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Sunday, 16 November 2014

BENCH-MARKING INDIA INC

Launching of MakeInIndia web site was a great initiative

It can be made greater if its scope gets expanded to enable millions of SME ( Small Medium Enterprises ) to quickly learn / absorb the best Manufacturing / Management practices of India's most successful companies

Over 20 / 30 / 40 years , these companies have developed / evolved , some of the best practices in different functional areas , such as :

* Project Planning / Execution
* Financing / Fund Raising
* Long Term Strategy
* Cost Accounting
* Capital Budgeting
* Dealership Network
* Supply Management
* Subcontracting / Outsourcing
* Vendor Development
* Statistical Quality Control
* Tendering
* Human Resource Development
* Maintenance Management
* Logistics Planning
* Salary / Wages Structuring......etc etc

In each of these Functional Areas , these Companies have created ,

* Standard Office Procedures
* Approved Shop Practices
* Operation Manuals
* Forms ( Online / Offline )
* Documentation
* Software Tools
* Brochures / Pamphlets
* Agreements / Contracts
* Legal Undertakings / Notices
* Board Resolutions
* PERT Charts
* Process Monitoring Graphs......etc etc

And which are these " Successful " Companies ?

* L&T / Reliance / Birla Group / Adani Group / Infosys / Wipro / and hundreds of others

Can they be persuaded to share these data by uploading on MakeInIndia web site ? - for 25 million SME to download / modify and implement in their own companies ?

I am sure if our PM , Shri Narendrabhai Modi , makes such a request to ASSOCHAM / FICCI / CII and other similar organizations , these companies would gladly come forward to share with the rest of the Indian Corporate , the KNOWLEDGE / WISDOM that lies captured in the above mentioned documents / manuals

It is high time , we think " Out Of Box "

It is time to convert Private Intellectual Property ( PIP ) , into National Intellectual Property ( NIP )

I am not suggesting that any Company should reveal any of its " Trade Secrets / Patents "

But if MakeInIndia has to become a resounding success , successful companies must undertake to mentor 25 million SME

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* hemen parekh / 17 Nov 2014
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Wednesday, 12 November 2014

POLITICS IS THE ART OF POSSIBLE

Between Mahabharat of old and the Maharashtra of new , there are some parallels

When offered a choice , Pandava Prince , Arjun chose Lord Krishna , rather than his army of 18,000 soldiers

Devendra Fadnavis chose a couple of independent MLAs , rather than 62 MLAs of Shivsena

Again , when thousands of soldiers of Pandava army were succumbing to the arrows of Guru Dronacharya , Lord Krishna showed a way to demoralize the Guru

He made Dharmaraj Yudhisthir ( who only spoke truth - and nothing but the truth ) tell a half-truth

When rumor spread that Guru's son , Ashwathama was killed , Guru asked Yudhisthir , whether this was true , knowing that Yudhisthir would only speak truth

Yudhisthir loudly said ,

" Yes , Ashwathama is dead "

Then added in an inaudible low voice ,

" May be a human or may be an elephant "

Maharashtra Assembly Speaker , Haribhau Bagade , too , said ,

" This Government has passed the confidence vote "

May be , among the din that followed , no one heard what he added ,

" May be legitimately , may be fraudulently "

It seems Shiv Sena forgot to ask itself ,

" What good can you do for the people , if you are not in power ?

People are simply fed up of Opposition members walking down to the Well of the House , shouting slogans

People have elected MLAs - whether in Government or in Opposition - to pull them out of the abysmal well of poverty

* hemen parekh / 13 Nov 2014

Tuesday, 11 November 2014

A CASE FOR ZERO PERSONAL INCOME TAX

For past two years , I have been advocating total abolition of Personal Income Tax

Not because , a few countries such as Saudi Arabia , UAE , Qatar , Oman , Kuwait , Bahrain etc , have NIL personal income tax

But , even for a less developed country like ours , it makes a lot of sense

Here is why :

* Today's Hindustan Times reports following study by Price Water-house Coopers ( PWC ) :

" Average take-home salary as a % age of total salary " - are :

> Saudi Arabia................ 98.86

> China....................... 62.05

> Germany................... 60.61

> USA.......................... 60.45

> UK........................... 57.28

> India......................... 54.90

> Italy......................... 50.59

* It is obvious that Saudi Arabian citizens take home more because there is NO personal Income Tax there

* In India , our " Take home Salary " is only 54.90 % , because we pay a very
high personal income tax

* Of the total revenue receipt of Central Government ( 2013-14 est ) ,Personal Income Tax contributes only 23 % ( approx Rs 2.4 lakh crore )

* If personal income tax were to be abolished , this revenue will be lost

But , here is the Upside :

* India's current Household Saving Rate = 21.9 % of GDP

* That means our total Household Savings = Rs 24.72 lakh crore ( 2012-13 )

* Of these ,

> Rs 16 lakh crore are tied up in unproductive Physical Assets (Gold/Land)

> Rs 8 lakh crore are invested in Financial Assets (Bank / Mutual Funds)

* If Personal Income tax is abolished , it is possible that our Household
Savings Rate may go up from 30.1 % to 45% of GDP (it was 40% in past)

* That would add Rs 12.36 lakh crores , raising total to Rs 37 lakh crore !

* And most likely , the proportion of investments would be ,

> Rs 7 lakh crore in Physical Assets , and

> Rs 30 lakh crore in Financial Assets ( Productive use )

And that's not all !

* With NIL personal tax to pay , all the cash ( black money , no doubt ! ) ,
lying in bank lockers , will get deposited in official bank accounts , within
one year

Now , couple this BOLD & IMAGINATIVE step with :

* Creation of SPVs , dedicated for building Infrastructure . No questions asked

for amounts invested in these SPVs . No dividend tax for 10 years

If implemented , there will be no reason for us to go begging China / Japan / USA for investments in Infrastructure / Manufacturing etc !

* hemen parekh / 12 Nov 2014

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Saturday, 8 November 2014

HOW CHINA MAKES CHEAP ?

A few days back , I heard , Government of India banned imports of cheap Chinese fire-crackers ; presumably to protect the jobs of thousands of workers , working in the fire-cracker factories of Shivkashi and elsewhere

This morning newspapers carry headlines :

" Lakhs of poor women working in Agarbatti factories thrown out of jobs , due to imports of cheap Chinese Agarbatties "

Soon expect a ban on imports of Chinese Agarbatties !

It is the same story with big manufacturers of ,

> Power Generation equipment

> Solar panels

> Machine Tools

> Construction Materials........etc

Indian manufacturers of these equipment want India Government either to ban imports of such equipment altogether or impose huge import duties to discourage its imports

They are telling Government :

" If you don't , thousands of workers will lose jobs "

In turn , the Indian Government is telling the Chinese :

" We already have a negative trade balance with you , of about $ 35 BILLION.
You must help us correct it by buying from us MORE ( of those expensive goods that we manufacture ) ,

and,

Stop exporting to us all of those CHEAP Chinese goods "

Question is :

How many Chinese goods can we stop importing ?

No one seems to be asking :

" What enables the Chinese Manufacturers to make those goods so cheap ? "

May be - just may be - India Government , and those Indian manufacturers , need to find answers to this question !

May be , we need to IMPORT those Chinese Labor Policies / Government Procedures / Manufacturing Practices / Bank Interests / Tax rates / Land Usage laws / Single Window clearances and a hundred other things that have enabled China to become , the " Workshop of the World " !

That is the only way to save - and create - JOBS , in India

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hemen parekh / 09 Nov 2014

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Make Yourself Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

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Saturday, 6 September 2014

" COMPOSE MESSAGE " page

Shuklendu

This is further to our telecon yesterday

In the evening , I mentioned to Vishesh re our attempts to embed a video into the text of the message

He pointed out 2 things :

> Video will make the message " heavy " and email will take a long time to get transmitted ( this is something that I have experienced )

> But what could be far worse is that , such an email ( containing a video ) is quite likely to be treated as " spam " and dumped into junk email folder - unlikely to be ever opened

If you too agree with these observations then , it is not too late to reverse / modify our decision !

We have following options :

> Forget about the video altogether ( just provide for embedding photo / image etc into the text )

> Make provision for " attaching " a video with an appropriate warning that this may go to junk folder !

I would appreciate if you could discuss this with Nitin and then convey to me your decision

If you decide to drop the video altogether , when can Satish upload the remaining changes ?

These changes are :

* Any casual visitor being able to compose a message and be able to download the same ( which will carry a watermark )

* Search-bar , to type a keyword and click either of the buttons , " Show Images " / " Show Clip-Art "

* Display of search-results and ability to copy/paste ( into the Message Text ) , any photo / image

* Anything else ? You may want to refer to my handwritten notes / earlier emails

hcp

Friday, 1 August 2014

A TALE OF TWO BETRAYALS

* Betrayal by Central Government ( really , by BJP )

Central Government decided not to cover political parties under RTI act - which was a BJP promise during elections

* Betrayal by the Supreme Court

SC declined not to have FAST TRACK courts for trying - and completing within ONE year - court cases pending against MPs and MLAs

But , if Modi means what he said , both during election campaign and in Lok Sabha , he can most certainly find a way to create 15/20 Special Courts ( to be named , " Legislator's Court " ? ) , which will hear these cases on a day-to-day basis

* hemen parekh ( 02 Aug 2014 )

Monday, 14 July 2014

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As more and more Organizations join up , more will benefit due to principle of Network Externalities

hemen parekh

Sunday, 13 July 2014

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---------------------------------------------------------------------------------

hemen parekh ( 14 July 2014 )

Monday, 7 July 2014

Central Budget : 2014

Dear Shri Arun Jaitleyji,

Even as you proceed to present Central Budget to Lok Sabha on 10 July 2014 , please look out the window of your car and see the " Poor " people on Delhi's footpath

Then , like Mahatma Gandhi ask yourself,

" Whatever budget proposals that I am about to present , will these bring a smile to the faces of these poor ?

363 million poor Indians , who eke out a survival on expenditure of Rs 32 ( rural ) or Rs 47 ( urban ) per day ? ( $0.5 - 0.8 / day )

For a family of 4 , that works out to , Rs 3840 - Rs 5640 per month

( $ 64 - $ 94 per month )

May be the head of the family manages to earn Rs 2,000 per month , doing odd jobs , here and there

The rest of the income must be coming thru ,

* Wife scavenging the garbage heaps for discarded plastic bags / bottles

( when she is not salvaging discarded food ! )

* Children begging on the streets ( you will see them as you drive to Lok Sabha )

Now if,

* Our population keeps growing at 15 million per year

* Inflation keeps rising at 10 % per year, necessitating raising " Poverty

Limit " by 10 % per year

Then ,

* How many more people will get added to "Poor "population, every year ?

May be 5-7 million/year ? 25-35 million by 2019 ? Taking the total to 400 million ?

Mr Jaitley ,

Can you listen to their anguished cries ?

They are " begging " you to create jobs for them , so that they can work hard and earn an honest / decent income , which can lift them above that wretched " Poverty Line "

They don't want your dole-outs / subsidies for food / LPG / Kerosene etc !

They don't want to remain dependent on Sarkaar - Maa Baap , for ever !

Sir ,

Can you ( ie Central Government ) give them jobs ? To even 50 million / year ?

Assuming that creating ONE job calls for an investment ( in fixed assets + working capital ) , of Rs 1 million ( Rs 10 lakhs ) , you need,

* Rs 50 MILLION * MILLION , every year !

And YOU just don't have that kind of money !

Even as { Rs 500 MILLION * MILLION } of Black Money is locked up in un-productive assets , all over the country !

The only way you can create those 50 million jobs / year , is to enable these Black Monies to turn into WHITE MONEY and get channeled into Infrastructure / Manufacturing / Services etc

And the only way you can do is to ,

* Introduce Amnesty Scheme ( now / immediately )

* Introduce INVERSE TAX REGIME ( in 2015 Budget )

I have sent these proposals to Shri Narendra Modi / Shri Murli Manohar Joshi / Shri Nitin Gadkari etc , during the past 8 months

* hemen parekh ( 08 July 2014 / Mumbai )

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Make Yourself Heard

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Sunday, 6 July 2014

The Invisible Corruption

Why invisible ?

Because it is cleverly camouflaged in the " Terms of Contract " that companies sign with Central Government / State Governments / Municipal Corporations / umpteen Government Agencies

This invisible corruption is rampant in Infrastructure Projects that get spread over months / years

And every possible trick / excuse ( officially called " Reasons " ) is used to ensure that these Projects get delayed as much as possible !

Examine carefully and you will find that the more a Project gets delayed , the more that Contractor stands to gain ! Anyone believing otherwise , has got to be naive !

How ?

These contracts contain " Cost Escalation Clauses " which decide the extra / additional amounts payable to the Contractor , over and above the ( so called ) " Fixed Price " quoted at the time of tendering

Under these clauses , the Contractor is eligible to claim / demand extra payments , whenever

* SOMETHING HAPPENS

- costs of certain " Inputs " go up above a certain agreed level , eg :

# Prices of Raw Materials

# Prices of Water / Gas / Electricity

# Cost of Labor

# Foreign Exchange Rate

# Consumer Price Index

# Interest Rate

If any of these go up above certain agreed levels , the quoted price to go up by X/Y/Z amount , as per the Formula which determines the % age contribution of these elements , in the quoted price

* SOMETHING DOES NOT HAPPEN

# Environment Clearance for the Project

# Land acquisition and Handover to Contractor

# Hundreds of permissions from dozens of Govt Depts/Muni Corporations

# Issue of Import Licenses

# Release of Foreign Exchange

# Issue of NOC from umpteen departments

# Issue of Compliance Certificates from various departments

# Approval of Designs / Design Change Requests ( from Govt as well )

If any of these are NOT issued / given by certain " Dates " ( very easily managed ! ) , then the quoted price to go up by X / Y / Z amount

Invariably , these clauses are heavily tilted in favor of the Contractor

And equally invariably , colluding Government officers / bureaucrats / politicians , responsible for drafting / approving these " Clauses " , leave them vague !

This is apart from framing the Tender Specifications in such a manner that only a certain preferred bidder will qualify !

If you doubt what I have said , then just file a RTI application , asking for a copy of,

* Original Tender Document

* Final Contract

* Number of Price Revision Requests received / granted

for any project of your choice !

If Narendra Modi is keen to reduce corruption , he should start by instituting MODEL INFRASTRUCTURE PROJECT CONTRACT , which clearly spells out what price / time revisions can be granted and when

At the same time , internally , there must be a provision for DEMOTION / PENALTY for those officers who fail to give permissions / approvals / NOC etc, on specified dates ( milestones for the project )

* hemen parekh ( 07 July 2014 / Mumbai )

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Make Yourself Heard

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