Wednesday, April 20, 2016

Books to understand the dark side of Indian corporates

One can easily get in a filter bubble by reading the same set of newspapers, magazines and all. Hence, to avoid confirmation bias especially about India Inc (4yrs of work experience has removed the blinkers even if they existed earlier), it is good to seek out and read books that aim to reflect the dark side.
While picking the books, though not having read many/all of them, I adopted the following criteria.
·         Indian Business environment-The book should impart insight on the Indian business environment-I have excluded equally great books like that of P Sainath
·         Fact based/Objective-Should not be a set of leftist propaganda nor should it vilify business for their mere existence. Hence, does not include books of Ms Arundhati Roy.  
·         No hagiographies aka business biographies-These should not be written by the person themselves-I have noticed this leads to too much rosy picture, which is anyways available.
       Non Fiction ONLY-There are several excellent business novels which are on thinly guised events but not many may recognize the characters so I have ignored these

Without much ado, we proceed to the books classified by sector
If confused whether to buy these books, read the reviews on Amazon, often these will give the essence and help you decide whether to buy them. Also, I have given Amazon links since these are the cheapest source I have seen-I do NOT earn any affiliate income from these links!
Infrastructure/Natural resources
Unsurprisingly, this sector accounts for many books due to the way resource allocation was perverted and twisted in the pre NDA times.  The book by an IIM Ahmedabad professor and reputed journalist, examines the gas pricing dispute

Corporate Failures
The VUCA Company This outlines the failures of prominent listed companies such as SKS, Wockhardt, Renuka, Suzlon
Why I failed-

E Commerce This book is making waves, and while receiving mixed reviews, is among the few ones on the sector, in India or globally

Scams/BQ Quotient in General

Land Acquisition/Naxal areas

Scams in General


Saturday, April 16, 2016

Cement Industry Association prebudget memorandum-crossing the line to ask for policy changes!

In 2012, I had blogged about how prebudget memorandums by professional associations were blatantly self serving

However, the same is true of those circulated by industry associations-of course the very act of a memorandum is to ask for a change-so one should not be surprised. But when the logic of that change is so blatantly self serving, then one is surprised. For example, the Cement manufacturer's association  desire free fly ash as raw material, restriction on participation in e-auctions and making it mandatory for the indirect tax administration body CBEC to reply to their clarifications within 60days OR else have the industry version deemed to be accepted. All these are quite rich from an industry accused of cartelism. The full version of the memorandum is below 

but I have taken the liberty to put extracts in italics, with my comments then.
  • Cement Industry’s initiative of popularizing PPC has helped thermal power plant in overcoming the menace of fly ash. However, what started off as a free offering has now been converted into a revenue stream by certain power plants. This is leading to a situation wherein an innovator is being penalized and a polluter is profiteering. It is high time that cement industry is supplied fly ash ‘free of cost’ on long term basis on the worldwide principle of ‘Polluter pays’ Cement industry wants free fly ash!
  • Spot E-Auction Scheme Under E- auction any entity (irrespective of actual user, trader etc) can participate. It has been experienced that the traders are able to get substantial quantities of coal under E- auction which are then sold to actual consumers at higher margins. This unnecessarily increases the cost of coal for actual consumers. It is suggested that only actual consumers are allowed to participate under E- auction with some mechanism for monitoring which may include self-declaration & stringent action on diversion of coal etc.  Want coal auctions to be restricted to end users, so that they can pay less!
  • It is suggested that a suitable provision may be incorporated in the Rules making it mandatory for the CBEC to give clarification sought for by Association of the industries or an individual assessee on the point within 60 days from the date of such communication. It should also be provided in the Rules that if no communication is issued by the Board within the stipulated period, the interpretation understood by the Association of industry or assessee will prevail upon the department. Insistence on a ‘RTI’ for Government to address policy representations, even though private sector reserves the right not to address shareholder questions!  When even advance rulings reserve the right to avoid answering possible tax evasion questions, then why should a free service have this SLA? 

Friday, April 8, 2016

Spreadsheet mastery no longer mandatory course-ahead of the curve or eroding competitive advantage of IIM Ahmedabad students?

Recently, I read an article in Livemint by an IIM Ahmedabad professor who described the rationale of no longer keeping the mandatory excel course in the first year. I have reproduced the relevant section below, and I strongly suggest reading the article in its entirity. 

There is no denying the utility of a spreadsheet software, and given the ubiquity of Microsoft systems in organizations, perhaps even unavoidable. It remains useful for prototyping, basic data analysis and teaching elementary statistics, but, in my opinion, it is not exactly suited for large projects and serious scientific research….We have done away with our compulsory Excel course in the first year, and many of us use R and Python in the classroom regularly.

From an academic perspective, IIM Ahmedabad is doing the right thing by being 'medium' neutral and teaching students to handle big data sets with R/Python, and not to depend on an inefficient error prone medium. This is very helpful for students heading to technology or such firms with big data, and to instill a caution for the limitations of excel. However, in my view, Excel is no where near the redundancy path (despite clarion calls for the limited use of it in finance) , and first year MBA students need to learn this for the following reasons

  • Excel is best for 'Small Data'-Excel can handle 1Mn rows and 64,000 columns. Most data sets in corporate life can be dealt with in Excel, or even if analyzed in MS Access, are best summarized in Excel. 
  • Interoperatable with legacy software-Be it a ERP, planning or other application, chances are it will have ability to export in excel or txt. Ability to manipulate this well will save a lot of time. 
  • Self study options limited in first year-Usually, students with corporate exposure especially with accountancy/Big 4 background would have mastered Excel before setting step into the campus but others would not. Realizing after securing that internship that you need Excel, and that your learning it will impact your grades or other commitments, will make you lament not having learnt it earlier
  • Advantage over other colleges-For whatever reason, IIM Ahmedabad students have better excel skills than their peers from other colleges-this may seem a jingoistic statement from this IIM Ahmedabad alumnus, but I think the mandatory course is responsible, and many seniors have attributed this to their outperforming their peers and completing the projects

Instead of scrapping the course, it would be great to add a session on error proofing or best work practices/spreadsheet audit, so that the tool's limitations are well appreciated. Else, it would be great to advise the incoming students to pursue advanced courses from provides like so that they can prepare for something not taught on campus, but needed in India Inc and helpful in general life.