Make in India- More than just a slogan

This article was published in Indiansinkuwait.com  

1,060,000,000

That’s how many results you get when you search for the term “Make in India” in Google! That’s more than Lingaa (About 4,520,000 results), the recent Rajnikanth starrer!.

After years or decades of mis-governance or no governance, India is now in a difficult position to make up for the lost decades. The new Modi government is now tasked with creating the right atmosphere that can bring the most important thing back to India i.e., CONFIDENCE! This is what is currently lacking among investors, public and other affected parties. The global turn of events is not making that task easier.

One of the key tools to bring that confidence back is the announcement of “Make in India” concept. Media and other global and local thought leaders were quick to dismiss this as a gimmick that will not work in real time. The term may sound familiar to people aged 50 and above as we have heard “Made in India” campaign by Indira Gandhi way back. There is difference though. Made in India is a label (like Made in China) while Make in India is an invitation. An invitation signals strong intent more than a label. The initial idea of Made in India was a concept oriented towards import substitution while Make in India goes beyond that to capture export market as well.

While the full details of this Make in India campaign can be found in the well-designed website(http://www.makeinindia.gov.in/), we should focus on the following in order to appreciate this concept:

1    .    Why should we “Make in India”?

2    .    What should we “Make in India”?

3    .    To whom should we  “Make in India”? &

4    .    How should we “Make in India”?

Why should we “Make in India”

Simply because we are not manufacturing enough! India’s share of manufacturing in the GDP is an abysmal 14%, lower than even countries like Vietnam, Pakistan, Bangladesh, etc. leave alone China which is twice that share. We need to create one million jobs a month and this can be done only by favoring manufacturing. Job creation is the single most important challenge for a young economy like India where a swelling middle class struggles to cope with ever increasing inflation. Apart from the need to create jobs, we should make in India due to cheap labor cost which is half that of China, the main competitor.

What should we “Make in India”

China has swamped the world and India with its cheap products. Today, there is no product category where Chinese are not competing with low cost alternatives. However, as Chinese exhaust this option and would want to move higher up in the value chain, it may open up huge opportunities to other aspiring low cost producers like India. The list of opportunities is huge ranging from automobiles, aviation, biotechnology, construction, chemicals, defense, food processing, leather, pharmaceuticals, etc. The idea of “make in India” need not be understood to be only manufacturing centric alone. It can also include service sector like IT, Media, tourism, Hospitality, Wellness, etc. Only imagination can be the boundary to answer this question.

To whom should we “Make in India”

This is a tricky question. Recently our RBI governor Raghuram Rajan, while lauding the Make in India initiative, argued that we should Make for India than Make in India. His simple suggestion is, given the weak global condition, the world may not need one more low-cost producer. Hence, it may make sense to focus on the huge domestic market before we focus on the export market. In my opinion, both the options are not mutually exclusive. Hence, we can pursue both to provide for the domestic as well as export market. Exports enable India to earn precious foreign exchange and can enhance our global prestige.

How should we “Make in India”

This probably is the most important question. A mere intent to make in India will not take off unless we put together the enabling environment conducive to make in India. The enabling environment is dependent on four key factors of production i.e., land, labor, capital and power which should be augmented by removing the regulatory burden and red tape surrounding it. Several layers of reforms are required to fix each of these four legs. For e.g., it is very difficult to obtain an agriculture land for industrial use and hence pose problems to start an industry. Secondly, we should make sure that if not all, most of the states in India should equitably participate in this make in India mission. Today, only 5 states (Maharashtra, Gujarat, Tamilnadu, Uttar Pradesh and Andhra Pradesh) account for 56% of manufacturing activity leading to wide gulf among Indian states. The make in India activity should have a plan to reduce this gulf and promote wider activity across all states to lift India successfully to the frontline.

India is a huge market with a large demography with a burgeoning middle class with high ambition. Indian citizens deserve better education, healthcare, infrastructure and an able society that is seen by the world as the harbinger of knowledge and culture. This is by no means an easy task and Make in India is certainly a good beginning.

Let us make it happen!

Jai Hind!

INVESTING IN NEW REALITIES: GCC CHALLENGES

This Article was published in Arab Times, Akhbar Al Khaleej, Gulf News, Alqabas

The year 2014 will count to be a momentous year for the GCC region. The year witnessed both a strong rally in the stock markets during the first five months followed by bloodbath during Q4 2014, thanks to oil price swings and its pass through effect. As we enter 2015, there is lot of panic, trepidation and uncertainty. What this means for investing?

In panic, it is always possible to miss the big picture. And the big picture is quite strong. Years of strong oil price has enabled GCC economies to increase spending and build reserves. Saudi Arabia, being the largest, can serve as a proxy to study. Contextually, it may be relevant to compare three time periods to appreciate the big picture i.e., 1998, 2008 and 2014. During the last 15 years, the region witnessed three inflection points where it has braced the lowest oil price (1998), suffered collateral damage inflicted by the global financial crisis (2008) and experienced steep oil price decline (2014).

KSA	1998	2008	2014
Oil Price (Brent, $/bbl, average)	13.04	98.3	106.1
BEP ($/bbl)	20.4	57.6	94.8
Fiscal Balance as a % of GDP	25.90%	29.80%	5.60%
CAB as % of GDP	-9.00%	25.60%	15.30%
Govt Spending- Current Exp (USD bn)	45.7	103.8	179.0
Govt Spending - Capital Exp (USD bn)	5.0	35.1	80.4
Index Level (Tadawul)	1,413	4,803	7,905
Stock Market Cap (USD bn)	42.7	247	422
GDP (USD bn)	146	520.5	764.1
M.Cap/GDP	29.2%	47.5%	55.2%
Turnover velocity (tot value traded/avg. m.cap)	26.9%	137.8%	119.9%
Population (in million)	19.51	25.79	30.67
GDP / Capita (USD)	7,483	20,182	24,914
Foreign Reserves (USD bn)	46.9	442.2	793.2
Source: IIF, World Bank

However, compared to 1998, the GCC region is today well poised to weather any storm given the large surpluses that it has built during this period. Saudi Arabia’s foreign reserves at close to $800 billion is nearly 17 times larger than what it was in 1998. The period marked an increase in the overall economy (GDP) and the attendant increase in stock market capitalization and liquidity. During this period, the population has also increased. However, the GDP growth outpaced population growth resulting in higher per capita. It may be interesting to focus on spending for Saudi Arabia. From a modest $50 billion in 1998, overall spending increased fivefold to $260 billion. In this, the current expenditure increased by a factor of 4x while that of capital expenditure increased by 16x. This probably explains the lower fiscal balance today compared to earlier inflection periods.  The stock market soared from an index level of 1400 to 7900 though in the interim it reached 20,000! Measured in GDP terms, the market cap/GDP ratio is still a modest 55% providing room for significant market cap expansion.

The growing demographics punctuated by young population is triggering demand boom for several goods and services including banking, telecom, housing, retail products and capital goods. Increase in current expenditure has unleashed a consumption boom while increase in capital expenditure has resulted in infrastructure spending focused on power, roads, aviation, water, ICT, education and healthcare.

The period also marked significant developments on the regulatory aspects with several countries including Saudi Arabia launching independent capital market regulators to modernize the capital markets and attract new players. Several other sectors like telecom, insurance, etc also witnessed launch of independent regulators.

However, the economic and investment expansion is not accompanied by improvement in business environment as reflected by the WEF ranking on various parameters. While performance on issues like starting business, infrastructure and access to loans were better, critical parameters like ease of doing business, health and primary education, labor market efficiency and capacity to retain talent deteriorated from 2008 to 2014.

Saudi Arabia - Ranking on a Global Level	2008	2014
Ease of Doing Business	23	49
Number of Days to Start Business	30	20.5
Number of Procedures to Start Business	34	9
Health & Primary Education	51	50
Infrastructure	41	30
Labor Market Efficiency	63	64
Ease of Access to Loans	39	27
Country Capacity to Retain Talent	16	22
Source: World Economic Forum –Global Competitiveness Report 2008-09 & 2014-15 Note: 2008 ranking is based on 134 countries, 2014 ranking is based on 144 countries

The GCC economies must therefore prepare themselves for oil price swings and should use their enormous reserves to rapidly diversify their economies by improving the business environment. While the big picture is very strong thanks to years of strong oil price, GCC needs qualitative change in the global rankings to tap the vast potential in several key sectors including banking, telecom, infrastructure and services. Improvements in these indicators call for a variety of reforms at various levels and their successful implementation. They should form the Key Performance Indicators (KPI’s) for the relevant ministries. The need to accelerate reforms and diversify the economy is acute given the ever increasing break even oil price required to balance the budgets of GCC economies. This then  is the new reality!

The Power of Net working

This article can also be read at Linkedin

It’s not just for marketing people to be well networked. It applies to every profession, in every community. Networking implies enabling active interaction among people that you can connect in order to receive and provide knowledge. It is important because it can make a huge difference to your career, will enable you to come in contact with people that you can appreciate, can build very crucial bridges in your life and it can make a world of difference when things challenge you on many fronts. However, there are many road blocks to effective networking. The question is how to overcome them and effectively network?

The first rule is ‘Overcome hesitation’ – Many a times, we are very hesitant to really make an acquaintance with a stranger, saying Hello!! or writing a small memo introducing yourself. There is the hesitancy in us to really make that first phone call or write that first email. But if you overcome that hesitancy you can feel that you are much more comfortable in terms of how you start building your network. This is the first and most important step that one should take by overcoming hesitation.

The second important thing is ‘Don’t hesitate to ask for advice or opinion’. People really respect being asked for opinion. We always have a very high level of tendency to talk more and listen less. Just reverse the process, make your contacts talk more and provide yourself the opportunity to listen.

The third aspect to Networking is ‘Perseverance’. Don’t be afraid of dead ends. They happen all the time. Not every step that you make towards building your contacts and networking can result in a success. It doesn’t mean that you should give up your networking efforts. We should just put behind those things that doesn’t work and keep moving with the single objective of building effective networking.

The fourth important aspect is when you network, try to follow very basic etiquettes. Thanking a network that just got connected with you is a basic requirement. If you have approached a particular person for a particular aspect, keep him posted about subsequent steps that you take. This will really help them appreciating you in the long run. People do remember small things.

The fifth important aspect is, ‘Don’t restrict your networking group to your professional job colleagues’. It’s a huge temptation to really reach out and build your network only among your job colleagues. It is important to expand your network to your ex colleagues, to your friends, to your educational acquaintances and to a host of other people that can really widen your perspective.

And finally, use social media for building your networks. Among the most popular social Media today, LinkedIn counts as the most important tool for building professional network. You can be very effective by being an active LinkedIn member. You can browse people of repute and request them to connect with you and keep actively engaged in the LinkedIn by contributing to occasional articles, share updates and appreciate people when they move on to something very important. This is the most effective method of networking and it is freely available and people should make full use of this powerful engine.

Happy Networking!

Don’t be that Leader!

This article was published in Marketexpress.com

Who is a good leader?

You must have asked this question to yourself countless times. How to become a good leader, how to spot a good leader, how to engage with a leader, how to learn from a leader, how to change our leader,….In our professional and personal lives, we must have dealt with at least one of the questions listed above.

Hence, leadership is an issue even if you are not the leader. In our day lives, we have to encounter situations of either having to lead or being lead. Leadership lessons can come from anywhere. Here are three scenarios that I would want to analyse but with no guarantee of any conclusion:

1.       Be that Elephant

2.       Be that Dhoni &

3.       Be that Ravikumar

Be that Elephant

From Harvard to Mckinsey, many have analysed leadership lessons from elephant herd. Much against the conventional wisdom in the animal world that the mightiest and fiercest makes it to the leadership throne, the largest of all animals (elephant) place age and wisdom as priorities for becoming the leader of the herd. The elephant herd usually is a large family with several members. However It is usually the oldest matriarch that is crowned as the leader clearly showing emphasis on experience, wisdom and knowledge. Unlike the lion kingdom where it is the strongest male lion that adorne the leadership mantle, why is the emphasis in the elephant herd more on age and wisdom ?

Elephants have become good case studies for leadership primarily because the matriarch leader is known for the following: can enable survival of the herd through intelligent decision making, is compassionate, provides inspiration, excellent in cooperation, highly effective communicators, and possess knowledge and wisdom assimilated over years of observation. For want of space, let me expand on one trait i.e survival. The key to survival for elephants is to remember water holes during drought. In search of water, the herd walks thousands of miles and here is where the key is. One wrong estimate and the entire herd would be walking the wrong path where the result is normally nothing but death. It is for this reason experience, memory and wisdom is given more priority than other attributes to select a leader. Normally the matriarch is 60+ when she takes over the leadership role. The buzz words highlighted exclude terms like aggressive, authoritative, and innovative; normally used otherwise to describe a leader.

Be that “Dhoni”

 "A Leader Should Know How to Manage Failures” This is what Dr. APJ Abdul Kalam once said about leadership and Mahendra Singh Dhoni is a great example of that. He ruled Indian test cricket for a long period of time (2005-2014) in spite of having the worst overseas track record (only 20% win).

  

“Dhoni” The Captain
	Matches	Won	Lost	Drawn	% of Win
Home	30	21	3	6	70%
Away	30	6	15	9	20%
Total	60	27	18	15	45%

He is the third highest in the number of international matches played (Kumar Sanghakara being the highest), fifth in terms of all-time dismissals (Mark Boucher being the first), 11^th highest run scorer in test match (Sachin Tendulkar being the number one), third highest run scorer among “wicket keeper captains” (Adam Gilchrist being the top). No firsts anywhere, but still ruled Indian test cricket for 10 long years and retired on his own terms. How was that possible?

Firstly, he showed tremendous composure under extreme pressure, a trait much needed in what has turned out to be an extremely competitive game. No wonder he was described as “Kaptain cool”. Secondly, in a game where traditional stalwarts held on to their positions more on their past track records than on current performance, he reposed faith in young talents much against conventional wisdom. Thirdly, he takes the blame in failures, and credits his colleagues in successes. And like how Abdul Kalam said, he learns from his failures.

Be that “Ravikumar”

Who the hell is he? For those not familiar with Tamil film industry, this should be a natural reaction! However, K.S. Ravi Kumar, is arguably one of the most successful, highly sought after film maker of the Tamil film fraternity. He has directed more than 40 films, worked with all leading names (Rajnikanth, Kamal Hasan, etc.), and has been an iconic film maker for the last 25 years. While most of his films are major hits, the notable among them is the Rajikanth starrer Muthu, which became popular even in Japan. Film making (director) is arguably the most intensive profession where your leadership skills are put to extreme scrutiny. While a typical corporate CEO has at least 3-4 years to prove his leadership mettle, here the name of the game is success and success alone all tested in a few months span. Hence, to rule such an intensely competitive industry for 25 long years is not a joke. What sets K.S. Ravikumar apart?

    •        All his movies are produced with a commercial format in a masala genre with the typical themes of action, comedy, sentiment etc (stick to your core competency)

    •        His team of writers and assistants are the same (be loyal to your team)

    •        Renowned for his quick schedules and prompt completion of his projects (efficiency)

    •        Stays within his budget allotments (efficiency)

    •        Always works with established actors than new comers (don’t take risk with others money!)

    •        Rescripts the plot to suit the lead actor (be adaptive)

    •        Highly temperamental (show authority where required)

Does this not read like a corporate scorecard for the most successful managers? In a recent interview, when queried about the secret of his success, he said none of the above. Rather he quipped “concentration” as the mantra.  He opined that once you concentrate completely on the task on hand, everything else follows!

Leadership is not a science for us to derive exact rules that can work. We have seen here three very different situations where different lessons can be learnt. Examples of good leadership can come from unexpected places, but the lessons are precious.

Wishing you a great 2015!