MISSION-2020 : DEVELOPED INDIA

Happy Teacher’s Day

2011-09-05T13:22:00.000+05:30

The great philosopher, Dr S. Radhakrishnan said that a university is what its teachers make it. In the ancient universities in India, the teachers or professors as they are called today were treated with great respect though, unlike at present, they did not get good pay and perks.

Teacher's Day in India is celebrated every year on 5th September, ever since 1962. The day commemorates the birthday of Dr Sarvepalli Radhakhrishnan, a philosopher and a teacher par excellence, and also the first Vice President of India and the second President of India. Some students approached him to celebrate his birthday and he asked them to honor their teachers instead. Dr Radhakhrishnan believed that "teachers should be the best minds in the country". Whether that is true or not in modern India is a contentious issue. Every day millions of parents hand over their children to teachers to mould and shape as they see fit. The authority and power invested in the teacher is immense. Do they measure up to that responsibility? Does the system encourage for the "best minds in the country" to enter the profession of teaching? These are difficult questions with no clear answers. But what is clear is the role of the teacher and the potential in that responsibility. And who can articulate that better than a life long teacher?

I congratulate all my teachers who shaped me from childhood on the occasion of Teacher’s Day. I respect each and every one who contributed in my life from all aspects. Happy Teacher's Day to all teachers in world and hope they will give their best result to make the society more civilized.

Happy Childrens Day

2010-11-14T10:46:00.002+05:30

The go getter attitude and oodles of confidence dripping from their very persona is what defines the children of the new millennium. Highly informed and immaculately stylish,the kids on new block are all set to rule their surroundings. The younger lot is light years ahead with dreams set high and a vision for its nation. It is true that in terms of knowledge children of today are much more aware than what they used to be two decades ago. But that's the demand of the current times. We are in transition phase. Indian society is waking up to a new world order where it is slated to administer a greater role in world affairs. The new era belongs to those who are smart,intelligent,aware,ambitious,independent and focused as well. Children who are more aware of sensitive issues like global warming,human rights,career venues,technological advancements,political issues,than what my grand mom used to be. Evidently there is no stopping for this tech savvy,gizmo wielding gen-next.

Our children are not our children. They are the sons and daughters of Life's longing for itself. They are our past and our future,a tribute to our ancestors and a legacy to future generations. Children are the vital resource of a nation. The collective futures of families,communities,nations and the world,lies in the hands of its children.Children are the foundation of Life itself. They are the stepping stones of creation. Their childhood is nine parts magic,one part dreams and fantasies. Children's Day celebrates "Childhood" in every corner of the world. Do not forget that children are not just little pets around the house. They are thinking,reasoning,intelligent human beings,and deserve the respect due to them. Those of us that have interacted with these little giants at our levels,and not made the mistake of under-estimating their minds,would have been delightfully surprised at their multi-hued personas. Their observation powers are outstanding,and far overtake even those of adults,at times.Children are far more articulate and expressive in their thoughts and emotions than adults.

No doubt,it is important for children to learn about the origins of Children's Day,but it is much more important to learn that the day is a reminder and recognition of the potential,responsibility and latent capabilities of our children,awaiting fulfillment of their destiny and thence of ours. It is our responsibility to cast the tender minds in our care into the tough,correct moulds,transcending the narrow confines of selfishness, discrimination, possessiveness, hatred, intolerance and grasping. We need to pay tribute to this day by pledging to mould these little adults to become self-reliant responsible,honest citizens of tomorrow. Children carry the world of tomorrow on their shoulders. Let us bear witness to this truth and join hands with them to make the world of tomorrow a beautiful one.

They move seamlessly between reality and virtual reality. The digital landscape they inhabit comprises generations not of family but of technology such as Web 2.0, 3G, PS4 and iPhone5. Their world has moved beyond their neighbourhood,school and childhood friends to encompass a 500-channel television universe,the global gaming village,the endless internet. These are the children born in the last decade and half possibly the first generation that has never known a world without hi-tech. These tweens and teens were born with dial-up internet,learnt to crawl alongside the PC and practiced writing the alphabet on the desktop. To them,a world without keypads,joysticks,digicams,headphones and LCD is unimaginable. For them,the Dark Ages are the time when television was black and white.

It is we,the users,who make the decisions on our usage of it and what we can do with it. Children as young as two are also getting introduced to books. Is exposure to books at much younger ages necessarily bad we believes that young users of technology are exactly like the generations that went before only different. Each generation has used the technologies that they are most familiar with,in order to bring about change. He believes that the era of individualism seems to be ending and the future lies in networks and how we work,live and play within networked societies. Is the twitch speed or the rate at which networked children adapt to newer technologies the number every parent and school teacher needs to know Keeping pace may be the only way to stay connected with the networked generation.

A beginning,and hopefully,a good one. Happy Children's Day

India get its own currency symbol

2010-07-15T14:38:00.000+05:30

Congratulation, Mr D Uday Kumar for giving us such a simple and innovative symbol for Indian Rupee to fixed its position in International markets. Now India also can use its own currency symbol for all international activities in financial markets. It is the answer to all the strong currency symbol in world available to know that the status of Indian currency symbol in international financial market. So now we can give the Indian Rupee a new face in International financial market.

It is the combination of Indian Devenagari Script and Roman Script as well with the view of Indian Flag in arithmetic way. That will give us to represent our script and culture in world level. The symbol will be printed or embossed on currency notes or coins. The symbol will feature on computer key boards and softwares so that it can be printed and displayed in electronic and print.

Congratulation once again to Mr. D Uday Kumar.

15 new central universities by next academic session

2009-05-01T11:16:00.001+05:30

15 more central universities, in addition to the existing 20, will be set up and start functioning from next year, the government said 30th April.The decision was taken at a two-day conference here during which vice-chancellors of the 15 new central universities presented their plans before the University Grants Commission (UGC) - the regulator of these institutions. The conference ended Thursday.The government appointed the vice-chancellors in February.The VCs met here for the first time to prepare a roadmap for making the 15 new central universities functional from the 2010-11 session.

Of the 15 institutions, 12 are new central universities in as many states, while three state universities have been upgraded.The new universities are in Jharkhand, Karnataka, Bihar, Haryana, Himachal Pradesh, Punjab, Jammu and Kashmir, Orissa, Kerala, Gujarat, Rajasthan and Tamil Nadu.

The new VCs have assured UGC that they would be able to start courses in their institutions.’Most of them have been given land. They are expected to start certain courses from the coming session,’ said a UGC official.

The universities would offer under-graduate, post-graduate, M.Phil and Ph.D programmes, besides courses on regional issues, said the UGC official.The UGC has already sanctioned nearly Rs.2 crore to each of these universities to meet their operational expenditure. Most of the universities are expected to start with a temporary campus. Some already have temporary campuses, said the UGC official.

Great Indian Festival of Democracy-2009

2009-04-13T16:06:00.001+05:30

Great festival of democracy-2009 i.e. so called general election for parliament. Every voter in Indian parliamentary participants is thinking these days that whom they will vote and why. This is the one billion dollar question for every voter. But is it their vote to count that who will be winner of that particular constituency. Yes, they want to do to keep in the view that their vote will count to choose a better candidate.

No, if they already thought that their vote is not necessary to choose a better candidate. Every Indian voter should think in a positive way that their vote will be crucial one when vote will count for a winner. We should not forget when voting comes in parliament for vote of confidence than if ruling & opponent have the same no of parliamentarian than vote of lok sabha speaker will count as a final one that government will stay or go away. Because one proverb in Hindi is famous “BUND BUND KAR KE GHARA BHARTA HAI i.e. each drop can make full bucket of water”.

Casting of our vote in India is one of the fundamental rights to use. But who is the better candidate to caste your vote in favour. Sometimes back politician brings the woman candidate in election that election will be fair and uses of languages in parliament as well as in election rally will be better. But now these days all the women candidates or even so called high profile women politician are never know they are first a woman after that they are politician. In Indian context woman are always represents their softness and uses of better languages in daily life as well as in corporate/professional world. So, in my point of view woman should always keep their softness and better use of languages. It is not a matter where they are i.e. is it politics or professional world.

Come to the previous question, which is the better candidate. This is very tough to decide. Because each & every party has some good and bad candidate as well. Every party has some bad candidate because they thought those candidate are their assets. Sometime good candidate will not win the contest, but bad candidate will certainly win. Because in India if some candidate has money and power than they will win the election. Now these days every national leader is involve to attending the election rally and things in those rally what they are doing just saying the things what another leaders are doing and why they are wrong. They don’t want to say that what they will do for better India and why the people will caste their vote in theirs favour.

Now the time has been come to ask the leader why we have to caste our vote for you people and what types of agenda you have to bring the India back as “SONE KI CHIRIYA i.e. Bird of Gold”. Starting from the youth, we have to take part in this great festival of democracy and to be a part of making India a great again in world map.

Caste your vote, for your better future and celebrate the great festival of democracy and support “ABHI NAHI TO KABHI NAHI – JAB JAGO TABHI SAVERA i.e. Now or Never – Whenever woke up, it is morning”.

Small car draws long queues as bookings start for Tata Nano

2009-04-13T16:05:00.002+05:30

Tata Motors showrooms across the country witnessed heavy footfalls Thursday as thousands of people queued for application forms to book their much-sought Nano, the jellybean-shaped small car.

Delhi, which has over 15 Tata Motors outlets, witnessed more than 7,000 eager customers rushing to book the “people’s car” at the opening of the 17-day booking period.

A-One Motors, a dealership on Barakhamba Road in the heart of the national capital, alone saw more than 1,200 people. More than 1,000 forms, each costing Rs.300, were sold.

Over the next 16 days, interested buyers can apply with an upfront payment of around Rs.95,000, or Rs.2,999 if they wish to get the car financed. Direct financing has been made available through 18 participating banks at 9-14.25 percent interest.

The car can also be booked online through the net banking gateway of over 28 banks. The online form will cost Rs.200.

But that alone will not assure them a Nano, which the $62.5-billion Tata group chairman Ratan Tata had promised to deliver for Rs.100,000 at factory gates.

A lottery will decide the lucky 100,000 who will drive out the Nano in the first phase - the result of a Rs.20-billion investment, and five years of research and development by a 500-member team, which even fetched them 34 patents.

The list of those allotted the car will be made public 60 days after the booking closes.

Tata Motors officials said over 50,000 forms have been sold across India before the booking date and the numbers were likely to multiply over the the next two weeks.

“We have had more than 300 people visiting our showroom since morning today (Thursday) and have sold about 200 forms,” said Rajesh Deswal, a sales representative at A-One Motors’ Moti Nagar outlet in west Delhi.

Among those who booked the Rs.100,000 ($2,000) car was noted filmmaker Muzaffar Ali, who sought financing through State Bank of India (SBI) and filled the form at midnight in Lucknow.

“We were prepared ever since the booking date was announced and had made all preparations to meet the rush,” SBI chief general manager Shiv Kumar said.

Satyam still among top five IT firms in India

2009-04-13T16:05:00.001+05:30

The official pointed out that Satyam continues to have strong revenues. The difference between its turnover and the next highest is around 10-15 per cent.

According to the available data, HCL Technologies, which was the fifth-largest IT firm before the scam-hit Satyam, recorded a revenue of Rs 4,860 crore in the July-December. So, 10-15 per cent less than HCL means Satyam’s turnover is Rs 4,100-4,400 crore. At this turnover, Satyam’s top line has dipped by only 1-7 percent compared with the year-ago period (July-December 2007).

Meanwhile, Tech Mahindra, which is looking to pick up stake in Satyam is a distant sixth, with a turnover of only Rs 2,297 crore in the six months ended December 2008.

After the government-nominated directors took control of the board of Satyam, two audit firms - KPMG and Deloitte - were asked to restate the accounts of the company. While the two audit firms are expected to take six months for the job, the companies that have evinced interest in picking up a stake in Satyam are being given restated accounts for six months ended December 2008.

However, the restated accounts are not available for January-March 2009, the critical period after Raju’s confession and the government taking control of the company. The official said Satyam had performed well in January and February by operating without taking bank loans, adding that client churn rate was not abnormal.

India’s long wait in New Zealand finally ended

2009-04-13T16:04:00.000+05:30

India recorded their first series triumph on New Zealand soil in 41 years though rain denied them a deserving victory in the third Test.
Rain played spoilsport in India’s push for a 2-0 series win on the fifth and final day and the hosts escaped with a draw after they were down 281 for eight in the post-lunch session in chase of a near impossible 617 for a win.
The visitors will have to be content with a 1-0 victory in the three-match Test series after India won the first match in Hamilton by 10 wickets and drawing the second in Napier.
Despite the draw, India ended their long wait of 41 years to win a Test series in New Zealand after Mansur Ali Khan Pataudi-led side drubbed the Kiwis 3-1 in 1968.
The Indians, who outplayed the Kiwis throughout the match, were well on course for a victory by conjuring up four wickets in just over a session before light rain stopped play 30 minutes into post lunch session. Daniel Vettori on 15 was at the crease at that time alongwith Iain O’Brien (19).

Congratulation from me to entire team again!

FDI flow to India will remain robust: Goldman Sachs

2009-04-13T16:02:00.001+05:30

The global economic slowdown will not affect the foreign direct investment (FDI) flow to India as the domestic demand remains “resilient”, investment banker Goldman sachs said.

“FDI is showing positive signals,” Tushar Poddar, an economist with Goldman Sachs said, adding: “We expect FDI inflows to remain significant in 2009-10, given India’s relatively resilient domestic demand momentum.”

According to the bank, the FDI flow to India during September-January - the months when the credit crisis was at its peak - amounted to $9.2 billion, higher than $7.9 billion in the corresponding period last year.

Pranjul Bhandari, another economist at Goldman, said: “India’s balance of payments (BOP) may have had its worst quarter in October-December 2009, when it showed a deficit of $18 billion.”

However, “in 2009-10, we expect the current account deficit to narrow to 1.3 per cent of GDP from 3.5 per cent last fiscal with the trade deficit narrowing considerably,”she added.

Notwithstanding the weakness in trade credit and foreign portfolio inflows, the basic balance of payments (BBOP) are expected to move to positive this fiscal, the economists said.

According to them, the major risks India faces are “political uncertainty and the high fiscal deficit”.

“Portfolio investment and trade credit on the other hand, have fallen sharply and we expect them to remain weak this fiscal,” Poddar said.

“NRI deposits showed an up tick last fiscal, but we expect it to remain flat in 2009-10. We expect NRI deposits coming due in the next year ($32 billion) to get rolled over to a large extent, but do not expect large fresh inflows,” he added.

External commercial borrowings (ECBs) are expected to moderate in in the current fiscal. Although ECBs have slowed to $9.1 billion during September-February from $11.8 billion in the previous six months.

“In 2009-10, we expect ECBs to remain positive due to higher growth and yields in India, notwithstanding the $7 billion of outstanding commercial loans coming due,” Bhandari said.

Private remittances from Indians working abroad slowed to $4.3 billion in the October-December quarter from $7.9 billion in the July-September quarter.

“We expect this to remain weak, but do not expect much further weakness from current levels,” she said.

Bhandari added that the merchandise trade deficit had fallen to $5 billion in February from a peak of $14 billion in August.

“This is likely to turn the BBOP into positive from a current negative, and is also expected to make the overall BOP stronger,” she said.

India shining Vs Bharat Nirman

2009-04-13T15:53:00.000+05:30

When I have seen a poster/banners/hoarding in Delhi’s bus shelters about Bharat Nirman campaign started by congress party to keep the view in next coming election. I come off the five years back that BJP started the same campaign that is so called India shining. I remember the things that how congress party came into the government they show that how much money of indian people has been wasted on those Ads. What cost the BJP govt. paid for that campaign? Will congress party is going to same. I mean to say that congress party is also going to loose their govt. If they loose than what the next govt. will do that will be same for congress what they did for BJP. If not than nobody will know that how much money has been spend over these campaigning. Ultimately these are the loosing part of us. I mean to say that that money is our own. So we are the looser. So, who cares about those things? Nobody in today’s India. Just take an example, one of my friends is working for HSBC as financial analyst and he is getting lot of money from that company. He is post graduated from one of the leading university in India i.e. JNU. But he doesn’t bother to take part in election. Because he thinks all politicians are rotten fish. And we have a proverb in Hindi “Ek Sari Hui Machhli sare talab ko ganda kar deti hai”. Here all the fishes are rotten than how you can think that you can purify the pond i.e. Indian political system.

So what we have to do. Do it same one of my friend is doing or cast a vote for better candidate. Other wise someone will come to us and will say if you are not voting than you are sleeping. If we are sleeping than how we can say that someone will do some great work for us. If you are sleeping than nobody will do anything for you. So you have to be know your surrounding well. Nobody born as geniuses take an example the guys of Slum dog Millionaire, who never read anything formally but he knows everything. Because he kept his eye and ear open all the time. So we have to keep our eyes and ears should be open. It mean to say that if you know your surrounding well than you can contributing your society to make it better and better even if you don’t do anything physically, financially as well.

This is not the criticizing the campaign started by BJP or Congress Party. I never personally criticize those things. I think that if someone has been some great work for their people than they have the right to show all his work to the people in a right direction. Than the people can decide that who will be the best candidate for them for next fiver years and they can serve your society better.

So, Please caste your vote for better future.

Government staff in India paid too much: ADB

2008-07-09T15:05:00.002+05:30

Many developing countries are paying higher salaries to their state employees than they can afford and stunting economic growth in the process, a study by the Asian Development Bank shows.

"The higher the relative governments pay rates, the lesser the economic growth attained," the study of 19 Asian, African and Latin American countries said.

"The high relative government pay rates cost the country in terms of economic growth, while the higher employment share does not seem to have any economic growth impact," the Manila-based bank report said.

It said part of this could be due to "rent-seeking behaviour" such as minimum wages set above the competitive rate, wage adjustments getting ahead of actual productivity growth, and misguided attempts by politicians to increase employment or redistribute wealth.

"India stands out among the high-pay countries, as it has experienced one of the most pronounced increases in relative government pay rates in recent decades," the study said.

"The least favourable estimates identify Bangladesh as a country with one of the highest relative government pay rates," it said.

While listed as a high-paying country, Vietnam's pay rate has "fallen rapidly, and it may no longer be of concern."

It said economic rents embedded in government pay rates "reduce the affordability of government and reduce the coverage of public services essential to economic growth."

The resulting high government pay "leads to far less employment in government, and the creation of a group of unemployed labour in search of government employment," it added.

It said these countries "could raise their economic growth by reducing relative pay rates in government and using the budget savings to expand employment."

Sources : ET

Indian cos rank No.2 among foreign employers in Britain

2008-07-09T15:05:00.001+05:30

Indians have emerged as second only to Americans as foreign employers of Britons. Tata’s JLR deal has moved India into becoming the UK’s second-highest foreign employer for 2007-08; Indians were responsible for almost one-fifth of all British jobs saved and created by foreigners in the country.

In the past five years, Indian employers have saved and created a total of 33,515 jobs for Britons, rising from an almost non-existent base of 892 in 2003-2004. While still lagging behind major investors like the US, Germany, or Japan, India has now emerged as an employer of significance for Britons — and growing thousand fold every year, according to the latest annual data released by UK Trade and Investment (UKTI), the government department responsible for UK’s inward and outward investments.

UK, like every other European economy, promotes inward foreign investment with a focus on protecting and creating local jobs. While UK does not calculate FDI flows, preferring to use FDI stock figures, the total value of Indian direct investment into Britain is expected to jump 166% for calendar year ended 2007, to $4 billion.

India, as an inward investor into the UK, saved and created 19,672 British jobs this year with 75 new projects, while the US employed 29,809 with 478 new projects. Even as inward investments by countries like the US, France and Canada have seen a downward trend in 2007-08 — though absolute numbers are still much higher — growth in inbound investment came from countries like Ireland, Germany, India and China.

Brian Shaw, author of the UKTI’s annual report, told ET: “Indian inward investment into the UK is broadening and deepening; we’re seeing an increased interest in sectors like creative industries and entertainment, from Bollywood, advanced engineering, life sciences, and financial services.” This move marks a trend that’s moving away from traditional sectors like ICT. The latest FDI stock figures — for calendar year 2007 — will be released in October, and India’s stock levels are expected to increase to $4 billion, according to UKTI.

However, in terms of value, India’s share of UK’s inbound investment is still minuscule. The most recent global stock figure, announced by UNCTAD for UK till the end of calendar year 2006, shows that total FDI stock into the UK was $1.135 trillion, with India’s share pegged at $1.5 billion.

Foreign secretary David Miliband said: “The UK has a global reach and our investment pipelines are spread across the world. Once again, the US remains our biggest investor; but we have also increased investment from a range of key countries, including high-growth markets like India and China and Ireland.”

In terms of new projects for 2007-08, while the US grabs a lion’s share of 30%, India’s share at 4.8% compares reasonably with countries like France (5.5%), Japan (6.5%), Germany (6.4%) and China (3.6%). The UK government has identified India and China as high-growth FDI focus areas, and is keenly wooing both regions to invest in UK.

IMF chief unsure if worst of financial crisis is over

2008-07-09T15:02:00.000+05:30

It is hard to know how far the global financial crisis still has to run, with the extent of further credit losses dependent on what happens to the U.S. housing sector, IMF chief Dominique Strauss-Kahn said on Wednesday.
"What is sure is that the consequences for the real (economy) sector of the financial crisis are still in front of us," Strauss-Kahn, the International Monetary Fund's managing director, said in an interview.
Speaking on the sidelines of the annual Group of Eight summit in northern Japan, Strauss-Kahn restated the IMF's view that the yuan is undervalued.
He said the fund's board would meet in about six weeks' time to determine whether the exchange rate was in fact fundamentally misaligned. He said the dollar is close to its medium-term equilibrium value when measured against a basket of currencies even if, on a bilateral basis, it might currently appear to be slightly on the weak side against the euro.

Oil rises to near $115 on Fed cut, Nigeria strike

2008-05-01T14:51:00.001+05:30

Oil futures rose to near $115 a barrel on Thursday, gaining support from an interest rate cut by the US Federal Reserve and the extension of an oil workers' strike in Nigeria.

US crude for June was trading up $1.16 at $114.62 a barrel by 0700 GMT, while London Brent Crude rose $1.16 to $112.52.

The gains in oil prices came as the Fed on Wednesday cut interest rates by a quarter point to 2 per cent and indicated that it expects inflation to moderate. Traders took the Fed's statement to suggest that more rate cuts are possible.

Rate cuts can boost liquidity in financial markets, brighten the outlook for economic activity and energy demand, and weaken the dollar which tends to bolster commodity prices.

Additional support came from striking oil workers who have shut down Exxon Mobil's production in Nigeria and pledged to carry on their seven-day strike after failing to reach a deal with the US oil major at talks on Wednesday.

"(There are) not really very many cushions, so any of these disruptions will be bullish for the market," said Robert Nunan of Mitsubishi Corp in Tokyo.

A spokesman for state-run Nigerian National Petroleum Corp (NNPC), which is mediating the talks, said on Wednesday that leaders of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had agreed to suspend the strike while talks continued.

But union leaders said the stoppage, which has shut down virtually all Exxon's 800,000 barrels per day of production in the West African country, would continue and the two sides would reconvene for negotiations at 1100 GMT on Thursday.

Additionally, OPEC President Chakib Khelil said on Wednesday there was no global oil market imbalance, reiterating that current high prices were driven by the slide in the dollar due to a weak US economy.

Sources: The Economics Times

Essar Steel seals deal for US steel firm for $1.1 bn

2008-05-01T14:50:00.000+05:30

Steelmaker Essar Steel said on Thursday it planned to acquire US steel company Esmark, valuing the deal at 1.1 billion dollars, as it pushes ahead with an aggressive North American expansion drive.

With the planned buy, Essar will have nearly seven million tonnes of steelmaking capacity in the United States and Canada, making it a significant North American player, the company said in a release.

The proposed purchase by India's third-largest steelmaker, part of the oil- to-communications group Essar Global, is another sign of cash-flush corporate India spreading its wings worldwide.

"This is one more step in realising our global steel vision of having world-class, low-cost assets, with a global footprint," Essar Global Chairman Shashi Ruia said in the statement.

The deal comes after Essar, India's third-largest steelmaker which operates an integrated steel plant in India, bought Canada's Algoma Steel Inc for 1.63 billion dollars and Minnesota Steel of the US for an undisclosed sum, last year.

"This acquisition provides us with an excellent platform for the Canadian and North American markets," Ruia said.

Essar Steel, a unit of Essar Global Ltd, said it was offering 17 dollars per share for Wheeling, West Virginia-based Esmark Inc, and added "the estimated enterprise value of the proposed acquisition is 1.1 billion dollars."

Enterprise value is a measure of the theoretical takeover price which takes in market capitalisation, plus debt, total cash and short-term investments.

Steel prices have been climbing as a result of strong demand from India and China and other emerging countries, triggering consolidation in the global steel industry.

Indian steel companies have been helping spearhead this drive as they push to become world players.

The offer was "unanimously accepted" by Esmark's board and is subject to customary US government and union approvals, Essar said.

Sources: The Economics Times

Government in future will release monthly figures on rate of inflation

2008-05-01T14:49:00.000+05:30

It will also release the actual prices of various commodities used in calculating the inflation rate, the Secretary in the Department of Industrial Policy and Promotion (DIPP) told reporters here today.

Release of actual price data in the public domain will increase transparency and eventually correct anomalies, if any, in the price data collected by the DIPP, which is based on voluntary disclosures from trade sources, he said.

He said that the Government has also decided to shift to a new index – Producer Price Index (PPI) – in future which would give a better measure of the economic trend.

The PPI would capture the price movements at the producers’ level and would measure both input prices paid by the producers and the output price that they receive on produced items, he said.

“It is aimed at avoiding multiple counting and measuring of inflation of finished goods,” he said.

The current index does not include the services sector which accounts for more than 50 per cent of the GDP. The Government is also working to formulate an index that would be able to capture the trends in services also, he said.

Sources: The Hindu(Businessline.in)

My Vision

2008-02-11T12:23:00.000+05:30

Was Rome and Taj Mahal built in day? If not, then how can India be? But every day counts in the building a nation….. so is every man.
I can understand today how easy it is to reconstruct India. Every face counts…and every Indian.
My five point to make an India developed nation:

1) Educate the society

2) Educate the agriculturist to adapt some non-conventional crops

3) Educate the people to fight against corruption

4) Educate the people about the importance of Education

5) Know their rights/works/responsibility towards the society

6) Use of RTI act etc...

Focus on Primary concern to make Developed India by 2020

2008-02-11T12:16:00.000+05:30

The primary concern is the person who grows crop should be educated I think so. From the past, what people thought is agriculture means no education is required. That’s why today people in rural area are facing so many problems because they have been cheated by some of our rich people who give them money on high interest to invest in their agriculture. Today Father who grows crop does not want his son or daughter to become an agriculturist as example for me, my grandfather do it for long time and my father get a job in Indian railway and now I m working with software industry in Delhi and now my father never thought I will be back some time after, to give some betterment for my society. Why? Because of money no not at all only what they think my future generation will not get any better education there. In my village there are 5 doctors’, 10-15 engineers working in different location of India and they are earning lots of money to give their life an easy livelihood and 40-45 are working with government organization. But nobody wants to do anything to our society or its betterment and I know this as well that nobody will be back, because of lack of livelihood facilities there. But I think that I have some responsibilities towards my society where I belong from. Today most of the people who are working in MNCs, ITs are from village whose parents were in agriculture.

In my village everything is not good, not high economic growth but my village has a strong education background has made it recognized in it's society. But how much this economic growth is benefiting my people who r living under Below Poverty Line (BPL). I think in my village only 10% are benefited from this growth. How we can call it as an economic growth when poor is still remains as poor who even don’t have the basic needs food and shelter. Youth should come forward to give some solution and to reduce the poverty in rural areas. Youth who are really capable of changing should be into Politics so that they can help rural India. Your work is really good, but tries retaining agriculturist as agriculturists itself. Otherwise one day we should even import rice and wheat from other countries. We will be fighting for food and shelter. I have something plan in my mind for my village like:

1) Educate the society

2) Educate the agriculturist to adapt some non-conventional crops

3) Educate the people to fight against corruption

4) Educate the people about the importance of Education

5) Know their rights/works/responsibility towards the society

6) Use of RTI act etc...

And last word I believe that “Start with small, Do it Quick, Show the result and Move on….”

Understanding Mutual Funds in Five Minutes

2008-02-06T15:22:00.002+05:30

Everybody talks about mutual funds, but what exactly are they? Are they like shares in a company, or are they like bonds and fixed deposits? Will I lose all my money in funds or will I become an overnight millionaire? Big questions that get answered in just five minutes. Read on.

What is a mutual fund?
A mutual fund is a pool of money that is invested according to a common investment objective by an asset management company (AMC). The AMC offers to invest the money of hundreds of investors according to a certain objective - to keep money liquid or give a regular income or grow the money long term. Investors buy a scheme if it fits in with their investment goals, like getting a regular income now or letting the money accumulate over the long term. Investors pay a small fraction of their total funds to the AMC each year as investment management fees.

How many categories of mutual funds are there in the market?
There are three broad categories of funds in the Indian market - money market, debt and equity. A money market fund invests in short-term government debt paper and is good for parking money for the short term since the principal is safe, returns better than a bank deposit and liquidity high. Debt funds invest mainly in debt instruments like government securities, corporate and institutional debt paper. They are also called income funds since people buy them for their income needs. Equity funds invest in the stock market and suit long term investors who want capital appreciation. Commodity, property and gold funds are yet to come into India.

Why should I invest in a mutual fund?
Investors with small portfolios may not have the necessary expertise nor get the required diversification across debt and equity products. For example, equity-seeking investors may find their money insufficient to buy enough companies to spread their risk. Or they may find funds insufficient to spread between cash, debt and equity products. Mutual funds offer a way out, for as little as Rs 1,000, an investor can approach most schemes and get well-diversified portfolios, across product classes and instruments. The money is invested by market experts. As markets mature, funds begin to customise products according to need. It is possible to match a unique need to a specific scheme from a fund house.

How do I make money?
There are two ways of making money from a mutual fund - through dividend or through capital appreciation. Suppose a mutual fund scheme collects Rs 500 crore by selling units priced at Rs 10 each. The fund invests this in stocks and debt paper. After a year the corpus grows to Rs 600 crore. This Rs 100 crore can now be distribted amongst the unit holders as dividend. Or it can remain in the fund, taking the net asset value (NAV) or the price of the unit, higher, to say Rs 12. Investors can now sell and realise a gain of Rs 2 per unit or can hold on for future appreciation. (We are ignoring costs in this simplification) But mutual funds do not guarantee performance or returns. Risk depends on the type of fund bought and its performance. So, a debt fund is less risky than an equity fund. But within equity, an index fund is less risky than a sector fund.

Is investing in Mutual Funds safe?
The mutual fund industry is well regulated in India. The market regulator, the Securities and Exchange Board of India (SEBI) has ensured that a repeat of the vanishing companies does not happen here. Therefore, mutual funds in India are in the form of a Trust. This means that the money belongs to the investors and is only held in the name of the Trust. The investment arm, the AMC, acts as a fee-for investment manager and does not own the money. This does not mean that the investments are risk-free. Investors need to take the risk of volatility or bad management and money can grow or lose value depending on the market and investment decisions. However, sensible mutual fund investing is a good way to include equity and debt in individual portfolios to see realistic growth.

New to Mutual Funds? Tips for a beginner

2008-02-06T15:22:00.001+05:30

First time investors in Mutual Funds act in the face of imperfect information and often get overwhelmed by uncertainties characterizing the investment situation. But there’s more to Mutual Fund investing than market timing.

First things first..

The first thing an aspiring unit holder must do is to establish what type of portfolio he wants to build. In other words, to decide the right asset allocation. Asset allocation is a method that determines how you invest your money in different investments with the proper mix of various asset classes. Remember, the type or class of security you own i.e. equity, debt or money market, is much more important than the particular security itself.

The popular thumb rule for asset allocation says that whatever the investor’s age, he should keep that percentage of his portfolio in debt instruments. For example, if an investor is 25, he should have 25% of his investments in debt instruments and the rest in equity. However, in reality, different circumstances and financial position for each individual may require different allocation. Portfolio variable is another factor that one needs to understand to practice asset allocation. These are age, occupation, number of dependants in the family. Usually the younger you are, the more riskier the investments you can hold for getting superior returns.

How to pick the right fund/s?

Next, focus on selecting the right fund/s. The key is to select the fund/s based on their investment philosophy and consistency in terms of returns. To ensure you are selecting the right type of funds that are appropriate for your needs, consider following:

* Determine what your financial goals are.
* Are you investing for retirement? A child’s education? Or for current income?
* Consider your time frame. Do you need money in three months time or three years? The longer your time horizon, the more risk you may be able to take.
* How do you feel about risk? Are you in a position to tolerate the ups and downs of the stock market for the possibility of higher returns? It is necessary to know your own risk tolerance. It can be a guide for choosing the right schemes. Remember, regardless of the potential returns, if you are not comfortable with a particular asset class, you should consider other options.

Fund Candy

* Diversified equity funds
* Index funds
* Opportunity funds
* Mid-cap funds
* Equity-linked savings schemes
* Sector funds like Auto, Health Care, FMCG, IT, Banking etc.
* Balanced funds for those who are not comfortable with 100% exposure to equity

If selected properly, these equity and equity-oriented funds have the potential to deliver returns that could be far superior to other asset classes.

Remember, all these factors will have a direct impact on the fund you choose and the return that you can expect to get. If you are a long-term investor with some appetite for risk and are looking for returns to beat inflation, equity funds are your best bet. MFs offer a variety of equity and equity-oriented schemes (See table ‘Fund Candy’). For a beginner, it makes sense to begin with a diversified fund and gradually have some exposure to sector and specialty funds.

Investment Strategies that will help you make the best of your MF Investment and Traps that you should avoid.

Keeping track..
Filling up an application form and writing out a cheque is not the end of the story. It is equally important to keep an eye on how your investments are performing. While having a qualified and professional advisor helps both in terms of making the right decision as well as measuring performance, it makes sense to know how to do yourself with a little help from these sources:

Fact sheets and Newsletters:
MFs publish monthly fact sheets and quarterly newsletters that contain portfolio information, a report from the fund manager and performance statistics on the schemes managed by it.

Websites:
MF web sites provide performance statistics, daily NAVs, fund fact sheets, quarterly newsletters and press clippings etc. Besides, the Association of Mutual funds in India, AMFI, website, contains daily and historical NAVs, and other scheme.

Newspapers:
Newspapers have pages reporting the net asset values and the sales and redemption prices of MF schemes besides other analysis and reports.

Remember, it is very important for you to be well informed. To achieve this, you need to spend a little time to understand and analyze the information to enhance the chances of success. Even if you spend one percent of the time that you spend on earning money, it’ll be a good beginning. Above all, take help of a professional advisor to select the right fund as well as the right mix of one time investment, SIP and the STP.

Demystifying NAV myths

2008-02-06T15:21:00.002+05:30

The NAV of a mutual fund has not been correctly understood by a large section of the investing community.

This is quite evident from the fact that Mutual Funds had been recently collecting huge corpus in their New Fund Offers or NFOs, whereas the collections in the existing schemes were negligible. In fact, investors sold their existing investments and invested in NFOs. This switch makes no sense, unless the new fund has something different and better to offer.

Misconception about NAV

This situation arises from the perception that a fund at Rs 10 is cheaper than say Rs 15 or Rs 100. However, this perception is totally wrong and investors would be much better off once they appreciate this fact. Two funds with same portfolio are same, no matter what their NAV is. NAV is immaterial.

Why people carry this perception is because they assume that NAV of a MF is similar to the market price of an equity share. This, however, is not true.

Definition of NAV

Net Asset Value or NAV is the sum total of the market value of all the shares held in the portfolio including cash less the liabilities, divided by the total number of units outstanding. Thus, NAV of a mutual fund unit is nothing but the ‘book value’.

NAV vs Price of an equity share

In case of companies, the price of its share is ‘as quoted on the stock exchange’, which apart from the fundamentals, is also dependent on the perception of the company’s future performance and the demand-supply scenario. And hence the market price is generally different from its’ book value.

There is no concept as market value for the MF unit. Therefore, when we buy MF units at NAV, we are buying at book value. And since we are buying at book value, we are paying the right price of the assets whether it be Rs 10 or Rs.100. There is no such thing as a higher or lower price.

NAV & it’s impact on the returns

We feel that a MF with lower NAV will give better returns. This again is due to the wrong perception about NAV. An example will make it clear that returns are independent of the NAV.

Say you have Rs 10,000 to invest. You have two options, wherein the funds are same as far as the portfolio is concerned. But say one Fund X has an NAV of Rs 10 and another Fund Y has NAV of Rs 50. You will get 1000 units of Fund X or 200 units of Fund Y. After one year, both funds would have grown equally as their portfolio is same, say by 25%. Then NAV after one year would be Rs 12.50 for Fund X and Rs 62.50 for Fund Y. The value of your investment would be 1000*12.50 = Rs 12,500 for Fund X and 200*62.5 = Rs 12,500 for Fund Y. Thus your returns would be same irrespective of the NAV.

It is quality of fund, which would make a difference to your returns. In fact for equity shares also broadly this logic would apply. An IT company share at say Rs 1000 may give a better return than say a jute company share at Rs 50, since IT sector would show a much higher growth rate than jute industry (of course Rs 1000 may ‘fundamentally’ be over or under priced, which will not be the case with MF NAV).

7 good reasons to invest in SIPs

2008-02-06T15:21:00.001+05:30

Fact No. 1: Over a long term horizon, equity investments have given returns which far exceed those from the debt based instruments. They are probably the only investment option, which can build large wealth. Fact No. 2: In short term, equities exhibit very sharp volatilities, which many of us find difficult to stomach. Fact No. 3: Equities carry lot of risk even to the extent of loosing ones entire corpus. Fact No. 4: Investment in equities require one to be in constant touch with the market. Fact No. 5: Equity investment requires a lot of research. Fact No. 6: Buying good scrips require one to invest fairly large amounts.

Systematic Investing in a Mutual Fund is the answer to preventing the pitfalls of equity investment and still enjoying the high returns. And it makes all the more sense today when the stock markets are booming. (Also Read - 5 corners of a sound Investing Strategy)

1. It’s an expert’s field – Let’s leave it to them
Management of the fund by the professionals or experts is one of the key advantages of investing through a mutual fund. They regularly carry out extensive research - on the company, the industry and the economy – thus ensuring informed investment. Secondly, they regularly track the market. Thus for many of us who do not have the desired expertise and are too busy with our vocation to devote sufficient time and effort to investing in equity, mutual funds offer an attractive alternative. (Read more - The Investors biggest Dilemma)

2. Putting eggs in different baskets
Another advantage of investing through mutual funds is that even with small amounts we are able to enjoy the benefits of diversification. Huge amounts would be required for an individual to achieve the desired diversification, which would not be possible for many of us. Diversification reduces the overall impact on the returns from a portfolio, on account of a loss in a particular company/sector.

3. It’s all transparent & well regulated
The Mutual Fund industry is well regulated both by SEBI and AMFI. They have, over the years, introduced regulations, which ensure smooth and transparent functioning of the mutual funds industry. This makes it safer and convenient for investors to invest through the mutual funds. (Check out - Foolproof strategies to maximize your profits)

4. Market timing becomes irrelevant
One of the biggest difficulties in equity investing is WHEN to invest, apart from the other big question WHERE to invest. While, investing in a mutual fund solves the issue of ‘where’ to invest, SIP helps us to overcome the problem of ‘when’. SIP is a disciplined investing irrespective of the state of the market. It thus makes the market timing totally irrelevant. And today when the markets are high, it may not be prudent to commit large sums at one go. With the next 2-3 years looking good from Indian Economy point of view, one can expect handsome returns thru’ regular investing.

5. Does not strain our day-to-day finances
Mutual Funds allow us to invest very small amounts (Rs 500 – Rs 1000) in SIP, as against larger one-time investment required, if we were to buy directly from the market. This makes investing easier as it does not strain our monthly finances. It, therefore, becomes an ideal investment option for a small-time investor, who would otherwise not be able to enjoy the benefits of investing in the equity market.

6. Reduces the average cost
In SIP we are investing a fixed amount regularly. Therefore, we end up buying more number of units when the markets are down and NAV is low and less number of units when the markets are up and the NAV is high. This is called rupee-cost averaging. Generally, we would stay away from buying when the markets are down. We generally tend to invest when the markets are rising. SIP works as a good discipline as it forces us to buy even when the markets are low, which actually is the best time to buy. (Read more - Invest wisely and get rich with equity MFs)

7. Helps to fulfill our dreams
The investments we make are ultimately for some objectives such as to buy a house, children’s education, marriage etc. And many of them require a huge one-time investment. As it would usually not be possible raise such large amounts at short notice, we need to build the corpus over a longer period of time, through small but regular investments. This is what SIP is all about. Small investments, over a period of time, result in large wealth and help fulfill our dreams & aspirations.

Is it time to say Goodbye to your fund?

2008-02-06T15:19:00.000+05:30

Many investors are still to fully understand the concept of a mutual fund. They continue to treat it similar to investing in shares. Therefore, they tend to buy mutual funds for wrong reasons - low NAV of a fund; dividend announced by a MF; New Fund Offer etc.

The same misconception is seen in selling too. One of the most common instances of selling a mutual fund has been to invest in a New Fund Offer. This is under the false impression that a fund at Rs.10/- is cheap and an excellent opportunity to invest. Many investors have been misled by distributors into this kind of switching. (Also read - Invest wisely and get rich with equity MFs)

Further, the profit booking strategy for stocks may not strictly be applicable to mutual funds. It is the job of the fund manager to keep buying under-valued or fairly-valued stocks, while booking profits by selling overvalued stocks Therefore, by selling a MF from a profit booking perspective, we may actually be selling off a fairly valued portfolio - with a good long-term potential.

Therefore, what could be the possible situations for selling a MF?

Financing a need

A very obvious reason to sell would be when you need money. We all invest money with a view to finance some need or a desire in the future.

Say, you planned to buy a car or a house; or need to pay your child's fees; or maybe you want to take a vacation abroad. All this would require you to liquidate some of your investment. (Also read - Trading tricks that've stood the test of time)

However, proper choice is essential in deciding which fund(s) to sell. You could either sell those funds, whose performance has not been encouraging; or those where the tax impact is minimal; or those where the amounts are not very significant; etc. Or sometimes, possibly it may be better to borrow rather than sell a good investment.

Poor performance

There are more than 200 equity funds and their number is growing. The returns from practically all funds have been comparatively quite good, given the current bull-run. Even the worst performing funds have given 30-35% returns in last 1 year. In absolute terms these are excellent returns. But when compared to the top performers with 110-115% returns, these look extremely poor.

However, the key here is to look at long-term returns - 1-yr, 3-yr & 5-yr - and compare it with both the benchmark index and other funds in the peer group. In the short term there could be a genuine reason for under-performance. Some of the investments may be from a long-term perspective; certain sectors may have been under-performers; contrarian investments take time to catch market fancy, etc. (Also read - The Investors biggest Dilemma)

But if the performance of the fund continues to be consistently below par over long periods of time, then it may be worthwhile considering switching over a better performing fund. If possible, one should also try and assess the reasons for poor performance. This will give a good insight into the market.

Rebalancing the portfolio

We all have a certain asset allocation across various investment options such as debt, equity, real-estate, gold etc.

A change in your financial position may require you to rebalance your portfolio. Suppose you are presently having a well-paid job and are unmarried with no liabilities. You can, therefore, take much higher exposure in equity MFs. But with marriage and kids your responsibilities may increase, which would require you to reduce you equity risk to more manageable levels.

Or the portfolio balance changes with time, due to different assets growing at different rates. Your equity portion may have appreciated much faster than your debt, distorting the original balance. Hence you would need to sell equity and re-invest in debt to restore the original balance. (Also read - Mutual Funds: Your best personal Portfolio Manager)

Or maybe a new asset class has been introduced in the market - a real-estate fund or a gold fund - and you want to take advantage of it. Thus you may have to sell a part of your existing investment and re-invest in this new asset class.

10 must-reads in an MF offer document

2008-02-05T17:31:00.000+05:30

You would have come across this line in all Mutual Fund advertisements, “Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing.” It’s an open secret that this 80 to 100 page bulky document is not simple to read and the legal information it contains is not easy to understand for most investors.

However, Sebi has made the investor’s job easier by evolving an abridged form, the Key Information Memorandum. Also, Sebi has served the cause of investors by stipulating standard sections and standard disclosures in all Offer Documents. Hence, the Offer Document can be the friend and guide of an enlightened investor. Here is a guide to what an Offer Document is, why it is important and what are the 10 Most Important Things to Read in an Offer Document for investors.
What is a Mutual Fund Offer Document?
It is a prospectus that details the investment objectives and strategies of a particular fund or group of funds, as well as the finer points of the fund's past performance, managers and financial information. You can obtain these documents from fund companies directly, through mail, e-mail or phone. You can also get them from a financial planner or advisor. All fund companies also provide copies of their ODs on their websites.

10 Most Important Things to Read in an Offer Document:

Date of issue
First, verify that you have received an up-to-date edition of the OD. An OD must be updated at least annually.

Minimum investments
Mutual funds differ both in the minimum initial investment required, and the minimum for subsequent investments. For example, equity funds may stipulate Rs 5000 while Institutional Premium Liquid Plans may stipulate Rs 10 crore as the minimum balance. (Also read - How to reduce risk while investing?)

Investment objectives
The goal of each fund should be clearly defined — from income, to long -term capital appreciation. The investors need to be sure the fund's objective matches their objective.

Investment policies
An OD will outline the general strategies the fund managers will implement. You'll learn what types of investments will be included, such as government bonds or common stock. The prospectus may also include information on minimum bond ratings and types of companies considered appropriate for a fund. Be sure to consider whether the fund offers adequate diversification.

Risk factors
Every investment involves some level of risk. In an OD, investors will find descriptions of the risks associated with investments in the fund. These help investors to refer to their own objectives and decide if the risk associated with the fund's investments matches their own risk appetite and tolerance. Since investors have varying degrees of risk tolerance, understanding the various types of risks in this section( eg credit risk, market risk, interest-rate risk etc.) is crucial. Investors must raw be familiar with what distinguishes the different kinds of risk, why they are associated with particular funds, and how they fit into the balance of risk in their overall portfolio. For example, a Post Office Monthly income plan assures an 8% monthly income payment for its 6 years tenure. A Mutual Fund MIP invests in a portfolio of 80% to 90% bonds and gilts and 10% to 20% of equities, to generate capital appreciation, which is passed on to customers as monthly income, subject to availability of distributable surplus. In 2004, a lot of mutual fund customers underestimated this market risk and were caught by surprise when the MIPs gave low/negative returns. (Also read - Fear interest rate risk? Here is the solution)

Past Performance data
ODs contain selected per-share data, including net asset value and total return for different time periods since the fund's inception. Performance data listed in an OD are based on standard formulas established by Sebi and enable investors to make comparisons with other funds. Investors should keep in mind the common disclaimer, "past performance is not an indication of future performance". They must read the historical performance of the fund critically, looking at both the long and short-term performance. When evaluating performance, investors must look at the track record of a fund over a time period that matches their own investment goals.

They must check that the benchmark chosen by the fund to compare its relative performance is appropriate. Sebi is doing a fine job of ensuring this as well. In addition, investors should keep in mind that many of the returns presented in historical data don't account for tax. They must look at any fine print in these sections, as they should say whether or not taxes have been taken into account.

Fees and expenses
“Mutual funds have two goals: to make money for themselves and for you, usually in that order.”- Quote from Fool.com. Entry loads, exit loads, switching charges, annual recurring expenses, management fees, investor servicing costs…these all add up over time. The OD lists the limits on these fees and also shows the impact these have had on the fund investment historically. (Also read - How to build your MF portfolio?)

Key Personnel esp Fund Managers
This section details the education and work experience of the key management of the fund company, including the CEO and the Fund Managers. Investors get an idea of the pedigree and vintage of the management team. For example, investors need to watch out for the fund that has been in operation significantly longer than the fund manager has been managing it. The performance of such a fund can be credited not to the present manager, but to the previous ones. If the current manager has been managing the fund for only a short period of time, investors need to look into his or her past performance with other funds with similar investment goals and strategies. Only then can they get a better gauge of his or her talent and investment style.

Tax benefits information
Mutual funds enjoy significant tax benefits under Sec 23 D and Sec 115 .For example, Equity funds enjoy nil long terms capital gains and nil dividend distribution tax benefits. A close reading of the tax benefits available to the fund investors will enable them to plan their taxes better and to enhance their post tax returns. (Also read - How to ride the rising interest rate tide?)

Investor services
Shareholders may have access to certain services, such as automatic reinvestment of dividends and systematic investment/withdrawal plans. This section of the OD, usually near the back of the publication, will describe these services and how one can take advantage of them.

Conclusion
After reading the sections of the OD outlined above, investors will have a good idea of how the fund functions and what risks it may pose. Most importantly, they will be able to determine if it is right for their portfolio. If investors need more information beyond what the prospectus provides, they can consult the fund's annual report, which is available directly from the fund company or through a financial planner.

This investment of time and effort would prove very beneficial to investors.

New Fund Offer: Things to note before you invest

2008-02-05T17:30:00.000+05:30

Most of us like to try out new things whether its dining at restaurants, buying mobile phones and cars to name a few. Some go to the extent of changing mobile phones every 1 year and a car every 3 years. Well this is a matter of personal preference and lifestyle and might give you some kind of emotional happiness which is good in some sense.

But when it comes to most new funds, there is hardly anything different, unique or really NEW about it. It's just that the name gets more exotic, dressing gets much better or a new marketing ploy such as Invest in India's Growth potential as if other options available are not investing in India's growth potential. (Also read - Have a Dravid and a Dhoni in your portfolio)

To put it simply most of the new fund offers are Old Wine in a New Bottle. They are packaged very smartly with fancy marketing ideas to entice the client to buy. There was a deluge of New Fund Offers in 2005 and early part of 2006.

SEBI on its part took a series of steps. Firstly, SEBI objected against the use of the word IPO and instead had every fund house use NFO (New Fund Offer), to confuse with Stock IPOs, to curb rampant mis-selling of new funds.

Secondly, SEBI had Mutual Funds launching open-ended New Funds charge the initial issue expenses within the entry load itself whereas close ended funds could still charge 6% initial issue expense. (Also read - Invest, but choose the right mutual fund)

This is precisely one of the reasons why most of the mutual funds have been launching closed ended New Fund Offers so they could pay a higher brokerage of around 5 to 6% to distributors.

Thirdly, SEBI has taken note of this deluge of similar funds being launched and made it mandatory for the trustees of Mutual Funds to personally certify that their new schemes are different from the old ones. Despite this some of the fund houses have been launching me too schemes.

Some fund houses such as DSP Merrill Lynch have not launched any new offering in the last 12-15 months, except for the Super SIP (which was a genuine attempt to offer something new that was relevant), whereas others such as Tata Mutual Fund and SBI Mutual Fund have been strong contenders for the Top Slot in the New Fund Euphoria.

So the question boils down to “How does then one decide if the New Fund Offer of the so many being launched every other month is suitable for me”.

Before answering this question, first 3 Common Mistakes all investor should be aware of:

(a) Too less or Too many aren’t good enough
I have seen many investors having anywhere between 16-85 funds or some who have just one or two. Having too many in the name of diversification is no good and in fact defeats the very purpose of diversification.

After all the one of the reasons you opt for a mutual fund is to diversify your investments but having all large cap funds in your portfolio is unlikely to do any good.

At best based on the size of your portfolio, spread your investments across in 4-9 different funds spread across different Mutual Funds, fund managers, investing styles, expense ratios, portfolio turnover, market capitalization and whether its an all equity, balanced, or tax planning fund. Give Sectoral funds a complete miss unless you are very bullish on the sector and understand the risks well.

(b) Rs. 10 NAV is not cheaper than Rs.100 NAV
What you should be concerned about is the% fall or% rise. A Re. 1 fall in a NAV 10 fund is the equivalent of Rs.10 fall in a NAV 100 fund. In fact Rs.100 means proven competence and a long track record of capital appreciation. (Also read - Demystifying NAV myths)

(c) Don’t fall for fancy terms
Don’t fall for fancy and general terms such as Investing in India‘s growth potential, Options and Derivatives to diversify your portfolio. See if there are any existing funds with longer track records with similar investment objectives & strategies.

If there are, opt for the tried and tested ones rather than going from newer exotic ones.

How to decide if the New Fund is an appropriate one for you?

1. Take a look at your Financial Plan if you have one or at your existing portfolio. What kind of funds do I have in my existing portfolio? Are they large cap funds, mid cap funds, flexi cap funds, balanced funds, tax planning funds?
2. The next to see is how does this new fund really add value to my existing portfolio? How does this New Fund fit into my portfolio, my asset allocation, and help achieve my goals? This is a million-dollar question. (Also read - Investment lessons from Sachin Tendulkar)
3. Is this really a New Fund with an interesting theme that might fit well within my portfolio? Understand the investment objective, strategy and asset allocation of the fund.
4. What has been the fund manager’s track record of managing other schemes? Which are the other schemes managed by this fund manager? How have they performed in the past? Especially what has been his previous funds performance during tough times like the May 2006 mayhem, 2000 crash etc.
5. How stable is the investment team of the fund house and how many schemes are they managing? What is their track record of launching new funds? If the fund house is notorious for launching new schemes once every 2-3 months, you will be better off skipping such schemes or fund houses altogether. (Also read - 7 investment tips to improve your returns)
6. If after doing this, you still cannot figure out if you should opt for the new scheme, seek the advice of your financial advisor.

Growth or Dividend - How to make the right choice?

2008-02-05T17:29:00.000+05:30

Mutual Funds offer three options:

* Dividend
* Dividend Reinvestment and
* Growth

Which is the best and why?

In my experience as a financial and investment planner, I have largely found that investors tend to give a lot of time and importance to the process of selecting a mutual fund. However, once a particular fund is chosen, choosing an investment option is done on an almost arbitrary basis. Some like the idea of receiving periodic Dividend, some like recurring investments and hence choose the Dividend Reinvestment option and others choose Growth. And some even leave the entire exercise to the discretion of the agent or distributor.

However, choosing the correct option is perhaps as important to the health of the investment as choosing the particular mutual fund is. What are the various factors one should consider and why?

Background
There are two factors that are of prime importance when choosing an investment option - a. Fiscal policy b. Your investment needs and goals.

Both these factors play an important role and let us see how we can tweak each for the maximum benefit.

Choosing the Dividend Option - Drawbacks

Before considering the drawbacks, let us look at the benefit of choosing the Dividend option.

The foremost and the most obvious benefit is that the dividend is tax-free --- in the real sense of the term. Though all MF dividends are tax-free, dividends received from non equity-oriented schemes are subject to a distribution tax of 14.025%. This means that though such dividend is tax-free in your hands, you are receiving 14.025% less than what you would have otherwise received. This by inference means that it is you who is bearing the 14.025% tax, the MF only pays it on your behalf.

Dividends from equity schemes do not suffer this distribution tax and hence are truly tax-free. Then shouldn't all investors choose the Dividend option? Isn't this entire discussion a non-issue?

Not so fast. Let's consider a live example --- that of Franklin India Prima, a scheme that has been in existence since November 1993.

As on 19th June, 2006, the NAV of the Growth Option of Prima was Rs 153.86 whereas that of the Dividend Option was Rs 48.99 - almost 68% lower. Why is this?

The difference is the dividend received by the investor.

It should be understood that dividend from a mutual fund, unlike stock dividend, is your own money coming back to you. Therefore, had you invested in the Growth option of the scheme, the NAV of Rs 153.86 would apply to you. But since you have chosen the dividend option, periodically, some of your investment amount was paid back to you (by calling it dividend) and hence the market value of your units is Rs 48.99.

Now, also note that the scheme performance is calculated based on the Growth option NAV. Actually, technically, it doesn't matter, which NAV is chosen, as the dividends received are assumed to have been reinvested in the scheme at the Internal Rate of Return or the IRR. But without getting into mathematical jargon, it suffices to say that the Prima performance (which has been nothing less than spectacular) is based on the NAV of Rs 153.86 and not Rs 48.99.

So far so good. As long as you needed the dividend, all this really doesn't matter. But my next question is what one should do when the dividend comes and sits in your bank? Do you reinvest it in the same scheme or for that matter into another scheme? If so, do realize that you are reinvesting the money in the same asset class --- Equity. It needn't have come out of the asset class (in this case Prima) in the first place! Plus you may have to bear a load for the fresh investment. Of course, your distributor is happy since this means extra commission.

The second problem is agility. You may forget that the scheme has paid dividend and the money is lying in your bank. It happens. Or even if you are well aware of the fact, the market is behaving in a whimsical manner and this volatility is delaying your decision to enter. The money again sits in your bank.

All this time, when the money relaxes in your SB account, the rate of return of your investment is falling. The reason is simple arithmetic. The capital that is invested in Prima is growing at the IRR as discussed above (44% for the last year, 69% over 3 years and almost 26% since inception). However, the dividend that is lounging in the bank is growing at just 3.5% p.a, which is the SB interest rate. Over time, this substantial difference in the two rates dilutes the net return on the investment. More the time spent in the bank, more the dilution.

Other Reasons for choosing Dividend
Of course there are a couple of excellent reasons given to me by investors for choosing the dividend option. One is of course, needing the funds for day to day life. The second one was that getting dividend in a rising market is like partial profit booking, which is good form. The funds representing dividend can be invested into fixed income avenues or even fixed maturity plans thereby rebalancing the asset allocation.

Excellent arguments that cannot be argued with, per se. Only one hitch. Unlike fixed income avenues (such as PPF, RBI Bonds etc.) when the interest is fixed, not only in terms of the amount but also the timing thereof, dividends from mutual funds are at the discretion of the mutual funds. One never knows how much would one receive and when. In other words, the fund manager may decide not to distribute dividend. Or he may decide to distribute much less than what you need. Or much more than what your intended shift of the asset allocation dictates. What do you do?

There is a simple solution. Ask for the dividend yourself.

Yes, you read that right. You can ask for the dividend. To put it differently ---

'When the MF pays you money, it is called dividend. When you yourself withdraw an equivalent amount, it is called capital gain!

We all know that after one year, withdrawals (capital gains) from a mutual fund are tax-free. Therefore, for your annual dividend requirement, do not depend upon the whims of the mutual fund concerned, instead withdraw the funds as per your requirement.

This way, you can earn dividend not at the whim of the Mutual Fund, but at your fancy! The value of your investment remains the same, whether dividend is paid to you by the MF or whether you redeem units of an equivalent amount.

To Sum Up
The psychology of investing, fiscal policy and your requirements from your investments, all go hand in hand in deciding the optimal option to choose from. As fiscal policy stands today, the dividend option doesn't stack up against the alternatives. However, if tomorrow, long-term capital gains tax is imposed, this strategy wouldn't work and the dividend option would once again come to the fore.

Deal Digest: Jaguar deal tells success story of Indian management

2008-01-30T17:27:00.000+05:30

Tatas finally got the expected result in their chase for the two marquee automobile brands, Land Rover and Jaguar. The bid itself reaffirmed what has been written earlier, Indian managements have become increasingly confident of their own skills.

While Tatas were successful in this bid, their efforts in buying Orient Express Hotels were rebuffed with incumbent owners raising issues about being owned by an Indian company. It seems global perception hasn’t really caught up with what the Indian managements think of themselves.

In fact, the biggest developing investment theme about India and Indian companies is this, ‘The India management story’. Translated this means, bet on Indian companies simply for superior management skills. Brokerages and funds love investment themes. There have been three dominant themes about investing in India, consumer, outsourcing and more recently infrastructure.

The consumer theme is driven by India’s increasingly affluent consumer class, and it remains a strong theme. While till the 90s it drove FMCG stocks, in recent years, it threw up big telecom companies. Next it will throw up retailers and financial powerhouses, spanning broking, asset management and insurance.

One could say the real estate story, which has thrown up the likes of DLF and Unitech, are also driven by the consumption theme. The outsourcing theme, which was about more labour arbitrage, is fading a bit, given the rising costs of doing business in India.

So the Infys and Wipros aren’t the most-valued Indian companies any more. The infra theme is strong, and is for example, behind the birth of a company like Reliance Power, which aims to get a valuation of around $25 billion. That must be some sort of a record for a start-up. Infra theme has also spawned the likes of GVK, GMR, ABG and so on.

To all this, it is time analysts added a fourth, and potentially most potent story, the India management/entrepreneur story. And it is not just large corporate houses like the Tatas, which are betting on Indian management and entrepreneurial abilities.

The likes of Suzlon, Aban, Punj to name some, are first generation entrepreneurs thinking global markets from a very early stage. And they are beginning to show that Indian managements can often create superior value compared to western managements.

Take the case of Suzlon. It listed its subsidiary Hansen Transmission International on the London Stock Exchange in December. Hansen listed at a valuation of around euro 1.6 billion. Suzlon had acquired 100% of Hansen, which makes gearboxes for windmills, in May ’06 for around euro 640 million.

This means that under the new management, Hansen appreciated 2.5 times in around 18 months. Looking at Hansen financials, while there is no dramatic difference in P&L, there is a sharp change in two areas, cash flow from operations and capex. Hansen appears to have benefited in two areas, working capital management and growth.

From ET 7 Jan 2008

RBI says real GDP growth moderated to 8.9% from 10.2%

2008-01-30T17:24:00.001+05:30

The Reserve Bank on Monday said real GDP growth moderated to 8.9 per cent in Q2 of FY'08 as against 10.2 per cent in the year-ago period.

Real GDP growth during the first-half of 2007-08 was estimated at 9.1 per cent as compared with 9.9 per cent in the year-ago period, the apex bank said in its Macroeconomic and Monetary Developments Review released here.

While agriculture and allied activities clocked a higher growth during H1 FY 08 over the corresponding period of the previous year, the growth in industrial and services sectors was somewhat lower than in the previous year, the BRI noted.

On agriculture, the RBI said the sowing of kharif crops improved during 2007-08 on account of satisfactory rainfall during the wouth-west monsoon and remunerative market prices.

The reported sown area as on October 26, 2007, was about 2.7 per cent higher than the previous year.

In contrast, area sown under rabi crops (up to January 18) has been about 3.7 per cent lower than a year ago, the RBI said.

Rabi sowing was lower in case of rice, wheat, pulses and oilseeds, but higher in case of coarse cereals than in the previous year, it said.

The first advance estimates for 2007-08 have placed the total kharif foodgrains production at 112.2-million tonnes, which though lower than the target, was about 1.6 per etn higher than that of the previous year (110.5-million tonnes).

From ET 28 Jan 2008

Economy to grow at 8.5% despite inflation worries

2008-01-30T17:21:00.000+05:30

The Reserve Bank of India (RBI) expects the economy to grow at 8.5% this year despite expressing concerns on inflation. Next year too, the tempo is expected to be maintained, despite concerns over global slowdown.

In the quarterly review of the monetary policy released on Tuesday, the central bank said, “The projection of overall real GDP growth in 2007-08 is maintained at around 8.5% for policy purposes, assuming no further escalation in international crude prices and barring domestic or external shocks.” This could mean that if global crude prices rise further, then the 8.5% growth may slip.

Responding to a query at the media conference, post-release, RBI governor YV Reddy said, “In FY09, expectations are that we will continue to grow at the same magnitude as this year despite a global slowdown. This means we will be stronger and will be able to withstand the global slowdown.

The prospects of the economy for the rest of the year is in line with policy expectations, according to RBI. There has been a modest deceleration in output growth in the second and third quarters and the ongoing investment boom should improve supplies.

Corporate profits and business confidence have sustained by the underlying macro fundamentals, while banks have become stronger and sounder than before. Financial markets have been orderly and insulated so far from the turmoil in global markets on account of the subprime crisis though there has been unusual volatility in equity markets that is, to some extent, influenced by global developments.

In the external sector, the current account deficit remains well within sustainable limits, with net invisible surpluses offsetting the trade deficit to a considerable degree.

But the expansion of monetary and liquidity conditions as well as asset prices add to the risks of upward inflationary pressures, alongside international price pressures, particularly on account of oil and food prices.

The review has noted that agriculture GDP has recorded above-trend growth in the first half of 2007-08 with kharif foodgrains production placed higher than in the preceding year. On the other hand, industrial activity appears to be experiencing some transient and cyclical effects affecting manufacturing performance.

With the momentum of growth in the services sector expected to be sustained, drawing from leading indicators, the projection of overall real GDP growth in 2007-08 is maintained at around 8.5%, the central bank said.

From ET 30 Jan 2008

India not stealing western jobs

2008-01-30T17:18:00.000+05:30

Countering the rancour in the West against outsourcing of jobs, the chairman of IT major Wipro has said India was not stealing their jobs and its businesses were moving into developed countries which did not have enough skilled graduates to compete in the global economy.

"What is of concern is how serious a shortage of technical talent is building up in the western world. Global companies are going to where not enough young boys and girls are getting into math, science and engineering. That trend is not being reversed," Wipro chairman Azim Premji said.

Premji said that as Wipro expands into other countries, it often has to hire graduates from other disciplines and then send them to its campus in Bangalore to be trained in software engineering and other technical skills.

Premji said the talent shortage makes a mockery of the claim that India is stealing jobs from the West.

"Making rhetoric of jobs getting displaced in North America or Europe is not answering the question," he said. "Jobs are getting displaced because there's not enough talent there to fill those jobs."

Premji said that with the company's Canadian operations growing rapidly, it will need more and more skilled graduates here. He said he expected Wipro's Canadian business to grow by 50 per cent a year as it takes on new clients, while hiring more Canadian engineers, executives and technical staff.

"Canada is a focus market for us," Premji said over lunch at an Indian restaurant in Mississauga, just west of Toronto. "We believe we can grow this market quite aggressively."

Until now, Canada has been a small part of the Wipro Empire. Its 500 staff in Toronto, Windsor, Ottawa and Calgary help generate about $100-million of the global company's $5-billion in annual revenues.

The bulk of its staff works with Nortel Networks developing telecommunications switching equipment.

But the Canadian operation has gone from three clients to 20 in the past 18 months while adding 160 staff and setting up a dedicated sales team.

Moving beyond telecom, Wipro is also courting Canadian insurance firms and energy utilities.

From ET 30 Jan 2008

'Sir Sachin' if Brown has his way

2008-01-21T11:06:00.001+05:30

Can Sachin Tendulkar join the honoured ranks of Sir Don Bradman or Sir Gary Sobers? Well, British Prime Minister Gordon Brown certainly seems to think so. If he had his way, he would recommend the little master for a knighthood.

"I would like to see some of the great players of the modern era — like Sachin Tendulkar — proposed for honorary awards so the British nation can salute their achievements in these sports."

If Brown's remarks come true, we could be looking at the first Indian sports knight. In between courting trade and investment from India and China visiting British Prime Minister Gordon Brown showed where his heart really lay — at the WACA stadium in Perth.

Complimenting India on its test victory over Australia, Brown shed his normally grave countenance.

"I congratulate India on a famous victory - beating an Australian side who have won their last 16 games and doing so away from home."

England's long cricketing feud with Australia clearly fuelled Brown's enthusiasm for India's historic win. Cricket has long been one of the great binders of Indo-British ties. And until some time ago Commonwealth cricketers were honoured by the UK.

As Brown said, "I believe it was a good tradition to celebrate the achievements of the great Commonwealth cricketers. Obviously these are issues for the independent honours committee, but - hope they will consider it."
So we can hope to see a 'Sir Sachin'.

From TOI : 21 Jan 2008

Incredible win at Perth

2008-01-21T11:05:00.000+05:30

India recorded one of their most amazing Test triumphs overseas when they beat Australia by 72 runs in the thrilling third Test to snap the champion team's record 17-match winning streak on Saturday.

Set 413 to win a world record 17th Test in succession, the Australians were dismissed for 340 to allow the spirited visitors to reduce the margin to 2-1 in the four match series with one full day to spare.

Not many had given the Indians any hope at the WACA, regarded as the fastest pitch in the world, but Anil Kumble and his men came out firing on all cylinders to not only pull off a sensational victory but raise hopes of levelling the series.

The Indians celebrated wildly and hugged each other after RP Singh castled last man Shaun Tait, bringing an end to a dramatic Test which saw fortune fluctuating from one team to the other on the four days.

It was a remarkable show of character by the Indians who did not allow the acrimonious events of the Sydney Test to affect them as they went about plotting the demolition of the champion team.

From TOI : 21 Jan 2008

Pak greats hail India's victory in Perth

2008-01-21T10:59:00.004+05:30

Pakistani cricket greats on Saturday hailed the 'character' and 'courage' shown by the Indians, who upstaged Australia in the Perth Test to bounce back from their back-to-back defeats in Melbourne and Sydney.

Congratulating Anil Kumble and his boys for the historic Test win over Australia, former captains Inzamam-ul-Haq, Javed Miandad, Intikhab Alam, Rashid Latif and Moin Khan said the Indian victory was good for world cricket as it would make other teams work harder against the Australians.

"It is a very creditable victory because they were beaten badly in the first two Tests. Beating Australia in Perth is a big achievement and the Indian team deserves all praise. The Australians were just not able to click from day one in this Test. The Indians put the pressure on them well," Inzamam said.

He felt that while the controversies of the previous Test had increased the pressure on the Australians, it had united the Indians and made them lift their game to greater heights.

"The incidents that took place at Sydney united this Indian team and made them more determined to show the world that Australia can be beaten," Inzamam said.

Miandad, who has had a number of battles against the Australian bowlers, said beating the world champions in Perth was never easy.

"Perth has always been Australia's hunting ground and overseas teams rarely win there. In that sense, India did really well," he said.

Miandad also appreciated the cool captaincy of Anil Kumble and for inspiring his boys with his bowling and batting.

Former wicketkeepers Rashid Latif and Moin Khan felt the Indians had displayed far greater mental resilience than the Australians.

"I think the fact that the Indian board, media and former players backed them after the controversies in Sydney had an uplifting effect on Kumble and his men. In contrast, the Australians came in for a lot of criticism for their behaviour and this affected them," Latif said.

The former captain said India's win was good for cricket as it would inspire other teams that they could also beat Australia.

Moin said India's victory was not surprising given that they have the best and most experienced batting line-up in the world.

"I think any team with Sehwag, Rahul Dravid, Laxman, Tendulkar and Ganguly should do well even in Australia. But their bowlers deserve a lot of credit for bowling with a lot of fire and discipline," Moin said.

Another former captain Intikhab Alam, however, warned the Indians not to become complacent and advised to settle down quickly.

"The Australians are a great side and they missed Matthew Hayden and got their bowling combination wrong by not playing a spinner. But I know they will be back stronger and India will have to give a more improved show to win the final Test and draw the series," Intikhab said.

Former Test batsman Haroon Rasheed was of the opinion that while India deserved all kudos for their victory, the umpiring on the fourth day against Andrew Symonds and Mike Hussey also showed that neutral umpires were the best solution for international cricket.

From Indiatimes : 20 Jan 2008

Aussies knocked off their perth

2008-01-21T10:59:00.003+05:30

In a way, it all began at Sydney. Done in by atrocious umpiring, reeling from the three-Test ban handed out to Harbhajan Singh, Team India closed ranks.

Perth - reputedly the world's fastest pitch - was supposed to be Australia's impregnable bastion, the battleground where India would be humiliated. Instead, the entire squad combined to script one of the most romantic tales in a sport replete with instances of the improbable - and posted one of India's finest victories ever.

They say it's easier to steal gold from Fort Knox than to beat Australia in Perth. On Saturday, India not only stole a historic win under Aussie noses, but also rubbed them into the ground, beating the world champions by 72 runs in under four days at the WACA, the ‘home' of Australian cricket.

This wasn't a mere sporting triumph. The last fortnight had witnessed some of the most acrimonious moments in Test history. The controversial loss in the Sydney Test had led to national outrage in India and plenty of soul-searching among the Kangaroos. In this backdrop, with Australia chasing a record 17th straight win in its pocketborough, the

Perth stunner provides catharsis for both Team India and its billion plus fans.

Asked where he would place this win, Indian skipper Anil Kumble said: "Right at the top. Since I made my debut we have won quite a few Tests, both at home as well as overseas, but I can safely say our victory here rates among the very best. I am proud of the way my team has played and we can all go to Adelaide with our heads held high."

When Harbhajan Singh ran onto the ground holding the tricolour aloft, it signalled the beginning of a new era in Indian cricket, for it was fashioned by youth but tempered with experience.

Irfan Pathan deservedly won the Man of the Match award for his all-round display, but there were lots of other contributions. If Dravid and Tendulkar showed the way in the first innings, Laxman ensured that the final target would be beyond Australia's reach. A hostile spell from 19-year-old Ishant Sharma, who had Australian captain Ricky Ponting dancing to his tune before claiming his wicket, led India's charge.

The remaining obstacles were cleared by Kumble, R P Singh and Sehwag, whose part-time off-spin came in handy too. Now, it's over to Adelaide from Thursday. And the word is out: the all-conquering Aussies are all too beatable.

Turning Points

Sehwag's sage advice: Ricky Ponting was clueless about Ishant Sharma's in-cutters. But he grimly hung on. Sharma was about to be taken off when Sehwag, his Delhi skipper, advised Kumble, "Ponting's at the other end. Give him one more over." Sharma promptly had Ponting edging to Dravid at slip, giving India the first wicket of the day (117/3).

Rauf call for Hussey: The Australian left-hander with a Bradmanesque average seemed to be judging most balls pitched outside the off-stump to perfection. He also survived a close leg-before call. But the same umpire, Asad Rauf, raised the dreaded finger to an R P Singh delivery that could have gone well above the stumps (159/4). A big setback for Oz.

Symonds in fine nick: Andrew Symonds is among the luckiest batsmen in this series, having benefited hugely from umpiring errors and fielding lapses. On Saturday, it all "evened out", as he had said in a press conference earlier. Harbhajan's best friend was declared lbw off Kumble despite getting an inside edge (177/5).

Viru too good for Gilchrist: Adam Gilchrist was the dangerman India dreaded. But an inspired move by Kumble to introduce part-time off-break bowler Sehwag cut short his ambitions. Sehwag bowled him round the legs, with Australia still 186 runs away from the target (227/6).

Pathan all ears: When Michael Clarke was eighth out, Australia needed 160 runs to win. The match was as good as over. Or was it? The ninth-wicket pair of Mitchell Johnson and Stuart Clark hammered 73 runs. Finally, Irfan Pathan broke the stand, then cupped his ears to indicate he couldn't hear the applause (326/9).

From Indiatimes : 19 Jan 2008

Decline of golden era: Australian media

2008-01-21T10:59:00.001+05:30

Struggling to digest the defeat India rammed down the hosts' throat in the third Test, a section of the Australian media on Sunday reacted with dented pride and hurt ego as it sought to pick holes in the visitors' emphatic win. Another section came down hard on their side and praised India’s victory.

Stung after Anil Kumble and his comrades-in-arms halted the Australian juggernaut, denying them a record 17th straight Tests win, a section of the media here cried foul, blaming the defeat to India's financial clout and the game's "weak-kneed" governing body.

"India's stunning performance in the third Test at the WACA should be dedicated to a lot more than the 11 players out on the field," a whining report in the 'Courier Mail' said.

"They should share their pay cheques with their bullying officials back home, the weak-kneed administrators at the International Cricket Council and certain members of the media who have taken every opportunity to put the knife into the Aussies since this series began," Mike Colman wrote in the daily.

The barrage of criticism after the acrimonious Sydney Test had forced Ricky Ponting and his teammates to discard their ruthlessness and the rather civilised approach to the game never really worked for them, he said.

"Remember that scene in one of the Rocky movies where Rocky's trainer tells him he's no longer feared by his opponents?

'Kid,' he says, 'the worst thing that could happen to a fighter happened to you. You got civilised.'"

"In the space of a week the Australians got civilised...So instead of a confident, arrogant, winning team, we get a nice, civilised one. Maybe a losing one," it rued.

"The way the ICC backed down to financial clout of the Indian heavies, the way the Australian authorities panicked over the effect of bad publicity on sponsorship dollars and success of the anti-Ponting campaign stirred up by a former England B captain who now calls Australia home, all combined to back the team into a corner," the Courier Mail said.

'The Daily Telegraph' , however, struck a more balanced note as it doffed its hat at the Indians, while ruing the end of Australia's golden run. It said the Perth defeat was a hint that Australia couldn't take its pole position for granted.

"Welcome to the future, Australian cricket fans. Welcome to a world where your team will remain among the best sides in the world but will have to work like drover's dogs to subdue their closest rivals, particularly away from home," it said.

"We have seen the end of a golden era and will have to get used to the occasional silver and bronze medal against teams ready to answer our best sledges.

"The fortress was attacked in Sydney and the barricades finally fell in Perth," the report read.

"The most challenging era of Ricky Ponting's captaincy starts this morning," it said, adding the team was yet to fill the void created by the retirement of a bunch of star players.

"The post Warne-McGrath adjustment that had to happen has finally kicked in. We have learned that Phil Jaques is not Justin Langer, that Shaun Tait is not yet Jason Gillespie, that Shane Warne is irreplaceable and that if you take Matthew Hayden out of the team it hurts everywhere."

The daily was gracious enough to heap praise on Kumble and his team. "Even as Australia despairs, world cricket is rejoicing at the discovery of a team who not only do not fear Australia but actually fancy their chances against them.

"No praise is high enough for an India side whose entire pace attack is younger than Tait," it said.

"Australia is being threatened by a new breed of Indian, whose confidence was embodied by a gesture from young quick Irfan Pathan yesterday, when he held his hand up to his ear to the crowd after taking the ninth wicket," the report added.

'The Age' shared the sentiment and sensed a hint of decline for the hosts in the defeat.

"Australia's winning streak has been stopped, and its invincibility - and that of its skipper - a bit shaken," it said.

"Suddenly, Ricky Ponting's Midas touch has become a thick outside edge. Suddenly, he has become a little susceptible in all his cricketing endeavours. Suddenly, the game has become to him as Ishant Sharma was yesterday, unexpectedly vexatious and in the end, too much," it said.

"Somehow, three Indian quicks who are all younger than Australia's youngest and had never set foot in Perth previously, exploited the local conditions better than the Australians. This as much as the result will exercise Australian minds; it hints at decline," the report said.

A nostalgic 'Sydney Morning Herald' recalled how at the same WACA ground, he hosts had reclaimed the Ashes last summer.

"A golden run has ended," it rued. "For the second time, India halted an Australian Test winning sequence at 16 games. While superior batting proved the key in Kolkata in 2001, it was the Indians' mastery of swing bowling that proved the major difference in Perth..." it noted.

From Indiatimes : 20 Jan 2008

Incredible,India! Departed brand campaign

2008-01-21T10:58:00.001+05:30

The disconnect between promise and actual delivery has been the death of many brand campaigns, long before they attain maturity. The graveyard of departed brand campaigns is full of tombstones recalling how some of them started off by promising the sun, the moon and far beyond, but actually ended up being huge disappointments. The tourism ministry is trying its hand with a campaign that might end up with a similar outcome.

The tourism ministry is splurging a lot of cash on marketing India as a tourism destination under the “Incredible India” campaign. The ad is running on French TV channels, being printed in Spanish newspapers, pushed under the door in Sweden as direct mailers. The ad shows an elderly and well-to-do couple, with the gentleman seemingly into his initial years of retirement. He and his wife enjoy the kaleidoscopic nature of a typical Indian holiday, coloured by the multiplicity of cultures and the multitude of pleasurable opportunities.

Why chose an elderly couple? After all, it is has almost become mandatory in advertising today to show a kid or, at least, a young couple. Arguably, given the demographic profile of the country, where 50% of the population is below 35 years of age, it might make sense to go after the young and moneyed. So, why does “Incredible India” want to do it differently?

The immediate answer is obvious. It’s job is to attract tourists to India from the western world. Europe’s, as well as USA’s, demographic profile is in complete contrast to that of India. The bulk of the population there is ageing, on the verge of retirement or has already retired. The spending power, by and large, is with these guys. So, get the target audience into the ad. Simple solutions to simple problems.

Guess again guys. There’s more at play here. The campaign also tries to reconfigure the thick stream of tourists coming into India. The attempt seems to be to shift the country into a higher spending destination, compared to its historical, low-budget trap - hippie haven, spiritual shangri-la or plain backpacking bohemia. Many Goa citizens keep complaining that their state has got positioned as a “cheap” destination and that needs to change. The “Incredible India” campaign attempts to achieve some of that.

But where does it fall short? Execution. Sure, the campaign might be able to attract newer tourists and may have been able to even convince part of its target audience to buy into an Indian holiday. But, wait till you know their side of the story. There are two problems confronting the tourism strategists.

One, of an immediate nature, is the depreciation of the dollar against the major global currencies, making world travel expensive for the average American tourists. But, given that those with money don’t care about currency fluctuations, and that Europeans do not have a similar problem, makes it not such an insurmountable problem for our target tourist.

What is, though, is the last mile connection. True, it’s all available for somebody like Madonna, but the routine tourist usually goes back feeling gypped. And, that’s because touts have been given a free hand. Walk into any major airport or railway station in the country and the first thing that hits you with gale-force is the overwhelming presence of middlemen, offering everything from currency conversion to taxis, sordid hotel rooms to “promising” holidays.

But, the one thing you find missing is a proper tourism office. Even if you do find one, there’s usually no one manning it. And if, by some weird stroke of luck, you do find some hapless soul sitting there, he will turn out to be of no help.

Most places don’t have an organised car hire infrastructure. Again, in many places you will find that private operators virtually rule the system. For instance, if you’re travelling to Sikkim and are looking to hire a car from the tourism office in Siliguri, the mafia hanging outside will make sure - without exerting too much effort, of course - that you hire cars only from them, at their prices.

The staff at the tourism office can only shrug and look away. This is a story repeated in most tourism offices across the country. Another issue: all historical monuments charge differential pricing to foreign tourists. Do Indians travelling overseas have to pay different rates to visit the Louvre or to the climb the Eiffel? Non, nyet, nein. Discrimination seems to begins at home.

The mass of tourism operators and administrators likes to call itself an industry. The problem lies there. Unlike an industry, which has systems, processes and regulators, the tourism industry in India depends mostly on some formal and lots of informal connections. There are no standards.

Any hole-in-the-wall can begin a tourism shop tomorrow. No minimum benchmarks, no minimum capital. One is not suggesting that the government reinstate a licence regime. But, without all the trappings of a proper industry gold standard, “Incredible India” is probably letting some of the potential earnings slip through its fingers.

From ET : 20 Jan 2008

Rupee eases on concerns about equity

2008-01-21T10:57:00.002+05:30

The rupee slipped in early deals on Monday on concerns that losses in Asian markets should prompt overseas investors to pare holdings in local assets, amid fears of a recession in the United States, dealers said.

At 9:15 am the partially convertible rupee was at 39.345/355 per dollar, slipping from the previous finish of 39.29/31. It struck a decade-high of 39.16 in November.

Shares fell for a fifth successive day as global gloom prevailed with Friday's drop of 3.5 per cent taking the market's losses for the week to 8.7 per cent, its biggest weekly slide since May 2006.

In 2007, foreign fund buying of a record $17.4 billion of stocks was a key driver for the rupee's rise of more than 12 percent. Foreigners sold about $1.1 billion worth of shares on Wednesday and Thursday, weighing on the local unit.

From ET : 20 Jan 2008

Asian stocks dogged by US recession fears, JGBs rise

2008-01-21T10:57:00.001+05:30

Stocks in Asia resumed their decline on Monday, led by banks like Japan's Mizuho, while the dollar hovered near a 3-year low against the yen after a proposed US stimulus package did little to soothe fears the world's top economy will tip into a recession.

Stock markets in Japan, South Korea and Australia nursed losses of between 1.3 and 3 per cent, dragged lower by banks and financial companies as the sector continues to suffer the worst fallout of the US subprime mortgage crisis.

Demand for government bonds kept Japan's bonds firm as investors sought a safe haven in the face of deteriorating economies and slumping stocks. March 10-year futures hit a 2-year high with a 0.29 point to 138.41. The five-year yield fell 2 basis points to 0.835 per cent, the lowest since January 2006.

Last week President George W Bush called for package of tax cuts and other measures of around $140 billion to $150 billion to shore up the US economy, battered by the subprime mortgage crisis and subsequent credit crunch.

But the move did little to shore up sentiment in stock markets.

"It's clear that investors are still very cautious," said Craig James, chief equities economist with Commsec in Australia. "We'd have to see some strength in Asia on Monday to turn this situationaround. Tokyo's benchmark Nikkei was down 3 per cent by 0133 GMT.

The index has shed a quarter of its value since July, when concerns that the US subprime mortgage crisis would permeate global financial markets first reared their head. Banks extended recent losses on fears they will reveal more credit-realted losses, with Mizuho Financial Group down around 2 per cent.

In Seoul worries over the health of the United States a top export market hit stocks like flat screen maker LG Philips LCD Co Ltd. The benchmark Korea Composite Stock Price Index was down 1.3 per cent.

Australia's S&P/ASX 200 index fell 2 per cent. MSCI's broadest index of shares outside of Japan was down 0.9 per cent by 0113 GMT. The index has shed only around 3 per cent since July as some investors reckoned emerging markets would emerge from the credit crisis relatively unscathed.

MSCI's All Country index has lost 12 per cent in the same period. On Wall Street on Friday the Dow Jones industrial average and the Standard & Poor's 500 Index fell around 0.5 per cent each.
DOWNWARD DOLLAR

Japan's yen held gains against the dollar, supported by an unwinding of risky positions as continuing losses in Japanese stocks kepts investors alert to the possibility of a US recession and its potential effect on other economies.

"There's no change in the momentum to sell the dollar," said Hideki Amikura, a forex manager at Nomura Trust and Banking. "More Nikkei losses are likely to push the dollar/yen lower." By 0128 GMT the dollar traded at 106.83 yen , little changed from late last week, when it fell as low as 105.92 yen, its lowest since May 2005.

Oil inched towards $91 a barrel, with prices supported by the closure of Mexico's oil export terminals due to bad weather, as well as OPEC's dismissal of calls to raise output. US light crude for February delivery rose 33 cents to $90.90 a barrel in Asian trade.

Among metals, gold edged lower as Bush's tax cut plan failed to inspire buying. Spot gold was trading at around $879.00 an ounce, down from $881.90/882.60 in New York on Friday.

From ET : 20 Jan 2008

Gold falls as US measures fail to spark buying

2008-01-21T10:56:00.002+05:30

Gold edged lower on Monday after President George W. Bush's plan to give the U.S. economy temporary tax cuts and other measures totalling about $150 billion failed to inspire buying. Gold prices may have entered a corrective phase after surging to a record high of $914 an ounce last week, but the precious metal could be supported due to weakness in the dollar and uncertainty in financial markets as stock prices slump.

As of 0257 GMT, spot gold was at $878.25/879.25 an ounce, down from $881.90/882.60 in New York on Friday. "Gold has surged to a record high in a very short period of time and now the market could be in a corrective phase," said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo. "Uncertainties are still there in the financial markets even after the U.S. economic stimulus plan. A further slump in stock prices could trigger profit-taking in gold." Gold hit the record high of $914 on Jan. 14. Gold's drop from the record high was partly driven by selling from investors and funds to cover margin calls from losses in stock markets amid fears of a recession in the United States.

Spot gold was capped at the five-day moving average of $882 and the 10-day average of $886. Kageyama said important support would be around $850, which is close to the 25-day average of $851, but gold could be supported as physical buyers from China, India and the Middle East are expected to emerge.

Traders said the market's focus will be on a U.S. Federal Reserve meeting on Jan. 29-30. Spot gold was pressured as the key distant Japanese gold futures were weighted down. The benchmark December contract on the Tokyo Commodity Exchange closed the morning trade at 3,050 yen a gram, down 1 yen from Friday's close. COMEX gold futures fell in Asia after closing slightly higher in New York on Friday. The most active February contract was trading down $1.9 or 0.2 percent at $879.8 from its New York settlement. Platinum edged down to $1,553.50/1,558.50 an ounce from $1,556/$1,561 on Friday.

TOCOM platinum advanced, but technical trend stayed weak after losing 4 percent last week. The key TOCOM platinum contract closed the morning session down 14 yen or 0.3 percent at 5,225 yen a gram. Palladium edged up to 369/373 an ounce from Friday's U.S.

From ET : 20 Jan 2008

Asian economies seen weathering possible US recession

2008-01-21T10:56:00.001+05:30

Asia would be able to weather any recession in the United States, analysts say, because rising trade and investment within the region make it less dependent on the U.S. economy than in the past.

While a severe downturn in the United States would drag on Asian growth by eroding demand for exports, a rapidly growing middle class is fueling orders for automobiles, electronics and housing _ much of which will be supplied from Asia itself.

Voracious demand for oil, iron ore and other commodities to build roads, sewage systems, and office buildings _ especially in the booming economies of China and India _ will also help sustain the region through any US slowdown.

"The US economy is not that important anymore,'' Hans Timmer, a World Bank economist, said in Singapore earlier this month.

Excluding Japan, 43 percent of Asia's exports go to other nations in the region, Lehman Brothers calculates _ up from 37 per cent in 1995.

"China and India represent a bigger presence on the world stage than just a half dozen years ago,'' said David Cohen, director of Asian forecasting at Action Economics in Singapore. China, in particular, has ``more it can bring to buffer whatever happens in the U.S.''

A drop of 1 percentage point in U.S. economic growth would shave 1.3 percentage points from China's growth rate due to lower exports, Citigroup estimates.

Since China is growing so fast, that isn't likely to make much of a dent. China's economy will still expand 11 percent this year, slightly slower than in 2007, Citigroup projects. Lehman Brothers forecasts 2008 growth will drop to 9.8 percent, still remarkably strong.

But Rajeev Malik, an economist with JPMorgan Chase in Singapore, cautioned that growth in China and India could not make up all the slack of a U.S. downturn.

"Demand in industrial countries is still pretty important for the rest of Asia,'' Malik said. ``While China, and to some extent India, offer some offsetting demand, there will still be some downshifting in activity if the U.S. goes into recession.''

If the US enters a recession, India's growth will likely slow to 7 percent from the current rate of about 9 percent, he predicted.

Asian stock markets _ many of which had stellar runs last year _ have tumbled in recent weeks amid worries that a slowdown in the U.S. will hurt exporters' profits. Since the start of the year, Japan's Nikkei 225 index has declined more than 12 percent, while Hong Kong's Hang Seng index is down more than 11 percent.

Markets fell again Monday in Asia as investors appeared unimpressed with the stimulus plan U.S. President George W. Bush announced Friday.

Still, some analysts say some stocks appear oversold and the drop may present a buying opportunity.

Japan, the world's second-largest economy, may suffer the most from a U.S. contraction.

Ryutaro Kono, chief economist at BNP Paribas in Tokyo, predicts that the nation's economic growth will drop this year to about half of the 2 percent it has marked in recent years.

"The damage from the overseas economic problems hasn't really surfaced yet,'' Kono said. ``But it will be coming.''

Lower demand for exports could even have a silver lining for China by restraining inflation, which has soared to the highest level in more than a decade.

"If China's exports slow down significantly, you definitely will see lower prices rather than inflation,'' said Minggao Shen, an economist with Citigroup in Beijing.

But he did warn that weaker export demand could leave Chinese manufacturers with overcapacity problems.

From ET : 20 Jan 2008

'Exports to halve in FY 2009'

2008-01-21T10:55:00.000+05:30

Merchandise, software and other services export growth will halve in fiscal 2009 due to the global slowdown led by a US recession with negative implications for employment growth, according to Goldman Sachs. While the Indian economy has sufficient internal ballast to withstand the impact of a US recession, which is being increasingly predicted, it could still lose some momentum.

However, the structural growth story remains intact and opportunities to invest in one of the more dynamic economies will remain plentiful. Goldman Sachs has revised down GDP growth forecast to 7.8% from 8% for FY09 due to a larger slowdown in external demand. Export growth will halve in FY09 to 9.8% from 18.6% due to rupee appreciation and global slowdown.

The key export sectors of software, textiles and apparel, gems and jewellery will be most affected. The IT sector revenue growth could go down to 22% from 39% in 2008, since most of the revenues are concentrated in the US and a recession would reduce discretionary IT spending.

Similarly, textile and apparel exports are already showing a decline due to rupee appreciation and losses could go up with slowing US demand. During the last US recession in 2001, India’s exports fell by 1.6% after growing by 21% in the previous year, with the largest impact in the software, textiles, precious stones and vehicles parts sectors.

Exports are showing a slowdown already due to rupee apreciation. In rupee terms, exports have grown by only 8.5% in the year to November compared to 31% in the same period in the previous year, even though in US dollar terms they have grown by 19%.

Although it will lose some momentum, the Indian economy remains largely on course and there are several positives. Structural factors driving growth, namely higher savings and investment, favourable demographics, rapid urbanisation and productivity catch up, remain in place. The economy has relatively weaker global linkages than the rest of Asia.

India’s exports are about 17% of GDP compared to the non-Japan Asia average of over 40%, with domestic demand playing a correspondingly larger role. Urgent infrastructure, construction and retail needs will continue to spur investment and growth.

The booming stock market, which has increased more than 45% in 2007, and has increased five-fold since 2003, will continue to support demand through its beneficial impact on investment by lowering the cost of capital and increasing consumption through wealth effects.

From ET : 20 Jan 2008

Gordon Brown pushes UN, IMF, World Bank reform in India

2008-01-21T10:54:00.000+05:30

British Prime Minister Gordon Brown on Monday was to outline his views on institutional reform in world bodies like the United Nations as he wraps up a two-day visit to India.

The speech to business leaders in New Delhi has been billed by his office as an outline of one of Brown's main foreign policy priorities, and an attempt to secure Indian backing for his plan due to its growing clout on the world stage.

Britain already supports moves to make India a permanent member of the UN Security Council -- a reflection of its status as an emerging economic powerhouse increasingly courted by world leaders.

Excerpts of Brown's keynote speech released in advance by his office showed that he believes institutions set up after World War II like the UN, the World Bank and the International Monetary Fund no longer reflect the status quo.

Reform could help boost both "the new world order" and "the new global society", he was to say.

"The task ahead is to agree for our time the rules that can make globalisation a force for hope and progress for people.

"I believe that only in this way can globalisation become what it should be: a force for justice on a global scale."

Brown arrived in India from China on Sunday. Both countries are among the world's fastest growing economies and like many European countries, Britain is keen to court them in order to boost lucrative trade ties and other links.

According to Britain's Foreign Office, relations between the two countries are at their healthiest ever. Brown indicated Sunday that Britain -- the former colonial power here until 1947 -- was no longer the dominant partner.

Instead he said the relationship was now "a partnership of equals" striving for common goals.

Details of Brown's dinner talks with Prime Minister Manmohan Singh on Sunday were kept under wraps, but Brown has said he wanted to raise a number of issues including climate change and the need to boost counter-terrorism links.

On climate change, Brown has said he would look to secure both India and China's backing for a new global deal to cut greenhouse gas emissions when the Kyoto Protocol expires in 2012.

India -- which with China classes itself as a developing nation -- is opposed to binding targets. Brown said he was not dismayed by India's stance and said New Delhi could play a positive role in securing a new agreement.

On counter-terrorism he said earlier there was a need for all countries to work more closely to help win "the battle of hearts and minds" and isolate "the extremist ideologues who try to poison young people and the views they have".

The situation in military-ruled Myanmar was also to be raised. Brown -- who wrote about the imprisoned pro-democracy leader Aung San Suu Kyi in his 2007 book "Courage" -- urged India to use its influence to help moves to democracy.

Brown and Singh were to hold further talks on Monday. The British prime minister was also to launch closer sporting and educational ties between the two countries and pay his respects to Mohatma Gandhi, revered here as the father of the Indian nation.

Talks with senior government officials and a drop-in with Indian President Prathiba Patil were also planned before Brown heads home late Monday.

From ET : 20 Jan 2008

Software to monitor productivity

2008-01-18T15:05:00.003+05:30

Microsoft is developing software that may help employers to monitor the productivity, competence and physical well-being of employees while sitting at a distance.

The software will even reveal when an employee is stressed or frustrated by reading his/her heartbeat and facial expressions.

A patent application filed by the company reveals that the whole process will be based on a computer system that links workers to their computers through wireless sensors that measures their metabolism.

The system will be able to measure workers' heart rate, body temperature, brain signals, movement, facial expression and blood pressure.

However, civil liberties groups and privacy lawyers are criticising this project, voicing concerns that it may lead to employees’ dismissal on the basis of a computers assessment of their physiological state.

"Imposing this level of intrusion on employees could only be justified in exceptional circumstances," the Sydney Morning Herald quoted Britain's Information Commissioners Office as telling The Times .

Microsoft, which does not generally comment on the progress of its projects, has said in a statement that the use of hear beat data is only an example of the type of monitoring that their software may facilitate.

"This particular patent application, in general, describes an innovation aimed at improving activity-monitoring systems and uses the monitoring of user heart rate as an example of the kind of physical state that could be monitored to detect when users need assistance with their activities, and to offer assistance by putting them in touch with other users who may be able to help," said Horacio Gutierrez, Microsoft's vice president of intellectual property and licensing.

"It is important to keep in mind that with most organisations in the business of innovation, some of our patent applications reflect inventions that are currently present in our products, and other applications represent innovations being developed for potential future use," Gutierrez added.

The US Patent Office had confirmed that the application was published last month, 18 months after being filed. Patent lawyers say that it could be granted within a year.

From TOI 18 Jan 2008

2007 second warmest yr in a century

2008-01-18T15:05:00.001+05:30

Researchers have found that 2007 was the second warmest year in a century, with greatest warming occurring in the Arctic and the neighboring high latitude regions.

Climatologists at the NASA Goddard Institute for Space Studies (GISS) in New York City found that 2007 tied with 1998 for Earth's second warmest year in a century.

The eight warmest years in the GISS record have all occurred since 1998, and the 14 warmest years in the record have all occurred since 1990.

"As we predicted last year, 2007 was warmer than 2006, continuing the strong warming trend of the past 30 years that has been confidently attributed to the effect of increasing human-made greenhouse gases," said James Hansen, director of GISS. "It is unlikely that 2008 will be a year with truly exceptional global mean temperature," he said.

"Barring a large volcanic eruption, a record global temperature clearly exceeding that of 2005 can be expected within the next few years, at the time of the next El Nino, because of the background warming trend attributable to continuing increases of greenhouse gases," he was quoted as saying by the ScienceDaily online .

The researchers used temperature data from weather stations on land, satellite measurements of sea ice temperature since 1982 and data from ships for earlier years. The greatest warming in 2007 occurred in the Arctic, and neighboring high latitude regions.

Global warming has a larger affect in polar areas, as the loss of snow and ice leads to more open water, which absorbs more sunlight and warmth. Snow and ice reflect sunlight; when they disappear, so too does their ability to deflect warming rays.

The large Arctic warm anomaly of 2007 is consistent with observations of record low geographic extent of Arctic sea ice in September 2007.

From TOI 18 Jan 2008

Growth will slow down to 8.5% in 2008-09, says PM's panel

2008-01-18T15:04:00.003+05:30

While there may be signs of growth moderation during the current and the next fiscal, the Indian economy has for the first time logged an average 8% growth during a five-year period.

The latest estimates released by the Prime Minister’s Economic Advisory Council on Thursday has estimated that the economy would grow 8.9% this year — compared to 9.4% during 2006-07 — and is projected to see output rise 8.5% next fiscal.

While there is clearly more optimism in the farm sector, thanks to abundant rains, interest rate hike and appreciation of the rupee seem to have impacted the double-digit manufacturing growth story, which the panel headed by C Rangarajan predicting 8.9% growth during the current fiscal. In fact the impact of RBI’s twin measures seem to have been much higher than was expected earlier with the EAC lowering the forecast from 11.3% in the July outlook.

With the panel suggesting that oil prices need to be hiked to factor in the rise in global crude rates, inflation could immediately cross the 4% level, from the 3-3.5% range.

Despite the gloomy picture on manufacturing, the per capita income is projected to grow above 7% for the third successive year and for the first time, close the year above the $1,000 mark, while the Indian economy would be nearly $1.2 trillion.

In 2008-09, growth rate is expected to dip further as the demand for consumer goods is expected to see a moderate rise, while the farm sector is assumed to be growing at around 2.5%. Even the usually buoyant service sector is likely to see slower growth in trade, hotels, transport and communication.

While Rangarajan was quick to point out that this was the baseline scenario the actual level of rise in economic activity would depend on how the subprime and credit woes play out in the coming months. If it is mild then the impact on India — which the report said was less dependent on the rest of world than China — might be moderate. But in case the problem was deep then it could impact Indian trade and capital flows, Rangarajan said.

With warning of pressure on rupee to appreciate in the immediate future, EAC said government should send "clear signals" to the industry to adjust through productivity improvements and tapping the domestic market instead of focusing on exports.

From TOI 18 Jan 2008

ADB admits lending to poorest Asian countries lacked focus

2008-01-18T15:04:00.001+05:30

The Asian Development Bank admitted in an in-house report released on Friday that many of its loans made over the past seven years have failed to deliver their desired results.

The report assessed the outcome of funds contributed by the Manila-based bank's wealthy Western members to the operation of its Asian Development Fund.

The fund provides concessional loans to its poorest member countries at minimum or no interest.

The report said the administration of some $5.4 billion worth of concessional loans approved between 2001 and 2004 was "less than efficient" and added that there was a "decline in effectiveness in the period."

The study was released amid reports that major donor nations to the ADB are demanding that the bank overhaul its operations amid growing disillusionment with the bank's slow pace of reform.

Concerns about the ADB have prompted the UK to withdraw a commitment to provide more funds, citing a "lack of significant progress on the reform agenda", a reputed international newspaper reported on Thursday.

The in-house report said sometimes conflicting demands by donors as well as recipient governments meant less of the money went to projects meant to advance the United Nations' Millennium Development Goals of reducing global poverty, "such as health and agriculture, and to microfinance."

It said "efficiency has been improving" since 2005, and the adjustments made should ensure some seven billion dollars of soft loans alloted for 2005-2008 are "likely sustainable in terms of effective poverty reduction."

The report urged the bank to "avoid goal congestion in operations and in ADB as a whole" because supervision and resources were spread too thin.

From ET 18 jan 2008

NRI remittances touch new high at $10 bn

2008-01-18T15:03:00.002+05:30

The Indian diaspora seems to be taking a long-term view on India. They are shunning NRI deposit schemes and are sending higher amounts instead to relatives back home.

In the July-September 2007 quarter, remittances touched a new high of $10 billion. While NRIs parked only about $346 million in various bank deposit schemes.

For the fiscal year so far (April-September ’07), while there has been a net outflow of $76 million from NRI deposits, remittances, as reflected in ‘private transfers’, amounted to $18 billion, an amount that the diaspora sent back home until 3-4 years ago.

Remittances, which comprise a portion of the current account on the balance of payments and are permanent in nature, have always been substantially higher than NRI deposits, which form part of capital account and are repatriable, at any point of time in the past. But what is discerning now is the pace at which the two are growing.

Interestingly, the non-resident external (rupee account) (NRE(RA)) is an attractive proposal, when the rupee is appreciating as the foreign currency gets converted into rupees at the time of deposit. It again gets reconverted into dollar at the time of redemption. In a scenario of an appreciating rupee, one tends to get more dollars on maturity of a deposits.

According to Punjab National Bank chairman and managing director KC Chakravarty, rupee deposits fetch a higher returns than in any NRI scheme. Besides, there is a provision to convert rupee funds back to dollars up to $100,000.

Indian Overseas Bank executive director G Narayanan said at a time when stock and real estate markets are booming, it is natural that interest in NRI deposits is flat. Moreover, returns are also regulated.

NRI deposits were marketed by banks initially to shore up the country’s foreign exchange reserves. But in the past few years, with the reserves pile-up getting stronger and forex inflows adding to the liquidity management problems, the central bank is, in fact, trying to discourage such flows through caps on the returns that one can earn on such deposits, especially since the rupee started appreciating against the dollar from mid-2002 onwards.

Besides, in the present scenario, with Indian markets offering better returns on most assets, there is no incentive to convert rupee funds to dollars since returns are higher here, pointed out a banker. Data on NRI investment in other assets such as stock, real estate and other physical assets is not readily available in the public domain (unlike bank deposits).

But a recent RBI study on the use of remittances by the relatives back home shows that about 46% of the proceeds are invested in stocks, properties, bank deposits and deployed in other avenues. Only 54% of the money is used for family maintenance.

Moreover, with the US economy, which has the highest NRI population and a major source of remittances, showing signs of a slowdown, and at the same time, brightening of prospects for the Indian economy, many NRIs are coming back which is also adding to the remittances figure.

From 18 Jan 2008

Annual inflation at 3.79 pc on Jan 5

2008-01-18T15:03:00.001+05:30

Wholesale price index rose 3.79 per cent in the 12 months to Jan 5, higher from the previous week's rise of 3.50 per cent, government data showed on Friday.

The rate was above a median forecast of 3.55 per cent in a poll of analysts. The annual inflation rate was 6.37 per cent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.

from ET 18 jan 2008

Are politicians trivialising the Bharat Ratna?

2008-01-18T15:01:00.000+05:30

The highest civilian award of the country, the Bharat Ratna, has been trivialised with politicians throwing their weight around and demanding the honour be bestowed on their party leaders. After the leader of the opposition and BJP leader L K Advani wrote to Prime Minister Manmohan Singh asking him to give the Bharat Ratna to Atal Bihari Vajpayee, the CPM and BSP entered the fray by demanding the award for Jyoti Basu and Kanshi Ram respectively. Later, it was the turn of Ajit Singh's Lok Dal and the Naveen Patnaik-led BJD to throw their hats into the Bharat Ratna ring. Singh demanded the Bharat Ratna for his late father and former Prime Minister Charan Singh while the BJD wanted the award for the late Orissa Chief Minister Biju Patnaik. The politics over the nation's highest civilian honour has put the Centre in a fix and it is thought that the award may be withheld for the seventh year in a row. The question that arises is: Can't we keep the Bharat Ratna above politics? Or is it necessary that the highest civilian honour must be awarded every year? And most of all, do you think the highest civilian award can be demanded?

From TOI

Why Power IPOs are exciting investors?

2008-01-18T15:00:00.000+05:30

Investor response has been at lightning speed to the initial public offering (IPO) of Reliance Power Ltd—the Rs 11,700 crore issue, the largest thus far in the annals of the Indian capital market, was oversubscribed in a matter of seconds. Several other corporates with a presence in power, including Vedanta, Ispat and Essar, have reportedly lined up IPOs too.

In fact, the monies to be raised via power IPOs in the offing, add up to more than the entire amount tapped in the primary market last year. Does the seeming investor frenzy point at welcome changes on the ground in the vexed, state-dominated power sector which remains mired in runaway losses and routine revenue leakage?

The truth is that the investment norms in power have, at long last, changed for the better, albeit quite recently. Also, there’s much scope for efficiency gains and productivity improvement now that power tariffs as a rule need to be determined by way of competitive bids. So there seems genuine cause for greater investor comfort in power, although “irrational exuberance” cannot really be ruled out.

That said, things appear not all hunky-dory on the regulatory front. For instance, when it comes to power tariffs determined on the basis of capital costs, as say for central generating stations, electricity regulator CERC has come up with some onerous conditions. The markedly different norms laid down for different power producers are avoidable; it may well dampen investor interest. The rigorous cap on tariffs selectively clamped by CERC may actually disincentivise supply and artificially prop up returns for other producers.

The legal basis for investment in power has indeed changed. Now the Electricity Act, 2003 calls for sound market design, transparency and competitive tariffs. It mandates “optimum scheduling and despatch” in supply, and “open access,” so that efficient power producers can competitively seek custom.

Yet, the fact remains that the Act was notified only recently, on June 15 last year. Anyway, the various provisions of the Act, which call for “competition, efficiency, economical use of the resources, good performance and optimum investments” currently have firm legal basis.

Concurrently, competitive tariff bidding implies much scope for attractive returns on the basis of efficiency improvement and cost economies. Note that with power tariffs decided on the basis of competitive bids and meritorder despatch followed in the grid, there is no formal cap on return on equity.

As the tariff notification of the ministry of power of January, 2006 says, “return should attract investments at par with, if not in preference to, other sectors so that the electricity sector is able to create adequate capacity.”

So by aiming for economies of scale, read large generation capacity, setting up thermal plants at coal pit head and competitively sourcing equipment, it ought to be possible to garner handsome returns, of perhaps 25% or more. Note also that with the pan-India demand for power expected to grow at a steady clip, the very real possibility of sustained returns would more likely than not rev up valuations.

Also, with super-critical boilers (more efficient combustion systems) required to be procured for the upcoming ultra mega power plants–each of 4,000 MW capacity–it should mean further productivity improvement in generation.

And a disproportionate share of such projects in one’s portfolio, would surely mean added scope for higher investor returns.

There remain real credit risks in power generation , no doubt, and serious concerns of non-payment by state utilities. But supplying to multiple utilities and large consumers may significantly reduce such risks and make them far more manageable. Meanwhile, the CERC’s tariff order of January 7, 2008, capping tariffs at Rs 4.06 per unit for infirm power read shortterm sales from certain producers, seems more likely to short-circuit supply.

For those with returns liked to capital costs, such as NTPC, the extra offtake is to have mandatory ceiling tariffs. Since similar sales by producers with tariffs not linked to capital costs does not quite invite rigorous caps, the norms do seem unwarranted. The order does underline the fact that there is “a severe shortage of power.”

Additionally, sec 66 of the EA, 2003 is clear-cut on the need for a proper “market (including trading) in power.” With merit-order despatch now the law of the land, what’s surely required is uniform norms across the board in power.

From : ET 18 Jan 2008

Bihar to develop 'oldest' temple

2008-01-18T14:23:00.000+05:30

After initiating efforts to resurrect the ancient Nalanda university, Bihar government now wants to develop the country's "oldest functional" temple, the Mundeshwari shrine in Kaimur district on the lines of Vaishno Devi.

The temple situated atop a 608 ft hill is the "oldest functional temple" in the country where regular prayers have been performed from the past 1900 years, claimed the Administrator of Bihar Religious Trust Board Acharya Kishore Kunal.

Referring to the inscriptions found around the temple and different official records, Kunal, who enjoys the rank of a minister of state, said the "temple was constructed in 108 AD and the practice of worship and sacrifice was continuing ever since".

Kunal said archaeological experts and historians who deciphered the inscriptions found around the temple claimed that the shrine was built during the Shaka era, which predated even the advent of Gupta dynasty in 320 AD.

He said a stone slab, sawed into two with inscriptions in Brahmi script suggested that the temple predated the Gupta period when, because of the influence of grammarian Panini, the script in use was chaste Sanskrit.

The temple, he claimed could be even older as prior to the structure coming up there existed a four-face "mukhlingam" of Shiva, which was worshipped even at that time.

From ET 18 Jan 2008

Sensex touches 21000-mark

2008-01-11T14:09:00.001+05:30

MUMBAI: In a volatile trading, the benchmark BSE Sensex on Thursday crossed the 21000-mark for the first time in intra-day (early trades) but closed below that mark with a gain of 60.68 points. However, mid-cap and small-cap stocks closed in the red after performing well in the last few weeks.

Though metal stocks plunged, oil and gas and frontline fast moving consumer goods (FMCG) stocks performed well. While the index heavy weight Reliance Industries led the rally, ICICI Bank and ITC too contributed to the gain in the benchmark index.

The Sensex touched the 21000-mark in the opening trade and it took 49 days to cover the 1000-point journey from 20000 to 21000. Interestingly, in the current 1000-point journey, the BSE mid-cap index gained 28 per cent and the small-cap index 41 per cent.

The Sensex closed up 60.68 points at 20873.33 and the 50-share Nifty 8.75 points at 6287.85. The mid-cap index closed down by 285.16 points or 2.82 per cent at 9817.07 and the small-cap index by 459.06 points or 3.28 per cent at 13516.13.
Rupee edges up

The rupee on Tuesday closed at 39.27/28 against the greenback, two paise stronger over the Monday’s close of 39.29/30, in anticipation of heavy capital inflows and encouraging trend in equity markets.

In active trading at the interbank foreign exchange market, the Indian unit moved between 39.22 and 39.30 during the day after resuming strong at 39.24/25. — PTI

(From The Hindu Dated: 9 Jan 2008)

Sensex touches 20000-mark

2008-01-11T14:08:00.002+05:30

MUMBAI: The Sensex touched the psychological barrier of 20000-mark on Monday and closed just below that mark at 19977.67, a gain of 734.50 points or up by 3.82 per cent. It was the third biggest single day gain for the BSE 30-share index. The rally of 1-3 per cent in other Asian Markets also supported the Indian bourses to surge and broader markets also participated in the rally. The 50-share Nifty moved up by 203.60 points or 3.57 per cent at 5905.90. The BSE madcap index closed at 8082.54, up by two per cent and the BSE small cap is up by 1.6 per cent at 9705.20.

As the Reserve Bank of India (RBI) to meet the bankers on Tuesday for its mid-term review of annual policy, the markets are expecting a cut in rates. Further, for foreign institutional investors (FIIs), the enthusiasm comes from the expectation that U.S. Federal Reserve is likely to cut rates on Wednesday. With the regulations on Participatory Notes (PNs) have being tightened, the markets are expecting that the RBI would not be harsh with rates.

The Sensex crossed the 19000 mark once again on last Friday and the Sensex ended last week at 19243.17, with a gain of 9.6 per cent compared to the previous week’s close. However, the journey from the 19000-mark to 20000-mark was too surprising.

After the issue of proposed ban on PNs were clarified, the Sensex surged by 879 points on last Tuesday to end at 18492.84.

The broad sectors of the markets also made strong weekly gains.

Capital goods index surged by 20.2 per cent; banking sector index moved up by 16.3 per cent over the previous weeks close. FIIs were net sellers in equities to the tune of Rs. 1,575 crore as on October 25.

However mutual funds bought to the extent of Rs 10.2 billion till that date.

On Monday, the BSE oil and gas index was up by 5 per cent and the BSE metal index was up by three per cent.

The BSE capital goods index gained 7 per cent. The BSE Bankex was up by four per cent. The BSE FMCG index closed with gain of two per cent.

The BSE auto Index gained by one per cent and the BSE IT index gained 0.8 per cent.

(From The Hindu Dated: 30 Oct 2007)

Tata unveils world’s cheapest car

2008-01-11T14:08:00.001+05:30

NEW DELHI: Keeping his promise, made four years ago, to deliver a “people’s car,” Tata Group Chairman Ratan Tata unveiled on Thursday the Rs.1-lakh car christened ‘Nano.’

The world’s cheapest car from the Tata Motors stable comes with a rear mounted all-aluminium two-cylinder 623 cc petrol engine, promises a mileage of 20 km per litre, and meets all emission and safety standards.

“The vision was to give the people of India a car which is not produced anywhere else in the world. Through Nano, which denotes high technology and small size, I have tried to provide a reliable mode of transport to every Indian family,” Mr. Tata told an overflowing press conference attended by Indian as well as international media at the inaugural day of the Auto Expo 2008 here.
Variants

To be formally launched in the second half of this year from its upcoming plant at Singur in West Bengal, the car will initially have three variants — standard and two luxury models.

More variants will be gradually introduced, including a car with a diesel engine. The standard model will cost Rs.1 lakh (excluding taxes and transportation costs). Deluxe models will cost more and their prices will be disclosed at the time of commercial launch.

Mr. Tata said that despite constant increase in inputs costs since the project was conceived four years ago, the company had decided to keep the price tag of the entry model at Rs.1 lakh.

“After all a promise is a promise,” he said, clarifying that it was not he but the media that mentioned the Rs.1 lakh price tag. “But I took it as a challenge,” the doyen of Indian industry disclosed.
3.1 metre-long

Nano is 3.1-metre long, 1.5-metre wide, and 1.6-metre high. “Though it is eight per cent smaller than Maruti 800 [bumper-to-bumper], it is 21 per cent more spacious from inside,” Mr. Tata pointed out. Referring to the safety aspect, he noted that the car had passed a full frontal crash test.

Nano comes in an all sheet-metal body, with safety features such as crumple zones, intrusion-resistant doors, seat-belts, strong seats and anchorages, and rear tailgate glass bonded to the body.

Mr. Tata confirmed that Nano met all current legislative emission norms and could be upgraded to meet Euro IV norms.

“It has a lower pollution level than two-wheelers,” Mr. Tata assured environmentalists who have been expressing apprehensions about the impact of this project on the environment.

Mr. Tata warmly thanked the Left Front government in West Bengal for its support to the project during “difficult times.”
Choice of Singur

Referring to the choice of Singur as the location for this greenfield car plant, the Tata Group Chairman said: “East India has been industrially ignored. Therefore I decided to locate the plant in West Bengal so more investment could flow in the region. It was a big leap of faith for us. This project will definitely improve the quality of life in the entire Hooghly district where the new plant is located.”

Construction work on the 250,000 unit plant, which is expandable to 350,000, is going on in full swing, he added.

(From The Hindu Dated: 11 Jan 2008)

Nano, cynosure of all eyes

2008-01-11T14:07:00.002+05:30

NEW DELHI: The unveiling of the Tata Motors’ “People’s Car” — ‘Nano’ (now being referred to as “Lakhtakia car” because of its Rs.1-lakh price tag) — was being eagerly awaited not just by the Indians but by the entire world.

It was not just correspondents from national as well as regional media who congregated at the Tata Motors pavilion at the Auto Expo, a large number of scribes, of both print and electronic media, from across the globe — the U.S., the U.K., Germany, Italy, France, Japan, Australia, Singapore, Korea, Canada — besides representatives of all international wire agencies were awestruck after seeing the car.

They could hardly believe seeing a car with a fuel-efficient engine, meeting all safety and emission norms, and that too, at just one-fourth the price of small cars available in the U.S. and European markets.

“It is a milestone for not just Indian automobile industry but for the entire global auto sector. It will give some jitters to all global car-makers who are now focusing on small cars too,” said a Delhi-based senior auto journalist of a U.S. wire agency.

“In the U.S., the cheapest car comes in a price range of $10,000-$15,000, but now we have a serious competition with ‘Nano’ priced at $2,500. Though it will take some time for the Tatas to prove this car in the Indian market before introducing overseas, this has definitely highlighted Tatas’ growing prowess in the global auto arena. And if Tatas win the Jaguar and Land Rover bid, it will be icing in the cake for the company,” he added.

At the press conference held after the unveiling ceremony, journalists questioned Tata Group Chairman Ratan Tata on India’s poor road infrastructure and on traffic congestion issue.

“All these issues are to be addressed by the government and not me. My dream was to provide connectivity to billions of Indians and I think I have delivered on my promise to each Indian family. It will change the way people travel, particularly in semi-urban and rural India,” said Mr. Tata. Totally agreeing with Mr. Tata’s views, Rajesh Kumar, who runs a small book stall in the capital and was present at the Auto Expo to have a glimpse of the “Lakhtakia” car, said: “Today is the happiest day for my family, particularly my children, as I too can now think of buying a car. Mr. Tata will always be remembered as a person who realised the dreams of middle-class Indians.”

(From The Hindu Dated: 11 Jan 2008)

Will it Tata Nano revolutionise personal transport?

2008-01-11T14:07:00.001+05:30

His car may well spark a revolution on the streets. Will Tata Nano be the iPod of the car market or its Nirma? The iPod changed the MP3 device market and it did not really matter what the competition did. Nirma, in late ’80s, handed out a beating to Hindustan Lever’s Wheel and created a new mass segment. Experts say Nano will perhaps be more Nirma than an iPod.

They feel there won’t be any spillovers in the car industry. Nano is expected to change the automobile market in India, which should ideally mean new strategies for competitors. “This car is actually a bridge between the automobile market and the two-wheeler market,” says Ranjit Shastri, MD, Psi, a consulting firm. This new market that Nano will create will not eat into the market of other car segments, but will affect the two-wheeler market drastically.

The family two-wheeler, which is in the range of 75-125cc, costs Rs 35,000-50,000. This segment accounts for 92% of the two-wheeler market in terms of sales. With the launch of Nano, the spillover will happen from this two-wheeler market to Nano. Two-wheeler manufacturers have realised it and Bajaj Auto and Hero Honda are making plans to enter into this new segment.

Earlier, Maruti 800 has been the essential small car with a price tag of Rs 2 lakh and all aspiring car buyers have preferred it as their first car. Today, that may change to a certain extent. But this will in no way harm Maruti Suzuki or Hyundai Santro as owning a car is still aspirational and anyone who wanted to buy a car above the 3,400 mm series will continue to do so.

Maruti 800 held a 30% market share in terms of sales in 2001 among all passenger cars. Today, it has fallen to a mere 5%. Maruti has laid stress on Alto while relegating 800 to the background, and it was a calculated move. Thus, they never wanted to be a part of the lower end segment of the car market. Same goes for Hyundai Santro.

The launch of Nano creates a market for the small car which may allow competitors to enter this market with new models but should not harm their existing strategies.

“At most, Maruti may want to launch an exchange offer for 800 and give an attractive price for 800 buyers to migrate to Alto. They should then refurbish and put these used 800s in the market for Rs 70,000. This should act as a drag on some of the velocity that Nano is going to pick up,” says Shastri.

For other players, there are two strategies: First, get into this segment yourself. Second, cut down on operational expenses and make existing products available at a cheaper price. However, sudden price cuts will not be viable as a strategy.

The competition will have to wait and watch how Nano is received, what all has gone into it to make it so affordable and then try and work a strategy around it. Even if Nano manages to convert 10% of existing the two-wheeler market—which is close to 900 million—Nano will have almost 50% market share of the car market. But that is provided that Nano remains the only car in that segment. Chances are this will become the hotbed for competition.

(From ET Dated: 11 Jan 2008)

Will Finance Minister opt for tax rate rejig?

2008-01-11T14:01:00.000+05:30

The pre-budget wishlist of corporate honchos, who met the Finance Minister P Chidambaram on Tuesday, was a predictable one -- lower the tax burden on companies and individuals.

India Inc hopes the government will yield as direct revenues have been buoyant so far this fiscal. The extra revenues could provide the cushion to absorb any revenue losses, in the short run. Economists though have a contrary view as they reckon populist moves could impact the government's balance sheet.

With parliamentary polls just two summers away, will the finance minister P Chidambaram unveil his second dream budget in 2008-09? Or will he wait till next year to unleash more reforms, atleast in indirect taxes?

Fact is taxpayers had more money in their pockets after Chidam-baram's first dream budget in 1997-98. He slashed income-tax rates, abolished the surcharge on corporate tax and lowered the corporate tax rate. The FM also cut the peak customs duty to make imports cheaper and restructured the excise duties to benefit the consumer.

These policy reform measures were expected "to improve compliance, add momentum to the growth process, create multiplier beneficial effects and attract more foreign investment". Successive government's carried forward many of the tax reform measures.

A reality check a decade later shows that the economy is growing at a scorching pace - India's GDP is expected to inch closer to 9 percent this fiscal. Direct tax revenues have grown by 40% so far this fiscal due to better compliance. Cumulative FDI inflows topped $83 billion till June 2007. Clearly, the Indian economy has moved to a high growth trajectory.

A cut in tax rates could help sustain the growth momentum. Currently, any change in the direct tax rates has to be through the Fi-nance Bill, an umbrella legislation that is ratified by Parliament. The government is looking at the feasibility of tax rate changes outside the budget and this may be proposed in the new direct tax code. However, such a change may take a while.

Unlike direct taxes, the government has the leeway to change indirect tax rates outside the finance bill. A cut in, say, excise duty or peak customs duty can be done at any time as it does not need parliament's sanction.

Former finance minister Jaswant Singh took recourse to this route in January 2004. He unveiled a "mini-budget", where he slashed the peak customs duty on non-farm products and cut excise duties on a host of products. In February 2004, he presented a vote-on-account without any taxation proposals. The BJP came under flak from the Opposition for its mini-budget. But they were right on technical grounds. The rest is history.

The UPA government will complete five years in office in 2009. The 2008-09 budget will be the last full-fledged budget. So any policy intervention in direct taxes including a rate cut will have to feature as a part of the budget announcement.

India's corporate tax rate works out to 33.99%, which includes the statutory tax rate of 30%, surcharge and the education cess. But the effective tax rate is only around 19% due to several exemptions. Corporate India wants a reduction in the statutory corporate tax rate to 25%, though they are silent on exemptions. The wishlist for personal income tax includes a cut in the maximum marginal rate from 30% to 25% and a hike in the exemption limit Rs 1.1 lakh to Rs 1.5 lakh per annum.

Companies also want the government to cut excise duty on most manufactured products from 16% to 14% to spur growth. The manu-facturing sector grew by around 10.4% in the first seven months compared to 11.1% in the same period last year, triggering fears of a slowdown.

Excise collections have not been buoyant. This has been a major cause for worry as a quarter of the budgeted tax collections --of around Rs 5,48,122 crore -- comes from excise. Any cut in the Cenvat rate of 16% could have revenue implications.

"There is scope for reducing the burden of direct taxes by rationalizing exemptions and increasing the threshold for personal income-tax, if not reducing tax rates per-se. Perhaps the passionate reformer in FM may also compel him to resist from maintaining complete status-quo.

Excise revenue is regrettably not buoyant at present. A marginal cut in the duty rate at this juncture would no doubt lead to net loss of the revenue in the short run. The only justification could be that it would be justified to facilitate much smoother convergence of VAT and Cen-vat rates in 2010", said TR Rustagi, former joint secretary, finance ministry.

The government is mulling a four rate goods and services tax - with a central and state rate for goods and likewise for services by 2010. However, a decision is yet to be taken on the rates. It would perhaps be prudent to maintain status-quo on the service tax rate at this stage. Revisions, if any, can be considered when a clear picture emerges on the GST rate. With the surge in the rupee hurting exporters, the government could also look at lowering the peak customs duty at a later stage.

(From ET Dated: 11 Jan 2008)

Emotional distress due to social networking websites

2008-01-07T14:37:00.000+05:30

There is a boom of social networking websites on Internet .The newer social networking sites like orkut , wayn, myspace not only helps in building social contacts but also gives other privileges like earning through blogging & uploading pictures .Majority of people who surf Internet frequently are members of at least one social networking websites either for fun , or to build contacts or for promotion of their own on line business or for earning through blogging . When it comes to earning through blogging , people spend several hours in a day to update their blogs & than on reading & commenting other blogger work. As a result of which blogger get very much acquainted with each others style of writing , thoughts ,likes , dislikes ,profession & other personal aspects & at times blogger get attracted to opposite sex blogger. Once this happens the blogger mind gets completely diverted from blogging . He or she starts giving very sensitive comments on the articles of the blogger with whom he or she has got attracted .The comments are very frequent & personalized a result both the blogger get attracted to one another. Recently I came across few cases where in male blogger first approached female blogger by giving frequent & touching comments on their articles & than they exchanged their contact numbers & email IDs.Later the male blogger shared their past with the female blogger & expressed how lonely they are without true love in their lives & eventually proposed the females saying that they can only bring the lost love back into their lives . Women feel very sorry for the past of males & they started loving the them thinking that the males are very honest & will be carrying husbands if they tie knot with them. For few months these couples continued their interaction through blogging & chatting & meanwhile they committed for marriage , without any face to face meetings. Since it was not a true love & was near attraction the male blogger got attracted to another female blogger & thereby they lost interest in the previous female blogger & the commitments which they made to them became meaningless. As usual the females got very upset , they lost hope , trust & health & now these woman do not believe in the Institution of marriage they do not want to get married for ever & are not ready to forget them although their dream homes are scattered totally According to me it is not wrong to love somebody & to express love for someone nor I say it is the folly of men alone .Also there might be people who got true life partners through social networking sites but I feel one should not commit for marriage without family consent & face to face interaction with the person whom you met through social networking websites.

Using public PC without a trace

2008-01-07T14:34:00.000+05:30

Worried about people accessing your private information whenever you use a public computer? There is a way to protect yourself: Devices as small as a keychain allow you to use any computer without leaving a trail of evidence.

A new computer programme known as MojoPac can turn most flash memory sticks, hard drives or iPods into “virtual” PCs that can run most programmes that work on Windows XP.

The devices draw on the host computer's resources -- including its electricity, Windows XP software and DVD drive. Yet they retain their independence as they move from machine to machine.

This independence allows people to use public computers without a trace of their session being left behind. PCs typically store a record of activity long after the computer has been turned off.

“It's a slick way to move from machine to machine,” says Rob Enderle, founder of the Enderle Group, a research firm that follows the PC industry. “It's about as safe as you can get.”

The device cannot be bought. You have to make it by downloading free software onto a computer drive such as the thumb-sized USB flash memory drives. It also works with iPods, many other digital music players and regular external hard drives.

Once the MojoPac shell is created, users need to install their own software -- just as they would do on a regular PC running Windows XP.

MojoPac's developer, RingCube Technologies, asserts that most programmes are compatible, including Microsoft Office, Adobe Photoshop and a slew of free programmes.

Other companies are working on similar technology, but there's nothing available with free software that is as easy to set up as MojoPac, according to Enderle.

MojoPac virtual PCs are not just designed for mobile use. They can protect users who share the same computer. A virus introduced by one user into their MojoPac, or virtual computer, would not affect the rest, according to RingCube.

“If you were to corrupt your virtual world, your host PC would be fine,” says RingCube Senior Vice President Ron DiBiase.

MojoPac is available for free on the company's website. For now it only works with Windows XP, but the company plans to launch a version this summer that allows users to switch between machines running XP and Vista.

PCs that have been locked by administrators so users cannot install files on them won't work with MojoPac unless the administrator first installs a small piece of software that is available on the company's website.

“There are no plans to develop MojoPacs for Mac computers or the Linux operating system”, DiBiase said.

While most programmes work with MojoPac, one good source for the devices is http://www.PortableApps.com, a site that specialises in offering programmes customised for thumb drives.

It lists more than three dozen programmes, including software for fighting viruses, backing up data, surfing the Web and viewing documents. There are also programmes for word processing, photo editing, spreadsheets and instant messaging.
(From TOI Dated : 6 Jan 2008)

Education alone can help India become a superpower

2008-01-07T14:33:00.000+05:30

2008 is poised to be another year of high economic growth. As we enter the last quarter of FY 2008, the fourth consecutive fiscal when India has witnessed over 8% growth, we find India’s manpower shortages aggravate even further. Just as growth has been multi-sectoral, so have the manpower deficiencies.

There is scarcity of skilled manpower in every industry, from good carpenters and plumbers to factory workers, doctors and scientists. The banking industry, which employs 900,000 people, is expected to add 600,000 more over the next three to four years.

Similarly, the IT and ITeS industry will need around 850,000 additional skilled manpower by 2010. And, the retail industry will need nearly 2.5 million skilled professionals by 2012. Not only are jobs within India on the rise, the developed world too is facing manpower shortages, which are expected to rise to 40 million by 2020.

This shortfall can be met by India, where both educated unemployment and the number of people joining the workforce are on the rise. In short, the opportunities before India are huge, provided our education sector gears up to take these on.

The good news is that the government is paying heed to this challenge. Sarva Shiksha Abhiyan is geared towards achieving useful and relevant elementary education for all children by 2010. This movement is showing results. The number of out-of-school children in the 6-14 years age group has dropped from 13.4 million in 2005 to 7.06 million in March-end 2006. Similarly, the Universities Grant Commission has announced a new budget with promising initiatives and better funds for universities.

While these initiatives are welcome, they are unlikely to solve the sheer magnitude of the problem. Manpower shortages are both qualitative and quantitative in nature. The task is a lot bigger. We need to take a fresh look at the education sector.

It’s time we encourage, engage and motivate both not-for-profit and profit-making institutions to set up educational institutions. Whoever wants to contribute to this sector must be encouraged to do so. There is a role for everyone. There is too much to be done.

In 1991, India opened up several sectors to foreign investment. The liberalisation policy unleashed enormous energy in India’s corporate sector. Since then, several Indian companies have gone global and earned a name in the global marketplace.

We need similar type of ‘policy reforms’ in the education sector. Players in this sector must be given the freedom to enter, operate and exit. India needs more universities. While Japan has 4,000 universities for its 127 million people and the US has 3,650 universities for its 301 million, India has only 348 universities for its 1.2 billion people.

India can’t afford to lose more time on debates. In Japan, 75% of all higher education institutions are private. We need to pass the Private Universities Bill that has been pending in Parliament since 1995.

India needs ‘curricular reforms’. In today’s world, where technological knowhow is evolving with each day, educational institutions need to be granted the freedom to engage with the industry and change the curricula as and when required. Educational institutions must teach what the industry needs.

And finally, the education sector also needs ‘financial reforms’, especially in higher education. The government should provide scholarships and loans to those who need it the most, and leave academic fee to be determined by market forces. That’s what will make our Educational institutions relevant and self-sustaining. The need of the hour, therefore, is to rapidly implement this three-pronged reform process, policy reforms, curricular reforms and financial reforms.

A knowledge economy like

India

runs on the back of its educated workforce. Today, our chances of emerging as a super power squarely rest on our education system and how well it responds to meeting domestic and global requirements for talent. It is an opportunity

India

just cannot afford to lose.
(From ET Dated:6 Jan 2008)

Infrastructure woes may hit economic progress

2008-01-07T14:32:00.000+05:30

Infrastructure (or the lack thereof!) is probably the biggest issue that affects the economy as a whole as well as the day-to-day life of the common man. Power cuts, water shortages and traffic snarls are now considered the norm in India.

It is estimated that inadequate infrastructure is responsible for holding back GDP growth by roughly 2% points, or an annual hit of approximately $20 billion to economic progress.

In contrast, infrastructure is one of the reasons why China enjoys 10+% GDP growth. China spends five times as much on infrastructure compared to India. Ports in China handle 5.6 billion tons of cargo compared to India’s 650 million tons.

Chinese industries pay less than half of what their Indian counterparts pay for power. Logistics costs in India are among the highest in the world at 13% of GDP. It is no surprise then that Indian companies find it hard to compete with China in large-scale manufacturing.

The benefits of infrastructure need no elaboration. Put simply, infrastructure reduces the cost of doing business, thereby expanding trade. The impact can be felt even at the grassroots level. For example, a farmer who used to be dependent on the nearest market to sell his produce (for lack of information and transportation), can now ascertain the prevailing prices in multiple markets and access the one that offers the best price.

Credit should go to the telecom revolution as well as recent improvements in the road transportation network (which still has a long way to go). We need to replicate these positive experiences on a much larger scale, in areas such as power, ports, irrigation and urban infrastructure, to name a few.

The country has no alternative but to invest heavily in infrastructure in order to compensate for decades of under-investment, especially with the economic engine humming and the cost-benefit being evident. In an ideal scenario, better infrastructure would lead to stronger economic growth, which in turn, would be able to fund and support additional investments in infrastructure, creating a virtuous cycle.

An estimated $500 billion of infrastructure investments are planned over the next five years. Power infrastructure is significantly deficient and should see tremendous investments, with business flowing to construction companies, power equipment providers as well as transmission/distribution players.

The transportation network will require significant upgradation, with large investments in roads, railways, ports and airports. Metro rail and other urban infrastructure projects have already started as increasing urbanisation puts pressure on the basic infrastructure in cities that is already spread too thin.

Such a large outlay is dependent on strong participation from the private sector (in the form of public-private partnerships) which is expected to account for 25-30% of the planned spend of $500 billion.

Assuming 70% debt financing, we arrive at an estimated $40-45 billion of equity capital required from private infrastructure developers over the next five years, who will need to access multiple avenues to raise capital, including private equity funds and the capital markets.

In fact, several dedicated infrastructure funds have been created to capitalise on this very opportunity. Apart from the high growth potential (companies have shown 30+% growth in recent years and are expected to continue the trend), infrastructure assets are in demand as they offer stable cash flows and are considered less susceptible to economic downturns, thereby providing useful diversification vis-à-vis equities.

(From ET Dated: 6 Jan 2008)

Indian art may rule the scene in 08

2008-01-07T14:30:00.000+05:30

Controversies, price fluctuations and celebrity art shows - they all made news last year. The Indian art scene hit new heights and then seemed to flounder for a little while. Fortunately, the year end auctions saw a renewed interest in the contemporary artists, where NS Harsha, Atul Dodiya, Subodh Gupta and TV Santosh performed well at the Christie's Hong Kong auction of Asian contemporary art. And, the Saffron art winter auction held in early December collected more than Rs 30 crores, where SH Raza, Tyeb Mehta, FN Souza, Rameshwar Broota, Jogen Chowdhury and MF Husain were amongst those who fetched the highest prices.

How does the art market look like in 2008? It seems Indian art and artists will continue to make waves both at the domestic front and internationally. This should translate into a subsequent increase in the number of art shows, galleries and dealers. Younger artists who have the talent are also likely to do well. According to art collector Harish Padmanabha, "popularity of modern artists will hit the stands once again. No one can take away credit from stalwarts like Husain, Raza, Tyeb Mehta, Gaitonde and Ganesh Pyne."

Which artists will do well? Padmanabha asserts, "It is difficult to predict the future of new artists who are at the beginning of their careers. But, the interest in contemporary artists is likely to continue. Also, the global interest in Indian art will continue to gradually build."

Artist Ravikumar Kashi feels, "the market has slowed down somewhat in the last few months, but personally I have done well. Soon the market should start to look up." Buyers have become more discerning and this trend is likely to continue. With awareness comes the ability to judge and that is one reason why footfalls have not converted into sales in the last year. Bangalore is fast emerging as a hotspot for art after Mumbai and Delhi. Hopefully, local artists will soon get their due and this should reduce disparity in prices of artists from Bangalore versus Delhi and Mumbai.

(From ET Dated:6 Jan 2008)

Experts forecast $20 bn investment in 2008

2008-01-07T14:27:00.000+05:30

The year 2007 is clearly the year that saw the rise of private equity funds. According to those tracking the industry, $13 billion (which is approximately Rs 55,000 crore) was invested in Indian markets in 2007.

Simply put, a relatively new segment of investors have entered the scene and have pumped in Rs 55,000 crore into Indian companies. Ask any investment banker, and he will call the year 2007 a watershed year as all mandates for fund raising were completed and he is on track to receive a hefty bonus.

Shift in focus

Clearly there was a shift in focus among investors from outsourced based investments to domestic consumption-led investments. As a result, 2007 saw large-scale investment in infrastructure, financial services and to a limited extent internet based companies focusing on Indian markets.

Which is one of the reasons why sectors like infotech, auto components and textiles, which were the centre stage for PE investments in previous years, saw a near neglect this year. The problem for these export-oriented sectors started with the rising Rupee which hit their profit margins.

“During 2007, PE investors focused their attention squarely on companies that benefit from domestic consumer spending and infrastructure investments,” says Arun Natarajan, founder & CEO of Venture Intelligence, a research service focused on private equity and venture capital activity.

C Venkat Subramanyam, founder director of Veda Corporate Advisors, concurs with this view. “Clearly the flavour today is on companies which concentrate on Indian markets. Outsourcing-led investments are very limited,” he adds.

Rising stock prices

The flourishing stock markets have aided this investment boom sweeping the country. “The stock price rise actually enabled funds to raise monies easily. Selling

India

story outside to raise funds was made easier thanks to the rising sensex,” says a fund manager.

But stock price rise also had its flip side. Deals were getting closed at exorbitantly high valuation. “There was an irrational exuberance in 2007. Deals which should have normally closed at 10 times price earnings got closed at 30 times. Too much money is chasing a single deal. For the first time we saw the entry of auctioning of transactions,” says Nitin Deshmukh, CEO of Kotak VF.

A number of PE investors who invested in prior years made profitable exits. “They either exited through an IPO or a trade sale or through sale to other funds,” adds Venkat Subramanyam.

Rise of infrastructure sector

A major beneficiary of fund flow has been the infrastructure sector. Clearly, the growing necessity for the country for quality power, roads, ports and such saw huge monies flow in. “A chunk of investments were absorbed by this sector, and the beauty is that it needs more and more money,” says K Ramkumar, regional head, south, Religare Securities.

All these success stories revolve around the macro-level feel good factor that is sweeping the country. Even entities which were hitherto slow to react to catch the bus have become nimble footed.

“Take the case of upcoming Bangalore Airport. This place and city centre needs to be connected and the Karnataka government is toying with the idea of a private public partnership (PPP) model and raise funds from PE investors,” says K E C Rajakumar, UTI Venture Fund’s CEO.
(From ET Dated:29 Dec 2007)

Happy New Year

2008-01-02T10:30:00.000+05:30

Happy New Year

If it didn't bring you joy
just leave it behind
Let's ring in the new year
with good things in mind

Let every bad memory
that brought heartache and pain
And let's turn a new leaf
with the smell of new rain

Let's forget past mistakes
making amends for this year
Sending you these greetings
to bring you hope and cheer

2008: The Inflexion Year with Positive Outcomes!

2007-12-28T11:41:00.000+05:30

Offer the following positive outcomes for 2008 with humility:

. One World: The global community of nations is realising that regardless of the complex global risk we wish to address, we all have to come together. The mantra of a "unified global approach" is becoming essential whether it is countering climate chaos and environmental degradation; radical poverty and microfinance; geo-politics and energy security; organised crime & extremism; advanced technologies -- bio, info, nano, robo & AI -- proliferation; demographic skews and resource shortages; pandemics; financial systems and systemic risk; or transhumanism and ethics. United we stand, divided we fall!

. Empowerment Inflexion: Billions of internet-powered, mobile-telephone enabled, satellite television connected global citizens -- both female and male -- are beginning to act directly, bypassing slow bureaucracy and traditional intermediaries, mostly to make their lives better. The rewards of greater transparency far outweigh the risks!

. Reducing Poverty and Deprivation: An upswing in the re-spreading of global wealth -- from richer countries to hitherto poorer ones -- signals rising incomes for many across the world, and especially in some fast growing developing countries. Watch out for the China and India juggernauts as they lift hundreds of millions out of poverty! To quote Bob Dylan: "The first one now will later be last, as the present now will later be past, for it is the times they are a changin'!"

. Green-to-Gold: Environmental and clean energy solutions are blooming finally as "Green" transforms into the new "Gold" to become the creative finance hub and dynamic engine of balanced growth and rejuvenation for the global economy powered by the changing behaviour and preferences of the higher consciousness global consumer. Green-to-Gold, Gold-to-Green!

. Perception Correction: The industrialised nations are being forced to become more creative and humanitarian in their global relations approach as the "hard power" strategy is shown not to work as effectively as the "soft power" one in a truly networked global economy where almost every nation is dependent on others in the inter-linked global village!

. Global Healing: Some enlightened communities, cities and nations are beginning to mitigate the corrosion from fear -- crime and terror -- by deploying cultural healing techniques including realising the power of coming together, societal unity, harmony, cross-cultural events, meditation and joint prayer. This process of achieving a higher collective consciousness and the unity-of-humankind is accelerating!

Are Labor Regulations Driving Computer Usage in India's Retail Stores?

2007-12-28T11:03:00.000+05:30

Mohammad Amin*
World Bank

Abstract A recent survey of 1,948 retail stores in India conducted by the World Bank'sEnterprise Surveys shows that 19 percent of the stores use computers for their business.In some states like Kerala, computer usage is as high as 40 percent. Using this data wefind labor regulation as an important determinant of computer usage. The estimatessuggest that when faced with burdensome labor regulations, the probability of using acomputer rises by over 36 percentage points for an average store. These findings formallyconfirm a commonly held but untested view that labor regulation may be responsible forthe spread of labor saving modern technology.

Keywords: Labor regulations, Technology, India, Retail

World Bank Policy Research Working Paper 4274, July 2007

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage theexchange of ideas about development issues. An objective of the series is to get the findings out quickly,even if the presentations are less than fully polished. The papers carry the names of the authors and shouldbe cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirelythose of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors,or the countries they represent. Policy Research Working Papers are available online at
http://econ.worldbank.org.

1. Introduction : A new survey of 1,948 retail stores in India compiled by the World Bank's EnterpriseSurveys shows that 19% of the stores use computers for their business. Computer usageis higher among stores that find labor regulations to be more burdensome. Specifically,16% of the stores who report labor regulations as "no obstacle" for their business usecomputers. Corresponding figures for stores reporting labor regulations as "minor","moderate", "major or very severe" obstacles are 24%, 30% and 34%, respectively. Wetest if computer usage in India's retail sector is driven by the severity of labor regulations. Existing empirical work has paid little attention to the technology-laborregulations nexus.1 Few studies which do exist treat the choice of technology asexogenous to labor regulations. For example, Card et al (1999) take computer usage inthe Canada, France and the US as an exogenous technological shock. They find that theeffect of this shock on wages and employment depends on labor regulations in the threecountries. In recent theoretical contributions, Alesina and Zeira (2006) and Blanchard andPhilippon (2006) have argued that the choice of technology should be treated asendogenous to labor regulations. Our findings confirm this argument.

2. Data and Main Variables : We use store level data collected by the World Bank in 2006.2 The data are a pure crosssection of 1,948 stores spread over 16 states and 41 cities of India. Our dependentvariable, Computers, is a dummy which equals 1 if a store uses a computer for running its business and 0 otherwise.3 The mean value of Computers is .19 and standard deviation is.39. Our main explanatory variable is an index of labor regulation defined at the statelevel.4 In one survey question, stores were asked if labor regulations were an obstacle fortheir business. Responses were recorded on a 0-4 scale defined as no obstacle (0), minorobstacle (1), moderate obstacle (2), major obstacle (3), and very severe obstacle (4). Ourmain index of labor regulation, Perception index, equals the proportion of stores in a statewho report labor regulations as a problem (minor obstacle or higher).5 Being a group(state) average, the Perception index suffers less from measurement errors andendogeneity problems associated with firm perceptions (Kreuger and Angrist, 2001). Asa robustness check, we also use an index of labor regulation for the manufacturing sectorsin India (Law Book index) due to Besley and Burgess (2004). For the Law Book index,we use the latest year (2000) values for which the index is available. The motivation isthat pro-labor governments are likely to implement labor-friendly laws in bothmanufacturing and services. Correlation between Perception and Law Book index is .564.

One concern could be that labor regulation is likely to be correlated with otherregulations such as tax rates, land laws, corruption, etc. However, this is not a problemfor us because we expect these (other) regulations to be positively correlated with laborregulation but have a negative effect on computer usage. Thus, failure to control for taxrates, etc., will only weaken the positive association we intend to show between computerusage and labor regulations (downward bias in the estimated coefficient of laborregulation). To confirm this, we use store response (on the same 0-4 scale as above) questions on tax rates, tax administration, land laws (access to land), business licensingand permits, corruption and restrictions on store hour operations as obstacles to growth.Indices similar to the Perception index were first computed for each of these (non-labor)regulations and then a simple average was taken over them to arrive at Regulation ? anoverall index of non-labor regulations. The sub indices of Regulation are all highly(positively) correlated and our results are unaffected whether we use Regulation or its subindices. We expect a negative effect of Regulation and a positive effect of the laborregulation index on computer usage. We single out the sub-index on land laws (Landindex) for special treatment because it shows little correlation with the Perception index.The correlation coefficient between the Perception index and the Land index is .39 and itdrops to .06 if we exclude the states of West Bengal and Gujarat (16% of the sample)which are outliers (Figure 1). What this suggests is that at least in the bulk (84%) of thesample we can easily contrast the effects of labor and land regulations on computer use.

A second concern is that labor regulations could be correlated with overalldevelopment, biasing our results. The most plausible scenario is that labor regulations arestricter in less developed states. This negative relationship between labor regulation andoverall development again implies a downward bias in the estimated labor regulation-computer usage relationship because the direct effect of less development is likely to beless computer usage. For example, the index of overall development due to Banerjee andIyer (2005), BI index, shows a negative correlation with the Perception index (correlationof -.290) but is positively correlated with the percentage of stores in a state who usecomputers (correlation of .320). Below we control for a number of proxy measures ofoverall development and the results confirm our claim of the downward bias.

The last concern relates to a possible correlation between labor regulation andstore characteristics. We looked at a number of store characteristics and found these to beonly weakly correlated with the Perception index. For example, averaged at the statelevel, current employment, current sales and floor area of the shop show a correlation of-.125, .088 and -.109, respectively, with the Perception index. Our results for laborregulation hardly change due to store level controls (discussed below).

3. Estimation : We use a probit specification clustering the standard errors on the state. Estimatedmarginal effects (at the mean value of the explanatory variables) are reported in Table 1.Our main control is the Land index for reasons discussed above. Using the Perceptionindex, we find no significant effect of labor regulation on computer usage without anycontrols. In column 1 of Table 1 we control for the Land index. Labor regulation nowshows a significant effect (at less than 5%). Specifically, a 1 percentage point increase inthe number of stores who find labor regulation to be a problem raises computer usage by.179 percentage points. In contrast, stricter land laws have a negative effect on computerusage (significant at less than 1% level). For overall development we use ratio of femalesto males (Sex ratio) at the city level.6 Other proxy measures like literacy rates, etc. areused in the robustness checks below. Column 2 of Table 1 shows that controlling for Sexratio increases the estimated coefficient of labor regulations from .179 to .189 (p-value of.004) confirming the downward bias discussed above. Sex ratio has a positive effect computer usage (significant at less than 1% level). Estimation results for the restrictedsample (West Bengal and Gujarat dropped) are almost similar to the ones above.

4. Robustness : In column 3 we add the control for Regulation. As expected, Regulation has a negativeeffect on computer usage (significant at less than 1% level) and controlling for itincreases the coefficient of the labor regulation index from .189 to .346. In column 4 weadd controls for overall development: BI index, literacy rate, labor force participationrate, total adult population (size of the city) and share of services in total employment.7Population and participation rates also control for differences in labor supply across citiesin which our stores are located.8 The impact of these controls is an increase in theestimated coefficient of labor regulation (column 3 vs. column 4) which supports ourclaim of the downward bias. In column 5 we control for a host of store levelcharacteristics: floor area of the shop (thousand square feet), age of the store, duration ofpower outages per day (Outage) and five dummy variables capturing (equal to 1) if astore owns a generator (Generator), has a checking/savings account (Checking), a line ofcredit, overdraft facility (Overdraft) and felt no need to borrow from external sources inthe last fiscal year (Liquid). With these controls added the coefficient of the laborregulation index remains positive and significant at less than 5% level.9 It drops inmagnitude from .412 to .369 which is partly due to the difference in sample size the two columns (due to missing observations) and partly due to the control for age of thestore. Our main result of a positive and significant effect of labor regulation on computerusage holds for the Law Book index.10

5. Conclusion : The paper shows that rising computer usage in India's retail sector is in part driven byburdensome labor regulations. The findings suggest a labor saving motive which weconfirm in a companion paper. We have also shown that existing work on the laborregulation-technology-employment/wages nexus may suffer from specification problemsin that it treats the choice of technology by firms as exogenous to labor regulations. Ourresults contradict the exogeneity assumption.

References from http://www.enterprisesurveys.org/

SBI, associate banks likely to merge in Jan

2007-12-27T12:47:00.000+05:30

India’s largest bank, State Bank of India (SBI), is set to further consolidate its position as a banking behemoth with the government and the bank management pushing a proposal to merge its associate banks with the parent.

After having tested the waters with the merger of one of its unlisted associate banks — State Bank of Saurashtra — with itself, SBI is now preparing the ground for a merger of its four unlisted associate banks and also the listed ones early next year.

An official who is privy to the plan said the boards of six associate banks, as well as SBI, are expected to meet in January to consider a merger proposal. The move comes at a time when SBI is gearing up for a rights issue which, at an estimated Rs 17,000 crore, is one of the biggest mop ups from the domestic capital markets. According to officials, the government, which is the dominant shareholder of the bank, has approved the plan and is keen to see the process being completed swiftly.

The associate banks are State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Travancore, State Bank of Indore, State Bank of Saurashtra and State Bank of Mysore. Of these, only three — SBT, SBBJ and SBM — are listed. However, even on a standalone basis, some of these banks are bigger than many state-owned and private banks.

The mega merger, which has been in the making for a while, will consolidate SBI’s leadership position in the Indian financial sector by giving it more size and reach in terms of deposits and branches. It will also add more muscle to the bank and help it play a more active role on the global banking stage. So far, SBI’s global ambitions have remained unfulfilled with acquisitions limited to a few small banks.

That strategy, pursued earlier, has been jettisoned and the bank is now scouring for opportunities for a bigger fit. Yet, the fact remains that even after the proposed exercise SBI will still figure fairly low on the global banking sweepstakes. A combined entity will not be in a position to claw its way into the list of top 50 global banks. In contrast, the state-owned Industrial and Commercial Bank of China is now the second-biggest bank in the world by market value.

Once the proposed mergers are completed, SBI’s asset size will become more than double of ICICI Bank, its closest competitor. A merger of SBI with all its associate banks will take the balance sheet size to over Rs 8,00,000 crore compared with Rs 3,45,000 crore for ICICI Bank. The consolidation could also mean expanding its geographical footprint as the branch network could swell then to 31,000 from the current 9,517. SBI has already drawn up plans to expand its branch network to 10,000 by the end of the current fiscal year.

World's top IPO worth $8-bn; India's total worth just $8.3-bn

2007-12-27T12:42:00.000+05:30

Indian bourses saw over eight billion dollars worth of initial public offers in 2007, but this is just a shade higher than the world's single-largest IPO that was brought by a Russian company, latest data show.

The worldwide IPO activity raised a record capital of 255 billion dollars till November in 2007, including 8.3 billion dollars on Indian bourses, according to data compiled by international consultancy firm Ernst and Young.

India was the fifth largest market in terms of number of IPOs and seventh largest in terms of the proceeds for the year, E&Y said.

There were 95 IPOs in the first 11 months, while the preliminary data for the month of December shows that the total number for the year would be more than 100, it noted.

China came top with total IPO proceeds of 54.4 billion dollars through 222 issues.

Globally, there were as many as 1,739 IPOs between January and November, while another 91 public issues are estimated to have hit the capital markets during December.

The largest IPO of the year came from Russia's VTB Bank, which alone raised eight billion dollars.

In India, the largest IPO of the year was brought by realty giant DLF which raised about Rs 9,187.50 crore (more than two billion dollars).

E&Y said the strength of India's economy, stock market, corporate profits and private equity fuelled IPOs in 2007. In the previous year, the market had seen 78 IPOs raising $7.23 billion.

The study said 14 of the top 20 IPOs were from emerging BRIC markets and the surge in Indian IPO activity was a clear reflection of the growth in the Indian economy and the investor's confidence.

Together, the four BRIC countries - Brazil, Russia, India and China - have raised 106.5 billion dollars in 382 deals so far this year compared to $89.6 billion raised in 302 deals in the same period of 2006.

Asia-Pacific accounted for 46 per cent of the worldwide IPO league, ahead of Europe, the Middle East, and Africa (EMEA) which together accounted for 35 per cent and North America with 14 per cent.

EMEA and Asia-Pacific have the greatest market share of capital raised with 38 per cent and 32 per cent respectively, eclipsing North America (16 per cent) and Central and South America (14 per cent).

Despite accounting for only 4 per cent of the total number of IPOs so far this year, HKSE was the leading exchange by capital raised, attracting a 13 per cent market share, mainly due to having some of the year's largest listings, including China CITIC Bank and China Railway.

NYSE was ranked second in terms of capital raised (11 per cent), attracting 3.6 per cent of total listings driven by a number of large US deals, including Blackstone Group and MF Global.

Although only 2 per cent of IPOs through November listed on LSE, it attracted 10 per cent of the capital raised, mainly through a few large Russian deals, including VTB Bank and Pik Group.

India ranks 7th in IPO proceeds

2007-12-27T12:34:00.000+05:30

Indian bourses saw over $8 billion worth of initial public offers in 2007, but this is just a shade higher than the world's single-largest IPO that was brought by a Russian company, latest data show.

The worldwide IPO activity raised a record capital of $255 billion till November in 2007, including $8.3 billion on Indian bourses, according to data compiled by international consultancy firm Ernst and Young. India was the fifth largest market in terms of number of IPOs and seventh largest in terms of the proceeds for the year, E&Y said. There were 95 IPOs in the first 11 months, while the preliminary data for the month of December shows that the total number for the year would be more than 100, it noted. China came top with total IPO proceeds of $54.4 billion through 222 issues.

Globally, there were as many as 1,739 IPOs between January and November, while another 91 public issues are estimated to have hit the capital markets during December. The largest IPO of the year came from Russia's VTB Bank, which alone raised $8 billion. In India, the largest IPO of the year was brought by realty giant DLF which raised about Rs 9,187.50 crore.

E&Y said the strength of India's economy, stock market, corporate profits and private equity fuelled IPOs in 2007. In the previous year, the market had seen 78 IPOs raising $7.23 billion.

The study said 14 of the top 20 IPOs were from emerging Bric markets and the surge in Indian IPO activity was a clear reflection of the growth in the Indian economy and the investor's confidence. Together, the four Bric countries - Brazil, Russia, India and China - have raised $106.5 billion in 382 deals so far this year compared to $89.6 billion raised in 302 deals in the same period of 2006.

Asia-Pacific accounted for 46% of the worldwide IPO league, ahead of Europe, the Middle East, and Africa (EMEA) which together accounted for 35% and North America with 14%.

Transforming India by 2020

2007-12-27T12:19:00.000+05:30

Dr APJ Abdul Kalam is one of the most distinguished scientists of India and became the 11th President of India in 2002. His focus is on transforming India into a developed nation by 2020.
As Chairman of Technology Information, Forecasting and Assessment Council (TIFAC) and as an eminent scientist, he has led the country with the help of 500 experts to arrive at Technology Vision 2020 giving a road map for transforming India from the present developing status to a developed nation.

Transforming India into a Developed Nation by 2020: Dr A P J Abdul Kalam, The Indian President's Vision
Earlier in the year in Mumbai, The Indian President Dr APJ Abdul Kalam, a rocket engineer and scientist, delivered:
1. The seminal address to a packed hall of CEOs on the concluding day of The NASSCOM Leadership Summit, 2006, which sets the tone of public policy for the Indian software industry; and
2. The valedictory address at the International Conference on Computing in High-Energy and Nuclear Physics (CHEP'06) organised by the Tata Institute of Fundamental Research (TIFR), where the recent CERN (European Organization for Nuclear Research) of Geneva's grid computing breakthrough of One Gigabyte per second sustained data transfer was announced.

Who is Dr APJ Abdul Kalam?
Nearly 40 years ago a young man -- APJ Abdul Kalam -- stepped into the premises of the Tata Institute of Fundamental Research (TIFR) at Colaba, Mumbai, to appear for an interview for the post of a rocket engineer. The youngster, interviewed by Dr Vikram Sarabhai -- Father of the Indian Space Research Organisation (ISRO) and Programme -- and Prof MGK Menon -- Director of TIFR at the time and later Chairman of ISRO -- was selected and on July 18, 1980, he launched India into the space age with the successful flight of the Satellite Launch Vehicle III (SLV-III). Earlier this year, the rocket engineer revisited the institute, which is the cradle of India's space and nuclear programmes, after nearly 40 years, to deliver the valedictory address at CHEP'06.

Dr APJ Abdul Kalam is one of the most distinguished scientists of India and became the 11th President of India in 2002. His focus is on transforming India into a developed nation by 2020. He specialised in Aeronautical Engineering from Madras Institute of Technology. Dr Kalam made significant contribution as Project Director to develop India's first indigenous Satellite Launch Vehicle (SLV-III) which successfully injected the Rohini satellite in the near earth orbit in July 1980 and made India an exclusive member of The Space Club. He was responsible for the evolution of ISRO's launch vehicle programme, particularly the PSLV configuration. After working for two decades in ISRO and mastering launch vehicle technologies, Dr Kalam took up the responsibility of developing Indigenous Guided Missiles at Defence Research and Development Organisation as the Chief Executive of Integrated Guided Missile Development Programme (IGMDP). He was responsible for the development and operationalisation of "Agni" and "Prithvi" Missiles and for building indigenous capability in critical technologies through networking of multiple institutions. He was the Scientific Adviser to The Defence Minister and Secretary, Department of Defence Research & Development from July 1992 to December 1999. During this period he led to the weaponisation of strategic missile systems and the Pokhran-II nuclear tests in collaboration with the Department of Atomic Energy, which made India a nuclear weapon State. He also gave thrust to self-reliance in defence systems by progressing multiple development tasks and mission projects such as Light Combat Aircraft.As Chairman of Technology Information, Forecasting and Assessment Council (TIFAC) and as an eminent scientist, he has led the country with the help of 500 experts to arrive at Technology Vision 2020 giving a road map for transforming India from the present developing status to a developed nation. Dr Kalam has served as the Principal Scientific Advisor to the Government of India, in the rank of Cabinet Minister, from November 1999 to November 2001 and was responsible for evolving policies, strategies and missions for many development applications. Dr Kalam was also the Chairman, Ex-officio, of the Scientific Advisory Committee to the Cabinet (SAC-C) and piloted India Millennium Mission 2020. In his literary pursuit four of Dr Kalam's books - "Wings of Fire", "India 2020 - A Vision for the New Millennium", "My journey" and "Ignited Minds - Unleashing the power within India" have become household names in India and among the Indian diaspora. These books have been translated in many Indian languages. He has been awarded the coveted Indian civilian awards - Padma Bhushan (1981), Padma Vibhushan (1990) and the highest civilian award Bharat Ratna (1997). He is a recipient of several other awards and Fellow of many professional institutions.

At the NASSCOM leadership summit, with a 1,500-strong retinue of policemen and security personnel standing on-guard, President Kalam urged the Indian IT industry to:

Aim at acquiring 50 per cent of the world IT market;2. Revise their revenue target to USD 200 billion by 2010 from the current NASSCOM projection of USD 60 billion; and3. Acquire a lion’s share of the world’s USD 300 billion global offshoring market."The NASSCOM-McKinsey Report 2005 indicates that the addressable market for global offshoring including BPO is around USD 300 billion presently, whereas we are only tapping 10 per cent of this addressable market," President Kalam said. He also said that India’s cost competitiveness in software products must aim for quality and just-in-time delivery. "Since there are a number of countries competing for the USD 300 billion target, we continuously have to aim high," he said.

According to the Indian President the ITES (Information Technology Enterprise Solutions) and BPO (Business Process Outsourcing) sector accounts for 3.5 per cent of the global market, which should be increased to 15 per cent of the global business volume. He asked the IT industry to focus on regions which require IT solutions in education, healthcare, eGovernance and eBusiness. The President said that the booming tech sector should explore new markets in Asia, ASEAN and African nations for achieving sharply higher growth. He also suggested to establish joint ventures with countries such as the Philippines, [South] Korea and other East Asian countries."The idea is to look East," he said, stressing that mission was convergence of "Bio", "Nano" and "Info" to make "the world peaceful, prosperous and safe." Citing examples from his visit to [South] Korea, the President also suggested tablet PCs for school students in the range of USD 100-150; embedded systems for use in "consumer durables to defence systems"; and leveraging knowledge products like tele-medicine, tele-education etc to reach the target."During my visit to the Philippines I found that they are very keen to work with India in the IT services and the IT sector. I also found that the electronic infrastructure is extremely well developed there," he said. Philippines has a 155 mbps bandwidth connectivity around Manila connecting government, educational and R&D institutions; APAN.NET, established in association with Japan."

He also said that India’s existing policy objectives for Africa should map on to its IT goals so as to establish a "Pan-African eNetwork that connects 53 countries for providing tele-education, tele-medicine and connecting the Heads of State."

The Indian Government is focusing on developing infrastructure in 63 cities, which include many Tier-II cities, President Kalam said in response to the software industry’s demands for better infrastructure to enable expansion into smaller towns and cities. Expansion into Tier-II cities will also reduce the cost of support infrastructure such as buildings, drainage, electricity and water as compared to what is incurred in the big cities, he said. BPOs should be promoted in Tier-II cities with a population of around one million and later extended to smaller towns having a population of about half a million.

At CHEP'06, President Kalam's address, which detailed the importance of networking and grid computing for scientific research as well as for educational purposes and knowledge acquisition, met with an enthusiastic response from both Indian and foreign listeners. With an active participation in the building of the Geneva-based accelerator Large Hadron Collider (LHC), it should be possible for Indian scientists and technologists "to enhance the development and production of Thorium based reactors in the country," President Kalam said.

"The knowledge you have gained and will be gaining in building LHC and the results will be of great utility to many technology ventures in the world," he said while suggesting his ideas to the global scientists attending the conference. To the computing particle Physicists, who are working on LHC, Kalam said one of the greatest challenges for the computing scientists working on such long-term projects is to make sure the technology remains robust and does not become obsolete. On the mission for space research and particle research, he said, "it would be worthwhile to consider the possibility of integrating the data from accelerators, the scientific simulations and the space and ground based observations."

President Kalam said India must aim at enhancing bandwidth immediately, and "as a nation, we must get 1 Gigabit per second connectivity." Addressing some of the world's leading scientists, he said, "I have a vision that bandwidth should be free and made available to all those who need it." Calling on the Government to take the lead in making it available, he dwelt at length on equitable access to education and knowledge in the digital era. Describing it as the "primary goal" of virtual universities, he said availability of high bandwidth would ensure that the best resources were accessible to all participants. "Bandwidth is the demolisher of imbalances and a great leveller in the knowledge society."

Prof Harvey Newman, a leading figure in research networking in the United States, said it was important to quantify the President's vision. President Kalam's vision of the knowledge grid was a great technical challenge and would require Terabytes per second connectivity to implement. It was a programme which, if implemented, would change the way people thought about networks and grids and the way they interacted with each other.

Prof Shobo Bhattacharya, Director, TIFR, said the President's vision was important in a country where high-quality human resources in education were scarce. Institutions such as the TIFR could contribute considerably to education if high-bandwidth networking were available. President Kalam praised the work of Indian high-energy physicists and welcomed their scientific collaboration with the European Centre for High Energy Physics [CERN]. After the valedictory function, he viewed the demonstrations set up to illustrate various high-bandwidth networking applications.

President Kalam said the Indian industries are beginning to understand the importance of fundamental science. "The Indian industries have still not tasted the result of fundamental research and have just begun to understand that if the economic growth of the country has to reach 10 per cent, they need technology which is based on fundamental research," he said in his reply to a query. "There is a realisation with the global competition also," he said adding, for both government and industries, realisation has come and "we are pushing it". When a research student asked on the importance of having the Bangalore model Indian Institute of Science in Pune and Kolkata, President Kalam said "it is to promote scientific and teaching culture in the country". "This effort will create scientific cadre in the country with employment assurance," he said adding, "I hope the parents are listening to this."

New Opportunity-2020

2007-12-27T12:17:00.000+05:30

Report from HIGH LEVEL STRATEGIC GROUP (HLSG) says that INDIA’S NEW OPPORTUNITY – 2020 will be 40 Million New Jobs and $200 Billion Annual Revenue.

HLSG has identified six thrust areas for action to boost demand for India’s services:
1.Strengthen India Inc. image/brand
2.Focus marketing on select countries with select services
3.Build customer credibility
4.Promote acceptability of the ‘offshore’ concept
5.Improve service experience for customers
6.Invest in promoting trials

HLSG has also identified six thrust areas for action to boost supply of India’sservices:
1.Develop domain expertise in specific areas
2.Reform education and training sector to increase base of skilled professionals
3.Strengthen connectivity infrastructure (telecom, IT, airports)
4.Promote public-private partnerships
5.Form interest groups around opportunities
6.Align legal and regulatory structure

Corruption Study in 2005

2007-12-27T12:15:00.000+05:30

Common citizens of the country pay a bribe of Rs. 21,068 crores while availing one or more of the eleven public services in a year. As high as 62 percent of citizens think that the corruption is not a hearsay, but they in fact had the firsthand experience of paying bribe or “using a contact” to get a job done in a public office.

Three-fourth of citizens think that the level of corruption in public services is increasing in the last one year (2004-2005). Hardly ten percent think that such corruption is on the decline. There are no significant differences between the States in the perceptions about the extent of corruption or in their experience with such corruption.

The India Corruption Study 2005 brings out the magnitude of the problem, the contours of petty corruption involving common citizen and the efforts required to address the issues in the case of each service. Users of various public services across the country in this study have named seven key factors that stand out as responsible for wide spread corruption in the system.

These include,
1· Lack of transparency and accountability in the system,
2· Lack of an effective corruption reporting mechanisms,
3· Lack of honesty in officials in the Government,
4· Acceptance of Bribe as a way of life, custom and culture,
5· In effective judiciary,
6· Poor economic policies,
7· Inadequate training and orientation of Government officials.

Lessons for India

2007-12-27T12:11:00.001+05:30

The article in the Economist is very interesting and has many lessons for India.
1. Recognition that talent comes in many forms.For example, one may be average academically (in mathematics and science) but is great in public relations and communications. Recognize the versatility of talent and let the market recruit those that best suit a specific job. It is not necessary that the first ranker gets to be the CEO. Reservations will be outmoded if their specific talents are nurtured and rewarded.
2. Develop wide ranging talents.Create educational opportunities to all seekers. It does not mean that the government necessarily guarantees jobs to those that graduate.
3. Encourage people to migrate to countries where jobs are available.It is forecast that in the next twenty five to fifty years, those with superior and appropriate skills will find jobs in Europe, Japan, and the US. The nation can set up schools and colleges (not necessarily in the public sector) to educate and train people with skills and knowledge to cater to this global demand.
4. Realize the talent pool:Even if 5% of Indian population is considered high talent (leaders and managers in their respective areas), we are talking of 50 million people (of course in various age groups). Add to that 150 million skilled people (15%).
5. Invest in people:Eliminate free graduate education and charge internationally competitive tuition. But, provide loans to complete education. Forgive the loans for those who serve in tribal areas, rural communities, and in country (in a graded order). Those who go abroad will pay back by remittances.

Kalam wants more youths to join politics

2007-12-27T12:10:00.001+05:30

Former President A P J Abdul Kalam said on December 2006 more youths should enter politics to make it corruption-free and build a stronger nation.“If youths participate in politics, then there will be dynamism in politics… removal of corruption is a beautiful mission,” the President said at the closing ceremony of the 125th-year celebration of the Calcutta Girls’ High School at Kolkata.Saying that politics had two components, mainly “development politics and party politics”, the President pointed out that politicians should spend 70 per cent of their time in development politics and 30 per cent for the party.Recalling his interaction with a student of Calcutta Girls’ School who said that her aim in life was to be a politician, Kalam said that this aim should be encouraged.“This made the first impression about your school beautiful.”

Famous Quotes

2007-12-27T12:03:00.000+05:30

Mission :2020 “A developed India by 2020, or even earlier, is not a dream. It need not be a mere vision in the minds of many Indians. It is a mission we can all take up - and succeed.“
- A P J Abdul Kalam

“The greatest natual resource that any country can have is its childran.“
- Danny Kaye

"A man who was completely innocent, offered himself as a sacrifice for the good of others, including his enemies, and became the ransom of the world. It was a perfect act. "
-Mohandas K. Gandhi

"Prayer is not asking. It is a longing of the soul. It is daily admission of one's weakness ... It is better in prayer to have a heart without words than words without a heart."
-Mohandas K. Gandhi