India embracing the recession cycle (Capitalism)

Capitalism, this is what every management student is taught for years together now. Making money is the main motto or the ideology for every soul diving into this world from all the business schools in the world. India is no exception to this. Do I sound Leftist? Do you think I am not interested in money? No, I am interested in making money, but one think that we should understand. Let's see what capitalist has brought to India.

1. More industries and jobs to the country

2. Increased number of Billionaires in the Country

3. Luxury and purchasing power to Indians.

Doesn't all these look bright. Yeah, it looks wonderful and makes us proud. We can now call India a developed country. Wait, are we developed fully? Are we self sufficient? and there are so many more questions like this for which the answer is NO. Then what the capitalism or Opening of market given us.

1. Greater rift between rich and poor

2. Unplanned development

3. Last but not the least the "Western Recession".

There used to be a time when the companies provide pension for retirees and people also save money in their Provident Fund(PF) which is until recently was managed by The Govt of India. This money is used by the Govt for infrastructure spending and other developmental activities. But now our highly educated Finance Minister is transferring the fund to "Fund Managers". This is not a new phenomenon,as most of the western world follows this. Just to give you an idea, in America the retirement plan is called 401(k). This is nothing but our PF where we contribute certain percentage and the employer matches the same. This money is managed by fund managers who work for some of the global big names, Viz Morgan Stanley, Franklin Templeton etc. Haven't you heard these names recently. Yes, these are the companies that lost billions of dollars this year and the past year. A recent estimates says that the American pension fund lost close to 3 trillion dollars.

So what is this fund manager do? They take this money and invest in stocks, bonds and other investment portfolio and generate revenue. They are going to generate revenue and why am I whining. There is a huge risk involved in this. The money invested in these vehicles and stock market will give rosy appearance but the real value of the money will be far less than it is appears. The value depends on the performance of those companies on which the fund manager have invested. If that particular company goes out of business then the total value invested with that company becomes ZERO and we loose all the money. This is what has now unfolded in America and we are following the same foot steps. It's better to stop now rather regretting later.

Making money is not bad but it is always better to generate wealth. We in the name of capitalism is blowing up the value of the money and actually it isn't worth that much. On the other hand wealth is created by saving the money and investing properly. Capitalism is always not the answer to growth. Capitalism and Socialism are just the phrases that doesn't carry any meaning. A country should always do what is good for the people and think of ways to generate wealth.

If some one thinks I am insane then here is a question

"If capitalism is good then why in the land of Capitalism every one is crying for help (Bailout) by people's money (Tax). What do you call this may be "modern capitalism" "

Who is next

There is a growing concern about the financial market in the world with the failure of Lehman. With every passing day people keep asking who is next? No one is safe not even the great Goldman. This is evident from the recent filing by Goldman Sachs (GS). There is a huge list of companies waiting to fail and all these are happening just because of the wrong policies of the govenment where they are headquateres. I am just giving you the next possible list and merger options.

Companies for sale Companies will possibly buy it
WaMu JP Morgan
Morgan Stanley Wachovia
AIG will be dismantled and sold
Citigroup will be split into 2 or 3 entities
Goldman Sachs Will survive this turmoil may fall in next

Then there will be a question is this an end?

The answer is plain NO. This financial consolidation will only trigger further consolidation in various industries, that consolidation is detrimental to India. We in India is wholly dependent on america and there IT jobs. Indian Government is doing the same mistake that is done by these other countries where they face recession every 10th year. What will happen to Indian IT companies? Aftermath of this ripple in financial market will be felt much more in India than any other country in the world. The Indian businesses are going to shrink a lot and there will very few companies (IT) that will survive this fiasco. What as an IT employee one can expect out of this situation. Some of the so called "Gaints" will be out of business soon. Here goes my list for the IT companies

Companies up for Sale Companies that will acquire
Satyam IBM
Cap Gemini TCS
Tech Mahindra TCS
Some of the other small and mid size companies will be acquired by Infosys, HCL and Wipro which will eventually size to exists in near future to their competitors.

One of the most notable happenings that will be evident is firing or lay offs. India is going to see a huge round of layoffs in her only sector "IT". This is going to cause a huge hue and cry in India where every body who is spending with no clue of what they get. India is going to see a large amount of deliquencies in loan, credit cards etc. India has a pending financial failure starring at her face.

Lets Face it:

What do we need to do to avert this. Yes now its not late to do some thing. We need to do 2 important things first.
1. Invite more manufacturing companies to Inida. The government should give incentives to manufacturing and encourage research in manufacturing. India has a good opportunity to capitalize on manufacuring as we have leading marquees in automotive, heavy industries etc.
2. Private sector should invest in research and development instead of going behind the american gaints like Merc, Pfizer etc.

If we start an intiative now then we will be truly developed by the less than 10 years.

Weakest Voice go unheard

What is happening in China is the outbreak of fifty years of suppression and 'cultural homicide' as stated by His Holiness "Dalai Lama". China, the largest Asian country with more than a third of the world's population acts largely as a dictator of the Asian region. Everything happening in Tibet and other parts of Asia that china wish to annex to itself is not new. Taiwan, an Island nation never wanted to be a part of China and it always existed as free nation, but china on the other hand always interfere with its political system. It openly demands the US not to recognize Taiwan as a country. The presence of China as a permanent member in the UN bolsters its apocalyptic interest. India’s UN membership is also opposed for the very reason. A part of Indian Kashmir, which china occupied during the war (now called Sino Kashmir), is now being flooded by Chinese to establish their culture could be hindered. Indian government is helpless in this matter as the hands of the so Called Super powers are tied by china due to its economic strides. Also, china claims Arunachal Pradesh (a state in Integrated India) as its territory; it has been a work of Tall Order for India to secure her land. What is even bitter to note is the fact that even their own country men are not spared in these barbaric acts. Human rights are traded in the name of economic development in china and this is evident from numerous lawsuits filed against the companies that ship their work to china. It is a threatening truth that one day china will claim the entire world belongs to them and we will be left with nothing but to accept. To stop all these abuse "the police man of the world" the US needs to persist china to grant independence to Tibet and also to Taiwan, otherwise the whole world will be destabilized. If not acted promptly the Tibet event will act as a fulcrum for the entire disaster that might follow. Other countries in the World should also come together to extend their support to save the “Roof of the World” by increasing a diplomatic pressure on “communist rationalist”. The US should be the first one to step up the pressure otherwise it has no moral authority to stay on in Iraq and claim that it entered to bring back democracy, when it is murdered in some other part. China had always turned and will turn deaf ears to all these international pressures and it is not a country that is going to succumb. The only best alternative to make china listen to the people is to boycott the summer Olympics. Yes, Games are not to be politicized, but that is only door that is open to reach the land of "democratic Dictators".