Brand Modi

Brand Modi

modi2

Contemplating Modi through Marketing Lens

What similarities can you find in odds like Henry Ford, Steve Jobs, Shahrukh Khan and Narendra Modi. It’s true that all of them are masters of their respective fields but they share something else in common as well. They are the marketing geniuses of modern era. Adapting out of the box methodologies to market their brands or marketing themselves is something they all have mastered. Leading from the front is Narendra  Modi. Recent popularity gained by him amongst the Indian youth is the outcome of various marketing tactics adopted by Modi, be it the use of social media, mass media, attacking the competition or targeting the youth. His sucess in Gujarat can be explained by his regressive ideology but his fame outside the state is an upshot of his brilliant marketing of Brand NaMo or Brand Modi.

Social Media Mammoth

The self proclaimed youth icon has utilized the potential of social media better than any other. He knows how to make the most of social media and today’s youth is all about social media. Youtube videos, facebook pages, twitter account, conducting webinars or advertising on different websites, Modi has exploited each channel of social media to lure the youngsters with his aggressive marketing techniques while setting up Brand Modi. One can see the tagline ‘Do you want your country to be MODI-fied?’ flashing on the side of their desktop screens. These links are redirected to the website ‘narendramodi.in’ where he boasts about how he alone has led to development of state.

The Halo Effect of Brand Modi

It is quite evident that Modi has created a Halo effect over BJP. He found out the leadership vacuum, projected himself possible solution with the help of business tycoons and marketed himself brilliantly inside and outside BJP as the only alternative to fill the chasm. His website considers BJP as a keyword only and it is hard to find the policies of the national party on the website of their Prime Ministerial candidate. He went against the old communal ways of BJP by adopting tagline of ‘Toilets first, Temples later’.

NaMo vs RaGa

One more aspect of the marketing techniques used by Modi is comparative advertizing which has turned out to be a huge advantage for him. He attacked the opposition directly on most of the occasions on the grounds of corruption, policy paralysis, growth or any other agenda which magnetizes the attention of the youth. Attacking the potential candidate of Congress for Prime Minister, he left no stone unturned while ‘assaulting’ him. Narendra Modi started the trend and others followed. He portrayed Rahul Gandhi as a dumb leader and soon there was a buzz. Troll market got a new topic, jokes expanded to a new dimension and websites like rahulgandhiachievements.com showing a clean slate and pappupedia.com popped up within no time. Modi always talks of modernization without westernization. It’s left on others to decide whether western refers to western nations or Sonia Gandhi!

Behind the Curtains

Success story of establishing Brand Modi can be attributed to his PR team as well. The ad firm Grey Worldwide, which began the rescue operation for Modi after 2002 riots, came up with the concept of Vibrant Gujarat for the tourism department, was given a wider and more ambitious brief – to convert the state into an investor summit.
Post Grey, Apco Worldwide was hired by Modi which has a better team consisting former senators from Republican and Democratic parties working with it. The firm has a distinction of taking contracts of boosting images of leaders who fell out of favor of their followers and it worked out for Modi as well.

Targeting college students and restless youth of country and positioning himself as the only cure of policy paralysis has been a successful strategy for Modi so far. He has been able to gain the interest of tech savvy youth of the nation but it will be interesting to see whether he is able to capitalize it or not. Nevertheless, Brand Modi has been established big time and the chants of ‘NaMo Namah’ will get louder as time proceeds.

Heading Towards a Hung Parliament!

Heading Towards a Hung Parliament!

Parliament

A hung Parliament is one in which no party or coalition has an overall majority, which means that no coalition is able to attain half the number of total seats in the parliament which is often referred to as Magic number. In case of India, if UPA, NDA or the third front are not able to attain 272 seats in the upcoming elections, then it will lead to the situation of hung parliament.

The parliamentary system has suffered a rapid decline mainly owing to efforts on the part of our politicians to subvert the system in the name of democracy. Mushrooming of political parties has also resulted in a large scale erosion of political values owing to growth in electoral malpractices. Emergence of regional parties and multi-party system at the centre further in fumigate the problem. These developments are not good either for our democracy or for our growth and development.

Country hasn’t come out of its leadership crisis yet and considering the current scenario, it seems very difficult that any coalition (let alone any single party) will be able to gain majority at the centre. With Nitish still having firm stand against Modi, despite the loud ‘NaMo Namah’ chanting in BJP, they haven’t been able to nominate Modi as their Prime Ministerial candidate. On the other hand, anti-incumbency, inflation and ever increasing corruption in the country have made it difficult for Congress to regain power and run the country for another 5 years. Stand of SP and BSP is always hard to predict but this time they have decided not to play the role of (just) king-makers and both Mulayam and Mayawati are eyeing on Delhi to be their next destination. Even Jayalalithaa is not far behind. The only outcome possible from this situation seems to be a hung parliament.

Power in Hands of Pranab Da!!!

In case of hung parliament, power lies in the hands of President of the country, Mr. Pranab Mukherjee. He has the right to invite party of his choice to form the government at the center level. The person who had always dreamt of becoming the Prime Minister of the country can get a chance to play an even bigger role. If Congress tags itself as the Pandavas of Indian political Mahabharata, then Pranab da was definitely Lord Krishna for them and finally he may get chance to prove his worth.

Both the major political parties of the nation are aware of the fact that it will be hard for them or their alliance to reach the magic number in the parliament and hence, they can be seen flattering the President. Each policy of UPA is being passed only after consultation with him. Don’t you think it is too much power already in his hands who is often considered to be rubber stamp in our nation? Moreover, Modi who lashes out his anger on all the leaders of UPA never gets tired of praising the old man in his speeches. Both parties realize how important role he can play if none of them is able to get the majority. With just one year left for the elections, it will be interesting to see what new emerges out of Indian politics and how it shapes up.

A Bumpy Ride for FDI

A Bumpy Ride for FDI

FDI_1

Indian politics and media in the latter half of 2012 put FDI in retail on center stage. The reasons were quite vivid. In a show of audacity, the United Progressive Alliance government has decided to further open up the retail trade sector to foreign investment. Foreign investors will be permitted to enter the hitherto prohibited multi-brand retail segment and hold equity of up to 51 per cent in the units established. Other sectors to open up FDI in India are Aviation, Pharmaceuticals, Insurance and Pension.

Two sides of the coin

Facing the threat of having its credit rating downgraded to junk, the Indian government has been running out of time to show it is serious about fixing an economy that has been hard-hit by a global economic crisis and political gridlock at home. Finally, despite all the opposition and without having the consensus of alliance, UPA opened up the gates for the foreign companies in a desperate attempt to save the sinking economy. This move is nothing short of a declaration that UPA would proceed with implementing its agenda of economic reform, irrespective of whether there is majority support for, let alone a consensus on, that agenda.

The claims that FDI will bring in loads of employment and solidify the looming economy are contrary to the fact that the immediate and direct effect of FDI would be a significant loss of employment in the small and unorganised retail trade which would be displaced by the big retail firms. Prices paid to and returns earned by small suppliers, especially in agriculture, would be depressed because a few oligopolistic buyers dominate the retail trade. Moreover, once the retail trade is concentrated in a few firms, retail margins would rise, with implications for prices paid by the consumer, especially in years when domestic supply falls short.

Even if the postulations made by the UPA government turn out to be true, as vivid from the fact that India’s foreign direct investment inflows grew by over 65% year-on-year to $1.94 billion in October, according to the Department of Industrial Policy and Promotion (DIPP), yet the scenario won’t turn around overnight.

Hurdles in the way

The decision of implementing the FDI has been left to the states and most of the states have already rejected the concept as whole. Due to such strong opposition, most of the organizations have decided to wait till the clouds of mystification disperse and the scenario becomes clear for investment.  Even after the state’s blessings, which is unlikely to happen in most of the cases, large retailers would need to acquire large swathes of land in prime areas, which is a monumental task. Secondly, companies like Walmart are able to reap supply-chain efficiencies in the U.S. because of a strong infrastructure. The same thing can’t be said of India. Thirdly, taking into account that Indian consumer is a very complex persona, organized retail seems to be a small fish that would neither threaten the livelihoods of “kirana” shops, as portrayed by the Opposition, nor restore the financial health of the nation, as hoped by the government.

The road for FDI turned out to be quite a rough one in India. Whether it was inside the parliament or outside it, the issue turned out to be a centre stage for all the controversies. The step to let FDI in multi-brand retail didn’t go down well with Opposition parties and erstwhile UPA ally Trinamool Congress, which decided to withdraw support from the government over the issue and others, including hike in diesel prices. The issue stalled proceedings of Parliament till the government agreed to a voting on allowing of FDI in multi-brand retail that it managed to win, thanks to the abstention of Samajwadi Party and Bahujan Samaj Party.

Just when the government thought it was done with the issue, Wal-Mart’s disclosure in the US that it spent close to $ 25 million since 2008 on its various lobbying activities, including on issues related to “Enhanced market access for Investment in India”, created furor again. The company, however, stressed that it did not pay bribes to anyone in India. It was IKEA that made news continuously in the single-brand segment. The Scandinavian retailer wanted the government to relax the clause for mandatory sourcing of 30 per cent from MSMEs. After months of dialogue, the government relented and relaxed it for single brand segment which seems to be a favor done to IKEA.

On one side exist the exaggerated claims made by the government that FDI will be beneficial for the economy as well as common man and on the other side stands the small retailer who is genuinely worried about his livelihood supported by the opposition. Now that the foreign retailer have been granted a foothold in the market, only time will tell if the arrival will kill the neighborhood kirana stores or they will co-exist.

Fiscal Deficit and FRBMA

Fiscal Deficit and FRBMA

 

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Finance Ministry is trying hard these days to curtail the Fiscal Deficit somehow which is currently as high as 5.3% of the GDP. What is this fiscal deficit? What is this buzz all about? Fiscal deficit takes place when a government’s total expenditures exceed the revenue that it generates (excluding money from borrowings). In simple terms, it is the difference between the ever increasing expenditure and small income.One can not think of utopian economic situation in a developing country like India and to have zero fiscal deficit as it will slow down the economic growth of the nation.

Too much of economics? Let’s try to analyze things in a simpler way. Suppose you have 30,000 bucks as your monthly income and your total expenditure for a certain month is 35,000. Now you need to raise the additional money required somehow and luckily you have a very generous friend of yours who is ready to lend you the difference. So, in such a case 5,000 will be your fiscal deficit. Doesn’t seem to be much of a problem right? The real lies problem lies with how you are going to spend that 5,000. It won’t be much of a problem if you want to buy a camera or invest the money once only but it can create a huge trouble if the expenditure is recurring one let’s say treating your girlfriend.

The next month, supposing your income remains flat and you are not able to meet your ends once again, you again approach one friend or the other and someone comes up to the rescue and provides you money without asking for the principal amount immediately and just demands the interest. You were already in need of more money and adding to your worries are now the interest liabilities. The problems get compounded. You now start curtailing on the capital part and your new loans are just for running the system. A scenario is reached when the interest payment by you requires loans from him. And this is the situation when your are doomed and things have got really messed up.

This is exactly the current situation of India. For benefit of the people and sometimes just to fulfil the political motives, government has been giving subsidies on oil even to the rich people driving SUVs more than it can sustain and to add to the problem are various bills passed just with the motive of staying in power. As a result we have a huge fiscal deficit piling up in front of us and we don’t have enough money to run the existing system. Hence, government keeps on borrowing money to pay the interests only. Unlike an individual who may or may not get loan from his friend, there are many agencies who are bound to lend money to the government, be it RBI or any other bank.

Suppose you are in a similar kind of situation. All you wish for is you had a ‘money tree’ or a currency printing machine with you. The government is one step ahead of you as it has control over the currency flow in the country, though indirectly. Consider this, if the government prints currency rampantly but the production is constant, it will lead to increased inflation as more money in the economy chases the same amount of goods. Curtailing the fiscal deficit by printing money can have damaging effects and can burst the whole economy. A classic example in this context is of Zimbabwe which had inflation rate of 300,000% at one time.

FRBMA

After the enactment of liberalization policy, billions of liabilities were being added every year. A major part of the revenue collection through tax went alone to interest payments. In the light of need of change, government introduced the Fiscal Responsibility and Budget Management Act (FRBMA) in 2003. The main purpose was to eliminate revenue deficit of the country and bring down the fiscal deficit to a manageable 3% of the GDP by March 2008 by reducing it at a minimum rate of 0.3% annually. The Act provided that the government shall not borrow from the RBI except under exceptional circumstances where there is temporary shortage of cash in particular financial year.

However, due to the 2007 international financial crisis, the deadlines for the implementation of the targets in the act was initially postponed and subsequently suspended in 2009. In 2011, given the process of ongoing recovery, Economic Advisory Council publicly advised the Government of India to reconsider reinstating the provisions of the FRBMA. With the upcoming elections in 2014, one can not believe that current government will take any harsh steps for the enactment of FRBMA and curtailing the fiscal deficit as it involves short term pain and the government doesn’t want to take risk. Considering the ongoing scenario, it’s hard to predict whether FRBMA will actually come into existence or not and how will India be able to manage its Credit Rating.

Damned if you do, Doomed if you don’t

Damned if you do, Doomed if you don’t

Capital Punishment

9th February 2013 witnessed hanging of Afzal Guru, prime accuse of the attack on Indian Parliament that took place on 13th December 2011 causing a loss of many lives. The ‘said to be’ main conspirator in the Parliament attack case was executed and buried in Tihar jail in secrecy making it second such event within 3 months. Protests by the various sections of the society, curfew in Kashmir, celebrations by the right wing marked a final closure to the case. It has disturbed some and settled others. The situation of the government can be simply described as: Damned if you do, Doomed if you don’t

Marking of another Separatist Movement?

The graveyard of the Tihar Jail where Afzal has been buried houses the body of Maqbool Bhat in the very vicinity. Bhat, executed in 1984, was accused of conducting Pakistan’s military operations in India, recruiting cadre to launch a secessionist movement and robbing a bank intended to raise funds. Though the death of Bhat was ignored by the state, from 1987, as the secessionist movement in Jammu and Kashmir started gaining momentum, Bhat’s political heirs finally began getting a hearing. The anniversary of his execution has been among the biggest events on Kashmir’s secessionist political calendar, commemorative protest marches and strikes. Hence, it’s not very hard to believe that Afzal will also become a rallying point for the separatist movement, drawing a new generation of young people to join the cause.

Curfew, yet again

The event has turned out to be yet another nightmare for the people of Kashmir. With questions being raised over the fair trial of Afzal, the whole valley has been put under curfew following the unease created by his execution. Apart from blocking the highways for public use, authorities have also snapped the internet and mobile services in the valley and restrictions have been imposed on media so that the turmoil can be controlled. Anger outbursts of Kashmiris with Anti-India slogans and violence at many places have disrupted the normal life in the state.

Time to Celebrate?

Just after the execution took place, supporters of Bajrang Dal and VHP were found celebrating on the streets, distributing sweets and bursting firecrackers to mark the victory of the nation over the terrorism. They were witnessed fighting with the Kashmiri students who were protesting against the way Afzal was hanged. But has the war against terrorism ended? Have we knocked down the masterminds behind these terrorist activities? Aren’t we making a mistake again by crushing the puppets when the real devil is still out there, roaming free and wild? Moreover, with our own nation boiling, is it actually a right time to celebrate?

Political Gains Indeed

With the hanging of Afzal Guru, UPA hopes to finally shed its soft image. The decision of the execution comes right before the Parliament session forcing BJP to change its track and putting it on the back foot. It will also help UPA in making some development in the saffron terror cases. Moreover, it has become difficult for the BJP to target Sushil Kumar Shinde over his Hindu terrorist remarks as he had taken an active role in the decision of execution of Guru and has cleared the stand of the UPA-led government against any type of terrorism in the country. It will also help UPA counter Modi, who was seeking a muscular action against terrorism.

Vengeance or Justice?

Execution of Guru triggers the debate of capital punishment once again. There were no protests seen in the country when Kasab was hanged. Being a Pakistan’s nationalist, involved in the firing himself didn’t have the support of Indian public but in case of Guru, who surrendered himself after the parliament attack and whose family is still awaiting his body, the question of validation of death penalty rises again. It also goes opposite to the growing global consensus against death punishment. It seems like there is no other principle strengthening the laws of capital punishment in India except vengeance.

Hear No Evil

Hear No Evil

Hear No Evil

The Right to Freedom in Article 19 of the Indian Constitution guarantees Freedom of Speech and Expression to each individual stating that: “Everyone has the right to freedom of opinion and expression, this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.” India is a home for many different communities and religions. Indian Population is poly-genetic and is an amazing amalgamation of various races and cultures. Learning different values, following different cultures, living in different scenarios leads to difference in opinions and beliefs amongst various societies. Yet, India has given each one of them a stage to express their emotions.

But using this freedom of speech to realize the political motives and supporting separatist movements is precarious for a secular state. In such an incident, Akbaruddin Owaisi crossed all the lines with the pure poison he served up in his speech at Adilabad on 24th December 2012. Akbaruddin Owaisi is floor leader of All India Majlis-e Ittihad al-Muslimin in Andhra Pradesh and MLA of Andhra Pradesh legislative assembly. Owaisi has got a past record of making inflammatory speeches. In 2007, he threatened to kill Salman Rushdie and Taslima Nasreen. On 24th December 2012, while addressing a rally of about twenty five thousand people, he criticized the police force of India and called them impotent and raged all the Muslim community against the Hindus.

However, Mr. Owaisi is not the first person to thumb his nose at the laws of the land through hate-filled utterances. In India, Hindutva and Islamist leaders and activists have often mobilized men and materials through inflammatory hate speeches. Rival religious extremists survive by feeding off each other. VHP leader Praveen Togadia, the late Shiv Sena leader Bal Thackeray, and BJP leader Varun Gandhi are prominent among the many in the Hindutva parivar to have made hate speeches. The law enforcing authorities prefer not to touch these extremists citing that their organizations will unleash violence in the event of an arrest. As a result, these hate speeches become a never ending phenomenon endangering the secularism of our nation.

Mahatma Gandhi used three monkeys to spread his message of  ‘See no Evil, Hear No Evil, Speak No Evil’ and if someone is using these speeches as a tool of accomplishing political motives than its our duty that we act against such instances. Examples are required to be made of starting from Owaisi himself. Civil society needs to make it clear that those who incite hatred and violence against people on the basis of their religion or any other identity ought to be punished one way or another. If the police or courts won’t prosecute, convict and send them to jail, such would-be ‘leaders’ must be boycotted socially and politically. One should give zero leverage to all opportunist ‘leaders’ who love exploiting religion for political ends. Only harsh actions can curtail these speeches and the time is quite right to begin with.

Gold Taking Shine Off Indian Economy

Gold Taking Shine Off Indian Economy

gold

Akshaya Tritiya in 2004 marked the beginning of a trend in Indian economy which changed its shape remarkably. India was a ‘Golden Bird’ once and then various foreign invasions followed by British rule exploited Indian gold reserves completely and spared a very less amount in the hands of native people. But if we have a look at the past few years, ironically, it seems like Indian masses have decided they will bring the glory back to the country and they have taken all the burden on their shoulders itself. Else, its difficult to explain the gold buying spree that is making new records each year.

India’s current account deficit problem has been driven by the insatiable demand of gold by the customers in the first place. With just three working gold mines in Jharkhand and Karnataka, all the demand is met by importing gold from UAE, Australia etc. As a result, the imports increase every year due to the ever increasing demand of gold, thereby widening the fiscal deficit. The wedding season in India is an occasion that demands a much bigger spending spree on gold than any other festive season in the country. Ostentatious weddings are the perfect occasions to show off one’s jewellery. Apart from this, precarious market nature and low return on investments in various institutions have shifted the interest of investors to gold which has been quite successful in giving back excellent returns.

The glittering yellow metal has always been a reason of worry for the economic policy makers. Too much investment in gold reduces the liquidity in the market. Fiscal deficit is widening with the increasing oil prices, weak government and adding to that, heavy imports of gold.

Government has been trying to curb the gold imports but love for the metal has failed all the policies adopted till now. People keep on purchasing gold for marriages, dowry, offerings in temples and nevertheless as investment. Import duty was doubled to 4% last year but didn’t produce the results as expected. Now, Finance ministry is thinking of regulating the gold imports by fixing the upper cap and it has further increased the import duty to 6% but there is a risk associated. There is a very high probability that it may wake up a sleeping devil – Smuggling.

The motive with which institutions like Muthoot, Manappuram were allowed also seems to have backfired. Loans provided by them do increase the liquidity to some extent but they have made gold loans readily available to everyone thereby increasing the tendency of the investors to buy more gold that will not only ensures good value addition but can also be encashed easily when required. The funds used to buy gold are misallocated capital because when the capital will be needed for investments, it will be difficult to find it as it has already been invested as gold.

While any policy aimed directly at curbing imports is unlikely to succeed in the long term, there is a ray of hope for the government, and it lies with the vast gold stocks that Indian households have. The RBI report talks of ways to fulfill some of the domestic demand for gold by further unlocking that vast stock of gold, such as by making banks and importing agencies that bring gold into the country, act as both buyers and sellers of domestic gold (rather than just sellers as of now). Perhaps India’s current account deficit problem could be solved by the same public who drove that deficit upward in the first place.