Narrow your focus

al ries 2Al Ries
A rising tide lifts all boats. But a falling tide does the most damage to those boats that are poorly anchored.
In high-growth times, when things are going well, management ignores the marketing function. Why get involved when everything is upbeat?
When things are going bad, the first thing management does is to get involved in marketing activities. If sales are turning down, no CEO is going to ignore marketing.
This is the worst time for management to be involved in marketing. They don’t have the knowledge and experience to figure out what needs to be done.
In fact, their instincts are wrong. They know they need to increase sales in order to survive, so their first thought is to expand the brand.
That’s exactly the wrong approach. A downturn exposes the weakness of also-ran brands. In order to survive in a down economy, a company should narrow its focus in order to strengthen its brand, which ultimately can increase sales.
Great Wall Motor is a good example of this principle. In the year 2009, the company marketed trucks, passenger cars, minivans and SUVs, using nine different model names.
Then the company decided to focus their resources on a single model, Haval, using the strategy, “The most-economical SUV under 100,000 RMB.” (Roughly $13,000 at the time.)
Last year, Great Wall Motor sold more vehicles than any other Chinese automobile company. Furthermore, they made more net profits than the next four Chinese automobile companies combined.
The question is why does this happen? If you’re the CEO of a major corporation, chances are good you are a left brainer. Before you make a decision, you want to be supported by facts, figures, market data, consumer research. If you’ve a job in marketing, chances are good you are a right brainer. You often make decisions by “gut instinct” with little or no supporting evidence. It couldn’t be otherwise in a creative discipline like marketing.
A logical, analytical left-brainer generally won’t take a right-brainer seriously whether the economy is up or down. In China, for example, consumers saw passenger cars as “prestige” vehicles and trucks and SUVs as working vehicles for the lower class.
So if you are a logical thinker, you would want to focus on passenger cars. But a right-brainer is a holistic thinker. He or she sees the big picture. And the big picture in China back in 2009 was that every other automobile manufacturer was going to focus most of their resources on passenger cars. That’s why the better strategy for Great Wall was to do the opposite, focus on SUVs.
At the same time, low-growth times can actually benefit market leaders because it makes them relatively stronger than their weak competitors. Take the automobile industry in America. The recession of 2006 to 2008 bankrupted General Motors and severely damaged Ford. But it improved the position of imported brands like Toyota, Mercedes-Benz and BMW.
What should weaker competitors like General Motors have done? As a general principle, they should have narrowed the focus of their brands. General Motors’ leading brand, Chevrolet, has 18 different models. What’s a Chevrolet? It’s a large, small, cheap, expensive car or truck. That’s a weak position that can cause serious problems in low-growth times.
On the other hand, Toyota is the No.1 car brand in America. Mercedes-Benz is the “prestige” leader and BMW is the “driving” leader. They all did well in the downturn.
A weak brand may continue to exist in a rising economy. But not when the economy turns down. So marketing managers who manage a weak “also-ran” brand should “narrow the focus” of their brands in order to strengthen their positions.
As a starter, for example, Chevrolet should have divested itself of its truck business and concentrated on cars, preferably entry-level cars. General Motors has a truck brand called GMC that sells trucks only. That brand could be strengthened by the addition of the Chevrolet truck models as well as the Chevrolet model name for trucks, Silverado.
Look at the automobile market in Russia. Lada, the market leader, sells just six models yet has a market share of 17 percent. Chevrolet on the other hand markets 11 different models, but its market share is just 7 percent. Chevrolet’s leading model is Niva, an SUV made in Russia that has generated a lot of favorable interest. The model is often on back-order, with waits of two or three months.
If I were running Chevrolet in Russia, I would focus all my resources behind the Niva model, much like Volkswagen did with its Beetle model in the United States.
You are going to see the same things happen in smartphones. The rich will get richer (Samsung and Apple) and the poor will get poorer (BlackBerry, Motorola, Nokia and others) unless they do something dramatic like narrowing their focus to strengthen their brands.
Companies are like plants. Overtime, plants expand in every direction so a good gardener trims them back from time to time. Companies need to do the same. Keep cutting back on products and markets that are not performing well. Narrow the focus to both strengthen the core brands and increase their market share.
Look at the smartphone category. Apple basically markets one new model to replace an existing mode which is then discontinued. Yet the last time I checked, its competitor, BlackBerry, markets 15 different models. Which company is more successful?
But narrowing focus is easier said than done. Listen. Most CEOs we have dealt with take the position that they know what marketing strategies are best for their companies. They don’t want marketing managers to tell them what to do. They want marketing managers who will execute their strategies.
That’s why they seldom take the time to ask marketing managers for their advice and counsel. Most times, marketing managers have to force their way into boardrooms in order to present their ideas. I’ve been in those meetings. And it’s obvious that the chief executive and his or her staff has already made their minds up on what strategic directions to take. They just attend the meetings to placate marketing managers who often wind up frustrated.
Also, during low growth times, companies end up with metric madness. If you run a company by the numbers, you’ll eventually run the company into the ground. You might be successful in the short term, but never in the long term, as the financial crisis demonstrates.
The banking industry is a good example of an industry run by the numbers. And yet the banking industry was the one industry that did the worst in the recent recession. Left-brain managers are verbal, logical and analytical. Nothing wrong with that, as long as management also takes the remedy to counteract its overemphasis on mathematics.
Almost everything about marketing is the opposite of the typical manager’s approach to running a business. Marketing is illogical and definitely not analytical. Marketing is intuitive and holistic. We’re concerned, however, that this message is being ignored by the marketing community which seems to be drifting from right to left. From a right-brain approach to a left-brain approach. The hot topic among marketing managers today is ROI, return on investment.
Another mistake that some companies make during recessions or low-growth environment is that they introduce cheaper versions of their existing brands. Packard was the leading luxury car brand in America for many years. But during the depression in the 1930s, Packard started selling relatively inexpensive vehicles. Its major competitor, Cadillac, kept it prices relatively high, although selling far fewer vehicles than Packard. As a result, Packard is long gone and Cadillac is still alive.
I don’t know enough about Indian corporations to make specific suggestions, but as a general rule, if a company is losing market share or losing money, it needs to change its marketing strategy.
That runs counter to the normal thinking which is (1) The strategy is right, but (2) It’s the execution that is wrong. So chief executives tend to react to trouble by firing lower-level managers in charge of executing corporate strategy.
Then too, if a company changes its corporate strategy, it can reflect unfavourably on the chief executive. From an ego point of view, that’s a strong reason to focus on execution rather than strategy.
Also, there are few other things remembering. Does it make sense to launch new products in a low growth environment? Yes and no. Yes, it’s a good time to launch new markets for a market leader. Its competitors are weakened and are less likely to have a good response.
No. It’s a bad time to launch new products for a company that’s not a market leader. That drains resources from the company’s core business. Also, its worth remembering while launching new products that advertising today doesn’t have the credibility to launch new products. Only PR has that credibility. Regardless of the environment, companies should start with PR and then switch to advertising after the new product or brand has achieved some recognition among consumers. Our philosophy is: PR first, advertising second.
To conclude, the one message that marketers need to remember in times of low growth is to narrow your focus.

 (Al Ries is a marketing consultant who coined the term “positioning” and is the author of such marketing classics (along with Jack Trout) as The 22 Immutable Laws of Marketing and Positioning: The Battle for Your Mind. He is also the co-founder and chairman of the Atlanta-based consulting firm Ries & Ries with his partner and daughter Laura Ries. Along with Laura he has written bestsellers like War in the Boardroom and The Origin of Branding)
The article originally appeared in Business Today in the edition dated January 19, 2014
(As told to Vivek Kaul) 

Chidambaram has got a Rs 2,22,000 cr problem


The finance minister P Chidambaram has got a Rs 2,22,000 crore problem.
And he needs to tackle it before the current financial year ends on March 31, 2014.
In fact, the truth be told, by now he should have already started battling it, that is, if he hopes to successfully tackle it, as he has claimed on numerous previous occasions. 
The Controller General of Accounts, a part of the finance ministry, declares fiscal deficit data every month. Fiscal deficit is the difference between what a government earns and what it spends. 
Between April and November 2013, the first eight months of the financial year, the fiscal deficit stood at Rs 5,09,557 crore. This works out to be at 93.9% of the annual target. The fiscal deficit target set at the beginning of the year was Rs 5,42,499 crore. 
If this target has to be met then the government cannot run a fiscal deficit of greater than Rs 32,942 crore( Rs 5,42, 499 crore minus Rs 5,09,557 crore) between December 2013 and March 31, 2014. This means the government can run an average fiscal deficit of around Rs 8,235 crore per month (Rs 32,942 crore/4) during that period.
And this is where the problem starts. Between April and November 2013, the government ran a fiscal deficit of Rs 5,09,557 crore or around Rs 63,695 crore (Rs 5,09,557 crore/8) on an average per month. If the fiscal deficit target has to be met the fiscal deficit of Rs 63,695 crore per month needs to be brought down to Rs 8,235 crore per month. 
This implies a gap of Rs 55,460 crore per month or Rs 2,21,840 crore (Rs 55,640 crore x 4) over a period of four months. And this is what I called Chidambaram’s Rs 2,22,000 crore. 
To put things in perspective the average fiscal deficit of Rs 63,695 crore that the government has run in the first eight months of the year is 7.7 times the fiscal deficit of Rs 8,235 crore that it needs to run over the period of December 2013 to March 2014, in order to meet the target. 
Chidambaram has asserted time and again that the fiscal deficit target is a ‘red line’ that will not be crossed. So how will he ensure that the government does not cross the red line? One way is to hope and pray that the government earns what it had targeted at the beginning of the year. 
The receipts(or what the government hopes to earn) targeted for the year are Rs 11,22,799 crore. Of this only Rs 5,11,638 crore has been earned during the first eight months of the year. Hence, the government hopes to earn Rs 6,11,161 crore between December 2013 and March 2014. 
The government earnings tend to be back-ended, that is, a lot of money comes into its coffers during the last few months of the year. But even after taking that factor into account the situation doesn’t look good.
Tax collections form nearly four fifths of the government’s earnings. And things clearly look slow on this front. During the period April to November 2013, the government has managed to collect around 44.8% of its annual target. During the same period last year the number was at 47.9% of the annual tax target.
The average tax collected for the first eight months of the financial year between 1997-1998 and 2012-2013, the data for which is available online, was at 48.92% of the annual target. This clearly tells us that the tax collections have been slow this year. 
Also, the only year since 1997-98, when the tax collections during the first eight months have been lower than the current year was 2001-2002. During that year, the number had stood at 40.8% of the annual target. 
A sluggish economy is the best explanation for lower than usual tax collections. In fact, a
 report in The Economic Times suggests that “indirect tax estimates may have to be revised downwards by at least Rs 30,000-35,000 crore from the budget estimate of Rs 5.65 lakh crore.” Given this, the government is most likely to miss its tax collection target. 
Hence, the only way the government can hope to meet its fiscal deficit target is by cutting expenditure. One way of doing this is by delaying payments. News reports suggest that around Rs 85,000 crore that needed to be paid to oil marketing companies and fertilizer companies to compensate them for oil and fertilizer subsidies, will be postponed to next year. 
The government also seems to be delaying tax refunds. “Exporters are unlikely to get any more duty refunds for the rest of the year as field officials look to maximise revenues in the remaining three months of FY14,” The Economic Times report referred to earlier points out. 
Another report published in The Economic Times points out “The government’s zealousness in squeezing expenditure to meet the fiscal deficit target, either by delaying payments or not awarding new contracts, may be hurting those most vulnerable to such tightening — small and micro enterprises, self-employed professionals and the retail trade.” 
Further, the government expenditure is categorised into two kinds—planned and non planned. On the expenditure side, the cut is more likely to be on the planned expenditure side than non -planned expenditure.
Planned expenditure is essentially money that goes towards creation of productive assets through schemes and programmes sponsored by the central government. Non-plan expenditure is an outcome of planned expenditure. For example, the government constructs a highway using money categorised as a planned expenditure. But the money that goes towards the maintenance of that highway is non-planned expenditure. Interest payments on debt, pensions, salaries, subsidies and maintenance expenditure are all non-plan expenditure.
As is obvious a lot of non-plan expenditure is largely regular expenditure that cannot be done away with. The government can at best delay paying subsidies. 
Hence, when expenditure needs to be cut, it is the asset creating planned expenditure which typically faces the axe and that is not good for the overall economy. If one looks at the numbers that is the direction they point towards. Between April and November 2013, the non planned expenditure of the government stood at Rs 7,30,203 crore or 65.8% of the annual target. 
Common sense tells us that if the expenditure is spread across evenly all through the year, in eight months the government would have spent around two thirds (or around 67%) of the target. And this is what it has done. This is not surprising given that non-plan expenditure is largely regular expenditure. 
As far as planned expenditure goes, during the first eight months of the financial year only Rs 2,90,992 crore or 52.4% of the annual target of Rs 5,55,322 crore, has been s
pent. This means for the period December 2013 to March 2014, Rs 2,64,330 crore of planned expenditure still needs to be made. And this is where the expenditure cuts will come in, if the government wants to meet its fiscal deficit target.
Planned expenditure is of the asset creating variety and is good for economic growth. When planned expenditure is cut, it hurts economic growth. But the choice is between the devil and deep sea. If the fiscal deficit target is breached, then international rating agencies will downgrade India to junk status. And that will create its own share of problems.

The article originally appeared on on January 4, 2014

(Vivek Kaul is a writer. He tweets @kaul_vivek) 

Global real estate bubble is back with a bang

bubbleVivek Kaul 
One of the major reasons for the current financial crisis were the multiple real estate bubbles which popped up in large parts of the world. These bubbles burst more or less at the same time. This had huge repercussions and the world is still battling with them.
But more than five years after the crisis started, the global real estate bubble is back with a bang.
In the United States, the 20 City S&P/ Case- Shiller Home Price Index, the leading measure of U.S. home prices,
 rose by 13.6% in October 2013, in comparison to a year earlier. This means that real estate prices in October 2013 had risen by 13.6% in comparison to the same period last year.
This is the highest gain in prices since February 2006, when prices had risen by 13.9% in comparison to the year earlier. Real estate prices in the United States, as measured by the 20 City S&P/Case- Shiller Home Price Index had peaked in April 2006.
Prices in London have also been going up at a very high rate. As Albert Edwards of Societe Generale writes in a recent note titled 
Here we go again…and once again no-one is listening “London house prices just rose 10% – in one month… We are in the midst of the mother of all housing bubbles, and although the rest of the country has yet to follow, it inevitably will do so – it always does.”
Similar housing bubbles are being seen in large parts of the world. As economist 
Nouriel Roubini wrote in a recent column “Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.”
This is something that even Edwards of Societe Generale agrees with. As he writes in a recent note titled 
If UK Chancellor George Osborne is a moron, Fitch’s Charlene Chu is a heroine “To be sure the UK is nowhere near the most expensive, with some of the usual suspects such as Canada, Australia and New Zealand even worse.”
So what explains such fast rise in real estate prices all over the world? Most of the western world is going through a phase of very low economic growth. Given this incomes haven’t been rising. In fact, they have been falling. 
As Gary Dorsch, editor of Global Money Trends newsletterpoints out in his latest newsletter “For Middle America, real disposable income has declined. The Median household income fell to $51,404 in Feb ‘13, or -5.6% lower than in June ‘09, the month the recovery technically began. The average income of the poorest 20% of households fell -8% to levels last seen in the Reagan era.”
A similar case seems to be playing out in Great Britain as well, wherein anyone looking to buy his first house has to shell out nearly half his income as an EMI. As Edwards writes “The Nationwide Building Society data shows that the average first time buyer in London is paying over 50% of their take home pay in mortgage payments – and that is when interest rates are close to zero.”
Given this, it is only fair to say that there is a housing bubble on. And the only possible explanation for it is the easy money policy run by governments and central banks all over the Western world to revive economic growth. A lot of money has been printed in recent years to ensure that interest rates continue to remain at low levels. As Edwards puts it “The London housing bubble is no longer driven by Asian or eurozone buyers looking for safe havens. This bubble, like the one in the mid-noughties, is about excessively loose monetary policy and light touch regulation.”
What is true about London is true about other parts of the Western world as well. Of course, the usual explanations defending the rapid rise in real estate prices are being made as well. The top reason on this list is that there is only so much land going around, and, hence, real estate prices can only go up. Then there are the usual reasons of population pressures and economic growth pushing real estate prices upwards.
It needs to be pointed out here is that land is really not an issue in countries like United States and Australia. And this reflects in the numbers as well. As Alan S. Blinder writes in 
After the Music Stopped “The historical comparison reveals a stunning—and virtually unknown—fact: On balance, the relative prices of houses in America barely changed over more than a century! To be precise, the average annual relative price increase from 1890 to 1997 was just 0.09 percent.”
This is something that George A. Akerlof and Robert J. Shiller also point out in 
Animal Spirits. As they write “Moreover, real home prices in the United States rose only by 24% from 1900 to 2000, or 0.2% per year. Apparently land hasn’t been the constraint on home construction. So home prices have had negligible real appreciation from the source.” Real home prices are prices which have been adjusted for inflation.
In Europe, land is limited, but the population growth rate is limited as well. In 2013, it is estimated that the population in the European Union went up by 0.21%. Also, real estate prices do fall in places where land is limited. Take the case of Japan. As Akerlof and Shiller point out“Urban land prices have recently fallen in Japan (where land is every bit as scarce as it is in other countries). In fact they fell 68% in real terms in major Japanese cities from 1991 to 2006.”
The other justification being made is that real estate prices are still way below the peaks they achieved during the 2006-2008 period. The 
20 City S&P/ Case- Shiller Home Price Index is still 20.7% below the high it achieved in April 2006. Edwards has an explanation for this. As he writes “To those who say this is not a bubble because transactions or mortgage volumes are some long way off their 2007 peak, I say this is a classic case of anchoring. It’s exactly like 2007 when equity strategists compared equity valuations with the height of the 2000 bubble and concluded equities were cheap. Just because housing transactions and the volume of mortgage loans are below their peaks doesn’t mean we can’t be in the midst of another unsustainable house price bubble.”
To conclude, let me say that just because there is a global real estate bubble on, doesn’t mean that it will burst any time soon. As Roubini puts it “The global economy’s new housing bubbles may not be about to burst just yet, because the forces feeding them – especially easy money and the need to hedge against inflation – are still fully operative.”
The article originally appeared on on January 3, 2014
(Vivek Kaul is a writer. He tweets @kaul_vivek)

In 2013, the UPA govt spent twice of what it earned

indian rupeesVivek Kaul

At the end of every month, the Controller General of Accounts (CGA), a part of the finance ministry puts out the fiscal deficit data. Fiscal deficit is the difference between what a government earns and what it spends. 
The latest data put out by CGA on December 31, 2013, throws up some very interesting numbers. For the period April to November 2013, the government of India earned Rs 5,11,638 crore. During the same period it spent Rs 10,21,195 crore. This meant that it ran a fiscal deficit of Rs 5,09,557 crore. 
Thus, the fiscal deficit for the first eight months of the financial year 2013-2014 (i.e. the period between April 1, 2013 and March 31, 2014) was nearly 99.6% (Rs 5,09,557 crore expressed as a % of Rs 5,11, 638 crore) of the total income of the government. In simple English, what this means is that the Congress led UPA government spent twice of what it earned, during the period.
As Franklin Roosevelt, the President of America between 1933 and 1945, put it, “Any government, like any family, can, for a year, spend a little more than it earns. But you know and I know that a continuation of that habit means the poorhouse.”
Of course, the Congress led UPA government clearly does not think so. The fiscal deficit target set at the beginning of the financial year was Rs 5,42,999 crore. During the period April to November 2013, the fiscal deficit, as mentioned earlier stood at Rs 5,09,557 crore. This works out to be at 93.9% of the annual target.
The average fiscal deficit for the first eight months of the financial year between 1997-1998 and 2012-2013, the data for which is available online, was at 72.37% of the annual target. This clearly tells us that the fiscal deficit number this year is an anomaly. It is much higher than it usually is. The fiscal deficit for the first eight months of 2012-2013 had stood at 80.4% of the annual target. The only year since 1997-98, when the fiscal deficit during the first eight months has been higher than the current year was 2008-2009. During that year, the number had stood at 132.4% of the annual target. 
As we know 2008-2009 (or the period between April 1, 2008 and March 31, 2009) was the financial year before the Lok Sabha elections which happened during April-May 2009. The Congress led UPA government had gone a spending spree in order to woo the voters. This had reflected in the fiscal deficit, which came in at Rs 3,36,992 crore. This was much higher than the target of Rs 1,33,287 crore.
The finance minister P Chidambaram has said time and again that that the government won’t cross the red line on the fiscal deficit. “There can be no compromise … on the decision to walk on the path of fiscal prudence and contain the fiscal deficit,” 
the finance minister had said on December 11, 2013.
The latest set of numbers make it clear that Chidambaram will have a tough time ensuring that the government does not cross the red line. 
What is interesting is that the between April and November 2013, the government spent Rs 10,21,195 crore. The annual target on the expenditure front is Rs 16,65,297 crore. Given this, the government plans to spend Rs 6,44,102 crore in the period of December 2013 and March 31, 2014. The question is where is this money going to come from?
Things look to be slow on the tax collection front. During the period April to November 2013, the government has managed to collect around 44.8% of its annual target. During the same period last year the number was at 47.9% of the annual target. 
The average tax collected for the first eight months of the financial year between 1997-1998 and 2012-2013, the data for which is available online, was at 48.92% of the annual target. This clearly tells us that the tax collections have been slow this year. Also, the only year since 1997-98, when the tax collections during the first eight months have been lower than the current year was 2001-2002. During that year, the number had stood at 40.8% of the annual target. 
Given these reasons, the only way the government can hope to meet its fiscal deficit target is by essentially postponing the recognition of expenditure. What this means is that even though the expenditure will be incurred it will not be accounted for during this financial year. As a recent 
report in The Economic Times points out “The Centre is…not likely to pay any fertiliser and oil subsidy remaining for this year, amounting to nearly Rs 85,000 crore, which would also then get pushed to next fiscal.” This will be a huge headache for the next government.
Over and above this, the government is likely to go slow on tax refunds. “Going slow on refunds will help inflate collections,” The Economic Times report quoted earlier points out. 
Before the 2008-2009 Lok Sabha election, the Congress led UPA government went on a spending spree. This led to the fiscal deficit more than doubling from a target of around 2.5% of GDP to an actual of 6% of the GDP. 
The temptation might be to repeat that exercise before the 2014 Lok Sabha elections. But the government doesn’t have that have the same kind of flexibility that it had in 2008-2009 because the fiscal deficit target is already high at 4.8% of GDP, unless, of course, it chooses to take the country towards economic disaster. 
Funnier things have happened whenever bad politics has triumphed over good economics. 

The article originally appeared on on January 2, 2014

(Vivek Kaul is a writer. He tweets @kaul_vivek)


From the history of money to Gandhi: Best non fiction books of 2013

Vivek Kaul
 It is that time of the year when the media goes on an overdrive making top 10 lists on various things that happened in the year that was. So here is my list for the top 10 books in the non fiction category for this year (The books appear in a random order). Also, let me confess at the very beginning that this list is slightly biased towards books on economics and finance, which is what I love reading the most. 
1) The Undercover Economist Strikes Back – How to Run – or Ruin – an Economy – -Tim Harford (Little, Brown Rs 599)
Tim Harford is my favourite writer when it comes to the non fiction category. His entire focus in anything that he writes is to ensure that the reader understands what he is trying to say. Not many writers make that kind of effort. And that possibly explains why Harford’s books like 
The Undercover EconomistThe Logic of Life and Adapt, have been bestsellers.
In his new book, Harford tries to explain macroeconomics and the financial crisis that is currently on to the lay reader, in very simple English. In fact, Henry Hazzlit’s 
Economics in One Lesson (first published in 1946) remains my favourite book, when it comes to books which explain the dismal science in a language that everybody can understand. Harford’s The Undercover Economist Strikes Back now comes a close second.

2) Calcutta – Two Years in the City – Amit Chaudhuri (Hamish Hamilton, Rs 599)
My favourite Bengali author is Mani Shankar Mukherjee. His translations in English, appear under the name of Sankar. I discovered Sankar’s writing a few years back when someone recommended his book Chowringhee to me. Since then I have read a few other translations that have appeared in English. But I have read close to seven or eight translations of Sankar in Hindi. In fact, whenever I discover a bookstore which has Hindi books, the first thing I tend to ask them is do you have any books of Sankar? Nobody writes about life and its frailties like Sankar does.
Amit Chaudhuri, I feel comes a close second to Sankar, when it comes to writing books set in Calcutta. I have tremendously enjoyed reading his novels over the years. His new book Calcutta -Two Years in a City is about the Calcutta that was, the Kolkata that is and the Kolkata that will be. Given the fact that Chaudhuri hasn’t lived in Calcutta all the time (he spent a large part of his childhood in what was Bombay and since then has lived a lot in Great Britain) and neither has he left it completely, only to come back during Durgo Pujo, the book doesn’t get overtly nostalgic (like a lot of Bengali authors tend to) about the city. So, for example you will find very little of Satyajit Ray and Mother Teresa in the book. But you will find a lot about Bihari labourers who come to the city hoping to make it in life.
Chaudhuri also chronicles the change in Kolkata quite well. Older British buildings being demolished to make way for newer apartments. Oxford Book Store, the city’s most famous book store, now storing fewer books and more of CDs and stationery. The famous city eatery Flurry’s also makes an appearance.
If there was a book that I would want to read on a relaxed rainy afternoon (or a chilly foggy morning) with a cup of tea and a couple of samosas by my side, this would be it. (Another book that I would like to mention here is Amitava Kumar’s A Matter of Rats – A Short Biography of Patna. Having grown up in erstwhile Bihar I loved reading the book. My only complain with the book is that it ended just as I was starting to enjoy it) 

3) Who Owns the Future? – Jaron Lanier (Allen Lane – Rs 850)
This is a fascinating book which raises many questions about the digital revolution that is currently on. One of the major questions that Lanier asks is what makes a few websites like Facebook, Instagram, Google, Twitter etc, so valuable? As he writes “its value comes from the millions of users who contribute to their network without being paid for it. Networks need a great number of people to participate in them to generate significant value. But when they do, only a small number of people get paid. That has the net effect of centralising wealth and limiting overall economic growth.”
Lanier also asks whether we are becoming too dependant by concentrating our digital lives around a few companies. As he writes “Suppose Facebook never gets good enough at snatching the ‘advertising’ business from Google. That’s still a possibility as I write this. In that event, Facebook could go into decline, which would present a global emergency…If Facebook starts to fail commercially, suddenly people all over the world would be at the risk of losing old friends and family ties, or perhaps critical medical histories.”
The same argument stands true for Gmail as well. For most of us it is a repository of a large amount of information, communication and documentation, that we need to keep going back to time and again. In that sense, these websites are becoming more like electric utilities as every day goes by. Who Owns the Future raises some fundamental questions that do not have easy answers. 

4) Gandhi Before India – Ramachandra Guha (Allen Lane, Rs 899)
Mahatma Gandhi’s autobiography – The Story of My Experiments with Truth, was one of the first non fictions books that I happened to read. And as a young adult I found it very boring. Over the years I have been told that the Gujarati original is inherently more interesting and the translation in English, doesn’t quite work as well as the original (Gandhi translated the book himself). Also, the other complain that I had with Gandhi’s autobiography was that it does not get into much detail about his years in South Africa.
Ramachandra Guha’s Gandhi Before India addresses both the issues that I had with the autobiography. Guha’s research is top notch and he establishes in great detail that it was the years that Mohandas Karamchand Gandhi spent in South Africa, was what made him Mahatma Gandhi. Interestingly, Guha also tells us that Rabindranath Tagore was not the first man to call Gandhi a Mahatma. It was his doctor turned jeweller friend Pranjivan Mehta. The book also talks about the sacrifices made by Gandhi’s immediate family to help his struggle in South Africa. His eldest son Harilal regularly went to jail. Even his wife Kasturba went to jail for the cause. His nephews were also a part of his struggle.
This book is a must read for every Indian in order to realise how great Gandhi really was. 

5) Battles Half Won – India’s Improbable Democracy – Ashutosh Varshney (Penguin Viking, Rs 599)
The book’s subtitle tells us what the book is all about. As Varshney puts it “the odds against democracy in India were extremely high”.
Democracy came to West after the industrial revolution which ensured that incomes had reached a substantially high level. In the Indian case, democracy as a form of government was adopted when only around 15-17% of the population was literate and the per capita income was very low. In fact, many countries that emerged from decolonization adopted democracy as a form of government. But of these countries democracy survived only in India, Mauritius, Belize, Jamaica, Papua New Guinea, Solomon Islands and Vanuatu. Each of these countries other than India are very small and have a higher income than that of India.
Also, research shows that democracies that have an economic growth rate of lesser than 5% per year collapse at a higher rate than democracies that have an economic growth rate of higher than 5%. As Varshney puts it “India’s economic growth rate has been higher than 5% per annum since 1980, but in the period 1950-1980, Indian economy grew at only 3.5% per annum.” Given these reasons, it is very surprising that democracy in India has not only survived, but is thriving. The recent success of the Aam Aadmi Party clearly proves that.
To know the reasons behind why democracy has survived in India, Varsheny’s book is an excellent read. 

6) Emergency Retold – Kuldip Nayar (Konark Rs 295)
The only period since independence when India has not been a democracy was the period between June 26, 1975 and March 21, 1977, when the then prime minister Indira Gandhi, got the president Fakhruddin Ali Ahmed to declare a state of emergency.
Veteran journalist Nayar writes about the period in Emergency Retold. The book was first published in 1977 under the name The Judgement. The paper back edition was released this year. Nayar’s book reads like a political thriller. It starts on June 12, 1975, when Justice Jagan Mohan Lal Sinha found Indira Gandhi guilty on the charge of misuse of government machinery for her election campaign in the 1971 Lok Sabha election. Two weeks later Indira Gandhi got the President Ahmed to declare a state of emergency.
Nayar goes into great detail about how this was done. One of the interesting things he points out was that a copy of the censorship rules and details of the machinery required to implement them in Philippines, was provided to Sanjay Gandhi, by a businessman fried of his Kuldip Narang, who in turn had got it from his friends in the American embassy. The book is full of such interesting trivia from those times. In the end, it is also a grim reminder of the cost that India has had to pay for keeping the Nehru-Gandhi dynasty in power for large periods of time since independence. My only complain about the book is that there are just way too many typos.

 7) 40 retakes – Bollywood Classics You May Have Missed – Avijit Ghosh (Tranqubear, Rs 395)
This book is really the joker in the pack. I read it early October on a day I was very bored and finished reading it under four hours. 
40 Retakes is a book on 40 brilliant movies which flopped or did not pass the critics’ test over the years. Given the number of Hindi movies that get made every year, it would have been very difficult to arrive at the list.
I am no expert on the Hindi cinema of the 50s, 60s and 70s, but have watched a fair bit since the 1980s. Some of my favourite movies like Prakash Jha’s 
Hip, Hip, Hurray set in Ranchi and Vidhu Vinod Chopra’s Khamosh set in Pahalgam are a part of the list.
Kabir Kaushik’s 
Sehar and Tigmanshu Dhulia‘s Haasil, probably two of the finest movies set in the badlands of Uttar Pradesh, also make the cut. Ketan Mehta’s terribly underrated Aar ya Paar, a movie which I fell in love with when I first saw it, even though it was a rip off of a James Hadley Chase novel, is also a part of the list. Anurag Kashyap’s Gulal, Shimit Amin’s Rocket Singh and Sudhir Mishra’s Is Raat Ki Subah Nahi make it to the list as well.
A movie which should have been on the list is Kundan Shah’s 
Kabhi Haan Kabhi Naa, which I feel is the best Shah Rukh Khan movie till date. At the risk of getting booed I would like to say that Kabhi Haan Kabhi Naa is Kundan Shah’s finest film. Jaane Bhi Do Yaaro was made on the editing table.
Navdeep Singh‘s Manorma Six Feet Under, should have been a part of the list. It’s a terrific re-working of Roman Polanski’s China Town
8) When the Money Runs Out – The End of Western Affluence – Stephen D King (Yale University Press, Price not mentioned)
Economists who work for financial institutions are expected to be optimistic about things. But doesn’t seem to be the case Stephen D King, who is the Group Chief Economist at HSBC. In When the Money Runs Out, King points out that there is a lot that is wrong with the way the financial systems all over the Western world have evolved. The fundamental point that he makes in the book is that the ability of the developed countries to keep generating a reasonable economic growth has gone down. There are economic and political implications of the same. When the West was growing the governments promised a lot of benefits to its citizens. They are no longer in the situation where they can afford to pay off these benefits.
Most developing countries instead of getting used to the new low growth scenario have responded to it by printing huge amounts of money, in the hope of creating more economic growth. King calls them stimulus junkies. He discusses in great detail why its not so easy to suddenly stop or go slow on money printing, something which the Federal Reserve of United States has been trying to do for a while.
Anyone looking to understand how the current financial crisis will evolve in the years to come, should be reading this book.

Money – The Unauthorised Biography – Felix Martin ( The Bodley Head, Rs 599)
Over the last few years, the history of money has fascinated me a lot and I have read scores of books trying to understand how money actually evolved. But my journey on the history of money ended with this book. It’s a must read for anyone wanting to understand on what money really is?
Mofussil Junction – Indian Encounters 1977-2012 (Penguin Viking, Rs 599)
As they say, save the best for the last. If there was one book that I would have read this year, it would have to be Ian Jack’s 
Mofussil Junction. The book is a fantastic collection of short write-ups and essays on India. In fact, Jack’s prose at times makes you feel that you are reading some classic fiction.
My favourite essay in the collection is Somewhere 
to Call Their Own. The essay deals with Anglo Indians who decided to settle down around 1500 feet up in the Chota Nagpur hills, in this town called McCluskiegunje, near Ranchi. The most interesting character in this essay is an Anglo Indian girl called Kitty Memsahab, who actually sells fruits at the McCluskiegunje railway station to make a living.
As the concluding lines of the essay go “Down at the station I saw Kitty again…Now she was preparing a basket of oranges for the evening train and joking in Hindi with brewers of country liquor. She seemed to have made her peace – perhaps not with India, which is too large and complicated an idea, but at least with that small part of it where she was born.”
Reading about Kitty reactivated an old memory about a story that the India Today magazine had done around her sometime in the late 1980s. I have vague memories of the magazine carrying a photograph taken from inside a train showing a white woman selling bananas. 
This 2013 story that appeared in the Mint suggests that Kitty might still be selling bananas.
I also loved the epilogue of the book tremendously. Here Jack talks about a person called Major that he used to know in what was Calcutta. As the concluding lines of the book go “I got divorced soon after and with no in-laws to visit I didn’t see Kolkata again for nearly twenty years. The Major died – I’m not sure how. Smoking while walking could have been a contributory cause, it being a rule he often ignored. I miss his uncomplicated, upcountry curiosity: why, how, where, when? I miss his mischief. I mourn those figures slithering in the Hooghly’s mud, happy to make fools of themselves, once upon a time.” As I said, fantastic prose.
PS: If I could extend this list, the two books that I would put in are Jagdish Bhagwati and Arvind Panagariya’s 
India’s Tryst With Destiny and Jean Drèze and Amartya Sen‘s An Uncertain Glory: India and its Contradictions. Another book that I would like to add to the list Neil Irwin’s The Alchemists – Inside the Secret World of Central Bankers.
An edited version of this article appeared on on December 27,2013
 (Vivek Kaul is a writer. He tweets @kaul_vivek)