Nagpur- Connecting India to the World

Studying in NITIE, the hub and spoke models used to be one of the favourites in all supply chain models we discussed and developed. In all these models concerning India, Nagpur always somehow held a special charm. If you take a look at any Indian map, the city of oranges was clearly the heart of the country. So whether it be B School competitions, case studies or paper presentations, any supply chain model regarding India could hardly ignore Nagpur.

What seemed like a B School ideal at that time, however is today fast turning into reality. Nagpur is all set to become India's gateway to the world. Already investments worth several millions (if not billions) are pouring into the city. At the center of this transformation is the upcoming MIHAN or Multi-Modal International Hub Airport. This Hub is expected to make Nagpur the center of all domestic as well as international cargo movements. This airport of international standards will be supplemented by a road and rail terminal coming up right next door. The investor confidence on the city's potential is also tremendous. Boeing has already committed to building a $ 100 million Maintainence, Repair and Operational (MRO) hub in Nagpur. That the civil aviation minister, Praful Patel as well as Mahrashtras CM VilasRao Deshmukh are both from Nagpur, should have probably helped in no small measure though. Domestic investors seem to be bullish too, with SICAL Logistics leading a consortium to setup the rail terminal as well as a world class warehousing facility.

Nagpur already is a center of the Golden Quadrilateral (GQ) with four lane highways connecting it to delhi and Bangalore. A host of companies have already set up shop here, with a new IT park proposed to be built by Shapoorji Pallonji also expected to come up soon. With so much of activity Nagpur is surely set to scale new heights to truly become the Hub of the country. However what gives the most of the most confidence is that MIHAN is being led by R C Sinha, presumably one of the most hard working and sincere beuracrats in the country today. Another Sreedharan in the making? Only time will tell.

Worst paid Jobs!!!

A recent survey from Mercer says that IT Managers in India are amongst the worst paid in the world. The average salary in India is around 25,000 USD, faring better than only a few countries like Vietnam, Bulgaria and Philippines. While ET and other newspapers were quick to jump to the news they failed to highlight the difference in Purchasing Power Parity between the top paying countries and India, creating an impression that those in IT are highly underpaid.
Now if we assume the PPP between India and US to be roughly between 6 to 8 times then the salary figure turns out to be roughly between 150,000 and 200,000 USD, much more than the average IT salary in US (USD 107,500 as per the survey). If we take the Big Mac Index however the figures dont look that flattering however. The Big Mac Index as per Rashmi Bansal's article would be around 2.64 . That would mean roughly a figure of around 66,000 USD for Indian IT managers. However considering that the Economists itself omits India from the Big Mac Index, I wouldnt put too much faith in the figure.
The survey is however interesting in other aspects, especially when comparing Europe vis a vis N America for IT employees working on a short-medium term basis (in which case the PPP I guess wudnt matter that much). US and Canada are ranked 6th and 8th as per the report while the figures for Switzerland at the top of the table are around 141,000 USD (around 30% more than US). The next 4 slots are occupied by Denmark,Belgium,UK and Ireland, all pointing to the fact that Europe seems to be better destination for IT guys compared to US, at least as far as pay is concerned. Also with the falling rates of USD, Europe seems to be a better bet in the future too.
Another interesting finding in the survey is that the gap between the pay of Junior staff in India is comparably higher than US and Europe. The reason I guess is the huge number of graduates being hired by It companies at lower levels. Having relatively low skills and the necessity of imparting heavy trainings at this level, without which there is very low chance of them jumping ship, allows firms to retain them at low wages. However once they gain considerable work experience in 2-3 years it becomes relatively tough to hold them and that is when their Sals start rising rapidly. Consider this, a person with 4-5 years of experience in most IT firm earns 2.5 to 3 times more than the entry level sals today (which itself is higher than what they started out with). This is something relatively rare in other mature industries like manufacturing for example.However with the huge hirings taken place in the last 2-3 years, i guess the IT industry would also be in sync with other industries pretty soon.