Monday, June 19, 2017

BLIND STRATEGIC MANAGEMENT...DOOMS INDIAN IT INDUSTRY

No long term vision, no long term eye on the changes in the business world and now you are blaming the world. Strategic management enjoys the field of business futuristic growth where the leader’s responsibility is to get into the long term growth outlook married with changing business structures. But the fallacy of the story is that they failed bitterly in implementing the same.

The question is where they went wrong. Short term profits and wider packages created the ripple effect. They are obsessed with numbers related to revenues, profits, margins, shareholder wealth, ESOP and dividends followed with exuberance perks that they lost their vision for the changes in the industry.

They enjoyed lucrative profits since they enjoy SEZ followed with many state and central governments sops followed with a topping of depreciating rupee makes the profits of the business, top level managers perks to multiply.

We stopped software development and we jumped into service providers losing sight of the long term growth of the Industry coming from other segments. Retrenchment has become the new meaning of saving cost and amplifying revenues and perks. The industry have been shattered from a long time  from 2008 but we still remained in our cocon.

Future driven investments have been limited which resulted some college pass out candidates to come up with AI. Artificial Intelligence will replace the service industry. Well get ready for some Authors to come up with their writing where one will enjoy that traditional IT related Industries have been replaced by AI.
Low cost of production have been enjoyed by Indian IT companies who earned from tax savings from SEZ,SOP from state or centre ,Rupee Depreciation and last but not the least converting young Indians into service providers at much lesser cost.

Colleges and young generation glued to this new world of IT jobs which are actually low paying jobs. Offshore business will dry out once AI comes to replace the remaining cost savings advantages to the client. US is becoming very strong on the use of AI platform and going forward it will replace offshore business opportunities to a great extent. Failure of strategic vision and application of strategies on future driven business model is proved.
Mr. Trump is being expected to be one of the “best salesmen” for robotic automation in the software services industry. This saves billions which we earn from them.

Short term driven targets followed with exorbitant pay packages have eroded the long term growth of the Industry.IT industry programmers were converted into sales person focusing on who can get how much projects which leads to revenue. They most interesting part here is to notice how the vision of the Industry was turned into blindness and how the strategic management segment was shifted majorly into sales and business development and nothing related to new products. Innovation was restricted.

IT services companies’ turned their recruitment eyes on recruiting students from second-rung (or even the third-rung) engineering colleges as only sales was required and did not higher much from the top B-schools since the pyramid of the industry was structured differently which was suited to establishing the base of the pyramid.
The work and recruitment culture was totally fined tuned against the principles of strategic management where he largest proportion of the workforce was at the base, who were also  paid the lowest wage, and at the narrower end of the pyramid were the more well-paid jobs for the relatively few. This segment of the pyramid enjoyed the maximum benefits.

The industry required some deep minds to look into the new aspects of the Industry.  Well how the industry can gain vision when the people employed and the hierarchy developed within the industry is itself driven towards low paying jobs and no innovative thinking.

Fallacy of the industry is that they blame the quality of education whereas they recruit accordingly in different structure.

Ancillary industries grew significantly based on the growth of the Industry which was itself short sighted.
If strategic management was adopted in the business objective and long term vision of the Industry then we should have achieved innovation and AI and robotic related investments. Strategic management helps to identify the long term changes in the industry and allocate resources accordingly. But here we find that low cost resources were the only function to drive long term growth. Within next 3 to 4 years AI and Robotics will replace services which will lead to massive layoff.


I am more concerned about those fellows who are in the college levels and have invested a significant surplus into IT education with a dream of getting job where the current industry shows mass layoff. Strategic management of the whole industry have been blind.

Sunday, May 28, 2017

WHY MERKEL AGAIN????

Angela Merkel have played enough and now it might be time for her to move ahead since she is just getting austerity gifts every year for the troubled Euro-zone countries. The economic situation at the macro level has destroyed whereas the number of growth might be deceptible.  Being an Economist all I can she doesn’t underrated the subject any more. Greece economy is just under the period of World WAR 1 currently. 40% of retail business closed down between 2014 and 2017. The birth rate has dropped to World War I levels because few couples can afford children. Overall, GDP has dropped by 27%. Well Greece is not the only member in this club. Countries like Spain, Portugal and Italy also reporting dangerously low rates. Low birth rates means low consumption ,low economic growth as the economy will lag hugely in getting young generation in work over the next 20 years and hence the economic slow growth will be fearful.What she is doing is just keeping her position alive at the cost of Austerity.Time and Economic Theories have changed and now its time for some revolution to get growth.

Unemployment is the most important reason and the devil behind is Austerity measures imposed, discussed and implemented by heads of the Euro-zone decision makers who themselves have less at stake.   Merkel did a fantastic job by going for austerity measures and saving the Euro-zone from collapse but what she has done and the effect of the same will be dangerous and she will not be at that point of time manage anything. The common people of Greece and other member states are the prime suffers of the dramatic fall of life. Unemployment is Greece is around 23% where as for men it counts to 20% and for women it’s hopping 27%. Youth unemployment which is big damage for the long term growth of the economy is a whopping 48 per cent.

Low birth rates and poor economic conditions provoke people to opt for crime which is another big threat to the society. In French its being found that birth rates have fallen to the lowest level in 40 years. No jobs, no earnings, no future so why to get child land upon such a state of economy. Economist will find its hard to dig into the depth of pain and mentality ruling the people in these states where such dramatic step have been taken forward.

Austerity have never been  solution which many economist cried but all in Vain as Merkel was more focused in playing her flute. I don’t find any reason for re appointing her and getting the whole of Euro zone will be escalated to a further long term slow growth in macro levels which will not get captured in Manipulated economic numbers. Those who are betting on Greece Economic growth numbers well Greece's budget had a primary budget surplus  but that is, excluding debt repayments which is estimated at as much as 4.2 per cent, and that’s too depending upon the depending on accounting procedures. If there is a change in accounting procedures then debt might not reflect whole of it now which pushed the GDP numbers.

More austerity is in the wings to come as Greece's debt burden has actually got worse. It is at 179 per cent of GDP compared with around 109 per cent in 2008.  Another round of debt funding will come and this story of debt will keep revolving followed with Austerity. What Greece needs is write off the entire debt or let Greece be out of Euro zone.It time for Merkel to leave the position and let some new blood come up to look over the same subject from a different perspective. 

Thursday, May 25, 2017

US BUDGET,CRUDE SALES , GEOPOLITICAL RISK AND INDIAN TAXATION REFORM

US BUDGET will be passed and it will back by huge spending on that asset class which were ruled y some other countries historically. This is what Made in America will mean over the next decade under Mr. Trump. He is clear that he will eradicate all those countries that were making a living of billion dollars at the cost of his country. OPEC will have to continue for a lifelong cut down in prices and I find more pressure to build up as cheap crude from US economy will enter the markets.

The federal government has stashed away nearly 700 million barrels of oil out which 50% is being taken by the US President to sell in the near term. This selling will fetch the US $16.6 billion by 2027 for its Ambitious Budget funding. This will freeze the spines of many crude producers and will throw out many competitors out of the market for good. Those who are betting on price hike and price down I leave the battle to them. These sales will happen since funding the ambitious budget expenditures will be a key game   and selling crude will help me make this possible. Now it’s a winning proposition for all those countries who import crude. Congress had already recently approved selling down some reserves to raise money for various domestic programs. The administration now wants to increase those sales. Hence this is easier to do since rising interest rates will put pressure on the Earning and GDP growth and hence Government based inflow of capital is highly required which can only be done through sale of this crude reserves. Congress authorized sales from the stockpile in 1996 to pay for deficit reduction, marking the first time it tapped the reserve for reasons other than its stated purpose.

Now war at this point of time will fill up the kitty of the sellers of Crude which will be other side winning proposition for the crude exporters. Its very balanced and wait and watch outlook to figure out how the global crude imbalances will move further and how US will fund its Ambitious Budget.Well the sellof will not be overnight and it will be done judiciously and only thing to keep an eye is on Geopolitical tension which leads to huge use of crude which finally increases the demand.

 As I always dig into some hard core analysis I find that this ambitious crude sales plan have been pushed previously also and now As MR. Donald belongs from the business community he is now being persuaded.  ExxonMobil, which lobbied for congressional bills in both 2012 and 2015 calling for selling this crude in open market was refused hence now it has again started the lobby. Exxon, as well as the American Petroleum Institute (API) and the Independent Petroleum Association of America (IPAA), have long lobbied for this resource to be tapped. This will be big event to watch that how Trump will play his cards.

On the other hand as a member of the International Energy Agency, the United States must store enough petroleum to equal at least 90 days of U.S. crude imports, currently as on last September it  held equivalent of 141 days of imports .

Crude will keep the global economy volatile and much of the long term fiscal prudence In India depends upon its taxation reforms since if crude prices increase tax revenue will help the Indian government to keep floating with a  smile despite of high price of crude paid in dollar terms.

Sunday, May 14, 2017

WHY US WILL REDUCE TAXES and Repatraite Inflows

The latest data of the US consumer reflects that US economy is now convinced and discounted the June Fed Rate hike. This hike will obviously impact the economy in the long term. On the other hand US stock markets will now get the real picture of its valuation gaps since around $ 3trillion have been deployed to create new historic highs for the Dow Jones. Now with interest rates coming down easy money is no longer available and hence deployment has already started plunging.  

This is supposed to plunge further which is very much known to us. What we don’t know is that as buy back comes to a halt slowly we will find skeletons of many companies in the Dow Jones coming up as performance of numbers are pathetic. This will lead to slow down fall of the equity markets. Now the only trigger which was expected and also is being expected is the Tax Relief Proposed by Donald Trump which will give some leeway to the buy back as cash savings will go up for the companies. Don’t forget that Buy Back of Shares have been big game for the US markets post recession. So it’s quite impossible to let Dow Jones plunge. 

Hence it might take some time for Donald to come up with reforms in the Bills of taxation but he has to come up one day very soon. On the other hand repatriate trillions of dollars in overseas cash is another angle which will looked upon and might become reality since the same funds will be used to Buy Back shares which leads more growth for the Dow Jones. This inflow of capital will be sufficient to reward the share holders and make trillion out of the same. 

Currently for US investors its time to exit the Index ETF categories as buy back has less ammunitions hence a sell cant be ruled out. ETF flows, which have been strong all year, continued strong in April. Roughly $42 billion in net new money came in, which is roughly the same inflow we have seen every month this year. The four month total is now $170 billion, the highest level for inflows in the first four months. The inflows are based on the assumption that Dow Jones will scale new heights and hence buy back of shares and income tax cut down and repatriate trillions of dollars will spook the ETF returns. But unfortunately plunge is significant in buy back of shares . The only catching point is that Donald will come up with policies which will support the buyback of shares in replacement of Zero Interest rates. Well when US will cut down tax and why is very clear now.

Thursday, May 11, 2017

TECHNOLOGY AND LACK OF VISION LEADS TO NPA IN BAKING INDUSTRY

Management failures have been always a unique case study for the management itself to identify the loopholes and the mistakes committed through wrong decesions. We are running and raising our voice for Vijaya Mallya and his NPA matter but do you know that corporate management science have failed more bitterly in professional way where business and NPA have been sold at the cost of Tax payer’s money. At the same time  digital disruptions have become a quite well known phenomenon and at the same time the quality of business operation have changed dramatically.  Companies and its management are always on verge of collapse. Technology is replacing many large organizations to lose business. Well Indian IT industry has been one of the biggest examples of having such an affect of disruption where large players lost business to the small ones as they reduced cost and improved margins of their clients which finally lead to lose of business for the big cats of the industry. On the other hand another aspect is getting into short term industry growth projects a company many have any existence buy under the Dream of Diversifications enters into the business and end up with sell off at the cost of Tax payers money.

 There are many companies in India where one will find that key management took the decision of focusing on non core business just to get short term revenue jumps and at the same time reflected down turn in the core business. Managements rather focusing on reviving the core business went for non core business and after taking huge leverage position ended up with huge loses and high  NPA levels.  In order to get relief from the piled up debt levels they sold their stake and again focused on the core business. 

Biggest ever Sale of Indian Corporate Assets in Indian History
Jindal Steels is selling 49% of its Rail business, 5% of its Energy exchange and its 3,500 MW Power plant
Essar is selling a huge stake in its Steel business and 49% of its Oil to a Russian Oil business
GVK sold 33% of its Bangalore Airport stake as well as its controlling stake in Bombay Airport and its complete Road assets
DLF is selling its Saket Mall and 40% of all its Rental Assets and Land Assets
GMR Highway Projects, South African Coal Mine, Istanbul Airport, 70% in a Singapore Power Project, 2 Coal Mines in Indonesia
JP Group sold all its Cement Assets to Ultra Tech Cements
Yamuna Expressway stake, Power to JSW Energy
Tata is selling its Corus Steel in UK.. Dhamra Port, Communications Arm Neotel in South Africa
Land in Bombay Lanco Assets in Power Generation on sale in Andhra and Udupi
Videocon selling Telcom Spectrum in 6 circles. Oil assets in Mozambique
Renuka Sugars is selling its Brazil Power, Sugar and Bio-fuel business
Sahara groups 86 Real Estate Assets are on sale.. 42% stake in Formula 1, Mumbai's Sahara Hotel, Grosvernor House Hotel London, New York Plaza Hotel, The Dream New York Hotel and 4 Airplanes
Reliance Infrastructure is selling 49% in Electricity Generation, Transmission in Mumbai
Cement business to Birla Corp.. Also it's entire Portfolio of Road Projects, 100% of it have been disposed off
The above transactions reveal that how management of these organizations went toward the non core business and how they ended up. Rather focusing on core business, experimental business lead to growth of NPA and poor management image reflecting poor share prices and weak support from investors and markets. They have wasted the wealth tax payers and no one will blame them for their wrong decision. This is the one of the live example of how corporate have exploited the resources  and what price they paid for shifting their focus to non core business models rather strengthening the core business. 
 This is a well known fact as on today that technology is changing the business model and monopoly. The most important part is that due to technological shifts and late arrivals of companies to catch up with them leads to over leveraged positions which lead to an immense pressure on the cash flows. Organizations fails to catch up with technology and takes all other traditional sources to leverage the business and market holding which leads to excessive borrowings.

 These borrowings are disguised under the name of business growth and expansion but they hardly generate ROI/ROA and they end up with a mess on negative net worth. This is the very place where NPA seeds gets planted and grows over the years. The point is NPA growth will happen if one is lending to an organization which under the drowning industry. Bankers needs to be educated enough to understand which industry they are lending and macro factors behind the growth of the industry and how the company is well aligned with the same. 

Technological shifts are changing the landscape of the companies hence their cash flows too. This disruption in cash flow is an indication for that industry or the company which a banker needs to know. This is the key area where NPA will come up and hence the whole economy goes for a toss.  Today’s managers are focused towards short term goals and profit targets and no one knows about the ROI the company has achieved. When the managers of an organization becomes aware of the underline numbers business takes a new shape and growth path. Mere only creating targets and business objectives will not be suffice as business models are getting changed and technological acquisition of business is changing the revenue models. Flush of capital into traditional practices like hiring more high paid executives will not drive business growth.  NPA is not always due to deliberate political driven segment but often happens due to late shifting of business models from traditional profitability to new future profitable avenues.

I have found and I have worked with those people who focused only on short term and thought that if my branch target is achieved I have made a significant contribution. This is where the management falters to indentify that where the next level of growth of Industry will be coming up. They fail to miss the technological growth drivers and go a long way on the traditional path and loose the competitive advantage to some peers group and in order to revive the fallen business share invest huge capital which also goes for a tailspin.

Its being proved that expanding into another venture needs realistic approach and not based on short term triggers. All the above business failures point that either technological disruption or non focus on core business lead to the collapse of the best organization in India. 

Monday, May 8, 2017

NEW OPPORTUNITIES FOR PRIVATE EQUITY AND STOCKS UNDER GST


Well which stocks to focus once GST comes over in the next couple of years is going to be a big event and identification of stocks is going to be another broader gamble. What is being depicted here is the areas where Private Equity Investments, entrepreneurship and key industries transformation will happen in the next couple of years from where one will make money from stock investments.  At the same time Cost Accountants and other professionals should also come to know the places from where the next level of high paying jobs will come up and which areas of practicing will grow in the coming days. From Investments, to employment  to stocks everything gets premium value in the next Among all these many IPO will come to provide mouth watering returns.  Many stocks might have never performed will get into limelight going forward. The traditional days of the warehousing industry will change going forward and more down slide will come for the industry. I am quite in fear that many warehouses will run vacant and future investments in warehouse will come to a significant slowdown once GST kicks in. Currently the growth of the industry has been riding on the wheels of the taxation benefit. Let me elaborate this segment so that you get the clarity about the downfall of the industry. All manufacturers have to pay central Sales tax (CST), when moving a good to another state and selling it in the other state.  Now currently if the good is moved for stocking and not for sale, then CST need not be paid. So, in order to avoid CST, players in the value chain have created a complex network of storage points across the country. This is a substantial cost on the companies and also at the end user as the rent for storage is apart of sales and marketing expenses.  Multiple warehouse points will narrow down to few numbers converting into Mother Warehouse Concept.

 But, with GST, which facilitates one tax payment, the curtailment in the layers of stages in the shipment of goods is a guaranteed factor paving the way for the transfer of consignments directly from plant to the wholesaler/ retailer or even end user in the B2B cases thus eliminating the inventory cost in many supply chain operations. This is the place where warehouses decade old double profit story comes to an end. This is the same place where Investment Bankers will come up to create their wealth.

The next level of growth in stocks and companies will come from Logistic supply companies which is a well known fact but another level of growth will come from new entrepreneurs entering into the industry which will facilitate transportation and save the fixed cost burden of the Small and Medium Enterprise. Since SME will need growth and they will get growth from GST but buying a own fleet of transportation might be cumbersome right at the moment hence service providers in this segment will grow in the long term.Cost Accountants will find huge growth as multiple industries  will open. FDI infllows will also grow making the career prospect for this industry to jump many folds.

Commercial automobile company’s stocks prices will grow in the long term as the demand for this segment will grow. Most of industries will now use hub and spoke model in the Indian transportation sector which will reduce the storage cost next to negligible.  Small IT companies will get huge growth opportunity who will enter into the space of providing Infrastructure support to these SME and transportation companies smooth multiple operation.  Many PE and investment bankers will come up to create opportunities for these low hanging fruits which will improvise the business revenues and industry growth too. New industries will come up where automation and Artificial Intelligence will play a pivotal role. Further Big data analytics will resolve the down time and smooth efficient operating profit growth for the various industries on logistic segment.

NBFC’s will also plays stupendous role as  rural India will grow their business hence Companies in NBFC will get huge growth in the next 2 years from now. New Hubs will come up and new advanced technology driven warehouses will be in demand. Hence the game of ordinary warehouse exploitation comes to an end. The investment in automation would start growing now. Automated, high-speed, cross-belt sorting technology will grow, hence PE and investment bankers should focus on these areas. Companies will require ERPs, advanced planning and warehousing systems in their large warehouses. Hence advanced level of warehouses is the key investment destination. That's why traditional warehouses will come to an end.Technology in logistics, such as the use of advanced telematics, real-time vehicle tracking and route planning, are likely to help manage and execute operations in an efficient and seamless manner. New college pass outs should focus on joining these industries as flush of capital will come up and qualified talents will be required to capture the whole of India in terms of distribution of goods and creating business opportunities. FDI infllows will also grow making the career prospect for this industry to jump many folds. The key thing will be to watch how fast the Corridor projects gets completed. Further as ideal time come down more fleets will be purchased to expedite the supply hence buy these stocks of the various industries discussed above.Cost Accountants will find huge growth as multiple industries  will open. FDI infllows will also grow making the career prospect for this industry to jump many folds.

Sunday, May 7, 2017

NPA Rises Due to GOVT Influence of Job Promotion

Well I have been criticized many times for being upfront but truth is just like sunshine which will rise without any ones control. The Indian banking industry has been crying for the rising NPA levels. Currently the banks have a total stressed asset and NPA of Rs 14 lac cr of Loan.  Yes the RBI site will reflect the NPA amount but when one takes into account the total stressed assets its just doubles from Rs.7.5 Lac cr to Rs 14 lac cr. The gross NPAs have jumped from a low of 2.5% in 2011/12 to a high of 10%  in 2016/17. Stressed loans, which include gross NPAs plus the restructured loans under various resolution schemes, is estimated to be anywhere between 18-20 percent.

The gross NPAs have jumped from a low of 2.5% in 2011/12 to a high of 10 per cent in 2016/17. Stressed loans, which include gross NPAs plus the restructured loans under various resolution schemes, is estimated to be anywhere between 18-20%.We are not here for the number crunching but to figure out the foul play behind the numbers of rising NPA (including stressed assets).  

The whole of the credit blame is not of the slowdown of the Indian economy during that phase. If one gets into the data will find that extravagant lending was influenced by the government itself who ruled during that time. UPAII played a pivotal role for this pile of loans. The govt funded them through banks and at the cost of tax payer’s money. Among all these reforms measures Govt needs to free up the process of promotion since promotion carrot leads the banks to go against the norms and this has now become a practice. The promotion carrot played within the 5 years terms of the Government cost billions of money to the tax payers. These NPA’s are nothing but  duping the tax payers and getting funds into the political ambit.Loans are given when the govt informs the banks to lend even they books are in trouble.

Excessive and extravagant lending between 2009 and 2013, particularly to sectors such as infrastructure, power, textiles, metals, etc. Now majority of this phase belonged to UPAII where the loans piled up. The growth of the loan is linked with the government and bankers. In PSU banks we all are aware that there is lobby for getting promotions. This lobby is linked with the government and hence there is interlinked strong influence of providing loans to the defaulted corporate. Now UPAII new that there were bottle necks and there were scams which hindered the growth of the Indian industries and hence despite of knowing the same, both the govt and Bankers under their influence gave loans.

The poof of the above theory is from the quality of loans being given by them to these companies where the banker knew that their credit quality and balance sheets are over leveraged and future cash flows are under question mark. Prevention of Corruption Act (PCA) was never in place and hence now getting the modification of the same is highly required. There is a fear of future investigation by agencies under the Act for any professional decision gone wrong. Accountability and government influence for promotion needs to be abolished then only PSU banks will operate freely just like Private Banks.

It has been found that a change in governance, management, and operational and compensation flexibility are almost surely needed in India to improve the functioning of most PSBs. Now if one looks at the companies where the huge NPA is piled ups one will find that most of the companies will be having direct contact with the UPAII and very much under the influence of them.

If Supreme Court banned coal mines and other mines then the responsibility or removing the bottle neck was on the shoulder of the government. Further  the ban did not came in one day hence if one checks at the frequency and timings of the loans disbursement then one will get more clarity on the depth of the influence.  Government intervention and control have been one of the key factors behind the pile of the NPA. The day Indian government will free up the operational responsibilities and promotion process influence that day the NPA problem will be resolved.

Many professional bodies’ holds immense strong bonding and relationship with the senior management of the PSU banks which also raises the eyebrow regarding the fiduciary relationship among them. They also play a pivotal role is attesting the books of accounts and other documents required for such extravagant lending.  Playing with NPA numbers are of no use since history will repeat again after a decade. 

Friday, April 14, 2017

COST ACCOUNTANTS PRACTICING TO GROW BY LEAPS AND BOUNDS...PROVIDED YOU PLAN ACCORDINGLY


Cost Accountants profession to grow by leaps and bounds as GST comes into effect from 1st July 2017 provided we take proper steps as mentioned here in the article. The Indian GDP is set to create a record history of GDP and inflow of global capital into the country in the long term. As tax evasion will come to no existence in the long term the wealth and output of capital will significantly.  The GDP growth in the long term would be achieved when the GST will be connected with the Income Tax return which will eliminate the tax evasion while filing return. Currently one take the credit of VAT and other taxes but while submitting return reduces in Turnover to save income tax. This road will be closed in the next 2 to 3 years. Govt revenue collection will increase stupendously and would make Indian govt rich in terms of capital which will be deployed later on for Indian economic growth. India will not have to borrow from World Bank etc for its infrastructure development.

 Now the opportunity of Cost Accountants is huge from the implementation of GST. It’s time for practices for the profession to flourish. It times for the practicing professionals to scale up the opportunity of growth as GST implementation comes into play. The biggest challenge across all the industries is the significant growth of compliance   and finance cost for an organization. Hence this is the key place to ahead for practicing opportunity as many companies will outsource the same due to rising cost. I find salaried cost accountants to come up into practicing field as the opportunity is huge. Micro and small and medium enterprise will need huge support and will create huge opportunity for the practicing community. The Institute should ask the corporate of India to outsource these works so that the cost remains moderate. Gone are the days of traditional audits. Now a question will come up in mind how the cost of corporate towards compliance will grow. One corporate has to file 37 returns in a year. Yes. Don’t be surprised and that’s the opportunity for the profession too.

The Monthly and Annual Returns to be filed under GST
GSTR1- For sale every 10th of the Month
GSTR 2- For Purchase 15th of the Month
GSTR3- Monthly Return 20th of the Month
GSTR9- Annual Return 31st December every year.

Another biggest challenge where cost accountants can demand for outsourcing of the GST work form the corporate is the Mismatch of the GST submitted for getting credit. This mismatch might lead to huge debt if the other party is not under the GST purview. There are CGST and SGST followed with IGST and hence the cost of finance department and also the compliance cost will be huge.  Coprorates have to keep huge cash flow for advance payments and then also monitor whom they are dealing and are they registered GST candidates or not. Hence the trouble of management of this new taxation regime will make things more complicated at the ground level. This is where practicing demand increases for the cost accountants and salaried cost accountants can come up into practicing since the supply of work is more than the demand of cost accountants hence its now a win- win proposition for the cost accountants . Salaried cost accountants can now join the practicing field. Its huge opportunity. 

Well a complex or semi complex organization will not be able to manage and handle so many returns and books hence outsourcing the work and working like an KPO or BPO is the best part for the cost accountants. Yes outsourcing business model will make the growth and huge.One does not need all certified cost accountants. Just hire intermediate students pay them good salary since its a competition to earn and capture the market size. Let your huge man power do the work and you the expert qualified  professionals look after the process of execution of the work.

Its time for experienced cost accountants to come up and join hand with young cost accountants to create these organization of practicing and en-cash and  educate industries to outsource the work.

The institute can also create a level playing field for the intermediate students so that they can be employed and can join hands to manage this huge inflow of work and opportunity. We need the passing rate of the institute to be increased in the coming days so that one can take the advantage of more members joining the practicing field. The institute can easily give a license to the intermediate students to do GST related work provided the final signature is done by cost accountants firms. This will lead to more supply of manpower in the market which is highly required. We have other competitors in the industry and their numbers are 10 times than cost accountants hence we need these type of steps to be included.  Don’t forget if tomorrow the Govt of India find that Indian corporate are facing problem due to lack of professionals then he might order some other professionals to conduct the work by offering technical knowhow. We need faster approach since huge Tsunami of Work is just awaited. Gone are the days of traditional audits.

Wednesday, March 8, 2017

Cost Accountants Can save Bankruptcy .. Through LLP

Bankruptcy code has come up to save the minority share holders and other stake holders into the system. But it’s being found that this code will be misused by crony capitalist which will end up creating more pain and devastation for the society in the long term. Before the bell of bankruptcy comes into play we need Asset Reconstruction Management which will be lead by Cost Accountants, MBA and also those who have turnaround experts who are entrepreneurs at heart, managers by training and experience, and committed to make companies in distress to perform brilliantly  out of the blues. Cost Accountants know how to utilize resources and create turn around for sick industries. We need people who have strong vision of efficient utilization of resources. If we look towards history we find that in 1999 IBM made a turnaround and in 2015 Ford made a turnaround riding on the wheels of optimum resource utilization. Bankruptcy is nothing but wrong utilization of resources and mismanagement conducting deliberately or due to economic factors. . Bankruptcy will not save the economy neither the society over the long term. Those who will lose jobs will never get anything form Bankruptcy. Bankruptcy code is to protect banks, minority shareholders and creditors of the same.  Cost Accountants who are looking for practicing opportunity can easily come up with this diverse manpower and intellectual capital to create Asset management companies under LLP.

The devastation of Bankruptcy code is that many ancillary industries will come to an end. Lay off staff, and auction off saleable assets to pay off creditors who get peanuts against their elephant size investments. Bankruptcy code has been implemented but where we have failed is reviving the business before the bell goes for bankruptcy.  This Bankruptcy will finally make borrower richer since valuation of asset is always a gimmick and this gimmick loophole is being exploited.  Let me put an example. Say my asset are actual valued at Rs 100 cr where as its being inflated to Rs 300cr. Now I take a loan of Rs150 cr and later on files for Bankruptcy. Now my original assets is valued RS 100 cr and by the time I go for Bankruptcy my value comes down to Rs 80 cr, which gets sold at Rs.50 cr. Now who makes how much and what you get out of Bankruptcy code. Now you place a Asset Management heading by a team of people having entrepreneurial mindset with Cost accountants, and MBAs who will get into the business cut down non productive business and will make the company turnaround. This will save mass lay off and les damage to the ancillary industry segment associated with the same. Practicing cost accounts can come together to form this type of organizations.
  
The government is giving a opportunity of non accountable business process which will harm the society more than creating protection of the stake holders. Indian Post Office also has been one of the key segments for the turnaround where staff was trained to use digital technology and making every one accountable for their deliveries. This is one of the key areas where reduction of cost and making every department to be ABC and making Product pricing and Target Pricing and create market segmentation and tweaking process and products to increase revenue would be a game changing tool. We all know that company gets into Bankruptcy due to extravagant and wrong business strategies and uncontrolled fund management. This is very grey area and as a profession cost accountants can work stupendously top cut and lean the organization wastages of resources and improvise the organization.

. Further Balance Score card and Six Sigma strategies help to improve the quality of management and improves the business revival strategy within everyone in the organization. A strong entrepreneur mind followed with strong business and financial acumen from a Cost Accountant would create game changing tool for saving the organizations.  I find a group of professional should come up with Asset Management Banks who will work to save the society from Bankruptcy code segment.


Cost accounting profession has the necessary tools to develop and make turn around within an organization particularly the ones who are getting drowned. We as a profession have been working for the society and I find that we need to come forward with Asset Reconstruction Banks model where a team will revive the companies and save the society and taxpayers resources. Practicing cost accounts can come together to form this type of organizations. 

Tuesday, March 7, 2017

Digital Disruption and Cost Accountants Role Series One

Today’s article is more of question and less of new insight.  A question on which thought needs to be provoked and not to be answered to anyone, prior to that I will begin the introduction of this new series of my 2017 on cost accounting profession. I will start my article today with a question- Historically did we ever focus on corporate level or we kept focusing at govt level which has limited scope of employment and audit. If the answer is limited employment opportunity and audit compared to the number of students pass out then judge yourself where you need to focus.

 Digital disruption is happening at lightning speed and the whole trade and investments climate is changing dramatically. Cost is no longer a reason to worry since marginal cost of production is zero. We need to get into the depth of amplifying the returns of capital employed and hence we need to get into strategic management areas where revenues are capitalized not only for yourself but for the ones connected with you. Well traditional cost accounting practices are dead since cost measurement is mostly now automated and beyond excel the limitation of excel calculations.  Cost audit in the private sector is now not so highly required since cost negotiations have eliminated wastage and post 2008 the global climate and repeated aftershocks of 2010, 2011, 2013 have created enough cost consciousness. Employing cost accountants would turn out to be herculean task and also upgrading the pay scale is another mile stone. We need to get into those areas where other professionals are grappling up fats.

Well we achieved our target of building cost awareness and making every shareholder aware of the cost factors.  Hence we don’t need to hammer on cost measurement area we need to work on the new era of strategic growth areas where the private sector fights and we are employed after passing out. Digital disruption is eliminating cost and improving margins but we need to support them to build and amplify the ROE so that from Micro to Midcap space they can be grown.  We need cost accountants to come up.
The path of an entrepreneur is difficult and becoming a midcap is too challenging. This is the area where cost accountants need to get into the picture. But before that we need to understand the areas of digital disruptions and how client collaborative ROCE is being amplified. We need to understand big data analysis and their application where revenue for the organization and new strategic steps can be formulated to bring growth. Merchant banking is an area which has been dominated by Chartered Accountants and MBA. I find Cost accountants to get into that area since they can be a game changer in this strategic management segment. Merchant bankers enable a small company to become a giant in the long term. They take key decisions regarding financial management and strategic growth opportunities. They formulate exit strategies for the Private Equity Investors and get the SME listed.

 Enough and huge hard work have been done towards govt based areas but we are missing the mass of private sector since our self promotion towards closeness towards govt is not enough to employ us. All of the student who passes out will not get jobs in govt driven projects. Now the challenge and the thing which remain ignored that how much value the profession at corporate level is providing since that creates the demand for employment. 

I have few questions and I want my readers not to anwere me but Answere your mind.

Historically the profession has been doing MOU with govt and at various levels of govt, but the question is we are lacking highly in other areas particular the private sector. How many audits and how many cost accountants will be recruited in govt level projects? Did Our extensive thrust on govt level has moves us away from corporate level and that’s why a salaried person is ignored. 

Saturday, February 25, 2017

PRIVATE HOSPITALS DEFAMES KOLKATA's Medical facility & PRINTS MONEY FOR OTHER STATES

Kolkata Medical Treatment is being defamed very intelligently by the Private Hospitals and other states are making huge money. This article depicts the picture of the same. All these Private hospitals plays the game of defaming Kolkata’s medical facilities.  All these private hospitals are creating fear of medical treatment in KOLKATA and shifting patients directly or indirectly to other states for treatment. This have been tricky game being played over the last 15 or 20 years and just calculate the loss to the West Bengal government. Don’t believe me. Think what I  have written and then find the real reason for defaming Kolkata’s Medical Industry. You will get a clear idea why, how they are playing this game over so many years in the last 15 to 20 years. They are simply making Kolkata poor and defamed.Its strategy of State Business Development. 

Apollo is one of the key gainer of this type of Business strategy. Since Apollo is the only name which comes in mind when we think of treatments outside of Kolkata. MEDICAL negligence have become very strong and now its high time people should know that Consumer court is their where no fees are required for filing case.They are playing the game deliberately. Also their threat of Living the City and taking Apollo out of Kolkata is going to be big loss for the Hospital Giant and hence they will never do it in their life.

They have created great advertisements to attract patients. They have taken advantage of the deliberate collapse of Public health facility and indirectly created fear of poor health facility at Kolkata.

These hospitals often say even in the last discussion Apollo Hospital CEO-Rana Das Gupta said that they use high cost of advanced medical equipments to do treatment and hence the cost escalates for the treatments. 

Hospital gets huge benefits under taxation schemes and also for having huge hospital capacity.  These hospitals enjoy stupendous taxation benefits spread over s long term which reduces the impact on its books of profits earned by the hospital. They don’t write off the entire cost of the highly priced medical equipment at the 1st year. They split the price and take various income tax exemptions across all segments.

Now Kolkata is being defamed that Medical Treatment is of very low category and hence best is to get into different states for Medical Treatments.  This has been one of the most common statements being heard and implemented in Kolkata for any treatment. They leave the city of Kolkata and get into states Like Chennai, Kerela, Hyderabad, and Bangalore and mostly in the southern state of India.

The southern states of India earn huge money from Medical Tourism. Medical Tourism is big industry in India. Just take the following factors which increase the revenue for the other states in terms of Medical Tourisms at the cost of Kolkata:
·         Lodging Cost-taking house under rental for unknown period
·         Foods- Huge market as mostly people are busy at hospitals they have no time to cook food hence huge market for restaurants
·         Public and Private Transport- One of the strongest revenue source for the people who come in other states for travelling.
·         Diagnostic and medicine/pharmacy: huge state govt revenues from these sources

On an overall basis its can be easily identified that Kolkata is being defamed deliberately and other states are making money at the cost of defamation. Sothern part of India have gained huge name in terms of medical segment due to the tricky game played by these Chennai based or South Based Hospitals in other states. Apollo is the only name which comes in mind when we think of treatments outside of Kolkata.

Now the process of defamation is very easy. This negative marketing of Apollo and Kolkata’s other Private Hospitals will make huge money now and also other states since this defamation will lead to flight of patients to other states for treatment.  CPIM have played the game very interestingly. They invited private hospitals and later on shifted the patients by creating fear to other States.

The side  data of Apollo hospital according to its investor Presentation March 2016 its shows that they have increased their beds in Hyderabad and Chennai and not much in Kolkata. Reason is simple Apollo is defaming Kolkata and making other states rich. This  a huge revenue loss to the state of West Bengal. The data shows Hyderabad and Chennai are the prime zone.

Now Rupali Basu of Apollo hospital threatens that she will  exit Apollo from  west Bengal  whuch will create 50000 people to lose job in Kolkata. Well it be a boon for state since the state if they exit since the city of Kolkata will get 50000 trained manpower in medical system which many other private hospitals and Public hospital might absorb the manpower. Now loss will happen to Apollo since they exit form state completely. Double loss will happen since no one will visit Chennai and southern part of India for any treatment

Its good to be smart but not think others to be fool.  Even Some Lawyers can file PIL taking several clients together to get justice. We should not bog down to these devils of the medical system. We spend money hence we are clients to the hospital. It’s the duty of the hospital to provide best medical services. 2ndly doctors should now be treated with hard hands with Zero tolerance of their activities. If we don’t stop these things here don’t worry next time you will be the victim either of Apollo or some other hospitals.

Friday, February 24, 2017

APOLLO HOSPITAL KOLKATA...SNATCHES LIFE

Being a Journalist I find its high time to let the world know about the Hospital Business being managed by Apollo Hospital.  In continuation to my previous article http://www.ianalysis.co.in/2017/01/park-clinic-kolkata-i-am-dead-but-i.html  Apollo hospital today killed a patient in Kolkata and made a 1 year child orphan. KOLKATA...SNATCHES LIFE AND ASK FOR FIXED DEPOSITS,JEWELLERY AND HOUSE AGREEMENT TO PAY BILLS AND FINALLY THE PATIENT DIES.The hospital has come down to such lower level of making profits that it stopped patient from getting shifted to another hospital and claimed Jewellery, bank Fixed Deposits and Agreement papers of the patient family to pay a bill of Rs 8lcas created wrongfully by the Apollo Hospital. Rana Das Gupta Chief Operating Officer  the CEO of the hospital and Rupali Basu  President and Chief Executive Officer, Apollo Gleneagles Hospitals, Kolkata threaten West Bengal Government that they will close down Apollo Hospital in Kolkata.  They will kill patinets make their life ruined and will threaten after that so that Govt of West Bengal becomes silent.Well they are forgetting its competitive world and if they exit West Bengal a major percentage of their revenue will come down from the West Bengal.

https://www.facebook.com/ApolloGleneaglesHospitalsKolkata/::: You can give your comments here too.

A patient Named Mr. Sanjay Rai  age 30 years who met with an accident on 16th February 2017 on street was admitted to Kolkata Apollo Hospital. The patient was kept in Ventilation where in the documents its was mentioned he is under CT Scan. Within six days the bill amount form Apollo hospital was Rs 7, 41,000. Due to this illogical bill amount the family of the patient took decision about shifting the patient to some other government hospital. They patient family begged for releasing the patient and promised to pay the amount but due to emergency treatment and escalating bill amount. The family begged for 4 hours but Apollo Hospital did not discharge the patient and finally the patient died. First of all he was kept under CT Scan but billed based on ventilator. He was given wrong treatment. Finally the patient died.

The family is now left with a 1 year old child and wife. Who will take care these? Who will take care of the Apollo hospital arrogance and such type of activity? That one year child will never come to know how was his father. Hospital will return will the money buy will they give back life to that father.

Apollo have done many such cases where patient family are being fooled and even baseless, wrong operations and treatments have been given where patients became paralyzed. One of my Friends 6 months daughter went with a urine infection diseases and then they did Brain Operation of the child and finally the child became paralyzed. This story belongs to 2008-2009.

They are threatening Mamta Banerjee that they will take out Apollo hospital from West Bengal. Moreover they are now returning the money back to the family but will they be able to return the Life of that 1 year old son’s father Mr. Sanjay Rai.

Private hospitals have now become money making process and one of the promising and compounding   way to make money since every person on this earth will jump to save their loved ones and hence they will spend everything. Now this is the catching point of making baseless meaningless bills and harassing patients family for paying hefty amounts. Now who else wants to die like this?  They will kill people and then they will threaten. They will charge wrong bills and will kill patients.


I request WHO and Indian Medical governing bodies to take action regarding these Hospitals and their administration.

Tuesday, February 21, 2017

TRUMP TO CHANGE ECONOMIC CALCULATIONS

Well this has been a master stroke by Donald for the US economy which will give clarity about how the new era of De-globalization will take birth and exploitation of globalization plays its game in eroding wealth of an economy. He has asked to look over and change the traditional ways of calculating Trade Deficits and unemployment measures. Now let’s delve into the same and figure out the outlook of the Global economy and US markets in the long term.

Currently in US, re-exports, or exports of goods originally imported from another country, from the exports side of the equation are still being counted as the good as an import. Put it in simple example For instance, if a widget was imported from India, that would count toward the deficit as an import. If that widget is then sold from the US to a retailer in the UK, it would not count as an export in the ledger, making the deficit increase.  Now Donald wants separate data for the same. He wants only exports of goods that are produced on US soil count as real exports. The new method would exclude re-exports when calculating exports in the trade balance statistics Re-export means a re-export is a good that is unchanged before being transferred to a third country, while a broader definition of re-exports would include goods that undergo some material change, such as value-added service or finally assembly.

Now if this data is being taken out then it will create problem for many countries since its will give a clear picture of the US manufacturing goods in its own land. US might a be a looser in the international trade.

Many economists have argued that the calculation will not consider subtract the imports that go into the re-export from the import side of the trade balance. Well this is being done deliberately to show the world how US economy is being exploited and how trade gimmicks are played. Over the last 15 years China have replaced Made in America with Made in China.

Another major thing which US economy is looking ahead is the process of calculating Unemployment on which the world and me have written million words to describe fault of employment creation and loopholes in unemployment data.


The official unemployment rate is the U-3 measure calculated by the Bureau of Labor Statistics. This measure includes people that are unemployed and have looked for work in the last six months. Now the new method, BLS’ U-5 unemployment measure where it includes discouraged and marginally attached workers which are Americans that are unemployed and not in the labor force but ready and willing to work.

Another figure, called U-6, includes those people and the underemployed — people who technically have jobs but are not getting full-time hours or wages. All these 3 segments are calculated but only U-3 is being considered for decision making.  Now change of decision making data will make Fed to stop rate hikes in the long term.

Now from the above its clear the trade war will be more number driven game followed with employment generation. Many countries are going to find no answer even to the WTO community and other international trade bodies. US numbers might even get cooked to uplift the commitments of Donald in the long term. A war with numbers often goes wrong when bias is backed the same.

Another figure, called U-6, includes those people and the underemployed — people who technically have jobs but are not getting full-time hours or wages. All these 3 segments are calculated but only U-3 is being considered for decision making.  Now change of decision making data will make Fed to stop rate hikes in the long term.


Now from the above its clear the trade war will be more number driven game followed with employment generation. Many countries are going to find no answer even to the WTO community and other international trade bodies. US numbers might even get cooked to uplift the commitments of Donald in the long term. A war with numbers often goes wrong when bias is backed the same.

Sunday, February 5, 2017

US DEBT TO GDP...

The central banks are thinking of increasing the interest rates in 2017. It have been well clear over the last 2 decades that Financial decision regarding economic segment is being taken by banks rather by government driven economic policies. The proof of the pudding is that the central banks reduced interest rates but never looked into where they are being deployed. This have been one of the prime reason where its being found that the world is having a debt pile of $152 trillion, or 225 percent of the world’s GDP, according to the International Monetary Fund. Now what does Debt to GDP deficit means? It means that the debt which have been raised have not being deployed to increases in output, so it cannot be paid back in the future.


Dowjones might be 20000 but its corporate profits are plummeting and at the same time they are having      a total debt (including government and private) exceed $62.5 trillion, or 334 percent of GDP, according to current Federal Reserve data. This translates to $196,000 for every man, woman, and child in US country. Now a question might come up that if Debt to GDP ratio is US economy is so high then where did the Zero interest based funding went and how did the Dowjones climbed to 20000. Buyback of shares have resulted to Dowjones to climb and also shareholders made the actual money. Now lets get into the Nuclear bomb which created 2008 recession: Mortgage.

Analyzing the data of the US debt its being found that as per the first quarter of 2016, 12.7 percent of homeowners owed more debt that valued against the property they had in their table of Mortgage. As of the first quarter of 2016, 12.7 percent of homeowners owed more than their house was worth. This means household debt is very much strong and these economic trade wars which will increase the cost of products in the long term would create ripple effect for the US economy in the long term. Consumption growth will slide in US economy as interest rates climbs and servicing the interest cost on these debts becomes a nightmare story.

Banks have stopped lending and now the situation is getting into liquidity trap. Increasing the minimum wage in US will push up the cost but at the same will push up more borrowings rather focusing on proper economic growth. When interest rates starts climbing it means credit scores comes under lens and it makes hard to borrow.

Now drilling the data of US debt pile its being found that total financial sector debt currently makes up $15.6 trillion of the $62.5 trillion total, which consists of government debt, households, private financial companies, and private non-financial companies. People have invested heavily in financial products in US and other parts of the world and now any correction of massive level will create not only erosion of investments but again a debt pile due to margin exposures. Zero interest rates and unlimited profits from trading have made positions over leveraged. As the cost of capital is zero profit is just a multiplier activity.



Household debt and private debt is the biggest risk and the numbers are just growing up. Now lets get into how much the Household Debt to Income really works out in order to know how much they are able to service the interest cost relate to the same. It reveals that data it has declined only in the past 8 years. Household Debt Service Payments as a Percent of Disposable Personal Income is only showing decline.  The global economy is at risk and this debt will take a create plunge since most of capital have been either to create host towns and buy back of shares. Gross Fixed Asset formation has been useless since it have been less of real benefit to the society.  Bridging the urban and rural gap should have been the ideal strategy for every economy to grow and deploy capital and make circulation of capital in the economy. Most of the money which have been injected have been less of economic benefit and more of stock market.

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