Archive for Political

admin | August 19, 2015
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The Chinese Way of working out ROI and the Start Up Valuation

Over a period of time the world is wondering as to the justification that the Chinese planners have while investing in huge( rather wild shot ) infra investments . A similar set of questions do crop up when we see the mind boggling valuations that are placed on the newly start up e business ventures , particularly in distribution and marketing e businesses .

The questions and dis belief is based upon a strong belief in the existing set of the parametres of evaluating an investment decision and if you view these valuations and investment decisions from your existing set of norms and standards, you will never find them attractive and will find them crazy!

For instance, China views political and strategic advantages as a part of returns and thus places a long investment period to evaluate and justify its viability. The period that they seem to have is much much beyond the standard 10 to 15 years . They also view the jobs created in domestic market and its fall outs as well as boost in trade and commerce, political strong hold etc as a part of their returns. Than only the setting up of an entire city on a foregn land or building roads over the Himalayas can be justified. Their way of understanding and managing Macro Economics need to be studied more carefully in order to know our competitor.

As far as the new found crazy valuations of e retail businesses are concerned, the investors also know that such high valuations are not to be justified in a short run. They are also not naive to believe that there is a near certainty of someone offering them a better price in near future.

What they seem to be aiming at is a strong foothold over the market that these companies cater to, the criticality of the market that they cater to and the real estate investment that they need to make to be in the market place . The pre requisite for keeping such criterias for justifying the investment decisions is to have a very very long time frame for justifying the investment. It is clear that they too have a really a very long time horizon to evaluate their investments.

Who these investors really are, is a matter of guess and my guess will be as good or as bad as yours !!

Category: Finances, General, Political |
admin | January 17, 2015
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Petrol Prices.. A relief , more to GOI Exchequer !!

The recent nose dive of the petroleum prices have surprised ( happily ) almost all of us . The experts have now come to a stable view that it is not just the lower demand due to slump in the world economy but there is also an over supply position from the producing nations leading to this steep and steady fall in petrol prices

Lower petrol prices would help in reducing the costs and inflationary pressure in the importing countries like India ..but the Indian government has preferred to smartly increase the excise duty on Petrol.. and has passed over only a marginal gain to the consumer. The full effect of the petrol price reduction thus is not passed over to the consumers and hence the pressure of inflation will not reduce to the full extent directly.Though the excise collection will enable the Government to check its deficit significantly and thereby control the inflation. In other words, the money supply will not rise due to lower deficits, thus controlling inflation.

These are the choices of the Macro Economists and they have played the game smartly.

But my concern is Simple like a common man. The Concern is… will the government reduce the excise when the petrol prices go up. Please keep in mind hat this is not a long term phenomena.. the prices will bounce back as soon as there are signs of recovery globally and the producers will than hit back with controlled production. A question like this need to be asked right now and a a soothing assurance from those in the Power need to be obtained. If this is not done, consumers will keep paying higher excise for a long long time.

Category: Finances, General, Political, Taxation |
admin | September 22, 2014
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PERFORMANCE AUDIT …. WHY NOT FOR LISTED COMPANIES ?

I was reading the recent book ” not just an Accountant ” by Vinod Rai .
An excellent book, worth a read for all auditors, in particular . It narrates the plight and complexities of the task of an auditor very lucidly.

one thing which I clearly noticed was that the real complex findings of the CAG emerged out of the Performance Audit that the CAG is called upon to perform as an auditor . The reason is simple. He is supposed to audit the Revenue and expenses for and on behalf of the people of India. It is the matter related to spending public funds and use of public resources.Hence he is called upon to look at the propriety aspect of the expenditure and conduct performance audit.Quite rightly so .

I am sure you will agree that even the large and listed companies, to a huge extent use public funds and resources. Why should we shy away from getting the Propriety aspect of the audit and performance audits when it comes to regulating audit requirements of such companies . Who should conduct such audit, what should be the Terms of Referance, periodicity and circulation of such reports etc can be brought out for debate and serious mind needs to be be applied at relevant level sonner than later .

Category: Finances, General, Political, Uncategorized |
admin | June 11, 2014
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The Gujarat Model

The Curiosity:

Many are trying to understand the characteristics of the Gujarat Model. The attempts made to deconstruct the Model are as many and as fragmented as those made to prove the UFOs

Practice and Implementation (Theory follows practice !!)

Unlike other models of governance, where the practices are put into place based on the theories, the reverse is the case with the Gujarat Model, where the concept and its practices need to be analysed in detail so as to form a theory based on it.

In a way, it is more of an Implementation Strategy

An inclusive, participative and target based execution oriented approach

Attitude:

The Model is, in a way, an approach – and paradigm shift in attitude; to bring participative implimentation of Developmental schemes

Sound common sense, innovation & genuine desire to help common man are important pillars, where the preference is towards long term gains

An attempt that has proved that good economics is good politics as well

How it Began ?

Pre-2000:

Although Gujarat has always been an entrepreneurial state, a depressed & fatalist state of mind prevailed till 2000 in the state, just like rest of India.

Ambition, confidence & faith in action had to be established for growth and progress

Boosting the Morale:

Huge, attractive functions on regular basis, such as the Vibrant Gujarat festival which promoted the State as an “Investment Destination”, helped a lot in boosting the morale

Change in power structures:

A decision to keep ministries small and not giving positions to party workers in boards of PSU gave a professional and ‘No Nonsense’ touch to governance within the administration

Professionalisation of governance has been a focus. For example: Entire ministry attended a seminar at IIMA

Read Full Details Click Here

Category: Political |
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