New

(Daily Information Capsules for all those who want to fathom learning in all its depths)

Date: 22nd July 2004

(To be used by faculty members
AND
a copy to be kept for students’ reference in the Library too)

CONTENTS

The following pages contain:

1. NewsTracker: The edit will give you links to important and happening
news, which you just can’t afford to miss. Follow the link and read the
articles suggested.
2. Pool of Knowledge: A collection of definitions and meanings of terms
from a selected field of study.
3. Specializer: An article by the gurus on Management Fundamentals.
4. Quiz: A GK quiz on Current Affairs, Brand Quiz and Companies Punch
lines etc., to check your reading habits and to hone your memorizing
skills!

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 NewsTracker
Instructions: We suggest you copy-paste the link on the address bar of your Internet explorer. Avoid keying it
through your keyboard because it might be prone to errors.

SMALL SEED, BIG IDEA

For 57 years, Indian governments mostly talked big about what they'd do for the 'common man', then did what
they were advised to do by people who rode official white cars and lived in bungalows built by Herbert Baker. R K
Laxman's common man doesn't wear safari suits. And if all the approximately 720 million folks who live out of
seven giant cities were to storm the bar at India International Centre where babus hang out, the resultant liquor
subsidy bill would break the bank. So, zillions of little kids wonder when their subsidised midday meal will turn up,
while we're told what to do by a roomful of people on subsidised Scotch. Then come Sonia and Manmohan,
talking about a New Deal and Chidambaram with an uplift-the-cowbelt budget. How do you reform the cowbelt?
Not by pumping in cash. Almost all funds pumped in for rural development find their way right back to farmhouses
with jacuzzis and Pajeros. This is probably why Chidambaram has been stingy with funds. In an earlier
incarnation as finance minister, he commissioned a study that found 14 per cent of the economy - about Rs
350,000 crore in today's money - was spent on sops, with little visible impact. An opinionated analysis of PC’s
budget. Must read more.

http://timesofindia.indiatimes.com/articleshow/773614.cms

FOETAL ATTRACTION

India's census alarm beeped loudly once again on 10 July, the eve of the World Population Day. The final Census
2001 statistics indicate that India’s population, following an annual growth rate of 1.94 crore, has reached 102.8
crore. What’s more, India, at this rate, will usurp China’s position as the most populous country by 2035, when its
population is expected to touch 146 crore. Even more alarming is the decline in the sex ratio in the 0-6 years age
group — from 945 females per 1,000 males in 1991 to 927 females per 1,000 males in 2001. The decline is more
acute in states like UP, MP and Rajasthan. The 2001 census figures indicate that India’s sex ratio figures are
lower than even those of sub-Saharan Africa and South-east Asia. So, while one can’t deny the importance of
speeding up population stabilisation programmes, one has to be extremely circumspect in adopting cut-and-dried
family planning schemes. The imposition of the two-child norm in Rajasthan, for instance, has compounded the
problem of female foeticide. Read more about these retrograde practices.

http://economictimes.indiatimes.com/articleshow/777058.cms

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THE BIG PICTURE: CONTINUITY IN POLICY

The big picture emerging from the budget is substantial continuity in economic policy, notwithstanding rhetoric
about a new electoral mandate. The Left Front has not captured the government, as was feared by investors
fleeing the stock market on May 17. No populist spending spree is going to torpedo fiscal prudence. India will
continue on its decade-old path of half-baked liberalisation. This will yield continuing half-baked success: 6 per
cent GDP growth rather than the 7-8 per cent aimed for. Compare Chidambaram's budget papers with those of
Jaswant Singh's interim budget, and you will find thousands of entries that are identical. Arun Jaitley, former law
minister, says that no less than 20 BJP programmes have been repackaged or plagiarised and presented as a
brave new CMP (Common Minimum Programme) package. Read yet another article on consequences of half-
baked liberalisation.

http://timesofindia.indiatimes.com/articleshow/773604.cms

MUCH TOO TAXING

The extension of the tax net in the present budget to insurance premia on existing policies is a pointer to the
shape of things to come. The proposal to reward chartered accountants with prison terms for their noble service
of maintaining a healthy distance between the taxman’s noose and your neck makes things clearer still. Tax is
indeed poised to draw closer to death, not only in terms of the certainty of its bite but also in terms of the
relationship between cause and effect — unless the government makes drastic revision of its current policy on
taxation of income, taking into consideration the expanded taxation of consumption. Governments need money to
do the things that only governments can do. So they must collect tax. And keeping half the GDP outside the tax
net is completely crazy. It is wholly natural that the list of services to be taxed should grow from 58 last fiscal to 71
now and several hundred in the next few years. All goods and services consumed would be taxed. What is not
consumed out of one’s income is saving. Except for those who use their savings to stuff mattresses, saving
involves purchase of some service, like that of a bank, pension fund or insurance company. All consumption
would be taxed and even a portion of what the individual wants to tuck away as saving would have to be
surrendered to the government as tax, as tax on consumption of a saving service. The article has grudges
against the taxation. Check out whether it makes sense for you or not.

http://economictimes.indiatimes.com/articleshow/779998.cms

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 Pool of knowledge
All the terms and definitions that have baffled you all these days. Get acquainted with them and solve all your
queries.

Information Technology (IT) :

CERN (Conseil Europeen pour la Recherche Nucleaire) - In English, that's the European Council for Nuclear
Research. CERN, not Al Gore, is credited with creating the World Wide Web as we know it. In late 1990, Tim
Berners-Lee of CERN thought up the Web as a way to quickly share information between physicists all over the
world. Berners-Lee and Robert Cailliau wrote the first Web browser, running under the NeXTStep OS, and the
first Web server. The two created and gave meaning to the terms: URL, HTTP, and HTML.

Certificate Authority (CA) - This refers to a trusted third party organization or company that issues digital
certificates. The CA guarantees that the holder of the digital certificate is who they say they are. They typically
confirm the information provided to them by credit card verification.

Certified Novell Administrator (CNA) - This is the title of an individual that has passed tests on networking
using Novell products. This certification is aimed at network administrators that oversee the day to day operations
of maintaining Novell networks that are already installed. See also CNE

Certified Novell Engineer (CNE) - This is a certification similar to the CNA but requiring the passing of more
tests. It is aimed at people interested in install and planning of the rollout of Novell based networks, with day to
day operations just a part of the certification.

CFM (Cubic Feet per Minute) - It is a measure of airflow, and you can use it to compare the efficiency of fans
designed to cool computers or computer components. Higher CFM rates are better.

Chad - This is the piece of paper that is removed from a punch card when holes are punched into it. Problems
with chads that don't punch through were seen quite a bit when punch cards were the main storage media of
early computers, and then again in the US elections in 2000 where punch cards were used to register votes.

Channel - This refers to the group of resellers that supply most companies with software, hardware, and support.
The channel is a force to be reckoned with, and it competes directly against companies like Gateway 2000 and
Dell. A channel can also be a content container, like a television channel. You may be watching TV channels on
the Internet someday.

Channel Service Unit / Data Service Unit (CSU/DSU or DSU/CSU) - This is a piece of hardware that you use to
translate the digital data frames of a T1 line into a 10BaseT connection, where Internet connectivity is concerned.
If the T1 lines are used for voice connections, a CSU/DSU is required to translate the digital frames into signals
that your office phone switch can interpret. Basically, the phone network / Internet consists of a bunch of
CSU/DSU's talking to each other. When you lease a T1 line, your provider typically supplies you with a
CSU/DSU, often with a setup cost. A synonym for CSU/DSU is DSU/CSU.

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Character - This refers to a single letter, number or symbol. This term applies to data typed into a computer,
shown on computer screens, or printed on paper.

Characters Per Second (CPS) - This is the amount of text characters printed in a second. This term was used
more when daisy wheel and dot matrix printers were common. Nowadays, printers are rated more by pages per
minute (ppm).

Charge Coupled Device (CCD) - Photosensitive CCD's are used in scanners, digital cameras video cameras.
The CCD basically reads the image by storing a group of charges based on the image that it is exposed to. These
charges are analog charges, as opposed to simple digital on / off charges. Thus, you can grab degrees of light
and color to transfer a visual image into a group of electrical charges, and then to your computer screen, video
tape, or printer.

Chassis - Pronounced "chassy." The frame which holds your computer components.

Chat - (noun) In computer terms, this is a synchronous exchange of typed information that is viewed by two or
more people over a computer network. (verb - to chat) This is to participate in the synchronous exchange of
information with one or more people over a computer network. Normally, you type in a remark, send it, and see it
appear onscreen. Likewise, others can see the information at the same time, and submit their own remarks.

Chat room - This is any Web address, IRC channel or other virtual space where two or more users can get
together and exchange synchronous remarks. Most chat rooms have a particular theme, but it is not required.

Checksum - This is a value that is calculated from a group of data, and often passed along with the data when it
is transferred. The receiver of the data will compare it to the checksum, and if it doesn't match, they know the
data was corrupted in transit. Checksums are used in all types of data communication, such as reading data from
hard drives, CDs, floppies, modem communications, and networking.

Chief Information Officer (CIO) - This is an executive title, usually at a medium or large-sized company. The
person that bears this title is in charge of the flow of information in and out of the company, and also guides the
technology used in all information systems.

Chipkill - This is a technology developed by IBM for servers and other systems that demand high availability. It
allows a computer motherboard and BIOS to detect problems with the computer's memory and selectively disable
problematic parts of the memory. Depending on the technology used, this technology may or may not require
specialized memory chips.

Chipset - These are the chips that control the functions and features on a motherboard. The chipset determines
how much memory you can put into a motherboard and what processors you can use with it. Of course, there are
physical connectors on your motherboard that limit these things as well, but motherboard manufacturers use the
chipset as a basis for what type of connectors they can put on a motherboard.

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 Specializer
Agency related matters -II

Expand the Reach

i) Broaden the distribution channels:

Most insurance companies, the world over, reach their customers through a network of intermediaries such as
agents, brokers and banks. The distribution channels being tried by general insurance players in India, apart from
agents, are bancassurances (distribution through banks' branch network), direct marketing and so on.

Even if a company develops a suite of innovative products designed to fulfil the needs of a wide-ranging set of
customers, it cannot grow its business unless it develops a strong and far-reaching distribution network. In a vast
and diverse country like India, developing a wide-spread distribution network is a very challenging task and may
take many years of effort. However, once such a network is developed it would become a rare and inimitable
resource that is very hard to compete with.

Innovative distribution strategies need to be pursued by involving intermediaries who already have a presence in
rural and semi-rural areas and possess a knowledge-base of the consumer needs. ICICI Lombard has tied up
with Way2Wealth, a leading investment consultancy firm, to market its range of general insurance products. One
can also learn from the experience of the success of Micro Credit in India7 which was achieved by reaching
India's poor through tie-ups with non-governmental organisations (NGOs).

ii) Expand the geographical reach:

Another way of expanding reach is by means of the companies' own physical distribution network. This is a
slower strategy, but has many unique advantages; the primary one being the ability to directly interact with the
customer and understand his/her needs better. In India, Tata-AIG General Insurance Co. is one such company
that prefers to develop its own branch network and is planning to expand its branches from 11 cities at present to
about 20 to 25 cities in one year.

As far as reaching rural and semi-rural areas are concerned, all the players appear to be viewing it as a
necessary evil and more as a statutory requirement that needs to be fulfilled. No player seems to be viewing it as
an opportunity. Consider this; according to Nirmala Ayyar8, retired Chief (Data Control and Purification), LIC, "Do
these (rural) people need insurance? Yes, they do. Can they pay for it? No sir, they cannot afford to pay for it?"
Contrary to popular perception, rural markets can be a large opportunity9 in terms of business size as well as
profitability if one is able to carefully plan and tailor an entire business value chain with a set of low-cost activities
- right from product design to distribution, advertising and promotion.

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Differentiate

The strategy of 'being everything to everybody' works only for industry leaders and that position is reserved for
only one or two players. General insurance is such a vast business that there are sizeable opportunities in
business segments within it. For example, companies can focus on business segments like health insurance or
credit insurance and develop superior abilities to understand the business needs, design, develop and market
products and build brand equity in those niche areas. Instead of being a me-too player in a large number of
business segments, one may be able develop a more sustainable business and earn higher return for
shareholders if one is able to achieve a leadership position in a specific business segment.

Consider the example of Export Credit Guarantee Corporation of India Ltd (ECGC), a government-owned
company, which has been in existence since 57, primarily providing export credit insurance and credit
guarantees. After reforms, ECGC got itself registered with IRDA and is repositioning itself as a specialist credit
insurer offering a range of credit insurance products.

Build Awareness / Brand

The root of the under-penetration problem of insurance in India is low awareness. This in turn could be stemming
from low literacy. However, the demographic trends in India indicate that major social and economic shifts are in
store in the next 10 to 15 years. More than two-thirds of the population will become literate. Close to half the
people will be under the age of 30. Modern telecommunication will spread to all parts of the nation including
remote areas. Coupled with these trends, the real GDP growth rate is likely to accelerate to over six to seven per
cent per annum. General insurance players should exploit these trends by investing in building basic awareness
about the need and benefits of insurance. Today there is no evidence of any player doing it in the general
insurance domain, probably due to the perception that it may not be a worthwhile investment. However, this
investment to increase insurance awareness is an essential part of the development of the markets. Also, this can
be done in such a way that a company's brand equity is built up in the process, which is a key source of
competitive advantage in retail markets.

Gold Is For The Pioneers

Expansion of the market in India would come primarily through penetrating the retail segment. Strategies such as
the above to develop and exploit the retail opportunity may not result in quick market share gains, but give more
solid results in the long run.

Feedback may be sent to smeditor@indiatimes.com

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 Quiz!
DIRECTIONS: For the following questions, choose the correct option.

Q1. Which of the following are considered to be the richest family in the world?
(1) Bill Gates and Family (2) Robson Walton’s Family
(3) Ray Kroc’s family (4) The Mittal family

Q2. An inmate of death row is intravenously administered a deadly cocktail of two or three drugs. First, 5 gm
of sodium thiopental, a barbiturate, is injected to render the prisoner unconscious. Next, 100 mg of
pancuronium bromide, a muscle relaxant, paralyses the diaphragm and lungs, stopping respiration. A
lethal dose of potassium chloride, may be finally given, inducing cardiac arrest. In which country is this
exercise practiced?
(1) Japan (2) Iraq
(3) US (4) India

Q3. Who is the founder of the Ferrari car company?

(1) Enzo Ferrari (2) Maranello Ferrari
(3) VX Ferrari (4) Ferrari Mario

Q4. With what aspect of commerce are Bull and Bear associated ?
(1) Banking (2) Foreign trade
(3) Stock Market (4) Internal trade

Q5. Tusks of elephants are modified

(1) Incisors (2) Canines
(3) Premolars (4) Molars

Q6. What are elementary fundamental particles consisting of quark-antiquark pair, responsible for exchange
forces between proton and proton, and neutron and neutron causing them to coexist together called?
(1) Beta particles (2) Gama Particles
(3) Alpha particles (4) Eta particles

Q7. Neville Isdell is the global CEO & chairman of which company?
(1) Coca Cola (2) Pepsi Co
(3) RC (4) UniLever Ltd.

Q8. Which place is called the Motor City?

(1) Manhattan (2) New York
(3) Detroit (4) Maranello

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Q9. Ten Indian and international consortia, headed by domestic majors like Reliance, L&T, DLF group, Essel
and Videocon, have joined the race to develop and modernise the two international airports in which two
cities of the country?
(1) Delhi & Bangalore (2) Kolkatta & Mumbai
(3) Mumbai & Bangalore (4) Delhi & Mumbai

Q10. Ajanta paintings depict scenes from the

(1) Ramayana (2) Mahabharata
(3) Jatakas (4) Upanishads

Q11. The strait which separates Africa from Europe is

(1) Hook Strait (2) Strait of Gibraltar
(3) Palk Strait (4) Bering Strait

Q12. According to the AC Nielsen Asia Pacific Consumer Confidence Survey, which country has been voted
as the most optimistic market?
(1) Japan (2) Hong Kong
(3) China (4) India

Q13. London intellectual property licensing company BTG International Inc. has sued which two companies
alleging infringement of software technology patents?
(1) Apple Computer and Microsoft (2) IBM and Lucent technologies
(3) Dell and IBM (4) Microsoft and HP

Q14. The High court of Jharkhand is located in

(1) Tatanagar (2) Ranchi
(3) Bokaro (4) None of these

Q15. Which company will buy the 50 per cent stake in Intelenet Global Services Ltd. from Tata Consultancy
Services Ltd. (TCS)?
(1) IDBI (2) IBM
(3) HDFC (4) Satyam

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 Answers
1. Ans.(2)
2. Ans.(3)
3. Ans.(1)
4. Ans.(3)
5. Ans.(1)
6. Ans.(4)
7. Ans.(1)
8. Ans.(3)
9. Ans.(4)
10. Ans.(3)
11. Ans.(2)
12. Ans.(4)
13. Ans.(1)
14. Ans.(2)
15. Ans.(3)

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