On prices and inflation

Inflation is the talk of the town; every person worth his/her name is jumping into every channel to put his/her viewpoints particularly now with the FDI tirade in retail just being afresh. Yes, these were exactly on the expected lines; only that there is much talk and no suggestion of tiding over the problem. Similarly we have forex being the buzzword with the media honchos showcasing and dabbling with the figures however incorrect and far off from reality they may be. With political patronage towards these topics, dissection of metrics involved in inflation and forex outflow is being done to the nth order. I present certain layman aspects on these topics based on certain observations.


a) As a well-to-do paid employee (thank God) of a decently large organisation, I am not bothered about the rate of a kg of potatoes whether it is INR 14 or 15 or 20 for that matter. All lazy souls like me who cannot make it to the main market have to tide and be happy with whatever rate the local vegetable shopkeeper sells. The point that I am driving is not the laziness (that also is a point, which I shall cover under some other topic) but the sheer comfort of bearing with the price hike even that of essentials. The local retailers have known this trick and have been escalating prices like anything without any reason. It is a known fact that along with hundreds of people who stay in a Crore plus apartment today, also stay peoples who work for them and who are not that well-off. Encouraged by buyers who agree to paying higher prices, these sellers keep on increasing their prices. The supply-demand principles do not hold good anymore; whereas Say’s Law only predominates. These artificial (read for-no-reason) reasons are never attributed by any FM but am sure that contributes to inflation.

I am sure the government knows very well that people like me are not bothered with the prices; but yes a common man is affected. Imagine the plight of a salaried employee with a salary of INR 5000-6000 p.m. (there are atleast 4 scores whom I know in the city where I stay personally).

b) I have observed one thing about the office going habits. There are people who just come to office, keep their cars and also go home almost at the same time. They could very well initiate carpooling and do away with some petrol. I am sure that may not contribute to forex payout largely but yes, some contribution would definitely reduce Mr. FM’s forex outflow. I am aware of a public sector organisation; all whose employees come from a particular complex but they do not practice carpooling and come to office individually. Until and unless all practice it as a habit, it would be very difficult to contain the petrol / diesel related forex outflow. This is a simple thing but goes a long way in saving few liters of oil bill.

c) Another important component of forex outflow for Mr. FM is because of the gold purchase. A small question based on a small observation. How many of married souls have used more than 25% of the gold which they would have received during their marriage. Most of us would have never touched the same but definitely would be purchasing yellow metal to cater to the requirement in the marriages and other functions of their relatives and friends. The idle stock would be lying in some idle lockers of many banks.

We have had RBI Dy. Governor commenting on the import of gold and advising people not to buy gold for investments. Similar views were also opined by FM and PM during Sep 2012. I am sure if some of the people change the habit that is mentioned, not only would the import bill of the government reduce but the prices of gold in the local market would be bit reasonable. Infact such acute is the problem that govt. is mulling ideas to attract people to secondary markets and other investment avenues instead of gold. I am sure the macro problem would be huge otherwise the controlling honchos of the country wouldn’t have been envisaging such ideas and plans.

These are certain points which normally would not be catching the eyes of the FM. The readers would appreciate that the summations of the facts and repercussions is immense. On a personal note, it does not matter whether someone advices or not but as educated souls, we must strive to think about the financial status of our nation and contribute selflessly however miniscule the same may be.

Private-Public dilemma

Almost each sector in the country today has government (read public) and private participation. You talk of the major sectors i.e. banking, telecom, mining, education, heavy industry, small industries, research & development, petroleum and mining, one would observe presence of govt. owned institutions and privately held institutions. In some like heavy industries, mining and education we had private and government (directly or through majority stake) players from long times while in some we just saw participation of private players in the last few years / decades.


Argument has always been that competition would always benefit the masses but overtime we have seen the following

a) Confusion has started creeping in after so many years of de-regulation. We have got plethora of examples. Private organisations in the name of competition have started violating the basic rules of the games across all industries in which they were earlier not present and were allowed recently. Be it mining, banking, insurance et al.. I need not give specific examples across any of these sectors. There was no necessity for positions like Ombudsmen in the bygone eras.

b) Salaries in the private sector are high but the attachment to one’s organisation is higher in the public sector organisations. No doubt there is a factor of safety and continuance in public sector organisation but higher salary in the private peers is increasingly touching enviable levels. There is rampant attrition amongst private institutions because of the mentality of employees for higher pay and better job environment. There is a also a flow of professionals from public sector institutions to private sector institutions in the same sector. Thus one sees there is sheer turbidity and dynamism because of these differentiations. The question arises is the customer really benefitted in this flux and changes.

c) We started with the notion that all that is private is competitive and better. A petty large and important industry today i.e. banking has seen a sleuth of good public sector banks having better balance sheets than private peers. There are certain public sector organisations like ISRO, DRDO and BARC which still attract better talent and also harness their talent. Engineers of these institutions are considered to be the very best; be it in any discipline of engineering.

d) Private players have a much shorter vision. We have examples of surprising measures being taken in the name of cost cutting by various private institutions, usage of physical network of BSNL by private telecos, advertisements of hospitals and education which were unknown hitherto, insurance is no more solicited (only) but sold and window dressings of many private banks being dissected by analysts.

e) With so many players in some sectors, excessive competition is distinctly visible in some sectors. Finance Ministry had to intervene to stop public sector banks from vying against each other in offering better FD rates to cash rich PSUs.

On a suggestive note, certain degree of maturity is required from each of the players in each of the sectors. Instead of targeting higher share of the pie, cant all players think of ways and means of increasing the size of the pie. Whats more worrisome is that with the existence of certain degree of dynamism in the system, the onslaught of reforms as slated and proposed by the government will further complicate the things. I am not a pessimist but as I mentioned, maturity is a rare commodity amongst thinkers and with a long term vision things can settle down for sure.

Every kid is a banker

Dipen is in Class V now; just migrated this July. He belongs to the single-kid category like many of his generation. While he has the advantage of being the singly pampered kid of his doting housewife mother and a slightly well-off banker father, he has the distinct pressure of being on top of each activity he indulges in. Besides, he is also expected to be smart and street smart depending on the scenario in which he is or his parents are with him. He has to be something extra for being a point of discussion in every discussion which his parents have amongst their acquaintances.

Though still young and having touched double digits in age, Dipen has been delivering to his best (we can compare him with our employees). He delves in guitar, swimming and tennis besides pursuing his academics at schools and perusing tuition classes at home. (Can we not compare this to our cross-sell activities and core area(s) of working).

The entire schedule of activities changes when he has to take 15 days leave from to attend his thread ceremony (something close to facing an unwarranted problem or a technical glitch in our work lives). While he had just joined the new class, nothing much had started (striking close to the April phenomenon of reduced work and lower achievements); but while he went on leave, many-a-lessons were covered and huge assignments handed over (Murphy’s law acting overtime as is the case with most of us). The resultant of the same is that he is not able to cope up with all the homework and has reduced playtime. He has already spoken a couple of lies to his mother with regards to the progress (something similar to excuses made by us for bad performances).

However there is a silver lining to the entire episode. While Dipen being a genuinely hard-working and not a dishonest kid genuinely feels that he was wrong in lying to his mother, he has started confessing many things to his father. His father, who was not the best guide or talking partner till now, has suddenly turned his best pal (similar to our organisation where seniors guide and counsel the performing employees who due to some reason miss out on performance temporarily).

How close modern day kids are to a banker…



Abridged from a true story; name has been changed from the actual one.

Brand Building

Brand buiding has been treated as a very sophisticated exercise (read campaign / activity lest I derogate many a brand mangers). As they say, the same has to be nurtured as on nurtures one’s own baby, it has got a lifetime, an identity of its own (which has to be created), its siblings come with time, nannies may change but it goes on to be treated as a human being. Its possible to see certain brands take birth and then die in one life time. There remains however certain iconic brands which have seen the tests of the time; surviving tall and strong even after decades and some for centuries. The best names in the later categories are global ones viz, Tatas in India and Citi abroad.


My novice knowledge on marketing, the science (or the art) may be excused but I have a somewhat simple version of the entire game (game plan). I treat it as an enviable identity built over time (often years) by sheer hard work of few people who take their responsibility as their only reason of existence on earth; money may be the motivation at the beginning but surely not over time. The creation of brands was earlier aided by publicity of non-business indulgence, books and university lectures and now it is primarily rounded up by media, academic cases and social-networking (not marketing). I showcase simple cases of brand building this simple way.

St. Pauls School, Rourkela: Started in 1964, it has carved out a niche for its own across decades. All who have passed on or prior to 2000, their respective guardians and the teachers who have been through the corridors today will all agree that the institution too much to a person called Joseph Mannamparambil popular as Fr. Joe to one and all; students, ex-students, govt. officials, guardians, teachers, fellow principals and priests of his order. Discipline and dedication can be expected from people who come in contact with you only when the self practices that also. This was probably the only mantra because of which the school has borne a name for itself not only in the tiny industrial town or the state but on a national level too. Imagine being associated with one and only one institution for 36 years; laying the bricks, arranging them to perfection, binding them with the education & infusion of values and creating a rock solid wall for all others to see with envy.

Lingaraj Lassi, Bhubaneswar: This shop has been selling just one eatable item i.e. lassi for the past 16 years. It started up like many roadside stall sans one thing i.e. the owner of the shop toyed with everything in the beginning to try out a taste which generated the maximum good-response. The formula arrived, he set on maintaining that exact formulae for the next decade. Now the shop continues to be a road-side shop but it has grown dramatically in size. Telecom companies pay and vie for the best possible front vision of the shop. The same formulae continues and the crowd it pulls can make any sophisticated retailer manager of any of the many branded retail management companies turn shy in shame. Its sheer hard work day in and out which has put sheen to the initial idea. The result is the creation of an enviable brand not only in the city of Bhubaneswar; it is famous atleast in the state of Odisha also.

Plugging fiscal loopholes

We have all been hearing of the glaring fiscal deficit in many business channels / newspapers since some time. Think tanks and economists are indulging themselves into the crisis trying to weave a way out. I am no economist or planner but with the limited knowledge of mundane affairs and courtesy the substantial media coverage, I can presume that increase in govt. revenues / receivables can lead to improvement of this national parameter. I put forth few layman suggestions. I do not know whether the planners will view the suggestive notes but if they do, they would accept that deficit can surely be plugged to some extent.

Change in archaic laws: We are still hearing of fines and penalties in hundreds and thousands. I am referring to the judicial fines. We now have all biggies in the law-net; some or the other scam is emanating each passing day. All the people involved in the same are sufficiently monied. If the law makers could pull up the fines in crores particularly in financial scams, the coffers of the state would simply be full at the earliest. May I suggest an extreme step of doing one-time settlements with each of the financial defaulters and settle their pending unlawfulness.

Assignment of reasonable targets to all: We have many corporations, undertakings and departments of Govt. of India. Most of them have sales approach. You take the example of BSNL; if all the seniors (grade wise) take a personal target of reasonable number of postpaid connections using their contacts and clout. The same thing can be done for senior officials of Income Tax (new accesses can be brought into the tax bracket) department. For all those entities where sales is not possible can be given targets of cost-cutting in their respective area of operations.

Open Voluntary Disclosure Scheme: The last two VDIS options brought more than INR 7800 Cr. into the system through 350000 disclosures. Yes, it had its own setoff criticism but a diligent follow up of the cases who disclose will not only enhance the coffers immediately but also be a steady contributor to the kitty in future years to come. This suggestion becomes more relevant particularly now when there is major hue and cry regarding bringing black money into the white channel.

Land money: There cannot be more concerning an area in revenue loss than stamp / registration duty of land deals. The price is undervalued and thus the duty is also reduced and the actual bulk of the transaction happens in cash; the transaction parties gain only at the loss of the revenue department. Government (read respective state governments) can fix a minimum price to each patch of land (atleast area can be defined) and thus ensure huge leakage of rightful revenue of government.

European Crisis: Simplified

We have all been hearing of European crisis; news channels across the globe and all print media of the word have been covering the developments continuously on a quotidian basis. Economists and the who-s-who of the world have been making their reservations and suggesting methodologies to tide over the scene. Thinkers who had paeans been written when the formation of European bloc took place are no hiding for cover. Amongst all the chaos that is going on, none (read close to few) have bothered to provide a layman’s dissection of the problem and list out the learnings’ for future of mankind based on the events that have unfolded. This editorial we attach the crisis in a not-so-sophisticated manner.

Cut your coat according to your cloth: The glaring ratio which was most followed was the disgustingly high debt / GDP ratio. For Greece it was as high as 144% in 2010 (it has been more than 100% plus since 2005). Imagine surviving on debt only for many years with little growth in income.  Managing debt is an important area which needs soul searching whether it for oneself or for the company we work for or the nation we live in.

Do not place all your eggs in the same basket: Greece as a country has no set of industries other than tourism. Being an island nation, they could have developed an expertise in manufacturing ships or they could have built a robust agricultural model as has been done by Israel (a country with the problem of limited land as Greece) or something else. Concentration on only one area (read no diversification) is also another area of concern. The same thing applies to all readers with regards to their individual investments and future planning’s.

Sar utha ke jiyo: Besides the global ratios and figures, one thing which missed the sidelines is the rampant evasion of taxes and fudging of figures. Some behemoth consultants of the country had been paid millions to keep figures under wrap. What is the fun in hiding figures when all would be re-discovered after some time?  

History repeats itself, therefore lets’ learn from history: We stopped learning from many such similar episodes which had happened in the past. The most glaring and recent one was that which happened in Argentina in 1990; increased external borrowing, flight of dollars from the country and swelling public debt. Probably that was the exact scenario in which Greece caught itself!

Lets practically do some bit of soul searching and if we do everything the Indian way as has been practiced by our previous generation, the country would be long devoid of such crisises and problems.

Vintage discussion…. Overheard

Recently I had been to my native village for taking part in the death ceremony of the senior most person of our catchment; he was a relative of mine who left to a different world at a young age of 101. His siblings and junior brothers were there who have well crossed seventy. Sitting beside my father I had the privilege of hearing few of their statements and the discussion so enamored me that I decided to skip my early-evening siesta (which I am seldom entitled to) courtesy the heavy and nutritious meal of fresh farm vegetables and country-grown cereals. My father and the senior uncles (indeed they would be uncles despite that age) started discussing of the old times when they were staying in joint family. The italic-sied term should be read as five brothers, their wives, a score kids and few grandchildren. Some of the facts simply amazed me; what a life was then led and what are we leading now

Four pairs of bullocks: Two houses in the village then had 4 pairs of bullocks. I simply cannot fathom the amount of labour it would undertake to maintain them; here I am not getting into the physical tilling of the land as was the practice then. Each of the houses housed the richest families of those times in the catchment. During those days all the houses were almost the same, the people wore almost the same cloth, cosmetics was unknown; each had access to almost the same number of coconut and mango trees, cash was not required; the only differentiating factor was the number pieces of land, the number of cows and the pair of bullocks. These two families each had a veteran whose first task in the morning was to give wet rice to the most-errant bullock in his clan so that it confronted the most-errant bullock in the other’s clan. What a way of showing supremacy! I still managed to continue listening without fainting.

11 pieces of land: My own grandfather (as was told by one of the uncles) had 11 pieces of land (prior to consolidation) spread across almost 2 miles from his house. He was OK with the arrangement of dragging the bullock pair during cultivation days from one piece to the other. So much so, he was so addicted to the pieces that even when the land was barren, he would visit these places everyday barefoot. My father tells me that he never remembered his father even falling ill; leave aside bedridden.

Joint family: Let me not repeat the length and breadth of the joint family. Imagine each one of them eating the same food; which was typically rice (dry or wet depending upon the times) and with just some lentils and one item of vegetables. If an errant kid had some specific taste, then he or she had to arrange for that by himself / herself. While the adults almost never ate together, the kids were typically huddled up together because they were more systematic with respect to time. They were uniformly discharged at the same time from school, if there was a visit to the fields, it would be together, if it was mango time then all would be at the orchards at the same time, if fish was being caught some day then all would be inside the pond at the same time; et al. Imagine the camaraderie that these kids would have generated! In small pecked family size of even 4 today, we seldom have our food together and if at all we have the tastes and choices would be varied for each.

Rotation of bonded labour: This joint family also housed few pairs of bullock and cows. The family had 2 people exclusively to cater to their requirement. The cleaning of their living area, tending to their grazing in the green meadows, taking care of medication and parenthood, milking them were their primary jobs. The best part was when any of these people absented; the job was given to the kids. A cousin of my father quips in mentioning that he loved those days as he would have access to some extra milk. Till date, I always mention that my father and some of my uncles can write better English than me even though they heeded to these acts and never made it to English medium schools. What’s more, this clan that I mentioned has produced teachers, bankers, engineers and many post-graduates absorbed in different institutions.

There were some more discussions on cash, duels and barter which may become a separate article altogether. Some people of our generation who have been in villages or have come out of them may imagine the times I am talking but the ones junior to us, the so called never-been-to-a-village type can never fathom these scenes. Very recently my father mentioned me that a chap who had just passed out from NIT Rourkela was surprised to learn that rice never grew on trees; he always thought rice (not paddy) grew on some trees in rural India ready to be plucked. It’s time that all urbanites give their kids a taste of rural India at times. What’s more they are most welcome to my village which I cherish going. Thankfully my kid, who actually is a kid, is fascinated by the paddy fields, the sunflowers, cow milk, fishing, ponds and the orchards.

Well all these took place in the family get-together before the beginning of the tenth day rites. How the gentleman in question crossed 100, what were his secrets of longevity and why I mentioned young at 101 is a different story altogether.