Wednesday, June 25, 2008

Jai Kissan!!

Today, I was watching a Movie called Summer 2007 starring Sikandar Kher, Gul Panag, Ashutosh Rana. The Movie portrays shades of Farmer Suicide problems, the terror of Sahukars / Mahajans, the friction between Money Lenders and the people who aspire to bring about a change (like Microfinance) and eventually, some enlightenment of a bunch of Medical Students. I would rate the movie quite average except that, the message which the movie carries is excellent. Towards the end, it shows some real thought-provoking facts:

1) When there is a war raging, it is very difficult to stay out of it. One day the war will get to you.
2) Since 1997, 150000 farmers have committed suicide in 7 states of India, according to Government figures.
3) Maharashtra alone accounts for 20% of the total deaths.
4) Over the last 10 years Governments changed both in the state and the Centre however the suicide rates in Maharashtra kept on increasing at an alarming rate of 105%
5) Succumbing to the public outcry, the Central Government announced a Loan-Waiver scheme of Rs. 60,000 crore in the Central Budget of 2008.
6) However, this loan waiver was only for Institutional Credit.
7) Millions of farmers continue to suffer at the hands of the Money Lenders!

If we go into the distribution of how much is waived-off where, outta this Rs 60,000 crore waiver, we find out:

Commercial Banks Rs 12,000 crore
Cooperative Banks Rs 37,000 crore
Regional Rural Banks Rs 11,000 crore

Evidently, this doesn't include the Non-Institutional Credit (the credit accrued from unorganized sources / Money-Lenders against mortgage of Non-Liquid Assets). Indeed, its very difficult for the Government to also take care of the Non-Institutional Credit, as it is almost impossible! Majority of the farmers do not have sufficient securities or assets against which they can draw loans from the Banks. Eventually they end up suffering at the hands of Lalas and Sahukars, with interest (Sood) mounting on and on and on, ultimately overtaking the principle itself.
The whole life hence passes in the slavery of somebody else. What can be more ridiculous than this, in a country which is called "FREE" ? What can be more embarrassing for a country whose currency coin itself is embossed by the images of crops?

Clearly by any yardstick, this scheme is a Welcome Step by the Government and we all hope that it would reduce the agonies of a huge number of suffering farmers. But, Is it a medicine which cures from the root of the disease? I guess, NOT. This is just a remedial medicine which can provide relief for a certain amount of time. Unless the hygiene is maintained, the disease is likely to resurface again. It is ultimately an economic cycle where every link plays its own role. The due importance of the loans & their payback have to be somewhere realized by the farmers. They have to stay prepared to take care of the payback themselves.

By waiver schemes like this, the pain can only be shared, it can't be eliminated forever!! Looking at the flip side of this relief step, we are in turn also weakening our farmers by sending across a message that irrespective of the goof-ups/mismanagement by the farmers, the Government is with them. Unfortunately, this is not the way economics work! The economic equation also has to be satisfied. They can not just be ignored for the sake of collecting goodwill.

Rahul Gandhi in his Post-Budget speech in Parliament classifies India into two. The Excerpts from his Speech are: "Mr Speaker Sir, there are two distinct voices among India's people today. The louder of these voices comes from an India that is empowered, an India that has proven to itself and to the world that it will shape the future. It is an India rich with opportunity and talent, straining to be unleashed.

The other voice is yet to be empowered. It is not as loud, but reverberates across the country. It is the voice of disenfranchised people reminding us that they too have potential to fulfill. They too are enterprising, hardworking, and self-reliant, and they ask only to be given an opportunity....."

This first step by the Government, has to be supported by solutions with which our India-2 (as explained above) may empower itself for the future so that there is no suffering again, so that no waiver-scheme needs to be announced again. Lets not let it take the form of a perennial epidemic. I truly support Rahul Gandhi when he says "they too have potential to fulfill" and "they ask only to be given an opportunity". But, that opportunity being sought definitely is something more than just the waiver relief. It has to be supported with better irrigation facilities, better and organized market structure which can get them their due compensation, better assistance in terms of technology and subsidy on equipments etc. The driving step of this waiver scheme really needs to be backed by the power of all these factor inputs. Lets not just repeat what happened in 1990 and come up with another waiver package by 2020. Lets treat the problem the way Homeopathy does! :)

Lastly, I just hope that even this Rs 60K crore package serves its purpose and reaches to the needy hands rather than stuffing the pockets of Sarkari Babus and Afsars who do not even smile unless they are bribed!

- Sharma

Wednesday, June 18, 2008

Tashany Tuesday

It was another usual day! Like always, Me and TMP were struggling to appear like swimmers and somehow manage not to look like 2 Big Jokers again, with small small mini-size kids playing around in the pool. :)

The weather was awesome, with only light intermittent drizzles hitting us while swimming [as we spend 80% of the time with our head out of the water ;)], we spotted an opportunity to drive the frustration of our inability away. TMP suddenly floats an idea (struggle to keep afloat continues) in the pool: "yaar, Juhu chalte hain Bike par ghoomne!" and without a thought I said "Chal" and we were out of the IIT Campus within an hour.

The Drive from the Campus to Juhu and then back, was absolutely amazing with the Bike zipping and cutting through the wind!

It was really a superb experience especially enjoying the breeze at the Beach with the Chaats being in full abundance. Ragda Pattice, Sev-Poori, Mixed Chaat, Pani Poori, Paav-Bhaaji, Rava Masala Dosa, Bhutta, Paan..! This was the list of items that we consumed in a way almost as if we caught a binge eating disorder or as if we came out of a prolonged malnourishment! :D But whatever we say, we enjoyed every bit of it! I just hope more such experiences are in store. Thanks TMP! :)

- Sharma

PS: TMP rarely known as Triratna Parmeshwar Muneshwar is a not-so-often harmful creature found either in the Jungles of IIT Powai or in Deva's Room (B513/H13) and is a not-so-sincere aspirant of swimming just like me! :P

Sunday, June 15, 2008

Hello Brother!

Indian Companies are truly enjoying the romantic weather for acquisition by wooing foreign giants. After the exit of Bharti from the talks, Anil Ambani led Reliance Communications (RCOM) has pitched in to bid for the acquisition of the South-African Telecom giant MTN. Both the companies have come into an exclusive 45 day agreement to conduct talks for the negotiations. The deal is estimated to create a combined entity worth about 70 billion dollars and could have operating profits higher than RIL, India's biggest private sector firm. MTN has 70 million customers in 21 countries spanning from Asia to Middle East to Africa. The Economic Times report that the proposed EBITDA (Earnings before Interest, Tax, Depreciation, Allowances) of RCOM-MTN combine would be INR 45,000 crore, 50% more than that of RIL, for 2009. But, Anil Ambani's ride of fancy struck a roadblock, this time in the form of none other than Big Bro Mukesh Ambani led RIL.

What is the Dispute?

Reliance Industries Limited (RIL), India's largest private sector company, claims that it holds the Right of First Refusal in case of Sale of RCOM as per the Jan 12, 2006 agreement. RCOM argues that the agreement was unilaterally signed only by RIL officials when the ADAG companies - Reliance Communicaions, Reliance Capital and Reliance Energy were still with Mukesh Ambani led Reliance group and the Anil Dhirubhai Ambani Group came into existence a month after the agreement. Also, they point out that no such clause was included even in the Article of Association of RCOM. It alleges that the objection by RIL is purely driven by the intent to sabotage the deal and it would vigorously defend any legal action (if taken) by the latter.

On the other side, RIL counter argues that the validity of the agreement has never been questioned by RCOM ever since it was signed and if the deal goes ahead, RIL will sue RCOM for damages and compensation at the same time treating MTN as a defendant for the breach of Agreement. RIL has written to MTN as well as the Investment Bankers / Intermediaries involved in the deal, clarifying its stand.

What is Right of First Refusal ?

The Right of First Refusal enables its holder a privilege to come in transaction with the owner (seller) before the owner (seller) goes ahead with transacting (selling) it with (to) another party. In this case, if the Agreement is deemed valid, RCOM is bound to first offer RIL if it interested to buy RCOM.

I AM SURE YOU MUST BE HIGHLY CONFUSED BY NOW with thoughts popping up like - "But, RCOM is not selling itself.. rather it is going to acquire MTN.. so why does RCOM need to first offer its sale to RIL...?? etc. etc.".

The Catch is that if the deal is successful, first MTN will go for a complete buyout of RCOM and then, ADAG will acquire the controlling majority shares in MTN. So, the deal involves a step where RCOM has to first sell itself! :)


So, what could be the motivation of RIL chipping in and showing Yellow Light to the two Telecom Majors ? Is it purely driven by sibling rivalry between the two brothers in the quest to outperform each other professionally? Though the two bros share the same 18 story mansion "Seawind" at Cuffe-Parade in Mumbai, when it comes to dhandha, none of them shies away from locking horns on a business issue. Its true that after the death of their father Late Mr. Dhirubhai Ambani, the two have emerged as the strongest Warriors of Indian Corporate Arena but at the cost of a bonding which most likely once existed when they were kiddos!
In this Number Game of millions and billions of dollars which is beyond the personal spending capability of any human being in his lifetime, power and more power is probably what keeps the honchos motivated.

In this dispute, which Brother takes an edge is still to be seen but one thing is for sure that its a battle being fought within the Closed System called - AMBANIS!

- Sharma

Friday, June 13, 2008

Oh! But I am an "Engineer"

These are my thoughts on a recent discussion amongst the members of IIT's ISMP (Institute Student Mentorship Program) on the online group. The topic was raised by good friend - Abhinav based on an incidence which he came across last year.

He says: "Last year in August itself my mentees asked me whether they should go for a MBA or not.. some even asked me to tell them how to prepare for CAT. I was quite disappointed with this attitude the Freshmen were carrying as I never thought about it when I was in First year and I am still quite enthusiastic about Engineering but anyways I can't impose my thoughts on someone else.
So what is the best way of replying to this question ? Do you straight away say no and tell them that Indian Government is anyways spending lakhs on us and why do you wasn't to waste this degree by going for a MBA ?"

I feel that it should not be viewed as the Government or Tax-Payers wasting their money on us. In a way, it can be seen as a meaningful investment as well because especially where India has struggled to produce/establish quality Educational Institutions post independence, very few like IITs are atleast nurturing the talented kids to take care of the intellect demand of the Industry across all disciplines.

For instance, I feel that even if an Engineer with good Academic Record having an Inclination for his own Engineering Stream goes ahead to be a top banker or a top lawyer, its more than the purpose served for the Country! Because, on the one hand the student did justice to himself and on the other, he made use of his strengths to serve the country in the way he is best capable of, which in a particular case may be banking or law practice!

I very strongly feel and verify through my observations that majority of the kids come to IIT (including most of us) not with a vision that they want to be good Engineers but because they are made to see a dream by parents, peers, seniors, family friends etc. that life after IIT will be extremely Rosy! An Aspirant slogs for JEE only in the run-up to realize this dream.

So, if you carefully observe its not the Engineering Acumen which brings most of us to IIT. Infact JEE or for that matter, no Engineering Entrance Exam in the country (to my understanding) is truly successful in testing the applicants on the practical Engineering aptitude. I pondered over this in my third year a lot, even consulted a few professors for their opinion and I have personally come to a clear conclusion for myself: I am not Mechanical Engineer by choice, it is partially by destiny and partially by the constraints imposed by various parameters during Counseling or similar processes. Though, I may be good at the subject (by chance the risk fortunately paid off! :P) and maybe able to score good grades in it but it also doesn't rule out this possibility that I maybe better and in fact much much better at something else. And, I believe that one should pursue what he/she is "bestest" at and which gives ultimate happiness!! Knowing your strengths and then choosing a career around the same perhaps increases the probability of being successful and at the same time, enjoying your work. So, there is no defined Right and Wrong! Its all up to "SELF" how best you identify yourself!

And Now, coming to what I would advise to my Mentees with whatever limited knowledge or perception I have:
Do not blindly trust anybody, listen to everyone but then don't make a decision before you are truly convinced by Logic, Facts and Experience. I have always advised and probably might still do it in future unless I am corrected: Don't make a decision simply driven by the Glamor of it or what somebody else says about it. For Example: Collect information/facts about Swimming, Dive into the Pool, Observe what swimming is about, Whether you enjoy it?, Come out (if lucky! :D), Analyze and then make a decision. Listening to wisdom of Seniors and experienced people may definitely help to get a realization of various directions. But, the call of - which direction you ought to travel should only be taken by YOU. Take an informed, aware call, give in your best and face/experience the results. This also includes accepting the Results (As taking the responsibility for the outcome of your own effort on SELF is important). So, I strongly suggest one should give the SELF ample amount of chances before giving up on a particular option. In the process, you will keep knowing yourself better and better. I have practiced it and so I do believe on it :-) So, explore as much as you can and then think about settling down (it at all you do!).

Steve Jobs rightly said in his Stanford Commencement Speech:
Keep Looking and Don't settle!!

I am back!

I am back to blogging after a period of nearly 2 years. The reason for this long pause can be explained just in one word - "laziness"! But, thanks to some recent happenings in my life, I am able to counter all the barriers and hence doing all those activities which I have always liked but failed to do or procrastinated big time just because of "laziness"! Blogging is one of them.

Trust me my "Re"start has indeed got nothing to do with the Celebs. being in news for their blogging act! :)) It is mainly because I have started feeling an inflow of time & energy somehow into my body. Lets see how long this passion lasts for!

- Sharma