Archive for the ‘India’ Category

Just came across this awesome grpahic where each Indian state is matched with its closest country in terms of GDP. This gives a more clear picture of where we stand instead of just saying ‘India Shining’


The economist sure knows much more about statistics then Indian press or Government!


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The Disadvantages of an Elite Education

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Though written by a former Yale professor, In Indian context we just need to substitute Yale by IIT/IIM except for a few places where the rules/laws don’t fit.

This essay presents a remarkable insight into the mentality of students from elite campuses. Being from IIT, I also have observed that students from low to medium income backgrounds find it hard to fit in to the same culture that they came from after four years at IIT. As years go by they increasingly find it hard to talk to anyone who is not ‘one of us’ while at the same time getting ready for a life of branded clothes and scotch/wine drinking which is assured as now they are in the elite club.   

 The most worrying disadvantage of elite education is that if you are afraid to fail you are afraid to take risks.

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Great news for all the apple fans. The iPhone is coming to India with not just one but two carriers. Both Vodafone and Bharti airtel have announced that they will be bring iPhone to India later this year. This is following Apple’s deal in Italy with multiple carriers. I never thought that India will have iPhone before Japan and China and even Canada.

Apart from some tech geeks in India it seems to me that the market is limited for the iPhone. With Nokia having a strong mind share and higher price for iPhones including the import duty and all, the volume will take time to build up. But with India being the 2nd largest mobile market in the world even small percentage share may add up to significant numbers. My guess is that come next month apple will have two versions of the iPhone, one 3G and one the current one at the lower price. With no 3G networks in India and a faint possibility of having one anytime soon the lower end version may give good competition to Nokia Nseries smartphones.

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Udaipur: a model district?

Just came across this field report by Ila Patnaik. Never knew that the seeds of RTI act were sown near Udaipur. Things like social audit and taking photographs are a good example of how the government can become more accountable in helping the poor. She also points out that Udaipur district is a popular venue for writing papers on finance and economics.

Well, my hometown continues to surprise me by first ranking as the 2nd best city in Asia, 7th best in the world and having the world’s best hotel in year 2007 by Travel and Leisure magazine.

Udaipur is also home to Asia’s only Solar observatory. It is one of the 6 observatories which are part of Global Oscillations Network Group.

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Analysts, industrialists and government all are suddenly wondering why their is this mad rush for telecom licenses in India, so much is the rush that Department of Telecom has announced that it won’t accept any new applications for mobile licenses from October  1st.  Of course after this announcement DoT has received some 200 applications in last couple of days alone.

The front runners  for licenses are the reality majors which includes DLF, Unitech, Jaypee group, Indiabulls, Parsvnath and Omaxe. Other notable names in the race are the Hinduja group, Videocon, Shyam telelink. DoT has some 200 odd applications for Universal Access Service Licenses ( UASL) . UASL comes with 2G spectrum and ability to offer IPTV.

The question on everybody’s mind is….Why Why Why

Well, the subscriber base in India is growing at 8 million per month which is soon expected to touch 10 million. Teledensity is very low at 20%. DoT is thinking of allowing only a limited number of players. The telecom sector is consistently outperforming the sensex and Bharti and Reliance communicatoins are the darlings of Dalal street. Their are very few companies in the telecom space (9 -10). When the reality market goes for a downswing the reality firms will have something to show on their balance sheet. Telecom market in India is still in it’s early stages with most of the revenue coming from voice based services. The market for value-added services is growing fast and will soon account for a huge chunk of revenues for the telcos.

This development opens up huge opportunity for mobile infrastructure providers and MVNO’s (Mobile Virtual Network Operators). Anil Dhirubhai group has already announced setting up of a mobile infrastructure company and a public listing of it. Airtel and Vodafone are already in a tower sharing agreement. Though DoT does not have a policy for MVNO but will soon have to frame one as not everybody with a license is going to set up it’s own towers.

All these plans might get delayed till the defense ministry frees up the reserved spectrum lying idle with it.

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Great news for Indian Formula 1 fans. The Spyker F1 team has been bought by none other than Dr. Vijay Mallya of Kingfisher. And he tells some great things about his future plans for the team in this interview. So, we will soon see a F1 team with ‘India’ in its name and may be a Indian driver like Karun Chandok, who is fresh from his first GP2 victory, driving it too.

It is still not clear whether India will host F1 in near future but given this deal we can definitely hope that it’ll be sooner rather than later.

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In my last essay on retail we looked at how organized retail is gearing for a big bang entry in India. Now let’s have a look at what the unorganized sector has to do to counter the attack.

With the onslaught of organized retail in India, the Indian press and the Left front are devoting endless articles and speeches about how to safeguard the local ‘kirana’ store owner.

The usual points are:

  1. Give personalized services
  2. Home delivery
  3. Short term credit to customers
  4. Providing added services like P.C.O. and Bill payment.

In my opinion, all these things they already did. As far as I can remember whenever I asked my grocer to give me bathing soap, without fail, he always gave me ‘Pears’ (which happens to be our ‘family bathing soap’) and after I have left, dutifully enters it’s cost under our family credit account. Of course whenever we purchased bulk items like sugar, ghee etc. he would deliver it to our doorstep.

No doubt that with the kind of money currently being put in organized retail in India, the share of organized retail is bound to increase from the current pittance of 3-4%.  It’s  increasing share  can be delayed  but  cannot be  averted. Though with a CAGR of 50% or so, still the share of organized retail will reach only to 10 – 15% by 2010. That leaves the unorganized players with ample time to get their act together or perish.

Where the organized players score against local retailers is in bulk purchase of goods. To counter that the local retailers will have to form certain organization at city level so that they can pressurize the FMCG majors into giving them better prices.

Or maybe some of the local retailers can transform themselves into supermarkets with some loan. It is a necessity in urban areas where organized retailers are fast setting shops and with changing shopping habits more and more urban Indian’s are going for shopping in Hypermarkets.

The threat of organized sector to local retailers is definitely there in the long run, but in short run they won’t feel much of a difference. And those who won’t change on this slight difference will have a hard time, not now, but may be in next 8-10 years.

Trivia: Pears is the only product which is exported from India by HUL.

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