TEZPUR, Dec 24 – Hailing the Tezpur University (TU) as one of the important institutions of higher education in the country, its Chancellor and State Governor SC Mathur today said that the University has made rapid strides in terms of infrastructure in recent times with increased student and faculty strengths. Speaking on the occasion of the 8th convocation programme of the University, Mathur further said that the institute is also remarkable for its academic ambience, natural beauty and serene surroundings.
"Our universities need to blend academic excellence with social relevance. I am happy that Tezpur University has actively participated in extension work in partnership with the civil society, in disaster management and empowerment of women and disadvantaged groups. I also appreciate the efforts the University has made in strengthening the North East region's culture of tolerance and peace. The University's endeavour towards equal opportunities and affirmative action is laudable", he said.
Conferring diploma on 27 students, PhDs on 29 students and other degrees on the remaining students, the Chancellor further stated that the students have to dedicate themselves to the traditions of discipline, character-building and national integration. "The degrees that they have acquired are not only a licence for
employment, but also a testimony of their capacity to think independently and take initiatives in various fields of activity", he said. Referring to the importance of Nalanda and Taxila Universities, he said that they bear testimony to our country's rich and long tradition of teaching research and innovative knowledge.
'The challenge that we face now in 21st century is how to transform our society into a knowledge economy. Human resources are our greatest strength. Once our young women and men become adequately skilled, they will be India's greatest force for progress. Rather than just military strength, this soft power will be the true indicator of India's greatness', he said.
Delivering the welcome address, Vice-Chancellor Prof. Dr Mihir Kanti Chowdhury highlighted the complete infrastructure of the University and stated that the institute, established in 1994 as a residential University, currently has 15 departments under 5 schools and offers undergraduate and research programme.
Earlier, Mathur inaugurated the newly constructed Kalaguru Bishnu Prashad Rabha Memorial Auditorium.
Sunday, December 28, 2008
Thursday, December 18, 2008
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Friday, December 5, 2008
section "49-O" that a person can go to the polling booth,
Did you know that there is a system in our constitution, as per the 1969 act, in section "49-O" that a person can go to the polling booth, confirm his identity, get his finger marked and convey the presiding election officer that he doesn't want to vote anyone!
Yes such a feature is available, but obviously these seemingly notorious leaders have never disclosed it. This is called "49-O".
Why should you go and say "I VOTE NOBODY"... because, in a ward, if a candidate wins, say by 123 votes, and that particular ward has received "49-O" votes more than 123, then that polling will be cancelled and will have to be re-polled. Not only that, but the candidature of the contestants will be removed and they cannot contest the re-polling, since people had already expressed their decision on them. This would bring fear into parties and hence look for genuine candidates for their parties for election. This would change the way, of our whole political system... it is seemingly surprising why the election commission has not revealed such a feature to the public....
Please spread this news to as many as you know... Seems to be a wonderful weapon against corrupt parties in India... show your power, expressing your desire not to vote for anybody, is even more powerful than voting... so don't miss your chance. So either vote, or vote not to vote (vote 49-O) and pass this info on...
"Please forward this mail to as many as possible, so that we, the people of India , can really use this power to save our nation". Use your voting right for a better INDIA.
Wednesday, November 26, 2008
Why Islamic Banking for Indian Economy?
By Syed Zahid Ahmad
Since Islamic banking focuses on equity deposits and finance, it is expected that Stock market will be the most preferred avenue for investments by future Islamic banks of India because currently it is our stock market which is attracting new investments under Shariah Finance schemes. With advanced art of technology for investment with liquidity and profitability, it is expected that majority of deposits with Islamic banks in India will be preferably canalised to stock market. It would be the safest and fasted mode of deploying equity funds. Thus Islamic Banks may add additional 6 million new D mat accounts with expected capital gain of Rs. 60,000 crores from domestic market and around 1 trillion US $ through Islamic Banks managed by foreign bankers in India.
With suppressed desire by Indian Muslims to have Islamic Banking in India, and avoidance to cite taboo word 'Islamic Banking' by Raghuram Rajan Committee report on financial sector reforms, it has became more important that besides considering the religious, social, political and diplomatic dimensions, we must understand the economics of Islamic banking for Indian economy. Hope India will not miss the Islamic banking as its missed Globalization bus in the eighties and Asian Tigers including China superseded it. Recently Zee news, Financial Express and the Statesman dailies have projected high potentials for Islamic banking in India. Before it become a political agenda during coming elections, it is better to evaluate economics of Islamic Banking. After all the political parties need economic rationality to convince majority of voters that Islamic Banking is not being allowed to please Muslim voters but to genuinely boost faster and inclusive growth for Indian economy.
Silver Lining for Islamic Banking in India:
A few companies are already dealing big businesses in Shariah Investments funds. Many financial sector players eying upon trillion dollars Islamic investment funds. Eastwind launched Islamic Index; and Reliance Money and Religare have launched Shariah Complaint Portfolio Management Services. As a result Indian Stock market is observing some better trends in Shariah complaint stocks. With increased market of Shariah investments world wide, if China is going for Islamic banking to attract Islamic Investment Funds, why should India hesitate allowing Islamic banking with 150 millions Muslim who may help us pool around one trillion dollars Islamic investment funds from Gulf countries that too on equity base which may keep our national current account and fiscal deficit under control? The experience of Islamic banks of Malaysia and Britain may be interesting; as in Malaysia, the Chinese businessmen are the biggest customers of Islamic banking, in Britain also, Islamic banks are not for Muslims alone. Similarly Islamic Bank in India will not stand for Muslims alone but for all Indians.
Formal Sector Economic Agents
Under Islamic banking the formal sector economic agents like corporate firms listed with stock markets would be the first likely beneficiary of Islamic banking because their shares would be subscribed through investors at Islamic banks. All the companies listed in stock markets will have additional potential subscribers to genuinely subscribe their shares instead of mere trading stocks to gain for speculation.
Islamic Banking and Public Finance:
Islamic banking may further help us mobilize capitals on equity base to meet the investment needs for irrigation, dams, roads, electricity, and communication projects along with other infrastructure where public finance is insufficient and debt finance may be cause deficit to the government. With Islamic banking raising equity funds would be easier for banks. We must not forget that over 50% of our rain fed lands need irrigation which need equity finance to reduce the credit costs. The total investment in infrastructure, in 2006–07 was estimated to be around 5% of GDP. It has to be 9% of GDP by 2011-12, it means that we would require Rs. 2,07,291 crores in 2006-07 and Rs. 5,74,096 crores by 2011-12 to finance our infrastructure. The total investment amounts to Rs 20,56,150 crore for the 11th five year plan. Of which Rs. 14,36,559 crores is supposed to be met from Public Investment wile Rs. 6,19,591 from private investments. Islamic banking through promoting equity finance from national and international markets may reduce this burden effectively with keeping public finance well under control and probably we may need not to worry about fiscal deficit as well.
Since Islamic banks may also have managerial control over commercial financing, government might use banking units as source to mobilize taxes as well which might reduce mobilization costs for public revenue and increase margins for governments.
Islamic Banking and Indian Economy:
Viewing the probable multi dimensional positive impacts of Islamic banking on Indian economy, there are many reasons to smile for Islamic banking in India. It is helping our financial sector maintaining stability while helping real economic sector attain inclusive growth. The public finance would be much benefited through Islamic banking by generating investment funds on equity basis. Thus Islamic banking should be considered as a core economic need of the economy instead of viewing it as a religious matter for Indian Muslims. By any projections, it is expected that Islamic banking may help us mobilize business up to 5% our GDP with making due corrections in financial and real markets. Therefore it should be considered as a genuine economic need of the nation instead of considering it as religious, social or political issue. Hope all patriot Indians will flag green signal to Islamic banking as it is opening the doors towards faster and more inclusive growth – An approach to 11th five year plan of India.
No visualization document for Islamic banking in India:
So far Islamic banking has been considered as a religious matter for Indian Muslims and thus it was denied with a fear of financial segregation, a threat of parallel banking system along with a hidden fear for SCBs to loose Muslim depositors. There has never been any public committee analyzing the impact of Islamic banking in India because Muslims of India were never so evocative about features of Islamic banking in India; while the other community had no background to conceive this concept to required level for projecting its utility for Indian economy. Though the concept of Islamic banking is driven by ethics of Islam, it has more economic rationality compared to its religious vigour which needs some genuine study by professionals having basic knowledge of Islamic banking with expertise on Indian economy because Islamic banking carries more advantageous features to boost real sector economy compared to financial sector.
Future leaders of Islamic banking in India:
There might be a prejudice among top bankers that since Islamic banking originates from Islam, Muslims might take a lead in Islamic banking and their supremacy in banking sector may not be sure after Islamic banking. However the reality may be far different from the fiction. Indian Muslims are hardly capable to hold major shares of Islamic banking business in India as they lack required infrastructure, financial depth, banking creditability to attract the general depositors and investors under Islamic Banking. Islamic banking is not a children's game. It requires even better professional expertise compared to conventional banking because it deals more with commercial projects than mere monetary credit and debit transactions. Indian Muslims may feel privileged in terms of Islamic ethics required for Islamic banking but they certainly lack professional efficiency to manage modern commercial banking on Islamic ethics. Our leading nationalized bank (SBI) is somehow reaching to that expertise which may be required to manage a complex banking project such as Islamic banking, but they have to hire services of experts on 'Islamic Banking'. The RBI code of conduct to SCBs putting thrust on SMEs is reflecting the need of advanced commercial banking in India which would be focus under Islamic Banking. The performance by SBI has been best among nationalized banks to lend commercial credits. But still majority of unorganized sector workers who are non-bankable due to collateral problems are actually needing equity finance instead of debt finance. All the difference among nationalized bank's operation and Islamic banking is the mechanism of credit and deposits. Under Islamic banking mechanism thrust would be on equity deposits and credits while interest charged would be replaced by profit margins on commercial credits and interest expended over deposits would be replaced by dividend on equity finance with deposits mobilized as equity deposits by banks.
It is expected that with introduction of Islamic banking in India, the first choice of depositors and investors would be nationalized banks as despite contradiction of interest, Indian Muslims have a confidence in nationalized banks. To ensure security of deposits majority of Muslims depositors would prefer to join Islamic banking managed by nationalized banks. However it is expected that Foreign Investors looking to invest in India through Islamic banking, would prefer to have services of foreign banks. As far Indian Muslims are concerned, they have to make hard efforts to find their place in managing Islamic banking in India because they lack required financial depth; infrastructure and more importantly they have poor credibility among the depositors and investors due to some past failures of financial institutions.
Islamic Banking for Inclusive Growth:
Besides religious, social, political and diplomatic reforms, Islamic banking is more desired for Inclusive growth of India. It is interesting to evaluate probable impact of Islamic banking in different segments of Indian economy. Islamic Banking is the only mechanism which seems capable to tame the liquidity and inflation problems along with allowing inclusive growth. The increased percentage share in GDP by agriculture or manufacturing industry, or per capita income growth is just not indicative of true inclusive growth. For real inclusive growth, we have to ensure increase in income and employment status of workers in all segments. Empirical evidences reveals that though India has registered better growth rate in recent years, the number of poor living below poverty line has increased. Our household consumption which has declined in recent years is driven by household income; while corporate savings reflects income of corporate sector which has increased. In fact with better GDP growth rate in recent years, our corporate sector has snatched the fruits of growth, while majority of work force have failed to enjoy the fruits of development.
Similarly the share of financial sector in GDP has increased in recent years. Since our SCBs extend debt finance, the credits extended by SCBs add interest as part of GDP cost which causes inflation. While under equity finance, credit cost being zero, the growth of credit share to GDP does not push cost of GDP, thus restricts inflation. Simultaneously the dividend shared by depositors on equity finance helps equitable distribution of income generated by financial sector. Thus instead of concentration of credit to corporate sector, the generated income is shared by household sector which increases level of consumption and pushes the economy on faster growth track. This basic difference between debt and equity credit needs attention of our financial sector regulators.
Their financial background (in lack of collaterals) of farmers and poor workers associated to unorganized sector manufacturing and retail industries do not encourage SCBs to extend more debt finances. With schemes of loan waiving, the debt market is more dried for SCBs in agriculture sector. Even the SHGs, JLG schemes of Micro Finance are failed to add livelihood stocks for poor and vulnerable. This low tendency of economic reforms by financial sector for majority of Indian workers is creating imbalance in growth trend. India's GDP is increasing with increase in number of poor living below poverty line. The fruits of growth are really not shared among Indian nationals, but among Indian sectors. This fact needs attention of policy makers and regulators to launch better financial instruments / banking mechanism to ensure worthiness of credit supply to the needy segment of our economy.
Insight on Islamic banking reveals its potential to build infrastructure for our agriculture sector where workers are incapable to add infrastructure due to poor financial risk capacity, thus suffers a lot in productivity and economies of scale. Islamic banking could also help our unorganized sector manufacturing and retail industries avail equity finance to arrange capital required to compete with formal sector industries. These financial needs could not be fulfilled without Islamic banking because the financial vulnerability and low financial risks capacity of workers requires equity finance instead of debt finance which is neither provided by SCBs nor by MFIs because all credits by SCBs and MFIs are interest bearing.
If Islamic Banking is allowed the inadequate labour capital ratio for informal sector workers associated with agriculture and manufacturing industries could be resolved through equity finance which might be a revolution is our agriculture and unorganized sector. With improved labour capital ratio, our poor and vulnerable workers associated with agriculture and unorganized sector might be able to compete with the formal sector workers with increased productivity. Thus Islamic Banking may financially empower over 90% Indian workers associated to agriculture and unorganized sector manufacturing and retail industries.
Islamic banking may induce our political leaders to substitute grants and subsidies with equity finance schemes through specialized financial institutions because equity finance allows access to credit without debts of borrowers. Equity Finance helps achieve self-reliability, required for growth, which never comes through grant and subsidies but with successful utilization of equity finance. The stabilization funds for poor farmers / artisans may be utilized to experiment such finance. Islamic banking may not be a religion based banking business, but it could well resolve our real economic problems.
Islamic Banking and Financial Inclusion:
Though we do not have any survey to compare community wise financial exclusion in India, the study of data available through Sachar Committee report reflects Muslims are most disadvantaged community in financial sector, and banking is inversely related to concentration of Muslim Population. Muslims have over 80% Muslims financial exclusion due to interest based deposit and credit schemes available with formal financial institutions and SCBs. Due to restriction on Islamic banking mechanism in India, financial sector was one of the most unfavourable sectors for Indian Muslims. This reflects participation of Muslim workers in RBI and SCBs as well because with population share of 13.47%, Muslims have 0.78% and 2.2% share in employment with RBI and SCBs. Similarly the participation of Muslims with specialized financial institutions and corporations like SIDBI, NABARD and NMDFC is miserable. Hard to believe that Institutions like National Minority Development and Finance Corporation (NMDFC) have no Muslim employee. This has excluded Indian Muslims from formal financial and banking sector in India and to get rid of interest with meeting the banking and financial needs, wherever Muslims are concentrated; they find practice interest free banking through societies and NBFCs. With inception of Islamic banking it is expected that Muslims will join Islamic banks which will remove their financial exclusion.
The Indian Muslims have a share of 7.4% in saving deposits while just get 4.7% of credit in terms of PSAs. If we consider this as a standard proportion in national aggregate deposits with and credits maintained by SCBs, Indian Muslims annually loose around Rs. 66,700 crores because Muslims have a credit deposit ratio of 47% against national average of 74%. It shows that Muslims of India loose around 27% of their deposits by not availing as credits. After Islamic banking this deficit may be removed to curb financial loss to Indian Muslims because with 31% Muslims living below poverty line and 40% Muslim workers as own account workers, the deficit of credit is like economic assassination of the community. Muslims avail just 4% and mere 0.48% credits from special financial institutions like NABARD and SIDBI respectively because there also the community has to indulge in interest which is strictly prohibited in Islam.
The schemes launched by RBI, NABARD, SIDBI and Ministry of Finance for financial inclusion focus on providing access to credit and other financial products. As allowing access to Mutton shops for non vegetarians cannot yield inclusion of non vegetarians to mutton retails, interest based banking system will not help attaining target of financial inclusion for Indian Muslims, because interest is so strictly prohibited for Muslims that it is more acute than prohibition of muttons for vegetarians. The operation of Islamic banking will allow the Muslims to work with majority community in banking sector and it would definitely help us build civil society economy.
Introduction of Islamic banking in India may please 150 millions Indian Muslims, the second largest community of India who are somehow uncomfortable with use of word Islamic terrorism. Moreover with introduction of Islamic banking, Indian government will certainly gain diplomatic advantages to make financial dealings with Muslim dominated nations especially to attract trillion dollars of equity finance from gulf countries. This is more important after Lehman fall because it reflects US crisis and need of alternative sources for FDI required for Indian Economy. After US, Gulf Market could only be targeted (through Islamic banking) because other countries like China are not exporting financial resources.
Business of nationalized banks would be increased:
So Indian Muslims are looking for Interest free banking to avail much needed credits for development which is possible through introduction of Islamic Banking in India. This may add at least approximately 60 millions Muslims to formal financial sector. Through this financial inclusion of Indian Muslims to formal sector Islamic Banks, it is expected that Indian nationalized banks may see additional savings worth 1,00,000 crores and credit worth over Rs. 2,00,000 crores which may help banks to gain higher rate of profits compared to their SLR. After successful operation of Islamic banks by our nationalized banks, private banks may also enter into dealing with Islamic banking
Since Islamic banking focuses on equity deposits and finance, it is expected that Stock market will be the most preferred avenue for investments by future Islamic banks of India because currently it is our stock market which is attracting new investments under Shariah Finance schemes. With advanced art of technology for investment with liquidity and profitability, it is expected that majority of deposits with Islamic banks in India will be preferably canalised to stock market. It would be the safest and fasted mode of deploying equity funds. Thus Islamic Banks may add additional 6 million new D mat accounts with expected capital gain of Rs. 60,000 crores from domestic market and around 1 trillion US $ through Islamic Banks managed by foreign bankers in India.
Tuesday, November 25, 2008
Nandan Nilekani confident of changing India with ideas
New Delhi (IANS): Can ideas change a nation? Co-founder of Indian software giant Infosys and author Nandan Nilekani believes that they can, even if it takes a long time for them to become embedded in the collective psyche of the country.
"The process of change has to start somewhere. Rome was not built in a day. People will have to make it happen. They can start building on the broad based concepts of democracy, information technology, population or demography, globalisation, English and ideas. No country in the world has all these six things together. It is unique to India," Nilekani told IANS in an interview.
He was in the national capital on Monday for the launch of his book "Imagining India: Ideas for the New Century," which has been published by Penguin India. The book is the first in the series of Penguin's "Allen Lane - The Imprint of Ideas". The imprint, launched in 1967, is named after the founder of the publishing house.
"Imagining India" probes India's growth story over the last 60 years, examines the central ideas that have shaped modern India and offers perspectives on the past, present and the future.
Nilekani writes about how India's early socialist policies, despite the good intentions and idealism, stifled growth and weakened democracy.
The book analyses how the country's overwhelmingly young population has now become its greatest strength - and how IT is refashioning not just India's businesses, but also its governance and everyday life.
Nilekani does not stop at listing the ongoing processes of change, but plunges deeper into the heart of Indian real polity to debate about caste, politics, labour reforms, infrastructure, environment, markets and higher education.
"It is all about ideas. Ideas happen not because of diktats, but because society starts believing that the ideas are the best for them".
"For instance, the idea of English in India began as a language of outsourcing by the British - forging a collective linguistic unity. But post-Independence, it became the language of imperialism. The same language, however, came back in the globalised era as the language of outsourcing," Nilekani explained.
Sunday, November 16, 2008
India Inc sees a silver lining in cloudy skies, waits for rebound
INDIAN IT industry will see growth slowdown this year, but companies feel they will be in a position to take advantage of the next growth cycle, said industry leaders on Sunday.
Speaking at the India Economic Summit, organised by the World Economic Forum and the Confederation of Indian Industry (CII), Infosys Technologies executive cochairman Nandan Nilekani said the growth witnessed by the IT sector in the last 4-5 years won't be replicated this fiscal, owing to the current economic slowdown. Infosys, which recently revised its full-year guidance downwards, would go ahead with its planned recruitments, he added. The country's second-largest tech firm plans to hire 25,000 people this fiscal.
"There's a global scenario which is unprecedented and it'll have an impact on everybody. But time and again, the industry has demonstrated that it's resilient enough to deal with the harsh challenges," said Mr Nilekani. Referring to the 2001 dot-com bust, Mr Nilekani said that the current economic situation is not as profound. "At that time, we not only got out of the situation but took various learnings from it. As of now, the companies are just waiting for the downturn to subside and are getting ready to take advantage of the next growth cycle," he said.
Satyam chairman Ramalinga Raju said the ramifications of the economic crisis were not fully understood yet governments across the world are pro-actively taking measures to control it. "I don't think everything is understood yet about the crisis. I think the significant moves by various governments in a concerted way will have a positive effect. If the economic outlook improves, sentiments would also improve across industries. So far, our assessment of what we may expect from the year has not changed," he said.
Satyam revised its dollar guidance for the year downwards last month on account of rupee depreciation and volume reduction. It expects FY09 revenues to be about $2.55-2.59 billion against a previous guidance of $2.65-2.69 billion. Indian IT association Nasscom, which had given a guidance of 21-24% growth for the current fiscal, would soon review the forecast. A downward revision is considered likely.
Mr Nilekani, whose book Imagining India: Ideas for the new economy would be launched soon, said that the current crisis has shown that there needs to be a focus on basics. "We should learn from the mistakes that developed nations such as the US, Europe and Japan have made and see how technology can be used for transformation. There's a need to look beyond the divides of caste, creed and religion, and emerge as an integrated nation," he added.
Infy offers sabbatical
to 50 employees
NEW DELHI: Infosys CEO S 'Kris'- Gopalakrishnan on Sunday said the company has offered a one-year sabbatical to up to 50 employees in a year to work with NGOs. The company's total employee strength is over 1,00,000 and only 0.05% of its workforce will be able to avail this scheme annually. "Up to 50 people in the company can take the sabbatical in one year. We did this six months ago. It wasn't introduced now but it got linked (to the slowdown). It's not our way of managing utilisation," Mr Gopalakrishnan said. A few days ago, a business daily had reported that the country's second-largest IT services firm had been encouraging it staff to take a sabbatical. Those on sabbatical will get 50% of their salary, while drawing some amount from the NGO as well.
Speaking at the India Economic Summit, organised by the World Economic Forum and the Confederation of Indian Industry (CII), Infosys Technologies executive cochairman Nandan Nilekani said the growth witnessed by the IT sector in the last 4-5 years won't be replicated this fiscal, owing to the current economic slowdown. Infosys, which recently revised its full-year guidance downwards, would go ahead with its planned recruitments, he added. The country's second-largest tech firm plans to hire 25,000 people this fiscal.
"There's a global scenario which is unprecedented and it'll have an impact on everybody. But time and again, the industry has demonstrated that it's resilient enough to deal with the harsh challenges," said Mr Nilekani. Referring to the 2001 dot-com bust, Mr Nilekani said that the current economic situation is not as profound. "At that time, we not only got out of the situation but took various learnings from it. As of now, the companies are just waiting for the downturn to subside and are getting ready to take advantage of the next growth cycle," he said.
Satyam chairman Ramalinga Raju said the ramifications of the economic crisis were not fully understood yet governments across the world are pro-actively taking measures to control it. "I don't think everything is understood yet about the crisis. I think the significant moves by various governments in a concerted way will have a positive effect. If the economic outlook improves, sentiments would also improve across industries. So far, our assessment of what we may expect from the year has not changed," he said.
Satyam revised its dollar guidance for the year downwards last month on account of rupee depreciation and volume reduction. It expects FY09 revenues to be about $2.55-2.59 billion against a previous guidance of $2.65-2.69 billion. Indian IT association Nasscom, which had given a guidance of 21-24% growth for the current fiscal, would soon review the forecast. A downward revision is considered likely.
Mr Nilekani, whose book Imagining India: Ideas for the new economy would be launched soon, said that the current crisis has shown that there needs to be a focus on basics. "We should learn from the mistakes that developed nations such as the US, Europe and Japan have made and see how technology can be used for transformation. There's a need to look beyond the divides of caste, creed and religion, and emerge as an integrated nation," he added.
Infy offers sabbatical
to 50 employees
NEW DELHI: Infosys CEO S 'Kris'- Gopalakrishnan on Sunday said the company has offered a one-year sabbatical to up to 50 employees in a year to work with NGOs. The company's total employee strength is over 1,00,000 and only 0.05% of its workforce will be able to avail this scheme annually. "Up to 50 people in the company can take the sabbatical in one year. We did this six months ago. It wasn't introduced now but it got linked (to the slowdown). It's not our way of managing utilisation," Mr Gopalakrishnan said. A few days ago, a business daily had reported that the country's second-largest IT services firm had been encouraging it staff to take a sabbatical. Those on sabbatical will get 50% of their salary, while drawing some amount from the NGO as well.
Saturday, November 15, 2008
‘India’s equity market is on fire right now’
In an interview, Jeffrey Joerres, the chairman and chief executive officer of Manpower Inc, USA, outlines his views on India's future growth direction and the risks involved.
Given the current economic climate, where do you think are the opportunities with respect to India's future growth? Well, there are many opportunities. One of the most impressive things about India right now is that it is still in growth mode. When we look across the world, there are not many places that can claim the kind of GDP growth that is happening in India.
Where the real opportunities are is to keep that momentum going — whether continuing to bring in foreign direct investment or what the governments need to do. Also, the real opportunities are in making sure that the great brains and all that intelligence and some of those things that really define India are maintained within that environment of some great growth opportunities.
What do you think are the major global shifts which could present a risk to securing India's future growth?
There are some things that are really important to India's future growth. While there are some risks and clearly we are seeing some of them right now — some of the financial and liquidity risks and it seems as though India has been able to take care of much of that — what might not have been considered a risk three weeks ago, now looks like a risk. But having said that, there are still some regarding infrastructure and other things, as well as really being able to being able to take advantage of the opportunity that these are presented within these downturns
Also equity markets are equity markets. And the equity market in India is on fire right now. What can happen is that companies can equate their worth and expenses based on equity markets and most likely the equity markets, regardless of what the Indian government is going to do, can fizzle out a little based on what is happening in the world. This is clearly a risk for India.
Which industry sectors will shape India's future competitiveness?
India is really off to a great start when you look at industry sectors. What happens in many countries is that they don't have what is called in many circles as a clustre. When you look at IT and engineering and some of the infrastructural gains that have been made even in manufacturing, energy and telecom, all of these allow for India to clustre around some industries that have global importance.
So be it a domestic national issue to be able to solve or a global issue, India is very well positioned to take advantage of these because they have the university and educational systems and these clustres that have global interest which should drive them well into the future.
Courtesy: World Economic Forum press office
INDIA DECODED
'Create a broad route, not a narrow staircase'
Asha Rai & R Edwin Sudhir | TNN
Nandan Nilekani's eagerly anticipated 'Imagining India—Ideas for the New Century' was handled by New York literary agent Andrew 'The Jackal' Wylie. It was snapped up by Penguin India, with Nilekani receiving the biggest advance ever paid to a non-fiction writer in India. So what's all the fuss about? Nilekani tells us. Excerpts from an exclusive interview:
Q. Why a book on ideas? What makes you uniquely positioned to write on the subject? A. Several motivations. My job required me to meet a lot of people around the world. They would ask questions about India and its contradictions: 'How did you launch a space programme amid so much poverty? How can you have the IITs when there is so much illiteracy?' I didn't have answers to all that. So, I thought if I do this book, I will also get some clarity about what's going on.
Q. You say on the very first page that you are 'unelectable'. Was that a motivation?
A. That is correct, in a sense. I mean, what is my contribution to change? It can come only in the realm of ideas.
Q. How did you go about writing the book?
A. Though it seems a bit odd to say it, I thought of writing it like a software programme. When you write a large software application, you divide it into sections. Then you design the modules. I applied the same concept. I said, 'I have these 18 ideas', and I saw a pattern in the ideas in terms of the maturity in the Indian psyche.
Q. Why hasn't our politics embraced reforms more deeply and openly as you point out? A.Our reformers have been reticent because the connection between reforms and why they are good for the people has not been established. A lot of people continue to promulgate bad ideas. Half-reforms are worse than no reforms. In half-reforms, those who are better equipped to deal with opportunities take full advantage of them. The trick is to expand the opportunity for everyone. The whole idea is to create a broad route rather than a narrow staircase for people.
I mean, what is my contribution to change? It can come only in the realm of ideas
—Nandan Nilekani
—Nandan Nilekani
Obama appoints fourth Indian into his 15-member transition team
Indian-American management expert Anjan Mukherjee has been roped in by US President-elect Barack Obama into his transition team, the fourth person from the community to be part of the 15-member high-profile group.
Mukherjee, a Managing Director of Corporate Private Equity group at Blackstone, has been appointed as one of the team leads in Economics and International Trade.
His appointment has been the latest one as three other Indian-Americans - Sonal Shah, Preeta Bansal and Nicholas Rathod - have already been inducted into Obama's team.
Mukherjee has been involved in the execution of a number of investments in a wide range of industries.
He has received a BA from Harvard University where he graduated magna cum laude as a Harry S Truman Scholar and an MBA from Harvard Business school.
Before joining Blackstone, he worked with Thomas H Lee Company and Morgan Stanley & Co. He has also worked at the Department of Education (in the Fund for the Improvement of Postsecondary Education) as well as the Brookings Institution.
Obama is the first African-American to win the US presidential elections. He will take over as the 44th president of the US on January 20, 2009.
The Indian-American community overwhelmingly supported Obama in the November 4 elections and are said to have voted for him by more than a two to one margin.
© Copyright 2007 Hindustan Times
Wednesday, November 5, 2008
THE FUTURE OF BIOPHARMA IN INDIA IS BRIGHT’
ONE OF THE LEADERS IN THE BIOPHARMA WORLD, UCB IS DEEP INTO RESEARCH ON VERY CRITICAL HEALTH ISSUES. IN A CHAT WITH NARENDRA KAMATH, CHARLES-ANTOINE JANSSEN MANAGING DIRECTOR OF UCB GROUP IN INDIA UNDERLINES THE COMPANY'S OBJECTIVES AND GROWTH PLAN
ET: What initiatives are you working on to take the benefits of Biopharma to the people in this country?
CJ: UCB is working extensively on epilepsy di-stigmatisation with various NGOs and numerous doctors. We feel that benefits of modern epilepsy treatment is not reaching many patients due to wrong beliefs about this disease. We have also recently started assessing the needs of rural India and how we could make a difference in making more high quality drugs available to the most remote parts of India.
The pharma industry in India has not always been very environmentally friendly. In addition to new water purification systems in our Vapi factory, we are also proud to be the first pharma co in India to have off-set all our CO2 emissions. We are also contributing to the development and trying to make available to Indian patients, their families and doctors, highly effective and innovative medical solutions.
In January 2008, UCB opened a primary care healthcare center in Killai for patients affected by the Tsunami. UCB has committed to fund and supervise the management of this center for 5 years. We also donate our products on various occasions to parts of the countries that are in special need such as during the recent floods in Bihar.
What do you think is the future of Biopharma in India?
The future of biopharma in India is bright. We aim to combine the best Western science and Indian wisdom. First of all, there is a large talent pool of world-class doctors and scientists, some returning from Europe and the US. There are clear benefits for Western pharma cos and biotechs to do research, development, development services, manufacturing and admin work in India. Finally, as income levels rise, health infrastructure improves and heath insurance increases its penetration, the Indian pharma market will benefit
How has the journey been so far here? What obstacles, if any, have you faced in functioning in India?
The journey has been very rejoicing and interesting. Rejoicing to see so many colleagues work enthusiastically in building relationships with doctors and patients, in producing high quality medicines and in providing better and better solutions to our UCB colleagues in the West.
Despite numerous changes in UCB India's objectives and ways of working, we have faced a fairly limited number of obstacles. The main obstacle faced at first was maybe due to the excessive respect for their superior that many Indians seem to have. Often my colleagues understood the ground reality better than I did, but would not tell me I was wrong. Hopefully, these days are now far behind us as we work as a close knit team pursuing the realisation of UCB India's vision and mission.
Which are your most ambitious researches that are taking shape currently?
Because of its unique combination of research skills in short and long molecules i.e. chemical and biological compounds, UCB is designing new synergistic approaches to drug design and drug development. More and more of this is likely to take place in India in the future as we find partners who are willing to
work beside us for the long-term and share our patient-centric state of mind.
With the entire Biopharma sector in India expecting to clock a double digit growth, where do you see UCB group in the near future?
In 2008, we except UCB India to grow its topline at a double digit rate, most probably quite faster than the market average. In 2009, we plan to grow faster than in 2008, as a result of organic activities, new product launches and partnerships. We will contribute to the development and will make available to Indian patients and doctors highly effective and innovative medical solutions. We will nurture and expand our employees' competencies and help them to realize themselves.
What Obama's win means for India
NEW DELHI: With Democrat Barack Obama winning the White House, India is hopeful that its multi-faceted ties with the US, revolutionised by a landmark nuclear deal during the Bush tenure, will acquire new force.
"The real strategic partnership between India and the US will begin with a new government in Washington and New Delhi next year," Lalit Mansingh, former ambassador of India to the US said, soon after it became clear that Obama had rewritten American history by becoming the first African-American to win the White House.
Trade and investment, defence and agriculture - all those areas which were sidetracked by nuclear deal would now come to the fore, said Mansingh.
"Indians should celebrate change in the political structure of the US. Obama's presidency begins a new chapter in America's political history, a new chapter in America's engagement with the world and a great opportunity for India to combat terrorism in its region," said Chintamani Mahapatra, professor of American studies at Jawaharlal Nehru University.
"I visualise a very bright future for India-US relations. He would be the first Democratic president in the White House after Bill Clinton who began the path-breaking turnaround in India-US ties during his visit to India in 2000. He will build upon that legacy," Mahapatra said.
Less than a fortnight ago, the 47-year-old Obama had promised to make strong strategic partnership with India a "top priority" of his presidency and described New Delhi as "a natural strategic partner" for Washington in the 21st century. Obama, who liked to keep Mahatma Gandhi's portrait in his Senate office, is also known among Indian-Americans for his fondness for Indian dal.
Experts and diplomats see Obama's promise to restore America's moral standing in the world, especially in the Muslim world, that was damaged by military intervention in Iraq and his more nuanced policy on combating terrorism working to the advantage of India in the region. This will deflect some of the hostility the US attracts among India's 140 million Muslims.
"Bush was more muscular in his approach to what he called the Global War on Terror. Obama is likely to broaden the alliance against terror and use a combination of diplomacy and force that may be better suited for India's interests in the region," said Mahapatra.
Agreed Mansingh, "Obama believes in exercising smart power. Obama will be less inclined to use military force."
The 94-page Democratic Party document entitled "Renewing America's Promise" adopted at its convention in Denver eschews using the phrase "Global War on Terror" and focuses on ending the war in Iraq, stablising Afghanistan and "combating violent extremism".
Obama has, in fact, accused Pakistan of misusing funds for the war against terror and allegedly using it to fund militancy against India - remarks which were hailed in India's diplomatic and strategic circles.
With the global financial crisis affecting emerging economies like India, Obama's advocacy of a stricter oversight on the financial institutions and greater state interventionism also inspires greater confidence in this country, said Mahapatra.
Not all are so enthusiastic about the Obama presidency in India though. The diplomatic establishment and strategic circles are treading cautiously, especially after Obama's recent remarks on Kashmir, which they see as a throwback to American postures 10 years ago.
In an interview last week, Obama had said: "We should probably try to facilitate a better understanding between Pakistan and India and try to resolve the Kashmir crisis so that they can stay focused not on India, but on the situation with those militants."
"It is ill-advised and outdated and reflects his advisers have not kept up with the times," said Arundhati Ghose, a former Indian diplomat who represented India in the UN, while advising a wait and watch policy towards the Obama administration.
K. Subrahmanyam, however, counseled that India should not overreact. "Obama is a flexible intellectual. Let's wait and watch".
Another issue that is causing concern in India is Obama's incentives to American companies who don't outsource jobs. "This is certainly going to affect us if Obama's policies turn protectionist. Given the financial meltdown, there is a greater likelihood of protectionism," Ghosh said.
Mansingh also sees a potential pitfall in Obama's strong views on non-proliferation and Comprehensive Test Ban Treaty (CTBT). "India will be under enormous pressure to sign the CTBT," pointed out Mansingh.
Ghose, however, thinks India need not worry much on this count as the nuclear deal has been sealed and New Delhi will not mind coming on board after the US and China does so.
"The real strategic partnership between India and the US will begin with a new government in Washington and New Delhi next year," Lalit Mansingh, former ambassador of India to the US said, soon after it became clear that Obama had rewritten American history by becoming the first African-American to win the White House.
Trade and investment, defence and agriculture - all those areas which were sidetracked by nuclear deal would now come to the fore, said Mansingh.
"Indians should celebrate change in the political structure of the US. Obama's presidency begins a new chapter in America's political history, a new chapter in America's engagement with the world and a great opportunity for India to combat terrorism in its region," said Chintamani Mahapatra, professor of American studies at Jawaharlal Nehru University.
"I visualise a very bright future for India-US relations. He would be the first Democratic president in the White House after Bill Clinton who began the path-breaking turnaround in India-US ties during his visit to India in 2000. He will build upon that legacy," Mahapatra said.
Less than a fortnight ago, the 47-year-old Obama had promised to make strong strategic partnership with India a "top priority" of his presidency and described New Delhi as "a natural strategic partner" for Washington in the 21st century. Obama, who liked to keep Mahatma Gandhi's portrait in his Senate office, is also known among Indian-Americans for his fondness for Indian dal.
Experts and diplomats see Obama's promise to restore America's moral standing in the world, especially in the Muslim world, that was damaged by military intervention in Iraq and his more nuanced policy on combating terrorism working to the advantage of India in the region. This will deflect some of the hostility the US attracts among India's 140 million Muslims.
"Bush was more muscular in his approach to what he called the Global War on Terror. Obama is likely to broaden the alliance against terror and use a combination of diplomacy and force that may be better suited for India's interests in the region," said Mahapatra.
Agreed Mansingh, "Obama believes in exercising smart power. Obama will be less inclined to use military force."
The 94-page Democratic Party document entitled "Renewing America's Promise" adopted at its convention in Denver eschews using the phrase "Global War on Terror" and focuses on ending the war in Iraq, stablising Afghanistan and "combating violent extremism".
Obama has, in fact, accused Pakistan of misusing funds for the war against terror and allegedly using it to fund militancy against India - remarks which were hailed in India's diplomatic and strategic circles.
With the global financial crisis affecting emerging economies like India, Obama's advocacy of a stricter oversight on the financial institutions and greater state interventionism also inspires greater confidence in this country, said Mahapatra.
Not all are so enthusiastic about the Obama presidency in India though. The diplomatic establishment and strategic circles are treading cautiously, especially after Obama's recent remarks on Kashmir, which they see as a throwback to American postures 10 years ago.
In an interview last week, Obama had said: "We should probably try to facilitate a better understanding between Pakistan and India and try to resolve the Kashmir crisis so that they can stay focused not on India, but on the situation with those militants."
"It is ill-advised and outdated and reflects his advisers have not kept up with the times," said Arundhati Ghose, a former Indian diplomat who represented India in the UN, while advising a wait and watch policy towards the Obama administration.
K. Subrahmanyam, however, counseled that India should not overreact. "Obama is a flexible intellectual. Let's wait and watch".
Another issue that is causing concern in India is Obama's incentives to American companies who don't outsource jobs. "This is certainly going to affect us if Obama's policies turn protectionist. Given the financial meltdown, there is a greater likelihood of protectionism," Ghosh said.
Mansingh also sees a potential pitfall in Obama's strong views on non-proliferation and Comprehensive Test Ban Treaty (CTBT). "India will be under enormous pressure to sign the CTBT," pointed out Mansingh.
Ghose, however, thinks India need not worry much on this count as the nuclear deal has been sealed and New Delhi will not mind coming on board after the US and China does so.
Sunday, November 2, 2008
Re:software - wide assortment
All Europe uses our software
the lowest prises Quality top-level.
- All programs for PC and Mac
- You can choose the programs in own language http://fortikadom.com
the lowest prises Quality top-level.
- All programs for PC and Mac
- You can choose the programs in own language http://fortikadom.com
Monday, October 27, 2008
A humble multibillionaire believes that setting a middle-class example will help India prosper
If you happen to be flying economy on one of India's wonderful, efficient new airlines, you might find yourself sitting next to a dignified gentleman with a trim mustache and swept-back snow-white hair. A university dean, you might think, or a high-court judge. In fact, this is Azim Premji, chairman of the IT outsourcing giant Wipro.
Premji is worth about $17 billion, making him India's fifth-richest man, so he doesn't need to fly coach. He does it to make a point. The point isn't that he's a man of the people. A soft-spoken, cerebral man of 63, he's far from folksy. The point is that Wipro, as Premji puts it, is "a middle-class company."
By that he means honest, hard-working, disciplined and modest—extravagant in nothing except its ambition to serve customers and become a better company. If that sounds a bit preachy, it's because Premji is on a mission: to turn Wipro, and by extension all of corporate India, into an ultralean competitor whose management practices are among the most advanced in the world.
The stereotypical emerging-economy billionaire is a bumptious wheeler-dealer who gets ahead by exploiting his government connections or his country's cheap labour. Premji shatters that mould. Methodical, precise, quietly driven, he is building a company that is as smart, professional and modern as any in the West—perhaps more so.
Wipro spends a lot of time talking and thinking about its values, and they are positively Presbyterian—if that's the right word for a company led by a Muslim in a majority Hindu country. Its executives only fly business class when travelling overseas. They stay in guest houses or budget hotels when possible. The company analyzed waste in its cafeteria and found that each employee threw away about 85 grams of food a day. So it published weekly data and cut food waste by 38%. It also metered water use and began recycling waste water, as well as collecting rainwater during India's monsoons..
The push for frugality started in the 1980s, when Wipro was trying to break into the global software game. After enduring the 20-hour trip from Bangalore to California's Silicon Valley in economy class, its engineers would often bunk three to a room, sharing food like college students.
Premji himself drives a four-year-old Toyota Corolla, a step up from the Ford Escort he owned for nine years. He lives in a modest bungalow bordering Wipro's headquarters campus. "I have a decent lifestyle and my family has a decent lifestyle. How much can you consume, really?" he said when I visited him in Bangalore last winter. When I reminded him that not all Indian tycoons feel that way—Mukesh Ambani, India's richest man, is building a 27-storey mansion for his family in Mumbai—he said, with evident disdain, "They're making fools of themselves doing this."
Wipro is no sweatshop. The headquarters campus is gorgeous, with airy, low-rise buildings spread over lawns and gardens. Fitness and yoga classes are held on site. The company hands out stock options and big raises to its top performers. Dedicated to constantly upgrading employees' skills, it spends top dollar to bring in trainers and management gurus.
But Premji's frugality has made a mark on the company's 95,000 employees. Everyone is cost-conscious. "Wipro shaves expenses in thousands of tiny ways, day in and day out," writes BusinessWeek reporter Steve Hamm in his book on Wipro, Bangalore Tiger.
Frugality goes hand in hand with integrity. When Premji took over the family business in 1966, it was a cooking oil company, Western India Vegetable Products, and he decided it would refuse to pay bribes. When his son joined Wipro last year, Premji made it clear that the young man would rise, or not, on merit alone.
The message to customers: This is a company you can trust. Premji says Wipro has climbed into the same league as global IT-services giants such as IBM and Accenture, "but it's more humble. We listen to our customers. We're not full of ourselves."
Wipro lays out its commitments to customers in detailed contracts on every job. Managers, employees and business units are all expected to set goals and track their work. Profits have doubled over the past three years.
All of this may sound uptight for a freewheeling place like India, but the country is changing fast. Premji is doing for management what the Japanese did in manufacturing in the 1960s and '70s—taking techniques pioneered in the West and making them better. And you'd better believe he's doing it on the cheap.
Wednesday, October 22, 2008
Towards a robust Indian financial sector
THE fundamental forces of economic and demographic evolution have placed the Indian financial sector at a very exciting stage of growth. The last decade-and-a-half has seen the transformation of the sector with high levels of technology, diversity and sophistication in products and services and improved efficiency. The financial sector is rapidly moving towards international benchmarks with increasing efficiency, transparency and dynamism. The broad-based reforms have made the sector competitive and have positioned it well to support sustained economic growth.
India's financial sector has mostly been insulated from the risks in the international markets mainly due to a strong regulatory framework. While we do have a largely free market-based banking system, India has ensured that its regulatory checks and balances prevent any undue exposure to global risk and the financial sector is prepared to cushion adverse situations. The regulatory requirement also ensures that there is adequate liquidity available at any point of time and the overall exposure to any particular asset class is limited. Indeed, there is perhaps no other country in the world where the regulatory requirement for risk-free investments are so high.
It is imperative to constantly work towards increasing the efficiency of our financial system. We must ensure that our financial markets are driven by market forces and competition in all aspects of their functioning — ownership, business activities, network building, lending norms and regulatory requirements. In addition, we must focus on the development of missing markets and increasing liquidity in existing ones to ensure the development of a sound financial system. For example, the corporate bond market in India needs to grow rapidly while markets for exchange-traded interest rate and foreign exchange derivatives contracts must be created. At the same time, we must also ensure a level playing field for financial institutions and remove any artificial advantage that a particular entity would have over another engaged in the same business. The financial system should be driven by competitive forces.
Along with the development of financial markets, there is also a need to continue improving the regulatory framework governing the system. In this regard, we must focus on creating a more streamlined regulatory architecture that reduces regulatory costs and overlaps and removes existing gaps. We must also encourage a move towards a principle-based regulation system involving less detailed prescription for market functioning and a greater reliance on practice and precedent than strict rulebook interpretation. Such a principle-based approach would avoid the centralised micro-management of day-to-day operations of enterprises, increasing their efficiency and encouraging greater innovations in financial firms operating in India.
Given the increased focus on ensuring continued reforms in the financial sector, we will soon see the emergence of a financial system comparable to the best in the world. Sustained growth has tremendous implications for the financial services sector and this sector is uniquely positioned to benefit from the growth cycle. On the one hand, consumers will continue to provide a rapidly growing market for a wide range of products and services thereby leading to a growing demand for competitive and sophisticated retail financial services. On the other, capacity expansion by manufacturing firms and infrastructure development will lead to greater demand for financial resources.
Going forward, the financial sector will play a key role in India's economic growth success. It will also play a major role in modernisation and growth of the rural economy. The penetration of financial services in India will deepen and become more widespread with the banking system growing in size to match those of the other developed economies. The trends of development and sophistication are already evident across the spectrum of financial services, including insurance and asset management and we are seeing a variety of new product offerings and innovative methods of distribution fostering robust growth in these areas. The number of people with access to formal sources of credit and the protection of life or health insurance will see an exponential increase and in the next few years, we must, therefore, focus on scaling up these markets resulting in greater penetration of financial services. The next decade promises to be a phase of exponential growth for financial services in India. It is on this basis that we will see the emergence of large Indian financial institutions on the global stage.
Also critical to the development of the financial sector is building up an adequate pool of talent with the skills suited to work in a developed financial services setup. We are today facing a situation where it is not employment generation which is a challenge, but finding the requisite numbers of people with the requisite skills to fill the jobs that are available or are being created every year. This is leading to a paradox of unemployment and poverty co-existing with skill shortage and wage inflation. This requires a reinvention of our traditional thought process with respect to education and employment. Instead of employers competing with each other and suffering escalating wage costs, we need to implement large-scale curriculum change in higher education institutions; implement accelerated vocational training to achieve quick employability among the unskilled population of working age; and thus quickly expand the pool of available manpower at all levels. Many such initiatives are already in place and we must now make concerted efforts to scale them up rapidly particularly with respect to financial education.
To sum up, we are passing through a turbulent phase in the global economy, the spill-off of which is being witnessed in India as well. While India can never be fully insulated from global happenings, it is more likely to be affected by sentiments rather than fundamentals given the way it has built its economy. The turbulence in the global market will once again test the economy's resilience as it had done during the currency crisis in south-east Asia, and provide the industry and policy makers with insights and lessons to build an even more robust framework for reforms. This will only make our financial system more inclusive, robust and efficient.
(The author is managing director & CEO, ICICI Bank)
India's financial sector has mostly been insulated from the risks in the international markets mainly due to a strong regulatory framework. While we do have a largely free market-based banking system, India has ensured that its regulatory checks and balances prevent any undue exposure to global risk and the financial sector is prepared to cushion adverse situations. The regulatory requirement also ensures that there is adequate liquidity available at any point of time and the overall exposure to any particular asset class is limited. Indeed, there is perhaps no other country in the world where the regulatory requirement for risk-free investments are so high.
It is imperative to constantly work towards increasing the efficiency of our financial system. We must ensure that our financial markets are driven by market forces and competition in all aspects of their functioning — ownership, business activities, network building, lending norms and regulatory requirements. In addition, we must focus on the development of missing markets and increasing liquidity in existing ones to ensure the development of a sound financial system. For example, the corporate bond market in India needs to grow rapidly while markets for exchange-traded interest rate and foreign exchange derivatives contracts must be created. At the same time, we must also ensure a level playing field for financial institutions and remove any artificial advantage that a particular entity would have over another engaged in the same business. The financial system should be driven by competitive forces.
Along with the development of financial markets, there is also a need to continue improving the regulatory framework governing the system. In this regard, we must focus on creating a more streamlined regulatory architecture that reduces regulatory costs and overlaps and removes existing gaps. We must also encourage a move towards a principle-based regulation system involving less detailed prescription for market functioning and a greater reliance on practice and precedent than strict rulebook interpretation. Such a principle-based approach would avoid the centralised micro-management of day-to-day operations of enterprises, increasing their efficiency and encouraging greater innovations in financial firms operating in India.
Given the increased focus on ensuring continued reforms in the financial sector, we will soon see the emergence of a financial system comparable to the best in the world. Sustained growth has tremendous implications for the financial services sector and this sector is uniquely positioned to benefit from the growth cycle. On the one hand, consumers will continue to provide a rapidly growing market for a wide range of products and services thereby leading to a growing demand for competitive and sophisticated retail financial services. On the other, capacity expansion by manufacturing firms and infrastructure development will lead to greater demand for financial resources.
Going forward, the financial sector will play a key role in India's economic growth success. It will also play a major role in modernisation and growth of the rural economy. The penetration of financial services in India will deepen and become more widespread with the banking system growing in size to match those of the other developed economies. The trends of development and sophistication are already evident across the spectrum of financial services, including insurance and asset management and we are seeing a variety of new product offerings and innovative methods of distribution fostering robust growth in these areas. The number of people with access to formal sources of credit and the protection of life or health insurance will see an exponential increase and in the next few years, we must, therefore, focus on scaling up these markets resulting in greater penetration of financial services. The next decade promises to be a phase of exponential growth for financial services in India. It is on this basis that we will see the emergence of large Indian financial institutions on the global stage.
Also critical to the development of the financial sector is building up an adequate pool of talent with the skills suited to work in a developed financial services setup. We are today facing a situation where it is not employment generation which is a challenge, but finding the requisite numbers of people with the requisite skills to fill the jobs that are available or are being created every year. This is leading to a paradox of unemployment and poverty co-existing with skill shortage and wage inflation. This requires a reinvention of our traditional thought process with respect to education and employment. Instead of employers competing with each other and suffering escalating wage costs, we need to implement large-scale curriculum change in higher education institutions; implement accelerated vocational training to achieve quick employability among the unskilled population of working age; and thus quickly expand the pool of available manpower at all levels. Many such initiatives are already in place and we must now make concerted efforts to scale them up rapidly particularly with respect to financial education.
To sum up, we are passing through a turbulent phase in the global economy, the spill-off of which is being witnessed in India as well. While India can never be fully insulated from global happenings, it is more likely to be affected by sentiments rather than fundamentals given the way it has built its economy. The turbulence in the global market will once again test the economy's resilience as it had done during the currency crisis in south-east Asia, and provide the industry and policy makers with insights and lessons to build an even more robust framework for reforms. This will only make our financial system more inclusive, robust and efficient.
(The author is managing director & CEO, ICICI Bank)
K V Kamath
Huge debt redemption pressure could leave rupee a lot weaker
Economists See Re Breaching 50-Mark As Redemptions Worth $89 Billion Loom
WITH the $89-billion worth redemptions of short-term debt between July 2008 and July 2009, the rupee could come under further pressure. Most economists have forecast that rupee is set to breach the Rs 50-mark soon.According to the latest data on the external debt released by the central bank, as on June 30, the redemption of debt maturing in less than a year touched $89 billion. This is equivalent to about 40% of the country's total debt of $221 billion as on that day. But next year, the figure is expected to be much lower at $16.5 billion. With more addition to the debt in the form of NRI deposit commercial borrowings and other short-term debt, the figure could be higher for next year. But with a slowdown in the debt pile-up in the recent past, the redemption pressure may not be as high.
Nevertheless, the redemption pressure will not only substantially deplete the stock of reserves, but also put a pressure on the rupee. "The balance of flows to and from India is clearly biased against the rupee and we see the distinct possibility of it breaching the Rs 50-mark in the next couple of months, if not days," says an HDFC Bank report released on Wednesday. By December, it could be in the range of Rs 52-53, the report has added.
YES Bank chief economist Shubhada Rao said, "Near-term pressures on the rupee remain unabated due to a lack of dollar supply in the market (only RBI is supplying), because of a demand from oil companies and other importers. But most importantly, the continuing strength of dollar versus major currencies. These factors could lead us to believe that the rupee could reach a level of 52.'' While Barclays and UBS have forecast the rupee to touch Rs 53 and Rs 50, respectively.
The report further goes on to add that deleveraging by global financial institutions is likely to continue. Frozen global credit markets have resulted in an acute dollar shortage. Therefore, most financial institutions are using emerging markets as a spigot of dollar liquidity to meet their capital and liquidity requirements.
In addition, further pressure on outflows because general elections are expected to take place in early 2009, the weak current account and deteriorating government finance could add further pressure on the rupee. The market expects the central bank to further adopt an accommodative stance.
"A more aggressive stance by the RBI in its policy review on Friday, like reduction in SLR and further reduction in CRR along with another repo rate cut and refinance to banks across sectors could help rein in the value of the rupee, according to J Moses Harding, head – global markets group, IndusInd Bank.
DOWN THE LANE
Cut in SLR & CRR, and another repo cut could help rein in Re's weakness This is equivalent to about 40% of the country's total debt of $221 billion The redemption pressure will not only deplete the stock of reserves, but also put pressure on the rupee Deleveraging by global financial institutions is likely to continue Frozen global credit markets have resulted in an acute dollar shortage
WiMAX Forum Highlights India as a Focal Point for WiMAX Growth
October 19th, 2008 by 
david 
Projects India WiMAX market potential including devices to be worth $13 billion by 2012 with a base of 27.5 million WiMAX users
WiMAX Forum Announces Plans for India-based Applications Lab at Indian Institute of Technology, Delhi, third in the world after Taiwan and US
The WiMAX Forum® today highlighted activity in the burgeoning Indian market to illustrate the power of WiMAX technology and its meaningful effect on emerging markets. The first commercial technology specifically optimized for mobile broadband, WiMAX provides a scalable, cost-effective solution that is the strongest candidate to provide high-speed broadband internet across India. Given its true broadband performance capabilities, early availability, cost advantages, government support and the upcoming auctions relating to the 2.3/2.5 GHz frequency bands, the WiMAX Forum projects the Indian WiMAX market including devices will be worth $13 billion in 2012. This market projection takes into account 27.5 million WiMAX users, or 19 million WiMAX subscribers in 2012.
WiMAX allows subscribers access to all applications available over wired connections with the added advantage of mobility and portability. With the current influx of WiMAX-enabled mobile devices into the market, an emergence of new applications especially suited for mobile access is expected. Robust QoS and low latency make WiMAX especially well suited for real-time applications like VoIP, content streaming, online gaming, and vertical applications such as those for safety and surveillance. Broadcast applications can also be supported through the Multicast Broadcast Service. Because the Indian telecom sector operates in a volume-driven market, India is not only positioned to spur one of the world's largest broadband wireless markets, but also to support an ancillary ecosystem that will generate further employment, enhance development in semi urban & rural areas and lead towards true sustainability.
WiMAX Forum forecasts that by 2012 the Indian market will support 27.5 million WiMAX users representing approximately 20% of the global WiMAX user base.
"In India, WiMAX represents a win-win proposition, benefiting both network operators and subscribers at the same time," explains CS Rao, Chairman, WiMAX Forum India chapter. "Broadband penetration being low, the opportunity for operators to gain large numbers of subscribers through WiMAX is incredible. Any service provider with innovative service offerings, attractive devices and go-to-market plans that maximize the utility offered by WiMAX technology to price-sensitive Indian customers can use this ready and proven technology to quickly gain market share."
At a recent global industry event, Ron Resnick, President and Chairman of the WiMAX Forum referenced India as a leading example of WiMAX technology's potential on the world stage.
Citing the recent decision by India's Department of Telecommunications to allocate and auction WiMAX spectrum to the 2.3 and 2.5 GHz frequency bands, Resnick excited the audience with India's goal of connecting over one billion new customers.
"India currently has only 4.5 million broadband users out of a population of 1.2 billion people. And with these recent regulatory decisions, India joins other major developed nations such as the US, Japan, Korea, Taiwan, and Russia in freeing up prime spectrum for mobile WiMAX deployments," said Mr, Resnick, President and Chairman of the WiMAX Forum. "With the expected demand for WiMAX-enabled devices brought on by India's planned WiMAX deployments, WiMAX Forum will add an Indian certification lab to its existing network in 2009 to stay ahead of the demand for products in this region. This will be very important to the device-hungry Indian market, which can look forward to connected laptops, USB dongles, ultra-mobile PC's (UMPCs), mobile handsets, and mobile Internet devices (MIDs)."
WiMAX Forum predicts that major rollouts of WiMAX technology in India will have a tremendous positive effect on the nation's economy. According the Indian government, the Indian economy is currently growing at 9% year over year; in particular there are an additional 8-10 million mobile phone subscribers every month. WiMAX Forum predicts that widespread access to broadband will greatly increase economic productivity by laying the groundwork for important initiatives, such as distance learning, telemedicine and e-government.
India-Based WiMAX Forum Applications Lab
WiMAX Forum also announced that it is in the early stages of planning a WiMAX Applications Lab at the Indian Institute of Technology Delhi. With successful applications labs already running in Taiwan and the US, this third lab is set to add even more diversity to the group of developers already in the WiMAX fold. IIT Delhi has a functioning WiMAX test bed and serves as an ideal location to host this lab. Created with the backing of the Indian industry and DoT, this lab will focus on enhancing WiMAX quality of experience and WiMAX community services for underserved areas. IIT Delhi already has active programs examining IT Community services, including telemedicine, distance learning and e-government. These applications are of particular interest to the Indian market, and will be explored more fully through the creation of this lab.
"WiMAX is a powerful technology that is available today to provide Indian-society centric applications like telemedicine, distance education, e-governance, etc. for urban, suburban, and rural development," added Resnick. "Imagine students from rural India taking classes from far away institutions in their homes, or sick farmers being diagnosed by top-notch physicians hundreds of miles away - these applications can all be powered by WiMAX, and we are building the capacity to research and develop them here in India."
The Robust WiMAX Ecosystem
The WiMAX Forum is made up of more than 530 member companies who are committed to the success of the WiMAX standard. WiMAX Forum membership consists of 144 ecosystem content developers, 162 service providers, 92 silicon component manufacturers and 131 system vendors.
Currently more than 35 WiMAX Forum member companies produce WiMAX base stations, 30 companies provide PC Cards, USB modems, MIDs, and other personal devices, 25 companies provide chipsets and reference designs, and seven of the top eight global device manufacturers are developing WiMAX products.
WiMAX Forum Certified Mobile WiMAX products in the 2.3 GHz and 2.5 GHz bands were released this year. By the end of the year WiMAX Forum expects to certify products within the 3.5 GHz band as well. The WiMAX Forum estimates that by 2011 there will be more than 1,000 Mobile WiMAX Certified products.
There are currently 407 deployments of WiMAX networks in more than 133 countries. The constant growth in number of WiMAX deployments across the world has led WiMAX Forum to release an interactive online mapping tool to aid people in understanding the breadth of the ecosystem. It can be found at www.wimaxmaps.org. The WiMAX Forum also expects to have a comprehensive global roaming plan available to operators in early 2009.
For more information on the WiMAX ecosystem, including the WiMAX Forum Subscriber and User Forecast, please visit the WiMAX Forum website at www.wimaxforum.org.
About WiMAX Forum®
The WiMAX Forum® is an industry-led, not-for-profit organization formed to certify and promote the compatibility and interoperability of broadband wireless products based upon the harmonized IEEE 802.16e/ETSI HiperMAN standard. A WiMAX Forum goal is to accelerate the introduction of these systems into the marketplace. WiMAX Forum Certified products are interoperable and support broadband fixed, nomadic, portable and mobile services. Along these lines, the WiMAX Forum works closely with service providers and regulators to ensure that WiMAX Forum Certified systems meet customer and government requirements. Through the WiMAX Forum Congress Events Series of global trade shows and events, the WiMAX Forum is committed to furthering education, training and collaboration to expand the reach of the WiMAX ecosystem. For more information, visit the trade show link at www.wimaxforum.org.
Sunday, October 19, 2008
India’s tech spending seen growing 17-24% by 2010
ASIAPacific's IT spending is expected to grow about 10-16% till 2010, beating developed markets, according to a study by consulting firm Zinnov. India and China, in particular, represent large untapped markets in the region.
While India's IT spending is likely to grow between 17.6-24% by 2010, China would grow 10-13%, according to the study. This is in comparison to the 3.3-6.5% increase expected in global IT spending. Expenditure on hardware, software and ITBPO services comes under IT spending.
"With the shrinking IT budgets of the developed world set to shrink further, IT services companies have been working on realigning growth strategies and looking at opportunities in countries such as India and China," said Zinnov advisory services engagement manager Chandramouli CS.
India's IT spending currently totals $17 billion, while China's IT spending stands at about $21 billion.
Zinnov says North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010.
Mr Chandramouli says companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don't have scalable IT systems.
The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan.
These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015.
deepshikha.monga@timesgroup.com
While India's IT spending is likely to grow between 17.6-24% by 2010, China would grow 10-13%, according to the study. This is in comparison to the 3.3-6.5% increase expected in global IT spending. Expenditure on hardware, software and ITBPO services comes under IT spending.
"With the shrinking IT budgets of the developed world set to shrink further, IT services companies have been working on realigning growth strategies and looking at opportunities in countries such as India and China," said Zinnov advisory services engagement manager Chandramouli CS.
India's IT spending currently totals $17 billion, while China's IT spending stands at about $21 billion.
Zinnov says North America would see its IT spending grow about 5% and Europe, 4-5%. Spends in the US would move in the range 2.5-6%, reflecting a dip in the nearer future and then picking up towards 2010.
Mr Chandramouli says companies in emerging markets, which are in their growth phase, have a greater requirement for building IT infrastructure. A recent CIO survey in India showed that most domestic companies don't have scalable IT systems.
The opportunity in India and China is also highlighted by the large presence of small and medium businesses (SMBs) in these emerging markets. According to IDC, about 23.4 million SMBs – nearly one-third of the global total – are located in Asia-Pacific, excluding Japan.
These also represent an untapped market with a large potential. For instance, the SMB share of IT spending in India is forecast to grow from 38% per cent currently to over 50% by 2015.
deepshikha.monga@timesgroup.com
India may become outsourcing hub for e-waste management
WASTE it. That's what e-waste management companies are urging people to do. As long as consumers discard electronic waste, this is one sector that will not face the heat of the economic slowdown, believe experts.
Consider the figures — there are 58 million television units in India currently that will reach 234 million by 2015. By the end of 2010 there will be around 75 million computers in India from 15 million now since the life cycle of a PC has come down to 3-4 years from 7-8 years a few years back, and the segment is suffering from an extremely high obsolescence rate of 30% per year.
Similarly, the Indian mobile handset market is set to zoom across the 100 million mark soon. E-waste management firms claim that now it is possible to recycle around 98% of a cellphone. At the same time, memory devices, MP3 players and iPods are the new additions to ewaste production. But that's just the tip of the iceberg. Nitin Gupta, CEO of Attero Recycling, a Noida-based start up in the business of e-waste management that recently attracted $6.3 million in funding from venture capital firms NEAIndoUS Ventures and Draper Fisher Jurvetson, says, "We are looking at the possibility of India becoming the outsourcing hub for e-waste management. It has a huge potential, as the electronics industry is growing very fast across the globe and people have started addressing the issue of properly recycling e-waste."
And it is time that they did. Globally, electronics is the largest and fastest growing manufacturing industry, having surpassed one trillion US dollars. And ewaste management firms such as, Attero have a lot to look forward to, since it takes only $2 to recycle a single PC in India compared to $20 in US.
At present, there are almost two million old PCs ready for disposal in India, according to industry estimates. And preliminary data suggests that the total Waste Electrical and Electronic Equipment (WEEE) generation in India is approximately a mammoth 146000 tonnes per year. M K Soni, CMD of Infotreck Syscom, a Mumbai-based e-waste management and recycling company, feels that India certainly has the potential. Mr Soni says, "There is a huge margin for Indian companies to fill the gap between the number of existing firms and the number of companies needed to recycle the amount of e-waste produced globally. This is one sector that w
ill not face the heat of economic slowdown. Even if there is a global meltdown, people still need to communicate and that means business for companies like us." The main source for e-waste remains imports, government, public and private sector discards, PC retailers, manufacturers, secondary market of old PCs and individual households. Around 30,000 computers become obsolete every year from the IT industry in Bangalore alone.
Three categories of WEEE account for almost 90% of the generation: large household appliances: 42.1%, information and communications: 33.9% and consumer electronics: 13.7%. Developed nations dump an estimated 500 million tonnes of e-waste yearly in emerging countries. Of this almost 70% of the waste ends up in China, making it the world's largest dumping ground for e-waste. In India, e- waste is mainly collected by recyclers abroad and sold to waste traders from India. Then it lands in ports like Mumbai, Chennai, Cochin, Kandla and passes through customs as second hand, mixed metal scrap, for charity/donations to end up in recycling units in Delhi and Mumbai, Chennai amongst others.
But for e-waste management companies here, the main problem lies with procuring a license to import e-waste. Till date no license has been issued to any firm. "There are three stages involved in procuring a license. One has to get a clearance from Ministry of Environment and Forests, get a no objection certificate from the state pollution board and then get a certificate from the Central Pollution Control Board. So far in India, there is no integrated system in place and companies are involved in mechanical disintegration," says Mr Gupta.
mansi.tiwari@timesgroup.com
Consider the figures — there are 58 million television units in India currently that will reach 234 million by 2015. By the end of 2010 there will be around 75 million computers in India from 15 million now since the life cycle of a PC has come down to 3-4 years from 7-8 years a few years back, and the segment is suffering from an extremely high obsolescence rate of 30% per year.
Similarly, the Indian mobile handset market is set to zoom across the 100 million mark soon. E-waste management firms claim that now it is possible to recycle around 98% of a cellphone. At the same time, memory devices, MP3 players and iPods are the new additions to ewaste production. But that's just the tip of the iceberg. Nitin Gupta, CEO of Attero Recycling, a Noida-based start up in the business of e-waste management that recently attracted $6.3 million in funding from venture capital firms NEAIndoUS Ventures and Draper Fisher Jurvetson, says, "We are looking at the possibility of India becoming the outsourcing hub for e-waste management. It has a huge potential, as the electronics industry is growing very fast across the globe and people have started addressing the issue of properly recycling e-waste."
And it is time that they did. Globally, electronics is the largest and fastest growing manufacturing industry, having surpassed one trillion US dollars. And ewaste management firms such as, Attero have a lot to look forward to, since it takes only $2 to recycle a single PC in India compared to $20 in US.
At present, there are almost two million old PCs ready for disposal in India, according to industry estimates. And preliminary data suggests that the total Waste Electrical and Electronic Equipment (WEEE) generation in India is approximately a mammoth 146000 tonnes per year. M K Soni, CMD of Infotreck Syscom, a Mumbai-based e-waste management and recycling company, feels that India certainly has the potential. Mr Soni says, "There is a huge margin for Indian companies to fill the gap between the number of existing firms and the number of companies needed to recycle the amount of e-waste produced globally. This is one sector that w
ill not face the heat of economic slowdown. Even if there is a global meltdown, people still need to communicate and that means business for companies like us." The main source for e-waste remains imports, government, public and private sector discards, PC retailers, manufacturers, secondary market of old PCs and individual households. Around 30,000 computers become obsolete every year from the IT industry in Bangalore alone.
Three categories of WEEE account for almost 90% of the generation: large household appliances: 42.1%, information and communications: 33.9% and consumer electronics: 13.7%. Developed nations dump an estimated 500 million tonnes of e-waste yearly in emerging countries. Of this almost 70% of the waste ends up in China, making it the world's largest dumping ground for e-waste. In India, e- waste is mainly collected by recyclers abroad and sold to waste traders from India. Then it lands in ports like Mumbai, Chennai, Cochin, Kandla and passes through customs as second hand, mixed metal scrap, for charity/donations to end up in recycling units in Delhi and Mumbai, Chennai amongst others.
But for e-waste management companies here, the main problem lies with procuring a license to import e-waste. Till date no license has been issued to any firm. "There are three stages involved in procuring a license. One has to get a clearance from Ministry of Environment and Forests, get a no objection certificate from the state pollution board and then get a certificate from the Central Pollution Control Board. So far in India, there is no integrated system in place and companies are involved in mechanical disintegration," says Mr Gupta.
mansi.tiwari@timesgroup.com
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Thursday, October 16, 2008
India, China can grow despite crisis: UK think-tank
INDIA and China may be relatively less impacted by the ongoing global financial crisis. With the India story still strong, cash-rich sovereign wealth funds should look at Indian companies, according to UKbased think-tank Economic Intelligence Unit.
Speaking to ET, EIU directorglobal forecasting Robert Ward and profile of Economist Intelligence Unit said that there would be a slowdown in the global economy in 2009. India and China may slowdown, but will still grow rapidly relative to global standards. While the OECD and Japan may stagnate, the US, European Union and the UK may contract during the year. Russia and the Middle-East, too, will slowdown, as these economies have been relatively dependent on oil exports and prices are softening.
Mr Ward said that the crisis would impact emerging economies with a lag. And accordingly, EIU has scaled down its growth forecast for the global economy, including India and China for the current year, as it feels that there will be some negative impact of the crisis on these economies.
The on-going global crisis could be divided in two phases. One that is purely financial based on the problem with structured finance products. The second would be the one in which see the impact of the financial crisis in the real sector. The second one has already started in the US started and could last until 2011, he said. We saw it happen in the late nineties, when banks went bankrupt and then impacted the real economy and took a while for the economy to be back on the track. The negative impact of the financial crisis on the real economy is with a lag.
Wealth destruction in the global economy has been colossal. This means less money everywhere and lesser M&As. FDIs to India may slowdown. But this would be best opportunity for companies to consolidate. Mr Ward said that India story is still strong and that India is an exciting destination for investments. But because of less money around, FDI may not be as buoyant. Companies with cash should certainly look at Indian companies, he said. Though there may not be many such companies at this juncture, Sovereign Wealth Funds which are cash-rich should look at investing in Indian companies.
Speaking to ET, EIU directorglobal forecasting Robert Ward and profile of Economist Intelligence Unit said that there would be a slowdown in the global economy in 2009. India and China may slowdown, but will still grow rapidly relative to global standards. While the OECD and Japan may stagnate, the US, European Union and the UK may contract during the year. Russia and the Middle-East, too, will slowdown, as these economies have been relatively dependent on oil exports and prices are softening.
Mr Ward said that the crisis would impact emerging economies with a lag. And accordingly, EIU has scaled down its growth forecast for the global economy, including India and China for the current year, as it feels that there will be some negative impact of the crisis on these economies.
The on-going global crisis could be divided in two phases. One that is purely financial based on the problem with structured finance products. The second would be the one in which see the impact of the financial crisis in the real sector. The second one has already started in the US started and could last until 2011, he said. We saw it happen in the late nineties, when banks went bankrupt and then impacted the real economy and took a while for the economy to be back on the track. The negative impact of the financial crisis on the real economy is with a lag.
Wealth destruction in the global economy has been colossal. This means less money everywhere and lesser M&As. FDIs to India may slowdown. But this would be best opportunity for companies to consolidate. Mr Ward said that India story is still strong and that India is an exciting destination for investments. But because of less money around, FDI may not be as buoyant. Companies with cash should certainly look at Indian companies, he said. Though there may not be many such companies at this juncture, Sovereign Wealth Funds which are cash-rich should look at investing in Indian companies.
Wednesday, October 15, 2008
Australia looks to strengthen trade ties with western India
NOT just Japan, now Gujarat might also host Australia in near future. Even as there are speculations of Japanese companies setting up shop in Gujarat, Nano's presence in the state has made the Australians contemplate business modules in Gujarat.
ET has learnt that Australia is exploring business opportunity in various sectors such as food and beverage, infrastructure, mining and even automobile sector in Gujarat. Australian trade commissioner (western India) Peter Forby said: "We are interacting with the local industry to see what kind of trade can be promoted between Australia and Western India. Coincidentally, at the same time, Tatas have announced their plant location to be Sanand in Gujarat. So, we are trying to find how Australia can participate in the project." Forby was here to meet local industrialists to take stock of the situation to check out possibilities for bilateral trade.
"Original equipment manufacturers (OEMs) such as Mitsubishi, Toyata and General Motors, along with around 200 ancillary units are functional in Australia. The ancillary units specialise in manufacturing plastic components, tool designing and auto components. We might see some of them participating in Tata's project too, if we get an opportunity as we are more focused on developing trade relations for small and mediumscale industries," business development manager of the Australian Trade Commission, Vaibhav Kale, said.
Meanwhile, after giving dreams to the auto component manufacturers, Nano is all set to give new life to the proposed engineering special economic zone (SEZ) here that has been lying in the cold storage since Vibrant Gujarat Global Investors' Summit 2005. The proposed Rajkot Engineering Association (REA) Special Economic Zone at Khirsara (Rajkota) that is promoted by REA envisaged more than 200 companies, comprising more than 40% auto component manufacturers, while rest were from the general engineering sector, for setting up their units.
The SEZ, which was promoted as an automobile park initially was changed to a general engineering hub. It also expected to generate 9,000-10,000 employment. But, after the memorandum of understanding was signed, things have moved rather slowly for the SEZ, with the state claiming that the land was agricultural. However, in a meeting on Monday between Rajkot collector and industry players, it was indicated that the proposed SEZ would be converted to Gujarat Industrial Development Corporation (GIDC) to ensure that the interested industries can set up their facilities without any delay.
"Until now, the 116-hectare land has not been allotted and it takes long to get clearance from the Central government for the SEZ, so the project can be changed into a GIDC to ensure that the things start rolling as soon as possible. The indication has come in view with the requirements for Tata as units in GIDC will be able to cater to the OEM while SEZ will be only for exports," a vendor who attended the meeting on Monday said.
Rajkot collector HS Patel told ET that the meeting was just a follow-up for the proposed SEZ and has nothing to do with the Tata project. But in future, it might be useful for developing it into an auto hub. Currently, the land matter is lying with RUDA and the zone has to be changed from agricultural to industrial.
Rallis opens Gujarat plant to build
polymer for aerospace industry
ANKLESHWAR: Gujarat will now house the world's only facility to produce poly ether ketone ketone (PEKK), a high-end application polymer used in the aerospace industry, reports Yashpal Parmar.
Rallis India has set up the facility in Ankleshwar to produce advanced composites for US-based Cytec Engineered Material, which will move further into new-age aircraft making.
Rallis, the Rs 760-crore agrochemical leader, has invested about Rs 10 crore in the 1,00,00 kg PEKK production facility, and aims to achieve exports worth Rs 400 crore over five years.
Rallis chairman R Gopalakrishnan inaugurated the plant at Ankleshwar on Monday. Talking to ET, Mr Gopalakrishnan said, "After posting a Rs 100-crore loss in FY 2002-03, Rallis is now back in the black. The company has increased profit and capacity to invest in new factories. The new facil-ity highlights the company's strong international alliances in contract manufacturing and its commitment to expand in new fields."
ET has learnt that Australia is exploring business opportunity in various sectors such as food and beverage, infrastructure, mining and even automobile sector in Gujarat. Australian trade commissioner (western India) Peter Forby said: "We are interacting with the local industry to see what kind of trade can be promoted between Australia and Western India. Coincidentally, at the same time, Tatas have announced their plant location to be Sanand in Gujarat. So, we are trying to find how Australia can participate in the project." Forby was here to meet local industrialists to take stock of the situation to check out possibilities for bilateral trade.
"Original equipment manufacturers (OEMs) such as Mitsubishi, Toyata and General Motors, along with around 200 ancillary units are functional in Australia. The ancillary units specialise in manufacturing plastic components, tool designing and auto components. We might see some of them participating in Tata's project too, if we get an opportunity as we are more focused on developing trade relations for small and mediumscale industries," business development manager of the Australian Trade Commission, Vaibhav Kale, said.
Meanwhile, after giving dreams to the auto component manufacturers, Nano is all set to give new life to the proposed engineering special economic zone (SEZ) here that has been lying in the cold storage since Vibrant Gujarat Global Investors' Summit 2005. The proposed Rajkot Engineering Association (REA) Special Economic Zone at Khirsara (Rajkota) that is promoted by REA envisaged more than 200 companies, comprising more than 40% auto component manufacturers, while rest were from the general engineering sector, for setting up their units.
The SEZ, which was promoted as an automobile park initially was changed to a general engineering hub. It also expected to generate 9,000-10,000 employment. But, after the memorandum of understanding was signed, things have moved rather slowly for the SEZ, with the state claiming that the land was agricultural. However, in a meeting on Monday between Rajkot collector and industry players, it was indicated that the proposed SEZ would be converted to Gujarat Industrial Development Corporation (GIDC) to ensure that the interested industries can set up their facilities without any delay.
"Until now, the 116-hectare land has not been allotted and it takes long to get clearance from the Central government for the SEZ, so the project can be changed into a GIDC to ensure that the things start rolling as soon as possible. The indication has come in view with the requirements for Tata as units in GIDC will be able to cater to the OEM while SEZ will be only for exports," a vendor who attended the meeting on Monday said.
Rajkot collector HS Patel told ET that the meeting was just a follow-up for the proposed SEZ and has nothing to do with the Tata project. But in future, it might be useful for developing it into an auto hub. Currently, the land matter is lying with RUDA and the zone has to be changed from agricultural to industrial.
Rallis opens Gujarat plant to build
polymer for aerospace industry
ANKLESHWAR: Gujarat will now house the world's only facility to produce poly ether ketone ketone (PEKK), a high-end application polymer used in the aerospace industry, reports Yashpal Parmar.
Rallis India has set up the facility in Ankleshwar to produce advanced composites for US-based Cytec Engineered Material, which will move further into new-age aircraft making.
Rallis, the Rs 760-crore agrochemical leader, has invested about Rs 10 crore in the 1,00,00 kg PEKK production facility, and aims to achieve exports worth Rs 400 crore over five years.
Rallis chairman R Gopalakrishnan inaugurated the plant at Ankleshwar on Monday. Talking to ET, Mr Gopalakrishnan said, "After posting a Rs 100-crore loss in FY 2002-03, Rallis is now back in the black. The company has increased profit and capacity to invest in new factories. The new facil-ity highlights the company's strong international alliances in contract manufacturing and its commitment to expand in new fields."
LEADING THE WAY: Ratan Tata with the Nano
Tuesday, October 14, 2008
On a Solar Mission: How India is Becoming a Centre of PV Manufacturing
With a new energy plan in place, India is focusing on solar energy for a major contribution. Meanwhile, India's PV manufacturing sector is developing fast, writes Jaideep Malaviya.
Prime Minister Dr Manmohan Singh's recent announcement of a credible energy plan for India goes way beyond the hullabaloo Indo–US nuclear deal. By far the most welcome component of the six-point plan is the declaration to develop India's capacity to tap the power of the sun in order to increase sustainable sources of energy. The PM memorably said: 'In this strategy, the sun occupies centre stage, as it should, being literally the original source of all energy. We will pool all our scientific, technical and managerial talents with financial sources to develop solar energy as a source of abundant energy to power our economy and to transform the lives of our people and change the face of India.' To help achieve this, the Indian government has launched a National Mission on Solar Energy.
According to US marketing company, Development Counsellors International (DCI), India is the second best country after China for business investment. DCI cites India's labour, including its supply, skills level and cost, as the main reason for this positive perception.
In March 2007 the Indian government announced a semiconductor policy under its Special Incentive Package Scheme (SIPS). According to this policy, the government or its agencies will provide 20% of the capital expenditure during the first 10 years for semiconductor industries, including manufacturing activities related to solar PV technology located in Special Economic Zones (SEZ) and 25% for industries not located in an SEZ. However, non-SEZ units would be exempt from countervailing duty (CVD) — an additional customs duty equal to the excise duty charged on similar domestic products. Table 1, below, summarizes the incentives available.
The policy has attracted a tremendous response, so far receiving nine proposals pertaining to solar PV related manufacturing worth US$18 billion. Table 2, below, lists companies that have applied under SIPS and Figure 1, overleaf, shows their relative investments in US dollars.
FabCity, Hyderabad
Inspired by the semiconductor policy, the state government of Andhra Pradesh has set up 'FabCity' in the capital, Hyderabad, at an estimated cost of Rs135 billion (US$3.18 billion). Spread over 1200 acres (486 ha), FabCity will house semiconductor manufacturing companies working to meet the needs of the electronic hardware sector and fabrication units for solar PV.
A company called FabCity SPV (India) Private Limited has been set up to implement the project. The Andhra Pradesh Industrial Infrastructure Corporation (APIIC), the government's industrial development agency, will have a 89% stake in this company. SemIndia Inc. will participate in the development of FabCity as an anchor industry with an 11% stake.
To date, FabCity has seen nearly a dozen investments from the solar PV industry worth over $7 billion and, according to APIIC, another 40 applicants have submitted proposals.
FabCity is the largest investment ever made in India in the technology sector. It marks the first step towards India becoming a $33.6 billion semiconductor market employing some 3.6 million people by the year 2015 as projected by consultants Frost & Sullivan. Table 3 gives an overview of the investments made in FabCity.
Another southern Indian city and 'the silicon valley of India', Bengaluru will also witness intense activity in solar PV manufacturing following a recent announcement on semiconductor policy by the government of the state, Karnataka. The state is examining the various semiconductor policies announced so far and wants to draft a policy which overcomes the ambiguities in some other state policies.
Individual company news
Along with government-backed developments a number of individual companies are also making efforts to develop PV capacities in India. Reliance Industries leads the field with the highest volume of investment, although a company spokesman explained its plans are still being finalized. Reliance has, however, submitted an application for a 5 MW grid-connected solar PV project in West Bengal.
India's Moser Baer Photovoltaic Ltd (MBPVL) currently has an annual manufacturing capacity of 80 MW for crystalline cells, 50 MW of thin-film modules and 10 MW of concentrator modules. It is aiming for more than 600 MW of thin-film single and tandem junction and 500 MW of crystalline and concentrator modules by 2010. MBPVL will invest Rs 200 billion ($5 million) in a PV and nanotechnology factory in Tamil Nadu. When operational, it is expected to generate annual sales approaching $100 million largely through exports.
Meanwhile, US-based Signet Solar has signed a memorandum of understanding with the government of Tamil Nadu to manufacture 300 MW of thin-film PV modules in a project worth an estimated $500 million. The plant will be located in the Sriperumbudur SEZ. It will initially export most of its production, but will serve the Indian market as domestic demand picks up. The first shipments from the plant are expected in 2010. Signet Solar plans to build three plants (1 GW) in India over the next 10 years at multiple locations.
Solar Semiconductor has an order book of $1.5–2 billion to be delivered in the next 2–3 years. It has orders to supply PV modules to leading players in the global solar market including Q Cells AG, IBC Solar and ersol Solar Energy of Germany and Motech Industries of Taiwan. Solar Semiconductor's supply contract with Q-Cells is worth $170 million, for example. The company already has two operating facilities with an installed capacity of 60–70 MW on the outskirts of Hyderabad. According to its director, S. Prasad, it will have the lead in FabCity as the first company to commence manufacturing by the third quarter of 2008. This will be its third unit. 'By end of 2008, we will have a capacity of 210–220 MW', said Prasad.
Mola Solaire Produktions GmbH, a manufacturer of multi-crystalline and mono-crystalline solar wafers, has signed a five-year contract to supply 125 MW of multi-crystalline solar wafers to XL Telecom & Energy Ltd between 2008 and 2013.
Sharp, the global leader in solar PV technology, recently made a foray into solar energy in India with its Sharp Business Systems India Ltd subsidiary. According to a company spokesman, it will focus its activities on supplying large-scale grid-connected systems and targets 8 MW installed by 2010.
Centrotherm Photovoltaics AG of Germany plans to set up a 5000 tonne capacity (expandable to 10,000 tonnes) polysilicon processing factory at Haldia in the state of West Bengal in eastern India at an investment of Rs.400 billion ($3.18 billion). This is a joint venture with SREI Infrastructure Finance Ltd, Environ Energy Deck Services and US-based Perseus. The factory is likely to be the first such plant in India and the state government has already allotted a quarter of the land needed for the 790 acres (320 ha) project. The factory will produce both electronic and solar grade silicon and will be equipped with a 100 MW captive power plant. SREI and Environ Energy together will have a 50% stake in the project, while Centrotherm is likely to pick up a 15% stake in the venture. In addition, the IBM Thomas J Watson Research Centre (the headquarters for IBM Research in the country) has also expressed a desire to participate in solar energy and silicon research in West Bengal.
It is not just foreign interests that are exploring the possibility of expanding solar PV capacities in India. Tata BP Solar, a joint venture between the giant Tata Group of India and BP Solar of the UK (and one of the oldest semiconductor manufacturers in India) is in the advanced stages of a $100 million investment in a 128 MW solar cell manufacturing plant close to its existing facility near Bangalore, which will eventually be scaled up to 180 MW. Tata BP Solar recently announced that it has signed an agreement with Calyon Bank (Credit Agricole CIB) and BNP Paribas to raise $78 million to fund further development. Tata BP Solar currently has a module manufacturing capacity of 85 MW.
Other national initiatives
Most urban and industrial centres in India are experiencing peak electricity shortages of over 15%. Drawing on similar efforts being implemented in London, Tokyo, New York and Adelaide, the government of India has come up with a plan to develop 60 cities as 'solar cities.' The proposal envisages a minimum 10% reduction in total demand of conventional energy after five years in each of these cities through efficiency and renewable energy measures. Solar energy will have a prominent role to play since India, as a tropical country, is blessed with abundant resources. If these solar cities go ahead, India will become a role model for solar cities worldwide.
To keep pace with the global trend of exercising feed-in-tariff solar power, the Ministry of New and Renewable Energy has produced a set of initiatives aimed at bolstering solar generation. Solar PV projects up to a maximum capacity of 50 MW are to be supported by financial incentives of a maximum of Rs 12/kWh (28 US cents) for PV projects and Rs 10/kWh (24 US cents) for solar thermal power projects for a period of 10 years. With investors rushing to set up solar power projects and adding up to 2500 MW of capacity, the Ministry has asked the Planning Commission and the Indian Cabinet to expand the 11th Plan solar power programme beyond 50 MW.
Gaining momentum in Solar development
The solar energy industry in India has undoubtedly gained momentum and should be able to keep pace with the government's aim of achieving 10% of the country's total electricity requirements by 2012. India already possesses a balanced eco-system for the PV industry, a high-tech manufacturing base and skilled labour sufficient to make it a booming industry. Annual PV production has already reached over 300 MW, with about 85% being exported.
India receives solar energy equivalent to over five trillion MWh a year, far more than its total energy consumption, and should therefore benefit from economies of scale that are unavailable to smaller countries. However, it is necessary to address the availability and management of a strong infrastructure and the need to consider a long-term solar energy policy (20–25 years).
Rajesh Bhat, director and country manager for Sun Technics, says that: 'The government of India should consider feed-in-tariff schemes in excess of 1000 MW per year against the present 50 MW, since the need of the hour is to support PV programmes which are cost-prohibitive in comparison to other renewable technologies. This would further encourage local companies to consider investing in solar PV projects and can help in their economics. India currently has to depend largely on imports of raw materials and the rising currency rates make manufacturing a burden.'
With government support for PV growing, ample solar resources and both the labour and the market potential to exploit these resources India is set to become a major force in the future PV world.
Jaideep Malaviya is a consultant and freelance journalist based in India.
e-mail: rew@pennwell.com
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