For Richer Experiences, Never Quit!

I vaguely recollect the feeling or the emotional state we were in on that day. However, I could recollect a few key things effortlessly. It was more than 8 years back. We had yet another hectic week at IIM-K. We all had rushed to complete project reports, which took a few night outs to complete. We were planning for the last few classroom sessions, which invariably required making a presentation by our team. In most of the cases, I was to present the case in the last session of the class. For those unaware, all the teams (that had not already presented in the previous sessions) had to be ready with the presentations. Therefore, my team had to prepare presentation for all the cases and get to present the last case to the class. My professors either felt that I was the most capable so gave me the last presentation, which typically involves most of the concepts covers in the entire subject, or felt that I am the weakest and wanted me to prepare the presentation for all the topics! I would love to think it was the former. Further, we had to prepare ourselves for the final exams. That trimester, there was a “wow-feeling” and a “phew-feeling”, because, we had (based on our electives) a few days with multiple exams and a gap of 3 days with no exams in between.

That being our last trimester, I was in no mood to prepare for my exams. Yes, that was the time by when I already had a job offer and was complacent. Luckily, I was able to find a few more of my sort in the A-Top (the top floor of the A hostel). We had a crazy idea of planning one last trek before we left the school. A couple of my friends (Alok and Debu) and I planned for a simple trek – we did not want to be too adventurous in between our exams. While it was a very simple one, it was a very good place to go. Hence, we decided to bike to the base camp early morning, finish the trek in 4 hours and come back by late afternoon. We carried enough stuff to last until the lunch.

Everything was as planned until we reached the spot and we started. After about a few 100 m into the trek, we saw a watchtower nearby and went there. After enjoying the awesome view, we went back to the trek. It is from here that we got lost! We realized that after about 500 m and we thought it would connect to the right path and continued for another 1,000 m. Then we thought a bit and decided that we will not go back, even if we have to climb the mountain, we did not have any gear though! We thought we have come for an experience so it does not matter if we do the trek or not, as long as we have the experience. We went forward until we reached the foot of a hillock. We decide to go up that hillock. We used the mountain grass that grew on the hill as support and climbed our way through. It was really a very tough trek! Mountain grass blades are very sharp; we had many cuts on the palms and entire forearms. However, our focus was on surmounting the hillock! The mountain grass generally has very strong roots; that helped us!

After about an hour of such ordeal, we finally could see the normal path. Nevertheless, we could not understand how our route would connect to it. We did not lose hope! We just went further, but this time, sideways, as there was no more grass upwards, it was only a rock. Luckily, after about another 30 minutes of trek, we could reach the way that connected to the correct path. We finally concluded the trek; of course, we took about two extra hours. Did that really matter? NO! It actually was the best trek we ever had. Apart from adding another one to our list of conquered treks, we experienced a tougher trek – climbing almost 75 degrees incline, we could see the base of the hillock when finding the next place to keep our feet. Among the three of us, I rate myself the weakest who would have quit if not for Debu and Alok pushing me.

This experience taught me that if we are determined, we could surmount all the difficulties and achieve our goals. Being at it is all that really matters! In our daily life, we cannot avoid problems nor can we go back to a time from when it would have been easier to tackle. All that matters in such situation is being at it and not quitting. I always tell myself, quitting is the easiest thing and if we quit we would miss many good experiences that would shape our mental being and make us a stronger individual.

I am, because of that experience and not quitting, a stronger person and have been able to face many adversities in both my personal and professional front. I thank my friends who shared the same crazy feeling of doing the trek between the exams, pushing me and supporting me during that experience.

Taking charge of charging into your own hands

With the technology moving so fast, especially getting close to the nanotechnology, I was wondering about 3 years back. Incidentally, I had a discussion with one of my friends as well on this. While I cannot recollect exactly who now, because I generally am freelance on my discussions about innovation/ technology with my friends and colleagues, but I am sure it was a very typical discussion. What is typical here? Yes! I was just about to address that. After most of my discussions on that front, I leave with a feeling that my interlocutor thinks I am stupid. Of course, as one great person said all new ideas were thought to be stupid initially. But, here we are, already challenging our imagination!

Ok! I agree, it is time I got to the point now. It was about charging the mobile phone wirelessly. This is now a reality. Samsung has shown it to the world in its new release. Of course this was not quite the way I imagined it should be. I wanted it to take the charge without it being placed physically on a particular object. Yes! I imagined it to be purely the way we now have the wireless connectivity now. I know that could be a bit too much. But yes there is energy everywhere, the quantum and the intensity varies. But, why can’t we harness this energy to charge our phones? In that direction, I also felt, we can try another way. When we hold the mobile in our hands, why can’t it draw the energy from our body to charge itself, weird? No way! We are a great source of energy ourselves. We have enough static energy on us to burn out a microprocessor or a PCB (Printed Circuit Board). We are also having enough electricity running in our body! You know, I think most of you would know, our heart works with electricity.

So, we know what we should expect in our next wave of technology innovation for the mobile phones. No need to charge our mobile any more, just holding it in our palms should do it! Let us see, who will get there, Apple or Samsung!

Analysis of Unio Budget - 2015

I am a bit late this. However, I thought I should not miss writing it. While most of the people would have done some internet searching to know how the Union Budget for the coming year is going to affect them. So, I will restrict my views to the points I highlighted on my previous entry that was posted on the night before the “Union Budget”. I had covered some broad themes that the Budget should look at from the long-term perspective. Let us know evaluate what the government has announced on those aspects.

GST: As I mentioned, government couldn’t have announced implementation of this immediately as the state governments weren’t taken on board. However, the government has clearly announced its plan to start implementation from the next year (2016-17) onwards, which I believe is the right thing. This will help rationalize the country’s tax structure and bring in more predictability to any investor. It will also ensure that there is greater accuracy in tax collection. However, as the devil resides in the details, knowing the implementation details would help us understand exact level of benefits that we can expect from this. The first problem is the entire structure is similar to the existing. Proposed way of implementing is not going to get us all to a uniform tax regime anytime soon. GST is divided into multiple forms (CGST, SGST and IGST) clearly make it similar to multiple taxation structure prevalent today, VAT, CST and Central/ Service Tax structure. What is new? Nothing!

GAAR: As I said, the government has been acting weak on this. It continues to be so and defers it again. While it isn’t wrong to defer it. But this time, they should backtrack or defer again. I hope that they will not in the next budget. We can only wait and watch.

Black Money: There are many steps proposed on reducing the Black Money problem. There are many penalties and disincentives for those who do not disclose their black money and who have undisclosed foreign assets. This is definitely as way forward. Implementation is what we want to see, as there were already penalties/ punishments for possessing black money!

Subsidies: It is good that there is no significant increase in the subsidy amounts this year’s announcement. However, there have been no steps announced to bring in rationality to the current subsidy structure. That is a disappointment!

Improve Savings: Announcement of special tax saving pension related savings (80CCD for INR 50,000 per month) is a good step towards inculcating a retirement planning approach to individual savings.

Capital Investment and Infrastructure: There is something to cheer on this front by committing huge investments in road, port and energy. Tax-free bonds to fund the infrastructure are coming back. This will also improve the nation’s savings rate.

Export encouragement: Not enough has been provided for the benefit of exporters. Very minimal additional support at this juncture is not encouraging, especially when we are having a gradually increasing import bill. As we can’t reduce dependence on the crude, focus should be on improving exports and reducing import of unnecessary goods (especially those that can be manufactured here). However, there isn’t much to cheer on this front in this budget.

Reduce import dependence: Import restrictions on Gold would partially reduce the import bill. However, the key problem of crude is yet to be resolved. Crude is at the lowest price so it would help us. However, it will not continue at this level forever!

Food and Agri Businesses: Good sums have been allocated towards improving Agriculture infrastructure (25,000 crs for rural infrastructure development fund). But key issues are availability of power, development of cold chain infrastructure. Whether these investments and investments in infrastructure translate into improvement in power and agri supply chain is to be seen.

Summarily it wasn’t a bad budget but at the same time it isn’t a very good one either! Obviously the budget couldn’t fulfil all the expectation. But there is only limited that any government can do. I think within that realm of thought, it looks that the government (Mr. Arun Jaitley) hasn’t disappointed many.

The second most awaited event of the decade - The Union Budget 2015

When I was publishing the previous post, I realized that the largest democracy of the world is going to witness a very important event of the year – The Union Budget.

In May-2014, the world witnessed a historic event happening in India. After almost 3 decades, Indian people have given a clear mandate to a single party. The budget presented post the mandate was more like an interim budget as it was presented in June and the new government was yet to gain a proper understanding. Now, the budget being presented today (when I started writing this, it was 27-Feb-2014, so tomorrow was right; by the time I published, today is right) is a much anticipated event, not only by the Indian citizens but also by the international economies.

Seriously, everyone has a lot of focus on this budget and has many expectations from it. I feel, whenever there is too much of expectation, there is bound to be disappointment. So, don’t be surprised if the budget doesn’t meet your expectations. You are to be blamed! If you had toned down your expectations, you would be in for pleasant surprises. Failing which, you could be in for a rude shock! Having said that, I would like to summarize what this budget should ideally focus on.

GST: This indeed is important. Coal block auction and allocations of certain proceeds from this to state governments is a good way to win over them. It indeed is a step forward in implementing GST. Although this may actually be unimportant in the larger scheme of things, this one act has very far-reaching consequences that every investor would gain more confidence in the economy.

GAAR: Government has been acting weak on this. They have suddenly woken up about 3 years back and went back to sleep. It is tough on the investors but it is needed. No investor can take the country for granted. They can’t avoid tax deliberately and yet not pay penalties. Therefore, government should give some clarity on this. It may not be important that we do it in this year. However, it should give some commentary on its plan to implement this. This has to be consistently maintained and thus prepare the investors. It should also categorically state that this would not be applicable retrospectively.

Black Money: Some tough stands can be taken on this! But, is it not good to say now that “no action would be taken and a flat 25% or 20% or some such level would be levied”. Also, the government should, for the safety and the interest of the public give strong assurance that the names of the people disclosing and paying the tax wouldn’t be disclosed. This way the government would get some additional tax and it would reduce the black money in the system.

Subsidies: There are too many varieties of subsidies. It is simple that the subsidies are aimed at supporting the poor or the underprivileged. In such a case, improving the Direct Benefit Transfer (DBT) system by strengthening Aadhaar mechanism would be a very good idea. Petrol/ Diesel/ LPG subsidy should be withdrawn. This is the right time, as the current Crude and Natural Gas prices are low. So, government should make announcement in this budget to reduce the subsidy levels.

Improve Savings: Lately the savings percentage has been reducing. This could be a combination of two aspects, trend of greater consumption (reduced savings) and high inflation eating into the savings. To encourage savings, as all developed economies should have higher savings rate, government should tweak the tax structure on the earnings on the savings. As most of the bank savings are short term in nature, if some tax benefits are offered to those placing deposits (retail or corporates, it doesn’t matter) for more than 10 years, it would improve banks asset liability mismatches. This would help the banks to participate more vigorously in supporting the infrastructure growth required for the economic growth.

Capital Investment and Infrastructure: As the economy is struggling and as the private players are waiting to make investments in capacity expansion, government should address this by announcing large investments plans, the bet would be in the infrastructure domain. While this may result in crowding out the private investment, but where is the private investment now? It is already at the lows. We rank low on per capita roads, per capita power consumption, most of our villages still live in the dark without access to electricity. Even though we are the 3rd largest in coal resources, we don’t extract it enough. We have good scope to invest in green energies (Solar, Wind, etc.) as well. There should be incentives to infrastructure players in these critical areas. One way would be to reduce the capital requirements on the bank loans to these sectors.

Export encouragement: As we rank badly on the current account scene, the government should encourage investors and entrepreneurs to enter into export oriented businesses to improve our foreign currency reserves. To this effect, there should be some announcements made.

Reduce import dependence: Increase the import of those products that are available and can be manufactured in India. Put some tax savings scheme for those who invest in gold ETFs or such instruments which would reduce the purchase of physical gold. While this would reduce tax inflow, it would also reduce Foreign Exchange outgo. Striking some balance here would be a good idea. Mobiles are soon becoming a large component in the import basket. Give some tax sops to the Indian electronics manufacturers and increase import duty on import of electronic goods. This would also encourage foreign manufacturers to set up manufacturing facilities in India, thereby generating employment.

Food and Agri Businesses: The Farmer is the most ignored person in almost all the budgets. While the corporate do all the financial engineering to get the benefits of F&A policies, the most important person in this value chain is often left wanting. While MSP and Kisan Credit Cards are good policies, there are just the basics. There is a greater need to improve cold storage/ food supply chain. Government should continue existing and announce some more good policies in this direction.

There is a lot more the budget should focus on, too many things that need fixing. But, most importantly, this budget should show clearly that there is a long-term design to the announcements being made in this 2015 budget.

Psychology - Right the reads

Yes, habits do lead to success or failure!

Psychology is the scientific study of the human mind and its functions, especially those affecting behaviour in a given context. So, I always felt that if I can understand this science, I would know why some people behave in a particular way and how we can influence them.

With this as my motivation, I started reading certain types of Psychology books. While these books are not pure theory on Psychology, they can be termed as books on the application part of it. In this direction, I read the book Thinking, Fast and Slow (Author: Daniel Kahneman, Publisher: Farrar, Straus and Giroux). When I read this book, I realized that it is one of the best books on how we think and act. This book introduced me to the concept that humans have two systems, the one that acts fast (this is what we could call as the ‘gut feel’) and the one that is slow and very effort-intensive (rational part/ reasoning part/ the higher order part). This book gave numerous example about how we tend to act unknowingly. How on certain occasions, we move from System 1 to System 2. When we are driving on a highway with no traffic, we are mostly on System 1 and we don’t find it difficult to converse with the co-passengers. However, when we are going in city traffic, we would use more of System 2 and during those times, we don’t actually pay attention to the co-passengers. We tend to remember certain experiences as more painful and certain other equally painful ones as less painful. Shouldn’t there be some reason for that odd behaviour? Yes, it depends on how the experience ended (less/ more painful). For more details, read the book. While it is a bulky one (pages: 499), it is filled not only with theories but also with examples and stories, making it an easy read.

Subsequently, I read the book Nudge: Improving Decisions about Health, Wealth, and Happiness (Authors: Richard H. Thaler and Cass R. Sunstein, Publisher: Yale University Press) this actually dealt on a similar subject as the above one. It dealt more on how we can influence people’s choices. One amazing example I can recollect now is, how reducing the distance between each white stripe on the road will NUDGE the driver to reduce his vehicle’s speed. This book deals with such simple NUDGES that can be used to influence people’s actions/ choices. The book also cautions that these ideas can be misused!

The most recent read in this filed was The Power of Habit: Why We Do What We Do in Life and Business (Author: Charles Duhigg, Publisher: Random House). This book, I would say, has a different style of narration. It has all elements of a movie, editing, suspense, building up of a thrilling climax, etc. Probably because, the author is a Journalist and not a subject expert, it looks different. This doesn’t mean the previous books are any bad reads! They are equally gripping. This book gives multiple examples of successful and failed people, organizations. It also talks about how a habit forms and how one can break bad or unwanted habits.

I think these three books talk about the same things about a human, the higher order self (System 2) and the lower order self (System 1). We often hear that “the habits are deep rooted”, “bad habits die hard”, etc. It is true, they are deep rooted literally too; they sit in our basal ganglia (the central part of the brain). Call it the System 1 or the basal ganglia it is the core part of our brain. A few million years ago, we (rather the species from which we evolved) had only this part. Gradually, as we started doing more complex things (due to the complex environment that evolved around our), these brains developed cortex, which is where the higher order self (System 2) resides. It has been a truly edifying experience reading these books.

Being aware of these things would not only help us improve our awareness of our involuntary actions and reactions but also help us change such reactions, wherever deemed necessary. The next one I plan to read in this direction is Strangers to Ourselves: Discovering the Adaptive Unconscious (Author: Timothy D. Wilson, Publisher: Harvard University Press).

I am reading these books to develop a deeper understanding of human psychology that would help me be a better banker, engineer, innovator and businessperson. Instead of asking "when would you read these books", I now ask "why would you read these books?"

Have I become a movie buff?

Of late, I have been watching too many movies. Was that 15 in the last 3 months? Something close, if not exactly 15. In reality, my count hasn't ever crossed 5 per year. However, this time it was too high for my standards. What, 60 per year at this rate! I don't think so. Even if I do want to see so many, there should be that many good movies released! On this front (making good movies), I tend to appreciate the movies made by the American's (to some extent the English).
Agreed, some might say my universe (or sample in other words) is too small! I only understand Telugu, Hindi and English. Hence, any movie in Telugu or Hindi is by an Indian. Those made outside and those that I watch are only English movies. Therefore, it is but natural that the Americans or the British made those movies. What is so much to compare? For those who love evaluating various aspects of an argument, here goes another element (apart from language), time span - the movies I watched were made during the last 30 or 40 years. Hey, that was not deduced from my age; one can watch movies made before one's birth!
OK. Why did I conclude that certain people make better movies? I could probably enumerate many technically appropriate reasons, but one thing that beats all is the result - how many of the movies I watched were English (American/ British)? Yes, the strongest reason why I made that conclusion was, two (if not more) out of every three movies I watched are English. I believe this proportion is only going to get more favorable towards the English movies.
Now, let me try to give you some of the technical reasons for my proclivity to the English movies. After all, that is what we would love to discuss and hear!
1. These movies tend to have some uniqueness in their story line or the way the story is narrated.
2. Amazing literature that forms the basis for these movies (Lord of the Rings, Pirates of the Caribbean)
3. The performers don't act, they tend to live in those roles/ characters -- making the movie appear real -- credit also goes to the directors and their commitment to make movies look real.
4. Use of technology that makes the created scenes look real on the screen
5. Budget? Of course, that is what makes it possible to make such huge investments to achieve the quality.
As I have been focusing more and more on the movies, styles of making movies (in India or otherwise), styles of directors and actors, because I have started watching more movies, I would be able to add more details to the list, along with more examples.

Rationality in Children

I was surprised to learn that in reality, little children are far more intelligent that we would like to accept or believe. I recently understood that when we try to make a judgement about children and their abilities, we are usually far away from reality than we actually think. Then I felt that this could be an interesting enough topic to post on my Blog. The first thing that made me realize of my incorrect opinion on the rationality and cognitive abilities of children was their sense of purpose or use of an object. There are two mugs that we use for our daily ablution - one Green and one Blue. The Green one (relatively bigger one) is used for bathing purpose only. One day, for no attributable reason, the Blue one (relative smaller one) replaced the Green and was being used to give my kid a bath. She refused to take bath and was shouting, crying and running away. She was expressing her unwillingness to take bath with the Blue mug. I understood her revolt only when she expressed that it was wrong mug, and asked me to use the Green one. I was surprised. Later, when I thought about it, I understood that she is aware of the utility and the purpose of these two mugs was different. Second, the ability to meaningfully and comprehensively converse at 2.5 yrs. On no occasion during the last 6 months has she used wrong words or tense (may be more, but I wasn't aware of did not notice). Apart from that, she also uses the right tenor and tone when she speaks e.g. query/ question has a different tone from a response.
On one instance, her conversation started as follows:
She: All the boys and girls in my class are taking my water bottle.
Her Grandma: Why don't they bring their own water bottles to School?
S: They do.
G: Then why do they take your bottle?
S: I can't understand.
There are many more such things about the kids that we won't notice till they happen. So, when you next meet a kid, be ready to be surprised. Note: I'll post more such interesting conversations/ experiences with kids.