IT Governance

With the Satyam scandal, corporate governance will become a key factor for western companies to engage in long term IT partnerships with Indian services companies. The government should also proactively regularize and come up with policies to ensure that the companies are in safe hands. There should also be more stringent auditions to ensure that such atrocity does not happen in the future.

India - World's Back Office

India continues to be the preferred back office of the world with China slowly catching up. India still commands a strong 26% of the IT service industry with China just 3%.


So how does the future stand for this Industry for India compared with China. China has a qualified work force which is one of the most essential needs for this Industry and also a supportive government which can give a healthy competition for India.


China disadvantages are the command over English and the protection of the intellectual property. These can be overcome by training and more stringent government regulations.


So will China catch up with Indic in this niche Industry? In India this Industry is still driven by the private sector. For India to continue to be the world leader there should be more support from the government and lot more improvement in infrastructure. India in the long term should also look at improving productivity and quality of these services by implementing innovative processes.


Hopefully with the changing attitude of our government and more focus on improving our infrastructure, and the great vision and international exposure of our IT leaders we should continue to be in the forefront of this Industry.

Indian Banks still healthy

Just read that HDFC Q3 results were net up 45%. Federal bank also was not far behind. Seeing that our banks are still posting profits in this economic down time justifies that our domestic
market is still strong. People are still able to pay the EMI's, there are very few foreclosures
and the banks are not geting piled up with deflating real estate assets.

In general India market still seems to have lot of liquidity compared with its western counter parts.

Is this because of the banking regulation defined by the RBI that our banks are in a better shape?
Well I think will have to do some kind of research to comment more on this.

Will it be Infrastructure Investment?

Thinking more about my previous post, I think government’s plan of big time investment in infrastructure projects can be the solution to crises. These projects create lot of jobs, which in turn can create optimism and general demand of everything.

What is going to drive the growth?

Most of the world governments have declared stimulus packages for the banking industry so that they will have more credit and liquidity. But where will the banks invest all this money to drive the next generation of growth.
If we look at U.S most of their industries are struggling, they have very few manufacturing industry, services industry are also being outsourced or are facing talent shortages, retail industry also had a bad holiday season. Before the mortgage crises it was the housing or the real estate industry which was driving the growth but now with that industry in complete shackles what is going to drive the next phase of growth.

I have no clue.

Madolf and Ponzi Scam

Madolf scam has started hitting the headlines recently and this is considered as one of the biggest financial scams in the world. When I read about Madolf laundering of 30 Billion of investor’s money I was curious to know more about the famous Ponzi scheme.

Ponzi scheme is financial operation of paying returns to investors out of money from subsequent investors.

So how did Madolf scam got burst finally? If we take his case things were going pretty well till beginning of 2008 when the economy was in a growth phase and lot of credit available. Because of his great reputation he was always able to find new investors to pay returns to his previous investors. But by mid of 2008 lot of his investors started withdrawing the principal and he was not able to find new investors and this is when he got burst.

Satyam Impact and its after math

Satyam Fraud has become the biggest corporate scandal in India.
How will this impact the India outsourcing industry?
There are lots of lobbies with in the U.S who are against outsourcing jobs to
outside U.S and they will surely start leveraging this situation to strengthen their fight against outsourcing. They will start questioning the Indian companies’ corporate ethics, professionalism, governance. How this situation shapes up will also dependon how the Indian government is going to tackle this.

This will also be an opportunity for American software services companies like IBM, Accenture to make use of the situation in terms of competing with other Indian software companies like Infosys, Wipro etc

This is definitely a blow to Indian software service companies and it will take some time to overcome this.

Corporate governance

With the Satyam scandal, corporate governance will become a key factor for western companies to engage in long term IT partnerships with Indian services companies. The government should also proactively regularize and come up with policies to ensure that the companies are in safe hands. There should also be more stringent auditions to ensure that such atrocity does not happen in the future.

Deflation and its impact

Deflation is all about general level of prices falling . But why is deflation bad in general, should n't the lowering of price be good for the general public.

Looking closer into it, how does deflation happen? This generally happens when there is a reduced demand which can be due to a wide spread recession, people cuting their costs anticipating greater recession, job losses etc.
Reduced demand can lead to all major manufacturers reducing production which can lead to wider job loses.
This can change into a vicious cycle leading to depression.

Automobile crisis and its bail out

Wanted to always raise my opinion on the automobile crisis of America's Big Three- GM, Ford and Chrystler.


There had been lot of debates and negotiation by the Automobile Majors on a government bail out something in the lines which the financial industry received.

But do you think a bail out with Billions of tax payers’ money is the best solution to this?

Looking at the root cause their key issues are mismanagement, labor costs associated with pay and health care. Until and unless this is resolved, they will not have the cost edge which its Japanese competitors have.

If they are able to fix this , this cost saving can help them to start focusing and investing more on R&D for more innovation and quality.

Until these key issues are resolved any bail out money is not going to save the industry.

2009 And Economy

So we are finally in 2009. Looking at 2008, it started of pretty well for India and the world economy. Our share market crossed the 20,000 magic figures for the first time with retail investors and FDI’s all optimistically pumping in money into market. Things all looked great until the U.S mortgage crises which created major credit crises forcing the U.S banks to pull out their money which they had invested as FDI’s in markets like India. This resulted in the crash towards the later part of 2008 by eroding the Indian market by more than 58 % and the index going below the 10000 mark. This resulted in a huge wealth erosion across India.

This has further rippled into other industries like real estate, manufacturing etc. Luckily our banks were more regulated which has resulted in hardly any bankruptcies compared to the U.S.

Hopefully the new RBI policies and the governments decisions to pump in more money, reduce housing Interest rates will bring back the India Shine.

For the IT industry this will be another challenging year with most of the American and European companies relooking and reducing their IT expenditure.

This should be the time for IT companies focus on upcoming markets like India and China which has lot of opportunities.

Hope fully the recession will be short lived and we might see some up side trend towards the later year of 2009

First Blog

Well can't believe that I have started blogging. Wanted to always get into the blogging world but procrastination had always over ruled me

So let me start my first blog with a Happy New Year.

My new year rather started with an awful and sad note. On Jan 1st me , my family and two of my friends family started on our vacation on Orlando. We had planned the five days vigorously so that we will be able to cover Disney World, Universal Studio and Sea world. But unfortunately our flight got delayed by 6-7 hours because of some minor clinch in the gear and it took about 5 hours to for the flight officials to procure the parts and 2 minutes to fix it.

When the group was just getting over the delay and finally started to enjoy the trip one of the families in the group had to drop out of the trip due to a sad and sudden demise of his mother.

We continued the rest of the trip on a sad note and finally I am back home in NJ.