Why the wide gap between the demand and supply of real estate in the real economy is not getting reflected in the stock prices of the real estate companies? To address the issue effectively, we need to remind ourselves about the true nature of the problem during the impending ‘budget season’ when articles and talk shows will be all agog about the need for various kinds of ‘reforms’.

The key issue, as we all know, is information asymmetry. All reforms in the sector should now be focused on how to minimize market inefficiencies owing to informational dysfunctions. I’m sure, forces beyond the control of the vested interest will bring in required changes, sooner or later.

- Rajib Sarkar

- Rajib Sarkar

To the list of Indian cricket matches, IPL got added to my TV watching list rather inadvertently. I watched most of the matches of IPL 1,2 and 3 whenever possible. I had great difficulty in choosing a side to support. I had lived a long part of my working life in Kolkata, so I chose KKR. KKR, everyone knows is the only team that never appeared in semi-finals of any of the three editions of IPL. KKR made more news for its off-field activities than its on-field victories. My next choice was Deccan Chargers, becauseHyderabadis the city I have been living for the last few years. DC did give some reason for cheer in IPL – 2 by winning it.

Having got used to the idea of watching IPL, I started watching IPL-4  though not with the same enthusiasm as earlier. The world cup victory was just beginning to sink in when IPL 4 started suddenly with little or no build-up.  Just after the World Cup victory, watching the same set of players in opposite teams or even the arch rivals in same team took a little while to adjust. With the complete makeover of all the teams and new teams getting added to the list, it became too hard to remember. With some effort and passage of time, this part of the problem has been overcome.

But now the problem is one of fatigue. Mid-way or not even mid-way through the tournament, now there is little excitement left to watch matches. Even the 20 overs look too long. Watching first 6 overs until the field restrictions are in place and then later towards the slog overs, one gets a sense of what is going on. Sixes, wickets, run-outs, none of them excite.  The very same advertisements from Vodafone ( initially I liked it) , Havells, Brrr ads of Coke have become too irritating to watch. The Extra innings sessions are so boring and comments so banal, that there is no desire to listen to them. The commentators look completely drained out. To avoid the ads or extra innings, if I switch to some other channel, rarely do I get back to IPL. After staying awake for the first few days to watch the matches till 11.30 PM, I do not feel the urge to let go of my sleep for the sake of the matches. I have subscribed to the SMS updates from my mobile operator and see the results of the matches first thing in the morning.

The fatigue and irritation from IPL ( it is still a lesser evil than the 24×7 news channels) is so much that I sometimes find myself wanting both the teams to lose, when neither KKR or DC is playing. Keeping track of the position of the teams in the points table has become such a big task, thanks to its topsy-turvy nature,  that I have decided to see it only towards the end  of the league stage.

It appears that I am not the only one who is complaining about the fatigue. News from TAM is that TV ratings have come down to record low for this year’s IPL. It is 18 % lower than last year. The overkill of cricket and little innovation or controversy in IPL-4 has made it boring. Wonder what Lalit Modi would have done, if he was still running the IPL circus!!!

- G.Mohan

These board level changes were preceded by a huge media build-up. The succession planning  for Narayana Murthy at Infosys was compared with the succession planning at the Tata Group for Ratan Tata. There was a committee appointed under the leadership of Jeffrey Lehmann. After all the deliberations, they have chosen K V Kamath as the successor of Mr. Murthy as the Chairman of Infosys. Mr. Murthy however does not leave the company entirely, he will continue as Chairman Emeritus. However hard he tries to portray the image of a great renouncer, Infosys and NRN refuse to leave each other.

Mr.  Kamath, the Non-Executive Chairman of ICICI Bank has already been a member of the Infosys board since 2009. Among the non-founder directors on the board, Mr. Kamath was the only serious contender. All the other board members like Omkar Goswami , Rama Bijapurkar, Marti Subramanium, Mr.Lehman himself are either academics or consultants. None of them have any experience of chairing any large company board. If Mr. Kamath were the only pragmatic option left, was there really a need for such a media build-up?

If any contest was there, it was perhaps there between Mr Kamath and Kris Gopalakrishnan, the current MD and CEO. Even that choice has been obviated by announcing Mr  Gopalakrishnan as the Executive C0-chairman.  Shibulal takes over from Mr Gopalakrishnan as the MD and CEO.The Putin-Medvedev combination of Mr.Gopalakrishnan and Mr. Shibulal will continue to be present as Co-chairman and CEO, instead of CEO and COO. By not announcing a COO , the perception of status quo remains. If they had announced a COO, at least that would have been interesting as there are no other founders left. The only remaining founder director, Mr S.Dinesh quit as Director recently citing personal reasons. 

This blogger believes nothing much will change. An opportunity to reinvent Infosys through top-level changes has been lost. The company and the minority shareholders thereby have become a victim of the arrangement between the founders to take the top-job at Infosys by turns. It is absurd that the least capable among the founders ( a ranking which the founders made among themselves ) takes over the leadership position of the company when it has become huge. As Mr. Shibulal waited for his turn the company grew from a mid-size company to become a US 5 Billion $ company. His patience has been rewarded. But what about the other stakeholders? Thank God or shall we say thank K. Dinesh, that there are no more founders waiting for the top job.  

- G.Mohan

AC 3Tier is such a popular class of travel that during the holiday seasons, it is among the first ones to get filled up.  The number of coaches of AC 3-Tier in many long distance trains are continuously being increased to cater to this ever growing demand.

Here is an attempt to analyze why this class of travel has gained popularity. It started as a replacement to the Ist Class ( Non-AC). The traditional Ist Class passengers, such as the government servants, interview candidates  and the families traveling on Leave travel concessions had already shifted to the AC 2 tier/ Air travel as the eligibility shifted. Thus Ist class remained a class of last resort to passengers who were unable to secure  AC 2 Tier or  sleeper class reservations.

As passengers accidentally tried the AC 3 Tier, they started seeing its virtues. T Air conditioning made long distance travel comfortable as opposed to the non-AC first class coaches. Also, the AC environment cut out the dust and noise an inevitable accompaniment in sleeper or Ist class (non-AC) .It may be 3 times costlier than the sleeper class, but it was still 33 % cheaper than the AC 2 Tier. The lesser space and headroom in comparison to the AC 2 tier   was a compromise the value conscious Indians were willing to make for the lower fares. Perhaps, similar reasons make low cost carriers gaining market shares.

Since the 90s, with the prosperity coming to the PLUs ( people like us/urban middle class Indians), who traditionally traveled by sleeper class for family holidays and personal travel, found the AC 3 Tier an affordable and attractive option. Besides, the practical benefits of AC travel, there could be other emotional reasons of choosing to travel by AC 3 tier.

The growth of the 90s and 2000s, led to rising isolation of PLUs with the rest ofIndiaand Indians. As many commentators talk about the rise of gated communities, private schools, private hospitals, AC cars, etc making the yuppies having little contact with the rest ofIndiaand Indians.

The ordinary Indians (aam aadmi)  who PLUs wish to move away from travel by the sleeper class. AC 3 Tier for a small price, isolates PLUs from the ordinary Indians. The glass windows and curtains keep the filth and chaos of Indian stations out of sight. Also, the fellow travelers are PLUs, who have chosen AC 3 Tier for similar reasons.

- G.Mohan

AIADMK

20 kg of rice for all ration card holders

20 litres of drinking water daily

1 mixie, 1 grinder & 1 fan

Laptops for students of Class 11 & ITIs 25,000 & 4gm gold coin as marriage assistance

Free modern, green homes of 300 sq ft, costing Rs 1.8 lakh each to three lakh BPL families

Rs 25,000 or 4 gm gold as marriage assistance

60,000 cows and sheep

DMK

35kg rice for below poverty line families

Wet grinder or mixie

Laptop for all backward college students 15,000 marriage assistance for poor women

Rs 15,000 marriage assistance

The media and the political analysts are all shocked at these promises. Elections are about promises made in manifestoes and all attempts are made to lure the electorate by showing them a vision of a better future.  Is mixie, grinder, fan or laptop for the poor not a vision for a better future? It is. Then why is everybody shocked.

The shock comes from the fact that these appliances or items of consumption are private goods and not public goods. The implicit assumption in public discourse is government expenditure ought to be made for public goods. Nobody is shocked, if a political party promises better roads or more electricity or drinking water. Because these are essentially public goods. It is expected that government is best equipped to create these infrastructure and deliver these services.

Quoting Wikipedia :

In economics, a public good is a good that is nonrival and non-excludable. Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability that no one can be effectively excluded from using the good.

The opposite of a public good is a private good, which does not possess these properties. A loaf of bread, for example, is a private good: its owner can exclude others from using it, and once it has been consumed, it cannot be used again.

It is not that there is no demand for public goods in Tamil Nadu. Tamil Nadu is a power deficit state and Chennai has a perennial water shortage. It is not that there is a lot of surplus in the government coffers, far from it. Tamil Nadu has a huge debt burden . Then why this great desire to improve the standard of  living by providing mixies, fan and even laptops to the poor .

The political parties have understood that the electorate have become smarter and mercenary. Perhaps based on the TV gift given by DMK in the previous elections which swung the result in their favour.  The voters are clearly asking ‘what’s in it for me ?”. The electorate in Tamil Nadu perhaps realizes that expenditure incurred in creation of public goods, benefit the politicians and bureaucrats far more than it benefits them. So they would much rather be happy taking home an appliance free, obviously, paid for by the taxpayer.

Is this a good trend? Obviously, not. Private good purchases are best left to individual choice. Large quantity of appliances purchased through tender and placing the order on the lowest priced ( L1) supplier is not going to satisfy majority of the users, even if he/she is poor. This will trigger a secondary market for these appliances and distort the market for these products.  Or else, it may lead to wastage. The voter may accept the appliance because he is entitled and may not use it at all.

Hopefully, better sense or election commission will prevail to curtail this dangerous trend.

- G. Mohan

The anger and frustration of this youth emanated from many sources. Firstly, they felt stifled and did not feel free. Secondly, despite so many years of freedom, the unemployment was running high and their economic lot had not improved. Thirdly, their ruler Mubarak and his cronies around him had amassed huge wealth and stashed them abroad. Fourthly, the geriatric rulers just could not feel the pulse of the youth.

Before the Internet era it would have been necessary for these angry citizens to meet, discuss, organize themselves and then plan a revolt. Meeting even secretly and organizing themselves in a dictatorship like Egypt would be at great risk to life and property. Thanks to the social media, it is possible for people to meet virtually, just as they are going about their jobs and yet plan for a revolt of the kind Egypt saw.

Indian IT services companies today are large with the big ones having employees of more than 100,000 each. These companies thrive on a very young employee base. Average age of employees in many of these companies would be around 27 years. The average employee of these IT companies is part of the Internet generation.

Most large IT companies, as per company policy, do not allow access to any of the social networking sites. The stated reason is to maintain confidentiality of client information and to improve productivity. The unstated reason is not allowing their young employees to connect, form unions and express dissent of any kind.

Yet, employees are active on the social networking sites using their smart phones, home computers or even wireless modems on their laptops. When 3G will be launched India wide and gains popularity, this will become even easier. Being young they are, many might be today using them only for dating and generally socializing, but if the despair builds up these networks can easily find other uses.

Although, the despair among the employees in IT companies is nowhere near the boiling point reached in Egypt, there are a few areas which need attention. Firstly, most companies particularly the older ones are very hierarchical and do not allow the young employees to complain or give suggestions. They are just expected to take orders. Dissent is not encouraged and often punished. Secondly, the top management is from a different generation and often quite disconnected with the aspirations and frustrations of an average young employee. Thirdly, the CEOs reward themselves with huge salaries and commissions even during recession, when the salaries at lower levels are frozen. This is noticed and employees just gripe about it. Fourthly, cronyism is rampant and meritocracy is just for lip service. Their legitimacy is often questioned by the young employees, in private. Lastly, just like Mubarak’s focus to keep US happy, the top managements are focused on keeping the analysts and shareholders pleased, even at the cost of employees.

The HR departments of most IT companies are just efficient recruitment engines. They are quite occupied doing routine administration and processing. They just do not have the understanding nor the capability to manage the large human communities these organizations have become.

The HR managers will be found wanting if an Egypt like revolt erupts in their organization. They will have to go hiding behind their pile of PCMM certificates and 360 degree appraisals.

- G. Mohan

These are nice pastimes and interests for the common folk to gossip. But when it comes to a career in any of these areas it is a totally different story altogether. One is confronted with barriers, real and imaginary.

In a democratic country, which got its freedom through a mass struggle, one would imagine that everyone had a equal chance of making a career in politics and rising up the ladder. It is far from true. It is increasingly become a closed club of sons and daughters of politicians, cutting across party lines. In a recent book, India : a portrait, Patrick French, excerpts of which has been carried by Outlook, French has analysed the backgrounds of all the members of the current Lok Sabha and has found out the following :

Every MP in the Lok Sabha under the age of 30 had in effect inherited a seat, and more than two-thirds of the 66 MPs aged 40 or under were Hereditary MPs.

French goes on to say that :

 What was the effect of a closed structure on bright, qualified people who might otherwise have entered public service? They knew they were more likely to get a break in business, or in a stable profession, than in this hereditary system. A stream of potential talent was diverted at source, away from politics.

If one looks at Bollywood, once again it is pretty evident that the top reaches of the star system belongs to the families. But for an odd Shah Rukh Khan or an Akshay Kumar, almost every other top ranking male hero is related closely to the member of the film industry. In which industry or profession, would an Abhishek Bachchan have survived for over 10 years, despite so many flops?

In the case of female top slots, where more than talent , it is beauty ( or whatever is perceived to be) that is an essential requirement. Here the beauty pageants like Miss India contests have thrown up a few top stars, who did not belong to any of the existing families for e.g., Aishwarya Rai, Priyanka Chopra. It appears the meritocracy and recognition of talent is more in creative departments like direction and scriptwriting.

There is some hope for a middle class Indian to make it big in cricket, on the basis of merit alone. During the recent IPL auctions in Bengaluru, where different IPL franchisees bought players for their teams, it became clear that player prices were largely based on merit (or perception of merit by the franchisee owners). The player to fetch the highest contract fees was Gautam Gambhir, a sum of US $ 2.1 mn. Gambhir is young. He is talented, captained India successfully as a stand-in for Dhoni. Gambhir is a first generation cricketer from an upper middle-class Delhi family.   

Umesh Yadav, a fast bowler from Vidarbha, whose base price was only US $ 50,000 was signed up by Delhi daredevils for a whopping US $ 750,000. His profile from Cricinfo is given below:

Less than two seasons after fast bowler Umesh Yadav first played with a leather ball, he was bowling against the likes of Rahul Dravid and VVS Laxman in the Duleep Trophy. What makes his ascent even more remarkable is that he represents unglamorous Vidarbha in the Plate League of the Ranji Trophy. He is the son of a coal-mine worker and was aiming to become a policeman. He only started considering a career in cricket as a 19-year-old, an age by which the best young Indian cricketers are in the running for a national cap. He bowls from wide of the crease, and his usual delivery is the one that angles into a right-hand batsman. He is capable of touching the 140kmh mark, and also possesses an effective bouncer, qualities which helped him take 20 wickets at 14.60 in four games for Vidarbha in his debut season in 2008-09. While he made waves in the domestic scene, Umesh really caught the eye during IPL 2010, where he impressed a much wider audience with his pace for Delhi Daredevils. He finally broke into the big league, when he was flown to the West Indies as a replacement for the injured Praveen Kumar during the World Twenty20 tournament in May 2010, and earned his first call-up to the India Test team for the tour of South Africa in November the same year.

Alongside the success of Gautam Gambhir, Umesh Yadav, Saurabh Tiwary, Yusuf Pathan, Rohit Sharma etc, IPL-4 auctions also snubbed the likes of Ganguly, Dravid, Laxman, Ishant Sharma etc who are perceived as spent forces/ short on performance.

 If cricket was run like politics or Bollywood, Rohan Gavaskar and not M S Dhoni would have been leading the Indian team.

- G. Mohan

Ans. Government’s notice on warning pictures on the packets not clear

Q2. Which state proposes to launch a Right to Service act a first of its kind?

Ans. Bihar

Q3. Godrej is acquiring the FMCG brands GENTEEL and SWASTIK SHIKAKAI from the Kothari family. Who were the original creators of them?

Ans. Sarabhais

Q4. Number of emigrants from India is the second largest in the world. What is India’s rank globally in receiving immigrants?

Ans.  10

Q5. Which car model is fast replacing Ambassador as the official car for ministers, bureaucrats, generals?

Ans. Maruti SX4

Q6. In which Indian city a LITTLE KOREA colony is coming up thanks to 170 Korean companies setting up shop there?

Ans. Chennai

Q7. What is the service of GROUPONS the site acquired by Google for over 5 b $?

Ans. Free coupons for groups to get discounts in retail sites

Q8. With no formal academic qualifications which pioneering institute did Dasharath Patel create?

Ans. National Institute of Design, Ahmedabad

Q9. From whom has the RPG group acquired the global rights for marketing under the CEAT brand ?

Ans. Pirelli of Italy

Q10. What does Harsh Mariwala of Marico find wrong with engineer MBAs ?

Ans.  Left brained and process driven.

- G. Mohan