 rupee notes are ubiquitous and widely used in transactions. Therefore, the impact is likely to be huge.

Why demonetization?

Broadly, demonetization has three objectives: 1.

Elimination of fake notes.

Fake notes printed in neighboring countries, were allegedly used in terror financing.

2.

Attacking black money and thereby destroying the parallel economy.

3.

Expediting the transition to cash-less economy.

Of the three objectives, attacking black money is the most important.

Demonetization removes all the fake notes completely. Transition to cashless transactions will certainly gather momentum, but it will take a long time in a country like India.

How demonetization will play out?

Presently, in India, the currency in circulation is around 16 lakh crore rupees. Of this, around 86 % (in value terms) is currency notes of 500 and 1000 denominations. This means around 14 lakhs of rupees are circulating as 500 and 1000 rupee notes.

A major part of this will come back into the banking system when people deposit their accounted money with banks. Also, some black money will get laundered and come back into the system. But, a part of the black money will remain unearthed and this will never return to the financial system. The success of the

20

November 30 - December 31, 2016

PASSLINE

and demonetization

shook our World scheme will depend upon this part of the money that will be extinguished.

Suppose more than 20 % of the 14 lakh crores do not come back into the banking system.If so, to that extend of Rs 2.8 lakh crores, the RBI’s liability gets reduced. The RBI can print fresh notes for this amount.

There is no consensus on how this money will be used by the RBI. Some experts feel that the RBI can give a special dividend to the government.

If so, this becomes the revenue of the government and the government can use this money for any purpose which the government deems fit.

The impact

The immediate impact of demonetization has been total disruption of transaction. Trade almost came to a halt. Severe shortage of 100 rupee and smaller denomination notes made life difficult for ordinary people. People had to wait for hours together to withdraw their hard earned money. Those who had withdrawn money for meeting expenses relating to marriages etc. faced huge hardships and crisis.

Short-term pain; long-term gain

There is no doubt that there will be huge long-term benefits from demonetization. If demonetization is followed up with an attack on benami property, it will go a long way in attacking the parallel economy in India. The formalization of the economy will boost economic growth.

Real estate to suffer the most

The most impacted sector will be the real estate sector. It is widely known that a part of the value of real estate transactions is done in cash. This unreported cash transaction becomes black money and escapes the tax net. This practice will stop. The immediate impact of this will be decline in land and apartment prices. New project launches will remain frozen for some time. But the long-term impact of demonetization is likely to be very good for the retail sector.

The sector will slowly move towards

transparency, accountability and maturity.

Gold too will lose some glitter

It is no secret that a part of black money is stored as gold. Demand for gold to conceal black money will decline. Government is also likely to target hoarding of black money in gold. However, demonetization will not impact gold prices since gold prices are determined globally.

The capital market will benefit The capital market is a segment where all transactions – whether buying stocks or investing in mutual funds – are done transparently. There are no cash transactions at all. Therefore, it is quite possible that a part of the money, which was formerly going into real estate and gold, may come into the capital market. This will be a healthy development.

Interest rates will go down Inflation is likely to trend lower due to deficiency of demand. This, along with the bumper harvest made possible by the good monsoon, will lead to steady decline in prices. Down trending of inflation will enable the RBI to cut rates further. Already the 10-year bond yields have declined to around 6.7 %. Further cut in interest rates will provide a massive monetary stimulus to the economy.

Short-term negative impact on GDP growth The short-term impact on GDP growth will be negative. The third and fourth quarter GDP growth rates are likely to be lower than estimates.

The second half of the year 2016-17 is likely to report GDP growth rate of

less than 7 %. But 2017-18 is likely to witness a recovery in growth. As the country moves away from unaccounted transactions towards formalization, GDP growth rate will gather momentum.

Demonetization alone is not good enough to stop corruption It will be too naïve to assume that demonetization will end corruption in India. Demonetization does not do anything to prevent the future generation of black money. So long as officials demand and get bribes and politicians accept cash from businessmen and do favors for ‘services rendered’, corruption will continue.

The root of rampant corruption in India is the opaque political funding.

Most political parties accept cash from businessmen and this money is not accounted. When shady businessmen fund political parties, the political parties return the favour by giving undue favours when they come to power. This should stop.

Cleansing the system will be possible only if this basic fact is recognized and acted upon.

Less government, more governance The government should take its motto “less government, more governance” forward. The least corrupt countries are those that have minimum government and least rules and regulations.

The psychological impact of demonetization has been huge. The bribe takers, the corrupt and the blackmonied are today extremely fearful of the long arm of the law. The government should take this forward and strictly punish the peddlers of black money. A significant attack on benami property is the next logical step.

If the perpetrators of corruption and black money are brought to book, that will be a significant initiative.

Demonetization should become the first step in the war against corruption and black money. The government may lose many battles but the nation should win this war against black money.

(Dr V K Vijayakumar, Chief Investment Strategist, Geojit BNP Paribas)

21 ISSUES

November 30 - December 31, 2016

PASSLINE

How the demonetisation of higher denomination notes affect the common man

Passline News Service

C

ancelling the legal tender of Rs 500 and Rs 1000 notes by the Prime Minister has been calling as historic move. It may be true or false but the impact with this move for the economy and the common people is the first and prime point for the deliberation at this time.

Because 80% of the people in the economy are poor and middle class, who should not be blamed for the unaccounted money or the counterfeit notes, for which the Prime Minister says as a reason for his drastic move . Anyway, let us analyse current and long time scenario of the economy and the common man after the demonetization of the high value notes.

First, people who have a lot of cash, legally earned, will deposit it in the bank. This will increase bank’s deposits by a huge extent. This will also increase the lending activity because banks automatically will adhere to higher CRR (cash reserve ratio) to maintain with more deposits and eventually they can do more lending.

Credit (loans) will become easier and interest rates may come down. More loans given out increases broad money supply and creates inflation.

But this will happen slowly, not over-

night. What will happen overnight is deflation in the country. Because people who have illegally earned this money may be afraid to deposit it in a bank. There are people with crores of cash in black, earned through illegal ways, such as corruption, smuggling etc. Some of these guys will try to find this money into a bank, but they have to declare it as income and pay taxes on it. Then the question arises - how did they make this income in the first place. Most of these guys will chicken out, count their blessings and just waste the money they have stashed somewhere in Rs.500 and Rs.1000 notes.

This will reduce the total currency circulation in the economy - leading to deflation. Deflation increases the value of money that we have because the total money supply goes down but the commodities and things available in the market have not gone down. For example, if there are 100 oranges and 100 coins, each orange value would be Rs 1. If there are 100 oranges and only 50 coins, each orange would cost Rs.0.50 only. Which means with each coin, you can buy 2 oranges.

The inflation and deflation will balance out each other on some level.

But it is going to take some time for the inflation to happen because lending activities do not happen overnight. Deflation will happen first,

for the next 6 months to 1 year. Gold prices will drop, stocks & commodities will drop. Everyone will get excited and congratulate the government for making this move. Then slowly, as lending activity goes up, the broad money supply will go up and prices of all things would go up, slowly and steadily.

Now, no one can predict the extent of the deflation and inflation. In an ideal world, if 100% of the people who have Rs 500 and Rs 1000 notes have it as white money, then we would see only inflation. If a lot of these are black money and if many people decide to waste the money instead of depositing it, then we will have deflation in the short term.

If you see heavy deflation and heavy drop in prices, then it means that India has a lot of corrupt people who earned money in illegal ways, too afraid to deposit the money in a bank! As per the government’s anticipation thousands of crores of illegal money has been horded , if that is the case, we would see heavy deflation in the next 6 months conducive for buying gold, stocks of assetheavy companies.

What about Real estate?

Real estate is the major area where ill – gotten money being used abundantly. As our Prime Minister says, if the black money being sucked out of the system due to demonetisation

of higher denomination notes, the real estate would crash slowly and recover quickly. That’s because, in real estate, there is no index price like gold and it is fixed by the market in a demand-supply balance.

Let’s say I have a real estate plot of a 5 cents, which I bought for Rs 40 lakh a year back. Let’s say, market value of it until yesterday was Rs 65 lakh. I would still think that the value of it would be Rs 65 lakh and I wouldn’t sell it for less than that.

But if I want to sell it because I need money, I wouldn’t get a buyer immediately. Because most buyers in real estate are doing the transactions in black money. Potential buyers would tell me that they don’t have Rs 65 lakh in white money, so they will not be able to buy it.

With less potential buyers in the market and fewer people having white money, the demand for the land goes down and drives down its price. If I yield and sell it for Rs 50 lakh , I am driving down the market price in the entire locality.

Real estate crash will happen slowly because people will yield to the pressure slowly and start selling at lower prices because suddenly the pool of potential buyers have gone down. I predict that real estate prices would dip to lowest by end of 2017 and then start moving up again as inflation catches up.

22

November 30 - December 31, 2016

PASSLINE

MARKET DYNAMICS VERSUS HUMAN RIGHTS

23

November 30 - December 31, 2016

PASSLINE

Niche market: fair trade Consumers’ purchasing choices have an impact on how goods are produced. Many clothes that are certified as “fair” hardly cost more than those of major fashion brands however.

Not all certification systems actually refer to the clothes being produced in fair conditions. For example, the Fair Wear Foundation obliges companies to improve the conditions in their production lines, but to find out whether the companies have made any progress in that respect, consumers must check the Fair Wear Foundation’s website. On the upside, the Foundation publishes annual

reports on companies’ compliance and makes them available to the global public.

The well-known Fair Trade label, on the other hand, only indicates that the cotton has been produced in an ethically acceptable setting.

It does not say anything about processing and garment production.

The cotton producers are guaranteed a minimum price, which improves labour conditions and standards of living for small farmers and workers on cotton plantations. The Clean Clothes Campaign therefore appreciates the label as an indication of “fair working conditions in the process of cotton harvesting”.

Items with some kind of fairness label are mostly produced in better conditions than those marketed by large retail chains. However, only a small fraction of consumers buy fair goods. One reason is that they do not know about the troubles in the supply chain. A second reason is that fair brands normally cannot rely on the kind of fancy shop infrastructure that consumers enjoy in the outlets that sell the major fashion brands. So long as fair trade stays a niche market, however, it cannot drive the comprehensive improvement of working conditions in the garment industry. ( Nico Beckert is a freelance writer)

24 FEATURE

November 30 - December 31, 2016

PASSLINE

North Malabar thriving with resources to be tapped T

he North Malabar Chamber of Commerce, since its establishment in 1952, has been in the forefront in all projects relating to the promotion and protection of trade, commerce and manufacturing sectors, especially in the North Malabar region consisting of the Kannur , Kasargod and Wayanad districts.

Sensing that the region is poised for a significant economic surge with Kannur being declared a Municipal Corporation and the Kannur International Airport and Azhikkal Port becoming operational shortly, the Chamber decided to initiate steps to ensure that an ambitious strategic framework is set up in the area.

As a first step to setting up a sustainable and transformational environment to promote all-round growth in the region, the Chamber had organized a Business Investment Meet titled “Invest in North Malabar” at Kochi Marriott Hotel in August 2016.

The Meet was inaugurated by Chief Minister Pinarayi Vijayan served as a podium to understand and explore business opportunities in the district and attract domestic and foreign investments through parleys among the business leaders, investors, corporations and policy makers who attended the meet. The focus areas for investment are Health, Tourism, Education, Agriculture, Food Processing & Technology.

The forum has the support of the Kerala Government, the District Administration and other Government agencies like the District Industries

Centre(DIC) Kannur, KSIDC, NABARD, KIAL, Tourism Department, KBip, RIAB and the Axis and Federal Banks.

“Development of Kerala would not be confined to the urban areas only but be stretched to the rural population also is the growth vision of Kerala,” said Chief Minister Pinarayi Vijayan. ``This growth focus will give impetus to multinationals to invest in Kerala’’, he added. Progress of a country fully relies on industry. Simple formalities will be formulated for entrepreneurs to start their ventures. Development by protecting the environment is the policy of the government. People should recognize the antics of impeding growth by spreading canards on the alibi of environment protection.

The government has the strategy of welcoming the big and small entrepreneurs alike. Every industry started in Kerala running successfully is the prestige issue of each Malayali.

For the economic development of the state industrial growth is inevitable.

Investment savvy and employment oriented ventures will get government aid. Priority is for maintaining industry- friendly situation in the state. In due course, a commerceindustry linked belt including North Malabar will be created in the state.

Considering industrial growth of South Kerala, North Malabar has to go still far. Although North Malabar is in front in case of education and cultural progress, the region is sadly lagging in prime industrial investment.

Kannur Airport(KIAL), Azhikkal Port like projects signify that the dream projects of North Malabar are going ahead at a fast pace. Muzhippilangad-Kannur Marine Drive, Thalayi Harbour, Thiruvananthapuram-Kannnur fast track rail corridor, Thalassery-Mysore rail line like projects are in the pipe line. This state opens the avenues for infinite possibilities of growth for North Malabar. North Malabar has the potential to be developed as a global level tourism destination. Muzhippilangadi Drive in Beach is one of the five drive in beaches chosen by BBC. Paithal Mala, Palakkayam Thatt, Kanjirakolly, Palchuram, Ranipuram, Aralam Wildlife Sanctuary, Ezhimala like projects, with better climate than Ootty, are awaiting development. Medical centres with global level health care amenities should be launched in N Malabar. Allopathy-aurveda combined health centres would be started by the government. Tourism centres must change as hygienic centres.

The government would mull to start Industrial level dairy park, hatcheries, food processing units, cold storages, food incubation centres, meat processing units, bio fertilizer units.

Payyannur, Mattannur, Cheemeni like places are earmarked by the government for setting up cyber parks.

The government would contemplate programmes to double the influx rate of foreign tourists to Kerala and one fourth rise in domestic tourists. This way, four lakh would get employment, the Chief Minister said.

25 PERSONALITY

November 30 - December 31, 2016

PASSLINE

Patanjali Balakrishna metamorphosis of a sadhu to Forbes’ one richest

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oga guru Ramdev’s close aide Acharya Balkrishna has come a long way since 1995 when he and his mentor approached authorities to get Patanjali registered as an organisation. The two men had Rs 3,500 in their pockets while the officials demanded a fee of Rs 13, 000.

The duo borrowed Rs 5,000 each from two friends to fill the gap. Twenty-one years later, Balkrishna has stormed into India’s richest 100 club with a $2.5 billion net worth based on his 97% stake in the fast-growing Patanjali Ayurved Ltd, while e-tailer Flipkart’s co-founders Sachin Bansal and Binny Bansal lost out.

Balkrishna, made his debut on the annual Forbes list of India’s 100 richest people at the 48th position. The Bansals who were ranked 86th last year with a net worth of $1.3 billion have missed the boat this year with a dip in their company’s valuation.

Balkrishna is among six newcomers on the list that was topped for the ninth consecutive year by Reliance Industries chairman Mukesh Amba-

ni. When media asked Balkrishna about his latest status, he humbled to say “I don’t know about start-ups…

I don’t know what this list means. I only know one thing that even with an unlisted company like ours, we have achieved a spot in global rankings like the one issued by this business magazine. I dedicate it to the 20 crore consumers of Patanjali products.

Unlike modern technology driven companies, Patanjali is a new entrant in businesses with contrasting styles of functioning providing a purely trading platform. Patanjali draws on traditional Indian knowledge to produce goods for the market. “Whatever we have achieved is without making any compromise with a two- pronged strategy to give the right price to farmers and sell the goods at an affordable price to consumers,” Balkrishna said. According to Forbes the combined net worth of India’s 100 wealthiest is $381 billion (nearly Rs 25.5 lakh crore), a rise of 10% from $345 billion in 2015. Pa-

tanjali has grown into a company with annual turnover over Rs 5,000 crore and is targeting a Rs 10,000-crore turnover for next year.

Balkrishna points out that “now Patanjali is a talking point at malls and showrooms in big cities as well as in kirana shops in small towns.

Such is the demand of Patanjali, he says, “that we are not able to provide enough supply…we have to increase our production levels this year.” But will there be a change in his lifestyle to complement his new-found fortune? “No way,” says Balkrishna. “I have been a yogi and a sadhu, who wears a pair of slippers and mostly travels by road… I will continue living that way.” So what next after feeding Indians? “We will feed the cows,” he says. At a time when gau-rakshaks are grabbing headlines, is Patanjali

walking a path to prove a political point? “No,” says Balkrishna. “We are working to improve the breeding of Indian cows to tap the dairy potential and for that we are now getting into cattle feed production in a big way.’’

India’s potential in dairy is huge and such is the demand that it easily outstrips the supply, Balkrishna added , indicating that his company is ready to take on global dairy giants planning to enter the market.

Despite being a 97% shareholder in Patanjali and worth Rs 25,000 crore, he gives all the credit to Ramdev. “It is all his vision,’’ he said. “I am only the executing officer.” Though Ramdev holds no shares in the company, he is its de facto brand ambassador, while Balkrishna runs operations.

26 BRAND MARKETING

November 30 - December 31, 2016

PASSLINE

BLUE OCEAN STRATEGY

Creating your own market be eliminated?

Reduce: Which factors should be reduced well below the industry’s standard?

Create: Which factors should be created that the industry has never offered?

This exercise forces companies to scrutinize every factor of competition, helping leaders discover the range of assumptions they unconsciously make while competing. This

exercise also pushes leaders to simultaneously pursue differentiation and low cost in order to break the value-cost trade-off.

Here’s the essence of blue ocean strategy captured in four key points.

1 It pursues differentiation and low cost Blue ocean strategy is based on the simultaneous pursuit of differentiation and low cost. Conventional wisdom holds that companies can

By Roshan Kynadi

W

hat if your business could be in a league of its own?

Instead of competing with others in your industry, what if you were setting the pace, creating unique products and profiting from lucrative new markets? Generating that kind of environment is the goal of blue ocean strategy, a business theory that suggests companies are better off searching for ways to gain “uncontested market space” than engaging in traditional competition.

The term is derived from the book “Blue Ocean Strategy”, by W Chan Kim and Renee Mauborgne. It describes how companies traditionally work in “red ocean” conditions, where businesses viciously fight against each other for a share of the market place. Instead, according to the blue ocean strategy, organizations should find a way to work in a market place that is free of competitors.

The concept of Blue Ocean Strategy

Red oceans represent all the industries in existence today – the known market space. In the red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of product or service demand. As the mar-

ket space gets crowded, prospects for profits and growth are reduced.

Products become commodities or niche, and cut-throat competition turns the ocean bloody; hence, the term “red oceans”.

Blue oceans, in contrast, denote all the industries not in existence today – the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid. In blue oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue Ocean is an analogy to describe the wider, deeper potential of market space that is not yet explored.

How can entrepreneurs find blue oceans?

To discover an elusive blue ocean, entrepreneurs should consider the “Four Actions Framework.” This is used to reconstruct buyer value elements in crafting a new value curve.

To break the trade-off between differentiation and low cost, and to create a new value curve, the framework poses four key questions: Raise: What factors should be raised well above the industry’s standard?

Eliminate: Which factors that the industry has long competed on should

R

Multifaceted personality

oshan Kynadi is an agripreneur (Kynadi Plantations). Roshan is the former President of CALICUT MANAGEMENT ASSOCIATION (CMA) (2011-2012). CMA is affiliated to All India Management Association, New Delhi. He is a motivational speaker, HR trainer and also a regular columnist, in various business magazines.

As President of CMA, he organized a ‘Leadership Workshop for Ministers of Kerala in association with IIM Kozhikode’ on August 18, 2011. All the ministers of Kerala under the Oommen Chandy Ministry attended this program. First time in the history of this country all the ministers of a state attended a leadership workshop.

Also has organised a series of talk ‘My Life, My Message’ by some very successful and renowned personalities like Shashi Tharoor, Kris Gopalakrishnan, P N C Menon, E Sreedharan, Kochouseph Chittilapilly, Prof P C Thomas etc and uploaded these talks in YouTube. These talks have excellent viewership even now. The purpose of this programme was to communicate to the young people of our state that they can also succeed in life.

In July 2014 presented to Kerala Chief Minister Oommen Chandy a new road development model for Kerala called `SKYWAY’, a model by which land acquisition will not be opposed or resisted by land owners. The Chief Minister wanted the project to be presented in the Cabinet of Ministers. Accordingly the Project was presented by Roshan Kynadi in the Cabinet on October 8, 2015. The Government of Kerala is currently studying the feasibility of this Project – ‘SKYWAY’. ((Roshan Kynadi can be contacted over Mobile: 98950 94940.

Email: roshan.kynadi@gmail.com)

27

either create greater value for customers at a higher cost or create reasonable value at a lower cost.

Here strategy is seen as making a choice between differentiation and low cost. In contrast, blue ocean strategy seeks to break the valuecost trade-off by eliminating and reducing factors an industry competes on and raising and creating factors the industry has never offered.

2 It creates uncontested market space Blue ocean strategy doesn’t aim to out-perform the competition. It aims to make the competition irrelevant by reconstructing industry boundaries. Whereas conventional strategic approaches drive companies to define their industry similarly and focus on being the best within it, blue ocean strategy prompts them to break out of the accepted boundaries that define how they compete. Instead of looking within these boundaries, managers need to look systematically across them to create blue oceans – new and uncontested market space of new demand and high profitable growth.

3 It maximises opportunity while minimising risk Blue ocean strategy is an opportunity-maximising, riskminimising strategy. Of course any strategy will always involve risks – be it red or blue. However, blue ocean strategy provides a robust mechanism to mitigate risks and increase the odds of success.

4 It shows you how to create a win-win outcome With its integrated approach, blue ocean strategy shows how to align the three strategy propositions - value, profit, and people - to ensure your organisation is aligned around your new strategy and that it creates a win for buyers, the company, and for employees and stakeholders. For any strategy to be successful and sustainable an organisation must develop an offering that attracts buyers; it must create a business model that enables the company to make a tidy profit; and it must motivate the people working for or with the company to execute the strategy. The alignment of the three propositions proposed by blue ocean strategy ensures that an organisation is taking a holistic approach to creating a winning strategy that will benefit buyers, the company, as well as

November 30 - December 31, 2016

internal and external stakeholders.

Examples of successful execution of Blue Ocean Strategy Apple is a good example of successful execution of Blue Ocean Strategy. Apple created future profits and growth not by exploiting existing demand, but by reconstructing industry boundaries to create new market space and unlock latent demand. iMac, iPod, iPhone and iPad are

products which helped Apple create new market space. As a result, the company’s value grew exponentially.

Customers buy handloom only when there is rebate / discount. Adopt Blue Ocean Strategy, give it a little colour, give it a little style and rebrand it as Fab India, what happens.

It becomes a successful brand and a business model.

Starbucks and Café Coffee Day are

PASSLINE

good examples of what Blue Ocean Strategy can do to the unassuming coffee.

All of us face competition in our Business / Industry. Blue Ocean Strategy can help us find a way to create a market place that is free of competitors with ample opportunity for growth that is both profitable and rapid.

28 AUTOMOBILES

November 30 - December 31, 2016

PASSLINE

Volvo, Mazda & Nissan new variants to hit Indian roads to hover well north of the INR 1 crore mark.

New Mazda6 The refreshed 2017 Mazda6 launched locally and Mazda has revealed a raft of key technology and interior tweaks to keep it fresh.

Mazda done key updates to the new Mazda6, which include the introduction of the brand’s G-vectoring Control technology which is designed to make tiny, constant

XC90 SUV

S

oon, India will become one of the select few automotive markets around the globe where Swedish manufacturer Volvo will sell their elite Excellence variant of the XC90 SUV. This range-topping SUV will be sold only as a 4-seater, for added exclusivity! It will, of course, only be imported by Volvo against confirmed orders.

The Excellence trim level will be available only on the top end T8 petrol hybrid version of the XC90 that will go on sale in India soon. Although the top end variant of the standard XC90 itself is quite luxurious, the Excellence trim takes the game further by leaps and bounds. Unlike the regular XC90 which has a bench seat in the middle, the Excellence trim gets two plush bucket seats and no seats behind that (as it seats only 4 occupants).

It will give you a proper business class experience while sitting at the rear of one of these SUVs. You get miles of legroom, tray tables that fold outwards and the central tunnel in between holds two crystal glasses handcrafted by Orrefors Glassworks.

There is also, obviously, a fridge built into the rear seat that can hold two 750ml bottles of whatever insanely expensive champagne that you prefer.

The rear seat also gets a device that Volvo calls an excellence console.

This touch screen gadget gives the rear seat occupants control over features such as seat heating and ventilation, the beverage cooler, seat angles and the massage function. The seats themselves are upholstered in super premium perforated Nappa leather.

Separating the rear seats from the cargo bay is a clear glass partition that helps keep the passenger cabin quieter and more insulated. It also helps keep the wind out when the tailgate is open. Instead of the regular, usually more expensive option of having a dedicated rear seat entertainment system, Volvo has ingeniously used two iPads mounted behind the front seats. These tablets are wired directly to the electrical system of the car to keep them powered at all times.

Other features in this class leading SUV include a subtle ambient interior illumination system, a panoramic sunroof, 4 zone automatic climate control, specially made key fobs, a top of the line sound system by Bowers & Wilkins, raised footrests for the rear passengers and a mesmerizingly beautiful crystal gear selector lever fashioned by Orrefors, amongst others.

Being a Volvo, the XC90 Excellence is provided with the Volvo Sensus infotainment system. This system replaces most of the buttons, switches and knobs in the centre console with a large touch controlled tablet display, giving the dashboard a cleaner and more organised appearance. This SUV also gets a whole host of safety features such as surround view cameras, autonomous parking, adaptive headlights, multiple airbags, traction control and much more.

This vehicle will be powered by a 2.0 litre, 4 cylinder petrol engine and an electric motor that develop a combined power output of 400 bhp. The engines are hooked up to an 8 speed automatic transmission. Volvo will officially launch this SUV in India on the 14th of this month and expect prices

adjustments on the steering and the torque load on the wheels to improve things like grip on turn-in and stability.

The engines are unchanged

Although the diesel engine has been tweaked to be quieter than before, via Mazda’s Natural Sound Smoother Technology (NSS). The complement the quieter engine, new sound deadening materials have been used with Mazda saying there’s now less wind noise. For critics of Mazda’s NVH in the past this sounds like good news indeed.

There are some new colours for the Mazda6 and there’s a heads-up display, reversing camera and Mazda’s safety suite which includes automatic emergency braking.

In Europe, pricing remains unchanged for the refreshed Mazda6,

but Mazda Australia hasn’t said yet whether it will follow suit in India too .

New Micra CVT

To stay ahead of competition in the festive season, Nissan has introduced the new Micra CVT at Rs 5.99 lakh. The new automatic Micra variant is available in a new shade of sunshine orange along with existing shades of brick red, turquoise blue, blade silver, onyx black, nightshade and storm white. Additionally, the new version also gets an all-black sporty interior.

Mechanically there are no upgrades on the new Nissan Micra CVT and it continues to be powered by the existing 1.2-litre petrol engine that generates 76bhp of power. The company claims that the CVT variant returns better fuel efficiency figures than the regular manual transmission.

The new model does not get any major upgrades except for the addition of a new exterior colour option and new European-styled black interior which includes a black central console with piano black finish, black door trims, and black seat fabric with blue stitching. The Active variants feature a black instrument panel cluster and finisher, black seat fabric and a silver-colour door arm rest finisher.

Now, with fresh changes and the availability of an automatic option in this segment, Nissan Micra is expected to generate more customer response in the coming days.

The company also anticipates that the new colour option will be well received in the Indian market during the festive season.

29 FARMING SECTOR

November 30 - December 31, 2016

PASSLINE

Agriculture development

Kerala needs crop-based coops from the mid seventies has been a source of worry: The decline was noticeably sharp in more recent years and this sharp decline has led to a serious debate around the food security for Kerala, even though the very concept of food security for individual States or region in our national economy and federal system of government is a debatable issue.

Nevertheless, there are the other more basic issues related to the productivity of Kerala agriculture that need to be discussed threadbare in the current context.

K Vijayachandran

I

t is a common belief that land reforms have fragmented agricultural holdings, adversely affecting farm economy. There is logic in this argument. However, the big economic benefits accrued from the abolishing absentee landlordism could hardly be overlooked: Farmers of Kerala, today, respond to the opportunities in national and international markets by switching crops with very little inhibition.

As Kerala peasantry moved away from sustenance agriculture and took to capitalist farming in a big way, Rupee incomes or value addition per unit area of farm land, as well as per person engaged in agriculture, had registered a sharp increases: These are, now, three or four times the all India averages. These comparatively high cash incomes have contributed in a big way to the all round better quality of life in Kerala. summarizes the recent trends in cropping pattern in Kerala as reported in the Economic Review of State Planning Board: Decline in the cropped areas for rice and tapioca

1. Productivity has been stagnating for almost all major crops; rubber was, possibly, the only exemption: Though a plantation crop, rubber cultivation is dominated by small holdings. Rubber Board could act as a technology generator and help the farmers to modernize cultivation and production practices in the small farms, with the help of farmer cooperatives. True, much more could be done by broadening the areas of cooperation including the utilization of rubber wood. But rubber revolution of Kerala is a model to be studied indepth, for adaptation even in other major crops. Despite this impressive success story, faulty understanding on cooperation and cooperative farming stand in the way of policy initiatives towards cooperative farming.

KERALA AGRICULTURE Area, Production and Productivity of Principal Crops Technology improvement and modernization programs are crop specific and demand considerable investments and risk taking. That is why, contract farming is offered by MNCs as part of their globalization agenda.

Only large farms in private or public sector, could afford such risk taking and investment mobilization. When that is ruled out, crop-based cooperative enterprises of farmers are the only way to modernize Indian agriculture: Primary cooperatives of farmers at the grass root level could organize cultivation using the technology inputs and marketing assistance provided through apex cooperatives at the block, district or state levels.

II. Kerala, like all other Indian States, has built up an enormous institutional resource base that is competent to redesign and rehabilitate its agricultural sector. There is a fairly welldeveloped agriculture department headed by an Agriculture Production Commissioner, and then there are directors and assistant directors at the state level, in charge of different programs and projects, including those funded by Central Government. There are the district level offices, block offices and panchayat level krishibhavans, now reporting to local self government institutions (LSGI). There are departmental marketing outlets, testing facilities for soil, seeds, pesticides and fertilizers all over the state (see www.kerlaagriculture.gov.in for a detailed listing).

Sl. No.

Crops

Area (Ha.)

Kerala Agricultural University has under it nine teaching institutions and some forty field institutions and research stations supporting agriculture development programs with facilities and specialist manpower. Agricultural cooperative societies and banks, together with the NABARD, the State Warehousing Corporation and a substantive irrigation department are dedicated to agriculture development in the state. Effective use of these large institutional resources, if properly utilized, could do wonders for its agriculture sector.

Agriculture in Kerala continues to be primitive: Labour as well as land productivities are extremely low, compared to global standards: Yield of rice or wheat per hectare is only half of that of China despite better sunshine, and Chinese farmers enjoy far better standard of living.

With the withdrawal of direct subsidies on fertilizer, electricity, irrigation etc thanks to the economic reforms, growth of agricultural production has slowed down in recent years and per capita food production has been declining. Farmers are in distress and suicide statistics are appalling.

However, the agencies that formulate and implement official developProduction (MT)

Productivity (Kg./Ha.)

2013-14 2014-15 2013-14 2014-15 2013-14 2014-15

1

Rice

199611 198159 564325 562092 2827

2837

2

Pulses including Tur

2989

3601

3019

3409

1010

947

3

Pepper

84065

85431

29408

40690

350

476

4

Ginger

4538

4800

21521

22989

4742

4789

5

Turmeric

2430

2470

6253

6820

2573

2761

6

*Cardamom

39730

39730

14000

16000

352

403

7

Arecanut

100008 96686

100018 125925 1000

1302

8

Banana

62261

61936

531299 545431 8533

8806

9

Other Plantains

54512

56761

362395 468320 6648

8251

10

Cashew nut

49105

45436

33375

654

11

Tapioca

67589

75496

2479070 2943919 36679

12

Coconut

808647 793856 5921

5947

7322

7491

13

**Coffee

85359

85359

66645

67700

781

793

14

$ Tea

30205

30205

62938

65174

2084

2158

15

# Rubber

548225 549955 648220 507700 1182

29715

680

38994

923

30 ment programs hardly look at farmers and cultivators as an economic class capable of seeking its own destiny. Most programs are targeted at individual farmers, and not at the farmer collectives, cultivating a particular crop and hardly differentiate between the genuine farmers who have taken to cultivation as a means of livelihood, and those who look at it only as a source of supplementary income. Those who design and administer these programs are hardly obliged to ask questions like, who are the farmers and how many farmers are there in a given locality?

Farm development programs are, by and large, conceived and administered in a socio-economic vacuum, where real framers hardly exist as an economic class. In Kerala the number of cultivators, or genuine farmers, who look at agriculture as a means of livelihood or major source of income, may not exceed ten lakh.

But if we count also those who grow a couple of coconuts in their backyard, the entire population of Kerala will turn out to be cultivators. That is why the reported membership of our agricultural credit societies is twenty times the count of genuine farmers.

In Europe as well as USA, there are numerous examples of such autonomous crop based cooperatives, engaged in the whole spectrum of activities, including R&D and product development, as well as processing of farm products for value addition.

Promoting crop specific cooperatives of genuine farmers for a dozen major crops, with the help and active involvement of LSGI could be a highly desirable immediate objective. Cooperatives may be structured taking into account the field experience of the Anand model of Gujarat and Rubber Coops of Kerala.

Organizing a million farmers into a dozen or so crop based cooperatives, promoted by the state government, with the resultant diversification of farm products and higher productivities as immediate objectives would uplift Kerala economy, to a pretty high level of productivity, within a short span of time. Institutional resources already available including the cooperative financial institutions and banks could be used toward this purpose. Nevertheless, the problems arising out of the resources-responsibility mismatch that exists at various levels, as illustrated in Box-2 need to be addressed expeditiously.

III Crop based cooperatives or collectives of farmers are, historically speaking, long overdue for Kerala: This was demonstrated during the days of group farming initiatives for paddy, the program initiated by the second Nayanar ministry, under the dedicated leadership of late VV Raghavan. Farmers were ready for cooperative and collective action,

November 30 - December 31, 2016

and based on the success of this experiment, plans were drawn up for extending it to coconut crop as well.

UDF rule that followed this Nayanar ministry in 2001, found little merit in group farming, though the scheme continued in a new form under the re-constituted paada seakhara samithys. Later in 2003, this writer had an occasion to interact with several of such samithys in Palghat District, and personally experienced the enthusiasm of Palghat paddy farmers for cooperative or collective

pilot project, with a command area of 45,000 Ha of paddy lands, and a target group of 15,000 cultivators. Project had envisaged a chain of forty agri-service centres, a modern paddy processing plant and a seed development farm; all at the estimated cost of Rs.25 Crore with the support of NBARD. The scheme was endorsed by a convention of around one thousand farmers, in the presence of the then Planning Board Vice Chairman, V Ramachandran.

However, such initiatives were looked

BOX-2: MANAGEMENT OF INDIAN AGRICULTURE Overview of institutional responsibilities Item

Central Government

State Governments

Local Self Governments

Farmer collectives

Low

Low

Nil

Nil

Mostly policy making

High

Nil

Nil

Weather forecasting

IMD- sole agency

Nil

Nil

Nil

Agricultural research

ICAR dominated

Low

Nil

Nil

FCI, Central Warehousing

Low

Nil

Nil

Policy making

Custodian of production

Nil

Nil

Nil

Nil

Nil

Nil

Central plan +NABARD

State plans

Nil

Na

Bureaucratic regime.

Resourceresponsibility mismatch

Resourceresponsibility mismatch

No role

Land use planning Water resources management

Warehousing, price support Agricultural production Human resource development Development finance Overall

farming; while engaged as a program consultant for their organization, the National Farmers’ Protection Committee (NFPC).

Detailed plans were prepared for a

down and discouraged, not only by the bureaucrats of agriculture and cooperation departments, but also by political leaders at every level.

They had, possibly, jointly conspired

PASSLINE

against and defeated these initiatives by genuine farmers for re-organizing paddy cultivation in the region on a cooperative basis.

The Achuthanandan ministry of 2006 as well as the Ooomman Chandy ministry of 2011 had no appetite for any sort of cooperative adventures with the farming communities. Even the recent Neera initiative by the Coconut Development Board was conceived as a cooperative of Neera producers and not as the cooperative of coconut farmers.

The recent election manifesto of LDF (2016) had presented an agriculture development perspective in 33 paragraphs. It makes some vague references to initiatives by farmer collectives. However, as a matter of policy avoids any specific mention about legally constituted farmer cooperatives.

Paddy could have been a priority crop for such initiative: Group Farming experiment of the late eighties was warmly welcomed by paddy cultivators. Most of our paddy farms could have been converted by now, into flourishing cooperative paddy farms, by now based on that splendid experience,. Even today, I believe, it is not too late to re-kindle those old sentiments in support of collective endeavours by our farming communities.

References 1. See cover story of Passline of June-July 2008: Food crisis: Kerala needs crop-based coops.

2. See my paper: Indian Agriculture: Search for patriotic alternatives, page 20- Centre-State relations and cooperative federalism-published CCPI, Sept 2015

31 STOCK MARKET

November 30 - December 31, 2016

PASSLINE

Volatility rules the roost

Passline New Service

D

espite all negative macro and micro indications prevailing globally and indigenously the demonetization of high value notes and south ward growth of corporate earnings in Q2 results which are beyond the expectations of the market ; Indian stock markets are still in bullish mode. For the last two years markets have been moving upward constantly and investors were confident due to the reasonable profit booking.

But, from October end to November end market was struggling to survive. FIIs turned into sellers and the impact was immediately visible on the market. Nifty nosedived to 7900 points from 8900 range , a drastic 1000 points fall. Mid Caps and Small Caps , generally the darlings of primary markets also come down to 30% to 50% from the higher notches. Analyst are predicting that markets are likely to be bearish from bullish. Is it a temporary phenomenon for Indian markets which have a lot of fundamental strength? Let us examine.

The points expected to hinder the market growth First and prime one is demonetization of Rs 500 and 1000 notes. This will reduce the consumer spending due to the short fall of currencies in circulation. Of course, this will have a neg-

ative impact in the market and will affect FMCGs, logistics, agriculture, tourism, construction and real estate etc... Global markets are still on recovering stage and uncertainties are yet to be over. Chinese growth story is also showing a sluggish mood and impending US interest rate hike is expected mostly anytime in December this year. Our bullish movements mainly attributed to FIIs investment appetite , naturally Fed rate hike may create more corrections and chance

US companies using Indian companies by outsourcing jobs for getting a competitive edge in the market .

And also, innumerable of IT professionals working in the US for different projects may end up in job loss.

A number of Indian pharma companies too doing business in America and all are watching his policies forward . If anything adversely affects Indian interests, the companies mainly indulged in IT and pharma will have adverse impact and stocks of

more impetus to the market growth.

The issues prevailing from the demonetization of notes will not have a longer life, according to the market experts. But the benefits in the long term is umpteen. The economy will transform into a clean one without the black money and hoarding.

More transparency in dealings , no corruption is anticipated and our banking which is beleaguering with huge NPA will get room to refurbish their balance sheets with huge influx of public money and the sector will regain strength. The tightening of the norms in public expenditure will improve tax collection which will eventually reduce the huge deficit in coming days making our economy more vibrant and investment friendly.

The surplus fund in banks will boost the lending in the sector with lower interest rate which will be a boon for the cash starved corporate to move on with their projects available at hand. The reduction in deficit will instigate the government to invest in more in various infrastructure projects which open more job avenues . The overall growth of the economy will certainly attract the investors and market will certainly rebound to the desired level.

Caution for primary market It requires some precaution before investing till January 2017 and do not invest in any shares without good management and market watch. Invest in good Large Cap shares with an intention of long time holding.

Even if investing in Small and Medium Cap scrip; choose shares with good products and track records. Be ready with funds for unforeseen down fall to buy the shares depending up on their value .

Market tips

to affect the inflow at least for a short period of time. The victory of Donald Trump as the US President creates a lot of havoc in Indian stock market due to his reckless rhetoric during his campaign. His stand for creating more job opportunities in the US will jeopardise the fortunes of the

these companies may fall drastically.

The points expected to favour the market in its bitter time The Government’s decision to give more pace to the reform process will improve the sentiments. The passing out of GST in the Upper House gives

Sectors like Cement, Construction , Engineering, Auto ancillary, Sugar, Banking are good to invest. Selected public sector and private sector bank shares, some steel stock investments may give you good return in the coming months. But focus only on Large Caps. In Cement sector , Ultratech, L&T are good ones and in banking sector ICICI Bank , in public sector SBI and Pharma shares like Cadila, Sun Pharma etc are good to invest on a correction ( Courtesy: V Raghavan, Nirmal Bang)

32

November 30 - December 31, 2016

PASSLINE

Bumpy roads ahead for the NBFCs in the State Passline News Service Kerala- based financial institutions, both banks and NBFCs are performing fairly well in this period of financial logjam. Everybody has shown very viable financial performance. In investment perceptive they are good companies .But how far the demonetisation drive may affect these companies is the question of the hour , particularly for NBFCs. Read more...

T

he demonetisation drive may have turned out to be a jackpot for banks by way of cheap deposits, but non-banking finance companies have a different story to tell. The move has affected the cash flow cycle of most small businesses everywhere in the country, which form the core clientele of NBFCs. The impact has been more severely felt in rural areas, with many clients unable to honour their loan repayment schedule. The RBI has given a breather to NBFCs by relaxing non-performing asset recognition norms by 60 days, for payments due between November 1 and December 31. However, analysts say there could be a hit to the asset quality of NBFCs as many of their clients’ businesses may take a while to recover from the demonetization blow. A strain on their loan book could hamper the ability of NBFCs to borrow money at an attractive rate. This in turn would restrict their ability to disburse loans to fresh borrowers. A recent research report by Religare states that demonetisation will have a three-stage impact on NBFCs. The first will be immediate but short-lived due to transitory cash crunch and while the second will be due to a general economic slowdown and bleeding

of the parallel economy as shadow borrowers may lose their competitive edge. The third-order impact will arise from a permanent shift of borrowers from NBFCs to banks who are keeping gold loan portfolio as one of their main products.

These banks can easily compete with the NBFC with their cheap fund which they got as windfall by way of demonetisation. The report further states that NBFCs are still trading at rich valuations despite a steep correction since November 8. However, this correction factors are only a temporary slowdown and resultant asset quality and growth issues for six months. NBFCs, too, confirmed that there have been issues post demonetisation. “Basically, there were two immediate issues we faced post demonetisation,” says VP Nandakumar, Managing Director and Chief Executive Officer of Manappuram Finance. “Firstly, some of our customers faced problems in making repayments as we had to stop accepting old notes all of a sudden. Secondly, with regard to loan disbursements, we faced issues regarding availability of cash when disbursing small

V P Nandakumar value gold loans of less than Rs 1 lakh where borrowers are keen to get the amount in cash”. Concurring with Nandakumar’s, George Alexander Muthoot, MD of Muthoot

Finance, said that, “Cash crunch is affecting all. It has impacted us also. The NBFC’s major target group is low and middle income group.

The current demonetisation has impacted in particular the loan disbursement and loan recovery.” An ex-banker who runs his own credit improvement organisation says the impact of demonetisation on NBFCs

that have been catering to borrowers from towns may not be much owing to the fact that the repayment is through an electronic mode from the borrowers’ accounts. However, the NBFCs dealing with the rural population are bound to get impacted since the borrower segment they are dealing with most of the times pay in cash and may not even have an account with the bank. While all market experts believe that the short term impact is inevitable, they don’t expect impact would be there for the very long term and the spillover could stay till the next quarter.

Moreover, with the influx of deposits into the banking system, there is greater likelihood of cuts in interest rates going forward, which will benefit NBFCs. “We have seen that the disbursements have fallen significantly. The situation is likely to remain difficult for the next month as well. Pain will continue this quarter and part of the next quarter,” said Nandakumar of Manappuram

Finance. He expects that there will be pain in this quarter from all the dislocation which is likely to ease in the coming quarter. He further added that, for gold loan NBFCs, especially the tech-savvy ones, the outlook is brighter now. Muthoot Finance believes that the NBFCs will have to struggle for 2 more months but he added that they have been able to overcome the issue as it has been encouraging online Gold loan, direct credit to customers’ account, loading to prepaid cards for disbursement of loan. For repayment they are accepting payments through Webpay, Muthoot App, RTGS/NEFT/IMPS facility. They are also accepting cheques and drafts.

(Courtesy: Babu Vettoor)

33 NEWS

November 30 - December 31, 2016

Vyapar 2017 in Kochi on Feb 2,3 & 4 B2B promotional meet held

Vyapar 2017 logo is being released by Chief Minister Pinarayi Vijayan

I

n connection with a three-day small and medium enterprises (SME) B2B meet named Vypar 2017 scheduled in Kochi between February 2 and 4 a promotional meet was held in association with Federation of Indian Chambers of Commerce & Industry (FICCI) in Hyderabad, in November last. The Kerala government has invited buyers from Andhra Pradesh and Telangana states to actively participate in Vyapar 2017.

A string of SME sectors, including food processing, handloom textiles and garments, rubber, coir products, Ayurveda and herbal, electrical and electronics and traditional sectors like handicrafts and bamboo, will display their products during the meet.

The event provides a platform to the buyers for direct interactions and discussions with the participating manufacturers and sellers from Kerala.

Caspian Techparks-Nanma tie up

K

ochi-based Caspian Techparks India and the Eastern Group Company Nanma have entered into an understanding to develop a 5.5 lakh sq ft non-SEZ property in more than 2.62 acres at Infopark Kochi.

“The project envisages to provide employment to 3500 and phase I is expected to be completed by December 2017,” said Thomas Chacko Mukkadan, Managing Director, Caspian Techparks India.

The 12-storied property, located at the main entrance of the Infopark, will meet the requirements of all IT and ITES companies planning to set up or upgrade their existing facilities in Kerala. The project will also have two floors exclusively dedicated to commercial purpose catering to the entire demand of employees working in Infopark, Mukkadan added.

This green building will be eco-friendly with futuristic facility and offices of international standards.The project also boasts of large open living space, amphitheatre, cafes, recreation facilities and food courts.

“The new facility is designed as a focal point of activity in infoparks Phase II catering to the needs of the entire park,” Mukkadan pointed out.

“The joint venture with Nanma is going to be mutually rewarding for both the companies. We are roping in the services of experts to complete our first IT Infrastructure project in Kerala. Our studies and market research have revealed that many IT major companies have shown interest in Kerala and are keen to have an address in this southern state,” he reiterated.

“We are happy to enter into a tie-up with Caspian Techparks India. We hope this project will provide more teeth to the IT and ITES sectors in Kerala. The new facility will be a feather in the cap of Infopark Kochi,” remarked Asheen Panakkat, Managing Director, Nanma.

PASSLINE

Vaidyaratnam: Ayurveda global meet from Jan-13-15 in Tcr

H

undreds of doctors, including doctors from different countries, are likely to attend a global meet on ayurveda being organised by Ashtavaidyan Thaikkattu Moos Vaidyaratnam Oushadhasala as part of its Platinum Jubilee celebrations from January 13 to 15, 2017 in Thrissur. Nearly 1,000 doctors are expected to attend the conclave. Of this, about 200 doctors would be delegates from other countries. The conference is being organised with the support of the Ayush departments of the State and the Centre.

International experts in the field of medical science are to present papers on the topic “Lifestyle diseases and ayurvedic treatment”. Ministers from both the Centre and the State and representatives from Ayush are also to attend the conference. A website www.vajra2016.com has been launched for the convenience of those who are planning to attend the conference from other countries. They can register and access information about the meet from the website.

Ashtavaidyan Padmabhushan E T Narayanan Moos is the head of the group at present. As part of its campaign for the cause of Ayurveda, the Vaidyaratnam has been organising a seminar called “Arogya Paricharanam” with the cooperation of the public. For the growth of doctors the company has been organising CME (Continuing Medical Education). The Vaidyasala is also encouraging the cultivation of medicinal plants with the cooperation of social organisations. The Ayurveda foundation at Thaikkattussery in Thrissur provides treatment at subsidised prices for those who are financially weak.

T

CSI conference in Kochi

he 68th annual conference of Cardiological Society of India (CSI) is being held from December 8 to 11 in Kochi under the aegis of the Chapter of the Society. CSI is the largest association of Cardiologists in India with more than 4,000 members.

Presidents of five major Cardiological Societies of the world namely Dr David Wood, President World Heart Federation, Prof Mark Creager, President, American Heart Association, Dr Mary

Norine, President, American College of Cardiology, Dr Jeron Bax, President European Society of Cardiology and Santanu Guha, President Cardiological Society of India will participate.

The launch of the book Know Your Heart and Fight Heart Diseases written by 143 cardiologists across Kerala will be announced by the Education Minister Prof C Raveendranath at the inaugural function on December 8.

34 NEWS

November 30 - December 31, 2016

Double Horse Snacks snaps Kicha as brand ambassador

Master Kicha aka Nihal Raj with Manjilas Group Managing Director Vinod Manjila(Centre) and General Manager ( Marketing) Sunil P Krishnan

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PASSLINE

anjila’s Double Horse who has been offering traditional food items tickling taste buds of millions over 6 decades, is now coming out with a number of snacking options with Master Kicha as the brand ambassador to hit

the “ Snack market “ with a new taste revolution. Master Kicha aka Nihal Raj, the 6 years old chef, who inspired the food lovers around the world with his mouth- watering delicacies will be the brand ambassador for Double Horse

Snacking Range. The charming talent got noted when he started his own YouTube cookery channel ‘Kicha tube’ at a very small age, amazed the online audiences with various recipes and became an overnight celebrity after being the youngest guest in the famous Ellen D eGeneres Show where he prepared Puttu for the hosts.

Double Horse expects a great impact for the snacks range among the youth as Kicha has bowled over the kids and youths with his alluring cuteness and style.

After the launch of Kerala’s very own snack, banana chips –during this Onam, the company is now getting ready to introduce a range of Healthy snacking options ranging from Cassava chips, potato chips, choco/vanilla/strawberry bites, peanut candy etc to name a few.

Whether it is a festive season, special occasion or a regular day; Double Horse snacks can add more flavour to any of them. Apart from snacks, Double Horse intends to come out with a number of Ready To Eat delicacies also down the line.

Double Horse always gives utmost importance to the health of its valued customers and ensures maximum purity and quality in its food products. Pure raw materials, high quality processing and flavour-lock packaging ensure excitingly good taste for young and old alike, any time, any where.

35

November 30 - December 31, 2016

PASSLINE

Books commended by world’s top CEOs like Jeff Bezoz, Tim Cook Passline News Service

singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.”

Ahmet Muhtar Kent is the Chairman and CEO of Coca Cola. Known for his ideas on building meaningful business relationships, he recommends this interesting book on how the financial system evolves and the forces that drive it. Niall Ferguson is a British historian, who specialises in economic and financial history.

In this book, he imparts the idea that “the central lesson of financial history is that sooner or later every bubble bursts -- sooner or later the bearish sellers outnumber the bullish buy-

W

hen CEOs of the world’s most outstanding and exceptional companies seek ideas and inspiration, they turn to books for help. It is well known that many successful entrepreneurs are avid readers, and entrepreneurs like Bill Gates and Elon Musk have publicly spoken about their reading habits. Here are a few recommendations by some of the most famous CEOs in the business world.

world, with his personal wealth estimated to be up to US$65.2 billion.

Apart from Amazon, he also places big bets on AI, physical stores and space exploration. Having singlehandedly built a business legacy, he believes that this book is a guide for every entrepreneur who wants to build a long-lasting company. In fact, this book is based on a six-year research project by the authors, during which they thoroughly studied 18 exceptional and long-lasting companies.

Competing Against Time

by George Stalk Recommended by: Tim Cook, Apple

Popular quote from the book -- “Time is now added to the other three critical factors in order to remain competitive in the market – money, produc-

Surely You’re Joking, Mr Feynman

by Richard Feynman

Recommended by: Larry Page, Google Popular quote from the book -- “I always do that, get into something and see how far I can go.” Larry Page, the co-founder of Google Inc. and the current CEO of Alphabet, believes, “Being negative is not how we make progress, everything is not a zero sum game.” Page is known for succeeding against all odds by pushing boundaries. So, when he admits that this book is his favourite, there has to be something incredible about it, right?

tivity, and quality” Tim Cook, the current CEO of Apple, also serves on the board of directors of Nike and the National Football Foundation. He joined Apple because he was immensely inspired

by Steve Jobs after their first meeting, and he had an intuition to be on the executive team that could resurrect a great American company. With all his years of experience, he knows the value of time and hence recommends this book.

The Ascent of Money – A Financial

History of the World by Niall Ferguson Recommended by: Muhtar Kent, Coca Cola Popular quote from the book -- “There really is no such thing as ‘the future’,

ers, sooner or later greed flips into fear. And that’s why, whether you’re scraping by or rolling in it, there’s never been a better time to understand the ascent of money.”

Built to Last: Successful Habits of Visionary Companies

by Jim Collins and Jerry Porras Recommended by: Jeff Bezos, Amazon

Popular quote from the book -“Visionary companies pursue a cluster of objectives, of which making money is only one -- and not necessarily the primary one.” Jeff Bezos is the founder and CEO of Amazon. He is now the third-richest person in the

The year 2016 is a year of possibilities to quench the thirst of voracious readers. It offers books related to history and modern literature, from Aurangzeb to Sangh Parivar. George RR Martin’s fans have been quietened by the rumour that The Winds of Winter is coming, and there are murmurs that Vikram Seth might complete a draft of A Suitable Girl by the end of the year. Speculation aside, some of the big books of 2016 include Elena Ferrante’s In Fragments; Jonathan Safran Foer’s first novel in a decade, Here I Am; and Thomas Piketty’s Chronicles: On Our Troubled Times, a compilation of his columns.

Nobel laureate Svetlana Alexievich’s Secondhand Time and Mikhail Gorbachev’s The New Russia cover that country’s past and present; Sebastian Junger’s Tribe, on men in combat and post-traumatic stress disorder, will be released in the summer, while performance artist Marina Abramovic’s memoir will be out in the autumn.

So, which of these books are you reading next?

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PASSLINE November 30 - December 31, 2016

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