A Brief History of India

Cash yielding Opinions

It is said that Media is the fourth pillar of democracy. Though an informal pillar, the power of this institution in our lives is felt the most when the other three pillars ie Legislature, Executive and Judiciary loses credibility in the eyes of the people. This is exactly what is happening in our country now. Indian media especially the Jain family controlled papers and channels (ToI, Times Now etc) have metamorphosed from opinion reporters to opinion makers. Till recently their economic daily Economic Times was free from this ethics flexible Jain syndrome. But looks like even ET has caught hold of the disease of manufacturing news.
Today's(19th Aug 2013) ET front page screams of a large number of Indian stocks trading below their book value ie the price of their assets and hence the ET reporter advises his readers to pick and choose these companies whose fundamentals are "strong". Though he mentions fleetingly that one of the reasons why the companies are devalued is the debt they have on books, the article conveniently forgets to mention the effect the debt have on assets and valuations of the company.
To understand more, let us explore the idea of "sitting ducks". A public listed company is classified as a sitting duck if the stock valuation of the company is lesser than the book value ie the total assets of the company. The underlying idea is that if some corporate raider can buy the shares at a lesser value, tear down the firm and then sell off its assets, he can make a killer profit. But the problem here is that a raider can pocket the profits of the sales only after he pays off the debts the company owes. Debt owners have the first right on the company assets followed by preferential share holders and then only can a common shareholders (the ones who buys from stock market) profit. Take for instance, Reliance communication which is presently at Rs 118.75 and the book value is Rs 159.47. The difference is nothing but the huge debt of Rs 35,185 crores loan they are struggling with and to reduce which Mr Anil Ambani is doing exactly what a corporate raider would have done- selling his assets piece by piece. But the fact remains that nobody wants to buy and so he is turning towards his brother for help now.
Now let us look at the issue from a different angle. As a result of this article, almost every stock (with the exception of some really badly effected ones) shot up by 2.5% to 7% today with intra-day figures touching even 10%. Analyse this spurt in the context that the sensex over all fell by 291 point today due to the continuing rupee meltdown. If a person who was privy to this information had invested 1 crore in some of these stocks yesterday, he would have made around 5 lacs in a single day today. So a few might have profited from the brilliant ET analysis. But who lost? To understand that, let us first look at a famous stock market theory.
The Greater fool theory states that stock markets are able to give a return greater than the corporate profits because everyone who trades on stocks behaves like fools. A fool buys stock only because he/she believes that there will be another fool who will be willing to pay more for the same stock. So fools keep selling to each other and the valuation goes up. But in case of an oligocracy like India (sadly we are getting there, the country is ruled by a few powerful people across politics, business, media, bureaucracy etc), we will have to modify the theory a bit. We will have to say that there are two categories of fools here: Powerful fools and really foolish fools ;). The first category runs this country and so knows when to buy and when to sell. They know when the government is going to free import duty on petroleum and when petrochemicals will be curtailed and so we cannot even call them fools. They are able to manufacture the right environment needed to breed a million fools who will buy from them. So all the fools in the second category who read the first page of ET diligently and went to buy the "assets" of PSUs at a deep discount will be the proud owners of these shares for next few months to come.
I guess that was too much of economics and stock market theories, let me close this article on a lighter note. Americans extended the greater fools theory and surmised that if you want to make money in the market, then you need to be a lesser fool. So how will you remain a lesser fool? Simple, by withdrawing from the market when you see too many fools who does not understand anything about stocks around. There were a lot of veteran fools who successfully used this tactic and made money at the expense of bigger fools. Some say even American President Herbert Hoover was one of them. So, the story goes like this. President Hoover was interested in stocks and held a big portfolio and was making good money as the markets were on a upward surge in 1920s. Once, while in a lift, the lift operator started talking to him about the right stocks to invest in. The talk by a commoner with no understanding of stocks rang an alarm bell in Hoover's head. He, being a veteran fool, understood that the market is getting crowded with fools and time has come to sell. He immediately went to his broker and asked him to sell every stock he held. The grand presidential sale hit the headlines and the news spread in no time. When the other investors saw that the US President was selling, they panicked and there was a mad rush to sell stocks. The mad rush resulted in the crash of the NYSE on that Tuesday (October 29) of 1929. The black Tuesday as we know the day today marked the beginning of the Great Depression.....

Absurdity of "collective conscience"

In April 1959, KM Nanavati, a commander in Indian navy, shot dead his friend for 15 years Prem Ahuja. Ahuja was having an illicit relationship with Nanavati's wife while the commander was away on work. Nanavati surrendered after the act and was trialed by a jury of 9 members of Greater Bombay sessions court. Though it was clear from the beginning that Nanavati had killed Ahuja in cold blood, the commander acquired a hero image during the trial. Thousands used to gather in front of the court when the arguments happened and Nanavati used to be get an arousing welcome with slogans and clapping whenever he arrived at the court. A tabloid Blitz eulogized his act as a loving and wronged husband avenging the wrongs done against his family by a playboy. This version of the story became so popular that Blitz sold for Rs 2 per copy whenever it ran this story while its original price was 25 ps at that time. Rallies happened in Mumbai supporting Nanavati and finally the jury acquitted Nanavati with a 8-1 verdict.The "collective conscience" was obviously for setting Nanavati free (or at least it seemed so) though he committed a murder in cold blood. But 1959 was very different from 2005 and the honorable justice of the sessions court didn't think that the judgement was objective and impartial. He dismissed the jury's verdict and referred the case to the Bombay High court. Subsequently on retrial, the Bombay High court found Nanavati guilty of culpable homicide and sentenced him to life imprisonment; the judgement was upheld by the Supreme court later. Taking Nanavati's case as an example, government of India abolished jury trials stating that jury can get influenced/misled by media and public opinion and hence cannot provide justice without bias.

Fast forward 50 years, today we have an overdose of media and self proclaimed representatives of public doling out their outdated ideas in the name of public opinion. This "opinion" is taken to millions by loud, biased and TRP hungry news readers (or should I call them opinion makers) thus creating and propagating our "collective conscience". They shout and demand answers and provide adrenaline rush which rivals thriller movies or serials (with which basically they compete for viewer's time). The misleading of public opinion was always there but nowadays it has become torpedoing rather than simple biasing. Media can create heroes and make a villian out of the same person in a split second. They beatified the Defense minister Antony when he moved decisively against the corrupt defense deals. He suddenly became the beacon of hope among the corrupt ministers of the government. But when the cancellations came again and again, the saint was slowly brought down to human levels and is now in the process of moving into devilish boundaries.

There are many things our "collective conscience" represent. One of the most detrimental among them to our diverse nation is intolerance. When a unknown religious organisation claimed that Viswaroopam hurts their religious sentiments, every single news channel in the country ran prime time coverage on it. There were discussions and debates about the issue before the movie even released (and hence obviously none of the speakers knew what is really there in the movie). Seeing that one organisation is stealing all limelight, 20 more joined in a matter of days and the controversy blew over in no time. Ever since the Delhi rape case, our "collective conscience" has grown to include intolerance towards anything said against women. Though curiously, Bollywood is kept out of this intolerance category. I guess that may be because if the idea is applied on Bollywood  there will be hardly any movies coming out. With the idea hotting up, an old rape case called Suryanelli case has resurfaced and prominent politicians are finding themselves in the middle of the controversy. I agree that the comments made by justice Basant and Sudhakaran MP were insensitive but what surprises me is the reluctance to even consider the premise that the girl may have been used as a child prostitute when evidence does points to the same. The same aspect was highlighted when news channels made a ball out of the jocund comments made by Vayalar Ravi to a journalist who asked him about Suryanelli case. People who understand malayalam could easily make out that Ravi was trying to put the journalist in a spot for her open ended question but according to a popular news channel, the sexist comment severely traumatized the female journalist.

Though I borrowed the usage "collective conscience" from Afzal Guru verdict, I didn't write anything about the verdict itself because a lot have been already written and analysed about the same. Personally, I don't believe the true culprits of parliament case has been booked under law and lot of questions remain unanswered but as per the collective conscience of the nation, the culprit has been punished.

Piecemeal Reforms

"For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the message was lost.
For want of a message the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail"        
                                                                            -Benjamin Franklin

This adage speaks about how due to lack of attention to little things, disasters happen. This is also the story of Indian Reforms 2.0, the ones which were undertaken by a PM who as FM executed the opening up of Indian economy.
Let us look at how it all began in the 2nd innings. NDA before moving out enacted a bill to restructure the collapsing power sector of India called The Electricity Act 2003. When UPA got elected in 2004, the new PM understood that Indian Power sector needs a massive restructuring and in turn huge investments. This was made a priority in 11th five year plan and a target of 78000 MW of additional capacity was targeted. In a country where 8 hours load shedding is a norm even in mega cities like Gurgaon and Noida, power sector reform indeed is the need of the hour and the targeted capacity addition was estimated to take $164 billion of investment, $78 billion in generation and remaining in transmission. For a government with $194 billion revenues in 2011, it was obvious that the mega target cannot be achieved without the help of the private sector. So government opened up the electricity generation to private sector and the media chorused the "reform" as one which will change the country for good. The move also captured the fancy of the private sector which invested in a big way. Tata Power, Essar Group, Reliance Power bid and won contracts for establishing Ultra Mega Power Projects (UMPP) in various states. The plan looked simple. The private sector will generate power using the coal and gas provided by state owned monopolies like Coal India, GAIL, ONGC etc. The private companies will be given land by the state government to set up the plant and they will also be allowed to hold captive mines for fuel to generate electricity. The pvt players will then sell the power to the utility companies owned by the respective state government at the cost for which they won the bids. For instance, Tata Power won the bid to establish a UMPP at Mundra at Gujarat where it will generate power from coal (in this case, coal was imported from Tata's captive mines in Indonesia) and sell it to state government at Rs 2.20. The plan looked flawless and everyone seemed to be happy. But once tried to execute it, all hell broke loose. To start with, state governments took forever to do land acquisition and give the clearances for the project. Clearly, the state governments did not share the enthusiasm of the center to reform power. Next was the environmental ministry, which initially delayed the clearance for mining especially near the ecologically fragile zones. The usually subdued ministry suddenly became belligerent under Jairam Ramesh who in one instance blocked the approval of a project which he had pushed hard as the minister of state for power a few months ago. Again, ministries under the government failed to see the bigger picture and kept squabbling.
Next came the bigger problem, getting the fuel. While generation was simplified, the process of getting fuel was still under the monopoly of few players who were caught napping when ambitious plans were laid. For generating, 78000 MW, Coal India, ONGC and GAIL will have to tap the resources at a comparable rate. Something they were never able to do. The government attempted to speed up this part by allowing private players to do tap natural gas and Reliance won the KG basin contract. Unfortunately, Reliance ended up doing everything else other than tapping the gas from the basin and the output was pretty much like public sector. Government also allocated coal mines to these power generation companies and private players to work around the lethargy of public sector players. But this allocation went grievously wrong and supreme court stepped in to get the mines de-allocated as most of them were allocated to relatives of politicians. The scandal which became famous as Coalgate dried up the fuel lines of power plants in India. There were many more issues and players which came into play like the supreme court putting a full ban on coal mining in many areas due to illegal mining and encroachment into ecologically fragile zones. For the time being, let's ignore it and just understand that as a result, the power generation companies ended up with little fuel or no fuel and ended up running their plants at a capacities as low as 20%. This "precious power" which they generated after everything was "sold" to state electricity boards. Now SEB (electricity boards of state governments) which is responsible for transmission of power are treated like their personal possession by politicians. As electricity is a highly subsidized and politicized utility in India, the burden of all the free power doled out by state government is taken by the utterly loss making P&Ls of these companies. The companies were never used to paying for the power they got and hence in most cases did not pay the private companies for the power they "bought".
Basically what happened was, a piece meal reform. The reform which was undertaken to clean the power sector was executed badly with no support from state governments or its machinery. The Electricity Act 2003 clearly asks the state governments to convert the state electricity boards as individual transmission companies responsible for their revenue and expenses and hence reform the transmission part of the system. Even with multiple deadlines, this was ignored by the state governments and the so called reforms only happened in the power generation sector.
The story of piece meal reform continued on to FDI in retail this week when Indian parliaments opened up FDI in retail in 18 cities of India (if we take the number of cities which satisfy the conditions required to be satisfied to set up stores in the states which are going to allow FDI). We allowed FDI after seeing the experience of our neighbor. China allowed FDI in retail in 1992 and saw huge investment coming to the country, mostly in the form of MNCs setting up manufacturing facilities or giving contracts to Chinese manufacturers to make products for them. It helped a lot that China had a developing manufacturing sector which could seamlessly take these orders and in a few years develop into a global hub for all such orders. China's and later Indonesia's experience with FDI in retail also showed that Asian habits creates an Eco system where both large and small retailers can co-exist. The essence of this phenomenon is our eating habits. We like to eat fresh and hot food as against canned food. As a result, we generally shop at 2 levels- first in the beginning of the month for all basic supplies at a big retail center in the city and second daily for perishable items like milk, vegetables etc at a small retail shop in our neighborhood. Data shows the number of small shop owners have actually increased in China and Indonesia in last 10 years. So I don't buy the argument of Walmart killing all the Mom & Pop stores but like the Electricity Act, it is also a piece meal reform due to 2 key areas which are still not reformed. First one is our manufacturing structure which is in a bad shape thanks to our RBI governor's obsession with inflation and our poor power sector (yes its all bloody connected). The second one, something which even Mr Arun Jaitley carefully side stepped (I liked his "Indian sales boy and girls of US stores selling Chinese goods" which majorly touches the manufacturing problem) is that of Indian agricultural produce marketing laws. A vast majority of states governments in India don't allow retailers to buy directly from farmers. Instead they have to buy the produce from designated mandis or village wholesale markets from middle men who get the produce from farmers at very low rates due to their monopoly in the field. With these laws prevailing, middle men will continue to thrive. With Walmart and Tesco in, they will make more money with increased number of buyers. So the fundamental problem of farmers not getting enough compensation is not going to change. FDI in retail is just another case of piece meal reform and I don't expect anything to change with this so called reform.
That leaves you to think, then why did the government work so hard to get it passed. FDI in retail is a signal to the stagnant investors to kick start the investments because now the government has undergone a metamorphosis. It has got rid of a belligerent TMC and it's random leader and have got a duo of opponents from UP supporting it with the same old reasoning - protect secularism (read keep BJP out). It was the same trick for which the top corporate houses of India fell for when the government parted ways with the Left on atomic deal. Seeing the "commitment" of the government for getting country's power problem solved, private sector put forth bids in large number and won contracts for power plants expecting the government to show the same commitment in getting the entire power supply chain reformed. We have already seen how the hope got bellied against partisan interests of petty politicians all over the country. Will the investors, both domestic and foreign fall for the signal again this time, only time will show?

Marriage Economy

Some of my friends are going to hate this post because I have again done what they chide me for - connecting 'everything' with economy :)

Today morning, I came across a matrimonial ad in Times of India (actually a friend sent it to all of her mallu friends including me saying that there is a gold mine on offer). The 9cm x 9cm all India ad on the third page of TOI main edition asked for "extra brilliant, highly qualified, well cultured groom for a highly educated mallu girl" and must have cost  the "rich, international businessman" father (apparently ad gave this detail also :)) around 8 - 9 lacs to run it. The ad marks the beginning of a complicated operation called Arranged marriage. Next the "rich father" will have to set up an office to study and shortlist hordes of applicants who will send their resumes complete with Photoshop edited photographs. By the time the "rich father" comes out with a shortlist of entries who will be lucky enough to meet his daughter, he would have spent around 15 lacs. Add to it, the expense of marriage ceremony, reception and ofcourse gold, the father (who is not that rich anymore) would have spend a lot of effort, money and time on the operation.
Seeing the amount of money deployed and people employed, the practice called arranged marriages, which is now largely confined to the subcontinent and SE Asia is a heavy boost to our economy. If I take the case of South India especially, where dowry is masqueraded as gold and other gifts, the marriage triggers a heavy purchase of gold, silk and property. This happens irrespective of the price of the products. So one can see that gold at Rs 31000 is still in demand in southern state of Kerala and its no surprise that Malabar Gold, the gold largest player in Kerala is also World's third largest jewelers in terms of volume.
Let us now look at pre-nupital market, it starts with a search. With so many constraints like religion, region, caste, sub-caste, family background, education, profession, behavior and horoscope, the search mechanism for the right groom/bride is an industry in itself. The industry, run traditionally run by small time local brokers and high society match-makers is one of the latest to move online and have been segmented and specialized so much that there are companies which run separate websites for various sub-castes. The websites offer young men and women opportunity to do "blessed dating", a dating process which has the blessing of their families and society as the girl/boy satisfies most of the constraints put forward by them. These websites also has helped in removing "3 minute decision making", a phenomenon inherent to arranged marriage. A few years ago, I accompanied a friend when he went to meet a girl his parents have short listed for him. The meeting happened at the girl's home and the boy was given the girl's resume earlier itself. After the families spoke and liked each other (as our tradition goes, first the families like each other and then the bride and groom), my friend was allowed to speak to the girl. He was with her for approximately 3 minutes and the minute he came out, his parents asked him "Did you like the girl? Can we promise them?" To my surprise, my friend said yes and they were happily married in a month. Years later, I saw Deutsche Bank interviewing their candidates for 3 hours before giving them an offer. While DB took 3 hours to decide on a person who may stay with them for 2 or 3 years, a decision for life time was made in 3 minutes. This is a practice which is integral to arranged marriage. Intuitively, this may sound weird but most arranged marriages last for life time bearing testimony for the success of blitzkrieg decision making. I feel its because after the decision is made, the groom and bride accepts that there is no way back, a feeling that allows them to compromise and live on. The arrangement would have worked so far but with the new generation repealing the idea of compromise in anything, the system may find it doomsday soon. I remember a friend telling me that a guy whose proposal came to her home wanted a dating period of 3 months before deciding to go for her or not, a idea which horrified her parents :) So the new age matrimonial websites innovated and found a solution for the problem by functioning as quasi dating websites for people belonging to same community and within all the constraints their society asks for.
Another group of people who sustain themselves on marriage economy are private detectives. With extreme mobility and too much of money at too early an age, the new age youth is living a western way of life. It becomes important for the parents to check out if the bride's/groom's behavior conforms to the traditional ethos they follow. Hence the Sherlock Holmes and Watsons of this world profile the targets and certify their behavior.
If more and more young people start finding their partners on their own, a large number of organisations will be adversely affected sending tremors through the marriage economy. So before you propose your girl friend, think about the damage you are gonna make :)

Applying some Marketing concepts

I tried to apply some of the marketing ideas I learned and designed a brochure for Kairali resorts, Kannur :) Please check it out and give me some feedback-

https://docs.google.com/open?id=0B3hvyHkD8je7R2dtdmhBVnZVMGc

When tourists are packed off!

I recently took a package tour to Singapore by Akbar travels. I will strongly recommend against the tour package by this particular company because of the following reasons –

• ·         The tour package is advertised as Singapore tour but has 3 days in Malaysia, 2 days in Sri Lanka (during transit) and 3 days in Singapore.
• ·         To cut cost, the company booked our flight on Sri Lankan air. So we were forced to spend 1 day each at Colombo to and fro during the journey. The worst part was the pathetic treatment and delays at Colombo immigration. They kept us waiting for hours and ate up all the time which could have used for Colombo city tour otherwise. When a passenger complained to the immigration officer who was loitering around giving system error as the reason for delay, he got angry and told the passenger to go back to her home country if she had problems. Finally we got 2 hours to see the Colombo city
• ·         The food was arranged at cheap restaurants with no proper facilities to cater to the large groups of tourists. Only exception was an Indian restaurant in Malaysia called “Gateway of India”
• ·         The accommodation was arranged at hotels outside the city adding to the commutation time. In Malaysia, the hotel was in not so good locality which turned dangerous at night. The exception was the accommodation provided in Sri Lanka by Sri Lankan airways. Both ways, the resorts were exemplary sea side resorts – Jetwing blue and Club Dolphin. The staffs at club Dolphin were rude to us when we were trying to leave in hurry but Jetwing blue Negombo was a exemplary in every respect – property, service, food and staff. I will definitely like to go back there for a vacation.
• ·         The tour is very badly managed. In Malaysia, you are given just 2.5 hours at Genting highlands. By the time, you figure out which rides to try out, it was time to leave.
• ·         The remaining two days in Malaysia was spent on visiting chosen shopping outlets of the tour provider. Obviously the travel company should have got a good cut out of the chocolates and watches the tourists brought from these retail outlets.
• ·         In spite of having 3 days in Malaysia, we were not taken to the best destinations in KL like the aviary (Bird Park), National Museum, Islamic Museum etc. Basically every destination with an entry fee was kept away from. The tour package boasts of an experience where all the charges are taken care of. So to increase their margins, the tour operator takes care that only destinations with no entry fee are covered.
• ·         The worst was the way the ticketing was done. The return ticket for the group was not booked on the same flight and the representative of Akbar travels who was with us left with the first group leaving 15 passengers in Sri Lanka to take care of their own travel.

Akbar travels charges a premium for the ‘superior’ services they provide to the tourists. But the truth is that their tour is as bad as any other small time tour package provider. There were a lot of cases where the tour could be improved with good management and the operator Akbar travels didn’t even seem to realize this. So if you are planning to go on a package tour to South East Asia, Akbar travels is not a good choice.

Welcome to Genting Highlands……Now let me pick your pocket!

Malaysia looks like a developed country from every angle. Kuala Lampur airport is one of the biggest and best in the world; six lane highways take you from the airport to KL city. The route is covered on either sides with lush greenery of evergreen forests which is dotted intermittently only by skyscrapers and beautiful residential layouts. After the bad experience in Colombo of being stuck without money and phone, the first thing I did in KL was to get some Malaysian Ringgits and buy a local SIM with that money. The famous Maxis SIM cards were missing in the vicinity of the airport, so I bought a digi card offered by telenor.

We moved to our first destination in Malaysia – Genting Highlands, a theme resort and casino at a height of 6118 feet above sea level. The now famous Resorts World took birth on these highlands of Genting when a visionary Chinaman Lim Goh Tong concocted the project. Uncle Lim (as the Malaysian saying goes about his casino - "It's very tough to win money from uncle Lim"), one of the richest men in Malaysia (when he died) is said to have come to Malaysia from China with 1 ringgit in his pocket. He then worked hard and built an empire by converting a forested highland into a world class tourist destination. To attract people from every spending category, he built a theme park, a casino and large expanse of malls and shops. Anyone who comes to Genting will end up spending a lot. Every ride, shop and attraction in Genting is designed to encash your emotion. For instance, you will be snapped at various points during your amusement park ride and the pictures will be offered to you at 30 ringgits. Because the tourists feel the ride was once in a lifetime experience, they readily pay for the ride. The best part is that even after spending big, you feel happy about it. You feel that you just had a great time and you deserved this break and a spending spree after all the tough days of work.
Lim Goh Tong made money in construction and mining and investing everything he had in Genting. None of his wealthy friends were ready to invest in his 'crazy' venture because they thought his idea of building a resort at 6118 m was never going to be possible. So Lim did it alone. It took him 3 years to cut a road through the forest. He set up his own power plant and created a drainage system to make the highlands suitable for construction. His efforts bore fruit when the then Malaysian PM visited Genting and granted him the permission to operate the first casino of Malaysia as a reward to his single handed effort to attract tourists to Malaysia. Lim and Genting never looked back; the resort grew in strength and Lim added new attractions in a rope way, theme parks and new resorts. After Genting, Lim also created another integrated resort in the neighbouring Singapore. More about the Sentosa, Singapore resort in the post on Singapore.

Genting also has the world’s largest hotel in terms of the number of rooms. The first world hotel has 6118 rooms (same as the height of the hill in feets) and is a sight worth seeing in the evening with the large plumes of mist engulfing it. The skyway cable car taking tourists from the foot of the hill to the resort is the best attraction in Genting. The engineering marvel will take you on a ride over the lush evergreen forests giving you an experience that’s breath taking. Although the establishment with its mega hotels, fascinating rides (some of them only exist here in SE Asia) and the fastest ropeway in the world is an experience in itself, the service quality is terrible. Almost none of the theme park staff knows English and they are rude to the visitors. One could see the resort staff working without any interest in their jobs all throughout the day and showing maximum energy levels at 5:30 pm when the theme park closed for the day. Visitors were sent back although the scheduled closing time of the park was 7 pm. Lack of maintenance was also visible in most of the rides.

Resorts World is a huge establishment now and they have theme parks in Sentosa islands, Singapore, Manila, Philippines and New York, USA. With expansion into newer economies, seems that the Lim family’s focus has moved away from their first resort. Genting now is money making machine grossing around 3 million ringgits for the family every day. So everything at Genting is about fleecing people. Prices of articles are nearly 4 times the rate outside and the 28 storied One World hotel cram rooms at every possible nook to set the world record. The room will deny you of even basic facilities like room service, wi-fi and even drinking water. With all its positives and negatives, I feel that Resorts World, Genting Highlands Malaysia is an avoidable place. Most of the rides can be experience at Universal Kingdom Singapore under better service quality.

The Demon King’s Golden Kingdom

If you had slept through your trip from Kerala to Sri Lanka, you will not realize that you are in a different land. Sri Lanka resembles the God’s own country in many ways. Be it be the long rows of coconut trees that line up the tarred highways, houses with tiled roof tops or sound of the rumbling sea at a distance.

“Sri Lanka got independence from British in 1948” our guide quipped. “British did a lot of good work over the 140 years they were in Sri Lanka. They build our railways, 5 star hotels and a good road network. They would have continued their good work but unfortunately we got independence in 1948”. I was a little taken aback by the eulogy for colonists by the oppressed.  As we moved on seeing the city of Colombo and hearing more from our Sri Lankan guide, the similarity I had weaved in my mind started dissolving. The first difference I could see was the blatant disparity between rich and the poor. Our guide took care that our tour bus went through the rich localities of Lanka and we were all given a perception of a developed country. But the intermittent slums which littered the lands gave us the actual picture of the golden kingdom build for Ravanna by the mason of gods. The vehicles running on the roads were mostly imported from India. There were Altos, Swifts and Nanos. Tata Nano infact is a big hit in Sri Lanka and is extensively used as Nano taxis there. But I was surprised to hear that the prices of vehicles are very high. It seems Nano costs almost 10 lacs after the large import duty imposed by government. The price of nano is around 3 - 4 time more than it is in India and almost equal to the price of Alto, the market leader of Sri Lanka. Initially, I thought the high price of cars are a strategy used by the Lankan government is keeping its roads less congested. They cannot expand their city roads, so only way to keep the roads commutable is by reducing the vehicles- If you cannot solve the problem, delay the problem.Later I found out that the Lankan government had actually sliced the duty on cars but immediately rolled back the same after the large number of car imports drained all its foreign reserves.

Most of our tour concentrated in an area called Colombo 7 aka Cinnamon gardens. The tour showed us the freedom square first and moved on the famous buildings of the New Lanka – Bandaranayike convention centre, Cultural auditorium etc. Interestingly all these structures were build with Chinese money donated to the Lankans. The President of Lanka Mahindra Rajapaksa is getting abundant helping hand from the Chinese which is using to rebuild his country, he liberated from LTTE. Chinese money is also building the second international airport and port down south. Interestingly, Chinese is trying hard to impress the large Budhist community in Sri Lanka and trying to build a network around India. I have a feeling that this is a bit of paranoiac work from Chinese as we all very well know that India is no match for China with all its internal troubles. Whatever investments Chinese do for Sri Lanka, Budhists  world over are never going to support them against Dalai Lama, so the big brother of Asia may not reach anywhere with this strategy.

After the city tour, we returned back to our resort called Club Dolphin. The resort is well build and is one of the favorite destinations of European and American tourists. Because of the this same reason, the staff will treat you like shit. The welcome drink and initial ritual will work fine but when it comes to peak hours, they will quietly ignore you and will tell you to wait if you press your case.

We then moved to Colombo international airport for our flight. Everything in that airport is substandard. First you will face an uncontrollable mob at the entry terminal. People will all be rushing in and the security staff will just toss your baggage in and out the scanning machinery. Once you are through with the entrance, you reach a large line of shops selling "authentic" Lankan stuff in dollars. Next you will be faced with security check-in staff with outdated metal detectors. The system is so poor that they will ask you to remove every piece of metal from your body before getting yourself scanned. You will have to remove your shoes, belt and I was wondering what they will do about people with metal implants within their body. Finally, we boarded our Sri Lankan air flight at 11:35 pm in the night. Tired from the day long trip, I slept off immediately only to woken up by the air hostess at 1:30 am for dinner. Imagine, 1:30 am and dinner made up of noodles pushed towards you. After the “dinner”, I went back to sleep again; again to be woken up a smiling air hostess at 4 am. “You will have to go through security check at Singapore airport now” she said. “What? But I am going to KL, why will I get a security check here” I asked. “You will have to sir, as our flight is goes via Singapore” she replied. Now imagine the heights – You are woken up at 4 am in the morning to take a walk through an airport which you are not even getting down at. As we had no choice, we went through the turmoil of taking a walk through the legendary Singapore airport and getting ourselves scanned and checked. I never really understood why Singapore was doing this. Singapore airport is one the most crowded and successful airports in the world. Surely, they don’t need to take people though such jokes to show off their possession. May be Singapore knows the quality of security in Sri Lankan airports and so was being doubly sure.

All in all, I feel that Sri Lanka is a beautiful country, very similar to Kerala in its geography and topography. Its sun, beaches and food are lovely and worth a tour. The best thing about Sri Lankan tour is that after a tour, you realize that India is a great place after all.

Menacing trip on Kerala roads

At 3:15 pm, we realized that our train left at 2:30 pm and we will have to find a different mode of transportation to take us to Cochin. As an obvious choice, taking a long car trip from Kannur to Cochin came downing on us all. 7 hours of travel on Kerala roads, phew! The thought was not a very welcoming one.
The mishap occurred because our ticket booking expert (my sister) confused 1430 hours of railway train with 4:30 pm :( She finally claimed that the confusion came in because the train number was 16306 which she confused with the departure time. :p Anyway finally, we were on our way to Cochin by road at 3:30 pm and then the adventure began.
Traveling on Kerala roads is like playing NFS. You are first exposed to narrow alleys fulls of speeding vehicles, most of them faster than you and all of them angry at you because you have just tried to trespass into their territory. Then roads wind, twist, bank and turn at random points giving the driver a formula one driver experience. Everyone seems to be speeding to catch a leaving plane, they are all honking and screeching, asking you to move faster or give way. All this can be endured but no sane driver will ever want to fight the real monster on Kerala roads - the transport buses. These omnipresent mode of public transportation are typically driven these days by school dropouts with absolutely no sense inside their brains. The drivers are kids aged between 20 - 25 years, ones who have acquired their driving license a few weeks ago. If I was getting a feeling of NFS, I think the bus  drivers were trying to create a road rash effect, making the roads hell for everyone around.
The fundamental problem of Kerala roads are much more deeper than the kids and their high seats(bus driver's seats) from which they look down upon the roads. Kerala has very little space for roads but our economy is heavily service driven. We import almost everything and our people travel a lot as part of their jobs. Owning a vehicle is a status symbol here and having a car is a must before you get married. All these adds up to our burgeoning number of vehicles while our roads are still at the widths they were at during British times. Add to it, the obsession housed by most against giving away their land for road and other infrastructure projects and you end up having highly winding roads which nauseates you after a few kilometers.
The problem can be solved only if infrastructure development is tackled in a cleverer manner. The idea of land bonds which was proposed by IIMK to Kerala cabinet was a move in this direction. But like all other great ideas given to government, this also is stuck somewhere beneath those red taped files.    

Hypocrite's oath

Recently on a trip to Mumbai, I met a guy working with the largest consulting firm in the world (in terms of projected revenues as the consulting LLP firms never really publish their revenues). He was a pass out from a top B-school in the country and has been at his work for last 2 years. We spoke about various things and somehow the discussion came to the high fees charged by B-schools and how a high salary is imperative to pay off the loan. What I heard next was unbelievable, the consultant from the firm started boasting that he never ever paid even a penny of his educational loan back. He should be earning a minimum of 25 lacs every year and still is finding it impossible to pay off a loan worth 8 lacs. The hypocrisy from an highly educated Indian surprised and disappointed me at the same time.

I was more surprised to find out that consultant from the firm was not alone in his 'heroic' act. There are a lot of students, graduating out of top institutes of this country, creating more NPAs for the poor public sector banks which gave them loans at the time of need. To find out more, I spoke to the manager of a bank near a top educational institute. The bank was into giving educational loans to students earlier but stopped the practice as NPAs went through the roof. He told me that nearly 50% of the loans given to the students were NPAs and the only data they had of the students were mobile numbers which were disconnected and 'permanent addresses' which didn't exist. It sounded to me that the systems in PSB were so full of loop faults that students found it easy to cheat. The incentive to cheating grew when they found that people who cheated are getting along without any issues and the domino tumbled.

When one look closer into this phenomenon, one can see that the deluge of NPAs started in ayear when the top Indian B-schools increased their intake and economy ran into a bad patch. Students who came into these institutes with hopes of high salaries suddenly found themselves with an average job and a high EMI. They found it easier to default the EMI. The defaults may have started with an intention of delaying the payment. But when they saw there were no repercussions, they got bolder and got used to the defaults. Soon the people who landed up with good jobs found that their own batch mates were enjoying a privilege unavailable to them and wanted to join the bandwagon. So the domino effect started.

My reasoning may give you a hint that that I'm putting the blame on the banks and the system rather than the meritorious professionals who decide not to pay their dues. If the education they received at India's top schools have not given them even so much values, I think we are a failures as a nation. We have failed at creating individuals who cannot separate the right and wrong and lacking long term vision and we have failed at establishing institutions which could create such individuals.

10 OCT, 2011, 06.43PM IST, PTI India Inc's fresher hiring up 21 pc in Jul-Sept quarter: Report

(This is an adopted report from Economic Times)

NEW DELHI: India Inc has witnessed 21 per cent growth in fresher recruitment in the July-September quarter, say experts.

"We have seen overwhelming response from clients over campus hiring. Industries like energy, infrastructure, consulting, media, IT and retail has grown up by over 20 per cent in Q2, FY 11-12.

"Whatever the slowdown in the US and European countries is, Indian market are showing more growth," Ripples Consultancy Services CEO Rishi Raman said.

Echoing view, Prachi Kumari Director of Sat-n-Merc Manpower Consultant said, "We had seen increment in campus recruitment activity and companies are focusing more on campus hiring because of cost effective module".

According to a survey by MyHiringClub.com which was conducted among 879 employers and 1,274, institutes across the country said that the second quarter of current fiscal year has seen 21 per cent upward hiring activity in campus vis-a-vis first quarter of 2010-11.

"The campus recruitment market had seen growth in terms of number of hiring and salary as well," MyHiringClub.com CEO Rajesh Kumar said.

Arjun Mohan, Placement Committee Member at IIM Kozhikode said, "Hiring season at IIMs started amid fears of global slowdown but we are now getting good response from companies on summer internship and final placements".

Experts believe that energy and enthusiasm of campus graduates as well as the right training make them the best possible combination of adaptability, flexibility and cost effectiveness.

"Now globally companies are paying more attention to hire from campus, because they find skilled professionals at very low cost. Besides, these graduates can easily adapt the company's culture," Kumari said.

Among the sector, the IT and ITes, infrastructure and FMCG sectors have done maximum freshers recruitment. In terms of pay package, IT space stole the show.

City-wise analysis shows that Bangalore has witnessed highest campus recruitment with 24 per cent, followed by Delhi NCR (21 per cent), Chennai (18 per cent), Mumbai (15 per cent), Hyderabad (13 per cent) and Kolkata (10 per cent).

Although, campus hiring in Tier II and Tier III cities is still very low.

"There is a major concern is hiring from Tier II and Tier III Cities. These cities need more attention in terms of campus recruitment," Kumar said.

Chips wars- Lays Vs Everyone else

PepsiCo, through its Lays brand, created a market for potato chips in India in the nineties. The brand which is now a household name is extremely popular among the young Indians. But lately, lays is facing a lot of heat in the market it created.

It all started with ITC banging the market with Bingo followed by copy cat solutions by Parle, Haldiram and Balaji. These players used the supply chain and retail network Lays painstakingly build over years. They bought potato from the same contract farmers and sold in the same shops side-by-side Lays products. Last 2 years have seen the competition intensify with local players such as Prakash snacks (Yellow Diamond) entering market and Parle relaunching its product (under Parle's brand) with a 20% free offer. With so many players, the competition on price points intensified and customer loyalty enjoyed by the segment eroded. In the 3 year war period, market share of Lays eroded from 66% to 58%, with the major share erosion in the states of Maharashtra and Gujarat where Balaji snacks, Prakash snacks and Parle Agro had a strong product portfolio and distribution network.

2011 began with the AC Nielsen report above which pointed at PepsiCo's losing grip on the chips market. But the legendary marketing of Pepsi is not the one which will accept defeat that soon. The strategy adopted by PepsiCo India to counter the insurgence of its competitors was nothing less than legendary and in all probability will go in as a Harvard case study.

The company realized that in India there exists a market for both cheap chips and premium varieties. So PepsiCo started exactly the way Kotler suggested, by segmenting the chips market. They positioned their flagship product Lays in the premium segment and made numerous changes to the product. The quantity was increased to 32 g from 28 g and price increased to Rs. 15 from Rs. 10. The package was also redesigned by making it thinner and taller than the standard packaging adopted by the industry. This allowed Pepsi to differentiate their product from the Parle, Diamond and Balaji. To add on to the perception of the customer, they erected the retail stores with special shelves exclusively for Lays chips and paid the retail stores to give exclusive racks for lays. The new retail planogram just had one motive - "Never keep Lays side by side with cheap competitors". No wonder the second largest marketing expenditure incurred by Pepsico after mass media advertisement is retail promotions.

For the cost conscious segment, Pepsi launched a new product - Lehar potato chips. Lehar copied it competitors in packaging and pricing and was positioned side by side with Balaji, Diamond and Haldirams. While the premium product Lays was always backed heavily by advertisements and promotions, Lehar received absolutely zero marketing allowing PepsiCo to compete heavily on price. With this master stroke of copying the copy cats, PepsiCo is turning the tables around and eating into the market share its competitors chipped away from it.

Lehar, the JV partner Pepsi used to enter India is a brand Pepsi uses for most of its products for the 'aam aadmi' such as its soda and now its chips. Pepsi also entered the namkeen segment with Lehar creating a strong competitor for Haldirams and Balaji. One cannot really understand if Pepsi is interested in capturing this segment which is concentrated in a few central Indian states or its strategy is just to prevent Balaji and Haldirams from growing strong(Both Balaji snacks and Haldirams made their money selling namkeen).

When I saw both Lehar and Lays in a shop in Mumbai, the first thing that came to my mind was the possibility of cannibalization. But if you look more closely, PepsiCo has launched Lehar potato chips only in the markets where it's facing competition from cheap copycats. In all other markets, they have launched lehar namkeen alone. Recent market studies shows that this strategy is immensely successful with both Lays and Lehar showing increase in market share and sales. Will this strategy be successful in long term before competition catches up is something we will have to wait and see.

Fuel Woes

GOI jacked up the prices of diesel and cooking gas today. The reason was the usual one, oil marketing companies are losing money due to the subsidies. This is interesting as the price of crude has been dipping. Oh! but we can't complain, diesel, cooking gas and kerosene is heavily subsidized int his country. In fact, we are the only nation in the world where kerosene is cheaper than drinking water. Let us understand this subsidy more -

Crude oil price (25/6/'11)

WTI crude - $92

Brent crude - $105

India calculates the price as a weighted average of WTI and brent in the ratio 5:4

Price of imported crude - $97.77

Price paid to ONGC for a barrel - $55

We get the crude at a discount ranging from 10% to 80%. I am adjusting the discount with the transportation expenses incurred during import. As India imports 75% - 80% of its oil

Average price paid per barrel - $89.26

Quantity of oil in a barrel - 158.9 liters

So the price we pay for one liter of crude oil is $ 0.56 or Rs. 25.27

According to refining companies, the operational costs of refining a liter of crude is 52 paisa. So the total cost of refined oil should be approximately Rs. 26.

As of today, petrol costs Rs. 71 and diesel Rs. 43 (Bangalore rates). In other words, there is a 200% and 100% additions of price due to government taxes and high costs incurred by petroleum companies.

Taxes on oil in India include -

1. Import/Customs duty on crude oil

2. Excise duty

3. VAT imposed by states

But this is not all, oil marketing companies are another big group of money guzzlers. These organisations which run on one of the most inefficient and bureaucratic organisational structure are a big reason for the hikes. We keep hearing about the oil companies losing $5, $10 or $2 per liter of petrol sold in India and the petroleum minister goes out of the way helping them out by issuing oil bonds or hiking the prices. What I don't understand is that why is it that these companies are never asked to cut costs internally. Why does not the corporate cost cutting mechanisms and concept of leaner organisations apply to them? These companies run some of the most inefficient supply chains in the world, give exorbitant commissions to their dealers who don't need to do any marketing to sell and carry outrageously overstaffed and inefficient organisational structures.

Every time when a hike happens, there is a lot of hue and cry about bringing down the taxes on oil. But this never happens because oil is the biggest revenue source for GOI and GOI needs all that money to feed its staff who sits at 5 levels of bureaucratic maze and passes files at a rate of 2 per day. The entire system which requires 5 people is run by 500 people now and we are forced to pay more for our daily needs. The significant cost and time overruns is not the only bad aspect of this structure; the system also results in high levels of risk aversion and indecision. Because one has to justify one's position, everyone wants to be part of the decisions and significant amount of ego clashes ensure that good ideas are nipped off at inception itself.

If you think about it, government is jacking up the cost first and then giving a discount on the increased cost and calling it subsidy. What an irony?

Comparison with katta koothara

After the posting of ads, some of my batch mates came to know about the existence of this blog and more importantly my "About Me". The effect was the ad you can see here (Courtesy - Tony Sebastian, Shashi)

IIMK has got talent :)

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The ads were created by AD RATS (Ansa, Devarajan, Razy, Arjun, Tony, Shashi) for our MM 2 project. To take the associated survey, please visit -

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5 point idiots

The best way to market your blog is by writing about the breaking news :) As high court rulings on religious hatred and Srinagar bombings are not of interest to my already depleted reader base, I thought I will give my views about the raging controversy between 3 idiots and 5 point someone.
I read 5 point someone when I was in college and just loved the book because I could identify with the life at a national college depicted in the book. The book will remain as one of my all time favorites. After seeing the movie 3 idiots, I cannot think about a better treatment that book could have met. Rajkumar Hirani has successfully created a motivating story perfect for a movie of mass appeal(read it as complete bollywood movie with all key ingredients- heroism, masala and romance)out of a book which was a simple, honest portrayal of Chetan Bhagat's exposure at IIT Delhi. The way the director has stitched together an entertainer while keeping the backbone intact is admirable. If you have noticed, the director has filmed the movie in such a way that all the sub-plots of the book - Hari's love story with the director's daughter, Ryan's perpetual machine, prof. Veera etc have either got removed or tweaked or merged together to make it look like a single rhetoric. The key aspect of the book which was loved by people like me- the iconoclastic Ryan(Rancho), the deep rooted friendship in the jungle of competition, an egomaniac professor and the life at IIT forms the basis of the movie.
Some key changes introduced by the script team has been a superman Rancho(he topped instead of finishing at the bottom of the class like Ryan), the humor touch given to the Chathur's character, the wrapper plot in which Rancho turns out to be an impostor and most importantly how the 3 idiots successfully change the system and become successful subsequently. Over and above, the script has incorporated some contents from e-mail forwards very cleverly at key areas. For eg:- pencil and pen on space. All in all, I reiterate the movie is brilliant and has been able to fix every single problem the book had.
Coming to the controversy, I really don't understand what is Chetan Bhagat claiming now. According to the contract uploaded on Vidhu Vinod Chopra's website which CB signed he has sold his novel for 11 lakhs allowing VVC and Hirani to adapt it any format they want. Now when the movie made 240 crores, he realized that his price tag was too less. I used to respect CB after I read 5 point someone. But his next 2 novels "one night at call center" and "3 mistakes of my life" were abysmally poor works of literature and were no better than a third rate bollywood movie. After wasting time on those 2 books, I decided that he was just a one book wonder and "Five point someone" had more to do with his life at IIT and his observations there rather than his skill as a writer. Anyway I heard the "2 states" is good, may be he followed the same old formula again, only difference is this time it is life at IIM. :) I agree that the books I mentioned were "best sellers", so may be he is keeping his reader base happy. So please see the above details as my personal opinion. The worst thing, CB could have done is the unwanted press interviews after the controversy. In an interview he gave to TOI, he was literally wailing like a child. The immaturity with which he was complaining to the reporter about how his mother missed his name in credits and how he plans to leave writing and join ISKON is not accepted from the IIT-IIM educated India's best selling English author.

Ajab CAT ki Gajab Kahani

I have not included any details of the CAT paper in this blog which will give you an idea of how the question paper actually was due to the non-disclosure agreement. But I felt that I should speak out on how the test is getting mis-managed at certain places. My advice to you people is that to go there with an attitude that "whatever happens I don't care. Anyway I will get complete 2.25 hours to complete the paper in a good environment, so whatever happens before that or after that, I don't care."




I reached CMR institute at 7 am as the scheduled appointment required me to report by 8 am. By 7:30 am, we were promptly allowed into the venue. The security and infrastructure arrangements were elaborate. My ID and Admit card were checked at every entrance. "Good start, Prometric is making them worthy of the $40 million they took from IIMs" I thought. At 8, we were allowed to enter our block and asked to wait inside a waiting room. Then started the series of mismanagement. Every now and then, a guy would come and make an announcement in broken English. I didn't quite catch the announcement initially, but then realized that he was calling people for photo and finger print scanning. Anyway I sat and watched the drama where a bunch of people will run towards the entrance whenever an announcement was made and only 5 out of them were allowed in for the photo shoot. There was a poor guy who tried 6 times (yes, I was counting) and was returned back every time. Anyway when my turn came at 9, I realized that there was only a single personal for an entire group of students. (No wonder, you are asked to come at 8).Basically, the whole process of security check and photo-shoot takes only 10 minutes, the 2 hours bracket is only because Prometric don't have enough employees and volunteers to complete the process smoothly.
By 9:15 am, we were done with all the proceedings and all set to take our tests. By 9:45 am, all the students other than people belonging to my room were allowed to check in into their respective rooms and an announcement came that the test in our room will be delayed by 10 - 15 minutes. "Tests are getting canceled right-left-center and he is talking about a 10 minutes delay, no problems" I thought. But I was too optimistic. 10:15 came and went, so did 10:30 and 11:00 am, still no news about our CAT exam.As the prometric people were tightly hunched up inside the testing room, romour mills started churning out various scenarios - Servers are down; we won't be able to take test today. I was lucky to have bumped against 2 of my friends from NITC, didn't get bored at all during that long wait. But I could see people exhibiting a wide array of emotions. Most of them were extremely tense; that is understandable - such a big day in their life is getting marred with unpredictability. Finally the information came from the officials at 11:55 am. The servers are indeed down; none of the people in our block are taking test. All the ones allowed in are just sitting in front of the computer :). We were lucky we could at least sit and chat in the waiting room. The announcement continued "If the servers doesn't come up by 12:30 pm, the tests will be rescheduled". By 12:25 pm, I have almost made plans for the afternoon when the announcement came "The servers are up, take your seats". Within 3 minutes, I was frisked and seated in front of the computer screen. After that, things were smooth (except for the couple of usual windows read only register errors and date mismatch issues) and we completed the exam by 2:45 pm. Please make it a point to take the tutorial on using the computer apparatus; I was unable to do it because an invigilator while trying to fix an issue with the software directly clicked the "start test" icon.

Basically after this, I feel that Prometric has not effectively handled the gigantic volume of nearly 25,000 people a day, may be they were never ready for it. Their other exams such as GRE generally have around 50 - 100 students in a center per session. The metamorphosis of CAT into an online format was an indispensable affair considering the humongous volumes involved and to a very large extent it has been done well. The test interface is pretty good and the guts the IIMs have shown in doing this is commendable. I will aver that everything else are good, except for the way Prometric has managed the full affair - untested processes and under rated servers are marring the success of this fascinating exercise and as far as the IIMs and Prometric are concerned, the issues may be a few technical problems at a minority of their centers, but for every student who went through that time of unpredictability before his crucial test, each and every second seemed like hours of trauma.

CAT and Mouse game

The hottest topic of discussion in any CAT website nowadays is about CAT going online. Let me give you the facts first.
1. CAT is going to be online and will be conducted by Prometric International Testing Authority. (They conduct the popular GRE and TOEFEL exams)
2. It is going to be a Computer based test and not a Computer Adaptive Test.
3. The test will be conducted over a period of few days and a student can get a slot in any 1 of these days. The students taking test on different days will get different question papers of equal difficulty.
4. The scores or marks may be displayed soon after the test is submitted.

The CAT has exploded in last few years and was taken by 2.25 lakh people in 2008. Due to the exponential increase in number of takers, the IIMs are finding it increasingly difficult to conduct the test. So they decided to take the test online. The online test will make the correction of the paper and result publishing very easy. This means that the intention was only to simplify some of the processes, so the paper should ideally be the same. In effect, computer based CAT will be just like taking a soft copy of the CAT question paper.
IIMs have clarified the point that CAT is only going to be a Computer based test or a CBT and not a Computer Adaptive Test or a CAT (so CAT is no longer a CAT!!). In spite of this, many coaching institutes are trying to speculate that it could be an adaptive test. The arguments does not seem to make any sense to me as this will result in test takers getting papers with different levels of difficulty and hence result in flattening of marks. This is totally undesirable for a test like CAT where the basic idea itself is to eliminate people.
Another associated question that is discussed all over the net is that if the interface will provide a navigation tab to move around the question paper. As I suggested earlier, if the intention is only to take CAT into a computer, the interface should behave exactly like the question paper and hence should have a navigation panel. Time management is one of the most important aspects CAT tests and freedom of navigation is an important constituent in time management.
Computer Based testing enables the scores to be calculated within seconds after the test gets over but as the test is distributed over a few days, the actual percentile can be available only after all the test takers are done with the test. So if the IIMs want they can give the scores of the test takers soon after the test but not their percentiles. Percentiles and shortlists will have to wait, may for a week.
Your approach for preparation need not change because you are going to click the radio buttons instead of shading the bubbles. The funda remains the same, be prepared with the topics and you will be able to clear any test. Only section which will have some change will be DI; you won’t have the liberty to do your calculations on the tables and diagrams in question. So I have a feeling that this year, IIMs may reduce the number of caselets in DI which will have a lot of data presented in the form of tables and chart. They may decide to stick with a lot of puzzles and data sufficiency instead.

Kitten to CAT

I took CAT for the 1st time in 2005. At that time, the director of the institute where I was doing my coaching started the class by saying that CAT is all about speed and typically you need to be a JOAMON (Jack of All Master of None) to crack it. You can’t say that this was an entirely wrong statement because till 2003, CAT had 150 questions and one needed to be really fast to maximize his score. But what he missed out was the metamorphosis of CAT. CAT underwent massive changes in the next 5 years – the number of questions changed with every paper – from 150 to 123 to 90 to 75 and finally to 90. IIMs introduced the concept of questions with different markings in 2004 and scrapped it after 2 years. They started making English sections more and more abstruse to an extent that in 2006, only philosophers could answer the questions. In year 2006, the answers to the English section were an unsolved mystery – the big 3 in CAT coaching came out with totally different solutions to the same CAT paper. The funny thing was that the IIMs came out with a solution which differed a lot from all 3 big CAT masters. 
Anyways the CAT has grown, it is no longer a kitten and it is no longer a test where JOAMONs can do well. When I met the same director after CAT 2006, he told me that a year back; he thought the CAT is no longer a test for JOAMONs but a test for JOAMOO (Jack Of All and Master Of One) i.e people who can do ok in 2 sections and who are really good at 1 of the 3 sections, but after 2006 which had only 75 questions; he thinks that CAT is for MOA (Master of All) sections.
With changes in the difficulty levels and question pattern, IIMs have tried to keep CAT elusive. There is even a saying which a top CAT coaching institute imparts to its students as gospel – “The only thing predictable about CAT is its unpredictability”. To an extent it is true, but not entirely. The sections of quant and DI and certain part of verbal are predictable hence one can effectively prepare for them. What is unpredictable then? The number of questions, the marks distribution, the nature of questions in 1 or 2 sub-sections of verbal and toughness of the reading comprehensions. If you are well prepared with the syllabi, these are non-entities and will in no way effect your percentile. Just think about this, your school never used to tell you the number of questions, the mark distribution etc in your school exam papers, still you used to do well in them if you were prepared with the portions. So CAT preparations is not about speculating the various combinations of time distributions for each available question, instead it is about learning the portions and getting some practice which will get you ready for the deed day and this is exactly what we will help you achieve at Noesis.
Given below are charts which give the distribution of marks for Quant and verbal sections in CAT for last 8 years. I didn’t make it myself but copied from a website which has been advertising our techniques and questions as their own; just a tit for a tat.  This will give you an idea of the portions you need to concentrate while preparing.



Ignore the percentages and focus on the trend of questions. You can see that topics such as Algebra and Number are gaining more and more importance and topics like Commercial Maths are receding into background. A similar trend is seen in verbal with topics such as Reading Comprehension and Vocabulary gaining importance. Another point you should note is that the break-up done here categorizes the topics into a headings based on the direct questions from that topic but our pedagogy is totally out of the box and we specialize in solving the questions in easiest possible way, this may be by converting them into a totally different topic. (You may even see questions in geometry solved with number patterns).