Innholdsfortegnelse for October 25, 2015 i Business Today

According to statistics put up on the CEA website, at the end of May 2015, a total of 19,706 villages remained to be electrified in the country. These are the villages that have no electricity connections at all. There are probably double the number of villages that have some sort of electricity line passing through them, but where the houses have no power connection. And an even larger number of villages where homes might have a power connection, but do not enjoy more than an hour or two of electricity at best any day. Even bigger towns and big cities often have many areas that see power cuts for seven to eight hours a day. The current estimates are that some seven crore households and about 28 crore people in…

“My name is Raghuram Rajan and I do what I do” After a surprise cut in the policy rate by 50 basis points, the central bank governor had to deal with questions from the press corps, some of whom called him Santa Claus while others hinted that he was a monetary hawk at heart. Rajan said that he was neither – he just did what he thought was right. Reportedly, his children did not like his quote though... BEHIND EVERY SUCCESSFUL MAN IS HIS MOTHER The prime minister got emotional at the Facebook headquarters while describing how hard his mother worked to raise him. The Congress party insisted that Modi’s mother devotion was a bit of a sham, given that he did not invite his mother for his swearing in…

Commodity market regulator Forward Markets Commission (FMC) was merged with the Securities and Exchange Board of India (Sebi) on September 28, 2015. The move was directed towards infusing confidence in the commodity market, which had collapsed after the 5,600- crore National Spot Exchange (NSEL) scam broke out in 2013. This is good news for commodity investors. Sebi has the resources to bring in people and develop the required infrastructure to improve the functioning of the commodity market and work on its expansion. However, it would not be an easy task for Sebi to give equal attention to both securities and commodities as the market operations differ in many ways. The biggest challenge for Sebi Chairman U.K. Sinha is to arrive at a fair price in the absence of a spot…

No more following At a time when every platform is adding on a social feature or two, photo sharing app Storehouse is running the other direction. It has dropped its newsfeed and no more follows, likes or timelines will be seen on this app. “People are craving authenticity and real connections more so now than ever before,” Mark Kawano, CEO of Storehouse said in a statement. It will henceforth focus on story creation through a new feature called Spaces. Now, a user can share features with a group of friends privately only through a link. Will the 1 million users of the app like this ‘antisocial’ twist? Nescafe Tumbls! In a bold gamble, food giant Nestle has decided to convert its Nescafe.com website into Tumblr blogs. All content on Nescafe’s…

If there is one electoral promise that the Indian voter is unlikely to pardon the Narendra Modi government for non-fulfilment by the next Lok Sabha elections, it will probably be ‘power for all by 2019’. It’s an emotive issue. It evokes anger when it affects children’s preparations for exams or is the cause of ‘dark’ weddings of brethren and that botched surgery because of power failure – all very harsh realities. Four years down the line, the electorate will assess the government not on whether the target has been achieved on paper, but on ground. Rhetoric will have to give way to reality and targets to execution. Successive governments have played with these emotions of the electorate without actually delivering on the promise. India – the world’s third largest producer…

By Robin Banerjee SAGE Publications Price: 475 This book presents a comprehensive perspective on the frauds and scams that pop up in the corporate world. BUSINESS BESTSELLERS* Zero to One By Peter Thiel Random House Price: 499 Thinking, Fast and Slow By Daniel Kahneman Penguin Price: 499 The Mastery Manual By Robin Sharma Jaico Publishing House Price: 199 Arise, Awake By Rashmi Bansal Westland Books Price: 200 Elon Musk By Ashlee Vance Virgin Books Price: 699 *Top books by sales for 30 August–12 September, 2015; Includes only books released after July 1, 2014; Information provided by…

15% India’s retirement assets to GDP ratio, is well below that of the US (80%) and Japan (65%), but better than China’s (5.5%) As you move through your 20s, 30s and 40s, caught up with jobs and families, it is very easy to put off your retirement planning. For most people, retirement planning usually comes at the end of all their financial goals. According to Sundeep Sikka, CEO, Reliance AMC, we still have an old mindset about planning our retirements. “The 30-30 rule of thumb says an individual earns for 30 years, to provide for the 30 years of post-retirement life, where the individual’s income would have stopped. Yet the need to maintain a similar life style exists,” says Sikka. People usually start saving for retirement when they are nearing…

Black Money Act a Mere Eyewash This refers to your cover story on black money (White Money, Black Money, Grey Money, October 11, 2015). It would be naive to imagine that a mere Act can help the government bring back all the black money to the country swiftly. I believe that this issue has been given undue coverage and attention, especially in the wake of Prime Minister Narendra Modi promising `15 lakh in every citizen’s account if he was voted to power. Black money does not work in isolation; as the story shows, it is not only impossible to track, but even more difficult to indict people for holding it. For the past six decades, governments of various countries have helped build the system of black money. How does one…

PUTTING HEADS TOGETHER WHAT: Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund. WHEN: October, Lima, Peru WHAT TO LOOK FOR: Brainstorming sessions on the challenges ahead for the global economy. Nearly 16,000 participants from 188 countries will descend on the Latin American city for the meetings. MERKEL IN INDIA WHAT: German Chancellor Angela Merkel visits India WHEN: October 4-6 WHAT TO LOOK FOR: Intergovernmental consultations to strengthen bilateral cooperation in areas such as green energy, smart cities, infrastructure development, skill development, clean river projects, etc. TOWARDS A GREENER PLANET WHAT: Eye on Earth Summit WHEN: October 6-8, Abu Dhabi WHAT TO LOOK FOR: Before the climate talks on tariffs in November, it is a good opportunity for countries to understand the…

3.19 lakh crores is the total loss of Indian power distribution companies 25 basis points additional borrowing may be allowed to states that commit to reduce these losses 78% revenue collection rate of Uttar Pradesh is one of the lowest in the country 40% of Rajasthan’s electricity supply goes to farmers; this is inefficiently priced 20.9% was the average tariff hike by eight troubled distribution companies in 2012/13; the figures were 8.9% and 7.6% in 2013/14 and 2014/15, respectively 5.90% of the total loan portfolio of banks is non-performing assets; the power sector is one of the biggest contributors to this 276 GW is the total installed capacity in India 59.6% is the plant load factor of India’s thermal power plants in peak summers 1,010 units was the country’s per…

1.03 lakh Number of branded hotel rooms in India Palaniswami Mudaliar, 29, is a senior programmer at a data analytics company in Pune. He visits his parents at his sister’s house in Coimbatore every two months. On each visit in the past, he felt he was inconveniencing his sister’s family, which lives in a two-bedroom apartment. Then he discovered Stayzilla, an online marketplace for budget hotels. “I got a good room for 1,200 and managed to enjoy quality time with my family, without having to sleep on the sofa,” he says. Or Harish Krishnamurthy. When his house in Bangalore was being fumigated, the family decided to shift to a hotel for the night as they had a nine-month-old baby. “The pest control guys said we could stay, but as my…

For those who are sceptical about the pace of economic reform in the first 15 months of the BJP-led government, the Prime Minister’s assertions in favour of reform on his recent trip to the United States of America ought to have been a very pleasant surprise. Not only did the PM reiterate his old pledge of getting the government out of the business of doing business he added deregulation as the fourth ‘D’ (after demography, democracy and demand) in his vision of an 'attractive for investors' India. The challenge now is to translate that rhetoric into reality on the ground. Investors will commit their goodwill in response to the right words but will only commit their money when they see changes for real. If Modi’s team responsible for converting his…

A Higher Calling After spending close to two decades in setting up the private hospital chain Fortis Healthcare, the company’s co-founder Shivinder Singh has decided to step down from the post of executive vice-chairman and take up a different role. Singh will now be serving full time at the Punjab-based spiritual and philosophical organisation Radha Soami Satsang Beas. Singh, along with his elder brother Malvinder Singh, sold his 35 per cent stake in Ranbaxy to Japan’s Daiichi Sankyo in 2008 for a hefty sum. Over the years, Fortis has grown its presence. It now has 54 healthcare facilities and some 10,000 beds and 260 diagnostic centres. Prior to their stake sale in Ranbaxy, Singh brothers were running the company, one of the country’s pharmaceutical giants at the time. Controversial Ambassador…

These are difficult times. Over the last several weeks, we have seen enormous volatility. What is going on? Is there a reason for investors to be worried? The concern is for traders and not investors. Traders who took three-six months, one year or intra-day calls have lost money. For investors, it’s an opportunity to buy shares at 15-20 per cent less than what they were available for some time back. Trader should definitely worry about how to survive and make money in this volatility. Investors should not worry. The correction was partly driven by global factors. Last year, a lot of money came from foreign institutional investors, or FIIs, primarily exchange-traded funds or ETFs. These were the funds which retail investors buy and they took a bet on emerging markets.…

Now that the hullabaloo over handing encryption codes to the government has died down, it’s time to look at the encrypted social media landscape. Data is gold for digital thieves and hackers. Which is why all information, be it sensitive messages or inane chatter on social media, is encrypted – with the code usually in the hands of the service providers. The Indian government in its draft encryption policy wanted the service providers to hand over this code, which led to a great furore. Imagine if the code fell into the hands of hackers. It was a rather ironic move from the government considering that globally there is a move towards greater and greater encryption and privacy protection. Earlier this year, for instance, saw the launch of Minds.com, a heavily…

High tech is moving mainstream. The academic subject of artificial intelligence is powering computers that not only drive innovations in a variety of industries, but can also ‘learn’ on their own and evolve. Robots that look much like humans, and do as humans do and beyond, are becoming increasingly real. Wearable gadgets such as smart watches, glasses, bracelets, shoes, socks, etc., have moved from the realms of fantasy novels and sci-fi movies to our everyday lives. And drones have moved beyond army men spying on the enemy to authorities using them to track survivors in natural disasters. In an age that is redefining what technology means to humans, we take a look at the ones that are impacting our businesses and our lives, the most. Wear me: Gadgets that wrap…

Rainbow Hospitals, a leader in the multi-specialty paediatric hospital segment with 700 beds across six locations, was just a 50-bed entity since its inception in 1999 till 2007. Between 2007 and 2014, however, it added 650 beds. And, over the next three years, it plans to add another 450. Mumbai-based Surya Child Care, which has been around for 30 years and is headed by Dr. Bhupendra Avasthi, has 300 beds, but wants to double this number in the next one year. The two are part of a larger trend in the healthcare industry. As private hospitals catering to all age groups are struggling to maintain profitability, hospitals for children are emerging as a big business. After taking several baby steps for over a decade-and-a-half, the leading players in the segment…

The Lloyd Business Today Pro-Am of Champions Golf tournament, now in its 20th year, announced a slew of initiatives to further promote India's most prestigious golf tournament. For the first time, this corporate golf tournament will be played across seven cities, beginning with Ahmedabad and ending with the National final in Delhi on March 12 and 13. The tournament is an exclusive invitational event for CEOs and corporate heads across India with over 800 top executives and CXOs participating in the event. The regional rounds will have the top CEOs compete with one another at some of the finest golf courses across India. To make the participating executives get even more competitive, the tournament format has been tweaked to introduce a team championship. This will see the best team from…

In the last few months, I have read few physical books; fewer at a stretch. But this book is an exception: I started and finished it in one stretch. Not only because this book is about something I am truly passionate about - running - but also because the book talks about everything I, or any other passionate runner, experiences and believes in. I have known of Rahul Verghese of course. He is a fellow marketing professional who has logged in over 25 years at places like Unilever, Nestle and Motorola. But this book gives the reader a completely different perspective of the person and his character. A late entrant into running, Rahul started running to fulfil his dream of running a marathon. The first marathon must have been the…

How has the competition impacted your business? Competition has helped us improve our standards. However, by virtue of their pricing, they target only three per cent of India’s population. We want 30 per cent of India’s population to be our guests. Ours is an aspirational brand. We continuously do research to ensure that all our products taste the same across all our stores. What has been the most important lesson? Standardisation. Earlier, we used to source the ingredients for our beverages and food from 210 suppliers. Now, we have come down to four. We used to put ice-cream in our cold coffee and each ice-cream supplier’s taste and fat content differed. Now, ingredients for all our cold beverages are manufactured at our central base in Bangalore. How and why did…

Equities, as we all know, are subject to market risk. But is your fixed-income investment risk-free? The answer is no. Debt funds, for instance, are subject to interest rate risk and credit risk. JP Morgan Asset Management Company’s recent move to cap redemptions from its two funds reveals the risks even investors in debt funds face. These two funds are JP Morgan India Treasury Fund (assets under management, AUM, of 2,311 crore) and JP Morgan India Short Term Income Fund (AUM 450 crore). The redemption cap is one per cent of units outstanding in each scheme, on a first-come-first-served basis. Units that don’t get redeemed on the day the application is filed will be considered on the next business day, subject to the approval of the mutual fund and its…

Up and down is the new norm for financial markets. Therefore, investing in a mix of products has become all the more important, to ensure that your portfolio is not adversely affected if a certain asset class is down. For example, the past five-year figures show that gold has given only five per cent returns over the period. Similarly, if you invest all money in real estate you might face difficulty in liquidating it in case you need the money on an urgent basis. The same goes with the stock markets. It is, therefore, important to diversify your portfolio with part of your investments going in safest options such as bank fixed deposits (FD), post office schemes and Public Provident Fund (PPF). The newest entrant to this market is tax-free…