Wednesday, October 31, 2012

Reliance favourite group of BJP & Cong: Kejriwal

Activists Accuse Corporate Giant Of Hoarding Gas

Congress Rejects Charges, Queries IAC Funding


New Delhi: Arvind Kejriwal and Prashant Bhushan of India Against Corruption on Wednesday launched a blistering attack on the Congress and BJP for promoting the business interests of Mukesh Ambani's Reliance Industries Ltd, saying the UPA and NDA regimes conspired to organize benefits worth thousands of crores for the company at the public exchequer's expense. 
    Speaking against the backdrop of the uproar over Jaipal Reddy's removal from the petroleum ministry, allegedly at Reliance's instance, the duo claimed that RIL had earlier got Mani Shankar Aiyar turfed out from the ministry. Ambani, not the PM, they said, was running the government. They said Reddy had opposed RIL's demand for a revision in the price of gas from the K-G basin field, and was trying to hold it to account for hoarding gas. 
PM favoured Reliance, says IAC 
    While the Congress and the BJP were savaged and their alleged favours to Reliance cited as examples of their collusion over corruption, the industry heavyweight was also scorched in what was clearly the first instance of its kind in recent times. 
    Apart from being mentioned as a glaring example of crony capitalism, the activists accused Reliance of hoarding gas from the KG basin field in order to profit at people's expense and of seeking to blackmail the government. 
    "Woh tuchhe zamakho
ron ki tarah kaam kar rahen hain (he is behaving like a petty hoarder)," declared Kejriwal. Bhushan and Kejriwal said Reliance had deliberately scaled down production of gas to pressurize the government into raising price prematurely, adding that while Reliance sought and got afour-fold raise in capital expenditure on the KG gas field, only 13 of the 31 gas wells were in production. 
    The activists also played an audio clip from the infamous Niira Radia tapes, with former PM A B Vajpayee's foster son-in-law Ranjan Bhattacharya telling the ex
corporate lobbyist, "Mukeshbhai told me, Congress to apni dukaan hai". Reliance denied the charges and accused IAC of being a proxy of vested interests. 
    The PM also came in for rough treatment with the activist duo saying he was liable to be prosecuted under the Prevention of Corruption Act for allegedly abusing his position to help corporate interests—from Reliance to companies in Coalgate and 2G scam—profit at the cost of the public exchequer. "He signs on to every file, be it of Coalgate or spectrum scam. He has been ensnared by the Congress," Kejriwal said. 

Cong questions IAC's funding 
    
Congress on Wednesday questioned India Against Corruption's source of funding, rebuffing as "baseless" the allegations that UPA was favouring Reliance Industries Ltd. AICC general secretary B K Hariprasad said, "It is baseless. Nowadays, it is fashionable of IAC to make accusations. But where are you getting your funds from? Who is funding the IAC... It is Ford Foundation — from Ramlila Maidan to this press conference." TNN

CHAOTIC CONFERENCE: Arvind Kejriwal's press conference was dramatically interrupted by a man (in grey shirt) who questioned why the activist and his wife, an IRS officer, had never been transferred out of Delhi. Kejriwal's attempts to answer were drowned out in the commotion. Then former Congress worker Jagdish Sharma shouted slogans and tried to hurl a shoe at the stage. He was overpowered by IAC supporters and led out

Sunday, October 28, 2012

In UPA’s Biggest Reshuffle, 22 Ministers Take Oath, 17 Of Them New Inductions


Rahul Takes Poll Position

Fuels Rise Of Youth Brigade With Eye To '14


New Delhi: Prime Minister Manmohan Singh's "last reshuffle" of his ministerial team before the 2014 general elections on Sunday carries the first unmistakable stamp of Rahul Gandhi's ascendancy in the Congress party. Coming amid strong indications that Gandhi may soon be designated as secretary general or working president of the Congress, Sunday's changes were seen to be significant—it appeared to mark the beginning of another generational shift in the 127-year-old party. The reshuffle is also an effort to put the party in battle mode for the 2014 polls. 
    The Congress's "younger set", championed by Rahul, has got a leg-up and key positions in the reshuffle, in which as many as 17 new faces were inducted. In terms of its sweep, nearly a third of Singh's cabinet colleagues—10 out of 32—have been impacted by Sunday's changes. 
    Jyotiraditya 
Scindia, Sachin Pi
lot, Manish Tewari, Jitendra Singh and Bharatsinh Solanki have all been assigned independent charge of ministries while Ajay Maken has been promoted to cabinet rank. Taken together, the upgrades suggest a vote for the young and a desire to experiment. 
    While the younger set didn't enter politics because of the Congress scion, the clear focus on them in this reshuffle is being widely ascribed to Rahul's growing involvement in government affairs. According to sources, this was the first time that Rahul cast aside his aloofness to discuss the ministerial team with the PM. 
Rahul's imprint, PM's blueprint hether he played a role in the elevation of Pallam Raju, till now junior minister in defence, as cabinet minister for HRD, is not known, but with his influence looming large, Rahul Gandhi was also credited for Raju's rise. 
    At 48, Ajay Maken is the youngest Cabinet minister, while 50-year-old Raju is seen as the youngest HRD minister in recent memory. Even Salman Khurshid at 59 looks a youthful foreign minister compared to his predecessors — S MKrishna, Pranab Mukherjee and Natwar Singh. 
    Besides Rahul's imprint, the exercise also reflects the PM's desire to repair his legacy by focusing on infrastructure ministries in the last stretch of his second innings, as well as his desire to pitch in for his favourites: Kamal Nath, Pawan Bansal, Ashwani Kumar and Khurshid have all fared well. 
    Sunday's big shocker was the shunting of S Jaipal Reddy from the high-profile petroleum ministry to a relatively obscure science and technology. The change came as a surprise, and was seen as an "insult" by the supporters of the affable minister. Coming against the backdrop of the ministry's recent pushback of the influence of business interests in the oil sector, it raised eyebrows too. 
    The PM's focus on infrastructure ministries was re
flected in Jyotiraditya Scindia being given independent charge of the power ministry, which has languished through UPA's two terms. Bansal's appointment as railway minister is seen as an effort to align the key transport sector with the PM's fresh focus on reforms. 
    Bansal is the first full-time Cabinet minister belonging to the Congress to hold charge of railways after C K Jaffer Sharief in 1995. His choice puts an end to the east's domination of railways beginning 1996, and more than compensates the Chandigarh MP for the loss of the ministries of water resources and parliamentary affairs. 
    In terms of representation from states, Andhra Pradesh, Kerala, Punjab, West Bengal and Gujarat have done well. However, in a glaring oversight, those in charge failed to ensure even a single representation for the entire eastern and northeastern region, which together make up for 142 Lok Sabha seats, in the cabinet. 
    Khurshid's appointment as external affairs minister marks a rebuff to allegations of impropriety against him and clears the way for the first Muslim to be part of the Cabinet Committee on Security in 22 years, after Mufti Mohammad Sayeed served as home minister under V P Singh. Urban development minister Kamal Nath's networking skills have been recognized by giving him the additional charge of parliamentary affairs.

Wednesday, October 24, 2012

ONE-ON-ONE ‘Oracle will keep investing in India’


San Francisco: The $37-billion Oracle Corp will invest further in the R&D space in India and may even look to open a data centre in the coming years to tap the growing technology adoption by Indian companies. The Redwood City, California-based tech major, which has been pushing its cloud offerings, is optimistic that Asia's share in the company's revenue will grow on the back of the region's expanding economies, including that of China and India. Currently, Asia-Pacific contributes 17% to Oracle's global turnover. TOI caught up with Steve Au Yeung, executive VP for Asia-Pacific, Oracle Corp, during the tech major's annual event Oracle Open World to understand the company's plans for India. Excerpts: 
Could you give us a sense of your R&D investments planned for India? 
India, quite obviously, is a major part of our R&D investment. We are over 30,000 people in India and a majori
ty of them are involved in the R&D function. Right now, 12% of our global revenue is spent on R&D and we would like to continue that. 
How do you further use 
India as a market? What 
is the talent quality that is coming out of this region? 
I think India on its own is a very important region. Its growth potential, the high number of the population, and also the mobile population — by all indicators, it's certainly a region we have to keep investing in. I think we have been quite lucky and fortunate to attract some very good talent from the Indian market. I am very happy with the management team we have there. And if you look at growth that we have been generating in India, it has been good progress for us. 
How are your partners 
adopting technology in 
the Asian region specific to India? 
In the past, it's always that the customer in APAC (Asia-Pacific), India included, was saying, "Okay, I don't really want XYZ. I want it to be well
proven before I even want to touch it." Now I think it's actually going the other way. Our customers in APAC now are actually much more aggressive. They say, "That's an interesting product. I want to get our hands on it. I want to see whether I can use it for my latest implementation, because I want really stateof-the-art technology. I don't really want to be a follower." 
    I think that is the change over the past three to five years. Another interesting one I can share is the data centre, including a few in APAC. 

What kind of cuts have you seen in IT budgets and how do you approach the situation? What kind of offerings do you give to your partners and clients at a 
time like this? 
I don't think we will go back to the heydays when IT budgets could be increased every year. I believe that every company has to be responsible for the product line and they have to manage their IT costs very carefully today. Recently, one of our clients — a major bank in Australia — migrated from the whole mainframe environment to (Oracle's) Exadata. By doing so, they significantly reduced the number of storage machines they need to use. They also saved a lot of cost on space and power. Now all that can be put as savings, which goes back into investment. So, I think that's the way it will be going forward. You have to look at how you innovate, trim down some of the costs and shift it to a thing where you can do some new business. 
    (The correspondent was in San Francisco on an invitation from Oracle Corp)

Steve Au Yeung EXECUTIVE VP (APAC), ORACLE CORP


Monday, October 22, 2012

MMRDA decisions to benefit RIL

Mumbai: Mukesh Ambani's Reliance Industries Limited (RIL) might turn out to be the biggest beneficiary of certain decisions taken by the chief minister Prithviraj Chavan-led Mumbai Metropolitan Region Development Authority (MMRDA) on Monday. 

    On the basis of RIL's request, the authority agreed to grant the firm an additional two years to complete the construction of a multi-level underground car park on a 37,252 sq m recreation ground in G block at the Bandra-Kurla Complex (BKC). 
    Under lease conditions, construction work on the plot, allotted to RIL in 2007, was to be completed by July 17, 2011. The MMRDA had collected from RIL a Rs 50-crore bank guarantee, which was to be encashed for breach of the four-year norm. 
    RIL would be required to furnish a fresh guarantee to continue work in that event. 

    On July 15, 2011, RIL requested the MMRDA to extend the bank guarantee and give it time till July, 2014 to finish work. It said a court matter relating to an adjoining 75,000 sq m plot, also leased to it for a convention centre and exhibition centre and commercial complex (CEC), impacted work on both the plots. On Monday, the MMRDA granted RIL's request. A decision to relax norms for the level and the size of underground car parks could also bene
fit RIL, sources said. On the basis of demand from the BKC property owners' association, the MMRDA decided to do away with the restriction that a car park could extend to a maximum of two levels and that premium (5% lease rent) is to be paid for construction beyond two times the plinth area. Asthana said this would encourage creation of more car parks. 
    Meanwhile, RIL, along with 12 to 13 other lease holders, may not require to pay the penalty in the form of additional premium for delayed CEC construction with the MMRDA relaxing the norm for completion of construction work from four to six years. 

    RIL is yet to acquire a commencement certificate (CC) for the work and is into its third year. As per the existing condition, it would have had to pay a penalty of 120 crore for each delayed year. 
    "The FSI in BKC was increased which led to increase in size of construction. Delays in environmental and high rise clearance also hit work for a number of plots," Asthana said. The new norm will be applicable for all existing leases where the four-year period is yet to be completed and for new leases. "Penalty will be collected in cases where the fouryear period has elapsed," Asthana said. The authority also decided to initiate the process for allotment of surplus 54,000 sq m area in the "E" block to existing lease holders.

Saturday, October 20, 2012

FOR THE RECORD INDIA DOESN’T NEED FDI IN RETAIL TO GROW

One of the few economists who predicted the financial crisis of 2008, Nobel Laureate Joseph Stiglitz is also credited with starting the "1% versus 99%" debate. The Columbia University professor talks to Shobhan Saxena about his latest book, "The Price of Inequality", in which he argues that economic inequality leads to instability 


In your book, you argue that an equal society is more efficient and productive. How does inequality destroy productivity and create instability? 

• The title of the book reflects a view that counters the right-wing argument that inequality may be a bad thing but to do anything about inequality is to kill the goose that lays golden eggs. Inequality is bad for economy, democracy and society. Much of the inequality in the US arises out of rent-seeking —monopoly, exploitive practices by banks and corporate exploitation of public resources. In the Indian context, you will call it corruption but we call it corruption Americanstyle, where you give away natural resources below market prices. India is doing it now but America has a long history of doing this. 

    There is a clear association between inequality and instability. People at the top don't spend too much, they save a lot but people at the bottom spend everything. So you redistribute income from the bottom to the top and demand goes down. That makes an economy weak. That is what happened in the US. We would have had a weaker economy, but the 
Feds stepped in by creating a bubble that created more demand to offset the demand that was going down. Of course, creating a bubble was creating instability. 
The financial crisis that started in 2008 is still continuing but it seems nothing is being done to check inequality... 

•Both the IMF and the UN commission that I chaired came to the conclusion that inequality was one of the major causes for the crisis. It is not the direct, precipitating cause that bad lending was, but bad lending was a result of deregulation and the interest rates that were itself a result of inequality. If we don't improve inequality and don't do something else, it is going to be hard to get back to robust growth and prosperity. We are likely to have another housing bubble. 
In the US, there is a lot of anger against Wall Street but in the presidential debates none of the candidates have mentioned the word 'inequality'. 

• American politics is money-intensive and money-driven. Each of the candidates is expected to spend a billion dollars. 
When you spend so much, you have to go where the money is, and money in America is at the top. Therefore it is not a surprise that in the campaign you don't hear a lot of discussion about inequality and the 1%. You don't bite the hand that is feeding you in the middle of an election. 
Will the debate over '1% versus 99%' last or is it just a phase? 

• It will be a part of America unless we address inequality. It is just not that the top 1% get three to four times more that what they got in the 1980s, but the middle class today is worse off. When you have this degree of stagnation in the middle, there will be an expression through the political process. 
You say that GDP is not the right way to measure a country's real strength. In India, we talk too much about our growing GDP. Is that a mistake? 

• I haven't looked at India exactly, but it has strong implication for every country. In the case of China, if you take into account the environmental degradation and resource depletion, growth is much less than what it seems. You need that debate in India. Your GDP is going up, you have per capita highest number of billionaires but at the same time you have many people in poverty. So the GDP per capita doesn't capture what is happening. In India, the progress in the middle and at the bottom has been less than what GDP in itself would like you to believe. 

What impact will FDI in retail have on the Indian economy? 

•The advocates of FDI have probably put too much emphasis on it. India is in a different position than a small, developing country. You have a large pool of entrepreneurs. They are globally savvy, have access to global technology and they have a lot of wealth. So, if there were large returns to large-scale supermarkets, the domestic industry would have supplied it. Not having access to FDI is not an impediment in India. Wal-Mart is able to procure many goods at lower prices than others because of the huge buying power they have and will use that power to bring Chinese goods to India to displace Indian production. So the worry is not so much about the displacement of the small retail store but displacement further down the supply chain. 
But big chains may create more jobs. 

•Some of the profits of companies like Wal-Mart come from free riding on our society. They don't provide healthcare benefits and assume that the spouses of the workers get healthcare benefits from their other employees or through some other mechanism. They might not be a good employer.


India awaits Kodak moment at TN N-plant Power From Kudankulam By Nov-End

New Delhi: India is set to cross a major hump in its nuclear power programme with the Kudankulam plant expected to generate power within a month after it goes critical in the next 10 days. The first unit of the Russianbuilt nuclear plant is close to a landmark moment, after post-Fukushima public unease, powerful alliance of church groups and activists threatened to thwart India's ambitious plans to build 20 plants in the 12th Plan. 

    Tamil Nadu CM J Jayalalithaa is backing the project that will ease the state's power deficit. And after the Supreme Court's scrutiny of the $3 billion plant's safety features, the government is anticipating a Kodak moment when turbines begin to turn at Kudankulam. 
    Successful commissioning of the Kudankulam unit will help translate the promise of power into tangible 
benefits that the government hopes will help sway public opinion, particularly in the plant's neighbourhood. It will also pave the way for faster work on nuclear plants planned at Maharashtra's Jaitapur and Haryana's Fatehabad. 
    India hopes to generate 63,000 MW through nuclear power by 2032, with Prime Minister Manmohan Singh giving a big fillip to the atomic component in electricity 
generation in the wake of the Indo-US nuclear deal and lifting of trade sanctions by the Nuclear Suppliers Group in 2008. 
    Apprehensions of the plant's environmental impact among local fishing communities will need to be further assuaged, but the plant is inching towards completion after activists, opposed to nuclear energy in totality, held the project hostage for months. 

Liability law must meet global standards: US 

New Delhi: The Indian nuclear liability law continues to cause problems, with the US saying that it does not meet "international practices". William Burns, US deputy secretary, told TOI, "As India moves ahead towards ratification, we believe it is important to try to ensure that India's practices are consistent with international standards. Again, that is not a favor to the United States or anyone else, because it is going to be in the self-interest of India's development in that field." TNN



Sunday, October 14, 2012

Cap likely on Mhada rehab house size

Mumbai: The state government may modify norms to increase the size of tenements for people residing in old and dilapidated Maharashtra Housing and Area Development Authority (Mhada) buildings which go in for redevelopment. 

    To get rid of excessive bargaining and unfair practices used by developers to lure societies, Mhada is toying with the idea of introducing a cap for the maximum size of rehabilitation tenements for such projects. 
    The move will influence redevelopment plansof close to5,000societieswhichhouse over 1 lakh people. 
    The governmentoffers an FSI of 2.5 for redevelopment of such societies under section 33(5) of the development control regulation. 
    The government has plans to consider 484 sq ft as the maximum flatsizein case of low-income group (LIG) projects. This could grow to 600 sq ft in the case of middleincome group projects. 
    With no maximum eligibility cap at present, societies have often fallen into the trap of dubious builders who promise unreasonably high tenement size for rehabilitation flats. Unable to meet the demand later, a number of 
them have abandoned projects leaving residents high and dry. 
    Chief Minister Prithviraj Chavan said last week about 30% of 530 such projects where permission for redevelopment was granted were yet to see any work done. The restriction on the tenement size will also provide a level playing field, sources said. 
    Builders have no reason to complain as the move will resultin an increasein theincentive FSI offered to them. According toexisting norms, a builder gets an incentive FSI of 300 sq ft for each rehabilitation tenement in the case of LIG projects. The incentive FSI is used for the sale component of the project.If thecapof 484sq ftisintroduced, even the incentive offered will rise proportionately, a source said. 
    The government is likely to retain the condition which requires a builder to share the surplus built-up area (that remaining after accounting for the rehab and incentive component) with Mhada in a 33:67 ratio. A proposalof paying thedeveloper construction cost for the built-up tenements surrendered to Mhada and letting him pay premium at ready reckoner rates for his share is under consideration.

Saturday, October 13, 2012

Nomura India Index to Help You Face the Googlies in Eco Data

Nomura Securities launched an index that will capture the wild fluctuations in Indian economic data that will help traders in securities markets to know the direction. The new index known as Nomura Economic Surprise Index for India will comprise variables such as the Gross Domestic Product (GDP), industrial production, Purchasing Mangers' Index (PMI), bond, currency and equity markets. 

"The index essentially captures the extent of surprise in economic data with respect to market expectations," said said Aman Mohunta, economist, Nomura Securities. "They are important because markets react to surprises in economic data in relation to expectations, rather than the actual data, and the trend in surprise could help in assessing the market movements." Traders have been handicapped by sheer surprise thrown by Indian data as they differ wildly from the reality. Thus, it even drew the criticism from the Reserve Bank of India. Many times the actual data is far higher or lower than what analysts expect, leading to wild fluctuations in the market. Nomura measures the data surprise as the difference between the actual data release and market expectations. For market expectations, it uses the median of Bloomberg surveys. In cases where Bloomberg expectations are unavailable, such as the PMI, it takes the 3-month moving average as the market expectation. It then aggregates the different standard scores into one numerical value for the period, calling it an aggregate Z-score. It assigns equal weights to all the variables to calculate the aggregate Z-score. 
A reading below zero indicates that economic data are surprising negatively, while a reading above zero suggests data are surprising positively. History shows that stock, bonds and currency markets move in the direction of the index with a lag, though with a different magnitude. 
gayatri .nayak@tiemsgrou.com 


Thursday, October 11, 2012

CM cracks whip on errant developers

Mumbai: Thestatehasdecidedtotake action against developers involved in over 100 redevelopment projects in the city. CM Prithviraj Chavan on Thursday said strict action would be initiated against developers who failed to undertake redevelopment projects within stipulatedtimeon Mhada land. 

    While Chavan said that the nature of the action wasbeing decided,senior officialssaid it could be in the form of revocation of redevelopment permissions. Referring to a decision on granting additional FSI for the redevelopment of old Mhada buildings by levying a premium, Chavan said it was not in linewiththebasic principlebehindsanctioning the additionalFSI. 
    In 2008, the state urban development (UDD) department approved a proposal to grant an FSIof 2.5for such projects.The additional FSI could be availed either by paying a premium for the increased portion of the FSI or by sharing the built-up portion of the surplus FSI (FSI remaining after deducting the rehab portion and the developer's incentive for rehab) in a 2:1 ratio between Mhada and 
thedeveloper. 
    Understandably, the premium option got maximum hits. In fact, out of 530 projects approved, 511 were under the premium option. "The main idea behindtheFSIhikewastoimprove quality of housing for tenants and generate affordable housing stock from the surplus FSI. This was lost by offering the premium option," Chavan said.He addedthat the move was either taken without any ideologicalbasisor wasdriven by vestedinterests. 
    Sources said that an exercise to find out who was responsible for the introduction of the option was ongoing. While the UDD claims that the original Mhada resolution for the FSI grant contained the premium option, housing department sources claim it was introduced at the UDD level. Chavan said work was yet to begin in about 30% of the 511 projects approvedunder the premium option and said action would be initiated in such cases. The government discontinued the premium option in September 2010. 
    On Thursday, Chavan held a meeting of elected representatives to discuss the Mhada redevelopment issue. Following the meeting, sources said the state could alter the redevelopment model. While continuing to insist on built-up share, it is considering the option of either linking it with the market value of the area or reduceitsshare.Ithas planstospecify a cap on the rehabilitation area to weed out the practicewheredevelopersluretenantsby promising unjustified areas. Chavan said a decision in this regardwas "long overdue".

Wednesday, October 10, 2012

UPBEAT Slowdown May’ve Bottomed Out HDFC Ups Forecast; Yes Bank & BoB May Follow Suit


    Forecasts by independent economists suggest that the slowdown in India's growth may have bottomed out. HDFC Bank has upped its forecast for the next fiscal year while Yes Bank and Bank of Baroda are expected to do so soon, indicating that though there may not be any visible improvement, the outlook for next few quarters has improved. The government initiated reform measures last month to shore up finances and boost growth. The move improved sentiment and perked up the markets. 
HDFC Bank has revised its forecast for 2013-14 to 7-7.5% from 6.5% estimated earlier, even as the International Monetary Fund (IMF) lowered its forecast for the 2013 calendar year to 6%, from 6.5% earlier. "While the big bang reforms have no doubt lifted sentiments, it will take some time for this to translate into action on the ground and for new investments to actually kick in… we are retaining our FY13 forecast at 5.5%-5.7%, but now see FY14 growth at 7%-7.5%, against 6.5% previously," the bank said in its September note. 

The revisions are largely based on expectations of greater overseas capital inflow, reined in fiscal deficit and buoyed market sentiments after the government opened up the insurance, retail and aviation sectors for foreign direct investment and took the politically-sensitive decision of raising diesel prices. 
"These measures are hugely welcome and will benefit the economy in the medium term. Although we expect inflation to be sticky, we are looking at improved overall scenario and will be revising our estimate for the next fiscal to 6.5%-7%, up from the 5.5% estimated earlier," said 
Subhada Rao, chief economist at YES bank. YES Bank has kept its FY13 GDP forecast unchanged at 5.7%. 
According to official data, the economy expanded only 5.5% in the first quarter of the current year, marginally up from the nine-year low of 5.3% in the previous quarter, triggering a wave of forecast downgrades that put the entire year's growth at about 5.5%. 
In a recent survey conducted by Bank of Baroda, 48% of the respondents said the reform steps announced by the government recently had had a positive impact on sentiment. The bank is confident of a decent increase in credit demand in the next half year coupled with some reduction in lending rates. 

FUNNY BUSINESS 

An economic forecaster was known to have an horseshoe prominently displayed above the door frame of his office. Asked what it was for, he replied that it was a good luck charm that helped his forecasts. But do you believe in that superstition? he was asked, and he said, "Of course not!" But then why do you keep it? "Well," he said, "it works whether you believe in it or not."

‘Indian IT Spend to Grow 7.7% to $72 b in 2013’


While the IT spend is coming down globally, India Inc, which has for long been outsourcing shy, is looking forward to take another leap with new technology themes like cloud, mobility, social media and analytics. According to technology researcher Gartner, Indian IT spending is projected to reach $71.5 billion in 2013, growing 7.7% from the $66.4-billion forecasted for 2012. "India, like other emerging markets, continues to exercise strong momentum despite inflationary pressures and appreciation of local currencies, which are expected in rising economies," Peter Sondergaard, senior VP and global head of research firm Gartner, said. 
"Despite flat IT budgets in global and domestic markets, Indian IT firms are growing because they are seeing growth in new sectors and verticals. Companies are looking at collaboration and digitisation," Soundergaard added. 
Telecommunications spend is projected to be highest at $47.8 
billion, followed by IT services and hardware. The hardware segment alone will account for 14.1% of all IT spending in India by 2016. "Mobile phones will continue to be the fastest-growing (42%) space within the Indian IT market. It will also account for nearly 26% of the overall IT spending," said Partha Iyengar, head of research – India, Gartner. 
In a survey, Gartner found that a majority of the CEOs believe IT will make a greater contribution in their industries in the next 10 years, and are willing to raise their IT investment. Covering the new tech themes — social, mobile, analytics and cloud — Gartner predicts by 2015, 10 organisations will each spend over $1billion on social media, while in mobile space, 20% of sales organisations will use iPads as the primary mobile platform for their field sales force. In big data and cloud space, over the next four years, 30% of organisations will hire chief data officers, while the cloud market will double in size to nearly $145 billion for business process services.

Tuesday, October 9, 2012

One in five Indians needs mental health counselling


Mumbai: One out of five people need counselling at least once in their lives. What's more, about 6% of people need medications for mental health problems. 
    According to the government's statistics, 20% of Indians need counselling at some point of their lives. One per cent of the population suffers from serious mental health 

disorders, while 5-10% of Indians suffer from moderate disorders. 
    The figures have prompted the BMC to not only acknowledge mental health problems, but also come up with a multi-pronged proactive approach for the first time to tackle the problems. By December this year, the BMC will start a 
'Life is beautiful' helpline in a public-private-partnership. 
    The proposal for a helpline was discussed last year, but failed to take off. 
    "We will hold a meeting on Wednesday to revive the helpline plan," said Manisha Mhaiskar, additional commissioner (health). "Studies say that the
re is a golden period before a person commits suicide, wherein, if he/she talks to someone about the problem, a suicide can be prevented. With this idea in mind, we want to create a helpline under a public-private partnership, which will counsel those contemplating suicide," she said. 'Increased social alienation results in depression' 
    Dr S h u b h a n g i Parkar, head of the psychiatry department at KEM Hospital, said that the prevalence of mental health issues ranges from 10 to as many as 370 people per every 1,000 population in various parts of the country. 
    "We as a society are going through this phenomenon of urbanization and industrialization. While earlier our society was an integrated one, we are now seeing alienation on a large scale. It is because of this that so many people suffer from depression and subsequent mental health problems," she said. 
    In fact, depression, the commonest form of mental illness, is prevalent in 30.7 out of 1,000 people in urban areas like Mumbai, according to psychiatrists. 

    Moreover, neurotic depression, a mood disorder consisting of chronic depression with less severe but much longer lasting symptoms, is believed to be preva
lent in 22.8 people out of every 1,000. 
    Psychotic depression, a more serious form of a mental illness, that may actually require hospitalization, is prevalent in 7.8 out of every 1,000 people. 

    Besides, in order to integrate mental health care along with general health, the BMC plans to train medical officers for primary counseling of depression patients. 
    "Before this financial year is over, at least 26 of the 161-odd civic dispensaries will be equipped with counseling centres. We will soon start training medical officers to enable them to perform the primary counselling. These dispensaries will in turn be connected to tertiary care hospitals like KEM, Sion and Nair Hospitals, where the patients can be sent in case any serious problems are detected," said Mhaiskar.





Sunday, October 7, 2012

India a global analytics hub as cos dig for data

Corporates Use Info To Study Consumer Behaviour, Plan Marketing Strategy


Bangalore: Most Indian parents push their children to do well in mathematics. That push is now paying an unexpected dividend. India is becoming one of the big global hubs of analytics, a field that has math and statistics at its core. And everybody from MNCs to Indian startups is tapping into this capability. 
    Analytics is becoming important globally thanks to the explosion of data. Corporates have their internal data, but increasingly, they now have to deal with related external data, coming from social media, blogs, image and video sites, sensors and more. Companies have to find all that is being said about them in these spaces, organize this data deluge, generate insights, make predictions, and finally produce recommendations for action. 
    "Corporate leaders today need to know more than how to run a data warehouse or build a dashboard. There is demand for people who have that uncanny knack of knowing which metrics are valuable for the organization they serve," says C K Guruprasad, search consultant for the technology practice at global executive search firm Heidrick & Struggles India. 
    Pradeep Nair, director in IBM India's software group, uses the delightful example of Pele to explain the new analytics phenomenon. Dribble skills in football, he says, is something that many players have. "Pele had in addition this uncanny ability to know where the ball would be before it got there. Now companies want that kind of capability," he says. 
    Analytics solutions involve technology, as also human intervention to further refine the results that technology provides. IBM, which has a major analytics centre of excellence in India that services the globe, recently announced that its analytics is enabling Jet Airways to accurately calculate, track and report aircraft emissions, and optimize its fuel usage by detailed analysis of each flight. HCL Technologies is creating a digital lobby for an MNC bank that can track what account holders are 
talking about it on Facebook and LinkedIn. This will help bank staff to serve their customers better. 
    IBM, Accenture, Genpact and the big Indian IT companies all have fairly broad analytics practices today. Numerous startups too have emerged, with proprietary analytics technologies and methodologies. Startups tend to be more focused. 
    Mu Sigma focuses on marketing, supply chain and risk analytics. AbsolutData, founded by Indians in California but which has its delivery centre in Delhi, helps optimize marketing spends and fine tune marketing strategies by analyzing customer behaviour. 
    Fractal Analytics, also founded by Indians in California and with its delivery centre largely in India, focuses on building customer loyalty and reducing waste in corporate operations. 

Among its many successes is one where it helped a customer to establish the right level of unit price discounts needed to influence shoppers to purchase more expensive large product packages and thus increase total sales for these product categories. 
    iCreate is today a wellknown name in banking analytics. So is Manthan Systems in retail. Manthan develops analytics solutions for global retailers like McDonald's and Lowe's to understand things like where to locate stores, how to lay out stores, which items to keep in each store and which items are best kept together. 
Capillary Technologies, also in retail analytics, focuses on capturing a customer's profile and purchases to make appropriate offers at appropriate times. 
    Nabler analyses digital trails left behind by people through their activities on websites to help companies understand their customers better and improve their product offerings. Activecubes provides analytics services in areas such as sales, marketing, supply chain, operations, and risk management. Redwood Associates has an online analytical job product called Look Beyond Resumes that allows job seekers to understand what they are best suited for, and corporates to understand which candidate is the best fit for a vacancy. 
    In 2010, India is estimated by Avendus Capital to have delivered $375 million of the total data analytics outsourcing of $500-550 million. Avendus estimates a talent shortage of 140,000-190,000 professionals with analytical capabilities in the US by 2018, representing about 40% of the total demand. "This talent supply gap will create a $20 billion offshore opportunity," says Amit Singh, executive director in the financial services provider. 
    Venkat Viswanathan, CEO of Chennai-based analytics company LatentView Analytics, says the growth in analytics in India is thanks to the IT sector. "Though Eastern Europe and China are attractive locations for analytics talent, companies are familiar with India's IT prowess, and hence look up to us to deliver analytics solutions," he says. 

LOOKING FOR EDGE 
äOrganizations that apply analytics to data for competitive advantage are 2.2 times more likely to substantially outperform their industry peers 
äCompanies adept at analytics enjoy 1.6 times more revenue growth, 2 times more profi t growth and 2.5 times more stock price appreciation than their peers



Friday, October 5, 2012

Global and in Fortune 500, but Powerless

India's three oil marketing companies are all in the Fortune 500. But they have little real power because of fuel price control. And ironically, even price reform comes with its own problems, says Rajeev Jayaswal



    On the face of it, the chairman of India's top-ranking Fortune-500 company should be a powerful man, taking key business decisions to make his firm expand and prosper. In reality, Indian Oil Corp Chairman RS Butola has virtually no powers. He has no control on the price of bulk of his products; he cannot fire, or even hire, at will; he is forced to set up loss-making retail outlets, and has helplessly seen his company's borrowings rise to a staggering 90,000 crore – not to invest in new projects but to keep operations going in the face of heavy losses. He also needs to motivate young engineers and finance specialists, who learnt in their colleges that the more you produce and sell, the better it is for your employer. At IOC, Hindustan Petroleum and Bharat Petroleum higher sales mean a bigger drain on the finances, and higher borrowings. Their troubles stem from quirky government policies on fuel pricing, which make an oil giant bleed by selling diesel at a loss in the hope that voters in assembly elections would be happy. The ploy did not work in key elections but oil companies have been pushed into the red. 
Even Decontrol a Problem 
Even for petrol, which was de-controlled by the Cabinet, chairmen of oil firms shudder to tinker with its prices without a verbal go-ahead from the ministry. To make matters worse, the finance ministry does not compensate them for revenue losses on petrol because the fuel is technically de-controlled. Butola says the government should formally control petrol prices again. A director in a Mumbai-based refiner agreed. "In any case we can't raise petrol rates without informal approval of the oil ministry. Had it been a regulated product like diesel, we could have claimed compensation," he said. Many in the industry say these companies, are professionally run and they ensure smooth fuel supply in every part of the country, including the remotest regions. Their misfortune came after the Administered Price Mechanism was dismantled with an objective to help them, and this was reflected in their share prices going up in 2002, said RS Sharma, former chairman of Oil and Natural Gas Corp. But Sharma fears that the oil giants are on a runway to disaster. "Distorted pricing policy has brought disaster. It is slowly and steadily eroding their value. If urgent steps are not taken now, I won't be surprised if they also turn Air India way," he rued. The pricing policy has distorted the automobiles market as consumers are switching rapid
ly to diesel cars. It has also distorted the finances of oil marketing companies. HPCL's debt-equity ratio is 9.8:1 and its networth has shrunk to 3,874 crore on Jun 30 from 13,123 crore in March, a company official said. Their combined borrowings have risen to 170,000 crore from 127,000 crore in March. Debt of IOC alone touched 95,000 crore in September. The combined net loss of the three companies in the first quarter of current fiscal year is over 40,500 crore, which includes IOC's highest-ever quarterly loss in India's corporate history. Companies are expected to report losses even in the second quarter if the government does not compensate them, company executives said. Last year, state compensation helped them report a combined annual profit of 21,000 crore after posting losses in the first two quarters. 
Waiting for Bailout 
Rating agencies have not given them junk status. "Because rating agencies know that the government will finally bail us out," a director in HPCL said. But a government bailout looks difficult. The budget provision for 2012-13 to compensate IOC, BPCL and HPCL for losses in fuel sales has already been used to bridge last year's revenue gap. Companies will have to wait for compensations till supplementary grants are passed by the parliament, possibly in the winter session. Oil firms got some respite last month when the government announced the highest-ever increase in diesel rates and cut excise duty on petrol by 5.30 a litre. Earlier in May, oil firms stunned motorists by raising petrol prices by 7.50 per litre. 
Back to the Future? 
Top company and government officials say refiners urgently need resources to expand capacity to meet the country's growing energy needs. "We need decent profits so that we can invest in capacity expansion. Demands for petroleum products is growing and additional capacities are required to meet growing demands of the economy," Butola said. There have been questions in the parliament that oil companies are manipulating revenue loss figures, also called under-recovery, to make huge profits. There are demands that companies should be allowed fixed rate of return. State oil companies say they would welcome a fixed return instead of battling with the politics of fuel pricing and uncertainty about government compensation. 
rajeev.jayaswal@timesgroup.com 




IMF pegs India growth lower at 6%

Berlin: The International Monetary Fund will lower its forecasts for global economic growth to 3.3% this year and 3.6% in 2013 from earlier forecasts of 3.4% and 3.9%, respectively, a Germany newspaper reported on Friday. 

    The IMF expects the Eurozone economy to shrink by 0.4% this year and then grow 0.2% in 2013, business daily Handelsblatt said in a preview of the fund's latest forecasts which are due to be released next week. 
    Chinese growth for 2013 is seen at 8.2%, versus a previous IMF estimate of 8.4%, Indian growth is seen at 6% versus a previous forecast of 6.6% and Brazilian growth at 4% versus 4.7%, the newspaper reported. 

    "The further cooling of global economic growth this year and next year is accompanied by a significant increase in downward risks," it quoted the IMF as saying. It added that the global growth outlook depended on "whether decisive political steps to stabilise confidence are taken in the Eurozone and US. " REUTERS

What is holding back India's growth story? Experts discuss



The key theme of the latest edition of the British weekly The Economist is that India's growth prospects in the coming decade is nowhere near the 10 per cent growth that was assumed until recently. India's potential growth is probably close to half of that, which is the current 5.5 per cent.

While some of the slowing is due to global issues, the edition argues, much of the pain is largely self inflicted with politicians who won't reform unless pushed to the wall because of the Indian business class who prefer to bribe their way to corner national resources, because of the high cost infrastructure and woefully inadequate education system.

The author of the piece, Adam Roberts of The Economist along with CNBC-TV18's panel of experts consisting Professor Yogendra Yadav, the renowned political scientist and psephologist from the Center for the Study of Developing Societies, Dr Shankar Acharya, well known economist and former advisor to the Finance Ministry and R Gopalakrishnan, Director-Tata Sons, discuss Adam's charges.

Below is the verbatim transcript of the interview

Q: Tell us briefly what is your charge? Do you expect this to be the decade of disappointment?

Roberts: The argument in the report is that India is aiming too low. India doesn't have the ambition, the aspiration to go for a high growth economy. It has failed to take the steps needed to take in the last seven or eight years under this government to drive that high growth. Obviously, it is bad news that the world economy has slowed and there are all sorts of unfortunate influences from outside of India, but most of the problems that India faces today are self inflicted. They are caused by the politicians of the ruling party, but also the opposition and other parties failing to get to grips with the reforms that India needs.

We would argue that the reforms that were passed or announced a couple of weeks ago by the Prime Minister and that caused the big political fallout, the storming out of Mamata Banerjee, were welcome but are very small. Those reforms, putting up diesel prices, letting in foreign supermarkets that will make some difference to India's growth story is nothing substantial enough to drive big substantial growth in the next decade or the next two decades.

The political fallout from those limited reforms is very telling. If it is doubtful that this government can really do something more radical than it has announced so far then you have to ask the question of whether India would avoid a deep economic crisis in the coming year, is there going to be a downgrade of India's debt or a serious reduction in its potential growth rate in the long term.

Q: One of the charges that Adam makes is, India may be passing through an American style robber baron phase driven by commodity boom and a shift from a closed economy to an open economy. Gloomier commentators see an outright Russian style kleptocracy. Do you think that that is a very good description of India's political economy or large parts of it?

Yadav: Partly it is. It is because they are certainly equivalent of what may be called the primitive accumulation, which is happening by simply robbing people especially of natural resources. It is also true because there is a politician, bureaucrat, big business corporate nexus, which wants to grab resources without any procedures.

I don't find it completely accurate for the simple reason that unlike the two examples of Russia and the American phase, in this instance, in India, most of these scandals are coming out in open precisely because of certain things that have happened in the overall political institutional structures. We have the Right to Information Act, which has led to many of these disclosures. We have free and frank press which has brought these out and made political scandals out of it. Many of these scandals have emerged from the reports of the Comptroller General of India, which is a very welcome development of an institution which has stood up, not to mention the Supreme Court which has taken a strong position.

I think a fair position would require us to look at these scams not merely as an indicator of rising primitive accumulation or robber baron phase but also probably because they are more visible than before. Probably, there is more public anger than before and that probably distinguishes the Indian case from the American and the Russian case that he refers to.

Q: Apart from Adam, Raghuram Rajan, in his book, Fault Lines and several others who make the case that probably large parts of India Inc's wealth is really that of a 'rentier' that they have accumulated scarce national resources, be it spectrum, coal, mineral resources, even land and largely value added a little, but made a large amount of money because of the scarcity value of these national resources. Would you say that that is a large part of India Inc's wealth in the last 3 or 4 decades?

Gopalakrishnan: I am not able to agree that a large part of India's wealth creation from the industrial sector is coming through accumulation of natural resources, which are in short supply. It might be true to say so for the last few years, but certainly not if you take a 50 year's span of industrial development in India. I will say it is actually an inaccurate description unless you take a stock picture of what happened during the period of 2000 onwards when industrialists were better endowed with wealth and a lot of scarce national resources became available for industrial development.

If you think back to the 1900s whoever went to prospect for hydroelectric power for iron and coal mining were true pioneers. For at least 7 or 10 decades since then, it was very costly, and therefore, the question of saying they rob natural resources would be very inaccurate. If you look at the economic history of many countries, they all went through a robber baron phase. The robber baron phase is a bit like saying a human being goes through adolescence and it is something to take note of, it is something to be anxious about, but it is something to expect as natural. There are those hints in our economic development at this point of time, and that, I would agree with, has been the characteristic of the last decade.

_PAGEBREAK_

Q: There are a lot of questions about India's potential being nowhere near double digits. Do you think that because of the manner in which we have distributed national resources, we have wantonly led to a slow-growing infrastructure and a high-cost infrastructure? Would that charge be right that the very manner in which contracts are given out because of a nexus of bureaucracy and politicians, business infrastructure has become high cost?

Acharya: I think that's partly true. Certainly, as we know from the so-called Coalgate episode, it's mucked up the entire coal, electric power, energy kind of nexus quite badly. Not just the fact that coal block allocation has occurred the way it has, but also to some extent, the backlash, which has got things to a standstill. To some extent, that passion is repeated with regard to the 2G telecom scam where you had allocation going on certainly in a non-market and opaque way. I think these have made for problems, but we shouldn't completely exaggerate these issues.

If you take the telecom story in India, it really has been an extraordinary story. Now my worry is that because of the backlash to the 2G scam, things are going to happen, which will unnecessarily slowdown, what was otherwise, a very good story.

Q: What exactly do you understand by reforms? You say that India's politicians are averse to reform or are not congenitally reform-minded. They will reform only when pushed to the wall. What do you understand by reforms when you say not enough is done?

Roberts: We have seen from the history of reforms in India that the big reforms came in 1991 when India faced a currency crisis. We have seen some reforms since then, but in the last eight years or so, there have not been many reforms that have really driven the economic growth. I would say India needs to look at reforming its labour laws, to do more about land acquisition, to push on with its reforms of tax to get the free market deal with itself with the Goods and Services Tax sorted out.

There are a whole slew of factory reforms needed to allow investors to come in and build their factories to get their investment to be productive. What we are seeing at the moment are quite limited. It is about letting in some foreign investment into supermarkets and aviation, but that in itself, will not be enough to drive a rapid economic growth in the long-term.

Q: Would you say that it will be extremely difficult to get changes which perhaps China is able to manage more easily - urbanization changes, changes in property laws, a whole host of labour law changes, land acquisition changes. Are these far more difficult in India because politicians do not want to upset the apple cart?

Yadav: These are difficult. These are difficult in some cases because of self-inflicted injuries. There has been a terrible lack of poverty of political judgement that we have seen in the last three or four years. It is true that, in some cases, there is simply a lack of political will. At the same time, here are these nice recipes, which are waiting to be tried, and here are these politicians who simply don't know how to try it or don't have the guts to try it. I think it is inadequate. I would like to add to this a simple understanding.

Firstly, the idea that all the reforms are unmixed blessings for India is something which has actually not been proven by evidence. There is a need to differentiate between different kinds of reforms, those like the GST which are unmixed blessings, have to come and need to be pushed. You need to generate public opinion for those like reduction of subsidies, and for those like privatization of various kinds, the experience has actually taught that this have not worked to the advantage of the people.

In this debate in reform versus populism, we need to differentiate between different kinds of reforms. We need to have greater appreciation of democracy and its natural constraints. The real crisis, to my mind, is in the ability to communicate to the people the benefits of these reforms if they indeed are beneficiary. This should be done not merely by words, but by being able to demonstrate to people that they actually do benefit them.

Why is it that even now 20 years down the line the only great reform story that we remember is 1991 when people were kept entirely in the dark? Where is that reform story where people were consulted, taken on-board and a democratic consensus was built? All I am trying to say is unless you have that democratic consensus building for which you don't need to take that insincere socialist territory nor do you need to take this backdoor, which bypasses the people, is what we need to do. This is where the existing leadership has failed. The failure is not to implement readymade recipes. The failure is to imagine better recipes, which can actually bring some goods to ordinary people in a visible way.

_PAGEBREAK_

Q: Do you think that India's potential is nowhere near 10 per cent, and in the rest of this decade, getting there will be near impossibility? What chances would you give that we will get out of this 5-6 per cent and go to even 8 per cent, which was possible in the previous decade?

Acharya: I don't think we can abstract these growth rate numbers from the reality that we are in. In a very kind of empty technical sense, yes, the Indian economy can grow at 9-10 per cent in a sustained way. It certainly did for 6 or 7 years, as we know, last decade despite global conditions. Maybe it can grow it can grow at 8-9 per cent if everything else works. But I don't see the sort of political framework, in a broad sense, being supportive of the kind of reforms that are necessary.

You take them sector-by-sector be it fiscal consolidation or rational approach to the great challenge of urbanization that we face, or reforming our broken down education sector, whether it is about reforming our broken down electric power, and more broadly energy sector. I don't see the ability of Indian political formations at present to come behind in a strong enough way to push these things forward with the degree of sustained coherence and strength that is required.

If one looks ahead for the rest of this decade, it's probably wiser at least to expect average economic growth to fluctuate somewhere in the band between 5-7 per cent. If a lot of these good things what Yogendra Yadav calls 'recipes', I wouldn't use that term, I think they are just good economic policies are somehow able to be implemented, you can grow at 7-8 per cent perhaps even 9 percent. But I don't see the prospects of that happening at all easily in the foreseeable future, and certainly not, with the kind of situation where have a general election coming 1.5 years from now. Most people expect that the kind of government that will emerge from that election will be more fragmented, not less fragmented than the one we have today.

Q: As an industrialist, what is holding back India's growth? And what can unleash India's growth potential?

Gopalkrishnan: To comment briefly on the points made by Yogendra Yadav and Dr Acharya, I see a lot of merit in the argument that not much reform has happened in the last 8 years, and yet, during the period 2004-2009, India grew well.

Frankly, nobody concentrated on the fact and there was no reform because the tide was rising, all the boats in the ocean rose and India also rose. So the nexus between actual significant reforms and the economic growth was somewhat broken during the period 2004-2009. Like all human beings, we thought we must be doing something right, which was wrong in effect. What has happened after then is the opposite and we think we are doing everything hopelessly. I think both these are flawed because the pessimist and the optimist have both got it wrong.

Reform has to be seen in totality. There is a formula for what needs to be reformed is well known. I find it easy to remember the five vowels 'aeiou'; 'a' for agriculture, 'e' for education, 'i' for infrastructure, 'o' for law and order and 'u' for universal heath and then you can expand for each of this.

There is another aspect to it, which I think Shankar Acharya referred to, which I would like to allude to as well. That reform that economists and business people tend to think is, is couched in a largely political framework. You talk of electoral reform or Centre-State relationship or judicial reform. These are not receiving any attention at all. CII has put out a paper on electoral reform, which itself is based on the reports done by the various committees that have been appointed. I think we are looking at a much broader agenda. This broader agenda cannot be accelerated during this phase of what I call 'adolescence' that we are going through. Therefore, I tend to agree stating the point in a slightly different way from Dr Acharya that perhaps that 5-7 per cent is not way off the mark.

The great thing about India is that it follows the Kensium dictum that we will do the obvious after trying all other alternatives and we are running out of alternatives. I think we are heading, I hope not, at catharsis but we are quick learners. I hope we are getting to a situation where all these aspects will be tied together. Maybe the next decade maybe not so promising, as we might have wrongly thought five years ago, but I am very optimistic that we will get it right.

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