Indian Economy - News & Updates - Archive

[Neo]

Indian telecom industry revenue up ​

BANGALORE: India’s telecom industry sales exceeded one trillion rupees ($24.76 billion) for the first time in the last business year on the back of an increasing subscriber base, according to a survey on Friday.

Sales reached Rs1.07 trillion in the year ended March, a 22 per cent increase from a year earlier, said the annual survey by Voice and Data, a telecom industry publication. Mobile-phone company revenues grew 56 per cent to Rs561.8 billion while fixed-line sales declined 11 per cent, it said. The number of cellular and fixed-line users rose 46 per cent to 206 million in a country that has become one of the world’s fastest growing telecom markets as economic growth accelerates, reaching 9.4 per cent last year.

With increased connectivity, one in five Indians now has access to a phone, said the survey. Cellular subscribers increased almost 73 per cent to touch 157 million, making up for a 3.3 per cent decline in the number of fixed-line users to less than 50 million. “This is a nation gone mobile,” Prasanto Roy, chief editor of the publication, said in a statement. “The money’s all in mobility. So is the growth.”

A steep decline in the cost of owning a cellular handset and a connection has led to a surge in the use of mobile phones in the nation of 1.1 billion people. In the last financial year, India added more mobile-phone users per month than China. An average 5.5 million cellular lines were sold every month.

http://www.thenews.com.pk/daily_detail.asp?id=63434

 

[Neo]

Indian inflation rises​

NEW DELHI, July 6: India’s inflation rate jumped by a surprise tenth of a percentage point, snapping 10 straight weeks of decline, but remained at a 14-month low, official data showed on Friday.

Inflation rose to 4.13pc for the week ended June 23, on the back of higher food costs, from 4.03pc a week earlier, but was lower than the 4.84pc registered a year ago, according to the wholesale price index, India’s closely watched cost-of-living monitor.

This week’s figure, which defied analysts’ forecasts that it would remain flat, was still comfortably within the central bank’s medium-term inflation target of 4.0 to 4.5pc and well below its goal of close to five per cent for the current financial year to March 2008.

Economists have said the central bank will be closely watching the inflation pattern ahead of its next policy review on July 31, but they expect it to leave interest rates on hold.—AFP

http://www.dawn.com/2007/07/07/ebr11.htm

 

[Bushroda]

Graduates celebrate India's clout
They recall how technology institute prepared many for their roles in America

Tom Abate, Chronicle Staff Writer
Saturday, July 7, 2007

Several thousand graduates of India's elite university system gathered at the Santa Clara Convention Center Friday for an event that celebrated the growing economic and political clout of that nation's expatriates and touched on issues stemming from the increasing globalization of talent and innovation.

The conference, which ends Sunday, brings together graduates of the Indian Institute of Technology. This network of technology schools, founded in the 1950s shortly after India achieved independence, has maintained its elite status by admitting just a few thousand students each year based on a competitive, nationwide exam.

Rajat Gupta, a senior partner in the McKinsey & Co. consulting firm, and Dilip Venkatachari, who runs Google's mobile products division, described IIT as a university system that has graduated about 100,000 people in the past half century. About 25,000, like themselves, eventually immigrated to America and climbed the corporate and entrepreneurial ladders.

Opening the event, Gupta recalled how this global gathering started five years ago with a meeting of 25 alumni at Stanford. "From those humble beginnings it is gratifying to have nearly 4,000 IITians gathered here in such a short time," Gupta said.

To the extent this was a coming-out party for the Indian American lobby, its impact was somewhat tarnished by the last-minute decision of presidential candidate Hillary Clinton -- originally due to appear in person -- to address the group by satellite instead. During her 15-minute remarks, Clinton said she favors globalization and immigration, but suggested that Americans are getting short shrift from trends like outsourcing and the ever-widening trade deficit.

"Americans are concerned about outsourcing and I think they're right to be," said Clinton, who argued for strengthening the education system to get more people, particularly women and minorities, into fields like engineering. At the same time, Clinton said, she favors the H-1B program that allows high-tech companies to hire college-educated foreigners and would support an increase in the number that U.S. firms are allowed to hire.

The politics of immigration surfaced again in an afternoon news conference when reporters asked Indian American business and academic leaders to react to the congressional deadlock over immigration.

"The day this country limits the reasonably free flow of skilled immigrants is the day we start going downhill," said Pradeep Khosla, dean of the college of engineering at Carnegie Mellon University.

General Electric chief executive Jeffrey Immelt discussed the promise and perils of globalization -- and also played to the crowd. "I'm here today because I am a big consumer of the product, which is you," said Immelt, noting that GE employs about 1,500 graduates of the prestigious system. "Thirty-five of the top 600 people in GE are IIT grads."

Arguing that "business in the 21st century is really the intersection between globalization and technology," Immelt spoke about the strength of the Indian economy and took a swipe at the political process. "The economy has now gotten to a point in India where the government can't screw it up," he said to applause.

He also acknowledged the controversy that surrounds the growing integration of world economies. "I'm a globalist, you're a globalist," Immelt told his audience, saying the real question is whether the process would be slowed or stopped by political backlash.

"If you put globalization up for a vote in the U.S., it would lose 60-40," he said, attributing this margin in part to "misinformation" but also because "the bottom 25 percent of the U.S. has suffered from a wealth standpoint."

Immelt posed this challenge for his audience: "Can the standard of living of Indians grow one hundred-fold, which should be your goal, without the standard of living of Americans going down?"

 

[Bushroda]

Growth self-accelerating, says Reddy
BS Reporter / Mumbai July 3, 2007

Yaga Venugopal Reddy, Governor, Reserve Bank of India, said there is tangible evidence of self-accelerating growth of the Indian economy.

"From an annual average growth rate of 3.5% during 1950 to 1980, the growth rate of the Indian economy accelerated to around 6% in the 1980s and 1990s. In the last four years (2003-04 to 2006-07), the Indian economy grew by 8.6%. In 2005-06 and 2006-07, it had grown at a higher rate of 9% and 9.4%, respectively," Reddy said while addressing the Central Bank of the Russian Federation on Monday.

Reddy added: "An important characteristic of the high growth phase of over a quarter of century is resilience to shocks and considerable amount of stability. We have witnessed one serious balance of payments crisis triggered largely by the Gulf war in the early 1990s. Credible macroeconomic structural and stabilization programme was undertaken in the wake of the crisis. The Indian economy in later years could successfully avoid any adverse contagion impact of shocks from the East Asian crisis, sanction like situation in post-Pokhran scenario, and border conflict during May-June 1999. Seen in this context, this robust macroeconomic performance, in the face of recent oil as well as food shocks, demonstrates the vibrance and resilience of the Indian economy."

According to the speech released by the RBI on its website today, Reddy also said there were signs of deceleration of credit growth recently.

"The acceleration of growth in the real estate sector has been reflected in the upward shift in the growth trajectory of credit extended by commercial banks, which in the past three years has been unprecedented in the history of the Indian economy. There has been some sign of deceleration in the recent period," he said.

Reddy repeated that the central bank expected economic growth of 8.5% in the fiscal year ending March 31, 2008, and wanted to contain inflation close to 5%.

Reddy also reiterated the stand of gradual reforms in the financial sector. "In view of the proven success of our overall approach to reform over the last fifteen years, there is considerable merit in pursuing the gradualist, participative and harmonious approach towards further reforms in financial and external sectors. Since it is generally accepted that financial and external sectors in India are reasonably strong and resilient, high priority is being accorded for further reforms in the fiscal sector, agriculture, physical infrastructure, especially in power and urban areas, and delivery of public services such as water, health and education.

"Progress in these sectors will help, over the medium term, enhance competitiveness and accelerate reforms in financial and external sectors, in a harmonious and non-disruptive manner, thus, reinforcing self -accelerating growth with assured stability."

 

[Bushroda]

SBI's $1 bn infra fund in two months
BS Reporter / Mumbai July 8, 2007

The country’s largest lender, State Bank of India (SBI), has decided to join hands with foreign funds to set up a $1 billion infrastructure fund. It expects to launch the fund in the next two months. The money would be raised both in the overseas as well as domestic markets.

An estimated sum of $475 billion is needed for infrastructure development in the next five years to support the growth momentum. The Indian economy grew by 9.4 per cent in 2006-07. A senior SBI official said, “The fund will mainly meet the funding requirements for infrastructure, both in terms of equity and debt. It will be launched in two months. The infrastructure sector has huge requirements and there is no way of funding these projects through the normal bank financing route.”

The infrastructure sector accounted for only 7.6 per cent of the non-food credit as on December 22, 2006. The total outstanding loans to the sector stood at Rs 1,24,271 crore on December 22, 2006, a rise of 21.7 per cent over a year earlier. SBI’s lending to the infrastructure sector has doubled in about 18 months and is around Rs 20,000 crore currently.

The committee on infrastructure, headed by the Prime Minister, had pegged the investment requirements for airports at Rs 40,000 crore by 2010 and national highways sector and ports at Rs 1,72,000 crore and Rs 50,000 crore, respectively, by 2012.

The private sector is expected to contribute a substantial part of this investment. India has the estimated potential to absorb $150 billion of foreign direct investment (FDI) in the next five years in infrastructure alone.

The country’s largest engineering company, Larsen & Toubro (L&T), is also setting up a $1 billion fund to invest in infrastructure projects. L&T plans to raise $500 million in the next two to three months, with the company investing $50 million as seed capital.

Infrastructure Development Finance Company (IDFC), which raised $519 million through the sale of shares to institutional investors overseas earlier this year, has set up a $5 billion infrastructure fund along with New York-based Citigroup and Blackstone.

 

[Bushroda]

Net-driven education will yield billions
8 Jul 2007, 0306 hrs IST,Abhay Vaidya,TNN

PUNE: Thanks to the internet and emergence of knowledge economy, education is becoming big business in India. Take the example of e-learning company Brainvisa, which provides corporate training modules to a large number of Fortune 500 companies and strives to become a world-class leader.

"The opportunities are immense," says Brainvisa's 33-year-old CEO Supam Maheshwari, who is assisted by the other IITians who founded Brainvisa, Nitin Agarwal (30) and Vikas Kumar (31). "We are not serving even one per cent of the market share."

Another company from the "Sequoia family" hit global headlines recently when its business model of 'providing online e-tuition to American schoolchildren' was highlighted by the prestigious newsmagazine, 'The Economist'.

Based in Bangalore, TutorVista, which has provided e-tutoring to over 2,000 students in US and UK, has now turned its attention to Indian students, offering e-tuition from classes six to ten for the CBSE and ICSE curriculum.

Last week, Hyderabad-based BodhTree Consulting launched 24x7guru.com to provide a diagnostic and self-assessment tool for students studying from class three to ten. After coming home from school, students subscribing to this educational service-provider will log on to this website and sharpen their learning by answering questions about the subjects taught in school.

Rising affluence in the 250-million strong Indian middle class, the desire for quality education and expanding internet connectivity with better bandwidth are the driving forces of the nascent e-learning industry in the country.

What is serving as another growth impetus for this industry is the fact that children are becoming increasingly computer literate and internet-savvy.

Although not in the educational-tutoring space currently, Brainvisa's CEO Maheswari is keeping a close watch on this sector and says that it is beginning to "warm up". According to him, this sector has a fantastic growth potential, easily much more than Rs 15,000 crore which is the size of just one company selling soaps in India.

He calculates that with the average Indian middle class family spending more than Rs 500 per month on education, the market is huge for the 250 million Indian middle class with purchasing power.

At just Rs 500 per month, the annual educational market for this size works out to an astronomical Rs 1,500 billion or Rs 1.5 lakh crore.

Even a small slice of this pie could mean a huge e-learning market waiting to be tapped in the country.
Apart from the fact that the Indian education sector is second biggest in the world, next only to China, what gives Indian e-learning entrepreneurs a greater edge is the proficiency in English and IT.

This offers it a global opportunity to earn in dollars as is being attempted by the new-start-ups and as has been demonstrated by pioneers such as Educomp Solutions Ltd and NIIT.

The Brainvisa CEO is fascinated by American educational giant Kaplan which, in less than 10 years, grew more than tenfold to a $1.6 billion company in 2006. Kaplan provides a variety of educational needs to schoolchildren, college students and professionals.

His optimism is shared by others in the industry such as Sanjiv Gupta, CEO, BodhTree Consulting, who observed: "Education is among the fastest growing service sectors of the economy and it is becoming a powerful and very important personal attribute."

What makes these start-ups noteworthy is the innovative application of thought that is driving them towards new business opportunities in the knowledge economy.

 

[Bushroda]

Duty cut brings cheer to beer guzzlers
KAKOLY CHATTERJEE

New Delhi, July 8: The cut in the duty on imported beer is expected to see the prices of foreign brands such as Heineken, Carlsberg and Tiger coming down by as much as 20 per cent.

While basic duties remain the same at 100 per cent for the alcoholic beverage, the additional duty of 75 per cent has been scrapped. Consequently, imported beer will cost less by Rs 15 to Rs 20.

“Essentially, a bottle of Heineken which earlier retailed at Rs 100 would now be available for Rs 80,” said Adil Mehra, managing director of GTFT — an importer of beer, wine and hard liquor.

However, with domestic prices ranging between Rs 30 and Rs 55, the 20 per cent reduction in imported beer prices would not bring any drastic shift in consumer preferences.

“There will not be any considerable shift in consumer preference as domestic beer continues to be available at cheaper rates,” said Rohit Mehra, MD of Mohan Brothers Private Limited.

For brewers in India, the growing middle and upper middle class represents a lucrative market. More people are taking to alcoholic beverages with changing tastes and lifestyles.

Beer, being low in alcohol content, is often the preferred drink of the younger generation.

The more affluent and widely travelled people among this section often prefer foreign brands.

Subhash Arora, founder of the Delhi Wine Club, said, “With increased disposable income and refined tastes, sales of imported beer are going to increase.” The market is set to grow at 15 per cent per annum.

Analysts said the Indian beer market was around 8 million hectolitres per annum which works out to a per capita consumption of less than 1 litre against 18 litres per annum in China.

The Rs 8,000-crore plus domestic market, which is growing at 30 per cent annually, is mainly controlled by United Breweries and SABMiller, who together have about 25 breweries under their fold.

Breweries such as Mohan Meakins, Mount Shivalik, Yuksom Breweries, Devan Modern Breweries and Asia Pacific Breweries control nearly 18 per cent of the domestic market.

However, beer imports, which have been eased by lower taxes may actually be hit by big brands deciding to set up base in India.

Sources said global majors such as Heineken and Anheuser might launch their products in India some time in the future encouraged by the growing market.

The current trend shows Indians are drinking more and more beer. Several factors are seen as driving this growth, including a buoyant economy, young population and a change in the licensing system.

“With the Indian beer industry poised for a 30 per cent growth in the next two to three years, global players are getting ready to grab a larger pint,” said Arora.

But if foreign brands are planning to make a pitch for Indian guzzlers, existing players such as United Breweries and SABMiller are also planning to widen their range.

 

[Bushroda]

India quickens its growth
Morris Beschloss
Special to The Desert Sun
July 8, 2007

With the world's two most populous nations (China and India) setting a torrid pace in their battle for global economic supremacy, India is in danger of overheating. While most attention has been riveted on China's unprecedented expansion, democratic India has hit economic strides, putting it closely behind China's near double-digit gross domestic product achievement.

Although both nations belong to the exclusive one-billion-plus population club, each represents a different approach to global economic expansion.

While China is a highly disciplined state-directed economic superpower, India has depended on its unprecedented entrepreneurial skills to cut a wide swath in world economic leadership.

Coming to the game in the early 1990's, the Indian sub-continent is in danger of overheating as it's playing catch-up with its older rival. Under the leadership of Prime Minister Manmohan Singh, New Delhi is finally cracking the British-imposed bureaucracy that held back most of the commerce and industry comprised by the British infrastructure in the long period of colonization.

The first break came with the ascendance of Singh to the position of finance minister in 1990. Singh wisely circumvented the Socialist vise that was strangulating India's economy by developing India's version of Silicon Valley in the city of Bangalore, which had become an embryonic technology center even before Singh appeared on the scene.

With 50,000 engineers graduated in foreign universities as far back as the 1970's, India had no dearth of potential talent to flex its technological muscles.

The trouble was that homeland opportunities were few and far between. Since information technology was a "green field" discipline in the late 1980's, Singh successfully concentrated on keeping this new development out of the hands of Indian officialdom.

This led to a meteoric rise in the decade of the 1990's with generous government enticements bringing a large proportion of foreign graduates back to India.

But with this incidence of unbridled capitalism manifesting itself in Bangalore, even more traditional industries, such as steel, have unshackled themselves from bureaucratic restraints.

This has led to domestic expansion, recently reaching 9.2 percent, not far behind China's 10.4 percent.

This has superseded the plodding rate of 3 percent, symptomatic of the old India, which seemed to be going nowhere fast. At this new rate of growth, India is due to soon surpass Japan, trailing only the United States and China, if purchasing power parity is considered.

But unlike China, which has maintained moderate inflation and no trade deficit, India is incurring a 6.7 percent inflation rate, plus a widening current account deficit.

Much of this is due to an overheated expansion which is forcing practically all Indian plants to operate at maximum capacity; coupled with unprecedented consumer demand, which is driving prices up to new heights.

Despite India's phenomenal expansion, it's suffering from an inadequate infrastructure, which it has only recently begun to address.

Unlike China, and more like the U.S., India must pass new legislation through a fractious Congress headed by the ruling Congressional party, which recently regained power from the previously ruling nationalists. This massive sub-continent must also contend with indigenous states, some of which are run by left wing governments who don't share New Delhi's priorities.

 

[Bushroda]

We’re all on a spending spree
KRISHNA KANT AND PALLAVI MULAY
TNN[ SUNDAY, JULY 08, 2007 11:47:08 PM]

The recent increase in interest rates and inflation fears may have failed to dampen India’s growth story, but the source of the economic bull run is about to change. Domestic investment — which, in the recent past, accounted for as much as half of the incremental growth in India’s gross domestic product (GDP) — seems to be peaking and making way for higher consumption demand.

According to the latest data available from the Central Statistical Organisation (CSO), gross fixed capital formation (GDCF) accounted for 39% of incremental growth in GDP at current prices during FY07. The corresponding figure was 40% in the previous year. Most surprisingly, the share of private final consumption expenditure (PFCE) in incremental growth continues to rise after hitting a trough in ’04-05. Last year, incremental growth in private consumption accounted for 47% of the economic growth — up from 45.2% in the previous year and 42% a year before that.

Does this mean that India’s growth story is over? In the long term, there is an inverse relationship between consumption and investments and the latter is needed to sustain growth. In the immediate term, however, faster consumption growth will add to the growth story that began with the investment boom around five years ago.

A diversified source of growth is always preferable to the one that is more dependent on only one source of growth. And anyway, at 39%, the contribution of investment demand to GDP growth is still higher than the historical average of around 32%. The share of consumption demand, however, is still below the historical average of 52%.

This may have prompted leading brokerages and various agencies to revise upwards India’s FY08 GDP growth by 50 basis points from their previous estimates. In FY07, India’s GDP grew by 9.4%, faster than advance estimates, It was the fourth consecutive year when the economy registered accelerated growth.

The growth was aided by resurgence in the industrial sector, followed by a strong capital expenditure (capex) cycle, which pushed up demand for all types of investments goods — plant & machinery, machine tools, metals and cement, among others.

One immediate fall-out of the acceleration in consumption growth could be a faster growth in the topline of consumer goods companies. Going forward, expect a faster growth in demand for consumer goods, ranging from every-day use soaps to garments and consumer electronics.

But what may have caused this shift in the source of India’s growth? One reason could be the recent rise in interest rates, which increased the cost of borrowings for companies and individuals. According to investment theory, every rise in interest rate makes a certain number of investment projects unviable. But why didn’t the higher interest rate dampen consumption demand as predicted?

A more plausible reason may be the long-term link between investment and income. Today’s income — salaries, rents, interest income, dividends and profits — are the result of investments made in the past. The projects executed during the first half of the current investment boom have begun yielding results in the form of higher corporate income and government revenues. This percolates down to the households in the form of higher salaries, greater dividends, more interest earnings, rents or all of these. The end result is higher disposal income in the hands of individuals and families.

Now, households may choose to either save their growth in income or increase their consumption to an equal extent or do both. While data on households savings for FY07 is still not available, there is a clear indication that they are now spending more on items of consumption. Is this the beginning of a consumption boom?

 

[Bushroda]

The second wave
Inspired by the tech growth story, Indian biotech sector is striving to move to the big league. Will it be the next big thing?

BV MAHALAKSHMI & SUDHIR CHOWDHARY
Posted online: Monday, July 09, 2007 at 0000 hours IST

You could call IT an inspiration. As the Indian tech industry reaffirmed its $50 billion promise last week, the fledgling biotech sector seems to be getting ready to raise the bar too.
Industry captains foresee a wave that could catapult Indian biotech—minuscule compared to the IT sector, but high on potential—into the big league. Hoping to be the next big thing in India after IT, they predict they could surpass the target—$5 billion by 2010 from the current $2 billion and records growth much faster than the IT sector, going forward.

Growing at a steady rate of 35% year-on-year, industry mandarins are wondering whether the $5 billion milestone was pegged lower and whether it’s time to raise the bar? Says Swati A Piramal, director—strategic alliances and communications, Nicholas Piramal India, “In fact, it is a fairly low target. Last year, the output from a small island state of Singapore’s Biopolis was $23 billion. This generated high-skilled jobs and huge value was added for Singapore. Similarly Taiwan, Israel and Korea are generating huge biopharma turnovers. Indian biotech sector, unlike the pharma and IT segment, is growing relatively at a faster pace. And, unlike the IT sector, it is focused more on products and comprises less of services. Certainly, there is a tremendous potential.” In its latest global biotech survey, Ernst & Young ranked India number three after Japan and Korea in the Asia-Pacific region.

Biocon CMD Kiran Mazumdar-Shaw says, “We believe that this milestone can definitely be achieved by 2010. Innovation has to replace the generics and the mindset.” Agrees Metahelix Life Sciences MD KK Narayanan, “At the present growth rate of over 35% year-on-year, the Indian biotech sector should be able to reach $5 billion by 2010 in spite of the heightened competition from countries like China and some of the East European states. Agri-biotech is now the fastest growing area. However, this sector’s growth is likely to plateau off in the next year unless new biotech crops (other than Bt cotton) are approved for commercial cultivation.”

Narayanan, who is also the president of Association of Biotech Led Enterprises (ABLE), says that Indian biotech industry is poised to grow much more than the IT sector though it cannot be strictly compared with the IT sector. “Biotech needs large investments in infrastructure. Being R&D centric, there is a considerable lag phase before there is return on investment. The biopharma industry spends four times as much on R&D as the IT industry. Further, the number of patents filed in biopharma are much higher than the IT sector.”

Explains Piramal, “Although the timelines of a product coming to market are higher, the risks are also more as only one in 100 medicines in research make it to the market. The only parallel that exists with the IT sector is the way the industry has grown; from services to products rather than from innovative products itself.

Confidence from a resurgent Indian biotech sector, often called the second pillar of the knowledge economy—IT being the first—emanates from the improved regulatory infrastructure and standards of bio-manufacturing, increasing R&D collaborations with the US and European companies and acceptance of Indian clinical data by international bodies like USFDA. The likes of Biocon, Wockhardt, Dr Reddy’s, Shantha Biotec, Bharat Biotech, Transgene Biotek, Panacea Biotech and Ranbaxy are emerging on the global scene with their own brands of recombinant products, which are increasing market share and rivaling leading global brands in their quality.

Importantly, the sector is ushering in a reverse brain drain with hordes of Indian scientists coming back to take up work relating to drug discovery and clinical development. The government’s adoption of a product patent regime, in full compliance with the provisions of WTO and TRIPS, has given a further impetus to the growth in this industry. This change in the intellectual property regime has prompted many Indian companies to dedicate innovative research. Bangalore alone witnessed investment commitments far in excess of Rs 1,000 crore from companies like Jubilant, AstraZeneca, GE Healthcare and Biocon, points out Mazumdar-Shaw. On its part, the department of biotechnology intends to expand the sector five-fold over the next five years, creating at least 10 biotech parks by 2010.

Already, the Indian biotech sector offers a wide variety of products and services including into affordable vaccines, non-vaccine therapeutics, innovative product development and contract services, says Wockhardt chairman Habil Khorakiwala. Several Indian firms have focused their businesses on the development, manufacturing and marketing of vaccines. These include India’s first domestically produced recombinant human hepatitis B surface antigen (Hep-B) vaccine Shanvac-B, from Shantha Biotechnics, followed by Panacea Biotec, Biological E (Hyderabad) and Transgene Biotek, Bharat Biotech International which are involved in similar work. Indian firms are also making directed attempts to produce novel non-vaccine products.

Analysts opine that growth engines could be biogenerics, agribiotech, nutraceuticals contract manufacturing, DNA microarray technology and data analysis services through bioinformatics companies.

The nascent biotech industry is also learning lessons from its big brother—the pharma industry. To sustain themselves in the long run, biotech companies will need to make the transition to innovative, R&D-driven enterprises, and will need to find creative solutions around challenges such as insufficient venture capital and indifferent public equity markets.

On the biggest challenges biotech firms are facing in the current environment, analysts aver that the short answer to this problem is that we should develop our own technology; we should acquire so much intellectual property that the West will be as much dependent on us as we are on them. As Mazumdar-Shaw puts it: “there is a transition from generics to new molecules in discovery research. In order to facilitate this, there is a need for large animal house facilities, regulatory infrastructure, private and public funding.”

Another big challenge Indian biotech firms face is raising capital. The Indian financial market is far more risk-averse than the US biotech, which forced biotech firms to focus on a revenue model based on services. As a result, few companies dared to invest in new drug development; most Indian biotech firms provided research services, clinical development and diagnostic services to keep their operations going. In that regard, most of these companies are emulating the outsourcing model of the software services sector.

This, however, is fast changing by adopting the hybrid model where a part of the company focuses on delivering services, which then enables other units to work on new discovery programs. So building a biotech sector, which can manage to develop a large number of capabilities in drug development and manufacturing, is now happening more often.

The India story has begun and it is by no means over. The importance of moving ahead with services and innovation together is what is the need of the hour and is going to put biotech as the next big thing happening for India after the IT revolution.

 

[Bushroda]

Biggest B school on cards in Punjab
BALBIR SINGH
Sunday, 08 July 2007

CHANDIGARH: UBS passout Anshu Kataria is all set to start the biggest (in terms of intake) business school of the region near Chandigarh. The above said B' School is coming up in village Nepra on Chandigarh-Rajpura Road, where the big players like Chitkara, Gian Sagar, SVIET have already established.

Muktsar-born Kataria disclosed that in the year 1996, he had to wait outside UBS to get admission in Masters for more than 20 days. Even he was not having enough fees with him required for admission because of financial problem. But he was having dream in his mind to study in business school. Struggle for getting seat in business school motivated him to have his own business school one day.

Son of noted academician Prof. D.C. Kataria who is renowned in North India for creating awareness of UGC NET Exam, Anshu Kataria at the age of 31 is intended to have the biggest B' School of the region with the intake capacity of more than 480 students by 2010.

Having worked with renowned group like Desh Bhagat, Chandigarh; C.T. Institutions, Jalandhar, SVIET, Chandigarh; Ind Swift, Chandigarh and Outline System, USA at senior positions, Kataria says that in booming economy, the demand for management graduate have increased manifold, but supply is not increased which results into breaking all previous record in terms of pay packages of fresh MBA passouts.

Kataria gets support from his wife Dr (Mrs) Parveen Kataria, Doctorate and Gold Medalist from UBS, PU in turning this dream into reality.She also have the experience of working with top B' Schools of the region like Gian Jyoti Institute of Management and Technology, Mohali; Centre for Management Training Research, Kharar; SVSM, Banur etc.The couple is going to set new benchmark for quality of education for new and existing business schools.

It is to be mentioned that Aryans Group has already got Letter of Intent (LOI) for establishment of 2 business school namely Aryans Business School(ABS) and Aryans School of Advanced Management (ASAM) from All India Council for Technical Education, Ministry of Human Resource Development, Government of India, New Delhi.

 

[Bushroda]

Medical tourism warts-and-all
By Libby Peacock
The Australian

LINDA Beier, an expatriate living in Hong Kong, was unhappy with the appearance of her teeth, so when she had the chance to join a friend for a 10-day break in Thailand she included a visit to a well-known Bangkok dental practice, where the problem was fixed for a fraction of the cost in her adopted home.

Beier's dental procedure was just a tiny cog in the global medical tourism wheel which, according to some estimates, is a $50 billion global industry.

Several hospitals in Asia have carved out such outstanding reputations that medical tourism has become a big money-spinner; the typical combined hospital and doctors' charges are 60 per cent to 85 per cent lower than those in, say, US hospitals.

In Singapore and Thailand, government agencies have been set up to help market their expertise globally. Medical travel agencies have sprung up and top Asian hospitals routinely have international desks and services to assist overseas patients with everything from doctors' appointments to accommodation.

Thailand
Bangkok's Bumrungrad International Hospital has won international acclaim and is Thailand's best-known facility for health tourism. It was the first hospital in Asia, and the only one in Thailand, to be accredited by the US-based Joint Commission International, an organisation aiming to elevate healthcare delivery standards through an evaluation and accreditation process.

Last year, 435,000 international patients from more than 150 countries were treated at Bumrungrad, with surgeries ranging from comprehensive check-ups and cardiac surgery to cancer treatment and plastic surgery. An elective coronary artery bypass operation that would typically cost $70,000 is about one-quarter of that fee at Bumrungrad.

The hospital's group marketing director Ruben Toral says: "We deliver a Mercedes product at a Toyota price." He's referring to the three things Bumrungrad prides itself on: high-quality, international-standard medical services, immediate access to those services and specialists, and affordable prices.

Mr Toral says the hospital is a one-stop medical centre with more than 900 internationally trained medical specialists under one roof. Patients arriving for treatment might well be guests checking in at a five-star hotel; there are concierge-style services and an electronic medical-records system that eliminates paper and waiting.

Like other top Asian hospitals, Bumrungrad works with the travel industry to promote medical tourism and the hospital has a partnership with Diethelm Travel, Thailand's largest inbound tour operator, which has an office in the hospital; the hospital also has a new kiosk at Bangkok's international airport.

All Bumrungrad's doctors are Thai, but more than half have international training or overseas board certification.

Another Thai institution providing international services is the Bangkok International Hospital, which boasts a considerable portion of foreign patients. Its International Medical Centre features a team of multilingual interpreters.

Also in Bangkok, the BNH Hospital offers a range of medical services, from orthopedic surgery and ophthalmology to pediatrics. Various check-up programs are on offer for set package prices (a general heart check-up including a chest X-ray, electrocardiogram, a blood test and tests for blood pressure and diabetes costs the promotional fee of $165 until June 30). The hospital's International Travel Medicine Clinic provides full medical services and immunisations and the "first comprehensive spine centre in Thailand".

Southern Thailand's Phuket may be famous for its beaches and warm seas, but to some tourists it has another attraction: sex-change surgery. (This is one of the top 10 procedures attracting foreign patients to Thailand.) The Bangkok Phuket Hospital is part of the Bangkok Hospital Group, a network of 15 private hospitals. The hospital offers sexual reassignment surgery, as well as extensive health-check facilities (it has the equipment to perform full-body CT scans and 4D ultrasounds). Years ago the hospital set up a subsidiary travel agency, Phuket Health and Travel, offering packages for procedures such as plastic surgery, dialysis, hip or knee replacements and annual check-ups.

Singapore
Singapore is another player in the Asian medical tourism market, which is unsurprising given the super-efficient city-state's reputation for sophisticated facilities and advanced technology. Critics say costs are 30 per cent to 50 per cent higher than those in Thailand but, even so, they remain appreciably lower than in the US and Australia.

In 2003, Singapore created Singapore Medicine, a government-industry partnership to develop Singapore as an international hub for medical travellers, research, conventions and education.

According to Singapore Medicine director Jason Yap, Singapore received 374,000 healthcare visitors in 2005 and services ranged from transplants and hip replacements to fringe procedures.

The eMenders group consists of more than 50 specialists based at the Mount Elizabeth Medical Centre in Singapore, covering more than 25 specialty areas. All the doctors have internationally recognised qualifications and have received their specialty training, or additional training, at leading institutions in those countries.

Medical tourism vs medical travel
According to eMenders chief executive Moonlake Lee, it is important to differentiate between the terms medical tourism and medical travel. Most eMenders patients fall into the category of medical travel (they go to Singapore primarily because of medical reasons). For other patients, medical services may be incidental to their trip; those in this category mainly have elective, cosmetic or minimally invasive procedures, such as dermatology, dental, general health screening and aesthetic procedures. Many patients also come to seek second opinions on treatments or on diagnoses made by their doctors back home.

The Mount Elizabeth Hospital is owned by the Parkway Group, which also owns the East Shore and Gleneagles hospitals in Singapore and a network of hospitals in Asia. Parkway's International Patient Assistance Centre helps patients to access the right channel of expertise and assists with travel and other necessary arrangements.

Dentistry also draws international patients to Singapore. Doctor Ansgar Cheng of Henry Lee Dental Surgery says dental services have been provided at the Mount Elizabeth Medical Centre for more than 27 years and overseas patients come from throughout Asia, Australia and New Zealand.

The practice also has a growing number of clients from Russia, Canada, Britain and the US, says Dr Cheng, who has fellowships in Singapore, Canada and Australia. Typically, international patients seek procedures such as dental implants, crowns, veneers and dentures.

Another Singapore hospital with an international patients' centre is Raffles Hospital, which offers fixed-price packages, from screening for osteoporosis for about $S100 ($80) to total knee replacements. The package price for a coronary artery bypass graft runs at $14,000 for up to an eight-night stay with two nights in the intensive care unit.

India
Think of India and images of ancient temples, tigers, call centres and the information technology boom may jump to mind. These days, health care is also on the list. India has some excellent medical care providers; in 2004, Indian facilities treated an estimated 150,000 medical tourists.

Cardiac care is one specialty drawing overseas patients to India. The Escorts Heart Institute and Research Centre in Delhi is a state-of-the-art institute where more than 35,000 open-heart operations have been performed.

At Escorts, open-heart surgery costs about 200,000 rupees ($6000). Like most international hospitals in Asia, the centre helps foreign patients with visa arrangements, airport pick-ups and accommodation.

The Apollo Hospitals Group runs hospitals across India, including in Delhi, Hyderabad, Chennai, Bangalore and Kolkata. Some patients are also drawn to India's holistic approach to healing, where disciplines such as yoga and meditation may be used alongside the latest medical techniques. Various city hospitals across India have ayurveda natural healing centres.

The Wockhardt Hospitals Group has a chain of super-specialty hospitals, such as the Wockhardt Eye Hospital, Wockhardt Bone and Joint Hospital and Wockhardt Heart Hospital in Mumbai, and others in Bangalore, Hyderabad, Kolkata and Nagpur. The group has an association with Harvard Medical International, an arm of the Harvard Medical School.

Other Indian hospitals treating increasing numbers of foreign patients include Global Hospitals, a dedicated centre in Mumbai for multi-organ transplants also focusing on cardiology, liver diseases, oncology and haematology. There is also the well-regarded L. V.

Prasad Eye Institute in Hyderabad. The Ruby Hospital in Kolkata even has an exclusive lifestyle floor, The Enclave, housing private apartments.

Malaysia
At the forefront of medical tourism in Malaysia is the state of Penang, where the Government is actively promoting its private facilities for cosmetic surgery. Hospitals drawing international patients include the Gleneagles Medical Centre with its own foreign patients' service and a range of services and packages (a standard executive health screening test including examination, electrocardiogram, chest X-ray and blood and other tests runs at about 455 ringgit or $160).

The 258-bed Penang Adventist Hospital is a private hospital that is part of an international network of more than 500 facilities and claims to be the first private hospital in northern Malaysia to have performed procedures such as coronary bypass and laser heart surgery.

Another Penang hospital that has established an international reputation in Southeast Asia is the modern Island Hospital which, apart from the usual facilities, also has a heart centre, urology centre, fertility centre and laser vision-correction centre. A standard executive screening program here costs $100.

Philippines
The Philippines is also starting to cash in, with an official Philippines medical tourism program running in co-operation with its Department of Tourism. The first Philippines Medical Tourism Congress was held in Manila late last year and it's hoped patients from the US and Australia will be attracted in the future. Several healthcare facilities are participating in the program, but so far St Lukes Medical Centre in Quezon City is the Government's only full medical tourism partner.

Pre-travel warning
A word of warning: do your homework before you fly. Asia is home to many international-standard hospitals, but if you don't choose well your medical holiday could end in disaster.

Botched: Warning on cheap 'holiday surgery' fixes »

In the southern Chinese city of Shenzhen, for example, there are thousands of unlicensed centres offering all sorts of plastic surgery. But don't fall for it. Elective treatments at overseas hospitals or clinics are not claimable from Australian health funds and, if post-operative problems or negligence issues arise, suing a foreign doctor is likely to be a labyrinthine process. That bargain procedure may just be the final cut.

 

[Bull]

http://news.bbc.co.uk/2/hi/south_asia/6263984.stm

 

[Bushroda]

Indian tech firms Q1 net to rise; rising rupee, wages a worry
Mon Jul 9, 2007 1:10 PM IST
By Sumeet Chatterjee

BANGALORE (Reuters) - India's top software services companies should report quarterly earnings rose 10-25 percent as they won more outsourcing business from Western clients, but wage increases and a stronger rupee will have dented margins.

Analysts are bracing for a slowdown in earnings growth, and will be watching if companies lower their forecasts even though the outlook for new outsourcing contracts remains buoyant.

The rupee, which rose 6.8 percent against the dollar in the June quarter to 40.72, poses a big problem for software services exporters that get more than 60 percent of their revenue from the United States.

Every 1 percent rise in the value of the rupee against the dollar shaves 30-50 basis points from operating margins of Indian software services exporters, analysts said.

This would have lowered the net profit of top companies by 1-15 percent in the three months ended June from the March quarter, they said, with wage rises and costs related to getting U.S. visas for work permits at client sites.

Analysts at Westpac Bank expect the rupee to rally further to 39.4 per dollar by the end of the year.

Even so, margins for the top software companies are still well in the double digits, and over 20 percent for the top 3 exporters.

Infosys Technologies Ltd., which kicks off the results on Wednesday, is expected to post net profit rose 21.2 percent in the fiscal first-quarter ended June from a year earlier, according to a Reuters poll of 10 analysts.

Compared with the March quarter, the estimate will be 15.3 percent down, it showed.

"The June quarter was definitely a very difficult quarter for all the software companies," said Tejas Doshi, a sector analyst with Mumbai brokerage Sushil Finance.

"Most of the firms give wage hikes in the first quarter. On top of it, the sharp rupee appreciation has come as a major blow for all. The pressure on margins will definitely be there."

Wages in the sector are rising by about 10 to 15 percent a year, compared with 2-6 percent in the West, as companies try to retain staff from being poached by rivals such as IBM and Accenture.

Tata Consultancy Services, India's top software exporter, is expected to post 25 percent rise in quarterly earnings on July 16, followed by number-three Wipro up 22.3 percent on July 19.

SLOWING GROWTH

India's booming software services industry has been winning large outsourcing business from overseas clients like ABN AMRO, Airbus, and Qantas but growth is expected to slow.

Last week, an industry body forecast software services exports would rise 26 to 29 percent to around $40 billion in the fiscal year to March 2008, slower than a 33 percent rise in 2006/07.

"While operationally we expect positive comments by companies in terms of volume growth, guidance in U.S. dollar terms and pipeline, the street focus, in our view, would continue to be on the rupee movement," SSKI India Research said in a report.

The rupee has risen more than 9 percent against the dollar in 2007, propelled by rising foreign investment in the fast-growing economy. This reduces the amount of rupees that exporters get when dollar earnings are converted.

Brokerage Kotak Institutional Equities said it expected profit margins to decline by 250 to 350 basis points for companies like Infosys and Tata Consultancy that had raised wages in the June quarter.

It expected Infosys to cut its earnings per share guidance by 5 to 7 percent in rupee terms for the year to March 2008, while fourth-ranked Satyam Computer Service Ltd. may lower by 1.7 percent due to the stronger rupee.

Infosys shares fell 4 percent in the June quarter, while Tata Consultancy lost 6.7 percent and Wipro shed 7 percent. All were weighed down by foreign exchange and margin pressure concerns.

In comparison, the sector index dropped 0.6 percent while the main BSE index rose 12 percent.

But analysts said the drop in prices offered opportunities for investors.

"Business momentum continues to be strong with pricing on an uptrend... reasonable valuations provide a good entry point for long-term investors," Surendra Goyal and Hitesh Shah wrote in a Citigroup research report.

 

[Bushroda]

A Reunion at the "MIT of India"
TIME
Monday, Jul. 09, 2007

Google, Microsoft and General Electric came to Santa Clara, Calif., last weekend, and all but begged graduates of one of the world's top engineering schools to work for them. Google spent $200,000 to be the lead sponsor of the four-day-long reunion of 3,500 alumni. Microsoft's research center in Hyderabad came calling. The CEO of GE, Jeff Immelt, already employs 1,500 graduates and says he needs more. Stanford? MIT? Harvard? Nope. This was a gathering of graduates of the Indian Institutes of Technology.

Prime Minister Jawaharlal Nehru started the Indian Institute of Technology in 1950 because he recognized that his new country needed builders— engineers who would give India the same vitality that was turning the United States into a superpower. The IIT system now includes seven campuses, and its graduates quickly became India's technological elite. A half-century later, their influence is almost as great in the U.S., where 25,000 of IIT's 100,000 graduates live. IIT grads include venture capitalists Vinod Khosla, Kanwal Rekhi and Yogen Dalal; former McKinsey managing director Rajat Gupta; Vodafone CEO Arun Sarin and 35 of the top 600 executives at GE. Silicon Valley couldn't run without them, and India's booming tech economy has opened up another world of opportunity. "You've almost got too many choices," Immelt said in a speech to the group on Friday. Spend some time in the world of IIT, and engineering almost feels — well, glamorous.

IIT has often been called the MIT or Harvard of India, but there's a big difference — IIT is a lot more selective than the top Ivy League schools. About 250,000 Indian students take the first screening exam for a spot at an IIT; 100,000 make it to the next round; but only 4,000 are eventually selected. Even if they could make the cut at IIT, however, the brightest young American students are less likely now than they were a generation ago to choose engineering. The number of engineering grads in the U.S. peaked in 1986 at close to 80,000, and has fallen to about 70,000 now. "Engineering has played second fiddle to other professions in the U.S." says Subhash Tandon, a 1972 IIT grad. "There isn't a prime time TV show about engineers."

But it will take more than a CSI: Palo Alto to reverse that trend. Engineering in the U.S. needs a rebranding. IIT went through such a transformation after the tech bubble burst in 2001, when engineers — Indian and American alike— were being laid off by the thousands. That's when some of the school's most prominent alumni decided to turn IIT into a brand combining the brainpower of engineering with the excitement (not to mention the big money) of entrepreneurship, by playing up the accomplishments of IITans like Umang Gupta, CEO of the web services company Keynote and employee No. 17 of the company that later became Oracle. Gupta is a rock star to young IITans, who say he understands their desire to take what they know and build something bigger out of it. "Everybody wants to start a company," says Deepak Goel, a 1999 IIT graduate and design engineer at Microsoft.

Making a mark in the global economy, however, means becoming a global citizen. "How well do you travel?" Immelt asked. It's a lesson that U.S. workers, too, are starting to learn. Satish Bhat, program manager of Microsoft's development center in Hyderabad, says he's been taking on not just Indians who want to move home, but also "diversity hires" — Americans who want to move to India. "That's where the action is," Bhat says.

Still, the IIT boosters are aware of the challenges of globalization and those it leaves behind. Immelt said India's success will be defined by its ability "to make the pie bigger." Hillary Clinton, who spoke by satellite to the crowd (a decision that left many at the conference wondering whether she was trying to distance herself from India), asked these engineers, scientists and business people to use their skills to create "a shared prosperity for America and India." IIT graduates helped build the technology that made globalization possible. Perhaps they'll also be the ones who make it work for everyone.