MARCH 2015

ARTHNITI

INTERVIEW WITH SSE

FACULTY MEMBERS!

Read all about the

lives of Pal, Shreya
and KKR before
SSE!

SSE WINS SIU

FOOTBALL!
SSES BRILLIANT
VICTORY AT SIU

ARTHNITI ENTERS THE

BLOGGING SPHERE!

LAISSEZ FAIRE 2015

READ ALL ABOUT
SSES 4TH ANNUAL
COLLEGE FEST

ARTHNITI

ARTHNITI
Arthniti, is the annual college magazine published by SSEs Economic
Journalism club, Arthniti. The magazine which initially started out as an
economic journal, was a compilation of articles written by students on various
Economic issues and thoughts. This year, the magazine went through a few
changes, and Arthniti has officially become SSEs annual college magazine.
Arthniti shall now include an update on all the events that transpired in
college during the academic year, much like a yearbook! We hope you enjoy
reading it!

Arthniti has now

become SSEs
annual college
magazine!

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2014-15 has been

an eventful year
for SSE. The year
started off with
the induction
programme and
culminated with
the Annual Day.
Throughout the
year the institute
remained
extremely active
with events such
as Ethnic Day,
Laissez Faire
2015, Sports
events and finally
the farewell.
Amidst all the
chaos and
excitement, SSE
has surely had an
extremely fun
filled and
memorable year
that can be
cherished by one
and all.

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Editorial Team
Faculty-In-Charge: Ishita Ghosh
Sushma Nayak
Chief Editor: Aishwarya Karunakaran
Consulting Editor: Geet Chawla
Economic Editor: Kaustubh Chahande and Shloka Jaiswal
Non-Economic Editor: Varun Mehta and Sanaya Chandar
Creative Team: Padmakshi Karanjkar, Vainat Desai and Sarayu
Nandakumar
Reporters: Manasi Nikam, Nandita Ramesh, Akshita Mathur and
Krishna Betai
Cover Design: Kripa Jayram and Rahul Gupta
Photography: Kalyani Saxena

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Contents
S. No.

Conents

Page No.

1 Editorial Boards Message

2 Economic Moats: Are They Necessary For A Business To Survive?

3 The Governments Promises Are Incredible

4 The Russian Oil-igarchy

11

5 Srsly, News

13

6 Change Is A Like Runaway

15

7 Greek Austerity Tales

17

8 Laissez Faire 2015: Fest Diaries

19

9 Laissez Faire 2015: At A Glance

23

10 Dissolution Of The Planning Commission

25

11 Lets Play A Game

26

12 Smart Cities

28

13 SSE Wins The SIU Football Tournament!

31

14 Potential Investor

33

15 Love Undoubting

34

16 Contribution Of The Indian Forging Industry To The Growth Of The Indian

Economy

36

17 How Elections Aect The Economy

38

18 Faculty Interview

41

19 Rationale Behind The Irrational

43

20 Medieval India: Trade And Commerce

45

21 Ode On A Grain

48

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Editorial Boards Message

The entire team at Arthniti would like to thank our teachers Sushma Maam,
Sukalpa Maam, Ishita Ghoshal Maam and Ishita Ghosh Maam, for their
continued support and encouragement.
Heartfelt thanks to our sponsors Bussan Auto Finance (Mr. K. P. Sunil and Mr.
K.R. Rajesh) without whom our magazine would have remained a dream.

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Economic Moats: Are They Necessary For A

Business To Survive?
COMPETE - Create Offbeat, Modern, Progressive & Enterprising Team of Experts
By: Sushma Nayak
Aishwarya Karunakaran

What keeps you going when you know there are players around as good as you or even better? Do
things differentlyis it? Or have a unique edge over them! Yes,you'vegot it right. In agung ho
world where cutthroat competition seems imminent, the only way to stay in business appears
economic moat.
The Swiss Alps, canals in Venice, restaurants next to the Eiffel Tower or the closest Mc. Donalds wherever you go, Coca Cola is one thing you can find with great ease. A drink that has been widely
accepted by the world enjoys nothing but an Economic Moat.
The concept of economic moat was coined by American business magnate and philanthropist
Warren Buffett. Years ago, a castle was usually protected by a moat - a deep, wide ditch
surrounding a castle, fort, or town, typically filled with water and intended as a defence against
attack. The moat would circle the castle and protect it from hostile attacks. The wider the moat,
the more cosseted the castle was. Thus, according to Buffet, a moat is the competitive advantage
that a corporation enjoys over other companies in the same industry. In his words, In business, I
look for economic castles protected by unbreachable moats. A company may attain competitive
advantage through constant improvement, novelty and acts of innovation.
Coca Cola, the worlds largest non-alcoholic beverage producer, is believed to enjoy competitive
advantage over its competitors. Heres an interesting case in point. People who have known about
the companys smart strategies may be aware that soon after Roberto Goizueta took charge as
CEO of Coca-Cola in the 1980s, he confronted tough competition from Pepsi that was taking a
chunk of Coke's market share. His management was Pepsi-focused and targeting an increase in
market share. Goizueta decided to cease competing against Pepsi and instead compete against
other generic fluids. He asked his team about the average fluid intake of an American per day. The
answer was 14 ounces; Coke's share of that was a meager two ounces. Goizueta said Coke needed
a larger share of that market. The opponent wasn't Pepsi. It was the water, fruit juices, tea, coffee
and milk that comprised the remaining 12 ounces. People should go for a Coke whenever they felt
like sipping something. Consequently, Coke put up vending machines at every street corner. Sales
scaled and Pepsi has found it difficult to catch up since then. In 2011, Coca Colas market share
was at a whopping 25.9% as opposed to Pepsis 11.5%.
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!
Coca Cola has a competitive advantage which probably prevents other firms from entering or
competing in the industry. This could be because of the companys ability to keep its costs low,
strong branding or certain characteristics that other firms have not been able to imitate or
replicate. An important aspect to be noted is that a strong value chain, nurtured through robust
partnerships with suppliers, distributors and retailers, has enabled Coca Cola meet the demand of
its consumers across 200 countries.
While economic moat may seem advantageous to a firm, this may not always be the case.
Economic moats only protect the company from the threat of competition, however, external
threats such as changes in the consumers tastes and preferences are not accounted for. Coke
today is facing such a threat. With consumers around the world adopting a healthier diet, the
consumption of coke is decreasing. Consider Mexico, the largest consumer of soft drinks in the
world. Mexico has gotten its wake up call and has started taking drastic steps to improve its
citizens diet. The state of Mexico has introduced schemes such as Nutrition on the go which
aims to maintain the BMI values of school children. Moreover, Mexico has implemented the Soda
tax and Junk food tax that taxes sugary drinks and junk food. The State intends to charge one
peso per liter, or about 8 cents, on soft drinks and an 8 percent sales tax on high-calorie foods,
including potato chips, sweets and cereal (Villegas, 2013). Similar to Mexico, people around the

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world are taking the issue of obesity very seriously and are making sweeping changes to their dietwhich means no more coke.

!
Coca Colas arch opponent Pepsi, has found a smart way to tackle this threat. While Coke has
made promises to increase international sales, Pepsi has found the key in diversification. The
process of change started in 2006, with Pepsi Co. appointing Indra Nooyi as its CEO. Nooyi,
understanding the shift in consumers preference from soft drinks to healthy nutritional drinks
and snacks, refocused Pepsi on water, juices and sports drinks. The company is now aiming to
expand its nutritional business from $10 billion to $30 billion.
Coca Cola on the other hand, promised an increase in marketing by $3 billion. While the company
is making a positive effort to go healthy with Vitamin Water and Odwalla, soda continues to
remain 75% of Coca Colas sales.
Thus, the bigger question that looms ahead is, while Coke enjoys a situation of economic moat, is
this subject to change? Is Coca Cola being nave and not responding appropriately or is Pepsi Co.
taking an unnecessary detour? The answer to this shall hopefully be answered in the future.

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The Governments Promises Are Incredible

By: Kaustubh Chahande
Suppose a government wants to discourage housing constructions in areas prone to floods, it can
achieve that in a number of ways. One of which could be to declare that it would not subsidize
disaster insurances or maybe warn the people that it would not compensate the residents in case
of a disaster. However, people may expect that the government would compensate them anyway,
because it always has done so in the past, and ignore the warning. In this manner government
policies can be potentially self-defeating.
This is a classic example of a time-inconsistent problem, documented by Finn Kydland and
Edward Prescott in their 1977 paper Rules Rather Than Discretion: The Inconsistency of Optimal
Plans. In this paper the two economists explain how discretionary policies can be self-defeating.
According to them, if governments can act at their discretion, they can break their promises,
therefore the government's promises are not credible. Rational individuals forecast this breaking
of promises and change their own behaviour to suit. This prevents discretionary government
policy from working. Thus, governments should credibly commit to following simple rules, and
not use discretionary policy.
Kydland and Prescott believed that a governments promises of greater price stability face the
same difficulty. To tackle high unemployment, it will boost the economy to improve employment
figures, but this tends to push up prices. The government thus faces a trade-off and has goals at
odds. Individuals recognize this and so do not have confidence in the governments promise of
low inflation. This defeats the goal of increasing employment by increasing demand, because
people know that higher wages will be offset by higher prices. Accounting for rational
expectations, the effect of the boost is simply higher inflation.
For this reason the two economists have proposed that instead of having a free reign to set
economic policy, governments should commit to following clear rules. A more radical solution to
this problem would be the introduction of an independent disciplinarian. In macroeconomic
policy this kind of role can be taken by independent central banks, which place less weight on
employment and more weight on low inflation than the government does. Their control of
monetary policy allows the government to credibly commit to low inflation.
This paper had widespread impact. Following this research central banks around the world
started to commit to a long term policy of pursuing price stability and low inflation. The U.S. had
put in place an implicit policy of seeking low inflation. Subsequently, from the early 1990s, many
countries such as New Zealand, Sweden and the U.K. introduced a policy of inflation targeting.
This kind of targeting involves the central banks committing to pursue a defined range of
inflation. Richard Rogerson, presently a faculty at the Princeton University, noted that many of
such changes have been a result of the paper. The period of low inflation that arose in the 2000s
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is often attributed to the rise of independent central banks. Incidentally, this period was also
accompanied by strong growth.
In the past few years, modern economics has taken the issue of credibility in a different stride.
John Kay, from London School of Economics, notes how the blame is laid out on the commitment
to establish credibility if the desired outcome is not reached. He has explained how credibility has
become a dogma - credibility instead of being a tool to achieve effective economic policies has
become a goal in itself.
We can try to assess the importance of credibility in financial markets by asking the question: how
much does time-consistency of central bank policies matter to the investors? It is a fact that just
before a central bank announcement the investors decisions are highly influenced by the past
policies of the incumbent governor. To note this one does not have to look any further than the
media coverage of financial markets before the scheduled announcements of the Reserve Bank of
India or the United States Federal Reserve or any central bank as a matter of fact. But generally,
how much of the expectations formed by the investors are actually derived from all knowable
information about the central bank or the government? It turns out that even most of the
sophisticated investors do not form most of their expectations from predictions of future public
finances but conventional wisdom, and what they come across in financial news media. So instead
of basing most of their investment decisions on their own analysis, they rely on opinions given by
financial experts.
It is in fact interesting to note that many financial pundits retain significant credibility even after
getting their predictions wrong. The biggest example of this would be the case of credit rating
agencies during the Global Financial Crisis of 2008. Companies such as Standard and Poors,
Fitch and Moodys gave the highest ratings to securities such as Credit Debt Obligations (CDOs)
which lived up to the nickname they later received junk. Yet the ratings these companies
presently offer immensely influence investors. Hence, in important market scenarios credibility is
sometimes irrelevant.
Thus in retrospect, more vital than fixating on credibility is warranting that the proposed goals
will actually lead to needed outcomes, because central banks can gain credibility by sustaining
price stability, however it would not matter much if price stability is not accompanied by
economic growth and full employment.

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The Russian Oil-igarchy

By: Shloka Jaiswal

Seeing how much of an effect an adverse economic climate in the form of a falling rupee and
rising inflation had in the ouster of the previous government, the incumbent Modi Sarkar will
definitely be relieved at the current collapse in oil prices and subsequent slowing down of
inflationary forces.
Falling oil prices for a country which imports the majority of its consumed energy means a lower
toll on the balance of payments, and lower inflation. On the flip side of the coin however, for oil
exporting nations, falling prices ring a death knell for political and economic stability in the
country.
This has become so widespread that there are UNDP reports now warning against commodity
dependence, or a trend of low income countries becoming dangerously dependent on commodity
exports.1 Such are the events that have resulted in economic cataclysm in Russia.
THE WAY HERE
The reasons are multi-fold. Firstly, the vertiginous assault of oil prices in the last decade has led
to oil rich countries becoming extremely dependent on exports for the majority of their revenue.
Russian oil and natural gas exports amounted for 68% of their export earnings.2 Easy inflows
resulting from a commodities boom largely caused by an over-consuming United States and
expanding China have resulted in maximum resources in oil producing countries being poured
into the oil industry , at the expense of the crippling of other industries.
A stock market index is built to give an idea of the general performance of an economy at a glance,
and a cursory comparison of Russian and Indian stock indices reveals the extent to which easy
money inflows from natural resources can distort incentives to develop other industries. In Indian
stock indices a variety of industries all over the spectrum of technological sophistication can be
found ranging from textiles to biotechnology. The market cap is also evenly distributed along
different sectors. In Russia however, the majority of big companies are in the energy sector only.
This is the proverbial equivalent of putting all your eggs in one oil tanker. This goes a long way in
explaining why $248 Billion of market capitalisation has been eroded, leaving the Russian stock
market capitalisation at $531 Billion smaller than Apple at $648 Billion.3
This lopsided development has led to socio-political inertia, with despite having a high per capita
income ($23,200 adjusted for PPP), there is rampant income inequality. The 110 richest Russians
own about 35% of the countrys wealth 4, and the countries cities barring Moscow and St.

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Petersburg are all unimpressive in size and infrastructure, all indicators of a society which is still
top heavy economically and politically.5
The Russian economy in recent years had already developed the unique distinction of having
negative net factor income from abroad (capital outflows recorded at $151 Billion in 2014) due to
the paucity of investment opportunities inside the country.6
The nations financial institutions have been ravaged by crony capitalism in the form of a high
number of loan defaults caused by oil companies mostly run by those close to the nations political
elite. The cost of credit has already surpassed developing country levels, as after the collapse of
the rouble had caused the central bank to raise rates by an unprecedented 550 basis points to 17%
from 12.5% to increase the demand for the rouble.7
THE WAY FROM HERE
Economic adversity in the country has only been precipitated by the decline in the rouble and
trade sanctions induced after alleged Russian aggression in Ukraine. 8
The Russian Governments budget had been delicately balanced on trend of rocketing oil prices,
such that the country would be in a deficit if the price of oil at any point dropped below $100 a
barrel.9 With crude prices now well below $60, the effects of the price decline can be seen
manifesting themselves in the form of a 0.5% decline in GDP YoY last November, the first decline
since 2009, with expected contractions of up to 5% if the glut in prices persists. The projected
fiscal deficit for FY15 is expected to be 0.6%.10
Despite raising interest rates, the Russian Economy will most likely be unable to retain foreign
capital as S&P and Moodys have downgraded Russian debt to just above junk level, a move which
led the government to suspend ratings from these agencies in the country.11
As things stand, Vladimir Putin will have to rule will with an iron fist in a velvet glove if he is to
rescue his political career from such a political quagmire. While his expansionist ambitions have
suffered at the hands of a world where oil prices are falling amid booming energy consumption,
he will probably have to rediscover some of his more democratic virtues if he is to convince the
EU to remove the trade sanctions levied and provide economic relief to the country.

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Srsly, News
By: Sanaya Chandar
The revolutionary powers of the internet have had far reaching impacts since the boom of the
World Wide Web in the 1990s. Some say that the internet represents an anarchic society devoid of
any reasonable laws to govern the goings-on of avid internet inhabitants, while others celebrate it
for that very fact; that principles such as Net Neutrality give the little guys a fighting chance
against their bigger, well established opponents.
The freedom granted by the internet has created a vast online forum for people all over the world
to air their views that has in turn, transformed the business of disseminating news. Every major
news publication and magazine has its online counterpart and a Twitter handle to ensure viewers
a speedy update on the news of the world. It is even said that every major world event finds its
way to Twitter before it reaches any television news channel.
With the internet becoming a hub of discussion and discourse, a new strain of news has gained in
popularity: satirical news. This strain is particularly popular among the internet-using youth as
they shift ever more rapidly from print and broadcast media to the world of social media. The
supposed lawlessness of the internet grants these news sources the license to toe the line between
politically correct and painfully, hilariously true and often, allows them to ignore that line
altogether and whizz past it in their vehicles of satirical wisdom.
Last year, with the elections in full swing, we found amidst the rubble of biased and shoddily
written newspaper reports, a completely objective take on the battle of Modi vs. Gandhi through
John Olivers Last Week Tonight. While adding comedy to serious matters of the world might
seem like a daunting task, this funny Brit has managed to do it seamlessly for two seasons now,
tackling various issues such as the question of the death penalty in the United States or the
Scottish referendum that was concluded last year. We find instances of this new way of reporting
news even in India when we look at The Week that Wasnt with Cyrus Broacha, FakingNews,
News Laundry, the YouTube news channel that pokes fun at Indias professionally dodgy news
reporting and puts these reports out to dry, or even the All India Bhakchod when it brings light
to socially relevant issues in its own uniquely comedic way.
What makes satirical news so very appealing? For starters, humour never fails to ensure rapture
and entertainment, but whats most intriguing about satire in news is not that it presents a
completely unbiased picture of world events, but with a very plainly stated opinion that colours
the reporting of this news. When John Oliver talks the ostentatious welcome ceremony that
Narendra Modi received at the Madison Square Garden when he visited America, he unabashedly
admits to thinking that it was an unusually ostentatious greeting for a world leader. Whats so
refreshing about this is that his opinion remains quite detached from the actual event, not
dictated by any affiliation to any political party of news syndicate. It isnt a doctored report,
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designed to laud or berate specific individuals or entities; it is a regular citizens outside view of
the news available for everyone to read. It presents this opinion to viewers and makes them think
about how it came to be. These shows do not force an opinion down the viewers throat; they
present them with a few side of a multi-faceted debate and make them think about the validity of
their own opinions.
Another interesting factor that has contributed to the popularity of satirical news is that beneath
the layers of wry wit, there is a load of research that is conducted to ensure the authenticity of
everything that is reported by these anchors. This research tells viewers that the opinions
presented through these channels are by no means arbitrary or blindly held, but are the result of
some very extensive research.
Regular news channels on the other hand, have not done much to help their cause.
Sensationalism and unnecessary dramatics have made broadcasters a laughingstock in the
country. When people can no longer take serious news seriously, thats when the answer to the
question of a dash of satire becomes a firm why not?. More importantly, when the news itself is
so gut-wrenchingly horrible in most cases, it becomes rather tiresome to hear a self-important
news anchor rant about these atrocities; thats when embracing the satire becomes all the more
appealing.

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Change Is Like A Runaway Train

by: Varun Mehta
Change is like a runaway train, speeding its way into our lives. A child is born into this world, frail
and defenceless. His mind is a blank slate. I was once that child. I watched the world around me
with the eyes of an infant, without judgement, with nothing but pure wonder and curiosity. I
watched the colour of the leaves fade, I watched them wither and die. I watched the sun rise and
set. I reached for the stars and the moon, trying to pluck them out of the sky and put them away
in the jar by my bed. I watched the colour fade from my mothers face, the smooth glow of it being
replaced by tired lines. With every sunrise, every sunset, every flower that bloomed and
shrivelled. I grew.
As I grew, I learned. The blank slate with which I came into this world changed. It grew into an
endless expanse of thought and emotion; a tumbling, rolling ocean of wonder, anger, sadness, joy,
and fear interspersed with opinion. Little thoughts are born every day, every minute, in dark
corners of my mind, unfolding tentatively, creeping in slowly.
I soon became aware of the expectant eyes around me, watching me, studying my every move,
judging me. I felt the cold, unfriendly fingers of society prying into my mind. I can no longer look
at a fellow human being without judgement in my eyes. I cannot see them for what they are, for I
have changed.
I will soon step into the world, as impermanent in its nature as I am. I will attempt to understand
it. It will be demanded of me, that I come to terms with violence, dishonesty and unkindness. I
must soon take a stand on them- either condone them or condemn them. I will be asked to
partake in such cruelty in order to survive in this world and I shall do so, justifying it, calling it
inevitable, in order to silence my conscience. I will settle comfortably into a mundane, quiet life,
revolving around a pay cheque and all the comfort that it buys. My dreams will be locked away in
a jar with the stars and moon.
I will watch the colours fade away from my eyes, my hair and my skin. I will leave behind the
vigour of my youth and keep walking. I will pass by my broken dreams, and keep walking. I will
look at my reflection, years from now, and I will be unable to find the child I left behind
underneath all the lines on my face. I will begin to lose my senses, one at a time. I shall become
prone to illness. I will watch my friends die and soon I will take my place beside them. With no
fanfare, no celebration of the life I have lived. I will quietly slip away. I will die.
We are ephemeral beings, born into impermanence. To be born, to change and then to die is our
destiny. In this world, the one thing that ties the present, the past and the future together, the one
thing that will remain long after our bones turn to dust, is change. It is not something to be
avoided or feared, but something to be embraced. I stand today on the threshold of destiny, as I
have for every moment that I have lived and breathed and will continue to do so until I die. I
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watch the world around me changing, as it has been since the moment it was born and as it will be
until the day it is reduced to dust.
Change is sudden, unexpected. It cannot be fought. It cannot be denied. It transcends class,
religion, everything. It is the sole universal force that guides us all. The only tool we have in the
face of this formidable force is our conscience. Unlike rocks, being constantly weathered down by
wind and rain, we have the opportunity to rectify change that has happened for the worse and to
be thankful for the change that happens for the good. That is why I know that I will not succumb
to all the forces working to weather me down.
I will stand and fight with all my might to fill my life with the same wonder and fascination.

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Greek Austerity Tales

Should the troika be more sensitive the countrys demands?
By: Arshiya Rathee
Greeks drink and celebrate as the winning party Syriza gets the anti-austerity word out to the
troika and the other EU governments. Greeks believe that their newly elected leader, Mr. Alexis
Tsipras will stand up to the new day Hades (the European Central Bank, European Commission,
the IMF and other European governments) and not fall in line with existing and upcoming bailout
program due the end of this month. Nonetheless, will Mr. Tsipras- Achilles personified live up to
his name or default on his promises as did his predecessors after assuming the chair?
Mr. Tsipras says there has already been enough austerity measures in Europe, agreed. He further
explains that these measure have done nothing but create deflation in the country, agreed.
Greeces debt has been increasing (from 120 per cent to 175 percent of its GDP), despite tax
increases and spending cuts and is therefore unsustainable, not agreed! Greece has been awarded
prolonged repayment periods and low interest rates, specifically in comparison to Italy and
Ireland. Greeces debt servicing stands at 1.5 per cent of its GDP, especially in the face of primary
budget surplus in the third quarter of 2014. Greece should be the last country to rule its debt a
Herculean task.
Runs on bank deposits have been on a continuous rise in Greece, amounting to 11 billion in the
month of January itself, adding to the declining tax revenues. These flagging conditions together
with Mr. Tsipras economic recovery plan [(i) rehire 12,000 public sector workers, (ii) put a stop to
privatisation, (iii) a benign aid to downtrodden Greeks (iv) a magnanimous rise in the minimum
wages], could bring to a close the economic recovery achieved last year(a 0.7 per cent growth in
the third quarter of 2014, putting Greece on the top performers list of the year in Europe).
What happens if Greece rebuffs the debt payments? Nothing too drastic, just that Mrs. Merkel
gets the much awaited opportunity to bust the already crumbling Greek banking system. Greece
has outstanding payments due this month and early March to the IMF; which the new
government has vowed to fulfil.

Without successful conclusion of the end of February

negotiations, Greece could miss out on 7 billion aid this year and 13 billion by the year 2016
from the IMF (since the troika seems disgruntled at the Greek government to impose enough
reforms). Greece is dependent on official foreign support; the private lending markets have shut
their doors to country in the aftermath of S&P ranking of Greeces debt as BB+, i.e., junk; Mr.
Tsipras is in no position to strike a deal in his favour and as a result on would have to default on
most of his promises if not all. Mr. Tsipras has understood that, be it to sustain the economy or go
on a spending spree as his campaigns slogan screams. No wonder, the new government has
scraped off the outright debt forgiveness clause from their proposal, that too well in time! Not so
mighty anymore, huh?

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But all said and done, Greek voters angst and decision in electing the left wing Syriza cannot be
disputed. The bailouts and austerity programs have forced many Greeks into poverty, youth
unemployment climbing up to 50 per cent and depression on a steep ascent. But Germany and
the IMF just would not budge; they are adamant in refusing to consider the next round of debt
relief unless Greece complies with the structural reforms (austerity courses) and continue
running on fiscal deficits. German official Hans Peter Friedrich (a senior official in Mrs. Merkels
right-centrist governing coalition) has gone on record in voicing out German animosity towards
Greece - The Greeks have the right to elect whomever they want, and We have the right to no
longer finance Greek debt.

They are not as wary of the Grexit now as they were in 2012,

although the price would be huge for both, Greece and the rest of the continent- Greek economy
would be injured more and would trigger doubts of Spain, Italy and Portugals withdrawal from
the union.
Despite everything, they are not comprehending the compounded costs of austerity which Greece
would have to bear. Spending cuts would drive down the Greek economy further into a
depression, deepening the wound falling tax revenues; this would force another cut to be
undertaken by the government which would lead to decreasing in private spending and in no time
the Greek economy would shrink to the size of an African one.
Mr. Tsipras four part plan [(i) keep 70 per cent of the present reforms and replace the rest with 10
new reforms negotiated and agreed upon by the OECD, instead of the troika; (ii) reduce primary
budget surplus to a mere target of 1.5 per cent of the GDP from 3 per cent in 2015; (iii) swap debt
with either perpetual bonds- extended maturity period of 11 to 30 years or GDP linked bondsinterest payment is linked to Greek growth; (iv) spending 1.9 billion in humanitarian
assistance] is not without logic. Though Mr. Tsipras bargaining power is rather weak, the new
governments proposal could be taken into account for negotiations.
Eurozone creditors should provide Greece the flexibility it is asking for in its reforms, for mutual
interests lest anything other than that, especially in the face of formerly failed reforms to revive
the Greek economy; and accord the Greek economy a chance to breathe!

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Laissez Faire 2015

Fest Diaries
Chapter 1: I Hear a Noise

I dont mean to go on a rant, but something seems to have changed recently. The other
inhabitants of my educational institution have taken to some very strange behaviour. They appear
to be possessed, as though some singular object is directing every action of theirs, unifying them
in a frankly, alarming fashion. If I didnt know any better, Id say they have a true purpose, a goal
to work towards.

No, it must be something else.

It was a noise that first alerted me to this bizarre turn of events. I cant quite put my finger on it,
but it must have been that distinct rustle of the wind when it decides to change direction. Maybe it
was the soft clicking of the keys of a keyboard as emails were sent to anyone in possession of an
email address. It could also be the faint bickering sounds of canteen deliberations, I do not know.
Perhaps it was that random student who declared in high and gay tones, its fest time! Its one of
those things that Ill spend a lifetime pondering without finding any answers.

Having added yet another item to my list of unanswerable, existential questions, I decided to
investigate a little further into this pickle. I noticed that there was a discernible distinction
between two factions of the student population: one that was very obviously affected by this virus

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and one that remained curiously unaffected. Now I dont take myself for someone who is easily
alarmed, but these findings made me feel extremely uneasy.

If education is a hot pot of intellectual curiosity, I am a ladle, dipping myself into it to pour out its
soupy contents in a community food distribution programme. Over the weeks, I discovered that a
social order was beginning to form itself, a sort of hierarchy. Im no anarchist, but a spontaneous
social reorganisation does warrant some high level primary research.

I continued my research for several weeks and found strange patterns of behaviour in those
affected by the virus. Their feathers seemed a tad ruffled and their faces screamed deceit. I saw
smiles on their faces, but terror in their eyes. It scared me. Was I the only person who noticed
this? As the weeks passed by, the terror grew and subsided intermittently. I only ever saw the
terror when they smiled, as though they were afraid of something, but were smiling it away
forcefully. Say hello to my little friend, indeed.

I also noticed that the terror was almost directly proportional to the number of periodic
gatherings that the affected population formed among themselves. Each gathering would begin
will an elevation of terror and end with its nullification. As per the data collected and my other
findings, I can only surmise that making these small huddles in local eateries served as a sort of
drug, a medical supplement, if you will.

I sit here now, perched in front of my laptop, contemplating the true purpose of this exercise and
of all life itself. After all these weeks, I realised that I had hitherto only witnessed an incubation
period. My readings seem to be going haywire, much like the behaviour of the affected
population. More and more people are beginning to come under its sway almost voluntarily.
People are running around in organised chaos and the virus has spread to other educational
institutions as well. It seems that it is nigh impossible for the human body, nay, the human brain,
for this is an affliction of the mind, to remain immune against this all powerful strain. Its hard to
resist the prospect of official merrymaking in the name of a higher power. I find myself wondering
whether I will be immune to this epidemic. Maybe it is a question of when rather than if. There
are questions that science has failed to answer and when questions posed by any research exercise
find no conclusion, it is best surmised that forces, other than the ones that human beings are
acquainted with, are in operation. It is time to put myself at risk and expose myself to those
forces

To be continued

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Chapter 2
By: Aishwarya Karunakaran
Distressed faces and agitated voices seem to have taken over the third, fourth and fifth floor of our
building. If that wasnt enough even NCC is doomed. Posters were hung and flyers were handed
out.Laissez Faire 2015 is here.

In the last few months, LF 15 had taken over every SSE students life, regardless of whether one
was involved in the fest or not. Students, who once mocked this very fest, now work tirelessly for
the same. What brought about this change? The answer is as much a mystery as the Bermuda
triangle.

Over the last one week, the preparations for Laissez Faire 2015 intensified. The college was filled
with pockets of students grooving to the latest Bollywood tunes, pumping their fists in the air like
their very movements were vital for a continued flow of Oxygen on campus. Volunteers ran after
their preys with passes for various promotional events like hungry predators. Event heads, who
probably have 75% attendance over a span of five semesters, now talk about cash flow and
demand-supply problems like those Suits on Reuters. Hunched backs in the computer lab sit and
prepare questions for the quiz, while some others try to collect money from students desperately
clutching on to their wallets. To make things more difficult, the fest is that one time of the year
when even the most prodigal student will put a miser to shame.

The LF bug hasnt hit just the students. The teachers, much like the students, can be found
scuttering around campus putting pieces together for the big day. LF 15 is the only thing on
everyones mind.

Months of hard work and drudgery will be put to test today. The outcome, while unknown, should
be of least importance. What one must take note of however, is the consistent and relentless
efforts put in by the Fest committee and faculty. With every minor and major setback, they chose
to rise up and fight, instead of backing down. LF -15, if nothing, will be a robust reminder of the
efforts put in by the LF 15 team.

Chapter 3
By: Padmakshi Karanjkar
It came, it saw, it conquered. LF15 was a fest to remember. And why wouldnt it be? The
organizers put in their blood and sweat into bringing about one of the most promoted and
successful fests that SSE has seen.

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From the countless film screenings as pre-fest events, to those during the fest, and a high-energy
after party, the organizers succeeded to weave the theme of films into the fest with lan.

The motley students of SSE, who on usual occasion refuse any sort of uniformity in their apparel,
all donned their identical blue fest tees for the duration of this fest. If this was a Bollywood movie,
I wouldnt be surprised to see them all break into synchronized dance. And Im sure that given the
chance, they would have, for the air was charged with a contagious excitement that had been
steadily growing over the preceding weeks, and even the most blas, sat up and took notice.

Volunteers from the various committees hustled about, making sure that everything was perfect.
Even if it wasnt, well, as they say the show must go on! And it did. The reels of our real-life fest
kept rolling.
Determined Event-heads turned from being like bosses into being bosses, and led their teams
with panache. Dozens of students scurried all about, a few still perplexed about why they were
doing so in the first place.

Blaring out musical numbers in the afternoon certainly helped not only to amp up the
entertainment quotient, but also to reel in a greater crowd for our filmy fest. Every event had
some great participants, and went off without a hitch.

As for now, well, lets roll the credits for this years Laissez Faire.
It has just one last message for you Ill be back.

LF 15Talkies: A Glance

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LF 15Talkies: A Glance

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Dissolution Of ThePlanning Commission

by: Manasi Nikam
On Independence Day, PM Narendra Modi declared his intent of abolishing the Planning
Commission and instead adopting a think tank, which will function as a guiding force for
sustainable development. The new body would lead the country based on creative thinking,
public-private partnership, optimum utilisation of resources, utilisation of youth power of the
nation, to promote the aspirations of State Governments seeking development, to empower the
State Governments and to empower the federal structure.
The Planning Commission was adopted after the Soviet command economy during the infancy of
Indias independence period. The purpose was to map out a plan for Indias agrarian economy.
The PC would allocate Central funds to states, sanction capital spending of the central
government, provide necessary co-ordination between ministries, reconciling their priorities, and
a critical long view for policymakers, executing and making the Five Year Plans. The PC was also
consulted while forming the budget. Over the years, the PC emerged as a parallel cabinet.
However, now, the PM accuses the PC of having outlived its purpose. After the reforms of 1991,
the role of the PC has been reduced to setting goals for the economy which are rarely adhered to.
It is not accountable neither to the Parliament or the CAG of India. The states have complained
that the PC uses a one size fits all policy, especially while allocating funds to states. The schemes
formulated by the PC for the 5 Year Plans usually degenerate into ineffectual statements.
Secondly, as the Indian economy moves toward the capitalist side, the concept of a Planning
Commission, which was adopted in India after Joseph Stalin's socialist economy policy seems
obsolete.
More recently, the PC was criticized for spending 50,000 $ to renovate two office toilets. Another
blow came when it suggested that citizens who earn more than Rs. 27 were not poor, in a country
where almost 22 % of the population is below poverty line.
I believe that Mr.Modi's mantra of minimum government, maximum governance will work in
favour of the Indian economy. States will have more autonomy regarding the utilization of funds
and the process would be decentralized to a certain extent. There is no dearth of schemes for the
poor, but now ensuring that the benefits of these schemes reach the concerned is a bigger
challenge. A more dynamic system must be implemented which will address issues such as
climate change, sustainable development, infrastructure, health and education.

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Lets Play A Game

By: Nandita Ramesh
There is no economic concept more frequently used than Game Theory, the study of strategic
decision making. Whether you are betting on the outcome of a match, or trying to decide an
ending for your novel; if there is more than one way, Game Theory comes into play.
Since Game Theory is nothing but the science of deduction, who better to walk you through its
intricacies than the greatest detective of all time: Mr. Sherlock Holmes. Assuming you are a fan or
have at least watched BBCs Sherlock, lets take the example of the last scene of the first episode
(Study in Pink) to see how fascinating Game Theory really is. The episode features a serial killer
who kills his victims by making them eat a pill from a bottle at gunpoint. He asks them to choose
a pill from two identical bottles and eats the other pill himself. However, he claims to know which
pill is poisoned and which is not. In the aforementioned scene, he forces Sherlock to play his
game.
Here if we consider the payoffs as 0 for eating the good pill and -1 for eating the poisoned one
and the pills are named as A and B respectively, then the payoff matrix will look somewhat like
this.

Sherlock\killer

0,-1

-1,0

Since both of them cant take the same pill, that section of the matrix is left blank. Therefore, both
the payoffs that do exist provide a 50-50 chance to each player to live and thus, there is clearly no
optimal strategy. The killer has perfect knowledge (he knows which pill is poisoned) but he is
forced to act according to whatever strategy Sherlock chooses. Sherlock on the other hand, lacks
knowledge or has imperfect knowledge and thus, unless he finds out which pill is poisoned, he is
indifferent to both choices. There is no Nash equilibrium either.
Now let us consider the addition of a third possibility. Supposing Sherlock is given another choice
to either play this game or get shot by the killer, as is the scenario in the episode, then he can
either take the 50% chance of staying alive or 100% chance of being dead. Since Sherlock is
rational, the logical conclusion he arrives at is choosing to play the game. Here he adopts a
maximin strategy, a commonly used strategy that maximizes the minimum gain that can be
earned.
Now let us add to the current scenario the possibility that the gun is not real and that both
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Sherlock and the killer are aware of this. Here we will consider the payoff for choosing the gun
from Sherlocks perspective and the payoff for choosing the game, while the circumstance of
whether the gun is real is written here as the killers ability to shoot.

SHERLOCK\KILLER

Can shoot

Cant shoot

Chooses game

1,2

1,2

Chooses gun

-1,1

2,0

Here it is assumed that the killer gets a greater payoff in terms of satisfaction when Sherlock plays
the game, but still gets some payoff if he can kill him using a gun. Whereas, Sherlock gets
maximum payoff when there is complete assurance that his life is not in danger, but he still gets
some payoff when he plays the game too because he has a 50% chance of winning. -1, the lowest
payoff or the greatest loss, represents the scenario in which he is surely going to die. Sherlock gets
maximum payoff when he chooses the gun and it isnt real. Maximum payoff for the killer on the
other hand, is when he gets Sherlock to play the game, regardless of whether he can or cannot
shoot. His payoff is dependent on Sherlocks strategy since he has given Sherlock the first mover
advantage (advantage involved with moving first, i.e., taking a decision before the opponent so
that the opponent has to change his/her strategy accordingly).
Since Sherlock cant be sure whether the gun is real, he would choose to play the game, because in
the event that the gun is real, there is a 100% chance that he will die, while by choosing to play the
game, he gives himself at least a 50-50 chance at survival.
This situation is somewhat similar to the prisoners dilemma, a classic example of a Game Theory
game, in which the prisoner chooses to confess because he isnt sure whether the other prisoner
will or not. However in this case, the dilemma is only Sherlocks and not of both the players.
However, in the event that Sherlock knows for sure that the gun is a fake, he knows that the killer
cannot shoot and can thus maximize his payoff by choosing not to play the game and choosing the
gun, as he does in the show.
So, here it is - a thorough analysis of the plot a popular BBC series using Game Theory. Game
Theory is a dynamic tool used by economists which finds its application in a host of unexpected
places. Just like the science of deduction, it requires you to think of all possible outcomes and
choose the one that leaves you in the best possible position, all the while remaining two moves
ahead of your opponent. This nifty little theory will definitely leave you Sherlocked.

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Smart Cities
India should be realistic and must prioritise wisely
By: Krishnakali Vaishnav
The Modi budget of 2014-15 signed up India for the Smart City craze overtaking the world. The
Finance Minister, Mr. Arun Jaitely had allocated Rs.7060 crores for creating hundred Smart
Cities across India. (Srivas, 2014) More recently, Smart Cities wove their way into the
conversations between the Indian Prime Minister and the US president, amongst discussions
about nuclear deals, military projects and joint strategic statements. The surprising amount of
attention accorded to this new concept calls for a closer look.
Smart Cities are not as new a concept as we would like to believe. It was put forward by IBM as a
part of their Smarter Planet campaign in the year 2008, when the world was hit by one of the
worst financial crisis of its time. By 2009, this concept had captured the imaginations of countries
like the USA, China, UAE and South Korea who immediately began to concentrate on investing in,
experimenting with and developing this idea which finally lead to the establishment of several
such Cities in these countries with support from IBM and several other players such as Google,
Amazon , Cisco etc. (What are Smart Cities?, 2014)
Smart Cities are designed to be hubs of economic and business activity, having top -of- the- line
physical and social infrastructure backed with new age technology and environmental friendly
power. Good governance and effective institutional infrastructure are also supposed to be
characteristic of these Cities. These Cities rely upon advanced information technology and
communication systems to make the city smarter and eliminate the problems faced by the
current cities such as superior level- such as real time information on traffic congestion, smart
grids to ensure optimal consumption of water and energy, automated sewage disposal systems
and so on.
The primary aims of these Cities are to foster innovation and encourage business via streamlined
regulations, advantageous taxation system and other such incentives and concessions.
Smart Cities are viewed as a medium to control the rapid urbanization observed in most
countries. The stride of migration from the rural to urban areas has been increasing and it is
estimated that by 2050, 70% of the world population will be living in Cities. India with its status
as the fastest emerging nation is no exception. Indias population living in urban areas is expected
to increase from 30% of the population in 2014 to around 41% of the population in 2030. It is
estimated that the level of urbanization will reach 50% by 2039. (East Asia Forum, 2014)These
new Cities are expected to absorb the influx of rural population into the cities so as to enable
India to progress steadily on its growth path.

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It is clear that the idea of Smart Cities and the potential benefits of setting up one are lucrative to
say the least but India must cautious. This sudden flurry to set up Smart Cities may not be
prudent after all.
This Smart Cities at the moment are nothing but experiments, very expensive experiments, which
India has ambitiously taken up and the chances of them being successful seem to be very low.
India may have the technology to make Smart Cities smart, however, achieving success in Smart
Cities requires more than technology. The Metros of India, which are supposed to be the most
developed poles of India, have yet to find solutions to the poor infrastructure, substandard
constructions, unsustainable growth and unbearable pollution. This state of the Metros is a clear
indication of the plight of the rest of the cities in the country. Hence, it is doubtful as to whether
setting up of Smart Cities would resolve these problems and improve the lives of the common
man.
City planning has never been given priority in India and so far nothing significant has been done
to control urban sprawl. This sudden drive to create superlative Cities with exceptional
infrastructure and urban services has caught our bureaucrats by surprise. The urban
administration and town planning authorities have the responsibility to construct these Cities and
resource crunch, in terms of funds and energy, are cited as one of the major obstacles in the path
of building Smart Cities. Clearly, this sudden drive to build efficient well planed urban services
has been a major leap and India does not have the physical or human capital required to support
this leap adequately.
It seems to be more advisable to spend the funds allocated towards building Smart Cities in
improving the condition of the existing cities and improving the quality of life of their existing
citizens. These funds could be used to create satellite cities to decongest the existing large cities
bursting at its seams and hence relive the pressure on infrastructure. In other words, it is more
advantageous to pursue setting up cities with smart elements rather than concentrate on Smart
Cities.
Acquisition of land for setting up Smart Cities is another technical deterrent regarding the setting
up of these Cities is the acquisition of land. In a Communist country like China, land acquisition
has never been a problem whereas in a democracy like India, acquisition of land is a delicate issue
and is very controversial as of today. Unlike China, India does not have the legal power or
resources to takeover land stating the purpose of development. Despite governmental efforts to
pass the Land Acquisition Act 2014, to replace the older less friendly set of regulations set in
1984, this problem is bound to be a major hiccup in the plans for setting up Smart Cities and may
result in social and political turmoil. (Times of India, 2015)
The idea to build a hundred Smart Cities is aimed at improving the business ecosystem of India.
The government however must realize that the business climate of India may be improved by

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simply introducing a few minor changes in the system such as altering the tax laws and making it
more transparent and uniform, establishing laws with respect to litigation and bankruptcy,
hastening or shortening the process of business registrations, single window clearances and so on.
These simple steps would improve the ease of doing business in India by a greater degree and at a
lower cost compared to setting up of Smart Cities.
The government has failed to come up with any strategic plan or even an agenda with regards to
the Smart Cities and they manner in which they shall help improve the business climate of the
country. Without a comprehensive plan and adequate guidelines Smart Cities will remain nothing
but more than run-of-the-mill real estate projects with speculations about high returns while
running over time. Therefore it is desirable for the government to concentrate specifically on
resolving the specific problems faced by businesses rather than attempt to create an economic
haven in an attempt to provide a suitable ecosystem for thriving business. (East Asia Forum,
2014)
Lastly, India has the majority of its population living below poverty line, homeless and plagued by
hunger. Is it then morally viable to divert funds of such a large scale towards building high tech
cities? Instead of aiming to provide superlative qualities of life to the rich should India not
concentrate on uplifting the poor and providing them the basic facilities required to lead a healthy
and respectable life? These are ethical questions which are in need of answers.
Undoubtedly, Smart Cities are the future and India should be ambitious. However, India must
first address the social, economic, political and legal issues and infrastructural bottlenecks facing
her existing Cities before graduating to the next level, i.e. Smart Cities. The lengthy period of 8 to
10 years required for building these establishments from scratch and the additional time period
required to attract investors, entrepreneurs, businesses and residents makes the future of Smart
Cities decidedly distant and uncertain. India must not try to emulate the Northern nations
development models. India has several tasks on its agenda, most of them intricate and complex
and India must prioritize wisely. Hence, Smart Cities, as of today, remain a very futuristic concept
for India.

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SSE Wins The SIU Football Tournament!

Symbiosis School of Economics beat

Symbiosis Institute of Design to win the
Symbiosis International University Football
Tournament!
SSE is the only other institute other than Symbiosis Centre for Management Studies to win this
tournament!

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The football team that has had its fair share of failures, seems to have picked themselves up and
emerged victorious.

SSE beat SID in a penalty shoot out with the winning goal being scored by Dhruv Patwa.

Sauvanik Das, Captain and Goal Keeper

of the team was awarded Best Player at
the SIU tournament.
Das was also awarded the Hiraskar
Award for Extraordinary Achievement in
Sports on the Annual Day.

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Potential Investor
By: Rishad Chatterjee
"I made a killing in the stock market. My broker lost all my money, so I killed him." - Jim Loy.

For several people, investing has often been an inexplicable term. Many others who do invest
usually do not have the slightest clue about what they are doing. However, there are a select few
who have delved into the complex intricacies of investing and have emerged with two things a
valuable hobby and a noticeably fatter wallet.
This article is designed to give you a brief idea about investing and hopefully it taps into a section
of potential investors who have always been eager to learn the ropes of investing. Instead of
simply giving you the definition of terms, the article will answer some basic yet obvious questions.

We begin with the most important question Why invest?

For starters, how does life without work sound? However, it is important that you do not rush to
conclusions. Please note that this article is in no way encouraging you to Zuckerberg your way out
of college and use the extra money for unlimited wifi.
The money up for grabs in the stock market is in unlimited supply an absolute bounty waiting
for the right person to come along and sweep her off her feet and into your pocket.
Most importantly, the stock market is bursting at the seams with investors who really do not
understand it. This makes it far more profitable for the ten percent who do.

The thrills of the stock market ensure that you are always learning more about its complexities
your mistakes paving the way for some of your biggest payloads. Whether you want to retire on
your own island or drive a Porsche to the supermarket, investing the right way is your meal ticket.

It is about now that youre asking yourself why everyone isnt driving the neatest car on the strip.
This brings me to the next question Why isnt everyone investing?

The most obvious reason for this is because there will always be more cases of stock market
failures than successes. For every Warren Buffett, there are thousands of investors who rue the
day they ever got involved. Research itself does not simple ensure success.
It is very important that caution is exercised when it comes down to investing. Often the most
obvious buy turns out to be your absolute undoing.
Investing takes a very solid knowledge, a risk-taking ability and a willingness to learn from
mistakes. Those who find themselves without any of these attributes will never succeed.

Finally when is the right time to begin investing?

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Your research always lays the foundation for your confidence. Books such as The Intelligent
Investor by Benjamin Graham or Rich Dad, Poor Dad by Robert Kiyosaki are recognized as solid
places to begin but every investment author or guru can feed you with chunks of knowledge that
fortify your learning process.
Virtual stock market trading games are available on the internet and are incredibly helpful. Even
scribbling fictitious trades in a book like a quintessential Jeffrey Archer character will prove
beneficial.
Hard work and a healthy curiosity is where you can start. When its the right time to begin
trading, you should be rearing to go.
There are several other questions. When should I buy shares? When should I sell? Which news
channel guru will always help me? (None of them, incidentally) Should I be greedy or cautious?

Your road to achieving Investor Level: Houdini will definitely be challenging but with your drive,
this writer is sure that you can attain such an ascension. With the right amount of caution and
curiosity, your success is inevitable.

"Everyone has the brainpower to follow the stock market. If you made it through fifth-grade
math, you can do it." - Peter Lynch.

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Love Undoubting
By: Sebin Nidhiri

Snuggled in him she slept,

Sure of his warmth, her every night.
Lulled by his word, an untruth her truth,
Her peace in undoubted trust, her innocence too innocent.
Deafness her shield, Silence her sword to ward off truths unkind
For in ignorance,
her bliss, her he, is hers alone.
For that girl I pray.
If only,
Deafness and silence could true an untruth,
Undoubted trust could rewrite the written
Her love, his love hers make.
If only.
To that girl I say
Joy, not bliss. Transience, not eternity.

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Contribution Of The Indian Forging

Industry To The Growth Of The Indian
Economy
By: Padmakshi Karanjkar
Shloka Jaiswal

From the smallest wrench in your toolbox, to the integral, high precision components of a
Maserati, forging is responsible for the creation of a host of metal instruments and tools. The
forging industry in India is a mighty one. It depends heavily on steel supply, which is in
abundance in India. The wares of this industry are mostly supplied to the automobile industry.
Forging is basically a process by which metal is compressed and converted into the required
shape. Economically speaking, this industry is crucial to a country such as India.
The main input required for forging is steel. Not only is steel abundantly produced in India, but it
is also dumped into this country by China. Though this affects the steel industry negatively, there
is a positive effect of this on the forging industry itself. This is because there is an abundant
supply of the raw material, which leads to low input costs. Value-addition is the key benefit of
forging. This labour-intensive process produces high quality products, which are either exported
directly or made into vehicle components that are then exported. There is usually a generous
profit margin of 13-15% associated with this industry.
The benefits of the forging industry to the Indian economy are multi-fold:
The forging industry is very labor intensive, it employs directly and indirectly about 200,000
people. From a period between 2003 and 2008, the industry registered a Cumulative Average
Growth Rate of 29%. It also contributes to the Current Account Balance as 10-15% of the produce
is imported abroad ,mainly to the US, Europe and China. In 2010-11, the estimated value of
exports was $800 million USD. This increase in the export of value added products is a move
towards a developed economy. This is because a large number of Original Equipment
Manufacturers (OEMs) started sourcing parts from Indian firms. Domestically also, the
automotive boom in the first decade of the 21st century resulted in micro and small scale
industries getting a foothold onto bigger and more profitable production models. In 2010-11 the
estimated investments in the forging sector totaled $600 million
Hence the forging industry contributes immensely to reducing Indias unemployment and
Current Account Deficit.
However, a number of factors have affected the industrys ability to contribute to the nations
economy. High prices of production inputs have dampened growth prospects. Recently, the

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industry has been lobbying for a ban on exports of high grade iron imports to China to reduce the
price of the ore in India. Alternatively, the implementation of a 30% export duty has been
proposed. The lowering of corporate taxes has also been pleaded, making the case for the
reintroduction of the Goods and Services Tax at a rate of 8.5% instead of the current 12.5% VAT,
which will bring it on par with the taxation levels in developed economies. Stringent
environmental norms and policy paralysis also affected the industry growth rate. Rising oil prices
increase the costs of running furnaces and quenching heated products
Despite these drawbacks, forging makes a significant contribution to the growth of India's
economy. It provides employment opportunities to millions and generates a noteworthy revenue.
Through the years, companies such as Bharat Forge (founded in 1961) and Mahindra Forgings
have been instrumental in India's economic growth.
The forging industry is a fundamental industry. It creates not only employment opportunities, but
also business and production opportunities for MNCs which want to produce cheaply in India.
Thus, the growth and progress of the forging industry catalyze the advancement of not only
related industries in India, but of the Indian economy as a whole.

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How Elections Affect The Economy

By: Manasi Nikam

The Lok Sabha elections of 2014 created history, not only in terms of the mandate but in terms of
expenditure as well. A whooping sum of Rs. 30,000 crores (5 billion) was spent, according to a
study by the Centre for Media Studies. It is the second most expensive election, ranking behind
the 2012 USA presidential campaign in which, according to the US presidential commission, 7
billion dollars were spent.
It is pointless to discuss the source of this outrageous amount. But, as an economics student, it
makes me wonder, is this largesse after all good for the economy? The Associate Chamber of
Commerce and Industry of India published a study, which estimates that the expenditure will
have a multiplier effect of Rs.60,000 crores. Which brings us to the question how? Sectors like
advertising, media, hospitality, transport witness a definite increase in demand for their services
leading to an increase in the sale of equipment like video camera, packaged water, etc. Span Air, a
private Indian air charter service, had leased out all five of its aircrafts to Congress at a daily cost
of about $900,000. Liquor sales doubled. Unorganised sector workers like coconut sellers,
drivers, vada-pav walas witness a boost in their income. Unemployed youth, daily-wage
agricultural labourers are paid by candidates to attend rallies.
Even government expenditure increases as it tries to appease voters and garner votes by
implementing wasteful, populist projects. A World Bank study on Political Cycles in a
Developing Economy: effect of elections in the Indian States, has suggested an existence of a
trend of populist economic policies implemented by ''opportunistic'' politicians around election
times for political gain. A research paper by Harvard University economist, Shawn Cole, found
out that loans sanctioned to farmers by state-run banks is 5-10 percentage points higher in
election years than in the following years. Such manipulations fuel inflation in the economy.
Campaigns of political parties are largely funded by corporates and wealthy candidates. This
would require a diversion of funds, funds which might have otherwise been used to make a direct
business investment. For instance, consumption of steel decreases in every election year. The
average growth in steel consumption in an election year is 6.45 percentage points lower compared
to a non-election year.
Political uncertainty causes businessmen to delay investment projects. Key decisions are
postponed till a new government is formed, to gauge the future policy environment. Industrial
credit is also affected.
This leads us to conclude that election spending gives only a temporary boost to the economy.
Consumption patterns change, capital expenditures take a backseat which is counter productive

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for the economy. India is the largest democracy in the world with more than 814 million people
eligible to vote. The process of elections is inevitable but India can't afford to spend 5 billion
dollars every election, when majority of the country's population lives in acute poverty. It is time
for the Indian government to consider a more accountable and sustainable form of funding so
that the money can be diverted to more productive investments.

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Faculty Interview
Our faculty members play an integral part of our lives. Whether its for attendance or getting the 8
AM canned, they play very influential roles in our lives. Yet, as students, we only get to see one
side of our faculty members. To change this, Sarayu and Padmakshi conducted an interview with
KKR sir, Abhinav Pal sir and Shreya maam about their lives beyond SSE!

Tell us something about yourself that we dont know already - any hobbies, talents?
S: I was in the editorial board in school and college, and was a consistent student. Other than that
I have stayed in Bombay, Pune, Calcutta, Delhi. Pune remains my favourite.
A: I can beat KKR at table tennis. I have gotten a 0 in econometrics internals.
K: I have stayed in 9-10 cities. In tenth I got 36 in science, 33 in social science, but I got the
highest in Pune University.

What did you aspire to do for a career while you were in grad school?
S: Food or Movie critic.
A: Investment Banker.
K: I was busy with all other things apart from studies.

Which colleges are you from? What did you think about the others college?
S : SRCC has good fest.
A: Venkys (fest) is good.
K: Symbi has the best student crowd.

How was your transition from Delhi to Pune?

S: Like homecoming. Pune is like home.
A: Lovely.
K: Horrible, it was very tough, not easy. Took me around one year.

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Did you actively participate in extra-curriculars? Fest preparation?

S: I was involved in debates, dramatics, even organized a mass bunk, shut the class, etc. However
the teachers didnt believe that it was me because I was known for being sincere and well behaved.
A: I used to play everything - table tennis, badminton, gaming. I was a nerd till 12th standard but
I did miss my re-internals due to table tennis. In my years of undergrad, I got 40%, 5%, and 3%
attendance respectively.
K: I am passionate about cooking, photography and editing, and I love driving, And of course I
love trekking and teaching!!

What are your future plans? How does SSE factor in?
S: My future plan is to do more research in Urban Policy.
K: To open Ladakh School of Economics(LSE) in 8-10 yrs.
A: Be the deputy director in KKRs institute.

Name one thing you like about SSE and one thing you wish you could change. (Grading pattern,
number of projects, etc.)
S: Colleagues, kids, curriculum are what I like about the college. Processes could be more
organised and timely.
A: Colleagues , kids and the liberty.
K: Colleagues, Students and curriculum, I have many opportunities and flexibility in terms of
what I want to teach.

Your funniest or most memorable experience in SSE?

S: Feedback received - Geet going to Bhutan, the gratitude I got from him boosted my morale.
Best memory Ill take away from here.
A:Bashing kkr at table tennis with 21-0 score.It was memorable because he was boasting a lot
about his tt skills.
K: SIU Football win, I almost cried.

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What do you each think of each other?

S: AP is a great stress buster, funny, learned about good movies from him. KKR has always been a
huge help from the start, hes the first person I would go to.
A: Shreya is studious, a nice colleague, KKR is funny, helpful, known as the Soldier of SSE,
knows everything about SSE, is very student-friendly.
K: Shreya is punctual, dedicated, committed, sincere, a wonderful person, good human, always
willing to help. She should be more fun. AP is like a 16 yo kid, very candid, straightforward,
always ready to help. Never says no.Very nice colleague(s), AP has habits similar to mine. Both
performed as soon as they joined. As opposed to other new teachers, who often learn on the job.

How does it feel to be the only male teachers at SSE?

A: We can discuss certain things only with each other.
K: I can do things with AP that I cant with females. There are certain boundaries with female
teachers.

What advice would you give to us?

S: Students need to work hard, in everything, before giving up. Never give up, always try to
improve.
A: Graduation is a time when you should have fun and study. Grades are overrated.
K: Be passionate about whatever you want to pursue. Always give your best and dont worry about
what others say.

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Rationale Behind The Irrational

By: Nandita Ramesh

Economics is nothing if not for assumptions. And one of the biggest assumptions made concerns
the existence of Homo Economicus- a rational being, who has an internally consistent set of
preferences within which he tries to maximize his utility.
The truth although, to quote Gregory House, is that everybody lies. While economists would like
to believe that humans back up all their acts with practical reasoning, the truth is far from it. Most
decisions are based on impulse, emotions and herd mentality, or the tyranny of the majority.
If you shopped like crazy on Flipkarts Big Billion Day when you really didnt need anything you
bought, you probably broke the hearts of economists everywhere. That was an instance of the
retailing major exploiting its consumers irrationality for its commercial benefit. It created a fake
scarcity by plastering sold out boards on major categories, to drive a sense of urgency. Whats
more, neuroscience research suggests that portions of our brains flare up when we see a discount
or lower than expected price. For example, there is nothing that entices us to buy a sweater for
500 if we dont need it. However, if the same sweater is shown to be worth 700 but available at
a discounted price of 500, it will most likely catch our eye. Its the secret to success of all major
sales and offers, much to the horror of economists who believe in rational existence.
There also exists a phenomenon called decision fatigue. Psychologists say that our brains tend to
get tired when faced with a lot of decisions and choices at once, and tend to make bad or irrational
decisions toward the end due to ego depletion. Supermarkets keep candy near the payment
counter, knowing that tired brains would not be thinking straight, and would buy the candy
regardless of trivialities such as wants or needs.
Another popular concept is of hyperbolic discounting. People and their perception of time seem
to be subjective in nature. If you are told that the mobile you want will be available only after 10
days, but a higher, more expensive model is available right now, a person is likely to buy the
higher model as it gives him immediate rewards. On the other hand, if the model he wants will be
available only after 10 days, but the higher model will be available in 8 days, one would prefer
waiting for the model he wants.
We, being as irrational as we are, are also most likely to base decisions on what we have seen or
heard recently than on economic analysis. If we see an ad too many times, or a very noteworthy
campaign, we are drawn toward the products being advertised, regardless of their prices, quality

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or any other factors that one should consider. Trust, is also a factor that economics fails to
consider most times.
If you are leaving this page feeling dumber in any way, or if your reaction looks like the famous
Jackie Chan troll, believe me, rationality is overrated. If these irrational decisions are behind the
functioning of real life market systems, then who is to say that rationality is of utmost importance.
This is the age of behavioral economists. Where understanding decisions is important, we rope in
the psychology, anthropology and even biology and neurology behind it all.

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Medieval India: Trade And Commerce

By: Abhishek Mukherjee

Medieval India refers to the post-classical era in India. It is marked by the rise of the South Indian
Empire of the Cholas in the 9th century to the fall of the Mughal Empire in the 18th century. It can
be further divided into (i) The Early Medieval Period (9th to 13th century) (ii) The Late Medieval
Period (13th to 18th century). This time period was hugely influenced by many Islamic thinkers like
Farabi, Ghazzali and Ibn Khaldun. Other Hindu thinkers whose writings influenced state and
society during that period include Sukracharya, Hemadri and Basavaraja.
This article would be covering the contrast and similarities between the Delhi Sultanate
(1206-1526) and The Mughal Empire (1526-1857) with respect to their ideas of trade, commerce
and industry under different rulers.

By this article, we would be able to trace the growth of

economic thought through the 13th Century to the 19th Century.

This paper would be covering the following aspects of trade and commerce:
Foreign Trade
State policy

Foreign Trade
The Delhi Sultanate: During this period, Indias foreign trade was carried on by both sea and land.
The sea route involved five important regions, viz., The Red Sea, The East African Coast, The
Malaya Islands, China and other Pacific countries.
Muhammad Tughlaq (1300-1351) advocated the import of silk and horses. It is to be noted that
horses were considered crucial as part of the cavalry, and for ceremonial purposes, transport and
pleasure riding. There was a great demand for robust Arab horses during this time.
Indias exports included textiles and food grains. Some of the main trading areas were Patenxy,
Diu, Gogha, and Cambay among many others. Cambay was considered the most important of all
sea ports. Its residents included rich Hindu and Muslim merchants, craftsmen and traders. It was
during this time that an extremely high demand for luxuries is observed.
The trade was mostly carried by land by the Turks and Mongols to Afghanistan, Kashmir and the
rest of Asia.
The Mughal Empire: The Muslims dominated the sea-borne trade during medieval times. This
was challenged by the Portuguese who, owing to their superior fleets and commercial leverage,

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took over the monopoly of the sea trade, which was later on also shared by the Dutch and the
English.
The variety of articles of trade also seems to have gone considerable change during the Mughal
period. Imports shifted from being just luxuries to also including consumer goods, raw materials
and limited luxuries. Consumer goods consisted of metals for building and military purposes.
Raw materials consisted of silk, perfumes, drugs and other necessities. Exports also expanded to
spices, opium, sugar and rice.
It is to be observed that there was a favourable balance of trade during the medieval period since
exports exceeded imports. This was because both these empires believed in trading goods for
silver instead of other goods.
Economic Policy:
The Delhi Sultanate: Ala-ud-din Khaljis(1296-1316) perennial warfare put an upward pressure
on the prices of necessities. He hence took the bold step of fixing the prices of food grains and
other essential commodities. He was also able to control the supply of such goods by making the
sellers of goods register themselves under the state and sell a part of their supply to the state for
military purposes. The concept of subsistence can be seen being implemented in such a way that
the sellers were left with just enough for themselves.
He also incorporated the system of tax revenues and debt collection agencies. Such a step was met
with discontent among the people, due to their reduced incomes and scarcity of food grains. The
food grains that were bought from these sellers were stored in warehouses and were supposed to
be used in times of famines and war calamities.
By reducing the profits of these sellers, Khalji was able to create a demand for money. This was
met by introducing the concept of money lenders, who, back then were merchants with money to
invest. This was seen as an additional income for them.
The Sultan became unpopular because he put the peoples livelihood in danger for his armys
welfare. Moreover, punishments for part payment of their respective shares was very brutal,
which made the people even more scared.
The Mughal Empire: A few changes were made to the system of tax revenue collection. The people
now had an option of paying it either in cash, or as a crop share. This lead to the rise of townships
and qasabas as people now had liquidity and an option of payment. Also, the concept of
subsistence was removed and wages moved into the picture. Laws became more professional.
Penalties had to be paid in case of default of payment instead of punishments.

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Conclusion:
Thus, we can see the parallels between the two most influential empires in the history of Medieval
India. The importance of control over maritime trade routes is evident from the success stories of
merchant accounts. Needless to say that the war did have a negative impact on the economy. On
some level, it may be argued that such war was inevitable and the measures taken by the rulers
was in the best interest of the state. Some arguments can also be made in favour of the strict tax
system, which was designed to support the army, and was also a way of making up for excess
spending on liquor, entertainment, decorations and ceremonies. Such rulers also gave away
precious stones and metals as gifts.
Arguably, these two periods have made contributions to the existing tax systems in India.
Moreover, the development of foreign trade policy can also be traced to the post classical school of
thought in India.

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Ode On A Grain
By: Shradha Kochhar (Batch of 2011-2014)
Let us step into the library of humanity; the legends, the catastrophes, the triumphs and the
struggles are set across the shelves of time, each epoch connecting and lengthening the string of
mans story. From the Neander Valley to the New York Sky line, the progress of the human race
has been abetted and fuelled by courage, intellect, opposable thumbs and of course, food. If there
was ever an oracle of human history that could look over mans shoulder and foretell his journey
ahead it would be the grain that sustains and defines what it means to be alive.
Agriculture giveth life and taketh away.
Man tilleth the soil and maketh hay
Until man learnt the art of cultivation he roamed the earth in social groups or herds migrating
from food source to food source and defining the saga of the Hunter Gatherers. The Indian subcontinent stands as a testament to mans social evolution. 60 million years before I began typing
out said ode on a grain the land mass, now, India was pushing against Asia and heaving forth
one of its most distinctive featuresthe Himalayas and the Hindu Kush. These ranges made India
almost inaccessible by land, but the network of rivers that viscerally criss-cross the country not
only made life possible, but allowed it to flourish. The Indus Valley and the Gangetic plains were
some of the first sites of sedentary civilizations, giving way to the birth of agriculture in the
Neolithic age.
Agriculture took its first primitive steps in India in 8000 BC with the naissance of the Neolithic
age. The social structure that we see and recognize today came into being as man settled into
villages and towns, notably in the middle-eastern Sumerian cities, and the Vedic civilization.
Animal husbandry was realized in the new domestic setting of life. Implements were invented and
techniques were refined (the wooden plow, threshing and storage), evidence of both of which can
be found in various vedas like the Rigveda and the Samaveda.
So as we turn to the next stanza of my ode we surmise that India has deep agricultural roots.
Flipping through the leaves of the agrarian history of India we see that as BC melted into AD the
grain that, today, helps define modern governmental policy, the poverty line, inflation, and not to
mention the survival of millions, was domesticatedrice. The Indian Gangetic plain was one of
the main areas where rice was and is cultivated. If agriculture is the life blood of civilization, then
water is at the heart of it; as any child, taking its first steps into the world of science, will tell you
that without sunlight and water, plants cannot make their own food, let alone ours; in other
words, photosynthesis cannot take place. The ancients understood this fact quite well and the
Maurya rulers in 400 BC constructed the Sudarshan Lake in South Gujarat to ensure adequate
and sustained irrigation, ironically something the modern day farmer has laid down his life for

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especially in the Vidarbha district of Maharashtra. India became the cornucopia of exotic
produce, from spices to dyes and fabrics. India attracted merchants of the Silk route and even the
East India Company that established the British Raj.
Let us now leave the leather bound realm of antiquity and enter the modern section filled with the
fruits of capitalism and other bourgeoisie delights. The 19th century brought with it the
agricultural power revolution as farm implements became mechanized and farming became
commercially viable once again, perhaps a precursor of times to come.
20th century India was being ravaged by famine and struggling towards self-sufficiency in food
grain. The green revolution of the 1960s and 70s revolutionized Indian agriculture introducing
HYV seeds, fertilizers and pesticides. Though still controversial it is hard to ignore the huge
increase in yields it brought, especially in the case of the staples; rice and wheat. Today we see
about 1/3 of the entire labour force employed in agriculture or related activities, but the share of
agriculture in the GDP is only about 14%. To a student of economics or even to someone with a
sound sense of logic something does not add up. An ancient agrarian power house is left panting
for breath in the wake of modern growth and development. Sectors like manufacturing and
tertiary are riding high. With outsourcing the worlds new leitmotif, India is cashing in (or was).
The slew of problems plaguing agriculture; disguised unemployment, marginalized farmers, poor
credit facilities have led to a weak agrarian sector. Is it time for a change? And is that change
Corporate farming?
If we get down to the bones of it corporate farming involves the marriage of capitalistic
corporations to the bounty of arable land, to form the modern food industry. Producers and
buyers enter into forward contracts eliminating middlemen, the risk of transport and a harassing
number of other go between points from field and factory. The purchaser, in this case the
company enters into an agreement or contract with a farmer who promises to provide a certain
quantity and quality of produce at given date at a predetermined price hence hedging himself
against risk. The corporation in turn gets an assured amount of raw material or goods that it can
bank upon for quality (not usually so at mandis) and can hence establish the demand and supply
of its final product. The conglomerate, according to the specifications of the contract, would
provide inputs, managerial advice, even land and labour.
Contract farming and corporate farming share the same last name and are thick as thieves;
distinguishing one from the other would take the skills of an economic micro scope. This is not to
say that they are identical, but to understand the efficacy of corporate farming it would be easier
to open the novella of one such companyGodrej Agrovat Ltd.
Godrej Agrovat Ltd. is an agribusiness company involved in not only procuring and distributing
animal feed, palm oil, agri-inputs and poultry but also looks to sustainably increase crop and
livestock yield. 2011-12 saw sales of Rs 2439 crore. The oil palm plantation spans a whopping 7

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states, including Maharashtra, Goa and Andhra Pradesh and has 44900 hectares of small
holdings under cultivation. If viewed from a macro-economic perspective we might actually be
reducing our reliance on imported palm oil and build the way for domestic production and, in the
long run, perhaps even reduce the current account deficit by a shade.
With a niche market in agrochemicals and renowned brands like Real Good Chicken and
Yummiez embodying their poultry venture one can see that Capitalism sure can do wonders at
Old McDonalds Farm, but will it work for India?
Perhaps we have to move onto another genre of the human story to find out.

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