answer to india’s financial distress is ‘wage restraint’

wage restraint as a policy action can be traced back to germany, a european country that has trumped china (the so-called ‘factory of the world’) in terms of positive balance of trade. germany is a net exporter and its economy is one of the most stable and commanding. the edge was attained on the back of curbing any imprudent rise in wages of the working class. on the contrary, asia’s third largest economy, india, never cared about the rising government bill on account of salaries.central government employees or those of state governments or public sector undertakings, including banking companies, are paid salaries that are not proportionate either to their labour or to the financial capability of the employer. why do we have a current account deficit? simple, our exports are less and we import more. let us go in some detail. since our wages are high our exports become expensive than those by other countries where wage restraint is exercised.

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instrument to end npa crisis – ‘irreversible debit order’

country’s banking system is reeling under non-performing assets and a solution is being sought by way of forced bankruptcy, takeover of management and rulings by national company law tribunal. this basically means that the disease is being cured after it has managed to inflict irrevocable damage. a simple tool, in the form of ‘irreversible debit order’, can however bring an end to this by immunizing banking companies against loan defaults. an ‘irreversible debit order’ or ‘ido’ can work as an instrument of repayment of debt facility availed by the borrowing entity from the lender. in the present setup, the borrower, who either pays through cash/ cheque or an instruction in form of automatic monthly debits from bank account toward repayment schedule, has an upper hand. the borrower can either choose not to make the cash/ cheque payment on the pre-decided date or he can instruct his bank to not allow further automatic debits from his/ company’s account toward loan repayment.

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institutionalisation of higher education failed us

question is simple, ‘why do we need a multi-year program for engineering, management or like streams?’. most of the lessons imparted to students in these programs comprise of already established formulas and techniques. consider this – a school pass-out would give most crucial years of her learning and development phase to a program that in the end will certify her knowledge of methods that were invented long ago. the same stint could have been utilized in furthering the child’s ability to formulate novel techniques that can replace the obsolete ones, for we have near-fully exploited them to their usefulness. even when you need someone to possess this knowledge and employ it in the same manner as done over decades and centuries, a few months on-the-job training is enough. the global economy is awaiting innovations that can drive growth for coming centuries. the setback is that people from whom these inventions are awaited are pursuing rather irrelevant goals – learning mathematical,

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why the world economy stagnated

only two events are responsible for where we stand today, agrarian advancement that allowed non-agri populace become manufacturers and traders, and industrial revolution that increased availability of goods for which people worked to satisfy their wants. these two had a long-lasting impact on world economy, the rest, of which digital revolution is a part are only flashy successes. other factors included competition which kept prices in check, allowed employment growth and fortified the supply side, thus keeping the demand side in continuous motion; innovation that was real such as invention of motorized vehicles, telephones and consumer electronics, which tempted buyers who could only make purchases by lending their labour. in the past few decades, the world economy grew on the strength of services sector including banking, communication and information technology. and this is where we made mistake. consider each of this and you will notice that these aspects only compliment manufacturing, banks enable credit for business growth, communication and information

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implementation gaps are undermining reforms

government’s reformist stance is appreciable and is set to usher in much-needed changes in the economy. but be it the denotification of higher currency notes or country’s shift from multiple indirect levies to goods and services tax, almost every policy decision fell short of realizing its real and desired outcome. demonetisation was targeted at checking corruption and black money, but bankers made fortunes out of this exercise. reason – the agency that planned the execution of this decision could not anticipate corruption by one of the implementing hands, the banks. not only notes were exchanged on fake identification documents, atm queues and misbehavior at branches added to the woes of already panicked currency holders. demonetisation was the first policy action that separated the present dispensation from former governments as this was not only a bold transformation, it also was greeted with cheer from the public at large; however the push behind this wide acceptance was related more with modi’s god-like

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the lost gst opportunity – ‘job creation’

goods and services tax is being hailed as the most far-reaching tax reform ever in independent india. gst will curb ambiguity in indirect taxation, will ease compliance and can augment tax collection of the government, all agreed. but has gst delivered on the front that is all more critical than these, did the government factor in  job creation while planning for gst roll out? in bits they did. they foresaw automatic creation of jobs once the tax reform comes into play, for businesses will need tax consultants to understand the new complexities and to steer clear of penalties for wrong/ delayed filings. but what the government did was to leave it to the market forces for creation of new jobs, and this is where they made a blunder. in a recent letter to chartered accountants across india, pm modi has requested for their cooperation in honest and effective implementation of gst. this is where the problem lies. the already well-off

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sbi vs. mcdonalds-reasons why sbi is failing

here, we shall discuss how the operations and human resource framework at sbi and other public sector banks of india contrasts with that of mcdonalds, a prominent restaurant chain. in the end, we shall be able to comprehend why sbi is struggling to maintain its profitable operations despite being a bank of almost every indian. let us start with the recruitment process at the two establishments. to be able to work with sbi, one needs to be a graduate and clear the competitive exam that the bank conducts to fill positions of clerks and probationary officers. for a mcdonalds job, one gets selected without any such exam, however, only those with good communication and other skills can expect to be hired. do sbi and other public sector banks actually need a competitive exam to fill vacancies. the answer is ‘no’. and this is backed by the rationale that a clerk or a probationary officer would not undertake any scientific explorations

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liberalise medicine, other studies to generate employment

practicing medicine is a job, same is with practicing chartered accountancy, cost accountancy or company secretaryship. there is, however, a difference when we talk of a law practitioner. and this difference is the one practicing law does not have to fight her way out to become a lawyer, a 3 or 5 year study programme with easy enrolments enables one to do so. engineers too have the prospect of employing their skills at work after a 4 year programme. but what about practicing medicine or being a ca, cwa or cs; for these professions, one has to struggle with getting admitted into much-coveted medical colleges or appearing repeatedly in competition-styled exams where only a miniscule percentage of aspirants is awarded a pass certificate. it is a known fact that our country lacks the number of doctors as per the world health organisation norms. chartered accountants and other finance professionals, owing to their small fraternity have formed a cartel which indulges

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lower the superannuation age of state employees to use demographic dividend

india is being positively looked upon by the otherwise aging world economies owing to its ever-high proportion of population in the working age group that is expected to spur economic growth. you may find endless bonuses of this, the bottom line is this group needs work, while the sad contrasting picture is dismal job growth rate of the indian economy. while infrastructure spending spree of the current government has given the hope for some occupation opportunities in roads, railways, ports, energy and similar sectors, would this state-backed, public spending-fueled exercise be able to serve the millions staring at work in coming days? the most rational solution is freeing the government sector employment space by lowering the age of superannuation, be it in central, state, autonomous bodies, public sector enterprises or state-owned banks. from current 58 or 60 as the age of retirement, it has to come down to at least 55, or even 52, and as a compulsion, not as

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has conventional recruitment practice failed us?

if the economy could produce enough jobs on its own, the government would have been relieved of pumping funds into programmes like mgnrega and other sops to support low income groups. that sadly isn’t the case. let’s see how conservative recruitment norms inspired indian industries’ incompetence. economists and analysts will talk of low industrial growth, rising non-performing assets of banks and the losing sheen of indian information technology sector owing to lack of skill upgradation in indian engineers, but rarely does anyone talk of how human resource failures fueled these downturns. india may be inching closer towards a place amongst top 5 economies in the world, we may be the fastest growing major economy, stats including worst credit growth, dismal private sector investment, failure of indian industry in matching up with global competitiveness and technological prowess and inadequate job growth show the ground beneath is hollow and vulnerable to collapse; not to say of our so-called demographic dividend that is

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