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India's forex reserves at a record $218.96 bn
20 Jul, 2007, 1710 hrs IST, REUTERS

MUMBAI: India's foreign exchange reserves rose to a record $218.956 billion on July 13, from $214.835 billion a week earlier, the Reserve Bank of India said in its weekly statistical supplement on Friday.

The RBI said foreign currency assets expressed in US dollar terms included the effect of appreciation or depreciation of other currencies held in its reserves such as the euro, pound sterling and yen.

The foreign exchange reserves include India's Reserve Tranche Position in the International Monetary Fund, the RBI said.
 
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India's Air Apparent
Tara Weiss, 07.20.07, 5:25 PM ET
FORBES, NY

Naresh Goyal might not have the height or the hair of Virgin Chief Executive Sir Richard Branson, but he's certainly got his fellow airline owner's charisma.

The founder and chairman of Mumbai-based Jet Airways is in town for one of his "road shows," part of a campaign to introduce Americans to the 14-year-old airline that begins service from Newark, N.J. to Europe and India next month. He met with reporters in his suite at the Waldorf-Astoria, showering them with compliments and hearty laughs.

He says he can't be compared to Branson because unlike his British counterpart, he's not the face of the brand. That may be true, but like Branson, Goyal built Jet Airways from the ground up.

Goyal started working in the airline industry right after college in his great uncle's marketing agency for Lebanese International Airlines. His salary was so low--$40 per month--that he had to sleep on the floor of his office. But he moved up the ranks quickly, becoming a publicist for the airline and from there, moving on to other international airlines.

After a few years, he started Jet Air, a marketing organization that represented several international airlines in India. His mother sold her own jewelry to give him money to start the business.

In the early '90s, he looked into buying an airline in Scotland since there was no "national" carrier there, but his plan came to nothing. At home, though, things were changing. From 1953 until 1992, the only airlines allowed to be based in India were owned and operated by the government. They were less than hospitable--there were no printed schedules, and service was abominable.

"They [thought they] were doing you a favor to carry you from point A to point B," says Goyal. But when the government opened the airline industry to private competition, Goyal jumped at the opportunity.

"There was a huge market for good value and a high level of service in a marketplace that had never seen that before," says Bob Mann, an airline consultant with R.W. Mann & Company. "He got in front of the wave before it reached the shore."

Goyal now runs an airline that flies from India to 50 destinations. Starting in August, Jet Airways will have a European hub in Brussels.

Goyal still remains true to his marketing roots, which were showcased in a lavish press conference recently. He might not be able to bring one of the airline's Boeing 777s into the Grand Ballroom of the Waldorf-Astoria to show off the upgraded cabins of Jet Airlines, but he did the next best thing: He brought life-size replicas of the cabins and showed off the flight attendants' newly designed mustard-colored ensembles.

Goyal markets service and comfort as the keys to his airline. For about $10,000, passengers in first class get a private suite, complete with closing doors; a full bed; a flat-screen television; and a meal that might be served at a top restaurant in any city. Business and coach offer levels of comfort too, with televisions and ergonomically designed chairs.

This isn't entirely new, says Mann. The Dubai-based airline Emirates and Etihad Airways, the national airline of the United Arab Emirates, both have first-class closed-door cabins. Plus, there's lots of competition from the likes of Virgin and British Airways (nyse: BAB - news - people ), which also fly to India.

But with globalization and India's economy opening up, Goyal is counting not only on the Indian diaspora looking to travel around the world, but businesspeople who increasingly need to go to the Indian subcontinent for work. "The demand has been pent up for a long time," says Mann.

Goyal recently sat down with Forbes.com to discuss his airline's past and future.

Are you the Richard Branson of India?

Goyal: No. I don't want to follow someone else, but he is a very dear friend of mine. We know each other through the industry. He's the best marketing person in airlines. He is the Virgin brand. I don't want to be the brand because an organization lasts longer than the individual. The institution is there for a long time to come, while individuals come and go.

Our airlines work together very closely. We bring traffic from India to London and transfer them to him. We have a commercial alliance.

How did you pick Newark as the first American destination for Jet Airways?

We found there's less congestion at Newark after you leave the airport than at JFK. Eventually we'll fly to both because both airports are important. If I have a choice, I fly into Newark.

After Newark, there's a lot more North American expansion planned. Some observers say it's too fast, but you don't agree. Why?

There is traffic already. You don't have to do anything and traffic exists. There are 2.5 million Indian-Americans living in the U.S. We want to serve that population. Also, Indian companies are becoming global. People in the west used to think India is something hidden. Today, U.S. companies have so much interest in India.

Next is Toronto on September 5. There are 800,000 Indians in Canada. We'll start service to JFK, San Francisco, Chicago and L.A. in the next year.

There are so many options in the airline industry. Why would someone pick Jet Airways?

Service is everything. I'm paying $750 per day to stay here [the Waldorf-Astoria Hotel] and there's lousy service. I ordered my breakfast at 9 a.m. and my breakfast never came. I went hungry. This would never happen in India. Hospitality is in our blood--to look after our guests. Even if you come from a poor family, the lady of the house will offer you tea or coffee.

In terms of American passenger-airlines service, they dump people from one point to another. With us, you get a hot meal within a half hour of takeoff. It's a three-course meal in every section of the airplane--even in coach.

What about pricing?

We are not here to get into fare wars. We are here to give you the best product, which hopefully no other airline gives you.

Your flight attendants are outfitted by a fashion designer, three-course meals are served in all sections and you're pouring Dom Perignon to passengers in first class. How can you afford that without raising prices?

Productivity. It's higher and better than other carriers. Our cost ratio in the aircrafts is one of the lowest in the world. We have created high morale for our people. Our employees believe in the company. They believe it's their company. There's a feeling among employees that if the company makes money, it's their money and if the company loses money, that's their loss.

With your love of airlines, have you ever learned how to fly an airplane?

No, I can't even drive a car. I don't even know how to swim.

Why do you enjoy the airline industry?

It connects cultures. You make friends. And of course, there's a certain glamour in this business.
 
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RPG Group to invest Rs.12,000 crore in power sector
Wednesday, July 18, 2007

RPG Group has earmarked an investment of Rs.12,000 crore for power and Rs.450 crore for carbon black for a period of two-three years.

Of the total investment of Rs.12,000 crore in the power business, the company have already committed Rs 2,000 crore. The group is setting up a 2,000 MW thermal power plant and has identified three states - West Bengal, Jharkhand and Orissa - where it is assessing the project's prospects.

RPG Group is adding two more facilities to its already existing three carbon black plants. It has decided to set up the fourth plant at Mundra while the location of the fifth is yet to be decided.
 
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More Chinese flights to India

BEIJING, July 20: In view of increasing tourist exchange between China and India, Air China today said it will start operating daily flights between Beijing and New Delhi starting 31 October.

At present it has only four flights a week between the two cities.

The state flag carrier will be joined by another international carrier, China Southern, which is expected to start three flights a week to Delhi from Guangzhou (erstwhile Canton), a home to more than 3,500-strong Indian community and throbbing business hub in south China. “The flights will be seven a week on the first anniversary of our starting of Beijing-Delhi sector on same day last year,” Mr Zhao Quanzhen, Air China country manager (India), said.

The flag carrier had started with three flights a month. Noticing demand, it added another flight in March this year.

Air China plans to introduce two brand new Airbus 330s to ply on the Beijing-Delhi sector. At present the carrier is plying Boeing 767s and Airbus 300s.

The new airbuses would be roomier with 30 business class seats and 256 economy class seats with “world class” entertainment during the journey.

Mr Zhao said the expansion of operations in India was a part of Air China’s global expansion plan.

“By next year we would have 20 Boeing 787s added to our existing fleet of 212 aircraft, mostly Airbus 300s and Boeing 767s,” he said.

Air China is also slated to become a member of the prestigious “Star Alliance” of the world’s leading airlines with members such as Lufthansa, Austrian, Thai Airways, Finnair and United Airlines.

“The 10th anniversary of the alliance is being held in Beijing this year. It is a high point in our airline history” Mr Zhao said. With more than 100 domestic and 37 international destinations, Air China has 35 per cent share in the domestic market and 70 per cent share in the international market.

China Eastern and China Southern together make up for 30 per cent of the China carriers’ international market.

China Eastern flies four Shanghai-Delhi flights a week. “China Southern is expected to start at least three flights a week on the Guangzhou-Delhi sector at about the same time as us (in October),” Mr Zhao said.

However, Mr Zhou is not satisfied with the load factor.” From Beijing to Delhi it is as high as 80 per cent, but on the way back it is just about 60 per cent.
 
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Tracking the Indian Railways' turnaround saga
Arvind Padmanabhan

It's a turnaround story that has not only amazed management experts but also caught the attention of premier global business schools like Harvard and Wharton - the dramatic return to profitability for the 154-year-old Indian Railways, among the world's largest railroad networks.

In February, when Railway Minister Lalu Prasad presented India's railway budget for the 2007-08 fiscal, its most striking aspect was the Rs.215 billion ($4.5 billion) surplus he announced for the organisation that employs 1.5 million people and boasts a 63,332-kilometer network that ferries 14 million passengers daily in 9,000 trains (4,000 more for cargo) from 6,947 stations.

"The railways are poised to create history," exulted Lalu Prasad, one of India's most colourful politicians, during his 116-minute speech, referring to the highest-ever surplus - akin to profits for companies - which the Indian Railways was projected to post for the fiscal year ended March 31.

"This is the same railway that defaulted on the payment of dividend and whose fund balances had dipped to Rs.3.59 billion ($80 million) in 2001," said the minister to the amazement of industry honchos and experts who were listening attentively to the speech.

In fact, he not only said that the surplus would increase next fiscal but also belied speculation over freight and upper class fare hikes that had once been a regular feature for the railways to bridge deficits. In fact, he even announced an across-the-board cut in tariffs and rolled out plans for 40 new trains, extended the run of 23 and increased the frequencies of 14 others.

All this only left experts gasping. They wondered what had caused such a sharp turnaround in the organisation from being the backbone of the Indian economy to being termed a "white elephant" headed towards bankruptcy by a government-appointed expert group.

"Today Indian Railways is on the verge of a financial crisis. To put it bluntly, the 'business as usual, low growth' will rapidly drive it to fatal bankruptcy, and in 16 years, the Government of India will be saddled with additional financial liability," said the report presented in July 2001.

This was, indeed, alarming for the Indian Railways, which since the commencement of its first journey on April 16, 1853, has come to reflect the pluralistic character of the country with many unique features such as having the world's largest as well as the smallest stations, the oldest running locomotive and a separate budget since 1924.

But from 2005, the signs of change were visible and became well entrenched by 2007. "The railways' renaissance has been engineered by simple entrepreneurial practices, which have evoked the admiration of internationally renowned institutions and companies alike," said a report by KPMG, which also conducted an international conference on railways in New Delhi last month.

"The railways are now working like a private sector corporation. This is great news for India. We wish other public services, especially in the social sector, like education and health would follow suit," Habil Khorakiwala, president of an apex industry group, the Federation of Indian Chambers of Commerce and Industry (Ficci), said.

"The turnaround is not hype because the net revenues have increased sharply," said Prof. G. Raghuram, who has thoroughly examined the performance of the Indian Railways as a case study for the premier Indian Institute of Management at Ahmedabad, one of India's best-known business schools.

"By increasing the axle-loading of wagons (which increases freight traffic) and, combining it with a market-oriented approach, Lalu Prasad has contributed to the success of Indian Railways," Raghuram added.

Lalu Prasad attributed the transformation almost entirely to improved efficiency that was even able to withstand increased competition from budget carriers that were offering to fly passengers for the cost of a second-class air-conditioned fare of the railways.

"Over the past 30 months, freight volumes have grown by 10 percent. Similarly, growth in passenger volumes has been doubled," he explained to a group of 130 students from Harvard and Wharton a few months ago, while delivering a lecture on the transformation of Indian Railways.

"On the supply side, increase in load coupled with reduction in turnaround time of wagons from seven to five days has contributed to an incremental loading capacity," the minister said in the rather simplistic explanation.

With financial parameters back on track, the Indian Railways now has set itself ambitious targets in areas such as refurbishment of stations, passenger amenities, better coaches and new freight corridors as it approaches the 11th Five Year Plan that begins April 1.

And says KPMG: "Indian Railways is in a dynamic phase of growth with new initiatives planned to capitalise on the existing gains and moving steadier and closer to the larger objective of offering world-class services in both freight and passenger transportation."
 
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‘Lifetime jobs a thing of past’

KOLKATA, July 20: Lifetime employment is a thing of the past and marketing economy has come of age. This was the general view expressed by experts at the HR Summit 2007 organised by the Indian Chamber of Commerce here today.

According to top HR bosses, employees decide to continue with or leave an employer on the basis of job satisfaction.

“If they feel important and engaged in the company and get credit for their job, more often than not they stay,” said Mr Anand Nayak, executive vice-president of ITC. Further, he added, in most cases employees leave their bosses and not the companies.

Making employees stake holders in the company’s growth, however, was cited as a good retention strategy, though bonds don’t work. “What the earlier generation wanted to achieve in 40 years, this generation wants in 10 years, so loyalty is no longer the key”, said Mr S Muthal, president HR of Nicholas Piramal.

People need companies but it is the same for companies too. Addressing the summit, Mr Radhakrishna Nair, CHRO of Tata Steel, said that in today’s perspective the bosses who feel insecure create problems.
 
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EXCLUSIVE INDIAN AVIATION SURVEY (Part 1): The message from India is clear, if the price is right people will find a way.
Centre For Asia Pacific Aviation, Australia
20-Jul-2007

(CAPA): The Centre For Asia Pacific Aviation (CAPA) recently surveyed almost 2000 passengers at major airports in India, the first such study to be conducted. The numerous findings of this survey were significant, and in many ways surprising.
Fundamental trends in passenger behaviour have emerged, in the context of India’s Low Cost Carrier (LCC) revolution and this vast country’s developing economy.

Watch this space over the coming weeks, as CAPA progressively presents the key findings in a 8-part series.

Internet Sales and Credit Cards

Three years ago many arguments were put forward that Indian LCCs would inherently fail due to the low internet and credit card penetration in the Indian market. The LCC model would not work in India it was thought, as the glaring differences with the LCC environment in Europe and the US would attest.

The spread of middle class affluence, in the wake of enormous economic growth, has challenged this point of view, and our survey results prove what we have in fact been hearing from India’s LCCs over the past year. The figures are startlingly clear, and still surprising to some – India is in line with global experience:

43% of LCC passengers in India bought their tickets over the internet;
48% of LCC passengers in India used a credit card to pay for their ticket.

The figures relating to Indian passengers travelling on Full Service Carriers were significantly lower:

21% bought their tickets over the internet;
61% bought their tickets via a travel agent;
31% used a credit card to pay for their ticket.
 
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Railways may flag off private stations
Animesh Singh in New Delhi

Imagine a railway station run by the private sector?

In a significant move, the Railways are preparing a blueprint to set up greenfield railway terminals across the country under private-public partnership.

The locations, which are being looked at, include a new terminal in Patna and Bijwasan (near Delhi).

Under the plan, the Railways would acquire and lease out the land to the private concessionaire.

The private developer would construct and maintain all facilities during the construction period and run the operations for a specific period. The Railways will repossess all the assets after the concession period

The move is a part of the Railways new thrust to modernise stations and improve facilities for customers through private sector participation as the battle with low cost airlines hots up.

The Railways have identified 16 stations, which would be modernised under the public-private partnership in various parts of the country. These include New Delhi, Chennai, Howrah, Mumbai CST, Bangalore, Bhopal and Lucknow amongst others.

A senior railway official said that the focus would be first on developing additional terminals at stations in the four metros, as these stations handle a lot of traffic.

Meanwhile, the ministry has selected the UK based company Terry Farrell and Partners, an architectural firm, for preparing the feasibility report and master plan for modernisation of New Delhi Railway Station.

The modernisation of stations would include setting up shopping and food plazas, budget hotels and retiring rooms. It also includes setting up spatial segregation of facilities at different floor levels for smooth passenger flow.

Other facilities such as segregation of incoming and outgoing passengers, major facilities at first floor or underground concourse level, and direct vehicular access to the concourse would also have to be suggested by the company.
 
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India's ICICI Bank net rise 25 pct, meets forecast
REUTERS, UK
Sat Jul 21, 2007 12:04 PM BST

MUMBAI, July 21 (Reuters) - India's second-largest lender, ICICI Bank (ICBK.BO: Quote, Profile , Research), reported on Saturday a 25 percent rise in quarterly net profit, meeting forecasts and helped by growing demand for loans in the expanding economy.

The bank, which is also listed in New York (IBN.N: Quote, Profile , Research), said its net profit for the April-June quarter was 7.75 billion rupees ($192.21 million), up from 6.20 billion rupees a year ago.

A Reuters poll of 10 brokerages and analysts had forecast a 24.6 percent rise in net profit to 7.7 billion rupees.

Total income for the quarter was 92.81 billion rupees, up from 60.49 billion rupees a year ago.

Analysts are upbeat about India's banking sector but there are concerns about loan defaults after official interest rates were raised five times between June 2006 and March this year.

"We do see a little slowdown there because of the interest rate where they are and the property prices being high," Chief Financial Officer, Vishakha Mulye said.

ICICI Bank, which had an overall credit growth of 35 percent, has seen a slowdown in its mortgage and auto loans business, she said.

But this was offset by a near doubling in its international business and increase in non-collateralised portfolios such as credit cards and personal loans.

Its international business now constituted 16.5 percent of its advances book and non-collateralised portfolios made up 17-18 percent, up from less than 10 percent a year earlier, she said.

"As a strategy, we have increased our non-collateralised portfolio," Mulye said.

The bank's fee income grew by 35 percent with retail contributing about 55 percent of it and corporates accounting for another 42 percent.

Analysts are optimistic about the prospects for the bank, which raised an Indian record $4.9 billion in share sales last month.

Shares in ICICI Bank rose 12 percent during the April-June quarter, lagging the 22.4 percent rise in the banking index <.BSESBANK> of the Mumbai exchange but matching the 12.1 percent rise in the benchmark index.
 
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Infrastructure fund for state govts: FM
Press Trust of India
Saturday, July 21, 2007 (New Delhi):

The apathy of state governments toward infrastructure development prompted the Centre to announce a Rs 100 crore corpus to help them in preparatory work of projects coming up with public-private participation.

"It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support," Union Finance Minister P Chidambaram said at a conference of Chief Secretaries on Public-Private Partnership (PPP).

The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said.

If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant. In case of successful bidding, the money would be recovered from those who get the contract, he said.

Lack of projects

Finance Ministry sources said that the fund would be sent to Cabinet Committee of Economic Affairs after approval by the Finance Minister.

Although finances were available, there were not enough infrastructure projects on the shelf in states, Chidambaram said, noting that large private funds were looking at India with interest.

After launch of two funds for infrastructure projects, including the $5 billion fund by Citigroup, Blackstone, IDFC and IFCL combine, other similar initiatives are waiting to be launched in India, he said.

Forex reserves

The Finance Minister reiterated that talks with the Reserve Bank were on to provide $5 billion from foreign exchange (forex) reserves for infrastructure projects.

"We have succeeded in convincing the RBI to lend $5 billion from the forex reserves to the India Infrastructure Finance Company Ltd, which would finance the infrastructure projects of Indian companies, especially for capital imports," a finance ministry official said.

Sources said the proposed borrowing from RBI would not be spent in the domestic market to avoid increase in money supply and inflation.

Momentum

Chidambaram said the pace of infrastructure projects had gathered momentum in 2006-07. As many as 12 states have agreed to sign MoUs with Asian Development Bank for providing technical assistance to PPP projects. Two such MoUs have already been signed, he added.

He said 31 proposals under PPP were received during 2006-07, out of which 21 involving a project cost of Rs 9,325 crore were given in-principle or final approval.

Similarly, 25 proposals under viability gap funding were received from state governments last fiscal, of which 18 were given in-principle approval, Chidambaram said.

Quality and execution

He said while funds are available, there is a paucity of infrastructure projects in the pipeline. "I wonder why there is not adequate projects in the pipeline. Every state should have a number of projects on the shelf," he added.

The Finance Minister also expressed concern at the quality of design of projects and the way they are executed. "These do not measure up to the requirement of the economy," he said.

India needs $475 billion of investment to improve its ports, roads, power and other infrastructure facilities during 2007-12.
 
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India likely to get more multi-billion dollar funds
BS Reporter / New Delhi July 22, 2007

The country may see more multi-billion dollar infrastructure funds like the $5 billion fund, known as India Infrastructure Initiative, created by Citigroup, Blackstone, IDFC and IIFCL, finance minister P Chidambaram said today. Speaking at a conference of chief secretaries on public-private partnership (PPP) here, Chidambaram said there was no dearth of funds for infrastructure projects.

"The problem is we do not have adequate pipeline of projects. Large private funds are looking at India with interest for funding infrastructure projects. Similar funds like India Infrastructure Initiative are waiting to be launched.”

Officials told Business Standard that some Japanese companies are interested in launching an infrastructure fund in India. "We are also in discussion with the Reserve Bank of India for providing money for infrastructure funding. This will make available an additional $5 billion funding," Chidambaram added.

Gajendra Haldea, adviser to Planning Commission Deputy Chairman Montek Singh Ahluwalia, said at current estimates, India would need Rs 17,57,000 crore of investment in infrastructure.

The central government would provide Rs 7,44,000 crore funds while states are expected to provide Rs 4,31,000 crore. "Private companies are expected to rope in Rs 7,44,000 crore (33 per cent of the total fund requirement) funds,” he added. Chidambaram also announced a Rs 100-crore corpus to help state governments in preparatory work of projects coming up with public-private participation.

"It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support," he said.

The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said.

If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant.

In case of successful bidding, the money would be recovered from those who get the contract, he said. Finance ministry sources said the fund would be sent to the Cabinet Committee of Economic Affairs after approval by the finance minister, who had proposed it in the Budget for 2007-08. He said 31 proposals under PPP were received during 2006-07, out of which 21 involving a project cost of Rs 9,325 crore were given in-principle or final approval.

Similarly, 25 proposals under viability gap funding were received from state governments last fiscal, of which 18 were given in-principle approval.
 
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India to use forex reserves for infrastructure
New Delhi, July 21, 2007

With $475 billion required over the next five years to spruce up shaky infrastructure, India will use a part of its foreign exchange reserves to fund such projects, Finance Minister P Chidambaram said on Saturday.

"The government will not be able to meet the growing funding need on its own for infrastructure. The country will need massive private investment," Chidambaram told a conference on infrastructure in New Delhi.

"Private investment need is around $18-20 billion a year," he said, adding the government was discussing steps with the central bank to use some portion of the foreign exchange reserves, estimated at around $220 billion, for infrastructure.

Earlier this year, some leading financial services companies, led by Citigroup, Infrastructure Development Finance Company, Blackstone and India Infrastructure Finance Company (IIFCL) had launched a $5 billion infrastructure fund.

"Similar initiatives are waiting to be launched," the finance minister said.

Chidambaram also disclosed plans for the proposed India Infrastructure Project Development Fund and said up to 75 per cent of the expenses of projects under public-private partnership will be financed by it.

He said the revolving fund with a corpus of Rs 1 billion ($25 million) will be used to assist states and will get replenished not only from successful bid projects but also through budgetary support.
 
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Rs 100 cr fund to help states
22 Jul, 2007, 0458 hrs IST, AGENCIES

NEW DELHI: The apathy of state governments toward infrastructure development on Saturday prompted the Centre to announce a Rs 100-crore corpus to help them in preparatory work of projects coming up with public-private participation.

“It would be a revolving fund that will get replenished from successfully bid projects. In case it needs to be topped up, it would be topped up through budgetary support,” finance minister P Chidambaram said at a conference of chief secretaries on public-private partnership (PPP).

The fund, to be called India Infrastructure Project Development Fund, would bear up to 75 per cent of development costs of projects till the bidding stage, he said. If the bidding is successful, the amount given to states would be treated as interest free loans and in case the exercise fails, the assistance would be converted into grant.

In case of successful bidding, the money would be recovered from those who get the contract, he said. Finance ministry sources said the fund would be sent to the Cabinet committee of economic affairs after approval of the finance minister,who had proposed it in the budget for 2007-08.

Although finances were available, there were not enough infrastructure projects on the shelf in states, Chidambaram said, noting that large private funds were looking at India with interest. After launch of two funds for infrastructure projects, including the $5 billion fund by Citigroup, Blackstone, IDFC and IFCL combine, other similar initiatives are waiting to be launched in India, he said. The finance minister reiterated that talks with the Reserve Bank were on to provide $5 billion from forex reserves for infrastructure projects.

“We have succeeded in convincing the RBI to lend $5 billion from the forex reserves to the India Infrastructure Finance Company Ltd, which would finance the infrastructure projects of Indian companies, especially for capital imports,” a finance ministry official said. Sources said the proposed borrowing from the RBI would not be spent in the domestic market to avoid increase in money supply and inflation.

Chidambaram said the pace of infrastructure projects had gathered momentum in 2006-07. As many as 12 states have agreed to sign MoUs with Asian Development Bank for providing technical assistance to PPP projects. Two such MoUs have already been signed, he added.

He said 31 proposals under PPP were received during 2006-07, out of which 21 involving a project cost of Rs 9,325 crore were given inprinciple or final approval. Similarly, 25 proposals under viability gap funding were received from state governments last fiscal, of which 18 were given in-principle approval, Chidambaram said.

He said while funds are available, there is a paucity of infrastructure projects in the pipeline.

“I wonder why is there not adequate projects in the pipeline.Every state should have a number of projects on the shelf,” he added. The finance minister also expressed concern at the quality of design of projects and the way they are executed.

“These do not measure up to the requirement of the economy,” he said. India needs $475 billion of investment to improve its ports, roads, power and other infrastructure facilities during 2007-12.
 
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Womenomics rises
22 Jul 2007, 0057 hrs IST,Amrita Singh & Neelam Raaj,TNN

When the first women-only mall came up in Bangalore two years ago, it was expected to be a runaway retail success. But its developers, the Prestige group, were soon forced to close the doors on their novel concept. Says Neeraj Duggal, vice-president of retail development for Prestige, "We could not fill the space in Eva as there weren't many women-specific products and brands back then."

Today, he'd be running way, way short of store space. From apparel brands to financial products, from automobiles to even the latest radio station, everything's aimed at the new woman consumer. The future of the world economy lies increasingly in female hands, wrote the Economist in a cover story titled Womenomics last year. And for marketers in India, profits increasingly rely on their power to loosen those Gucci purse-strings.

X FACTOR

No wonder that after years of playing second fiddle to men — and even children - when it came to marketing, the upwardly mobile woman is now spoilt for choice. She can talk on a pink mobile phone, using a women's prepaid SIM that allows her to make calls even when there is no balance, shop with a cashback women's credit card, bank at a women's branch, whiz around in a car bought with 'women on wheels' loan, stay on a women-only hotel floor and even go on an all-women holiday. Whew! If that isn't the power of the X chromosome, what is?

Even traditionally male categories such as technology and automobiles are queuing up to woo the queen bee. Remember the SUV ad where a young woman pushes aside a man to get into the driver's seat?

Well, she is in the driver's seat, literally, going by surveys that gauge consumer trends. According to a KSA-Technopak 2006-07 consumer survey, Indian women will be spending more on themselves than ever before. "As more and more young women join the workforce, they are buying things for themselves that give them a sense of confidence and independence. They also don't think twice before spending on themselves. They buy it now and pay for it later. It's all because they are far more confident today then they ever were," says Kiran Gera, president of Ficci's ladies association.

The increased spending power is clearly reflected in the figures. Says Atul Chand, vice-president, marketing for John Players, "If the men's branded clothing market is growing at 10-15%, women's branded wear is growing at 30-35% annually." No surprise then that last month, John Players, launched Miss Players. Allen Solly, another menswear brand, had taken the plunge earlier after it realized that women were behind the rapid sales in sizes 26 and 28 rather than thin men!

ALL ABOUT EVE

It isn't just urban woman that manufacturers are looking at. "Growth is equally buoyant in smaller towns and cities," affirms Chand. The small-town girl, according to a study by Grey Global Group, is three times more likely to think "a big house and a big car" are necessary to happiness.

Aspirations are definitely soaring and for companies, this is incentive enough to explore what will drive a woman to spend. When Hero Honda rode into the gearless scooter segment with Pleasure, it decided its focus was going to be women. So the company conceptualised Just4her outlets which were manned by female service supervisors and sales executives and offered anytime pick up and emergency services. All women scooter owners could become members of the lady riders club and get personal as well as accident insurance.

With Pleasure notching up sales of over 100,000 units at a time when the scooter market overall has been on the decline, brand experts say the company's strategy of reorienting to the new consumer on the block is paying off.

Two years ago, ITC hotel, the Maurya, was one of the first to heed the needs of its single women travellers. The Eva floor, refurbished recently, offers its female guests the services of a woman butler, optimal security by restricting elevator access to only those with room key cards and an interactive doorbell to see who is at the door.

"Demand for the Eva floor is so high that the rooms are always booked," says hotel spokesperson Prathima Vasan.

If everyone's rolling out the red carpet, it's all thanks to the power of the purse. The number of women employed in high-paying knowledge industries has been on the rise. According to Nasscom, almost 30% of the workforce in the IT industry comprises women and this is slated to go up to 45% by 2010. In the BPO sector, women make up for 50% of the workforce. Little wonder that they have become prized clients for banks who are customising products for them.

Admits Parag Rao, head of marketing credit card division with HDFC Bank, "Three years ago, only about 15% of our clients were women. Today, the figure stands at 25 and it's growing."

BANKING ON HER

Banks are increasingly attracting women who earlier, despite managing household funds, seldom approached a bank. Manju Srivatsa, vice-president, retail at UTI Bank, says, "Women are a little hesitant approaching banks as financial products have traditionally catered to men. It is this attitude that is changing."

From providing free accounts for children to ensuring a hassle-free banking experience by giving women account-holders a single point of contact for all transactions, there's a lot on offer. All because it makes more financial sense to target women. Says Harish Bijoor, a Bangalore-based brand consultant, "Men are selfish buyers and usually buy only for themselves but women make purchases for the entire household. In most households, it's they who control the purse strings."

But women can be tricky customers and experts warn that businesses could read them all wrong. It's easy to straitjacket women customers into the stereotypical alpha female or the fashionista merely satisfied with discounts at beauty outlets. But with the modern women refusing to fit into any of these neat categories, marketers may have to do more than just think pink.
 
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UPS faces protective challenges with India
By RAYMOND THIBODEAUX
For the Journal-Constitution
Published on: 07/22/07

New Delhi, India — Namdan Kishore's trips to United Parcel Service's retail store in this sprawling business plaza of India's dusty capital have become routine. As an office assistant for a real estate developer, he spends most of his days copying paperwork, making copies of copies and sometimes express mailing them.

"I used to go to a small photocopy shop in this same plaza," Kishore said. "The copies here are better and here there is good air-conditioning," a competitive leg-up in New Delhi, which at an average temperature of 115 degrees feels like a furnace in the summer.

He's not exactly the big-spending corporate client that international express couriers dream about. But tapping into even a modest percentage of little spenders like Kishore adds up in a country like India, with 1.1 billion people.

With its Indian partner, Jetair Business Solutions, Sandy Springs-based UPS expanded business in India by a whopping 25 percent last year, representing a growing — if deliberately undisclosed — portion of UPS' $47.5 billion in revenue. The UPS Store in New Delhi, the company's fourth in India, is part of a rollout of 150 retail stores over the next four years.

With markets at home becoming saturated — and with an economy appearing to slow down — many American companies are looking toward the world's fastest-growing economies, India and China, to pick up the slack. India's economy is expanding at its fastest rate in nearly two decades: Its $771 billion economy grew by 9.4 percent in the last fiscal year, slightly higher than expected.

But India's postal service wants to rein in international express couriers doing business in India, in what many here see as a backward step in the liberalization of the country's economy.

A recent proposal to be reviewed by Parliament gives the postal service exclusive rights for express delivery of letters weighing up to 300 grams within the country, virtually shielding the government agency from competition.

The proposal also blocks foreign ownership of express couriers operating in India and requires large private courier services to fork over 10 percent of their profits to a fund that helps the government improve its delivery service to the country's rural areas.

"Until we resolve this issue, it's going to be difficult for foreign companies to expand their operations inside India," said John Fennerty, deputy economic counselor for the U.S. Embassy in India. "In this climate, it's difficult to make business judgments."

UPS Jetair's managing director, Pirojshaw Sarkari, said the express courier industry has banded together to fight the new proposal.

"We are working to show the Indian government international best practices with regard to the basic principles on which the express industry and national postal services should interact, such as by having an independent regulator for the industry [and] a level playing field in the competitive services market between the national post and the private sector," he said.

Protectionism tradition

India historically has favored trade measures that have protected its own markets from foreign competition, even as it decries unfair restrictions of its exports abroad. It wasn't until the early 1990s that India began a big push to open its markets to the West, resulting in a huge export boom that helped international couriers flourish.

Still, vestiges of those older trade policies persist. In the latest tiff, the United States and Europe point to India's high import duties for wine and liquor, which are more than three times the cap set by the World Trade Organization. Just off the heels of a decision to allow imports of Indian mangoes, the United States has chided India for not importing American wheat, which could help feed India's 400 million malnourished children.

"If the political and legislative climate wasn't good, we would not have so many companies coming to invest their money in India," said G.K. Pillai, India's commerce minister.

Foreign direct investment in India more than tripled last year to about $18 billion, according to government figures.

With more foreign money circulating in India's economy, the country's government can better afford infrastructure improvements such as more roads and more sea and airport facilities, Pillai said, adding that a $140 billion plan is in the pipeline for those projects.

In a recent UPS annual survey of 1,200 Asian business leaders, more than half of those polled said India's political and legislative environment was less-than-friendly to foreign companies. Weak transportation and power infrastructure were also cited as disadvantages to doing business in India.

In India's larger cities like New Delhi and Mumbai, formerly known as Bombay, the roads are often packed with city buses and rickshaw taxis battling for the least-clogged lanes — and more importantly swerving to avoid the cows that wander aimlessly through the city's snarled rush-hour traffic.

"There are challenges in terms of infrastructure, the regulatory and tax environment, but those things are not uncommon when doing business in developing countries," said John Flick, UPS International spokesman. "All these things require a deep local understanding and we have a local UPS team working on those challenges."

Slowly building the brand

For now, UPS is hoping its retail stores bring more brand-name recognition in a country where many people still go to streetside letter-wallahs who type up their correspondence on manual typewriters.

Already, international express carriers are part of a new trade route as millions of Indian expatriates living in the U.S. and Canada use companies like UPS to send an endless stream of birthday and wedding gifts, as well as the latest technological gadgets that might be hard to find in India. In return, Indian families here send their relatives abroad hard-to-find Indian spices, textiles and other gifts from the homeland, turning international companies like UPS into the modern-day equivalent of ancient trade routes. The UPS Store chain offers packaging and express shipping, as well as digital printing, office supplies and ticketing services for Jet Airways, one of India's largest airlines.

"With some aspects of our retail store, we have to create demand," said Hauafreed Nasrwaingi, marketing director for India's UPS-Jetair joint venture. "When I tell them they can send stuff to the United States within 48 hours or less, they are happily surprised."
 
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