Thursday, April 28, 2016

We need peace in investments and not high alpha created income inequality.

Last year I covered some hard facts about income inequality where prostitution have been taken up by many families who are struggling to have a half day meal in well developed economies. Surprised but the fact is that earlier we used to find these stories in poor economic countries like Africa etc. But the current economic times  after the recession of 2008 to till date completing 8 years and about to become decade in next 2 years.  Post recession it’s evident that we did not get growth in the world largest GDP and even in European countries despite of spending billions of QE and Bond purchase and now the Helicopter Money.  Among all these the developing economies have also got under the influenza of slow GDP growth like china.  Historic recovery of economic crisis have been easier since after a collapse there have not been tail of bombs for financial crisis erupting form different economies. This is one of the key reasons why historic global financial economic collapse revival has been faster compared to the current journey of 2008 recession. Income inequality is a legacy of financial fortune which have been passed for the next 100 years as the current generation at various stages of life will remember and will teach the collapse of the financial fate of their individual families and life.

Within the BRIC only the (I –India) am left and rest is broken. Wealth Managers and Wealth Houses in the financial market have closed their shops and are in search of new jobs or new opportunities of exploitation.  Stock buy backs and shareholders wealth increase have been played very judiciously by the capital markets across the globe. But we did not bother about the legacy of the knowledge and fear we have injected each day over the last 8 years within the generation of each age in every country across the globe.
Income inequality have widened up as financial crisis of 2008 has began with series of financial turbulence with Euro zone and with china and last but not the least with crude oil prices and its economic slowdown and financial crisis arising from the same.     From 2008 we have created huge hole of income inequality across the globe through the financial collapse of the various economies. Hence the recovery and the aftershocks of jobless and bankruptcy have been chasing the people across the globe over the last 8years. In these 8 years we have changed the mind set and behaviors of the societies across the globe in terms of its reliance on the government policies and financial policies. Governments are busy to post healthy employment growth but the fact is that instability and lack of skill due to income inequality have eroded the fate of the people. Middle class society is just getting eradicated and getting under the poverty line. Poverty line people are getting below the poverty line where survival becomes at stake. For a middle class people having good job and providing a better education to his next generation are the most important requirements. Trail of Financial crisis has created huge gap of income inequality. Just imagine and figure out how many people reduced and created wealth among the middle class and poverty line in terms of the down Jones scaling new heights. Rich share holders multiplied their wealth whereas other lost since the theory of derivative reveals one wins at the cost of others loosing.

From 2008 the Journey begins:
·         Financial crisis lead many families to become bankrupt and also jobless. The historic number done not require to give a poof of the pudding.
·         Many mothers opted prostitution to feed their families. The majority had come into the sex trade from so-called respectable careers – including one woman who had been a senior manager in a private sector business. Growth of tourism gave an opportunity to these struggling families to opt for prostitution in replace of stable job.
·         Many children’s between the age bracket of 5 to 12 have to change over schools as their families could not bear the cost due to recession and lack of job opportunities.
·         The recent Greece problem gave a good lesson that if you park you money in banks you might not get back your funds.
·         Buying bonds to avoid the volatility of the global equity market is no longer a safe zone to invest.
·         A Student newly qualified 21 years student choose to do low quality and much degraded jobs to feed themselves.
·         Education loan have become nightmare which have forced the students to opt for poor quality in higher education which has lead poor jobs due to lack of skills.
·         A 30 years fellow had to file for divorce as his family went for a toss as he became bankrupt.
Now from an 5 years age kid to an 21 years  age graduate fellow to an 30 years person all have got an lesson over the last  8 years as they grew up to the age of 13, 29 and 38  respectively about income crisis and wealth crisis. They have got one of the strongest lessons of the financial crisis where destruction the life and pattern of living has taken a toll. They have got the lesson of investing and getting bankrupt in complicated high alpha generating toxic products. They have also burnt their fingers towards investing in bonds as they blindly believed the banks and governments without reading the indenture of the bonds being issued.
In between the global climate has changed dramatically which has also pushed down the growth of the family’s wealth even after trying hard to earn and get out of the falling life style.  Few of the natural calamities which have severely increased the income inequalities across the globe
·         Japan Earthquake
·         Haiti Earthquake
·         Nepal Earthquake
·         Houston Floods – President Declares Major Disaster
·         Ecuador earth quake
·         Texas Floods
·         Uruguay
I might have skipped few countries and some more major events but on a overall basis the natural calamities have increased income inequalities and have widened the savings and bankruptcy risk. Small savings are getting wiped off at the same time. A person who has done some savings and has accumulated wealth from some investments also gets into repairing these natural calamities.  We have created situation where the behaviors of the generation will take toll on their economic growth. This generation will be skeptical towards financial products and hence wealth managers have no option but to look out for jobs. Now the demand of the time is being unheard and also we are busy in exploring the world of new financial products which will create more alpha. The financial product designers have destroyed the investor’s savings and their mind set towards investors into a nightmare. Alpha no longer suits any investor particularly the ones who have burnt severely over the last 8 years.

Savings rates across the globe have come down significantly as they are struggling for their daily activities.  Financial products investments have come down as they have no savings or they are reluctant to go for savings due to trail of ongoing financial collapse. Job security and social security benefits are at the highest risk point and both cant taken for granted for the next 20 years. Global investors don’t need any alpha generating product neither inflation beating products as inflation itself is as at such historic lows.  Governments have broken the faith of investing in bonds and also parking money in banks. Your money and you will not be able to withdraw from banks. We have given hard lesson to the society for the next 100 years through this financial crisis and foolish activities of the government. Every year either banks or an economy or a government comes under collapse. Stability of an economy is a matter of distant dream for the global economy. Natural calamities have also increased the income inequality. The conclusion is that we have created mess and the financial product designers and managers needs to come up with plain vanilla products and not super alpha product. Risk of investments and the nightmare related to the same is at high level. 

Monday, April 18, 2016

Threat to Indian Pharma Industry …Ignoring Cost Audit Applicability

My piece of article is to attract the attention of our Honorable Prime Minister alerting his government and other ministers of various industries to save the Indian economy from the collapse of the competitiveness of India in the global map. Its being found this matter to be taken on serious note and request the Honorable Prime Minister should interfere to understand the long term damage of the Indian economy through the ignorance of Cost Audit applicability in many industries.  Our Current government and our Honorable Prime Minister are trying hard to attract overseas investments in various sectors and make India to be a global exporting hub. Make In India the term can be criticized and can be taken in an high positive opportunity for the upcoming sustainable economic growth of India. In between what I find that the internal meaning of Make In India is that India is an low cost producing country and the government is focused towards providing sops, taxation benefits etc for the attracting overseas investments into the country.  It means India is a low cost producing country compared to other countries and Indian government will give tax benefits and other incentives to make these investments into profitable compared to other countries.

But How the Current Government and Honorable Prime Minister will come to know what type of tax benefits and is India a low cost producing country. Cost Audit Report use to guide and help these things but in 2014 it has been cut down in many  industries and even capped at higher levels in terms of turnover and on other parameters. My question to the Prime Minister and other Misters of the Industries that how you will decide the benefits for the growth of an Industry and how you will succeed in make in India if you don’t have data to measure. Cost Audit and Cost Accountants used to provide the data. Its immaterial what the previous government recognized and the policy action there to.  Honorable Prime Minister we are discussing about the growth of the Indian economy during your reign and also over the long term. We are discussing about the long term growth of the Indian GDP.

The reason, why I am raring this issue is that currently few industries of India are shifting their base ion overseas countries where employment to capital investments from plant and machinery to government revenue will flow into those countries pockets. I fear that Indian economy will lose a huge amount of taxation revenue as well as exporting country title over the long term. Currently a Major industry of Indian economy is on the way of flight of shifting from India.

Generic Drug market is quite big opportunity for the Indian pharma companies. The pharmaceutical industry in India has grown from mere US$ 0.3 billion turnover in 1980 to US$ 20 billion in 2014-15. The Government of India unveiled 'Pharma Vision 2020' aimed at making India a global leader in end-to-end drug manufacture.  India’s exports are expected to account for 72% of the total pharma production and reach a value of $40 billion by 2020. Generics dominate the pharmaceuticals market, constituting nearly 70 to 80 per cent of the market. India is the largest provider of generic drugs globally with the Indian generics accounting for 20 per cent of global exports in terms of volume. India’s pharmaceutical export market is thriving due to strong presence in the generics space.But this plan of achievement will fail miserably as many wrong policy decisions as the macro level have been taken recently in 2014. Before we get into the details of the catastrophic collapse of the vision we need to have an idea about the future growth of the Indian pharma industry.

Threat for Indian Economy as production facility shifts
Now the opportunities are big but there is significant threat to the Indian economy in terms of export income from the pharma industry through the generic drug segment. Recently the Japanese government has invited Indian pharmaceutical companies to set up ventures in that country to meet the growing demand for high quality and inexpensive generic medicines. Indian pharmaceutical firms are eyeing JV opportunities in Japan's growing generic market as the Japanese government aims to increase the penetration of generic drugs to 60 per cent of the market by 2017 from 30 per cent in 2014, due to ageing population and rising health costs. This will lead to shift of jobs, demand of plant and machineries and investment capital to other countries. This is an economic loss to the Indian government measured over a long period of time. Many small and medium pharma companies will enter into JV with Japanese firms and African Firms and will lead to shift of manufacturing base to these countries.   In FY15, pharmaceuticals industry of India exported products worth USD15 billion and the exports are expected to reach USD40 billion by 2020. This 2020 dream might not be achievable as exporting hubs in India are shifting to other countries and this will create loss of revenue and employment for the India government.
Don’t compare Indian markets with US and Europe in terms of low cost production facility. New markets like Russia, Latin America Japan are joining the wagon of low cost producing. I would like o draw the attention of the prime minister of India to look into these new threats. Its true that India’s cost of production is nearly 60 per cent lower than that of the US and almost half of that of Europe. Labour costs are 50–55 per cent cheaper than in Western countries The cost of setting up a production plant in India is 40 per cent lower than in Western countries. But if I compare the same with Japan and other countries Indian exports are at threat.

Reasons for Shift
The reason for shifting is that these countries are low cost producing countries and they will take many cost advantages as these countries don’t have thresh hold for cost audit applicability.  We all know Japan have been pioneer country in terms of  application of costing tools like  Kaizen costing, Just in Time (JIT),Activity based costing ,Life cycle costing, Target Costing and many other costing tools. Japan has strong management accounting system which has been one of the key reasons for making its industry competitive compared to US in the history. Cost Audit and its Applicability have been revised in the year 2014 where many industries either completely abolished or partially abolished and in some case the threshold limit have been hiked to such extent that many industries don’t come under the cost audit applicability. Further Six leading pharmaceutical companies have formed an alliance ‘LAZOR’ to share their best practices, so as to improve efficiency and reduce operating costs. Once they achieve the same they will shift out from the Indian markets and open shops in those countries.
   Loss to the Indian economy
Now recently cost Audit rules have been capped for pharma and Drug segment where applicability of Cost Audit will be subject to a turnover of Rs 50 cr for all products an services and Rs 25 cr for individual product.  The cap is working against of the Indian economic growth as many companies will make flight of investments and manufacturing as they are unable to measure neither the government is able to measure cost advantage achieved by the industry while operating in India. Cost Audit applicability helped the industry as well as the government to design incentive plans for the growth of the Industry. Now the biggest proof of growth based incentive for the industry growth can be measured through the FDI Inflows when cost audit was compulsory for the Indian Pharma industry. The biggest loss will the generic drug export market of India will come down dramatically if pharma companies loose low cost exporting competitiveness. The share of the generic drug market is 70% currently.

 When Cost Audit Applicability was In Place
Just look that when cost audit applicability was not at all there for the Indian pharma industry during 2000 to 2011,  the sector attracted cumulative FDI inflows worth US$ 10.32 billion between April 2000 and September 2011, according to data released by the Department of Industrial Policy and Promotion (DIPP). This inflow will come down significantly over the years as more companies will shift to Japan and African countries taking advantage of low cost of production and also efficient costing methods and efficient audit mechanisms.

The loss will not restrict to the Indian pharma industry, it will spill over to other industries which lead to catastrophic loss for the Indian economy in the long term. Moreover the FDI investments will come down significantly after the restriction of cost audit applicability.

I request our Honorable Prime Minister to look into the matter and save the Indian GDP growth over the long term.
Registration Number is : PMOPG/E/2016/0125520

Sunday, April 10, 2016


The current market scenario is tough and its going to be tough as months will progress. I wanted to keep the entire message to be short so that one can get a idea about how to go ahead. India ,US and Chan will come up with its quarterly results which will keep the global equities and bond markets under extensive volatile.US corporate profits are going to plunge as dollar and manufacturing base have been low. The US economy might have grown but the corporate profits will be devastating which will also affect the global markets in the coming weeks. Further as more US election days will come forward the investment climate will stall and more focus will be after elections. According to the Department of Commerce corporate profits before taxes fell 11.5%, by nearly $160 billion, from a year ago.

For the year, profits decreased $64 billion, compared to an increase of $35 billion in 2014 from the year before. This time the profits will not be coming down only in energy segment. Ancillary industries and manufacturing will be taking a hit. According to factset  of the 119 companies in the index that have issued earnings guidance for the first quarter this year, 93, or 78%, of those companies have warned they are likely to miss estimates. Of course, companies are likely to pre-report if its going to be bad news to blunt the blow. Still, this quarter’s negative pre-reports is above the 5-year average of 73%. Now those who are betting on that DowJones and S&P 500 will bounce back better be careful. The trigger of stock by back using Zero interest rates funds no longer exists.  Hence by back based stock price making new highs is over. Share repurchases decreased 3.4%  in the fourth quarter from the previous three-month period and are tracking at a 21-month low in March, according to respective data from S&P Dow Jones Indices and TrimTabs.  Companies have been using reductions in share count as a way to boost earnings profiles, raise stock prices and reward corporate executives. Capital goods orders have also declined which reveals that manufacturing affect will be reflected in the quarterly results.

 If we look at the 4th quarters we find and with profits after tax, without inventory valuation and capital consumption adjustments, falling at an annualized rate of 8.1%  from the third —the largest quarterly decline since the first quarter of 2011.Year-over-year, corporate profits declined 3.6% in the fourth quarter, but for all of 2015, profits were up 3.3% from 2014.  Getting further into the numbers its being found that after-tax adjusted profits, which more closely reflect profits on production during the quarter, fell 15% in the fourth quarter from a year earlier, the steepest year-over-year drop since 2008. The largest profit decline came in manufacturing, especially in production of petroleum and coal products. Profits will fall along with that he corporate defaults will also begin and considerable delay in bond payments will strike the global economy.

At home the Indian economy will face a severe draught situation as extensive heat has already taken strong hold of people across cities.  Severe drought conditions prevail at the moment in at least 10 states in India. Maharashtra, Rajasthan, Madhya Pradesh, Gujarat, Haryana, Andhra Pradesh and Telengana are all staring at a bleak summer, already experiencing severe water shortage, with at least two months to go for the monsoons. People don't have water to drink, cook or perform their daily ablutions across vast tracts of the state. In Latur, two big hospitals reportedly stopped surgeries due to lack of water and several agro-based industries had to shut down, forcing migrant laborers to return to their home states. Inflation will grow and this will create limitation on consumption segment over the long term. Farmer’s suicide cases will grow and Indian government will face some hard times in between in passing policy reforms.
In between the problem of falling profit don’t restrict to US-china and Europe will also join the race.  Nifty will be volatile and will ride some of the hardest times since Indian banking results will come up with more NPA which will keep markets under pressure. The 4th quarter results of India will be another volatile phase which will lead more investors to sit on cash. Well China is still awaited to be covered.

Wednesday, April 6, 2016


 There is a radical shift which I have been calling form a long time in terms of Chinese investments in other countries.  The recent investment trends are sufficient enough to prove that the long term society of many developed economies like Europe and US will have Chinese neighbors and shops. If some on look meticulously towards their investment pattern one will get a clear idea about their long term vision in terms of building wealth and assets. China ‘S outward direct investment (ODI) has elevated to 80 percent year-on-year in January and February 2016.

Now please don’t jump into conclusion that they are investing in African mines. In other words they have shifted and reduced investments in mines. Their middle class rich people are investing in properties and shops, business etc and that’s too in Europe and US. Well I repeat again that this is very reason why Chinese currency has been included into IMF basket of currency. Their business investing is through equity routes and less through debt which means their investment strategy is to get control in the long term. Equity now accounts for 80 percent of China’s direct investment assets abroad. China has learnt a hard lesson that investing in mines is not cup of tea for every rich Chinese people. Hence they are being invited and investing in manufacturing, services and infrastructure projects. The M&A have jumped to 60% in 2015 from 40% in 2010. Chinese direct investment in the eurozone was up 37 per cent in 2015, rising to $17.1bn from $12.5bn.

Getting into the asset segment we find that Chinese demand has enhanced towards hotels.. Further its being found that Chinese investors and buyers have announced plans to spend $39 billion so far this year buying U.S. companies. Chinese investors purchased $8.6 billion in U.S. commercial real estate assets last year, with a notable increase in hotel investments, which accounted for $5.8 billion
Few of the largest INVESTMENTS IN U.S. COMPANIES INVOLVING CHINESE BUYERS  (Includes announced and completed deals).
Target, $ value ($ millions), Buyer
  1. Starwood Hotels, $15,188, Anbang Insurance
  2. Smithfield Foods, $7,276, Henan Shineway Industry
  3. Ingram Micro, $7,247, Tianjin Tianhai Investment
  4. GE Appliances, $5,400, Qingdao Haier
  5. Terex, $5,122, Zoomlion Heavy Industry
  6. Legend Pictures, $3,500, Dalian Wanda
  7. AMC Entertainment, $2,909, Dalian Wanda
  8. Fairchild Semiconductor, FCS, $2,659
  9. Devon Energy (5 U.S. shale oil and gas fields), $2,442, Sinopec Int'l Petroleum
  10. Activision Blizzard (stake bought by group of investors), $2,339, Tencent Holdings(was one of several investors, including Los Angeles-based Leonard Green)
  11. Waldorf Astoria New York, $1,950, Anbang Insurance
  12. Source: S&P Global Market Intelligence

Buying hotels helps to land Chinese investors and bureaucrats into safe zone to study many business opportunities and explore trade pacts. This also increases the revenues of tourisms for the developed economies and Chinese people will pocket the revenues from their won people through the hotels. The hunger of china is travelling on the path of more appetite if we could extract from the trend of Chinese investments. China is penetrating into the long term culture and societies of the US and Europe. Technology and penetration into strategic sectors are the key motives behind china. As an investor you will find this healthy but being an economist I am scared since too much control and penetration is harmful for any economy in the long term. Geo political tensions in one part of the country could spread like a wild fire in these economies and societies in the long term. Further society control passes from the originals to the others which is an invincible threat.


If this matter have happened in Jadavpur University then should have been in lime light. Educational system has taken set back now in many states. West Bengal used to be one of the land of genius which is still their but the glory and shine has disappeared from the same. Yesterday it was quite shocking to witness that how students behaved towards the Calcutta University Vice-Chancellor Sugata Marjit who was pushed and shoved during an agitation by the students of the Vivekananda Women's College in the southern part of the city. Their demand was that as they have failed to qualify is their test exams they should still be allowed to sit for the 1st year exams. This is the result of removing the pas fail mechanisms in the education field. Don’t you think that we are becoming less competitive in the global world since the next couple generations will face he problem.  Forget about pass and fail just think the level of arrogance they have towards the seniors of the education system.  They have failed to qualify their test and that why they are not allowed to sit for exam. They are demanding that despite of pass or fail we should be allowed.  Now these places where you need to draw the correlation of the beginning of the pain of the pas fail abolition.  The problem is not with West Bengal alone, its present in every state.  

The UPA 1 & 2 removed the same and result is that students who were taught to become competitive have lost the grip of the same from lower levels. Indian education system promotes private tuition as schools are more focused towards syllabus and extra curriculum activities. State board exams are the worst since we have witnessed very clearly those way students get Phd in Plagiarism. This has become an open architecture and state governments in many places have failed to improvise on this area. This is also one of the key reasons behind generation of low skilled and unskilled manpower since education has been taken on a lighter note in their life. We always gets highlighted that proper education is big thing which reduces the GDP growth of a country. Well improper and reluctantly among students also pushes the GDP growth down only.

Now coming to West Bengal if these students were beaten and moved away by the police then should this matter have been treated at par with the incident of Jadavpur University of 2014. Are you ashamed or are you happy about the transformation of the society into a agitated island. Are you happy with this incident and you demand this type of protest to be increased more so that education system becomes island of activist.  The irony of life is that what you have taught them to behave with these senior people they are going to repeat the same in coming years at home too. We don’t find agitation of lack of research scope in education system. We don’t find agitation for getting more poor family children to be included in education system. We don’t find many things. We all know Jadavpur university matter was not perfect but was the yesterday incident was perfect.

Sunday, April 3, 2016


We cost accountants have wider subject and a wider role to play for the society as well as lifting India in World Health Organization Index through our costing tools and techniques. Today I will be discussing about how BSC can be applied to improve decision making and investment climate.

Why Balanced Score card with Activity based Costing is required in Indian Rural healthcare Industry?
The government of India and the state governments invest a millions for the Indian healthcare industry.  According to the Confederation of Indian Industry found that India needs US$50b annually for the next 20 years in order to meet World Health Organization (WHO) standards. The Indian healthcare industry was estimated at USD 40 billion in 2010 is expected to reach USD 280 billion by 2020. Large investments by private sector players are likely to contribute significantly to the development of India’s hospital industry, which comprises around 80% of the total market, going forward this amount is just going to scale up. Highest allocation goes to rural India and this is the place where highest level of failure and delay in achievement of healthcare targets are being achieved. Aging population and increasing pollution is going to increase the demand of the Indian healthcare and hence we need efficient tools to increase investments by blocking the loopholes. But in order to identify the loopholes and increase efficiency mere cost control will not be sufficient. Application of Activity Based Costing can have limited affects as in most cases when generating profits become high cost we quickly switch into cost cutting which makes other investors scary and they avoid investments. This leads to problems none other than the rural people who lack healthcare treatment.
Its being found  that costing tools and techniques can be of great help to resolve the issue of failures and wastage of resources. A further ABC and BSC lead to effective healthcare delivery involves providing high quality patient-centered care that is safe and utilizes the public funds efficiently. To improve rural health care system we need strategy and for that we need decision making tools and techniques.

 Cost Accounting tools and techniques can be of great use for the companies as well as for the government healthcare segment contribution. Activity based costing and balanced score card application can be a yard stick to measure the success of investments and also design the long term strategy for passing more benefits to the patients. Activity based costing don’t need any explanation but in rural healthcare it can be a game changer as efficient resource management tool. Activity based costing takes new shape when balanced score card is being implemented. This place where getting feedback from the patients and villagers will help to design the service levels of the service providers in the form of mobile healthcare system and private/public health care system. When BSC is implemented financial aspects of the health care cost segment gets automatically linked up with the ABC which improves the efficiency levels of cost management. Hence BSC helps to achieve high levels of ABC in health care cost. BSC will improve the scoring of the internal business and process and will remove the bottlenecks of the corruption as this BSC will detect the failures and the low scoring reasons for the same.

Where BSC on ABC will be Game Changer?
Activity Based costing and Balanced score card in the following areas can be a game changer for converting the losses into profits:
Health care systems
University medical / health departments
Long-term care
Mental health centres
Pharmaceutical care
Health insurance companies
I find we are in the 3rd level of Balanced score card where the industry is well matured but inefficiency have eaten up the resources and end user is suffering despite of the highest allocation of resources. The benefits of adopting BSC to improve the ABC of rural healthcare industry are as follows:
Clarification and consensus of strategy
A framework for decision-making
Positive turn-around in financial performance
Improved patient satisfaction
Increased management and clinician accountability with clearly defined targets
Communication of priorities and focus on core business – ‘keep the clutter out’
Linkage of strategy and resource allocation
Greater management accountability
Learning and continuous improvement
Focus and alignment throughout all levels of the organisation, including the Board
The strategy map, through the cause and effect logic, helped the Board members and executives speed up their decision making on large investments in intangible assets
Improvements in performance results. Besides improvements in financials and patient satisfaction, there were improvements in a number of other areas.
Quality improvements in patient care and outcomes

 In order to get success form the implementation of BSC with ABC in Healthcare we need the following things:
Senior management support
Central involvement of clinicians and some flexibility at lower levels
Demonstration of empirical benefits
Cascading to lower levels
Ongoing communication with all staff
Regular management review and monitoring
Supporting information technology for monitoring and reporting performance

How the Frame Work of BSC works in Healthcare and Its respective ABC?
The frame work of BSC in health care industry is the most important part to get efficient results from the same. From a blood bank to a clinical service provider all of them need balance score card with ABC since cost of operating in rural India is low but is expensive in terms of financing to establish and generating heath cash flow from the same.

Every investment has long term and short term strategy and hence setting a target is very important for the same. Balanced Scorecard approach provides a framework to link long term strategic objectives to short term targets, initiatives and accountability. These accountabilities are then translated into a “measurement” program.


Balanced score card over ABC will help in proper measurement of revenue generation and will develop the revenue generation cycle. It helps in decision making and indentifying the areas of improvement and blocks the leakages and corruption in the health care industry. ABC alone will not be of much help as if leaders and not able to measure in that case squeezing the resources becomes the survival point. This neither resolves the issues of the patient health care neither it improves the ranking of India on the global health care map.

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