Life is a rollercoaster...

Don't worry. This is not about Ronan Keating crooning "Life is a rollercoaster" to a million teenage hearts and causing a warp in the space-time continuum.


Life in India is a rollercoaster seems to be the general feel from an American expat family in Bangalore...

".. the rhythm to being an American expat in India. The roller coaster analogy is probably the most helpful at illuminating the general feel of it in most things.
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But the roller coaster is about more than just cool adventures and minor (and some major) annoyances. There's just not much middle here - no gentle sloping part to this ride where you go peacefully around the corner and reflect on the rest of the park.
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Now, since I realize this sounds like me bitching about our pampered existence, I am bitching about a full-time staff of three people in a palm-tree lined resort. I know. There's times I just loose all patience.- I CAN DO MY OWN DAMN LAUNDRY AND DRIVE MY OWN DAMN CAR!!! Stop calling me "ma'am"! And... stop calling my 2 year old "sir".
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It took us 4 months to get a bank account opened and its been 8 months and we STILL dont have screens on our windows. But...you can call a party planner on a Wednesday and throw a full blown St Patricks day themed party 2 days later."

Check out the full post here.


All these maids and drivers seem such an inefficient allocation of labor to somebody coming from a high-labor-cost economy (aka DIY culture aka you-gonna-charge-100-bucks-an-hour-for-that-!!! culture). In this case, I think the problem is aggravated by the fact that one spouse in an expat family usually doesn't work. So there really is no need for so much domestic help. But I am sure many all-IT families would love to afford this.

Gave me a chuckle when I read the "stop calling my 2 year old 'sir'" part. We now have a part-time maid back home in India to help Mom in the morning so that everybody can leave on time. My li'l 7-year old sis positively demands the maid to call her "sir"!! And they usually do!

But the biggest problem any expat family will face is the total lack of privacy. Everybody brazenly wants to know everything about everybody. The whole notion of privacy is lost on many many people. I had touched on this in a previous post about paper email in India.


Yes India is a very chaotic place where everybody wants to take the shortcut. But what Frank Sinatra sang about New York can equally be applied to this chaos - "If you can make it there, you can make it anywhere".

Temasek Holdings and GIC: A short profile of Singapore government investment firms

For those who have read my previous post on (Temasek + GIC) vs. RBI tug-of-war, here is some info on the Singapore government's two investment firms - Temasek Holdings and GIC.

Temasek Holdings
Mandate: After independence, the Singapore Government established Government Linked Companies (GLC's) to kick-start investments and growth in key industries. The aim was to setup companies that would put Singapore on the map as a leader in many emerging and important industry sectors; but which needed significant capital which could not be provided by individual entrepreneurs. E.g.: Singapore Airlines, Singapore Technologies, Chartered Semiconductor, Ports of Singapore Authority, Neptune Orient Lines, Singapore Mass Rapid Transit, DBS Bank etc etc.

Initially most of these investments were controlled by the Ministry of Finance (MoF). Temasek Holdings was setup to take charge of investments in many key GLC's. The original mandate was to continue to invest in local Singapore companies to provide them the capital to compete more effectively and develop key technologies on the global stage. Over the years, Temasek Holdings has also invested its returns in external companies and markets to improve returns.

Established: 1974

Portfolio size: US$ 80 billion

Average return: 18% compounded annually over 32 years

India direct investments:
ICICI Bank
ICICI OneSource (BPO)
Mahindra & Mahindra
Bajaj Auto
Apollo Hospitals
Medreich
Tata Teleservices
Reliance Energy
Shringar Cinemas

India fund investments:
Merlion Fund
WestBridge Capital Partners
Reliance India Power fund

Useful Links:
Temasek Holdings 2006 Annual Review
On The Prowl - Profile of India approach by BusinessWorld India
Profile of India approach by Asia Times



Government Investment Corporation





Mandate: To preserve the international purchasing power of the Singapore government's foreign exchange reserves.

Established: 1981

Portfolio size: US$ 100 billion

Average return: 9.5% compounded annually over 25 years

India direct investments:
Matrix Laboratories
Punjab Tractors
Ambuja Cement

India fund investments:
IDFC
Actis Private Equity Fund
IL & FS

Useful Links:
GIC India investment profile - BusinessWorld India
GIC investment returns - Asia Finance blog
Singapore: The red dot and the dancing elephant - BusinessWorld India

Bal Thackeray: Icon of Mumbai

Tehelka.com has published the results of their poll about Mumbai.

Biggest Mumbai Icon: Bal Thackeray
Most Hated: Dawood Ibrahim
etc etc
Full results here.

Via Satish

(Temasek + GIC) vs. RBI tug-of-war

Haha... What we all thought would happen has come to pass.

The Singapore government's uber-investment firms - Temasek Holdings and GIC had been stymied for some time in their efforts to each take a 10% sake in India's ICICI bank. The Temasek and GIC efforts were blocked by the Indian central bank - Reserve Bank of India (RBI). There is a law that caps to 10% the holdings of a foreign entity in an Indian financial institution. RBI had argued that since both Temasek and GIC were owned by the Singapore government, they are considered a single entity.

It had been commonly thought that RBI was simply jockeying with the law to negotiate a Singapore banking license for the State Bank of India (SBI). All of that has proved true. There is news that GIC and Temasek may be cleared by June to each take a 10% stake. In return, SBI will get a Singapore banking license.

In India, there really is Paper Email!

Google had an amazing April Fools' joke out - GMail Paper Archive.

But wonder of wonders, such a service already exists in India. The Indian Postal Service has a service called "ePost". Emails sent to the post-office will be printed out and delivered to the recipient in the village. Similarly, somebody in the village could write a letter and pass it to the postman; it would be transcribed into an email and sent!!

"S.K. Bharadwaj's octogenarian uncle S.N. Bharadwaj has never seen a computer. That's not surprising, since he is a farmer in India's remote state of Uttar Pradesh. His village has no phones, never mind Internet access. Even so, the old guy is "delighted" to get emails several times a week from his nephew in Delhi, some 300 miles away.

India Post's ePost system allows anyone with Internet access to send email to those without it and vice versa. The logistically ambitious project is emblematic of modern India: Though it's a global technology powerhouse, life for many of its people hasn't changed much in centuries. A quarter of Indians live below the poverty line, and only about 6% use the Internet.

Using ePost, Bharadwaj can send an email to his uncle's local post office, where it is printed and hand delivered. In reverse, rural patrons can handwrite letters and have them translated into emails. Delivery by ePost-gram costs less than 25 cents per page and usually takes a day, compared with about a week by snail mail."

Check out the full story at Fast Company...


I am sure there is some translation service embedded into this whole thing. Mr. S.N. Bhardwaj is not going to read an English email from his nephew. And I can't imagine S.K. Bhardwaj typing laboriously in Hindi on an en_US keyboard...

An for all those non-Indians out there who are going to ask - What about Privacy?
Relax.
Firstly, In India, privacy is not important. Example: Everybody knows how much everybody else is making in the same office, and knows all minute details about their co-workers.
Secondly, with privacy involved, this service would not have been possible at all.

Real estate market in Hyderabad etc

This blog has an interesting view on the real estate market in Hyderabad.

Meanwhile, there are plans for 4 completely new cities to be built near Bangalore, Hyderabad, Bombay and Gurgaon. These will be built by Real Estate Investment Trusts.


As usual, make your own research and judgments.

Discovering India the right way

The Sunday NYT tells how to have a satisfying short tourist trip to India. Pragmatically, they don't advice the tourist to pack everything there is to see in India within 2 weeks. Instead, the model should be to sample the richness of a particular region.

"FOR the first-time visitor to India, the sheer vastness of the country — more than a million square miles — all but defeats the romantic notion of seeing all that this place has to offer in anything approaching the usual time frame of a normal vacation. Retirees no longer punching the clock, college students who want to take a couple of semesters off, backpackers on a global journey of exploration: these are the kinds of travelers that India seems made for.

But what about the rest of us who are limited to one or two weeks of vacation a year? Is India completely beyond our grasp?

In a word, no. Even sampling the tiniest geographical crumb of India over a period of 7 to 10 days can be a satisfying travel experience.

Quite rightly, no one wants to miss the Taj Mahal, especially on a first visit, so our suggested route pivots around that Platonic ideal of tourist attractions. Spending a couple of days first in the nearby capital of New Delhi — a strange patchwork of imperial Mughal monuments, bustling urban villages, leafy British Raj-era avenues and expanding middle-class housing colonies — is bound to give you a good taste of urban India. Still, some two-thirds of Indians live outside the nation's cities. With that in mind, this route, after passing through Agra, site of the Taj, and the ruins and palaces of Gwalior, culminates in Orchha, a riverside village well-stocked with palaces, tombs, Hindu temples and ordinary village life.

Rajasthan? That fascinating, tourist-infested merry-go-round has been deliberately omitted, though it is a place worth coming back to when you have time to explore its less overdeveloped pockets. The hiking trails of the Himalayas and the beaches of Goa? Next time.
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Read the rest of the article here.

Picture: Available on Wikipedia with a GPL license.

McKinsey reports on Indian and other offshore labor markets

McKinsey had come out with 2 reports some time back - "Sizing the emerging global labor market" (Report 1) and "Ensuring India's Offshoring future" (Report 2). It has some very interesting data that goes beyond the hype on the actual state of offshore workforces. The core employee numbers in different locations are based on studies by the McKinsey Global Institute. But they also have figures from a survey of HR professionals on suitability of these employees in MNC's.

The major data presented...
-- In India, 4% of the total university educated workforce hold engineering degrees compared to 20% in Germany and 33% in China. Most grads in India have a generalist education (Report 2).
-- In India, currently there are 14 million employees with <= 7 years of experience (All fields combined). 2 times that if the US and 1.5 times that of China (Report 2).
-- 2.5 million graduates are being added every year in India (Report 2).
-- But only a small % of these are suitable for employment in MNC quality companies. 25% of engineering graduates and 10% of generalist graduates. Better than the 10% in China but Central Europe figures are 50%.
Reasons for low suitability: "A lack of language skills, an emphasis on theory at the expense of practical knowledge, and a lack of cultural fit (meaning interpersonal skills, as well as attitudes toward teamwork and flexible work, that are at odds with the norm in multinationals)"
(Report 1 & 2).
-- Salaries will rise until they cap at 30% of US figures, same as Mexico and Brazil. Beyond this figure, labor cost arbitrage doesn't make sense. But there can be local maxima if all the offshoring in a country is centered in 1 or 2 locations leading to huge attrition(Report 1).

The full articles can be found here (Free registration required)
Sizing the emerging global labor market
Ensuring India's offshoring future

Pay checks in Indian IT, Finance and Manufacturing

Via Gautam Ghosh's blog
You can check the salaries in India at this site - PayCheck India

Some indicative figures:
Vice-President: Rs. 5,355,105.58
Project Manager: Rs. 1,710,159.99
Senior Engineer: Rs. 994,350.35
Fresh Grad: Rs. 300,000 - 400,000

I have checked with a few friends in India, and the weighted salaries on the site are very representative for IT. For Finance, it doesn't quote iBanking salaries, only insurance salaries. I have no friends who are insurance salesmen...

Some things to note
-- Most of the companies tend to quote Cost-To-Company (CTC) as the package. While in Singapore and US, the quoted package is usually your basic salary.
CTC includes [Basic + Allowances + Loan opportunity costs + Retirement benefits + Variable pay (!!!)]

-- Having said that, the allowances are a core part of the salary which will ALWAYS be given. They are just a structured way to give the employee more money outside the basic salary.
So if there is a taxi allowance of Rs. 50k as part of the package, the employee will always get 50k. Plus extra taxi reimbursement every time a taxi is taken after 9 PM. This is different to Singapore where the taxi claim is an actual reimbursement.
Rationale: Basic salary is kept low by shifting more salary to allowances. So retirement benefits paid are low, as they are a % of the basic.

-- Tax rate in India is 33% at the high end. But the tax code was formulated long long long before the IT boom, when a Rs. 300,000 package was considered for CEO's. Anything over Rs. 250,000 is taxed at 30%.
(Source: finance@Indiamart)
110,000 = NIL
100,001 - 1,50,000 = 10%
150,001 - 2,50,000 = 20%
250,001 upwards = 30%
1,000,000 upwards = 33%

Compare this to Singapore:

(Source: Inland Revenue Authority of Singapore)

	Chargeable Income ($)	Rate (%)	Gross Tax Payable ($)
On the first On the next	20 000 10 000	0 3.50	0.00 350.00
On the first On the next	30 000 10 000	5.50	350.00 550.00
On the first On the next	40 000 40 000	8.50	900.00 3 400.00
On the first On the next	80 000 80 000	14	4 300.00 11 200.00
On the first On the next	160 000 160 000	17	15 500.00 27 200.00
On the first Above	320 000 320 000	20	42 700.00

So, if you have a package of S$ 100,000 = Rs. 28 lakh
Income tax in Singapore = S$7100 = Rs. 1,98,800
Income tax in India would have been Rs. 8,66,500 for same salary


How to Compare

-- Trying to understand the Indian CTC structure on the above website is a total waste of your time. You will get it wrong.
-- So better to modify your overseas package to suit the CTC structure without the loan component. There is a [Total Remuneration - Loans] CTC figure on the PayCheck site.
The corresponding overseas package is your [Basic + Always-paid allowances + Average bonus + Retirement benefits - Income tax]. Do not count medical benefits etc as the overseas and Indian benefits cannot be easily compared. Also, these are a very very small part of the Indian CTC package.
-- After this you might want to compare the retirement benefits alone. This will give an understanding of the take-home pay


Special Cases
MSFT starting salary:: ~ Rs. 1,000,000
Google India starting salary:: ~ Rs. 1,300,000


Reading is fundamental
Salary "survey" at In Hyderebad blog
Salary figures at R2I blog

Nike cricket ad

Got this link from a colleague at work. Nike's latest cricket ad running in India.

Runs for about 2 mins, and there is no mention about Nike until the very end. It brings out the cricket obsession in India, a sport in which we have achieved something, relatively. Personally, I think the whole scene is a bit contrived and silly. Try it in reality and you are asking to get whacked if you break a dada's windshield with some pseudo-stylo shot.

Nike and Adidas have been in India for around 10 years, at least. But only with the recent economic boom, more and more people can afford these brands. When I left India for Singapore in 1999, the best selling Nike was their lowest priced model which cost Rs 1000 (=US$20 = S$40). That was one really ugly shoe :-). But now Nike has paid around 38 mill US$ for a 5-year sponsorship of the Indian cricket team. And they will be spending multiples of that on marketing.

It should be noted that Indian shoe factories do the manufacturing for well-known western brands. Around 1999, Liberty Shoes was a major local brand in sporting footwear. And of course we also have the Indian version of Timberland - Woodland Shoes :-). I guess some enterprising Indian living abroad realized the potential of cloning the concept of high-priced loafers. Woodland has been very successful and has branched out into overpriced clothing etc etc.

Lets hope local brands provide worthwhile competition. You cannot out-advertise Nike and Adidas. But you can definitely compete based on innovation. This is what ASICS has done. They make great running shoes. And the strategy is paying off. I will be getting an ASICS next time, instead of my current overpriced S$150 Adidas.