TCS, Most precious Tata group's company

Not withstanding Cyrus Mistry's unethical outbursts & revelations in his leaked email to Tata Sons board members, all is not well in Tata Group of companies.

• Excepting JLR, Tetley, TCS most of the other companies are incurring losses or struggling with below the mark performances during the past 10 years.
• IHCL, Tata Steel Europe, Tata Motors, Tata Power Mundra, Tata DoCoMo, Tata Capital are facing troubles.
• Air Asia and Tata Docomo are entangled in legal battles.
• Nano car is consistent loser with no sight of profitability, but is surviving due to emotional reasons of Ratan Tata.
• TCS is facing several visa related cases in USA.
• Nano car project is losing money consistently. 
• This has resulted in their net worth lower and increased debt.
• However increased valuations enabled cushion to absorb shocks without revamping companies.

If there was no TCS, there is no Tata Group worth talking about. TCS grew 10 times in 10 years.

• Tata Consultancy Services (TCS), which has become the darling of the bourses over the last decade, accounts for 60 percent of the group's market valuation and nearly 75 percent of its net worth. Put another way, the worth of the rest of the group is a third of TCS.

• TCS crossed a market capitalisation of Rs 5,00,000 crore at a time when the market value of the rest of the group was all of Rs 3.4 lakh crore (see table). 
• TCS's market-cap was more than the next four Indian IT majors (Infosys, Wipro, HCL Tech and Tech Mahindra) put together.
• Tata Steel was the bedrock on which the group was originally built, TCS is the muscle that now bankrolls the group in substantial measure.
• The group, however, got its act completely right with its acquisition of Jaguar Land Rover (JLR) which has been very profitable - profitable enough to rescue the mother company (Tata Motors) from huge losses in the domestic auto market.
• Tata Power got done in by its massive port-based Mundra project that was to be based on "cheap" imported coal. But cheap turned expensive when Indonesia began taxing coal exports heavily. The net result was Tata Power now has a huge debt overhang of more than Rs 33,000 crore and weak profitability. Servicing the debt is one huge task.
• The group also has to buy out Japan's DoCoMo from Tata Teleservices- at a possible exit price of Rs 7,200 crore.
• The JLR acquisition would not have been possible without the cash flows from TCS. DoCoMo cannot be bought out from Tata Teleservices without TCS money. Tata Steel's huge debts cannot be amortised merely with earnings in steel. A big chunk, nearly Rs 30,000 crore, falls due in 2015, says the BS report. While some of the money may come from selling off non-core assets or from improved cash flows from the European operations, it is the TCS money muscle that really backstops the flagship's financial burdens.
• In July and August, TCS will pay out Rs 12,750 crore as dividends, of which over Rs 9,300 crore goes to Tata Sons, the owner of TCS and group holding company. It is these dividends from TCS that have enabled Tata Sons to keep investing in group companies and raise larger amounts of debt to fuel the group's growth or staunch its losses.
• Maybe it's time to make TCS the flagship of the Tatas. 

Supreme Court Collegium

The present practice of selection of Judges for Supreme Court & High Court by "Supreme Court Collegium" is neither authorised by Constitution nor by any Act of Parliament.

• The Collegium system was evolved through Supreme Court judgments in the Three Judges Cases. But not by a Constitutional provision or by any Act of Parliament.
• The inception of the collegium system was well-intentioned. In all fairness, it did solve the problem of excessive executive interference. But on the whole, the collegium system is a solution which has proved much worse than the disease. Judges are today chosen on undisclosed criteria in largely unknown circumstances. It is remarked that it is one of the best-kept secrets in the country. The system is completely opaque.
• The Collegium system of judicial appointments has resulted in incompetent, inefficient, ethically compromised individuals being appointed as judges.
• The Central government has criticised it saying it has created an imperium in imperio (empire within an empire) within the Supreme Court. 
• The Supreme Court Bar Association has blamed it for creating a “give-and-take” culture, creating a rift between the haves and have-nots. “While politicians and actors get instant relief from courts, the common man struggles for years for justice.”
• The NJAC (National Judicial Appointments Commission) was established by amending the Constitution. The NJAC Act and the Constitutional Amendment Act came into force from April 13, 2015.
• The Supreme Court rejected the National Judicial Appointments Commission (NJAC) Act and the 99th Constitutional Amendment which sought to give politicians and civil society a final say in the appointment of judges to the highest courts. 
• If politicians are involved, what about judicial independence? The judiciary representatives in the NJAC - the Chief Justice and two senior-most judges – can veto any name proposed for appointment to a judicial post if they do not approve of it. Once a proposal is vetoed, it cannot be revived. At the same time, the judges require the support of other members of the commission to get a name through.
• The rationale of having the Commission instead of the collegium system is to strengthen the quality of appointments made, promote diversity and sustain public confidence in judicial system.

My View:

India is a democratic country and political winners in elections will rule the nation. They have to have a say in every aspect of country's administration, including judiciary appointments within the frame work of constitution, laws, rules and procedures. The essence is merit & transparency. 

The collegium suffers from: (1) It is neither constitutional nor in compliance of any Acts. (2) No methodology for selection of candidates. (3) It doesn't provide opportunity to all eligible candidates for competing in the selection process, the essence of a democracy. (4) Group of judges sitting in closed room and announcing the selected persons names, without any supporting material, doesn't impress any one.

Constitution has accorded SC extraordinary power of making laws by a judgement only to award justice to the needy but not for usurping powers for appointment of judges not specifically granted by Constitution or Parliament. The present system of Collegium makes Union Law Ministry, a mere secretariat to type out Judges appointment orders is unacceptable. It must have a larger role.

I am sure in the past two decades several meritorious candidates lacking right connections must have missed the deserving opportunity to become Judge. This has lead to sub-standard judiciary today. Lacking authorization, process & transparency Collegium system must be disbanded immediately.

"Among the four pillars of democracy Executive, Legislature, Judiciary and Media - 

none can be taller than Executive"

Tata Sons Chairman Cyrus Mistry Pallonji fired?

• Tata Sons Chairman Cyrus Mistry Pallonji was fired in its Board meeting today Monday October 24, 2016.
• Tata Sons gave no reasons given for the change of leadership.

• Shapoorji Pallonji & Co has decided to fight Cyrus Mistry's removal as the Chairman of Tata Sons, according to reports. If true, this could result in one of the biggest legal battles in the history of India Inc. Cyrus Mistry is the younger son of Pallonji Mistry, whose construction company Shapoorji Pallonji & Co is the biggest shareholder of Tata Sons, with a stake of about 18.4 per cent in Tata Sons.
• The media-shy 48-year-old, whose term lasted barely three years 10 months, was the second chairman without the Tata name after Nowroji Saklatwala. Saklatwala also had a short tenure, of six years, dying in the saddle in 1938.
• During Ratan Tata's tenure for 21 years, the group's market cap rose from less than Rs 8,000 crore in 1991 to over Rs 4.62 lakh crore in December 2012 i.e. 57 times.
• It has even shown a strange reluctance to focus on the growing Indian market; the international market still accounts for two-third of overall revenues at $70 billion. The performance of the group, nearly four years into Mistry’s reign as Tata boss, has largely been listless.
• Mistry recently said group companies "need to earn the right to grow," hinting that performance would determine their place in the portfolio. 
• It is believed that Tata Sons was unhappy with Mistry's approach of shedding non-profit businesses, including the conglomerate's steel business in Europe, and concentrating only on cash cows.
• Out of 100 businesses ranging from automobiles to retail to power plants to software,  just two of them have been consistent performers — IT services exporter Tata Consultancy Services (TCS) and Jaguar Land Rover.
• Tata Motors in domestic automobile business, despite accounting for roughly half of India’s trucks business, has long been under strain.
• Tata Steel, once the brightest star in the Tata constellation thanks to the $12.5 billion acquisition of Anglo-Dutch competitor Corus in 2007, bore the brunt of a sharp plunge in prices since 2012 abetted by Chinese glut.
• The loss-making telecom business has been locked in a bitter and potentially costly battle with erstwhile partner DoCoMo of Japan.
• Titan, Tata Global Beverages, Indian Hotels, Trent, and Rallis India are slightly better off, but their collective operating profit has grown only 4% in the past five years.
• In FY16, nine of the 27 listed companies in the group reported losses and the earnings of seven others dropped. The only bright spot was that Tata Power and Tata Chemicals reported strong earnings growth in FY16 after turning profitable the previous year. 
• The turnover of India’s largest conglomerate dropped to $103 billion in 2015-2016 from $108 billion the previous year. Net debt rose to $24.5 billion in March 2016 from $23.4 billion a year ago. 
• Cross-ownership of companies — Tata Sons owns stakes in businesses like Tata Motors or Tata Steel and these businesses own stakes in each other — has made it difficult for the group to make the most of its potential as a diversified conglomerate.
• There is an inherent bureaucracy in the system that has gone unchallenged for years.
• Cyrus Mistry was not equipped to handle a gigantic group of the size of Tatas. Mistry was elevated to the top job not only because he was capable but also because Shapoorji Pallonji Mistry is the largest shareholder of the Group with 18.4 percent stake in Tata Sons. But Mistry was a micromanager and that did not help the group of the size of Tatas. He did not have the rapport. He would also not let the leaders of the other Tata companies make decisions on their own.

"Perform or Perish"

Mukesh Ambani and Ratan Tata Homes in Mumbai

• Mukesh Ambani’s ostentatious residence 'ANTILLA' on Altamont Road in Mumbai. Ratan Tata’s new bungalow 'CABINS' is at Colaba in Mumbai.
• While the 27-floor Antilla is as tall as a 60-storey building, Cabins is just three storeys tall. 
• Antilla will engage 600 staffers to look after the residence cum office which has a two-storey yoga studio and health centre, a dance floor, a ballroom, and an ice room. The building also boasts of a four-storey open hanging garden and a 50-seat mini theatre.
• The elder Ambani’s house has space for 168 cars, but Ratan Tata wants no more than 10 cars.
• The estimates are that Mukesh’s 4,770 sq m plot with 400,000 sq.ft floor area mansion cost over Rs.4,500 crore. Tata’s home is a mere 1,200 sq m land and 13,350 sq.ft floor area, if sources are to be believed, cost just Rs.10 crore.
• While Ambani has built three helipads (which he cannot use till the defence and environment ministries give their nod), Tata has categorically said no to having them at home.
• Ratan Tata chooses elegance in comparision to Mukesh Ambani's choice of extravagance.

Tata group chief Ratan Tata has said he is surprised why fellow tycoon Mukesh Ambani wants to live in the opulence of a billion-dollar home in south Mumbai. "It makes me wonder why someone would do that," Tata said in an interview published on Saturday in The Times newspaper of London. "The person who lives in there should be concerned about what he sees around him and (ask) can he make a difference," Tata said when asked about Antilla, the 27-storey Ambani home on Altamount Road. "If he is not, then it is sad because India needs people to allocate some of their enormous wealth to finding ways to mitigate the hardship that people have." Expressing concern about the rich-poor gap, Tata said, "We are doing so little about the disparity. We are allowing it to be there and wishing it away.".

There has been no comment from Reliance Industries in this matter.

"Posterity will remember you for simplicity and for being a giver 

and never for vulgarity of extravaganza and amassing wealth"

KCR wants to demolish Secretariat ....

• Demolition costs, construction of new Secretariat & Legislature (in the same compound), furnishing, facilities & beautification - all combined will cost not less than Rs. 1,000  crores.
• The Vidhana Soudha, Bangalore is a different story. New state of Mysore didn't have either Secretariat or Legislature (Assembly & Council) buildings in Bangalore. Even for a spend of less than Rs. 2 crore (in 1951), Prime Minister Nehru expressed his unpleasantness but Mysore CM K.Hanumanthaiah was adamant. However Nehru laid the foundation stone on July 13, 1951.
• At the time of AP Reorganisation, Telangana was marginally surplus and AP was heavily deficit. But with luxury and mind less spending and taking up large projects without proper financial closure has made Telangana State virtually bankrupt. It is a matter of some more time skeletons will roll out of KCR cup boards.
• The pathetic situation of Hyderabad streets and its drainage systems is a living example of perennial neglect and nothing done during past 2+ years ever since KCR became CM.
• Hyderabad Metro not progressing beyond 50% mark even after 4 years, is a living testimony of efficiency in KCR administration. Facing apathy from KCR administration, L&T is on the look out for exit.
• Welfare measures like Farmer loan waiver, Fees reimbursement, Arogyasri, Double bed room houses for poor and many more are not making any progress since last 2+ years. 
• With so many teething issues like Krishna river water sharing, Institutions bifurcation, APTransco unpaid bills, Unilateral stoppage of coal supplies from SCCL, High Court bifurcation etc still unresolved, why would AP CM handover these secretariat buildings to TS with rights to use for 7+ more years is a million dollar question without extracting any benefit for AP.
• Relentless advertising that all is well and blaming past rulers at the fall of hat will work only for a limited period of time. Not all the time. 
• Finally, Vaasthu etc are personal belief systems and demolishing properties based on these scientifically unproved methods resulting in wasteful & fancy spending of Rs.1,000 crores of public money is nothing short of madness.

"You can fool all the people some of the time, and some of the people all the time,
but you cannot fool all the people all the time ... Abraham Lincoln"

Poverty

• About 21,000 people die every day of hunger or hunger-related causes, according to the United Nations. This is one person every four seconds. Sadly, it is children who die most often.
• Yet there is plenty of food in the world for everyone. The problem is that hungry people are trapped in severe poverty. They lack the money to buy enough food to nourish themselves. Being constantly malnourished, they become weaker and often sick. This makes them increasingly less able to work, which then makes them even poorer and hungrier. This downward spiral often continues until death for them and their families.
• UN promoted “Food for work” programs where the adults are paid with food to build schools, dig wells, make roads, and so on. This both nourishes them and builds infrastructure to end the poverty. For children, there are “food for education” programs where the children are provided with food when they attend school. Their education will help them to escape from hunger and global poverty.
• Poverty is defined as per capita daily spend of less than $16 in USA.
  For India it is less than $1.25, as defined by world bank.
• Over the past three decades, China has successfully led the greatest poverty alleviation program in the history of the world. During that time, an estimated 500 million Chinese were lifted out of extreme poverty. This remarkable success was achieved, in part, through the recognition of land rights. It was Mao’s disastrous collectivization of farmland into huge communes that led to China’s greatest famine. And it was Deng Xiao Ping’s dismantling of the communes and establishment of the household responsibility system that led to China’s first great lurch toward prosperity and stability. An estimated 88 million farming families have gained legally secure land tenure. Consistent GDP growth of over 10% for a decade is another contributing factor.
• A vast majority of the global poor live in rural areas and are poorly educated, mostly employed in the agricultural sector, and over half are under 18 years of age. 
• Access to good schools, healthcare, electricity, safe water and other critical services remains elusive for many people, often determined by socioeconomic status, gender, ethnicity, and geography.
• Poverty in the abstract doesn’t challenge us, it makes us think, lament, but when you see poverty in the flesh of a man, woman or child, this challenges us.  The attitude we have is running away from the needy and not drawing near to them.
• After 2030, negative impacts of climate changes could threaten farming and food systems in every region of the world. Agriculture has always been the interface between natural resources and human activity. Today it holds the key to solving the two greatest challenges facing humanity: eradicating poverty, and maintaining the stable climatic corridor in which civilisation can thrive.
• In USA, approximately 50 million Americans (one out of six) were listed as food insecure (defined as people who either do not have enough or are at real risk for not having enough food for their family). This despite the fact that America looses/wastes almost 100 billion pounds of food a year, or about one pound per person per day.
• In the emerging economies, however, progress continues to elude a large number of people living in extreme poverty.
• 35% of Indians are below official poverty line.

Poverty in India:

• India spends only 1% of its GDP on health (3-4% is considered bare essential).
• 70% population live in villages. 
• 50% of Indians don’t have proper shelter.
• 70% don’t have access to decent toilets.
• 35% of households don’t have a nearby water source.
• 85% of villages don’t have a secondary school.
• Over 40% of these same villages don’t have proper roads connecting them.
• Urban poverty in India is a direct effect of rural migrations fleeing poverty. 
• Unlike China, India neglected improving agriculture productivity which could have alleviated rural poverty.
• With so much emphasis on service sector, the jobs created in that sector were just 2 million despite its contribution to GDP at 50%. This resulted in complaints that globalization and modernization benefited only the rich.
• India's globalization has just left its rural poor on their own without any social safety nets.
• India's market liberalization resulted in market forces investing in profitable areas leaving plenty excluded. 

Burden of Poverty:

• Poverty is broadly the gap between one’s needs and the resources available to fulfill them. That is, people in poverty are those who feel “poor,” who feel they have less than they need.
• Social and economic resources shape the health of individuals and populations. 
• Lacking money or time can lead one to make poorer decisions, possibly because poverty imposes a cognitive load that saps attention and reduces effort.
• The poor often behave in less capable ways, which can further perpetuate poverty.
• Poverty, and its related concerns, places an undue burden on an individual’s limited mental resources, leaving less for other tasks. 
• Poor are less capable not because of inherent traits, but because the very context of poverty imposes load and impedes cognitive capacity. 

"In a country well governed, poverty is something to be ashamed of. 

In a country badly governed, wealth is something to be ashamed of." - Confucius

My View:
Poverty is just a matter of bad luck. It is like a man fallen into a ditch. Unless external help is extended he can't over come it. It is the primary duty of every government, organisation and every human being to help poor people over come it. Hatred towards poor is not only uncivil but also despicable.Poverty unattended will surely breed undesirable violence, crime and diseases. In the words of John F. Kennedy "If a free society cannot help the many who are poor, it cannot save the few who are rich.". 

Katzu rejects Supreme Court summons

Supreme Court Judges - Justice Ranjan Gogoi, Justice Prafulla Panth and Justice UU Lalith summoning  Ex SC Judge Justice Markandeya Katzu for his comments on SC Judgement and Katzu's refusal to appear in court citing Article 124(7) speaks volumes about quality of our Supreme Court judgments and its Judges who are appointed by 'Judges selects Judges' regime by the Collegium without any process of selection based on merit and providing opportunity to all eligible candidates for the post of Judges in HC and SC. The SC Collegium hand picks judges and advocates based on informal recommendations of the members of the Collegium without any criterion for further processing by Ministry of Law. Needless to say many meritorious candidates were not even considered for the posts of HC & SC judges. Overtime SC & HC have become some thing like 'Secunderabad Club' with members passing on their membership to their heirs or friends only.

The Collegium came into existence based on a SC judgement of 1992 rather than by an act of parliament which is in gross violation of constitution. The recent 'National Judicial Appointments Commission Act' was struck down by SC based of some technicalities rather than any merits only to safeguard their usurped power to appoint judges thus deviating from their fundamental responsibility of dispensing justice and defending constitution. 

In this connection it is worthwhile to read the remarks '50% of Higher Judiciary Corrupt - Justice Markandeya Katzu (Retd)' a year ago. In his remarks he was kind enough to limit corruption up to 50%. Corruption in its true meaning not only include making illicit money but also doling out favors to friends and relatives and delivering whimsical judgments etc and the the percentage would go up to 90%.

We need judges like Justice Jagmohanlal Sinha and Justice Bakhtawar Lentin etc.

In our constitution every body is answerable to some body in public domain except Supreme Court Judges who are answerable to themselves only. Needless to say we are observing autocratic tendencies of these judges and/or pro-government inclination tendencies only to get post retirement plum postings especially by the judges whose term is nearing its end.

In this scenario, nation's interests are unsafe in the hands of these Judges and to overcome we must formulate and enforce 'judicial reforms' urgently.

"Nearly all men can stand adversity, 

but if you want to test a man's character, give him power" ... Abraham Lincoln

My View:

The three SC Judges who have issued summons to Katzu in violation of constitution indicated their poor understanding of simple provisions of the constitution and must resign for their unfitness to be SC Judges.

In a large democracy like India, transparency in public domain is essential. Opaque systems like collegium, even if they are producing desired results, are absolutely unacceptable. It is surprising to note how this opaque system which is anti-constitutional and without approval of parliament has come into existence and continuing unabated for over a quarter century. Supreme Court, the defender of constitution, adopting this kind of illegal systems is not only unacceptable but also unpardonable. The need of the hour is to dismantle this system and replace with an organisation like UPSC urgently. This is a classic case of interpreting the provisions of constitution against its spirit and misusing the trust & authority vested in the apex court.