PGPX ranked 11th in Financial Times Global Ranking!

That was one long hiatus… Let me not bore you with the reasons, but let me (once again) resolve to post at least once a month.

I am very happy and excited to share the news that IIM Ahmedabad (IIM A), my alma mater has been ranked 11th in the recent Financial Times Global Business School Ranking. This ranking covers all those programmes which admit students with substantial work experience and the intake into PGPX is mainly based on the work experience of the candidates.

One more heartening news in this context is that this is the debut ranking for IIM A and this is the best ever debut by any Indian Business School – currently there are only two Indian schools in the top 20. Do check this link where there is a summary about the rankings – near the end of the page there is a paragraph about IIM A’s impressive debut.

FYI couple of the news releases -

1. http://www.iimahd.ernet.in/users/pro-iima/files/Hindu,%20%20New%20Delhi,%2004-02-2011.pdf

2. http://www.iimahd.ernet.in/users/pro-iima/images/IE_01_FEBRUARY_2010_AHMEDABAD.jpg

PGPX FT Ranking Communique – This is the Communique from the current batch of PGPX students about the FT ranking.

My batch-mate Shanmuga Sundar exactly mirrored my thoughts when he said “There was never a doubt that IIMA added value in my life! The ranking is a scientific way of confirming that there is value in it for the future PGPX aspirants!”.

Made in India err… China

In terms of the slice of GDP (between Agriculture, Manufacturing and Service sectors), normally a country first has a skew towards Agriculture and then over the years as its GDP grows in size, there is a skew towards manufacturing. The developed countries have a skew towards the servicing sector. As you might be aware, India’s GDP share evolution missed giving importance to the manufacturing sector and straight away jumped from being a Agro based economy to being a Service based economy. As of 2009, India’s GDP stood at $1.25 trillion with the pie sliced as follows – Agriculture 18%, Manufacturing 22% and Services 60%.

One interesting fact is that Agriculture earns less than the other two sectors while it employs more than 52% of the Indian population!!! Hence, the lure of increased earning potential in the cities is driving the masses to migrate from the villages to the cities. But what happens to the labourers who are migrating to the cities? They are mostly unskilled and the easiest way to find a meaningful skill-based job for them would be the manufacturing sector. IMHO this is what is happening in China. And IMHO, this is NOT happening in India.

Most of these migrant workers end up getting menial jobs with very less vertical growth opportunities (as in construction activities and as guards outside buildings…). If a 25 year old guy is working as a security guard, what type of promotion and what salary growth can he expect when he is in his 40′s and 50′s – when he has a bigger family to support?

My concern is that we are NOT investing enough in the manufacturing sector. On one side we end up amassing unskilled labourers in our cities, while at the same time getting more and more dependent on our (not so friendly and not so transparent) neighbour – China – to import products. Starting from very small things like keychains to huge items like buses (Kinglong bus which is part of the A/C bus fleet in Mumbai is made by a Chinese company) we are importing from China. My PGPX batchmate Esmail mentioned that his erstwhile Pharma employer decided to close a manufacturing unit (specializing in a particular pharma-component) in Mumbai because China built an unit which could meet the whole global demand and of-course undercut the price.

I feel India should focus on the following:

1. Forget the WTO norms (or demand a relaxation) and levy a big tariff on at least strategically important goods.

2. Rupa Subramanya Dehejia has an interesting article here (This article is one of the inspirations for this post). She argues that we should relax the labour rules which are proving to be a deterrent to set up big manufacturing units. The only beneficiary of these policies are the currently employed labourers while in the long term it really hurts the future generation’s working class. I agree with Rupa that relaxing the labour policies will enable big labour-intensive manufacturing units to come up in India.

The election oriented decision making process is the sole culprit that I can think for this sorry state of affairs. Our politicians lack the need (they do not lack the capability, they lack the need) to think of long term strategies for our country. Their only concern is that relaxation of the labour related policies could lead to a back-lash from the unions and lose the votes. Even our masses will not understand that such policy relaxation can help our future generations and hence they do not support such moves!!

3. One other issue that needs focus is the infrastructure – especially Power and Transport. Just a case to prove my point – as one travels from Mumbai to Ahmedabad by train, you can see freight trains waiting for an opportunity to move ahead at every station along the way!! We need a dedicated freight corridor in railways immediately. I remember hearing in my PGPX classroom that India loses 32 Billion USD every year in freight transportation!!! (Just to compare – Indian Software and S/W services export is worth USD 47 billion).

4. On top of all these issues, our huge subsidies (I still cannot fathom the need for free Televisions to be doled out to our masses!!) lessen the motivation for people to work!! These days (at least in subsidy rich states like Tamil Nadu and Pondicherry) it is very difficult to get labourers for even farm activities and construction activities!! Ideally, the common man is elegible for subsidized food (Rice @ Rs. 2/kg in TN), subsidy to build a house, cash via NREGA, TV, Gas stove, minimum price for farm output, free cloth … There are worthy subsidies like free education, free lunch in schools and PDS… But most of the new subsidies lack innovation and take away the motivation for a person to work and earn!!

In future, the skills required by the booming Services sector can employ those coming out of the lower middle income and middle income (those with at least a college degree) and hence these groups will get promoted to the next level while the poor families will continue being under the poverty line – with no one ready to provide them skill based long term employment – further widening the gap between the ‘haves’ and the ‘have-nots’. If more youth remain unemployed, it will result in an increased crime rate too!! As long as the manufacturing base does not increase, poverty eradication will continue to remain a dream.

India’s population is set to grow in the coming decades (while Chinese population is going to get older and remain stagnant due to their one-child policy of the 70′s and 80′s). I hope we do not procrastinate this issue to such an extent whereby we forget how to manufacture even if we have to!!

Thoughts folks?

Just an unrelated tidbit – China is exporting its workers to Italy so that the products can still be termed ‘Made in Italy’!!!

Mumbai

I have lived in four different cities in the past four years – Phoenix, Bangalore, Ahmedabad and now Mumbai (err…. one of them does not really count as living in a city – most of my one year in Ahmedabad was spent inside the IIM A campus with very few glimpses of the city). This is my 5th month in Mumbai and the city is continuing to surprise me and hence this post about the life style in Mumbai as compared to other places.

IMHO, one major difference between living in India and US is that each city in India is culturally and geographically and sociologically different that it takes some time to adjust to the city – and if you love the uncertainty then you will enjoy those moments. In US, you can be pretty sure that within a 2 or 3 mile radius, you will find one junction where there will be two grocers diagonally opposite to each other, one walmart or K-mart, at least one pharmacy, couple of gas stations etc. So if you are landing in a new city, you need not worry as to how to go about your daily routines. You can even rent a car and be independent. In India, it is better to get some guidance about even performing simple things. Nothing should be left to assumption. A couple of examples:

• In India, the worry starts even before you start from your place. How should you commute from the Train station or Airport to anywhere? Can you believe the charge being demanded or should you bargain? Ten years back when Chennai Autos still believed in charging the customer as per the ‘meter’, I remember one particular instance when an Auto guy tried to convince me that from Adyar, Tambaram is nearer than Saidapet!!
• Ahmedabad is too much unfair to the non-vegetarians that one cannot get even packed meat in grocery chains. PizzaHut had to open a 100% vegetarian outlet at Ahmedabad. In this ‘Dry State’, I suppose it is easier to get alcohol than get Eggs (it is very difficult to find a non-butcher Egg shop in Ahmedabad) – while in Chennai and Bangalore even the chain grocers like Reliance fresh and Food Bazaars carry Eggs!!

Auto-rickshaw: When compared with Pondicherry, Chennai and Bangalore, I was pleasantly surprised by the behavior of Auto rickshaws in Ahmedabad and Mumbai. In both these places, the fares are very cheap and the drivers are ready to return the exact change (ofcourse to the nearest Rupee; no one deals with paise anymore in India). Comparatively, the Chennai Auto drivers are the most tyrannical in nature and most of the time I get out of the auto with a feeling that I just got robbed. I feel that the level of corruption in traffic police reflects upon the behavior of the Auto drivers in a particular city. Maybe there are other reasons too…

Mumbai Rains: The biggest surprise for me was the Mumbai Rains. I am sure my writing capability will not do justice to the Mumbai Monsoon and hence let me spare my audience from couple of paras about Mumbai rains. But few pointers:

• A 30 minute rain while I was in Chennai made me realize the efficiency of the drainage system in Mumbai. I have seen it rain non-stop for the whole day in Mumbai, but the water drains out very fast. The 30 minute rain at chennai made me walk in a foot of water!!
• Even the vehicles wear rain coats!!!

A shorter version of raincoat that you find in almost all the two wheeler is the one that covers just the drivers hands:

The other version is the full cover – and the driver sits on top of this cover while driving:

Traffic/Commute: I feel that traffic-woes is the only issue that could detest anyone from moving into Mumbai. I normally prefer a public mode of transportation – if it is comfortable – to commute to office. I did try the A/C bus and the first class train in Mumbai, but was not a happy man when I reached office. So I have started using my car, but still hope that once the rains are over and if I am able to leave home early, trains could be an option… The train is the fastest way to reach almost any corner in Mumbai, but even in first class compartment, you barely have space to place one leg. When compared with suburban trains in Mumbai, I feel that travel by the same in Chennai is a luxurious experience. In Chennai – each train entering and leaving the station is actually an event by itself with some two or three folks waving the red and green flags; A couple of my co-passengers once started arguing whether to get down at Mambalam station or not and they had enough time to complete the argument, get up from their seats, move to the exit and get out – all during peak hour!!!

When it comes to the traffic on road, it is so worse that Mumbai could be the only place on earth where even till 11pm you are commuting in peak traffic. Once, I left office at 10 pm and it took me longer to reach home than what it normally takes if I leave at 7 in the evening.

Rent: The rent is very high (of course) – it costs almost 20K per month for a 2 BHK in the western suburbs. Even in places like Vile Parle (which is still a suburban and not considered to be inside the city) this rent almost doubles. In Mumbai (atleast in the Borivali and Kandivali west areas) the real estate for rental apartments is heavily controlled by Brokers. 2 months of rent is the standard fee demanded by brokers for a 11 month lease. And every time you want to renew the lease, the broker demands another 1 month rent as brokerage. You can bargain/haggle, but I find it atrocious that the broker even has the guts to demand brokerage for lease-renewal (when he practically does not put any effort to get the two parties agree to the deal). It is as if the Broker shares ownership of the house.

One other issue that strikes you in the face is the scarcity of ‘space’. Be it the road or the cubicle in your office or the size of standard apartments – you have to be prepared for less and less space. All my brokers were really surprised when I was looking for a 2 bedroom apartment for just the three of us (me, wife and the kid)!! Couple of them advised me that a 1 BHK is easier to find and that it should suffice me!!

The well-cliched statements like Mumbai never sleeps, everyone works hard, the city is very filthy etc are very very true but no use in me too repeating these sentences… Just one other odd thing that I noticed – if Pondicherry has more than the average number of Bars/Wine Shops, while Chennai has more than the average number of Auto rickshaws, then Ahmedabad has more than the average number of Medical Shops and Mumbai has more than average number of ‘Beauty parlors’  - not just the high-end ones, but even a space needed for a petty shop is enough for a parlor. The snap below is of a typical smaller parlor (Shreeji, the one on the right):

Referring to the first sentence of this post – after four years, now I am forced to unpack my suitcases and settle down. So I have no other option than to love this city and I think I am farelly successful at that attempt!!