Leaders in Making...

Leadership: the work in itself carries a lot of weight. Although leadership the duty and leadership the right both upgraded their importance and relevance over time but the basic definition remains the same. Several management scholars define leadership as “Process of social influence in which one person is able to enlist the aid and support of others in the accomplishment of a common task”. There are several alternate definitions also out of which the one I liked the most was “Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.”

I think I like the second definition more because of several reasons. The first and foremost will be because it explains the basis task of a leader: “Creation of Way”. Yes that what a leader is supposed to do. He needs to guide the energies in right direction so that collectively it creates enough energy to produce some exceptional results. The second reason is: “Making people contribute”. Although this sounds more of a manager’s role but after all a manager is just a subset of the larger group called leader. Making people contribute is the most important and challenging task for a leader. This becomes more demanding because the outcome of this task does not only depend on the leader’s ability but also on the willingness on the individuals in the team to work. And yes, the leader is supposed to create that willingness.

The third and in my view the most important one is: “Making something extraordinary happen”. And trust me there are reasons behind my saying that this is the most important reason. I think we all will agree that an object becomes more and more important to us if we are more used to it. The more you see your pet, the more you affection you develop for it. Ditto here. All through these days, in the last 10 years, I have seen extra ordinary things happen. I have seen young engineers working day and night to keep the conveyor belts running. I have seen the managers producing some results which were earlier thought to be near to impossible. I have seen entrepreneurs building a new brand everyday.

All this has happened because of the never ending zeal of each and every individual of this nation. With such great results in hand one thing that I am very much assured of is that we always had correct set of leaders who can channelize the contributions to produce extraordinary things. And with the young brigade taking the lead at many occasions, the future lies in good safe hands. With so many opportunities coming and each one of them grabbed by a potential leader I can safely say that Leaders are in making…..

ULIP vs Mutual Fund...the insight

A couple of days ago there were some announcements from the Life Insurance Council, a lobbying body formed by life insurance companies. Broadly, these announcements appeared to say two things. One, that the terminology of Unit-Linked Insurance Plans (ULIPs) would be made uniform. And two, insurance companies would refuse to underwrite insurance-linked schemes issued by mutual fund companies.
Behind both these issues is a struggle that is going on between the life insurance companies and mutual funds. Here’s what this fight is all about. Mutual funds and life insuran
ce are two distinct products, one being intended as a savings vehicle and the other a safety net. However, over the last few years this distinction has become blurred. Today, if one looks at the actual money that is flowing in, then the life insurance companies are also in the business of running mutual funds. These mutual funds are called Unit-linked Insurance Plans (ULIPs). ULIPs have a mixture of the characteristics of both insurance and mutual funds. Crucially, the mutual fund aspect of ULIPs is regulated by the government under a very different set of rules compared to the real mutual funds. From the investors’ point of view (which is obviously the most important point of view), the biggest difference lies in how much of his money is actually used for his insurance and his savings and how much is taken away to pay the commissions to agents and the expenses of the insurance company. The second big, related difference is the quality of the information he is given about his investments.
Mutual funds deduct not more than 2.5 per cent as the agent's commission. And this deduction is 0 per cent (by law) if investors don’t use an agent and go directly to a fund company. In ULIPs, the agents' commission varies, but in the first year, it could be anywhere between 25 per cent and in some cases, 75 per cent. There are a lot of things in finance that are difficult to understand, but the difference between paying 0 per cent commission and 75 per cent commission is not one of those. Even the difference between 2.5 per cent and 25 per cent is pretty easy to understand.
Next is the issue of transparency. One of the most interesting is the vast difference between the meaning of 'Net Asset Value' (NAV) between ULIPs and mutual funds. In a mutual fund, the announced NAV is net of all expenses and charges that the fund company deducts. If your investments were worth Rs 1 lakh when a fund's NAV is Rs 22, then it will be worth Rs 2 lakh when the fund's NAV is Rs 44. That's it. The arithmetic of insurance companies is different. ULIP's NAVs are effectively pre-deduction. The NAV may double, but your investments won't double because the insurance company will reduce the number of units you hold to pay for expenses and commissions etc. This means that the announced NAV has no clear and transparent relation to what the unit holders are actually earning.
However, ULIPs are phenomenally successful. News reports say that last year, a total of Rs 55,000 crore was invested (if invested is the right word) in ULIPs. In the same period, around Rs 16,000 crore was invested in mutual funds. We are often told by the insurance industry that this is because ULIPs are a superior product. That's complete rubbish. ULIPs are successful because the ultra-high commissions and charges make insurance agents far more aggressive salesmen than those of any other financial products. These charges also enable insurance companies to spend far more on advertising. All of which is the unitholders' money. The net result of high-pressure sales is that savings that would otherwise have ended up in mutual funds, bank FDs, PPF, post office and many other asset types is ending up in ULIPs, where a good proportion is diverted to pay commissions.
The direction that the India's insurance industry has taken in the last few years is a huge regulatory failure on part of government. This industry was opened up to foreign capital and provided with a relatively lenient regulatory framework so that it could bring insurance to India's under-insured masses. Instead, it has ended up focusing its energies (and capital) on selling expensive and opaque mutual funds that are dressed up as insurance. It's tragic that there is no move to even recognise that this problem exists. Now, even higher foreign ownership is on its way, supposedly because more capital is needed to ULIP the under-ULIPed masses even harder.
It simply isn't in anyone's interest to bring up these issues. Most large mutual fund companies aren't bothered either because they are part of financial conglomerates that have flourishing insurance businesses.
It's up to you, as an investor, to understand the issues and do what you think is in your best interest.......

.........Article published in Value Research

White and Black....The Big Fight..

How do we define black? Or how do we define white. Since our childhood days we
are fed with a concept that black signifies bad while white signifies good.
This idea was always supported with similes’ like truth is white while evil is black.
But in my view this definition or concept or white and black can not be taken
to be so absolute. It’s very abstract in nature. As far as my knowledge goes,
there is nothing more black than a Black hole and there is nothing more white
than a Halo around God's head....Every other thing in this world falls in
between these two extremes. By saying so i mean that nothing in this world is
completely Black or Completely while , but they are present in various shades
of grey... Some containing more black and less white while some opposite to it.
Even we human beings come in such a shade...few nice people...few bad
once...and mostly in between...

But by saying so, can we simply say that those containing more of Black are bad
or those containing more of white are good...my answer will be NO. We can not.
Actually the definition of good and bad comes from the society we live in, or
rather the acceptance of the society as something to be good or bad. Take
example of a natural calamity hit country where a man has to fights, sometimes
even kills others to get his share of food to serve his family..this man
obviously would be respected as sensible and responsible father, husband or a
son. contrary to this ,place the same man in some posh area of a super city of a
developed country doing the same thing, fighting with people and taking his
share from the economy. Will the respect factor towards him remain same? No. He
probably would be sent to jail for his deeds.

Furthermore, even if the meaning of black or white does not change, and they
keep on signifying what they were meant to, when we divide this Society into
sub-socities the respect for Black and white start depending on what king of
sub-society you live in. In worlds where power rule, my be being more of evil
will earn more respect amongst people around you but a place where love and god
means more to people , you need to keep yourself clean...

This chase or good or bad, truth or evil, white or black will never end. With
changing times and situations, we will keep on oscillating between the two
extremities with a search going on within as to what we are.....

The great indian saga of bomb threats...Policing truths!!!

9 blasts in bangalore, the IT hub of India...17 blasts in Ahmedabaad, the second Mumbai of India....30 live bombs discovered in Surat, again a business hub in the west. Whatever be the plan, it was very simple but extremly well executed. Targeted to implant terror in a common man, is what it did and is what it was supposed to do. Media talked about it, politicians talked about it and we, the common man talked about it. News kept on flashing....All metros on high alert. People beware!!! We kept the track for few days and then we moved on, as we always do.

Had this been the only scenario, it would have been good. But the aftermaths were about to follow. The so called saviours of Law, The Great Indian Police, came into action. Patroling jeeps kept roaming, some also parked at busy signals to make sure that nothing suspicious happens in the area.

I live in saltlake, one of the posh areas in the motroplitan kolkata (if u consider kolkata ro be a metro). Saltlake was one of the locations in kolkata which always remained vulnerable to any bomb threat,not because the place is crowded but because sector 5, the IT hub of kolkata, is here. So it was very obvious in such situation that the Police strength would go up. Police wallahs from all corners of kolkata were poured into Saltlake, to avoid any bomb blast occurances. was this their real motive? was this they always wished to do?

The answer is NO. Once this blast issue lost the real heat out of it, they started doint what they really came for, what they really were looking for. The loot. Parked at all major signals, they started stoping all passing vehicles , generally after 10 in night. Checking them to find nothing, asking for papers, checking papers to approve your validity and then finding any stupid possible reason to threat you to that they could fine you for this. This kind of a situation is very risky for a typical IT guy like me because we generally arlook like baskets of dollars to them.

I adore Bangalore Police for one reason, they have setup a standard in this practise of terrorising common man and sqeezing money out of em. They would stop you and as a token, would ask you for papers. If you are in hurry just drop a 100INR note and leave. But certainly kolkata police have got to do a lot of work towards setting up such standards. On bad days, you will be stopped by them which will be followed by a long non ending personal interview.Once you come to know that they are not going to let you back free, you start negotiations. It generally starts with a whooping prices that might dare to match some of the M F Hussin's arts and ends up being a typical cheap fashion market shopping. But mind it, you need to be a very mean bargainer to them or else you will lost out a lot of your hard earned money. A word of caution: when you are negoating, do not see him as a Policeman and you as a simple vehicle owner, but see yourself as a customer who is about to buy a service which you never asked for,trust me you would stand better chances.

Police reforms have been a favourite topic for all the high end officials at GOI. They always demand for more power in the hands of Police for better law and Order enforcement. But they are so terrorising with the little that they have now in their hands, can we trust the devil to be noble after giving more powers.......