Inflation Control Strategies. How effective they are?

Inflation in India and across the globe have more than doubled since the beginning of the year 2008. (India witnessed a sharp rise in inflation from 3-6% a year ago to around 12% this year. )

What comes to our mind when we see a rise in inflation data is the 'typical' remedy action by the central bank- Strict monetary regulation by an increase in bank lending rates.

RBI does this everytime inflation skyrockets,with the hope of bringing it down.

But how effective are these stepS?

I always beleive in the principle that 'do not treat for the disease..instead treat for the cause' 

With this in mind, let me throw some light into the causes of inflation.

Inflation is defined as the general rise in prices of goods and services. It can also be thought of

as the decrease in purchasing power of money.

The most commmon types of inflation are cost-push and demand-pull inflations.

Demand pull inflation occurs when the demand of a product exceeds its supply leading to rise in prices.

Cost push inflation occurs when cost of production increases leading to rise in retail prices..

If we analyze the 2 types of inflation, it is clear that if we can increase the production or decrease cost of production, inflation can be brought down.

But, does the RBI policy of decreasing money availability lead to any of the above??

RBI is trying to absorb money available for spending by increasing the interest rates. The purpose of doing this,as claimed by RBI, is to reduce the demand of goods and thereby leading to drop in prices.

What if we,instead of reducing demand, increase the supply of goods?? Wouldn't that solve the problem of inflation better?? It doesn't lead to unemployement also, as increasing production obviously increases employement..

In current scenario, if inflation is getting higher and suppose that if industries decide to increase the supply of goods to fight inflation, they will find it difficult as the interest rates are high!!!

So if RBI can reduce the rate of interest to basic industries, and agro products then we can bring down the production cost and can produce a lot more, leading to drop in inflation. History has shown that all major economic recession in world was accompanied by rise in food prices. (even the current financial meltown also) If govt. could increase the money suppy to basic industry like base metals, agiculture products. in times of inflation, we could control inflation much better!!

Cijo Thomas

Indian Youth's Laziness!!

Its been sometime since my course is over... And today I just thought a bit about what did i really do in these free time??

I have been asking this question to a lot of people, who have finished their courses and are either waiting for joining dates or a job. 

The most common reply is 'oh! nothing really.. just sitting idle...'

Other typical reply is 'as usual, tv, food, sleeping..'

I just dont know what happened to our youth.  One of the key advantage India has over other BRIC nations is its 'dynamic' and 'vibrant' youth. (the percentage of workable people in India is growing where as China is witnessing a drop in these workable population)

Recently I happened to see a post by some  graduate engineers who recently passed out and are waiting for the date of joining from a leading Software exporter. The youngsters are really frustrated with the delay in getting joining dates and they are telling like ' this company is wasting the youth by killing their time'..

I was shocked to read this!! People are sitting idle at home and are blaming  the company for destroying their time! Why dont these souls do something on their own and make best use of their time? People joining in software firms can learn a lot of technologies in these time..

When asked about this the typical reply goes like this ' we cant be sure which technology the company will be putting us in.So there is no point in learning anything coz we may be put in some other fields.!!! '

People are more focused on things that are beyond their control. What harm can it cause if we learn another programming language??

If this kind of laziness spreads through the brains of the so called 'dynamic and vibrant' youth of India, we will have to wait another 100 years before becoming a Global SuperPower.

See these quotes please..

ANNIE DILLARD:How we spend our days is, of course, how we spend our lives.

“Time is free, but it's priceless. You can't
own it, but you can use it. You can't keep
it, but you can spend it. Once you've lost it
you can never get it back.”

Great Failures!!

• Bill Gates founder and chairman of Microsoft, has literally changed the work culture of the world in the 21st century, by simplifying the way computer is being used. He was the world's richest man for more than one decade. However, in the 1970's before starting out, he was a Harvard University dropout. The most ironic part is that, he started a software company (that was soon to become Microsoft) by purchasing the software technology from "someone" for only $US50 back then.

• Abraham Lincoln received no more than 5 years of formal education throughout his lifetime. When he grew up, he joined politics and had 12 major failures before he was elected the 16th President of the United States of America .

• Isaac Newton was the greatest English mathematician of his generation. His work on optics and gravitation made him one of the greatest scientists the world has even known. Many thought that Isaac was born a genius, but he wasn't! When he was young, he did very poorly in grade school, so poor that his teachers became clueless in improving his grades.

• Ludwig van Beethoven, a German composer of classical music, is widely regarded as one of history's supreme composers. His reputation has inspired ? and in many cases intimidated ? composers, musicians and audiences who were to come after him. Before the start of his career, Beethoven's music teacher once said of him "as a composer, he is hopeless". And during his career, he lost his hearing yet he managed to produce great music ? a deaf man composing music, ironic isn't!

• Thomas Edison who developed many devices that greatly influenced life in the 20th century. Edison is considered one of the most prolific inventors in history, holding 1,093 U.S patents to his name. When he was a boy his teacher told him he was too stupid to learn anything. When he set out on his own, he tried more than 9,000 experiments before he created the first successful light bulb.

• The Woolworth Company was a retail company that was one of the original five-and-ten- cent stores. The first Woolworth's store was founded in 1878 by Frank Winfield Woolworth and soon grew to become one of the largest retail chains in the world in the 20th century. Before starting his own business, Woolworth got a job in a dry goods store when he was 21. But his employer would not let him serve any customer because he concluded that Frank "didn't have enough common sense to serve the customers".

• By acclamation, Michael Jordon is the greatest basketball player of all time. A phenomenal athlete with a unique combination of grace, speed, power, artistry, improvisational ability and an unquenchable competitive desire. Jordan single-handedly redefined the NBA superstar. Before joining NBA, Jordan was just an ordinary person, so ordinary that was he was removed from the high school basketball team because of his "lack of skill".

• Walter Disney was American film producer, director, screenwriter, voice actor and animator. One of the most well-known motion picture producers in the world, Disney founded a production company. The corporation, now known as The Walt Disney Company, makes average revenue of US $30 billion annually. Disney started his own business from his home garage and his very first cartoon production went bankrupt. During his first press conference, a newspaper editor ridiculed Walt Disney because he had no good ideas in film production.

• Winston Churchill failed the 6th grade. However, that never stopped him to work harder! He strived and eventually became the Prime Minister of the United Kingdom during the Second World War. Churchill is generally regarded as one of the most important leaders in Britain and world history. In a poll conducted by the BBC in 2002 to identify the "100 Greatest Britons", participants voted Churchill as the most important of all.

• Steven Spielberg is an American film director. He has won 3 Academy Awards and ranks among the most successful filmmakers in history. Most of all, Steven was recognized as the financially most successful motion picture director of all time. During his childhood, Spielberg dropped out of junior high school. He was persuaded to come back and was placed in a learning-disabled class. He only lasted a month and then dropped out of school forever.

• Albert Einstein was a theoretical physicist widely regarded as the most important scientist of the 20th century. He was awarded the 1921 Nobel Prize for Physics for his explanation of the photoelectric effect in 1905 and "for his services to Theoretical Physics". However, when Einstein was young, his parents thought he was mentally retarded. His grades in school were so poor that a teacher asked him to quit, saying, "Einstein, you will never amount to anything!"

• In 1947, one year into her contract, Marilyn Monroe was dropped by 20th Century-Fox because her producer thought she was unattractive and could not act. That didn't deter her at all! She kept on going and eventually she was recognized by the public as the 20th century's most famous movie star, sex symbol and pop icon.

• John Grisham's first novel was rejected by sixteen agents and twelve publishing houses. He went on writing and writing until he became best known as a novelist and author for his works of modern legal drama. The media has coined him as one of the best novel authors even alive in the 21st century.

• Henry Ford's first two automobile companies failed. That did not stop him from incorporating Ford Motor Company and being the first to apply assembly line manufacturing to the production of affordable automobiles in the world. He not only revolutionized industrial production in the United States and Europe , but also had such influence over the 20th century economy and society. His combination of mass production, high wages and low prices to consumers has initiated a management school known as "Fordism". He became one of the three most famous and richest men in the world during his time.

• Soichiro Honda was turned down by Toyota Motor Corporation during a job interview as "engineer" after World War Two. He continued to be jobless until his neighbours starting buying his "home-made scooters". Subsequently, he set out on his own to start his own company. Honda. Today, the Company has grown to become the world's largest motorcycle manufacturer and one of the most profitable automakers - beating giant automaker such as GM and Chrysler. With a global network of 437 subsidiaries, Honda develops, manufactures and markets a wide variety of products ranging from small general-purpose engines and scooters to specialty sports cars.

• Akio Morita, founder of giant electric household products, Sony Corporation, first product was an electric rice cooker, only sold 100 cookers (because it burned rice rather than cooking). Today, Sony generates US$66 billion in revenue and ranked as the world's 6th largest electronic and electrical company.

Indian Agriculture... Can we be on TOP?

Agriculture in India is one of the most prominent sectors in its economy. Agriculture and allied sectors like forestry, logging and fishing accounted for 18.6% of the GDP in 2005 and employed 60% of the country's population. It accounts for 8.56 % of India’s exports. About 43 % of India's geographical area is used for agricultural activity. Despite a steady decline of its share in the GDP, agriculture is still the largest economic sector and plays a significant role in the overall socio-economic development of India.
The monsoons play a critical role in the Indian sub-continent's agriculture in determining whether the harvest will be bountiful, average, or poor in any given year. The entire rainfall in the sub-continent is concentrated in the few monsoon months.

Agriculture In India

• One of the most prominent sectors in its economy.
• Accounted for 18.6% of the GDP in 2005  (includes alied sectors like logging,forestry and fishing)
• Employed 60% of the country's population
• About 43 % of India's geographical area is used for agricultural activity
• The monsoons play a critical role in the Indian sub-continent's agriculture

Read the following paragraph.!! Be Proud!!

India is the largest producer in the world of milk, cashew nuts, coconuts, tea, ginger, turmeric and black pepper. It also has the world's largest cattle population (193 million). India ranks second worldwide in farm output. It is the second largest producer of wheat, sugar, groundnut and inland fish. It is the third largest producer of tobacco and rice. India accounts for 10 per cent of the world fruit production with first rank in the production of banana and sapota.


Now.. read the following... and ...... no!! no more proud!! i feel shame!!

• International comparisons reveal that the average yield in India is generally 30% to 50% of the highest average yield in the world
• China ranks first worldwide in farm output. Just under half of China's labor force is engaged in agriculture, even though only about 15.4% of the land is suitable for cultivation.
• According to the United Nations World Food Program , in 2003 China fed 20% of the world's population with only 7% of the world's arable land

Just look at the following table and find your self where our India stands!
      
    Country                       Cultivated Area                        Total Agri Products in millions of USD

• India                                          15,00000km2                             158424
• China                                         13,00000km2                                298928
• Japan                                         50,000km2                               78576 

Recently I happened to read a supplement with Gulf News.  The following extract from it, made me cry!!

"

While the country(refering to NetherLands) comprises only .008% of the world's land area, it is the world's third largest agricultural exporter!!!!!!!!!!!

"

This is the case of Netherlands

But Why?? Why??? India has all the resources but still we lag in terms of total output.
The low productivity results from following:

1. Illiteracy, general socio-economic backwardness, reforms and inadequate or inefficient finance and marketing services for farm produce.
2. The average size of land holdings is very small (less than 20,000 m²) and are subject to fragmentation, due to land ceiling acts and in some cases, family disputes. Such small holdings are often over-manned, resulting in disguised unemployment and low productivity of labour.
3. Adoption of modern agricultural practices and use of technology is inadequate, hampered by ignorance of such practices, high costs and impracticality in the case of small land holdings.
4. Irrigation facilities are inadequate, as revealed by the fact that only 53.6% of the land was irrigated in 2000–01,which result in farmers still being dependent on rainfall, specifically the Monsoon season. A good monsoon results in a robust growth for the economy as a whole, while a poor monsoon leads to a sluggish growth.

In India we have the so called CORPORATE GIANTS in all fields!
Look at petroleum; we have Reliance, Indianoil which are Fortune 500 companies!
Loot at banking; we have SBI(again fortune 500), ICICI...
Look at IT services.... we have TCS,Infosys.. (fortune 2000)

What about agriculture? There are no major players!! not even single one!
Some popular names include REI agro,Lakshmi Overseas,Amul, which are into food processing, and some names like TATA Chemicals,GSFC which makes fertilizers.. But none of them are Giants!! We cant even call them Large! None has a market cap of above 5,000cr!

We have now some movements taking place in agri sector.. Mukesh Ambani's Reliance Industries is going farming with a huge investment.. They are planning about 15,000 acres of land in N.India.. Also Telecom Giant Bharthi is also looking at farming!

What are they actually upto?? are they really into uplifting Indian Agriculture?? or are they eyeing the huge real estate potential? The thousands of acres of land being acquired now at virtually "PULLU VILA"  (cheapest price) will be huge GoldMine after few years considering the real estate value!  (another Unitech?? )
 


Recently when Bush commented that growing population and reduction in poverty in India and China the reason for world food crisis, we people had nothing great to boast, except some protests done for political gains! 

(well, Bush has no right to blame India! coz he announced subsidy to farmers who use their corn to produce oil!! which led to reduction in corn available for food industry!)

When any new industy is discovered, a group of countries with potential for that indusrty is awaken. Industrial revoultion in europe, Oil industry in Gulf, Electronics in japan, manufacturing outsourcing in china.........................................

India has plenty of land.. Labour available cheap. In current situation, raising finance wont be a big deal. Overflowing rivers in north india.. We are blessed with sea on 3 sides to facilitate the exports... We have everything we want !! but....

.......... Despite having all the potentials of becoming world's biggest exporter of food, India is not tapping its resources!!!

swantham,

Cijo Thomas

   (oppu)

My Engineering College Life......

MAR ATHANASIOUS COLLEGE OF ENGG. Kothamangalam-- The great place where I did my engineering. The place where i have transformed from a boy who couldn't stand on stage and speak....to a real engineer..... making presentations infront of huge crowds.... I think my blog wont make any sense unless i write my college life here.... the place where i enjoyed a lot.... cried a lot..... worried a lot....and learned a lot.....

I dont remember the exact day on which i joined mace.. but it was in september..

I went with my mum on the welcome day. After the meeting.. we were taken to the CSE Dept by our group tutor Linda miss.

I remember noticing 2-3 faces. One was rosmy. i didnt know her name.. then i noted Rini.. (she was my class mate in nirmala).. and then MANU.. coz his parents and my mum talked.. and finally njanum manu-m relatives aayi! ALIYANs!

The first day at college. I took position in 1st or 2nd bench.. it was Vysakh whom i met first! we talked a bit and then what.. some seniors came and picked me! i was wearing full sleeves and shoes! enne avar onnu fire cheythu.. "nee enna kalyaanathinu povaanoda ______"

Njanum vittu koduthilla! "ivan aaru " enna mattil njanum thirichu mooppichu! avar poi!

Oru VIJAYITHANTE bhavathil njan classil chennu irunnu! 

1st day poi angine!  Ellam "Subham"

Next day or day after it.. i was sitting in some other bench.

2 seniors came and enquired for a guy who sat in 1st bench on 1st day!

Amme ! athu njan aanallo!!

Enne avar pidichu!

Pinne pooram allarno!! _&!($*^$* ( $!^*

$&!*$&


$(&$)

Njan oru peace talk enna mattil  oru chettante kayyil kayari angu pidichittu 'HI" paranju!

Perum chodhichu!

Ente amoooo!!

Pinne )()!@()($) bahalam aarnu!


Appol athaa EEE - le oru sir kadannu vannu!

Sirne kandappol avar oooooodiiiiii..

Eveningil aa chettane pinnem kandu.. He was bit tensed whether i have complainted to sir..

He talked to me for a while.. and invited me to a DRINK party too! ( ofcourse, i turned down that invitation!)

EE raging kazhinjappol njan poi irunnathu Tarun te aduthaa! Annu thudangiyatha Tarun ayittula friendship! my first friend in MACE!

My friends count increased each day....darshan..manu....no female members so far...

1st year tour was to munnar. I found it difficult to take attendance during tour, as i didnt knew any girls names!

S3-S6 was a usual college life.... If i start to write about all the incidents, then it will take a whole day!

Tours, classile alambundaakkal.. 

there was a common thing which happened 1st week of every sem!

ME and MANU buys new notebooks and sits in front bench. with the intention of being 'padikkunna kutty'..

1 week work out aayi!! 2nd week onwards njangal veendum pazhaya 'alambu' payyanz!!

Things improved as I moved to S6.. This time i spent a reasonable amount of time for my studies. This is the sem when i felt like..the class was a family.... .. i was very committed to my class,, and was willing to do anything... i mean anything for the class!!

S7 was the most eventful semester. We enjoyed a 3 day trip for the first time in college life!! This is the time when i and elizabeth became close friends.. I prayed that my college life should never end... Saturdays and Sundays were most boring without class:( :( :(  I understood the meaning of the word 'loneliness' while in s7... i had this on all holidays...

This sem i took my studies very serious.. thanks to a dear friend of mine...:) |Combine studies started showing results... and I learned the importance of time and hardworking when i studied with this dear friend of mine....

S8 was a more like a smooth continuation of S7 but many bad incidents occured for me.. My professional life was booming with seminars, paper presentations... but my personal life took a beating.. I kept on failing continuously to hide my feelings.... I dont know how  I managed to finish the S8.... friendship...missings..... love... studies... oh..my brain was always full with something and i was always worried..

As in S7, I give 1st priority to studies and I think i topped in sessionals in class. and did very well for my universities as well.. :) .. I did hell lot of work with my dear friend in last 2-3 semesters to bring my aggregate to 72 from around 69

S8 ended... I dont know..how much i cried..lying alone.. in my room.... oh .....God only knows how much pain...

The friendship with my dear one continued...though lot of misshaps occured...:)

I know i cant go back to my campus life ever... Have to accept the fact.. its over..... i will miss u all very much dear friends!!

During 4 years of engg.. college life, I learned a lot of thing.. I have changed a lot... I am no more afraid of anything.. I have a vision now... And the strength to reach there......

Now my next few years will be in Infosys... My MACE life has given me the foundation stones...for a tough life at Infosys..!:) ( dont know why...i like to lead a tough and busy life these days!!)

Swantham...

Cijo
(oppu)

Political Stupidity!!

Well, the title could have been simply Political Acts which would obviously means stupidity!

Recently I happen to see a opposition party agitation in kerala where the party people were showing a comparative chart, comparing prices of goods when their party ruled and current. The list was like "Rice- Rs 10 then.. Rs 20 now... ..........etc etc "
And they were putting slogans saying usual 'Down with the govt' and all.

Well, haven't these people heard of inflation and global inflation data?? Price of a cup of tea was just 1or 2 paisa 50 years back, DOES that mean the government then was the best one??
Inflation in India is around 5-6 % average for past few years and this year it soured to 10+ levels and people started protesting!

If we take inflation data of any country in the world, India is far better!! Inflation in most middle east countries like UAE, Bahrain in around 15-20%!! US inflation also doubled! So is the case with china, and other emerging countries.

How can India be isolated from a Global Inflation Trouble? We too enjoyed good growth when the whole world was growing and we naturally will be affected by global climate!

Inflation is quite natural in any growing economy and it cannot be called a -ve aspect. Its actually an inevitable 'sign' of Growth. It seems like the political parties want our inflation to be zero!! They seemed to have forgotten the 8% average GDP growth we enjoying now.

All they care about is simple protesting whatever the govt do just to throw off the government!

Well, it reminds me of one famous real life quote from the legendary film maker Kamal Hasan.
When asked about entering politics, he gently replied "Am I that good in acting????"
In another occasion he replied "Sorry, I can't act the whole day!"

I.T Recession & DOJ!!

Its July now in the year 2008 and most engineering graduates in India who are placed in IT companies are waiting desperately to get the date of joining (DOJ). Orkut scraps, chats , everything contains the word "DOJ"..!

After the tech-bubble of 2001, again this year IT firms are delaying the DOJ. I thought of putting some information regarding the same here!


Why the recession ?? Everyone might have read in newspapers regarding US Subprime Crisis and all. Most people avoid such news because very few have understood the Subprime and other terms!!

U can of course Google it and find out but I will try to put it as simple as possible and explain why all have to wait so long for DOJ!

In simple terms , Subprime loans are loans given to people who do not have a a good loan repayment history & has low income/job . Naturally Subprime loans are riskier and so banks asks for mortgage. (in local language- 'panayam' ) and houses were kept as mortgage mostly.

In US large no: of subprime loans were given last few years. But as interest rates increased monthly installement has also increased and many people didn't pay the installements. At the end banks were forced to foreclosure the loan. ('Japthi cheythu') As more and more people failed to repay, more and more properties were foreclosured. This was accompanied with a sudden fall in real estate and home prices. So banks couldn't get back the money which people owed them, as prices at which homes were sold were much below its estimated prices. Naturally banks suffered from heavy losses. The exact amount of losses is alarming and is estimated to be around 350Billion US Dollar. (1billion us dollar= 4200 crore indian rupees)!!!!!!!!!!!!!!!!!!!!

Big companies like CITIGROUP, Merryl Lynch,Barclays etc suffered huge losses. and this is exactly what we hear as US Financial Crisis or Subprime Crisis!!!


Now how this is related to IT recession??

IT companies in India are mainly service providers. And majority of revenue for them comes from banking & finance sector (BFSI) . BFS companies either delayed or canceled their expansion works and IT budgets, leading to slowdown in IT companies here.

There is another main reason which affected profit of all Indain IT companies. Its nothing but the appreciating Rupee. From 48ruppes per dollar to almost 38rs per dollar will affect the profit of IT companies by a good extent.


I hope now all understood why the looooooong wait for DOJ!!

US Subprime issue leading to slowdown in IT spending coupled with a appreciated rupee is the cause!!

So we can either simple sit down @ home waiting for DOJ to come, or do something useful !!


Some informations to see how worse the matter is -->http://news.bbc.co.uk/1/hi/business/7096845.stm

Quality of Enggineering College Graduates

Let me speak something about the quality of Engineering graduates in kerala.. (I have just passed out from a leading institute in Kerala )

I was under the assumption that the learning-by-heart technique will work only till 12th! But now, I can say without any doubt that, by simple ' learning by heart technique ' one can get good scores!

All subjects are pure theory based. Thats fine becoz a good theoretical foundation is necessary. But with mere theory no one can become a true engineer. The exam methodology is testing your ability to memorize things rather than checking your knowledge and applicability. 5 modules per subject,6 subjects per semester, 8 semesters like this will make a graduate who can be put to little use in real industry.

The only thing which tests the real talent of students are academic projects. But unfortunately, we have 100's of institutes offering so called 'project guidance' to students where most students "buy" projects from them present before the teachers and even worse, teachers don't even have the ability to find plagiarism.


IT industries have realized this and are offering rigorous training to all freshers before being put to any useful work. Most company's claim that they spend lakhs of rupees to train a individual. I was wondering, if our educational system can be modified slightly, in accordance with industrial needs, companies could save millions of ruppes and hell lot of time. The IT training industry is the biggest gainers of this defective system with a size of Rs5,000-6,000 crores.


Even a simple change in syllabus or teaching methodology or testing methodology can make remarkable changes in quality of around 4 lakhs engineers passing out from various engg. colleges across the country.

We should focus more on Knowledge rather than Information. Why don't our system be changed to produce 'TRUE ENGINEERS" who are employable. Hope initiatives like CampusConnect launched by Infosys will see good result.

Christian Priests - Irony

Got inspired to write this blog entry after reading about the 8 course dinner served at G-8 meeting @ Hokkeido in Japan, where they met to discuss how to handle world food crisis!!

The same kind of irony is found everywhere, particularly in preaching by christian priests. As per bible "those who have 2 dress, give 1 to the needy....." and the priests who preaches bible are the kind of people living luxurious than many of the average people. They keep on preaching about leading simple life and uses the luxury cars and other luxuries in life!!

I think our Mahatma Gandhi better followed Bible better than the christian missionaries! Mahatma says " Never demand anything from a person unless you yourself can show it by example." He lead by example and our priests doing just the opposite!! Coming in luxury cars to speak about leading simple life..

Remember during church festivals how many lakhs are spend for crackers, lighting and decoration, band sets etc... Seems like priest and other 'religious' people are blind to the poor people begging for a days bread while they march with the band set and all!!


This is worse than the G-8 meeting where country delegates discussed on solving world food crisis while enjoying a delicious 8 course dinner!!