Archive for the ‘Economy’ Category

Flat, marriage and family – 3 reasons why young Indians don’t turn entrepreneurs!   Leave a comment

Disclaimer: This is my personal experience, quite a few people agreed to what I wrote, please feel free to disagree.

If you are from India, have been a part of a regular middle class family and have even thought of starting something of your own, am sure you’d associate with the headline itself! Everything that I’ve mentioned below is based on true incidents. I don’t intend to hurt anyone here, still if you did, sorry about it! Getting to the point, straightaway!


About an year back one of my very close friends told me about a product idea. I liked the idea and told him I could work with him on that if he’s willing to seriously build it. His answer was – “yaar abhi job nahi chhod sakta, 6 mahine mein shaadi hai” [Dude, I can’t quit job right now, getting married in 6 months]. Okay, get married but why do you want give up on an idea you believe in? Your girl will understand, won’t she?

Guess what? Obviously, he never build it and few months back I saw someone (very famous in the startup community) roll exactly that product out and is quite close to getting funded too! Yeah, my friend’s “happily married”, barely at 27!

I know an entrepreneur who literally fights (or used to at some point) with his wife everyday just because she wants another kid and he doesn’t. His company has just come out of startup mode and is heading towards being an SME. ”I have a 4 yr old kid and having another one now would take me 4 years back! I have been slowly planning the financials but this would mean I start planning all over again, save even more and take even fewer risks!” is what he said!

One of my ex girlfriend had started talking about marriage barely when we had graduated. I never denied marrying her but I used to tell her lets first achieve something, I want to do a few things in life, be a successful entrepreneur and all this might take a little time, there’s no point in getting married quickly and then allocating funds to expenses that could have been avoided at that age, but no, she wouldn’t listen! Of course, she’s happily married and I, having failed 2 startups in the past, am still building another startup! (I hope this post reaches you, lady!)

Oh! And that concept of getting your kids married at the right age => guys before 30 and gals by 26-27 max! I’ve always stressed, there’s nothing called such as a “right age” – why not just get married when you are ready – 25 or 32 – how does it matter? I hope you’re not thinking about that old shit about retiring and then marrying your kids before that <- That actually is the root problem!

Sorry to say, but the uncles and the aunts in our (normal middle class) families are the worst. They will keep asking your salary, some of them every single f***ing month. These relatives are probably the ones whose kids would have done “nothing” in their lives, graduated from some (worthless) A league institution in India and landed a fat paying job. And believe me these are absolutely good for nothing folks. If you are a startup guy, you already know that, don’t you ;) They would join a company through campus placement and would be too scared/complacent/useless that they would spend their entire life within that single organization – without even doing something innovative! These uncles would be happy to show the entire family that the ad in TOI today was done by their kid while all that ad would have is a bollywood diva holding a soap bar in her hand. THATS IT!?! That’s all you learnt in your fancy B School?

What’s the big deal in it? If I pay TOI that much, they will even publish a horse shit pic, they just want money! But no, these are the ones who are valued in your family! Whatever they say areGolden Diamond words. What’s worse is you are always compared to these dumb folks whenever you go to a family gathering. And most, all of them would look at you as if you are the piece of shit lying on the roadside.

To share another case, one such highly respected family member told me to look for a career in animation, back in 2007-08. Recently, I met him at another family gathering a few months back and he said “tum animation me kuch kyu nahi try karte?” [Why don’t you try something in animation?] I was like…dude? You are still the same! Your thoughts are still stuck where they were 4-5 years back! By the way, this member is probably the highest respected person in my family and heads delivery at a multi billion (yes Billion) dollar enterprise and travels abroad every week. Yeah, (sadly) that’s what puts the stamp on his authority! Am quite sure even Steve Jobs or Bill Gates would have spent more time with their families at his age (and still earned much more if that’s what you want to hear).

More problems we face with family/neighbours in this book.


The other fantasy about middle class family people is owning a flat! I never get this point. I, really don’t! Why do they want your kid to buy a flat and then spend the rest of his life paying back the loan? Coming from middle class, we’ve never had loads of money to spend. So the way out always is to pay probably a 10th or even less initially and then take a loan for 60% for the next 15-20 years.

And is duly supported by our Financial system! Go and try to raise money for your startup and the same money for a home, you’ll know what I mean!

Once you have a loan on your head, that too a home loan, for not less than 40-50 Lacs, am sure you wouldn’t be willing to take a risk, would you? And that tension of repaying that loan! Anyways, there is very little probability that our kids would stay in that house for long. They’d go places, do stuff in life and make it big themselves! Actually this would connect with Rahul Dewan’s post where he talks how retired people should recede back to smaller towns and do great things. A brilliant thought by the way, go read that!

In another relationship, I told my girl that I don’t earn great right now and that I am trying to build a company and shared the vision. At first she appreciated my honesty but then within a few weeks she asked “Abhinav, hum ghar kab lenge?” [Abhinav, when will we buy a home?] That day itself I knew – she wasn’t the one! No wonder that relationship didn’t last long.(I am quite sure you’re reading this!)

I guess I’ve written, read ranted, too much already or else I won’t be allowed to enter my hometown the next time!

Update: I realized most people, even though agreed to this, say its inconclusive. I must add this: The point is that people who can bear all these pressures and can still build a company, are the ones whom we call SUCCESSFUL!

Originally posted:


Posted October 14, 2013 by avinash2060 in Economy

Dollar power gets elderly NRI doctor 152 wannabe brides   Leave a comment

Dollar power gets elderly NRI doctor 152 wannabe brides

The wannabe brides include a 21-year-old Muslim girl from Surat and a Hindu girl from Ahmedabad of the same age.

This can turn young grooms green with envy! At 68, a US-based doctor has an option to choose a bride from not less than 152 women, some as young as 21 years, speaking volumes about the rising value of the greenback!

Dr Raman Shah (name changed), a practicing physician in New York, was flooded with proposals after he put out a matrimonial ad. Dr Shah had remained single after an Amdavadi woman he was in love with refused to move with him to the US. He had also lost his parents and two brothers some years ago.

A month ago, Dr Shah approached the Ahmedabad-based NGO that runs a matrimonial service for the elderly.”Dr Shah needed a life partner as he couldn’t bear the loneliness anymore. We put out an ad saying that a 68-year-old doctor residing in New York needs a bride who is willing to shift to the US. There is no age, caste or religion bar,”said the co-ordinator of the NGO.

And, the response not only surprised the NGO but Dr Shah too. “We had expected around 25-30 responses that too from women aged above 45 or 50 years. But there is a mad rush to marry him. There are 152 women who are keen to marry him and shift to the US,” said the coordinator.

The wannabe brides include a 21-year-old Muslim girl from Surat and a Hindu girl from Ahmedabad of the same age.

Surprisingly, a 35-year-old woman from Ahmedabad is even ready to dump her husband if Dr Shah selects her. “Also, there are a few who want a live-in relationship with him,” he said.

Dr Shah is planning to come to Ahmedabad in November to tie the knot.

Posted August 30, 2013 by avinash2060 in Economy

U.S. Q2 GDP Grew More Than Expected At 2.5%–And That’s Upsetting Investors   Leave a comment

The American economy was considerably stronger in the second quarter than an earlier estimate showed, but the figures aren’t delighting investors. Problem is, any numbers that show a firmly rooted recovery will raise expectations for the Federal Reserve to stop propping up the markets.

Gross domestic product, the broadest snapshot of an economy’s activity by measuring the goods bought and sold, increased by 2.5% in the second quarter, new Commerce Department data shows. The government offers three estimates of GDP–this is the second, and it’s sharply higher than the 1.7% growth figure from the original report.

Why the change? The U.S. exported more and imported less than originally thought. At the same time, business investment greatly increased, and the housing market continues to show signs of a robust recovery.

What is most striking about the second quarter GDP number is that it’s more than double the pace from the prior three months. The U.S. grew only by 1.1% in the first quarter, according to final estimates, and economists had thought the second quarter would be even more dismal, forecasting just 1% growth when the government provided its initial GDP estimate. Higher taxes and government spending cuts have been considerable drags on the economy to start the year, though economists generally believe the second half will be significantly stronger

Predictions of a robust end to 2013, along with a better-than-expected second quarter, explains why observers think the Fed will begin to end the major economic stimulus program that has stretched on for years. Indeed, the brighter second-quarter figures will likely reinforce the central bank’s belief that it’ll be able to start reducing its bond-buying program next month. “It’s no certainty,” warns Capital Economics’ Paul Ashworth. “August’s payroll figures will be watched closely.” He adds, “We still think the Fed will begin tapering its monthly asset purchases…the upward revision to second-quarter GDP growth should give officials more confidence that the recovery is gathering steam.” Less money artificially pumped through the financial system will startle investors accustomed to the Fed’s presence in the market and the central bank’s easy money policies.

For this reason, this morning’s trading was decidedly choppy after investors saw the new government GDP data. Stocks cut a portion of their early morning gains, with Dow Jones industrial average futures rising 33 points. Nasdaq composite futures increased 9.5 points, and S&P 500 futures went up 2 points.

In corporate news, Verizon Communications VZ +2.71% shares were quickly trading hands after a report that the telecom giant had entered discussions with Vodafone VOD +8.02% to buyout Vodafone’s stake in Verizon Wireless, the key part of Verizon Communication’s business. Verizon Communications rose 7.8% to $50.

Campbell Soup CPB -3.09% fell 2.7% on disappointing quarterly figures. Other losers included Newmont Mining NEM +1.56%, which fell 0.5% to $31.20, and Lowe’s Companies’ 0.4% decline to $46.20.

Meanwhile, GameStop rallied 1.4% to $50.30.

Reach Abram Brown at

Posted August 30, 2013 by avinash2060 in Economy

Lateral hiring dips 6-10 per cent in Q2   Leave a comment

Bengaluru: Contrary to predictions of headhunters earlier this year, lateral hiring has been a non-starter in FY 2014. Flat to negative demand for lateral hires by IT services firms in the January-March 2013 quarter, which headhunters expected to be buoyant from Q1 (April-June) and to peak in Q2 (July-September) of FY 2014, has not turned out as expected.

“Typically in Q2, IT firms make the most number of offer rollouts to laterals with 3-7 years of experience. However, compared to Q1, IT hiring has seen a dip by about 6 per cent in Q2 ending September 30th” said Thammaiah B N, Director – IT Resources, of staffing firm, Kelly Services India.

“IT firms are making sure that they hire the right candidate at the right cost and have increased the number of interview rounds to shortlist the right candidate. Currently, each lateral hire has to go through 6 rounds of interviews as against the earlier 3-4 interviews that were conducted” he added.

Usually hiring requirements are intimated to headhunters at least three months in advance which allows them to estimate the hiring outlook for the current quarter.

Net hiring in Q2 is down by 10 per cent compared to the previous quarter and 20 per cent down over the same period last year, says Kris Lakshmikanth, CEO, Head Hunters India.

Concurring with Kris, B S Murthy, CEO of executive search firm, Leadership Capital pointed out that lateral hiring in Q2 FY 2014 is the lowest in the last three years. “While positions in Applications Development and Maintenance, Tech support, IMS, Testing,  Product support, ERP and CRM, constituting 60-70 per cent of lateral talent in the top five IT services firms; are being filled up, the just-in-time hiring model adopted by most IT firms has resulted in postponing hiring till candidates are required for new projects and deals” he said.

Demand for pre-sales & sales staff goes up The uncertain business environment in the US, UK and other international markets are compelling IT services firms to not only cut down on campus hiring by 50-60 per cent this year but also ramp up their pre-sales and sales staff to attract and bring in new business.

Hiring is very demand-focused in Q2, said Aditya Narayan Mishra, President Staffing, Randstad India Ltd. “There is a 10 per cent increase in demand for pre-sales and sales staff as well as for domain-specific functional consultants in Q2 over the same period the previous year, as IT firms get aggressive in winning new business and pursuing new deals.

Replacement hiring at the mid and primary levels will continue as usual with demand for project leads, tech leads and team leads. Moreover, this year will witness a boost in internal promotions as IT services firms will promote internal candidates to fill in existing vacancies instead of hiring expensive laterals from outside.

This will help to reduce cost of hiring and also serve as a retention measure” he said.Lateral hiring to pick up steam in Q3 on the back of deal pipeline The market sentiment over the past three months hasn’t been very positive, with no news of any large outsourcing deals being won in recent times, say industry observers.

“While the immediate market outlook is quite uncertain, we have strong indications from our interactions with the industry that Q3 (Oct-Dec) could buck this trend and we should get some good hiring numbers in. There are deals lined up in the pipeline and continuation of the current positive trend in the US market might see some of these deals coming through, resulting in hiring picking up again towards the middle of Q3” said Rajeev Menon, Senior GM MeritTrac Services.

Posted August 30, 2013 by avinash2060 in Economy

Why none of the experts saw India’s crisis coming??   Leave a comment

Jayati Ghosh asks this question and answer really is “This time is different” (though she does not mention the four word deadly phrase).

She points India had this thing coming for a while now and is a surprise why experts missed it:

These are all classic features of the panic phase of a financial market cycle. This doesn’t mean that a crash is inevitable, but clearly it is possible. The real surprise in all this is that investors and Indian policymakers are surprised. For some reason, they apparently did not foresee this turn of events, even though the story of every financial crisis of the past, and many in the very recent past, should have caused some nostrils to twitch at least a year or two ago.

The Indian economy has been in trouble for quite a while already, and only wilful blindness could have led to ignorance on this. Output growth has been decelerating for several years, and private investment has fallen for 10 consecutive quarters. Industrial production has declined over the past year. But consumer price inflation is still in double digits, providing all the essential elements of stagflation (rising prices with slowing income growth).

At the moment the external sector is the weakest link. Exports are limping along but imports have ballooned (including all kinds of non-essential imports like gold), so both trade and current account deficits are at historically high levels. They are largely financed by volatile short-term capital. This has already started leaving the country: since June more than $12bn has been withdrawn by portfolio investors alone.

This situation is the result of internal and external imbalances that have been building up for years. The Indian economic boom was based on a debt-driven consumption and investment spree that mainly relied on short-term capital inflows. This generated asset booms in areas such as construction and real estate, rather than in traded goods. And it created a sense of financial euphoria that led to massive over-extension of credit to both companies and households, to compound the problem.

Sadly, this boom was also “wasted” in that it did not lead to significant improvements in the lives of the majority, as public expenditure on basic infrastructure, as well as nutrition, health, sanitation and education did not rise adequately.

We should know by now that such a debt-driven bubble is an unsustainable process that must end in tears, but those who pointed this out were derided as killjoys with no understanding of India’s potential. Something similar is occurring in a number of other Asian economies that are also feeling the pain at present, such as Indonesia – while the Brazilian economy shows some similar features. The current Indian problems may be extreme, but they reflect what should now be a familiar process in all major regions of the world.

This paper shows how India’s 2003-08 boom was debt driven and not really funda driven..

Further Ghosh says all this has been shown extensively by Charles Kindleberger 50 years ago:

The typical story, which was elaborated half a century ago by Charles Kindleberger, goes something like this: a country is “discovered” by international investors and therefore receives substantial capital inflows. These contribute to a domestic boom, and also push up the real exchange rate. This reduces the incentives for exporters and producers of import substitutes, so investors look for avenues in the non-tradable sectors, such as construction and real estate. So the boom is marked by rising asset values, of real estate and of stocks. The counterpart of all this is a rising current account deficit, which no one pays much attention to as long as the money keeps flowing in and the economy keeps growing.

But all bubbles must eventually burst. All it takes is some change in perception for the entire process to unravel, and then it can unravel very quickly. The trigger can be a change in global conditions, or a sharp slowdown in domestic income growth, or political instability, or even economic problems in a neighbouring country. In India Ben Bernanke of the US Federal Reserve is being blamed for bringing this on, but it could easily have been some other factor. Once the “revulsion” in markets sets in, the very features that were celebrated during the boom are excoriated – by both investors and the public – as examples of crony capitalism, inefficiency and such like. The resulting financial crisis hits those who did not really benefit so much from the boom, by affecting employment and the incomes of workers.

This is what has just started to happen in India, and is also likely to happen in several other emerging markets. But essentially the same process has already unfolded many times before in different parts of the world: Latin America in the 1980s, Mexico in 1994-95, south-east Asia in 1997-98, Russia in 1999-2000, Argentina in 2001-02, the US in 2008, Ireland and Greece in 2009, and so on.

So how come experts missed it..Well it was the four word phrase and plenty of others which have been coined in last 4-5 years..

There is also an interesting piece by Arvind Subramanian and Devesh Kapur pointing to reasons for the crisis, They call it India’s Unique crisis which does not resemble any of the previous crises. Not really..small things have added to make it a big story.

What India is going through was unimaginable even a few months back .  And one key reason is complacency shown by both politicos and its expert economic advisers. Some newspapers have highlighted that the same team was present in 1991 crisis as well and this can help today as well. It has been 22 years since the 1991 crisis took place and we still have the same team? Is that a sign of confidence?

Time and time again we have been told things will be fine only for them to become worse. The one thing that comes to mind is inflation. This is one thing in which government has failed successively for many years now. Each reading we are told it would be brought lower. Focusing on WPI inflation, there was some decline in 2012-13 but CPI was twice of WPI. All know it is CPI which matters to public but has been ignored.. Food inflation remains high despite good monsoon, bumper crops etc.

They are all hooked to India’s 8-9% potential growth (which they still are), The belief was India can achieve it without any work at all. It was just magic which was bound to happen.. Only to realise it was just cheap magic tricks which was to be discovered soon….I mean Africa has always had potential all these years but keeps disappointing on its growth outlook..

Though this blog has always questioned the India growth story and firmly believed that it was because of unique global factors that we achieved 9% growth in 2003-08. What was the big deal when most countries achieved higher growth rates during the period? Moreover, it was not macro data which still looked good a couple of years back but the steeply declining quality of life in India. It has become really depressing to live in India’s top cities which have become hells. The story is no better in smaller places as well. People are struggling to get basics at a reasonable price and low transaction costs. Governance has failed to deliver basic public goods and people have created their own parallel informal systems which create/will create further problems..

This blog has written enough on all this and do not want to spoil the rest of the evening on this…

This blog actually proposes to invite all the honorary econ experts to testify in Indian Parliament like they do in other countries. Though for this the Parliament needs to function first! People need to get a perspective on what was going on all this while and why we have managed to reach here despite the potential? Why they have they remained silent on key issues like NFSB and instances of where they highlighted the risks if any.. There should be far more accountability to these key positions and need for a serious debate than simply giving newsbytes on TV channels…


Posted August 28, 2013 by avinash2060 in Economy

Rupee Was Bound To Fall   Leave a comment

When dithering government meets activist courts,it spells trouble for the economy

The Indian rupee has been driven to a new low of Rs 65 to a dollar,largely by the uncontrolled current account deficit and the decline in economic growth.RBI and the finance ministry are now running helterskelter. But their attempts at controlling the exchange rate appear to be measures that treat the symptoms rather than the disease.Governments knee-jerk measures included restricting what individuals can spend outside the country from $2,00,000 a year to $75,000 a year.As stock markets reacted adversely the following day,government said don’t panic!

The rupees recent decline might appear sudden but it hasn’t really come as a surprise to keen observers.This crisis has been building up for a long time.For years,successive governments have relied on capital inflows to balance the CAD and support the rupee.In the past,fortunately,the capital has come in.During 2003-08,capital inflows averaging $45 billion per year easily wiped out the up to $15 billion CAD and exerted upward pressure on the rupee.But they have dried up since then,and the government is now appearing powerless to rein in the CAD to its target of $70 billion for FY14. The global economic crisis hasn’t helped.In fact,the Indian economy has managed to hit the perfect storm: the government has been twiddling its thumbs,so the courts have shown an unprecedented inclination towards judicial activism.

While dithering on matters of economic policy,government has chosen to focus on unaffordable doles and subsidies.The latest in that trend is the rather ambitious food security Bill.Its cost is expected to be in excess of Rs 1,00,000 crore.God alone knows if the intended benefits will actually reach those for whom they are intended,as the malfunctioning of the PDS scheme is well known.Meanwhile,the prolonged regulatory process of environmental clearances and the difficulties in land acquisition have made industry rethink new projects.The economy has been drifting directionless,with many delays in much needed economic reforms and without incentives for FDI.
Largely compelled by government lethargy,the Supreme Court has been intervening in policymaking.This has resulted in further regulatory uncertainties for investors.Sectors ranging from telecom and mining to pharma and real estate have been left shaken.

In the coal sector,India has some of the largest reserves in the world,of around 300 billion tonnes.Yet,its expected to import 82 million tonnes of coal in FY14.With an average price of $100/t,the bill will total to around $8 billion.It was with the very aim of tackling such shortages that successive governments had chosen the policy of captive coal block allocations,instead of taking the auction route.With Coalgate simmering inside SC,and outside,its now unlikely that coal production will rise in the near future as both government and investors will dither in taking initiatives.Why would an investor choose to develop a captive coal block if the court or the government is likely to de-allocate the same And why would someone develop any power intensive project associated with a coal block

In the case of natural gas,not only is the KG-D 6 basin producing only a fraction of the projections,the matter of pricing this gas has also landed in SC now.

Even worse is the curious case of iron ore mining.SC had imposed a prolonged ban on mining in Karnataka and has now imposed one in Goa,in response to PILs alleging illegal mining.It has also imposed restrictions on exports.The loss in potential export earnings since 2010-11 is estimated as being at least $17.5 billion.This apart,thousands have been rendered jobless.

As well intentioned as the actions of SC may be,industry and economy now exist in a state of constant uncertainty,which also demands from them lots of patience as a final resolution of PILs can take years.What a pity that a country with the worlds largest resources of iron ore has now turned into a net importer of iron ore!

Even the star of Indias rise in the last decade,the telecom industry,is now in doldrums on account of the double whammy of ever-changing regulations and consequent SC actions.Telecom received cumulative FDI of Rs 58,782 crore in the last 13 years,which accounted for 7% of the total FDI inflows into the country.FDI in the entire telecom sector,which includes radio paging,cellular mobile and basic telephone services,plunged 81.64% in 2012-13 to Rs 1,654 crore.Since SCs 2G scam decision,only a very brave foreign investor would venture to put his foot into what could be a legal landmine.

Numerous road projects of NHAI have also been stuck for years for want of environmental clearances.In December 2012,GMR Infrastructure terminated a concession agreement with NHAI for a 555-km Kishangarh-Udaipur-Ahmedabad project due to delays in environmental clearances.Following this,NHAI had to move SC to delink environmental and forest clearances for its road projects.
We can go on citing instances,as industry after industry in India is reeling under the vicious circle of government inaction (or corruption) and unprecedented judicial activism.Unless controlled,this cycle could spin into complete doom.

The writer is a senior advocate at the Supreme Court and a former Additional Solicitor General.

Even the star of Indias rise in the last decade is in doldrums 

Posted August 26, 2013 by avinash2060 in $tock World, Economy

Promoters’ holding on the decline in Infosys   3 comments

The famous promoters of Infosys have steadily been reducing their stake. The combined promoters holding at the end of March 2012 in the index heavyweight stands at 16.04 per cent. They held 28.72 per cent stake in March 2002.

During the period, the Rs 5-paid Infosys jumped from Rs 256 (after adjusting for bonus and stock split) to Rs 2,402. It had hit a life-time high of Rs 3,499 last year. The company had given 3:1 bonus (three shares for every one held) in 2004 and a 1:1 offer in 2006. The company had hit the capital market in 1993.

Quite prevalent

Reduction of stake is quite prevalent among its promoters. From Mr Narayana Murthy to Mr Nandan Nilekani to Mr Gopalakrishnan and their family members, all have reduced their grip in the company.

Interestingly, Mr N.S. Raghavan and his family members have quit the company completely to pursue their own interest. They were holding about 4.85 per cent stake in Infosys. Mr Narayana Murhty launched Cataraman Ventures, a venture capital fund to help start-up companies.

Even as promoters cut stake in Infosys, foreign institutional investors and domestic institutions have reposed their faith in the company. Interestingly, FIIs holding at 39.02 per cent, is more than double that of promoters group. In all, 928 FIIs have exposure in the company. They held a stake of 36.59 per cent in 2002.

Mutual funds’ holding in the stock currently reduced to 4.69 per cent (from 7.39 per cent in 2002), while that of insurance companies increased to 11.83 per cent (2.03 per cent).

Retail investors, including HNIs, have largely maintained their holding to around 13 per cent.

Posted April 14, 2012 by avinash2060 in $tock World, Economy