A few weeks ago, I had argued that the biggest concern facing India was falling domestic investment. Rejuvenating domestic investment cycle is more important than token changes in India’s foreign investment policy.A critical element in reviving domestic manufacturing is condition of the small and medium enterprises. These small units are much discussed, much maligned and much ignored.Here are some quick facts to put them in some context. Small and medium industrial units churn out 45 per cent of India’s manufacturing output. These 26 million units are also responsible for 40 per cent of exports.The current economic slowdown is hurting them as much as it is hurting large enterprises. About 80 units are turning sick every day. This is an estimate by Micro Small and Medium Enterprises - Development Institute, run by the central government.The units are turning sick for reasons that have not changed in many years. Lack of credit, delayed payments from buyers and most importantly lack of business management skills.Gutsy entrepreneurs work hard to survive. The lucky ones do, the unlucky ones don’t. And it’s the rare one that not just survives but thrives. “Every small unit wants to become a large enterprise,” says Dippak Khoslaa, Director, Carrier Engineers, a small auto component maker in Faridabad, an industrial suburb of Delhi. “But almost no unit gets support to improve its business processes.”Khoslaa company was among those who did get support. Under a quality cluster programme of CII-Avantha Centre for Competitiveness, Khoslaa worked with mentors and trainers to improve his factory’s efficiency and cost competitiveness."With better planning, Khoslaa could save 30 per cent space in the same unit. This allowed him to set up more machines and increase his output. He established direct contact with workers. Their feedback on process innovation brought the unit even more savings. These savings helped mitigate rising input expenses." “Small units need critical inputs to improve their efficiency in use of capital, space, credit and human resources,” says Gautam Thapar, Chairman and CEO of Avantha Group. Large conglomerates like Avantha realize the importance of small enterprises.Over 8,000 small units have benefits from inputs from Avantha supported Confederation of Indian Industry’s Centre for Competitiveness. Now millions more need such support.This is a model that has to be scaled up in mission mode to reach out to the millions of small enterprises that need help desperately. Thapar says, “Until the small suppliers improve and grow, groups like ours will also not become more productive.”And until the small units become more efficient and grow, India can’t hope to improve its industrial output. Even the foreign investors who set up base in India will look to small units to feed their needs.If the Indian government and industry bodies focus on supporting small manufacturing units, large enterprises will grow faster too.(Pranjal Sharma is a senior business writer. He can be contacted at pranjalx@gmail.com)
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Indian professionals are getting more stressed according to workspace provider Regus. The firm has come out with a survey which reveals that stress levels of Indian professionals are rising, with over 51 per cent Indian professionals reporting a rise in stress levels over the past year.Work pressure (51 per cent) and personal finances (50 per cent) have lead to increasing stress level among employees in the country, reveals the latest research by Regus suggesting flexible office hours will be helpful in reducing stress. Besides, a number of factors such as work, money, and commute to work as well as continuing instability in the world economy have fuelled this growing pressure.Interestingly, the survey found that nearly three quarters (72 per cent) of Indian respondents identified flexible working as a way of cutting stress.“Without a doubt, stressed-out workers are unhappy and unhealthy workers too, so businesses that want to help their staff lead more rewarding lives cannot fail to analyse and tackle levels of stress within their organisation.“Yet the heavy toll of stress falls not only on workers, but also on businesses as they find their staff is unable to perform as required, needs more sick leave and is less efficient,” Regus Regional Vice-President (South Asia) Madhusudan Thakur said.He further said employees feel healthier directly as a result of flexible working and a possible solution to reduce their high stress levels.The survey said employees in small businesses are more likely to be stressed by customers than those in larger organisations.“Small business workers were more likely to be stressed by customers (45 per cent) than large business workers (34 per cent), but were less vexed by management (30 per cent) than their counterparts in larger firms (51 per cent,)” the survey noted.
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The traditional image of business leaders positions them at the top of an organisational pyramid. They are visionaries who create distance between themselves and others, experts who are isolated from the people making up the organisation. This image reinforces the sense that it's lonely at the top. Leaders, we assume, need to be slightly disconnected from others in order to take charge and remain objective.Nothing, however, could be further from the truth. Our very greatest leaders are anything but disconnected. Rather than positioning themselves at the top of the organizational summit, they embed themselves at its very heart and surround themselves with the people with whom they work. They recognize that bonding—which I define as an attachment that creates energy—is the key to great leadership.It is precisely this skill of interpersonal bonding that brings out the best in others and makes them want to follow; it is the difference between managing tasks and leading people. When employees describe the most influential leaders they have worked for, do they use words such as "detached," "distant" or "individualistic"? Far from it. Instead, they use adjectives that reflect high bonding: "supportive," "caring," "fair" and "accessible." Detached leaders, those who focus on results at the expense of bonding, foster environments that are unlikely to be creative and unable to sustain long-term results. They consciously or unconsciously end up dominating those with whom they work and in the process disengage from those around them. Certainly, these leaders feel lonely. First-time CEOs are more at risk of becoming lonely at the top. This feeling, and the realities it reflects, can affect their job performance. According to one international survey, nearly 70 per cent of newly appointed senior executives say loneliness has a negative impact on their capacity to fulfil their role.Leaders would feel more effective if they focused on bonding and giving others what they need to succeed. When it involves bonding, leadership is like the skilful practice of "belaying," a safety mechanism used in rock climbing. In the two-person version of this technique, the belayer acts as a "secure base," positioning himself or herself at the bottom of the ascent. The climber is attached to one end of the rope and the belayer, using a device clipped to his harness, holds the other end of the rope so that the climber has enough slack to move, but not enough to fall any great distance. As the climber advances upwards, the belayer remains at the bottom to secure the climber and take up slack in the rope as needed. The climber, like an employee, can take risks precisely because the secure base figure or leader below is providing a powerful combination of safety and stretch. This metaphor conveys the sense of a leader leading from below rather than above. It captures the power of connection and attachment between leaders and others. The leader is recognized as a strong, trustworthy and dependable base that encourages employees to climb high and reach their full potential. I call these leaders Secure Bases. They form bonds based in trust and caring, and then (and only then) dare people to go further than they ever have before. These leaders truly inspire others and unleash the potential in their employees and their organizations. Because their psychological presence is what counts more than their physical presence, these leaders can be secure bases to thousands of employees. Far from being lonely, these great leaders are bonded with people—often many, many people—on a deep level. It's time that we stopped lauding those leaders who claw their way to the top and remain there in detached isolation. Instead of focusing on advancement involving a leader's own vertical ascent, let's focus on how they help others climb and achieve great results. (George Kohlrieser is a Professor of Leadership and Organisational Behavior at IMD, a former hostage negotiator, and author of the award-winning bestseller Hostage at the Table: How Leaders Can Overcome Conflict, Influence Others and Raise Performance. His new book is Care to Dare: Unleashing Astonishing Potential through Secure Base Leadership).
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Why this book? And why should a reader pick up this book?A proverb has it: All that mankind has done, thought, gained or been, is lying, as if, in a magic preservation in the pages of books. And I think every book is an action and every great action is a book. There is little doubt that Gorkhaland movement is a great action. A reader might take interest in the book because it is something about a people’s struggle for identity in the ‘globalised’ world where the concept of multiple identities keeps gaining precedence over what can be called primordial ethnic identity. This is happening all over the world -- the ‘real’ identity wrestling with globalised or national or provincial identity. What does the book mean to you?It means a lot, for this is my first book. I do not know whether it would turn out to be a book of the hour or one of all time. But I am happy because it was to me like a learning adventure, a voyage into the unknown, the' subjective riddle of the human mind where things unlike are striving for dominance. Gorkhaland: Crisis Of Statehoodby Romit Bagchi; Sage Publications;Pages: 480; Price: Rs 895How difficult was it to put the book together?It was difficult, for it involved an occasional conflict between my profession and passion, a struggle between my narrow race-self and its transcendence for universalism. When and where do you write?I write mainly after coming back from my office- at night and, of course, in my study. Where did this book take you?To a realm where I feel I am belonging to the world, to all, without race, clime or country. Can you suggest another title to this book? Also give us a new blurb!'Crisis of Gorkhaland: A Tale of Thwarted Climb'. The book-Gorkhaland Crisis of Statehood is an adventurous voyage into the complexity of the subjective world of the Indian Gorkha community settled in the Darjeeling hills and the adjoining plains, which has been striving for identity and a land (state) of their own against stiff resistance from the Bengali community and the government in the state. It also deals with the history of the struggle that spans over more than a century. And the intra-community discord involving the Gorkhas in view of ruthless attempts by the protagonists to suppress dissent has also figured prominently in the book. What’s your energy drink?Milk, without sugar. What makes a book a really good read or a bestseller?It depends. But to me, a good book is an ambassadress between eternity and change, like a window through which the inmost entity of what we are looks out. It must help us to feel empathy with all-good and vile, to transcend our narrow self and to feel the people unlike us are the same in essence. But a good book rarely turns to be what we call a bestseller. What are you reading now?To tell you the truth, I am reading now Agatha Christie’s Appointment With Death. Her books are rich with insight into the muddy realm of human psychology. This apart, I am now studying things for my third book that would be on the peculiar psychology of the Bengalis that embraced Communism and rejected Hindutva as an alternative ideology the Indian National Congress represents during the critical decade of the race’s history-1944-54. So, what’s next?My next book would be on Sikkim, the crisis of its assimilation in the Indian mainstream, ethnic imponderables and lengthening Chinese shadows over the horizon. (Compiled by Jinoy Jose P.)
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The Union government has decided to seek an extension from the Supreme Court for conducting the auction for 2G spectrum in the 1800MHz and 800MHz band. It is believed that the government will seek time till around mid-November to conduct the auctions. The Supreme Court had given a deadline of August 31 for the auction after it cancelled 122 telecom licences on 2 February this year. It had later extended the validity of the quashed licences till 7 September.Now that Gurgaon-based Times Internet Ltd has been appointed as the auctioneer, the process should move quite fast. The process had got delayed as a decision on the base price of spectrum was not taken till last week.According to sources, as per the schedule provided by the auctioneer, the Information Memorandum for the auctions will be out sometime in late September. That by all means will be a pretty aggressive timeline. The auctions are crucial for telecom operators like Uninor and Sistema Shyam to continue operations in the country. However, operators are likely to be selective in bidding for spectrum. The country is selling second-generation mobile radio spectrum through open auction for the first time, after the top court ruled that a 2008 government grant process was flawed and ordered to revoke all 122 zonal permits granted that year.The auction was due by end-August, as the affected carriers' current permits are valid until September 7, but was widely expected to be delayed as the sale starting price and other rules had not been finalised in time.A delay in the auction could mean that the affected carriers get more time to operate. Their licences were originally ordered to be revoked in early June, but the court allowed them to operate for four more months as the auction was delayed.The Supreme Court's order affects eight carriers - including the Indian units of Norway's Telenor and Russia's Sistema and Idea Cellular.
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CRR is in news again. This time, it is C. Rangarajan, chairman, Prime Minister's Economic Advisory Council, who says the Reserve Bank of India needs to bring down the cash reserve ratio (CRR) and control credit flow through open market operations."We need to move towards a situation in which the level of CRR comes down and it is used as an instrument of credit control only in extraordinary circumstances," he told reporters on the sidelines of a financial summit organised by industry lobby Ficci and IBA."As open market operation (an RBI tool to manage liquidity in the system) becomes increasingly a major instrument of credit control, the role of CRR as an instrument of credit control will come down," Rangarajan, himself a former RBI governor, said. CRR is the proportion of deposits that banks need to keep with RBI as cash. Banks do not earn any interest on it. At 4.75 per cent of deposits, CRR amounted to over Rs 3,20,000 crore on 16 August, upon which banks earn no interest.In India, banks are struggling to maintain profitability and a non-productive CRR has begun to hurt. At the same time, RBI is fighting a battle against inflation. In the current economic climate, the RBI needs as many tools as it can have to manage monetary policy, and the CRR is a key ingredient in its instrument mix. India is not an economy where capital mobility is so high that managing liquidity asymmetries can be handled without the CRR. It cannot depend on open market operations (OMO) alone as the Indian bond market lacks size and depth. For the banking system and the economy, CRR adds to the cost. Banks pay interest on deposits, but do not get anything on the portion parked under CRR, and the lending rate, therefore, is adjusted accordingly. Earlier this month, the country's largest public sector lender State Bank of India had sought scrapping of CRR, which stands at 4.75 per cent. State Bank of India Chairman Pratip Chaudhuri, a proponent of "zero CRR" had got into a verbal scuffle with RBI deputy chairman K.C. Chakrabarty over whether CRR should be allowed to continue in India. While RBI governor Duvvuri Subbarao made a joke about the whole episode at a banking event on 4 September, the fact remained that many a news-hungry reporter and market players were taken for a ride and believed him when he said that a committee is being set up look into the CRR issue. (Read: No Easing, Just Teasing, Says Subbarao)According to SBI's Chaudhuri,"CRR does not help anybody,... it is locked up in the vault and not ploughed back into the economy … it needs to be phased out as it does not earn any interest income and increases pressure to earn more from remaining resources". The RBI was quick to retort. Deputy Governor K. C. Chakrabarty had bluntly remarked that Chaudhuri "has to find some other place" if he could not work within RBI regulations.Not all central banks follow the same practice. In the United States, the reserve requirement is in respect of transaction (current) accounts and is at about 10 per cent. There is no reserve requirement for time deposits. In the UK, it is voluntary. On average it is about 3 per cent. In the euro zone, the reserve requirements are at 1 per cent.Pitch For CRR CutOn 5 September, Chaudhuri again made a strong pitch for a reduction in CRR at the Reserve Bank’s mid-quarter review of monetary policy scheduled September 17.“I would like to be optimistic. I expect a one per cent cut in CRR,” he said, when asked about his expectation, at the sidelines of the Ficci-IBA banking seminar. “It is likely that a cut in CRR will bring changes in the base rate (BR).” The BR is the benchmark lending rate to which all loan rates are linked.Chaudhuri said a one per cent cut in CRR would release Rs 10,000 crore for SBI. This could be deployed and earn the bank at least Rs 800 crore. The benefit could be passed on to borrowers by lowering the BR.According to Chaudhuri, the correlation between the repo rate and the BR was weak. “If you look at SBI, a one per cent CRR cut releases Rs 10,000 crore, on which if you put a value of eight per cent is Rs 800 crore. So, that is the amount that can be passed on to borrowers. If you have a repo rate cut, the total increment benefit is not even Rs 100 crore. "Among other things, Chaudhuri has also asked for interest payment on the CRR, emboldened by the finance ministry's suggestion on the same issue. Chakrabarty on his part, in an interaction with The Hindu said on 3 September: “From State Bank point of view, they can ask for abolition of CRR, SLR (statutory liquidity ratio). But, we have to function within the regulatory system in which you are in. If you are not able to do business in the regulatory system in which you are functioning… you will have to find out something else … where you can do business.” While there have been some support for Chaudhuri on his expecation on CRR cut and charging of interest on it, he has faced mostly opposition on his 'zero CRR' theory. Industry body Assocham on 4 September strongly advocated for continuation of CRR for effective liquidity management in the banking system."Continuation of interest free cash reserve ratio (CRR) by RBI is for a healthy and effective direct monetary and indirect liquidity management as well as provide a big cushion in difficult times, consequent to a debate that is taking place to undermine the efficacy of CRR in present times," Assocham said in a release.ICICI Bank Chairman K V Kamath has disagreed with the suggestion of SBI chief Pratip Chaudhuri that RBI should scrap CRR, saying it is part of the monetary policy and no issue can be made of it.Whether CRR completely disappears from the Indian banking scene or not, the thought process has started to reduce it's importance for controlling liquidity. As BW pointed out (A Question Of Timing ), the idea of a statutory debate for lower CRR must be debated, and it looks like its time has come.(With input from agencies)
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Things have finally begun to move on the much delayed auction of 2G spectrum. On 6 August, Times Internet Ltd, Gurgaon, (TIL) was issued a letter of intent to be the auctioneer. This is a follow-up to the Cabinet announcing the base price for nationwide spectrum at Rs 14,000 crore last week.In all, there were three technical bids for the spectrum auction. The bidders included Times Internet, Gurgaon; Karnataka State Electronics Development Corporation and NCDEX Mumbai. However, the financial bid of only Times Internet was opened.This time round, fewer companies were in the fray to be auctioneers than in 2010 when the 3G auctions were conducted. The auctioneer's fee is fixed as a percentage of the difference between the base price and the closing price. With the base price at a much higher Rs 14,000 crore, the expectations are that the final price will not be too high. As a result, few companies showed interest to be the auctioneer.It is believed that the Empowered Group of Ministers will seek an extension of the August 31 deadline for the auctions at its next meeting scheduled for 7 August morning. The auctioneer will have to come up with an Information memorandum to conduct the auctions first. On 3 August, the Cabinet, headed by Prime Minister Manmohan Singh, decided to fix the reserve price at the lower end of the Rs 14,000 crore to Rs 15,000 crore band that was recommended by the EGoM.The Cabinet approved the levy of an annual spectrum usage charge of 3 to 8 per cent on different slabs of revenue as was recommended by the EGoM headed by finance minister P Chidambaram.The reserve price fixed was a disappointment for the telecom industry which had been pitching for a 80 per cent cut in the Rs 18,000-crore reserve price suggested by the Telecom Regulatory Authority of India (Trai) which they felt would lead to up to 100 per cent hike in mobile telephone charges.The auction is crucial for companies like Uninor and Sistema Shyam Teleservices, who have time till September 7 to offer their services after which they will be forced to close down their operations in case they fail to get a licence.
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A staggering 78 per cent of the global HR leaders do not believe their organisations are effective at fostering collaboration and social networking, things which have become essential for success of any organisation. In the global scenario, making the right connections, beneficial associations, nurturing relations are crucial for any organisation, but using analytics to effectively communicate in the organisations is not all that simple as it seems. When it comes to successful exchange of words, business groups lack efficiency to maintain associations, says a recent Quora Consulting Report. The report commissioned by Regus, attempts to provide thought leadership and insight into the future of business.As Jim Tamm, author of Radical Collaboration: Five Essential Skills to Overcome Defensiveness and Build Successful Relationships says,when too many people in a company lack collaborative skills it is a Red Zone organisation, which is a very low trust, high blame, unsupportive workplace. People in the Red Zone are more guarded, cynical, and suspicious. They are less open, so it is more difficult to solve problems. They avoid risk taking because if anything goes wrong someone will get blamed, so creativity suffers.The Quora consulting report, authored by John Blackwell, reveals that 78 per cent of the HR leaders do not believe their organisations are effective at fostering collaboration and social networking. It goes on to state that only 21 per cent HR managers have recently invested more in the tools required to promote these capabilities. Furthermore, less than 20 per cent are actively applying analytics to understand the impact of their efforts. In the study commissioned by Regus, samples show that financial out-performers are 57 per cent more likely than under-performers to use joint and social networking tools to enable global teams to work more effectively together. Three-quarters are poor collaborators despite the importance of tapping into insights around the globe; most executives struggle to effectively connect to their workforce. Aiming too low with collaborative capabilities many organisations are failing to not only invest in new collaboration and communication tools but also fully utilise the knowledge-sharing resources they already possess. The respondents said they employ collaborative tactics to enhance corporate communications and learning programmes and to target and recruit external candidates. However, collaboration tools are less commonly used for strategic purposes or idea-sharing. The respondents, who regularly use these technologies, only 19 per cent identify individuals with relevant knowledge, 23 per cent preserve critical knowledge and 27 per cent spread innovation.The results of the study were obtained after conducting in-depth interviews and surveys among 25,000 people hired in the past two years from diverse geographic locations. This research was prompted by the need for accurate comparator data required to create workplaces that are engaging, innovative, high-performing and continually delivering the productivity and financial competitiveness to stay ahead of the fast-chasing pack. The contributors came from all geographic regions: UK 17 per cent, Americas 14 per cent, Asia 12 per cent, Russia 11 per cent, India 11 per cent, Germany 8 per cent, France 6 per cent, Africa 5 per cent, Middle East 4 per cent, Nordic countries 4 per cent, Australasia 3 per cent, Italy 3 per cent and Iberia 3 per cent. They came from a wide range of industry sectors and organisational size – from large global corporate to SMEs and start ups.
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