Thought of the Day

"Marketing is not an event, but a process... It has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, change it, even pause it. But you never stop it completely."

                                                                          - Jay Conrad Levinson.

NREGA

The National Rural Employment Guarantee Act, (NREGA) was notified on September7,2005.the objective of the Act is to enhance livelihood security in rural areas by providing at least 100 daysof guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.

NREGA GOALS

a. Strong social safety net for the vulnerable groups by providing a fall-back employment source, when other employment alternatives are scarce or inadequate

b. Growth engine for sustainable development of an agricultural economy. Through the process of providing employment on works that address causes of chronic poverty such as drought, deforestation and soil erosion, the Act seeks to strengthen the natural resource base of rural livelihood and create durable assets in rural areas. Effectively implemented, NREGA has the potential to transform the geography of poverty

c. Empowerment of rural poor through the processes of a rights-based Law

d. New ways of doing business, as a model of governance reform anchored on the

principles of transparency and grass root democracy.

FOOD SECURITY BILL

India’s high economic growth rate in the past decade has not been fully reflected in the health status of its people, with 22 per cent of its population undernourished1. According to the National Family Health Survey 2005-06, 40.4 per cent of children under the age of three are underweight, 33 per cent of women in the age group of 15-49 have a body mass index below normal and 78.9 per cent of children in the age group of 6-35 months are anaemic. These are disturbing statistics which point to nutritional deficiencies. The NAC proposal for a NationaFood Security  Bill is perhaps the most important national effort yet to address these deficiencies in India.

It is at times assumed that the relationship between economic growth and health is unidirectional with improving economic conditions leading to better health.In reality, and as confirmed by recent research, the reverse is equally true and health is an 'economic engine.' That is, better health which is an important end in itself leads to and may, in certain cases, be a necessary prerequisite for economic development. Hence besides being an end in itself, the economic role of health and nutrition thus provides an additional and compelling rationale for public policy to support well targeted nutrition improving interventions in ways directly analogous to the support given for increasing other forms of capital investments.

The NFSB proposed by the NAC is a potentially revolutionary bill that can have a huge impact on the economy. Well crafted and effectively executed, it can transform the lives of people.

The salient features of the NFSB proposed by the NAC are:

• Legal entitlement to subsidized foodgrains to be extended to at least 75% of the country’s population - 90% in Rural areas and 50% in urban areas

• The priority households (46% in rural areas and 28% in urban areas) to have a monthly entitlement of 35 Kgs (equivalent to 7 Kgs per person) at a subsidized price of Rs. 1 per Kg for millets, Rs. 2 per Kg for wheat and Rs. 3 per Kg for rice

• The general households (39% rural and 12% urban in phase 1 and 44% rural and 22% urban in final phase) to have a monthly entitlement of 20Kgs (equivalent to 4 Kgs per person) at a price not exceeding 50% of the current Minimum Support Price for millets, wheat and rice.

• The minimum coverage, entitlement and price to remain unchanged until the end of the XII five year plan

• Government of India to specify the criteria for categorization of population into priority and general households

• In the first phase, food entitlement to be extended to 72 per cent of the population. In the final phase, to be completed before March 31, 2014, full coverage of food entitlement (to 75 per cent of the population) to be ensured

• Legal entitlements for child and maternal nutrition, destitute and other vulnerable groups

• Reform of the Public Distribution System.

Bharat Nirman

A time-bound plan for rural infrastructure by the Government of India in partnership with State Governments and Panchayat Raj Institutions  from year 2005-2009. Under Bharat Nirman, action is proposed in the areas of irrigation, road, rural housing, rural water supply, rural electrification and rural telecommunication connectivity. It  have set specific targets to be achieved under each of these goals so that there is accountability in the progress of this initiative.

Bharat Nirman:  Tasks

• Every village to be provided electricity:  remaining 1,25,000 villages to be covered by 2009 as well as connect 2.3 crore households

• Every habitation over 1000 population and above (500 in hilly and tribal areas) to be provided an all-weather road: remaining 66,802 habitations to be covered by 2009

• Every habitation to have a safe source of drinking water:  55,067 uncovered habitations to be covered by 2009.  In addition all habitations which have slipped back from full coverage to partial coverage due to failure of source and habitations which have water quality problems to be addressed

• Every village to be connected by telephone: remaining 66,822 villages to be covered by November 2007

• 10 million hectares (100 lakhs) of additional irrigation capacity to be created by 2009

• 60 lakh houses to be constructed for the rural poor by 2009 While the agenda is not new,  the effort here is to impart a sense of urgency to these goals, make the programme time-bound, transparent and accountable. These investments in rural infrastructure will unlock the growth potential of rural India.

Product Marketing VS Service Marketing

The marketing of products and services reveal two different situations which require two very different strategies.  With products you need only consider the perceived value, price, location, and advertising.  With services you need to consider the perceived value, price, location, advertising, process, people, and proof.

When advertising a service it’s important to demonstrate your process and proof through testimonials or other sources to build reasonable expectations with your customer.  These expectations will build perceived value in your product or service.  When advertising a product proof is not as critical because the product is tangible and returnable.      

Perceived value is the amount a consumer would expect to pay for your product before they see the actual price.  To build perceived value in a product you demonstrate and explain it’s benefits in relation to the customers needs.  To build perceived value in a service you must 
prove that you are consistent and can provide quality service to meet the customers’ needs. 

Pricing for products will include the cost of materials, manufacturing, and distribution.  Service pricing may include a small amount for some offsite manufacturing or travel but in general the pricing for a service is mostly profit.  This low cost for providing the service will allow you to spend more money advertising and demonstrating the service. 

The location of your product or service may not be important depending on the type of item you’re selling.  If you run a retail location with many items,  a stable location with plenty of walk-by or drive-by traffic is important.  Niche items and services may not require a stable location as consumers do not need to know where your service is located 
unless they’re specifically requesting the service you provide. 

Marketing When YOU Are the Product

Marketing professionals widely use the 4 Ps for marketing a product. But how do you market yourself when YOU are the product? How do you make your own accomplishments believable?

In this day and age, we all might as well be from Missouri, the "Show Me" state. We constantly have to prove ourselves to others. We have to provide believable evidence of our capabilities.

A laundry list of responsibilities ("responsible for 2,000 people and a budget of $100 million") hardly says much about how you really performed on the job. Simply documenting activities ("managed supplier relations" or "participated in reengineering efforts") doesn't say much about your contributions or the outcomes you helped achieve. Impressing people with scope, size, or history ("over 800 offices globally" or "150 years of history") doesn't exactly tell the listeners what you can do for them.

Your level in the organization matters very little. In fact, the higher you are trying to go, the more you have to prove yourself. Whether you are an executive thinking about that next big promotion, an employee writing performance self-appraisal, a stay-at-home mom re-entering workforce, a consultant trying to sell to a potential client, or an organization trying to establish credibility through marketing... you have to face the music and answer the inevitable question: "What have you done for me lately?"

As Aldous Huxley said, "Experience is not what happens to you. It is what you do with what happens to you." So focus on what you did and how—with what happened to you.

THOUGHT OF THE DAY

Put not your trust in money, but put your money in trust. 

 

                                             ~Oliver Wendell Holmes

CASE STUDY on FINANCING THE SUPPLY CHAIN

Trade finance is the provision of any form of financing that enables a trading activity to take place. This finance could be provided by a buyer to a seller in order to enable the seller to finance his production. Often this finance is allocated to allow access to better inputs that would not be accessed otherwise due to unavailability of credit, transportation, storage, or other costs. The buyer has the incentive to provide this type of finance to ensure the quantity and quality of the specific goods needed for his business. In addition, in order to increase sales volumes, sellers of inputs or other services also have incentives to extend credit to increase their sales volume.

In well developed markets that are characterized by transparency, sophisticated risk hedging instruments,pricing of risk, and a variety of effective collaterals, buyers and sellers often use the credit terms of trade finance to differentiate commercial counterparts and negotiate the terms of the transaction. Conversely,producers and agrobusinesses that form the base of the productive chain in developing countries often have difficulty even entering into financing arrangements within the supply chain, let alone negotiating terms. Credit constraints for agricultural producers and agroprocessors within emerging markets create problems for purchasing inputs, hiring labor for production, storage, processing transportation, and accessing markets. Both open account financing and advanced payment financing provide some solutions to these constraints.

One can generalize trade finance into two different categories. The first category is open account financing where the seller provides goods in advance of payment such as an input provider giving fertilizers in March with the expectation that he will be paid in September when the crop is harvested. The second type of financing is advanced payment financing where the buyer provides some payment for the goods trusting that the seller will ship the specified goods at a later date.

INTERVIEW QUESTIONS FOR FINANCE STUDENTS

1.Why one rupee note is signed by the ministry of finance? Is governer has the right to sign this note? Is there any interference by the RBI?

As ruppee is the currency of our country and only govt has the authority to issue indian currency it has been signed by ministry of finance, all other notes are bearer notes which are signed by governor.

No interference by RBI.

2. What is the difference between real money & nominal money?

Nominal money relates more to it's measure of counting - so nominal figure of what is written on bill, while "real" relates more to it's purchasing power (usually between some periods of time). For instance 100 units in nominal could buy 2 units of good in 1950 and 1 unit of good in 2005, at the same time real value of this 100 nominal units are 100 real units in 1950 and 50 real units in 2005.
Same is with GDP. In nominal it can rise due to inflation while it can stay the same or even decrease in real value.

3.What is Crossover Rate?

When comparing two different but similar projects, the specific returns required for the projects to have the same net present value. Because two similar securities may have different volatility, calculating the crossover rate helps to determine which will be more profitable in the short and long terms. For example, one dotcom company may achieve a steady rate of growth, but only slowly over time, while a second dotcom may achieve the same returns in a shorter timeframe, but with greater vulnerability to market downturns. Calculating the rate at which each will achieve a desired net present value, assuming no massive changes in circumstances, may help an investor make decisions regarding which to buy and which to sell.