“Being from the the Pioneer batch of MBA 2003, we had to face certain challenges in getting recognized and get a face in the job market. It was exciting that we were learning the subject for the  first time in a group of talented Engineers, scoring marks and at the same time working hard on placements. Placement job included collecting email addresses and contact numbers of HR head of different organizations. I remember Nishant, Varadarajan and Gopal working all night on placement activities and distributing work amongst us. All this after  finishing assignments of Dr AP Sinha or group assignments of Dr Varman in the hostel. In IITK MBA, we learned how to move and develop as a group and yes our hard work in placement did show colors when the combined efforts of teachers and students helped companies like LML, Ingersoll Rand, TCS come to campus to select candidates from a less renowned MBA college.
I remember the days of MBA full of assignments, activities, photo copies, canteen food – Maggi, alu paratha obviously, Diwali celebration with hopping professors quarters for nice treats – special mention to Dr AP Sinha, Dr Veena Bansal. Still remember the wonderful Dahi Vadas, and Cholla Baturas made by Dr Veena Bansal in 2001.

Another very interesting part of IITK MBA was the multiple onsite projects we had to do in Consumer Behavior, Organization structure . We got to see what the outside world looks like with so many tours. We did sell T shirts in Hall Dining in one of Dr AP Sinha’s project and went to Hotel Landmark “N” number of times to meet the HR person in Dr Varman’s project. It was so much fun. All is well that ends well. I got a Campus placement in Ingersoll Rand India Ltd as Management Trainee in 2003. I left Ingersoll Rand in 2007 and joined IBM. Currently I am working with IBM as Advisory Consultant based at Chesterbrook, PA. I work in ERP (SAP ECC) in Sales and Distribution Module as a Functional Consultant. My Sales background from Ingersoll Rand (Worked as Branch Manager Sales selling Road and Mining machinery to Private and
Government contractors in Orissa and then in Bihar and Jharkhand) has really helped me understand the details of Sales process, Distribution channels, Consignment sales, Taxation etc. IBM has given me a broad experience with respect to working in multiple North American locations (Country Canada and USA) and with clients from different industries like Johnson and Johnson (Pharma), Caterpillar (Heavy engineering), Cascades (Paper), AmerisourceBergen Corporation (Drug distributor). IITK MBA has helped me build the confidence in me to take on any task and do it with endurance and perfection.”

Banks are the backbone of any economy. Banks play a vital role in economic development and provide financial resources to an individual, corporation, government or a sector in need. The health of any economy is directly related to the financial status of its banks.

India is a developing nation and is growing at commendable rate as compared to other economies. Though India has a respectable position in terms of financial stability at the global level, still its banks are suffering from the menace of ever increasing Non Performing Assets i.e. NPA.

Technically NPAs are loans in which borrower has not paid neither interest nor principal for at least ninety days. In India Public sector banks are more highly affected due to NPA. They have to render loans to borrowers in order to facilitate economic development agenda of the government. This results in wilful defaulters who try to delay the repayment as long as they can by misusing the provisions of law in their favour.

NPAs have repercussions on the bank’s financial statements. Moreover a weak banking system reduces the investor’s confidence on the Indian market. Depositors do not get proper returns and in extreme scenarios can also lose their uninsured deposits. We should not forget the 2008 financial crisis which triggered mainly due to bankruptcy of some financial institutions in the USA. This also leads to liquidity problems in the market.

Banks have to be slightly more conscious and strict while lending loans. They should focus on selection of right borrowers and their ability for timely payments, so as to minimize the chances of new NPAs. The policy makers and the regulators should be in line to assist banks in getting rid of NPAs. The proposed Bankruptcy code will shorten the timelines for resolution and recovery in case of insolvency. It’s true that banks can’t get rid of NPAs in an overnight. It is a gradual process. However, dedicated commitment by the banks, RBI, and government will definitely clean up their balance sheets.

By: Arpit Jain

Over more than a year after rolling out “make in India” campaign the state of manufacturing sector of India stays dismal. Manufacturing sector contribution of 16% to GDP is ridiculously low when compared with other developing countries especially china where the sector contributes 36%. The failure to develop proper infrastructure and dearth of skilled workforce are two major reasons for this underdeveloped sector.

Japan, China and the US are investing good deal in infrastructure but the onus to skill its workforce lies on India and it is high time India feels the need to address this critical and cardinal issue. India is no doubt one of the largest and cheapest hubs for providing labour but over 90% of it still remains unorganized and even a greater percentage unskilled. Focus should be on skilling the human assets we have. This can be done by motivating youngsters to enrol in vocational training courses; diplomas etc where practical training could be given. Instead of opening engineering colleges in every nook and corner of country and preferring traditional education, stress should be laid on providing vocational training to the youth and equipping them with the skills actually required by the industry hence bridging the gap between skills possessed and skills demanded. Also, if India wants to capitalize on the stalling economy and increasing wage prices in other countries especially China, this is the best foot forward. Multinational  companies such as Foxconn, Sony, Motorola, General Motors, Chinese smart phone manufacturers such as Xiaomi, OnePlus, Coolpad have begun to look at India for setting up their manufacturing units. Hence, this step becomes all the more important.

Other issue which demands attention is the time and effort required to start a new business and shutting one. Much has already been talked about ease of doing business and no doubt India has successfully improved its ranking from 142 to 130 but obsolete laws, dysfunctional courts, manipulative and biased policymakers, corrupt bureaucracy and ill informed citizens still haunt the very progress of the nation. It requires over 29 days and 12 procedures to begin a venture. Efforts have been made to spur investment and reduce bureaucratic hurdles but much needs to be done specifically in the area of ease of closing business. People still have to go through a long time consuming labyrinth process of shutting down their businesses due to obsolete insolvency laws which ends up demotivating them and forcing them to look for other lucrative countries to operate. Thus hurt Indian economy in every respect.

Government should also help assisting the start up boom and attract fledgling entrepreneurs to enter manufacturing sector by providing them a conducive ecosystem to start, run and shut down their businesses. With assistance and proper funding they could help generate employment to both skilled and unskilled labour, reduce dependency on imports and push exports.

The government has made some positive moves in the foreign investment sector by easing rules, simplifying procedures, raising sectoral caps in various sectors such as defence, banking and broadcasting and allowing FDI in others. But the government and the people will not be able to reap the benefits of these amendments if infrastructure and connectivity remain in desolate state and laws remain regressive. Infrastructure can be improved by attracting investment in construction sector and for improving connectivity, privatization of railways  and  funding them   through  foreign

investment can help revamp this sector. Along with this there is a dire need to raze red tapism, organize labourers, reform labour laws and provide political stability to the foreign investors. Changing government brings forth changing rules which are tailor made according to their needs but the MNCs face tough time adapting to them. Hence, political stability becomes an important factor for foreign companies considering India as their investment destination.

Organizing subsidies can also help finance “make in India” campaign. There is an urgent need to cut subsidies in certain sectors and arrest leakages. Contribution of major subsidies is down to 1.6 per cent of GDP in 2015-16 from 2.5 per cent of GDP in 2012-13 but still a lot needs to be done in transferring subsidies directly to beneficiaries.

India took a different path towards development jumping from agriculture based economy to services based bypassing manufacturing.  With agriculture sector experiencing a shift from manual to automated and services sector on the verge of saturating, India needs to concentrate on this languishing sector.

By- Deepti Sekhri

While the amount of funds raised by Indian e-commerce companies is huge, its market is barely 1 percent of the Chinese counterpart. Chinese e-commerce industry was in fact in the same position as India with respect to market, internet penetration, and acceptance of online marketplaces if we look 10 years back. Now, the Chinese e-commerce has surpassed $300 billion compared to the $4 billion of India, online travel booking forms a major chunk of it, roughly 70% and e-tailing is a minor portion. $9 billion of goods were sold by Alibaba on a single day. This should certainly put things in a perspective.

There are about 250 million internet users in India. However, only 3-4% of such users engage in online shopping, (around 8-10 million). To rephrase, the e-commerce industry does hold market share and they still have a long way to go in terms of “mind-share”. A Flipkart or an Amazon may have raised billions in terms of dollars but they are still at the nascent stage as far as their reach is concerned.

However, in terms of CAGR, Indian e-commerce is racing ahead with 30% growth rate which is three times than that of many developed economies. Every development in technology/business goes through the process of business cycle where we see a crest and a trough appearing from time to time. Moreover, as the technology progresses there is an advent of destructive innovation which replaces the existing technology (e.g. audio cassettes by CD, landline by mobile phones etc. ) Extrapolating the same line of thought to e-commerce sector we can safely assume that until a new destructive innovation/technology takes  over   we   will   see  a  rise  in  the  e-commerce sector.

Changes in the economy will continue to happen, market size will change, government policies will change, middle income group will continue to show growth in their spending power and it is up to the investors, entrepreneurs and companies to capitalize on the trend and hit the right notes to sustain as Amazon and Ebay did otherwise it might turn out to be a US dot com bubble burst for some.

By- Abhas Vyas

Scientific breakthroughs of any timeline often amaze us and show us the possibilities not seen or heard before. Scientific endeavor, though basically motivated by curiosity to know nature, also often paves way for new technologies which ease our daily lives. Emerging technologies such as new ways of surgery, new fuel compositions, better TVs, better production methods etc are creating a place of ‘comfort’ and ‘high satisfaction’ for humans. Thus, science and technology is an important  part  of  our  development  and is also linked to our businesses. A technological innovation can change the course of an industry.

So, it is worthwhile to know the current trends in “Science and technology”. As 2015 has come to an end; some of year’s exciting “inventions and discoveries” can be relooked.

#1 It may have been invented earlier, but in 2015, ‘Hoverboard scooter’ became a viral product in US market. Many celebrities bought it and it is now reaching out to common public. The product has an amazing self balancing feature enabled by sensors and the motion is controlled by leg. Hoverboard can perhaps become the vehicle of choice for kids and youth. However, hoverboard is facing many obstacles such as safety compliance, traffic rule compliance etc. Yet, hoverboard can grow to a large customer base.

#2 Diamonds could now be made at room temperature. Researchers at University of North Carolina have discovered a phase of carbon called “Q-carbon”. Q-Carbon can create diamond at room temperature with ambient atmospheric pressure. Surprising!!

#3 Moving to next discovery; in Chernobyl, scientists have found that many animals have been thriving since 30 years (nuclear power plant accident). It is interesting how animals adapted to the radiations.

#4 Next one; a great feat in medicine has been achieved. A team of Australian researchers used ultrasonic waves to break down the molecules responsible for alzheimers syndrome in mice. This was a breakthrough since the method was non-invasive and it showed curative effect. However, human testing is yet to be done.

#5 “Bionic ears” by Doppler labs is an earphone with a revolutionary feature. User can mute or decrease the outside volume. User can also do selective frequency listening. Amazing! So, no more noise pollution?

#6 KIC8462852, a distant star, was found with amazing harbor structures on its surface. Astronomers think there might be an intelligent life behind this architecture. Further observations are to be made. But, the discovery of structures itself has been a crucial one.

#7 3-D printers are no more a theoretical study. A cancer patient was given 3-D printed sternum and ribs, this year.

#8 Artificial implants of pancreas have been created. These could sense insulin levels in the body and produce insulin whenever required.

#9 Coming to an audacious project by Google, “Google AI”. It is in learning stage; but it was surprising that AI can learn new language or model a language; can carry out complex conversations and can talk on morality and philosophy.

#10 Researchers at Rensselaer Polytechnic Institute have created a self-aware robot. In an experiment, 3 robots were given a puzzle which required them to know the ‘self’ to find a solution. A robot was successfully programmed to identify itself.

#11 Lastly, a headset which creates virtual reality! People could play virtually real games; scientists can train astronauts on virtual mars or a student could train on a virtual dead body.

Amazing has been 2015 in the field of science and technology! Technology is great and can create beautiful solutions to everyday problems. However, technology has a dark face. It lies on humanity how good technology is used.

References:

http://www.cnet.com/pictures/best-science-stories-of-2015-pictures/12/

http://time.com/4115398/best-inventions-2015/

http://www.ranker.com/list/greatest-scientific-breakthroughs-of-2015/amylindorff

By- K Prakash Raju

Is an old widely accepted statement. So you are dependent to some extent on how your neighbours are. A good neighbourhood ensures progress for all while a bad neighbour hampers progress. India’s neighbourhood relations are complicated to say the least. Bounded by Pakistan, China, Bangladesh etc, India has had a history of conflicts with almost all its neighbours.

This article is not about conflicts and the geopolitics involved in them; this is about defence manufacturing. Till 2001, Defence Manufacturing in India was completely a government owned enterprise, the results of which were mixed. India has not exactly been on the forefront of research in defence technology. Fortunately, we had close ties with the Soviet Union and often got defence equipment manufactured under license agreements with them or some other nation. But after collapse of the Soviet Union and the volatility which followed in Russia, India realised that we need to get a serious move on and decided to finally open up the defence to the private sector. Some legislations later, when one has a look at the Make in India webpage for the Indian Defence Sector, one sees some impressive sounding stats. India has an opportunity of about 250 Billion INR in the next 7-8 years. Moreover, India has the third largest army and the 7th largest defence budget in the world as per Stockholm International Peace Research Institute in 2015. There are also promotional schemes for defence manufacturers, like: incentives, tax deductions on R&D, duty remissions on exports. All sounds very good, but it’s a bit more complicated than that as per Indian law. Any procured equipment which is above 3 Billion INR in value has to have a minimum of 30% of its parts sourced locally, that would make up a sizeable number of defence deals. We all understand the importance of a civil military industrial complex; which, in a History Channel documentary, was rated #1 in the category – “top 10 weapons”.

Many military grade equipment ultimately finds civilian utility. The trouble is that our policy makers haven’t always felt this way. Drones can be utilized in agriculture, night vision for observing wildlife and other observations. In the US, enough focus is to put to adapt defence technology for civil use. In India, we have ignored this path for quite a while. Fortunately, the government’s attitude is changing. Albeit with the intent to acquire more technology and generate more jobs, the spill over effects will come.

Truth is that there is no denying that India has tremendous potential. Indian defence PSU’s exported about 768 crores worth of equipment in 13-14. Chinese exports are more than 10 times this figure.

To compete with China, we need to sort out many things. Acquisition of land is one important area so the land acquisition bill is crucial.  Another often overlooked area is that of skilled labour. India needs to first build infrastructure to create a skilled work force which is needed not just for making us a defence exporter but also to make the “Make In India” campaign a success.

By- Shakti Chaturvedi

Secretaries of Information Technology, Biotechnology and others will comprise the panel. This initiative will be linked to leading educational institutes of India. Let’s hope that the “Start-Up India, Stand Up India” will stand up to the expectations of entrepreneurs. It will be one of the first interesting news to look for in 2016.

By- Utkarsh Maurya

Though the core focus of government since independence has been to discourage dividend payouts, so as to encourage firms to invest the profits back into their existing or new businesses, the primary reason of such policy has been to boost Indian economy through investments. Alongside this policy, government has consistently taken steps to encourage retail investors’ participation in capital market by increasing tax exemption limits and by providing various rebates. Currently, tax system in India is biased towards companies not paying dividends and thus encouraging long term investments in securities. The capital gain tax in India is lesser than taxes on dividends. The long term capital gains on sales of shares and mutual funds are exempted under section 10 (38) of the Income tax act. Short term capital gain, however, are taxed at the rate of 15 % under section 111A.

In most countries dividends are taxed at the hands of investors. Until 1997, in India too, dividend income used to be taxed at the hands of shareholders. From the beginning Indian government has discouraged distribution of dividends in order to encourage firms to invest the profits in future investments so as to enhance growth of economy. In order to combat inflationary pressures in the economy and to generate sufficient resources for investments in the corporate sector, the government has consistently put restraints on dividend distribution. In the budget of financial year 1946-47, a very high tax (super-tax) on dividends above a datum line was introduced. The objective of very high taxes on dividends above a ceiling was to deter the distribution of large dividends and to encourage the plough back of profits into firm’s investments. The then finance minister proposed to reduce tax on the undistributed profits of companies by one anna (an anna is 1/16th of a rupee). A tax rate of 5 annas a rupee were levied on distributed profits while the tax on undistributed profits was reduced to 4 annas a rupee in the financial year 1948-49.

Currently, distribution of dividend attracts tax at source in the form of Dividend Distribution Tax (DDT), levied at the companies end. Thus, there is double taxation at corporate level if a corporate is paying dividend. Corporate tax on income is applicable to all companies but the DDT is levied on only those companies which are paying dividends.

However, unlike most of the countries where dividend income tax is applicable at the hands of investors, dividend income tax is exempted
at the hands of investors in India. Objective of exorbitant dividend payouts by companies and to encourage them for more investments through retained earnings. It also ensured that it doesn’t let any shareholder with huge stakes in a company, to go off without paying taxes
on their income.

Since 1997, DDT was introduced at the rate of 10% and this benefited those shareholders who were falling in higher than 10 % tax bracket. Opponents of DDT argue that due to DDT there is double taxation on firms i.e. firms are taxed twice on the same income in the
form of corporate taxes and DDT and therefore DDT is not good for firms and investors. The other argument is that, since DDT is applicable
at firm level, all the shareholders irrespective of their income category are taxed indirectly at the same rate of DDT. Whereas in the previous
tax scheme where dividend income was taxed at the hands of shareholders, shareholders having low amount of dividend income can claim deduction under section 80L, subject to a maximum ceiling. Thus, the low income investors falling under such ceiling get tax rebate and are encouraged to invest. It is difficult to determine whether the tax collection through DDT scheme is higher than the earlier tax regime. But, the introduction of DDT shifted the responsibility to pay dividends from individual investors to firms and therefore collection of tax on dividends have become more efficient.

However the pros and cons of DDT can be established only by answering two empirical questions. One, since DDT is a fixed tax applicable to all investors; and historically it has always been lower than the maximum income tax rate applicable on individual investors, there is need to find whether there is a lower effective taxation on average income earning investor in DDT regime. However, it is difficult to get such data because of large heterogeneity in incomes of investors and also, data is often lacking. Also, this question should be answered in a dynamic environment where we see frequent changes in DDT rates ranging from 10 % in 1997 to approx. 20 % in 2014. Second broad question is more from
policy point of view. DDT was introduced in order to encourage firms to use their earnings for future investments and to enhance growth. Also, during that time, the tax collection system was not so efficient. So DDT provided a way out for government to overcome these loopholes by indirectly taxing investors at the hands of firms. However, with time this loopholes in tax collection system has been greatly reduced through various banking and taxation reforms, along with use of Information technology in taxation. One needs to find out in which scheme (with DDT or without DDT but dividend income tax at hands of shareholders) government tax collection is higher. If the two are comparable figures then DDT scheme should be abolished because in DDT scheme, even the lower income group investors are taxed indirectly at the same rate as the very high income group investors. Though it is very difficult to get the data required for such a study.

———–

Vikas Sangwan

PhD, IME Department, IIT Kanpur

Team Delphi wins at IMT flagship event...
Heartiest Congrats to team Delphi, MBA , IIT Kanpur, 2015-17 for becoming runner up in 3 Marketeers , the flagship event of IMT
Ghaziabad Business fest Passion 2015 IMTG Passion .. Cheers for raising our name on top!!

IIT Kanpur win medals in air rifle shooting competitions
We feel proud to say that three of our students won medals at Kanpur district AIR RIFLE SHOOTING CHAMPIONSHIP. Soumya Sajwan
won gold medal in women’s category while in men’s category, Manpreet Singh and Utkarsh Maurya won silver and bronze medals respectively. In addition to them, Himanshu Negi also qualified for the state championship. These students were also a part of the six-member team which represented IIT Kanpur at the 38th UP State shooting championship held in Delhi.

]]> http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/?feed=rss2&p=1353 0 http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/?p=1339 http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/?p=1339#comments Wed, 30 Sep 2015 20:40:31 +0000 Avant Garde http://www.iitk.ac.in/ime/MBA_IITK/avantgarde/?p=1339 “All work and no play makes Jack a dull boy” is the most suitable proverb one should quote while stressing upon the importance of games and sports in someone’s life. Be it at recreational or at a professional level, it is important for the individual to give space to the games in his/her routine. An interesting and entertaining way to spend leisure time, sports provides an all-round package for the mental and physical development of an individual.

Management and sports can easily be related to each other. There are many qualities which can be associated with a sportsman as well as a successful manager. Working in a team is as important in sports as it is in the management. Leadership is also one of the aspects which is very important in the sports as well as in management. Performing the best at personal level, inspiring others to do their best and then crediting the success to the team are the expectations from an effective and a successful leader. The case of Springboks winning the Rugby World Cup in 1995 as a result of the efforts of Nelson Mandela and Francois Pienaar (team captain) can be cited as an example where leaders transformed the way people looked at the team.

Celebrating the success and accepting the failure, and then not being complacent by either of them makes one a successful individual. One should move forward from these results and always prepare for what follows next onto the journey to perfection. This principle, when followed by managers, acts as a source of encouragement to continue working in a particular direction.

Everybody has a sportsperson hidden inside him/her. If that person is harnessed well, it might help the individual to hone his/her skills and become a successful manager.

-

Himanshu Negi

MBA 2015-17