in-fin-nitie

www.nitie.edu

Volume 5 Issue 1

www.street.nitie.org

Bitcoin

Prospects and Future

$TREET/NITIE
IN CONVERSATION

Rohit Shah,
Founder & CEO
gettingyourich.com

How Good or Bad is

Food Security Bill

The consequences of
Innovation in Financial
Products

Indian Pharmaceutical
IndustryReport

Message from the Convenor

Heartiest congratulations to all of you. With the release of yet another
edition of the magazine, we are getting bigger and better and it gives
me immense pleasure and satisfaction to be the convenor of Street.
In-FIN-NITIE has given me the opportunity to work with the students
and advance forth with the common goal of learning and practising
finance.
As always, In-FIN-NITIE brings you something new this time around
too. After a series of issues with identified theme and articles related
to that theme, the current issue just gave the students to write about
finance. Themes and matching articles aside, this issue has a plethora
of written words by students about whatever caught their eye in the
field of finance.
I applaud the effort of Street for their unstinting efforts. I hope they
strive to take the magazine to greater heights, and also hope that issue
will entertain you and keep you engaged about the recent happening is
the world of finance.
We look forward for your comments and wish to bring out more
interesting issues in the future

ADD

Dr. M Venkateswarlu
Asst. Professor of Finance
Patron
Prof. Ms. Karuna Jain
Director, NITIE
Convenor
Prof. M Venkateswarlu
Editorial Board
Anupam Dhamija
Apoorva Garg
Meera Mohan
Nitin Sengar
Kumar Utkarsh
Pinaki Ghosh
Rohit Chopra
Sourav Bhattacharya
Design Team
Pinaki Ghosh
Kumar Utkarsh

Editors Note
Nobel Peace Prize Nominee Leon Louw famously said Every informed
person needs to know about Bitcoin because it might be one of the worlds
most important developments. Taking a cue from it,this edition of InFIN-NITIE cuts through the noise around bitcoin and brings to you the
detailed analysis on the prospects and future of this cryptocurrency, which
for some is the next big thing.In our special column where we interview
industry bigwigs,we bring to you in this edition a candid interview with
Rohit Shah, CEO of gettingyourich.com.
In our quest to bring to our readers all the latest happenings in and around
the financial world, we dive in to other key talking points like innovation
in financial products, insight into the differences between horizontal
and vertical FDI,and a critical analysis of food security bill . Health is a
crucially important social and economic asset a cornerstone for human
development, thus dont forget to walk through our review of Indian
pharmaceutical industry.
Following the trend, we were inundated with brilliant and exotic articles
that really made us toiled hard to find the best. We extend our sincere
gratitude to all the authors who burned the midnights oil to write such
exquisite articles. In our endeavour towards continuous improvement we
invite feedback and criticism at
street.nitie@gmail.com .

Will growth be a
casualty in a battle against
fiscal deficit and CAD?

How Good or Bad is Food Security Bill

P19

Sameer Sehgal
Aniket Pallav
NMIMS

IN-FIN-NITIE

VOLUME 5 ISSUE 1

Will growth be a casualty in a battle against fiscal deficit and CAD?

BITCOIN- Prospects and Future

The consequences of Innovation in Financial products

Indian Pharmaceutical Industry Report

Horizontal FDI or Vertical FDI

Face to Face- Mr. Rohit Shah
Fin-Q-Nitie

14

22
24

The matter under discussion is will growth be affected played a great role in reducing the level of current
if stringent measures are taken to bring under control account deficit. This has helped global investors
to make investment and has
both fiscal deficit and current
played a major role in keeping
account deficit. The answer is
Fiscal Deficit
(% of GDP at current market prices)
the rupee relatively stable in
both Yes and No. Let us clarify
7
the wake of fresh volatility
the situation. What leads to fiscal 6
5
in global capital flows. In the
deficit and why is it resorted to? 4
Fiscal Deficit
mean time the government
Fiscal Deficit means expenditure 3
2
(% of GDP at current
1
market prices)
attempts to boost investment
by government is more than 0
in the economy by accelerating
revenue earned and hence the
clearances on investment. In
difference/deficit in earning.
spite of deficit financing and
The graph above shows that
how government has tried to control its fiscal deficit current account deficit still prevailing at higher level,
around 5% of GDP despite heavy expenditure on in the third quarter, public investment was double of
social welfare schemes which have been major that in the second quarter, as a proportion of GDP.
burden on expenditure side of governments budget. The effect is now beginning to be felt as higher
To cover the deficit, the government resorts to credit demand, lower inventories and momentum in
borrowing funds by selling bonds, selling off public industrial production and services. The prices have
enterprises in open auction and collecting high taxes been trending down as well. It augers well, provided
by way of excise and customs as well as imposing the government does not play more populist games
import duties on imported goods. It also covers the such as food security, pensions, gas cylinders and all
difference in expenditure and revenue by borrowing such other unproductive expenses.
from money market through bonds and shares and
covering stimulus. All this results in inflation, high In the light of above observations it is crystal clear that
unemployment, and foreign investment blockage and mild degree of deficit finance does not block economic
is often detrimental to certain sectors of economy growth if it is sensibly resorted to, for investment
in core sectors such as steel, mines, roads and
which are high potential to generate employment.
bridges, irrigation facilities, making strong industrial
Trade Deficit means when exports earnings are lesser manufacturing base, restricting unproductive expenses
than expenditure on imports. The difference leads to and opening more avenues of employment through
current account deficit. Some items predominantly oil agriculture, industry, transport, trade etc. A point of
imports, gold and silver imports, imports of coal and caution is that if deficit finance is not brought under
other minerals, imports of luxury products capital control it might lead to inflation, lack of consumption
goods drive valuable foreign exchange out of the demand, setback to industrial production, higher
country leading to imbalance in our foreign exchange input cost of materials and as a result Indian economy
reserves. During the last quarter efforts have been will be uncompetitive in exports to foreign markets.
made to bring current account deficit under control Hence reasonable deficit finance and effective control
to 4.8% of GDP of last fiscal. It is expected to be 3% on unnecessary imports will ensure economic growth
of GDP this year. Of course economic slowdown is a and shall not be a deterrent to development, progress
major reason but the squeezing of gold imports has and prosperity through rapid economic growth.

MU

IM

KU

TG

BITCOIN

HA

LG

ZIA

UP

BA

TA

PROSPECTS AND FUTURE

Reduced Prices
Currently, credit and debit card companies charge
very high commissions for their services. This seems
fit as these companies spend approximately 30%40% of their profits fighting lawsuits on fraud. This
commission cost is transferred to end consumers
leading to high prices. However, since Bitcoins cannot
be impersonated, if there is a way of transferring these
kind of transactions to Bitcoins - through smartphones
or Bitcoin cards - the costs would reduce substantially.
Transparency
When making a transfer using Bitcoin network, both
the sender and receiver are required to agree on the
terms set by them. Only then the transaction can go
through. This means that there is no unnecessary fees
that the seller can impose on the buyer without his
approval.

Case against Bitcoins

Discovery of electricity was a revolution. This was

followed by another astounding revolution - The
Steam Engine. Internet - yet another. Now its time
for Bitcoin.

accepting donations in bitcoins.

Case for Bitcoins

The proponents of Bitcoin network argue that the

advantages of this technology outweigh the risks
Bitcoin is a digital currency that enables an individual involved. They argue that Bitcoin incorporates all
to transfer money and make payments to anyone the benefits of online funds transfer without the
across the globe. However, the first thing to understand associated costs. Transacting on a Bitcoin platform is
about Bitcoin is that it is not just money transfer or easy and hassle-free. The user can start as soon as he/
upgraded money. It is only a component that gives she obtains a Bitcoin wallet which takes only a few
Bitcoin great value. Bitcoin is rather a programming minutes. As compared to fiat currencies, Bitcoins
environment, a publicly audited ledger which accounts offer several advantages:
for all transaction in terms of property, ownership and
contracts. Developed by Satoshi Nakamoto in 2009, it Decentralisation
uses advanced encryption technology whereby users Bitcoin environment uses Peer-to-Peer (P2P)
transfer money by sending digitally signed messages exchange so there is no bank or intermediary acting
to a network. The encryption also helps to keep the in between. This, in addition to minimising the cost
of transactions by reducing commissions, also leads
identity of both sender and receiver private.
to less labour involvement in financial transactions,
In the past four years, Bitcoin has seen tremendous heavy duty accounting and conflict resolution.
growth as more and more businesses and small
merchants are shifting from conventional modes of No Counterfeit Currency
payment. Companies like WordPress and Overstock. Every time a Rs. 500 note changes hands, people
com and many small brick and mortar stores have check for its authenticity by holding it against a light
already started accepting bitcoins as payment. Even source. This is because 2 out of every 3 bank notes
some not for profit organisations and advocacy groups in India are fake. This surge in volume of counterfeit
like Electronic Frontier Foundation have also started currency has led to increase in prices and a reduction

in the value of real money as more money is into

circulation than is required. With bitcoins however,
such a scenario is less plausible as they can be created
only by miners after doing certain amount of work for
each block.

Currently, 25 bitcoins are created every 10 minutes.

Although still in its nascent stage, the Bitcoin network
has consistently faced criticism from the proponents
of age old fiat currency system. This criticism can
be explained in part by the fact that the fiat system
is the monopoly of the respective governments with
vested political, financial and military interests.
Nevertheless, some criticism stems from genuine
concerns expresses by economists.

Jobs Lost
The acceptance of Bitcoins as national currency
would render many professions out of date. These
would include accountants, forex professionals, credit
Less Inflationary
With fiat currency the government always has and debit card companies, clearing houses and other
the option of printing more money. If a monetary financial intermediaries. Since most of these jobs are
instrument works properly, the supply changes as the dream jobs for many and are very well paying, it will
quantity demanded changes. In other words, when be difficult to find alternate means of employment.
there is more demand, it goes up, and comes down Not to forget the substantial lobbying power this
when there is less demand. This leads to increased soon-to-be-unemployed community has.
money supply followed by inflation. However, since Bubble
the maximum value of Bitcoins is capped at 21 million, Many critics view Bitcoin as a bubble that will soon
Bitcoins are partially if not entirely inflation-proof. burst. They argue that the value of a bitcoin in terms
Thus, many inflation hit countries like Argentina and of fiat currencies has been extremely volatile with the
Cyprus are seeing an increased use of Bitcoins.
price rising from US$0.30 to US$200 in just one year.
Not Based on Debt
Many governments including India are hugely
burdened by the loads of debt financing that they have
raised for government spending. With increasing
amounts of debt also comes the increased cost of
rolling over debt and accumulating interest. With
bitcoins however, the concept of debt totally vanishes.
This also reduces the cost of insurance.

Also, many speculative and arbitrage opportunities

exist within this niche market further fuelling this
volatility. However, since the concept is still in its
embryonic stage, there are no hedging contracts
available in terms of forwards or futures. Thus, there
are serious questions on its viability as a currency.
Illegal Activity
Bitcoin network is seen as a haven for money

laundering and many other criminal

activities. Recently, Silk Road, an
online market which used bitcoins as a
medium of exchange was closed under
the federal law. It turned out that this
clandestine currency was being used for
many nefarious purposes. What further
aggravates the situation is the fact that it
is not possible to trace the source or the
destination of money, much less what is
being traded.

The consequences of

INNOVATION
in

FINANCIAL PRODUCTS

No Backing
With regard to national currencies, a
government is required to back the money
supply with assets like gold. However,
the same does not apply to Bitcoins.
They are neither backed by hard assets
nor by faith of the government. This
makes them a risky proposition during
bankruptcy. Some analysts however
argue that Bitcoins are backed by the
processing power. This seems illogical
as there is no fundamental means of
repayment in case the process crashes.

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rm u
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Pa ira he
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GL

What lies ahead

As Bitcoin is gaining popularity, more

and more governments are taking a
stance either for or against it. The Reserve
Bank of India for example has issued a
warning that use of bitcoins for money
transfer is highly unsafe due to potential
security and money laundering risks.
The Government of China has taken a
stricter stance by prohibiting payment
and financial institutions from accepting
them as payment. The European Banking
Authority has also issued a warning that
Bitcoin lacks consumer protection. Many
more governments and central banks
have also banned the use to prevent black
marketing and alleged drug dealings that are using
bitcoins.
The future of Bitcoin is still clouded as the entire
economic and financial community has mixed
opinions about its viability as a currency. However,
going by the current trends of growth in their use, the
potential of Bitcoins as a currency seems to be rising.
One should however ask this question If the Federal
Reserve creates more money in 2 hours than has been
created by Bitcoins since its inception 4 years ago,
what is more riskier?.

TRIVIA
Satoshi Nakamoto was presumed to be
a pseudonym for the person or people who
designed the original Bitcoin protocol in
2008 and launched the network in 2009.
Nakamoto was responsible for creating
the majority of the official Bitcoin software
and was active in making modifications
and posting technical information on the
BitcoinTalk Forum.

Socially useless is how Lord Adair Turner able to reduce the reliance upon banks for traditional
head of UKs Financial Services Authority labelled credit instruments and orthodox credit evaluations.
financial innovation.
One of the basic motto of financial innovations were
to enable the individuals or the firms to tailor the
I dont think they are evil per se. But they do let different dimensions of risk for example currency
people engage in massive mischief. Warren options and swaps, credit policies and the interest
Buffet said referring to derivatives.
rate options so as to provide assistance for the risk
management purposes more precisely and accurately
Innovation is inevitable in any industry, so is it in
than before. But the basic principles underlying
the financial world. Over the years, a number of new
todays new financial products are being extended,
financial products have born, some to last a lifetime
refined and reapplied to yield still more innovative
and some to die even before maturity. Innovation in
products to suit the target customers better.
financial products, typically happen to correct market
inefficiencies or imperfections by risk sharing. Since Over the time these new innovations in the products
the new financial products are intended at the final and services has a profound impact on all aspects of
customer who is generally a household or a corporate, the financial services industry. Like for the individual
their objective of being a good investment is also to employees, job description and the type of work a
be fulfilled. In this respect, the innovations are also typical bank lending officer used to do at major
aimed at lowering taxes or avoiding the effects of money center banks has changed to 360 degree.
regulations.
These innovations have changed not only the type of
activities that an employee in a bank does but also the
Financial innovations can be traced back to way
very definition of normal business hours is changed.
1960s in the United States and the other developed
These changes are limited not only to financial firms
economies. The changes in the financial products and
but even the nonfinancial firms are faced with a wide
services stirred a new wave of economic landscape
array of financial decisions like the new financial
across the globe. Introduction of a wide variety of
products, each with the varied risk attached to it and
new products that trade in new market settings were

the amount of expected return that requires a great

deal of increasingly sophisticated forecasting and
analysis. As these all have their implications on
both the micro and macro level factors and policy
making so policymakers and regulatory agencies are
keen to understand the potential benefits or the costs
associated with these new products, procedures and
to incorporate these new factors into macroeconomic
policies and regulatory decisions.

as it is popularly known is a swap that is designed to

transfer the credit exposure of fixed income products
between parties. The seller of the swap receives
payment from a party, to pay off a third party debt, if
the party in question defaults on the loan. The buyer
of the swap acquires protection, while the seller
guarantees the credit worthiness of the debt security.
In essence, the buyer of the swap, transfers the risk
that a debt security will default.

Initially considered to be not too different from a

The innovation Derivative
manufacturing innovation, it has evolved over time
The derivative is a security whose price depends
that a financial innovation is significantly different
upon one or more underlying assets. The instrument
from other kinds of innovation:
is merely a contract between two parties and its value
Foreseeing the consequences of the innovation is determined by the fluctuations in underlying asset.
is quite a challenge due to complexity of the The most common types of derivative include future
financial system
contracts, forward contracts, options and swaps.
The consequences may themselves change over Generally used to hedge risks, the derivative can also
time given that the nature of business is dynamic be used to speculate.
Financial products and services are subject to
strict regulations
Financial Innovations Implications on
1.Market Behavior:
The Darker Side of Innovation
Market behavior is greatly affected with the availability
Innovation in financial products brings in complexity of new financial products in for the investors. The
that may exploit the uninformed investor. A study by increase in number of financial products and services
Bergstresser in 2008 suggested that structured equity leads to wider array of products so transfer of risks
products were often over-priced quite significantly and risk optimization within investor portfolios.
to extract money from investors who did not quite Also it enables an investor to stand a chance to get
understand the alternatives to what they bought. While higher returns at lower risk. Innovation leads to lower
these complex innovations may not fool professional transaction costs basically because of two main factors;
investors, it is sure to fool the retail investors and take Supply side factors which are mainly impacted by
them for an unpleasant ride. The presence of synthetic technological advancements and regulatory changes
products like the mortgage-backed Collateralized Debt and the second is the Demand side factors depends
Obligations (CDO) played an integral part in global on the economies of scale and the secondary markets
financial meltdown of 2008, which led to losses worth opportunities for new products. This cycle is largely
hundreds of billions of dollars. Five years hence, the affected by arbitrage. In this process both the sides
financial system is just as inundated with complex that are borrowers and lenders keep an eye on the
and innovative products as it was before.
risk-return properties of their portfolios for the new
menu of securities and expected rates of return. Thus
The innovation CDS
reduction in the transaction cost save the money of
Till the 1960s, we had offset
the investors that leads
instruments, whereby people
to greater liquidity
lent money on one deal and
and in turn greater
bought it back on another. There
substitutability across
were two separate instruments,
new financial products.
but now the net effect of this is
This also leads to
what we call the swap. Someone
securitization of assets
had the bright mind to put the
as investors value
two together in a single contract
liquidity a great deal.
such that both the parties and
The investors can also
the cash flow consisted of only
see this as
the net amount of the deal only.
A Credit Default Swap or CDS

improved opportunities for funding their riskier international trade and reducing the gains from trade.
credits and secure their position safely. Some of the
other benefits that exist include:
The million dollar question Is innovation a boon
or bane?
Greater international capital mobility and removes
The objective of new financial investments is to lower
the existing barriers to trade
the cost to the investors. While it is difficult to take
Leads to integration of international capital
a side as to whether innovation in financial products
markets and less segmentation
is good or bad, restricting innovation in financial
Greater similarity between cost of funds like for
products as such could be to the detriment of the
currency in emerging capital markets
investors as it reduces their ability to diversify their
portfolio and thereby reduce risk. Also innovation
2.Macroeconomic effects:
is required when the markets are going low, to kick Fewer opportunities for pursuing national
start and bring the momentum back when the existing
monetary policies using quantitative controls on
products fail to do the job. For instance, an increase in
credit availability or interest rate levels
the price of CDS (Credit
Greater impact of
Default Swap) is an
monetary
policy
indication that investors
on exchange rates
foresee credit problems,
and exchange rate
whether across the market
variability
or with institutions.
3.Integration
of
prices in international
markets:
There are mainly two
kinds of evidences that
affect the integration of
prices in international
markets.
The first is the one
price policy for international securities. This has
been observed in the past with the dramatic growth
of the Eurobonds. Due to the price differences
many companies can arbitrage the funding
differences between the offshore and onshore
markets.
The second evidence for the unification of the
international prices comes from tests of the
interest rate parity condition and the subsistence
of covered interest arbitrage profits. It has been
observed in the past that the covered interest
arbitrage integrates the short-term Eurocurrency
markets, but this has become more apparent with
the introduction of longer-term Eurocurrency
markets, commercial paper markets.

Back in the 1970s, the

Australians could not
get a mortgage or a
chequebook for money
transfer. This was a driver
for innovation, which in
turn increased market
efficiency.
On the flip side, CDS has
contributed its share to the global financial crisis.
While it would not be correct to blame it all on CDS,
it is more its misuse that led to the crisis rather than
the instrument itself.
Likewise, derivatives come with their set of drawbacks
as well. Due to their inherent characteristics, they
provide leveraging and can be initiated with a small
capital. This leads to speculation and raises volatility
in the market. Participants end up assuming financial
positions that do not match their capabilities which
leads to bankruptcies.

To conclude, financial products themselves are not

bad. They are aimed at something good. It is just
dependent on the user of the financial products and
his/ her motive that decides whether the product is
The greater unease is that because of the increasing
a blessing to the society or a curse to the world of
international mobility of capital, the central channel
financial products. Hence, innovation in financial
which impacts the monetary policy greatly may be the
products is good to both, the set of financial products
exchange rate of currencies. If countries are unable
and the market as a whole. It is just that the complexity
to synchronize their monetary policies effectively,
in the product makes it susceptible to misuse causing
then large exchange rate swings are more likely to
damage to the economy, other countries, market
develop. Countries then dart the risk that protectionist
and the financial system as a whole, including the
pressures will build up, producing a tightening in
investors.

MARKET DYNAMICS
According to IMS health,
domestic pharmaceutical
market reported total
sales of US$ 1.12 billion
in July 2013. This was
at a growth % of 13.5%.
India currently exports
drug
intermediates,
Active Pharmaceutical
Ingredients
(APIs),
Finished
Dosage
Formulations
(FDFs),
Bio-Pharmaceuticals,
and Clinical Services to
the world. The exports
of pharmaceuticals from
India saw an upward
trend in the year 2012-13.
Currently it stands at US$
14.6 billion. Target set by
Ministry of Commerce is
US$ 25 billion by end of
2014. India looks to be
on track to achieve this
target.

Indian PHARMACEUTICAL
INDUSTRY Report

Debleena Banerjee
Sanket Tandon
Indian Institute of Foreign Trade

INTRODUCTION
India is one of the top emerging markets in
pharmaceutical sector. The sector is highly organized
and has seen steady growth over the years. This
has also attracted several companies to invest in
pharmaceutical sector in India as they find it a viable
and good option.

The visible slowdown in the growth% when compared

to last year can be attributed to the fact that National
Pharmaceutical Pricing Policy (NPPP) was announced
during end of year 2012. With its implementation and
subsequent corrections in the prices the sector saw
low uptake among the stockists which attributed to
the low growth%.

According to a major study done by McKinsey and GROWTH DRIVERS & FACTORS
Company, Indias pharmaceutical sector will touch
US$ 45 billion by 2020. During the period 2002-2012
the countrys healthcare sector has grown by almost
three folds from US$ 23 billion to US$ 70 billion.
The recent progress of the Indian pharmaceutical
sector can be gauged by the following figures:
Parameter/Year 2013

2012

Value (Cr)

72069
9.8%

16.6%

Anti Infectives (468)

New Introductions

Gastro
Therapies
(389)

Pain Analgesics
(435)

Contribution of new introduction to Indian Pharma

Market has gone down from 6.3% in 2010 to 4.1%
in 2013
Number of new products launched went down from
1900 in 2010 to 1700 in 2013
MAJOR COMPANIES IN THE
PHARMACEUTICAL SECTOR
Name

Sales In crore

Abbott

452

Cipla

322

SunPharma

313

Zydus Cadila

268

figures in INR
KEY THERAPY AREAS

GOVERNMENT INITIATIVES

The chronic therapies have outperformed the market

in terms of growth of around 14% where acute therapies grew at a rate of 9.6%.
2010

2013

2013

CONTRIBUTION %

CONTRIBUTION %

GROWTH

Acute

73%

70%

9.6%

Chronic

27%

30%

14.0%

THERAPY

65654

Growth %

NEW INTRODUCTIONS

Source: changing landscape of Indian pharma indus

try- PwC report

Source: changing landscape of Indian pharma industry- PwC

report

Chronic therapies include: Cardio, Gastro, CNS,

Anti-Diabetic
Acute Therapies include:Infective, Respiratory, Pain,
Gynaec

MAJOR INVESTMENTS
PLAYERS

REGULATORY
TRIALS

BY

CHALLENGES

FOREIGN

If India has to bring down its current account

deficit, it has to heavily leverage on FDI. However,
pharmaceutical sector is different from all other
sectors in the economy and has to be primarily
dictated by public good instead of foreign investments
and revenues. It is primarily due to this reason that
there are a large number of critics of 100% FDI in
this sector.
CLINICAL

Clinical Trials in India are regulated under the Central

Drugs Standard Control Organization (CDSCO) and
Drugs and Cosmetics Act, 1940, respectively. Rule
122 DAA of Drugs & Cosmetics Rules, 1945 (D
& C Rules) defines clinical trials as a systematic
study of new drug(s) in human subject(s) to generate
data for discovering and/or verifying the clinical,
pharmacological (including pharmacodynamics and
pharmacokinetic) and/or adverse effects with the
objective of determining safety and / or efficacy of
the new drug.
The clinical research market in India is presently
valued at a figure of USD 500 million and is projected
to reach USD 1 billion by 2016. This market is
driven by the availability of a huge genetically
diverse population with extremely lower costs when
compared to the developed nations. However, the
regulatory delays in the clinical trials are harming the
prospects of clinical trials in India. The delays and
regulatory ambiguity have wrecked innovation as
well as growth of the clinical trial industry. After the
amendment in January 2013, ineffective regulatory
oversight, need for protection for informed consent of
vulnerable populations and compensation guidelines
for patients for trial related deaths have materialized
as chief concerns.
Recently, Biocon has been compelled to move various
Indian projects to the US and Europe. The situation
only makes the process more cumbersome but also
results in a 10-20 times hike in the cost of drug
development. In the past two years, companies like
Piramal Enterprises and Lupin were also forced to go
abroad for conducting clinical trials, due to slow and
uncertain approval processes in India with the matter
being challenged in court.

10

FDI POLICY

100% FDI is allowed in the pharmaceutical sector

in Greenfield investments. However, for Brownfield
investments, approval of the Foreign Investment
Promotion Board (FIPB) is required which often
comes with a lot of time consuming conditions. Some
of the FIPB conditions are: Production levels for the National List of Essential
Medicines (NLEM) should be maintained at the
highest level for three consecutive years preceding
the FDI
R&D expenses should be kept at the highest level
for three years preceding FDI
Information should be delivered on the transfer of
technology to the administrative ministries and FIPB
The FDI policy should be revamped to addresses the
above concerns as well as ensure the availability and
affordability of drugs in India.
NATIONAL PHARMACEUTICAL PRICING
POLICY
In all nations pharmaceutical price control norms are
established. In India, drug prices are regulated by
National Pharmaceutical Pricing Authority (NPPA).
The NPPA changed the pricing of essential medicines
in 2013 and companies selling those drugs were given
a period of 45 days to replace existing stocks in the
market with the newly priced stocks. This move will
heavily impact the topline of all major pharmaceutical
companies in the short run. In the medium / long run
this impact can be negated with proper strategy.

However, due to the differences in the two standards,

there is an increasing demand for clarity.
PHARMACEUTICAL
CHAIN

VALUE

In the R&D Value Chain of the Pharmaceuticals

industry, the process comprises of two main stages:
discovery
of
molecules
and implementation of the
therapies. However, both of
these stages have a different set
of operational requirements.
Hence unbundling the two ends
of the R&D process can lead to
increased focus on value.
FUTURE PROSPECTS

REFERENCES

Indian Pharmaceutical sector is on the right growth

part and is expected to be in top 10 global markets as
suggested by PwCs report titled India Pharma Inc:
Gearing up for the next level of growth. The share of
chronic therapies is low when compared to that of the
acute therapies but its growth has outperformed the
market. With the right support from the government
and friendly policies the sector is expected to see a
good growth in the near future.
The small and medium enterprises (SMEs) are
expected to play a significant role in the growth story
of the countrys pharma sector as they contribute
3540 per cent to the industry in terms of production

1.http://www.ncbi.nlm.nih.gov/pmc/articles/
PMC3612334/
2. http://www.livelaw.in/clinical-trials-in-india-thechances-and-challenges/
3.http://www.indialawjournal.com/volume5/
issue_4/article5.html
4 . h t t p : / / w w w. f i r s t p o s t . c o m / e c o n o m y / 1 0 0 fdi-in-pharma-sector-bad-for-country-parlcommittee-1035703.html
5. Unleashing Pharma from the R&D Value Chain
(AT Kearney)
6. Indian Pharma Inc. - CII and PwC
7. Social Media Report by Simplify360.com

CODE ON SALES & MARKETING

The standards laid down by Medical Council of
India and Department of Pharmaceuticals on sales
and marketing of pharmaceuticals are differing on
certain grounds. These standards are an attempt to
streamline marketing efforts and prevent corruption.
The tax authorities use the Central Board of Direct
Taxes (CBDT) circular based on MCI guidelines to
decide on permissible sales and marketing expenses.

INDUSTRY

with a turnover of about Rs.35,000 crore (US$ 5.70

billion).
But we have also seen sluggish growth in the recent
quarter and that can be attributed to some of the
policy changes. To ensure that the sector keeps
growing at a healthy rate Indian and foreign companies in the sector have to come up with certain
innovative solutions

11

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Priyo Ranjan

Xavier Institute Of Social Service

foreign market outweigh the loss of scale economies

that could be reaped if produced in only one plant
(firms host country). It is also known amongst
corporations that under no circumstance should a
corporation simultaneously engage in both FDI as
well as exports.
While horizontal FDI and vertical FDI are conceptually
different- vertical FDI comprises of both FDI and
exports. In horizontal FDI countries are often of
similar size whereas in vertical FDI the home country
is usually much larger than host country.
It is like two forces of nature the horizontal FDI
is representative of two forces representing two
developed countries whereas vertical FDI represents
a developed source country and a developing host
country.
In horizontal FDI the aim is to serve the host market
abroad whereas in case of vertical FDI the aim is to
serve the domestic market. Vertical FDI is also known
as international off shoring/outsourcing.

Horizontal FDI Vertical FDI

or

An unequivocal statement that has been laid out in

lieu of the need of foreign direct investment also
known as the FDI is that any country in this multistaged platform of the world in order to grow and
prosper in the field of world trade and commerce
needs to realize the importance of the two models
of FDI prevailing-horizontal and vertical and after
thoughtful considerations choose the one that best
suits their economic scenario.
Under the grim circumstances where the FDI policy
can make or break, run or ruin the internal domestic
environment of any country it becomes extremely
vital to analyze whats the best and most optimum
fit on a SWOT analysis of the host country. While
out there in the world scenario, the competition and
players are getting fierce- the scenario is like the one
that you face in a viral attack- either your body resists
it and wins over it emerging stronger to gain or the
body gets susceptible and falls victim to it.

14

It is essential to understand the basic difference

between the horizontal and vertical FDI. There is a
basic underlying difference between the two which
most people do not see upon. In horizontal FDI
conditions, multi-plant firms duplicate the same kind
of activities (roughly the same) in multiple countries
whereas in vertical FDI, firms locate different stages
of production in different countries. The horizontal
FDI is more prevalent in nature as against vertical
FDI.
What we all do understand very clearly is that the
strong players comprising of the developed countries
are the source and host of most FDI. The countries
such as the under-developed or developing ones
are the dependent lot who are looking forward for
means to access the advancement in technology and
to utilize the labour force of these countries for their
profitability. Yes, it is for profitability and for access

Having known the dynamics of horizontal and

vertical FDI let us analyze the present situation with
respect to the current economic scenario. The given
economic conditions are strained out and uncertainty
prevails over the future. Under such circumstances the
gimmicks of the trade world largely depends on the
political scenario and the growth in industrialization.

It is extremely vital to analyze some major aspects of

the macro-economic world which would be inclusive
to the markets of these countries rather than for cost and would truly depict the existing condition. In
reduction strategies.
short, the basic issues plaguing the humans all over
the world.
An interesting point
to be considered here
i.UnemploymentThe
which would cross
issue of unemployment is
across any of our
a problem which the world
minds is the fact that
has been struggling with
we need to understand
over decades. The human
the trade-off analysis
race has expanded rapidly
between the export
and their demands have
orientation and the
increased exponentially.
need for FDI. This can
However, the struggle for
be illustrated by this
existence has rushed more
simple
illustration.
of the humans against the
capacity to employ them.
This tells us a very basic thing about both the types Now analyzing the aspect with respect to FDI and then
of FDI- It occurs when the benefits of producing in a linking them specifically with horizontal or vertical to

15

know which one would be a better option. While it is

evident that horizontal FDI is more prevalent in the
world, vertical FDI would generate more jobs. But
then the quality of jobs in the horizontal FDI would
fall better.
Also that in the under-developed countries,
unemployment is a big issue plaguing the nations
even if it is in the form of routine labour oriented jobs
to support a basic living so even vertical FDI would
act as a life-saver for them.

gust of thought, it is basically the market that every

company would like to penetrate and cater.
The population would matter under such circumstances
and the PPP (Purchasing Power Parity) of the people
in lieu of the sector that is given out to FDI.
It is very important for the government to consider
the market conditions and how much these players
entering into would serve the domestic population
and in turn how much of the money would they carry
off from the pockets of these people.

However in the developing or developed nations

people are looking more towards the quality of job There are varied opinions in this regard. However
to improve upon their living conditions and hence what seems most evident is that vertical FDI would
vertical FDI is more likely to fall in place.
serve the under-developed market conditions better
whereas the horizontal FDI would drain them out.
ii.Poverty- The issue of poverty can be analysed with
respect to the jobs being generated, the quality of jobs The case however would stand similar even in case
and the standard of living it offers to the people of the of developing countries as the major players would
country supporting FDI.
take more control of the market as they would most
obviously command a dominant position with respect
While it is evident that there is hardly any scope in to the pricing as well as the strategic implementations.
case of vertical FDI supporting countries as they are
basically to get labour at work the horizontal FDI The market would also be left rendered dependent on
countries do much better in terms of the job domains these players once the population gets accustomed to
being offered.
their competitive prices.
However another important facet of discussion could
be on the fact that under developed countries may not
so much be ready in terms of the quality of manpower
required in terms of horizontal FDI whereas for a
developing country horizontal FDI in true terms could
mean a boon to the skilled workforce prevailing in the
country.

iv.Local Production Issues and PricingAnother must to look out for factor which most of the
governments need to strictly observe upon is the fact
as to how badly the local population into that particular
industry is getting affected by these changes.

In case of vertical FDI here the local population does

not get much affected. However, the horizontal FDI
iii.Domestic Market Conditions developed, tenets would put it in a bad position as they would be
developing, poor? The swot analysis of how each more of market capitalizing and less likely to utilize
of these would
the local production
feature for the
or
the
labour
country to open
force. This would
up its arms
leave the local
towards the FDI
forces
bleeding
and the policy
and
helpless.
it
embraces
This also shows a
would
largely
condition of grave
be dependent on
dependency
and
this
particular
the
government
factor.
The
must cater to crisis
reason hugely
situations and plan
supported
by
well in advance.
the cause that
without a second

16

v.Sector to be opened up and its state- No country

would like to open up a strong sector or a growing one
for the international players. The reason being simple
that no one would like to stop the rush of blood into
their own country by their own kinsmen.
It is the first priority of the government to ensure that
the sector to be opened up falls in place with the needs
of the people. In a condition where people are starving
if you introduce the airline industry or an industry
that capitalizes on the basic sources of income of the
people you couldnt possibly be doing more damage
than that.

If your industry however is well thriving and needs

technology to improve upon, you need to mark upon
horizontal FDI and get technology and technical
know-how flowing in.
viii.Asset Pricing and Resource AvailabilityAnother important feature is the cost of production
including asset pricing and availability of resources
as it can be an important factor to sacrifice out.

In case of vertical FDI not much of the resources are

taken up by the outsider and the benefits are mostly
capital oriented. It also leads to asset development
and establishment apart from resource and labour
vi.Share that is to be held by domestic investors force utilization.
and stakeholders- The
However
the
horizontal
money involved and the
FDI believes more of
distribution
of
profits
limited investments as far
between the host and
as infrastructure in terms of
the dependent country
production and technology
also matters a lot. The
orientation are considered
ownership and liability
and would rather capitalize
in such circumstances in
more on the profits and the
which the host country
market carrying all the wealth
is involved must also be
back home whilst keeping all
thought upon. Also, the
factors of production at their
domestic environment in
homeland.
terms of the investments as
well as in the responsibility
ix.Other Benefits associatedfacet must take care of the fact that both the countries With regards to the health and nutrition parameters
are appropriately and proportionately benefitted and also, the type of FDI matters as a choice of decision.
the overall benefits distributed.
While vertical FDI would positively and greatly help
in the under-developed nations, in the developing or
Now from the point of view of horizontal and vertical developed nations it would make little or no difference.
FDI it largely depends on the country and cannot Entrepreneurship development- The fact that the
be commented upon in general.The general notion introduction of horizontal FDI would kill more of the
favours more of vertical FDI in under-developed developing or emerging sectors in the similar field
nations and more of horizontal FDI in the developing leading to devastation of the entrepreneurship up come
or developed nations.
is alarming. However, if seen from the point of view
of duplication we can also say that new entrepreneurs
vii.Future Economic Scope and turns- The would come up in a new domain introduced in the
economic viability and scope of improvement is also sector.
a parameter to the run of the future prospects of the Allied Industry- Another small yet significant factor
host country inviting FDI.
is the upcoming of the new allied industries around
the main industry with respect to the local needs
If one of your industries is bleeding and is unlikely and requirements. You would always need support
to recover in the future it is evidently necessary to let of the local domain in order to get your products
the foreign players come in and give it a boost so that more accepted and responded to if you are likely to
your people can benefit from it.
penetrate into the market of the country.
If your resources are lying underutilised or wasted With respect to a country like India let us do a SWOT
upon, vertical FDI could be a welcome move. Even analysis in terms of both vertical and horizontal FDIvertical FDI could benefit under such conditions.

17

How Good or Bad is

Food Security Bill

DISHA SHAH
SIMS, Pune

The National Food Security Bill, a dream envisioned

by Sonia Gandhi, has taken sail. However, what
remains to be seen is whether this Congress dreamboat will succeed without sinking the entire country
into a bottomless pit of debt. Intended to work as a
firewall to the innumerable scandals the government
has been embroiled in, it promises
food: the roti component of the
roti, kapda and makaan trio. It
stands not just as a basic service
but also as an emotional call for
votes. Rahul Gandhi incorporates it
into his political campaign saying,
Poori roti khayenge, 100 din kaam
karenge, dawaiee lenge aur Congress
ko jitayenge (Eat full roti, work for
100 days, receive free medicines
and vote for Congress).

in the 2009 elections through the MNREGA scheme.

However, all this will come at a huge cost to the Indian
economy which is already in deep crisis.

It can be rightly put as FDI is a necessary evil in this

Journey: Initial Setbacks to Acceptance Amongst

Political Class
The Food Security Bill has seen its
share of initial hiccups while it was
tabled in front of UPAs cabinet for
approval. Sharad Pawar, the then
agriculture minister, had opposed it on
account of the monetary implications
of the same. However, he and
Mahmohan Singh had bowed down
keeping in mind Indias growth story
of slated 8-9 % at that point of time.
The very same Bill was opposed by
Mamata Banerjee and the Samajvadi
Party for being a political gimmick.
Food Security: The mother of all
However, nobody in the political class
Vote bank schemes
wants to protray an anti-poor stance
The Bill proposes to provide food
and face the wrath of the aam junta.
grains at subsidised rates to two
Eventually, the Bill was passed in a
thirds of the countrys population.
hurry without any debate illustrating
Poised to be a game changer for the Congress party the urgent need of the government to have a strong
in terms of garnering the favour of the electorate, card in the 2014 elections.
the bill was brought into the picture right before the
2014 elections: a move that the Congress hopes will Economic situation: Dismal
ensure a hat-trick. Same tactic was applied previously The situation today, after two years is nowhere close

18

19

Apropos to the above discussion, at the end of it all the

choice largely depends on a huge number of factors
than those that can be put across,but then the choice
is futuristic and has to be somewhat optimistic. A
speculating approach is definitely needed but excess
of speculation would ruin it all at the same time. I
believe that for a country like India after the SWOT
analysis the factors play out more favourably for
horizontal FDI as against vertical FDI.
Countries have entered into various models and while
some have hugely benefitted others have been capitalised upon as well. It again plays out on how efficiently a countrys government would foster a good
FDI policy and then further regulate the players on
the right path of mutual benefits and development.

fast world of technology change but at the same time

the facts and terms remain clear only till the perils of
war do not disturb the peace between nations which is
an imminent danger to FDI approach of any country.

What's in the BILL ?

to being so rosy. The Indian

The government will provide food
Rupee had recently touched
entitlement to 75% of the population
the lowest of 68.85 against the
in rural India and 50% of the
US dollar. Though the entry of
population in cities
Raghuram Rajan at the helm of
the RBI, and the slew of measures Each eligible household will get 5 kg of
food grain per person per month
that have followed have helped,
The grains will be available at Rs.
but the situation today still
3/2/1 per kg of rice/wheat/coarse
remains precarious. The economy
grains
still faces the problems of slow
growth, inflation, fear of tapering Mid day meal scheme will provide food
of quantitative easing, volatile to children aged between 6 years and
14 years
markets and a high CAD.
Breastfeeding to be promoted for
children below 6 months

income of the Indian Government.

Taking into consideration, that
government spending is not allocated
by the GDP but only with respect to
its earnings, this figure poses a huge
question over the exchequer.
The projected Income for India in
the FY 2013-14 is around 11.2 lakh
crores. 1.2 lakh crores as a % of 11.2
lakh crores works out to 11.16% and
the higher estimate of 2.4 lakh crore
increases the % to 21.4% of earned
income.

What does it Offer?

The Food Security Bill entitles State food commissions to be created Where will the money come from?
that will monitor and evaluate the
The national revenue is not expected
75% of rural and 50% of urban
implementation of the Act as well as
to go up by 11-20% in the near
population, an estimated 800 mn
redress grievances
future. Hence, cutting back expenses
people; Priority and Antyodyaya
Central and state governments will
from
infrastructure
projects,
households (called eligible
undertake PDS reforms
educational projects, diesel subsidies
households), of which the
The Central government will provide are to follow if we are to pay for it.
former is slated to receive 5 kg
food grains to state governments, at
The government has already made
and the latter is set to receive
prices specified, to implement the
plans of reducing diesel subsidies.
35 kg of wheat, rice and coarse
entitlements
The Supreme Court too has backed
cereals at Rs 3, Rs 2 and Rs 1 a kg,
respectively. Other provisions of the Food Security its decision advocating a balanced approach on
Bill include schemes for children and pregnant subsidies so that Indias economy not just survives
but also thrives. It is to be noted that 83 % of Indias
women.
oil requirements is met through imports. Thus, the
downfall of the rupee makes this buy even costlier,
A Big Monetary Burden: For the taxpayers
The major cause of worry remains the dysfunctional impacting the balance of trade.
nature of Indian politics where electoral votes are
given a higher preference to the economic impact of The government will need to procure 62 million
any populist move. The Food Security Bill comes at a tonnes of grain. To do this, they will have to import
cost of Rs.1,24,723 crore and will entail an additional food grains, worsening our trade balance. Hiking
burden of Rs.23,800 crore according to the Congress. taxes is not possible in the near future since the
However, experts believe that this is too optimistic elections are close. Hence, the only option left right
a picture to paint given that additional expenditure now is to borrow.
needed for the envisaged administrative machinery,
Food Inflation & Overall Inflation: Expected to
scaling up of operations,
shoot up
enhancement of production,
Minimum Support Price is the
investments
for
storage,
price at which the government
transportation of the food
procures food grains for its various
grains, processing and market
schemes. Similarly for Food
infrastructure etc. Prominent
security, government will follow the
economic analysts feel that the
same route. This will actually give
real figure is closer to about
incentives to the farmers to produce
2.4 lakh crores. The Congress
more of wheat, rice and cereals,
has always pictured this bill as
thereby increasing the demand
costing 2-3% of Indias GDP.
for production of these goods and
However, a clearer assessment
increasing prices of other food items
can only come if the Bill is
such as vegetables. Thus, it would
compared vis-a-vis the annual

20

increase food inflation.Food inflation contributes to

over 41% of our overall Inflation. Hence impact of it
will be reflected heavily on the overall inflation.
Lower Savings, Hence slower Economic Growth
With higher food inflation, people will have to spend
more. This would in turn result in lower savings.With
lesser income in peoples hands, there will be lesser
expenditure on goods and services, further restricting
growth.
Risk of Credit Downgrading
The increasing number of uneconomic populist
schemes has resulted in fear being created of a
possible ratings downgrade.
Currently, Moodys rates India as a stable economy
with the lowest investment rating of Baa3. It has
already given warnings of a possible downgrade
previously.
Rupees downfall and further widening of CAD
With lower savings and the last losing streak of the
Indian Rupee against the US Dollar still fresh, India
has already lost a lot of money with respect to its forex
reserves. Importing food grains to meet additional
requirement would further worsen the situation.
Though the Indian government expects to curtail
the CAD to 4.8% of the GDP during the current
year. Lowering of CAD further to 3.7% seems an
unachievable feat at the moment.
Fertilizer and Power Subsidy to increase further
On the one hand the Indian
government would like
to reduce other subsidies,
however to procure more
grains, it will have to give
more subsidies to farmers
so that they could produce
more. Thus, it actually would
result in more Fertilizer and
Power subsidies.
A never ending benefit
The food security bill comes
without an expiry date.
Indias population is growing
at a huge pace. This scheme
hence will have to meet
the needs of the growing
population, making it an
open ended scheme both in

21

terms of time and cost.

Will it reach the intended beneficiaries?
Another major cause of concern to not just economists
but socialists is the concern for Is it really worth
it?
India contains 40 percent of worlds malnourished
children. In terms of absolute number, India has the
largest number of malnourished children in the world.
Even other indicators are nothing to write home about,
with India consistently ranking at the bottom of the
list. It is definitely not a position to be proud of. Also
with the National Food Security Bill, the government
has legalized the food subsidy that it was providing as
a right. An economy cannot progress if certain sections
of its population are still dying of hunger. However,
the timing of such schemes needs to be followed
thoroughly. Cutting diesel subsidies and widening the
tax base should help the government meet its targets
to a certain extent. However, the truthful assessment
of the same would only be realised in the second year
of its implementation when the entire infrastructure
is ready.
Furthermore, the decision by US Federal reserve to
stick to stimulus provides more time to the Indian
ministry to get their act in place.
Good things can come out of the Food security Bill.
However, it needs to be seen if the Indian government
can manage the worlds largest food security
programme without getting entangled in another
scam of sorts.

way. Beat inflation and

make good use of
Magic of Compounding.
Ensure you follow the
five golden rules of
Personal Finance i.e.
1. Always keep an
emergency corpus for 6
months of your expenses
2. Take a secondary
health insurance
3. Cover yourself with
life insurance
4. Make Goal based
investments.
5. Keep taxes and risks
inmind.
Gujarati, Marathi & Hindi on our personal finance
blog, websites and newspapers. We regularly conduct
Financial Wellness sessions at Pan India locations for
Corporate, Retail, College Students and NGOs. We
are either Liked, Followed or Read by about 2,700
friends all across the globe.

Founder & CEO

GettingYouRich.com

What is Financial Planning for you? What kind of

people do you generally deal with?

Financial Planning means designing your financial

affairs to create wealth. We currently deal with
clients in all segments. Young, Just Married, Mid-age
Rohit Shah is presently Founder & CEO at couple,about to Retire and Retired families have taken
Gettingyourich.com He is a SEBI registered our help in managing their finances. We generally
Investment Advisor. Rohit helps families all across prefer to deal with Executives.
the world to meet their dreams. Rohit has co-authored
four Personal Finance eBooks. Rohit worked for 14 What role does intuition play in investing? How
years with IBM, Citigroup & Sterlite and handled much decision is actually governed by this
Finance, Project Management and Technology intuition?
assignments. Rohit is a CFP CM and Management
My sense is intuition plays a limited role. As an adviser,
Graduate in Finance.
Investing is all about applying your experience with a
Tell us something about your company, logic. We normally like to take a quantified approach
in what we advise. That said, we do observe intuition
GettingYouRich.com.
playing a significant role from an investor perspective.
We are a Financial Planning services firm based They do tend to ignore known wisdom and go by their
in Mumbai with clients based in 12+ Cities in intuition, many a times.
India and couple of NRI clients. Our clients work
for companies like IBM, Microsoft, Accenture, What advice would you give to a final year B-School
Capgemini, Prudential, TCS, Vodafone and Reliance. student who is naive and is planning to invest?
Our website has received 38,000 + hits so far. Our
Sample Financial Plan and Personal Finance eBooks Focus on basics. Knowledge is key so make every
have received a total of 2500+ downloads. We have efforts to understand Personal Finance in a better
published 200+ personal finance articles in English,

22

What can a person do to build a good foundation

for his future earnings and long term wealth?
What financial mistakes should he avoid?
Spend less than what you earn. Save at least 30% of
what you earn. Beat inflation and leverage Magic of
Compounding. Remember that time
in the market is more important
than timing the market. Common
mistakes observed are buying
wrong insurance products, not
keeping an emergency corpus, not
having secondary health insurance,
not investing what is saved and not
taking adequate risks.
What is your take on the current
economic scenario and what
impact do you think it will have
on the BFSI sector as a whole?
At the country level, we are hopeful
that a majority government will be in
place after the elections. We believe that economic
cycle has currently broken down with high interest
rates impacting manufacturing and infrastructure
activities. On BFSI we believe that with new banking
licenses and reforms expected, we have a bright
future. That said, largely this depends upon a stable
government. With so many players present in
financial planning and advisory, what are your core
competencies which help you sustain in this cut throat
competition?

23

a process driven mind

set allows us to uniquely
position our customized
offerings.
At what point of time,
did you think that
you should become an
entrepreneur?
What
kind of transformations
has entrepreneurship
style gone through?
I belong to a business
family.
Since
2004
I started shaping the
thought to be on my
own. I finally started my
venture in August 2012.
The outside view of inside is always rosy. My sense is
that transformation is still on. So far, with 18 months
experience, my entrepreneurship style has now taken
a matured shape and I must say that I now understand
that growth is a very fine balancing act.
What are the annual targets,
milestones and five year plan of
GettingYouRich.com?
In next one year, we would like to
conduct 25 workshops on personal
finance, sign 100 clients for our
fee based advisory services, get
registered with SEBI, deploy
system platforms and coach 3,000
students on financial literacy.
In five years from now, I will
personally work only on invitation
basis. GettingYouRich.com would
be one of the top 3 financial planners in the country.
What kind of personal milestones have you set in
your life?
I would like to build a net worth of Rs. 100 Crores
and retire by 2035 for my Dream CSR projects.
For more information about the company and its
services please visit the website:
www.gettingyourich.com/

FIN-Q-NITIE
an ultimate quiz

Q-1) Which American owned Technology Company own firm operating from the offices of his former embased in Texas, United States went from public to ployer?
private in 2013. Who were the major stake-holders
involved in the transaction?
Q-7)
Q-2) He is the founder of a global investment management firm headquartered in Newport Beach, California, in the United States which is one of the largest
active global fixed income investment management
firm in the world. He is also famously known as Mr
Bond. (a)Identify him. (b) And also name the investment firm.

Q-3) This day is celebrated on 8th March every year.

It is known as X day. Y is X and first Indian CEO of
foreign Bank. Name Y.

A Mohur is a gold coin that was formerly minted by

several governments including British India. This is a
Mohur of the Victorian era. It shows a lion along with
a palm tree, however, a modified version of this coins
logo is the seal of one of the premier banks of INDIA.
Identify the bank.
Q-8) Given below, are the logos of two companies.
Name the companies and the connection between
them.

Q-4) He is known as the Father of Index Fund investing. He created the first S&P 500 Index fund. Identify
this famous person?
Q-5) Company A (from Country X) purchased a
100% stake in the Company B making the deal the
largest takeover (of country X) of a foreign company
and made A the worlds fifth-largest company in its
sector.. Logo of B is

Q-9) X received his PHD in economics from the University of Pennsylvania in 1964. His thesis was titled
Variability of Demand Deposits. In 2002 he received Padma Vibhushan. He served as the governor
of Andhra Pradesh .He has also served as the governor of RBI. Identify X.

Q-10) This company was formed in 1850 as a temporary solution to a bitter feud between two transportation companies in New York. They decided to
stop their price war and found a new transportation
company which would automatically dissolve in ten
Q-6) In 1945 Hodgetts & Co.a stockbroking firm col- years. After ten years, the company was making so
lapsed in Australia, declaring bankrupt with liabili- much money that the partners did not have the heart
ties of over 80 thousands pounds and 200 unsecured to dissolve the company. Instead they sold off the ascreditors. The proprietor Henry Hodgett was found sets of the company and started a new company with
guilty of fraud and false pretences and jailed for five the same name. Which company are we referring to
years. Who was his famous employee who opened his here?

24

NITIE Students Get Leg Up on Financial Services Internships, Jobs.

Institute among First to Offer New, Free Bloomberg Assessment Test.
National Institute of Industrial Engineering is among the first universities in India selected to
provide students with the opportunity to take a new aptitude test developed by the Bloomberg
Institute for those interested in considering careers in finance and related industries.
The Bloomberg Assessment Test (BAT) enables students to showcase their abilities in areas
ranging from economics and analytical reasoning to situational judgment and verbal skills, to
major institutions throughout the world.
The free, three-hour exam is open to students, no matter what their major, if they are looking
for internships or jobs in areas such as finance or consulting or just want to measure their
competitive strengths or weaknesses in a range of subjects.
The exam results are available to the student and included in the BAT Talent Search database,
which lists the scores anonymously. A number of major employers, including investment banks
and consulting firms, in the Asia, Africa, Europe, and the United States are using the BAT for
recruitment purposes.
The test results provide considerably more insights into a students skills and abilities than
a resume.Recruiters can search the database to find students who have strengths in areas of
particular interest to them.
The recruiter then invites the student, who remains anonymous, to connect with the company
and learn about potential positions. Students interested in the company can accept the connection
and then will be contacted by the recruiter.
More than 150 NITIE students have taken the BAT. The test is usually offered on campus or
at a local Bloomberg LP office. Students can register online at www.takethebat.com or contact
SummyKataria at summy.kataria@bloomberginstitute.com for more information.
No studying or advance preparation is needed as the BAT measures a students aptitude in 11
subject areas.
The BAT was developed by the Bloomberg Institute, a subsidiary of Bloomberg LP, in
partnership with a global team of senior executives from leading financial institutions and
faculty from major universities.
####

About NITIE

NITIE Mumbai is a premier institute and a centre of

excellence recognised by the Government of India.
It was setup in 1963 in the collaboration with the
International Labour Organization. Since its inception
NITIE has been providing solutions to the complex
problems of the Industries. Today, NITIE is constantly
ranked within top 10 B-schools in India and its Post
Graduate Programmes are amongst the best in the
country. Throughout the year, NITIE and its alumni
have carved a niche for themselves in the industry.

Team That Is $treet

Street is a student run finance interest group at NITIE that promotes finance related activities and
is commited to encourage and engage the finance enthusiast in the student community. Street is
one of the most active clubs in the campus and caters to students with a wide variety of finance
related interests whether it is Corporate Finance, Financial Risk Modelling, Commercial banking,
Investment Banking, Investment Management or Venture Capital/Private Equity. We bring
together members of NITIE community and professionals from financial Industries through events
such as Beat the Street case study competition, quaterly magazine(In-FIN-NITIE), knowledge
sharing sessions, poster series Street Wall, guest lectures, alum sessions, financial workshops
and numerous other activities.

Please send your feedback at:

Email: street.nitie@gmail.com
Website: www.street.nitie.org