Satish and his thoughts

What is in a name?

2009-06-15T19:46:00.003+09:00

Notwithstanding the wisdom in the famous lines of William Shakespeare – “What is in a name? That we call rose by any other name would smell sweet” I still think name matters a lot. After all one hears his name thousands of times from the cradle to the grave. It is inextricably linked with everything of his life – his successes and failures, his nature and temperament, his social contributions as well as misdeeds. Consequently, a name gets firmly attached to the person like his shadow. Be that as it may, one must, to begin with, love his own name lest others make a dog’s breakfast of it.
On attaining adulthood, to my dismay, I realized that my name was solely responsible for encountering so many refusals against my initial romantic escapades. My grandfather had chosen ‘Satish’ at the time of my joining school and from then till date I am carrying it as a haversack. Satish - the hero of several novels of the great Bengali author Sarat Chandra Chattopadhyaya must have been the favourite character symbolizing sincerity and sacrifice for many including my grandfather. Today TV serials give sufficient clues as to why I was not a hot pick among girls. The story would have been quite different had I got ‘Sayan’ or ‘Subhro’ or any such trendy names.
No wonder, people are so choosy in giving names for the newly- born. Those who have religious or astrological beliefs go to any extent to fulfill their compulsions. A few years back, I was asked to suggest a name beginning with the alphabet ‘V’ for my grand-daughter. There are a few alphabets out of twenty-six in English language which provide only a few words beginning with them. That is why words beginning or ending with those alphabets are always dreaded in word games. After scratching my bald head for two days, I came upon the name ‘Vaijayanti’ which was hailed by all as a sweet name befitting the cute baby. I have not revealed as yet to anyone the secret behind my creativity foray; my favourite celluloid heroine ‘Vaijayantimala’ who came in dreams so often during my college days was the source of inspiration.
Some names are really funny but only their users know how badly they feel using them. If I have to address a short man as Mr High, or a slow working official as Mr Quick, it would put me off. When election was announced, Mr Moody or Mr Power could cause confusion with the prime-ministerial aspirants Mr Modi and Mr Pawar.
In Southern parts of India, a person’s name traditionally includes the name of the ancestral place he belongs to, the name of his father and finally his own name. Therefore some names can make one breathless if all the initials are to be expanded. The famous author Rasipuram Krishnaswami Ayyar Narayanaswami is better remembered as R.K.Narayan. Long names may also sound anachronistic especially in an age of miniaturization and the need of the hour is to use as short names as possible. In Bollywood, for a year or two, films with long names were released expecting audience queues would be correspondingly longer. But the clever public came out promptly with acronyms like QSQT (Qayamat Se Qayamat Tak) or DDLJ ( Dilwale Dulhaniya Le Jayange).
Taking cue from the above, my obituary should justifiably read: “SCD – Born 1940, Died 20..; Nobody knows what he did in between”.

Getting up after a deep slumber

2009-05-23T13:18:00.005+09:00

My apologies to you all for going out of sight for such a long period. It is just like Rip Van Winkle getting up from sleep after twenty years and finding the world to have changed a lot meanwhile. Much water has flown through the Ganges river anyway.
I do not know what exactly caused this black-out. It was certainly not the usual periodic writer's block; I have been writing articles all these days for a magazine and also for a book. There has been some disillusionment after the whole world got affected by economic melt-down.
Hopefully the painful days of the recent past are going to be over soon. I also want to write on other topics which deserve analysis and discussion. Let me now get down to writing. Keep reading!

Politics and not Good Economics Prevail

2008-03-26T23:48:00.001+09:00

If over 300 million Indians who are grouped under the category BPL(Below The Poverty Line - an euphemism for the starving not in a position to get two square meals a day) continue to live in their misery despite two eminent economists being at the helm of economic power of the nation, and if the disparity between the rich and the poor has widened alarmingly despite their noble economic policies for the 'aam admi'(the common man), there must be something amiss. The Prime Minister and the Finance Minister are acclaimed all over the world as eminent economists and they are architects of India's incredible growth story destined to emerge as the world's second largest economic power by the year 2050. However, going by the spate of recent policy announcements, one wonders whether they have turned seasoned politicians abandoning their garbs of economists as the general election draws near. First came the mega loan waiver for the farmers costing the exchequer over Rs 60,000 crores.The Finance minister has so far been able to reallocate Rs 10,000 crores only for the loan waiver. Is he leaving the Herculean unfinished job of providing over Rs50,000 crores for his successor being sure that he would not have to burn the mid-night oil over the problem? Then the largesse for the middle class following the announcement of tax sops would cost the nation dearly. The 'aam admi' are already reeling under as inflation shows no sign of being reined in. On the other hand, with more disposable income in the hands of a small percentage of population the raging inflation is most likely to become worse engulfing more people. As if not satisfied with its own profligacy, the government appears to be patting its back for having got the recommendation of the Sixth Pay Commission just at the opportune moment. About forty-five lakh government employees will get 40-60% salary hike putting an additional burden of Rs20,000 crores. What would happen to the pernicious inflation and also the growing disparity between the rich and the poor? There is no time for the policy framers to ponder over these mundane matters now as vote-bank politics is ruling supreme. For those hapless millions who are not part of any pressure groups, such bonanza makes little difference to their lives and on the contrary, they are viewed as ominous signs of darker days ahead. History says when Rome was burning, Nero was fiddling! Is history going to repeat?

POSCO PROJECT IN JEOPARDY

2008-01-07T12:44:00.000+09:00

The 12-million tonne steel project in Orissa to be set up by POSCO was acclaimed as the biggest FDI over two and half years back but it seems to be jinxed. From the beginning, it has been facing roadblocks one after another. There was a furore over the company's reported plan to export high grade iron ores and it died down only after the officials refuted such reports.
The site and infrastructure demanded for setting up of a dedicated port at Paradip also ran into rough weather. But the biggest shock the company got when the landowners of the proposed site refused to part with their land. There was considerable media hype that the project would be a boon for the people of Orissa which is one of the most underdeveloped states in India.It was expected by inveswtors as well as the government that people would just lap it up. Instead, organised resistance groups sprang up to protest against setting up of the project for fear of thousands being displaced from their homes and farmers loosing their farmlands.The resistance soon found sympathisers not only among political parties of all hues but also social activists and environmentalists. If one has been following the news reports on agitation that is going on for months, he or she would conclude that the proposed site has turned into a veritable war-zone. Besides regular violence and injuries to protesters as well as lawkeepers, the situation is getting out of hand as people are arming and training themselves to continue their fight against any forcible acquisition of land. Perhaps, the wind of Nandigram has blown to the neighbouring state.
The last straw on the camel's back came by way of the recommendation given by the Supreme-Court appointed centrally empowered committee saying that POSCO should not be given piecemeal forest clearances. It has urged that only after 'considering the ecologicalimportance of the area, number of trees to be felled, adequacy and effectiveness of the rehabilitation and resettlement plan for the project affected persons and benefits accuing to the states', the clearance should be given.
From the hurdles faced by POSCO, it is quite clear that there there has been too many slips 'twixst the cup and the lip. In their anxiety to win some brownie points, both the state and central government have been going gaga over such projects without first tying up the loose ends. The Chief Minister of Orissa has made a bold statement that work at the project site would commence on 1st April, 2008 coinciding with the state's birth anniversary despite such poor progress made by the project in the last two and half years. The first day of April is also used by pranksters all over the world every year to fool people. Let not POSCO steel project provide fodder for April Fool's Day of the year 2008.

Water: Waste Not, Want Not !

2007-11-19T19:34:00.000+09:00

Location of steel plants is generally decided upon the proximity to two most important resources – iron ore and coking coal. Surprisingly, the third one – water which is emerging as critical resource is not always given proper consideration. Water scarcity is flaring up often as a serious crisis in several parts of India despite floods ravaging the country for decades. Industrialization has worsened the situation as power and steel plants spring up which are water guzzlers.
Now that India is poised to emerge as the second largest steel producer in the world attaining 180 million tones of annual production by 2016, the crisis of water is going to aggravate with 3-4 mega projects of 6-12 million tones capacities along with dozen of smaller capacities being put on the anvil.
The states rich in iron ore deposits having wooed investors for new steel projects are in an unenviable position. The case of the state of Jharkhand serves best to exemplify. It was reported that 11 companies including Tata Steel and Jindal Power and Steel Ltd have applied to draw water from Subernarekha which has the flow of 1520 million cubic meter (MCM) water against the demand of 1667 MCM. Officials said that nearly 329 MCM is being drawn from the river for irrigation, 220 MCM for potable water and 150 MCM for industrial use.
Indian steel industry’s water usage is abysmally poor. For producing one tonne of steel, according to CSE, steel companies in India use 10-80 cubic meter water where as US plants use only 5-10 cubic meter water. Moreover, approximately 80-85 per cent fresh water used in steel making in India is discharged as effluent although over 90-95 per cent water used for steel making in USA is recycled.
Steel is necessary for development but water is essential for life. For sustainable development, the steel industry in India would have to learn to conserve water and use new technology to minimize its use just as it struggles to reduce greenhouse gas emissions to fight global warming and protect the environment. India’s quantum jump in steel production from 51 million tones to 180 million tones will call for celebration only when the scarce water resources are judiciously used without triggering social conflicts and causing miseries to millions of common man.
It may be recalled that someone had perhaps rightly warned “The Third World War would most probably be fought over water”. Let not steel industry be the villain of piece!

Glossing Over Climate Change

2007-10-12T20:03:00.000+09:00

An opinion poll conducted by a leading newspaper asked the poser - 'Neither our policy makers understand nor care about climate change'. Pat came the response from the readers; 93% agreed whereas only 5% disagreed with it. Interestingly, the newspaper carried the same day a photograph of a group of school children staging a street play on global warming. The message from the events is clear. The politicians do not put their hearts into such mundane issues as they are obsessed with much more serious matters like how to expand their respective vote banks. Climate change can take care of itself whereas they have very limited time to feather their own nests before the edifice built by severely compromising social and national interests crumble because of their own infightings. There was one more shocking news relating to increasing pollution in cities. Despite directions from the Supreme Court to take measures to curb pollution, the city of Kolkata is chocking due to a lax administration and the city has a maverick Transport Minister who fires salvos unfailingly whenever courts deliver any judgement putting restrictions on the irresponsible and undisciplined public transport operators. It is reported that the mandatory emission tests of vehicles averages a mere 14% for 1.3 million vehicles belching their polluting fumes at will throughout the city. No wonder, Kolkata city has the highest incidence of lung cancer in the country. If only our policymakers understood that they are as much susceptible to health hazards caused by high pollution, they would perhaps divert their attention from power games to climate changes and fighting pollution which will benefit common man.

Politics Invade Steel Projects

2007-08-22T13:52:00.000+09:00

There is all round euphoria and optimism pervading the steel ministry. The national steel policy had envisaged a total production of 110 million tonnes by 2020. The ministry had originally envisaged steel production of 65 million tonnes by 2012, which had been revised to 80 million tonnes. Having revised production figures for crude steel production in the financial year 2006-07 and pegging at 50.71 million tonnes and that of finished steel at 51.90 million tonnes thus becoming the 5th largest steel manufacturer in the world, the optimism of Steel ministry understandably continues to soar high. The steel secretary said recently “Based on the current expansion program, that the companies have presented, it is estimated that the capacity of all the companies put together to touch close to 120 million tonnes. Even if they operate at 90% of the installed capacity, the production level will be at 110 million tonnes.”
In industry circles, such projections of capacity expansion are termed differently namely Pessimistic, Optimistic and Realistic. While the Optimistic projection has been given above, the pessimistic projection would be quite uninspiring based on growth attained in the past decades. The growth of steel industry during 2006-07 though very outstanding cannot be taken for granted as normal for the next five years, some cynics may argue.
It is understandable that such optimism is based on what was discussed by the ministry officials with the steel industry captains recently. It is reported that they pledged to create an additional capacity of 70 million tonnes within next five years and "they have gone full throttle to fructify their expansion plans".
Unfortunately, things are not moving always exactly as per the plans drawn up by industry captains and bureaucrats. There is too much politics in the air polluting the industrialisation tempo. The violent resistance in several states to SEZs serves to tell the people who are actually calling the shots. Even the POSCO steel project in Orissa which was showcased as the largest foreign investment in the steel sector has been languishing for nearly two years due to local agitation over land acquisition problems. The inter-ministerial group (IMG), set up by the government to expedite investments in the sector, cannot provide relief to investors whenever politics get precedence over economics.
So whether projections will ultimately turn out to be optimistic, pessimistic or realistic will depend upon politics and going by the present uncertainties and the low level to which it has already plummeted, such optimism may turn out to be misplaced.

Look Out! Your 'Carbon Footprint' Is Showing

2007-07-30T10:05:00.000+09:00

The catastrophic effects of global warming have started sinking gradually among people all over the world as more and more irrefutable scientific evidences pour in. Greenhouse gas emissions mostly consist of carbon dioxide have been identified to be responsible for playing havoc with the global climatic change. Hard facts are pointing fingers at developed nations to be worst offenders for contributing recklessly to global warming due to their extremely high level of carbon dioxide emissions compared to the developing nations.
Data pertaining to the year 2004 published in newspapers are found to be fully in line with the above inference. The carbon dioxide emissions in million tonnes for the year country-wise are: USA - 5912, UK - 580, Japan - 1,262, Russia - 1,685, China - 4,707 and India - 1,112.
If the total emissions data are unsavoury for the developed nations, the picture is even more revealing about individuals of different countries. Those who live in large houses, occupy big office spaces, travel by cars and planes frequently and use more electric power for air-conditioning and heating are the ones contributing more dangerously to the cause of global warming as in such cases more fossil-fuel burning is warranted giving rise to higher carbon dioxide emissions. A person using bicycle or public transport and living in small house, lighting his house by CFLs and travelling by trains instead of planes would be a 'green' hero whether he or she adopts such a lifestyle by choice or compulsion.
So, even in the developing countries, there are offenders albeit those belonging to the richer classes whereas the poorer masses have to bear the brunt of global warming despite their 'green' lifestyles. Such awareness among the 'haves' and 'have-nots' is bound to ignite social dissention just as striving to usher in change in carbon footprints of the rich is going to be a Herculean task. Global warming , however, cannot discriminate based on the economic or social status while punishing the inhabitants for ravaging the environment.
After all, Death is the greatest leveller, is it not?

Global Warming: Dubious Ways For A Noble Cause

2007-07-20T18:28:00.000+09:00

It has finally dawned upon people all over the world that the apocalyptic disaster due to global warming can no longer be wished away and it is waiting as sure as death to strike the Planet Earth. With resigned acceptance by people and media coverage, the awareness about the lurking danger is fast spreading. The initiatives of Al Gore's Life Earth have already resulted in big musical shows in Tokyo, Sydney, Shanghai, London and Hamburg drawing huge crowds. More are being planned all for the noble cause of fighting global warming. Tens of thousands of music lovers thronged the venues in their cars with the aim of fighting the menace and added more greenhouse gas emissions instead. It turned out to be a case where the remedy is worse than the disease. Moreover, with celebrities like Madonna championing the cause, the effect could just be the opposite. Her 'carbon footprint' (with limousines, private aircrafts and luxurious lifestyles in tow) is not going to inspire the common man even as fans in these concerts have been reportedly urged to sign a seven-point pledge designed to change behaviour and put pressure on political leaders in every country.
But fans love to imitate the lifestyles of their favourite celebrities. So, those, like me, who want the whole business of fighting global warming to be serious one, would raise eyebrows at yet another well-publicised campaign titled 'Global Cool' which is being kick started by Hollywood star Sienna Miller with Bollywood superstar Amitava Bachan. The ostentatious wedding ceremony the superstar Amitava recently arranged for his son-actor Abhishek must have caused equivalent to a few thousand times 'per capita' greenhouse gas emissions. Unless the idea is merely to create media hype for the campaign, it is doubtful if any actual benefit would be bestowed to the cause by choosing such dubious ways.
Yet another striking example of celebrities being drawn to the bandwagon is that of Salman Khan. The actor was arrested for killing rare birds while on a film shooting spree in Rajasthan and the case is still under trial. How can such a person inspire the general public to protect the environment? Let us neither pay lip-services to fighting global warming nor make it a farcical musical soiree.

Let Us Make 'Green' Steel

2007-07-02T10:09:00.000+09:00

India is already the seventh largest steel manufacturer in the world making 44 million tonnes of steel during the year 2006 and is aspiring to catapult to the second position by the year 2020 with a production capacity of 180 million tonnes. While such targets have caused excitement and euphoria, little has been heard or talked about what impact the massive steel industry expansion would have on the environment.
The whole world has accepted the contention that development should never take place at the cost of environment; it is high time that such issues are discussed and settled here too. Due to stringent environment laws prevalent in USA and Europe, steel units have fallen from grace of general public as one of the main culprits for environmental degradation and have closed down unable to make steel economically.
While India has got an enviable iron ore reserves which ought to be exploited fully for its own economic growth and providing job opportunities to the millions of jobseekers, we cannot afford to turn a blind eye to the environmental issues while planning to boost steel production capacity four-fold within a span of just 12 years.
The environmental damage can be somewhat controlled if steel is brought under eco-labelling umbrella. A license is granted to a product based on a basket of criteria including sources and types of raw materials used, judicious use of natural resources, energy-saving production processes, waste management and the product's bio-degradability. Though the general public is somewhat aware of ISI mark as a sign of quality assurance given by Bureau of Indian Standards(BIS) to a wide range of products such as consumer products, consumer durable products and iron and steel products, it is still not known to many that BIS also issues EcoMark which is an eco-labelling scheme. There are already 16 product categories covered by it which includes electrical goods, lubricating oils, textiles and plastic products but not steel products so far. Interestingly, BIS does not charge anything for EcoMark for those manufacturers who have licenses for ISI mark.
For the sake of protecting environment, let our steel manufacturers produce 'green' steel with with EcoMark labels. Merely making steel to IS specifications will not suffice to vouch for their social responsibility to protect the environment. The new generation steel consumers may insist on buying only 'green' steel as the awareness grows and everyone's 'carbon' footprint is closely watched.

Changing Lifestyles to Fight Global Warming

2007-06-11T11:54:00.000+09:00

"The threat of climate change is real and unless we alter our lifestyles and pursue a sustainable model of development, our future will be at peril."
You must have read it - the message was given by Prime Minister Manmohan Singh to his 1.1 billion countrymen on World Environment Day. That he finally turned his attention to the imminent global crisis is surely a consolation to many even as other nations have already taken several measures to reduce greenhouse gas emissions.
In my post 'Global warming: Challenges for The Corporate World', I had touched upon a few steps the corporate world can embark upon to save the planet Earth from unimaginable devastation due to climate changes. As individuals, we too can fulfill our social responsibility in this war against global warming which ironically has been brought about by man himself by his lifestyles with no thoughts spared for the damages they cause to the environment. Experts suggest changes in lifestyles can defer and reduce the severity of global warming. Some of them are:
1. How you go from place to place
The least damage you can cause to the environment in going short distances is to walk down. Cycling may the next best thing to do. For longer distances, public transport should be availed. In case cars are to be used, let the fuel-efficient small cars using bio-fuels be the natural choice and certainly not big cars or limousines which are fuel-guzzlers. Similarly, train journeys will reduce the greenhouse gas emissions several times over compared to plane travel.
2. What are your food habits Organic foods and vegetables should be part of your menu as without use of fertilizers and pesticides, these are eco-friendly. For those having preference of non-vegetarian food, it should be admitted that the environment gets unduly burdened to support the animal livestock.
3.The way you live in your home CFL lighting saves energy by 80% and should replace all lighting by incandescent bulbs. Saving energy is the best way to save the environment. Even using showers instead of buckets of water for baths is a luxury one better avoids for fighting global warming.
4. Keep the family size small Since man is directly and indirectly polluting the environment, less population will automatically bring down greenhouse emissions. So smaller the size of the family, the more 'green' will be its carbon footprint.
Can we really bring about such radical changes in our lifestyles? Perhaps it would need all sincerity and commitment on the part of every individual to make an impact on the environment. It would be indeed a daunting task in a world whose privileged class does not want to sacrifice anything for the sake of benefiting the masses - the empty rhetoric of politicians notwithstanding. Will they ever set examples for others by practicing what they love preaching? The swanky offices and homes of ministers and MPs, the convoys of cars used often for every occasion by them, the traffic snarls (read more pollution) their movements cause are just a few examples to show where a beginning can be made for emulation by others. But that sounds like a pipe-dream.
Is it not?

Global Warming: Challenges For The Corporate World

2007-05-29T00:09:00.000+09:00

As a thumb rule, a company's image is generally dependent upon how much profit it makes. While buying stocks or just for maintaining brand loyalty, the public views the company from this angle alone. However, traditional yardstick of profit to rate companies may soon become outdated. After its six years of painstaking research by 2000 experts by The Intergovernmental Panel on Climate Change (IPCC), the three successive reports have bluntly put the steps needed to be taken urgently if the climatic catastrophes are going to be kept in abeyance if not averted altogether. Progressive corporate houses that are conscious of their social responsibility are already trying to do their part and watch their carbon footprints. Such concerted actions are the need of the hour to mitigate the serious problems likely to strike mankind.
Modern offices are swanky and spacious illuminated brightly by incandescent lamps. Bosses occupy office rooms whose sizes seem to match their egos than anything else. If the offices are designed to allow more natural light and use energy-efficient lighting, there would be lot of saving of power which in turn would bring down greenhouse gases. Such buildings should provide solar panels to meet its own power requirements even if partly. Companies having residential colonies can go for central air conditioning which can supply air to the houses. A small community town is reportedly getting ready in Florida having such a facility. Some corporate bigwigs, however, may develop cold feet to such measures which in a way try to clip their wings.
Contrary to popular belief, automobiles cause more pollution than factories. Instead of travelling by individual cars, if the public transport is used by employees of companies, then there would be significant reduction in greenhouse gases. The corporate tradition to provide cars of sizes to executives commensurate with their hierarchical positions is unjust in a world fighting global warming as bigger cars are fuel-guzzlers. The cavalcade of cars often seen whenever the top bosses travel may be good for ego trips but is outrageous from the point of becoming carbon neutral.
Executives of progressive companies frequently go places. They fly in and out to save time. Unfortunately, air transport causes many fold greenhouse gas emissions than train travel. Although train journey is slow, it should become the unenviable choice for the sake of fighting global warming. Some airlines offer free tickets for frequent fliers for their business growth. There are many instances when executives of large corporate houses get more interested in availing the free tickets than doing justice to the purpose for which the flying is undertaken. Such schemes may be very attractive to individuals but they leave dubious carbon footprints.
As the awareness grows about causes for greenhouse emissions and measures for its control, everyone is going to watch with alacrity how carbon offsetting is being made by individuals as well as corporate houses. Carbon footprints may soon be the new bottom-line for companies.

To Fight Global Warming Or Not To ...

2007-05-07T10:01:00.000+09:00

Horror scenarios of global warming are no longer being brushed aside as mere flights of imagination of some over-zealous scientists. After the publication of two successive reports submitted by UN's Intergovernmental Panel on Climatic Change (IPCC), people in general all over the world have belatedly become aware of the fast approaching Doom's day. It has now dawned upon everybody that this man-made crisis can only be somewhat mitigated by man-made solutions. The present war-cry is to cut down greenhouse gas emissions as much as possible so that even if action is taken now, the impact would be felt after decades.
As a simple measure, the use of energy-efficient fluorescent lamps (CFLs) instead of the conventional incandescent lamps can reduce carbon dioxide emissions drastically. According to the UN draft report, this change alone will reduce a billion metric tonnes of carbon gas emissions and will save $122 billion by the year 2020. The benefits are simply awe-inspiring and nations are getting ready to jump into the bandwagon.
Unfortunately, every change is accompanied by some pain or the other. Even before the awareness about the above energy-saving measures spreads and among the masses, the conventionalists are taxing their brains on how to stall such changes. Their contention is that use of energy-efficient lamps may enhance mercury contamination unless their manufacturing and disposal are handled with utmost care as these lamps contain highly toxic mercury in them. While no one should overlook the need of caution to be exercised, there is a risk of vested interest spreading misinformation especially among poor and illiterate masses in developing countries to pour cold water on such useful products.
Among the two evils of global warming and mercury contamination, while global warming is threatening to wipe out life from the planet Earth, mercury hazards which can become life-threatening sporadically must be minimised by adopting safe handling and disposal methods. It appears as though man is caught between the devil and the deep sea. But my survival instincts prompt me to take on global warming first and after taming the demon go after mercury hazards.

And Miles To Go Before ...

2007-04-30T19:09:00.000+09:00

India would love to be ranked No.2 globally - be it economic power or steel production or some other criterion. We are already euphoric about emerging as the second strongest economy by the year 2050. This is not daydreaming. The world famous financial analyst Golden Sachs made this forecast after thorough research. But doubts linger in the minds. Already the GDP growth rate for the year 2007-08 has been scaled down to 8.5%. Then, are we going to attain double digit growth rates or the economy will start cooling even before getting heated?
I read in Economic Times that India is set to emerge as the world's second largest steel producer by the year 2016 when the production capacity will rise to 120 million tonnes. The steel secretary is reported to have given this one-liner assurance -"Given a conducive mineral policy framework, this country should be producing 120 million tonnes by 2015-16 and 180 million tonnes by 2019-20". Doubting Thomas es would say it took 16 years after the liberalisation of the steel industry to double the capacity; will it then be possible to treble capacity just within 9 years notwithstanding the acquisition spree of foreign steel companies by domestic producers. The National Steel Policy took years to see the light of the day. The mineral policy framework will emerge only after several ministries and Planning Commission arrive at a consensus. All this will take time. Then one does not know whether the policy will really be 'conducive' to the steel industry or not. Some of the mega projects for which MOUs were signed with lot of fanfare have not made much progress. Posco project in Orissa is still dragging its feet over land acquisition and independent port facilities at Paradip. The JSW project in West Bengal is facing resistance over land acquisition.
The serious delay in execution of power projects (which are the most important ones for building the infrastructure) and the recent alarming news of severe power cuts in the industrial hub Mumbai affecting production show the failure of the government to implement projects in time. During the Tenth Plan, power sector could achieve just 56% of capacity addition against target. The Working Group on power has already warned of serious fund shortage to the tune of Rs450, 000 crores ($100 billion) during 2007-12 which is nearly 45% of the total funds needed for power projects during the period.
With such pathetic performance of the government in the past, the optimism aired by officials should be taken with a pinch of salt. We should not get too excited about such scenarios as we have learnt from past experiences that there's many a slip 'twixt the cup and the lip. Some may consider me as a pessimist for expressing such doubts. I would be happy if I am proved wrong.

Carbon Credit At Risk of Getting Discredited

2007-04-25T10:29:00.000+09:00

'Carbon credit' has so far been touted as a practical scheme of fighting global warming. Simply stated, it is intended to reward 'carbon credits' to those who bring down greenhouse emissions by adopting appropriate measures. Those who exceed greenhouse emissions would have to buy 'carbon credits' for offsetting.
The whole business of fighting global warming this way appeared too simplistic to me. My apprehension that the rich nations would be exploiting the poor nations by their unrestricted greenhouse emissions with the help of carbon credits bought from the poor nations was sounded in my post 'Carbon Credit As Sops Saps Poor Nations'. It said:
"... GHG emissions, unfortunately, do not affect selectively but pervade everywhere. So the rich as well as the poor will suffer unimaginable losses in the long-term and we will be leaving the planet in much less habitable condition for the future generations.What a ghastly scenario!" After reading a news report in The Times of India titled 'British firms use India prop to pollute', I feel reassured that I was not wrong in harbouring such apprehension. It quotes Mary Taylor - a green activist saying
"It is really perverse. It allows western companies to continue polluting while handing over large amounts of money to a company in India, which itself produces large amounts of green house gases."
Companies earning millions of dollars by encashing carbon credits and investing the profits in projects that contribute to global warming should not be allowed to put an air of 'holier than thou' in the corporate world while for the poor masses, it would be be out of frying pan into fire.
Is it not?

Scoring Hundred

2007-04-10T23:20:00.000+09:00

The Significance Of The Number 100
The digits 0, 1, 2, 3, 4, 5, 6, 7, 8 and 9 singly or in combination give various numbers. However, the number 100 has different significances altogether depending upon the context in which it is used.
Milestone in Life: Octogenarians and nonagenarians are not held in public awe anymore with longevity increasing all over the world. But when one completes one hundred years, the centenarian does get reverential attention.
Academic Performance: In schools and colleges, the most brilliant student is indisputably determined by the one who scores 100 out of 100.
One Hundred Metres Sprint Race in Olympics: There are dozens of sport events for which medals in Olympics are awarded to the winners. But the winner of gold in one event - 'One hundred metres sprint race' is given the singular honour of 'fastest man/woman in the world'. The fastest man today in the world, according to the official records, is Donavan Bailey of Canada who finished the race in just 9.79 seconds.
Googol: One of the two Google founders Larry Page had initially wanted to give the name Googol to their search engine. Googol is 1 followed by one hundred zeroes just as one billion is 1 followed by nine zeroes. Due to some spelling mistake, Googol became Google which millions use as search engine.
The100th post in Blog: Bloggers are publishing thousands of posts in their Blogs round the clock. But the 100th post, I think, is a very significant milestone for an individual Blogger. Self-propelled to blogosphere without any idea about the alien world, my blog 'Satish and his thoughts' started on 24 June, 2006 completes its 100th post with this. For me, its significance is no more less than other significant 'One Hundred's listed above. But for the support and encouragement of you all, my blog would not have seen this red-letter day.
I wish you all 'Happy blogging' in days, months and years to come.

Appalling Apathy To Alarming Global Warming

2007-04-06T23:15:00.000+09:00

If my last post was on indifference at the national level to the impending crisis due to global warming, the present one based on an news in Economic Times titled 'Doomsday's here. Almost' touches upon the apathy at international level.
The writing is on the wall that man-made greenhouse emissions might trigger massive extinction of life on Earth in near future. The Intergovernmental Panel on Climate Change (IPCC), after its six years of painstaking research by 2000 experts, has warned in its first report of rising global temperatures and sea levels. "The Earth would heat up between 1.8 centigrade and 4 centigrade by the end of the century, and upto 6.4 centigrade at the poles which heat up twice as fast around the equator. Melting ice has led sea levels climb 17cm in the 20th century and at the rate of 31cm per year since '93."
The irony is that the climate changes will affect the poorest regions in the world that are least responsible for production of greenhouse gases. As if to rub salt to injury, the worst offender nation USA which produces 25% of global emissions has been apathetic to joining Kyoto Protocol that has united all nations with few notorious exceptions to fight out the catastrophe. Perhaps, such attitudes and past actions on the part of some rich nations prompted Pope Benedict to write in his first book "Rich countries bent on power and profit have mercilessly plundered and sacked Africa and other poor regions and exported them the cynicism of a world without God."
The hapless millions of the developing nations which are being punished for the wrong-doings of others would find solace to know that the US Supreme Court has now declared global warming a serious and urgent problem in its first ever ruling on the subject. With ice-caps perilously melting in the polar regions, I hope the offenders' hearts would also start melting at the misery of the poor millions. As part of their retribution, massive assistance to the needy to mitigate the situation is called for.
Better be late than never!

Is Anyone Listening To Warning On Global warming?

2007-04-02T23:06:00.000+09:00

After a long time, I found today's newspaper headlines screaming "Himalayan Meltdown only 20 years away ..." truly newsworthy. Usually, this space is taken up by news relating to cricket World Cup or such banal issues like government's ban on TV channels for committing obscenity or hike in bank loan rates. As if, these things deserve more attention than the apocalyptic scenario of impending global warming.
According to an UN draft report by its climatic panel, the glaciers in the Himalayas will melt away affecting hundreds of millions of people. The draft technical summary warns "If current warming rates are maintained, Himalayan glaciers could decay at very rapid rates shrinking from 500,000 square kilometres to 100,000 square kilometres by 2030s. In Africa and Asia, millions would go hungry due to damage to farming and water supplies. In lands close to the equator, declining crop yields would leave hundreds of millions unable to grow food".
The whole world is slowly waking up to the stark reality and several community measures are being taken on a war footing to ward off the effects of greenhouse gas emissions. In Sydney, they switched off incandescent lights and air-conditioners to conserve power and thereby collaborate to fight global warming.
Our leaders here are seized with more pressing things like election in UP, Supreme Court ruling on OBC quota etc. Of course, they are far-sighted enough as far as their vote-bank politics are concerned and would rather be interested in expanding their own fortunes than worrying about shrinking Himalayan glaciers by 2030s. By then, it would be too late to rectify their Himalayan blunder!

No Time For Governance

2007-03-30T12:28:00.000+09:00

“Procrastination: Hard work often pays off after time, but laziness always pays off now” - Larry Kersten (American Sociologist and Author).
I found the above quote very amusing and relevant. Those in the government - ministers and bureaucrats seem to have been immensely inspired by it. Or else how can one gloss over the colossal loss of over Rs25,545 crores ($58 billion) incurred in 476 centrally-funded projects. It just sums up to 8% of cost overun. The irony is that the most serious delays occurred in power, petroleum and railway projects which constitute the backbone of India's infrastructure. The government, without any let or hindrance, would be happy to fantasize about becoming the second largest economy in the world when development of basic infrastructure vital for such dreams to materialise remains neglected.
Who is to blame for such poor performance? Nobody. In the recent history of the government, there is hardly any instance when any head of a minister or bureaucrat has rolled for such failures. Introspection seems to be the right medicine to cure such maladies. The other day, the Prime Minister, while talking on the slippages in power projects, suggested introspection for the officials. For the crucial power sector, the achievement against the target was a meagre 56% for the Tenth Plan. Interestingly, such shortfalls did not happen overnight but was spread over 5 long years and despite a separate ministry of Programme Implementation supposedly monitoring central projects round the year.
BCCI President Sharad Pawar, who is also the Agriculture Minister, also advised introspection after the debacle of Team India in World Cup 2007. Where else his heart should be as BCCI is the richest cricket organisation in the world? It is unfortunate that he cannot devote so much time for the hapless farmers who are committing suicides by dozens.
Similarly, inflation is forcing millions of self-employed, daily wage-earners and senior citizens(who are not getting pension from the government) to tighten their belts to make both ends meet. The ministers and the government officials who should have been alarmed at their own failures are protected automatically with their pay and perquisites linked to consumer price index. And even before any pressure has built up for setting up of the Sixth Pay Commission, the Prime Minister himself took the initiative to announce it to win the hearts of the pampered and organised group of government employees who constitute merely 4% of the total labour force.
My advice to the remaining 96% of the labour force is that they should be patient and introspective.

India's Fuel Basket For Power

2007-03-26T18:40:00.000+09:00

Starting from where I had left my last post, India is gearing to use a basket of fuels for meeting its burgeoning power needs. It aims at generating 65.6% (84,400 MW) Thermal, 26.6% (33,942 MW) Hydro, 3% (3,900 MW) Nuclear and 4.8% (6, 191 MW) Renewable power by 2012. Thermal Power: India is endowed with huge coal reserves which provide a ready and economical resource. Obviously, it has been chosen as the main fuel for power generation till 2012. Out of the total thermal generation, coal-based generation has been fixed at 69,616 MW (54.1%), gas-based generation at 13,582 MW (10.6%) and oil-based generation at 1,203 MW (0.9%). Gas-based plants have the advantage that they can be commissioned within 28 months whereas the coal-based plants need at least 40 months. There is a low capital cost and commissioning cost for gas-based plants too. In a study of comparable cost, it was found that Interest during construction (IDC) and financial charges (FC) work out to only Rupees 2.75 crores ($.62 million) per MW for gas-based plants whereas it is Rupees 4.24 crores ($96 million) per MW for coal-based plants. India's preference should be for gas-based plants for their lower cost and less time taken for commissioning. The supply position of gas is also going to improve drastically and will be boosted to 250-270 mmscmd by 2012 from the current level of 90 mmscmd.
Hydro Electricity: India has vast potential of 150,000 MW but it is yet to be tapped. Generation of 33,942 MW by 2012 is envisaged which amounts to an utilisation of only 17% of the potential. Hydel power is clean energy and its generation is independent of fuel supply. It should therefore be given the priority it deserves.
Nuclear Power: Though only 3,900 MW (3%) of power generation by nuclear plants has been envisaged by 2012, there is a lot of scope to increase capacities significantly. India has got good reserves of Thorium. Public sector initiatives along with private sector partnerships will be required to expand capacity of nuclear power.
Non-conventional Energy Sources: A target of 6,191 MW (4.8%) for non-conventional energy sources by 2012 appears to be achievable. Wind, solar, bio-mass energy are showing great promises. Unfortunately, the emphasis has so far been on traditional sources chiefly coal though non-conventional energy sources can be exploited with proper support from the government. India's power position is going to improve as the mix of fuels for generation undergoes rapid changes due to cost, availability and environmental factors. Such prospects are brightening gradually.

India's Power Scenario Brightens Up

2007-03-21T10:32:00.000+09:00

Power is one of the most critical components of infrastructure required for economic growth and better standard of living. Historically, the growth in the power sector has been always sluggish compared to the economic growth in India where as it should have been the other way. Now that India's GDP is growing at the rate of 8-10% and is projected to grow at 10% during the XIth Plan period (2007-2012), the desirable growth rate for the power sector ought to be at least 12%.
Despite such an apparent deficiency in its infrastructure, the famous financial analyst Golden Sachs stunned the world with their recent conclusion that India's economy would emerge as the second largest in the world - next only to China by 2050 and it would surpass Japan by 2032. It would be safe to presume that such conclusions were made definitely after taking into consideration the strategies and blueprint prepared by the Government and planners which aim to add a whopping 1,00,000 MW additional generation capacity by 2012 to bridge the gap between demand and supply of power.
It involves the capacity addition target of 45,500 MW for central Public Sector Undertakings under the Ministry of Power, 41,800 MW for State Electricity Boards/State Utilities and private sectors. Nuclear and non-conventional energy have been given more importance to augment power. A target of 6,400 MW of nuclear power and 10,700 MW of non-conventional power has been fixed for the period upto 2012.
With such massive capacity addition, the per-capita consumption of electricity would reach 1000 KWH/year from the level of 606 KWH/year (2004 - 2005). This is still much below per-capita consumption of 10,000 KWH/year in some developed countries. The latest provisional figures show a peak demand of 100,423 MW where as the demand being 86,425 - a deficit of 13.9% (April 2006-January 2007). Taking into account the gigantic task as well as the huge potential in growth of power sector, the Government of India has set its goal - Mission 2012: Power for All. In line of its commitment, the annual budget for 2007-08 (which essentially is a statement of accounts) has increased the budgetary support for power reforms and development from Rs650 crores ($148 million) in 2006-07 to Rs800 crores ($180 million). It has also given emphasis on Ultra Mega Power Projects (UMPP). These projects involve huge investment in the region of Rs20,000 crores ($4.5 billion) or more with capacities of 4000 MW. Two units at Sasan and Mundra have been cleared and two more are expected to be cleared out of seven UMPPs by July,2007. For accelerated growth in the power sector, such projects hold out great promise.
So, there I see light at the end of the tunnel. Do you?

Children Take The Lead In Fighting Global warming

2007-03-14T09:52:00.000+09:00

Today global warming and its apocalyptic effect on the planet Earth is no longer viewed by the scientific world as distant scenarios but is a hard reality facing the entire human race. It is, however, shocking that masses still live in the illusion that it is not going to affect their lives even as clinching evidences like shrinking icebergs in Arctic or Antartic regions as well as other serious climatic changes are regularly reported. A recent report of Reuters said "13% Americans have never heard of global warming, even though their country is the world's top source of greenhouse gases".
If this is the state of affairs with the nation of richest economy and high literacy, the awareness among people in India having poor literacy is obviously very low. There is a ray of hope, however, to the looming crisis. It has been possible to spread the awareness unexpectedly through animated films and movies for kids. Movies produced abroad like Ice Age: The Meltdown for the children dealing with global warming was a big box-office hit.
Children in India can also play a very effective role in spreading the awareness among people. They should learn subjects such as global warming, environment and pollution compulsorily at the high school level. In all interviews and examinations for recruitment, each candidate must satisfy the selectors that he has the minimum required knowledge about global warming. Thus awareness about global warming will go up and that is how a beginning can be made to fight it. How I wish it happened yesterday!

Indian Chilli Enters Guinness Book of World Records

2007-02-23T19:46:00.000+09:00

You must have found the title some what amusing and wondered what I was really up to - writing on steel. roses and now chillies. As I am committed to portray India's inner strength despite thousands of blogs still engaged in showing only its poverty, beggars, monkeys, snake-charmers et al, this post had its compelling reasons.
Coming to chillies, I have been reading reports about them in Times of India for the last two days with the last title 'How India won the chilli war'. International honours are hard to come by and when it was to be decided which chilli is the hottest, there were 3 serious contenders. The result (do not mistake in assuming that it was based on tasting them as that would lead to, who knows, terrible consequences) was given after elaborate tests were carried out by New Mexico State University's Chilli and Pepper Institute. The Indian entry known as Naga Jolokia was crowned with the honour scoring 1,001,304 Scoville Heat Units (SHUs) and USA's Red Savina scored 577,000 SHUs. The other entrant Dorset Naga which was developed for years scored 923,000 SHUs. Just to get an idea of hotness of chillies, any chilli having only 300,000 SHUs will bring tears. It is perhaps for the obvious reason, Naga Jolokia has a local name 'Bhoot' (ghost) as one would surely start seeing ghost when it is put in the mouth even accidentally. Records are made only to be broken.
Guinness Book of World Records have many examples of old entries giving way to new entries. In this age of globalisation, one cannot shy away from competition. Till some other chilli is found to be hotter than Naga Jolokia in some other part of the globe, let us savour its global honour (definitely not its taste though!).
To sum up, India is surely very very hot.

India's Acquisition Spree From Steel To Roses

2007-02-19T09:56:00.000+09:00

Recently, India proved that it has the nerves of steel by acquiring two steel giants of Europe - Arcelor and Corus to become the world's No. 1(Mittal-Arcelor) and No. 5(Tata-Corus) manufacturers .There might be a mistaken impression among some quarters that its most acquisitions have been made for manufacturing or services.
It all changed after I read a news report on St. Valentine's Day that a firm in Bangalore is negotiating with a Dutch flower company Sher - the biggest in the world for acquisition. Incidentally, it seems 40% of annual rose sales takes place on this occasion alone. It may be too early to speculate whether India will be catapulted to become the world's biggest grower of flowers; but already it is being reckoned as a flower power with exports touching $678 million which is expected to cross $1 billion by 2010.
Adding such feathers to India's cap would be truly admirable if one does not read daily about farmers' unabated suicides and grim struggles of tens of thousands of farmers. The stark reality is that even agriculture is not free of infrastructure weaknesses which have been impeding growth of manufacturing sector. Power has been a laggard for decades although other sectors have been scaling new heights.
Not surprisingly, the noted business school KnowledgeAtWharton and a consulting firm The Boston Consulting Group have said in a new study "India is on its way to becoming world-class manufacturer due to changing environment but poor infrastructure, bureaucratic red tape and restrictive labour laws have kept India's manufacturing a backwater while its services have become red-hot'.
'Sher' means tiger in Hindi and to capture big tigers including the Dutch one, India must firstly have power - to light homes, run factories, turn pumps and also to make roses bloom brilliantly.
Is it not?

How Are You Celebrating Valentine's Day?

2007-02-14T23:06:00.000+09:00

My heart leaped in joy today in the morning when I got a SMS with the starting words 'Dinner at Taj for u...'. Soon my soaring spirits got deflated on reading the next line 'On this Valentine Download and Dedicate Romantic Songs and U could be the Winner...'. It did not take me long to realise that the great Valentine's Day has arrived as I glanced over the pages of the morning newspaper. My favourite page had a strange look full with classified ads. Some 250 persons had decided to make the world know that they love someone by displaying their printed messages so that the loved ones can always preserve and produce them as proof of their lovers having remembered them at least on this day.
I learnt that on 14Th day of February, Valentine's Day is celebrated and is dedicated to love. Lovers feel they are on top of the world on this day and the romantic frenzy is sought to be built over weeks in advance with media splashing big ads of special gifts for the occasion. Although this day of the calendar I had crossed 65 times in my life so far, I do not remember to have done anything special. Was it because I expressed my love on all the 365 days of the years instead of letting it out on one single day or I am not "trendy" enough to be influenced by the changes sweeping our society?
I wanted to contemplate further. I read a report in Times of India which answered my query about the origin of Valentine's Day.
"In 270, Roman emperor Claudius II was unpopular for waging wars. He lost so many men that he found it difficult to find soldiers. So, he cancelled all marriages and engagements to force the youths to join the army. St. Valentine, a priest, secretly married couples till he was arrested and beheaded on 14Th February."
Since lovers want this day to be celebrated in a special way, it is their choice. I do not believe in jingoism and hence would not comment that this is a foreign custom making way into our lives. At the same time, I do not agree in this case, with the saying 'What is sauce for the gander is sauce for the geese'.
Don't you agree?

Kudos For India's War Against Global Warming

2007-02-08T22:55:00.000+09:00

India's current rapid economic growth is drawing increasing attention from far and near with projections released by reputed agencies that it would dislodge Japan from its third rank by 2032 and USA from its second rank by 2050.
A more deserving achievement by India, however, I feel, is its highest reduction in green house gas (GHG) emissions (which have been responsible for global warming) among the developing nations Brazil, Mexico, China and Chile. As per Kyoto protocol, these nations including India, though not bound to reduce emissions, have been encouraged to adopt measures and at the same time earn 'carbon credits' which are tradable globally so that those who cannot achieve reduction in emissions could buy such 'carbon credits' for offsetting. As per a report, India tops such a list with 155 projects registered out of a total of 492 followed by Brazil 88, Mexico 77, China 37 and Chile 14 projects. Some more projects are awaiting registration. It has been estimated that it may finally bring 350 million 'carbon credits' which on a conservative basis would generate a whopping $3.5 billion by 2012.
It has been like killing two birds in one shot. In my post

India: Yesterday, Today & Tomorrow

2007-02-05T23:03:00.000+09:00

Today, Indian economy has slowly started getting a respectable position globally. Her GDP growth has now become, what many economists believe, sustainable at 8-10% and in the process the past low growth @5-6% has been buried. Indian MNCs are out for acquisitions abroad and the latest Tatas-Corus deal - the biggest in size by any Indian company involving $12 billion has proved beyond doubt that India has truly become a global player.
How was it yesterday?

"On the eve of industrial revolution (around 1770), India was the second largest economy in the world, contributing more than 20% of total world output. By the 1970s, after two centuries of relative economic stagnation, that share had fallen to 3% - the lowest in its recorded history. From a long-term perspective, the post-industrial economic decline of India (and China) is a historical aberration, driven to some extent by a lack of openness. After independence in 1947, India followed inward-looking and state-intervenist policies that shackled the economy through regulations and severely restricted trade and economic freedom. The result was decades of low growth termed pejoratively the 'Hindu rate of growth'. Reforms beginning in 1991 gradually removed obstacles to economic freedom, and India has begun to play catch-up, steadily reintegrating into the global economy."

So says a report titled 'A game of Catch-up' appearing in Times of India (having its source Golden Sachs' Global Economic Paper no 152).

About tomorrow, I have already reproduced the forecast made, again, by Golden Sachs in my post 'Do you believe India's economy will be the second largest by 2050?' accompanied by my wish-list. The lesson for Indians out of the vicissitudes in last three centuries is "You must run faster to stay where you are".
Is it not?

Bride Corus Ties The Knot With Tatas

2007-01-31T14:36:00.000+09:00

It is a great day for Indians, Indian steel industry and India as a whole. In a fierce battle to win the hands of the Anglo-Dutch steel company Corus, Tata Steel - the oldest steel manufacturer and the second largest in India has come out victorious. As the curtains come down in melodramatic films churned out in dozens by Bollywood, an one-liner usually appear just before the final words "The End" so that no one is left in doubt. The one-liner says 'and they lived happily ever after'. I learnt just an hour back about the happy ending of the Corus acquisition, the popular Hindi song 'Le jayenge, le jayenge, dulhaniya le jayenge'(I will take the bride, I will take the bride) spontaneously started ringing in my mind.
Tata's bid of 608 pence as against the rival Brazilian offer of 603 pence clinched the deal and like a magic wand transformed the Indian steel company from its 53rd position globally to an enviable fifth largest manufacturer. So, there is a lot of wisdom in the saying "Marriages are made in Heaven". But just to remind ourselves lest we forget in such euphoric moments, steel is made by men and he pays the piper who calls the shots.
It is a historic moment for India. Nearly three hundred years back, a British company by name 'East India Company' had touched the shores of eastern India initially for trading in textiles and spices. The British Empire kept the whole of India under its thumb for nearly two hundred years. Now the table has been turned. Tatas have taken over Anglo-Dutch giant steel conglomerate Corus.
My congratulations to Tatas-Corus on their wedding!

Wedding Bells Ringing For Corus

2007-01-29T19:29:00.000+09:00

It is billed as a mega event - it is the wedding of Corus. It is also something unprecedented. The wedding is not going to be over in just a few hours. It will start by 10pm Indian Standard Time on 30th January, 2007 and depending upon what transpires, it may continue up to 8-30am on 1st ebruary, 2007. Interestingly, the groom has not been fixed as yet and there are two suitors.
Yes, I am referring to the acquisition drama of the steel giant Corus for which initially the only suitor was Tatas. But CSN of Brazil came out of the blue and demanded the hands of Corus. I was very thrilled at the prospect of Tata-Corus acquisition as it would have been the biggest by any Indian company for about $9 billion and made it the fifth largest steel manufacturer in the world. Though the earlier acquisition by Mittal Steels of Arcelor (which turned out to be a long-drawn corporate tug-of-war) ended making the combine the biggest steel company in the world, it was, in any case, launched from the foreign soils unlike the acquisition bid by Tatas - the oldest steel manufacturer and the biggest in the private sector in India.
There are contradictory press reports emanating from London about who will win the hands of Corus. 'Daily Telegraph' has said "CSN has the great desire to win Corus and may go as far as 600 pence." The Sunday Times quoted sources saying :"Do not write off Tata yet ...they are serious and they believe they can win." The irony lies in the highest bidder getting Corus despite a general impression prevailing that Tatas and Corus want each other.
In my post 'The eternal triangle of Corus-Tata-CSN', I had already said that I would be happy to see Tatas emerge as winner. I had, at the same time, expressed my misgivings about the drama ending like the film Devdas in which the hero (read Tatas) ruins himself without trying to save Paro (read Corus). Barely 30 hours are remaining for the curtains to come down. The suspense is building up. But then, I am keeping cool being reminded of the wise saying: "By all means get married. If you get a good wife, you will live happily ever after. If you do not, you will become a philosopher."
I do not want Tatas to become a philosopher.

Do You Believe India's Economy Will Be Second Largest By 2050?

2007-01-25T22:14:00.000+09:00

Yes, I do. After all, I am a hard optimist. Why should I doubt the findings of a study that places India in No2 position ahead of USA by the year 2050 especially when the report has been prepared by the internationally reputed Golden Sachs. It had earlier projected India to No3 position just after China and USA by 2032 overtaking Japan.
The sweet music now released also says that India's GDP will quadruple from 2007 to 2020 and the per capita income will increase 35 times by 2050. This will enable Indians to buy cars five times and increase consumption of crude oil by three times. I do not know whether to rejoice at such projections. The scenario of so many cars in congested cities polluting dangerously the already highly polluted environment besides causing other problems is nightmarish and has been touched in my post 'Small cars boom spell urban doom'.
How I wish each word of the projection comes out true by 2050. Many readers may be around then to determine how much of it was realistic and how much was hog-wash. Of course, it is well known that war, natural calamities, epidemics like AIDs and political upheavals may upset the applecart. Nevertheless, I have a wish-list which should materialise preceding what has been forecast by Golden Sachs. My wishes are:
1. India is a strong, vibrant democracy where honest and capable people get elected as their representatives - not by rigging elections, or by use of money or muscle power.
2. India has eliminated hunger and poverty.
3. Every Indian has access to education, health care and social benefits. Cast, creed, language divide created and perpetrated by wily politicians no longer matter.
4.Every village has electricity as well as drinking water and every citizen has a roof over his head
5. Every nook and corner of the country is easily accessible by modern transport.
6. Every citizen is conscious and concerned about environmental degradation and reaches out to do his part to fight air, water and noise pollution.
7. Corruption has been removed from the public life. No one needs to grease the palms of anybody for getting things done.
8. AIDs and other serious diseases have been controlled or eradicated.
9. Women empowerment is visible in every walk of life.
10. Merit has become the sole criterion for advancement and selection in all spheres of life. Political interference, nepotism and sycophancy no longer work. If my wish-list becomes reality, how glorious it would be for India even if the projections of Golden Sachs attain only 50% accuracy.
Is it not?

Dumping Bio-Fuels

2007-01-22T11:03:00.000+09:00

India is racing to emerge as a super economic power. Its rapid progress, however, has got some gaping holes which threaten coordinated and sustainable development. Take for example, the acute power shortage or the lack of infrastructure such as highways and expressways. Measures taken in fits and starts have failed to ensure uniform growth of different segments of the economy.
Bio-fuels can be partial solutions to the whopping needs of petroleum products of the country. Oil extracted from jatropha is blended with diesel to produce bio-diesel which serves as a substitute of diesel. Jatropha can be cultivated even in non-agricultural lands; its farming should receive governmental support by way of subsidies and relief from taxes so that at least for a part of its diesel consumption, India could become self-sufficient. The international crude oil price recently dropped to $50 a barrel and the whole economics of bio-fuels have gone up in smoke. As per a report in Economic Times, the cost of conversion of extracting jatropha oil and blending to produce bio-diesel is Rs5 (.09$) per litre. The current selling price of jatropha is Rs12, 000 ($265) per tonne. The cost of bio-diesel works to Rs43 ($.95) per litre as against the prevailing price of Rs35.75 ($.80) per litre of diesel. A price difference of Rs6 ($.15) per litre cannot compensate customer preference, if any. If more plantation of jatropha is undertaken, the competition should bring down the price of jatropha. The conversion cost will be also reduced if more bio-diesel manufacturers take up production and use efficient technology. By proper pricing of diesel vis-a-vis bio-diesel prices, bio-fuels will be accorded the importance in the economy from a long-term perspective. India will then be less dependent on foreign sources for its crude oil supplies.
Let diesel and bio-diesel thrive together and not at the cost of each other.

Let's Have More Watches To Make Up Lost Time

2007-01-15T23:19:00.000+09:00

Modern life demands that man should be strapped to a time-machine. Can you imagine managing your life without a watch? I remember the tension and inconveniences experienced on occasions when my watch had refused to move.Yet, only 25 out of every 1000 Indians have got the prized possession of watch whereas the global average is 250.
According to a report, India manufacturers about 12 million watches a year and the world annual production is 600 million watches. It is claimed that over 50% - 75% of watches sold in India is imported through illegal channels. Time was when having a Swiss-made watch was considered by many as a status symbol. Thanks to the brand building efforts by the domestic watch manufacturers, watches made in India meet a sizeable demand of the domestic market.
India is racing to become a super-economic-power and Indians need to imbibe the value of time. Whether having merely more watches will usher in the change, time alone will tell. Those who are at the top echelon of society should lead by setting examples of respecting the importance of time. Others will follow suit.
So, let us have more watches and a whale of a time!

Moribund Ministries Flushed With Funds

2007-01-09T07:05:00.000+09:00

Every year, come January, ministries go overdrive with their unfinished projects and unspent allocated funds. That is because the allocations are for the 12-month period April-March and first 9 months usually pass in warming up and frenetic activity is seen during the last quarter of the financial year (January-March). Reports usually appear about unspent funds in January and then the war cry is given.
One such report in Times of India 'Ministries sitting in funds, may loose unspent chunk' is an eye-opener. The worst ranking ministries are civil aviation 1%( Rs130 crores or $30 million), steel 16% ( Rs45 crores or $10 million), Non-conventional energy 18%( Rs597 crores or $130 million) and tourism 27%( Rs830 crores or $180 million) besides others who have not spent even 40% of allocated funds. So the usual excuse of funds shortage cannot be forked out for miserable progress of these ministries. It is the lethargy and inefficiency of the concerned ministries which is responsible for such a deplorable state of affairs despite a separate Expenditure ministry being there for monitoring expenditures.
I find the non-performance of the ministry of non-conventional energy, tourism and steel particularly very disappointing. India is heavily dependent upon imports for its oil needs and exploiting non-conventional energy can mitigate to some extent its energy crisis. Poor performance in such crucial areas is therefore alarming and unpardonable. So is the case with the steel ministry as growth of steel industry holds the key to removing infrastructural weakness. In case of tourism which has got such a huge potential, opportunities are being frittered away while other competing nations benefit out of our inaction.
Why cannot the concerned officials be held responsible for their callousness and inefficiency? The slogan should be 'Perform or perish' and anyone failing including ministers should be shown the door.
What do you say?

Indian Steel Industry Gasping For Real Autonomy

2007-01-04T21:42:00.000+09:00

For the steel industry, the New Year 2007 has brought a mixed bag of news. The good news - International Iron and steel Institute has informed that the global steel production during the year 2006 has been 1.21 billion tonnes registering a robust growth of 9.4% over the previous year. The other good news is that China continues to dominate as the largest steel manufacturer in the world with a production of 421.33 million tonnes and growth of 19.4%. Such growths globally and in individual nations including India is indicative of good demand for steel. It is expected that the market during the year 2007 will have a growth of 10% and thus give the industry some breather.
The bad news is for the Indian steel industry. Demonstrating a typical bureaucratic mindset, the government is reportedly contemplating to regulate steel prices for which a high level committee to monitor price movement has already started working. The industry which was languishing due to governmental controls were freed from the shackles only in 1991. There has been a surge for setting up new steel projects both by Indian investors and foreign giants like Posco and Arcelor-Mittal. This is in line with the National Steel Policy which has fixed a target of 110 million tonnes by 2019-20. But the present government's move to backtrack and reintroduce price control is going to affect the rapid growth of the steel industry which is the need of the hour for India's infrastructure development.
For reasons best known to the government, it has been flexing its muscles from time to time for imposing price controls. India and china both produced measly 2 million tonnes in 1950s. Today China produces the 421 million tonnes ten times the steel produced by India. It is the policy vacillations and lack of political will that have stifled India's steel industry. Remember in what pitiable state our civil aviation industry was before competition was permitted? Today airlines which offer minimum fare of rupees nine have turned corners in just 3 years.
Such are the dramatic changes that take place whenever governmental interference is withdrawn. But packing up existing authority and bringing new order is a far cry. If such stumbling blocks remain, India's steel production may not attain its target and it could slide down further from present level of a mere 10% of China's production. I just cannot accept such a pitiable scenario.

Small Cars Boom Spell Urban Doom

2006-12-31T21:49:00.000+09:00

India is basking in the sunshine for the robust growth of economy and the inevitable consumerism it has spurred by way of higher spending and improved lifestyles for Indians. Car - the ubiquitous status symbol delineating the rich from the poor is expectedly much in demand. The nation's image as the one afflicted with widespread poverty has taken a backseat after 1.3 million automobiles have been manufactured during the year 2006. In my previous posts 'Small Is Beautiful' followed by 'Small Cars Make Big News', I had hinted at small cars becoming cynosure of automobile manufacturers.
The year 2007 may see the launch of over 40 new models - many in the small car segment. The scenario is becoming all the more exciting with the international giants Honda, Toyota, GM and Fiat eyeing small car markets and planning huge investments in India. Their combined committed investment in the Indian automotive sector is reported to be a staggering Rs60,000 crores (exceeding $13 billion) over next 4 years. If this is not enough to celebrate, then the forecast made by Golden Sachs that India will have the largest population of automobiles by the year 2050 calls for uncorking Champagne definitely.
Just wait! We should also take into account what is lurking in the darkness. The Indian cities and towns are, as it is, notorious for endemic traffic jams caused by narrow roads with fast moving automobiles vying with slow moving handcarts and three-wheelers besides bicycles for right of way. The air and sound pollution far exceeds the prescribed safe limits. The road accidents in India are also the highest. So if more and more small cars are made, their highly competitive market may benefit the consumers who will also have the luxury to choose from a wide range of models at affordable prices. But it will spell doom for the millions living in the cities. The car density, likewise, will increase several folds from the measly four cars per 1000 people. The boom in the automotive sector will also generate jobs for a few thousand people. However, the flip side is too catastrophic to celebrate India's boom for small cars. Let the government ensure that environmental damage will not take place and more cars are not going to bring more problems in the lives of people.
Then I would also like take part in the celebrations. How about you?

Ah, Plant Trees And Get Tax Concessions!

2006-12-25T19:06:00.000+09:00

You may be thinking that it must be a joke. I, too, accepted the news appearing in Economic Times with a pinch of salt. It says the government or more precisely the ministry of Environment and Forests is contemplating to offer tax concessions as incentive for afforestation. Before you start imagining that your personal tax liability will be somewhat reduced if only you planted trees as per the scheme, let me reluctantly pour cold water on your hope clarifying that the whole scheme of things is for the industry.
Be that as it may, I see a ray of hope of such afforestation scheme bearing fruit as no other palliatives worked better than tax concessions for the industry. The appalling deforestation has been largely the result of rapid industrialisation. Industries polluting air, water and land have been held responsible for the impending catastrophe arising out of global warming. Though belatedly, nations have agreed to abide by Kyoto protocol which offers incentives by way of carbon credits for reducing mainly carbon dioxide gas emissions, many are yet to take initiatives as they find that the benefits accrue only on long term even as spending on emission control measures has to be made initially.
I think this new scheme of giving tax concessions when implemented will get good response because of the indication given by the officials that the compensation could be in the form of land tax concession or providing relief from land ceiling. The ministry, as reported by Economic Times, is proceeding on the premise that the country's forest and tree will cover one third of the geophysical area by 2012.
The irony in the scheme has not been lost. Since industry has been the culprit that has played havoc with nature, it is now being made to undo the colossal damage to the environment. It is a classic example of the saying 'sow the wind and reap the whirlwind'.
Is it not?

Rivalry Between India And China Exists Even In Diamond Industry

2006-12-20T09:57:00.000+09:00

Everyday, I come across either in print or electronic media some news or the other about China's supremacy over India. The whole world is watching almost in total disbelief as both China and India are racing like Phoenix - the mythical bird in the Arabian desert rising again from the ashes to become second and third biggest economy. In every public platform and discussions, it is now routine to highlight the widening gap in various fields of industry and business of the two nations. I think we are harping on it wrongly as India should try to remove its own deficiencies to improve rather than lamenting all the time about its poor performance in comparison with China.
The latest news about rivalry between India and China came from a survey report of the global consulting firm KPMG which was released by Gems and Jewellery Export Promotion Council. It has made a disappointing projection for India that diamond processing industry in which it had a lion's share would be reduced from its present 57% to 49% by 2015 - a drop of 8% in value terms. It goes on to say that China will emerge as a strong player with a share of 21.3%. I thought both India and China are poor nations and since jewellery is used by only the rich and the very rich, market shares of these two nations would be insignificant. The figures tell a different story. While USA remained the world's biggest market for jewellery with 31% share in 2005, India and China registered their shares at 8.3% and 8.9% respectively. At least in this particular case of market for jewellery, India and China are running neck and neck.
Let us not forget that China got started with liberalisation and globalisation more than 15 years before India finally made up its mind. The Communist regime in China ensured easy implementation of plans and policies whereas in India its political parties with diverse goals cobble up wafer-thin majorities to rule democratically. So India predictably experiences hiccups off and on in adopting globalisation.
Diamond processing industry provides employment and earns foreign exchange. India must do everything to retain its predominant position.

No Chorus Of Approval For Corus Acquisition

2006-12-13T22:29:00.000+09:00

The climax of the drama for acquisition of Corus is about to be enacted shortly and ironically there appears to be no chorus of approval. I had concluded my post 'The Eternal Triangle - Corus-Tata-CSN' with "What Tatas will do to win the hands of Corus? I will be happy to see Tatas a winner. Let not the acquisition drama end like the film Devdas where the hero ruins himself instead of trying to save Paro". The vey same premonition has started haunting me.
The Brazilian giant CSN initially had made an offer of 475 pence per share against Tata's offer of 455 pence per share just only to provoke Tatas to revise their offer upwards to 500 pence which was stymied within hours by its 15% hike to 515 pence. In absolute terms, Tata's offer stands at $9.1 billion as against $9.6 billion of CSN. Clearly, the eternal triangle is inviting economical trouble.
Some analysts are of the view that Tata's offer is expensive whereas others feel that this is a golden opportunity for them to emerge as the world's fifth largest steel manufacturer. A report extracted from Economic Times puts the different perspectives succinctly. "ET spoke to 11 top investment bankers, of which five said the bid was now expensive and the Tatas could do well to consolidate their presence in India, one of the largest steel markets in the world, rather than paying dearly for a foreign steel mill. But another half among the deal-makers who were polled, believes that though painful in the short term, it is the larger picture that is still attractive - of a Tata Steel that is the fifth largest in the world, of a company that is able to influence in raw material negotiations and finally, of a company that did not let go of an opportunity to buy a world class firm."
I am sure Tata has the right corporate wisdom devoid of any personal ego and backed by experts' opinion to continue the bidding war avoiding quicksand that may lie ahead. We will have to wait till the curtain comes down.

Global Warming Raises Finger At The Cattle

2006-12-05T15:52:00.000+09:00

The poor cow - now is at the receiving end. For ages, man has enjoyed pouring scorn on donkey so much so that the English language makes liberal use of such expressions like 'He is an absolute donkey' or 'The bridge won't be ready for donkey's years.But I was startled to read about a UN report saying the dumb cattle is responsible for global warming. I always thought that among animals, cow serves the man best. Its milk is nutritious for the child and the old alike. Its meat is relished by those who include such animal protein in their food. Its hide is an excellent raw material for leather shoes, bags and belts. Even its excrement has lot of uses - as a manure and fuel of the poor. The blow given by a report of otherwise independent and non-partisan United Nations is too devastating.
The Times of India reported "The increasing world population,a new UN report warns, would lead to further increase in the number of livestock as demand for meat and milk increases and that would mean emission of more greenhouse gases. Not only that. Cattle are also a major contributor to land degradation and pollution of water, the report says. The livestock business, the report says, is among the most damaging sectors to the earth's increasingly scarce water resources, contributing among other things to water pollution from animal waste s, antibiotics and hormones, chemicals from tanneries, fertilisers, and the pesticides used to spray feed crops.
Global warming is a stark reality which is threatening to cause unimaginable damage and loss to the entire population if drastic measures are not taken. That is why nations are jointly trying to fight the menace by Kyoto protocol and carbon emission reduction mechanisms. If cattle indeed are the culprit, we cannot think of a similar carbon trading to reduce their contribution to global warming.
One of the possible ways to reduce their greenhouse emission is to go for their zero-growth population. The good news is that non-vegetarians are gradually turning vegetarians all over the world. Then the meat demand may not rise proportionately with the increase of human population. Substitutes for dung used as manure and fuels may be eventually found. But I cannot think of a world where milk would become a rare commodity. Even as the we are reminded of the apocalyptic end caused by global warming, the very thought of living in a world of perpetual milk famine is equally distressful for me.

High Growth Of Economy Of India & China Causing Sleepless Nights?

2006-11-29T22:42:00.000+09:00

I always read about rapid progress of India's economy with avid interest but harboured some doubts at the same time. It excited me to imagine India being ranked the third largest economy in the world by the year 2010. Those forecasts have been made, after all, based on facts and figures; the international watchdogs and analysts corroborate the same even as I fail to get any glimpse as though the same might be taking place obscurely.
The annual deliberations between the Confederation of British Industry and the government of United Kindom, interestingly, have removed remaining doubts from my mind as I learnt who was saying what. The Chancellor of Exchequer, Gordon Brown, has warned "Over the next fifteen years, up to half the world's future growth will come from India and China. By 2020, the G-7 share of growth will fall just to one-third". I quote from The Times of India what George Osborne, the right-hand man of David Cameron, the leader of Tories had told the Confederation of British Industry - "How are we going to compete against countries with low wages and high ambitions? There are quite a lot of lazy assumptions out there that we need to confront. There's the assumption that we'll do the clever stuff and we'll move up the value chain, and leave the Chinese and Indians to do cheap things. Let me tell you no one has told them that." Paradoxically, U.K. and other developed countries are now getting scared of the economic boom taking place in India and China. As reported in Economic Times, the US treasure secretary, Henry Paulson, wailed "We cannot tell the developing countries that we benefited from free markets, but we will not allow them to do the same. It's morally wrong - we are condemning them to being a perpetual underclass."
The cat is now out of the bag. The globalisation mantra chanted for years to the developing countries like India and China for allowing MNCs and FDIs (to exploit the natural resources as well as to escape from the rigid claws of environmental controls in their own countries) has begun to backfire. The disciples i.e. India and China having mastered the mantra are now ready to take on their gurus.
I think India has to wait patiently for poetic justice to be delivered. What do you say?

Malls Threaten To Edge Out Small Retail Outlets

2006-11-27T19:06:00.000+09:00

Swanky malls with their eye-catching interiors, cool comfort and convenience of shopping, huge spaces to move around freely and car parking as well as refreshment facilities are drawing huge crowds in India. However, the public accustomed to a entirely different style of shopping and small retail outlets known as 'kiryana stores' stand no comparison to the land, labour and investment made in malls. There are reportedly 12 million such small retail outlets for a population of 1.07 billion and buyers numbering 405 millions in India. The rich number 6 million having a purchasing power of $28 billion and the total purchasing power is estimated to be $230 billion. This gives India a dubious distinction of being known as 'nation of shopkeepers'.
Be that as it may, the retail is one of the fastest growing sectors in the economy. The world's biggies are waiting to spread their wings in India introducing their modern and western management style along with a lot of dazzle. The supremo Wal-mart - a 260 billion retailer has just inked a JV with India's leading Bharti group. The reason for their enthusiasm to have presence in India is understandable as India's GDP will cross a staggering $740 billion by end of this year and is already world's 4th largest economy likely to become the third largest after USA and China by 2010.
So the media hype and the palpable soaring interest among the rich, the urban population particularly the youths who are vulnerable to ape western lifestyles with plenty of cash at their disposal are becoming somewhat disgusting. I am not quite enamoured at the idea of such malls barging into our lives. That is because, I know, it would herald the death of thousands and thousands of small retail outlets. Those are mostly family-oriented business joints which employ least capital, land and labour. They are small in size but their services extend far beyond mere shopping. From giving credits to customers and personalised attention, these outlets serve as a place for social mixing. The shopkeepers know their customers and their families by name and at times discuss personal problems confronting them. Among their other services, home delivery is quite fascinating. In Western countries where the culture is different and almost every person possesses cars - malls are very convenient places for shopping. But why we have to go malls located far away for our daily needs when we can get them round the corner. Let us not forget that shopping is a part of our daily life unlike in the West where it is done weekly or fortnightly. Bargaining is a part of shopping experience in these market places. Moreover, when millions of job-seekers are looking for jobs, why should the millions already working in small retail outlets loose their jobs only for malls to flourish which will require much less hands because of mechanisation and automation. Malls may be very cozy place but you loose your identity and power there.
So all that glitters is not always gold. I cannot think of a life without those small retail outlets - Wal-marts or no Wal-marts!

The Eternal Triangle Of Corus - Tatas - CSN

2006-11-22T19:44:00.000+09:00

When Tatas successfully bid for the acquisition of the Anlo-Dutch behemoth Corus, it was an euphoric moment for me as the Indian corporate giant appeared to be emerging as an Indian MNC to take on the world champions of industry. I also found it somewhat ironical that because of the globalisation, Tatas were set to become for U.K. in 21st century what was East India Company when it had entered India in 18th century. The acquisition was very keenly watched as it was slated to be the largest Indian acquisition of any foreign company worth $8.1 billion that could push the rank of the new combine Tata-Corus to become the fifth largest steel manufacturer in the world.
So far, everything seemed to proceed on the expected lines and we were all thrilled to see the beaming smiles of the top Tata officials in TV and print media. The Corus board had also approved the offer of 455 pence a share made by Tatas though a third party could still throw a spanner in the works till the EGM of shareholders put the final seal on it. The acquisition drama would have lost its excitement had not CSN - a Brazilian steel manufacturer announced its plan to bid 475 pence a share raising the buyout price to $8.3 billion. The new suitor CSN's entry can be likened to the usual Bollywood stuff where the hero who is deeply in love with the heroine suddenly faces the risk of loosing her as someone villainously tries to snatch her.
Getting down to brass tacks, CSN has not only made a higher offer, albeit informally so far, it has the advantage of owning iron ore mines and have been exporting 30 million tonnes annually which is likely to go up to 50 million tonnes by 2010. Owning iron ore mines by steel manufacturers is winning half the battle in competition. It is because of such advantages that Tatas are credited with making the cheapest steel in the world. In case of Tata-Corus combine, Tatas would be able to supply slabs only to Corus who would have to alter their existing manufacturing process. CSN's steel manufacturing capacity is higher than Tata's and had made 5.8 million tonnes during the year 2005.
The bidding war has just started and the share price of Corus has already crossed 500 pence a share. In the changed situation, Tatas will have to revise their offer to clinch the deal. I am sure Tatas will not throw in the towel so early. Though Tatas are viewed as a role model in the corporate world, they seem to have a weakness. When it comes to showing its nerves of steel in forays in new locations, it has disappointed its admirers and its image has taken a beating in the past as in Gopalpur and Bangladesh.
What Tatas will do to win the hands of Corus? I will be happy to see Tatas a winner. Let not the acquisition drama end like the film Devdas where the hero ruins himself instead of trying to save Paro.

Untangling Issues From China

2006-11-15T22:22:00.000+09:00

When I wrote my last post titled 'China - The Unchallenged Victor', little did I know that my next post would also be on China and that too, so soon. That is because I am not a sinologist. But going through the newspapers in the morning today, I found serious contradictions in a few news items which forced my thoughts to culminate in this post.
Politicians are well-known for backtracking on their statements they make once any controversy arises. They usually take refuge under a refrain 'I have been misquoted'. But what surprised me was the latest example of contradictions being made in the same breath by the ebullient Steel Minister, Ram Vilas Paswan. He said "The government should frame proper policies on the entry of Chinese companies in India". Interestingly, the above plea was made as Indian steel companies are apparently apprehensive that allowing Chinese companies with their ability to make cheap steel may threaten their existence. Instead of India trying to be competitive cost and quality wise, the honourable Minister is trying to stop steel companies from China entering India and that too when we are swearing by globalisation mantra. The contradiction did not end there as he went on to say "SAIL should look for acquisitions, like Tata Group's acquisition of Corus".
The startling comments on another issue coming from the other extreme of the political spectrum are quoted from a news item titled 'CPM's fixation with China continues' appearing in Economic Times. "These are historical issues. These are disputes. That's why issues are being discussed", Mr Yechury told reporters. He even suggested a resolution to the dispute: don't transfer populated areas on either side. In other words, Mr Yechury does not think that the Indian government is correct when it says that the whole of Arunachal Pradesh belongs to India.
So we have a Steel Minister and Indian steel industry scared of competition from China and yet are interested in spreading wings as part of globalisation opportunities. Then we have a national party CPM - part of the present UPA government who are flexing their muscles after improving their number of seats in Lok Sabha that does not support the Indian government's stand that the whole of Arunachal Pradesh is part of India.
I am really flabbergasted at the political fare spread before us. What should I choose and what should I reject?

China - The Unchallenged Victor

2006-11-13T22:49:00.000+09:00

Today, China is the cynosure of the whole world being the fastest growing economy. The enviable position was attained by attracting $72.4 billion foreign direct investment (FDI) during 2005 which is one fifth of all FDIs bagged by developing economies. It has also assiduously built a foreign exchange reserve of $1 trillion. It produces and consumes one third of the world steel so much so that the entire world steel industry seems virtually to be at its beck and call. There are plenty of other examples to showcase its invincible position for China to say deservedly to the world - "I am the monarch of all I survey".
India, too, has been hogging limelight for its spectacular GDP growth rate in excess of 8% for the last three years. Though next only to China in matters of recent rapid economic progress, India remains way behind. Being part of the same race, comparisons between the achievements of two nations are often made. The two most populous nations of the world are vast and part of Asia. Perhaps the commonality ends there. The social, political, cultural and linguistic differences between them are too significant.
Yet, I find a common tendency among analysts and some determined bloggers to compare and contrast the two on any issue. We must remember that India is the biggest democracy in the world and embraced liberalisation in 1991 after much dithering. Even today, the Left parties continue to throw a spanner at times in the government's policies whenever they consider it politically expedient to do so. It is a different matter that their counter-parts in China are giving smooth passage to inviting FDIs without any let or hindrance. And whereas any development work can be delayed or stalled in India by a small group of disgruntled citizens or vested interest, there is virtually one-party rule in China.
With both the two big nations trying to attain supremacy, there can never be total cooperation and trust among them though a lot is being expected out of the ensuing visit of the Chinese President to India. While bilateral trade is expected to cross $50 billion by 2010, there are some disturbing news that China will join hands with Pakistan to claim Siachen - a strategic military location for India. There was a war over border disputes in 1962 just before "Hindi-Chini bhai bhai" slogan became immensely popular with the Indians.
The future path, therefore, ought to be traversed with caution exercising wisdom gained out of past mistakes.The bureaucracy and the political mindset seem transfixed at China. It must be realised that India started the reforms process 15 years after China had started besides having constraints in framing and implementing policies unlike China. I read an editorial in Times of India that India is trying to put a man on the moon simply because China is also gearing for the same feat. Stretching competition to such extents can be self-defeating.
Let us work determinedly even if our pace is slow reminding ourselves of the saying "Slow and steady wins the race". More importantly, India must retain its own identity and refrain from playing second fiddle to China.

India's Second Green Revolution Desperately Needs Strong Support

2006-11-10T18:15:00.000+09:00

"India has to now embark upon the second green revolution" - those words came not from the Prime Minister not the Agricultural Minister not even any politician-turned President but APJ Abdul Kalam while inaugurating the Global Forum on Agricultural Research (GFAR) triennial conference. The technocrat and the visionary that he is exhorted to put receding agricultural land, depleting water resources as well as reducing number of farmers to fight impending food scarcity by launching a second green revolution. By 2020, with population growth showing no signs of reversing the trend, 340 million tonnes of food grain will need to be produced in India to remain self-reliant.
I remember the years of 1960s when India had to accept PL-480 aid from USA to tide over food crisis. The spectre of a similar crisis looms large warned the President. It is a sad commentary that while India is frenetically trying to attain the status of a super economic power, sufficient measures are not being taken to avert a repetition of the fiasco of the 1960s. The Agricultural Minister is unperturbed by rising farmers' suicides and is in the news for wrong reasons of being pushed by Rick Ponting from the presentation dais for Champions' Trophy at Mumbai. He is otherwise busy drawing up strategies to enhance his political strength by wooing Congress rebels and forging alliance with break-away parties.
Despite such political apathy to serious problems facing the nation, I could see a ray of hope in the expert solution offered by the President. This second green revolution will be materially different from the first revolution in as much as waste use, plant genomic, post harvest technologies, stress-tolerant crop variant, IT application to enrich database would be the main thrust areas. I also found his advice to enlarge work of farmers from grain production to food processing and marketing most inspiring.
The biggest thrust area for ushering in the second green revolution, however, is undoubtedly the political resolution. A scarce commodity, is it not?

Carbon Credits As Sops Sap Poor Nations

2006-11-05T14:17:00.000+09:00

The good earth cannot take any more. With reckless deforestation and wanton industrialisation necessitating rapid transportation of men and materials by automobiles causing carbon dioxide emissions ceaselessly, the die has been cast. Global warming is a stark reality now which cannot be wished away any longer. The changing and unpredictable weather all over the world has been serving as a constant reminder of nature's wrath against human excesses.
Now the death-knell has been sounded by the former Chief economist of World Bank, Mr Nicolas Stern, as appeared in Econmic Times, who has warned that 'the impact of global warming on world economy can be as apocalyptic as that of the Great Depression of the 1930s'. He minced no words to depict the horrifying scenario by saying "in the absence of significant cut in greenhouse gas emissions (GHG), the world economy will shrink by 20% in the decades to come. The rising temperature leading to floods may also displace about 200 million people globally."
The irony has not been lost in the report by raising his finger against industrialised countries as the worst offenders of carbon dioxide emissions. Contrary to the popular belief due to misinformation campaign, India and China have been absolved of customary charges of causing global warming. There is already a system of rewarding and punishing parties depending upon their share of reducing or increasing carbon dioxide emissions. I think carbon trading as prevalent now is not a fool-proof control to reduce carbon dioxide emissions. It is just a way of giving sops to the nations which are able to earn carbon credits by reducing GHG emissions so that the cash-rich nations can continue to do the damage by paying penalty in being the credits.
Already as per a survey 'Voice of the People,2006'conducted by Gallup International and TNS, FDIs are perceived by the majority to help the rich only rather than the masses. In the name of economic development, new mega projects are coming up mostly in developing countries. The damage to the environment and the misery of millions who are routinely displaced as a fallout of these projects will more than offset the so- called benefits of employment generation and raising standards of living. GHG emissions, unfortunately, do not affect selectively but pervade everywhere. So the rich as well as the poor will suffer unimaginable losses in the long-term and we will be leaving the planet in much less habitable condition for the future generations.
What a ghastly scenario! What do you say?

Double Standards For Acquisition And FDI

2006-11-01T21:18:00.000+09:00

After globalisation has broken all national and regional barriers, the world, today, has been reduced to a global village. Acquisitions and FDI flows from one part of the globe to the other are now so routine that nobody raises eyebrows even when a developing economy springs a surprise of investing in a developed economy or goes for acquisitions.
Tatas has made recently mega acquisition of Corus in Europe for $8.3 billion besides other Indian foreign acquisitions of nearly $10 billion made in last 5 years. Of course starting from scratch, this is considered sizable even though it is just 1 % of global cross-border deals.
I found a report published in Times of India on a survey titled 'Voice of the People,2006' conducted by Gallup International and TNS intriguing as some findings reveal how people from different parts of the world view differently the whole business of acquisitions and FDIs. I do not know why 44% of the respondents in USA responded negatively to FDI flows to their country when it is the largest investor all over the world. Similarly, the respondents from developing economies - South Africa (71%), Nigeria (76%), Vietnam (75%) surprisingly supported the globalisation.
When MNCs were trying to get a foothold in India in 1970s, Left and socialist parties had given a battle cry against them. Now that Indian MNCs are spreading wings abroad, the voice of opposition seems to have died down. Ironically, it is the turn of the Indian MNCs of defending their acquisitions abroad with promises that there would not be any job cuts after the takeovers.I think no nation can get away with double standards for acquisitions and FDIs. If it goes for acquisitions abroad and invests in other foreign countries, it is only fair that it allows others to do likewise in its homeland.
You cannot have the cake and eat it too!

Bio-fuels Fuel Imagination Of The Entrepreneurs Of Tomorrow

2006-10-28T09:53:00.000+09:00

When I started blogging about 4 months back, I initially started writing on topics such as human behaviour, nature and the role destiny plays in life. As I entered the blogosphere and got a little familiar with the alien environment, my mind yearned to focus on news relating to India’s rapid progress in the economic field and industry. Topics in which I have lasting interest include the new technologies for cleaner environment reducing carbon emission. In addition, topics of growing importance like steel, infrastructure development, FDI flows and even floriculture have captivated my attention.
The report on the result of the first Economic Times’ Wharton Business Plan competition published in Economic Times had especially an encouraging effect on me. The report has mentioned how difficult it was to choose the best entries from 600 budding entrepreneurs for business ideas. Some of the winning entries show the maturity of the young minds who are going to be custodian of the country in the future. It is reassuring for me to note that I am not much out of steps with the modern thinking of the young minds.
The winning team made the following comments on their bio-diesel business plan – “In the age when ethanol is grabbing attention, bio-diesel is slowly picking up pace in foreign markets such as the US, along with India. Although bio-diesel production is at a very nascent stage in the country, the sheer potential of the area compelled us to look into such a business opportunity.” I had commented as follows in my earlier post titled “India’s short menu of alternative fuels”.
“The most promising alternative fuel is bio-diesel using jatropha, karanj and similar species. The hybrid fuels and flexi-fuels can be run with varying amount of blended ethanol. Locally, the plant cultivation can be promoted provided incentives are made attractive. The auto industry, the government and the political class as a whole have to put their heads together to make this happen.”
Hopefully the budding entrepreneurs will translate their plans into reality when they will be at the helm of affairs.

The Newly-rechristened Ministry Of New And Renewable Energy

2006-10-23T19:33:00.000+09:00

'Rose smells sweet - call it by any name' is the famous quote. But some subscribe to the belief that whether the intrinsic worth of anything remained strong or not, a mere change of name does enhance it. The ministry of non-conventional energy sources of Government of India has been given a new name - Ministry of new and renewable energy. Though the ministry has the responsibility to facilitate the development of non-conventional energy sources in view of India's own oil supply being far less than the demand and the other sources like coal getting depleted fast, it is one of the ministries lowest in the ladder of political or financial power. The petroleum and natural gas ministry officials supported the name change and said "The new name gives a more positive outlook compared to the earlier name."
Let us all hope so. We are very fond of changing names without any rhyme or reason. The three metros earlier known by their names Bombay, Madras and Calcutta have become Mumbai, Chennai and Kolkata. I have not seen any perceptible change in the quality of life in these metros except that a lot of stationery, signboards, visiting cards and records had to be changed involving expenditures of several hundred crores.As far as the change of name of the ministry from the ministry of non-conventional energy sources to the new one, the industry has been crying hoarse that it gave out a negative message.
I think the name indeed is not striking. But it is a sad commentary of how we function if we could not make much headway in popularising or researching new and renewable energy sources merely because the name was uninspiring. It is a classic example of the saying "A bad workman quarrels with his tools". I hope the new name of the ministry will inspire and revitalise all so that our dependence on conventional source of energy gets reduced.
It should not turn out to be a case of 'an old wine in a new bottle'!

India And Pakistan - The New Tigers

2006-10-20T19:04:00.000+09:00

It is not my simile but used by Asian Development Bank. Its South Asia Economic Report has said that removal of bottlenecks, improved infrastructure and better quality of regulation help South Asian economies, already growing at high rates led by India and Pakistan, emerge as the "new tigers". While developments in India are clearly the predominant factor in the improved economic performance in South Asia, most other countries in the region have been on a similar trend, although their improvements are more modest.
India, buoyed up by a consistent 8% GDP growth for the last 3 years, is gearing itself for further acceleration and achieve 10% GDP over the Eleventh Five Year Plan (2007-2012). The Prime Minister Dr Manmohan Singh has admired the role of the industry in the global arena."They are investing on an unprecedented scale and expanding their capabilities to boldly take on global competition. Many of them are actually taking over firms in other countries, setting up factories and becoming global companies," Singh said.
As I was about to publish this post came the news that the mega deal between Tata Steel and Corus (formerly British Steel) has been clinched. My last post coincidentally was relating to the same deal. It is the biggest acquisition ever made by any Indian company including Tatas in foreign soil. "It is a defining moment" was the reaction of Ratan Tata after the deal was announced. I think the history has taken a full circle. Like 'East India Company' casting its anchor near Kolkata three centuries back and spreading wings all over the country, Tata Steel is the new incarnation of ' East India Company' of yesteryear's. Of course, the mission is different this time.
How I wish India and the neighbours steeped in poverty emerge soon as economic powers globally by working harder. If only terrorism and eyeball to eyeball confrontation over border disputes could be reined in, these new tigers' roar could be heard all over the world. Unfortunately, they cannot even mew out of fear and retaliation by the opponents.

Tata Steel Steals The Show By Proposing To Corus

2006-10-18T18:34:00.000+09:00

I told you in my last post titled 'Acquisition - The Stepping-Stone To The Path Of Success' how acquisitions are becoming commonplace in business. I also mentioned about this particular deal - Tata Steel taking over Corus likely to materialise shortly. Now it is very much official. The ball has been set rolling by Tata Steel - the first steel company and the biggest in the private sector in India; they have made an offer of 455 pence (Rs 385 approximately) for each share of Corus and if it goes through, it will be the third biggest acquisition in the steel industry. Of course, the mother of all acquisitions remains Mittal-Arcelor's at an investment of $43.63 billion followed by Kawasaki's takeover of KK Corp at $11.89 billion.
After the takeover, Tata Steel-Corus combine will have steel production capacity of 23 million tonnes. Presently, Corus is ranked 8th and Tata Steel 55th in global steel capacity. The deal is most likely to go through even as Corus has been courted by other suitors. Tata Steel has the advantage of producing the cheapest steel in the world by having captive mines and its cost is not subject to the vagaries of price fluctuations of raw materials. Corus has a steady market in Europe for its high-valued products having applications in construction, automobile and aerospace industry.
I think the acquisition will send out a message loudly to the world that Indian companies are having the right stuff to become multi-national companies (MNCs). But to call spade a spade, the steel in the raw form will be made in India with all the attendant problems of polluting the environment while the finishing operations will be done in Europe; it will put Indian MNCs at the bottom of the list.
In any case, you cannot have the cake and eat it too!

Chasing Carbon Credits - The New Passion Of India Inc.

2006-10-17T16:03:00.001+09:00

For long, the industries have been grappling with the menace of air pollution caused by carbon dioxide emissions and the public outcry against the resulting global warming. The reward and punishment system to control the situation by introduction of trading in 'carbon credits' seems to be catching up. In the earlier post titled - 'India's Creditable Feat Of Earning Carbon Credits', I had touched upon its growing acceptance in corporate world and India's initial success in earning carbon credits. India is already the third largest to amass carbon credits reportedly equivalent to $1 billion - next only to China and Brazil.
The concept of modifying industry processes and waste control efficiently while earning carbon credits to be reflected in the company balance sheet has become the latest passion of Indian companies. Not surprisingly, one of the navratna public sector undertakings ONGC, according to a report in Economic Times, is about to launch 14 projects for carbon emission reduction and earn carbon credits as well. SAIL is also drawing up such novel projects. I think, the PSUs are best equipped to take the lead as these measures, on the face of it, do not appear to give any handsome return in the short run. Again, these companies have the financial strengths on the one hand, and suffer from the bureaucratic red tape as well as orthodoxy regarding investments on the other. If they can get over these hiccups, I think the companies will be killing two birds in one shot.
Changing times demand changing names. I remember, PSUs at the height of controlled economy had a nondescript post of a Public Relations Officer (PRO) whose main job was to issue passes for the visitors. Now ONGC has a senior position with an exotic designation in the corporate world - 'GM, alternate energy & carbon credits'. This alone speaks about the importance the company is attaching to carbon emission reduction (CER). I wish other PSUs follow suit and create departments for alternative energy & carbon credits or something similar with the sole responsibility of earning carbon credits.

Are SEZs Special Exploitation Zones?

2006-10-16T14:50:00.000+09:00

How can any economic development work be termed as anti-people? There is a big conflict of interests which has drawn battle lines between the opposing groups. It is axiomatic that more economic development will result in higher standard of living and one may readily agree that every nation ought to pursue such a goal. But such developments impose a social cost. If the benefits are going to be shared only by a minority and the majority is left high and dry, then they may be paradoxically called anti-people.
The government and policymakers are euphoric about Special Economic Zones (SEZs) which are being viewed as panacea for accelerated development. Simultaneously, there has been a growing opposition to setting up SEZs as it is feared that it would cause large human migration and environmental damage. Ms Medha Patkar - the noted social activist, who brought the mighty authorities to their knees by her fast unto death campaign over her strong opposition to the building of Narmada dam, has aired her scathing criticism against SEZ policy.Ms Patkar, while addressing the inaugural session of a two day national convention on “Globalization and Fast Industrialization versus Alternative Development Model” said that the current process of industrialization amounted to massacre of a minority by a majority that thrived with the use of force to suppress poor. She termed these SEZs as Special Exploitation Zones and warned that the three most backward states of Orissa, Jharkhand and Chattishgarh are going be exploited to the hilt by the MNCs.
It is generally accepted that with growing population, more jobs need to be created to feed more mouths. But in trying to do so, the interest of the masses should be weighed against the profits of individual companies and the limited benefit by way of employment generation. Then who should have the final say? In a democratic setup, the people's voices should always prevail. But when there are many interest groups - some illiterate and unable to comprehend the full implications, the vested interests can tilt the balance between development benefits and social costs.
Then should industrialisation be stopped?

Acquisition - The Stepping-Stone To The Path Of Success

2006-10-13T19:50:00.000+09:00

Today, acquisition has become a buzz-word of business. Reports on acquisitions are appearing in print, TV media and Internet endlessly. Big sharks are on the prowl for big fishes; big fishes are chasing small fishes and small fishes are gobbling up smaller fishes. So acquisitions have become as common as wild animals hunting their preys.Because of acquisitions, companies generate synergies especially in pooling resources to face competition. The individual identities and images get blurred after acquisitions.
For manufacturing companies, the raw material suppliers tend to deal with the new entities differently as their combined demands go up. Their combined market share, too, becomes higher and consequently their say in price control assumes more importance. In most cases, the real beneficiaries are the owners and shareholders of the companies after acquisitions.This was exactly the bait used by the steel tycoon L.N.Mittal for the biggest mega-acquisition in the history in taking over Arcelor which raised lot of storm in the corporate world as well as several governments before the new company Mittal-Arcelor emerged as the biggest steel company in the world.
Taking the cue from the saying 'Join them if you cannot beat them', Nippon Steel and Posco are examining various modalities for flexing their combined strength. Tatas have already guarded themselves against any hostile takeover by the giants by enhancing their own shareholdings. Interestingly, Tatas are reportedly working for a $10 billion takeover of Corus - one of the largest steel manufacturers in Europe. Though the company's employees and a section of the public are against such a takeover, it is the will of the shareholders that will ultimately decide the fate as in the case of Mittal-Arcelor.When so many acquisitions and mergers are taking place all over the world, who really benefit - the consumers and general public or only the shareholders of the companies?

Colas Leave Women High And Dry

2006-10-12T18:51:00.000+09:00

The cola companies seem to be getting out of the frying pan into the fire. Already alarm bells have been sounded that the colas are responsible for the high incidence of obesity among children. Now it is for women to sit up and take notice. According to an article in American Journal of Clinical Nutrition, a research study claims that women who drink colas daily develop low bone mass density (BMD) than those taking one serving a month. Those with a lower BMD run higher risk of bone fracture. So if one does not want to make any bones about bone fracture, she should keep a safe distance from colas.
Interestingly, the colas seem to have a gender bias; men do not have low BMD problems out of regular cola consumption. In case of women, the hips get affected more and with higher consumption, the thinning gets worse. The research, the findings of which have been reported by Reuters, has not established conclusively that the same can be said about young girls. Though they also suffer from low BMD, it is not known yet whether it is caused by less intake of milk or excessive consumption of colas.
The cola phobia concerns children and women so far. Until further findings are made, men do not have anything to bother. In India, the urban middle class women and young school and college-going girls generally are cola lovers. Hopefully, the news will enhance awareness among them about such risks in colas consumed by them.

Clinical Research Outsourcing Spreading Wings (CRO)

2006-10-11T18:24:00.000+09:00

India has already set several milestones in the fields for outsourcing e.g. Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO) and Engineering Process Outsourcing (EPO). The pharmaceutical companies have started outsourcing development, manufacturing and marketing processes so as to concentrate on their core competence and reduce cost of operation. Contrary to popular perception, cost reduction is not the only reason for their outsourcing. According to Wikipedia, some of the less known reasons for outsourcing are:
1. Less knowledge of regulatory affairs in a particular country of interest
2. Large requirements of patient populations
3. Regionalised diseases The pharmaceutical and biotechnology companies reportedly spent $57 billion on R&D in 2005 out of which an estimated $14 billion was used for outsourcing clinical research. India may be able to bag contracts worth $20 billion by 2010.
The CRO business must grow and evolve taking into consideration all ethical issues. As India has a high-level of poverty, its public health care leaves much to be desired. If adequate safeguards are not built in, there is a risk of patients being made unwitting guinea-pigs in clinical research that may finally end up as conspiratorial research.

$320 Billions Need To Be Infused For India's Infrastructure

2006-10-09T14:35:00.000+09:00

India has been hogging headlines sustaining second biggest growth among world economies and aiming to become a super economic power soon. The architect of the liberalisation and reforms in India is no other than Dr Manmohan Singh - the Prime Minister himself. Of course, when he set the ball rolling 15 years back, he was neither the PM nor was then the victim of arm-twisting by Left policies. If anyone has been watching his faltering moves ever since he became the PM about two and half years back, he would not believe that it was he had taken such bold steps in his earlier avatar. He has become a prisoner of his own political expediency and promised reforms in labour, insurance, pension fund and privatisation of public sector units appear to be distant dreams.
While addressing a Conference on Infrastructure, he was pleasantly at his best as a reformist leaving his garb as a politician. He was critical of power reforms and advised private competition in generation and distribution. He rightly sounded the alarm bell that the much-cherished growth rate of 10% will remain elusive unless investments of $320 billions are pumped in next five years for improved roads, ports, airports, railways, power supply and other critical infrastructure. He said "We will need to run hard just to stay where we are. Maintaining a growth rate of 8% would need continual improvement in our policy regime."
The count-down for the general election to be held in 2009 perhaps prompted him to change tack. He knows his government has to work hard to deliver tangible results. The nation can heave a sigh of relief now that the economist and reformist in Dr Singh will prevail and control the economic policies of the nation. Sloth and ambivalence will hopefully be replaced by action plans and frenetic activities of the government at least till 2009.

India's Foray Into Engineering Business Outsourcing

2006-10-06T20:18:00.000+09:00

For going up a ladder, always one has to take the first step. India's success story in IT industry began 25 years back almost in this way. At that time, India lacked skill and brand name for which she had to start with low-value business. Slowly getting a foothold, the It sector established its credibility and carved out a niche in international outsourcing of software jobs. Then came Business Process Outsourcing (BPO). From call centres to managing clients' data bases, it was a struggle for getting shares of high-value business. Soon engineering and management graduates were drawn to Knowledge Process Outsourcing (KPO).
As IT industry conquered more sophisticated outsourcing jobs, a new opportunity has opened up for jobs demanding even higher skills in the field of manufacturing lines of telecom, aerospace, automotive and construction sectors. This specialised new business has been given a separate identity - Engineering Process Outsourcing (EPO) which entails a high-value, high-margin and system engineering market. The international market size is believed to be $10-$15 billion and is expected to grow to $150-$200 billion by 2020. There are already several competitors - Israel, Canada, China and Mexico to name a few.India has a strong technical base. But it needs to be strengthened on the lines of ESO requirements which demand a good knowledge of engineering fundamentals in manufacturing. To achieve this, the software watchdog NASSOCHAM, the IT companies and the premier IT educational institutes must interact closely and freely instead of working individually behind closed doors.
We are confident that IT industry can meet such a challenge. What about you?

Forecasting Steel Price Movements

2006-10-04T22:25:00.000+09:00

It is becoming increasingly difficult to anticipate which way the steel prices are going to swing. Like weathermen forecasting a sunny day and heavy rains lashing soon after as if with a vengeance, the steel price movements are defying all basic economic rules. When demand goes up, the prices are normally northbound and vice versa. There are already indications of a decline in steel demand in USA - one of the biggest steel consuming nations in the world. The Wall Street Journal has reported (and its reports are generally regarded as reliable) that steel inventory in USA is going up apparently arising out of production cut by the biggest steel consumer segment - auto industry. It is apprehended that there could be similar slowdown in other manufacturing industries as well. Another report by Metal Service Centre Institute corroborates the above trend and states that steel service centres in USA which sell 30% of US steel consumption to the consumers are having the highest stocks of 15.9 million tonnes since January, 2005. So in a situation like this, one would not rule out prices falling. Right?
But if you refer to the statements of some stalwarts of Indian steel industries, the confusion gets further compounded. Dr J.J.Irani of Tata Sons has said "India's steel prices cannot be different. Steel prices are now an international phenomenon.... I do not see them coming down below the present levels in the next 3 to 6 months." Essar Steel maintains similar public stand on the issue. To top it all, there are reports that Mittal Steel SA will be increasing the steel prices by 5% on both flat and long products from November onwards.
We could not make out whether steel prices will go up in the near future. Can you?

India To Become World's No 1 Next-Generation Fuel Producer

2006-10-02T19:03:00.000+09:00

Necessity is the mother of invention. The looming oil crisis with fast depleting reserves and uncontrollable rising prices, the human ingenuity has been searching for alternative fuels. In the last 3 to 4 decades, a lot of serious research has already identified some and commercialized a few sources.
Bio-ethanol has reached the realm of commercial viability. Diesel or petroleum is blended with varying amounts of ethanol - a product out of corn for use in automobiles. Similarly, another alternative fuel bio-diesel is the mixture of diesel with Jatropha plants. India is showing, though somewhat belatedly, interest in getting away from conventional fossil fuels to next-generation fuels. The government has identified 400,000 square kilometres (98 million acres) of land where Jatropha can be grown, hoping it will replace 20% of diesel consumption by 2011.
At Haldia, West Bengal which is emerging as a petro-chemical hub, a plant to produce bio-diesel out of Jatropha is being set up at a cost of Rs150 crores ($35 million). The company Emami will need 3,00,000 tonnes of Jatropha to be cultivated over 1,00,000 acres of land. A US company is planning to invest $0.5 billion dollars for a project to manufacture bio-ethanol and bio-diesel using rice, wheat, corn and potato etc.
Mother Earth is indeed bountiful and life can be very beautiful.
Is it not?

India's Love For Gold

2006-09-29T19:23:00.000+09:00

The yellow precious metal gold is an old obsession with Indians. Their womenfolk has an insatiable craze for gold jewellery so much so that 80% of gold consumed in India goes for it. However, the global trend currently is for the fusion jewellery that uses platinum and gold.
Gold is a favourite mode of saving too. However, the return out of saving in gold has not always been attractive as at times investments in real estate and stocks have benefitted investors disproportionately. So whenever the stock-markets become dull, gold hoarding is noticed. Interestingly, gold is also held in very large quantities in many temples which are offered by devotees. Some speculative reports estimate gold reserve in India around 20,000 tonnes.
The consumption of gold in India is the highest in the world at 700 tonnes per annum out of total world annual consumption of 3100 tonnes. The demand is also seasonal reaching the peak when festive seasons like Navratri and Diwali start after monsoon. Again, the marriage season starts coincidentally almost around the same time and goes on till May or June. The gold prices had remained weak during the last month as the prices swung between $576 to $621 an ounce. The corresponding prices in India ruling then was Rs8900($193) per 10 grams. But the ground is getting ready for an upswing in gold prices. Some analysts forecast that the international gold prices may touch $700 per ounce and it will touch Rs10,000($220) per 10 gram.
Watch out for the next gold-rush!

To Export Or Not To Export Iron Ore

2006-09-28T18:23:00.000+09:00

For India racing to become a super economic power, fast expansion of steel manufacturing capacity has become an urgent necessity. The National steel Policy aims at a production capacity of 100 million tonnes by 2019-20 but some estimate it to reach 150 million tonnes the way new steel projects including those of the international giants like Arcelor-Mittal and Posco are springing up. Simple arithmetic puts the iron ore requirement at 240 million tonnes per annum. The estimated iron ore reserve in India is around 13 billion tonnes.
Another study puts only 6.311 billion tonnes are proven reserves and a balance 17.27 billion tonnes are probable and possible reserves. Exports from India have quietly risen to 90 million tonnes per annum. Some are apprehensive that iron ores may not last even for 30 years. One would be inclined to infer from the above that iron ore exports should be stopped. An expert 'Hoda committee' has poured oil over the flames by suggesting that export of iron ores should continue.
There are two schools of thoughts prevailing on the issue.On the face of it, exporting scarce raw materials without value addition does not make much sense. The Steel Ministry supporting the interest of the steel manufacturers wants the exports to be phased out in next 15 years. It has now got a political backing with CM, West Bengal openly criticising the export of iron ore.On the other side of the battle-lines are Mining and Commerce ministry officials. This tug-of-war will finally determine the future of Steel industry in India. Associated Chambers of Commerce and Industry of India (ASSOCHAM) released a paper recently titled "Indian iron ore: Where are we heading".
Anyone willing to hazard a guess?

Myths & Facts Surrounding Blogging

2006-09-27T23:24:00.000+09:00

One fine morning I decided to take up blogging and within minutes, to my utter surprise, my blog was ready thanks to the user-friendly sites which offer ready-made free services. Having entered the blogosphere without knowing ABC of blogging, I found myself in an unenviable position - fight or flight was my choice. As the fight still continues, I got exposed to some myths that have metamorphosed to facts. I want to share my experience gained so far with you.
Myth #1: Blogging is a favourite past-time among only a limited number of people who are casual and pedestrian in their writing.
Fact: A mind-boggling 50 million Bloggers are at it and every second two new Blogs are born. A good number of Bloggers put heart and soul to their work. Some blog posts are as outstanding as some best sellers.
Myth #2: One has to just spend a few hours in writing and then forget about it.
Fact: Blogging requires meticulous planning, research and a good strategy to stay connected with the blogging community to get feedback and act upon comments. The posts should be regular and preferably at least one post a day.
Myth#3: As long as you think your post is having originality and unique style, the readers will surely lap it up.
Fact: Your posts should appear interesting in a cursory glance. To achieve this, a very catchy title is a must. Darren of Blog-Republic has made several useful suggestions in his Blog. The middle portion is equally important if not more explains lucidly Easton in his Bog Businessblogwire.
Myth#4: You have some creative thoughts and you know how to express them. You do not have to bother anything about technology.
Fact: One must have minimum technical background to make frequent changes and add features to the Blog besides making it stand out visually.
Myth#5: One can make money while blogging.
Fact: There are thousands of sites available to show how money-tree can be made to grow when you are blogging. AdSense, SEOs, pings and sitemeters are only a few tools available to monitor and maximise hits which set in an euphoria. The problem arises when some get carried away by such hits their Blogs generate and start believing that their writings are so popular as can be compared with the works of famous writers like Charles Dickens. If the mind is obsessed with how to get the blessings of Google, then paradoxically thoughts for creative writing will have no place.
How many of the above you accept as facts?

How To 'Tide' Over Energy Crisis

2006-09-26T19:09:00.000+09:00

As the population explodes and economy expands, energy needs are multiplying on the expected lines. The unexpected answer is provided by what is abundantly available in nature - tide and wind. Of course, the conventional fossil fuel is also a gift of nature to mankind. But its excessive use has not only depleted already the reserves but also cause new problems of global warming. The search for alternative fuels has found that tide can be a dependable and clean energy source. Unlike the destructive power of tsunami which unleashes devastation and death all round, tidal waves can be tamed and transformed to useful energy.
As time and tide wait for no one, India is going to set up its first tidal energy plant of 3.5 MW capacity to generate power in Sunderbans, West Bengal at a cost of Rs 40 crores($0.9 million). Sunderbans has otherwise been known so far for the famous Royal Bengal tiger reserve. In the whole world, India will become the fourth nation to produce power from tide after Russia (400 MW), France (240 MW) and Canada (20 MW).
In a report appearing in Economic Times, the combined potential for tidal energy in Sundarbans, Kutch and Gulf of Cambay has been estimated at a whopping 9000 MW by the Ministry of Non-conventional Sources (MNES).The best part of the proposed plant spreading over 120m wide and 8500m long area is that it would not necessitate human migration nor would it cause any environmental harm.
Can anything be better than this?

A Billion Dollar Question

2006-09-25T17:56:00.000+09:00

Some awards and rankings are simply awe-inspiring. Take for example - the Nobel prize which is regarded as the highest honour for the most outstanding work in the field of science, economics or peace. Similarly, Oscar awards are considered the most coveted in the world of entertainment. Shouldn't there be, therefore, any ranking for possessing the most-sought-after thing in life i.e. money? Why not, there are such honours the magazine Forbes bestows every year by bringing out a list of wealthiest Americans.
The list of 400 richest Americans has been published by the magazine by following a criterion of including only those with a net worth of minimum of $1 billion or more. For the last 13 years in a row, Microsoft's Bill Gates has been at the top position. The second position has always been taken by Mr Warren Buffett since 1994.The third ranker Sheldon Adelson has catapulted to the position from 15th held last year. His rise has an interesting background. He has made his wealth from casino unlike the likes of Bill Gates besides four others who are technologists and five Walton clans who made their fortune through retail sales. The two Google founders Sergey Brian and Larry Page got 12th and 13th ranking; all cyber citizens and Bloggers blogging round the globe have been directly using their creations.
Mr Adelson, however, is looking for a second property in Macau and a new casino in Singapore. These billionaires, perhaps, send one common message for their success - 'Money is lying all over. You should only know how to pick it up'.Very soon Forbes may decide to publish only names of 'trillionaire-athon' participants as the list of billionaires is becoming too long.
Who all are getting ready to take part?

Posco Bitten By M & A Bug?

2006-09-22T23:10:00.000+09:00

Whether it is the survival instinct or the ambition to climb higher, Posco - the South Korean giant and fifth largest steel manufacturer in the world is looking for acquisition opportunities in Asia. The move appears to have been triggered by the threat perception of the company itself becoming target for acquisition by bigger sharks like Arcelor-Mittal Steel which has emerged as the largest manufacturer with a capacity of 110 million tonnes. The corporate battle for merger of Arcelor the second largest steel manufacturer with Mittal Steels which was already in the top position was closely watched that lasted several months and created history of sorts. This classic M&A sent shock waves throughout the steel industry worldwide. Several leading manufacturers in China and even Tatas in India have already changed their holding pattern to pre-empt any hostile take-over bid.
Posco, on the other hand, appears more vulnerable at present as more than 60% of investors of the company are foreigners. Their strategy seems to bring change in ownership pattern by mergers and acquisitions. They are on the lookout for some companies in China and India. Fortunately for Posco, such plans can be translated to reality as they are cash-rich with an estimated $1.57 billion in reserve.They have already made a foray in India with a greenfield project to manufacture 12 million tonnes steel at an investment of $10 billion. As ill luck would have it, the project is hanging in the balance as land acquisition has not proceeded smoothly. The company has, however, embarked upon cross-holding ties with Japan's Nippion Steel Corp so that it does not become an easy prey to hostile take-over bids.
Let's see which way the wind is blowing.

Economy Riding High, So Also FDIs

2006-09-21T19:13:00.000+09:00

Every picture of the Finance Minister of India Mr Chidambaram these days shows him wearing a generous smile. Coming from a person who is in the driving seat of the mammoth economy, it is quite understandable. Shaking off its lack-lustre growth rate of 6% in the last decade and achieving an all-time high of 8.2%, India is now in a position to flex muscles before the champion China who are still unbeatable.India's GDP has touched $750 billion by traditional method of assessment. Using the jargon 'purchasing power parity' (PPP) which finds favour with the economists, India ranks fourth largest in the world as per International Monetary Fund (IMF).
When it comes to attracting FDIs, India's performance has been even better. As against bagging $7.5 billion during the year 2005, the Finance Minister, in an interview with Reuters, sounded confident that it would reach $10 billion during the year 2006. He was candid to say that except four or five specific sectors where FDIs have still got caps, the opportunities and the projects awaiting investors are very high.
He would have scored a perfect ten out of ten but for the deficit going haywire so also the inflation. He expects deficit would be contained at 3% and high deficit as well as inflation would become history in 2008.
By then, hopefully, we may see his pictures with a broader smile.

Renewable Energy Holds Out Hope - Part Two

2006-09-21T09:50:00.000+09:00

The worldwide wind turbine capacity has climbed to a whopping 60,000 megawatts during 2005. The industry has developed large and efficient turbines of 4 to 6 MW. The average cost of generation is working to as low as Rs2-3.25 (four cents to seven cents) per kilowatt-hour. The social benefit of pollution control by this source of energy is a bonus for the already competitive cost of power. India has vast stretches of land where optimum wind speed almost throughout the year is available for free. Instead of subsidising coal-based power, the subsidy can be given perhaps more liberally for wind power as that would kill two birds in one shot.
The other renewable energy which could be commercialised on a much higher scale is solar energy. Using solar cells or photovoltaics, global generation was merely 5000 MW during 2005. However, with the breakthrough in technologies of making cheaper photovoltaics, the cost of generation has come down to Rs9-11 per kwh - almost four times the cost of coal-based electricity. With an investment of just $100 (Rs4600), people in Kenya prefer solar power to conventional power. In India, the low cost photovoltaics should be mass-produced so as to reach rural areas and inaccessible terrains easily.Innovative ideas invariably get rejected by traditional thinking.
The bureaucrats, the whole political class and power consultants will have to change their mindset.Are they ready?

A Question Mark Over Investments - Fallout Of Political Developments

2006-09-20T19:12:00.000+09:00

The military coup in Thailand has put the world on tenterhooks. When it happened last time in 1997, the Asian currency market had sunk into a deep crisis. For such coups, whenever or wherever they take place, political analysts find it wise not to venture any comments on their outcome as chances of being proved wrong are very high.
Be that as it may, Indian companies have lot of business interests in Thailand. Investments have been made in a wide range of products including rayon fibre, drugs & pharmaceuticals and chemicals. The companies having large stakes in Thailand and likely to get affected are Ranbaxy, Baroda Rayon, Aditya Birla group and Ballarpur Industries.
Nearer home, the change of government in Jharkhand has already set the cat among the pigeons by announcing a review and revaluation of Memorandum of Understandings (MOUs) signed by the predecessor. In my post 'Politics And Economics Are Strange Bedfellows', this very forecast had been made which now has turned out to be true. Many investors for steel, power and mining projects are crossing their fingers. Of course, those who know how to run with the hare and hunt with the hound are not unduly worried.
It would always be better for investors to keep a distance from politics. Easier said than done - is it not?

Renewable Energy Holds Out Hope - Part One

2006-09-20T14:18:00.000+09:00

India is in a Catch-22 situation as far as its burgeoning power needs are concerned. Already facing power shortage, India is racing against time to install additional power capacity of 60,000 MW during the Eleventh Plan to meet the accentuated appetite of the economy poised for quantum leap to become a super economic power. Most of the sources for additional power are coal-based plants. They spew a staggering 0.25 kilogram of carbon for every kilowatt-hour power generated. The Kyoto Protocol has fixed a ceiling of 450-550 ppm of carbon dioxide in the atmosphere as higher presence would result in further global warming.
The 'carbon credit' introduced as an incentive in emission trading imposes fine on those who fail to meet the condition and reward those who succeed in controlling carbon dioxide emissions. Out of 850 coal-based power projects coming up in USA, India and China, it is feared that very little would be achieved by way of controlling carbon dioxide emissions. If these projects are fined for polluting the atmosphere, the cost of power would willy-nilly go up further from the average rate of Rs2-3 (4 to 7 cents) per KWH.
The crisis may be overcome by shifting focus from the conventional fossil fuels to renewable energy sources. In the recent years, renewable technologies have dramatically improved in performance and affordability in wind turbines and solar cells making them viable alternatives rather than mere R&D showpieces.
Please read Part Two to learn more.

A Rain Of FDIs!

2006-09-19T18:57:00.000+09:00

That India is emerging as a favourite destination for foreign direct investment (FDI) was never in doubt. But when FDIs worth Rs 990 crores ($220 million) for 18 projects are approved by the Foreign Investment Promotion Board in one go, it becomes music for India. According to a news report appearing in Economic Times, the investments are lined up as follows.
The Japanese giant in chemicals - Mitsubishi Chemicals will be investing Rs 380 crores ($90 million) in West Bengal for manufacture, marketing and distribution of purified terephalic acid (PTA). Two American private companies in partnership with Adventity, BPO will set up a voice-based call centre in Mumbai with an investment of Rs 250 crores ($55 million). For manufacture of Titanium Dioxide, Russia's JSC Technochim will set a JV in Orissa with 55% equity out of Rs 190 crores ($40 million) investment. Other investments will be made by British Gas for setting up wholly-owned subsidiaries in Andhra Pradesh, Karnataka and Tamilnadu.
Heavy rains may still be causing inconvenience to many in some parts in India, but when it comes to FDIs - more the merrier!

Small Cars Make Big News

2006-09-18T19:45:00.000+09:00

After Tatas gave a clarion call to set up small car manufacturing plant at Singur, West Bengal other car manufacturers have jumped to the bandwagon. (See the post 'Small Is Beautiful').The front-page story in today's financial newspaper Economic Times titled 'Maruti to try its lakh with 800' makes interesting reading. The intended pun on 'lakh' (which rhymes well with luck) has not been lost. In my previous post 'Is Small Car Project A Big Dream', I had mentioned what was this entire buzz about 'lakh'. Reproduced an extract from the same:"One has to understand the psychology of middle class customers in India to appreciate the compulsion to keep the price below the one lakh barrier. Today every Indian first dreams to become a ‘lakhpati’ (one who is worth more than one lakh or$2200) and then a ‘crorepati’ (one who is worth more than ten million rupees or $220000)". ...
Perhaps seeing the writing on the wall, Maruti the undisputed market leader in auto business in India is sitting up and taking notice. As per the story in Economic Times, Maruti is considering to bring down its price of '800' (the cheapest of all the models) by Rs 50,000 to Rs 60,000 ($1100 to $1350) to Rs 1.3 lakh ($3000). It will still be above the psychological barrier of Rs1 lakh ($2200).
The future battle between Tata's People's car with a tag of $2200 and Maruti's 800 with a tag of $3000 is expected to be fierce but interesting for the customers. Both sides are formidable giants. On the one side is Suzuki the Japanese carmaker which brought revolution to the Indian auto industry. On the other side is Tatas - the homegrown corporate icon having experience and goodwill spread over more than a century.Ultimately, the small car customers will be the real winners.
Is it not?

Well, Here Goes Steel For Rural India!

2006-09-18T09:52:00.000+09:00

As it is, India's per capita steel consumtion is quite low; it is only 30 kgs as against the world per capita consumtion of 150 kgs per annum.The urban-rural divide is further hightened by the figures of 77 kgs for the urban customers and a measly 2 kgs for the rural masses. Rural India constitutes 70% of the country and if the domestic consumption has to be raised to the level of 90 million tonnes by 2019-20 as per the National Steel Policy, something drastic has to be done for improving the rural market.
Steel is a commodity not used in the same way as other commodities of daily consumption. Unless steel finds customers in large numbers for house construction, silos for food storage, tanks for water storage, construction of roads & bridges and platforms for shelter during natural disasters and the likes, the higher per capita consumption of steel in rural India will remain ever elusive.Realising the potential for growth in this area, the steel ministry has been urging steel manufacturers to make steel available to the rural customers at their doorsteps.
The manufacturers have reportedly agreed, in a meeting with the steel ministry officials held on 8th September, to supply steel to the rural market. They will take care of the logistics and bear its costs too. This will make steel cheaper for the rural customers by Rs600 to Rs1000 ($18 to $30) per mt. It is anticipated that the rural per capita consumption will double to 4 kgs by the year 2019-20.
So the moment of truth has arrived!
It's time for Bhangra and Dandia. Is it not?

Politics And Economics Are Strange Bedfellows

2006-09-16T23:33:00.000+09:00

Politics and economics are strange bedfellows and things are always better when they do not come too close. A case in point is the gloom and uncertainty that has followed the change of government in the state of Jharkhand after 18 months.
So far, big investors were making beelines to the state for investment in mining, steel and power projects. Jharkhand is one of the mineral-rich states and the investments were expected to provide employment opportunities besides raising the living standards which are one of the lowest in the country. The fiffty odd Memorandum of Understandings (MOUs) have come to a halt till the new government is formed. The first thing which the new government may, going by the precedents, order investigations into the project sanctions and transfer the officials from the key posts held at the pleasure of the previous government. There is bound to be some slowdown of projects and some others may get bogged down.
The same thing had happened when central government formed by coalition was changed with a new formation about two and half years back whose constituents' ideologies are diametrically opposed to the former. See, what has happened to reforms process with the Left parties now calling the shots. So, let us wait and watch what happens to those MOUs.
Heavens forbid that the Memorandum of Undersatandings do not become Moratorium of Understandings!

Steel Price Fluctuations

2006-09-16T10:50:00.000+09:00

'What goes up must come down'; it looks the steel prices are following this axiom. Steel prices were stagnating till 2003 and when they started rising again, there appeared to be no end. From April 2005, the prices started nose-diving and production cuts as well as loosing flab of inventory became regular features in the steel industry. Just when the steel manufacturers started enjoying favourable markets during the first half of 2006, the prices are again getting slashed. Behind such abnormal hike was the unsatisfied appetite of China for steel. It had gone on an importing spree and the global prices climbed to record highs as a result.
China is the biggest steel manufacturer and consumer at the same time. As per International Iron and Steel Institute (IISI), the world production during the first seven months of the year 2006 was 697 million tonnes - a growth of 10%. China's production was 235 million tonnes representing a growth of 22% where as India's production was 24 million tonnes and a growth of 10% - same growth as the world figure. China has now managed to overtake the steel exporting countries namely Japan, Russia and European Union in exports in the first six months. The excess production forced China to export steel which in turn weakened the global prices.
Obviously, the trump-card is with China and as a thumb-rule, if it imports - the steel prices go up and vice versa. Let us hope that China plays the trump-card soon. Some analysts have predicted that steel prices will go up within 4 to 8 weeks. The third biggest manufacturer in Europe - Corus has even announced its intention to raise prices from the next quarter. In India, the prices are likely to go up after the end of the monsoon season when demand generally goes up.
Meanwhile, the steel manufacturers are crossing their fingers for price rise.

India Ho! Dell's Next Destination

2006-09-15T20:00:00.000+09:00

Dell is the largest global computer manufacturer and has several feathers to its cap. It is a $55 billion company - 28th largest and 8th most admired in USA and has manufacturing units in China, Malaysia and Ireland. The decision of the IT giant to set up a manufacturing unit near Chennai - the sixth so far globally speaking - has been hailed as a sign of India emerging as an IT hub. Though the company has initially announced its plan to invest $60 million, the state officials are confident that the total investment will go up to $300 million (Rs1350 crores) with the company's suppliers chipping in.
The brand image of the company is already very high as reflected in its recent sales growth by 63%. The most successful marketing model of the company lies in its accepting orders through Internet and phone calls only and not relying on retail outlets to woo customers.
The Dell plant will be located in the small town of Sriperumbudur near Chennai where ex-Prime Minister of India - Rajiv Gandhi had laid down his life at the hands of assassins. He had tried his best to make the government and the people IT-savvy but for whom India would not have made rapid strides in having one of the largest pool of professionals in the field.
So is it not the best way to immortalise the great visionary?

India Beats China At Cellular Industry

2006-09-14T22:34:00.000+09:00

India has had to play second fiddle to China in economic growth, reforms et all. The reason is not far to seek; China had a head start of embracing liberalisation fifteen years back. Nevertheless, India is trying to break the order. During August 2006, India marched past China in adding cellular subscribers. While India added 5. 9 million new connections, China could do only 5.1 million numbers. According to The Cellular Operating Association, the global mobile industry is growing at 40 million subscribers per month of which 41% is accounted by Asia- Pacific and the combined share of India and China is 25%.
The future growth is simply mind-boggling. The population of mobile subscribers will reach 3 billion by the year 2007. In other words, every second person on this earth will have a mobile phone. Out of 500 million new connections expected by 2007, the lion's share will go to India with 80 million subscribers.
Cellular phones are becoming raging favourites everywhere. Is it because
1. It is fast, easy mode of communication.
2. It is convenient to use.
3. It is a status symbol.
4. It is the answer to the latest insuppressable common desire to stay connected all the time.
5. The users are becoming more and more garrulous.
Any other reason you can add to explain the phenomenal growth in mobile industry?

Industry's Seductive Vital Statistics

2006-09-13T21:42:00.000+09:00

Aaron Levenstein had said "Statistics are like a bikini - what they reveal is suggestive, but what they conceal is vital". One can as well say the same when he goes through the latest data of monthly Index of Industrial Production (IPP) released by the Ministry of Statistics and Programme Implementation.Let us have a quick glance at those seductive figures.
The industrial production grew at 12.4% during July, 2006 over July, 2005. The figure for April-July, 2006 is 10.6% higher than the April-July, 2005 figure. All the three sectors - Mining, Manufacturing and Electricity have clocked growth of 6.0%, 13.9%, and 8.6% respectively which collectively lifted the industrial growth to 10.6%. The consumer non-durables and durables have both recorded 18% growth. The capital goods sector which holds the benchmark for industrial growth is on a high growth track of 15.4%. In the industrial group wool, silk, man-made fibre textiles (25%), paper, basic chemicals and transport(22.4%) have individually attained double digit growth. The only industrial group which recorded negative growth was Leather and Leather & Fur products (-7.2%) and Jute and other vegetable Fibre Textiles (-5.1%).
No wonder, all roads seem to lead to India for the present. Among others, USA and Japan are giving finishing touches to their FIIs.
What then others are waiting for?

Say It With Flowers

2006-09-12T18:56:00.000+09:00

Modern society is not content merely with 'Rose smells sweet - call it by any name!'. It wants roses and other flowers to have unique design, petal size, pleasing colours and longer shelf-life as well as nice fragrance. Yes, it is possible to achieve all this by influencing nature using genetics. Before raising your eyebrows in disbelief, please note that the famous rocket scientist turned President of India told this while inaugurating the second International Flora Expo-2006.He urged the research institutes to develop roses that are beautiful, fragrant and long lasting and also to develop indigenous variant of pesticides and fungicides either independently or in collaboration with foreign institutes/ industries. He further emphasized that the research community should bring out value-added products for the export market. Presently, the flower exports from India face competition from Kenya, Uganda, Zimbabwe and Zambia.
The agriculture minister observed that the agro-climatic diversity of India gives the capability to cultivate large number of flowers including temperate flowers that can be grown in the high altitude states of Sikkim, Himachal Pradesh and Uttaranchal.
The President's vision includes an export target of $1 billion by the year 2010 besides meeting the ever-increasing domestic demand. He is famous for his iron-will. He had once in his early career carried some rocket assembly on his bicycle for launch at Thumba Rocket Launching Centre when he found no other transport available.
When he has the will, surely there has got to be some way.

Blog's Editorial

2006-09-11T18:56:00.000+09:00

Every newspaper has an editorial content which is the exclusive prerogative of the editor. The other contents are contributed by various journalists working for the newspaper. Of course, the editor uses his scissors to clip the wings of those who fail to toe the line. He also knows which side of the toast is buttered and bends over backwards to please his boss - the newspaper baron. The barons, again, have their own axes to grind in the political, business and social arenas.
Blogging, by contrast, is a completely different cup of tea. The blogger finds himself in the changing roles of a journalist, an editor and even a media baron if he rises to the top of the blogophere. So when he posts stories, it is the hidden journalist and the editor within him who owns up full responsibility. He cannot shift blame to the journalist or the editor or to the media baron if anything goes wrong. The buck really stops there.
Some bloggers fail to visualise the consequences of not having any firm opinion on a topic. The first victim of such a lackadaisical approach is the credibility of the blogger. Suppose a blogger writes critically about George Bush's Middle East policy. He may succeed in building up a niche readership over time. But if he alternately goes on to support his policies, his readers will desert him permanently and this happens when one tries to be too clever by half. He will soon be condemned to oblivion as a turncoat. Of course, many blogs have teams of authors and what has been said in previous paragraph may not hold good for them. Those blogs function in similar style as newspapers.
Be that as it may, it reminds me of a very old advertising jingle 'Take a stand, be a man'. Will you?

Watching The Time Industry Grow

2006-09-10T18:17:00.000+09:00

In India, fifty years back, watches were timekeepers, status symbols and preservers of memories. Only the educated, the elitist and the affluent generally flaunted their watches - mostly smuggled from Switzerland. It remained more or less a male domain. The social practice was for the in-laws to gift a watch to their sons-in-laws irrespective of whether the wedding was of a rich-man or poor-man.
Today, from kids to the elderly, businessmen to common men, farmers to fashion designers - all put on watches and the gender divide has disappeared so much so that the feminine trend is to have watches matching every occasion and every sartorial style.During the era of nationalisation and public sector companies, HMT(Hindustan Machine Tools Limited) became a household name for watches. The company got technical know-how from Citizen Watch Company of Japan.They lost the dominant position when private sector companies made foray into the watch industry.
Watches made by Titan Industries are now hot favourites among customers irrespective of age, sex and profession. Their current production capacity is 10 million pieces per annum. They have exploited to the hilt the innate desire of customers to get more value out of products. Watches need not merely show the time; it better be a jewellery that can also give the time.The company has gradually penetrated the niche market of making jewellery. Last year, the jewellery segment contributed 53% and the watch segment 44% of the turnover of Rs1500 crores($330 million). It plans to attain a turnover of $1 billion by the year 2010.
Which industry it represents - watch or jewellery or both?

Small Is Beautiful

2006-09-09T10:21:00.000+09:00

Some say small is beautiful. Talking about small cars, nothing can be more correct. Small cars are cheap, generally consume less fuel than big cars, go well with the lifestyle of middleclass people and are easily manoeuverable in Indian cities having narrow roads. The limousines and big cars are beyond the reach of Indian customers and those are better seen in films, TV shows as well as glossy magazines rather than owned.
Tatas - the oldest corporate house in India knows the mind of Indians. They have already embarked on a small car project to be located in Singur, West Bengal. Initially it would produce 2,00,000 cars but by the year 2012, the capacity will go up to 5,00,000 cars.
The Japanese and South Korean auto giants having joint ventures in India have realised, albeit, belatedly that small cars are the In-Thing in India.Toyota Kirloskar will bring out a small car within next 2-3 years which will expand their capacity to 2,50,000 cars and a market share of 10%. Its plant location has not yet been finalised. Not to miss the boat (or car?), Hyandai will bring a compact car by the year 2008 for both domestic as well as export markets. Honda Siel is also planning to invest $200 million in a new plant with a capacity of 1,00,000 cars for the Indian market. The location is yet to be fianalised.Suzuki is holding talks with its alliance partner Nissan for another small car plant which may require investment of Rs2,500 crores ($550 million). It will have export thrust. If Nissan's plant comes up, the total exports from Suzuki-Maruti and Nissan plants will cross 4,00,000 cars. The diesel versions may also get a further boost because of frequent fuel price hikes.When it happens, small car exports from India will turn the table on foreign big car makers.
Take a big bet on the 'small'.

Chiria Mines - The Heart-Throb Of Steel Moguls

2006-09-08T11:51:00.000+09:00

Till recently, not much was known about Chiria mines. But when the famous cast their eyes on anything, it becomes the cynosure of all. This is precisely what has happened to Chiria mines which is hogging publicity for long.Indian Iron Steel Company - the second steel plant in existence (other than Tata Steel) prior to India gaining independence in 1947 was a British blue chip company listed in London exchange. It became sick despite several efforts to revive it in 1970s. It had a mining lease for Chiria mines which reportedly expired in 1979. After it was made a wholly-owned subsidiary of SAIL in 1979, the company turned corners during 2005. Along with IISCO, Chiria mines also came under SAIL.
What is so special about Chiria mines? It has a deposit of 1.4 billion tonnes of iron ore of superior quality. So in a competitive world of new steel projects coming literally by dozens, if one has Chiria mines the battle is half won. SAIL is therefore keen to retain its hold over it. After all, it has ambitious plans to expand capacity to 22 million tonnes and is aiming higher to reach 40 million tonnes. The ubiquitous Mittal Steel has also jumped into the arena with their project to manufacture 12 million tonnes in the state of Jharkhand and wants 600 million tonnes out of the Chiria mines.
The Jharkhand government which awards the mining rights cannot throw away so easily SAIL - a central government undertaking. The matter is subjudice and any out of court settlement has been made difficult by the political twist to the problem. The state government is ruled by a coalition of parties which are opposed to the central coalition.Can you guess which suitor will get Chiria mines?

Maruti On Top Gear

2006-09-07T13:07:00.000+09:00

Maruti Udyog Limited - the largest car manufacturer in India which brought a revolution in the auto industry by making since 1983 low-priced and fuel-efficient cars in collaboration with Japan's Suzuki Motors Corp has travelled a long distance. With 11 models and production expected to reach 6,00,000 cars during the year 2006, it has remained a market leader with a market share nearing 50%. Maruti crossed the milestone of making 5 million cars since its inception in April, 2005. India produced 1.406 million cars during 2005.
The Company's vision statement reads as follows:"The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholders' Wealth;A Pride of India"In keeping with the vision, it is embarking upon a production capacity expansion to one million cars by the year 2010 when the total demand for cars in India is expected to rise to two million. An investment of $1.3 billion is being planned to achieve this. By the same year, it is also targeting to export 1,00,000 small cars to Europe. The company plans to introduce five new models and upgrade its existing plant besides building a new car plant as well as a diesel engine plant so as to attain the target of manufacturing one million cars by 2010.
By contrast, US manufactured 11.524 million cars followed by Japan with 10.06 million cars during the year 2005. It was bound to be so, as there are only three cars for 1000 people in India as against 500 cars for 1000 people in USA. Things may not, however, remain so depressing for India. According to Golden Sachs, India would have the maximum cars in the planet by 2050.
Hold your breath, please!

From A Cyber Coolie to Cyber Czar

2006-09-06T13:56:00.000+09:00

One field where India's progress has been phenomenal in the less than last two decades is the IT industry. In 1980s and first part of 1990s, India's slow pace of growth had earned a dubious nomenclature 'Hindu growth rate' from some critics. Nobody not even Indians could believe in their wildest dreams that within such a short span of time, it would earn the honour of becoming a global leader in IT sector. Thanks to web 2.0, the whole world knows that India has one of the highest It professionals - its poor resources notwithstanding.
Firstly India enjoys the advantage of having English-speaking skilled workforce. In addition, the wage structure is heavily tilted in its favour. The bureaucratic red-tape which is the bane of slow economic development was circumvented by imaginative private sector torch-bearers like Infosys and Wipro. They spearheaded against heavy odds the penetration to US and other foreign markets. It is true that in the beginning only work requiring low technical skill such as data entry was available to the then IT professionals - an euphemism for cyber coolies going by the nature of work.
But slowly India has consolidated its strength in BPO, KPO and software development work. A news report in Times of India gives a glimpse of the scenario for the IT industry. "While US tech services firms are likely to post an average profit growth of 7% this year, the growth rate is pegged at 22% for their Indian counterparts, Goldman Sachs said in a report. The analysts anticipate an average growth of 30% for large-size Indian IT companies in 2006 and 2007, as against 8% for their US rivals."It has made IT giants like IBM, EDS, ACCENTURE and ORACLE sit up and pull up their socks to face the challenge. Some even want to be partners of Indian IT companies and are planning investments to the tune of $15 billion. So it is music to the ears of Indian citizens that at least in IT world, the cyber coolie is waiting in the wings to become the cyber czar.
Is it not an incredible achievement?

India's Short Menu Of Alternative Fuels

2006-09-05T18:25:00.000+09:00

Depleting petroleum resources, skyrocketing prices and alarming auto-emitted air pollution have thrown the greatest challenge to man's ingenuity to look for alternative fuels since the 'oil shock' of 1973. Previously the auto makers left no stones unturned for attracting customers for their ever-changing models in size, elegance and comfort. Little attention was paid towards their fuel efficiency so much so that quite a few were just oil-guzzlers. The 'oil-shock' drove home the hard reality that petrol and diesel consumption in cars needs to be curtailed. Success was at hand sooner than expected.
The world found that the future of auto industry need not be fully dependent upon the traditional fuel i.e. petrol and diesel. A few alternative fuels were tested and commercially evaluated. But as price rise of petroleum products got reversed, those fuels were not promoted anymore by any marketing and advertising blitz or incentive packages that could have weaned away customers from the traditional fuels.A brief list of technically feasible and commercially tested alternative fuels is mentioned below.
1. Biofuels: Ethanol in varying levels with petrol or diesel2. Biodiesel:Processed fuel derived from biological sources - can be used in diesel engines.3. Compressed Natural Gas (CNG)4. Hybrid fuels: Using petrol in internal combustion engines and electrically charged batteries as in Toyota Prius.5. Battery-Electric: As in GM EV16. Flexi-fuel or Duel fuel: The vehicle typically alternate between two types of fuels. A common example is a vehicle that can accept petrol with varying levels of ethanol.
In India, alternative fuels with the best techno-economic parameters in Indian conditions should be rigorously put to commercial use as the prohibitive cost of petrol as well as diesel is casting a long shadow on the growth of the auto industry. Bulk of the customers for cars belong to the middle class who can afford prices ranging from $4000 to $8000. For them, petrol selling at $1.1 per litre which can at the most give 18-20 kilometres is pinching their pockets. The most promising alternative fuel is bio-diesel using jatropha, karanj and similar species. The hybrid fuels and flexi-fuels can be run with varying amount of blended ethanol. Locally, the plant cultivation can be promoted provided incentives are made attractive. The auto industry, the government and the political class as a whole have to put their heads together to make this happen. It seems a long way to go.Nevertheless, it should be given a try.
Don't you agree?

Blogging At The Crossroads:Food For Thought

2006-09-04T18:14:00.000+09:00

Blogging is the priceless gift for netizens of modern society. Like
the advent of printing which triggered spread of literacy and
knowledge, blogging has endowed millions with the power to express
their thoughts in writing without let or hindrance. It essentially
involves (a) expression of thoughts (b) writing. Again, expression of
thoughts has to be preceded by idea or opinion produced by thinking.
So, without thinking, how can blogging be done? Some say in discussion
forums nonchalantly that they blog on anything and everything. Some
others merely copy & paste content with just a customary tinkering
here and there. A few others try to sensationalise titles to draw more
attention.
The other pre-requisite for blogging is writing i.e. content. Writing
is an art which should be cultivated with patience at least for the
sake of excelling one's own performance. Like an individual's face or
handwriting, a distinctive style of writing would any time get kudos.
Though such blogs are not easily found, it becomes a matter of
satisfaction to visit them on one's own accord. Darren's Blog-Republic
is an example which comes to my mind.Blogging has now become an art as well as science. To make the blog attractive visually, more attention and efforts have to be directed to
this. There are ready-made formulae for increasing the
much-sought-after 'hits'. So once one starts playing to the gallery
for getting more 'hits', his content and style are ipso facto
relegated to the background. One is caught in a dilemma; how much of
art and how much of science should form the foundation of blogging?
Once 'hits' become an obsession, there will be little time for
expression of original thoughts and writing - the two quintessence of
blogging.
Freedom always entails responsibility and, therefore, the freedom
blogging allows should not be misused. Just as responsible citizens
all over the world are coming forward to protect environment and to
check population growth for the posterity to lead better life,
bloggers should exercise self-control for preservation and growth of
blogging. Otherwise, one day blogging will kill the goose that lays
golden eggs.
What do you think?

Bright Future For Agri-Industry

2006-09-03T13:49:00.000+09:00

Till recently, India's economy was agri-based. It is justifiably so as nearly 70% is rural India. Manufacturing and lately service sectors have now become significant contributors to the growth. But to move away from the traditional agriculture to other growing sectors would be suicidal. India gained self-sufficiency in food production after the success of its green revolution which changed the face from an impoverished begging bowl to a sleeping giant.
Be that as it may, the potential of exports of agri-products has not been fully exploited. The ambitious target of creating 60 agri-export zones (AEZs) has remained a distant dream. The commerce ministry has earmarked over $2 million for kick starting 10 to 12 AEZs having greater potential. Surprisingly, the private sector has been lukewarm to various incentives offered by the government like subsidies. Perhaps one or two success stories will serve as an impetus as has been seen throughout the history of Indian industries. As always, some wait in the wings for jumping into the bandwagon once any new line of investment claims success demonstrably.
As of now, India's agri-exports have reached $1.1 billion though a target of $2 billion had been fixed. Among the products, gherkin and rose-onion in Karnataka, mango in Chittor district of Andhra Pradesh, grapes, grape wines and mangoes in Maharastra and floriculture in Tamilnadu deserve special mention. The state of West Bengal has succeeded in attracting investment flow in processing of pineapples, mangoes and vegetables. Litchi in Uttaranchal and medicinal plants in Kerala also hold good promise. In the case of medicinal plants, India has undoubtedly an edge. Unfortunately, 65% of $150 million exports are in the form of raw products. Value addition can be achieved by infusion of capital and technologies for further processing.
Any takers?

India's Creditable Feat Of Earning 'Carbon Credits'

2006-09-01T15:33:00.000+09:00

As global warming due to greenhouse emissions is becoming a stark reality all over the world, the need for corrective measures like controlling the pollutants is getting more attention from all quarters. The crux of the problem of greenhouse emission is the rise of carbon dioxide levels in the atmosphere and the Kyoto Protocol has been accepted by some 120 countries excluding USA with the aim of reducing the same. In order to make it effective, economic incentives of 'carbon credits' have been introduced. As per Wikipedia, carbon credits are measured in units of certified emission reductions (CERs). Each CER is equivalent to one tonne of carbon dioxide reduction. The idea simply stated of a complex mechanism devised is that companies which pollute more are fined and those which pollute less are rewarded. The reward comes by way of carbon credits which can be sold to offending companies which must buy to balance their pollution limits. So like market for any commodity, buying and selling go on for carbon credits. The greater the demand, the higher becomes the price of carbon credits. Consequently, the companies selling more carbon credits make more money which makes the emission cost reduction cost-effective.Just to have an inkling of the emission trading, one unit of carbon credit is now selling around $15 to $20. Silently and surprisingly, some Indian companies have already tasted success in the field. The well-known tyre cord manufacturing company SRF has already sold over 2.5 million units valued at $40 million and are reported to be holding 16 million units more for sale in future. Reliance and Grasim are on the look out clinching best deals. There are others which are holding their cards to the chest and are waiting in the wings for striking gold. The irony of such trading is that the buyers are industrialised countries in Europe trying to beat the deadline of the year 2008.India's euphoria may be short-lived as large manufacturing activities are being planned to sustain GDP growth rate of 8% per annum or beyond to become a super economic power. Large capacity of coal-based power plants, steel plants, cement plants, textile and fertilizer plants along with a growing population of automobiles without provision for alternative fuels could reverse the trend.If India has to attain rapid economic growth to become a super economic power, it must not curtail its mega projects. The hopes of millions of jobseekers and India's dream will be shattered. However, it may still be possible with the help of pollution control technologies and equipments to go for rapid industrialisation and yet retain the honour earned. For this, India will have to shop around the world.Undoubtedly, it is a Hobson's choice for India. Is it not?

Iron Ore Reserves To Last For Only 20 Years?

2006-08-30T12:55:00.000+09:00

I still remember a few shots of the famous film 'MacKenna's Gold' which had Gregory Peck's refrain "There is no gold around there. The only dust I found there was prairie dust!". Does such a spectre haunt the Indian steel industry for its depleting iron ore reserves? May not be for now but after 20 years or so according to some sceptics.
The National Steel Policy aims at raising the steel production capacity to 110 million tonnes by the year 2019-20. For every tonne of steel making, 1.6 tonnes of an earthy thing - iron ore or hematite is required. India has got a deposit of 13 billion tonnes of iron ore and three states - Orissa, Jharkhand and Chattishgarh are blessed with the bulk of the deposits. So it is no wonder that investments from far and wide are converging on them. A total of 116 Memorandum of
Understandings (MOU) for installation of 146 million tonnes capacity and investment of Rs3.5 lakh crores ($70 billion) are being flaunted as a sign of appetite for steel industry in India. It includes giants like Posco of South Korea for a 12 million tonne project in Orissa and
Mittal-Arcelor for a similar capacity in either or both the states of Jharkhand and Orissa.
Alarmed at this 'Iron-Rush' which will predictably exhaust the known deposits in just 20 years or so, three apex Chambers of Commerce - Confederation of Indian Industries (CII), Assocham and FICCI together with the public sector and private sector majors like RINL, Tata Steel, Essar Steel and others have sought for a review of the Hoda panel's recommendations by the interministerial panel set up for the very purpose.The Hoda panel's recommendations have unnerved the existing steel manufacturers for its startling conclusion that iron ore scarcity is a
myth and there need not be any quantitive restriction either on export of iron ore. India's iron ore exports have been rising spectacularly from 32 million tonnes in the year 2000 to 92 million tonnes in 2005. The steel manufacturing companies, on the other hand, want the exports
to be cut down 15% every year for total phasing out by the year 2013.So the tug of war goes on between those who believe India's iron ore reserves are adequate and those who are concerned at rising exports as well as new capacities gobbling up reserves.Before it is too late, a realistic estimate of iron ore reserves and its optimum utilisation should be undertaken on a war footing. The reserves should be earmarked for the existing plants and the new projects and lastly exports if any surplus remains.
Otherwise, it would be putting the cart before the horse!

Light At The End Of The Tunnel

2006-08-29T15:02:00.000+09:00

Bumpy roads, potholes resembling large moon craters, poodles right in the middle of the roads looking like mini swimming pools - these are all too familiar sights of the Indian roads crisscrossing the country linking metros, cities, towns, and villages. The harassed and tired look on the faces of the millions of Indians and foreign visitors who have to use such roads, not to speak of some of their broken necks, spondolysis, abandoned vehicles with broken axles will soon be replaced by all smiles and speedy traffic.The good news is that the government has embarked upon a massive investment in national highway development programme (NHDP). THe investment is going to be a whopping Rs22000 crores ie $50 billion for NHDP IV-VII phase covering 7616 kilometres. Speaking at a seminar organised by the Indian National Group, Union Minister of shipping, road transport and highways, TR Balu, said "Construction of tunnels, bridges and flyovers would be one of the significant features of upcoming projects." He further added "Construction of a substantial length of tunnels is required for widening roads passing through mountainous regions, especialy Jammu & Kashmir and several parts of the north eastern states. Improved technology for making tunnels has been adopted in the construction of Konkan Railways and Delhi metro. The use of tunnel boring machine can speed up tunnelling and is one of the latest technologies adopted in India."With the use of new technology the car parking problem faced in all cities can be solved by construction of underground parking space. The minister also said "There is going to be extra pressure on urban road space and this will jack up the demand for parking lots. With the existing buildups in the urban areas, underground parking lots will be a basic necessity." Such projects, though very much overdue, will reduce India's infrastructural bottlenecks and pave the way for becoming a super economic power. The good news calls for celebration and one for the road!

'Pepsi, Coke Or Me'

2006-08-27T23:28:00.000+09:00

In America, your hostess may soon ask you the question 'Pepsi, Coke or water?' - the way health-conscious population is getting averse to the colas. Because of wide prevalence of obesity, people are preferring plain water - fully sterilized and of course free from pesticides.A joke prevalent in the corporate world is about the naughty question a secretary asks her boss after a hectic day - 'Tea , Coffe or me?'. The question is more appropriate in Europe, China and India where tea-drinking is so common that it is an integral part of many social functions. In USA the cola-guzzling being high, the question could have been altered to 'Pepsi, Coke or me?' with no pun intended.
There has been, however, a coup of sorts. Quitely, bottled water sales have been shooting through the roof while the sales of colas have lost their steam.As per estimate of US-based Earth Policy Institute, global consumption of bottled water rose by 57% between 1999 and 2004 to 154 billion litres. The share of USA is 26 billion litres and of India is 5.1 billion litres. In UK it is estimated by a research agency that the business of bottled water will rise to 2 billion pounds with a volume of 3 billion litres.
Reading the writing on the wall, Tata Tea has acquired 30% shares at $677 million of Glaceau - the brand owners of Fruitwater, Smartwater and Vitaminwater in USA. These are bottled waters enriched with electrolytes and other nutrients. The bottled water market is growing @10% in USA whereas the colas have reported a meagre .2% growth. Tata Tea knows where the Sun is rising and where it is setting.You can bet your bottom dollar - Tata Tea is going to hit the jackpot!

Are Acquisitions And Mergers Good For Steel Industry?

2006-08-25T21:35:00.000+09:00

Ever since the world's second largest steel company Arcelor was taken over by Mittal Steel - already holding the first position, an uneasy calm has descended on the steel industry all over the world. The new production capacity of Mittal Steel-Arcelor will go up to 110 million tonnes – a whopping 10% of the world production.Mr L.N.Mittal has been hogging headlines for not only achieving what was considered almost impossible till recently but also for setting world records in corporate acquisitions. During the last 35 years or so, he has built up a gigantic steel empire starting virtually from scratch. His modus operandi has been to take over sick units at hard-bargained prices and then turn them around. In the process he has turned out to be the world's largest steel manufacturer as well as its third and India's richest person. An exuberant Mittal had only these few words for those following his success story - "Work hard and you will succeed".
Such global acquisitions and mergers have already put several well-established companies on alert. Alarm bells are ringing lest this "L.N.Mittal" phenomenon devours them. The China Iron and Steel Association has urged that smaller companies should make bolder moves to consolidate into larger groups. They are also opposed to any foreigner to own the steel industry - the most basic among all industries.
In India, even when Mittal Steel has no foothold so far, it has already set a cat among pigeons by announcing ambivalently that it would be setting a 12-million tonnes plant in one of the two neighbouring states of Jharkhand or Orissa. Tatas - the most revered corporate house in India and the first to set up the first steel plant about a century ago, had to raise their private ownership as a step to foil such acquisition attempts.
Such acquisitions, however, cause more harm than good. One conclusion emerges inescapably that Mittals will be the ones to call the shots – be it for raw materials sourcing and pricing of finished steel products with 10% of world steel production under their thumb. Monopoly will revisit the steel industry – thanks to globalization, mergers and acquisitions!Besides, each company has got its own culture, nationalism and sense of social responsibility whereas the driving force behind such take-overs are merely profits for the owners and the share holders. Consumers rarely get the best deal in monopolistic markets. If such acquisitions go unchecked, all the stake holders - owners, employees, customers and vendors will ultimately develop cold feet towards relationship as well as a sense of belonging which takes years to build up. But what is globalization minus acquisitions and mergers? You can't have the cake and eat it too!

Is The Small Car Project A Big Dream?

2006-08-24T15:30:00.000+09:00

For several reasons, all eyes are now set on the small car project of Tatas coming up at Singur, West Bengal. Firstly, the project envisages production of small cars to be priced below Rupees one lakh ($2200 approximately!). Secondly, Tatas who already enjoy brand images for cars and trucks being manufactured in Jamshedpur and Pune have ventured to establish manufacturing facilities for the small car in the state of West Bengal. Because of labour unrest and lack of infrastructural facilities, the state in 1980s and 1990s had lost its top rank among the industrialized states of India. But there has been a resurrection of Bengal as claimed by the Marxist-led government. Nevertheless some investors are still shying away from the state.
The project may appear to be a pigmy by American standards but it is dear to Tatas, the people of West Bengal and whole of India. The car manufacturing capacity in numbers, its unbelievable price and the car size – all are really small. Only 200,000 cars will be made from the year 2008 onwards and may reach 500,000 by the year 2012. As of now the car price has been pegged at ‘below Rupees one lakh’. One has to understand the psychology of middle class customers in India to appreciate the compulsion to keep the price below the one lakh barrier. Today every Indian first dreams to become a ‘lakhpati’ (one who is worth more than one lakh) and then a ‘crorepati’ (one who is worth more than ten million rupees or $220000). This is not the first time that such a catchy price tag has been fixed for small cars. As a matter of fact, Sanjay Gandhi – the younger son of late Indira Gandhi was mad about his small car project for which work was started at Gurgaon. Before the project completion, he died and the public sector company Maruti Udyog in collaboration with Japanese Suzuki carried on from where he had left. To begin with, the car price was kept far below one lakh. Maruti cars soon became synonym for cheap, efficient small cars in India. Later other international car manufacturers from USA, Europe and Japan joined the bandwagon to set up joint ventures.
The small car project has made tardy progress so far. The farmers whose land will be acquired are putting stiff resistance. But this is a prestigious project for both West Bengal government as well as Tatas. There is one bigger challenge for Tatas to keep the price tag unchanged. All the input costs are rising particularly of steel and non-ferrous metals. At the same time, Tatas would not like to backtrack as they are trusted for their commitments.
Meanwhile Tatas have announced that they have plans to accommodate about 100 ‘tier-I’ category vendors at the vendor park to be set up on a 300 acre plot at Singur. Sceptics may still doubt about the viability of the project. But going by their track records, Tatas will leave no stone unturned before throwing in the towel so early. Is it not?

'Pepsi Is Safer Than Sea Water'

2006-08-22T15:02:00.000+09:00

Perhaps, it is. But the provocation for making this statement made by a cynic overheard in a crowded bus was provided by the following news report. It said that at least 50,000 people thronged on 19th August, 2006 to the sea near Mahim Creek in Mumbai - the financial capital of India. They drank the sea water which they found had turned 'miraculously' sweet and collected as many bottles as they could. The report also contained the chart of contamination level of potable water as per World Health Organization (WHO) and of sea water on that fateful day.
Potable water
solids chlorides
WHO norm 0-500 0-250
Tap water 0-40 0-12
Sea water at Mahim
880-1650 600-1360
All figures are in parts per million (ppm).
Despite warning given by doctors and government officials, people drank the 'miracle water' and appear to have escaped serious ailments like gastro-enteritis miraculously. Here is a case of blind faith driving thousands into hysteria.
Pepsi sales promotion ads endorsed by celebrities like Shah Rukh Khan aim exactly to whip up such a frenzy by brainwashing the public. The brand ambassador has blurted out defending Pepsi that even human mother's milk contains pesticides. He fails to note that the comparison is not very apt. A baby has no option but to depend upon mother's milk. In India, water, vegetables and fruits contain dangerous levels of pesticides. Nevertheless, how can one do without these things?
The shocking findings of a study at the Columbia University Centre for Children’s Environmental Health, New York concluded – ‘Babies’ DNA can be damaged even before they are born if their mothers breathe polluted air’. The study results will surely be even more alarming for populations in other industrial and urban areas where pollutants are very high compared to Manhattan – a relatively cleaner area. The Hobson's choice is to wage a war against pollution and contamination relentlessly.
Pepsi is a world famous cola company. Whether it is by negligence or laxity of standards, the pesticide level in its colas in India is reportedly much higher than the permissible limit. So, what should one do? Drink Pepsi just as one consumes the other contaminated products or say a flat big 'NO'? You decide.

The Lesser Of Two Evils - Pepsi or Tea?

2006-08-21T12:51:00.000+09:00

In love and war everything is fair; at least Pepsi thinks that way. Driven to the wall with a ban on it slammed in several states of India, Pepsi has fired recently two shots in air for self-defense. The first one was an advertisement claiming that the tea Indians drink has 14.2 ppm residue of pesticide which is 28000 times higher than such residue in Pepsi. The Tea Board of India has described the claim as "totally false". It is a classic case of the pot calling the kettle black. Tea is as old as Indian civilization and is the most favourite drink among Indians. It is processed plant leaf unlike Pepsi whose ingredients are so zealously guarded secret that the formula has been
stored in some unknown vault. Assuming that tea contains dangerous levels of pesticide, it does not absolve Pepsi of the charges already made against it. Moreover, tea is boiled before use whereas colas are taken directly thus reducing the harmful effects.
The second shot has been fired as a signal for ceasefire. Pepsi has announced that it would discourage primary schools from consuming "fun drinks". It is amusing to read what Pepsi Co Chairman Rajeev Bakshi said - "Soft drinks should not be consumed at that age. If schools ban
them, we will not contest them". Good sense has dawned upon Pepsi rather belatedly. What 'fun' they were having in promoting their sales for kids all these years? Alarmed by the obesity and health hazards of school children by their excessive consumption of colas, America has already initiated action 'to pull out these soft drinks from schools'. Please read the comment of Heather on my previous post 'Ban on Pepsi & Coke May Clog FDI?'. So the aversion for colas is spreading fast and they are heading for tougher days to come. Ms Indra Nooyi - an Indian has been made the CEO of Pepsi's global organisation and it has made every Indian proud. However, the rising anti-Pepsi wave is going to be a thorn in her flesh. Is it not?

FDI Dynamics Favour India

2006-08-19T18:23:00.000+09:00

India is already in the international limelight for having achieved the highest economic growth among the free democratic economies. No wonder, the world is keeping a close watch on it as foreign direct investment (FDI) inflow to India is gaining momentum. It has already reached $1.74 billion in the period of April-June of the current year compared to $1.18 billion in the same period last year. This amounts to a 47% growth of FDI. No one knows better than India's Commerce and Industry Minister, Kamal Nath who reeled out the impressive statistics. His ministry had aired optimism earlier that FDI inflow may touch the elusive double digit figure of $10 billions during the year 2006-07 in May 2006 and the government had provisionally estimated that India received over $8 billion of FDI inflows in 2005-06 which was over 60 per cent higher than the figures of 2004-05.
Coming as it did just when the thick fog over the ban on Pepsi and Coca-Cola has not cleared yet, it shows that no one is too deeply worried about FDI drying up from USA as a fallout of the controversy. Why should it affect India so seriously? The following details will remove such doubts from the mind.
1. Top 10 countries investing in India:(i) Mauritius (ii) USA (iii) Japan (iv) Netherlands (v) UK (vi) Germany (vii) Singapore (viii) France (ix) South Korea (x) Switzerland
2. Other countries joining the big league:(i) West Indies (ii) South Africa (iii) Nevis (iv) Iceland
3. Favourite sectors of investors:(i) Electronic equipment (ii) telecom (iii) Transport (iv) Fuel (v) Food Processing (vi) Drugs and Pharmaceutical (vii) Metallurgy
4. MNCs waiting in the wings for investing:(i) Nissan (ii) Suzuki (iii) General Motors (iv) Honda (v) Mitsubishi (vi) Citi Consumers (viii) Flextronics (ix) Global Communication Service Holding. While the first four are for automobile projects, the rest is for petrochemicals, real estate etc.
In such a scenario, things are really looking bright for India and for now, all roads lead to Rome! Pepsi and Coca-Cola may not be able to turn the tide. What do you say?

Ban On Pepsi & Coke May Clog FDI?

2006-08-17T15:29:00.000+09:00

The battle of nerves between the cola companies Pepsi & Coco-Cola and the Indian government arising out of the ban already imposed on them in six states is threatening to blow into a full political war. With hardening of stands from both the fighting sides, the situation is about to go out of hand. While six states have already banned sale of colas in schools, colleges and hospitals following publication of a report of their containing pesticides beyond permissible limits, the state of Kerala went one step further to ban their production as well as sales. The cola companies, in the mean time, are on the offensive claiming through advertisement blitz that their qualities are as good as their European products.
At stake is the FDI inflow to India. The imbroglio could not have been more ill-timed. A US trade commission led by Mr Franklin L. Levin is scheduled to visit India during November, 2006. The delegation is going to be the biggest US bilateral trade mission ever sent to any country. The team will participate in the Mumbai Summit on November 29-30. Thereafter, the team has the option to branch off to Bangalore, Kolkata, Chennai, Hyderabad, Mumbai and Delhi for business match-making.
However a statement given by Mr Levin that the ban by state governments on the cola companies could affect investment is likely to pour cold water on the trade Mission’s visit and add fuel to the fire of raging controversy. Just as US should not browbeat India to ignore the seriousness of the complaint of pesticide contamination in colas, the states cannot carry on summary trials without proper investigation. Only recently Ford Motors had to order recall 6.5 million cars after persistent customers’ complaints backed by federal investigation established a serious fire risk in the cars. Similarly a thorough investigation by independent and impartial experts should establish the genuineness or otherwise of the complaints against the cola companies.
The Kerala government’s jumping into the fray and banning production as well as sales without any proper investigation is just like severing the head for curing headache. The announcement through ads by Pepsi’s brand ambassador – a popular film star that he would go to USA to drink Pepsi if it is banned in India is equally preposterous. Even the news report in Washington Post that Americans drink over 100 times more colas than Indians is not going to help matters. That Indians are not very much dependent on the colas has been proved by the most unexpected gain made by tea after the ban was imposed.
If current controversy is going to affect FDI as a small section of analysts and observers believe, the trade mission may fizzle out to the detriment of interests of both India and USA. India needs infusion of foreign investments for massive infrastructural development and other key industrial growths. USA needs India to be its economic partner in global strategic planning as the 21st century unfolds and power equations shift to Asia.
For the mission to succeed both USA and India must work together closely. The serious complaints against the cola companies should be thoroughly investigated. Clean chit should be given to the companies if complaints are found to be baseless. Otherwise stringent action should be taken against them for their laxity. Just because Pepsi and Coca-Cola are two giants in USA and have lot of clout with the government, their lapses cannot be condoned lest it might affect FDI flow. Two great democratic nations, after all, have to respect the public opinions of their own countrymen. Is it not?

No Pepsi, No Coke – It’s No Joke!

2006-08-10T19:36:00.000+09:00

Instead of the question ‘What is wrong with Pepsi and Coke’, one could as well ask ‘What is right with Pepsi and Coke’. Going by the public ire which is spreading like wild fire against the two giant cola companies symbolizing America, such questions have become very important and relevant.The latest trouble for the cola companies was triggered by a report by Centre for Science and Environment made public revealing that their soft drinks contained pesticides more than the permissible limits. Reacting sharply, several state governments have imposed ban on the sales in schools, colleges and hospitals. The Kerala government, however, has stolen the thunder by packing the American companies lock, stock and barrel; their production and distribution licenses have been revoked.
This is not the first time that Pepsi and Coca Cola are in the soup. Way back in the year 1977, George Fernandes had raised a battle cry against them and at that point of time America-bashing became fashionable as the nationalistic sentiment appealed to most. Three years back, a full Joint Parliamentary Committee backed by experts had found merit in the complaint made against the same two giants for having pesticide residues. No lesson seems to have been learnt by the law enforcement agencies, the cola companies and the public at large.
Why the anti-cola stir has spread so quickly through the length and breadth of the country can be appreciated if one delves into Indian psyche. After two centuries of foreign rule, nationalism is still pervasive though it has got subdued in the circumstances of liberalization turning nations to a global village. No other thing has made the masses more conscious of this radical change in India as Pepsi and Coke have done. In many villages, drinking water is still the scarcest thing and villagers have to trudge miles to get it. But one can get colas there for the asking.
Indians are now waking up to the fact that Eastern habits and practices as followed by their ancestors holds the secrets to good health and instant junk-foods as well as colas are harmful for the bodies. Swami Ramdeoji, who has been advocating openly and loudly to ban aerated drinks even before the present battle-lines were drawn, has become a household name for millions of his followers. So CSE got a pick-a-pack from the renowned guru and the nationalism fervor has caught the imagination of the masses.
Already full page advertisements have been put by the cola companies to tell the public that there is nothing wrong with the quality of their products. The film star Sharukh Khan who endorses Pepsi in their ads has threatened to go to USA to drink Pepsi if it is banned in India. What is disgusting is his counterclaim in asking ‘Does not water or mother’s milk also contain such harmful chemicals’. That does not answer why one should buy this costly foreign poison in the first place!
Some have taken refuge behind the argument that this cola-bashing may affect FDI inflows. Then should we allow the cola companies to play havoc with the health of masses just because investors may shy away from India? We do not have to appease USA on this score.

Never Look A Gift Horse In The Mouth

2006-08-05T19:37:00.000+09:00

Gifts carry unspoken words of love, affection and admiration for the recipients and serve as their best depository. Whether the occasion is a birthday, wedding ceremony or success in examination, it gets accentuated when accompanied with gifts. Over the years and in keeping with the changing materialistic world, gifts are increasingly becoming objects of ego, ostentation and quid-pro-quos. Gone are the days when gifts used to serve as means for emotional exchanges. Alas! parents these days have to get birthday presents for their children as costly and trendy as their friends receive on similar occasions . Wives do not get satisfied anymore by bouquets of flowers on their wedding anniversaries and would howl down such custom now as outdated.
It has dawned on people that gift packaging has become more important than the contents within. If it is a wedding ceremony or a birthday or felicitation party, the presents just pile up in public gaze without giving any chance to recipients to find out what lies within. So, more attractive the packaging, the more impressive becomes the present! Some take this approach to the extreme. Giant-size gifts do get noticed easily, but recipients are cramped by space. Just as one should not look at gift horse in the mouth, a thoughtless gift can cause avoidable rifts. Therefore, a little bit of planning and thought for the appropriate gift can save a lot of embarrassment and make the occasion pleasant and memorable.