or market capitalisation? The debate on which is a better metric
for listings such as the one featured in this issue of the magazine
will continue. One, sales, represents performance; the other,
market capitalisation, represents promise. When defined thus,
it becomes evident that there is a stage in a country's development
when sales will be a better metric for corporate listings, and
there is one when market capitalisation will be. In the US, for
instance, most companies (barring a minority in really bleeding
edge areas such as nanotechnology or biotechnology, and a few
more in traditional technology domains) are in what can be described
as a mature stage. Auto definitely is (in a mature stage in the
us). As are retail (despite Wal-Mart's staggering gains year-on-year),
financial services, energy, and several other businesses. That
isn't the case in India, where most businesses are still in a
nascent stage or have just hit their growth stride. In developed
economies like the us, their here-and-now is itself attractive
enough; in developing ones like India, the future will always
look far better than the present. Ten years from now, then, a
BT 500 based on sales may be a better reflection of India's Inc's
pecking order. Today, only market capitalisation can serve that
Will The Wealth Trickle Down Your Guts?
|A street urchin: No sign of trickle-down
something goes wrong with the great Indian Dream of becoming the
world's second largest economy, it won't be because corporate
earnings have eventually dried up, or because the foreign institutional
investors have stopped pumping in the greenbacks, or because the
government hasn't reformed enough (and fast enough), or because
the West has suddenly gotten sick of being spoonfed by pseudo-accented
jocks sweating it out in a tele-shop in Thiruvananthapuram. To
put it another way, If the India story turns sour, it won't be
because readers of Business Today-and, what the heck, those who
publish it too-didn't become filthily richer over the year.
Enjoy it. Until they come to get you.
The "they" in question are of course
the three quarters of the nation's population who probably don't
even make it to the perimeter of your brand-infested universe-yes,
those 'village folks,' those poor sods who still can't muster
up a (disposable? Ha!) income to buy a bicycle. Now this ain't
no bleeding heart story but rather a red flag being waved frantically,
albeit in no particular direction: What happens if all that wealth
created by your copious consumption refuses to trickle down-as
per one of the most compelling premises of capitalism-but prefers
to just weld itself to your ever-expanding waistline?
Sections of that 75 per cent of Unwashed
India might then just come to get you. If this sounds suspiciously
like Leftist rabble-rousing, consider what's happening in Russia.
According to a state report earlier in the year on social and
economic development, the gap between the rich and poor is widening,
despite record-high oil prices (which has resulted in Russia having
more millionaires than Japan, according to Forbes magazine) and
sky-rocketing salaries. The report figures out that the richest
10 per cent of Russia's population makes close to 15 times more
than the poorest 10 per cent-and that figure has been steadily
rising; in 2001, Russia's filthiest rich were just 10 times richer
than the most deprived. Result? Social unrest which makes itself
visible on the streets.
Sounds alarmist? Rewind a bit back to the
Hurricane Katrina, where the biggest disaster from the point of
view of the American Dream wasn't the deaths caused by the tempest,
but the rape, pillage and plunder that followed. The hurricane
succeeded in squeezing out some of the basest instincts in New
Orleans simply because that's the way people without food, money
and care (just a prayer is never enough) react in a crisis-they
turn into animals. Creatures of a similar pedigree are walking
the streets of Parisian suburbs, torching vehicles, warehouses
and even schools. Most of these elements would typically be young
unemployed (or unstably employed) immigrants, or semi-skilled
blue collar workers in dying industries.
Will they come to get you?
|Tariq Ahmed Dar: Salesman-turned-terrorist
Terrorists can lurk anywhere
as Delhi police's arrest of Tariq Ahmed Dar, a 32-year-old salesman
at Johnson & Johnson demonstrates. They can have perfectly
legitimate day jobs at respectable companies and normal lives
with wives, children, relatives, bank accounts. Dar, who allegedly
masterminded the recent serial bomb blasts in Delhi that killed
55 has an infant child and his wife is reportedly expecting their
second; he has been photographed receiving an award from his company,
ostensibly for achievements in his field of work-he sold products
for a respected multinational corporation that is primarily known
in India for its babycare products; and he used a debit card made
out in his own name, like millions of middle-class Indians do,
to pay for his stay at a Delhi guest house.
Terrorists can and have easily permeated
mainstream life. Terrorism is now no longer only about shadowy
militant groups infiltrating the borders of the country and carrying
out their dastardly deeds undercover. As terrorism can happen
anywhere, terrorists too can exist anywhere. A potential terrorist
could be your next-door neighbour, your colleague at work, the
amiable guy at your bank or the nodding acquaintance you bump
into on your morning walk every day.
We're not being unduly alarmist, only realistic.
On the flipside of the spread of terrorism into mainstream life
is the backlash it is bound to have on companies and the business
community. Tariq Dar is a Kashmiri Muslim. Will his arrest for
allegedly hatching the Delhi bomb blast conspiracy affect the
hiring policies of his and other companies when it comes to candidates
from the same community? Will companies resort to stringent profiling
of some candidates in their recruitment processes? Will it have
a negative impact on the already quite low employment potential
of educated youth in Kashmir?
For obvious reasons, since the beginning
of terrorism in Kashmir in 1989, industry has tread carefully
in the state, with some businesses shunning the region altogether.
Many marketers of consumer goods accord low priority to the region
simply because the high risks faced by their personnel operating
there and those faced by their offices and establishments are
not worth the business that may be generated. That, coupled with
intensified militancy, has shrunk the opportunities for Kashmiri
youth. Lack of opportunities mean less jobs for young people of
the region and, well, less jobs translate into frustration for
the already alienated people there.
The backlash of the Dar affair could make
things worse, particularly if business decides to tread carefully.
One salesman who turned out to be a terrorist should not tar an
entire community but if companies choose the safer option and
turn hesitant or unwilling to hire people from the region, the
outcome will be adverse on the potential job-seekers there as
well as business in general.