dr. manmohan singh – an icon - shri guru tegh bahadur ... · dr. manmohan singh – an icon ......

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Dr. Manmohan Singh – An Icon One of the more non-political faces of Indian politics, Dr Manmohan Singh is best known as the "liberator" of Indian economy. As the Union Finance Minister in the Narasimha Rao government (1991-96), he liberalized the economy to put India on the path of globalization. EDUCATION/Qualification: 1950: Stood first in BA (Hons), Economics, Punjab University, Chandigarh 1952: Stood first in MA (Economics), Punjab University, Chandigarh Causa); PhD thesis on India's Export competitiveness OCCUPATION /Teaching Experience: Reader, Economics, 1959-63; Honorary professor, Jawaharlal Nehru University, New Delhi, 1976 and Delhi School of Economics, University of Delhi, 1996 and Civil Servant Working Experience/ POSITIONS: 1971-72: Economic advisor, ministry of foreign trade September 16, 1982 - January 14, 1985: Governor, Reserve Bank of India. January 15, 1985 - July 31, 1987: Deputy Chairman, Planning Commission December 10, 1990 - March 14, 1991: Advisor to the Prime Minister on Economic affairs March 15, 1991 - June 20, 1991: Chairman, UGC June 21, 1991 - May 15, 1996: Union finance minister October 1991: Elected to Rajya Sabha from Assam on Congress ticket Finance Minister of India, (21 June 1991 – 15 May 1996) Leader of the Opposition in the Rajya Sabha (1998–2004) Prime Minister of India (22 May 2004 – Present) OTHER ACCOMPLISHMENTS: Adam Smith Prize, University of Cambridge, 1956 1957; DPhil (Oxford), DLitt (Honoris Bizonomist-10 Page | 1 Nishant Singh

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Page 1: Dr. Manmohan Singh – An Icon - Shri Guru Tegh Bahadur ... · Dr. Manmohan Singh – An Icon ... winter morning, a hectic schedule, jam-packed lectures, a few phone calls followed

Dr. Manmohan Singh – An Icon

One of the more non-political faces of Indian politics, Dr Manmohan Singh is best known as the "liberator" of Indian economy. As the Union Finance Minister in the Narasimha Rao government (1991-96), he liberalized the economy to put India on the path of globalization.

EDUCATION/Qualification:

·1950: Stood first in BA (Hons), Economics, Punjab University, Chandigarh

·1952: Stood first in MA (Economics), Punjab University, Chandigarh

·Causa); PhD thesis on India's Export competitiveness

OCCUPATION /Teaching Experience:

·Reader, Economics, 1959-63;

·Honorary professor, Jawaharlal Nehru University, New Delhi, 1976 and Delhi School of Economics, University of Delhi, 1996 and Civi l Servant Working Experience/

POSITIONS:

·1971-72: Economic advisor, ministry of foreign trade

·September 16, 1982 - January 14, 1985: Governor, Reserve Bank of India.

·January 15, 1985 - July 31, 1987: Deputy Chairman, Planning Commission

·December 10, 1990 - March 14, 1991: Advisor to the Prime Minister on Economic affairs

·March 15, 1991 - June 20, 1991: Chairman, UGC

·June 21, 1991 - May 15, 1996: Union finance minister

·October 1991: Elected to Rajya Sabha from Assam on Congress ticket Finance Minister of India, (21 June 1991 – 15 May 1996)

·Leader of the Opposition in the Rajya Sabha (1998–2004)

·Prime Minister of India (22 May 2004 – Present)

OTHER ACCOMPLISHMENTS:

·Adam Smith Prize, University of Cambridge, 1956

1957; DPhil (Oxford), DLitt (Honoris

Bizonomist-10

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Nishant Singh

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Bizonomist-10

·

·Euro money Award, Finance Minister of the Year, 1993;

·Asia money Award, Finance Minister of the Year for Asia, 1993 and 1994

Our Prime Minister seems to be the most qualified PM all over the world.

A career bureaucrat, professor, economist -- there are many things that distinguish Manmohan Singh but politics is not one of them. When elections were announced in 2004, few expected this low-profile man to become the country's prime minister.

But Singh - the first Sikh to be prime minister of India - is no stranger to the portals of power. He has spent more than three decades in different government posts and in 1991 he was plucked from relative obscurity to become finance minister in a Congress party-led government. He held that position until 1996 and through those years, analysts say the former International Monetary Fund official nudged India's socialist economic policy down the road of reforms and deregulation, opening up the country for outside investment for the first time.

He entered the post when the Indian economy was stuck in a quagmire -- its foreign exchange reserves were near rock bottom, and the country was close to defaulting on its international debt.

But Singh, who was also head of the Reserve

Padma Vibhushan, 1987 Bank, managed to reverse nearly half a century of socialist planning and excessive bureaucracy. During the 1991-1996 government, he implemented sweeping reforms ending the "License Raj," the regulations that forced businesses to get government approval to make nearly any decision.

The economist also devalued the rupee, slashed subsidies for domestically produced goods and privatized some state-run companies. By 2004, India's economy, which had crept along for decades, was racing at more than 8 percent. As a young student from a simple Sikh family, Singh attended Cambridge and Oxford universities on scholarships, and spent the next few decades teaching and writing about economics.

"This is a government which will create an investor and enterprise friendly environment," Singh said after being named as the man to head New Delhi.

Singh has a following across party lines, with a clean reputation both as a politician and as an economic reformer. He said the Congress-led coalition will push ahead with a reformist agenda that "seems to be addressing the problems of poverty ... agricultural stagnation ... the jobless growth."

Singh had a tough task -- pushing for change while balancing the demands of parties in the coalition -- but he signaled he was ready for it.

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Words of Blessings

Bizonomist-10

Sri Guru Tegh Bahadur Khalsa College, University of Delhi is a premier institution of higher learning in Delhi and is named after Ninth Guru Tegh Bahadur Sahib who sacrificed his life to uphold the basic human rights of mutual coexistence and respect for each other's faith. It gives me great pleasure to congratulate the students of Business Economics for bringing out the third issue of Bizonomist, the Business Economics magazine. I also commend the faculty and staffs for helping the students use the facilities available in the College. The creative and ambitious plans of our parent body, the Delhi Sikh Gurdwara Management Committee, have already yielded significant improvements to our campus in general and to academic spaces in particular.

I wish the faculty and the students the best in showcasing the creative efforts in Bizonomist.

S. Joginder Singh Walia , Chairman, Governing Body

The academic year 2009-2010 shall witness the passing out of the first batch of BA (Hons.) in Business Economics at Sri Guru Tegh Bahadur Khalsa College. Many of them will complete this programme with full University honors. The programme while teaching the rigours of economics, commerce and trade, trains the students through interactive corporate placements during summers. During these formative years, we ensure that the students remain engaged in the process of intellectual formation as academic learners. They are well advised and mentored.

I congratulate the Business Economics students on bringing out the third issue of Bizonomist, incorporating the creative wisdom through different write ups.Dr. Jaswinder Singh, Principal

Today when I look back at the day when we released the very first edition of our departmental magazine, I promised myself that there will be many more editions to it. And here we are with the third edition of B.A. (Hons.), Business Economics magazine in hand.

I, as the head of the department, would fail in the task if I don't thank the people who have worked day and night to accomplish what once looked like a distanced dream. Also, I congratulate the entire team on their success and wish them many more such accomplishments.Dr. Bibhu Prasad SahooHead, Business Economics Department

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Echoes from the Editor's Domain

Bizonomist-10

“Each small step taken towards achievement of a goal is a success in itself.” With this idea in our mind and pens in our hand, the Bizonomist team sat down 2 months ago to achieve what you hold in your hands.The 2nd edition of the 'Bizonomist' brings itself amongst many other things, hope. It's a hope that the more organized approach of the magazine will appeal exuberantly to the minds of budding economists like you. Another change that we have brought about this year is the 'e-Bizonomist'. For the first time, the magazine will be uploaded on the college website so that more and more students can read it.

Mr. Hitesh K. SachdevaMagazine In-charge

The wheels of time moves on, reminding us of our achievements and failures, as we toil hard towards the cherished horizon through the trough and crest of life. It's a moment of euphoric ecstasy of creator as we unravel the third edition of our annual magazine.

Rewinding the wheel of time a few months back we recall a usual day of college- a beautiful winter morning, a hectic schedule, jam-packed lectures, a few phone calls followed by the meeting for our magazine. It was then, when we realized that something as small a newspaper could inspire something as big as the 'Bizonomist' (pardon the irony…:p).

Enroute to the golden arc of cherished vision, we express our heartily gratitude to our mentor 'Hitesh sir' for his optimistic approach, guidance and encouragement without which this mammoth task wouldn't have been realized today. We acknowledge his persistent faith in us to put in our best in whatever we do.

It is our sincere hope that 'Bizonomist' will reach even greater heights in the coming years. All in all we've dished out an appetizing issue, so all you readers fest on…!Happy reading!!!!

Rajiv Gupta (Editor)Lovlish Garg, Megha Makhija, Himani Detwani, Kushal Makhija (Co-Editors)

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Megha Makhija Himani Detwani Kushal MakhijaLovlish GargRajiv Gupta

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Bizonomist-10

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President Speaks 6Business Economics at Khalsa 7

COP 15The Copenhagen Climate Summit 10Climate Changes, People don't.. 13US diplomacy towards BASIC at Copenhagen 15We are the Change 17Global Warming: A Convenient Lie? 18Quick Bits 20

OUT OF THE BOXSense the senses to become a Sensational seller 54Incentives are the cornerstone of modern life 57Literature for leadership 58Bidding adieu to teachers 59Dangerous Drugs 60Gone Are The Days 61Winds of Change 62

ENTERTAINMENT ECO.Indian Film Industry and its Economic Impact 22New class of Assets – IPL 24Sports Economics 26Video Game Industry 28On a Lighter Note 30

BBE PaparazziFINANCIAL RECOVERYGlobal Recovery 32India's Resilience to Economic Downturn 34

M & AThe Gradual Indian Takeover of Global Companies38Mergers And Acquisitions 40Theory of Mergers and Acquisition 41

INDIA INC.Commemorating the pride of India 46India Inc. 49On a lighter Note 53

CONTENTS

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Bizonomist-10

At last it's out on time! The hours of hard work and toil the editorial

board has put in has been published as “The Bizonomist”. Not to forget

inputs by others as well. We have all worked under the guidance of Mr.

Hitesh Sachdeva backed of course by all the staff.

The task of being the president of the BBE Society and being able to guide

others would be incomplete if I do not mention my many hands; Rajiv,

Lovlish, Megha, Himani, Kushal and the organizing committee of

RAAH. The icing on the cake is Vidit who is available round the clock.

Our mentor and guide Ms. Sukhvinder Kaur also deserves a special mention.

I would like to sum it all up by saying that “The Bizonomist” is a collective effort of the entire

BBE Society at S.G.T.B. Khalsa College.

Happy Bizonoming!

Param Singh SahniPresident Raah

Society-in-charge Ms. Sukhvinder Kaur

President Param Singh Sahni

General secretary Vidit Verma

Vice president Gunjan Rana

Joint secretary Gagan Anand

Treasurer Sheekha

Joint treasurer Bhavishya Kohli

Class Representatives 3rd year Manas Suneja, Ashita Khanna

Class Representatives 2nd year Chirag Sharma, Meghna Jain

Class Representatives 1st year Yash Jain, Vrinda Seksaria, Vishakha Bhambri

Advisory Board Lovlish Garg, Arjun Khurana, Sahil Kohli,Navneet Kumar, Snigdha Kumar, Anuj Kaul

Placement Cell (Placement Cell in-charge) Shubhankar Rath, Himani Detwani, Meenakshi Dhingra

(Members) Karan Thakur, Lakshya Chadha

SOCIETY BEARERS

President Speaks

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Business Economics at Khalsa

Bizonomist-10

ABOUT SGTB KHALSA COLLEGE

Sri Guru Tegh Bahadur Khalsa College is a constituent college of University of Delhi. A co-educational institution of higher learning, it was established in 1951 by the Delhi Sikh Gurdwara Management Committee to instill the ideals of self-sacrifice and service among the youth. It is named after the 9th Guru of the Sikhs, who laid down his life to uphold freedom of belief and conscience and whose sacrifice and martyrdom for secular values are unique in the annals of history.

Over the last half a century, the College has developed into a prestigious institution with well-developed infrastructure including a modern sports complex, playgrounds and tennis courts of international standards, library with internet facility, well-equipped laboratories, a recently upgraded Computer Centre, technologically enabled lecture theatres, seminar halls and a magnificent auditorium. The College offers under graduate courses in Arts, Commerce, Social, Physical and Life Sciences.

ABOUT BBEEconomics as a discipline offers enormous opportunities of growth in learning and the professional life as a whole. Especially during these times of financial turmoil when everyone is seeking someone to make some sense of the bizarre set of events that has transformed the way that the world understood economies. Economists today command tremendous importance and thus it is an opportune time to take a plunge into the sea of knowledge and be cognizant of the theories and principles that decipher the dynamics of the global economy. Economists study production, distribution & consumption of goods & services on the applications of economic policy in particular

area such as finance, labour, agriculture, transportation, energy & health. BA (HONS) Business Economics as a course offers an attractive mix of intellectual growth and corporate exposure with an inherent affiliation to developing world class professional with a potential to make a mark on the global economy.Demand for qualified, experience economist is very high & job prospects are tremendous. The demand for business economics has increased tremendously particularly in the corporate sector, research and business. A number of big industrial houses are employing business economists. B.A (Hons) Business Economics is a course in applied economics and alongside the academic training in order to sharpen essential skills in marketing and communication, the students undergo corporate summer training for about eight weeks, to get a better understanding of business environment and real organizational problems. The students of B.A (Hons) Business Economics. Have access to a number of facilities which include a computer lab, a modern library, and seminar rooms.

BBE AT KHALSA

The B.A. (H) Business Economics course was

introduced by the College for the first time in

the year 2007. B.A (H) Business Economics has

flourished in the past three years at our college.

Professional dedication of the experienced

faculty, enthusiasm and hard work on the part of

the students has produced remarkable results

every year from the inception. This course is

framed in such a manner that the students

should get the knowledge of the corporate

sector and its implications along with the theory

part as it includes a number of management

subjects. To equip the students with a great

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Bizonomist-10

PLACEMENT CELL

The Placement Cell for BBE was formed with

Dr. Bibhu Prasad Sahoo, the Course

Coordinator.

The College has a dedicated Placement Cell for

fostering the career prospects of its students.

Many reputed companies like V-Learn,

G e n p a c t , Wi p r o , I B M, T C S, H C L

Technologies, ABN Amro, etc. have conducted

campus recruitments of the College students in

the past. The students of both 1st and 2nd went

through internship program during summer

vacation in 2009. The purpose of the program

was to provide students a tremendous exposure

to the work environment in the corporate

world. This internship program bridged the gap

between academic theory and its practical

applications.

RAAH – BBE SOCIETYRaah is fully functional BBE Society Raah that

organizes and coordinates extra curricular

activities for its students. During the academic

year 2008-09, Raah organized educational trips

to Pinjor, Shimla and Chandigarh. Our students

visited Reckitt Benckiser, one of the premier

FMCG manufacturers, for corporate interaction

and practical exposure. Eminent scholars and

academicians from prestigious institutions and

foreign universities such as IIMs, Deakin

University (Australia), Institute of Industrial

Growth etc. are regularly invited for lectures,

seminars and interactive sessions with the

students. To provide intellectual stimulus to the

students various competitions like GD, Business

Quiz, Product related Dumb Charades,

Economics Jam Session, etc. were organized by

the Society in the Inter College Academic

festival 'Perspica 2009' which saw presence and

participation of Business Economics students

across all the colleges and students from various

management institutes.

s ense o f d i s c ip l ine , r egu la r i t y and

professionalism is the main concern of the

course. Students are also being constantly asked

to make group as well as individual

presentations and to follow the decided formal

attire which helps them in understanding the

proper professional behavior that is required in

today's era. Also to provide the students with

the actual understanding of corporate real life

situations that occur often at work place, they

are advised to join any corporate of their interest

so that they can get an idea about the same.

OUR TOPPERS

3rd Year

Vaibhav Arora

Navneet Kumar

Parul Gulati

2nd Year

Deepika Gupta

Akhil Tandon

Sushan Arora

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COPENHAGEN SUMMIT

Copenhagen Summit

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The Copenhagen Climate Summit

Bizonomist-10

Mrs. Sukhmeen K. Chahal

BACKGROUND

After the Rio de Janeiro Earth Summit 1992,

the United Nations Framework on Climate

Change (UNFCC) was established to consider

what can be done to reduce global warming and

to cope with temperature increases in the

Climate. Most countries joined this

international treaty. Later a number of nations

approved an addition to the treaty: the Kyoto

Protocol, which has more powerful (and legally

binding) measures. The Kyoto Protocol was

adopted in Kyoto, Japan, on 11 December 1997.

The Kyoto Protocol sets binding targets for 37

industrialized countries and the European

community for reducing greenhouse gas (GHG)

emissions. This amounts to an average of five

per cent against 1990 levels over the five-year

period 2008-2012.

The major distinction between the Protocol and

the Convention is that while the Convention

encouraged industrialized countries to stabilize

GHG emissions, the Protocol commits them to

do so.

Recognizing that developed countries are

principally responsible for the current high

levels of GHG emissions in the atmosphere as a

result of more than 150 years of industrial

activity, the Protocol places a heavier burden on

developed nations under the principle of

“common but differentiated responsibilities.”

But, the Kyoto Protocol's targets for reducing

emissions apply only to a small set of countries

and expire in 2012. Negotiations therefore

began on new treaty that was bigger, bolder,

wider-ranging and more sophisticated than the

Kyoto agreement. In 2007, at the UN climate

talks held in Bali, governments agreed to start

work on a new global agreement. The

Copenhagen talks marked the end of that two-

year period. The 2009 United Nations Climate

Change Conference, commonly known as the

Copenhagen Summit, was held at the Bella

Center in Copenhagen, Denmark, between 7

December and 18 December.

Climate Change and Global Warming

The Earth's climate has always changed

naturally over time. For example, variability in

our planet's orbit alters its distance from the

Sun, which has given rise to major Ice Ages and

intervening warmer periods. It is more than 90%

probable that humankind is largely responsible

for modern-day climate change.

The principal cause is burning fossil fuels - coal,

oil and gas. This produces carbon dioxide

(CO2), which - added to the CO2 present

naturally in the Earth's atmosphere - acts as a

kind of blanket, trapping more of the Sun's

energy and warming the Earth's surface.

Deforestation and processes that release other

greenhouse gases such as methane also

contribute.

Although the initial impact is a rise in average

temperatures around the world - "global

warming" - this also produces changes in rainfall

patterns, rising sea levels, changes to the

difference in temperatures between night and

day, and so on. This more complex set of

disturbances has acquired the label "climate

change" - sometimes more accurately called

"anthropogenic (human-made) climate

change". The majority of the world's

governments believe that climate change poses

a threat to human society and to the natural

world. That is why the Copenhagen Summit

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Copenhagen Summit

attracted the attention of the whole world and

much importance was attached to its outcome.

After series of acrimonious and protracted

negotiations, an accord was finally drafted and

released at the end of the summit.

Salient Points of the Copenhagen Accord

A commitment "to reduce global emissions so as

to hold the increase in global temperature below

2C" and to achieve "the peaking of global and

national emissions as soon as possible"

●Deve loped count r i e s mus t make

commitments to reduce greenhouse gas

emissions, and developing countries must

report their plans to curb greenhouse gas

emissions to the UN by 31 January 2010

●New and additional resources "approaching

$30bn" will be channeled to poorer nations

over the period 2010-12, with an annual

sum of $100bn envisaged by 2020

●A Copenhagen Green Climate Fund will be

established under the UN convention on

climate change, to direct some of this money

to climate-related projects in developing

countries

●Projects to reduce greenhouse gas emissions

in developing countries will be subject to

international monitoring if they are

internationally funded

●Programmes to provide developing

countries with financial incentives to

preserve forests –REDD and REDD- plus -

will be established immediately

●Implementation of the accord will be

reviewed in 2015 and an assessment will be

made of whether the goal of keeping global

temperature rise within 2C needs to be

strengthened to 1.5C

Significance of the 'Copenhagen Accord'

On the positive side, the Copenhagen Accord,

for the first time, unites the two biggest

contributors to GHG emissions – US and China,

along with other major developing countries in

an effort to curb global greenhouse gas

emissions. The Kyoto Protocol did not achieve

this - it imposed no obligations on developing

countries to restrain the growth of their

emissions. The accord also says developed

countries will aim to mobilize $100bn per year by

2020, to address the needs of developing

countries.

On the other hand, the summit did not result in

a legally binding deal or any commitment to

reach one in future. The accord calls on

countries to state what they will do to curb

greenhouse gas emissions, but these will not be

legally binding commitments. Furthermore,

there is no global target for emissions reductions

by 2050 and the accord is vague as to how its

goals - such as the $100bn of funds annually for

developing countries - will be achieved.

The essential points of the deal were brokered by

U S P r e s i d e n t B a r a c k O b a m a w i t h

representatives of Brazil, South Africa, India

and China (BASIC countries). The leaders of

France, Germany and the UK were also

consulted. Most countries at the conference

gave it their support, but some countries were

resolutely opposed, including Venezuela,

Bolivia, Ecuador and Cuba.

Will the Copenhagen deal solve climate

change?

The global average temperature has already

risen by about 0.7C since pre-industrial times.

In some parts of the world this is already having

impacts - and a Copenhagen deal could not stop

those impacts, although it could provide

funding to help deal with some of the

consequences.

Greenhouse gases such as CO2 stay in the

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Bizonomist-10

atmosphere for decades; and concentrations are

already high enough that further warming is

almost inevitable. Many analyses suggest an

average rise of 1.5C since pre-industrial times is

guaranteed. Tough action to reduce emissions

might keep the temperature rise under 2C; but

given uncertainties in how the atmosphere and

oceans respond to rising concentrations of

greenhouse gases, it might not.

This is why developing countries put such an

emphasis on adaptation (assistance provided by

developed countries to adapt to climate change

through transfer of technology and funds),

which they argue is necessary already. Figures

suggest that to have a reasonable chance of

avoiding 2C, global emissions would need to

peak and start to decline within about 15-20

years.

Currently, the cuts pledged by industrialized

nations are not enough to halt the overall global

rise in emissions. Furthermore, countries that

went in to the Copenhagen conference

prepared to offer bigger cuts in emissions if other

countries took tough action, appear to be

sticking with pledges to cut emissions at the

lower end of their range.

The Road Ahead

Developing nations have called for wealthy

economies to cut their emissions by at least 40

percent by 2020 compared with 1990 levels, and

to provide around one percent of their gross

domestic product (GDP) per year, or around 400

billion dollars, in finance. So far, no rich country

has come anywhere close to meeting such a

demand.

Under the accord, by Jan 31, 2010 both

developed and developing countries will have to

inform of their commitment to mitigate

emissions of greenhouse gases that are causing

global warming. The developed countries will

give percentage of emission reduction while

developing countries will give nationally

appropriate mitigation action. By February it

will be known what countries are willing to

commit. Action will be taken soon after to use

these submissions as a basis for creating a legally

binding agreement within a reasonable period of

time.

Concerns over the accord exist, some of the key

criticisms include:

· The accord itself is not legally binding.

●No decision was taken on whether to agree a

legally binding successor or complement to

the Kyoto Protocol.

●The accord sets no real targets to achieve in

emissions reductions.

●The accord was drafted by only five

countries.

●The deadline for assessment of the accord

was drafted as 6 years, by 2015.

●The mobilization of 100 billion dollars per

year to developing countries will not be fully

in place until 2020.

●There is no guarantee or information on

where the climate funds will come from.

●There is no agreement on how many

individual countries would contribute to or

benefit from any funds.

●COP delegates only "took note" of the

Accord rather than adopting it.

●The head of the G77 has said it will only

secure the economic security of a few

nations.

●There is no international approach to

technology transfer.

Coming few months will indicate whether

Copenhagen was Hopenhagen or Flopenhagen!

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Climate Changes, People don't..

Copenhagen Summit

COP15, the 15th Conference of Parties, the

official name for the Copenhagen climate

summit, was held at Copenhagen, the capital of

Denmark, where representatives of 193

countries gathered to discuss how the

inexorable warming of planet can be slowed.

As the 12 days wore on, the thrill increasingly

turned into frustration. Copenhagen quickly

degenerated into a discordant orchestra of

competing notes and a grim, almost farcical

finale pushed through by a handful of powerful

nations- including India- that the poorest

refused to accept.

The run up to the Copenhagen Summit has

Shruti Gopinath, 2nd year

been fraught with controversy. For two weeks

delegates and ministers have thumped their

policies as better than others or criticized plans

that do not meet their respective leader's goals.

Demonstrators arrested, countries wanting a

free ride or exemption for those that emit CO2

at ratios that they believe is what they can

achieve.

The Copenhagen summit ended with an

agreement which is titled as 'Copenhagen

Accord, the key points of which are as follows:

* LONG-TERM GOALS-"Deep cuts in global

emissions are required according to

science...with a view to reduce global emissions

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Bizonomist-10

so as to hold the increase in global temperature

below 2 degrees Celsius."

* LEGALLY BINDING DEAL-A proposal

attached to the accord calls for a legally binding

treaty to be pinned down by the end of next year.

* FINANCING FOR POOR NATIONS-The

text says: "Developed countries shall provide

adequate, predictable and sustainable financial

resources, technology and capacity-building to

support the implementation of adaptation

action in developing countries."

It mentions as particularly vulnerable and in

need of help are the least developed countries,

small island developing states and countries in

Africa.

"Developed countries set a goal of mobilizing

jointly $100 billion a year by 2020 to address the

needs of developing countries. The funds will

come from a wide variety of sources, public and

private, bilateral and multilateral."

* VERIFICATION -A sticking point for a deal,

largely because China refused to accept

international controls, the section on

monitoring of developing nation pledges is one

of the longest in the accord. It says emerging

economies must monitor their efforts and report

the results to the United Nations every two

years, with some international checks to meet

Western transparency concerns but "to ensure

that national sovereignty is respected".

The Accord couldn't have materialized without

the collusion of BASIC (Brazil, South America,

India and China), led by China, with the US-led

North. China cynically refused quantitative

targets even for the North. Disgracefully, India

went along. China and India want to expand

their carbon space to maintain rapid emissions-

intensive GDP growth in the name of defending

their poor. But India's poor will suffer grievously,

next only to Africans, as the Accord accelerates

climate change.

Yet, most opinion-shapers treat climate change

not as a survival or development/equity issue,

but as a diplomatic one, with sovereignty

separated from the people. India's complicity in

the Accord is a far greater global failure.

If we cannot do better next year in Mexico than

what we did at Copenhagen this year, we may

see rise in temperature of up to 6.4 degree C by

the end this century, as predicted by science.

It is not that we cannot stop global warming.

It will cost one percent of economic output to

convert the world into low carbon economy. It

cost about five percent to save it from economic

collapse.

The world has the money, it has the technology,

and it has the talent.

As the Copenhagen taught us, that is not

enough!

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“Be nice to nerds. Chances are you'll end up working for one.”-Bill Gates

“The best way to predict the future is to create it.”-Peter Drucker

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Copenhagen Summit

US Diplomacy towards Basic at Copenhagen

Vinni Sharma, 1st year

The deal on climate change made at Copenhagen summit between USA and BASIC could be counted as a triumph of US diplomacy on the crucial matter. The BASIC consisting of Brazil, South Africa, India and China might be individually benefited by the deal, yet the collective interest of hordes of other nations of the southern hemisphere is defeated by such a deal ,which was struck after a formal end of the summit inconclusively in a situation when the signatories on behalf of the BASIC group were about to board the aircraft homewards from the venue of the summit. Interestingly Jairam Ramesh who went to Copenhagen as a negotiator much ahead of the summit to get a consensus on such a crucial issue threatening mankind made a volte face after our Prime Minister signed the deal. Yet prior to this culmination of the event Jairam Ramesh was very vocal on the key issue of a global consensus with a clear cut policy on financial help and technology support from the rich nations for the poor nations. As a developing nation both India and China unitedly vouched for an acceptance of global strategy on climate change which eluded us since the Kyoto summit days. In fact the reluctance of the US administration to sign any treaty on climate change stood as a stumbling block to arrive at a pragmatic solution of the problem. Even just after signing the controversial deal, Jairam Ramesh was categorical that no formal deal has been struck and the draft would be placed before the plenary session to be attended by the world nations for final acceptance. However the same person a day later opined that India would be benefited by the deal and the first flow of money would be there by 2010. The deal envisages a mobilization of 100 billion dollars as annual funding for developing countries from 2020 to meet the

challenge. It also pledges another 30 billion dollars by 2012 to start with.

It seems that the Copenhagen deal is likely to be accepted by the UN as a reference document to evolve a global policy to combat climate change and basing on it new set of rules and regulations would be formulated in the course of time which would be enforced on the member countries equitably. Naturally the basic issue of fixing the historical responsibility of the industrialized nation in contributing to global warming would ever remain suppressed. It would automatically ensure great advantage to the rich nations to start everything anew without any past liabilities. The accord also does not envisage any limit on the cut on green house gas emission, although the rise of temperature has been vaguely limited to a rise of 2 degree Celsius. In absence of any peak global emission level and a deadline to achieve any target, a new precedent has been set which is contradictory to the Kyoto protocol. Above all, the Copenhagen accord has not evolved as a consensus arrived at the formal summit. Only the BASIC countries are likely to be benefited by it, without any legal binding on the commitment made.

Any world poverty reduction drive would necessitate a phenomenal rise of the existing economic growth rate of the poor nations. Naturally the energy need of such nations too would rise manifold. Carbon based fuel being the main source for energy for majority of such nations the possibility of future rise of green house gas level is inevitable. In such a critical situation it would have been prudent to accept a balanced and comprehensive energy development policy which could have paved the way for the much hyped equitable development model often pronounced by the world economic

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Bizonomist-10

policy makers.,

It would be worth mentioning that energy from non-conventional sources as well as from nuclear power generation could be a possible solution to it. However, the prohibitive cost involved in nuclear power generation , non availability of technology and above all monopoly of the rich nations as reflected in contemporary world politics have made it an uphill task for the poor nations to avail it. Even harnessing of energy from solar sources is a costly affair vis-a-vis power generation from coal. Harnessing of power from wind despite having potential at many places has not become a reality as mass production of power from this source has not materialized. However such generation alone could hardly fulfill the necessity of base load power generation of immense importance in ensuring supply of uninterrupted and quality power to an economic system.

Now, taking into cognizance the socio-economic status of the world nations by and large providing finance and technology transfer to poor nations are the two crucial aspects which should be part and parcel of any macro global strategy to combat the challenge of climatic change. Naturally the hopes of the poor nations were initially enkindled by the actions and utterances of the developing nations like India and China on the eve of Copenhagen summit. There was a definite vacuum for leadership for the majority of world nations to vouch for their collective cause in the UN summit at Copenhagen. However an emergence of collective leadership from the BASIC groups of countries gave them some ray of hope. But the US diplomacy did upset it. Therefore it is natural for nations to be beset by a feeling of being let down by BASIC. Such type of volte face as seen in international national is not at all an exceptional event. In our national politics we very often see it at the crucial time of government formation after general election in

a situation when no political party has the simple majority needed to form government. A floor crossing to a rival political formation against which the people voted the incumbent to win too could be seen. It seems to be acceptable to the Indian voters. To-day an earthly gain has become the driving force in Indian politics. But the question arises, has the same psyche been operating in international politics also? In fact the pre-summit and post-summit utterances of Jairam Ramesh speak about such an Indian trend but with a difference that the country would get some financial assistance from the rich nation on account of being a signatory to the deal made between USA and BASIC. Ramesh can definitely rationalize everything he did in Copenhagen, because it was not an individual gain for him but a collective gain for the nation.

Needless to say that the issue of global warming is unlikely to be resolved without an honest understanding of the resource and technology constraints faced by the poor nations to combat it. However the rich nations owning allegiance to the USA are purposefully avoiding it. They could ill afford to lose their economic and technology supremacy by accepting the conditions of financial and technology transfer as demanded by the Third World countries in any draft on global strategy on this crucial matter. Incidentally both India and China took this common stance on behalf of the Third World countries.

The environmentalist groups have rightly termed the Copenhagen summit as a fiasco. The Kyoto protocol was literally non functional because the US did not sign it. But the ongoing process of global warming is continuing its advance and this has stood as the greatest threat to mankind now. Yet both the rich and the BASIC countries who matter in world politics have taken the matter purely from an angle of economic loss and gain! It is unfortunate and disgusting.

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We are the ChangeBhavishya Kohli, 1st year

We are changing the earth's climate. It may seem

hard to believe but that's the truth. Climate

change is defined as ̀ the variation in the earth's

global climate overtime '. It involves changes in

the average state of the atmosphere over

durations ranging from decades to millions of

years. These changes can be caused by dynamic

processes on earth and more importantly by

human activities. The biggest factor of present

concern is the increase in carbon dioxide levels

due to emissions from fossil fuel combustion.

The phenomenon of the earth's atmosphere by

which solar radiation trapped by the earth and

re-emitted from the surface as infra-red

radiation, it prevented from escaping by various

gases in the air. This process in the atmosphere is

known as green house effect. Green house gases

trap heat because they readily absorb infra-red

radiation. The main green house gases are

carbon dioxide and chlorofluorocarbons (CFCs)

as well as water vapour. All these gases are

trapped in the air which causes global warming.

Earlier' human activity released very few gases

into the atmosphere' but now through

population growth and fossil fuel burning, we are

affecting the mixture of gases in the atmosphere.

Climate change is affecting the life on earth a

great deal. It is a natural process and has to

happen, but it is accelerating because of man's

activities. Increased atmospheric emissions of

carbon dioxide, one of the main green house

gases driving climate change, is causing global

warming. Average global temperature has

increased by almost 1°F\0.5°C over the past

century. Scientists expect the average global

temperature to increase an additional 2 to 6°F

over the next one hundred years. These climatic

changes are also leading to melting of glaciers

and polar ice. The set of glaciers located around

the world have thinned by about 10.5 meters on

an average since 1980! Scientists believe that

melting of glaciers and Antarctic ice is what is

bringing about rise in sea levels. Sea level may

rise between several inches and as much as 3 feet

during the next century which can flood coastal

countries like Sri Lanka completely.

In the era of urbanization and commerciali-

zation the indiscriminate cutting of trees for

seeking more dollars and more agricultural and

residential land is one of the major factor in

increasing the level of carbon dioxide thereby

leading to the warming up of global

temperature. The rain forests, also called ̀ sinks

of carbon dioxide' are being cut and no one's

there to stop. Deforestation is also increasing

due to domestic demand for wood. Everyone

talks about `saving the earth' and `going the

green way' but when it comes to practicing what

they preach, people fail miserably. Everyone

knows about these changes and what harm they

can cause to mother earth and even us but

everyone avoids it and the problem remains a

problem.

Doing little things like spreading awareness

among friends and family, reading more and

knowing more, carpooling so that fuel is saved,

covering food while cooking to save heat energy,

reuse, recycle, save electricity, ultimately results

in something big.

Man has caused the speeding up of climatic

changes and now man has to reverse it. Nature

has given us everything since we were born. Let

us all standup in her favour because it's time to

pay back the debts.

Copenhagen Summit

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Bizonomist-10

Global Warming: A Convenient Lie?Vidit Verma, 2nd years

The Carbon Dioxide (CO2) level is mounting, the Polar caps are melting, hurricanes are blowing, and earth's temperature is rising… this kind of apocalyptic news seems to flood the media these days. People too are convinced with the fact and are making their sincere efforts for going green. Have we ever considered that global warming might not be the fault of us humans? Are all efforts we are putting worth a thing?

No, declares Professor Tim Ball, “When people say I don't believe in Global Warming I say NO, I believe in Global Warming but I don't believe human CO2 is causing it,” who works with Department of Climatology at University of

Winnipeg. Worldwide many renowned scientist have ruled out the possibility of “the human factor” (specifically CO2 emissions) from the climate change theory.

The following paragraphs would not urge you to believe that humans play a very tiny and insignificant role in climate change but would provide you with the evidence suggesting the notion.

Scientists against the belief of manmade Global Warming across the organizations say that earth's climate is certainly changing because it is ever changing. “None of the major climate change in thousand years can be explained by

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Copenhagen Summit

CO2,”says Dr. Piers Corbyn who is a climate forecaster at weather action. The climate changes experienced in the history of earth are not in accord with the suggested positive correlation of CO2 with global temperatures.

The little ice age experienced in Europe in the 14th century, or the medieval warming period, which came before the little ice age (in which the temperatures were higher than those of today), is not in sync with the CO2 levels at that time. Scientists claim that CO2 is undoubtedly not a reason for increasing temperature. Consider this empirical evidence before 1940 the earth's temperature was on a rise and soon after 1940, it began to plunge, until 1975 when again it started to climb. Had it all been happen due to CO2, it would have been contradictory. The temperature must be rising then when the post world war world started with heavy industrialization. However, the so-called CO2 effect is missing in the temperature charts.

Now if we have to buy the argument that CO2 is not the culprit, then we need to shift the blame to something else. Some environmental scientists, as shown in the documentary The Great Global Warming Swindle (aired on the UK's Channel 4) suggest the possible perpetrator to be solar activity.

Argues Professor Eigil Friis-Christensen, who is Director at the Danish National Space Centre, that if we have a look at the data of earth's temperature, the sun spot cycles seems to influence the temperatures. He explains, that earth's surface is persistently bombarded with cosmic radiations from outer space, which are result of explosion of supernovae. These radiations when meet with the water vapours evaporating from the earth's surface they form clouds. However, when the solar wind is strong, the cosmic rays are diverted and thus there is a clear sky. Professor Nir Shaviv from University

of Jerusalem backs the argument with the climate data, he observed that when the intensity cosmic rays go up, the temperature comes down and when the rays went down, the temperature rises.

Many eminent Astrophysicists across the world regard the climate change theory as just propaganda. Now if the theory is just propaganda then why give it so much of weight? “The fact of matter is, tens of thousands of jobs depend on Global Warming right now…. It has become a big business,” proposes Professor Patrick Michaels, Department of Environ-mental Studies, University of Virginia. Another reason for creating gung-ho across the world could be funding. Superfluous emphasis on the Global Warming news is channelizing the funds to climate science from across the globe. Argues Professor John Christy, who is a Lead Author at IPCC (Intergovernmental Panel on Climate Change i.e. scientific body established by United Nations for evaluating risk of climate change caused by human activity) “we have vested interest in creating panic, in that way money would flow to climate science”.

A further argument by James Shikwati who is an economist and author is that this whole propaganda is to thwart the developments in the Third World countries. “One clear thing that emerges from the whole environmental debate is that, there is somebody keen to kill the African dream, and African dream is to develop”. He argues, poor Africans are pushed to use non-conventional sources of energy like solar and wind energy. “west can experiment with alternate sources of energy but we(Africa) are still in the age of surviving,” he alleges.

Although many scientists have criticized the documentary The Great Global Warming Swindle, but the argument still exists. Well, it up to you to decide which side to take.

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Bizonomist-10

There is always a huge monopoly in the world

currently. Whether it is a huge super store

stealing the business of a small local shop it is

always happening.

Standard OilThe 20th century standard oil was known to be

controlled by a corporate power that was

ruthless. It was controlled by none other then

John D. Rockefeller's company, it had secret

deals with railroads and such to keep its

competition out of the business. It controlled

90% of the oil industry in the 1900s in the US,

talk about monopoly. A suit against the oil

company was filed under the Sherman Anti-

Trust act. The Supreme Court ruled that the

company should divide in other smaller

companies. The giant company divided into

what today is known as Esso(Exxon), Socal

(Chevron). Oddly that entire ordeal proved

beneficial for the company. And Rockefeller

became even rich then he was before.

AT&TIn the 1900s, if you wanted to make a long range

call there was only one way and I mean ONE

way. That was to use the American Telephone &

Telegraph. This company dominated the long

distance call industry for nearly a century. The

company got a lawsuit and it had divested itself

of its local and smaller organization. It took the

company awhile to bounce back it made its

return to the bigger picture at the start of this

decade, will they ever monopolize the industry

again. That is the question…

MicrosoftMicrosoft was the only big dog of the software

industry around the 90s and the early part of this

decade. In 98 the government filed a lawsuit

against the company of Bill Gates. The lawsuit

said that Microsoft abused their dominance as a

operating system manufacturer, they took

advantage of their customers and stagnated

their opponents. The judge ruled against

Microsoft, which would leave it broken and half

the company it was but in 2001, much to the

relief of Bill&Co. Microsoft won the appeal,

they were forced to have some modifications

and limitations but the company was left in

complete stable conditions. This made lots of

people mad, the competitors and the state

governments.

Quick Bits

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“Choose a job you love, and you will never have to work a day in your life.”-Confucius

“Winning isn't everything, it's the only thing.”-Vince Lombardi

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ENTERTAINMENT ECONOMICS

Entertainment Economics

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Indian Film Industry and its Economic Impact

Bizonomist-10

Deepika Gupta, 2nd year

India has the world's biggest movie industry in terms of the number of movies produced (around 800 movies annually, mostly in the Hindi language. Tamil, Telegu, Bengali and Malayalam are the languages in which most of the non-Hindi films are made).

Today, the technology of film-making in India is perhaps the best among all developing countries though the films themselves remain mostly repetitive in storyline and content. Superior movies, in thematic and creative terms, are made in many developing countries with less sophisticated technologies.

According to unofficial estimates available in January 2001, the Indian film industry has an annual turnover of Rs. 60 billion (approximately US$1.33 billion). It employs more than 6 million people, most of whom are contract workers as opposed to regular employees.

The above statistics cannot however be used to calculate the movie industry's share in the GDP or employment generation. This is because a vast proportion of the turnover takes place outside the legal economy.

Until the late 1990s, it was not even recognized as an industry. Even though it has since been recognized as an industry, banks and other financial institutions continue to avoid the industry due to the enormous risks involved in the business. Two banks, Canara Bank and Indian Bank, have reportedly lost heavily by financing films. However, the prospects of bank financing and risk insurance are becoming brighter, albeit at a slow rate (as explained further down this report).

As a result, the financing of films in India often remains shrouded in mystery.

Surprisingly, however, the oft-murky world of film industry's finances has not tainted the film industry's perception in the general public eye or in the government's attitude. Even though many famous people from the movie industry have risen to positions of political and social responsibility, including seats in federal and state parliaments, none of them have cared to reveal – or have been under pressure to reveal – the truth about the industry's finances.

Some developments in the years 2000 and 2001 – including the arrest of a leading financier, Bharat Shah for his alleged links with a fugitive gangster – have not yet brought to public knowledge the inside economics of the industry.

The rot or financial amorality of India's film industry seems to have set in since the 1960s. Until the 1960s, film producers would get loans from film distributors against a minimum guarantee: this meant that the distributors had to ensure that the film was screened in cinemas for a fixed minimum period. If this minimum guarantee was fulfilled, the producers had no further liability. Profit or loss would be the destiny of the distributors. (There are exceptions, however. India's most celebrated film-maker, the late Satyajit Ray, is known to have pawned his wife's jewellery to part-finance his first film).

Star System: The financing pattern, centered on distributors, is suspected to have changed since the 1960s when the studio system collapsed and 'freelance' performers emerged. This gave rise to the 'star system' in which actors and actresses ceased to have long-term contractual obligations towards any studio or film production firm (such as the now defunct Bombay Talkies, New Theatres and Prabhat

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Entertainment Economics

Studios). Rather, they began to operate as freelancers commanding fees in proportion to the box office performance of their recent films. This increased costs of film production since the more successful actors and actresses hogged major proportions of the producers' budget.

In the changed system, distributors would pay 50 per cent of the film-making cost leaving it to the producer to get the rest from other sources.

The 'other' sources are:

– conventional moneylenders (who lend at an interest rate of 36-40 per cent annually);

– non-conventional but corporate resources, promissory note system (locally called 'hundi' system): this is the most widely prevalent source, and

– underworld money: about 5 per cent of the movies are suspected to be financed by these sources.

Film production thus became a risky business and the relationship with usurious money-lenders strengthened over the years.

As at the start of 2001, a reasonable budget film in Hindi could cost US$1.75 million. A low budget Hindi film can be made for even as low as Rs. 15 million.

A big budget Hindi movie can cost in excess of US$30 million. The 'bigness' of the budget is attributable mainly to the high fees paid to 'stars', celebrated music directors, high-end technologies and expensive travel costs to shoot in exotic locations worldwide.

India has a National Film Development Corporation (NFDC) which finances some films. A few film makers, who would find it hard to obtain finance from the regular sources, have been financed by the NFDC. However, NFDC cannot be considered to play a central role in the

film industry because it finances too few films which, too, are not of the type that has made the Indian film industry so vibrant. It however goes to the NFDC's credit that, without it, some of India's best film makers wouldn't have got a break in the industry.

Another shortcoming with the NFDC is that it funds films only at the production stage while ignoring the just-as-important marketing stage.

The film industry is currently losing unestimated volumes of revenue due to competition from local cable operators who illegally beam newly released movies into the drawing rooms of their subscribers.

FUTURE

This is not intended to be a scare story, however. As mentioned above, the overall entertainment industry in India is taking on professional colours and this will change the culture of the film industry too. Some film production companies, such as Mukta Arts, have made public share issues, thus keeping out of the world of murky financing.

The Film Federation of India is actively seeking to make film financing a viable proposition for banks. It is likely that films would also be insured to offset possible losses for banks.

The granting of industry status to the film industry will eventually allow overboard financing of films, though this will result in production of fewer films than at present.

Stricter enforcement of copyright law will help the film industry in its fight with cable operators.

Foreign entertainment companies, with steady revenue streams, can do good business if they invest in Hindi and other Indian language films. Despite high risks on a per-movie basis, the risk spreads out across a number of movies.

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New Class of Assets – IPL

Bizonomist-10

Lovlish Garg, 3rd year and Himanshu Soni, 2nd year

Cricket, the gentleman's game became a hot

business opportunity for the blue eyed corporate

with the advent of T20 cricket. Despite cricket

commanding massive sponsorship money since

early 90s, but after grand opening of Indian

Premiere League in April 2008, cricket became

a new tradable commodity for India Inc. On one

hand, high profile businessmen like Mukesh

Ambani, Vijay Mallaya and Ness Wadia jumped

into T20 wagon by buying IPL teams. On other

hand, Bollywood stars like Shahrukh, Priety

Zinta and Shilpa Shetty along with there friends

also bought IPL teams to make their

entrepreneurial debut through T20 cricket.

So the question arises that why so much moolah

all of a sudden in the game of cricket all of a

sudden??? Why people invested their money in

IPL and how do they plan to earn profits from

it???

The answer to our questions is that IPL Cricket

Teams are the new Asset Classes. And

Billionaires Invest in Sports teams purely as a

purpose of Investment. The Great thing about

such type of Exotic Investments is that, they

appreciate much faster than any other

traditional asset classes.

This is how IPL Team Owners Make Money -

01) Earning from Franchisee Profits -

IPL Teams have 3 Income Sources -

Broadcasting Rights, Team Sponsorships &

Gate Receipts. And it has 3 Expenses -

Franchisee Fees, Team Expenses and

Advertising & Admin. IPL Team Owners can

add their own personal expenses as a Team

Expenses. They can also take profits home.

02) By Partially Selling the Team to the Public -

Another way to make money from IPL Teams is

that, all of these 8 teams can go public after 2011

and sell partial stake in their companies to the

public. This is How the team owners will make

money. By selling a partial Business to the

public, IPL Team owners will get back their

originally invested money as well as they will still

have a management control over the company.

03) By Fully Selling the IPL Team to the New

Buyer -

The IPL team owners can also make money by

totally selling their IPL Teams. The Valuation of

all the teams is increasing at the rate of more

than 100% compounded annually. So according

to this rate, after 5 years from today, all the teams

Valuation will be above US $ 1 Billion (Rs.5,000

Crores).

In short, IPL Teams are just the New Asset

Classes like any other Asset Classes such as

Stocks, Bonds, Gold, Real Estate, Art....etc......

Investors invest in IPL Teams purely for

Investment purpose....!!!!

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Entertainment Economics

The IPL's economics

Sony TV is currently selling 10-second ad spots

for Rs 2.90 lakh. It is holding back nearly 20 per

cent of its inventory for same-day purchases

which could go for Rs 3.50-4.50 lakh for 10

seconds.

With approximately 2,400 seconds (1 hour) of

ad time available per match, Sony TV should

collect Rs. 8 crore worth of advertising per

game. There are 59 matches over 44 days in all.

So Sony TV stands to earn Rs. 472 crore over

this summer's tournament.

Sony TV will pay the BCCI $1.026 billion

(around Rs. 4,000 crore) over 10 years. Taking

ad rate inflation into account, at the mid-point

of the contract period -- 2013 -- Sony TV could,

depending on how the IPL performs, charge up

to Rs 10 lakh for 10 seconds, allowing it to make

well over Rs. 1,300 crore in advertising revenue

during that year.

Its payment to the BCCI would, however,

remain fixed at an average of Rs. 400 crore a year

for 10 years (though there is a graded system in

place with lower payments at the start of the

contract and higher ones towards the end).

Even after paying a share of ad revenue to the

team franchise owners, the IPL could turn out to

be Sony TV's best commercial bet yet.

Other stakeholders in the IPL will make money

as well. The BCCI has already collected Rs.

7,200 crore as the IPL's property owner. The

players will get their auction amounts.

Other international cricketing boards will

receive their share from the BCCI to ensure

Future Tours Programme (FTP) cooperation.

And the team franchise owners? Apart from

receiving a part of the title and TV sponsorship

rights, they will get gate collections, stadia

advertising, merchandising, player endorse-

ments and player appearances (ten per player

per year).

Add to that constant in-house branding across

global media and, even at breakeven, the IPL is a

virtual gift to the eight team owners.

The key to the IPL's long-term success is for

every stakeholder to treat it as entertainment.

Cricket purists have their Test matches and

ODIs to savor. The 20:20 IPL is simply a made-

for-TV carnival.

Spectators will be enticed not so much by their

city-teams but by the glamour of the team

owners and off-field entertainment --fashion

shows between team innings, film stars in the

stands, cheerleaders on platforms and music

when wickets fall or boundaries are hit.

From 7 pm to 11 pm prime time, for 44 nights

this summer, people will watch the IPL not so

much as a sporting event but as live reality

entertainment.

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Sports Economics

Bizonomist-10

Disha Malhotra, 3rd Year

Economists have for long been fascinating by

markets and how they work. In recent times,

economists have trained their sights on

addressing the peculiarities of the sports market

and the field of sports economies has evolved.

Sports provide an ideal testing laboratory for

economists for the following two reasons:

Firstly, the availability of rich statistics collected

as in part of the sporting competition process

and secondly, contrary to the

popular perception, sports

appeals even to the tribe of

dismal scientists.

India: The next big sports

market

For sport India has to be the

last huge market and possibly

the biggest opportunity on the

planet today.

T h e h e a d l i n e s a r e

overwhelming:

●High growth economy,

rapid rise of middle class

with disposable income

and leisure time

●Rapid growth in TV

h o u s e h o l d s d r i v i n g

interest and value in

sports content

●Potent mix in the public

consciousness of sport and

b o l l y w o o d g l a m o u r

attracting a male and

female audience

●Rapid growth in advertising as local and

international companies target this

lucrative, underdeveloped market.

Multiply these together and you get huge

prospects for sports TV rights and marketing.

The predictions are born out by figures from

recent years with the sponsorship market

estimated at $250m per year, TV rights worth

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Entertainment Economics

over $350m per year and both growing fast.

These opportunities are presented in the

Business of Sport in India intelligence report

from Sport Business. Drawing on extensive

expertise from within and outside the India, this

comprehensive resource will be invaluable for

those looking to expand in this rapidly emerging

market.

Not just cricket. Anyone with even a passing

knowledge of Indian sport knows that much of

the money in sport is based on a huge national

passion for cricket. The launch of the Indian

Premier League, a new Twenty20 tournament

was a massive boost to the amount of revenue

spent around sport as well as an instant global

phenomenon.

However, were cricket to be the only game in

town the prospects for the market wouldn't be as

enticing. Recent months have witnessed a

number of developments that suggest that other

sports are starting to become serious

proposition.

Formula 1 has seen a huge surge of interest

following Vijay Mallya's creation of the Force

India team. Golf and tennis, both aspirational

sports for the middle class, are enjoying record

levels of success. Perhaps most interesting of all,

football is starting to achieve real traction with

TV audiences turning on in ever greater

numbers for international leagues and

competitions.

There are also some major events in the

calendar which look set to have a transforming

effect on sport in India. Delhi will play host to

the Commonwealth Games in 2010 and India

will stage part of the ICC Cricket World Cup in

2011. The race is also on to bring F1 to the

country which will almost certainly see the

creation of a new circuit which together with

historic investment in stadium by cricket and

football will drive opportunities here too.

Who should buy India: Opportunities in the

Business of Sport?

The Indian market presents a tantalizing

prospect for organizations across the business of

sport including:

●Local and international brands looking for

ways to build their share of a huge consumer

market

●Sports federations hoping to boost

participation and grow commercial

revenues

●Event and tour organizers seeking new

destinations for sport

●Agencies and sport professional services

aiming to grow internationally

●Stadium architects and contractors wanting

to explore new opportunities.

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Video Game Industry

Bizonomist-10

Kushal Makhija, 1st year

Overview

The video game industry (formally referred to as

interactive entertainment) is the economic

sector involved with the development,

marketing and sale of video games. It

encompasses dozens of job disciplines and

employs thousands of people worldwide.

Modern games are among the most demanding

of applications on PC resources. Many of the

high powered personal computers are purchased

by gamers who want the fastest equipment to

power the latest cutting-edge games.

Disciplines

The game industry employs those experienced

in other traditional businesses, but some have

experience tailored to the game industry. For

example, many recruiters target just game

industry professionals. Some of the disciplines

specific to the game industry include the

following: Game programmer, Game designer,

Level designer, Game producer, Game artist and

Game tester. Most of these professionals are

employed by video game developers or video

game publishers. However, many hobbyists also

produce computer games and sell them

commercially.

History

1970s

In late 1970s, the computer game industry

formed from a hobby culture, when personal

computers just began to become widely

available. The industry grew along with the

advancement of computing technology, and

often drove that advancement.

1980s

In the mid 1980s the industry crashed due to the

production of too many badly developed games

(quantity over quality), resulting in the fall of

the North American industry and giving rise to

the Japanese industry, particularly the games

company Nintendo.

1990s

The 1990s saw advancements in gaming related

technology.

2000s

Today, the video game industry is a juggernaut of

development; profit still drives technological

advancement which is then used by other

industry sectors. Though maturing, the video

game industry is still very volatile, with third-

party video game developers quickly cropping

up, and just as quickly, going out of business.

Economics

Early on, development costs were minimal, and

video games could be quite profitable. Games

developed by a single programmer, or by a small

team of programmers and artists, could sell

hundreds of thousands of copies each. Many of

these games only took a few months to create, so

developers could release several titles each year.

Thus, publishers could often be generous with

benefits, such as royalties on the games sold.

Many early game publishers started from this

economic climate, such as Origin Systems,

Sierra Entertainment, Capcom, Activision and

Electronic Arts.

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Entertainment Economics

As computing and graphics power increased, so

too did the size of development teams, as larger

staffs were needed to address the ever increasing

graphical and programming complexities. Now

budgets can easily reach millions of dollars, even

if middleware and pre-built game engines are

used. Most professional games require one to

three years to develop, further increasing the

strain on budgets.

Some developers are turning to alternative

production and distribution methods, such as

online distribution, to reduce costs.

Today, the video game industry has a major

impact on the economy through the sales of

major systems and games such as, Grand Theft

Auto IV, which took in over USD$500 million in

sales during its opening week. The game's

income was more than the opening weekend of

Spider-Man 3 and the original title holder for a

video game Halo 3. Many individuals have also

benefited from the economic success of video

games including the former chairman of

Nintendo and Japan's richest man: Hiroshi

Yamauchi.

The video game industry is currently facing

financial strains as it attempts to fairly

compensate its talent, while continuing to turn

a profit. The result is that the game

developer—the traditional source of new

games—is essentially dying out or is being

incorporated into large publishers. The game

industry is currently experiencing a phase of

consolidation and vertical integration as a

reaction to spiraling costs. This climate has also

given birth to vibrant indie game developers

comprising tiny companies trying to use the

internet rather than traditional retail channels

to reach an audience.

In 2004, the U.S. game industry as a whole was

worth USD$10.3 billion. However, economic

problems remain today with regard to publisher-

developer contracts (see copyright: transfer of

rights). Typically, developers receive a royalty of

around 20% of the sales profits, and the rest goes

to the publisher. Rather than dividing royalties,

many publishers buy the development studio

outright. Some developers begrudge the

tendency for the studio's original management

to leave in the wake of a buyout, while the

remaining employees try to finish the project

only to be shut down after a few years. These

buyouts often result in a big push to finish video

game projects in time for the holiday purchasing

season, and transfer of creative control to the

publisher.

Latest trends in the gaming industry

A fairly recent practice, since the mid-1990s, of

the video game industry is the rise of game

players as developers of game content. The rise

of video game players as fourth-party developers

of game content allows for more open source

models of game design, development and

engineering. Game players create user

modifications (mods), which in some cases

become just as popular, maybe even more

popular, as the original game created. An

example of this is the game Counter-strike,

which began as a mod of the video game Half-

Life and eventually became a published game

that was very successful. While this "community

of modifiers" may only add up to approximately

1% of a particular game's user base, the number

of those involved will grow as more games offer

modifying opportunities (such as, by releasing

source code) and as the international

community of gamers rise.

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On a Lighter Note

Bizonomist-10

Branding is something that no business can

sustain without. Visibility among consumers is

one of the most important elements for any

business to flourish. That is why there is so much

impetus on creating a logo and popularizing it

among the masses. Consumers connect with the

logos of their favorite companies and that helps

businesses to earn more revenue. Some of the

most popular brands in the world are

Google – The Internet search engine.

Apple – Producers of the iPod, the iPhone and

the Mac.

Nike – The world's largest sportswear company.

Target – Their Bulls eye logo is considered to be

known by more Americans than any other

company.

Starbucks – It brought in revolution in the

coffee business and is still the leader in this field.

BMW – It continues to remain the ultimate

driving machine.

Nintendo – Game lovers simply cannot do

without this company's products.

Whole Foods Market – The leader in fresh fruits

and vegetables.

Disney – The ultimate in entertainment, Disney

continues to attract tourists from all over the

world.

Coca Cola – The world's largest beverage

company still rules. (Half circle full circle half

circle A, half circle full circle right angle

A….the limerick to describe Coca Cola logo!)

When it comes to business, there are many

interesting incidents that come up from time to

time. It is said that when Roberto Goizueta took

over the reins of the company, Coca Cola was

struggling in its fight against Pepsi, its biggest

competitor. Goizueta took a stock of the

situation and famously commented that Coke's

fight was not against Pepsi, but water. The words

had such an effect that Coke shrugged off all

competition and enhanced its position as the

number one cola company of the world. As per

Fortune Magazine, the biggest companies in the

world currently are

●Royal Dutch Shell

●Exxon Mobil

●Wal-Mart Stores

●British Petroleum

●Chevron

●Total

●ConocoPhillips

●ING Group

●Sinopec

●Toyota Motor

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FINANCIAL RECOVERY

Entertainment Economics

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Global Recovery

Bizonomist-10

Mr. Hitesh K Sachdeva

It has become known as the “Great Recession”, the year in which the global economy suffered its deepest slump since the Second World War. Twelve months ago, the panic sown by the bankruptcy of Lehman Brothers had pushed financial markets close to collapse. Global economic activity, from industrial production to foreign trade, was falling faster than in the early 1930s. This time, though, the decline was stemmed within months. Big emerging economies accelerated first and fastest. Stimulus packages deployed by many nations had played a large part in reversing the downturn that began in 2007.

Emerging market economies, including India are likely to give the much needed support to the ongoing recovery process as employment and domestic consumption in these countries have picked up momentum rendering sustainability.

India's GDP Growth (%)

Source: Centre for Monitoring Indian Economy Database

The Indian economy grew by 7.9% in the year to the third quarter, far surpassing expectations. From 2003 to 2008, India's economic growth averaged 8.8% per year. The economy has recovered in part because manufacturing output gained for the eighth month and exports

declined the least they have in a year. Maruti Suzuki sold over 76,000 cars in November 2009, 60% more than in the dire month of November 2008. Car sales are one sign of life returning to the country's shoppers. Private consumption expanded by 5.6%, having grown by just 1.6% in the previous quarter. Elsewhere, Asia's rebound has relied on exports and investment, serving foreigners and the future. The biggest current threat for India is the lack of rain for their agriculture sector. India suffered its worst monsoon since 1972 this summer, with the rains falling 23% below their historical average. This dented agricultural output in the third quarter less than expected.

For all the darkness that was cast in 2008 by arguably the worst financial crisis in the world, 2009 emerged as a much stronger year. While the economic performance of countries was still not much to talk about, what really stood out was the rally in global stock markets in 2009. With the developed countries still grappling with recession, investors turned the limelight on emerging stock markets as they are expected to grow at a much faster rate than their developed peers.

According to the Regus Business Tracker survey, Indian firms are expected to see signs of recovery by March 2010. India being the most optimistic of the 15 countries surveyed, far surpassing the global average.

India is expected to lead the global recovery rally

The survey was conducted by Regus plc and the audience included over 11,000 corporate across 15 countries. The survey's result depict that a strong economic recovery is not expected to begin until summer 2010. India is expected to lead the global recovery rally as companies in

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Entertainment Economics

the region are likely to witness significant improvement in their position as early as March next year. The results are in sync with the India's corporate outlook.

India's corporate outlook on economic recovery coincides with an increase in profits that surpassed the international average:

●45% of Indian firms saw profits increase last year, versus 40% of companies globally.

●Likewise, 49% of Indian companies experienced an increase in revenues last year (versus 46% globally).

●Even amongst those that experienced a decrease, 56% expect revenues to rise in 2010.

●Developed countries like Germany and the US are likely to see economic recovery by August next year, while the UK would witness rebound by September 2010.

●South Africa would witness commencement of significant economic recovery in May, while for Australia, Belgium and Canada it would be in June.

●China, France and Mexico would see economic rebound in July.

●57% of Indian companies of corporate size indicated that they expect revenues to increase next year

85% of SMEs (fewer than 50 employees) expect to see their revenues increase in 2010, compared with 72% of large companies.

India's Exports & Manufacturing Data

India's exports declined the least this year and manufacturing output gained for an eighth month, adding to evidence that Asia's third- largest economy is recovering from the global recession. Merchandise shipments dropped 6.6 percent in October from a year earlier after sliding 13.8 percent in September. The Purchasing Managers' Index compiled by HSBC Holdings Plc and Markit Economics showed a November reading of more than 50,

which indicates a gain in factory production.

Asia will have to play a bigger part in the global recovery than in previous downturns as US consumers are cash- strapped, said the World Bank Chief. The World Bank president is the latest to look at India, China and other Asian economies as new engines of global growth against the backdrop of many developed nations still emerging from recession. Prime Minister Manmohan Singh has already said that the government's fiscal stimulus would be phased out the next fiscal year and the Reserve Bank of India is expected to tighten interest rate by then. The growing middle class in India will have greater spending power amid greater urbanization and demand for infrastructure.

Historically, the developed economies led recovery. This time, it is going to be the developing economies.

The Road Ahead

An annual global outlook report produced by UBS Wealth Management Research sees countries with less developed markets producing the best returns for investors in 2010. The report predicts a worldwide economic rebound next year, which should drive prices for commodities higher, while the US dollar is expected to remain weak and developed economies may face headwinds when stimulus programmes run out, although the India Inc rules out another recession.

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India's Resilience to Economic Downturn

Bizonomist-10

Gunjan Rana, 1st year

The last year and half proved to be quite

turbulent for the business world. With Lehman

Brothers Holdings Inc. filing for bankruptcy,

cascading. Stock markets crashed in a jiffy

worldwide and it sent jitters to investors and

shareholders. These shocks were transmitted to

India. But as they say 'an economy is best judged

not in fair weather but foul'. India along with

China was going headstrong. In times when US,

UK, Japan etc were reporting staggeringly low

growth rates China had a

double digit growth rate and

India was having GDP of 6.1

which was decent enough.

In the initial phase of the

downturn i.e. around Dec

2007 it was felt that India will

probably remain immune to

this global blight. But we soon

got entangled into ugly

tentacles of the 'monstrous

downturn'. The fear did

rounds. Stock market, which

was at its benchmark highest

of 21K plummeted to mere

8K. People lost a large part of

their savings during the initial

mayhem, lacks became

unemployed, and expansion

p l a n s w e r e s h e l v e d .

Pa n t a l o o n s , S p e n c e r ' s

Subhiksha etc closed at least

2000 outlets amid cash

crunch. India's export sector

was worst hit, contracting for

the first time in 5 years. In the first two quarters

of 2009 merchandise export sector contracted

by 30%. The slowdown slammed the real estate

sector as well. Tightfisted creditors and

expensive loans resulted in a fall in car sales.

But soon green shoots of hope began to shoot.

With the introduction of new car models such as

Maruti Suzuki Ritz and Honda's Jazz, car sales

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“The great pleasure in life is doing what people say you cannot do.”-Walter Bagehot

“Your most unhappy customers are your greatest source of learning”-Bill Gates

Entertainment Economics

picked up. The panic of those months subsided

and the damage to the Indian economy was

contained thanks to aggressive interest rate cuts

by RBI and a surge in government spending.

Liquidity induced by regulators and

governments around the world was also

responsible for improvement in economy and

another important reason was the higher

acceptance of the fact that global re -growth will

be driven by markets like India and China.

Indian financial sector deserves thumbs up for

its timely undertaking of steps to combat global

slowdown. With the benign monetary policy

(because government implemented the

accommodating monetary policy along with

expansionary fiscal policy) and prudent

regulatory structure Indian economic activity

has recovered.

The downturn taught important lessons to

corporates worldwide. The present scenario

necessitates business firms to make decisions

based on sustainability of their firms. Managers,

CEOs need to look out for opportunities which

would place their companies on a new trajectory

of growth. They need to focus on building long

term competitiveness of their org rather than

operational and financial management

decisions.

The biggies are no longer in a position to claim

their monopoly and this has left enough scope

for new and small players to make their presence

felt. The Biz world currently needs self

motivated leaders who can take tough decisions,

handle difficult situations and still maintain his

calm and composure. They need to decipher

and respond to dynamic global business

environment. To build a sustainable

organization focus should be laid on building a

competent, well informed, experienced yet

innovative diligent and accountable team.

The pervasive slowdown will soon peter out but

it gave investors worldwide new avenues for

investment- India and China. India has a very

bright opportunity at its disposal and we must

make sure to use it aptly to prove our mettle to

the world.........

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Quick Bits

Bizonomist-10

There are many funny and interesting facts

about business around the world. We have

captured some of them below.

In 1987, American Airlines decided to omit one

olive from each salad course in the first class. As

a result, they made a savings of $40,000.

Bank of America started operations as Bank of

Italy.

If the entire population of the world is taken as

100, then half of the total wealth would be held

by 6 people.

More than 90% of cab drivers in New York are

immigrants from other countries.

The Mall, the biggest departmental store in

Washington, D. C. is 1.4 times bigger than the

Vatican City.

Philip Morris, the first owner of the Marlboro

brand, died of lung cancer.

The top three valuable brands in the world in

order of their value are Marlboro, Coca Cola

and Budweiser.

Dr. Lieven P. Van Neste owns more than

200,000 domain names.

A Tupperware party starts somewhere in the

world every 23 seconds.

People in the USA get so hyper about the Super

Bowl that the sale of antacids increases by 20%

every year after the day of the game.

Nauru, a small island in the Western Pacific, has

fossilized bird droppings as one of its chief

exports.

The soft drink industry spends more than $100

million a year in stopping thefts involving their

vending machines.

The AA, or the Automobile Association was

first started in 1905 to warn motorists about

speed traps.

Bill Bowerman, who founded Nike, first got the

inspiration of creating Nike shoes after staring at

waffle iron.

David McConnell named his company Avon

after the birthplace of William Shakespeare,

Stratford on Avon.

Kids in North America spend an average of

about half a billion dollar annually on chewing

gums.

Canada and United States are the leaders in

producing paper and paper products.

Businesses are reasons why common people

exist. If there were no businesses and no

businessmen, there would be no production.

The average people would have nothing to buy

and the human race would cease to exist. It is

these risk takers who make life simpler for us.

They reap the profits but where would we be

without them?

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MERGERS AND ACQUISITION

Mergers and Acquisition

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The Gradual Indian Takeover of Global Companies

Bizonomist-10

Rajiv Gupta, 2nd year

With the starting of the new decade we are

about to witness one of the greatest shows on

earth: the gradual Indian takeover of global

companies.

When India began globalizing in 1991, the

Indian left howled that this would mean the

wholesale takeover of Indian companies by

foreign multinational companies (MNCs).

When Indian liberalizers suggested that

globalization would equally mean the takeover

of foreign companies by Indian multinationals,

they were viewed with amusement as some sort

of creatures from outer space.

The trend began haltingly around 10 years ago.

In 2000, Tata Tea took over a global company

twice its size, Tetley Tea, the second biggest tea

company in the world. This was a leveraged

buyout.

Global financiers provided the funds to enable

an Indian minnow to take over a global whale.

Global finance is now helping smaller Indian

companies to acquire much larger global ones.

With all such facilities there were a series of

mergers where Indian companies took over

many MNC's proving there mantle.

Here I present you with two of the most famous

and memorable mergers of this decade. I have

left out of my list a large number of foreign

software and BPO companies that are regularly

being acquired by top

Indian companies. I have

c o n c e n t r a t e d o n

manufacturing, where

Indians are supposed to be

least competitive.

Arcelor - Mittal steel

giant

In 2006, Lakshmi Niwas

Mittal's hostile bid for

Arcelor steel, in an

attempt to create the

world's largest steel maker.

It gave a huge publicity to

CEO of both companies in

international arena, Mr.

Mittal for his such hostile

takeover and Guy Dolle,

CEO, Arcelor steel for

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Mergers and Acquisition

wrong reasons. According to Mr. Dolle, Mittal's

were using there 'monkey money' and their

products were a cheap substitute for Arcelor's

products.

But when Mittal raised the bid from $23.3

million to $33 million, then Mr. Dolle didn't

found any 'monkey money' or cheap products

and thus successfully ending one of the most

controversial and publicized takeover bids in

modern corporate history.

Deal for national pride

CSN and Tata Steel's race to get a hold of

Anglo-Dutch steel maker Corus will go down in

history as a case of perseverance testified. Any

entity envisioning a long term global implication

in a consolidating sector would be definitely

interested in a 19 million tone enterprise that is

an established brand with a global presence.

Both CSN and Tata Steel had their strategies

and visions at the forefront when they started off

with the bidding process, but it was actually the

price that decided the fate of deal.

On 31 January 2007 Tata Steel won their bid for

Corus after offering 608 pence per share as

compared to CSN's 515 pence per share, valuing

Corus at £6.7 billion; as a result and pending

acceptance and completion of the takeover, the

joining of the two created the fifth largest steel

company in the world.

Besides these two major mergers there were a

few more moments of joy for India Inc. when it

came to Cross-Border mergers. Here is a list of

few:

Tata Motors acquired the truck factories of

Daewoo in South Korea for a reported $118

million.

Ranbaxy, India's biggest pharmaceutical

company, acquired RPG Aventis, the French

generic wing of the multinational Aventis.

Wockhardt, owned by the Khorakiwalas,

acquired CP Pharmaceuticals of UK. The

Khorakiwalas had already made a minor foreign

acquisition, of Wallis Laboratories, in 1998.

Hindalco, the flagship company of the Kumar

Birla group, acquired two copper mines in

Australia — Mount Gordon and Nifty.

Sterlite, the successful bidder for the

privatization of Bharat Aluminium and

Hindustan Zinc, become a true multinational by

acquiring copper mines in Australia

If you think that only the biggest Indian

companies can get into the global takeover

game. This is simply not so. Many middle-sized

companies, which many of commoners may not

even have heard o f, a re becoming

multinationals through foreign acquisitions.

Sundaram Fasteners, whose production-line

includes humble items like radiator caps, nuts

and bolts, acquired Dana Spicer Europe, the

British arm of a global multinational.

Amtek Auto, another auto ancillary that came

up in the 1990s, acquired the GWK group in the

UK, which is twice its size.

After 30 years of supplying components to UK-

based SPP Pumps, Kirloskar Brothers has now

acquired a majority stake in the British

company.

The global system is no longer rigged by and for

white men. It can be used by Indians no less than

Americans to leverage their talent to create

global corporate empires. The process has

begun.

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Mergers and Acquisitions

Bizonomist-10

Gagan Anand, 1st Year

The economics of mergers and acquisitions

generally deals with the structural changes in an

organization. An acquisition is where a

company takes over another and clearly

establishes itself as the new owner. In legal

terms, the target company is absorbed. A

merger, on the other hand, is the combining of

the two similarly-sized companies.

We all read about mergers, amalgamations and

takeovers in the newspapers. We know that Tata

acquired Jaguar and Land Rover. The IBM-

Lenovo merger created waves in the IT industry.

But why do companies take part in mergers and

takeovers? The answer is plain economics. A

larger company leads to economies of scale and

therefore reduces costs. This concept can

further be analyzed by understanding the

different reasons for a company to undergo a

merger. A company manufacturing tennis

racquets could purchase a company producing

racquet covers. This concept is called cross-

selling. Not only does this reduce the cost of the

package, this also increases customer

satisfaction. Another example of cross selling

would be a pen manufacturer who also produces

refills.

Acquiring a competitive firm would reduce

competition and increase the market share of

the product. During the great merger

movement in the American market, small firms

consolidated with other small firms to emerge as

large companies with a significant market share.

An acquisition creates a larger business entity,

this results in greater importance for the owners

of the company. Therefore, acquisitions could

also be the result of man's search for power.

The most common reason of taking part in

fusion of companies is diversification of

products. A company may have the resources to

start another product, but it chooses to buy a

firm because of its intangible assets. The

company saves time generating a market share

and goodwill. This also conserves energy that

would have gone in installing the machinery

and filling the organizational structure with

suitable people.

Uncommon reasons of unification include

taxation. The tax system in some countries is

based on profit slabs. Companies trying to avoid

tax often buy loss making firms to lower their tax

burden.

However, mergers and acquisitions aren't always

successful. With the recent takeover of Jaguar,

Tata Motors had to ask for a bailout from the

British Government.

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Theory of Mergers and Acquisition

Mergers and Acquisition

Akshay Seth, 1st Year

Since the 1980's, and even more now in twenty first century , it has become a growing trend for companies, both large and small, domestic and foreign, to form strategic alliances within their particular industries.

There are many specific goals that companies may be looking to achieve by doing this, but the main underlying reason is to guarantee the long-term sustained achievement of fast profitable growth for their business.

Basically stated, a merger is a joining of forces and acquisition is a purchase of a company, whether it is welcome or hostile. The two terms are often used interchangeably. Much research and planning is required in the early stages of these processes, which starts with an acquisition strategy used in trying to find a suitable company to merge with. Advantages and disadvantages of the merger must be thought out, as well as many other important aspects, such as risk factors and new organizational structures that must be considered and closely monitored throughout all of the stages of the merger or acquisition.

Before going further into the merger and acquisition process, a more complete explanation is necessary. A merger is the combining of two or more companies into a single corporation. This is achieved when one company or business purchases the property or some other form of assets from another company. The result of this action is the formation of one corporate structure. This new corporate structure retains its original identity. An acquisition is a little different from a merger in that it involves many problems being dissolved, and an entirely new company being formed.

There are different ways for a merger or acquisition to take place. One obvious method involves the purchasing business making an absolute payment in cash or in company stock.

Other arrangements may be made such as the exchange of bonds. After the purchase has been made, the purchaser acquires the assets and liabilities of the other firm.

There are two main types of mergers; horizontal and vertical. A horizontal merger or acquisition combines firms that competed with one another at the same stage of production into a single new firm. These mergers usually involve basic commodities. A vertical merger, which is more common in producer-goods industries, takes the entire production process, from raw materials to the end finished product, and combines them together under single ownership.

Throughout history, certain mergers and acquisitions have influenced modern international finance. In the late 1800's, merger and acquisition techniques were being abused and monopolies were starting to emerge. This led to the creation of The Sherman Antitrust Act, which made monopolies illegal.

More recently, large mergers and the birth of new markets around the globe have affected international finance. When two major corporations merge they form a company with a very large amount of economical and political

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Bizonomist-10

power. This has led to issues that deal with ethics and social responsibility.

Now we contemplate the first important question: Why to merge or acquire? As stated earlier, the overall goal is to ensure future stability and growth in the market. But more specifically, each company has individual goals that it hopes to achieve. Many times mergers are completed to save a failing business. Others reasons for mergers include reduced competition and/or product diversification.

These goals are closely related to the possible advantages of mergers and acquisitions, and of course, in the case of all risks, there are possible disadvantages as well. Many of the advantages have to do with forming unique research and development skills. One major advantage is that a merger would give a company the opportunity to expand by establishing their presence in a host country. This invites the company to compete in other markets. Another possible goal or advantage is being able to adopt technology from the other business rather than spending the time and money to develop it themselves. In the long run, this would cut costs and improve productivity.

A very good example is of Tata Motors. Tata Motors has been aggressively acquiring foreign brands to increase its global presence. Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a business comprising the two iconic British brands that was acquired in 2008. Tata Motors has also acquired from Ford the rights of Rover. In 2004, it acquired the Daewoo Commercial Vehicles Company, South Korea's second largest truck maker. The rechristened Tata Daewoo Commercial Vehicles Company has launched several new products in the Korean market, while also exporting these products to several international markets. Economies of scale and scope can be gained with a larger base and with this increased size come many competitive advantages.

A successful merger or acquisition may very well allow a business to reduce its foreign exchange

operating exposure by servicing a market with local manufacturing rather than through imports. Some businesses merge to help alleviate some or all of their debts (debts that will be taken over by the merging company) in hopes of getting the chance to start over.

One major problem that may be incurred is cultural differences between the two businesses. This may lead to tension, conflict, and stresses between the organizations, namely its employees, lessening the chances of a smooth merger. Many times teams are designed to deal with any possible conflicts that may arise as a result of the differences in customs, values, and norms. In a few cases, there are negative political reactions from the unfavorable host countries. When the possible disadvantages occur, and these outweigh the benefits of the merger, it is possible that the merger be classified as a failure.

Failures could be a result of bad planning, lack of leadership, unrealistic expectations, and/or inadequate due diligence. A more recent definition of this describes poor returns to shareholders or a self-assessment that the company wouldn't repeat the deal. Failure rates stagger, ranging between 16% and 80%, depending on the approach used to determine it.

So turning to the next question that needs to be answered, what steps do businesses actually take when embarking upon a merger? The ten steps, in order, are:

1) Formation of an acquisition strategy.2) Defining the Acquisition Criteria3) Searching for a Target4) Acquisition Planning5) Valuing and Evaluating6) Negotiating7) Due Diligence8) Purchase and Sale Contact9) Financing10) Implementation.

A closer investigation of the steps is important in obtaining a better understanding of the actual

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Mergers and Acquisition

merger and acquisition process. The first step is putting together an acquisition strategy and the second step is putting together the acquisition criteria.

These two steps are closely related. When th inking about acquis i t ion cr i ter ia , management answers the question, why buy? Possible answers include to increase market share, broaden their product range, and to diversify by entering into new markets.

The third step is searching for the target. Things that a corporation considers are particular business areas, products and services desired. The buying corporation does research to find out all about the target company. This research is done by making telephone contact, correspondence and by speaking with third parties. If things are looking good, a meeting between the two corporations will be arranged.

Next comes acquisition planning, the fourth step in the process. In planning, top management must consider location, price range, profitability, return on capital employee, and image compatibility. A very important factor taken into consideration at this time is the scope of integration. It is important to examine this factor because it could lead to failure.

Step five is valuing and evaluation. This involves setting a value and evaluating the potential company. The value is determined by examining the historical nature of accounts and assets of the target company.

Step 6 is when the negotiating begins. There are thoughts of sources and methods of funding the business such as internal and external sources of funds.

Step 7, Due Diligence, refers to the management of the acquisition. At this point there is a space between the two firms while the overall purchase plan is reviewed.

The most important step may very well be step 8, actively managing the acquisition. This involves the purchase and sale contract, but it also involves the actions plan. Decisions have to be made about how the company is to be run.

Topics such as authority, responsibilities, and roles must all be defined. This, along with the implementation of any new ways, will require extensive communication.

A major problem that must be addressed at this point is integrating corporate systems, structures, and cultures. This is one of the most complex challenges, especially when dealing with cross-cultural mergers. Problems arise because, not everyone wants to adopt someone else's way of doing business. And when you start to form a third culture out of the fabric two equally strong companies, the task is enormous, especially if you're trying to maintain high performance in the marketplace at the same time. To deal with any problems, special task-oriented teams are organized who will specialize in this area.

Step 9 deals with financing and finally, the tenth and final step in the successful acquisition process is the actual implementation of your plan as a company. When the steps are followed and everything goes as planned, the result is a successful merger. There will be good operating and market synergy between the buyer and seller, and the newly merged companies will understand the importance of sharing each others capital, markets, and technology.

After researching mergers and acquisitions, it's clear that today's business environment is being dominated by mergers and fast growth. In order be a player in the highly competitive markets, expansion of firms is necessary. It is almost impossible to achieve high profitability all alone. This growth is achieved through new product development, acquisition of new plants and more machinery, and business development activities. Firms are merging due to pressures from their competitors. Corporations today must unders tand the f inanc ia l and technological difficulties as well as the complex problems associated with the actual interaction of peoples and plans when participating in mergers, and they must strive to execute all of their plans to their maximum potential.

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Bizonomist-10

There are some Business Facts!

90% of all restaurants fail during their first year

of operation.

Colgate's first toothpaste came in a jar.

Duracell, the battery-maker, built parts of its

new international headquarters using materials

from its own waste.

Henry Ford, father of the Automobile, is also

father of the charcoal briquette.

If Wal-Mart was classified as a country, it would

be the 24th most productive country in the

world.

In most advertisements, the time displayed on a

watch or clock is usually 10:10.

Microsoft made $16,005 in revenue in its first

year of operation.

Nearly 22,000 checks will be deducted from the

wrong account over the next hour.

Oil tycoon, John D. Rockefeller, was the world's

first billionaire.

The average company saves over $7,000 for

each employee suggestion that is enacted!

The creator of the NIKE Swoosh symbol was

paid only $35 for the design.

The first product that Sony came out with was

the rice cooker.

The first product that the toy company Mattel

came out with was picture frames.

The most productive day of the workweek is

Tuesday.

There is no tipping at restaurants in Japan.

Walt Disney World generates about 120,000

pounds of garbage every day.

Warner Chappel Music owns the copyright to

the song 'Happy Birthday'. They make over $1

million in royalties every year from the

commercial use of the song.

When Scott Paper Company first started

manufacturing toilet paper they did not put

their name on the product because of

embarrassment.

Yahoo! was originally called 'Jerry's Guide to the

World Wide Web'.

Just for Fun

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“Sometimes your best investments are the ones you don't make.”-Donald Trump

“Anyone who has never made a mistake has never tried anything new.”-Albert Einstein

“If you don't have a competitive advantage, don't compete”-Jack Welch

“Formal education will make you a living, self education will make you a fortune”-Jim Rohn

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INDIA INC.

India INC.

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Commemorating the pride of India

Bizonomist-10

Ms Harleen Kaur and Ms Sukhvinder Kaur

Fal te veho payiye je vehi kaar kamayiye

je hove poorab likhya taan dhoor tina di payiye

The democratic India, which has heralded an era of economic emancipation, is attempting to position itself in league with world's most powerful nations, sans some corrections it needs to quickly do in the critical areas of in f ra s t ruc ture deve lopment , human development and attributes that mar India's credibility in the global marketplace - issues like corruption, red tapism, archaic labor laws, the chasm between the haves and the have-nots, the gnawing disparities, et al. It now finally seems India is poised for reasonable progress, and this, with a certainty and confidence, which rarely comes in a nation's history. But, it comes with a caveat. The nation cant ignore

addressing the plight of the common man. It has to do something revolutionary, something out-of-the-box to truly steer the hundreds of million impoverished, who are by no means, part of India- growth-story. The growth has to be inclusive. It has to be all-encompassing.

As the champions of India Inc best know, India, though, has a fairly promising turf carved out for itself, yet, actually has a long long way to go. The hype and hoopla notwithstanding, the fact remains that the landmarks achieved by our India Inc captains during the last some time, are actually more suggestive of the huge potentials than the poise. All those entrepreneurs who have made news through smart market penetration or acquisitions overseas, or those who have with panache, wi thstood international competition, deserve all kudos for the niche they have carved, for, they have done

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India INC.

it despite all the handicaps they have had to nurse in a difficult working environment of India. No matter, post-1991 things are much improved for them though, yet, for the beleaguered nation ranked 126 in Human Development Index, and not any better across various indicators that constitute the WEF's Global Competitive Index - to cite a few: Quality of Electricity Supply, Rank 97; Overall Infrastructure Quality, Rank 69; Number of Procedures to Start Business, Rank 70; Time Required to Start a Business, Rank 97; Burden of Government Compliance, Rank 67; Government Deficit, Rank 122; Cooperation in Labor-Employer Relations, Rank 49 - the genius of our entrepreneurs come to the fore. For, they have driven India's growth almost in isolation.

Hats off to our industry captains - the list is long: Ratan Tata, N R Narayanamurthy, Rahul Bajaj, Mukesh and Anil Ambani, Kumaramangalam Birla, Y C Deveshwar, Ananad Mahindra, K V Kamath, Sunil Mittal and all the growth engines, on each of whom reams and reams could be written in admiration.

Our India Inc captains have beyond question demonstrated that they are no less than their counterparts anywhere in the world. Given a level playing field, they would carve a facile place at the summit. Their strength does not restrict in the sharp business acumen, but, extends much beyond – in their class as human beings. Take Ratan Tata, as a popular leader of India Inc, for example. It is not sheer nostalgia, but, a more proud fact than that of an Indian buying over the largest steel company in the UK. Very few global industry leaders would match the grace, humility and panache that Ratan Tata embodied and epitomized and always does. You should ask the British media and they will tell you how high they would rate Tata in terms of all the attributes that makes one more than a winning entrepreneur. We at India-Inc.in would

have watched a recorded version of his interview a dozen times over, to catch the lingua, the grace, the self-assuming persona, the class of a human being that you seldom find. For him humility precedes pride.

The emergence of India is evident from the leap that India's super rich are emblazoned on the pages of Forbes magazine and its famed billionaire annual. The list has figures in global rank, name and net worth in billion Dollars, respectively —5, Lakshmi Mittal, 32; 14, Mukesh Ambani, 20.1; 18, Anil Ambani, 18.2; 21 Azim Premji, 17.1; 62, Kushal Pal Singh, 10; 69, Sunil Mittal, 9.5; 86, Kumar Birla, 8; 86, Shashi & Ravi Ruia, 8; 114, Ramesh Chandra, 6.4; 137, Pallonji Mistry, 5.6; 210, Adi Godrej, 4.1; 214, Shiv Nadar, 4; 279, Dilip Shanghvi, 3.1; 287, Cyrus Poonawalla, 3; 287, Indu Jain, 3; 349, Kalanithi Maran, 2.6; 349, Grandhi Rao, 2.6; 390, Savitri Jindal, 2.4; 390, Tulsi Tanti, 2.4; 407, Subhash Chandra, 2.3; 432, Uday Kotak, 2.2; 458, Baba Kalyani, 2.1; 488, Malvinder & Shivinder Singh, 2; 557, N. R. Narayanamurthy, 1.8; 618, Anurag Dikshit, 1.6; 618, Venugopal Dhoot, 1.6; 664, Vijay Mallya, 1.5; 664, Jaiprakash Gaur,1.5; 717, Vikas Oberoi, 1.4; 754, Nandan Nilekani, 1.3; 799, Senapathy Gopalakrishnan, 1.2; 840, Pradeep Jain, 1.1; 840, Keshub Mahindra, 1.1; 840, Rahul Bajaj, 1.1

With the Forbes list for 2007 it is evident that India has ended Japan's 20-year reign as home to Asia's largest number of the richest people. India has 36, worth a total of $191 billion, followed by Japan with 24, worth a combined $64 billion. This year as many as 14 Indians have joined the coveted club raising the net worth of the country's billionaires by around $90 billion. The number of billionaires is 19 per cent higher than last year when there were 793, and their total net worth grew 35 per cent to $3.5 trillion.

Besides individual Indians who are shining on

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Bizonomist-10

the latest Forbes list based on their personal achievements, there many Indian companies that have done India proud in the global arena. These companies are representing India in this coveted list of top 2000 corporate titans across the world.

Another feather in India's cap is the fact that India now has over a 100 companies with individual market capitalization of over $ 1 billion, a landmark not many emerging markets can boast of. It reflects the depth and width of the domestic capital market and shows that it is no longer dominated by a handful of companies.

The new face of India as a self-reliant and proud nation is emerging. India's entrepreneurs have proved that, given the opportunity, they are second to none in the world. Ratan Tata's recent acquisition of Corus and Kumaramangalam Birla's acquisition of Novelis have indeed made India proud. People like L. N. Mittal, who initially could not make it big enough back home, succeeded hugely on the global turf and today, is the world's fifth wealthiest man, the wealthiest in the UK and, for that matter, in the entire Europe. He was sometime back in news for his 22 billion USD takeover-bid of Arcelor, which would help the Group scale 69 billion USD in sales, 12.6 billion USD in earnings before interest, tax, depreciation and amortization (EBITDA), 40 billion USD in market cap, and a hefty 10% in global market share, which would be three times the size of the world's next big in steel, Nippon, at a steely 115 million tonnes, as the numero uno! Wipro is probably the only company in the world that has both PCMM-5 and CMM-5 certifications. Azim Premji, the man behind Wipro, is more focused on philanthropy rather than his wealth that makes him the 25th wealthiest man in the world and the richest Indian, with a net worth of 13.5

billion dollars. Their story, more than anything else, is a testimony that an Indian entrepreneur is second to none in the world and it is only the erstwhile denial (which, somehow, post-liberalization in 1991, is thankfully waning) of the level playing field vis-à-vis what is available to their counterparts in developed countries. They are in their infancy of a march towards realizing their mega-potentials and more than catching up with the world. We should not be surprised when 20 years down the line there are 50 Indian companies in the Fortune list. And why not when our entrepreneurs and our rich crop of brilliant professional CEOs are world class. Their hard work, aggressive marketing and strategic moves have made them world leaders in their respective domains.

But most importantly, it has been our men's insatiable hunger to see India on the top, which has propelled it to the limelight. It was not long back when, at the World Economic forum Meet at Davos, Indian CEOs teamed up to launch a successful campaign 'India Everywhere'. It was their fondness of the country, a tribute, an acknowledgment to the land, which is now moving towards being a major global economic power.

These icons deserve to be saluted for all they have rendered to the global society with commitment, integrity and hard work.. The captains of India Inc need to reach out to the world and announce loud and clear that India is no more a 'snake-charmer's country, nor is it one resplendent with high degree of corruption, or red-tapism, or for that matter a burgeoning bureaucracy. And neither is India, as perceived, a nation weak on Government policies. From beckoning FDIs to evolving JVs to leveraging India's market strengths to harnessing India's HR potentials, they should lead it all.

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India Inc.

India INC.

Param Singh Sahni, 2nd year

India: A Global Destination

No power can stop an idea, whose time has

come. And for the world, the idea is none other

than India - an investment destination. The

credit goes to India's stable market and her

strong macroeconomic fundamentals, which it

has so stoutly nurtured. More significantly, the

pace of liberalization has instilled a sense of

confidence amongst foreign players that the

reform process is irreversible irrespective of

political change in the country. The race for a

share in the buoyant Indian economy was

further intensified with many Fortune 500

players looking to plant their flags on the Indian

soil. The market liberalizations process, which

began in 1991, heralded a new era of change in

India. The abolition of the License Raj, the

reduction of import tariffs, and the initial

opening of the country to foreign direct

investment set the ball rolling for India's

emergence as one of the most vibrant

economies in the world. A vibrant and diverse

country, Indian economy is rapidly integrating

with that of the world. In fact, India's skilled

managerial and technical manpower match the

finest in the international market. If GE Capital

termed India as a 'unique', PepsiCo found it one

of the fastest growing. Indian operations of giant

business houses have occupied a centre stage in

their global networks and the subcontinent has

become the most sought-after destination for

foreign players. Indeed, India has natural and

multiple advantages over other developing

countries and a sustained boom in its economy,

adds credence that it remains the darling of the

foreign investors.

Indian Global Icons

When foreign companies are knocking Indian

doors, can Indian players be left far behind? The

answer is for sure, a big 'no'. They have joined

the big league of the international giants. In fact,

India Inc. is flying high not only over the Indian

sky, but many Indian firms have slowly and

steadily embarked on the global path and led to

the emergence of the Indian multinational

companies. Day after day, Indian businesses are

acquiring companies' abroad, becoming world-

popular suppliers and are recruiting staff cutting

across nationalities. While Asian Paints is

painting the world red, Tata is all set to roll out

its brands such as NANO from Birmingham.

Ranbaxy is the ninth largest generics company

in the world. Infosys has 25,634 employees

including 600 from 33 nationalities other than

Indian. TATA steel has become one of the

biggest players in the world steel market after

acquiring Corus an given a different meaning to

the Indian infrastructure sector

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Bizonomist-10

Automobile Sector

From a nation of bullock-driven carts to flashy,

trendy cars, India has witnessed an accelerating

growth in its automobile industry, to the extent

that TATA Motors has given an honour to the

nation by rolling out the world's cheapest car

TATA NANO. Tata Motors has been successful

in acquiring automotive giants LAND ROVER

and JAGUAR and has acquired a Daewoo

Commercial Vehicles unit giving it access to

markets in Korea and China. Today, India is the

fourth largest car market in Asia, the largest

two-wheeler manufacturer, the fifth largest

commercial vehicle manufacturer and the

second largest tractor maker in the world. No

doubt, India has emerged as the most preferred

destination for foreign car manufacturers,

especially as an outsourcing point. And

contributing to this growth has been the very

son on the soil - Mahindra & Mahindra, which is

among the top five manufacturers in the world

and is the leader in 25- 50 HP tractors. The key

to sustained growth for the Indian automobile

sector is the participation of foreign car

manufacturing companies in India. The patents

granted to India have been rising, a result of

both Indian and foreign companies that have set

up operations here. A large number of foreign

automobile giants have their manufacturing

units in India such as Volvo India Private

Limited, General Motors India, Ford India Ltd,

Eicher Motors, Hyundai Motor India Ltd, etc.

Pharma Sector

If Information Technology has given India a

global identity, it's the pharmaceutical sector,

which has added a dash of credibility to that

enterprising image. In fact, Indian pharma firms

have not only been playing a global role but have

become an extension of global business

a l l i ances . With no cap on FDI in

pharmaceutical and drug industries, this sector

has witnessed phenomenal international

investment. To cite an example, it was not too

long back when the World Bank's private

investment arm, International Finance

Corporation picked up a stake in the Chennai-

based Orchid Chemicals. Not lagging behind in

promoting pharma firms, the Central

Government recently announced exemptions

from import licenses to foreign units setting up

manufacturing units in Special Economic

Zones. A lot of factors such as strong R&D skills

and low operational costs are attracting MNC

pharma firms to India. With the amendment in

the patent regime, foreign companies are keen

on India, as their drugs will now enjoy product

patent protection. On the other side, Indian

companies too have gradually come to terms

with the shocks created by entry of the global

pharma giants into India. Entry of foreign giants

has also been a boon in disguise for their Indian

counterparts as Indian companies have learnt

precious lessons from their global counterparts.

India's largest pharmaceutical company,

Ranbaxy, also licensed its technology for an

innovative drug del ivery system for

ciprofloxacin to Germany's Bayer. Ranbaxy has

proved its global presence by deriving about 70

per cent of its one billion dollar revenue from

overseas operations and 40 percent from USA.

Ranbaxy's drugs are being sent to 70 countries

and it has ground operations in 25 markets and

manufacturing in seven countries including

China.

Advertising and Media

There is no impact as powerful as that of the

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India INC.

mass media and so is the power of its economy.

The advertising market in India is not only

robust but is growing with leaps and bounds. In

fact, India is the third largest television market

in the world only after China and the US. A

country that has an estimated 105 million

homes having TV sets, which amount to 270

million watching the advertising industry

blossoming with every passing year. With the

total number of viewers touching around 415

million, including non-TV home viewers, India

is indeed a fertile ground for the media to hook

the viewers with catchy ads. In tune with the

growing economy, the Indian advertisement

industry has grown into a new industry of

considerable scale and service capacity and is

playing an important role in Indian economic

construction. When considering media you

can't ignore the contribution of the Indian press

and the worth it has bought to the nation on the

international stage. The major examples being

The Hindustan Times and The Times of India.

Fast Moving Consumer Goods (FMCG)

There is no marketing force, which can defy the

principle of growth. And when it comes to Fast

Moving Consumer Goods, the latent potential

of the segment is fast proving its mettle in the

Indian market. From changing consumer's

mindset to offering new generation products,

the FMCG companies are redefining their ever-

expansive role to meet consumers' demands. It's

no surprise that with an estimated market size of

around Rs 450 billion, the FMCG segment has

become the fourth largest sector in the Indian

economy. In fact, FMCG firms have been

registering a steady growth during the past few

decades. Not to mention the giants like

Hindustan Lever and Nestle India, the growth

has also been robust at Britannia, Godrej

Consumer , and Colgate Palmolive India . To

make it affordable, MNCs such as P&G and

Gillette, which earlier stuck to the premium end

of the market, have turned price warriors.

Indian Telecom Sector

It's profit and adventure, which drives private

enterprises towards excellence. And Indian

telecom industry is one such example of success

through privatization. The second largest

among emerging economies after China, Indian

telecom industry has 175 million connections to

its credit till 2010. And it's no wonder that the

sector ranks second in terms of FDI inflow. With

major international players such as Vodafone

already in the Indian market and the South

African major MTN expected shortly the

telecom sector still remains bullish and with

more and more private players chipping in to

take their pound of flesh, India for sure is the

right ring-tone.

Information Technology

It is popularly said that the sun of Information

Technology rises in the US and shines on India.

Sure, the world's IT lab has emerged as the

fourth largest IT market in Asia Pacific. And

making best use of India's unique position is the

foreign IT giants such as IBM, Microsoft, Intel

which have set up their shops in the country.

Equally important is the Indian IT companies

such as the Infosys, Wipro, NIIT etc. which have

gone global by virtue of their enterprising talent.

In fact, knowledge economy is the most prized

catch for India. It has the second largest English

speaking scientific professionals in the world,

second only to the US. According to an

estimate, India has over four million technical

workers, over 1,800 educational institutions

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Bizonomist-10

and polytechnics, which train more than 65,000

computer software professionals every year. A

number of global IT giants are setting their

centres especially in the field of R&D in the

country. Thus, Google, the world's largest

search engine, is all set to open an R&D centre

in Bangalore and leading web portal Yahoo also

carries out R&D work in Bangalore. Today,

India exports software and services to nearly 95

countries around the world.

Banking Sector in India

Today, the retail banking is a hot commodity

high on sale. With massive expansion plans

underway and financial products and

customization of services high in demand,

banking sector has never had it so good. And

there is a reason for being jubilant – the retail-

banking sector is expected to grow at a rate of

30%. So no surprise players are focusing more

and more on the retail and are waking up to the

Banking's potential. And to prove the

popularity of banking in India are foreign banks

who have doing brisk business for the last couple

of years. Banks such as ABN-AMRO Bank, Citi

Bank, China Trust Commercial Bank, Deutsche

Bank, HSBC, Standard Chartered Bank are the

prominent ones who have marked their

presence in India. One thing is for certain —

banking has yet to reach its potential, which is

ever expanding with Indian economy growing

from strength to strength.

Infrastructure

Investment opportunities in the lifeline of

Indian economy have never been as greener and

profitable as it's now. With 100 per cent FDI

allowed in almost all the infrastructure sectors,

the massive wheel of growth has already begun

spinning. India is not only one of the fastest

growing economies but has also propelled its

infrastructure to grow at a rapid rate. Following

the Asian route where the bulk of FDI in

infrastructure came through green-field route

rather than privatization, India has

progressively opened its door to foreign players.

Moving a step further, India in fact, allowed

strategic investment in major airports with a 74

per cent equity ceiling. And it was not too long

back when Prime Minister Dr Manmohan Singh

while addressing NYSE stressed upon India's

need for $150 billion in the next few years for

developing its core sector including power,

communication, airports and urban amenities.

And to give a shot in the arm, the government is

also stepping in to manage and mitigate risk in

sectors where there is uncertainty regarding

future revenue flows. In roads, for instance, the

Government is following an annuity based

model to attract BOT projects. Most

importantly, the infrastructure policies have a

long-term horizon and provide a roadmap that

investors can follow in structuring projects and

assessing viability. In fact, it's this combination

of domestic, private, foreign and multilateral

investments, which holds promise to propel

India's infrastructure growth to greater heights.

And for a robust economy and robust India,

there can't be a greater attraction than a well

laid out road ahead.

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On a lighter Note

Out of the Box

It is really surprising to know that some of the most powerful entrepreneurs and top business tycoons did not attend college or if they did, they never graduated.Below is list of some very rich and successful people who did not go to college or need a degree in order to make it big:

Dhirubhai AmbaniDhirubhai Ambani never went to college. He was only 16 when he left for Aden to work as a gas station attendant. He returned to India to start his own business at only 26 years of age. Dhirubhai Ambani set up Reliance, the largest private sector company of India. Ambani family became one of the richest families in the world, with the fortune running into billions of dollars. The business empire got split between his sons Mukesh Ambani and Anil Ambani in 2005.

Subhash ChandraSubhash Chandra, the Indian Media Tycoon, dropped out of school in class 12. He is the man behind Zee TV, one of the most popular Satellite TV networks in India. At just 19 years of age, he started a vegetable oil unit and after some time he began exporting food grains. He ventured into packaging business in 1981, set up Essel World Amusement Park in 1988. He started Zee in 1992. Forbes' 2009 estimated his net worth to be $ 1.1 billion.

Bill GatesThe richest man in the world and the Chairman of Microsoft, Bill Gates, is a Harvard University dropout. He dropped out of college to concentrate on software development business. He co-founded Microsoft along with Paul Allen. According to Forbes 2009, he had a net worth of $ 40 Billion.

Michael DellMicheal Dell is the founder of Dell Computers. Micheal Delldropped out from the University of Texas at 19 years of ageto venture into the computer business. He started with just$1000 dollars which he turned into a multi billion dollar corporate empire. Forbes' 2009 estimated his net worth to be$ 12.3 billion.

Steve JobsSteve Jobs, the co-founder and CEO of Apple, dropped out of Reed College, Portland, Oregon after completing just one semester. He started Apple 1976 along with his friend Stephen Wozniak. He introduced the Macintosh computer in the year 1984. He was also the co-founder of Pixar Animation Studios. Forbes' 2009 estimated his net worth to be $ 3.4 billion.

Richard Branson

British business tycoon Richard Branson started his first venture at only 16 years of age. Branson established the famous 'Virgin Brand' which includes companies such as Virgin Atlantic Airways, Virgin Mobile and Virgin Records. Forbes' 2009 estimated his net worth to be $ 2.5 billion.

Does this mean that one should dropout in order to become rich and successful? Well, I don't think so. Dropping out is not a good idea. Starting a business without any qualification may turn out to be risky; the individual may end up losing everything.

Why these people succeeded is because they knew what they were doing. They had the necessary skill and talent. Also they had complete knowledge about the business they were entering into. And after all, it's your attitude, not your aptitude, determines your altitude.

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Bizonomist-10

Sense the senses to become a Sensational SellerChirag Sharma, 2nd year

Aesthetic sense is probably the only faculty which differentiates Homo sapiens from animals. And that decisively justifies why market researchers have dug deep to analyze the role of marketing techniques in influencing a prospective buyer's senses.

Come inside the supermarket of the future.

As you walk through the fish department an atomizer squirts out a fresh lemon aroma, stimulating your sense of smell and taste. In the cut-flower section, hidden speakers are pumping out tunes specially selected to put your brain in the mood for romance, while the products in the aisles are a pleasure to touch.

Retailers are waking up to how clinical our shopping experiences have become and realizing that putting the sensation back into shopping is good for business. Few eye catching example of retailers tapping of on senses is the advent of food outlets in retail stores, space reserved by book retailers for cafes within; food courts installed by apparel retailers etc. Giorgio Armani's Emporio Armani cafe is perhaps one of the best attempts in this direction.

So how do these marketers seduce our senses?

The nose

Smell is the only sense that bypasses the rational part in the brain. Even if the smell is fake, we can st i l l fee l hungry. Worldwide FMCG manufacturers, restaurant owners, perfume manufacturers etc have been desperately seeking aroma as a trade mark. Has it happened to you that while getting into a retail outlet you smell a particular aroma and immediately recall to which this group this outlet belongs to? That is the power of aroma.

Retailers such as Williams-Sonoma understand the direct connection between the nose and sales of implements. There, customers walk through a series of smell zones designed to stimulate the purchase of a cosmetic brand. With the help of sensorama, a great deal of research has been conducted on the power signature or branded air fragrance on customers in terms of heightened experience and productivity from retail space.

The eyes

Vision is the first sense to engage or repel a customer from a distance of 30 metres. The visual recognition system is very strong in human beings and makers must realize this. For example, a bottle made of blue glass will always be eye catching than a brown or green bottle. Similarly bright colours have been associated with positive feelings; they can evoke affective reactions among customers. For example, research has found changing the colour of a light bulb from white to yellow in a changing room can help an apparel store increase its sales 30 per cent. Yellow colour helps skin to look brighter. But customers think they look good because of the dress.

Packaging and label designs are very strong marketing communication strategies; the same applies to retail outlets also. The colour of the shop, the lighting, the ambience- all in fact adds to the customer association or disassociation.

Moreover, people are not using only their tongues when eating, but also their eyes. A test involved people tasting two cups of chocolate ice cream. One was the original, while the second had a darker colouring added. Most tasters believed the latter cup contained more chocolate.

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Out of the Box

The ears

What shocked The Danish-born marketing guru and brand futurist Martin Lindstrom, most was that what we hear and what we smell are more powerful than what we see. Lindstrom says “Using ordinary research techniques we learned that the most important sense was sight, then smell then sound, Now when we scanned the brain we found the most important is sound followed by smell and then sight."

These tiny sensory organs are direct openings into brain. These apertures are known to change customer's mood and comprehension of situation. Today, music is also widely used to enhance receptive power in an individual. Big retail brands have understood the power of audio branding. Selfridge's spirit department has installed a sound system that creates unique three-metres of sound. Tuned specifically for each brand of apparel, which can be heard only if one is standing in three metre sound space that can only be heard but not seen.

With regard to sound, if a restaurant wants to sell more liquor, it should not play fast music because research has confirmed that slower, "broken-hearted" songs can lift liquor sales 45 per cent.

And who would not be able to recognize Reliance commercials musical score?

The skin

In its heyday, Montreal based departmental store les alies de la mode sold more bikinis in -40 degree temp in winter, than rest of Canada did. It did this by partly recognizing the power of the skin. It stimulated a gentle summer breeze, lifted temperatures to above plus 26degrees and heated the floor in the change rooms.

Who else but apparel retailers would know the importance of skin as a sensory organ? The soft

and textured feel of Benetton would naturally induce a customer buy their shirts. The role and importance of skin on successful retailing is further heightened by the fact that online clothes shopping never took off anywhere across the globe. Reason, customers never could feel comfortable buying clothes online for the fact that this does not give them a chance feel them.

The tongue

While this sense may have historically been limited only to food retailers, increasingly more and more retailers are finding the palate to be an important branding element and a stimulation to shop. Book retailers and apparel sellers worldwide have been using taste buds to stimulate sales. Even banks in United Kingdom have introduced freshly brewed coffee with the intention of making customers feel at home when visiting their banks. Back in India ABNAmro uses this tact successfully.

Sound, words, taste, smell and aesthetics work holistically to create a brand sense. A January 2007 study done by Stanford university neuro-scientist Brain Knutson found that consumer purchases are primarily dictated by feelings rather than logic. The conclusion was arrived by scanning subject's brain activity as they were exposed to a series of products.

Senses provide the context by which we form opinion and personal connection. Sound of the waves, aroma of flowers, the feeling of sand on our toes, the sight of setting sun- all these arouse emotions in us. They might evoke different emotions amongst different people. A retailer would do well to find out which particular sense arouses what kind of feeling. An understanding of this will go a long way for him in determining his success in grabbing customers.

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Bizonomist-10

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Dangerous Drugs

These drugs have been globally discarded but

are available in India. Most common ones are

D'cold, Vicks Action 500 and Nimulid.

ANALGIN:This is a pain killer.Reason for ban: Bone marrow depression.Brand name: Novalgin.

CISAPRIDE:Acidity, Constipation.Reason for ban: Irregular heartbeat.Brand name: Ciza, Syspride.

DROPERIDOL:Anti-depressant.Reason for ban: Irregular heartbeatBrand name: Droperol.

FURAZOLIDONE:Anti-diarrhoeal.Reason for ban: Cancer.Brand name: Furoxone, Lomofen.

NIMESULIDE:Painkiller, fever.Reason for ban: Liver failure.Brand name: Nise, Nimulid.

NITROFURAZONE:Anti-bacterial cream.Reason for ban: Cancer.Brand name: Furacin.

PHENOLPHTHALEIN:Laxative.Reason for ban: Cancer.Brand name: Agarol.

PHENYLPROPANOLAMINE:Cold and cough.Reason for ban: Stroke.Brand name: D'cold, Vicks Action 500.

OXYPHENBUTAZONE:Non-steroidal anti-inflammatory drug.Reason for ban: Bone marrow depression.Brand name: Sioril.

PIPERAZINE:Anti-worms.Reason for ban: Nerve damage.Brand name: Piperazine.

QUINIODOCHLOR:Anti-diarrhoeal.Reason for ban: Damage to sight.Brand name: Enteroquinol.

Compiled by Kushal Makhija

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Out of the Box

Economics is, at root, the study of incentives:

how people get what they want, or need,

especially when other people want or need same

thing. Economics love incentives. An incentive

is a bullet, a lever, a key: often tiny object with

astonishing power to change a situation.

We all learn to respond to incentives, negative

and positive, from the outset of our life. If you

bring consistently good marks in exams your

rewards your efforts. If you are spotted picking

nose in class, you get ridiculed. But if you make

the basketball team, you move up the social

ladder. If you flunk out of college, you have to go

to work at your father's company. But if you

perform so well that a rival company comes

calling you, you become vice-president and no

longer have to work for you father.

An incentive is simply a means of urging people

to do more of a good thing and less a bad thing.

But most incentives don't come about

organically. Someone – an economist or a

politician – has to invent them.

There are three basic flavours of incentive:

economic, social, and moral. Very often a single

incentive scheme will include all three varieties.

For example the anti smoking campaign in

USA. The addition of a $3 per pack “sin tax” is a

strong economics incentive against buying

cigarettes. The banning of cigarettes in

restaurants and bars is a powerful social

incentive. And when the U.S. government

asserts that terrorists raise money by selling

black-market cigarettes, that acts as a rather

jarring moral incentive.

But every incentive has its dark side. If a bottle

of blood were suddenly worth Rs.50000, you can

be sure that plenty of people would take note.

They might literally steal blood at knifepoint.

They might pass off pig blood as their own. They

might circumvent donation limits by using fake

ID's. Whatever the incentive, whatever the

situation, dishonest people will try to gain an

advantage by whatever means necessary.

So this leaves us with on big question – who

cheats or who has an incentive to cheat?

Well answer is just about anyone, if the stakes

are right. You might say to yourself, I don't cheat

regardless of stakes. And then you might

remember the time you cheated on, say, a cards

game. For every clever person who goes to the

trouble of creating an incentive scheme, there is

an army of people, clever and otherwise, who

will inevitably spend even more time to beat it.

Cheating may be or may not be human nature,

but it is certainly a prominent feature in just

about every human endeavor. Cheating is a

primordial economics act: getting more for less.

If economics is a science primarily concerned

with incentives, it also fortunately a science

with statistical tool to measure how people

respond to those incentives.

Consider what happened one spring evening at

midnight in 1987: seven million American

children suddenly disappeared. The worst

kidnapping wave in history? Hardly. It was the

night of April 15, and the Internal Revenue

Service had just changed a rule. Instead of

merely listing the name of each dependent

Incentives are the Cornerstone of Modern LifeComplied by Rajiv Gupta

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Bizonomist-10

Literature for leadershipHimani Detwani, 2nd year

A Spanish landowner who decides to become a

knight may seem equally unlikely model of

leadership as Karna – the Mahabharata's flawed

hero. But there is no denying the fact that

literature serves as an excellent way to polish

leadership skills.

Some of the hardest leadership decisions are

indeed the ones that have ethical stakes. And

literature is a widely accepted tool to learn and

teach ethics and moral values and thus,

leadership.

Among the great classics that have formed the

base of leadership courses in various business

schools across the world are Bernard Shaw's

Saint Joan, Bertolt Brecht's Life of Galileo and

Khalil Gibran's The Prophet. The legendary

Indian Mahabharata through its metaphors,

characters and awesome power it inheres

teaches innumerable lessons of importance to

leaders, one being, the insight that the battle is

always internal, not external.

Top Indian B-schools including the kinds of

IIM-A,IIM-C have also adopted the technique

of using literature to teach leadership.

As they say, “people don't look beyond the

narrow confines of their lives unless they face a

major crisis” literature through the real

experiences that it presents helps us understand

not only cause and effect but also action and

result.

So you have all the reasons to get back to your

favourite books that you gave up reading unable

to look beyond its entertainment values.

The lesson is easy – read more to understand

people better, to lead better!!

child, tax filers were now required to provide a

social security number. Suddenly, seven million

children, children who had existed only as

phantom exemptions on the previous year's

1040 forms – vanished representing about one

in ten of all dependent children in US. The

incentive of those cheating taxpayers was quite

clear.

If morality represents the way we like the world

to work and economics represents how it

actually does work, then the story of phantom

exemptions lies at the intersection of morality

and economics. Yes, a lot of people pay less tax

(about one tenth of total), but vast majority

even though no one is watching over them, do

not. This outcome might surprise some people

but not Adam Smith, who wrote that, “How

selfish soever man supposed there are evidently

some principles in his nature, which interest him

in fortunes of others, and render their happiness

necessary to him, though he derives nothing

from it, except the pleasure of seeing it.”

This story posed a moral question: could any

man resist the temptation of evil if he knew his

act could not be witnessed? Most us would say

yes, but as statistics show, at least 90 percent of

time is, yes.

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Out of the Box

Bidding Adieu to Teachers

this moment in just a few words; each passing moment brings back hundreds of memories to me and leaves me gloomy. No matter how much I progress in my life professionally, I will always miss Khalsa (students, fellow faculty members, classrooms, staffroom etc..) I wish good luck to all my students.”

Ms. Tanu Dhingra

'Chase excellence and success will follow', a line that has now become a cliché, was a part of teachings of Ms. Dhingra way before 3 idiots was released. A lady of few words, Tanu Ma'am has been and will continue to be a source of inspiration for many students. Her quiet ways, strict teaching methodology and motivating pats on the back made her a favourite in the Business Economics Department.

The first issue of 'The Bizonomist' was framed and released under her guidance and supervision. She also played an active prudent role in the Business Economics Society- 'Raah' since its inception. Her valued contribution in organizing the departmental functions like 'Zephyr-08' and Fresher's Welcome was inevitable.

The one thing about Tanu Madam's classes that all her students distinctly remember is her famous impromptu quizzes. She made tough subjects like Statistics and Micro-Economics look easy for her students. So now, as we see her leaving this college, we all would like to bid adieu with a lot of respect and smiles.

Ms. Harleen Kaur

If the Editorial Board of 'Bizonomist' had to put their heads together to find a teacher who could be given the title of 'Miss Congeniality', I am sure they would not have to s t r u g g l e m u c h . A charming personality, a dash of diligence and a persistent smile even during the toughest of problems makes Ms. Harleen Kaur the most deserving teacher for this title.

Head of the BBE Society for 2 continuous years, Member of the College Placement Cell, In-charge of the College Seminar Committee are just some of the jewels in her crown (the one she adorns for being our favourite mentor). Harleen Ma'am has captained the 'Raah' ship with utmost dedication while not letting us students get bogged down by the immense pressure or last-minute troubles. And the results- 2 successful inter-college fests, namely, ZEPHYR-08 and PERSPICA-09 were for all to see.

On the academic front, Business Communi-cation, Mathematics for Business, Business Law, Quantitative techniques for Management were some of the disciplines that she taught. Encouraging liveliness and out-of-the-box thinking in the classroom was her forte. Harleen Ma'am will always be remembered for her outside-the classroom counseling sessions and her jolly nature along with the curriculum lessons.

When asked ………………..

“It is very difficult for me to write my feelings at

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Bizonomist-10

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Gone are The Days

Gone are the days,When the school reopened in June,And we settled in our new desks and benches. Gone are the days,When we queued up at the book depot,And got our new books and notes. Gone are the days,When we wanted two Sudays and no Mondays, yetManaged to line up daily for the morning prayers. Gone are the days,When we chased one another in the corridors in the recess,And returned to the class room drenched in sweat. Gone are the days,When we had lunch in classrooms, corridors,Playgrounds, under the trees and even in cycle sheds. Gone are the days,When a single P.T. period in the week's Time Table, wasawaited more eagerly than the monsoons. Gone are the days,Of fights but no conspiracies,Of competitions but seldom jealousy. Gone are the days,When we used to watch Live Cricket telecast,In the opposite house in Intervals and Lunch breaks.

Gone are the days,When few rushed at 2:30 to,"Conquer" window seats in our School bus. Gone are the days,Of sports day and the Annual School dayAnd the one-month long preparation for them. Gone are the days,Of the stressful Quarterly, Half Yearly, and Annual exams,And the most enjoyed holidays for them. Gone are the days,We learnt, we enjoyed, we played, we won, we lost,We laughed, we cried, we fought and we thought. Gone are the days,With so much fun in them, so many friends,So much experience, all this and more. Gone are the days,But not memories, which will beLingering in our hearts for ever and ever and ever. I hope you went back to your Golden Olden days.....For a while.....as I did!

By Gargi Nagpal1st year

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YES!+ (Youth Empowerment Seminar)The YES!+ workshop covers a sea of topics from blissful meditations to impossible professors and everything in between. Ever wondered why:· We are relaxed but not focused on studies 2 months before the exam.· We sit down to study for an hour and end up with only 20 minutes of productive work.· We are focused but not relaxed 30 min before the exam.· The confidence with which we sing in the shower disappears while singing on the stage.· Parents don't seem to understand our point of view.· The average number of smiles per day was 200 when we were 2 years old and just 20 when we are 20 years old.· We need a hundred I LOVE YOUs to sustain a relationship and one I HATE YOU to break it.It is specially designed for people between the age group of 18 to 30 years. Through this fantastically engaging workshop, you can skillfully break through personal barriers, unhealthy habits, or inhibitions that might have otherwise held you back. Kicking out stage fear, inculcating the ability to flush out stress whether from family, friends, education or your job! All this in 6 evenings!!!To know about visit www.artoflivingprojects.org.

By Lovlish Garg

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Bizonomist-10

In The Loving Memory

“What is lovely never dies but passes into other loveliness”

It seems like yesterday when Isha joined BBE in SGTB Khalsa College, with her charming smile and disciplined nature she won the hearts of teachers and classmates. She was good in academics and was always enthusiastic to do the work entrusted to her.

The cruel hands of destiny have snatched this loving and adoring khalsaite from us. Today she is not with us but she will always b remembered and treasured by all of us in the years to come. May her soul rest in peace

Winds of change have touched my soul

A sense of ecstasy, exalting above allA leap beyond the stars, shining bright

I preserve every moment, the joys & plightSinging the rhythm, the song is still alive

The chirping bird & fleeing deer, still kick a driveEmbarking upon a new life, a new goal to set,

I walk out of the gate, Leaving behind my classmatesLittle did I knew it, but now I feel the pain,

These years in Khalsa, I want to spend againMy heart stops me, whispers things a few

There is a whole life to be lived, before I bid adieu

by Megha Makhija

Winds of Change

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