A Nation running low on Pride

I have been conducting a secret little survey on my own since quite some time. My target segment is the circle of my friends and colleagues. Obviously this segment represents average intellect, middle aged, middle class population of our country. Objective is to find out our “top of the mind” answers to the questions –

1> As an Indian, what are you proud of?
2> Which brand/product represents India in the globe?

Let us analyze them one by one –

What are we proud of? –

In most of the cases, the answer has come from ancient era – oldest civilization, expertise in old form of science & medicine, invention of Zero, oldest religion etc. In some cases, it has been some thing what we happen to be a part of – largest democracy, diversified culture and language. In few cases it has come from more recent time frame – fast growing economy, science and technology hub etc. Very few have referred to Rabindranath Tagore, Satyajit Ray and C V Raman.
If we consider the ancient glory as a measure of present national Pride then, Iraq and Pakistan should have been top of the list. The second set of reasons is happen to be by chance and we also know the problems associated with those. And for next set, conviction is too shallow. The current economic engine is running on only one USP – low cost labour – and we all know it is only matter of time before some other country emerges cheaper than ours. Little probing of the people in the last bracket revealed that they do not have much idea about these famous personalities and their work.

The bottom line is, the current generation is seriously lacking anything from the recent past to be inspired about. Here I use the word “recent” in a broader sense. In the time line of history, a period encompassing few generations can be considered as recent.
We, as a nation do not have any memorable and significant achievements in recent past which all of us would be proud to be associated with. We have not won any battle, nothing significant in the field of sports. There is no invention or scientific development what we can remember, neither there is anything in art and literature.
I know that there is some significant moments of glory but hardly any of them could touch the heart of the mass. Almost all of them are limited to a small section of population. Here problems are two folds – there are not many incidents and as a nation, we pay very little attention to those.

This issue is little more serious than it appears to be – it is one of the main reasons for our attitude towards our own country and its heritage. High level of corruption, no respect for national heritage, flag & anthem, alarming inefficiencies and umpteen numbers of social and political conflicts are some of effects. National pride is one thing that unites a nation beyond all differences and creates a unique strength for propelling to higher levels. We, as a nation, lack this. If you have any doubt, a soul search is solicited.

What are global Indian brands? –

The popular answers are –

Bollywood, Chicken curry, Yoga, Magic (rope trick and “Fakirs” included), Indian Music, Indian Spices (& Basmati rice), Indian elephant etc.
If you notice, all these are very generic and vague most of the times. Foreigners only have some hazy ideas about all these, nothing really concrete. All of these are not branded. At times philosophical and spiritual I believe.
I would recommend the readers to ask this question to any one from western (and eastern too) countries. You will see the difference on your own.

I asked this question to my Irish colleague. I thought he would be a softer target to try the question compared to Germans, Englishmen and Americans. He replied without any hesitation “Guinness” – a truly Irish brand – across the globe.

Human Resource – the most underutilized one

In every possible occasion, many of us acknowledge the importance of Human factor in today’s business. It is true that HR is the main differentiating factor between average and successful companies. In today’s world, capacity, technology and infrastructure, important ingredient of success, can be managed easily. What bothers me is the mismanagement of the most vital cog – Human Resource.

In complex business environment, the effectiveness and efficiency of an organization largely depends of the human factor. A motivated team can produce much better results even with limited technology and capacity compared to a depressed team with class-leading technology. I have seen this happening in my own career.

Let us see how we mismanage this – the gap between what we “actually do” and “should do” could be a quick measure of the current status.

- Human resource management & development is not a responsibility of Human Resource Department (HRD) alone. Everyone in the organization manages human resource in our daily life in one-way or other. It is important to be aware of this fact and impact positively. In real life situation, it is left to the HRD.
- Human resource is to be managed and developed in on-going manner. Most of us limit ourselves to a great extent to believe this. It is not an annual or bi-annual activity like conducting performance reviews.
- Managing small activities (shift scheduling, accounting attendance & leaves, salary calculations etc.) occupy organizations’ time and energy. Nothing is left for value added stuff. How many of us are involved in Competency mapping, Gap analysis, succession and development plans?
- We always say – “Recruit a person based on his attitude because skills can always be imparted” but do exactly opposite, time and again. Most often, the only question asked outside the work related area, is “Tell me something about yourself”. And almost in all cases, this is just for making the candidate comfortable.
- How many occasions the organization offers the employee a “career” not a “job”? I am surprised to realize that in most of the cases the organization does not have a plan in place for a new recruit beyond one year or the current project in which a person is inducted. What happens if a person decides to work with the same organization for his legitimate career span? Can the organization provide him with a challenging and satisfying career? I leave this to HR fraternity to answer.
- Lower the organizational level you are in, smaller the attention you get from the HRD. But logically speaking, the lower rungs need more attention and development. These are the levels in the organizational pyramid, which directly involved in generating the output. More motivated they are more prosperous & responsive is the organization.
- Money is the least motivating factor – the most is challenging assignments. Almost all organization increases the remuneration as a retention strategy and invariably fails in the process. In every annual review, salary increase has become a norm (considering inflation, it is a must), but who cares about enrichment of job content? In my career, I have seen many leaving job after getting a promotion. I have also done once. The fact is – with promotion, salary increase but in most of the cases, the job content remains the same.

- Every employee is generally categorized based on his or her expertise. In an organization, we all are compartmentalized based on our expertise and growth becomes limited automatically. HRD conveniently forgets that new expertise can be acquired. Lateral shifts are very important for individuals for gathering a holistic view of the business arena. With increased job satisfaction, it generates better outputs.

Income Tax – the Indian story – Concluding Part

In one of my earlier posts (dated May 28), I promised to come back with the remaining part of the story – where the money collected as Tax goes.

With little effort, one can find out the necessary details. It took me some time to arrange the data the way I understand. Let me confess that I am not an expert to analyze this. My effort to understand this is merely from a layman’s perspective. Any expert comment from any direction is always welcome.

The above charts indicate the details of Income and Expenditure of our government. I took the published data for the year 2007-2008 for illustration. I am sure any other recent year would show a similar trend.

Let us see, from where Government generates its income –

. For the financial year under consideration, the total income was Rs.709,373 Crores.
. Maximum amount (61% of the total income) is generated thru’ collection of Taxes
. Under tax, Corporation tax, Excise duty and Income tax are the toppers
. As an individual, we are directly affected by the Excise Duty and Income tax, which adds up to 35% of the total income
. The next highest source of income is Debt capital, gathered to bridge the gap between earnings and expenses – in more technical terms it is called ‘Fiscal Deficit’. That means, in that particular year, Government had to borrow Rs.143,653 Crores from various sources to meet the ends. As all of us understand, this amount attracts interest and creates a large hole in the pocket. Its impact is seen in the Expense chart.

The important aspect I would like to underline is the high dependency on Tax. In fact, other than Tax, there is hardly any other source of income. Another highlight is the high % of borrowing. 20% of the income is from borrowing. It was 3.17% of that year’s GDP.

Now let us look at the expense chart –

. In both Plan and Non-plan segment, the highest chunk goes as Revenue expenditure. As the definition goes, it is not for generation of assets.
. Non-plan expenditure is considerably higher than Plan expenditure
. 24% of the total income goes in repaying the Premium and Interest of loans earlier taken. That means, whatever we borrowed, all of that and little more goes in repaying the earlier loans. If we relate it to individuals, it looks like withdrawing from one Credit card account to pay outstanding of another. We all know, how dangerous it is. It is also very difficult to come out of this cycle.
. Another 10% goes in subsidies

According to the Economic Survey, India was investing 22.1% of its income to the economy during the first reform five reform years, 1992-97. This declined to 21.7% in the last five years. That means, most of the money is spent in running the government machinery. It is like running a power plant primarily to cater to its own needs. Hardly anything comes out as a net output.

To relate this to our own life, for a moment, let us consider this to be our monthly balance sheet. That means, we are borrowing every month and spending a considerable sum in repaying the earlier loans. To come out of this, there are few ways –

. Earning more
. Cutting down unnecessary expenses
. Minimizing borrowing
. Spending / Investing money more judiciously to generate more income in future

I know it is easy to manage if our Income goes up. But in most of the cases, we manage our expanses to come out of the deadly cycle.
The same is applicable to government. Instead of taxing the already burdened salaried, middle class, either it should find out new taxpayers or improve the efficiency of its machinery to generate more output with a given input. Otherwise, the continued deficit will put the improvement projects into the backseat. No need to say, it will have negative impact in coming years.

Some of the following Links are worth visiting –

http://timesofindia.indiatimes.com/Business/Lower_fiscal_deficit_can_sustain_low_interest_regime/articleshow/2822368.cms

http://www.rediff.com/money/2005/apr/12fiscal.htm

http://www.theindiastreet.com/2008/05/india%E2%80%99s-fiscal-deficit-is-the-highest-in-the-world.html
http://www.livemint.com/2008/07/01093536/Bleak-fiscal-current-account.html

http://www.thehindubusinessline.com/2003/12/12/stories/2003121200030800.htm

http://www.crisil.com/india-budget-analysis/index.html#