Sunday, July 29, 2007

"Growth is Life" vs. "Think Flat"

What a weird topic, it feel at the first glance.

But these are the captions of the biggies in India. Both the companies have given the best value to the stake holders. They have brought millions of middle class people to a place where their dreams can be fulfilled.

The first one is the motto of Reliance Industries Limited and the second one of Infosys.

Let me first speak about 'Growth is Life". I am able to associate this with Reliance for sure in the aggressive mood in which they are expandint themselves into the horizons. Their growth is both vertical and horizontal. Every step that they take seem to go inline with the caption. They are providing stupendous growth to the stake holders. They are providing great growth oppurtunities for the employees. Their vision to grow in every sector is also quite evident.

But, for the split that the Ambani brothers had, everything was inline with their strategy to grow, grow and grow further...

Now, if I think of "Think Flat" Iam having trouble associating the same with Infosys. It is quite obvious that the caption is inspired from the book, "World is Flat", and hence one can understand that it is somehow related to Globalization. But, one needs to think lot more to understand how is "Thinking Flat" associated to Infosys.

After googling :) for some time I could understand that, this caption was more of a call to the industry than the motto of Infosys in the first place. Though Infosys is trying to be lean and implement the same even for their customers, they are actually calling the people in the industry to think flat and ensure that the reduction in costs is implemented lot better. There is a link related to Infosys and its caption of "Think Flat"...

Th explanation given in that site wasn't quite impressive to make one believe that Infosys' real motto is to think flat. I guess the strategy is not quite laid out to make believe the motto. I assume that one of the credits of a very good leader is his ability to make his employees understand the vision, mission and the motto of the company. I always adore the Infosys management for their acheivements and the drive and enthusiasm they have created in their employees. But, in this case I somehow felt that there is some lack of communication towards making people understand the importance of this caption.

Let me not conclude anything yet, as Iam yet to think Flat :)

Saturday, July 21, 2007

Cost of Oil

The eqn for the cost of oil is:
Cost per barrel x no. of barrels consumed per day x 365

India's oil consumption: 4 million barrels per day
Cost per barrel: $60
Total oil cost per day: $240 million = $0.24 billion per day
Total cost per year: $87.6 billion

If we assume the no. of barrels to be constant then, cost per barrel is the only variant in the above equation and that would decide the total cost.

So a $1 increase in the barrel price would mean an additional 4 million x 365 = $1460 million = $1.46 billion dollars
Similary a $10 increase would mean an additional $14.6 billion dollars of burden on our GDP.

India's GDP = ~30,00,000 crores of rupees = ~30,000 billion rupees = ~$700 billion
Percentage share of oil consumption in GDP = 87.6/700 = ~12.5%

That means if we were to import all the oil that we are consuming, we'd be spending around 12.5% of our income on oil expenses alone.

But, since we are importing "only" 70% of our oil requirements we are spending nearly 8.5% of our income on oil.

Average growth rate of India = ~9%
So, ideally next year the GDP should be $700 billion x 9% =~ $763 billion

But, if there is around $15 increase in the price per barrel, even with the same consumption levels, the additional burden would be,
15 x $1.46 billion = $21.90 billion.

This means that instead of a GDP of $763 billion, India will clock only $763 - $21.9 = $741.1 billion which would mean that the growth rate would be,
(741.1 - 700)x100/700 = ~6 %

All the glitter about India shining would suddenly appear dim...People will now have to give serious thought about the reality.

This story is not necessarily true for India alone, but the gloomy picture is all the more relevant to every country in the world which are highly dependent on oil.

Friday, July 06, 2007

Laws of nature

While I was coming on the bike just a weird thought flashed my mind that why are there such huge differences around us.

Necessity is the mother of invention!
Nature will always find its way...

We have all these sayings which seem to reflect the general way of happenings.

But, why is it that people have things which are not required for them.

Even one of the mathematical laws nurturing the nature says that when things start going bad, they really go bad. It is always exponential changes that nature seems to be associated with.

I observed the following contrasting things around.

1) People who are happy seem to be unite well with their family members.
But people who have problems, cannot cope up with things.
2) People who are rich, in terms of money, are very calculative in their expenses.
But people who are running short of money seem to always encounter things which
asks for shelling out loads of money.
3) People who think a lot tend to get things which do not need brains.
People tend to get challenging stuff, when they are least prepared for it.
4) Yesterday I was watching Wimbledon and I could sense that the top seed players had
more things going their way whereas it should have been the other way round.
5) Traffic rules are followed in places where they can live even without those rules.
Rules are most violated where they ought to be implemented to the fullest.
6) Seas get most of the rains.
Deserts are getting more desert.

And goes on...

Why didn't nature handle all these misuse of resources?
Why are there such huge adversities?
Why are there such huge differences and still nature speaks about equality?
Why isn't everything given similar launch pad?

Why aren't resources distributed to locations where they are most required?

Does nature frame rules in such a way that the oppressed will always remain as oppressed and the aggressor gets more aggressive by the day?

From human being's perspective, the final question is, why should the rich become more rich and the poor poorer?