After Modi, who?

If the Gujarat Chief Minister moves to Delhi after 2014, there are a number of contenders for his job in the state but for the moment, they are quiet. Arnold Christie draws up a list

In the throes of his victorious Long March more than six decades ago, China’s great helmsman Mao Tse Dung was richly aphoristic “a great revolution requires a great party and many first rate cadres to guide it… we must purposefully train lakhs of cadres and hundreds of first rate mass leaders…….,” he said.

What he said about revolutionary principles applies to political parties in a parliamentary democracy – a well organised cadre is a sine qua non for a party seeking to broaden its base and stay afloat.

But trust Narendra Modi to turn things on their head. Such has been his dominance in Gujarat in the course of his decade-long rule there that there has been virtually no need for an organised cadre or second-in-command. No leader can claim proximity to the BJP strongman, who is tipped as one of the strong contenders for being Prime Minister when the country goes to elections in 2014. The main question on every Gujarati lip is this: who will succeed Modi in the state in the eventuality of his elevation to Delhi? While there are several claimants to his legacy, no one is willing to hedge their bets – as yet – as most of them are too fragile to get into Modi’s bad books.

Political analysts say that in 2001, when Modi took over the reins of Gujarat BJP, his overall attempt was to cut down to size any opposition from the BJP ranks. Slowly, but steadily, powerful Gujarat BJP leaders were defanged: Keshubhai Patel and Suresh Mehta were left rudderless, Haren Pandya was mysteriously murdered while powerful backward leader Kashiram Rana passed away, leaving the field open for Modi. Today, former chief ministers Keshubhai Patel and Suresh Mehta are not even part of BJP. After demolishing the first line of BJP leadership, there is only the second line of BJP cadres left in the state who are quite willing to do Modi's bidding.
While there are a youthful bunch of BJP leaders in the fray like Nitin Patel, Amit Shah, Purushottam Rupala, R C Faldu and Saurabh Patel, they lack Narendra Modi’s charisma and gumption.

While there is a lot of gossip on who could succeed Modi, the Gujarat Chief Minister has everyone, including members of his kitchen cabinet, guessing. None of the leaders mentioned wants a mass base of his or hers own - they would rather be close to Modi.

Such a situation suits the Gujarat Chief Minister who has deliberately created this confusion so that his iron grip on the state remains even if the NDA loses. In three consecutive assembly elections, he has proved that without him the Gujarat BJP cannot win the state. The deliberate posturing of being a one-man army has proved beneficial; it is not the BJP but Modi who is a box-office hit. So far, all speculation has centred on Anandiben Patel, said to be the unofficial second-in-command of Gujarat BJP and also Modi’s successor if he moves to the centre. Insiders in the state BJP say that Modi has been grooming Anandiben to take over from him.


An indication of that has come in the way she has conducted meetings and even presided over portfolios which are not under her jurisdiction. For instance, unofficially, Anandiben has guided the destinies of the party over the significant poll issue of the Narmada Dam project in a drought-stricken Gujarat.

But health may not be on side of 71-year-old Anandiben. In which case, Modi favourite Saurabh Patel – a MBA from US - can consider himself in the run. Saurabh’s ministerial responsibilities of energy, finance, industries, petrochemicals and minerals and civil aviation give him a direct line to the country’s biggest corporate houses.

With both Patels as his closest lieutenants, Modi has in a sense, secured both his past and the future. With key aide Amit Shah entangled in encounter cases,  Modi has been keen to promote 54-year-old Saurabh Patel. He was reportedly instrumental in getting Saurabh a `safe’ seat during the 2012 assembly elections.

Another possible contender is former Finance Minister Vajubhai Vala, the man who holds the record of presenting the state budget 14 times and his successor Nitin Patel. Nitin, a Patel leader from Mehsana, is also in Modi’s good books and holds important portfolios like health, medical education, family welfare and transport. These days, he is the unofficial representative of the Gujarat government on places where Modi cannot make it.

Member of Parliament Purushottam Rupala too is said to be in the race but recent developments in BJP’s internal politics indicate that Rupala is out because of differences with Modi on allotting seats during the assembly elections. They say that Rupala’s non-inclusion in the new Team Rajnath in Delhi is a sign of this changing equation.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Never say no

Despite scams and industrial scandals, Maharashtra strides India’s economic horizon as a colossus. Chandran Iyer reports

Maharashtra, once a preferred destination for freedom fighters, is also India’s financial hub. The state, an economic and industrial powerhouse, has witnessed gigantic stock-market scams, industrial scandals and political upheavals. But despite the jolts, it has continued to grow at a blistering economic pace. It is the wealthiest state in India, contributing nearly 15 percent to the country's industrial output.

India’s largest stock exchange, the Bombay Stock Exchange located on Mumbai’s Dalal Street, has witnessed a spate of economic tremors triggered by mega-scamsters but somehow or the other, they have not dampened the sentiments of investors who still feel that this market remains the biggest short-cut to become Mr. Richie Rich.

In 1995-96, the Enron scam rocked the country for all the wrong reasons. The way in which the Dabhol power plant in Maharashtra was awarded to the global energy giant raised questions about kickbacks to politicians to clear infrastructural projects and to the media for planting slanted stories without keeping national considerations in mind. Maharashtra today is the second largest exporter of software products with annual exports of 18,000 crore (US$ 3.3 billion) and accounts for more than 30 percent of the country's software exports, with over 1,200 units based in the state. The head offices of all major financial institutions of India, viz., banks, insurance companies and mutual funds, are situated in Mumbai. The head office of the biggest financial institute of the Indian economy, the Reserve Bank of India, is also located in Maharashtra’s capital city.

Says Director General of Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) Anant Sardeshukh, "Maharashtra all along has been a leading industrial state in the country and today it contributes 15 percent GDP of the nation. This state is also attracting  a great deal of Foreign Direct Investments (FDI). However, it has to take a cue from Gujarat and remove bureaucratic hurdles in industrialisation. If that is done, it will considerably boost up the state’s economy,” he says adding that Maharashtra has a lower attrition rate than Gujarat.

The state is also an ideal  business destination for  foreign companies looking to invest in India. Recently the British Prime Minister David Cameron visited Mumbai with the biggest ever business delegation from UK to enhance economic tie ups with India, especially Maharashtra.

Points out Arun Bharadwaj, CEO and Executive Director of Global Imaging Technologies and Vice-Chairman of British Business Group, Pune, "Maharashtra has been  one of the largest business attractions for UK companies  for a long time. This is because there are business opportunities specially in automobile, IT, manufacturing and quite recently, the education sector."

A number of ancillary units for the automobile sector are being setup even after the TATA-JLR deal. There are several IT companies from UK based out of Maharashtra. Naturally, for those looking to invest in the state, the capital city offers the best opportunities. What is attractive for investors is Mumbai's clout as the financial capital of India. The IT sector has also marked its presence along with many service providers to UK companies. The reason; the presence of a large number of sound professional and technical colleges in and around the state are ideal picking ground for young graduates. This provides opportunities to the student community which is readily available to join the work force or train according to the industry-specific requirements.

Another sterling feather in Maharashtra’s cap is Mumbai’s Bollywood industry, which is also the world’s largest film industry. Indian cinema has a history of nearly 100 years and is an integral part of Indian society and culture. Now even Hollywood is courting Indian film producers: Disney, Viacom, News Corporation and Sony Pictures have all done deals with Bollywood companies in the past few years.

Says Raju Phulkar, a Marathi film writer, producer and director, "Bollywood is a bigger money spinner than any other film industry in India. It is the land of magical dreams where every wannabe actor wants to make a mark. Most end up shattered, some manage to get a foot-hold while only a very few manage to make a name for themselves in the tinsel world."

Phulkar, who also runs a film academy teaching students the basics of editing, script writing and acting, says, "Bollywood is a mesmerising world and it contributes a big chunk to Maharashtra’s economy."

Though Bangalore may be the IT capital of India, it was Maharashtra which put the United States to its place when it refused to grant Super Computing technology to India. Stung by the US snub, the then Prime Minister Rajiv Gandhi asked a Maharashtrian IT expert Vijay Bhatkar whether India had the capability to make super computers as the US had refused to transfer technology to India. Bhatkar, a simple but a brilliant IT man heading the Centre for Advance Computing (CDAC ) based in Pune, agreed to take up the challenge.

Along with his team, Bhatkar managed to create an indigenous supercomputer of Cray capability, then in gigaflops range which was named PARAM. In fact, C-DAC was launched in 1988 as India’s answer to US denial. When the PARAM super computer was launched, Wall Street Journal took caustic notice of it with front page headline “Angry India does IT”.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Highest suicides till date

Increasing suicides in US forces raise sticky questions

Recently, a 32 year old Iraqi war veteran of US army Jason Glover was shot dead by on-duty sheriffs when they responded to reports of home violence. Jason apparently pointed his gun at the sheriffs and refused to back down, before being shot dead. Some also commented that Jason could have been suffering from post-traumatic stress disorder (also having been severely injured on duty in Iraq) and may not have received requisite assistance to cope with that. While that may or may not be true, the Jason case exemplifies an issue that is increasingly worrying the US defence forces.

Today, globally, the number of military deaths in a non-battlefield setting is increasing across the world. Since World War II, the pattern of non-combat deaths has taken a paradigm shift. Today, an increasing number of soldiers are dying because of psychological issues.

According to the US Department of Veterans Affairs, on an average, 600 off-duty army personnel deaths take place every month while 30 deaths take place for on-duty soldiers! Look into the overall figure and the issue becomes clearer. A report by the US Department of Defence states that “For 2012, there have been 177 potential active-duty suicides." The same figure for 2011 was 165. More interestingly, there were "126 potential not on active-duty suicides (84 Army National Guard and 42 Army Reserve) for 2012 and 118 (82 Army National Guard and 36 Army Reserve) for 2011.” The US Army confirmed last month that the actual 2012 figure of suicides amongst army personal (active and non-active) was 325. "Our highest on record," said Lt. Gen. Howard Bromberg, Dy Chief of Staff of the US Army to media. Just six years ago, the situation was much different. According to reports from Pentagon, only around 100 American soldiers “died in non-combat incidents, including suicide and illness, in the year ending June 30, 2007.”

In particular, most of these suicides took place either in war zones or amongst those returning from such zones! Pentagon's Medical Surveillance Monthly Report mentioned last year that "...In 2010 and 2011, suicides accounted for more deaths of service members than transportation accidents.” It's not that Obama is blind to the issue, but till date, instead of directly addressing suicides, the Obama administration had assumed that the post service unemployability of the veterans was the main reason for suicides – and therefore all their plans for veterans were focused on either increasing employment or providing better financing facilities.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

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Is the telecom sector ready for the next wave?

After growing at a robust clip over the past decade, the telecom sector ran into a wall of problems – from weak financials of operators to regulatory bottlenecks. As a result, the industry’s buoyancy and energy seems to have dissipated. But data services present new opportunities that could bring life back into the game Anirudh Raheja
 
The telecom sector in India witnessed exponential growth, especially in the wireless segment, in the last few years. The wireless subscriber base in India grew from FY00 through FY10 at a compound annual growth rate of 77.5% to reach 584.3 million subscribers in FY10. This number climbed to 752.19 million subscribers in December 2010. Currently, the number stands over 900 million and is next only to China. Even the bouquet of telecom services has evolved, ranging from basic telephony to voice, video and data services, Wimax, WLAN and VPN, and bandwidth on demand to virtual private networks. The sector is now migrating from pure play voice connectivity to offering a broad bouquet of data services like video calling, mobile TV, and chat. Many other utility services like m-payments and m-commerce are also becoming an integral part of consumers’ lives, transforming the mobile data traffic composition. This evolution is expected to increase mobile data traffic at a CAGR of 126% over the next five years. Sure, the next phase will be data-driven but unlike the first phase – when operators riding on the back of an unprecedented boom of more than 700% in subscriber base from just 1 million subscribers to over 750 million between 1998 and 2010, scorched growth – the new phase comes with challenges. Already, intense competition in the sector over the past few years has dented the profitability of operators. The industry could generate revenues of just Rs. 1131.8 billion in FY12 compared to Rs.1141.3 billion a year ago, dragging it back some 0.83%.

Feeling the heat, most telecom companies have already started raising their tariffs. Given the fact that 3G is still at a nascent stage and VAS growth is also quite muted, tariff hikes will help telcos to earn more and to improve their situation. But while focusing on revenue and profitability is a step in the right direction, income augmentation is possible only if operators also put their shoulders behind enhancing their data services. Unfortunately, the focus on data is largely missing currently as is evidenced from the huge deficit of applications across a spectrum of activities – health, agriculture, education, financial service and the whole electronic commerce platform, from couponing to ticketing. In this context, a faster rollout and spread of 3G services will facilitate introduction of various VAS such as video calling, gaming, high-speed Internet access and other data services. Given that a substantial part (around 60%) of the total VAS revenue goes into the kitty of the service providers, the development of this segment is likely to offer them an opportunity to support their falling revenue. With the implementation of mobile number portability, service providers are expected to constantly develop new VAS.

Abhishek Chauhan, telecom analyst at Frost & Sullivan says, “to experience quality VAS on 3G, quality 3G services are needed. This would definitely take some time, at least 2-3 years.” But with 3G subscribers expected to reach 142 million in 2015, operators who move slowly on this front will likely lose out big time. Thankfully, leading operators are quickly getting on to the game. In a bid to get more users to try the next generation 3G services telecom operators are now offering better cost-effective deals to the masses. Going forward, 3G spectrum is expected to attract major investments and open new growth avenues for the telecom sector. However, the past few months have seen a sharp decrease in capex by operators because more and more monies are now required for various “levies”. According to a report by Crisil Research, investments in telecom have been affected by the lack of policy clarity and, in some cases, stretched financials of companies after the acquisition of 3G / BWA licences.

In fact, the unclarity on major policy issues has spooked the industry like never before. Take, for instance, the issue of refarming and mortgaging of the spectrum. Rajan Mathews, Director General, Cellular Operators Association of India, opines, “Refarming, as proposed by the Government, is largely akin to “redistribution” and it is founded on flimsy grounds. The entire restructuring of an efficient network by ripping off the existing infrastructure, disconnecting the connected and then deploying an infrastructure that is more demanding in terms of capital, space and construction does not make any sense or benefits the industry or consumers.”

Quite a few issues have remained unsolved between the government and service providers. These include matters related to restrictions on interconnects between own systems and networks across service areas, eligibility criteria and tenure of licence period, the USO fund, as well as various spectrum related issues. As a result of this policy muddle, operators have been forced to shut down networks. Recently, Uninor shut down its operations in Mumbai, which left 1.8 million of its users stranded. In Kerala three operators – Aircel, Telenor and Videocon – have shut down their networks. It’s not surprising that investor rating agency Fitch has noted recently that regulatory risks such as such as an one-time charge for excess spectrum, spectrum re-farming and imposition of high spectrum renewal fees are high for the Indian telecom industry compared with other markets in Asia-Pacific.

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Source : IIPM Editorial, 2013.
An Initiative of IIPM, Malay Chaudhuri

and Arindam Chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles

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