Sochi Games draw to a close – Russia tops the medals tally

With crticism for incomplete venues, terrorism shadow, “anti gay laws” and corruption allegations, Sochi Games had begun with some apprehensions. The Russians, led by the Putin, were eager to showcase Russia in all its splendour.

With the games drawing to a close over the weekend and with Russia topping the medals tally followed by Norway, Russia has successfully managed to hold the games




Some food for thought

MJ Akbar’s piece this sunday here is some food for thought.

PM Manmohan Singh’s (MMS) popularity ratings took a mauling after the host of scams that broke out right under his nose. Ideally, to salvage some pride he should have been elevated upstairs to the post of the Prez and the “firefighter” of the Congress Pranab should have been appointed in his place. Veteran politician, well versed in the art of negotiations and deal making could have saved or even revived his party’s fortunes in the recently concluded Rajya Sabha elections and the all important Lok Sabha elections. Allies management would have been best handled by the much admired Pranab da.  

Chidambaram and Meira Kumar (the current speaker) were other candidate’s to lead the Congress Party charge. Chidambaram, with his relatively clean image and acceptability would have suited the role as PM candidate. Even Meira Kumar with her gentle image, was an acceptable face.

But with MMS continuing in office despite his negative image and the ever fumbling RaGa taking the charge of the poll campaign, things seem bleak for the Grand Old Party of Indian politics.  

RaGa Interview – The Good, the Bad & the Ugly

‘It’s better to keep your mouth shut and appear stupid than open it and remove all doubt’ – Mark Twain.

Almost a month since Rahul Gandhi, VP of the Congress Party gave his first formal TV interview to the Times Now news channel and the online world is flooded with jokes and parodies ridiculing it and one cant help but remember Mark Twains words.

Happened to see the interview. Here are the few pointers;


  • What appeared that he had a stock reply in store for questions for which he either didnt have any answer to or chose not to answer. This is not the worst of strategies if handled tactfully. Repeating
  • Avoided a mud slinging match with Modi despite being provocated over it.Appeared earnest and sincere on most issues

Bad: Replying to questions with TOTALLY unrelated answers aint a good strategy in an atmosphere which is so negative. It bound to attract ridicule and negative PR. A corollary of it is that it appeared that he didnt have plan or a vision for the country which was concrete. Just a vague grandiose plan to “change / open up the system” etc. It just wont gain currency with the voter, especially the young aspiring voter who has entered or on the verge of entering the job market.


  • Regarding politically sensitive issues like the 1984 pogram that resulted in the massacre of thousands of Sikhs, he could have followed what his mother and his party’s PM had done. That is to tender an apology. Which is what is his partys stance on it. By taking a combative stance on it, he seemed to have ruffled feather.


Ideally he should have started his interview series say on a DD, after which he could have graduated to the popular channels with grilling anchors. Already the international media has termed RaGa as "lacklustre heir apparent". RaGa cannot afford this since competition is severe and unforgiving. The narrative, too, has changed with development & jobs high on voter wish-list. Accepting the mistakes of his party led government and highlighting the achievements along with a concrete vision for the future would augur well. Ambiguity with respect to his vision, saying things like "want to change the system " & "women's empowerment" just wont click as people want action. Apparently RaGa had planned a media blitzkrieg with inteviews in television and print. But after the disaster he seems to have rolled back his plans.

FB “likes” Whatsapp, buys it for $19 billion

It was started by Ukranian and US born former Yahoo executives in 2009 and named so because it resembled “what’s up?”. With their motto being “ build a really cool product that people would use every single day..” , they seem to be on their path of achieving their motto with nearly 45 cr users , 70% active daily users. 10 lac users adding everyday and nearly $ 20 million in revenues. Advertising revenues are nil , what with its founders averse almost hating them in line with their motto of keeping their product “cool”. Of it 50 odd employees 32 are software engineers and thus with a user base of ~45 Cr users each of its engineers service more than a crore users.

Whatsapp is essentially a mobile messenger app tht allows users to chat with users online, send messages to offline users, know when users were last online, share photos / videos almost instantaneously, know their ” statuses”, even send audio messages etc. 

Lets look at FB. Started out in 2004 by zuckerburg, saverin and moskovitz primarily as a social networking site. There were people like former napster founder parker and some VC`s who jumped in slightly later. Over time fb developed an inbuilt fb messenger app and acquired instagram (photosharing) in 2011 for $ 1 billion. It tried acquiring snapchat last year for $ 3 billion. In zuckerburg`s words they have started “thinking mobile” all the time. 

To cut the chase short, Whatsapp is what FB wants to be, a collection of apps, focused on the mobile platform with high user engagement. 

What about the deal value? An astonishing $ 19 billion ( $4 billion cash, $12 billion in stock, $3 billion in restricted stock) for almost negligible revenues or profits. So is it all  castles in the air? Not quite, we saw how whatsapp fits in FB`s overall scheme of things. But is that enough to justify such value ( only 13 indian listed companies command higher valuations that have been around for ages). Well, the answer really lies in who was wooing whatsapp before FB snapped it. Google. Larry Page led google was chasing it. It fit googles strategy since google didnt have a messenger app. Although , google chat was decent messaging app it had modified it to the hangout version which really didnt take off. Already google controls the OS end of the mobile ecosystem. Buying whatsapp would have given it foothold in thr messenger space & allow it to take on FB. 

Thus, by buying whatsapp, FB is indeed thwarting Google in the war to win mindshare. Its simply not PV of future cashflows. Its a calculated gamble on the future technology ecosystem.

Rooney is now equivalent to big money

Wayne Rooney has always been a great footballer right from his early days in Everton. This fact became more prominent when Manchester United signed him at the age of 16. Since then he has never looked back and become a United great in the last 7-8 years at the club.

But like any another journey this one has also had its ups and downs. He threatened to leave the club in 2010 citing the lack of ambition of the club to sign big players. At that time he was convinced by the club of their goals and signed Van Persie.

But then a major saga broke out and he had a fall with the great manager Sir Alex over the place he would play. The problems elevated to such heights that Sir Alex while retiring in 2013 said that Rooney had made a transfer request.

This was denied by Rooney and he kept playing for United under new managed Moyes who was his manager at Everton and with whom he had a fall out after his transfer to United.

But in the dismal year for the club he was the only ray of hope in spite of all the rumours of him leaving.

Finally on Friday these rumours were put to rest after Rooney signed a blockbuster multi million deal which would earn him a wage of £3,00,000 per week making him the highest earning player in EPL history.

So the question is what does both parties gain from this money spending deal?

For United this is a transition phase with ageing players. Moyes is looking to overhaul the squad this summer by going on spending spree and Rooney and recent Mata deals would be a signal to big players to come to United even if they fail to qualify for CL.

In Rooney they also have player with high work ethics and one who fits in various roles like Center Striker, Midfielder just behind the main striker. This gives Moyes the flexibility of going with traditional 4-4-2 formation or in future with the attacking 4-3-3 formation.

For Rooney this deal apart from big money gives him a sense of security that he is amongst the most important player in this club who is respected and loved by the fans.

This also gives him a chance to enter history books by becoming the most famous football clubs highest goal scorer. Currently he is on 209 (after Saturdays goal against Crystal Palace) and 40 short of Sir Bobby Charlton’s all time record of 249 goals.

He can also be great public figure if his staying back can inspire the club back to the heights United have become known for in the past.

Everyone knows that the amount paid is astronomical but on the hindset it could prove a win-win situation for both parties.

The deal also proves the age old cliche correct which goes as “A known enemy is better than an unknown friend”!!

India’s Interim Budget – Comments

With elections round the corner, the interim budget (called as the vote on account) was passed yesterday 17th February, 2014. Against the run of play, talk to reining in inflation which is what the RBI has been going hammer and tongs with, Chidambaran actually is stoking aggregate demand by cutting excise on small, medium and SUV’s. Election positioning, targeting middle class votes, seems to be on the mind of the finance minister. Other stuff, here it goes,

On the expenditure side,

  • Non plan expenditure (+) 12% YoY (FY14 RE vs FY13, even a comparison with the BE shows a rise) led primarily by interest outgo, which incidentally is the largest component of government expenditure. Interest and subsidies contribute ~ 40% of total expenditure of the government which is why there is so much hullabaloo over subsidies. Rs 2,50,000 Cr (17% of the total spend) of subsidy outgo over food, fuel and fertiliser could have been productively spent.
  • Plan expenditure (+) 15% YoY (FY14 RE vs FY13, however a comparison with the BE shows a fall, (-) 15% contraction led by Plan revenue expenditure which in turn was led by revenue expenditure on central plan).
  • So splurging in the form of higher interest outgo, subsidies continue. Dont create a capital asset. But there’s a curtailment of expenditure which could create assets.

On the receipts side (revenue),

  • Revenue receipts (+) 17% YoY (FY14 RE vs FY13, led primarily by tax revenues and non tax revenues too. Government has extracted its pound of flesh from PSU companies in the form of dividends). However a comparison with the BE shows a fall (-) 2.56% led by an across the board shortfall in collections of direct taxes and indirect taxes primarily excise which (-) 9.16%. This fully captures the slowdown in the economy as a robust economic activity reflects in tax buoyancy.
  • Thus, revenue growth has been tepid. Government has managed to squeeze Coal India and receive special dividend. Tax revenues, although showing a growth over FY13, have slowed down considerably.

On the receipts side (capital),

  • Divestment of equity holding shows no growth.
  • Receipt from small savings shows a healthy growth (+) 35% YoY (FY14 RE vs FY13)
  • Gross market borrowings are the highest ever in absolute terms at Rs 5,97,000 Cr (Market expected a higher amount). Maturities are huge next year, to the tune of Rs 1,39,700 Cr.

So overall on the receipts side, slow down in tax revenues was witnessed. Government managed a higher dividend payout from the hapless PSU’s.

Thus, curtailing productive expenditure and squeezing out a non – recurring receipt has resulted in fiscal deficit as % of GDP to 4.6%. 

Election trends – Vote behaviour – 2 months to go

With 2 months to go for the Lok Sabha elections, party positioning has begun in full swing. Selling their wares / product (vision for the future) to their consumers (voters) can be seen everywhere. RaGa on TV seems to be earnestly urging voters to join his “movement”, Modi over Chai Charcha is busy discussing his vision and this Friday we saw Kejriwal of the AAP (topic of another post) announcing his prime ministerial ambitions by bailing out of power to position himself as a martyr. So what products do we have in the market now;

1) Continuity, Staus Quo – By RaGa

2) Change, Good and decisive governance – By Modi

3) Corruption free governance, martydom over corruption – By Kejriwal.

4) Alternative (only slogan being a Non Congress and BJP alternative) – By Third Front

MJ Akbar has a nice piece here 

Trend as they say is our friend. Trends suggest that the incumbent Congress is headed towards a heavy defeat in the forthcoming elections. Their allies (mainly the SP, BSP, DMK ) too seem to be headed towards a similar fate. Regional parties seem set to reap a windfall along with the principal opposition party. AAP challenge (topic of another post) seems to have suffered a dent to its image over the drama being played out in Delhi.

Voters are fed up with the non – performing government at the centre with ‘compulsions of coalition politics’ excuse to justify non – performance or worse still corrupt practices. Strategic voting would ensure a stable government with a decisive majority. Recent state election results indicate this trend.