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Articles by ruma
Posted Jun 21, 2013 | General | 721 Views   

UTTARAKHAND – HELL HATH NO FURY WHEN MOTHER NATURE SCORNED…

By Ruma Dubey It is only those who have visited Uttarakhand, experienced the beauty, tranquility and peace of the hills, seen the majesty of the Himalaya’s and glory of the Ganges, felt spirituality and bliss, only those will... By Ruma Dubey It is only those who have visited Uttarakhand, experienced the beauty, tranquility and peace of the hills, seen the majesty of the Himalaya’s and glory of the Ganges, felt spirituality and bliss, only those will feel the acute pain of the calamity which has befallen the state today. Yes, others might also feel the pain but unless one has experienced the state, it is probably difficult to understand the fragility of the topography there. On a recent visit to the state, one thing which came forth, while talking to all the locals there, one theme which was common was that they needed economic development. Like the manager at a Lodge at Kund, a small village before Uttarkashi. He said that his family lived in Dehradun and he lived in Kund as there are no proper schools in Kund. He said life was very tough in Kund and all over the state, except Dehradun. He said employment opportunities were low and if at all, they were at lodges and hotels, which anyway were closed down during winter. He said that he wished more companies came and set shop so that employment came their way and quality of life could improve. The same sentiment was voiced by scores of locals. Whomsoever we spoke to said that they wanted more companies to come and they wanted economic development. But when we told them that economic development would take away the charm of the hills, they said we city dwellers were very selfish – we wanted to live in economic developed cities but come for a few days to rugged and rural places to unwind while they (locals) continued to live in a difficult environment. We pointed out that such development could damage the fragile topography of the state; well, most felt that they wanted to live better lives and let Mother Nature take care of Herself. And She has…. So throughout the state, we came across this constant fight between economic development and protection of environment. The locals today agree that it was mindless development which perpetrated the disaster but at the same time, fear that the Govt will not bring economic progress to their state any more. They feel that the damaged roads and fallen bridges will take ages to rebuild. Pilgrims will go back home to their cities but they will have to live there, amidst the debris and struggle to get basics like food, water and electricity for months to come. The face-off between development and environment has no easy solution. With climate change becoming a permanent phenomenon, we have to brace ourselves for extreme weathers and more natural disasters. On that we have no control but what we can surely build on is the response to such disasters. Having proper disaster management systems in place, restricting the number of pilgrims being allowed like in Manasarovar could be a beginning. Also we need to look at the form in which we are bringing in economic progress. Building only dams and hydro power projects are not the solution. We need to put in more schools and colleges, set up companies which are lower in pollution like research and development facilities, training centers, local arts and crafts, even IT solution development centers, these are some of the facilities which can come up there- it will bring in employment as well as get responsible economic development. Above all, we need to understand that Uttarakhand and other hilly regions are unlike the rest of India so applying the same formula for economic progress is not the solution. One cannot help but wonder where is India Inc in all this – where is their Corporate Social Responsibility (CSR). GVK has (had?) a hydro power project in Srinagar on the Alaknanda on the way to Kedarnath. Jaiprakash Power has a plant at Vishnuprayag on the way to Badrinath. NTPC has a huge facility at Joshimath. Anil Ambani is said to visit the Badrinath shrine as soon at its opens in the summer and before it shuts for the winter. He lands there in a helicopter and is even said to have built a house there. We do not have any word yet from any of them – neither about the state of their plant nor about how they are helping. This is the time when CSR from India Inc should be at its highest. Last but not the least when we, the common people go to such fragile topographies to enjoy the peace and tranquility, we need to be more responsible too; ensuring we do not abuse the environment and do not directly contribute to its degradation. Mankind might make any amount of scientific progress but do we have the technology to measure the fury of Mother Nature? Or can any modern equipment build a temple as strong as the one built in Kedarnath over 1000 years ago? Read More
Posted May 14, 2013 | General | 364 Views   

RANBAXY – TO BUY OR NOT TO BUY?

By Ruma Dubey We woke up to the news that Ranbaxy has pleaded guilty , accepting the felony charges and it has also agreed to pay a criminal fine and forfeiture totaling $150 million and to settle civil claims under the False Claims Act and re... By Ruma Dubey We woke up to the news that Ranbaxy has pleaded guilty , accepting the felony charges and it has also agreed to pay a criminal fine and forfeiture totaling $150 million and to settle civil claims under the False Claims Act and related state laws for $350 million. A whopping $500 million and not to mention the loss of face. In the Press Release issued by the US Justice Department, it has stated, "In the largest drug safety settlement to date with a generic drug manufacturer, Ranbaxy USA Inc, a subsidiary of Indian generic pharmaceutical manufacturer Ranbaxy Laboratories Ltd, pleaded guilty today to felony charges relating to the manufacture of certain adulterated drugs at two of Ranbaxy's facilities in India and their distribution.” Well, the stock price is up over 3% currently, with more buyers than sellers on the counter. Does this mean that the market does not care about this ruling? It surely does but for the market, more than the felony charges or the loss of reputation, the fact that the company has already provided for the $500 million and this might have any material impact now is what matters. It was happy that the case which was going for over a year now has finally come to an end; so what if Ranbaxy was selling adulterated drugs? This is a huge issue of corporate governance, one of the worst cases ever. This attitude of the market is puzzling or rather a reflection of how we all think today. The material impact is all that matters but what about the fact that the company, an Indian company at that, has accepted that it manufactured adulterated drugs in USA? Isn’t that a big shame? The company has stated that this happened before Daiichi Sankyo was in the picture, under the old management. But that does not mean that because Ranbaxy is today under a Japanese management, it will suddenly get viewed differently. In India, adulterated drug is common news; it happens all the time. But the developed countries, especially USA does not view it as common news; it is a serious crime. Yes, under Daiichi, the company will turn into a new leaf but the blotch left on Indian pharma companies will be hard to erase. As such India is viewed as an extremely corrupt nation and such cases just go on to reiterate this fact further. Henceforth Ranbaxy getting back to business in full swing and US FDA gaining full faith will be thanks to the Japanese management. But Indian pharma companies will probably face more scrutiny that before. The acceptance of a guilty charge by Ranbaxy will now mean that the company will have to work harder to establish its new brand name, maybe move to Daichi and blot out the name of Ranbaxy completely. The new management will have to work on bettering its relation with the US FDA and try and gain back the trust. Last year, its exclusive six month agreement to sell the generic version of Lipitor ended in May 2012. Then in Nov’12 it voluntarily recalled Lipitor from the US markets as some glass particles were found in the drug in some select batches. Post this recall, its market share of Lipitor fell from 42.1% to 2%. It was only in Feb’13 that it resumed supply of the Lipitor generic from Ohm Laboratories to the US. All this has hit the company pretty hard on the financial front. For quarter ended 31st March 2013, the company posted a 90% (YoY) decline in net profit at Rs.126 crore. This can be blamed on the ‘base effect’ as last year in March the company was selling Lipitor exclusively. Its operating margins continue to remain a cause for worry – it came in at 6% in March quarter and for 2012, it was at 9.4%. Compared to its peers, it is trailing at much lower levels – Sun Pharma has an OPM of around 39%, Cipla is at 27% and Lupin at 22%. Clearly, Ranbaxy has a lot of catching up to do. So would you buy the stock now? Makes no sense as there will be a few more quarters of pain. And more importantly, will you buy drugs made by Ranbaxy? There is a tremendous loss of trust and that will take more time to repair than the operating margins. Read More
Posted May 13, 2013 | General | 399 Views   

AKSHAY TRITIYA – MAKES NO SENSE TO BUY GOLD TODAY

By Ruma Dubey Till a few years ago, was Akshay Tritiya even known or advertised like the way it is today? Most people did not even know the existence of such an auspicious day and like the various modern day concepts of Mother’s Day or Father’... By Ruma Dubey Till a few years ago, was Akshay Tritiya even known or advertised like the way it is today? Most people did not even know the existence of such an auspicious day and like the various modern day concepts of Mother’s Day or Father’s Day, this seemingly newly discovered ‘festival’ has come into being. How many really know the true significance of this day? Most would say that it’s the best day to buy gold. Why? Actually, practically speaking, it is probably the worst day to buy gold as prices hit the peak. Spiritually, as per the Indian vedic calendar, it an auspicious day to start new ventures or buy as asset. It is said that all meaningful activities started on this day will become fruitful. This day, the Sun and moon are at their brightest and this happens only once every year. It is also the birthday of Lord Parashurama, one of the avatars of Vishnu. It is said to be the day when Sudama visited his friend Krishna, and without uttering a word about his impoverished state, Krishna blessed Sudama and his family with eternal wealth and prosperity. That is what the day depicts – akshaya, which means eternal blessings. Nowhere do the scriptures or the great saints mention about the significance of buying gold on this day. In this new age of consumerism, goldsmiths/jewelers have hit upon an excellent marketing trick. They have interpreted this day as the best to buy gold – the best day to buy assets. For Indians, gold remains the best asset and hence the gold shops have very smartly cashed in on this day. Just like the various ‘days’ which are actually a gimmick of the greeting card companies, this is only purely a marketing gimmick which has been initiated by the gold shops. Today, it has become a part of religious rituals. Actually, being an auspicious day, one should invest in good assets and make new beginnings, right? That is the significance of this day. And that is precisely the reason why you should not invest in gold today. Gold as an asset makes no sense in today’s modern world of stocks, realty, bonds, FDs, PPF, etc. Surely most of us pay heed to the words of Warren Buffett and he too does not believe in investing in gold. In fact, way back in 1998, while addressing a conference at Harvard, he had said, “it gets dug out of the ground in Africa, or some place. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” And that is the truth. Today there is no utility for gold. It is too expensive to wear and flaunt as it could attract unwanted attention and so it merely remains almost always in the bank or home lockers. There was a time when gold was historically used as a currency and there were no alternate modes of investment. But today, it just sits there, not generating any cash flow – no bonus, no dividend, only the hope that one day it will give major returns, a hedge against inflation. But seriously, how many of us would ever sell the gold from the lockers to make money? Selling gold is like the last resort and rarely does that happen. So are we buying gold to simply hoard in the safe deposit boxes and feel happy about the notional gains made? Instead, if the money is invested in long term fundamentally sound stocks, surely the returns would be much better Why this fascination for gold? So why are we spending so much money on something which, in actual sense is useless, just a piece of metal in the safe? It is dug out from one “mine” to only be stored in another safe which you call “mine”. How aptly Warren Buffett sums it up, “ If you buy an ounce of gold today and you hold it at hundred years, you can go to it every day and you could coo to it and fondle it and a hundred years from now, you’ll have one ounce of gold and it won’t have done anything for you in between. You buy 100 acres of farm land and it will produce for you every year. You can buy more farmland, and all kinds of things, and you still have 100 acres of farmland at the end of 100 years. You could you buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, it was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill an unproductive asset.” Do not fall for the gimmicks today. Instead of gold, if buy you must, go and buy some good stocks or better still, start a venture which will benefit others around you, while you also grow with it. Anything which is hoarded is a sign of greed and selfishness. Are those the virtues you need to buy on this auspicious day? On a more practical note, most gold analysts expect a bearish trend to continue in gold and some are even talking of prices of Rs.22,000 to Rs.24,000/10 gms over the long term. Now, does it still make sense to buy gold today? Read More
Posted May 09, 2013 | General | 429 Views   

UCO BANK – BOLD , WELCOME STEP OF ‘NAMING AND SHAMING’

By Ruma Dubey We have always carried this grouse – of banks treating us differently from the big wigs or the money bags. It is a clear case of discrimination that someone like Vijay Mallya scoffs at his debt and banks, when he is amongst the b... By Ruma Dubey We have always carried this grouse – of banks treating us differently from the big wigs or the money bags. It is a clear case of discrimination that someone like Vijay Mallya scoffs at his debt and banks, when he is amongst the biggest defaulters in the country today. Yet, banks could not do much. But if me and you miss even one EMI? Banks will make living a nightmare! Call is sadistic pleasure or whatever; it was heartening to see one bank finally having the guts to take on the might of the big moneyed guys. UCO Bank is setting a trend. It issued an advertisement in the newspapers, with a picture of Nitin Kasliwal, CMD of S Kumars Nationwide Ltd (SKNL), who is the guarantor of a Rs 110.07-crore loan taken by Reid & Taylor. The company had defaulted on its loan and UCO Bank has taken this bold step of naming and shaming one of the the head honchos of India Inc. UCO Bank went ahead and also cautioned other banks against dealing with the company. The bank stated in the advertisement that it was more of a notice, wherein despite sending scores of reminders, the company had not liquidated liabilities of the bank. UCO Bank has already classified the account as Non Performing Asset. This ad was not a legal notice but mainly an attempt by the bank to bring this to the notice of others, so that they too become careful whilst dealing with this group. A few days ago, SBI had published a similar ‘name and shame’ picture of five of its defaulters. But these were small guys and surely, SBI could have filled up the entire newspaper if it had decided to put the picture of its list of ‘defaulting’ big guys! It did not have the guts but a much smaller bank has shown the way. It is not just UCO Bank but many others – IDBI, Corporation Bank, Bank of India, amongst others who are facing the same situation with the group. All (except IDBI) are mulling legal action though none of them took the extreme step of shaming the promoter and his company. Surely UCO Bank would have been forced to take this step when all other passive coercive actions would have failed. But the big change here – earlier when pushed to the wall, banks used to bury their face in the wall and mark it down to NPA, taking a hit on its balance sheet. All banks still do that. But this is for the first time that a Bank has shown a new way of probably pushing the big defaulters to the wall! Why not? Yes, when promoters of companies default, the banks should break free of their ‘political’ shackles and make full use of the given right to freedom of speech and expression. If banks can send hooligans to recover money from small house owners, stick large notices on doors of even smaller homes, surely bigger action is required when companies default on such large amounts. Our Finance Minister had told the banks famously that they should act against rich promoters of poor companies. The barb then was directed against Vijay Mallya but it extends to all the others too. Yes, the Indian banking is largely discriminatory. Someone like Mallya gets a waive off for crores of rupees of debt while people like you and me, would not get a waiver for even one single paisa. How is this fair? A flamboyant industrialist gets treated like a ‘responsible’ citizen when he has dodged taxes, not paid salaries, not paid for fuel and yet, goes around spending money on irrelevant purchases? Money power alone works, especially in banks. Emboldened by UCO Bank, others have also started talking about similar actions. Well, if this happens, for once, the newspaper might start getting interesting! PS: Newspapers are supposed to tell us the truth, ironically, to tell the truth UCO Bank had to issue an advertisement! Read More
Posted May 09, 2013 | General | 544 Views   

LBT – TO PAY OR NOT TO PAY?

By Ruma Dubey While the national news channels are busy covering the fiasco which we call democracy and the business news channels are covering the spike in stock markets, those in Mumbai are being put through a lot of hardship. In fact the pe... By Ruma Dubey While the national news channels are busy covering the fiasco which we call democracy and the business news channels are covering the spike in stock markets, those in Mumbai are being put through a lot of hardship. In fact the people in Mumbai do not know if they will get their milk or veggies/fruits, groceries; their food security has come under threat! The traders – wholesaleres and retailers are protesting against the imposition of Local Body Tax (LBT). The Maharashtra government has formally abolished Octroi in Thane, Navi Mumbai, Nagpur, Pune and Pimpri-Chinchwad municipal corporations and planning to replace it with LBT. It is to be introduced in Mumbai’s civic body, where the annual Octroi duty collection is about Rs 7,000 crore, from October 1. It has already been introduced in 20 out of Maharashtra’s 26 civic bodies. The Govt abolished octroi because it had become a completely corrupt system, with very little money trickling down to the civic body. The LBT is a new version of octroi except that it covers more people, is more transparent and will become a big money earner for the Bombay Municipal Corporation (BMC). In octroi, the goods in the trucks are physically checked by the officials posted at the various naka’s whereas in LBT, it is self assessed and one has to make payment online; there is no money exchanged between the officials and traders and that, in many ways helps it curb corruption. Octroi is harassment for traders where goods are forcibly checked and many of us at check nakas would have seen money being palmed off to the officials. Corruption there is blatant and transparent for all to see. Money is usually pocketed by the officials when most of the time no ‘challans’ are given, not to mention the serpentine lines at the nakas causing traffic jams. LBT is merely replacing octroi and will be valid on the sale or consumption of certain products and LBT will be charged on overall turnover of merchants. This has to be paid once every 40 days using online portals, cheque, demand draft or cash through a designated bank or counters of the civic bodies. The tax will be collected on the basis of the books of accounts like VAT. More importantly, it will be imposed on any trader with a turnover of not less than Rs.5000, which means almost every small shopkeeper, right from the paanwallah to the neighbourhood kirana will now come under the gambit of LBT. But the Govt has clarified that small traders with an annual turnover of up to Rs 3 lakh need not pay LBT. Basically it is a tax on purchase and not sale of goods. Suppose your shop is in Thane area and you are purchasing goods from outside Thane, then LBT will be applicable on Gross Purchase Value. And if you are selling goods outside Thane, and that area too falls under LBT, then the buyer will pay the LBT on the purchase. If you are buying/selling within Thane region then there will be no LBT but the trader will have to keep records of all buying and selling as there would be a yearly audit. When one reads all this, it comes forth that LBT, which is replacing octroi is surely much better, right? So then why are the traders protesting with this indefinite strike? Traders say that this is a double taxation as traders are already paying VAT. Plus traders say that with them now required to maintain books, records and other back office work, these admin costs will also be an additional burden. There is also worry that it will lead to a rise in the prices of essential commodities and will give powers to Municipal officer to grill the businessman about day to day activities. The picture will become clearer only once this agitation comes to a logical conclusion. The entire city is currently being held to ransom by the traders just as the politicians are holding the entire country to ransom. We in between, suffer all along… the price we pay for not getting out and exercising our voting rights! Read More
Posted May 09, 2013 | General | 337 Views   

VICTORY IN KARNATAKA – CONGRESS SHOULD FEAR, NOT REJOICE!

By Ruma Dubey After the victory in Karnataka, the Congress Govt should be worried sick and not celebrating. And the BJP instead should be rejoicing. The mandate of the people is very clear – they have zero tolerance for the corrupt and the... By Ruma Dubey After the victory in Karnataka, the Congress Govt should be worried sick and not celebrating. And the BJP instead should be rejoicing. The mandate of the people is very clear – they have zero tolerance for the corrupt and the BJP, given its Yeddyurappa and the Reddy brothers reputation has been punished by the people of Karnataka. The Congress has come back to power in this state after 7 years; that in itself means that the people have decided to give them a chance (lack of choice too) as they are utterly disgusted with the BJP as of now. They have punished the corrupt. This is what Congress needs to fear when polls come calling in 2014. People have shown that they do not tolerate the corrupt and Congress has given people enough reasons to trounce them to dust. And that is where the BJP needs to celebrate – as at the Center they are currently at an advantage. Yes, either of them when they are in power are corrupt and if people have to choose the less corrupt, then given the number of scams stacked up against the Congress, BJP could become the clear mandate. Surely the Congress is smart enough and would have woken up and smelt the coffee today. They too would have recognized the true verdict of the people – zero tolerance to corruption. So be assured, henceforth, everything that they do will be to ensure that this hurt of corruption is soothed with social benefits. Every action of the Congress will now be to only ensure that they introduce social measures which will benefit the people so that when they go to the polls next year, people will remember these benefits and not the various scams. Adjourning the Parliament sine die today was a step exactly in this direction. The rarely-speaking Prime Minister today stated that his Govt will do everything possible to get the Food Security Bill through and he even spoke of passing an ordinance for the same. Ordinance is not an Act, it is a legal order or law, issued by either the state or the Union Govt when the Parliament is not in session. This is like a temporary arrangement but eventually it has to be passed by the Parliament within six months and then it becomes an Act. And like the bulb popping up bright in the brain, this makes it clear why the Govt adjourned the Parliament today! The Govt wants to usher in the Food Security Bill, by hook or crook and it believes that this will become a major electoral victory, which it believes will help it erase the shame of the various scams. But the sad truth is that even if this Bill comes in, which is disastrous to begin with, the benefits will not start getting to the people with immediate effect. The time taken to implement this project might be too close to when it goes to the polls. So the people would not have felt the ‘benefits’ as such to forget the scams. One should now watch every move and action of the Govt. Every action would be a show of benevolence and distributing largesse in the name of working for the poor. Social benefit will be its only motto while the Finance Minister will work towards making the markets and FIIs happy. Together they are hoping that this strategy will help them win in 2014. All said and done, we can berate the Congress till the cows come home but the underlying truth is that those in the minority, people living on the fringes of the society still have faith in the Congress. It’s like this – after the way MNS treated North Indians, would they vote for the party? Not likely. Here, more than anything else, more than corruption, it is the ideology which the people fear. Similarly when there are other parties with extremities, when there is fear for life, most of the minorities would thus back the Congress as they feel at least they will be alive! And the Congress knows perfectly well that it is this ideology of its – live and let live which will work for them. Power corrupts and absolute power corrupts absolutely. That’s where the Congress is today – absolutely corrupt. 2014, if not earlier would be interesting to see, the absolute corruption of power. Read More
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