My College days

As I was waiting for Higher Secondary results, a family friend asked me to explore the names of Engineering Colleges. This led to my first visit to Commercial Library in Old Council House Street. This Library has good collection for updating knowledge in various fields. There I also came across a book on demography of Netherlands. Though there is difference in incomes of individuals, but the around 75% of people belong to middle class. This is the reason of high consumption pattern in those countries. Unemployed population being supported by an unemployment allowance.

  

After Higher Secondary results were out, I was searching colleges for admission in Physics Honors stream. But suddenly, something untoward incident happened in my family and I was unable to take admission in College for about three months. In the meantime, I came across Chartered Accountants (CA) who encouraged me to join the course. After some reluctance, I joined B.Com (Hons) with Bhowanipore Education Society College with an aim to join CA in due course of time.

Initially, I had some difficulty in coping with the changed stream. But I was completely at ease before the end of First Year. At that time, Father of one of my friend introduced me in SR Batliboi & Co., Chartered Accountants (now a part of  E&Y) as intern.

Thereafter, I got registered as a student of CA course. After clearing Entrance exam, I took  Article ship with the same firm as there was a system of queue for interns as preference for joining as Article clerk in those times. My early joining for internship helped and I need not had to wait for joining Article ship in a prestigious firm.

Having large Corporate Audits, we had to visit outstation too from time to time. There was no internet, even STD during those times. Letters were only mode of communication with the family or office. Travelling and staying with strange persons was an experience in itself.  Sharing experiences with seniors and even experts during the stay was great value-addition in life.

 As I recall, there was considerable absenteeism in College during my final year of degree course. 

Beneficial Role of Equity for both investors and Promoters

Recently Market suddenly moved up belying the fears of downtrend in economy due to Lock-downs and restricted movement of people for work or pleasure.

While there are several theories doing the round about this surge is liquidity-led or bubble created by new investors etc. etc., One important factor leading to capital market surge is up-move in the Stock of Reliance, which has high weight in Both Sensex and Nifty.

The surge is not without any reason. Sensing the fall of deal with Saudi Aramco for stake sale, it sold the stake in Jio Platforms to several cash-rich investors besides raising capital through Rights Issue. This helped the company to go debt-free and power to go for new deals.

Some more companies specially in the Banking and Finance Sector are planning to raise long-term funds by way of issuance of fresh equity or NCD. This will improve their long-term cash availability and capability to acquire weak but viable businesses.

Still there are some well-managed companies or groups having high debt on their Books. These debts were created for fast expansion as well as large-size acquisitions. These companies can also separate various businesses into separate units and offload the partial stake in those units without losing the majority control. Reduced debt in their books will improve their debt-service ratio and better rating by investors.

Many MSMEs are facing problem about non-interest of next generation in the existing family business. Equity can play a major role in dilution of stake by promoters at fairly good value, if done at right time, i.e. before business starts shrinking. To begin with, Periodic allotment of shares to employees at a discount to fair market value as determined by the valuer should be done to improve belonging-ness and loyalty towards the organisation. Fairly good valuation by merchant banker and stake sale can give the business a more realistic valuation. Gain in valuation of shares during stake sale or IPO can give a handsome bonus to the employees. As promoters grow older, they should dilute their holdings slowly to keep a buffer outside the business, which can take care of them in old age. Further, the professional management should be developed in a way that promoters can free themselves from the active involvement in management of Business. With continuation of business with professionals, the promoters may also enjoy the dividends as pension.              


The financiers or the investors should also need to change their outlook. Instead of financing a project at fixed rate of return, they should also look at option of equity financing.

The lenders should not consider the debt as risk-free. This was proved by large NPAs in the Books of Banks. Banks have to write-off huge sums to clean their Books, but not earned anything extra in case of successful project. In case of equity, profit from successful enterprises help in mitigating the loss from failed projects. This is the whole concept behind the angel investing.

However, Banks with access to short-term funds through deposits cannot be involved in investment financing. But to safeguard their interest, the lenders should keep themselves away from long-gestation projects. They must make sure that promoter has brought in at-least 50% of the project cost by equity. Disbursement of loan funds should start only after utilization of at-least 50% of the equity funds and final disbursement to be done only after the promoter has brought in his entire stake. With initial funding done by equity, the gestation period of the project will be less after the lending. This will lead to lower capitalization of interest and ultimately lead to lower project cost. Low debt-service ratio will also help the project to remain viable.

Banks should also be cautious in long-term lending with exposures like Housing Finance. Presently majority of Indians are employed for a continuously long period in the same organisation. This is not likely to continue in future with rapidly changing business scenario and change in requirement of skill-sets. They should keep sufficient margin while financing for housing and personal assets like car.

With reduced scope in lending, more working capital funds will be available to MSMEs and with falling interest rates, personal savings will also tend to move towards equity.

My Schooling

I landed on the mother earth on 18th March, 1959. I was youngest of my siblings and very late issue of my parents. My elder brother was 21 years senior to me and we had two sisters in between us. My elder brother and elder sister are no more. I can recall my first childhood memory about guests on the occasion of brother's marriage, when I was just four-year old. I cannot even recall the rituals and other activities during that marriage. We stayed at Kalighat near Ujjwala Cinema Hall then. I have a faint memory of an accident on cycle (my baby leg got stuck in the spoke of the wheel) near Hazra crossing. We had changed housing accommodation about three times by then after my birth, which I have heard from my family members. I also came to know that I had been to my native place in Haryana and maternal home in Rajasthan before that, though I have no memory of any incidence during those period other than one faint memory of my toe injured due to fall of a pulley at Chetla residence.

My Pre-schooling was done at home guided by a tutor and my younger sister. We shifted to Swinhoe Street, now Anil Maitra Road in Ballygunge, when I was about six and half year old. My formal Schooling started thereafter and I was admitted to a local Hindi medium school in Standard V at the age of seven. After a year, I cleared the admission test of M G Rungta Academy for Standard VI, a fairly standard school of South Calcutta then. South Point was just at an early stage and our school had an edge over them. Though I was weak in drawing, my mathematical skill was good. My scores in grammar used to be low as I didn't believe in rote learning and seldom worked hard for studies. After Class VIII, I opted Science stream and I had to switch to English medium from Class IX, as there was no option. Though I faced some difficulty in taking lessons initially for English Medium, but was able to cope up after some time. I had to take some private tuition for Chemistry in Class X. Finally, I appeared for HS in 1973 at the age of 14 years. Our school verified from the Board Authorities, who confirmed that there is no minimum age prescribed for appearing in HS. I cleared the exam with High Second Division, which was above average in times, where top-scorer from my school got 75% and was among top 100 HS qualifiers in the State. I cannot still understand, it is due to my easy-going tendency or immaturity due to age, I could not heed the advise from my teachers and fellow students including the school topper that I underutilized my potential. I even did not try IITJEE due to sheer ignorance.

My success and qualifying HS, though not commendable one, at that age prove some important things.
One, you should be well-prepared in advance for opportunities available after you cross one hurdle.
Two, you do not need too much time to be spent on pre-schooling.
Three, our syllabus from Class I to Class X is restructured for completion of Madhyamik course much earlier for deserving students.
Four, the fear of switching the medium from Hindi or Bengali to English is useless.

Capacity enhancement for MSMEs

Most of the business enterprises, specially the small ones reach a saturation phase early. This is because the physical capabilities of the owners get saturated by the increased volume not manageable by existing management personnel, complicity and other factors such as age. 

Success in growth at early stage of the entrepreneurs lead to complicity and rigidity. Highly centralized decision making power without any delegation of power lead to saturation of physical capabilities of the organization. Key management personnel should realize the fact and allocate his time judiciously.  There are many petty expenses which are large in numbers, but have little impact as a whole on financials. Small repetitive jobs be delegated and checked only periodically. Time saved can be utilized for more precious work. This not only releases the work load of senior management, but will also lead to built-up of mid-level management cadre.

The physical capabilities can be enhanced to some extent by standardizing the vendors for goods and services. If the organization choose just two or three vendors after proper screening for continuous supply of goods and services without any hiccups. It saves time too as vendors understand the need of the organization. Repeated orders to the same vendor will increase the importance of the organization in his business, which will be absent in case of off-the-shelf customer. One must realize that no vendor will antagonize his regular customer. One must consider the vendor as a stakeholder in business and pay him in time without any need to chase for payments. Automatic payments near due dates also build the confidence about the organization and considerable time is saved for non-receipt of calls and complaints of the supplier. Standardization of suppliers is of more important in Goods and Service Tax era and non-filing of timely returns by vendors can cause loss of Input. This can be more prominent in case of casual suppliers, who may miss putting the GSTIN of the organization in the returns.

Apart from vendors, the organization can standardize the conveyance and fooding expenses for outdoor employees avoiding the checking of detailed expenditures for conveyance and fooding. This will not only save time but also improve the moral of the employees.

The employees should also be respected and their feedback and suggestions for enhancing the productivity and business of the Organization. A well-planned stake in the company can also be considered for employees, who is crucial and have worked for long. There must be a gratuity policy for the employees, not just to abide by the law but to instill confidence and moral of the employees. Happy employees augur well for the company and improve its productivity and efficiency.

Better management of resources, both vendors and employees will enhance the capacity of the organization.

Preface

On this auspicious occasion of Ram Navami,   I am starting my story about my journey of life so far. I have been inspired by my son to put in writing my thoughts and experiences for sharing with others. 

I was also inspired by courage of my father in early part of his life, when he started the poetic  translation in Hindi of the epic "Aabhigyan Shaakuntalam" written by the Great Kalidasa. He also mustered the courage to lay the foundation of a school at our native place, Nangal Choudhury (Haryana) to be built by community donations. My father could not carry on the translation part due to financial stress in the family as he was too much involved in business, where too he had to struggle and was not having a stable source of Income. As regards school, differences cropped up in the community and one section powered by money build up a school building at another place, though on the then outskirts of village. However, one friend of my father came to the rescue and completed the school where my father laid the foundation. Being located at central place, it got recognized from authorities. Later on the school built by rival sect was also recognized and used for conducting higher classes. My father may not have fulfilled the dream of community-donated school, But the Village, which thought of a school in early 1950s today boasts of even Girls College. Even during later part of life, i.e. in his fifties, he learnt English to supplement his scholarly knowledge of Sanskrit. I was really overwhelmed by some people talking about me and my nephew strolling the lanes of village- "Who are these boys? another replied- Son of Netaji has come yesterday." This was about more than 20 years after my father was inactive in the village. He was never been a MP, MLA or even Sarpanch in village. But he was called Netaji. It jolted my young mind and my respect for my father grew many times over.

I myself is a very happy go person and people could not make out my struggles and consider me a rich. To compensate some of my father's vision, I am also working on a project with a NGO Bosepukur Srishti Welfare Foundation for uplifting meritorious students from deprived section studying in Government Schools. I am calling it as a project, as we are still not sure how much we are successful in raising their standards. But some achievements make us proud, like the news when one of our scholars get admitted for Medical or doing B Tech with IIT Kanpur, Jadavpur University and IIEST, Shibpur. Some of our scholars have also been selected for Free Coaching for NEET by IIT Kharagpur Alumni with Narayana Hrudayalaya. We are also proud that one of our scholar is doing MSc with Integrated PhD at IIT Kharagpur.

I want to share my journey till today to become a partner in a medium sized firm of Chartered Accountants. Though it appears rosy, but my life is full of struggles and lost opportunities. I hope my story of struggles in my life will help the coming generation of stay focused and grab the opportunities in time.