B-school placements in the aftermath of the Terrorists attacks & the Financial Tragedy... (Part I)

Financial crisis that has taken the world by storm had been in the making for some years now. It is ironical how the entire financial mechanism all over the world was unable to detect the looming threat at the right time. Add to this economic tragedy the ill effects of terrorism and the final mixture looks potent enough to blow us all.
It is now a known fact that 2009 is the worst year to past out of a B-school in India. Financial sector which accounted for roughly about 20% of B-school placements last year has seen business plummet to record lows. Although none of the Indian financial giants have gone bankrupt at the time of publishing this post but their fortunes have been severely affected by the current financial mess. The international Ivy League investment banks like Lehman brothers which to some extent were responsible for driving B-school salaries sky high have gone bankrupt. Many Indian Financial giants have already freezed fresh hirings and are currently revisiting their business strategies.
IT-ITes is another bread butter sector for the Indian B-schools. Rising IT exports had resulted in IT companies also absorbing about 20% graduates last year from the top rung B-schools in India. Rupee depreciation has affected the IT sector more than its appreciation did last year. Add to that the effects of the current economic mess, and the placement picture gets gloomier.
All sectors are interlinked and when the economy is in mess, only few sectors can look up. Automobile companies in India are already feeling the Pinch. Tata motors & Ashok Leyland have laid off thousands of temporary workers (Tata alone laid off about 4000 workers), closed their plants for short intervals to get rid of the excess inventory & Mahindra Automobiles reported a decrease of more than 40 % in profits . Tourism and hospitality are also down as people can’t spend if they don’t earn. Realty sector is the worst affected of all. Unitech in its bid to get over the current liquidity crisis and meet its financial obligations sold a stake in its telecom unit to Telenor of Norway, laid off hundreds of employees and is now planning to sell off a stake in the hotel chain it was developing. DLF, Omaxe and Prasvanath have also either laid off employees or resorted to huge salary cuts to tide over the crisis. Everyone is aware of the aviation sector mess and I don’t intend to elaborate further.
Now add to a already gloomy placement season, the effects of the terrorist attack on Mumbai. If investors can’t travel to India because of security reasons, will they invest in India? Will any investor put his money in a project, the security of which can’t be guaranteed by the local government? Experts say that the terrorist activities won’t affect the Indian economy in the long run but effects will be seen in the short run. So what future holds for the B-school batch passing out this year?
A prominent B-school in Gurgaon has opted for a roll-on final placement process this year as opposed to a week. A roll-on final placement process was completely unheard of till now among the top B-schools in India. Another famous B-school in Mumbai with an international campus has opted for two placement weeks against the usual one. The same applies to another famous B-school in Pune with affiliation to a prestigious group of Institutes. Another well known B-school in Ahmedabad which held its final placement week last month failed to place around 50% of its batch. The school has now opted for a roll-on process. All this was before the Mumbai Terrorist attacks, the effects of the attacks are yet to be seen on placements. According to some estimates, atleast 10-15% premier B-school pass outs of last year are either unemployed or being considered to be laid off. Companies which hired in bulk last year are non-committal about visiting campuses this year. Some companies have resorted to hiring only from their summer interns while many have completely freezed new recruitment.
However not everything is gloomy for students and companies. The positives and what students can do to tide over the current employment crisis will be discussed in the subsequent post.

Gujarat & China show the way…!

Gujarat chief minister Narendra Modi recently announced major investments in the state. According to estimates, Gujarat has cornered about 22% of total investments lined up for India this financial year, the highest by any state. Gujarat Government has been able to achieve this feat on account of its good infrastructure and governance. Modi said that his government will continue to spend heavily on infrastructure projects and that the economic slowdown doesn’t trouble him. He said that the heavy infrastructure spending from the government coffers will stimulate growth and consumption in the state. He also announced a loan interest subsidizing scheme for infrastructure projects in the state rather than letting the private sector put them on hold.
China too recently announced a massive $ 576 billion bailout package for the Chinese economy. Looking into the nuances of the package, a major part of it is directed towards building infrastructure which was not planned earlier. The Chinese government surely sees this slowdown as an opportunity to build up on the areas it is already good at. Such a massive unplanned additional government expenditure on infrastructure will give necessary boost to the economy and also help build infrastructure for the future. The government is ready and willing to sacrifice short term fiscal targets for long term prosperity of the Chinese state.
Back to India, after cutting repo rate by more than 2.5 % and infusing about INR 1,45,000 crore in the Indian economy, we are still in the midst of a major economic slowdown. The measure has been effective but not had the desired effect. The government by reducing borrowing costs & making the required capital available to the industry is doing its bit in not letting the private infrastructure projects go out of stream. But the Indian & the various governments also need to gear up their own spending. Such measures will affect fiscal targets in the short term, but go a long way in maintaining the 8%+ growth rate for India apart from promising good infrastructure. Gujarat & China have taken the lead, now India should follow the path.

How Predictions fool us…

India will grow in FY 08-09 at 9%...8%....!! Oil will peak at $ 200 / barrel by the end of this financial year. Indian aviation industry will continue to grow at 30% and will require around 900 new aircraft by 2020. These are just some of the many predictions reached after thorough analysis by some of the most prestigious institutions throughout the world last year. It’s hardly a year and we know how much has really turned out to be true!!
Sure, the economic conditions have gone through a sea change from the time these predictions were made but isn’t the risk supposed to be factored in while making such predictions?? This is truer especially when such predictions are the base upon which huge business and strategic decisions are made by the government, big organizations and also the investors. These organizations stand to lose billions because of decisions made on the basis of such faulty predictions. Most of this is taxpayers and investors hard earned money.

Is it that when the going is good, we tend to accept any rosy predictions that come our way without really contemplating over the basis of such predictions?? Why we don’t take such predictions with a pinch of salt?? Why we lose our rationality during such good times?? Its only know that all the previous predictions are being re-analyzed and new rational targets set, but the damage already done cant be repaired.

Obama inspiring a minority Indian PM?? (Part-II)

In my previous post, I discussed about the agenda adopted by Obama in his election campaign and why India is still not ready for a minority PM or for an open public debate for the same. I also discussed about how media should be more responsible and not promote racial discrimination. In order not to be branded as a pessimist and also to present the other side of the story, let me now discuss the positives that have come out of the election of Obama as the president towards having a minority PM in India.
“If it can happen in US of A, it can happen here in India; if Americans can get over minority and discrimination, so can we and vote for a minority PM”. These are precisely the thoughts invading the minds of millions in India right now. If the whites in America can get over their chauvinism, put development ahead of race and vote for a black president than why can’t we do the same? The election of Obama as president has forced the majority not only in India but throughout the world to think so. It has influenced people all over the world to think beyond racism and to think of development. Since the events in US of A influence the entire world, every moment happening over there is keenly watched by majority all over. Having a minority President in America has definitely made the majority more open towards having a minority leader in their own backyard.
Speaking about the minorities, the election of Obama has given them hope. Obama has inspired the minorities around the globe that irrespective of their race or origin, if one is capable and has the right motives, he or she can & will rise above the grassroots. He has given the minorities the hope that they will not always be discriminated against. He has given millions the hope that change can happen and if there is the will, it will happen. If change can happen in America, it can definitely happen in one’s own backyard.
Finally having a minority president will make the minorities all over the world more receptive towards US of A, change public perception and gain positive image and better relations for America with countries throughout the world. The change is inevitable and the change has finally come.

Obama inspiring a minority Indian PM?? (Part-I)

The announcement of Obama as the 44th President of the US of A, has fueled considerable debate in India about a minority Prime Minister. Coming on the heels of the successful stint of a minority President, Indians are aptly justified in dreaming so. But are we really prepared for a minority PM? Will the majority accept the same?
It is a known fact that Obama although a part of minority didn’t win US elections because of his race, origin or anything else that can be described even remotely discriminative. He also didn’t win because the minorities voted for him; he won because in addition to minorities, even the majority voted for him. For Obama, his race was never an issue. He fought the US elections on the development agenda highlighting the current economic crisis, the failed bush administration policies, and the two wars. Obama’s race definitely played a role in getting the blacks to vote for him but the whites voted for him because he symbolized hope, hope that the current crisis can be taken care of and US of A will again reign supreme in the world. Obama is also at ease discussing issues of racial discrimination out in the open as was demonstrated by him by comparing himself to a mutt in his very first press conference after being declared the president elect.
Coming back to India, have we really got over caste politics to have a minority PM? The very idea of having a minority PM shows how deep rooted discrimination is in our society. If it had not for the discrimination in India, we would have spoken of having the best candidate as PM rather than thinking of his race or caste or origin. In India, people still indulge in negative voting i.e. voting to keep a candidate / party out rather than voting for a candidate in (Muslims routinely vote to keep BJP out of power irrespective of the credentials of the candidates); people vote for their community candidates although they may be convicts; candidates frequently buy votes from public and honest candidates are forced to opt out of the election process. India may be the largest democracy in the world, but that doesn’t make India truly a democratic nation. Democracy means not only the selection of representatives by the electorate but it also implies that the voting should be fair and not based on any kind of discrimination. So is India truly democratic?
In India, politicians still plan their campaigns around the race or caste to which they belong rather than the development work they have done for the public. People are still discriminated against based on the part of the country to which they belong. In such a scenario, having a debate on minority PM is only fueling further discrimination. Also, media should be more responsible and promote developmental politics rather than discriminatory politics.
Speaking about the minority leaders in India, Mayawati leads the pack with her Dalit development agenda. Mulayam Singh Yadav calls himself the messiah of the minorities. BJP champions itself on its Hindutva philosophy. Congress calls itself secular and devoid of any discrimination but lets North-Indians suffer at the hands of MNS. Bihar politicians were quick to resign from Lok Sabha when Biharis were discriminated against in Mumbai, but were missing when atrocities were being committed against Christians in Orissa. These are a few examples of how discrimination is really deep-rooted in India. Till the time we get over such public show and acts of discrimination, even the idea of having a minority PM will add to further discrimination and encourage more negative voting. Our leaders need to make development the agenda for their election campaigns rather than indulge in any sort of discriminatory or hate politics. Media should also restrain from fueling such discriminatory thoughts in the minds of the India Public. Media should use its reach and influence to help their readers vote for the right candidate and not the caste candidate.