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eNewsCMA’S MONTHLY NEWSLETTER

January 2017

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Greetings from Chandigarh Management Association

My Dear Members

I am delighted to see 2017 is off to an exciting start with acomprehensive list of program offerings. We, at CMA have organizedits first ever industrial visit to Dabur India Ltd. and then we did a PanelDiscussion on Demonetization and there are number of programs thatwe have planned for adding values to our members.

In the coming month, CMA will celebrate its Golden JubileeManagement Day. The function will be attended by managementprofessionals from industry, government, academia, media andmanagement students. I do hope you would be able to join us on thisspecial occasion. I earnestly request you all to bring new members andyoung energy to CMA so that CMA can grow more and achieve more.

Thanks and Regards,

Dr. Aneet Bedi, President (2016-17)

Volumn:50 Number:07

DESIGNATION NAME

President Dr. Aneet Bedi

Vice-President Dr. Niraj Pasricha

Secy. General Mr. Deepak K. Dhingra

Joint Secy. Dr. Surinder K. Sharma

Treasurer Mr Surinder Verma

Member Mr. Amrit Lal Davessar

Member Mr. Chanchal M. Singh

Member Prof. J.P.S. Nindra

Member Mr. J.S. Bedi

Member Ms. Madhulika Kak

Member Mr. R.K. Nayyar

Member Mr. S.B. Khullar

Member Dr. T.L. Kaushal

Co-opted Mr. Ashok Verma

Co-opted Mr. Lalit Kumar Bajaj

Co-opted Mr. Manjiv Kumar Vohra

Co-opted Dr. S.K. Chadha

Special Invitee Mr Anupam Gakhar

Special Invitee Mr. N. K. Bajaj

Special Invitee Ms. Pooja Chopra

Special Invitee Mr. Rohit Aggarwal

Special Invitee Brig Saranjit S. Sahney

Special Invitee Mr. Uma Kant Mehta

Special Invitee Dr. Deepak Jindal

For Internal Circulation Only

From President’s Desk…

2016 – the year gone by……

AN ISO CERTIFIED ORGANISATION

Industrial Visit to Dabur India Ltd Events of the monthIn order to equip the professional memberswith the latest Industry trends and bestmanufacturing practices, ChandigarhManagement Association (CMA) organized itsfirst ever industrial visit to Dabur India Ltd,Baddi, Himachal Pradesh. The industrial visitwas attended by around 30 members of CMA.During the visit members got the opportunityto see the manufacturing processes of Hajmola,Toothpaste, Honey and Chyawanprash.

Mr. Shekhar Nigam, Head Commercial and coreteam of Dabur India Limited interacted withCMA members and he shared aboutprofessionals working and best managementbeing practiced in Dabur.

Dabur India Ltd is one of India’s leading FMCGcompanies with Revenues of over Rs 6,146Crore & Market Capitalization of US $5 Billion.Building on a legacy of quality and experienceof over 127 years. Dabur is today India’s mosttrusted name and the world’s largest Ayurvedicand Natural Health Care Company.

The industrial Visit served its purpose well asmembers got to see the processes in action andlots of queries related to managementfunctions were addressed by the SeniorOfficials. The visit ended with a sumptuouslunch at the Dabur unit Café and Honey andChyanwanprash to savour.

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The panel discussion on Demonetisation-Is it agood money management practice? was heldon 28 January 2017 at UIAMs, Punjab UniversityCampus, Chandigarh.The panel of eminent speakers Mr. GurmeetChawla, Managing Director, Master PortfolioServices Limited, Dr. R K Gupta, vice chanceller,Maharaja Aggersen University, Baddi detailedthe fact whether Demonetisation, which hasgiven sleepless nights to the people withcrores of unaccounted cash, is a good moneymanagement practice or not. It was elucidatedthat when 86% of a country’s currencyconstituting 12.2% of its GDP is squeezed out ofthe market and sought to be replaced by a newcurrency there would obviously be significantconsequences. The probable results of thishuge countrywide exercise were discussed bythe panellists one by one. Mr. Rohit Aggarwalmoderated the even wonderfully. All thequestions arising in the minds of the audiencewere already asked by the moderator andaddressed by the panellists. Mr. Chawalaexplained the relation among Demonetisation,Liquidity and Inflation very well. Dr. Guptaopined strongly that the black economy beingrun parallel would definitely collapse.However, the audience kept on wonderingwhether Rs. 2000 note would also cease toexist in the near future.

DEMONETISATION - is it a good money management practice

A vision…

Cash is like water a basic necessity without which survivalis a challenge. Nevertheless, cash use doesn't seem to bewaning all that much, with around 85% of global paymentsstill made using cash. One of the main reasons is that thereis nothing to truly compete with the flexibility of notes andcoins.

Of course, the digital era is something to embrace, andnew methods of payments will continue to be introduced.But Indians need to recognize the risks and benefits ofdifferent payment instruments, the risks associated withelectronic payment instruments are far more diverse andsevere. Recently, lakhs of debit card data were stolen byhackers; the ability of Indian financial institutions toprotect the electronic currency came into question also animportant reason why people favour cash.

However, the whole isometrics of moving from cash-driveneconomy to cashless economy has somehow beenassorted with demonetisation that was aimed to extractliquidity from the system to unearth black money. A reportby Boston Consulting Group (BCG) and Google Indiarevealed that last year around 75 per cent of transactionsin India were cash-based, while in developed nations suchas the US, Japan, France, Germany etc. it was around 20-25per cent. The depletion in cash due to demonetisation haspushed digital and e-transactions to the forefront; e-banking, e-wallets, and other transaction apps becomingprevalent.

Why is Cash Required?

The magnificence of cash is that -- it just works; even in theisolated whereabouts of India, where the governmentmight not be present physically with its paraphernalia, itsinjunction runs in the form of legal tender that public usesfor business on an everyday basis. A large informaleconomy that supports a major part of Indian populationand their livelihoods also runs in cash. This is why Cash isyet King.

The ground reality reveals a majority of transactions inKirana stores, the go-to shop for daily purchases in Indiaare cash based transactions, because these are generallysmall ticket transactions. The customers as well as Kiranastore owners feel more comfortable in dealing with cashfor small transactions while these merchants also providecredit facility to customers.

However, the governments drive to incentivise consumersand merchants alike to move to electronic modes ofpayments has not found many takers because our cashdriven economy is fuelled through rampant corruption insociety and black money. The modus operations forcorruption are cash so unless we rid our society ofcorruption at all levels this will be a huge task. Imaginepaying a corrupt official through your e-wallet it will neverhappen.

The challenge to go digital

A major obstacle for the quick adoption of alternate modeof payments is mobile internet penetration, which is crucialbecause point-of-sale (PoS) terminal works over mobile

Why India is not ready to be a Cashless Society, yetby Dr. Aneet Bedi, President CMA

internet connections, while banks have been chargingmoney on card-based transactions, which is seen as ahurdle. The low literacy rates in rural India, along with thelack of facilities like internet access and Power make thingsextremely difficult for people to adopt e-transaction route.

The financial safety over the digital payment channels isimportant for pushing the cashless economy idea. Imaginelosing your credit cards or being the victim of digitalhackers can lead to a whole host of issues like deniedpayment, identity theft, account takeover, fraudulenttransactions and data breaches. According to the digitalsecurity company Gemalto, more than 1 billion personalrecords were compromised in 2014.

Cash is here to Stay!

Despite the numerous State endeavours, India has alwaysbeen driven by cash; while electronic payments are seenrestricted to a small size of the population, compared tothe cash transactions. Considering the demographics ofIndia, two-thirds of the population live in rural areas, wherefarmers and poor people are still struggling to get theirhands on their own money. As per Data in July, 2016, 881million transactions were made using debit cards at ATMsand PoS terminals. Out of these, 92 per cent were cashwithdrawals from ATMs. The sole purpose for cards inIndian is to withdraw cash. Changing this mind set will bean uphill task. The last few days have clearly shown thatthe country is highly underpenetrated as far as ATMs permillion people and it's the ATM which will help thegovernment fulfill its ambition of financial inclusion as theATM will play a key role in the last mile towards customerfulfillment which is self-service 24*7 which even a BusinessCorrespondent or Micro ATM cannot do.

Currently, there is a mix of cash and cashless transactionshappening across the country, while many enablers areworking towards turning the cashless economy dream intoa reality. We have taken big strides towards becoming acashless economy; however it will take more than ageneration to change the habit from cash to no cashtransaction. Rushing the economy into a cashless statewithout proper planning and infrastructure will bedisastrous and its consequences will be everlasting. Agradual move towards less-cash society as said by thePrime Minister is the right way forward.

For encouraging digital mode of transactions in thecountry, National Institute for Transforming India (NITI)Aayog, the government's policy think-tank, had announceda lottery with daily, weekly and mega awards forconsumers and merchants. The awards will be offeredthrough two schemes - the Lucky Grahak Yojana forconsumers and Digi-dhan Vyapar Yojana for merchants atan estimated cost of Rs 340 crore. The lack of cash in theeconomy combined with the buzz around electronicpayments systems has also sparked some very innovativesolutions. However, reservations about the timing ofIndia’s big cashless push at this point are irrelevant. It’shappening, ready or not.

Page 4CMA does not necessarily subscribe to the view expressed, which are solely those of the author’s. CMA shall not be held responsible or liable for any liability arising out of publication of this e-newsletter.