Booming and Bubbling India-VI

I had just finished my entry last week when I got a mail from Anand in US giving me a link that was on India’s automobile sector. And within seconds, I had another mail from Mithilesh Jha who is an IITian (Kanpur) from Bihar. After working in many companies, Jha has now his own start-up ‘Masamb Electronics Systems Pvt. Ltd.‘ His area of activity will be chip design. I have requested him to involve the engineering colleges of Bihar and he has promised me to do that soon. All over the country the entrepreneurs of all sorts are busy in pushing ahead the economy in their own way, while politicians are busy in creating speedbreakers to the growth. Here are the boom stories. Some may be bubbles.

10% GDP this fiscal: Union Finance Minister P Chidambaram is confident of GDP growth to touch 10 per cent in the current fiscal.

Billion-dollar Indian companies: India has today 71 Indian companies that are in the billion-dollar club league. Interestingly, the Gujarat Co-operative Milk Marketing Federation (GCMMF), the makers of the Amul brand of dairy products, has joined the club, as its revenues for 2006-07 revenues stood at Rs 4,277.84 crore or $1.04 billion. Amul, in contrast, is the achievement of the pooled efforts of 26 lakh dairy farmers across 13 districts of Gujarat.

Vodafone to invest $2 bn in India: Having constituted a new board to administer India’s third-largest mobile firm Hutch-Essar, Vodafone announced its plan to invest two billion dollars in the country this year.

Retail design emerges as hot career:
The retail industry is booming. And retail design, as seemingly niche career is in demand with students across the country.

Biotechnology exports up 47%: The Indian biotechnology industry grew by 30.9% during 2006-07 to reach Rs 8,541 crore and upped exports by a massive 47% to Rs 4,937 crore. At the current exchange rate, the industry’s topline works out to be $2 billion and exports $1.2 billion. The industry is confident to reach a topline of $5 billion for 2010.

Engineering exports are the largest foreign exchange earners and account for 20% of the country’s total exports. Of India’s total exports of $125 billion for 2006-07, engineering exports stood at over $26 billion.

Attrition rate: Because of increasing opportunities and employee aspirations induced by robust economic growth, the attrition rate at 40% is alarming in the services sector, while the same in manufacturing was 20%.

One PC for every 50 Indians: About fifty Indians now share a single personal computer (PC). IDC, the research firm’s India Quarterly PC Tracker for the first quarter of 2007-08 (Q1FY08) pegs the Indian client PC (desktops and notebooks combined) base at 22 million – a figure that has more than doubled from 9.5 million in 2003. By 2015, two out of every seven people in the world will have a personal computer, with India, China, Russia and Brazil emerging among the fastest growing markets.

Robust performance by the manfacturing sector propelled the overall industrial output of the country during April 2007 to a growth of 13.6% as against 9.9% in the corresponding month a year ago. Manufacturing sector grew 15.1% this April, as compared to 11% in April 2006.

India far ahead of China: China is far behind India in the software sector and India should focus its efforts towards leveraging this lead to move ahead in the global market.

: OVL to buyout Exxon Mobil stake in Brazil: The Government has allowed ONGC’s overseas arm, OVL late last week to invest US $ 820 million to pick up 30 percent participating stake in Brazil’s oil field held by international oil major, Exxon Mobil in the BC-10 project in Brazil. Patni Computer Systems is close to acquiring an European IT in the next two months. Carborundum Universal (CUMI) has entered into a memorandum of understanding to pick up 84.14 per cent stake in Volzhsky Abrasives Works (VAW) located in Volzhsky of Volgograd region in Russia. Reliance Industries is eyeing acquisition of oil refineries in the United States and Middle East. The Mukesh Ambani-run firm looks at expanding its overseas portfolio. ICICI Venture – the private equity arm of ICICI Bank- has acquired majority control in USbased clinical research company Radiant Research. Radiant has 26 other clinical centres. The current deal led by ICICI Venture could have been valued at $150 million plus. Mahindra Systems and Automotive Technologies (MSAT), the auto components arm of Mahindra and Mahindra (M&M), is in an advanced stage of negotiations for acquisition of at least four overseas companies in the areas it operates – stamping, composites, forging and gear box. The total acquisition cost may be around Rs 1,000 crore.

R&D: :Motorola India: India will be the hot spot for the $42.7 billion telecom giant Motorola for coming out with new technologies suited for the emerging markets from Motorola India Research Labs situated in Bangalore, which was set up in 2005. Agilent Technologies, a $5 billion measurement solutions provider, plans to ramp up its R&D presence in the country significantly in the next two years, tripling the R&D headcount in the country from the present 150 to more than 450 by 2009. India will launch its first dedicated military satellite in August this year providing it the capability to monitor missile launches in its neighbourhood. India is likely to capture 15 per cent of the over $54 billion market in the upcoming Knowledge Processing Outsourcing (KPO) industry by 2010. The average expenditure of pharmaceutical companies on research and development has increased four times in the last five years. “There are at least 20 R&D heads with leading pharmaceutical companies and clinical research organisations (CROs) in India earning salaries of over Rs 1 crore a year.” India has emerged as the largest R&D centre for Cambridge Silicon Radio (CSR), a provider of personal wireless technology, including Bluetooth and FM receivers, outside the UK. ‘Renault to design $3,000 car in India’ French car manufacturer Renault is to create a USD 3,000 car in India within three years, French newspaper Le Figaro reported on Wednesday. Renault planed to open a third “techno centre” in India and hire 1,000 engineers to create a super low-cost model that would not be sold in Europe.

Manufaturing: Hero Motors prefers to call itself an “integrated engineering solutions” provider and is already a major component supplier to companies in Europe and the US. It recently got an order for gears to be fitted on 800-cc BMW transmission units.

FII inflow hits $4 bn mark: Foreign institutional investments this year has crossed the four billion dollar mark.

Pulses production: India is expecting to reverse a decline and actually record a 14% jump in pulses production to 17 million tonnes (mt) in 2008-09, as the high-yielding, hybrid variety of pigeon-peas (arhar) is expected to push up their yields by 25%.

India starts producing ethanol from sweet sorghum: The country’s first plant for commercial production of ethanol from sweet sorghum, a rainfed multi-benefit crop, has gone on stream at Mohammed Shapur village in Andhra Pradesh. Sweet sorghum is like any ordinary sorghum but with a high content of sweet juice in its stalks. While the juice is used to produce ethanol biofuel, the grains can be used as food or feed.

India’s AIDS not epidemic: India, which has been repeatedly accused of denying the size of its AIDS epidemic, probably has millions fewer victims than has been widely believed, according to a new but unreleased survey.

Biotechnology starts to sprint: In two years (2005-07) the biotechnology industry has virtually doubled in size to reach $2 billion and is confidently looking forward to a $5 billion benchmark by 2009-10. India has now overtaken China in acreage under Bt cotton.

Railways in topgear: By 2015, passenger trains will move at an average of 100 kilometres per hour from 55 kmph currently, slow-moving goods trains will ratchet up their speed from 24 kmph to 60 kmph; and passenger traffic will soar from 6 billion annually to 10 billion.

Speed Post from home: To compete better with private courier companies, the Department of Posts has decided to set up call centres in eight cities – Delhi, Mumbai, Kolkata, Chennai, Pune, Bangalore, Hyderabad and Ahmedabad – with toll-free numbers that customers can ring and get their packets picked up from home.

WB clears Salt Lake to Howrah Metro project: The much touted East-West Metro, the Rs 5,000-odd crore project, to connect Kolkata’s twin city Howrah in the west with IT hub Salt Lake in the east, was cleared by the West Bengal cabinet today. It would require a tunnel under the Ganges. Will I be able to see this project running?

Renewables contribution increasing: The share of renewables in the 10th Plan power generating capacity addition is 20%, double the initial target of 10%. The capacity addition during 2006-07 has been 1,191 mw of which wind power 933 mw, biopower 199 mw; small hydro power 69 mw. Renewable power capacity addition in 2007-08 is expected to be 2,000 mw.

Captive power supply delicensed: The Centre has delicensed the supply of power produced by captive power producers to overcome peak shortages through an amendment to the Electricity Act, 2003 via the Electricity (Amendment) Act, 2007 coming into effect from June 15. Power shortage is only holding the GDP growth below 10%.

India may stage Formula-1 Grand Prix: The Indian Olympic Association has reached an agreement with Formula One boss Bernie Ecclestone to stage a Grand Prix in New Delhi by 2009.

Indian excels: Subra Suresh, an IIT Chennai alumnus, who is currently the Ford Professor of Engineering in the Department of Materials Science and Engineering at MIT, will succeed Institute Professor Thomas Magnanti as the next dean of the School of Engineering, MIT provost Rafael Reif announced Thursday on July 23. Knighthood for Rushdie Salman Rushdie, whose Midnight’s Children won the Booker Prize, will be knighted while Indian-origin rights campaigner Shami Chakrabarti also figures in the Queen’s honours list this year.

Indians hiring in America: Now Infosys and other Indian outfits are hiring aggressively in the U.S. Wipro Ltd. is scouting U.S. locations for two big software centers that eventually could employ hundreds of programmers each. “The Indians are doing to the world’s IT processes what the Japanese did to manufacturing,” says analyst John McCarthy of Forrester Research Inc. And now, like Japan’s carmakers before them, the Indians are becoming major employers in the U.S. as well.

Is not the going is great?

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