Indophiles

2006-05-23T18:02:00.000+08:00

Sabeer's dream city - Nano City

Sabeer Bhatia ( Hotmail fame) dreams big . This time its really big. His next exciting project is to build a Nano city near Gurgaon. In a Q&A with Red Herring he details his plans:

In April, he announced that he will invest time (and possibly money) in a wide-reaching business venture in the state of Haryana, near New Delhi in northern India. Dubbed “Nano City,” the public-private partnership aims to build a Silicon Valley-inspired city where entrepreneurs, technology workers, and venture capitalists co-exist in a bid to spur innovation.The details are still being worked out, but Nano City will neighbor the town of Gurgaon, where more than 20 percent of Fortune 500 companies have already set up shop. Mr. Bhatia will serve as “chief visionary and rainmaker” of the project, helping with everything from conceptualization and city planning to marketing the city to the rest of the world.

Here is the URL to the interview.

2006-01-25T07:10:00.000+08:00

Do You Want Fries With That?

Government has relaxed retail FDI norms for single brands! Though the move is a compromise, it still is a significant step forward. So far International retailers have been able to operate in India only through franchise arrangements with local partners. We sure can see many more Indians queuing up for Big McMaharaja with extra cheese, large fries and Diet Coke!!

However, it is too early to celebrate on the arrival of your favourite Mocha. The devil lies in the detail - got to wait till the policy paper is out. This may very well be just a symbolic announcement given the on-going Davos summit, which has "India Everywhere" spin to it. (What a waste of tax payers’ money). More on this sham later.

It is a disappointment not to see Wall-Mart in India. It is true that one shot liberalisation would have affected the so called mom-and-pop stores. However, government could have opened retail market, at least, in tier 1 cities. Indian leftists, together with India’s over protected industrial houses, opposed opening up. But wouldn’t Reliance getting into retail destroy mom-and-pop stores? Why should pantaloon be permitted to run its retail venture (Big Bazaar) with a 7% margin, when global margin is about 2-3%? Where are the so called "Marxists/Leninists/Maoists", who fight for the rights of Proletariats?

I am involved in running vegetarian restaurants in Mysore and I gladly welcome the new competition. Instead of customers getting "dining out" fatigue, new competition will give them more options and variety. This helps us too.

2006-01-22T18:04:00.000+08:00

HCL Tech bags Rs 1,500-cr deal from European co — To provide total outsourcing services to DSG

A small step for HCL but a giant leap for Indian Outsourcing Industry.Indian firms gain a foothold into the "total outsourcing services" .

BusinessLine reports, "IN what is being billed as the biggest contract won by an Indian IT company, HCL Technologies has bagged a Rs 1,500-crore ($333 million) five-year co-sourcing deal to provide total outsourcing services to Europe's leading electrical retailer, DSG International.

"This is the biggest deal signed by an Indian IT company, and is also the first total IT outsourcing deal involving the taking over of a department of a large multi-billion dollar corporation. This is also the largest infrastructure management deal ever signed," said Mr Vineet Nayar, President, HCL Technologies.

The outsourcing deal would entail system development, application delivery and infrastructure support, industry sources said.

2006-01-19T22:59:00.000+08:00

Child rights - the first steps

The young nation finally wakes up to protect its young. If all goes well, The Child rights bill would become law with the pending presidential nod. 430 million Indians (Children) would be covered by this bill. Its incredible that it has taken us this long to formulate something like this. But at least now the intent is right. But can it be implemented ? That is another huge challenge. But If India wants to become a "superpower" it cannot ignore the young - the leaders of tomorrow.

Outlook writes, " India's future—its 430 million children—can finally look forward to being treated as individuals and granted their due rights.

This will be ensured by the Commission for Protection of Child Rights Bill 2005, passed in Parliament in December last year. The commission is slated to become functional from March this year, post a formal presidential nod. It will examine and review the safeguards for the protection of child rights and look into matters relating to children in need of special care and protection. This will include those in distress, in conflict with law, juvenile delinquents, children without family and children of prisoners. It will recommend appropriate remedial measures, all of which have been spelt out for the first time in the bill. The commission also has the mandate to examine all factors that curtail the rights of children affected by terrorism, communal violence, riots, natural disaster, domestic violence, HIV/AIDS and human trafficking.

And rumour has it that it has acted now fearing censure from the UN. Being a signatory to the Convention on the Rights of the Child on December 11, 1992, India was bound to come out with an action plan. But everyone working with children is agreed that the bill is a positive first step.Child rights activists have all along confronted the government with startling statistics on the status of Indian children. Nearly 17 million children have to work for a living, many of them in hazardous environments. Close to 30 per cent of the two million sex workers are under-age. Yet only 3 per cent of the GDP goes towards welfare schemes targeted at children. Less than half of India's 430 million children go to schools. Faced with the appalling statistics, the child development department under the Union ministry of human resources and development has finally done something."

2006-01-19T08:16:00.000+08:00

India launches IT workers register

Will it succeed ? With demand outpacing supply, companies might tend to overlook this. But its a start.

FT reports, " Nasscom, India's software employers’ organisation, launched a nationwide register of IT employees on Wednesday, aimed at preventing security breaches.

The register, believed to be the first of its kind, will include workers’ photographs, fingerprints, signatures, passport numbers, educational backgrounds and employment histories. The database will be voluntary for workers but employers may choose to hire only those on the register.Mr Mehta said he expected 1.3m workers covering 1,000 companies to be registered within 12 to 18 months. Employee data are to be refreshed every five years.

IT companies Satyam Computer Services, Tata Consultancy Services and Mphasis have already mobilised employees to sign up. The database will be monitored by independent background checkers, such as KPMG and Quest Research."

2006-01-17T10:45:00.000+08:00

Mother of all Sibling rivalry ends tomorrow!

Probably one of the most complex financial engineering projects to end a sibling rivalry will be underway tommororw (18th) at 8 am (IST). Indian investment community is on the edge. If one bought 100 RIL shares before 18th, they will be getting five Reliance Energy, seven Reliance Capital and 100 shares each in the two unlisted companies - Reliance Communication Venture (infocom) and Global Fuel Management. However, many people wanted to wait till 18th to buy "pure oil" play RIL. Speculation is rife, some numbers I have noticed: RIL will correct by 200, 250, 275, 300, 350, 400. Going by hysteria and heuristics in Indian financial markets, God only knows which way RIL will go. Regardless, it should be one heck of a price discovery! Finally it will the markets that will divide & allocate wealth between Ambanis!

Log on to BSE and NSE websites to watch the market in action!

2006-01-16T15:20:00.000+08:00

Making a Difference

To make a difference, you do not need money but definitely strong will. Outlook profiles Mr.Amit Hazra who has been striving for more than 25 years to make Kolkata a green city.

" His trees have changed the face of Calcutta's streets. Yet, he prefers to remain in the shade.He’s had to fight court cases and tolerate apathy and indifference to provide a green cover to his decrepit North Calcutta locality. And yet, twenty-six years of toil hasn’t fatigued this ‘green warrior’ who has single-handedly planted and nurtured thousands of trees that now form a green canopy over large parts of Calcutta’s concrete jungle. Especially the arterial Vivekananda Road that now sports large shade trees.

Amit Nath Hazra, 43, embarked on his mission in 1979. A grade IV employee in a private firm, he invests a large portion of his Rs 3,000 salary on Calcutta’s future. "I buy year-old saplings, plant and nurture them," says Hazra. He’s never received any monetary help and has declined awards, preferring to remain anonymous. "I have my share of well-wishers, but my detractors outnumber them," he says nonchalantly.

From the very beginning, he had to face opposition."Many people never understood what I was doing—I was purchasing saplings, digging pits along roads and planting them. For some For some unfathomable reason, people didn’t like me doing it. Under the cover of darkness, they used to destroy the fencings and uproot the saplings. People have even cut down trees that I once planted. Such incidents are painful. These trees are like my children."As Hazra saunters down Vivekananda Road, he points to every tree he has planted. Many are fully grown while others are fledglings. He has constructed concrete benches at the bases of the trees for people to take a short breather.The road is one of the very few in Calcutta that remains cool during the sweltering summer, thanks to the lush green cover courtesy Hazra.

2006-01-15T10:56:00.000+08:00

Chidambaram voted Asia's best FM of 2005

Indian Express reports, "Finance Minister P Chidambaram has been named the Finance Minister of the year 2005 for Asia by Banker magazine for pushing reforms and reining in fiscal deficit.The Financial Times group magazine applauded Chidambaram for his determined pursuit of reforms, but said it is not just that which earned him the award.

According to the magazine, he is unapologetic for the fact that democracy--coalition partners, the Opposition and a free press that all have to be listened to and carried along--is the main reason why reform has not been swifter.In India, successfully making the case for reform is far more of a skill than knowing what reform to seek, the magazine said."

2006-01-11T23:21:00.000+08:00

Lal Bahadur Shastri -- A forgotten man

Jai Jawan, Jai Kisan. Jan 10th was the 40th death anniversary of Lal Bahadur Shastri. 40 years ago he died of a sudden heart attack (under mysterious circumstances) in Tashkent, USSR. A man of utmost simplicity and sincereity, he belonged to those rare tribe of honest,simple politicians.

A man of great integrity, he resigned as the Railway Minister when 144 people died in a train accident in Ariyalur,TN. He led India to its first victory over Pakistan in the 1965 war. The man has almost been forgotten today by the echelons of Congress.

Why, because he lacks the surname Gandhi or is it because he did not have a fair skin ?

2006-01-10T23:14:00.000+08:00

The Orissa problem
If you have not been up to date with orissa and Jarkhand, time for you start monitoring. These are resource rich states attracting interests from companies everywhere. From Posco, BHP billiton, Mittal to Tatas these two states are on everyone’s radar. Following is an excerpt from Business Standard editorial. With Maoists activity increasing in these two states, alarm bells should be ringing at central Govt. No wonder Sonia is visiting Orrisa ASAP.

It is obvious that the Orissa government is to be blamed for the death of 12 tribals last week, following police firing at agitators who were refusing to vacate land required for setting up of steel mills. Surely, it is time the police in all states got equipped and trained to deal with such situations in a non-lethal manner (water cannons and rubber bullets are known solutions). The bigger fault of the government is that while it acquired 12,000 acres of land between 1992 and 1994 (at presumably the then prevailing market prices), it used only 5,000 acres for two steel mills and allowed tribals who had sold the land to remain in situ, or to return as encroachers. A decade later, when the government took land that it had bought for Rs 37,000 an acre and sold it to Tata Steel at Rs 350,000 an acre, protests were inevitable when evictions began.

State governments need to work out policies designed to deal with dislocation and the downstream resettlement requirements. In the days when large tracts of land were acquired primarily for public sector projects, one commonly used option was to offer a job for one member of each family that gave up its land, but this is not a solution that can be forced on private sector investors. The problem gets compounded when it is known that farmers whose land is acquired do not know how to deal with the cash they get and often use it unwisely, so that they are soon left with neither land nor cash.

Systemic solution, ironically, is to increase the pace of industrial growth so that more jobs get created for anyone who considers moving from the primary to the tertiary sector. Such absorption of the peasantry has been one of the essential elements of the industrialisation process over three centuries, but has not happened to any significant degree in India because industrialisation itself has been slow and halting. Apart from the fact that it is not a democracy, one of the reasons why China has been able to get so many millions of people off the land in recent decades is that industrial growth has made such movement lucrative as well.

2006-01-10T12:55:00.000+08:00

Rahul Dravid on "Walk the Talk"

There are enough reasons to admire Rahul Dravid. Technically perfect,cool headed and one of the best batsmen of modern era. I also like the way he conducts himself on and off the field. If there should be a role model for young cricketers , look no beyond Dravid.

Here is his Interview on Walk the talk with Shekar Gupta (IE , Editor) . He couldn't have answered the questions better.

2006-01-07T09:14:00.000+08:00

Only in India!
Edit pictures, get scammed? Yet another innovative con art!
The Hindu Business line carries this report!

EDIT seven pictures on Adobe Photoshop, a common software, and walk away with Rs 7,500 per month. Too good to be true? For about 5,100 people, mostly students in Ahmedabad, it was exactly that as they fell prey to a Ponzi scheme that allegedly duped them all to the tune of Rs 5 crore. According to a complaint filed with the Ahmedabad police on Wednesday, as many as 5,100 persons have allegedly been duped by a company claiming to be engaged in carrying out computer graphics services.

The catch, however, was that a `security deposit' of Rs 10,000 was to be made by those taking `assignments', as the CDs contained pictures of jewellery that were proprietary designs of the company's client. One individual was given only one CD per month, but the company itself encouraged people to register under different names. "They did not have any problems if we registered under several names. All that we had to do was to edit pictures of jewellery and return them within a month. I thought if I invested Rs 50,000 once as registration, I would be making almost that much money every month," said Mr Piyush, one of the complainants.

For several months, the company made prompt payments to participants in the scheme and encouraged them to spread the word around. The problem arose when payment cheques issued by it started bouncing for insufficient funds. The police have made one arrest in this connection and four others are absconding.

Phew, what a scheme! Almost every month we hear about yet another "Blade" company doing an vanishing act but we still fall for these easy money schemes! Some of the most recent schemes in Bangalore last year were "Trust Finance" (Operated a deal that was tooooooo good to be true, yeah rightly the name, trust!) "Vini Vinc Inc." (10% per month of your deposit. it had even promised depositors shares when it starts a budget carrier to Dubai !!). "Guru Teak" (yet another teak venture. It had even started its own Kannada news paper!) Lastly "Japan Life in India" (promised a Japanese life for those who successfully sold their schemes)!

2006-01-06T23:54:00.000+08:00

The Week - 20 people to watch out for

The Week makes a brave prediction about 20 people who will leave an indelible mark in 2006. While the list figures some well known names like " P. Chidambaram,Shashi Tharoor, Mahendra Singh Dhoni,Priyanka Chopra,D. Sivanandhan, Vishal Gondal, Deepika Padukone" , there are some bold predictions like Shashank Subramaniam ( He was hailed as a prodigy then slipped down from public memory years ago), Manasi Scott,Shiv Kapur, Kiran Desai,Raghav Bahl.

Let us wait and watch .

2006-01-05T23:28:00.000+08:00

India eases policy on Chinese investment

FT reports, India will consider more sympathetically Chinese bids to take part in developing the country’s infrastructure – a relaxation Indian shipping industry executives say has paved the way for Hong Kong-based Hutchison Port Holdings to participate in major container port projects in Mumbai and Chennai. The world’s largest container-port operator’s original bid to win a role in a $270m container terminal development in Mumbai had been blocked by Indian defence and intelligence agencies worried about the security implications. Sanjaya Baru, a senior advisor to Manmohan Singh, India’s prime minister, on Wednesday told the Financial Times that “India would welcome Chinese involvement in infrastructure development” but denied making a specific reference to Hutchison Ports, as cited in news agency reports.

Indian shipping industry executives said, however, that the government’s softer position on Chinese investment in India had already yielded results, with an effective reinstatement of Hutchison Ports Holdings and Taiwan’s Evergreen Marine as bidders to develop the Mumbai offshore container port.

Hutchison Port, controlled by billionaire Li Ka-shing, said it had “never received any communications from the relevant authorities” about any security ban. Shipping sources say Hutchison Ports would now be in a position to reactivate its bid to develop a second container port in the southern city of Chennai, in conjunction with Larsen & Toubro, India’s largest engineering and company. Mr Baru’s warmer tone on Chinese infrastructure investment comes after several years of hostility to potential Chinese investment.

With rising trade..some animosity has reduced between the Elephant and the Dragon. Zillionaire Li ka-shing previously had problem with US Govt too..He failed to buy global crossing. He was perceived to be too close to communist party leadership. But still cant figure out why taiwanese investment was beign kept out! you dont want chinese investment for security reasons but dont want taiwanese investment not to annoy China!

2006-01-03T23:03:00.000+08:00

Should there be job quotas in the private sector?

Rediff has a messageboard stating , " The government seems to be getting serious about reserving jobs for backward castes in private sector companies.In the latest development, Union Social Justice Minister Meira Kumar is said to have met Indian industry leaders and hinted that since the government could impose job reservation on the private sector by changing the law, it would be best for corporates to embrace job quotas voluntarily.

But this has always been a very controversial issue. Some say job quotas are needed in the private sector to help the backward castes prosper. Others say quotas will badly hit the private sector's efficiency."

I am surprised that for every step we take forward, we tend to do (or at least think) something like this. Quotas of any kind are generally dangerous and particularly one based on caste and that too in private enterprises (which are governed by free market forces) is ludicrous .I beg the politicians to restrict their antics to SOE's and not with the private sector.

2006-01-02T18:04:00.000+08:00

Asia brimming with Confidence -- Singapore PM

Hindu reports, " Asia "brims with confidence and dynamism," as it is "powered by the twin engines of China and India," according to Singapore Prime Minister Lee Hsien Loong.

In a New Year message, Mr. Lee said the overall economic environment in Asia stayed favourable in the year gone by. In this milieu, the City-State's external trade grew strongly by 14 per cent in 2005, "helped by our expanding network of free trade agreements," he said, citing in particular the Comprehensive Economic Cooperation Agreement (CECA), which Singapore signed with India last June.

2006-01-01T00:34:00.000+08:00

Consumerism and 4 different Indias

Wallet Monitor, a study conducted by Henley Centre and IMRB International has come up with this new hypothesis. According to them, consumer goods market has 4 Indias:

Global India: An estimated 1.2 million affluent households sit atop the Indian income and consumption pyramid. This is global India — only a third as large as the comparable segment in China but expanding by more than 20% a year. These households buy branded products, vacation abroad, own a number of cars and television sets. They are largely concentrated in the top eight cities.
Struggling India and Destitute India: At the bottom of the pyramid are the large but poor segments. Struggling India comprises more than 110 million households earning $1,500 to $4,000 a year ($7,500 to $20,000, adjusted for purchasing-power parity) and destitute India comprises 40 million households that are still poorer earning less than $1,500 a year. For the most part, people in these segments are able to afford only basic necessities.
Aspiring India: Occupying the central section of the pyramid are 40 million middle-income households or the Aspiring India. Often, it is this section that is the growth driver for any consumer goods company as it purchases more than just the basics. In this India, a typical family comprises five people, lives in a city, and has an educated head of household who is an employee or a small-business owner earning $4,000 to $10,000 a year ($20,000 to $45,000 adjusted for purchasing-power parity). Such a family often lives in a small apartment, has a bank account, and owns a television set, a refrigerator, and a motorcycle or a small car. This new consumer group, growing by about 10% a year, is expected to comprise 65 million households by 2010.

Courtesy: Financial Express

2005-12-31T10:35:00.000+08:00

Happy New Year !

Happy new year everyone ! Hope the new year ushers joy and peace to everyone.

2005-12-30T22:46:00.000+08:00

$1 billion deal: Maxis bags 74% of Aircel

The Foreign telcos are coming - calling. Maxis has ventured into India with a majority stake in an Indian Telco , thanks to the recent Govt initiative of raising the FDI in Telecom to 74%.

Express reports "Malaysia's biggest cellphone firm, Maxis Communications Bhd, expanded into the fast-growing Indian market on Friday, taking the lead in a $1.08 billion joint-venture takeover of Aircel Ltd. "

2005-12-29T23:30:00.000+08:00

Terror Strikes Bangalore

Mr. B.Raman (Ex-head of the counter-terrorism division of the RAW and many other important positions) has written a quick analysis on the bangalore strike.
INTERNATIONAL TERRORISM MONITOR: PAPER NO.8

I found these points interesting from his analysis:
- The incident has coincided with the reported shifting of Abu Salem, a member of the mafia group headed by Karachi-based Dawood Ibrahim, to Bangalore to undergo a lie detector and other forensic tests

- While LET's activities in Jammu and Kashmir (J&K) and other States of North India are controlled from its headquarters at Muridke, near Lahore, in Pakistan, its activities in Western and South India are controlled by its headquarters in Saudi Arabia and occasionally from Dubai. Its sleeper cells in South India operate either under the name of the LET or under other names such as the Muslim Defence Force (MDF) in Tamil Nadu.

- After the neutralisation of a sleeper cell of the LET in Delhi in March last, the Delhi Police had repeatedly been sounding wake-up calls about the plans of the jihadi terrorists to target IT companies in Bangalore. Media reports have also been speaking of a number of hoax threats addressed to IT companies in Bangalore since March. The recent hoax message of an attempt by the Al Qaeda to blow up the Indian Parliament had also reportedly originated from Tirunelveli in Tamil Nadu, a hotbed of the activities of the Al Ummah, which had organised a number of serial blasts at Coimbatore in Tamil Nadu in February, 1998.

Our Heartfelt condolences to Prof. Puri's loved ones. Terrorists have picked good target and timing. At nights IISc is a ghost town, so it is easy to escape and moreover you have a conference going on (multiple victims). Thank God, execution has gone bad. By the randomness of shooting (50 rounds fired) and indiscriminate discharge of grenades (4), looks like the bastards are not pakistanis/pakistani tranied but locals (with "local" training) who have got nervous.
if there is any leak on investigations, you can find it in these two sites below. Also for people interested on Indian security matters please do visit these two sites regularly.
http://www.satp.org
http://www.saag.org

2005-12-29T13:05:00.000+08:00

Newsweek - India Inc

Newsweek has an article on the rise of India Inc .Its "No longer just an outsourcing hub for low-level jobs, India is luring top American talent and unprecedented new investments by tech giants like Microsoft and Intel.

"Erik Simonsen got his M.B.A. at New York University, but the 28-year-old decided to go half a world away for his internship. He chose Copal Partners, a small technology company near New Delhi over similar companies on the East Coast and in Silicon Valley. "I was drawn to India because while U.S. markets are stagnating, so much is happening here," he explains. "It's a chance to re-experience the dotcom environment of the 1990s. Companies are growing so quickly here that opportunities to take on responsibility are greater."

Universities are responding to the demand for international experience, particularly in emerging Asian markets. Last summer, Yale president Richard Levin took a 12-member team to set up joint ventures with several Indian universities. The Ivy League school will send 30 interns over this year and expects to send 50 next year. It also has 30 faculty collaboration projects underway in a number of subjects ranging from public health, to management and forestry. And this year, Massachusetts Institute of Technology's India program, funded by the National Science Foundation, flew over 28 Ph.D.s to pursue their research in science and economics. "MIT sends students because it's aware of our globalized world," says coordinator Deepti Nijhawan. "But it's a leap of faith."

M.B.A.s aren't the only ones seeking professional experience in India. Emily Hueske, who is researching mutating proteins in mice for her Ph.D., spent two months at the National Center for Biological Sciences in Bangalore. "Our lab at MIT wanted to do the work that this excellent neuroscience lab is doing; I wanted to go because India's religion, food, culture are so different." She valued meeting Indian families, and the "real" people that casual visitors don't see. "It was the most solid work time I had with a specific goal. The lab is supremely set up—different from MIT because it's more conservationist, there's more recycling.

2005-12-28T17:26:00.000+08:00

Changing lifestyles push liquor sales
The Hindu business Line carried this article today
Beer continued to be the favourite drink among the urban youth. Increased purchasing power and changing Indian lifestyles have contributed to its double-digit growth with sales likely to touch 100 million cases this year. The UB group, which has about 45 per cent stake in this market, expects to increase its brewing capacity by 15 per cent taking it to 60 million cases during the year.

This was also the year of the pints and the variants: the 330-ml beer pack was seen as driving sales across the country. Flavoured low alcohol beverages added zest to the market. Whether this will result in a setback to beer consumption (as some industry observers feel) is doubtful, said Mr Bhat. "Beer drinkers may not switch over but women and young people who have been consuming vodka and rum may try these flavoured drinks," he added.
But there has been a quiet but significant growth is the country's wine sales. Sales of imported wines are estimated to be in the region of 1.2 lakh cases per annum, while locally produced wines clocked about 4.5 lakh cases annually.

With per capita beer consumption of 2.3 liters (approx) India has a long way to go. Apart from life style changes and increase in income, there is another reason why Pint is the most fav one: spurious IMFL liquor especially in nip sizes (180 ml). This is the main reason why many people including me left drinking IMFL and switched to pint. In India, Beer is no more a summer drink, it's a all season fare.
Rising wine sales are good news for local vineyards. Although tax structure of wine industry needs to be changed asap. Current Policy treats wine as hard liquor and taxes them accordingly.
Please note: I have been playing my part by drinking about 300 liters per year. But its high time for you guys to take it easy and start downing some beer so that I can cut down (I weigh 100 kilos). Please stop drinking that cool drink (pesticide).

2005-12-27T07:28:00.000+08:00

Leave Delhi, Mumbai airports to AAI: CPM
CPM today asked the government to leave Delhi and Mumbai airport modernisation to the Airports Authority of India (AAI) and develop Greenfield airports in these two metros. Suggesting a prospective plan to develop aviation infrastructure keeping in mind the needs of next 50 years, CPM MP Mohd Salim, who had earlier demanded scrapping of the ongoing bidding process for modernisation of the two airports, asked the government to "give a chance to best professionals and technocrats", he said the latest global survey on world-class airports had shown that six of the top seven airports were in Asia. "Take lessons from them and leave Delhi and Mumbai airports to the AAI". Making a case for developing Greenfield airports in Delhi and Mumbai, Salim said China has developed another airport at Pudong, which is very close to Shanghai.

Indian Express Editorial in reply:
What else can we expect if we have a political system that turns something as simple as airport modernisation into a major controversy? Some politicians are batting for airport unions, some are being bloody-mindedly oppositional, some are trying to jockey for bigger roles in the ruling coalition, some are disguised parliamentary shock troops for corporate interests and some, bless them, have found ideological grievances. Had none of this happened, or had the government enough political muscle to win the contest quickly, Delhi's airport, along with Mumbai's, would have been on a makeover course.

AAI is run like every other sarkari department. But in the proposed modernisation scheme, which may or may not happen, it still calls the equity shots in the joint venture. And two years have passed to come to that 'compromise'. All this would have been a joke had something dreadfully serious not been happening at the Delhi airport, every story, every picture, every TV shot and every phone call back home is telling the world that a self-claimed putative economic super power runs its Capital's airport like a Fourth World, sub-Saharan railway station.

2005-12-25T10:17:00.000+08:00

30% India Inc owned by foreigners. So?

In an opinion piece in the Business Standard, T.N.Ninan analyses the issue and fear of foreign ownership of Indian firms.

He writes, " Should it worry us if 30 per cent of publicly quoted Indian companies are now owned by foreigners—as this newspaper reported earlier this week? My answer would be: No, but watch further developments. There is no cause for worry because the foreign capital is being used for Indian development, and for furthering the prosperity of Indians, so it should be welcomed. After all, the jobs are being created here, taxes are being paid here, and value is being added here in a variety of ways (development of institutionalised capabilities, strong organisations and the like). n macro-economic terms, too, the numbers are not significant. For instance, the total foreign shareholding in Indian companies is about $150 billion. That is large when compared to India’s foreign debt (which is slightly smaller), but not large if seen in the perspective of a total balance sheet of India’s assets and liabilities. Unfortunately, no one in India works out such a balance sheet (some other countries do, like Britain), but it is worth bearing in mind that the value of India’s 300-million strong cattle population is probably equal to that part of the foreign investment (about $40 billion) that is linked to corporate control. Which is why the issue is not the absolute quantum of money or ownership, but political control and regulatory autonomy.

Nevertheless, as long as markets are competitive, there is nothing to fret about. Anyone would wish for powerful Indian brands and successful Indian companies, but this is best left to competitive forces. Official policies designed to develop “national champions” haven’t always worked. Besides, Hindustan Lever’s dominance of the consumer softs market for decades has meant nothing in terms of loss of national autonomy; besides which, home-grown challengers keep popping up and taking chunks of the market.f we are talking of control, about half of the foreign holding in listed Indian companies (about $80 billion) is by portfolio investors who have no interest in control. About half of the rest is again accounted for by other categories, including non-resident Indians and ADRs/GDRs, which are de-linked from control. The foreign ownership that is linked to control is just 8 per cent out of the 30 per cent. This is only counting the listed companies; many large foreign companies are not listed (Coke and Pepsi, GE and Intel). But then, Indian companies have begun to buy companies in other countries, so this is not a one-way street.

In conclusion, even if there is nothing to worry about today, one should watch further developments because India gets less than 10 per cent of the total capital flows to the emerging markets, and these in turn are less than 10 per cent of global capital flows. If the international flows should keep growing rapidly, the issue would be whether we have a corporate sector that is large enough to handle those flows."

2005-12-24T10:32:00.000+08:00

Roche signs Tamiflu deal with Indian company

The healthcare industry has been facing rough weather in the last few years over neglect of poor nations and over-priced drugs in underdeveloped/developing nations. With several govt's forcing these companies to lower prices or allow low cost drug firms to proliferate with little regard for IPO laws -- the industry has had a very tumultous period.

This deal marks a big turning point in the Industry. FT reports that, " Roche, the Swiss pharmaceutical group, has signed a pioneering deal authorising an Indian drugs company to manufacture and sell its antiviral flu medicine Tamiflu under licence in a number of developing countries.Hetero, based in Hyderabad, becomes the second drug company after Shanghai Pharmaceutical Group to receive a sub-licence that will allow it to sell large volumes of Tamiflu at a price that it chooses.

Roche is under growing pressure to meet escalating global demand at low cost for Tamiflu, the best currently available treatment and potential prophylactic against a future bird flu pandemic.The Indian deal is important because for the first time it authorises a partner company to produce and sell Tamiflu not only in its home market – as is the case with Shanghai – but also in other less developed and developing countries.He said Hetero would pay a royalty to Roche but would not elaborate on the amount. He said it was relatively modest, to reflect the fact that Roche must also pay a proportion of the revenues to Gilead, the US company that developed Tamiflu and has the original patents."

2005-12-23T15:34:00.000+08:00

Our MPs pay structure:

Monthly pay Rs 12,000/-
Office expenses 14,000/-
Stationery 5,000/-
Stipendiary 500/- (per day when Parliament is in session)
For a rent of Rs 2000/- (annual) MPs gets a fully furnished apartment in Heart of Delhi
On Foreign junkets:- Free air tickets Plus living expenses (something similar to per day money)
Minimum Pension of Rs 3,000/- (Final amount depends on how many years MP has served his constituency or to put it in another way, for how many years his constituency served him)

SideKicks :-
Personal Assistant pay of Rs 10,000/-
Travel – 40 Indian Airlines Business class tickets per year. Unlimited free first class travel by train for MP, spouse and MP's Assistant.
Phone – 17,000 local calls free
Electricity – 50,000 units free
Water – Free
Free Medicals

The Jackpot: 2 CRORE every year for Area development
courtesy: Vijaya Karnataka

Even with all these benifits some MPs have sold themselves for just Rs 10,000/-
If anybody is eligible for Fringe Benefit Taxes, it should be these scumbags called Members of Parliment.

2005-12-21T22:23:00.000+08:00

Airtel-NDTV -- Indian of the Year

Airtel in partnership with NDTV is Running a "Indian of the Year" contest. Participants can vote for their favourite candidate via SMS. The nominees are : Rahul Dravid, Sania Mirza, Amitabh Bachchan,Aishwarya Rai, Sonia Gandhi,Manmohan Singh,L K Advani,Nitish Kumar,Narayana Murthy,S. Manjunath,Aruna Roy,Laxmi Mittal,Sachin Tendulkar.

I am glad to see Manjunath's name among the nominees. Let integrity be rewarded at least posthumously.

To find out who is chosen as the "Indian of the Year", Watch NDTV 24X7 and NDTV Profit on December 31, 2005.

2005-12-20T15:58:00.000+08:00

India's new export : Video Games

BusinessWeek gushes that Video games could be India's next export. Though the article is way too optimistic , Indiagames is definitely an exciting company. With China's TOM Online,Cisco & Macromedia (Adobe) as investors , the company has done some terrific work (An ex-colleague of mine works there).

2005-12-18T19:52:00.000+08:00

COPS SUGGEST 'DRESS CODE' FOR BPO LADIES

My home town's evening newspaper Star of Mysore carried this report.

"Following the alleged rape and murder of a lady employee of a call centre, the Bangalore Police have suggested dress code for lady employees of call centres. Sources in the Police Department made it clear that their suggestion should not be interpreted as moral policing but only a employee-friendly suggestion, for their own safety.

Avoid dressing up provocatively and showing intimacy with men, particularly in the presence of strangers, G.B. Chebbi, DCP (Central), suggested to the women employees. "All of us should understand that drivers come from a certain socio-economic background. Their standard of education is lesser. These people cannot digest a girl talking to a boy freely in a cosmopolitan society and wearing a particular type of dress. They form certain opinions about the persons based on their dress and behaviour and crime follows, Chebbi said.

"Better avoid such dress and behaviour, just for one's own safety," he advised. Policemen on night beats had often spotted young women and men in awkward positions around call centres. It is better such situations are avoided, Chebbi remarked. "

I am neither a MCP nor a feminist. I think the suggestion is sensible, isn't it? However, the debate will not stop here, it will go to the next level i.e. whether is it appropriate for women to work at night in BPOs? Feel free to leave a comment on what you think about both issues.

2005-12-17T17:58:00.000+08:00

Timbaktu Collective -- Couple of the Year

The Week has a wonderful cover story on the "Timbaktu Collective " -- An NGO that is doing phenomenal work in AP. Mary & Bablu responsible for this movement , feature on the cover and have been named the "couple of the year".

"Ideas nurtured in the Timbaktu Colle-ctive were taken to the villages in CK Palli, Roddam and Ramgiri mandals. From natural regeneration of wasteland, organic farming, propagation of traditional food crops and soil conservation to women's and Dalit empowerment and rural health, Timbaktu has a whole range of rural activity based on the three R's: regeneration, rejuvenation and revitalisation.

The Collective never made the decisions; rather, it allowed the villagers to take over decision-making. The villagers eagerly formed vanasamrakshana (forest protection) committees that restricted grazing to designated areas and prevented overgrazing. The committees formed groups to fight fires and to draw fire lines in summer. Soil conservation was achieved by building rock-filled and mud check dams in the valleys, and digging trenches and pits along the slopes. What they practised in Timbaktu was replicated in the surrounding villages. Today, Timbaktu Collective has helped transform 10,000 acres of denuded hills into verdant slopes."

2005-12-16T11:34:00.000+08:00

India-Asean FTA, sorry...what?

In a race to match (counter) growing influence of China in Asean, India offered FTA with Asean. According to C. Rajamohan (my prof for a short-time) India's offer of FTA is deceptive at best.
At a discussion last week in Kuala Lumpur with the ASEAN on free trade, India’s Commerce Minister Kamal Nath offered a negative list of 1414 items — including toilet seats and chewing gum — to be exempted from tariff cuts. Together these items account for 44 per cent of India’s trade with ASEAN!
Media reports from Kuala Lumpur say the Malaysian trade minister Rafidah Aziz, almost fell off the chair laughing when she saw the list. The reports add that Kamal Nath also giggled in response and promised to come back with a shorter list.
If Manmohan Singh lets an undeclared coalition of the RSS, Communist parties and the Commerce Ministry — a wholly owned subsidiary of the over protected Indian bourgeoisie — define New Delhi’s policy, there won’t be too much of trade with Asia. (emphasis added)

This report is further justified by our PM's statement today:
" Yes, there’s an issue. I took note of that. They say our negative list is far too long.’’

Our Govt needs to rethink on getting into balance of power game with China. Balance of power is a pretty expensive game. Not only it’s costly militarily but one also has to accommodate trade interests of other nations (friends and foes alike). If it’s really worth it, then the attempt should be at least credible. India could have countered China's FTA by giving more market access to less developed countries within Asean. But sadly, commerce ministry (especially, much lobbied department of industrial policy and promotion which acts as a think-tank to the ministry) has made India's realpolitik attempts a farce.

2005-12-15T22:51:00.000+08:00

NRN among world's most admired CEO's

According to a new global study conducted by Burson-Marsteller with the Economist Intelligence Unit (EIU), the Infosys chairman and chief mentor has been named world’s eighth most admired CEOs in 2005, in a list of 15.

2005-12-15T12:02:00.000+08:00

Announcement
Thinking about bidding for that next hot IPO auction? Learn more about auction market and how it works.
Concerned about over-fishing? Know when does a competitive market fish to extinction.
If you are interested in economics, you can download a very well written textbook for free! Introduction to Economic Analysis by Prof. R. Preston McAfee of California Institute of Technology is available at " www.introecon.com". Hope you find this book useful.

2005-12-14T15:21:00.000+08:00

Media Madness - India

Sensationalism is the name of the game. Triviality gets magnified and in the name of investigative journalism, the press runs amuck. V.Gangadhar (Who used to write earlier in THE HINDU) writes a wonderful opinion piece in HT titled " No Method to Media Madness" .

Some excerpt , " As India's number one showman Amitabh Bachchan lay ill at hospital, the Indian media, both print and TV, provided us with examples of 'new journalism' made up of exaggeration, sensationalism and plain silliness. About half-a-dozen OB vans belonging to various TV channels were parked near the hospital; reporters, mostly young and brash, were determined to tell the world what they thought of Bachchan's illness. In the process they proved a nuisance to other patients and genuine visitors to the hospital.

One man's illness was turned into a soap opera with tears, rage, and a bit of attempted deceit for that elusive scoop. One of the reporters from Aaj Tak tried to enter the hospital posing as a doctor though this was denied by the channel's editor who pointed out that his reporter did not wear a gown and was without any hidden camera or electronic equipment.Breaking news included such gems like 'Abhi Amitabh ko stretcher mein laya gaya', 'Amitabh aaj juice piya tha' (I don't know why they missed out whether he drank orange, apple or pineapple juice!).The coverage had the message that nothing else was happening in the country. But this was not so. Young viewers polled by Mid-Day agreed that the Volcker committee report was more important than the Amitabah soap opera. The media ignored the fact that one of the most famous music directors of Bollywood, OP Nayyar, was also admitted to the Lilavati hospital just before the Amitabh illness.A media watcher for over 30 years, I am distressed at the lack of news sense and the focus on trivia. Nothing is serious, we are told. Watching We the People show, I am often shocked that even while discussing serious issues like rape, child molestation and caste wars, the discussion often degenerates into a club-like atmosphere with laughter and giggles. What kind of conclusions can one draw from this mood of jollity?

I worked in an era when everyone had to be referred to as 'Mr' particularly in big newspapers. There are rotten eggs in politics but that did not mean you can refer to them by their first names."

2005-12-13T13:50:00.000+08:00

Bangalore is Bengaluru

Well there goes our chief minister once again, he was under fire from litterateurs, linguists and kannada chauvinists for not doing enough to get kannada a classical language status and also the recent issue of Belgaum corporation voting to join Maharashtra had alarmed “regionalists”. True to his vocation, our CM pulled a good one to soothe the crowd. For kannadigas like me it was always bengaluru. But I too anglicized it when I announced my place of birth to foreigners. Thanx to IT boom, foreign has come to Bangalore.

Growing westernization has alarmed the Govt and it has ordered closer of all pubs/discos in Bangalore at 11.30 pm. Mr. Bellman of WSJ wrote on this issue by featuring “taika” pub owner. His words captured the theme perfectly:
“The move – a reflection of the discomfort traditional Indians feel as their young sons and daughters drift toward western ways and mores”

It is always said that we humans tend to latch on to something familiar when we are facing a sea of change. Indian express aptly labels nomenclature change as:
“Call it a clash of civilisations: the local asserting itself against the global” How true!

On a lighter note:
There is town called "fucking" in Austria!..where are you from? I am from 'fucking' Austria!!!
Recently small US towns have taken corporate brands such as Linux, Dish TV, secretsanta.com, half.com as their names!!!

Its the residents who make or break the town! whats in the name anyways!?

2005-12-12T13:23:00.000+08:00

A small win in a Big Battle

Its the small wins like this that will spur us to bigger victories. Reuters reports that, " A former prostitute has taken over as head of a global HIV/AIDS project in eastern India, promising to completely wipe out new infections in one of Asia's biggest red light districts.Bharati Dey, 40, took over as director of the World Health Organisation-funded HIV/AIDS project for some 6,000 prostitutes of Sonagachi, a teeming red light district in northern Kolkata.

"My chief goal is to ensure that not a single sex worker offers her service without condoms. We want to bring down the infection rate to zero," Dey, who took over on Dec. 1, told Reuters.
Sonagachi's HIV/AIDS control programme has brought infection rates down to around five percent from around 90 percent a decade ago, partly by encouraging prostitutes to refuse sex without condoms.The Sonagachi programme's success saw the U.S.-based Bill and Melinda Gates Foundation use it as a model for a $200 million project in six other Indian cities."

2005-12-11T15:32:00.000+08:00

India tops US for 2nd spot in FDI destination rankings

The Hindu Businessline reports that, " INDIA replaces the US as the second most attractive FDI location, up from last year's third place ranking, according to the latest Foreign Direct Investment Confidence Index, an annual survey of executives from the world's largest companies conducted by AT Kearney. China continued on top of the index for the third year running.

According to AT Kearney, it is for the first time in the history of the index, which began tracking the FDI intentions of global executives in 1998, emerging market countries have been ranked first and second as the most attractive FDI locations.The bullishness among corporate leaders about India has been attributed to several factors, including FDI inflows to India surpassing the $5-billion mark in 2004, the Government reforming the FIPB and setting up the Investment Commission and FDI caps in telecom, aviation, banking, media sectors being raised".

2005-12-10T13:31:00.000+08:00

What’s wrong with BB+ rating?

S&P Last week decided to leave India’s long term credit rating unchanged at BB+. It said its long-term rating unchanged because of high fiscal deficit and growing debt. Some time back even our PM talked about high fiscal deficits and the need to bring it down. The central government fiscal deficit stands at 4.3%. If 4.3 % deficit looks OK wait until you add state government deficits: The number balloons to 9% of GDP. But what is the prime reason for this fiscal deficit? Prime reason is that Tax/GDP ratio is dismal.

Mr. Ramanujam has written an open-ed in The Hindu Business line about this ever green topic. Despite booming economy, Indian Government’s coffers seem to be as empty as ever. Tax revenue as a percentage of GDP is almost stagnant; in fact, it is declining, the figure being 10.1 per cent in 1991 and 9.2 per cent in 2003-04. The author also compares India’s ratio with other countries like Thailand (14.1%), Philippines (13.3%) and Pakistan (12%). As usual, there are only 100,000 people who have "declared" income of 1 million rupees or more in India (Shame). NDA Govt tried to cover deficits by selling assets, UPA Govt is trying by ordering PSUs to increase dividend pay-out to minimum 20% of net profits.

Successive finance ministers have promised to extend the tax net, but strange thing is that only salaried class gets caught in the net! Most non-salaried high income earners escape by bringing in agricultural income and other numerous deductions! if Agriculture is so profitable then agricultural income has to be taxed (At least for big farmers). Indian Liberal Group has a thoughtful suggestion, it wants two income earners (Agriculture and Non-Agriculture) to be taxed at a higher rate of say 40%! Way to go.

It is a chicken and egg situation, some say until governance improves, citizens wont be forthcoming, but others say until citizens pay taxes promptly, governance cannot improve! Either way the current situation cannot carry one. To make the situation worse, UPA has taken up "Rural Employment" scheme, which is a huge fiscal drain. Rs 45 is the legal minimum wage per day. 100 days is the promised work per family per year. I think there are about 1.5 crore BPL families in rural India. Please do the math. Let us know what you think.

2005-12-09T12:30:00.000+08:00

Stress bug at the IIT's

The Indian Express takes a look at the mounting suicide attempts in the IIT campuses. Stopping short of suggesting an EQ test alongwith the JEE (Objective) test , the article veers close to a need for spiritual & emotional balance.

2005-12-07T16:18:00.000+08:00

Golden Quadrilateral
Ms. Amy Waldman of NYT has written an extensive article on highway development in India. There is also an interactive feature. A must read and see.
India's superhighway to the 21st century
Interactive feature
Courtesy: New York Times

A point on highway funding: Indians pay Rs 1.50 as road cess for every liter of petrol and diesel. 50% Diesel cess goes back to state governments and is "supposed" to be used for rural road development. 100% of petrol cess and the remaining 50% of diesel cess goes into (a) Highway development and maintenance (57.5%) (b) Bridges etc (12.5%) (c) State Roads development and maintenance (30%). State governments, as usual, have not been as successful as NHAI in scaling up their rural and state infrastructure (for e.g. Karnataka govt treats the money it receives from cess to general revenue account and happily spends it on other things including splurging on Toyota Camrys for ministers). However, knowing how well our state PWDs work, even if money is allotted to build rural infrastructure it will be just as non-existent as today.

2005-12-05T23:27:00.000+08:00

Trusim of Medical tourism
IHT on weekend had this to say about medical tourism in India
As foreigners flock to India to find lower health-care costs and avoid long waiting times, the rapid growth of this medical tourism has begun to create significant opposition among doctors here. Providing cheap treatment for foreigners is becoming an important source of foreign revenue for India, and some doctors are growing angry at the government's focus on it while the health of a large portion of India's population is neglected.

This has prompted an argument between those who assert that medical tourism benefits the Indian health-care system by improving its standards and those who say the practice worsens disparities in the distribution of health care that are already critical. Medical tourism is forecast to become a $2.3 billion business for India by 2012. Some analysts predict it will be the next major driver of the Indian economy after information technology. Already, about 150,000 visitors seek treatment every year, and this figure is rising at 15 percent annually.

Growing confidence abroad in the Indian system has meant that as health-care costs soar in the United States and as hospital waiting lists grow longer in Europe and elsewhere, more people are prepared to travel to cities like Delhi, Mumbai and Bangalore for major operations like heart surgery and organ transplants, as well as for more minor cosmetic treatments. But the surge in the popularity of India as a place for treatment is triggering complaints among some leading members of the medical community, like Dr. Samiran Nundy, a gastrointestinal surgeon in New Delhi, and Amit Sengupta from the India's People's Health Movement, who wrote about it recently in The British Medical Journal. "It is time," they said, "for the government to pay more attention to improving the health of Indians rather than to enticing foreigners from affluent countries with offers of low-cost operations and convalescent visits to the Taj Mahal." The authors wrote that public spending on health care, which is equivalent to nine-tenths of a percent of the Indian gross domestic product, was among the lowest in the world and ahead of only five countries: Burundi, Myanmar, Pakistan, Sudan and Cambodia. (Emphasis added)

One cannot agree more with the Drs. Nundy & Sengupta. But blaming medical tourism misses the mark by a mile, it is unfair for private sectos to get flaked for government failures (what happened to our esteemed socialism which "gives" us all best healthcare access? saving grace: We beat pakistan)

2005-12-05T22:28:00.000+08:00

Intel plans $1 billion investment in India

BBC reports that, " Intel, the world's largest chipmaker, plans to invest $1bn (£576m) in India over the next five years.The firm will spend $800m on boosting its research and development operation, with the rest of the cash being used to finance investment in firms.Intel's division in Bangalore is the company's biggest non-manufacturing operation outside of the US.Intel said it was in talks with the government about manufacturing chips in India, although it added that it had yet to make a decision as to when, if at all, that would happen. "

Intel has apparently asked for a lot of sops from the Govt for its manufacturing site and the govt was reluctant to agree to some of the terms. Will Mr.Maran be successful in wooing Intel ?

2005-12-03T16:14:00.000+08:00

CMC Vellore joins stem cell research

The Indian Express reports that , " With President Abdul Kalam flagging off a centre for stem cells research at the Christian Medical College yesterday, the renowned college and hospital in Vellore, 200 km from Chennai, will join intensive global research in stem cell applications.Five scientific faculty will devote their entire time to research with stem cells, supported by research fellows and technical staff.

‘‘Stem cell applications in regenerating damaged cardiac muscle and treatment of diabetes mellitus will be the important objectives of the stem cell research,’’ CMC Director Dr. George Chandy told The Indian Express. Delivering the Dr Ida Scudder Oration, named after the founder of CMC, after laying the foundation stone for the research centre at CMC, Kalam called for ‘‘intensive research’’ for developing and producing cost effective treatment regime for genetic disorders, disorders due to cellular function deficiency and disorders arising out of certain pathogens through gene therapy and gene chip research, stem cell research and combination vaccine and pathogen specific antibiotics.

Its a welcome news that CMC is setting up a stem cell research centre. But has the government tried to initiate a public debate on "Stem cell research" ? With the world polarised into two camps on this issue, its very important to debate whether the "embryo" constitutes "life". The ethical debate assumes greater significance in a diverse nation like India with multiple religions.
Interesting to see these words on the wikipedia website , " Others do not view a blastocyst as a human being, and may instead see opposition of stem cell research as unfounded due to the suffering that new medical technologies could prevent. Many Jews,Hindus, Muslims, Humanists, liberal members of the Church of Christ, as well as a significant number of mainstream Christians are supportive of embryonic stem cell research. "

2005-12-02T14:23:00.000+08:00

Long Indian Summer

Lex column in FT had this to say about Indian economy @ 8%

India is booming. Structural improvements, a cyclical upturn and a good harvest combined to produce economic growth of 8 per cent in the third quarter. That beat most forecasts and puts the central bank's annual growth target of 7-7.5 per cent comfortably within reach. India is blessed with a robust corporate sector and consumers who are happy to increase their spending in line with rising disposable incomes - unlike many of their more timid Asian neighbours. Easy credit helps too. Interest rates are still close to 30-year lows and banks are lending aggressively: on an annualised basis, corporate and retail loans rose by a third in the six months to September.
The spending boom creates its own problems, of course. India's trade deficit, already inflated by high oil prices, is widening on the back of rocketing imports. It is set to reach about 7 per cent of gross domestic product this year. That puts pressure on the currency, which is already suffering from the strong US dollar.
There is also an inflationary impact, again exacerbated by rising fuel costs. The central bank is thus likely to continue to lift interest rates, which could start to crimp consumption. Meanwhile, the country's coalition politics have sapped reform momentum. Economic weaknesses - from poor infrastructure to excess red tape and a relative dearth of foreign direct investment - are not being tackled. India is in a sweet spot, but it is becoming tougher to stay there.

Courtesy FT

2005-12-01T21:56:00.000+08:00

India achieves 8% Q2 growth

WSJ reports that " India's economy expanded faster than expected in the fiscal second quarter ended Sept. 30, sparking some hope the country can achieve 8% growth for the year.The economy expanded 8% from the year-ago second period, powered by a robust performance in trade, hotels and transport. Private-sector economists said the latest quarterly figures, announced yesterday, made them optimistic India can keep expanding solidly, though some cautioned that economic growth could falter unless the government redoubles its often-halting efforts to open up India more widely to foreign investment."

2005-12-01T11:54:00.000+08:00

Shhh...Bureaucracy at work.

Mandarins at PMO have finally realized that subsidized kerosene is the prime reason behind diesel adulteration in India. To solve this problem, they have come up with a innovative plan of selling kerosene at two rates, one at 10 Rs for below poverty line citizens and one at open market price of 20 Rs, fair enough. However, Karnataka introduced a similar scheme in late 90s. The subsidized version was coloured (bluish kerosene) and white kerosene was meant for open market. This initiative, a respectable innovation, has sadly been an utter flop. Treating symptoms is not equal to curing diseases. A pump owner will now use white kerosene instead of subsidized kerosene. Diesel sells for 33 Rs, there is still 65% margin to be made! Sadly, there is no political will to legislate a strong criminal law against adulteration which automatically punishes the pump owner, his workers (for not blowing the whistle), the oil-company officials and Govt officials.

Moreover, implementation of these "innovative" schemes is extremely hard in India as it creates lot of losers (bureaucracy). When the going is so good for them, who will voluntarily want to stop the party? The supply chain of public distribution system is very large and at each level there exists a swine to hog his pound of flesh. Time and time again, our mandarins have drawn out grand schemes which augment themselves, their co-workers and their bosses (politicians). Instead of poverty elimination, shamefully, we are seeing poverty enrichment. One cannot argue for elimination of subsidy, as subsidizing kerosene for urban and rural poor makes economic and social sense. Subsidy coupons are a great idea but like BPL card it will miss its target. Any new scheme channeled through the same old supply chain will never succeed. We need to start from scratch and we need to design a scheme which actively involves public sector (NGOs and civilians) and private sector. Any thoughts?

2005-11-29T21:33:00.000+08:00

Airport Privatisation -- Crash Landing ?

If the Left parties have their way, the Airport privatisation may crash land before it takes off.

The Hindu Business Line reports that " The Left parties have asked the Government to consider adopting the `greenfield route' for the development of the airports in Delhi, Mumbai and other important cities.The four Left parties — CPI (M), CPI, AIFB and RSP — have expressed their "firm opposition" to any unilateral decision to privatise the Delhi and Mumbai airports. The letter points out that in the absence of consensus pursuant to the consultation with the employees and in the light of alternative plan submitted by the employees, the best option was to speed up the modernisation of these airports through AAI instead of wasting time in going through a privatisation or joint venture route.The Government is following the joint venture route for modernisation and restructuring of the two metro airports in which the Airports Authority of India (AAI) will have a minority stake.

The letter, opposing the move to privatise the two metro airports, comes days before the empowered Group of Ministers (e-GoM) is scheduled to meet to take a final decision on who should be chosen as the successful bidder for restructuring and modernising the two airports."

Ironically this comes just a day after the FM emphasized the need for better Infrastructure to achieve higher GDP growth.

2005-11-28T20:38:00.000+08:00

India's biggest economic summit opens

BusinessWeek reports that " Hundreds of executives and policy makers from around the world gathered Sunday to explore business opportunities in India, one of the world's fastest-growing economies that is increasingly opening up to foreign competition and investment.The three-day India Economic Summit comes at a time when Foreign investors have been increasingly looking to India as its booming economy -- which has been expanding at an annual rate of more than 7 percent in recent years -- offers promising returns on capital".

Global experts will join Indian policy makers at the summit to discuss what should be done to make the growth process more inclusive in order to prevent a social and political backlash in the face of widening economic disparities, said Gay Davis, an expert with the Geneva-based World Economic Forum that hosted the annual meeting.A key focus of the summit would be how India could sustain annual economic growth of 8 percent or more in a way that benefits people across all sections of the society, Davis said.The obvious challenges include infrastructure bottlenecks, including a lack of enough schools and hospitals needed to provide an educated and healthy work force, he said.

Indian Prime Minister Manmohan Singh and Finance Minister P. Chidambaram will address the summit. More than 600 participants from nearly three dozen countries are attending.

The Hindu adds "Unveiling the roadmap for reforms to achieve eight per cent growth, Finance Minister P. Chidambaram on Sunday announced that more sectors would be opened up to foreign direct investment (FDI) while public investment would be increased in critical sectors such as agriculture and infrastructure.The FM admitted that the Key to sustaining higher GDP growth is larger investment in infrastructure".

But how much of that is possible with the Left being an ally ? Keep your fingers crossed .

2005-11-27T00:08:00.000+08:00

PSU resurrection!

The Board for Reconstruction of Public Sector Enterprises (BRPSE), a UPA govt’s initiative to revive sick PSUs, has come up with a master plan in which it professes that only 418 crores are needed to jump start ailing 30 Public Sector Undertakings. However if one digs deeper, in addition to 418 crores in cash, government needs to forgive 3000 crores of debt. Further in some cases in addition to loan waiver Govt needs to convert debt into equity worth 450 crores. No wonder BRPSE had to employ spin to cover this mega bail out. So now the total package comes close to $1 billion from the initial headline of about $100 million!

Central government of India owns about 240 PSUs and employs about a million people. With exception of Oil, telecom and power industries almost all PSUs are running losses or barely making profits. About 100 of them are in intensive care units. It is very clear that PSUs thrive in monopoly or in oligopolistic environments. As soon as competition is in, PSUs catch bird-flu. There are varieties of reasons why this happens though the exact cause differs case by case. Corruption, management apathy and overt unionist politicking are the least common denominators in all sick PSUs. Moreover, PSUs suffer from what insurance industry calls as 'moral hazard' problem. They know that however big their blunders are, they can always go to Delhi for money where there are many symphathisers.

Companies that are going to receive this fresh breath of life are HMT bearings, HMT machine tools, Hindustan Antibiotics limited etc. These companies’ products, processes, services, and employee skills are apt in dinosaurs’ era. Infusion of capital to revitalize these will be useless in a more open and globalizing world. I am not opposed to Govt running companies but it should run companies where there are market failures. Once operational, these companies actively have to seek protection to survive in cut throat competitive environment. Sadly, more often than not, governments extend protection as it does not want these companies to come back in 2 years time for more money. Protecting senile industries is blatant waste of taxpayers’ monies and it hurts private sector by distorting competitive environment.

Some of these companies are not operational for more than 3 years. No employee would be still sitting around awaiting these companies to open again, they would have found employment elsewhere. It would have been better if these companies were liquidated and employees had been given a respectable compensation not false hope. It is hardly a secret that some of these PSUs own huge amount of prime real-estate. It is high time to unlock these values. The funds thus raised make more economic and social sense than to give a ‘nip and tuck’ to these old goliaths. Money raised this way could be used to attain more ‘social’ goals rather than to waste hard earned tax-payers money to attain ideological ‘socialist’ goals. Pity the tax-payer, in worlds largest democracy he has no say. Amen

2005-11-25T22:34:00.000+08:00

Moral Policing

The state of Tamil Nadu - the abode of conservatism, finds itself again under national spotlight. The recent moral policing episodes do not do any good to the state's image . An Actress is attacked verbally and with rotten eggs for her opinion , the Anna University passes a dress code for students and media (certain section) & police become cultural torch bearers by invading a Bar. All these attackers have different agenda, none of which is noble. Also such Blatant intolerance of Individual freedom is shocking & despicable.

Whether the remarks made by Khusboo are right or wrong is besides the point. But I fully support her right to say whatever she feels. As Voltaire said " "I disapprove of what you say, but I will defend to the death your right to say it".

Thankfully , there seems to some respite. Karthi Chidambaram (Son of P.Chidambaram - FM) & Kanimozhi (Daughter of M.Karunanidhi) have joined hands to start a portal named "Karuthu" to uphold freedom of expression.A small step in the right direction.

What is happening now is not moral policing but amoral policing.

2005-11-23T22:31:00.000+08:00

Price of honesty in India

Sadly I got to know that one of my good friends lost his life because he was honest in doing his job. Manjunath aka 'maccha manju' was working with Indian Oil Co as a sales manager in UP. On 19th Nov, he ordered closer of one petrol pump in lakhmipur, UP because it had failed quality tests. The result: he was shot to death. Maccha Manju was a brilliant chap, he graduated from SJCE, Mysore and then went to IIM(L). May his soul rest in peace.

Indians in small cities and towns, pay an arm and a leg for a liter of spurious adulterated petrol. Not only this affects the engine life of the vehicle for which the vehicle owner has to pay to get it repaired perennially but there is also a public cost associated with adulterated petrol as it increases soot and introduces bloody toxins into the environment. There are wealth effects: (a) pump owner and his cronies pocket illegal money (b) the vehicle repair shops and associated spare parts industry makes money (c) doctors, especially allergy specialists and related pharmaceuticals make money (d) net productivity loss occurs to society as a whole (everybody suffers). But important point to note is that all these wealth transfers occur from the hapless middle class, workingman's pocket.

Petrol pump is allocated only for the people who have right connections in Delhi with the 'Govt of the day'. There is absolutely no incentive for pumps to be clean when prices are regulated and competition is non-existent in small cities and towns. What can one expect if a criminal (usually a failed or a relative of a successful politician) runs a pump? Benefits of Indian socialism? Usually it is a race to the bottom. Free Market is the only solution. Amen.

2005-11-23T13:28:00.000+08:00

India -- Caught in the crossroads ?

Singapore's founding father LKY, on Monday delivered Nehru memorial lecture in Delhi. Like Nehru, LKY was also educated in England, but unlike Nehru LKY did not become a member of Fabian society! When time comes for an idea you really cannot stop it, can you? Even Fabian society has transformed itself after Margaret Thatcher crushed the labour in 1983 elections. It is now a bedrock organisation for Tony Blair's (New) Labour party. And now new Labour’s agenda is almost similar to that of old Conservatives.

But the problem with Indian left-wing socialist thinking mindset is that it never adapts to changing times. It takes a crisis to force and change us but we changed half-heartedly. Even today some smart-alexes in Congress think that India never did go bankrupt but they blame it on America: because of Gulf War NRI's stopped remitting money and thus India had temporary balance of payment problem .

Being a democracy we should have openly debated to dissect and analyze what went wrong with the license raj and also on how the future course of action should be. Everything was brushed under the carpet. But the words "Free Markets" "Liberal" "Small Government" are still no-no in Delhi; one will be ostracized! The precise reason is that we still are a socialist country which now has a small, healthy and beautiful liberal baby! And for the love of our country and liberalism we shall use this blog to debate or at least to start a debate so that we can contribute our 2 cents worth on making sure that individual choice and freedom will be the mainstay of the future India.

2005-11-22T23:00:00.000+08:00

Indophiles

The Victor Hugo quote " No power on earth can stop an idea whose time has come" has a definitive buzz about it. In his maiden speech as Finance Minister, Manmohan Singh quoted it during his budget speech.

We feel the same way about India. There is something exciting happening there which is transforming a sleeping elephant into a asian tiger. We shall strive to track,analyse & disseminate Business,economic,political information about India through this blog. This blog will be a Group Blog with contributions by me & Aruna Urs ( Watch out for this guy , He is a UG in economics now pursuing a Masters in International Political economy with future plans of a Ph.D in Macroeconomics ! ).

As Mark Twain exclaimed " India is the cradle of the human race, the birthplace of human speech, the mother of history, the grandmother of legend, and the great grand mother of tradition" . We are pretty excited about this interesting journey. We hope we can keep the readers glued too.