POPULATION Everywhere

July 11th, mark the day, is the World Population Day. It seeks to raise awareness of global population issues.

What do you think about this? Population is a good thing or bad?? The world over, it is generally believed that increase in population results in decrease of standard of living. True. You have one more person to share your resources.
it is is like I have Rs. 100/- and will divide equally amongst everyone.( Well, i know it is not a socialist society we live in). Now if the population is 100, each one gets Rs.1/-. great. If the population was 125 rather, each one would get Rs. .80. That is a good 20% less than what they were getting earlier. So, obviously on the outset it seems the increase in population is a bad thing. I get lesser to live.

What would you do? What would your reaction be? Would you dash out onto the streets excitedly, thanking God and start celebrating the arrival of an extra eighteen million people bringing with them long-awaited economic prosperity? Or would you go into some kind of a panic and perhaps start thinking of applying for a permanent residence in neighbouring Bangladesh?

In the mid-1970s, India was so worried about its explosive population growth that policemen and officials travelled to villages to sterilise men, who hid in sugar cane fields or climbed trees to avoid vasectomies.
School teachers, under pressure to meet family planning targets given to them by the government, forced fathers of their students to sterilise, before a public outcry drove authorities to abandon these desperate attempts.

Nearly three decades on, a new, non-coercive policy -- emphasising education of women and health care rather than demographic control -- has thrown up surprising results.

Population growth has slowed from four percent in the 1960s to about 1.7 percent now, fuelling hopes of stable growth by the middle of the century in a country with the world's second largest population at 1.1 billion people. (source:Financial Express)

Now i would like to believe optimistically that population growth could turn out to be a boon to the economy, one of the fastest growing in the world. Since half of India's population is younger than 25, it gives the country a potential edge over China, where an ageing population -- the result of a one-child policy – could slow its economy by 2030.

It is an advantage for India now because the country is entering the demographic dividend phase while China is exiting it.

Demographic dividend refers to a period -- usually 20 to 30 years -- when a greater proportion of people are working, which cuts spending on dependants, aiding economic growth.

Well, like all good things in life, there is a catch. Whether India can benefit from its young population will depend on economic development and equitable social development. Education will sure play a very important rule, and equitable growth from all corners would ensure benefit-ting the whole nation in general, rather than just increasing the rich-poor divide.

Don't get me wrong, i am a staunch supporter of capitalism, and survival of the fittest theory, what i am trying to emphatize is the importance of opportunities that should be given to the lower strata such that it becomes a level playing field.


Until now, the world blamed India for its huge population, but now it could envy it.

The above article was inspired from this ad, being shown in Delhi metro.

On an ending note, i would like to make clear, that the question about population growth and its relationship to economic growth and development has bedevilled economists for decades, if not centuries, and it is not a yes-no answer to it. And of-course, this phenomena, which i am considering a boon now, could turn into a bane in no time, if the growth from now on is not controlled, and the socio-economic divide just keeps increasing.

Real Estate Crisis - A close look

This blog is named COLLEGIAN. College life is meant to be fun, adventure, happening, thrilling, falls.. everything. yeah! a little bit of acads. But well, COLLEGIAN remains away from that. So, you don't see any gyan here(is it?)

Here i am posting a mail i recently received from a senior - Manan Gupta, about the real estate prices crisis in US. It is explained in a very simple way, telling why it happened at all.

Do read it carefully to get the gist.

Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.

1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.

2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.

* The net asset of the country now = 3 dollars.

3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.

*A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B sold his land and got 2 dollars, so his net asset is 2 dollars.
* C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
* Thus, the net asset of the country = 4 dollars.

4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.

* B loaned 2 dollars to A. So his net asset is 2 dollars.
* C now has the 2 coins. His net asset is also 2 dollars.
* The net asset of the country = 5 dollars. A bubble is building up.

(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.

* As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
* B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
* C loaned 2 dollars to B, so his net asset is 2 dollars.

* The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.

(6) Everybody has made money and everybody felt happy and prosperous.

(7) One day an evil wind blew, and an evil thought came to C's mind. "Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more."

(8) A also thought the same way.

(9) Nobody wanted to buy land anymore.

* So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
* B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
* C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.
* The net asset of the country = 3 dollars again.

(10) So, who has stolen the 3 dollars from the country ? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B's net asset is still 2 dollars, his heart is palpitating.

(11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.

* A owns the 2 coins, his net asset is 2 dollars.
* B is bankrupt, his net asset is 0 dollar. ( he lost everything )
* C got no choice but end up with a land worth only 1 dollar

* The net asset of the country = 3 dollars.

************ **End of the story; ************

BUT,

There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -

(1) When a bubble is building up, the debt of individuals to one another in a country is also building up.

(2) This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island's own currency. Hence, there is no net loss.

(3) An over-damped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar.

(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.

(5) If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.

(6) When the bubble was in the growing phase, everybody made money.

(7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.

(8) As in the case of land, the above phenomenon applies to stocks as well.

(9) The actual worth of land or stocks depend largely on psychology


Hope you enjoyed the short story, and also learnt something from it.

Indian MBA.. what ??

Now here.. one of my fren pointed out my article on INDIANMBA.com and i was shocked. I have never written for them!!
On checking out, the same rediff article found its way there..







n these ppl, din even think of letting me know. Ok, agreed. Once the article is printed on rediff it is their property, but atleast a courtesy mail( its free!), would have shown some concern!
whateva!!

Have mid terms beginning from 2morrow.. n gotta still start FinMan. Wait! First lemme refill my can of pepsi!!

One more on Rediff

One more of my articles on rediff. this time it is on tricks to nail the GDPI for entrance to top B Schools in the country
last time over it was on how to crack CAT.

So i guess, to complete the trilogy like most filmakers and even novelists these days do, my next article should be " HOW TO SURVIVE IN A B SCHOOL?".. Aah! lets c.. time will tell!

In the mean time, you can read my article out here



and well for the details on my previous article..