Anurag Jain's Blog
Monday, December 22, 2003

Ending the blog

In my last post, I mentioned about stopping blogging for a few days. Well, an amendment is in order: make that a 'permanent moratorium' (?). I wont be blogging anymore.

bbye bloggin. hello world.


I'd be away for a while and hence no blogging for the next few days. In the interim, to anyone dropping by at my blog I wish a very happy festive season. :)

Sunday, December 21, 2003

What does your city mean to you?

These are some funky descriptions (titled 'A mural of India') of different Indian cities that I got in an egroup sometime back. Pretty cool stuff.

Delhi -----The capital, seat of political power, the satta game! Republic and Independence day parades. Golgappes. Punjabi Dhaba khana! Sardars (not in the funny sense)!10 Janpath! Cheap affordable housing. HOT SCORCHING summers, COLD CHILLING winters. Pollution. Not very friendly neighbors, (what little I experienced). Chai in earthern pots! Ambassadors (cars here!). Black Cats! Sonia Gandhi!

Mumbai ------City of dreams. Economic capital. Movie Magic. Marine Drive, Gateway of India, Hotel Taj, Balajis opp the Domestic Airport (by the way guys he sells wonderful filter coffee). The Southindians of Matunga, the Gujjus of Ghatkopar, Sion Koliwada where Panjus and Sardars reign, Dombivili where an estimate of 1 lakh mallus reside, Mulund the new upcoming suburb, Bandra with its bandstand for lovers and Mount Mary for those who have faith in the almighty. Mumbai where we have a Haji Ali and Mahalakshmi face each other and most who go to one make it a point to go to the other. The UNDERWORLD. The Mumbai nightlife. The angry young man! The drunk actors and cute actresses. The city that lives by its train timings. Dharavi, Vashi, Dadar, Colaba, Bal Thackrey, BEST, bomb blasts, Prithvi Theatre, Bhel puri, neon lights, Ganesh Chathurti. Sachin’s Ferrari.

Kolkata -------Trams, mini buses, rosogolla, mishti doi(sweet yoghurt), buses named 12C/32A/29D , ISI(the one which deals in pure Statistics), Hilsa fish(rather any fresh river fish), horrific sweat, chappals, the 20 paisa (do you see that anywhere else in India?), most Nobel laureattes of India and an Oscar, people fiercely protective of their culture, Salt Lake stadium, chaotic, poor, an impossible mess of Communism and theft, yet afloat with hope and theatre. Sisters of Charity.

Chennai -------Chennai the new Tech hub. The Mysorpak from Krishna. The Masala dosas. The Marina beach, The sweet smell of Jasmine garlands. The AIADMK and the Almighty JAYA. Shivaji Ganeshan and Kamlahassan. Where temples are built for heroines and food distributed outside every theator that screens a Rajnikant movie. The Natural Icecreams. The temples, the yellow vermolin that shines on every mamis face.

Bangalore ---------The garden city, set dosa, the largest population Kannada speaking Tamils, Malleshwaram, MG, Kemp Fort, Software, no water, pubs, Vidhan Soudha, Vivesvaraya, spanking clean, sweet, relaxed, greatest weather. Techies who know the right rules to flirt and have a Doctorate in flirting (in the good sense guys). The lovely smell of Bangalore.

Pune ----Maharashtra's seat of culture, laid back, insane traffic, a few curious, but good watering holes, one of the most flamboyant race courses, has the fastest growing suburb of Asia, the Scotland of the East, pensioner's paradise. Osho, the ABC farms. The hot afternoons, the lovely nights and early mornings. The Misal and Usal. The Batatachi Bhaji!

Chandigarh ---- Modern city. Le Corbusier. Nek chand. Kalpana Chawla. Shabir Bhatia. Kapil Dev. Yuvraj Singh. Kiron Kher. Poonam Dhillon. Wide straight roads. Landscaped roundabouts. Sector 17 with its Coffee House, popcorn and softy ice cream. Absence of sector 13!. Criket stadium, CLTA. PGI. Education mecca for medicine (allopathy, homeopathic, ayurvedic, dental), engineering, art, fashion designing, architecture. You name it we got it. Girls zooming on two-wheelers. Hipsters vs patiala salwars. Nike vs Punjabi Juttis. Univesity campus with its Stuce (student center), cold coffee, samosas with chana and the English department. Two state governments and the luxury of union territory. Rock garden, Rose garden, Hibiscus Garden, Terrace Garden, shantivan, Sukhna Lake and beautiful view of the mountains. Mangoes, Amaltas, Bougainvilleas, termites:-( Kundis. NO Traffic Jams! Houses with patch of green in front. Quiet. No nightlife. Morning Walkers. Home to me.

Shimla ---- Toy train. 103 tunnels from Kalka to Shimla. Monkeys. Ridge with its Christ Church, Goofa restaurant and Gandhi statue. Scandal point, HQ of Bharat Scouts and Guides and post office. Tibetian market. Indian coffee House and Chinese shoe shops. Asian book house. Him Bakers. Gaiety theatre. Bengali tourists with monkey caps and locals with sleeveless sweaters and umbrellas. Lakkar bazaar lined with numerous hotels. Lower bazaar where tourists do not tread! Boarding schools. Cecil. Shimla Museum. Advanced Studies Institute. History trapped in buildings. Long walks. Flowers in April. Rhododendron lined forest road from St. Bede's to Jakhu. Fragrance of pine. Beautiful sunrises and sunsets. Overcrowding in summers. Trash down the hillsides. Still the Hill queen.

Saturday, December 20, 2003

Digamber Jain temples in Bangalore

(as noted in Aug 2002 from the board outside the temple in Balepet)

1) Shri Adinath Digamber Jain Mandir
141, R.T. Street, Balepet Cross
Bangalore - 53
Shri Dalichand Jugraj Jain Digambar Dharamshala
Ph: 2877452, 2875497
[Update Dec21,2005:
# Contact Mr Akhilesh at +91-80-22912990. He is in charge of Dharmshala at DIGAMBAR JAIN TRUST 7, Rt St, Cross 18, Balepet, 560053.
# Also, you can contact: +91-80-22264549 SRI DIGAMBAR JAIN MAHAVIR SANGHA Ak Lane, Chickpet, 560053.]

2) Shri Mahavir Digamber Jain Temple
D.K. Lane, Chikpet
Ph: 2264549

3) Shri Neminath Digamber Jain Temple
17/C, Main Road, 3rd Block
Ph: 3305659

4) Shri ParshwaNath Digamber Jain Temple
236/1, Jin Jyoti Complex
Magadi Road
Ph: 3350234, 3357554

5) Shri Adinath Digamber Jain Temple
102, Elephant Rock Road
3rd block, Jayanagar
Ph: 6634819

6) Shri Shantinath Digamber Jain Mandir
Putenahalli, J.P.Nagar
Ph: 6344476

7) Shri Mahavir Digamber Jain Temple
Konera Agrahar, Airport Road
Ph: 5293575

MoolNayak: Shree AdiNath Bhagwan
Shri Digamber Jin Mandir
141, Rangaswamy Temple Street
INDIA, PIN - 560053

Contact: Rameshbhai Bhandari
Tel 080-3346123

Digambar Jain Dharmashala
RT Street
PIN - 560053
Tel 080-2875497
Tel 080-2877454

MoolNayak: Shree NemiNath Bhagwan
Shri Digamber Jin Mandir
298-17-C, Main Road
3rd Y Block
Rajaji Nagar
INDIA, PIN - 560010

Contact: Manubhai Sheth
Tel 080-3305659

Friday, December 19, 2003

Mensa. Finally.

After flunking the Mensa (Bangalore Chapter) membership test a coupla years back, I finally cleared it last week and got the result yesterday: "Your percentile rank on this test was 1st, i.e. you are among the top less than 99 percentile of the population..."

Isn't it strange that you dont make the cut a certain point of time, and then you take another shot and make it? And it holds true for any kinda test (IQ, aptitude, technical etc). Reckon, the whole intelligence business is bizarre. But the best quote about IQ tests is by Richard Branson :

"I once took an IQ test where the questions seemed absurd. I couldn't focus on any of the mathematical problems, and I think that I scored about zero. I worry about all the people who have been classified as stupid by these kind of IQ tests. Little do these people know that often these IQ tests have been dreamed up by academicians who are absolutely useless at dealing with practicalities of the outside world. I loved doing real business plans, even if the rabbits did get the better of me."

That from a man, who turned business wisdom on its head! So much for IQ!!

Seriously, I dont think one needs a certificate of IQ/genius from anyone. And I am not saying this because I could get in the 'club', but I am saying because I am the same guy who flunked the same test coupla years back. And because I found the test as boring this time as last time.

Thursday, December 18, 2003

Campus Events: Movie - "Gladiator" Saturday, 20th December at 8.15 pm

-----Original Message-----
From: Film Club
Sent: Thursday, December 18, 2003 5:45 PM
Subject: Showing of "Gladiator" on Saturday, 20th December at 8.15 pm
Ladies and Gentlemen,

We welcome you along with your family and friends to the screening of the award winning movie "Gladiator" on Saturday, 20th December at 8.15pm.

The details are as follows:

Movie: Gladiator
Genre: Drama/ Action
Director: Ridley Scott
Cast: Russell Crowe, Joaquin Phoenix, Connie Nielsen
Language: English
Runtime: 155 minutes
Timing: 8:15pm
Venue: Auditorium
Certification: UK rated 15 and above.

The synopsis of the movie will be available at http://spidi

Dress Circle - The IIMB Film Club

Measures to Aid Understandability and Classification of Association Rules

Just attended a workshop on Data Mining headline topic by my PhD colleague Rajesh Natarajan. Specifically, it was about:

"Association rules are implication rules that bring out the affinity between items in a database of transactions based on their co-occurrence. First used in the market-basket context, association rules inform which article(s) are likely to be purchased by a customer given that he/she has purchased some other article(s), and thus give an insight into the customer purchasing behaviour. Unfortunately due to the complete nature of most of the association rule mining algorithms, association rule discovery has been plagued with the problem of generation of too many insignificant, irrelevant and obvious rules that do not add to the knowledge of the user (typically a retail-store manager). The problem is then to mine the most interesting and significant rules that would be useful to a manager.

We first discuss various approaches adopted by researchers to mitigate this problem. These include the use of interestingness measures, pruning of rules using templates, rule covers, grouping and summarization of rules. Interestingness measures try to quantify the amount of ‘interest’ that a ‘rule’ is expected to evoke in a user examining it. We discuss some of the approaches used in data mining concerning interestingness measures

We introduce an aspect of interestingness called ‘item-relatedness’ to determine the interestingness of item-pairs occurring in association rules. Association rules that contain weakly related pairs but still have a frequent occurrence in the database are the ones that are interesting. Relationships between items are captured by paths in a fuzzy taxonomy (an extension of the traditional concept hierarchy tree). Using three notions of relatedness from the fuzzy taxonomy structure, we arrive at a total relatedness measure. We demonstrate the efficacy of this total-relatedness measure on a sample taxonomy and explain intuitive correspondences between numerical results and reality. We then combine the relatedness of the item-pairs in an association rule in three different ways to arrive at ‘interestingness’. The interestingness measures are then used to rank association rules."

Cultural Branding of a City

All the talk and action of Bangalore Habba (Habba is the Kannada word for festival) reminds me of my post sometime back about the cultural branding of the city. Good to see that finally, efforts are happening on that front! But I still have to come across a song about Bang, Bang, Bangalore or Namma Bengaluru! :-)

Wednesday, December 17, 2003

B-School Events

1. Backwaters - IIMK paper presentation contest

IIM Kozhikode takes great pleasure in inviting you all to be a part of Backwaters 2004 (jan. 23-25). Three days of exhilarating journey and unadulterated fun with a synthesis of stimulating management games like online stock market simulation contests, paper presentations, strategy games, the workshops, and non-acad, zany informals, awaits you all. And when the day is through, come the cultural nites, the dinners and the happy bonfires.

2. Paradigm 2003 - M. P. Birla Institute of Management
MPBIM's Managament Fest

3. Quest 2004 - FMS
FMS' Marketing Case Study Challenge


Tuesday, December 16, 2003

Free Market Reforms in India

Sometime back, I wrote about Chilean free market reforms. Todya, lets talk about Indian economy reforms. I would like to put forth an argument in favour of Free Market Reforms.

Some people say that globalization of Indian economy is bad because it is hurting poor most. Now, I know in India, people are suffering due to reforms, (at least some poor are getting poorer) but that's short-term structural adjustments and in the long-term, gap shud get bridged. Even if you take employment as an indication, PSU jobs are shrinking (by a million in last decade) and organized privare sector has not created propotionate jobs (probably added a million jobs in last decade). But then again, beneficiary of reforms in India (so far) has largely been Services sector where multiplier effect on employment is not as big as it is in manufacturing. Manufacturing is just now hotting up and we hope to see benefits acrruing to the masses then.

Moreover, my take on the poor-are-worst-hit argument is that well, yeah, Free Market Reforms have contributed to increasing income gaps everyewhere, I agree. But go a layer beneath and see the anatomy of this divide: Its mainly due to the increasing incomes of a section of society (which have inherent advantage [even pre-reform] in terms of access to opportunities) and not so much due to the decrease in the income levels of the poor. If you see the statistics, poverty numbers (%) have been going down only, right? So the mechanism behind increasing income chasm due to market reforms works not so much by making the poor poorer as much as it does by making the rich richer. Hence, in relative terms yes, poor are getting poorer. But in absolute terms, no. So are we better-off post-reforms AS A NATION? Definitely yes!

Has any country benefitted 'conclusively' from the introduction of free market reforms? No, I must admit. But you can always take the example of what China did with its economy by introducing wide-sweeping reforms while India kept the dragon and 'other barbarians' at the bay by keeping its doors shut for larger part of its independent history. Why China appears in almost any discussion about India's future (QED!) today is precisely because of their success so far in introducing free markets! (China also has negatives in its reforms which I wont dwell upon here.)

Remember that while introducing free-markets, it has to be a balanced act. But the point is that by blaming free markets without specific evidence might be blaming one and only one factor while ignoring others, such as political management of reforms. For example, closer home in India, we celebrate the success of the IT industry. In Bangalore, we have a saying that IT industry got to where it is today only because Bangalore is so far from Delhi! Why is it that even after 10 years of kicking off of the reforms, there was no substantial disinvestment? Why did it take a Arun Shourie to start it 'really'? Over-focusing on one side while ignoring other can lead to economic imbalances, or worse, disasters. For instance, in India, we have been emphasizing on reforms in financial markets whereas leaving labor markets untouched! And you can see the signs of problem already!

The point is that saying free markets are be all and end all of everything is a big claim. And I am certainly not saying that. Because that, my friend, I dont think even Chicago Boys (GSB) would claim!

Sunday, December 14, 2003

Internet's social networking power

Its amazing how internet enables people to come into contact with each other. For instance, yesterday, I a met a Georgia State University's IS PhD candiate. How did he get in touch with me? Well, a few months back he was searching for Gramin Restaurant in Koramangala, Bangalore and he hit my blog!

Now imagine, accidental meeting on the web of two Information Systems PhD students across seven seas! Considering that IS is such a specialized area and that there won't be more than a few hundred students across the globe in this particular field, isn't such 'enabling of people meeting each other' by the Net great? Isn't that incredible?

Even though we take today's technologies for granted, I sometimes pause and wonder how amazing all this technology stuff is! In the last 4 months only, I have met at least 100 people (okay, okay, make that 95+) in the physical world, with whom my first point of contact was Internet. Isn't that neat? I, for one, am amazed by the power of Internet!

Saturday, December 13, 2003

Agile Organizations? Yeah, rite.

How do organizations deal with the 'changed' environment? Its a well known concept in management that there's a time lag between the external environment changes (e.g. new technological interventions in the marketplace) and the organizational changes. This lag is even more pronounced in the case of technological changes. There's usually a big gap between technological innovations and managerial innovations. (This argument actually forms one of the pillars for my very own research.) Organizations take time to adapt their processes to the changed enviorns. Thats why the war-cry for flexible organizations etc. But, for all the management research crying out loud for the need of agility, are today's organizations really nimble? Well, the research proves that so far, they aint.

How are today's organizations -- in the world of unprecedented amount of IC technologies availability (think remote work, outsourcing, 24x7 etc) -- dealing with the change? The answers, my friend, are blowing in the wind!

Friday, December 12, 2003

Emerging Technologies & Technologies for Rural areas

Here's my take on emergent tech:
* From global business point of view, I think wireless is one of the most promising technologies that have happened in recent times. WLAN, 802.11, RFID, Sensor-networks, opportunities are limited only by our imagination. Some smart people can sure come up with altogether new apps for Wireless tech.

* From emerging markets point of view, I guess anything that drives price-performace ratio down is the one that would make impact. From that perspective, Linux combined with specialized hardware (devices made for specific usage like 'mandi' info etc) seem most promising.

Specifically for rural India, I guess, the solution could lie in: "the joint ownership of the product." Rather than reducing price per piece, we reduce the 'price of ownership for an individual.' To penetrate the hinterland with ICT products such as Simputer, iStation, Tabletpc, XYZ, you need to show the PoC (Proof of Concept) to the populace that it actually works and that it actually benefits them. One can not just 'plan' and 'think' that people in rural areas need these products. One has to actually test-market such products, and I can't think of a better model than joint (or Panchayati) ownership of such a device at a village (or 5-10 houses) level.

Its sort of like 'Fractional Ownership', a concept very popular in Aeroplanes. There also, the product is too expensive for a single person to buy, and hence people go for a joint ownership. Only the price point is different in two cases (Aeroplanes vs Rural Technology Products). But the point of similarity is that, at the respective price points, the product is too expensive for the customers in both sets! And thats why the potential of Fractional Ownership.

Furthermore, I would also like to be cautious in that lets not be victim of ivory tower planning when talking of ICT4D. Lets not make people cross road when they dont want to. Remember what happened to Simputer? M just trying to say that maybe we need to think about a lot of infrastructural (e.g. availabilty of basis schools, which no tabletpc can substitute) issues before we talk about electronic devices.

Wednesday, December 10, 2003

ATF: Indian Airline Operators' Burden

Continuing on yesterday's post, today lets talk about the state of Aviation Turbine Fuel in India. ATF's pricing in India has long been known to be irrational and been the subject of many aviation sector restructuring reports. The data here is mostly taken from ToI reports over the years. The essential point is to draw attention to ATF' prohibitive costs.

* The most important thing in making civil aviation affordable, as things stand today is ATF. The most important thing that keeps costs high is the domestic price of aviation turbine fuel. If there's one crucial component in making economics of an airlines work is, its Aviation fuel. More so in India: Aviation fuel costs account for nearly 30 per cent of IA's operational costs. Globally, average the ATF price is Rs 7,959 per kilolitre. In some places, fuel is even cheaper: in Singapore it costs Rs 7729 per kl, in Kuala Lumpur it costs Rs 7,659 per kl and in New York Rs 7,804 per kl. But in India, the average cost of domestic ATF is Rs 17,094 per kilolitre, more than double the global average. At these rates, fuel comprises 40 per cent of the total operating cost of local airlines. These high costs restrict competition by making small aircraft operations non-viable. Even international carriers try to minimise refuelling in India, by filling up elsewhere as much as possible. For example, one return ticket from New Delhi to Thiruvananthapuram will set you back Rs 24,000, but you could buy fly a longer way - Delhi to Colombo for example - for Rs 14,000. And the Colombo package will include lodging.

Even after deregulation, the average price of ATF for domestic flights is around Rs 19,000 per kilolitre as compared to the international price which is around Rs 9,200 per kilolitre. The domestic price is nearly double that of the global rate due to high Customs duty, which works out to 39 per cent, and huge sales tax imposed by states. In the case of domestic production, the government imposes excise levy of 16 per cent.

Apart from the taxes, the pricing policy also discriminates between international airlines and domestic carriers. While global players pay much less, domestic carriers carrying out international operations are not provided concessions on par with their counterparts from other countries.

The cost of ATF comprises about 30 per cent of total air travel cost for international and 22 per cent for domestic sectors, according to civil aviation minister Nawaz Hussain. Aviation Turbine Fuel (ATF) taxes for Indian state-owned and private airlines, affects profitability adversely. Substantial central excise and central sales tax on aviation turbine fuel impose tremendous financial burden on the carriers leading to higher passenger tariff. Because of these high taxes, it's today cheaper to fly from Delhi to Bangkok than to Port Blair. We have to correct these anomalies.

Local sales tax on ATF currently ranges between 20-39 per cent across different states, with Kerala imposing the highest tax at 39 per cent. IA and Jet have been asking for a reduction in ATF sales tax, as at present, they have to pay a tax ranging from 20-33 per cent to the state governments. And, state governments are not willing to reduce the slabs as it's a major source of revenue for them.

To reduce the ATF sales tax, the Centre will have to take it out from the states' purview and include it under declared goods category. Also, categorisation of ATF as 'declared good', as was done for ATF supplied to turboprop aircraft, needs to be done. Then the tax can be capped at a 4-5 per cent level.

However, the ministry is taking independent initiative to coax and convince state governments to lower the sales tax on ATF and has so far succeeded in Andhra Pradesh and Goa where the tax has been reduced to 4 per cent. The Andhra Pradesh government has already cut the local sales tax on ATF to 4 per cent from 22 per cent earlier and other states are expected to follow suit. The ministry had also got an assurance to this effect from the Assam government, sources said. The ATF rates in other states range from 20 to 39 per cent.

* Anamolies in domestic vs international fares

Domestic fares are at present 23-30 per cent higher than international fares for comparable time and distance. Also, one can fly almost 41 per cent longer on the international sector than domestic for the same price. A Delhi-Bangalore return flight costs as much as a Delhi-Dubai flight even though the latter takes 42 per cent more time. Also, a Delhi-Coimbatore flight costs as much as a Delhi-Bangkok flight while the latter takes 41 per cent more time, according to a report of the CII National Committee on Civil Aviation.

This cluprit being taxes, again. State governments levy sales taxes which amount to as high as 39 per cent in Kerala. Added to that was the 16 per cent excise duty and 15 per cent Inland Air Travel Tax (IATT) charged on basic airfare.

For instance, officials say, the ATF price in the international market in May was about Rs 11,000 a kilolitre, while the same was made available to foreign airlines operating out of India at Rs 13,000 (a Rs 2,000 markup placed by Indian oil companies). IA and Air India secured ATF for Rs 16,500 for its international services while the fuel was made available for domestic operations at a whopping Rs 19,500. Therefore, the tax element (post markup) on Indian soil is a clear Rs 6,500 on a kilolitre of fuel.

In a recent petition to the government, IA said instead of reducing taxes, Tamil Nadu has actually hiked it from 25.2% to 29% while Orissa revised it from 20% to 22%. Only Andhra Pradesh has been proactive in helping the aviation industry by slashing sales tax to 4%. Port Blair also does not levy any tax on the fuel. The average sales tax for domestic airlines works out to 25% for IA with the highest being levied by Gujarat at 36% and Kerala at 34%. IA wants the sales tax to be brought down to a uniform 4% by placing it as 'declared goods' under the Central Sales Tax Act. More importantly, there is no sales tax on ATF sold to foreign airlines as per ICAO Convention 1944, a benefit IA wants for its international operations in order to have a level playing field with its international competitors.

The impact of sales tax on IA annually is Rs 255 crore while the entire industry including private airlines are faced with a tax bill of Rs 475 crore. The excise duty expenditure on IA is to the tune of Rs 130 crore (Rs 250 crore on the entire sector). The impact of withdrawal of excise duty on ATF on the central government is around Rs 250 crore in a year, which is only a minuscule share of the Rs 1,00,000 crore collected in the form of taxes from oil sales. IA says despite high rate of sales by states, the collection on ATF is a negligible portion, 0.42%, of their total sales tax earning.

The sales tax wrangle has continued for the past several decades, with foreign airlines refusing to pay local levies at various airports and the states imposing a sales tax of between 20% to 39% on international carriers refuelling at their airports. The foreign airlines stopped paying the tax, citing bilateral treaties under international aviation conventions, but the burden for the past three years fell on the oil companies, Indian Oil, BPCL and HPCL, who have been paying on behalf of the airlines.

* Discrimination against domestic players

While there was no sales tax on ATF sold to foreign carriers in the country, both IA & Air-India and private players have to pay taxes on ATF for foreign operations.

* Current players bleeding

Out of the current two private national players, Jet faces an accumulated loss of Rs.279 crores (June 03) while Air Sahara does not publish its financial results since it is a closely-held company. With Indian Airlines too in the red, the market is not left with a single national player who can boast of being in the black.

The losses of Jet have only increased from Rs.21.57 crore in 1999-2000 to Rs.80.05 crore in 2000-01 and Rs.177.53 crore in 2002-03, indicating that the airline has plunged deeper into the red with increase in market share. The impression created all the while about the success of Jet has been tarnished by the losses disclosed in the information provided in response to a Parliament question.

From ET, a primer on Civil Aviation Fuels


There are two types of fuels used in the aviation industry i.e. ATF and Avgas. Avgas is used in the piston engine aircrafts used by the flying schools where as ATF is used by the turbine powered aircrafts such as jets and turbo-props.

The Avgas prices in India have risen from Rs.18 per litre in January 1998 to Rs.58 per litre at present as against Rs.25 to 30 per litre in US and Australia. This has led to 150% increase in the operative cost of a flying school aircraft making the flying training in India unviable. Consequently 7 out of 13 private flying schools and 10 out of 27 government flying schools have closed their operation during the last four years.

Avgas is not produced in India and is being imported by Indian Oil Corporation. It attracts customs duty of 39.2% comprising of basic customs duty of 20% and countervailing duty of 16%. Reduction in customs duty on Avgas would resolve the problems faced by flying schools to some extent.

Annual import of Avgas is only to the tune of 3600 kilolitres, 65% of which is consumed by the Defence sector and balance by flying schools. Due to low requirements, Indian refineries do not produce Avgas. Therefore reduction of customs duty on Avgas would not affect the Indian refineries. Also the impact on revenue will be nominal because of low volume of imports.


Customs duty on Avgas should be reduced from 20% to 10%.


Tuesday, December 09, 2003

Aviation Sector Reforms

Naresh Chandra Committee has presented its eagerly-awaited first report to the government. The second part of the report which would look more at the avaition infrastructural issues is due in next eight weeks' time. The first report which was presented yesterday, recommends:

- High level of Inland Air Travel Tax and a host of other levies on air travel should be abolished and replaced by a lower ad valorem cess at 5 per cent of airfare. Doing this, the cost of flying within the country could come down around 25 per cent.
- Government should allow for 49% foreign direct investment (FDI) in domestic airlines, and lift the ban on foreign airlines investing in domestic airlines.
- Scrapping of the route disbursal guidelines, which stipulate mandatory operations by domestic carriers to service remote areas like the Northeast.
- Reduction of various taxes like inland air travel tax (IATT) and foreign travel tax (FTT). The total taxation should not exceed 5% of the airfare and the sales tax on aviation turbine fuel (ATF) should be capped at 4%.
- Privatisation of Pawan Hans which runs helicopter operations.
- Allow 100% FDI in companies running copter operations. (Copter operations are seen to be high potential one)
- Privatisation of all airports. The committee has also favoured separation of air traffic control (ATC) services from the Airport Authority of India (AAI), which owns all airports in the country. ATC services should be handled by a separate government-owned.
- Setting up an independent regulator, Aviation Economic Regulatory Authority, to regulate airport charges.
- Regional operations by small aircraft, with a seat capacity of 80 and less, should be encouraged by scrapping landing and parking charges.

This all sounds good but when (and if at all) would this be implemented? I hope sooner than later. Its hightime that we had a boom in civil aviation for all the socio-economic strata of populace. Here's one to low-cost aviation.

PS: More on state of ATF in India's aviation scene tommorrow.

Monday, December 08, 2003

Retail sector: Overcapacity under way?

With all the recent reports about millions of sq.ft. of retail property under development, looks like we are headed towards overcapacity in the retail sector. Will there be enough demand to sustain the current capacity-building or will it be the same story as white goods MNCs overestimating Indian middle class market in the mid/early 90s?

Some comments from my friends on this topic

In my opinion it is too early to talk of over capacity as the concept of retail mall in India is still in the nacent stage and has not been fully appreciated. What will happen if Wal-mart decide to enter India and revloutionaise the relail industry ? The current players are still not playing the right game and have not fully integrated their operational effeciency as giants like Wal-mart have done. Retailing in all forms will begin to emerge in a more productive manner.

*Sandeep Sharma
Its a key issue which also indicates some level of herd mentality among retailers. Yet It seems to be in the right direction as MDV points out. Indian middle class or the mass consumer is definitely growing with lot of aspiration values and desires for changes in retail formats.

Retailers looking for top line achievements is also tapping as much retail space and get into organized retailing which at present is far below even compared to SE Asian countries what to talk of Europe and US and the likes of Walmarts. In fact petro retailers like us have also started looking at our retail station as retail space for future and working on various plans.

So it is only a matter of time ( right now I agree it is the nascent stage) . Infact, likes of BIG bazzar , food world etc have already shown the way on optimization of retail space with all possible integrations.

* Prof. Dwarika Prasad Uniyal
iI think we need to go to the historical evolution of retail formats in UK, then in US. The development of high streets and downtowns, and slowly the
malli'sm. In india, the traditional markets have evolved around specialised mandis and shops were developed on the both sides of main road of a city which worked as life line for that city. With organised retail just a decade old and the type of formats emerging, its still very early to say which ones will survive and evolve because like any business, in retail too the operational efficinces and critical know how will take some time. Secondly its typical of india that despite of bigger formats coming. hybrid and smaller retailers have grown up too. Since indian consumer class is very heteregenous and so many sub classes, for every CP there is a karol bagh, for a Forum Mall there is gharia hat , for every CG road there is a releif road which is very necessary to cater to the diffeentiated needs of segmented people.

Also it took WAL MART 40 years to reach where it is today. The biggest advantage with indian retailers is that they can benchmark against the best, avoid the mistakes early players have committed and reduce the evolution time to 5 years which was 25 in case of eurpoean formats. With FDI still a question mark, i guess indian retailers will have to learn on their own, understanding indian markets. The question of overcapacity will come little later as even consumers will learn to adapt themselves to new culture of shopping.

Though the shift has happened, from metros to A class towns to B class town.. retailers have slowly realised that skewed growth will be detrimental for their business. Even mall developers will realise that after a point no place can sustain if there is an overcapacity. for example 4 malls in gurgaon???
why can't we have 2 malls there and 2 at ludhiyana and chandigarh?? they are equally lucerative markets...? leaving you with this thought

* Abeer Chakravarty
Overcapacity isn't an issue yet and whether it will be is too premature to conclude at this nascent stage. We are still grappling with formats and markets, and not in a stage of consolidation and conclusion yet. Since we love jumping into a trend, I suspect there would be overcapacity.

Property developers would need to better understand that just any property won't help - key issues would be high-street location for city malls/supermarkets/chains, and anchors for malls. Too few are considering the crtitical need to have huge parking spaces with ability to cart the purchases to the car boot. So it is more likely that we will have wasted capacity rather than overcapacity.

* Raja Sekar
At present i see overcapcity happening only in certain clusters like Gurgaon,Delhi in the near future. But there is good demand for malls if we go beyond the
metros.These places will be the engines for the growth of organised retail after the metros.

Building capacities will also definately bring down one of the main entry barriers like high rentals and improve operational efficiencies.This will also help
to bring in new and smaller players with new concepts and services and contribute to the overall gowth of the organised retail industry.

About Prof Dwarika's point on opening malls in non-metros, he's very right: Just recall what Walmart did in the US. And also recall what Sam Walton said about what he did in the 'country' with Walmart: "First lesson we learned was that there was much, much more business out there in small-town America that anybody, including me, had ever dreamed of."

Of course, there are contextual differences between the two countries but I would still bet on Indian smaller towns being totally 'viable'.

But my original query actually has a relation to this thing that happened with Walmart and the US. What I meant initially was not the evolution of the retail so much, which is essentially supply side (in short-term anyway), but the customer side, which is the demand side. The (disposable) income levels in US were/are very different from what they are in India. So, we can build malls after malls in India with the current thought process being "If we build, they'll come". But my question is: would the reality of lower income levels, and probably overestimation of demand, lead to a major dip in organized retail's prospects in near future (2-3 years)?

My understanding and opinion is that there'll be a major indigenization (spelling?) of retail formats after a failure of (majority of) mega malls after 2-3 years (Remember goofy off-the-shelf ERP implementation at Shoppers Stop leading to major losses 2 years back?) . And thats what will lead to a second phase of indigenous retail practices leading to a better retail future. Just a guess, no hard facts!

Sunday, December 07, 2003

Campus Event: Romantic Comedy on Sunday,7th December

"We welcome you along with your family and friends to the screening of probably one of Asia's most enjoyable romantic comedies in recent times!

Movie: My Sassy Girl
Genre (Romantic Comedy)
Director: Jae-young Kwak
Cast: Tae-hyun Cha,Ji-hyun Jun
Language: Korean with English subtitles
Runtime: 123 minutes
Timing: 6:30pm (1830 hours)
Venue: Recreation Room
Colour: Colour
Certification:Parental Guidance required.

Dress Circle - The IIMB Film Club"

Saturday, December 06, 2003

Bangalore Events

1. SPIC MACAY presents Ke Jun from the Jiangsu Kunqu Opera, China
Date: 11th Dec 2003, Thursday
Time: 11.00 AM

Venue: Cathedral Composite PU College and High School, Richmond Road.
For details/passes logon to or contact Ms. Nivedita Honnatti

2. In the Hour of God
Pattabhi Rama Reddy is proud to announce the staging of "In the Hour of God" on December 11th, 12th & 13th at Chowdiah Memorial Hall, Bangalore. This play is inspired by Sri Aurobindo's Savitri. We are staging it as a tribute to Snehalata Reddy who had a great love for the theatre. Please do come and forward this to anyone who will be interested.
Direction & Music by Konarak Reddy
Featuring: Arundhati Raja, Ashok Mandanna, Hema Mandana, Jagdish Raja, Kirtana Kumar, Sameer Sheikh, Shiva Subramaniam, Tuffy Taraporevala
SFX & Surround Sound : Little Jasmine Films/DIGIFUNK Lighting Design : Daniella Zehnder
Video Edit : Challam Bennurkar Choreography : Tripura Kashyap Sets : Rajesh & Studioline
Sets Execution : Basil Carter Costumes : Julie Kagti, Sutra & Grasshopper
Photography : Sorab Mehta Sound & Lights : Reynold's Sound & Light Stage Management : Sneha, Shibani, Priya, Vijay, Nitin Publicity : Ahalya, Kala, Anjula AT CHOWDIAH MEMORIAL HALL, DECEMBER 11th, 12th & 13th 2003 Tickets are available at KC Das, Casa Picola (all branches) & Supermarket (Brigade Road)

3. Massive protest programme - 6 December

On 6th December various secular and progressive groups, organisations and individuals are jointly organising a massive protest demonstration in front of Town Hall. This protest is against the attempted communalisation of the Bababudangiri shrine by the Sangh Parivar and also against the communal mobilization by the VHP for its Virath Hindu Samajothsava in which Pravin Togadia will be participating.

We request all of you to gather in front of Town Hall by 4:30pm. Please bring placards, banners with you.

After the protest, there will be a cultural programme at Samsa open-air theatre (next to Town Hall) from 6:30pm onwards. A film on the Bababudangiri issue, made by Pedestrian Pictures, will also be screened during this programme.

Please join in large numbers to make the protest a success.
- Bababudangiri Souharda Vedike (Bangalore)

Thursday, December 04, 2003

IT doesn't matter? Oh, believe you me, it does.

(I wrote this piece a few months back when the heat was on about Carr's article. Got around to putting it at my blog only today.)

Nicholas Carr, HBR's editor-at-large, has captured the attention of the IT community worldwide with his article IT Doesn't matter. For the right reasons, I guess. And, for saying the wrong things, I am sure.

As you can see on Carr's page and all over the web, CIOs, academicians, and others in IT profession have been reviewing the article critically. Coming to my own, very personal critique, I am not saying he's wrong just because I am from IS community. I am saying this because some of his text does not stand ground. As IS professionals, I think its imperative for us to join the debate. Debate not for the sake of debate, but to put the issue on record. Here's my opinion on the subject.

By now, the whole world knows that Carr's thesis is that IT has become a commodity and hence it has stopped being important in a strategic way.

Now, let us see what makes him say that. Major support for his whole argument is derived from parallels drawn with the earlier technologies in the history -- railroads, electricity. He presents beaten-to-death growth figures of kilometers of railroad, megawatts of electricity, and hosts on internet. With all this, Carr seems to be implying (actually he's quite explicit) that IT is a mature technology today, and hence going the commodity way. Even Moore's law is mentioned to support the falling-costs-and-hence-commoditization theory. But he forgets to mention the Moore's IInd Law, which says that the cost of manufacturing chips (putting up plants for new fabrication technologies) is going up by a huge magnitude. And, in any case, if we are saying that we will stop at the current level of available processing power, then just wait till the next MIPS-hungry utility comes along. And this is not the vendor-speak kind of talk here: Jim Gray, Turing Award winning scientist says (Ringing the death knell on tech's high-growth era), "I've seen the 'end' at least twice in my career - only to be surprised by the next wave. My guess is that this computer thing has just gotten started". Look around. People are already talking about non-silica processors, and even clockless silica chips. Hence, even though its a fact that IT is widely available today, there still would be innovations in hardware and software, rocketing the pricing upwards that would make it more available to some firms than others. But does that matter for strategic advantage? According to HBR article, it (scarcity) does. And more importantly, 'only' this matters for competitive advantage. But as you will see in the argument in the following paragraph, its just not so. Its true in short-term only and that's where Carr's got it wrong: He has taken a myopic economics-only view of IT (investment, cost, return) and hence, the inevitable conclusions.

Coming to the issue of IT becoming 'boring', even though IT might have become an 'infrastructural technology', the reason of strategic advantage to firms is not the availability of technology (or non-availability to competitors: 'scarcity' as the article says), but how firms put IT to use, a critical aspect of the whole startegic IT argument, and something that Carr mentions only in the passing! There will be another American Airlines, another American Hospital Supply reaping strategic benefits as long as they 'get IT right' and not by making sure that their competitiors don't have the same technology.

In her Oct 1987 piece - "Infotech and Corporate Strategy", Prof Rosabeth Moss Kanter (HBS) classified the effects of IT into two categories: 1) Transaction efficiency (TE), and 2) Communication Control (CC). Further, she said that "In the long run, the CC area will be the one in which the greatest strategic possibilities wil be found." Now, not by any reckoning has that 'long run' ended yet. In fact, it just got started. After putting enterprise-wide systems in place, firms are discovering that inter-organizational collaboration is becoming more and more important and increasingly the source of competitive advantage for all players in the supply chain.

The point is that predicting demise of IT - a technology with high innovation and growth potential even today - as a differentiator by showing the growth charts similar to historical technologies is highly misleading. Taking the dotcom/investment bust of late 90s as the sign of maturing of technology is even more so. There are occasional blips in every technology's journey and what we are witnessing for last few years could sure be just that for IT, nothing more. Predicting too much on that basis alone combined with historical parallels, without taking into account the vibrancy, current developments, and innovations going on in the industry/technology, is quite a dangerous proposition and should be criticized.

Wednesday, December 03, 2003

RainSeed 2: TownsEnd, Yelahanka; Saturday, December 6

The second edition of The RainSeed Festival (hopefully, this time, the weather will be crisp, cold and clear) will find Thermal And A Quarter, Bangalore's favourite rock act, sharing stage for the first time with Antaragni, on December 6, 2003, Saturday, at TownsEnd, Yelahanka. Another eco-village on the lines of Trans-Indus, TownsEnd provides the perfect ambience for this mostly acoustic show.

Antaragni has made waves for its unique blend of Indian folk, and for the instantly recognizable vocal style of frontman Raghu. Featuring a revolving cast of stellar musicians, this is one group that is always a treat to watch live. As the opening act for Bryan Adams in Bangalore (2001), Antaragni acquired an even larger following. Currently, the lineup has Raghu on guitar and vocals, Allwyn Fernandes on guitar, mandolin, khomak, oud and percussion, Josy John on bass, and Gopinath on drums and percussion.

Also on the bill is stand-up comic Ashvin Matthew, a self-confessed 'clown at home, and generally all through life.' Ashvin studied drama in Sydney, Australia, where he honed his comic talents working as a waiter in a restaurant. He also studied radio and television production in Cyprus, where he seriously did the university, pub and festival comedy circuits. With recent performances at Sparks and various corporate events, he's all set to split those sides.

Put that on your to-do list for this weekend: Saturday, December 6, 2003 at TownsEnd, Yelahanka. 8 pm onwards. Donor passes at Rs 100 available at the venue. Be sure to spread the word.

For more information, call 9845384297

MIT's OpenCourseware's India Connexion

To the surprise of MIT students, turns out that MIT's OCW (content) was actually developed in India!

Tuesday, December 02, 2003

Richard Branson's Losing My Virginity

Recently laid my hands on this autobiography, and had a fantastic time reading it. Some interesting trivia facts were like The origin of the name 'Virgin' :

While still at the crypt, when the small team of Student was considering a new name for their fledgling mail-order records business, they wanted an eye-catching name, that could stand alone and not just appeal to the students. One favorite suggestion was "Slipped Disc". Then one of the girls suggested:

"What about 'Virgin'? We're complete virgins at business."

"And there aren't many virgins left around here," laughed one of the other girls. "It would be nice to have one here in name if nothing else."

"Great," Richard Branson decided on the spot. "It's Virgin."

I have put this and many more notes, trivia, and excerpts from the biography here.