Travelling from Bandra to Worli via the sea link is a breeze.

 We travelled, so we're speaking literally. It opens on May 31

 It took nine years to provide Mumbai with a six-minute drive. But now the long-pending Bandra Worli Sea Link, MSRDC's pet project, will finally be ready for commuters on May 31. The idea is that in June, you leave Bandra at 9.54 am, for your 10 am meeting at Worli. And you still call yourself a Mumbaikar.
    To get the figures out of the way, this is a 4.7 km bridge with eight lanes, four going up and four down. There are two dedicated lanes for buses. Sorry two-wheelers, trucks, autorickshaws and pedestrians - none are allowed here. The speed limit for those allowed is 80 km per hour, the minimum speed you have to maintain is 50 kmph. The toll is Rs 45 for a one-way journey. (The toll collection, for those with cards, will be automated, with the cards stuck on the back of the rearview mirrors of cars. So you can drive through without stopping. Occasional users can pay cash.)
    In the Rs 45-bargain, you cut down on more than 40 minutes of snail's speed travel through the city, and avoid 23 traffic signals that you would face in those 40-plus minutes. As for how much petrol you save, you can calculate that yourself once you begin your daily commute. And let's not yet count the number of hours you could add to your life by less-stress travel. We'll do that two years down the line, if all is smooth.
    More figures. The bridge is earthquake-resistant up to 7.5 on the Richter scale. It has a promised life of 100 years.
    Yesterday, we took a slower cruise along the sea link, that's nearly ready. We left Bandra and almost immediately sighted Worli village, that so inspires Sudhir Patwardhan. By the time we caught the breeze and checked out the Bandra skyline, we were there.
    Then we got a treat. We were allowed to ride the construction workers' elevator up the twin towers, no pun or scare intended, up to the height of 42 storeys. We got a great view and a great perspective of life from there. But, for obvious reasons, that's not open to all.
    In fact, as Jimmy Mogal, VP, Corporate Communications, Hindustan Construction Co. Ltd, explained, the twin tower is probably the symbol of delay of the project. Initially, the bridge was designed with one tower, but with the fishing community protesting against the bridge, a large gap between pillars in the central section of the bridge became a must, for fishing boats to go through. So the cable stay length was increased and two separate towers included. The cable stay section (part of bridge held up by cables) is 600 m, which makes it the second longest cable stay length in the world.
    PILs lodged by environmentalists, constant design changes and shortage of funds delayed the project for another four years, from 2000, when it was awarded, to 2004, when the construction actually started in right earnest.
    The next lap of the bridge will take it to Haji Ali. The tenders for this has been opened by the government. That will be another 4 km-stretch, and should be constructed in 42 months.
    The final lap is up to Nariman Point, though there is a PIL lodged against it which says the bridge will spoil the view of Nariman Point. "Now, feasibility studies are being done on having the bridge route tunneling under Malabar Hill instead. The cost for this will be five times more," said Mogal.
    If all goes well, travelling to town will be a breeze, literally speaking. For now, enjoy the need for speed up to Worli.
WHY WAS IT DELAYED?
The sea link was awarded in 2000. It will be ready for use on May 31, 2009. Here's why it took nine years instead of four.

• 85 per cent change in design from the original, to the one we see now. Some changes were to accommodate the fishing community, some for traffic control reasons.

• Legal action by activists protesting against the construction of the sea link, which went all the way up to the Supreme Court, which factored in stay orders.

• Shortage of funds midway through the project, cause by design changes increasing the budget.

(Left) An aerial view of the Bandra Worli Sea Link; (Top and bottom ) Last-minute work in progress

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Mahesh Vyas: Investment story's still alive

Mahesh Vyas / New Delhi April 27, 2009, 0:52 IST Most have focused on the projects being shelved, but India's investment juggernaut continues uninterrupted, says Mahesh Vyas

A number of commentators expect investments to slow down sharply in 2009-10. The IMF, in its report released on April 22, projects a steep fall in the growth of the Indian economy — from 9 per cent in 2008 to 4.5 per cent in 2009. The slowdown "is primarily a result of weaker investment", according to the Fund. Earlier, the World Bank, while commenting on South Asian countries said, "Capital flows have diminished, contributing to fall off in investment growth, notably in India." And, the Asian Development Bank in its Asian Development Outlook 2009 had the following to say, "Substantial excess capacity in domestic industry and limited export demand are damping investment prospects."

The RBI's Annual Policy Statement 2009-10 released on April 21 states, "While domestic financing conditions have improved, external financing conditions are expected to remain tight. Private investment demand is, therefore, expected to remain subdued."

The Business Confidence Index of the National Council of Applied Economic Research registered a sharp fall in January 2009 and the RBI's Industrial Outlook Survey also reflected a fall in business expectations. These reflect a sentiment that fits well with the forecasts of the agencies predicting a slowdown in investments in 2009-10.

CMIE's CapEx database provides a completely different picture of the trends in investments. The CapEx database tracks the announcement and implementation of individual investment projects till their completion or abandonment. It derives aggregates from these to draw inferences regarding trends in investments. The CapEx aggregates are thus based on direct observation of investment projects and are not derived from the usual macroeconomic accounting framework.

The CapEx database shows no signs of India Inc slowing the pace of announcing new investment projects or the pace at which they complete their projects. Save for a minor pause during October-December 2008, the investments' juggernaut has continued uninterrupted. But, because of the global liquidity crisis and the domestic disruptions caused consequently, there is also an increase in the number of projects getting shelved. This increase in the shelving of projects is attracting the attention of the commentators. In the larger scheme of things, these shelving of projects are not significant.

In the second-half of 2008-09, projects involving investments worth Rs 1,19,205 crore were commissioned. This is larger than the Rs 90,686 crore worth of projects that got commissioned in the first half of the year. Record new capacities were created in 2008-09. At Rs 210,000 crore, these were higher than the Rs 182,000 crore and Rs 137,000 crore worth of investments commissioned in 2007-08 and 2006-07, respectively.

Investments have been on a roll recently. The CapEx database suggests that the momentum continues into 2009-10. Over a thousand projects, involving a total investment of Rs 490,000 crore, are scheduled to be commissioned in 2009-10. This is more than twice the project completions witnessed in 2008-09. Around 40 per cent of these investments are concentrated in just the top 40 projects. Twenty seven of these, that accounted for investments worth Rs 136,000 crore, confirmed to Centre for Monitoring Indian Economy (CMIE) in late March or early April, that their projects would get commissioned during 2009-10. Implementation of seven projects involving investments worth Rs 30,655 crore is already delayed and the projects will not get commissioned in 2009-10. Responses from the remaining six projects were not available.

The CapEx database provides project-by-project details of the implementation. Thus, the evidence of the investment boom continuing is very strong. The problem is that there is equally strong evidence of projects that were announced earlier being cancelled. Given the severity and pervasiveness of the global liquidity crisis, it was expected that entrepreneurs would be a lot more cautious in investing into new capacities, even in India. The CapEx database quantifies this caution.

Projects worth Rs 9,455 crore were shelved during the second half of 2008-09. During the quarter-ended March 2009, projects worth Rs 64,179 crore were shelved. This was more than twice the investments that got commissioned during the same quarter (Rs 31,966 crore). It is very likely that the information regarding delays will also be available with a lag. Companies did not immediately announce the shelving of projects after the global liquidity crisis struck in October 2008. They waited for a while before they were willing to admit publicly that their projects would have to be shelved.

It is also likely that the projects shelved could have reached higher levels than is reflected in the CapEx database. Often, the decision to shelve a project is never clear. It could be a temporary deferment till the times improve. Besides, it is easier to cancel a project that is in the nascent stages of implementation than it is to cancel a project that is at an advanced stage. Nearly 40 per cent of the projects that are scheduled to be commissioned in 2009-10 could not provide any information in recent months. These accounted for only 30 per cent of the total investments in value.

While a number of projects have been cancelled or deferred, implementation of investments of a much larger value is well on its way to completion in 2009-10. The global liquidity crisis was, in fact, a boon in disguise. The investment boom that was gathering momentum since 2004 was possibly getting a bit irrational, particularly in the real estate development sector. Thanks to the global liquidity crisis, this has been corrected. The remaining projects have been re-evaluated in the light of the difficult economic environment. The data shows that India Inc votes to continue to invest. India's investment juggernaut therefore continues, having shed some of its less viable projects.

The CapEx database provides one more interesting metric of trends in investments. This is the announcement of new investment projects. These new intentions reflect the investment sentiment. A fall in new investment projects is the first sign of entrepreneurs becoming cautious. We had expected a fall in new announcements during the quarter ended March 2009. However, we are surprised by the record Rs 790,000 crore of new investment projects that were announced in the quarter.

The spike in new investments partly reflects an unusual rise in investment proposals from Gujarat because of the Vibrant Gujarat Investors Summit 2009. Announcements made at such political summits are often tentative intentions rather than clear proposals to invest. But, even if we exclude all the new investments announced in Gujarat during January to March 2009 (a sum of Rs 350,000 crore), the new investments during the period are impressively high. At Rs 430,000 crore, they are higher than the proposals made in the previous quarter and also in the same quarter a year ago.

Even after we net out Gujarat from the last quarter, new investments have continued to roll in at the rate of over Rs 400,000 crore per quarter and larger-than-ever investment projects are getting completed in the current year. Sure, companies did face greater difficulty in organising finances for investments, but that did not stop them from going ahead with their capex plans. Macroeconomists and the country's statistical machinery need to take into consideration the evidence on capex seriously. I continue to believe that the economy is doing quite well. We just need to measure it correctly.

The author is Managing Director and CEO, CMIE mahesh@cmie.com 

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Sensex at 1 lakh by 2025: Tech charts

   NEW DELHI: It may sound utopian in the backdrop of months long downslide on bourses, but a US based equity research group sees India's benchmark index Sensex scaling a milestone of 1,00,000 points within next 15 years.

This would mean an unimaginable rally of over 10-times from the level seen just a few days ago, when Sensex was toiling below 10,000 point mark after a meltdown that began more than a year ago.

The Sensex had more than halved to trade below 8,000 point mark in October last year after scaling a record high of over 21,000 points on January 10, 2008.

Unperturbed by the sharp fall, US based global equity research group Elliott Wave International, which specialises in analysis of technical charts of stock movements, believes that the recent surge in Indian market is the beginning of a long-running bull cycle that could continue for 15 years.

The recent upsurge began on March 9 and the Sensex has gained over 2,500 points or by more than 30 per cent.

"If the price and time proportions between the waves in the 2003 to 2008 rally continue, the Sensex should hit 100,000 in about 15 years," research group's Asia Pacific Financial Forecast editor Mark Galasiewski told PTI over phone.

In its report for Asia Pacific markets, based on analysis of technical charts, Elliottt Wave has said there were strong indications of "a resumption of the bull market in Indian stocks".

Extending its previous analysis in November last year, when it had said the Sensex might continue advancing for 15 years before the end of another bull run, Elliott Wave said the market seemed to have completed its most recent downward spiral in October 2008.

The Indian stock market benchmark Sensex had scaled an all time high of 21,206.77 points on January 10, 2008 before embarking on a downward journey, wherein it touched a low of 7,697.39 points on October 27.

According to the Elliot Wave's April forecast report, the Sensex has declined in three waves to the October low, where it retraced approximately 50 per cent of its 2003-08 rally on a percentage basis.

The index has just broken out of its downward trend channel and the patterns seen recently and during the 2003 to 2004 period "are the best argument for a resumption of the bull market in Indian stocks," it added.

Naming India among the "potential baby bulls" of the region, alongside Taiwan and Korea, Elliott Wave had said the completion of three waves of fall from their respective highs had made them "strong candidates to rally back to at least near their all-time highs - if not beyond".

Elliottt Wave has also classified Japan, Singapore, Hong Kong, China and Australia as long term bear markets, while the "potential baby bulls" have been described as those which investors should consider for long-term investments.

The report further noted that India had experienced long running bearish phase in the past, indicating that the next bull run could continue beyond its most recent all time high levels.

Until the early 2000s, the long bear market in India lasted for 11 years (1992 to 2003).

India launches first microwave satellite

AT 6.45 am on Monday, at an isolated island on the east coast of south India, a polar satellite launch vehicle (PSLV) was propelled into the air, on what is called a 'precise' or 'textbook' launch, on time, with no deviations on any of its calculated parameters, carrying with it India's first microwave satellite for earth sensing and the first communications satellite built by an Indian university.
    Launched from the Indian space research organisation's (ISRO) centre here, consuming 140 tonne of fuel, the 44 metre, 230 tonne PSLV-C12, a relatively light vehicle, completed each of its four stages on time. Ninteen minutes later, it injected its 'payload' — RISAT-2 radar imaging earth sensing satellite and ANUSAT communications satellite built by Anna University — into their orbits at 550 km.
    "The launch was made at 41 degrees inclination to the equator. This would enable RISAT to visit the earth more often during each of the planet's rotation, for better surveillance," said ISRO chairman Madhavan Nair.

It happens only in INDIA: Beating Recession

ALL-IN-ONE AUTO: Thane resident Rakesh Tiwari drives a rickshaw that also functions as a PCO,

 newspaper stand and insurance information centre (Tiwari’s wife is an insurance agent). Besides,

water is also available to quench the thirst of commuters. Tiwari has been providing these facilities

 since Gudi Padwa and is satisfied with the response he has got so far

 

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India's growth likely to be far more than global estimates'

Stimulus package can sustain growth, says Arvind Virmani.

Ramesh Sharma

Mr Arvind Virmani, Chief Economic Advisor, Ministry of Finance (file photo). —

C. Shivkumar

Bangalore, April 10

India’s economic growth is likely to be far higher than estimates and forecasts made by multilateral institutions.

Speaking to Business Line, the Union Finance Ministry’s Chief Economic Advisor, Mr Arvind Virmani, said: “GDP growth will be far higher than World Bank, ADB or the IMF’s forecasts.”

The World Bank had estimated a growth of 4 per cent for the current financial year. The ADB and the IMF had issued forecasts of 5 per cent and 5.25 per cent, respectively, for the current year. All these institutions estimated a pick up only by the second half of 2009-10.

Mr Virmani said the current fiscal stimulus package was sufficient to sustain the growth momentum of the economy. The boost to sustain the growth momentum was provided by the increase in the fiscal deficit from 3 per cent to 6 per cent of the GDP. “The fiscal boost was 3-4 per cent of GDP,” he said. “This stimulus is the largest in the world.”

Given the current global financial situation, there was little alternative to this approach, Mr Virmani said. “Increase in the fiscal deficit was the only way to offset compression of private demand and increase public demand.”

Fuel for GDP growth

During the last few years, high rate of GDP growth was partly fuelled by investment demand. Real investment increased by 18 per cent per annum between 2003 and 2008, compared to the previous five-year annual growth figure of 9 per cent. As a result, the current investment to GDP ratio is over 40 per cent. This rise was also partly fuelled by capital flows. Foreign capital though had little impact on the economy. Mr Virmani said, “Foreign capital’s contribution was miniscule, only 0.4 per cent of the GDP.”

The Chief Economic Adviseo said, “Our concern was that investment rate would slow down too rapidly because of the financial meltdown. We expected to slow down since the investment GDP ratio is already very high. The concern is if the investment slows down to zero.”

Infrastructure focus

Accordingly, the Government was attempting to pump up public investment, particularly in developing infrastructure. The Eleventh Plan target for infrastructure investment was 9 per cent of the GDP. Currently, it is 4-5 per cent. “We cannot step up this investment overnight, but it will go up over a period,” Mr Virmani said.

To improve domestic investments by harnessing the high savings rates, he said, the Government was working towards widening the financial intermediaries.

“Our thrust is to accelerate the development of the long-term debt market for harnessing domestic savings,” he added.

 

 

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INDIA:RURAL MARKET IS WAITING TO EXPLODE

 RAHUL Patwardhan, vice chairman and managing director, Indiaco Ventures, made the keynote presentation highlighting the emerging opportunities and strategies for rural marketing. The purchasing power of rural families has grown rapidly over the last years. 23 million households are slated to receive electricity by 2009. There is a growing demand for television sets, two-wheelers and cars, which will surge significantly. Television sales in rural areas are expected to double from 50 million in a decade. Income from the non-farm sector is likely to touch 66% of net rural income by 2020. The market size would thus nearly double as people earning up to $5 a day could grow from 35% in 2005 to 65% in 2025. Average rural spending would grow overall six times from current levels in 20 years. Healthcare and education spending are estimated to grow at 7% and 9% respectively in the coming years. There is a huge opportunity for rural marketer in India. With 600,000 villages with 700 million people, the countryside offers a huge consumer base. Rural Indians contribute half of the country's GDP as 50% of well-off families live in rural India.
    However, rural marketing is not without its challenges. Poor infrastructure, shortage of electricity, water, sanitation, poor logistics support, challenges in distribution network, poor telecommunication facilities, lack of micro financing & insurance services, illiteracy, local consuming habits, lack of identification or documented proof of identity, small value transactions, a fragmented market, lack of access to products, difficult customer engagement and a valuefor-money mentality are some of the many challenges faced in India.
    It is not that the rural market is impenetrable. There are companies like Hindustan Unilever, ITC, Reliance, Coke, Pepsi, LG, HDFC and ICICI, which have managed to establish brand equity in the rural markets. While attempting to market products/services to rural consumers, companies have to keep in mind certain principles. There is a need to design end-to-end solutions collaboratively. Major problems have to be identified, which have to be solved with efficiency and transparency. Marketing has to be initiated with proper market research involving focus groups. Marketers need to build prototypes while strategising for marketing. An iterative approach has to be followed to build models to solve realworld problems.
    There are key issues which need to be addressed like who pays and how? Who monitors quality and how? Who are the stakeholders? What are the value propositions to the stakeholders? It is critical to have a right pricing model. In this regard, challenges are data collection and aggregation and communication.

ANURAG GUPTA,
President - Strategic Initiatives & Integration, TERRA, Mudra Group
Today, rural marketing is either a CEO's sexy dream to go 360 degrees or it is a group of five people working in a corner

SHAILESH NAIK,
Head - eChoupal Channel, ITC
Cos don't have the luxury to ignore rural markets. We have seen a reach-based approach adopted by the cos towards these markets. From increasing reach, marketers have to move towards increasing engagement

K RAMAKRISHNAN
General Manager - Marketing, TVS Motor Company
Rural marketing has not been an option to us. Unfortunately, companies that have focussed their efforts on rural marketing have not been very effective, for other cos to be prompted to follow suit

ANURADHA BANSAL,
Managing Director, Verity Technologies
How does one go about creating identity in rural markets? How about trapping information about rural consumer's habits and creating profiles? We believe a mobile device can place an ID address for every company - a marketer's dream

SUJIT GANGULI,
SVP and Head Marketing, ICICI Prudential Life Insurance
The share of non-farm income has crossed 50% and is growing since last 10-15 years. Rural income growth is more diversified today and a year of bad monsoon cannot prevent consumption

SANDIP BANSAL,
Country Head, Xpanse Asia
India's rural population accounts for 12.5% of the world population. It is not any different from any other consumer elsewhere. Marketers have to have a campaign approach rather than a promotion kind of approach.

RAHUL PATWARDHAN,
Vice Chairman and Managing Director, Indiaco Ventures
We need to have something with a clear ROI. Rural markets can give a sustainable ROI, provided marketers nurture this market like any other market

ABDUL KHAN
Head - Brand and Marketing Communications, Tata Teleservices
We find increasing convergence between rural and urban mindset. The marketing in rural areas starts with young people. We are pretty bullish on it

India may contribute $11b to IMF crisis kitty

INDIA may contribute $10-11 billion to the International Monetary Fund (IMF), as its contribution to the $500 billion that the global institution is raising from 20 powerful nations for lending to crisis-stricken countries. A decision may be taken in a few days, department of economic affairs secretary Ashok Chawla told ET.
    World leaders at the G-20 meeting, held earlier this month in London, decided that they would provide fresh funds to IMF, so that it can triple its $250 billion available for lending to needy countries. Japan and the EU have already committed $100 billion each while China has committed $40 billion, as the IMF seeks to inject cash into the world economy and help it tide over its sharpest decline in decades.
    "We are willing to contribute to the pool of funds in proportion to our quota. Should IMF require, we can lend $10-11 billion, for which interest would be paid. A decision on this will be formally communicated to IMF at its spring meeting later this month," Mr Chawla said. India, however, has no plans to borrow from IMF at the moment, he added, quoting Prime Minister Manmohan Singh, who said in London that India has
    no such plans.
    IMF will also get another $250 billion in Special Drawing Rights (SDR), an overdraft facility for its 185 members. India has no requirement for assistance, said Mr Chawla. India has a shareholding of 1.91% in IMF, with a quota of $4,158.20 million in SDR. To enhance the voice of emerging markets and developing countries in IMF, the G-20 also urged accelerated review of IMF's quotas. The 20 powerful and emerging nations agreed to have a global benchmark on financial regulation. They also committed to raise the level of financial regulation to the global benchmark to be decided by G-20.

Companies finding rural markets increasingly attractive: Assocham

New Delhi, April 7 Demand in India's urban areas may be dwindling, but a leading industry group says the hinterland is becoming increasingly attractive for manufacturers of consumer products and automobiles, as well as organised retail businesses.

The Associated Chambers of Commerce and Industry of India (Assocham), in a report titled "The Rise of Rural India" released Tuesday, said companies in the fast moving consumer goods (FMCG) sector have recorded higher growth in rural market, which has contributed substantially to their bottomlines.

"Majority of FMCG firms such as DCM, ITC have been recording higher growth rate and sales of their product in rural areas as compared to urban markets," the report said.

India's FMCG industry is currently estimated at Rs.200,000 crore. Of this, domestic consumption accounts for Rs.17,189 crore.

"FMCG sector in rural areas is expected to grow by 40 percent as against 25 percent in urban areas," said Assocham president Sajjan Jindal.

"Rising rural incomes, healthy agriculture growth, boost in demand, rising consumerism across India, better penetration of FMCG products in the rural market are contributing to high growth and rapid expansion of the FMCG industry in rural India," he added.

Traditionally, for the auto industry, the rural market has been largely restricted to tractors and two-wheelers, though the penetration of scooters and motorcycles in villages is only 10 percent, as compared to 25 percent in urban areas.

The reason for low penetration in the countryside: the high investment involved, poor conditions of rural roads, lack of finance facility and shortage lack of service network.

However, the report said, auto firms have of late begun tapping the countryside. For instance, Maruti Suzuki generates 10 percent of its sales from rural sales, amounting to 32,000 cars.

Maruti has even launched a rural India-specific marketing campaign, the "Ghar Ghar Mein Maruti (Maruti in every household)".

Similarly, two-wheeler major Hero Honda is planning to cover 100,000 of the estimated 600,000 villages in India by the end of this financial year under a campaign called "Har Gaon, Har Aangan (Every village, every household)".

Mahindra and Mahindra, which manufactures passenger cars, now plans to foray into the two-wheeler segment targeting India's hinterland with an initial investment of Rs.110 crore, Assocham observed.

It also noted Hyundai's interest in the rural areas, where the auto manufacturer feels almost 50 percent of the 220 million households are potential car buyers.

Like Maruti and Hero Honda, Hyundai too has launched a promotional scheme, targeted at rural India, under which it will offer special schemes for government employees and members of village administrations to sell its compact car Santro.

The report said the growing liquidity in rural areas was on account of subsidies to farmers and increase in output of agri-products.

Another potential area, Assocham said, was the rural retail market - currently estimated at $112 billion, or around 40 percent of the $280 billion retail market.

The industry group said this was expected to double in the next four to five years, though only about 10,000 out of India's 600,000 villages have access to organised retail services.