IIT’s and IIM’s are they helping Bharat?

I am a student at IIT Kanpur. IIT is one of those few names in India that are comparable to if not bigger than “Brand India” itself. Every other day we read volumes in the newspapers about what this breed of graduates and postgraduates who were in one of the IIT’s or IIM’s and are changing the world. In the “SACRED” places like Silicon Valley or Times Square, having brand IIT or IIM on your CV can open the gates to success and laurels for you.
First Prime Minister of India, Pandit Jawaharlal Nehru had realized that to keep pace with the ever changing world of science and technology, it is necessary to collaborate closely with the outside world. Thus due to his vision five IIT’s were formed at Khadagpur, Kanpur, Delhi Bombay and Chennai with collaboration and assistance from the leading universities and intuitions from the countries like US, Germany, USSR etc. and since then many more have been added to this list.
Over the years these institutes of National Importance had evolved and grown into the centre of excellence in the field of Science and Technology. These institutes (like a factory) are now producing nearly 3000 graduates and many, many more post graduates each year.
Recently I read a report in Times of India that about 50% of successful entrepreneurs in India are the pass outs from these IIT’s and IIM’s. It surely makes me proud about the institute and being part of it. But the very next question that came to my mind was is all this actually helping India or Bharat as we Gen Y people refer to it.
We at IIT are made to live in a virtual world. Students of these elite institutes don’t have a much interaction with the local people, local Infrastructure or any other local thing or flavour of the place. I know IIT Kanpur more than any other IIT thus will quote examples of what I saw here than at any other place, even when I know that the story is more or less same at other places too.
City of Kanpur is in a sorry state but IIT Kanpur is a booming and happing place. In most of the areas of Kanpur you can actually not find even traces of road, but inside the campus you can see roads as smooth as silk. In the city, load shedding of 6-8 hours is a norm, but inside the campus, we are informed through a mail 2 days in advance about even 5 minutes of power cut. The institute which has Kanpur as an integral part of its name is simply out of bounds to the people of Kanpur. For our various festivals in campus we proudly spend about 1-1.5 crore in about 7-10 days, but we rarely think of helping the city to improve its infrastructure.
At in these colleges the students are not able to interact with the locals, they are just not aware about their issues, so when they graduate from this college they just can not relate to “AAM AADMI”. Thus for them these people are just part of infrastructure that is to be used for some time. I feel this lack of association more than affiliation with the locals is a major issue due to which India faced brain drain for so many years. Though now we are observing that more and more people are coming back to India or opting not to search for opportunities abroad, they still are far away from these people. Even the ones who are having some interactions with commoners are still interacting with the top 30-40% of the population (Mind you even the person who is at 50% line in terms of his net asset would be having at least ten thousand times less assets than any of the internet users in this country) and not with the vast majority of the nation, for whom the biggest challenge of the day is to arrange for the bread at the end of the day.
These colleges have surely produced more entrepreneurs than any other place in the country, and they are surely producing huge amount of wealth at a brisk pace. But it is the wealth only a few people earning, but what about the people who are at the bottom of the pyramid? What about the ones who were displaced from the very place which is now the centre of excellence? What about those who are not allowed to enter into these places of “National Importance”, the places which are the large giants that gallop a huge some of money that the common people paid for the nation’s development in the form of taxes?
India is surely gaining a lot from these centres of excellences in terms of the GDP growth and technological improvement. Indeed not only India but the whole world today looks at them with respect. The efforts these sharp and curious minds have made can not be equalled leave surpassing. But these gains are just restricted to India and are not getting transferred to Bharat, the poor India that still fights for the basic issues like “Roti aur Paani”.
I feel that the only radical step that is required to make India more equal and grow faster on each and every scale and not only on GDP indexes, is to make the two India’s stand face at least once in the life time. And what can be the better place for this than these great institutes. With a small interaction of about 2-3 months of the best and brightest minds of the country with these people can mark an impression on these people. And thus I hope slowly but surely they will try holding hands of BHARAT and make it walk shoulder to shoulder with India. This might reduce the speed of India’s growth a bit but then as the say it, “Rome was not built in a day”.

Bharat Nirmaan… Is it taking India anywhere??

India Shining!!! Bharat Nirmaan!!! These were the slogans to which; till recently; I regularly fell for. And I believed all these slogans with the heart and soul. Where ever I went I saw prosperity all around me. Roads built, green fields, children running in school uniforms, India doing great in all fields it was in…. nothing actually is bad in India. And India is moving at express pace to get into the league of developed nations.

I was born and brought up with high level bureaucratic officials all around me, in my family and my relatives. I had always seen them working for about 10-12 hours a day. So when ever I was told about the reports of inefficiency and non productiveness about Indian bureaucracy I conveniently used to believe that it is the lower level that does not work, it is the lower staff that is ineffective and uninterested and it was just the politicians that made false promises, but rest all is good.

But recently for some project in my course I went to a village called “Lodhar”. This village is just about 1-1.5 Kms from IIT Kanpur. When I reached there my beliefs were intensified in the growing brand called India. The streets were paved; there was proper drainage system on both sides of the road, electric wires reaching all houses. That village was looking more like a sparsely populated town; instead of a village; and that too a developed town. I also found out that it was declared as Ambedkar Village by UP state government. That is it will be a model village for all other villages in the state. And at macro level it surely looked impressive.

Then I met few people there, ranging from the ex village chief “Pradhan”, to a labour working in some field, to children playing on the village streets. For first five minutes they looked very excited, both about my visit to their homes as well as the system around. But then as we spoke about one topic and the other, striking differences started shaping up. I was told that politicians of all ranks; right from party workers to CM’s to party chief; do visit their villages regularly and make promises to them. But the villagers are so much habituated to that, that they don’t believe a single word said by them. (This was very much on expected lines of my belief).

Then I was told about the other MAJOR issue which I would like to mention here, I was told that the electric poles; about which I was very happy initially; were in place for a long time, but are mostly there for just ornamental purpose, electricity rarely comes. They told me there had been no electricity for even a single minute in past 7 days. Then a very sensitive topic came up; topic of land. I was told that initially they were encouraged to build houses in a particular area near village which was earlier demarcated as pasture land next to the village. But now when they shifted to this place the authorities are reluctant or shall I say, hesitant to legalize that area as a residential area. In this by authorities I mean the likes of District Magistrate and Community Development Officers. They had been regular visitors to the village and even said that they will get the issue done. But then words are just words.

For past few days I had been constantly thinking about this particular village and the attitude of these officers towards this village and their duty in particular. The only word that is residing in my mind is WHY? I was thinking, observing and even discussing about the possible answers to this question.

I figured out that the answer to this question can never be objective or simple; here I am talking about just the answer and not the solution to the problem. I felt that, in the rigid and long bureaucracy like ours, these higher officials are not all that powerful as they look. Even when they have full authority over their department but to move higher up the ladder; they need to have clean unbiased track record. And with India’s mean and corrupt practices being talked around the globe, being productive is the biggest sin for these officers. A top official in a government body said, “To get promotions, one has to stay quiet and not do any thing. As if one tries doing any thing positive, then there are so many vigilance and other probing committees which are ready to go over-time to read between the lines and build issues from nowhere.”

I also felt that though our politicians don’t have much interference on the day to day work of any government body. But they have kept the power to relocate these bureaucratic officials, and we regularly see the politicians use this power with full efficiency, every time when state observes a change in power. The main focus of these politicians is to appease their respective vote banks, their supporters in co-operate firms and also several other activists in other fields, and thus they are more than happy to use their powers if action of any officer does not suit their personal or political agenda.

I also found one more thing, that even when these officers are willing to work for the cause, the department is not willing to sanction adequate funds to them. This hesitation by the department can be due to a lot of reasons from as fundamental as no availability of funds, to differences in priorities between different levels of hierarchy.

I feel that the real change in India or dreams like India Shining or Bharat Nirmaan can come true only when we have a massive change in mindset of our top hierarchy. Things are improving slowly but surely, with “Gen-X” coming into the government system. But with the government structure being so rigid and bulky, we should hope that this generation can sustain its enthusiasm and change the system, instead of system changing them.

(Written 8th March 2009)

Downsizing - Its impact on India

The post slow down effect, that came after the subprime crisis and going down of the big ticket finance companies like Lehman, Fannie Mae and Freddie Mac had a huge ripple effect all around the globe. This global meltdown is now being considered as the biggest meltdown after “The Great Depression” that began in 1929. This is certainly the gravest and biggest one as it directly impacted many more economies and people (directly and indirectly) than any economic crisis ever did in the human history.

The direct impact of this crisis is felt not only by the developed economies like US and European Union but it also shook the fast developing giant economies like China, India and Brazil. The companies which were up-beat and were willing to take high risks are now into damage control mode with cost cutting and lay-offs. All around the globe companies are cutting jobs in a hurry. Citi group leading the pack with job cut in excess of 50,000. British Telecom cutting 10,000 jobs. Peugoet is axing 3,550 jobs. Russian firms will lay off around 200,000 workers from their companies.

Developing economies like China and India are also facing direct impact in their growing patterns due to this crisis. With the international demand hitting an all time low the exports from these countries are facing a sort of chin music. China which had been a strong export oriented economy has been impacted hugely due to this with reports of about 300,000 workers working in different parts of China had already returned to their native places by November mid.

This crisis had also touched India with its GDP growth forecast coming down to 6-7 % after clocking 9% for three successive years. Though there had not been a huge direct impact on India thanks to the huge consumer market India has and tight banking policies of India. India Inc is still watchful and is applying to wait and watch policy on how this crisis will pan out along with reducing the costs in the more traditional way. A few of the cost reducing methods that India Inc is undertaking are companies are now trying to lease out most of the assets instead of owning them, they are reducing the expenses by using resources more efficiently.

Though Indian companies are banking on cost cutting they are still reluctant to downsize its workforce. While IT Majors like Satyam are reviewing their hiring process, many companies have deferred their hiring plans to end of this fiscal. Most of these outsourcing companies are waiting for the dust to settle down and are aiming at major outsourcing contracts from west that are put on shelves after the turmoil. As a lot of people can foresee big outsourcing projects coming the India way to reduce costs as India is one of the major IT cost centre for the world with cheap work force available. Even in some other sectors also, HR Managers are willing to wait for some time before they go for hiring again.

But even in the tough times like these there are sectors like Auto, Insurance and Banking that reviled their desires of hiring in big numbers with Toyota and Maruti being the forerunners on the hiring front in the slowing Auto Sector showing the amount of confidence these companies have in strong fundamentals of India. But this is not the only case with Metlife banking big on India by promising to add about 32,000 jobs in India in current fiscal. Following it closely are PSE’s (public sector enterprise) and banks like SBI (promising to create 25,000 jobs) and IDBI bank. Most of these companies are looking to explore the Indian market for higher revenue in times of international slowdown.

So for India even in these tough times all is not lost. India being a strong consumption driven economy and RBI pumping more money into the system through rate cuts, the credit crisis being faced by the companies would also get subsided. So we can hope that within about next half year or so, India will emerge out successfully of this crisis with just few job cuts. By the time world is over this crisis India will be hopefully be a much bigger and stronger economic power than ever before.

(Data for this article was taken from various articles from http://economictimes.indiatimes.com and http://www.in.com)

(Written on 29th Nov 2008)

Satyam or A-Satyam

E&Y Entrepreneur of the Year (2007), Asia Business Leader Award (2002), Dataquest IT Man of the Year Award (2000) are a few of the awards this man received.

His journey began from a small town called Bhimavaram in Andhra Pradesh. Byrraju Ramalinga Raju born in an agricultural family and a management graduate from Ohio University, tried out a lot of ventures like construction and textile. He finally found Satyam in 1987, which grew leaps and bounds; it bagged its first fortune 500 customer John Deere & Co. in as early as 1991. By year 1999 it had presence in 30 countries across the globe and next year the employee head count crossed 10,000. It crossed the revenue mark of US$ 1 billion in 2006. By the end of 2008 it had about 53,000 employees, 690 clients of which 185 fortune 500 clients, spanning in 20 industries and 65 countries, development centers in 12 countries and revenue in excess of US$ 2 billion. Or is it?

On 7th of January 2009 came a confession from him that shook the nation. He confessed to Rs 7,136 crore fraud, Raju said Satyam's books had been cooked for years to inflate profit and revenue figures. In September 2008, they showed a non-existent cash and bank balance of Rs 5,040 crore and hundreds of crores of fictitious accrued interest and debtors' position. Liabilities worth Rs 1,230 crore were kept hidden. These huge figures made it the biggest accounting fraud in the Indian history. The first warnings signals came in as early as Sept’08, in the form of a report from DMRC chief Sreedharan hinting a big scandal in Maytas, controlled by Raju’s son, but these allegations were disposed of by Planning Commission on the basis of not backing with evidence on his suspicion. Also in mid December when Satyam announced its intensions on buying Maytas Infrastructure and Maytas Properties, serious questions and protests were raised against Satyam’s top management.

The fraud that is also termed as Indian version of Enron had enormous impact on the Indian markets; with Satyam Computers own stocks getting a beating at the sensex with value of its stock falling by as much as 78%. It also triggered the fall in both Nifty and Sensex, as people became cautious of stocks in family run businesses ranging from RIL, ADAG, DLF to Bharti Airtel. Stocks of the sectors that were not known for best of corporate governance practices also went southwards, thus totally negating the positive market sentiment that was build after the second stimulus package.

The more important question is about the future of those 53,000 employees that the company has. With this news of fraud coming in there is a low probability of Satyam getting new clients and even the existing clients will start parting away from it. FIFA already said that it is monitoring the situation related to Satyam. More of its clients are expected to follow and there is a bigger risk of clients even moving out of their existing deals. If this happens, then the staff working on those projects will be out of service. So they are facing a risk of getting laid in future along with the employees who are already on bench. There is one more issue that might be crossing the minds of Satyam’s employees that with minimum out-go of salary being estimated to Rs 500 crore but according to Raju’s confession mail, company had cash of only about Rs 320 crore in cash and its bank accounts, that too in the month of September. They somehow managed to pay salaries till now but possibility of paying full salaries to its employees in months to come looks impossible to say the least.

Within minutes of Raju’s confession, news of strong actions that are initiated against Satyam has made a lot of noise. With law suits filed against the company in US, SEBI ordering probe into Satyam operations. Major brokerage firms degrading its credit rating and slashing its target price. NYSE halted the trade of its stock. BSE and NSE removed Satyam from their benchmark indexes, Nifty and Sensex respectively. Government also started a probe into corporate lapses and financial misdemeanor in Satyam.

Even with all this happening and an own it all confession of Raju there are a lot of questions that are left unanswered. Or to say this whole issue gave birth to a lot of questions like the role of PricewaterhouseCoopers (PwC), as per Mr. Raju’s confession this financial gap was accumulated over the years, then what was this auditing firm doing during those years? It is interesting to note that PwC had been the associated to accounting irregularities in the now-defunct Global Trust Bank in 2007 and in DSQ software also. Another interesting fact is that Raju stated that the operating margins of Satyam were unusually low at Rs. 61 crore or 3% which looks weird as traditionally software industry boosts of high operating margins with industry leader Infosys having about 33% and other IT companies have this figure in the range of 20-30%.

Sources for this article
http://economictimes.indiatimes.com/articlelist/40657581.cms
http://en.wikipedia.org/wiki/B.Ramalinga_Raju
http://en.wikipedia.org/wiki/Satyam_Computer_Services_Ltd

http://www.satyam.com/

(written on 7th January 2009)