The River Zumba!

Given that this is the admission season of ISB, I though of sharing my essay from the previous year (2008 admission cycle). Cutting the story short, here is the question that we were asked to write an essay on followed by what my essay was:

CASE : You have been appointed to head the team to build a dam across the River Zumba. Success in this project is critical for your company and would earn you a promotion. Failure would mean that your company would be bankrupt and will take along with it, its investors and its employees. Building a dam across the river would result in deforestation of a portion of the rainforests and would mean relocation of the tribals and destabilization of wild life at Zumba. There is resistance from environmental groups against your project. You are meeting the head of the resistance movement in one hour wherein you would have to explain your decision. Describe what you would do and why? (You will be evaluated on the creativity and practicality of your solution).  Word Limit: 300 Essay: Given the technical, financial and economic feasibility of Zumba multi-purpose dam and with the State’s backing, I would prefer a collaborative issue resolution strategy to a confrontational one. Winning the hearts and minds of the people affected and building trust in me and the company will be critical to address successfully the social and ecological concerns. To address social issues, I would propose to Establish a Zumba Project Governance Panel (ZuProGoP) comprising of eminent ecologists, engineers, consultants, government officials and local panchayat leaders to oversee project construction. The tribal’s resettlement will be “full-community” based with resettlement colony construction modeled on Public Private Partnership – land provided by the State, labor partly fulfilled with the affected people, and, roads, hospital and water treatment plant constructed by the company. The resettlement area identified is arable, is on the path of the irrigation canal and is of high cultivable value. An optional compensation package to be offered as per the stipulations of the ZuProGoP. Eligible workforce will be absorbed into the construction, operation and maintenance of the dam, hydropower project, canal and ancillary services that are expected to create 6000 jobs thereby addressing employment issues. To address ecological issues I propose to setup an independent Zumba Trust Fund with a sizeable corpus for replanting trees as mandated by Indian laws and to top-up the fund by a share of the annual profit for the first five years to explore fish hatcheries and stocking programs post construction. Periodic release of water as per the Environmental Flow Requirements (EFR) and to have a controlled flooding to minimize the ecological changes and unforeseen downstream issues. To build fish passages specifically tailored to the native fish species and drainage facility to desalinate water and protect surrounding ecology. Thus, a mutually acceptable and negotiated agreement with various stakeholders will be possible.

The way I approached the essay:

1. Did a lot of research on the topic. Found a good strategic paper by the World Commission on Dams on which I based my entire solution on.
2. To cut the essay short, I assumed some critical things at the start of the essay and concentrated on the people and ecological aspects of the project .
3. Wrote a draft essay without the word limit in mind and then cut out the points that I found were not that important .
4. Got the essay reviewed by three people and when all of them came up with different feedbacks, I knew that the essay was good! (The catch was that if all the three had come up with the same points, then it would have been a bad thing!) .

Hope this helps future ISB aspirants… that’s it for now, out of time!

An Economic Attempt

Well, I have been quite silent in the blogspace for a couple of months now and yes, I do regret it. I haven’t been able to make time (sometimes not been driven enough!) to post something useful here. So, I finally decided to do something about it.

At the fag end of Term 1, our economics professor Amit Bubna had initiated a contest called the “Class Economist” to inspire lazy asses like me to think something interesting and the topic was “Fighting Alcoholism in Today’s  Society”. The restriction was that it needed to be a one page write-up only.  The incentive was that the top 20 papers of the batch will receive something nice from him. And, surprise, surprise, I was one of the folks whose paper made it to the top 20! So, here’s the article that I entered into the contest. Looking forward to comments / criticisms…

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“Policy Proposed: Three pronged policy 1. Introduce steep taxes to be charged on per-liter-per-bottle of alcohol produced at the branded / large-scale manufacture’s plant while exempting taxes for industrial and pharmaceutical production. The taxes shall be in the form of different slabs depending on varying ranges of the maximum retail price, and, shall be levied on the bottle on a per liter basis; the higher the price, the higher the tax. 2. Recognize & legalize the cottage industry and small-scale production of liquor as valid business and provide guidance for improvement in manufacturing techniques including but not limited to subsidy and tax rebate for following norms and certifications. Introduce effective licensing and audit of alcohol manufacturers. 3. Educate children and teenagers who form part of the consumer target segment towards the health issues and economic losses arising out of acute as well as chronic alcohol consumption – make it “uncool”.

Policy Explanation & Implications: The outcome of the India regional survey^[1] illustrates that a larger percentage of youth, predominantly males, are taking to alcohol based on the Last Year Abstainers^[1] and Youth drinking in Andhra Pradesh(Last Year Abstainers)^[1] figures. Also from the WHO global status report^[2] it can be inferred that youth taking up alcohol consumption at a young age finally leads to chronic consumption related economic and health problems. As India is primarily a tropical climate country with very little benefit associated with regular drinking, the long-term strategy is to wean youth away from alcohol. The short-term strategy will be to impose high taxes on alcohol to bring down drastically the consumption by leveraging on the price elasticity, but pumping back the revenue earned into National Rural Employment Guarantee Scheme (NREGS) and medical research.

a) Short-Run Policy& Impact: The short run impact depends on two factors. Firstly, buyers of branded alcohol are usually in the high-income group and a steep rise in the taxes (preferably in the form of slabs) would lead to a reduced demand of alcohol. Given that the Heavy Episodic Drinkers ^[1] is sufficiently small, this would not lead to any adverse social impact unlike as argued by critics ^[3] but would taper the demand largely. This would also address the acute drinking economic losses of drink & drive fatalities, accidental injuries, etc. The advantage of levying a tax at the production level instead of the sales level is to provide a disincentive to the manufacturer to market alcohol as a loss leader product. The manufacture’s incentive to flood the market with value packs ^[3] would be eliminated due to tax at the production level itself followed by a tax at the sale-level. A part of this revenue needs to be directed to the NREGS to provide incentives to rural population to be engaged in productive work and move away from alcohol addiction as a refuge for poverty. Secondly, by legalizing & licensing the small scale and cottage liquor production, and by providing guidance in distillation practices, we would make sure that a major source of illicit liquor deaths and disabilities are reduced. In addition, by encouraging certifications in production techniques in the form of tax rebates on sales, an incentive can be placed for these producers to improve the facility, which would drive up costs! This increased cost would need to be passed onto the rural customer who has extremely high price elasticity and thereby demand would start falling. As a result, the illicit liquor problem as well as the demand side problem can be tackled with this second strategy.

b) Long-Run Policy & Impact: Extend the ban on alcohol advertising to include surrogate advertising. Effort needs to be initiated to educate children at the school level about the addictive nature of alcohol and the eventual economic, health and monetary losses. Making it “uncool” to teenagers and young adults through public service adverts in popular television channels would be a right step in stemming the next “alcoholics anonymous” wave of the population. Also, as a direct result of increased tax collections, a substantial amount can be invested into healthcare R&D which can address long pending medical research in substance abuse. Given that a majority of the rural population’s addiction is a direct result of abject poverty, additional funding for well-intended schemes such as NREGS would alleviate the attraction to illicit liquor.

The three pronged strategy proposed above would go a long way in tackling the under estimated dangers of alcohol abuse in terms of economic losses to the individual, the family and the society as a whole.

References: [1] WHO Global Status Report on Alcohol 2004

[2] WHO Global Status Report on Alcohol 2004 Country Profiles South East Asia Region – India

[3] “Government's top doctor recommends price hike for alcohol” – Sunday Telegraph, UK, March 15, 2009

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So what do you think…?

A4 Rocks

Well, this would be quite short post unlike my usual long winded ones. The reason? Well, have a look at the published time and you’ll know. I am fight sleep to type this out and typing more typos than the correct spelling.

OK, by the way, if you are wondering what the heck is A4, of course discounting your possible assumption that its the A4 sized paper… here’s the news… A4 is the group number of my study group at ISB for the core term (i.e. all of 6 months!). I am in section A and study group no. 4! And why does it rock? Well, that’ll be a long winded answer. The short answer would be that our group has some very terrific guys  (of course gals too) who bring in some very diverse perspective. I’ll go ahead and put in some real names to the profiles that I had mentioned in my previous post.

In Alphabetical Order:

Diganta: This analytical, quant heavy dude is the Senior Design Engineer from Texas Instruments. I got to know first hand as to the amount of effort he can put in to collect and organize the tiniest detail.

Manas: This LLB + CA chap is the calming factor in our team (Don’t ask me why he’s doing his MBA after the LLB followed by CA!! Most probably he is plain nuts). He has a very gentle way of putting across things, so much so that even when he disagrees, he does it so damn politely, that you invariably end up agreeing to his take on the matter. Amazing maturity and insight.

Nikhil: Yours truly is the odd one out here. Being in IT has deskilled me to such an extent, that I am the secretary here. Don’t have the faintest idea about what business is about and so am the one who’ll get the most benefit out of our A4 group and contribute the least :-(

Pallavi: This economics grad from Delhi University is as passionate as anyone can get. Having worked in the business side of the world (in retail domain as a strategy consultant for something bluish), this gal is one heck of a logical reasoner and when she makes up her mind to make a point, she does make it!

Preeti: This engineer who worked in a presales team in IT is the creative one among us. Will be very interesting to see the ideas she can come with.

And, today we had a small practice session for the group assignments that we would be handed out right from the 1st week (the term started on 27th and we have an assignment on the 30th!). We got together to discuss one of the case studies in our Marketing Class that will be discussed in the class and came up with what we finally agreed was a pretty neat work. And as they say “Curiosity killed the cat”, I just couldn’t resist looking up Google to figure out what had the firm actually done… and surprise, surprise – it had done quite a similar thing that we, as a team, had recommended in our analysis

The Pre Read Concept:

This is something so darn new to folks like me who are accustomed to getting into a class with a zilch knowledge, learning or at least trying to learn the concepts in class and then reading at home. Here at ISB, we are supposed to com prepared to the class – read up all the stuff yourself, understand it and in the class correct your misconceptions and get the concepts baked in. So the net result? Sleepless nights… headaches… and red eyes the next day!

P.S: Too sleepy to sit and proof read the post, sorry for the typos and grammatical errors.