In one of my visits to Ahmedabad, not long ago, when I was staying at Prof. Sunil Handa's house and engaged in a lively discussion with him, there concept of celestial justice system came. He very beautiful named the Indian way of thinking that good deeds are rewarded and bad ones are punished, and there exists a justice system that keeps a count - beyond the earthly routes to justice available. I like this idea, and can live with it, and it doesnt give me the same questions as the concept of "God" in general does. Having said that , I met one gentleman who just six months ago had a market capitalization of 10,000 crores, and could see no harm his way. He looked invincible in the face of every challenge, and couldnt expect any threat from any quarters. And today he cant expect any help from any quarters. The world has given way and he is owing the world today a lot of money...what makes such upheavels - who makes Princes out of paupers and paupers out of priinces - is there really somebody up there who is pulling our threads ?
On the financial side - the lessons are - a. may be leverage is not such a good thing b. going public or not is something that has to be thought much more seriously by the company as this market has shown. The best of companies dont control their destiny any more.
Sunday, October 26, 2008
Friday, October 10, 2008
Trip to Mussoorie
Mussoorie, a beautiful hillstation located in the Shivaliks, in the Indian state of Uttrakhand -approx 30 kms from Dehradoon, capital of Uttrakhand. A convenient way to reach Mussoorie is take a Shatabdi express from Delhi (NDLS) that goes to Dehradoon at 6:50 AM and reaches there 12:30 PM. From there, one can get taxis from the station itself. The process of getting a taxi is pretty hastle free, unlike other places in India. The fares are regulated by the Uttrakhand government, and one can just queue up and get the taxi which costs 450/- per trip to Mussoorie. One can also share a cab and pay lesser, for there are many people going to Mussoorie from the station. The uphill trip takes about an hour, and the change in temperature is just superb. Mussoorie, also called the queen of hills, is very pleasant during October as well, and a light breeze can make the weather very cold. The two sides to the Mall are the Picture Palace (crowded) and the Library side (less crowded). The route to Kempty falls etc is also from Library side. There are loads of hotels to choose from on the mall, and the rooms are available at almost all prices. Hotel Pallavi Mussoorie on the mall, on the library side, is a beautiful and cozy resort with beautiful views and helpful staff. There is a Barista on the Library side, and the Picture Palace side as well. Its a small quintessential town, with a small mall that can be walked in about 45 minutes end to end. like other hillstations in north india, there are horse rides on the mall, and street vendors - and there are vendors who come out in the evening selling shawls, which are quite nice and cheap - just to take advantage of the sudden change in temperature, like true entrepreneurs. Take a short weekend break to Mussoorie, and you wont regret it.
Friday, September 19, 2008
On starting..
I often wonder if it is better to start alone, and yet small in a business, or is it better to taking funding in the beginning and try fighting it out in a better league. I am tustling with this for a while now - sometimes i feel it is easier to take a business from 100 to 10,000 than taking it from 1 to 100. The competition at the bottom of the pyramid is far intense and ruthless...any answers dear friends ?
Wednesday, September 17, 2008
Changing times in India..
Yday, while walking down hounslow in west london, I was discussing with my cousin the pace to today's life. And suddenly my mind got transported to India of yesteryears, when the only thing to do for entertainment was to watch chitrahaar in the evening, and there used to be a serial of charlie chaplin and movie on sunday. Anybody who had a telephone connection was a wow in the society. ....and today, if your driver doesnt have a mobile phone, people are shocked - the normal reaction is "how do you manage yaar "
Monday, September 15, 2008
Market Commentary
With Lehman going down, and Merill bought out, and AIG in trouble, it could be pretty bad for the USD in the short run. Any further bad news could cause a lot of damage. Oil has come off almost $4 reversing most of its gains in the beginning of the year. Fed rates could be cut going forward.
Turmoil in the international markets
Lehman brothers, filed for Chapter 11 Bankruptcy today. Merill Lynch was sold off to Bank of America for $50 bn. The two towering giants of wall street that have, between the two of them, a history of 250 years on the wall street, were not present when the markets opened today morning. Wall Street will never be the same again. AIG, the largest american insurance company is also in trouble.
Wednesday, July 18, 2007
Efficiency and Effectiveness
Peter Drucker, management guru talks about efficiency and effectiveness as two important concepts of management. Efficiency is "doing things right" and Effectiveness is "doing the right thing". Efficiency is an input output concept wherein an efficient manager is one that uses minimum inputs to product maximum outputs. Effectiveness, by contrast, involves chosing the right goals. A manager, who selects the wrong goal, says producing Plasma televisions, when the demand is for LCDs, is an ineffective manager, even if the Plasmas are produced with maximum efficiency.
No amount of efficiency can make up for lack of effectiveness. According to Drucker, Effectiveness is the key to an organisation's success.
No amount of efficiency can make up for lack of effectiveness. According to Drucker, Effectiveness is the key to an organisation's success.
Sunday, July 15, 2007
My speech on "Integrity" to IRDE, Dehradun as part of YI, CII - 13.07.07
13.07.07
Ladies and Gentlemen,
Good Afternoon!! First of all I take this opportunity to thank the scientists of this country, who make our lives peaceful and yet take little credit for it. You are the real heroes of this nation. On behalf of the CII’s Young Indians and on behalf of Milagrow Business and Knowledge Solutions, I welcome all of you to a very special event of YI, CII
What is integrity ?
Integrity is the basing of one's actions on an internally consistent framework of principles. Depth of principles and adherence of each level to the next are key determining factors. One is said to have integrity to the extent that everything he does and believes is based on the same core set of values. While those values may change, it is their consistency with each other and with the person's actions that determine his integrity.
The concept of integrity is directly linked to responsibility. Integrity in ancient India has always meant unity of thought, word and deed.
Integrity to me is the wholeness of being. To be morally sound, and stand for a set of values. It is a holistic concept, one which should cover every aspect of our lives. Integrity should signify that we say what we think, and we do what we say When I was asked to speak the key note address on Integrity India campaign in such august audience, the first question that comes to my mind is what is my moral authority to talk on Integrity. Trust me ladies and gentlemen, I thought about it a lot, and it gave me a reason to ponder and reflect upon my own life, my relationships, and my career in general. I personally believe that there is no such thing as personal set of values and public set of values for a human being. Life is funny, and yet extremely fair, and in the long run, our personal values come to reflect upon our public relationships. Having had the opportunity to be an entrepreneur at the age of 17 running an injection moulding company, I have seen India from the grassroots. At the same time having studied in one of the best colleges in India have had the opportunity to interact with the thought leaders of this country.
After graduating from Indian Institute of Management, Ahmedabad, my first job was in London as an investment banker where I worked for 5 years. Being the only coloured guy in investment banking, that is still largely a white strong hold, taught me many cross cultural lessons. Having worked and interacted with British for long hours in a day for many years, I always think what is that these guys do differently than us. If you look at an average British and compare it with an average Indian, the Indian would be smarter in everything – but the sad part is that this smartness sometimes borders to short cuts. In my life in UK, I noticed a strong sense of Integrity for the nation and to a common set of values, that all abide by. One can take things at face value. In India, in every day life, it is more a norm that everything has a hidden agenda. We find that we have a different set of values that govern our different aspects of life. We are driven not by personal guilt arising from a lowering benchmark of values. We are rather driven by public guilt. Everything is fine, as long as the world doesn’t know of it. The western philosophy calls for taking responsibility for one’s actions. However, in India, we believe that everything is predestined. There is a clear sense of evading responsibility and everything is passed on to God. We don’t take it upon ourselves to be responsible for our society, for our motherland, for our country. But the problem is not that the integrity is missing when the call is for the nation, the problem is that integrity is missing even when we are dealing our personal lives. If we don’t stand for things that benefit us directly, what will we do when the benefits are for all?
Today, those of you who are running companies, advertise for a typist, and nine out of ten who apply can neither spell nor punctuate – and do not think it necessary to do so. Can with such attitudes, such lack of integrity for our jobs, we become a great nation?
A government official accepts bribe from a party to a tender and lets him outbid the highest tender. He then justifies that he has done nothing wrong, because he has created a win win situation. He has made money for himself, and in the process his department through the tender process has got more money coming in now, than earlier? How do you justify this? Is this government official ethical to his value system and his job?
If we come on a conference and get paid for it, and don’t declare it to our company, is that acceptable?
“The Letter to Garcia” is one of the most widely circulated articles of the world. When the war broke out between Spain and the US in last decade of 19th century, it was necessary to communicate quickly with the leaders of the insurgents led by Garcia. Garcia was somewhere in the mountain fastnesses of Cuba – no one new where. No mail or telegraph message could reach him. The President must secure his cooperation and quickly. Someone said to the President, “There is a fellow by the name of Rowan who will find Garcia for you, if anybody can”. Rowan was sent for and given a letter to be delivered to Garcia. How the fellow by the name of Rowan took the letter and delivered it to Garcia – are things that we don’t have to go in detail. The point I want to make is this: The President gave Rowan a letter to be delivered to Garcia, Rowan took the letter and didn’t ask “where is Garcia” –He did it with a “consider it done” attitude with a complete integrity to his task and not searched for excuses and escaping responsibility. The point is that the country doesn’t need book learning young men, nor instructions about this or that, but a stiffening of vertebrae, which will cause them to be loyal to a trust, to act promptly, concentrate their energies and to act with completely INTEGRITY. That is when the nation would progress. We need Rowans who can carry the message to Garcia with utmost Integrity. Slipshod assistance, inattention, indifference, and half hearted work are all parts of personal non integrity and no man can succeed unless he has personal integrity, accept of course by bribes or threats, to what we Indians now rely upon.
While I am normally wary of the "Mera Bharat Mahaan" syndrome, all of us can be justifiably proud of the many successes India has notched up on the economic front:
An 8-10% economic growth on a sustained basis is a clear possibility. India has 1 trillion GDP mark ranking 7th in the world. We have earned the reputation of the world at large with our developments in a number of areas - be it Information Technology; bio-technology; Industrial Research and Development or higher education.
The "India Brand" has caught the attention of global business leaders and opinion makers based on our performance on the ground in select sectors. All this is great news.
The converse, which should concern us greatly, is how much we get carried away by our achievements - modest as they may be - and fail to recognize the barriers that come to realizing our full potential.
Various statistics point to the fact that for every Rupee spent by the government on development, less than ten paisa of the amount actually reaches the beneficiary.
This again sums up the biggest challenge that confronts us all : the need for transparency, accountability and ethical behaviour.
Studies by respected Institutions such as “Transparency International" indicate that India ranks a low 88 out of the 159 countries surveyed in regard to integrity. We are clubbed with a number of countries such as Gabon, Mali, Moldova, Tanzania and Iran.
Transparency International, the global civil society organization leading the fight against corruption, brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men and women around the world.
In fact, Milagrow Business and Knowledge Solutions is going to be the first company in India to sign the Integrity Pact and an MoU with Transparency International. We are developing Integrity Pact Programmes with Transparency International. Our own transparency of business, our own standards of ethical growth has given us the moral authority today to stand in front of a larger audience and encourage them to sign the Integrity Pact. If we are able to sign 10 YIs this year on this Integrity Pact, we would consider having made some change. In the last few months since Milagrow has come into existence, we have had numerous instances when we have been offered money in cash, but we have never accepted anything but cheque.
The media and research keeps on springing humungous corruption numbers at us- 250,000 crores loss of revenue to government through tax evasion,50,000 crores additional cost to the country because of delays in project implementation due to bureaucratic red tape. 2000 crores offered as bribes by truck drivers at various check points in the country.
Each one of us has to contribute, the battle is going to be long, we need everybody to carry the Letter to Garcia with utmost Integrity.
At the institutional level, integrity needs to be promoted by rallying for institutional changes.
In recent years, the nation has witnessed the non governmental associations who have intervened, in significant ways, on behalf of common citizens to ensure the protection of their rights on the one hand and secure the accountability of those exercising power on the other. With the state and its attendant institutions being increasingly subjected to sustained pressure to act in a transparent and accountable manner, the response of the power structure is mixed. It has often attempted to resist pressure from these groups to be more accountable. RTI Act has removed a major bottleneck in the Indian democratic (and legal) framework with free flow of information to citizens on various aspects of the functioning of government. India can reasonably pride itself on the freedom of the press. They have acted as a watchdog, reporting incidents of misuse of power and corruption. Greater transparency would permit persistent social pressures on the administration to ensure probity and honesty. Under the present system, it is possible for those in power to blame lapses on “systems failure.” While the Right to Information Act has come to force, steps have yet to be taken to make it fully useful. The irony is that its successful implementation is once again monitored by the bureaucracy.
We must promote RTI Act to make the system more accountable and decrease corruption.
A serious matter of concern is the inordinate delay in the hearing of routine cases. Judicial activism seems to have drawn attention only to the high-profile cases, while the complaints of common citizens often drag on in the court for several years.
The middle class in India idolizes any public servant who decides to launch a crusade against corrupt practices. While ordinary citizens do have access to the judicial system, the inordinate delays and the complicated procedures often deter individuals from filing complaints.
The opinion of lawyers in general public is best summed up by a quote from Akbar Allahabadi who lampooned them in a memorable couplet:
Paida hua vakeel to iblees nay kahaa
Lo aaj ham bhee saheb-i-aulaad ho gaye
(The day a lawyer was born, Devil said with joy
Allah has made me today, the father of a boy.)
There are over 30 million cases pending in the various courts, a low conviction rate of 6 percent, and a case taking on an average 10 to 20 years to dispose off, it is a miracle if justice is dispensed at all. The conduct of many judges has been questionable, to say the least. But who would judge the judges themselves?
The Supreme Court, however has enjoyed far greater credibility than either of the other two pillars of government. It has often acted as a proactive bulwark of democracy, often hauling up the executive and legislative bodies for making a travesty of the Constitution. In its defense of democracy, a proactive judiciary (mainly the Supreme Court) has been ably supported by a fairly independent media. However,
There has been an animated debate in India about ministers continuing in office even after serious charges of corruption However, in a few of these cases, once the heat of the controversy simmered down, the leaders made a quiet back-door return to the government. The political class seems to have arrived at a consensus that ministers need to resign only when the charges are framed in a court against them.
One has to really strain one’s memory to remember the last time a minister was penalized, let alone imprisoned, even though so many of them are tainted. Statistics and surveys on corruption, though sketchy underscore the majority sentiment. According to the most comprehensive survey of petty corruption in India so far, India figures among the 30 most corrupt nations in the world. The survey also revealed that the greatest sufferers of this petty corruption are not the middle classes, who often have the ability to grease greedy palms (even if grudgingly), but the urban poor—hawkers, rickshaw-pullers and small tea-shop owners, small-time mechanics, poor migrant laborers, slum-dwellers: in one word, the city’s underbelly, bravely trying to eke out a living in the most heartless and trying circumstances.
We are fortunate that the platform like Integrity India Campaign is an inspiration for all of us to realize a transparent, ethical, accountable and responsive civil society in our life time.
Not all is lost, the change is happening. Everyday, we find an inspirational story of people standing up for values. Great Indians keep coming on the horizons who maintain the benchmark for us. Integrity in our personal and professional life brings us a sense of wholeness, satisfaction, and a clear conscience. You can out-distance that which is running after you, but not what is running inside you.
So today let us all pledge to live by integrity in our life. I request you to kindly sign in the statement of commitment provided to you. We will be the catalysts of change. Let us take forward YI’s slogan
“Growth with Dignity, India’s Integrity”
Thank You.
Ladies and Gentlemen,
Good Afternoon!! First of all I take this opportunity to thank the scientists of this country, who make our lives peaceful and yet take little credit for it. You are the real heroes of this nation. On behalf of the CII’s Young Indians and on behalf of Milagrow Business and Knowledge Solutions, I welcome all of you to a very special event of YI, CII
What is integrity ?
Integrity is the basing of one's actions on an internally consistent framework of principles. Depth of principles and adherence of each level to the next are key determining factors. One is said to have integrity to the extent that everything he does and believes is based on the same core set of values. While those values may change, it is their consistency with each other and with the person's actions that determine his integrity.
The concept of integrity is directly linked to responsibility. Integrity in ancient India has always meant unity of thought, word and deed.
Integrity to me is the wholeness of being. To be morally sound, and stand for a set of values. It is a holistic concept, one which should cover every aspect of our lives. Integrity should signify that we say what we think, and we do what we say When I was asked to speak the key note address on Integrity India campaign in such august audience, the first question that comes to my mind is what is my moral authority to talk on Integrity. Trust me ladies and gentlemen, I thought about it a lot, and it gave me a reason to ponder and reflect upon my own life, my relationships, and my career in general. I personally believe that there is no such thing as personal set of values and public set of values for a human being. Life is funny, and yet extremely fair, and in the long run, our personal values come to reflect upon our public relationships. Having had the opportunity to be an entrepreneur at the age of 17 running an injection moulding company, I have seen India from the grassroots. At the same time having studied in one of the best colleges in India have had the opportunity to interact with the thought leaders of this country.
After graduating from Indian Institute of Management, Ahmedabad, my first job was in London as an investment banker where I worked for 5 years. Being the only coloured guy in investment banking, that is still largely a white strong hold, taught me many cross cultural lessons. Having worked and interacted with British for long hours in a day for many years, I always think what is that these guys do differently than us. If you look at an average British and compare it with an average Indian, the Indian would be smarter in everything – but the sad part is that this smartness sometimes borders to short cuts. In my life in UK, I noticed a strong sense of Integrity for the nation and to a common set of values, that all abide by. One can take things at face value. In India, in every day life, it is more a norm that everything has a hidden agenda. We find that we have a different set of values that govern our different aspects of life. We are driven not by personal guilt arising from a lowering benchmark of values. We are rather driven by public guilt. Everything is fine, as long as the world doesn’t know of it. The western philosophy calls for taking responsibility for one’s actions. However, in India, we believe that everything is predestined. There is a clear sense of evading responsibility and everything is passed on to God. We don’t take it upon ourselves to be responsible for our society, for our motherland, for our country. But the problem is not that the integrity is missing when the call is for the nation, the problem is that integrity is missing even when we are dealing our personal lives. If we don’t stand for things that benefit us directly, what will we do when the benefits are for all?
Today, those of you who are running companies, advertise for a typist, and nine out of ten who apply can neither spell nor punctuate – and do not think it necessary to do so. Can with such attitudes, such lack of integrity for our jobs, we become a great nation?
A government official accepts bribe from a party to a tender and lets him outbid the highest tender. He then justifies that he has done nothing wrong, because he has created a win win situation. He has made money for himself, and in the process his department through the tender process has got more money coming in now, than earlier? How do you justify this? Is this government official ethical to his value system and his job?
If we come on a conference and get paid for it, and don’t declare it to our company, is that acceptable?
“The Letter to Garcia” is one of the most widely circulated articles of the world. When the war broke out between Spain and the US in last decade of 19th century, it was necessary to communicate quickly with the leaders of the insurgents led by Garcia. Garcia was somewhere in the mountain fastnesses of Cuba – no one new where. No mail or telegraph message could reach him. The President must secure his cooperation and quickly. Someone said to the President, “There is a fellow by the name of Rowan who will find Garcia for you, if anybody can”. Rowan was sent for and given a letter to be delivered to Garcia. How the fellow by the name of Rowan took the letter and delivered it to Garcia – are things that we don’t have to go in detail. The point I want to make is this: The President gave Rowan a letter to be delivered to Garcia, Rowan took the letter and didn’t ask “where is Garcia” –He did it with a “consider it done” attitude with a complete integrity to his task and not searched for excuses and escaping responsibility. The point is that the country doesn’t need book learning young men, nor instructions about this or that, but a stiffening of vertebrae, which will cause them to be loyal to a trust, to act promptly, concentrate their energies and to act with completely INTEGRITY. That is when the nation would progress. We need Rowans who can carry the message to Garcia with utmost Integrity. Slipshod assistance, inattention, indifference, and half hearted work are all parts of personal non integrity and no man can succeed unless he has personal integrity, accept of course by bribes or threats, to what we Indians now rely upon.
While I am normally wary of the "Mera Bharat Mahaan" syndrome, all of us can be justifiably proud of the many successes India has notched up on the economic front:
An 8-10% economic growth on a sustained basis is a clear possibility. India has 1 trillion GDP mark ranking 7th in the world. We have earned the reputation of the world at large with our developments in a number of areas - be it Information Technology; bio-technology; Industrial Research and Development or higher education.
The "India Brand" has caught the attention of global business leaders and opinion makers based on our performance on the ground in select sectors. All this is great news.
The converse, which should concern us greatly, is how much we get carried away by our achievements - modest as they may be - and fail to recognize the barriers that come to realizing our full potential.
Various statistics point to the fact that for every Rupee spent by the government on development, less than ten paisa of the amount actually reaches the beneficiary.
This again sums up the biggest challenge that confronts us all : the need for transparency, accountability and ethical behaviour.
Studies by respected Institutions such as “Transparency International" indicate that India ranks a low 88 out of the 159 countries surveyed in regard to integrity. We are clubbed with a number of countries such as Gabon, Mali, Moldova, Tanzania and Iran.
Transparency International, the global civil society organization leading the fight against corruption, brings people together in a powerful worldwide coalition to end the devastating impact of corruption on men and women around the world.
In fact, Milagrow Business and Knowledge Solutions is going to be the first company in India to sign the Integrity Pact and an MoU with Transparency International. We are developing Integrity Pact Programmes with Transparency International. Our own transparency of business, our own standards of ethical growth has given us the moral authority today to stand in front of a larger audience and encourage them to sign the Integrity Pact. If we are able to sign 10 YIs this year on this Integrity Pact, we would consider having made some change. In the last few months since Milagrow has come into existence, we have had numerous instances when we have been offered money in cash, but we have never accepted anything but cheque.
The media and research keeps on springing humungous corruption numbers at us- 250,000 crores loss of revenue to government through tax evasion,50,000 crores additional cost to the country because of delays in project implementation due to bureaucratic red tape. 2000 crores offered as bribes by truck drivers at various check points in the country.
Each one of us has to contribute, the battle is going to be long, we need everybody to carry the Letter to Garcia with utmost Integrity.
At the institutional level, integrity needs to be promoted by rallying for institutional changes.
In recent years, the nation has witnessed the non governmental associations who have intervened, in significant ways, on behalf of common citizens to ensure the protection of their rights on the one hand and secure the accountability of those exercising power on the other. With the state and its attendant institutions being increasingly subjected to sustained pressure to act in a transparent and accountable manner, the response of the power structure is mixed. It has often attempted to resist pressure from these groups to be more accountable. RTI Act has removed a major bottleneck in the Indian democratic (and legal) framework with free flow of information to citizens on various aspects of the functioning of government. India can reasonably pride itself on the freedom of the press. They have acted as a watchdog, reporting incidents of misuse of power and corruption. Greater transparency would permit persistent social pressures on the administration to ensure probity and honesty. Under the present system, it is possible for those in power to blame lapses on “systems failure.” While the Right to Information Act has come to force, steps have yet to be taken to make it fully useful. The irony is that its successful implementation is once again monitored by the bureaucracy.
We must promote RTI Act to make the system more accountable and decrease corruption.
A serious matter of concern is the inordinate delay in the hearing of routine cases. Judicial activism seems to have drawn attention only to the high-profile cases, while the complaints of common citizens often drag on in the court for several years.
The middle class in India idolizes any public servant who decides to launch a crusade against corrupt practices. While ordinary citizens do have access to the judicial system, the inordinate delays and the complicated procedures often deter individuals from filing complaints.
The opinion of lawyers in general public is best summed up by a quote from Akbar Allahabadi who lampooned them in a memorable couplet:
Paida hua vakeel to iblees nay kahaa
Lo aaj ham bhee saheb-i-aulaad ho gaye
(The day a lawyer was born, Devil said with joy
Allah has made me today, the father of a boy.)
There are over 30 million cases pending in the various courts, a low conviction rate of 6 percent, and a case taking on an average 10 to 20 years to dispose off, it is a miracle if justice is dispensed at all. The conduct of many judges has been questionable, to say the least. But who would judge the judges themselves?
The Supreme Court, however has enjoyed far greater credibility than either of the other two pillars of government. It has often acted as a proactive bulwark of democracy, often hauling up the executive and legislative bodies for making a travesty of the Constitution. In its defense of democracy, a proactive judiciary (mainly the Supreme Court) has been ably supported by a fairly independent media. However,
There has been an animated debate in India about ministers continuing in office even after serious charges of corruption However, in a few of these cases, once the heat of the controversy simmered down, the leaders made a quiet back-door return to the government. The political class seems to have arrived at a consensus that ministers need to resign only when the charges are framed in a court against them.
One has to really strain one’s memory to remember the last time a minister was penalized, let alone imprisoned, even though so many of them are tainted. Statistics and surveys on corruption, though sketchy underscore the majority sentiment. According to the most comprehensive survey of petty corruption in India so far, India figures among the 30 most corrupt nations in the world. The survey also revealed that the greatest sufferers of this petty corruption are not the middle classes, who often have the ability to grease greedy palms (even if grudgingly), but the urban poor—hawkers, rickshaw-pullers and small tea-shop owners, small-time mechanics, poor migrant laborers, slum-dwellers: in one word, the city’s underbelly, bravely trying to eke out a living in the most heartless and trying circumstances.
We are fortunate that the platform like Integrity India Campaign is an inspiration for all of us to realize a transparent, ethical, accountable and responsive civil society in our life time.
Not all is lost, the change is happening. Everyday, we find an inspirational story of people standing up for values. Great Indians keep coming on the horizons who maintain the benchmark for us. Integrity in our personal and professional life brings us a sense of wholeness, satisfaction, and a clear conscience. You can out-distance that which is running after you, but not what is running inside you.
So today let us all pledge to live by integrity in our life. I request you to kindly sign in the statement of commitment provided to you. We will be the catalysts of change. Let us take forward YI’s slogan
“Growth with Dignity, India’s Integrity”
Thank You.
Monday, June 11, 2007
11.06.07 Commentary
The latest wave of dollar strength, which was limited to the Euro, British pound and Japanese Yen, was triggered by the intraday reversal in yields, the drop in oil prices and the stronger US trade balance. Ten year bond yields hit a high of 5.24 percent, but ended the day in negative territory. Oil prices slipped as the cyclone in the Middle East loses strength. We are also finally seeing the benefits of the weak US dollar. The trade deficit dropped significantly in the month of April as import demand subsided while export demand hit a record high. The increase in exports is the main reason why many economists including Federal Reserve Chairman Ben Bernanke are looking for stronger growth in the second half.
11.06.07
EUR 1.3344
JPY 121.66
GBP 1.9665
CHF 1.2364
AUD 0.8418
CAD 1.0616
NZD 0.7488
EUR/GBP 0.6788
EUR/JPY 162.32
JPY 121.66
GBP 1.9665
CHF 1.2364
AUD 0.8418
CAD 1.0616
NZD 0.7488
EUR/GBP 0.6788
EUR/JPY 162.32
Thursday, June 07, 2007
Dubai to offer exchange traded rupee futures
Dubai to Offer First Exchange-Traded Rupee Futures (Update1)
By Matthew Brown
June 6 (Bloomberg) -- Dubai Gold & Commodities Exchange will tomorrow begin offering the world's first exchange-traded futures contracts in Indian rupee, helping companies and investors hedge against risks.
The contracts, linked to the future value of the rupee, will be settled in euros, David Rutledge, a director at DGCX, told reporters today in Dubai, United Arab Emirates. The market is outside the jurisdiction of India's central bank, which places curbs on trading in the rupee, he said.
``There is a real commercial need for this product,'' Rutledge said. ``Anyone involved in international trade with a rupee currency risk'' might be interested, he said. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Trading on a futures market is a more transparent alternative to so-called non-deliverable forwards, which are derivatives contracts arranged by banks. Trading in such rupee- based contracts averaged about $500 million a day in the second quarter of 2006, according to the Bank for International Settlements in Basel, Switzerland.
India's currency climbed 8.8 percent this year on increased capital flows as Asia's fourth-biggest economy expanded at the fastest pace in almost two decades.
The exchange plans to offer the contracts to institutions and individuals, including almost four million expatriate Indian workers in the region who sent $6 billion in remittances in the year ended March 31, 2006.
``This is an opportunity for overseas banks to cater to a huge market,'' said V. Rajagopal, chief currency trader at Kotak Mahindra Bank Ltd. in Mumbai. ``Trading in the exchange will also have an impact on the spot rupee market here in India.''
Transparent Market
The implied rate for the currency in the forwards market in Mumbai suggest that the rupee will trade at 41.78 against the dollar, compared with the spot rate of 40.66, according to data compiled by Bloomberg.
Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. Forwards are agreements to buy assets at a later specified date. A non- deliverable forward is typically settled in dollars and involves no physical exchange of other currencies.
The DGCX contract, to be traded on Dubai's two-year-old commodities exchange, will compliment the NDF market, Rutledge said. Dubai is India's third-biggest trading partner.
``The advantage of an exchange-traded contract is that it is accessible at a low cost and is transparent,'' Rutledge said. Banks offering NDFs ``can hedge some risk'' through the DGCX contract, he said. ``It will be easier for them to offer NDFs.''
DGCX is a venture between Dubai Multi Commodities Center, Financial Technologies India Ltd. and Multi-Commodity Exchange of India Ltd., according to the DGCX Web site.
Its first product was a gold contract, which began trading in November 2005, and has since been followed by silver, currencies, including the pound, euro and yen, and fuel oil. DGCX's steel futures contract will debut June 27.
By Matthew Brown
June 6 (Bloomberg) -- Dubai Gold & Commodities Exchange will tomorrow begin offering the world's first exchange-traded futures contracts in Indian rupee, helping companies and investors hedge against risks.
The contracts, linked to the future value of the rupee, will be settled in euros, David Rutledge, a director at DGCX, told reporters today in Dubai, United Arab Emirates. The market is outside the jurisdiction of India's central bank, which places curbs on trading in the rupee, he said.
``There is a real commercial need for this product,'' Rutledge said. ``Anyone involved in international trade with a rupee currency risk'' might be interested, he said. A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.
Trading on a futures market is a more transparent alternative to so-called non-deliverable forwards, which are derivatives contracts arranged by banks. Trading in such rupee- based contracts averaged about $500 million a day in the second quarter of 2006, according to the Bank for International Settlements in Basel, Switzerland.
India's currency climbed 8.8 percent this year on increased capital flows as Asia's fourth-biggest economy expanded at the fastest pace in almost two decades.
The exchange plans to offer the contracts to institutions and individuals, including almost four million expatriate Indian workers in the region who sent $6 billion in remittances in the year ended March 31, 2006.
``This is an opportunity for overseas banks to cater to a huge market,'' said V. Rajagopal, chief currency trader at Kotak Mahindra Bank Ltd. in Mumbai. ``Trading in the exchange will also have an impact on the spot rupee market here in India.''
Transparent Market
The implied rate for the currency in the forwards market in Mumbai suggest that the rupee will trade at 41.78 against the dollar, compared with the spot rate of 40.66, according to data compiled by Bloomberg.
Derivatives are financial instruments derived from stocks, bonds, loans, currencies and commodities, or linked to specific events like changes in the weather or interest rates. Forwards are agreements to buy assets at a later specified date. A non- deliverable forward is typically settled in dollars and involves no physical exchange of other currencies.
The DGCX contract, to be traded on Dubai's two-year-old commodities exchange, will compliment the NDF market, Rutledge said. Dubai is India's third-biggest trading partner.
``The advantage of an exchange-traded contract is that it is accessible at a low cost and is transparent,'' Rutledge said. Banks offering NDFs ``can hedge some risk'' through the DGCX contract, he said. ``It will be easier for them to offer NDFs.''
DGCX is a venture between Dubai Multi Commodities Center, Financial Technologies India Ltd. and Multi-Commodity Exchange of India Ltd., according to the DGCX Web site.
Its first product was a gold contract, which began trading in November 2005, and has since been followed by silver, currencies, including the pound, euro and yen, and fuel oil. DGCX's steel futures contract will debut June 27.
07.06.07 Update
AUD aiming at 16 year high on back of interest rate differentials. Australian economy is doing well, and the highest interest rates in the industrialized world at 6.25% offers tremendous incentives for carry traders.
07.06.07
EUR 1.3505
JPY 121.05
GBP 1.9928
CHF 1.2168
EUR/CHF 1.6438
AUD 0.8467
CAD 1.0573
NZD 0.7557
EUR/GBP 0.6776
EUR/JPY 163.63
JPY 121.05
GBP 1.9928
CHF 1.2168
EUR/CHF 1.6438
AUD 0.8467
CAD 1.0573
NZD 0.7557
EUR/GBP 0.6776
EUR/JPY 163.63
07.06.07
EUR 1.3505
JPY 121.05
GBP 1.9928
CHF 1.2168
EUR/CHF 1.6438
AUD 0.8467
CAD 1.0573
NZD 0.7557
EUR/GBP 0.6776
EUR/JPY 163.63
JPY 121.05
GBP 1.9928
CHF 1.2168
EUR/CHF 1.6438
AUD 0.8467
CAD 1.0573
NZD 0.7557
EUR/GBP 0.6776
EUR/JPY 163.63
Wednesday, June 06, 2007
06.06.07 commentary
Strong ISM Non manufacturing nos. from US failed to stop the fall of the greenback. the no. at 59.7 was a 13 month high. Fundamentals point to a dollar recovery, with long term yields climbing back up again.
Euro gained as trichet might signal further rate hikes, in one of the strongest decades of growth in euroland. The Australian economy grew 1.6% beating expectations. Sterling rose as traders expect BoE to raise rates this week.
Euro gained as trichet might signal further rate hikes, in one of the strongest decades of growth in euroland. The Australian economy grew 1.6% beating expectations. Sterling rose as traders expect BoE to raise rates this week.
06.06.07
EUR 1.3522
JPY 121.35
GBP 1.9953
CHF 1.2182
EUR/CHF 1.6477
AUD 0.8435
CAD 1.0587
NZD 0.7542
EUR/GBP 0.6772
EUR/JPY 164.1
JPY 121.35
GBP 1.9953
CHF 1.2182
EUR/CHF 1.6477
AUD 0.8435
CAD 1.0587
NZD 0.7542
EUR/GBP 0.6772
EUR/JPY 164.1
Tuesday, June 05, 2007
Revaluing due to prosperity ..ET
Revaluing due to prosperity
Central banks in emerging markets spent much of the past few decades pursuing an exchange rate policy that often read: “Undervaluing our way to prosperity”. But the power of capital inflows has been so overwhelming of late that the new policy paradigm seems to be more along the lines of: “Revaluing our way (due) to prosperity”. From Brazil to Indonesia, policymakers are increasingly letting their currencies appreciate against the dollar. Several emerging market currencies have registered double-digit percentage gains over the past year, with the Brazilian real and the Turkish lira rising by nearly 20%. Similarly, currencies in other regions have notched up double-digit gains such as the Philippine peso and Thai baht in Asia and the Slovakia koruna in Eastern Europe — they have all revalued by around 15% in the last 12 months. The Indian rupee just about makes the cut of the world’s ten best-performing currencies, on the back of a 14% year-over-year gain. Economic equations in the Middle East too were shaken up a fortnight ago when Kuwait became the first of the six Gulf Cooperation Council, or GCC countries to drop its 14-year old peg against the dollar. After long resisting such a change, Kuwait finally succumbed to revaluation pressures in a bid to regain some control over its monetary policy. It was otherwise being forced to cut interest rates despite an accelerating inflation rate, just to prevent huge foreign inflows. With several central banks explicitly adopting an inflation-targeting regime, it was only inevitable that policymakers would let the value of their currencies be more market-determined, given the threat of rising inflation in the advanced stages of the economic cycle. It is remarkable how many central banks in developing countries are now targeting an inflation rate in the range of 3 to 4%. They haven’t quite forgotten the 1970s when most central bankers ran easy monetary policies to shore up domestic demand and by mistake accommodated the commodity price boom. In contrast, despite the sustained and pronounced increase in commodity prices in the current cycle, inflationary expectations have remained well anchored with the average inflation in developing countries currently at an all-time low of 5.5%. While the predominant objective of central banks such as the Reserve Bank of India has been to control inflation, with the exchange rate acting as a tool in that effort, other central banks have been motivated by different factors in adjusting their currency management policy. For example, it was turning out to be too expensive for Banco Central Do Brasil, or BCB, to buy up to a billion dollars a day to keep to hold the real at 2.0 versus the dollar — an issue it faced earlier the year. With Brazilian interest rates still more than twice the level of US rates, the cost of sterilisation is rather prohibitive; Brazil’s $130 billion in foreign exchange reserves yield far less to the BCB than what the bank ends up paying on the domestic bonds it issues to mop up dollar liquidity. Indonesia has been facing a similar predicament and has also allowed the rupiah to strengthen significantly against the dollar. The more relaxed exchange rate intervention policy has been further abetted by the continued encouraging performance on the export front despite a rapid rise in their currencies. Many developing countries are net commodity exporters and the surge in commodity prices has helped offset the potential negative effect from a rising exchange rate. More interestingly, even in some commodity importing countries, such as in Eastern Europe, central banks have accepted upward pressure on their currencies as a natural consequence of a productivity boom. A strong reform momentum and continued benefits from greater integration with the European Union has led to very high productivity growth in Romania, Slovakia and other smaller Eastern European countries. Foreign direct investment flows have been gushing in, allowing these countries to easily finance large current account deficits. In fact, the breakdown in the linkage between a current account deficit and exchange rate performance highlights how movements in the capital account are now completely overshadowing the current account. This is reducing the importance of exports in the economic equation; policymakers know they can get growth going through domestic demand in a low interest rate and a high productivity environment.
The one country that continues to defy the new policy paradigm on exchange rates is China. The pace of the renminbi’s appreciation remains excruciatingly slow but an acceleration in the renminbi’s northward ascent is just a matter of time. Chinese policymakers are becoming more concerned about excessive liquidity in the system. This, in their assessment, is leading to ‘bubble-like’ conditions in local asset markets. It was apparent from the outset that the Chinese authorities would not let their currency appreciate until they thought it was in their best interest. With inflation also creeping up due to higher food prices, China’s policymakers are grudgingly veering towards the view that a pegged exchange rate is indeed leading to negative side-effects. The basic rule of international economics, which postulates that it is impossible to simultaneously manage an exchange rate and inflation target, will eventually apply to China as well. Policymakers elsewhere are further along that learning curve. There are still some residual concerns in other parts of the world about losing competitiveness to China, and this has prevented an even more relaxed approach on the exchange rate front. When China finally decides to act more decisively on the exchange rate front, policymakers in emerging markets across the board will allow their currencies to rally further. But regardless of what China does, the trading patterns on the currency marketplace already reveal that policymakers in emerging markets are accepting the fact that a stronger currency against the dollar is a natural consequence of greater prosperity.
Central banks in emerging markets spent much of the past few decades pursuing an exchange rate policy that often read: “Undervaluing our way to prosperity”. But the power of capital inflows has been so overwhelming of late that the new policy paradigm seems to be more along the lines of: “Revaluing our way (due) to prosperity”. From Brazil to Indonesia, policymakers are increasingly letting their currencies appreciate against the dollar. Several emerging market currencies have registered double-digit percentage gains over the past year, with the Brazilian real and the Turkish lira rising by nearly 20%. Similarly, currencies in other regions have notched up double-digit gains such as the Philippine peso and Thai baht in Asia and the Slovakia koruna in Eastern Europe — they have all revalued by around 15% in the last 12 months. The Indian rupee just about makes the cut of the world’s ten best-performing currencies, on the back of a 14% year-over-year gain. Economic equations in the Middle East too were shaken up a fortnight ago when Kuwait became the first of the six Gulf Cooperation Council, or GCC countries to drop its 14-year old peg against the dollar. After long resisting such a change, Kuwait finally succumbed to revaluation pressures in a bid to regain some control over its monetary policy. It was otherwise being forced to cut interest rates despite an accelerating inflation rate, just to prevent huge foreign inflows. With several central banks explicitly adopting an inflation-targeting regime, it was only inevitable that policymakers would let the value of their currencies be more market-determined, given the threat of rising inflation in the advanced stages of the economic cycle. It is remarkable how many central banks in developing countries are now targeting an inflation rate in the range of 3 to 4%. They haven’t quite forgotten the 1970s when most central bankers ran easy monetary policies to shore up domestic demand and by mistake accommodated the commodity price boom. In contrast, despite the sustained and pronounced increase in commodity prices in the current cycle, inflationary expectations have remained well anchored with the average inflation in developing countries currently at an all-time low of 5.5%. While the predominant objective of central banks such as the Reserve Bank of India has been to control inflation, with the exchange rate acting as a tool in that effort, other central banks have been motivated by different factors in adjusting their currency management policy. For example, it was turning out to be too expensive for Banco Central Do Brasil, or BCB, to buy up to a billion dollars a day to keep to hold the real at 2.0 versus the dollar — an issue it faced earlier the year. With Brazilian interest rates still more than twice the level of US rates, the cost of sterilisation is rather prohibitive; Brazil’s $130 billion in foreign exchange reserves yield far less to the BCB than what the bank ends up paying on the domestic bonds it issues to mop up dollar liquidity. Indonesia has been facing a similar predicament and has also allowed the rupiah to strengthen significantly against the dollar. The more relaxed exchange rate intervention policy has been further abetted by the continued encouraging performance on the export front despite a rapid rise in their currencies. Many developing countries are net commodity exporters and the surge in commodity prices has helped offset the potential negative effect from a rising exchange rate. More interestingly, even in some commodity importing countries, such as in Eastern Europe, central banks have accepted upward pressure on their currencies as a natural consequence of a productivity boom. A strong reform momentum and continued benefits from greater integration with the European Union has led to very high productivity growth in Romania, Slovakia and other smaller Eastern European countries. Foreign direct investment flows have been gushing in, allowing these countries to easily finance large current account deficits. In fact, the breakdown in the linkage between a current account deficit and exchange rate performance highlights how movements in the capital account are now completely overshadowing the current account. This is reducing the importance of exports in the economic equation; policymakers know they can get growth going through domestic demand in a low interest rate and a high productivity environment.
The one country that continues to defy the new policy paradigm on exchange rates is China. The pace of the renminbi’s appreciation remains excruciatingly slow but an acceleration in the renminbi’s northward ascent is just a matter of time. Chinese policymakers are becoming more concerned about excessive liquidity in the system. This, in their assessment, is leading to ‘bubble-like’ conditions in local asset markets. It was apparent from the outset that the Chinese authorities would not let their currency appreciate until they thought it was in their best interest. With inflation also creeping up due to higher food prices, China’s policymakers are grudgingly veering towards the view that a pegged exchange rate is indeed leading to negative side-effects. The basic rule of international economics, which postulates that it is impossible to simultaneously manage an exchange rate and inflation target, will eventually apply to China as well. Policymakers elsewhere are further along that learning curve. There are still some residual concerns in other parts of the world about losing competitiveness to China, and this has prevented an even more relaxed approach on the exchange rate front. When China finally decides to act more decisively on the exchange rate front, policymakers in emerging markets across the board will allow their currencies to rally further. But regardless of what China does, the trading patterns on the currency marketplace already reveal that policymakers in emerging markets are accepting the fact that a stronger currency against the dollar is a natural consequence of greater prosperity.
05.06.07 open
EUR 1.3502
JPY 121.75
GBP 1.9925
CHF 1.2223
AUD 0.8355
CAD 1.0582
NZD 0.7491
EUR/GBP 0.6772
EUR/JPY 164.43
JPY 121.75
GBP 1.9925
CHF 1.2223
AUD 0.8355
CAD 1.0582
NZD 0.7491
EUR/GBP 0.6772
EUR/JPY 164.43
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