Basics explained: How money moves online

Basics explained: How money moves online



Dear Investor,


Internet banking is fairly new to India.


It is catching up with most banks expanding the services they offer for banking on the internet or the mobile phone.

You may have heard of or even transferred funds yourself through the NEFT payment systems. Here are four other cool ways to transfer money or even cash online:

1. Transfer Funds through RTGS system:

RTGS stands for Real Time Gross Settlement. It is quite similar to the NEFT or National Electronic Fund Transfer system. However, the key difference is how long a transaction takes to be completed. As the name suggests, in the RTGS system, transactions are processed and settled continuously in real time. In the NEFT system, payments are deferred. They are processed on an hourly basis when conducted during operable hours. An RTGS transaction will be processed almost immediately between 9.15 am and 4.15 pm on weekdays, and between 9.15 am and 1.45 pm on Saturdays.

The catch is that RTGS payments have higher transaction fees. For example, ICICI Bank charges between Rs 2.5 and Rs 25 excluding the service tax for transferring amounts up to Rs 10 lakh through NEFT. In contrast, it charges Rs 25 for transferring Rs 2-5 lakh and Rs 50 for amounts between Rs 5 and 10 lakh through the RTGS system. The RBI has also stipulated that an RTGS transaction should have a minimum value of Rs 2 lakh. This is not so for NEFT.

2. Transfer Funds through IMPS using Mobile Number and MMID

The key requirement for sending money through RTGS or NEFT payment systems is to add the payee’s details. This often takes an entire day to process. If you do not want to wait, and instead would want to send the money immediately, the Immediate Payment Service (IMPS) is for you. As many as 60 banks offer this service, according to the National Payments Corporation of India.

The IMPS system is available on both the phone and the computer, but is predominantly used by those opting for mobile banking services. The key requirement for an IMPS transaction is not your bank account number, but your mobile number. You will need to register your mobile number and generate your MMID. The Mobile Money Identifier (MMID) is a 7 digit code issued by a participating bank to their customer registered for mobile banking. Every account will have a unique MMID. This ensures its identification and security.

So, to transfer money, both the sender and receiver need to generate their MMID. Then, you can log on to your bank’s internet or mobile banking portal, and click on fund transfer via IMPS. Enter details of the mobile number, the MMID and the transaction amount. Then, punch in your transaction passwords and debit card details to verify the transaction. That’s it. You are now done. The best part? This can be done 24x7 unlike NEFT and RTGS transactions.

Banks may charge a small amount between Rs 2.5 and 15 for such transactions. This is excluding the service tax.

3. Transfer Funds through IMPS using Account Number and IFSC Code

The IMPS system needs both the recipient and sender to register their mobile numbers and generate the MMID. But what if the recipient is not registered or may be has no valid mobile number?

To help such customers, an IMPS transaction can also be conducted using the recipient’s bank account number and IFSC Code. The Indian Financial System Code (IFSC) is a unique code that helps identify which bank the account belongs to and the branch details. Once this is identified, the payment is directly transferred to the bank account. This can also be done 24x7. The bank charges may be the same as an IMPS transfer using mobile number and MMID.

4. Send money through SMS

The above three transfer systems helps credit money into the bank account. What if you want to send money to someone in cash-form? You can now do that through the SMS banking facility offered by many banks.

For such a cash-based transaction, the recipient does not need to have any bank account. All he or she needs is a mobile number. The beneficiary will have to go to an ATM of your bank and withdraw cash using the details received through SMS. There is no need for an ATM card. Simply put, you are giving the recipient a one-time opportunity to withdraw cash from account without using your ATM card. However, you will be specifying the exact amount of withdrawal, thus increasing the security. Once the recipient successfully punches in your mobile number, the two sets of codes given to the sender and the recipient as well as the correct amount, he or she will be able to successfully withdraw cash.





Happy Learning

Half way in the year .....

Dear Investor,

As the year is already half way through, some of you may already be preparing your next New Year's resolutions. You may have your sights set on quitting smoking, getting into better shape, or spending more time with family. Perhaps you want to be more environmentally friendly the next year, finally learn on investing, or take that trip you have always wanted to take.

When setting personal goals for self-improvement, the possibilities are endlessly varied; however, on the forefront of everyone's mind the next year should be your personal wealth, and the quantifiable goals you can set to ensure that you prosper in the upcoming year. I assure you, we will do everything we can to assist you in achieving the financial and educational goals you set.

Whatever you choose to include on your list, my suggestion to you is to expand it. I never cease to be amazed at two things:

The unlimited capabilities of the human soul to achieve the greatness to which it aspires, and how few are those who ever undertake such challenges.
Do not limit what you can accomplish in the upcoming year. Dream big, make goals that others may perceive to be outlandish, and work hard (smart) to achieve them.


And remember this year is still not through .....
To Your Continued Success

Finding Your Magic Formula

Finding Your Magic Formula








Dear Investors,

This is an article form the "INSIDER'S COMMUNITY" of Robert Kiyosaki.

Thought I can share it with you.


People often ask me, "How do you find great investments?" My standard reply is, "You have to train your brain to see them. Great investments are all around you."

I know that's not a very satisfying answer. Most people want something more specific and concrete. But my reply is as accurate as possible. If we could've seen all the great investments just in the past decade, we'd all be multi-billionaires.

Missing Out on Millions

There have never been more opportunities to become rich than in the last 10 years. And there'll be even more opportunities in the next 10. Let me explain. Like many investors, I didn't see the power of eBay almost a decade ago. If I had, I'd be a billionaire today. Nor did I see the power of YouTube, or Google, or MySpace. Being an old guy, my brain isn't trained to see investing opportunities in cyberspace. So I missed them.

Thirty years ago, when my business career was just starting at Xerox, I was introduced to a new type of computer. I wasn't tuned into computers at the time, so little did I know that I was looking at the early version of what was to become the Macintosh. So I also missed that billion-dollar opportunity, too. How many billion-dollar opportunities have I missed? Maybe millions.

If I've missed so many million- and billion-dollar opportunities, why am I writing articles and speaking worldwide about financial independence? That's a valid question, and the answer has to do with helping you find great investments.

Perseverance Pays Off

I took my first real estate investment course in 1974 in Honolulu. The cost was $385, and I believe it was two or three days long. Toward the end of the class, the instructor said something I've never forgotten: "Now you know the difference between good real estate investments and bad real estate investments. Now you all know what to look for."

He paused and then added, "The problem is, most people will tell you such investments don't exist. Your friends will tell you so, and so will real estate agents." Truer words were never spoken. For the next few months, I went from real estate office to real estate office, looking for investments. As promised, the real estate agents told me what I was looking for didn't exist. My friends and co-workers at Xerox told me the same thing, and said I was either dreaming or smoking funny cigarettes.

Finally, in a small, obscure real estate office in downtown Waikiki, I met a scruffy little broker who said, "I have what you want." The next weekend I was on a plane to Maui, where he'd found an entire condominium development that was in foreclosure.

I purchased my first piece of investment real estate for $18,000, putting the $2,000 down payment on my credit card. The one-bedroom/one-bath condo paid me a positive cash flow, even after all the expenses and mortgage payments. My investment career had begun. More important, I was training my brain to see what most people don't see. That $385 real estate course has made me millions of dollars over the years.

Keep an Open mind

Earlier this year, around tax time, I wrote an article, "Think Rich to Lower Your Taxes." It was about an investment strategy known as the "velocity of money," and how I use it to invest, make a lot of money, and then legally use the tax laws to minimize my own taxes. I suspected it would spark some controversy, and it did.

For a couple of weeks, I kept track of responses. Some of the less-complimentary comments reminded me of what those real estate agents and my friends at Xerox said to me back in 1974.

You see, our brains are either our greatest assets or our greatest liabilities. As I said, when it comes to investment opportunities in technology, my brain is a liability; I just don't get it. When it comes to investment opportunities in real estate, gold, oil, and silver I'm above average, but not great. And that's because I've trained my brain to see opportunities in those areas.

So, instead of criticizing the readers who were close-minded (or even mean-spirited) about my advice, I encourage them to keep an open mind and find their own way of seeing investments most people miss. That's how you get rich. People who refuse to open their minds to new strategies seldom become rich — which I guess is why there are more critics in the world than rich people.

Finding Your Magic Formula

One of the most important things my rich dad taught me was to never say, "I can't do it" or "I can't afford it." Those thoughts are self-limiting, and it's hard to find great investments when you're basing your behavior on limitations. In today's world, there are more investing opportunities than ever before. Why would anyone want limited financial results in an unlimited world?

One of the reasons I write about financial independence is so I can put forth ideas that challenge the way people think about investing. If you want the same old financial-planning dogma of "work hard, save money, live below your means, get out of debt, and invest in a well-diversified portfolio of mutual funds," then my philosophies are obviously not for you.

My job is to stimulate your thinking, inform you about why rich people get richer, and encourage you to find the magic financial formula that works for you. I found mine, and I want you to find yours.

- Robert Kiyosaki.

P.S. Now think for a moment,what are the actions you are taking to identify your magic investing formula.


To Your Continued Success

Seven keys to creating wealth

Seven keys To Creating Wealth








Dear Investors,

What the financially challenged don't know…

1. They don't know how to get into the money flow. The crucial distinction between sportsmen and spectators is not that the sportsmen play and the spectators watch; it's that sportsmen get paid, while spectators pay!

To get paid you need to be inside the lines, on the field of play. As long as you're the one settling debts, you're a spectator. You're investing in someone else's game.

2. They don't know how to create value. To get into the money flow means creating value, and value is created automatically when you're in your own flow, when you're doing what comes naturally to you.

Warren Buffet is in his flow - buying undervalued stocks. He has an eye for spotting opportunities in great business opportunities, which he buys. He has become second richest person in the world.

Donald Trump is in his flow buying and selling property. He has an eye for spotting opportunities in buildings, which he buys and sells. He has become one of the biggest property tycoons in America.

3. They don't know the difference between good debt and bad. When you buy a luxury car or a fancy electronic gadget, you're buying a liability. Any purchase that does not put cash in your pocket is a liability.

Good debt buys assets that bring in cash. If you take a loan to buy an apartment building that will produce revenue, that's good debt. You can also borrow against your mortgage to acquire more assets.

4. They don't know how Rs100 saved can be turned into Rs1000 invested. When you're spending everything you earn just to survive and pay off debt, you normally think you don't have much left to save.

But the truth is you don't need loads of cash to start saving, a few hundreds saved can be used to raise finance to buy an asset that will generate thousands. You can start with as little as Rs1000.

5. They don't know how to use other people's resources. Take a look at any wealthy or successful person. Are they operating alone, or do they have a team of supporters?

The gung-ho, lone-ranger approach simply does not work. The first step to getting on to the field is putting the right team together. You don't have to know how to do everything, you only have to know who can do it for you.This is a key to your success.Have an asssociation with the right team of mentors,advisors,partners & workers.

6. They don't know how to control their emotions. Starting your own business is risky. So is any investment. The single most important factor is not knowledge, but being able to manage your own emotions.

Most people don't invest or don't start their own business or manage an investment, not because they don't know how, but because they're afraid. which leads to errors of judgment. Emotional maturity is absolutely crucial.

7. They don't know why they want to be rich. Most people just have a vague idea that they'd like to be rich. They don't know why. They don't know what they'd do with it once they get it. If you don't have a good enough reason you should find one now.

Hope you found this article useful.

Happy Investing

Money Lessons For Kids

Dear Investors,

An early action to teach your kid about money and savings are a good idea to give better money management ideas when they grow. Using simple methods depends on there age, you can easily bring them getting good understanding on money and can grow a habit of savings.

Below are some practical methods a parent can use to teach there kid about money and savings. Have a look:

Age group 1 to 7 – Give her a piggy bank and let her collect and deposit coins to that box. Regularly give coins to your kid for her piggy bank. This approach build a habit of small savings in the early ages.

When the piggy bank is full, open a savings bank account in kids/parents name and deposit the amount to that account. Small drops can form a sea in the future.

Someone I know starts this habit at the age of 2 and still he following at his present age of 43. The account his father opens for him still alive with enormous amount from his small deposits for long term and now he planned to teach this habit to his daughter and present this account to her.

Age group 7 to 10 – Give her awareness about savings bank account, how adding and removing money from savings accounts, how the money growing in it with interests etc… teaching her about interest calculations will do magic at this stage.

Take her to bank with you and let her learn how dealings are happening there. Give ideas to know more about bank transactions.

Age group 10 to 15 – Start a recurring deposit. Instruct to add a small fixed amount in each month. She can easily collect this amount from her pocket money and gifts. You can also give small amounts as gifts on there good work like helping neighbours, helping mother and father, cleaning house, gardening etc. Let her build very good awareness about systematic savings well as the hardworking nature to get awarded promptly.

Teach her on compound interest and the magic of compounding. It is very good in this age to know how compound interest works and how the amount increasing by its power.

Give practical knowledge on banking services like using ATM, cheque book, internet banking facilities etc.

Age group 15 to 18 – Give directions to get knowledge on various investment instruments available in the market like stocks,real estate,gold. Teach her about mutual funds and how it is working, fixed deposits etc. Let her get awareness about various investment products and the difference of returns from these products and different risk levels related to each products.

-Article by Sherin Devassy

I hope you found this useful.

Happy Investing

The Secret Is action

Dear Investor,

Have you watched the Movie entitled "The Secret"?
I've watched this movie 5 times, and also read the book "The Secret"
(available in most book shops) at least 3 times.

What's the missing link or something not emphasized in "The Secret"?

The thing they did not mention is "Action".

As mentioned, Success is as simple as CBA. First, you must Conceive an idea/dream, next you must Believe 100% in it, you must believe it can be achieved even if all other people doubt it. And finally, you need to Achieve, take action.

The only place you can find Success before Work is ............ ......... ....the dictionary.
Becos S comes before W. Other than that, in real life, you cannot just dream and believe, you need to take action before you can taste success.


Many day dreamers are not successful, because they never take action.


"Whatever your mind can Conceive and Believe in, you can Achieve".


These words are not said by me, but by Napoleon Hill, who wrote this formula to success after he interviewed more than 504 of the most successful people then, including 3 Presidents of U.S.A, Thomas Edison, Henry Ford, Andrew Carnegie etc, etc.


Below are comments on Law of Attraction by Dan Millman, author of the Way of the Peaceful Warrior. He was mentored by a teacher and went on to win World championships and thereafter retired to share what he learned from his mentor:


In any case, this "Law of Attraction," as taught many decades ago by metaphysicians like Catherine Ponder and others, is certainly a positive and expansive idea. But dreams, desires and visions are only the beginning - they must be followed by focused effort over time - something barely mentioned in the "Secret" production.

Thomas Edison wrote, "We often miss opportunity because it is dressed in overalls and looks like work." It has the ring of truth, doesn't it? But suggesting that we need to work hard over time to achieve our goals doesn't sell well. It isn't sexy or fascinating, or sound much like a "Secret." Common sense rarely does.

That's all I'm suggesting - a simple point ignored by "The Secret" - go to the effort to take action.

So if you wish to be successful, dream big, but start small - then connect the dots. In other words, start with a vision, then take baby steps. Neither only dreaming nor wishing nor magical secrets get the bills paid.

To Your Success

Organizing yourself to financial success

Organizing yourself to financial success






Dear Investors,

I got this mail which I thought was very useful to share with you all..

********

Just ponder over this statement

"How do you know where you are going, if you don't know where you have been?"
I am a big fan of measuring performance through numbers. Numbers have no political agenda or emotions. They simply measure a result.

In business, if I spend Rs10,000 on a trade fair, how much business have I got back from that? If its less than Rs10,000 then perhaps we shouldn't go to the show next time. But most of us do not take this type of analysis in our personal lives because we don't have a proper record keeping system. Watch any television show on CNBC/Profit where they do a financial make-over and what's the first thing the host does?

Makes the person organize their financial lives so they know where they are at. You can't plan the future without figuring out the results of your past and adjusting accordingly.

When I was a little kid, my parents always argued about our "great" dining room filing system (he says with sarcasm). Everyone just threw the mail into piles onto our dining room table (we ate in the kitchen).
My Mom always tried to clean it up and my Dad was always saying "don't touch my stuff!" (I suspect a lot of you are nodding your heads remembering similar discussions at home). Of course, come tax-time, there would always be a mad scramble to find this tax stub or that statement, buried somewhere in piles.

I am known at work as the pile guy- I file in piles at my desk (gee, wonder where that came from?) but I believe I am pretty good at getting myself organized on my personal finance side. I am not a personal organizer but this is what I do:

I had my desk built-in with a shelf over it when I first moved into my own flat. This is where I put all my current filing. My last year's records are in the condo for easy access and everything else is in storage.

I have two magazine files on my shelf over the desk. I bought them at Ikea for a couple of bucks each. One is labeled "bills" and the other "filing." As soon as I get the mail, I file into one of the two files- immediately; no mail piles.

Everything that doesn't fall into those two categories, I recycle.

Every Sunday I empty out both by either paying the bills or filing.

I have separate binders for the following:

(i) financial statement (bank statements, transaction records from stock trades, portfolio statements etc.);

(ii) loan and emi related material (this is where I keep the legal documents from the purchase of the flat and mail from the financing company); and

(iii) car and home insurance (my original insurance policies, I keep in a safe).

These binders are on my shelf over the desk. If I sell a stock, I immediately find the stub where I bought the stock and stapled them together- it makes it easier to calculate capital gains that way (well… if I actually sold things at profit…)

I have a separate file folder for receipts where there may be a warranty attached to them (i.e. computer hardware purchase, television etc.) and for credit card statements. This I keep in a drawer.

All the tax related correspondence goes into another file folder in a drawer. This helps me keep organized for tax time.

That's it. I can access data easily, compare against last year (non)performance and don't have to worry about piles. Plus, its all close to my work area so its contained. This system probably cost me about Rs 750 in binders, file folders etc.

For goals, I have a bulletin board in behind my computer. I write my goals down on a sheet of paper and stick it to the board. I have to stare at my goals every single day. I also put these goals in my binder containing financial statements. Its a reminder of where I need to be every time I file.

If you are reading this mail to get your personal financial life in order then think about literally getting yourself organized first.

Any readers care to share tips on organizing their personal financial lives?

To Your Success

Believe that you deserve to be RICH

Dear Investors

The major mental obstacle to financial success is that some people believe that they don't really deserve to be rich.

The Biggest Demotivator of All


They have been raised with a steady drumbeat of destructive criticism, as I was, that has led them to conclude, at an unconscious level, that they don't really deserve to be successful and happy. The worst effect of negative experiences in childhood, which are all too common, is that when people actually do succeed as the result of hard work, they feel guilty. These guilt feelings then cause them to do things to get rid of the money, to throw it away. They spend it or invest it foolishly. They lend it, lose it or give it away. They engage in self-sabotage, in the form of overeating, excessive drinking, drug usage, marital infidelity and often dramatic personality changes. To change your results with money, you have to change your attitude toward it.

Treat Money With Care and Attention


The fact is that money is very much like a lover. It must be courted and coaxed and flattered and treated with care and attention. It gravitates toward people who respect it and value it and are capable of doing worthwhile things with it. It flows through the fingers and flees from people who do not understand it, or who do not take proper care of it.

Become Skilled With Money


Sometimes people say that they are not very good with money. But being good with money is a skill that anyone can learn through practice. Usually, saying that one is not very good with money is merely an excuse or a rationalization for the fact that the person is not very successful or disciplined with money. The person has not learned how to acquire it or to hold on to it.

Be A No-Limit Thinker


The starting point of accumulating money is for you to believe that you have an unlimited capacity to obtain all the money that you will ever need. Look upon yourself as a financial success just waiting for a place to happen. And see yourself as deserving all you can honestly acquire.

Open Any Door


Money is good. Money gives you choices and enables you to live your life the way you want to live it. Money opens doors for you that would have been closed in its absence. But just like anything, an obsession can be hurtful. If a person becomes so preoccupied with money that he loses sight of the fact that money is merely a tool that is to be used to acquire happiness, then money becomes a harmful thing.

Money is Neutral


The Bible says, "The love of money is the root of all evil." It doesn't say, "money is the root of all evil." It says, "the love of money is the root of all evil." It is the preoccupation with money, to the exclusion of the really important things in life that is the problem, not the money itself. Money is essential to our lives in society. It is also neutral. It is neither good nor bad. It is only the way that it is acquired and the uses to which it is put that determines whether it is helpful or hurtful.

Action Exercises


Here are two things you can do immediately to put these ideas into action:

First, recognize and accept that virtually everyone who has money today at one time was broke and probably broke for a long time. Then they learned the skills of accumulating money and they are now financially independent. Whatever they have done, you can probably do as well.

Second, become a student of money from this day forward. Study it, learn about it and apply the lessons you discover toward your own financial life until you begin to attract more and more money in your direction.

Author - Brian Tracy

Happy Investing

Case Study: Stock xxx -- Operators live and kicking

Case Study: Stock xxx -- Operators live and kicking

 

Stock xxx : Look at the way this stock is being operated effortlessly without any fear of the regulator. There are only about 0.72% shares with ordinary retail investors.  The stock moved up by 12% today at a time when real estate shares are taking a pounding.

Today on BSE the shares marked for delivery is a measly 3.8% i.e. 13,000 shares only!  In the derivative segment (both Aug fed series) the no of shares traded is more than 8 lakhs!!!

Now the game here is to corner all the free float shares and play around in the derivative segment.

Now there are talks on the street that SEBI is looking in to this.. is it??

Another game begins few days before expiry. The shares are propped up and huge quantity of Open Interest is left to expire. On the day of expiry, this creates huge difference between the 1^st Month contract expiry price and the 2^nd Month running price. Almost 10-15%... ie the 1^st Month expiry price is 10-15% above the 2^nd month contract running price. This 10%-15% is pocketed and the game starts once again the next month. Now, this month, it has started couple of days back. This is why the Sept month contract is trading at a 25-30 Rs discount to the Aug month contract price already.

Why is the regulator sleeping on the switch when this is happening for the past so many months. Look at the charts and you will know. 

These things prove time and again that we have a hopeless regulator in place.

The same thing was happening with Stock YYY few months back.. once again because of its low free float.

Also, remember the way IPOs behaved on the day of listing and afterwards.

To caution and get you feeling of the market,

Regards

Financially Challenged

Dear Investors,

What the financially challenged don't know…

1. They don't know how to get into the money flow. The crucial distinction between sportsmen and spectators is not that the sportsmen play and the spectators watch; it's that sportsmen get paid, while spectators pay!

To get paid you need to be inside the lines, on the field of play. As long as you're the one settling debts, you're a spectator. You're investing in someone else's game.

2. They don't know how to create value. To get into the money flow means creating value, and value is created automatically when you're in your own flow, when you're doing what comes naturally to you.

Warren Buffet is in his flow - buying undervalued stocks. He has an eye for spotting opportunities in great business opportunities, which he buys. He has become second richest person in the world.

Donald Trump is in his flow buying and selling property. He has an eye for spotting opportunities in buildings, which he buys and sells. He has become one of the biggest property tycoons in America.

3. They don't know the difference between good debt and bad. When you buy a luxury car or a fancy electronic gadget, you're buying a liability. Any purchase that does not put cash in your pocket is a liability.

Good debt buys assets that bring in cash. If you take a loan to buy an apartment building that will produce revenue, that's good debt. You can also borrow against your mortgage to acquire more assets.

4. They don't know how Rs100 saved can be turned into Rs1000 invested. When you're spending everything you earn just to survive and pay off debt, you normally think you don't have much left to save.

But the truth is you don't need loads of cash to start saving, a few hundreds saved can be used to raise finance to buy an asset that will generate thousands. You can start with as little as Rs1000.

5. They don't know how to use other people's resources. Take a look at any wealthy or successful person. Are they operating alone, or do they have a team of supporters?

The gung-ho, lone-ranger approach simply does not work. The first step to getting on to the field is putting the right team together. You don't have to know how to do everything, you only have to know who can do it for you.This is a key to your success.Have an asssociation with the right team of mentors,advisors,partners & workers.

6. They don't know how to control their emotions. Starting your own business is risky. So is any investment. The single most important factor is not knowledge, but being able to manage your own emotions.

Most people don't invest or don't start their own business or manage an investment, not because they don't know how, but because they're afraid. which leads to errors of judgment. Emotional maturity is absolutely crucial.

7. They don't know why they want to be rich. Most people just have a vague idea that they'd like to be rich. They don't know why. They don't know what they'd do with it once they get it. If you don't have a good enough reason you should find one now.

Hope you found this article useful.

Happy Investing

Grooming Your Kids ... Grow a habit of Saving

Dear Investors,

An early action to teach your kid about money and savings are a good idea to give better money management ideas when they grow. Using simple methods depends on there age, you can easily bring them getting good understanding on money and can grow a habit of savings.

Below are some practical methods a parent can use to teach there kid about money and savings. Have a look:

Age group 1 to 7 – Give her a piggy bank and let her collect and deposit coins to that box. Regularly give coins to your kid for her piggy bank. This approach build a habit of small savings in the early ages.

When the piggy bank is full, open a savings bank account in kids/parents name and deposit the amount to that account. Small drops can form a sea in the future.

Someone I know starts this habit at the age of 2 and still he following at his present age of 43. The account his father opens for him still alive with enormous amount from his small deposits for long term and now he planned to teach this habit to his daughter and present this account to her.

Age group 7 to 10 – Give her awareness about savings bank account, how adding and removing money from savings accounts, how the money growing in it with interests etc… teaching her about interest calculations will do magic at this stage.

Take her to bank with you and let her learn how dealings are happening there. Give ideas to know more about bank transactions.

Age group 10 to 15 – Start a recurring deposit. Instruct to add a small fixed amount in each month. She can easily collect this amount from her pocket money and gifts. You can also give small amounts as gifts on there good work like helping neighbours, helping mother and father, cleaning house, gardening etc. Let her build very good awareness about systematic savings well as the hardworking nature to get awarded promptly.

Teach her on compound interest and the magic of compounding. It is very good in this age to know how compound interest works and how the amount increasing by its power.

Give practical knowledge on banking services like using ATM, cheque book, internet banking facilities etc.

Age group 15 to 18 – Give directions to get knowledge on various investment instruments available in the market like stocks,real estate,gold. Teach her about mutual funds and how it is working, fixed deposits etc. Let her get awareness about various investment products and the difference of returns from these products and different risk levels related to each products.

-Article by Sherin Devassy

I hope you found this useful.

Happy Investing

Baby Steps are the Secret to Success

Dear All,

Have you watched the Movie entitled "The Secret"?
I've watched this movie 5 times, and also read the book "The Secret"
(available in most book shops) at least 3 times.

What's the missing link or something not emphasized in "The Secret"?

The thing they did not mention is "Action".

As mentioned, Success is as simple as CBA. First, you must Conceive an idea/dream, next you must Believe 100% in it, you must believe it can be achieved even if all other people doubt it. And finally, you need to Achieve, take action.

The only place you can find Success before Work is ............ ......... ....the dictionary.
Becos S comes before W. Other than that, in real life, you cannot just dream and believe, you need to take action before you can taste success.


Many day dreamers are not successful, because they never take action.


"Whatever your mind can Conceive and Believe in, you can Achieve".


These words are not said by me, but by Napoleon Hill, who wrote this formula to success after he interviewed more than 504 of the most successful people then, including 3 Presidents of U.S.A, Thomas Edison, Henry Ford, Andrew Carnegie etc, etc.


Below are comments on Law of Attraction by Dan Millman, author of the Way of the Peaceful Warrior. He was mentored by a teacher and went on to win World championships and thereafter retired to share what he learned from his mentor:


In any case, this "Law of Attraction," as taught many decades ago by metaphysicians like Catherine Ponder and others, is certainly a positive and expansive idea. But dreams, desires and visions are only the beginning - they must be followed by focused effort over time - something barely mentioned in the "Secret" production.

Thomas Edison wrote, "We often miss opportunity because it is dressed in overalls and looks like work." It has the ring of truth, doesn't it? But suggesting that we need to work hard over time to achieve our goals doesn't sell well. It isn't sexy or fascinating, or sound much like a "Secret." Common sense rarely does.

That's all I'm suggesting - a simple point ignored by "The Secret" - go to the effort to take action.

So if you wish to be successful, dream big, but start small - then connect the dots. In other words, start with a vision, then take baby steps. Neither only dreaming nor wishing nor magical secrets get the bills paid.

To Your Success

How do you know where you are going, if you don't know where you have been?

Dear Investors,

Just ponder ****

"How do you know where you are going, if you don't know where you have been?"
I am a big fan of measuring performance through numbers. Numbers have no political agenda or emotions. They simply measure a result.

In business, if I spend Rs10,000 on a trade fair, how much business have I got back from that? If its less than Rs10,000 then perhaps we shouldn't go to the show next time. But most of us do not take this type of analysis in our personal lives because we don't have a proper record keeping system. Watch any television show on CNBC/Profit where they do a financial make-over and what's the first thing the host does?

Makes the person organize their financial lives so they know where they are at. You can't plan the future without figuring out the results of your past and adjusting accordingly.

When I was a little kid, my parents always argued about our "great" dining room filing system (he says with sarcasm). Everyone just threw the mail into piles onto our dining room table (we ate in the kitchen).
My Mom always tried to clean it up and my Dad was always saying "don't touch my stuff!" (I suspect a lot of you are nodding your heads remembering similar discussions at home). Of course, come tax-time, there would always be a mad scramble to find this tax stub or that statement, buried somewhere in piles.

I am known at work as the pile guy- I file in piles at my desk (gee, wonder where that came from?) but I believe I am pretty good at getting myself organized on my personal finance side. I am not a personal organizer but this is what I do:

I had my desk built-in with a shelf over it when I first moved into my own flat. This is where I put all my current filing. My last year's records are in the condo for easy access and everything else is in storage.

I have two magazine files on my shelf over the desk. I bought them at Ikea for a couple of bucks each. One is labeled "bills" and the other "filing." As soon as I get the mail, I file into one of the two files- immediately; no mail piles.

Everything that doesn't fall into those two categories, I recycle.

Every Sunday I empty out both by either paying the bills or filing.

I have separate binders for the following:

(i) financial statement (bank statements, transaction records from stock trades, portfolio statements etc.);

(ii) loan and emi related material (this is where I keep the legal documents from the purchase of the flat and mail from the financing company); and

(iii) car and home insurance (my original insurance policies, I keep in a safe).

These binders are on my shelf over the desk. If I sell a stock, I immediately find the stub where I bought the stock and stapled them together- it makes it easier to calculate capital gains that way (well… if I actually sold things at profit…)

I have a separate file folder for receipts where there may be a warranty attached to them (i.e. computer hardware purchase, television etc.) and for credit card statements. This I keep in a drawer.

All the tax related correspondence goes into another file folder in a drawer. This helps me keep organized for tax time.

That's it. I can access data easily, compare against last year (non)performance and don't have to worry about piles. Plus, its all close to my work area so its contained. This system probably cost me about Rs 750 in binders, file folders etc.

For goals, I have a bulletin board in behind my computer. I write my goals down on a sheet of paper and stick it to the board. I have to stare at my goals every single day. I also put these goals in my binder containing financial statements. Its a reminder of where I need to be every time I file.

If you are reading this mail to get your personal financial life in order then think about literally getting yourself organized first.

Any readers care to share tips on organizing their personal financial lives?

To Your Success

Renewable Energy : An exciting investment option

An Attractive Option

Why renewable energy infrastructure has become an exciting investment option.

by Felicia Jackson
Renewable Energy World
August 25, 2008

Amid the turbulence of the credit crunch, investors are increasingly concerned with finding a safe asset class for investment - property is crashing, the stock market has crashed and bonds look risky. Investors are looking to diversify their portfolios into a variety of alternative asset classes. Energy infrastructure could provide that potential safe haven, writes Felicia Jackson

Offering unexciting yet stable revenue streams, infrastructure investment has always been seen as a safe asset class. A number of factors lie behind this perception. Long-term contracts are a classic characteristic of energy infrastructure investment, which enables investors to plan far ahead. Furthermore, historically there has been a serious under-investment in this sector and catch-up is necessary. Around the world many power plants, transmission cables, and pipelines will soon reach the end of their lifetimes and will either have to be updated or replaced — potentially requiring €2 trillion of investment in Europe alone. The EU has admitted it expects 450 GW of power to go off-line by 2015 and the pan-European electricity industry lobby group, Eurelectric, has said that the EU will need about 520 GW of new capacity by 2030.

The need to replace and improve infrastructure is already resulting in record levels of expenditure, and meeting increasing power demand growth is going to require considerable investment over the coming decades, too.

Governments globally are also now mandating billions be spent on renewable energy infrastructure. The International Energy Agency (IEA), among others, is calling for urgent investment in energy technology. It warns that without a US$35 trillion energy technology revolution, the world could face a 130% surge in carbon emissions by 2050. All in all, this leaves an enormous energy supply gap.

Bruce Jenkyn-Jones, director of investments at Impax Group plc says: 'There is a huge spending requirement in infrastructure as a whole, and in environmental infrastructure in particular. According to OECD estimates, spending will rise by nearly 50% each decade, fuelled by population growth and globalization.' The major appeal of the sector to investors is the cash-flow that can be generated from such investments, as well as the relatively low-risk nature of such deals. Certainly, environmental energy infrastructure offers investors a class of investment with predictable, asset-backed revenue streams that are underpinned by government regulation, as well as long-term off-take agreements or power purchase contracts. Jenkyn-Jones continues: 'The key issue is balancing risk versus return, and a regulated risk in a developed country is one of the best risks there is.'

Different legislation within countries can obviously have an effect on returns. If, for example, a region has a feed-in tariff then investors have a known price to work with; if utilities must buy all renewable power generated then there is no demand risk; and, if there is a standardized development process, that results in minimized development risk. Ernst & Young's 2007 Renewable Energy Attractiveness Index — which identifies risks, analyses the extent to which there is favourable and stable legislation in a country, as well as the reliability of a region's natural resources, and how successful the renewable energy industry has been — deemed the US the most attractive market, followed in turn by Germany, India, Spain, the UK and then China.

Risk evasion

The energy sector clearly has a constrained future, as increasing demand coincides with a focus on the negative implications of fossil fuel use. Power prices are high and we're unlikely to see a price collapse in the near future, which will increase investor returns on traditional fuels. There's no question that there are currently higher returns to be made from oil and coal than from renewable energy. However, as the market continues to evolve, the price of carbon could change that.

Identifying the best investment opportunities requires a close understanding of the environmental infrastructure business, including an in-depth knowledge of the different regulatory regimes and market drivers that affect the sector.

Jenkyn-Jones accepts that there are risks, including, 'failing political commitment to long-term environmental policy and legislation, as evinced by the lack of an international policy post-Kyoto.' Yet, already, regional governments are taking independent action — the EU is reviewing legislation requiring at least 20% of energy to come from renewable sources by 2020, as well as a 20% cut in carbon emissions. Jenkyn-Jones says: 'The three key drivers for effective renewable energy investments are those of environmental policy, or the ever-tightening ratchet of legislation, market liberalization and the falling cost of technology.' In order to identify the best investment opportunities, it's important to pinpoint markets where these three drivers interact.

It's also necessary to understand the practical aspects of what differentiates markets by region, from levels of economic support, to requirements for upgrades or new infrastructure, to the ability of new power plants to access the grid. In 2007, the US led the league table in new wind capacity, adding 5.2 GW, followed by Spain with 3.5 GW and China with 3.3 GW. However, up to 30% of all wind projects in China are not connected to the grid, owing to a combination of slow planning progress and little state support. Even when power plants are connected, the existing grid can have problems handling variably generated power.

A broad range of energy technologies could be used to achieve the national and international targets set for the generation of renewable energy. However, fuel cells have yet to live up to their long-awaited potential, while potential geothermal capacity is limited by geography, and biomass projects can be limited in size by feedstock limitations. Marine power has a long way to go before its costs can be brought down sufficiently to make it a worthwhile infrastructure bet. Indeed, Ian Simm, chief executive of Impax Asset Management says of marine power: 'It would be impractical to expect a large contribution within a decade, although by then we should have operating small-scale farms in both wave and tidal. We need a twenty-year vision for marine power.' Therefore, the key technologies currently providing the most interesting infrastructure investment opportunities are wind and solar-based devices.

The relative capital costs of solar and wind remain far higher than those of coal or natural gas projects, but it seems likely that fuel costs will continue to rise. And once a wind or solar project is up and running, there is no fuel requirement — capital investment and ongoing maintenance are the only costs. If capital costs of wind and solar continue to fall, then renewable energy could rapidly become competitively priced.

There are clearly significant benefits to wind as a source of renewable energy. It is cheap; it is utility-scale; load factor and efficiency are far higher than for alternatives, and manufacturing costs can be paid off in months rather than years. There have been high hopes regarding the offshore wind market. However, these have been dampened somewhat by Shell's recent withdrawal from the £2 billion (US$4 billion), 1 GW London Array project, although its partners E.ON and Dong have since agreed to buy out Shell's stake. The wind market operates on thin margins, but problems in sourcing sufficient turbines, and in planning, construction and grid connection are beginning to seem endemic. Increasing costs in the global commodities market are also likely to take their toll on renewable energy devices.

For example, the price of offshore wind turbines has risen by 48% to €2.23 million/MW ($3.45 million/MW) in the past three years, according to Denmark's BTM Consult APS, while onshore turbines now cost €1.38 million/MW after rising 74% over the same period. Cambridge Energy Research Associated (CERA) predicts that turbine costs are likely to increase by at least a fifth in the next 2-3 years. This could cause problems if input costs increase while energy prices remain constrained by fixed tariffs. In Germany, for instance, local feed-in tariffs were supposed to be coming down 2% per year. Now the government is being asked to increase the tariffs, and even to index-link them to the cost of steel and copper. Non-feed-in tariff markets retain more flexibility, as the price of power can be raised to reflect increased input costs.

The UK would seem to be just such a flexible market, but the slow pace of change in the UK market for developing onshore wind seems to have put off all but the most experienced players. In parts of Europe, many of the sites with the highest potential wind resource have already been developed, so for many the US is the most attractive wind market in the developed world. Successful developers in the wind market will be those with the expertise to develop power projects in specific markets or utilities, such as Endesa for example, which has particular experience in Latin American markets.

William Young, wind analyst at New Energy Finance warns that the market may prove tight for new entrants. While he believes that wind energy will prove a safer investment than many others, margin squeeze will remain strong over the next couple of years. The position for those with an existing portfolio is robust, generating cash at a fixed rate, but in the short-to-medium term, a more worthwhile investment could be in technology companies that target cost reduction and manufacturing in the supply chain. Capitalization of developers remains a key issue, as equipment manufacturers often require payment (or part payment) up front in order to secure supply — and usually long before a project is generating any cash flow.

Investment and opportunities increase

Despite the difficulties, investment flows continue to increase. New Energy Finance reported $24.8 billion of activity in Q4 2007 — with almost $1.8 billion of refinancing. Refinancings were almost double the amount of the previous quarter and acquisitions accounted for $3.5 billion. There was also a jump in the volume of new wind financing in Q4 2007, from $8.3 billion to $12.6 billion, with most activity in China, India, Italy, Spain and the US. While turbine costs may be increasing, this is partly due to increased demand. As demand grows, it's likely that more resources will be allocated to manufacturing, eventually restoring the supply-demand balance and bringing prices down.

While the wind market may well prove tight in the short term, James Vaccaro, managing director of renewable energy investor Triodos Renewables Fund says: 'One area where the potential for growth is also most exciting is within existing wind portfolios.' A cost of wind projects which is often ignored is the cost of decommissioning. According to Vaccaro, the point of decommissioning a project in fact provides a unique opportunity to increase return. He says: 'An existing project which has reached the end of its lifetime is far more likely to pass planning hurdles than a new project. Repowering that project can mean a greater value of that project at termination than cash income over the operational life of the project. New turbines are far more powerful than those of 15 or 20 years ago.' It can even be possible to make a decommisioning profit by taking down old turbines and selling them off to developing markets. Vaccaro adds: 'The possibility is that realization value can even be ahead of deployment.' For those with existing wind portfolios, this could have an enormous potential for increased return.

The solar market has far higher potential for new market entrants than wind. A solar PV installation is less likely than a wind project to create problems with the local community, either in the planning process, or in relation to concerns about wildlife and the local environment. Barriers to entry are coming down, and there have been improvements in technology and efficiency, creating a huge potential for costs to fall. PV production has been doubling every two years, increasing by an average of 48% each year since 2002, making it the world's fastest-growing energy technology. With increases in efficiency, and large amounts of solar manufacturing coming on line, the price should continue to fall. Investment is following suit — solar financings in Q4 2007 hit $2 billion, mostly in Spain, with a handful of deals in Italy, South Korea and the US.

PV is not the only option in the solar market. While prices have declined an average of 4% per year over the past 15 years, it remains relatively expensive, impacting on installation costs. According to a 2007 report from Photon Consulting, solar is already at a cost level that makes it competitive with residential grid prices in the OECD's highest-priced markets and could even reach widespread grid parity by 2010, though many disagree. Nonetheless, according to Jenny Chase, senior associate, solar, at New Energy Finance, global silicon supply is likely to quadruple by 2010 due to new capacity coming on-line in China, Russia and Germany, bringing about at least a 30% drop in module prices.

There is also growing interest in the potential of large-scale solar thermal energy generation (STEG), also known as concentrated solar thermal power (CSP). In fact, the biggest deal in Q4 2007 was Abengoa's $287 million financing of its STEG plant. Sebastian Waldburg, of private fund SI Capital R&SI agrees. He says: 'Capital costs have been falling in the renewable energy market and even a few percentage point drops means huge profitability gains.' Solar thermal power is far cheaper to generate than PV power, at 12-14 cents per kWh, but PV is competing against the retail price of electricity while STEG is competing against utilities directly, and there is still a price gap. Utilities can typically generate power around the 5-7 cents mark.

Waldburg, who invests predominantly in Spain, sees a huge opportunity. He says: 'As a country, Spain has seen growth rates of 250% compound annual growth rate for renewable energy; it has feed-in tariffs for 25 years and guaranteed 100% renewable energy off-take.' He emphasizes the importance of looking at the gap between existing renewable energy infrastructure and specific country targets. Again, looking at Spain, he says, 'If you multiply that megawattage by regional feed-in tariffs, you can identify the scale of investment needed - by 2010, €16 billion needs to be invested in Spain in biomass, biofuels, CSP, PV, wind and small hydro.' He is particularly excited about the opportunity in CSP.

Although only one concentrating solar thermal power project is currently in operation in Europe, a 10 MW plant operated by Abengoa, there are approximately 2.9 GW of such projects currently in planning. The returns are high, driven by a market with solid policy support combined with the ability to generate fairly competitively priced renewable power. SI Capital invested in Enerstar, which is currently developing three 50 MW CSP projects, at an early development stage. The projects are now nearing construction and, when Enerstar raised additional capital recently, the valuation was considerably higher than when SI Capital made the original investment.

In the US, coal-fired plants generate at 5-7 cents per kWh. The US-based CSP plant Nevada Solar 1 is selling (peak) power at 18 cents per kWh — so it must be generating power below that level. There is still a significant price differential, but it is narrowing. Spain has a regulated tariff of €0.27, guaranteed off-take and country targets of 500 MW — which may soon be increased to 3 GW. Waldburg says that CSP is only profitable in large installations, but the opportunity is enormous and the risk low. He adds: 'There are growing opportunities for innovation and development in terms of heat storage in salts.'

In the short term it's likely that PV will continue to outstrip CSP investments, due to the relatively long lead time required for such a development — about three years. However, there are a growing number of regions with specific CSP feed-in tariffs — Spain introduced these in late 2006 and both Italy and France brought in tariffs in early 2008. The technology's potential at a utility scale and the increasing number of subsidies and targets make it an exciting opportunity.

For most forms of renewable energy, variability remains a problem and energy storage is a crucial hurdle to overcome. Energy storage, by acting as a buffer between the source of power and the user, can smooth out spikes in power supply, strengthen the grid by storing power near its point of use and transform intermittent and erratic output into smooth predictable power flow. The technology remains expensive, but some systems are becoming competitive. For example, Canada's VRB Power Systems has developed an electricity storage system that allows for the storage, management and integration of variable power within the grid system. This can dramatically improve the economics of renewable generators, as electricity can be sold at the highest available price, making them more appealing as an alternative to fossil fuel generators.

Investment requirements and the carbon market

In choosing a renewable energy investment there are several key things to consider: a large gap between actual deployment of a technology and country targets; a long-term stable economic framework; off-take guarantees — and the potential to generate carbon credits or allowances of some kind.

In terms of global investment in renewable energy infrastructure, this is one mechanism that no investor can afford to ignore. They are a tool for bringing in large streams of mainstream finance and offer potentially exciting returns. Furthermore, while the carbon markets provide an opportunity to transfer technology from the developed to the developing world and support sustainable development, they also provide an additional stream of finance to mitigate the risk of investing in developing markets. The World Bank has reported that, to date, $33 billion of investment in renewable energy has been due to the Clean Development Mechanism (CDM).

In 2007, global carbon markets were worth in excess of €46 billion, up 100% from 2006. The bulk of the market is represented by the European Union Emissions Trading Scheme (€36 billion for 2000 mtCO2e) and the CDM (€9.4 billion for 791 mtCO2e). Around two billion Certified Emission Reductions (CERs) were originally expected to be generated by the end of this phase of Kyoto in 2012, generating around €23 billion-worth of CDM credits over the period. However, CER prices have gained nearly 25% since January this year (January-June 2008) and Point Carbon has projected that record high oil prices and a lower-than-anticipated supply of international carbon credits mean carbon allowances will trade at €32 on average during the second phase of the European Union's cap-and-trade scheme. This means the return on such credits is only likely to increase.

According to Tom Hill-Norton, partner at carbon project investor Plane Tree Capital, the reason for the success of the CDM is simple. He says: 'Offsets in developing countries are economically efficient, therefore cheaper, which provides enormous benefits for developing economies.' Effectively, the CDM creates a free subsidy providing incentives for the developing world to move towards clean energy.

By doing so, the process can decouple emission reduction from economic growth, and ensure that developing economies continue to grow, while helping to decarbonize the global economy. And, while the early days of the carbon market saw the registration and financing of many industrial decarbonization processes (such as destruction of HCFCs), clean energy projects accounted for 64% of CERs generated in 2007 (33% in 2006 and only 14% in 2005).

The CDM has been criticized for funnelling money to projects that might have been developed anyway, even without carbon credit-based funding. However, Hill-Norton is clear: 'It is the addition of revenue from the sale of CERs that enables marginal renewable energy projects to become viable.' He adds that some projects derive as much as 50% of their revenue from carbon credits. The appeal of carbon credit financing is not only that these projects contribute significantly to addressing global environmental problems, but they also offer equity investors another class of investment, providing relatively predictable, asset-backed revenue streams underpinned by government regulation.

Increased interest in the environment, coupled with the recognition that climate change presents a compelling business opportunity, means that investment in environmental solutions is becoming a key theme for all investors. The growth story in environmental investment — combined with rising oil prices, concerns about energy demand growth and security, legislation and global climate change — make renewable energy infrastructure investment an attractive option.

Felicia Jackson works with Carbon International in London, UK
e-mail: felicia.jackson@carboninternational.com

Mukesh Ambani : An Old Interview

Mukesh Ambani An Old Interview:

If Dhirubhai Ambani was a larger-than-life patriarch and Anil was the public face of Reliance, Mukesh Ambani was an enigma. Those who knew him well credited him with leading Reliance ' s turbo-charged growth over the last two decades.

But very little is publicly known of his beliefs, vision and motivation. In his most expansive interview ever to MoneyLIFE, a personal finance magazine, Reliance Industries chairman Mukesh Ambani tells MoneyLIFE editors Sucheta Dalal and Debashis Basu, what drives him and his business decisions

A lot of details about your life are already known. But we don ' t know things from your end. Your life has changed dramatically in just about three decades; will you take us through that process?

From my point of view, very little has changed (Laughs). In terms of attitude to life, little has changed. There are important lessons I have learnt during my upbringing. It is important to share these, though these are tough to practise as a parent (smiles).

We were like a joint family and I was the first child of the family of that generation. There were advantages in being the first child those days. My father navigated through life from Aden in Yemen to Bhuleshwar (a congested commercial precinct in Mumbai), to Usha Kiran (Mumbai ' s earliest skyscraper) at Altamount Road to Sea Wind (an exclusive tower which is the Ambani residence).

My first memories are of the early ' 60s at Altamount Road which was then an emerging area. We were a close-knit family and the four of us -- Dipti, Nina, Anil and I -- were left to do what we wanted. There were boundaries, of course, but within those, we were not micro-managed. Things have changed so much now. When my kids, Isha and Akash, were in the third standard, we behaved as though it was our exam.

Our own childhood was totally different. I guess when you are left on your own, you find your true potential. I remember my father never came to our school even once. Nevertheless, he was hugely interested in our all-round development for which he did some amazing things.

Give us an example.

Imagine this. In the mid-60s, he put out a newspaper ad for a teacher, but specified that his responsibility would be non-academic; he would have to impart general knowledge. He interviewed several persons and selected Mahendrabhai Vyas who taught at the New Era School . Mahendrabhai used to come every evening and stay with us till 6.30-7 pm.

His brief was our all-round development. We played hockey, football and different kinds of games, watched matches at Cooperage, travelled in buses and trains and explored different parts of Bombay . We went camping and stayed in a village for 10-15 days every year.

These experiences have helped us a lot, but at that time, we were not very aware of all the learning that was going on. The two hours with Mahendrabhai every evening were great fun. A third track running at that time, apart from academics and the fun stuff, was that my father shared with me his passion for business and entrepreneurship from very early on. Even when I was in high school, I used to spend long hours at office on weekends.

So, these were the four components of my upbringing -- the academic stuff where I was left to myself, Mahendrabhai, my father ' s passion for creating Reliance and the last piece was his deep links with the family.

A lot of what I have learned from these influences has stayed with me. From the external perspective, my life may have changed a lot, but when I look back at myself in the 1970s, 1980s and now, I see consistency.

How would you describe this?

For my father, life was uni-dimensional. Reliance was his life. Yet, some of my most vivid memories are about spending time with him. However busy he may have been, whatever the pressure, Sunday was for his wife and kids. I try to do the same with my family.

And it has to be non-academic. It is easy to be with your kids and say let ' s do homework together. But we try to do things, beyond doing lunches and dinners. I learnt that from my father. He was a big nature lover and during our school days, we went to different places every Sunday -- we walked through the forest or had a bath in streams.

I have turned into a big nature fan as well. The change in my life that you talked about is that I can afford it more today. These childhood influences have shaped me into what I am today.

What about your choice of higher education, why did you choose chemical engineering?

In fact, the choice illustrates what I meant about academic decisions being left to us. Nobody asked me to do chemical engineering. I chose to study science and which college I would go to.

By that time -- the early ' 70s -- Vimal was a fairly successful textile brand. So everybody expected me to do textile engineering. I shocked them by saying that I would go to IIT. Interestingly, 4-5 of us friends studying together for Inter-science were all among the top 10. Ajay Parekh, who runs Pidilite, topped Bombay University . I stood fifth or sixth.

Since Inter-science results were announced after the IIT entrance, I joined IIT, Bombay . After the Inter-science results a few weeks later, I left and joined University Department of Chemical Technology (UDCT) along with my friends.

Did your academic choices help you in the process of self-discovery?

From the beginning, it was clear that we would have to find our own path. Along with that came the self-realisation that we would have to propel ourselves to achieve excellence. I am trying to learn how to do that as a parent. There is a trick somewhere; sometimes we do a lot. I feel that I am more ready for ICSE exams than my daughter. I know everything and I can beat any parent of my age in ICSE exam hands down.

How do you get the time to do it?

I am passionate about it, so one makes the time. My daughter says it is wrong. ' I will have to study it myself, ' she says. The trick is to light a fire. It is not about pouring knowledge into the brains of kids but lighting that spark so that they learn by themselves.

With us, my father achieved it without trying as hard as we do. It also depends on circumstances, friends and luck. Probably, we were fortunate to have everything in place.

Many of your childhood friends are still working with you -- you clearly forged lasting bonds.

Anand and I have been friends since the sixth standard; he then went on to study commerce. I met Manoj at UDCT. (Anand Jain now leads the Reliance effort in SEZ and Manoj Modi heads the retailing venture). I have other friends as well from that period. Kiran Manelkar became a doctor; because of him, I have many friends who are doctors.

Why did you choose chemical engineering?

Nobody had anticipated that chemicals was the direction in which Reliance was headed. I did chemical engineering because it was supposed to be the future. Think of the line from the movie The Graduate, which was very popular in our times -- "There ' s a great future in plastics." (Laughs) I guess, it left a mark on my mind.

In a sense, it also reflected two of the tenets on which my father built Reliance: always invest in businesses of the future and invest in talent. We believe in these two principles even today.

When did you start working for Reliance?

Even when I was doing chemical engineering, I was working almost full time for Reliance. I finished college at 2.30 pm and went straight to the office. I remember, we were raided and my father was in the US .

I was literally in charge, handling the problem. I must have been about 16 or 17. After chemical engineering, everybody said, ' what would you do ' ? My friends and I wrote all sorts of competitive exams. It was mainly driven by a desire to prove to ourselves that we are no less than anyone in the world. That attitude has not changed either. We even took the civil services exams just to see whether we can get into the list. Then we said, let us apply to Harvard, Stanford and other colleges. I was lucky to get into the top 2-3 business schools. I joined Stanford.

Our class and faculty were outstanding. Nobel Laureate, Bill Sharpe was a professor of financial economics. He made a great impact on me. I hit it off with him on day one -- just as I did with Professor MM Sharma. These are the kinds of professors who make you think out of the box.

Prof MM Sharma ' s first lecture was on how you make money in the chemical business. Bill Sharpe started by asking ' how do you make a difference to the world. ' It was my good fortune that I had a good set of professors and, of course, a great peer group.

While I was at Stanford, Reliance got a licence to make polyester. At that time (early ' 80s), the World Bank ' s Young Professional ' s Programme (YPP) was extremely prestigious. I was very keen to do it too. I had the choice of completing the Stanford graduate programme over the next six months, do the YPP for a year and then return to India . I planned to do this and return to work on the polyester plant.

But you didn ' t do that. What happened?

When I explained my thoughts to my father, he said, ' you are right in the way you have planned your things. I am starting work on the polyester plant. ' I said, ' Oh you are not going to wait for one and a half years? ' He said, ' No, I won ' t wait. ' So, I decided to come back immediately.

This was in 1981. Rasikbhai Meswani, Nikhil and Hital ' s father, was my first boss. The management style used to be very open. We could walk into each other ' s cabin, join in a meeting or get involved in any discussion. My father encouraged it. But when I joined Reliance formally, he said you need to have a boss and I was put under Rasikbhai ' s charge.

He was running our polyester business, which consisted of importing polyester fibre, texturising it and selling it to textile mills. It was a new business compared to our own textile mill at Naroda (near Ahmedabad) that brought in almost 60%-70% of the profits.

When we started work on setting up a polyester filament yarn project, my chemical engineering and business school background helped me in organising the work, creating reporting structures, motivating people. . . in all this, my father and Rasikbhai were two steps ahead of me.

We worked liked a partnership; I was fortunate to be able to contribute from day one. One of my biggest obsessions today is that senior people must give bright 25-year olds the opportunity to contribute meaningfully.

The time was different. Reliance has been in the middle of so much of tumultuous growth. You did many things for the first time in India . Isn ' t it difficult to replicate your own experiences?

Well, I will share with you my perspective. Even before we went public, my father used to say, we need capital but we don ' t want to be dependent on traditional sources of capital. It was very difficult to convince banks about his ambitious plans.

In the journey of an entrepreneur, the most important thing is self-belief and the ability to convert that belief into reality. He believed that we could raise money from the capital market and return it with profits. His second belief was that India is a great opportunity.

While going public was relatively a new thing, he also wanted to change the status quo and unleash disruptive changes. May be he did not articulate all this then.

The actions were loud enough. For instance, for many years, Reliance was not part of any trade or business association. It also had nothing to do with the old established houses.

Absolutely. That was his belief. He said, ' let ' s build a different company. ' This is my 25th year in Reliance as a full-time employee.

When I look back over the years, what did we change? We changed the mindset and we showed the way. Dhirubhai propelled the Indian capital market forward. We raised money only till the middle of 1985 and then in 1989. Then many others came along and raised money. That was a paradigm change.

The first 200-odd people who built Patalganga with me are still around, running different businesses. It has gone into their psyche that we do things differently here. We have taken money from ordinary Indians and we are their trustees. When this is drilled into thousands of people, you automatically get performance.

The other thing that is not visible externally is methods, processes, systems that moved Reliance away from a system that is totally owner-driven. We were among the last to put up a polyester plant. Before us there were Birlas, Modis, Singhanias, the multinationals -- everybody except the Tatas.

You were first among the new crop of licencees for Partially-Oriented Yarn.

Yes, but whoever already had a licence, had a business advantage. So, what competencies did we build? One was to get a licence in a licence-permit raj. Getting a licence is nothing; you have to build a sustainable business. Raising the money is another competence.

In the ' 80s, when I came in, the ground rules were made clear to me. ' Build this business from scratch, without taking anyone from Reliance. ' That forced you to be very disciplined. I looked around and figured out in three months that this industry runs on heroes.

Experts came in with their notebooks on which they had written down all the process conditions, temperatures, pressures and carried these readings back with them.

Are you talking of the consultants?

Even the managers. It was all a feudal style of management. If we had accepted that style, we would not have grown. It was simply not a scalable model. Of course, the easiest thing would have been to follow it. But we had a disruptive style of management. So we said, ' we don ' t want people carrying their wisdom in notebooks as if it is some kind of secretive operation. '

We tried to create an open environment. In today ' s language, we created SOPs and SOCs (standard operating procedures, standard operating conditions) so that everybody was on the same page. We wanted an organisation where everybody contributes but the business is not dependent on a few individuals.

When our competitors were buying licences for half a million and one million dollars, we agreed to pay DuPont $5 million, because we wanted to work with the best in the world. We had limited capital but our approach was different. We got a few experts from DuPont and put some 25-year-olds with them to learn how to manage operations and sustain chemical processes.

The vision of the top person, in deciding that this was the right path, was totally different from what existed in India . It was a big thing.

Reliance went through turbulent times in the mid-80s when there was this long battle with the government and the media. Then Dhirubhai suffered a stroke. From the outside, it seemed that Reliance would be sorely tested because the perception was that so much was built by "managing the system."

This is where investing in talent works. We had different sets of competencies in Reliance. If it meant getting licences to import something quickly to reduce the cycle time or to get steel from Steel Authority -- there were people with relevant competencies handling those things to ensure that the project is completed in time.

There was another set of competencies for the operational part -- how do you run things efficiently. That strength of Reliance was underestimated.

What went on in your mind during the crisis?

We lost Rasikbhai on 30th August, 1985. That was a huge blow. Then my father suffered a stroke in February-- two major events in five months. From three of us running the business, for some time, I suddenly became alone. But my father recovered reasonably by June-July.

There was no sense of panic. The whole picture was in my head. That was the strength of the open system. If I had kept everything close to my chest, it would have been difficult. We had excellent people across the company. The polyester business was institutionalised and there was a plan in place. We just kept our heads down and executed it.

When the economy opened up in 1992, there was a lot of apprehension about whether Indian companies would survive. What was your gameplan?

We were clear that we had to be internationally competitive and were passionate about building competencies that were the best in the world even when the tariffs were very high. It was an obsession with me to beat the Taiwanese and the Koreans who dominated the polyester business in the ' 70s.

That was possible only when all aspects of the business were better than them. One critical factor is scale. We understood that, unless we had scale, we won ' t be world-beaters. Remember, with enormous effort and all the limitations of the licence-permit-raj (between 1981 and 1991), we had built a polyester capacity of 75,000 tonnes. But we had also built a different mindset by looking outside India .

So, when the deregulation came, we were ready. By the middle of ' 95, we were producing 1 million tonnes. A spring was released. Tariffs also fell sharply from 150% to 30% and later to 10%. We wanted to be internationally competitive even when the tariffs were 300%, but being based in India became a competitive advantage when the tariff level fell to 30%.

By that time, we had developed superb project execution capability. We had more than 300 top quality people to execute the projects. From the ' 80s till today, we have not struggled to start up any plant. The biggest companies in the world do not have this kind of record.

How did Reliance develop this mindset? There was hardly anything, except some public sector companies as a reference in India .

My reference points were US companies. We were hugely influenced by large US chemical companies, especially DuPont. It was a very open company and we could take advantage of their learnings. The US is also a very open society. I could to go the US Association of Chemical Engineers and get the standards, data, etc.

It was not the Internet age, but it was easy. It sometimes cost us money to buy what we needed but the investment was worth it to put the right thought process in place.

Critically, some of the leadership came from public sector managers. For instance, KK Malhotra, who was with us for 15 years from 1985, made a fantastic contribution. He was my guru. He ensured that we imbibe all the best practices.

You see, all the right things are written in books and research papers. The trick is to ensure that there is no gap between what is written in the books and your vision; from what is happening on the shopfloor and what is going on in the marketplace. That is execution. That is what makes the difference.

So, in short, we had a huge US bias and great public sector talent. It was not a large group, just 5-6 outstanding people. I always believe that so-called ordinary people can achieve extraordinary results as long they are given a sensible framework. We have been able to do it in industry after industry.

Till 2000, Reliance always said it wanted to capture the entire value of the oil and petrochemicals chain, but after 2000, you have gone in different directions. What caused the change in thinking?

We had three thoughts. One was the fundamental belief that we will invest in businesses of the future and we will invest in talent. We clearly saw that from oil to fabric was a value chain of opportunity and it will remain so for many future decades.

We executed that well and created enough disruptions in the polyester, plastics, refinery and the upstream business of oil and gas. We had very good cash flows. In late ' 90s, we had two options. One was to make the current business more global, bigger and better. The other option was to use our cash flows to do something else.

We were sitting right in this room and my father said ' now it is your call, what you would like to do. ' I said, ' we must use the competencies and cash flows to make a difference to millions of Indians ' . He said, ' that ' s exactly what I had mind. Let ' s do it. ' The strategy was: while we strengthen our current business, we will use our cash flows to invest in the businesses of the future. That ' s how Infocomm was born.

There is a sense that, in the early 1990s, you missed the bus on the biggest opportunity of the future -- the IT business.

We saw the IT business coming. I lived in Silicon Valley . I knew it was a big opportunity. I mentioned it in a speech in 1995 -- the clear arbitrage opportunity for software development. But for us, it was a question of focus and trade-off.

I was very focussed on building various competencies in Reliance and we were not ready to do two things at the same time. It was a big risk for us to get into IT, especially because it was hugely effort-intensive. In my language, I said we have too much soap on our body and we need to take a bath in the chemicals business.

We had signed a JV with Microsoft, but decided to pass up that opportunity. To my mind, I was right. We still needed to build that focus.

So, in the late ' 90s, you zeroed in on telecom, life sciences and retailing. . .

Actually, my father was very keen on the agri-business. He said, that is the real big business in India . We looked at three or four businesses. We got into life sciences as a defence mechanism in the late ' 90s. In 1996-97, we were big in plastics already when Dow announced that they would make plastics from E Coli.

It looked like our business would be ruined because we would buy naphtha and these guys would make plastics from salt and water. We quickly put four or five guys together to understand what Dow Chemicals was doing. That is when we started the industrial biotech business.

Then, we stumbled on human and plant biotech. We were fortunate to have some good people and decided that Reliance can build this business over 5-10 years without any great revenue pressures. In the mainstream business, there was telecom or what I call infocomm.

We got into telecom in the ' 90s by bidding for cellular licences. But I felt that the real value is in the convergence of information and communication; pure communication will not deliver a sustainable value; that is why we called ourselves infocomm. It was learning a whole new domain. We brought in experts from the outside but we essentially did it with proven Reliance people.

And then you got into retailing. . .

Within organised retailing, we are really talking of agri-based retailing. For a variety of reasons, our economy did not get a chance to develop a sustainable value chain in the foods business.

The US and Europe saw large players in foods by the ' 50s and ' 60s; but in India , food has always been a disorganised, fragmented value chain. We believe that India ' s purchasing power will be food-dominated. The first thing we need is safe to eat food that will, in turn, meet many other needs.

But all kinds of mindless legislation remains in place and other players like Hindustan Lever have tried to get around it without real success.

True. But we are in a different era. It is easier for people to see the value proposition -- 28% of our GDP comes from agriculture, but 60% of the people depend on it. So, if we want to make a difference to this 60%, we will have to bring agriculture to its true potential.

Having looked at it obsessively for the past year, I feel that we can convert all our disadvantages into an opportunity. We have fragmented landholdings; but we can integrate that with technology. With proper inputs, there is no reason why Indian farmers cannot become world-class. What is missing? It is distribution.

We now have an opportunity to straightway catch the next wave of distribution logistics. We don ' t have to go through what the world went through and we can build what even the US will not have by 2010. That is possible today. In terms of sheer money, it may take Rs 25,000 crore (Rs 250 billion).

In the earlier days, it was impossible for corporates to think of this. Today, it is possible for the world to finance it and for you to execute a distribution network. We are not big believers in contract farming. So we have removed the ' r ' out of cont(r)act farming. I believe that everyone should be able to relate to market economy. If you produce something, you should be able to sell it at a market price.

What is the model that will deliver your vision?

We are working at putting the most modern technology in farms at Indian costs. I always say whatever the US implements in dollars we should be able to do it at exchange rate of Rs 10, then we would be globally competitive.

When we start off, this looks impossible. Then we think through it, value-engineer it and come close to it. That is the cost part. Then comes the quality issue. While we are working at improving the offering to the Indian consumer, we are ultimately interested in connecting the Indian farmer to the global market. Global consumers have to accept Indian agricultural products.

We all know India has a huge competitive advantage -- we have the largest arable land, focused sunshine, sensible utilisation of water in 30% of land. The question is what should we do to make the US market -- the most difficult market in the world -- accept our produce. For that, we need traceability. It is a simple technology, which we are giving the farmers. It needs certification and verification processes -- to us it is like a process plant. You can then get the output, sort it and grade it.

At what point to grade is a decision that Reliance will make, at the farm level or at the intermediary ' s level. . . what is least-cost, what works, what everybody is comfortable with.

Coarse products are easy, the problem with fresh produce is perishability -- it becomes worthless in seven days. That is why farmers are not producing fresh. That is the tallest mountain for us to climb. . . to put in place distribution and logistics to handle fresh. If we can send fresh produce through technology and distribution from any farm in India to anywhere in the world at their quality standards, then imagine the arbitrage.

What is the arbitrage? Can you give us an example.

We talked of IT. What is IT? It is the arbitrage between the per hour rate in the US and India . We have gone from zero to $20 billion in exporting software, employing about 1 million people in 10 years. These million people changed the brand of India , consumption pattern and gave us the confidence that we can do everything.

The arbitrage has narrowed but is still there. It will disappear in a few decades by which time our software exports may be $100 billion. From a million people, it will benefit 10 million people. If that is what has happened in software, imagine what will happen in agriculture.

Is there this kind of arbitrage in agriculture?

Let me give you some numbers. Take potatoes, the most common food across the world. From Bill Gates to my driver, everybody eats potatoes. Now, plot the prices. Farmers in Uttar Pradesh and Bihar get about Rs 4-5 a kilo; in the Middle East , the wholesale price is about Rs 25-30 a kilo. In the US , Sam ' s Club, it is Rs 90 a kilo. In Europe , it is Rs 110 a kilo. The arbitrage is 1:20. If we get our produce right, and if the US market is opened up, you will be surprised how quickly we reach $20 billion.

The food market is much bigger than the software services market. And the money goes straight into the hands of millions of farmers. The spinoffs are enormous -- jobs, houses, durables, a whole new consumption boom will start in rural areas.

What about the front end -- the retailing sector?

The most employment-intensive industry in the world is retail and our next generation needs these jobs. India has a strategy for the next generation of doctors, engineers and biotech graduates, etc. But for the country as a whole, what we need to resolve is how to create sensible jobs for undergraduates and or those even less educated.

Organised retail alone can absorb these people in large numbers. We estimate about 1.5 million jobs from this sector over the next three years. In the process, we will reduce the cost to consumers by 20% and increase the efficiency of farmers thrice over. Farm incomes can go up 600% to 900% over the next few years from the current base.

By higher prices or higher output?

Higher output. The country produces 150 million tonnes of fresh produce today. We can go to 300-400 million tonnes fairly quickly over a few crop cycles, as long as we can move those millions through the system and have world-class quality.

This means that when you go to the market -- doesn ' t matter whether it is Reliance or Bharti -- you should have the confidence that you are buying quality and it is safe to eat. After meeting the needs of Indian consumers, how do we take advantage in fresh through exports and value added industry such as processing?

It ' s really a yield-productivity-distribution story that we are involved with right now. Our strategy is fundamentally different from the others.

In what sense?

Most other retailers come in when purchasing power has developed. That ' s what Wal-Mart did in China . India is also at that inflection point, so retail chains would come in and start in the urban areas and move backward.

Ours is a diametrically opposite strategy. We are driven by creating purchasing power first. The farmers will have purchasing power and their staff will have purchasing power. Today, the farmer with two acres of land has five people in his family. It is like running a factory, but one that is only running 20% of the time because 80% of the time he cannot sell his products.

He doesn ' t have the inputs to produce the right quality. What we have to do is win his trust and bring him to his true potential so that he can run his two acres at 90% and increase his income by nine times. Once we do it, it is such a big market that there is a place for at least 5-6 players like us. We can ' t do it all alone. But we can show the way.

It is like in telecom; when we said we will get 10 million phone users, a lot of people laughed. Today, there are 3-4 guys who are getting a million customers a month. We think exactly the same needs to happen in farms. When that happens, we will have created purchasing power.

We will start at the bottom and sell them their first cooking range, first washing machine, first bed -- whatever is needed to improve quality of life. All this will create sustainable employment. That is really retail as we see it. We need to execute it well and prove some of these hypotheses. We might be wrong in some of them so we will have to fine tune, adjust and learn.

We only have a superficial knowledge about the true rural India -- the power structure, how to operate in tehsils, what are their true concerns, etc. But we think we can significantly change purchasing power and how we live. That ' s what motivates us.

How far have your progressed in your plans?

We have pilot projects in Andhra Pradesh, Punjab and West Bengal . In all three places, we are very encouraged. There will be some big learning involved but the potential undoubtedly exists.

You also have massive plans for SEZs. What is the thought process there?

The logic of SEZ is simple. India is long on talent and we need to create as many jobs as possible in manufacturing and services.

India 's land bank is about 750-800 million acres. Out of this, 500 million acres can be potentially farmed, but today only 300-350 million is arable and used for agriculture. We need to bring the remaining 150 million acres into productive use. More than 100 million households rely on this land base. India is creating 800,000 engineers a year and 400,00-500,000 semi-professionals. So we will bring in about 2 million professionals into the workforce annually over the next 20 years. We need to create jobs for them.

Government jobs and self-employment in manufacturing are not enough. It is large companies that create employment. That ' s the reality. So we have the supply of talent that can potentially be of the highest quality and lowest cost for 10 years and we also have large markets here.

What is missing? It is integrated infrastructure and a reasonable assurance of facilities that are good for at least 10 years. My target company would want to come to India but operate near the big metros. This is the example that you learn from Shanghai or Shenzen. That is where our SEZs with integrated infrastructure come in -- they provide an integrated airport, seaport, transportation, power and housing -- all at sensible costs.

When I put out a comparative chart, I should be able to tell big employers: this is how we compare with Singapore , Dubai , Shenzhen or Malaysia and Korea . On every parameter, I should beat others in cost and quality of infrastructure. India might be short of infrastructure but here you have guaranteed infrastructure and talent.

You are near Bombay and Delhi and have access to the Indian market and global markets. So ours is an employment-led SEZ. The strategy is first to get the employer. I think we can create 5 million jobs in each of the two 25,000-acre SEZs. But we need many more just to make sure that most of our educated youth is occupied.

The criticism is that SEzs are really land plays. . .

Most people don ' t understand that the residential commercial piece is also a big cost element in SEZs. For employers to attract and retain talent, India has to be almost as attractive as the US . So I have to provide for the cost of living -- housing, shopping environment and everything else exactly like the US , but at an Indian cost.

We have a big talent pool in the US and they are coming back with huge enthusiasm. For our agri-business, we are now bringing back a lot of talented Indians from the US who have worked in Wholesale Foods, Kraft, etc.

We offer to protect their savings in a job here. If you earn $100,000 a year there, you also spend $80,000 and save $15,000-$20,000. We say, if you work for us in India , we will ensure you save $15,000 dollars a year and are part of something exciting without a loss to you.

But this doesn ' t work without a scheme. If you ask me to build a power plant, I cannot give that power at 3 cents or 4 cents, unless I put up a 2000 MW project. It ' s the same for an airport, seaport and all the other stuff. You need to spread costs over a sensible size to keep unit costs low.

These projects will take time to fructify. When do you expect to start getting returns?

Both agri-business and SEZs will make a sustainable return in the long run and we have a strong enough balance sheet to sustain these. At the end of the day, it will leave us with the satisfaction of having tried to show the way. The easiest thing for me is to go to London and New York , sit in a hotel, talk to investment bankers and buy 10 companies.

Are you going to do that too?

(Laughs) Depends on the value we get and what excites us. But that ' s the easy stuff. What does it take? It ' s deal-making followed by a PR pitch to justify it. That doesn ' t give me the same satisfaction: of saying that we tried our hardest to blaze a new trail or change the status quo. There are 300 to 400 of us who think the same way.

Young people want to go to Punjab and stay there for a month to figure out what works. In telecom, when we said we would go into six lakh villages, a lot of our friends thought it ' s all talk. Even the regulator was sceptical. Today, it is rural areas that are making more money.

I have noticed that talent is automatically motivated by larger goals and some of the brightest people want to do things that are different. After we hire from the IIMs and IITs every year, we run them through a six-month induction programme where we teach them the Reliance way and let them choose where they want to work through a competitive framework.

Each business makes a presentation. In the ' 90s, finance and treasury was the in-thing. Then, it was marketing. In the last two years, most bright young people want to work in rural areas. This is a big mindset change.

In retailing, they are saying, we don ' t want to do merchandising; we want to create those rural markets. In that sense, it is great fun. I always tell my young guys, we are going on an expedition together. When you do that we need to support each other because we can get lost quickly.

In this wide canvass, aren ' t you looking at the education sector?

Education is one of the many services we aim to offer. I personally worked for three months on education and healthcare as part of Prime Minister Vajpayee ' s advisory. It is a tougher mountain to climb.

Education is the first aspiration of Indians, no matter what the prosperity level. In that sense, you have a ready customer.

(Laughs) To learn what you said, we spent crores of rupees. After our restructuring, we wondered what we should be getting into and got the best brains together to visualise where the big opportunities are. We studied what people want to spend their money on at all income levels and in different geographies.

People first want to spend money on food -- that is common across the world. The second, in India , is education. In many parts of the world, it comes way down the list of priorities. So, there is a huge opportunity.

What has been your best investment so far?

Our best investment has been in technology and in developing skills. For instance, we invested Rs300 crore in technology that gave us unparalleled transparency and accountability within the organisation.

It allows us to spend Rs 40,000 crore (Rs 400 billion) a year and sleep in peace. We were among the first to introduce videoconferencing in India . In the 80s, we invested in helicopters to go to Patalganga to save time. People saw it as flashy lifestyle. For us, it was facilitating investments.

The other big investment we are now making is in talent. We are developing a culture of creativity that will, in turn, create critical product-service differentials. You must see our life sciences business to appreciate this. Another way to say this is that we are investing to build the skills and experience of our people so that they can then believe in their conviction, take risks and deliver results. Let me also answer the flipside.

We have not invested well in marketing ourselves. It is partly because of my trait. I believe that if my conviction is right, I will not need to go and explain myself to anyone. I believed that ultimately everyone will figure out what you are. We are changing this approach.