The sense of gloom deepens. Employees and employers are seriously worried about the future. Almost everyone seems to be resigned to the fact that nothing will change in India till general elections. The Greek crisis may have made matters worse for India, but even the optimists are openly talking about "incompetent political leadership." Expect nothing till 2014 elections.In many ways the economic crisis of India is a result of political crisis. Economic reforms can be pushed through only if they deliver political benefit. Political bargaining that underlines benefits to the people can ensure that critical reforms are accepted by not just the Opposition parties but also the ranks of a ruling alliance. Even today - 20 years of reforms later - nobody is telling the people why reforms are important. As a result, even the citizens who have benefited are fearful of economic change.The industry and the political parties have failed to excite voters about the benefits of economic reforms. The solution is two pronged. Industry has to begin meaningful conversations with civil society and not just business media.And the ruling political group has to create political space for economic change.Let us deal with the ruling party's role first. As Finance Minister in the 90s, Dr Manmohan Singh could drive reforms since the then Prime Minister Narasimha Rao backed him. Mr Rao managed the political atmosphere even as Dr Singh went ahead with important changes like delicensing of industry.Allowing FDI in India met with a furore from the business and political class. But the government pushed ahead. More than 15 years after these reforms, India and its citizens are the better for it. From telecoms to insurance to automobiles, Indian consumers have world class service and choice.The UPA government led by Sonia Gandhi must now give political cover for its Cabinet to take strong decisions. It has to take opposition along it for economic issues. Leading opposition party BJP is not anti-reforms. But it is also seeking a political answer to economic challenges.Now let's look at the role of industry bodies. The chambers of commerce have little or no connection with the civil society. None of the domestic or foreign chambers have tried to have a direct conversation with civil society. Industry bodies like the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce of India (FICCI) spend most of their time closeted with bureaucrats and ministers seeking policy changes. Even global chambers of commerce like the Confederation of British Industry and American Chamber of Commerce are looking at the narrow sectoral picture. They only seek changes that benefit their projects and sectors. Often they hold grand conferences for fostering dialogue between industry and government.Then they trot over to business media. Even here they indulge in corporatespeak. They try to criticize government without offending anyone. It's a tough task. In the end, nobody is impressed. The government does not take them too seriously, the business media makes the most of the spectacle, but in the end little changes. What the people see is a murky alliance between government and industry and justified anger towards crony capitalism.So what is needed to create the pressure for economic change? The answer lies in politics and people.Industry leaders and business bodies need to create architecture of conversation with citizens and consumers. And not just in metros, but in small towns and villages. They have to tell the story of how industry is helping create jobs, products and technology that is enriching the lives of millions.The opposition to new projects and land acquisition is partly because people see only the losses but not the gains from a factory coming up in their neighbourhood. It is a rare business leader or corporation that takes people into confidence.Industry bodies have to start sharing their thoughts and plans with regional media, local voluntary bodies and civil society bodies. This has to be an ongoing campaign, if the industry really wants people to support its wealth creation activities.Cozying up to ministers and business media will not create the public pressure to seek a change. Unless the people and voters demand a more robust role for industry, the political class will continue to treat business as a necessary evil. An evil that has to be used for monetary gains, but discarded when policy change is sought.It's time to move from "Deliberation to Transformation," As the World Economic Forum has identified as its theme for its annual India meet. But this transformation has to be driven from the bottom. This change has to be driven by taking the people into confidence. Talk to the people and political hurdles will start lowering.(Pranjal Sharma is a senior business writer. He can be contacted at pranjalx@gmail.com)
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The Right to Information (RTI) Act of India, 2005 advises public authorities to provide as much information as possible to the public through various means of communication. It further mandates the use of the Internet as one such communication tool in making that information available and accessible. However, in India, the digital divide continues to be a challenge for citizens. With a population of more than a billion people1, the total number of users who access the Internet is roughly 100 million2, less than 10 per cent of its entire population. As much as 72 per cent of the pages on the Internet are in English3. In India, nearly 77 per cent4 of the population constitutes of non-English speakers and users making the access of a predominantly English Internet non-intuitive and often difficult. Internationalized Domain Names or IDNs in Hindi are scheduled for launch in May 20125 that will enable organizations and individuals to register their website addresses in Hindi. IDNs in other Indian local languages will follow later.Internationalized Domain NamesIDNs are domain names or Web addresses in local language. Historically, domain names have contained ASCII (American Standard Code for Information Interchange) characters e.g. domain names have used the English alphabet (a,b,c…z), numbers (0, 1…9) and the hyphen (-). While Web content written in various languages has been around for a long time, domain name addresses in local language scripts were launched two years ago. In October 2009, ICANN (Internet Corporation for Assigned Names and Numbers) announced the launch of IDN country code top level domains (ccTLDs) that will be written entirely in the local language. भारत.भारत is an example of an IDN ccTLD in the Hindi language.The domain name is a critical way to locate resources on the Internet, and IDNs make the Internet more accessible for non-English speaking countries and local communities by allowing users to access the Internet in their local language. As of June 2011, 26 countries have received one or more IDNs6. India has passed its string evaluation phase7 and has entered the final phase of delegation approval by the ICANN board for the launch of new TLD .bharat in seven Indian languages - Hindi, Bengali, Punjabi, Urdu, Tamil, Telugu and Gujarati. Why IDNs Are ImportantIDNs are important for many reasons. The most important is the growing number of Internet users around the world for whom it is difficult to recognize and use ASCII characters and reproduce them on keyboards or use software to enter website addresses in browsers. Over the past decade the Internet has internationalized its audience and provided a platform for services beyond those targeted for speakers of Latin-based languages. In the year 2000, the number of Internet users in Asia was at par with Europe and North America. Today, India has more than those two continents combined8.Here are some examples of how ccIDNs make navigating the Internet much easier. If you read an online newspaper in Gujarati for example and there is a link to more information, then it can be a challenge to reproduce an ASCII Web address. Besides, it makes more sense to have a Gujarati based address for a site with Gujarati content. If you see a billboard advertisement that contains a link or email address, it is more useful if the website or email address is based on characters that you can reproduce. In cases where website addresses do not convey any meaning in particular, it may be even more important to use a script or alphabet that the target audience or intended users can recognize and be able to produce on a computer keyboard. IDNs have clear advantages in targeting local markets and non-English speaking Internet users, and for local promotions and advertisements. Success in Indian markets often requires brands to go regional in their promotions and advertisements. With IDNs, brands will be able to reach out to users in the language they may recognize and prefer. IDNs Will Offer New OpportunitiesIDNs are expected to offer the entire Internet ecosystem – government/policy makers, registrars, businesses and consumers – new opportunities to explore, access and grow as the case may be. IDNs will significantly enhance the user experience. IDNs may make it possible for more people to access the Internet and do more things online with greater ease. With IDN ccTLDs, people all over the world will be able to type domain names in their own familiar languages. Businesses may be able to advertise their websites in local languages for effective targeting of users. By adding IDNs, domain name registrars will have the opportunity to expand registration services and potentially increase revenues with their existing infrastructure. As Internet usage grows with the use of IDNs, it holds the promise for great impact on social and economic development in India as it does worldwide. Verisign, a pioneer in domain name technology and registry services, is a leader in the propagation and adoption of IDNs. IDNs make it possible for millions of current and potential users to access the Internet entirely in their local languages.Sources1 India's population in 2009 was 1.15 billion people as reported by World Bank, World Development Indicators, updated for April 27, 20112From a news report in the Economic Times, April 28, 2011 available at http://articles.economictimes.indiatimes.com/2011-04-28/news/29482828_1_facebook-users-social-networking-social-web3 From the news report titled ‘EURid and UNESCO assess IDN uptake', posted on May 31, 2011, available onhttp://www.idnnews.com/?p=99204 (http://www.tesol-india.ac.in/EnglishTeachingIndustry/india-worlds-second-largest-english-speaking-country)5 Available on the link http://blog.hamarahost.com/india-to-have-bharat-domain-names-in-hindi-by-may-2012/1939.html, posted on November 4, 20116 From the blog post by John Yunker titled ‘India one country many IDNs' posted on June 6th, 2011; available at http://www.globalbydesign.com/blog/2011/06/06/india-one-country-many-idns/7 From the blog post by John Yunker titled ‘IDN update: Korea and India join the party', posted on September 27th, 2010; available at http://www.globalbydesign.com/blog/2010/09/27/idn-update-korea-and-india-join-the-party/8According to the Verisign Domain Name Industry Brief (Volume 7, Issue 4, November 2010) (The author is Vice President APAC, Naming Services, VeriSign)
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Credit Cards and Debit Cards have become synonymous with money in one's pocket, at least in the urban setup. Their penetration is increasing at a pace one couldn't have possibly imagined a couple of years ago. Age-old institutions like the Indian Railways are now asking travelers to pay by card, if not for anything else, but ease of use.Harsh Roongta, Chief Executive Officer at Apnapaisa.com, a comparative personal finance portal, and Suresh Sadagopan, founder of Ladder 7 Financial Advisories discuss with Tanushree Pillai the advantages and pitfalls of credit and debit cards and how to use them wisely.What are credit cards and debit cards in layman's terms?Sadagopan: One can buy things on credit up to the pre-approved limit in a credit card. Basically, you are spending money you may not have now. A debit card, on the other hand, is linked to the bank account and one can spend up only what is available in one's account. This is equivalent to buying with one's cash. One does not have a chance to spend beyond what one has.Roongta: Carrying cash can be cumbersome and dangerous at times. But, plastic cash or credit cards / debit cards make life a lot simpler. These cards can be swiped at almost any listed merchant establishment around the globe for purchasing any product or services. You can also withdraw cash from ATM on your credit / debit card. You can get a credit card from any issuer without any banking relationship with them but debit card is issued only against your bank account. Some secured credit card requires the user to have a fixed deposit with the card-issuing bank.What are the plus points for using credit/debit cards?As far as credit cards are concerned, the advantages are • Purchase products or services possible whenever and wherever you want, without ready cash and one can pay for them at a later date.• Have the option of paying only a part of the total expense. The balance amount can be carried forward, with an interest charged (though the interest rate is very high)• Enjoy a credit limit without any charges for a limited period (mostly 20 to 55 days). If you do not pay the full amount on due date, you are likely to lose free credit period• Convenient for very short duration loan where convenience not cost is the consideration• Only if one does not have the capacity to pay at the end of the cycle and goes into revolving credit, that the problems startAs far as Debit Cards are concerned the advantages are:• Purchase products or services whenever and wherever you want, without the need for carrying cash. The amount gets directly debited to your bank account.• Controls unwanted impulsive buying habits, as the user cannot buy anything above his saving account's amount.• No interest has to be paid as the amount is directly debited from the account at the time of purchase. Hence, no worries about delayed payment and being penalized.There must be a lot of disadvantages as well. Why don't you spell these out?Of course, there are a lot of disadvantages . As far as credit cards are concerned• User may become an impulsive buyer and tend to overspend because of the ease of using credit cards. Cards can encourage the purchasing of goods and services you cannot really afford.• Credit cards are a relatively expensive way of obtaining credit if you don't use them carefully, especially because of high interest rates and other costs.• Lost or stolen cards may result in some unwanted expense and inconvenience.• The use of a large number of credit cards can get you even further into debt.• Use of credit card, introduces an element of risk as the card details may fall into the wrong hands resulting in fraudulent purchases on the card. Fraudulent or unauthorized charges may take months to dispute, investigate, and resolve.• Any delays in payment results in hefty late payment charges along with high interest rate on amount due and also being reported as default in CIBIL As far as Debit Cards are concerned• No revolving credits facility. The entire amount gets debited from the bank account at one go. Hence user cannot buy now and pay later. • Lost or stolen cards may result in some unwanted expense and inconvenience.• Using a debit card, introduces an element of risk as the card details may fall into the wrong hands resulting in fraudulent purchases on the card.What are the biggest misconceptions people have about credit cards?People are completely mistaken about the concept of revolving credit. It is believed that one pays interest only on the outstanding bill amount. But the truth is whatever new purchases one make during revolving credit facility, the new purchases gets added to old dues and the interest is charged on the entire amount (i.e. old dues + new purchases) • Cash withdrawal on credit card is about the same as using a debit card at an ATM – cash withdrawal on credit card can cost the card holder minimum Rs. 300 per transaction or up to 2.5 per cent of amount withdrawn, whichever is higher.• Paying minimum amount due on your credit card each month is okay – it will save the day temporarily, but will grow into a big debt one day with a very high interest rate.• Transferring the balance of one credit card to another is an effective way to manage debt – it will certainly save the user from higher interest rates on revolving credit, but having multiple cards with higher debt will ultimately become unmanageable for most people.What's the typical payment process involving- interest rates, grace period (if any), late fees etc like?Maximum credit period usually varies from card to card between 20 and 55 days. Interest rate on revolving credit facility can go as high as 3. 5 per cent per month or 42 per cent per annum (3.93 per cent per month or 47.19 per cent per annum including service tax). Late payment fees varies between R s 100 to Rs 700 per month plus service tax.What is the right way of using credit cards?• Use debit card instead of credit card for everyday shopping like groceries, clothes, etc. • Using credit card excessively in lieu of cash can lead to debt. Always remember credit card is an alternate to money but not money, so use it wisely.• Don't get into the habit of paying minimum due as the outstanding amount will pile up into large debt and one can end up paying very high interest rate. Stay within the credit limit. Lower balances are easier to manage. • Having large credit card dues will also have a significant impact on your home loan eligibility if required in future. Lenders determine the borrowers ability to take on additional EMI burden vis-à-vis his current net income. Larger the burden, lower the loan eligibility amount.• Persistent delays or defaults can affect your credit rating. Defaulting on your credit card dues jeopardizes your ability to get loans or credit cards in future. Even a bad credit history of a co-borrower can ruin your chances of getting a loan.How does one ensure proper safety of both credit and debit cards?• Go for a photo identity credit card. When your photo is imprinted on a card it can double as an identity card as well.• Sign your card immediately after receiving it and do not write PIN on the card jacket.• Do not lend your card to anybody.• Preferably carry your card separately from your wallet• While buying a product over the phone or mail order, be sure to note all the details carefully including postal address. Note down the name of the person who spoke to you as well as exact amounts, as these will be necessary in case of a disputed billing statement.• While using your credit / debit card at an ATM, make sure nobody sees you punch in your PIN number.• If you lose your card, call and inform the card issuing authorities and make a police complaint as well.• Check your card when a merchant returns it and make sure that it is your card that he has returned.• As far as possible, try and be present when the card is swiped / the dial-up is taking place to ensure that there is no misuse of the card.• Verify the amount before signing the charge–slip.• Always verify purchases with your billing statement. Any discrepancies should be informed immediately in writing.• Notify any changes in your address / telephone number to the card issuer immediately.• Watch out for mobile alerts of spends on your cards and promptly dispute if the debt is unauthorized.• Mask the CVV number as this can be misused to transact by someone who knows one's card no. Ideally, CVV numbers should be committed to memory ideally.How does the process of balance transfer work?It is a facility where an outstanding balance on one credit card is transferred to another at a small fee or at a lesser interest rate for a pre-determined period . This is an introductory incentive offered to customers by credit card companies who want to acquire customers by weaning them away from their present credit card companies. A new credit card company may be willing to take over up to 75 per cent of the amount outstanding on the customers' old card to his new credit card account with them at a lower rate of interest. Normally the user is given a time limit of six months at a lower rate of interest to clear his transferred amount. However, user could possibly be charged a higher rate of interest for new purchases. If the user is unable to clear his balance transfer amount within six months, he will end up paying a higher rate of interest with the new credit card company also.How can one have multiple credit cards without getting trapped into a web of unending debt?Roongta: Different credit card companies have different monthly billing cycles. Therefore, if you have access to different credit cards, you are in a position to make full use of the interest-free grace period provided by the respective card companies.Whenever one applies for a credit card, the card issuer pulls his credit history from the CIBIL, which gets registered as an enquiry in his credit report. Excessive numbers of such enquiries indicates that he is "Credit Hungry" and in an urgent need of money. This makes the providers more cautious while evaluating his application for credit cards or any loans. Sadagopan: It is better to have one credit card and use it and pay off the amounts on time. Going for another credit card just to borrow to pay off a third credit card will be a dumb thing to do. It may be a better idea to take a personal loan and payoff the credit card debt as personal loans come at lesser interest rate as compared to credit card debt.
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The recovery from the chronic global slowdown is only partially complete in both developed and developing countries. However, developing economies are better off depending on local conditions and medium-term productivity growth rather than the large, globally integrated, influential forces that dominated economic activity before the financial crisis, and still play an important role in moulding global regulatory policies. The robust growth registered in emerging economies in the last decade has thwarted suspicions regarding these blocks. Yet, several tensions and external events have the potential to disrupt the process of development.Output is expected to come in stronger than anticipated in performing economies. The other case could be that very strong speculative capital flows that characterised the third quarter of 2010 may return. Either scenario could potentially accentuate inflationary pressures in the global economy: both those emanating from commodity markets and those coming from increasingly binding capacity constraints in a number of emerging markets. In such a scenario, which pre-supposes that policy tightening efforts underway are not sufficient to rein in demand, authorities would be obliged to tighten more aggressively in 2012, thus leading to a more pronounced slowdown in 2013.The big dilemma confronting democratic governments is the choice between bailouts and debt waive off. Undoubtedly, capitalist prudence orders for the former. Often bailouts occur more frequently than mass waivers of debt, albeit India presents little difference with its distinct polity and populist commitments. Indeed, complete financial recovery could be a desired endgame, though conquering it would be a pipedream under the present circumstances in which regulators, governments and financial institutions are functioning across powerful economies.Moreover, high fiscal deficits and rising sovereign debt pose medium-term challenges to a wide-range of OECD countries. So is it time for top rank global policy makers to acknowledge this epoch making economic shift in favour of emerging economies and start sending telepathic connections across the world?Consumption Conundrum The global economy has grown over the decades by relying heavily on American consumption and policy dominance (good or bad). This intensified with the disintegration of the USSR in 1991 as it resulted in the demise of an alternative ideological block. The structural force behind large US consumption has been a significant middle class. The middle class is an ambiguous social classification, broadly reflecting the ability to lead a comfortable life. But the current downturn has brought this process to a halt. US households are saving again in an effort to rebuild lost wealth. The consensus forecast is that this will be a lasting effect of the global financial crisis.How can the world economy fill this void in global demand brought on by the retrenchment of the American consumer class? Naturally, the emerging middle class in China, India and other populous countries are moving to become the next global consumers under the changed set of conditions. But the policy support to achieve such a rebalancing is not easy in these countries facing different lacunas. In short, Asian consumption is tied, according to many analysts, to long-term institutional changes.Shifting Nexus Of PowerAt this decisive phase, as economies in Sub-Saharan Africa and the Middle East develop and open up to trade, links between Asia, the Middle East, and Africa are expected to grow further. Economic integration between these regions and the emergence of south-south trade will certainly result in the formation of influential trade hubs. The trade of the future will be determined by the availability of cheap resources and the destination of final demand; this would be a big accomplishment for these hitherto tail-spinning economies. Big corporations from the developed economies have already begun to question whether the challenges of outsourcing their production processes outweigh the benefits of producing locally. In this respect, Africa and the Middle East offer both low-cost production capabilities as well as a rapidly growing domestic market. It is becoming rather obvious that China may be losing its status as the "manufacturing leader." Cost economics that have long worked in China's favour have come full circle: domestic wages are on the rise, eroding much of the cost arbitrage offered to foreign companies. Even Chinese companies are affected as improving living conditions in the hinterland discourage potential migrants from seeking work in urban coastal provinces. Furthermore, an aging population in the next decade will likely weigh down labour supply and impact wage competitiveness. As Chinese production moves up the value chain, workers are demanding higher wages, better working conditions, and added welfare benefits. Thus, rising labour costs, along with pressure to loosen control on its exchange rate, could pose a serious threat to China's international competitiveness if productivity does not correspondingly improve.Intermediate production, rather than locally produced finished goods, as an economic structure presents immense opportunities for emerging markets to develop specific capabilities and capture a bigger share of the supply chain. From a company's perspective, an emerging trade network with a wide portfolio of capabilities allows for diversification in the supply chain rather than extreme reliance on a single country whose competitiveness may be decreasing.Nonetheless, China will remain an important, if not dominant, player in the future. The country's burgeoning middle class is set to become more affluent and boost consumption levels in the next decade. The head of emerging markets at Morgan Stanley, Ruchir Sharma's newly published book, Breakout Nations: In pursuit of new economic miracles gives some lucid views about the new wave of competency coming from the side of emerging economies.Challenges On Home GroundThe cheap flow of foreign capital had made Asian economies such as China and Japan exclusively powerful in the region for a long time before opening of other economies, primarily India. But lately both Chinese and Japanese economies are under excessive strain because of their over integration with western nations. The case with India is different because liberalisation took place later and with active regulatory restraints.Raghuram Rajan in his remarkable work, Fault Lines mentions India's growing income inequality and the dangers that a social underclass poses to the country's economic future. His strong emphasis on the ills of maturing cronyism in India's power centre is worthy enough to be considered as a grave threat to the essence of India's constitutional mandate. Rajan is right in pointing out the growing numbers of Indian billionaires are mostly products of networking rather than enterprise.For the last several months, the Indian economy has been consistently juggling between controlling inflation and maintaining robust economic growth. In order to control spiralling inflation, the Reserve Bank of India chose to sacrifice growth in order to check the inflation. The 20-month period, until October 2011, of rising interest rates has slowly but surely put the brakes on economic growth.For keeping alive the basic mandate of India's growth, the wave of policy/regulatory laxes need to be checked at any cost and synergising efforts should be made to retrieve Indian economy's lost confidence. Instead for unwarranted follow-up laws, we require an overhaul in the existing regulatory framework;India can't afford an ill policy regime.Inflation, that had threatened to derail India's growth for several months, had shown signs of weakening in the recent past weeks. However, inflation is on the rise again, and it is likely to stay in the 7.0-9.0 percent range in the coming months. The central bank cannot afford to conclude that inflation will stabilise in the medium term. So far in 2012, the RBI has already eased the reserve requirements for banks, infusing liquidity into the economy. It is likely that further liquidity could be infused into the economy in the coming months. Measures to ease liquidity may, however, not be enough to provide a much-needed fillip to the economy.Growth is slowing down, investment is falling, and business sentiment is on the decline. In the absence of any credible government action, the central bank may not be able to stave off calls for reducing interest rates for too long. Questions about whether or not the interest rate will be reduced ahead are giving way to when and how dramatically it will be cut.Leading social historian, Ramchandra Guha's assertion that the India's economy is a fifty-fifty economy, best reflects the trend, and our economy has been following since 1991. Making Indian economy hundred percent functional should be the prime task of policy makers-the two basic ideas cam materialise this dream-growth with equity and emancipation of the marginalised with ensuring lowest possible economic disparities. Under a mixed or market driven economy, nothing more could be anticipated.Atul Kumar Thakur works on policy issues. He can be reached at atul_mdb@rediffmail.com
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For anyone who was wondering whether Apple would take its time bringing the new iPad to India, rest easy. April 27 will see the coveted device arriving in stores in India. Eleven other countries including South Korea, Malaysia and others will also get the third generation iPad. The prices go like this, straight from the Apple announcement:"The new iPad Wi-Fi models will be available in black or white on Friday, April 27 for a suggested retail price of Rs 30,500 including VAT (Rs 29,048 exVAT) for the 16GB model, Rs 36,500 including VAT (Rs 34,762 ex VAT ) for the 32GB model and Rs 42,500 inc. VAT (Rs 40,476 ex VAT) for the 64GB model. The iPad Wi-Fi + 4G models will be available for a suggested retail price of Rs 38,900 inc. VAT (INR 37,048 exVAT) for the 16GB model, Rs 44,900 inc. VAT (Rs 42,762 ex VAT) for the 32GB model and Rs 50,900 inc. VAT (Rs 48,476 ex VAT) for the 64GB model.The new iPad will be sold through select Apple Authorized Resellers. Additionally, iPad 2 is available at a more affordable price starting at just Rs 24,500 inc. VAT (Rs 23,333 ex VAT) for the 16 GB Wi-Fi model and just Rs 32,900 inc. VAT (Rs 31,333 ex VAT) for the 16 GB Wi-Fi + 3G model."You can now see the iPad on the Apple India website http://www.apple.com/in/.The best thing about the new iPad of course is the display. Overall, the device won't look very different from its predecessor, the iPad 2, except for the Retina Display screen, which, to the annoyance of many who considered it a bad pun — is described by Aple as ‘resolutionary'. Under the hood is a different processor: A5X chip with quad-core graphics and a 5 megapixel camera with better optics for photos and 1080p HD video. The battery life is as good if not better than the iPad 2, claims Apple. It depends on your usage, of course. My iPad 2 gives me more mileage than stated taking me through the day and well into most of the night.It's rather nice that the iPad 2 will continue to be available till the end of April in the two base models and that too at a lower price. It's every bit as worthy and capable. For the most part, the same apps will work on both but will just look better on the new iPad. If you're looking to save a few thousands it's not a bad strategy at all to spend more – gradually – on apps instead. On the other hand, if you take a look at the screen and decide you don't want to compromise, well, you have that choice too.
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At eighteen you get a vote. The Ahmedabad-based Madhavpura Mercantile Cooperative Bank (MMCB) got one on Thursday -- a big vote of no confidence from Mint Road. Twelve years after it was taken on a joyride by former Big Bull, Ketan Parekh, the Reserve Bank of India (RBI) blew the whistle -- its license to carry on banking activities was annulled.In the case of MMCB, it was a question of when it will be asked to down its shutters. The central bank's inspection report showed as on end-March 2011, MMCB had a negative net worth of Rs 1,316.50 crore, negative capital adequacy of 1,941.1 per cent, gross bad-loans of Rs 1,126.55 crore (at almost 99.99 per cent of gross advances) and accumulated losses of Rs 1,357.41 crore.The End GameOn March 16 this year, a show-cause notice was issued to MMCB as to why its banking license should not be revoked. Two days later, the bank replied its financial mess was due to the Rs 1,200-crore fraud perpetrated on it by share brokers (including Ketan Parekh and his associates) in collusion with the then members of its Board of Directors. The bank said a sum of Rs 803.00 crore or 72 per cent of the total amount "were unsecured due to unenforceable securities, defective documentation and hence not recoverable". It conceded that the reconstruction scheme for the bank failed due to non-fulfillment of commitment of UCBs (urban co-operative banks) to contribute as they feared for the safety of their monies.An attempt to salvage the bank with the help of a new set of investors failed to pass muster with the central bank. MMCB came up with a revival plan — a loan of Rs 1,000 crore sourced by a non-resident Indian from the World Bank and a few European banks. This unnamed NRI was to put in Rs 500 crore of his own funds for the next ten years. It was later found MMCB had no clue about the antecedents of the NRI or the source of funding. Worse the bank was also not sure if all this will help it to get back on its feet. Shakeout in UCBs on CardsMMCB is a warning to other UCBs – they have to be relevant or the game's over. Few have a strategic vision or financial products worth a name. The shakeout has started. At end-March 2011, there were 1,645 UCBs. The RBI has received 158 merger proposals for merger, no objection certificates have been issued to 95 of these proposals. Out of the 95 mergers reported so far, 59 comprised of UCBs having negative net worth. The maximum number of mergers took place in the State of Maharashtra (58), followed by Gujarat (16) and Andhra Pradesh (10).The RBI Report on the Trend and Progress of Banking in India for 2010-11 (the latest available) shows the fragmented nature of UCBs. As on end-March 2011, only six UCBs had assets of more than Rs 500 crore, but accounted for 59 per cent of the total assets of the sector. UCBs with assets between Rs 100 crore and Rs 500 crore had 27 per cent of total assets. The remaining share of 14 per cent of total assets was attributable to UCBs with smaller asset size (Rs 15 crore-100 crore), but which accounted for almost 73 per cent of total number of UCBs.
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Do we really see the world around us with our eyes or do we see it using our mental models. Behavioral scientists are concluding that when it comes to perceiving the world around us, our prejudices shaped by past experiences play a major role. This means that, we as human beings can have different perceptions from the same observation. The problem aggravates when it comes to management of social organizations. On one side, we need collaborative approach from multiple minds to achieve anything meaningful in organizations but on the other hand, perceptual differences about the same observation can lead to conflicts. It is not uncommon to find managers, having widely varying conclusions from the same set of data or two managers with exactly different view-points, having "hard" data to back up their claims. It seems we see what we believe and not the other way round. We have a problem. "Hard" data is not helping us differentiate between truth and perception. Data was supposed to solve everything. Remember the famous quote "In God we trust and for everything else, get the data". Just getting the data is not helping.Data at the most validates the existence of an entity but the inferences (or deductions) from the data are made in the minds of the managers.Inferences are hypotheses of cause and effect. Most managers would admit that decisions have to be based on root cause and not just observed effects. But as we dive deeper to seek the root cause of a problem, the causality entity becomes abstract and is not directly observable with data. For example, let us take a case of chronic poor deliveries from a specific vendor. Ask for deeper causality (ask why few times) and many managers are likely to attribute it to "attitude" problem of the vendor. Consequently, a decision might be taken to change the vendor/counsel the vendor. In this example data can validate the existence of the entity "poor deliveries". It is difficult to get any meaningful data on "undesirable attitude". Decisions in organizations are taken based on such causality models in the minds of managers, which are shaped, by prejudices and past experiences.For effective decision-making, do we need to have more data or an ability to develop correct mental models? Human beings are supposed to be the most intelligent living beings on the planet. So why are we failing to see reality as it is without biases?Behavioral scientists are reminding us that we as human beings have serious flaws in rational thinking. This is primarily because, as human beings, we have been designed to take fast intuitive-heuristics based decisions to protect ourselves from any danger (we do not want to analyze too much when faced with an imminent danger) and at the same time, we also have the ability to do slow rigorous analytical evaluation in forced classroom situations. The flaws in decisions come from using the faster mind (which "jumps to conclusions") when one needs to use the slower analytical processor. The faster mind draws heavily from past biases and experiences.We need to use the slow analytical processor in many situations (which are not life threatening). In organization context, the analytical processor has to also think in terms of holistic understanding and not just departments. This is primarily because the performance of any system(like an organization) is guided more by the interaction between parts (departments) rather than the property of the parts themselves. The knowledge of the interaction is more important than the detailed knowledge of the parts. But managers are formally trained only to understand parts (departments or functions) like accounting, sales, marketing, production, logistics etc. Managers are not formally trained to think, analyze and understand the cause and effect flowing through various different functional areas. We need formal training because we, as human beings, also have poor intuitive understanding of non-linear loops of cause and effect, particularly when they are distanced by space (cause in one department creates an effect in another department) and time (the time lag in effect materializing after the cause).How do we train our mind from falling into the trap of taking fast decisions from erroneous mental models?Stop Confirming – Look For FalsificationThe best way forward is to take the approach of the scientists. Scientists know that it just takes one contrary observation to prove a hypothesis wrong but at the same time many observations cannot prove a hypothesis right. So the best way to check reality is the test of failure. If a hypothesis has survived many tests of failure, it can be assumed to be right for the time being. As managers, we have to develop the ability to attempt and disprove our hypothesis rather than trying to confirm it.An honest attempt at failure testing can lead to us to develop a hypothesis, which reflects the reality as-is.Think Holistic – Not LocalDepartments are not just entities, which classify and groups managers in organizations, but they also compartmentalize the thought process of managers. This is primarily re-enforced by the culture of blame game and "turf" protection approach of managers. If managers train themselves in avoiding the blame game, they will see reality in a different way. Simulators can also help managers understand the cause-effect loops without falling into the trap of blame game. Computer simulators also have another advantage – they can collapse the time and space dimensions (a day of real life can be modeled as a second in computer time and a manager on a simulator can visualize the effects spanning across departments) to make managers aware of the non-linear loops of cause and effect across departments.Beware of the Amplified NoiseAmplified noise is a minor regular uncertainty (or variation), which appears as a big problem because it is the "visible" and most "talked about" reason for a mishap.The issue of "amplified noise" prevents managers from differentiating between the real issues and the irrelevant noise. For example, if we have started late from our place to reach the meeting point, every small traffic problem appears as a big problem – the amplified noise, which otherwise we would have ignored if we had started on time. Many production managers suffering from poor on-time delivery performance complain about a plethora of problems like quality problems, absenteeism, machine breakdowns etc. as the list of reasons for poor on-time performance. However in many production shop floors, these problems get amplified when there is less available time to complete an order. The real problem in many shop floors is thehigh waiting times in front of machines in the upstream work centers, which takes away,crucial time to deal with day to day uncertainties in downstream work centers. Managers are also intuitively aware of the problem of high waiting time but this problem is not as amplified as the noise. Signals of amplified noise take away the mind from the real problem of wastage of buffers.Using the above approaches, one can develop an ability to develop correct mental models. Now the million-dollar question, do we need lot of data for decision-making?Being part of a system, every manager gets affected by the existence of a problem. They are aware of many data elements intuitively. For example, if there is chronic problem of stock availability issue – they are aware of the problem based on exposure to frequent customer complaints and expediting requests (even though data can showvery high service levels based on some unique definition of the term). If the "hunch" of plant managers says their on-time performance (based on agreed definition) is around 40-50 per cent, there is no need to check if it is actually 65.2 per cent or 25.2 per cent. From the point of view of system improvement, the level of reliability of deliveries is poor in any of the scenarios and one needs a dramatic improvement in performance to create a meaningful experiential difference to the end customer. (Level of perception of deliveries of end consumer is almost the same for on-time performance of 25 per cent or 40 per cent or even 65 per cent because while placing the order, the end customer is not sure of the date of deliveries in any of the cases). Managers are always exposed to issues even at times when formal data (processed using unique definitions) camouflages the problem. Their intuition is more powerful than the data derived from the system. However their intuition is also cluttered with many non-issues and incorrect causalities. With properly structured thought process, one can get the managers to verbalize the real issues, which also occupy their minds. A group of cross-functional managers have a wealth of collective intuition about different issues in the organization. If we are able to use the right thinking tools, the collective consciousness of a group of cross-functional managers can be guided to build the right mental model – the one which does not suffer from confirmation bias, is able to differentiate amplified noise from real issues and able to visualize the cause and effect links spanning across departmental boundaries. It is high time organizations invested in improving the thoughtware, much more than they do for getting more and precise data elements through additional investment in hardware and software.(The author is Satyashri Mohanty, Founding Director, Vector Consulting Group (VCG). VCG (www.vectorconsulting.in) is the leader of ‘Theory of Constraints' consulting in India. It is an implementation focused consulting firm which helps companies build supply chain capabilities and links part of its fees to the benefits derived by its clients)
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To strengthen the SUV portfolio where Mercedes-Benz has been lagging behind its rivals BMW and Audi, the company on Tuesday launched its third-generation M Class sport utility vehicle in India, priced at Rs 56.9 lakh (Ex showroom Delhi).Mercedes-Benz has been so far focused more on the Sedans — C-class, E class and S-Class. However, after losing the number two slot to Audi recently, the company is all geared up to fill the gap and launch more products in the segment where their volume is low. Mercedes sold around 139 units less than Audi in the first quarter this year while BMW sold around 100 units more than the 2,269 units sold by Audi in India.At present, Mercedes' SUV portfolio comprises the iconic off-roader, G55 AMG; luxury off-roader, GL-Class, ML-Class and also the R-Class. In January-December 2011, Mercedes-Benz sold more than 800 SUVs comprising GLs and MLs in the country. The G55 AMG on the other hand, priced at a steep Rs 1.1 crore, sold 30 units since its launch in Feb-2011."The SUV portfolio has been steadily growing over the years and will be of prime focus as there has been a constant growth in demand for our SUVs," says Debashis Mitra, director, Sales & Marketing, Mercedes-Benz India.The new M Class is 15 per cent cheaper than its previous edition and 20 per cent more fuel efficient. Powered by 2.1 litre diesel engine, the new vehicle is 23-mm longer and 15-mm wider than the old car, and it sits 20-mm lower too. The vehicle will compete with the Audi Q5 and the BMW X5 in India. Deliveries of the new vehicle will start from end-June/early-July through 70 outlets in 31 cities.
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