Indian Economy - News & Updates - Archive

[Bushroda]

Tatas plan to make aircraft components
Fly South Aviation News, South Africa

MUMBAI: Tata Group, which started India's first airline in the 1930s, is understood to be planning a foray into manufacture of aircraft components for exports.

The group is acquiring land at a Special Economic Zone in Nagpur for setting up the component manufacturing plant. Incidentally, US aircraft maker Boeing too is setting up a Maintenance, Repair and Overhaul (MRO) facility at the Nagpur SEZ.

Tata Motors ED (finance) Praveen Kadle said that the company has plans for the aerospace sector but maintained that nothing has been finalised as yet.

Maharashtra Airport Development Company vice chairman and MD RC Sinha, whose firm is in charge of putting up the Nagpur SEZ project, said that a Tata company is taking up the land for aircraft component business.

The Tata Group had started Tata Airlines in 1932 and it was taken over by the government that turned it into Air India. The infrastructure work on the Nagpur SEZ is progressing satisfactorily and major work would be completed by December next year, Sinha said.

 

[Bushroda]

CII CEOs mission to China for businesses in Steel
2007-08-03 19:10:49
Source : Moneycontrol.com

A 9-member delegation of Confederation of Indian Industry (CII) headed by Mr. Sanjay Budhia, Chairman of CII National Committee on Trade Policy and Managing Director of Patton International Ltd, is on a CEO Level Business visit to China. The delegation will visit Beijing, Nanjing and Shanghai from 31st July to 3 August 2007. The objectives of the mission are to interact with Chinese companies to explore business opportunities for Indian companies, to identify new emerging technologies and possible areas of cooperation and to interact with government officials to support the ongoing India-China Strategic Cooperative partnership. The delegation is supported by the Embassy of India in Beijing and the Indian Consulate in Shanghai.

The members of the delegation comprise Mr. Arvind Jain, MD, Bhilai Engineering Corporation Ltd; Mr. Harsh K Jha, MD, Tata Metaliks Ltd.; Mr. Sandipan Chakravortty, Deputy Chairman of CII (ER) and MD of Tata Ryerson Ltd.; Mr. Ramavtar Agarwal, Vice President (Steel), Texmaco Ltd.; Mr. Bhusen Raina, Immediate Past Chairman of CII (ER) and MD of The Tinplate Co. of India Ltd.; Mr. Sumit Goyal, Vice President, Patton International Ltd.; Mr. Sunil Misra, Regional Director, CII (ER) and Mr. Madhav Sharma, Director & Chief Representative, CII (China).

The CEO Mission is focusing on steel trade between the two countries. The mission visited the Nanjing Iron & Steel Co Ltd and will have several interactions with Steel companies like Jiangsu Dongsheng Metal Material Co., Ltd; Nanjing Aibang Iron and Steel Co., Ltd; Jiangsu Federation of Industry and Commerce Steel Commerce Chamber; Meishan Steel and Iron Co., Ltd; Jiangsu Shagang Steel Group Co., Ltd; Jiangsu Overseas Group Co., Ltd. In Shanghai, the delegation will visit the Boa Steel Plant.

While comparisons of the Indian and Chinese economic performances and their shares in world market in various sectors continue unabated, close economic cooperation between the two countries in recent years represents a significant development. The CII CEO's Delegation to China will certainly endeavor to further promote the trade and economic cooperation between the two countries.

India-China bilateral trade reached about US$ 25 billion in 2006. The trade missions have played an important role in achieving the trade targets set by the two governments. The business community of India is keen to identify the key opportunities to enhance business ties with the Chinese economy. In past few years, the networking between the businesses of the two countries has led to rapid increase in bilateral trade. According to a CII study, in view of India's dynamic comparative advantage, special focus needs to be given to investments and trade in services and knowledge-based sectors, besides traditional manufacturing. CII Survey in 2006 also pointed out that building Brand India in China is very important to boost India's export to China. The CEO's Mission to China is a major step in achieving that objective.

 

[Bushroda]

CEOs for synergy between B-schools, industry
Press Trust of India / Noida
August 04, 2007

Top executives of leading corporates such as Reliance Industries, HCL, Parsvnath and UK Paints have suggested forging links between business schools and industry to leverage India into an economic super power in the next two decades.

"Emphasis should be laid on all round development of students in today's world of hardcore commercialisation. The aim of B-Schools should be creation of total human beings," Pradeep Bhagat, director, UK Paints India, said at an HR summit organised by B-School Amity International.

He added that a comprehensive development alone could ensure the success of the future managers and executives in present competitive world.

Industry guides and mentors who helped the final year MBA students in completing summer training were felicitated with 'Academic-Industry Interface Award' followed by cultural performances by the students.

Industry leaders felt the concept of the Industry-academia interaction was an interesting one as the economy is on a high growth path and there is no dearth of jobs in the country.

Arunava Guha, VP, Reliance Industries, said: "Such events are the need of the day. Industries and academia have to work hand in hand, as either cannot survive without the other." The meet highlighted that it is not necessary that a person with a degree in business management would also be a good manager. Years of toiling around people and being in tune with customers, co-workers and other managers goes into the making of an effective and "good" manager.

 

[Bushroda]

A Monsoon Romance?
Indian farming must think beyond mere seasonal gambles
Lola Nayar

Chaff And The Grain

India is banking on 4% agriculture growth for achieving double-digit GDP growth

Public investments in agriculture have risen to Rs 13,200 cr in 2005-06 from Rs 7,000 cr in 2000-01. But its share in planned expenditure has come down to below 2%.

Production has gone up wherever high-yielding crop varieties have been adopted

Not much progress has been made on irrigation infrastructure as most farmers are still dependent on monsoons which can make or mar production

Policy and management fatigue are attributed to farm crisis

***

First, the good news. After over a decade, India is likely to witness three consecutive years of positive growth in the farm sector, if the weather gods continue to be benevolent this year. Until now, despite a not-so-good July month, the summer monsoon, which accounts for four-fifths of annual rainfall, has been 4 per cent higher than normal. It seems agriculture is on a revival path, and Union finance minister P. Chidambaram's dream of a double-digit GDP growth may soon become a reality.

Although experts don't wish to speculate on the impact of the 30 per cent shortfall in rainfall during the week ended July 25, they say that an overall one per cent increase can result in 0.21 per cent growth in agriculture, provided other factors remain favourable. If true, agriculture can grow by over 3 per cent this year, instead of the 2.5 per cent estimated by the prime minister's economic advisory council (EAC). Even the 2006-07 GDP growth is expected to be pegged higher than 9.4 per cent with a revision in farm production estimate.

Both Chidambaram and PM Manmohan Singh have often stressed in the recent past that for India to achieve double-digit growth, it is important that the agriculture sector clocks 4 per cent annual growth. And that the manufacturing and services sectors keep growing at the current frenetic pace. If monsoons are good next year too, despite the government's current objective to cool down the overheated economy, a 10 per cent growth is in the realm of possibility.

"The recent progress is largely because of a revival in investments in irrigation and rural infrastructure as well as credit flow to the farm sector," notes M.S. Swaminathan, chairman, National Commission on Farmers. Prof Ramesh Chand of the National Centre for Agricultural Economics and Policy Research points to the quantum jump in public investments in agriculture—up from Rs 7,000 crore in 2000-01 to Rs 13,200 crore in 2005-06. Overall, while Rs 60,000 crore was allocated for agriculture in the 10th plan, the figure is being hiked to Rs 1,33,000 crore in the 11th plan.

Mangala Rai, director general, Indian Council of Agricultural Research, feels there is another factor that has fuelled the current growth phase. He thinks that wherever better crop varieties have been promoted, yields have increased sharply. In the case of wheat, farmers in Punjab have double the productivity levels compared to their counterparts in Uttar Pradesh and Bihar. Similarly, Andhra Pradesh farmers have higher yields of pulses and chickpea, which normally grow better in the north.

Despite this rosy scenario, experts feel this is just a short-term phase. For instance, Chand stresses that "agriculture distress cannot be stemmed with two or three years of investments and growth". Cautions Swaminathan: "We can't be complacent since over 60 per cent of our cultivated area is still rainfed.

We must accelerate progress in water-harvesting and efficient use." These experts think India has to evolve a long-term vision to combat the existing agriculture crisis.

India is not on firm ground when it comes to ensuring food security; in fact, foodgrain production has stagnated at 209-213 million tonnes in the past several years, with sharp dips during years of poor monsoons. (This year, the estimates have been raised by 4 million tonnes to 216 million tonnes.) In addition, the share of agriculture has declined to 18 per cent of the GDP even as it continues to sustain 58 per cent population. "Therefore, there is no time to relax or rejoice," contends Swaminathan.

Even the current wave of positive growth is a sort of a misnomer when looked over a longer time period. For example, the overall average annual growth rate is short of the targets set under the 10th Plan. ICAR's Rai adds that while the average annual growth between 1996-97 and 2003-04 has been around 2.7 per cent, there has actually been a negative growth of 0.3 per cent in monetary terms. This implies that farmers are earning much less than what they were in the 1980s and early 1990s.

Critics feel the negative growth in economic terms is due to a "policy fatigue" that prevent decision-makers "from taking bold steps". The government doesn't look at agriculture in commercial terms, and sees the farmers as mere producers, not also as rural consumers. "In such circumstances, who will invest in farm sector," asks Rai. Trends in the past decade indicate farming has become unviable.

This is clearly proved by the scores of debt-trapped farmers, who continue to commit suicides every week, particularly in relatively prosperous states like Maharashtra and Andhra Pradesh. Last week, in keeping with the government objective of ensuring inclusive growth and preventing suicides, the prime minister's office held parleys with states to ensure greater focus on agriculture.

G.K. Chadha, a member of the EAC, looks at growth with a sense of optimism. "But I feel investments need to be pushed further as we are not able to generate enough rural employment, improve incomes, or eradicate rural poverty," he adds. For this to happen, investment—both public and private—have to increase further. Experts say that while public investments have gone up in quantitative terms, they have declined from over 4 per cent of budgetary allocations in 1980-81 to under 2 per cent this year.

For improving incomes of the small and marginal farmers, president of Indian Society of Agricultural Economics S.S Dohl moots setting up of environment-friendly industries in rural areas, which employ 70-80 per cent local workers. "There must be a pull factor for marginal farmers who can work in these industries, and also do part-time work on their farms," he says. Adds Chadha: "Although production is beginning to match the shift in consumption patterns, India needs to take a quantum jump from the current technology fatigue and push for newer crop varieties."

Then there is the question of "management fatigue" among the decision-makers. S.S. Acharya of the Jaipur-based Institute of Development Studies points to some recent blunders. One of them related to the government's move to import one million tonnes of wheat. As the tenders to import wheat at $260 per tonne were kept in abeyance, India is faced with prices of over $300 per tonne. "We are a big player in the global market and should have our own forecasting mechanism. There are people who have interest in our decisions going wrong," warns Acharya.

So, while the government keeps making such mistakes, it keeps pinning its hopes on the rain gods. But Rai thinks India needs to be prepared for the vagaries of the monsoons and climatic changes.He adds that the country has witnessed 11 of its hottest years in last 12 years. Chadha's last words shouldn't be forgotten too; he says Indian agriculture "is still a gamble on the monsoons".

 

[Bushroda]

Avoid infrastructure funds if you can
Saturday, August 04, 2007 15:29 IST

Here is one opportunity everyone’s sure about — the infrastructure sector. Investors are pouring money into infrastructure stocks and funds. The logic is very simple. India is a growing economy and there is huge demand for infrastructure.

So, these companies are likely to see exemplary growth. All the same, those investing in this sector may be exposing themselves to high risk. It’s time for stock-taking.

We’ll limit ourselves to answering just two questions: a) should be invested in infrastructure funds, and b) What should be the allocation.

These days, it is not uncommon to meet people who have put over 20% of their portfolios into dedicated infrastructure funds. Add the infrastructure component in the diversified equity funds and what you have is an allocation well in excess of that (may be as high as 35%).

Well, even if you are an investor who has a high risk appetite, this kind of an allocation may be stretching it too far.

Here are some points to be kept in mind when evaluating the prospects of the infrastructure sector:

*There is indeed a tremendous growth opportunity. However, will this growth be profitable? Given that competition is already very intense, profitability will be a big issue. Ultimately, stock prices track earnings growth, not sales growth.

*With more multinational engineering and construction companies coming to India, the competition is likely to intensify further. Profit margins in India are higher than the international average; there is no guarantee that margins in India will not move to the international average. If this were to happen, profitability will be hit.

*With demand growing so rapidly, and companies stretching themselves to grow, execution risks arise. Any failure on the execution front (lapse on recruitment, quality related issues, delay in execution) could have significant monetary and non-monetary consequences for the company. For some reason, investors are ignoring this risk completely.

*From a stock market perspective, you need to evaluate how much of the future growth and the potential risks are factored into the stock price. Only if the risk-return ratio is favourable should you consider an investment. If you were to go by this criterion, not many stocks would find favour.
This brings us to a critical point — why restrict your fund manager to investing only in infrastructure stocks?

If you have selected a good asset management company with a smart fund management team, give them the flexibility to invest the monies across sectors. Of course, if they find something attractive in the infrastructure sector, as per their criteria, they will own it for you.

Our recommendation, therefore, is to avoid infrastructure funds. If, however, you have a huge appetite for risk, may be you should consider having 5-10% of your monies in such funds (from reliable AMCs).

Sector funds have dominated the performance charts over the last one year. Infrastructure funds grab the maximum number of places in this listing. As an investor, it is natural for one to consider investing in sector funds and in particular infrastructure funds.

But as a smart investor, it is important to realise that if you are looking at building long-term wealth without taking undue risk, sector funds are best avoided. But, if you still wish to own them, ensure they account for no more than 5-10% of your portfolio.

 

[Bushroda]

'Time' Brings out Special Cover on Booming India

New Delhi, Aug 4: Time magazine has come out with a special cover to mark the 60th anniversary of India's independence, noting that the world's largest democracy is 'living up to the dreams of 1947' when it got freedom.

The issue has articles that look at the country's middle-class, religion, politics and the transformation of its economy, besides a write-up profiling the conflicts, trends and turning points that shaped modern India.

In an article, noted writer William Dalrymple, the author of 'The Last Mughal: The Fall of a Dynasty, Delhi 1857', says India's rise is not a 'miraculous novelty' as depicted by the Western media and that it is a return to traditional global trade patterns.

He argues that 'the idea that India is a poor country is a relatively recent one' as 'historically, South Asia was always famous as the richest region of the globe'.

The magazine, in its cover story 'India Charges Ahead', notes that the country faces challenges the size of an elephant but the world's largest democracy is living up to the dreams of 1947.

"Twenty years ago the rest of the world saw India as a pauper. Now it is just as famous for its software engineers, Bollywood movie stars, literary giants and steel magnates," one article says.
______________________________________________________________________________

I've covered all the articles from the TIME Magazine's current issue on Page#58(Posts# 574, 575, 576, 577, 578 & 579)

 

[Neo]

Indian PM warns agriculture is in crisis ​

BANGALORE, India: Prime Minister Manmohan Singh warned on Friday against complacency over India’s booming economy, saying the dividends of growth are yet to trickle down to the rural poor and farmers are in crisis.

Singh, whose party came to power in 2004 on the promise of improving rural lives, is presiding over an economy that is growing at around nine percent, the fastest after China.

The investment and savings rate is as high as 35 percent of national economic output, Singh said at a meeting of his Congress party in this southern

Indian city, the hub of a $50-billion IT industry at the vanguard of the country’s economic resurgence.

“But we cannot be complacent till the growth becomes inclusive and socio-economic development benefits more than half the population, especially in rural areas,” Singh said.

India’s rain-dependent agriculture, which contributes about a fifth of economic output but is a direct or indirect source of livelihood for two-thirds of its billion-plus population, is growing at less than a quarter the pace of the overall economy.

Annual per capita food grain production declined from 207 kilograms (455 pounds) in 1995 to 186 kilos last year. The rate of agricultural growth fell from five per cent in the mid-1980s to less than two percent in the past five years.

India, the world’s second-largest wheat producer, exported no wheat last year after shortages forced it to import the commodity for the first time in six years.

Despite the Indian economy growing at a sizzling pace, thousands of debt-ridden farmers have committed suicide after crop failures.

“Agriculture in many parts of the country is in a state of crisis,” said Singh, an economist who in 1991 introduced reforms that ended four decades of socialist-style insulation by opening the doors to foreign investors.

“The fact that farmers are compelled to resort to suicides is a matter of deep concern for all,” he said.

In May, Singh announced a six billion dollar package to try and help poor farmers.

The funds for investment in technology and infrastructure to bring crops to market more efficiently will be made available to India’s 29 states over a four-year period.

Social activists say the suicide rate among poor farmers in six of India’s 29 states has hit a 10-year high despite a Rs37.5-billion ($835-million) relief package unveiled by Singh last year.

On Friday, the premier pledged to improve living standards in the countryside by building state-of-the art power plants, roads, telecommunications, housing, healthcare and education facilities.

http://www.thenews.com.pk/daily_detail.asp?id=66876

 

[joey]

Gujarat's agri productivity up Rs 34,000 cr
3 Aug, 2007, 1600 hrs IST, PTI
Economic Times

COIMBATORE: Agricultural production in Gujarat increased four times from Rs 9,000 crore in 2001-02 to Rs 34,000 crore in 2006-07 following the introduction of 'Krishi Mahotsav', the state's Minister of State for Agriculture Dilipkumar Thakor said on Friday.

Considering the plight of farmers in Gujarat, Chief Minister Narendra Modi drew up the Krishi Mahotsav programme to enhance their income. Scientists and officials went to villages and advised farmers on the use of fertilizers, pesticides and pattern of crops, Thakor said.

The initiative proved successful and farmers are a happy lot now due to increased productivity and income from agriculture, horticulture and animal husbandry, Thakor said while interacting with scientists of the Tamil Nadu Agricultural University here.

About 700 scientists and officials visited over 18,600 villages and met nearly one lakh farmers. The Gujarat government wanted to see the income of the farmers doubled in five years, he said.

The main aim was to restructure the system and reframe agriculture policy by strengthening research and links between scientists and farmers and to bring about a change in the attitude of farmers, Thakor said.

Later, talking to reporters, Thakor said Gujarat and its agricultural universities are exploring the possibility of entering into collaborations in various fields of agriculture and horticulture.

***********************

Hear Hear the great commies the peoples government, it has been 30 years since your managing my state and still you have to kill peoples to get land for SEZ. What a irony!

*****************************************************

Pak opens door for Indian ships to enter
4 Aug, 2007, 1400 hrs IST, TNN
Economic Times

NEW DELHI: Indian ships will now be allowed to go into Pakistan, enabling direct movement of goods from Pakistan to India. The two countries have signed a new shipping protocol bringing to an end the 31-year protocol, which allowed goods to be ferried by India only through third-country ships.

The two countries are also discussing a comprehensive visa agreement, which will also take into account business visas. Both have decided to open two bank branches in each country and facilitate cement exports from Pakistan and tea imports from India.

The decisions have been taken as part of the composite dialogue held between the two countries. Addressing a business session organised by Ficci, Pakistan commerce secretary Asif Shah said the new shipping protocol was already in place and there were no legal issues restricting Indian ships from going into Pakistan.

“I don’t know if there are any technical issues left to be sorted out. But legally, Indian ships are now allowed to enter ports in Pakistan,” he said.

The commerce secretary revealed that the two countries were in the process of discussing a visa regime and a comprehensive visa agreement was on the anvil, which would include business visas. “It takes two to tango. If India agrees to the proposals made by Pakistan, there will be a sea change in the visa regime,” he said.

On export of cement to India, Mr Shah said discussions on the required certification process had proved to be fruitful and the first tranche of cement was likely to be exported by August end.

 

[joey]

Moser Baer bags $880mn deal
28 Jul, 2007, 0356 hrs IST, TNN
Economic Times


NEW DELHI: Moser Baer Photo Voltaic (MBPV), a Moser Baer subsidiary, has entered into an eight-year, $880-million agreement with Norway-based REC Group for sourcing multi-crystalline silicon wafers. Silicon wafers go into manufacturing wafer-based solar cells.

MBPV uses multiple technologies, including crystalline silicon, nano-technology and thin film, to make solar cells and modules. It has manufacturing facilities in an SEZ at Greater Noida.

Delivery of wafers under the agreement will start in 2008. “Globally, multicrystalline silicon wafers have a long lead time and supply is short of the rising demand. This contract would help MBVP get an assured supply from a reliable supplier,” said Moser Baer CFO Yogesh Mathur. The contract with REC Group is structured as a take-and-pay contract with pre-determined prices and volumes for the entire contract period.

MBVP would look at a combination of spot-buying, medium to long-term tie-ups and strategic investments to fulfil its silicon wafer needs. It has a strategic sourcing tie-up with Deutsche Solar and a 40% stake in Slovenia-based Solarvalue Proizvodnja d.d. that plans to set up a capacity of 4,400 tonnes of solar grade silicon by 2008-end.

The company recently announced the completion of the first phase of its 80 mw silicon crystalline project — 40 mw is currently up and running — and expects completion of second phase by the end of the current fiscal. “We are looking at expanding capacity from 80 mw by fiscal-end to about 250-300 mw in the next two years,” Mr Mathur said.

The company recently commenced commercial shipment of its solar photovoltaic cells and announced that it has customer orders and MoUs exceeding $100 million.

The global photovoltaic market is expected to grow over six times to $40 billion by 2010.

 

[Bushroda]

Indelible investment trend boldly written in Indian Inc
Martyn Davies and Abdullah Verachia
Sunday Times, South Africa
Aug 05, 2007

India-Africa ties are no longer based on political affinity originating from their common colonial past

A new trend in the global economy is the integration of developing world economies. As trade and investment between emerging-markets grows, so traditional European and North American corporate interests are being displaced.

This is now happening in Africa. The rise of China and India in close pursuit will change the landscape of African economies.

Much is being reported of China’s state-driven uber-competitiveness, but India’s private firms will be the winners in Africa. They may not have the deep pockets of China’s state-owned resource firms, but they are profit-hungry, run by savvy managers and have tried and tested business strategies for emerging markets — India itself being among the world’s biggest.

India Inc is coming to Africa.

Most Indian business across the continent is micro in size and family- owned. This is why most of us can’t name an Indian firm of significant size from KwaZulu-Natal.

Similarly, we don’t know any from Kenya, Tanzania or Uganda either, where second-and third-generation Indians pretty much control the economies of East Africa.

But the new wave of Indian investment to Africa is coming from its aspirant multinationals. Corporate India’s expansion into Africa is replacing the traditional and typically entrepreneurial small trading business model of migrant Indian labour.

India’s traditional corporates are diverse, family-owned and all-powerful in their home economy. Firms such as Tata, Reliance, Mahindra & Mahindra, Ranbaxy and Dr Reddy’s are becoming household brands in developing markets in Africa.

These emerging multinationals are building competitive advantage in the information technology, healthcare, pharmaceuticals, biotechnology and automotive sectors. They all have the advantage of a huge domestic market to leverage for global comparative advantage.

India’s large and growing domestic economy provides a strong resource base from which to expand offshore. Low labour costs, a sizeable domestic consumer market, skilled labour, high levels of education and India’s wealthy international diaspora all contribute to that country’s competitive advantage.

India Inc’s international expansion strategy is primarily focused on emerging markets. Indian firms, often lacking the capital, products and technology to compete head-on with Western multinationals, are venturing into less competitive market spaces in the developing world. This strategy is supported by the Indian government, which is encouraging its firms to focus on non-traditional markets, the emerging-market economies with special emphasis on Africa.

India-Africa ties are no longer based on political affinity originating from their common colonial past . India’s economic diplomacy now leverages old political ties for commercial gain.

But when setting up shop in South Africa, Indian diplomats and entrepreneurs never fail to mention Mahatma Gandhi and how his legacy somehow makes its way into their business plans.

Whereas Chinese state-owned enterprises have little difficulty accessing capital from China’s policy banks, Indian firms’ cost of capital is market- rather than politically- determined. This partly accounts for India’s significantly lower outward stock of foreign direct investment.

To try to rectify this, India’s government is also encouraging its firms to invest in Africa through offering financial incentives.

Although not financially able to compete with the support given to Chinese state-owned enterprises by Beijing, Delhi is focusing its financial aid efforts on a handful of key African economies, mostly in West Africa.

It is doing so through the setting up of financial credit lines to support Indian firms to win contracts on the continent.

It has provided a 200-million credit line for projects under Nepad. Another 250-million credit line has been extended to West Africa through regional grouping Economic Community of West African States (Ecowas) for the Ecowas Bank of Investment and Development.

The drivers of India Inc investing in Africa are:

Vertical integration: Indian firms are acquiring upstream companies to secure resource assets.

Coupled with China, India’s growth is driving global commodities demand with African states satisfying a large part of this demand.

Capturing consumer markets: India’s firms are establishing a wide footprint across Africa selling an array of products from pharmaceutical to automotive to consumer goods.

Energy security: on the back of energy demand and rising oil prices, India’s energy firms are on the international acquisition trail.

Having to import 70% of its oil requirements, India is strategically vulnerable. To meet growing demand for energy, Indian firms have embarked on an aggressive energy investment drive in Africa.

India has invested almost 2-billion in Sudan. ONGC Videsh Ltd is partnering with other Asian companies Petronas (Malaysia) and the Chinese National Oil Company (CNOOC) in Sudan. Western nations’ imposition of sanctions against Sudan has created market gaps that have been filled by Asian firms, Indian included, that have business models less constrained by political forces.

Head-to-head competition in the energy- and oil-rich economies of Angola and Sudan for oil concessions has pushed up the cost of acquisitions. China and India are increasingly exerting greater commercial influence in Africa.

India is emerging as South Africa’s foremost strategic partner in Asia. Japan, Malaysia and China previously held this title but the rapidity at which Indian firms are investing in the local economy has increased India’s importance for the South African economy.

As Indian firms are graduating to multinational status, South Africa has become a preferred investment destination.

Tata is India’s major investor, and it’s no secret that Tata’s chairman Ratan Tata has a hotline to President Thabo Mbeki’s office.

Tata’s axiom of “benevolent capitalism and intensive community involvement” appeals to the South African government’s thinking on development.

There are now 35 Indian companies that have invested about 150-million in South Africa. There is a further US500-million in the investment pipeline.

India will soon become the biggest foreign investor into the economy.

India’s banks are also moving in. State Bank of India already has a presence; ICICI Bank will soon move in, possibly followed by the Bank of Baroda.

The face of Indian business will no longer be small and entrepreneurial, but corporate and multinational. This shift reflects the developmental confidence of India itself.

Leveraging traditional relations built up during the colonial period, India is ideally positioned to take advantage of its durable political ties for commercial positioning on the continent.

India’s emerging multinationals are being welcomed into African economies and do not have to contend with the political baggage of being a former colonial power. Along with China, India’s commercial engagement of the continent will have long-term strategic consequences for the continent — an economic destiny that is no longer framed by European interests .

Davies is chief executive of Emerging Market Focus and heads the Asia Business Centre at the Gordon Institute of Business Science; Verachia is a senior business analyst at Emerging Market Focus.

 

[Bushroda]

Realty sector prices not yet in bubble zone
5 Aug, 2007, 0108 hrs IST, TNN

MUMBAI: The real estate sector is back in news. Only recently, the realty stocks were on a roll with the newly-launched BSE Realty index gaining handsome ground on a daily basis. However, on Friday, as news of Puravankara Projects lowering its price band to generate interest trickled into the market, investors and analysts have started voicing their concerns over the price build-up and bubble in the real estate sector.

Incidentally, the institutional segment of Puravankara Projects was subscribed only a little over 30% till Friday when the issue was initially supposed to close. The price band has been lowered to Rs 400 to Rs 450 from the earlier Rs 500 to Rs 550.

In a recent report on the real estate sector, JP Morgan has said that while correction in certain pockets of the country cannot be ruled out, Indian property rates are not yet in a bubble zone. “Property prices seem to be at risk given concerns about rate hikes and potential oversupply.

A correction in certain micro markets cannot be ruled out. However, our analysis of past property booms suggests that we are still not in a bubble zone, and that a bust is unlikely”, says the 60-page report.

The report also highlights the point that certain markets (NCR/ Bangalore) have already experienced some correction over the past six months even as analysis of previous property booms across the globe suggests that Indian property prices are not yet in a bubble zone. “No property consultants/developers are predicting any across-the-board sell-off scenario”, it adds.

Further, the foreign brokerage feels that the fundamental drivers for the sector are in place and it is all set for a sustained structural growth period. “We forecast the industry to grow from $50 billion in FY07 to $90 billion by FY11, a growth rate of 13% per annum”. It further adds that the demand for real estate is backed by factors like improving demographics, healthy macro environment, growth of the service industry and notification of city development plans.

However, at the same time, the report says that prices in India cannot be termed ‘cheap’. “Clearly, prices in India are not cheap. Rise in prices as per estimates available are near 18-26% CAGR levels in Mumbai and Delhi over the last four years. India is still an emerging economy and periods of such high economic/wage growth stable pricing environment can be argued for”. Also, while comparing with the past, investors must keep in mind that the quality of construction in India has markedly improved so it is difficult to get a reference figure for the same quality product, it adds.

JP Morgan also feels that going ahead the sector will witness some amout of consolidation as “well capitalised property developers are in a position to acquire projects from smaller players at profitable rates and also benefit from reduced competition for land parcels”.

Finally, the financial major has listed players such as DLF and Unitech that are likely to emerge as a proxy Indian real estate sector for investors. Region specific (Mumbai, Bangalore) players are also now coming into the market thereby widening investor choice, it adds.

 

[Bushroda]

New India gets experimental
5 Aug 2007, 0022 hrs IST
Meenakshi Sinha,TNN

Stability, security, permanence - these seem boring and staid words in the present Indian order. With the economy opening up and throwing new jobs into the pipeline, you don't have to be an NRI to make a career shift or work in NGOs seeking a prosperous rural India. Many enterprising individuals at the top of their careers are happily and successfully chucking up stable careers to find new meaning in their lives. Who wants to lumber through a 9 am-5 pm shift, if at all such a thing exists in the private sector any more?

Now, tech wizards, investors, IT and medical professionals are all turning dreamers and visionaries. They are willing to discard the cushioned path to pursue their passions and are even making a radical career switch.

One of the factors driving this change is the booming economy. Noted columnist Rama Bijapurkar, better known as India's market strategy consultant, says flexibility is the buzz word now and has become a valued commodity. Quite a change from the rigid norms and values of the 60s and 70s. ''Today, there's rigidity towards fixed professions like medicine, law and engineering,'' she says. But these aren't the only mantras to success now.

Bijapurkar, a commentator on economic and social change in an evolving, liberalizing India, attributes this change to parents becoming more democratic, what with new opportunities being available to the current generation. With basic roti, kapada and makaan issues being taken care of, they know their kids won't exactly be stranded on the road or be left wanting for the necessities of life. They can therefore afford to experiment with different jobs, she explains.

Though this section comprises merely 20% of the economy, it has seen sky-rocketing remunerations within their small range of options. ''The opening of Indian economy in the 1990s has seen dramatic growth rate in select sectors like IT, high-end and middle-level jobs and BPOs,'' says Praveen Jha, faculty member, Centre for Economic Studies and Planning, JNU. This sea change, he says, has come about due to a sense of restlessness and inadequacy with the current job. ''New opportunities only made the task easier, as people found more job satisfaction with a career switch,'' he says.

As old patterns came under tremendous strain from the new order, sociologists found this a win-win situation in terms of social acceptance. ''Earlier, we were status-seekers, so we stuck to professions like civil services, medicine and engineering. That's no longer the case today,'' says Anand Kumar, professor, sociology, JNU.

In fact, he says, there have been three noticeable changes in urban India. One, the new direction of the economy has created new spaces. Second, the stature attached to select jobs is crumbling, leading to newer possibilities. Third, a spirit of adventure has set in. But the latter is temporary for want of meaningful engagement.

Maybe that's one reason why Michael Lewis, author of best-sellers like Liar's Poker, Moneyball and The New Thing, maintains that progress should be calculated in terms of what it has rolled over or left behind. In the Indian context, it depicts a growing trend towards individuals who have seized new job opportunities to harness their skills in various creative fields.

 

[Bushroda]

Fishermen get credit cards under Swarojgar Yojna
Express News Service

Chandigarh, August 4: The Union Minister of State for Finance, Pawan Kumar Bansal today presented credit cards to 54 fishermen belonging to the minority community of Bapu Dham Colony in a function held at the sector 28 Community Hall.

These Punjab National Bank Swarojgar Yojna Cards will allow fishermen to enhance their existing business by taking a loan upto at least Rs 50,000 under the Swarojgar Yojna Scheme.

Speaking on the occasion, Bansal reiterated the Centre’s committment to reach a larger footprint of account holders in various Nationalised banks. He also laid emphasis on the importance of banking, especially for migrants who leave their homeland in search of work and better living.

Bansal pointed out how repartriating funds back home and saving even small sums of money can have a huge impact on the overall economy of the country and how banks play a pivotal role in sustaining the dream run of the Indian economy at 9 per cent and growing.

B P Chopra, General Manager, Punjab National Bank, emphasised the need of Nationalised Banks to participate in minority related programmes envisaged in the Prime Minister’s 15-point programme. He expressed immense satisfaction at the bank being of help to the 54 fishermen who could now conduct their business with additional infrastructure and a larger footprint.

Arshad Khan, Councillor and Convenor of United Progressive Muslim Front, said this was for the first time in the city that 54 beneficiaries from the minority community were aided financially by a Nationalised bank under this scheme. “The hopes, aspirations, needs and dreams of the 54 fishermen will finally be met. It could well be termed as the beginning of a new era of financial independence and economic prosperity for the poor representatives of the minority community,” said Khan.

 

[Marathaman]

New India gets experimental
5 Aug 2007, 0022 hrs IST
Meenakshi Sinha,TNN

Stability, security, permanence - these seem boring and staid words in the present Indian order. With the economy opening up and throwing new jobs into the pipeline, you don't have to be an NRI to make a career shift or work in NGOs seeking a prosperous rural India. Many enterprising individuals at the top of their careers are happily and successfully chucking up stable careers to find new meaning in their lives. Who wants to lumber through a 9 am-5 pm shift, if at all such a thing exists in the private sector any more?

Now, tech wizards, investors, IT and medical professionals are all turning dreamers and visionaries. They are willing to discard the cushioned path to pursue their passions and are even making a radical career switch.

One of the factors driving this change is the booming economy. Noted columnist Rama Bijapurkar, better known as India's market strategy consultant, says flexibility is the buzz word now and has become a valued commodity. Quite a change from the rigid norms and values of the 60s and 70s. ''Today, there's rigidity towards fixed professions like medicine, law and engineering,'' she says. But these aren't the only mantras to success now.

Bijapurkar, a commentator on economic and social change in an evolving, liberalizing India, attributes this change to parents becoming more democratic, what with new opportunities being available to the current generation. With basic roti, kapada and makaan issues being taken care of, they know their kids won't exactly be stranded on the road or be left wanting for the necessities of life. They can therefore afford to experiment with different jobs, she explains.

Though this section comprises merely 20% of the economy, it has seen sky-rocketing remunerations within their small range of options. ''The opening of Indian economy in the 1990s has seen dramatic growth rate in select sectors like IT, high-end and middle-level jobs and BPOs,'' says Praveen Jha, faculty member, Centre for Economic Studies and Planning, JNU. This sea change, he says, has come about due to a sense of restlessness and inadequacy with the current job. ''New opportunities only made the task easier, as people found more job satisfaction with a career switch,'' he says.

As old patterns came under tremendous strain from the new order, sociologists found this a win-win situation in terms of social acceptance. ''Earlier, we were status-seekers, so we stuck to professions like civil services, medicine and engineering. That's no longer the case today,'' says Anand Kumar, professor, sociology, JNU.

In fact, he says, there have been three noticeable changes in urban India. One, the new direction of the economy has created new spaces. Second, the stature attached to select jobs is crumbling, leading to newer possibilities. Third, a spirit of adventure has set in. But the latter is temporary for want of meaningful engagement.

Maybe that's one reason why Michael Lewis, author of best-sellers like Liar's Poker, Moneyball and The New Thing, maintains that progress should be calculated in terms of what it has rolled over or left behind. In the Indian context, it depicts a growing trend towards individuals who have seized new job opportunities to harness their skills in various creative fields.

This is an excellent article. Very insightful.

 

[Bushroda]

The IT destination
4 Aug, 2007, 1523 hrs IST, TNN

MUMBAI: IT Parks like Rajiv Gandhi IT Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade, Marisoft IT Park at Kalyaninagar, International Convention Centre (ICC), Weik Field IT Park etc are the latest realty development.

Many of India's major software players such as Infosys, Tata Elxsi, TCS, Tech Mahindra, Wipro, Patni, Satyam, Kanbay Software and others have a major presence in Pune. Global majors too, like Accenture, BMC Software, HSBC Global, IBM, Dell, Google, Siemens, Amdocs, Cognizant, and Symantec have a major presence in Pune.

The IT sector in Maharashtra got another shot in the arm recently. MIDC will jointly develop an integrated township with a New Yorkbased realty firm Vornado Reality Trust at Hinjewadi. Vornado will invest $200 million on the township which will be developed over the next five years. Hinjewadi Township Pvt Ltd will be developed jointly by MIDC and Vornado.

The shareholders agreement was signed by Rajiv Jalota, CEO, MIDC, Maharashtra, India and Michael Fascitelli, President, Vornado Realty Trust, USA at New York on the sidelines of Maharashtra Investment Forum's two-day meet.

Mr Shamsu Lalani, Director, Lalani Group, which has recently announced an IT Park project, 'Lalani Quantum', at Bavdhan says, "Pune is today fast emerging as an infotech hub of India. Pune is well known for its educational institutions, universities and its climate and is one of the leading destinations for IT investments. Also, it is in close proximity to the financial capital Mumbai. The availability of huge land in prime locations, as also change in the industrial atmosphere with due importance being accorded to the IT sector in a residential zone, prompted us to start the project. It will have fun and entertainment zones to make it an exciting place of work."

Encompassing an area of around 2-lakh sq.ft, Lalani Quantum is easily accessible from the Mumbai-Pune Expressway as well as the Pune-Bangalore highway. The built-to-suit IT Park is strategically located close to a residential belt so as to ensure a steady stream of human resources.

Engineering graduates from Pune number up to 10,000 engineers in various disciplines every year, especially serving the burgeoning software and IT industry. This ensures abundance of manpower in terms of skilled IT professionals. Also development of a proposed SEZ at Bavdhan will further boost such projects.

Pune is witnessing a gradual transition from industry to an economy driven by IT, ITES. The active involvement of the state government responsible for this transition cannot be overlooked. Government of Maharashtra has decided to develop Mumbai-Pune as IT corridor where all facilities required by the software units with export potential could be made available through co-ordinated efforts from various government/semi- govt agencies. Electronic telephone exchanges with ISDN facilities and network of optical fibre cable are being set up, some of which are already completed and in operation. Dedicated earth stations are available for fast communication.

Mr Lalit Kumar Jain, Chairman, Kumar Builders says, "Residential space is available in and around Pune and more importantly at reasonable rates. An area like Aundh, one of the posh localities in the city, is very close to the Software Technology Park set up at Hinjewadi. Koregaon Park, another plush and cosmopolitan locality is very close to Kharadi Knowledge Park.

Areas having relatively cheaper rates are also available in Pimpri-Chinchwad , Sangvi, Nigdi areas, which are also close to Pune Infotech Park. This ensures that Pune doesn't just grow into another unbalanced industrial sector. The city is moving in the right direction with a fine balance between the residential and industrial sector."

This IT boom has been instrumental in the escalation of real estate prices, which has multiplied manifold in the recent past but has stabilised now (though it still looks realistic compared to other metros and IT hubs.) Despite the price escalation, corporates and individuals are still buying as long as the IT and ITES sector boom continues.

Mr. Prashant Waghmare, City Engineer, PMC, says, "Chief Minister Vilasrao Deshmukh in a recent meeting has made clear his intentions and has pitched for Pune as the IT destination of the State. He said that the IT companies will be coming to Pune and to make the city the next IT destination, it is essential to build the infrastructure that will attract these investments. To meet the demands of this explosive economic growth in Pune, the state is planning to develop a 1,000 MW power plant, which will exclusively serve Pune."

Mr. Varghese Mathews of Ashish Realtors , says, "Pune being the centre of learning, education and research, the easy availability of software engineers is an advantage. Besides Pune's proximity to Mumbai, from where Pune constantly attracts young aspirants due to its economical viabilities, climatic conditions and cultural resources is an added advantage.

"The government has chosen Pune city as a prominent centre for development of IT looking at the industrial growth in and around Pune city and the excellent international standard, educational facilities available in Pune. The Centre for Development of Advanced Computing (C - DAC), which is one of the premier institutes in country in the IT, is also located at Pune."

"Connectivity has played a pivotal role in this makeover," says Mr. Shrikant Nivasarkar, a well-known architect . "Rajiv Gandhi Infotech Park at Hinjewadi is located just 45 minutes drive from Pune airport and is easily accessible. It offers easy access to the commercial capital of the country, Mumbai, via the new Mumbai-Pune Expressway . IT parks at Kharadi and Talawade are too conveniently located to connect with," he adds.

The geographical nature too seems to favour the city in its quest. Every project needs a special environment that imparts tranquillity to the spirit and stimulus to the mind. The natural layout of the land, gently undulating hills on three sides, is being capitalised on, to provide every facility within the park an unparalleled, peacefilled , colourful and a tranquil ambience. The nickname, 'Queen of Deccan' is apt and being tailored to meet the demands of the IT industry.

The stupendous and instantaneous success of the Pune Infotech Park and the demands of the IT industry for more international-level infrastructure close to the park, compelled the state to develop multiple facilities within the city. The presence of leading IT companies like Wipro, Infosys, Geometric, bears testimony to the success of this city as an IT hub.