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A
s long as power is available, no one bothers to think about it. We realize the importance of power only when it is absent. Whether it is day or night, we need power to keep our lives in order. Without power everything comes to a standstill. In short, power rules everything around us--our industries, our businesses and our lives. Supra, which was established in 1988, has now completed 25 years of excellence in power supply and is continuing its powerful journey. It did not take long for the brand to carve out a niche for itself in the power control market. In fact, in a number of product categories and higher-capacity ranges, Supra is the only brand available on the market.
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Jan 31 - Feb 28, 2014
“Though the importance of power is universally recognized, power failures, power shortages and power fluctuations are facts of life even in highly developed nations. Restoring, correcting and controlling power supply, therefore, assume great significance. And
this is the technology that Supra has mastered over the years,” says T J Subhash, Managing Director of the Supra Group. “The Supra Group has gained considerable expertise and deep insights into power control technology. Over these years, we have emerged as one of the largest and Today the group has gained considerable experience of and deep insights most innovative designers and into power control technology, and has manufacturers of power control emerged as one of the largest and most systems and equipment in India, innovative designers and manufactur- and today we are a multi-crore ers of power control products in the group with a well-earned reputation for integrity, performance and country. reliability,” says Subhash.
3 3 Subhash launched his unit only after conducting a detailed study of the power sector, visiting different villages of Kerala. “These journeys helped me to understand how the use of electricity ranges in different areas. As those days were the foundation period of the state’s IT spurt,
absent in Kerala. Today the group has gained considerable experience of and deep insights into power control technology, and has emerged as one of the largest and most innovative designers and manufacturers of power control products in the country.
I came to know about the scope and future of this business. We manufacture specially designed products which are used in industrial applications,” Subhash says. Supra began its operations from Thiruvananthapuram in 1988 initially starting with trading. In 1990 we opened a branch in Kochi and in 1991 our manufacturing unit, Supra Hi-tech Electro Equipments, started its run at Kochi. Later we expanded our network to other parts of the country”. With his hard work and dedication, Subhash built an excellent team, always motivating them. To them he is not just the boss but a friend and guide. He proudly says that the whole success of his company is due to the wholehearted support he receives from his employees whom he encourages to be always active. “Let there be mistakes which occur when you are active. But we must learn from them and must be able to correct them,” he tells them. He says he has also been fortunate enough to receive political support, from both left and right, in ample measure. When Supra began its operations two decades ago, power control equipment manufacture was largely
“More than 90% of the products are manufactured based on our customers’ requirements. We undertake the work after ascertaining from them why and for what purpose they need the product and what features and applications they would like us to incorporate in them,” says Subhash. Supra’s manufacturing units •Supra Hi-tech Electro Equipments: The company manufactures heavy-duty power control equipment for Defence and industrial applications. Many of the company products are available on DGS&D rate contract. The product range includes UPS, Servo Stabilizers and Constant Voltage Transformers. • LineOn Power Pvt Ltd: “Nature has provided us with an unlimited source of energy in the form of solar power. This is a natural resource, freely available and replenishable as long as the sun shines. Solar energy can be harnessed to generate electricity using photovoltaic solar cells and concentrated solar power. The benefits offered by solar power are many. Solar
TJ Subhash
Jan 31 31 -- Feb Feb 28, 28, 2014 2014 Jan
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Joby P Varghese GM (Sales)
cells are totally silent and non-polluting. Solar products require very little maintenance. They are very easy to install and save money in the long run,” says Subhash. The solar range of products from LineOn includes Solar Panels, UPSs, Inverters, Lighting Systems, DC Power Supply, DCDC Converters, Battery Chargers, SMPS and Energy-saving Systems. “Unlike in other countries manufacturing cost is high in India. In Kerala, there are very few manufacturing companies. People here are more service-minded,” adds Subhash. He says his group has always strived to be quality-driven, technology-based and customer-oriented, taking into account today’s and tomorrow’s requirements of industry. “This emphasis on quality has earned us the coveted ISO 9001:2000 certification from American Quality Assessors recognized by the American National Standards Institute. Our products have been tested and certified by several test laboratories of the Government of India and those approved by NABL. “There are three types of customers-the first look for quality, the second for price and the third for both. Therefore when the market is tough and highly competitive we have to be more alert and we offer our customers more quality products,” says Subhash. “Besides our headquarters in Kochi, we have a chain of independent offices and complete facilities throughout India. We also have sales and service centres, dealers and resident engineers in all major cities and towns. We have manufacturing units in Chennai, Bangalore, Mumbai, Delhi and Hyderabad. Our focal point has always been on offering the highest levels of
Antony Manager (R&D)
KK Jayan Manager (QA)
MV Jayagopal Director
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customer satisfaction through the quality and reliability of our products as well as our service support for our clients. Today we have a million-strong customer base, which includes prestigious clients in both public and private sectors. We mainly supply our products to Defence, Railways, ONGC, BSNL, corporate sectors and all State Government departments (in the whole of India),” says Subhash. Before manufacturing a product, Supra conducts a study on the quality and the amount of power supplied to the consumers by the Kerala State Electricity Board (KSEB). Regular studies of the quantity and quality of power supply in different places of India are also conducted and therefore Supra can incorporate the necessary changes in its products accordingly during manufacturing. Subhash says he visits foreign countries every year and attends business seminars to know more about business. “This teaches me how to tackle problems and deal with thorny situations that arise. I am also enabled to get acquainted with different machines, manufacturing processes and changes in technology. Before marketing a product, we conduct environmental studies to know how it behaves in different climatic conditions. We have to arrange the settings of the products according to the purpose of use and site conditions of the place to where it is exported. Sometimes complaints come about manufacturing defects, damage during transit and erroneous handling by people etc. Site-related problems are also reported. We therefore conduct site visits to industries and offices to see their working.” According to Subhash, R&D is the cornerstone of his group’s corporate philosophy. “Our R&D centre was born out of our single-minded pursuit of innovative product development. The centre has qualified and skilled technical talents, with rich hands-on experience. These professionals are constantly involved in research, innovation, re-engi-
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‘Study the project well before starting it’ “Before starting a new business, one should conduct a systematic study of what one is going to do. And to reach your aim, hard work is a must. The big challenge we face today is the highly competitive market. If you start a manufacturing company, look into it for at least five years and try to solve the problems and enjoy solving them. And always try to create a brand name for your product. Don’t be interested in someone’s money; only think about what you deserve. Expenditure should be calculated and maintained; that is the most important thing businessmen should do” -this is the advice he has to give to new entrepreneurs.
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employees full freedom to work creatively without tension. If we get any complaint about the processing of our product or its material, we take the full responsibility to repair it even after the given warranty period. Products needed for Government offices are manufactured in the Kochi unit,” he says. “With rapid industrialization in the country, the demand for power control equipment and energy-saving systems is expected to rise in the future, for both conventional and alternative power resources. When this happens, Supra will be ready with the expertise, technology, manpower and flair to meet the challenge,” says Subhash
neering and reverse engineering to ensure that the quality and performance of our products are equal to the best internationally. This has naturally resulted in our getting a number of export orders from the Middle East, SAARC countries and Africa. We have introduced the Japanese management system in our company, which is the most recognized management system around the world. Supra is giving the
Jan 31 - Feb 28, 2014 Jan 31 - Feb 28, 2014
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INBOX
Mega-bucks behind Ghats love
I
t was an overnight hullabaloo we heard over the MadhavGadgil and Kasturirangan reports on Western Ghats. Kerala observed a hartal against implementing the findings of the Kasturirangan report although the Western Ghats guard six states - Gujarat, Maharashtra, Goa, Karnataka, Tamil Nadu and Kerala. The findings of the two commissions appointed by the Environment Ministry have little relevance to the ground realities of our state. The hurry shown by the ministry in posting two commissions in quick succession is still a mystery for the people. These and the fire and fury raised by many evoke suspicions. If reports in some media are to be believed, it is not concern for the ecology and eagerness to protect nature that lie behind all the drama but the lust for fast bucks that emanate from the coffers of some environmental organizations. It is reported that under the directive of the World Heritage Group in St Petersburg, UNESCO had enlisted the Western Ghats in the World Heritage list. Since then, the idea of the conservation of the Western Ghats has gained momentum among the protagonists of ecology. The environmentalists’ focus was based on the crores of rupees of financial aid given by the foreign countries and agencies for various schemes and studies on the Ghats. Thus, different environmental agencies in India have got hefty amounts from foreign agencies. These agencies are located in different states in India. It is said that a body in Pondicherry has received Rs 40 lakh. Another organization in Delhi has bagged Rs 27 lakh. An organization in Japan has allotted Rs 19 lakh each for some environmental bodies in India. Some agencies in the US also have given bulk amounts for environmental protection. It is said that the Gadgil and Kasturirangan reports have been framed to make some organizations eligible for financial assistance as if they have selected some ecologically sensitive areas for study. Moreover, certain members of the Kasturirangan and Gadgil committees maintain good rapport with some environmental agencies in foreign countries. It is reported that the Centre and environmental entities had acquired Rs 400 crore last year. E G Subramanian, Kattoor
Courteous LPG agent
S
ince the day of the distribution of the Aadhaar card began people have been put in a dilemma over the validity of the document as the authorities concerned aired different views. As the Lok Sabha poll is round the corner the Centre has finalized the issue by delinking Aadhaar with bank account for LPG subsidy. However, a lot of discrepancies are reported in its distribution like name and photo mismatch, wrong address or wrong delivery, delay in delivery, early applicant-late receiver, late applicant-early receiver etc etc. Now the consumers in Kerala will get two months to link their Aadhar with bank accounts. Every member of my family got the Aadhar in time. Further procedures were intact. There was no bungling. But I was confused when I saw the message on my cell phone sent by the LPG distributor mentioning a 10-digit amount as credit to my bank account as shown by the voucher! That runs to thousands of crores of rupees! I presumed it was a slip on the part of the sender. A day later the message was rectified. My thanks to the distributor for his courtesy when my bank still keeps a golden silence! O K Joseph, Thiruvananthapuram
IAS consul’s IAS dad
D
evyani Khobragade, Indian diplomat in the US, got accreditation from the UN and was exempted from personal appearance in a New York court. After her arrest in New York she was ill-treated by the US authorities as a third-rate citizen. This is old news. But the latest hot news is that Devyani’s dad is to take on the ridicule meted out to his daughter at the hustings. A former IAS officer, Uttam Khobragade has hit the nail on the head by announcing his political career by becoming a part of the 2014 general elections, and is in talk with some political parties in Maharashtra to finalize the nitty-gritty of his entry into politics. A Dalit and 1984-batch IAS officer, Uttam Khobragade (62) had held several Government posts in Maharasthra which include the Principal Secretary of Tribal Development Department, Vice-Chairman and Managing Director - MSRTC (Maharashtra State Road Transport Corporation), CEO and Vice-President - MHADA (Maharashtra Housing and Area Development Authority), Commissioner FDA (Food and Drug Administration), Collector and District Magistrate - Greater Mumbai Suburban district, Managing Director - MAFCO Ltd and Joint Secretary - Revenue and Forest Department. Although he was an accused in many scams he has many achievements to his credit. The biggest scandal is the multi-crore Adarsh flats. After his daughter’s arrest in the US, Khobragade mobilized political support in Maharashtra and Delhi.
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Jan 31 - Feb 28, 2014
Foe in politics
A
lthough Nandan M Nilekani, co-founder of Infosys, has served it in various capacities and had held several posts in many organizations, he has kept a low profile so far and is known to work silently and never publicly criticizes anyone or is criticized by anyone. Also, he always stays away from rhetoric and taking political positions. The Chairman of the Unique Identification Authority of India(UIADAI) is a non-political individual catapulted into politics after the first number of Aadhaar card rolled out in 2010. As and when he was touted to be a candidate for the Lok Sabha elections from Bangalore he began to face opposition from different quarters. The major flak came from his former colleague and chief of the Board of Manipal Global Education Services, the Vice-President of the Bangalore Political Action Committee, the Planning Commission, the Finance Ministry and the lower ranks of the Congress in Karnataka. The blame: he has not done anything special to Karnataka. But Rahul Gandhi has always shown support for him after Nilekani joined the Government on a five-year contract with a Cabinet minister’s rank. Fortunately or unfortunately for him, under his administration, the Aadhaar card remains a puzzle, especially in Kerala, as many of the formalities remain incomplete due to technical flaws, public ignorance and bureaucratic delay under his administration even after the authorities’spending crores of rupees. Nilekani is a Bachelor of Technology (BTech) in Electrical Engineering from IIT-Bombay.
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From the Editor All in the name of democracy! Editor & Publisher
Varghese Paul Kochi RG Gireesh 9544629775 Kozhikode Vineeth Mukundan 8714986177
Chennai Augustine Joseph Ph: 09381000534 Bangalore Jayachandran 0988699331 Manager-Marketing Sajan K 09895344485
Keethara Publications Pvt Ltd 38/125 1st Floor, Narakathara Road, Kochi-682 035, Kerala, India. Editorial
: +91 484 4038346
Marketing
: +91 484 4039346
Marketing Office: G-238, K C Joseph Road, Panampilly Nagar, Kochi-682 036 Marketing : +91 484 4010075 e-mail : passline.com@gmail.com
T
he announcement by the UPA-II Government raising the number of subsidized cooking gas cylinders to 12 a year from the mandatory nine now and the delinking of subsidy through the Aadhaar card will be the first casualty of the 2014 elections because it will derail the ongoing oil reform process and the oil companies’ much-cherished dream of deregulation in the sector. Of course, there are some reasons for the apprehension. The uncertainty over the outcome of the election and the prospects of the UPA Government coming to power for the third time in succession have created a piquant situation. The panic among the oil companies is evident from media reports that they have sent letters to LPG dealers to maintain the status quo ante instead of following the Government’s new diktat. This directive of the oil companies has created a new confrontation between dealers and the general public. The Aadhaar card is just the beginning: in the coming days we can expect more casualties that may be created by the impending elections. The UPA Government’s much-touted legislative bills are in cold storage waiting for the approval of both Houses of Parliament and they won’t see the light of day now as the 15th Lok Sabha is on its exit route. They include the Education, Women, RTI and Anti-Graft Bills. According to reports, the total number of bills pending in Parliament is 126, out of which 72 are in the Lok Sabha. With the formation of the new Lok Sabha all of them will fizzle out. In the Rajya Sabha, 54 bills are waiting for salvation, the fate of which also remains sealed. The people are wondering what our honourable members of Parliament have been doing for the last five years except perhaps creating pandemoniums and staging walkouts from the Houses at the cost of the exchequer. Apart from the Aadhaar card the Government had introduced the NPR (National Population Registry) card, the purpose of which is still unknown to many. But the Aadhaar card has been hyped with much fanfare, and according to the Government notification it identifies an Indian citizen in any part of the earth or in another planet. To roll out Aadhaar, the Government had appointed Nandan Nilekani, the IT scion and co-owner of IT bellwether Infosys, by giving him a Cabinet rank and appointing him as the Chairman of the Unique Identification Authority of India (UIDAI). The Government had also created a Rs 5,000crore corpus. But even after Rs 3,500 crore has been spent, the majority of the population have not been enrolled.The major apprehension about Aadhaar is that Nandan is trying his luck as a politician by contesting from Bangalore. Whether he wins or loses, the fate of UIDAI and its Chairman will be uncertain. If the mandate is going to be to keep the UPA out of power the question of Aadhaar will not arise forever and the effort and time of the general public spent on acquiring this ‘precious’ document will certainly have been in vain. In India, we call all this profligacy rule of democracy. We are not the only democratic nation in the world. Is there any other country where these types of anachronisms take place. God only knows.
Varghese Paul
www.passlinebusinessmagazine.com Jan 31 - Feb 28, 2014
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COVER STORY
Budget 2014-15 and the N
owadays budgets are deteriorating to the level of election manifestos, which the party forgets when it comes to power. Of course an annual budget is a statement of ‘expected revenues expenditures’ of a government during the given financial year and the economic policies relating to them. If expected revenues fall short of expected expenditures, budget promises would remain unfulfilled to that extent. Fiscal statistics show that revenue receipts upto 30th September 2013 (midpoint of the previous financial year) was only 37.90% of what expected for the whole financial year. Similarly, tax revenue mobilized came to 38.65% while non tax revenue reached only 37% of the budget expectation for 2013-14. At the same time pensions and salary payments grew by 54.5% and 50.6% respectively. Various factors contributed to the slowdown in economic performance and revenue growth in the first half of the previous financial year. Year 2013 was an excess rainfall year with torrential rains from May to September. Therefore a wide variety of economic Dr Mary George activities like Mahatma Gandhi National Rural Employment Programme were to be shelved for some time. Heavy rain was accompanied by unending health sector problems as the state was in the grip of various kinds of diseases. ‘Solar issue’ created a governance standstill which aggravated corruption, black marketing, hoarding and tax evasion. All these factors adversely affected revenue mobilisation on the one hand and expenditures as budget promises on the other. It is in this context that we have to analyse the budget for 2014-15. Before we examine the priorities in the budget, let us examine the performance of the major fiscal indicators for a few years:
Major fiscal indicators from 2011-12 to 2014-15 (Rupees Crore) Item/year
2011-12
2012-13
2013-14 BE
2013-14 RE
2014-15 BE
1, Revenue Receipts A, State tax revenue B, State non tax revenue C,Central Govt. Transfers
38010.4 25718.6 2592.2 9699.6
44137.3 30076.6 4198.5 9862.2
58057.9 38771.1 4921.6 14365.2
54966.85 35542.96 5613.4 13810.5
64842.4 42467.5 6337.5 16307.4
2.Non-Plan Expenditure
41754.09
48380.1
55536.1
54338.4
62616.7
3. Plan expenditure (including CSS)
9141.99
10,848.1
14540.3
13925.4
16797.3
4. Revenue Deficit
-8034.3
-9351.44
-2269.97
-6208.35
-7131.69
5. Fiscal Deficit
-12814.8
-15002.5
-11872.6
-13140.4
-14398.5
6. Total Debt Stock
89418.2
103560.8
114121.4
116577.5
131578.8
Salaries+pension+interest as per per109.8 centage of state’s own revenue
97.40
84.3
90.2
90.5
Public Debt as % of GSDP
28.36
29.6
27.1
29.9
28.3
Revenue Deficit as % of GSDP
2.61
2.68
0.54
1.54
1.53
Fiscal deficit as % of GSDP
4.07
4.29
2.82
3.26
3.10
Capital Expenditure as% of GSDP
1.54
1.64
2.32
1.76
1.60
Gross state domestic product*
3,07,906
3,49,338
4,20,479
4,02,972
4,65,073
Growth rate of GSDP
16.97
13.45
20.4
-4.16 15.35 (gr.over 2012-13)
15.4
Source: Budget in brief (various years)
BE stands for Budget Estimate
RE stands for Budget Re-estimate
When one examines the revenue receipts in table given, it is clear that all three sources of revenue receipts as per Budget Reestimate fell short of the Budget Estimate of 2013-14. As a fall out of this, government had to borrow more than budget estimate. Inspite of that, both revenues and capital expenditure fell short of budget estimate. It could also be noted that rate of growth of GSDP was -4.2% less than the budget estimate. As per the mandate presented by Fiscal Responsibility and Budget Management Act (2003), each state Government is required
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*GSDP growth at current prices
to reach revenue balance (which means zero revenue deficits) and fiscal deficit of three percent by 2014-15 budget. However, because of the fiscal slowdown in the state economy in the 2013-14, government could not attain these goals. Instead, revenue and fiscal deficits are targeted as 1.53% and 3.10% respectively of the GSDP. Why the fiscal scenario of the state is so ailing? Most important visible reason is the burgeoning revenue expenditure. Major items of revenue expenditure are salaries, pension and interest. The growth of these three togeth-
er as percentage of State’s own revenue is given in the 8th row of the table. It was 109.8% of the state’s own revenue in 2011-12, when UDF government had to meet the additional payments caused by the pay revisions of government and semi government employees in the final year of the previous government. If 5 year pay revision pattern is replaced by the Central Government pattern of 10 years, fiscal situation can be kept under control. Since, revenue mobilization fell below the target while revenue expenditures went unchecked; government could not but borrow
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forgotten promises more. Though 2013-14 budget targeted of the public debt at 27.1% of GSDP, it grew up to 29.9%. It is high time that the financial profligacy of the government and the unchecked growth in revenue expenditure are kept under control. This is urgently needed to release resources necessary for infrastructure projects like metro-rail, mono rail, super highway, Vizhinjam container terminal and a host of others. It is in the wake of all these that the budget 201415 is to be examined. The cover story declares that it gives top priority to agriculture followed by infrastructure, energy, health and education. Finance Minister has allotted Rs 964 crore to agriculture, with a view to revamping the sector by giving a face lift through high-tech agriculture. Through encouraging family farming (UN has declared 2014 as the year of family farming), crop diversification and value addition are expected to initiate a surge in the farming sector which would create additional employment and income in the farm and non farm sector. Crop insurance coverage is extended to 25 crops, which is a bold step, unheard anywhere in India. Farmers with less than 2 hectares of agriculture land are given insurance protection where 90% of the premium would be paid by the government. ‘Laptop Scheme’ for girls who are qualified for professional courses and hail from families with less than 2 hectares of agricultural land is another boost to agriculture. This will encourage farmers to retain agricultural land for agricultural purpose itself. Further, ‘laptop Scheme’ is another way of encouraging the ‘skill creation programme’ of girls.
‘Mechanization of agriculture’ has become the urgent need of the hour. Only then agriculture operations may get a face lift to the white collar status. Agriculture wages should also rise to assure a ‘decent living’ to the family. MGNEGA work may be integrated to agriculture, so that regular agriculture wage and MGNREGP wage are added together to get a boost to the family income of the agriculturist. Focus given to water harvesting may improve water use efficiency while raising the water table which is pro-environment and pro-mother earth. Sectors like infrastructure, industry, IT and health score high in the budget. While
earmarking Rs 1370.4 crore for power sector, the Finance Minister sends a message to the prospective investors that Kerala is growing towards an investment friendly state. The budget is a big boost to IT sector while getting Rs 313.33 crore as budget allocation. IT mission is properly monitored and utilized could improve the efficiency of governance on the one
hand and reducing corruption on the other. Health sector gets an attractive allocation with Rs 629.4 crore. Programmes for early detection of cancer and infertility are praise worthy. Similarly Arogya Kiranam Project, which could bear the treatment expenses of all children below the age of 18, is another milestone in the trajectory of growth of health sector. Though, skill creation programme for youth and startup capital projects are extensions from last year’s budget, the high weightage given to them is a welcome step. Though ‘gender budgeting’ is not mentioned, women get a priority in the budget. All social welfare pensions targeted to women are reasonably raised. ‘Asha’ workers, who hail from poor families and work in the grass root level, are accounted for and a substantial hike in their honorarium is effected. ‘Skill creation of women’ is given high priority while, facility is extended for women too.
Measures to augment revenue mobilisation
Tax and non tax sources are utilised to tap more revenue. However, taxes of commodities are raised in a way that most of the incidence falls on the affordable classes. While taxing the luxuries, necessaries kept untouched is a magic of taxation. Non tax revenue is an area where there is ample scope for revenue raising. But this potential is not properly utilised for various reasons. When everyone wanted to get every service subsidised, no coalition government would dare to touch these rates. However, Finance Minister had shown the courage to raise royalty from quarries. He has also raised the royalty on M sand. Yet, there are many more areas from where he could raise non tax revenue. In conclusion, it may be said that our ‘tax culture should change’. Similarly, we should hold that better service delivery is possible only if government is enriched with higher fees and other rates. While taxing the people, collection of areas committed by the traders and corporates should not be overlooked and tax evasion prevented through effective checkpost monitoring, air/rail/ road/port/enforcement co-ordination etc. (Author is member, Kerala Public Expenditure Review Committee)
Jan 31 - Feb 28, 2014 Jan 31 - Feb 28, 2014
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MONEY MANAGEMENT
The affluent too get into debt Passline News Service
T
he burden of debt is not the problem of the poor alone. Although you may have enough money now, it doesn’t mean that you may never run into debt at some time in the future. We handle money every day and cash flows into various destinations through our hands and through bank accounts. Money comes to us through various routes such as earnings, salary and loans. It goes out in ways like expenses, loan remittances etc. If the earnings are through salary and incomes from some other sources it is good. But when money comes to you from loans etc it is not always good.
Raveendran couldn’t enjoy a family outing or watch a film. Even buying dresses became a burden. Despite being rich he found himself a borrower even to buy daily necessities. How could he be saved from such a predicament? Was he splurging all his earnings? Or was he having any possessions?
He has three houses valued at Rs 3.8 crore, stock investments worth Rs 85.74 lakh, mutual funds worth Rs 3.97 lakh; Rs 4 lakh as bank deposits, Rs 8 lakh in EPF and a five-year-old car worth Rs 3.25 lakh. In short he has assets worth Rs 4.81 crore. He has no credit card. He has pawned his car for Rs 3 lakh for a short period. Pledging his property he has taken a loan of Rs 87 lakh. There is also a personal loan of Rs 36 lakh. He is in the habit of taking loans in times of need. His total loan liability comes to Rs 1.25 crore, but his net worth is Rs 3.55 crore, ie his assets surpass his debts. It is surprising that a person who has so much wealth and has such a decent salary finds himself struggling to make both ends meet.
Two years ago a person named Raveendran approached an investment consultant. Raveendran was an executive in a big corporate entity with a monthly salary of more than Rs 2.17 lakh. He had three houses in Chandigarh. Naturally he can be said to be rich. But his regret was that he couldn’t save anything. At the end of the month he is forced to borrow. His case was surprising to the consultant. We can see people with low salaries leading happy lives. They occasionally dine out and go to the cinema. They also undertake pleasure trips during vacation. Raveendran can’t accomplish these things which even a low-income man can afford. He takes no food from five-star hotels or doesn’t fly anywhere. Then where do Raveendran’s earnings disappear? One need not think that he is a spendthrift. He is not. Let’s look at his monthly income and expenses (in rupees):
Income Salary
1,77,500
Other income
60,000
Total
2,37,500
(He spends Rs 15,000 on food. Other expenses come to Rs 12,000, insurance premium is Rs 34,000 and monthly EMI of loans Rs 2,04,868). Expenses (in rupees) Items
Rs
Percentage of total income
Food
5,000
6.32
Rent
12,000
5.05
Loan EMI
2,04,868
86.26
Insurance 34,000 premium
13.32
Total 2,65,868 His monthly expenditure is Rs 28,368 more than his income, meaning that he has to borrow money to meet his expenses. No bank lends a person a loan the EMI of which comes to more than 35% of his/her monthly income. For high net worth income groups also, banks won’t sanction loans of which the EMI is more than 55% of the monthly income. In the case of Raveendran, the monthly remittance is 86.26% of the monthly earnings. It was clear that he was entangled in a debt trap.
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Jan 31 - Feb 28, 2014
To the query why he took such a large amount as personal loan his reply was casual. He said he needed money to complete the work of his third house. He was told that it was possible to finish the work without taking a fresh loan: he could enhance the present housing loan amount. But he said he was hesitant to go through all the cumbersome formalities to get this done. He thought he could pay off the personal loan in three years’ time. So he did not consider it serious that he had to pay a much higher interest rate on personal loans. On this account alone he has been paying Rs 1.09 lakh monthly. The following table will make this clearer
Loan repayment Loan
Year
Period
Though he could reduce the interest on home loan from his income for tax benefit he was not doing so. By doing this his tax burden became lighter. Taking these steps Raveendran could solve all his problems. The financial consultant also gave him tips on how to profitably invest the money he saved through the steps he took. He was also advised to be cautious in the future before investing in housing projects and other schemes. He understood the situation. There are many people like Raveendran around us. Having a lot of money alone won’t bring you happiness in life. We must also know how to manage the money well. We must take care to ensure that our liability does not exceed our income. Coordinate our expenses in such a way that we are able to save something every month. Loan remittances should not exceed 35% of our monthly income. Don’t opt for a short-term loan; prefer a long-term one. Ways of getting into debt Often people get into debt traps because they do not take into account their paying capacity. The following are the reasons why debts become traps.
• • • •
Choosing short-term periods for repayment of loans taken Fall in income Mounting expenses Increases in interest rates
In such situations we will be forced to apply for a fresh loan to pay back the existing one. This will add to our financial miseries. What should be done If you face problems in meeting financial liabilities a financial planner should be consulted or the advice of your bank sought. Each district in the state has a Financial Literacy and Credit Counselling Centre working under RBI directives. The centre will provide guidelines to exit from the debt trap. If you decide to solve any issues by yourself, prepare a unified table. You will then know your total interest on your liability and the period of repayment. First we should try to save some money. Unify all debts. Reduce expenditure. Search for more ways to earn more income.
Amount
EMI
Home loan 2004 15
12,00,000
12,000
Pooling of loans
Home loan 2004 15
20,00,000
22,000
Home loan 2006 15
55,00,000
55,000
Personal
2006 3
36,00,000
1,09,370
Car loan
2006 5
3,00,000
6,500
To pay off more than one loan at a stretch it is good to have a quantum loan. Pawn the rest of the assets for this. Make use of the loan taken to close the loans which carry higher interest rates. Normally instalments of vehicle loans, personal loans and credit card loans tilt our income-expenditure balance. If there is a housing loan, get a top- up loan for home and close the above loans. For a housing loan payback period is long and so EMI is affordable.
(yrs)
TOTAL
1.26 crore 2,04,870
How can he overcome this crisis? Realign the loans first First he converted all housing and personal loans into a 15-year housing loan. By this, the annual remittance of Rs 24,58,421 came down to Rs 15,60,669. This enabled him to save Rs 3,17,331 a year and Rs 26,444 a month. With that the EMI came down to 60% of the loan. So far he had been remitting excess amounts as income tax through a mistake in its calculation.
Curtail expenses Think of curbing expenses and ways to get out of the rut of debt. Seek methods to earn extra income. Also engage in part-time jobs, small domestic businesses etc. (Courtesy: Dhanikanaakaan Oru Margarekha (Malayalam) by Sanjeev Kumar G)
11
TAXATION
I
Tax system reform is overdue
ndia’s tax system is a labyrinth of multiple taxes, rates and legislation. It is considered to be one of the most complex tax systems in the world and is unintelligible even to the professional, not to speak of Dr Jose Sebastian the ordinary citizen. India is one of the countries with the highest degree of tax evasion. It has almost degenerated into a hide-andseek game between the tax administrators and taxpayers.
recommendations relating to corporate income tax and import duty. These measures were in line with the overall philosophy of liberalization and structural adjustment. One area where foreign investors encounter considerable difficulty is dealing with the complex and cumbersome indirect tax system. This is also considered to be one of the major factors affecting the competitiveness of Indian products in the international market. Towards reforming the indirect tax system, a series of measures have been taken in the post-
It is against this backdrop that the innovative idea put forward by the Bharatiya Janata Party assumes relevance. It has been reported that the BJP is considering abolition of nearly 30 taxes and replacing them with a single tax on bank transactions at a low rate. Whether this idea materializes or not, it should be admitted that the country is badly in need of such innovative ideas. Why is our tax system so complex and cumbersome? The answer is that revenue mobilization is not the only objective of taxation in India. Equity, employment generation, balanced regional development, promotion of specific industries or sectors are some of the other objectives. In indirect taxes like sales tax, VAT (value added tax) and excise, different rates are levied on different commodities depending upon the nature of the commodities. Thus necessaries are taxed at a lower rate, comforts at a somewhat higher rate and luxuries at the highest rates. On grounds of employment promotion, employment-oriented industries are levied lower rates of tax or given complete exemption. Tax concessions are accorded to industries located in backward regions to promote balanced regional development. To add to the complexity, the Centre and states levy different taxes, sometimes on the same tax base. Taxes are to be paid on income, consumption, production, services, capital gains, imports and so on and so forth. There are taxes to be paid to the Central, state and local governments. The complexity makes the life of honest taxpayers miserable. If they try to pay taxes honestly, they will have to incur a cost for this purpose which again is a ‘tax’ on them. They will have to hire the services of a tax consultant. It is as if the tax system has to be made more complex to create employment in the form of tax consultants! But this is a blessing in disguise for the cunning tax evaders. They evade or avoid the tax altogether in collusion with the tax administrators. Both reap the benefit from the troubled waters of a complex tax system. In the process they drag the honest taxpayers into an unfair competition. The result: the latter are also forced to take to tax evasion. It is to break this vicious circle that the tax system has to simplified. India has been on the path of tax reform but the progress has been rather slow. Tax reform measures received an impetus in the postliberalization era. The Tax Reform Committee headed by Professor Raja J Chelliah made far-reaching recommendations. A major step was the rationalization of income tax and excise duty rates. In the case of income tax, the maximum rate was brought down from 70% to 30%. The committee also made several
Committee of State Finance Ministers’ is the first official document containing the perceptions of states on GST. Incorporating the response of the Union Government on these proposals, the Empowered Committee brought out the First Discussion Paper in November 2009. This is a comprehensive document outlining the salient features of the GST model that India is going to have in the near future. Here are the salient features of India’s GST It is proposed to adopt a dual GST model--the Centre levying Central GST and the states levying state GST. It will cover all transactions of goods and services except the exempted commodities and services and those which are outside the purview of GST. Several Central, state and local taxes which are primarily in the nature of indirect taxes or levies will be subsumed by GST. The Central taxes such as central excise duty, additional excise duty, excise duty on medicinal and toilet preparations, service tax, additional custom duty known as countervailing duty, special additional duty of customs, surcharges and cesses will be subsumed by Central GST. State GST will subsume VAT/sales tax, entertainment tax, luxury tax, taxes on lottery, betting and gambling, state cesses and surcharges and entry tax.
liberalization period. The introduction of VAT in 2005 which partially replaced the complex state sales taxes was a major step. Another major pitfall of India’s tax system is that it heavily falls on the goods-producing sector. Though the services sector is the fastest-growing sector of the Indian economy contributing more than 50% of the GDP, the total service tax collection forms only less than 1% of it. The disproportionate burden on the goods-producing sector at the expense of the services sector is one factor that adversely affects the competitiveness of Indian products in the international market. This also has an equity dimension as the rich consume more services than the poor. It is now being increasingly recognized that without exploiting the untapped potential of the services sector, it is difficult for India to raise the tax-GDP ratio which is one of the lowest in the developing world. The selective taxation of services has to be replaced by a comprehensive Goods and Services Tax (GST) that covers both goods and services in a seamless manner. The changeover to GST is the logical conclusion of the tax reform process that India has initiated with the introduction of VAT in 2005. GST is hoped to integrate the tax system of the country with the global tax system.
Unfortunately, the implementation of GST has been hampered by several roadblocks. The states raised serious objections to some of the provisions of GST which they feared would eat into their fiscal autonomy. The Central Government has not been successful so far in arriving at a consensus and therefore the rollout of GST has been endlessly postponed. Now with the elections in the corner, the onus of implementing GST will lie with the new government that comes to power in May 2014. Let us hope that this will put an end to the hide-and-seek game that we have been accustomed to for so many years. (Dr Jose Sebastian is Associate Professor in the Gulati Institute of Finance and Taxation, Thiruvananthapuram)
It appeared that the experiences gathered in the process of VAT implementation would prepare the country for an early changeover to a GST regime. It must have been this confidence that prompted the Union Finance Minister to set April 1, 2010 as the date of rolling out GST. He requested the Empowered Committee of State Finance Ministers which oversaw VAT implementation to prepare a road map for implementing GST. The Empowered Committee on its part constituted a Joint Working Group (JWG) on GST. The report of the JWG entitled ‘A Model and Roadmap for Goods and Services Tax in India-Views of the Empowered Jan 31 - Feb 28, 2014
PASSLINE
12
Problems of national grid BELLING THE CHINESE CAT IS NO SOLUTION
K Vijayachandran
P
ower Ministry of Central Government had issued a policy statement in February 2005, in pursuance of section 3 of the Electricity Act-2003: Aims and objectives of this
clearances, including customs that made Chinese imports immensely attractive for the private companies.
highly erosive high ash-content of Indian coals, over which the Chinese had very little experience.
Equipment supplied by Chinese manufacturers accounted for about one-third of the 55,000 MW of capacity addition during the 11th Plan period (2007-12). Chinese suppliers have maintained their market share
These plants had operated only a year or so at the time of this CEA evaluation and it was too early to detect problems arising out of erosion by high ash-content coal, and Chinese equipment were judged to be consistent with sound engineering practices. However, numerous shortcomings arising out of the inexperience or neglect of owners and operators of the plant were highlighted by CEA. These included inadequate training of operating personnel, non-availability of O&M manuals in English and several deficiencies arising out of indifferent layout engineering. These plants were being operated for prolonged periods by Chinese personnel because of inadequate HRD investments within the country.
NATIONAL ELECTRICITY POLICY 2005 AIMS & OBJECTIVES
• Access to Electricity - Available for all households in next five years
• Availability of Power - Demand to be fully met by 2012. Energy and • • • • • •
peaking shortages to be overcome and adequate spinning reserve to be available. Supply of Reliable and Quality Power of specified standards in an efficient manner and at reasonable rates. Per capita availability of electricity to be increased to over 1000 units by 2012. Minimum lifeline consumption of 1 unit/household/day by year 2012. Financial Turnaround and Commercial Viability of Electricity Sector. Protection of consumers’ interests. Gazette notification: Ministry of Power Government of India Dated 12th February 2005
policy, as listed in this eight year old policy statement are reproduced separately as a box item. Even a cursory look at the present scenario will tell us that the country is not anywhere near reaching these declared goals and targets: be it per capita power generation, power availability, quality of grid power or financial health of the power utilities under state governments. Despite 44 % increase in the average retail price of electricity, revenue gap has further widened from 18 to 20 percent, during the last six year period. There are, now, reports that the Ministry is seriously evaluating the current situation and working hard towards a course correction. Interestingly, the national press is being persuaded to build up a story that performance of power plants imported from China is a major reason for the shortcomings. True, power equipment manufacturers of China, such as Dongfang and Shanghai Electric, have taken away large chunks of the Indian market from domestic equipment makers in recent years by offering 15-20% lower prices. Chinese suppliers also offer financing in order to lure new Indian power companies, set up by private entrepreneurs. And then, there was massive corruption as usual, at various levels, including pay-offs, kick-offs, and gold plating of name-plates as well as paidfor environmental and other statutory
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also for the equipment supplies for the 12th Plan. Central Electricity Authority (CEA) has been evaluating the performance of Chinese equipment in the
past and the first CEA study report was brought out five years ago in September 2008. This report had focused on coal fired thermal power plants, their boilers and associated equipment in particular. This five year old CEA report had dealt with the 18 power plants of Chinese origin, with a total installed capacity of 19,095 MW. Thirteen of them with a capacity of 15,195 MW were in private sector that included big names like Reliance, Adani, Sterllite and others: the balance one fourth of the imported capacity from China was accounted for by public sector. The 75 page report had investigated in some detail the widespread apprehensions about the problems arising out of the
Jan 31 - Feb 28, 2014
The first CEA study report on Chinese supplied power plant was focused on boilers and was not unfavorable to the suppliers in any manner. However, findings in the second report of CEA, brought out recently and focused on overall plant operations and plant efficiencies, are quite disquieting, especially in comparison with the performance of the long tested BHEL equipment systems under Indian conditions. CEA report found that the operating heat rate of Chinese power equipment works out to 2,719 Kilo Calorie per KWh compared to 2,520 of BHEL equipment. Higher heat rate means that a power plant is less efficient in converting fuel into electricity. Coal fired boilers need frequent oil burner support for stabilizing the coal flames, during start ups and large load fluctuations. Power plants supplied by BHEL consumed only 3.06 ml of furnace oil per KWH generation whereas the reported figure for Chinese plants was 6.13 ml. Chinese equipment scored lower than BHEL hardware on operating load factor or plant availability: Load factor of Chinese equipment averaged 57.2% during the study while it stood at 71.6% for power plants supplied by BHEL, thanks to fewer shutdowns and higher plant availability. This latest CEA study on the performance of Chinese supplied power
plants are being closely followed by detailed analysis by BHEL: It has presented an impact study on the use of Chinese equipment for power generation instead of BHEL systems. According to BP Rao, the CMD of BHEL, use of Chinese equipment is causing an annual loss of Rs. 1633 Crore because of higher coal consumption. And, the extra fuel oil bill was estimated at Rs. 2182 Crore per annum. These are the estimated costs to the national economy due to the use of Chinese equipment, in addition to economic losses due to lower plant availability. Promoters and lenders for new power plants are being advised to take into account these hidden costs while evaluating the bids for setting up new power plants. Promotion of power plants and T&D systems through global bids by Power Finance Corporation (PFC) and Department of Power, under advice by global consultants was an innovation introduced by the power sector reforms, initiated by World Bank two decades ago. These new policies have clearly failed to deliver the desired objectives and there is no point in blaming China and the power equipment that country has exported, inflicting heavy losses to our national economy. Even worse examples of the new policy inflicting serious damaged to the national economy could be cited. Forcing of super-critical technologies and the Ultra Mega Power Plants (UMPP) on India’s power sector, without any rhyme or reason, is a typical example. It is fairly well established that the so-called super-critical technology, imported from abroad at enormous costs, does not lead to savings in fuel and other operating costs commensurate with the higher capital costs involved. Some of the promoters of UMPP, like Reliance and Tatas, have now approached CEA and Central Electricity Regulatory Commission, seeking permission to hike the base prices agreed upon at the time of UMPP competitive bids. Super Thermal Power Plants at the mine heads, for the optimum utilization of our coal reserves concentrated in the North-East and an extensive T&D network to transport power across the peninsula, were seen as the backbones for electrification of the subcontinent by our planners. This was the right approach and based on the first ever energy survey of the subcontinent in 1965. True, we have succeeded in developing the
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13
AVOCATION
By R G Gireesh
“E
veryone can do the busines of apiculture because no huge investment is required to set it up. Only some boxes with bee colonies are needed,” says P Balan. Balan, who hails from Adoor taluk of Pathanamthitta district and is a former employee of the State Revenue Department, started apiculture as a passion initially. He took up this profession seriously in 2008 after his retirement from service and started experimenting with new techniques in beekeeping and honeycombing. Balan got a chance to attend a class based on apiculture and different varieties of honeybees. The classes were conducted by Christian
Agency for Rural Development (CARD) in association with Krishi Vigyan Kendra (KVK). The teachers there familiarized the participants with different and new scientific methods. His experients enabled him to find a new design for beehives to rear bees. Instead of wooden frames, he built boxes using paper frames to keep dammer bees in them. Dammer bees are harmless, stingless ones mainly found on big rocks, old walls, woods and tree holes. The refurbished dammer box which is made of light wooden material consists of thick paper rims making it light-weight and covering the bees from predators. Honey produced from dammer bees or Cherutheneecha has high medicinal values and
also can be used to treat deadly diseases like cancer. In earlier days, people used to treat all types of illnesses using honey, but today people are not well aware of the benefits of honeybee products. “First harvest can be done in 12 months. About 700 gm of honey can be harvested in a year through this method but only 400 gm is possible through traditional methods. The price of the box including the bee colony is Rs 1,750 and box without bee colony is priced at Rs 1,250 whereas the present cost of honey is Rs 2,000 a kg. An added advantage is that four different bee colonies can be replicated in the second year from a single colony. “I have been getting an income of Rs 40,000 for two years from the new technique and many people have adopted this method,” says Balan. “Insects, winged creatures and winds can help boost a garden’s yield and enhance the quality of flowers, fruits and vegetables. More than 80% of the pollination activities in the garden are performed by honeybees and are considered as the best pollination agents in the world. Therefore, having a beehive or two in your garden will make you a more successful gardener. Every house has a small garden with one or more plants with flowers, Therefore it will be a good part-time job and business if you do apiculture in your house or on the terrace,” says Balan.
opened like window-panes and the extraction of honey and the bee colony can be done through a movable wooden door which slides on a groove towards one side of the box. The box is placed on a wooden frame which is attached to an iron pipe fixed with a plastic funnel and it prevents the entry of insects into the box. The box is detachable and can be rotated in any direction. The other peculiarity of the box is that the top lid of the box is provided with removable roofing for regular monitoring of the colony; and the life span of the box is 10 years. About the dissimilarity between the new technique and the traditional method of apiculture, Balan says that many people use mud pots for bee-rearing in which the complete extraction of honey is not possible. He says he had also conducted a study on different bees which propped him to make a suitable box for dammer bees. In mud pots, there is the possibility of intrusion by ants, lizards and spiders; and also humidity is a major problem. In this new box, he has made all arrangements viable for the safety of bees and the workload of bees also has been reduced. (Details can be had from: P Balan, Athira, Kaithakkal, Anayadi P0, Adoor. Mobile: 9495836006)
Farmers of Kerala mainly practise bee-keeping or apiculture for an additional income and the notable feature of this profession is that no supplementary land space is required for beehives because this can be placed anywhere near your home or the plantations. Today many people have already turned to apiculture because it doesn’t need too much manual labour like other work; rather it is simpler and only a few hours in a week are needed to be spent on looking after bee colonies. Therefore one can make this a part-time occupation. It’s actually a good source of income for the rural and tribal farmers. This is a vast and money-spinning industry, if you go through the scope and use of honey bee and its products. Beekeeping is meant mainly for collecting honey sidelining other products like bee wax, royal jelly and propolis. Wooden boxes and mud pots were the usual and traditional methods of beekeeping by farmers. Small insects and ants which gobble honey are a threat to this business, so a flawless box should be kept which will deter the onslaught of insects. The paper rim’s top portion which has two halves can be Jan 31 - Feb 28, 2014 Jan 31 - Feb 28, 2014
PASSLINE PASSLINE
14 ISSUES
Passline News Service
T
he people of Kerala have great expectations about the Kochi metro rail project. The authorities and others directly involved in it claim that it will be a panacea for the city’s traffic problems and environmental hazards. The people are therefore keeping their fingers crossed and waiting for the chugging of the metro engine. But a small segment of the community who have been running small and medium shops on both sides
of North-Banerji Road have literally been left in the lurch. Though Kochi Metro Rail Limited (KMRL) authorities say that the displaced ones have adequately been compensated, those who were running the businesses say that the money has gone to the owners of the premises, and that they have not benefited. They say they are unable to find similar suitable locations for shops because of difficulty in arranging the huge initial deposits and in meeting the high rents demanded. With the huge interest burden on their investments, and the high salaries and taxes and other levies they are left high and dry finding it difficult to make both ends meet.
Best Compliments from
Best Compliments from
Best Compliments from
PASSLINE
Jan 31 - Feb 28, 2014
The condition of big business houses on M G Road is not different. Markets have already been crippled by the recession and high inflation for quite a long time and the chaos and confusion prevailing over the metro work has proved a double whammy for them. Muhammad Ashraf V A, President of the Kerala Merchants Union, says that after the commencement of the metro work there has been a 70% drop in the business in the shops located on M G Road. Fiftyfive shops on North-Banerji Road have been displaced as part of road widening and for the smooth laying of the rail. The Christmas and New Year business this time was alarmingly low compared with last time’s record sales, forcing many to shift their base to Edapally and Palarivattom for survival. Those who have been affected most are those who started their business after taking huge loans. They are in a fix now finding it difficult to pay the workers and repay the loans. Small shopkeepers are the worst-affected. Though they have been given compensation, the meagre amounts won’t enable them to flourish in business again. The traffic curbs and barricaded M G Road have already hit the business of shops on either side. The 4-km stretch of the road, the commercial hub of Kochi, has been under renovation since the start
of the metro work. Many leading brands which had company outlets and have already shifted from M G Road to malls and other places are also under financial stress. The unexpected drop in business has forced some to call it a day. Reshmi C R, Communication Manager of Kochi Metro, justifies the situation saying that the project is meant to clear the traffic snarls and pollution and to curtail the number of private vehicles on the road. In Delhi, more than 25% of people have stopped using their own vehicless and started using the metro services. Every year the number of vehicles on our roads is increasing tremendously making traffic control unmanageable. It is natural that development work always results in problems and difficulties for people but they must cooperate and adjust to them to successfully complete projects. A compensation of Rs 56 lakh each has been given to displaced people after proper and due calculation, assessment and inspection with the help of Kerala Industrial and Technical Consultancy Organization (KITCO). “We have been badly affected by the project, our business having slumped by more than 75%. Now M G Road doesn’t have parking space for vehicles and the available space is not allowed to be used. The dirty atmosphere created by the construction work is deterring customers from entering our hotel. The recent increase in the LPG price is also causing us big losses. We are also thinking of quitting business because we can no longer run the hotel. The crammed M G Road is not suitable for the metro rail. The adjacent Kacherippady-Shanmukham Road is wider than it and would have been more suitable for it because thousands of people throng the Subhash Park, Marine Drive, High Court etc every day,” says the owner of a hotel on M G Road. Praveen Gopakumar, Manager of Jayalakshmi Silks on M G Road, says: “We are providing parking facility for our customers and therefore we are not affected much by the project. However there are shops on the road which don’t have parking space and they are affected severerly”. The project which has been started with the aim of providing a reliable and efficient rapid transit system for commuters and with a vision to make available a world-class metro rail system that enhances the quality of life for the citizens of Kochi has now become a major problem for merchants of Kochi.
15
NEW CURRENCY
Bitcoin – THE CYBER CURRENCY I
P D JOHNNY
n ancient times, the barter system was replaced by coins initially, and thereafter for the sake of convenience, by paper currency notes to facilitate money transactions like sale and purchase of commodities and services. During the last few decades, this currency system also has been giving way, gradually, for plastic money like credit, debit and smart cards obviating the need to carry hard cash for the financial needs of people. Lately, rapid changes are taking place in this mode of currency also. In this cyber age, the quest for quicker and easier modes for money transactions is ever growing and creative minds are exploring newer areas and innovative ideas in financial services. The latest innovation in the modes of financial transactions is Bitcoin. Unlike other currencies, Bitcoin does not have an abstract, physical form and not issued or backed by the central banks of any country. Bereft of any territorial barriers, its acceptability is not restricted to any particular country. We can call it “universal currency” and being a cyber product, it is also described as ‘crypto-currency’ existing only in the bits stored in the electronic wallets of computers. It can be said to be similar to financial instruments like equity shares, bonds or debentures maintained in electronic form and can be traded and exchanged against real money through on-line transactions. This form of electronic money is gradually gaining acceptability around the world and, in course of time, might pose a threat to other currencies/cards in physical form and even replace the latter. The origin of Bitcoin can be traced to as recently as the year 2009 when a Japanese computer wizard called Satoshi Nakamoto [incidentally, his identity is yet to be confirmed], felt the need for a purely independent and neutral form of currency which can be used universally without support of any particular country [like dollar in USA] or group of countries {like euro in European Union] and not restricting its use to any one country or continent. This novel idea dawned on Nakamoto in the aftermath of setbacks suffered by almost all major currencies as a fall-out of financial crisis faced by American and European economies in 2008. He is said to have minted about 21 million Bitcoins to meet the future
demand during the next two decades. It is estimated that about half of this volume has already been traded and acquired by various entities around the world. The value of Bitcoin is not static – but is governed by the market forces of demand and supply – here the supply is restricted but the demand can go up resulting in increase in its value. The value of one unit of Bitcoin, when it got going in 2011, was just $ 2, which rose to $20 towards end of that year. Its value further jumped to $266 in April 2013 and was till recently, hovering around $1000. Owing to increased demand globally, the value multiplied manifold during a very short period allegedly because of speculative activities. Bank of America, in its research report brought out recently, predicted further jump in the value of one unit of Bitcoin to around $1300 very shortly. The Bitcoin exchanges trade and monitor the supply of the currency and the coins acquired by an entity can be further sold or exchanged through these agencies only. At present, this created money is being used in many countries for various types of money transactions. It was even reported that in 2011, when the major players in money exchange [Visa, Mastercard, Paypal, etc] blocked donations to the outlawed news agency Wikileaks, it was receiving financial assistance in Bitcoins In India, its use is in a very nascent stage and its users are concentrated in cyber cities like BangaIore. But transactions in Bitcoins are gaining more popularity in other Asian countries like China and Japan where exchanges for Bitcoins are functioning. BTC in China and Mount Gox in Japan are two such exchanges which trade in Bitcoins. While this virtual currency is gaining acceptance and popularity in several countries, some of the major central banks are skeptical about the new entrant in the financial sphere and have expressed apprehensions about its future. China, for example, has barred the handling of Bitcoins by the banks in that country, forcing the operators to move to Hong Kong for dealings in Chinese Yuan. The speculative activity resulted in fetching higher exchange value for Bitcoins in yuan as compared
to that in US dollars, giving rise to arbitrage in these currencies. High level of fluctuations in the exchange value of the cyber currency against yuan were reported recently. Alarmed at these undesirable developments, some strict measures by Chinese central bank to enforce discipline have, however, brought the situation to some normalcy. Bank of France, the French central bank, too has warned against its use considering the risks involved – it is highly volatile and unregulated. The European Union Banking Authority too, warned the banks in their member countries to be cautious in dealing in Bitcoins, highlighting the risks involved in buying, holding or trading in virtual currencies. On the other hand, this new form of virtual currency has found a staunch supporter in US Federal Reserve Chairman Ben Bernanke who took a more positive step towards its use for financial transactions. The Bank of America, in its recent research report, said that the digital currency could be a major contender to other types of online money-transfer providers. The report goes on to add that, as a medium of exchange, Bitcoin has clear potential for growth. The chief of Kentucky Police in US preferred to be paid in bitcoins. At the same time, the US Federal Election Commission stated that the political parties in that country cannot accept donations, etc. in Bitcoins, citing the possibility of foreign or anonymous donations, which is illegal, flowing to the candidates or political groups. Though the Chinese central bank has forbidden the banks from handling Bitcoins, its eastern province of Zhejiang allowed the operators to trade that currency like equity. Contrasting news from China itself is that the police have detained three people operating an on-line trading platform, as they are suspected of stealing investors’ assets. The largest private university in Greece, University of Nicosia, indicated its willingness to accept Bitcoins for tuition fees. Governments of some countries have expressed concern over widespread use of Bitcoins as it is not only unregulated but can also be manipulated or used for money-laundering, besides being susceptible to hacking.
Recently, the US senate launched an inquiry against some persons who illegally minted Bitcoins worth $ 1 million. Although Bitcoin has not been greeted warmly by Indian money market, its acceptance has been slowly rising. The Indian stake-holders have woken up to the need for our own version of digital currency for circulation in India. Some of them have introduced ‘Laxmicoin’, following the footsteps of ‘Buttercoin’ in United States. The first Bitcoin conference, convened on 14 December 2013 in Bangalore by digital currency awareness organization CoinMonk, discussed the steps to convince the Government of India and Reserve Bank of India on the need for recognition as it could be developed as a valuable financial innovation, and not necessarily as an avenue for money laundering or other illegal activities like procurement of drugs. The legal aspects of the trading of the new currency were also discussed. It is also opined that the cyber currency could be developed as an effective tool for remittances. Arguments in its favour also include its potential use for ensuring financial inclusion in unbanked rural areas in the country. After a brief silence, the banking regulator RBI responded negatively in the form of an advisory on 24 December 2013, warning the general public against dealing in virtual currencies like Bitcoins in view of the potential financial, legal and security related risks. Issue of RBI advisory caused instantaneous ripples among the operators in the country and many of them started folding up. Earlier, some bankers had opined that in case the regulatory agency permits, the experiment with Bitcoins would be worth trying. Despite reservations expressed by various quarters, the first domestic exchange for trading in Bitcoins was earlier planned to start functioning in India by March next. It would be interesting to watch further developments in the matter in the near future. The advent of innovative electronic currency has generated enough heat among the money markets internationally. Arguments, both in favour and against the new entrant as also views on the prospects of its future, are forthcoming from concerned agencies. The genuineness and legitimacy of this innovation is yet to pass the test of time and therefore, the apprehensions raised as also prospects viewed by the stake-holders and regulators, need in-depth analysis and scrutiny, before it is universally recognized, accepted and widely used
Jan 31 - Feb 28, 2014
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16
BANKING LICENCE
New banks: Game changers or mere clones? T
he decks for the birth of new banks in India have been cleared. The latest cut-off time set by the Reserve Bank of India is JanuK.S. George ary 2014 to declare a maximum of 10 out of the initial numbers of 26 applicants. Value Industries, a unit of diversified conglomerate Videocon Industries Ltd, had withdrawn its application earlier and Tata Sons, one of the forerunners in the foray, has also pulled out citing the current financial services operating model best supports the needs of the Tata Group’s domestic and overseas strategy and provides adequate operating flexibility to its companies. Muthoot Finance is the lone applicant from Kerala. The applicants for the new banking
licences are players from diversified fields--NBFCs, corporate entities, microfinance institutions and public sector units like India Post, IFCI and LIC Home Finance. For the speedy disposal and scrutiny of applications RBI has set up an expert panel headed by Bimal Jalan, former RBI Governor. The panel consists of eminent highprofiled personalities. It is now pertinent to look at the present banking system and the impact which the new entrants may create. In the post-independent era the Indian Government was seriously advocating nationalization of all important services in the country. The first nationalization of banks in India was of the Imperial Bank of India which was renamed State Bank of India in 1955. In 1960, seven state banks were nationalized and made subsidiaries of SBI. As the steps taken to ensure banking services to the common man did not bring the expected results, in
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In the past 20 years RBI has licensed 12 private banks in two phases. Ten banks were licensed on the basis of guidelines issued in January 1993. The guidelines were revised in January 2001. Kotak Mahindra Bank and YES Bank were the last two entities to get licences in 2003-04. Global Trust Bank (GTB) was merged with OBC. Three others--Centurian Bank, Times Bank and Bank of Punjab--ultimately got merged in HDFC Bank. Out of our 1.3 billion population, a majority of the rural population, are outside the ambit of the banking system. The Government and RBI are seeking new banking models in the wake of the proposal to make all the payments, including subsidies, grants and concessions from the Government to citizens, through banks to improve financial inclusion and to avoid any misuse of Government machinery. As the present banking system has failed to penetrate to the rural population new banks are expected to resolve the problem to a large extent. While hectic activities are on at RBI for issue of licences, the people connected with the banking industry are abuzz with a lot of expectations and more apprehensions. P.Chidambaram, Finance Minister, hopes that some of the new banks would come up at least with innovative and different models of banking to meet the needs of specific segments of people. He expects that the new banks will not act as clones of existing ones. He asserts that we need different types of banks--banks for people in tribal areas, especially in the North East, banks for the urban poor, farmer families and women exclusively. Corporates can raise funds through many channels, but it is really the small and medium enterprises, small borrowers and individuals who are in need of access to banking channels for funds. RBI Governor Raghuram Rajan, at the last Bancon said that entry of new banks, branch expansion and encouraging new varieties of banks were ways of strengthening the banking structure. To expand the reach of banking, RBI was considering making the licensing process more frequent and allowing free entry of banks as and when necessary. The parliamentary panel has expressed concerns and noted that since
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July 1979, 14 more banks were nationalized followed by six more in 1980. Of these, New Bank of India was acquired by Punjab National Bank in 1993. No new banking licences were issued till 1993, ie till the onset of the liberalization regime.
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there is no such practice to give bank licences to corporate houses anywhere in the world, India should not be an exception. It has objected to the RBI’s ‘fit and proper’ criterion, saying it is discriminatory as it gives discretionary powers to the apex bank to accept or reject an application based on certain undefined parameters like scrutiny by the agencies like CBI, ED or the Income Tax department. The members insist that the guidelines issued in 2001 should be the basis for issuing new bank licences. [Bank staff unions vehemently oppose the move to grant banking licences to private entities as they fear that this will lead to “profiteering” and is “inimical” to the interest of the country. Private banks’ business houses will be not only harmful to the country but they will also make banking very costly. This will result in ignoring the priority sector and will also lead to profiteering as it will be the sole motive of corporates. As the Indian banks deal with more than Rs 70 lakh crore of public money as deposits, the country cannot afford to liberalize its regulations. The experience of the US and other countries shows that liberalized banking regulations have led to crises and collapse of banks. The guidelines for licensing of new banks have laid out in detail the type of bank that applicants are required to build. Everything, from urban to rural branch ratios, technology, governance, structure, products is prescribed either in generic or specific terms. The leeway to create a differentiated model is very limited. While some applicants may actually be able to come up with game-changing ideas to do viable inclusive banking, some may want to create their niche in other segments. The discussion around differentiated licensing may provide hopes of a better fit between the aspirations of a promoter institution and the business model of the bank. Even for a sincereapplicant lack of flexibility on liability side distribution is a big handicap to developing cost-effective models. Further, some of the profitable NBFCs have to abandon their present business model for an uncertain banking model. The proposal of different rules for new banks has been objected to by existing banks . In fact many big NBFCs and corporates did not apply for the banking licence, maybe for various reasons. The new banks, according to present norms, have to keep an SLR (statutory liquidity ratio) of 23% from day one. They should also maintain a CRR (cash reserve ratio) of 3%.To that extent there will be reduction in the de-
17 ployable funds.To add to the woes, new banks will have to take into account the priority sector loans since the very purpose of new licenses is associated with the need to expand the idea of financial inclusion.
It will be a genuine question whether the differentiated models can ensure that new banks will cater to the neglected sectors with costs affordable to the target group so that the purpose of financial inclusion can be achieved. We should not expect that the aspirants are seeking licence for pursuing charity though one of the applicants (Chandigarh-based KC Land & Finance) claims that it is foraying into the banking sector with a philanthropic purpose. According to the general perception, the new banks should make reasonable profits, much required for fundamental strength and sustainability. Otherwise the Government should subsidize those businesses which have an inherent loss proposition. In this connection we have to appreci-
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ate the concerns of the existing banks also. IDFC and LIC Housing stand a good chance of securing banking licences as they meet most of the cen-
tral bank’s requirements, backed by their sound business model. The Department of Posts (DOP) has already requested the Government.to provide Rs 1,900 crore to set up a bank. Though it has 1,54,822 branches as of March 31, 2013 (90% in rural areas) it is proposed to start 50 bank branches in the first year and to reach 150 in five years. If real-time banking services through the vast postal network is to be materialized, infrastructure cost will be very huge and will not be feasible. It is a question whether infrastructurefinancing NBFCs will be able to do justice to the retail segment as it will be an entirely new area for them.
maximization of profit has been in their agenda. So it is to be seen whether they will come up to the expectations. The broking companies are also not a good option. Non-banking finance companies in the recent past have given tough competition to banks. Many NBFCs have wide networks especially in rural areas. As they are led by profit maximization we may not expect banking products from them at affordable cost. The measures to regulate NBFCs to protect the interest of the general public have not been sufficient and hence RBI may consider bringing them into better regulated regime of banks. At present NBFCs pay meagre compensation to their branch-level staff forcing them to garner more funds to earn incentives. Such a model will not suit banks. Of course the successful applicants will be in a very advantageous position in many areas especially in technology. CBS (Core Banking Solution) has well stabilized in India to support various products rolled out by banks. The new banks can purchase both the hardware and software at lower cost involvement. Regarding the requirement of personnel it is likely they will poach
the experts from the existing banks. For the operating staff also, they can get experienced and young staff from the existing banks as the young generation do not have any affinity to continue with any particular employer. No doubt the new banks will be forced to offer attractive compensation. This will bring some crisis for the existing banks who are even otherwise experiencing difficulties due to mass retirements of staff.(There were mass recruitments in the 1970s and they are in retirement line). The entry of new banks will definitely bring new technological innovations to the sector to sustain the margins which will lead to some competition in the industry. Innovations will be necessary to keep banks viable. However it is very difficult to think that with the additions of some banks there will be much-expected changes in the economy, since about 80% of the banking business is with public sector banks. The Government should take the responsibility to make them more efficient and to expand their reach to more rural areas. Otherwise the present exercise will be in vain. (The author is former General Manager of South Indian Bank)
Microfinance institutions have not so far served the intended purpose as
New Indian Power Grid
technologies for large unit sizes and our T&D system has undergone big expansions, in terms of transmission technologies and new transformation capacities. High Voltage DC (HVDC) transmission systems and even large capacities dedicated to Inter-Regional transmission have been created. Despite all the massive investments in T&D gear, a reliable national grid or even regional grids of reasonable quality remain a far cry. Massive breakdowns as recently experienced in the Delhi region are of common occurrence. Even the structural reforms and the creation of numerous regulatory bodies at various levels have not helped us to improve the quality of our power grid. The latest Load Generation Balance Report (LBGR) of CEA for 2013-14 had lamented, “19 States/ UTs would have energy deficit and 22 States/UTs would have peak deficit of varying degrees. It may also be
seen that 15 States/ UTs would have net surplus energy and 12 States/UTs would have peak surplus on annual basis.” A “New Indian Power Grid” without the Southern Grid had reportedly come into virtual existence already, but the target date for full integration gets shifted indefinitely. Indifferent performance of the T&D gear and related technologies imported from other countries in an unplanned manner, and wide-spread corruption and inefficiencies are disrupting the cost-effective development of India’s national power grid. It is getting increasingly clear that there is no technological solution for corruption at the bureaucratic and political levels. The reported moves to discipline Chinese imports are unlikely to solve the serious imbalances that have crept into our power system due to years of unplanned growth and lack of coordination at the national level Jan 31 - Feb 28, 2014
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PROSPECTS iSSUES
Dr V K Vijayakumar
With interest rates ruling high, revival in growth would be difficult. However, early trends in 2014 indicate falling vegetable prices. This welcome trend can be extended to food grains if the government decides to release around 10 millions of food grains in the open market. Since the 72 million tonnes of food grains in the grain buffer stock is substantially higher than what is normally required, this release can be easily done. Will the government rise to the occasion?
T
he Nobel laureate economist George Stigler once famously remarked that “abnormal is when everything is normal.” Going by Stigler’s view 2013 was very abnormal for the global economy since things were rather quiet in 2013 after the roller coaster rides witnessed in financial markets and the economy following the global financial meltdown of 2008 and the Great Recession that followed. There are clear signs of financial stability and recovery in economic growth at the dawn of 2014. Will this be a false dawn? Will global economic growth gather momentum? What are the prospects for Indian economy? These are the relevant questions. The Great Recession of 2008 was the worst economic crisis since the Great Depression of 1930s. The crisis was aggravated and prolonged by the euro-crisis that threatened to break up the euro zone in a disruptive way. The Tsunami that wreaked havoc in Japan was another major jolt to the global economy. Emerging Markets that quickly recovered from the Great Recession could not sustain that recovery when the stimulus that powered that recovery ran out. Indian economy slumped to a decade low growth rate of 5 % in 2012-13.
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2014 is likely to usher in global economic recovery and stability in markets. According to the IMF, global GDP growth is likely to recover to 3.6% after the poor 2.9 % in 2013. But the drivers of growth will be the Developed Markets and not the Emerging Markets. US is likely to rebound with a growth rate of 2.5 % powered by strong private demand, which in turn, is supported by recovery in housing markets and falling unemployment. The buoyancy in the stock market is expected to play a major role in demand revival via the wealth effect. The stock market boom (Dow Jones rose by 26 % in 2013) and rising home prices have added $ 6 trillion to the US household wealth in 2013. This, apart from being a major fillip to the US economy, can also be a driver for the global economy since US is the largest importer in the world. Indian IT industry will be a major beneficiary of this US turn around. In Europe, things are not so rosy. Even though policy actions have reduced major risks and stabilized financial markets, growth recovery is lacklustre. Growth in peripheral Europe is still constrained by credit bottlenecks. The Euro Zone is likely to recover from the prolonged recession and post a growth rate of 1% in 2014. World’s third largest economy, Japan, had a sterling 2013. Ending nearly two decades of economic stagnation, Japanese economy posted an impressive growth of 2 % in 2013. It was the
Jan 31 - Feb 28, 2014 Jan 31 - Feb 28, 2014
fiscal stimulus and monetary easing under ‘Abenomics’ that made this impressive turn around possible. China is an area of concern. There are financial stability issues in China and the NPAs of the banking system are horrendous. According to the IMF, Chinese growth is likely to decelerate to 7.25 % in 2014. This is likely to keep commodity prices, particularly metal prices, under check. Emerging Markets and Developing Economies are likely to post a growth rate of 5% in 2014, up from 4.5 % in 2013. Within this group India, Indonesia, Taiwan and Sub Saharan Africa are likely to recover while Middle East, North Africa, Pakistan and Afghanistan are likely to struggle. The Indian economy is showing signs of improvement. Growth has picked up from 4.4% in Q1 to 4.8% in Q2 and is likely to exceed 5% in Q3 and Q4 of FY2014. Corporate earnings in Q2 were better than analysts’ expectations. CAD (likely to be less than $50 billion in FY2014 against $ 88 billion in FY2013) is under control and consequently the rupee is stable even after the taper announcement by the US Central Bank. The CCI has cleared projects worth rupees 4 lakh crores clearing the way for revival of the investment cycle. Public sector investment has picked up; but there are no signs of revival in private sector investment. Private sector is waiting for
the outcome of elections before taking a call on committing capital. Stubborn inflation continues to be the Achilles heel of the Indian macro economy. High retail inflation (11.24% in November) and prohibitive food inflation pre-empts a cut in interest rates. With interest rates ruling high, revival in growth would be difficult. However, early trends in 2014 indicate falling vegetable prices. This welcome trend can be extended to food grains if the government decides to release around 10 millions of food grains in the open market. Since the 72 million tonnes of food grains in the grain buffer stock is substantially higher than what is normally required, this release can be easily done. Will the government rise to the occasion? One event in 2014 that will influence, nay determine, the future of the Indian economy in the medium term will be the outcome of the general elections. If the elections produce a strong and stable government, that will provide the perfect setting for the revival of investor confidence and the consequent uptrend in the economy. On the other hand, if the elections throw up a badly fractured verdict, the new government will be weak and unstable and the consequences of such an outcome will be disastrous for the economy. Let us hope for the best. (The author is Investment Strategist, Geojit BNP Paribas)
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COSTUMES
Designing haute couture for the shoot C
ostume designers, playing their role behind the screen, exhibit their talent and skill through creative work for cameras. These deft hands give new dimensions to the players by selecting apt costumes matching each frame of the films. Designing costumes for a character in a film is like giving life to a character in every sense. Costume designers have a pivotal role in making a film more appealing to the audience. We might have noticed the costumes of many players on the screens, and some of them, off the screens, later as a trend-setter among the public, especially youths. Times have changed. Like any other folk, costume designers have emerged in the contemporary world with a variety of new technological inventions. Designing a costume is a difficult task because you have to change your mindset and increase ability “It was a great experience working with Sobhana Madam in Thira. She has always been a role model for me and I have always respected her acting and her personality,”says Sameera. off and on to concentrate on the assigned work as we have seen in the Saint’s costume in the popular film Pranchiyettan and the Saint, one of the toughest jobs a costume-designer can handle. Therefore, it’s appropriate to introduce here the protagonist of various advertisement films and movies, 30-year-old Sameera Saneesh, who made her debut in the Malayalam hit film Daddy Cool. Sameera hails from Kochi. After graduating from Bharata Mata College, Thrikkakara, she learnt fashion designing at the National Institute of Fashion Designing (NIFD), Panampilly Nagar, Kochi. While studying fashion designing, she got many offers to design haute couture for ad films. Her work has already etched some designs in our fashion minds and become a topic of discussion among today’s youth. On the occasion of the 100th anniversary of the Malayalam film industry, this pretty woman’s name can be enlisted as a promising designer in the annals of costume designs in the film industry. Sameera started her career working with ad films. After she landed in this field, a slew of opportunities came her way. Soundarya Silks was the first advertisement film she started with and then designed for
Seemas, which was shot in Mysore Palace with five models. This boosted her image. When these ads and her designs drew public attention, a hue of offers for costume designing in more and more ad ventures came her way. Some of her famous ads are those of Kalyan Silks (Prithviraj), Dhathri (Kavya Madhavan, Nithya Menon and Samyuktha Varma), Bheema (Richa Panai), Nirapara (Kavya Madhavan) and VKC (Kavya Madhavan). She has so far designed costumes for 1,000 ads and 50 films. The unforgettable moment in her life was when she was candidly acclaimed by Mamta Mohandas for the work she did for the film Katha Thudarunnu. Mamta hugged her and patted her for the costumes she designed for her in the film. Some of the movies for which she worked were income grossers at the box office, including Aagathan, Katha Thudarunnu, Daddy Cool, Arjunan Saakshi, Pranchiyettan and the Saint, In Ghost House Inn, Payyans, Best Actor, Malarvaadi Arts Club, Salt n’ Pepper, Chappa Kurishu and Pranayam.
Indian Panorama section of the Goa International Film Festival-2009. Sameera says that for every film, plot and characters differ. Therefore, before designing costume for a character, she becomes thorough with the script. For the past nine years, she has been working for ad films and for four years in the cine world. She got the best costume designer award for the Malayalam hits Pranchiyettan and the Saint, Pranayam, Indian Rupee and Chappakurishu.
One can see all types of trendsetters in her design, tickling the dress sense of today’s youth to covet and clad. Examples are the T-shirts used by Mammootty in Daddy Cool, the churidar set in ThattathinMarayathu, the skirts used by Mythili in Salt n’Pepper, Jayaprada’s modest saris in Pranayam and matching saris used by Sobhana in Thira. “It was a great experience working with Sobhana Madam in Thira. She has always been a role model for me and I have always respected her acting and her personality,”says Sameera. She says costume designing in movies and ad films is entirely different. “In movies, we are designing costumes fit for the characters but in ads preference is given for fashions and styles rather than characters, and characters in ads are very rare.” “I collect materials needed for designing attire from different shops. We have a unit of four tailors, and if more than three costumes are needed additional 15 tailors are employed,” she says. Some latest films for which she has designed costumes are Ezhu Sundararathrikal, Om Shanthi Osana, Pakida and 1983. Some upcoming movies for which she is working include Praise the Lord, Unakkahe Vazhkiren, Gangster and Megham. Sameera’s first stint with Bollywood was White Tiger directed by Aijaz Khan, which was screened at the
Sameera with husband Saneesh “Sabyasachi Mukherjee is my favourite designer because I love the colours he chooses and the way he designs the costumes which have inspired me a lot. Whatever I have accomplished is entirely due to the support and encouragement I have received from my husband, Saneesh, an engineer, and my parents, Ibrahim and Jameela, Without them I wouldn’t have reached here,” she says Soorya Surendran Jan 31 - Feb 28, 2014
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KMA meet will focus on ‘managing people, planet and profit’
“A
chieving success in the modern world has become a threestringed tightrope walk. Unlike in the past, today the ability to make profits is not the only criterion to assess an industry or entrepreneur’s strength or weakness. There should be a proper balance among people,the planet and profit. This is the global trend and it is slowly but firmly coming to India and to Kerala.
This, of course, will be a challenge to our corporates and it should be tackled properly. It is in this context that the Kerala P Premchand Management Association (KMA), the oldest management association in the country, has chosen “Enabling India Inc, Exploring Opportunities’ as its main theme for its flagship event, the 33rd Annual Convention 2014,” said
MBA
P Premchand, Convention Committee Chairman in Kochi the other day. “To succeed in the balancing act of managing people, planet and profit in
KMA conventions have always provided the indispensable forum to deliberate and discuss various contemporary issues that affect business and industry. KMA is today an umbrella organization of managers from large corporates to small business houses. business, technological facilitation has to be achieved in enterprises. Technology is the catalyst for wholesale power shifts between sectors and within sectors, not only in IT and BT but in all sectors of industry. Our constant challenge, as management professionals, is to interpret the direction of longterm trends and current events and to understand the opportunities and
(2 Year Full Time)
risks they create. This year’s theme essentially focuses on the impending need to enable and empower India Inc, currently plagued by multifarious challenges, by exploring and identifying new opportunities and methodologies”, he said.
The convention is scheduled to be held on February 6 and 7, 2014, at Le Meridien International Convention Centre, Kochi. Kapil Sibal, Union Minister for Communications and Information Technology and Law and Justice, will be the chief guest at the valedictory function and Dr Kavuru Sambasiva Rao, Union Minister of Textiles, the chief guest at the convention. T K A Nair, Adviser to the Prime Minister, will deliver S Rajmohan the special theme address and S Vardarajan, Chairman and Managing Director, Bharat Petroleum Corporation Ltd, will be the keynote speaker. The guest of honour will be Dr Preetha Reddy, President of AIMA and Managing Director of Apollo Hospitals Enterprises Ltd, and felicitation by K S Jamestin, Director-HR, ONGC. “The annual convention is an eagerly awaited event among the management community, which has been successfully growing in size and stature year after year. KMA conventions have always provided the indispensable forum to deliberate and discuss various contemporary issues that affect business and industry. KMA is today an umbrella organization of managers from large corporates to small business houses. It has grown to become a forum where people from the management cadre meet, share their knowledge and experiences and participate in a variety of activities,” said S Rajmohan, KMA President. In the inaugural session some of the best intellects from the Government and corporate India will participate. The Management Leadership Awards 2014 will also be announced. Day two of the convention comprises two technical sessions and a special session, where distinguished speakers will be presenting papers and addressing the audience on specific areas of interest to management. The first technical session will be on the subject ‘Walking the Talk--Adhering to Values and Governance’. This session will be handled by N R Panicker, Chairman and CEO of Accel Frontline Limited. Amar Babu, Manag-
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ing Director of Lenovo India Pvt Ltd, and N Balachandran, Group Director- Human Resources, Cafe Coffee Day, will be the speakers. The second technical session which will be focusing on the topic ‘Delivering Quality and Economic Value of Customers’ will be managed by V K Mathews, Executive Chairman of IBS Group of Companies.
The speakers will be R Ramakrishnan, Vice-Chairman, Joint MD and Group CEO, Polycab Wires Pvt Ltd, and P S Nair, CEO-Corporate (Airport Sector), GMR Group. Prabhu Chawla, Editorial Director of The New Indian Express Group, is the speaker for the special session which will have the topic ‘Creating a Balanced Business Model for the People, Planet and Profit’. The special session will comprise an hour-long address by the speaker who is a well- known political journalist followed by a detailed interaction with the audience. Kapil Sibal will address the participants in the enJibu Paul suing valedictory function which will also feature some of the best corporate chieftains sharing their thoughts, such as Sridhar Thiruvengadam, Chief Operating Officer of Cognizant Technology Solutions; Krishnakumar Natarajan, Chairman-NASSCOM and CEO and MD, Mindtree Ltd; Dr V A Joseph, CEO and MD of South Indian Bank; and V K Mathews. “The valedictory function will witness two sets of awards being presented to the winning companies in a number of defined areas. For the last three years KMA has been giving KMA-BPCL Excellence Awards to corporates to recognize excellence in five areas--in-house magazine, technological innovations implemented or initiated, CSR activities undertaken, for innovations in HR policies and green initiatives implemented. The second set is KMA-NASSCOM IT Awards given in four categories--Most Promising Startup, IT User Award, IT Leadership Award and IT Innovation award. Both Good awards will be given away by the chief guests of the valedictory function”, said Jibu Paul, Secretary, KMA.
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BMIM: B
harata Mata Institute of Management (BMIM) of Kochi, one of the leading B-schools in Kerala, thinks differently and acts differently in its approach to managerial education and training. It is not simply nurturing economy-oriented managers but grooming socially committed human beings. Unlike most well-known B-schools which produce just management robots, BMIM engages itself in shaping socially committed management professionals. And the college knows that bringing out socially committed managers is just like extracting diamond from coal. But this is what it has been doing since its establishment in 2005. In this era of globalization where the economy is the supreme power for sustainable development, management experts serve as an axis power. The development of industries and the economy is vested in the hands of management professionals. Analysing each minute change in the economy and creating new tactics for devel-
B-school for socially committed managers
opment are not easy tasks in a competitive economy. A successful management expert is the outcome of an experienced management resource. BMIM has been established to serve as a centre for training future managerial experts. BMIM, under the decades-old Bharata Mata College, is affiliated to Mahatma Gandhi University, Kottayam, and approved by the All India Council for Technical Education (AICTE). A nationally accredited institution of higher learning, BMIM is owned and managed by the archdiocese of Ernakulam-Angamaly.
ties, BMIM provides the best ambience for nurturing and nourishing entrepreneurial spirit among its students. ``BMIM believes that what human mind can conceive can surely be achieved. We are holistic in whatever we do. We empower our students to achieve more. Our watchword is flexibility, planning, patience, commitment, humility and networking. We give comprehensive training to students with special emphasis on making them responsible citizens having a secular outlook, moral values and abiding faith in God expressed in active concern for others,” says Rev Dr Varghese K V, Director of BMIM, about the institution’s secret of success.
Hemmed in on all sides by a developed township of Greater Kochi, proximity to MNCs and other compathe industrial hub of Kerala nies like Max New York Life backed by the prestigious Ltd, Reliance Telecom, Apollo Smart City, nearness to Tyres Ltd and Tata-AIG Life the Cochin International are the college’s Airport at Nedumindustry partners. bassery—with all these facilities and Rev Dr Varghese Kalaparambath A dynamic and vibrant placement future opportuni-
cell guarantees 100% job assurance. The coaching given is meant to create managers with a wide vision of social commitment and humanitarian considerations for fellow beings. The experienced faculty members also focus on shaping the students into first-rate citizens, apart from providing the usual curriculum-oriented training. They also help them acquire soft skills. Thus BMIM is preparing for a revolution in the field of management studies with a different approach to training students. “Today’s students are tomorrow’s citizens. The future of the nation should be safe in their hands. It does not matter whether the students are from management or technology wings. Social commitment and a humanitarian approach go a long way in making good citizens. BMIM’s role is to help its students become good citizens. We want to make the coaching that we give a brand in itself,” this is what the college says
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SNGIST
The institute is a cornerstone for academic success and achievements not just for students but also at the faculty level. The alchemy of success here is simple: the institute retains and attracts great faculty, builds distinctive programmes, pulls-in talented students, graduates them on time, and places them in exciting careers whilst continuously engaging with the devoted alumni.
T
he premier business school Sree Narayana Guru Institute of Science and Technology (SNGIST) shapes up ready professionals for the new-age business world. Affiliated to Mahatma Gandhi University, Kottayam, Kerala, SNGIST is located at Thekket-
shapes up professionals for new-age business world
The alchemy of success
Since its establishment, SNGIST has evolved into an institute that produces prominent business professionals.
The driving methodology
Driven by the principle of experience learning, the college is one of its kind. This is a living learning world that consists of the next generation of business leaders guided by a wealth of quality individuals who advance the students to be experts in their chosen concentrations.
A campus of goodness
With all the modern academic facilities such as labs, multi-media centre, library, sports and recreation facilities like basket ball, volleyball, shuttle badminton courts, the campus welcomes right attitude and true learning.
A holistic path At SNGIST one day in a week is dedicated for activities like psychological tests, case hazham, on the way analysis, presentations, roleto Kochi International plays and sensitivity analysis Airport, with all amethat aim towards an overall nities at reach. The enhancement of the individual. institute is owned and Right attitude, team spirit, good managed by the Gugrooming with etiquette creates rudeva Trust. A board smart professionals for the inof fifteen trustees addustry. The overall personality ministers the Trust Dr K S Divakaran Nair of the person plays a key role with the main objective Director in giving in the right output and of establishing a cenenergy. The institute takes care of evtre of excellence in education, based ery little matter that is required to make on the preachings and philosophies ready professionals. Here, every indiof Sree Narayana Guru. The mission of SNGIST is represented through the core values- Competence: The sum of Studying at SNGIST is not knowledge and skills, Confidence: To just about education, it is about think critically about performance and growth in all the areas of your compare oneself and Compassion: personal and professional life. Empathy and social conscience. The institute offers MBA, MCA and Engineering courses. vidual and their abilities are well taken SNGIST is an institute that applies care of. its wisdom to understand the business At SNGIST, a great deal of attenenvironment. Here, students undergo tion is delivered to every facet of learnseveral sessions of seminars and reing. It is because of this, the institute search initiatives that keeps them updated with the world’s governmental and business attitudes. The faculty, the industry persons and the alumni provide a direct link to the region’s business community and renowned business people, giving the students an opportunity to understand the global business scenario.
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has evolved some of the best practices in training and career development. All the faculty members are selected from amongst the finest professionals and the courses are updated to reflect the needs of the industry. Studying at SNGIST is not just about education, it is about growth in all the areas of your personal and professional life. Therefore, no matter which programme you wish to pursue at the college, here is assured a great learning experience and also a continued support in career thereafter.
MBA Programme at SNGIST to make them familiar with the basic concepts in Business management. Leadership Excellence Initiatives include Presentations on Economic and Non-Economic Issues, Business
The educational courses offered by SNGIST.
MBA Programme MBA is a two-year full time post graduate course with four semesters affiliated to Mahatma Gandhi University, Kottayam, approved by AICTE. The college offers options to specialize in four areas namely Marketing, Finance, Human Resource Management and Systems. The students at SNGIST get opportunities to listen to guest lectures and CEO talks from various sectors of the economy. The Industrial Visits, Outbound training programmes, Alumni interactions; all enhance the opportunity to customize the professional degree and build the foundations of the student’s future career. The institution has a team of sixteen full-time faculty members with doctorate holders, research scholars and academic experts. They train and develop the students to become corporate leaders with social commitment. The following are the methods through which the Faculty of Management Studies realizes the vision of SNGIST:
Competence Building Activities Certificate Programmes are offered along with MBA: Logistics Management,NCFM, NISM, Managing Retail Business and Advanced Excel Programmes. The MBA students regularly attend Union Budget talks organized by professional bodies and other media on a yearly basis.Bridge Course is conducted for freshers who have just joined the
Quiz, Chat with Corporate leaders, Brand awareness etc. The Department organizes seminars and faculty Development Programmes with eminent resource persons . Students are taken for Industrial Visits at DP World, Kochi Refineries Ltd, FACT, Binani Zinc, KLF and the like.
SNGIST Highlights
• • • • • • • • •
Built on the strong foundation of experience learning Offers some of the best educational courses Efficient faculty Hi-end academic facilities Thorough industry exposure Regular workshops and seminars On the job training with prominent organizations A well-managed placement cell Excellent placement record
Confidence Building Activities Every batch starts with a high power residential training programme scientifically designed and organized called Rope in Programme at Assissi Saanthi Kendra . Students are also taken for Kalypso Adventure Outbound training during their third semester. Personal Effectiveness Training and Career orientation sessions are handled by leading trainers and psychologists in Kerala. The prominent alumni of the institution interact with the students frequent ly and this interaction helps them to overcome the hiccups in the initial phase of their career.
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DiST--timely vision, timeless values
D
e Paul Institute of Science & Technology has built an impressive reputation as one of the fast-growing professional institutions in the educational landscape of South India over the years. The comprehensive range of its academic portfolio, the expertise of its faculty, success of its graduates and a committed management are the primary reasons for the institution’s acclaim. Since its inception in 2002, DiST has passionately pursued educational excellence. The past decade has been one of committed effort towards concretizing its vision of creating an ambience for this lush green campus in a prime location, equipped with state-of-the-art infrastructure, experienced faculty and international tie-ups with prestigious universities. The institute has responded promptly to the rapidly changing demands of society, the economy and industry by offering innovative educational programmes and courses.
DiST is managed by De Paul Education Trust, the educational arm of Vincentian Congregation, a Catholic religious community. It derives its title and inspiration from St Vincent de Paul, the patron saint of the Vincentian Congregation inspired by whom its members undertake educational/charitable/ spiritual activities for uplifting society especially the marginalized sections. DiST’s vision is to mould outstanding young professionals in relevant fields.
MPhil in Business Studies. DSM aims at training and educating students to a level of all-round competence in various avenues of management. The school promotes all activities which help the student community in honing up their entrepreneurial traits and managerial skills. The school has made sustainable efforts to bring an international perspective to all its activities through their collaborations and student and faculty exchange programmes with international universities like James Cook University, Australia, and DePaul University, Chicago.
There are huge challenges in today’s global and highly competitive market and the institute knows that it has to ensure that it is ready for them.The changing nature of work in the face of increased competition requires greater intellectual flexibility, alertness, relevant skills, knowledge and selfawareness. The management graduates require current and cutting-edge knowledge to perform smartly and efficiently in the dynamic business world. De Paul School of Management offers intellectual depth, abundant resources and individual attention to its students. Launched in 2002, the School of Computer Science offers Master of Computer Applications (MCA) and
Bachelor of Computer Applications (BCA) courses, both of three years’ duration. The school recently started a two-year PG programme in Computer Engineering and Network Technology (MSC CE&NT). The School of Social Work, started in 2004, offers a four-semester PG in Social Work (MSW), which is designed with unique specialities. The School of Media and Communication offers two PG programmes--MA in Multimedia and MA in Communication & Journalism--and two UG programmes--BA in Multimedia and BA in Communication, Journalism & English. The school was started in 2011. The School of Commerce moulds business and commerce professionals. Started in 2002, it offers three courses-MCom (Finance), BCom (Computer Applications) and BCom (Finance & Taxation). DiST also has developed centres for coordinating and supporting activities of the schools. DCRD (De Paul Centre for Research and Development) tries to promote research initiatives and orientation among the faculty and students. DES (De Paul Extension Services) is engaged in social services like child and women development, environmental protection and health awareness. D’soft Solutions devel-
Rev Dr James Chelapurath VC ops software applications and assists IT students to carry out their projects. Centre for Cultural Exchange and International Collaboration provides opportunities to students to build rapport with students from other universities/ institutions. Consistent and effective support systems to parents, students and alumni is a distinguishing mark of DiST. Trained counsellors at its Centre of Educational Counselling can handle queries about admission, fee payment, scholarships etc. Spacious and comfortable hostel accommodation is provided to both boys and girls. There is a cafeteria and a health club too. DiST’s vision is to become a centre par excellence by creating competent professionals enriched with deep knowledge and high-level expertise in modern technology out of young talents at the lowest possible cost and to create a new generation with a difference for God and society
Each of DiST’s five schools--Management, IT, Social Work and Media and Communication--is self-sufficient with its own teaching departments, latest-in-class infrastructural facilities, training and placement activities, add-on courses, research projects and consultancy and extension services. The learning/teaching process is multidimensional. Apart from classroom presentations and assignments students also participate in national and international seminars and conferences, students’ meets etc. IT-enabled learning, group research models, latest reflective practices for student enrichment, studentled projects, students’ associations and clubs and job-related placements/ fieldwork practices with international faculty are some of the teaching/learning methods. De Paul School of Management (DSM), started in 2006, provides management education rooted in human values and social concerns and brings out aspiring managers’ full potential. The school offers two postgraduate programmes, MBA (Master in Business Administration) and MHRM (Master in Human Resource Management), and Jan 31 - Feb 28, 2014 Jan 31 - Feb 28, 2014
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B-school students gain a lot by tie-ups with foreign varsities D
uring the middle of January this year, there were AJITH THOMAS a number of foreign collaboration opportunities for a foreign university coordinator of a business school (B-school) in central Kerala to choose from. Within a single week he had a couple of appointments with professors of US universities. In these appointments he was looking for academic tie-ups. The mood of the B-school was also upbeat, hoping for collaborations.
Business no longer follows geographical boundaries it was previously accustomed to. Every company today eyes expansion of its businesses across borders as part of its renewed business strategies. Since businesses have become international, business teaching should also be considered as ‘gone global’. Any B-school faculty member these days aspires to have their students interact with cross-cultural business teams considering the learning curve. Even though most Indian B-schools do not have the so-called US accreditations like AASCB in place, professors of US universities are willing to give academic immersions for their students and conduct a part of their courses in Indian B-schools. They look for interesting and emerging markets
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for their students to get an interaction. Even though China takes the lead, the hospitality and the communication advantage lure many professors to India. They are open to the idea of exposing their business students to Indian culture, society, economy and business through Indian B-school partners. Accreditations make an easy transfer of academic credits for students between the B-schools. Most often these professors bring a group of faculty members from their schools to conduct courses in order to circumvent the accreditation and academic credit problems that may arise.Usually US and Indian B-schools take different routes to collaborate, namely, institute partnerships, immersion programmes, study abroad opportunities for students etc. Institute partnerships exchange students both sides, provided the expenses can be met by the exchanged group. Immersion programmes usually are short-term programmes that take place as a part of a single course. The study abroad trips are even shorter. A few Indian professors and Bschools feel that the tie-ups are unequal relationships, where the Indian students do not get a chance to visit foreign universities. This can be attributed to the foreign exchange fluctuations and costly rupee-dollar conversions, which make these programmes unaffordable to many Indian students.
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Moreover it is a great task to manage these programmes within the existing university schedules and framework as most of our B-schools are operating within a non-autonomous system. Keeping away the so-called difficulties, it may be noted that these tie-ups can update students’ knowledge, give them opportunities to work in collaborative multinational teams and help them reach a higher level of learning. Students also get an opportunity to work on a current and relevant topic which will expand their horizons. The future employer would definitely see this collaborative experience very positively,during recruitments. The flexibility in course design and improved brand value add to the benefits of the participating B-school. Most often the US professors are willing to give all the technical and financial support to the partnering school. A B-school in central Kerala cites its story where it has a well-known, prestigious US university collaborating with it for a value-added course called ‘New Product Development for the Developing World’. This course has US art and engineering students collaborating via video conferencing for a trimester with Indian business students. They do a need analysis for a new product, which may solve a problem of the developing world. Once a problem is identified, the team brainstorms and
develops a product idea. The team then prototypes, takes feedback from potential users in the market and incorporates the feedback in developing a product. Sometimes they even involvepotential users to co-create the product. The new product thus developed is marketed by the B-school students. While the product is being marketed, the US team visits India and gets a firsthand experience of its product debut. According to students of both sides, this collaboration has given every participant a great learning experience. In this case, the technology and design are provided by the art and engineering students and customer knowledge with market situation inputs is given by the B-school students. One should emphasize the great learning that Indian students possibly could get by these tie-ups. Collaborating with multinational teams opens up the minds of B-school students. Any Indian B-school should grab the first opportunity that may come from a foreign country because it may improve the exposure and outlook of students, apart from developing the brand value of the B-school. B-schools should proactively find opportunities from these US universities and professors who are looking for an opportunity to collaborate. (The author is a visiting academic at an American university)
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Business management – MBAs far to go T
oday’s Business Management has become more challenging, dynamic, technology driven and the focus now being shifted to ‘profit making through social commitment’. Management professionals are constantly striving to achieve excellency by enhancing their Dr Rajagopala Nair knowledge and skills. A perfect blend of positive attitude, right skills and appropriate knowledge is the sine-qua-non for the success of a manager. The Management Education has become more dynamic due to the pressing needs from the industry. Business organisations demand professionals with a perfect blend of knowledge and skill. The quality of Management education is about the whole education environment, its global exposure and its impact on business and the economy. Business schools, management-related academic institutions, and universities have a unique role to train current and future generations to lead this process. However, as a global sector, management education must make considerable change to be at the forefront of innovation and progress for sustainable development. The Indian business environment, till the beginning of 1990s, was autarchic and we did not have
very many global linkages. For several decades IIMs did a fantastic job of taking smart students from India and training and developing them to take on positions of significant responsibility in Indian organisations. Over time, the business environment has become more international. The B-Schools that are training people to succeed in that environment also need to have a global perspective.
learn from practice and introduce some of that learning in the curriculam. We should learn from our students in the class room and also remain connected with other educational institutions to learn from their experiences. Success demands innovation, learning and regeneration. Some educators perceive a tradeoff between commitment to good research and good teaching.
We need to learn the best management practices and theories on a global scale. The B-Schools in India started to learn from and engage with globally reputed schools. We make sure we are part of the flow of thoughts, practices and research globally. If we do some of that, given the strengths of respective institutions, there is no reason why we should not be seen as one of the top management schools in our country. Of course, achieving this goal requires infrastructure facilities, knowledgeable and committed faculty, proper understanding of the critical constituencies around us and a solid mission and vision. We require autonomy to realize this dream.
Best quality education occurs when we are doing high quality research that has practical relevance and some of the best management research occurs in interfacing with practice. It is heartening to note that the academicians/teachers in B-Schools are less involved in research. They depend more on text book content and power point presentations, which remain unchanged for a long period, until the University change the syllabus. They should realize the fact that ‘teaching is not a job, it is a passion’. Management education has emerged as a catalyst for change. Let us hope our B-Schools will bring positive changes for accelerating the growth of India.
We have to constantly review and renew what we offer in courses. We learn a lot from practice. What are the current management challenges, how are they evolving and developing? We should make sure we stay close to practice,
(Author is Director of Albertian Institute of Management, Kochi)
Institute of diversified programmes (.....From page 22)
Compassion Building Activities Students undergo unique programmes like “Earn A Day” where they go out, work for a day and earn their wages and analyze the experience. They are also given training programmes on Meditation and Yoga. Development of Ethical Values is realized through spending time with Orphans and underprivileged classes. The student clubs here celebrate special days like Environment Day, Earth Day, World AIDS Day, Malala Solidarity Day in order to imbibe values.
MCA Programme The Master of Computer Application (MCA) programme is of 3 years duration with two semesters each year having a maximum intake of 120 students.MCA programme is affiliated to Mahatma Gandhi University, Kottayam and approved by AICTE.
Engineering Programme SNGIST offers engineering programmes in five streams: Civil Engineering, Electronics and Communications Engineering, Computer Science Engineering, Mechanical Engineering and Electrical and Electronics Engineering.
Placement Cell The right focus is the key to success. The placement body of SNGIST provides a professional approach to education
which emphasizes on every individual’s talents and his/her skill to contribute in specific areas. From the very beginning students are guided and prepared in the right path with extensive industry interaction and knowledge and are well placed with established corporates. The full-fledged placement cell has experienced faculty members in continuous liaison with the recruiters. They ensure placement training programmes, etiquette and performance training, GD and Interview training as well as placement visits. Remarkable placement record from the very 1st batch of MBA is the most significant feature of SNGIST placement cell. A remarkable placement percentage is achieved consistently for the MBA students. SNGIST boasts of Alumni in Shell – UK, AON Hewitt- Delhi, Videocon,Worly Parsons-Mumbai, Infosys, Johnson & Johnson, Honeywell, Asian Paints, Federal Bank Ltd, South Indian Bank Ltd etc. Jan 31 - Feb 28, 2014
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The challenge of skilling Kerala ship to take us to that pinnacle. Education is no longer just the privilege of the elite, but a universal right. It is the seed of a nation’s destiny. We must usher in an education revolution that becomes a launching pad for the national resurgence.�
R Balachandran
I
rrespective of the party or coalition of parties that would form the new Government, this will be one of the major issues that stares at them. A ticking time bomb that would implode and impede the growth potential of India, if not tackled urgently. Massive efforts are needed to harness the inherent power of the youth of India. The excitement of the enviable Demographic Dividend has no relevance if the human resource is not channelised onto contributing productively to the growth of the economy. No doubt, the economic indicators over the last few years has been depressing and dysfunctional. Not just in India, but across the world. Yet, most
However, just ensuring that more people are educated does not necessarily meet the requirements of an India that needs to surge ahead. A matter of greater concern is the issue of Employability amongst the educated unemployed and the large percentage of school dropouts and unskilled youth. The worrying factor is that irrespective of their level of education, a large percentage of the emerging generation entering the working age does not have the necessary skill sets to gain employment. Realising the magnitude of the problem, the government has embarked on a herculean task of Skilling and Upskilling 500 million by 2022. Embarking on this mission are 23 ministries taking on a target of 350 million and the NSDC (National Skill Development Corporation) with a target of 150 million.
depending on the sector. As of now the choices have been limited to about 18 sectors but many more choices are being added. The responses have also been varied from the students inspite of the fact that the programmes are supported by the government. However, it has been noticed that there has been a positive impact on the beneficiaries who have joined any one of the courses. So, even if a difference can be made in 50% of the target of over 300,000 students, Kerala could see an emerging generation of youth who have a better understanding of what employers expect from them. Simultaneously, the Department of Labour and Rehabilitation has set up KASE (Kerala Academy of Skills Excellence), to be the catalyst to set up various Academies for Skills . this is essentially to cater to the students from ITIs, Poly Technics ,those who have registered with the employment exchanges and anyone who is keen to get their skills enhanced for better employability. Though the model is different from the ASAP, it further indicates the critical need for Skilling and Upskilling to ensure that the youth seeking jobs benchmark their skills to acceptable levels.
Changing the mindset.
think tanks of the world accept that India is poised to become an economic power that would challenge the positioning of USA and China in the next few decades. The three factors that are critical to catapult India to this position would be Education, Employability and Technology. Efforts are already on to increase the GER- Gross Enrollment Ratio ( students completing schooling and taking up higher education) from around 13 % to 30 % . This itself poses an enormous challenge of finding funds, creating infrastructure and developing teachers. In comparison, developed countries have a GER of between 45-80% . The President of India in his speech on the eve of the Republic day pointed out that “The quality of education has to be the focus of our attention now. We can be world leaders in education, if only we discover the will and leader-
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The Government of Kerala has also responded to the call for Skilling by launching its own programmes to complement the national initiatives. Commendable are the ASAP (Additional Skill Acquisition Programme) that is being activated through schools and colleges by the Department of Education. A truly ambitious programme that intends to cover over three lakh students by the end of the plan period in 2017. The students from the Plus Two and Collegiate levels (Arts & Science) are given a choice of various career options to pick from, according to their interest and aptitude. The Skilling and Upskilling programmes are offered as a value addition to their existing education and provides them the opportunities of internships. The students undergo about 180 hours of sessions to enhance their communication and soft skills and about 120 to 240 hours of training to imbibe vocational skills,
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At the recent twoday NYPUNYAM seminar organised by KASE, the unanimous call was for a solution to change the mindset of the students. A need to stimulate them to understand the needs of the world of today. To make them realise that a mere degree or educational certification is no guarantee for jobs. To make them understand that very job requires certain skill sets and one has to upgrade themselves to acceptable standards. To change their attitude towards work and the workplace to understand that there is nothing infra dig about Skilling or learning a skill. That the world of tomorrow is going to need these skilled vocational professionals more than any other category. To this extent there is a need for a major thrust to generate a greater awareness on the need for Skilling and Upskilling and benchmarking themselves to higher levels. Every educational institution in the state , private or state owned, irrespective of the level of courses they are offering , have to make this awareness programmes mandatory. Government should support and encourage those who come forward to take up Skilling programmes. Students should be made aware that their future depends on the skill sets they acquire over and above their basic certification.
Students and the large percentage of unemployed much understand that the world will look at India for skilled manpower. Even the Middle East countries have slowly begun to insist on skilled manpower. Kerala because of the migratory nature of the population is ideally poised to become a primary provider of skilled manpower, if the people respond to such initiatives.
Reluctance to relocate One unfortunate trait noticed in the youth of today is their unwillingness to relocate to where the jobs are available. Exceptions are of course jobs in the Middle East. The kind of job does not become an issue here because of the lure of higher earnings, in spite of labour camp conditions. But when in Kerala, education has created a culture where they look down upon skilled professions. Vocations lack social acceptance. Today the construction industry survives because of the labour that has relocated from other parts of India. At the same time, most builders are of the unanimous opinion that the local people are far more efficient and competent to do jobs like masonry, carpentry, plumbing and so on. However, our youth hesitate to take up such professions and they feel no pride in being known as a professional in that category. Most of them are so complacent about their life and future that they do not want to relocate from their comfort zone.
Industry support Almost all industries complain about the shortage of skilled and employable personnel. Yet, while everyone complains, not many come forward to support such initiatives. They also need to start giving a weightage and a preference to those candidates who have undergone such Skilling programmes during recruitment. This in itself will be good publicity for such Skilling programmes. The Industry also needs to be educated more about such initiatives and they need to come forward as a stake holder of such new concepts by providing OJT(On the Job Training) opportunities as such support will in turn reduce their recruitment costs. The NOS (National Occupational Standards) for these profiles have been laid down based on industry requirements and expectations. All curriculum and training for each of the job profiles has to be aligned to the NOS. The Training providers have to be reg-
( Turn to page 29 )
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Life insurance agents on exit mode 2008-09 to Rs 24,457 during 2012-13. But the dent in the average number of policies took that benefit away.
L
Sanjeev Kumar G
ife insurance agency as a career option has lost its sheen and many agents have stopped selling policies. They are either taking up other jobs or scouting for jobs. There were about 23.6 lakh life insurance agents in 2011-12 and this has come down to 21.2 lakh agents in 2012-13, according to IRDA’s annual report for 2013. Of them 55% are under LIC. While 5.65 lakh joined the agency business, 8.01 lakh left it during the
There are about 1.1 lakh life insurance agents in Kerala in 2012-13. Life insurance agency is one of the largest employment creators in the state. About 19.2 lakh policies were sold during the year and the total premium collected was Rs 2569 crore. LIC which had 57,928 agents sold about 17 lakh policies and collected first-year premiums of Rs 1,778 crore. Out of this more than 95% is supposed to be sold by individual agents. The private life insurers could sell only 2.2 lakh policies despite having about 54,000 agents and several banks and stock brokers acting as their corporate agents. This shows the might of LIC agents in Kerala and the trust LIC has in the minds of Keralites. But the
pendously. Hence the equity-oriented ULIP schemes gave very high returns which were not common with traditional life insurance plans.
But in the last four years the stock market has given annualized returns of about 7% only. After deducting various charges the ULIP NAV returns during this period were lower than what traditional policies could give. So ULIPs became least attractive. During their heyday ULIPs were sold as fixed deposits for three- year terms, assuring customers of high returns in a short period. This was total miss-selling. After three years many policy holders found their fund value to be 50% or less than that of the total premiums paid. They got shocked. Many complained to IRDA and even registered police cases against agents and insur-
the policies through their network. Life insurers started offering policies online at reduced premiums by cutting off the agency commission. Mostly term insurance policies got sold online. People realized that it gave higher insurance cover. Agents never used to sell term insurance policies as the commission was miniscule. Finally cultural shift has taken its toll. In olden days becoming a life insurance agent was like a lifetime career. So the agents used to service the clients regularly and used to get new policies from existing clients. They used the concepts of financial planning in selling the products saying that a particular policy would help them accumulate money for a child’s education and so on. But nowadays people who join as agents want to make a quick buck. If they could not make it in a few months they just drop the job. One thing agents should remember is that the era of high commission rates is over. Across all product lines the regulators are forcing product manufacturers to reduce the commission be it mutual fund or insurance. If ever an agent has to survive, he has to adopt the financial planning way to sell insurance products. He should sell products that can give required amounts at the time of a goal of the clients. For example. if a client wants to fund his son’s higher education after 15 years, the policy should be able to give a maturity value equal to the future value of the education goal. Naturally the client will look into the total cost of owning the policy.
year. In the case of LIC the total number of agents decreased by 8.23%. The contribution of the agency channel to LIC’s first-year premium is about 96%. LIC solely depends on the agency channel whose high attrition is going to badly affect it in the coming years. The average number of policies sold in a year by an LIC agent was about 28 in 2008-09 and now it is about 29. But the average first-year premium per policy collected by an agent of LIC has decreased from Rs 11,227 in 2008-09 to Rs 11,143 in 2012-13. On average, an agent of a private life insurer used to sell six policies during 2008-09. Now it is about three only. The only good thing is that the average first-year premium per policy collected by an agent went up from Rs 18,977 in
high attrition of agents will bring down the efficiency of the agency business and also will drain out the trust over a period of time. It is evident from the fact that though the average number of policies sold by an LIC agent remained the same, there was no increase in the average premium per policy collected by an agent. There are several reasons for the downtrend in the life insurance business and the agency business. On a macroeconomic angle persistence of high inflation for a long period has brought down the disposable income of Indian households. Accordingly the savings rate of Indian households has come down. During the 2003-2008 period the Indian stock market was growing stu-
ers. Many people lost trust in life insurance policies. The commission was the main attraction for youngsters to take up agency as a career. The ULIP commissions came down in 2010. After that the focus shifted to traditional policies. But the traditional policies of LIC were the best in terms of returns. So the agents of private players who pushed traditional policies could not make inroads into that business. The private insurers started depending more on corporate agents and insurance brokers. They made banks corporate agents and started getting more business from the bankassurance channel. Companies which were into mutual fund distribution started insurance broking divisions and pushed
It is high time life insurance companies also realized that they could build a long-term business through agents who serve the clients in the long term. So they should not push them hard to somehow make the sales but invest in upgrading the knowledge of the agents so that the agents can advise the client properly. Business procured should not be the only criterion, but the feedback about the agent from the clients also should carry equal weight in determining the advance of the agent in the career. Agency channel is a very important job creator in our country. Its decline means more unemployment. All stakeholders should sit together to discuss strategies to revive the fortunes of agents and should make it a prime employment driver. (Sanjeev Kumar is Managing Director, Progno Financial Planning Systems (P) Ltd)
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A
MBAs from AIM are a class apart
lbertian Institute of Management (AIM), Kochi, is a B-School which moulds the best managers catering to the demands of Business and Industries in India. AIM offers two year full-time MBA programme, affiliated to Mahatma Gandhi University and approved by the AICTE. Administered by
lency by enhancing the knowledge and skills of the students. AIM uphelds the philosophy that a perfect blend of positive attitude, right skills and appropriate knowledge is the sine-quo-non for the success of a manager. The institute is thriving to achieve this end by introducing novel and innovative methods of teaching and learning in tune with the industry requirements.
Albertian Institute of Management ( AIM ), one of the premier B-Schools in Kerala, has contributed the best managers to the industry and aims to mould youngsters into committed individuals who can cater to the needs of business community. We are determined to transform the students into more responsive and adaptive persons who pledge themselves to social causes in all their activities. The learning process at AIM will generate passion among students to rededicate themselves to achieve excellence.
Rev Fr Antony Arackal the Archdiocese of Verapoly, AIM imparts high quality, value based, industry focused management education. The objective of the MBA programme at AIM is to equip the students to become more challenging, dynamic and techno savvy. Teaching and learning process at AIM is so designed to achieve excel-
Dr. Rajagopala Nair, after serving 33 years as professor in the Dept. of Commerce and Research Centre at St Albert’s College, has assumed the position of Director of AIM. He is supported by the excellent and dedicated faculty who are committed to the cause of
management education.In the words of English classes, Personality DevelopRev Fr Antony Arackal, Manager, AIM, ment programmes, Orientation classes Business Management is technol- for the beginners, club activities etc. are ogy driven and the focus now is being being imparted to the students to make shifted to ‘profit making through social them employable. Wi Fi Campus, well commitment’. Therefore, the Vision equipped laboratories, library with online data base including EBof AIM is “to be a leading BSCO and J-Gate is provided School of international repute, at AIM to enhance the knowlconstantly striving to contribedge of the students. The ute to societal needs and welclass rooms are designed to fare”. The MBA programme at promote and facilitate particiAIM is being imparted as per pative learning. The students the university rules and reguhave the most modern learnlations. A Bachelor’s Degree ing and presentation equiprecognized by M G University with 50% marks in ag- Dr Rajagopala Nair ment at their disposal. The students get opportunities gregate or a CGPA of 2 with ‘C+’ grade is the minimum requirement. to showcase their talents in our anApplicants should have appeared for nual cultural event ‘Finesse’. Sports MAT/CMAT, attend a Group discussion and games are also encouraged in the and a Personal Interview. Final year institute. degree students can also apply. DurAIM brings out ‘Erudiing the first two semesters tion’ a Journal in Busiof MBA, the students have ness Management, which to learn core papers, durincorporates research ing the third and fourth searticles on various areas mesters, they have to learn of management, busithe Specialisation papers.
AIM offers specialization in Finance, Marketing, HR, Information Systems and Production and Operations.
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As a part of Industry-Institution interaction, ten per cent of the classes are handled by Industrial Experts. Industrial tours and visits are being organized by the institution to expose the students to real time situations.‘Colloquim’, a monthly talk by the experts from the industry is an added attraction of AIM. Value added programmes, Spoken Jan 31 - Feb 28, 2014
ness and case studies. Students are actively involved in Corporate Social Responsibility(CSR) activities which help them in cultivating the habit of social commitment. A monthly news letter titled ‘Reflections’ is brought out every month by AIM to highlight the activities of the institution and to communicate the same to the parents. The studenst of AIM are members of professional bodies like Kerala Management Associaation( KMA ) and NIPM.
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Skilling: Driving force of economic growth A
sia Pacific region is the engine of global economic growth in recent years, India plays a major role in the regional as well global economic growth. Innovative approach towards skill development paves way for the high growth business environment which creats large employment potential.
in poverty reduction. Several initiatives of Govt. of Kerala in skill development has become model for the other states, one of such preventive initiatives ASAP (Additional Skill Acquisition Program) which helps the students at the Plus 2 level and Graduation level to get trained on the inudstry oriented sector specific skills which will bridge the gap of employability, this program also addresses the generic employability skills like communication and presentation skills. Another curative initiative under the Labour department provides opportunity for the unemployed youth to acquire employability skills under KASE - Kerala Academy for Skills Excellence.
The accreditation of vocational training providers and certification plays a very important role in making the skill development system more effective. India as on date has devised a strong mechanism to addres this issue through the NSQF(National Skills Qualification Frame Work).
With all these initiatives to skill 500 million people focusing on the future requirement is a great initiative in making India becoming the skilled workforce supplier to the world. Forecast projects requirement of 56 million skilled workforce across globe whereas India will have 46 million surplus skilled workforce, this is an India advantage position to be the skilled work force supplier to the globe.
KV Vinayarajan
Sector skill council for various sector has been formed to coordinate with corresponding sectors to understand the industry requirement job role wise to make the skill training more effective and inudstry oriented, co-certification under NSQF with sector skill councils has made the programme more valuable to all stake holders. Structured skill development programs will ensure creating skilled work force which in turn helps
The issues which needs attention as on date in the skilling space is coming together of all the stake holders to make the skilling eco system more effective and productive. Without the effective participation of the industry in the skilling initiatives, we may not realize the required outcome. Industry is to come forward to be an effective partner in skilling initiatives by associating with the training partners. “Pre- Hire� training to be the mantra to make the system more
Companies want to cut time and cost (From page 26 ) istered with the SSCS and only them can they train people for those job profiles. What is pertinent here is that the same curriculum will be followed by all training providers across India. There are standardised evaluation and assessment methodologies as well that are conducted by independent agencies. Logically, the respective industries have assured that they would give preference for hiring from this pool of trained manpower.
Job seekers to job givers Kerala has a deep rooted culture of its people wanting government jobs. A classic indicator is the huge number of applicants appearing for the PSC tests and aspiring for a clerical job. The irony of the situation is that the applicants include M Phil, Postgraduates and even MBAs. However much the government tries, it just cannot provide jobs for the multitudes in Kerala. Hence, one op-
effective, based on recruitment forecast organisations can recruit the required numbers and put them through the skill development programs under the NSQF with organisation specific customised plug in module to make the program more effective. This helps the organisations to reduce recruitment cost and attrition rate. Emergence of IT industry is one of the great examples of economic growth through skills. As India has the skill edge over other countries which made the outsourcing industry to target India for all their outsourced activities, more than cost advantage skill plays a very important role to become an outsource destination. The IT skills of India paved way for IT industry growth which in turn changed the lives of millions of youth. If the drive to skill 500 million youths is properly implemented then it opens door for industrial growth, creates ample employment opportunities which leads to higher per capita income and economic growth. Let us all in the skilling eco system, involved directly or indirectly put in all our efforts to make the skilling industry more effective and productive to make our country an economic super power. At SB Global, we look forward to serve the industry by addressing the specific skill gap issues they face as on date and help them to drive the business better and grow faster. (Author is CEO of SB Global).
tion could be to stimulate an interest in self employment or entrepreneurship. Kudumbasree has blazed a new trail in women’s empowerment and in creating self help groups. This model needs to be encouraged amongst all those who are opting for some of these skill development programmes. The start Up village at Kalamassery is a role model for the youths of Kerala. The state has also responded and set a new trend by allotting 1 % of the state budget to encourage startups. As the CM of Kerala recently mentioned, one of the desir-
able goals of the state is to transform the youths from being mere job seekers to job givers. That would be a real game changer for this small state. SB Global, as the NSDC partner in Kerala, has taken on the challenge of Skilling and Upskilling over 1,00,000 people and is actively involved in supporting the efforts of the government of India as well as the State government in locations across Kerala. ( Balachandran is CMD, SB Global, Kochi)
The gap between industry partners direct participation in the skilling activity and the real time scenario is huge and has to be filled. Industry players should be more proactive in indicating their requirements and encouraging pre- hire training. Most companies want to reduce the time and costs of training after hire. If one were to look at the examples of Infosys , Wipro, TCS etc, the gap becomes obvious. All these big IT majors spend close to USD 5000 on re-training the hires. This is in spite of the fact that the cream of each college are the ones who are selected to these companies. So skilling is not just for trades alone, enhancement of skill sets are required for Engineers, MBAs, CAs and many other categories as well.
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Salient features of The Companies Act 2013 rate would in fact gain in terms of their reputation and goodwill in society. 2. Presence of Women Directors: In an attempt to bring gender equilibrium, the Bill has asked companies to have at least one woman director on board.
Vivek Krishna Govind
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he Companies Act 1956 is being replaced by The Companies Act 2013, which is more of a rule-based legislation containing only 470 sections, which means that the substantial part of the legislation will be in the form of rules. A part of the Act has already become effective with the notification of 98 sections and the Draft Rules are being made public in phases over this month. This is a landmark legislation that will have a wide ranging impact on corporate India. The Companies Act 2013 intends to promote self-regulation and has also introduced some progressive concepts like One- Person Company, Small Company, Dormant Company, E-governance, etc. The concept of Corporate Social Responsibility has also been introduced to encourage a socially, environmentally and ethically responsible behaviour by companies. Further, the Companies Act 2013 aims to fortify investor protection & transparency by introducing terms like Insider Trading, Price Sensitive Information, Class Action Suits and other additional disclosures. It also intends to give greater responsibility to the auditors and to widen their role. A National Company Law Tribunal will also be a reality now and therefore the matters which used to linger in courts for years will be swiftly handled by this dedicated tribunal. Some of the salient features of The Companies Act 2013 are as under: 1. Corporate Social Responsibility: The Companies Act 2013 stipulates certain class of companies to spend a certain amount of money every year on activities/initiatives reflecting Corporate Social Responsibility. 2% of the average net profit of preceding three financial years is to be spent annually on Corporate Social Responsibility (CSR) for Companies with net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit more than Rs 5 crore. There may be difficulties in implementing this in the initial years but this measure would help in improving the under-privileged & backward sections of society and the corpo-
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3. One-Man Army: The Companies Act 2013 provides a new form of private company, i.e., one person company is introduced that may have only one director and one shareholder. The Companies Act, 1956 requires a minimum of two shareholders and two directors in case of a private company. 4. Class Action Suits: The Companies Act 2013 has introduced a new concept of class action suits with a view of making shareholders and other stakeholders more informed and knowledgeable about their rights. 5. Strict Rules for Auditors: With the passing of the Bill, the auditors will be strictly monitored, for any misleading information could mean imprisonment up to one year. An auditor will be able to audit a maximum of 20 companies. Their work tenure will be of 5 years and has to be approved every year. 6. Presence of Separate Tribunal: The Companies Act 2013 introduced the National Company Law Tribunal and the National Company Law Appellate Tribunal to replace the Company Law Board and Board for Industrial and Financial Reconstruction. 7. Fast-track Mergers: The Companies Act 2013 proposes a fast-track and simplified procedure for mergers and amalgamations of certain class of companies such as holding and subsidiary, and small companies after obtaining approval of the Indian government.The Companies Act 2013 also permits cross-border mergers, both ways; a foreign company merging with an Indian Company and vice versa but with prior permission of RBI. 8. Prohibition on forward dealings and insider trading: The Companies Act 2013 prohibits directors and key managerial personnel from purchasing call and put options of shares of the company, its holding company
Jan 31 - Feb 28, 2014
and its subsidiary and associate companies as if such person is reasonably expected to have access to price-sensitive information (being information which, if published, is likely to affect the price of the company’s securities). Earlier these provisions were contained in regulations framed by SEBI, as the capital market regulator. Now, it has also been informed that SEBI is expected to discuss changes in certain norms for listed firms so as to make them in line with the rules in the new Act. 9. Increase in number of Shareholders: The Companies Act,2013 increased the number of maximum shareholders in a private company from 50 to 200.
director who has stayed in India for a total period of not less than 182 days in the previous calendar year. 13. Independent Directors: The Companies Act 2013 provides that all listed companies should have at least one-third of the Board as independent directors. Such other class or classes of public companies as may be prescribed by the Central Government shall also be required to appoint independent directors. No independent director shall hold office for more than two consecutive terms of five years. 14. Serving Notice of Board Meeting: The Companies Act 2013 requires atleast seven days notice to call a board meeting. The notice may be sent by electronic means to every director at his address registered with the company. The Companies Act,1956 did not prescribe any notice period to call the board meeting of a company. 15. Duties of Director: Under The Companies Act,1956, a director had fiduciary duties towards a company. However, The Companies Act 2013 has now defined the duties of a director. 16. Liability on Directors and Officers: The Companies Act 2013 does not restrict an Indian company from indemnifying its directors and officers. 17. Rotation of Auditors: The Companies Act 2013 provides for rotation of auditors and audit firms in case of publicly traded companies.
10. Limit on Maximum Partners: The maximum number of persons/partners in any association/partnership may be upto such number as may be prescribed but not exceeding one hundred. This restriction will not apply to an association or partnership, constituted by professionals like lawyer, chartered accountants, company secretaries, etc. who are governed by their special laws. Under The Companies Act,1956, there was a limit of maximum 20 persons/partners and there was no exemption granted to the professionals. 11. Electronic Mode: The Companies Act 2013 proposes E-Governance for various company processes like maintenance and inspection of documents in electronic form, option of keeping of books of accounts in electronic form, financial statements to be placed on company’s website, etc. 12. Restriction on Composition: Every company shall have at least one
18. Auditors performing NonAudit Services: The Companies Act 2013 prohibits statutory auditors from performing non-audit services to the company to ensure independence and accountability of the statutory auditor. 19. Financial Year: Every company’s financial year will be the period ending on 31st March every year. 20. Rehabilitation and Liquidation Process: The entire rehabilitation and liquidation process of the companies in financial crisis has been made time-bound under The Companies Act 2013. The Companies Act 2013 has been lauded by the corporates and professionals alike for providing business friendly corporate regulations, enhanced disclosure norms, investor protection and better corporate governance amongst other things. (Author is Partner, Varma & Varma Chartered Accountants)
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Intersight to tap global tourism opportunities R
ecognizing the huge potential in the tourism sector, Intersight Tours and Travels, one of the largest tour operators in South India, is introducing several innovative products and services including cruise tourism. In Kerala, the tourism industry has an average growth rate of 10% with an annual turnover of Rs 25,000 crore. During 2012-13, more than 10 million tourists, including 8 lakh from abroad, visited the state.
Johny Abraham George Engaged in B2B operations with more than 1,500 associates and affiliates across India, Intersight was started in 1996 and has its registered corporate office at Kochi and several branches in Delhi, Mumbai, Kolkata, Chennai, Bangalore, Ahmedabad, Lucknow and Indore. Having Union Ministry of Tourism recognition, Intersight is also a member of the Travel Agents Association of India (TAAI), Indian Association of Tour Operators (IATO), Travel Agents Federation of India (TAFI), Association of Domestic Tour Operators of India (ADTOI), Confederation of Indian Industry (CII), Indo-German Chamber of Commerce and Kerala Travel Mart Society (KTM). “Intersight is targeting more tourists from the Gulf and also plans to develop off-cruise tourism in Kochi. Our biggest strength is our wide network,” says Johny Abraham George, Chairman and Managing Director of the Intersight Group of Companies. “The projected cruise line service can function for six months and handle 60,000 travellers in a year. Every year about 40 cruise lines visit Kochi, but most of them berth here for just one day. The planned service can offer different packages ranging from a night’s to one week’s berth. Discussions are on with some foreign cruise companies to start a cruise line service based at
Kochi and the Cochin Port Trust (CPT) will help it in this,” he adds. The company handles 75,0001,00,000 tourists a year and has the status of an official handling agency of Jet Airways and Air India. It already has an office in Manchester in the UK and will soon start one in Frankfurt. A lot of tourists from Germany arrive in India through Intersight which has also plans to open associate offices in Oman, Kuwait, Qatar and Dubai. In Oman alone, it plans 30 centres. Intersight has packages for tourists from Europe, South Africa, Singapore, Malaysia and Mauritius and to attract more tourists from abroad is planning a range of extensive packages and schemes for which a special division has been set up. “In 2016, the company will complete 20 years in the business. The target is to achieve a revenue of Rs 250 crore by then. Its ‘Vision 2020’ envisages Rs 500crore business. As part of its expansion, the company plans an initial public offer (IPO) before which an employee share/ stock ownership plan (ESOP) will also be introduced. There are 200 direct and 300 indirect employees now,” says Johny Abraham George.
Intersight Tours & Travels Pvt Ltd bags the Kerala Tourism’s Best Inbound Tour Operator Award for the consecutive third time. Award for ‘Best Inbound Tour Operator’ for three consecutive years. It received the ‘Certificate of Excellence in Tour Operations to India’ from the Mayor of Brukmul, Munich, Germany, on November 9, 2012. Johny Abraham George is an employee turned entrepreneur with over three decades of experience. Besides being the President of KTM, he oc-
cupies key positions in ADTOI (Association of Domestic Tour Operations of India), CATO and CKTI. His personal recognitions include awards from Kerala Sahrudaya Vedi and the World Malayalee Council-Switzerland. His untiring effort to make Intersight a great success is ably backed by wife Celin and children Divya, Bhagya and Dr Soumya.
Intersight was set up with the vision of achieving service excellence and employee pride through innovation and customer-centric activities. The objective is to provide unmatched holiday experiences to customers through excellent services and true value for money by holding good virtues such as reliability, dedication and customer satisfaction. In 2011, we started an ‘Own Your Cab’ (‘Saarathi Sauhrudam’) scheme for drivers in Kerala. It is a plan to provide 100 free cabs for drivers so that they could develop a source of income. We also provide luxury vehicles and drivers speaking different languages to serve foreign tourists. Our Green Travel Packages plans to initiate solar-powered cyclerickshaws in tourist destinations like Fort Kochi and Kovalam,” says. The Intersight Group of Companies consists of Intersight Tours and Travels and Intersight Holidays for inbound and outbound tour operations, respectively, Intersight Hospitalities, Southern Vacations and Intersight Foundations. Intersight Tours and Travels Pvt Ltd has won the Kerala State Tourism Jan 31 - Feb 28, 2014
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new-gen engineering ASIET: and technology institute A
di Shankara Institute of Engineering & Technology (ASIET) became the most sought- after institution in the technical education sector in Kerala, right from its commencement. Established at Kalady in 2001 with the aim of providing value-added technical education, it is being run by Adi Sankara Trust, a registered trust which has made an indelible imprint in the educational arena. The college is affiliated to Mahatma Gandhi University, Kottayam. The institute is the most preferable destination among the corporate world for their recruitment . The major companies like
At present the management of ASIET is in the hands of K Anand, the Managing Trustee. The college is headed by the electronics wizard, Dr S G Iyer, the Principal, who is ably assisted by a group of young, dedicated and competent faculty. Adi Sankara Trust was set up with the blessings of His Holiness Jagadguru Sri Sri Sankaracharya Mahaswamikal of Sringeri Sarada Peetham and guided by the great vision of Adi Sankara. The trust today owns five prestigious educational institutions— Sree Sankara College, Sree Sarada Vidyalaya, Adi Sankara Institute of Engineering and Technology, Adi Sankara Institute of Management and Technology and Bharathi Theertha Education Society.
K Anand TCS, Godrej, HCL, UST Global, South Indian Bank, Federal Bank and ICICI have been visiting the campus for the recruitment and in 2011-12, 298 students were absorbed by these companies. The pass out percentage never falls below 67% in any semester and 87% of the students of the institute become eligible for placement. Industry institute-interaction has signed a memorandum of understanding (MOU) with Sree Ram Group, Infosys and ISCC Labz. Special workshops on robotics, ethical hacking and signal processing are conducted by experts from IIITBangalore and IIT-Kharagpur. Special refresher courses on information security are conducted under the auspices of C-DAC, Thiruvananthapuram, for the staff of the college. Every year the college conducts a national technical cultural festival called Brahma. One day of the festival was devoted to pure classical arts and this was for creating interest in all classical arts forms in professional students. The institute has been accredited with ISO 9001:2008 certification. This
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is the first new-generation engineering college to get the prestigious international standards certification for the quality system of technical education. ISO standards control the quality aspects from the moment a student enters campus. From that moment, the transformation of the student into a totally competent engineer is the responsibility of the institution. The certification is done by KPMG Quality Registrar and accredited by the Dutch Council of Certification.
Inspired by the ancient philosophy of Adi Sankara, the trust keeps the light burning for the generations to come. It has been a pioneer for the last 50 years in catering to the growing demands of highly specialized science graduates and technologists. The objectives of the trust include the bringing of excellence in engineering, agricultural and medical fields by organizing higher education courses in these areas. The trust also plans to run educational institutions and hostels akin to the ancient `gurukulas’. It stands for secular moral values, giving importance to Indian culture. Popularizing Sanskrit education and in-depth study of Vedanta thought is another objective. The institution envisages providing an apt environment for individuals to transform into technologically superior, socially committed, spiritually elevated and nationally responsible citizens. It aims to build a strong centre of excellence in engineering and technology targeting global standards. The Department of Management Studies of ASIET has an amiable environment which stimulates learning and
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encourages overall development of the individual. The noble quality inculcates ethical and spiritual values and innovative thinking in the students. The college consistently aims to impart quality education based on empowerment of participants through involvement and guidance of the faculty members. The students are given an active role in the teaching-learning process through live classes. The students get periodic industry visits. Personality development, communication and presentation skills and group discussions are the regular features. Invitees from the manufacturing and service sectors address the students frequently on cur-
hatma Gandhi University, Kottayam, and approved by the All India Council for Technical Education (AICTE), New Delhi, the college offers value-added education in the following disciplines: Undergraduate courses: 4 Year (8 semesters) BTech degree courses in Applied Electronics and Instrumentation; Electronics and Communication Engineering (two batches); Computer Science and Engineering; Electrical and Electronics Engineering; Information Technology; Mechanical Engineering; Civil Engineering.
Dr. SG Iyer rent management developments. The campus recruiters include national and multinational organizations
Fee waiver scheme: From 200809 a new scheme has been launched. Meritorious but economically backward students will be exempted from paying any tuition fee at all. Two seats are reserved for girls and one for a physically handicapped student in each branch of the BTech class. Special features of MBA courses:
Corporate social responsibility
As a part of its corporate social responsibility (CSR), Adi Shankara has set up a computer lab of 20 machines in the Jana Seva Sisu Bhavan at Aluva. Batches of 60 students frequent the Bhavan every Sunday to teach the inmates computer programmes. Moreover, the institute is undertaking electrification work of 93 houses of the poor. Students from the institute directly go to the houses and do the wiring for electrification in Vengoor panchayat and Moodakuzha. In addition to this, 400 students in 100 batches go to residences in and around Kalady and Angamaly to give awareness to the public to curb electricity consumption. The institute, in association with Amrita Institute of Medical Sciences, Kochi, is to conduct free medical camps in paediatrics, dental care, ophthalmology and gynaecology on February 9, 2013 for about 1,500 people.
and the college targets job placements for all students by the end of the programme. The faculty comprises experts with good academic qualification and extensive industry experience. Courses offered: Affiliated to Ma-
Eminent faculty having industry and academic experience; guest lectures by experts from the fields concerned, industrial visits to facilitate industry interactions; case method of teaching and learning to impart practical knowl-
33 edge; frequent conduct of seminars on various management topics • Effective participation in management fests; placement training by accredited trainers; placements offered by reputed organizations for performing candidates.
About the Department of Management Studies: The MBA course was started in the institute in 2001 and the program is recognized by AICTE and
affiliated to Mahatma Gandhi University, Kottayam. At present fourth and fifth batches of MBA students are being skilled in various disciplines of management. The Department of Management Studies, a part of ASIET, has at pres-
ent eight permanent faculty members and another four visiting professors with industrial and teaching experience ranging from 8 to 30 years in their respective disciplines. Almost all faculty
members have undergone the Faculty Development Programme at IIMs in their respective areas. MBA at ASIET offers specializations in Marketing Management, Human Resource Management and Financial Management. The institute is also planning to offer non-credit papers in contemporary areas of management like logistics, entrepreneurship management etc. Salient features of ASIET: Highly qualified and dedicated faculty; stateof-the-art laboratory, library and workshop facilities; ultramodern classrooms with latest teaching aids like P3 ceramic boards, public address system and LCD projectors; fully air-conditioned and well-furnished seminar hall and conference rooms; ample provision for sports, games and cultural activities; institution-industry interaction; mandatory regular industrial visit; guest lectures by industry/commerce experts. Research Centre: The Centre for Research in Information Security in ASIET is meant to inculcate innovative practices among students. The insti-
tute’s intention is to make it a centre of excellence in the horizon of advanced computer science and engineering. The centre is equipped with state-ofthe-art facility in design, development, testing and evaluation of research projects. The main areas of focus are information security, image processing and data mining. The infrastructure of the research centre will cater to the needs of various research projects of the engineering students. The centre will function in collaboration with various industrial establishments, educational institutions and research organizations of esteem. PG courses in engineering: MTech Computer Science was started with the first batch having 18 students. The Research Centre in Computer Science was inaugurated by Dr A P J Abdul Kalam on October 13, 2010; M Tech in Electronics & Communication: specialization VLST & Embedded System; MTech in Electrical & Electronics: specialization in Power System & Power Electronics.
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‘GPC nayarum eetta (GPC Nayar and the reeds trade) Dr G P C Nayar
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ne who knows this writer might wonder what G P C Nayar has to do with reeds. Yes, the relationship is beyond common sense. It is also quite weird that a highly educated professional would venture into the reeds trade as it needs no MBA or a doctorate. Those who made money in this business, though not highly educated, are prominent and popular. Former minister and MLA T U Kuruvilla, Pobson Group’s founder and eminent industrialist Pobson, Jacob Parackkal of a famous family in Aluva and Binny Company in Kochi were the main contractors of reeds in central Kerala. The chief raw material of the Hindustan News print Factory at Piravom was reeds which were processed in phases into pulp and converted into paper. For whitening, imported snowhite Swedish pulp and Aluva TCC’s chlorine were used. Big companies needed hundreds of tonnes of reeds. As the newsprint factory But used to setthere came tle the acan obstacle-counts of he demanded a the conguarantee for the tractors money to be granton a daily ed, or collateral basis, the security in bank contracparlance. tors were very prompt in delivering the material. This had been the procedure for years. Reeds available in the woods were cut and carried in lorries to the company daily with the permission of the Forest Department. It was the job of the contractors. The company’s payment was based on the weight of the consignment. So the contractors did not have to invest much and the existing contractors never ever thought that a new contractor wouldcome on the scene. But one appeared and his name
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was G P C Nayar. I think a flashback of the past events is worth being unreeled to know how this happened. After taking VRS as the Public Relations and General Administration Manager of Travancore Cochin Chemicals (TCC) in 1980 I started a small-scale industrial unit engaged in structural fabrication, tanks moulding and the furniture trade, investing Rs 16 lakh, which at current value may equal Rs 160 crore-Rs 180 crore. Initially I had a smooth run, but after some five years it ran up debts. Clients, some of them big companies, defaulted on payments. The situation resulted in my being unable to pay interest on my loan. It is out of the profit that I derived from the wellrun PG courses in Public Relations, Advertising and Journalism that I used to pay salaries. As they were correspondence courses, I could use my spare time for company affairs. But I found it difficult to get along. It was at this time that a classmate of mine and former Regional Director of the National Sample Survey, K M Nair, who dared to quit the post, decided to associate himself with me. We pondered ways of making money to redeem the company. We found no clear way. One day a person named A N Ramachandran (ANR) who was the Manager of Binny Company strolled into our office. Though his looks, I thought, were deceptive he had good communication skills. When we told him about our predicament he suggested that we enter into a contract with the Velloor Newsprint Factory for supply of eetta (reeds) to it. “You can make Rs 10 lakh within six months. Money for the first load is the only requirement. Later you can run the business out of the profit from the newsprint. There won’t be much difficulty. I was the Manager of Binny which had this reeds contract business. I have the know-how. I’ll help you for a share of the profit. If needed, I’ll also become a partner,” he said.
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kachavadavum’ Green reeds and forests were all Greek to us. However, we decided to make a tryst with it. K M Nair said that we were not attuned to work in forests and were totally ignorant of it. He could not work there either. We agreed with the view. But he said he would look after the company’s affairs and ANR and I could handle the contract work. But where was the money? There was no question of approaching our bank, State Bank of Mysore, as there were some dues to it. We could not convince the bank that the money was required to pay off our dues to it. How would the bank believe us as we had had problems with it? Not even once had we remitted our dues. Since the bank knew it was not deliberate it did not proceed against us legally. Why not another bank, we thought. We approached the State Bank of Hyderabad and explained the situation. The Manager realized our plight. A person who was widely known in Ernakulam and a speaker who addressed a meeting of the Bankers’ Club attended by this same Manager was not unfamiliar to him. He assured me of help. But there came an obstacle--he demanded a guarantee for the money to be granted, or collateral security in bank parlance. I had nothing to offer. My house belonged to the Housing Board. Instalments were still outstanding. Desperately I confronted the Manager. “You must trust me as a well-known man around for Rs 1 lakh. I have not cheated anybody and would always remain so. You should give the money on my personal guarantee that too for just three months within which the amount will be refunded,” I said. The gentleman believed me and the money was sanctioned on my own guarantee. The notification for newsprint appeared and the tender application was given. ANR was the guru (master). Our tender for deliverry of 5,000
tonnes of reeds in six months was accepted. We were allotted the Vazhachal farm near Chalakudy. We did not know the location but enquired with the Forest Manager. With some suspicion he briefed us and directed us to the contractors in the field for more details. As the competition in the field was not tough they were frank to explain things. However they were frank enough to tell us that this avocation was not meant for people like us. We told them about our plight. There were some procedures before the work was to begin. We should get the exit pass for the reeds from the forest office at Chalakudy. The application for the pass should be accompanied by a copy of the contract. Other formalities remained. The managers of our company, Steeltech, were assigned the job of completing the procedures. We were told that we should start a provision store there. The room required for it would be lent by the Forest Department. Provisions and utensils too for two weeks could be stored in the shop. The choppers of reeds should be given things on credit and the cost deducted from their wages. The reed cutters would live and dine in the forest, hence the provision store. Pruned reeds would be stacked at certain points on gut roads. Lorries with attimari (loading and unloading) workers would collect the reeds and pile them up on the periphery of the forest office and later they would be offloaded in the newsprint factory. For this some 15 private or hired lorries were required. Similarly there should be an agreement with diesel dealers for procuring diesel on credit for two weeks. Attimari workers were a hard nut to crack. They are natives of Pariyaram on the way between Chalakudy and Vazhchal. Pariyaram was said to be the hub of rowdies and the workers in this sector were all goons from Vazhachal. I believe that every cloud has a
silver lining. We invited all leaders to Vazhachal and sought their cooperation and help to reach an amicable settlement regarding wages. A consensus with the workers was arrived at. They never created any problems during our contract period. Gruesome incidents had occurred elsewhere during this period but they did not affect our venture. But as a precautionary measure we had arranged at the behest of ANR a gang of 15 rowdies from Cherthala, providing them with food and shelter, to meet any eventuality. The work began smoothly by the end of 1986. ANR who assured us that he would be present at Vazhachal for 24 hours never turned up there. His excuse was that he couldn’t stay in the forest. We had to bear the brunt. Though K M Nair had initially opposed our plan, it was he who supervised the work in the forest. I had been shuttling to and fro. The Forest Department had rented out a room for us at Vazhachal. Caretaker Gopinatha Pillai cooked food for us. Things went on smoothly until a quaint incident happened. The reeds began to get dried up. I was unaware of its impact then. It was the attimari workers who enlightened me. We were dumbfounded. A lorryload of dried reeds weigh 3-4 tonnes instead of 12-15 tonnes it should. Thirty tonnes of green reeds got reduced to 5 tonnes. Our income got depleted heavily. If the consignment did not weigh 5,000 tonnes, a hefty penalty had to be given. After raising money from ‘blade’ companies and pawning gold of Steeltech Manager V R Nair’s family we supplied 5,000 tonnes. We found it difficult to pay off the debts and got embroiled in legal cases. Dry reeds were a bonanza for the newsprint factory which insisted on it because the water in raw reeds added to its weight. On this logic we put a Rs 10-lakh claim on the newsprint factory. Though some officers justified our stand the company’s Chief
Executive dissented. ANR emerged at this juncture and promised to settle the matter. As a drowning man catches the straw we agreed to involve him. My only income at that time was the fees from my correspondence course. The whole fees were used for debt repayment and whatever left was distributed among the Steeltech employees as wages. Meanwhile we had to face summonses from ‘blade’ companies’. K M Nair helped me in certain cases. In some cases it was a lone battle for me. As a bolt from the blue ANR recovered our pawned gold by settling the dues, but he presented to the bank a cheque we had given him. It bounced with a note `no balance’ and a case was filed against us. As there were no rules for jailing people for such an offence we were absolved. Because K M Nair was armed with all records the court was convinced of our stand giving the judgment in our favour. ANR was also ordered to pay us a compensation of Rs 60,000 as expenses. I was reticent about recovering the amount from him but K M Nair was firm. I willy-nilly agreed. But fate had decided otherwise. ANR succumbed to a heart attack. In a couple of months the cases with ‘blade’ companies were settled out of court. But the amount due from the newsprint factory still remains due.. Thus I had a tryst with an unfamiliar field in my life from which I escaped with bruises, Even at that time it was my educational programmes that helped me to survive as they do now. (The author is Chairman of the SCMS Group of Educational Institutions and President of the Federation of Associations of Managements of Unaided Professional Educational Institutions in India)
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SECRET OF KEJRIWAL’S SUCCESS The oldest media win
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ideas, ideology and radical thoughts sweep the political mindscape of people in a country, continent or the globe in PK Abrahm intervals with tsunamic force destroying the old order and creating new ones, better or worse. Jesus did it to the fossilized Judaism much after Buddha and before Muhammad who unleashed tsunamic thought waves in the then known civilized world. Marx, Lenin, Mao and Gandhi were revolutionaries who changed the world around them with the power of their thoughts. In independent India, some of our well-known politicians brought out massive changes through these means.
door-to-door (squad) and direct faceto-face (word of mouth). The BJP in 2004 through its high-tech poster boy Promod Mahajan mounted a multimillion-dollar campaign using mobile, internet, online and nationally circulated mega newspapers. One thought the ‘India shinning’ slogan would fetch it votes but failed to shed any light in the massive vote bank of rural, illiterate, poor India who en masse voted UPA I to power. The same old media communication again ensured the UPA II to power in 2009, which is now threatened by an under-
post with lengths to spare. It shook the foundations of all established parties from Kashmir to Kanyakumari. They went on a soul-searching, fact-finding muddle and came out muddle-headed with reams of conclusions and recommendations. The Congress blamed the CAG for bringing out the media for reporting CWG, 2G and coal G and shielded the other Gs (Soniaji, Singhji and Rahulji).The media also played on the price rise. Dikshit’s 15 years of achievement, metro, roads, parks, gardens, games and festivals paled in the brutal murder and rapes of scores of women, sky-high prices of electricity,
Fifteen years in power, all Congressmen lost the sensitivity for common men. They forget the need of the people, and the growing anger and frustration.
The V P Singh phenomenon on Bofors gun smoke, the BJP wave created by the Advani rathyatra which put Vajpayee on the Delhi durbar for five years from 1999 and the subsequent return of the Sonia-Manmohan axis and rejuvenation of the grand old party (GOP) of the Indian National Congress in 2004 and holding on to power in Delhi are examples of thought waves of tsunamic proportions among voters created by old media, mainly print (press), visual (TV), audio (radio) and outdoor (hoardings, wall paintings,
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Since the visual media old or new is beyond their reach what exactly influenced the poor, marginal Aam Aadmi to vote for AAP and the broom-wielding Kejriwal? Is it inflation? Or lack of onion or essential items or all-around corruption? They are contributory, and the poor in India suffered such deprivation in silence though ages. The underdog image carefully crafted around his gray muffler and broom and Gandhi topi resonate a chord among millions of Aam Aadmi in Delhi.
In the political landscape changes were brought by igniting the imagina-
tion of people and getting their votes. Indira Gandhi’s victory over the geriatric Congress leadership, dubbed syndicate’, on a simple slogan’garibee hatao’ (in the 1970s); Jayaprakash Narayan dethroning Indira through janata power, Indira’s return to power on inflation and good governance (read as onion price in the North),. Rajiv’s and Rao’s coronation on the Prime Minister’s gadi (1984 and 1991) were on tsunamic thought waves unleashed by political parties through a combination of media and communication platforms.
ket surveys, paid news, free news and counter-points. But in Delhi, as in other parts of India, where 80% live in one-room tenements, slums, huts and crowded colonies, without water, electricity or drainage, the media, old or new, are beyond their reach. Still the majority of the people were informed, the new waves of political thought reached them, swayed them, the communication caught their imagination and made them act. The communication created awareness, interest, decision and finally action en masse. Kejriwal won hands down.
dog who suddenly barked and burst to the National Capital Region’s political scene, in Delhi. The immediate loser was the Congress. Fifteen years in power, all Congressmen lost the sensitivity for common men. They forget the need of the people, and the growing anger and frustration. The ruling class, consisting of top politicians, ministers, bureaucrats and corporates forgot the people’s needs, and they became the new oppressors. Such reigns always get booted out in a democracy through ballot and in other cases by bullet. The Soviet Union, East Europe, China, Latin America and recently the Middle East bear testimony to this. In a minor way Arvind Kejriwal and his AAP did succeed in creating a tsumani in political thought which caught the imagination of the voters in India’s Capital Region where Dikshit & Co. ruled for 15 years as solid rock immovable. An unknown entity who came to public space hanging on the coat-tails of Anna Hasare, derided by Dikshit asking ‘Kejriwal, who?”, came from behind as a dark horse and breezed past the finishing
Jan Jan 31 31 -- Feb Feb 28, 28, 2014 2014
water, onion and other essentials. The culture of five-star and high-end shopping malls did not match well with Aam Aadmi, but realized only when kicked out by voters. The BJP was more composed and less pathetic. They got the largest number of seats, 32, only four less than the magic number to form government but the spin doctors did not bargain for horse-trading knowing the electoral mood. They bragged on Modi magic and decided to chill in the opposition. Finally the media. They came and said that it was the new media that pulled the rabbit from the voters’ hats. The new media (the internet and related platforms, social networks, Facebook, YouTube, Twitter, e-mail, blog, mobile phone, mobile internet) was extensively used, but mostly to collect donations from abroad and educate digitally addicted, who seldom go to a booth to vote in any election. The old media, the press, the print, TV, radio,and outdoor, played their loudest noise, as in any election with their breaking news, scoops, exclusives, opinion polls, mar-
The other two, Congress and BJP, are far away from Aam Aadmi. The image and the slogan for a change from the elitist, pompous, affluent, corrupt, insensitive went deep into the Aam Aadmi psyche. This was brought repeatedly into the minds of each Aam Aadmi through the oldest media, ie direct personal contact, face-to-face communication and the power of spoken words and wordof-mouth. Hundreds of Aam Aadmi squads of two each went to each and every voter in huts, slums, crowded narrow streets and footpaths and exhorted them to vote for their own party, ie Aam Aadmi. Every politician worth his salt knows the power of such communication. Christ, Gandhi, Marx and Mao and their followers know it. Pope Francis practises it. His words and simplicity are resonated through the humblest parish priests through millions of pulpits all around the globe every Sunday. This is the oldest media. And most powerful.Kejriwal copied it raising the broom as the symbol to sweep the past into the dustbin. Will he win? If he translates his words into deeds, yes; otherwise Kejriwal will be a short-lived wonder. (The author is Dean Development, XIME, Kochi)
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FISAT excels in commitment to society
P
aul Mundadan is the new FISAT Governing body Chairman. Paul, a native of Angamaly and presently residing at Ernakulam, is also Manager in Corporate Service Department of Federal Bank Ltd. Apart from this, currently he adorns the positions of All India General Secretary of Federal Bank Officers Association (FBOA), General Secretary of FBOA Educational Society, Trustee of Hormis Memorial Foundation, State Senior Paul Mundadan Vice President of All India Bank Officers’ Confederation (AIBOC), General Secretary of All India Private Bank Officers’ Federation (AIPSBOF).
Federal Institute of Science and Technology (FISAT) is an educational initiative of Federal Bank Officers’ Association Education Society, started in 2002. It is situated at Hormis Nagar Mookkannoor in a sprawling 40 plus acre land and 5 lakh plus square feet built-up area. There are more than 3,000 students studying in various streams of BTech, MTech, MBA, MCA and also it is a re-
search centre of MG University. The college has all infrastructure, facilities and a very high percentage of placement service in highly reputed companies. ``Focus to Excellence and Commitment to Society is the motto of the institution. Upholding its social commitment, hundreds of economically weaker but meritorious students are studying in FISAT under Fee-waiver scheme. The institute has crossed excellent existence of 11 years and has launched projects like Decennial homes to poor as part of its Decennial celebration,” said Paul.
Muthoot Finance posts net profit Rs 194 crore M
uthoot Finance registered a net profit of Rs194 crore for the quarter ended December 31, 2013 and Rs 599 crore for the nine months from April to December, which is against Rs 784 crore in the same period in the previous year, a dip of 24 per cent. Commenting on the results, M G George Muthoot, Chairman, said the company was glad RBI had relaxed the LTV cap from 60 per cent to 75 per cent. He hoped this measure would enable Muthoot bring back its customers who moved to the unorganized sector in search of optimum value for their personal assets.
of LTV cap to 75 per cent will enable us to bring back customers who moved to the unorganised sector.
The Board has decided to compensate its shareholders by approving payment of second interim dividend of 20 per cent on face value of Rs 10 per share.
George AlexanGeorge Alexander Muthoot der Muthoot, Managing Director, said Muthoot also plans home loan considering the fact that regulatory uncertainty has almost come to an end; businesses shortly. The group is enthe Company can devote more time to visaging to commence a subsidiary developmental activities. We have en- company to handle the new portfolio. gaged the services of Mckinsey for ad- As a part of the group’s strong footing vising us on improving the productivity in hospitality industry the company has in gold loan business. Though there acquired a resort at Costa Rica and has been a drop in the loan portfolio would be opening resorts at Mararikuduring the quarter, we hope relaxation lam and Fort Kochi soon
Early he had held positions like Kerala State Secretary of Kerala Catholic Students League (KCSL), National President and acting President of All India Catholic University Federation (AICUF), Asian Council Member of International Movement of Catholic Students (IMCS) and has visited several foreign countries and was also the Charter General Secretary of United Nations Youth Organization (UNYO-India). His family comprises wife Mary Paul and two sons, Jithin, who is studying BCom, and Joyal, who is in eighth standard
Federal Bank to recruit 3,000 employees
F
ederal Bank plans to recruit about 3,000 employees and to add 300 branches in the next three years and the bank presently has about 10,126 employees on
transactions. 26 technology products have been launched by the bank so far and a new product will be added in two weeks which would enable easy cash transactions between
its rolls. “Around 3,000 employees have been recruited since last three years and we are planning to employ another 3,000 in the next three years. 340 branches were added in last three years across the country and our aim is to add more than 80 branches every year,” said Federal Bank Managing Director and CEO Shyam Srinivasan.
customers and merchant establishments. The bank also offers a facility through which devotees can provide offerings to temples, churches and mosques through their Federal Bank accounts, General Manager (HR) Thampy Kurian said.
‘Fed book’, Federal Bank’s technology product, for which we got ‘The IBA Innovation Award’ was really useful for customers to view their
“The bank has also tied up with White Line ATM Facilities of Tata Group, Muthoot Finance and Bank Tech. Our mobile payment service has been a big hit and around 150 auto drivers have signed for it,” Shyam Srinivasan added
Jan Jan 31 31 -- Feb Feb 28, 28, 2014 2014
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T
How they matter RCBS
o cater to the requirements of the corporate world and the students who were exposed to the latest concepts and the fast changing and dynamic business environment, Rajagiri Business School (RBS) was conceived in 2007. This provided the institution the flexibility to design courses that are relevant today’s context of business, revise syllabus periodically, add new subjects and to schedule the courses as per the industry requirements. RBS started offering Post Graduate Diploma in Management (PGDM) accredited by AICTE in 2008. With the advent of various programmes in Management in Rajagiri viz. MHRM, MBA, RISER and PGDM it was proposed that all the management courses be brought under a single entity to facilitate perceptual clarity and brand building. Thus Rajagiri Centre for Business Studies (RCBS) was formed in 2009 as an umbrella organization with all post graduate management courses of Rajagiri Vidyapeetham in its domain. Today, RCBS is one of the premier business schools in South India with a sprawling campus and state of the art facilities. The presence of RCBS alumini is ubiquitous in the corporate world. Here are a few words from them stating, how they matter RCBS.
Mr Ninan Thariyan GM -- The Times of India “When a lot of my friends chose to do their MA in Economics, History, or other social sciences I decided to go for my management programme at Rajagiri knowing very well that it’s a road less travelled. The programme gave me a lot of confidence, an entirely different perspective to life. This is where I learnt my basics of handling people, Human Resources Management. Dedicated faculty, excellent facilities, good student body all that, made my stay at Rajagiri truly memorable and enjoyable”.
Mr Isaac Varghese Head- HR
BankMuscat “Rajagiri Centre for Business Studies has emerged as one of the foremost management schools in Asia. The institute has been successful in moulding young professionals with the competencies that are critical to the industry. The excellent infrastructure ( physical and academic), we enjoyed, combined with value-based education offered by the institution, address many of the contemporary challenges we face in the corporate world. The uniqueness in imparting learning from real life situations will enable the students to contribute from day one of taking up a job. The course curriculum is very relevant and adapted to the requirements of the industry. The ongoing industrial/corporate training spread over the entire duration of the course is highly beneficial and helps students to integrate theory with practice and learn from best practices all over even before commencing work. The various student development programmes, especially the rural camp and the social work, apart from instilling values would help students to be better team players and appreciate the context of the issues they deal with in professional life. Undoubtedly I can say that I spent the best years of my academic life in Rajagiri.”
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Mr Narayanan Nair Head – HR MPHASIS
“Looking back I owe a lot to this fantastic institution Rajajiri for all the fundamental conceptual strength that Rajagiri has helped me pick. I think the key differentiator for Rajagiri has been the amount of focus on social networking, being able to build social awareness, the focus on co-curricular activities and the amount of industry exposure Rajagiri has given concurrently with your education. So on one hand it helps to build a strong foundation from a conceptual perspective, and it is well- peppered with experiences and a flavor of what the industry actually does , and I think that makes one a very strong professional and it does polish you well to make a good strong beginning as far as your carrier is concerned and when I come back to the campus every time I am amazed with the amount of growth and the kind of facilities this institution has been able to build. We have a world class campus here, every picture provides a state of the art facilities from the infra structure perspective. I personally believe Rajagiri will contribute a lot of good professionals to the industry”
Prof Biju Varkkey IIM-Ahmedabad “Rajagiri is an institution that continues to provide a wonderful but different learning and life experience to its students. For a large majority the time spent as student is truly transformational, at personal level and the way one looks at organizations beyond the bottom line. The uniqueness stems from the pedagogical approach that combined science of management with application orientation, allowing students space to question, think and innovate. The environment nurtured inclusiveness and taught students to be agile when they enter the workforce. The college has definitely shaped the thinking of organizations across the globe, through alumni who occupy positions of influence and the academic extension activities it undertakes for various societal groups and organizations. The leadership and faculty team at Rajagiri continue to be source of inspiration to many who walked the corridors.”
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RN 65561/94 Reg. No. KL/EKM/116/2009-2011
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