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Anna Hazare and His Movement

Anna Hazares Jan Lokpal bill movement has been discussed at lengths in academic spheres for
its vigor and unpredictability. Opinions are highly polarized and there is more red herring than
logic on both sides.

Origins Anna Hazare was a prominent social activist in Maharashtra even before Jan Lokpal
bill movement. His credibility was established over a long period by anti-corruption movements
in Maharashtra that even claimed few ministers of Maharashtra. His method of agitation was
fasting, reminiscent of the father of our nation.
Jan lokpal bill movement was led by Anna Hazare. Though, the party (non-political) organizing
the movement was India Against Corruption (IAC). IACs past and composition is not clearly
known, their website claim themselves to be related to Hindustan Republican Association. What
is clear though, is that it is an umbrella organization for civil right activists.

Prior to Jan Lokpal bill movement Country played witness to 2G Spectrum allocation scam
and Commonwealth Games scam. In both the cases, the government initially refuted allegations
of wrong doing, later courts found prima-facie evidence against them and ministers went to jail.
By this time (2011) many 24 hour news channels had mushroomed and a highly competitive
news market was ready to heighten any misery of government.
IAC saw the opportunity. It was the right time to push for Jan Lokpal bill. It is a bill that aims at
forming an independent executive body to investigate corruption cases. IAC succeeded in
convincing government to bring a legislation for Lokpal, though government wanted Lokpal to
be just an advisory body (like CVC). IAC then contacted Anna Hazare to lead an agitation to
force central government to include civil society in drafting committee of the bill.

Agitation for joint drafting committee On 5
April, 2011, Anna Hazare sat on a fast at Jantar
Mantar, New Delhi. He was supported by prominent members of civil society like kiran Bedi,
Arvind Kejriwal, Swami Agnivesh, Pranshant Bhushan and Shanti Bhushan. Shanti Bhushan, the
former law minister, had himself introduced Lokpal bill in parliament as early as 1968, though
the bill failed to pass Rajya Sabha.
News channels started gradually picking up the story as they realized its relevance to the times.
Eminent members of Team Anna started giving interviews to news channels while the
government arrogantly ignored the fasting initially. As the news spread, the crowd at Jantar
Mantar started swelling up. Government after realizing that the masses are rallying behind Anna,
accepted to form a joint drafting committee. Joint drafting committee included a group of
ministers and prominent members of Team Anna. Annas fast ended in three days.

Second Agitation Between 9
April, 2011 and 15
August, 2011, only drama played out in
the joint drafting committee where government and Team Anna accused each other of non-
cooperation. Anna called for another fast from 16
August, 2011. The timing was perfect for
adding a tint of patriotism in the movement. Delhi Police laid 22 conditions in front of Team
Anna to allow them to protest in Ramlila ground. These condition were nearly impossible to
fulfill and hence were rejected by Team Anna. What followed this, was a blunder by Delhi
Police. Though, blunders were no new thing for Delhi Police (under Central Home Ministry), a
couple of months before, they lathi charged sleeping supporters of Baba Ramdev!
On morning of 16
August, 2011, Anna Hazare was arrested and sent to Tihar jail. Arvind
Kejriwal, Kiran Bedi and Manish Sisodia were also taken into preventive custody by the Delhi
Police. News channels predictably and rightly lashed out at government. With Senior members
of movement in custody, young members of IAC took to media, they called the arrest as
violation of freedom of speech, repeat of emergency days, etc. Facing criticism from all sides
government ordered release of Anna in evening, though Anna left Tihar jail only after three days
when he got Ramlila ground for three-weeks with virtually no conditions. The ruling party then
tried to defame Anna by raking up an observation of former Supreme Court judge on
irregularities in trusts headed by Anna. This did not go down well with general public. One who
is knee deep in mud should not throw mud on others.
Intense negotiations began between Team Anna and government. Team Anna made three
specific demands regarding citizen's charter, Lokayuktas and inclusion of lower bureaucracy
under Lokpal's purview. Government maintained that legislation can only be done by parliament
and not by Team Anna. As days passed, Annas health deteriorated, the pressure on government
mounted and government finally gave into demands of Anna. Annas fast lasted for 12 days.
Team Annas good media management and well defined strategies made government of the day
look pathetic.

Third Agitation - On 27
December, 2011, Anna began fasting at MMRDA ground, Mumbai,
to demand a stronger Lokpal bill than that was debated in parliament then. According to Team
Anna the Lokpal bill that was being discussed in parliament was without teeth. Anna had to
abruptly end his fast on 28
December, 2011 when he fell ill. What was actually different this
time was the size of crowd, it was substantially smaller than the crowds of Ramlila ground.
Something went wrong this time for Team Anna. Critics speculated that there was fatigue in
general public and media, while others believed that Mumbai was politically less active than
Delhi. Actually, there are only two logical reasons, firstly the fast of Mumbai was too short-
lived for large crowds. Crowds generally swell up gradually as days pass (like in Ramlila
ground), during this period IAC organizers used to mobilize people on the ground to participate
in the agitation. Also since, Mumbai was new territory for IAC, they relied heavily on television
rather than ground mobilization (which obviously didnt work). Secondly, this time government
made no mistake that could have angered the masses.

Aftermath There was a recurring demand during the movement that Team Anna should join
politics. Arvind Kejriwal, a prominent member of Team Anna, founded a political party Aam
Aadmi Party(AAP) on 26
November, 2012. Anna Hazare has remained apolitical and has also
asked AAP not to use his name or photograph. AAP is aggressively campaigning in Delhi for
upcoming assembly elections. Anna Hazare has said that he will campaign against ruling party
in General Election of 2014 because they failed to bring a strong Lokpal bill.

Conclusion Though, Jan Lokpal bill movement was triggered by Annas fast, a favourable
condition was developed due to series of scams. 24 hour television news coverage added fuel to
the fire. The movement wasnt a social or political revolution but it reminded us the power of
media management and the influence that credible non-political persons have over the masses.

Written by: Yash Deep Pandey (PGDIE 43, NITIE, MUMBAI)

Commonwealth Games, Delhi

The 2010 Commonwealth Games were held in Delhi, India, from October 3
to 14
2010. A total of 6,081 athletes from 71 Commonwealth nations competed in 21 sports and
272 events, making it the largest Commonwealth Games to date. It was also the largest
international multi-sport event to be staged in India. The opening and closing ceremonies
were held at the Jawaharlal Nehru Stadium, the main stadium of the event. It was the first
time that the Commonwealth Games were held in India and the second time it was held in
Asia after Kuala Lumpur, Malaysia in 1998.
Preparation for the Games received widespread international media attention, with
criticism being levelled against the organisers for the slow pace of work, as well as issues
related to security and hygiene. However, all member nations of the Commonwealth of
Nations participated in the event, except Fiji and Tokelau. The final medal tally was led
by Australia. The host nation India achieved its best performance ever at the Games, finishing
second overall.
The initial total budget estimated by the Indian Olympic Association in 2003 for
hosting the Games was 1620 crore. In 2010, however, the official total budget soon
escalated to an estimated 11500 crore, a figure which excluded non-sports-related
infrastructure development. Business Today magazine estimated that the Games
cost 60000 crore. The 2010 Commonwealth Games are reportedly the most expensive
Commonwealth Games ever.
To expand road infrastructure, flyovers, cloverleaf flyovers, and bridges were built to
improve links for the Games and city in general. Road-widening projects were finished with
an emphasis being placed on expanding national highways. The Delhi Metro was expanded to
accommodate more people and boost the use of public transport during the 2010 games.
Indira Gandhi International Airport was modernised, expanded, and upgraded.
In preparation for an influx of English-speaking tourists for the Games, the Delhi
government implemented a program to teach English, and the necessary skills for serving
tourists, to key workers. To prepare for the energy-usage spike during the Games and to end
chronic power cuts in Delhi, the government undertook a large power-production initiative to
increase power production to 7,000 MW from 4,500 MW. To achieve this goal, the
government streamlined the power distribution process, direct additional energy to Delhi, and
constructed new power plants.

In addition to physical preparation, free accommodation for all athletes at the Games
Village, as well as free transport and other benefits, such as a free trip to the famed Taj
Mahal and a reserved lane for participants on selected highways was provided. A large-scale
construction and "beautification" project has resulted in the demolition of hundreds of homes
and the displacement of city dwellersat least 100,000 of New Delhis 160,000 homeless
people have removed from shelters, some of which have been demolished. Bamboo screens
have been erected around city slums to separate visitors from the sights of the slums, a
practice which human rights campaigners have deemed dishonest and immoral.
The opening ceremony was held at the Jawaharlal Nehru Stadium, the main stadium
of the event, in Delhi. It began at 19:00 (IST) on October 3
. The ceremony featured over
8,000 performers, and lasted for two-and-a-half hours. It is estimated that 350 crores were
spent to produce the ceremony.

The Prince of Wales (representing Elizabeth II as Head of the
Commonwealth) and President of India Pratibha Patil officially declared the Games open.

The games closed on October 14
, 2010 in a colourful closing ceremony featuring
both Indian and Scottish performers. The Commonwealth Games flag was handed over to
representatives of Glasgow, Scotland, which will host the XX Commonwealth Games in
A number of concerns and controversies surfaced before the 2010 Commonwealth
Games in Delhi, which received widespread media coverage both in India and internationally.
During the construction of the Games Village, there was controversy over financial

profiteering by the Delhi Development Authority and private real estate
companies and inhumane working conditions. There have been documented instances of the
presence of young children at hazardous construction sites, due to a lack of child care
facilities for women workers living and working in the labour camp style work sites.
Campaigners in India have accused the organisers of enormous and systematic violations
of labour laws at construction sites. Nearly 50 construction workers have died in the two
years while employed on Games projects. In preparation for the Commonwealth Games, the
city's slums were bulldozed in order to make room for shopping malls and expensive real
estate, leaving nearly 200,000 people from three large slum clusters in Delhi, homeless.
Several problems with the functionality of equipment and infrastructure during the
events were reported. For instance, a disproportionate number of swimmers fell ill with
intestinal complaints, leading to concerns over the cleanliness and sanitation of the pool and a
footbridge under construction for the Games near the Jawaharlal Nehru Stadium collapsed,
injuring at least 23 people, mainly workers, underscoring fears of poor workmanship.
The detailed preliminary findings by the CBI included the award of work contracts at
higher prices, poor quality assurance and management, and work contracts awarded to
ineligible agencies. There are also allegations of widespread corruption in various aspects of
organising the games including procurement and awarding contracts for constructing the
game venues. Many scandals have come to light, such as "shadowy off-shore firms, forged
emails, inexplicable payments to bogus companies and inflated bills for every purchase
from toilet paper to treadmills."
The Commonwealth Games was severely criticised by several prominent Indian
politicians and social activists because billions of dollars have been spent on a sporting event
that is "irrelevant to the common man", despite the fact that India has one of the world's
largest concentration of poor people. Additionally, several other problems related to the 2010
Commonwealth Games have been highlighted by Indian investigative agencies and media
outlets; which include, serious corruption by officials of the Games' Organising Committee,
delays in the construction of main Games' venues, infrastructural compromise, possibility of
a terrorist attack, and exceptionally poor ticket sales before the event. A total of 53 corruption
cases were being examined by the Central Vigilance Commission. As of September 2012, 28
of them were still in different stages of investigation, 13 were referred to CBI for further
investigation and 12 were closed. Indian businessman Azim Premji called the 2010
Commonwealth Games a "drain on public funds" and said that hosting the high-expense
Games in India is not justified given that the country had more important priorities facing it,
such as education, infrastructure and public health.
References: Wikipedia (


India's 1
and Asia's 5
metro rail was introduced in Kolkata.
Over a length of 16.45 km and the work on this project was sanctioned on 1.6.1972
The construction work started in 1973-74.
After crossing so many hurdles Calcutta Metro started its journey on October 24, 1984

unprecedented growth of personal vehicles.

Growing traffic congestion.

Air pollution and traffic accidents has become a major concern.

To avoid congestion at peak hours.

Time saving.

Reduced fuel consumption.

Requires 1/5th energy per passenger km compared to road-based transport system.
Causes less noise, no air pollution and eco friendly transport system.
Occupies no road space if underground and only about 2.60 meters width of the road if
Reduces journey time.
Cost effective mass transport system.
Reducing traffic transport problems.

More secure & ecofriendly.

Air-conditioning and ventilation system for environmental control of stations and tunnels.

Automatic ticket vending and checking system.

Automatic door opening / closing .

A public address system is provided on the trains to announce approaching stations.

Kolkata Metro Rail.
Delhi Metro Rail.

Mumbai Metro Rail
Bangalore Metro Rail.
Hydrabad Metro Rail.
Chennai Metro Rail.
Kochi Metro Rail

Luggage carrying facility should be there.

To encourage people to use Metro there should be a separate parking place for the
monthly pass holders.

To increase the speed of Metro Rail.
Sub-prime Crisis

Debtors are broadly classified into prime and sub-prime debtors, where the prime are
people who are considered creditworthy and sub-prime are considered less creditworthy .
Normally banks do not lend to those people who are not creditworthy.

Although it would not be prudent to lend to less creditworthy but banks do lend to sub-
prime debtors. Since sub-prime debtors are considered less creditworthy for various
reasons such as low income, etc banks lend to them at higher rates of interest. So, Sub-
prime borrowers also pay a risk premium.

In some cases risks were very high and loans were given to NINJA (No Income, Job or
Assets) borrowers .This is the origin of the sub-prime crisis.

It should be understood that though sub-prime crisis is used as generic term, it refers to
the credit problem among various sub-prime borrowers (around 8% of total mortgages in
United States) in the residential market in United States. Like all borrowers in the world,
the interest paid on residential mortgages in the United States is linked to the US Federal
Reserves Fed Funds Rates.

Between 2004 and 2006, because of incipient inflation in US economy, the Federal
Reserve increased its discount rate from 1% to 5.25%. Because of this discount, holders
of residential mortgages also saw rise in their payments on their house loans. This rise in
rates proved to be a disaster for the banks that gave loans to the sub-prime borrowers.

As the primary issue with sub-prime borrowers is that they are likely to be people with
low income .When they faced higher mortgage payments, in some cases they were unable
to make payments and banks started repossessing houses.

The banks sold the repossessed houses to recover their dues. However, due to higher
interest rates, people became cautious in borrowing from bank to buy houses and there
was a slowdown in demand in the housing market, which made these banks to hold those
assets that people were not willing to buy.

The sub-prime crisis begins to unfold when people started defaulting on the housing
mortgage. Initially, it was considered that the problem was limited to a few lenders only
and people did not give it much thought but afterwards things started unraveling.

The lenders take the hit usually when borrowers default but still the crisis spread far and
wide. The reason is that the mortgages held by banks are bundled and then sold to other
institutions. These institutions then slice these mortgages into Residential Mortgage
Backed Securities (RMBS) or we can say, securities that are backed by collateral, the
collateral here are the mortgages held by the sub-prime borrowers.


These RMBS are then rated by various rating institutions such as Standard & Poors ,
Moodys, etc based on various parameters. These RMBS are divided further and sold as
collateralized debt obligations (CDOs) to several investors and investors bought these
CDOs based on their appetite for debt.

Although its risky but the people who hold the riskiest debt, get paid the highest when
times are good, and get hit worst when times are bad.

The CDO issue first came in picture in June when Bear Stearns hedge fund borrowed the
money from the Merrill Lynch and gave their CDOs as collateral. Merrill Lynch then
decided to sell collateral but soon realized that there was some problem when they were
unable to sell because their sale was driving prices down.

Thus the market realized that there was a very serious issue with the CDOs that went
beyond the Bear Stearns failure. As these CDOs are part of the RMBS, people realized
that there was no solid collateral backing the RMBS because of the defaults by the sub-
prime borrowers.

Then two issues arose. First, no one knew that how much of these CDOs banks and
various financial institutions were holding and second, banks and financial institutions
did not know the worth of CDOs because the market for the CDOs had collapsed.
Because of this issue, the market started punishing those banks that held these CDOs. It
also came out that there were more lenders involved in this mess than it was initially

It is estimated that about 127 lenders are caught in this mess and the largest mortgage
lender in the United States fell by 13% after warning was issued about the potential hit on
their balance sheet. One of the biggest concerns of this disaster is that instruments that
were rated AA have now also started defaulting.

As the result of this, Rating agencies have now started to reduce all RMBS to lower grade
backed by sub-prime mortgages which will force banks to sell them because of the capital
norms but this will cause a further rise in the prices.

Sub-prime crisis raises two very important issues. First, the way banks lend money to
people without properly checking their credentials and Second, the pathetic rating process
used by the rating agencies.

While both issues are hazardous to the system, rating process also raises issues of moral
hazard as the rating agencies profited hugely from rating these RMBS.

Coalgate scam
Coal allocation scam or Coalgate, as referred by the media, is a political scandal concerning the
Indian government's allocation of the nation's coal deposits to public sector entities and private
companies by Prime Minister Manmohan Singh. In a draft report issued in March 2012,
the Comptroller and Auditor General of India (CAG) office accused the Government of India of
allocating coal blocks in an inefficient manner during the period 20042009 causing huge loss.
Over the summer of 2012, the opposition BJP lodged a complaint resulting in a Central Bureau
of Investigation probe into whether the allocation of the coal blocks was in fact influenced by
What are coal blocks?
Parts of Orissa, Jharkhand, Chhattisgarh, pockets of central & south India that have coal are
divided into blocks and leased to miners.
How're blocks allotted Brief timeline
1973: Government takes over coal mining
1976: Private steel producers allowed to own coal mines
1993-2005: 41 private companies and 29 Government ones get licenses. From 1993, power
companies allowed to own captive mines
2004: UPA Government realizes Coal India wouldn't produce enough to meet demand decided to
allot more captive mines to private and state-owned players
2006-2009: Licenses for 75 blocks go to private firms, 70 to Government companies.
What went wrong with the allotments?
Coal ministry under PM gave licenses to state and private companies through screening
committee set up in 1992
Criteria for giving licenses modified in 2005, 06, 08
CAG felt guidelines allowed "windfall gain" to firms that got captive blocks
The essence of the CAG's argument is that the Government had the authority to allocate coal
blocks by a process of competitive bidding, but chose not to. As a result both public sector
enterprises (PSEs) and private firms paid less than they might have otherwise
CAG said process of bringing transparency in allocation process delayed at various stages
This benefitted private players
Was government method flawed?
CAG says coalfields allotted in non-transparent manner
No information on how applications evaluated, finalized
Ministers and CMs of coal-rich states lobbied for allotment to private players
Several firms allegedly sold coal meant for internal use in open market
CAG said objective to boost coal production to meet demand from new power plants not met
Firms squatted on blocks Of 86 blocks, which were to produce coal by 2010-11, only 28
(including 15 private sector) started production as of 31 March, 2011
Government defense
Government defended delay in passing bill saying policymaking process can take years in a
Government said opposition to coal auction came from opposition-ruled states
Auctions can result in higher prices for consumers
So, auctions enable Government maximize revenues, they can hurt consumers
Highlights of CBI report on coal block allocations
1. On April 26, 2013, the CBI Director Ranjit Sinha submitted an affidavit in the Supreme
Court stating that the Coal scam status report was shared with the Law Minister Ashwani
Kumar, Joint Secretary-level officers from the Prime Ministers Office (PMO) and the Coal
Ministry before presenting it to the Apex Court on March 8.
2. On April 29, CBI stated in the Supreme Court that 20 per cent of its original report was
changed by Government.
3. On April 30, Additional Solicitor General Harin Raval resigned for having misled the
Supreme Court.
4. The three-judge Bench of Justices RM Lodha, Madan B Lokur and Kurian Joseph directed
the CBI to file an affidavit by May 6 regarding the changes made in the Coalgate Status
Report, at whose instance the changes were made, and the effect of these changes on the
entire investigation.
5. In a landmark decision, SC said that it will liberate CBI from political interference to make
CBI credible, impartial and independent.
Consequences of Scam
Coalgate caused a loss of Rs 1.86 lakh crore.
Apart from the windfall loss, scam can also be blamed for loss of Rs 126 crore due to non -
functioning of the parliament. The entire monsoon session of the parliament was washed off with
hardly four bills being passed. Functioning for just six of the 19 functioning days.
coal- blocks-coal-auction
Speed and productivity of a supply chain has become an important factor of growth for
organisations. Cross-docking is just one strategy that can be implemented to help achieve a
competitive advantage. Implemented appropriately and in the right conditions, cross-docking
can provide significant improvements in efficiency and handling times.
It is a practice in logistics of unloading materials from an incoming semi-trailer truck or railroad
car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no
storage in between. This may be done to change type of conveyance, to sort material intended for
different destinations, or to combine material from different origins into transport vehicles (or
containers) with the same, or similar destination.
Cross-Dock operations were first pioneered in the US trucking industry in the 1930s, and have
been in continuous use in LTL (less than truckload) operations ever since. The US military began
utilizing cross-dock operations in the 1950s. Wal-Mart began utilizing cross-docking in the retail
sector in the late 1980s.
In the LTL trucking industry, cross-docking is done by moving cargo from one transport vehicle
directly into another, with minimal or no warehousing. In retail practice, cross-docking
operations may utilize staging areas where inbound materials are sorted, consolidated, and stored
until the outbound shipment is complete and ready to ship.
Advantages of retail cross-docking
Streamlines the supply chain from point of origin to point of sale
Reduces handling costs, operating costs, and the storage of inventory
Products get to the distributor and consequently to the customer faster
Reduces, or eliminates warehousing costs
May increase available retail sales space.
Disadvantages of cross-docking
Potential partners don't have necessary storage capacities
Need for an adequate transport fleet to operate
Need for a computerized logistics system
Additional freight handling can lead to product damage

Typical applications
"Hub and spoke" arrangements, where materials are brought in to one central location
and then sorted for delivery to a variety of destinations
Consolidation arrangements, where a variety of smaller shipments are combined into one
larger shipment for economy of transport
Deconsolidation arrangements, where large shipments (e.g. railcar lots) are broken down
into smaller lots for ease of delivery.
Retail cross-dock example: Using the cross-dock technique, Wal-Mart was able to effectively
leverage their logistical volume into a core strategic competency.
Wal Mart operates an extensive satellite network of distribution centers serviced by
company owned trucks
Wal Marts satellite network sends point of sale (POS) data directly to 4,000 vendors.
Each register is directly connected to a satellite system sending sales information to Wal
Marts headquarters and distribution centers.
Factors influencing the use of retail crossdocks
Cross-docking is dependent on continuous communication between suppliers,
distribution centers, and all points of sale.
Customer and supplier geographyparticularly when a single corporate customer has
many multiple branches or using points
Freight costs for the commodities being transported
Cost of inventory in transit
Complexity of loads
Handling methods
Logistics software integration between supplier(s), vendor, and shipper
Tracking of inventory in transit
Crossdock facility design
Cross-docks in practice are generally designed in an "I" configuration, which is an elongated
rectangle. The goal in using this shape is to maximize the number of inbound and outbound
doors that can be added to the facility while keeping the amount of floor space inside the facility
to a minimum. In 2004, Bartholdi & Gue demonstrated that this shape is indeed ideal for
facilities with 150 doors or less. For facilities with 150-200 doors a "T" shape is more cost
effective. Finally, for facilities with 200 or more doors the cost minimizing shape will be an


Corruption in India
The simplest definition is,
Corruption is the misuse of public power (by elected politician or appointed civil servant) for
private gain.
Corruption is the misuse of entrusted power (by heritage, education, marriage, election,
appointment or whatever else) for private gain.
The broader definition covers not only the politician and the public servant, but also the CEO
and CFO of Company, The notary public, and the team leader at workplace, the administrator or
admission officer to a private school or hospital, the coach of a soccer team, etc.
Main cause of corruption in India
1. Continuation of confused nehruvian socialism for the last of few decades and hypocrisy of
current liberalism when large scale leaking subsidies still continue.
2. Weak ineffective local governments in spite of amendments 73 and 74 to constitution of India.
3. Fixed and purchased vote bank with manipulated voter lists.
4. Our fundamental rules in governance, police ,cooperative and other welfare societies etc are
still based on 1860 act as amended but not implemented.
5. Domestic LPG cylinders are sold to commercial organization/hotels etc at much higher rate.
All deputy commissioners of major districts know about it but are helpless
6. First the govt. recovers TDS at much higher percentage and when question of refund comes,
for year refund is not given to income tax official. If you complain there is more harassment in
future to make you run from pillar to post.
7. Our spiritual gurus openly accept donation of black money, the donor does not want receipt
nor are gurus keen to give receipts.


How to stop minimize corruption.
1. Give better salary in govt. job
2. Increse number of workers.
3. Law to dismiss from service if found to be involved in corruption.
4. Keep transaction online and provide bill for every purchase
5. Camera in most govt. office.
6. Speed up the work process in govt. institutes.
7. Make media responsible and fix laws to be so.
8. Verify the selection procedures
9. Keep inflation low.
10. Speed up the judgment and increase the courts.

Euro Crisis
The European sovereign debt crisis (often referred to as the Eurozone crisis) is an
ongoing financial crisis that has made it difficult or impossible for some countries in the euro
area to repay or re-finance their government debt without the assistance of third parties.
This is also known as Eurozone sovereign debt crisis. The term indicates the financial
woes caused due to overspending by some European countries. When a nation lives beyond its
means by borrowing heavily and spending freely, there comes a point when it cannot manage its
financial situation. When that country faces insolvency. (Insolvency: when it is unable to repay
its debts and lenders start demanding higher interest rates, the cornered nation begins to get
swallowed up by what is known as the Sovereign Debt Crisis )
Euro Zone: The eurozone is an economic and monetary union (EMU) of 17 European Union
(EU) member states that have adopted the euro () as their common currency and sole legal
tender. The eurozone currently consists of Austria, Belgium, Cyprus, Estonia, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia,
Slovenia, and Spain
The Eurozone debt crisis seems to surround Greece the most. The actual beginning is
how the European Union (EU) began in 1993 where 27 European nations "agreed to form an
alliance that could compete economically with larger nations such as the US". This is what
created the currency of the euro. The euro's value has decreased over the past few years due to
the European Debt Crisis.
The idea was to form a super state with the monetary union of the nations which would
in turn lead to the political union just like USA. The politics of economic union was the first step
towards the thought of United States of Europe.
You cannot have a monetary union without a fiscal union; you cannot have a fiscal
union without in effect a single finance minister which mean you should have a full political
union Lord Lawson, Chancellor of the Exchequer, 1983-89.
Thus it was great risk but politicians were anyway ready to gamble.
The EDC began in 2008 with the crash of Icelands banking system, which spread to
Greece. Greece had experienced corruption and spending as its government continued borrowing
money despite not being able to produce sufficient income through work and goods. It was
admitted that Greece's debts had reached 300bn euros, the highest in modern history
Spain, Portugal, and the other nations later followed Greece.
Major causes for EDC:
Fiscal manipulation to meet the con Maastricht Treaty criteria flawed the entire concept of a
successful monetary union thus leading to EDC.
1) The constraint that the Government debt must be 60% or less of GDP was dropped and
instead it was necessary to show that the country was reducing its debt towards that ratio.
This imposition could have prevented over indebted countries like Italy to participate in
the first place.
2) Another criterion was that the government deficit must be 3% or less of the GDP. Many
countries in this alliance hardy met these criteria and most of them manipulated to show a
3% deficit using financial derivatives transactions. These contracts were meant to reduce
public deficit today and enlarge it 10-15 yrs later.
3) Greece on the other hand completely changed the figures and put forward fake numbers
allowing it to be a part of Euro Zone.
4) Even after the formation of Euro, it was decided that annual deficits must not exceed 3%
of GDP but in 2003 Europes two powerful members killed that rule.
The Eurozone debt crisis impacted market sentiment. The countrys economic condition
will remain sound so as to withstand the effects of the lingering debt crisis in Europe and
uncertainties in the United States. 2012 was a tough one, with reduced global growth outlook due
to global uncertainties. Trouble abroad curbed the countrys economic growth last year and
dampened the market. The debt crisis in the euro zone rattled investors and heightened demand
for safe haven and assets such as US dollars and bonds.
In Ireland the government slashed public spending. They raised taxes. As an austerity
measure the government imposed a tax of 100 euros on every household in Ireland.
Greece, Italy and Spain suffer from vast cuts in public spending, rising unemployment
leading to the decreased standard of living.
This crisis also affected the banks in UK because these banks are the biggest creditors to
the banks in Euro Zone.

Two approaches:
1) Cut public spending: This would mean even more unemployment and thus people will
cut their own expenses and wont be able to pay debts which they have borrowed.
2) Dont cut public spending: This would mean an increase in the debt of your country
which has risk of a financial collapse leading to a devastating effect.

Thus these countries have chosen the first option along with the emergency loans from the Banks
in U.S. which are being used as a bailout for the European banks.

Thus another debt is the only solution to solve this debt crisis.
FDI in single brand and multi brand retail:
Retail sector in India:
Retail Sector in India accounts for 14-15 % of GDP of our country. It is estimated to be around
US $ 450 Billion and one of the top five retail markets in the world by economic value, source to
the employment over 40 million people. It is the most attractive retail markets in the world.
Retailing in India consists of
1.Organised Retail Sector: Trading activities undertaken by licensed Retailers who are
registered for sales tax, income tax etc. Currently it accounts for 4% of total market. Growth of
Organised retail sector is at the rate of 35% per year .
2.Unorganised Retail Sector: Traditional formats of low cost retailing; Local shops,Owner
manned general stores,hand carts, pavement vendors etc.
Timeline for FDI in Retailing:
In 2006, 51% FDI in Single brand retail is approved .
Untill 2011, There was no FDI in Multibrand retail and FDI in Single brand was limited to 51%.
In January 2012, Government of India allowed 100% FDI in Single brand retailing.
On 7

December 2012, Government of India allowed 51% FDI in Multibrand retailing.
The important condition is that a foreign retailer should source 30% of its goods from India.
Individual states in Indian republic can approve or reject FDI in there state.
What is FDI?
FDI is described as investment into the business of a country by a company or an individual in
another country with the objective of establishing a lasting interest in the investee economy. .
Mostly the investment is into production by either buying a company in the target country or by
expanding operations of an existing business in that country.
Such investments can take place for many reasons, including to take advantage of cheaper
wages, special investment privileges (e.g. tax exemptions) offered by the country, low cost of
raw materials for manufacturing processes.
Why Countries Seek FDI ?
Domestic capital is inadequate for purpose of economic growth. Foreign capital is usually
essential, at least as a temporary measure, during the period when the capital market is in the
process of development. Foreign capital usually brings it with other scarce productive factors
like technical knowledge, business expertise.
Scope of FDI in India : India is the 3rd largest economy of the world in terms of purchasing
power parity and thus looks attractive to the world for FDI. Even Government of India, has
been trying hard to do away with the FDI caps for majority of the sectors, but there are still
critical areas like retailing and insurance where there is lot of opposition from local Indians /
Indian companies.
Major benefits of FDI in Retail :1.Employment generation and increase in production helps in
capital formation by bringing fresh capital.
2.FDI helps in transfer of new technologies, management skills, intellectual property etc .
3.It increases competition within the local markets and this brings higher efficiencies.
4. Due to FDI , share of organized retail sector in India will increase and thus it will increase tax
revenues to government.
5. It will help in increasing exports. Others are quality, choice ,convenience etc.
Why fear FDI:1.Small enterprises fear that they may not be able to compete with world class
large companies and may ultimately be edged out of business and large giants of the world try to
monopolies and take over the highly profitable sectors.
2.Foreign retailers are free to buy goods from anywhere in the world and sell them in Indian
markets. This will affect the local goods market.
3. Such foreign companies invest more in machinery and intellectual property than in wages of
the local people.
4. Government has less control over the functioning of such companies as they usually work as
wholly owned subsidiary of an overseas company.
5.There is certain possibility of investment of black money present in overseas banks in the name
of FDI.
Procedure for receiving FDI in an Indian company: An Indian company may receive Foreign
Direct Investment under the two routes as given under:
1.Automatic Route . 2. Government Route.
Authorities Dealing With Foreign Investment: 1. Reserve Bank of India .
2.Foreign Investment Promotion Board (popularly known as FIPB).
2.Secretariat for Industrial Assistance (SIA).
3. Foreign Investment Implementation Authority (FIIA) etc.
References:1. RBI website.
2.Editorials in The Hindu.
3.Newspaper reports.
Kudankulam Nuclear Controversy

Kudankulam is a place in the Tirunelveli district in Tamil Nadu, India. It is situated 25 km
north-east of Kanyakumari and 35 km from Nagercoil.
Kudankulam Atomic Power Project is a nuclear power station for which the construction is
completed and commissioning put on hold due to the antinuclear protests by the locals.
An Inter-Governmental Agreement on the project was signed on November 20, 1988 by
Prime Minister Rajiv Gandhi and Soviet President Mikhail Gorbachev, for the construction of
two reactors.
1988 - MOU signed between India and Soviet for construction of Nuclear Power Plant in
1990 - First phase of protest was held for opposing the diversion of water from Pechiparai
1998 - Till 1998 the project of agreement was put on hold due to break up in Soviet.
2000 - Construction of Kudankulam Nuclear Power Plant Started Before 2004 Road has to
be used as the mode of Transport for Reactors to be used in power plant.
2004 - Small Port had been constructed for transportation and become operational in
2007 - MOU was signed between India and Russian to promote Nuclear Energy.
2008 - The KNPP team decided to go for additional four reactors at the atomic station.
2009 - The first schedule project began in December 2009.
2010 - Hydraulic Test was carried out and Second schedule would be on March.
2011 - First schedule of operation began in June. In the middle of March 2011 India has
started the main stage of equipment tests at first nuclear power unit of Koodankulam under
2012 - Second schedule plan of operation was on March.
1) Cordial diplomatic relation with Russia.
2) Reduced dependency on USA only.

1) In 2001, the ministerial group for economic affairs announced that the project cost
would be Rs. 13,171 crores and the Indian government would invest Rs. 6,775
crores with the remainder amount coming in as Russian loan with 4 percent
2) The fuel cost was estimated to be Rs. 2,129 crores which would be entirely
Russian loan.
1) 20,000 people living within 3 km range would have to be rehabilitated.

2) The fishermen are concerned about fishing rights & temperature rise of water.

3) The so called intellectuals who genuinely feel that nuclear power is unsafe.

Technological -
1) Two 1 GW reactors of the VVER-1000 model and four third generation VVER-
1200 reactors of 1170 MW has been constructed.
2) Both units are water-cooled, water-moderated power reactors with safety
measures such as passive heat removal system, double containment, core
catcher, and hydrogen re-combiner installed in the reactors instead of
conventional methods .
Pros & Cons
+ India's electrical power need is projected
to jump by more than four times in the next
20 years, from the current 180GW to 770
GW in year 2032.

- More than 1 million people live
within the 30 km radius of the
KKNPP which far exceeds the AERB
(Atomic Energy Regulatory Board)

+ The country does not have large reserves
of conventional energy sources like
petroleum and gas while it is also facing
intermittent coal shortages.

- The coolant water and low-grade
waste from the KKNPP are going to
be dumped in to the sea which will
have a severe impact on fish
+ Beneficial impact on land, Flora and
Fauna: As of now, a total of 23,890 plants
and trees have been developed for the green
belt at the Kudankulam site.

- Even when the KKNPP projects
function normally, they would be
emitting I 131, 132, 133, Ce 134, 136,
137 isotopes, strontium, tritium,
tellurium into our air, land & water.

1) Wikipedia 2) A case study by Dr. J P Kr.(Professor GEM) 3) Report by Mr. Puneet
Pathak ,Additional Chief Engineer, NPCIL 4) Staff Report(The Hindu,Nov 19 ,2011)
The Indian economy is the third largest economy in the world in terms of purchasing
power and is going to touch new heights in coming years. As predicted by Goldman Sachs, the
Global Investment Bank, by 2035 India would be the third largest economy of the world just
after US and China. It will grow to 60% of size of the US economy. This booming economy of
today has to pass through many phases before it can achieve the current milestone of 9% GDP.
The history of Indian Economy can be broadly divided into three phases: pre-
Civilization was developed and Indian Economy was well developed, maintaining good relations
with other parts of world which is evident from the coins of various civilizations found at indus
valley. A huge drain in the economy was seen during the colonial period with the arrival of East
India Company. During this phase India's share of world income declined from 22.3% in 1700
AD to 3.8% in 1952. After India got independence from colonial rule in 1947, the process of
rebuilding the economy started. The Five Year Plans, started by Indian government, focused on
. Trade liberalization, financial liberalization, tax reforms and opening up to foreign
investments were some of the important steps, which helped Indian economy to gain momentum.
Indian Economy has rose to power in various sectors like Industries, textile, retail, tourism,
agriculture, banking and finance, energy and power, infrastructure, etc. In 1991, India adopted
liberal and free-market principles and liberalized its economy to international trade under the
guidance of Manmohan Singh, finance minister from 30 November 2009 to 24 January 2010,
and previously under the leadership of P.V.Narasimha Rao, prime minister from 1991 to 1996,
who had eliminated License Raj, a pre- and post-British era mechanism of strict government
controls on setting up new industry. The economy of India is the 10
largest in the world
by nominal GDP. The country is one of the G-20 major economies and a member of BRICS. On
a per-capita-income basis, India ranked 141st by nominal GDP and 130th by GDP (PPP) in
2012, according to the IMF.

Industry accounts for 28% of the GDP and employs 14% of the total workforce.
is 11th in the world in terms of nominal factory output according data is compiled through CIA
World Factbook figures.Post-liberalisation, the Indian private sector was faced with increasing
domestic as well as foreign competition, including the threat of cheaper Chinese imports. It has
since handled the change by squeezing costs, revamping management, and relying on cheap
labor and new technology. However, this has also reduced employment generation even by
smaller manufacturers who earlier relied on relatively labour-intensive process. Textile
manufacturing is the 2nd largest source of employment after agriculture and accounts for 20% of
manufacturing output, providing employment to over 20 million people. India ranks
second worldwide in farm output. Agriculture and allied sectors like forestry, logging and fishing
accounted for 15.7% of the GDP in recent years, employed 52.1% of the total work force. India
has strengths in telecommunication, information technology and other significant areas svuch as
auto components, chemicals, apparels, pharmaceuticals, and jewellery.
To maintain its current status and to achieve the target GDP of 10% for financial year 2006-07,
the Indian economy has to overcome many challenges.
Population explosion:The rising population is eating into the success of India. Such a
vast population puts lots of stress on economic infrastructure of the nation. Thus India
has to control its burgeoning population.
Poverty:As per records of National Planning Commission, 36crore people poverty line in
India are living below the poverty line.
Unemployment:The increasing population is pressing hard on economic resources as well as
job opportunities. Indian government has started various schemes such as Jawahar Rozgar
Yojna, and Self Employment Scheme for Educated Unemployed Youth (SEEUY). But these
are proving to be a drop in an ocean.
Rural Urban Divide:It is said that India lies in villages, even today when there is lots of
talk going about migration to cities, 70% of the Indian population still lives in villages. There
is a very stark difference in pace of rural and urban growth. Unless there isn't a balanced
development Indian economy cannot grow.
In order to overcome these challenges, certain sustained economic reforms have to be
introduced such as maintaining fiscal discipline, orientation of public expenditure towards the
sectors in which India is faring badly, privatization of some public sector banks, Reorganization
of agricultural sector, introduction of new technology, reducing agriculture's dependence, etc.
thereby making Indian Economy to touch new heights in coming years

Indian Air Force first
C17 Globe master III. A Boeing

The Indian Aviation Industry is among the worlds fastest growing industries. It has
undergone huge transformation following the liberalization of the aviation industry in India.
Once owned by the Government, the aviation sector of India is now privately owned with full
service airways and affordable carriers. Almost 75% of the domestic aviation sector consists
of the private airlines.

Origin of Indian Aviation Sector
The origin of the Indian aviation industry dates back to 1912 when the 1st flight from Karachi
to Delhi commenced in collaboration with the Indian State Air Services and Imperial
Airways. However, the industry got its real start by JRD Tata through his launch of Tata
Airline, in the year 1932. JRD Tata was the 1
Indian, who got an A-Licence. In the year
1946, Tata Airlines was converted into Air India. Soon after the independence, India was
having 9 airline companies providing passenger and cargo services. These airline companies
were Tata Airlines, Air service of India, Deccan Airways, Indian National Airways, Ambica
Airways, Orient Airways, Bharat Airways and Mistry Airways.
In the first half of 1948, a joint sector company was set up by the Indian Government, in
collaboration with the Air India International Ltd and Air India. Through the Air
Corporations Act, 1953, 9 airlines were nationalized. Indian Airlines Corporation (IAC) was
set up for serving the domestic passengers while Air India International (AI) was set up to
cater for the international passengers.
Aviation Industry in India saw an important change in the year 2003, when budget flying
was introduced by Air Deccan through the lowering down of fares to about 17% in
comparison to what the other airlines charged. Air Deccan was joined in this process by Go
Airways, Spice Jet, and Kingfisher Air. Thus new trends were introduced in the aviation
market, by these budget airlines.

Growth of Indian Air Network
Continued growth has been shown by the aviation industry in India, in recent years. In the
year 2008, it grew at a CAGR of about 18% that accounts for US$ 5.6. In August 2007, 3.67
million passengers availed the services of domestic airlines, which was about 26% more in
comparison to the previous year. In the year 2010, an investment of US$ 9 billion has been
incurred by the Aviation Ministry with the aim to modernize the existing airports.
In June, 2010, the market leader was the Jet Airways with a share of 26.5 %. Next in line is
Kingfisher Airlines with 21%, and Air India with 16.9%. Hyderabad International Airport
ranks among the top 5 as per the annual survey of the Airport Service Quality (ASQ)
passengers. New airports and terminals are being developed. The economic slowdown
witnessed by the aviation sector in 2008 owing to fall in number of passengers coupled with
high fuel cost and severe competition from numerous other airlines, assumed a gradual
growth from 2009. At present the growth rate of international and domestic travel has
exceeded 25%, which is the worlds highest.

Recent Developments in Aviation Sector

Modernization of the airports
Growth and development in the MRO segment
Policy on Airport security
Policy on the merchant airports
Augmentation of fleet
Foreign equity involvement

Future of Indian Aviation Industry
The aviation industry growth rate was 25 % in the year 2010. By the year 2020, about 280
million passengers are expected to be handled by the Ministry of Civil Aviation.
Problems Faced by Aviation Industry
Indian Airline Industry is beset with many problems, which consist of high price of aviation
turbine fuel (ATF), scarcity of skilled labour, quick fleet expansion, rise in labour costs and
price competition among the players. However, the major issue that poses a challenge for
the airline industry in India is infrastructure limitation that requires to be rapidly
upgraded.Several steps have already been taken up. Many airports have been recently
privatized. 2 Greenfield airports will be set up at Bangalore and Hyderabad. Investments are
being made in different department such as pilot training, aircraft maintenance, and air cargo

Role of Indian Aviation Industry in GDP
Aviation industry has played a phenomenal role in the Gross Domestic Product (GDP) of
India. The GDP of India has increased over 8% following the growth of the Indian economy.
With large number of domestic and international airlines operating in India, the country has
become one of the most sought after location for commercial and trade activities.
Aviation Industry- Upcoming Challenges
With the growth and development, comes challenges and the aviation sector is no exception.
The severe challenges posed against aviation industry are that the industry has to deal with
safety concerns, decline in returns, stiff competition, rise in fuel cost, regional connectivity,
improper exploitation of trunk routes, soaring input costs and many more.
Solutions are obvious, implementation is more problematic

The Government can easily take immediate steps to assist the sector. These include reducing
the punitive sales taxation on aviation turbine fuel; permitting foreign airlines to acquire up to
a 26% shareholding in Indian carriers (a proposal now before Cabinet); approving private
carrier applications for international rights; removing restrictions on ancillary revenues; and
obliging more rational pricing by Air India.
In the longer term, the focus needs to be on creating a well-structured policy and regulatory
framework and on enhancing the efficiency of the nations aviation infrastructure,
particularly airports and airspace.
On 18-Dec-2011 Ajit Singh took over Mr Ravis civil aviation responsibilities. A dedicated
minister is a positive development, but a change of leadership at this critical time means
uncertainty will persist, especially in the absence of a clear strategic framework for the sector.
Mr Singhs task is to create an environment that will allow airlines, and indeed the broader
aviation industry, to become viable. Even airports and general aviation operators are
struggling. The solutions are relatively easy to identify, but the weak link is the political and
bureaucratic will.

PGDIE 43, 12 June 2013
The fall of Kingfisher Airlines
The Takeoff
Kingfisher airlines, launched in 2005 by the beer baron Vijay Mallya, is Indias 5
largest airline
which initially started as a value carrier but soon underwent a rapid metamorphosis into a full-
service airline . The years from 2006-2008 were a golden period for Kingfisher in which it
carved a niche for itself in the Indian aviation market by marketing itself as a five star carrier. In
2008 Kingfisher became the largest passenger carrier in India and also got the permit to operate
on international routes and also acquired Air Deccan. Kingfisher came up with a three-tiered
service: Premium Business Class, Premium Economy and Basic Economy (Air Deccan
rechristened as Kingfisher Red) which was a new approach catering to both business and
economy segments.
The glitch in the engine
Although the revenue generated increased in the period 2008-09, but so did the losses. In 2010
Jet Airways surpassed Kingfisher as the largest domestic airline and Indigo increased its market
share by leaps and bounds. In 2011, the cash flow problems came into the light openly and
creditors warned Kingfisher regarding the unpaid dues and the need to raise 159 Million USD for
restructuring the debt. The income fell sharply in the financial year 2011 vs. a year ago. In
January 2012, State Bank of India, the major shareholder in Kingfisher Airlines, declared it as a
non-performing asset. Most of the flights were grounded in February 2012 and the consortium of
banks declined to issue any more loans to Kingfisher. At the moment, all accounts of Kingfisher
Airlines are frozen and International Air Transport Association (IATA) has suspended it from its
International clearing house. A plethora of things went wrong for Kingfisher airlines and the
steady accumulation of losses over time finally broke the back of the organization. A few of the
major contributing factors are as follows:
Faulty Business Model
Kingfisher blindly tried to mimic the business model of other low cost carriers (like RyanAir,
South West Airlines) but made no effort to start flights on non-primary routes. The biggest
source of revenue for any low cost carrier is to fly on non-primary routes so that the cost to the
airline is minimal and the benefit is passed onto the customers. The Indian aviation landscape
with huge under penetrated domains was ripe for the taking. But Kingfisher kept flying
Kingfisher Red between metros at a cheaper price while incurring heavy losses. The strategy of
operating on two business models without accounting for the vastly different financial
implications associated with them had a major role to play in the subsequent woes of Kingfisher
The Air Deccan Fiasco
PGDIE 43, 12 June 2013
In hindsight, it can be concluded that Kingfisher hastily acquired Air Deccan without any clear
end goal in mind. The basic strategy behind the acquisition was to rebrand it as Kingfisher Red
and leverage the market equity of the acquired entity. Since Air Deccan was playing in the
market for a longer period of time as compared to kingfisher, it was expected to improve the cash
flow. To achieve this goal, Kingfisher drastically cut down the operational costs and scrapped all
marketing strategies of Air Deccan which ultimately resulted in Kingfisher Red becoming a
compromised service which delivered neither the quality nor the value for money which was the
hallmark of its parent entities. The changed model did not work and consumers started migrating
to other carriers like Jet Airways. Kingfisher Red was grounded in February 2012 dealing a
telling blow to the brand equity of Kingfisher Airlines.
Lack of vision in inducting aircrafts to the fleet
Kingfisher Airlines owned none of the aircrafts and dry leased them. Due to this business
decision, the aircrafts became an operational asset rather than being a fixed asset and had a huge
impact on the cash flow calculations. Kingfisher also erred in selecting the aircrafts for its fleet.
As it operated both Airbus and ATRs, it was forced to use personnel which were specific for a
particular make of the aircraft. This resulted in recruiting double personnel as well as
unnecessary incremental operational cost. Kingfisher also paid a lot of cash on A-380 jumbo
aircrafts which are not permitted to be used by any carrier as per the rules of Government of
India. Moreover, the economy of scale was also not in favor of Kingfisher had they been allowed
to use the A-380 series of aircrafts. Neither did they have an expanded International service nor
were they the leaders in the domestic market far ahead of their competitors. The strategy to gain
first movers advantage spectacularly backfired dealing a crippling blow to the already cash
strapped airline.
The Crash Landing
Kingfisher Airlines is currently operating without any cash and owes about Rs. 7000 crores to
the tax authorities, airports and fuel suppliers. The staff is unpaid for several months and the
irony of the owner Vijay Mallya, who is also a member of the Rajya Sabha, holding press
conferences for his IPL franchise while suavely denying talking about the predicament of his
employees, is staring everyone in the face. The lack of empathy shown by the owner for the
beleaguered employees, one of whom also committed suicide, raises the question of how
Kingfisher Airlines got away with breaking every tenet of Corporate Governance and why the
conglomeration of banks led by State Bank of India did did not step in till Kingfisher Airlines
went over the proverbial cliff. In case the dual standard of privatization of profit and
socialization of losses is followed by bailing out Kingfisher airlines, it will only encourage such
irresponsible behavior and hence strong steps should be taken to avoid a similar scenario in the

PGDIE 43, 12 June 2013
The rise and fall of a castle in the air ; The Hindu; article 2622215; 8/6/13.
The astounding story of the fall of Kingfisher Airlines ;; 8/6/13.
The king without fishes [case on crisis of kingfisher airlines]; Bauddhik volume 3, no.-1, jan-
april-2012; Prof. Bhavik M. Panchasara Marwadi Education Foundations Group of Institutions,
Indian IT Industry
Foundation of Indian IT industry was led by Government of India. It acquired EVS EM
computers from Soviet Union which were used in large companies and research labs. In 1968
Tata Group established the most famous company today in IT industry Tata Consultancy
Services in Mumbai. However the most essential part for any industry that is the ground
work was missing.
During Jawaharlal Nehrus rule, he established top class institutes for technical as well as
management like IITs and IIMs. This helped lot to IT industry eventually, as it developed a
whole generation of scientists and technicians in India, due to this India had large scientific
workforce next to USA and Soviet Union. By 1960, in response to relaxed immigration laws
in the USA large expert technical workforce settled in USA. All these technicians and
scientists helped Indian IT industry to grow at such a level that, big economies in the world
during 90s felt need to tie knot with Indian economy. In mid 1970s high import duties of
150 % forces companies like Wipro to manufacture home-grown PCs. In 1986 General
Electric expands in India and Wipro does lots of business with GE. In 1991 economic
reforms started. Also during 1995 IT companies get into porting and code cleanup business.
Due to Dot-com bubble burst in US, outsourcing to India accelerates. Up to 2003 India
known as low cost destination for low end IT work.
Present situation Pros and Cons:
Economic Impacts
IT sector dominates service sector in Indian industry. It provides more than 2.5 lacs jobs per
annum. This sector has contribution of 7.5 % to Indias GDP in 2012. Besides this it
contributes about 77 % of the total industry revenue. Also its contribution to Indias exports
was about 25 % in 2012. Most important thing is this sector helped Bangalore to be named as
Indias first silicon valley. Major IT hubs are found in southern India in cities like
Bangalore, Hyderabad, and Chennai. Also Mumbai and Delhi are major financial hubs for
this sector and most of the big players in this industry have their head office in Mumbai. So
this sector generated direct and indirect jobs in not only metro cities of India but in tier 2
cities like Bhubaneswar, Coimbatore, Kochi, Mangalore, Mysore, Nagpur, and Surat, etc.

IT-BPO Revenues in USD billion
However this sector continues to face challenges in many forms like global competitiveness,
regional political conflicts, irregular working environment, etc. It is facing tough competition
from countries like China, Philippines, and Indonesia. This is because these countries provide
labour at comparatively lower cost and popularity of English is growing in these countries. In
fact a whole new generation which knows English much better has emerged due to fore-
sightedness of policies of these countries. And as IT and BPO services are directly related to
labour cost those outsourced jobs from developed countries are moving towards these South
East Asian countries. Recent Infosys crisis was due to these developments.
Political Impacts:
Government of India have a policy of establishing IT parks for IT related services. Major
players in IT sector have political influence and are not willing to move towards backward
area in terms of industrial growth. Due to this, there is a concentration of industrial hubs in
India in few major cities. This is creating economic imbalance among people in India.
Future of Indian IT Industry:
Many analysts believe that the cost advantage and the offshore delivery model perfected by
Indian companies might not remain an advantage in the long run. This is because global
players such as IBM, Accenture, and Capegemini have started their own India centres and are
also aiming for the same customers.
Indian IT firms need to change their model of operations from application, development, and
maintenance to innovations such as outcome based billing or opening near shore centre. Also
they need to focus on new, high growth areas like cloud services, mobility services, big data,
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012
The Indian rupee is the official currency of the Republic of India. The issuance of the currency is
controlled by the Reserve Bank of India.
Since July last year, the Indian rupee has fallen by more than 27% against the US dollar, one of the biggest
declines among Asian currencies.
Reasons for fall in Indian rupee:
1. Huge Trade Deficit
Trade Deficit is an economic measure of a negative balance of trade in which a country's imports
exceeds its exports. A trade deficit represents an outflow of domestic currency to foreign markets. In the
financial year ending March 2012, the deficit zoomed to $185bn (118bn) compared with the original
estimate of $160bn.
2. Lower Capital Inflows
Although India has become an attractive destination which can woo foreign capital as well as money
from non-resident citizens, it is not enough to make up for the trade deficit.
In 2011-12, India received foreign direct investment of more than $30bn, in addition to a net inflow of
$18bn from foreign institutional investors in stocks and bonds.
But uncertainty about India's commitment to economic reforms, retrospective taxes, and policy paralysis
within the government have forced foreigners to either postpone their investment decisions, or take money
out of Indian stock markets.
3. High Current Account Deficit (CAD)
Occurs when a country's total import of goods, services and transfers are greater than the country's total
export of goods, services and transfers. This situation makes a country a net debtor to the rest of the world.
In 2011-12, this deficit was more than $74bn, a huge jump from less than $46bn a year ago. In 2012-13,
it may be even higher at $77bn.The result is that India's foreign exchange reserves have dropped from a
peak of $320bn in September 2011 to $290bn now.
4. Low Growth and High inflation
After annual economic growth of nearly 9% in 2009-10 and 2010-11, the country is likely to grow at
6.5% in 2011-12. The growth rate for 2012-13 is less than 5%.
Couple this with high inflation due to high food and fuel prices. The rate of inflation may rise this year
to double digits if the government is unable to curb its fiscal deficit.
In this scenario, most foreigners as well as Indian investors tend to take money abroad, or keep it away
from India.
Global investors are also nervous about investing abroad in nations such as India due to the economic
crisis in their respective countries. That has added further selling pressure on the rupee.
5. Rupee Speculation
The RBI's bid to sell dollars in the open market to restrict the rupee slide has failed in the past few
weeks and months. This has complicated the situation further.
Once currency traders and speculators realize that India's central bank is unable to manage its exchange
rate, and reduce the adverse impact on its currency, they may enter the market in a big way to sell the
rupee. As a result, the rupee may devalue more than it should.

Impact on Indian Economy:
Products that are directly imported, such as crude oil, fertilizers, pharmaceuticals, ores and metals,
computers and laptops, become more expensive following rupee depreciation.
A major chunk of the components in computers, viz., processor, hard disk drive and motherboard, is
imported. Products such as mouse, keyboard and monitor would also witness a discernible impact on
their prices on account of rupee depreciation. As the input costs increase, inflation may rise in the
Depreciating rupee thus has an adverse impact on the inflation in the Indian economy, which is currently
a major cause of concern for the RBI and the Industry alike.
For companies, borrowing costs goes up: Companies who have taken foreign currency loans will be
adversely impacted. The borrowing cost on Indian Rupee has gone up in the recent months due to rising
interest rates in India; however, the same is low in US. Hence, Indian companies have resorted to
borrowing in US dollars to reduce the effective cost of borrowing.
A depreciating rupee makes imports of component, capital goods and raw materials more expensive. As
inputs and other equipment that are imported get costlier, margins get reduced to that extent. Companies
with a high import component and those with foreign currency borrowings may be marked down in the
stock market as the rupee depreciates.
On the other hand, companies that are export-driven may benefit in the form of better prices for the
products and services sold. Let us consider the example of the IT sector.
The IT sector is among the major job creators in the Indian economy and a depreciating rupee spells good
news for the sector. For Information Technology companies, services are billed mainly in dollars or in
other foreign currencies. Any depreciation of the rupee pegs up their realizations and bodes well for their
The worst affected will be the oil and gas companies and capital goods companies which are net
importers. For these companies raw material is in $ terms and sales are in Rupee terms. So, depreciating
rupee will have a very adverse impact as this will cause an increase in the cost of raw materials without
any corresponding increase in the price of finished products.
For companies who have their revenues in foreign currency terms, especially the US dollar will be neutral
to the extent that their increased borrowing cost will be covered by their increased revenues. If the
increase in the revenues for these companies is higher than the increase in the borrowing cost, such
companies can benefit from the rupee depreciation.
To summarize, a falling rupee hurts you in the following way:
1. Prices of products - especially oil could go up affecting your wallet.
2. Investments in companies with foreign borrowings or which are exposed to currency fluctuations due to
their business models can suffer.


A respectful workplace is about more than compliance with the law. It is a working
environment that is free of inappropriate behavior of all kinds and harassment because of age,
disability, marital status, race or color, national origin, religion, sex, sexual orientation or gender
identity. Harassment is unwelcome conduct toward an individual because of his or her age,
disability, marital status, national origin, race or color, religion, sex, sexual orientation or gender
identity, when the conduct creates an intimidating, hostile or offensive work environment that:
Causes work performance to suffer; or
Negatively affects job opportunities.
1. Workplace Harassment:
Workplace harassment is any unwelcome or unwanted conduct that denigrates or shows
hostility or an aversion toward another person on the basis of any characteristic protected
by law, which includes an individual's race, color, gender, ethnic or national origin, age,
religion, disability, marital status, sexual orientation, gender identity, or other personal
characteristic protected by law. A conduct is unwelcome if the employee did not solicit,
instigate or provoke it, and the employee regarded the conduct as undesirable or
2. Sexual Harassment:
Sexual harassment is a form of sex discrimination that involves unwanted or unwelcome
conduct of a sexual nature. This applies to harassment by a person against another person
of the opposite sex as well as harassment by a person against another person of the same
sex. The California Fair Employment and Housing Act defines sexual harassment as
harassment based on sex or of a sexual nature; gender harassment and harassment based
on pregnancy, childbirth, or related medical conditions, and includes many forms of
offensive behavior.

When does harassment occur?
Harassment occurs when an employer creates, condones or permits a hostile, intimidating or
offensive work environment. That may include discriminatory treatment and/or retaliation for
filing a complaint or participating in an investigation.

Some examples of workplace harassment:
Workplace harassment can take many forms including, but not limited, to these examples:
Verbal Sexual innuendoes and other suggestive comments; racial or ethnic slurs;
humor, jokes or teasing about sex, race, age, religion, disability or gender-specific traits;
repeated requests for dates; sexual advances or propositions; comments about a persons
body, dress, excessive flattery or questioning of a personal nature; abusive language or
insults; or threats.
Visual or Non-Verbal Leering or staring in a sexual manner; whistling or hooting;
suggestive or insulting looks; vulgar sounds or gestures; offensive or hateful pictures,
posters, calendars, cartoons or obscene e-mail; excessive attention in the form of love
letters or gifts; or offensive or derogatory written materials.
Physical Inappropriate touching of the body (e.g., brushing, patting, hugging, pinching
or shoulder rubs); kissing or inappropriate display of body parts; coerced acts of a sexual
nature; physically blocking another individuals movement, assault; exclusionary or
demeaning actions or activities based on age, ethnicity, sex or race.

What to avoid
Any behavior that is unprofessional or disrespectful, or that has the purpose or effect of
harassing anyone.
Any retaliation against someone who raises a concern or potential violation under this
Missed opportunities to respectfully communicate to someone that you found his or her
behavior offensive.
Unreported concerns or violations of this policy.
Civil Rights Act of 1964
The Age Discrimination in Employment Act of 1967, (ADEA)
The Americans with Disabilities Act of 1990 (ADA).
Some Provisions made in these acts:
Defines harassment as conduct causing alarm or distress including speech and must involve
the behavior being repeated on at least two occasions.
Creates four new criminal offences, including the offence of harassment, a summary-only
offence that carries a maximum prison term of five years, and causing a fear of violence, which
carries a maximum term of five years.
Post conviction, a magistrate can issue a restraining order. Breaching these orders is punishable
with up to five years' imprisonment.
Allows a victim of harassment to apply to a civil court for a civil injunction to prevent future
harassment and for damages.
Breaching a civil injunction barring an individual from a particular area also carries a
maximum prison term of five years.
The original act of parliament has been amended in several important ways by the Criminal
Justice and Police Act 2001 and later by the Serious Organised Crime and Police Act 2005. The
amendments introduce new offences, including harassment of a person in their home, and also
confer additional powers on the police to issue directions for the purpose of stopping such

What is share?
A share is an indivisible unit of capital, expressing the contractual relationship between the
company and the shareholder. The denominated value of a share is its face value: the total
capital of a company is divided into a number of shares.

In financial markets, a share is a unit of account for various financial instruments
including stocks (ordinary or preferential), and investments in limited partnerships, and real
estate investment trusts. The common feature of all these is equity participation (limited in
the case of preference shares).
The income received from shares is known as a dividend. A shareholder, also known as a
stockholder, is a person who owns shares of a certain company or organization.
The process
of purchasing and selling shares often involves going through a stockbroker as a middle

How are shares traded on stock exchanges?

Investors wishing to trade securities in a stock exchange have to channel their trade through a
stock broker who is a member of that stock exchange.

The stock broker may be a corporate or an individual though of late individual stock brokers
are on their way out, as stock exchanges now tend to favor corporate memberships over
individuals. In any case, there are specific guidelines for admitting a person or an
organization as a member broker and various criteria such as net worth, education and
experience of the aspirants (promoters/management team in case of corporate membership),
track record etc are considered before granting membership. These criteria may change
depending upon the nature of membership.

For example, determination of whether or not a member may undertake trading in derivatives
or debt market instruments, may require a particular level of education and expertise. Each
member is also required to maintain a suitable security deposit with the exchange and pay
annual membership fees.

The brokers act as agents to trade in securities, i.e. buy and sell securities, on behalf of clients
(individual investors, companies etc) for a commission and may also act on their own account
and risk.

Until the emergence of electronic trading in the form of dematerialized shares in 1993,
trading on Indian bourses was conducted in the age-old style of open outcry system whereby
brokers physically assembled on the floor (also known as the ring) of the stock exchange and
indulged in some high energy physical trading involving a combination of vigorous
gesticulation and lung power, creating an ambience not unlike that of a fish market.

During trading hours (which was between 12 noon and 2.30 pm in most stock exchanges in
India) brokers made bids to buy and offers to sell shares, indicating the name, volume and
price of shares sought or offered, with a wide variety of signals using their hands, fingers and
voices to communicate with other dealers.

The emergence of the electronic trading spelt the end of the era of open outcry. With the
advent of electronic trading, investors from distant areas of the country were able to trade in
securities through brokers and sub-brokers with on-line connectivity to the stock exchanges.

Both NSE (National Stock Exchange) and BSE (Bombay Stock Exchange [ Images ]) offer
fully computerized screen-based trading facilities to investors. The on-line trading system of
BSE is known as BOLT (BSE's On-line Trading System), while that of NSE is known as
NEAT (National Exchange for Automated Trading). Both BOLT and NEAT use satellite
communication fro trading, using V-SAT.

Thanks to these trading systems, brokers merely enter their buy and sell orders on the
computers installed in their premises instead of assembling in the trading ring. Retail
investors can also communicate their buy or sell orders through the Internet. The ease of
electronic trading has also resulted in a significant increase in trading hours, i.e. from 9.55 am
to 3.30 pm on all weekdays or almost six hours daily.

In India, investors may trade in equity shares using two different methods -- cash
account (or cash market) or margin trading.


Lean Manufacturing
Definition: Lean manufacturing is an approach or technique in a business model which
emphasize eliminating non value added activities (waste) while delivering quality products on
time at least cost with greater efficiency.

Lean manufacturing is a theory that can help you to simplify and organize your working
environment so that you can reduce waste, and keep your people, equipment, and workspace
responsive to what's needed right now.

Brief History of Lean Manufacturing: The idea was first used by Henry ford on the
assembly line for his T model automobile. He used the idea of continuous flow where he kept
production standards extremely tight, so each stage of the process fitted together with each
other stage, perfectly. This resulted in little waste. However approach was not successful
completely because it produces same model again and again and does not allow any changes or
modification to end product. It was a pull model rather than a push model and led to
overproduction. Taiichi Ohno of Toyota then developed the Toyota Production System (TPS),
which used Just in Time (JIT) manufacturing methods to increase efficiency. Toyota used this
process successfully and, as a result, eventually emerged as one the most profitable
manufacturing companies in the world. The theory of lean manufacturing was later build on the
TPS platform.

Basics of Lean Manufacturing: Lean manufacturing is based on finding efficiencies
and removing wasteful steps that don't add value to the end product. Quality is not
compromised with lean manufacturing the cuts are a result of finding better, more efficient
ways of accomplishing the same tasks. There are eight categories of waste to be monitored:

1. Overproduction Are you producing more than consumers demand?
2. Waiting How much lag time is there between production steps?
3. Inventory (work in progress) Are your supply levels and work in progress inventories
too high?
4. Transportation Do you move materials efficiently?
5. Over-processing Do you work on the product too many times, or otherwise work
6. Motion Do people and equipment move between tasks efficiently?
7. Defects How much time do you spend finding and fixing production mistakes?
8. Workforce Do you use workers efficiently?

Three stage process in lean manufacturing:
Step 1: Identify waste. No matter how good is process, there will always be waste. One of the
key tools to find it is value stream map (VSM).This shows how materials and processes flow
through your organization to bring your product or service to the consumer. It looks at how
actions and departments are connected, and it highlights the waste. As you analyze the VSM,
you'll see the processes that add value and those that don't. You can then create a "future
state" VSM that includes as few non-value-adding activities as possible.

Step 2: Analyze the waste and find the root cause. Basic tools which can be used for this
purpose are root cause analysis, Brainstorming, cause and effect diagrams.

Step 3: Solve the root cause and decide what is to be done to remove the waste and make
system more efficient. Repeat the cycle with modified process.

How to reduce waste: Once the waste is identified and rectified by three step process,
one of the following tools may be used to reduce it further.
1. Just in time (JIT) - To minimize stocks and resources, purchase materials, produce and
distribute goods only when required.
2. Kanban To develop cues in the system to signal that you need to replace, order, or
locate something. Focus is on overproduction so that you have what you need, only
when you need it.
3. Zero defects- Focus is on getting the product right the first time, rather than wasting
time and money on fixing the poor quality product.
4. Single minute exchange of Die (SMED) - It provides flexibility in production system.
Allows quick and efficient changeovers in assembly process and machinery.
5. 5S Philosophy- One of the important aspect of lean manufacturing is standardization of
processes, tools and workplace arrangement. This can be achieved using 5S.

Applying the principle of Lean in your life
1. Overproduction Do you provide more data or information than is needed? Do you
create reports more often than required for example? Or do you spend unnecessary
amounts of time formatting these reports?
2. Waiting Do you spend too much time waiting for information or data from others,
before you can do your work? What can you do about this?
3. Inventory (work in progress) Do you have a large stock of materials? Are your supply
levels and work-in-process inventory too high?
4. Transportation Do things flow efficiently? Could you combine deliveries, or deliver
things more quickly?
5. Over processing Do you needlessly work on something more than once?
6. Motion How is work passed along in your team? Do people understand what they're
required to do at each step? Do people and equipment move between tasks efficiently?
7. Defects How often do you find mistakes? Do you make the same mistakes on a regular
8. Workforce Do you use your time wisely? Do you spend most of your time on activities
that add value and are a high priority?


Disinvestment refers to the action of an organization or the government in selling or liquidating
an asset or subsidiary. In simple words, disinvestment is the withdrawal of capital from a country
or corporation. It is also referred to as divestment or divestiture. A company or a government
organization will typically disinvest an asset either as a strategic move for the company, or for
raising resources to meet general/specific needs. Some of the salient features of disinvestment
Disinvestment involves sale of only part of equity holdings held by the government to private
Disinvestment process leads only to dilution of ownership and not transfer of full ownership.
While privatization refers to the transfer of ownership from government to private investors.
Disinvestment is called as Partial Privatization.

The public sector in India at present is at cross roads. The new economic policy initiated in July
1991, clearly indicated that the public sector undertakings have shown a very negative rate of
return on capital employed. On account of this phenomenon many public sector undertakings
have become burden to the government. They are in fact turning out to be liabilities to the
government rather than being assets. This is a sector which the government clearly wants to get
rid of. In this direction the government has adopted a new approach to reform and improve the
public sector undertakings performance i.e. Disinvestment policy'. This has gained lot of
importance especially in latter part of 90s. At present the government seriously perceives the
disinvestment policy as inactive tool to reduce the burden to financing the public sector.

The most important criticism levied against public sector undertakings has been that in relation
to the capital employed, the level of profits has been too low. Even the government has criticized
the public sector undertakings on this count. Of the various factors responsible for low profits in
the Public Sector Undertakings, the following are particularly important:-
Price policy of public sector undertakings
Underutilization of capacity
Problem related to planning and construction of projects
Problems of labor, personnel and management
Lack of autonomy

Privatization intended to achieve the following:
Releasing large amount of public resources
Reducing the public debt
Transfer of Commercial Risk
Releasing other tangible and intangible resources
Expose the privatized companies to market discipline
Wider distribution of wealth

Presently, the Government has about Rs. 2 lakh crore locked up in PSUs. Disinvestment of the
Government stake is, thus, far too significant. The importance of disinvestment lies in utilization
of funds for:
Financing the increasing fiscal deficit
Financing large-scale infrastructure development
For investing in the economy to encourage spending
For retiring Government debt- Almost 40-45% of the Centres revenue receipts go towards
repaying public
For social programs like health and education
Disinvestment also assumes significance due to the prevalence of an increasingly competitive
environment, which makes it difficult for many PSUs to operate profitably. This leads to a rapid
erosion of value of the public assets making it critical to disinvest early to realize a high value.
Disinvestment is good idea to generate funds for government. It will generate money to reduce
fiscal deficit. Government can utilize these funds for welfare of public.
It will improve efficiency and abilities of organization.
Loss making PSU's will make profit.
Private sector has huge money to invest so it will improve infrastructure, technical efficiency.
It will change the attitude of lazy employees and will improve their efficiency.
But disinvestment should be avoided in the sectors which directly connected to common people
like oil, sugar etc.
There should not be monopoly of private players.
In the current year government targeted to raise as much as 30000 crores through disinvestments
in PSUs having less than 25% of public holding. The companies which will fall under this are
the likes of SAIL, NTPC, NMDC and CIL.
PSUs have been characterized by low productivity, unsatisfactory quality of goods, excessive
manpower utilization, inadequate human resource development and low rate of return on capital.
For instance, the above mentioned PSUs are sitting on a cash pile of over 1 lakh crore of rupees,
which clearly reflects the inefficient capital utilization. They could have extended their
investment plans all these years, or could have bought stakes abroad to extend their reach, but
instead they have kept the money with them as if it is going to give higher return when kept idle.
The rationale behind divestment is that the government wants to increase the operational
efficiencies of PSUs as well as it wants to generate money to reduce its fiscal deficit. When
private players will come, they will bring all sorts of technological and managerial skills to raise
the level of operation which in turn will subsequently take the company on a growth path.
I opine that PSU disinvestment is better than Privatization. We are third world countries where
new public management theory finds difficult to fit into our economy. Toll Plazas are an good
example to show how capitalist ruin the resources for their benefit. In PSU's they are generally
accountable to PUBLIC if they deviate from the responsibility then there are adequate measures
to thwart the irregularities through RTI. In private companies there is no transparency,
everything is money oriented. The no of jobs created for the skill oriented workers are more in
PSU's for example pick and place in watch industry. Until We attain 100% literacy more
precisely knowledge oriented education to all, new public management theory (NPM) is yet a
dream. We can try to implement the working culture of Privatization in PSU's, hence making it
to be more efficient but disinvesting completely from PSU's is an fathom for the welfare of
marginalized people.

Supply chain management has traditionally been viewed as a process where the raw
materials are converted into final products, then delivered to the end-consumer. This process
involves extraction and exploitation of the natural resources. It is important to note however that
we live in a decade where environmental sustainability has been an important issue to business
practice. Since the early 1990s, manufacturers have been faced with pressure to address
Environmental Management (EM) in their supply chains. This is not an easy task to do however.
Adding the green concept to the supply chain concept adds a new paradigm where the supply
chain will have a direct relation to the environment. This is the basis for Green Supply Chain.

Green supply chain management (GSCM) is an emerging field that strands out of the
traditional supply chain perspective. The quality revolution in the late 1980s and the supply
chain revolution in the early 1990s have sparked businesses to become environmentally
conscious GSCM has gained popularity with both academics and practitioners to aim in reducing
waste and preserving the quality of product-life and the natural resources. Eco-efficiency and
remanufacturing processes are now important assets to achieve best practice. Global market
demands and governmental pressures are pushing businesses to become more sustainable.

The main concepts of GSCM: green design, green operations, reverse logistics, waste
management and green manufacturing.

Green design is an important sub-topic to Green supply chain management. It is about
designing a product or a service that encourages environmental awareness. Life-cycle analysis is
an important sub-concept to Green Design. Life-cycle analysis was introduced to measure
environmental and resource related products to the production process. This measurement
involves in stages from extraction of raw materials, production, distribution, and
remanufacturing, recycling and final disposal.

Reverse Logistics (RL) is the opposite of traditional or forward logistics. Reverse
logistics as a process where a manufacturer accepts previously shipped products from the point
for consumption for possible recycling and re-manufacturing.

Based on variety of studies providing conceptual insights in what green supply is

Ensuring sustainability of purchased products. In this case the buying firm could require
compliance with standards in regard to sourced materials or components. Environmental
requirements therefore could relate not only for finished products, but to ingredients used,
e.g. free of artificial flavors, GMOS etc. Additionally, activities to green product-based
supply could focus on by-products, e.g. decreasing the amount of product packaging.
Ensuring sustainability of manufacturing processes. In this regard, purchasing firms
might require suppliers to introduce environmental policy and obtain environmental
management standards. Ensuring sustainability of purchased products and manufacturing
processes may also operate in a less direct fashion, where a certain minimum threshold
in terms of environmental performance is a precondition for being awarded a contract in
the first place. The same principle can periodically be applied to existing suppliers in the
awarding of repeat business.
Developing product-based supply (managing green supply offers). This avenue towards
sustainable sourcing implies supplier assessment based on variety of sustainability
criteria. As it is highly unrealistic that companies would award business contracts based
exclusively on environmental performance, purchasing decision-making would involve
number of trade-offs. Obviously, in some situations better quality/price ratio would be
offered by one supplier, while better compliance with environmental standards by the
Developing process-based supply (Influencing consideration of environmental concerns
within supplier company). With this purpose buying companies might become involved
in suppliers internal environmental initiatives, e.g. eco-design programs, product take-
back infrastructure for further recycling and recovery of wastes. In logistics, measures to
align own and supplier distribution networks could improve transportation/load
efficiency and associated environmental performance.
Developing well-functioning relationships with suppliers. Improvements in buyer-
supplier relationships might not only contribute to better production practices and
lowering supply/sales risks, but also to successful treating of environmental/social issues.
Well-functioned relationships could help to overcome variety of organizational barriers
and develop internal technical capabilities in ensuring/developing green supply.

Implementing GSCM has never been easy. There are certain limitations with Green
Supply Chain Management.

Lack of information about the green supply chain best practices: The aforementioned
green supply chain survey found that it was not investment costs, but a lack of
information on regulations and green supply chain best practices that left organizations
with a limited view of what to do and implement.
Lack of tools to optimize the supply chain with environmental management: There is no
dearth of tools for supporting green supply chain initiatives. The challenge lies in electing
the right tool.
Global sourcing making tracing of carbon footprint difficult: Given global sourcing,
tracking the carbon footprint of finished products can be difficult.

Despite having some limitations still Green Supply Chain Management holds the key for
maintaining Environmental Balance.
The Rise of Apple
Apple Inc. is a multinational corporation headquartered in California that designs, develops, and
sells consumer electronics, computer software and personal computers. Its worldwide annual
revenue in 2012 totaled $156 billion [1].
197680: Founding and incorporation
Apple was established on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne to sell
the Apple I personal computer kit. The Apple II was released on April 16, 1977. Millions were
sold well into the 1980s.The Apple III was released on May 19, 1980. On December 12, 1980,
Apple went public at $22 per share.
198185: Lisa and Macintosh
The Apple Lisa, Apples Computer's first GUI computer was introduced in 1983.Because of the
high price Lisa failed to penetrate the business market. In 1984, Apple next launched the
198697: Decline
In 1985 a power struggle developed between Jobs and CEO John Sculley, the board of directors
sided with Sculley and Jobs was stripped of all duties and Jobs resigned from Apple and founded
NeXT Inc. the same year. Apple experimented with a number of other failed consumer targeted
products including Macintosh Portable, digital cameras, portable CD audio players, video
consoles, and TV appliances .Apple's market share and stock prices continued to slide. Microsoft
continued to gain market share with Windows focusing on delivering software to cheap
commodity personal computers.
1996: Return of Steve Jobs
Apple purchased Steve Jobs' company, NeXT on December 10, 1996, and its NeXTstep
operating system, foundation of the Mac OS X operating system. At the 1997 Macworld Expo,
Steve Jobs announced that Apple would join Microsoft to release new versions of Microsoft
Office for the Macintosh, and that Microsoft made a $150 million investment in non-voting
Apple stock.
19982005: Apple's comeback
On August 15, 1998, Apple introduced a new all-in-one computer the iMac. The iMac featured
modern technology and a unique design, and sold almost 800,000 units in its first five months.
On May 19, 2001, Apple opened the first official Apple Retail Stores in Virginia and California.
On October 23 of the same year, Apple announced the iPod portable digital audio player. The
product was phenomenally successful. In 2003, Apple's iTunes Store was introduced, offering
online music downloads. The service quickly became the market leader in online music services.
On June 6, 2005, Steve Jobs announced that Apple would begin producing Intel-based Mac
computers in 2006. [2]In January 2006, Apple's market cap surpassed that of Dell. Nine years
prior, Dell's CEO Michael Dell said that if he ran Apple he would "shut it down and give the
money back to the shareholders."
200711: Widespread success
Apple achieved widespread success with its iPhone, iPod Touch and iPad products. Apple was
the first to achieve mass market adoption of touch screen user interface. Apple Computer, Inc.
would from that point on be known as Apple Inc., because computers were no longer the main
focus of the company. In July 2008, Apple launched the App Store to sell third-party
applications. [3] Three months later, it was announced that Apple had become the third-largest
mobile handset supplier in the world due to the popularity of the iPhone. [4]
On January 14, 2009, Jobs announced that he would be taking a six-month leave. On April 3,
2010, the iPad was launched in the US and sold more than 300,000 units on that day. In May of
the same year, Apples market exceeded that of competitor Microsoft. Apple released the fourth
generation iPhone, which introduced video calling, multitasking.
2011present: PostSteve Jobs era
In July 2011, due to the American debt-ceiling crisis, Apple's financial reserves were briefly
larger than those of the US Government. [5]On October 4, 2011, Apple announced the iPhone
4S, which included an improved camera with 1080p video recording. The following day, on
October 5, 2011, Apple announced that Jobs had died, marking the end of an era for Apple Inc.
On September 12, 2012, Apple unveiled the iPhone 5, featuring an enlarged screen, more
powerful processors, and running iOS 6 which will now be upgraded to iOS7.
PEST Analysis
Political-Legal Factors
Nokia and Samsung have filed various lawsuits against Apple. One of the audits founds that
Apple's factories in China are breaking employment laws which is threat to the company. [6]
Apple manufactures a number of its parts and products from outside the US. The bad political
relations will have bad outcomes for the Apple Inc.
Economic Factors
Since Apple Inc products were viewed as luxury products, the customers started pending less on
them in the time of global economic crisis. However the company has purchased itself foreign
currencies and thus, the economic effects on the company are minimized.
Social Factors
Throughout the history of Apple, two factors have been on the forefront of the quality and the
design of the product. As the world cannot be imagined without the gadgets, thus Apple products
have marked their presence on the international market. Another big social influence to Apple
Inc products is the rapid growth of the music industry.
Technological Factors
Apple has invested largely in its product research and development field and thus, Apple
products are at the top of the new innovative products ranking.

Other Sources


iGate controversy Phaneesh Murthy

iGate Introduction:
iGate is a provider of IT services & Business solutions, headquartered in USA. The company
has employed over 30,000 people globally (after merger with Patni Computers) and
consistently delivers effective solutions to over 300 companies in the areas such as: banking and
financial services; insurance and healthcare; life sciences; manufacturing, retail, distribution and
logistics etc.. It has 23 international offices across the Americas, Europe, and the Asia-Pacific
region, as well as offshore development centers in eight cities in India, with majority of
operations here.
Recently iGate Corporation was in news as it has sacked its President and CEO Phaneesh
Murthy over alleged sexual harassment charge.
Phaneesh Murthy Introduction:

Mr. Murthy completed his B.Tech Degree in mechanical engineering from the Indian Institute of
Technology, Madras and MBA from the Indian Institute of Management, Ahmadabad.
Murthy started working for company Infosys Ltd. in sales and marketing division in 1995.He
was made Director of Infosys BPO ltd. in year 2000. As the Global Sales Head of Infosys, he
had been widely credited for taking the organization from just $2 million in revenues to $700
million in under 10 years.
In 2002 his former executive secretary Reka Maximovitch had filed a case of sexual harassment
and at the same time another woman had filed the similar charges on him. Infosys settled the
lawsuit out of court for $3 million and fired him from his position.
iGate Controversy:
Then he started his own firm named as Quintant which was later acquired by iGate Corporation
in year 2003 and subsequently he became Chief Executive Officer of iGate. Murthy later became
president in 2006 and was re-elected in 2010. Phaneesh has transformed iGate from a loss


making, negative margins, to a growing company making huge profit. Murthy is credited with
the iGate acquisition of Patni Computer Systems in 2011 and the deal made iGate one of the
largest IT companies in India.
In 2013 another claim of sexual harassment was labeled against Murthy by subordinate
employee Araceli Roiz. Following an investigation by outside legal counsel, engaged by the
board of Directors, on May 20, 2013 iGate Corporation announced that its Board has decided
to terminate the employment of President and CEO Phaneesh Murthy and removal will be
effective from June 7, 2013. Concurrently, the Board has appointed Gerhard Watzinger as
President and CEO on an interim basis.
iGate officially stated that "the investigation showed that Murthy had violated iGate's policy, as
well as his employment contract by failing to report his relationship with the employee, although
he did not violate iGate's harassment policy". They have also stated that Murthy will get a post
termination benefit of $6000 per month.
However, Murthy has denied all the charges and called his firing part of an extortion scandal.
After deeply diving into this topic, few points came in my mind as mentioned below:
1. There is a lot of difference between two sexual harassment cases filed against Mr.
Murthy. In Infosys (Indian company), the matter was settled out of court and Phaneesh
was fired from his position. But in iGate (USA based organization), the case is being
declared as not of a sexual harassment but only failing to report his relationship with the
employee, however he is sacked.

2. The relationship of Murthy with the employee was long term however she had filed the
case of sexual harassment after termination of her employment.

Tax structure of India

Definition: A tax is a financial charge or other levy imposed upon a taxpayer (an individual
or legal entity) by a state or the functional equivalent of a state such that failure to pay is
punishable by law.
According to Black's Law Dictionary, a tax is a "pecuniary burden laid upon individuals or
property owners to support the government a payment exacted by legislative authority."

Types of Taxes: In India, tax can be classified into two major types: direct and indirect.

Tax Structure in India: The tax regime in India has undergone elaborate reforms over the last
couple of decades in order to enhance rationality, ensure simplicity and improve compliance.
The tax authorities constantly review the system in order to remain relevant. India has a federal
system of Government with clear demarcation of powers between the Central Government and
the State Governments. Like governance, the tax administration is also based on principle of
separation therefore well defined and demarcated between Central and State Governments and
local bodies.
The tax on incomes, customs duties, central excise and service tax are levied by the
Central Government. The state Government levies agricultural income tax (income from
plantations only), Value Added Tax (VAT)/ Sales Tax, Stamp Duty, State Excise, Land
Revenue, Luxury Tax and Tax On Professions. The local bodies have the authority to levy tax on
properties, octroi/entry tax and tax for utilities like water supply, drainage etc.
Let us consider the example of the most common form of tax i.e. income tax in India.
The rate of tax levied on public is characterized according to the incomes of the people. Consider
the following table for India Income tax slabs 2013-2014 for General tax payers,

Income Tax slabs (in Rs.) Tax
0 to 2,00,000 No tax
2,00,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

Direct Tax Indirect

Sales Tax
Added Tax
Goods &
Excise Corporate
Gift Tax
Purpose of levying taxes: The taxes collected by the public are used for the public itself in
different forms. The major purposes for levying taxes of different forms by government are as

Funds for enforcement of public law and order
Economic infrastructure
Operation of government
Fund public and welfare activities
Funds from taxes are used to support the poor, disabled and retired
Taxes are applied to fund foreign aid and military ventures

Impacts of taxes on economics: Economics are in general classified as macro and micro
economics. Microeconomics is about money you dont have, and macroeconomics is about
money the government is out of. The various impacts of taxes on both the economics are as

Government use different kinds of taxes and vary the tax rates to distribute the tax burden
among individuals or classes.
It modifies the pattern of consumption or employment within an economy by making
some classes of transaction more or less attractive.
Tax system reflects the communal values of the nation.
Taxes shift the equilibrium for goods and services away from its optimal level, therefore
reducing consumer and producer surpluses.
From a macroeconomic perspective, government debt can be thought of as future
spending brought forth into present time. Governments incur debt when their spending
desires exceed their receipts from taxes and other income sources, and that debt is
ultimately repaid through a levy of taxes in excess of current spending.
From a microeconomic perspective, taxes reduce both demand and supply, and drive
market equilibrium to a price that is higher than without the tax and a quantity that is
lower than without the tax.
Fiscal policy can be expansionary, that is aimed at growing the economy and increasing
employment, or contractionary (aimed at slowing the growth of the
economy). Expansionary fiscal policy features increased government spending and/or
decreases in the tax rates, while contractionary policy is the opposite (lower government
spending and/or higher tax rates).

The Bullwhip Effect

The objective of supply chain management is to provide a high velocity flow of high quality,
relevant information that will enable suppliers to provide an uninterrupted and precisely
timed flow of materials to customers. However, unplanned demand oscillations, including
those caused by stock outs, in the supply chain execution process create distortions which can
wreck havoc up and down the supply chain. There are numerous causes, often in combination
that will cause these supply chain distortions to start what has become known as the
Bullwhip Effect. Distorted information from one end of a supply chain to the other can lead
to tremendous Inefficiencies: excessive inventory investment, poor customer service, lost
revenues, misguided Capacity plans, inactive transportation, and missed production
schedules. The bullwhip effect occurs when the demand order variability in the supply chain
are amplified as they move up the supply chain.

Logistics executives at Procter & Gamble (P&G) examined the order patterns for one of their
best-selling products, Pampers. Its sales at retail stores were fluctuating, but the variabilities
were certainly not excessive. However, as they examined the distributors' orders, the
executives were surprised by the degree of variability. When they looked at P&G's orders of
materials to their suppliers, they discovered that the swings were even greater. At first glance,
the variabilities did not make sense. While the consumers, in this case, the babies, consumed
diapers at a steady rate, the demand order variabilities in the supply chain were amplified as
they moved up the supply chain. P&G called this phenomenon the "bullwhip" effect. (In
some industries, it is known as the "whiplash" or the "whipsaw" effect.)

When Hewlett-Packard (HP) executives examined the sales of one of its printers at a major
reseller, they found that there were, as expected, some fluctuations over time. However, when
they examined the orders from the reseller, they observed much bigger swings. Also, to their
surprise, they discovered that the orders from the printer division to the company's integrated
circuit division had even greater fluctuations. In the past, without being able to see the sales
of its products at the distribution channel stage, HP had to rely on the sales orders from the
resellers to make product forecasts, plan capacity, control inventory, and schedule
production. Big variations in demand were a major problem for HP's management.

Perhaps the best illustration of the bullwhip effect is the well-known "beer game." In the
game, participants (students, managers, analysts, and so on) play the roles of customers,
retailers, wholesalers, and suppliers of a popular brand of beer. The participants cannot
communicate with each other and must make order decisions based only on orders from the
next downstream player. The ordering patterns share a common, recurring theme: the
variabilities of an upstream site are always greater than those of the downstream site, a
simple, yet powerful illustration of the bullwhip effect.
Four major causes of the bullwhip effect:
1. Demand forecast updating
2. Order batching
3. Price fluctuation
4. Rationing and shortage gaming

Counteract the Bullwhip Effect:
Understanding the causes of the bullwhip effect can help managers find strategies to mitigate
it. Indeed, many companies have begun to implement innovative programs that partially
address the effect. The idea is to tackle each of the four causes as follow.
1. Avoid Multiple Demand Forecast Updates
2. Break Order Batches
3. Stabilize Prices
4. Eliminate Gaming in Shortage

Distorted information from one end of a supply chain to the other can lead to tremendous
Inefficiencies. In theory, the bullwhip effect does not occur if all orders exactly meet the
demand of each period. This is consistent with findings of supply chain experts who have
recognized that the Bullwhip Effect is a problem in forecast-driven supply chains, and careful
management of the effect is an important goal for Supply Chain Managers. Therefore it is
necessary to extend the visibility of customer demand as far as possible.

2-G Scam:
In November 2010 the Comptroller and Audit General of India revealed that the Indian
governments exchequer has lost 1.76 trillion rupees because of the 2G spectrum allocation, this
news not only shocked our country but also tainted our image as one of the most corrupt nation
in the world. Since then 2-G scam has been a hot topic among people of our country. The scam
came to public notice when the Indian Income Tax Department was investigating political
lobbyist Nira Radia.
Series of events are as follows:
A Raja (Minister of Communication & Information Technology) in 2007, announced that
there will be no auction for 2G spectrum unlike 3G & Winmax as recommended by TRAI.
The year 2008 witnessed the segregation between 2G & 3G revenue mechanisms. For 2G
spectrum A Raja followed the first come first serve approach at thrown away prices whereas
DOT announced that it would accept the application for the same after October 1, 2007. Many
companies did not get the spectrum because of the confusion about method being
followed. There was something unlawful here thats why Telecom Ministry opposed 2G
spectrum auction because it would have demanded transparency.
Opposition alleged UPA government with the corruption related to 2G Scam. A. Raja lost
his position in the cabinet reshuffle. CAG blamed A. Raja for violating the policies in handling
2G spectrum resulting in a loss of Rs. 1.76 trillion. With the relentless opposition pressure A
Raja had to resign moreover he was under the scan of CBI as demanded by Supreme Court.
In 2011, Kapil Sibal was given the responsibility to further handle the scam. Mr Sibal
gave his Zero loss theory which says that there was no loss to the Government, as the
calculations done by the CAG had to be discounted for various factors, including time value of
money and difference between 3G and 2G spectral efficiency and the logic underlying this
estimate is completely flawed. Government policy is formulated with a view to maximizing
public welfare, and not merely to maximize Government revenues. The pricing of different
natural resources is often done in a manner that meets this objective. CAG has done injustice to
itself by suggesting that there is a presumptive loss. This theory has received great criticism.
In February 2011 A Raja was arrested by CBI causing a huge loss to government
exchequer. He was sent to Tihar Jail for 14 days under the judicial custody. CBI questioned
DMK chief M Karunanidhis daughter Kanimozhi & his wife Dayallu Ammal. Swan Telecom
sent A. Raja a sum of Rs.214 crore via kickback (i.e., a chain of companies selling stakes in such
a way, that the source-sink company rests in the hand of the auctioneer, and he is the one who
gains). The source was from Kalaignar TV channel in Chennai, whose stake of 80% rests with
Kanimozhi itself. Hence, the conspiracy maze rests within the ministry itself.
In March 2011 Supreme Court enquired DOT about the first come first service in detail
which it couldnt. A. Raja, Sharad Kumar (Kalainagar TVs managing director), Shahid Balwa
were arrested by CBI under the first charge sheet. The second charge sheet accused several
others including Kanimozhi. In May, BJPs accusation demanded CBI to investigate P.
Chidambrams role in the 2G scam. Pranab Mukherjee analyzed the scam & passed a letter to
the Prime Minister, Manmohan Singh, asking P. Chidambarams resignation stating his direct
involvement in the 2G scam, but later Supreme Court gave a clean sheet to P. Chidambaram.
Three major parties involved were Politicians, Corporations & Media. Politicians role we have
already discussed.
Medias Role in 2G Scam:
Nira Radias conversation with politicians and corporations was recorded & leaked. Barkha Dutt,
NDTV Jounalist, was also found in the conspiracy threaded by A Raja. Vir Sanghavi, HTs
editor was also accused for writing articles reducing blame on Nira Radia.

Corporations in 2G Scam
Unitech Group, Swan Telecom, Loop Mobile, Videocon Telecom, Reliance Communications are
involved in this gigantic scam.

A Raja sold 2G spectrum to Swan Telecom @ Rs. 1537 crore in turn Swan sold 45% of
its stake to Etisalat @ Rs. 4200 crore.
A Raja sold 2G spectrum to Unitech Group @ Rs. 1661 crore in turn Swan sold 60% of
its stake to Etisalat @ Rs. 6200 crore.
These companies made a collective bribe to Ministery of Communication & IT an
amount of Rs. 10, 772 crore.

The scam had its effect on Indian politics, forcing the Central Cabinet to drop its Minister
A.Raja, giving the opposition a chance to blame the UPA government as the most corrupt
government in the history of India. The scam would also be used as missile by the NDA during
the general coming elections.

References for the data: