Saturday, May 25, 2013

Bridging the gap

Irregularities in teachers' appointment would decay the system

A couple of weeks back, INLD leader Ajay Chautala along with 51 other people were convicted for illegal recruitment of teachers by CBI special court. The state High Court passed on the case to the centre and asked for CBI intervention as it saw involvement of many elite politicians and dignitaries in the same. Ajay and his group deployed more than 3,000 JBT teachers in various schools of Gurgaon by creating forged papers and through back-door entry. But then, this case comes as no surprise to me, but what is interesting to note is the way schools recruit teachers and above all, the amount of money these teachers are ready to pay to get into a reputed school.

As per Government Primary Teachers Federation, this back-door entry also halted the promotion of old teachers (whose promotion were due) as the entire fleet of staff are now under suspicion and scrutiny. The entire process had cost these individuals not less than Rs. 4 lakhs, in any case, which interestingly would be more than their average annual salary in all probability. But then, this is not only one of its kind scam. Almost two years ago, a number of politicians were charged for irregularities in teachers' recruitment process in Meghalaya. In this case too, teachers were recruited for lower primary schools of the state. In an another case, teachers were found paying hefty amount (ranging from Rs 50,000 to Rs 1,00,000) for getting themselves transferred to the location of their choice.

On hindsight, this may seem a simple case of back-door entry but when seen from a wider perspective, the real issue would become quite vivid. These cases of irregular teachers’ appointment echo the very gap between demand and supply of teaching staff. In simple word, shortage of teachers at primary school level is massive. For instance, there are over 26,000 vacancies of school teachers at different levels in Haryana. Moreover, the Uttar Pradesh Basic Education Board has invited online applications for filling up of 72,825 posts for primary teacher in 75 districts of the state and West Bengal Board of Primary Education has issued notification for 34,559 assistant primary teacher vacancies recently but the positions remains to be vacant, still. So much so, the last date of application and examination dates for the same has been postponed many times. Such dearth of staff also has deteriorated the quality of education across the nation. The Annual Status of Education Report (ASER 2012) for rural India, released a few days ago by PRATHAM, speaks volumes about the sorry state of primary education of our country. As per the report, in 2008, “only about 50 per cent of Standard 3 students could read a Standard 1 text, but by 2012, it declined to 30 per cent. About 50 percent of the Standard 3 kids cannot even correctly recognize digits up to 100, where as they are supposed to learn two digit subtraction.”


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri – A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman

ExecutiveMBA

Friday, May 24, 2013

"Much of the Western journalism in Afghanistan today assumes that any Afghan who takes up arms against the West is a fanatical intolerant Muslim who is doing it for religious reasons"

William Dalrymple's new offering, Return of a King, is a fabulous account of the First Anglo-Afghan War and its disastrous consequences. As another defeat looms large in Afghanistan, he talks about the obvious parallels and divergences in an interview with Saurabh Kumar Shahi

What prompted you to write a book on the First Anglo-Afghan War? Did you find enough curiosity among the readers to lap up this subject?

The reason I write any book is not primarily what the readers want, I have to say. The first rule to write a successful book is you need to be passionate about it yourself. Having said that, I must add that it is a consideration. There are thousands of books I want to write on subjects, like my family history etc., who no one else will be interested in reading about. So, readers are a consideration. But it is not the only consideration. While I knew it would not be as successful in India as, say The Last Mughal; as the subject is not directly related to India, I expected it to sell in countries who are affected in one way or other by Afghanistan, including the 50-odd countries that are part of International Security Assistance Force (ISAF). So I thought it was a risk worth taking. Although you are right, it is not a famous story anymore. Very few people know this tale and fewer still know Shah Shuja. So it was a gamble. But the story was fabulous - the simple cinematic image of 18,000 soldiers marching in a country and only one man managing to return past Jalalabad is a driving force. It is such a strong and eternal image that it will work for a thousand years to come.

The impressive bibliography suggests that you brought in a whole new set of research materials for this book, including those from Afghan poets, chroniclers as well as British officers. Often such materials tend to be partial and exaggerated and incorporate folklore...
Sure, it is a different sort of source to the British colonial source. So, if you have a letter from Lord Aukland saying I want to move 5,000 troops from Barrackpore to Lucknow, you can be sure enough that 5,000 sepoys moved. When an Afghan poet says “A hundred thousand brave horsemen charged over the hill and made the Firangis flee for their life”, you obviously don’t take it with the same literal sense. But it is incredibly helpful in many ways, especially the way it portrays Afghan attitudes, and also who the people doing the fighting were – their motives. As with much Western journalism in Afghanistan today which assumes that any Afghan who takes up arms against the West is a fanatical intolerant Muslim who is doing it for religious reasons. The interesting part is that in Afghan sources you get very distinct reasons. The religious factor is there, and it is expressed as it is in rhetoric. But individual reasons are well defined by the Afghan sources. Abdullah Khan Achakzai participated because his girlfriend was seduced by Burnes. Aminullah Khan Logari joins in because his land is taken from him. However, you have to use them carefully. But you use British sources carefully too as they come with their own problems, including incorporating the imperial views.

It is not difficult to see some very obvious parallels between the 1842 war and now. Was there a deliberate attempt on your part to illustrate these parallels or were they so obvious that they would have come to light even without a little help from the writer?

I guess it was so obvious that I did not need to overdo it. The only times I explicitly talk about the parallels are in the introduction and conclusion. In the main body of the book, except the odd footnotes where I pass through a territory and say that it is now a US base or garrison, nothing is deliberate. Again, I have also pointed out differences. I think it is important to say that Hamid Karzai, with all his corruptions and failures, is at least a democrat. And similarly, Mulla Omer, although he has great following in some areas in the south, especially in and around Kandhar, is by no means a dominating central figure of resistance in a way that Akbar Khan and Dost Muhammad were in 1842. But readers would be awed by the astonishing parallels nonetheless.  


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
For More IIPM Info, Visit below mentioned IIPM articles
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Saturday, May 11, 2013

The unputdownable!

Subrata Roy Sahara should come out winning on all fronts in the current face-off with SEBI! And why the erroneous Supreme Court judgment against Sahara goes beyond Parliamentary Acts and is being misused by SEBI to its own benefit!

There are a few things about Subrata Roy Sahara that even his harshest critics accept. That the man is a visionary – his mammoth investments in media, housing, hotel, sports and other industries being compelling evidence. That his open assertions of being a patriot have their weight in the various behemoth social initiatives undertaken by his group – with no apologies to the slanted English media in India which, I feel, hypocritically slanders anyone who represents the ‘other’ India (lest you should forget, it was this very media that shamelessly reported gossip a few years ago about him being ‘critically ill’ and on his deathbed; no surprises then that the same English media chose to ignore reporting how sprightly he was while meeting UK Prime Minister David Cameron a few weeks back in a closed door meeting discussing educational and research initiatives). And yes, that the man religiously knows his numbers and has a financial acumen that is better than the combined intellect of all Indian regulators in the various industries where he operates.

There are a few things about India that even its damnedest supporters don’t deny. That the License Raj era spewed out a few handfuls of family businesses that shamelessly chewed away the very idea of India, criminally sucking it hollow by monopolising industries, encouraged by corruption soaked politicians – and encouraging them in return. That this venomous combination over the decades led to a jaundiced India that today has hundreds of millions of illiterate people below the poverty line; that has no global brands to speak of, but many billionaires borne out of the excesses of the License Raj era (I call most of them ‘blood billionaires’, given that they’ve made the money on the blood of Indians). That the same group of blood billionaires, in cahoots with a similar group of corrupt bureaucrats (regulators included) and politicians, have fought and will fight tooth and nail, criminally and illegally, to ensure that there is no new honest and ethical claimant to their industry space, especially if such an entrepreneur were from the proletariat.

That Subrata Roy Sahara titles himself as the Managing Worker of his group only adds to the ire of India’s caustic bourgeoisie, which, hand in hand with the English media, would be loath to have such an unabashed community representative of workers amongst their well ‘oiled’ and ‘greased’ group. So every time Subrata Roy Sahara and his likes attempt to tread the path of diligent and astute effort – assuming the same equated to returns – they’re pulled down acerbically and vindictively by the group representing the old, feudal India. You see, this group believes that only they know how India should be run and by whom. Look around and you’ll see many examples strewn across India of how honest upstarts have been trampled upon by the powers that be before they could gain ground – wherever there has been anyone attempting to improve the condition of India, they’ve had a horde of regulatory, tax, police and judicial bodies running up their door to initiate the so-called enquiries and ‘search’. The current face-off that Subrata Roy Sahara has with SEBI actually exemplifies all this too well. A group that has issued OFCDs (Optionally Fully Convertible Debentures) since the year 2001 with all relevant government permissions, and which has regularly submitted all details as required by the concerned government authorities, suddenly gets a prohibitory order from SEBI in November 2010 against the OFCDs issued by two unlisted group companies (Sahara Housing Investment Corporation Ltd. and Sahara India Real Estate Corporation Ltd.) – and this despite the fact that just seven months before that, SEBI had, through its own communication to Ministry of Corporate Affairs, commented that as these were unlisted companies and had not filed a draft red herring prospectus with SEBI, any complaint with respect to these two companies should be handled by the Ministry of Corporate Affairs.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles

Wednesday, May 08, 2013

Why He Will Be even More Dangerous for India in 2013

This man has already achieved what no other non-member of the Gandhi family has ever done. The closest to his record is Atal Bihari Vajpayee, who was Prime Minister for six consecutive years between 1998 and 2004. P. V. Narasimha Rao is another non-Gandhi who completed 5 uninterrupted years as the Prime Minister. The next best is a Gandhi family member Rajiv Gandhi, who led the government between 1984 and 1989. No other Prime Minister – except Jawaharhal Nehru and Indira Gandhi – has survived five uninterrupted years as Prime Minister. Nehru was PM continuously from 1947 till his death in 1964. Indira Gandhi was PM between 1966 and 1984, except for a two and half year exile between 1977 and end-1979. The way things are changing in Indian society and economy in terms of aspirations and expectations, even die-hard supporters of Congress will snigger at the suggestion that Rahul Gandhi could be Prime Minister for 10 consecutive years beginning 2014. So there is absolutely no doubt that, in a factual context, Manmohan Singh has already secured his place in history. It is a different matter that an ‘unelectable’ bureaucrat completing 10 successive years as Prime Minister reflects on the quality and the depth of Indian democracy. But credit must be given. Manmohan Singh will almost certainly complete 10 years as PM. But will history talk about him and his lengthy tenure the way it will keep dissecting the track record of Nehru and Indira? For that matter, forget Nehru and Indira, will he ever acquire the stature that even Vajpayee has assured for himself? Let’s look at it in another, more blunt manner: will history ever talk about the legacy left behind by Manmohan Singh? Quite frankly, history books will confine him to a supporting role at best as they analyze the legacy of Sonia Gandhi. Sad, but Dr. Singh will leave behind no legacy: faceless bureaucrats who selflessly do the bidding of political masters never do so.

And yet the man, the economist, the bureaucrat, the courtier and the reluctant politician knows that he has achieved something phenomenal by becoming Prime Minister for two consecutive terms. And even faceless bureaucrats have egos and dreams. There is no doubt whatsoever that Dr. Singh knows his days as Prime Minister are numbered. He knows that even if the UPA manages to win another term in 2014 and Rahul Gandhi decides he is better off enacting the role of Sonia Gandhi by pulling the strings from behind the scenes, it is another courtier who would be anointed Prime Minister. He also knows that fawning Congressmen will instantly delete him from even contemporary footnotes the moment another courtier takes his post. I mean, if they don’t care a fig about him even now when he is the Prime Minister, what chance would he have as an elderly statesman without even the fig leaf of perceived power and authority? Surely, it must be rankling. It would rankle any normal human being with normal feelings and human emotions. And Dr. Singh is undoubtedly the embodiment of middle class normalcy.

This is where India begins to enter very dangerous times. Dr. Singh would be determined to leave at least some legacy behind. He is not a fool. He knows there is no chance of a political legacy of the kind left behind by Nehru, Indira and Vajpayee. He also knows that history books will credit not him, but Narasimha Rao as the architect of economic reforms. In fact, in terms of economic performance, his long tenure as PM would be torn to shreds by objective historians. Do remember, he was aware of all this even back in 2008 when it was not certain that the UPA would be voted back to power.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles
 
2012 : DNA National B-School Survey 2012
Ranked 1st in International Exposure (ahead of all the IIMs)
Ranked 6th Overall

Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
BBA Management Education

Monday, May 06, 2013

M&As: A Phenomenon of the Market

M&As have always been an area of debate for business experts. However, new research explains who acquires whom, whether payment is made in cash or stock, what valuation consequences arise from mergers, and why there are merger waves

In the late 1990s, the United States and world economies experienced a large wave of mergers and acquisitions, culminating in the bursting of the Internet bubble and the subsequent stock market fallout.

Until now, there have generally been two ways to understand mergers and acquisitions. One explanation relies upon the notion of synergy, i.e. the greater profit potential that results from combining two companies. The second explanation suggests that mergers and acquisitions are the product of bad management being kicked out by better management.

Previous research has addressed the separate merger waves of the past 40 years, offering a different explanation for the waves of the 1960s, ‘80s, and ‘90s. A new study, Stock Market Driven Acquisitions, undertaken by me and Andrei Shleifer of Harvard University, offers a more unified framework for understanding the different characteristics of acquisitions and how they vary over time.

We suggest that mergers and acquisitions are a financial phenomenon created by stock market misvaluations of the combining firms, and are related to the level of the market as a whole. Markets are inefficient, while managers of firms are rational, taking advantage of stock market inefficiencies through well-timed merger decisions. The objective was to come up with a simpler theory recognising that valuations differ from true fundamental values temporarily because of market sentiment. In part, companies make acquisitions or become targets of acquisitions to benefit from stock prices that are temporarily out of whack.

The Spiraling Effect of Misvaluation

A company’s valuation may be heavily influenced by investor psychology, since expectations for growth are built into the price investors are willing to pay. For example, to justify paying a price-earnings multiple of 150 ($150 per current dollar of earnings), you would have to believe that the company’s earnings will grow dramatically over the next five to seven years.

We find that in the 1990s, the valuations for the market were pushed up for some companies much more so than others, creating the “haves” and the “have nots.” Misvaluation in this context refers to the “haves,” such as America Online (AOL), Cisco, and Intel, being deemed worthy of excessively high valuations based on unrealistic growth expectations. These companies knew their share price would fall when the market learned of its overconfidence. The star companies therefore had a short-run opportunity to cash in by using their stock as currency to buy other companies-hard assets that were more sanely valued.

Our model says there was some sanity prevailing among the CEOs of high-flying companies. They knew that the valuations were unreasonable, so by acquiring all these earnings producing assets in exchange for their shares, they cushioned themselves from the full impact of the bust.

Why would a company agree to be sold in exchange for overpriced stock? The answer can be found in the different “horizons” of corporate managers. Horizons refer to how long a manager wants to hold onto a company. Managers with short horizons might wish to retire or exit, or simply have options or equity they are anxious to sell. Managers with long horizons might want to keep on working, be locked into their equity, be overconfident about the future, or just love their business.


Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri
 
For More IIPM Info, Visit below mentioned IIPM articles