The story of India is the story of millions serving as minions of an inhuman state controlled by a few hundred. While homeless people are dying on the street due to lack of adequate shelter, the billionaires of our country are mourning over the erosion in the value of their holdings. Economically speaking, these 60 (and now 40) billionaires are the “VIPs of India”, as a 38% fall in their net monetary worth has led to a 27% fall in the country’s market capitalisation. Thus the Indian Government is relentlessly devising policies and norms that would help the big business houses of the country to bounce back, attract foreign investments and joint ventures thereby improving the market cap of the nation. The unfortunate part is that the benefits and returns of these efforts will be largely enjoyed by a very small group of people. The value of the stock holdings for the billionaires and few-hundred-millionaires will go up. However, the majority of the country’s population will still remain where they are, undeveloped and without adequate attention and support from the government.

One cannot argue that the current Government efforts are unnecessary. They are necessary but not enough for the rightful development of the country. The problem with our Governments (irrespective of whether UPA or NDA) has been lack of a long term vision. Most of the legendary bills and policies are passed as a kneejerk reaction to the then current state of affairs. Efforts are necessary that would bridge the gap between the lower and upper levels of the economic strata in the long run so that the country can enjoy in the true sense of the terms “diversity” and “a young population”. Quoting Mr. Nandan Nilekani here, “The Demographic Dividend that the country enjoys is only as good as the investment made into nurturing this human capital”.

Short-term solutions like providing 7Kgs of rice a month at Rs. 3 per Kg is not a solution that will make that happen; neither will a scheme like NREGA which is just about menial work and not mental work make any impact in the long run. The former has already put pressure on subsidies which eat up Rs. 1.44 lakh crore annually.  Rs. 63,000 crore is the estimated burden due to this bill which is sure to shoot up due to factors like our poor Public Distribution System (PDS), corruption, etc. It will not be far-fetched to say that subsidy being one of the most politically sensitive topics; the current Government has used it as a means to rectify its own reputation rather than as a true ailment to the current food crisis. Besides the fact, that the country already faces a challenge to control its fiscal deficit, it is quite possible that even after spending so much, the street children and homeless people will still die of hunger.

Talking of the NREGA scheme which “enhances the livelihood security of people in the rural areas by guaranteeing 100-days of wage employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work” has restricted the employment options to digging earth, breaking stones and the like. Such policies are more harmful than otherwise because inherent to these policies is sheer disrespect of the ability of a poor Indian to earn his bread by doing creative and meaningful work. Additionally, such policies will create a huge dependent mass of people in the long term. Many people in the rural areas will stop engaging in their traditional occupation which may be as a farmer or as an artisan and instead rely on schemes like NREGA and the food security bill to fill their stomachs. Such a scenario will be disastrous for the country.

These short-term solutions can at best be used to augment long-term plans to eradicate poverty, create literacy and employment and make people of India earn their livelihood with dignity. First of all the Government needs to reckon the fact that India has too large a population and a brisk population growth rate which makes it almost impossible to meet demands of the people through subsidies, free food and tax-exemptions and guaranteed employment. Such initiatives are not sustainable in a country like India. What is required is supporting people to become self-dependent.

This needs a two-pronged approach. First invest in developing the young human capital in the country. This means invest in providing education, shelters to the homeless, adequate health facilities and infrastructural support. The fruits of such investment in terms of prosperity, better per-capita income figures, reducing inequity in the society will take a generation to show its results which means say about twenty to thirty years. If the State wishes to intervene to eradicate poverty, these are the appropriate mechanisms. Finding employment and earning livelihood is something that should be left to the people themselves. These are the basic ingredients for survival today, and if we try to create a society which gets these on a platter, it will lead to an inherently weak and vulnerable society.

On the other hand, the need is to invest in Ideas that are generated in the under-developed or isolated parts of the country. These areas due to lack of resources and attention from the government and our big business houses have become the bedrock of many innovative ideas. The speciality about these ideas is they are cost-effective and have a direct impact on the ease and convenience with which people live their lives in a limited set of resources. Thus the route to prosperity for many such areas is already present. If these ideas are facilitated with cheap source of finance, professional training, direct market access, the area is bound to develop. The government will have an additional role to monitor that the actual creator or idea generator gets the maximum benefit, both monetarily and otherwise.

To let the above long-term efforts materialize, the country should pool in the best minds form the best institutes like IITs and IIMs to usher this development. This may quite possible mean working in a PPP mode, easing the boundaries between states and localizing governance. There needs to be a collective effort between the central and the state governments, between the educational institutions, between the public and the private sector and between the parallel societies. I would like to conclude with a question to the reader: “If you know that you cannot support your children through their entire lifetime, would you rather spend your resources in buying them candies or invest in making them self-dependent?”

It is often said that a week is a long time in politics. Two years must be like an eternity then. In this day and age when information moves faster than the blink of an eye and situations change every second like the position of the sun, it has been our political establishment that has not been able to keep pace. For the Congress-led UPA 2 government, besieged by scams and struck by paralysis in governance, the euphoria of the stunning victory in 2009 must seem very distant. The UPA 1’s performance was considered to be so good that voters chose to even unshackle the Congress from the chains of the Left parties which had constrained the UPA1. There couldn’t possibly have been a better mandate to govern decisively.

UPA 2, on the contrary, has turned out to be a major disappointment. It is even possible to argue that UPA 2 is paying, with interest, for the sins committed during the UPA 1. The 2G spectrum allocation scam (A. Raja), Common Wealth Games scam (Suresh Kalmadi), Adarsh society scam, Cash-for-vote scam – were all executed in the term of the UPA 1. Had the Government chosen to respond swiftly, there would have been some damage control possible. The pillar of the Congress and one of the greatest assets of UPA is the Prime Minister Manmohan Singh - said to be a man of impeccable integrity. Instead of acting against the corrupt, he has chosen to hide behind the compulsions of coalition politics, and caved in to the pressures from the party high-command which is Sonia Gandhi.

As if the battering by the united Opposition and hauling over the coals by civil society over corruption was not enough, there came another embarrassment for the government: the controversial affidavit of the Planning Commission that claimed that persons consuming items worth more than Rs. 32 per day in urban areas, and Rs. 26 in rural areas, are not poor.

Meanwhile, we have another issue brewing in Jammu and Kashmir where the National Conference is embroiled in the custodial death of Syed Yousuf, an Abdullah family loyalist. The circumstances of his death, along with the statements of eyewitness and the accused, have made things very difficult for the Abdullah family.

The party has lost face and credibility in Telangana, and doesn’t have a leader strong enough to lead the party in the other parts of Andhra Pradesh. Meanwhile, issues are piling up in Rajasthan. Over and above this the “Anna cap” has a following and can cause immense damage in the months to come.

The continued absence of Mrs. Gandhi from the public domain has taken a serious toll on the UPA Government. Add to it the blundering response of the party to the Anna Hazare’s fast soon after Mrs. Gandhi had left the country to be treated for an unknown ailment was ample confirmation of the party’s rudderless second-rung leadership.

In its first year of re-election which is often considered to be the honeymoon period, the Government chose to remain inactive and sat on its haunches and lost its opportunity. And in the second year, it lost its plot in the midst of the scams and scandals being unearthed every quarter.

At a time when the Government and its top brass should have been engaged in waging a rearguard action in the “all hands on deck” spirit, Pranab Mukherjee and P Chidambaram, two of its most politically experienced and astute ministers seem to be engaged in their own dogfight over the controversial ‘note’ which could have, as some parties feel, averted the entire 2G scam in the first place. Clearly the UPA is not guided by the spirit of standing by each other through thick and then.

Add to it, there is a very distinct possibility of mid-term polls and several issues can combine to make this a reality over the next two months. The coalition mess in the UPA 2 and internal warfare in the BJP for the top-spot has shifted attention to the states. There doesn’t seem to be anyone in either party who can influence the election result in any state, however, in this age of coalition politics, even a two-three percent swing in either direction can make or break a government.

In the end, it just seems that the battered Government has lost the will to govern and what remains to be seen is whether the UPA 2 is able to kick start its engine or continue to remain in the stalled mode.

A gold rush is described as a period of feverish migration of workers into the areas of dramatic discovery of gold – the yellow metal.

In the mid-1930s Gold was $35 an ounce and was fixed in price against the dollar upto the late 1960s. However, to finance the Vietnam War USA had to issue a lot of new dollars and could no longer afford to offer an ounce of Gold for just $35. In the 30 year period, the value of dollar had fallen down due to inflation, but Gold remained under-valued against its inflation-adjusted price. This phenomenon was repeated again for the 30 year cycle till 1990 when Gold again became undervalued. The supply of dollars was increased once again, as it was no longer mandatory to settle your trade balance bills with Gold.

Cut to 2011, the interest rates are very low. Hence, there is little opportunity cost for holding Gold as compared to the negative short-term interest rate as compared to the inflation. Spot gold is trading at its highest levels in history. Now what exactly are the reasons which are driving the recent rallies?

Safe haven status:

The spot market selling price for gold is a direct measure for the mining company’s profit margins. Depending on the quality of the ore and other regional factors, gold in the USA is produced at an average cost of $400 to $600 per ounce. Rising debt concerns and uncertainty in the equity markets has made investors switch to safer investment tools like gold, silver and other precious metals. The massive demand for gold pushed prices above $1,900 recently as the open interest for gold options climbed to a record 1.26 million contracts on August 18.

Strong fundamentals:

There will be a near-term decline in the gold prices because of the effect on the trade volumes of increases in the margin trading cost. However, in the long run, the fundamentals for gold remain strong and investors will continue to invest in the precious metal until they rediscover the confidence to invest in the equity markets.

India and China, the largest consumers of gold, look set to continue to drive the demand. The domestic demand in India is seen robust in the near term and the Chinese government continues to increase its gold reserves. Meanwhile, the domestic demand in China for gold and silver continues to grow along with the increasing middle class incomes in the country.

Festive season:

Although, the yellow metal has rallied in the past few months, historically the demand picks up at the end of August. At the second half of the year, the demand is driven by the holiday seasons. The Indian New Year comes around October boosting the domestic purchase of gold. Around year end during Christmas, the demand for gold jumps as well, which is followed by the Chinese New Year in February.

So in all probabilities, it looks like the current Gold Rush is here to stay for a slightly longer time. And it is to no one’s surprise that the soaring gold prices are just a predictor for the collapse of paper money currencies with the Euro and the Dollar facing huge challenges. Globally, the central banks have started buying gold to strengthen their reserves. If the global financial situation continues to remain grim, gold holdings by central banks will increase which, in turn, will push up prices further.

With the amount of airtime that was dedicated by news channels over the past couple of months to cover the story about the authenticity of an organization by the name of Speak Asia - a survey based online job provider – it is evident that the number of people affected by it is too big to be ignored. Speak Asia practices multi-level marketing or networked marketing as a strategy to generate revenues for it. Through this blog, we will try and first understand what multi-level marketing is and then try and gauge how ethical or legal an organization utilizing multi-level marketing is.

As per the Wikipedia definition, Multi-Level Marketing is a strategy in which the sales force is compensated not only for the sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors and a hierarchy of multiple levels of compensation.

The setup of a Multi-Level Marketing company ranges from being fairly simple to insanely complex. However, it follows the basic structure of having independent, unsalaried salespeople (distributors, or associates, or sales consultants) who represent the company that produces or provides the services that they sell. They are awarded a commission based upon the volume of product sold through their own sales efforts as well as that of their down-line organization.

According to plenty of surveys conducted in the Western world on the Multi-Level Marketing firms, it has been observed that only 1% to 10% of the agents make any substantial money from the activities. And the rest are the rest 90% to 99% are the people who have paid hard-earned money to enter the scheme (network), and it is their money that is ultimately being transferred to the top-end of the hierarchy.

For any company, the management of supply & demand and a keen insight into realistic market penetration and saturation is crucial to its business, irrespective of the product or service offered by it. A failure to ‘hit the target’ of supply and demand can ruin the company if the market is over-saturated. With Multi-Level Marketing, the basic business model doesn’t pay any attention to this ‘target’ which may or may not be reached and exceeded without anyone noticing or caring. Producing any amount greater than this would be of no use as the market would have reached saturation and all further distributors will lose from here on. And since no one is paying attention, it is not possible to effectively figure out at what position we pass that level of hierarchy in the distribution network. Thus, Multi-Level Marketing is essentially like a train with no brakes and no engineer headed full-throttle towards a terminal.

Another question that strikes the mind is that if the product or service is indeed as great as promised, then what is the need to rely on a special marketing scheme like MLM where you don’t need to be experienced to reap the benefits? If a company chooses to continue this strategy, it will someday hire (with ‘no base pay’ and ‘charging to join’) far too many people which will eventually lead to inevitable losses.

Despite all the flaws in the strategy, every year thousands of people get duped by such companies. When you try and explain the fault to them, they point out the fact that not everyone will succeed in hiring more distributors, and hence, the market will never saturate. So it essentially boils down to the simple question of whether we are hiring winners to build a real business or planning by design to profit off losers who buy into our confidence?

Some of the recent MLM companies attempt to address this problem by limiting the number of people you can sponsor to ‘x’. But the geometric progression and market saturation problem still exists.

The question then arises, that if it is such a fraud then why does it still exist? The answer is simple yet striking. The MLM’s have survived by spending millions of rupees to protect, lobby and insulate themselves. Just like any other form of organized crime. And crime also pays, albeit temporarily. The people at the lower end of the distributorship hierarchy are the ones who defend the very organization that is robbing them, hoping that some day in the future; they would get their chance to make ‘big money’.

MLM has evolved into a "niche": it can be used to sell products that could not be sold any other way. An MLM is a way to get undue credibility by exploiting people's personal friendships and relationships via "networking." More often than not members of such marketing strategies end up being stuck in the relationship, and have to rely on trying to engage more such members to try and recover their money back. Thus, legally, even though it may not be on the wrong, it is ethically almost always unviable to enter into a Multi-Level Marketing dealership. The basic wealth generation for a business should come from business activities and not from perpetual membership enrolment. And history has shown whenever there is an enormous pressure from the subscribers to withdraw from the system, the funds dry out and the system collapses. And besides the fear of a collapse of the system, such a failure has led to many a friendship and relationship break, due to breaking of trust between the dealing parties. Lifelong friends become ‘prospects’ and the neighbourhood becomes the ‘market’. And sooner or later we will need to stop blaming the particular Multi-Level Marketing companies and admit that the Multi-Level Marketing technique itself is fundamentally flawed, even in theory.

Ever since the conference by Apple’s WWDC (World-Wide Developer’s conference) there has been a huge media coverage surrounding it. Apple’s iCloud has focussed on consumer-centric entertainment storage and access features. But clearly, it also represents potentially path-breaking possibilities for business users and business services as well.

Firstly, let us have a look at the competitors.

BlackBerry was the market leader in Smartphones for a long time. But like typical firms, it got complacent, and had no major innovation/feature added to it, since the revolutionary BlackBerry Messenger or the BBM as it is affectionately know. Its sole competitive advantage seems to be lost with the introduction of iMessage for the Apple users. Microsoft tried its best by securing a partnership with Nokia, but if current sales figures are anything to go by, Nokia is on a free-fall in the Smartphone market with no innovations in hardware or software.

The only real competition iOS does have is in the form of Android. However, one important point is, while Android is the most sold OS today; it is done through a large number of handset manufacturers. On the other hand, iOS5 enjoys the privilege of being proprietary with Apple products only, which leads to better integration and hence, a better user-experience.

It has been widely acknowledged by most Android fans, or Fandroids, as they are known, that most of the features of iOS5 are copied or inspired from the Android OS. Then, what is it that Apple does right? Apple is the biggest brand in the world. And it has reached there through effective marketing. And this is exactly what Apple has done right with iOS. It treats phones as a tool to be used by everyone and not as a toy to be played around and tweaked with, as is the case with Android. Apple takes an idea, redesigns it, and refines the entire user-experience thus making it very intuitive and user-friendly. This results in them being leader in the Smartphone category.

We talked about iMessage taking away the competitive advantage of BlackBerry. What it also will effectively do is take away a huge stream of revenue from the Telecom Service Providers. SMS & MMS have been the cash cows for them since time immemorial, and now with the iMessage which effectively acts as a SMS & MMS tool, only difference being, it uses a data connection, there will be hardly any requirement by the customer to go for the heftily charged SMS plans, and instead they can use their existing data (2G or 3G or 4G) plans for the same at practically no extra cost.

There’s another chunk of industry which will be widely affected by the newly-announced features of the iOS5 viz. the developers of applications (apps) for the iOS. The features like ‘sync’ have made apps such as “DropBox’ redundant. However, some of the app developers have taken it in a positive manner. They insist, that Apple will be providing the users with only a basic-level integrate app. However, to extract the full functionality they’ll have to use the third-party app, and now their job of marketing it would become easier because of existence of a similar service. At the same time, there are some developers who are not too excited with the announcement of the iOS5 as it would mean that they would have to develop upgrades to their already existing apps so as to support them with the newer OS. Also, others are already starting to look at developing apps for other platforms like Android which offer far more flexibility.

Lastly, the seeming winner of new developments at Apple is ‘Twitter’. It has been deeply integrated with the iOS5 thus pretty much making it the default Social Network for all Apple devices. Many see this as an answer to FaceBook’s growing popularity and that being a looming threat to Apple, even though it is an indirect threat for now.

Whatever the end result may be, Apple’s WWDC has created huge media hype as it does every single year, and has invited endless debates about the same.

India has more than 2.61 crores registered and unregistered Micro, Small and Medium Enterprises which are expected to contribute 22 % of the GDP by 2012 up from 17 % at present. The sector accounts for about 45 % of India’s industrial output, 40 % of its exports and employs 4.2 crores people with 0.1 crores jobs created every year and thus forms a vital component in propelling our country to the next level of growth and development. Proper guidance and access to the right support resources would be vital if the pace of growth is to be made sustainable. How can it be ensured?

Many a times, a business leader of a Small or Medium Enterprise has to play multiple roles – he has to wear the hat of a director, a salesman, a marketer,  an HR and office administrator and an accounts & compliance officer etc. all at the same time and also has to deal with decision-making activities crucial to the business operations. However, unlike managers in larger firms who are backed by staff members who study & analyze the environment and have access to extensive information, a business leader of a Small or Medium enterprise usually takes his decision in the face of incomplete or inaccurate information. Secondly, the business environment is more dynamic and complex for smaller enterprises.  Although this also applies to larger firms, the effects of dynamism and complexity have a stronger influence on smaller firms. Large firms get more opportunities to make similar types of decisions and hence often develop decision-making routines that simplify the decision-making process for managers. Decision-makers generally are not looking for the best or optimal solution to a decision problem but one that addresses all aspects of the problem in its totality.

Most Small and Medium enterprises do not have an experience of engaging professional business advisory services to support them in their operational or strategic business decisions making. However, these enterprises do engage consultants in the form of Chartered Accountants, Web Developers and System Administrators etc for specialized tasks in which they has little or no competencies. Business decisions are usually taken in consultation with “experts” from the social eco system of friends, relatives and acquaintances, and in most cases by the business leader himself who understands his business best. This arrangement works fairly well for enterprises which are not aggressively looking at growth. However, for enterprises pursuing growth aggressively, professional business and knowledge inputs could bring a paradigm shift in the way they take decisions. But still business leaders of small and medium enterprises are reluctant in employing professional business advisory and support services primarily due to the following reasons:
•    No clarity with respect to the utility and relevance of the service. Most enterprises perceive consulting services to be relevant for end to end project implementations only, and do not see them as a day to day operational & decision support tool. For an SME, a good percentage of their time is spent on handling operational issues for which they do not see the necessity of engaging with external consultants. At the same time, most conventional consulting firms do not offer day to day support services for operational issues but offer business process transformation which aims to streamline your operations. These are usually irrelevant from the context of a small organization, more long term in their implementation and are costlier.
•    Most business owners feel they have the business and domain expertise needed for running their business and do not see an external consultant adding much value.
•    Perception of these services to be extremely costly. This is not unfounded because conventional consulting firms providing offline consulting/ advisory services, unfortunately charge “sky-high” prices which make them unaffordable.

Thus there is clearly a need for good quality and affordable business advisory and support services. If India has to go to the next level of growth and development, business process efficiency of the smaller enterprises has to be improved. This can only be done through making knowledge and skill based business expertise available to these enterprises at affordable rates. Moreover, the perception around non engagement with external advisory services for day to day operational issues has to be changed. The advantages could be seen through a simple calculation - Research shows that a business leader of a Small or Medium business generally works for 10*6 = 60 hrs a week. Now by taking the help of an external business support service, he will free nearly 20% of his time, which would translate to 48 hours of work/week for the business leader. Of the remaining he can spend 3 hours with the consulting team, as process of continuous improvement and rest 4 hours on his business development. This would translate to ~ 7.5 %( 4*100/60%) more growth.  Now the balance 5 hours can be spent by him on improving the quality of life. Moreover, accessibility to well researched, relevant and important information would remove the uncertainty in which decisions are taken and thus improve the quality of his decisions.

Japan was hit by an earthquake of magnitude 8.9 on March 11. This massive earthquake led to major human tragedy in Japan killing more than 30000 people, leaving many injured, and many other still missing. The earthquake and the tsunami also struck nuclear installations in Fakushima Dai-chi power plant. Because of disruption in the power supply, the coolant cannot be supplied to the nuclear reactors in the required amount, which raises the risk of radiation leak. Already traces of radiations have been detected in some of the food items and the water in Tokyo, which is located 220 KM south of the Fakushima.

Impact on Japanese Economy - Since Japan meets about 30% of its energy from nuclear based power plant, power supply to most of the parts in the country has been affected leading to closure of many factories. There has also been widespread damage to the infrastructure because of which there has been supply disruptions of many of the critical raw material components. Most of the automakers including Toyota, Honda, and Nissan have closed their plants for the lack of raw materials, and the reduced power supply. Manufacturers of semiconductors, LCD displays, batteries etc have also shut down their plants for at least next 2-3 weeks. Some of the major ports of Japan have been affected by the crisis impacting both the exports and imports based industries in the country. According to one estimate, cost of reconstruction is expected to cross $300 Billion. Japan will find it difficult to fund this construction because of its high debt which is already 200% of its GDP. Also the country has witnessed lacklustre growth over last two decades, and this earthquake triggered crisis might further push Japanese economy in downward spiral.

Impact on World’s economy – Japan is the third largest economy in the World, after US and China. It is also the second largest buyer of US funds. Since Japan will need money to fund its reconstruction, it might cash in the US bonds. This will force US fed to buy these bonds, and which will induce liquidity crunch in the US market. Similarly Japanese investment firms have made lots of investment across world’s capital markets. The pullout of the Japanese fund might lead to fall in stock prices in these markets in short term. The other major impact of Japan’s earthquake will be on the crude oil. Since most of the nuclear power plants of Japan have went offline, Japan will depend more and more on crude oil to meet its energy needs. Japan has number of oil fired power plants, and to meet its energy needs, it might buy more oil from the world market. The crude oil prices, which were already on upward trend, will see a further spike as a result of this. The rise in crude oil prices will impact the world’s economy in short term. Japan is the major producer of many of the items including auto components, semiconductors, LCD displays etc. Disruptions to the production of these major items will lead to the supply chain disruptions of these items in the world market. This will delay the production of high end gadgets like smart phones, iPads, LCD TV, laptops etc and cars. This will make a dent in the manufacturers’ profit.

Impact on India economy – Indian stock market dropped by 0.8% on the news of Japanese earthquake. But the market recovered next day. Killer earthquake which hit Japan is expected to have a marginal impact on the Indian economy. Most direct impact will be the pull out of Japan’s investments in the Indian capital market. Japanese investment firms will draw money from the Indian market to fund the Japanese reconstruction. This will have a negative impact on the stock market in short term. Japanese have also made investment in number of important infrastructure projects in the country such as Delhi Metro, Delhi Mumbai corridor etc. These projects might see delay because of lack of availability of funds. Surge in the crude oil prices because of increased demand of oil in Japan will also impact the Indian economy which is already reeling under inflation. Automobile companies will be negatively affected by the crisis, since they depend on Japan for the supply of many of their critical auto components. Also because of increase in the value of Yen (as a result of lack of yen supply), there will be an increase in the cost of these auto components. Japan’s refinery capacities have also been affected by the quake. This will have positive effect on Indian petrochemical firms such as Reliance. Indian IT industry will be marginally impacted by the crisis, since most of the IT firms derive only 1-2% of their revenue from Japanese market. Only IT firm which has high exposure to Japan market is Nucleus Software Exports which derives 30% of its revenue from the country. Crisis will have a minor impact on Indian exports, since Japan accounts for less than 3% of total Indian exports. Thus the recent earthquakes which hit Japan will have marginal impact on Indian economy.

The union budget for the year 2011-12 was presented amidst an unstable macro-economic environment characterized by high inflation, high interest rates and a need for lowering the fiscal deficit. This budget has tried to balance the need for sustaining the growth of the economy along with controlling inflation and fiscal deficit. The government has tried to address all these issues to an extent through various measures, albeit the implementation of these measures can be very difficult.

The fiscal deficit target was lowered to 4.6% in 2011-12 from 5.1% in 2010-11 and is targeted to reach 4.1% and 3.5% in FY13 and FY14 respectively. This estimate is based on an optimistic growth in tax collections and a substantial decline in the subsidy bill. The government has assumed a growth in tax collections of 18% with a real economic growth of 9%, which seems highly optimistic and at the same time, is expecting to reduce the oil subsidy bill to INR 23,640 crores from over INR 38,000 crores in 2010-11. With the global crude prices touching $110 per barrel, this cannot be achieved unless the prices of petroleum products are increased substantially in the country, which can be very difficult to implement in the current political scenario. If we look at FY2010-11, even with proceeds from tax collections and telecom auctions exceeding the budget estimates substantially, the deficit for 2010-11 reduced very marginally, highlighting the additional expenditure requirements over the course of the year compared to the budget estimates. This can make it very difficult for the GoI to achieve the fiscal deficit targets mentioned in the budget.

The gross government borrowing is projected to decrease based on the budgeted fiscal deficit, which will bring the possibility of interest rates remaining under control and benefit the corporate sector with lower cost of raising funds. However, if the fiscal scenario turns out to be less positive than presented in the budget, the interest rates might go up. The surcharge on corporate tax has been brought down from existing 7.5% to 5%, however this has been neutralized by a increase of 0.5% in MAT. The excise duty was left unchanged, bringing a cheer especially for the automotive industry, which was expecting a rise in the excise duty. The service tax was also left unchanged, though some new services were brought under its ambit. The government has also committed to implement the DTC from April, 2012 and is hopeful of implementing the GST in 2012-13.The budget announced some important measures to aid the growth of the economy by increasing the budgeted outlay for infrastructure. Other measures such as increasing the FII investment limit in corporate bonds and reduction in tax withholding for investment in infrastructure bonds should aid the flow of funds to this sector. The government has announced incentives (such as according infrastructure status to cold chains) to support the development of supply chain & cold storage infrastructure for food grains and vegetables. The development of food supply chain infrastructure is very important to control the increasing food inflation. However, no concrete plans or steps were announced to control spiraling inflation figures and nothing was mentioned about the highly anticipated increase in FDI for the retail sector, which could improve the the food supply chain infrastructure.

Allocations for social sectors such as education, health and family welfare have been increased and allocation to agriculture has also been increased. The credit flow to agriculture is targeted to increase by INR 1,00,000 Crores and an additional 1% interest subvention to farmers repaying loans in a timely manner has been announced. However, policy level measures to aid farmers in increasing productivity were missing.

The government did not make any big reform announcements, but has tried to balance the objective of sustaining the growth along with lower fiscal deficit and lower inflation. We have to wait and see if the measures announced by the government will achieve this objective.

On February 11, 2011, Nokia and Microsoft announced their plans to form a strategic partnership to bring their strength and expertise together for creating new global ecosystem. Both the companies plan to combine their assets to produce innovative mobile products catering to the needs of consumers, operators and developers. Additionally, companies will also work to integrate new assets and new service offerings for new markets. These strategies are aimed to provide strong competition to their  rivals Google and Apple in the Smartphone market. Nokia has been consistently losing their market share in Smartphone market. As a part of this strategy, Nokia will be replacing their current mobile platform Symbian by Microsoft windows phone seven operating system on its devices as their primary smartphone platform. 

Nokia and Microsoft deal will be helpful to both the companies. Microsoft will be getting the advantage of Nokia’s vast network and dealers and stores, where Apple won’t be able to have stores for a long time to come. On the other hand, Microsoft has exceptionally great developer’s tools with .NET community and ecosystem. This partnership will help Nokia to comeback in the market which it lost to the likes of Apple's iPhone, and products based on Google's Android platform. The partnership had hurt the chances of Intel entering in mobile phone market. Microsoft is concerned about low adaption rate of windows 7 in the mobile market, but is confident of overcoming this challenge with hardware partner like Nokia.

With this deal, Microsoft gets instant share of 35% of world’s mobile phones. Microsoft has agreed to sell windows 7 operating system for Nokia phones at almost zero prices and to share profits generated from the ecosystem. Nokia has chosen Microsoft against Google Android. Surprisingly after the deal, Nokia’s shares fell 14 percent, the steepest slide since July 16, 2009. The deal is supposed to be a survival step in smartphone market, where company’s market share fell from 50.8% to 27.1% since Apple introduced iPhone in the market in 2007. Nokia also plans to optimize its R&D spending. Nokia’s current R&D expenses amount to 5.9 billion Euros ($8.1 billion), which is four times, that of Apple. Nokia also declared the plans to have two units, one is smart devices and another will be mobile phones. Partnership with Microsoft will play an important role in the smart phone division.

The biggest question mark after the partnership is over success of the deal. With complementary strengths of both the partners, it is clear that partnership will go a long way in helping Nokia to regain its share in the Smartphone market. The success of partnership also depends upon the competitor’s strategy. One of the elements to the success is its product design strategy. Overall the interest of both the companies is aligned to only one goal which is control over the smart phones business. With the sudden departure of Steve Jobs (who went on medical leave), it is feared that lack of innovative ideas might force Apple to go on back foot. Nokia should leverage this partnership with Microsoft to unleash latest innovative technology in the Smartphone market to regain the lost market.

Unique identification mission was launched by Indian government in year 2006 with the objective to provide identification to each citizen of the country. This identification was primarily meant to be used for efficient delivery of welfare services in the country. Wipro Limited is the consultant for design and project management phase of the project. There will be a 10 digit identification number on each card that will be used to serve multiple purposes. To ensure successful implementation, some critical information need to be collected about the user i.e KYR (Know your resident) fields (Name, Address, Gender and Date of birth), Photo and address verification, fingerprints on slap scanner and Iris scan.

Human Resource Development (HRD) ministry of India has taken the lead in the use of UID scheme. Under a new program, all school children will be provided an UID so that their progress across classes can be tracked. This will also help in monitoring the dropout rate and to control the dropout trend. Additionally, UID will help to keep a track of student’s movement across educational institutions, and their academic records. The mission will be run in coordination with civil society groups.

UID has generated new hope amongst people. Government of India feels that the system will help to curb corruption involved in its various rural programmes like Sarva Shiksha Abhiyan, Rural Health Mission, Bharat Nirman, National Rural Employment Guarantee Scheme etc. Government also hopes to control the rise of terrorism and crime in the country with the help of UID scheme.

UID will not only be resourceful for the State for proper administration but can be used to achieve diverse goals. These IDs can also be of use to Insurance companies, Banks and microfinance institutions, Income tax department, Mobile Service providers, Passport offices etc. In this case, UID will be a primary source of verification and will help in reducing time spent in verification process. The scheme can also be used to control the menace of “fake credentials” and identity cards such as “Ration card”, voter ID card etc. In case of UID, magnetic flash memory chip will be used to secure the true information about the card holder which may not be easily duplicated. UID can also be used to contain illegal migration in the country from the borders.

The key objective of the UID is to make the social services available to poor section of the nation.  As of 2010, approximately 37% of India’s population live below poverty line. To address this issue, the government of India has been striving to deliver the basic essentials to these poor people such as food. Fertilizers, fuel etc. Due to corruption and ignorance of the poor people (about the facilities they can avail), it was difficult for government of India to achieve their targets. The UID will play a fundamental role in helping the government to deliver these services to the people for which those are meant.