Thoughts…


Economy | Money Circulation | GDP | Taxes – in Layman’s Language !

Economy

Today the world is moving very fast in technology space and being technology savvy is considered as well-educated.

My take on Education, Knowledge and Technology is as follows,

Education is the growth of a human being as one who believes in the equality of all and inclusivity of one another.

Knowledge is of knowing about the present practices, its evolution from the past, pros and cons of past and present practices, and working upon a future-ready model, in the above said “Education” concept.

These both are timeless concepts.

Technology is more of a skill building genre and has to be seen as a subset of the above.

Neither Education be replaced with Knowledge nor Knowledge with Technology.

So in this above said conviction, I guess, it’s pertinent for one to know about economy, Money Circulation, GDP, and Taxes – to make informed decisions in life in tandem with societal obligations.

This discourse is an attempt to serve awareness only on the basic tenets.

Economy

An economy is an area of the production, distribution, or trade and consumption of goods and services by different agents in a given geographical location.

A given economy is the result of a set of processes that involves its culture, values, education, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors.

To understand this we need to know how Money Circulation, GDP and Taxes functions.

Don’t get baffled with jargon. Am going to serve this through story telling mode with simple language.

Good economy is quintessential for any country as it is to a high cash-inflow for any household – for prosperity.

Money Circulation

This is a most complicated subject to understand and hence am trying to serve my thoughts through an oft-repeated ( in social media circle ) story – which not only will give a clear understanding on how economy works, but can also be a learning leverage for other topics.

Once a man walked into a hotel and asked for a room to stay. The manager explained him the tariff and asked for a refundable deposit of Rs. 1000/- .

The guest handed over Rs. 1000/- took the key and said that he will go and inspect the room ; and will stay only if the room matches up to his expectation, for which the Manager obliged. The room was on 6th floor and no lift.

The minute guest left his desk the Manager called his assistant handed over the Rs.1000/- and asked him to go and give it to the vegetable supplier – towards the outstanding due amount.

The vegetable vendor who received the Rs.1000/- handed over that to his assistant and instructed to give it to the farmer who supply vegetables – towards the outstanding due amount.

The farmer who received the Rs.1000/- handed over that to his assistant and instructed to give it to the seed supplier who supply seeds – towards the outstanding due amount.

The seed supplier who received the Rs.1000/- handed over that to his assistant and instructed to give it to the trainer who has trained his staff – towards the outstanding due amount.

The trainer who received the Rs.1000/- handed over that to his assistant and instructed to give it to the hotel which provided space for him to conduct his program – towards the outstanding due amount.

Thus the Rs.1000/- reached back to the hotel.

Meanwhile the guest came back from 6th floor after inspecting the room and told the Manager that he is not happy with the room and so requested for the refundable deposit of Rs. 1000/- which the Manager obliged.

All the stakeholders in this above given story – guest, hotel manager, vegetable supplier, farmer, seed supplier and trainer – can be considered as a network of society.

So as per the story each member of the society network has earned Rs. 1000/- each – hotel, vegetable supplier, farmer, seed supplier and trainer – and thus the society’s cumulative income became Rs. 5000/-, due to the money circulation.

Now let us dissect the story to understand the money circulation concept better.

If the hotel manager has decided to keep the money – and not to circulate, he would not have made an earning, as he would have to return the money when the guest came back. It would have been a “no-loss no-gain” situation.

Whereas when the wise manager decided to circulate the money he earned – in the form of a reduction of Rs. 1000 to his credit – from the vegetable supplier, not only he aided the hotel’s income but also became instrumental for the earning of other four entities – and thus enabled the network to earn Rs. 5000/-

That is the POWER OF MONEY CIRCULATION !

More the circulation more the GDP Growth ; more the GDP growth more the purchasing power in the society ; more the purchasing power in the society more the circulation – thus it becomes a flourishing cycle of economy.

Ah…GDP !!! What’s that ? Let’s see that in the coming chapter..
This story showcases the need for 3 things as follows,

• Need for Money Circulation
• Need for credible credit system
• Need for Trust in the economy cycle

Each one in the story is running on credit. And due to the financial integrity of all the 5 members in the story there is no credit default and thus no NPA ( Non Performing Assets).

GDP (Gross Domestic Product)

Imagine you are the family head of 5 member family, consisting of your wife and three children – all earning their income through business.

You doing a business with a turnover of Rs.500,000/- and earn a profit of Rs.100,000/-

Your wife doing a business with a turnover of Rs.200,000/- and earn a profit of Rs.40,000/-

Your children each doing a business with a turnover of Rs.300,000/- and earn a profit of Rs.60,000/-

Now your total household income is Rs.320,000/- (Rupees Three Lakh and twenty thousand / INR 320 thousand)

And your total household turnover is Rs.1,600,000/- (Rupees Sixteen Lakh / INR 1.6 million)

This household turnover of Rs.1,600,000/- is called as GDP .

Theory part of GDP :

Gross Domestic Product : Gross Domestic Product (GDP) is the broadest quantitative measure of a nation’s total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation’s geographic borders over a specified period of time

Guess, now we have a fair idea on GDP !

Taxes

Still now we were seeing the earning part of the family. Now let’s see the expense part of the family.

Let’s imagine your family expense is Rs.150,000/-.

Handling such an expense should be a cake walk in the given situation of Family Income being Rs.320,000/-.

But if none of the other family members contribute and let you alone – with your income of Rs.100,000 – to fend the expenses, how difficult it will be ?

Ah….Taxes are a major source for the expenses needed for running the country.


Former CEO of National Intelligence Grid, India, speaks about the wars of the future !!! 2

The Sixth Dimension of War –  Battle for the Mind!

By Raghu Raman (thewire.in)

INS Vikrant

Warfare has been a quintessential element of humanity. More contenders fighting for less resources has been the definition of war (as indeed also the raison de’etre of business). Starting from land, warfare evolved across different theatres. As humans became capable of building sea faring vessels, the theatre moved into oceans.

The First World War debuted the third dimension with aircrafts used for reconnaissance and during the Second World War it was in the form of weapon platforms, bombers, logistic supply chains and of course as a thermonuclear delivery vehicle. During the cold war, conflict propelled into the next dimension as the superpowers fought to dominate outer space and finally the 20th century witnessed advent of cyberspace as the fifth dimension of war.

Warfare evolved along two vectors. The first was technological development within the dimension, for example, swords and spears gave way to muskets, rifles and machine guns. Horses and chariots were replaced by vehicles and tanks and so on. The second vector was an orbit shift from one dimension to the other. This necessitated changes in the very doctrine of warfare itself. For example, in land warfare, it was possible for the supreme commander to give out detailed orders and micromanage the campaign, requiring his subordinates to report progress and review plans at every stage.

The organisation structure was typified by a minority of brain and a majority of brawn, and orders were expected to be obeyed in set piece battles. But when the theatre shifted to the sea, the supreme commander could only give general orders to his admirals who sailed away for years and would have to be empowered to take decisions best suiting the circumstances. Similarly, an armada would require every ship’s captain to be trained to assume orders in the absence of orders. Every ship would also require technical expertise of engineers, signalmen, doctors and a full complement of second tier leadership.

Similar doctrinal changes were needed when the aerial dimension evolved, wherein all aspects of strategy, operations and tactics needed to be redeveloped from ground up. In no previous doctrine would so few personnel cause an effect so disproportionate to their numerical strength. So whether it was a crew of the Superfortress bomber dropping nuclear payloads in Japan, or pin point interdiction of key enemy leaders by drones over the middle-eastern theatre, air doctrine rewrote the rules of the game.

Star Wars – as weaponisation of outer space was known – transcended limitations of Earth itself. Space platforms could now assist conventional warfare (like satellites that would aid communication or navigation of conventional forces – or hinder those very capabilities of the adversary) or act as weapons in their own right – with the ability to destroy targets in space or earth.

The most recent theatre of war is cyberspace – also known as the fifth dimension and here is where things start getting out of hand.

The first four dimensions of war have some similarities and familiar structures. All four dimensions are based on kinetic energy, that is, they fundamentally destroy assets – in the form of people or infrastructure. All four dimensions are either state owned or state controllable. Even sophisticated non-state players like LTTE or ISIS haven’t managed meaningful capability in sea, air or space. But the fifth dimension of cyberspace changes these fundamentals in three distinct ways.

Firstly, cyberspace capability is not just the prerogative of the state. As a matter of fact, non-state players are often as good, if not better in this dimension. The US’ frustrating inability to ‘shut down’ exploitation of YouTube, Twitter and Facebook by ISIS is a case in point. Even authoritarian governments like China or North Korea struggle to control the fifth dimension. This is the uncontrollable and a lawless space where ‘good guys’ are playing quintessential catch-up.

Secondly, the fifth dimension changes the traditional threat maps which were drawn based on conventional power. The punching capability of a warring nation had direct correlation with its military and economic might. So Indian defence analysts would assess China with its scores of divisions, powerful air force and multitude of naval vessels as the primary threat and Pakistan came second and so on.

But when it comes to the fifth dimension, size and budgets don’t really matter that much. For instance, despite thousands of cyber-warriors on their rolls, US and China have a relatively small group of a few hundred extremely talented nerds who form the core of their cyber offensive and defensive capability. This analogy is true even in software development companies which may have thousands of ‘coders’ but only a handful of truly gifted software engineers. Now, even countries like Sri Lanka, Bangladesh or Iran can develop capabilities that can match global or regional superpowers. It’s a question of focus, not funds.

Lastly and most dangerously – the fifth dimension acts as a foundation for a more sinister sixth dimension. The battle for the mind.

There is an important military term called the ‘Ground of Tactical Importance’ or GTI for short. The textbook definition of GTI is a piece of land, the loss of which renders a defender incapable of fighting a successful defensive battle. In conventional war, the GTI would be a feature dominating the entire theatre; for example Normandy beachheads during the D-Day landings, or key mountain peaks during Kargil operations. These were physical features which could be defended or attacked with kinetic energy.

The traditional concept of operations in cyberspace has essentially been degradation or denial of service of the adversary’s communication, energy or essential services grid. The Stuxnet virus which deteriorated Iran’s nuclear capability or degradation of Georgia’s communication backbone during the Russian offensive are examples. But the sixth dimension does not seek to degrade the adversary’s network. Instead it leverages and rides on it.

In 2012, Facebook conducted a highly controversial psychological experiment involving 700,000 users. Facebook manipulated their feeds, so that half the group would receive positive news and the other half negative news. Unsurprisingly and disturbingly, this experiment proved that social media feeds affect the psychological and physiological state of the target audience, without the latter realising that they were being manipulated. Such experiments have now been weaponised.

This is why terror organisations and state players use social media and personal messaging services to attack their adversary’s very will to fight. The Indian populace and especially its security forces have been subjected to systematic psychological operations wherein propaganda, morphed pictures, fake videos, phony news and incorrect information is being used to create fear, panic, dissent, parochialism and schisms. Ruptures are being driven between bureaucracy, political leadership, armed forces, junior and senior officers, veterans’ versus serving soldiers etc., through a deliberate campaign right under our noses.

Narratives leveraging sophistry pit various instruments of the government against each other. They compare compensation and perks of bureaucrats with that of the security forces suggesting antipathy of the former towards the latter. Similarly, morphed pictures are used to exaggerate crowds of protesters, or atrocities allegedly committed by state forces. In an era when readers seldom care about veracity before forwarding; specious narratives shape opinions and undermine morale with no cognisance to reality. Lies are literally travelling around the world before truth is able to put on its shoes. Or in our case, even appreciate the need to shift doctrines and prepare for the battle for the mind.

There is a saying that generals fight the last war. Sadly there is some truth to it. Thanks to the mettle of our junior leaders and soldiers, troops with inferior technology or outdated tactics may still be able to win, but if troops are made to fight with outdated doctrines, they are being set up for failure. Unfortunately our leaders seem to be fighting the next war not only with the last war’s weapons and tactics, but also the last war’s doctrines.

Originally published in www.thewire.in.  Views expressed are personal.

captain-raghu-raman

This article was first published in thewire.in.  We appreciate them for their awesome effort to reach this valuable information to many. Kudos to Mr. Sid and Team :-)

The author is the former CEO of NATGRID and Group President of Reliance Industries. His Twitter Handle @captraman. To know more about him click here .


Is the proverbial Bamboo story a Myth – Dissection !

For the last 10 years we are hearing about this Bamboo story in every motivational speech and seminars in tubs and canisters of indefinite proportions.

 

Many were and are inspired by this delightful story and so am I, for the sheer HOPE it gives.

 

Now suddenly someone is challenging this very thought and evangelizing to shun it out.  And the challenger is none other than the renowned best-selling author of “The secret code of success – 7 Hidden steps to more wealth and Happiness “ Mr. Noah St.John, who is also the inventor of Afformations.

bamboo-forestWM

This calls for a serious deliberation or rather a dissection on this thought leadership subject.

 

What is Bamboo story

 

Let me borrow the words of Mr. Noah to describe this…

 

The Bamboo Story goes something like this…

 

“The Bamboo is amazing. You water it and wait. You wait an entire year and nothing appears. No bud, no twig, nothing.

 

“So you keep watering and protecting the area and taking care of the future plant. You wait another year. Still, nothing happens.

 

“Another year passes, and still no sign of growth. It has been three years. Should you give up? Someone told you that it might take a while to really see the fruits of your efforts, so you keep on keeping on.

 

“Another year passes. No plant.

 

“You begin year number five with the same passion as day number one. You keep watering and keep waiting. Finally, after five years, the Bamboo starts growing-and in six weeks, it grows to over 80 feet tall! Yes, 80 feet in six weeks! Well, not really. It is 80 feet in five years.

 

“The point is simple. If you had given up for even the shortest period of time, there would be no Bamboo. It took almost impossible persistence. The plant is there for one reason and one reason only-because you never gave up on it.”

 

This story is supposed to illustrate the power of persistence and never giving up.

 

Now why Mr. Noah is up against this ? What are his reasons ?

 

To avoid time loss and a better reading experience, am not rewriting it rather putting the link to his article.

 

Here he claims that this story provides a feel-good-factor and nothing beyond and/or useful.  He has given his reasons for the same and also has quoted personal experience in his life to substantiate his claim.

 

Now am also interested to lay my thought as why I consider the story is very relevant with my reasons and of course with personal experience from my life – to substantiate.

 

The crux of the contradiction, I see, is due to the different perceptions we both have upon the subject.

 

Mr. Noah sees “Business” as the bamboo seed, and entrepreneur as the gardener.  In that perspective his thoughts do holds water.

 

I see “the entrepreneur” as the bamboo seed, and “God”as the gardener.

 

Non-believers may call the “God quotient“ as universe or ecosystem or whatever you choose.

 

To make understanding simple, let us put entrepreneur as “Self power” and God quotient as “Supreme power”.

 

1.  Bamboo seed once sown, it starts working day in and day out and never stops, without any rest !

Every successful entrepreneur says in almost all the interviews that they have learned a lot in their venture in a very hard way, before they have seen their light of the day. That’s the work of an entrepreneur day in and day out.  He need to learn new, apply it and relearn from that experiment.  So the entrepreneur too needs to work day in and day out – like the bamboo seed. No rest !

 

2.   Next in the first 5 years is it easy for a bamboo to sprout, find his tender roots in the hard nature of the soil !  It could be exploring various means and ways to do that – underneath the soil – and of course we don’t see it.

Same way an entrepreneur too explores and learns in their initial turbulent hard days.

 

3.  The bamboo seed in its first 5 years is unnoticed and so is the entrepreneur.

 

4.  Bamboo seed is independent in its exploration and decision making, but is interdependent on the soil, the oxygen, and the mineral salts – and of course the water that the gardener pours.

Likewise an entrepreneur is independent to explore and decision making, but is interdependent on the market ( read clients ), Team, Investments – and of course the HOPE God pours day in and day out.

 

In the last paragraph of his article Mr. Noah St.John has mentioned “It’s only by following a better STRATEGY-not “hoping” for something better-that you’ll see better results, and a real change for the better, in your life.”

 

Here I feel that the renowned author has erroneously underestimated the power of HOPE.

  • Bill Gates dreamt that he is going to put a PC on every desk – and that is HOPE.
  • Steve Jobs dreamt that he is going to change the world – and that is HOPE.

 

Hope triggers Strategy and not otherwise.  Am not discrediting the importance of strategy, but just an attempt to set the priorities right.

 

Like, If you want to go fast, Strategize and if you want to go far, HOPE !

 

Personal Experience

 

Way back in Jan 2010, when I was called into be a co-founder in Gyalizo KE, I never knew anything about Training industry.

 

After 1 year of failed attempts to procure even one single contract, and when everyone wanted me to drop the project – and also offered lucrative alternatives – it was HOPE that made me move forward.

 

And mind you, we were and are a boot strapped startup venture !!!

 

To know more, kindly read it here.

 

Visual presentation of our HOPE trajectory

 

Where there is HOPE, there is LIFE – and

Where there is WILL, there is WAY.

 

Stay Blessed, good times are just ahead.

 

Signing off,

Arun M Viswanth