VIEW FROM SILICON VALLEY Indian IT: Wake up and smell the opportunity

A few years ago, Wall Street Journal and Forbes published articles predicting the demise of Indian IT. I responded with an article that they were dead wrong. I said that the outsourcing market had a long way to go before it peaked; rising salariesand attrition rates were not a cause for long-term concern; and Indian IT would soon become a $100 billion industry. It did.      Now I am ready to declare the end of the line for Indian IT. There are new $100-billion market opportunities that could revitalize this industry. But from what I've seen, Indian executives seem incapable of steering their ships in the right directions.      It is not that Indian outsourcers have become less capable of servicing Western needs. It is that their customer base — the CIO and IT department — is in decline. With the advent of tablets, apps, and cloud computing, users have direct access to better technology than their IT departments can provide them. They can download cheap, elegant, and powerful apps on their iPads that make their corporate systems look  primitive. These modern-day apps don't require internal teams of people doing software development and maintenance. They are user-customizable and can be built by anyone with basic programming skills.      It takes decades to update legacy computer systems, and corporate IT departments move at the speed of molasses. So, Indian outsourcers have a few more years before they see a significant decline. They certainly won't see the growth and billion-dollar deals that have brought them this far.      The same advances that are changing the IT landscape are also creating new opportunities. For example, advances in robotics, artificial intelligence (AI), and 3D printing are making it cost effective to move manufacturing back from China to the US, Europe… and India.      Take the Baxter robot from Rethink Robotics. It has two arms, a face that displays simulated emotion, and cameras and sensors that detect the motion of human beings that work next to it. It can perform assembly and move boxes — just as humans do. It will work 24 hours a day and not complain. It costs only $22,000. This is one of many such robots.      AI is making it possible to develop self-driving cars, voice-recognition systems, and computer systems that can make human-like decisions. AI technologies are also finding their way into manufacturing and are powering robots such as Baxter.      A type of manufacturing called "additive manufacturing" is making it possible to cost-effectively "print" products. 3D printers can create physical mechanical devices, medical implants, jewellery, and even clothing. The cheapest 3D printers, which print rudimentary objects, currently sell for between $500 and $1,000. Soon we will have printers for this price that can print toys and household goods. By the end of this decade, we will see 3D printers doing the small-scale production of previously labor-intensive crafts and goods. In the next decade we may be 3Dprinting buildings and electronics.      These technologies are becoming readily available and cheap, but America's manufacturing plants aren't geared up to take advantage of them. Most don't have the know-how. This is where India's companies could step in. They could master the new technologies and help American firms design new factory floors and program and install robots. They could provide management consulting on designing new value chains and inventory management. They could operate and monitor manufacturing plant operations remotely. This is a higher-margin business than the old IT services. And Americans would cheer India for bringing manufacturing back to their shores — rather than protest it taking their IT jobs away. We are talking about a trillion dollar market opportunity.      India's technology companies can also develop sensor-based biomedical devices, cures for diseases by analyzing genome and health data, drone-based delivery systems, smart cities, digital tutors, and sensors to improve farming. Software and IT are the key to developing all these.      In my discussions with Indian CEOs, they all acknowledge the reality. They are becoming aware of what lies ahead. I have implored them to start retraining their people in the new technologies and develop new businesses and consulting practices. They listen, nod their heads, and go back to trying to close the disappearing software-outsourcing deals. They are shuffling deck chairs on the Titanic.  The writer is a fellow at Stanford Law School and director of research at Duke University FUTURE FRONTIERS: 3D printing offers a new opportunity to Indian IT companies

5 THINGS THE NEXT GOVERNMENT MUST DO

The last few years, characterized by corruption, policy paralysis, economic slowdown and job losses, is something not only the government and the industry but even the common man would like to forget. Given this background, we spoke to some thought leaders and captains of industry across sectors and asked them to identify five things which the next government should do to ensure that growth and development come back on track. Here's a peek into their minds…

ANAND MAHINDRA | CMD, MAHINDRA GROUP Measure social sector outcomes 1 
Articulate "Promise 2019": When companies formulate strategy, they clearly articulate a nearterm 3-5-year vision with clearly defined deliverables, not vague, long-term plans. So should the new government. We need to see a "Promise 2019", with metrics to measure performance versus promise (eg MW of generation capacity added, km of national highways constructed, etc). The government should then publish regular and transparent annual updates against these plans. 2 
Promote tourism as a multiplier and a mirror: At 6.6 million international tourist arrivals annually, India lags abysmally behind countries like South Africa (8.3 m), Taiwan (7.3 m) and Vietnam (6.8 m). A doubling of this number would not only generate an additional $17 billion in foreign exchange, but also have significant multiplier effects on employment. 3 
Measure social sector outcomes, not spend: Our policies today are input-focused, emphasizing 
the money spent in areas like healthcare and education. The emphasis must shift from resource availability to productivity measurement within the social sector. 4 
Kick-start investment cycle through infra push: 
The 12th Five Year Plan envisages investments 
of $1 trillion. Even so, India's investment cycle seems to be in a state of suspended animation. The government must motivate the private sector to act, by reigniting the belief that India can be a manufacturing powerhouse. Two specific examples – can the large land banks that the government has accumulated be put to quick use by setting up plug and play National Investment and Manufacturing Zones already envisaged under the National Manufacturing Policy? Secondly, can landmark projects like the Delhi Mumbai Industrial Corridor and the Bangalore Mumbai Economic Corridor be turbocharged to demonstrate to the world that investment in Indian infrastructure can indeed sow a 'field of dreams'? 
5 
Offer a "New Deal" to 
address India's Red challenge: Internal insurgency and the naxal menace pose the biggest threat to India's territorial integrity. It's essential to put maximum resources behind battling this. At the same time, a "New Deal" should be provided, not a cosmetic solution or a hollow promise but a deal that tackles the core ills besetting these regions — lack of education, healthcare, and infrastructure development.

DEEPAK PAREKH | CHAIRMAN, HDFC Focus on minimizing energy imports, pass crucial bills 
    The year-end always calls for introspection. 2013 has seen fewer wins and more misses. Yet consensus says next year will be better for India. There are many critical pending issues but one must recognize that positive initiatives such as Aadhaar, phased hike in diesel prices and the Project Monitoring Group must continue with the same momentum. Though the 'to-do' list of the incumbent and the future government is immense, some issues listed below are at a tipping point. 
1 
Energy security: Two-thirds of India's power is generated from coal. India 
holds the fourth largest coal reserves, yet faces shortages. Coal India's monopoly must go. The long-term policy focus is to minimize energy imports. If no serious measures are taken now, by 2030 India will cumulatively import energy of $3.6 trillion — twice today's GDP. We 
cannot afford this. 2 
Target FDI: Tapering is inevitable and the freshly garnered FCNR(B) deposits are of 
shorter tenors. We need more long-term equity investors like sovereign and pension funds. Only a friendlier business climate will encourage investors. Start by streamlining approvals with timelines. 
3 
Pass critical legislations: The passage of bills like GST, DTC and insurance is no 
longer an issue of political one-upmanship. They are imperative for the economy. These bills have been sufficiently debated. Those opposing will be viewed as anti-reform. Which political party should risk this? 
4 
Get going on disinvestments: Today, disinvestments are only used to narrow the
fiscal deficit and yet targets are rarely met. Reduce government stake in PSUs to 51%, offer ESOPs and restrict single shareholders' stake to 10%. PSUs will become more efficient and the government will get resources it needs for its financial inclusion agenda and raising its spend on education and healthcare. 
5 
Focus on the urban agenda: 40% of India's population is going to be urban by 2030 — a 
doubling of the current urban population. India needs many new cities with adequate housing, transportation and urban infrastructure. DMIC is India's most promising urban project. It must remain fast-tracked and supported in toto.

1 
Recommit to market reforms: The liberalization has brought economic growth. Yet, of late, there 
are pressures to go back to populism, redistribution of wealth and socialism. No doubt, there have been market failures. But government failures have been even bigger. We should recommit to market reforms. Social and political buy-in requires that corporations ensure that growth be inclusive. Social justice and market forces must work in harmony. 2 
Reinvent higher education: India has a very large young population. Yet, of the total number of 
people who should pursue higher education, only 18% actually do so. We must dramatically upgrade the quality and capacity of higher education through better collaboration between industry and academia; leveraging technology; public-private partnerships; stronger role of state governments in higher education; and others. 
3 
Reimagine healthcare delivery: India's healthcare system is in a major crisis. Infant mortality is seven times that of the United States. India has 63 million diabetics and 2.5 million cancer sufferers, the majority of whom will not get quality treatment. There is a severe shortage of doctors, beds, and medical facilities. We must declare that healthcare is a human right. In order to close India's enormous gap between healthcare supply and demand, there is an urgent need to scale up the practices of those Indian hospital exemplars that provide quality healthcare at ultra-low cost. 
4 
Transform infrastructure: A strong manufacturing sector is required to create jobs that can 
absorb millions of youth. The backbone of manufacturing is infrastructure. We must place very high priority on building the infrastructure that can provide world-class supply chain to fuel growth in manufacturing. 
5 
Embrace reverse innovation: 
Reverse innovation is any innovation first adopted in a poor country like India which subsequently can flow into rich countries. Innovating to solve the problems of the poor represents the biggest opportunity for Indian corporations and should be their number one priority. However, this a l s o presents some of the hardest techn i c a l challenges, where we cannot simply adapt solutions used in wealthy markets. We have to innovate anew. 
Push reforms, make healthcare a right VIJAY GOVINDARAJAN | PROFESSOR, TUCK SCHOOL, DARTMOUTH COLLEGE

N R NARAYANA MURTHY | CHAIRMAN, INFOSYS Parties must field non-political candidates in 2014 
    The year 2013 has been a disappointing one in many ways – low GDP growth rate; no progress in liberalization; very poor handling of a difference of opinion with an important ally; worsening of urban infrastructure; and a judgment by the Supreme Court that puts us back by at least 20 years. I can go on and on. My expectations from the new government are... 
1 
Courageous, visionary leader: 
I hope that the 2014 elections 
will bring a government with a fresh, youthful and confident mindset. If we can at least get a courageous, firm and visionary leader who will enunciate his or her vision to redeem the pledge of the founding fathers through internationally proven ways of reducing poverty, that will be enough. Rahul Gandhi's speech at FICCI and reports of Narendra Modi's track record in Gujarat raise our hopes. 
2 
Create jobs: The only way India can reduce poverty is by 
creation of jobs with decent disposable incomes. No country has solved the problem of poverty only through subsidies. Every country that has reduced poverty has done it by reducing friction for businesses to operate, export, grow and generate productive employment. 
3 
Perform: It is important for the UPA and the NDA to remember that performanceleads to recognition, recognition leads to respect, and respect leads to power. The only way India can become powerful in the eyes of the developed nations is through performance like China has done. 
4 
Field non-political candidates: 
Both UPA and NDA have to 
pick several non-politician candidates who have demonstrated performance in their current or earlier avatars. I know the corporate world a bit and let me name just a few examples – Nandan Nilekani, Deepak Parekh, Vindi Banga, Mohandas Pai, Yogi Deveshwar, Venu Srinivasan and K V Kamath. We have excellent people from other fields too. Ramesh and Swati Ramanathan are probably the best two brains in the country in election reforms and urban governance. 
5 
Integrity: We need our parliamentarians to demonstrate 
integrity of thought in educating themselves well on legislations, and discussing and debating them on their merits. We have waited 67 years for such integrity from our parliamentarians. I am an optimist. Therefore, it is never too late. 
    Happy New Year!

ADI GODREJ | CHAIRMAN, GODREJ GROUP 
Introduce GST, boost Saarc ties 1 Take quick and early decisions 2 Control the fiscal deficit, the balance of payments and the $/Re rate 3 Considerably improve ease of doing business in India 4 Introduce GST as early as possible 5 Improve relations with other Saarc countries

SACHIN BANSAL | CO-FOUNDER & CEO, FLIPKART Improve internet infrastructure 
    Being a part of the e-commerce industry, there are a few essential things I would like the new government to focus on: 1 
Uniform tax code: This will go a long way in clearing up a lot of ambiguity that businesses face today and 
help them expand and function to their potential. 2 
Special cells in govt depts: Start special cells within existing government departments that pave the 
way for entrepreneurs and small businesses to set up operations smoothly. These cells could provide assistance in the areas of registrations, payment gateways, infrastructure, etc — areas that are processheavy and require extensive bandwidth that smaller businesses find difficult to spare. 
3 
Focus on improving data centre infrastructure: SEZs for data centre operations, for example, would reduce the cost of running these centres within India. This, in turn, would provide relief to smaller companies who currently need to run their operations from international centres due to cost considerations. 4 
Boost tech infra: At an overall level, the government also needs to pay attention to strengthening the overall internet infrastructure in the country. This includes focusing on the rural broadband strategy, enhancing our mobile internet infrastructure, increasing the reliability, security and speed of the web (and, therefore, networked applications), etc. Steps have already been taken in this direction but there is still scope for a lot of improvement. 5 
Take India-centric view: Most importantly, the Indian government should take a fresh Indiacentric view of the architecture of internet infrastructure in India. They should work towards preserving the independence of the Indian internet users and taking steps to ensure their data security.

MARK MOBIUS | EXECUTIVE CHAIRMAN, TEMPLETON EMERGING MARKETS GROUP Overhaul tax code to reduce litigation 1
Encourage investments: We believe the government must slowly reduce the extent of public 
sector involvement in the economy and allow private enterprise to make investments. This could lead to an increase in productivity, growth rates and the currency should likewise strengthen. It is heartening to note that the government is finally taking steps to liberalize investments. However, that should not be done just to increase inflows, but also to enhance efficiency and productivity. 
2 
Overhaul tax and policy code: India needs to dramatically overhaul the policy/ tax code – which 
has resulted in a lot of litigation. That has undermined business confidence in the country. Though the government has taken some steps; a lot more needs to be done. 3 
Clarity on title rights: Ownership and transferability of assets should not be compromised. 
There should be earnest endeavour to ensure that bonafide land & property titles, mining leases, access to natural resources are not impaired in any manner through executive or judicial intervention. 4 
Greater voice for minority shareholders: The only way to truly revive capital markets is to make 
companies answerable to minority shareholders. The government and Sebi have taken many positive steps in this regard and protection of minority rights would ensure that all investors — retail and institutional — have greater faith in the market. 
5 
Facilitate management change on default: To move forward India should facilitate management and ownership changes in businesses that have willfully defaulted on their debt obligations. Capital is scarce and should be deployed with deserving management teams backing business plans and if that entails a management change, India should be willing to go down that route. The new RBI governor has made his intentions clear in this regard and now is the time for us to see him deliver on the same.

Traditional knowledge, culture can be patented Move To Benefit India In Safeguarding Rich Healthcare, Art, Crafts, Music, Architecture

Mumbai: Traditional Knowledge (TK) and Traditional Cultural Expression (TCE) reflecting a community's cultural and social identity, handed down generations, may soon be recognized as a form of intellectual property. TK and TCEs are innovations and creative expressions of local communities and products of creative intellectual activity, which need to be protected and safeguarded to prevent their misuse.      The move has a special relevance for India in its pursuit of protecting and safeguarding its traditional healthcare and rich cultural heritage, given the fact that it has faced such disputes in the past. Several patents based on Indian TK have been unduly granted to third parties throughout the world. Calls for the protection of traditional medical knowledge are often based on a number of cases involving misappropriation by unauthorized third parties, who have patented compoundsderived from traditional medicines without the prior consent of traditional medical knowledge holders, and without fair compensation. Examples of patents based on traditional Indian medicine have included the use of turmeric for healing wounds, the anti-fungal properties of neem, and a diabetes medicine made from extract of jamun. All three patents were subsequently revoked.      Other cases globally include that involving Maasai people of Kenya and Tuareg (also Touareg), a tribe which inhabit parts of North Africa. The word "Maasai" is used in connection with a range of goods (from Land Rover cars, to running shoes, to Louis Vuitton towels, hats, scarves and bags) as also in tourism and hospitality services, while Volkswagen manufactures the SUV Touareg.      Johannes Christian Wichard, deputy DG, World Intellectual Property Organisation, told TOI: "TK and TCEs may soon be protected as IP rights, just like patents or copyright, provided the negotiations in the IGC (Intergovernmental Committee on Intellectual Property and Genetic Resources) reach a consensus. We have observed cases of alleged traditional knowledge misappropriation all around the world. South Africa, Brazil, Peru, Kenya (involving the Maasai people), Australia and Indonesia are just some of the countries where the more famous cases come from. These cases involve a wide range of traditional resources, such as biodiversity-related knowledge, herbal remedies, folk music and indigenous  names and designs," he added.      The IGC is involved in negotiations to develop an international legal mechanism that would give traditional knowledge, genetic resources and traditional cultural expressions (folklore) effective protection.      Traditional art, crafts, music, medicine, designs, architecture and motifs, which may be in tangible or intangible forms, will be considered a form of intellectual property. Simply put, these are forms in which traditional knowledge and culture are expressed, communicated and manifested, and may include know-how, skill, innovation, practices and learning.      As such, it is not easily protected by the existing intellectual property system, which typically grants protection for a limited period to inventions and original works by named individuals or companies.      "India is recognized as a world leader in the fight against misappropriation of TK. India's Traditional Knowledge Digital Library (TKDL) has set an example for other countries to follow", Wichard said. To combat misappropriation of its TK, and in particular the rich heritage of traditional healthcare systems, the Indian government set up TKDL.      TKDL is a digitized record of previously published traditional medicinal knowledge, which has been made available to patent offices through non-disclosure access agreements in an effort to prevent the granting of erroneous patents. As such, it provides "defensive" protection (avoidance of IP rights granted to third parties) for TK that is already publicly available.      "While India has put in place an efficient system for combating misappropriation of TK in place, and a number of countries have adopted legislation to protect TK, there is an absence of a framework for the protection of TK at an international level. The text being negotiated at the IGC would provide for the sui generis protection of TK, through the granting of rights to TK holders," he added.PROTECTING RIGHT ON TRADITION      Several patents based on Indian traditional knowledge have been unduly granted to third parties throughout the world      Under the latest initiative, traditional art, crafts, music, medicine, designs, architecture and motifs —tangible or intangible — will be considered a form of intellectual property      Patents based on traditional Indian medicine have included the use of turmeric for healing wounds, the antifungal properties of neem, and a diabetes medicine made from jamun. All three were subsequently revoked      Other cases globally include Maasai people of Kenya and North African tribe of Tuareg (also Touareg) — 'Maasai' is used in connection with a range of goods (from Land Rovers to Louis Vuitton products and hospitality services while Volkswagen manufactures the SUV Touareg

Price rise has hit school fees the most since 2004 Up 433% In 9 Years Of UPA Rule

 The fact that inflation has been an area of concern for some years now is well known, but exactly what goods and services have seen prices rise most sharply? School fees, a CSO study shows, have seen the most dramatic spike over the tenure of the UPA, up 433% between March 2004 and March 2013. 

    The chart topper is quite ironic given the much-talked about Right to Education law enacted by the UPA. The CSO study tracks rural retail prices and shows school fees were Rs 48.7 per student on average in March 2004 and had risen to Rs 259.6 by March 2013. 
    Mango prices recorded the second highest increase, up 320% from about Rs 16 per kg to just over Rs 67 per kg on average over this nine-year period. Oranges (275%), black pepper (232%), beef (229%), and buffalo meat (228%) were the others at the top of the list. 
    Among more widely consumed items, mutton (210%), salt (182%) and moong dal unwashed (190%) have been others that have really burnt holes in pockets. Cigarettes too have on average become dearer by 188%. These are, of course, rural retail prices, so the actual prices and increases that the average urban Indian faces are likely to be different, in most cases higher. However, the broad trend is clearly unlikely to be very different between rural and urban areas. Rail fares down 7% in 9 yrs of UPA O n the positive side, some goods and services have seen prices stagnate or even decline over these nine years. Among them are postcards, inland letters and local railway fares. 
    The minimum rail fare for an adult has reduced from Rs 8.8 to Rs 8.1 in these last nine years, areduction of 7%. There has been no hike in inland letter cards, which cost Rs 2.50 in March 2004 and were priced at the same level in March 2013. Postcards too have seen their price remaining unchanged at 50 paise each. 
    The average price of a transistor radio was Rs 421 then and has risen to 481 – a modest rise of just under 10% in nine years.

India, US clash over BKC rally’s security threat

New Delhi: India has rebuffed attempts by the US to raise security concerns over Gujarat CM Narendra Modi's rally in Mumbai on Sunday, saying that ensuring security was its responsibility and it was not for anyone else to determine where Indian political parties conducted their political activities. 

    As India and the US seek to control the fallout from the Devyani Khobragade crisis, it is the issue of security which is proving to be the latest dampener. Despite India repeatedly asserting that security of no US installation in the country has been compromised after the recent removal of barricades, US authorities raised the issue again just ahead of the rally saying its consulate had been rendered vulnerable to possible attacks by people attending the rally. 
    The MMRDA grounds at BKC, where Modi's rally was held, is in the same area where the US consulate is located. 
New envoy to begin stint with maid tiff 
    SJaishankar, India's new ambassador to the US, will begin his stint soon after the Christmas break trying to extricate Devyani Khobragade from visa fraud charges. P 10 
Nannygate: US's double standards 
    US double standards in diplomacy are common enough. There are instances of US diplomats underpaying or even abusing domestic staff and being let off easily.P 9 India sticks to 'reciprocal measures' 
New Delhi: India conveyed to the US that expressing concern about a "legitimate political rally" by a mainstream party on the basis of security concerns was unacceptable. US ambassador Nancy Powell was also invited for the rally but the invitation was later withdrawn by the BJP. 
    Several layers of security were provided to the US consulate in Bandra. Officials though were stunned when US security concerns on Modi's rally were communicated as part of the need to tighten security. 
    It is learned that the US insisted before Indian authorities that people likely to attend the Sunday rally could be athreat to the consulate and its officials. Indian officials maintained throughout that the security issue raised by the US was a red herring and that the real issue in the ongoing Khobragade crisis. 
    India has maintained that removal of barricades will impact traffic movement but will have no bearing on the security aspect and that India remained committed to Vienna conventions. The removal of barricades, it said, was a reciprocal measure and not a retaliatory one. 
    India is also going ahead with other reciprocal measures it took after the diplomat's humiliation. US consular officials in all parts of India are to submit their identity cards by Monday. 
    India, it is understood, will insist that the new identity cards for consular officials and diplomats have the same language which the US has for Indian diplomats posted in consulates in the US, making it clear they will be liable to be arrested in case of contravention of Indian laws. 
    It is interesting that the Americans are seeking more time, beyond the December 23 deadline, to submit details about embassy staff spouses teaching in the local American School. Indian officials believe it may be worth finding out if there are dependents of US officials who have the requisite work permits or have any fallen foul of Indian requirements. Issues of compliance with Indian tax requirements for dependents of non-diplomatic staff working in American schools may be exposed too. 
    In fact, those accustomed to receiving Christmas and New Year gifts from the embassy and consulates may also have to wait a little longer. US containers containing these gifts have also been held up.

Inflation hits 14-mth high, rate hike likely

New Delhi: Inflation accelerated to a 14-month high in November as prices of vegetables and food items soared, raising the prospect of a hike in interest rates when the RBI reviews the monetary policy on Wednesday.      Data released on Monday showed the wholesale price index rose 7.5% in November, above the previous month's 7% and 7.2% last November. This was also above market expectations of a 7% increase. Food prices continued to exert pressure, rising an annual 20%. TNN Govt under pressure to tame runaway prices  New Delhi: Inflation rose to 7.5% in November on soaring food prices. While vegetables shot up 95.3% year-onyear, onion prices rose an annual 190.3% during the month. Although prices of vegetables have moderated in recent weeks due to fresh arrivals, high food prices continue to be a policy headache. The increase in food prices in November was the fastest since June 2010. In the past nine years, food inflation has averaged 10% compared to below 5% in the preceding decade.      The data is likely to put more pressure on the government to tame stubborn price pressures, which have been identified as a key reason for the Congress's rout in the recent state elections. Household budgets have been upset, while the increase in interest rates has led to larger outgo on housing and car loans.      The increase in wholesale inflation rate comes against the backdrop of a surge in retail prices, which rose over 11% in November, largely on the back of soaring vegetable and food prices. The government also revised upwards the wholesaleinflation data for September to 7.1% from the previously reported 6.5%, highlighting the entrenched price pressures on the economy.      The RBI, which has said inflation remains at an uncomfortable level, is expected to raise interest rates again.      "While food inflation may ease in the coming months as supply conditions improve, underlying inflation is susceptible to upside risks as inflation expectations are sticky and may continue to drift up," said Leif Eskesen, chief economist for India and Asean at HSBC. "This means the RBI will have to maintain a hawkish stance and we believe there is a good chance that it will hike the repo rate this Wednesday by another 25 basis points," he added.

India:Twin trouble: Inflation over 11%, factory output dips 1.8%

New Delhi: Retail inflation rose sharper than expected in November on the back of soaring food and vegetable prices, while industrial output fell for the first time in four months in October, raising fresh doubts about the health 

of the economy. 
    The two sets of numbers will pile more pressure on the government, which is battling voters' anger, as household budgets are stretched and a contraction in industrial activity will hurt jobs. 
    Food prices continued to exert pressure, rising an annual 14.7% in November, while vegetable prices shot 
up 61.6% year-on-year. 
FOOD FOR WORRY 
Inflation rises to 11.2% in November, against 10.1% last month. 14.7% rise in food prices in Nov 2013 year-on-year 
Any hope of an interest cut in RBI review next week dashed 
Industrial output contracts by 1.8% in October 2013. IIP rose by 8.4% in Oct 2012

Vote on a/c in Jan, polls likely in March-April Parties Weigh Options On No-Trust Motion

New Delhi: The fractious 15th Lok Sabha, marked by UPA-opposition clashes over cases of corruption like 2G, Commonwealth Games and Coalgate will meet for the last time in mid or end-January to pass a vote on account, clearing the way for Lok Sabha elections by late March or early April.      Sources said the government is planning to take the vote on account next month, with January 13-17 being seen as a likely window. Polls can be held by late March or early April. The 2004 and 2009 elections were held between mid-April and mid-May.      The move to be done with the vote on account and set the stage for the next Lok Sabha polls comes in the backdrop of an increasingly dysfunctional Parliament and feverish lobbying for a notrust motion submitted by six Congress MPs.      A sense of uncertainty and the perception that the Congress's rout in four north Indian states has left the embattled Manmohan Singh government further enfeebled, encouraged the Seemandhra MPs to defy the party authority.      The assembly election results rattled the Congress and a review meeting on Monday saw functionaries point to high inflation— seen to be the Centre's failing—as an important reason for the debacle. Congress chief Sonia Gandhi is learnt to have agreed with the assessment.      The no-confidence motion could not be taken up by Lok Sabha Speaker Meira Kumar due to lack of order in the House, but it continued to be intensely discussed with political parties weighing the merits of supporting the motion.      While Trinamool Congress leader Mamata Banerjee has ruled out supporting the no-confidence move against the government, the Biju Janata Dal's 14 MPs will support it when it is considered.  Aiyar: Cong needs a total overhaul      The Congress needs to "revitalize and restructure its root and branch", veteran leader Mani Shankar Aiyar said on Tuesday following the drubbing in the assembly polls, pinning his hope on Sonia Gandhi and Rahul to carry out the much-delayed revamp. "All I say is forget we are not in power. Rajiv Gandhi's programme should be used to restore the party," he told TOI. Aiyar dismissed reports that he was opposed to PM Manmohan Singh, saying Singh had given him three assignments very close to his heart on culture and panchayati raj."P 13 Naidu seeks Mamata, Naveen backing for no-trust vote  New Delhi: The no-trust motion notice by six Telangana Congress MPs, as of now, does not have the backing of 50 MPs that are required to rise in support when the Speaker seeks the opinion of the House and Congress managers are going all out to ensure that the move fizzles out.      While the motion has been submitted by Congress MPs, TDP leader N Chandrababu Naidu contacted Opposition leaders like Odisha chief minister Naveen Patnaik and West Bengal chief minister Mamata Banerjee.      YSR Congress leader Jaganmohan Reddy also met several leaders, including Banerjee, to seek support for the no-trust motion submitted by Congress MPs from the non-Telangana region of Andhra Pradesh.      Banerjee told Reddy she did not see merit in a no-confidence motion as Congress would survive the vote with the support of outside allies like SP and BSP leaders Mulayam Singh Yadav and Mayawati who have always bailed out the UPA.      Reddy did manage to get Yadav to submit an adjournment motion on Telanganaon Tuesday but most leaders do not believe the SP chief will back a no-trust, particularly after the Muzaffarnagar riots.      Given reports of intense polarization on religious lines in western UP and BJP leader Narendra Modi's forays into Uttar Pradesh, the Samajwadi Party boss is unlikely to attract the charge that he weakened "secular forces" at the Centre.      But though the government is not considering curtailing the winter session, it seems clear that not much business is likely to be transacted going by current trends. The final session of the current Lok Sabha is likely to be convened ahead of the usual mid-February date so that elections can be called any time thereafter.      The 2009 Lok Sabha elections were held from April 16 to May 13 and the results were declared on May 16. In 2004, the results were declared on May 13 after elections were held from April 20 to May 10.      Government floor managers have so far been unable to persuade the Congress MPs who submitted the motion for a no-trust vote to withdraw their initiative. The MPs, driven by constituency concerns, have also been encouraged by the uncertainty and flux following the assembly polls. Union minister Jairam Ramesh with Rajya Sabha MP Jaya Bachchan (left) at Parliament in New Delhi on Tuesday

Exit polls point to Cong rout, vary wildly on Delhi ‘Clear Win For BJP In MP, Raj; Has Edge In Capital, C’garh’

The Congress faces a blank-out in four states, according to exit polls released on Wednesday. The BJP is headed for a clear and comfortable win in the Madhya Pradesh and Rajasthan assembly elections, is likely to retain Chhattisgarh, and may just squeeze through in Delhi as well, the polls indicate.      If these polls prove to be accurate, it is very bad news for the Congress which faces a national election five months down the road. Equally, it is a  booster shot in the BJP's arm and that of its prime ministerial candidate Narendra Modi. No exit polls were available for Mizoram, the fifth state to go to elections.      While there were only minor differences among the different polls on Rajasthan, MP and Chhattisgarh, the estimates for Delhi varied widely, with two of the four polls predicting a hung assembly, but two others giving the BJP a clear though slim majority. Chouhan tipped to win third term in style      One poll even suggested that the debutant Aam Aadmi Party would emerge as the single largest party in the new assembly.      On Delhi — the election that will be most closely watched as a pointer to the national mood — an ORG survey for Headlines Today suggested the BJP would win 41 seats, giving it a clear majority in the 70-member assembly. It said the Congress would win 20 seats, and AAP just six. The ABP News-AC Nielsen also predicted a BJP win with 37 seats, but predicted that the Congress with 16 and AAP with 15 would finish neck-and-neck.      The C-Voter poll put the BJP short of a majority with 31 seats, Congress at 20, AAP at 15, and 'others' at four, indicating a hung house. Today's Chanakya had a radically different prediction, with AAP projected to win 31 seats, BJP 29 and Congress a mere 10. Obviously, the significant performance of newcomer AAP was seriously testing the science of psephology.      The other relatively close contest appears to be in Chhattisgarh. Here, ORG and Today's Chanakya gave BJP a clear majority, C-Voter predicted it would fall just short and the CNN-IBN-CSDS postpoll survey gave a range for the party of 45-55 seats in the 90-member house, which means it may or may not have a majority. What they all agreed on was that the Congress would not win, its tally ranging from a minimum of 32 to a maximum of 41 across the four polls.      On Madhya Pradesh, there is unanimity that Shivraj Singh Chouhan will win a third term in style. The range of predicted tallies for the BJP in the 230-member is from a minimum of 128 in the C-Voter poll to a maximum of 161 in the poll done by Today's Chanakya. The Congress tally in the state, if the polls are right, could be anywhere between 62 and 92.      Rajasthan too is projected to deliver a landslide verdict in favour of the BJP, with its tally projected at 110-147 seats in the 200-member assembly across four different surveys and the Congress predicted to win at best 62 seats and at worst 39.

CAD shrinks to $5bn on gold curbs Deficit At 1.2% Of GDP In Q2 RBI Advances Release Of Data To Reassure Mkts

Mumbai: The country's current account deficit shrunk to $5.2 billion (1.2% of gross domestic product) for the quarter ended September 2013, which is nearly 76% less than the deficit of $21.8 billion for the quarter ended June 2013.      The reduction in CAD is attributed to curbs on gold imports coupled with a smart recovery in exports following the depreciation of the rupee.      The current account deficit – which reflects the shortfall of export earning over import income – has dropped because merchandise exports have risen by nearly 10% over the first quarter of FY13 even as exports shrunk 8%.      The Reserve Bank of India (RBI) on Monday advanced its release of trade data, which was due toward the monthend, ostensibly to reassure markets as it withdrew most of the support measures introduced in the previous quarter to bolster the rupee. The rupee rose to a near twoweek high on Monday before settling down at 62.32 against the greenback.      The measures that were withdrawn include a facility whereby RBI lent dollars to oil marketing companies, which was discontinued last week.      "Given the backdrop of broad stability returning to the forex market, on the basis of an ongoing review of the demand conditions in the market, OMCs have been allowed to source dollars even beyond their normal daily requirements," RBI said in a statement. The central bank also discontinued a facility where it subsidized banks for mobilizing foreign deposits and converting them into rupees. RBI said that it raised $34 billion by exchanging dollars mobilized by banks – through NRI deposits and ECBs – for rupees through a swap facility. To encourage banks raise dollars through NRI deposits and foreign borrowings, RBI had subsidized the cost of converting these deposits into dollars and hedging currency risk.      The announcement came on a day when Morgan Stanley raised its 2013 and 2014 GDP growth estimates to 4.7% and 5.1%, respectively, from 4.4% and 4.6% based on improving macro numbers and reduced chances of the US Fed withdrawing its stimulus package.      While the trade deficit showed a marked improvement, the overall balance of payments (which factors in capital flows in addition to trade flows) showed a worsening of the deficit. The BoP deficit stood at $10.4 billion of the second quarter compared to a $200 million deficit in the same period last year. The BoP deficit, despite the improvement in trade numbers, was on account of foreign institutional investors pulling out money from the country on fears of US Fed tapering.