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Recession, India and Services

March 23, 2008

There is a lot of thinking going on in the markets and business world. Irrational of course. Rational very rarely, but senseless most of the times. You ever heard technical analysts speak and tell to you in a “holier-than-thou” tone, about the efficient market theory? Well let me crack a secret, lean closer,

THERE IS NO EFFICIENCY IN TODAY’S MARKET.

Period.

No, don’t get me wrong, I am not yelling. Everybody knows it, even your stock broker, that technical analyst and even the exchequer of the nation. Surprised? Well then tell me, how else do you get that tiny-winy bit of inside rumors which will make you the next Soros.

Take our economy for example. The Great Indian Economy. The booming, ‘never-can-go-bust’ economy. The economy of FIIs and speculators, the financial markets of pin up boys and riches to rags story. Well, it had been quite a hit for ‘the great Indian economy’ in the last few months. Why? Don’t ask me [had I knew about it 🙂 , I wouldn’t have been blogging]. People tell, its because of liquidity crunch.

Maybe.
US Recession? You believe that?
Then perhaps,yes?

The fact of the matter is, nobody knows. You know that, boy? Then what are you doing here? Make some mullas out there!

I will suggest you one great exercise. For the next one week spend your time pestering your parents, friends, whoever you see including your Ginny Aunty (who incidentally loves talking about her recent fashion fad!), Shyam Uncle and all the other people you see. Chances are, after a week, they will either stop being friends or give in to it. Now your aim is to make a list of the day to day goods and their values, those which are Made In India. I don’t know in my list, what is Made In India.

But a lot of chances are that your list follows this table, which is a very rough estimate:

Age

Percentage of value [Made in India]

< 3 years

10%

3-8 years

8%

9-12 years

5%

16-32 years

2%

32-50 years

5%

50-60 years

8%

60 years<

12%

Amazing isn’t it? We produce less than 7% of the stuff average, we use, by ourselves, export less than 2% of what we make, and still we are shit scared of somebody else getting poorer.

India as such is not a manufacturing oriented country. Even if we are, then we are not exporting. So what has got our neck then? I am not saying we are invulnerable. I am not saying recession is a time when everything is fine and stuff like that. Of course, recession is bad. Liquidity crisis is bad. But as an economy of 1 billion strong thinking, optimistic booming people, aren’t we overreacting? Let me put things in perspective.

We love services. Partly due to our ancient lineage, where service has been hard-coded in our genes (remember atithi devo bhavo? Guests are like Gods, translated literally), and partly because we still cannot shake ourself out of the mold of The Raj. Whatever! but we love servicing. And so, what do you do, when a guest makes a trip from Oregon, down to your home in a Tier-II city, with the money to make the trip borrowed from his neighbours (like Japanese, they love to save you know). Common sense tells, you have got to be jittery. Common sense also tells, that to be wary of friends like them, for you never know when is your turn to lend them money and really not expect anything back.

But, thats what had been happening. Japan lends to US, and US loves buying all those Wiis and Nintendos and iTouch and all those stuff. And you know what happens when they break down? They call us. Hello India!

I refuse to believe that, US is going to stop calling us anytime soon. Oh yeah they may stop buying Wii-s and iTouches but I dont think they are gonna stop calling us. Why? [Perhaps because they love hearing somebody can do such a crazy job too!], mainly because appliances break down, and old appliances break down more frequently. 🙂

But does that mean, I love servicings?

Heck no!

Manufacturing has a halo around it and I am not gonna deny that, but KP [knowledge processing, I hate that word starting with O], thats where our future lies. Our future lies in innovation. And when we have real innovation, it doesnt matter, really it doesn’t matter, who goes bust and who goes boom. There is always a customer!

What do you say?

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[At present comments are turned off, but if you have any suggestions/praises/brickbats then you can digitize them and send them to sohamdas at gmail dot com]

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