DIAGNOSES
TI CYCLES: NEW PRODUCT
STRATEGY (A)
The January-March 2003 (Vol 28 No
1) issue of Vikalpa had published a
management case titled “TI Cycles:
New Product Strategy (A)” by
Mukund R Dixit and Abhinandan K
Jain. This issue features four respons-
es on the case by Rakesh Basant, Sal-
ma Ahmed and Ashfaque Khan, At-
anu Ghosh, and Manmohan Rahul and
Shalini Rahul.
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
presents analyses of the management case
by academicians and practitioners
CASE ANALYSIS I
ANALYSIS
Rakesh Basant
Professor, Economics Area
Indian Institute of Management,
Ahmedabad
e-mail: rakesh@iimahd.ernet.in
T
here are a few points about the context of TI Cycles that need to be
recognized explicitly. The company is operating in a mature industry
where competition is very high. Product innovations are few and
incremental. A long run product life cycle operates for the two core models
– ‘specials’ and ‘standards.’ While the market has matured for both the mod-
els, the level of maturity is more for the ‘standards’ than for the ‘specials’ and
the market for the latter is growing more rapidly. Incremental product inno-
vations (that are usually quickly imitated) expand the growth phase for the
‘specials’ from time to time. Ability to introduce new variants of existing
models and somewhat different models quickly is critical to retain market
share. Given the maturity of the industry and product life cycles, manufac-
turing costs (prices), the ability to undertake incremental product innova-
tions (design changes), and the speed to market are critical for maintaining
competitiveness. Followers are often able to gain a lead over the first movers
in specific segments. The drivers of demand essentially are the rates of growth
of income and its distribution.
In such a situation, the strategy of TI Cycles, especially the one related
to new product development, needs to be formulated in the context of the
competencies the company has acquired over the years and its access to com-
plementary assets.
PRODUCT DEVELOPMENT COMPETENCIES AT TI CYCLES
AT
The company was set up with a foreign collaboration that involved techno-
logy transfer. Over a period of time, it acquired the capability of usefully
absorbing and adapting the technology acquired from outside. Development
of the capability to absorb foreign technologies was not restricted to TI Cycles
alone but to other group firms as well.
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 While the company did a good job of absorbing for-
eign technologies, it did not focus on R&D activity in any
significant manner to build upon the technologies ac-
quired from outside. As a result, it was not able to keep
pace with technological developments in the developed
countries. Its participation in the exports market and the
associated learning remained restricted to low-end cy-
cles. Moreover, no R&D effort seemed to be taking place
to explore new materials that are increasingly being used
in bicycle manufacturing world-wide. Consequently, the
technology gap between TI Cycles and developed coun-
try firms was so large that the company did not have the
design and manufacturing capabilities to make the mid-
dle-and upper-end bikes for these markets.
An interesting feature of TI Cycles was that product
management, product development, manufacturing, and
purchase departments under the overall guidance of the
General Manager-Marketing and the Vice President
jointly shared the new product design and introduction
activity. Such cross-functional teams are an important
vehicle for developing products that are marketable (as
they are based on consumer preferences and feedback)
and manufacturable at low cost. The product design was,
therefore, in line with attributes preferred by the con-
sumers and in-house delays in ramping up due to
manufacturability-related problems were avoided. The
skills required to fully exploit this process of product
development seemed to be available with the company.
One apparent gap in this process of new product devel-
opment was that the manufacturing segment was not
involved at the product design stage. The interaction
between manufacturing, purchase, and product devel-
opment department began at the prototype development
stage. More interactions at the design stage would prove
useful to enhance manufacturability and improve time
to market.
ACCESS TO COMPLEMENTAR
COMPLEMENTARY ASSETS
ARY
Often, well-designed products do not add to the compet-
itive advantage of the innovating firms because they do
not have access to good complementary assets. These
assets include competitive manufacturing, marketing,
distribution, brands, etc. How was TI Cycles placed in
terms of complementary assets vis-a-vis its main com-
petitors?
In terms of brand, TI Cycles was not disadvantaged
vis-a-vis Hero and Atlas. The critical disadvantage ema-
nates from relatively inferior manufacturing capabilities.
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While the company had gone through an exercise to im-
prove manufacturing-related practices, its cost of manu-
facturing was still higher than its competitors. Conse-
quently, it was not able to compete on price especially in
the standards segment.
One of the reasons for lower manufacturing costs of
its competitors was that they had access to low-cost, de-
centralized manufacturing facilities in North India. Hero,
for example, had about 100 ancillary units dedicated to
its production. These linkages with cycle parts manufac-
turers had been nurtured and developed over the years
and were difficult to replicate. Nonetheless, most of the
cycle parts are now commodities and TI Cycles needs to
actively explore the possibility of utilizing this geographi-
cally bound pool of capabilities based on specialized
decentralized manufacturing. From this pool, they may
need to work closely with some vendors to develop long-
term, mutually rewarding relationships.
There seemed to be some gaps in the company’s dis-
tribution network as well. The dealers were not well
equipped to deal with after-sales service and repairs
particularly for the bikes in the ‘specials’ segment. Un-
fortunately, the dealers had more interest in selling ‘spe-
cial’ category cycles rather than the ‘standard’ category
bikes. It is not entirely clear why the dealers did not
favour the ‘standard’ bike. Apparently, such bikes did
not bring the customer to the stores, while fancy bikes
did.*
The dealers, especially in smaller towns, were not
working exclusively for TI Cycles. Thus, distribution-
related complementary assets in such towns were becom-
ing non-specialized. These dealers were ill-trained to
deal with after-sales service problems. The idea of spe-
cialized distribution assets like “cyclinics” would make
business sense only in larger towns and there too one
cannot have many of them. There is no substitute for
better training for dealers to take care of technical issues
that crop up at the point of sale and after-sales service.
Such training is all the more important because assembly
is done at the dealers’ level and inadequate training can
lead to faulty assembly that would result in more post-
sale problems. Dealers are also the major source of infor-
mation about the problems faced by the customers. Pres-
ently, TI Cycles is not collecting data on such problems on
a regular basis. Such data can be very useful for training
as well as new product and process design.
* The case does not provide information on differences in dealers’ margins
between the two types of bikes.
TI CYCLES: NEW PRODUCT STRATEGY (A)
 The company’s loss of market share in the domestic
market especially in the ‘standards’ segment was prima-
rily due to its inability to compete on prices. However, it
was competitive in a few ‘specials’ categories like SLRs
and MTBs, while its market share was relatively low in
other ‘specials,’ namely the bicycles for kids and juve-
niles. Overall, its market share in the ‘specials’ category
as a whole was the highest among all competitors. This
partly also explained its relatively higher market share in
larger towns where such bicycles are predominantly used.
It is critical to find out if the larger market share in ‘spe-
cials’ is due to better quality or a higher brand image,
assuming that TI Cycles had a cost disadvantage of about
10 per cent in this category. In the same vein, it is impor-
tant to understand the drivers of cost advantage of the
Chinese firms in the international market.
Understanding the source of this competitive advan-
tage is critical for at least two reasons. First, TI Cycles is
only competitive in these segments and understanding
of its determinants may help identify strategies for en-
hancing competitiveness in other segments as well. Sec-
ond, ‘specials’ also happens to be the growth segment
and a better understanding of the sources of competitive-
ness in this segment will facilitate faster growth and bet-
ter market penetration in a growing segment.
An interesting aspect of Hero Cycles’ competitive-
ness is that it is able to manage a relatively high market
share both in ‘standards’ and ‘specials’ segments. Except
for SLRs and MTBs, Hero Cycles is significantly ahead of
TI Cycles in the ‘specials’ category. Besides, the sales
volume of ‘standards’ by Hero Cycles is higher than that
of TI Cycles. This means that while Hero Cycles is able
to simultaneously compete in the ‘specials’ and ‘stand-
ards’ market, TI Cycles is not able to complete simultane-
ously in the two segments. This raises the issue of reap-
ing some synergies of producing the two categories of
bicycles together which TI Cycles is not able to do while
its major competitors (especially Hero Cycles) are able to
do. These synergies may emanate from economies of
scope and scale in purchasing, manufacturing, and dis-
tribution. This issue needs to be analysed to gain more
insights into the sources of competitiveness of the com-
petitors of TI Cycles.
SOME STRATEGIC IMPLICA
STRATEGIC TIONS
IMPLICATIONS
On the basis of the analysis so far, a few elements of short-
term and long-term strategy seem to emerge. While the
short-term measures are focused on improving and con-
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
115
solidating TI Cycles’ position in the existing markets and
product groups, the long-term perspective should be to
expand markets and get into more demanding products.
In the short run, TI Cycles should focus on fine-tun-
ing its product development process and on manufactur-
ing to reduce costs and upgrade its relationships with
dealers and vendors.
The company has done well to avoid the ‘over the
wall’ syndrome in the product development process.
However, it can probably still improve the product de-
velopment cycle, especially by involving manufacturing
department at the product design stage. This will im-
prove time to market. The product development group
should also systematically analyse customers’ complaints
through cross-functional teams. The recurring complaints
should find space in the Saturday meetings. These may
provide useful inputs for product design and even pro-
cess changes.
The company needs to gear up the organization for
price competition but deliver good quality at the same
time. A sharper focus on manufacturing is a must to
achieve this objective. Some efforts in this respect have
already been made but there is a need to do more in this
area. Two initiatives may be useful in this regard. One is
outsourcing, an area the company is already working
upon. The other is to re-evaluate the internal manufac-
turing systems especially from the perspective of reaping
synergies in the production of ‘standards’ and ‘specials’
and different categories of ‘specials.’ Since many vari-
ants of the same bicycles are produced, significant poten-
tial may exist to streamline procurement, production, and
dispatch to reap variety of synergies.
Finally, the company needs to work more closely with
its dealers and vendors. Apart from providing better tech-
nical expertise, the focus should be on building relation-
ship capital with the dealers as well as vendors. Its major
competitor, Hero Cycles, seems to derive a major advan-
tage from such capital. As these relationships mature, the
critical customer data would automatically start flowing
in and help in the product design and manufacturing
process.
In the long run, the company must try to exploit the
synergies between domestic and export markets. This
would necessarily mean production of medium/high
range of bicycles for the developed country markets.
R&D activity will need to be geared up to enhance the
company’s absorptive capacity of new technologies to
penetrate the high-end markets in the West. A cursory
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reading of business articles would suggest that a R&D
focus on new materials may be useful. Significant
upgradation of product development and manufactur-
ing process (suggested above as short-term initiatives)
would also enhance the absorptive capability and help
the company buy, transfer, and adopt better technolo-
gies.
Moving up the value chain in the exports markets
can partly be facilitated by higher exposure to these
markets. The company’s earlier efforts to make that tran-
CASE ANALYSIS II
ANALYSIS
Salma Ahmed
Senior Lecturer
Logistics and Information Systems
Aligarh Muslim University
Aligarh
e-mail: salmaahmed6@rediffmail.com
I
n the year 1951, TI Cycles in collaboration with Her
cules Ltd & Motor Company of UK set up a plant in
Ambattur in the suburb of Chennai to produce and
sell complete bicycles. The company was organized into
functions each with a well-defined responsibility. It also
had a separate R&D Department which catered to the
need of new product development. New product design
was handled by the General Manager – Marketing and
Vice President along with representatives from Product
Management, Product Development, Manufacturing, and
Purchase Departments.
The company undertook the manufacture of stan-
dard items designed by its collaborator and its first ven-
ture was a product named Hercules. Later, with the per-
ceived market shift and/or competition, it moved to pro-
ducing premium cycles. This move was also an attempt
to expand the market. Its sales rose rapidly.
On the other hand, related developments led to a
situation where the company began losing its market
standings:
• Rise of competition (Atlas, Avon, Hero).
• Introduction of low cost scooterette.
• Lower prices of competitors.
• Competition from moped category.
• Lock-outs at its factories.
• Lack of geographic presence.
However, what is significant is that market opportu-
nity exists which is indicative of increasing trends and
which needs to be tapped intelligently in the wake of the
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sition were thwarted among other things by a fluctuating
exchange rate. Therefore, as a short run measure, the
company should also lobby for some depreciation of the
rupee. Such depreciation might increase volumes of ex-
ports for all suppliers and make the industry more vi-
brant. It has been argued that part of the competitive
advantage of China emanates from strategically deval-
ued currency. Of course, the Chinese manufacturers of-
ten pay more attention to manufacturing systems than
their Indian counterparts.
Ashfaque Khan
Manager (S&M)
Kale Consultants Limited
New Delhi
e-mail: Ashfaque_Khan@kaleconsultants.com
changes. The issue to resolve is increasing profits through
increased production and market share. The company
initiated many changes such as change at manufacturing
premises, work culture, spare parts management, etc., yet
it was relegated to the second position. It seemed that
incremental changes were not delivering the desired re-
sults.
KEY ISSUES
An analysis of the situation at TI Cycles reveals a number
of issues and key questions that need to be addressed.
New Product Development
At TI Cycles, a separate R& D Department undertook the
task of product upgradation, development of prototype
as well as the development of the product. Concept test-
ing, prototype testing, and sample testing were under-
taken in stages with different sets of groups. In short, it
had a reasonably sound system in place for new product
development as well as a comprehensive and well-inte-
grated team for development of new products.
Product Category and Target Market
Target
It would be advisable for the company to divide the
market into two tiers:
• Tier I: The basic offering would have the deciding
factors as price, loading capacity, riding ease, and
ease of repair.
• Tier II: The attributes would be acceleration, design,
TI CYCLES: NEW PRODUCT STRATEGY (A)
 styling, and re-sale value.
Though it seemed to have got the categories correctly, it
did not identify the attributes which characterized the tiers.
In the present scenario, two broad categories of pro-
duct are in demand-standardized and customized. Prod-
ucts for the former category would be sturdy, low-priced,
and offered with standard/basic features. Products for
the second category would be offered with various mul-
tiple options and premium-priced. The market could be
segmented into two:
• Office goers, workers, and low income group who
seek value for money.
• Youth, trendy, middle and high income group who
could be classified as the “in-generation.”
Each product category would have its own supply
chain methodology.
Supply Chain Management
Efficient supply chain management is a critical issue
which is found lacking in TI Cycles’ present system of
operation.
Demand Management
Accurate prediction of demand is very critical for the
success of a company. The situation at TI Cycles reveals
that there was excess in-process inventory in the plants.
The company produces two broad categories of cy-
cles: standardized and customized. For standardized
cycles, demand is more or less certain, the features are
common, and the dealers can maintain a certain stock of
the item even in an assembled state. For customized cy-
cles, ascertainment of demand for different product op-
tions is somewhat different. Therefore, the dealers should
maintain such products preferably in CKD condition to
be assembled later on at their level. Alternatively, the
company can develop an efficient communications sys-
tem to enable dealers to communicate orders directly to
the factory which can assemble and deliver the product
to the customer within a short period of time. Though
this would mean increasing reliance on IT, this would
also enhance the accuracy of sales prediction.
For the ‘standard’ cycles, cost is the critical factor in-
fluencing the decision to purchase. Lowering costs
throughout the supply chain–through mass production,
economy in transportation, inventory, and increased
volume would go a long way in ensuring success for the
company. However, for the customized product, respon-
siveness of the supply chain would influence the decision
to purchase.
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
117
Dealer Management
Successful dealer management rests on the number of
dealers, loyalty of dealers, and the length of the channel.
TI Cycles has only a handful of dealers vis-à-vis its clos-
est competitor–Hero Cycles–which has 3,500 dealers. In
such a set up, customer contact would be less thereby
affecting feedback. Further, CRM exercise cannot be
undertaken effectively.
An effective role is played by dealers in enhancing
the image of a company in the minds of the consumer.
This is gravely missing. Dealer loyalty for the company
was not evident or dealers stocked other brands as well.
In addition, dealers also stocked auto-ancillaries and con-
sumer durables.
Dealers are the final point of contact with the cus-
tomers. They are major influencers in the purchase deci-
sion. Therefore, it is necessary to enhance this level of
commitment. There is a definite scope for better bonding
with the dealers in the company framework.
The only positive move by the company is the imple-
mentation of cyclinics which are company-owned and
have definitely increased the customer perception of the
organization.
Manufacturing Management
Hero Cycles outsourced most of its products to ancillary
manufacturers while TI Cycles undertook long produc-
tion runs to produce complete products thereby increas-
ing in-process inventory.
The company shifted from batch process to modular
process design. However, it could adopt flexible
equipments and machines which would support multiple
parts being produced using the same set of equipments
amounting to a reduction in cost. However, it still resorted
to the old system of complete production run bringing
inefficiency in the system. It should, therefore, adopt
ancillarization as a strategy to gain country-wide pres-
ence.
Level of Integration
New product development starts with the generation of
an idea. An idea may come up from almost anywhere—
customer, vendor, employee or even competitor. Most
organizations have a formal system in place to generate
and evaluate a product idea. Therefore, it is imperative
for a company to integrate every entity in the supply
chain. However, all product ideas are subject to screen-
ing and evaluation. TI Cycles also undertakes concept
development and testing. This is a positive move made
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by the company.
In a multi-product organization, activities should be
more process-based than function-based. TI Cycles crea-
ted functional silos where responsibility was well defined
and distinct.
The company should not only move towards func-
tional integration or internal integration (integrate market-
ing, sourcing, product development, quality, etc.) but
should also promote external integration, i.e., integrating
with dealers and customers too. An integrated approach
would be a better fit for such an organization where
change is the order of the day and a new product idea at
any point in the supply chain can be very conveniently
tapped. TI Cycles should form a network of relationship
communicating, interacting, and making integrated de-
cisions.
Expanding Market Share
TI Cycles could adopt the following strategies for increas-
ing market share:
• Shift fr om standardized to customized pr
from oducts:
products:
Though the company has a ‘delayed logistics’ in place
(i.e. CKDs at the dealers’ end), the same could be
extended to designs, colours, accessories (more at
the urban centres than rural). This would not only
reduce the supply chain costs but in the process
would lead to an increase in the sales of accessories.
• Incr easing sales in rural ar
Increasing eas: The company’s larg-
areas
est market is South India. Given the economic devel-
opment (i.e. higher growth rates) in the southern
states, people are more likely to buy mopeds/mo-
torcycles, scooters, etc. Hence, demand for cycles
would come from the hinterland and from North and
East India. Even its initial thrust to the rural areas
CASE ANALYSIS III
ANALYSIS
Atanu Ghosh
Associate Professor
Shailesh J Mehta School of Management
Indian Institute of Technology
Mumbai
e-mail: atanu@iitb.ac.in
T
I Cycles was facing problems of stagnant sales
in 1996-97, driven by falling export volume, shift
in consumer preferences, increased competition
in bicycle market, and relatively weak distribution net-
work in the domestic market.
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would be through the ‘standards’ category but giv-
en the rise of disposable income in the rural sector as
well, ‘specials’ would also co-exist.
• Incr easing sales in urban ar
Increasing eas: ‘Sports, health’ are
areas:
the bandwagons to jump on.
• Expanding the tar get gr
target oup: The cycle manufactur-
group:
ers have been focusing on the market in the category
of 5 + years depending on the demographic/ psych-
ographic profiles. Given this, the market could be
extended to ‘toddlers’ and old-age/retirees. Toddlers
around the age of three years could start using the
cycles (with the requisite changes). Similarly, the old
people at the urban centres could be targeted by cit-
ing health reasons. Both the target segments require
a customized product. Similarly, there is a need to
expand the market in countries like Bangladesh,
Nepal, and Bhutan which given the similar demog-
raphy at the rural/semi-urban centres would require
a ‘no-frills’ product similar to the ‘standards’ prod-
uct of TI Cycles.
• Contract manufacturing: Though China has been the
leader in manufacturing cycles, TI Cycles could also
explore the possibility of manufacturing cycles for
the leading cycle manufacturers of the world.
• Financing: Though a cycle costs around Rs 2,000 - Rs
3,000, the company could arrange for loans through
banks or credit societies for the rural sector to give a
boost to its sales.
• Spar e-parts: From the experience of the car manu-
Spare-parts:
facturers, the profit for these companies would be
mostly from spare-parts sales and servicing. Though
TI Cycles has rightly initiated ‘cyclinics,’ there is a
need to expand the network to other products as
well.
The company started in 1951 with a fully integrated
plant for manufacturing of parts to assembly of final
product without any outsourcing of components. Though
it established its name and reputation for high quality,
strong, and durable product, it lost its status of largest
TI CYCLES: NEW PRODUCT STRATEGY (A)
producer of bicycles to Hero Cycles, a competitor from
North India. Hero Cycles built leadership positions pri-
marily on the basis of lower prices which was possible
due to outsourcing of parts from independent manufac-
turers and dedicated units promoted by them. TI Cycles
had a 10 per cent unfavourable cost differential against
other key competitors due to having an integrated plant
and also higher wages.
One of the clear options for TI Cycles was to move
from in-house manufacturing to outsourcing of parts to
cost-effective, independent manufacturers of parts and
retaining quality assurance, final assembly, and painting
at their own plant, particularly, for the price-sensitive
range of ‘standard’ products. This would pose a clash
with family values of exhibiting human consideration in
treating people in managing its business, unless the loss
of jobs could be protected by increase in sales volume of
‘specials’ category of premium-priced products that could
absorb in-house cost structure. This would have still been
a minor drifting from values than to cause disaster for the
whole organization and its employees.
The availability of designs and drawings from its
collaborator Hercules Cycles & Motors, UK, probably
resulted in lack of own efforts in designing and innovat-
ing new products. It introduced “specials” category with
products of sleek, wire break, multiple colour options at
premium prices in 1969 as a leader, but became a follower
of the market leader Hero Cycles while introducing “Street
Cat” in the sub-category of MTBs.
With the changed market environment both in do-
mestic and international market, TI Cycles has no option
other than to focus on domestic market in a more planned
manner. It is quite clear from the facts that the decline in
total demand in major EU markets by 6 per cent, total
import to EU by 20 per cent, import from India by 40 per
cent, and falling import share for TI from 57 per cent to 45
per cent was indicative of change in consumer prefer-
ences in EU. Therefore, it was unlikely to improve TI
Cycles’ position by any additional efforts. The other ma-
jor threat to dissuade the company from focusing on in-
ternational market in general was the cost competitive-
ness of the Chinese products (40-60 % cost disadvantage
in some categories like Kids and MTBs).
TI Cycles could possibly identify overseas markets
for ‘standard’ category where the total cost of ownership
of its products could be the lowest compared to Chinese
products due to favourable differential cost of transpor-
tation, logistics, and import duty rate. This was possible
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
119
as its price for such products was only 10 per cent higher
than Chinese products.
The striking change in consumer preference in the
domestic market is reflected in the gradual shift from one
standard model for office goers and workers to many
variants (such as workhorse, sports and racing, luxury)
targeted to different uses and user segments.
With the change in manufacturing system from batch
process silos to five modules, the problems associated
with increase in number of models, in-process inventory,
long manufacturing lead time, inaccurate delivery, and
poor tracibility could be minimized. In order to improve
its performance in these areas, TI Cycles should have
deployed information technology with ERP and SCM to
integrate its information system not only within the or-
ganization but also with its supply chain.
The penetration of bicycle being at a very low level
compared to many other countries at the same level of
economic development, there is scope for market devel-
opment. The growth rate of 26 per cent in 1994-95 and
10.8 per cent in 1995-96 is indicative of potential demand.
The market shareholding by the bicycle manufactur-
ers shows that TI Cycles has lagged behind the competi-
tors in all the regions except in the South. The Northern
and Eastern regions that accounted for 57 per cent of do-
mestic market were not focused adequately and devel-
oped successfully to yield benefits. Similarly, the company
failed to garner decent market shares in rural and small
towns that have close to 70 per cent of market demand.
It is evident that the company’s product mix was not
in synch with the current industry trend. The ‘specials’
category was primarily a product for urban market which
generated only 30-35 per cent of the total demand. There-
fore, concentration on that product to the tune of 50 per
cent of its volume deprived it from generating higher
volume of business in ‘standards’ category from rural
areas and small towns. That could have provided more
cost advantage in an integrated plant of high capacity of
production volume.
With the image created as a producer of high quality
durable product, the company is in a position to launch
mopeds/scooterettes in the domestic market to keep pace
with current trends. It may even be easier for it to find a
technology provider as collaborator and come up with
the products with technical superiority.
If, for paucity of resources, TI Cycles is forced to
sustain its current level of business with more focus on
‘specials’ rather than looking at any growth avenues, it
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still needs to examine its market responsiveness. For prod- market in a more responsive manner, reduce inventory
ucts of ‘specials’ category with large number of variants level of slow/non-moving products, and divert attention
and many user groups, it may be prudent to capture cur- to products in demand. Linking the supplier in the infor-
rent demand pattern through POS data which could be mation network would further improve total responsive-
extremely useful to study the trends, offer products to ness of the network to market requirements.

CASE ANALYSIS IV
ANALYSIS
Manmohan Rahul Shalini Rahul
Assistant Professor Assistant Professor
Institute of Management Studies Institute of Management Studies
Dehradun Dehradun
e-mail: mmarahul152@yahoo.com

T
I Cycles is a typical example of a traditional SHIFT IN PREFERENCE IN DOMESTIC
Indian firm that has taken its share of pie during MARKET
India’s post-Independence economic growth in a The cash cow for TI Cycles remained the ‘standard’ brand
virtually monopolized market and is now unable to keep for long with ‘special’ category adding good support to
a control on its declining market share and profits due to it. With the entry of Hero Cycles, Avon, and Atlas Cycles
many hugely successful entrepreneurial establishments. from the Northern India-based entrepreneurs, the cycle
TI Cycles was started with an honest zeal and dedi- scenario in India changed dramatically, TI Cycles being
cation by the Chettiars family in a suburb of Chennai and the prime sufferer. The introduction of low-cost and load
it became one of the leading and known cycle manufac- bearing capacity cycles being manufactured by Atlas,
turers in India. The company’s growth can be largely Hero Cycles, and Avon caught the attention of the peo-
explained by the dominance of time in 1950s when post- ple. These companies were quick to gauge the gap in the
Independence era opened new opportunities for busi- youth and children segment and were successful in bring-
ness houses in all infrastructural development. The need ing out cycles targeting these segments. TI Cycles some-
gap was large in rural and urban areas and market was how always adopted a second lead and in this process
under-developed. The basic necessities of life were un- lost the crucial timing and market share. The company,
available to 80 per cent of the consumers who formed a therefore, should upgrade its R &D cell and ensure that
part of rural India. The basic mode of transport during the marketing cell also adopts a proactive approach.
that period was primarily a cycle and it still remains the
same even after 55 years of rural development. The gap COMPETITION
as shown in Figure 1 shows that it is largely purchased by Early seventies saw TI Cycles’ ‘Hercules’ brand doing
people in rural areas as compared to urban customers. very well in the market and adding value and credibility
to its total sales. In course of time, however, the compa-
Figure 1: Rural Vs Urban Growth ny’s process of innovation got derailed and this aspect
was not taken up seriously. Other entrepreneurs perceived
rural
urban this gap in domestic market and came up with innova-
tive cycles in a big way capturing the market share of TI
Number of cycles sold

8000 Cycles. The owners of Hero Cycles, based in Ludhiana,

7000
6000
started as a low-cost cycle manufacturer and, within a
5000
4000
short span of time, Ludhiana was turned into one of the
3000
2000
largest producers of cycles and machine parts. Atlas and
1000 Avon also capitalized on this opportunity and outsourced
0
1985- 1986- 1987- 1988- 1989- 1990- 1991- 1992- 1993- 1994- 1995- 1996- nearly all cycle parts from Ludhiana-based manufactur-
86 87 88 89 90 91 92 93 94 95 96 97

year
ers. This created a difference of nearly 10 per cent in cost
which was noticeably big for customers.

120 TI CYCLES: NEW PRODUCT STRATEGY (A)

120
 Late eighties and early nineties were also the period
when 50cc two wheelers were introduced, popularly
known as Mopeds, Scooterette, etc. Hero Mopeds with
the name of Panther and Pacer and Kinetic’s Luna were
very popular in the market and were very successful for
a decade. Hero as a brand got established in the market
and the company’s promotional activities benefited the
company in both the cycle as well as the two-wheeler
sector.
Reaching Domestic Consumer
Though TI Cycle’s representation in towns and cities is
adequate, it needs to evaluate the sales target achieve-
ment. It can also categorize the dealers according to their
performance and find out the reasons for the shortfall in
sales as this will help the company to get aligned with its
sales forecast and production. Due to change in customer
preference, the company is facing a decline in demand
for the ‘standard’ category of cycles. It can undo this by
introducing special credit schemes in this category. This
will help small buyers, especially in rural areas, to get a
cycle at minimal cash as down payment who can then
pay the loan in small installments of Rs 100 per month.
The company may also introduce a scheme to its dealers
to make compulsory purchase of ‘standard’ along with
‘special’ in any pre-specified ratio by the company. The
initial resistance may be high but can be handled if prop-
erly communicated by the sales representatives.
The authorized spare parts sales and service show-
room is an innovative idea and must be pursued in all
important towns of India.
Strategies for Competitive Advantage
TI Cycles is now facing a location disadvantage as com-
pared to Hero Cycles, Avon, and Atlas as these are locat-
ed in North India from where they outsource their cycle
parts. Out of these three, Hero Cycles has gained the max-
imum advantage becoming a low-cost leader in cycle in-
dustry. The other two players, Atlas and Avon, though
having a strong presence, are basically emulators or fol-
lowers of Hero and TI Cycles.
TI Cycles should follow a differentiation strategy on
features that can be perceived as unique by customers. The
A definition is the enclosing a wilderness of idea within a wall
of words.
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
121
company already has a strong base of activities, which if
revamped and strengthened, could be positioned as dis-
tinctive from the competitor. Some of these features are:
• Strong dealer network.
• Number of sales representatives.
• Brand awareness among customers.
• Variety of models introduced in the market.
On the other hand, the company would have to defi-
nitely improve upon communication strategy (advertise-
ments, sales promotion, and publicity) and support with
dealers. The first step that the company could take is to
re-launch the cycle based on a concept. Being the oldest
player in India, it could create a feeling of nationality
among the users of ‘standard’ category and position its
cycle as the ‘cycle of the nation.’ This in a way reflects the
values of the company as well as how it has incorporated
the suggestions and has taken care of customers’ com-
plaint over a period of time.
In case of ‘special’ category, being already the leader,
it needs to sustain this position and has to be quick in
addressing the need for change. Negotiating with deal-
ers to keep the company’s cycles as an exclusive brand
would indeed support the differentiated player image.
To supplement this, it can also open exclusive showrooms
for their products in cities. Regarding exporting cycles,
the company should target South America, Africa, and
East Asian countries for better results.
TIME FOR REALIZATION
REALIZATION
Indian cycle industry is facing a crisis presently with direct
threat from the ever-growing low cost Chinese cycle
manufacturers. By comparison, Chinese products are
smoother in looks and shape and innovative in design.
The price difference can be up to 30 per cent which is very
large as compared to other Indian cycle manufacturers.
Moreover, cycles are considered derogatory by the
youngsters in urban areas and are only owned either by
people of very lower income group or kids.
TI Cycles needs to re-evaluate the current status
dogma of Indian consumers and re-establish the concept
of cycles in consumers’ mind. The primary aim for cycle
companies now is not only sales maximization but also
changing consumer mindset.
Samuel Butler
121
 BOOK REVIEWS
Some books are to be read only in covers reviews of current books on
management
parts... some to be read wholly
with diligence and attention.
Francis Bacon

READINGS IN HUMAN DEVELOPMENT

DEVELOPMENT::
CONCEPTS, MEASURES, AND POLICIES FOR
A DEVELOPMENT P ARADIGM
PARADIGM
Fukuda-Parr
Fukuda-Parr,, Sakiko and Shiva Kumar
Kumar,, A K (eds.)
New Delhi: Oxford University Press, 2003, pp 370, Rs 675

T
his book of readings offers a splendid intellectual fare on the concept,
design, and use of the term ‘human development’ (HD) as it has gained
currency since its adoption by the United Nations Development Pro-
gramme (UNDP) in the late 1980s as a part of its global role and responsibility.
The contributors to the volume have all played major roles in the evolution
of concepts and measurement of HD, examination of the policy implications
of the HD approach, and institutionalization of the Human Development
Reports (HDRs). HDRs are now globally recognized as a crucial aid in meas-
uring, monitoring, and managing socio-economic development.
The rationale for treating human beings as ends for social development
is amply provided in the first section of the book which is devoted to concep-
tual foundations. The contributors to this section include outstanding social
scientists such as Mahbub ul Haq, Amartya Sen, and Paul Streeten who carved
out ideas and approaches in HD and presented their relevance in the contem-
porary global society against the backdrop of prevalent economic theories
and prescriptions. The philosophical foundation of the new approach lies in
the concern for the human being. Human capability has traditionally been
treated as a commodity relevant for production of goods/services that con-
tribute to the values of GDP/GNP as the manifestation of a society’s eco-
nomic standing and development. This view is challenged by the HD-ori-
ented scholars. Social science, they say, stands for enrichment of human life.
Human capability is a resource for pursuit of such enrichment of life in terms
of what a human being values most. Human beings should have freedom and
opportunities to choose a way of life. Poverty implies denial of choice. Those
THEMES
who are denied freedom of choice for their gender, race, etc. deserve special
Human Development attention in development discourse and efforts. Freedom of choice for this
Fiscal Reforms purpose is not confined to economic freedom (access to material resources).
Economic Development It extends to participation in decisions governing one’s situation and free-

VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003 123

123
dom to act as an equal citizen. As a comprehensive devel-
opmental approach, HD embraces economic, social, and
political freedom and rights for the deprived.
This HD approach and its social dynamics are com-
petently and lucidly examined in detail in the nine chap-
ters of the first section. It became the driving force of the
HDR which was launched by UNDP in 1990 and has since
served as signal of relative socio-economic health among
the states across the world. HDRs, in turn, have cumula-
tively led to refinement, modifications, and adaptations
in the conceptual base of the HD approach. The measure
of the state of human development for a state, region or
its subset is computed to yield a Human Development
Index (HDI). The authors have shown how the annual
HDR-HDI exercises have led to progressive realization of
HDI as too simple for its larger purpose. They have
stressed the need to deal with a variety of complex yet
relevant factors such as the social context of an economic
value, current vs. future value of resource-allocation, and
the grounded politics of human rights or poverty reduc-
tion.
The second section of the book is devoted to issues
on measurement of HD and construction of HDI. In the
face of recognition of HD being a product of a large vari-
ety of socio-economic forces, HDI has been primarily
computed as a composite measure of achievement in three
aspects: longevity, education, and income as a sign of
command over resources needed for a decent living. Prob-
lems relating to methodology, data availability and com-
parability, statistical rigour, etc. are addressed at length
by various contributors. The merits of aggregation and
disaggregation of HDI are examined in their statistical as
well as socio-political contexts. Refinements and appli-
cation of measurement are discussed against the back-
drop of progressive experience. Criticisms from various
quarters are examined and answered. There are enlight-
ening and insightful descriptions of attempts to construct
new indices of the sensitive aspects of development such
as poverty, gender inequality, and political freedom. There
is also discussion on how HDI measures can be doctored
at regional or state levels for creating false images or for
political gains. With all its limitations, however, HDI
continues to be an important measure of development
for a social or political entity.
The third section focuses on policy implications of
the HD approach and HDRs at the global level and for the
124
124
various segments of the global society. Chapters consti-
tuting this section are extracted from the major policy
perspectives guiding the various HDRs. While the over-
all picture of HD reveals improvement across states and
regions, the trend is clearly iniquitous with the rich get-
ting the lion’s share of gains in health, education, and
access to basic resources for good living. Persisting gen-
der inequalities everywhere raise issues of how women
and their work are valued in society. The need for dealing
with this problem in the political rather than the eco-
nomic arena is underscored. A similar view is expressed
on problems of poverty and deprivation which should be
treated in terms of disparities in opportunities rather than
incomes. Elimination of poverty needs to be managed
with full participation of the poor. Some well-orchestrated
myths about the role of the poor in environmental degra-
dation are questioned. It is stressed that the poor cause
relatively less damage to environment but bear a larger
amount of blame for it. A culture of caring for the weaker
sections of society at various levels is advocated. A corre-
sponding suggestion is the need for an inclusive democ-
racy for a society to bring the values and efforts in the
kind of social equality, justice, and quality of human ex-
istence that the HD approach stands for.
Overall, the book under review should serve as a
precious handbook of history, state of art, and future
prospects of the HD approach. This approach for now
stands at the intersection of an intellectual dream and
social reality. A gradual movement of the reality towards
the dream is discernible although slidebacks are not un-
common. For a long time, HD is likely to remain an un-
finished agenda of the global society and its components.
This book possesses vital clues necessary to chase the
continuing agenda. It also contains pleasurable sparks of
enlightenment on how knowledge and intellect can com-
bine to drive human beings to strive to make us all more
human. The content of information and argument occa-
sionally overlaps or is reiterative between chapters. That,
however, is part of the culture of a book of readings on a
single theme.
N R Sheth
(Retired) Professor
Personnel and Industrial Relations Area
Indian Institute of Management, Ahmedabad
e-mail: shethsnad1@sancharnet.in
BOOK REVIEWS
INDIA’S FISCAL MA
INDIA’S TTERS
MATTERS
Shome, Parthasarathi
New Delhi: Oxford University Press, 2002, pp 260, Rs 495
I
ndia’s public finances are in a very bad shape. The
combined fiscal deficit of the central and state gov
ernments alone is now 10 per cent of the GDP. This
itself is high but if one integrates the finances of the cen-
tral and state governments with those of the local gov-
ernments and public enterprises to get a measure of In-
dia’s public sector deficit, then the number would be much
higher – about 14 per cent of the GDP. India’s public sec-
tor deficit is a substantially better measure of the current
state of India’s public finances than the combined fiscal
deficit of the central and state governments in the coun-
try.
However, one may argue that deficit is not necessar-
ily a bad thing. It all depends on the resources available
for financing the debt service. Consider, for example, some
numbers that the Finance Minister has put in the Govern-
ment of India’s 2003-04 budget. He has budgeted a debt
service of Rs 2885.99 billion for 2003-04 while the resources
available for financing this add up to only Rs 421.54 bil-
lion (revenue receipts available to finance debt service:
Rs 109.31 billion; recoveries of loans: Rs 180.23 billion;
and privatization receipts: Rs 132.00 billion). This means
that he has budgeted to finance as much as 85.4 per cent
of the Government of India’s debt service through bor-
rowings and other liabilities. This certainly is not a happy
situation; indeed, this reflects the poor quality of eco-
nomic management at the Government of India level.
The rest of the public sector in India is not doing any
better either.
India currently faces a crisis on the public finance
front. Shankar Acharya, in an article entitled “How to
Avert Impending Fiscal Crisis” (The Economic Times, Feb-
ruary 6, 2003) has revealed the real face of this crisis:
“….disappearing rural road networks (no money for
maintenance), hugely under-utilized irrigation systems
(same reason), school teachers without books and black-
boards, health clinics with no medicine, disintegrating
water and sanitation systems, electricity boards playing
musical chairs with massive arrears while supplying lit-
tle power, and so on.” How should India respond to this
crisis? The book addresses this extremely important ques-
tion.
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
125
The author proposes a fiscal reform strategy for In-
dia, comprising both tax and expenditure reform meas-
ures, the objective of which is to substantially reduce the
deficit and develop a public debt policy that does not
imply a high interest burden on India’s public finances.
He warns that as the current public finance crisis can
cause an economic crisis, India’s performance on the
public finance front needs continuous vigilance.
While legislating an appropriate tax structure is ab-
solutely necessary, it is not sufficient to ensure efficiency
in resource allocation, equity in income distribution, and
revenue productivity. What also needs to be ensured is
that tax administration practices reflect the objectives and
intentions of the tax legislation.
The author makes a strong case for tax policy and
administrative reforms to ensure minimization of the so-
called taxpayer-tax official nexus in India. The discretion
available to tax officials under the regime of India’s tax
expenditure provisions (that deliver fiscal benefits
through the tax system) and the tax administration sys-
tem which allows the clustering of several tax adminis-
tration functions under a single officer have created an
environment which has allowed this taxpayer-tax offi-
cial nexus and the associated rent-seeking behaviour to
thrive in India. Tax officials pay huge bribes to arrange
their transfers to locations with relatively large number
of big assessees who can afford to pay bribes running into
large amounts. The Economic Times of May 26, 2003, in an
editorial entitled “Transfer Pricing,” has revealed that
“some corporates also actively encourage and help IRS
(Indian Revenue Service) officials to seek plum postings
at key ports in Mumbai, Kandla, etc. By simply changing
or overlooking the description of goods exported or im-
ported, tens of crores of rupees get saved. This then gets
distributed among the bureaucrats, politicians, and mid-
dlemen.”
Nobody knows the damage that this taxpayer-tax
official nexus has done to the revenue productivity of
India’s tax system. But one can argue that this would add
up to at least four per cent of India’s GDP, roughly Rs one
trillion a year now. Additional revenue receipts of this
order can help India a lot in managing her public finance
125
crisis. This book discusses in detail the tax policy and
administration reform measures that need to be put in
place to minimize the taxpayer-tax official nexus in In-
dia. One hopes that the embarrassment which the recent
shocking cases of corruption in the revenue service have
caused the Government of India will serve as a trigger for
it to act and take appropriate measures to minimize this
nexus.
ECONOMIC DEVELOPMENT IN INDIA:
CHALLENGES AND PERSPECTIVES
Panchamukhi, V R
New Delhi: Bookwell Publications, 2001, p 259, Rs 450
T
he book under review is a collection of seven
thought-provoking and enlightening essays writ
ten in recent years describing and evaluating di-
verse and hitherto untouched aspects of the process of
development in the Indian eco- nomy.
The first essay is titled “Mobilization of Domestic
and External Resources for Development: Lessons from
Indian Experiences.” It is rich in information and rigor-
ous in analysis. It selects five important themes such as
savings and investment, banking and financial system,
government finances, challenges of the external sector,
and the problems of economic stability. Each section in
the essay describes past trends and the present status of
the theme/ issue under discussion, does the diagnosis,
and presents policy suggestions. For instance, while dis-
cussing the dynamics of the various diverse and complex
segments of the Indian financial system, the author un-
derscores the need for vigilant policy-makers and an ef-
ficient surveillance system as increasing financial inte-
gration may increase the inherent instabilities in the In-
dian economy.
Further, the analysis of the trends and the patterns of
savings and investments over the period 1950-51 to 1998-
99 helps draw certain important ‘lessons from the past
experience’ and suitable guidelines for effective policy-
making. While drawing such lessons, the author has com-
pared India’s saving and investment performance with
other developing economies which are known for their
spectacular growth performance. However, the author
could have compared the trends in productivity as well.
It is very important to ensure that Indian economy expe-
riences a declining incremental capital output ratio (ICOR)
and our policy-makers refrain from planning with statis-
126
126
This is an excellent book and I am sure that it will be
an asset for policy-makers, fiscal experts, and students in
India.
Anand P Gupta
Director, Economic Management Institute
New Delhi
e-mail: anand@EconomicManagement.com
tical jugglery. The sooner India gives importance to this
productivity aspect of saving and investment, the better
will be the overall growth and development perform-
ance. The author, of course, avers ‘that it is difficult to do
justice to all the aspects of the subject in a short chapter
like this.’
The second essay on the theme “India Vision 2020”
portrays a visionary profile of emerging India by the year
2020 and beyond. At the outset, the essay scans through
a few illustrative, alternative perceptions about the world,
its nature, and the contours of the human society in the
year 2020. It identifies a few core issues and concerns
while evolving a visionary profile for India and discusses
them ‘in a telegraphic manner.’ The author hopes that the
essay will provoke all concerned to work out a new pack-
age of development policies and strategies for India to
realize the cherished goals and aspirations of the com-
mon man of the country.
The third essay “World Trade Organization and In-
dia: Challenges and Perspectives” brings out the chal-
lenges faced by India in the new trading environment
under the WTO and the policies it should adopt in the
days to come. The author is not very convinced about the
benefits for developing countries in general and India in
particular from the new trading system. According to him,
the new trading system ‘seems to favour the relatively
more powerful actors and leaves the weaker segments of
the world economy to fend for themselves in the emerg-
ing competitive, globalized, market-based world eco-
nomic environment.’ Such skepticism regarding the new
trading system is reflected at other places in the book
when he writes that, ‘A reflective analysis of the provi-
sions of WTO seems to suggest that these have been de-
BOOK REVIEWS
signed to suit the interests of the MNCs from the eco-
nomic power groups.’
The author argues that India should operate from
the position of strength with a professional attitude and
proper preparation in the new trading system under the
WTO. To deal with the challenges and to exploit the op-
portunities arising out of the new trading system, India
needs to have intensive preparation for effective negotia-
tions in the ensuing review meetings on various issues
like agriculture, services, textiles, etc. Our negotiators
should have clarity in perceptions regarding our goals
and development strategies, mapping of strategic options,
identification of bargaining points and negotiation strat-
egies, and effective coordination with like-minded coun-
tries and negotiators.
The fourth essay “Five Recent Paradoxes and Anoma-
lies of Economics” describes a few situations of contra-
dictions that are found in some of the accepted economic
models and theories. This intellectual exercise provides
avenues for inquisitive analysis and intensive quantita-
tive research.
In the fifth essay, “Millennium and Economic Chal-
lenges,” the author presents a brief and sketchy descrip-
tion of the status of India in the socio-cultural and eco-
nomic fields during the last two millennia of the Chris-
tian era. This essay really reflects the author ’s erudition
on indology and Indian classical thoughts and principles
of economics and management. The author rightly ob-
serves that the thoughts and paradigms that have been
perceived and practised in the more powerful economic
societies have mentally and mechanically enslaved us.
Western economic thoughts have given more em-
phasis on the material aspects of life. It emphasizes
maximization of consumption, capital formation, and
profit without recognizing the role played by the ‘values’
in determining the welfare of the economic agents. In-
dian classical theories of development and management,
in contrast, conceive welfare of mankind both in terms of
material prosperity and spiritual discipline. The four goals
of life, namely, Dharma, Artha, Kama, and Moksha provide
an integrated framework for efficient utilization of re-
sources for fulfilling the basic needs for everyone in the
society and for realizing maximum capital formation. The
classical thoughts have given emphasis on managing self
in a value-based framework while the modern manage-
ment science speaks more about managing materials and
the men rather than oneself.
According to the author, ‘restoring values in society’
VIKALPA • VOLUME 28 • NO 3 • JULY - SEPTEMBER 2003
127
is one important dimension of development process that
should no longer be neglected. The author argues that
our shaking and shrinking faith in the classical theories
and principles of economics and management is one of
the causes of decadence in the socio-economic and politi-
cal status of India and also in the world economy. He,
therefore, urges us to use our own classical principles of
development and management as a basis for designing
our developmental strategies for maximizing the welfare
of maximum number of people. The author recognizes
that it is not feasible to improve the welfare of all in one
go or by single policy action. At many places, while sug-
gesting to be cautious vis-a-vis the process of liberaliza-
tion and globalization, the author rightly emphasizes the
need for social safety mechanism to safeguard the inter-
est of the poor and to nullify the adverse effects of the
reform programme and policy on them.
The sixth essay on the topic “Econometric Research
and Public Policy” establishes the fact that the ultimate
goal of all scientific enquiry is ‘facilitating policy-mak-
ing at the government level and decision-making at the
corporate level,’ be it via knowledge enhancement or ex-
planation of a phenomenon or demystification of the un-
known. Giving a brief historical perspective on the topic,
the author raises some pertinent questions in regard to
the contemporary econometric research in India. Accord-
ing to him, the potential of econometric research as an aid
to policy-making has not been fully utilized in India. There
are still many inadequacies in the scope and the content
of econometric research as a tool for policy-making which
call for attention of the professionals and the policy-mak-
ers. Adequately analysing the various issues involved,
the author presents some important practical suggestions
for improving the relevance and usefulness of economet-
ric research for policy-making.
The seventh essay focusing on the theme “Resource
Imbalance, Lifestyle, and Economic Crisis” gives a unique
and new perspective as it recognizes the role of ‘resource
imbalance’ and ‘lifestyle’ as the basic causal factors for
crisis situations. The author presents his thesis in relation
to the East Asian crisis of the 1997 and argues that the
economic crisis was the result of ‘resource imbalances’
caused by wrong ‘lifestyles’ adopted by each economic
entity in the East Asian economies. It is interesting to
note the author ’s observation vis-à-vis lifestyle-and value-
related causes leading to the South East Asian Flu which
were quite different from the causes listed in some of the
recent articles and papers.
127
 In the same essay, the author, taking cue from the
Indian classical thought, provides an interesting ‘model
of resource balance with shifts in lifestyles’ and suggests
that ‘lifestyle’ should enter as an explicit variable in
monitoring and influencing the resource balance situa-
tions. Of course, the ‘model of exchange entitlements’ of
Amartya Sen, explaining the poverty scenarios in the
world, does recognize lifestyle as a variable in welfare
economics.
To conclude, this book is a fountain of new thinking.
At a time when the relevance of the extant theories and
stra- tegies of development is at stake, the book will be a
catalyst in the continuing search for a new paradigm of
development for India, relevant and suitable to its social,
economic, and cultural needs and milieu. It is really rich
and thought-provoking. Specifically, the fifth and the
seventh essays seem to reflect the author ’s many years of
intellectual cultivation and culture. Another interesting
aspect in the author ’s presentation is that while running
the discussion in a positive economics framework, there
is sometimes a sudden but apt and enjoyable shift to a
normative mode without discontinuity in thoughts. The
book will be very useful for researchers, teachers of eco-
nomics and management, professional econometricians,
and policy-makers.
Raman K Agrawalla
Associate Professor, Economics
Apeejay School of Marketing, New Delhi
e-mail: raman_a@rediffmail.com

The world is too much with us; late and soon,

Getting and spending, we lay waste our powers:
Little we see in Nature that is ours;
We have given our hearts away, a sordid boon!
This Sea that bares her bosom to the moon;
The winds that will be howling at all hours,
And are up-gathered now like sleeping flowers;
For this, for everything, we are out of tune;
It moves us not; Great God! I’d rather be
A Pagan suckled in a creed outworn,
So might I, standing on this pleasant lea,
Have glimpses that would make me less forlorn;
Have sight of Proteus rising from the sea,
Or hear old Triton, blow his wreathed horn.
William Wordsworth

128 BOOK REVIEWS

128