Tuesday, August 14, 2012

The incorrigible premium league

The monetary overload of IPL could soon be seeing a reality check

Critics are not too off the mark when they accuse IPL of being more about money than about cricket. Blame Lalit Modi for that. Through his business and managerial acumen, Modi has ensured that money pours from different directions – internet rights, theatrical screening in bars, after match parties, sponsorships on strategic time-outs and even zeppelins. As per a Brand Finance study, the estimated total worth of IPL is an astounding $4 billion. To achieve this, it is said that Modi has handled broadcasters, sponsors, advertisers and even cricket fans quite shrewdly. SET MAX capitulated on Modi’s demand, in a tug-of-war that reached the court, eventually raising the value of IPL’s ownership right from $1 billion to $1.6 billion. But the TRPs of IPL have plummeted from 8.21 last year (when it was in South Africa), to 5.48 by the second match this year. The very excesses of IPL ensure that the franchisee model hinges more on valuations rather than actual revenue. A recent report by Sporting Intelligence confirms that IPL is the second highest paid league in the world on a pro-rata basis, beaten only by NBA. Royal Challengers Bangalore is the richest team, with each player earning £56,833 on an average per week!

The new franchisees of Pune & Kochi have been sold at a mind-boggling $370 million and $333.3 million respectively. Ironically, only two of the current ones have seen profits so far. Promoters have started to drool at the prospect of building brand equity to maximise valuations in case of a stake sale.


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Monday, August 13, 2012

NANOTECHNOLOGY: VIEW

What nanotechnology can do!

In 2010, the National Nanotechnology Initiative of the US government gave a nanotechnology funding request in 13 federal departments and agencies for $1.64 billion. In 2001, this figure was $494 million. The UK government, during the middle of this decade, prepared a report berating their slow response in nanotechnology.

What cannot be denied is that although the field has huge promise, it also poses the danger of misuse (for example, to create untraceable weapons of mass destruction). The emergence of this technology field is inevitable. Imperative is the need for global regulations controlling research and funding, and intelligent use.



 
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Saturday, August 11, 2012

“Food Processing sector suffers from a vicious cycle...”

The sector has seen transformation, but major changes are required in the long run

Food processing units are financed on a project-by-project basis mostly by the commercial banks and at times, co-financed by NABARD and a partner commercial bank and in certain cases on a consortium basis. While appraising these projects a number of limiting factors come to the fore rendering financing difficult.

The food processing industry seems to suffer from a vicious cycle of high unit cost – low demand – low capacity utilisation – high unit cost. High cost and poor quality of farm produce, high cost of power, cold chain, storage, handling, transportation, packaging, etc. are also serious problems. Low technology and absence of product innovation due to poor linkage between research institutions and farmers and industry is another serious problem. Unorganised and fragmented marketing and distribution network, long and fragmented supply chain leading to more number of intermediaries and consequently poor share of farmers in consumer price is also a constraint. Preference for fresh food and eating at home often contribute to the price sensitivity in the domestic market. Above all, there is a consistent lack of skilled manpower.

In order to address these problems especially that of skill formation, NABARD has been promoting large number of grant-based Rural Entrepreneurship Development Programme, Cluster Development, Development of Women Through Area Programme (DEWTA), Assistance to Rural Women in Non-Farm Development (ARWIND), Micro Enterprise promotion by SHGs et al. NABARD has also been working in close liaison with the Ministry of Food Processing Industry and other concerned organisations.

The Hon’ble Finance Minister had announced in the Union Budget 2006-07 that food processing would be treated as a priority sector for bank credit. Accordingly, the following items within the food and agro based processing sector were made eligible for classification as priority sector for lending by banks. (i) Fruit and vegetable processing industry, (ii) Food grain milling industry, (iii) Dairy Products, (iv) Processing of poultry and eggs, meat products, (v) Fish processing, (vi) Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery, (vii) Aerated water/soft drinks and other processed foods, (viii) Special packaging for food processing industries and (ix) Technical assistance and advice to food processing industries. 




 
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Friday, August 10, 2012

First among equals

Modi has been voted the best in all categories. Be it electricity, roads, healthcare, primary education, transport, communications, the situation in Gujarat seems only to be improving. But Modi’s road to victory has a few significant potholes. Only 6% of voters in Gujarat are satisfied with the government’s action to control corruption in civil services. Gujarat’s scores in the parameters of law and order and social and communal harmony is also abysmal.

Raman Singh’s popularity is noteworthy, considering he rules a state which is small and plagued by Maoist violence. People seem to be largely satisfied with his government''s work. His state takes the second position in all the categories among the five best small states. Equally remarkable is Orissa''s Naveen Patnaik who has garnered the second position in terms of net satisfaction ratings with the chief minister but his state is in the fifth position in terms of governance among five large states and lowest in the overall quality of life.

METHODOLOGY

This is one of the most exhaustive and comprehensive surveys done to rate the performance of state governments and chief ministers by their own voters. In all, 26,432 citizens and voters were selected through random sampling. The number of voters selected for each state was proportional to the number of Lok Sabha and Assembly seats. Rural and urban voters were selected on the basis of population in the region. Like the sample from Gujarat has proportionately more urban voters than the sample from Orissa. Each ‘voter’ was given a questionnaire to fill up. Team C-Voter identified 15 parameters on which the citizen voter was required to rate the government and the CM. The answer options were standard-ranging from much improved to remains the same to far worse. Positive responses on each parameter were aggregated and a final average performance measurement was done accordingly. It is important to note here that the ‘performance’ of the state government and CM is based entirely on the perception of the individual voter whose expectations differ. from state to state. Hence, Bihar scores over Karnataka in terms of voter perceptions for the parameter public transport. One interesting and exclusive aspect of the survey is a question asked to voters to rate the best CM outside their own state. It has thrown up interesting results! This is an ongoing survey and TSI, along with C-Voter will be conducting them on a quarterly basis and exclusively share the results with readers.


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Thursday, August 09, 2012

If only wishes were horses and MoUs were industries

A lot has been said and done, but the reality is far from what was promised. To continue on growth track Orissa needs to ensure implementation of the promises, says Deepak Ranjan Patra

A couple of decades ago, a lesser heard state in India suddenly hit the headlines in national media for not so good reasons; hunger deaths and child selling. Now after many years, it’s again making headlines, but for some good reasons. As per figures released by Central Statistical Organisation (CSO), Orissa grew 8.74% between 2004-05 and 2008-09 after clocking a monumental growth rate of 9.2% during the Tenth Five Year Plan. And why not, after all, one of the front runners for the best Chief Minister spot, Naveen Patnaik, has been working on turning the wheels. Sample this; the state government has signed as many as 79 Memorandum of Understandings (MoUs) with companies operating both from India and abroad proposing an investment inflow of over Rs.36 billion. Anyone seeing those facts would certainly be sure that the state is now heading for some serious economic growth. But only if wishes were horses and MoUs were industries.

For a reality check, Orissa’s Human Development Index (HDI) ratings, the yardstick used to measure citizens’ access to knowledge, health, food and nutritional security, is at a nadir of 0.345 currently. Families living below the poverty line (BPL) number over 40 lakh, and the figure is rising with every passing year. According to a survey conducted in 2007-08, over 80% of households in 15 districts had a very low standard of living. Further, over 50% households in 18 districts were BPL cardholders, the figure stands over 60% in eight of these districts, clearly indicating the fact that though the stories of an Orissa with undernourished children have given away the centre stage to business tycoons signing MoUs in their scintillating corporate attire, the truth still lives somewhere around the story that rocked the world during 1980s. The growth so far is more illusionary than real. Panchanan Kanoongo, Former Finance Minister of the state says to B&E, “Growth exists only on paper at the state secretariat.” Harsh statements surely. But anyone who has been in touch with the developments in the state can easily point out the sluggish speed at which the industries are being set up. Take South Korean steel major POSCO’s proposed Rs.520 billion mega steel plant in the state. Supposedly the biggest FDI deal in the country, the project was signed way back in 2006, but even today the company has not been able to grab the land designated for the project. Many may blame this as yet another case of land acquisition issue, but the problem has been going on for over 2 years now. What is that the government has done so far to resolve the issue and allow the project to get going? Nothing, at least not officially!

While every one looks interested in fulfilling their political dreams fulfilled by fuelling the loggerhead between the supporters and opponents of the project, the poor people of the area, who could have actually been benefited from the project, are just falling prey to ill directed fights. Despite that, there is no genuine effort from the government to resolve the issue.

However, in most of the projects where the companies are facing opposition from the locals, be it L. N. Mittal’s proposed steel plant in Keonjhar or the one proposed by Tata in Kalinga Nagar, a major reason has been lack of proper communication of the benefits to the people. Lack of a proper communication from the government’s side allows swindlers to deceive people and satisfy their political agenda. Not denying the fact, Raghunath Mohanty, Cabinet Minister for Industries, Orissa, tells B&E, “Rehabilitation packages offered under these proposed projects are really lucrative. Sooner we manage to convey this to the people and make them understand, easier it will be for us to resolve the problems at the project sites.” The case is more or less similar in all such projects where land acquisition is an issue. But, what about the other projects? Out of the 79 MoUs signed, only 33 projects have started operation and that too just partially. The problems are certainly from both the sides, government as well as the companies. Though the government has started a single window system to facilitate clearance from various authorities, and has made clearance time bound, but how well the system works, is certainly something that needs a clarification. Most of the projects for which MoUs were signed a few years ago are still stuck with some or other government department awaiting clearance. As a source from Aditya Birla Group’s Rengali-Lapanga Aluminium smelter project informs, “The company had already deposited the required money for acquisition and hand over the land with the government about a year ago, but still there is no effort from the government’s side to handover the land. And for this, the proposed plant with 2.6 million tonne capacity and a 650 MW captive power plant is yet to start operation.”

The situation for Vedanta’s Alumina plant in Lanjigarh is also facing a similar kind of situation. Though the plant has partially started operation, Vedanta is yet to get an approval from the environmental and forest agencies to be able to access the local mines. At present the company is continuing its operations by importing the required raw materials from its mines situated outside the state.


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Wednesday, August 08, 2012

ARINDAM CHAUDHURI ON WHY ISB IS BETTER THAN THE IIMS AND HOW TO JUDGE B-SCHOOLS

First things first... Ever since we started Business & Economy, we avoided the temptation of undertaking B-school rankings for the simple reason that IIPM is a B-school that we are very closely associated with; and at IIPM, we have always claimed that we are the best B-school globally when it comes to education. So any B-school ranking brought out by us would have had IIPM right at the top, at least in the three parameters of ‘course contents’, ‘global exposure’ and ‘research & consulting’! But if we were to have finally published such a ranking, our friends in the media would have taken no time to call them biased, however fact-based the rankings might have been. And undertaking a B-school ranking without speaking about ourselves would be next to impossible for an aggressive group like ours, which so passionately believes in our (IIPM’s) superiority. So finally, this is what we did!

We decided to go ahead with the B-school ranking in B&E. However, we decided to keep IIPM totally out of it. We didn’t have any editorial representation in the ranking team. We selected the top 30 B-Schools of India – IIPM included – and gave the list to a team of five unbiased members in order to rank all the B-schools: Naresh Gupta (MD, Adobe India), Dr. Sanjeev P. Sahni (Head, Strategic HR, Jindal Steel and Power Ltd), Girish Vaidya (Director, Infosys Leadership Institute), V. Balakrishnan (CFO, Infosys), Brian Tempest (former CEO, Ranbaxy). And I am sure no one would think that such kind of credible people – two of them from Infosys included – could be made to do something unethical! After they gave their rankings, we removed IIPM’s name from the list and gave out the top 29 B-Schools because ethically, it was still not fair for us to rank ourselves as Planman Media is a sister concern of IIPM; and also because the experts did rank IIPM quite amongst the top B-Schools! [see the whole survey in the Business & Economy issue dated Nov 27-Dec 10, 2009.]

However, having removed IIPM from the ranking, I do think that as the editor-in-chief of this magazine, I have a right to say what we stand for! So I brought out this article I had once written earlier and made some changes so that our readers have an exact idea of what our magazine believes! This article will give our readers a clear view of why we at Planman Media think that ISB today is ahead of the IIMs – even if fractionally – in India and in every parameter worth mentioning where IIPM stands compared to the IIMs and ISB. This article will also give our readers insights on why we have always maintained that given the right weightage for specific parameters, IIPM is undoubtedly ahead of all other B-schools in the country! My comparisons will be only between these three institutes (IIPM, ISB, IIMs), because frankly speaking, these are the only three B-schools on whom I keep a detailed track and do my research upon!

But before I begin expressing my views, I must clarify something; and that is that despite IIPM’s ‘Dare To Think Beyond The IIMs’ campaign, I have nothing against the IIMs. Rather, all I have is sheer respect (My father was a professor at IIM Bangalore and is extremely proud of the same. My Managing Partner, my best friend at IIPM and the Editor of this magazine itself, A. Sandeep, is a product of IIPM and IIM Calcutta; and he specifically had gone to study there to have a first-hand knowledge about the ‘IIM way’ before coming back to IIPM to take it up. And finally, my best friend in school and the Head of our news portal, TheDailyIndian.com, Partha Saha, is a proud product of IIM Calcutta). We believe we are the best when it comes to education, but that doesn’t mean we don’t know how good the IIMs are or that their students get better placements than our students or even the fact that they attract the best of students of India – though we may still not accept that the final IIM product is, therefore, necessarily better! So, this article is not an attempt to malign the IIMs, but a simple attempt to analyse some facts.

Having said that, let me also state that what I am writing shouldn’t shock many; at least not those who know that the 2009 Financial Times rankings have put ISB as the 15th best B-school in the world and haven’t put any of the IIMs even in the top hundred! Yet, what I hope this article will do is to bring perspective to those rankings and explain to people what management education is all about; since no magazine undertaking B-school surveys in India has even a fraction of the ability to comment upon management education in India, compared to our capability.




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