Life is so surprising,
at times it excites us and sometimes its found depressing.
But one needs to move on, have to groove on the music that the life plays
because it does not matter if its the best or the worst time...
Friends its the only time we have..!
--- NJ
Saturday, December 3, 2011
Saturday, August 29, 2009
'YATRA' - A Journey of Life...
'YATRA’: A Journey of Life
Every being on this Earth right now is on a journey, a journey that is endless, that continues till a traveler gets a final signal of death to stop. The journey of life begins with birth, moves on to various stages like infant, childhood, teenage, youth and continues till the last stage where the body mixes up with the five elements it is made up of.
During the journey of life one comes across many things, people, events and resources, but all these becomes companion for specific time frame, every traveler travels lonely and completes this endless journey all alone. There might be many hurdles faced, many detours that might compel to divert to a new path but still, a "successful life" is defined by how victoriously the map holder completes the journey that is set before him or her.
As soon as a child can comprehend the meaning of words, a map of the long and difficult journey, described with hope and admiration, is set before them. The maps other than physical are passed on by mouth through family, friends, and acquaintances describing their experiences and opinions about the routes that they had taken on their own personal journey. A journey is made up of one overall map and various smaller maps, telling of the alternate routes that are available. It is upon one what route one chooses to continue to reach one’s destination, but life as all knows has no destination, the journey completes only when one finds death but ironically it’s the beginning of a new journey in itself.
Every being on this Earth right now is on a journey, a journey that is endless, that continues till a traveler gets a final signal of death to stop. The journey of life begins with birth, moves on to various stages like infant, childhood, teenage, youth and continues till the last stage where the body mixes up with the five elements it is made up of.
During the journey of life one comes across many things, people, events and resources, but all these becomes companion for specific time frame, every traveler travels lonely and completes this endless journey all alone. There might be many hurdles faced, many detours that might compel to divert to a new path but still, a "successful life" is defined by how victoriously the map holder completes the journey that is set before him or her.
As soon as a child can comprehend the meaning of words, a map of the long and difficult journey, described with hope and admiration, is set before them. The maps other than physical are passed on by mouth through family, friends, and acquaintances describing their experiences and opinions about the routes that they had taken on their own personal journey. A journey is made up of one overall map and various smaller maps, telling of the alternate routes that are available. It is upon one what route one chooses to continue to reach one’s destination, but life as all knows has no destination, the journey completes only when one finds death but ironically it’s the beginning of a new journey in itself.
Saturday, August 8, 2009
Thursday, July 23, 2009
Managing IRR and Price Risk of Fixed Income Assets By IRF
Interest rate risk:
Investments in Fixed Asset like bonds are risky only because of the volatility of its price which can lead to unexpected capital profits or losses. The risk of this assets are valued on the volatility of the return that these securities provide which is achieved on two fronts:
1) The fixed return that is being provided on the basis of the coupon
2) The return earned on change of its price
The former is fixed on the basis of coupon decided and that the maturity value is also predetermined there lies no risk, but the later has got huge amount of risk involved as it is inversely proportional to the interest rates prevalent in the markets.
Thus if the interest rates rises the price of the bond will fall, but if reverse is the case the price of the bond will rise.
This makes it clear that the volatility in the prices of a fixed income asset is the because of the interest rate volatility and such volatility is termed as ‘Interest Rate Risk’. The Sensitivity of the Fixed Income Assets prices to the interest rates overall depends on the maturity of the asset. The longer the maturity the larger is the amount of volatility or change observed.
How to manage this risk?
Investors and business manages their risk by first choosing the amount of risk to which they want to get exposed to. This choice depends on their risk taking ability, some might be aggressive risk taker, some might be risk aversive, and depending on this they try to manage their risk.
Traditionally investors found it difficult to manage their risk in fixed income assets; Investors in bonds could reduce their risk only by selling some of their holding and by buying short term money market instruments. Financial institutions that got exposed to such were only able to restructure their balance sheet to reduce the mismatch between the maturities of their assets and liabilities.
But, now in recent years there are some financial instruments developed such as Interest rates Futures, Options on Interest Rates Futures and Interest rates Swaps that allowed investors of fixed assets to manage interest rate Risks. Thus now in order to manage the risk of Fixed Income Assets the investors can but the financial instruments in such a manner that the changes in the prices of the assets gets offsets with such instruments.
Interest Rate Futures:
An Interest Rate Future is an agreement between two parties to buy or sell a fixed income asset, Such as a T-bill or T-Bond at a given time in future at a pre-determined price.
Thus For Eg:
A person in January has agreed to But a T-bond Future, he has agreed to buy a T-bond of March, and if a person has agreed to Sell a T-Bond Future, then it means that the person will sell T-Bond in March. The Price of the futures contract is the price buyer agrees to pay to the seller for the asset.
Example of IRF:
On January 1, the notional 10-year bond (From ZCYC) was Rs. 45.43, One Believes the long rate will go up, and so one should Short 3 future contract at Rs. 49. Now if on January 31st the notional 10 Year bond is at Rs. 39, then one makes profit of Rs. 10 per bond.
Example of IRF:
On Jan, if the notional 10 Year notional bond was trading at Rs. 32, and Futures were at @ Rs. 33, with an intuition that the interest rates would go down one makes purchase of Futures @ Rs. 33and if the interest rates went up then one may make loss.
Hedging With IRF
Duration:
One Should Make A Weighted Average of all ti, where the weight for cash flow i, is proportional to its importance in the Net Present Value of the bond.
Weighted of cash flow:
Wi =
Duration
Hedging one’s Portfolio:
If one had portfolio of 10 year ZC bond and wanted to protect then one will short a 10 year futures.
In general one’s portfolio should have duration D, which is not 10.
If one has Duration of 10 then one must calculate how many rupees one would lose for a 1bps rise in the interest yield curve and then one should find a future position that can closely offset the loss.
For Example:
If one has Rs. 100 Lacs with duration of 11 years, then every rise in one bps in the yield curve will lead to a loss of Rs. 11 thousand.
Then one should look for a future position that can gain 11000 if the yield curve moves up by 1 bp
Therefore I must Take Short on Rs. 110 Lacs of the Futures.
But this is just s simple approach where one has captured the parallel shift in the yield curve, as the yield curve keeps on moving and fluctuating one must recompute whether one has made a proper hedge or not.
Different types of Assetes are hedged differently:
Hedging of a T-Bond Portfolio:
T-bond prices fall when Interest Rates rises, so a investor would hedge by selling Interest Rates Futures.
Hedging Corporate Bond:
Corporate bond Prices Fall with the increase in Interest rates and hence an investor of corporate bond would sell IRF to manage his risk. An investor might use T-Bond to hedge against a corporate bond.
Depository Institution:
Depository Institution like banks would Hedge their net worth against the changes in Interest
Securities Dealer:
Security Dealers Hedge IRR by selling IRF sometimes and buying them other times. Security dealers might sell the bonds in their inventory against the changes in interest rates like any other bond holder to hedge their risk. On the other hand they might buy IRF in order to meet their commitments to deliver at a future date at a pre-determined price against changes in interest rates.
Mortgage Banks:
The value of mortgage commitments fall with the increase in interest rates mortgage bankers would sell interest rates futures in order to hedge their position.
Life Insurance Companies:
Life Insurance Companies would hedge their GIC commitments against the changes in interest rates by buying interest rates futures.
Rates by selling IRF because their net worth generally falls with the increase in Interest Rates.
Interest Rate Futures are Considered Good Hedging Tools:
There are two reasons that substantiate the point of IRF as good hedging tools:
1) The transaction costs of buying and selling them are relatively low.
2) IRF Prices are closely related to the prices of many fixed income assets when Interest Rates Change.
Risk In Hedging With IRF:
Basis Risk:
The risk that remains after the hedging is done is called the Basis or residual risk. The Hedging made does not perfectly offsets the changes in prices, there are lot many factors affecting the prices of the assets other than interest rates and therefore the basis risk will be much higher if the change is prices is more due to other factors other than interest rates.
Credit Risk:
The risk exposed when the opposite party in the asset that is being hedged defaults is called Credit Risk. Note that it is not the risk Exposed due to the opposite party in the futures default, as there are clearing houses that takes care of this risk.
Marking to Market Risk:
It is the risk that the investor has to cover future losses when the contract is marked to market at the end of each day. Though the losses are usually offset by the gains of the hedge those gains are not received immediately and therefore the investor has clear and make immediate cash outlay for the loss he has made in having a long position on asset.
Conclusion:
Thus with this one can conclude that IRF can be used as an effective tool to offset the risk exposed due to interest rates changes that has its impact on fixed income assets. One has to keep a note of all the other risks coming along with the hedge and if managed properly the tool can help them to offset all the losses.
Original: Written By Nainish Jhaveri.
Investments in Fixed Asset like bonds are risky only because of the volatility of its price which can lead to unexpected capital profits or losses. The risk of this assets are valued on the volatility of the return that these securities provide which is achieved on two fronts:
1) The fixed return that is being provided on the basis of the coupon
2) The return earned on change of its price
The former is fixed on the basis of coupon decided and that the maturity value is also predetermined there lies no risk, but the later has got huge amount of risk involved as it is inversely proportional to the interest rates prevalent in the markets.
Thus if the interest rates rises the price of the bond will fall, but if reverse is the case the price of the bond will rise.
This makes it clear that the volatility in the prices of a fixed income asset is the because of the interest rate volatility and such volatility is termed as ‘Interest Rate Risk’. The Sensitivity of the Fixed Income Assets prices to the interest rates overall depends on the maturity of the asset. The longer the maturity the larger is the amount of volatility or change observed.
How to manage this risk?
Investors and business manages their risk by first choosing the amount of risk to which they want to get exposed to. This choice depends on their risk taking ability, some might be aggressive risk taker, some might be risk aversive, and depending on this they try to manage their risk.
Traditionally investors found it difficult to manage their risk in fixed income assets; Investors in bonds could reduce their risk only by selling some of their holding and by buying short term money market instruments. Financial institutions that got exposed to such were only able to restructure their balance sheet to reduce the mismatch between the maturities of their assets and liabilities.
But, now in recent years there are some financial instruments developed such as Interest rates Futures, Options on Interest Rates Futures and Interest rates Swaps that allowed investors of fixed assets to manage interest rate Risks. Thus now in order to manage the risk of Fixed Income Assets the investors can but the financial instruments in such a manner that the changes in the prices of the assets gets offsets with such instruments.
Interest Rate Futures:
An Interest Rate Future is an agreement between two parties to buy or sell a fixed income asset, Such as a T-bill or T-Bond at a given time in future at a pre-determined price.
Thus For Eg:
A person in January has agreed to But a T-bond Future, he has agreed to buy a T-bond of March, and if a person has agreed to Sell a T-Bond Future, then it means that the person will sell T-Bond in March. The Price of the futures contract is the price buyer agrees to pay to the seller for the asset.
Example of IRF:
On January 1, the notional 10-year bond (From ZCYC) was Rs. 45.43, One Believes the long rate will go up, and so one should Short 3 future contract at Rs. 49. Now if on January 31st the notional 10 Year bond is at Rs. 39, then one makes profit of Rs. 10 per bond.
Example of IRF:
On Jan, if the notional 10 Year notional bond was trading at Rs. 32, and Futures were at @ Rs. 33, with an intuition that the interest rates would go down one makes purchase of Futures @ Rs. 33and if the interest rates went up then one may make loss.
Hedging With IRF
Duration:
One Should Make A Weighted Average of all ti, where the weight for cash flow i, is proportional to its importance in the Net Present Value of the bond.
Weighted of cash flow:
Wi =
Duration
Hedging one’s Portfolio:
If one had portfolio of 10 year ZC bond and wanted to protect then one will short a 10 year futures.
In general one’s portfolio should have duration D, which is not 10.
If one has Duration of 10 then one must calculate how many rupees one would lose for a 1bps rise in the interest yield curve and then one should find a future position that can closely offset the loss.
For Example:
If one has Rs. 100 Lacs with duration of 11 years, then every rise in one bps in the yield curve will lead to a loss of Rs. 11 thousand.
Then one should look for a future position that can gain 11000 if the yield curve moves up by 1 bp
Therefore I must Take Short on Rs. 110 Lacs of the Futures.
But this is just s simple approach where one has captured the parallel shift in the yield curve, as the yield curve keeps on moving and fluctuating one must recompute whether one has made a proper hedge or not.
Different types of Assetes are hedged differently:
Hedging of a T-Bond Portfolio:
T-bond prices fall when Interest Rates rises, so a investor would hedge by selling Interest Rates Futures.
Hedging Corporate Bond:
Corporate bond Prices Fall with the increase in Interest rates and hence an investor of corporate bond would sell IRF to manage his risk. An investor might use T-Bond to hedge against a corporate bond.
Depository Institution:
Depository Institution like banks would Hedge their net worth against the changes in Interest
Securities Dealer:
Security Dealers Hedge IRR by selling IRF sometimes and buying them other times. Security dealers might sell the bonds in their inventory against the changes in interest rates like any other bond holder to hedge their risk. On the other hand they might buy IRF in order to meet their commitments to deliver at a future date at a pre-determined price against changes in interest rates.
Mortgage Banks:
The value of mortgage commitments fall with the increase in interest rates mortgage bankers would sell interest rates futures in order to hedge their position.
Life Insurance Companies:
Life Insurance Companies would hedge their GIC commitments against the changes in interest rates by buying interest rates futures.
Rates by selling IRF because their net worth generally falls with the increase in Interest Rates.
Interest Rate Futures are Considered Good Hedging Tools:
There are two reasons that substantiate the point of IRF as good hedging tools:
1) The transaction costs of buying and selling them are relatively low.
2) IRF Prices are closely related to the prices of many fixed income assets when Interest Rates Change.
Risk In Hedging With IRF:
Basis Risk:
The risk that remains after the hedging is done is called the Basis or residual risk. The Hedging made does not perfectly offsets the changes in prices, there are lot many factors affecting the prices of the assets other than interest rates and therefore the basis risk will be much higher if the change is prices is more due to other factors other than interest rates.
Credit Risk:
The risk exposed when the opposite party in the asset that is being hedged defaults is called Credit Risk. Note that it is not the risk Exposed due to the opposite party in the futures default, as there are clearing houses that takes care of this risk.
Marking to Market Risk:
It is the risk that the investor has to cover future losses when the contract is marked to market at the end of each day. Though the losses are usually offset by the gains of the hedge those gains are not received immediately and therefore the investor has clear and make immediate cash outlay for the loss he has made in having a long position on asset.
Conclusion:
Thus with this one can conclude that IRF can be used as an effective tool to offset the risk exposed due to interest rates changes that has its impact on fixed income assets. One has to keep a note of all the other risks coming along with the hedge and if managed properly the tool can help them to offset all the losses.
Original: Written By Nainish Jhaveri.
Wednesday, April 8, 2009
My Life My way
In this world of death and pain
the memory remains,
the dragon that can't be slain
I live life like a warrior
taking control of everything and everyone
who stands in front of me weakly
unafraid to stand my ground
I don't fuck around
get in my face and I'll knock you down
pound for pound the undisputed king
of these street
I never ran taking shit from no man
I've fought em all, win or lose, do or die
I'll never give up till I'm asleep in the sky
No one can stop me from living my life my way
my beliefs are all I've got and I'll
take them to my grave
Don't try and help me, just stay the fuck outta my way
I live for myself and I'll die by what I say
I'll fight to the death for friends and family
defend their hon or till there's nothing left of me
like it or not, you can never forget me
unafraid to show this world
how it should be
it's my life, my way motherfucker
fuck with me you gonna pay motherfucker
i swear to God I'll never stop
fightin for the top until I fuckin drop
No one can stop me from living my life my way
my beliefs are all I've got and I'll
take them to my grave
Don't try and help me, just stay the fuck outta my way
I live for myself and I'll die by what I say
My life's been nothing but a struggle
since the day I opened my eyes
and now I've gotta fight so hard just to get ahead
provide and survive
everyday I smash through the lies that
are twisting me around
this life we live is slipping away but
I'll never let you down
cause my days maybe numbered, but
I'll never let you forget
who I was and what I stood for
A life with no regrets...
A life with no regrets...
No one can stop me from living my life my way
my beliefs are all I've got and I'll
take them to my grave
Don't try and help me, just stay the fuck outta my way
I live for myself and I'll die by what I say
Biohazard : My Life My Way Lyrics
the memory remains,
the dragon that can't be slain
I live life like a warrior
taking control of everything and everyone
who stands in front of me weakly
unafraid to stand my ground
I don't fuck around
get in my face and I'll knock you down
pound for pound the undisputed king
of these street
I never ran taking shit from no man
I've fought em all, win or lose, do or die
I'll never give up till I'm asleep in the sky
No one can stop me from living my life my way
my beliefs are all I've got and I'll
take them to my grave
Don't try and help me, just stay the fuck outta my way
I live for myself and I'll die by what I say
I'll fight to the death for friends and family
defend their hon or till there's nothing left of me
like it or not, you can never forget me
unafraid to show this world
how it should be
it's my life, my way motherfucker
fuck with me you gonna pay motherfucker
i swear to God I'll never stop
fightin for the top until I fuckin drop
No one can stop me from living my life my way
my beliefs are all I've got and I'll
take them to my grave
Don't try and help me, just stay the fuck outta my way
I live for myself and I'll die by what I say
My life's been nothing but a struggle
since the day I opened my eyes
and now I've gotta fight so hard just to get ahead
provide and survive
everyday I smash through the lies that
are twisting me around
this life we live is slipping away but
I'll never let you down
cause my days maybe numbered, but
I'll never let you forget
who I was and what I stood for
A life with no regrets...
A life with no regrets...
No one can stop me from living my life my way
my beliefs are all I've got and I'll
take them to my grave
Don't try and help me, just stay the fuck outta my way
I live for myself and I'll die by what I say
Biohazard : My Life My Way Lyrics
Wednesday, December 31, 2008
Consumer Market: Scaling New Heights
Scaling New Heights
With rapid socio-economic changes taking place in India, the country is witnessing the creation of many new markets and a further expansion of the existing ones. With above 300 million people moving up from the category of rural poor to rural lower middle class between 2005 and 2025, rural consumption levels are expected to rise to current urban levels by 2017. Such developments in India’s markets are expected to create major opportunities for Indian companies and MNCs alike and further fuel consumer demand in India.
According to a study by the McKinsey Global Institute (MGI), Indian incomes are likely to grow three-fold over the next two decades and India will become the world's fifth-largest consumer market by 2025, moving up from its position in 2007 as the 12th-largest consumer market. Further, according to data released by Visa, (the world's largest retail electronic payments network), annual commercial spending in India was estimated at US$ 2.3 trillion in 2007, an increase of 23 per cent from 2006. According to Visa's Commercial Consumption Expenditure (CCE) index, India was ranked in terms of the size of total business and government expenditure as the fourth fastest growing market in the Asia Pacific (APAC) region.
In spite of the rising inflation and fears about a slowdown, consumer demand in India is still upbeat. In an analysis (carried out by Economic Times) of the top 50 consumer goods and services firms, it was seen that the June quarter saw a sales growth of 24 per cent (year-on-year) compared to last year. The firms included in the analysis were from sectors like automobiles, textiles, fast moving consumer goods (FMCG), consumer durables, liquor, airlines, telecom services, footwear, and retail among others. Sales of daily consumption items went up by 5-10 per cent and the FMCG business increased by 18.8 per cent, while the consumer durable segment also recorded strong volume growth in the second quarter of the 2008-09 fiscal.
Moreover, approximately 315 hypermarkets are expected to come into existence in Tier-I and Tier-II cities across India by the end of 2011, riding on the boom in organised retail sector, says a joint study by consultancy firm KPMG and industry body, ASSOCHAM. The study states that 212 Indian towns are capable of sustaining the development of such hypermarkets in 2008.
FMCG
The FMCG sector has been registering double-digit growth in sales since the last couple of years. Currently, with annual revenues of US$ 14. 74 billion, it is the one of the most promising sectors.
Interestingly, the FMCG sector is witnessing rapid growth in rural areas and is estimated to grow by 40 per cent compared to the growth of 25 per cent in urban areas. Companies like ITC, Godrej Agrovet, DCM Shriram among others are growing rapidly in rural areas and in fact they may outdo their urban counterparts like Reliance Fresh and the Future Group-owned Food Bazaar chain.
Tremendous growth is being recorded by the value added and aspirational products. These products are estimated to propel the FMCG industry to grow by 16 per cent (in sales) during 2008-09, compared to 14.5 per cent during 2007-08.
Another promising trend is the growth of ‘out-of-home consumption’, which is emerging as a new section in the FMCG sector. With changing lifestyles, the concept of three core meals fast vanishing, companies like Coke, ITC, and Dabur are venturing into this market and are bringing out new product packaging for the segment.
The segment is likely to see a lot of fresh investment in the days to come. PepsiCo has announced a US$ 500 million investment in India over the next three years. Having already invested US$ 700 million in the country, the new investment would push the company’s investments above the US$ 1 billion mark. PepsiCo is also working on developing a nutritious product targeted at young women.
Significantly, several Indian FMCG companies have also been aggressively exploring global markets through both acquisitions and alliances. In the past three years, they have acquired about 15 companies and have spread their presence in more than a dozen countries.
Luxury Products
With the rapidly increasing number of millionaires in India, the market for luxury brands is growing annually at a compound average growth rate (CAGR) of about 35 per cent.
According to a FICCI-Yes Bank report, India is set to become a manufacturing hub for global luxury brands over the next four to five years. The report stated that with the core strengths in India's manufacturing sector, the manufacture of luxury items in India can grow to US$ 500 million. The luxury products market in India was estimated in excess of US$ 500 million and is likely to grow at a CAGR of 28 per cent to reach US$ 1.2 billion by 2010. The market is expected to double by 2015, touching US$ 2.5 billion.
Global brands like Louis Vuitton and Frette are planning to set up their manufacturing base in India. In the luxury automobile segment, BMW has also seen a good run in 2008, having revised their sales target for the year to 2,800 cars from 2,000. Audi registered a 123 per cent rise in sales in the first quarter of 2008, while Mercedes-Benz has set a target of 3,000 cars for 2008.
Industry experts believe that the top-end consumer electronics segment in India is growing by 8-10 per cent annually.
Consumer Durables
A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing have been instrumental in changing the pattern and amount of consumer expenditure leading to robust growth of consumer durables industry.
According to a snap poll carried out by the Confederation of Indian Industry (CII), 92 per cent the CEOs surveyed were expecting sales to increase by 10 per cent during the current financial year
According to ORG-GfK data, the combined size of five big-ticket product categories-colour television, refrigerators, washing machines, air conditioners and microwave oven-rose from US$ 4.1 billion in 2006 to US$ 5.1 billion in 2007.
The higher growth in the sales value compared to volume growth rates can be explained by the surge in the sales of high-end consumer durable goods. Products like split air-conditioners (60 per cent), frost-free refrigerators (54 per cent), fully automatic washing machines (35 per cent), microwave ovens (35 per cent), high-end flat panel TV (100 per cent) recorded impressive growth rates in 2007-08.
Despite the global slowdown, Indian consumer goods companies have decided to augment manpower, and also increase their research and development (R&D) expenditure. LG Electronics plans to invest US$ 50 million to increase its manpower and R&D in India by 2009, whereas Samsung plans double its R&D team in India to 4,000 by 2010. According to ITC's sustainability report, ITC's payroll spend increased from US$ 110.52 million in fiscal year 2006 to US$ 149. 75 million in fiscal year 2008 and the company remains upbeat on hiring.
Consumer Electronics
According to the Consumer Electronics Association, the global consumer electronics revenue is estimated to grow by nearly 10 per cent in 2008 to reach US$ 700 billion.
In fact the rapidly growing consumer electronics market in India has spurred many leading manufacturers of the world to get into partnerships with local companies to set up shop in the country. Companies planning to enter India include Japanese testing firm Saki, Hong Kong’s surface mount technology (SMT) company WKK, Singapore’s Mydata (SMT) and USA’s Indium (solder paste).
iSuppli, an electronics market research firm, has projected that the Indian audio/video consumer electronics industry will grow to US$ 6.59 billion by 2011, growing at a compound annual growth rate CAGR of around 10 per cent.
E-commerce
Thanks to the broadband revolution, an increasing number of Indians are spending more on the web.
According to the Telecom Regulatory Authority of India, Broadband Internet connections touched 4.73 million at the end of August 2008. The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping.
According to a global online survey by A C Nielsen, a staggering 78 per cent of Indians (who access internet) make purchases online, with credit cards being the preferred mode of payment. In fact, Indians have emerged as the third biggest credit card users globally for online purchases.
A new niche segment has emerged in this sector-on-demand personalisation of products. Online start-ups like Myntra, Dilsebol and Pringoo are some of the first movers in this area, which provide products, which are customised according to the client’s demand.
Automobiles
The Indian auto industry has grown at a CAGR of 14 per cent over the last five years with domestic sales of vehicles touching around 10.1 million vehicles in 2006-07. During April 2008, sales rose by more than 17 per cent in the car segment, while sales in the utility vehicle segment rose by 31 per cent, compared to the corresponding month last year. Presently, India is the second largest two-wheeler market in the world, the fourth largest commercial vehicle market, the 11th largest passenger car market and is expected to be the third largest automobile market by 2030.
Maruti Suzuki, India’s leading automaker registered a 20 per cent net sales growth for the June 2008 quarter and it also posted 12 per cent growth in volume terms. Even Hero Honda registered double digit growth in its volume shipment.
Consumer Confidence
The Indian consumer remains one of the most upbeat globally. According to the AC Nielson Consumer Confidence and Opinion Survey, India is placed second in the 51-nation global survey. Also Indians are the most optimistic people regarding their personal finances (79 per cent) and second most optimistic people with respect to job prospects (86 per cent)-which opens attractive avenues for industries planning to tap the Indian consumer market.
Furthermore, Indian consumers are also more becoming more aware about the finer nuances of nutritional panels and labels. According to the study, around 59 per cent Indians said that they noticed packaged goods' labels containing nutritional information. With 59 per cent, India tops in the Asia-Pacific region in its understanding of nutritional labels. The Nielsen global online consumer survey was carried out by Nielsen in April 2008, in 51 markets from Europe, Asia-Pacific, North America and West Asia.
Copyright © 2004-2008 India Brand Equity Foundation
With rapid socio-economic changes taking place in India, the country is witnessing the creation of many new markets and a further expansion of the existing ones. With above 300 million people moving up from the category of rural poor to rural lower middle class between 2005 and 2025, rural consumption levels are expected to rise to current urban levels by 2017. Such developments in India’s markets are expected to create major opportunities for Indian companies and MNCs alike and further fuel consumer demand in India.
According to a study by the McKinsey Global Institute (MGI), Indian incomes are likely to grow three-fold over the next two decades and India will become the world's fifth-largest consumer market by 2025, moving up from its position in 2007 as the 12th-largest consumer market. Further, according to data released by Visa, (the world's largest retail electronic payments network), annual commercial spending in India was estimated at US$ 2.3 trillion in 2007, an increase of 23 per cent from 2006. According to Visa's Commercial Consumption Expenditure (CCE) index, India was ranked in terms of the size of total business and government expenditure as the fourth fastest growing market in the Asia Pacific (APAC) region.
In spite of the rising inflation and fears about a slowdown, consumer demand in India is still upbeat. In an analysis (carried out by Economic Times) of the top 50 consumer goods and services firms, it was seen that the June quarter saw a sales growth of 24 per cent (year-on-year) compared to last year. The firms included in the analysis were from sectors like automobiles, textiles, fast moving consumer goods (FMCG), consumer durables, liquor, airlines, telecom services, footwear, and retail among others. Sales of daily consumption items went up by 5-10 per cent and the FMCG business increased by 18.8 per cent, while the consumer durable segment also recorded strong volume growth in the second quarter of the 2008-09 fiscal.
Moreover, approximately 315 hypermarkets are expected to come into existence in Tier-I and Tier-II cities across India by the end of 2011, riding on the boom in organised retail sector, says a joint study by consultancy firm KPMG and industry body, ASSOCHAM. The study states that 212 Indian towns are capable of sustaining the development of such hypermarkets in 2008.
FMCG
The FMCG sector has been registering double-digit growth in sales since the last couple of years. Currently, with annual revenues of US$ 14. 74 billion, it is the one of the most promising sectors.
Interestingly, the FMCG sector is witnessing rapid growth in rural areas and is estimated to grow by 40 per cent compared to the growth of 25 per cent in urban areas. Companies like ITC, Godrej Agrovet, DCM Shriram among others are growing rapidly in rural areas and in fact they may outdo their urban counterparts like Reliance Fresh and the Future Group-owned Food Bazaar chain.
Tremendous growth is being recorded by the value added and aspirational products. These products are estimated to propel the FMCG industry to grow by 16 per cent (in sales) during 2008-09, compared to 14.5 per cent during 2007-08.
Another promising trend is the growth of ‘out-of-home consumption’, which is emerging as a new section in the FMCG sector. With changing lifestyles, the concept of three core meals fast vanishing, companies like Coke, ITC, and Dabur are venturing into this market and are bringing out new product packaging for the segment.
The segment is likely to see a lot of fresh investment in the days to come. PepsiCo has announced a US$ 500 million investment in India over the next three years. Having already invested US$ 700 million in the country, the new investment would push the company’s investments above the US$ 1 billion mark. PepsiCo is also working on developing a nutritious product targeted at young women.
Significantly, several Indian FMCG companies have also been aggressively exploring global markets through both acquisitions and alliances. In the past three years, they have acquired about 15 companies and have spread their presence in more than a dozen countries.
Luxury Products
With the rapidly increasing number of millionaires in India, the market for luxury brands is growing annually at a compound average growth rate (CAGR) of about 35 per cent.
According to a FICCI-Yes Bank report, India is set to become a manufacturing hub for global luxury brands over the next four to five years. The report stated that with the core strengths in India's manufacturing sector, the manufacture of luxury items in India can grow to US$ 500 million. The luxury products market in India was estimated in excess of US$ 500 million and is likely to grow at a CAGR of 28 per cent to reach US$ 1.2 billion by 2010. The market is expected to double by 2015, touching US$ 2.5 billion.
Global brands like Louis Vuitton and Frette are planning to set up their manufacturing base in India. In the luxury automobile segment, BMW has also seen a good run in 2008, having revised their sales target for the year to 2,800 cars from 2,000. Audi registered a 123 per cent rise in sales in the first quarter of 2008, while Mercedes-Benz has set a target of 3,000 cars for 2008.
Industry experts believe that the top-end consumer electronics segment in India is growing by 8-10 per cent annually.
Consumer Durables
A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing have been instrumental in changing the pattern and amount of consumer expenditure leading to robust growth of consumer durables industry.
According to a snap poll carried out by the Confederation of Indian Industry (CII), 92 per cent the CEOs surveyed were expecting sales to increase by 10 per cent during the current financial year
According to ORG-GfK data, the combined size of five big-ticket product categories-colour television, refrigerators, washing machines, air conditioners and microwave oven-rose from US$ 4.1 billion in 2006 to US$ 5.1 billion in 2007.
The higher growth in the sales value compared to volume growth rates can be explained by the surge in the sales of high-end consumer durable goods. Products like split air-conditioners (60 per cent), frost-free refrigerators (54 per cent), fully automatic washing machines (35 per cent), microwave ovens (35 per cent), high-end flat panel TV (100 per cent) recorded impressive growth rates in 2007-08.
Despite the global slowdown, Indian consumer goods companies have decided to augment manpower, and also increase their research and development (R&D) expenditure. LG Electronics plans to invest US$ 50 million to increase its manpower and R&D in India by 2009, whereas Samsung plans double its R&D team in India to 4,000 by 2010. According to ITC's sustainability report, ITC's payroll spend increased from US$ 110.52 million in fiscal year 2006 to US$ 149. 75 million in fiscal year 2008 and the company remains upbeat on hiring.
Consumer Electronics
According to the Consumer Electronics Association, the global consumer electronics revenue is estimated to grow by nearly 10 per cent in 2008 to reach US$ 700 billion.
In fact the rapidly growing consumer electronics market in India has spurred many leading manufacturers of the world to get into partnerships with local companies to set up shop in the country. Companies planning to enter India include Japanese testing firm Saki, Hong Kong’s surface mount technology (SMT) company WKK, Singapore’s Mydata (SMT) and USA’s Indium (solder paste).
iSuppli, an electronics market research firm, has projected that the Indian audio/video consumer electronics industry will grow to US$ 6.59 billion by 2011, growing at a compound annual growth rate CAGR of around 10 per cent.
E-commerce
Thanks to the broadband revolution, an increasing number of Indians are spending more on the web.
According to the Telecom Regulatory Authority of India, Broadband Internet connections touched 4.73 million at the end of August 2008. The increase in the PC and internet penetration along with the growing preference of Indian consumers to shop online has given a tremendous boost to e-tailing-the online version of retail shopping.
According to a global online survey by A C Nielsen, a staggering 78 per cent of Indians (who access internet) make purchases online, with credit cards being the preferred mode of payment. In fact, Indians have emerged as the third biggest credit card users globally for online purchases.
A new niche segment has emerged in this sector-on-demand personalisation of products. Online start-ups like Myntra, Dilsebol and Pringoo are some of the first movers in this area, which provide products, which are customised according to the client’s demand.
Automobiles
The Indian auto industry has grown at a CAGR of 14 per cent over the last five years with domestic sales of vehicles touching around 10.1 million vehicles in 2006-07. During April 2008, sales rose by more than 17 per cent in the car segment, while sales in the utility vehicle segment rose by 31 per cent, compared to the corresponding month last year. Presently, India is the second largest two-wheeler market in the world, the fourth largest commercial vehicle market, the 11th largest passenger car market and is expected to be the third largest automobile market by 2030.
Maruti Suzuki, India’s leading automaker registered a 20 per cent net sales growth for the June 2008 quarter and it also posted 12 per cent growth in volume terms. Even Hero Honda registered double digit growth in its volume shipment.
Consumer Confidence
The Indian consumer remains one of the most upbeat globally. According to the AC Nielson Consumer Confidence and Opinion Survey, India is placed second in the 51-nation global survey. Also Indians are the most optimistic people regarding their personal finances (79 per cent) and second most optimistic people with respect to job prospects (86 per cent)-which opens attractive avenues for industries planning to tap the Indian consumer market.
Furthermore, Indian consumers are also more becoming more aware about the finer nuances of nutritional panels and labels. According to the study, around 59 per cent Indians said that they noticed packaged goods' labels containing nutritional information. With 59 per cent, India tops in the Asia-Pacific region in its understanding of nutritional labels. The Nielsen global online consumer survey was carried out by Nielsen in April 2008, in 51 markets from Europe, Asia-Pacific, North America and West Asia.
Copyright © 2004-2008 India Brand Equity Foundation
Friday, December 5, 2008
Not Above Us All
Public anger — against the perceived ineptitude, pettiness, and failure of our political class — brimmed over when Mumbai was savagely attacked last week. The outpouring of angry messages and public demonstrations suggest that the citizens of this country might finally be fed up of just picking up the pieces and moving on, till the next bout of terrorist brutality rips apart their homes and lives all over again. The vociferous demands for accountability being made by citizens from the political class are understandable, given the circumstances.
The attacks only ignited a long-simmering resentment among the citizenry about the deportment of its elected representatives and public officials. It is the attitude of the ruling class — bureaucracy and judiciary included — that gets to our people. The attitude that somehow — by virtue of being elected to Parliament, promoted to the top of the bureaucratic heap or elevated to the highest benches of the judiciary — they are above the rest. It betrays a colonial hangover and has no place in a democratic republic.
The power play manifests itself most visibly in the security arrangements provided to the so-called VIPs. An unjustifiable number of people are designated as VIPs and VVIPs in this country, and are provided with an army of security personnel to protect them round the clock. For instance, in Delhi alone, about 14,000 police personnel are assigned to VIP duty, apart from special security forces like the National Security Guard (NSG) and Special Protection Group (SPG). The problem is acute in Delhi because it is the national capital, but this is a pan-Indian phenomenon. This, when police forces in many states are understaffed.
Precious resources — of men and money — are spent on protecting those who face no reasonable threat, at the cost of stretching out security apparatus, putting the nation’s safety at risk. For instance, the ‘rangers’ arm of the NSG is mainly devoted to VIP duty. Our elite forces must have a single brief so that their efficiency is maximised. Instead, we have a ludicrous situation where ex-PMs and other no-so-vulnerable individuals — for instance, Amar Singh and Murli Manohar Joshi — are protected by the NSG. There are a few public officials — like the PM, president, home and defence ministers and the chief justice — who need solid security cover. The rest must promptly be stripped of their VIP status and accompanying security paraphernalia. If their safety is at stake, let them — not the taxpayers — pick up the tab.
TIMES OF INDIA
5th DEc, 2008
Case for a bold fiscal stimulus
IT HAS now become clear that Indian economic growth has slowed down considerably in the current year after recording a robust rate of nearly 9% average over the past five years. While the global financial crisis, the most severe since the 1930s, has done much of the damage, the growth momentum was also affected adversely in first half of 2008-09 by the tight money policy of the RBI to contain inflation.
Growth is flagging in many sectors especially the labour-intensive, export-oriented ones. With exports shrinking, vulnerable sectors such as SMEs (like those making handicrafts or apparel) feeding export markets are finding it hard to survive. Larger companies are cutting production and postponing capital investments, in turn adversely affecting the jobs. The stock markets have crashed because of foreign institutional investors (FIIs) pulling out from India, which has also exerted pressure on the rupee. It has become difficult for enterprises to raise capital in India and in international markets.
Although the Indian economy may still manage to grow at 7%, one has to be prepared for further downside risks associated with deepening of recession in the west. The IMF is projecting the G-3 economies, viz., the US, EU and Japan, will actually be shrinking in the next few quarters. Hence, emerging economies like India will have to look inwards for the growth stimuli.
The policy response of the government has so far been limited to easing liquidity by reducing CRR and repo rates. A Rs 50,000 crore fund is also being contemplated to lend to infrastructure projects. Some more initiatives to subsidise home loans and provide incentives to exporters of labour-intensive goods, among others, are under consideration. While all these steps are in the right direction and should be expeditiously taken, there is need for propping up the growth momentum.
What is needed is a fiscal stimulus of the order of $50 billion (or roughly Rs 250,000 crore). Such a package of additional spending over the next twelve months will go a long way in reviving the demand and restoring the growth sentiment. The package should target the weaker sections of society to make the growth process more inclusive by paying special emphasis, for instance, on the development of rural infrastructure — rural roads and housing, primary and secondary education, health and sanitation — which would have high pay-offs in terms of growth and inclusiveness while having low import content.
A part of the package could be an adjustment fund for assisting the affected SMEs and workers. The expansion of NREG schemes could be another priority. Spread over two financial years, viz., 2008-09 and 2009-10, in a ratio of 40% and 60%, this package would entail stimulus of $20 billion and $30 billion respectively (i.e., 2-3% of GDP) in the two years and could be monetised rather than funded by public borrowings. The public investments tend to crowd in private investments and foster growth. Hence, the package may expedite the revival of the economy.
Sceptics would be concerned about the effects of such a package on fiscal balance and hence on inflation, keeping in mind the already stretched fiscal deficit in the current year after including off-budget expenditure. There are two redeeming features to these concerns. Firstly, the more than 50% decline in crude oil prices in international markets since the onset of the crisis has provided the much-needed fiscal space to the government by reducing the cost of oil and fertiliser subsidies. Secondly, there is little risk of inflationary expectations in the present scenario of declining demand and depression around the world. The commodity prices have already come down by more than 50% on the back of poor demand.
The policy response in different countries has included large fiscal stimulus packages ranging from the government distributing vouchers for promoting spending as in Japan to an ambitious $580-billion fiscal stimulus package announced by China.
Another lesson that needs to be learnt from the trends of the past year includes the need for moderation of FII inflows. Volatility of FII inflows over the past year has caused wide variations in the exchange rate of rupee creating hardships for exporters besides bringing wild fluctuations in the stock market indices. These flows are also very expensive in terms of their servicing burden vis-àvis other capital flows such as FDI, NRI deposits and external commercial borrowings.
To sum up, the time has come for taking bold steps to revive the growth momentum of the economy in the wake of the worst crisis of the world economy. India should seize the moment before it is too late, to inject a stimulus by building an all-party consensus in national interest while enhancing the inclusiveness of the growth process.
ET: 5th Dec, 2008
Monday, November 17, 2008
SEZs and rational expectations
The debate on the losses or gains in revenue due to the special economic zone (SEZ) policy is tantamount to missing the wood for the trees. In any event, the debate on numbers is by itself subject to assumption-based opinions across a spectrum of economists, who may not always agree. Besides, it is too early to generate data to enable anyone to speak with conviction. Let us not fall into the trap of numbers, but look at the larger picture. The fact remains that nobody has ever questioned the merits of SEZs or its economic potential. And there is a broad political consensus in the country that the SEZ policy is here to stay for good.
Cuts, too, has done a study recently for the ministry of commerce, but we did not toe their line blindly. We undertook an extensive field survey to see what is happening on the ground. Fourteen SEZs across the country were visited to look into the larger impact (both upstream and downstream) of the functioning of SEZs. We found that SEZs, in addition to export and investment growth, have had a very profound impact on the surroundings, signalling a positive trend, and a significant change in the mindset of the local people.
The new generation SEZs, such as at Chennai, Sriperumbudur, Hassan, Bangalore, Manikanchan etcetera, have created a tremendous local area impact in terms of direct employment, formal and informal activities, consumption pattern and social life in and around SEZs. They are creating jobs for a large number of semi-skilled workers. Wage rates are rising and are higher in SEZs than those outside.
The HSL SEZ at Hassan, Karnataka, has recruited mostly women who have graduated from one of the 80 odd schools in the district. It has, so far, employed approximately 1,700 women from nearby villages. Prior to the establishment of the gems & jewellery SEZ in Manikanchan, artisans used to migrate to Gujarat and its neighbouring states in search of employment, but now with the establishment of the Manikanchan SEZ, they are going back to West Bengal. One has to visit these SEZs to see the energy and vibrancy in the productive environment.
Turning to the question of land acquisition, which has, alas, been skewed by the debate on the Nandigram and Singur episodes, one can strongly argue that land has to be acquired for setting up industries, and land-use change does happen. Recently, in...an interview to The Telegraph, Kolkata, the Nobel Laureate Amartya Sen emphatically said, “Prohibiting the use of agricultural land for industries is ultimately self-defeating”.
Land acquisition is a state subject in India. Unfortunately, the liberalisation process in the country has not been matched by reform in the rent-seeking patwari system of the states. Girish Sanghi, MP and industrialist, argued at a Cuts’ parliamentarians meeting at New Delhi on May 3, 2007, that once the SEZ application is approved by the Board of Approval, on the basis of a State Government recommendation, there should be no need for any administrative/legal requirements for land conversion.
According to the commerce department, only 0.000012% of India’s cultivable land will be used for establishing SEZs. Following the land-acquisition related controversies, an eGoM has decided that state governments would not buy land for private entrepreneurs and that only barren/wastelands or single croplands would be acquired for SEZs by them directly. There is now a consensus across political parties and CSO/NGOs, against the acquisition of agricultural land by private SEZ developers even at market prices. On the crucial issue of rehabilitation of landowners, another government policy is in the making to ensure that the dispossessed are suitably compensated.
Demolishing the romantic argument of farmers in love with their land, Sharad Joshi, MP, observed at a May 2007 meeting that in today’s changed circumstances, they are ready to sell it for their own betterment. If given the option to sell their land (obviously at ruling market prices), which amounts to voluntary retirement from farming, and gain employment in industrial activities, they will opt for it. This has been corroborated by many, including Cuts staff via personal interviews with farmers.
One innovative model to deal with rehabilitation came up in the case of the JSW Steel plant in Salboni, West Bengal, where farmers were compensated with cash, shares in the company taking over the land and also an assured job to each family. Even if the land-owning company fails, the landowner gets the market price for his land.
In conclusion, the imperatives of SEZs in the present context are clear, but some caveats should be recognised. There may be a potential threat of land being diverted to the real estate business, as opined by Rahul Bajaj, MP and business tycoon. At the same meeting, he said that the larger non-processing area will attract developers for the development of shopping malls, recreational facilities and...
even golf courses. These are some of the concerns which need to be tackled head on before the country can realise the benefits of the SEZ policy.
—The author is with Cuts international, an advocacy group. These are his personal views....
Pradeep S Mehta
Posted: 2007-09-12 00:00:00+05:30 IST
Updated: Sep 11, 2007 at 2345 hrs IST
Financial Express
Cuts, too, has done a study recently for the ministry of commerce, but we did not toe their line blindly. We undertook an extensive field survey to see what is happening on the ground. Fourteen SEZs across the country were visited to look into the larger impact (both upstream and downstream) of the functioning of SEZs. We found that SEZs, in addition to export and investment growth, have had a very profound impact on the surroundings, signalling a positive trend, and a significant change in the mindset of the local people.
The new generation SEZs, such as at Chennai, Sriperumbudur, Hassan, Bangalore, Manikanchan etcetera, have created a tremendous local area impact in terms of direct employment, formal and informal activities, consumption pattern and social life in and around SEZs. They are creating jobs for a large number of semi-skilled workers. Wage rates are rising and are higher in SEZs than those outside.
The HSL SEZ at Hassan, Karnataka, has recruited mostly women who have graduated from one of the 80 odd schools in the district. It has, so far, employed approximately 1,700 women from nearby villages. Prior to the establishment of the gems & jewellery SEZ in Manikanchan, artisans used to migrate to Gujarat and its neighbouring states in search of employment, but now with the establishment of the Manikanchan SEZ, they are going back to West Bengal. One has to visit these SEZs to see the energy and vibrancy in the productive environment.
Turning to the question of land acquisition, which has, alas, been skewed by the debate on the Nandigram and Singur episodes, one can strongly argue that land has to be acquired for setting up industries, and land-use change does happen. Recently, in...an interview to The Telegraph, Kolkata, the Nobel Laureate Amartya Sen emphatically said, “Prohibiting the use of agricultural land for industries is ultimately self-defeating”.
Land acquisition is a state subject in India. Unfortunately, the liberalisation process in the country has not been matched by reform in the rent-seeking patwari system of the states. Girish Sanghi, MP and industrialist, argued at a Cuts’ parliamentarians meeting at New Delhi on May 3, 2007, that once the SEZ application is approved by the Board of Approval, on the basis of a State Government recommendation, there should be no need for any administrative/legal requirements for land conversion.
According to the commerce department, only 0.000012% of India’s cultivable land will be used for establishing SEZs. Following the land-acquisition related controversies, an eGoM has decided that state governments would not buy land for private entrepreneurs and that only barren/wastelands or single croplands would be acquired for SEZs by them directly. There is now a consensus across political parties and CSO/NGOs, against the acquisition of agricultural land by private SEZ developers even at market prices. On the crucial issue of rehabilitation of landowners, another government policy is in the making to ensure that the dispossessed are suitably compensated.
Demolishing the romantic argument of farmers in love with their land, Sharad Joshi, MP, observed at a May 2007 meeting that in today’s changed circumstances, they are ready to sell it for their own betterment. If given the option to sell their land (obviously at ruling market prices), which amounts to voluntary retirement from farming, and gain employment in industrial activities, they will opt for it. This has been corroborated by many, including Cuts staff via personal interviews with farmers.
One innovative model to deal with rehabilitation came up in the case of the JSW Steel plant in Salboni, West Bengal, where farmers were compensated with cash, shares in the company taking over the land and also an assured job to each family. Even if the land-owning company fails, the landowner gets the market price for his land.
In conclusion, the imperatives of SEZs in the present context are clear, but some caveats should be recognised. There may be a potential threat of land being diverted to the real estate business, as opined by Rahul Bajaj, MP and business tycoon. At the same meeting, he said that the larger non-processing area will attract developers for the development of shopping malls, recreational facilities and...
even golf courses. These are some of the concerns which need to be tackled head on before the country can realise the benefits of the SEZ policy.
—The author is with Cuts international, an advocacy group. These are his personal views....
Pradeep S Mehta
Posted: 2007-09-12 00:00:00+05:30 IST
Updated: Sep 11, 2007 at 2345 hrs IST
Financial Express
One billion Indians, one billion ideas
A nation, at best, is an imagined community. At worst, it’s an idea whose time has not come or has become stale. The idea of India falls between two stools — living and dying, rising and falling every minute. And yet, there are more ideas mushrooming every day, helping, conflicting and destroying each other, and becoming new again. The idea of India, with its ancient traditions and young energy, is never a dull thought.
In a nation where the word for yesterday and tomorrow is the same — kal — future passes into the past in a jiffy and an idea can have only a few moments of glory. Jawaharlal Nehru, sitting in dank prison cell, tried to connect the past with the present with a panorama through ages in his The Discovery of India, creating an idea of India as a “unified whole” on the threshold of a giant leap forward. The idea was born a few months before the ancient civilization turned into a nation state amid bloody chaos at the stroke of midnight. Even as the world saw us as a horror of squalor, Nehru’s idea gave hope of a New India.
As the nation broke free from Gandhi’s idea of India as a loose confederation of self-sufficient villages and began setting up ‘modern temples’, it kept experiencing the rituals of making and unmaking as different forces pulled it in opposite directions. V S Naipaul captured India’s many struggles in A Million Mutinies Now, an acidic attack on the idea of “unity in diversity”.
The revolutions that Naipaul saw in 1962 failed to destroy the idea as India’s democracy remained defiantly anomalous. In the Nineties, Sunil Khilnani’s The Idea of India underscored the strength of Indian democracy — the result of a long struggle by the silent majority against the despots and colonialists; democracy was also the glue that kept India together.
By this time, the country’s success was being measured in terms of GDP and its collective happiness fluctuated with the sensex. And New India began to dominate the national discourse, giving birth to a host of new writers with a vision for the future. The most prolific among them was former President A P J Abdul Kalam, who churned out four populist books, all dealing with a single theme: how to make
India a developed country. In his
2020 — A Vision for the New Millennium, the rocket scientist presented a few action plans for the country’s young people; in Envisioning an Empowered Nation, he talked of networking the thoughts of one billion people towards a common goal; and in Ignited Minds, he addressed the young directly: surge ahead as a developed nation or perish in perpetual poverty.
Since living in a developed nation is still a fantasy in India, Gurcharan Das’s India Unbound, which argued that India’s new economy was unleashing the country’s “animal spirits” and will make the “giant elephant” into a truly global power, became a bestseller. The middle class lapped up Das’s ideas on why “India needs to embrace capitalism more wholeheartedly, for all the costs and risks.”
With capitalism itself under scrutiny, Shashi Tharoor’s idea of post-colonial India —The Elephant, the Tiger and the Cellphone — in which he analyzes the changing nation, makes more sense, with the writer saying the road ahead may be a bit bumpy for its one billion people.
One billion people means one billion argumentative minds,
and maybe one billion ideas of India. Maybe there are many Indias, living in different time zones, hopping back and forth between reality and mythology, slipping in and out of consciousness. Maybe Nehru was wrong in trying to “discover” the nation. Maybe, we needed to invent it. Maybe, Gandhi’s experiment with rural swaraj was not such a bad idea. Maybe Ambedkar’s idea of democracy — one man, one vote and one vote, one value — was an idea we should have pursued with greater care. The possibilities are immense. We can all keep trying to invent India. After all, it’s just an idea.
In a nation where the word for yesterday and tomorrow is the same — kal — future passes into the past in a jiffy and an idea can have only a few moments of glory. Jawaharlal Nehru, sitting in dank prison cell, tried to connect the past with the present with a panorama through ages in his The Discovery of India, creating an idea of India as a “unified whole” on the threshold of a giant leap forward. The idea was born a few months before the ancient civilization turned into a nation state amid bloody chaos at the stroke of midnight. Even as the world saw us as a horror of squalor, Nehru’s idea gave hope of a New India.
As the nation broke free from Gandhi’s idea of India as a loose confederation of self-sufficient villages and began setting up ‘modern temples’, it kept experiencing the rituals of making and unmaking as different forces pulled it in opposite directions. V S Naipaul captured India’s many struggles in A Million Mutinies Now, an acidic attack on the idea of “unity in diversity”.
The revolutions that Naipaul saw in 1962 failed to destroy the idea as India’s democracy remained defiantly anomalous. In the Nineties, Sunil Khilnani’s The Idea of India underscored the strength of Indian democracy — the result of a long struggle by the silent majority against the despots and colonialists; democracy was also the glue that kept India together.
By this time, the country’s success was being measured in terms of GDP and its collective happiness fluctuated with the sensex. And New India began to dominate the national discourse, giving birth to a host of new writers with a vision for the future. The most prolific among them was former President A P J Abdul Kalam, who churned out four populist books, all dealing with a single theme: how to make
India a developed country. In his
2020 — A Vision for the New Millennium, the rocket scientist presented a few action plans for the country’s young people; in Envisioning an Empowered Nation, he talked of networking the thoughts of one billion people towards a common goal; and in Ignited Minds, he addressed the young directly: surge ahead as a developed nation or perish in perpetual poverty.
Since living in a developed nation is still a fantasy in India, Gurcharan Das’s India Unbound, which argued that India’s new economy was unleashing the country’s “animal spirits” and will make the “giant elephant” into a truly global power, became a bestseller. The middle class lapped up Das’s ideas on why “India needs to embrace capitalism more wholeheartedly, for all the costs and risks.”
With capitalism itself under scrutiny, Shashi Tharoor’s idea of post-colonial India —The Elephant, the Tiger and the Cellphone — in which he analyzes the changing nation, makes more sense, with the writer saying the road ahead may be a bit bumpy for its one billion people.
One billion people means one billion argumentative minds,
and maybe one billion ideas of India. Maybe there are many Indias, living in different time zones, hopping back and forth between reality and mythology, slipping in and out of consciousness. Maybe Nehru was wrong in trying to “discover” the nation. Maybe, we needed to invent it. Maybe, Gandhi’s experiment with rural swaraj was not such a bad idea. Maybe Ambedkar’s idea of democracy — one man, one vote and one vote, one value — was an idea we should have pursued with greater care. The possibilities are immense. We can all keep trying to invent India. After all, it’s just an idea.
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