Wednesday, 20 July 2016

Startup India: A Quick Analysis

Startup India Standup India, brainchild of Modi, is going to do wonders for the nation by creating jobs and raising the standard of living. This all-inclusive action plan will boost entrepreneurial ventures and we can expect a decent inflow of foreign funds. But before we jump the gun, let’s analyze a few of the initiatives announced.

Self-certification and registration through an app or a portal will indeed make startups’ lives so much hassle-free. This will ensure that entrepreneurs are not discouraged in registering their companies due to lack of a simple process.

Teaching students innovation and business right from an early age is going to go a long way in developing the entrepreneurial spirit throughout the country. The Atal Innovation Mission and setting up incubators will act as the trigger for interested youth and give them the right direction and supervision for their projects.

Patent protection, adoption of Intellectual Property Rights (IPRs) and legal support and assistance will make entrepreneurs feel secured and help them concentrate on their main job. Coming to the financial part of it - no income tax for three years, no capital gains tax, tax exemptions for higher values and rebate on filing patent applications – these measures would revolutionise the startup growth in the country.

And to top it all, if the startup fails, the government will assist to get it back on track; and in the worst case, it will help the startup take a faster route to exit.

This is truly a watershed moment for entrepreneurs in India; the Startup India campaign is highly commendable. Masayoshi Son, CEO of SoftBank said, “In the next 10 years India will repeat the growth China saw in the last 10 years and in my opinion, India could be bigger.”

But the major point of trouble here is the execution. We have often seen a grand vision which ultimately falters during implementation. The bane of our system has always been terrible or faulty execution.

It should not just be that governments help startups; the startups should also be involved in policy-making and startup governance. These steps should develop a healthy startup ecosystem. Next, the app, for example, for registration, should be ready and running within a few months. Who will build it, what will the cost be – these are questions that still wouldn’t have been looked at. How will teaching entrepreneurship to students and youth be included in the curriculum is not very clear, and do we even have enough qualified teachers to teach on this subject?

In no way am I demeaning the efforts of the government in trying to support new businesses, promote entrepreneurship and thus, unleash the power and energy of young India. But care should be taken to monitor the progress and the status of these action points. It is absolutely essential that we see these ideas actually see the light of the day. 

Tuesday, 3 May 2016

Six months of Donald Trump as the US President: What will happen?

If at all, Donald Trump does become the next US President, it is going to send shockwaves throughout the world. The Economist Intelligence Unit has listed Trump presidency as one of the top 10 global risks and such concerns are not unfounded. As much as we have seen and liked Trump – the astute businessman and the stern interviewer, we are yet to see his political persona; the few glimpses that we see these days don’t look very promising.

Trump has a rich business experience, probably more than any previous presidents. And his supporters expect him to resurrect US economy just the way he has built the Trump Empire. One of the main talking points of his proposals – the immigration reforms, where he talks about deporting about 11 million undocumented immigrants and building a wall between Mexico and US - let’s assume he implements this first up. This will significantly reduce cheap labour and affect agriculture and allied industries badly, leading to sharp rise in food prices. According to American Action Forum, this would cost the federal government about $400 billion and reduce the GDP by $1.6 trillion; stabilising this would take 20 years.

Trump’s tax plan has garnered a lot of praise from businesses, hedge funds and individuals. But a closer look reveals an enormous tax revenue loss. Such an act would lead to more business investment, more jobs, faster GDP growth and a bigger economy but also dramatically amplify the budget deficit and the spiralling US debt. And markets are not going to react too kindly to that. Investors would be spooked and would start demanding higher interest rates on US treasury bonds.

But all these points aside, what happens to the various bilateral relations of the US? Trump has already made some scathing remarks against China, and China wouldn’t like to forget it easily. Though he looks pro-India, and traditionally Republicans are so, India won’t really feel assured of his intentions. His statement of tearing up the Iran treaty has already sent jitters in international circles, and ‘backing Putin 100% over Syria’ might not go down too well with US’ traditional allies. The first 6 months would be a testing time for all the foreign diplomats and embassies.

All this will only happen when Trump is allowed to implement all that he has preached. We have seen it umpteen times what is promised before elections is often not what actually happens after that. Trump does not have many allies in the Congress and his ideas might never get the final approval to become laws. He probably might realize soon enough that running the nation as its president is not quite like running a company as a CEO. But till then, the entire world will be on tenterhooks, not knowing what next Donald Trump would have up on his sleeves. His intentions might be to make US the strongest economy but it might end up sowing the seeds of an uncertain and unstable global future.


Friday, 8 April 2016

Jewel..In a Traffic Jam!!

When you are studying in one of the top B-schools of the country, you invariably get opportunities to attend conferences, participate in different events and meet industry stalwarts. You also get a chance to watch a yet-to-release movie and have a tete-a-tete with the director himself. Mr. Vivek Agnihotri, the much-acclaimed TV and movie director, columnist, blogger and a debater, was kind enough to screen his new movie Buddha in a Traffic Jam at SPJIMR, Mumbai.

The title of the movie does not give out much of the storyline. But it is not difficult to guess that the name is in fact, a metaphor; it is not just unusual but conveys a deeper message. This movie is about how a smart management student studying in one of the biggest B-schools in India and the world, with fresh and noble ideas, gets entangled in the murky world of politics and corruption. The movie tries to expose the sinister nexus between the Naxals, NGOs, academia and the acclaimed scholars and their motives and does it in a quite unabashed way. It explores how students in certain universities are systematically brainwashed to become intellectual terrorists.

The movie also examines the themes of moral policing, campus politics, plight of the adivasis living in tribal areas and the middlemen who eat up all the money before it reaches the intended recipients. The movie pokes its viewers by questioning whether India, a young nation ridden with corruption and poverty, can indeed become a superpower with its never-ending fight between socialism and capitalism.

The protagonist of the movie, Vikram Pandit, played beautifully and confidently by Arunoday Singh stands for Buddha, a learned person who has ideas and the zeal to bring about a change in the society. But he can’t really attain enlightenment because he is stuck in the traffic jam of bribery, dishonesty, socialism, capitalism, the system and the establishment. Anupam Kher plays the economics professor, Prof. Batki in a very understated but effective manner and the range of emotions he shows in the movie look so effortless. Pallavi Joshi and Mahi Gill play their characters with grace and poise, just what the film needed.

Many people staying in the urban areas are not actually aware about the Naxalite movement. Maoism, the predicament of the tribals and the off-the-limit Bastar region are topics which we just read in the newspapers sometimes and ignore. I hope this movie starts a healthy debate about the various themes that it covers and engages the population that is not well-versed with these things, in meaningful conversations. Not that everyone has to agree with what is shown in the movie; we are a country where everyone has the right to voice his / her opinion (or so we think). But this movie should atleast enable the young minds to think, read and talk on these subjects.

We have a society where new ideas, new visions are not given a straight path to thrive and flourish. This Buddha is looked at as an enemy of the society, someone who is challenging the status quo and someone who needs to be taught a lesson before he sets a dangerous precedent. This traffic jam needs to be cleared if we want more Buddhas to emerge from our nation.

This corruption satire has already received nominations and awards at various prestigious film festivals around the world including Madrid, Jakarta, Mumbai and Jaipur. The film’s promotional campaign under the theme #IAmBuddha has also started to catch on.

A movie such as this is hard to release in India; finding the distributors is a nightmare. Small budgets don’t allow the movie to be strongly marketed; it deters the film from reaching all its target viewers. A must watch for all students, their teachers, the intellectuals and the establishment, this film is indeed one of the most hard-hitting movies to come out so far this year. When Vivek Agnihotri in a response to an answer said, “India needs freedom from mediocrity, inefficiency and incompetence”, I couldn’t agree more. Kudos to the director who has dared to make a film on such a topic with utmost passion and sincerity. I hope this jewel does not get lost in the traffic jam of Indian cinema as another fine movie which couldn’t reach its audience.


Wednesday, 6 April 2016

IAIP Annual Forecast Event – Key Takeaways

The 8th Indian Association of Investment Professionals (IAIP) Annual Forecast Event held at the historic International Convention Hall of Bombay Stock Exchange (BSE) on 1st April 2016 saw large attendance from various market leaders, industry professionals, students and investors. Experts shared their views and outlook on the financial, economic, fiscal and monetary topics and indicated what they thought about the prospects of the Indian economy in the next financial year.

With assistance from my friend Pranav Pendyala, I have jotted down a few significant points discussed in the session.

General Overview

  • BSE Sensex clocked first yearly loss in the last four years
  • Negative interest rate environment in major parts of the globe has rarely happened earlier. Banks might start charging the public for keeping their money with banks.
  • Rate cut not being implemented by banks though it has been initiated by RBI. This is due to the liquidity crunch for banks. This crunch leads to higher WACC.
  • Urban consumption of goods and services is increasing along with volatility.
  • According to BASEL III regulations, more capital is being demanded on banks’ balance sheets. Private banks have an advantage over public banks as private banks already have more capital than their public counterparts.

2016-17 Projections: Survey Results

1. Best Asset Class for Risk-adjusted Returns
a.       Equities: 58%
b.      Government Bonds: 9%

2. Real GDP Growth
a.   Between 6.5% and 7.0%: 29%
b.      Between 7.0% and 7.5%: 40%

3. CPI Inflation
a.       Between 4.5% to 5.0%: 21%
b.      Between 5.0% to 5.5%: 19%
c.       Between 5.5% to 6.0%: 20%

4. 10-year GOI securities Yield
a.       Between 6.5% and 7.0%: 34%
b.      Between 7.0% and 7.5%: 39%

5. Crude Oil (Brent) prices– per barrel
a.       Between USD 35 and USD 40: 21%
b.      Between USD 40 and USD 45: 22%
c.       Between USD 45 and USD 50: 22%

6. Gold Prices
a.       Between USD 1100 and USD 1200: 29%
b.      Between USD 1200 and USD 1300: 28%

7. Average INR – USD Exchange Rate
a.       Between 66 and 68: 28%
b.      Between 68 and 70: 22%

8. Target for BSE Sensex
a.       Between 26000 and 28000: 24%
b.      Between 28000 and 30000: 35%

9. Sensex EPS (Corporate Profits)
a.       Between 0% and 10%: 44%
b.      Between 10% and 15%: 41%

10. Most critical driver for Indian Equities
a.       Government policies and reforms: 39%
b.      Corporate Results: 22%

11. Most critical concern for Indian economic growth
a.       Global Low Growth Environment: 45%
b.      Government Policies: 26%

12. Compensation expectation in Finance industry
a.       Increase between 0% and 10%: 39%
b.      Increase between 10% and 20%: 41%

Assessment of FY 2015-16

  • GDP Growth of 7.5%
  • Volatile global environment
  • Global factors have impacted the market more than domestic factors

How FY17 will be different from FY16

  • Nominal GDP growth will be almost equal to Real GDP growth
  • Big hit on banks due to NPAs
  • Rural economy should be better this year comparatively
  • Back-to-back monsoon failures for the past two years not expected to continue


Wednesday, 9 September 2015

Biases Explained - Through 'Twelve Angry Men'

The movie Twelve Angry Men begins with a jury of 12 men who are locked in a deliberation room to decide the fate of an 18 year old boy from the slums who is accused of murdering his father. All the evidence, on the face of it, points to the fact that the boy is indeed the murderer, and a guilty verdict would send the boy to the gallows.

Now, even before the discussion between these 12 men begins, most of them are convinced that the boy is guilty and they would be done with this thing soon. Most of them, except one! And the tale begins..One juror who wants to atleast discuss the case threadbare, who wants to examine the facts one more time, who wants to be absolutely sure before they all ask the judge to pronounce him guilty.

An intriguing story, devoid of any rosy scenery and glamour; the movie also gives an amazing lesson about how biases influence our thinking and how biases clog our logic and our minds. I was fortunate enough to learn this concept in such an interesting way in my college and here, I try to put them down in words. Let us look at a few types of biases that we come across in the movie and try to understand them.

Juror #3 is very biased towards the accused teenager, and that is because his own son had once hit him on the jaw and had run away from home at the age of 15. He says, "I've got a kid...when he was fifteen, he hit me in the face...I haven't seen him in three years. Rotten kid! I hate tough kids! You work your heart out (but it's no use)". This text explains that this juror is biased towards all teenagers who rebel and who act tough. So, he just generalizes his personal experience and lets this logic influence his thinking about the slum kid.  He uses the actions of his son towards him as an anchor around which his arguments revolve. This type of bias can be called 'Anchoring Bias'.

Look at what Juror #4 has to say to support his argument. He says, "We're missing the point here. This boy - let's say he's a product of a filthy neighborhood and a broken home. We can't help that. We're not here to go into the reasons why slums are breeding grounds for criminals. They are. I know it. So do you. The children who come out of slum backgrounds are potential menaces to society." He assumes that dirty locales and domestic fights are a norm in slum areas, and children living there have crime and villainy drilled into their minds. He, in fact, is very convinced that they are a social nuisance. This bias can be a 'Stereotype Bias'.

Juror #10 stereotypes all those people who live in the slums negatively. He says, "They don’t need any real big reason to kill someone, either. You know, they get drunk, and bang, someone’s lying in the gutter… most of them, it’s like they have no feelings". He assumes that all those kids who are born in such conditions and who have been exposed to violence from a small age, turn out to be notorious, and can murder anyone they want. This belief convinces him completely that this kid had indeed killed his father. He has this image of slum kids and uses this information to interpret it in a way that confirms his beliefs about teenage kids. This bias can be called 'Confirmation Bias'.

It's quite fascinating how innovative and entertaining learning can be. An amazing movie, which holds up beautifully even if seen today - a must watch for all.

TidbitDid you know Twelve Angry Men was remade in Hindi as Ek Ruka Hua Faisla in 1986 and starred accomplished actors like Pankaj Kapur and Annu Kapoor?

Wednesday, 12 August 2015

What Freedom Means To Me!!

Freedom is important, it is essential. It is an inevitable part of our lives; in fact, we have started to take it for granted. Today, we might not even be able to answer what freedom actually means to us. Let’s try to find a response to this.

What freedom means to me? Freedom, to me, is making my own choices. I should be able to go where I want to, I should be able to live where I want to, and I should be able to do what I want to. I would love to be free to be able to decide my own career path and not just go with the herd. I would be thrilled to be able to study something that I like instead of something that I should. But try digging beneath the surface more, and you will find that the problem lies with our notion of freedom.

Liberty is not just for material things. It is deeper, more profound. Freedom to me means breaking the shackles of our minds, our suspicions and our doubts about others. Our society is too rooted into beliefs and conceptions that make it judge anyone and everyone. “A man who cries is not really a man”, “A woman who wears short clothes is characterless”, “He is gay. Therefore, he is not normal”. These are just some of the prejudices that are absolutely common in our society. Freedom comes from within, and we won’t be able to experience it until we let our minds flow free. Freedom is when you don’t make yourself and others a slave of your own narrow thinking, of your own biases and of your own judgement.

#MyFreedomLet me fly, let me travel. Let me make mistakes, let me learn.

Tuesday, 28 April 2015

Indian B Schools: The Ranking Dilemma

We all know how difficult it is to get into an Indian B-school, what with having to first appear for multiple entrance exams, followed by a rigorous GD-PI round. Some institutes have a few other tests or activities as well before one gets an admit to any of the few coveted B-schools in India.

But there is always a dilemma about what institute to choose. Which institute is better than the other, what are the placement records, faculty, how is the quality of students and campus life etc. are few of the questions that bog down the students' minds before they join a certain institute.

We can easily find the rankings of the Indian B-schools on internet, published by various sites. But the problem here is that most of these sites have a disparate computation logic or a novel formula considering the various factors. Some give preferences to location, others to placement, and some to legacy. No one is completely wrong and no one is completely right ! But what we can do is go through all the rankings and then devise our own rankings for the schools that may help us in make a better conclusion. And this is what I have done here.

I have collated quite a few rankings published on various websites and then created my own list based on it. Hope this helps !!

B SchoolsCareers 360Business TodayTrakWikipediaCareer AnnaEduniversalMBA UniverseTest FundaMoney ControlMBA ClubCareer LauncherOutlook IndiaFinal Rank
IIM - A1111121111111
IIM - B221332422
IIM - C223232233323
ISB Hyderabad4244
XLRI Jamshedpur73353104556635
FMS Delhi4446481212107946
IIM - L8459664557
IIM - K975971371068858
SPJIMR Mumbai12577615589101069
IIM - I1386138118797710
MDI Gurgaon1168897101311111711
IIFT Delhi171091212181514111313812
NMIMS Mumbai320111515239111218271213
SOM IIT - B Mumbai519201352419161814
IMI Delhi910161411741251115
NITIE Mumbai141212161046141615121016
JBIMS Mumbai30161410112813921141417
DMS IIT Delhi3151519629251422191618
TISS Mumbai112020201519
IIM Shillong1820212315121320
IMT Ghaziabad201318241616298192121
IIT Kharagpur151718202822
XIM - B1316171935221323261423
SIBM Pune291417144420211723924
IIM Ranchi253620222517222826
SCMHRD Pune401830272324221527
IIM Trichy202518393028
IIT Madras6373729
IIM Rohtak242023493130
IIM Raipur262026472931
IIM Kashipur2027413332
Sydenham Mumbai423230332633
IIM Udaipur2030523234

It is worth noting that some sites have not considered some schools for rankings, while some B schools did not want to share their details with the websites for rankings. Also, the final rankings are not program-wise; they are at an institute level. Also, some of these sites have not updated their rankings, which is why there can be some discrepancies.

I would be adding a few more schools to this list and try to make it an exhaustive index. Let me know some other rankings that I should consider and some other schools that you would like to see in the list. Lastly, do look at all the factors and make an informed decision.