The previous two posts [ 1 ] [ 2 ] which detail my analysis of slow and fast money clearly define that services which form the firmware of our society – infrastructure and utilities – those which are used as a public resource are targets for investment of slow money. Also, such investment is secure, usually subject to several controls and needs to be reliable and long term. As a corollary such investments are also conservative in terms of the return, and hence not suitable for profit booking. As a result we often find government or quasi government agencies (such as NGO’s) investing in such services. On the other hand, individual wealth – whether in form of PE / VC funds or in form in direct equity – which is aimed at booking high profits is never invested in such fundamental services. Hence, Banks and Insurance companies - because they form the basic fabric of public financial infrastructure - are also targets of slow money investments. It is for this very reason that Non-Banking Fina

Continued from here It is important that both the country and its citizen grow at reasonably matched pace and growth of one does not outpace the other. If a citizen's standard of living increases faster than that of the economy - s/he would be tempted to migrate to an economy/country which matches his/her standard of living creating a drain (brain drain being one of the manifestations). On the other hand, if the economy outpaces the citizen's personal growth, it may often lead to rise in economic disparities leading to social problems. Since, slow money contributes towards increase in the standard of the economy/country while fast money impacts the standard of individuals, it is imperative that both slow and fast money should coexist in the economy and in the right proportions. Also, fast and slow money should not be interchanged - otherwise it may produce bizzare results. For example: under communism the state insisted on investing slow money into business leading to setting u

I am no economist, so I find the concepts of M1, M2 ... M4 a little tough to understand. However, based on my own thoughts, I have come up with a new kind of money supply classification - that of fast money and slow money (which overlap but are the same as private and public money). Slow Money can be defined as money kept in form of long term reserves and used for projects with long gestation periods having assured but low rate of return. Typically, this is money kept in Fixed Deposits, Savings Bonds or other forms of Government borrowings. Such money is often used by the Government or its agents to build infrastructure or institutional framework for the country. Fast money is typically investor money - invested in ventures with potentially high returns but as much higher risk and with short to medium term return cycle. Such money - as is obvious from its definition - is typically invested in equity or other risky assets like venture capital funds, usually used for ventures whose sust

Budget Update:   From:  http://beta.profit.ndtv.com/news/show/relief-for-60-income-tax-payers-in-budget-27658 FM prunes tax rates: Income up to Rs 1.6 lakh - nil Income above Rs 1.6 lakh and up to Rs 5 lakh - 10 per cent Income above Rs 5 lakh and up to Rs 8 lakh - 20 per cent Income above Rs 8 lakh - 30 per cent. New tax rates would offer relief to 60 per cent of taxpayers, the finance minister said. Additional deduction of Rs 20,000 allowed on long-term infrastructure bonds for income tax payers; this is above Rs one lakh on saving instruments allowed already. Investment linked tax deductions to be allowed to two-star hotels anywhere in the country. With simplification of the Tax regime proposed above by the FM in this budget, a way has been paved for a Direct Tax Regime - which the FM has confirmed will go live from next year (April 1, 2011). What is Direct Tax Code (DTC)? .

Continuing the chain of thought from my previous post , I got thinking as to whether the changes in the Indian economy since 1990's have been top down and visionary or merely reactionary and ad-hoc. The conclusion which I have reached has been that they are a combination, but above all - they are based on a Groundswell from the masses. While multiple sectors - IT, Retail, Financial Services and even manufacturing - have contributed to rise of the Indian Tiger; to illustrate my point, I would concentrate on the Financial Sector [ related post ]. Pre-liberalization, there were many shackles, like license raj, on the Indian financial services sector. But more gruesome were the factors of immature or absent regulatory supervision and resulting power of large investors to manipulate the free markets. The Banking sector meanwhile was dominated by PSU banks which were slow, bureaucratic and customer unfriendly. Starting the 90s there were many top down reforms starting like Dematerializ

I was Googling for some information on Financial regulations in India, when I chanced upon a few old news items from the early 2000's [ 1 ][ 2 ]. While reading those new items I realized how the Indian Financial sector has undergone a rapid transformation in the last decade or so. India's financial sector has undergone a very rapid phase of transformation in the last 10-15 years. While scam ridden 90's brought in multiple regulators like SEBI and other related organizations such as NSDL and NSE, the private banks which grew brought in newer leaner ways of banking and infusion of technology - Core Banking Systems and Straight-Through-Processing. However, it was only in the new millenium that these changes as an aggregate started hitting the psyche of the common man and the government / regulators together. This trigerred massive national level initiatives - many of these fueled by the Reserve Bank of India (RBI). Some of these were the introduction of Electronic Clearing (EC

Found this awsome list of statements on motivating employees here . people don't do what you tell them to do; they do what gets them a reward positive reinforcement is the most effective way to motivate people [Note that in a technology company, a reinforcer might be the freedom to spend some time working on a side project or a pet feature; reinforcement is broader than money or praise; it can be anything that the employee values.] reinforcement works best when it is immediate, certain, and frequent (Daniels points out that kids that our public schools diagnose as having an ADD learning disability are able to concentrate for hours playing video games that provide 85 positive reinforcements per minute) reinforcement doesn't work if followed up with a "but, you need to improve X, Y, Z" monthly reinforcement only provides 12 opportunities per year to shape someone's performance; weekly is the minimum (the annual review and bonus is a joke, as far as Daniels is concer

I wrote this text circa January 2003, when I had read the book - " Who Moved My Cheese ". The text compared the Gita to the principles set in the book. I recently read a book – ‘Who moved my cheese?’ by Dr. John Spencer. It is basically a story of 4 characters -2 mice and 2 ‘little-people’. All four are fond of cheese. Once they discover a large store of cheese but after some time the store exhausts. The mice driven by living instinct move in search of new cheese while ‘little-people’ , unable to accept change were reluctant to move from the old cheese store. Finally one of them moves out in search of cheese and finds a new store of cheese and in the process of finding new cheese he discloses some rules which are Golden rules for managers to deal with change. What startled to me was the close the resemblance these rules have with the message of the Gita. I present here a brief description of those rules and there equivalent verses from the Gita. 1. Having Cheese makes you ha

Continued from Part I The strategy of increasing domestic oil consumption worked well as the indigenous oil reserves were going well and sufficient reserves were secured in the middle east. But OPEC stepped in and soon after being formed, it caused havoc in 1970s with the oil embargo . Soon, a reverse trend was to set in - just as war had lead to increase in oil production, now oil was to lead to war. By the mid 1980s it was well clear that the encouragement of oil consumption had backfired on western governments and something had to be done to control the menace of increasing oil prices. Iraq presented a classic opportunity to the US in the early 90's by invading Kuwait and opening doors for a direct and legitimate intervention of the western politicians and regimes into the middle east. The war for oil has continued with stops and spurts thereafter well leading upto into the recent Iraq conflict. With more than a decade of war and 5 decades of politics behind it, governments in t

While travelling on the crowded Powai belt of the JVLR [ map ], a colleague exclaimed that it is surprising that rising fuel costs and pollution have not yet created enough concern for serious research and product development in the area of Alternative Fuels. This lead me to wonder as to why, just like an increase in fuel production in the mid 1900's cause an increase in automobile traffic worldwide, is an increase in fuel prices not causing a wave of alternative technologies? The reason, I think is - what it has always been - political will! Oil was discovered way back in the 9th century, however it did not find much use till the industrial age began. But even after the onset of the industrial age in the 17th century, coal remained the primary source of energy till the 1950s. And then suddenly, the consumption of oil started rising thereafter - why? Coal was a viable source of energy till it was used as a fuel for factories and other static energy consuming centers. However, earl

Continued from: Wasn't Entreprenueship About Innovation After Mohammad Yunus received his Nobel for microcredit - so many people have thought of starting up a micro-finance institution - its a simple idea, with minimal risk (if you know how to manage money) and what's more it in line with social justice. But as I have discussed with some of you - no point entering a field unless you can bring in some innovation to it - could be technology, process or scale. And boy! there could not be a better example than this to illustrate my point ... Kiva! Source: Kiva: Improving People's Lives Like a social networking site, Kiva posts profiles of potential borrowers. Lenders then peruse the profiles and make loans to people whom they find appealing. Once a lender makes a loan, Kiva sends the money to a microfinance institution, or MFI, in the borrower's home country. The MFI disburses the funds and works with the borrower to ensure timely repayment. In the language of the banking

Given the economically charged environment in India - lots of people are planning to start new ventures or planning to get involved with startups - and everyone from your uncle to your cousin's friend's elder brother has an idea! And with orkut/facebook/ linkedIn - it is so much more easy to link to other people who have similar ideas and hatch business plans. However, while the story might start there, it doesn't quite end, so many 'in-progress' ventures never make it to fruition and of those which do, few survive. Why? My personal answer is - we are all too fixated with making money and too less with making a difference. Daman [fictional] works for a bank as a financial consultant, he interacts with clients day in day out and sees how he is solving their problems using a bit of Google and a bit of Bloomberg. And the next thing he realises is that, he doesn't need his company - why not join hands with his Jijaji who runs a software company, get the software whi

MBA's usually learn about Theory X:Theory Y methods of management. Over the last 3 years in corporate world I have seen similar two opposite styles of business development at work - I christen them "Theory A: Theory B" style of business. Theory A A manager who believes that new business is the best business and getting business is his most important priority. Such managers tend to paint a very rosy picture of their company / team / work in front of a new client. They also tend to over-commit. Though not as a rule, but as a corollary, such managers tend to pay very little attention to work (projects / deliverables etc) when its comes to delivery / execution. Thus they tend to over-commit and under perform, resulting in low repeat business. However, their future pipelines are usually so full of work that they are hardly ever bothered or worried by the lack of repeat business. Theory B A manager who believes that repeat business is the best form of business and hence his fo

As a part of my day job with KPMG, I work with many financial institutions consulting then on their Technology aspects. Indian Financial institutions – especially private banks and funds – aim to leverage Information technology to improve their operations and financial control alike. The top managements of almost all reputed institutions are quite bullish on using technology in all spheres of their work – however when one comes in close contact with the way technology is leveraged on ground, one starts questioning the efficacy of mere top management commitment. What I have observed is that for most line managers , Information Technology is simply about mapping the existing processes on the IT systems, resulting into only the record keeping process getting digitized. The process continues to operate with the same mechanics as before and in effect the process re-engineering opportunities, that an IT implementation offers, are lost. As the Harvard professor on enterprise 2.0, Andrew McAfe

So true for India as well - I hope corporates in India also realize it Excerpt from : The "Work From Home" Generation from Read/WriteWeb by Alex Iskold The Good Things No commute: If you live in the suburbs and work in the city ... Flexibility: Working from home likely implies flexible hours - having flexible hours is a huge benefit for example you can exercise during the time of the day which suits them best. Saving money and the environment: having no commute has another big benefit - financial savings. With the cost of gasoline going through the roof, not having to drive is important for everyone. Working from home also has a global environmental benefit. By commuting less we save energy and reduce pollution. Increased productivity: A typical office environment is noisy, people are talking, phones are ringing, co-workers are coming by to chat, and there are always crowds near the coffee and soda machines. At home, these distractions are not going to be present. But, if y

One of the biggest motivations which drives people towards achieving perfection in work is the (actual or illusionary) realization of the importance of their work. All other factors are merely hygienic - money, designation, working conditions - all merely ensure that one is motivated to perform 'good enough'. However, in absence of the 'work worth realization' (lets call it WWR from now on) - the extra bit of dedication is hard to come by. The best illustration of this would be in the Army. Irrespective of the designation or salary everyone - from the highest ranked officers to the foot soldier - is dedicated to the extent of his/her lives. What motivation can there be to give one's life for, if not the fact that the job is more important than your life, that winning the war is infinitely more important than the salary or benefits you will accrue as a part of your job (if you would live on!). Similarly, have you ever come across a sweeper who makes sure that not eve

The reason why many popular products are in 'Beta' is because a web-based application, unlike a desktop app, can be in a state of perpetual upgradation and new features can be added seamlessly without planning for 'release cycles'. More so, users expect quick and frequent feature upgrades for these applications. But adding new features is not excuse for not releasing a final product! One could always add new features to a 'test instance' test it and then release them into the 'production' version. That's the way things work in the corporate sector, shouldn't they work similarly on Web 2.0? The reason why this cycle cannot be performed for most of these new applications is that they 'need' their users to test the new application features. Unlike corporate development environment where a dedicated team usually performs unit testing before release, some of the web based features cannot be tested by a 'small' testing team. Take for ex

Government of India has set up the National Accreditation Board for Hospitals (NABH) and National Accreditation Board for Laboratories (NABL) to strengthen the regulation of healthcare industry in India but the major purpose behind the move is said to be the intent to encourage medical tourism. India is trying to break into the humungous (and growing) global market of Medical Tourism currently dominated by Indonesia, Malaysia and Thailand. While India might be just a beginner but it has some inherent advantages of being recognized as the land of Yoga, Meditation and other parallel forms of medicine in addition to having doctors well qualified in modern medicine. While the increase of medical tourism and induction of accreditation services will improve the state of existing healthcare in India, it might not help in making up for the shortage of healthcare facilities. Accreditation will primarily be sought by large hospitals, or medium sized clinics in areas where the demand for premium

Prologue: Starting a series post is a risky business – if you do not get time to post the sequel fast enough, the original post conveys an incomplete meaning and starts receiving unfavorable comments. That is what happened to my previous post. Anyway – better late than never – here is the second and concluding part of Innovation = ...... As I argued in the previous post, without innovation, it is not possible to reach the echelons of global trade and difficult to oust competition. Going further, not just international competition, even domestic trade and indigenous industry is unlikely to prosper without innovation. Any new innovation, fuels a chain of many other parallel mini-innovations to be done around the central theme. For example, the 1-lakh-small-car by Tata Motors requires new initiatives in each of its ancillaries – from upholstery makers to tire makers. On the other hand, how much internal business does an Oracle implementation in the U.S. generate back home in India? One co

Eavesdropping is crime, especially in corporate circles. I had no intention of committing this crime, but I could not ‘unlisten’ the very excited and loud description of a to-be-given presentation that this individual was narrating on the phone. “I will talk about the market scenario, then about emerging India, then how we are globalizing our business model and ……” Of late, I have got tired of the incessant chant in politico-industrial circles – knowledge superpower India, emerging India, global positioning etc. Some have already placed India on the highest pedestal in the IT industry while others are modest enough to just lay claims over the top position by 2010/2020. While it is true that, Indian companies with their Global Delivery Model, low-cost-highly-educated workforce and strong process orientation, are sure taking on the IBMs and Accentures of the world right from the front – but they are far from snatching the turf from these global majors. More so India poses no threat to Am