Masti

Marketing class with a spin

2010-05-17T18:44:00.000-07:00

Professor at one of the IIM's was explaining marketing concepts to the Students: -

1.       You see a gorgeous girl at a party. You go up to her and say: I am very rich. Marry me!" - That's Direct " Marketing
2.       You're at a party with a bunch of friends and see a gorgeous girl. One of your friends goes up to her and pointing at you says: He's very rich. Marry him." -" That's Advertising
3.       You see a gorgeous girl at a party. You go up to her and get her telephone number. The next day, you call and say: Hi I'm very rich. Marry me." - That's "Telemarketing
4.       You're at a party and see gorgeous girl. You get up and straighten your tie, you walk up to her and pour her a drink, you open the door (of the car) for her, pick up her bag after she drops it, offer her ride and then say: By the way I'm rich. Will you marry me?" That's Public Relations
5.       You're at a party and see gorgeous girl. She walks up to you and says: You are very rich! Can you " marry! Me? - That's Brand Recognition "
6.       You see a gorgeous girl at a party. You go up to her and say: I am very rich. Marry me!" She gives you a " nice hard slap on your face. - That's Customer Feedback
7.       You see a gorgeous girl at a party. You go up to her and say: I am very rich. Marry me!" And she " introduces you to her husband. - That's demand and                           supply gap
8.       You see a gorgeous girl at a party. You go up to her and before you say anything, another person comes and tells her: I'm rich. Will you marry me?" and she " goes with him - That's competition eating into your market share
9.       You see a gorgeous girl at a party. You go up to her and before you say: I'm rich Marry me!" Your wife "arrives. - That's restriction for entering new markets

2010-05-07T03:36:00.000-07:00

7 Tips for Motivating Employees

2010-04-23T23:19:00.000-07:00

7 Tips for Motivating Employees

Having trouble getting workers fired up about a project – or your company in general? We've compiled some pointers from the experts.

By Inc. Staff | Apr 20, 2010

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Courtesy Company

Kevin Plank, founder of Under Armour

Any CEO knows that employee motivation is a key to individual performance, group productivity, and maintaining a pleasant office culture. So how do you do it exactly? For a dose of inspiration on how to motivate those who work for you, we've compiled the best recent pointers on the subject from articles published in Inc. magazine and on Inc.com.

1. Set a Good Example.

Remember that your attitude is contagious. Kevin Plank, founder of Under Armour, an apparel company located in Baltimore, says that communication is key to making members of your company's team feel including in major decisions. "I listened to everyone's opinions, and, without fail, they'd bring up things I hadn't thought of. More important, my team members knew that they were part of the process and that their voices mattered," he told Inc. "Employees are more motivated when they feel needed, appreciated, and valued." Plank also recommends hiring employees who have great leadership skills. At his company, he calls these natural leaders "engines," and peppers them strategically around the organization. Read more.

2. Focus on Employee Happiness Rather Than Employee Motivation.

Zappos is often hailed as the most employee-friendly business out there. But, perks aside, what really keeps the workers there motivated? When Inc.'s Max Chafkin last interviewed Zappos CEO Tony Hsieh in Las Vegas, he discovered that what Hsieh really cares about is making Zappos's employees and customers feel really, really good. In fact, he's decided that his entire business revolves around happiness. Chafkin writes: "Zappos's approach to workplace bliss differs significantly from that of other employee-friendly businesses. For one thing, Zappos pays salaries that are often below market rates - the average hourly worker makes just over $23,000 a year. Though the company covers 100 percent of health care costs, employees are not offered perks found at many companies, such as on-site child care, tuition reimbursement, and a 401(k) match. Zappos does offer free food to its employees, but the pile of cold cuts in the small cafeteria loses its allure faster than you can say Googleplex. Instead of buying his employees' loyalty, Hsieh has managed to design a corporate culture that challenges our conception of that tired phrase." Read more.

3. Make Sure Employees Share in the Company's Success.

Employee performance, productivity, and motivation can all be tied to how invested a worker feels in his or her company. That's what makes profit sharing such a powerful tool – especially when the company is consistently successful. Sue Holloway, an expert in compensation at WorldatWork, a human resources organization focused on employee benefits, told Inc.com that the objective of a profit sharing plan "is to foster employee identification with the organization's success." By implementing such a program, the CEO is saying, "We're all in this together, and everybody's focused on profit," Holloway says. Read more.

4. Create a Culture of Autonomy and Agency.

In his book Drive: The Surprising Truth About What Motivates Us, author Daniel H. Pink writes that the crash of Wall Street is a striking example of the peril of motivating employees strictly with gobs of cash. He advises that instead, companies should create conditions for employees to find the joy in work itself. That can mean giving workers the autonomy to choose what they do and with whom, which can help foster a desire for mastery of tasks and skill sets – and simply doing more, better. Read more.

5. Encourage Worker to Voice Complaints.

When Dell amassed an online "antifan club," excoriating the PC maker across the blogosphere, it not only acknowledged criticism, but also actually fixed things, according to Jeff Jarvis's book What Would Google Do. "Dell transformed itself from worst to first in the era of customer control," writes Jarvis. How about applying the same principle apply to employees? There are scores of reasons why employees don't contribute critique of management or their company's culture – from fear of retaliation to hesitation to appear ungrateful. But remember, as Inc.'s Leigh Buchanan writes, "When the heat's not lowered, though, steam escapes." Read more.

6. Take on Fun Volunteer Assignments.

In the heat of the recession, Door Number 3, an Austin-based advertising agency, saw business slow. Thus, creative employees were occasionally idle on the job. M.P. Mueller, the company's president, decided to ramp up the agency's pro bono efforts – an established way to build work portfolios and maintain track records. It also had the side-effect of keeping employees sharp and motivated between projects. Mueller said these projects not only help charities, which also struggle during hard times, but also help employees create some of their most inspired work. "You get a lot more freedom with nonprofit clients," she says. Read more.

7. Get in Touch With Your Inner Start-up.

Every morning in the Chicago offices of Total Attorneys, a legal software and service firm, small groups of the company's 180 employees gather in clusters around the office. Laughter, banter, and collaboration ensue. For about 15 minutes, the office might be said to resemble a college cafeteria – but to CEO Ed Scanlan it's a perfect example of what he calls controlled chaos. That's a process inspired by a process for designing software called "agile development," which aims to foster flexibility, speed and teamwork – in other words, make an established company work more like a start-up. Read more.

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Growing Smart: Best Bet Strategies to Expand Your Business

2010-04-13T09:16:00.000-07:00

Growing Smart: Best Bet Strategies to Expand Your Business

Kate Lister

Apr 12, 2010 -

Take a lesson about business growth from one of the world's richest entrepreneurs:

"I don't try to jump over seven-foot bars; I look around for one-foot bars that I can step over." —Warren Buffet

In 1957, Igor Ansoff, a Russian-American with a PhD in applied mathematics, developed a model that has served as the foundation to corporate growth strategies for more than five decades.

Called the Product-Market Growth Matrix, it established a framework for looking at the risks inherent in business growth. While his analysis isn't as pithy as Buffet's, it helps grade the strategic risks that fall between the one- foot and seven-foot bars.

The principal of the model is simple. It's cheap, easy, and safe to sell stuff that people already want to people you already know. It's expensive, hard, and risky to blaze new trails with new products or services in unknown markets. In between is, well, in between.

While something of a hybrid between Ansoff's and Buffet's advice, here's a summary of growth strategies from the least to most risky.

Sell More Stuff to Existing Customers

The easiest, cheapest, safest way to grow your business is to sell more stuff to existing customers because both are known quantities.

Here's how:

Build customer loyalty (i.e., frequent buyer cards, low price guarantee)
Encourage customers to buy more (i.e., "buy two get one free," quantity packaging, "best results with frequent use," a.k.a. double the dose, double the gross)
Offer extended memberships, multi-year discounts, etc.

Sell the Same Stuff to New Customers

This involves grabbing market share by wooing customers away from competitors. It introduces some risk because you're dealing with new faces, but a long as you don't venture into new markets, they should be similar to your existing customers.

Here's how:

Honor competitor coupons
Guarantee to beat competitor prices
Establish a "refer a friend" program for existing customers
Exploit your competitor's weaknesses (i.e., Burger King's "Have it your way" campaign)

Sell Other Proven Stuff to Existing Customers

In this approach, you expand your product mix with market-proven products and sell them to existing customers.

Here's how:

A coffee shop adds a selection of herbal teas
An energy drink company takes on an existing line of supplements, energy bars, etc.
An accounting firm partners with an investment advisory group

Sell Newly Developed Stuff to Existing Customers

To wring more sales out of your existing customer base, you can also grow by developing related products. Obviously, this is riskier than adding known products or services because it carries product development risks.

Here's how:

A specialty jam manufacturer develops a line of fruity salad dressings
A bicycle manufacturer develops a self-fixing tire
An athletic shoe company develops a line of sports clothing

Sell Existing Stuff to New Markets

While you might make a case that the product development element of the last strategy carries more risk than moving into new markets, most experts agree that selling to existing markets is far less risky than selling to new ones where you have no experience.

Here's how:

Expand a local brand to national or international markets
Develop new distribution channels (i.e., licensing, distributorships, marketing partnerships, brand alliances)
Develop pricing strategies for different markets (i.e., educational, non- profit, military, left-handed, etc.)
Develop niche marketing programs (i.e., sell the same product with marketing aimed at different markets such as seniors, students, singles, etc.)

Diversify Into Entirely New Markets

This is the highest risk, highest cost approach to growth because it suffers from both product and market risks. In the case of growth through acquisition, as is often the strategy, it also introduces a variety of financial, cultural, and management risks. It's not a good place for the weak of budget or nerve. Remember, the pioneers were the ones full of arrows.

Here are some examples:

Time Inc. and Warner Communications Merger
General Electric adds financial services (GE Capital)
Pepsi / Frito-Lay Merger

Grow Smart

If you want to grow smart, let the big boys spend the time and money to hoist their mass over the high bar while you step lightly over the low hurdles.

Over the past thirty years, Kate Lister has owned and operated several successful businesses and arranged financing for hundreds of others. She’s co-authored three business books including Undress For Success—The Naked Truth About Making Money at Home (Wiley, 2009) and Finding Money—The Small Business Guide to Financing (2010). Her blogs include Finding Money Advice and Undress4Success.

Great Motivational Speech by Steve Jobs at Stanford University

2010-03-28T02:58:00.000-07:00

One of the most heart moving and motivational speeches by Mr Steve Jobs.

Spas limber up for expansion in India

2010-02-12T22:58:00.000-08:00

The country is likely to have more than 2,000 spas by the end of 2010, up from just 200.

The wellness industry is alive and kicking in India and nothing demonstrates this better than the hyper-activity in the spa business.

Consider this: Hyderabad-based O2 Spas, which has set up shop at the Delhi and Mumbai airports, is now delivering spa therapies to offices. Weight loss and beauty specialists Vandana Luthra Curls and Curves (VLCC) is developing a residential medical spa in Gurgaon at an investment of Rs 100 crore. Delhi-based Spas India Private Limited, a subsidiary of Canadian Spas Worldwide, wants to expand from its single spa in Delhi to 10 more cities, Bangalore and Mumbai among them. First off the expansion block is Guwahati, on which Spas India is spending nearly Rs 10 crore.

Meanwhile, Vallée de Vin Private Limited, is planning a unique “wine spa” by next year. And, Bharat Hotels’ Lalit Resort and Spas in Kerala, will invest Rs 70 crore in a 40-cottage spa. Recently opened in Pune, Mumbai’s Rudra Spa, whose cash registers ring up Rs 15 lakh to Rs 20 lakh every month, has plans to expand to Mumbai’s suburbs through a franchise model.

What’s prompting all this healthy activity is sheer demand. Although there are no industry figures, it is clear that expanding incomes are encouraging affluent Indians to explore more expensive health solutions. A study by the Federation of Indian Chambers of Commerce and Industry (Ficci) suggests that the wellness industry is growing at close to 20 per cent annually and currently stands at Rs 1,500 crore.

According to O2’s founder and CEO, Ritesh Mastipur, India has 200 registered good-quality spas. “By the end of this year there will be 2,200 spas in India,” predicts Rajesh Sharma, president, Spas India.

O2 Spas is a case in point. Mastipur says his airport spas in Delhi and Mumbai get close to 30 customers a day. “It’s all about convenience,” he explains.

His mobile spa, which offers services to companies, is also getting a good response, says he. The companies have to tie up with the spa and Rs 2,000 is the charge per “chair” for a 10- to 15-minute treatment. O2 Mobile Spas provide basic spa services like massages such as foot reflexology, head-neck-shoulder and so on to employees at their work places.

Vallée de Vin, which recently launched its wines in the Indian market under the brand name Zampa, is looking at an early 2011 opening of its novel wine spa on top of a hill in Sanjegaon, Nasik in Maharashtra at an investment of Rs 7 crore.

Ravi Jain, director, says, “Nothing is on paper so far but we have started work on it. We have the wine so we thought why not the wine spa? Different kinds of therapies using wine will be offered to our customers.”

Given the rate at which the spa industry is expanding, the Spa Association of India is planning two academies, one each in Delhi and Guwahati, to tackle the biggest problem the industry faces today: lack of trained staff. “Ranging between six months and one year, the academies will have international and local staff,” adds Rajesh, whose spa is also the founder member of the association.

Apart from this, the association, which does not want to disclose its membership, plans to ask the government for accreditation facilities that will require all spas to be listed and certified by it based on a set of regulations. “Since skill sets is a problem, we have started hiring support staff like nurses from the health industry as that’s the closest we can get to wellness,” says Mastipur. “They are hospitable and sensitive towards others. We hire them and train them to become skilled masseuses. It is a win-win.”

Nine-year-old Lees Beauty Center and Spa in Pune, run by Leena Khandekar, has started hiring trained professionals to conduct in-house training sessions. “This is a competitive niche area where well-trained staff is important. Like guest lecturers, skilled people come over to train my staff and keep them abreast of new trends,” she says. Lees is planning to open in Mumbai soon.

Given its growth, it is natural for the industry to require IT support. India’s largest IT services firm Tata Consultancy Services (TCS) has plunged in with a spa management solution and brought its IT offering for players to manage spas better. Says Venguswamy Ramaswamy, SMB global head, TCS, “The wellness industry is growing at 18 per cent year on year in terms of IT spends and that’s why we have entered this sector. We have supported global ayurvedic spa chain Kairali Spas to manage their systems more efficiently. Our software helps clients store and retrieve customer data, make a pattern from customer therapy history, suggest therapies and help them come up with better promotional offers.”

By Pravda Godbole / Pune February 10, 2010, 0:52 IST

World Class Spa Opens at Rajiv Gandhi International Airport

2008-11-20T00:15:00.000-08:00

	Fish Reflexology introduced for the first time in India at RGIA.

	Spa offers facilities like massages, pedicures, manicures, facials etc.

In line with international airports, passengers can now experience a unique and revitalizing therapy, complete with a foot massage before boarding the flight at the airport. RGIA has introduced spa facilities for passengers to relax their mind, body and soul with a wide range of first-rate treatments in an elegant setting.

Travellers flying from RGIA can now experience India�s first Fish Reflexology center along with foot massage or an instant massage or quick cleanups while waiting to catch a flight.

Fish Reflexology offers a unique and revitalizing therapy, complete with a foot massage. With soft lightings, calming resonance of a river stream, the entire area filled with the aroma and feet relaxed in a warm pool, witness a school of Turkish fish named Garra Rufa (Dr. Fish) gently nibbles on your feet. These adorable little fish consume only the dead skin areas, revealing your smoother and healthier skin � the perfect way to exfoliate and pamper your feet.

The O2 Spa offers facilities like massages, pedicures, manicures, facials etc. is the latest addition to the growing list of airport amenities at RGIA and is also reasonably priced depending on the service requested.

Mr. Viswanath Attaluri, Chief Commercial Officer, GHIAL said �With the opening the new spa, we are now offering passengers another opportunity to enhance their passenger experience. With the spa helping passengers de-stress and rejuvenate while enjoying the cool environs of the airport, we are able to further strengthen our spread of passenger offerings.�

About GHIAL:

GMR-HIAL is a joint venture company promoted by GMR Infrastructure Ltd., (63%); Malaysia Airports Holdings Berhad (11%), Airports Authority of India (13%) and Government of Andhra Pradesh (13%), with a mandate to develop a world-class international airport spread over 5,495 acres in Shamshabad, about 25 kms from the main city of Hyderabad.

This project � Rajiv Gandhi International Airport � is set to position Hyderabad as a prominent player in the global aviation map contributing to the prosperity, development and economic well-being of the region.

This project � Rajiv Gandhi International Airport � is set to position Hyderabad as a prominent player in the global aviation map contributing to the prosperity, development and economic well-being of the region.

Ambani starts off the world's most expensive home

2008-05-08T05:50:00.000-07:00

Inside The World's First Billion-Dollar Home
Matt Woolsey, 04.30.08, 6:00 PM ET

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In Pictures: Inside The World's First Billion-Dollar Home

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While visiting New York in 2005, Nita Ambani was in the spa at the Mandarin Oriental New York, overlooking Central Park. The contemporary Asian interiors struck her just so, and prompted her to inquire about the designer.

Nita Ambani was no ordinary tourist. She is married to Mukesh Ambani, head of Mumbai, India-based petrochemical giant Reliance Industries, and the fifth richest man in the world. ( Lakshmi Mittal, ranked fourth, is an Indian citizen, but a resident of the U.K.)

In Pictures: Tour The World's First Billion-Dollar Home

Forbes estimated Ambani's net worth at $43 billion in March. Reliance Industries was founded by Mukesh's father, Dhirubhai Ambani, in 1966, and is India's most valuable firm by market capitalization. The couple, who have three children, currently live in a 22-story Mumbai tower that the family has spent years remodeling to meet its needs.

Like many families with the means to do so, the Ambanis wanted to build a custom home. They consulted with architecture firms Perkins + Will and Hirsch Bedner Associates, the designers behind the Mandarin Oriental, based in Dallas and Los Angeles, respectively. Plans were then drawn up for what will be the world's largest and most expensive home: a 27-story skyscraper in downtown Mumbai with a cost nearing $2 billion, says Thomas Johnson, director of marketing at Hirsch Bedner Associates. The architects and designers are creating as they go, altering floor plans, design elements and concepts as the building is constructed.

Video: World's Most Expensive Home

The only remotely comparable high-rise property currently on the market is the $70 million triplex penthouse at the Pierre Hotel in New York, designed to resemble a French chateau, and climbing 525 feet in the air. When the Ambani residence is finished in January, completing a four-year process, it will be 550 feet high with 400,000 square feet of interior space.

What $1 Million Buys In Homes Worldwide

The home will cost more than a hotel or high-rise of similar size because of its custom measurements and fittings: A hotel or condominium has a common layout, replicated on every floor, and uses the same materials throughout the building (such as door handles, floors, lamps and window treatments).

The Ambani home, called Antilla, differs in that no two floors are alike in either plans or materials used. At the request of Nita Ambani, say the designers, if a metal, wood or crystal is part of the ninth-floor design, it shouldn't be used on the eleventh floor, for example. The idea is to blend styles and architectural elements so spaces give the feel of consistency, but without repetition.

Antilla's shape is based on Vaastu, an Indian tradition much like Feng Shui that is said to move energy beneficially through the building by strategically placing materials, rooms and objects.

Pricey Pad
Atop six stories of parking lots, Antilla's living quarters begin at a lobby with nine elevators, as well as several storage rooms and lounges. Down dual stairways with silver-covered railings is a large ballroom with 80% of its ceiling covered in crystal chandeliers. It features a retractable showcase for pieces of art, a mount of LCD monitors and embedded speakers, as well as stages for entertainment. The hall opens to an indoor/outdoor bar, green rooms, powder rooms and allows access to a nearby "entourage room" for security guards and assistants to relax.

Ambani plans to occasionally use the residence for corporate entertainment, and the family wants the look and feel of the home's interior to be distinctly Indian; 85% of the materials and labor will come from outside the U.S., most of it from India.

What do you think of Ambami's home? Weigh in. Add your thoughts in the Reader Comments section below.

Where possible, the designers say, whether it's for the silver railings, crystal chandeliers, woven area rugs or steel support beams, the Ambanis are using Indian companies, contractors, craftsmen and materials firms. Elements of Indian culture juxtapose newer designs. For example, the sinks in a lounge extending off the entertainment level, which features a movie theater and wine room, are shaped like ginkgo leaves (native to India) with the stem extending to the faucet to guide the water into the basin.

On the health level, local plants decorate the outdoor patio near the swimming pool and yoga studio. The floor also features an ice room where residents and guests can escape the Mumbai heat to a small, cooled chamber dusted by man-made snow flurries.

For more temperate days, the family will enjoy a four-story open garden. In profile, the rebar-enforced beams form a "W" shape that supports the upper two-thirds of the building while creating an open-air atrium of gardens, flowers and lawns. Gardens, whether hanging hydroponic plants, or fixed trees, are a critical part of the building's exterior adornment but also serve a purpose: The plants act as an energy-saving device by absorbing sunlight, thus deflecting it from the living spaces and making it easier to keep the interior cool in summer and warm in winter. An internal core space on the garden level contains entertaining rooms and balconies that clear the tree line and offer views of downtown Mumbai.

The top floors of entertaining space, where Ambani plans to host business guests (or just relax) offer panoramic views of the Arabian Sea

Marriott, Emaar to manage two more hotels

2008-04-01T04:17:00.000-07:00

Global hospitality giant Marriott International and realty major Emaar MGF are tying up to manage two more luxury hotels in the country. The deal in this regard is expected to be signed in Mumbai tomorrow.

With this, the two companies will build and operate three hotels in the country. Marriott has already tied up with Emaar to operate a 300-room JW Marriott in Kolkata.

BIG DEAL

US-based Marriott International has six hotels in the country. It recently announced opening 18 new hotels by 201

Marriott has also tied with Delhi-based realty major Unitech to develop hotels in the country including Ritz-Carlton in Kolkata and JW Marriott in Hyderabad and Bangalore

Banking on the acute shortage of hotel rooms in the country, a host of real-estate companies have announced hotel projects and tie-ups with international hospitality majors

The new properties could come up in Pune and Chennai, sources said. However, total investments and the brand of the hotels could not be ascertained.

Confirming the development, Navjit Ahluwalia, vice-president, Hotel Development India and Indian Sub-continent, said, �We are taking forward our association with Emaar MGF by announcing two additional properties in India shortly.� Ahluwalia refused to divulge any further details.

US-based Marriott International has six hotels in the country, with 1,528 rooms in total. It recently announced opening 18 new hotels by 2011, taking its total tally to 25 hotels with a total of more than 4,500 rooms.

Its brands include luxury brand JW Marriott, upscale Marriott and Renaissance brands, its moderately-priced Courtyard by Marriott and deluxe Marriott Executive Apartments for travellers.

Among its 18 upcoming properties, five will be JW Marriotts in Bangalore, Chennai, Pune, Kolkata, and Chandigarh, one Ritz-Carlton hotel in Bangalore, one Marriott hotel and convention centre in Pune, nine Courtyards by Marriott properties in Ahmedabad, Amritsar, Gurgaon, Hyderabad, Kolkata New Town, Noida, Pune City Center, Pune Hinjewadi and Mumbai International Airport, two Marriott Executive Apartments in Hyderabad and Gurgaon, and an expansion of the Renaissance Mumbai Hotel & Convention Center.

Marriott has also tied up with Delhi-based realty major Unitech to develop hotels in the country, including Ritz-Carlton in Kolkata, JW Marriott in Hyderabad and Bangalore, and manage two hotels in Mumbai owned by the Raheja group.

�We are thrilled by the continued growth of our lodging portfolio in India,� said Ed Fuller, the president and managing director of international lodging for Marriott International, while announcing Marriott�s India plans recently.

For the 175-room JW Marriott Hotel, Chandigarh, Marriott has already tied up with the Delhi-based Uppal group and for the 113-unit Jubilee Hills Hyderabad, Marriott Executive Apartments has partnered with Viceroy Hotels. NYSE-listed Marriott International had 3,000 hotel properties in 69 countries and territories worldwide and a top line of $12.2 billion for 2006.

Emaar MGF, a joint venture between Dubai-based Emaar and Delhi-based MGF, has announced major hospitality plans.

In June 2007, the company announced a 50:50 joint venture with Premier Inn, a unit of the UK�s hotel major Whitbread.

The JV is planning to invest Rs 2,400 crore ($600 million). Emaar has also tied up with another hotel company, Accor, to bring 100 Formula-1 hotels across India with an investment of Rs 1,200 crore ($300 million).

Banking on the acute shortage of hotel rooms in the country, a host of real estate companies has announced hotel projects and tie-ups with international hospitality majors.

India to become 2nd biggest telecom market

2008-03-24T10:49:00.000-07:00

India had 250.9mn wireless subscribers at the end of February, compared with 260.5mn for the US and 540.5mn for China

India may overtake the US as the world's second-largest mobile-phone market after China next month, the Telecom Regulatory Authority of India (TRAI) said on Monday. India had 250.9mn wireless subscribers at the end of February, compared with 260.5mn for the US and 540.5mn for China, the telecom regulator said in a statement today.

India added 8.53mn new mobile-phone subscribers in February and 8.77mn customers in January. The US is adding about 2-3mn new users each month, TRAI said. China is adding around 6-7mn new subscribers in a month. India's monthly wireless subscriber addition is the highest in the range of 8-9mn a month.

Thus India's wireless subscriber base during the first half of April will surpass that of US and will become second largest wireless network in the world, TRAI said. Not only this, the total subscriber base (wireless + wireline) of India will also cross 300mn mark in April.

The total number of telephone connections reached 290.11mn at the end of February compared to 281.62mn in January. The overall tele-density is 25.31% at the end of February compared to 24.63% in January.

In the wireline segment, the subscriber base slightly decreased to 39.18mn in February as against 39.22mn subscribers in January. Total broadband subscribers base reached 3.47mn by the end of February compared to 3.24mn by the end of January.

Saakshi Telugu Newspaper Launched today

2008-03-23T10:09:00.000-07:00

Saakshi telugu news paper was launched today at the Hyderabad International Convention center amid huge fan fare.

The event was attended by all the political circles including the Governor and State congress affairs in charge Mr Veerappa Moily. Other guests who were also present included Mr Ramalinga Raju, Mr Chiranjeevi, Mr Nagarjuna, Mr Srinivasan(India Cements Chairman) etc.

The MC was done by Film star Ms Bhoomika Chawla and by Sameer. The event involved the inauguration speech by Mr Jagan Mohan Reddy, Chairman of Saakshi group and by Mr YSR. The speech of Mr Narayana, Secretary of CPI was really hilarious and was candid. He made fun of the media for highlighting that he had chicken on Oct 2nd after a padayatra. Where the padayatra was totally ignored and only the fact that he inadvertently had chicken was highlighted.

Chiranjeevi was called for to the dias to inaugurate the launch of the film section of the Newspaper, while Mr Nagarjuna was called for to inaugurate the womans section of the paper. Mr Ramalingaraju launched the online version of the paper.

The speech by Mr ND Tiwar, Governor of AP was very long by had a strong message to Mr jagan to incorporate the local media news along with the world news.

The fashion show was created in a unique way, where they depicted the history of the news paper as parts of the fashion show.

Overall, a great 3 hour event. The paper looks very promising with 23editions launched simultaneously with an expected subscription of over 13Lakhs + copies sold on day one. This is the first time in the history of any news paper on the earth that it is being launched with so many copies. lets keep our fingers crossed. Cant wait to see the first edition tomorrow.

India likely to be 90 pc of US economy by 2050

2008-03-08T02:29:00.000-08:00

The mass of world economic activity would well and truly shift to Asia in the coming decades with the Indian economy projected to grow at 8.5 per cent, much faster than China’s 6.8 per cent and behind only Vietnam’s 9.8 per cent, global consulting firm PriceWaterhouseCoopers (PwC) said in a latest report. By 2050, India’s economy would be as large as 90 per cent of United States and China becoming even bigger.

By 2050, India’s economy would be as large as 90 per cent of United States and China becoming even bigger.

According to the report, India rather than China tops the growth league table, a reflection of India’s working age population, which is projected by UN to continue to grow at a healthy rate unlike China.

There is also greater scope for productivity and education levels to rise across Indian population, enabling the country to catch up with Organisation of Economic Cooperation and Development (OECD) countries in the long run, it said.

“The global centre of economic gravity is already shifting to China, India and other large emerging economies and our analysis suggests that this process has a lot further to run. Our latest projections suggest that China could overtake the US in around 2025 to become the world's largest economy and will continue to grow to around 130 per cent of the size of the US by 2050,” it said.

Brazil seems likely to overtake Japan by 2050 to move into fourth place, while Russia, Mexico and Indonesia all have the potential to have economies larger than those of Germany or the UK by the middle of this century.

“But the fastest mover could be Vietnam, with a potential growth rate of almost 10% per annum in real dollar terms that could push it up to around 70% of the size of the UK economy by 2050,” PwC head of Macroeconomics John Hawksworth said.
The report also highlights that there are many other alternatives worth considering, depending on the nature of the investment and the risk tolerance of the investor.

Nigeria, while high-risk, has the long-term potential to overtake South Africa to be the largest African economy by 2050. The Philippines, Egypt and Bangladesh also have high growth potential but also high risk levels. But with the possible exception of Vietnam relative to Turkey, the additional analysis does not change the conclusion from earlier PricewaterhouseCoopers research that the E7 will remain the largest emerging economies through to 2050.

Hawksworth said rapid growth of the emerging economies does not mean the demise of the established OECD economies. In fact it should prove to be a boost for them through growing income from exports and overseas investments, even as the OECD share of world GDP declines, he said.

Novotel launches India's first Signature Salon & Spa

2008-03-04T10:51:00.000-08:00

March 4, 2008
Hyderabad

www.shahnazspa.in

Bhumika Chawla launched spalour at Novotel today. After inauguration Bumika Chawla said, "I had been the user of Shahnaz's herbal beauty products since my childhood. I come to this spa everyday. and spending time here is like spending time in a resort. This spa also offers a party atmosphere where the entire spa is booked for you and your friends to celebrate as you are getting served."

The Shahnaz Signature Salon and Spa is a unisex Spalour offering the world renowned Shahnaz husain treatments for skin, hair and body. The spa is equipped with Steam, Jacuzzi, Sauna, Change rooms, Pool and health club. Cleansing, purifying, strees`relieving and rejuvenating masseges are provided among various other services. The formulations used for the treatments rely on the rich Indian herbal heritage. Innovative premium procedures like Shahnaz Diamond, Gold, Pearl, Oxygen, Aromatherapy, Flower and Fruit facials are being offered that are luxurious treatments essentially for revitalizing and rejuvenating of skin. Apart from general care, there are treatments for specific skin and hair problems, like pigmentation, pre-mature ageing, acne, scars and so on, with healing and beauty enhancing treatments.

“Being able to relax by the pool side and getting your pedicure, manicure, head & foot massages done is definitely one-of-a kind experience. Novotel Hyderabad by virtue of its serene campus seated in a sprawling 15-acre campus, feels like a resort in a city. One does not have to travel to a distant location, to smell the chamomile and soak in rose petal baths. You can opt for a whole-day relaxation package, to get away from it all, right here, in the city of Hyderabad” explains Ritesh Mastipuram, The owner of the spa.

Shahnaz Husain Signature Salon and Spa is a celebration of nature, right from ambience and décor to the luxury treatments, all in delightful with the “nature” theme. it offers an ambience that immediately refreshes body, mind and soul, the way only water can. Indeed, the location is like an oasis, in the midst of urban life. You can relax in total luxury and be pampered with a variety of body massages, scrubs, wraps and facials, all with the gentle rejuvenating touch of nature.

The design attitude is upmarket and yet, understated, using natural materials and fabrics that manifest in the form of natural slate on walls, ahimsa silk (silk woven without killing silk worms) coloured with vegetable dyes and used as embedded panels in the wall. The doors are fashioned with banana fibre weave sandwiched between glass panels, while massage rooms have khas fabric along the walls, for an exotic natural fragrance. The attraction is a lounge, with seats upholstered in plush silk, affording a panoramic pool view, where patrons can relax and enjoy t the spa and salon treatments.

Various Packages
Pamper yourself with Diamond body Polish, the epitome of luxury, designed to invigorate the entire body, smooth away dead epithelial cells with a Diamond Scrub. Creams and masks, also containing diamond, are used for body polishing, making the skin satin smooth and radiant. Deep tissue massage improves blood circulation, leaving the body relaxed, yet revitalized, with a tingling refreshing feeling, ideal for removing fatigue and for soothing both the body and mind.

Head Spa treatments are also available. Ayurvedic head massage is given with warmed herbalized oils. It follows a specific technique, which helps the absorption of oil deep into the scalp. Gentle pressure is applied on specified points. This is said to direct the flow of energy along desirable channels. The massage helps to achieve the ideal balance, improve blood and lymphatic circulation, removing fatigue, bringing about total relaxation. A choice of hair packs is offered, while after shampoo, special conditioning is done, to add luster to the hair.

The Signature Spa currently offers a variety of spa packages, such a Jet Lag Recovery Package, with a choice of body massage, foot reflexology and eye massage, priced at Rs.2,500/-. The “Whole-Day Rejuvenation Package” Includes Massage, facial, wrap, scrub, manicure and pedicure, along with lunch at the Square, Novotel Hyderabad’s all-day dining multi-cuisine restaurant, priced at Rs.5300/-. Special kitty party/round table packages are also offered, with group bookings. It is possible to book the entire spa for a group and avail select spa services on a per person rate, providing the opportunity of an enjoyable interactive spa session by the pool side. You will find the epitome of hospitality and courtesy, to make you feel right at home.

Shahnaz Husain’s link with Hyderabad

Shahnaz Husain strongly connects with Hyderabad and feels like a home away from home here. Her links with the city go back three or four generations. She was vborn in Hyderabad. Her maternal grandfather, Osman Uddaulah and his father Sir Afsar Ul Mulk were Commanders in Chief of the Nizam’s army. Sir Afsar Ul Mulk, her great grandfather, was the most favoured Aide-de-Camp of the 6th Nizam Mir Mahboob Ali Khan. Her paternal grandfather Mirza Yar Jung was Chief Justice of Hyderabad Shahnaz still remembers her ancestral home in Hyderabad, Rahat Manzil in Saifabad, to wich she returned at the age of 15 to shop for her wedding trousseau. Now, she is renewing her beautiful link with Hyderabad with a fabulous Shahnaz Signature Spalour.

Great care has been taken to pick highly trained therapists, expert masseurs and other personnel. For the spiritually inclined, there is Thai massage, or traditional Ayurvedic Shirodhara, or a healing deep tissue massage, to unwind after a hectic gym routine. The aromatherapy massage makes use of essential oils, derived from plant products and is valued for strees reduction, elevating the mood and achieving a sense of peace and calm. Tigger point, lymphatic drainage, Balinese and Swedish massages by masseurs, trained in Singapore and Thailand, complete the list, It also offers and unforgettable and romantic spa experience in the couple massage room, with a large hand crafted mural depicting the tree of life and a 12-jet couple Jacuzzi to take a journey into serenity with yout loved one. You also have the options of Chocolate wrap, natural fruit wrap and milk scrubs that do wonders to your skin.

Here are some pics from the event...

http://www.flickr.com/photos/masti/sets/72157604040008300/show/

Bliss space gets bigger

2008-03-03T10:32:00.000-08:00

Innovation is the buzzword even when it comes to spas, says Ritesh Mastipuram, Kiran Yadav and Suman Tarafdar

Ayurvedic, Thai, Spanish, Balinese … spas are trying hard to go beyond the conventional to please your senses. Consider Rollerssage. Now what's that you may ask. Well, it combines hot stone treatment with massage. And mind you, these stones aren't the ordinary ones. These are semi-precious stones like Tiger Eye, Quartz. "They aren't just kept on the body. The masseur rolls them over. The idea is to tap the healing energy of the stones and combine it with the benefits of massage," says Melissa Wong, the spa manager at the Westin Sohna resort. Be prepared to part with Rs 5,200 for a 60-minute session and Rs 8,300 for a 90-minute one.

When Starwood Hotels & Resorts decided to open its first Westin property in India, they knew they had to offer something different. So, Rollerssage it was. The property, Westin Sohna Resort & Spa in Gurgaon, has other signature treatments as well - count in Heavenly massage (massage combined with herbal heat pouches) and Western Workout massage amongst the few. There's a lot of emphasis on experience too. Apart from its signature music, the signature scent in the spa ensures an instant sensory recall for guests who may have already experienced a Heavenly Spa. Leonia holistic resort in Hyderabad can bet on its innovations as well. Its Leo Juventa spa, scheduled to open in a month's time, sprawls across one lakh square feet. Nilesh Sharma, the spa manager of the property is busy giving the last minute touches to the 45 treatment rooms spread over six floors. "Innovation is the keyword," he says. Conventional is passé. Only something new and different can now create the buzz. That explains the aqua gym and the Body Capsule. The latter, a 45-minute therapy, seeks to combine hydrotherapy and colour therapy with steam jets!

The Aura, Chennai, awarded the most innovative spa of the year in 2007, bases itself on the navratna theme (with nine therapy rooms on a jewel theme). Its counterpart, Aura, at The Park, Kolkata plans a couple package at the 'Prema suite' in the pre-Valentine season for Rs one lakh. Besides being fed aphrodisiacs, along with a bottle of Dom Perignon and a caviar facial, there is also a diamond polish - a combination of fruit extract, vitamin A and diamond powder, which smoothens and firms the skin while acting as a natural moisturiser! Not to forget the post massage red wine jacuzzi bath.

The wellness industry couldn't have been healthier. M J Robertson, director and CEO of Vedic Village in Kolkata, is busy with the blueprint of another spa resort near Delhi. Robertson has seen the Kolkata property grow phenomenally - "in the past three years the Vedic village has grown from an 18-room resort to a 200-room one."

Little surprise then that India Tourism Development Corporation has announced its plans to set up premium spas in Delhi, Jaipur, Bharatpur, Jammu, Kosi and Bhubaneswar. Interestingly, the spas are to be set through public-private partnership.

Goa seeks to take a leaf out of Kerala's book by stressing on ayurveda, as the refurbished Devaaya Spa offers panchkarma treatment through special techniques such as hrud basti and kundalini (spinal) massage. This picturesque resort brings together Santulan Ayurveda as devised by ayurveda expert Dr Balaji Tambe. "The stress is on holistic living, while detoxifying and rejuvenating your body and mind," says Victor M Albuquerque, CMD, Alcon Victor group, who runs the centre.

Spas are also not hesitating to be flexible on timings and facilities. They are also innovating to attract the corporate client. "We charge Rs 75,000 to Rs 1,50,000 as annual fees, and allow unlimited use of our facilities," says Dharam Rudra, CEO Rudra Spa, Mumbai, which also remains open till late at night to allow its clients to relax after a hectic day's work. No surprises then that it won the Asia Spa Award for best marketing in 2007 and has a wait list of about 300. As the sector grows by leaps and bounds, there are also the inevitable shortfalls in adequately trained staff. "We have started hiring staff from Thailand," says Ajay Malik of Espace Spa at MBD Radisson, known for its chocolate-based treatments. "We have recently started the chocolate wrap, which imparts the 300 odd benefits of chocolate," says Malik. Incidentally, another new treatment getting popular is the ginger and turmeric-centred Balinese body massage, which gives the body the required heat, and is especially suited for winters.

Chinese vs Indian Stand up Comedy

2008-03-02T21:11:00.000-08:00

Really hilarious video from Rusell Peter...my fav stand up comedian...:)

The ingredients of success

2008-01-15T07:47:00.000-08:00

Everybody wants to be successful and those who go to B-schools have even greater expectations of success.

While that is reasonable, it is perhaps worthwhile to look at a few ingredients that make for phenomenal success. Sadly enough, those skills are not imparted — at least, not in an organised manner — at most B-schools in the country.

The power of communication: If one were to take a look at some outstanding business leaders, they have an important quality in common. They are all exceedingly good communicators. People like Jack Welch and Tom Peters, to name just two, were great communicators. Their vision and passion would come through clearly, both orally and in their writing.

Every budding manager needs to ask himself, “How good is my communication ability?” Today’s youngsters crack the CAT, are amazing in numerical ability and data interpretation.

They do work on their verbal ability as well, but in practice, I suspect that they have miles to go in communication and this is one area where business schools, despite having courses in the area, do little work on.

Management is all about people: If I were to ask God for one skill, it would be the skill to communicate with people. Successful people manage their relationships at work and outside with great skill and most of them have acquired theirs outside of business school as it is rarely, if ever, taught there.

Observe successful people in action and learn from them. Yet it is important to be your own natural self: successful managers of people are their own genuine selves, not phoney, not superficial. So, how good are your people skills? Can you disagree without being disagreeable? Think about it.

Selling is key: Successful people are wonderful salesmen. They are passionate about their products, services and organisations. They have insatiable energy and do not take “no” for an answer.

Business schools teach sales management, but hardly ever teach their students how to sell. It is a skill that anyone who desires success must acquire and, as with mathematics, the only way to excel at it is to practice.

The three key attributes of success to my mind are the ability to communicate, skills with people and a strong desire to sell. Most importantly, it is critical to enjoy what you are doing.

As the famous singer Bob Dylan said: “If you get up in the morning and go to sleep at night and in between do what you like, consider yourself a successful man”.

Ramanujam Sridhar graduated from IIM, Bangalore in 1982

Clearing the way for robust growth: An interview with India’s chief economic planner

2007-11-13T07:52:00.000-08:00

Having helped to put India’s economy on the right track, Montek Singh Ahluwalia has now changed focus, to addressing problems with the country’s infrastructure and financial and educational systems.

Adil S. Zainulbhai

October 2007

Montek Singh Ahluwalia has been deeply involved with India’s economic reforms since they were launched, in 1991. In those days, as secretary of the Department of Economic Affairs, he worked with then-finance minister Manmohan Singh to assemble a program that would deliver the country from “Hindu rates of growth”—the scathing label given to India’s seeming inability to sustain growth rates of more than 3 percent after its independence, in 1947.

Today Singh is prime minister and Ahluwalia, as deputy chairman of India’s Planning Commission, is the country’s chief economic planner and a close adviser to the administration. (The prime minister is the commission’s chairman.) While the country is basking in the success of economic reform (GDP growth hit 9.4 percent for the fiscal year that ended in March 2007), Ahluwalia is working to make sure that India can sustain these growth rates. The Planning Commission is targeting average annual growth of 9 percent in its 11th Five-Year Plan, which spans 2007 to 2012. The initial reforms, in the early 1990s, were “no-brainers,” the Oxford-educated economist says. They focused on dismantling the “license raj” (a tangle of regulations that gave bureaucrats too much control over too much of the economy and invited corruption) and on opening India’s tightly closed markets to imports and foreign investment. Strong growth followed. But Ahluwalia acknowledges that the next set of problems—infrastructure, education, and health care, for example—will be far more complex, and the pace of change hasn’t been as fast as he’d like.

Over tea in his office in Delhi, Ahluwalia recently talked with Adil Zainulbhai, a director in McKinsey’s Mumbai office, about Ahluwalia’s confidence in the country’s continued growth and the challenges that lie ahead.

The Quarterly: What was your reaction to India’s strong growth in 2006–07? Can it be sustained?

Montek Singh Ahluwalia: There is no doubt that we were very pleased, but I wouldn’t say we were entirely surprised. I’m not talking about the 9.4 percent growth in 2006–07 but about the fact that the economy has accelerated significantly in the past three years and looks set to continue robust growth in the current year.

Taking a longer perspective, the economy did very well in the first five years or so after the economic reforms of ’91. And then, after ’96 it slowed down a little. There were many reasons for this: the East Asian crisis, a downturn in the world economy, and later the collapse of the dot-com boom in 2001. There was some question as to when the economy would regain its bounce. Our perception was that the benefits of economic reform in India were going to be substantial but slow to surface simply because the reforms were introduced in a fairly gradual manner. We are now seeing the buildup of momentum with a tremendous surge of economic activity and investment in the private sector.

In the current fiscal year, 2007–08, the low estimate for growth is around 8.5 percent, and it could be closer to 9 percent. If you look at the four years from 2004 to 2007, you will see an average growth rate of 8.6 percent or so. I think that’s very good. I had expected an acceleration in growth, but I would say it’s better than I had expected.

We are currently projecting an average growth rate of 9 percent for the next five years. Many people think that’s a bit underambitious, given it was 9.4 percent last year. But I think an element of cyclical correction is going to take place.

Montek Singh Ahluwalia

Vital statistics

Married with two children

Education

Graduated with BA in economics in 1963 from St. Stephen’s College, Delhi

Received MA and MPhil in economics in 1968 from University of Oxford, where he was a Rhodes scholar

Career highlights

Government of India

Deputy chairman of planning commission (2004–present)
Member of planning commission (1998–2001)

International Monetary Fund

Director, Independent Evaluation Office (2001–04)

Department of Economic Affairs, Ministry of Finance, India

Finance secretary (1993–98)
Secretary, economic affairs (1991–93)
Commerce secretary (1990–91)

World Bank

Various roles, including chief of Income Distribution Division, Development Research Centre; deputy division chief, Public Finance Division (1968–79)

Fast facts

Author of a number of publications on economics, including Reforming the Global Financial Architecture, published by Commonwealth Secretariat in 2000; coauthor of Redistribution with Growth: An Approach to Policy, published by Oxford University Press in 1974

The Quarterly: What are the critical challenges India faces in sustaining this growth?

Montek Singh Ahluwalia: In the short run it’s infrastructure; a little bit longer term than that is education. We can’t do much about education in the short term, but we can do a lot over a five- to ten-year period.

Political sustainability is another dimension. In a democratic environment, people have to be able to see benefits reach them. From that perspective, a better story on agriculture is absolutely vital. Agricultural growth was 3.6 percent per year from 1980 to 1996, then slowed down to less than 2 percent. We want to bring it up to 4 percent. Faster agricultural growth will also stimulate the nonagricultural part of the rural economy, so it’s kind of a double-whammy effect.

Health is also a major priority. We need to address our high levels of infant mortality, maternal mortality, and child malnutrition, as well as gender gaps in school. The good news is we don’t have to worry about industry: give them a competitive market, reasonable macroeconomics, and deliver the infrastructure, and our entrepreneurs know what to do.

The Quarterly: How are you addressing the infrastructure shortfall?

Montek Singh Ahluwalia: We have not invested as much in infrastructure as we should have in the past. When the economy was growing at 6 or 6.5 percent, this constraint was less evident. One of the major objectives of the 11th Five-Year Plan, which we’ve just begun, is to sharply increase investment in infrastructure as a percentage of GDP, from less than 5 percent in 2006–07 to about 9 percent by the end of the five-year period.

This expansion is not going to take place through the traditional public-sector expansion route. The public sector cannot mobilize resources on this scale, especially if we have to invest massively in education and health. We have, therefore, crafted a strategy for infrastructure development based on public-private partnership. That’s not an easy thing to achieve. We estimate that about three-quarters of the increase in infrastructure investment above the business-as-usual projections would have to be privately funded. The industrialized countries, historically, created their infrastructure through the public sector. China also built infrastructure through the public sector, funded by the public-sector banks. We also will rely substantially on public-sector investment in areas where private investment cannot be expected—for instance, rural infrastructure. However, we want to encourage infrastructure development with private-sector entrepreneurs taking some of the risk wherever possible.

The good news is that it is possible. Telecommunications is one area where infrastructure constraints have been visibly relaxed. A huge amount of money came in, and it’s been used very efficiently. We’re hoping to replicate that result in other areas, but of course conditions differ across sectors. In roads, for example, the revenue model cannot work based on tolls alone. Therefore, the policy provides for capital subsidies up to a stated level based on competitive bidding for the lowest subsidy. However, even in roads, since the land is provided by the government, there have been cases where bidding has resulted in a negative subsidy.

The Quarterly: Are you confident that current plans will fix India’s infrastructure?

Montek Singh Ahluwalia: I am optimistic, but it will take time for results to show, especially since rapid growth will strain existing capacities. Consider airports for a minute. We are engaged with the private sector in the major modernization of Mumbai International Airport and Delhi International Airport. Two new private-sector airports—1 in Bangalore and 1 in Hyderabad—are nearing completion. By 2010 all 4 of these airports are going to be fully operational; 35 airports are being modernized through the public sector. You will see much better airport infrastructure by 2010.

Urban infrastructure is a very difficult problem and has to be tackled by state governments and municipalities. The central government has introduced programs designed to give states financial assistance linked to their efforts to undertake urban reform. Many of the states are responding. I expect that you will see very significant changes in this area over the next five to ten years.

The Quarterly: How are bottlenecks at the state level affecting growth?

Montek Singh Ahluwalia: There is a cascade effect of reforms starting in the center and then spreading to the states. However, there are important differences across the states. There are many examples of state governments recognizing that economic growth is going to result from attracting private investment and responding to this perception by trying to create an investor-friendly atmosphere.

Industry organizations routinely prepare rankings of states indicating the ones that are more investor friendly and those that are less so. Once politicians recognize that their performance is going to be judged by whether they’ve actually attracted investment and created organized-sector jobs, the internal political motivation to get things moving will increase.

The Quarterly: Has today’s prosperity reached all levels of Indian society?

Montek Singh Ahluwalia: I wish I could say, “Yes, definitely,” but this is one area where there are many deficiencies, and democracy and a free media ensure that we can never forget them. Terrific growth is taking place in some places, but there are parts of the country that don’t seem to be seeing an acceleration. We definitely need to look at that. Agricultural growth was low for many years, but in the past three years there has been an upturn. Is inequality widening? Marginally perhaps, as often happens in a growth acceleration, but much less than what has happened in China. However, the toleration of gaps is shrinking massively.

People no longer ask, “Have I got a school in my rural area?” They ask, “Is the quality of the school such that my child has a good chance of getting into a good educational institution?” This is a totally different question. People are now aware that many diseases can be treated by modern medicine, and they expect the public-health system to deliver quality medicine.Increased expectations of what should be delivered have led to a greater intolerance to the existence of gaps. That puts pressure on the government to deliver faster, which is on the whole a good thing.

People today also want much greater assurance of upward social mobility. One of the most positive things about the IT revolution in this country is that virtually every single one of the icons of the IT world is a new entrepreneur. That implicit social mobility resonates extremely well with the growing number of people who are getting access to education. These expectations are now spread over a much broader range of people: the growing Indian middle class. However, rising personal incomes don’t solve all problems.

Many people who are above the poverty line don’t have access to clean drinking water and good sanitation. In the absence of those two—even if your income takes you above the poverty line—your children are likely to suffer from diarrhea and waterborne diseases, and that will lead to child malnourishment, which is a major problem in India.

The Quarterly: Are comparisons between India and China useful?

Montek Singh Ahluwalia: They’re very useful. China began with its economic reform sometime in the late 1970s and quickly transitioned to a very high growth rate. It has maintained a 9 percent growth rate for 30 years. This created a natural expectation in India that we ought to be doing something similar because we are similar in terms of many basic economic parameters: two very large—previously very poor—countries that should both be able to accelerate. For a period, the fact that China moved much faster than India did not have the impact that it should have had, primarily because everybody thought our political system was totally different.

As China began to integrate with the rest of the world, and also as East Asia began to develop, this benchmarking—if China can do it and East Asia can do it, then India should also be able to do it—became a very important positive factor. Of course, we can’t do it the way China does, because they have a totally different political system. The way it’s going to be done in India has to be firmly anchored in how a democratic and very diverse society functions. India is behind China in terms of the takeoff, but we are pretty much on the same trajectory from now on, possibly with the advantage of having learned to work in an environment where public debate is both encouraged and dealt with. [Indian economist] Amartya Sen called us the “argumentative Indian,” and it can be exhausting at times, but debate is the other side of this coin.

The Quarterly: Is enough being done to increase power capacity?

Montek Singh Ahluwalia: I have no doubt that our performance in power over the past several years is the weakest. This is a difficult area where most of the critical actions lie in the hands of state governments. The central government has to put in place an appropriate legal and regulatory framework, and the good news is that this is now in place. Performance, however, is lagging behind. In the 10th Plan, which ended a few months ago, we were supposed to add 40,000 megawatts in power capacity, and actually added only 21,000. A lot of power plants that were in the works have slipped somewhat, and for the next two years we expect to see a very large increase in generation capacity as these come onstream. We haven’t actually set the target yet for the 11th Plan, but we are hoping to be able to add about 78,000 megawatts of capacity over the next five years.

Adding generation capacity will not be a problem. The real weakness is in the distribution end. We are running a system which, at the moment, doesn’t collect revenues on something like 34 percent of power that’s pumped into it because of theft and transmission inefficiencies. Some of the revenues collected are at very low rates. The result is a system that is not financially viable, making it difficult to attract private-sector investment in generation, since the power companies are not sure they will be paid. We have to improve the efficiency of the distribution system, which includes investment in distribution, metering, and management to control theft.

The second, very important reform in distribution is open access. The Electricity Act mandates that open access to the distribution grid will be allowed for power generators starting January 1, 2009. Anybody investing in generation today knows that by the time their plant comes onstream, they can reach high-tension consumers who have a connected usage above one megawatt using the existing distribution system to transmit the electricity.

Many people say that the system would be more efficient if distribution were privatized. Very recently, the state government in Delhi did privatize the distribution system. If it turns out that Delhi has been enormously successful with this experiment, then I think maybe other states might do the same. However, that’s a politically controversial issue and not something that the central government decides.

The Quarterly: Are further reforms needed in the financial system to accelerate growth?

Montek Singh Ahluwalia: There is no question that further reforms in the financial sector are necessary. The amount of capital controls needed is one dimension of decision making. How efficient your financial system can be, given controls, is a second dimension. We’re clearly heading toward a more open capital account, but we’re not doing it in one go. There are people who argue that government should declare that it would remove all capital controls in a defined, relatively short period—say, one or two years. Others argue for steady movement over a more extended time frame, putting in place the necessary preconditions first. The government is considering these proposals but has not taken a firm view on the issue.

'We definitely need to take stock of what we have achieved over the past ten years and put it in the context of what is needed now'

The Quarterly: And the financial system?

Montek Singh Ahluwalia: We definitely need to take stock of what we have achieved over the past ten years—which by the way is considerable—and put it in the context of what is needed now, given the changes that have taken place and the much faster global integration of the economy. The Planning Commission has established a new committee under Professor Raghuram Rajan of the Chicago Business School to do some blue-sky thinking about what should be our road map over the next five to ten years or so. The idea is to take an integrated view of the financial system: looking at banks, capital markets, insurance, microfinance issues, and the whole issue of financial inclusion.

In short, financial-sector reform is not just about capital account convertibility and creating a system that ensures the corporate sector has access to the best financial services in a world of completely open capital. That is certainly a legitimate aspiration, provided it is done within a framework of manageable macroeconomic risk. But I think financial-sector reforms have to include things like: what’s the best financial system to make sure that farmers can get access to credit? What’s the best way of making health insurance readily available? What’s an environment in which different types of risks can be effectively countered? And how can you ensure inclusiveness in all this? So it’s a much larger issue.

One of the new issues we must address relates to venture capital. We want a financial system in which it’s not just the big corporations who can benefit from borrowing on the strength of their balance sheet. We want a system in which two bright guys coming out of an IIT¹ should be able to attract some sort of venture capital funding to support them in pursuing new ideas.

The Quarterly: How difficult an issue is corruption?

Montek Singh Ahluwalia: Corruption is a huge problem—not just in India, but everywhere. However, India’s democratic, free-to-criticize atmosphere generates very strong incentives to hold the light up to any kind of wrongdoing. This is one of our strengths. If there’s any corruption in India, somebody will draw attention to it. As a result, we are focusing on ways of eliminating corruption in the functioning of the schemes that are supposed to reach ordinary people.

Take the state of Andhra Pradesh, for example: if you go to its Web site for the National Rural Employment Guarantee Act,² you can click on whatever district you want. You can then go to whatever village you want, and it will tell you what projects are under way in that village and, for each project, the people who were paid. Payment of wages is made through postal-bank accounts, eliminating the scope for leakage. As we make such things transparent, the democratic process itself will throw off the wrongdoing.

As the process of economic reforms has unfolded, some of the big, concentrated sources of corruption have been systemically eliminated. The central government, for example, does not give any licenses for anyone who wants to produce something somewhere, nor does it give import licenses. You can import whatever you want, provided you can pay the import duty, which is now very moderate. This has eliminated major sources of corruption that existed earlier. But one does hear complaints about local hassles, “transaction costs,” whatever. This is where state government reforms become important.

The Quarterly: Is the task ahead more difficult or easier?

Montek Singh Ahluwalia: The initial task of undoing some visibly dysfunctional controls that had been introduced a long time ago and should’ve been abolished a long time ago was easy. The task we’re looking at now is in many ways more complex. It’s not easy to find out how others are doing it and learn from them. In the financial sector, for example, should we be learning from China? To my mind they too have a long way to go in financial-system reform. So we are dealing with areas where conventional wisdom on what is good policy is only now being established and is changing all the time.

Look at issues of common resources—water, for example. Water is a major, major issue. Should we use market solutions? Obviously, some element of market solution to create behavior incentives has a role. But there are basic property rights issues. Who owns the water? Is it a common-property resource or should anyone be able to pump whatever water they can from under their land. These things weren’t important 20 years ago, because per capita availability of water was high. But the total demand for water is shooting up, and available supply is declining because of environmental degradation. Addressing these problems is not easy, and there are no ready-made solutions.

Upgrading India’s energy and transportation networks: An interview with a GM Rao

2007-11-10T21:33:00.000-08:00

The chairman of GMR discusses the problems of India’s infrastructure and rural economy.

Gautam Kumra

Web exclusive, November 2007

Active in airports, roads, and power, India’s GMR, led by founder and chairman G. M. Rao, is right in the middle of the country’s efforts to build up a weak infrastructure. While Rao expects the economy to remain vibrant, he worries that it can’t be developed fast enough to support current economic-growth rates. The chairman, whose roots are in the countryside, is also concerned that not enough has been done to strengthen the rural economy, which above all needs education, roads, and jobs to give villagers a chance to participate in the newfound prosperity.

GMR began almost 30 years ago as a single jute mill in the village of Rajam, in the eastern state of Andhra Pradesh. “Our journey to today’s GMR happened just accidentally,” Rao says. “Whatever opportunity came up, we have taken that opportunity.” Along the way, GMR has been active in banking, insurance, and breweries but left these industries to consolidate around infrastructure.

Along with minority partner Fraport, which manages the Frankfurt airport, in Germany, GMR is leading the effort to modernize Delhi’s international airport. It is also building a new international airport in Hyderabad and expanding the Sabiha Gökçen International Airport, in Istanbul. In addition, it owns three power plants, with projects under way for several others, and has completed 270 miles of highways.

Meeting in the GMR headquarters, in Bangalore, Rao and Gautam Kumra, a director in McKinsey’s Delhi office, discussed India’s economic prospects, GMR’s experience with public-private partnerships, and Rao’s passion for best-practice management of family businesses.

The Quarterly: Can India sustain its recent economic-growth rates?

G. M. Rao: In India the whole system is set up for 5 to 6 percent annual GDP growth. The sudden growth of more than 9 percent has surprised everyone, and sustainability is a very big question now. I have doubts that we can sustain this type of growth if two areas—the rural economy and infrastructure—aren’t taken up more seriously.

Ours is an agrarian country, and a lot of things have to happen in the rural areas. In villages there is not much connectivity, proper infrastructure, or educational facilities. Not even a scooter or a motorcycle can go on some of the roads; forget the tractor or the jeep. There is not an adequate supply of qualified teachers, and the infrastructure is not there. Many schools teach in local languages, and that’s not enough to move upward. Rural people need English schools and vocational schools, and we have to start moving aggressively with public-private partnerships. People in the rural areas are therefore moving to the cities, which are already very crowded. Education is very, very poor. The government must do better at addressing the rural economy.

Growth will also be difficult to maintain without large improvements in infrastructure. The government is putting a lot of focus on that, but there are still a lot of challenges. For instance, getting skilled labor is a very big problem now for infrastructure projects. Because of this, most of the projects are being delayed. We should look at something like Singapore’s Building and Construction Authority Academy, which was set up by the government to ensure that there’s a continuous supply of skilled labor for all the projects. At GMR, we’re also thinking about setting up our own training center, with courses of 90 days or six months.

G. M. RAO

Vital statistics

Born July 14, 1950, in Rajam, Andhra Pradesh, India

Married with 3 children

Education

Graduated in 1974 with degree in mechanical engineering from Andhra University College of Engineering, Vishakapatnam, Andhra Pradesh

Received honorary doctorate in philosophy in 2005 from Jawaharlal Nehru Technological University, Hyderabad, Andhra Pradesh

Career highlights

GMR

Founder and chairman (1978–present)

ING Vysya Bank (formerly Vysya Bank)

Chairman emeritus (2006–present)
Director and chairman (1994–2006)

Fast facts

Serves as chairman of board of Hyderabad International Airport

Established GMR Varalakshmi Foundation in 1991, which focuses on education, health and hygiene, community development, and empowerment of rural youth. In 1997 the foundation launched GMR Institute of Technology (GMRIT), an engineering college in Rajam, Andhra Pradesh

The Quarterly: Has the government been effective in addressing these problems?

G. M. Rao: The government has initiated several positive changes, and private players are also more and more interested in participating in infrastructure development. However, we need increased momentum to maintain these high growth rates. For example, the demand for housing, cold storage, and power outstrips supply—even considering planned capacity additions.

There are also problems with disbursing funds and implementing these improvement projects. The government is spending a lot of money to improve roads, but, ultimately, a lot of that is not reaching the people, and this has been happening for the past 60 years. Unless you change this, that allocated money is not going to do much good.

Implementation is also a problem. The government is not organized for this kind of growth or for speedy implementation of projects. It has to strengthen the whole system. For example, the National Highways Authority [of India] has one system for the whole country, but it should be regionalized into four sectors: south, north, east, and west. They could each call for their own tenders and monitor their own projects, while reporting to Delhi. Under the current system, we have so far only completed about 10 percent of the planned national road improvements—for instance, widening roadways from two lanes to four.

The Quarterly: What can the government do to improve the rural economy?

G. M. Rao: The government should encourage manufacturers to set up their factories in the villages. I read recently that a big multinational mobile-phone maker designs its phones here in India but manufactures them in China. This company makes millions of pieces a year, and about 2,000 people have jobs there. Why can’t we have the manufacturing as well? One reason is the Labour Act.¹ We cannot expand the manufacturing industry without the right to hire and fire. We have the capability to manufacture, but we have to change our labor policy.

We also need to expand microfinancing further into rural areas. So many people in villages fall into the debt trap. Their family land is subdivided among brothers into plots too small to cultivate effectively. Then they go to the moneylenders to get by. When they can’t make payments, the moneylenders take away their land. Families that were once respected landowners are now laborers, and they migrate to the cities.

The Quarterly: What is GMR’s role in building India?

G. M. Rao: The government is targeting investment of more than $475 billion in infrastructure over the next five years, and I am sure that GMR will contribute significantly to this nation-building program. Today we are present in both agribusiness and infrastructure. We want to play a major role in all three infrastructure sectors that we’re in today—energy, highways, and airports.

On the energy side, we generate 880 megawatts of power using liquid fuel. But we also have coal and hydro projects under way. We are also looking to enter transmission and distribution, and whenever nuclear opens up, we want to move into it. On roads, today we have built 270 miles of roads, and we want to go more aggressively into this sector. But as I said, there is a problem getting skilled labor.

Our final core area is airports—not just the buildings, but also the facilities. At Hyderabad we want to bring in international best practices for cargo, ground handling, and even the fuel farm² there. And today all Indian aircraft are going to other places—Singapore, Dubai—for maintenance and major repairs, so we’re setting up a maintenance hub in Hyderabad as well. In Delhi we want the airport to be like a city, an “aerotropolis.” Everything will be available around the airport: convention centers, residential complexes, a hospital, and entertainment facilities.

The Quarterly: Is it realistic for the government to expect the private sector to participate heavily in building the country’s infrastructure?

G. M. Rao: I don’t think the government is asking too much. Today we are involved in two public-private partnerships with the airports in Delhi and Hyderabad, and our experience has been very positive. The public side has the capabilities—the technical capabilities—but the speed is not there. We are bringing the speed, as well as the best technology, the best financial engineering, and the best talent in the world.

Take the Delhi [International] Airport as an example. Building that type of airport—five million square feet—with high standards would take a minimum of six or seven years anywhere in the world. But we’re helping to expedite the project, and we’ll build it within three-and-a-half years by implementing global best practice. The government is giving us its full support. It’s helping to get us all the clearances that are needed, like utilities, power, evacuating the land.

The Quarterly: What has made the partnership so successful?

G. M. Rao: You must be transparent and communicate with the government properly about any issue that comes up. I’m not facing any major problems now. One has to regularly communicate. Every month we have meetings with people from the Ministry of Civil Aviation, with the state government, with the lieutenant governor, or with cabinet secretaries, and we discuss what is happening on the project. But if what you say and what you’re doing are different, then the authorities in the government will become skeptical. If you’re honest and transparent, then you’ll get the clearances you need.

But the private side also has to do a little more than just communicate clearly. One has to be perseverant to get things done. Once the officers or bureaucrats are back in their offices, their time is not their own. They get preoccupied with meetings with internal and external constituencies. You’ll no longer have their attention. It’s up to you to keep things moving. I might need A, B, or C, but once an official is back in the office and is distracted by meetings and appointments, it could take 5, 10, 15 days—a month—to get what you need. So somebody has to follow up. You cannot have a passive relationship; you have to be very actively engaged.

The Quarterly: In July GMR and two partners³ won the bid to build a new terminal at Sabiha Gökçen International Airport, in Istanbul. What made you expand abroad?

G. M. Rao: With India’s government and the Left opposing further privatization of airports, it will take a lot of time before new opportunities come up in India. We already had a good airport business-development team and we had good skills. We had very little time to prepare for the opportunity in Turkey, but we geared up and won the bid.

We are open to other opportunities abroad in any of our sectors. We’re not going to go after all the tenders, though. We would prefer to be selective, ensuring that we deliver what we promise.

The Quarterly: How have you been so successful in these highly competitive tenders?

G. M. Rao: With the Delhi airport, it was really the opportunity of a lifetime. We worked for two years on the Delhi airport proposal, focusing on the ultimate goal of winning the bid. We concentrated on improving the financials, evaluating various options to combat the challenges. We visited different airports, set up a separate business-development team in Delhi, and examined all the parameters. We followed the same process for Istanbul.

The Quarterly: What organizational changes have you made as GMR grew?

G. M. Rao: I started business all alone. Then in the course of time, some friends joined me. It has been a long journey since those days, and we’ve taken advantage of opportunities as they came along; for example, when the government opened the power sector to private investments, we made the strategic decision to enter energy. Starting from a single jute mill in 1978, we now have more than 2,000 employees, a radically different focus, and annual revenues of almost 2,000 crores.⁴

Two recent changes are worth noting. First, we’ve launched a detailed performance-management system throughout the group and have introduced variable pay linked to performance as part of the process. Until now we’ve just had fixed compensation at all levels. Regular performance appraisals with clear-cut goals and talent-pipeline management have been introduced in a new human-resources-management system. This was very difficult to initiate. People were treating the appraisals as rituals that they had to go through. Then we included performance targets, and people started taking them seriously.

Next, about two years ago we formalized our strategic-planning process. And after identifying high-priority areas, we implemented a balanced-scorecard system to keep track of our progress. These scorecards are deployed down to the manager level and are reviewed at least twice a year.

The Quarterly: Can you tell us what you’ve done to ensure GMR’s health as a family-owned business?

G. M. Rao: When I was a director at Vysya Bank, one of my tasks was to talk to people with nonperforming assets who were about to default. I saw a lot of family businesses in trouble. I remember one well-respected family with two brothers. The younger would never sit down before the older one did, as a mark of true respect. Three years later the same brothers were fighting in the streets with knives. Once family members start fighting, their energy is diverted. They are no longer focused on the business, but on the fight. That was a big lesson for me.

Later, I went to a conference on family businesses and heard M. V. Subbaiah, of the Murugappa Group,⁵ speak. That was a real eye-opener for me. I started attending international family business summits, and I brought in top experts to look at my business. Then I called a meeting of my family and, very reluctantly, all eight members came. We had a lot of differences, and everyone was allowed to talk freely. We all started talking very animatedly, emotionally—arguing and what not. It took time to get everyone to reach consensus. I put it all on video so that the next generation gets to see how we executed it.

In the end we agreed to a family constitution model that outlines succession, conflict resolution, our values, and our mission. It says what qualifications are needed to enter the business, as well as our media and political policy. It even talks about what happens in case of a divorce. All these things needed to be addressed in detail to protect and delink the business from the family.

Today 65 percent of the top companies on the National Stock Exchange [of India] are family-owned businesses. We need to think about their governance. These companies are becoming so big that if the family gets estranged, it could impact the national business environment.

The Quarterly: What would you like to see GMR become?

G. M. Rao: We want to be a good player in infrastructure and a great institution. All of my family members share this idea. We want to be a value-driven institution. That is the type of brand that we want to create. I’ll know we’ve reached this point when something happens in the business and no one bothers me. Other people will take care of it, so I can go on a long vacation and nothing happens.

The big Indian Channel rush

2007-10-30T09:04:00.001-07:00

How niche channels like Good Times and Bindass are competing with the giants?

As contest prizes go, this one is out of this world. Literally. When Bindass TV launched last month, it offered to take viewers to a place normally reserved for its broadcast satellites: outer space. The space tourism offer is the prize in a competition that makes no bones about its purpose � drive viewership to the new, youth channel.

If the Bindass promo is �the mother of all contests�, media group NDTV�s deal with the UB Group is the mother of all co-branding associations. Its recently launched lifestyle channel, Good Times, has deftly interwoven the Kingfisher brand identity with itself � it is no coincidence that Kingfisher�s tagline �The king of good times� is remarkably similar to the channel brand.

The Indian cable and satellite universe is already packed and in the coming months it will only get further crowded. Over the next 12 months, another 100 channels will be added to the existing 230 and according to industry estimates, by 2009 a staggering 700 channels could be beamed into Indian homes.

With barely shoving room available for all these channels, how do Good Times and Bindass plan to stand out in the crowd?

The smaller picture
Take a closer look, and the picture improves. According to a recent Ficci-PricewaterhouseCoopers report, television revenues will grow at 22 per cent a year to touch Rs 51,900 crore by 2011.

The current size: Rs 19,100 crore (including advertising, subscription and other revenues). The bulk of this growth is likely to come from niche, not general entertainment, channels.

The five general entertainment channels � DD, Star, ZEE, Sony and Sahara - account for only 35 per cent of annual TV advertising, while regional channels take another quarter. That leaves channels broadcasting everything from sports, wildlife to lifestyle with 40 per cent.

Meanwhile, according to the Peoplemeter system of research firm TAM Media, in the past three years, the only genres to have increased viewership are music, news and children�s programmes.

The losers: sports and general entertainment. �There is a huge potential for channels offering unique content,� agrees L V Krishnan, CEO, TAM Media. And that is the slot Good Times and Bindass hope to conquer.

Mind the gap
Both new entrants are counting on filling unmet customer needs. But with 230 channels already on air, is there really any territory left unaddressed in television programming?

Bindass CEO Zarina Mehta insists there is. �India is a very young country. The 15-34 age group has no channels or entertainment brands addressing it. Bindass is a result of that insight,� she says.

The insight is based on a study Synovate conducted for UTV that found almost 30 per cent of those polled (most were in the 15-34 age group) were moving away from general entertainment channels and drifting towards news, lifestyle, Hindi movie and children�s channels. (Incidentally, TAM�s Peoplemeter confirms that finding: the viewership share of general entertainment channels has dropped from 24.2 per cent in 2004 to 22.4 per cent now.)

Meanwhile, a spike in lifestyle channels� viewership is easily explained: increasing affluence and rising aspirations.

A recent McKinsey report on India�s consumer market predicted that by 2025, India�s wealthiest group will be 23-million strong. Simultaneously, the middle class will grow almost 12 times, from 50 million now to 583 million by 2025.

That�s exactly what Raj Nayak, NDTV Media�s CEO, is counting on. �After the basics in life are covered, what you are left with is lifestyle,� he points out.

Good Times� agenda is, therefore, simply defined: �A destination for Indians where they can find everything that is included in their definition of lifestyle.�

But where Bindass is arguably the first youth-oriented entertainment channel, there�s really nothing new about lifestyle programming in India: a dedicated channel, Discovery Travel & Living, has already been around for over three years. That�s where content will make a difference. �Our programming will be the biggest differentiator,� agrees Nayak.

Unlike DT&L, which offers a mix of international and some local programmes, Good Times has opted for 100 per cent local content.

The thinking behind the strategy: international format local coverage doesn�t just cater to viewers� aspirations; it offers them accessible indulgences. (It also offers the channel an opportunity to drive local advertising, but more on that later.)

For instance, a recent show on DT&L featured a traditional Chinese meal, while a food show on Good Times is likely to offer European recipes made with Indian ingredients.

Will the local touch help? Consider this: Good Times launched on 7 September and already has a channel share of 0.06 per cent, on par with DT&L (Source: Tam Media).

Of course, the novelty factor may be responsible for part of these numbers, but Nayak is convinced that he�s on to a winning format. �Besides, we are still experimenting and can tweak programmes based on viewers� responses,� he points out.

Local flavour is important at UTV, too. Bindass�s two channels (movies and youth entertainment) offer a mix of action, comedy and extreme sports � all in Hindi. It seems to be clicking with audiences: launched on 24 September, Bindass claimed a 0.24 per cent share in the first week.

But Bindass�s programming strategy is not restricted to going glocal. It is also making its programmes available through mobile phones, and is also extending into gaming, merchandise, retail and events.

The channel has entered into partnerships with mobile service providers such as Airtel, Vodafone, BSNL, Idea, BPL, Aircel, Spice Telecom and MTNL. Subscribers who are linked to these networks can download one- to two-minute long, mobile-specific programmes. �This way we can deliver content exclusively created for the target group,� says Mehta.

Will Bindass�s strategy work? It is certainly popular internationally. David Jones, global chief of ad agency Euro RSCG, calls this trend �mass individualisation�. �Globally, television channels are trying to deliver programming targeted at a focused audience and not necessarily through a television screen,� he adds.

It�s been tried in India, too, earlier. A few years ago music channel MTV also attempted to extend its offerings beyond television, but with limited success. Industry analysts believe MTV may have been ahead of its time.

The Indian entertainment industry is now maturing, they point out � the growing penetration of internet and mobile services will also act in its favour. �The market is more ready now,� says Navin Shah, CEO of branded entertainment agency P9 Integrated. The caveat: Bindass must treat all these avenues as mainstream businesses, rather than add-ons.

The bottomline
The real battle in the television business is fought not over content, but revenues. Advertising still accounts for about 85 per cent of the income of television broadcasters, and that�s not likely to change for either Good Times or Bindass.

Which is why both channels are treating their lead advertisers very well indeed. All publicity for the channels is preceded by the sponsors� brands � ITC Foods� Bingo for Bindass, and Kingfisher for Good Times.

NDTV�s tie-up with Kingfisher is particularly interesting, not least because this is the first media alliance of its kind in India. As part of the five-year deal, the channel carries the Kingfisher tag and will be aired on board Kingfisher�s flights. The UB Group has also committed advertising to the channel (estimated at around Rs 100 crore). �It�s much like getting venture capital funding,� admits Nayak.

According to industry estimates, the average annual ad revenue of an Indian TV channel is around Rs 30 crore (exceptions like Star Plus�s Rs 800 crore annual revenues aside). By that reckoning, Good Times� guaranteed annualised revenues of around Rs 20 crore even before the channel went on air is decent going for a new channel. Besides, it doesn�t plan on relying on the Kingfisher deal alone.

The channel also intends tapping into advertisements that are currently controlled by the print media: the local content will help the channel connect better with advertisers, believe analysts.

�With more international luxury brands entering the country, Good Times could also compete for the same ads as, say, Vogue,� adds Shashi Sinha, chief executive, Lodestar Universal, a media buying agency.

How does Bindass�s advertising strategy compare? While it is specifically targeting youth brands, where it differs from the free-to-air Good Times is in its dependence on subscription revenues.

Bindass launched as a pay channel and has already set up its distribution platform. That�s the way forward, believes TAM Media�s Krishnan. Even now, subscription revenues are higher than advertising income. Only, routine under-declaration by cable operators means that broadcasters receive only a fraction of their due share.

Now, with more households going the DTH and CAS way, the improved transparency is likely to mean better declaration of subscription revenues. Besides subscription, Bindass is also counting on mobile programming downloads proving a regular revenue stream. �Content exclusively created to the requirements is a critical revenue option,� says Mehta without divulging numbers.

11th Plan target is 85% of present power capacity

2007-06-10T01:52:00.000-07:00

If the power generation capacity that is to be added in the 11th Plan (2007-2012) — 78,577 Mw — was a difficult number to digest, here is another which is even bigger.

Capacity addition could actually be close to 1,10,000 Mw or about 85 per cent of the current installed capacity of 1,32,330 Mw, if “best efforts” by the Centre and the states yield results.

“Setting a target of 78,577 Mw is a low-risk exercise, since we know that there are more projects under construction,” explained a senior power ministry official.

That, however, does not mean that these projects are without risks. They could be hit by financial hurdles, the 11th Plan working group has estimated an investment requirement of about $250 billion for this sector over the next five years; by equipment constraints and by a very real manpower constraint.

There is a severe shortage of construction equipment like cranes, dumpers, loaders and excavators (for hydro projects). According to the Construction Industry Development Council (CIDC), additional equipment worth Rs 6,129 crore would need to be secured for commissioning of 14,000 Mw per year.

The CIDC’s inputs will be used in the background paper prepared for a power conference next month. The aim of the conference will be to look at key inputs required for the power sector in the 11th Plan and beyond.

The paper also highlights the “immediate attention” that the manpower issue requires. The manpower gap for the hydro and thermal sector — which account for a major chunk of capacity addition in the 11th Plan and beyond — is a whopping 60,000.

This includes supervisory staff of about 12,000 while the rest are skilled and unskilled workers. These include welders (600), drivers (3,060), masons (2,280), crane operators (1,140) and carpenters (1,116).

While the manufacturing capacity for the main equipment for power plants — boiler-turbines and generators — is being increased by Bharat Heavy Electricals Ltd (BHEL), there is also a plan to invite entrepreneurs to invest in the balance-of-plant equipment like coal handling plants, high-pressure piping, water treatment plants, cooling water systems, fire protection gear and ash handling plants.

Kingfisher Swimware Calendar

2007-06-06T07:39:00.000-07:00

Here is the Kingfisher Swimware Calendar Slideshow....

Results of Fake Survey

2007-05-21T05:01:00.000-07:00

I happened to read this from a forum and couldn't resist posting the whole survey here:-

The following is a result of a fake survey. The survey was real but the things that went along with was fake. The idea was to find out what women thing about being in love, marriage, commitment and all the luggage associated with it. We gave 50 unmarried women between the age group 18 to 23 printed questionaries each having just 20 questions and asked them fill it and post to an address. One lucky entry would get an all expenses paid lunch in Taj Banjara!. Belive me, we got all the responses filled and posted in 5 days flat!.

The women were selected on face value and interaction and were found have fairly higher IQ level. For Ex - Some boys put their hands in the pockets and play billiards. If you got what i meant, then the women were of your IQ level or more!.There was no compulsion in disclosing their identity
I hence present you the prominent findings of the survey.
One - 39 women said they would prefer men with avg body and great sense of humour,9 said they wanted men to be well built
Two - 49 women said, they would prefer an openair space for a data then a closed resturant. 1 woman wanted the date to be in her house
Three - 31 women prefered a bike for a date,8 wanted a car. The rest did not respond
Four - (Multiple choice)16 women wanted a gift which they can hide in their homes!, you know from mom and dad!!. 12 wanted a book, 18 wanted CDs and tapes, 22 wanted a long drive - "just you and me" types. 1 wanted a nice juicy kiss.
Five - 43 women said being commited is mutual and 7 said its the guy who should make efforts
Six - 36 women wanted only the guy to spend on dates, only 6 nobel souls did not mind to go dutch. Rest did not respond.
Seven - 4 wanted the guy to pick them up on a data, 40 wanted to meet each other somewhere in the city ( you know...no one should see). 5 wanted to go the guy's house and then start from there.
Eight - 17 women wanted to sit with their backs facing the resturant's entrance and the guy facing the resturant entrance. This is to avoid being seen.
Nine - 39 chose a nice calm resturant for a date, 3 chose a pub, 4 chose a movie.
The worst answer for " what do you think of being commited?" -" Commitment is like a bank account if you keep buliding it, it would help you in the long run"
The worst answer for " what do you think of marriage as an instutution?" - Marriage is an institution where even if you fail sometimes, the teacher or life partner would support you from all sides to keep you a student of the institution forever.
The worst answer for " What type of life partner do you think would suit you (less than 100 words) - My life partner should be able to understand me ,even if i fail to understand myself.He should praise me whenever i am good and scold me when i so something wrong. Hug me when i feel cold and kiss me when i look cute. He should always be with me in my thoughts and each and every heartbeat of mine.
The worst answer for the worst question " Do you think being love makes any business sense?" - No business and love should never be clubed together, the moment money factor comes in true love between a boy and girl, it starts to fade out. Money can buy everything, but not true love.

After the Maharaja Mac Is the Whopper Ready for an Indian Avatar? - NAM

2007-05-16T00:41:00.000-07:00

"After KFC, McDonald’s and Pizza Hut, now comes the news that U.S. fast food chain Burger King is mulling an entry into the Indian consumer market. Over the last couple of weeks there has been considerable talk that the Miami-based fast food giant is charting out its India foray.

Some reports have said that the company is looking for a local franchisee, as is its strategy across the world, and is in talks with several Indian players including the Future Group, that has experience in the sector through its retail garment chain Pantaloon and Chamosa food counters and the Cafe Bollywood eateries chain across the country

Ravi Jaipuria, who is a franchisee for Pizza Hut, KFC and Costa Coffee, is also reportedly in talks with Burger King.

Indian newspapers have quoted a Burger King spokesperson as saying: “We are at an initial stage of exploring the marketplace.’’

The company is likely to feel right at home as the biggest challenge in India will be the one it faces in the U.S. domestic market: the Oakbrook, Ill.-based fast food behemoth McDonald’s.

McDonald’s has already said that it has plans to invest $100 million to top the $200 million already invested in India, resulting in the number of its restaurants mushrooming to 100, with over 25 outlets in Delhi alone. McDonald’s, already in India for ten years, has plans to develop 100 outlets and 30-40 McExpress kiosks in the next two years. It also plans to expand to second-tier cities such as Surat and Vadodara in Gujarat and many more towns in eastern India.

Analysts say that Burger King could still enjoy a strategic advantage despite its late entry, with McDonald’s, Pizza Hut and KFC having already exposed the Indian market to U.S. fast food, culture and the presence of a fairly large pool of trained personnel.

As on June 30, 2006, Burger King owned or franchised a total of 11,129 restaurants in 65 countries and U.S. territories, of which 1,240 restaurants were company-owned and 9,889 were owned by franchisees.

It operates in three regions: United States and Canada; Europe, West Asia and Africa; and Asia-Pacific and Latin America. It plans to start its Japanese operations in mid-2007.

However, it is not only the Big Mac challenge that Burger King will have to face . Other chains have been making their moves as well.

The fight is over the 100 million Indians who spend close to $1 billion annually at fast-food restaurants. The fast-food market in India is growing at a robust 40 percent with pizzas taking a major slice. Smaller towns and cities are going to be the new target markets as income spreads from metropolitan cities to smaller towns. Half of 11 million households with an annual income of over $23,000 live here.

According to a survey by AC Nielsen an urban adult Indian is among the top 10 in the world in terms of frequency of fast food consumption. These figures, of course, do not compare to the estimated $30 billion market for pizza alone in the United States.

Consulting firm Pricewaterhouse Coopers has estimated that the Indian Fast Moving Consumer Goods market will be valued at $33 billion in 2015, up from $13 billion in 2006.

Most international food chains are painstakingly putting together spicy recipes to suit Indian palates and take on local competition such as the $250-million consumer food giant Haldiram’s. They have their work cut out: The Indian spicy snack samosa remains by far the number one selling item.

Yum Restaurants International, owner of Pizza Hut and KFC, with global sales over $13 billion, has announced that it will invest close to $25 million to scale up its presence, raising the number of KFC restaurants to 25 from the current 15 and Pizza Hut outlets to 150 from 126.

Domino’s, a world leader in pizza delivery, has an annual expansion expenditure of $1.5 million in India with 30 more outlets this year to add to 105 existing ones. It was the first global fast food chain to open outlets away from the large Indian cities.

U.S.-based Papa John’s, the third largest pizza company, opened its first outlet in Gurgaon, a suburb of New Delhi, in April last year and has 100 more lined up in north India. Papa John’s U.S. sales was $1.8 billion last year. The company has named Om Pizza and Eats India as the Indian franchisee.

KFC started off in 1995, opened 70 restaurants over the next eight years, and by 2014, plans 1,000 restaurants. The $5 billion U.S. fast food giant Subway, which has more than 25,000 locations in 84 countries, is the world’s largest submarine sandwich franchise. It has an aggressive strategy after opening its first outlet in 2001 in New Delhi. Subway is planning to invest over $40 million and has a goal of 200 stores by 2009, a substantial increase over its current 65 outlets.

India’s Panban International, a firm that imports hotel equipment, has joined hands with the successful Quick Service Restaurant chain in the U.K. and the Dixy Fried Chicken Euro Ltd with plans to roll out 100 outlets in five years.

South Korean fast-food franchise operator Genesis has set an ambitious goal of overtaking McDonalds by the year 2020. Trak Services, territory owners of the $125 million Mark Pi chain of Chinese restaurants, plans to expand to 100 outlets with focus on tier-II cities. It’s target is to reach an annual turnover of $12 million.

Philippines-based fast-food firm Jollibee Foods Corp has announced plans to expand to India and China. Indian family restaurant chain Nirula’s has sold its operations to Malaysia-based Navis Capital Partners last July.

According to Sanjay Narang, president of Mars Restaurants which owns popular fine dining restaurants including Jazz by the Bay and Tendulkar’s in Mumbai: “This is only the tip of the iceberg. Other countries particularly in Europe, North and South America and South East Asia have been able to exploit the hospitality potential in their countries to a far greater extent.”

Foreign food majors are also looking at the fast-growing processed food market. Korea Yakult Co, a $1-billion food company, is reportedly planning to invest more than $35 million to manufacture and market instant noodles, pasta, health beverages, green tea, soups and juices.

PepsiCo India is planning an investment of approximately $150 million to add to the 19 company-owned factories and 21 franchisees. From 1993 to 2003, the Coca Cola Company has invested more than $1 billion in India, making it one of the country’s top international investors. Gem India Advisors, a U.K.-based private equity fund, has picked up a 26 percent stake in Bakers Circle, a leading manufacturer of frozen bakery and confectionery.

The past few years have also witnessed the mushrooming of other feel-good locations such as upscale café bars. The $150-million organized coffee retail business is also jumped in the race to attract the elite Indian consumer. Today, there are an estimated 500 café outlets in the organized sector, but retail consultants KSA Technopak have said that the potential is over 2,000. Other analysts are even more bullish, They put the potential far higher — to 3,000-5,000. U.S.-based coffee retail giant Starbucks Corporation has announced that it is set to enter India in 2007.

The $150 million Ravi Jaipuria group has brought the Costa coffee brand to India through a franchisee tie-up with the £1.8 billion Whitbread PLC of the U.K. Gloria Jeans Coffee’s, one of the largest coffee chains in the world, also has its India plans chalked out.

The growth in fast food follows an overall boom in the retail segment even as Indians look to splurge their disposable income. Organized retail in India will grow into a Rs. 2 trillion business by 2010 in terms of value and generate 10 million to 15 million jobs over the next 5 years, the India Retail Report 2007, released recently, has said.

The report says that organized retail in India has the potential to generate 2.5 million direct jobs and 10 million more jobs in supporting activities

However, there is a downside to all this. To get a sense of what happens when fast food really catches on with consumers, you only have to look at the U.S.

Sugary carbonated beverages and high-calorie, over-processed convenience food has resulted in a health problem of epidemic proportions, which children particularly at risk. As obesity and diabetes stalk the nation, public health advocates are warning to take action before matters get worse.

In India, as the fast food culture takes off, health experts are warning about the health hazards of such high-calorie food, which will result in higher prevalence of obesity, especially afflicting children. According to a World Health Organization report, at least 17 percent of the male and 15 percent of the female population in India is obese.

India is one of the top ten obese nations with a population of more than 35 million diabetics. During the past 20 years, obesity among adults has risen significantly in the U.S. Clearly, there is plenty of (fast) food for thought.

‘Second Tier’ City to Rise Fast Under India’s Urban Plan - New York Times

2007-05-15T21:17:00.000-07:00

"NAGPUR, India — A year ago, this relatively small, forgettable city in the heart of India did not have an air-conditioned cinema. In the sweltering heat of summer, the rich would fly one hour to Mumbai, India’s financial hub, to see a movie and stock up on Levi’s jeans, Domino’s Pizza and other big-city treats that they could not find at home.

But if the government has its way, Nagpur will become a destination city itself. In an experiment that is highly unusual for this most unplanned of countries, the government is doling out money to Nagpur and other “second tier” cities to help them modernize — fast.

The plan is to provide the kind of modern conveniences, and infrastructure, that will attract more international investors to India. In doing so, the government is following the lead of China, where the government has invested in infrastructure such as roads and airports, taking a build-it-and-they-will-come approach that has drawn foreign corporations helping to fuel the country’s boom.

India’s government is also hoping its plan will stop disasters in the making in its largest, teeming cities as more people"

“One hundred million people are moving to cities in the next 10 years, and it’s important that these 100 million are absorbed into second-tier cities instead of showing up in Delhi or Mumbai,” Montek Singh Ahluwalia, the Indian government’s chief economic planner, said by telephone.

Already, Nagpur, with an estimated population of about 2.5 million, is a changed city. So far, the government has allocated $280 million for projects and has paid for everything from lush parks to new roads. And investors — drawn by the hope of a boom — have built several malls and a multiplex cinema, complete with air-conditioning.

A renovated airport will become the cargo hub of India, with a terminal that will be 100 times larger than the existing one and will handle at least 100 jets at a time instead of the current five.

The government is planning an ecofriendly mass-transit system to absorb an expected surge in road traffic, years before many residents even own a car.

The government is also building a special economic zone with ready-to-use water, electricity and fiber optic cable, in the hope of attracting 100,000 technology jobs to a city long dominated by coal mining. It is providing tax breaks for companies who set up businesses there.

Since its independence from Britain in 1947, the city-building philosophy of India has been, to put it gently, laissez-faire. Except for the recently developed technology hubs of Bangalore and Hyderabad, India has not added cosmopolitan, globally connected metropolises to its old ones: Calcutta, Delhi, Madras and Mumbai.

And those cities have shown the strain as more people have poured in from the countryside in recent years.

In Mumbai, a majority of the more than 15 million residents live in slums, and a river of sewage passes through the middle of the city. Delhi is chronically short of clean drinking water and electricity.

So far, the government has pledged to spend $29 billion over seven years to upgrade 62 cities besides Nagpur. Grants are given only to cities that can show good fiscal controls and enact business-friendly policies like scaling back rent control.

No one knows if India has the stamina to make Nagpur a truly international hub, and then transform scores of other cities. But many experts say that the plan to remake smaller cities could be a key to India’s continued economic growth.

“Much of India’s future will undeniably be made in the second-tier cities,” said Ashutosh Varshney, a specialist on Indian political economy at the University of Michigan in Ann Arbor. The existing metropolises “will reach saturation points before long, or have already reached such points.”

The second-tier cities could address the needs of local and foreign corporations that have complained about soaring land prices and increasing wages in the country’s most modern cities.

Experts say the government plan could also provide a boost to home-grown businesses. More international airports, for instance, could help raise incomes for the country’s hundreds of millions of farmers by making it easier for their produce to reach export markets.

Nagpur has a head start on most of the other cities expected to receive government money. Because the government selected it as the air cargo hub for the country, skeptical investors have more hope that this obscure city will eventually rank with the busiest air centers in the world.

Today, the Nagpur airport is an airstrip. Visitors deplane and walk across the tarmac to enter the terminal. It takes 30 seconds to traverse the entire terminal from arrival gate to taxi stand.

The blueprints foreshadow radical change. Nagpur got its first international flight just 18 months ago, but it is already planning a second runway long enough for jets like the Airbus A380 superjumbo. A new terminal, already being built, is designed to accommodate 14 million passengers a year.

Next to the airport is a vast special economic zone, an enclave of relative economic freedom designed to attract investors. Boeing is already setting up a maintenance hub there and in an adjoining technology park. Indian companies that do outsourcing work for American and European companies like Satyam Computer Services and HCL Technologies are buying land.

Some worry that all the change — which has already caused real estate prices to soar in the city — is fueling a bubble economy that could burst. Alok Tiwari, the executive editor of The Hitawada, the local newspaper, said a boom cannot last unless more jobs are created, increasing buying power.

“We’ve got to create opportunity, not just take land and build a mall there,” he said.

Yet others say such development will eventually take on a life of its own, driving the economy by raising people’s expectations and willingness to work hard to afford the new luxuries appearing before their eyes.

Vishwas Chaknalwar, a developer, put it this way. “Once you wear Pyramid clothes,” he said, referring to the new Pyramid mall here, “you cannot wear anything else.”

For Intel, it could well be 'India Inside'

2007-05-15T21:06:00.000-07:00

It has been a while since low-cost Indian engineers graduated to high quality and higher wages. If further proof was needed, it came this week, when the world's leading microchip maker, Intel, revealed the latest of its chips.

While its headquarters and foundries may lie in places like the Silicon Valley, Oregon and Malaysia, the design that runs inside the latest of its chips now have a high component of work done by Indian engineers in Bangalore. In that sense, to its old "Intel Inside" slogan for computers that use its microprocessors, the semiconductor giant may add its own "India Inside" tag to its chips.

If software leader Microsoft's Vista operating system had a good deal of its work happening out of its Hyderabad centre,

the Intel India Development Centre (IIDC) in Bangalore played a key role in development of the company's new mobile platform Intel Centrino Duo and Intel Centrino Pro processor for personal computers, which were showcased this week. Operational since 1998, IIDC is Intel’s largest non-manufacturing site outside the US and houses more than 2,000 designers.

Intel is not alone in the field. In fact Texas Instruments started the phenomenon way back in the 1980s, though its high-tech work done in Bangalore was overshadowed by widespread media attention given to low-cost IT service exporters such as Wipro and Infosys.

Texas Instruments has now tied up with Indian Institute of Science (IISc), the place that produced the first managing director of its Bangalore facility, Srini Rajam, to tap the Indian resource pool.

"The value drivers in India have changed. We have now moved from cost-savings to quality of talent," says Rahul Bedi, Director, Corporate Affairs, Intel South Asia.

"Back then, we were not involved in core developmental work and were handling smaller roles," said Bedi. Indian techies have now moved up the value chain and can claim significant portions of the global product releases, he added.

Vinod Agarwal, founder of SemIndia, the consortium which is setting up India's first fabrication facility for chips (fab) said, "Companies like Symantec, Cisco and Microsoft have more faith in Indian software professionals to design innovative and world-class products that can compete with Israel and other international developers."

Bedi cited examples where Indian developers are designing and testing key elements on the Intel ‘Crestline’ chipset and other chipset software for Microsoft Windows Vista.

"We are also expanding our R&D efforts in core areas like attaining power efficiency for devices and terascale CPUs (central processing units)"” he said.

Indian property investors follow roads, airports

2007-05-02T02:51:00.000-07:00

MUMBAI (Reuters) - Grumbling that India is slacking on road and rail improvements, property investors are flocking to those few areas where the work is going in, at the risk of creating oversupply hotspots.

Local developers, and managers of foreign funds rushing into Indian property, are also taking matters into their own hands, building townships with their own electricity generators and water and sewerage systems.

But they fear failure if the projects remain isolated from major cities where residents work.

"Accessibility is the key issue. Over time it will separate the winners and losers," said Sameer Nayar, Asia head of real estate for Credit Suisse.

The government plans to funnel $350 billion into infrastructure, largely through public-private partnerships, but the country's legendary red tape and ingrained political mistrust of privatisation mean progress is slow.

"There's a lot of talk, but not much happening on the ground," Nayar told a conference in Mumbai this week.

"Delhi is doing a good job but they still haven't been able to build a highway to the airport in the last five years."

Developers are gravitating fast to areas where roads are smooth, and electricity is relatively reliable.

Most of India suffers daily power cuts. For example, 2 million Kolkata residents live without electricity for up to eight hours a day, and New Delhi's chief minister has threatened power firms with fines if they fail the city.

Gurgaon, with its bright white tower blocks and new roads on the edge of New Delhi, is thriving as one of India's main technology industry outsourcing hubs, and drawing possibly too much new development.

Some 50 shopping malls are sprouting in the town of 200,000 people, according to Shobit Agarwal, head of investment services ast consultants Trammell Crow Meghraj.

"There's an oversupply situation in some micro markets," Agarwal said.

Noida and Mysore are starting to draw the same sort of interest as Gurgaon, because of their new expressways.

And infrastructure firm GMR Group wants to attract property investors to land next to its airport construction projects in Hyderabad and New Delhi.

V. Jayaraman, GMR's chief operating officer, said the "Aerotropolis" projects, on 250 acres of land next to New Delhi International Airport would offer property investors a location for hotels, warehouses and offices linked directly to the city centre by a planned high-speed underground train.

"It's a developers' dream to have that location and connectivity," Jayaraman said.

"But this is the kind of deal that won't come along for a long time," he said. "It's for big players, those with less than $250 million shouldn't bother."

An estimated $10 billion was raised internationally last year for Indian property, which is drawing the property investment arms of Morgan Stanley, Citigroup and Merrill Lynch.

By Reuters

By Dominic Whiting, Asia property correspondent

India unlikely to have edge with semiconductor policy

2007-04-11T17:17:00.000-07:00

India may not have got the timing right about nurturing two or three semiconductor plants even as the government finally has a policy that it hopes could put the country on the world map of semiconductor (wafer fab) manufacturing.

The process of joining the ranks of countries such as Taiwan, China, Korea, Japan, Singapore and the US has already begun with the government expecting a $6-10 billion investment.

The $3 billion SemIndia project is already underway and Hindustan Semiconductor Manufacturing has submitted its $4 billion proposal that awaits the Centre's nod. But most analysts and some industry players are wondering whether government incentives alone will suffice.

"India needs around two to three fabs to meet the local demand. The problem is there could be a supply overcapacity by the time these fabs start production," says Ganesh Ramamoorthy, principal analyst, Gartner.

"The move (of notifying the policy) is definitely going to help high-end manufacturing. However, technology becomes obsolete at a very fast pace and the gestation period to set up a fab is long," says Y S Sashidhar, vice president, Frost & Sullivan (India).

By the time the fabs come up (2009-10), technology would have moved on. For instance, most of the projects announced about 130 nm (nanometer) technologies to begin with.

This technology will help in developing chips for set-top boxes, micro controllers, logic devices, discrete devices, and so on but not for mobile phone or memory chips (which account for 40 to 50 per cent of the total semiconductor market) that require better technologies.

"The problem is that by the time the fab plants in India start production, these high-tech devices will require more sophisticated technology (say 60 nm or 45 nm technologies)," says an expert. Only SemIndia is currently talking about 90 and 60 nm technologies for its second phase of production. Besides, the lower the chip size, the higher the investment.

However, there's still a logic in having a fab plant in India. Chip designing, which India excels in, accounts for around 30 per cent of the total high-tech manufacturing revenues.

Assembling, testing, marking, packing and chip manufacturing account for the remaining 70 per cent, which India loses out on.

While there's a negligible duty on import of semiconductor chips, India "can still reduce its input bill by setting up fabs". Setting up a semiconductor plant is expected to create a semiconductor "eco-system", which in turn will help Indian companies move up the global value chain and meet the local demand.

The Indian Semiconductor Association projects India's consumption of electronic equipments to touch $363 billion by 2015, up from $28.2 billion in 2005, at a compound annual growth rate of 30 per cent (Frost & Sullivan figures).

Of this, the market for the semiconductor industry is expected to be around $36.3 billion. ISA maintains that the semiconductor industry would address not only the home market, but also the global one, creating an electronics manufacturing industry in India of $100 billion in 10 years.

SemIndia, the company setting up a $3-billion chip fab in Hyderabad, has said there will be enough local demand since India's GDP is growing at over 8 per cent.

A company spokesperson declined to comment on the order book position. However, sources say companies have plans to source chips from SemIndia and "the current figure is around $500 million".

Industry experts also note that much depends on contracts too. Major fab players like Taiwan Semiconductor Manufacturing Company have contracts for a minimum period of two years. TSMC recently opened an office in Bangalore to bolster its efforts. Indian semiconductor plants will have to compete with the global majors for a decent market share.

Meanwhile, even as the government plans to "reopen negotiations with Intel and other companies to explore possibilities of them setting up units in the country", Texas Instruments has stated it will not set up a semiconductor manufacturing plant in India.

So has NXP Semiconductors, which says it has no "immediate plans", according to Ashok Chandak, sales and marketing director, NXP Semiconductors India. "In terms of the local demand, we are still not there. The numbers (with regard to demand) projected appear steep," says Chandak.

Intel, the world's largest chip manufacturer, had been waiting for the semiconductor policy to take decisions on its India plans and had in the meantime selected Vietnam for a facility. Recently, it even set up its first Asian plant in China. The government is hopeful that Intel will return.

(This is the first of a two-part examination of India's semiconductor eco system.)

India should resist wafer fab subsidies, says analyst

2007-02-12T22:36:00.000-08:00

HYDERABAD, India — While India is eager to make its mark as a semiconductor manufacturer, a rapid plunge into leading-edge chip manufacturing could contribute to global overcapacity and not serve India well, according to an analyst attending the India Semiconductor Association's Vision Summit conference in Hyderabad.

Nonetheless, fueled by ambition to become the next Silicon Valley, the Indian government said it plans to announce details of a package of financial incentives for the semiconductor industry, "in one or two weeks," according to the chief minister of the state of Andhra Pradesh, Y S Rajasekhara Reddy. Reddy was speaking as keynoter at the Vision Summit, which opened here Monday (Feb. 5).

The incentives are expected to include outright cash grants to induce companies such as Intel Corp. and Advanced Micro Devices Inc. to build state-of-the-art semiconductor facilities in Hyderabad's proposed "Fab City" zone. Reddy said it is India's vision and ambition to establish "self sufficiency in semiconductors" before the end of the decade. Currently all integrated circuits fueling India's booming electronics equipment manufacturing market are imported.

But analysts remain skeptical about this emerging nation's ability to develop and sustain a state-of-the-art facility anytime soon.

"I don't think they are ready to go straight to a state-of-the-art fab," said, Bryan Lewis, research vice president and chief analyst for semiconductor ASIC/SOC/FPGA at Gartner Inc., in an interview with EE Times.

"It's a question of timing. My advice is that they would be better off going to 0.18 or 0.13 [micron]," and not directly to 90- or 65 nanometer, Lewis said, adding the prediction that semiconductor manufacturing overcapacity was coming, and there's plenty of manufacturing capacity that can be purchased elsewhere.

Instead, Lewis advised, "I'd like to see them develop their system design and system-on-chip design capabilities. In the end, when they (the national and regional government) see the true cost and the full economic picture [of manufacturing subsidy] I think they will end up being cautious and taking a go-slow approach."

Despite this, there seems to be a surge of optimism in this region, and a surge of momentum to charge forward and establish a position as a world-leader in semiconductor manufacturing.

Earlier this year the Prime Minister of India signed an "agreement in principle" outlining a series of national initiatives targeting inward semiconductor industry investment in a package approved by Indias Union Cabinet that, in principle, would provide special financing for investments.

Several semiconductor projects await final approval of the Cabinets program as well as those of other local incentives programs. Among them is the $3 billion Semindia Fab City project in Hyderabad for 200-mm and 300-mm wafer fabrication facilities based on technology from AMD. Intel is also said to be negotiating with regional officials to build an advanced testing and manufacturing unit in India and is reportedly awaiting final approval of the governments semiconductor initiative. Several Taiwanese companies are also said to be interested in setting up manufacturing bases in India.

This week's Summit has drawn domestic and global industry leaders to Hyderabad, a region that with Bangalore is increasingly associated with Indias nascent microelectronics industry. States such as West Bengal are also expected to showcase their capabilities at the Summit.

According to ISA estimates the Indian market for electronic products is set to reach $363 billion by 2015, growing at a CAGR of nearly 30 percent. But despite recent rapid growth, Indias semiconductor market still constitutes only just over 1 percent of the global total. India is, however, a powerhouse in outsourced software writing, especially in the area of embedded systems. The countrys electronics design industry had a turnover of $3.2 billion in 2005 and is expected to grow to $43 billion by 2015, also growing at a CAGR of 30 percent. Of Indias total electronic design business, very large scale integration (VLSI) chip design accounts for 18 percent, circuit board design 4 percent, and the other 78 percent goes for embedded software design.

Several initiatives on the national political and economic fronts that emerged late last year aim to create a complete industry ecosystem capable of attracting and sustaining new investments in chip making.

"It is the right time for India to showcase its capabilities and draw global attention to the potential of this market. At ISA our goal is to have India become a global brand in the electronics and semiconductor industry driven by technology and quality products," said Poornima Shenoy, president of the ISA trade group.

The theme of the ISA Summit is global competitiveness. Speakers are set to include Shri Pallam Raju, Indias Minister of State for Defense; Bryan Lewis of Gartner Dataquest; Charlie Bullock of SVB Alliant; Jodi Shelton of the FSA; Ajai Chowdhry, founder of HCL; and Vinod K. Agrawal of SemIndia.

Interview with India's infrastructure baron- GM Rao

2007-01-17T01:26:00.000-08:00

GM Rao speaks about his future plans for Delhi airport and why he is modelling GMR Infrastructure on companies like Macquarie Airports and Ferrovial.
India’s inadequate infrastructure is a sore point for investors the world over. This is the second interview in a series we are running on how the current government is trying to change the situation. A consortium led by GM Rao, including Fraport and Malaysia Airports Holding, has been awarded the Delhi airport. We talk to Rao about his plans.

How did you get into infrastructure?
I turned to infrastructure accidentally with no vision and no goal. I set up a power plant, the first in Tamil Nadu. Then I set up a barge mounted project in Karnataka, which when commissioned was the world¹s largest and another 370 MW power project in Andhra Pradesh.

In 2003 I partnered with Phaneesh Murthy to set up a BPO, Quintant Services with plans to focus on banking, insurance, card services and investment banking. Within six months I had an opportunity to cash out of this venture which I did as I had now decided to enhance my focus on infrastructure. With this goal in mind I sold my brewery and leased my jute business. I realised my time was at a premium and I could not do justice to so many things.

I had perceived an opportunity in airports in 1999 itself. At the time the Hyderabad government wanted someone from the private sector to set up a new airport. The traffic then was low and there was lacklustre interest. Bidders put in bids with a subsidy element and our demand for subsidy was the lowest.

In 2000 I won portions of the Golden Quadrilateral highway project. We were a first time entrant in roads and had stiff competition from established players such as Larsen & Toubro, Gammon India, Punj Lloyd. The project was structured on a BOOT basis and our bid was significantly lower then our nearest competitor.

Why did you foray into airports?
I am very optimistic on airport traffic. Our country has a huge pool of human resources. We are fast establishing ourselves as a knowledge management centre and back office to the world. Cities like Dubai and HK have grown around their airports. I foresee a time in the future when we no longer need to levy a landing charge because we will have enough alternative sources of revenue.

We perceive an opportunity for India to become a one stop destination. Why should passengers use cities like Dubai, Bangkok, Singapore as a gateway to India? In India the service orientation in the private sector has always been high. Couple this with the changing economic profile of the country and we are poised on the brink of quantum change. Further, tourism, both inbound and outbound, is increasing tremendously. Low cost airlines have converted a lot of first time travellers to air.

What made you bid for Hyderabad airport?
I saw tremendous future although initially the process was slow and there were times we contemplated walking out. We had to acquire 5400 acres of land and resettle 1000 families. These things are never easy.

We are now in the midst of construction and our vision was correct. The traffic to Hyderabad has increased manifold. At the time of bidding, it was four million for 2008, at award of project, it was five million, at financial closure, it was seven million and midway through construction, it has been increased to 12 million. During the first quarter of the current year, we witnessed 42% growth.

From being a regional hub the city has now become an international hub. This has happened partly through our time and effort. We have participated in international events such as Routes Networking Event to market the city as a hub. We have highlighted the advantages of the climate which provides visibility for landing 365 days a year. Hyderabad is also the geographical centre for India within a 2 hours flying time to all the major cities in India.

To date the India airport awards have been mired in controversy. What makes you believe the going will be easier in the future?
World over airport privatisation is a contentious issue. In India the process may seem as if it was fraught with controversy but Fraport tells us they found the transparency high and our judicial system efficient. The government proactively solicited our feedback on the process was run and we are confident that next time it will be smoother.

Airport development is today an economic compulsion for the country. Every infrastructure sector in the country be it power or telecom which has opened to the private sector has had a learning curve. I believe the opportunity lies in the adversity. We are among the businessmen seeking to benefit from the second wave of reforms in India. Infrastructure projects require vast amounts of both capital and patience.

What are your further plans in the airports area?
We are awaiting further airports specifically Chennai and Kolkata. World over airport developers such as Macquarie, BAA. Fraport manage multiple airports. We are working towards that model.

How are you financing your airports?
Financing for our airport projects has been from domestic banks. Financing has been easily available and every time we seek bids for loans the order book is 3-4 times over-subscribed. For the Delhi airport project we had to provide a financial commitment of Rs40 billion ($897 million) which was picked up 75% by ICICI Bank and 25% by Punjab National Bank. We have also used financial engineering to the extent possible in our projects. For example, we have securitised the future receivables of our road projects and prepaid loans.

What are your plans to maximise returns from your investment in the airports?
We are studying the best model for every airport related business real estate, hotels, warehousing, fuel, maintenance, advertising, cargo. In areas where we do not have the requisite skills and experience we induct a partner. For example, in Hyderabad we partnered with Menzies for cargo and Accor for hotels.

What is your background?
I am the only one of seven siblings who is a technical graduate. Our family was traders. My father divided his assets between us and we got Rs300,000 and a truck each. We pooled our resources and started a business trading jute. This was in the seventies when India was shackled by the license raj. I was always interested in backward integration to have control over jute supply. This we managed to transfer the license of an existing jute mill in Tamil Nadu and built a mill in my native village in Andhra Pradesh.. The mill did well and provided us with the cash and confidence to pursue other ideas. We took whatever licenses we could get in our region and ended up with licenses for a brewery and a ferro alloys business then in the nineties we forayed into the sugar business.

Your name is well known in connection with Vysya Bank. How did you get involved?
I got into banking by accident. Vysya Bank was a community bank with a low capital base of Rs6 million. In 1984, it IPOed. The issue was not fully subscribed and I picked up the balance. I was inducted on the board. The following year Vysya Bank made a rights issue, which was again not fully subscribed.

Around the same time my family decided to divide our business. I liquidated jewellery, sold land, used my proceeds from the family split to raise money and became a major shareholder in Vysya Bank. I had a vision that to own a majority stake in a bank will be very special and with banking becoming important, it was the right time to be in the banking industry in India.

How did ING acquire Vysya Bank?
I increased focus on Vysya Bank after chairman and managing director Ramesh Gelli left in 1991. I left my village and moved to Bangalore. I decided to induct an equity partner to grow and imbibe best practices. Bank Brussels Lambert of Belgium took initially a 5% stake then hiked this to 10%. I always treated BBL as a strategic partner, despite the minority stake. With its help we invested in technology and cleaned up the balance sheet to enhance focus on core banking. We also acquired a local life insurance license with ING.

In 1998 ING acquired BBL worldwide. Then in 2002 it approached me to hike stake in the bank and buy me out. Pursuant to this I also sold my stake in the life insurance joint venture to Rajan Raheja.

To what do you attribute your success in infrastructure businesses?
I believe my background in banking has stood me in good stead in infrastructure. I knew what it was and was not possible to finance at an early stage of the bid. I also believe the unique distinction of knowing India during the license raj and post liberalisation has been an advantage. I have been trained to understand how to extract value out of an opportunity.

In emerging markets things do not happen in one year. We have been investing in infrastructure for 15 years. We had an early mover advantage in roads and airports. Our vision of the future now is very clear. We will continue to establish a leading presence in two businesses agriculture and infrastructure.

You have chosen to house all your infrastructure businesses in one company, GMR Infrastructure. Why combine them?
I studied a number of companies like Macquarie, Australia and Ferrovial, Spain to determine what kind of corporate structure will work best for our long term ambitions and our investors. I felt housing businesses with different cash flows and durations airports, roads, power provided risk mitigation and reduced asset liability mismatch.

Why did you IPO GMR Infrastructure?
Mine was the first IPO by an infrastructure company in August,2006. Out of a total of 11 projects six were operational at the time I IPOed. I diluted only 20%. Indian investors were not familiar with the holding company structure or the sector with the result that the foreign portion was over subscribed 8 times while the domestic portion achieved only one time subscription.

I listed my company to allow Indian retail investors to participate in my infrastructure story. I believe I am creating assets of national pride. I also felt a listing will force us to be more transparent and instil the highest standards of corporate governance.

Yours is a family owned business. How do you ensure high corporate governance standards are maintained?
I know that family owned businesses do not always inspire confidence in investors however it is also a fact that in the west very highly regarded and well managed companies are family owned and run. We have consultants advising us on the best strategy to adopt for family ownership. We will shortly launch a family constitution which we are currently developing. This will address issues of conflict resolution and succession which can make investors nervous. We will also set up a family council and in the long term we aim to separate ownership and control.

What is your vision of the future?
My vision of the future is we move from being a “management” family to a strategic family and finally an investment family. I have already professionalised my agriculture, energy and roads businesses. My airports business is not yet mature; it is still in development mode. We intend in the long run to take a back seat.

Why opening up the economy is good for India

2007-01-07T11:53:00.000-08:00

DLF's formidable land-bank, and the humongous stock market valuation that it is shooting for with its public offer of shares, underline two key elements of India's economic resurgence.

One is that new areas of business are being opened up all the time for large, private enterprise, and this is creating economic activity and new wealth on a dramatic scale. It would have been hard to imagine even a few years ago that an old-fashioned activity like real estate development (reserved in the big cities for public sector bodies--who mostly wasted their charter) could be such an enormous engine of growth if the private sector were allowed a foot in.

What this suggests is that the more the government opens up for private initiative in the organised sector, the faster and greater will be the economic activity, and wealth, that is generated.

It is possible, therefore, that decisions taken in the last few weeks with regard to two other previously unfashionable sectors, will repeat this story--in retailing and containerised rail transport. The big boys are all rushing into retailing and talking of investments in billions of dollars; and no fewer than 14 companies have already announced their entry into containerised freight movement.

That could develop into another big business, and someday someone is going to be India's freight king. More importantly, the development of these businesses will bring about system-wide efficiency improvements, as also create export possibilities--agri-exports could finally take off as people work out cold chains and efficient supply linkages.

It is a plausible argument that India's economic momentum is being sustained in part by the government opening up sector after sector in a steady if somewhat slow sequence. The previous round of market opening (about three years ago) was in civil aviation, leading first to the birth of low-cost airlines and then to the privatisation of airports and significant investment in the air transport infrastructure, including hundreds of new planes.

If the electricity law of 2003 is allowed to be implemented, and the restrictions on the private sector's role in the power sector (not just generation, but distribution and trading) are removed, we could see another burst of investment and the growth of yet another sizeable business.

Certainly, the opening up of exploration and development in the oil and gas sector has led to not just an improvement in energy security but the deepening and broadening of India's energy sector--more companies in the fray, new discoveries, gas pipelines being laid across the country, piped gas in cities, and much else.

If mining is now thrown open to private prospecting and then exploitation of reserves, there can be no doubt that it will attract some of the biggest companies in the world, and a lot of investment.

If none of the opening up had happened, and all these sectors had been left to the state-owned or unorganised sectors, it is a safe bet that both the investment and the market expansion will not have happened on the scale that they have--the telecom story makes the point most effectively.

Government investment, if financed through the budget, would have led to an explosion of the deficit and increased macro-economic risks. If done through state-owned enterprise, some would have succeeded and others would have failed, but (as in the past) there would have been no systemic way of separating the wheat from the chaff, and the results would probably have been sub-optimal.

Either way, the country would not have enjoyed the market expansion that is in evidence in all these sectors--and India's capital market would not have been deepened and broadened as has been done. Indeed, although state-owned companies continue to dominate India's financial sector, the birth and growth of private banks, insurance companies and fund managers has definitely added dynamism and momentum to the whole sector.

Equally important is what the new businesses have done to the job market, and the opportunities that have been thrown up for youngsters. The moral of the story for the government is the obvious one: the critics of opening up are wrong, and allowing the private sector in more and more areas strengthens the system.

Indian immigrants sharpen US edge

2007-01-07T11:44:00.000-08:00

Washington, Jan 5 (IANS) Indian immigrants contributed substantially to giving the US a competitive edge by starting more than a quarter of immigrant-founded companies that created about 450,000 jobs and generated more than $52 billion in sales in 2005, a new study has found.

'This research shows that immigrants have become a significant driving force in the creation of new businesses and intellectual property in the US - and that their contributions have increased over the past decade,' said the study released Thursday.

'The key to maintaining US competitiveness in a global economy is to understand America's strengths and to effectively leverage these. Skilled immigrants are one of America's greatest advantages,' noted the study by a team of student researchers from the Pratt School of Engineering at Duke University.

Led by executive in residence Vivek Wadhwa, research scholar Ben Rissing, and sociology professor Gary Gereffi, the study documents the economic and intellectual contributions of immigrant technologists and engineers to US competitiveness.

'To sustain our economic and global competitiveness, America needs to focus on its many strengths. One of these is our ability to attract and assimilate the world's best and brightest,' said Delhi-born Wadhwa, himself an immigrant who has co-founded two technology companies.

'This study shows the tremendous contribution immigrants in general and Indians in particular are making to the US economy and global competitiveness. This is a win-win for America and for the immigrants that make it here', he added.

There was at least one immigrant key founder in 25.3 percent of all engineering and technology companies established in the US between 1995 and 2005 inclusive, noted the study aimed at understanding the sources of US global advantage as well as what the US can do to keep its edge As Silicon Valley's immigrant entrepreneurs collaborate with former classmates and colleagues in once peripheral economies like India and China, they are providing access to the markets and know-how that are critical to success in today's global economy, the study concluded.

Almost 26 percent of all immigrant-founded companies in the last ten years were started by Indian immigrants, 31 per cent more than those from UK (7.1 percent) China, (6.9 percent) and Taiwan (5.8 percent) combined, it found.

Analysing the contributions of immigrants to intellectual property that likely has high global utility, the study noted that the number of such non-citizen inventors and co-inventors appearing on US international patent applications zoomed from 7.3 percent in 1998 to 24.2 percent in 2006, making for a 14.76 percent average.

Chinese (Mainland and Taiwan-born) made up the largest group of immigrant non-citizen inventors followed by the Indians, Canadians and British.

'These non-immigrant citizens are typically foreign graduate students completing their PhD's, green card holders awaiting citizenship, and employees of multinationals on temporary visas,' notes Vivek Wadhwa, an active mentor and advisor to various start-ups who was named a 'Leader of Tomorrow' by Forbes.com.

California and New Jersey represented hot spots for immigrant-founded engineering and technology business; Washington and Ohio possessed relatively low percentages of immigrant founded businesses, according to the study.

The study takes note of a host of significant contribution by immigrants of Indian origin.

Highlights:

* Indian and UK entrepreneurs tend to be dispersed around the country, with Indians having sizable concentrations in California, Texas and New Jersey and the British in California and Georgia.

* While in New Jersey, the share of Indian start-ups was a whopping 47 percent, in Texas, it stood at 25 percent. This was followed by California with 20 percent, Florida with 18 percent, New York with 14 percent and Massachusetts with 10 percent.

* Almost 80 percent of immigrant-founded companies in the US were within just two industry fields: software (33 percent) and innovation/manufacturing-related services (46 percent).

* Immigrant groups from India, UK, Mainland China and Taiwan founded innovation/manufacturing related service companies in similar proportions over the past decade (accounting for 42 percent to 46 percent of all engineering and technology companies founded by each group).

* Entrepreneurs from India and the UK gravitated as well toward the software industry, which accounted for 46 percent and 43 percent, respectively, of their startups; but they were minimally represented in hardware-oriented sectors such as semiconductors and computers/communications.

* Indian immigrants are the primary founders of immigrant companies in the innovation/manufacturing-related services fields. Just under a quarter of the immigrants who founded companies in this field are from India, followed at a considerable distance by Taiwan and China at 6 percent each.

* The Indian immigrant group contributes as well to the biosciences and computers/communications fields but is not a dominant force. In biosciences, India and Germany each contribute 10 percent of the companies founded by immigrants; the UK, France, Israel and Korea trail at 6 percent.

* In the computers/communications field, India and China born immigrant entrepreneurs each founded 15 percent of the immigrant founded semiconductors companies from 1995 to 2005.

* Within the software field, Indian immigrants established 34 percent of the immigrant founded software companies from 1995 to 2005.

* With 15.5 percent start ups from 1995 to 2005, Indian immigrants outpaced their Chinese counterparts (12.8 percent) as founders of engineering and technology companies in Silicon Valley.

* In North Carolina's Research Triangle Park, 18.7 percent of startups had an immigrant as a key founder with Indians making the largest group, with 25 percent of startups, followed by immigrants from Germany and the UK, each with 15 percent.

* Between 1990 and 2000, the population of Indian scientists and engineers in Silicon Valley grew by 646 percent as against 246 percent other foreign born, while the total of such workforce grew by only 103 percent. This reflected the influx of Indian scientists and engineers to the region.

India: More Than Just Call Centers

2007-01-02T11:01:00.000-08:00

Boston Consulting Group's Harold Sirkin sees outfits like Ranbaxy, Infosys, and Tata Motors as symbolizing India's growing commercial might

by Harold Sirkin

Perceptions are everything—or so they say. To many Americans, India is just a giant hub for telemarketing and customer-service call centers. But it would be wrong to assume that India's future rests in call centers.

Instead, India's growing prowess in engineering and information technology should grab our attention—which is exactly what it did in November, when hundreds of my colleagues from 37 countries met in India for Boston Consulting Group's 2006 worldwide partners meeting. BCG's partners are hard-nosed veterans, not novices who can easily be fooled and impressed. We visited numerous companies, and at every stop we got the clear message that to equate India with call centers is to miss the real story.

For one, India's information-technology sector is expanding at an amazing pace. According to India's National Assn. of Software & Service Companies (Nasscom), the IT industry is seeing double-digit growth and earned some U.S. $35 billion in fiscal year 2006, up from U.S. $21.6 billion just two years earlier.

Domestic Demand Rising

And Indian education is growing to keep up with demand. While authorities differ on whether India is producing more engineering graduates than the U.S. and Western Europe, there is no doubt that the country's engineering workforce is growing rapidly. In 2005, 441,000 Indians graduated with engineering and information technology degrees from three- and four-year colleges. That number is expected to jump to 536,000 in 2007 and to more than 600,000 by 2010. With more than half the country's population under the age of 25, the number will only continue to increase.

The demand is not just coming from the West. While U.S. and European multinationals employ many of these graduates, it would be wrong to see India merely as a supplier of America's and Europe's talent needs. Indian companies—armed with ambitious leaders, a highly educated, low-cost workforce, and modern facilities and systems—now employ 1.3 million engineering and technology professionals.

These companies are not only cornering the domestic market but rapidly expanding overseas and going head-to-head with U.S. and European multinationals. A recent BCG survey of top companies in rapidly developing economies identified dozens of potentially world-class Indian competitors in industries such as pharmaceuticals, chemicals, autos, consumer electronics, IT, and telecommunications.

Leading the Charge

Consider a few examples: Ranbaxy Pharmaceuticals (RBXLY) is already one of the top 10 generic pharmaceutical companies in the world. With manufacturing operations in eight countries and sales in 126, the company had global revenues of more than $1.1 billion in 2005. Surprisingly, 76% of the company's sales came from overseas markets, including 28% from the U.S. alone. Part of Ranbaxy's success comes from the low cost of research and development in India, which is approximately one-fifth the cost in the West.

Bangalore-based Infosys Technologies (INFZF), one of India's best-known IT companies, posted revenues of $2.15 billion for the fiscal year ended in March. Infosys provides high-end consulting and IT services, including systems integration, application development and manufacturing, and product engineering. With 58,000 employees worldwide, it ranked ninth in Wired's "Wired 40" list in 2005 and eighth on Business 2.0's list of the world's fastest-growing tech companies, ahead of U.S. icons eBay (EBAY) and Apple (AAPL).

While Tata Motors Ltd., which is India's largest automobile company, could have focused solely on the huge domestic market for commercial and passenger automobiles, it has instead focused on becoming a global competitor. It is now the world's fifth-largest medium- and heavy-commercial-vehicle manufacturer, due partly to some aggressive acquisitions. Tata bought Daewoo Commercial Vehicles, Korea's No.2 truck maker, in 2004 and also now owns 21% of Hispano Carrocera, a Spanish bus and coach manufacturer. Today, Tata has assembly operations in Bangladesh, Kenya, Malaysia, Senegal, Spain, Ukraine, and Russia, and sells its products in Africa, Asia, Australia, Europe, and the Middle East.

Research Hub

Larsen & Toubro Ltd. is a technology-focused engineering and construction giant. The company's overseas earnings have jumped to 18% of its total profits, making L&T one of the top five "fabrication" companies in the world. A recent joint-venture agreement with Kuwait-based Bader Al Mulla & Brothers will take L&T into yet another lucrative field: oil and gas construction.

The leading chassis-component manufacturer and the second-largest forging company in the world, Bharat Forge, has grown its international presence through joint ventures and acquisitions. The company now has manufacturing facilities in nine locations in six countries, including Western Europe and North America. The Pune manufacturer has also entered several new markets, including China, where it signed a joint-venture agreement with FAW Group a year ago.

India has more than call centers to thank for its booming economy. Western politicians and executives who see India as a giant outsourcing call center serving the needs of Western companies are missing the point. Bangalore is rapidly becoming a world-class R&D and technology hub. Today it is home to IBM's (IBM) Global Business Solution Center, a new Microsoft (MSFT) research lab, and many, many others. India is a serious competitor on the global stage. Those who underestimate its capabilities do so at their own peril.

Harold Sirkin, who is based in Chicago, is senior vice-president of The Boston Consulting Group and head of the group's global operations practice.

SEZ mania grips India Inc in 2006; but key concerns emerge

2006-12-22T12:35:00.000-08:00

New Delhi, Dec 19. (PTI): Even the best of Government policies rarely satisfy the intended beneficiaries, especially the vocal corporate sector. So, it is perhaps surprising that the year 2006 saw a scheme over which all business houses - big and small alike - were falling head over heels.

In fact, no policy, programme or legislation, including the SEZ policy of 2000, in recent memory has witnessed such a euphoria among India Inc as the Special Economic Zones Act.

This is clearly evident as in less than 10 months more than 600 proposals by private companies envisaging an estimated investment of about Rs 1,00,000 crore in the next 2-3 years have either been approved or are awaiting Government clearance.

The Act, passed in 2005 but operationalised in February this year, not just caught the fancy of the corporate sector -- it also led to one of the most eagerly-watched duels over any economic issue within the Government in 2006.

While Finance Minister P Chidambaram and his team in North Block repeatedly voiced concern over the revenue loss to exchequer on account of tax sops to SEZs, Commerce Minister Kamal Nath and Commerce Secretary G K Pillai have been the most ardent supporters of the policy.

The tussle over revenue implications intensified when the Reserve Bank and IMF chief economist Raghuram Rajan echoed Chidambaram's views, while companies and industry chambers strongly supported Nath and Pillai.

The other contentious issue in the scheme related to land acquisition, with farmers, NGOs, various political parties and even Congress President Sonia Gandhi expressing concern over using farm land for industrial purposes.

Just when it looked like the arguments would continue forever, Prime Minister Manmohan Singh laid to rest all doubts about the need for SEZ, although he also accepted the concerns related to acquisition of farm land for non-farm purposes.

"SEZs have come to be accepted as a part of the new policy paradigm we have evolved. I do believe SEZs have a role to accelerate the growth and to generate more employment," he told industry leaders at a conference in October.

"Concerns have been raised with regard to acquisition of agriculture land. We will take these concerns on board... (but) SEZs have come to stay," Singh declared.

Specifically, the concerns related to only a few projects such as Reliance Industries' Haryana SEZ and two SEZs in Maharashtra and Reliance Energy's Dadri SEZ in Uttar Pradesh.

Land related issues were only one of the controversies that the scheme has generated. The biggest difference within the Government was over revenue gains or losses.

Chidambaram said the Government will lose up to Rs 1,00,000 crore in the next few years on account of tax sops to SEZs, while the Commerce Ministry felt these zones could make the exchequer richer by Rs 45,000 crore annually.

Commerce Secretary G K Pillai, who was earlier Additional Secretary and then Special Secretary in the Commerce Ministry, took Finance Ministry's argument in the reverse direction.

Pillai, who chairs the Board of Approvals for SEZs, said if there is a revenue loss of Rs 1,00,000 crore, then going by simple calculations all SEZ developers and units will earn a profit of Rs 3,00,000 crore and revenue of Rs 15,00,000 crore.

Further, while companies get tax exemptions, employees will have to pay all taxes. This will result in a net revenue to the Government of Rs 45,000 crore, he argued.

Tax sops were not the only point of difference. The Finance Ministry favoured a limit on the number of SEZs. Moreover, as SEZs would be foreign territory for customs purpose, the Finance Ministry wanted administrative control. But like a shrewd politician, Nath managed to have an upper hand on Chidambaram.

Besides, Communications and IT Ministry under Dayanidhi Maran wanted supervision over SEZs for IT and ITeS sectors.

Ministries apart, the SEZ scheme has not found much favour with RBI and insurance regulator IRDA. The Reserve Bank earlier this year told banks to treat exposure to SEZs as lending to real estate and not infrastructure projects. RBI also said SEZs could lead to uneven economic growth.

Insurance Regulatory Development Authority refused to give any special treatment to SEZs, with Chairman C S Rao making it clear there cannot be 100 per cent foreign direct investment for insurance companies within these zones.

But all this opposition failed to deter Indian or global companies. While IT giants such as TCS, Infosys, Wipro, Satyam and smaller firms took a lead, other corporate giants such as RIL, Essar, Tatas, Bajaj Auto, Bharat Forge and international players like Nokia, Flextronics, Posco and Indonesia's Salim group are setting up SEZs for auto, pharma, energy, textiles, tourism, steel, aluminium and multi-product zones as well.

Clearly, even staunch advocates of SEZ policy - Pillai and Nath - would not have dreamt of the tremendous response from Indian and international companies, although a few companies such as Hewlett-Packard have backed out since then.

While the concerns were not unfounded, such conflicting positions send a wrong signal to investors. The policy might be fine-tuned, but skeptics should wait for some time. As Pillai says, the SEZ scheme requires a year or two to start showing definite results. Indeed, only time will tell!

Hyderabad on the International Aviation Map

2006-12-18T21:14:00.000-08:00

The new state-of-the-art international airport coming up in Hyderabad with its first phase slated to be operational by March 2008 is expected to place the city as a major aviation hub in the country, and even South Asia, reports Priya Krishnaswamy

The aggressive investments from the technological, pharmaceutical and almost every other industry in Hyderabad, has witnessed the city catering to a larger populace of both, national and international business travellers. The rapid makeover of the city, touted as the new IT hub of the South, has forced the administration to ramp up the infrastructure, especially the airport. Work has commenced on the new Rajiv Gandhi International airport at Shamshabad, 30 kms from the city and the first phase is slated to be operational by March 2008.

The new airport will establish Hyderabad prominently in the global aviation map and thereby contribute to the prosperity and development of the region and the country at large. The new airport is being constructed with adequate infrastructure to handle large aircraft and international traffic and also promises to house world-class facilities. Keeping in view the phenomenal growth of over 40 per cent in air traffic in Hyderabad over the past few years, the first phase of the airport estimated to cost close to Rs 2,383 crores will have facilities to cater to 12 million passengers. Grandhi Mallikarjuna Rao-led GMR Group is working with the Hyderabad International Airport (HIAL) and a joint venture company called GHIAL is executing the project.

Gateway to the South

The explosion of multinational IT companies with operations headquartered in Hyderabad, the city is in close competition with Bangalore for the coveted title of "Silicon Valley of India."

Says Sanjay Sood, general manager of Taj Banjara, Hyderabad, "With large multinational companies like Oracle and Microsoft, HSBC and Wipro having their operations in Hyderabad, it is imperative for the city to have a better gateway. The new airport will only smoothen all business transactions and will further augment the efficiency of foreign relationships with India." With lots of anticipation, Kuldeep Bhartee, general manager of ITC Kakatiya, Hyderabad, says, "The new airport will make a tremendous difference to all areas of international trade and business. In fact, Hyderabad can become the aviation hub for the whole of South Asia. With the pro-active state government, the infrastructure will also be on par with the expected standards." With a population of 7.3 million, Hyderabad is the current place where people are vying to buy and retain pieces of land. The present Begumpeth airport operates about 11 international airlines and eight domestic airlines flying to over 35 destinations. Last year, apart from many domestic carriers increasing their frequency to Hyderabad, even KLM and Lufthansa have done the same. Sood further adds that the recent entrants in the Indian skies are also waiting for the new airport to fall in place so that they can introduce flights to Hyderabad.

Commenting on the new projects near the upcoming airport, Bhartee says, "We are looking for feasible plans around the area. Even though they may not be really close to the airport, expansion is on the cards." Says T Srinagesh, chief operating officer, GHIAL, "Air connectivity has often been cited as one of the main reasons why investments don't pour into our country. Over the years, this factor has improved, especially after the open sky policy, which resulted in the advent of a number of private airlines. The success of implementing the new airport by GHIAL under Public Private Partnership bears testimony to the new era of the Indian aviation scene."

Stone by stone

The landscape design of the new airport to be built on 5,400 acres is by Singapore-based BeltCollins. The landscape master plan promises to be a blend of contemporary architectural style for the passenger terminal building with a strong visual identity through the use of simple yet bold and aesthetic landscape treatments, planting statements and streetscape expressions. GHIAL with its user-friendly modular design of the passenger terminal will initially cover 100,000 sq m of floor space that will ensure rapid transit between its domestic and international concourses. The complex will also have a dedicated 'Airport Village' with a local flavour complete with shops for visitors.

The cargo terminal to be built on a plot size of 3.5 acres in the premises at an estimated cost of Rs 50 crore will be equipped to handle 100,000 metric tones of cargo per annum. A new joint venture company between Menzies Aviation (Hyderabad) and GHIAL will be set up to handle the cargo operations. GHIAL's Rs 5.18 billion contract with Larsen & Toubro (L&T) will see the latter construct the gateway's runway, taxiway and aprons capable of accommodating aircraft up to the size of the A380. "When completed, the project will be one of the most advanced airports in the country, capable of handling modern aircraft like the awe-inspiring A 380s, coupled with a capacity of handling twelve million passengers per annum," stated Srinagesh. L&T will also install the airfield lighting and aviation hydrant systems and construct the fire rescue station, airport roadways and cargo terminal. China State Construction Engineering (Hong Kong) apart from constructing the Passenger Terminal Building (PTB) will install the airport's baggage handling system and a plethora of IT, electrical and mechanical systems associated with the new terminal.

The airport will also be the first one in the country where fuel farm operations, will be undertaken by a private company. This apart, an open access model fuel farm is being set up on the airport premises, which will be the first of its kind in India. Under the model, any oil company can supply fuel to airlines in accordance with an agreement entered into with the latter. GHIAL is setting up a fuel farm consisting of three storage tanks, each with a capacity of 4,500 kilolitres of aviation turbine fuel and hydrant for supply of fuel to the aircraft. Reliance has bagged the contract of fuel farm operations at the airport. GHIAL is also working closely with the government to enable a railway line to connecting important parts of Hyderabad with the airport.

Promoters' equity holding patterns

GMR	63%
Malaysia Airports Holding Berhad	11%
Govt of Andhra Pradesh	13%
Airports Authority of India	13%

NRIs can cash out of Indian real estate

2006-11-20T18:05:00.000-08:00

Non-resident Indians with wealth stuck in real estate in India have reason to rejoice. They can now not only cash out on the property they hold in India but have also been provided an incentive to invest in real estate.

This has been made possible by the Reserve Bank of India allowing NRIs to remit the proceeds from the sale of immovable property. The RBI has lifted the 10-year lock-in as a step towards further liberalisation of the capital account.

"The key impact will be that it will provide an exit route to NRI investors, who till now did not have the comfort level to invest in property here as they could not repatriate the gains on account of the lock-in condition. For North America-based NRIs, who may not wish to come back to India, this will provide an opportunity to invest and exit as and when they choose to," said Anshuman Magazine, head (South Asia), at CB Richard Ellis, a real estate consulting company.

The remittance of sale proceeds of immovable property is, however, within the overall ceiling of $1 million per annum.

Barring a few premium properties in Delhi and Mumbai, the Rs 4.5 crore (Rs 45 million) cap would not be a hindrance in almost the entire Indian market for built-up homes and apartments, real estate analysts said.

Banks have been told to allow remittances out of balances in non-resident ordinary accounts, including sale proceeds of immovable property, provided the amount does not exceed $1 million per financial year.

The analysts said NRIs who already own property in India, especially inherited titles, would be able to sell and possibly avoid messy family disputes and litigation.

Some analysts said the $1 million cap could possibly be circumvented through co-ownership of properties. "You can buy floors in a building and register them in separate names. In this way, an investor can repatriate multiples of the $1 million cap," a real estate expert added.

Source:http://www.business-standard.com

India embraces WiMax

2006-11-20T16:47:00.000-08:00

WiMax promises high-speed mobile data and telecom services India is finally getting rid of cable connectivity. Last month Chennai was declared the first WiMax enabled city. Then Pune followed suit. Or the other way around.

In between, Bangalore and Hyderabad also declared they were offering the same services. Some of course duck the fact that they don't offer 100 per cent availability or access yet. However, as of two weeks ago, Baramati, a small city near Pune, seemed to have pipped all the others.

Whatever the truth, the fact is both metropolitan and mofussil India are falling over themselves trying to provide wide-area broadband wireless access to its consumers.

And whereas the older Wi-Fi network is limited to about 30 metres within offices, campuses and scattered "hotspots" in airports, etc, WiMax or worldwide interoperability for microwave access is like Wi-Fi on steroids.

It's an inexpensive way to cover a large area up to a radius of 50 kilometres ideal for rural towns as well as most cities which have limited infrastructure offering high speed access to the Internet from a notebook, personal digital assistant or any similar hand-held device.

Research firms are already predicting India will have 13 million WiMax subscribers by 2012.

This is important because after globalisation and the Internet have created rapid growth in IT related interfaces, connectivity has now become vital to Indian business and society.

At the same time only a little more than half a percent of the population has residential Internet access with just 60 million users in all.

The reason is not far to see: The telecom infrastructure is inadequate and last-mile connections are typically via copper cable, DSL and fibre optic landlines where installation costs are high since they require ripping up kilometres of roadways while disrupting already chaotic traffic in order to lay cables.

In such a scenario the ability to provide connections wirelessly would not only lower the cost of services but also ensure a much-needed impetus to accelerated growth.

Embracing wireless as a dominant delivery mode will be an economically viable solution to Internet adoption that can revolutionise lifestyles in the country.

WiMax technology has the potential to provide extensive Internet access that can boost the economy, deliver better education and healthcare facilities and improve entertainment services as it has done in other places in the world.
Source:http://timesofindia.indiatimes.com

Georgia Tech to set-up campus in Hyd?

2006-11-17T10:00:00.000-08:00

HYDERABAD: With the Centre slated to announce the semi-conductor policy soon, the state government is once again actively pushing for Georgia Institute of Technology, which ranks high amongst US universities, to open a campus in Hyderabad.

State government officials feel that a campus of Georgia Tech in Hyderabad would immensely benefit the region. "Not only is it in the top ten public universities in the US, but it is also a leading research university, and its forays into nanotechnology and semi-conductors will be a boon for students here. And with the coming up of Fab City soon, Georgia Tech’s keenness to come here should only increase," said an official.

Officials of the university had visited Hyderabad in the early part of this year. "The state government offered about 100 to 200 acres free of cost. However, being a public university and short of funds, the university officials wanted a seed capital of Rs 100 crore raised by investors in India, and in return, promised top quality education and reasonable fee. Now it is for the Indian entrepreneurs to chip in and bring a prestigious university to the country and ensure quality education for the coming generations," said the official.

Sources said the state government not only assured the varsity free land, but also promised to line up prospective investors. "The state is ready with its land and the university is ready to set up shop. It is for the investors now to turn this into a reality," said sources.

Georgia Tech chose Hyderabad as its location for the only campus outside of its 400-acre campus in Atlanta, Georgia, because more than 40 per cent of the students who go to study at the Atlanta campus are from this city. Apart from this, proximity to an international airport, salubrious climate and a cosmopolitan culture with lots of American eateries and other outlets also made them decide on Hyderabad, said sources.

Georgia Tech offers undergraduate and graduate degrees in architecture, engineering, sciences, computing, management, and liberal arts. In 2005, for the seventh consecutive year and the eighth time in the past decade, US News and World Report ranked the varsity ninth among the top US public varsities for undergraduates and 37th among all the American universities.

How ebanking can make your life a lot easier!

2006-11-17T09:48:00.000-08:00

Penalty due to non-payment of bill is not new to anyone of us. And quite obviously, who likes the long procedure of writing a cheque, standing in a long queue and then ensuring that the particular amount is available in your bank account? Similarly, Mr Sharma, who is on business tour for at least 25 days a month, finds it difficult to clear his dues on time because of his busy schedule.

He, like many of us, was possibly not aware of the online services, banks are offering these days. With just a click, all his dues would have been cleared long back. However, it's never too late to mend.

Indian banks are trying to make your life easier. Not just bill payment, you can make investments, shop or buy tickets and plan a holiday at your fingertips. In fact, sources from ICICI Bank tell us, "Our Internet banking base has been growing at an exponential pace over the last few years. Currently around 78 per cent of the bank's customer base is registered for Internet banking."

To get started, all you need is a computer with a modem or other dial-up device, a checking account with a bank that offers online service and the patience to complete about a one-page application--which can usually be done online. You can avail the following services.

Bill payment service

Each bank has tie-ups with various utility companies, service providers and insurance companies, across the country. You can facilitate payment of electricity and telephone bills, mobile phone, credit card and insurance premium bills.

To pay your bills, all you need to do is complete a simple one-time registration for each biller. You can also set up standing instructions online to pay your recurring bills, automatically. One-time standing instruction will ensure that you don't miss out on your bill payments due to lack of time. Most interestingly, the bank does not charge customers for online bill payment.

Fund transfer

You can transfer any amount from one account to another of the same or any another bank. Customers can send money anywhere in India. Once you login to your account, you need to mention the payees's account number, his bank and the branch. The transfer will take place in a day or so, whereas in a traditional method, it takes about three working days. ICICI Bank says that online bill payment service and fund transfer facility have been their most popular online services.

Credit card customers

Credit card users have a lot in store. With Internet banking, customers can not only pay their credit card bills online but also get a loan on their cards. Not just this, they can also apply for an additional card, request a credit line increase and God forbid if you lose your credit card, you can report lost card online.

Railway pass

This is something that would interest all the aam janta. Indian Railways has tied up with ICICI bank and you can now make your railway pass for local trains online. The pass will be delivered to you at your doorstep. But the facility is limited to Mumbai, Thane, Nashik, Surat and Pune. The bank would just charge Rs 10 + 12.24 per cent of service tax.

Investing through Internet banking

Opening a fixed deposit account cannot get easier than this. You can now open an FD online through funds transfer. Online banking can also be a great friend for lazy investors.

Now investors with interlinked demat account and bank account can easily trade in the stock market and the amount will be automatically debited from their respective bank accounts and the shares will be credited in their demat account.

Moreover, some banks even give you the facility to purchase mutual funds directly from the online banking system.

So you need not worry about filling those big forms for mutual funds, they will now be just a few clicks away. Nowadays, most leading banks offer both online banking and demat account. However if you have your demat account with independent share brokers, then you need to sign a special form, which will link your two accounts.

Recharging your prepaid phone

Now you no longer need to rush to the vendor to recharge your prepaid phone, every time your talk time runs out. Just top-up your prepaid mobile cards by logging in to Internet banking. By just selecting your operator's name, entering your mobile number and the amount for recharge, your phone is again back in action within few minutes.

Shopping at your fingertips

Leading banks have tie ups with various shopping websites. With a range of all kind of products, you can shop online and the payment is also made conveniently through your account. You can also buy railway and air tickets through Internet banking.

Internet banking versus traditional method

Inspite of so many facilities that Internet banking offers us, we still seem to trust our traditional method of banking and is reluctant to use online banking. But here are few cases where Internet banking will turn out to be a better option in terms of saving your money.

'Stop payment' done through Internet banking will not cost any extra fees but when done through the branch, the bank may charge you Rs 50 per cheque plus the service tax.

Through Internet banking, you can check your transactions at any time of the day, and as many times as you want to.

On the other hand, in a traditional method, you get quarterly statements from the bank and if you request for a statement at your required time, it may turn out to be an expensive affair. The branch may charge you Rs 25 per page, which includes only 30 transactions. Moreover, the bank branch would take eight days to deliver it at your doorstep.

If the fund transfer has to be made outstation, where the bank does not have a branch, the bank would demand outstation charges. Whereas with the help of online banking, it will be absolutely free for you.

As per the Internet and Mobile Association of India's report on online banking 2006, "There are many advantages of online banking. It is convenient, it isn't bound by operational timings, there are no geographical barriers and the services can be offered at a miniscule cost."

Security Precautions

Customers should never share personal information like PIN numbers, passwords etc with anyone, including employees of the bank. It is important that documents that contain confidential information are safeguarded. PIN or password mailers should not be stored, the PIN and/or passwords should be changed immediately and memorised before destroying the mailers.

Customers are advised not to provide sensitive account-related information over unsecured e-mails or over the phone. Take simple precautions like changing the ATM PIN and online login and transaction passwords on a regular basis. Also ensure that the logged in session is properly signed out.

Source:http://www.rediff.com

Why is the South India doing well?

2006-11-14T14:07:00.000-08:00

The four southern states -- Andhra Pradesh, Karnataka, Kerala, and Tamil Nadu -- now lead the country in a number of indices, including education. It is telling that the four traditional metropolises -- Mumbai, Delhi, Calcutta and Chennai -- are now being challenged at every turn by Bangalore and Hyderabad. Indeed, I would claim that Bangalore is giving Mumbai a run for its money as the First City.

There is a simple question: Why? What is the reason behind the South's ascendance? An equally simple answer would be: tradition. Or cultural continuity. The South has generally hewed to its ethnic, linguistic, and cultural patrimony, without necessarily being insular. This is the very reason -- rootedness -- behind the South's current growth.

Five thousand years of Indian history are more alive in the South than the North. The grand Indian tradition of reverence for agriculture and for knowledge are nowhere more active than in the South. The civilisation that has evolved in situ that which has weathered thousands of years of El Ninos, droughts and floods, hurricanes and earthquakes, is still in place, mostly undamaged and preserved.

Many observers do give sufficient credence to the value of an unbroken civilisation, even though they may not put their finger on why this has value. I was struck by this fact when I recently read through two papers by Bruce McKern of the Stanford Business School on the competitive advantages of China and India.

The paper on China starts, 'China is one of the oldest continuous civilizations in the world, with organized society existing for more than 10,000 years.' The paper on India starts, '...[In 1947 f]or the first time in almost 90 years, India's political, social and economic fate was in its own hands.' What a contrast: McKern's unspoken thought is that China's success can be explained by its hoary antiquity, but India couldn't possibly share that success factor because it is only 60 years old! Typical, but wrong, axiom.

In point of fact, Indian civilisation also goes back at least 9,000 years (to Mehrgarh's city-state in Baluchistan), and it was arguably far more advanced than China's 5,000 years ago. For instance Indian astronomers observed and cataloged celestial events in 3102 BCE, whereas the earliest Chinese observations are from circa 2000 BCE.

But we suffer from this mis-perception -- cultivated by the British and later by the Marxists -- that India has a history only since 1947, which implies that what went before was worthless. To understand India, we have to get beyond this widespread, but completely false, notion. The fact is, the South is doing well precisely because it is the most Indian part of India.

It is clear from the work of economic historians (for instance, Angus Maddison in The World Economy: A Millennial Perspective) that India, based on its inherent endowment, was an exceptional economic engine. According to Maddison's charts, India was generally the world's leading economy until the time of European Christian imperialism, which of course wreaked havoc with the social, economic and cultural fabric of India.

Thus, we need to look no further for the South's rise: it is its very Indian-ness that has been its competitive advantage. It was also fortunate in that the two big external shocks -- Mohammedan conquest and Christian imperialism -- affected South India rather less than they did the North.

For instance, Northern India experienced continuous warfare and turmoil between roughly 1192 CE and 1700 CE due to Mohammedan invasions and Hindu resistance thereto. This meant civilisation ceased to exist, as life was on a war footing. Universities were burned by the invaders; and the arts disappeared -- for instance, Northern India has no classical dances (except the court dance of Kathak), whereas the South and the far Northeast, away from the invasions, do -- and thus all creativity came to a standstill.

The South had the good fortune to be protected by that great bulwark: Vijayanagar. During the time of this empire, there was a flowering of the intellect south of the Vindhyas, while the north was engaged in warfare. For instance, there is the little-known Kerala School of Mathematics and Astronomy around 1400 CE, which invented the ideas of the calculus and infinite series.

For 300 years, Vijayanagar -- this under-appreciated, 'forgotten empire' -- ensured that traditional Indian-ness remained un-extinguished. And that is the simple answer for why the South is better off: because of Vijayanagar, which ensured cultural continuity. To support that point, in the South the areas that are most under-developed today have large Mohammedan populations: parts of Andhra, northern Karnataka, and Malabar in Kerala, places that faced jihads, violent conversions and loss of cultural continuity.

The other major catastrophe, Christian imperialism, also seems to have affected Southern India a little less harshly than the North. It is true that Mike Davis' magisterial Late Victorian Holocausts lists the many terrible famines that afflicted the Deccan under European rule (see my previous column, The predatory State) which killed many millions.

These famines were man-made, and there were more under a hundred years of European domination (31) than in the previous two thousand years (17). But the very fabric of society was not destroyed by the Europeans in the South, unlike in Bengal. The Europeans created a permanent underclass by systematically ruining the small artisans of Bengal: skilled, prosperous artisans and tradesmen were overnight reduced to paupers, landless, unskilled laborers, when the Europeans implemented massive trade barriers and hollowed out their manufacturing.

Although the Brahmaputra delta and the Kaveri delta, the economic centres of India which accounted for most of 25 per cent of the world's -- yes, the world's -- GDP in 1750, were ruined, the South seems to have come back relatively well, although there are still pockets of deprivation. What remained intact is an obsession with knowledge and with education, which has led to the South leading the country in that field -- with Chennai and Bangalore in the forefront of intellectual property creation, which is the need of the hour. (See my column India as creator of the future)

The fact of the matter is that India is not a developing country, but a re- developing country, and the South is simply re-developing faster, because it has managed to retain just a fraction more of the traditional Indian-ness. This Indian work ethic (see my 1994 column in Hinduism Today on the Hindu work ethic) is what made India such a powerhouse in centuries past, and it is the unleashing of this entrepreneurial creativity that has enabled India to grow at 8 per cent. There is no reason that the rest of the country cannot catch up with the South, and I continue to be most bullish about Bihar and Orissa, the laggards of the day.

The South is only marginally ahead, and I am glad that the South retains its distinctive cultures, language and cuisines. E pluribus unum: the diversity that the South brings, and its skills in agriculture and intellectual property, are valuable parts of the Indian cultural mix. Kudos to the rampaging South, but let it be emphasised that despite minor irritations, Southerners are emphatically Indians; to paraphrase Orwell, only more so.

Source:http://www.rediff.com

Global hotel giants seek more room in India

2006-11-09T17:58:00.000-08:00

MUMBAI: Global hospitality majors like Hilton, Starwoods, Accor, Carlson and InterContinental are stepping up their global offerings in the Indian market in an upbeat demand scenario and the burgeoning hospitality sector in the country.

Hilton is looking at launching other chains like Garden Inn and Conrad, Starwoods is considering the launch of Four Points, W Hotels, St Regis and Aloft while Accor Hotels will get the Mercure and Sofitel brands into India and Intercontintental will launch its Crown Plaza Resorts and Holiday Inn Express in the country.

While most of these global hospitality chains have a presence in the country through a couple of their brands; there are still some untested brands within their portfolio that stretches across various price segments, say industry sources.

Some of the brands already existing in the country are Starwoods Sheraton, Le Meridien brands, Accor’s Novatel brand and Carlson’s Radisson hotels.

“As the hotel industry matures; it recognises the need to provide specialised lodging products at varying price points. Hotel companies clearly see the vast potential and are rushing in to fill the huge gap between premium 5 star hotels and low quality unbranded hotels and guest houses.” said Saurabh Gupta, head, hospitality, HVS International, a global hospitality consulting firm.

The country is witnessing a spurt in hotel expansion as there is a severe shortage of quality rooms because of increased business activity and a spurt in tourism both by the middle class and international tourists. The demand-supply mismatch is likely to last till mid-’07 with most of the fresh supply coming in ’08.

“Hotels expanding capacity will be able to absorb the downtrend in occupancies over a long term, as additional supply will help to up room rates,” said an official of a Mumbai based premium hotel.

A buoyant economy, growth in aviation and real estate, improved infrastructure and the easing of restrictions on foreign investments is expected to fuel demand across star categories in a majority of markets across India. Foreign tourist arrivals have grown by 15% in the first eight months of this year.

“The domestic hotel industry is witnessing a lot of interest among private equity investors and several international hospitality chains are looking to enter the country,” said Chender Baljee, chairman & MD, Royal Orchid Hotels.

Over the last few months tier two cities like Jaipur, Gurgaon, Hyderabad, Pune, and Bangalore are seeing growth both in terms of occupancy and room rates. While occupancy is around 75-80%, room rates are up by 15-20% in these markets.

With the leisure destinations opening up between October to March, demand among both international and domestic travel is likely to peak during this period, say industry sources.

India set to achieve 10% growth: Expert

2006-11-06T11:26:00.000-08:00

India, now in a 'sweet spot' economically, is set to move on to double digit growth despite politics and populism and may be ahead of China's growth by 2010.

"The hype about India is real. Factors are in place to sustain 10% plus growth...Investment at over 40% of GDP this year is one of fastest jumps in history," Surjit Bhalla, renowned economist, said in his mid-term review of the economy.

The mid-term review showed that India was poised to achieve a high level of growth as savings and investment rates were steadily rising.

The steady increase in savings and investment to 40% and an additional 3 to 4% extra growth from extra investment would result in a 10% GDP growth.

Bhalla also felt the exchange rate should be kept undervalued to make India more competitive in the global market.

He said for the last three years, the growth in manufacturing had been greater than 10% and overall industrial growth has been over 9% and sustained progress in these sectors could push the GDP growth further.
Source:http://www.business-standard.com

Play Golf...:)

2006-11-03T11:20:00.000-08:00

In 1923, Who Was:

1. President of the largest steel company?

2. President of the largest gas company?

3. President of the New York Stock Exchange?

4. Greatest wheat speculator?

5. President of the Bank of International Settlement?

6. Great Bear of Wall Street?

These men were considered some of the world's most successful in their day.

Now, 80 years later, the history book asks us, if we know what ultimately became of them?

The Answers:

1. The president of the largest steel company. Charles Schwab, died a pauper.

2. The president of the largest gas company, Edward Hopson, went insane.

3. The president of the NYSE, Richard Whitney, was released from prison to die at home.

4. The greatest wheat speculator, Arthur Cooger, died abroad, penniless.

5. The president of the Bank of International Settlement, shot himself.

6. The Great Bear of Wall Street, Cosabee Livermore, also committed suicide.

However: in that same year, 1923, the PGA Champion and the winner of the most important golf tournament, the US Open, was Gene Sarazen. What became of him?

He played golf until he was 92, died in 1999 at the age of 95. He was financially secure
at the time of his death.

The Moral of this story is?

Forget work Play golf

Hotmail co-founder Bhatia plans Indian nano-city

2006-11-02T13:34:00.000-08:00

BANGALORE, India — Hotmail co-founder Sabeer Bhatia has signed an agreement with the regional government of Haryana state in northern India to help establish "Nano City," a technology hub modeled after Silicon Valley.

The enclave will cost over $400 million and will focus on nanotechnology, biosciences, software development , next-generation Internet products, materials research and energy.

According to a reports from Haryana on Thursday (Nov. 2), Bhatia's Nano Works Developers and the Haryana State Industrial and Infrastructure Development Corp. will be spread over 11,000 acres.

Bhatia worked in Silicon Valley in the 1990s when he help found Hotmail, the first free e-mail service.

"We foresee research establishments such as U.S. universities and [corporate R&D] centers, which have been the centers of innovation, carrying out multidisciplinary research and collective research with Indian centers of excellence in this Nano City," Bhatia said.

Source:http://www.eetimes.com

Motorola sets up R&D shop in Hyderabad,India

2006-10-30T11:26:00.000-08:00

Motorola Inc. inaugurated a new research and development (R&D) facility in Hyderabad, India, in the presence of the company's chairman and chief executive officer, Edward Zander.

The new center will house over 1,000 engineers, who will support research and development of cutting-edge software, Motorola said. The center will have a large team of engineers developing software for an intelligent user interface for Motorola phones. The center will also work on technologies such as WiMax, network management and autonomics, security and high-availability platforms, the company said.

The Schaumburg, Illinois, company already has software development and research labs in India, which together employ about 3,000 staff. The company has also announced plans to manufacture mobile phones and network base stations in Chennai in south India by next year.

Motorola set up its first R&D facility India in Bangalore in 1991. Motorola designs and develops software in India for its entire range of products, including next generation wireless and broadband technologies, software platforms and application frameworks. As much as 40 percent of the software used in Motorola phones is developed by Motorola Software Group's Indian design centers. Besides Motorola Software Group, other divisions of the company including Motorola Labs, Core Networks Division and Embedded Communications Computing have development operations in India.

A number of multinational telecommunications equipment companies are investing in India, which is adding about 6 million new mobile subscribers a month.

Motorola's competitors Nokia Corp. and Telefonaktiebolaget LM Ericsson have also invested in manufacturing in India, after the country's largest service provider, Bharat Sanchar Nigam Ltd. (BSNL), indicated that it would give preference to vendors that make equipment locally. BSNL, in Delhi, is owned by the Indian government.

However, Motorola took BSNL to court earlier this month after being excluded in the technical evaluation for a large order from BSNL. The company asked in its petition for greater transparency in BSNL's tender process.

Source:http://www.infoworld.com

US faces bigger skill shortage than India: Premji

2006-10-26T11:10:00.000-07:00

Azim Premji, chairman of India's IT major Wipro has warned that the US faces a more acute skill shortage in information technology than India and blamed failings in America's education system and restrictive immigration policies.

"There is a scarcity of IT professionals in the US," Premji said, adding "engineering is not a growing talent, and that is a cause of concern."

Premji warns against perils of joblessness

He said Indian groups would confound expectations of a looming skills shortage in the country and continue to draw on lower-cost, highly trained graduates to retain their technological edge.

However, he said Wipro would also continue to expand outside India to serve non-English speaking countries and could open a base in Russia within 18 months.

Premji, a Stanford University graduate, told the Financial Times that the US education system was not doing enough to attract mathematics and science teachers or to steer students towards those subjects.

"Maths is not considered as important, and students are not getting a premium when they graduate as engineers," he said.

The US produces about 70,000 engineering graduates a year, a fraction of India's 400,000, though that number is boosted by holders of three-year diplomas.

Premji said US skill shortages have been made more acute by visa rules that have cut the number of science students and professionals allowed into the US.

He said the curbs made it difficult for outsourcing companies to serve US-based customers and warned that the powerful Indian IT industry could lobby the Indian government to impose retaliatory measures on the US.

Source:http://www.rediff.com

Asia - The alternative Engine for world economic growth

2006-10-25T17:04:00.000-07:00

AMERICAN consumers have been one of the main engines of global growth for the past decade. But now, as America's housing boom threatens to turn into a bust, many forecasters expect household spending to stall. A few even worry that America could come perilously close to a recession in 2007. Previous American downturns have usually dragged the rest of the world economy down, too. Yet this time its fate will depend largely upon whether China and the other Asian economies can decouple from the slowing American locomotive.

According to conventional wisdom, American consumers have single-handedly kept the world economy chugging along, whereas cautious Europeans and Asians have preferred to save. Yet the importance of America's role in global growth is often exaggerated. During the past five years America has accounted for only 13% of global real GDP growth, using purchasing-power parity (PPP) weights.

The real driver of the world economy has been Asia, which has accounted for over half of the world's growth since 2001. Even in current dollar terms, rather than PPP, Asia's 21% contribution to the increase in world GDP exceeded America's 19%. But current dollar figures understate Asia's weight in the world, because in China and other poor countries things like housing and domestic services are much cheaper than in rich countries, so a dollar of spending buys a lot more. If you want to compare consumer spending across countries, it therefore makes more sense to convert local currency spending into dollars using PPPs rather than market exchange rates.

However, the doomsayers argue that Asia's growth has itself been based largely on exporting to America, whereas domestic demand in the region has languished. Their evidence for this is that Asia is running a combined current-account surplus of over $400 billion, implying that it is contributing much more to world supply than to demand. Thus if America's demand stumbles, the growth in Asia's exports and output would also plunge.

Asia's export growth would certainly slow sharply, but it is the change in net exports that contributes to a country's growth rate, not the absolute size of that surplus. Since 2001 the increase in emerging Asia's trade surplus has added less than one percentage point a year on average to the region's average growth rate of almost 7%. Contrary to the received view, the bulk of Asia's growth has been domestically driven. True, domestic demand (investment and consumption) has grown more slowly than GDP over the past year everywhere except in Malaysia (see chart 1). But in most cases the gap has been small, especially in China, India, Japan and Indonesia. In contrast, growth in Taiwan, Hong Kong and Singapore has been heavily dependent on external demand over the past year.

It is true that exports account for 40% of China's GDP, but those exports have a large import component; only a quarter of the value of China's exports is added locally. The impact of a slowdown in export growth would therefore be partially offset by a slowdown in imports. China's GDP growth has come mainly from domestic demand, which has been growing by an annual 9% in recent years.

The idea that China's growth is mainly export-led is not the only popular myth. Another, says Jonathan Anderson, an economist at UBS, is that China's consumer spending is feeble. Several recent reports highlight that according to official figures spending has fallen from 50% of nominal GDP in 1990 to 42% today. But this partly reflects an even stronger boom in capital spending. Real consumer spending has been growing at an average annual pace of 10% over the past decade—the fastest in the world and much faster than in America (see chart 2).

There is also good reason to believe that official figures understate consumer spending in China because of their inadequate coverage of services. Purchases of homes by the Chinese have risen rapidly since they were first allowed in 1998, but these are also excluded from the figures. If they are added in, Mr Anderson calculates, total household spending has not fallen as a share of GDP.

How does this square with the common perception that Chinese household saving is extraordinarily high and rising? The truth is that it is not. The saving of Chinese households has in fact fallen from 20% to 16% of GDP over the past decade. The main reason why China's total national saving rate looks so high (at close to 50%) is that Chinese companies have been saving a much bigger slice of their booming profits (see article).

Bags and bags of shopping

Across many other Asian countries, the notion of the frugal Asian consumer is equally flawed, says Mr Anderson. Although consumption has fallen as a share of GDP in most Asian countries, this does not mean that households are saving more. Excluding China and India, household saving has fallen sharply, from 15% of GDP in the late 1980s to 8% today. The paradox is explained by the fact that wage incomes have risen more slowly than GDP as production has become more capital intensive. But this means that Asian consumers are spending a rising share of their income by borrowing or running down their savings. Amazingly, the savings rate of Japanese households has fallen more sharply than that of American households over the past decade.

AFP

Doing their bit to help the world economy

The IMF estimates that in Asia as a whole (including Japan as well as the emerging economies) real growth in consumer spending has averaged a healthy 6.3% a year in 2005 and 2006. This suggests that Asian consumers can help sustain fairly robust GDP growth in Asia even if America's economy takes a dive.

Some pundits have predicted a boom in Asian consumer spending over the coming years, which would help to fill the gap left by American consumers cutting back on their purchases. But if consumer spending is already rising strongly in Asia, there is little pent-up demand ready to explode. On the other hand, spending by firms could pick up. After the Asian economic crisis in the late 1990s, investment plunged everywhere except China. It has remained relatively weak. However, as the overhang of excess capacity and debt has disappeared, capital spending is now starting to perk up across Asia.

Japanese firms' average return on assets now exceeds long-term interest rates by 5%, the widest margin for decades, according to Merrill Lynch. The Bank of Japan's latest Tankan survey of business confidence found firms to be unexpectedly cheery. Big Japanese manufacturers now report insufficient production capacity for the first time since 1991 and plan to increase capital spending by 17% in the year to March.

Another reason for believing that Asian economies can decouple from an American downturn is that most of them have small budget deficits or even surpluses. This means they have plenty of scope to ease fiscal policy to support domestic demand so as to offset some of the fall in exports. The main exception is Japan, which has a massive public debt; Taiwan, where domestic demand is worryingly weak, is also constrained by a large budget deficit. South Korea, on the other hand, which has run a budget surplus for seven years, has plenty of scope to ease up.

The United States of where?

Not only is growth in China and the rest of Asia chiefly domestically led, but America's share of Asia's total exports has fallen from 25% to 20% over the past five years. Regional trade links within Asia have also deepened, thanks partly to growing Chinese demand. Goldman Sachs reports that five years ago China's imports for domestic use were only half as big as those for the assembly and re-export of products, but now they are roughly the same size. So strong domestic demand in China sucks in more imports.

China's exports to America have fallen from 34% of its total exports in 1999 to 25% now (adjusting for the re-exports which are made through Hong Kong). Chinese exports to the European Union are now almost as big as those to America and are growing faster.

When America sneezes, the rest of the world's economies may no longer catch a cold

America takes only 23% of Japan's exports, down from almost 40% in the late 1980s. However, this understates Japan's total exposure. Japanese firms (like those in South Korea and Taiwan) send a lot of components to China for assembly into goods, which are then exported to America as finished products. On top of this, if a sinking American economy pulled the dollar down with it, this would further squeeze Asian exporters.

A recent report by Peter Morgan at HSBC estimates that slower American growth will hurt China, India and Japan much less than it will the smaller Asian economies, such as Singapore, Taiwan and Hong Kong, that are more dependent on foreign demand. China, India and Japan account for three-quarters of Asia's GDP and so, given the deeper regional trade links, they should help to support demand in the whole region. If America's GDP growth slows next year to 1.9%, from 3.5% in 2006, as HSBC expects, then Asia's growth is tipped to slow from just above 7% this year to just below 6% in 2007. Weaker exports will badly hurt some industries, but overall, the region will continue to grow at a reasonable pace.

Could Asia withstand a sharper American slowdown? Hong Liang at Goldman Sachs estimates that if America's GDP growth drops to zero by the end of 2007 then China's annual export growth could plummet from 26% in early 2006 to a decline of 2% by late 2007. That sounds dire. Yet after taking account of the impact of slower export growth on imports and domestic demand (ie, slower growth in investment), Ms Liang estimates that China's GDP would still expand by a respectable 8%. That is significantly down from this year's growth rate of over 10%, which is still too fast to be sustained. China is today tightening policy so as to slow down its runaway economy: weaker external demand could be partly offset by reversing these measures.

In sum, if America suffers a slump, the economies of China and the rest of Asia would slow, but they are unlikely to be derailed. However, a slowdown in America could affect Asia indirectly through other channels. Most important and least certain of all would be the impact of an American recession on financial markets. Even if economies can decouple, global financial markets tend to be more tightly linked through the investment strategies of hedge funds and the like. If America's economy hits the buffers, this will surely trigger a rise in risk premiums and a drying up of market liquidity, pushing share prices lower in Asia as well as in America. When America sneezes, the rest of the world's economies may no longer catch a cold; but if Wall Street shivers, global tremors will still be widely felt.

Source:http://www.economist.com

Indian Semiconductor policy gets FinMin, Plan panel nod

2006-10-24T20:01:00.000-07:00

Manufacturing units have come a step closer to getting their tax liability reducedwith the proposed semiconductor fabrication policy, which allows companies unlimited loss carry forward facility, having been approved by both the Planning Commission and the finance ministry. Only the approval from the Cabinet is awaited.

The proposal, which will make the policy attractive to foreign companies, has been pending for a few months now. The loss carry forward facility is being given after studying the information technology ministry’s proposal to allow 100 per cent depreciation upfront.

The finance ministry had, however, earlier rejected the proposal on revenue consideration and said it is ready to give 33 per cent depreciation for three years. “Manufacturing units will now be able to reduce their tax liability accordingly,” a senior Planning Commission official said.

The IT ministry had asked for 100 per cent depreciation in the year of investment in the project, and excise duty paid on inputs to be made cenvatable against the excise duty paid on final products like wafers and semiconductors.

North Block, however, suggested a cenvat of 4 per cent for the semiconductor units and tax benefits at par with special economic zones. It also said cenvat exemption would be given to high technology products only.

The finance ministry has also supported the IT ministry’s proposal to extend the net foreign exchange positivity clause by 10 years in case of information technology SEZs. For multi-product SEZs, it said the net foreign positivity would be given for five years.

“Relaxing the positivity clause will be an additional benefit for units in export processing zones. It will also be helpful if zero excise duty is levied on imported raw materials,” said MJ Zarabi, former chairman and managing director, state-owned semi-conductor complex, Chandigarh.

The IT ministry has also advocated giving income tax and excise duty benefits to units set up in Himachal Pradesh and Uttaranchal. At the same time, the finance ministry has turned down the IT ministry’s proposal for research grants to be given to semi-conductor manufacturing units.

But objecting to the IT ministry’s proposal, the revenue department had pointed out that 100 per cent income tax exemption for 10 years, coupled with exemption on profits ploughed back for the next five years, would have an implication of Rs 17,500 crore. Excise duty reductions would also cost the government Rs 9,000 crore.

The hidden Temples of India

2006-10-23T19:36:00.000-07:00

Great Video...if you have 59 mins to spare.

Happy Diwali

2006-10-23T13:30:00.000-07:00

CPI asks Congress Govt to Study on Chinese SEZ model

2006-10-23T12:59:00.000-07:00

Communist Party of India (M) Politburo member Sitaram Yechury has urged Commerce Minister Kamal Nath to study the Chinese model of Special Economic Zones (SEZs) more carefully, including on issues like acquiring cultivable land, compensation to affected farmers and labour laws, before emulating them in India.

Referring to Nath’s remarks that the government is trying to emulate China to emerge as hubs of industrial activity, Yechury, heading a CPI(M) delegation to China, asked the minister to study the exact developments taking place now in Chinese SEZs.

Yechury, who concluded a visit to the Tianjin Economic Development Area (TEDA), being developed as a new economic growth centre in northern China on the model of Shanghai, also compared the compensation packages and tax concessions which the Chinese government is offering with those in India.

“The compensation package of TEDA is comprehensive and compact,” he said and noted that benefits of the Chinese system includes monitory compensation in lieu of acquisition of land along with provision of housing for the oustees.

The CPI (M) delegation held discussions with local officials on aspects of TEDA, such as acquisition of land, compensation, status of employment, and benefits like social security to the people attached to the TEDA.

Yechury noted that Chinese SEZs are only utilising barren land unsuitable for cultivation.

Relative percentage of cultivable land in China is less than that in India. This has led China to designate contiguous areas which consist mostly of the barren land, with only small pieces of cultivable land being earmarked for the Economic Development Areas, he pointed out.

“Not only that employment opportunities available with the setting up of TEDA absorbs people with relevant skills, it is also a must in the TEDA’s compensation package. As TEDA is owned and developed by the government, the people of this area also have a stake in the profits and other such benefits which are accruing to TEDA,” Yechury said.

The method adopted in China on giving employment to members of ousted families and that in India are in complete contrast, Yechury said.

On labour laws of the Chinese special economic zone, he said there existed a contract system for a three-year period. The employer should abide by laws of the land which govern the employee-employer relations. The company has to provide various social security provisions such as provident fund, ESI, pension and health insurance to the employee.

After the termination of the contract period, it is up to both the parties to renew or not to renew the contract. In the case of non-renewal of a contract, Yechury said, the TEDA would undertake the responsibility to impart to the employees professional skills which will help them get employment in other units in TEDA.

According to him, there has been no case of termination of contract so far. Instead of terminating the contracts, the manufacturing units are in need of workers. In India, on the contrary, the employer wants to be exempted from his social security obligations in the name of flexibility in labour laws, Yechury noted.

On issue of tax breaks, the CPI (M) leader said China offered negligible tax benefits compared to that of India. “Contrary to the Indian government’s claims, tax concessions in China are negligible in contrast to those offered by our commerce ministry.”

Yechury said the whole tax concession period in China was limited for two years only. Moreover, in the first year of the establishment of a manufacturing unit, a company could avail the benefit of full tax concession, but in the second year it gets only 50 per cent concession in various taxes.

From the third year onwards, a company is treated as a regular company established under the laws of China and has to meet its tax obligations fully, he said.

“This is completely in contrast to the tax concessions proposed in the SEZ Act in India,” he said.

The notion of “state within the state” was another important aspect noted by the CPI-M delegation, he said. In China’s first SEZ in Shenzen, established in 1986, there are laws to restrict the entry and exit of ordinary Chinese citizens.

Now there are a total of 54 Economic Development Areas (EDAs) in China, and such kind of restrictions are not being thought necessary after the experiences gained in the last 20 years, TEDA officials said.

Yechury said no EDA is allowed to harm Chinese sovereignty. The delegation noted that the SEZs being proposed now in India, on the contrary, will be treated as a state within the state because no state organ except Development Commissioners can intervene in their day-to-day activities.
Source:http://business-standard.com

Khosla stumps for solar, California ballot initiative

2006-10-18T14:47:00.000-07:00

SAN JOSE, Calif. — The big opportunity for solar energy is in utility plants, according to Vinod Khosla, who gave back-to-back keynotes on the subject here Tuesday (Oct 16.). The iconic venture capitalist who has started his own alternative energy investment company also stumped for California's Proposition 87, which would fund research into so-called clean technology.

"I now believe that thermal solar will be cheaper than coal-fired electricity plants. It is far more risky to build a coal-fired plant than a solar thermal one today," said Khosla, speaking at the Emerging Ventures conference.

Photovoltaic cells have made significant advances with thin film, multi-junction technology. Utilities represent an opportunity for solar energy that could amount to hundreds of billions of dollars, said Khosla, who earlier in the day he delivered a keynote at a solar power conference a block away that attracted an estimated 7,000 attendees.

Although many developers are pursuing the low-cost solar cells, Khosla said "that's exactly the wrong way to go.

"Solar systems would still cost $2 kiloWatt/hour if the cell cost went to zero. What we need are higher efficiency cells. We should be saying we will accept higher costs to get 30 percent efficient cells," he said.

Separately, Khosla spoke out in favor of California's Proposition 87 that would levy a fee on petroleum to be used in part to fund alternative energy technologies.

"This is probably going to be the most expensive race in the country this year," Khosla said, estimating oil companies have already spent $67 million attacking the measure and could spend $80-$100 million before the November vote.

Thirty percent of the Prop. 87 funds would go to university R&D, Khosla said. "Clean tech R&D has been declining in this country for 30 years. We absolutely need to have more R&D in this area," he said.

Another 57 percent of the Prop. 87 fees would be used to lower oil consumption, he added.

"Oil companies get a 500-percent depreciation on some assets. That's just one of a half dozen clauses I know of that are in effect subsidies for oil companies," he said.

Khosla is mainly known for funding a number of Silicon Valley's biggest ventures as a partner at Kleiner Perkins Caufield and Byers. He now devotes much of his time to the clean tech area which is the focus of Khosla Ventures. The new company has a broad portfolio of investments including bets on as many as eight alternative fuel companies.

"When oil went above $40 a barrel, a host of things became viable," said Khosla.

Semiconductor policy in India likely this month

2006-10-18T11:41:00.000-07:00

BANGALORE: The semiconductor industry in India has been waiting with anticipation for the announcement of the semiconductor policy since February, when finance minister P Chidambaran mentioned it in his budget speech.

However, the policy has seen delays due to a stalemate between the Finance and IT ministries on the issue of the fiscal incentive package for investors setting up fab units. According to sources, the finance ministry is wary about incentives, since the returns from investments in the fab projects take a long time, at least around eight-nine years.

The deadlock forced the IT ministry to shoot off a letter to the Prime Minister’s Office last month. Now, it appears that the two ministries have sorted the differences and, if all goes well, the policy could be announced sometime this month.

Speaking to CyberMedia News, Rajendra Khare, chairman, Indian Semiconductor Association (ISA), said that investors are delaying their India fab plans so that they could avail benefits from the policy.

“There is tremendous anxiety and also disappointment that the center has been slow on the policy announcement. Nowhere in the world has the fab industry come up without government support,” said Khare.

Some of the incentive demands that ISA had put forth include reduced tax and duties for critical items, development of physical and telecom infrastructure.

Among the main projects waiting in the wings include the $3 billion SemIndia project in Hyderabad that proposes 200-mm and 300-mm wafer fabrication facilities based on technology from Advanced Micro Devices (AMD) and an assembly, test, marking and packaging plant.

Khare said that the ISA has instituted “Techno-vision Awards” to recognize achievers in the Indian semiconductor sector. These awards would be presented during the ISA’s Vision summit in February 2007.

A fab grows in Hyderabad

2006-10-18T11:35:00.000-07:00

If Vinod Agarwal has his way, Hyderabad, a city known for its pearls and Old World charm, will soon become the capital of India's semiconductor industry.

Agarwal, a Silicon Valley researcher-turned-entrepreneur, has teamed up with the state of Andhra Pradesh to build a $3 billion fab -- India's first high-volume, advanced-technology chip plant -- on 1,200 acres of government land on the outskirts of Hyderabad. AMD, the world's second-largest chipmaker, has licensed its process technology; electronics manufacturer Flextronics is investing; and the Indian government is expected to take a 25% equity stake once it finalizes a semiconductor policy it has been debating for the past year.

Most of the funds for developing Fab City, as the technology park is called, will be provided by SemIndia, a consortium of nonresident Indian entrepreneurs of which Agarwal is chairman and CEO. In addition to the SemIndia fab, the park is expected to have additional factories making solar cells, flat-screen TVs, and other electronics products. The first phase of the project, a $100 million test-and-assembly line, is scheduled to be completed in a year. Agarwal says funding has been secured, but only one investor has been named.India is expected to consume $160 billion worth of electronics a year by 2016, according to Frost & Sullivan, a U.S. consultancy, and the semiconductor portion of that could be as much as $40 billion. But there are only two chip-manufacturing plants in the country, both government-owned and both using outdated technology. "With advanced-technology chip manufacturing, India would have the entire ecosystem necessary to fully exploit local consumption as well as the global markets," says Agarwal. "The time is right."

Dayanidhi Maran, India's 40-year-old IT and Communications Minister, agrees. "We have to make a start somewhere with the latest technology," says Maran, who has been spearheading the government's semiconductor initiative. "We just cannot say it is capital-intensive and let it go. This same project would cost us $10 billion if we put it off for another three years."

But getting anything off the ground in India is fraught with challenges. June Min, a Korean who was the first to announce plans to build a fab in India two years ago, has yet to accomplish his mission. And Intel has been negotiating for two years to expand its R&D operations and build a chip plant in Bangalore. One government official, who asked not to be named, says both sides had huge wish lists, and the government wasn't ready to compromise. "When other countries offer more subsidies," the official says, "it is natural for the company to invest there rather than haggle with India."

Fab City has its detractors, who believe the investment is too risky. "Setting up a fab in India is going to be an uphill task for anyone," says C. Dayakar Reddy, managing director of MosChip Semiconductor, one of the few fab-less chip-design companies in India, whose customers include IBM-GES and Panasonic. "You need to have enough experience, funding, and top-notch technologists, which India at present does not have, to get the whole thing going." Reddy says MosChip sends its designs to Taiwan to be manufactured. "We dare not bring the finished chips back to India for testing and adding software," he says. "We ship it to the U.S. directly, because once they come here and are again shipped out, we are slapped with excise taxes. The government thinks we are trading, when in fact it is our own IP. Unless there is a rational tax structure, manufacturing here is a no-win situation."

If the government doesn't come up with a semiconductor policy soon, Agarwal's project could be in trouble. But some take a longer view. "When Texas Instruments came to Bangalore to set up a design center 20 years back, there were similar hurdles -- no software policy, no ground rules, zilch," says B.V. Naidu, director of Software Technology Parks of India in Bangalore. "We're seeing the same when it comes to semiconductor manufacturing." Adds Raja Kumar, CEO of UTI Ventures, an Indian private-equity fund: "Even to dream of a project this size in India is commendable. And if there is proactive support from the government, we believe this could take off."

Source:http://biz.yahoo.com

2006-10-18T11:26:00.000-07:00

Software Wars

2006-10-17T14:16:00.000-07:00

Investing on the edge
In this column, Rob Kiyosaki talks about the advantage of having an edge while making an investment. In case if you don't know Rob....he is the writer of one of best selling books on personal finance " Rich Dad, Poor Dad".

I thought these four comments were particularly useful from his column...

Be careful about who gives you investment advice. If your advisor thinks an 8% return is a good return, you may want to look for another advisor.
Someone else's problem can be your opportunity.
Take the time to cultivate a stable of friends who know how to solve tough problems.
Learn to invest in investments where you can achieve an honest, legal advantage over other investors. When it comes to investing, why play on a level field?

2006-10-17T13:58:00.000-07:00

Most Indian design houses compete on cost, study finds
BANGALORE, India — The majority of India's VLSI design firms compete on cost, while relatively few are mature companies involved in end-to-end projects and even fewer are considered co-innovators, according to a new report by Frost & Sullivan.

The cost-based strategy leads to lower value addition and high investment in the workforce, and is marked by a high rate of staff turnover. The numbers of such firms in India is high, but the value they bring to the business at the end of the day is minimal, according to the report, which details the Indian semiconductor scene.

"Most startups in the VLSI design service market are optimizers, with a business model that supports a specific activity or a defined set of activities across the VLSI design chainbut the value added is minimal," the report said said. The reason for low value addition is that these firms are limited by their customers to task-level definition and relationships that end when the projects are complete, according to the report, which found that the value these firms bring lies merely in the productivity improvements realized over a period of time.

The enablers or mature firms provide customers with the infrastructure need across the VLSI design value chain, develop reference solutions and do chip integration. They work on a push-pull model—their push strategy is based on cost while internal design processes and methodologies are the pull component providing value to clients, the report concluded. They usually follow a fixed price model and work on end-to-end projects, the report said.

The third type of Indian design house, the co-innovators, work based on a pull strategy that provide more value to customers, though costs also play a role and add value to the global design chain, according to the report. These firms—relatively few of which exist in India—work a lot in intellectual property (IP) development and integration, especially with the rise in the number of system-on-chip (SoC) companies globally, according to the report. Their knowledge of final products is very high and they are rewarded with a share in the client's profits or some other means, the report said.

Source:http://www.eet.com

2006-10-17T11:59:00.000-07:00

India - A country of vegetarians? Think again!
The National Institute of Nutrition(NIN) released an interesting study on Indian food habits...the most interesting parameter of all was that 92.2% of south indians eat Non-Veg vs only 40.4% of North Indians.

2006-10-16T11:09:00.000-07:00

The influence of Cellphones on Indian Poor

In this post, Kevin from the Washington Post talks about how cellphones have empowered the indian poor....a classic example of how information is power...the poor fisherman in india have been able to command better prices by communicating with traders from the other shores...

6Million new cellphone subscribers a month in india...Area of coverage has trippled in the last year...look at these figures....wow that is astounding growth.....I am so happy to hear that....i think the best way to bring people out of poverty is education & empowering them with technology.

2006-10-16T10:58:00.000-07:00

India's incredible tourism story only gets better

With Conde Nast Traveller ranking India as the fourth most preferred travel destination and Lonely Planet selecting the country among the top five destinations from 167 countries this year, India has finally made its mark on the world travel map.

Global recognition is evident from the rising number of India-bound tourists. From just 17,000 international arrivals in 1951, the number has grown to 39 lakh in 2005. According to the Ministry of Tourism, we have already clocked almost 30 lakh foreign tourists between January and September, as compared with 27 lakh during the same period last year.

In the past three and half years there has been a 45.5 per cent growth in foreign tourist arrivals, pushing India's foreign-exchange earnings from $3.5 billion in 2003 to $5.7 billion in 2005. Foreign tourists in India spent an average of $1,470 per person last year; nearly double the global average of $844. France, the top tourist destination in the world, earned only $556 per tourist last year. The ministry estimates that by the end of 2012, India's foreign-exchange earnings from foreign tourists will cross $12 billion. In fact, the World Travel and Tourism Council estimated that Indian tourism industry would grow annually at 10 per cent over the next decade, the highest in the world.

Tourism in India is the third largest net earner of foreign exchange and contributes 6 per cent to our gross domestic product (GDP). It also employs the largest number of people. In 2003-04, according to the National Council for Applied Economics Research, the industry employed 4 crore people directly and indirectly, which was 8.78 per cent of the total employment in the country.

Packaging India

Much of the credit goes to the Ministry of Tourism's high-decibel 'Incredible India' campaign launched towards the end of 2002. The campaign mounted a concerted effort in international print, electronic, and Internet media besides outdoor advertising and road shows to showcase the country's tourism-friendly aspects. "It helped create high visibility and brought in high-value traffic into the country," says Amitabh Kant, joint secretary, Ministry of Tourism. Earlier, the ministry was solely dependent on its overseas offices to promote India as a tourist destination.

As the world is waking up to an India beyond the Himalayas, or the enchanting Thar Desert, the ministry is now focusing on niche areas like medical, ecology, rural, golf, wellness and spiritual tourism. With about 1.5 lakh foreign patients coming in every year, the medical-tourism market in India is now estimated at over $300 million and by the end of this decade it will grow up to $2.3 billion. Last month, the ministry partnered with the United Nations Development Programme (UNDP) to develop 71 villages across the country to showcase our unique traditions.

Spot the problem

While there is enough for the ministry to feel proud of, several problems like shortage of hotel rooms, delay in the issue of visas, a slew of taxes and poor infrastructure have yet to be sorted out. The Federation of Hotel and Restaurant Associations of India estimates that there are at present 97,000 hotel rooms in the country. It says if foreign-tourist arrival grows at 8 to 10 per cent over the next three years, India will need 30,000 additional rooms in various categories.

The Planning Commission estimates that India will need 1.6 lakh rooms more to accommodate the projected 58 lakh tourists by 2010, and 3 lakh rooms by 2020 to meet the projected tourist arrivals of 89 lakh.

The current growth of hotel rooms is less than 2,000 rooms a year, forcing hoteliers to double room tariffs in the past two years. Also owing to high land prices, there are more five-star hotels than budget hotels, making India a high-cost destination. Tarun Thakral, chief operating officer of Delhi-based Le Meridien hotel, says the land for hotel construction should be given on long-term lease as in countries like China and Malaysia.

Taxes — like luxury, service and transport tax — which total about 25 per cent do not help either. And then there is the visa issue. While countries like Malaysia, Thailand, and Sri Lanka have initiated visa-on-arrival scheme, a foreign tourist to India has to wait for a month to get an Indian visa. "If we do not implement a similar scheme foreign tourists with a South Asia itinerary will skip India," says Subash Goyal, president of the Indian Association of Tour Operators.

Source:http://www.hindustantimes.com

2006-10-15T17:23:00.000-07:00

Why hypermarts are a hit in India

It's just about noon on a Saturday, but the aisles are already crowded at HyperCity, the hypermarket in Mumbai's western suburb of Malad. From sports equipment to freshly baked bread, customers are checking out everything in sight, visibly overwhelmed by the choice.

They probably don't know it yet, but there's lots more in store as players like Reliance Retail, the Bharti group and the Aditya Birla group get ready to set up shop. And if the government relents, even Wal-Mart and Carrefour may be here in a couple of years.

The hypermarket segment has emerged as the format with the highest growth in most emerging markets and is likely to see the most action in India, too.

Today, the country has barely 25 hypermarkets, but the belief is that India's 67-odd retail destinations can easily accommodate over 1,000 hypermarkets by 2010. No wonder the early birds are working overtime to keep the footfalls coming.

The price proposition

People may love to shop, but their eyes never stray too far from the price tag. As Andrew Levermore, CEO, HyperCity Retail, says, "Rich people love low prices, the poor need them."

So, much like in other markets, footfalls in India, too, will be driven by prices. "Unless your prices are the best, especially in the food and groceries (F&G) segment, there's little point," says Levermore, explaining that it's actually the perceived value that customers believe they're getting that is going to matter.

But prices at hypermarkets need to be competitive because they're going to be up against not just the kiranas but also chains of convenience stores being rolled out by groups like Piramyd.

Says Upamanyu Bhattacharya, CEO, Trumart, the convenience store chain, "Our prices will match those of the hypermarkets and kiranas and we also intend to make home deliveries."

That appears to be an unbeatable combination, but retailers are finding ways to fight back. Neeti Chopra, marketing head at Trent, which cut its teeth in what is probably

India's most price-conscious city -- Ahmedabad -- is unfazed. "Prices at Star India Bazaar are on average lower by about 10-15 per cent compared to the kiranas. But more than the price, Chopra believes it's the numerous deals the Tata Group enterprise offers -- for instance, one bar of soap free with two bars -- that customers appreciate more. "In fact, suppliers themselves are willing to give away more if the volumes are high enough," she adds.

The right product mix

Hypermarkets must offer the best possible prices for F&G to bring in shoppers but, unfortunately, margins for this segment can be quite unattractive -- gross margins are estimated to be at best around 10-12 per cent.

To make up for this, they're trying to ensure that they sell an optimal mix of food and general merchandise, the idea being to sell more of the latter, which command better margins. This isn't a trend restricted to India. Even at British hypermarket chain Tesco, for instance, non-food items now account for more than half the revenues.

Says Levermore, "We have an ideal product mix of 60 per cent in general merchandise, which allows us to deliver exceptionally good prices on food and at the same time recover our margins."

Ideally, a 40:60 mix of food to non-food should yield a blended gross margin of around 18-19 per cent.

At Big Bazaar, the ratio is similar, with around 33-36 per cent coming from food and 63 per cent from general merchandise.

Says Rajan Malhotra, head, Big Bazaar, "We are not allocating more than 20 per cent of the space for F&G, although internationally we have seen more space being devoted to this segment. We're also trying to rotate stocks once a week, although currently we're doing stock turns once in two weeks."

Do it yourself

In order to beef up the margins, hypermarkets are also continuously striving to bring down the share of branded products, substituting them with store brands. No category has been left unexplored.

"We are experimenting with store labels for electronics and white goods and they should be out by the end of the year," says Malhotra.

He adds that while the share of store brands is as high as nearly 50 per cent for apparel, for general merchandise, Big Bazaar does not have too many private labels yet.

At Hypercity, the share of store labels is already at 30 per cent. Explains Levermore, "There are certain categories -- such as FMCG -- where the brand loyalty is strong and it's difficult to have too many in-house brands. But in apparel or even home furnishings, it can be as high as 100 per cent."

In fact, Star India Bazaar sells only its own apparel labels, although its overall share of private labels is still low at 10 per cent of its total sales. "We're looking to up that to about 20-25 per cent," says Chopra who believes it's possible to go in-house even with beauty products.

Farm out the purchases

Retailers are also working overtime to keep costs in check by improving sourcing efficiencies.

The idea is to pick up agri-products from as close to the farmer as possible since the seepage across the distribution channel is high: a coconut, which retails in Mumbai for Rs 12 per unit, is marked up nearly 500 per cent.

The cumulative wastage across the supply chain from farm to fridge, estimates PricewaterhouseCoopers, can be as high as 25-40 per cent. Add the tax that needs to be paid to the Agricultural Produce Marketing Committee and the tab is even higher.

Says Levermore, "Today, there are too many middlemen. To be able to capture value, we need to be able to source directly from the farm-gate, bypassing intermediaries, so that both the farmer and we benefit."

Big Bazaar's Malhotra claims he's already going to the farm for some products. "That's why we can sell potatoes at the same price, all the year round," he points out.

To be able to do this, Big Bazaar is attempting to outsource its inventory management: it is exploring an option where the inventory will be owned by another group company but can be drawn on as and when required.

It also has an arrangement with suppliers by which it buys centrally, but has them deliver locally. "The replenishment and payment cycles are driven locally -- we own the inventory only when it is on the shopshelves," explains Malhotra.

Levermore believes that while initially costs may rise, large investments in the back-end -- cold storage units at important locations and refrigerated vans to transport goods -- are a must.

Get more out of suppliers

While initially reluctant to part with more than what they offer kirana stores, FMCG suppliers today are coming around to the view that the modern store format does have its advantages.

"For decades you had a handful of companies supplying to 12 million kiranas who individually had very little bargaining power. But we are seeing a change in attitude as they realise that modern retail encourages growth. The margins from suppliers are getting better," confirms Levermore.

Observes Ravi Naware, head, ITC Foods, "It is true that the interaction between a consumer and a product is far greater in the modern stores. We can make our products more visible by creating special units or blocking off shelves or doing special promotions. That is not possible in kiranas."

Naware admits that retailers are asking for higher margins than kiranas on established categories and concedes that margins on these sales would be lower.

Adds Sangeeta Talwar, executive director, marketing, Tata Tea, "It's true that sales from modern trade outlets yield us lower margins, but at the same time we are beginning to see increased throughput."

Go the extra mile

In India, the poor infrastructure both supports and takes away from the attractiveness of the hypermarket.

As Ranjan Biswas, partner, Ernst & Young says, "A one-stop shop is an ideal proposition for a family, but people are also reluctant to drive long distances in heavy traffic. So there has to be more in it for customers than just price."

Agrees Levermore, who's cashing in on the fact that shopping in India is like a family outing. "Just having a store and air-conditioning isn't enough. We have an environment that supports browsing with spacious aisles and we have entertainment options -- game zones and a couple of restaurants," he says.

To ensure that all its stores are full, Big Bazaar is taking care to see that regional preferences are catered for. Says Malhotra, "At least 20-25 per cent of the range has to cater for local tastes, especially in apparel where the choice of colours varies from region to region. We do a catchment study to design our product range."

Star India has gone to the extent of selling "oiled dal" in Ahmedabad, which is the way the locals like it. And to keep the cash counters ringing, it has introduced store credit cards.

Explains Chopra, "The idea is to give customers credit for a month like the kiranas do. Also, it has empowered the women, many of whom would otherwise have not been eligible for a credit card. Consequently, we're seeing more spending."

And that's exactly what retailers are betting on. They're convinced that the Indian consumer's changing lifestyle and attitude will drive him to spend more.

After all, at an estimated $230 billion, the size of the entire Indian retail sector today is less than Wal-Mart's turnover: $285 billion. Of this, the organised sector accounts for just 3 per cent, or $7 billion. That's expected to grow by over 400 per cent to $30 billion by 2010, according to Ernst & Young.

As Levermore says, "Given the potential size of the market, there's plenty of room for more players." That may be true but even early birds cannot afford to take it easy.

Quickbite: Hypermarket history

With full lines of groceries and general merchandise, a hypermarket is a mammoth retail facility. It could be called a superstore that combines a supermarket and a department and displays an enormous range of products under one roof.

The idea is to be able to provide a customer with all of his or her routine weekly shopping needs in one trip. The concept was pioneered by the Fred Meyer chain, which opened the first hypermarket in 1931 in Portland, Oregon.

Fred Meyer is now part of the largest grocery store chain in the US, Kroger. In the US, stores are typically single-level enterprises and most of them are open for long hours, except on major holidays.

Hypermarkets are very controversial in the US and face opposition mainly from preservationists who feel they destroy conventional grocers and supermarkets. The world's largest chain of hypermarkets today is Wal-Mart, followed by Carrefour of France. The first hypermarket in the UK was opened by Tesco in 1976.

In Germany, the hypermarket concept is not as widespread as it is in other countries. There is strong competition from more focused discounters as well as legal restrictions on the size of stores, the pricing policy and opening times.

After the success of super and hypermarkets, and amid fears that all smaller stores would be forced out of business, France enacted laws that made it more difficult to build hypermarkets and also restricted the amount of economic leverage that hypermarket chains can impose upon their suppliers.

On the other hand, the Japanese government encourages hypermarket installations, as mutual investment by financial stocks are a common way to run hypermarkets.

Japanese hypermarkets may contain restaurants, Net cafes, beauty salons, a full range of groceries, and department store merchandise all inside the same store.

A recent trend has been to combine the dollar-store concept with the hypermarket blueprint, giving rise to the "hyakin plaza" (Hyakin means �100 and roughly equals $1). The Tokyo Hyper fish market, the world's largest fishmarket, is also a hypermarket.

Source:http://www.rediff.com

2006-10-11T11:23:00.000-07:00

How to present to Investors

In this essay Paul Graham from Y Combinator funds gives an insightful summary of things that the investors look for when presenting. The following comments were particularly interesting:-

What you must not do is seem nervous and apologetic. If you've truly made something good, you're doing investors a favor by telling them about it. -> Counter intuitive to the indian culture of showing respect and being pleasing when you need help from others..

If you have any kind of data, however preliminary, tell the audience. Numbers stick in people's heads.But don't give them more than four or five numbers, and only give them numbers specific to you. You don't need to tell them the size of the market you're in. Who cares, really, if it's 500 million or 5 billion a year? Talking about that is like an actor at the beginning of his career telling his parents how much Tom Hanks makes. Yeah, sure, but first you have to become Tom Hanks. The important part is not whether he makes ten million a year or a hundred, but how you get there.

What Sequoia Ventures looks for is the "proxy for demand." What are people doing now, using inadequate tools, that shows they need what you're making?

It's easy to convince investors there will be demand for a cheaper alternative to something popular, if you preserve the qualities that made it popular.

The first cut is simply to be one of those they remember. And the way to ensure that is to create a descriptive phrase about yourself that sticks in their heads. In the startup world, they're usually "the x of y" or "the x y." Viaweb's was "the Microsoft Word of ecommerce."

2006-10-09T12:11:00.000-07:00

India's mystifying rise
There were many smiling Indian faces last week. Our economy again beat forecasts and grew 8.9% in the April-June quarter. India's economic rise bewilders Indians. No one quite understands why this noisy and chaotic democracy of a billion people has become one of the world's fastest growing economies.

This is the fourth year we are looking at around 8% growth, and this follows 22 years of very respectable 6% annual growth.

With 25 years of high growth per capita income gains have been huge: from $1,178 in 1980 to $3,051 in 2005 (in ppp). What puzzles everyone is that India is not following any of the proven paths to success.

Compared to the classic Asian strategy exporting labour-intensive, low-priced manufactured goods to the West India's economy is driven more by consumption than investment, domestic markets more than exports, services more than industry, and high-tech more than low-skilled manufacturing.

With consumption accounting for two thirds of GDP, ours is a people friendly model; hence, inequality has grown much less. Our Gini index is 33, compared to 41 for the United States, 45 for China, and 59 for Brazil. (In a perfectly equal society Gini is zero.)

Our domestic orientation has meant that our economy is far more insulated from global downturns, and is less volatile. More importantly, 30-40% of our GDP growth is due to rising productivity rather than mere increases in capital and labour.

Ironically, while high end, capital intensive manufacturing is succeeding, we have failed to create a broad-based industrial revolution based on low end, labour intensive manufacturing. Hence, we are not creating enough jobs. This is a real worry how will we move our vast army of people from the rural to urban areas?

Even more perplexing is that rather than rising with the help of the state, India appears to be rising despite the state. The entrepreneur is clearly at the centre of our success story. We have highly competitive private companies now, a booming stock market, and a modern, well-disciplined financial sector.

Competitiveness runs deep. More than hundred companies have a market cap of over a billion dollars. Foreign institutions have invested in over 1000 Indian companies via the stock market. Of 500 Fortune companies 125 now have R and D bases in India, and 380 have outsourced software development to India.

Our economy may baffle us but we are agreed on one thing. India is succeeding because the state is gradually stepping out of the way. The pace of reform is frustratingly slow, but incredible as it seems, every succeeding government after 1991 has persisted in reforming. And even slow reforms add up.

Yet, the state has not lived to its side of the 1991 bargain. It hasn't built enough roads; nor given us uninterrupted power and water. Government schools and health centres are rotten. The police are corrupt.

In short, we don't get the services that citizens in other countries take for granted. The Indian state is so riddled with perverse incentives that accountability is impossible. The tragedy is that there are so many in this government, supported by Left allies, who want to bring back state controls and kill our golden age of growth.

I sympathise with Chidambaram's poignant plea to these growth killers "give us some political space to reform", he said, so that this UPA government might be able to take some minimal credit for this great achievement.
Source:http://timesofindia.indiatimes.com

2006-10-09T11:47:00.000-07:00

Hyderabad to get urban entertainment centre

A consortium with Pantaloon Retail (India) Ltd as the lead member would set up an urban entertainment centre project in the heart of Hyderabad, on a Build Operate and Transfer (BOT) basis.

The Andhra Pradesh Government has awarded the project to the consortia, which has formed GSG Construction Pvt. Ltd as the Special Purpose Vehicle company for executing it. The project would come up in the campus of what was earlier the Gandhi Medical College in Basheerbagh.

To come up on a 5.61 acre plot, the project is estimated to cost Rs 137.52 crore. It would primarily comprise a retail shopping mall, with a minimum of 50-60 per cent of the total built-up area, according to a Government press release here.

In the balance area, facilities to house hospitality, leisure and entertainment would be developed. A multi-purpose convention centre, restaurants, multiplex, food courts, gaming zone, family entertainment center, indoor theme part and ethnic enclosure with a crafts bazaar for handicrafts for the purpose of tourists have been planned.

Efforts would also be made to renovate the heritage building and develop them as ethnic enclosures. Heritage structures like the Principal Room and Main build of Lady Hydari Club are to be conserved as per the guidelines already issued by the Hyderabad Urban Development Authority (HUDA). The Project is being implemented by the Tourism Department. The consortia has been given the land on a lease period of 33 years.

Meanwhile, the plans of the State Government have invited stiff opposition from the People's representatives from Hyderabad, including the legislators and Members of Parliament.

They argued that, already the area is choked and permission for a venture like this would only aggravate the problem.

They argued that it was the right place to house the Offices of the Hyderabad Collectorate as well as the various departments.

The Government defended that the land was transferred to the Tourism Department to enable some private parties to set up the Entertainment Centre to raise money for paying back the costs incurred on the newly built Gandhi Medical College and hospitals in Musheerabad.

Source:http://www.thehindubusinessline.com

2006-10-07T00:20:00.000-07:00

Manmohan for opening up education, legal services

Prime Minister Manmohan Singh today made a strong case for opening up the legal sector and called for a policy regime to facilitate more investment in education.

Underlining the government’s commitment to sustaining rapid growth of the services sector, Singh said, “We are considering setting up a high-level group in the Planning Commission to look into all aspects of the services sector and suggest policy measures to sustain its competitiveness.”

The high-level group will consist of members from government, business and academia.

The prime minister’s support for liberalising education and legal services comes on the back of the commerce ministry’s suggestions in this regard. Singh was speaking at a summit organised by the Federation of Indian Export Organisations.

“We need huge investments to set up more universities, professional colleges and nursing schools. We need a policy regime which facilitates and promotes investment in education. More than $3 billion is spent annually by students for studies abroad. This could be easily retained in the country if we are able to expand educational facilities,” he said.

Similarly, a more open legal sector was necessary with increasing integration of the economy with the global one, since expertise was needed in international, commercial and third country law, he said.

Singh said health services was another emerging area. “Medical outsourcing and medical tourism, in particular, provide an opportunity for the health sector, which we should be able to exploit. For this, an accreditation mechanism for hospitals and laboratories needs to be established,” he said.

Singh also pointed out that the largest single item in the country’s export basket was the remittances sent back home by workers in foreign countries. The total remittances to developing countries exceed FDI flows and are twice the official development assistance, he said.
Sources:http://business-standard.com

2006-10-06T14:04:00.000-07:00

The debate over public vs. private ownership

What ails the public-company ownership model? For generations, public ownership was unassailable as the right way to promote the best management of a company's short-term performance and long-term health. As a worldwide equity culture blossomed during the second half of the last century, the evidence appeared everywhere: mutually owned companies demutualized, family- or employee-owned businesses undertook IPOs, and governments privatized state-held enterprises to capture the long-term value created by the capital market approach to governance.

Not so today. More than half of all CFOs say they would cut a project with a positive net present value to hit a short-term earnings target set by the market.

¹ Private equity firms are raising capital at a record pace, acquiring businesses, and in many cases creating tremendous value for themselves and their investors. And corporate boards of directors, which are meant to manage for the long term, are getting sucked into short-term issues, such as compliance. Family-controlled companies (or those influenced by families with a substantial stake) have often performed better than companies that are fully publicly owned—particularly in Asia.

At a McKinsey CFO forum in London during the summer, a panel of experts dug into the current trends in value creation, varied approaches to ownership, and the governance implications for both public and private companies. The panelists were Kurt W. Bock, CFO at the publicly listed German chemical company BASF; Johannes P. Huth, managing director and head of European operations at Kohlberg Kravis Roberts (KKR); David Pitt-Watson, chief executive of Hermes Focus Funds (Europe's leading shareholder activist fund); and Lennart Sundén, president and CEO of Sanitec, a private-equity-owned company. (See Panelist Profiles.) The panel discussion was moderated by Richard Dobbs, a partner in McKinsey's London office. What follows is an abridged version of the roundtable debate.

Richard Dobbs: Johannes, let's start with you. How do private equity firms create value?

Johannes Huth: There has really been a change in how private equity firms have generated value over the past 30 years. In the 1980s private equity firms generated value simply by being able to buy companies relatively cheaply and later selling them at a better price. In the 1990s a lot of value was generated through what you could broadly call financial engineering. Today the markets are fairly efficiently priced, and financial engineering is no longer a differentiating factor. Everyone can do it, and everyone has the same tools.

So the way that private equity creates value today is by fundamentally changing businesses and driving growth. We can do that by making sure that management is a significant participant in value creation and by maintaining our focus. If you run a large conglomerate, there is always one business that isn't a priority in terms of capital allocation, but we can run every one of our businesses as a priority and dedicate the necessary capital to them. We're probably also better at corporate governance than a public company. When we acquire a business, we spend a lot of time on due diligence so that when we sit on the board, we have a detailed understanding of what the company does. That enables us to be very good sparring partners for the management team in further driving value.

Richard Dobbs: Lennart, you have worked at a listed company in the past. You are now the CEO at a private-equity-owned company. What differences have you seen between the two models as you've moved from one to the other?

Lennart Sundén: The two models are actually considerably different, but more so around implementation than around strategy. There really aren't any shortcuts to developing a business; you have to do what is right in the industry. But how to go about it—developing the business plan, deciding on the value creation program, and making decisions while under way—these things are quite different.

In a private equity context, for example, we can make decisions very quickly. We don't have to wait for the next planned board meeting, we don't need to communicate anything to a wide range of investors, and we don't need to tell competitors anything if we don't want to—just a very short communication between the owner and management and it's done. That makes it a very competitive model compared with larger public companies, where the board may be coming in on a more infrequent basis and a lot of time is spent meeting all the requirements that listed companies face today.

Richard Dobbs: And what about long-term value generation?

Lennart Sundén: It's true that private equity funds are temporary owners of a business; that's their model. But if we expect to generate good value when we sell that business either to the stock market or to another acquirer, we have to remember that those potential acquirers will only pay for something that they believe will have value in the long term. So if we haven't invested in research and development, if we haven't invested in marketing, if we basically have stripped a business of its future growth opportunities, we won't get paid for that business when we sell it. The only way that we can actually create something that will have value is if we do invest in that future growth, and I really fundamentally believe in that.

Richard Dobbs: Kurt, many of the players in your industry are private equity owned, but you are listed. How do Lennart and Johannes's comments resonate with your experience?

Kurt Bock: In the chemical industry, the difference between a private equity company and a publicly quoted company is rather small, at least in terms of management's approach. The major difference is that as a large group with about €50 billion in annual sales, we certainly look at the synergies between our businesses, compared with private equity, where they have separate investments and they look at every separate investment on its own. The consequence for us is that whenever we realize that a business no longer fits in our organization, we sell it off. In that sense, we also feed the private equity industry.

Richard Dobbs: So the relationship between the public and private models has become symbiotic, in a way?

Kurt Bock: At least in the sense of healthy competition, yes. Private equity has helped tremendously to make our industry more disciplined, particularly around corporate performance and health. We in the chemical industry were always talking about good health and forgetting about good short-term performance. Only in the past ten years has the industry faced up to the fact that it has to deliver more to its investors. In BASF's case, we have restructured quite dramatically and over the past three years have earned a significant premium on cost of capital. Also, the time we spend making difficult decisions has shortened dramatically over the past five to ten years. Today managers realize that they either get it done or they're out.

We should remember, though, that private equity companies can also mismanage a business. Sometimes they do seem to walk on water, and some investors today are extremely comfortable with private equity investors. Some banks, for example, really throw money at private equity firms as if they know how to do this better than anybody else. That's a very strange development when people who work in private equity often have a reputation for being more capable of running a business than people who have industry-specific experience in management.

Richard Dobbs: Johannes, to follow up on Kurt's earlier point, do public market investors look at business in the same way as private equity investors?

Johannes Huth: No. The two are fundamentally different. A public market investor might reason that if one business is trading at 10 times earnings and a similar one is trading at 15, then the former is undervalued and the investor should buy the undervalued stock and then trade up. That's not the way private equity investors look at a business. We look at the latter business and reason that while it's trading at 15 times earnings, if we take out some costs, maybe restructure something here, sell something there, we can get this business really at an implied value of 10 times, and that's much better. So we look at it, really, from an industry perspective, and I think that's why we are much closer to the way that some of the better-run companies are. If you ask what's our role model, it isn't Goldman Sachs. It's much more like GE: we want to be a very good manager of businesses.

Richard Dobbs: Let me just throw out this question: what motivates the board members of private companies compared with public ones?

Lennart Sundén: I think it comes down to the involvement of board members. Family owners are very involved, and if they have the multigenerational perspective, they are often ever more so. In a public company, board members are a little more come and go. There may be a few replacements every year, and there are always some who are less informed. And while in most cases they make the effort to really be informed, they are inevitably a bit less into the business than the others. In the private-equity-owned firms that I have been involved in, the board members are very, very informed and follow the business closely, partly because they often have a substantial stake in it.

Johannes Huth: Yes, I agree. In private equity, the people who sit on the board are the ones who have actually acquired the business, and when you acquire a business you tend to go through three to four months of very intensive due diligence to understand it better. So when you join the board, you've already spent an extensive and very intensive period of time learning the business and working with the management team to develop a business plan. You've talked to the CEO, yes, but you've probably also gone two or three levels down and visited a branch manager here or gone to a foreign country and visited the manager there. And, of course, we have our remuneration tied directly to how a business performs, so we are very interested in making sure it does well. Those mechanisms are in place to make sure that you pay attention—but they may not exist in the larger public businesses.

Kurt Bock: I would add that it's really important for a board member to have an intrinsic motivation to do the right things. At BASF we support that by making compensation heavily dependent on the company's success in the marketplace, so that managers and employees alike are highly motivated to make the company better every single day, both from a company and a personal point of view. Indeed, we have the same compensation matrix across the entire company, so we have about 1,000 people who are members of our stock option program. Even the bonus payment for our workers in Germany is paid on the same matrix as our board compensation, and this is all very transparent, so people can really understand what they will get if we achieve a certain return on capital or premium on the cost of capital.

Richard Dobbs: So, David, you have been an investor in both private equity and directly in public markets. What's the key difference between the two ownership models?

David Pitt-Watson: I think the point Johannes made is key, actually, about the way different owners behave. You can have a public company that behaves as if it were private; it's extremely well run, it's financing itself properly, and yet it's public. The difference Johannes would note is that with private equity, if you're not well run the owner is going to be on top of you immediately. Private equity investors will make sure that you're running yourself correctly. They will identify companies that are really underperforming, see how they can be improved, invest in them, and incentivize management to do the right thing.

As someone who's interested in the public equity side, I would say, "Gosh! I would really like public equity companies to be run that way." In contrast, I would observe that what most public equity funds do, as Johannes reminds us, is buy and sell shares—they don't actually take an awful lot of care about how it is that they own companies. And I would say, "My goodness, we seem to be losing an awful lot of value from public markets if a private equity firm can take over a company at a premium, incentivize itself, and then turn around and make almost as good a return in five years' time as you would have made in public equity."

For public-company managers, the big issue is that if you're running a company and you have a bunch of so-called owners who aren't actually owners at all—they're traders—how do you respond to them? Forinvestors, the question is how they create the advantages of private equity oversight while maintaining public-company ownership. Intriguingly, of course, the way over this problem is to recognize that we're all getting our funds from exactly the same places; we're all trying to make decent returns with the savings of people who are saving for their pensions, for their life insurance over 20, 30, 40 years. Of course, we have to be interested in the short term, but actually we need to be paying our pensions in 30 years. It seems to me that if public equity managers could say, "We will do all the things that we would if we were under private equity—indeed we can be much longer term than private equity can possibly be"—then that would be a better model than the one that we have right now. Too often, companies in the current model feel they have to respond to the short-term pressures of share price and analysts.

Richard Dobbs: Kurt, does that difference between owners and traders show up differently among different types of investors? What's your experience, especially with hedge funds?

Kurt Bock: Our experience so far with the hedge fund managers has been positive because most of them are really value investors, who are fundamentally interested in the development of the company. However, in one recent unsolicited takeover, we came across very, very short-term arbitrageurs for the first time, and they're a totally different type of animal. They clearly couldn't care less about our long-term emphasis on innovation. When we explained why our proposal to the target's shareholders was better than the management's proposal, they listened politely, but they just wanted us to pay more money, full stop. With those people, you really can't have an intelligent discussion about the company. Those who care, they want to be strategically convinced, and they want management to deliver. So it's all about credibility, and credibility is the result of years of hard work to deliver what you promised, and that is important from the investor's point of view.

Richard Dobbs: On another topic, what do you each think about the way to measure a business's performance and its health? How do you think about balancing the two?

Lennart Sundén: In a highly leveraged company, one would follow different indicators than in a listed company with a normal balance sheet. On a daily or monthly basis, you measure cash flow, covenants, and the fulfillment of initiatives, for example. Then you follow the growth plans or the restructuring plans over a couple of years to see how the company performs on a monthly basis—to see that the company actually delivers on what it has promised. Reporting on those things is very tight in my present environment, whereas the public reporting for a listed company might just have a few lines mentioning that there are projects going on.

David Pitt-Watson: Like every other investor, we're trying to invest long-term insurance and pension money, so we put it in companies that we think will give us a long-term return. We'd obviously like them to be maximizing that return, which underpins all sorts of familiar financial disciplines. We're hugely prepared to take on individual risks in companies because we are investing in 3,000 of them. If a risk looks sensible we would love to back it, but we need to understand what the risk is. We want people to be properly incentivized to do the right thing. We want clarity of strategy. We want, for example, to know that a company is the best owner of the businesses in its portfolio, that it is competitive in the market, and that its organization is constantly being renewed to face new challenges. We want companies to behave in a way that is sustainable—partly because they will attract regulation if they don't, and partly because we're representing literally millions upon millions of pensioners, and it makes very little sense for us to be encouraging companies to do unsustainable or unethical things. So these are the sort of measures that we look for. Frankly, we get very worried about companies that use "fiddleable" accounting measures like EPS as the basis for driving themselves forward.

Richard Dobbs: Johannes, what kinds of performance indicators does KKR look for?

Johannes Huth: Measurement systems and performance indicators are very important, and we pay a lot of attention to them when we actually enter a business. This goes beyond the monthly P&L cash flow and balance sheets, to include the kinds of metrics that will give us some visibility into the future. That metric could be understanding customer behavior or it could be a measure of our own performance in a related area. For example, we own a business that makes machinery for plastics, and one of the things we look at is how BASF does in sales of plastics, because that's a leading indicator. If there's a lot more sold, customers will need more machines; therefore we know roughly what to expect. We develop these measurements as part of the acquisition process and then implement them once we take ownership. Clearly, we're very cash flow driven, rather than earnings driven, because for the first few years we have to repay the loans we take on to buy a business. So we have rolling daily cash flow forecasts in every business, and with today's technology, that's quite possible to implement in pretty much any business. Yet again and again we're amazed at how unsophisticated some of the cash-flow-monitoring mechanisms are, even in large businesses.

Panelist Profiles

Kurt W. Bock is CFO at the German-based chemical company BASF. BASF itself is publicly held, but a number of its businesses have been sold to private equity firms, and many of its major competitors are now private equity owned.

Johannes P. Huth is managing director and head of European operations at Kohlberg Kravis Roberts. KKR is one of the original US buyout firms and now operates in Europe as well. The firm has taken the view that the private equity model is a way of creating more value than a quoted company does.

David Pitt-Watson serves as chief executive of Hermes Focus Funds, Europe's largest shareholder activist fund manager and the world's only one sponsored by a major investment institution. Hermes invests in companies that are grappling with issues concerning strategy, management, governance, or capital structure. It works with the board to ensure that change is implemented.

Lennart Sundén is president and CEO of Sanitec, a leading European provider of bathroom products, which is currently owned by the private equity group EQT. From 1977 until 1998, he worked in various positions at publicly held companies, including 21 years at Electrolux and 5 years as president and CEO of Swedish Match.

Source:http://www.mckinseyquarterly.com

2006-10-05T10:43:00.000-07:00

High-End Board Design Seen Growing In India

BANGALORE, India — The failure of many Indian pc-board makers has deterred new entrants, according to the India Semiconductor Association (ISA), but the establishment of several new board design centers and the prospect of new government incentives for volume manufacturing could spur an Indian board industry.

Pressure on OEMs to develop new products or variants of current ones have prompted many to outsource hardware and system design work to Indian companies. "OEMs have set up design centers in India and are outsourcing work to companies here such as Wipro and HCL Technologies," ISA said. "The entry of electronic manufacturing services companies into [India] and growth of local companies is also spurring the growth of hardware design."

Manufacturers like Flextronics and Elcoteq are seeking complete solutions for VLSI, board and hardware design along with embedded software development are acquiring Indian companies. Flextronics acquired five Indian companies in a one-year period.

"Hardware [and] board design has matured in India . . . but there are very few companies that are competent in very high-frequency designs," ISA said. India "has very good capability in board layout and assembly, but in terms of fabrication of the board, it lacks capability."

By the end of 2007, ISA said it expects high-end board manufacturing will begin in India.

Source:http://www.informationweek.com

2006-10-04T15:42:00.000-07:00

Bangalore Braces for Protest

BANGALORE, India, Oct. 3 — India’s technology capital, where dozens of multinational companies have operations, will completely shut down on Wednesday as part of a protest over a border issue with a neighboring state.

Shops, offices and businesses in Bangalore, which is home to the Indian units of technology giants like Texas Instruments, Yahoo and Google, are expected to close for 12 hours beginning at 6 a.m. local time on Wednesday (8:30 p.m. Tuesday, Eastern time).

The shutdown is expected to cover all of Karnataka state, including Mangalore and Mysore as well as Bangalore, the state capital.

India’s “outsourcing” sector, which handles programming and data processing work, call-center operations and other business services for companies around the world, earned $23.6 billion in revenue last year and employs nearly 1 million workers. About one-quarter of those workers ese are in Bangalore, and the city accounts for nearly one-third of the country’s outsourcing revenues. The two largest companies in the industry, Infosys Technologies and Wipro, are based here, performing technology-related services for the likes of Honeywell, Cisco Systems and Microsoft. Both Infosys and Wipro, like nearly all other major employers in the city, have given their employees the day off on Wednesday.

“Most companies have prepared a backup,” said Sangita Gupta, vice president of Nasscom, the outsourcing-industry trade association.

India’s internal geographic divisions are based mainly on language, and boundary quarrels have not been uncommon. In Karnataka state, whose official language is Kannada, the northern border with Maharashtra state has been disputed for years. Activist groups organized the shutdown to protest what they say has been deliberate inaction by the federal government in resolving the dispute.

Anticipating violence, Bangalore authorities said that police officers would be deployed all over the city on Wednesday, and that schools and colleges would be closed. Banks and public transportation will probably not operate.

Most outsourcing companies have asked employees to work on the weekend to make up for time lost to the shutdown. Companies that provide call-enter and other customer-support services from Bangalore said they would reroute calls to centers in other parts of India.

Bani Paintal Dhawan, a spokeswoman for Infosys, said the company had made arrangements to maintain important business-process operations for its clients during the shutdown.

Source:http://www.nytimes.com

2006-10-03T16:21:00.000-07:00

Follow Chinese model: Goldman Sachs to India

Mumbai, Oct 3 Indian policymakers may find this shocking, but some foreign investors are recommending radical changes if India wishes to be one of world’s largest economies. Jim O'Niell, MD and chief of economic research, Goldman Sachs, a leading global investment bank, on Tuesday suggested that if India wanted to be the third largest economy by 2050, “it might just have to follow the Chinese mode of political system”.

Speaking in Mumbai at the 2nd annual Funds World India 2006 conference, he said, “For India, being democratic might not be the key to economic progress. An important dynamic for the next stage of economic development and globalisation for India would be to adopt another form of political system.”

O’Niell explained that in order to be the third largest economy (after the US and China) by 2050, India would need to make considerable labour reforms, and that would be difficult in the country’s current political scenario. He added, “Labour reforms is the need of the hour for India, and it might just have to take a leaf out of the Chinese political system.”

So how realistic is India’s BRICs dream? O’Niell said, “Though the lowest of BRICs on GES (growth environment scores), India has the potential to be fifty times bigger and thirty times wealthier by 2050. However, India needs clear and accountable macro policies, more openness to trade and FDI, and much broader quality education.”

O’Niell said, the future growth of the Indian economy would also be linked to its ever-increasing population. He stressed that it was here that India should cash in, and have more and more skilled labour.

“India’s work force will cross that of China’s, and there will be a rush for skilled labour. And with the present labour law high-handedness in India, the picture doesn’t look that convincing,” he said.

He also added that, to ensure conditions of growth, India should have sound and stable macro-economic policies, strong and stable political institutions, and a high level of education.

O’Niell’s research claims that by GDP 2010, India’s annual increase in demand could match that of the G-6 countries.

Source:http://www.financialexpress.com

2006-10-03T11:56:00.000-07:00

90% of Indian's want to be reborn in India...Aint that amazing...?

NEW DELHI: Given a choice, most Indians would like to be born as Indians again. In an exclusive poll by The Times of India, nearly 90% of people in five metros — Delhi, Mumbai, Kolkata, Bangalore and Hyderabad — opted to be Indians in a hypothetical next birth. The poll was conducted among those in the 18-35 age group, and their overwhelming preference for India was across religious and gender divides.

This is in sharp contrast to a recent online poll in China that asked the same question. According to the Guardian, 64% of the roughly 10,000 Chinese polled said they didn’t want to be reborn as Chinese — that is, before the authorities woke up to the ongoing poll and shut it down.

TOI’s poll, conducted by leading market research agency TNS, however, showed that despite Indians’ strong love for the country, their religious affiliations were very strong. Among those favouring rebirth as non-Indians, a majority (75%) wanted to follow their present religion. Mumbai was the only exception — a significant number (40%) in the city seeking rebirth as foreigners wished to be born into a different religion.

What’s the reason behind this strong love for India? ‘Unity in diversity’ was cited as reason No. 1, proving perhaps the power of cliches. More than a third said that’s why they wanted to be reborn as Indian. Now, here’s a spin — the one big reason why some didn’t want to be reborn as Indian was that the country was divided along caste, community, linguistic and regional lines. Diversity, as you can see, cuts both ways.

After 'unity in diversity' the second big reason for staying with India in the next life was the country’s 'rich spiritual heritage'. Among other reasons cited for sticking with India was its 'rapid economic progress', its ‘intellectual capabilities’ and its ‘great human resources’.

‘Unity in diversity’ was the clincher for 60% in Delhi, 42% in Hyderabad and 33% in Kolkata. The big reason
in Mumbai was, however, different: 40% said they would like to remain Indians in their next life because of its rapid economic progress.

The margin between the materialists and spiritualists didn’t seem very big in Mumbai — after economic progress the big reason in the city was India’s spiritual heritage with 30% citing that as a clincher for wishing to remain Indian, this life or the next. In Bangalore, too, India’s spiritual heritage was the clincher for 33%.

The belief that Indians have better intellectual capabilities was the main reason for 21% in Hyderabad and 23% in Kolkata.
Source:http://timesofindia.indiatimes.com

2006-10-02T14:49:00.000-07:00

India's Booming

Mumbai -The numbers appear to make for a happy tale: The Indian economy beat forecasts to record a GDP growth of 8.9% in the first quarter of 2006, propelled by growth in the manufacturing sector.

That’s a contrast with past years, when the services sector was the engine of the economy, making India synonymous with the concept of outsourcing and in the process creating a whole new class of professionals and entrepreneurs.

This time, from April through June, the manufacturing sector rose 11.3%, higher than a growth rate of 10.7% reported in the same period last year. But India’s key services recorded a growth of only 8.9%, compared with 8.8% in the last year. And some economists believe the government isn’t doing enough to move these numbers along.

Finance Minister P. Chidambaram announced that this was the highest first quarter growth recorded since 2000-01. “My expectation is we can continue to maintain a growth rate close to 8% every quarter provided we continue to follow prudent policies,” he told reporters soon after the numbers were released.

But economists say the government also needs to resolve nagging infrastructure issues and ensure that populist policies don’t hinder growth.

“In some sense, we should start getting used to these growth numbers coming out of India. This is the third or fourth year running that we’ll have about 8% growth,” says Surjit Bhalla, managing director of Oxus Research and Investments, an Indian economic research, asset management and emerging-markets advisory firm.

But Bhalla adds: “What has the government done to bring this about? The short answer is nothing, other than the central bank maintaining a competitive exchange rate. Though the good news is the capacity of the government to do damage is severely restricted, since the growth momentum is self-sustaining.”

The ruling Congress-led coalition in India is limited in its ability to reform because it needs the support of Communist parties to stay in power. Labor reforms are one area where the government hasn’t done too much to change strict policies that make it difficult to hire and fire based on market demand.

Equally worrying are India’s nagging problems with infrastructure and water, especially with Western companies opening more and more bases in the country.

“One downside [to the growth story] is infrastructure remaining a bottleneck,” says Nagesh Kumar, director general of RIS, an autonomous research body that was set up with financial support from the Indian government.

But Kumar is also quick to point out that with the manufacturing sector booming, India now has two engines of growth—services and manufacturing. And he too feels that the momentum in these sectors is self-sustaining.

Former federal minister and economist Dr. Yoginder Alagh says India’s growth in the coming years would be sustained by three factors.

“The major big-ticket reform is India’s move towards complete capital account convertibility,” says Alagh, adding: “Most of East Asia is very mercantilist on the exchange rate, but we are creating an environment where any foreign company can bring in any money and take it out almost at the click of a button.”

The other factor for growth is the central government’s control of its fiscal deficit, says Alagh, who also serves on the boards of leading Indian companies. And finally, there’s a turnaround in agriculture after about ten years.

Rebutting skepticism from some economists over how long India will be able to sustain this growth for, Alagh points out that both domestic demand and export growth are strong and will remain so for a while.

Like China did in the past, India will now ride through the slight slowing down of growth in other Organization for Economic Cooperation and Development countries, Alagh predicts.

And though the country’s booming growth rates are doing little to bridge the chasm between the rich and poor, the market optimism is evident on the streets of India’s metropolises. Top international brands are wooing consumers with increasingly large pockets, swank new shopping malls now dot city landscapes and India’s real estate market is reported to be growing at about 30% annually.

It now remains up to the government to keep inflation in check.

India’s central bank, the Reserve Bank of India, has its next review of interest rates on Oct. 31. It’s uncertain whether the bank will again raise the key short-term interest rate. It has already raised the rate three times this year to check inflationary pressures.

Source:http://www.forbes.com

2006-10-02T14:06:00.000-07:00

Why Indians are US's best immigrant group

They have funny accents, occasionally dress in strange outfits, and some wear turbans and grow beards, yet Indians have been able to overcome stereotypes to become the U.S.'s most successful immigrant group.

Not only are they leaving their mark in the field of technology, but also in real estate, journalism, literature, and entertainment. They run some of the most successful small businesses and lead a few of the largest corporations. Valuable lessons can be learned from their various successes.

According to the 2000 Census, the median household income of Indians was $70,708 -- far above the national median of $50,046.

An Asian-American hospitality industry advocacy group says that Indians own 50% of all economy lodging and 37% of all hotels in the U.S. AnnaLee Saxenian, a dean and professor at University of California, Berkeley, estimates that in the late 1990s, close to 10% of technology startups in Silicon Valley were headed by Indians.

You'll find Indian physicians working in almost every hospital as well as running small-town practices. Indian journalists hold senior positions at major publications, and Indian faculty have gained senior appointments at most universities. Last month, Indra Nooyi, an Indian woman, was named CEO of PepsiCo.

A modest explanation

Census data show that 81.8% of Indian immigrants arrived in the U.S. after 1980. They received no special treatment or support and faced the same discrimination and hardship that any immigrant group does. Yet, they learned to thrive in American society. Why are Indians such a model immigrant group?

In the absence of scientific research, I'll present my own reasons for why this group has achieved so much. As an Indian immigrant myself, I have had the chance to live the American dream. I started two successful technology companies and served on the boards of several others. To give back, I co-founded the Carolinas chapter of a networking group called The Indus Entrepreneurs and mentored dozens of entrepreneurs.

Last year, I joined Duke University as an executive-in-residence to share my business experience with students and research how the U.S. can maintain its global competitive advantage.

1. Education. The Census Bureau says that 63.9% of Indians over 25 hold at least a bachelor's degree, compared with the national average of 24.4%. Media reports routinely profile graduates from one Indian college -- the Indian Institute of Technology (IIT).

This is a great school, but most successful Indians I know aren't IIT graduates. Neither are the doctors, journalists, motel owners, or the majority of technology executives. Their education comes from a broad range of colleges in India and the U.S. They believe that education is the best way to rise above poverty and hardship.

2. Upbringing. For my generation, what was most socially acceptable was to become a doctor, engineer, or businessperson. Therefore, the emphasis was on either learning science or math or becoming an entrepreneur.

3. Hard work. With India's competitive and rote-based education system, children are forced to spend the majority of their time on their schooling. For better or for worse, it's work, work, and more work for anyone with access to education.

4. Determination to overcome obstacles. In a land of over a billion people with a corrupt government, weak infrastructure, and limited opportunities, it takes a lot to simply survive, let alone get ahead.

Indians learn to be resilient, battle endless obstacles, and make the most of what they have. In India, you're on your own and learn to work around the problems that the state and society create for you.

5. Entrepreneurial spirit. As corporate strategist C K Prahalad notes in his interview with BusinessWeek's Pete Engardio, amidst the poverty, hustle, and bustle of overcrowded India is a "beehive of entrepreneurialism and creativity." After observing street markets, Prahalad says that "every individual is engaged in a business of some kind -- whether it is selling single cloves of garlic, squeezing sugar cane juice for pennies a glass, or hauling TVs." This entrepreneurial sprit is something that most Indians grow up with.

6. Recognizing diversity. Indians hold many ethnic, racial, gender, and caste biases. But to succeed, they learn to overlook or adapt these biases when necessary. There are six major religions in India, and the Indian constitution recognizes 22 regional languages. Every region in the country has its own customs and character.

7. Humility. Talk to almost any immigrant, regardless of origin, and he will share stories about leaving social status behind in his home country and working his way up from the bottom of the ladder in his adopted land. It's a humbling process, but humility is an asset in entrepreneurship. You learn many valuable lessons when you start from scratch and work your way to success.

8. Family support/values. In the absence of a social safety net, the family takes on a very important role in Indian culture. Family members provide all kinds of support and guidance to those in need.

9. Financial management. Indians generally pride themselves on being fiscally conservative. Their businesses usually watch every penny and spend within their means.

10. Forming and leveraging networks. Indians immigrants found that one of the secrets to success was to learn from those who had paved the trails.

Some examples: Successful Indian technologists in Silicon Valley formed an organization called The Indus Entrepreneurs to mentor other entrepreneurs and provide a forum for networking. TiE is reputed to have helped launch hundreds of startups, some of which achieved billions in market capitalization. This was a group I turned to when I needed help.

Top Indian journalists and academics created the South Asian Journalists Association (SAJA) to provide networking and assistance to newcomers. SAJA runs journalism conferences and workshops, and provides scholarships to aspiring South-Asian student journalists.

In the entertainment industry, fledgling filmmakers formed the South Asian American Films and Arts Association (SAAFA). Their mission is the promotion of South Asian cinematic and artistic endeavors, and mentoring newcomers.

11. Giving back. The most successful entrepreneurs I know believe in giving back to the community and society that has given them so much opportunity. TiE founders invested great effort to ensure that their organization was open, inclusive, and integrated with mainstream American society. Their No. 1 rule was that their charter members would give without taking. SAJA officers work for top publications and universities, yet they volunteer their evenings and weekends to run an organization to assist newcomers.

12. Integration and acceptance. The Pew Global Attitudes Project, which conducts worldwide public opinion surveys, has shown that Indians predominantly hold favorable opinions of the U.S. When Indians immigrate to the U.S, they usually come to share the American dream and work hard to integrate.

Indians have achieved more overall business success in less time in the U.S. than any other recent immigrant group. They have shown what can be achieved by integrating themselves into U.S. society and taking advantage of all the opportunities the country offers.

Source: http://www.rediff.com

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