Passline business magazine

T P Showkhath Ali

Shifting and Rededication function of Federal Bank, Thoppumpady branch being inaugurated by Prof K V Thomas , MP in the presence of Dominic Presentation MLA, Kunjachan K K , Councillor (Kochi Corporation), K I Varghese, CGM & Kerala Network Head, Federal Bank, Sunny N V, DGM & Zonal Head, Govindankutty P AGM & Regional Head and Jayakumar P, Branch Head.

Inauguration of PMI’s Regional Conference 2016 - Kochi (L to R) Raj Kalady, Raghunandan Menon, Commodore G Prakash, Vikram Kumar B T, Prasannaa Sampath, P Ramasubramaniam and Anu Francis John

Ashutosh Khajuria, Executive Director & CFO with the Banking Frontier’s Finnoviti 2016 Award, won by Federal Bank for Fedbook Selfie Account opening Mobile App. Also seen in the picture are V R Iyer (former CMD of Bank of India), Johnson K Jose (DGM (IT), (Federal Bank), Narendra Jadhav (noted economist, social scientist, writer and educationist), Babu and Manoj from Banking frontiers.

Minister for Culture K C Joseph launching new Department of Culture website, www.keralaculture.org. Also seen are Cultural Affairs Secretary Rani George and Director Santhosh Kumar.

Vinod Zutshi, Secretary – Tourism, Govt of India releasing the Kerala Travel Mart 2016 brochure at ITB Berlin (Internationale Tourismus-Börse Berlin) 2016. Abraham George, President, KTM Society is also seen in the picture.

KTM will be held in Kochi from Sep 28-30, 2016.

The Blood Donation camp organized by Federal Bank, Ernakulam Zone in association with IMA being inaugurated by Ernakulam District Collector M G Rajamanickam IAS. Also seen in picture are Antu Joseph, GM (Business & Products), Varghese K I, Chief General Manager & Kerala Network Head, Raju Hormis, Head - CSR, and Sunny N V, DGM & Zonal Head, Federal Bank.

Realty: transparency and

accountability the panacea ?

I

Editor & Publisher

Varghese Paul Kozhikode Vineeth Mukundan 8714986177 Chennai Augustine Joseph Ph: 09381000534 Bangalore Gireesh Gopal +91 7204560000 Adithya +91 9538060591 54, 2nd Main, Vyalikaval Bangalore - 560003 Manager-Marketing Sajan K 09895344485 Keethara Publications Pvt Ltd 38/125 1st Floor, Narakathara Road, Kochi-682 035, Kerala, India. www.passlinebusinessmagazine.com E-mail : passline.com@gmail.com

t has been a tedious task for almost four years to pass the longawaited the Real Estate (Registration and Development )Bill 2016 in Parliament. As the Rajya Sabha passed the Bill recently, people related to the industry become much optimistic about the future of the sector by anticipating that , it may bring hope to those who plan to buy a property in the country. Anyway, the passage of the Bill in itself is welcomed by all the stake holders by and large, though there are concerns about certain areas in it. Before we go in-depth about the merit and demerit of the Bill, let us analyse the Indian realty sector as such. Real estate sector is the second largest employer in the country, next only to agriculture and accounts for about 9 per cent of GDP and the construction sector supports 250 ancillary industries. There are over 76,000 real estate companies across the country and about two lakh people buy houses every year with an investment of about Rs 3.5 lakh crore. As per available information for 27 major cities including 15 capitals, 2,349 to 4,488 new housing projects were launched every year between 2011 and 2015. Hence, the passage of the bill assumes greater significance and it also brings in transparency into the sector that is largely unregulated.

But, of late, real estate companies are going through a lean patch. Stock prices of many of the listed companies have touched rock bottom due to lack of trust and confidence between the consumers and project developers,huge debt, cash crunch low off take and lack of financial discipline. Now, the sector is set to attract more FDIs. In this scenario we have to think that the delay in passage of the Bill was the only reason for the current plight of the sector. It is true that there are certain fly- by-night operators indulged in the process of easy money making in the sector by offering bogus projects and fake announcements. But real reason for the downfall attributed to Global micro and macro economical factors .

Globally realty sector has been reeling under pressure for quite long time. There are enough regulations and transparency in advanced countries. Still market is not picking up due to the slow demand, surplus supply and uncertainty in job security. Predominantly, Indian realty market is depending upon NRIs , particularly in Kerala. Due to the downfall of oil price the most of the Keralites working in Gulf region have been going through acute pressure and uncertainty about their job security. Most of them are expecting a huge exodus from the region in the very near future. The burgeoning IS issue also creates a jitter among the Malayalees who are working in the trouble prone areas.

These things must have adversely affected the realty sector in the State.

The point now under discussion is the retrospective effect of the Bill. It says all ongoing projects would come under the purview of the Bill. But it is a vague description as many projects will be at various stages of completion hence the applicability of the retrospective clause will be a bit difficult and cost consuming. The time taken to get environmental, stage-level and municipal – level clearances have affected developers for long. Without ensuring that the approval process is not delayed by civic agencies the regulator may inadvertently add another layer to the longer processes already delaying projects. Anyway, regulation and transparency are inevitable in the industry and it is a welcoming move but it should not be at the cost of the customers.

Varghese Paul

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SUCCESS STORY

March 31 - April 30, 2016

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The zenith of your innovative solutions

T P Showkhath Ali

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March 31 - April 30, 2016

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‘Technology has no barrier’ When I stepped into the industry elud-

ing all the pessimistic comments, all I had in my mind was the fervour towards my goal. The next best realization in life was the understanding of world as a different place for each individual. That insight had moved my mind and passion from the weak to the strong. We can reach every nook and corner of the world with the help of technology and research and accurate business strategy. But, still there are people and places where technology stays strange. We work with those who have not been familiar with and those who have already introduced to the technological enhancements to attain business growth through research, planning, strategy and execution. We had evolved business solutions for people from all levels through meticulous market research and planning.

Choosing a remote place for business will never let your opportunity for success down. Though the technology was in transition when I started, growing up such an IT company has been an amazing experience. I have gone through a market research and planned to assist micro and macro business people in creating the online hub that promotes their business growth.

We’re incredibly energized about the opportunity to renovate the way people and businesses work so that they can achieve their greatest aspirations. And I’m extremely grateful to the customers, Expose team, and industry peers who helped get Expose to where it is today.

We foresee better results and business growth through our service to people from all levels. Technology will no longer stay as a hurdle for your growth. Expose develops day by day along with the technological enhancements and are compatible to meet each and every requirements of our valued clients.

We take pride in that Expose could deliver solutions that drive business results.

Showkhath Ali and his company staff with Cine Director Siddique during the inauguration of the Kochi office at Kakkanad.

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March 31 - April 30, 2016

Synthesis of idea

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March 31 - April 30, 2016

Our vision

Being in the topline, we intend to put up the finest products of unparalleled quality and disseminate the brand value, whereby delivering solutions that drive business results from beginning to end.

Our mission

Our partnership empowers markets to utilize the new digital platform to forge targeted customers with our people and innovative technology to bring out the best result. Being loyal to our vision, we attempt to ensure the reach of our services to the wider market.

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8

PROJECT OPPORTUNITIES

March 31 - April 30, 2016

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Prof Job K T

Fig. 1: Details of Road Accidents in Kerala- 2014

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March 31 - April 30, 2016

The transplant sector which includes “MRITHASANJEEVANI� initiative along with the helicopter ambulance will convert Kerala into a medical hub for polytrauma and organ transplant even for other states.

Sl. No. Description 1 Initial Deposit

for Helicopter taken

on lease 2 Equipment like blood

pressure monitor,

ECG, saturation

monitor, respiratory

monitor, drip sets,

infusion pumps,

defibrillator and

ventilator support.

Aviation spirit, 3

medicines, oxygen,

uniform etc Direct employment 4

potential

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Requirement

Rs.1000.00 lakh

Rs. 50.00 lakh

Rs.200.00 lakh 10 persons

Sl. No. Particulars Cost (Rs in lakh) 1 Office building Lease 2 Helicopter Lease Deposit 1000.00 3 Equipment 50.00 4 Miscellaneous

fixed assets 10.00 5 Preliminary and pre-operative expenses 20.00 6 Working Capital (1st Year) 20.00 Total 1100.00

Amount Sl. No. Particulars ( Rs in lakh) Annual 1

Income 600.00 2 Cost of fuel,

salary, interest

on loan,

administrative

expenses etc.

400.00 3 Operating Profit 200.00 Breakeven point 50% 4 5 Pay Back Period 5.5 years 6 Internal Rate of Return 40%

10 DEBT

March 31 - April 30, 2016

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Era of financial vulnerability The crash in stock markets in China and around the world shows up how developing countries are increasingly vulnerable to financial events or shocks, including outflows of foreign funds.

By Martin Khor

T

he year 2016 started with a big bang, but the kind we would rather avoid. The Chinese stock market plunged for several days, causing panic around the world, with the markets also falling in many countries, East and West. This is another wake-up call to alert us that finance has become inter-connected, indeed much too inter-connected, globally.

Many developing countries have been drawn into the web of the global financial system in manifold ways, and that has made them more vulnerable to adverse developments and shocks. We are now in an era of financial vulnerability, which easily turns into vulnerability in the real economy of GDP growth, trade and jobs.

An immediate issue is whether the rout in China’s stock market will affect its real economy, in which case there will be serious effects. One view is that it would contribute to a “hard landing” as the Chinese economy already has many problems.

Another view, more realistic in my view, is that the spillover to the real economy will not be significant. A paper

by Brookings-Tsing¬hua Centre shows that the inter-connection between the stock market and the economy is limited in China.

In the United States, half the population own stocks and corporations rely heavily on funds raised in the stock market, but in China less than 7% of urban Chinese invest in the stock market and corporations rely much less than American companies on the stock market to raise funds.

Nevertheless, China’s economy is expected to slow down this year.

Other factors also add to a pessimistic outlook for developing countries.

These include continuing weak conditions in Europe and Japan that may offset the US’ more steady recovery; the expected interest rate rises in the US, which will draw portfolio funds out

from developing countries; and weakening of commodity prices.

Already many developing countries are suffering on the trade front. In Malaysia, exports in November 2015 grew only 6.3% from a year earlier. More worrisome, Malaysia’s industrial production, also in November, grew by only 1.8% from a year earlier. Other Asian countries fared worse. Korea’s exports for the whole of 2015 fell 8%. Taiwan’s exports are also expected to have fallen 10% last year and Singapore’s manufacturing sector declined 6% in the most recent quarter.

China’s exports in December fell 1.4% from a year earlier but imports fell more, by 7.6%, which is bad news for other countries as China has less demand for their exports. But of equal if not more concern is how, in the financial area, emerging economies have in new ways become more dependent and vulnerable in recent years.

Foreign presence in these countries’ domestic credit, bond, equity and property markets has reached unprecedented high levels, and thus new channels have emerged for the transmission of financial shocks from global boom-bust cycles, according to a South Centre paper by its chief economist Yilmaz Akyuz. (http:// www.southcentre.int/researchpaper-60-january-2015/) During a boom, there is a rush by yield-seeing investors to place their global funds in emerging economies. But when perceptions or conditions change, the same funds can exit quickly, often leaving acute problems and crises in their wake.

Malaysia is among the vulnerable countries. Firstly, the fall in the prices of oil (on Jan 12 reaching below US$30 a barrel) and other commodities has affected export earnings. The balance-of payments current account used to enjoy a huge surplus, but this has been shrinking.

In 2010–13 there were very high inflows of foreign funds into Malay¬sia, averaging over 10% of GDP. But by 2015 there was a sharp reversal, with foreign funds flowing out from the equity and bond markets.

Malaysia is vulnerable to large outflows as foreigners in recent years have built up a strong presence in the domestic bond

and equity markets. Foreign holdings of bonds (public and private) peaked at US$60 billion in July 2014. And the share of foreign holdings in the stock market was 23.5% at the end of 2014, indicating a foreign-holding value then of around $92 billion.

Many billions of ringgit of foreign-owned bond and equity funds have been leaving the country in the past couple of years, especially 2015. Due partly to this, Malaysia’s foreign reserves have fallen from $130 billion in September 2014 to $95.3billion at end-December 2015. Although the present reserves are adequate to cover imports and short-term external debt, they are also vulnerable to further outflows of foreign-owned funds in equity and bonds.

Debt held by Malaysians is also high compared to other countries, according to another paper by Akyuz. Debt by households was estimated at 86% of GDP in first quarter 2015 by Merrill Lynch. Public debt is near to 55% of GDP (compared to an average 40% for developing countries covered in a McKinsey report).

And corporate debt is estimated to be about 90–96% of GDP. The overall local debt is thus very high, probably ex-

ceeding 200% of GDP, one of the highest ratios among developing countries. Thus, the country has financial vulnerabilities at both the external and domestic fronts.

What the country faces is part of a trend among emerging economies that is likely to last for some time.

Many other countries are in far worse shape than Malaysia.

In a recent article, Martin Wolf of the Financial Times highlighted the important shift in perception by investors of the prospects for emerging economies, that has resulted in capital flowing out.

Global investors withdrew $52bil from emerging market equity and bond funds in the third quarter of 2015, the largest quarterly outflow on record. The most important reason for this is the realisation of the deteriorating performance of the emerging economies, according to Wolf.

Thus, developing countries are in for a tough time this year.

Of course the vulnerabilities may not translate into actual adverse effects, if global or local conditions improve. But it is better to prepare for the probable difficulties ahead.

– Third World Network Features. ( Martin Khor (director@southcen tre.org) is executive director of the South Centre.) 

11 FINANCE

Passline News Service

March 31 - April 30, 2016

P Joy Oommen

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Review

March 31 - April 30, 2016

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An imaginative budget in difficult times

V K Vijayakumar

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As for corporate taxation, the government has not kept its word to bring down the tax rate to 25 % in four years. Instead of reducing the corporate tax rate, the finance minister has proposed a new corporate tax rate of 25 % for new manufacturing companies.

March 31 - April 30, 2016

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14

BUDGET

March 31 - April 30, 2016

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Secret manoeuvrings behind Budget

PASSLINE NEWS SERNICE

T

he world’s largest democratic country – India—is presenting its annual budget preferably in February every year by the finance minister. The budget will have the proposals , amendments and the indications for the whole year stating in which direction the country has to move economically, socially and politically.

The finance minister pronounces sops and props to please the vote banks in the states and Union territories as well. The budge also reflects the policy of the ruling political party at the Centre.

But an average citizen of the country does not know who all are engaged in this massive task, where and when the budget will start printing and what are the measures taken by the particular government in power to maintain the secrecy of the document.

The epic centre of budget preparations is the North Block, which houses the Ministry of Finance headed by finance minister. A few selected senior officials will engage in the preparation of India’s most confidential government document, during which common folk, or the aam aadmi, cannot enter the building which has turned into a veritable highsecurity zone. Files marked ‘Top Secret’ are being enclosed in envelope and then carried to and fro by joint secretaries in the ministry. The person who is coordinating this massive exercise is none other than the finance minister of the country.

It is not an easy task to maintain the budgetary secrecy, but this is how it is done. Each entry point to North Block is manned by Central Reserve Police Force personnel and visitors are closely watched by close circuit cameras and sub-

ject to physical search. Entry is possible only on production of special photo ID passes that are issued under the signature of officers above the rank of deputy secretary to the Government of India.

Naturally, the entry of media-persons is strictly banned. Liaison officials from corporate houses are also blocked at the main gate itself. Around-the-clock vigil is kept in the first floor corridors, where the office of the finance minister is functioning. Sleuths of the Intelligence Bureau maintain a constant surveillance of the computers that are used in the finance ministry. All internet connections will be disconnected, and the disabled account details are registered in a log book.

Pen drives and Bluetooth devices are not permitted into the North Block. A scanner manned by IB personnel is kept at the four entry and exit points to ensure no external materials are smuggled inside. Mobile phone jammers are installed four or five weeks before the D-day.

There are people numbered a dozen are directly involved the budget preparations. The first and foremost among them is finance secretary then the secretary of economic affairs followed by revenue secretary , secretary of financial services, secretary on disinvestment, chairman of

Central Board of Direct Taxes and chairman of Central Board of Excise and Customs. The last five are assisted by two joint secretaries.

Budget papers running into hundreds of pages are printed at the Government Press, located underground below North Block. To ensure there’s no leakage from there, IB has stationed three senior officials at the printing press.

The printing is done in such a manner that even press employees many not be able to decipher what was being printed. Not only that, even officials from one division of the finance ministry won’t be able to meet employees of other department employees as the underground path is constructed in such a way as to preclude just such a possibility.

Quarantine of employees will start a week before the budget.

From this date on there will be no exiting the printing press, and the big iron door at the main entrance will remain sealed till the Budget is presented. Any papers going into the printing press will have to be handed over in a sealed trunk. Every year the finance minister hosts a halwa party to all finance ministry officials to cheer up the team.

Printing of the Budget papers this year commenced from February 22 onward. First, 2500 copies of

the Economic Survey were printed and bound. Next come 2500 copies of the demands and grants of various ministries. Finally, in the evening of February 27, the 2500 copies of Budget speech and Budgetary grants were printed, and bound by February 28.

Highly-trained sniffer dogs are brought to the entry point of the quarantined printing press area to escort the Budget papers. The sniffer dogs, earlier deployed at Parliament’s entry point, were shifted to the printing press in order to save time. Four lorries of CRPF personnel, with a commandant each, would escort the Budget papers once they are despatched from the printing press.

The time chosen has no astrological significance. The Union Cabinet will meet in Parliament House at 10 hours, before which the Budget papers will have to be delivered at the building’s despatch section. Fifty highly-trained police personnel will take the Budget bundles into the Parliament section, and will guard the sealed gunny bags containing the Budget papers till such time, say, 10.55 hours, as the finance minister enters the Lok Sabha along with the prime minister.

The preparation of the Union Budget may be tough task, but maintaining the document’s secrecy and security is the ultimate challenge.

And that is entrusted to Director of the Intelligence Bureau assisted by joint directors of the IB . He is responsible for the safety and security of the Union Budget papers.

The director keeps track of each and every page of the Budget after they are printed and before their submission to Parliament. The director also visits the printing press very often to boost the morale of his subordinates. 

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March 31 - April 30, 2016

Budget 2016: How the tax proposals affect aam aadmi and India Inc

T

he finance minister, while presenting his annual Budget speech, ended on a positive note with a declaration that the government will incur a revenue gain of Rs 19,600 crore in the Union Budget 2016 proposals. Decoding the revenue gain numbers, the Budget proposals listed offer the government a revenue loss of Rs 1,060 crore through direct tax proposals and a Rs 20,670 crore revenue gain through various indirect tax proposals.

Here is a microscopic view of all tax-related proposals and an indepth analysis of how taxation aspects pan out for the common man and the corporate world.

Direct Taxes Relief for small taxpayers under Section 87A: The Budget 201617 has placed emphasis on the rural population, on those living under poverty line, and the small taxpayers. For those having an income of up to Rs 5 lakh, there is good news, as the maximum ceiling under Section 87A has been increased from Rs 2000 to Rs 5000. Translated, it means an additional tax advantage of Rs 3000 for those who fall in the 10 per cent tax bracket.

15 per cent Surcharge for the

ultra-rich: It is often expected of the rich to pay more tax than the poor and the middle class, which constitute the majority of Indian tax payers. As a small but significant step in this direction, the Finance Minister has introduced a 15 per cent surcharge that will be levied on income tax for those individuals having an annual income of more than Rs 1 crore.

Increase in HRA deductions: With rental prices rising pan India in recent times, the Rs 24,000 tax deduction under Section 88G had proved insufficient in providing any substantial tax benefits. The Finance Minister has increased the tax rebate on housing rent to Rs 60,000 per annum. Consequently, if you are in the 10 per cent tax bracket, you can avail an additional tax savings of Rs 3,600. The increase in tax deduction takes into account the rising rental prices across India in both urban and semi urban centers, which will bring some relief towards the salaried class who are staying on rent and do not own a house.

NPS withdrawal taxation exemptions: The vast majority of India still does not have sufficient pension investments. The government’s move to make NPS a

popular pension instrument during the previous Budget had not been lapped up by the masses as was expected, as it came tagged with taxation on corpus available upon withdrawal.

The Finance Minister has made an announcement in this Budget to make the NPS corpus available for withdrawal tax-free up to 40 per cent of the total corpus.

Hence, an investor having a Rs 10 Lakh corpus in NPS will realize a tax savings of Rs 40,000 upon withdrawal, as compared to status quo currently.

Additional tax relief for firsttime home buyers: If you are a first-time home buyer looking to buy a residential property under Rs 50 lakh by availing a loan of less than 35 lakh, you will get an additional tax exemption of Rs 50,000 on interest repayment.

These exemptions are over and above the Rs 2 lakh benefit for interest repayment under Section 24 and Rs 1.5 lakh for repayment of principle amount under Section 80C. Reduction in LTCG timeline: Another major tax incentive in the Budget has been the announcement to reduce the period of long term capital gains tax for shares of unlisted companies. The time-

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line has been reduced from the current level of 3 years to 2 years The move is likely to help investors like private equity funds and other retail investors looking at exit options from their investments in such companies.

Dividend taxation: A dividend tax has been announced for high net worth investors, which will be applied at 10 per cent for persons and HUFs receiving dividend more than Rs 10 lakh. This dividend tax is in addition to the 28.84 per cent that the company already pays on its generated income.

Indirect Taxes • Introduction of Krishi Kalyan Cess: If Swach Bharat was the talk of the town in the previous Budget, now it is the turn of the Krishi Kalyan cess. The finance ministry has introduced a Krishi Kalyan cess to the tune of 0.5 per cent, which will be applied on all taxable services. This increases service tax from its current rate of 14.5 per cent to 15 per cent. This is prone to denting the common man’s pocket while paying for services, hotel bills, insurance premiums, telephone bills, and every allied utility services.

Corporate Taxes • More SMEs under presumptive taxation method: The one big tax-related hassle for SMEs was to keep its statement of accounts and audited reports updated. To ensure ease of doing business, the finance ministry has allowed all SMEs with a turnover of up to Rs 2 crore to use presumptive income method for tax calculation. This is an increase from the Rs 1 crore turnover limit as applicable earlier.

Now, all SMEs with turnover up to Rs 2 crore can pay tax at 8 per cent profit assumptions under Section 44AD. • Lower corporate tax for small businesses: Other small business entities have also found favour from the Finance Minister as the corporate income tax rate for the financial year 2017 for all relatively small enterprises with a turnover of less than Rs 5 crore is now limited to 29 per cent plus cess.

With a focus on direct, indirect, and corporate tax structures, the Budget 2016-17 offers a balanced taxation structure with adequate measures for both corporate world and the common man.

16 Management

March 31 - April 30, 2016

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SOME REAL COSTS OF THE TPP Loss jobs, lower incomes and rising inequality

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18 BUSTERS

March 31 - April 30, 2016

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Turbulence can not kill King of Good Time’s appetite for fun

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March 31 - April 30, 2016

Mallya with son Siddhartha

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20

GUIDANCE

March 31 - April 30, 2016

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CAREERS GALORE

Prof(Dr.) KEMTHOSE P PAUL (Vice Principal, SNGCE)

A

s a graduate gets all set to jump into the conclusion that a Masters in Business Administration (MBA) is the right path for you, stop and ask yourself why. The hunky dory vision of life after MBA may not be so easy after all. Not every management graduate receives a royal welcome. One must have one’s goal in place to be able to establish a solid and successful career after an MBA.

In this fast world of technological advances, there is unprecedented competition in the marketplace.

The need to understand consumer desires and cater to them has become the norm for existence and survival in business. Thus, the necessity for enterprising managers with a global vision arises. Management education has received a great boost in the post-globalisation era. Premier institutes have descended upon the scenario with programmes aimed at carving out well-rounded personalities who can confidently walk through the portals of the corporate world MBA (Master of Business Administration) degree is probably the worlds best known and most widely recognized post graduate degree. It is a professional degree – in that it is intended for those who work in business and management i.e., the intention of a program leading to an MBA is to prepare or further prepare individuals for responsible positions in business – usually managerial positions. MBA programs are run throughout the world, as they are seen to be relevant

for the preparation of people for work in management irrespective of the industry, business sector, the nature of the economy, etc.

In fact the degree is a bit of a misnomer. For most people this is a management degree, and it is not only relevant and of value to those in ‘business’ – as normally defined – but also those in government, the public sector etc. The MBA degree title has always been used in the USA – where it was first developed, but not always in other countries. In the UK for example – where Post Graduate degree level management education only began to develop from the late 1960s the title was not initially used. For example the main schools at that time used the MSc and MA degree titles. From around 1980 however most established programs around the world had adopted the MBA title. There are of course programs which look very much like what other Schools would call an MBA – which still lead to degrees with other titles. Such titles include MBL (Master of Business Leadership – predominantly in South Africa), MBS (Master of

Business Studies), MSc and MA as well as more specialist degrees e.g., Master of Finance. Often such programs are seeking deliberately to differentiate themselves from other programs

Why to do an MBA?

Hey It’s your future! Being equipped to handle the opportunities and threats of today’s dynamic business environment has never been more important. New products, new markets, off-shore resourcing, mergers, and new technologies all create uncertainty and opportunity.

An MBA helps position you to take advantage of the opportunities and protects you from the threats. A Master of Business Administration provides you with a broad view of the functional areas of business.

Empowered with an MBA degree one can develop a career in a range of fields. One can opt for a variety of career options after MBA in India. Career opportunities after MBA include in the fields of human resource management, operations management, strategic management, international management, and organisational communication etc. Career advancement, management expertise and increased earn

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March 31 - April 30, 2016

AFTER MBA ings are perhaps the most common reasons given for pursuing an MBA. An MBA can help you make major break or leap in your career path with a concomitant leap in income.

After liberalization Indian market has opened several new opportunities to management students.

After rapid expansion of Industries, India has also opened new vistas for excellent opportunities for careers in management. New Economic Policy of liberalisation has increased the demand for managerial personnel in the corporate world.

Industry insiders feels that the demand for managerial personnel in specialist fields like Finance, Production, Marketing, Personnel and Administration will further increase rapidly in the coming years. The corporate in their accelerated drive for all-important competitive edge believe that management graduates with their macro vision and analytical bent of mind can deliver more than others in the fast changing world of business. Now MBA as a three-letter qualification has become almost mandatory for entry into and future advancement in a wide range of industries. Top companies-multinationals, foreign banks, financial institutions, public sector undertakings, in effect the whole corporate sector – offer bright opportunities to management graduates. The careers in management offer one of the best remuneration packages and perks everywhere. Private sector today offers rapid advancement to result-oriente d professionals.

Excellent perks are offered which may include free accommodation, free conveyance / attractive allowances, CPF, leave travel concession, medical allowance /reimbursement etc.

For those who take up self employment or who become employment generators as entrepreneurs – MBA or equivalent qualifications provide handful of necessary inputs for achieving successful entrepreneurial

aims.

Career after MBA in IT industry Following are some of the job options for MBAs in IT companies: 1. Business Analyst: You act as an Interface between the customer and the delivery team.

You are expected understand the business processes and the exact customer requirements and document them properly in a format that the delivery team (developers) understands. For being an effective BA, you should have knowledge of things like UML, RUP, Rational Rose etc. in addition to having a good domain knowledge. Experienced BAs become good IT Consultants.

2. Pre-Sales: Here you do things like responding to RFIs, RFPs and preparing client-specific presentations. Similar profile is that of a Business Development Manager.

3. ERP Consultant: You are responsible for understanding the business processes of your customers and implementing packaged ERP software (like SAP) after making the necessary customizations.

4. Project Manager: Project Managers are involved in a project right from the stage of requirements gathering. They are required to do Planning, Estimation, Resource (People, Hardware, Software etc.) and time management. Tools like MS Project are heavily used by PMs. 5. HR Manager: Not much work Kidding Responsible for Recruitment, Appraisal, Employee retention, Career planning, Trainings etc.

6.

Quality/Testing Manager: Suitable for people with testing/QA kind of background.

Once you know why you want an MBA degree, you should be pre-

pared with a knowledge base of jobs that require this degree.

Based on that, you may nurture your career interest. Client relations, consulting, business planning, resource or system analysis may be a part of your job profile, but let’s take a more specific view of some other job opportunities after an MBA.

1.

Banking

&

Finance:

This includes security & investment analysis and portfolio management. These jobs, available with banks, security firms, insurance companies, and various financial organizations, require a professional to make right choices about investments. Related job profiles are in Corporate Treasury, Business Operations and Credit Analysis. Such jobs are typically offered by companies such as Goldman Sachs, J.P. Morgan, Nomura, RBS, Barclays etc.

Other job opportunities in banks are for Commercial Banking, Liabilities Product Management, Cards Management, Transaction Banking, Corporate Banking, Compliance, Wholesale Risk, Credit Risk, Relationship Management and Treasury. Banks like ICICI Bank, Yes Bank, Kotak Bank, Axis Bank, State Bank of India, HDFC Bank and RBL hire MBA graduates for such roles.

2.

Information System Management: This requires a

more technology-focused candidate, day someone with an MBA in Information Systems. Such candidates identify fresh and upto-date technologies to serve an organization better. They provide a thorough cost analysis for use of the right

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technology while working with financial and managerial departments.

3.

Investment

Banking:

This is a job in demand. Companies that hire for this role include SBI Capital Markets, Motilal Oswal & Bank of America Continuum among many others. The right candidate functions as an underwriter.

He/she has to connect investors to fund-needing organizations. The candidate must have the acumen to analyze what fits best for the client. They deal with acquisitions and mergers as well as clients.

Other job profiles include those in Treasury, Securities and Investment Management.

These being the top three options, there are more job opportunities for an MBA graduate: Management Consulting: If you are a problem solver, this is the job that suits you best. A management consultant specifically solves organizational issues, while embracing fresh ideas and new methods of problem-solving. Firms that hire for such roles include Cognizant Business Consulting, Bain (BCC), KPMG, PwC, Infosys Management Consulting, Michael Page, Deloitte, People Strong, Cartesian Consulting & many more.

Private Equity: Just like investment banking, your investment acumen comes into action in a private equity job profile. Companies that recruit are Religare, Magma Fincorp, DE Shaw, Indiabulls Housing Finance, Kotak Life, Angel Broking, ICICI Prudential Asset Management, Bajaj Finserv, Kotak Wealth Management, JPMorgan Chase, Axis Securities, Fidelity Investments, Fullerton etc.

Data analytics: With the digital revolution, making sense out of “big data” is becoming increasingly important for all kinds of businesses be it banking, retail, e-commerce or management.

As a result many business schools have now started offering data analytics as an important part of their MBA programs.

Companies like Fractal Analytics, Latent View Analytics hire MBA graduates as data scientists or data analysts.

Entrepreneurship: An MBA enhances your ability to be an entrepreneur. Be a fresh graduate

22 or an experienced professional, choosing your career becomes easy with an MBA in your kitty.

However, most of the MBA grads prefer to opt for a career in Marketing as studies point out. A study among MBA graduates from second and third level Bschools (B schools other than IITs and IIMs) carried out by a team of IIM A graduates as part of a Marketing research study in 2014 has pointed out that as many as 56% of the total graduates of such schools prefer to star their career in Marketing.

It pointed out that they feel there is an excellent career awaiting those who have completed their Masters degree in Marketing Management. It is a much sought after degree in the employment world. Those people with this degree especially those from reputed institutes land plum jobs in top companies in India and Abroad. Usually there is a lot of competition to get into Top BSchools in India and abroad.

Career in private sector after MBA Marketing

Those with MBA marketing from reputed institutes get to choose the company, they wish to work with. There is no scarcity of jobs also. Top private sector companies like Reliance, Tata, Airtel give them positions in the senior management cadre with excellent Salaries and perks. The private sector is the most sought after sector with these MBA Graduates. The marketing field is also very diverse, catering to different verticals in the Industry such as Manufacturing, Retail, Engineering, Telecommunications, Power and Real estate. All these private sector companies provide excellent growth opportunities for MBA graduates.

Career in Government sector after MBA Marketing

There are huge opportunities for MBA marketing people in the government sector too, especially in banks and Public sector businesses. One can also become a teacher in different government MBA Colleges. And for those people who wish to work for Navratnas or the giant PSUs, they have to clear a written test. Once selected, they are given good career opportunities in these PSU’s, apart from an attractive salary structure. Apart from this, there are other options like the Civil services, state services and research fellowship programmes like JRF (Junior research fellowship) which are all sponsored by the government.

PSU’s like BHEL (Bharat Heavy Electricals Limited), NTPC (National Thermal power corpora-

March 31 - April 30, 2016

tions) and ONGC (Oil and natural gas corporation) conduct an annual entrance exam for recruiting MBA marketing graduates.

Career abroad after MBA Marketing

After MBA marketing, one can directly post resume into various MNC’s websites. From there if a candidate is suitable, the person maybe called for an interview and given a job posting abroad.

There are many areas a person may wish to apply to get a job in any foreign company.

Long term career path after MBA Marketing.

There are many areas into which a person having done MBA Marketing can branch into. Many senior management positions are exclusively designated for people with MBA Marketing degrees.

Usually the CEO /MD or the Vice –president are people from Marketing backgrounds. Usually one or more Directors on board are also specialized in Marketing.

And finally in HR specialisation Most of the organizations will have an administration department for implementing different schemes to manage their employees. Professionals are needed in this department to implement these methods. Thus the MBA graduates in Human Resource Management can find wide range of opportunities in public and private sector.

Career in Private sector after MBA in HRM

Candidates having MBA in Human Resource Management can find lucrative opportunities in private companies. They can work as HR Manager in these companies and manage the employees belonging to that company. Another job profile available for them is the Talent Acquisition Manager who recruits eligible candidates to the concerned company. Private Banks also recruit MBA graduates in Human Resource Department to the post of Assistant Manager and Manager in HR department.

Some of the reputed banks which recruit these graduates into their various branches are ICICI Bank, HDFC Bank, Axis Bank and several others.

Career in Government Sector after MBA in HRM Those who are looking for a career in the Government Sector after MBA in Human Resource Management can join many public sector undertakings as management trainees.in

some of the public sector organizations Steel Authority of India Limited (SAIL), National Thermal Power Corporation (NTPC), Bharat Heavy Electricals Limited (BHEL), Food Corporation of India (FCI). MBA graduates in Human Resource Management can also work in the administration department of Bharat Sanchar Nigam Limited (BSNL). There are also many opportunities available for these graduates in HLL Lifecare Limited, Centre for Development of Advance Computing (CDAC) and Delhi Metro Rail Corporation. They can join any public sector banks after qualifying the IBPS exam.

Career Abroad after MBA in HRM Those who are looking for a career in foreign country after MBA in Human Resource Management can find many opportunities in accounting firms and consulting companies. But they should have adequate experience in the concerned field so as to know about the working methodology and tools used in these firms. Engineering organizations in foreign countries also offer management related jobs for theses graduates, if they possess experience in this field. Leading companies also offer management jobs for these graduates apart from consulting and senior executive jobs. They can also work in various publication companies and electronic media as managers.

Most companies are looking for people with senior management potential. In their view, MBA graduates have an above-average chance of fulfilling this need, but they are careful not to raise expectations too high. They also want people who can be effective quite rapidly. The many MBA students wanting to change career direction can therefore have difficulties in the short term, whatever their long-term potential. An engineer trying to move over to finance may be successful, but may be restricted to a job as a financial analyst specialising in the engineering sector.

Compared to other post graduate programmes, MBA is of late looked at as a promising option.

Rather intriguingly, most of the naïve ones who are just out of the

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not-so-serious undergraduate programs tend to view MBA as just another rung in the career ladder that can act as a ‘job-fetcher’ and simply dream it to act as a springboard in propelling them to rosy careers, with no additional inputs or extra efforts required. Especially, the bookworms who have the habit of flaunting their impressive scorecards view their academic achievements as the ‘sole criterion’ to take them high. But unfortunately, they are the ones who lose track of their vision, falter just before the goal post and finally end up in some mundane jobs that do not require an MBA at all.

With jobs available on a platter on one side and the number of ‘unemployable’ students settling for something less on the other clearly throws light on the demand-supply mismatch. More so, this bears testimony to a different form of ‘brain drain’. While the corporate sector expects the budding managers and technocrats to be equipped with the right aptitude, a positive attitude, soft skills and cogent communication, the academically-strong candidates carve out an area for their operations and get ensconced in it.

In other words, they seldom leave the ‘comfort zone’ to venture into the ‘challenge zone’.

While bookish knowledge does not offer any great solace to ‘up’ a sagging career, one’s positive outlook does. “MBAs/ are required to deal with real time situations with their inter-personal relations, time management and worker dynamics. When one goes up the career ladder, higher the rung, more will be the responsibility and the pressure of time. The time for personal and family life will have to be prudently balanced, or else they will crumble under pressure,” says Dr. Biju Varkkey, Professor of HR in IIM A. While positive outlook is not an inborn quality, it can be developed and practiced by the candidates for a pragmatic approach to life and work.

“Students have the tendency to take English and communication skills lightly, thinking that they can learn them after completing the course, which is not correct. The MBA courses are not teaching-oriented, but are training-oriented”, Dr. Varkkey adds. He appeals to the students to constantly update their knowledge on contemporary issues in the business world by going through business dailies, magazines and journals, participating in conferences and management meets.

Hence the key suggestion is: Exhibit not your scorecard, but your attitude towards life!

(EOM) l

23

ASIeT

March 31 - April 30, 2016

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STrIve FOr gLOBAL STANdArdS; deePLY rOOTed IN vALUeS

E

ducation today is more of a business in our society .When Kerala is witnessing a number of engineering colleges mushrooming in every nook and corner of the state to proliferate personal business, ADI SHANKARA INSTITUTE OF ENGINEERING AND TECHNOLOGY (ASIET) at Kalady stands apart in its mission. ADI SHANKARA is among the first self financed engineering colleges in Kerala, established in 2001, with an aim of providing value added technical education with flair of professional excellence and ethical values under the benign blessings of Sree Sree Bharathi Theertha Mahaswamigal. The institute is headed by one of its co-founders and Chairman Dr B S Krishnan and Sri K Anand, Managing Trustee with a proactive approach for the overall development of the institution. An expert in electronics and a man of vast experience and administration Dr S G Iyer and Dr Neelakantan P C, an academician par excellence are the noble figures sitting at the helm of this prestigious institution.

student chapters in like IEEE, SAE, IEI, IETE, IAS, SPS, CSI that encourages the student to come out of their comfort zone and think beyond the realms of their text books.

The institute keeps an unorthodox approach towards engineering education, where not only academics but the extra curricula’s are also given equal importance. Seminars conferences, cultural and technical events are a part of day-to day activities of ASIET. BRAHMA - The TechnoCultural Inter Collegiate Festival organized every year is nothing short of a festival. Adi Shankara has also initiated many programs that help the underprivileged in ASIET is now in its 15th year of the society. ‘Vidyuth’-providing successful service in engineering electricity to houses, ‘Punarjani’education. In the short span of organ donation awareness proits existence it has moved swiftly gram are to name a few. ahead to carve a niche for itself.

Research at ASIET has always Through industry oriented and been considered as a priority courses of high demand, the colas the institution feels that with lege provides an exposure to the the help of research most of the enchanting world of technology. problems of an industry can be The exemplary advantage that solved. With this mind “SHREIS”, the college provides to its stuthe research centre was inaugudents is that of making them rated by Dr. A P J Abdul Kalaam industry ready and bridging the in 2010.The state of the art ingap between them and their frastructure and other excellent dreams. With assistance from facilities is a utopia for students MOU’s signed with various global and faculty members who wish experts like SAP Education Partto pursue research. Following ner, Infosys Campus Connect, the impressive run at producing TCS Campus Commune, Global quality graduates indusIncubation Centries have set up reters like Start-up search oriented proVillage etc the ingrams and start up boot stitution also ofcamp inside the college fers exposure and campus. creative space to Apart from the variits students by ous B.Tech programs supporting their Adi Shankara Business ideas and nurSchool offers specialturing them into ization in Marketing entrepreneurial Management, Human enterprises. The Resource Management, institute also enFinancial Management courages various Dr S G Iyer

and International Business. The institute also offers non credit papers in contemporary areas of management like logistics, entrepreneurship management etc.

ASIET leaps forward with highly motivated personnel who are interested to make landmark changes in the educational sectors and create socially responsible professionals. With placement record of 75%, the institution witnesses a heavy inflow of students The recruitment session of 2016 pass outs commenced in the month of Oct 2015with the campus recruitment drive of TCS followed by UST Global, IBS, IBM, Experion, Reliance Communication, Metler Toledo, Kaltech Energy, SAP, Mindtree, American Mega trends, ESKO Graphics, Gemini communication, Spectrum, Sutherland Global Services, Theory Y Technologies, Pivot, Urban Restro. As per the statistics the total number of offers has crossed over the figure 200.

The upcoming recruitment event indicate the drives of reputed biomedical company like Wipro-GE, Telenova, leading Android companies such as Technomobs,2base technologies, Torus technology, Dexlock, Ideamine, Hexame , leading MNC in petroleum industry, Royal enfield, Xtend technologies etc. from in and around Kerala.

Adi Shankara Business School hosted the campus drive of reputed companies like KPMG, ICICI securities, Spectrum, Kaltech Energy, Reliance communication, Indian cements, HDFC Bank to the various post of managerial/Business development executives.

The upcoming drives to the MBA department are LULU supermarket, Federal Bank, Ideamine, Placewell HRD, Reliance Retail, Indian money market.com, Choppies supermarket chain, Indian Cements, Coir-on etc. l

24

edUcATION

March 31 - April 30, 2016

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FISAT Business School Offers courses the generation wants F

ISAT Business School (FBS), established and managed by the Federal Bank Officers’ Association Educational Society (FBOAES), is a management institution affiliated to APJ Abdul Kalam University and approved by AICTE. FBOAES, formed with the aim of establishing a Center of Excellence for professional education, is an initiative of the Federal Bank Officers’ Association (FBOA), the sole representative body of the entire officers in the Federal Bank. The institution is a Member of Kerala Management Association (KMA), National Institute of Personnel Management (NIPM) and Confederation of Indian Industry (CII).

The Course

The MBA programme offered by FBS strives to equip its students with all the necessary knowledge, theoretical as well as practical, which can benefit them tremendously in managerial and administrative jobs. The challenges imposed by the 21st-century place a high premium on upgrading skills and qualifications in order to meet the demands set by companies, customers and the environment that managers operate in. The MBA programme of the century is in a state of perpetual change - continually adding value through creativity, knowledge, innovation and learning for the benefit of our future business leaders. It has become one of the most sought- after qualifications in today’s corporate world as a prerequisite to most top management positions. This gives the MBA degree a global appeal.

MBA programme includes specialisation in Finance, Marketing, Human Resource Management, Information System, Production and Operations Management and International Business.

Unique Courses FBS has set up a centre for Local Government and Resources Management (CLGRM) which aims at establishing a strong and healthy link between FBS and lo-

cal governments in Kerala. The institution has set up a Project, Research & Consultancy House (PREACH) to plan and organise externally aided research and project activities. A Centre for Entrepreneurial Development and Small Enterprises Management (CEDEM) has also been set up for advance studies and action research in the areas of local entrepreneurship.

The extra edge

Apart from the regular course, several other training programmes, seminars, workshops and discussions happen at the campus on a regular basis. Advanced Microsoft office skills training is a practical oriented course done at the campus that enables management students to enhance their MS office skills through hands-on experience on various tools.

SPSS essentials training

The institution offers its students an opportunity to acquire, optimise their skill sets and get hands-on experience in survey research, data input, analysis and presentation using one the popular statistical package for social sciences (SPSS).

SAP learning hub programme

As part of imparting cutting edge IT skills for the management students, FBS has recently introduced SAP learning hub training programme for the students. It is much sought-after certification programme in the country that brings the power and convenience of the Cloud to SAP learning.

Placement

Today brand FBS evokes recognition and respect among professional institutions in south India. Intelligence, drive, ambition, leadership, a sense of purpose, adaptability to change - qualities which one look before hiring a

talent-- are precisely the qualities the institute looks for in the students it selects. FBS believes that it is the combination of its students and its faculty, the academic rigour and all round development, comprehensive curriculum and the course delivery method that makes it the institute of choice for international and domestic recruiters. Fiftynine companies came for placements at FBS in the year 2015-16 and 70 per cent of the students were placed in various roles ranging from sales executives to business analysts and probationary officers. The pay package ranges from Rs. 2.25 lakh to Rs. 5 lakh per annum. The firms include Royal Bank of Scotland, Federal Bank, HCL, Indian Institute of Logistics, Asian Paints, Bajaj Capital, HDFC Bank, GOA Institute of Communication, KPMG, ICICI Bank and Eastern Condiments.

South Indian Bank, Airtel, Vodafone, Berger, etc., are also regular recruiters from the campus.

The management team

Paul Mundadan is the Chairman of the governing body of the col-

lege. He is the Secretary of Federal Bank Officers’ Association Educational Society (FBOAES) as well as the General Secretary of Federal Bank Officers’ Association (FBOA). Anthony Johnson is the Vice Chairman of the governing body of the college. He is the President of the Federal Bank Officers’ Association Educational Society (FBOAES) as well as the President of Federal Bank Officers’ Association (FBOA). P I Bose is the Treasurer of the governing body of the college. He is the Treasurer of Federal Bank Officers’ Association Educational Society (FBOAES) as well as the Treasurer of FBOA. The way forward FBS is in the process of acquiring more built-up area and infrastructure for meeting the growing requirements. The NBA and NAAC accreditation process are progressing fast. The institution is looking forward to having greater industryinstitution tie-ups for the benefit of their students, technology and skill development. There are also plans of making a full-fledged research centre, facilitate startup initiatives, implementation of student projects and the establishment of Science Park including the planetarium.

Education can no longer remain as a one-dimensional transfer of information in the classroom from teacher to students. When the industry and business demand more diversified skills and right attitude it has to be more experiential and inspiring and a multi-dimensional process which needs to be continuously tuned and fine-tuned to keep up quality and relevance to the needs of society. FISAT through its innovative teaching methods and efficient faculty does just that. .“At FISAT education is about creating an ideal and perfect platform for students to realise their dreams, hone their cognition, sharpen their competence and carve out a wholesome personality. And this noble task is effectively carried out by our accomplished team of teachers, who are working most diligently towards synergising theoretical knowledge and practical skills to promote allround professional competence of genNext managers.” l

25 LOAN TIPS

March 31 - April 30, 2016

PASSLINE

Is it wise to prepay your home loan?

Passline News Service

J

ust in case you have surplus funds and are thinking about it, here are some pros and cons you must know‌ When Arun and Leena applied for their home loan, Leena had remarked that they would try and repay their loan as soon as possible by using whatever surplus they have and Arun had disagreed saying that it was not a good idea to prepay a loan. So who do you agree with: Arun or Leena?

Is it a prudent choice to use surplus funds to prepay your home loan?

Prepaying your home loan: The negatives

Just like when you take a loan, you as a borrower plan ahead.

Similarly, the lenders also plan and work on the assumption that a loan will run for a fixed number of years. Thus if the borrower prepays the loan it upsets the bank’s projections and reduces or stops the stream of interest income. Lenders therefore try and dissuade borrowers from prepaying a loan.

These can be in the form of a prepayment penalty clause (this is now being done by almost all banks) or in the form of very stringent laid down procedure for prepayment. The interest repaid on a loan is eligible for deduction under Section 24(b) up to Rs 1.5 lakh per annum in case of self occupied house. Relief is also available under Section 80EE to home loan borrowers.

By prepaying the loan you could end up losing these tax benefits and depending on the remaining loan tenure this could be a huge loss if considered in totality. If you plan to make a partial prepayment and there is no impact on the tax eligibility (the interest and principal that you repay is still above the available limits for tax deduction) then you could consider prepaying a loan after keeping other factors in mind.

Keeping something aside for emergencies is always advisable. With growing income and increasing liabilities the size of the contingency fund should also grow. So keep that in mind; do not prepay a loan at the cost of keeping sufficient funds for emergency with you. In case of an unforeseen event like loss of income etc, EMIs still have to be

paid and having sufficient liquid funds is important. Home loans are usually less expensive than other loans; so if you have surplus funds explore the option of repaying other expensive loans (if any) provided these loans do not have a very high prepayment cost involved.

Prepaying your home loan: The positives

Before deciding whether or not to use the surplus funds to prepay your home loan compare it with the alternative uses you could put the funds to. One could use the funds for investing in options like fixed deposits, PPF or NSC etc.

The returns on such investments are usually in the range of 8.5 per cent to 9 per cent which may attract tax, thus making the actual post tax returns lower. Compare this with the interest rate you are paying on the home loan which would be anywhere in the range of 10 per cent to 12 per cent.

Thus if by prepaying your home loan you end up saving more than what you could have earned by investing that amount then it makes financial sense to prepay a loan rather than invest the money elsewhere. However if you are seeking to invest in market linked options and are confident

that you can get more returns (then what you are paying) then this option might not be for you.

If the loan that you have is expensive than what the current market trends are and if you are planning to take a fresh loan, then it makes sense to prepay the existing loan which is expensive. This will help in reducing the overall interest burden. Again if you have two loans and have some surplus then pay the loan which is at a higher rate to reduce your overall interest cost. Prepaying a home loan also makes sense if you are looking at reducing your debt to income ratio or you are nearing your retirement and want to clear all debt before you retire.

Prepaying a home loan or not is a decision that has to be made after considering the market conditions, your current financial positions, the conditions on which the loan has been taken and also the economic implications of prepayment.

Thus after carefully analysing all these factors decide whether you want to prepay a loan or not. There is no rule which says that the entire surplus must be used to make the loan repayment, one could bifurcate it in the ratio they so desire between investment, keeping it liquid and prepayment. l

26 PSU

March 31 - April 30, 2016

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Cochin Shipyard, Yesterday

27

March 31 - April 30, 2016

Today Tomorrow Box No. 1

CSL-Milestones at a glance

1959 - Kerala Government initiates land acquisition for Cochin Shipyard, proposed under Second Five Year plan 1969 - Cochin Citizens launch a ‘Paper Ship’ as symbolic protest against project delays which is soon followed by a Kerala Bandh 1969 - Central cabinet approves the project report for Cochin Shipyard (October) .1970 - Project office opened in New Delhi under the Ministry of Shipping and Transport 1972 - Formation of Cochin Shipyard Ltd and start of yard con struction 1976- Crisis in world shipping and ship building industry 1976 - Keel laying of the first ship by Indira Gandhi, Prime Minis ter of India 1977 – Ship Acquisition From Abroad Under New Scheme (SAFA UNS by SDFC) 1981 - Handing over of the first ship Rañi Padmini to Shipping Corporation of India 1981- Ship-repair dock is ready and inaugurated 1985 – SCI order for four 85,000 Ton oil tankers 1990 – First SCI tanker delivered incurring big losses. Cash crunch and getting ready to move to BIFR 1993 – March CSL AGM in Delhi decides not to honor SCI order unless prices are revised.

1993 – On 6th August 1993 Employees of CSL with the support of all political parties stage a Save Our Shipyard Rally 1994 - March- GOI orders converting default in interest (Rs.136 crore.) to equity: CSL turn financially healthy.

1995- Beginnings of healthy a commercial relationship with In dian Navy and shift to small and medium sized vessels. ( Source: CSL and National Shipbuilding Industry-Report by Industries Research and Services-1985 and inputs from Engr. AJ Antony, Former GM CSL)

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March 31 - April 30, 2016

SHIPS BUILT BY CSL TILL DATE ( BOX- 2)

A. SHIPS BUILT FLAG-WISE India Saudi Arabia Liberia Bahmas Marshal us Norway Vanuatu UAE NK

43 9 7 6 6 4 4 2 2

Total till date

83

B. BREAK-UP OF INDIAN ORDERS Indian Coast Guard 19 SCI 12 Chowgle 2 Indian Navy 1 LDA 2 Ratnagar 1 Srendra Overseas 1 Kochi Corprn 2 Vizag Port Trust 1 Bharatiar 1 TSHD Cauvery 1 Total till date

43

( Source: CSL: Independence performance Analysis-Dec 2015

By Cochin Center for Policy Initiatives)

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29

CAPITAL

March 31 - April 30, 2016

Foreign direct iNvestment

Myths and realities

Where bilateral investment treaties are concern, there is no evidence that they attract FDI inflows, contrary to popular belief.

By Yilmaz Akyüz

F

oreign direct investment (FDI) is perhaps one of the most ambiguous and the least understood concepts in international economics. Common debate on FDI is confounded by several myths regarding its nature and impact on capital accumulation, technological progress, industrialization and growth in emerging and developing economies. It is often portrayed as a long term, stable, cross-border flow of capital that adds to productive capacity, helps meet balance-of-payments shortfalls, transfers technology and management skills, and links domestic firms with wider global markets. However, none of these is an intrinsic quality of FDI. First, FDI is more about transfer and exercise of control than movement of capital. Contrary to widespread perception, it does not always involve flows of financial capital (movements of funds through foreign exchange markets) or real capital (imports of machinery and equipment for the installation of productive capacity). A large proportion of FDI does not entail cross-border capital flows but is financed from incomes generated on the existing stock of investment in host

countries. Equity and loans from parent companies account for a relatively small part of recorded FDI and even a smaller part of total foreign assets controlled by transnational corporations.

Second, only the so-called greenfield investment makes a direct contribution to productive capacity and involves cross-border movement of capital goods. But it is not easy to identify from reported statistics what proportion of FDI consists of such investment as opposed to transfer of ownership of existing firms (mergers and acquisitions). Furthermore, even when FDI is in bricks and mortar, it may not add to aggregate gross fixed capital formation because it may crowd out domestic investors.

Third, what is commonly known and reported as FDI may contain speculative components and creates destabilizing impulses, including those due to the operation of transnational banks in host countries, which need to be controlled and managed as any other form of international capital flows.

Fourth, the immediate contribution of FDI to balance-of-payments may be positive, since it is only partly absorbed by imports of capital goods required to install production capacity. But its longer-term impact is often negative because of high import content of foreign firms and profit remittances. This is true even in countries highly successful in at-

tracting export-oriented FDI.

Finally, superior technology and management skills of transnational corporations create an opportunity for the diffusion of technology and ideas. However, the competitive advantage these firms have over newcomers in developing countries can also drive them out of business.

They can help integrate developing countries into global production networks, but participation in such networks also carries the risk of getting locked into low value-added activities. These do not mean that FDI does not offer any benefits to developing and emerging countries. Rather, policy in host countries plays a key role in determining the impact of FDI in these areas. A laissez-faire approach could not yield much benefit. It may in fact do more harm than good.

Successful examples are found not necessarily among countries that attracted more FDI, but among those which used it in the context of national industrial policy designed to shape the evolution of specific industries through interventions. This means that developing countries need adequate policy space vis-àvis FDI and transnational corporations if they are to benefit from Still, the past two decades it. have seen a rapid liberalization of FDI regimes and erosion of policy space in emerging and developing countries vis-à-vis transnational corporations. This is partly

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due to the commitments undertaken in the World Trade Organization as part of the Agreement on TradeRelated Investment Measures .

However, many of the more serious constraints are in practice self-inflicted through unilateral liberalisation or bilateral investment treaties signed with more advanced economies – a process that appears to be going ahead with full force, with the universe of investment agreements reaching 3,262 at the end of 2014.

Unlike earlier bilateral treaties, recent agreements give significant leverage to international investors. They often include rights to establishment, the national treatment and the most favourednation clauses, broad definitions of investment and investors, fair and equitable treatment, protection from expropriation, free transfers of capital and prohibition of performance requirements. Furthermore, the reach of bilateral investment treaties has extended rapidly thanks to the use of the so-called Special Purpose Entities which allow transnational corporations from countries without a bilateral treaty with the destination country to make the investment through an affiliate incorporated in a third-party state with a bilateral treaty with the destination country.

Many bilateral investment treaties include provisions that free foreign investors from the obligation of having to exhaust local legal remedies in disputes with host countries before seeking international arbitration. This, together with lack of clarity in treaty provisions, has resulted in the emergence of arbitral tribunals as lawmakers in international investment which tend to provide expansive interpretations of investment provisions in favour of investors, thereby constraining policy further and inflicting costs on host countries.

Only a few developing countries signing such bilateral treaties with advanced countries have significant outward FDI. T h e r e f o r e , in the large majority of cases there is no reciprocity in deriving benefits from the rights and protection granted to foreign investors. Rather, most developing countries sign them on expectations that they would attract more FDI by providing foreign investors guarantees and protection, thereby accelerating growth and development. However, there is no clear evidence that bilateral investment treaties have a strong impact on the direction of FDI inflows. – Third World Network Features. ( Yilmaz Akyüz is the chief economist of the South Centre, Geneva.)

30 reALTY

March 31 - April 30, 2016

date of acquisition for computing period of holding of ats

K C Joseph Varghese FCA

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31

March 31 - April 30, 2016

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32 NEWS

March 31 - April 30, 2016

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Sobhagya selected as PR agency of the year

NeST Group centre in Infopark

33 NEWS

March 31 - April 30, 2016

INKEL: seedless watermelon, developed by KAU

Aroma Fresh 4th outlet in Tvm

A

roma Fresh has opened its fourth outlet at Vazhuthacaud in Thiruvananthapuram. The others are in Sasthamangalam, Nandancode, and Kesavadasapuram. The company has two other outlets in Kochi—at Tripunithura and Panampilly Nagar. Former Minister Pandalam Sudhakaran, Aroma Horticulture Products Pvt Ltd Chairman & CEO P K Sajeev, Aroma Fresh Managing Director Anne Sajeev and Aroma Group Technical Head Ajith Kumar and Aroma Fresh Vice President Vinayan K P were present on the occasion. Former Minister M M Hassan graced the occasion as the first customer.

Aroma Fresh also offers a range of natural cosmetic products, natural soaps and cleansers, aromatic and essential oils and other lifestyle products.

P K Sajeev said the company will also provide fresh milk and curd – from cows fed by natural feed and fodder to our customers by next month,”. “We will further expand as part of the steady growth and demand in organic food production. “As part of this, we will be opening a unit in Kollam,” he added l

I

NKEL Limited has introduced yellow seedless hybrid of watermelons for the first time in Kerala market., venturing into the modern agri farming The unique variety of thirst quencher, which was developed

by Kerala Agriculture University (KAU), has been cultivated on a five-and-a-half acre plot at Piravom as part of INKEL Agro Farm project.

“The University, for the first time, shared the technology of planting the seedless variety of watermelon in Kerala. There will be a huge demand for the same in the market,” said INKEL Managing Director T Balakrishnan.

Apart from the unique fruit, the plantation includes plantain, red lady papaya, red watermelons (with and without seed) and Rambutan. The produces are expected to be harvested during September-October this year, and the expected yield is over 50 tons.

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“Kerala is over-dependent on neighbouring states for its food needs. According to estimates, vegetables around Rs. 3000 crore are imported into Kerala yearly.

The state produces only about five lakh tons of vegetables out of the total annual requirement of around 25 lakh tons. We forayed into the modern farming business to bridge the demandsupply gap for safe-to-eat fruits and vegetables,” he pointed out.

INKEL, a PPP model company, has also initiated polyhouse at Piravom and INKEL Greens, Malappuram for producing vegetables, including green chilly, long beans, brinjal and ladyfinger.

As part of expansion, INKEL is also implementing a modern agro farm at Palakkad in a 60acre area. The venture will also support local farmers with training on most modern farming techniques. l

34 RECOGNITION

March 31 - April 30, 2016

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PR Manager of the Year

Dr Siddeek Ahmed

35 PERSONALITY

March 31 - April 30, 2016

Smitha Prabhakar– An ace Malayali entrepreneur in UAE Passline News Service

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mitha is a serial entrepreneur who has touched almost all the areas of business. She is professionally trained in Advertising and Fashion Designing from Mumbai, film making from Hollywood and wellness studies from HongKong. Smitha owns and manages an award winning integrated advertising agency, ‘ Client Advertising’ in Dubai, where she has settled.

Born in Kozhikode, Kerala, Smitha is also a professional singer and the first Malayalee w o m a n who has done an International music album for helping autism children. In music circles she is known as Maya Venus. She is the recipient of STHREE RATHNA award instituted by the Government of Kerala and has also many other awards and recognitions including Emirates Business Women Award 2012.

The artist - cum - entrepreneur , who credits her success to the life in the UAE. She has taken upon her success to give a heartfelt thank to the nation by releasing a music video for UAE National Day representing the expatriate community. The video’s name is

PASSLINE

‘ Ya Beladi ‘ meaning ‘My Country’.

This was a CSR initiative presented as an expression of gratitude towards the nation that only has been a matter of prosperity and wellbeing for natives and expatriates from all walks of life. The new music video hits the national television channels while a number of radio channels have promoted the song that marks the expatriates’ tribute to the UAE – one of the finest hosts to millions of foreigners who call it their home.

The song that offers breath-taking glimpses of the major UAE landmarks, desert sands, capes and their transformations towards the master planned urban landscapes and the architectural wonders including Burj Al Arab and Burj Khalifa, also offered expatriates surprise towards the UAE’s visionary leadership and their hospitable culture and deep-rooted heritage of peaceful co-existence with foreigners.

“Ya Beladi, is fitting tribute of the large expatriate community to the UAE’s leadership and its people and our own way to show appreciation to them who have offered

a land of opportunity for all of us.

The visionary leadership and the people of the UAE have created a viable environment where anyone with integrity and skills can do wonders. The country offers a win-win situation for all by providing equal opportunity for nationals and foreigners. As a long-term resident, I have seen the UAE evolving where I could develop my business and I have also successfully ventured into the field of entertainment – this is due to Dubai and the UAE,” said Smitha Prabhakar.

Smita is also debuting her acting career with a Bollywood and a Hollywood movie next year, is a role model for women of different 

PASSLINE March 31 - April 30, 2016

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