One of the key indicators of domestic consumption is agricultural growth. Agriculture and allied activities contribute around 20 % of GDP and feeds more than 58 % population. Now in the recent economic crisis when we started looking inward, which was right in place earlier too, for overall growth, the emerging concern is the growth of Agriculture which defines consumption pattern of India. During tenth plan (2002 to 2007) agriculture grew by merely 2.3 % against 7.6% of overall GDP growth rate.
The key issues I want to raise is the role of Indian industries and government in developing rural infrastructure, education and health, deploying policy and participating in rural value chain, pricing, insurance, credit and microcredit. Recent global economic turmoil forced us to think beyond urban population to ensure sustainable growth. Companies like Hero Honda, Marico, HUL are outperforming in today’s scenario only because of their rural penetration. Two things are common in these companies. One their product is well designed product to suit rural taste supported by (two) matching delivery mechanism. Take example of Hero Honda whose basic models (main volume and revenue generators) are well positioned for common man’s requirement like fuel efficiency and reliability. Along with their product they have matching delivery network too with widest coverage in tier two and tier three cities. Bajaj, one of the competitors of Hero Honda, closely matched their rural network compared to Hero Honda but failed to position right product. But all these strategies are meant only to take share of rural expenditure. The Indian industries should think beyond that towards participation in rural value chain and infrastructure developments. ITC’s e-Choupal is a good example where the model is not only participating in farmer’s value chain but also simplifying companies supply chain. Such innovation creates value for both company and customer. From government perspective, we need radical changes in agriculture policy, pricing mechanism, credit and insurance to farmers. Along with these a healthy investment in infrastructure, education and health will give sustainable results in long term.


Recently I had some discussion on centering with one of my seniors and discovered few insights which is worth sharing. Centering is a process of meditation in which one can concentrate all his knowledge to attain wholeness. This wholeness could be adequate enough to solve many personal or social problems. To elaborate more lets take an example of process of puzzle solving. Most of the puzzles can be resolved up to one missing data to get before final answer. It happens because we evaluate our options from some or other point of view at a time. In the process of juggling with puzzle, I am sure most of us have experienced, a stage comes when one start thinking on more than one dimensions and point of focus converts from some or other point of views to universal point of view and that is the time when one see the answer. This is the time when one sees the missing link and solves the puzzle. While centering is also the ultimate stage is when all of one’s knowledge becomes available at one point. So what? Is not it amazing to just think that you can access all your accumulated learning, insights and experiences are available to solve your problems? This is centering.

We carry different personalities which are developed in the course of our life. So we have different level of knowledge with different learning, experiences and insights. And believe me all of us have accumulated adequate knowledge to solve any of our problems. However; it’s almost impossible to use all your knowledge at one point of time. Centering through meditation is nothing but collecting all in you at one point and attain the feeling of completeness or wholeness.

The ultimate stage of centering is the point when attains all knowledge. In Hindu mythology it is often referred as “Bramha Gyan” which means knowing the Bramha, the creator of universe, the God. This is the position when one attains detachment from everything. It can be simply explained as if one knows everything, nothing remains significant. However; since gaining knowledge is a process, the centering is also a process. That is why we worship the image of Lord Shiva who is always in Yoga, the meditation or centering.

All the technical, social or philosophical discoveries are the result of centering only. It’s nothing but using your available knowledge to discover the unknown. Look around and think about all innovations and creativity, is not it scientific? If centering is a methodological process all of us can be innovative and creative. All of us can discover undiscovered and ignite multi revolutions at all levels, be it the world, the country, the society or the organization.

‘Bhagya’ and limitations of ‘Karma’

I had some busy months and few excuses of not writing. Actually it’s all about reflections and for last few weeks I was not able to feel any substance in my thought until two things happened to me. One was “Dasvidania” a Hindi movie and two; was my recent visit to one of the shopping mall in Mumbai.

‘Dasvidania’ is a movie about a person who knows that he’s gona die in next three month because of stomach cancer. And he make a list of ‘things to do’ for his rest of life. One by one he makes and completes ten wishes making his end a happier one and leaving his surroundings with a sense of accomplishments. The fact that provoked my thought is that none of us know how much time is available to complete the ‘things to do’ of life. And almost all of us even do not have ‘things to do’.

The second incidence shook my long debated believe in law of ‘Karma’. In the shopping mall there is a place specially marked for children where they got every thing to fun like jumping, dancing etc. And I saw a young boy on wheel chair, probably because of disorder from birth, staring at those of similar of his age, who were in fun, dancing and jumping. One could very easily see the helplessness in his eyes. What Karma makes him so? Why there is no level field for all?

The simplest answer is ‘the life is like that only’. We may decide our own actions but we need sound mind too to make us capable of doing so. My actions are ‘Karma’ and my sound mind is my ‘Bhagya’ or luck. There is limitation to law of ‘Karma’ as there are number of factors which we can’t decide. These factors are father, family, language, primary education etc. These are paternal assets we get as ‘Bhagya’, the luck. And if we are lucky enough to have sound mind we can decide the ‘Karma’ of our lives.


If you believe in Karma, you would not do anything just out of habbit.
Bagavad Gita says your Karma decided fortune of your future course of life and beyond. Quality of Karma becomes top most concern as our duty. Gita also says Karma should always be directed towards duty of Dharma. Literal meaning of Dharma is religion. But its significant is above that. It is basically your ultimate goal as directed by your purest inner self. So Karma should always be for a very positive purpose and so it should be carefully designed.
Most of us will agree that more than 99% of our Karma come just out of our daily routine or habit without any purpose. Very few of us takes care of a very long term objective while deciding education or career. Our bringing up comes under a high supervision of our parents so something we can blame to our surroundings; but not all. When we start taking our own decisions we must be clear about our ultimate goal or a long term perspective of our duties. It is true for our smallest activities too. We must carefully choose our talk, letters, comments based on relatively bigger objective. It can be done by self awareness and a live consciousness while in action.


Recently I came across a forwarded email on speech made by Pulitzer Prize-winning author, Anna Quindlen at the graduation ceremony of an American university. There was something which made me to reflect on some of the important aspect of life.
The self concept within us can be considered to be self centric from the periphery of life; but it is not fully true. After education we, most of us, take an aspiring career and fix our routine into some well defined commands. In profession we focus most of our energy to fulfill expectations of the organization. Remaining energy is used for the expectation of parents, spouse and children. The only personal expectation which drives us seems to be promotion, salary increment or a better job in highly competitive environment which is least of personal in nature. All these convert our life from hours to days, days to years, and years to ages and in return we make stress as part of our life. By definition, in the case mentioned above, we are selfish but actually we are not as hardly we are doing anything for our real self
In the process we lose our actual requirement of real self. Have we ever reflected to notice that how quickly we are losing our hobbies, friends and love in the journey of life. Can we recall things which fascinated us and we ever thought of living with those. Hobbies for example, books, movies, travel, writing, sports or anything for that matter, can you recall the last time you actively participated to your satisfaction. Take your mobile phone and check the numbers of your old college friend and ask yourself when last time you have talked to them and shared your feeling as you used to do in college days. Think of your parents when, last time, you’d delighted them as you used to do throughout your childhood like your first step, first word, first result, first achievement and then many. Actually we are missing the real happiness which is eternal; instead we are in search of pseudo worldly things and assume those as source of happiness which is very temporary.
It is right time to rethink and discover source of eternal happiness for our real self. If we are successful in doing so the definition of “selfish” will be changed with a positive meaning. And believe me if you successfully discover real you, the other professional and family expectations will also be in right place.

Realty and Retail

Though India’s GDP projections look good as made by World Economic Outlook (WEO) released recently by the IMF, India is likely to register a Gross Domestic Product (GDP) growth of 7.9 per cent in 2008-09, which may slip to 6.9 per cent in 2009-10; the effect of credit crunch is visible in two sectors; realty and retail.

In Mumbai most of the developers have discovered credit route from private financers at a very high cost of borrowing varies from 36 to 48% in last one to two months. This is in anticipation of better comeback of property demand. However the recent property expo was disappointing for such developers. The prices depend on demand which is most uncertain. Bangalore and Gurgaon prices have seen significant corrections and Mumbai it is expected soon by a minimum 20 to 30%.

Full post at wealthyson

Fundamentals of Indian economy

One financial crisis in US and the equity market in the whole world shaken up with significant decline. Fundamental equations of various industries are questioned and depression took over. How safe is Indian market? All analysis indicates no fundamental error but global depression and rumors have sufficient potential to prove these analysis wrong. I should be positive but negatives can not be ignored in sudden panic environment all across.
Can you estimate how much a panic environment may create a damage? Recent rumors on ICICI bank followed by crash of its stock price is just one of the several such examples. Deposit ratios and leverage of Indian banks are much healthier than that of several top performing banks of US and Europe and still the prices are falling. Again fundamentally nothing is that bad as it is reflected in falling stock prices. Another potential damage is redemption pressure on mutual funds creating a negative cycle of further depression by killing the option of Indian MFs to use their liquidity to invest in declining market.
Let us park rumors and depression aside for a moment and try to analyze some of the fundamental issues of Indian equity market which may affect future of market after stabilizing from current turmoil.
1. First and foremost is the question of decoupling of Indian economy from US. Is it really possible? In one of the interview with Uday Kotak, director of Kotak Mahindra bank recommends that India should stop depending on global flows and start relying more on its domestic savings and domestic ability. The only question to address is the future of globalised Indian industry like IT which triggered Indian GDP growth to more than 8% in past few years and attracted most of global inflows.
2. Second is actual estimate of GDP growth. If the current situation stays for some more time, it will affect the demand. Maintaining more than 7.5% growth will be a challenge. If it drops below 6.5% which is very unlikely as the fundamentals are still okay, the global inflows will be affected.
3. Third is competition with other emerging economies especially China for preferred investment destination. Both economies are having various strengths. The differences to asses are types of governance, service vs. manufacturing capabilities and fiscal deficit vs. fiscal surplus.
4. Fourth is monetary policy. On one hand; RBI announcing further rate cut by 150 basis point, on the other inflation is still above 11%. Further cut in CRR and SLR is expected to manage the current liquidity crisis with some boost to GDP. Monetary policy will be interesting to watch if the objective is to decouple Indian economies from developed countries as I discussed in point no one above. The challenge for the policy makers is how to address issues of both Inflation and growth together.
5. And finally Upcoming union elections and the result.

“Nishkam Karma”, action without attachment

The concept of “Nishkama Karma”, action without attachment to both action/work and fruits expected there after, as mentioned in Hindu holy book Bhagwad Gita, can solve many of the management problems and can confuse few too.
One of the most popular saying of Bhagwad Gita is always misunderstood. The following stanza is always misunderstood as ” Do your work/duty without expecting any fruit/result”. Actually it is slightly different and can be explained with some more concepts mentioned in the very beginning lessons of Bhagwad Gita. I have interpreted in some different ways and tried to think it from the management perspective.
The Gita limits our domain of influence to our “Karma” only and not thereafter (ref; chapter 2, 47). So results of “Karma” are not in our hand. But if the definition of word “Karma” is analyzed closely it will confuse the above interpretation. Karma is not merely work but it is work for duty. Karma is not only activity but also it is activity with a positive purpose. When there is duty or activity with a purpose, Karma becomes Dharma. “Dharma” can be correlated with the ultimate goal of the life. So, though you should not be instrumental in making your actions bear fruit (chapter 2, 47), you may design your actions for your ultimate goal, the “Dharma”. When we talk about fruits, it is actually outcomes of your sequence of actions in the way to ultimate goal. Good or bad, there should not be any attachment to these outcomes. And so these outcomes should not divert you from your ultimate goal.
What are the benefits of detachment from fruits? As per the Gita, in advance stage of attaining yoga, there should be detachment from “Karma” too. This also have very interesting interpretation but I will try to discuss it in some other post. All these attachments creates aggression, fear and anger. Carrying forward from the conclusion in above paragraph, aggression, fear and anger have all the potential to divert you from your ultimate goal by changing your course of actions in search of pleasurable fruits. So to make your goal and your actions intact we must have stable mind. The Gita defines it as “Samatva”, evenness of mind. (chapter 2, 48).
From management perspective, replace Karma with strategy and Dharma or ultimate goal with vision or mission of the organization and all the above interpretations will hold true.
Your comments carry significant value
References from Gita
Chapter2,47; Your right is to work only and never to fruit thereof. Be not instrumental in making your actions bear fruit, nor let your attachment be to inaction.
Chapter2, 48; “Samatva”, evenness of mind is called “Yoga”.
Chapter2, 56; The sage, whose mind remains unperturbed amid sorrows, whose thirst for pleasures has altogether disappeared, and who is free from passion, fear and anger, is called stable of mind.
Chapter2,57; He who is unattached to everything, and when meeting with good and evil, neither rejoices nor recoils, his mind is stable.

Performance Indicators-FMCG industry

Tons of technical analysis is available online on ways to pick a stock. I considered few and got confused. Why investment decisions are supported with too many technical analysis and forecasts? Interesting thing is that the rules of the game are variable and so it is not so simple. Still I dare to find some simple ways and try to understand rules of the game. To start with I’ve taken one of the largest industries, the FMCG industry. The basic question I tried to answer about the variables affecting the industry performance. Stock pick would be automatically in place if the performance indicators are known.
First and foremost is changing market dynamics with fluctuating crude oil prices and inflation. Last few months were terrible. On one side input prices are increasing resulting in thinner margin to manufacturers. On the other side the share of wallet of consumer is decreasing. Overall decrease in category demand is now become visible. Companies with better brand equity are successful in transferring this burden to consumers. However with high competition already in place every time price increase will not be a viable solution.
Second emerging market dynamics is the emergence of organized retail. In this new format, relatively weaker brands also get equal opportunity to place their products and offerings along side a stronger brand. Two things will distinctly visible in such situation. Either exclusively differentiated product or the most cost effective product will get lead in the battle. In high inflationary situation consumer would tend to choose second option in order to control the outflow from their wallets. So brand loyalty earned by various major players will be at stake. Product with very high brand equity could maintain their position till the situation improves. Weaker or moderate brands will be the target of new cost effective products or brands.
Third is the cost leadership. A company’s pro activeness towards innovation, rationalization of cost structure, capabilities in manufacturing and in outsourcing gives a long term perspective of their approach towards cost leadership.Take the example of shampoo in which a crude oil derivative is used in packaging shampoos, while PET, a petroleum-based plastic product, is employed in manufacturing hair oil bottles and packaged water bottles. Crude oil derivatives account for almost 17 per cent of the total cost of corrugated boxes. Which company is working towards other innovative solutions? Another cost iscost of distribution which is very high in FMCG sector. So efficiency of supply chain and logistics adds significant value to cost leadership.
Fourth is competition with unorganized sector and regional players. Their overhead costs are much lower than a company with national presence. Being ‘local’ gives them a very cost effective advantage of distribution and logistics. Their presence can be felt at remote rural level. But since they are small the effect of inflation are even bigger for them. Poor management and poor cash flows are other prominent concerns. So a comprehensive consolidation can also be seen in next 2 to 5 years. The companies with better cash will take this.
Let me summaries the performance indicators to address health of a FMCG company in following parameters:
1. Brand equity with competitive advantage
2. Operating profit margin to understand cost advantage
3. Distribution efficiency by evaluating rural presence
4. Proportion of outsourced manufacturing
5. Cash in hand