Pranab Mukherjee’s Mankatha – Budget 2012

Money, Money, Money – OUR money collected in the name of fucking TAX.

Mamta wants a bigger pie of it, to rescue belingured Bengal….

Sonia and her comrade Jairam Ramesh wants a bigger pie of it for funding congress flagship projects like NREGS

Jaya wants a big pie of it, to fund her freebie promises…..

Who get what and how much is gonna be the play of Pranab Mukherjee’s Mankatha.                  The Game Begins……………..

A.Raja, Kanimozhi, Anna Hazare, Kalmadi, FDI in retail, inflation………….all have hit the govt black and blue, left right and center.  Scams, policy paralysis, indecision making have put the govt on the dock. If something has to be done, IT’S NOW OR NEVER.

Budget being presented after the elction’s, and with Anna wave waning down and Inflation going negetive….our pranab DADA must go all out for REFORMS.

Investors confidence has been put in doldrums. Thanks for policy parlysis and indecision making. Now to resurrect it,  FDI in retail must be passed. To do so, the villain of the milan, Mamata must be tantalised with back door negotiations – ‘ Have your mouth shut and get more MONEY for Bengal   ‘ . (If that fails, then take her out of the equation and get S.P support. Hopefully S.P wins U.P elections with congress support).

With more money given to Bengal, give NO money to Tamil Nadu. Having no cash in hand, Jaya would not be in a position to buy electricity from other states. With electricity crisis raising,  she would be forced to act upon Kudankulam and ensure it gets operationalized.

In simple terms, given MORE money to Bengal and get the FDI in retail through and give NO money to T.N and get the Kudankulam through.

Singh may not be King but MONEY is!! Neither I called this buget as Pranab’s Mankatha for nothing!!!

Then comes Kerala, Punjab and Railways.  Thanks for their bankruptcy, they need money to put them back on track.  Money does not come from heaven, it has to be made here on earth. And so, pranab ji must bite the bullet and free up diesel price like that of petrol price. This would free up the govt from paying subsidies to oil marketing companies which can then be used for rescuing bankrupted states like kerala and punjab.

Then comes congress flagship projects like NHRM, NREGS et al. And its now that Pranab should remember that fiscal deficit has gone out of control. And its quite important that fiscal discipline be brought in. And so Pranab should cut the money being spent on such populist schemes. And as a blessing in disguise we would have 2G spectrum action which put money in govt’s pocket and put the CAG’s notional loss theory to shame. But then, one has to wait and see if India’s call rates remain cheapest afer the auction.

Then comes the GST – the harbinger of all reforms. As goods are taxed diffrently by diffrent states it affects the manufacturing industry. Though bringing in GST in this fiscal year wont be a possibility steps should be initiated for bringing in uniform GST across India.

Then comes the biggest of all AGRICULTURE. No promises on inclusiveness and long term food security will be sustainable unless growth in agriculture is propelled up to 4%. Tax incentives must be provided for establishung agri R&D and for building state of the art cold chain network and post harvest handling technology. Govt should remove red tapesim and allow farmers to sell their produce to people who pay them higher. A marketing revolution must precede second green revolution. Free movement of agri items across India, uniform and low taxation on primary commodities, reforms in APMC are some of the institutional changes needed to get indian agriculture past the 4% growth barrier.

In short these are the five things that the budget should do

1. Bring the fiscal deficit under control.
2. Push Key reforms
3. Clear Project fast
4. Focus on supply and infrasture development
5. Rural development

Hoping for a better than expected  Pranab’s Mankatha. For the moment – Fingers crossed.

Happy 2012

New hope, new goals, new expectations, new optimism, new desire, new faith, new wish….comes along with every new year. Each new year ” is like a box of chocolate. You never know what you are going to get. ‘ Yet people like predictions. They would want to analyze, interpret, evaluate what the future is hold on for them. And here is my humble attempt to predict the year 2012.

Here I go……………………….

Like the way,  bad is better than worse, and like the way,  something is better than nothing, so will 2012 will be better than 2011. The year that went by,  was never a good year for the government at the center. It paid the price for all the corruption that happened right under its nose. Anna Hazare and his team were able to kick the govt right, left and center with a massive support like never before. To add fuel to the fire, even the economy didn’t  do good. Arm-twisting by the coalition parties meant that critical reforms to boost the economy was stalled. And to put it simple words -  everything that could go wrong, went wrong for the UPA.

But 2012,  will be a year of comeback for the UPA. Thanks for the short attention life span of the new middleclass. The popular enactment with Anna Hazare is likely to ebb. The episode in Mumbai stands as the testimony for it. This would give some breathing space for the government.  And then comes the mother of all elections – Uttar Pradesh. Thanks for the rampant corruption, a demolition spree, a disproportionate case and attrition of supporters for Maya, Congress is likely to win more assembly seats.  This win would surely re-vivify, re-vitalize,  and rouse up the congress at the center.

Giving enough courage to crack the whip at deceptive Mamta and get the 51%  FDI in retail and Lokpal to pass through. Diesel prices would be decontrolled. And then,  BJP would not be  able to block the govt from implementing goods and services tax bill. And Kundankulam would become operational. And this would bring down the power crisis. And then bills to reform the education sector and labour laws shall be taken up. Thus kick starting the much needed Reforms2.0 for the economic progress.

And now unto the world……………………………..

2012 will be the year of election for the US. And Barack Obama would win the elections. Despite over promising and under delivering, Barack Obama wins because of two reasons. One,  there is no other worthy opponent standing against him and two, known devil is better than the unkown one. But, some credit should be given unto him, because he recovered the economy to some extent. Remember, the economy was heading to a depression then. Also the US foreign policy dosent seem to look like aggression as it is used to be in Bush era. And US will completely withdraw all its troops from Iraq and the power will be transferred to the civilians.

Europe’s politicians will manage to stabilize the eurozone in 2012 and keep the continent’s common currency together. The European Union’s executive commission and the ECB would  convince the financial markets that,  troubled governments can pay their heavy debts and therefore deserve to borrow at affordable interest costs. Hopefully, Italy and Spain will borrow heavily in the first quarter at affordable interest costs. The determination of political elites to keep the euro together will win out.

Millions of Arabs dream of attaining democracy in 2012, will be fulfilled. Arab world saw the deadly protests that ousted two dictators and ended strongman Muammar Qadhafi’s rule with his brutal killing. The foundations for the democracy sahll be laid. A real parliment, a real police and judiciary would be put in place to start to build the country.

China, the world’s number two economy,  and its economic growth  is likely to slow down .  Loans to local governments through financing vehicles would be a major threat to China’s economy, with up to 2.5 trillion yuan ($396 billion) in debt falling due in 2012. Inflation, the housing bubble, export markets, and appreciating Yuan seem be the major factors behind the declining economic growth.  If global economic situation would not worsen, China’s growth would be at 9 percent.

Our neighbor Pakistan will enter 2012 with predictable uncertainty. Many say,  it would be a election year for Pakistan, as government is shortening tenure . Already battling severe power and fuel crisis, an early election would mean tough economic decisions would not be taken.  And the internal security situation in Pakistan will remain uncertain. Its relationship with US,  would soar but with India it would improve. It would be a mixed bag for Pakistan.

In short, the following thing would occur in 2012.

World economy recovering…………………………………..

Rise of democracy and peace………………………………………..

Better governance at the center………………………………..

Democratization of commerce…………………………………..

Yes, lets walk into 2012, with high dosage of OPTIMISM.

P.S – I am told, that intelligent persons are the one’s who predict the future and then explain why the predicted things didn’t happen. FYI, I would prove that I am an Intelligent guy.

The Dirty Picture

The aroma of cappuccino captivating my senses, I sipped this elixir of life. As I was immersing myself into this divine pleasure……………………….silence broke out………”machi FDI vandhichi naa, namma makkal enga da poovaangoo….marupudium inoru gandhi vandhu ivangala thorathi adikanum polIa” , FDI in retail became the topic of our vetti discussion. Reaching home after the aromatic coffee with ingenious vetti talk, I switched ON my friend the idiot box to see vidya balan showing her assests in The Dirty Picture…..but I fell on one of the prime time english news channel where people where debating about ‘FDI in retail’. Here was a guy, who was rich and handsome and was rattling against FDI in retail. Well….now…FDI in retail has become a vetti talk, a national debate and the source of inspiration for my vetti writing here in this blog. But………wait……..am not gonna hit the topic FDI in retail,  since a lot of people have discussed about it, spoke about its pros and cons and some have even raped it. Instead am gonna write about this new generation who fight for the poor in debates, the newspaper brains , the brand new MIDDLECLASS.

You know what when vegetable prices go up these new middle class  FORGET that the high price what they pay will only go to the middle men and farmers for whom they fighting for in debates. They go out and start protesting against the price rise. FYI, till now the money does not go to walmart wallah’s but then still they protested.  Well ok….let me leave that. Now, the new middle is all fighting for the poor kirana shop owners in debates that happen national tevevisions. Here is my question…will these people encourage their sons to start and run a kirana shop down in a puliampatti village? Or atleast will they give their daughter in marrage to a kirana shop owner? NO!!, they would encourage their sons to become a software engineer and would give their daughter in marrage to a person working in IT concern, forgeting the hand of FDI in it.

For all these years farmers have been called as poor farmers. What did these midlle class do to remove that stigma all these days?? Nothing. But, now…………come FDI all have become crusaders of sort. They want to support them in debates in national television, in vetti talks that happen in cafe coffee days and in facebook and twitter.

Well not FDI…it is the hypocritic nature of middle class that is going to affet India much.  Its surely a dirty picture out there.

The Brand – India.

Today…………. every board room across the world speak about India. NRI’s  wants to return back to India and become entrepreneurs. Business house’s want to have their presence in India. Income levels have risen. Aspirations have risen. A brand new India has risen.

"My only regret is that I am not 20 years younger because I think India
 is going through a very exciting period in its history"
                                                      - Ratan Tata, 2011.

This has been the great Indian growth story.

But………. back in 1991, the economy was all time low. India had to pledge gold  to infuse funds into the ‘kajana‘, which too got exhausted within the next six months. And India was seen as a bottomless pit for foreign aid. And India was just 40 days away from going bankrupt. With assassination of Rajiv Gandhi, things went from bad to worse.

Pamulaparti Venkata “Narasimha Rao” who almost retired, had to return back into politics to lead the minority government as the Prime Misnister. As the socialistic model was collapsing, he had to bring in a papradigm shift, which he did. He opted for the market oriented reforms. And his master stroke was to appoint a non-political reformer in the form of  Dr. Manmohan Singh as the finance minister of India.

If today Dr. Manmohan Sigh is regarded as the father of modern economic
liberalization, then P.V. Narasimha Rao is its Grand father.

Rao held the industrial portfolio with himself. He devalued rupee. He took away industrial licensing and MRTP clearances. With this the biggest hurdles to industrial expansion was dumped. He put a full stop to the dreaded license raj once and for all. He made the delicensing announcement on the day when Manmohan Singh presented his first budget. This made Manmohan Singh to be seen as the reformer, while Rao took the back seat.

Meanwhile Singh reduced the import duties, corporate tax and income tax. Foreign investment was liberalized and import of technology was freed. And he initiated the process of privatization of public sector companies.

Both Rao and Singh implemented policies to free up the economy and change India’s socialistc face to capitalistic one.

Twenty years later,  about 300 million people—equivalent to the entire population of the United States—have escaped extreme poverty.  The fruits of liberalisation reached its peak in 2007, when India recorded its highest GDP growth rate of 9%. With this, India became the second fastest growing major economy in the world, next only to China. Guess what?? nobody imagined it 20 years before.

All these policy changes brought in by Rao and Sigh was heavily criticised and was opposed. Opposition even came from the congress party itself. Yet Rao had the political chavunism in him, to get the bill through. But the goverment was shown the door in 1996 elections. Yes!!! this was the govt which worked for the welfare of the peple and not with the intention to get votes.

Comming to the current situation. If for the west, it is osama, obama, eurozone and inflation, then for India it is corruption.Corruption is hindering our growth. To accelerate growth, black money has to brought in as quickly as possible. Wellh….welll…..well… I do not beleive in such statements. FYI, countries have developed not because they dont have corruption but despite the corruption they had. It is the Anna  Hazare’s , Baba Ramdev’s and the media to sensationalize it. But the truth is, corruption in India has come down. Well…dont beleive it!! Then check it.

If the great Indian growth story has to be sustained then major reforms must be done in the following stuffs……………….

 1. Energy
 2. Labour reforms
 3. Infrastructure development
 4. Education
 5. Land reforms

Energy Reforms

The most important area of reforms is perhaps India’s power sector. Virtually no sector of the economy—industry, agriculture, or services—can achieve successful transformation without adequate supply of power. The power sector has been a government monopoly at the state level and suffers from proverbial inefficiency including large-scale thefts of electricity in almost every state. Reforms involving privatization of power generation and distribution should be be undertaken. This is the area with highest payoffs for imaginative reforms.

Labour Reforms

Second, Labor laws must be reformed so as to restore the employer’s right to layoff workers upon adequate compensation to them. At present, firms with 100 or more workers have no legal way to exit, since they cannot lay off their workers. This works as a major barrier to entry of new firms on a large scale: they hesitate to enter into a world that has no exit doors.

Infrastructure

Infrastructure is another important area of reforms. Roads, railways, and ports all need expansion as well as improvement in the quality of service. Cold chain storage network has to be established and ensure that food grains are not wasted away in logistics.

Education

Lakhs of students are graduating, year in and year out. The quality of the students and their employability is debatable. Reforms should be brought in, to improve the quality of the over all education system. More over, quality primary education should  reach the nooks and corners of our country. Universities in India also remain a state monopoly. With the need to cut the fiscal deficit, the state has no resources to spare. Therefore, like most other countries including Bangladesh and People’s Republic of China, India must allow the entry of private universities.

Land Reforms

The plight of people,  losing their valued land due to developmental purposes should be taken care of. They should be paid double the land value. This land reform is very important.

Finally, the reform of bureaucracy is essential. The problem of a bloated bureaucracy and the need for downsizing it is well recognized. But with policy making becoming an increasingly sophisticated and specialized activity, it is necessary to open the top bureaucracy to outside specialists.

These are the very stuffs, the government should work on. Without reforming these, if the issues of corruption and black money is solved, it is of no use, as the progress the progress of the nation would be dumped.

Well, yes corruption is an issue but it is not the only issue. Moreover, it is not as big an issue as it is being portrayed.

Dear Hazare’s and Ramdev’s, we also do have strong anti-dowry laws for your information. So, has the dowry in India reduced??

Dear Media, please dont write/telecast anything less or more than what it is required.

India is young. India is restless. And we Indians, want to fly high. Sooner, we need to become the fastest growing economy in the world. Our aspirations are higher than ever before. This is the real Brand India. Let us not camouflage our Brand India image under the word Corruption. Let us be responsible citizens.

Jai Ho!!!!

THE FREE-DOOM POLITICS

Raining freebies and crushing the previous govt schemes Chennai Super Queen Amma has announced her commeback in her signature style.

Free Rice………………
Free Gold……………..
Free Fan…………….
Free Mixie…….
Free Laptop………..
what not??

Apo tamilam quater ku matum olacha podhum……!!!

If I would sit in d time machine and travel ma self back to 2006, it was d dime amma bited d dust and d Big K rose up. And it was K who first announced slew of freebies and signed them on d day he took oath. Dat dime amma cried foul, saying free bies would cause a huge loss to govt excheueur and would deprive the state economy. And now come 2011, she s doing d same wat she opposed 5 yrs back. All it seems politicians are affected by Sanjay Ramaswamy disease. The only change is Sanjay Ramaswamy would forget things every 5 mins but our dear politicians forget things every 5 yrs. Itu seemsu she forgot wht she spoke 5 yrs before.

So…….it is undoubtaubly clear dat politicians are using freebies only to woo voters.

But wht is the cost of economics bcause of such free-bees??

As per economics, if the price or the cost has to come down then the supply must be more than the demand……..enna puriyalaye?????????

ok………….will Xplain……………………………

itz simple.

Say if chennai city requires an average of 10kgs of onion per day and on a particular day if only 5kgs of onion is present then the cost of onion can be expected to double up. But say,  if 20kgs of onion is present on a particular day then price would decrease.

This is the the reason why a product price increases or decreases. And it is purely dependent on the market forces.

And so, if the government wants to give rice at Rs.1 per kg then the amount of rice produced must be tripled up so much so that rice can be provided at Rs.1/kg. If the production of rice gets decreased due to unfavorable weather conditions then the cost of rice would surely get doubled. Under those circumstances NO GOVERNMENT will be able to provide this scheme.

It also DAMAGES……………………………………………………………………………….

Mr.Murugananthan an innovator, created a low cost sanitary napkin making machine which created a revolution in rural India. Using this machine sanitary napkins can be created at the cost of 1 rupee, which would be affordable for every rural women. Also his ambition is to sell the machine to SHG who would operate the machine and would sell the napkins to women’s in nearby villages. But our vari vallal Dr Kalaigar Karunanadhi brought in a plan to give sanitary napkins FREE OF COST. For which his govt, signed 2000 crore rupee deal with 2 MNC for manufacturing the sanitary napkins.

Had karuna not brought this FREE sanitary napkin scheme, it would have created atleast 1000′s of jobs and would’nt have cost Rs 2000 crore for govt exchequer.

Yes.. ……….a disaster is there in the making……………………………………………………………….

#1 Giving freebies kills industries which means it kills job creation mechanism.

#2  If industries go down and if people dont have jobs, the govt tax revenue would take a hit.

#3 It is using this tax payers money freebies are given. Hence there would be no money left in govenment gajana to provide these various schemes.

#4 Freebies would be the gateway for more corruption. Take a look at this.

And so………………………………………………………………………………………………………………..

Point No 1 : PRICE is always controlled by market forces and it cannot be controlled by govt forces.

Point No 2 : Giving freebies kills industries, kills jobs and kills government revenue.

Point No 3: It induces more corruption.

Point No 3:  No industry + No jobs + No govt revenue+ Corruption = Economic disaster.

By following such populous schemes the very future of people is put in the dock. And TN is dire in need of a POLITICIAN LEADER who could think beyond providing freebies.

Shoe shop mentality

Loved this video presentation by Ram Charam

1. Cash generation
2. Profit Margin
3. Velocity/Volume
4. Growth
5. Customer focused

A business would succeed if an entrepreneur can answer these three questions
1. What is the money making model of the business?
2. How does your team contribute to the money making model?
3. Does every one in your team know the answer for the first two questions?

Do you wanna build up a successful enterprise? Then have shop-keepers mentality.

From Idea To Company

Well,  initially during ma college dayz when entrepreneurial bug bit me… I was of the thought that to build a great company you need to build a great product. I was found of the software industry and was wowed by the biggies like d Microsoft, Google etc. And so all ma thoughts, desire, ambition, yearning and zeal was 2 come out with a generational next software that would Wow the world and make me d poster boy of the media and would goi all the way to become one of the big entrepreneur of the twentieth century. But sadly nothing happened and you would know why.

But now after some hard patches of ma life I do have learnt that you need not have a game changing, revolutionizing product to start a company. All you need is to have invented identified  a problem for which there are customers who would be willing to pay and all d more it is possible for you to offer the best solution.

Many have great ideas but only few own great businesses. Because the journey of taking an idea to a big business is difficult and challenging. Only few can do it. Robert kiowski has given a simple framework called as BI triangle for running/starting a business in his book Rich Dad guide to investing.

Here I have summarized and blogged on the BI triangle.

MISSION :

The first important thing a business needs is MISSION. Because if you don’t stand for anything,  you will fall for everything. And, ideally a business should have two missions. One is a SOCIAL MISSION and the other is BUSINESS MISSION.

To start and run a business, one needs to do a lot of sacrifices and moreover business do undergo testing times now and then. And especially, during the initial years a business can survive only by entrepreneurs passion. And so, to provide the needed drive, enthusiasm and fire to run the business  during those testing times,  social mission is very important as money alone cannot  provide the needed drive.

But having a social mission alone will not pave the way for creating a big enterprise. A clear cut business mission like ‘To be come market leader in communications’ can set clear cut benchmarks to achieve. This would set the business in growth path which is essential for the very survival of the business itself.

TEAM :

Business is a  team sports. Entrepreneurs should not dream of owning a boat or a plane instead they should dream of owning a team of accountants, attorneys and bank managers. A well managed business will have excellent employees,  specialists and entrepreneurs  who would work along side employees and specialists to double the investors money. And remember MONEY FOLLOWS THE MANAGEMENT and not the otherwise.

LEADERSHIP:

Here, Robert says that the entrepreneur must have good leadership skills. He says that Leaders job is to bring out the best in people and be the best person. And also suggests that to gain leadership skills one must volunteer more. A good business man will rely on the advise of the advisers and his team members to help him do well in the business.

But here I would like to twist it a bit. I look Leadership as the need to have a mentor on board for the success of the business. Especially start-ups. Having mentors would save lot of energy in identifying the right path for the success of the company.

CASHFLOW MANAGEMENT :

Cash flow management is the fundamental and essential skill for Entrepreneurs. Most business fail because business owners are not financially literate. Many business fail because people do not understand the difference between profit and cash flow.

Some of the general cash flow tips

1. If you are a start-up delay taking in salary until your business is generating cash flow from sales.
2. Invoice your customers quickly upon shipment of goods.
3. Establish minimum dollar amount for orders before granting credit.
4. Establish late payment penalties.
5. Make sure you pay your bills promptly.
6. Keep your overhead costs minimum.
7. Have  a investment plan for cash on hand.
8. Establish a line of credit with your bank.

The ability to run a business from financial statements is one of the
primary differences between small business owners and big business
owners.

COMMUNICATIONS MANAGEMENT ;

The better at communicating you are and the more people you communicate to, the better your cash flow will be. To be good at communications, you first need to be good at human psychology. Because just something excites you does not mean it makes others excited. The world is filled with fabulous products but the money goes to the best communications. Cash flowing into the business is directly proportional to the cash flowing out of the business. An entrepreneur must learn the following skills

1. Sales
2. Marketing systems
3. Advertising, headlines and copy writing
4. Negotiations
5. Public speaking
6. Direct mail advertising
7. Running a seminar
8. Raising capital

Moreover, marketing is what differentiates between small business and big enterprises. Its important to know that if you have convincing marketing, generating  sales will be easy . To know more about marketing read Purple cow by Seth Godin.

In conclusion, communication is a subject worthy of lifelong study because there is more to communication than just speaking, writing, dressing and demonstrating.

SYSTEM MANAGEMENT :

The human body is made up of systems. So is a business. Every business big or small needs to have system in place. Some of the possible systems are

1. Daily office operating s/m
2. Product development s/m
3. Manufacturing/Inventory s/m
4. Order processing s/m
5. Billing and accounts receivables
6. Customer Service
7. Accounts payable s/m
8. Marketing s/m
9. HR s/m
10. General Accouting s/m
11.General corporate s/m

LEGAL MANAGEMENT

Today, especially in the information age your intellectual property attorney and contract attorney are some of your most important advisers because they help create your most important assets. These attorneys will protect your ideas and agreements. Many a business has been started and has survived by a simple piece of paper. One legal document can be the seed of your business.

Not alone that, there would be times when clients wont  pay after getting the required service. To safeguard your business from those situations, a small piece of legal agreement is all that is needed.

PRODUCT MANAGEMENT

The company’s product/service which the customer uses ultimately is the last important aspect of the BI triangle. Product/service is the least important piece to inspect when evaluating a business. Having a great innovate product or service is NOT important,  the system behind that product/service is what is the most important part of the business.

A business with a defined mission, a determined leader and a
qualified and unified team begins to take the shape of BI triangle.
A business run with honesty and sincerity when built on the
principles of BI triangle will become complete, whole and sound.

To know more about BI triangle read Rich Dad guide to Investing by Robert Kiyosaki.