There is also the war with Google – Facebook doesn’t want to lose out to Google in the war for controlling the ‘Internet of things’ – which has lead to high value acquisition spree The next eye-popping acquisition by Facebook to hit the news recently, after Facebook’s acquisition of Whatsapp, had left people baffled. Atleast, most of us know what Whatsapp is and can see its utility and feel its ubiquity. On the other hand, Oculus, and the business space it occupies i.e. Virtual Reality are almost unknown outside the ultra geek world. Virtual Reality (VR), as the name suggests, is a computer simulated environment where people can perceive realistically the presence of things in the real or imaginary world. The devices used to simulate reality are normally head mounted displays i.e. devices wrapped around your eyes like binoculars, typically producing the illusion of depth, headphones for sound, and haptic systems (Haptic systems use the sense of touch for simulation, the best illustrative example being video games using steering wheels for car racing). An indirect mention of Virtual Reality in Indian mythology is given in Mahabharata when Sanjay, using his gift, narrates the battlefield actions to Dhritarashtra. As is the case with most technological advancements, early applications of the technology were in the field of defence, where it was used for combat training. With advances in computer processing power, it was widely expected that the industry would receive immense growth. The industry got a false start in mainstream markets when Nintendo released Virtual Boy in the 1990’s, which literally gave customers a headache due to motion sickness and eye strain. All this looks set to change. Oculus Rift, a highly affordable head mounted VR display, developed by Oculus, has made the industry exciting. The product is user friendly and it has largely eliminated the one big problem faced with earlier versions of VR headsets – motion sickness. Only the Developer Version of Oculus RIft, aimed at developers to begin integration of Rift into their games, is available in the market currently. The consumer version is expected to become available in 2014 or 2015. With other players working on the R&D or set to roll out products from there stables, namely Sony, True Player Gear and Microsoft, it looks like VR has (finally) found its day under the sun. A confluence of reasons support the case for future growth of VR products – motion-control advancements means there is no lag between user input and machine response. Software and hardware costs have come down due to research and development in the mobile market. High processing power and high bandwidth internet access implies/promise that more high end VR applications which interact over the internet can be built. But pundits scratching their heads for the $2 Billion acquisition of Oculus have zeroed in another reason for the lucrative valuation – platform. Facebook is betting big on Oculus being the next big thing – Oculus will be Facebook’s answer to Google’s Android. Facebook is betting that consumer s will get hooked onto Oculus platform, like they switched from PCs to mobiles, and reveal details about their personal life – which will help Facebook in selling more targeted ads to consumers – the bread and butter of Facebook’s business. Also, Oculus Rift is more than just being a gaming headset. The platform & technology of Oculus Rift can be used for wide range of applications – walk through of long gone historic sites in museums, telepathic viewing (watching a cricket game ‘from the stands’, sitting at home), science fiction, motion pictures, training of medical students, – enabling multiple revenue streams for Facebook. At a tech fest in Texas in March, some hard core fans of the hit TV Series – Game of Thrones – were able to see the fantastical landscape depicted in the series. Coming to the valuation of Oculus, the $2 Billion should be seen carefully. There is buzz in the market that valuations of social media companies (read Twitter, Facebook, Whatsapp) may be overblown – with revenues, atleast the current ones, not even remotely sufficient to justify the valuation. Facebook has buffered the potentially reality shock to a large extent by structuring the Oculus acquisition through $400 Million in cash and $1.6 Billion of its own shares. The acquisition of Whatsapp was also structured around similar cash to equity ratios. Facebook bought Whatsapp for $19 Billion with $15 Billion paid out as Facebook shares and $4 Billion in cash. There is also the war with Google – Facebook doesn’t want to lose out to Google in the war for controlling the ‘Internet of Things’- which has lead to high value acquisition spree. Armed with cash from its IPO in 2012, Facebook is leaving no stone unturned. By buying out diverse companies they are holding to the likelihood, but not the certainty, of hitting jackpot in the future. In this hard-to-predictever changing technological landscape, Facebook is acting like a strategic VC partner to hedge its bets.
This Article was published in “Power Corridor” magazine in April 2014. authored by Deepak Dhamija. Deepak Dhamija is co-founder, Aristotle Consultancy. (Download PDF)
With Finance Minister Arun Jaitley presenting the budget for 2014-15 today, plenty of fodder has been served to the debaters nationwide who battle it out to decide whether pro-economy or not. While shutter bugs talk about the pros and cons of the current budget we revisit the earlier budgets presented by UPA government to mirror the major changes that have come into picture with the change of power. In this article, we will walk through three important budgets that were presented by two ministers from the UPA: P Chidambaram’s 2004 budget; Pranab Mukherjee’s 2009 budget and the 201 budget tabled by Chidambaram again. The reason for choosing these three years is pretty obvious; they mark the first and last year of UPA’s rule with the second budget presented after winning the elections again in 2009. ACT
ONE- First budget after five years(2004-05)
The 2004 general elections results were considered a surprise when the incumbent National Democratic Alliance, under the leadership of Atal Bihari Vajpayee, failed to get reelected as per the opinion polls and media speculations of that time. The primary reason for the failure of NDA was considered to be the non-inclusiveness of the economically backward class in the growth story that was touted by the party in its election campaign. The UPA formed the government at the center with support from the Left. They agreed on a Common Minimum Programme to guide the government in formulating its policies. This formed the background in which 2004-05 budget was tabled by the then Finance Minister Chidambaram.
Citing the Common Minimum Program as the basic guideline, the main focus of the budget was to sustain the economic growth that India had witnessed over the last few years while providing the benefit of this growth to the economically backward section of the country. To achieve this total planned expenditure to Rs. 145490 Crores from Rs. 135701 crores proposed in the previous budget tabled as an interim budget by NDA govt.
Chidambaram in his 2004 budget proposed to increase the deadline of Financial Responsibility and Budget Management Act from March 31, 2008 by a year. FRBM Act was a legislation proposed by Yashwant Sinha, the finance minister in the NDA Government, which was designed to institutionalize financial discipline, reduce India’s fiscal deficit and improve the management of public fund by Union and state governments. The main purpose of the act was to reduce the fiscal deficit to a manageable figure of 3% of GDP. Chidambaram felt that complying with the deadline would adversely affect the social expenditure and this extension would provide him the breathing space to dole out more benefits to the downtrodden.
Food For Work Program
Chidambaram in his budget speech indicated that work had started on National Employment Guarantee Act with the objective of providing 100 days of employment in a year to one person in every poor household. He proposed the launch of a new Food for Work Programme in districts which were classified as areas in immediate need of such a Programme. A total sum of Rs. 6000 Crores was allocated for such plans. This may be the precursor to the much touted Mahatma Gandhi National Employment Guarantee Act (MNREGA) by the Congress Party, which has branded it as one of its most successful Programmes in the election campaigns.
Foreign Direct Investment
Chidambaram rightly identified the need for Foreign Investment in India and emphasized on investments in infrastructure, technology and export. Identifying three sectors-telecommunication, civil aviation and insurance, as befitting these criteria, he increased the cap for FDI in them. Unfortunately, in hindsight, these moves, while well intended, failed in execution due to inefficiency and corruption. The telecommunication investments were marred by the 2G scam which surfaced much later in 2010.
Overall the 2004-05 budget was a visionary step by the then Government with the objective of maintaining high growth while bringing the benefit of that growth to the poor people, and thus making it an inclusive growth. Let us view the later budgets and see how they measure up to this vision.
ACT TWO – A budget in uncertainty (2009-10)
Pranab Mukherjee, for long had been a senior leader in Congress party and had been the Finance Minister of India during the Indira Gandhi Government in 1982. He became the Finance Minister again in 2009, a period when Congress was reelected at the center with a thumping majority and the world was undergoing a severe financial crisis. India was at crossroads with a moderation in its GDP growth looking likely.
Pranab Mukherjee in his 2009 ( and also 2010) budget speech mentioned the three challenges for the Government in the short and the medium term:
- Bringing the economy back to the high growth rate of 9 percent per annum.
- Bringing inclusive development to all the people of India and
- Improve the delivery mechanism of the benefits by the government.
Interstingly, as per his own admission in his speech, this led to an increased fiscal deficit from 2.7 per cent of GDP in 2007-08 to 6.2 per cent in 2008-09. It is worth noting that in the year 2012-13, he was criticized by a large section of economists who felt that he was reluctant to remove the subsidies which were burdening the fiscal deficit and, hence, the macroeconomic scenario of the country.
Launch of Popular Schemes
The period saw the launch of several popular schemes which are now part of public memory. Bharat Nirman, Pradhan Mantri Adarsh Gram Yojna, Women’s self-help group and various employment schemes were introduced in this period. The idea behind them was to further improve on the inclusive growth agenda of the government. Many of these schemes, in fact, were beneficial to the people who were below poverty line and living in adverse conditions. It is rather unfortunate that the success of these schemes were marred by the expose of huge corruption scandals and inefficiency by the Government in the later part of UPA 2 rule, especially from 2012-14 when the economy deteriorated further.
A perfect example of UPA 2 mismanagement is the Commonwealth Games. In his 2010 budget, Pranab Mukherjee expounded on the potential of these games to showcase India as an emerging power to the world and allocated Rs.3,472 crores in the budget for these games. While the event was a success, the government faced severe criticism for mismanagement and misappropriation of funds, suresh Kalmadi, the then president of Indian Olympic Association and one of the chief organizers of the event was later arrested by CBI for allegedly involved in corruption.
When Pranab Mukherjee donned the mantle of Finance minister in the UPA 2 government, he had emphasized on tax reforms which were overdue for a long time. In his 209-10 budged, he clarified that he sought to eliminate distortion in the tax structure, introduce moderate level of taxation and expand the base. Two key initiatives in this regard were the Direct Tax Code which would have replaced the Income Tax Act of 1961 and the Goods and Services Taxes which would have recuced the complexity that exists today around sales and service tax. It is considered one of the key failures of the UPA 2 and an example of its policy paralysis that these acts still remain to be implemented. It must be mentioned, however, that these bills were delayed by the parliamentary standing committee and the deadlock that existed in the parliament post 2012.
THE FINAL ACT – Budget in Denial (2013-14)
On July 25,2012, Pranab Mukherjee was elected as the 13th President of the Republic of India, leaving the seat of Finance Ministry to Chidambaram who took back his position after having serve as Home Minister for three-and-a-half years. It was a very bleak atmosphere in which he presented his 2013-14 budget. The current account deficit of the government continue to be high at 5% of the GDP, much above the comfort levels of 2.5% that he may have wished. He even went on to admit in his budget speech that it is one of his greater worries. He recognized the only three ways out of this scenario: FDI, FII and ECB and termed foreign investment as an imperative.
The budget that he presented in 2013-14 was termed as a responsible budget by some and desperate one by others. The Finance Minister curbed the expenditure on populist schemes and assured that the government will provide sufficient funds to the ministries to continue on the existing flagship Programs.
The 2013 budget was perhaps the first time when the impetus was on infrastructure investment as compare to the previous budgets by the UPA government. In spite of the fiscal constraints, FM promised investment in infrastructure with financial measures like allowing financial institution to raise long-term tax free bonds in the form of infrastructure Debt Funds (IDF), solving the bottleneck around roadways development, setting up new ports and impetus on electrification of roads and setting up railway corridors.
Measures to Increase Investor Confidence
The Finance Minister tried his best to allay the fears of the investors by announcing relaxation of certain norms for the FIIs like allowing participation in exchange traded currency derivative segment and permitting them to use their investment in bonds and government securities as collateral to meet their margin requirements. To attract the domestic investors, he allowed the stock exchanges to introduce a dedicated debt segments to improve the secondary debt market and reduction of securities transaction tax. However, these measures were not adequate enough to get a positive response from the investors who expected bigger announcement from him. They were worried that he didn’t lay out a clear solution to the CAD which was becoming a big worry for the government.
As we look back at the performance of the UPA government through its budget, we can observe that the UPA govt. had been very reactive to the environment around it while forming the budget. It is not easy to infer any kind of vision for a long-term growth but they had been consistent on their platform of inclusive growth by promoting various schemes and Programs for the poor. It may be because they did not want to repeat the mistake of their predecessor government which failed to bring the fruits of development to the poor. However, even their best intentions were waylaid by the policy paralysis and ineffective implementation. By the time they tried to get things back on track it was too late.
Keywords: UPA Budget, P Chidambaram, Pranab Mukherjee, Budget 2014
Read More: Aristotle Consultancy analyses Union Budget 2014;
NEW DELHI: Finance is the backbone of a business and having a full-time seasoned chief financial officer (CFO) on board is not only difficult but an expensive task. It might be easy for large corporates and MNCs but for startups and SMEs, it is one of the major strategic issues. Understanding the real and practical problems faced by such businesses, a few NCR- based firms have introduced and are providing virtual CFO services
Deepak Dhamija says the idiots among innovators don’t need to focus on market demand
The most complicated, ever-existing existential dilemma of human existence had always found its manifestation in simple words like ‘why’? “Why do we exist” has predominantly been the most bothering question for human minds across all eras. Western existentialists answered or silenced their questioning mind by concluding that “existence precedes essence”. For them, human beings exist, create their values and determine the meaning of life. Quite surprisingly, the similar question has not been raised by otherwise supposedly curious human mind, after or while entering the corporate arena, at least, not so openly in the public spaces and definitely not in loud voices. This does make the question appear redundant. But, that is the beauty of questions and life that they may appear redundant but they do not stop existing just because human beings ignore them.
This work culture of this era is built around the adage “One who knows the answer to every how, can take care of all why’s”. This philosophy behind omnipresent capitalism makes decision-making quite easier, but for the inquisitive one it leaves a lot to be answered. Moreover, it creates a breed of workers grappling with thick fog of confusion while trying to find meaning in work. This innocuous ‘why’, which is locked in the closet in the beginning of a lucrative and rising career, comes out and makes its presence felt in really awkward manner. Like love, this word has power to drive people crazy and make them do crazy things. The most common example will be of supposedly successful corporate folks jumping into risky unknown terrains like writing, performing arts or entrepreneurship. So, one should not underestimate the power of the innocuous ‘why’ in human life. When it comes to life, may be it is quite tricky to find the answer to this ‘why’, but in terms of work, the bull can be taken by the horns. And if we do that, the corporate corridors will start echoing with such sounds: “Why should one work on five days? Why not on all seven days? Why should organisations grow? Or, why do they even exist in the first place? There can be even more such haunting questions as answers to these why’s.
In the similar context, economists, corporate leaders and academicians often advised organisations to keep an eye on ‘demand in the market’ or ‘need of the service’. Corporate gyaan often talks of being opportunistic or looking for an opportunity in the economy. Management gurus even came up with the pronouncement that “The customer is the king”. The tendency of addressing ‘the existing need’ or ‘to serve others’ is the underlying theme of most of corporate vision statements. It is often cited as the reason for organisation’s existence and inspiration for the next generation entrepreneurs to start and bring a change. Entrepreneurs are advised to avoid industries, which are saturated or do not have a huge potential for customer base. Innovations and researches are being done keeping the financial returns in mind. Established management practices avoid entry into new markets and industries without analysis of customer needs and proper market research. This has contributed in evolving a culture of rational thinking business leaders, who are focussed on delivering products and services as per market demands.
In today’s scenario, when market demand has become the most important criterion for starting a venture, it becomes quite important to stop for a while and raise few pertinent questions, like “Was there ever a demand in the market for the Taj Mahal or the Kutub Minar?”. There were always cries for the likes of DLF, Unitech or their substitutes in the market. And, so far, the market has never disappointed in responding to these sounds. But, customers neither asked for the Taj Mahal nor for an aircraft. It was eccentric nature of Shahjahan or Wright brothers to continue with what they had to do. No research was done; customers filled no questionnaires and no questions were asked from market experts. It was sheer idiosyncrasies of couple of obstinate folks to deny the logic and give their lives to achieve something without seeking any materialistic return. They might not be considered entrepreneurial in a literal sense, but they were quite enterprising. And, they were quite instrumental in creating new possibilities. Now when lines between culture and industry are blurring, when creating literature depends on the trends in the publication industry, music has a customer-base instead of worshippers and dance movements are being decided by the demand of the era, the responsibility and power to create most of this stuff is in the hands of entrepreneurs. It is quite an intriguing point to ponder about “why these entrepreneurs are creating anything new”.
The number of eccentric obstinate individuals, who will be willing to go ahead with their plans without paying heed to the market demand, has diminished exponentially. They have been replaced with logical-thinking entrepreneurs. And, more than their whims, they follow market-driven strategy while taking their decisions. More often than not, this kind of approach has led to the building of successful business organisations. The only irony is that, creating successful organisation does not warrant a successful individual life. Now, before we get into the debate behind relativity of definition of success, let me take away the fizz from this controversial statement. Creating successful organisation does not warrant adrenalin rush or excitement in individuals. Rather, most of the time the so-called corporate failures and the ones flowing against the flow enjoy the excitement more than the ones who enjoy success. Although it is not mandatory that the taste of success and the taste of excitement should always stay exclusive. In my self-claimed, humble opinion, the connection between both of them is quite similar to the relationship between the number of vehicles and the number of crows in a town. Success is, more or less, a social phenomenon, while excitement is quite a personal experience.
The adrenalin rush while exploring the unknown can definitely be a good substitute to “why” of the work culture. Or, may be, this adrenalin rush or excitement is not a substitute but actually an answer to this “why”.
Deepak Dhamija says a mix of ambition and work pressure has led to corporate stress
SINCE THE evolution of the corporate culture, particularly in the past couple of decades, it has enriched the English language with newly coined terms, metaphors and new interpretations of old words. Unarguably, no other generation before had such a clear demarcation between personal and professional life in mind. Without any second thoughts, it can be said that, never before have people had so many things in their to-do list. And, with a little bit of argument, this can be said that, in the history of humankind, rarely has any generation felt that they are not doing enough in their lives.
The most fascinating part of any journey is to stop and look towards the point of origin to get surprised by the distance we have covered quickly. If we take a look at the relationship of human beings and work, we will find that a couple of centuries back, work was an integral part of the human life. Except monks, there was barely anyone in society who was not involved in any kind of work, though there was no such term as “job” and “work profile”. Neither were there clear-cut remunerations, nor did we have well-defined responsibilities. But, work was so much part of an individual’s life that it gave a sense of identity to them and their families. It was considered to be an individual’s raison d’etre. There were political struggles; there were social struggles; and there were economic struggles. The workplace was uncomfortable; the remuneration was barely enough to survive; and there were constant voices of dissent complaining about the work condition. But, none ever uttered the term, which is equivalent of today’s “work-life balance”.
This trend continued even after India gained independence. If anyone got a job, which was reasonably comfortable and provided enough income to take care of basic needs, there was barely any reason left to complain about. That is precisely the reason why government jobs were most sought jobs for a long period of time. Till a couple of decades back, there were barely any quick sources of information, so they had to spend hours figuring out stuff. There were barely any offices that were air-conditioned and had beautiful artificial sceneries. Even typing on computer seemed to be an intellectual and geeky exercise. Still, the middle class rarely talked about being dissatisfied with their job or nature of work. Complaints were made about the politics being practised in the country, not in the office. People stuck with their first job longer than with their first wife. Moreover, there was barely anyone who was depressed or stressed out due to the nature of the work.
Even then there were people who had their midlife crisis, but that used to strike them literally at midlife, not in the twenties. Few of them nurtured individual angst in their heart about the social structure, and it manifested in forms of few political struggles. There were existential questions like “Why do I exist?”, which made one restless in that era too. But, the numbers were small.
That was the old generation, not-so-intelligent and not-so-ambitious. That generation belonged to the era of the closed economy and enjoyed Test cricket. While this era belongs to the ambitious generation, where everyone is a wannabe Alexander, and is willing to conquer the whole world. Now waiting for anything is considered as punishment. Most of the gadgets and evolving technology are primarily aimed towards saving more time. Still, 24 hours in a day do not seem to be enough, neither for work nor for family. Moreover, interest is not an activity that one undertakes during leisure time. The time has to be taken out of one’s tight schedule. Waking hours are divided very cleverly, making way for most of the important activities.
The faith in gods is diminishing in the English-speaking, logical urban population. Stress has emerged as the new god of this century. Its omnipresent nature can be experienced in corporate meetings, with family and even in discussions with peers. Stress emerged as such a powerful force that simple activities, like shopping, cooking, playing, etc., started falling under the category of activities to destress.
But these measures started proving to be counterproductive. There is a pressure to perform on weekdays in office, and then there is a strange peer pressure to party harder in the office outings. All attempts to reduce the restlessness, trying to find meaning in the work make the work appear more meaningless.
Primarily the number of people suffering or enjoying this condition of angst can be found in the corporate office. This acute realisation has helped us in coining another term – “corporate angst” – and made the English language richer than before.