Thursday, December 3, 2009

The upcoming confusion in Indian Markets

After independence ‘water’ in Indian industry flowed in many different directions. Some times it even took a ‘u’ turn and flowed all the way back and reached the square 1. Then it moved in the opposite direction. With out a chance for doubt anyone can say that Indian economy will be good study material for a bright research student on financial markets. Once a major trading hub; left behind in the industrial revolution; joining hands and heart with socialist philosophies after independence and finally - after the collapse of Soviet Union and crisis of 1991 retraced all the way back and find a new ally in market economics.

                                          [A farmer]
After the acceptance of market economy India witnessed a study growth, mainly due to the things which the western economies can’t offer - cheap labour and the so called high skilled people. Some may say that China is growing at a rate more than us. But we have to remember that China accepted market economy some two decades before us.

Water again flowed. We say the South Asian crisis, dotcom crash, Subprime crisis of 2008, Dubai financial crisis and more. India may be escaped from all these because of the less dependency in export oriented growth. And still the economy is growing.

But is this growth sustainable? Will the emerging economies rule the coming ages? Will they control the world markets? If any one asks me this question my answer will be a straight no. It can’t. If we are ready to change the deep rooted policies which is there in many people's mind, we may remain in the path of growth but will not be in the position of Spanish in the 17th and 18th century, Britain in the 19th century and US and Japan in the 20th century. In fact no one can do that again – even if it not impossible.

                                         [Mumbai - Pune express highway]

I don’t know where I read, but I feel its right. Google and other companies may be able to unseat (or already unseated) Microsoft from the all powerful position in software and IT; but they can't attain the seat of IBM in the 60's and 70’s and that Microsoft afterwards. In fact it will turn to a Boxing ring where all can come - fight - survive/go. The same thing will be applicable for the emerging economies too.

India enjoyed this position mainly due to the cheap labour available here, huge domestic economy and due to some highly motivational people. But what we usually saw in these times is after a continuous growth, cheap labour will no longer remains a cheap. As money is available along with other resources, normally people will turn to/like to become a part of band wagon called Consumer economy. There they will spend the money in imported things and many other things no problem whether it’s needed or not. In many times this will be on credits. But life in credits need more credits to go on. In order to sustain this consumerism they will go for loans. As cash surplus raises normally companies will pay them more. But in this case they are slowly but inevitably losing the tag of cheap labour.

What will happen if this is coupled with the absence of highly creative, visionary leaders/workers? Now the inevitability comes, in an equally valued set new companies will go for quality. And by this time workers from all over the world will more affordable. As Shakespeare once said “All the world’s a stage…”.

This is the point where we have to stop and start thinking; recent surveys estimated that only a low percentage of students passing out of the colleges in India are actually employable. So what happened to the rest? Is it due to some specific phenomenon happens only to the people from Kanyakumari to Kashmir or Gujrat to Assam?

No prize for guessing the answer – it’s a straight-forward no. As one my friend recently described in one of our conversation "We are Jack of all trades but master of none". Here in this educational system every student has to study almost all subjects. Over and above many want to become Engineer and Doctor due to pressure or due to the high attention(read as social status +salary) getting to that job. Did you ever think what a Doctor will do by learning advanced calculus? And what a mathematician will do after leaning the Biology? If a person is interested in management sector and working for some commercial banks how Physics and Geography (in academical sense) will come to his help during a market analysis? You may have many reasons to justify the current system. After all we are living in this system for many years and enjoyed the comfort of it. Suddenly venturing in to a new world will simply unacceptable for many.

                                          [Jawaharlal Nehru Port Trust- Mumbai]

You may have many questions to ask like; a) we are progressing now, and have so and so companies who are really the world leaders in their areas. b) Our international trade increases, and many companies are venturing out to other nations to acquire new companies. c) In IT, Defence manufacturing, Generic Parma, oil we have good shares and countless others.

But can you locate a single computer microprocessor manufacturing plant in India? Can you give me the name of a company in the level of Siemens AG, Hitachi, and General Electric? How many Nobel laureates in Science sector are Indian national who are educated in Indian universities? Even after these much revenues from IT how many companies are in the scale of SAP, Microsoft, Intel, AMD, NVIDIA, Google etc? How many Indian government sites are down due to virus attacks? Even after having a long coastal belt how many container trans-shipment terminals we have? Why we are still using Colombo (Yes Colombo is indeed a huge port), Salala, Singapore ports for container trans-shipment? Is there any company on the scale of Pfizer, J & J etc?

The next question really disturbing Indian Industry is - how professional we are? Whenever the production time lines didn’t met companies will simply raise the working hours. Will give some more benefits to employees and thus fix a temporary problem. How Indian companies are finding and grading their employees? Conducting internal exams? Based on seniority? They will find the Date of Birth certificate, joining date and after a through analysis they will promote a person who is more senior to the higher position –no matter what they did in between. It is sure that if a person younger than you joined in the company before you, then you will never reach the top – even if your track record is better. So it’s normal that people will start to think - what is the point of doing something great, if you will not be rewarded for that? Anyway you will get the salary!!!

Did you ever thought how a manager is promoted? In the so called professional companies, which don’t consider age as the sole limit (even if it’s a barrier) boasts about their promotional guidelines. He may be the champion of something. But ever they checked the progress he/she made in the career of people working under him? Did they make substantial improvement in (of course positive only) after joining his/her team? How much they gained under his guidance? Does he utilize their abilities effectively? Any of these companies approach third parties to evaluate their managers based on these criterias?

After some years Indian employees too will not be cheap, Mass production of Graduates in Colleges will not help the situation.

In order to attain the professional qualities and greatness and satisfaction in work, our system needs a complete change. Quick Fixes will no longer help. Change is always painful, but for the survival of India economy it’s needed.


In my home state - Kerala, people from neighboring states and from many distant parts of the country comes for work. They will do all sort of hard labour and will complete it in time. For the last many years I didn’t saw a person from Kerala digging a channel for BSNL telephone lines. And now Chinese people are coming to India and doing hard work in many parts of India. Recently I read statement of a CEO “Chinese will complete the work in 15 months, but....” I am leaving the rest for you to complete.

Yes we have to change, not a change but a complete replacement, otherwise other countries will replace us.


[Images are from Wikipedia]

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