Innholdsfortegnelse for June 2016 i Business Today

In 2003, the global economy started growing rapidly, after two years of lacklustre growth following the great tech crash of 1999/2000. The growth peaked in 2006, and the year 2007 continued to be nearly as good. In the western countries, the growth was largely fuelled by a housing bubble and a boom in the financial markets that were creating and trading in all sorts of exotic instruments. Only a small fraction – less than 10 per cent by some estimates – went to businesses that were not in the real estate or finance sectors. In developing countries – especially the BRIC nations – growth was driven more by real industrial capacity creation and growing consumer demand. Among the corporate houses in India, this was a time of great optimism and…

08 - 10 INCLUSIVE GROWTH WHAT: International Forum on Urban Policy for Sustainable Development Goals WHEN: June 8-10, Seoul WHAT TO LOOK FOR: Idea exchange on how to facilitate and support cities in making human settlements inclusive, safe, resilient and sustainable and identify practical approaches and programmes for sharing policy experiences, best practices, as well as innovative technologies with all UN member countries. 14 ECONOMIES OF SCALE  WHAT: Enhancing the Ease of Doing Business for MSMES WHEN: June 14, New Delhi WHAT TO LOOK FOR: A policy roundtable on enhancing ease of doing business for MSMES. The event will devise strategies to improve the outreach of regulatory reforms, including the Udyog Aadhaar initiative and the new MSME policy, among others, on the basis of key suggestions from all stakeholders. 21…

CENTRAL BANKERS DISAPPROVE OF CONCENTRATION; AND IN AN ARGUMENT WITH ITS REGULATOR, A BANK CAN NEVER WIN Some may find exposure unwelcome. Vijay Mallya, for instance, has made himself grievously underexposed since he left the shores of India, invisible save for a single picture taken in the bar of his English villa. Others may find exposure enticing. The congregation of underclad Europeans and Americans on beaches in summer may have something to do with the sun’s luxurious touch; but surely, it cannot be unrelated to the exposure of visual attractions otherwise obscured by clothes. Bankers too are human and obsessed with exposure; but they mean exposure in another sense, namely the degree of concentration of their loans. Concentration is the opposite of dispersion: the greater the proportion of loans given…

THERE IS CLEARLY A LACK OF CORRELATION BETWEEN CHINESE GDP (GROSS DOMESTIC PRODUCT) GROWTH AND METAL PRICES THAT DEMONSTRATE OTHER FORCES ARE AT WORK After China reported year-on-year first-quarter growth that showed signs of improvement, commodities have been rallying. However, a closer look into Chinese demand and GDP growth shows other factors may be more influential in the commodity rebound, especially in the economically sensitive sectors of energy and industrial metals. The energy story has changed since the race for oil market share began in the summer of 2014, just after the signing of the natural gas deal between Russia and China. As the oil price plummeted, China’s oil demand grew 6.4 per cent or 694 kb/d (kilobarrels per day) in 2015 according to the IEA (International Energy Agency.) Since…

The Narendra Modi government has promised power for all by 2019, the year its first term in office ends and it seeks a fresh mandate. The Indian electorate is likely to be unforgiving if Modi and his team fail to deliver on this promise. Two years ago, the prime minister had entrusted Piyush Goyal the task of reviving the country’s comatose power sector. The CA-turned-politician has been given independent charge of three crucial ministries. In an interview with BT’s Anilesh S. Mahajan, Goyal assured that he is well on his way towards delivering on the promise by tapping the synergies between the ministries — coal, power and renewable energy — under him. Edited excerpts: Two years ago, the Prime Minister gave you three ministries – coal, power and renewable energy…

A curious sight greets visitors arriving at Kambi village in Maharashtra’s Ahmednagar district: a large number of pipes, both rubber and plastic, stretching into the distance, their ends suspended over a dry canal bed. What is their purpose? Once every two months, for a week, the Jayakwadi dam on the Godavari river releases water into the canal for supply to Nanded town, 135 km away. “This canal was made purely to provide water for Nanded,” says R.H. Nawale, former Deputy Planning Officer, Ahmednagar. But a good deal of the water is diverted by farmers in the villages en route for their own fields using these pipes. “It is illegal, but no one does anything about it,” adds Nawale. “The villagers, too, have no choice as there is no other water…

Those were just some of the reactions to the disclosure, in June 2014, that Facebook had allowed academic researchers to manipulate the news feeds of 689,000 users for one week. The experiment, in which half of the users saw fewer positive posts than usual and the other half saw fewer negative ones than usual, was designed to determine whether the changes would cause people to write more positive or negative posts themselves. In fact, the researchers did find evidence of “emotional contagion” and published the results in a prestigious scientific journal. But their findings were eclipsed by the public outcry. Shortly after the story broke, the lead researcher issued a statement saying that he and his colleagues were sorry for the anxiety their work had caused. But Facebook defended its…

Stealing From Our Children By Kamal K. Kothari and Chitra Chandrashekhar PAGES: 192 PRICE: 300 Fortytwo Bookz Galaxy The book, Stealing from our Children, highlights how in a rapidly changing scenario, with growing population and aspirations, our economic thoughts and practices have to change. How we have to combine the fundamental approach with psychological and educational approach to provide a good world for the future generations. It draws attention to the daunting task of finding adequate food for an additional 2.6 billion people, emphasising that it would pose a serious challenge to the stability of a large number of nations. The authors give a clear message that perhaps we are living in a planet which is bursting at the seams. The facts and figures stated in the book are glaring…

How has the changing communications landscape impacted your business? Technology has changed our client's businesses and our business. It requires us to create ideas in different modes, in different channels and quicker than we had to before. We have to be able to optimise content in real time, so that we learn from the data and then deliver that in different ways. We have changed the model in which we work. A campaign that would run for six weeks of the year is now turned around 24X7. Without doubt, the speed of technology is reshaping the industry; it is changing the very nature of how companies operate. How is a traditional advertising agency like yours aligning to digital? We have made massive shifts in all our businesses to be able…

Utterly Butterly Delicious Amul! This refers to your cover story on the dairy market (The 80,000-crore Milk Market, June 5). The value-added products market has exploded exponentially over the past few years. The journey of the “utterly butterly delicious” Amul – as I remember – towards becoming the biggest cooperative movement is quite interesting to read. Being the largest producer of milk and dairy products in the world, India has experienced tremendous growth in per capita availability of milk over the past five years. Also, it is a proud moment for the unorganised sector, comprising small farmers, which accounts for a major share of the Indian dairy products market. Kudos to the BT team for bringing out such a nice analytical piece on this white gold. Namita P., Faridabad…

India's GDP expanded 7.1 per cent in the December 2015 quarter and 6.7 per cent in the December 2014 quarter. Though there has been some pick-up from where the UPA-II left, in December 2009 and December 2010 quarters (the first two years of UPA-II), the figures were 6.5 per cent and 8.3 per cent, respectively Growth in industrial production was 2.8 per cent and 2.4 per cent in 2014/15 and 2015/16, respectively. The figures were 10.5 per cent and 7.8 per cent, respectively, during the first two years of UPA-II (2009/10 and 2010/11). Here, too, there has been a pick-up from the contraction seen in the last few quarters of UPA-II FDI inflows over the 12 months starting October 2014 (Make in India was launched in September 2014) rose 29…

THE COMMITTEE WILL REVIEW THE WORKING OF THE ACT OVER THE PAST 12 YEARS ALONG WITH EXAMINING THE FEASIBILITY OF HAVING A FISCAL DEFICIT RANGE While preparing the Union Budget for 2016/17, Finance Minister Arun Jaitley had found himself on a sticky wicket. He needed more money to fund the government’s development plans without disturbing the fiscal consolidation roadmap that he had set in the previous Budget. In Budget 2015/16, Jaitley had promised to bring down India’s fiscal deficit to 3 per cent of GDP over a three-year period. To his credit, Jaitley had met the first-year target of 3.9 per cent – down from 4.1 per cent in the previous fiscal – comfortably. However, this time round, he was finding it difficult to stick to the 3.5 per cent…

On May 16, India’s premier bourse, the National Stock Exchange (NSE), declared a hefty dividend of 73 per share for its shareholders. The total payout aggregated to almost 330 crore – close to 75 per cent of the exchange’s total profit of 439.33 crore for FY2016. The huge dividend was paid despite a 44 per cent fall in net profit, although a cash pile of around `1,200 crore did help. Some say the dividend was a move to woo the disgruntled shareholders. If so, the tactic hasn’t worked, because some of NSE’s investors continue to be upset at not being given an exit option by having the exchange listed on its rival bourse, the Bombay Stock Exchange (BSE). “I never thought our investment in NSE would be so troubled,” says…

Unknown just three decades ago, ‘mineral water’ is today ubiquitous in India. Packaged drinking water is a 6,000-crore industry with brands like Bisleri, Kinley and Aquafina becoming household names. Even in the early 1990s, the per capita annual consumption of bottled water was a mere four to five litres. It has since risen to more than 20 litres. The industry is growing at a compound annual growth rate of 22 per cent and expected to touch `16,000 crore by 2018, according to market intelligence firm, ValueNotes. “The public perception that bottled water is pure and safe, fuelled by intense advertising, led to the sales explosion,” says Arun Jethmalani, Managing Director, ValueNotes. “The increase in the number of tourists, both foreign and domestic, gave it a further fillip.” The demand is…

Mammen Mappillai was one of Kerala’s early entrepreneurs, with fingers in many pies Indian media moguls are not usually given to writing about themselves. By and large, they are a tight-lipped lot, in public at least. That could be changing. Not long ago, Zee TV group boss, Sub-hash Chandra, published his autobiography. Now the memoir of the late K.M. Mathew, Chief Editor of the Malayala Manorama group, is out. Mathew actually wrote his book between 2002 and 2007 in Malayalam. This was later translated into English. While Chandra’s book deals with his climb from modest beginnings to billionaire days, in The Eighth Ring, Mathew chronicles his father’s rise to wealth, fall to near poverty and subsequent triumph. He deals less with the rise and rise of Kerala’s largest circulated daily,…

A Giant Merger The country’s biggest lender, State Bank of India (SBI), has sought approval from the government to start negotiations for merging its five subsidiary banks and Bharatiya Mahila Bank with itself. The balance sheet of the consolidated bank will be around `37 lakh crore, up from SBI’s `28 lakh crore. Speaking on the merger news, SBI Chairperson Arundhati Bhattacharya said that the benefits of the merger would be huge and the aim is to complete the merger in the current fiscal. The five subsidiaries up for merger are State Bank of Mysore, State Bank of Bikaner and Jaipur, State Bank of Patiala, State Bank of Travancore and State Bank of Hyderabad. Cook Learns Indian Recipe High-profile visits by business honchos have become the new indicator of India’s surge…

BHARATIYA MAHILA BANK IS A CLASSIC EXAMPLE. JUST A YEAR BEFORE UPA’S SECOND TERM CAME TO AN END, THE CONGRESS-LED GOVERNMENT PULLED OUT ANOTHER RABBIT FROM ITS HAT – A WOMEN-ONLY BANK. IN QUICK TIME, THE RBI’S APPROVAL WAS SOUGHT AND THE BANK WAS UP AND RUNNING IN NO TIME. IN THE PAST ONE YEAR, THE BANK WITH 56 BRANCHES HAS EARNED ONLY `137 CRORE WITH JUST `19 CRORE IN PROFITS FOR 2015/16 P. Chidambaram Union Budget 1996/97 United Front Government Created a dedicated infra institution, IDFC, which is now a commercial bank Union Budget 2014/15 UPA Government Set up the Mahila Bank, which is now getting merged with SBI Pranab Mukherjee Union Budget 2010/11 UPA Government Was in favour of new banking licences. RBI instead issued licence to MFIs,…

India needs changes in its vocational and technical education system as most fresh graduates out of schools lack working skills As an erstwhile journalist covering electronics technologies and IT a few years ago, I was privy to a litany of manufacturers’ woes and their causes: Tangled tax laws and regulations, red tape, corruption, licence raj, unreliable infrastructure such as power and roads, and lack of skilled labour. Unlike China, which raked in profits by keeping margins low and volumes high, every entity in the supply and distribution chain in India wanted a 30 per cent cut. India, they said, was no country for manufacturers. The only real electronics manufacturing was that of low-end or low-precision products. Where the products were of higher quality, they were merely assembled in India, often…

Here is another of those Incredible India Ironies. We want you to ‘Make in India’, but if your business model fails, we want you flogged, crucified, drawn and quartered. From the purely entrepreneurial standpoint, India is a harsh medieval society where there exists no practical distinction between business bankruptcy, personal bankruptcy and social banishment. If you get a punt wrong, even the Supreme Court will ask you to submit a list of your wife’s and children’s assets so that creditors demands may be met. If you want Indians to ‘Make in India’, the law must provide a framework in which entrepreneurs can either revive their failing businesses or seamlessly exit them and take another shot at commercial success. The government hopes the newly-passed Insolvency and Bankruptcy law will do the…

COMPANY/ ACQUISITION DATE/ NO. OF EMPLOYEES/ REASON FOR ACQUISITION • 1Click/ Aug 2015/ 5/ Co-browsing tech • Frilp/ Oct 2015/ 20/ Natural language processing & recommendation engine • Konotor/ Dec 2015/ 8/ Inapp chat • Framebench/ Feb 2016/ 5/ Collaboration (Framebench is a central workplace where you can store & share your creative assets) • Airwoot/ Apr 2016/ 7/ Artificial intelligence for social marketing Source: Company…

Talk Like TED By Carmine Gallo Price: 499 This book is a powerful guide to public speaking, based on the scientific analysis of hundreds of TED presentations and interviews with TED speakers. BUSINESS BESTSELLERS* Thinking, Fast and Slow By Daniel Kahneman Penguin Price: 499 ELON MUSK By Ashlee Vance Virgin Books Price: 699 IIMA- Day to Day Economics By Satish Y. Deodhar Random House India Price: 299 Steve Jobs By Walter Isaacson Little, Brown Book Group Price: 550 Think & Grow Rich By Napoleon Hill Prakash Book Depot Price: 150 *Top books by sales for May 2 - May 15, 2016; Includes only books released after Jan 1, 2015; Information provided by…