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WHO SCRIBBLED?
Minakshi Singh (S.Y.B.A.)
Nikita Sharma (S.Y.B.A.)
Prashant Maheshwary (S.Y.B.A.)
Prahniika Borkar (S.Y.B.A.)
Aayush Asthana (F.Y.B.A.)
Damini Kane (F.Y.B.A.)
Kartik Jaishankar (F.Y.B.A.)
Maduvanti Srinivasan (F.Y.B.A.)
Vaibhavi Parmar (F.Y.B.A.)
SPECIAL THANKS TO:
Hiresh Suvarna (S.Y.B.A.) for the
Photographs
Mrs. Riddhi Modi
WHO FIXED IT?
Aanchal Jain (T.Y.B.A.)
Nihaarika Ravi (T.Y.B.A.)
(Editors-in-chief)
WHO HELPED?
Jayati Trivedi (S.Y.B.A.)
Nikita Sharma
Jaai Vipra (S.Y.B.A.)
Maduvanti Srinivasan
Vaibhavi Parmar
WHO MADE IT LOOK
GOOD?
Nihaarika Ravi
Prashant Maheshwary
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FOREWORD The Contrarian is a small yet significant addition to the department of economics.
We personally think it is like the last block of a puzzle, it completes the entire picture.
This third edition Annual Economics Magazine has definitely taken a leap from the
previous edition. For starters, we have a central theme to the Magazine called
‘Economics & _____’ which essentially explains the presence of theories taught in the
classroom in our practical real lives. So we asked our writers to hand pick anything
around them and investigate the economics involved in it.
Also, the cover page couldn't be any truer to the theme. The relationship between
Yin and Yang is that of interdependence. They constantly transform into each other,
the weaving is almost beautiful. Yin creates Yang and Yang activates Yin. Similarly, a
little introspection would make us realize that Economics creates and activates
various aspects of life and vice-versa. Elaborating on our magazine cover, the Yin
shows the economics part of life whereas Yang shows the areas that have been
investigated by our brilliant writers.
Another major highlight for the first time is that The Contrarian is covering
Arthanomics - The First Ever Intra-College Festival of Jai Hind College. We have also
featured the making and history of the Economics Association Logo, which should
be an interesting read. In addition to this, we have included the much asked for
'Trivia Section'. A small humorous attempt to view Economics from a slightly twisted
tangent.
Before we leave you to explore the work of our young economists, I would like to
extend my gratitude to all our economics professors Mrs. Sarita Jaishankar, Mrs.
Vaidehi Dhamankar, Mrs. Mousumi Mazumdar and Ms. Heena Thakkar, all the office
bearers and members of the Economics Association who were the driving force
behind this accomplishment. And a special Thank you to Team, The Contrarian. Yes
we did it! We hope the baton is passed on and the good work is continued. This one
has been a ride.
Aanchal Jain
Nihaarika Ravi
(Editors-in-chief)
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FROM THE HEAD OF THE DEPARTMENT
I would like to begin my note by congratulating the students of the
Economics Association for successfully bringing out the third edition of “The
Contrarian” – the Annual Economics Magazine. It is a magazine of the
students, for the students and by the students and we all are proud to say so.
The students have made a constant endeavour to take the magazine from
heights to heights in terms of creativity and content and I want to
congratulate them for achieving the qualitative improvement. Well done
Aanchal, Nihaarika and the whole team!
This academic year was a landmark in the history of Economics Association
for more than one reason. Firstly, there were a number of progressive
changes introduced in the structure of the executive body with addition of
new posts which were not limited only to the TYs. The first and second year
students were included to ensure total involvement and they were allowed to
vote as well as stand for elections. The association also opened its
membership to students of all faculties and found a positive response. Today
we have almost 150 members in the association from across faculties and
together we have been forming winning teams as we represent Jai Hind
College in various events.
Secondly, we now have an official logo for the association signifying what
the association stands for. This was the result of creative inputs and efforts of
Kruttika and Nihaarika. Great job, girls!
The proudest moment for the association was the inception of “Arthanomics”
– an intra-college Economics Festival which we hope will garner the required
support from the college and turn into an inter-college “quality” event soon.
This two-day event held in the month on July, 2013 brought out the hidden
potential of our students as it gave an opportunity to almost every student to
participate. The enthusiasm with which every event was organised spoke for
itself. The great success of Arthanomics was a result of the team work of all
students under the capable leadership of Kruttika.
Under the able leadership of Bineet and Divya, our event heads, the
economics association students went on to participate with full fervour in
numerous inter-college events, within Mumbai and outside, and made a
mark for themselves.
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The icing on the cake was the success of our students at the placements
where we bagged a post in the best of companies such and Ernst & Young,
JLL, KPMG etc. Pratul Narayan, our placement head ensured that our
students did not miss any chance and proactively worked towards it, Keep it
up, Pratul!
Under the able organisational ability of our social event head, Vidhya Jain,
we made an enlightening trip to Govardhan Village which is based on an
eco-friendly technology driven by ex-IITians. It was an amazing experience for
all. Good job, Vidhya!
The backbone of all our success has been our team of office bearers who
have been led by Katyani and supported by the juniors Prashant, Urvashi,
Aayush and Kartik. A big congratulations to all! Keep the flag of Economics
Association flying high!
Last but not the least, I would like to comment on the theme of this year’s
magazine “Economics &___” which truly captures the main goal of our
students. They want to go beyond the defined realms of the subject and
explore the unexplored. With an eye on the horizon, the students of the
association believe in growth beyond borders and without shackles – all our
activities this year have been reflective of this mood and I hope we continue
to evolve in the same manner.
Sarita Jai Shankar
Acting Head of Department, Economics
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War isn’t just about hate and politics. Explaining the dynamics of a war, Vaibhavi Parmar
exposes the underworld of Economics in a war.
Since the dawn of history, people
have fought against each other.
Modern warfare differs from the olden
times where war was just restricted to
battlefields. Warfare disrupts a nation
politically, socially and economically.
Economics has always been intimate
to war as it is impossible to fully
understand either topic without some
knowledge of the other. The following
article will throw light on the various
ways wars and economies are related.
The basic aim of an economy during
war is to prepare and sustain it for war
production and war related activities.
There are theories that state a war is
good for the economy. The reasoning
for this theory is that production during
wartime increases greatly. During a
war producers operate at full capacity
without catering to the preferences of
the consumers. For example during
World War 2 Roosevelt called for the
production of 60,000 aircrafts during
1942-a goal many industrialists felt was
impossible to achieve. Yet U.S. war
plants churned out nearly 86,000
planes the following year. To deal with
the increase in output the companies
will employ more labour reducing
unemployment rate. As the
unemployment rate goes down the
people would spend more, benefitting
other sectors. This logic has been
considered as flawed by many
economists like Frédéric Bastiat author
of ‘That which is Seen, and That which is Not Seen'.
An effective argument to the notion
that war is good for the economy is
contradicted by a concept called the
‘Broken Window Fallacy’ which states
that destruction and its subsequent
costs are not economically feasible.
Replacing something that has already
been purchased is a maintenance
cost, not the purchase of a new good,
and maintenance doesn't stimulate
production. Another very important
argument that supports the fact that
wars aren’t conductive for the growth
and development of an economy is
the post war situation. The same
products and services which faced an
exorbitant demand during the days of
wars such as food, medicines and
even arms and ammunition for that
matter falls down massively. Since the
demand starts’ decreasing the supply
of those products also starts falling. This
subsequently leads to a lower
requirement of labour eventually
swelling up unemployment. Thus, all of
these conditions post war pose as
participants of a vicious circle in the economy.
The government during war has
greater control over the economy. It
brings in ‘rationing’ in the market. This
enables citizens to buy only a limited
amount of necessary items. Many
Americans experienced ‘meatless and
wheatless’ days during the World War
1. Also the government emphasises
production of war goods making other
necessities like clothes etc. more
expensive because of high demand.
The war efforts can be funded
primarily using three methods: by
increasing taxes, decreasing spending
other areas or increasing debt.
Increasing taxes on the people
reduces their spending because it cuts
into their real income. For example in
World War 2 U.S.A. saw tax rate on
highest incomes reach 94 percent. A
decrease in the spending by a nation
means a decrease in the amount of
money being circulated in the
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economy. Increasing the debt of the
nation would mean an increase in
taxes for the people in the future or
decrease in spending of the
government, both of which are
harmful to progress. Thus war economy
is quite detrimental in the short run as well as the long run.
In modern times there can be several
reasons why nations fight. Economics
though not wholly the cause for war
can certainly be a major contributing
factor. For example the economic
consequences of World War 1 proved
a major reason to as to why World War
2 happened. World War 1 had
destroyed the economies and
exhausted the resources of the
countries that had participated. Italy
and Japan tried to solve the problem
of too few resources by means of
territorial expansion. The Great
Depression of 1929 that began in
United States halted whatever
economic recovery Europe had
managed to achieve post war. The
Great Depression which gave rise to
mass unemployment and poverty
caused despair among the people.
These feelings made the people
support any government which could
end these problems and give them
economic stability even though it
meant supporting any extreme
political movement. Germany’s Nazi
party gained fabulous support during
the great depression, and it is this party
that would later go to war. Thus a
combination of economic reasons
coupled with various socio political
reasons can be the push a country
needs to go to war.
War requires a heavy amount of
resources, especially capital. For an
apt example, we can look at the
aftermath of World War 1. By 1918 the
war was costing about $10 million an
hour. Most of the nations fell into a
huge debt. Additionally governments
also printed extra currency which
caused severe inflation after the war.
The money spent on the war effort, is
money that cannot be spent on food,
health care or other areas. The stimulus
felt in one sector of the economy
comes at a direct but hidden cost to
other sectors. Apart from destruction
of its fixed capital and infrastructure
the country loses its able workforce
too. France, for example, after World
War 1 had lost one tenth of its
workforce. A lot of businesses shut
down after workers leave for military
service. Also the reparation cost post
war can add to the debt of a nation.
Thus economic reparations after a war
can be quite cumbersome.
Though Economic warfare is
considered a relatively inexpensive
complement to war activities, there’s
no denying its usefulness. Some
common means of economic warfare
are trade embargoes, tariff
discrimination, boycotts, sanctions,
freezing of capital assets, the
prohibition of investment and so on.
However the success of economic
warfare is not always guaranteed. If
one country denies resources to
another, the latter can produce
resources internally or get them from
somewhere else. For example the
United States in an attempt to remove
Fidel Castro from power in Cuba
maintained a decades-long embargo,
however this did not work as Cuba got
its resources from elsewhere like
Mexico, Canada, and Western
Europe. Economic warfare is an
important concept to war as its very
essence is to block the enemy country
from getting war assets; this in turn weakens their ability to fight.
Thus economics and war have a very
close affiliation to one another. War
and economics is fascinating to study
together because of its scope,
practical applications and its presence in history.
10
From Small Wonder to Grey’s Anatomy,
Indian TV viewership has undergone
massive changes. Aayush Asthana explains
the trends
The television has been a favorite
medium of entertainment ever since its
conception, having withstood the
boom of other mediums such as the
internet and smartphones. Perhaps the
biggest contributors to its greatness
are the omnipresent TV shows that
have been designed to engage and
entertain viewers.
Since TV shows have always been a
profitable business it makes sense to
say that this industry has steadily been
carving a bigger slice for themselves in
the entire entertainment industry, with
increasingly huge fan bases, and a
growing reach with the global audience.
Producers realize this and are not
hesitant to make massive investments
where they see potential; the scale of
undertaking of shows has reached
dizzy figures. Most of the tv shows are
sponsored by broadcasting
companies. Producers shell out
astronomical amounts of money to
ensure quality content. If the audience
is satisfied then the shows gain
popularity, this in turn ensures that the
producers enjoy a lion’s share of the
profits reaped through sources like
broadcast rights, reruns, sale of DVDs
and show related merchandise and
selling of advertisement slots during the show.
Breaking Bad, another TV show,
following its much anticipated series
finale, boasts of similarly impressive
figures. Shooting the show cost its
network AMC about $3 million per
episode in 2010, and $3.5 million per
episode in its final season. The show’s
last 16 episodes cost approximately
$56 million to produce. In fact,
Breaking Bad fan Jeffrey Katzenberg,
co-founder of Dreamworks, offered to
pay $25 million per episode to
produce three more episodes. That’s a
total of $75 million, at an average of $568,000 per minute of final air length.
Although sometimes the financial
organizations behind these shows bite
off more than they can chew,
Consider the historical drama Rome -
a show co-produced by two media
giants - HBO and BBC - The first season
was produced at the staggering
budget of US$100–110 million and
although the show was renewed for a
second season, it was cancelled after
that due to spiraling costs, which co-
producer BBC would have struggled to meet.
How do they recover investments of
this magnitude? It is only a TV show!
But, the returns of such successful
investments are also huge. AMC
extended the runtime of the last two
episodes of Breaking Bad from 44 to 54
minutes – 75 minutes apiece with
commercials – and raised its
advertising rates to as much as
$400,000 per 30-second spot making
sure their investment pays off. The 21
minutes of commercial airtime in
“Felina,” the show’s final episode, has
earned the network around $7-8
million in advertising revenue alone.
Also the sales of DVDs help boost
revenue. The first season box set of
Game of Thrones sold 350,000 copies
in the first seven days of its release—
the largest first-week DVD sales for any
HBO show ever. The second season
box set sold 241,000 copies on the first
day of its release.
Threat to TV channels
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Services like Netflix, the provider of on-
demand streaming of movies and TV
shows, indicate a shift in consumer
trends. Viewers seem to favor the
convenience of Netflix’s available
collection of their favorite TV shows, as
opposed to paying subscriptions to a
whole bunch of other premium cable
services. Netflix’s shares have
increased by 10% in late 2013 after
announcing it had passed 40 million
subscribers, over-taking Time Warner’s
HBO channel. Netflix also reported
income growth from US$7.7 million to
$31.8 million from the last quarter. This
can also be attributed to Netflix’s
efforts to provide original
programming with recent hits like
House of Cards, Orange is the New Black and Hemlock Grove.
One of the most troublesome worries
for shows one is piracy. Game of
Thrones was the most pirated show of
last year, with a single episode being
downloaded 4.6 million times- more
than HBO’s entire viewership for that episode.
India and US TV shows
A good chunk of online pirates of US
TV shows happen to be Indians. Often,
this piracy arises out of necessity-
although an expanding number of
young, urban Indians enjoy and follow
American TV shows; they usually have
to wait many frustrating months after
the content’s original airing for Indian
rebroadcasting channels to show it.
Even then, the numbers of TV shows
that reach Indians are limited. And
with prime services such as Netflix not
being available in the country,
resorting to piracy and illegal
downloading becomes the most convenient answer.
Recognizing this, a number of English
general entertainment channels such
as AXN India, Star World, Zee Café and
other networks are going the extra
mile to air popular shows closer to their
US premiere—from negotiating hard
with US studios to having their
employees edit scenes so as to suit the
Indian television’s, more conservative
approach to entertainment.
AXN India, the channel owned
by Sony Pictures Entertainment Inc.,
launched Hannibal within 24 hours of
its international launch in the US in April
2013. The new channel Star World
Premiere was launched with the
specific aim of airing new shows and
new seasons at almost the same instant as their US airing.
English-language entertainment
programming, however, is still a niche
market in India, reaching less than 1
percent of 800 million viewers, But
Kevin Vaz, Sales Head, Star World India
says “Even the top 1 percent is a huge audience in terms of numbers.”
We can see US TV shows have found a
market in India and this is just the
beginning, with the Indian television
industry projected to be worth 848
billion rupees ($13.7 billion) by 2017, US
production companies will
undoubtedly keep a watchful eye
over Indian television trends, because
a marriage between these two
industries is surely a win-win situation.
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It is one of the most widely used mode of transport. Yet, its operation confounds and amuses
us. Madhuvanti Srinivasan gives you all the gyaan on our Indian Railways.
The Indian Railways successfully
completed 160 years of its existence this
year. With a modest and humble genesis
in 1853 between Bombay and Thane, the
Indian Railways is supposedly one of those
railway organizations in the world which is
a surplus generating enterprise.
Considered to be one of the benefits left
behind in India by the British, the Indian
Railways are very rightly called the
“Catalyst of Socio-Economic
Development”. The Indian Railways is a
mammoth industry accounting for 1% of
the GNP. It includes a route of 65,000 km
with 7,500 stations. The operations cover
substantial Indian territory of and also
provide limited international services our
neighbours ., The rolling stock includes
239,281 freight wagons, 59,713 passenger
coaches and 9,549 locomotives which
transport 24 million passengers and 2.8
million tons of freight daily.
This state owned enterprise observes
revenues in billions. It earns US$17 billion
out of which US$11 billion is from freight
and US$4.4 billion is from passenger tickets.
Passenger and Coach Earnings have
registered an increase of 11.35 percent
and 11.05 percent respectively. The
number of passengers has registered an
increase of 2.35 percent. These figures also
majorly contribute to the 9 percent growth
of our Indian Economy.
Fines from offenses and advertisements
also contribute to the earnings if the INR.
The monthly revenue of the Suburban Rail
Network includes 6.7 lakhs by offences
and 8.27 lakhs by advertisements.
Bollywood and its iconic railways scenes
are also dear to the INR. CR alone earned
Rs. 1.02 crore from film shootings with the
authorities raking almost Rs. 91 lakhs in just
three months.
In terms of employment railways are
crucial to India. Being the world’s ninth
largest employer with almost 1.4 million
employees it accounts for 6% of the total
employment in the organized sector and
an additional 2.5% indirectly through its
dependent organizations. Welfare of the
state and railways share a close
relationship; the latter has played a chief
role in sectors like health and education.
With its vast network of schools and
training institutes the IR‘s contribution to
Human Resource Development is often
overshadowed. In the 2002 droughts of
Rajasthan and Gujarat, IR was central in
transporting food and other relief
packages to the people, thus intensifying
its role in the sector of public service. The
operation of the “Lifeline Express”
intensifies its role in the sector of health by
providing medical facilities to people in
the backward regions of our country and
is also called the Hospital-on-wheels.
Tourism is grateful to Indian railways too.
The IR operates certain special operations
to boost tourism and the subsequent cash
flow in the economy which include ‘The
Palace on Wheels’ - a joint venture with
the Ministry of Tourism of Rajasthan, ‘The
Deccan Odyssey’ which is a joint venture
with the Tourism Ministries of Maharashtra
and Goa and ‘The Golden Chariot’ which
is a joint venture with the Tourism Ministries
of Karnataka and Goa.
Railways are called the lifeline of the
country for good reason. It connects
manufacturing centers with markets and
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sources of raw materials facilitating
industrial development. It also links
agricultural production centers with
lucrative distant market for better and
efficient distribution of goods. IR provides
rapid, cost-effective and reliable bulk
transportation to the energy sectors .i.e.
moving coal from coal field to power
plants and petroleum products from
refineries to consumption centers. Lastly, it
serves as a strong nexus between all the
places of our country subsequently
enabling low cost, rapid and large scale
movement of masses across the length
and breadth of our nation.
The Indian Railways is 6 times more energy
efficient and 4 times more economical
than the prevalent roadways. The
environmental damage or degradation
caused by the Railways is much less. The
cost of construction is 6 times lower than
the cost of construction of roads and it is
the only mode of transportation which is
capable of using any form of primary
energy. Also, the Indian Railway network
has reduced the cost of trading, reduced
inter-regional price gaps and has
increased trade volumes. When a rail
network gets extended to an average
district, the real agricultural income in the
district rose by approximately 16%. The
connectivity that IR provides to the
country also increases the efficiency of
labor markets. For instance, a worker from
a backward region in Bihar who was
getting Rs.35 per day working in his village
now finds it convenient to migrate to
Mumbai and earn Rs.200 a day, further
accelerating economic growth.
However, a few drawbacks haunt the
Indian Railways. The manufacturing
capacity of freight wagons, passenger
coaches and locomotives of this country is
very weak and limited because of which
India loses almost US$45 billion annually.
Thus, a lot of economists feel that allowing
a 100% privatization will increase the
investment in the railway sector enabling
us to tackle the logistics issues. However,
fearing its private sector rivals, the IR has
still put the Privatization Bill on hold. Also,
there have been talks of allowing FDI in
the railway sector to again construct and
maintain railway lines, ports and stations
but there hasn’t any progress on that front.
The Indian Railways under the stewardship
of the Ministry of Railways has always been
providing the nation with phenomenal
outputs and results and also has been
successfully fulfilling its duties. However
with changing demographics and
increasing demand, The Indian Railways
will have to encourage Privatization and
Foreign Direct Investments (FDI) with the
required governmental intervention to
enable the Railway to grow and develop
on rightful lines and to also bring about a
positive metamorphosis in the system
which will prove to be lucrative for both
the elite and the impoverished classes and
to also finally stand by its motto that is to
serve as “The Lifeline Of This Nation”.
14
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The economics of policies is a complicated affair. Prashant Maheshwary simplifies it.
Most of us today wonder as to what has
gone so incredibly wrong with our
economy. A country, which was once the
hotspot for all western investments and
businesses, now seems to be the
godforsaken place wherein no
western/Indian investor wants to invest. So
what has gone wrong? Some blame it on
the bad governance, policy paralysis and
domestic problems while others blame it
on the international parameters like the
improving the American economy. The
situation gets even more complicated
because almost all the Indian states have
recorded a steady growth rate, which
gives all the more reason to journalists,
critics and activists to pull up the central government.
According to me, the current chaotic
situation is a mix of all these parameters
and a few others but one reason that
stands out is “bad policy decisions”. But
let’s not be fooled by this steady and
rather impressive growth rate of each
state because the law of behavioural
economics states that micro level
behaviour is often different from that of
the macro level. This means that even
though each state in the country is
growing steadily, it doesn’t ensure that the country as a whole will grow as well.
Inflation, Current Account deficit and
Fiscal deficit have gone through the roof
while Rupee has rapidly devalued and
government has woken up too late to
control them. Although they may be
partially correct in blaming the current
Indian scenario on the international
incidents like market slowdown and
improving American economy, a lot is also the fault of the governing body.
For example, in order to control the current
account deficit, the government
increased the import duty on gold from 6%
to 8%. Such an indefinite rise in the import
duty saw an 80% slump in gold imports but
this in turn led to rampant gold smuggling
creating more problems for the
government. This is an example of bad
policy decision because the government
could have increased the import duty for
a specific period of time till the current
account deficit contracted. So those who
invested in gold/ bought gold would wait
till the import duty is reduced thereby
automatically avoiding headaches like that of smuggling.
Government has also attracted much
criticism with the latest food security bill
and the land acquisition bill. I personally
believe that the passing of a bill such as
the food security bill is inevitable in a
country like India where vote-bank politics is practiced with much vehemence.
For example, in 2012 India produced a
surplus of 10000 tons of food grains which
served as buffer stock but to meet the
criteria of the food security bill, India will
have to produce an excess of 40,000 tons
of food grains. Looking at the current
situation of the Indian agriculture, it could
be rather impossible to increase
production by 70% overnight which means
that India will end up importing food grains
which is going to further strain the current
account deficit and fiscal budget.
Moreover the government has failed to
integrate this scheme with other state level
schemes floated by regional governments
leading to unnecessary give-away and
wastages of food. The current economic
situation should have ideally given the
Food security bill a red signal till the time
such a policy was deemed feasible for the
economy, but with the Congress going to
elections in 2014 such a step is rather expected of a political party.
Same can be said about the land
acquisition bill which completely favours
the farmers and serves as a deterrent to
potential investors who want to set up a
plant in India. The current land acquisition
bill will require up to 5 years in order to just
acquire land in the country, something
that’s surely not going to help boost an investor’s confidence.
15
International incidents like the Euro
slowdown and improving American
economy is also responsible to some extent.
The Indian exports have declined by 1.76%
in 2012-13. The Euro slowdown has led to
the decrease of exports of Indian
commodities thereby affecting India’s
current account deficit. Moreover the
expiry of the **GSP (generalized system of
preferences) treaty with the USA is going
to further affect the net Indian exports. But
the lack of urgency shown by the
government in renewing the GSP treaty
with the USA is another bad policy
example. The complete mix up of priorities
has bloated to current account deficit to 4.4% of the GDP
There is also a considerable amount of
change in USA’s policy (like that of ending
“quantitative easing”). The new policies
have hit the developing nations like India,
really hard. Subsequently there is a
complete shift of equilibrium and
migration of investment from the emerging
economies to the Western developed
world. Therefore, along with the influx of
investment and printing of new currency
American economy has improved at the cost of emerging markets.
But let’s not fool ourselves by completely
blaming the Westerners for our condition
because India is at the bottom of all the
tables consisting of all the emerging
economies and this is majorly because of
its own domestic problems. The current
account deficit as stated earlier consumes
4.4% of GDP; fiscal deficit is 4.5% of GDP
while the highly volatile Rupee is currently
at 63.
India is still a very huge market but lack of
pro-investors policies has hugely damaged
the potential of this country. For example,
India is ranked 152nd out of 170 nations
when it comes to ease of starting
businesses. Neither the foreign nor the
Indian investors have any kind of
confidence in India’s highly volatile and
unreliable economy. Policies like that of
retrospective taxation have taken the
country 30 years back. Bad policy
decisions have greatly damaged the
potential of this huge market. I believe
that problems of “bad policy decisions”
can be avoided if there is certain body in
place which can comprehensively review
a newly proposed policy. The CWC
(Congress Working Committee) would
obviously be unsuitable to perform the
required task as the review would be
politically biased and not independent.
The only organization that has the required
infrastructure and ability is the Planning
Commission. Their assessment will also be
politically independent and thereby purely
based on merit. Such an organization
exists in the USA too, wherein the body has
helped in discarding policies that seems to
be a burden rather than a problem solver.
India too, needs such a body in order to
get their policy decisions right. Therefore till
such a reviewing body is not put in place,
till then there will no bifurcation between progressive and regressive policies.
** [GSP is a way of improving the growth in
the developing world by providing
preferential duty-free entry for up to 5,000
products]
16
Kartik Jaishankar recently started a gourmet food service. He gives all the economics you
need to know before you find those perfectly monogrammed chef whites.
“It's a very, very difficult space to
operate in, the restaurant business-it
requires a lot of human beings to
intersect at just the right place to
make it all work out.” says the popular
American chef Rocco DiSpirito. When
one thinks of starting a restaurant, they
imagine it to be as simple as cooking
food and serving it to customers. But
let me tell you, there is so much more
that goes into opening a restaurant,
that sometimes you wonder how so
many people are doing it, and doing it
well.
I have been working on a restaurant
venture with a few friends of mine, and
we are starting a chain of restaurants
which will serve premium gourmet
food to working professionals. I would
like to run you through the process of
starting up a restaurant, right from the
conception of the idea to the execution.
The first and most important factor is
THE IDEA. The idea has to be different
but at the same time viable. For this,
one needs to construct multiple
business models, and see which one is
the most achievable. An in depth
market research is required, to find out
the competition as well as the target audience.
Once the market research is
conducted, the execution process
begins. The entire structure of the business is broadly divided into:
1) Corporate: This segment deals with
getting finances to carry out the
business and organising all the
required licenses for running the
business. The capital required to set up
a restaurant is usually quite high, which
is why most people take loans or seek
investors for their business. While
investments are helpful, they come
with a large amount of restrictions.
Investors take almost all control of the
business, leaving you with no room for
creativity and originality. Which is why,
I would recommend taking loans
rather than throwing your business into the hands of your investors.
Getting licenses for a restaurant is the
most exhausting part of the entire
process of setting it up, but at the
same time it is the most important too.
There are about 42 licenses required to
legally set up a restaurant, all the way
from BMC Health License (to serve
food and liquor) to something as
absurd as ‘Permission to operate more
than two cylinders of gas at a time’.
2) Food: Within this segment, we look
at two important aspects:
First and foremost is the ‘Menu
Development’. Menu development
involves deciding which items to put
on the menu, finding the best possible
recipes for them, and conducting
regular taste tests to check the quality
of these items. Now the Indian palate
is a very restrictive one. Somewhere
between mastering an international
cuisine and “Indianizing” the dish, the
focus is lost. So the dishes have to be
chosen in such a way that- on one
hand, they please the Indian palate,
and on the other hand, they retain their very essence and soul.
Second is the supply chain. Supply
chain deals with breaking down every
single dish into their basic ingredients,
17
locating the best sources of these
ingredients and then working in close
contact with these suppliers to get a
constant year round supply of these
ingredients. The kind of ingredients one
chooses is based on the price they will
charge on their final product. A local
Chinese restaurant would choose
cheap, local, inorganic vegetables
while a restaurant like Yauatcha or
Royal China would choose the finest
produce from around the world. This is
why the ‘Chinese Bhel’ in our canteen
costs Rs.35 and a portion of Chicken
Dumplings at Royal China cost Rs.350.
The other major factor that one is
concerned with in Supply Chain is
identifying good suppliers who will
provide the supplies on time and
regularly. The quantities required by
restaurants are measured in METRIC
TONNES, so you can only imagine the
impact of one late delivery truck full of
vegetables.
3) Infrastructure: Location, rent and
fabrication of the restaurant come
under infrastructure. Location is an
extremely important element which
can make or break the business. For a
restaurant to be successful, it has to be
located in the right place. A number
of factors help to decide the location
of a restaurant, namely, cost of land,
rent, accessibility, visibility, surrounding
environment, competition within the
area, and the type of population in
the area. While one outlet of California
Pizza Kitchen (CPK) in Phoenix Mills
enjoys great business, another outlet of
the same restaurant chain located in
Bandra-Kurla Complex (BKC) goes
empty for days on end. This shows that,
merely the location of a restaurant affects its business so greatly.
4) Hiring and Training: No venture can
be successful without a good team.
More specifically, in the case of a start-
up restaurant, the team is required to
be extremely passionate and
attached to the project, because
there is no guaranteed success. Start-
ups involve a major risk element, but
with a strong team of competent
members, sky is the limit. After hiring an
experienced staff, they are required to
be trained, in order to face customers on a day-to-day basis.
5) Marketing: Once the idea has been
put into action and the restaurant is
ready for launch, marketing begins.
Marketing is important to draw the
attention of the target audience to
the restaurant, build a large consumer
base and gain loyalty of these
customers over time. One can market
their restaurant by using social media
platforms, advertising on television,
providing freebies to customers and
other such activities that attract the target audience.
In the initial phase of the business, it is
rare to make large profits. At this
stage, it is most important to build the
name of the brand and serve the best
quality of food consistently. It is a risky
business, since the competition is
abundant, but an innovative business
idea backed by a strong team is the
recipe for success. The point to
remember is- to BE UNIQUE. There are
too many restaurants doing the same
thing, for yours to stand out amongst
theirs. As Ray Kroc, the Founder of
McDonald’s said “If I had a brick for
every time I’ve repeated the phrase
Quality, Service, Cleanliness and
Value, I think I’d probably be able to
bridge the Atlantic Ocean with them.”
The unique selling point of McDonald’s
is quality service, cleanliness, and
value for money, and that is what
made Ray Kroc’s McDonald’s venture
an overnight success. And could maybe, make yours too.
18
Van Gogh might have not thought about his economic aspirations while painting but
eventually it became a business. Minakshi Singh attempts to look beyond just the figures in a
painting.
So you thought Economics and Arts is
not bound to be a joint entity? Well,
the most probable notion held by the
majority is that economics is
associated with the day to day living.
However, the realm of it is not
confined to it but has a profound
impact on many spheres. Its vastness is
unparalleled. It influences the
sociological and cultural context too,
thereby affecting the idea of art and
literature. Economics and Art might
sound vague together but art heavily
depends on the economic strategies.
It doesn’t indicate that every piece of
art depends on it but the ones which
possess symbolic and creative content
do. They include museums, paintings,
performing arts, library, historic
buildings, archaeological sites, cinema
and music publishing. Classical
Economist Adam Smith once stated
that it is impossible to value cultural
goods. While the value for other goods
vary because of the marginal utility
attained from it, the value for cultural
goods have an opposite effect as
more consumption yields more utility.
There is no depreciation in it as the
consumer looks for quality more than
quantity.
Cultural goods are increasingly
becoming important components of
the modern-economy and
knowledge-based society. The most
frequently invoked argument is that
art, whatever its form, is a public good.
It benefits not only those who attend
or see it, and who pay for it, but also
benefits all other consumers, who do
not necessarily wish to contribute
voluntarily to its production or to its
preservation (sometimes because they
are not yet born), and free-ride.
Maintaining this heritage obviously
implies costs, and these costs are
increasing. The huge differences are
largely motivated by the hierarchy of
genres in the artistic culture of the
time. Economic reasons made new
19
artistic genres not only to develop, but
also to flourish in this and the following centuries.
Art investments have a huge rage and
are widely considered as a wise way
to make money. Economists are of the
view that it is essentially preferred by
the super-super rich crowd and they
call them as Ultra High Net Worth
Individuals (U.H.N.W.I). Benjamin
Mandel, an economist at the Federal
Reserve Bank of New York, has been
studying the art market and, he says,
“It’s a great way to study asset price
valuations. The art market has
experienced several transitions in
many aspects of the economic
activity. Moreover, the bandwagon
effect caters to larger audience since
it’s a conspicuous consumption and
there is competition in aesthetics. It is
believed that the arts could prosper
only under conditions of collective
ownership of the means of production,
either through conversion to a socialist
state or through a communist
revolution. But the income distribution
of artists is also markedly skewed and
there exist superstars, whose earnings are impressive.”
The sixties and seventies saw a
growing market for contemporary art
which blossomed with the auction in
1973 of 50 art works (paintings and
sculptures) by contemporary art
collector Robert Skull. The total
revenue gathered by the sale was
$2,200,000 including $240,000 paid for
Jasper John's "Double White Map"
(1965) and $180,000 paid for Willem de
Kooning's "Police Gazette" (1955).The
big sales of contemporary works by
living artists continued through the
eighties, peaking with the sale of de
Kooning's "Interchange" for $20.7
million in 1989, a year which witnessed
the sale of Van Gogh's "Portrait of
Doctor Gachet" for $82.5 million.
Many economists say that art can’t
be in a fizz because, frankly, it’s not
much of an investment in the first
place. Unlike stocks, an artwork’s price
reflects numerous non-financial
intangibles, like the pleasure of owning
a painting or, perhaps more important,
its ability to signal the owner’s vast
wealth and erudition. While stocks can
provide an ongoing payment stream
(via dividends) and are traded in
public markets, art collectors must pay
to protect their investments. It’s also
much harder for collectors to resell
expensive art. Not only is the market
opaque, but few artists having real
long-term value — Jasper Johns and
Andy Warhol are rarities. Sergey
Skaterschikov, who publishes an
influential art-investment report, says
that no painting bought for $30 million
or more has ever been resold at a
profit.
Between 1929 and 1945 the art market
was branded by the consequence of
the depression, followed by the
Second World War. Then, in the late
nineteen fifties, a new sort of art
market established, in which
according to Reitlinger, buyers looking
for old masters surpassed the available
supply and turned their attention to
"the inferior prizes" thereby bidding up prices.
The trend of art overlapping with the
economic effect is perhaps of cyclic
nature. One might deduce that the
motive of art is to emphasize visual
inclination whereas its business has a
secondary share is not true.
The association shared by Economics
and Art is not ambiguous or elusive. Art
involves Value and Economics studies
Value and this is enough to prove their affiliation.
20
Religion is the opium of people. But opium has a price and so does religion. And everything
that has a price has a market. Damini Kane’s analysis.
When Marx compares religion to opium,
he’s basically saying that it’s something
you can buy in dark alleyways. It’s
something you get addicted to,
something you get high on. It’s something
that can be sold. And, as Kanji Lalji Mehta,
the main character in the movie OMG: Oh
My God points out, it’s a business that
won’t ever have a recession, because
when times are tough, people empty their
wallets before god, begging for divine
intervention.
Well, if religion is a business, it stands to
reason that it adds to the economy. In
fact, I would go so far as saying that god is
an integral part of the Indian financial
system (and not just because hope and
faith are the only things keeping it afloat).
Let me give you an example. About 230
million tourist trips are undertaken in India.
The largest proportion of this staggering
figure is religious tourism. In fact, studies
show that holy places are more popular
tourist spots than beaches or hill stations.
As fascinating as tourism is the holy
influence in retail. After incessantly
pestering the manager of a popular retail
outlet for about a quarter of an hour, this is
what I learnt: the outlet sells around six to
seven different brands of incense sticks
(agarbatti), out of which their most
expensive brand, Hem, exports their
products to 60 other countries! The
religious department here, which has
special offers during festivals, also contains
dhoop sticks (deluxe ones, no less) and
chandan tikkas, both of which are
exported too. Faith transcends borders
and our imaginations of its economic
worth.
In June 2011, an inventory of the vaults of
the Padmanabhaswamy temple in Kerala
once again challenged our imaginations.
Gold, jewels, Napoleonic era coins, a
ruby-and-emerald studded three-and-a-
half feet tall gold idol of Mahavishnu, a
gold anki weighing almost 30 kilos, gold
coconut shells: these were just some of the
valuables found. The estimated value of all
of this wealth that makes it the richest
Hindu temple in the world is 18 billion US
dollars. That’s 18 billion US dollars lying
stagnant and adding nothing to the
economy. That kind of money would wipe
out one-fifth of the fiscal deficit, but
experts are divided as to the effects
(mostly inflation) of a sudden influx of
wealth into an economy.
But why stick to only Hinduism? TheWakf is
a religious endowment under Islamic law.
It is a permanent donation of immovable
properties for charitable or pious reasons.
In India, the Central Wakf Council
administers the country’s State Wakf
Boards. These boards are bodies that have
the power to acquire and hold property
for religious or philanthropic purposes. The
Sachar Committee headed by Justice
Rajendar Sachar, prepared a report on
the Muslims in India in 2011. This report
stated that nationwide, wakf properties
constituted of land worth Rs. 1.2 lakh crore.
Wakf properties by and large represent
lost potential: the Sachar Committee finds
that these properties could have
generated revenues worth Rs. 12,000 crore
but end up generating only Rs. 163 crore.
Encroachments and management
shortages are holding back what could be
a huge driver of welfare and education
through religious contributions.
While we’re talking about it, it’s worth
mentioning that according to a report in
Deccan Herald newspaper, the Catholic
21
Church fund equals the annual budget of
the Indian Navy. The Church holds many
properties, including a huge plantation in
Kerala worth Rs. 123 crore. Some estimates
even say that the Catholic Church is the
largest employer in India after the
Government of India. The debate on who
should manage Church properties points
to an old one in economics: whether the
economy is better managed by the state
or by communities on their own.
Proponents of the church point out the
good work done with all the money: the
setting up of countless schools and
hospitals and rescuing people from the
Uttarakhand disasters. Proponents of the
state contend that transparency and
accountability cannot be compromised –
but are countered with accusations of
governments being “too corrupt”.
Similarly, zakat, or alms-giving, is an Islamic
concept where giving charity to the poor
and needy is an obligatory thing to do for
every Muslim who is able to do so. It is
considered a personal responsibility for the
Muslims to help ease the financial burdens
of the others. (2.5% of one’s savings must
be given as zakat.) Giving zakat is a way
of purifying one’s wealth and soul.
Apart from the fact that this is a heart-
warming ideal, it’s also, economically
speaking, brilliant. In the Qur’anic view,
zakat is a way to redistribute wealth, thus
increasing the cash flow in the economy
and creating a sense of financial equality.
What is becoming clear is that people’s
hearts are big and their pockets are deep
when faith is concerned. Lalbaugcha Raja
is the most famous Ganapati idol kept at
Lalbaugh. There’s an auction that’s held
every year, called the Lalbaughcha Raja
auction. Now, just to intimidate the senses
out of you, I’m going to give you some
figures. In 2012, despite the economic
crisis, the Lalbaughcha Raja mandal
received over ₹ 8.16 crore, in just
donations. They received 13 kilos of gold,
including a golden football. Once again,
this is just donations. The actual auction
itself received over₹ 2.47 crore. People
spend in the lakhs at this auction. Where
does all that money go?
In 1999, the mandal donated one lakh to
the Army Central Welfare Fund for the
families of soldiers who lost their lives in the
Kargil war. It started a Dialysis Center
where one could get a dialysis done for
only a 100 bucks. It’s also set up a Medical
Aid Scheme and the Lokmanya Tilak
Computer Training Institute. One wonders
if such huge amounts would have been
raised for charity if God wasn’t involved.
The bottom line is that religion and
economics are invariably tied together
because both have such an enormous
impact on human lives. It is impossible to
conceive what redistribution would have
looked like without faith and what faith
would be like without selfless giving.
They’re eternally connected, because
business is unavoidable and faith is
everywhere.
22
Advertisement commercials practically dominate our television time. Nikita Sharma explains
why.
In 2003, when certain packs of the
Dairymilk Chocolate of the Cadbury Brand
were found to contain worms in them,
Cadbury resorted to quick damage
control. A public apology and a wide
spread ad campaign that had Amitabh
Bachchan advertising the safety
procedures and assurance from Cadbury.
In 2004 when Coke (the soft drink) had
allegations of using pesticides in its
chemicals, Aamir Khan did to Coke what
Amitabh did to Cadbury. But on the other
hand, when Horlicks, as part of its
advertising strategy, made promises to
help kids get taller, sharper and stronger, it
spelled doom for the company. The claims
were challenged and subsequently
falsified. Advertising can make or break a company.
Basically, what advertising does is that it
creates a desire for a product that you
may or may not need (mostly you don’t
need it), highlights the chief features of the
product in the ad and persuades you to
buy it. Thus, it majorly affects consumer
behaviour; it is largely responsible for what
consumers buy, when they buy it and how much they buy it.
For example, Cadbury India airs its
advertisements throughout the year but
they heavily advertise during festivals like
Rakshabanshan and Diwali, making it a
symbol of sharing happiness and thus the
product has witnessed substantial amount
of increase in its sales during the festive period.
'Necessity is the mother of invention' is an
often-quoted saying. But nowadays the
reverse of it is truer. In modern business,
'invention' is mother of necessity. It is
through advertisement that people begin
to feel a need for even those goods of
which they had never heard of before.
Advertisement is what makes commerce
and industry go round today, and what
gives it the huge volumes of sales they have.
Another example of heavily advertised
products resulting in increased sales is the
huge demand for fairness creams in India.
We live in a country where people have
varied skin colours with each having its
own beauty. Yet, our notion of beauty lies
in the fairness of a person’s skin colour. To
promote this kind of stereotype,
advertisements endorse all kinds of fairness
creams, fairness face washes for both men
and women since 1978 and now even
vaginal wash! In the market of fairness
creams, Unilever’s “Fair and Lovely”
outdoes every other fairness product and
rules the market undisturbed. In fact, in
India, fairness creams are the most bought product followed by soft drinks.
Advertising as an industry has seen a
steady growth in India. Consumers
encounter advertising messages as they
watch TV, read magazines, listen to the
radio, surf the internet, or simply walk
down the street. And the associated
advertising expenditures can be huge.
What, then, do economists have to say
about advertising? Up until the late 19th
century, this question had a simple answer:
nothing. This is not a trivial omission
because advertising has an enormous
effect on the market. In any textbook
example of perfect competition, all goods
are homogenous and all consumers are
informed. In this world there is no need for
advertising because consumers know
everything there is to know about the
market. Likewise rational actors would not
be swayed by marketing ploys or
information irrelevant to the product.
Advertising, then, provides a serious
counter to the notion of consumer
sovereignty, for is a consumer truly
sovereign if she is played upon by the industry through advertising?
23
But there’s a significant upside: advertising
helps stimulate economic growth. In a
country in which consumer spending
determines the future of the economy,
advertising motivates people to spend
more. By encouraging more buying,
advertising promotes both job growth and
productivity growth both to help meet
increase demand and to enable each consumer to have more to spend.
In India, companies like Hindustan Unilever
spend a great deal on advertising.
Unilever has brands like Dove, Elle18,
Brooke Bond Tea, Bru, Kissan, Knorr, Lakme,
Lux among its 37 brands. It is closely
followed by Cadbury India which has
brands like Tang, Oreo, Bournville, Eclairs, Bournvita, etc.
But throwing huge amounts of cash at
advertising agencies is not the only thing
that works. Amul is a brand whose different
approach to advertising didn’t only gather
critical appreciation but also made a
permanent place for itself in the butter
market. In the 1980s, cartoon artists Kumar
Morey and script writer Bharat Dabholkar
had been involved with sketching the
Amul ads; the latter rejected the trend of
using celebrities in advertising campaigns.
The Amul girl and Utterly Butterly Delicious
campaign proved to highly successful in the Indian market in every segment.
Companies spend money on advertising
because it increases sales of existing
products, helps grow adoption of new
products, builds brand loyalty, and takes
sales away from competitors. Although the
exact return on investment (ROI) varies
tremendously across industries,
companies, campaigns and media
channels, studies have found that
whatever money is spent on advertising
returns up to as much as three times in
additional sales. To compete and grow in
today’s diverse, ever-changing
marketplace, businesses must reach their
target customers efficiently, quickly
alerting them to new product
introductions, improved product designs
and competitive price points. Advertising is
by far the most efficient way to communicate such information.
That’s not where it stops: the economics of
advertising extend to the media channels
that depend on advertising revenues.
Many forms of advertising support the
creation of content and make that
content available at a much lower price
(or for free). For example, roughly 75% of
the cost of a newspaper is supported by
advertising. If newspapers contained no
advertising, they would cost four times as
much to buy on the newsstand. Broadcast
radio and TV rely exclusively on ads—
people get news, music, and
entertainment for free while advertisers get an audience.
Advertising on Facebook and other social
media sites that takes into account the
trends and preferences of the users has
led to this adage being true: If if you aren’t
paying for a product, you are the product being sold.
Forms of media that the public takes for
granted would be extremely expensive to
the consumer or the producer would
simply be out of business without the revenues advertising produces.
In India, even in a period of economic
downturn, a double digit growth is
expected in the advertising industry. This
trend has been present for the past 10
years. At present the growth has come
down but past figures have shown a
growth of around 13-14% which is good
enough. This means that advertising
professionals won’t be that affected by
recession as those working in financial
sectors would be and if we look at
advertising with relation to its GDP, there
has been a lot of growth; it has a huge amount of potential and a bright future.
Thus, to sum it up, we can comfortably say
that advertising increases the economic
growth of a nation. Effective advertising
leads to higher demand which in turn
leads to higher production of goods and
services and this increase in production leads to higher GDP.
24
Being physically challenged is tough. But scarce support from the government becomes even
tougher. Prahniika Borkar has traversed from a tourist to a temporary handicap in
Netherlands to discover the benefits of being a handicap there.
Terse writing? Uh,Yes.
Numerous number columns: Yeah.
The only pictures are graphs? Oh god
Yes.
Correct Answer: Economics. *Applause*
Economics is more than just graphs and
formulae and “study till you know the
market”-ness. It’s all encompassing and
pretty fantastic when you realise you can
tweak it to make it yours. This article is
doing just that. Through the studiously
sturdy glasses of economics, it compares
two diverse countries and culture by
weaving them in on one strange aspect, the condition of the handicapped.
India and Netherlands. I was lucky enough
to be in Holland last month and fortuantely
or unfortunately I fractured a leg, and
amidst a camera, sunglasses and coffee
cups, I was also thrusted with crutches. The
trip didn’t stop there and I got to live in
Holland like the disabled. Then I saw it.
Something that had slipped my eyes when
I was jumping joyfully and uninjured. This
became more evident in hindsight when I
returned to India and the glaring lack of it
showed me what an incredible country
The Netherlands was. There was a fully
equipped infrastructure created especially
for the disabled. You could be on crutches
and be as normal as the person next to
you who was walking. Lovely roads,
frequent slopes for wheel chairs, lifts at
every train stop; generally a public system
more (fully or partial) invalid friendly. On
further research, I discovered that the
benefits of being handicapped were so
humongous from the state that you were
brought on par with the normal citizen.
There is the AWBZ act(national act on
exceptional medical expenses)that covers
long term handicapped health issues and
the public insurance companies
collaborate directly with the hospital so
there are no hidden costs to be incurred;
there are designated institutions that look
into creating private accommodation and
transport (on state money) to
accommodate your handicap; domiciliary
care institutions provide disabled people
all the care they need so they can live
independently and still be completely
cared for; there is complete provision in
transport for disabled including getting till
the buses or trains with wheelchairs
available, there are also Vals that can be
booked for areas to which there is no
public transport. That is to say, positive
discrimination is so high that it achieved
what it was set out to do, bring equality like professed in utopia.
Back in India, reality hits you. Walk
gingerely on a pavement that you share
with vendors, the statistical poor and the
monsoon's spoils. Your transport option is
bus stops upto two kilometres from your
house. Of course you may take a rickshaw
to the station, but how are you going to
get into the train? There's no easy way to
cross roads without a designated crossing,
lane, or traffic rules. Sure there's reservation
in public transport for the disabled, but
how do you get till there and on it, well that's a mystery.
There are schemes whose permeability is
questionable. If it reaches the needy; the
condition on those admitted is that they
have to have lesser than a total income of
Rs. 6,500 or maximum Rs.10,000. Medical
aid in India might not be as expensive as
that of developed countries but beyond t
he doors of a municipal hospital,
consultancy is an expensive affair. The
disparity between a government run
hospital and a private hospital is vast in
both cost and treatment. If you don’t fit
into the narrow bracket of Government
aid (statistically proven to reach only
90%of the target population) and the
surplus moneyed class, your options in the
poor to middle class are few and costly.
Respite to medical costs to an average
Indian not in the cream class is insurance,
but this is again a scarily dear affair for the
handicapped, with an extra premium
25
depending on the handicap. Mostly the
insurance does not even cover the
handicap and related treatment. LIC has
two options of insurance, which don’t
have perfect reviews because of high
premiums and differing hospital charges
(doesn’t always cover the entire costs
borne) but well, something in better than nothing right?
At this point I’m going to get farfetched,
with due permission. Let’s look at the
growth rate of the Developed Netherlands
and the Developing India. 0-2% and 2-6%
respectively. Yes yes we know why, we’ve
studied it. But let’s look at it objectively
with regards to potential. India is growing
because it has so much ground to cover.
It’s also growing because its people know
they don’t have an option. The Dutch on
the other hand are comfortable with the
stability they are guaranteed.
Unemployed? Public service gets you a
stipend. Old? Government gives you
pension. Young? Schooling is taken care
of. Unfit medically and can’t afford to
pay? Yeah, don’t worry. Ask these same
questions in India and probably your
answer, with almost complete certainty, will be: Your problem.
This attitude is also what helps India survive
and recover from recession. This non-
dependence that our able government
has instilled in the average Indian works
like buoyancy helping us bounce out of
detrimental situations, even as the
bureaucrats ponder about which bond works best.
India was not severely affected by the
2008 recession that caused one A to
tearfully drop from Uncle Sam’s precious
AAA. The so-called stability of Europe’s
best countries was also reconsidered.
Netherlands on the other hand has seen
three cycles of recession post that period.
The strains of the recession are clearly
visible to the average Dutchman. It’s
easier to be a dependant here, because
the government as a whole is expansively
equalising. Indians know that they have to
get themselves out of the hole that
external factors have dug them into, and
strive to make the most out of what they
have. Strife is India’s starting point, where
comfort is Netherlands’. Historically while
Holland has splendid artist stories, India has inspiring rags-to-riches stories.
In a humble, reinstative conclusion, this
article wasn’t meant to prefer one country
over another. It wasn’t meant to change
the future of economics either. It’s just a
thought to consider. That within all the
statistics that is economics and finance to
the outside world, the heart that drives it, is
not mathematical. We can read and
include incomprehensible jargon in our
language all we want, but if all we see is
charts and policy proposals, we can’t
study economics like it should be studied.
This said, I end with a graceful keyboard
pirouette, hoping that the beauty of
economics reaches you and your next
examination paper. Good luck and happy walking.
26
EVENTS OF THE YEAR
THE ARTHANOMICS TEAM
TRIP TO GOVARDHAN VILLAGE ECONOMICS CONVENTION TEAM
LONALAVA TRIP & FAREWELL PARTY
27
The Economics Association of Jai Hind College has an official logo now! Why, you
ask? It all began with the achievement of our ultimate dream – starting an
Economics festival in this college. Arthanomics is the beginning of a really bright
future for this association, and it’s only fitting to have a logo to show how we
students are and what we’re are capable of. Therefore, the logo is a combination of
two very simple concepts – idea and implementation. First, the light bulb symbolises
what one may call an “idea bank”. We’re always thinking of new ways to ensure
that various activities are held which will help the Association and its members excel
in one way or another. But what makes this ‘light bulb’ work? The students, of course!
The brightness of the light is depicted by adjectives that describe the members of
this wonderful association – Enterprising, Curious, Optimistic, Numerous,
Opportunities, Meticulous, Innovative, Coordinated Students! Perfect recipe for
success, yes? Subtle but obvious message – these adjectives start with the alphabets
of the word “Economics”.
So that’s everything about the emblem of the Economics Association. Here’s hoping
that every future member is the embodiment of the above description for years and
years to come!
- Nihaarika Ravi
28
Dreams come true. The Economics Department at Jai Hind College truly lives by this
adage. Having always envisaged harbouring and nurturing the acumen of and love
for Economics among the students, the Department assisted by the Economics
Association organized Arthanomics – An Intra College Economics Fest. Spanning
over two days with a variety of events ranging from fine arts to literary arts, all with
an economic base, Arthanomics saw 150 economic enthusiasts participate wholly and eagerly.
Economics Seminar: The fest started with an Economics Seminar which was based
on the Theme – Social Entrepreneurship. Based on extensive research, 4 groups presented papers on the following topics:
Social Entrepreneurship in Finance
Social Entrepreneurship in Healthcare
Social Entrepreneurship in Social and Human Capital Social Entrepreneurship in Environment
Each group was required to prepare a research paper on their respective topic and
then make a presentation of the same to the judges. Post the presentation;
questions were entertained from the audience and judges. The seminar saw
students taking part enthusiastically in a topic that is more relevant today than ever
before- Social Entrepreneurship. Some students expressed their desires to start their
own social venture and some to start a venture to support social ventures. Issues in
this area of business were raised but constructive solutions were deliberated upon too.
Taking a leap from the previous years, the seminar incorporated a competitive
aspect. In order to motivate and stimulate the students’ enthusiasm and enable
them to operate in an environment infused with healthy competition, several awards
were announced prior to the event. The Best Paper (Written) and Best Paper
(Presentation) was won by Social Entrepreneurship in Social and Human Capital. Aanchal Jain (TYBA) won Best Speaker.
The event was judged by the Ex-HoD of the Economics Department Mrs. Suri and past secretary of the Economics Association Karanjit Narang.
Book Review: Someone rightly said, If there ever is a book that hasn’t been written
then maybe you should write it. But whether a book has been written or not can be
known only once you read it. All the book lovers got a chance to critique, discuss
and objectively analyse their favourite book. This year, the horizon of topics was
expanded to include an array of topics right from feminism to psychology to environment.
The students participated enthusiastically in the event. As instructed, none gave
away the important details of the book but gave away reason why one should read the book. The Books reviewed were an eclectic mix comprising of:
Lean In – Vishaka Wadhwani, Shreya Samant and Minakshi Singh
But Will The Planet Notice – Siddhant Sharma, Dhara Shah And Nikita Sharma
May You Be The Mother Of A Hundred Sons - Bineet Hora And Aishwarya
Sawarna Thinking Fast And Slow - Vishnu Kumar, Hamza Mir And Anay Kaundinya
29
Vishnu Kumar (TYBA) was adjudged the Best Speaker while Bineet and Aishwarya
(TYBA) bagged the Best Book Review prize. This event was judged by some of our proficient and brilliant ex-students: Kinjal Shah, Achla and Karanjit Narang.
Quiz: The economic acumen of the students was further tested via a quiz round. The
participants were put through 5 rigorous rounds to find the brightest economic
brains. On popular demand, the ex-students were allowed to participate too. Using
their natural advantage of age and thereby a relatively higher practical exposure, ex-students Gaurav Dutta and Sharang Shah emerged as clear winners.
Essay Writing Competition: Words are a lens to focus on one’s mind. It gives great
insight into the mental construct of an individual. And what better way to gain this
insight than an essay composition! Seeking solutions to one of India’s most inherent
and critical problems: The Rural - Urban Divide, students were asked to pen down
their views on Where does India’s future lie? Rural or Urban. Kartik Jaishankar (FYBA)
bagged Best Essay prize.
Poster Making: To give recognition to the creative aspect of students, a poster
making competition was organized wherein students were asked to submit posters
on the topic: Scams around the world. The posters were given in before the fest
began and were judged by Karanjit Narang. Recognizing the onslaught technology
and the imperial role it plays in our lives, digitally designed posters were accepted
too, apart from handmade ones. Sakshi from FYBA was judged to be the best from
amongst 13 others.
JAM: Just a Minute also called as JAM was the concluding event at Arthanomics,
2013. ‘Dismiss the stage fright in you’ was the sole aim of this event. Given a few
words and 1 minute of prep time, participants had to build a connection between
the words given to them and speak about it for a minute. Utsav Babel from TYBA was
adjudged to be the winner for spontaneity and wit.
The fest concluded with the valedictory ceremony wherein certificates were given
to all the winners and participants. All organizing members were acknowledged for their indispensable contribution in organizing Arthanomics.
All in all, Arthanomics was a milestone for the Department and the Association which
had long envisioned of having an Economics Fest in Jai Hind College. The Fest
ended with an address from the Secretary of the Economics Association, Kruttika
Raman, calling on the juniors to maintain the spirit of Arthanomics and take it to newer heights.
- Aanchal Jain
30
- Sumati Sapru’s Team
The sheer quantity of capital moving to
help solve social problems is staggering. In
2009, the worldwide capital flowing from
wealthy countries to developing countries
topped $476 billion. Of these funds
approximately 75% came from
philanthropy, remittances, and private
capital investment, while governments
contributed the rest. A much broader
opportunity exists if one also considers the
market for “socially responsible” products,
social change work, and socially
responsible investing. The relatively new
term social capital has emerged to
describe this market. Even with increased
attention focused on this sector,
determining the actual size of the social capital market is challenging.
Renowned former Goldman Sachs
executive, David Blood, notes that asset
owners and managers representing over
$8 trillion are recognizing that
environmental, social, and governance
factors drive value creation. Hope
Consulting estimated the opportunity at a
more modest $120 billion. Regardless of the exact size, we know it is massive.
Historically, funds from individual donors,
personal relationships, and large
foundations provided the means to fund
social ventures. Now, a much more nimble
system is evolving—a system based on
impact, technology and transparency.
Microfinance models, Internet-based
funding, and innovative partnership
approaches are providing new solutions to
limitations posed by traditional capital
flows. While these are not a panacea for
solving the challenges of funding, they are
giving a tremendous boost to the capital
available to this market and, more
importantly, providing much-needed
innovation in the field. When taken in their
entirety, the funding and financing
opportunities are larger than ever before.
Capital is moving in new ways and
organizations are responding with
remarkable innovation. The purpose of this
paper is to highlight some of the
innovations and trends in the field of social entrepreneurship.
Within the Indian context, the main
sources available to social entrepreneurs
for their finance needs are microfinance
institutions and the unorganised money
market. This is due to the fact that their
history has shown a lack of credit
worthiness and other sources of finance
are hostile to their needs. These sources
are plagued with problems like high
interest rates, low repayment
percentages, and especially in the case of
the unorganized money market,
exploitation of the borrowers. There is also
no end to the scams associated with these sources.
In the international context however,
social entrepreneurs have faced a much
friendlier environment with new
innovations catering to their financial
needs, such as impact investing and social
enterprise lending. Impact investing is a
term that refers to a broad array of profit-
seeking investment strategies that
generate social and environmental good
as well as a strong financial return (it is also
known as social capitalism and
philanthrocapitalism). Social enterprise
lending on the other hand is a form of
social finance that refers to the practice of
offering loans and other financing vehicles
below current market rates to social
enterprises and other organizations
pursuing social goals. Given the sheer size
of the opportunity, much attention is being
paid to these approaches. Many large
banks, financial institutions, and
foundations are interested in the success
of this emerging approach. Massive
amounts of previously unavailable capital
are accessible to entrepreneurs who are
blending for-profit financial models with positive social impact goals.
Some progressions in the fields of social
media, transparency and cross-sector
partnerships have given a boost to the
social entrepreneur’s funding solutions. The
rise of connectivity across the globe is
31
fuelling unparalleled access to
entrepreneurial capital. With nearly one
billion users across the globe, Facebook
has been credited with helping activists
topple oppressive governments, catalysing
donors, and building social connectivity
among those never previously connected.
As a result of advances in technology, a
wave of new giving opportunities has
emerged, thus changing and
decentralizing the capital market for social
ventures. With these changes in
technology, organizations now face new
requirements for transparency in the work
they do. Also, while not necessarily new,
cross-sector partnerships are blossoming.
Corporations, non-profits, and
governmental entities are collaborating to
a degree never seen before. This
blossoming of partnership presents some
incredible opportunities for social sector
entrepreneurs and for the funding of social
ventures. Corporations have resources
beyond the imagination of many non-
profits. Non-profits have brand credibility
and flexibility that are the envy of many
corporations. Governments typically have
neither vast financial resources nor
flexibility, but they do have immense
regulatory power that can be harnessed
by non-profits and corporations to contribute to society’s betterment.
The field has also witnessed the
resurgence of the mega-foundation.
Much of the history of philanthropy is
dominated by mega-foundations such as
the Bill and Melinda Gates Foundation
and Rockefeller. Over the past 200 years,
these foundations have poured billions into
improving society, building libraries,
enhancing universities, forging advances
in health care, and many other worthwhile
causes. Today, the combined assets of the
world’s 25 largest foundations total about
$220 billion. It is worth noting that large
foundations will continue to be a critical
and enduring source of financing for social
sector entrepreneurs. In fact, 40% of the
larger foundations were formed in the last
10 years. With the recent commitment of
some of the world’s wealthiest people to
give half of their fortunes to charity, the
amount of money pouring into foundations will likely accelerate.
It is an exciting time to be in the field of
social entrepreneurship. Never before
have we had such a powerful
coalescence of forces where impact,
profitability, funding sources, and public
interest align so seamlessly. The field has
billions of dollars flowing into it—clearly
investors have a growing need for impact
and are impatient with rigid institutional
giving structures. For today’s entrepreneur,
it may be the case that leadership and
strategy are the primary limitations rather
than funding sources. Funding appears to
be becoming infinitely more flexible and
responsive to the needs of the entrepreneur.
The common opinion about any enterprise
in the social sector was that it was
unprofitable, and as long as it survived
and fulfilled its social function, the job was
done. However, after the reading and
research we conducted, we have had a
vast change in our outlook. Innovations
such as impact investing and social
enterprise lending have proven that social
enterprises are now becoming more and
more self-reliant. This has opened a huge
scope for expansion and betterment for
the sector. For the social entrepreneur, this
presents a remarkable opportunity to
change the world in ways never before possible.
32
- Vasudhaa Ahuja’s Team
‘Environmental Entrepreneurship’ refers to
the process of creating, discovering, and
executing innovative solutions to
environmental challenges, often through
the means of ‘for-profit’ ventures.’ Social
Entrepreneurship can be studied in
relation to various global environmental
challenges, namely – global warming and
loss of biodiversity, the energy crisis and,
the food shortage and water crisis. These
are the direct results of human
exploitation of the Earth’s natural
resources, and in turn serve as the major
causes of ecological imbalance and
global warming. With increasing
environmental concern among nations
and its citizens, it is upon businessmen to
develop products and services that can
reduce the impacts of these pressing
environmental issues.
Describing itself as a global science
company, DuPont, the 3rd largest
chemical company in the world, along
with General Motors is essentially the entity
that invented the dangerous ozone-
depleting substances primarily used in
aerosol sprays and refrigerants that we all
know today as Chlorofluorocarbons
(CFCs). Once it was proven that CFCs
were harmful to the Earth’s atmosphere,
DuPont pledged to stop producing them
entirely, and direct its efforts at countering
their adverse effects. It subsequently
moved focus to developing technologies
with respect to sustainable development.
DuPont even won an award for being the leader in developing CFC replacements.
The two defining inventions of the 20th
century are without a doubt the internal
combustion engine and electricity.
Without either of them we would not live
the lives we do today. Unfortunately, the
world is fast running out of conventional
ways to power our engines and light our
bulbs. The end of “easy oil” combined
with the volatile state of the oil rich Middle
East has pushed oil prices to dizzying
heights off late. Fortunately, the world is
blessed with a host of companies that
understand how crucial it is to address
these issues and are striving to find
renewable, non-conventional and
innovative alternatives to our rapidly depleting conventional energy resources.
Solar energy is one of the most important
forms of energy due to the vast amounts
of it the earth receives. Our research
showed that companies in this field,
despite using similar methods of
harnessing solar energy, have had varying
levels of commercial success. Solyndra, a
social enterprise found success after
keeping up with the market and keep costs low just like a traditional business.
Biofuels can be used to power existing
engines with almost no modification, and
can be manufactured cheaply and easily
from existing feedstock. While Hybrids
vehicles are by no means a permanent
solution to energy crisis, they offer us a
chance to buy time and better use what
precious few resources we have while we
still can. Hybrids are often criticized for
their poor on road performance but the
latest breed of them is anything but slow
and boring. Porsche, Ferrari and McLaren
all have announced their hybrid hyper
cars.
The need at present is to make energy
alternatives like these commercially
successful. In terms of entrepreneurship,
the market for sustainable energy
alternatives is extremely attractive since
there is enough room for creativity
accompanied by adequate demand for
economical and environment friendly products.
Food shortage: Food security is one of the
major global issues due to confluence of
various factors. Increasing population has
led to high pressure on land with other set
of problems like limited access to water,
increased cost of fertilizer, fuel for storage
and transport. The major reason for this
problem can be traced back to the post
war ‘second –agricultural revolution’ in
developed countries and the ‘green
revolution’ in developing nations has
33
raised crop yields dramatically but does
not meet the projected demand. Change
in consumption patterns and increased
appetite of meat of countries like India
and China as well as erratic climate change has added further to this crisis.
An innovative solution to this problem is
Aquaponics. Essentially a sustainable food
production system, Aquaponics is a
combination of aquaculture and
hydroponics. Aquaculture refers to raising
aquatic animals, while Hydroponics is an
environmental alternative of cultivating
plants in nutrient-rich water, without any
soil. In this integrated system, fish and
plants are cultivated together in a
sustainable, soilless and symbiotic environment.
We see that developing food substitutes
that are cheaper and rich in micro as well
as macronutrients can decrease
malnutrition. An example of this is “Solae”
– a sustainable soy protein produced by
DuPont, along with an NGO (Gift of the
Givers Foundation), and local growers,
producers and distributers turned Africa’s
local groundnut crops into a ‘high-energy,
nutrient-dense’ protein supplement.
Named Subusiso (meaning blessing), not
only does this product feed the people of
Malawi, but also stimulates the country’s
economy by its production and distribution. Moreover,
The Severity of the World Food Crisis has
compelled Governments, international
organisations and Companies to work out
its solutions as soon as possible. If not dealt
with quickly and effectively, food crisis will become the next big disaster.
Water Crisis: "Water is everybody's
business" was one the key messages of the
2nd World Water Forum. With only 0.007%
of the Earth’s water available to fuel and
feed almost 7 billion people, water
shortage and therefore it’s serious after-
effects are inevitable. We are fortunate
that several global entities realize the
severity of the problem and have started
taking steps in the right direction. A few of
these entities namely AquaPro and Village
Forward Inc. have worked towards
innovation in water management and
conservation. AquaPro introduced a
planting technology called Groasis
Waterboxx, which is a league ahead of
other plantation technologies. It works
towards not only water management but
also reforestation and increased revenues
with cost effectiveness. On the other hand
The Village Inc. has got something solely
working towards water conservation with
locally produced water ceramic filters
called Aquasifs. This is advantageous for
the local communities producing it as well the major aspect of water management.
With this we see that Environmental
Entrepreneurship is an extremely diverse
and widespread concept. So what is it
that drives environmental
entrepreneurship? Given that there is an
inherent difficulty in starting one’s own
company accompanied by the low
success rate of new ventures, why would
an individual choose the path of environmental entrepreneurship?
On a personal level, an individual will
engage in such an activity, if he has a
passion for a specific aspect of the
environment, and he sees an opportunity
in the economy with which he may
harness the potential of that aspect. There
are also a number of economic incentives
to environmental entrepreneurship.
With Environmental Entrepreneurship we
understand that sustainability is 2 fold.
Engaging in sustainable development
does not simply refer to the maintenance
of a healthy environment now and in the
future - but it also means ensuring
economic stability and maintenance of
finances for conservationist activities, else
we will not be able to reap the benefits of
our efforts. After all - what is the point of
taking eco-friendly measures, when one
doesn't have the finances to sustain them?
It is becoming more and more evident
lately that environmentally efficient
business models are the new trend
because with the rapid advancement of
technology and infrastructure,
accompanied by constantly evolving
lifestyles, it is crucial to embrace the
fundamental truth that economic
progress and conservation of the
environment go hand in hand.
34
- Aanchal Jain’s Team
Schooling, a computer training course,
expenditures on medical care, and
lectures on the virtues of punctuality and
honesty raise earnings, improve health, or
add to a person’s good habits over much
of his lifetime. Hence, they too are
considered as Capital. These intangible
aspects are broadly divided into Social and Human Capital.
Human capital cannot omit the influence
of families on the knowledge, skills, health,
values, and habits of their children. Also,
social organizations, interaction of
individuals with other factors in their
surrounding environment is intrinsic to
development of Human Capital. This
constitutes Social Capital. Thus, social
capital can help in explaining the
differential success of individuals and firms in their competitive rivalry.
Realizing the promise that Human and
Social Capital hold for a country’s growth
and its intrinsic development potential,
several enterprises have spruced up which
work in these areas. Key insights from our
paper follow from the profiling of 14 Indian
SEs. The needs of the sectors and
organizations working towards them are divided into:
A) RISE OF THE RURAL
1. Barefoot College: It aims at village
advancement which facilitated by the
guidance and supervision of the
villagers themselves as Barefoot
believes that villagers from the village
know best what they need. The idea is
to empower the rural population with
basic skills needed to work and make
a living.
2. Craftsvilla.com: It is an online
marketplace to purchase unique
Indian products including handmade,
ethnic, natural products. It connects
local artisans and designers directly to
global customers, thereby increasing
their livelihood, removing middlemen
and creating/promoting local brands.
B) THE WORKING WOMAN
1. Rangsutra: It gives the unusual taste of
entrepreneurship to some of the most
disadvantaged artisans in Rajasthan,
Assam and Uttarakhand by making
them co-owners of a 7crore company.
Rangsutra aims to generate
sustainable livelihood for crafts people.
2. S.E.W.A.: It provides comprehensive
support to poor, self-employed
women. It works towards increasing
their bargaining power, economic
opportunities, health security, legal
representation and organizational
abilities.
C) HUMAN CAPITAL AMELIORATION
1. Kautilya Phytoextract Pvt. Ltd: It seeks
to alleviate tribal marginal farmers of
Bihar and West Bengal by generating
alternative means of livelihood and
strengthening the rural economy,
thereby working towards curbing rural
migration. Leveraging ample land and
human resources combined with
modern farming techniques, the
company primarily operates in Bihar
and West Bengal.
2. Babajob.Com: It is a Bangalore-based
startup using the web and mobile
technology to connect employers and
bottom-of-the-pyramid (BOP) informal
sector workers (maids, cooks, etc.) with
the goal of creating a scalable and
profitable solution to combat poverty.
Babajob aims to do this by creating
greater market efficiency in the
informal sector through voice and web
features such as SMS, UssD and
operator manned call centres,
enabling employers and job seekers to
find each other.
D) ENABLING THE DISABLED
1. Snehadeep Trust For The Disabled: It is
a non-profit and charitable
organization working towards the
advancement and betterment of the
differently abled in the areas of
education, computer training and soft
35
skills. Snehadeep supports hundreds of
disabled high school children who are
all mentally, hearing, visually and
orthopaedic challenged. Presently, it
even supports children from
economically disadvantaged
backgrounds focusing on girl child
development and empowerment and
education of destitute women.
2. Mirakle Couriers: Aiming to provide
employment to the hearing impaired,
Mirakle Couriers was founded in
January 2009. Mirakle employs only
deaf adults. All the staff members
including delivery personnel and back
end staff are hearing impaired.
Conclusion: At the end of our research, we
found that all available evidence suggests that there is a lot that remains to be done.
Social enterprises create and fill jobs, but
there is paucity in creation of “promotional
jobs”. For example, if a migrant is taught to
drive, he can become a chauffeur in the
city. It is a job where pay increments come
with increases in the wage rate, since
experience is not an asset here. Thus there
is insufficient effort to train people for jobs
which offer greater growth and multiplier benefits.
We also found it difficult to find material
information about many enterprises that
merited mention. This speaks of a multi-
faceted information problem, for three distinct categories of people.
1. People like venture capitalists that can
help these enterprises in their
nascence, do not learn about them
until they are big enough to get
newsbytes. Aavishkar funded
Rangasutra only after it had clocked a
turnover of Rs.30 lakhs in its first year.
2. The people whom these organisations
seek to help are also unaware of them.
The reach of most social enterprises is
usually a number like 1000-2000 which
is not sufficient to sustain them. This is a
good place for the government to
step in since it could do a lot to help
social enterprises promote themselves.
3. Finally, as we mentioned, people like
us, who would like to find out more
about these organisations are unable
to do so. This will keep many
enterprises from reaching the academic world.
Also if there was a portal or directory for
social enterprises, we could have found
more of the information that we needed.
We were unable to find material
information about enterprise such as Open
Your Arms, which would have made
worthy additions to this report. Besides,
such a portal is squarely in the realm of the
doable as the MSME ministry’s stellar directory has shown.
Another fairly salient limit in outreach is
spelt out in the obvious rural bias of social
enterprises in general, and in particular
those that were within the scope of our
topic for research. There simply don’t
seem to be enough social enterprises
working in urban centres, which offer a completely distinct range of problems.
The sector as a whole seems to be pulled
in several different directions, with many
enterprises working in apparently opposite
directions. For instance, websites such as
babjob, bodhijob and justrojgar help in
deploying rural labour primarily to
openings in urban areas, in an attempt to
make migration less of a walk in a dark
tunnel than it is for a lot of people. At the
same time, an organisation like Kautilya
Phytoextracts is trying to generate
incomes in rural areas for the express
purpose of stemming the pace of
migration from states like Bihar and West Bengal.
Therefore, social enterprises would
probably create public good with or
without any major changes in the way
they function or in the way they are
perceived. However, since the
maximisation of public good is what
everyone seems to be interested in, the
sector would progress much faster if it
were extended a helping hand by higher
powers. At the same time, many of them
would do well to promote themselves
better, since publicity is worth its weight in gold with this kind of a business model.
36
- Vidhya Jain’s Team
“What exactly were Social
Entrepreneurs? And why should
anyone care about us? Well, in our
minds, we were clearly differentiated
from traditional NGOs and non-profits.
Social Entrepreneurs are problem-
solvers, not idealists. We’re driven by
innovation not by charity. And we
don’t believe in hand-outs, we use
entrepreneurial strategies to achieve
social change.”
– Linda Rottenberg, Co-founder & CEO
of Endeavor
The first thing that comes to our mind
when one says ‘social
entrepreneurship’ is entrepreneurship
to help the society much like an NGO,
where profits are not given any
attention but at the very first instance
one would not realize the ample
potential social entrepreneurship has
and how social entrepreneurs us
innovativeness and creativity to use
their profits to achieve their larger
goal, thus treating profit as an
indispensable tool for the fulfillment of
their goal. This is what we took back
after making this paper.
As Linda Rottenberg rightly quoted,
social entrepreneurs are different from
NGO’s and non- profits organization.
Social entrepreneurs do focus on their
profit motive and give it a lot of
attention but it doesn’t end there, they
use their profits as a means to achieve
their larger social and environmental
goals. This is what makes a social
entrepreneurship truly unique. Social
entrepreneurship has evolved over the
times and has moved from corporate
philanthropy to innovative, financially
viable self-sustainable ventures.
Through this paper we understood the
potential possessed by social
entrepreneurship in healthcare not
only in India but across the globe as
well. In India the scope for
entrepreneurship in healthcare is
immense, as Dr. Devi Prasad Shetty,
founder of Narayana Hrudayalaya,
rightly said India has a fertile ground
for domestic indigenous entrepreneurs.
In this paper we saw in the Indian
Context, what hurdles India currently is
facing, the environment for
entrepreneurship, government’s
perspective and how it is doing its bit
towards the promotion of social
Entrepreneurship in healthcare.
Social Entrepreneurship in Healthcare
can been seen in almost all fields
today from malnutrition, to female
infanticide, it is can even be
undertaken on a large scale as few of
our case studies are based on or even
on a much smaller scale, however we
have focused on a few cases studies
like BBB an enterprise which employs
the deaf in a highly competitive
professionally demanding courier
business, thus giving them the push to
help them to rise up to the occasion,
Swami Vivekanand Youth Movement
an innovative venture which integrates
of Ayurveda and Allopathy, to help
solve the issues that many health
development organizations run into
like sustainability and cost
37
management, Aravind Eye Hospitals,
the largest provider of eye care
services and trainer of eye care
personnel in the world, it operating on
a unity which can be found among
the doctors the staff and other
employees, working towards a single,
unified and impactful goal. Narayana
Hrudayalaya the fastest-growing
healthcare businesses in the world
which uses a combination of business
models and innovation to lower the
cost of cardiac surgery and in doing so
has revolutionized the access, volume,
and reach of its facilities.
We have even studied the workings of
an International organization called
‘Riders for Health’ a successful
entrepreneurial venture which focuses
on the transportation of healthcare to
the doorstep of the rural people in
Africa, mainly specializing in
maintaining and running vehicles to
enable healthcare to be delivered all
over Africa.
After studying the various case studies
we could conclude that the
entrepreneurs in this area also need to
keep their model as simple as possible.
They need to understand target
market particularly if they are looking
at the lower income segment.
More involvement of Social
entrepreneurship in the health care is
the only way we can help lower the
spiraling healthcare costs and ensure
that the poor and those in rural areas
access quality medical care.
‘World can only be a better place
when philanthropy meets
entrepreneurship halfway.’
- Michael Porter
38
- Siddhant Sharma, Dhara Shah and Nikita Sharma
Background:
You probably already know that the
planet has had a pretty rough
relationship with us human beings.
And I guess you probably also know
that we are not going to change our
attitude towards the environment till it
stands in front of us and tells us that
we are doomed. So if it comes down
to solving the problem at hand before
it gets too late then we have to come
up with solutions that are beneficial to
everyone. By everyone I mean the
environment firstly, and then the
businessman who could care less
about it (ofcourse I am generalising).
The book, “But Will The Planet Notice”
talks about just that. The author states
that anti-herd actions and
mechanisms are not powerful enough
to change the environment situation,
even if they really connect with our
idealistic self. So for example, if a small
group decides to only drive hybrid
cars, it’s really not going to make a
difference to our planet. The key is to
get the majority on board and to get
them to make “environment friendly”
choices.
Making a case:
Gernot Wagner, the author, states
that there is no point in fighting
market attitudes. He points out to the
Lobster Gangs of Maine and talks
about how one can beat the
paradox between profit and
environmental gain. Maine was one
of the most fertile lobster grounds
around the 1850’s. But by the 1870’s it
started to run out of lobsters and the
local government had to place strict
regulations to control its loss of
lobsters. They tried everything and by
1895, the last lobster canning factory
closed down. But lobsters were still
being caught. Then they tried
something different. They put in place
Lobster Gangs. So if you wanted to
catch lobsters in Maine, you had to be
part of a lobster gang. For that you
had to be a local and obtain a
license, which had other obstacles
that checked to see if you actually
cared about the community. This led
to an obvious decrease in the people
who caught lobsters and eventually it
led to the community protecting its
own resource and working towards
creating a balanced amount of
catching. Of course you might not
care about Maine or their lobsters for
that matter. But it’s really about the
attitude here. A business approach
that is also centric to conserving
resources and increasing their
sustainability is one that will always
make you win.
The book talks about many other such
tools and methods to incentivise,
demotivate and regulate (both literally
and metaphorically) actions that
affect the environment. Gone are the
days where people think that for
businesses to grow, there has to be
collateral damage. Gernot Wagner
shows an alternate path in his book,
and it’s time that we get on its
bandwagon.
Who should read?
Anyone who cares about the world
we live in should give this book a
chance. It’s not some page turner and
if that’s what you are looking for, then
you’re better off reading Harry Potter.
However, on a more serious note, I’d
say give it a shot, it will show you a
new way of how the Gordon Gecko’s
of the world can meet environmental
activists halfway and come up with a
mutually benefitting solution. And at
the end of the day, we should give
more than just a damn about the
environment we live in. Do you?
39
- Bineet Hora and Aishwarya Swarna
The title of the book is a Sanskrit
saying, given to the woman at the
time of her marriage. It has its origin
in Mahabharat. Bheeshma blesses
Gandhari with these words when
she decides to permanently keep
her eyes blind folded as a mark of respect for her blind husband.
I have lived in India all my life and I
always thought there is nothing
much a foreigner could tell me
about this country. Brought up by
educated parents and from a
business class family, I assumed
women in India were by and large
free from all the inequities of the
past. This book was an eye opener.
I realized that freedom was in fact
a luxury and my life in India was a
privilege which is not available to
the vast majority of the women in
this country.
May you be the mother of a
thousand sons is a narrative written
as an American female journalist’s
insight into the lives of the
contemporary Indian women.
What’s very interesting about this
book is the way it looks at any
given situation not from a single
perspective but many. The very
title of the book is a sarcastic
remark on the way women in our
subcontinent are chiefly
stereotypically looked as "child making machines".
However, the book digs deeper
into the lives of these very
machines and identifies the
reasons that makes them more
human. All in all you won't regret
devoting your time and attention to this book.
Perspective: According to me, at
least till now, the relevance of post-
modern feminism hasn’t been
much, but after reading this book
that not just contemplates the
various problems women today are
faced with, but also propounds the
various branches and ways in
which disguised patriarchy has
begun to take strong roots in our
society, is quite interesting. In one
of the chapters, she actually
quotes implying that even though
she began her journey by trying to
find the ways women are being
empowered in our nation, she had
a disillusioned return on learning
the sad reality that many powerful
Indian female public figures are, in
fact, the creation powerful Indian
men. Every woman holding a
powerful position has a powerful surname attached to hers.
The book is an enlightening read
but its audience can only be
someone who's also equally curious
on the relevance of post-modern
feminism or the insight into the lives
of Indian women from an
American woman's perspective
rate. It is meant for the middle class
people of India, who can see their
life unfolding in front of them as
they flip the pages of the book, it’s
also meant for the upper middle
class, who consider themselves a
part of the Indian society but are
blissfully unaware of what is going on in their own nation.
40
- Vishnu Kumar, Hamza Mir and Anay Kaundinya
The Author’s Central Argument
Daniel Kahneman breaks down thinking into
two nodes – System 1 and System 2.
Thinking Slow is referred to as System 2. It is
conscious thinking, where we spend a great
deal of time reasoning and analyzing and
naturally feel as if we are in control of the
situation. System 1 is automatic and
unconscious. Like a receptor, it constantly
surveys the environment and processes the
incoming information. However, this system is prone to making mistakes.
Whenever system 1 senses that something is
not right, system 2 is triggered automatically
to help system 1 with the situation. The
impressions of system 1 are not effective in
long-term planning; system 2 is often
completely unaware that it is being
influenced (and misled) by system 1; and
therefore, is not always able to spot the
former’s errors. The book by and large tries
to make us aware about how System 1
works and how it influences System 2, sometimes even misleading the latter.
Interesting Evidences Used
The book provides a plethora of evidences
which support the central argument and
the point of view of the author.
1. Kahneman asserts that people who go
by System 1 make judgments from
environmental cues. Suppose a
politician looks “presidential”. When a
voter watches him making a speech on
T.V, System 1 might tell him that the
politician would make a good president.
Sometimes, we unconsciously assume
that the speed at which people make
decisions determines the quality of
decision making. According to
Kahneman, George Bush is a System 1
person because he (Bush) operated by
intuition and prided himself on his gut.
Barack Obama, conversely, is a System
2 person. The public has a stereotype of
what makes a strong leader. They like
leaders who are decisive, act quickly
and who seem to know exactly what to
do. Daniel Kahneman therefore feels
that the public like the decision-making
style of President Bush more than the
decision-making style of Barack Obama.
2. Kahneman discusses an interesting
fallacy which he has named “WYSIATI:
What You See Is All There Is.” Sometime,
we are faced with complicated
problems about which very limited
information is available to us. Even when
we do have information regarding the
problem, it may be of poor quality.
Regardless, we generate the best story
possible to reach a solution and
convince ourselves that this solution is
the only possible one. WYSIATI means
that we don’t allow for what we don’t know.
Which type of reader is the book intended for?
1. People of an inquisitive nature who like
to introspect in order to understand
events and circumstances which led
them to become the way they are
would benefit from a reading of this
book.
2. Students of Psychology, Statistics and
even Economics may observe that the
book largely dwells in the realms of their
respective disciplines and may therefore
appreciate the ideas of the author and
the remarkable coherence in the evidences presented.
41
- Vishakha Wadhwani, Shreya Samant and Minakshi Singh
Sheryl Sandberg’s “Lean In” is the
mouthpiece of the subjugated
women in the workforce. The fact
that gender is a predominant factor
of employers, Sandberg intelligently
brings legitimate questions on it.
Being immune to the inequalities
and the suppression women has
accepted the mediocre over
experimental. Several instances in
the book highlight the issue of
opportunities which were not taken
in the best stride because of the
discomfort and fear. The root cause
of women losing their vocational
success is because of lowering the
standards they have achieved. Even
after the statistics of women
excelling in the educational front,
the ratio of women leading the
world has not increased and remains
stagnant. The economical aspect of
it could have surpassed
expectations if there were equal
employment to both men and
women. By no means does the book
try to show the displeasure of men
ruling the business kingdom.
Sandberg puts the perfect amount
of realistic element for the
awareness of bringing a gradual
change in the work atmosphere
where women will conquer.
Sheryl Sandberg wrote this book
after giving many speeches and TED
Talks on how women should be
treated equally in workplace. With
every speech, she found that more
and more women could agree to
what she was saying and that more
and more women needed to hear
that they can excel in any field if
they have the right backing from
colleagues, boss and family and with
hard work and ability.
The grassroots of all problems for
women is deep-rooted belief that
women are incapable of having
aspirations as great as men, both in
women themselves as well as the
society. The biological difference is
anyway a common concern but
beyond the lines of it there is a man-
made concept of differentiating
genders. This is the crux of the matter
which Sandberg acknowledges. The
belief of Leaning in is definitely a
solution for encouraging the women
who are on their career front. It is not
a feministic drive but a reasonable
explanation of the biased views from
a business perspective. Her
observant and clear cut references
are a success of this book. She busts
the myths such has a woman cannot
balance her work and personal life
exceptionally well and botches up
at least one of them or that every
individual does not have to ‘do it all’,
we just have to do what is important
and what is necessary. Having said
that, it won’t be a surprise to hear
that Sheryl Sandberg is ranked as the
5th most powerful woman in the
world in the Forbes magazine.
42
Disclaimer: The following section is a funny take on the world of economics from the eyes of the
funny people. All works below are reproductions of existing works. We do not intend to hurt anyone’s feeling or sentiments through these works. If at all it does, it was purely incidental.
Top 5 Reasons To Study Economics 1) Economists are armed and dangerous:
"Watch out for our invisible hands."
2) You can talk about money without ever
having to make any.
3) You get to say "trickle down" with a
straight face.
4) Mick Jagger and Arnold
Schwarzenegger both studied
economics and look how they turned
out.
5) When you are in the unemployment line,
at least you will know why you are there.
The following joke is a joint invention of
Preston McAfee, Phil Reny and several so far anonymous writers.
The Weirdest Economic Indicators 1) Unclaimed corpse indicator: People do
not claim the bodies of their family
members because the costs of a funeral
are deathly high during a downturn.
2) Marine advertisement intensity index:
Because too many people apply, the US
Marines toughen up their videos during
a recession to scare off applicants.
3) Baby diaper rash indicator: When
growth is sluggish, parents cut costs by
changing their babies’ diapers fewer
times – reflected in higher sales for rash
cream and lower sales for disposable
diapers.
4) The high heels index: When the
economy is down, heel heights go up.
This is because consumers treat fashion
as an escape and wear more
flamboyant things during a downturn.
This has been proven time and again
since the Great Depression.
5) Divorce rate indicator: Divorce rates fall
during a recession – if Hollywood has
taught us anything, it is that divorces are
expensive. Better to stay together and fake romance, no?
Why God Never Received Tenure at an
Ivy League University 1) Because he had only one major
publication and it was in Hebrew.
2) It had no cited references and some
even doubt he wrote it himself.
3) The scientific community has had a very
rough time trying to replicate his results.
4) He never applied to the Ethics Board for
permission to use human subjects.
5) He rarely came to class, just told students to read the book.
5 Economists Every INDIAN Economics
Graduate Knows: 1) Alfred Marshall
2) John Maynard Keynes
3) Adam Smith
4) Amartya Sen
5) Manmohan Singh
6) Mascarenhas and Johnson (They deserve a special mention.)
Movies Every Economics Student Must
Watch Before They Die: 1) Supersize Me: It projects the subtle
difference between doing something
that’s good for profit and doing
something that’s good for human
beings.
2) A Christmas Carol: The movie exposes
the gruesome background of Capitalism
and is a classic portrayal of the
greediest capitalist ever.
3) Modern Times: It showcases the effects
of rationalization of labour with a motive
of profit maximization being taken to its
logical extreme.
4) Who’s Counting? Marilyn Waring on Sex,
Lies and Global Economies: It simply
throws light on the gender biases
involved in Conventional Economics.
5) The Day After Tomorrow: It is a very
powerful story about the amalgamation
of environment and class in the fight for
a sustainable world.
43
5 Best (But Actually Worst) Pick Up Lines For Economists
1) I’ll be the MPC to your MPS, together we’ll be one.
2) Can I interest you in my stimulus package?
3) You won’t find any elasticity with my demand, because there are no substitutes.
4) I think you and me would have great potential output.
5) Despite a decade of inflation, I still dig your supply curve.
5 People Who Single Handedly Ruined The Entire Economies: 1) Steve Perkins: He single handedly raised the price of gasoline at a record time DUE TO A
HANGOVER. At a goal retreat offered by his company over the weekend, he got really
drunk. He continued it thorough Monday and Tuesday. On Tuesday morning, facing another
hangover, he came to office and started trading, FOR HIMSELF. He bought 7.13 million
barrels of Brent Oil with a value of $520 million over a time period of 19 hours. Prices of
gasoline fluctuated upwards within 30 minutes which is almost impossible. He was fined
72,000 pounds and was banned from participating in any trading activities in the future.
2) David Li: He created the Gaussian Copula Formula to eliminate guesswork while investing .It
started working wonders and everybody in the market- investors, regulators and bankers
started using it. David was considered to be a front runner for the Nobel Prize. BUT CHECK THE
EFFECTS. There is something called as Collateralized Debt Obligations which is nothing but
dozens of bonds bundled together in huge amounts of money. This is exactly what Li’s
formula enabled them to do. Prior to Li’s formula the money in CDO’s was $275 billion but
post that it was $4.7 trillion. Sadly, the supposedly sure things in the loan started crashing and
all of the losing bets came due at once and the rest is history.
3) William Paterson: He wanted to own one of the world’s most valuable and strategic
locations. So, he envisages starting a colony on the present day Panama Canal. Scotland
was at the middle of an economic depression but was completely amazed by Paterson’s
idea and money poured in from the society. A total of 400,000 pounds sterling total (= 1/5th
of money circulating in Scotland then) was invested. The first expedition reached the area.
Within a few days people started falling ill due to the tropical climate which the Scots were
never used to. The colonists finally bailed them off and Paterson himself was half dead in
fever. Scotland later signed the Acts of Union with England based on England’s promise to
pay them whatever wealth was flushed out of the nation due to Paterson’s scheme. Great
Britain was formed and Paterson was chilling somewhere in his grave.
4) Augustus Heinze - The Panic of 1907: He earned fortunes having founded United Copper in
USA but wished to earn some real New York Money. He was a board member in numerous
companies. So using his financial acumen, he built a rather silly plan with brother, Otto. They
thought of buying all shares of United Copper by themselves. ALL OF IT. Thus then investors
would be forced to buy it from them resulting in enormous money for the brothers. This
happened for a day as share price rose from $39 to $60. The hoarding of shares was soon
exposed and prices crashed. The Panic of 1907 was nothing but the disastrous chain
reaction and the New York Stock Exchange plummeted to 50 percent that is literally falling
down by 6,000 points. Businesses in the nation started falling apart.
5) George Soros:- The Man Who Broke The Bank Of England: Hungarian-born American
billionaire George Soros decided to take the one of the riskiest decisions in the history of
money and sold more than $10 billion in pounds in 1992. Because he “had a feeling” that the
value of British pound was about to fall. And it did. By 24% and he earned another $1.1 billion
How, I hear you ask? Because George Soros is The Man who BROKE the Bank of England. This
simple transaction cost the UK Treasury an estimated £3.4 billion and it forced the UK
government to withdraw from the European Exchange Rate Mechanism (hence the 24% fall in the currency value); and hence that day is aptly known as “Black Wednesday”.
44
21stJanuary: India increases import duty on gold, platinum by 50 per cent: The Indian
government hiked the import duty on gold and platinum with immediate effect from four
to six per cent to control the ever increasing current account deficit. It also decided to
link the gold Exchange Traded Fund (ETF) with the gold deposit scheme offered by banks.
Economic Affairs Secretary Arvind Mayaram stated this measure was taken to discourage
import of the precious metals.
6th March: Wipro one of the world's most ethical firms: Wipro Ltd has got the acclaim for
the second year as one of the world's most ethical firms by top business ethics think-tank
Ethisphere Institute. The company stated this was in recognition to its commitment for
ethical leadership, compliance practices and corporate citizenship.
2nd April: Ambani brothers collaborate for telecom business: Companies of Ambani
brothers Mukesh and Anil made an announcement of a Rs.1,200 crore deal for
cooperation in telecom business.
9th April: A bite of the digital pie: Bitcoin, the decentralised and anonymous digital
currency, was valued at $266 per BTC. The next day its value fell to $95. Bitcoin surged up
and down rapidly all through the year: from $14 at the beginning of the year, to $1200 in
November to $600 in December.
9th April: 30 Tihar Jail inmates got selected in placement drive: 30 inmates of the Tihar Jail
got selected by 15 companies in the fourth campus placement drive organized by jail
authorities. The 30 inmates with good character, who will get release in the next six
months, were recruited by 15 companies.
1st June: Murthy returns: Narayana Murthy returned to Infosys as Executive Chairman and
Additional Director. The company has fared well since his return, but resignations from a
number of its senior executives have raised concerns.
10th August: Ratnakar Bank to acquire units of RBS: Ratnakar Bank has acquired units of
Royal Bank of Scotland (RBS) that is its Indian retail business. This is subject to approval by
the regulatory authorities.
15th August: World Bank to provide loan for affordable housing in India: The World Bank is
expected to provide India a loan of 100 million dollars that will be aiming to develop the
low cost housing sector in the country. This sum will be used for buying, improving and
setting up the economically efficient residential areas across India.
23rd August: Lawsuits Against Big Banks: The year 2013 brought with it the record breaking
Settlement between JPMorgan Chase (NYSE:JPM) and the Department of Justice for $13
billion — around half of the bank’s annual profit, and the biggest price-tag ever seen for
one bank alone to settle a government lawsuit.
28th August: Freefalling rupee: The rupee fell to 69 against the dollar, the biggest fall in 18
years. The huge CAD was blamed and with the fall in the current account deficit, the
rupee stabilised to around 60 USD in December.
4th September: New man at the helm: The economist who predicted the financial crisis
was appointed as the Governor of the RBI. Newspapers promptly became alert and
every policy action from RBI is now even more closely scrutinised than before: Raghuram
45
Rajan’s appointment definitely makes this list. At 50 he is the youngest to occupy the seat
and has among other experience his tenure at IMF to boast of.
16th September: Look who’s back: Bill Gates reclaimed his position as the world’s richest
man from Mexican investor Carlos Slim. Gates has a net worth of 77.2 billion dollars,
according to Bloomberg.
1st October: The government refuses to work (at all): The United States government shut
down for 16 days after Congressional Republicans tried to defund Obamacare. 800,000
workers were sent home: the total cost to the economy was 24 billion dollars.
1st October: United States federal government shutdown of 2013: The shutdown set off a
chain reaction of concerns and market uncertainties. According to a White House Office
of Management and Budget report, the cost of furloughs in lost productivity alone tallied
up to $2 billion.
7th November: Tweeting in the market: Twitter launched its IPO amidst wide publicity but
also caution after the initial disappointment with Facebook shares. The Twitter IPO raised
$1.8 billion compared to Facebook’s $16 billion. Will social media be able to remain
popular with users and investors at the same time?
26th November: Holy admonition: The first non-European pontiff in 1300 years, Pope
Francis called unfettered capitalism “a new tyranny” and asked global leaders to
guarantee education and healthcare. It remains to be seen if this will shift the debate in
issues such as universal healthcare in the US.
29th November: Nano's marketing as a cheap car, a mistake- Ratan Tata: Ratan Tata
admitted that positioning Nano as the cheapest car was a mistake committed by the
company as it has not helped the matters as far as marketing of the car is concerned.
3rd December: Detroit’s Bankruptcy: On December 3, Detroit’s bankruptcy petition was
ruled in Federal Bankruptcy Court by Steven Rhodes. Judge Rhodes allowed the city to
file for bankruptcy protection, cutting out a giant chunk of its debt — billions in fact. This
has some, including Detroit city mayor, David Bing, optimistic about the suffering city’s
economic future.
10th December: Weeding out criminalization: Uruguay became the first country in the
world to legalise the sale, cultivation and distribution of cannabis. The government will
control the entire production process: even sale will be tightly regulated. Uruguay
expects to see a fall in drug trafficking profits.
25th December: Indian economy recorded the worst slump in more than a decade: The
Indian economy which is worth $1.8-trillion has experienced its worst slump in more than a
decade where the growth hovered below 5% for four consecutive quarters. Though the
experts believe that the grim days are over and economy will now progress further to a
higher rate of expansion. The country’s GDP in the first 3 quarters increased below 5% that
is 4.8%, 4.4 % and 4.8% respectively.
46