Private Virtue - Public Vice

This is attributed to Keynes - in the context that excessive thrift on the part of you and me will only help in prolonging the downturn.

Harish Damodran in the article " How Rational Behavior Begets recessions " on Business Line touches on this very Topic.

The question is when people around us are losing their jobs (returning Newly bought cars ) and livelihoods , would you be interested in going out and Buying a Flat even if the prices are rock bottom and even if there is a Mercedes thrown in with the flat. You get the drift - its not likely to happen.

So the current policy of the Government here and elsewhere to decrease interest rates might not see any immediate revival in spending. People are scared , they were exuberant 6 months ago now they are scared - fearing for their jobs - so the medicine will take sometime taking effect - if it really does.

The other option for the government to increase public spending - which is investing on infrastructure projects in a Big way - is a stronger medicine. But, for this medicine to work the our system should be efficient. Which it isn,t. Much of Government spending tends to land in private pools.

So what are the options?

In Lalu rests India's Redemption from Recession

Is Lalu the answer to India's Recession woes ? 

This thought hit me right between the eye as I read an article which talks about the importance of  investment in high speed rail for the US & the pitfalls that Mr. Obama faces if he does'nt take certain steps. 

- excerpts :
" One area that is ripe for such investment--and that is not, from what I have seen, a declared priority of the Obama administration--is high-speed rail. .... They would be the most energy-efficient and quickest means of getting between places like Boston and New York, or Los Angeles and San Francisco. But they would require a massive investment. .......... " 

Cut to India ,  Thanks to Mr Lalu the Indian Railways has turned around to the extent that among other plaudits Deutsche Bank in its sectoral review of 2006, mentioned -- " IR's competitiveness will increase substantially vis-à-vis the road sector". 

Can the current problems of the HCV segment traced to this ?  

Imagine if we had a highspeed rail linkbetween Bangalore & Pune - the time taken might be 5-6 hrs assuming a 120 km/hr speed. Chennai - Bangalore  might be just over a couple of hours.

Probably Mr Lalu can give it some thought. Especially when Government spending seems to be the Need of the hour , why not? We need some drastic measures to get the economy moving, the engineering/manufacturing sector - the  stimulus packages might not contribute much to raise the current level of Business confidence and may be just - drops in the ocean

High Speed rail links in India was in News as far back as in 2007.There is this article in TOI mentiong plans for HS links between Delhi - Howrah & Delhi - Mumbai 

There is another mention about  high speed rail corridors in the South but, nothing else hence.

Perhaps this is just the right time for it. 

What do you think? 

(Lalu's image- credits to helloji)

Of Recession, & Layoffs

Even, just 3 months ago attrition was the key topic of all informal/formal gatherings , general conversations etc. Now, that has been replaced by words like recession - and layoffs. Almost everyone just has to touch on these words because if he does'nt, then he is likely to perceived as out of synch.

Perceptions aside the jury is out whether India stands to gain in the Global Slowdown and there are voices which say that any economic slowdown is an opportunity for Growth - oxymoron? Some of the Greatest Companies like Microsoft( late 70s) & Google(late 90's)  started during periods of recession

The idea for this post came to me while reading a WSJ article on showing a brave face if you do get laid off. Simple & nice article. 

October

Another week closes and its the end of the month.
A month of ups and downs.
Yesterday came across data that the worldwide squeeze may last 2-3 years.The economy contracts for such a long period of time.How is that going to impact the recruitment scenario. Best is to go from day to day.The max time frame I can forecast is 3 months.For Those 3 months We are comfortably placed. Thats a good way to start a bad period.Whats the point in Breaking my head beyond that.

Infact I have reduced our targets drastically.As long as we break-even its fine.Why ask for more at this point in time. Guys have been sent out.Perhaps we could do something for them?

Additionally looking at adding clients from other engineering sectors. Automotive might rebound in 9-12 months time but a few other sector companies in our clientlist might provide a good cushion. Wont be easy adding clients during these times.So that is one more hurdle to jump.

There was this scary article I read today. 40000 Trucks - No takers. No wonder they(VOLVO) are closing plants.

Have decided to go ahead with the office in Pune. The decision has been long coming and I am going to stick with it.