IIT Roorkee DOMS Domination March 2012 by Zigu MBA

VOLUME-III ISSUE-03

MARCH 2012

DOMINATION NEWSLETTER FROM DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Spreading Wings in New World (18)

Carbon Credit Market - Is It Dead? (05)

Editorial ……………………………………………………… Dear Readers, The month of March has seen a lot of activity on campus in the form of ‘Cognizance’ and

of a new customer base proves

nating volumes, this article dis-

pivotal in catapulting a business

cusses possibilities of global in-

into the star league of perform-

clusion and revamping of the

ers.

Carbon Market.

is all set to witness ‘Regalia’, an

Unlike the equity market,

The aviation industry is

upcoming event of the Alumni

investors are grappling with an

one of the more sensitive indus-

Committee to be held in April.

immature bond market in India.

tries that follow a cyclical trend,

With the onset of spring and a

Reforms in the positive direction

only with sharper decline rates.

new financial year around the

have managed to give the

With ‘An overview of Indian Avi-

corner, this issue of Domination

‘Indian Bond Market’ a long

ation Sector, funding issues and

is all about past learning and

awaited push, but further struc-

global

new beginnings. Garnishing this

tural and regulatory changes

attempted to address the issues

issue is a beautiful piece of

that can speed up the process

that the sector is struggling with

writing ‘Ek Taara’ that is sure to

are yet to be seen.

by drawing a comparison with its

touch your heart. Through

The world has come a an

learning’,

have

global counterpart.

in-depth

long way from signing the Kyoto

analysis of current global scenar-

Protocol in 1997. Initially aiming

io and the scope of expansion

for sustainable development,

into foreign lands, ‘Spreading

the global market is now con-

Stepping into the spring with a new zest, we hope to deliver to you a fresh start with this new edition of Domination!!

wings in a new world’ is a must

fronted with the question ‘Is

Happy Reading ! ! !

read for those who dare to

Carbon Market Dead?. While not

dream beyond borders. Creation

completely discarding the stag-

rds a g e R tion a n i m o Team D

……………………………………………………… 02 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Contents Team DoMination

Aditi Joshi Anuj Mody Anurag Agrawal Chetna Yadav

Bonds Market in India

Carbon Credit Market - Is It Dead?

Jubin Mohapatra Manav Kaushik Mukesh Rathi

Pawan Upadhyay Rajneesh Kumar Ruchi Gupta Saumya Dani

Organizational Citizenship

Spreading Wings in New World

Saumya Verma Sayantan Shibi Singh

Shruti Goel

Design Team

एक तारा

Overview of Indian Aviation Sector

Anurag Agrawal Saumya Verma

Qutopia DEPARTMENT OF MANAGEMENT STUDIES INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Roorkee - 247 667, India Tel: +91-1332-285014, 285617 Fax: +91-1332-285565 Email: domination.doms.iitr@gmail.com Website: www.iitr.ac.in/departments/DM/Pages/Index.html Success Story

For private circulation only

DoMS da Evince

……………………………………………………… 03 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Perspective ………………………………………………………

Carbon Credit Market – Is it dead? In 1980s, as the world was

nomic concerns as Industries

gets. Moreover, these certifi-

inching towards Industrializa-

will close their business and

cates are tradable in market

tion at a rapid pace, global

move to developing countries

and are purchased by commer-

warming emerged as an Inter-

where there are no limits.

cial and Individual entities to

national concern and Intelli-

Carbon Credits or Certi-

reduce their carbon footprint

gentsia across the globe en-

fied Emissions Reductions (CER)

and to finance carbon reduc-

gaged in debates and discus-

are certificates that are issued

tion

sions to define green house gas

to countries that reduce their

world. India acts as a host

emission targets for every na-

GHG emissions. The Clean De-

country for CDM projects due

tion. Major milestone came in

velopment Mechanism (CDM)

1997,when Kyoto protocol was

Executive board allows projects

which heavily depends on fossil

signed by 141 countries includ-

in developing countries to earn

fuels and accounts for emission

ing European union and Japan

CER credits (equivalent to 1

of 433 million tonnes of CO2

to reduce Greenhouse gas

tonne of CO2). This mechanism

per annum. To meet these

(GHG) emission by 5.2% below

aimed at sustainable develop-

kinds of requirements, financial

1990

2012.Since

ment and gave flexibility to de-

bodies like Asian Development

2001,USA has stayed clear from

veloping countries to meet

bank, World Bank and Yes bank

signing the treaty stating eco-

their emission reduction tar-

also provide financial services

levels

schemes

booming

around

power

the

sector

04 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Carbon Credit Market – Is it dead? ……………………………………………………… for CDM projects.

methods to counter carbon

Also, price volatility has shaken

Current Scenario – Stagnating

emissions. However, based on

investor’s confidence and eco-

Volumes

the outcomes of Durban sum-

nomic downturn has added to

Coming to the question, Is Car-

mit, CDM and JI will continue

the woes. In addition to all the-

bon market Dead? Since 2005,

post 2012 as Kyoto Protocol

se,

when Kyoto protocol came into

has been extended till 2017

amounting to $ 5 Billion has

action, the global market saw

and efficient regulation is ex-

battered the reputation of Car-

robust growth for five consecu-

pected to increase efficiency of

bon Trading globally.

tive years and reached 142 bil-

CDM initiatives.

lion $.

VAT

fraud

2009

When we try to visualize

The EU ETS (Emission

the complete picture regarding

The main reason for

Trading Scheme), a domestic

carbon trading on a global

stagnating volumes of carbon

cap and trade system, is cur-

scale, what comes out is frag-

trading can be associated with

rently the biggest participant in

mented carbon market instead

the lack of clarity in regulations

carbon market in terms of trad-

of a single global market as en-

post 2012 which adversely

ing and number of participants.

visioned in Kyoto Protocol.

affect CDM market and also

It includes 27 EU members

USA, the most powerful econo-

CDM projects incur cost before

along with Norway and Iceland.

my, never ratified the Kyoto

they are registered plus further

However; it has failed at en-

Protocol and Australia, Canada

cost before CERs are issued. In

couraging long term invest-

took too long to take a stand.

current

scenario,

ments in low carbon technolo-

This has led to creation of Vol-

these spiralling costs are a ma-

gy and has only focussed on

untary Carbon Market as seen

jor concern for every country

short term emission reductions

in Regional GHG initiatives in

and they look for cheaper

like switching from coal to gas.

North-East US states and Cana-

Economic

05 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Carbon Credit Market – Is it dead? ……………………………………………………… -da.

hand,UN regulators have not

2010 which restored some faith

USA is home to some of

been efficient in handling CDM

in United Nations Framework

the world’s biggest conglomer-

and JI to include non partici-

Convention on Climate Change

ates and the disapproval of

pating countries. Combining

(UNFCCC). The major points

Kyoto Protocol by them has

these factors, we can explain

agreed upon were:

made it next to impossible to

the steep fall in carbon prices

•

use CDM and JI within the

which has led us to believe that

Climate Fund. Major contribu-

country and to also reject CERs

Carbon Market is on the brink

tors being developed countries

within the corporate structure

of extinction.

who will contribute $ 100 bil-

of the industry. Hence, Today

Recent Developments

lion a year and also private

we are stuck at the inconven-

Understanding

the

Establishment of Green

sources

will

involved

ient position where CDM and

depth of concerns around the

through carbon markets. It also

ETS are utilized in clusters of

climate change and depressing

included

Europe and Japan while volun-

conditions of Carbon market,

members from developed and

tary standards are used in rest

we have witnessed three con-

developing countries in its 24

of the world, but end up with

ferences in Copenhagen, Can-

member board.

negligible contribution to the

cun and Durban since 2009.In

•

carbon price.

Copenhagen, political tensions

ing countries’ National Appro-

Currently, Both EU and

took the centre stage in place

priate

Japan are in midst of economic

of climate issues and no inter-

(NAMA) aimed at reducing car-

crisis and they are the main pil-

national

was

bon emissions with the help of

lars in defining the price and

reached. To regain the oppor-

technology, finance and capaci-

demand of GHG instruments

tunity lost in Copenhagen, Can-

ty building provided by devel-

cun conference was held in

oped countries.

CERs.

the

other

agreement

equal

number

Recognition of DevelopMitigation

Actions

06 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Carbon Credit Market – Is it dead? ……………………………………………………… •

Improvement in CDM

UNFCCC but didn’t define how

2020.It has included a tax plan

mechanism and support to

it will interact with the policies

for 500 companies which will

market mechanism, which is

of USA and Japan which are

pay a $ 23 per tonne carbon tax

still needed in order to increase

supposed to be major drivers if

rising by 5 % per year and then

financial flows in developing

effective market force is to be

shifting to market based mech-

countries by creating a broader

established and demand is to

anism in 2015.

International market.

be expected from their indige-

In January 2013, West-

nous programs which will only

ern Climate Initiative will go on

summit were encouraging as it

grow in coming times.

floor covering California, British

did establish a framework to

Emerging Schemes

Columbia and Quebec. It would

The outcomes of Cancun

fasten the approach towards

The financial crisis which

climate change. It was a signifi-

has gripped the world has had

Offsets and Transport by 2015.

cant milestone in the journey

an adverse effect of demand

South Korea aims to start a

to Durban in 2011.Here, a se-

and supply of carbon credits.

scheme by 2015 covering 470

ries

were

Though the total value of trans-

companies who emit 25000

reached. Firstly, Kyoto Protocol

actions has reached $ 142 bil-

tonnes of CO2 annually ac-

was extended till 2017 and

lion, Implementation of CDM

counting for 60 % of country’s

work was started to develop a

and JI projects has taken a hit

emissions. Similar program is

fresh agreement or Protocol

due to difficulty in obtaining

being pursued in Taiwan too.

under the legal bindings of UN-

finance and stringent norms on

India has pledged a 20-

FCCC that will succeed KP post

issuance. Though the dream of

25 % reduction in emission

2020.The Intricacies of this

a single International market

from 2005 levels by 2020

agreement will be a major

remains distant, there has been

through Perform, Achieve and

force in defining future of Car-

emerging schemes around the

Trade System. Trading will

bon Market. Secondly, Long

world which are sure to pro-

begin by 2014 and a mandatory

term Collective Action by coun-

vide significant contribution as

scheme will cover 8 sectors re-

tries to fight climate change

far as achieving the goal of cli-

sponsible for 54 % of Industrial

was agreed upon where India

mate control and global warm-

energy consumption. It will

scored a major victory on the

ing is concerned.

work on tradable energy saving

agreements

point of equitable access to

Australia

passed

include power plants for buying

the

permits, Escerts which will be

sustainable development with-

Clean Energy bill on Nov.8 2011

issued on amount of energy

out the hindrance of emission

and it is said to be the largest

saved in a target year.

cuts.

emission trading scheme out-

China is already a domi-

Durban paved the way

side Europe. The target set is 5

nant seller and has most num-

for a new mechanism under

percent below 2000 levels by

ber of CDM projects (42 % of

07 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Carbon Credit Market – Is it dead? ……………………………………………………… total globally registered CDM

tion of Chinese carbon market

Also, Emission trading schemes

projects). It continues to sup-

will play a big role in future if a

need greater transparency and

port emission trading and has

national system emerges giving

credibility

established a number of envi-

price signals to entire world.

achieved by collaborating with

ronment and energy exchanges

Recommendations

private sector. An institutional

which

can

for trading CERs and VERs. By

Going by the develop-

body to overlook the market

2013,a pilot carbon trading

ments in recent times, Carbon

apart from the government

scheme will be started in seven

markets have not delivered the

should be included in the

provinces and it will expand to

investments needed to en-

framework which communi-

a national scheme by 2015.It

counter climate change. What

cates market participants regu-

has taken a bold target to cut

has been a major hindrance is

larly.

emission by 40-45 percent be-

the price signal for long term

Currently, International credits

low 2005 levels by 2020.

investments

are not exchanged a lot be-

Big

industrial

tween developed and develop-

like Russia and Brazil have also

schemes need a lift up and re-

ing countries who have suffi-

committed to cut emissions be-

forms are needed to scale up

cient allowances. Also, wide-

tween 15-25 percent on 1990

the required investments level

spread coverage of sectors is

levels by 2020.Russia is active

for reducing emission reduc-

needed so that all corners of

in JI Market through Emission

tion. What can be the future of

emissions are checked before it

Reduction Units and plans to

carbon trading will depend on

gets too late.

include emitters through ETS.

the integration of schemes

2. The coming times will wit-

Despite these efforts, the ques-

over the long term to reach an

ness greater participation from

tion remains whether a homog-

effective global carbon market.

developing countries like China

enous

Some of the steps that can be

and India in terms of carbon

should be kept by United Na-

taken are:

trade. In these countries, CDM

tions or each country should be

1. Strong price signal in Emis-

projects have carried the emis-

left to generate own credits.

sion trading schemes which

sion reduction programs to a

The latter will lead to fragmen-

create enough demand and

very large extent. This will fur-

tation but since 1997, all major

supply and decrease price vola-

ther grow as we have discussed

emitting nations have been

tility prevalent in Europe due to

earlier and thus more cash flow

moving away from Kyoto pro-

economic crisis and fixed quota

will happen to the tune of 100

tocol and favour a widespread

of allowances. If government

billion $ by 2030. However, ad-

market. Experts like Wolfgang

succeeds in controlling volatili-

ditional cost associated with

Stark of Wuppertal Institute

ty; it will increase investor’s

the process and the lengthy du-

(Germany) believe that evolu-

confidence in carbon markets.

ration in implementation ham-

system

technologies.

low-carbon existing

accounting

nations

The

08 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Carbon Credit Market – Is it dead? ……………………………………………………… pers investment .One effective

great commitment in recent

all CDM and ETS schemes and

way can be setting sectorial tar-

times and they will be torch

array of sectors is much need-

gets and focussing on problems

bearers of climate change in

ed and it can only be possible if

faced in each sector in CDM

coming times. What more can

strong co-ordination between

implementation.

be done is inclusion of cap and

governments becomes a reali-

Moving Forward

trade schemes in these coun-

ty. With this, private sectors

Taking a holistic view, it

tries along with CDM mecha-

will be inspired enough to in-

could be said that current car-

nism. This will increase liquidity

vest in low carbon technologies

bon market scenario is not very

and lower costs by imple-

and investment will pour down

encouraging but all is not lost

menting

from all corners to create a low

here. Developing countries like

where they look cost effective.

China and India have shown

A global carbon market linking

emission

reduction

Article By -

carbon economy.

Mihirkul Vikram mihir517@gmail.com

09 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Perspective ………………………………………………………

Bonds Market in India What are Bonds?

finance long-term investments,

Thus came into picture national

A bond is a debt security

or, in the case of government

and state level development

in which the authorized issuer

bonds, to finance current ex-

financial

owes the holders a debt and,

penditure.

which were backed by RBI and

depending on the terms of the

History of Bond Market in In-

Govt. of India through various

bond, is obliged to pay interest

dia:

incentives

institutions

and

(DFIs)

supportive

(the coupon) and/or to repay

During the post inde-

measures for providing long

the principal at a later date,

pendence era India had only

term financing to all range of

termed maturity.Bonds have a

traditional commercial banks,

industrial units. In a way, DFIs

maturity period of more than

which were ready to provide

enjoyed a virtual monopoly in

one year which differentiates it

working capital to industries

long term finance.

from other debt securities like

but not long term financing.

Then came the decade of Fi-

commercial papers, treasury

The Government was in urgent

nancial Sector Liberalization

bills and other money market

need of some financial inter-

with deregulation being intro-

instruments.

mediaries that could provide

duced in 1991. DFIs were no

Bonds provide the bor-

term finance for infrastructure

longer given access to conces-

rower with external funds to

development and expansion.

sional source of finance. Also ,

10 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Bonds Market in India

……………………………………………………… with liberalization came more

enough depth as it formed

der the purview of SEBI, RBI

liberal imports which impacted

merely 41.6 percent of the GDP

and the Ministry of Corporate

profitability of many industries

as of 2007 (38.3 per cent in

affairs.

assisted by DFIs in the past.

government debt and 3.2 per

Hence DFIs were getting sad-

cent in corporate debt). Also in

developed part remains the

dled with increasing level of

India the average daily trading

corporate debt market, where

NPAs. This retreating of DFIs

in debt is insignificant com-

even today more than 95% of

left a gap, and the Govt. real-

pared to equity segment.

the debt being issued are in the

The

most

under-

ized that there is an urgent

The bond market in In-

need of an alternative supply of

dia is typically classified into

term finance to industry and

three categories viz. the gov-

The government of India

infrastructure. Then it was real-

ernment, the corporate and

is planning an ambitious $1 tril-

ized the best course of action

the financial, where the gov-

lion infrastructure program in

for the Govt. would be to

ernment bond market consti-

five years through 2017. We

strengthen capital and, in par-

tutes 85% of total DCM fol-

need huge investments in sec-

ticular, encourage active bond

lowed by the financial 10% and

tors like mining and manufac-

market.

corporate market 5%. The issu-

turing for creation of capacity if

Present Scenario:

ers of these securities are

India wants to be a major man-

mostly the central and state

ufacturing hub. But with con-

lars of the Indian capital mar-

government,

government

version of 2 of the DFIs, namely

ket are-equity and bond mar-

agencies, corporate and private

IDBI Bank and ICICI Bank, into

ket. While the equity market

sector banks. The investors

commercial banks we are left

has expanded in leaps and

mostly consist of RBI, banks,

with IFCI ,which ran into the

bounds, the bond market is

individuals, PFs and MFs with

problem of NPA and total mis-

poorly developed and lacks

the whole system coming un-

management, for long

The two important pil-

form of private placements. Irony of Indian Bond Market:

11 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Bonds Market in India

……………………………………………………… term financing.

Hence, we can see that

Long gestation periods

On the other hand there

Indian DCM is caught in some-

to bring the bond issuances in-

are investors, who can't find

thing of a chicken-or-egg dilem-

to the market.

enough Indian corporate bonds

ma that limits its growth poten-

• Regulation hindrances:

which is apparent from the

tial. Some attribute the market

deals like that of Infrastructure

immaturity to limited demand,

funds and insurance companies

Development Finance, a com-

while others blame limited sup-

which are typically among the

pany formed by the Indian gov-

ply. We see obstacles and op-

biggest buyers of corporate

ernment to lend to energy and

portunities in both, but view

debt in other countries.

road projects, which sold 29.3

improvements in the market

billion rupees in 10-year tax-

structure as the most critical

rent: Rigorous or onerous regu-

exempted bonds last year. The

step.

latory requirements including

sale closely followed Indian

Reasons for underdeveloped

quality and the type of disclo-

Overseas Bank's successful is-

Bond market:

sures in the case of public is-

suance of 15-year debt. As on

• Structural shortcomings:

sues.

October 31, 2011, FIIs have in-

Positive changes in the scenar-

vested more than Rs 41,000

alizing bonds and other corpo-

io:

crore in government papers

rate debt instruments by NSDL

Govt. Reforms:

and Rs 68,000 crore in corpo-

(National Securities Depository

•

rate bonds and the only deter-

Limited) as they are not ex-

lion each, the limit is $15 billion

rent for further investment is

empted from stamp duty on

for government securities and

the cap put by the government

transfer of bonds.

$20 billion for corporate debt

and the lack of mature bond

during the 2011-12 budget.

market.

the secondary markets for pri-

•

vate securities.

investment in long-term infra-

Difficulties in demateri-

High transaction costs in

Upper cap on pension

Corporate bond deter-

Increase in cap by $5 bil-

Relaxing norms for FII

12 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Bonds Market in India

……………………………………………………… -structure bonds, reducing the

-year German Bunds fetch

The Way Ahead:

residual maturity period to one

2.3%

treasury

Despite some recent successes,

year for investments of up to

bonds yield 2.08%. The triple A-

the reform effort in India’s

$5 billion.

rated Indian corporate bonds

DCM has not yet reached criti-

the

yield about 9.70%.This attrac-

cal mass. Some of the immi-

markets for bonds such as in-

tive returns have resulted in

nent steps like streamlining the

flation indexed bonds will help

the overseas investors paying

issuance process, strengthen-

in maintaining investor confi-

premium to enable them to

ing of the trading platform and

dence against the unpredicta-

purchase these bonds in the

settlement and clearing sys-

ble inflationary movement.

market, reflecting the attrac-

tems, taking forward plans to

•

tiveness of bonds in India.

allow securitization would sure-

tion of the Debt listing agree-

Future of Indian Bond Market:

ly result in momentum that

ment, rationalization of stamp

Various agencies and Central

would help to push through the

duty and introduction of Repos

govt. have predicted a phe-

harder and politicized reforms.

on Corporate Bonds have also

nomenal growth in the market

In all, we can say that

been taken by SEBI.

through effective and gradual

Indian Bond Market has al-

Availability of high yielding In-

reforms by 2016. Goldman

ready got the momentum but

dian Bonds:

Sachs has estimated nearly

the speed with which it will fol-

fourfold growth of Indian debt

low the path will rest with poli-

about

market over the next decade

cymakers and authorities will-

8.72%, indicating the govern-

bringing it to $1.5 trillion, or

ingness to contribute towards

ment is paying more than trou-

about 55% of GDP, by 2016

the changes.

bled Italy or Spain, without ad-

from

justing for currency risk. The 10

around 45% of GDP, in 2006.

•

Sophistication

Initiatives like simplifica-

The Indian benchmark 10-year

bonds yield

,10-year

roughly

$400bn,

Article By -

Chitrangada Gupta chitrangada87@gmail.com

13 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Perspective ………………………………………………………

Organizational Citizenship According to Organ, Organiza-

sion is not generally under-

formal requirements, and filling

tional Citizenship Behavior is

stood as punishable. Organiza-

the gap between procedures

“individual behavior that is dis-

tions always need employees

and regulations on the one

cretionary, not directly or ex-

who do the job that are not the

hand, and dynamic reality on

plicitly recognized by the for-

part of job description and or-

the other.

mal reward system, and that in

ganizations having such em-

the aggregate promotes the

ployees

outperform

that all the organizations want

effective functioning of the or-

those which do not have such

their employees to exhibit but

ganization.” By Discretionary,

employees. Thus, concept of

can’t make them do so. Also

he means that the behavior is

organization citizenship behav-

the managers cannot guaran-

not an enforceable require-

ior is gaining importance. As

tee any rewards for these be-

ment of the role or the job de-

defined by Organ (1988), OCB

haviors except appreciation.

scription,

clearly

reflects a “good soldier syn-

The different facets or factors

specifiable terms of the per-

drome” which is necessary for

of organizational citizenship as

son’s

contract

the prosperity and good func-

given by Organ are: altruism,

with the organization; the be-

tioning of every organization. It

courtesy,

havior is rather a matter of per-

means doing a better job, mak-

civic

sonal choice, such that its omis-

ing an effort above and beyond

peacekeeping and cheerleading

that

is,

employment

always

These are the behaviors

conscientiousness,

virtue,

sportsmanship,

14 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Organizational Citizenship

……………………………………………………… It has been observed that

part of contractual agreement

predictor of citizenship. People

different people exhibit differ-

of the job. Some employees,

who are conscientious, agreea-

ent levels of organizational citi-

for example, see it as a part of

ble, and have positive affectivi-

zenship behavior.

the job to come early to work

ty tend to perform citizenship

or to volunteer to take the

behaviors more often than oth-

work no one wants.

ers do. Also, individuals with

Many studies have been conducted to find out the determinants of organizational

Others consider it a nice

high collectivism and propensi-

Some

thing to do and would even ap-

ty to trust are more likely to

studies have shown that per-

plaud others to do it but they

believe that they can be a val-

sonality traits, such as agreea-

won’t themselves indulge in

ued part of the organization,

bleness or conscientiousness,

these behaviors. Still others

and because of this belief, they

are related to these behaviors.

would say that they have no

engage in citizenship behaviors

Some

incentives to do such things.

to make themselves a valued

citizenship

behaviors.

other

research

has

shown how characteristics of

One important determi-

part of the organization.

the tasks, such as freedom of

nant is the relationship with

Job satisfaction also has

work in one’s own way, might

people at work or how an indi-

a positive relationship with or-

correspond to organizational

vidual is treated at work. When

ganizational citizenship behav-

citizenship behavior. Also, the

an employee has good relation-

ior. Employees having more job

behavior of leaders and manag-

ship with the people around

satisfaction will exhibit more

ers also affects the occurrence

him i.e. he is supported by his

OCB. Nevertheless, the precise

of these acts. Lastly, employee

manager, he trusts his col-

relationship differs between

attitudes towards the job and

leagues and has affection with

affective and cognitive job

organization, as well as per-

his peers, he cannot just main-

satisfaction. Some studies have

ceived justice and fairness also

tain those relationships by do-

shown organizational citizen-

affect the incidence of organi-

ing his regular job. In order to

ship is more related with cogni-

zational citizenship behavior.

sustain a high quality relation-

tive, rather than, affective job

According to findings by

ship, he has to do the extra

satisfaction

Morrison (1994) and others,

things to help the people

Blakely (1995) ) while others

the extent to which an individ-

around him.

have shown, it is relative with

(Moorman

and

ual exhibits OCB depends on

Our personality is yet

affective job satisfaction (Lee

the “breadth of the perceived

another explanation of why

and Allen (2002) ). It is pre-

job” i.e. the responsibilities

some people perform citizen-

sumed that positive feelings

that an individual considers to

ship behaviors. Personality is a

motivate individuals to show

be the moral obligations of the

modest predictor of actual job

organizational citizenship. In

job and that need not to be the

performance but a much better

contrast, the belief that such

15 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Organizational Citizenship

……………………………………………………… behavior would be reciprocat-

show citizenship behavior in

ployees who will do more than

ed with awards also motivates

the organization. In general,

their usual job duties and pro-

organizational citizenship.

people who are old become

vide performance that is be-

Another aspect that de-

better citizens. It may be possi-

yond expectations. In short,

termines the OCB might be the

ble because with age, people

this can be achieved by hiring

level of pay. If an organization

gain more experiences to share

employees having personality

offers pay that exceeds level of

and it becomes easier to help

traits that goes with the organi-

remuneration in the market,

others because they have more

zational behavior, creating a

then employees are motivated

accumulated company and life

positive work environment, in-

to show high level of discre-

experiences to draw from.

creasing

job

satisfaction,

tionary effort or optional activi-

Thus, organizational citi-

broadening the perceived roles

ties that enhance the effective

zenship behavior is inevitable

of employees, motivating them

working of organizations.

for the effective working of an

and paying them remuneration

Interestingly, age some-

organization and must be pro-

better than the market.

times also determines the fre-

moted in the employees. Suc-

quency with which people

cessful organizations need emArticle By - Ruchi Gupta ruchigupta.iitr@gmail.com Ambika Garg ambika.nitj@gmail.com

16 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Perspective ………………………………………………………

Spreading Wings in New World In today’s borderless world, in

have McDonalds, Starbucks etc.

tivities and other costs just by

order to achieve success every

which are worth mentioning.

going global. In addition some

organization needs to compete

International expansion of busi-

countries are there who pur-

in a global environment. The

ness is not just expanding the

posely invite foreign firms to do

world now, is filled with finan-

business in a foreign country, it

business in their country to

cial instability and for the

is forming a new identity in a

support mutual gains.

growth of every organization,

new place.

Going Global

the organization needs to un-

Global business expan-

For going global, a lot of factors

derstand clearly what factors

sion helps the company in vari-

need to be taken care of. Some

are necessary for its effective

ous ways. It makes the firm

of which may include: -

development. One of the many

able to get varied customer

• Market Access

effective solutions would be to

and a wide customer base. Al-

• Language Barriers

take the business to the global

so, expanding the business in

• Local Acceptance and Talent

level. Global expansion is a very

the area where resources can

acquisition

important factor for the growth

be found at lower cost provides

• Monetary Policies of the tar-

of an organization from a small

an extra advantage. Some-

get country and economic se-

start-up to a renowned interna-

times, firms earn profits in or-

curity.

tional brand. As examples we

der to carry out their R & D ac-

• Market research and product

17 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Spreading Wings in New World

……………………………………………………… costs.

strategy, a lot of organizations

guarding of commercial inter-

• Financial stability of the tar-

often commit a few general

ests of the firm and the rights

get country.

mistakes which should be tak-

of the end customer. It will

• Ability to import and export

en care of. Some of them are as

help the firm to legally enforce

and laws governing them.

follows: -

the trading agreements in the

• Potential Sales/market and

• Firms often are unclear about

foreign country. Several laws

product demands etc.

their missions and objectives

like Common law, Civil Law,

Before planning the con-

which lead to poor strategic

Customary Law as well as

crete strategy of the business

decisions, adverse resource al-

mixed system prevail in differ-

expansion plan to an interna-

location and its management.

ent parts across the world.

tional level, the organization

The goal should be crystal clear

Common law helps in a broad-

must do its internal assess-

before entering a new market

er manner to understand the

ments. Within the organization,

as it is the only hub which will

trading environment and the

it needs to understand its key

drive the entire mission.

outcomes. Civil law is In effect

competencies, strengths and

• Risks present in the new

in much of European countries.

weaknesses.

the

country should be analyzed

Some countries like India have

most important question for

properly. Success in the home

a common mix of these laws

the expansion that the firm

market need not entail the

known as the mixed system.

needs to work upon is the na-

same in the foreign market.

Legal system affects the busi-

ture of business it would start

• There should be a proper

ness expansion plan very seri-

in the foreign country and the

bonding between the strate-

ously. It may affect during any

location

country)

gies formulated and the actions

merger and acquisitions ac-

where it wants to expand the

taken during its implementa-

tions. It regulates all the guide-

business. The inflow of Foreign

tion.

lines pertaining to trade within

Direct Investment is a very cru-

• The structure and the culture

the jurisdiction of the host

cial factor to determine the

of the organization should be

country.

economic potential of a coun-

molded in the framework of

Issues

try. It needs to decide, whether

the target country’s culture.

Rights and Child Labor Viola-

it would like to just expand its

It is also necessary to remain

tions

current business in the target

updated about the latest global

To provide the people with

country or it would start a new

trends

their basic rights, which may be

business depending upon the

Legal Issues

civil, political, cultural, social or

scope of growth and develop-

The legal system in the target

economical rights, a lot of rules

ment in the target country.

country should maintain a per-

and regulations have been for-

While formulating the

fect balance between the safe-

mulated. There are a lot of

However,

(foreign

Relating

Human

18 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Spreading Wings in New World

……………………………………………………… countries where, within the or-

trade with the company which

ple, the imports of goods pro-

ganizations workers face hu-

is involved in such activities

duced by children are banned

man rights violations. . In many

starts losing their public image.

in a lot of countries as a meas-

incidents workers find them-

As a measure to protect

ure of protecting budding chil-

selves in the middle of no-

the peoples from human right

dren from getting abused in the

where without being paid their

violations certain countries in-

society as well as the work-

wages for months and even

troduce trade restrictions with

place. In the first place child

years. Physical and sexual vio-

the countries where actually

labor is illegal and then their

lence were also not very far.

these violations occur. These

abuse is a very serious offense

(Cherribi, 2011, pp.29)These

restrictions may be introduced

to the law.

companies lose all their public

in certain type of goods also

On the basis of ethics,

trust and soon it sees its dead

whose production promotes

trade restrictions with all these

end. Also the companies who

the rights’ violations. For exam-

countries where firm violations

19 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Spreading Wings in New World

……………………………………………………… occur are justified. But when

right Infringement

the customer as to genuine-

we change our angle to the

Intellectual property refers to

ness of the firm’s product or

economic viewpoint, these re-

the particulars of information

services.

striction not only harm the

or knowledge which can be

Conclusion

economy of the country with

used anywhere and anytime

In the present era of globaliza-

whom the embargo has been

depending upon the require-

tion, every organization wants

done but also the country

ment. The international expan-

to outperform its competitors.

which imposes the ban also

sion of the business may re-

To hold a strong position and

suffers more downward trend

quire the shifting of the intel-

to increase its growth rate, one

in the economy than it actually

lectual property of the organi-

of the most favored ideas is to

helps in improving the condi-

zation from host country to the

spread the wings of the firm in

tion of human rights’ viola-

target country.

foreign countries which will

tions. So, expanding the busi-

Certain issues relating to the

attract an entirely new custom-

ness in these areas may be

er base thereby adding to the

done considering the profits

remain in the foreign country.

revenues of

but necessary rules should be

During the start-up, many local

However, proper planning and

formulated within the organi-

firms might violate the copy-

development of strategies is

zation to not to indulge in any

right of the Parent firm but as

necessary in order to achieve

such activities.

the firm establishes itself there

success.

Intellectual Property and Copy-

would be awareness among

infringement

may

Article By -

the

company.

Anurag Agrawal anurag242@gmail.com

20 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Chlorophyll

……………………………………………………… Its wise to learn, its GOD like to create

एक तारा एक ताया न जाने कहााँ खो गमा जो सवेया तक न रुक सका यात की धुंधरी चादय भें ख़ाभोशी की आगोश भें सो गमा एक सऩना न जाने कहााँ खो गमा जो भुंजजर को बी न ऩा सका इस हारातों के बवुंय भें गभनाभी के अुंधेयों भें खो गमा एक पूर न जाने क्मों खखर न सका जो फहायों को बी न दे ख सका इस कयवट फदरते भौसभ भें तप ू ान के हवारे खद को कय गमा एक कहानी जो अधूयी यह गमी जो अल्ऩ ववयाभ भें ही ऩूर्ण हो गमी ददरों भें एक प्रश्नचचन्ह के साथ जाते जाते एक कसक छोड़ गमी

Poem By -

Lalit Kumar Bari lkbari@gmail.com

21 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Qutopia ………………………………………………………

It’s Exquizite, Kills your Quriosity and adds to your Quizdom. Need we say more? ‘Qutopia’ – A Utopia of the

best Biz Quiz Tidbits to wreck your brains! Rush in your answers to domination.doms.iitr@gmail.com or anu-

rag242@gmail.com before 31st March, 2012. The winner will have their names published in the next issue. Also, person getting the highest score in the current quarter (Jan-June 2012) will get a gift voucher. Answers in the next issue of DoMination.

Section A (1 Point for each correct answer)

1) According to PM David Cameron, economic growth in the UK is being held back by________. 2) Who has topped the league table of the world’s richest football clubs for the seventh straight year? 3) Since Stephen Elop has become the CEO, how many job losses has NOKIA announced? 4) Tesco, Burger King and several other big firms have withdrawn from what? 5) What happened to RBS’s profitability in 2011? Section B (1 Point for each correct answer)

1) Which country launched the Postal Stamp of Migration of the first Indian Labor around 150 years ago?

22 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Qutopia ……………………………………………………… 2) Identify this logo.

3) In US it is legally allowed to sell only 5 times a year. It is said that the banks charge only the processing fee. But actually it is worth over 100 thousand dollars of business. What is it?

Section C (3 Point for each correct answer)

1) What was largely inspired by the book shown in the figure?

Answers to Jan’12 Qutopia Section A: 1. $1 2. Fred The Shred 3. Competition from smartphones 4. Advocates Copying/Piracy 5. TESCO Section C 1. Donald Trump

Section B: 1. Goldman Sachs 2. National Skill Development Corporation 3. Brett Lee

Winner of Qutopia (Feb 2012) 1. Garima Lakhanpal (Batch of 2011-13, DoMS IIT Roorkee) 2. Prateek Jain (Batch of 2008-10, DoMS IIT Roorkee)

23 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

DoMS-da-Evince Deepak Shakya is 2001 batch pass out of DoMS, IIT Roorkee and presently working as Business Development Manager at Subhiksha .

1. What are the common chal-

primary job is to the take the

In Oxigen where i had to launch

lenges faced in the retail sec-

businesses a step ahead with

a concept which was very new

tor?

existing Retail and Opening up

in India so it was difficult to un-

Initially there were many chal-

new Branded Retail in my Zone

derstand the concept.

lenges

to grow the business of MTS

5. How has DoMS, IIT Roorkee

dukan wale were in favor of

and Brand presence as well.

contributed to your success?

this kind of concept. Customers

3. How was your experience

I have learnt many things from

had to wait for billing , etc. But

working with Tata Indicom and

DoMS but most important

right now customers and Mar-

Oxigen and how it is different

thing that i have learnt and i

ket both have understood the

from Subhiksha?

am using is that we should al-

importance of Organized retail.

For Tata Indicom and Oxigen, I

ways have more knowledge

Even existing Govt. wants 100

launched the product and set

than our competition.

% FDI in retail sector. So, op-

up the channels in Delhi and UP

6. Any message for the read-

portunities are huge.

West. But in Subhiksha it was

ers, especially the current

2. What are your roles and re-

totally different since it was or-

batches of DoMS?

sponsibilities

ganized retail.

Be bold in life, it always pays

MTS ?

4. What has been the most

and guys, wish you all best

I am taking care of Branded Re-

Challenging role in your career

wishes for your career ahead.

tail Division MTS in NCR. My

so far?

e.g

Existing

working

Kirana

with

24 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Success Story ……………………………………………………… Making Customers Eat Happy... Gaurav Jain CEO and Founder, Mast

Kalandar

Gaurav Jain, along with his wife Pallavi Jain, dreamt of doing something of their own during their IMT Ghaziabad days. After 5 years of working as IT professionals and officially travelling across Asia-pacific region, they felt stagnant and decided to follow their dreams of entrepreneurship. In 2004, they came back from Australia from a one year assignment, and typically like an MBA started working on market research, excel work and related financials on three ideas. Out of the three ideas namely, fresh vegetables and fruit chain, selling fruit juice and the last connected with fresh Indian food, they zeroed on the last one. The couple invested their personal saving of Rs 20 lakh to get started with. In Feb 2005, they opened the first restaurant on Bannerghatta Road in Bengaluru. Now, as a part of Spring Leaf Retail Pvt. Ltd., Mast Kalandar currently has 22 branches (18 in Bengaluru, 1 in Chennai and 3 in Hyderabad) across south India and has expansion plan of 100 branches in upcoming years. With 22 outlets at present, Mast Kalandar revenues are close to Rs. 18.7 crores. Recently, Mast Kalandar has raised its Series B round of funding from Helion Venture Partners, Series A backer Footprint Ventures and Salarpuria Group, an angel investor in the company. The USP of Mast Kalandar, to deliver with the promise of authentic, tasty and healthy north Indian food, has made Mast Kalandar customers happy eaters who often come back for more. Jains positioned the food as “Authentic, vegetarian, homemade style North Indian food” and targeted the working professionals looking for regular eating out options, light on their stomachs and wallets. To fulfil the positioned product of homemade food, they decided to use only quality ingredients which we use at home. Their decision to offer freshly cooked food everyday is the biggest differentiator and also the biggest challenge. This means the Jains have had to evolve their own supply chain. Mast Kalandar calls it “Hub and spoke” model, having four steps to fresh food. Starting from sourcing, where in the centralized kitchen in every city they operate in, fresh ingredients and vegetables are sourced and mixed with spices to form a partially cooked and unfinished product. These unfinished products are then

25 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Success Story ……………………………………………………… shipped to outlets, where meals are put in final stage of cooking before serving to customers or being home delivered. The food is transported in special hot boxes, that keep food from spoiling up to 10 hours. To make every customer eat happy, Mast Kalandar ensures the authentic taste of north Indian food by striking partnerships with vendors across India like its papads come from Rajasthan, pickles from Meerut and Jaipur to count a few. Another differentiator of this QSR (Quick Service Restaurant) is ‘preplated meals’, which allows Mast Kalandar to create more saleable menu options out of fewer ingredients or dishes. The next challenge to Mast Kalandar is it’s decision to expand to 100 QSR , which includes north India too. But Gaurav firmly believes that he will find customers for his geek food in North India too. According to Gaurav, there is no ‘right time’ in your life to do something you are passionate about. The ‘right time’ is all when you jump into it.

Article By -

Saumya Verma saumya.eck@gmail.com

26 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Regardez I’economie ………………………………………………………

Overview of Indian Aviation Sector Aviation in modern times is the

rising aviation fuel prices etc.

the entry of new players after

driver of Economy. In recent

There is a requirement to study

adoption of Open Sky Policy

times, there is a

transfor-

the causes of the issues and

and other liberalization policies

mation of Indian Aviation from

tackle the same thereby paving

in 1990. But the rapid and dra-

over regulated and under man-

an unobstructed path for the

matic changes took place from

aged sector to a more open,

various opportunities.

the year 2000, as several pri-

liberal and investment friendly

Indian Aviation Industry:

vate airlines entered the sec-

sector. While there are lot of

Brief Introduction

tor. These successive entries

new avenues for Aerospace

During pre liberalization,

were made possible by the

services in the coming decades,

the Indian Civil Aviation was

growing per capita income of

the constraints associated need

perceived to be an elitist activi-

Indian Middle Class which al-

to address for the smooth

ty, as the cost for boarding a

lowed nullifying the assump-

growth of the sector. Some of

flight was out of reach for most

tion that the airplane is for

the issues faced by the sector

of the citizens. The Indian Civil

elites. Indian Aviation Industry

include mounting losses of the

aviation was mainly brought

today is led mainly by private

airlines, congestion at airports,

down under the purview of

players and a relatively new

technical manpower, land ac-

Government

concept of Low Cost Carriers

quisition, high airport charges,

years. But the sector witnessed

during

initial

like GoAir, SpiceJet, and King-

27 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Indian Aviation sector

……………………………………………………… Kingfisher Red etc; dominating

14% and domestic growth has

the current situation demands

Indian Market with nearly half

been impressive 22% for last 6

a concrete action plan to fund

the market share.

years. During the year 2007-08,

Indian Civil Aviation as a whole.

Mergers & Acquisitions:

the domestic cargo traffic grew

In November 2011, a consorti-

by 11% while international car-

um of banks whose lead lend-

Aviation Air India has serious

go traffic grew by 15%.

ers are SBI, IDBI, and Bank of

implications for air travellers as

Debt Issues in Indian Aviation

Baroda had given an in princi-

well as airline employees. The

Sector:

ple nod for financial restructur-

The M& A in Indian Civil

important issues with airline

Indian Airlines Industry

ing of the loss making Air India.

merger and acquisitions are

is on the verge of crisis. Among

The banks agreed to convert

time,

efficiency,

the three main issues namely

40% of short terms debt or Rs.

competition, passenger bene-

Capacity, Debt and Fuel Prices

7000 crore in to equity. The

fits and strife. The State owned

the airline industry faces today,

debt restructuring plan is being

international flag carrier Air In-

the growing debt of the airlines

reviewed by a Group of Minis-

dia has merged with all state

may be among the most seri-

ters (GoM) headed by Finance

owned airlines under the brand

ous issues. Since global eco-

Minister Pranab Mukherjee.

name of Air India. Jet airways

nomic recession of 2008, the

The GoM suggested equity in-

acquired

(now

economy was not very sup-

fusion of Rs 23,000 crore in the

known as JetLite) in April 2008;

portive to Indian Civil Aviation.

airline till 2021.

Air Deccan-Kingfisher Merger

Air India was the only player

The introduction of for-

took place in December 2007.

which bought aircrafts directly,

eign investments can also help

All Mergers & acquisitions took

but due to introduction of stiff

the dwindling situation of Indi-

place to enjoy the economies

competition from low cost car-

an Aviation Sector. A govern-

of scale and to make the opera-

riers and inadequate manage-

ment backed panel recom-

tions more efficient and cost

ment, it is facing the huge

mended a radical reform early

saving.

debts of Rs.69000 Crore. The

this year that would allowed

Growth Aspects:

three listed airlines -Jet Air-

foreign carriers like British Air-

India is one of the fast-

ways, SpiceJet and Kingfisher

ways, Lufthansa and Singapore

est growing economies and avi-

lost 60% of their market value

Airlines to invest up to 49% in

ation is an important part of

in 2011.

domestic carriers. Till now, for-

the national infrastructure and

Funding Indian Aviation Sec-

eign investments are not al-

one of the prime movers for

tor:

lowed, but if the government

approvals,

Air

Sahara

economic growth. The interna-

Though Government has

starts to lift these restrictions,

tional passenger growth has

intervened many times to bail

it could provide a vital lifeline

been growing at CAGR of over

out the state run Air India, but

to the Indian Aviation Sector.

28 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Indian Aviation sector

……………………………………………………… Example from Abroad (Debt

mote clear and transparent

primary reason for the increase

Restructuring of Japan Airlines

processes for all creditors. One

in passenger traffic over the

Corp-2010):

example is the use of turna-

years has been decline in air-

In January 2010, Japan

round alternative dispute reso-

line passenger yields which has

Airlines Corp. filed for bank-

lution (ADR), established in

almost halved since 1970. Dur-

ruptcy protection with liabili-

2008. Under Turnaround ADR,

ing the same period, the real

ties of 2.3 billion yen, as the

all creditors must unanimously

revenue growth has averaged

country’s largest ever corpo-

consent to the proposed busi-

only 2-3%. Small increase in op-

rate failure. The government

ness revitalisation plan in order

erating costs, like high fuel pric-

was quick to supervise the re-

to effectuate a change in the

es, congestion cost, higher se-

structuring of the national air-

terms and conditions of the

curity and insurance cost can

line, and provided huge sum of

debt.

have a sharp impact on the

capital and legal support to

Future Outlook:

profitability of the companies,

minimise the effect of JAL’s col-

According to the analysis

thus impacting the demand for

lapse on the economy. Several

of aircraft manufacturers and

air travel services. However,

out-of-court debt adjustment

other

the

there is room for cost reduc-

procedures have been adopted

world passenger traffic is ex-

tion in the form of distribution

to reform the insolvency and

pected to grow at 5% p.a. in

cost and cost synergies from

restructuring regime, and pro-

the medium to long-term. The

industry consolidation.

industry

bodies,

29 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

Indian Aviation sector

……………………………………………………… India needs to come up with

rights. To follow up with other

the existing resources and at

new reforms for funding avia-

nations; Indian Aviation sector

the same time commission the

tion sector. Our nation has sur-

requires more capital for plac-

planned infrastructure in a

faced as one of the fastest and

ing orders to expand their am-

timely manner to provide the

most promising aviation mar-

bitious fleets. With respect to

end user a memorable travel

kets in the world. Forecasts by

the current scenario, the Indian

experience.

AAI for the next 5 years have

aviation has to tap more con-

effort must be started involving

projected a sustainable growth

ventional and cost effective

all the stakeholders concerned

rate of 16% for international

methods of aircraft financing.

to draw out framework detail-

and 20% for domestic aviation

India can take lessons from its

ing the measures, Indian Avia-

sector. Recognizing the expo-

global counterparts on the

tion Sector needs to pursue in

nential growth of air traffic in

funding aspects. The example

next 10 years. This framework

India, the Ministry of Civil Avia-

from Japan displays a proactive

would act as the platform to

tion has been following a very

and mature effort from the Ja-

make India one of the leaders

liberal policy in the exchange of

pan Government. The need of

in the global aviation industry

capacity entitlements / traffic

the hour is to efficiently utilize

and to scale new heights.

Article By -

collaborative

Shibi Singh Gaharwar Shibi.singh@gmail.com

30 | DOMINATION, MARCH 2012

DEPARTMENT OF MANAGEMENT STUDIES, IIT ROORKEE

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