The Renminbi Runaround: The Policy Changes Aren't For Real by Paul Krugman

About The Author: Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed Page and continues as professor of Economics and International Affairs at Princeton University.

Mr. Krugman received his B.A. from Yale University in 1974 and his Ph.D. from MIT in 1977. He has taught at Yale, MIT and Stanford. At MIT he became the Ford International Professor of Economics.

Mr. Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes. His professional reputation rests largely on work in international trade and finance; he is one of the founders of the "new trade theory," a major rethinking of the theory of international trade. In recognition of that work, in 1991 the American Economic Association awarded him its John Bates Clark medal, a prize given every two years to "that economist under forty who is adjudged to have made a significant contribution to economic knowledge." Mr. Krugman's current academic research is focused on economic and currency crises.

At the same time, Mr. Krugman has written extensively for a broader public audience. Some of his recent articles on economic issues, originally published in Foreign Affairs, Harvard Business Review, Scientific American and other journals, are reprinted in Pop Internationalism and The Accidental Theorist.

On October 13, 2008, it was announced that Mr. Krugman would receive the Nobel Prize in Economics.

Last weekend China announced a change in its currency policy, a move clearly intended to head off pressure from the United States and other countries at this weekend’s G-20 summit meeting. Unfortunately, the new policy doesn’t address the real issue, which is that China has been promoting its exports at the rest of the world’s expense.

In fact, far from representing a step in the right direction, the Chinese announcement was an exercise in bad faith — an attempt to exploit U.S. restraint. To keep the rhetorical temperature down, the Obama administration has used diplomatic language in its efforts to persuade the Chinese government to end its bad behavior. Now the Chinese have responded by seizing on the form of American language to avoid dealing with the substance of American complaints. In short, they’re playing games.

To understand what’s going on, we need to get back to the basics of the situation.

China’s exchange-rate policy is neither complicated nor unprecedented, except for its sheer scale. It’s a classic example of a government keeping the foreign-currency value of its money artificially low by selling its own currency and buying foreign currency. This policy is especially effective in China’s case because there are legal restrictions on the movement of funds both into and out of the country, allowing government intervention to dominate the currency market.

And the proof that China is, in fact, keeping the value of its currency, the renminbi, artificially low is precisely the fact that the central bank is accumulating so many dollars, euros and other foreign assets — more than $2 trillion worth so far. There have been all sorts of calculations purporting to show that the renminbi isn’t really undervalued, or at least not by much. But if the renminbi isn’t deeply undervalued, why has China had to buy around $1 billion a day of foreign currency to keep it from rising?

The effect of this currency undervaluation is twofold: it makes Chinese goods artificially cheap to foreigners, while making foreign goods artificially expensive to the Chinese. That is, it’s as if China were simultaneously subsidizing its exports and placing a protective tariff on its imports.

This policy is very damaging at a time when much of the world economy remains deeply depressed. In normal times, you could argue that Chinese purchases of U.S. bonds, while distorting trade, were at least supplying us with cheap credit — and you could argue that it wasn’t China’s fault that we used that credit to inflate a vast, destructive housing bubble. But right now we’re awash in cheap credit; what’s lacking is sufficient demand for goods and services to generate the jobs we need. And China, by running an artificial trade surplus, is aggravating that problem.

This does not, by the way, mean that China gains from its currency policy. The undervalued renminbi is good for politically influential export companies. But these companies hoard cash rather than passing on the benefits to their workers, hence the recent wave of strikes. Meanwhile, the weak renminbi creates inflationary pressures and diverts a huge fraction of China’s national income into the purchase of foreign assets with a very low rate of return.

So where does last week’s policy announcement fit into all this? Well, China has allowed the renminbi to rise — but barely. As of Thursday, the currency was only about half a percent higher than its typical level before the announcement. And all indications are that watching the future movement of the renminbi will be like watching paint dry: Chinese officials are still making statements denying that a rise in their currency will do anything to reduce trade imbalances, and prices in the forward market, in which traders agree to exchange currencies at various points in the future, suggest a rise of only about 2 percent in the renminbi by the end of this year. This is basically a joke.

What the Chinese have done, they claim, to increase the “flexibility” of their exchange rate: it’s moving around more from day to day than it did in the past, sometimes up, sometimes down.

Of course, Chinese policy makers know perfectly well that although U.S. officials have indeed called for more currency flexibility, that was just a diplomatic euphemism for what America, and the world, wants (and has the right to demand): a much stronger renminbi. Having the currency bob up or down slightly makes no difference to the fundamentals.

So what comes next? China’s government is clearly trying to string the rest of us along, putting off action until something — it’s hard to say what — comes up.

That’s not acceptable. China needs to stop giving us the runaround and deliver real change. And if it refuses, it’s time to talk about trade sanctions.

US Lawmakers Seal Deal on Historic Wall St Reform

US lawmakers hammered out a historic overhaul of financial regulations as dawn broke over the nation's capital on Friday, handing president Barack Obama a major domestic policy victory on the eve of a global summit devoted to financial reform.

In a marathon session of more than 21 hours, congressional negotiators agreed to a rewrite of Wall Street rules that may crimp the industry's profits and subject it to tougher supervision and tighter restrictions.

The bill, the most sweeping financial rules revamp since the 1930s, is headed towards final congressional approval next week although implementation will be bogged down for months in regulatory rule-making.

The legislation would set up a new financial consumer watchdog, create a protocol for dismantling troubled financial firms, and mandate higher bank capital standards, all in an effort to avoid a repeat of the 2007-2009 credit crisis that hammered the economy and triggered taxpayer bailouts of floundering firms.

To secure agreement, lawmakers reached deals in the final hours on the most controversial sections, which restrict derivatives dealing by banks and curb their proprietary trading to shield taxpayer-backed deposits from more risky activities.

Banks will be allowed to keep most swaps dealing activity in-house, though the riskiest trading would be pushed out into an affiliate. They will also be permitted small investments in hedge funds and private equity funds.

The concessions could lessen the impact on bank profits.

The KBW bank stock index, which registered its worst performance since October last month, closed up 2.9%, with Goldman Sachs Group Inc and Morgan Stanley, two of the banks that will be most affected, helping to lead the way.

The reforms must still win final approval from both chambers of Congress before Obama can sign them into law. Quick approval is expected.

The Democrats had raced to complete their work before Obama left for a weekend meeting of the Group of 20 economic powers, where he can tout the changes as a blueprint for other countries.

"Just as economic turmoil in one place can quickly spread to another, safeguards in each of our nations can help protect all nations," Obama said at the White House shortly before departing.

Despite last-minute deals, the bill has actually got tougher in its year-long journey through the halls of Congress. The Democrats rode a wave of public disgust at an industry that awarded itself rich paydays while much of the country struggled through a deep recession.

"They tried to water it down, but still there's enough regulation in there that it's going to affect banks, it's going to affect their profitability," said Chris Hobart, founder of Hobart Financial Group in Charlotte, North Carolina.

Passage of the bill will give the Democrats an important legislative victory, alongside health-care reform, ahead of congressional elections in November.

As part of the package, financial institutions would have to pay $19 billion to cover the estimated cost of the bill.

The House of Representatives could vote as soon as Tuesday, and Senate action is expected to swiftly follow.

Under congressional rules, it would be difficult but not impossible to change the bill, and Democratic leaders are confident that they won't have to do so. But they will need to hold the support of some moderate Republicans in the Senate to ensure that they can clear any procedural roadblocks.

Lawmakers munched chocolates to stay awake as regulators and administration officials hovered in the wood-panelled room and as the night wore on, they yielded the microphones to staff to debate the bill's finer points.

The panel completed its work just after 5:30am (3pm IST), more than 21 hours after it sat down to its final negotiating session.

Along the way, the negotiators resolved several sticking points that had threatened to scuttle the bill.

They agreed to water down a proposal by Democratic senator Blanche Lincoln that would have required banks to spin off their lucrative swaps-dealing desks to a separately capitalised affiliate.

Dozens of House Democrats said Lincoln's proposal would force trading to move overseas, and they threatened to vote against the bill if it included the provision.

The compromise allows banks to stay involved in foreign-exchange and interest-rate swaps dealing, which account for the bulk of the $615 trillion over-the-counter derivatives market.

They also can participate in gold and silver swaps and derivatives designed to hedge banks' own risk.

But they would need to spin off dealing operations that handle agricultural, energy, and metal swaps, equity swaps, and uncleared credit default swaps.

"Quite frankly, common sense prevailed," Lincoln said shortly after agreement was reached on the bill. "Our objectives were to get the risky stuff out of banks. We figured out how to do that."

Lawmakers resolved another controversial element around midnight when they agreed that banks should face restrictions on the proprietary trading they do for their own accounts and not for their customers.

As with Lincoln's swaps provision, the financial industry won significant last-minute concessions in that rule, named for White House economic adviser Paul Volcker.

The final version of the Volcker rule would give regulators little wiggle room to waive the trading ban, but it would allow banks to invest up to 3% of their Tier 1 capital in hedge funds and private equity funds.

The bill would dramatically reshape the US financial landscape. The industry is already turning its sights on how it might influence implementation by regulators.

"We need to hold the course," Federal Deposit Insurance Corporation head Sheila Bair, one of the regulators who would be charged with putting the reforms in place, told Reuters. "We cannot let ourselves forget what happened in October of 2008" when the financial system risked breaking down.

The legislation sets up a new agency within the Federal Reserve charged with protecting consumers of financial products. It also gives regulators new power to seize troubled financial firms before they harm the broader economy.

Though it leaves largely intact the patchwork of federal regulators that failed to stop the last crisis, it sets up an inter-agency council to monitor system-wide risks to stability.

It forces much of the over-the-counter derivatives market, which worsened the financial crisis and led to a $182 billion bailout of insurer AIG, onto more accountable channels like clearing houses and exchanges.

Larger banks will have to raise more capital to help them ride out future crises.

Credit-rating agencies such as Moody's Corporation could see their business models upended by regulators seeking to resolve conflicts of interest, while debit-card issuers like Bank of America will probably have to reduce the transaction fees they charge merchants who use their cards.

What To Do When You Lose Your Credit Card? A Dozen Things to Remember

Shaina Singh was in a hurry to catch her flight to Delhi. The airport was unusually crowded. A large group of teenagers had come to bid their friend adieu.

Fumbling with her flight tickets and business meeting documents, she pushed her way through and managed to queue up at the check-in counter just in time.

There she opened her long-rectangular wallet, which she used while travelling. Everything appeared to be in place. Or, maybe not! She looked again and realised something was amiss. It was one of her cards —- the platinum credit card she had got barely a month back. But she had to go through. The meeting was important and she had enough cash anyway. She would follow up on the card once back in Mumbai.

While everyone feels the pinch of losing hard cash, the loss of credit card is often ignored. Many are even unaware of the procedure to report a lost card.

So it was with Shaina. Little did she realise that the entire Rs 2 lakh limit on her platinum card would have been used up by the time she was back. The credit card company said it was her fault, for having failed to report the loss sooner.

Moral of the story: do not take the loss of a credit card lightly, unless you are okay with coughing up significant sums for expenses incurred by someone else.

Here’s what Shaina should have done:

Stored the credit card 24-hour helpline number on her mobile phone. Alternatively, she could have called a number-search firm such as JustDial and taken the helpline number.

If Shaina was abroad, she could have used VISA/ MasterCard Global helpline numbers to report the loss.

Called up the helpline number as soon as she realised she had lost the card. Credit card companies say the loss has to be reported within 24 hours of loss. But the sooner you inform, the safer you are. Card companies would have nothing to do with a claim if fraudulent transactions are made before you informed the helpline. Once the loss is reported, however, the onus for any fraudulent transaction made on the card lies with the company.

Recorded the call to the card helpline or kept a note of the call details such as the time, the executive handling the call and its duration. The company can always dispute the time intervening the fraudulent transaction on your card and the time you called to report its loss. As there is no acknowledgement given after you report the loss, you might have to prove the call was made.

Kept the credit card details such as card number, expiry date and type of card handy, in a place other than the wallet where the card was kept. The helpline would need the details to block the card. If you don’t have the number handy, ask the executive to help you by giving other relevant details such as full name, address etc.

Rushed to a police station or asked the airport security how to lodge a first information report (FIR).The credit card company needs the FIR along with a letter stating the loss of the card and asking for blocking the old card and replacement. The letter should have details such as the card number, time and date you realised the card was lost, time you reported the loss to the helpline and your contact details.

Checked the credit card kit given to her and noted down the address where the letter and the FIR needed to be sent. Alternatively, she could have taken the details from the website of the card company.

Erased the 3-digit CVV number on the card after memorising it or noting it down somewhere safe. Remember, this number is not to be revealed even to the helpline executive or in the letter.

Checked with the helpline the exact procedure for reporting loss of a card, as it keeps changing from bank to bank. Some banks don’t make it mandatory for card holders to send the FIR copy or write a letter; a phone call is enough.

Had an insurance cover against loss of credit card. Several card issuers offer the facility, particularly on cards that have a higher credit limit. Find out from your bank customer care if you could get a cover.

Reported the loss immediately even if she had an insurance cover. There are clauses in the insurance policy stating that fraudulent transactions incurred before the loss was informed to the bank would not be compensated by way of the insurance cover.

Waited for a new card. In case you realise after blocking the card that you had forgotten it at home and not lost it, don’t head for the shopping mall with it. The old card is of no use and is to be destroyed carefully by cutting it diagonally. Wait till the new card arrives.

In Laxman We Trust

A one-man opposition party – that’s what comes to my mind when I think about R K Laxman. For over 50 years, he has captured Indian politics, politicians, and their impact on the common man, in his cartoons. It is impossible to imagine the Times of India without his pocket cartoons tucked away in the corner of the front page, or his single-panel political commentary that reflected the political situation or public sentiment of the day.

Growing up in the 80s, a decade of hope, achievements, disappointments, tragedies, scandals, the loss of innocence and arguably a decade that changed India and the world, I, like many others, depended on newspapers and Doordarshan for information. But through his cartoons, it was R K Laxman I came to trust and listen to when it came to cutting through the everyday spin. At the time, I didn’t know why, but as I write this piece, I find it even harder to pinpoint how one man was able to enter that zone of trust and stay there for such a long time.

Was it his sense of humour or his uncanny ability to gauge the public mood? Was it the imagery or was it his use of satire, wit to state the obvious and evoke laughter, a chuckle or a smile? Maybe it was his ability to provoke thought and subtly influence public opinion. After all, who could suspect an innocent cartoon of having a lasting impact when public memory is so mercilessly short? But these are the two things that stand out about the man and his work – his unbiased opinion of politicians and issues of all sizes, shapes and backgrounds and his ability to package this opinion in a manner that an 11-year-old could begin to understand what was happening around him.

Laxman’s cartoons showcase his keen sense of observation and a sharp political mind that could foresee future events. One such cartoon is from the time Rajiv Gandhi became the Prime Minister of India, where Rajiv is shown reading a newspaper headlined “Sonia to help Rajiv at Amethi” and telling a little boy sleeping in his cot “Sure, you too can help so long as we don’t give the impression we are trying for dynastic rule”. During the height of the Ram Janmabhoomi movement, a cartoon titled “The other side of the chargesheet” shows P V Narasimha Rao, the then PM, reading out criminal charges to L K Advani and Murli Manohar Joshi, who cannot contain their joy looking at the back of the chargesheet that reads “Vote for BJP”. More recently, it is his portrayal of Prime Minister Manmohan Singh being under Sonia Gandhi’s control, saying, “Nobody is breathing down my neck and interfering with my work. I am in complete control” with Sonia shown doing exactly that – sometimes prophetic, sometimes stating the obvious, but never far from the truth.

Throughout his five decade career, no politician has been out-of-bounds of his criticism; no issue too small for his commentary, and no suffering too trivial for his attention, Laxman has tackled every facet of Indian politics with a rare freedom and lack of malice. Governments have come and gone, issues have captured our imagination and then faded away, politicians have risen and fallen, deceived us, failed and disappointed us, but one man has stayed true, soldiering on, vigilant, tireless like the fabled crow that dropped pebbles into a pitcher with little water. At a moment when he is in critical condition, I can only pray that R.K.Laxman gets another shot, that the man who made us think, and laugh, may yet have the last laugh, because without him, there would be no credible opposition left.

Beating the Reader's Block by Sanjay Sipahimalani

A few weeks ago, I was afflicted by a nasty ailment. Reader's block.

Try as I might, I was unable to concentrate on a book - any book - for more than a paragraph or two, sometimes not even that much. The last time this happened to me was, as I recall, eons ago, after studying for a grueling bachelor's degree. (In commerce, in case anyone's asking).

Then, of course, it was because of reading too much about the many advantages of double-entry book keeping, combined with several unsuccessful attempts to tally balance sheets. This time around, I was at a loss to ascertain a cause.

Perhaps it was because I'd recently raced through too many novels in an attempt to meet review deadlines. Perhaps it was that, under the solemn influence of Literature with a capital L, I was picking up books with no semblance of plot. Perhaps it was just too hot to read.

A friend wrote to say he'd treated a similar ailment by swallowing a dime western or two. This cured him completely, but with the unfortunate side-effect that he read nothing else for the next six months.

It was at this time, as I was searching the shelves for the Conan Doyles and Wodehouses, that I found myself in possession of a Kindle. (Yes, I know I'm late to the party, but then I've never been what marketers like to call an 'early adopter'.)

At first, I was wary of it, especially since, even after being plugged in for charging, it did nothing but lie there, alone and palely loitering. Finally, it registered signs of life.

I had toyed with a friend's Kindle before, but an issue of Newsweek was the only thing of interest I'd found on his device. Since one of the chief reasons to own a Kindle in India, I'd always thought, was to instantly access titles that you wouldn't otherwise come by at your garden-variety bookshop, I began to browse the online store with great expectations.

That was the first disappointment. Elif Batuman's The Possessed? Not available. Zachary Mason's The Lost Books of the Odyssey? Not available. David Mitchell's The Thousand Autumns of Jacob de Zoet? Not available. Even The New Yorker isn't available for download if you're in India. (India Today is, if that makes you feel better.)

Not being well-versed in the fine arts of digital rights management, I have no idea if the above and more will be made available soon - indeed, whether there will be a time when we can share e-books the way we do books. Be that as it may, there are of course heaps of other titles to download, as I found to my delight, hastily acquiring Paul Murray's Skippy Dies and Alberto Manguel's A Reader on Reading. (A nice touch of irony, reading about someone who'd devoted his life to the printed word on an e-book reader.)

It occurred to me shortly after that there's so much to fiddle with that it can take a while before you actually get down to what the Kindle is designed for. After every page, I began to change the font size as well as the number of words to a line. Then I started to worry that having the wireless on all the time would affect battery life, so I experimented with switching it on and off. After that I tried to work out how the annotations and clippings worked. Then I realised that I hadn't paid any attention to what I was actually reading, and so went back to the beginning.

At this point, I recalled that there are loads of free e-books out there to download, too. So back to the Kindle Store I went, and discovered authors from Dickens to Kafka to Austen that could be acquired for the princely sum of 0.00, payable in US dollars.

Over the next few nights, I settled down to actually perusing the words on the screen, and now, two things became evident. First, the ability to immerse oneself in a book, to lose oneself in the "vivid and continuous dream" that John Gardener wrote about, is linked to familiarity with the medium itself - that is, printed words on a page. With the Kindle, you're all too aware of the strangeness of it: the awareness that you're reading it is always at the forefront.

Second, and linked to the above, that little blurred flash of black that occurs whenever you turn a page is distracting. The split-second it takes for the e-ink to settle down is enough to once more remind you that it's not a book you're holding but an alien device.

These impediments recede with time, and while it would be going too far to say that I tuned them out altogether, they did lose much of their power to distract -- despite other obvious drawbacks such as the greyness and one-font-fits-all attribute.

In my case, acceptance was also hastened by the black leather cover that makes holding the Kindle more akin to holding a book. (Perhaps I ought to keep a printed book next to me while reading on the Kindle so that every now and then I can pick it up and sniff it. That aroma is another one of the things that the Kindle cannot replicate, unless they invent scratch-and-sniff screens.)

The Kindle, based on my experience so far, will always remain for me a supplement to the printed book and not a replacement. I can't see myself wanting to swap the books on my shelves with e-books in the manner of someone replacing vinyl or tape with CDs, for instance. A supplement, yes, but one that's convenient, handy and - dare I say it -becoming irreplaceable.

And so it came to pass that after all the fiddling I realised I'd not only re-read half of Kafka's The Trial -- in an indifferent translation -- but also made significant inroads into the Murray and the Manguel. I'd found the remedy to my reader's block, and it had nothing to do with a printed book.

Small Pleasures of Life by Priyadarshini

It’s amazing how sometimes we’re overwhelmed by the simple pleasures of life. Like a few words of reassurance, a compliment, a look of the eyes that tells you it’s one of genuine concern, a squeeze of the hand, a kiss, a hug or even a phone call.

It’s a pity that we often overlook them in our daily grind and look for more expensive means to tackle our depression, insecurity, self-doubt, self pity, and the works. And thanks to our myopic vision, the psychologists, marriage counsellors, education counsellors, and whathaveyous are having a field day out there.

Relationships and marriages are the worst sufferers. They are falling apart like nine pins because neither can take the stress at work and obviously they don’t have the patience or tolerance to hear each other out amicably once back home. The war’s given up even before it’s begun. They agree a third party intervention is essential to sort their personal matters out. And sharing confidential information with third parties always come for a price. A rather hefty one at that. But no worries, there’s enough disposable income to waste on the quirks. One’s pain and loss provides vicarious emotional and financial pleasure to another.

“Am in love” is a phrase that has been duly replaced with “Am going steady” “or am in a relationship”. Being in love, feeling the warmth of his/her presence, wallowing in love, blinded by love are all passé and one runs the risk of being branded an emotional fool. It’s all about a “workable relationship” now. Will it or won’t it work. Simple.

Move aside, heart. Step in, head. Don’t dream about those never-ending walks into the sunset or the cosy rain-soaked cuddle. Just do it, sing those romantic songs and dance around a few trees, if you must.

Don’t just plunge in and say “I love you.” Think of the kind of “investments” you need to make and the various “exit plans” you must keep handy before saying “I Do”.

Alas, why didn’t I think of these ever? Haven’t made any investments, nor do I have an exit plan. Just plunged into the deep end and swimming my way through. Is my future doomed? Or am I just being an incurable romantic?

At the risk of all those rotten tomatoes landing in my comment section, I’d still say: People, save that money, take some time off to sit down and look into each other’s eyes, hold that hand, smile, hug and kiss. And, when you are miles away, just call. Priceless ways of working wonders on that mind and heart.

Look at Some Awesome Places in Maharashtra, Goa and Karnataka

Bhimashankar Cliffs in Karjat near Mumbai

Backwater in Ratnagiri District, Maharashtra

Amboli Ghat, Konkan, Sindhudurg District, Maharshtra

Doodhsagar Waterfalls in Goa

Ganaptipule Beach, Ratnagiri District, Maharashtra

Ganaptipule Beach, Ratnagiri District

Jog Falls, Vitla, near Mangalore, Karnataka

Karwar Beach, Karnataka

Malwan, Sindhudurg District, Maharashtra

Marleshwar Waterfalls, Ratnagiri District

Mumbai-Goa Highway near Kashedi Ghat

Paddy Fields in Konkan

Pune to Shrivardhan, Raigad District, Maharashtra by Bus

Rice Fields in Chiplun, Ratnagiri District, Maharashtra

A typical village in Konkan, running from rugged section of the western coastline of India from Raigad to Mangalore

Stop the Innovation Wars by Vijay Govindarajan and Chris Trimble

Mr. Vijay Govindarajan has written this to me.

For the last ten years, my partner Chris Trimble and I have studied one critical question: What are the best practices for executing an innovation initiative?

Execution is the poor stepchild of the innovation challenge. People love to engage in the hunt for the big idea, but let's face it, an idea is only a starting point.

 

We published the article "Stop the Innovation Wars" in the July-August issue of the Harvard Business Review. 

The article describes how to build the right team for any innovation initiative, and, critically, how to ensure that it partners with, rather than fights with the established organization.

I hope you will find the article relevant and timely.

It was just an innocent comment. While working with a client at a Fortune 500 company, we proposed the formation of a special group to execute a new growth strategy. “For now, let’s just refer to the group as the innovation team,” we suggested.

The client rolled his eyes. “Let’s call it anything but that,” he said. “What is this so-called innovation team going to do? Brainstorm? Sit around being creative all day? Talk condescendingly about a superior organizational culture? All of this while operating with neither discipline nor accountability? All of this while the rest of us get the real work done?”

Wow. All it took was two words: innovation team.

In our experience, innovation teams feel a hostility toward the people responsible for day-to-day operations that is just as biting. The rich vocabulary of disdain includes bureaucratic, robotic, rigid, ossified, staid, dull, decaying, controlling, patronizing...and just plain old. Such animosity explains why most executives believe that any significant innovation initiative requires a team that is separate and isolated from the rest of the company.

But that conventional wisdom is worse than simpleminded. It is flat wrong. Isolation may neutralize infighting, but it also neuters innovation.

The reality is that an innovation initiative must be executed by a partnership that somehow bridges the hostilities—a partnership between a dedicated team and what we call the performance engine, the unit responsible for sustaining excellence in ongoing operations. Granted, such an arrangement seems, at first glance, improbable. But to give up on it is to give up on innovation itself. Almost all innovation initiatives build directly upon a company’s existing resources and know-how—brands, customer relationships, manufacturing capabilities, technical expertise, and so forth. So when a large corporation asks a group to innovate in isolation, it not only ends up duplicating things it already has but also forfeits its primary advantage over smaller, nimbler rivals—its mammoth asset base.

Over the past decade, we have examined dozens of innovation initiatives and identified some best practices. In the process we built upon foundational management theories such as Jim March’s ideas about balancing exploration with exploitation, and Paul Lawrence and Jay Lorsch’s argument that firms need to both integrate and differentiate corporate units. We came to the conclusion that the organizational model we prescribe—a partnership between a dedicated team and the performance engine—is surprisingly versatile. It can be adapted to initiatives that span many innovation categories—sustaining and disruptive; incremental and radical; competence enhancing and competence destroying; new processes, new products, new businesses, and high-risk new ventures.

Vijay Govindarajan (vg@dartmouth.edu) is the Earl C. Daum 1924 Professor of International Business and founding director of the Center for Global Leadership at Dartmouth’s Tuck School of Business. He was General Electric’s first professor in residence and chief innovation consultant.

Chris Trimble (chris.trimble@dartmouth.edu) is on the faculty at Tuck and is an expert on innovation within established organizations. Govindarajan and Trimble are the authors of The Other Side of Innovation—Solving the Execution Challenge (Harvard Business Review Press, 2010).

Trinidad's PM Breaks the Cultural Mould

Barely 24 hours after she was sworn in as the first woman prime minister of Trinidad and Tobago, Persad-Bissessar donned a life jacket and waded into the flood waters to tour areas affected by torrential rains sweeping across the Caribbean.

A devout Hindu, she swore on the Bhagavad Gita - the Hindu holy book - to do her duty to her people.

Even as congratulations poured in from around the world, she remained focused on "dealing with the people's business".

It was the most important task at hand, she told her 1.3m citizens during the live televised address of her historic swearing-in ceremony.

A descendant of Indian indentured labourers who came to Trinidad to work the sugar plantations from Uttar Pradesh and Bihar between 1845 and 1917, Ms Persad-Bissessar grew up with traditional Indian values and strong religious ties.

'No novice'

The landslide victory of the coalition led by her United National Congress (UNC) party in last month's election has brought a sense of euphoria and feeling of hope to this incredibly wealthy republic.

Trinidad and Tobago has sailed smoothly through the global recession, cushioned by a sea of oil and natural gas.

The squandering of billions of dollars by the former government and alleged corruption helped bring this 58-year-old grandmother-of-two into power.

She unseated former PM Patrick Manning whose People's National Movement (PNM) party had governed the country for 42 of the 48 years since its independence from England.

An attorney by profession, Ms Persad-Bissessar is no novice to politics having been the MP for her area Siparia, a rural town in the south of the island, since 1995.

In the last 15 years she has weathered many political storms, even as she broke gender barriers.

Former Prime Minister Basdeo Panday (1995-2001) appointed her attorney general and education minister during the UNC's first stint in office, and she even acted as PM.

But in 2007, in the lead-up to a general election, when it was clear that she was the best person to lead the party, Mr Panday refused to resign.

Ms Persad-Bissessar, who is married to a doctor and has a son, swallowed the humiliation, even giving a famous speech to the theme of Bob Marley's No Woman No Cry, in which she declared her undying support for her political guru.

But all that changed last December.

As then Prime Minister Manning became increasingly unpopular, Ms Persad-Bissessar saw a golden opportunity for the opposition forces to unite to topple the ruling People's National Movement.

'Smear campaign'

But as she launched her bid to take over the UNC, Mr Panday unleashed an attack on her reputation, suggesting that she was an alcoholic.

Ms Persad-Bissessar called the accusation "total falsehood".

"It is a smear campaign of lies, half-truths and innuendoes. Smear campaigns do not win elections. Sticks and stones may break my bones but words cannot hurt me."

Indeed, they did not.

On 24 January, Ms Persad-Bissessar became leader of the UNC with a landslide victory.

When Mr Panday refused to step down as leader of the opposition, she dealt with that too - persuading his loyal MPs to cross over to her side.

After she was appointed leader of the opposition, she hired the strategist who worked on Barack Obama's presidential campaign to assist her.

After a blistering, hugely expensive campaign that used high-tech, slick advertisement in all the media, including the internet, Ms Persad-Bissessar and her coalition emerged victorious.

And on 24 May she became prime minister.

Ms Persad-Bissessar has shown admirable political savvy in the last few weeks, openly courting the media and reacting swiftly to public opinion.

In her 30 May Indian Arrival Day speech she touched on "soft" issues such as race, gender and class inequality.

"As a child in the rural district of Penal I remember sharing meals from the same pot with neighbours of different racial, ethnic, social and economic backgrounds," she said.

"We all managed. If one had, then all had. Because then we were intuitively and instinctively our brother's keepers.

On her terms

"Time and circumstances have allowed many factors, including the divisiveness of some politicians, to keep us apart. But to go forward, we must go back.

"We need to rekindle those values, those strengths as a nation and as a people… And we must do so as one people with one goal."

She is intensely aware of the chance she has to make and change history on these islands.

She has already shown that she will be a prime minister on her own terms.

She declined the opportunity to meet US Secretary of State Hillary Clinton because parliament had not yet been convened.

She graced the catwalk at Trinidad and Tobago's annual fashion week at the end of May.

And she also made an appearance with local chutney musicians at a show.

Ms Persad-Bissessar, who graduated top of her class from law school, also confronted the delicate issue of gender tensions.

"Looking towards the future, one of the most important issues the national community must face is the widening gap between the liberated, modern, independent women and our traditional men who are being left behind," she said.

"Women are outperforming men in almost every sphere of life in our society and the women of east Indian ancestry are no exception to this rule. They have broken the cultural mould," she said.

No-one as much as her.

UBS Whistleblower, seeks pardon, awaits payday to do charity in India

But right now, Bradley Birkenfeld is mopping prison floors while serving term for his part in the Swiss bank's conspiracy.

He was once a UBS AG banker who handled a $200 million investment for a billionaire client, now makes 12 cents an hour mopping floors at the federal prison in Minersville, Pennsylvania.

Sleeping in a bunk bed in a dormitory-style building with 35 other inmates is far from the reward Birkenfeld says he deserves for exposing a massive tax-evasion scandal at UBS, the biggest Swiss bank. He told U.S. authorities how UBS bankers came to the U.S. to woo rich Americans, managed $20 billion of their assets, and helped them cheat the Internal Revenue Service.

Birkenfeld, 45, has asked President Barack Obama to commute a 40-month term he began in January at Schuylkill Federal Correctional Institution for his part in the conspiracy. He is seeking payment from the IRS whistleblower program and wants the U.S. Department of Justice to punish prosecutors who wouldn’t grant him immunity before his 2008 indictment and guilty plea.

“I delivered and documented this entire scandal, the largest in U.S. history,” Birkenfeld said in one of two prison interviews with Bloomberg News. “I’m the most famous whistleblower in the history of the world. It’s a question of doing the right thing, and that’s what I did.”

His disclosures preceded UBS’s decision to pay $780 million to avoid prosecution, admit it fostered tax evasion from 2000 to 2007, and turn over data on 250 secret accounts to the IRS. UBS later agreed to reveal data on another 4,450 accounts, a transfer upheld last week by the Swiss Parliament. For lifting the veil on Swiss bank secrecy, Birkenfeld said, he’s a hero, not a criminal.

Whistleblower Results

Prosecutors filed criminal tax charges against 16 UBS clients in the U.S., two UBS bankers, and three others accused of enabling the hiding of offshore assets. At least 150 other people are being investigated, according to the Department of Justice. Last year, 15,000 Americans sought to avoid prosecution by telling the IRS about offshore accounts.

Birkenfeld’s chief prosecutor, Kevin Downing of the department’s tax division, and his main UBS client, California billionaire Igor Olenicoff, take a different view of his actions.

Downing told a U.S. judge last August that, while prosecutors wouldn’t know about the “massive tax scheme” without Birkenfeld, he deserved 30 months in prison for initially refusing to detail his own role in the fraud and for not revealing his work with Olenicoff. Birkenfeld, Downing said, also wasn’t useful as a witness. The judge gave Birkenfeld 40 months.

Olenicoff, a real-estate developer who pleaded guilty in December 2007 to filing a false tax return, got two years of probation and paid $52 million in back taxes and penalties.

Billionaire Lawsuit

He sued UBS, Birkenfeld and others for racketeering. Olenicoff, who declined to comment, claims in his lawsuit that Birkenfeld defrauded him by investing some of his $200 million in thinly traded stocks without his knowledge.

Birkenfeld said he spends his days reading, exercising and talking to other white-collar inmates at his prison camp without bars. A neurosurgeon’s son from Brookline, Massachusetts, Birkenfeld is 6-feet 4-inches, weighs 220 pounds, and has piercing blue eyes framed by a goatee and a high hairline.

A U.S. citizen, he attended the Thayer Academy in Braintree, Massachusetts, and then Norwich University, a military college in Northfield, Vermont. He then got a master’s of business administration at the American Graduate School of Business in Vevey, Switzerland.

Currency Trader

Before spending 15 years in Swiss banking, Birkenfeld worked as a currency trader at State Street Bank & Trust Co. in Boston. His said his whistle blowing began there.

While at State Street, he said, he went to the Federal Bureau of Investigation to report what he considered illegal activity in 1994. The FBI investigated. No charges were filed.

Birkenfeld said he was offered a full-time job at the Boston office of the FBI. A former law enforcement official with knowledge of that relationship said that while Birkenfeld gave useful information to the bureau, he was not offered a job.

He then worked in private banking at Credit Suisse Group AG and Barclays Plc before joining UBS in 2001. He persuaded Olenicoff to move his assets to UBS from Barclays.

Birkenfeld was one of as many as 60 UBS bankers who criss crossed the U.S. trolling for rich clients, even though they lacked a required Securities and Exchange Commission license, he later told U.S. Senate investigators. They visited art shows, yachting regattas and golf and tennis tournaments, he said.

Encrypted Laptops

UBS trained bankers to avoid detection by regulators, urging them to carry encrypted laptop computers and falsely state on travel forms that they were entering the country for pleasure, not business, he said. The bank admitted it helped clients circumvent U.S. securities restrictions by referring them to outside advisers who set up sham companies in tax havens such as the British Virgin Islands, Hong Kong and Panama.

By 2005, Birkenfeld said, he was blowing the whistle again. He sent a memo to his superiors at UBS about a “very serious matter” regarding his compliance with UBS policies. He sent similar e-mails to top executives in the legal and compliance departments.

In October 2005, he resigned. Five months later, he wrote to Peter Kurer, then UBS’s general counsel, to say top management “actively encouraged” practices “forbidden” by the bank, according to the letter. The bank later reached a severance agreement with Birkenfeld over a disputed bonus, he said.

UBS spokeswoman Karina Byrne declined to comment.

Asked if he ever doubts himself, Birkenfeld said: “Absolutely not. I’m very sure of myself. I’m well educated and well traveled, and I think it’s important to understand that if I take on a mission, I’m going to see it to the end. I’m not going to be intimidated by the DOJ or UBS management.”

Whistleblower Award

When Birkenfeld decided to tell the Justice Department and IRS about UBS, he hired a Washington law firm, Schertler & Onorato LLP. Birkenfeld sought an IRS whistleblower award that allowed informants to be paid as much as 30 percent of tax proceeds collected based on their information. The IRS won’t disclose how much additional revenue it has reaped since the UBS crackdown.

On March 28, 2007, an attorney at the firm, David Dickieson, e-mailed a tax prosecutor, Karen Kelly, to say he had a client with a “once in a career case.” Three weeks later, he and partner David Schertler wrote a memo to prosecutors.

‘Extremely Wealthy’

They identified their client only as the “Salesman,” and said he worked at a large financial institution called “the Vault.” The institution offered services to “extremely wealthy” clients who didn’t declare their accounts to the IRS, they told the agency. They referred to one client as Slick the oil trader, saying he had more than $100 million in assets.

Prosecutors agreed to take Birkenfeld’s information in a session called a proffer, at which his statements couldn’t be used against him unless he lied. Birkenfeld wanted immunity. Prosecutors declined, saying they had to hear his story and corroborate it before they could agree to not charge him, Birkenfeld said.

Over three days in June 2007, Birkenfeld gave prosecutors details of how the UBS cross-border business helped rich Americans evade taxes, he said. He said he gave them the identity of Slick, a client of another banker. Birkenfeld said he couldn’t provide other names without immunity or a subpoena because of Swiss law forbidding disclosure of client information.

Changing Rules

“They told me they wouldn’t prosecute me,” Birkenfeld said. “Kevin Downing told me that in the first meeting. They refused to give me a subpoena or immunity until they saw that I was the real deal, as they said. They kept changing the rules of the game and said ‘We won’t give you immunity.’”

Prosecutors had “an easy way to solve” Birkenfeld’s dilemma, said one of his current attorneys, Dean Zerbe.

“Why didn’t they just give him a subpoena so he would speak?,” Zerbe said.

Birkenfeld said he returned to Switzerland and continued to provide documents to prosecutors as they probed his claims. By late August 2007, Dickieson e-mailed prosecutors to say UBS suspected Birkenfeld was talking to investigators, putting him “truly at risk” because the case was “threatening some very powerful people.”

Proffer ‘Terminated’

Downing and Kelly weren’t budging on immunity. They wrote to Dickieson on Sept. 6, 2007, to say Birkenfeld “terminated his proffer with the Tax Division regarding alleged criminal conduct” at UBS. They said they declined to grant immunity and could continue the proffer if Birkenfeld chose to do so.

Downing was a lead prosecutor in the indictment of 19 defendants in the largest criminal tax-shelter case in U.S. history, including 17 former partners and employees at KPMG LLP. In 2007, a U.S. judge dismissed charges against 13 defendants, saying prosecutors violated their constitutional right to counsel by pressuring KPMG not to pay their legal bills. The judge said prosecutors were following Justice Department policy at the time. Three defendants were convicted at trial.

Birkenfeld said he lost faith in the Department of Justice and decided to speak to the Senate Permanent Subcommittee on Investigations and its chairman, Senator Carl Levin, a Michigan Democrat.

That fall, the Senate committee gave Birkenfeld the subpoena he sought, and he gave investigators his story and client details, including those on Olenicoff. He also spoke to investigators from the IRS and the SEC.

‘So Stubborn’

“Everybody but the DOJ was friendly to me,” Birkenfeld said. “I just felt they were being so stubborn and then they were trying to make me out to be the bad guy when I was trying to help them. I didn’t break off the proffer. They failed to live up to their end of the bargain.”

Downing said Birkenfeld’s lawyers insisted he wouldn’t continue talking to prosecutors without immunity.

“He decided to not take advantage of the opportunity that was offered and tell us about his own involvement in the UBS tax fraud scheme,” said Downing, 44, a senior trial attorney who led the UBS prosecution. “He particularly failed to tell the Department of Justice about his involvement in offshore banking for Igor Olenicoff.”

Immunity, he said, starts with the proffer agreement.

“You only get immunized for the crimes you tell us about,” Downing said. “But you have to tell us about them. Had he told us the truth about his involvement, in all likelihood he would have been given immunity.”

Indictment, Arrest

The standoff continued into early 2008, when prosecutors secured an indictment of Birkenfeld from a federal grand jury in Fort Lauderdale, Florida. He was arrested in April 2008 at Boston’s Logan International Airport as he flew from Geneva for a high school reunion and meetings with Senate investigators and the SEC.

Birkenfeld helped prosecutors before pleading guilty two months later. At his plea, Birkenfeld said UBS made $200 million a year handling $20 billion in assets. He said he toted customer checks to deposit in European banks, and bought diamonds for a client, bringing them to the U.S. in a toothpaste tube. In an interview, Birkenfeld said the client wasn’t able to travel.

“I wasn’t smuggling them,” he said. “I was just bringing them.”

In the summer of 2008, prosecutors held the head of the cross-border banking business, Martin Leichti, on a material witness warrant and debriefed him over four months. By February 2009, UBS lawyers were in court admitting the bank’s wrongdoing to avoid prosecution.

Birkenfeld’s Sentencing

At Birkenfeld’s sentencing, Downing said Olenicoff would have been in jail had Birkenfeld told the truth about him. Downing also said he told Birkenfeld’s lawyers that he would seek a court order compelling him to disclose client information, which would give him protection from prosecution in Switzerland.

Birkenfeld said Downing lied on several fronts at that hearing before U.S. District Judge William Zloch. Downing said: “I’m a federal prosecutor speaking to a district court judge. The truth is what we deal in.”

Birkenfeld said Schertler & Onorato, the first of three law firms he hired, engaged in legal malpractice.

“Clearly, they made representations to me that were false that I was going to get immunity, and they had great contacts in the DOJ,” Birkenfeld said. “That was the whole reason why I retained them from the outset.”

The firm declined to comment. Birkenfeld wouldn’t discuss whether he may sue the firm.

Pardon Review

Andrew Ames, a spokesman for the Justice Department pardon attorney, said Birkenfeld’s application is under review and he couldn’t comment further. IRS spokesman Dean Patterson said he couldn’t discuss the case of Birkenfeld or any other individual.

U.S. law allows the IRS to reward whistleblowers after a confidential administrative review of their application. It may deny or reduce awards if a whistleblower “planned and initiated” tax cheating.

Birkenfeld’s case is being watched closely by other whistleblowers and their lawyers, said Washington attorney Erika Kelton of Phillips & Cohen LLP.

“He is obviously a very important whistleblower and a controversial figure, so people are very interested to see what the IRS does in this case,” Kelton said.

India, Philippines

Birkenfeld said that if he gets the IRS whistleblower award, he hopes to set up a nonprofit foundation and do charitable work in India and the Philippines, two countries where he has traveled extensively. He said that when he leaves prison, he intends to live in Europe or Asia. Birkenfeld said he “walked away” from a $1 million house in Zermatt, Switzerland, after his arrest.

“I don’t trust my government,” he said. “That’s why I lived in Switzerland for 15 years. How could I possibly trust our government after what I’ve been through? I have no desire to live in a country that treats its people this way.”

Indian Warship Tarkash Launched in Russian Yard

INS Tarkash, the second of the three follow-on Talwar-class stealth frigates, has been launched from a shipyard in Russia and will soon undergo sea trials.

The launch ceremony at the Yantar Shipyard in Kaliningrad was performed yesterday by Ramma Dewan, wife of Indian Navy vice chief Vice Admiral DK Dewan.

It was attended among others by the Kaliningrad Region governor and the Russian Federation Baltic Fleet chief, a Navy press release said here today.

Now, the warship will be fitted with all heavy equipment including its weaponry before it is taken out for sea trials later this year.

The frigate belongs to the elite Talwar class of warships, three of which Talwar, Trishul and Tabar are already in service with the Indian Navy.

The first of the follow-on warships, christened 'Teg', was launched on November 27 last year.

Tarkash is scheduled to join the Indian Navy in the second half of 2011, after commissioning in Russia.

These frigates have been constructed to suit Indian Navy's specific requirements and are highly potent platforms, the release said.

Their mission in Navy would span the entire spectrum of naval warfare -- air, surface and sub-surface.

The warships are capable of operating in blue waters and are at the forefront of the Indian Navy's task forces.

The features of the follow-on warships have been upgraded with a higher level of sophistication on the basis of Indian Navy's experience gained by operating the first three ships of this class, it said.

Tarkash, meaning 'Quiver', would carry supersonic BrahMos missile system, an Indo-Russian joint venture, with vertical launch capability.

The warship would be armed with cutting edge weaponry including advanced surface-to-air missiles, 100mm caliber artillery guns, close range guns, torpedos, rocket launchers and associated fire control systems.

The ship has the capacity to carry a Russian-built Anti-Submarine Warfare helicopter Ka-31 on board.

Powered by four powerful gas turbines, the warship can touch a top speed of 30 knots. The vessel is fitted with state-of-the-art navigation, communication and electronic warfare equipment.

It is also equipped with highly advanced radar and sonar systems for early detection and warning.

We would be happy if our readers give us interesting updates on what is happening in our country's defence preparation.

After IIT and IIM, how about affordable spas?

Or, How three young MBA-s set Four Fountains Flowing.

Indian Institute of Technology, Bombay and Indian Institute of Management, Ahmedabad — most youngsters would do anything to get the combination on their resumes, for it opens doors such as few others do.

But once in a while, one comes across somebody who’s been there, done that and still thought nothing of leaving the comfortable, high-paying job that the combination helped secure, for a much harder life.

Call it the bite of the entrepreneurial bug.

So it was with Anurag Kedia and Saurabh Garg, both IITB/IIMA graduates, who reached for a canvass all their own barely three years into their jobs with KPMG and Hindustan Unilever, respectively.

They found a kindred spirit in Garg’s colleague Sunil Rao, also an MBA, albeit from SP Jain, and set out on their own.

After much debate and brainstorming, and visits to places like Italy and Singapore, they decided to introduce the middle class to a concept until then restricted to the creme de la creme — spas.

Spas in India were all charging over Rs 4,000 for any therapy, reminisces Kedia.

“Several people were not even aware of spas, while others were unable to use them due to the high costs. Moreover, there were no spas in the tier II and III towns.”

Thus started in October, 2008, just a month after the banking crisis in September, the first of The Four Fountains Spa (TFFS) in Pune, a city they felt had the right mix of student community, working professionals, and traditional middle class households.

TFFS offered therapies at less than half the price the five star spas charged, at Rs 900-1,200.

The idea is to provide a learning platform to customers in their own language about the various therapies, their benefits, etc, since most customers are first timers to spas, says the troika. And why Four Fountains? It’s after the four faculties of existence — body, sense, mind and soul — which the spa will cater to.

Initial funding for the venture came from Fulcrum Venture India, a Chennai-based venture capital group.

Today, TFFS runs as many as eight spas — in Pune, Goa, Manali and Aurangabad — through the venture-funded company CMYK Health Boutique.

Each spa, spread over approximately 1,000 sq ft, requires an investment of Rs 40-50 lakh and the company, which has a turnover of around Rs 2 crore, aims to reach the Rs 7 crore mark this fiscal.

The target is to set up 300 spas by 2014, in places like Bangalore, Mumbai, Bhilai, Jabalpur, Nashik, Nagpur, Sholapur, Kolhapur and Indore, etc through a combination of franchisees and company owned outlets.

“We want to be present in 70-80 cities and towns in India. With each spa, we try to reach out to 30,000 households through discount coupons, membership offers. We get between 700-800 customers in a month, most in the 25-45 age group,” says Kedia.

Do our readers have anything interesting to tell us on what is happening in different parts of India? Do let us now what our students have done to become the best entrepreneurs.

What Ratan Tata wants from GenNext

"One hundred years from now, I expect the Tatas to be much bigger than it is now.

"More importantly, I hope the group comes to be regarded as being the best in India... best in the manner in which we operate, best in the products we deliver, and best in our value systems and ethics.

"Having said that, I hope that a hundred years from now we will spread our wings far beyond India."

The brighest jewel in the Tata Group's crown, Ratan Tata would be remembered as much for anchoring significant business deals as for restructuring the vast Tata empire, reducing hierarchy, focusing on profitable operations and increasing efficiency.

His speeches reflect the fire within him and are always inspiring to the core.

We present here the full transcript of this living legend's address to the graduating students of the Indian School of Business on April 8, 2006.

"Dean (Rammohan) Rao, Rajat Gupta, members of the board, ladies and gentlemen, members of the graduating class.

To stand before you after an overwhelming introduction makes me feel rather humble. Before I go on, I thought I would tell you a short story which depicts perhaps what some people other than Dean Rao might see what I do.

The story is of a man who goes to a shop to buy a parrot. He picks out a parrot and asks the shopkeeper how much it is. The shopkeeper says, '$5000.'

The man says, 'Oh! That's terribly expensive. What does this parrot do?' The shopkeeper says, 'Oh, he types in English with his beak.'

The man says, 'That's far too expensive. What about that parrot?'

The shopkeeper says, 'Oh! That one is $10,000 because he is proficient in 3 or 4 languages and he understands SAP.'

The man says, 'Well, I really don't want that, what about the last one there?' The shopkeeper says, 'Oh! That is $30,000.'

The man says, 'What does he do?'

The shopkeeper says, 'I really don't know, but everybody calls him chairman.'

And that I think is what some of the people in my organisation would probably feel.

It's a great pleasure to be here with you today and to be a part of what to all of you in the graduating class must be a great moment.

A great moment, because not only does it mark the termination of a curriculum that is well recognised and among the best in the country, but you also head into the business world in India at a time when India has certainly come into its own, and is very rewardingly been seen by the world around as a country on the move, and that you all have an opportunity to play a role in the future of this country's development.

In many ways I can only stand here and express my sadness for not being your age at a time like this because truly it is an exhilarating moment in time.

Most of you would and should look at the coming years as years of great fulfillment and great participation in what stands in the future of this country.

The responsibilities that you will have will also be very great. Many of you are going to be leaders of this country in the years to come and in that role you will not only have to excel, which I am sure you will in your careers, but you will have to demonstrate leadership to the people around you, the people who you serve and the communities in which you operate.

I would hope that most of you will in fact strive for leadership in a principled manner with values, because that would be the foundation that this country needs to have if it is to take its place in the world.

I would hope that each of you would lead by example and that each of you would live by the principles that you espouse.

That you will have a sense of vision, because one of the things that this country has had has been an inability to look into the future, our business leaders have sometimes been followers rather than leaders.

For this you would need determination and a sense of belief in what you are intending to do and I believe on many, many occasions you would have doubts as to what you are pursuing would be the right thing.

But if you do believe in what you are trying to do and you pursue it and stay with it in a determined manner, I am quite sure that you will succeed.

All of you have a special role, I think, to succeed -- it is your way of proving that the investment you have made or your parents have made in your education is the most valuable investment that you would have made in your life.

I would hope that as people who might take an elite position, would be considered amongst the elite in the country, you will always display humility in the manner in which you deal with your fellowmen, both in your company and in the country and you will continue to have passion in the areas in which you will work.

While all of you have a great satisfaction in the kinds of salary placements and the value that has been attached to you which is quite justified, I believe that each of us have another responsibility and that responsibility is to play our individual roles, small as it may be, to lift the quality of life of the 6 or 700 million people in the rural areas.

I hope that what you do, in some way or form, will directly or indirectly touch the lives of those people because that also will lead to the future development of this country.

Most of you I imagine will be deeply engrossed in your careers and I hope that each of you will have a tremendously exhilarating and rewarding life in the business community, but it is not business alone, I would feel that a class like yours would go into the world in India or elsewhere.

That you would leave your mark not only amongst your colleagues in industry, but for future generations who would look back on you and look to you at the contribution you have made that lives on after you.

I would like to wish you all the very best and great success in the life that will follow shortly.

Thank you.