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Made in China and the Common Man

Made in China and the Common Man

In a management class, a lecturer told that he had taken an oath not to use any made in China products to protect the economy of the country, even in broader sense the economy of the rest of the world except china. He also told he did not have a single made in china product with him. I pointed out his Nokia mobile. Obviously it is from Finland and he was confident of that. I asked him to remove the back cover and see the battery; the original battery in it was made in China. This is an example, how we are forced to use made in china products.

I started counting the made in China products. My notebook is manufactured for Lenovo and made in China. I have no doubt on ZTE and Huawei modems from China. 99% of my desktop PC components are made in China. My mobiles phones are made in china though they are branded. Even the tennis racket like mosquito bat we have at our house is Made in china. I had used many toys that were made in China when I was a kid. I can definitely tell; I have used products from China more than any country, may be more than that of my own country.

I have many friends who don’t like to buy made in China products. They are ready to compromise with the brands they like to buy a product not having china tag. But they are helpless many a times. Many a times there are no alternatives for made in china product. Some people tend to buy non-branded made in China products. They know the poor quality of the product they are buying, but they feel it is worth for the price it is being offered. It again increases our dependency on China. We, the common people never think in macro level. But even in micro level, China products are found to be harmful. Many food products imported from China has chemicals that are not suitable for human consumption. The toys and other electronic items have harmful metals on the surface for attractive finishing. Though we can’t completely get rid of made in China, at least let us try to decrease the number of such items we buy.  

What Happened to Subhiksha?

What Happened to Subhiksha?

 Once a favorite model of retail success, now a study of financial failure

It was in 1996 that the idea of Subhiksha (prosperity in Sanskrit), organized retail services came to the mind of Subramanian, and IIT Madras and IIM Ahmedabad alumnus. He opened the first shop in Chennai in March 1997. By March 1999 there were 10 Subhiksha shops in Chennai. Its unique discounting model enraged the retail trade in Chennai

By 2000 Subhiksha grew to nearly 50 shops in Chennai retailing groceries and medicines. ICICI Venture's decision then to pick up a 10 per cent stake in Subhiksha for Rs 15 crore gave the retailer enhanced credibility in the market. This money was used to expand outside Chennai, into the rest of Tamil Nadu. By 2002-03, Subhiksha had 140 stores across 30 towns in Tamil Nadu. Sales grew steadily. Cash flows were reasonable and debt, at Rs 15 crore against the net worth of Rs 23 crore, was comfortable.

Tamil Nadu was not enough for the growth of Subhiksha. Subramanian wanted to expand it all over the nation. There was two choices- expand Subhiksha in one state by one and expand many states at a time. The subhiksha model proved to be successful. He choosed second option. Between late 2004 and early 2007, Rs 160 crore worth of equity was raised. That apart, a debt of Rs 220 crore and a bridge loan of Rs 125 crore (for pending raising of equity from capital markets) was arranged to fund the national rollout.

On an average, 60 to 70 stores were added in a month. The pace of rollout is evident from the fact that till September 2006, Subhiksha had a store count of just 160, but by March 2007 it had shot up to 670 and by March 2008 to 1,320. By September 2008, it was 1,650-in all 1,500 stores were added ih just 24 months. 2006-07 and 2007-08 Subhiksha doubled the stores, tripled revenues and almost quadrupled profits

At the time of tough retail competition with the entry of Reliance, Tata and Aditya Birla group into the field Subhiksha had become the country's largest mobile phone retailer with an annual turnover of Rs 1,000 crore. The performance of Subhiksha attracted the investors. Wipro Chairman Azim Premji, in March 2008, picked up the 10 per cent stake in Subhiksha that was offloaded by ICICI Venture for Rs 230 crore, pegging the company's valuation at Rs 2,300 crore.

That was the time for Subhiksha to capitalize Premji’s interest in the company. Company kept postponing the IPO. It did not want to dilute the shareholders interest. So it continued to raise money through debts. During September 2008, people lost their interest in share markets. There was a complete collapse of equity market. At the timewhen liquidity was tight, Subhiksha needed Rs 125 crore in cash to repay the loan.  It was due for Subhiksha to repay the bridge loan. The working capitals were diverted to rescue and expand Subhiksha with the hope of IPO in the confidence of success of the model. Working capital eroded. Many shops were closed as a rescue measure. Suppliers stopped supplying. Shops’ stands became empty. The security guards did not turned to the work. These all happened in less than 3 months. And finally in February 2009 there were not a single Subhiksha faced even cheque bounce case. Ajim Premji accused him for financial fraud. ICICI asked for detailed investigation of financial mismanagement. And he and his company became defaulter for over Rs 750 crore to 13 banks.

Probably, if IPO was done instead of postponement, equity could have been used to reduce the debt and Subhiksha would have survived.

Adopted from a case study in IGNOU MBA question paper.

A cashless life to come soon!

A cashless life to come soon!

The information given here is derived from the address by Managing Director of NCPI Mr A P Hota to SBI POs at State Bank Institute of Information and Communication Management on 4 Feb 2012
"Make a pan (Beetle Leaves and nuts) with extra Gulkun"
Panwala prepares the pan
"Take it sir"
"How much?"
"Rs 8"
You pay Rs 100 note.
"Sorry sir, I dont have change. Can you please credit to Mob No 9876543210, MMID 123456?"

Be prepared to face it. India is going to change, rural India is adopting cost effective convenient technologies. Get your mobile banking service soon, be registered for mobile payments and be sure you are not a financially illiterate in front of your Panwala or a Vegetable Seller. Now let us see how you can pay that Panwala. It is possible immediately within 30 seconds through Inter bank Mobile Payment Service (IMPS), a unique concept of mobile based account to account funds transfer, which is the brain child of National Payment Corporation of India- NCPI. Inter bank Mobile Payment Service enables one to send money to another bank account using the mobile number and MMID of the receiver. MMID is a unique number called Mobile Money Identifier given to every account holder having IMPS. So what you need to do is just open your mobile banking application, select fund transfer, then IMPS, enter the amount to be transferred, the payee's mobile number and his MMID. Confirm the payment using your PIN, within 30 seconds payee gets and SMS telling stating that he has got the credit in the account from you. The payments completed and you can walk away without arguing for changes of soiled noted.

The PoS payments in the rural areas could not penetrate much due to the cost involved in it. There are 225 million ATM cards are issued, where 90 million cards are issued by SBI alone. But the availability of PoS merchants is as less as 0.55 million. Merchant need to install a machine, and then he has to pay commission for every payment which ranges between Rs 1.20 to Rs 2.50. But the mobile payment system is absolutely free of charge. It can be even used for usual fund transfers. Advantages of IMPS are availability at 24x7x365 days irrespective of a bank holiday, no need to share your bank accounts with the person who sends the money, confirmation of the transaction to both the parties, hence fool proof. Many bank accounts can be linked to single mobile number using different MMIDs. MMID helps the error free transfer of money by matching with the mobile number. You can do a lot with IMPS viz mobile to mobile money transfer (don't get confused, both the parties should have a bank account), ATM to mobile money transfer, Merchant payments etc. This is the fastest inter bank fund transfer service available at present.

Visit National Payments Corporation of India (NPCI)to know more. To register to mobile banking and MMID contact your bank.

Cap on subsidised LPG cylinders is a good move

Cap on subsidised LPG cylinders is a good move

Industrialist and Congress MP Naveen Jindal- 369
Vice-President Hamid Ansari- 170
Vice-President Hamid Ansari- 62
Former Chief Minister Mayavati- 91
Tihar jail favorite, ex telecom minister A Raja -47
Diseased Former Prime Minister Chandra Shekhar- 48

These numbers are the subsidized LPG cylinders delivered to the house of the ministers when the subsidy burden on LPG is estimated to be about Rs.25,000 crore. Subsidy is nothing but tax payers money which has multiple developmental use. By supplying one subsidized cylinders every day to rich industrialist like Naveen Jindal, the oil companies did nothing but pushing some tax payers money to industrialists’ house.

There are many small shops were one can get LPG car filled with subsidized LPG. Many restaurants use subsidized LPG cylinders. Many marriage halls used domestic subsidized LPGs to cook food for thousands of people. The tax payer’s money went in drain. If this was curtailed we could have saved thousands of crore rupees and used it for development purpose.

Restricting subsidized LPG to 6 cylinders a year is a good move by Government of India. Six cylinders may be the minimum requirement for a small family of 4. On average one LPG connection per family got 8 cylinders a year last year. While getting 6 on subsidy a family can get another two cylinders by paying full amount. This will definitely curtail the misutilization of subsidized LPG.

For government, reducing the subsidy expenditure will help in maintaining lower fiscal deficit. Lower fiscal deficit lowers the external borrowing. In total, though it is viewed as a tough decision by the government will definitely help in country’s prosperity.

Government should take some more brave steps to pay subsidy amount directly to the beneficiary through their bank account. This UID- unique identification – Adhaar number based subsidy scheme is already under pilot run in Mysore. This will definitely give justice to both the tax payer’s money and subsidy.

India needs a law against MMS sex scandals

India needs a law against MMS sex scandals

There was a website of Indian sex cartoons-Savitha Bhabhi. Today you can not browse it. Government of India banned the site and enacted the law against the website. There was conspiracy that some of itscharacters resemble some of thebollywood legends. Law can always be enforced against the porno sites if the state has the willpower to do so.
Have you ever thought of how many sex scandals happens daily and get caught by hidden cameras or mobile cameras. Number is in hundreds. They all gets uploaded into the web. They are downloaded by millions. Once they got downloaded they are transferred to further millions by blue tooth devices.
India never accepted the porno sites, films, magazines. But the MMSscandals are becoming business. The websites are making more money than any others. Thousands of young girls and boys are ruining their life for some miss deeds they have done. Number of MMS or other sex scandals are pictured without the knowledge of the couple or one of them. Some are pictured with the knowledge or by themselves. There is no point in analysing all these.
The MMS scandals starts from DPS school students' MMS clip(Watch Dev D) to Malnad engineering college couple in Mungarumale, have completely ruined their life. At least the MMS or videos are not publicised they could have live there life somewhere. Though MysoreMallige guys Prithviraj andChetana married it did not survive for long. A nun in Kerala was cught in mobile by her own sex partner-driver and was uploaded.
Now the mania of such scandals have entered even small towns. Vandana's sex tape Mangaloreans down. Now it has entered Kushalnagar, a small town ofCoorg with Rizwan's sex scandal withPallavi, a student of Engineering College of the town. The policemen have not taken a simple action to find out which girl is that out of nine Pallavis in the college. They are waiting for a suicide. Now a College girl of Sirsi has also became a pet off all local guys. The uniform she is wearing is of thelocal college- a newspaper reports. But no action taken!
Why we should not have a strong law against all these. It should punish all from one who has pictured to one who stores in any form. If it found to be pictured with the knowledge of the couple or girl then they should also be punished. This laws should resemble laws of Taliban- bigger punishments! Just because there deeds will not only spoil the life of their own but also ruins the society and the culture.