Thought for the day
"Only put off until tomorrow what you are willing to die having left undone."
- Pablo Picasso (Spanish, 1881-1973)
Word for the day
Brio (n)
Vigor, Vivacity
(Source: Dictionary.com)
Malice towards none
In the national interest, the PM should start each day by publically apologizing to all aggrieved by sundry comments, remarks, tweets, writings etc. of all members of BJP, NDA allies and other friendly organizations.
Are we ready for Gen Y?
Historically, the Indian entrepreneurs have been constricted by
the culturally strong agriculture mindset. The hard working and intelligent
people missed the entire industrial revolution as a consequence. To some extent
the colonial rule could be held responsible. But largely it was the mindset
that was responsible.
Most entrepreneurs did not think long term, hence did not
invested much in R&D activities. They would rather import technology and
pay royalty for it.
Furthermore, most entrepreneurs were easily satiated.
Complacency would easily meander through their enterprise. A few which had
travelled, worked or studied abroad did only think big.
The governments also preferred less consumption over more
production. You needed to pay annual license fee for owning a radio set and
bi-cycle. Long queues for cement, sugar, scooters, telephone, cars, kerosene,
diesel, passport, were order of the day and not much protested about.
The generation post Maruti 800 is not so constricted by this
mindset. And particularly those born post 1991 have not seen experienced these
queues. These people were born with color TV beaming many channels through
satellite in their homes.
This post 1991 generation is now coming out of business schools.
These young men are global in their vision, hungry in their stomach, and have
resources to take risk. They do not stutter while talking about billion dollar.
Their role models are likes of Jeff Bezos, Steve Job, Larry Page and Mark
Zukerberg.
Anyone could see the change not only through Flipkart and
Snapdeal, but through traditional businesses like Haldiram.
These are the people who will define the economic history of
India in 21 century.
The question is whether our systems are ready to support these
young entrepreneurs.
Capital markets are not yet ready
The primary function of the capital market is to provide an
organized platform to entrepreneurs who have business ideas and want capital to
fund the execution of their business ideas.
The secondary market for securities through which various
entrepreneurs have raised money in past (popularly known as stock market) is an
essential part of the capital market. It is this part that helps in discovery
of current price of the issued securities and also seeks to facilitate trade in
such securities.
Price discovery and liquidity are thus two primary functions of
stock markets. These two functions usually supplement each other. Adequate
liquidity is pre-requisite for an efficient price discovery. A fair price
discovery mechanism on the other hand augments the liquidity through a wider
and deeper participation.
An investor in corporate securities therefore needs to bother
about two things:
(a) Whether the
entrepreneur in whose business the investors is investing is his money, has a
viable business idea, is competent enough to profitably execute that business
idea and economic environment is supportive to him.
(b) Whether he will
be able to liquidate the investments so made at a fair price, whenever desired,
subject to any statutory lock-in restrictions.
Since 1991, the market regulator and government have played no
role in pricing of the transaction between the issuer and investors. Despite an
overwhelming number of issuer failing in achieving their business goals as
stated in the offer documents, or even changing their goals altogether, the
regulators have refrained from imposing any restrictions on pricing of public
offer of securities. Caveat emptor is the rule followed in latter
and spirit.
However, same is the not the case with secondary market
operations. (a) Except for prescribing a minimum "25% public holding"
norm, there is no market mechanism to ensure adequate liquidity for the
publically traded securities; and (b) There are restrictions in fair price
discovery in form of daily circuit limits.
Consequently, the stock market in India lacks depth and breadth.
The skew in the traded volume at stock exchanges is worrying. Even at current
elevated level of market activity, top 100 stocks account for over 75% volume
at NSE. More than 50% of the listed securities do not trade on daily basis.
In an admittance of failure to control market manipulation and
malpractices of "operator-promoter" combine, daily movement limits
ranging from 2-20% are imposed on all stocks not traded in derivative segment.
Politicians are not yet ready
The Aam Aadmi Party (AAP) is reflection of this change. It has
successfully demonstrated that the 1990's generation could defeat the
traditional politician comprehensibly. Given the opportunity these people will
show that they could assimilate the modern milieu much better and manage the
affairs of the state accordingly. (It is pertinent to clarify that the author
sincerely believes that Arvind Kejriwal is constricting the growth of the idea
of AAP to service his personal ego and aspirations.)
Whereas the traditional politicians are refusing to even
acknowledge the change. They are still stuck in medieval history and skeptical
of anything foreign.
·
The debate over FDI is marred by this mindset.
·
The whole debate over secularism vs. communalism
emanates from it.
·
The whole debate over gender equality, women
security, social justice, and racism germinates in this mindset.
Feudal Giriraj Singh is pulling the maverick Modi back.
Feudal Digvijay SIngh will not let Rahul Gandhi set himself
free.
Feudal Mulayam and his brother are constricting Akhilesh.
Trivia
Considering the communist leanings of Neta Ji, BJP's emotions
for him raise doubts.
Is it a case of enemy's enemy my friend; or
It is just "let's try we have nothing to lose"!
The indications so far are that it is going to be hell of a
mudslinging match that will leave all red faced in the end.
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