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.

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)

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.

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 

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 

Paid for receiving SMS

Hi,

I am not gonna say u guys to believe me as I have also tried to earn online.

but some time it is fake (some time it is not working)....But after reading article Published in " Economics Times" under name as 'Now, get Paid for receiving SMS ads'.......I decided to sign in and with my amazement it really works so guys it's really easy way to earn with no time and Money to invest....

Check out details.....

http://www.mginger.com/index.jsp?inviteId=994066

and Sign in get Paid for receiving SMS ads'get Paid for receiving SMS ads'

and earn Money by simply deleting SMS (message..... as I know u guys are not going to read advertisements... :)...it is very simple)

Economics Times link

http://economictimes.indiatimes.com/Pay_mobile_bills_by_reading_SMS/articleshow/2066480.cms

-- 

Regards
Danalakshmi.Damodar

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.

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."

LEADING THE WAY: Ratan Tata with the Nano

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

‘India will have 27.5 million WiMax users by 2012’

THE Global WiMax Forum, while welcoming the country's spectrum auctions plan for services on this wireless technology, has warned that vested interests were trying to delay the process. The WiMax Forum has also said that reserve price for radio frequencies for wireless broadband technologies which includes WiMax cannot be equated to that for 3G spectrum. ET spoke to WiMax Forum's global president and chairman Ron Resnick on the prospects of this technology in India and the challenges that confront it. The WiMax forum comprises more than 530 member companies—144 ecosystem content developers, 162 service providers, 92 silicon component manufacturers and 131 system vendors.
There has been a lot of debate over whether WiMax or High-Speed Packet Access (HSPA), the 3G technology used by telcos, will be better for India. Besides, there is also debate in India that it would just be a matter of time before HSPA gives way to much faster Long Term Evolution (LTE) networks. Where do you see this battle headed, especially considering that the GSM Association had recently began a global marketing campaign to market HSPA and 3G devices?
    I think, this is a sign of desperation from the rival camp. We have a threeyear lead over LTE networks, which are still a long way from going commercial. We are glad that the Indian government can see through these tactics and have decided to go ahead with auctions for both 3G and WiMax radio frequencies simultaneously. You cannot compare the two—one is purely for voice while WiMax is data-centric platform. The demands by some groups to have a common base price for both 3G and WiMax is yet another attempt to delay the process.
    We do not see WiMax and cellularbased technologies such as HSPA and LTE (the long-term evolution of 3G) as competing platforms but consider them complimentary to each other. India needs WiMax as it has to offer connectivity to its 800 million people who live in rural areas. The GSM Association's move to unveil a global campaign to highlight HSPA support in devices including laptops is an acknowledgment that we are doing well and having an impact on the market. They are reacting because we are changing the business model—WiMax is an open Internet business model with innovative new devices and applications being added by the day. With many low-cost embedded devices being developed, we are moving to a retail distribution model.
Where do you see WiMax in India?
    The WiMax forum forecasts that the market for this technology in India will be $13 billion by 2012. Our projection takes into account that the country will have
    27.5 million WiMax users,
    which includes 19 million
    subscribers by 2102. We see rollouts of WiMax in India having a
    tremendous impact on the
    nation's economy. India, with a
    population of over 1.2 billion, has only a little over four million broadband users compared to about 300 million mobile users. Widespread access to broadband will greatly increase economic productivity by laying the groundwork for important initiatives such as long distance learning, tele-medicine and e-government.
Do you have any specific plans for India?
    We are in the process of setting up an WiMax applications lab at the Indian Institute of Technology (IIT) Delhi. This will be the third such lab in India—we already have labs in the US and Taiwan. The third lab will add 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.
How do you see India's recently-unveiled WiMax policy? Is the WiMax forum happy with it? Also, do you see Indian operators using their existing infrastructure to drive WiMax and lower their capex?
    The DoT's move to auction WiMax spectrum in the 2.3 and 2.5 GHz bands is a welcome move. As we see it, there will be a minimum of about four players where each player will get a minimum of 20 MHz of radio frequency. We think that the price of WiMax radio frequencies should be a lot lower than that of 3G spectrums since both are very different — it's like comparing apples to oranges. Yes, Indian operators with their existing towers and other related infrastructure will use the same for WiMax and this will result in significantly lower deployment costs. As the Indian telecoms sector operates in a volume driven market, the country is not only positioned to spur one of the world's largest broadband wireless markets, but also support an ancillary ecosystem that will generate further employment, enhance development in semi urban and rural areas and lead towards true sustainability.

R o n R e s n i c k Chairman, Global WiMax Forum

In India, at the right time!

DID they see the future? If that answer is in the affirmative, it surely explains why a lot of Indians have found their way back to India. With the sub-prime crisis and its aftermath hitting the US like never before, getting back to India seems like a pretty good idea. And, if their counterparts in the US say things like, "You are lucky to be in India", the decision to come back is merely reinforced. Sectors such as real estate and financial services have seen a number of people coming back home. Here are three such individuals who took the decision and are sounding happy.
    When Jinesh Sonawala moved to Stanford University from Mumbai, he knew he was getting into the zone of multitude of opportunities. Three degrees from Stanford and Berkeley landed him prime opportunities in Silicon Valley in the 1990's, the heyday of technology. He put together product marketing strategies at Apple Computer that enabled his team to build the first double sided colour laser printer and also the first digital camera. That was in 1992. He then worked for a small company incubated by Sequoia Capital, called C-Cube, where he handled inter-national partnerships travelling widely in Europe, Japan, and China. C-Cube was sold six years later for $2.1 billion. Today, Sonawala is the chief marketing officer at the Mumbaibased Akruti City. He has been in India for two years and he sold his house in the US before calling it a day there. At Akruti, Sonawala is leading teams that are bringing to market India's first robotic car park, the largest biotech park in India, and townships with an American flair.
    Ajoy Veer Kapoor, the founder of Saffron Asset Advisors, came back to India towards the end of 2005. Earlier that year, in February 2005, the Indian government allowed the flow of FDI in the real estate sector. That was the trigger for Ajoy who saw a huge opportunity in the business. He knew it was the time to be in India. Prior to getting back, his last assignment was Global Head-Strategy & Implementation (Corporate Real Estate) at HSBC, UK. The responsibility involved strategic management and project implementation of 75 million square feet across 79 countries. "I take a long view of 30 years on the real estate industry," says Ajoy.
    Finally, there is Sourav Goswami, managing director of Walton Street Capital a real estate focused private equity fund. His frequent trips to India, on account of family and business reasons, instilled a desire to return someday. Sourav, who studied at Harvard University and Columbia Business School, wrote his thesis on investment flows in India. He had the opportunity of working with Merrill Lynch and Goldman Sachs in their real estate groups. The perspectives and experiences of looking at global real estate markets for the last 14 years have come in handy during his current stint in India. Says Sourav, "India is a very high touch relationship driven market. With the right diligence and analysis one can do well in India." Though his accent is clearly American, he has gone all out and made lasting local friendships within and outside the country. So, what do these people bring to the table? "The skill sets of the hired expats or the NRIs are particularly useful when it comes to specialised areas like luxury apartments" says Vishal Chibber HR Head Kelly Services.
    prashant.mahesh@timesgroup.com 

Key data affirms the India story

Economic indicators for the Indian economy have worsened year-on-year, with the current account deficit widening to $10.72 billion against $6.3 billion for the first quarter of the year, but total direct tax receipts are still at a healthy 30%. The fiscal deficit has reached 87.7% of the target for the year, with seven months still to go. However the government said on Tuesday, it was on target of at least 7.5% growth for 2008-09.

Fund managers and economists that FE spoke with on Tuesday said the scoresheet would still encourage global investors to put their money into the economy. The current account is worse than China's, but better than Brazil and South Africa. Figures released by RBI shows net capital flows were lower at $13.2 billion in 2008-09 than $ 17.3 billion in the first quarter of 2007-08.

The trade deficit, which measures the difference between exports and imports, rose sharply to $31.6 billion in the first quarter of 2008-09, against $ 20.7 billion in April-June 2007-08, largely because of oil imports. The sharp increase in oil imports reflected the impact of the increasing price of the Indian basket of international crude, RBI said.

Other figures released by the finance ministry on Tuesday showed that while direct tax collections were buoyant, the growth rate was hit due to lower-than-expected advance tax collections and also lower collections from personal income tax. The tax is a leading indicator of performance of the corporate sector. The ministry has received Rs 1,48,200 crore from direct tax but this was lower than previous months when the rate was nearly 40%.

Corporate tax collections rose by 34.5% to about Rs 97,500 crore until the end of September. Revenue from corporate taxes increased by 43.5% until the end of August. But advance tax payments by companies until September 15 increased by 20% to about Rs 45,000 crore, almost the same as netted by the exchequer last fiscal in the second phase. Personal income tax collections have risen by 24% to September 30 to Rs 50,522 crore. The finance ministry has a target of Rs 3.95 lakh crore from this tax.

The Centre also faces additional pressure as its expenditure is rising faster than anticipated in an election year. The fiscal deficit is at Rs 1,16,890 crore, just Rs 16,397 crore shy of the full-year figures. The revenue deficit has also shot up to 177.4% of the full fisc target to amount to Rs 97,879 crore in the period. It was 74.9% of the BE a year ago.