Edunology - Saumya Aggarwal

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How many times we have came across the quote - "vo engineering kar raha hai". It means he is studying engineering. Literally, everyone is pursuing engineering in India it seems thanks to exponential growth in engineering colleges and IT companies recruiting in masses.

I tried to analyse how once a novel and rare profession has lost its sheen now. Here are my findings:

- Growth of "advertised" engineering institutes:

Institutes spun fantastic tales about multinational corporations falling over each other to recruit its students.  They rarely focus on  quality education and building skill set, grooming students. It is all about fancy hoardings and large ads in newspapers.

PurpleLeap, a Pearson and Educomp company, released the findings of its survey of 34,000 students from 198 engineering colleges across the country: only one out of ten graduates from Tier 2, 3 and 4 colleges is readily employable, and one-third are unemployable even after training.  

- IT Companies recruiting like cats and dogs:

IT companies, according to analysis done by Nasscom and Evaluserve, spend $1.2 billion every year on training. Had the engineering schools churning quality grads, this money would go straight to their bottom-line. Infosys's Mysore campus has trained 100000 fresh graduates so far, at a cost of $6000-7000 per employee.   That's a whopping $600-700 million knocked out of the company's profits over ten years.

Since companies are recruiting, thanks to some pathetic recruiting HR executives, students are getting paid easily. Starting salaries are over INR 350000 which is more than pocket money at young age of 20-21.

- Simple Economics: Demand & Supply:

There are 1.5 million engineering seats in India today, up from 500000 five years ago. This is way beyond the demand for engineers. Himanshu Aggarwal, the CEO and co-founder of Aspiring Minds, says that the IT sector absorbs around 200,000 engineers in a year, and the demand from the other sectors can't add up to more than that.

Fortunately or unfortunately, many of unemployed students get onto B schools which are again in plenty in India. Few join non engineering jobs and others continue family businesses as engineering degrees are good for marriage purpose.

- Return on Investment:

College perspective - An engineering college can cost more than INR 150 million and if my cash flows are correct (have accounted for capitation fees as well) then payback happens within 5 years.

Parents perspective - Student can payback within 2 years if he/she gets a job otherwise higher education is deemed as prestigious and is matter of social symbol. If nothing, he can do MBA for sure and then ROI calculations get further extended.

Student perspective - None, they don't have a perspective on ROI. They are running in mad race. 

Being an engineer, I understand these parameters and have been on receiving end. Hopefully, society will grow up and change engineering trend to something better.

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Reserve Bank of India kept key Repo and Reverse Repo unchanged today in its announcement. However, it decided to cut Cash Reserve Ratio by 25 basis points to 4.5% in its mid quarter review of the monetary policy on Monday. CRR is the minimum proportion of deposits that banks must hold with the central bank. The CRR reduction is expected to inject Rs 17,000 crore liquidity into the banking system.

Effects Analysis:

1. G-Sec Yield

Immediate - Indian Government Bond 8.15% 06/11/22 which is current 10 Yr Treasury note yields shot up after the annoucement.

Medium term: Yields can soften a bit on shorter end of the curve going forward.

2. The country's largest bank, State Bank of India has slashed interest rate on select retail loans including home and auto loans. Private sector banks like ICICI Bank, HDFC Bank and Axis Bank have reduced their deposit rates by upto 50 basis point.

3. The 25bps CRR cut would boost bank profitability by Rs2,000 crore, much higher than Rs75 cr cost reduction that a 25bps repo rate cut would have effected

Note: Screenshot is GIY screen of Bloomberg and data shown in it is property of Bloomberg L.P.

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Today, education institues have become money minting shops and marketing is done to lure candidates only to play with their future. Parents and students have limited choices as quality institutes like IITs, IIMs are limited and even government have diluted these prestiguos brands. I feel Amity University, IIPM and likes should focus on quality teaching and stop faking. If they produce good grads, no advertisement will be required.


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What is Indian Retail market shape?

Predominately, The Indian retail sector is unorganised. It consists of "kirana" stores or small stores in every corner of the road. They are typically managed by single owner or family members. These are pan shops, general stores, convenience stores and multi commodity vendors.

FDI in Retail Approval

Henry Ford, the genius inventor once famous said,"Don't find fault, find a remedy”. Is it the mantra followed by Congress, mind you not UPA as all parties are not together on FDI. India’s Cabinet unveiled plans to liberalize foreign direct investment in a broad range of sectors including multi-brand retail, a move that could allow foreign supermarkets into the country.

For many, this is seen as bold move from scam ridden government, indicating slowing economy might actually take Congress ultimate seat from New Delhi.

Different perspectives

Adi Godrej, president of the Confederation of Indian Industry, welcomed the move and said publicly government has “restarted the reform process.” He further added this is a major step in the right direction and “this will not only end a long standing uncertainty in policy making but also boost investors’.

R.V. Kanoria, the president of the Federation of Indian Chambers of Commerce and Industry, said  FDI in retail announcement “reflects the resolve of the government to usher in a retail revolution in the country and also signal to the investor community that India is committed to furthering reforms.” He said this move will infuse new technology and help improve supply-chain infrastructure.

Kishore Biyani, managing director of Pantaloon Retail (India) Ltd ., the country’s biggest retailer by market capitalization and sales, said: “The opening up of the multi-brand sector to foreign direct investment will provide us opportunities to bring in foreign investors in various business like our home retail, electronic retail, food retail businesses.”

Leading consultancy firm, PricewaterhouseCoopers India, estimates that opening up the retail sector will lead to significant improvement of supply-chain infrastructure, which will help reduce food waste by 30% to 40%.

Mukhtar Abbas Naqvi, a spokesman for the main opposition Bharatiya Janata Party, bashed Congress move by saying FDI will hurt small traders.  “We are in favor of reforms but such reforms will not help our troubled economy. Unfortunately the government is not sensitive to small businesses that will be adversely affected by this move. They seem to have rushed into this decision without much thought,” added Mr. Naqvi.

My view on FDI:

- Organized players will rope in huge investments which will help India in longer run as "kirana" shops can not put such massive investments.

- Significant improvement in supply chain infrastructure which will eliminate wastages and enhance operational efficiencies.

- It will create millions of jobs from front end to back end helping youth getting food at end of the day.

- Various middlemen will be made ridundent and hence farmers & end consumers would be happy.

- These organised relatiers are registered hence pay sales tax, income tax, octroi and other government duties which will boost government revenue (which can ulitised for India's growth if Congress alliances do not end up eating all of the money through corruption).

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After have downloading Office 2013 for many months, I finally installed and tested it. Though there are not many new changes, however following are worth mentioning.

Much-improved interface

Office 2013 has got much improved interface, doing away with the sometimes-distracting 3D look of the Ribbon, and adding swaths of flat color. It's far easier on the eyes than earlier versions of Office.

The File tab (previously called Backstage) has been revamped, to great effect. For example, when you create a new document now, you get to see thumbnails of available templates. There's a lot more as well, including simple ways to make the Ribbon disappear and then come back when you need it.

Full editing of PDF files

How many times you have found PDF files very hard to work with since editing is just not on.

No longer. Word now opens PDF files, and gives you full editing capabilities. You can save the resulting files as PDFs or any file type that Word supports. This, by itself, is reason enough to upgrade.

Auto-created bookmarks

This new feature will prove to be a big productivity-booster for those who work with long Word files. Save a Word file and then open it at some later point, and you have the option of jumping to the location you were when you last were working on or viewing the file. No more scrolling and search -- you jump straight there.

In-Office image search

Finding images to insert into Office documents such as PowerPoint presentations has never been an easy experience. That changes with Office 2013. From right within Office, you can use Bing search (you were expecting maybe Google?) to find suitable images, and then pop them right into any Office document.

Excel's QuickAnalysis tool

If you're not a spreadsheet jockey, figuring out the best way to analyze and present data can be a puzzler. No longer. With Excel's Quick Analysis tool, just highlight the data, and Excel will offer suggestions on the best way to format it, analyze it, present it, and more. Even experienced Excel users will welcome this new feature.

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The power grid collapsed because some states apparently drew more power than they were authorised to do to meet the rising demand during the summer, said chairman of the state-run Uttar Pradesh state Power Corporation Avinash Awasthi. The power deficit was worsened by a weak monsoon that lowered hydroelectric generation and kept temperatures high, feeding the appetite for electricity.


Weak Monsoon: Farmers have now started using energy-intensive water pumps for irrigation to save their recently sown crops which pushed up demand. Also, hydro-power accounts for about 20 per cent of installed power capacity but reservoirs have only 24 per cent of the water they can hold -- just about half of what they carried at this time last year.

Politics: Many state governments give farmers free or near-free electricity, triggering a vicious cycle. The policy of selling electricity to consumers at politically correct prices is making the things worse.

Coal Supply: Coal shortage also chose the right time to trigger the crisis. The industry has advocated abolishing a 1973 Act that nationalised coal mining. Changes to the law are expected to allow professional miners to scout for and mine coal.

Distribution: The government-owned distribution monopolies in the states have all but lost their ability to buy power because their political bosses force them to sell it cheap, sometimes free, to voters. This opportunism is hurting the economy: the government estimates unaccounted for sale of power in India, at a third of the total, costs the country 1% of its gross domestic product.

The road ahead

Introduce competition in all three areas of the business - generation, transmission and distribution - to enhance productivity and contain leakages. Create an independent watchdog that can withstand the political pressures playing on different links of the nation's power supply chain.

Finally, free up pricing to make consumers more responsible for the electricity they use. This has been the broad course of electricity reforms the world over.

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As seen in old Hindi movies, trade unions, on back on militants, are creating problems for businesses to grow. This has been phenomenon in Gurgaon for quite sometime. The violence at Maruti Suzuki's Manesar factory, which killed one senior employee and injured close to 100 others, bodes ill for the future of not just Maruti but also the industrial hub of NCR.