General Awareness

April 04, 2017 @ 01:15 PM

Economic Reforms will motivate billionaires to compete for sustainable Infrastructure

MBA Aspirants are expected to know the basic undercurrent of money flow in emerging markets like India. 
Read: Economic Reforms will motivate billionaires to compete for sustainable
The rule of the road to judge whether capitalism in a country has been truly successful is to analyze the billionaires. One of the features of inequality is that it creates a lot of billionaires in a country. Is it good or bad? The jury is out on this. The secret lies in analyzing the source of the new billionaires.
It is always a good sign if the number of billionaires in a particular country is increasing. But there is a catch in this growing number of billionaires. If the new billionaires are coming from sectors with government patronage, rather than productive new industries, than it’s a problematic sign. 
Government patronage as in a Russia is nothing but socialism in a different avatar. In Russia, most of the billionaires are oil oligarchs, which is a conventional commodity industry based on sweetheart deals with the government. The good sign is when the billionaires come from new industries like retail, e-business, media, etc. 
Moreover, in emerging markets like India, the list of top billionaires does not change as fast as in China. The billionaires should face competition and turnover at the top.
China’s top ten lists over the years show a lot of turnover, with names falling off or coming on all the time. Whereas in India nine out of the top ten Indian billionaires on the 2010 Forbes list are holdovers from the 2006 list, while the 2006 list had only five holdovers. It implies that the same people are the part of billionaire’s list year on year. This is a worrying issue. Creative destruction lies at the heart of the capitalist society.
Number of billionaires should rise but their growing number rather than the increase in total accumulated net worth of the same set of billionaires is a better indicator. Total net worth as a % of GDP of the billionaires is very high in India as per IMF. It is only third in the world at 17.2% after Russia & Malaysia. The same ratio is very low in China & Brazil.
This factor coupled with a lot of holdovers at the top shows that the churn at the top is much lower in India. It is the same side effect of capitalism that Thomas Friedman talked about: Capitalism makes people unequally rich. Government of India by pushing bolder reforms can stop this phenomenon.
Historically, whenever governments have brought fundamental & holistic reforms, it has resulted in new set of people becoming richer because of the untapped entrepreneurial energy getting unleashed in the new productive sectors and also diminishing government patronage.
They say money talks and wealth whispers. But unfortunately it is not so with all the super-rich people. The rule of the road is that always watch out for the ways in which surpluses are used by billionaires.
It is worrying sign when billionaires go for excesses like buying super luxurious mansions in the Middle East rather than opening a new plant in one’s own country. Here the government is also at fault. At a time when Indian companies are expanding abroad, it is not a sign of celebration but concern. 
Why are many companies going abroad? In India, it is happening because domestic economy is not doing well. So the surpluses fly to foreign destinations (outward FDI) to avoid the problems of doing business in the home market.
Moreover, in countries like Russia, there are plenty of excesses undertaken by billionaires like mushroom picking on weekends by helicopter, and other signs of gaudiness like ten-thousand-dollar champagne bottles. Fortunately, in India we don’t see this phenomenon of that level, but it can change very soon.
The ultimate aim of any business should be to expand & create demand in a way that increases not only output, but also jobs as well as productivity. It is then, that surpluses gives way to sustainability.
Stay informed, Stay ahead and stay inspired with MBA Rendezvous 

Crucial Dates, You Should not Miss

TAPMI, Manipal
Admission Application closes on January 16, 2018 for 2018-20
BIMTECH, Greater Noida
Admissions open for PGDM Programmes at BIMTECH. Apply Now !
Lal Bahadur Shastri Institute of Management
Admissions are Open at LBSIM, Delhi. Apply Now !
FORE School of Management
Apply for PGDM & PGDM-IB Programmes. Application Deadline is December 22, 2017.
Goa Institute of Management
PGDM Admissions Open at GIM. Apply Before January 5, 2018
Last Date to Apply for MBA (Full Time) Programme at NIRMA is January 09, 2018
XAT 2018
Application Last Date 30th November 2017
IMI New Delhi
Application closes 4th December 2017
XIM Bhubaneshwar
Last Date 8th December 2017
SIBM Bengaluru
Apply for SNAP 2017 to be held on Dec 17 and apply for SIBM-Bengaluru through the SNAP Form
Institute of Rural Management Anand
IRMASAT will be conducted on February 4,2018, Apply Before December 31,2017
IBSAT 2017
Last date for IBSAT registration is December 12 , 2017
Last date to register for SNAP is 24th November, 2017. Last date for SSBF is 2nd January 2018
SIBM Hyderabad
Apply for SNAP 2017 to be held on Dec 17 and apply for SIBM-Hyderabad through the SNAP Form
K J Somaiya Institute of Management Studies & Research, Mumbai
Last date for Application is 31st Jan, 2018
Application for PGDM 2018-20 at SDMIMD is open till February 28, 2018
Institute of Management Technology
Application closes on November 24, 2017
MDI Murshidabad
Application for PGPM 2018-20 at MDI Murshidabad is open till November 24, 2017

Admission Open Now

Following Colleges are accepting applications.


Admissions open for 2018-20

PGDM, PGDM (HRM), PGDM(B & FS), Executive PGDM

Apply Online