IITians Go Rural

Posted on December 19, 2008 by indra

On occasion of Pan-IIT meet in Chennai, many have talked and written about IITs and IITians that is really informative. IIT-Madras has, for example, recruited over 200 faculty of whom at least a third did their bachelor’s in one of the IITs and had gone abroad to do PhDs. It is estimated that there is a pool of 60,000 PhDs from India in the US.

Surprisingly, IITians are still busy in ‘exploring areas where they can contribute to the larger cause.’ As reported, very soon a new website http://www.alumnet.iitkgpernet.in will electronically link all alumni and provide an effective platform for sharing ideas and contributing together.

Suggestions regarding the expectations from IITians are many. While one calls upon all IIT alumni to work towards evolving a good and low-cost education system, the other pleads to join the village adoption initiative. Nandan Nilekani, as author of his well documented book ‘Imagining India’ wishes IITians help in revamping the education system radically.

An Indian Institute of Technology survey says every IIT-ian has created 100 jobs and that every rupee spent on an IIT-ian has ‘created an economic impact of Rs 50 at the global level, half of which is India’s share’. Many celebrity alumni have given their own opinions on the glorious roles of IITians: ‘IIT-ians have created a global brand‘ ‘IIT-ians have brought glory to the country‘

Interestingly Pan-IIT this time has opted to focus on the India that lives in villages, according to a news report covered in prestigious ‘Business Week‘ too.

The IITs’ old boys will engage in the development of India’s 6 lakh-plus villages where over 70% of the population lives. For all you know, our IIT men may be able to address village-level problems before the truant politician does. And in the bargain, some of them may hopefully take to politics!

I wish both IITs and IITians can look into the ways and means to transform the rural India as priority because of its being away from the media galore. The coverage of rural India in the print and digital is extremely inadequate. While IITs must create technologies such as an extra low cost water filters, room coolers and refrigerators that can help the rural India to improve the quality of life, IITans must help in building and upgrading the existing rural schools with setting up a creativity centre, a library in each school or by getting the school teachers trained in computer and English language. It can start with a simple step of visiting a village school by every IITians and talking with the students there. If IITians focus on the single issue of universalizing the education, a good education, the rest may come automatically. I am sure if each IITian has created 100 jobs, each IITian can also help get a rural school upgraded to the desired standard. I wish the government agrees to name the school after the IITian, if it helps.

While I was going through the Business Week, I found another article in Business World ‘The Real Nation Builders’ that says, ‘As IITians bring global glory, bright engineers from lesser-known institutes build the country.’ The glory is not restricted to IITs and IITians.

Many things are happening in IITs that the IITians of yester years find interesting.

PS: ‘PAN IIT-2008’ – PM’s inaugural address “In the last six decades the IIT system has produced over 170,000 graduates. It is generally estimated that about a third or more of these alumni have found opportunities in other countries where they are universally acknowledged to be leaders in their fields of endeavour.”

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Innovating India

Posted on December 18, 2008 by indra

Any nation or an enterprise is judged by its innovativeness on long run. India’s engineering talent and IT power has created a place in global technological fraternity. However, innovations are being taken up as priority in almost all sectors, and companies- small and big too. According to a recent McKinsey Global Survey, some 70 per cent of corporate leaders say innovation is among their top three priorities for driving growth.

Indian Space Research Organisation (ISRO) is moving ahead towards establishing the first “human colony”on moon. It is examining the possibility of establishing a robotic set-up or unmanned mission on the moon. And as some claim, the moon has plenty of sources for energy.

Scientists of the Defence Research and Development Organisation (DRDO) have demonstrated that they are capable of developing an indigenously-developed anti-ballistic missile shield that could protect not just Delhi, but other major metros and key installations from any nuclear attacks, whether it come in from Pakistan or China.

Simultaneously, a small innovator such as Bhanjibhai Mathukiya from Junagadh, has created an affordable mini tractor of 10 HP for the small groundnut and orchard farmers in Saurashtra. The innovation has been short-listed for the Indian School of Business, Hyderabad’s ‘Metamorphosis’ event. According to Mahesh Patel, chief innovator at the Grassroots Innovation Augmentation Network who has been incubating the small tractor, a non-exclusive rights of the invention have already been taken up by an Anand-based company, with many others showing interest. The tractor will cost about Rs 1.6 lakh and the banks will feel comfortable in financing the tractors to petty farmers. Perhaps the target cost would have been Rs 1 lakh.

And interestingly, school children studying in eighth and ninth standard are trying to use Papaya leaves for driving away mosquitoes, and are creating about 150 different colour combinations using vegetables to develop ink to be used for permanent and non-permanent marker pens. School children are grouped under Initiative for Research and Innovation in Science (IRIS). The project got support from Intel Education who has collaborated with the Confederation of Indian Industry and Department of Science and Technology.

And there are individuals like Kranthi Kiran Vistakula, who has the passion to innovate that made him take a break from his studies in MIT to work on an innovation, active heating/cooling jacket, claimed to be the first of its kind. The US as well as Indian Army is showing keen interest in the project.

And Devesh Ashok Kulkarni, an innovator from Mumbai becomes the nominee for the best 2007 invention. Kulkarni has developed a car jack that can be integrated with the car chassis. It uses engine power to lift the car body. It will avoid the unnecessary and tedious hassle during the change of a punctured tyre.

Of many innovation awards instituted, the EMPI-Indian Express Indian Innovation Awards were representative of innovations in organizations this year. Recipients were:

Tata Consultancy Services (TCS): It started an adult literacy programme around 2000, using an in-house developed software that can make the people literate in just about 35-40 hours training without any instructor.

Karnataka State Road Transport Corporation (KSRTC): After the implementation of AWATAR (Any Where Any Time Advanced Reservation), a web enabled ticketing application, the KSRTC transformed into a profit making Rs 1000-crore turnover company.

Water Supply and Sanitation Department, Government of Maharashtra: The department started a cleanliness competition at the taluka, tehsil and district levels with the winners getting lots of prizes and publicity. This resulted 7,000 villages in Maharashtra free from open defecation.

Multi-Commodity Exchange of India: The contribution of MCX on the Indian commodities market has been innovative application of technology through IT, speed of implementation, and domain knowledge in the commodity segment
.
Keggfarms: Set up a new distribution model that raised chickens in independent nurseries, and developed ‘Kurolier’, a coloured bird, which provides more meat and eggs, as a substitute for chicken in regular diet.

Midas Communications: Its wireless product corDECT and DSL flagship DIAS, today connect over three million members of the rural community.

Tata Motors: Tata Ace, with a capacity of around 0.75 tonne has achieved last mile connectivity and more than a lakh of these vehicles transverse roads of rural India today.

As we move around and think over for a while, we find the results of innovations in products and services everywhere. See the varieties in breads, biscuits, cookies, and candies. Watch at the man who comes for the meter reading and provides us with bill and collects the cheque too. Try to look at the cell phones or for that matter any thing you had been familiar with, you can notice the new innovations.

Innovation is certainly central to a company’s strategy and performance, but getting it right is as hard as ever. Indian companies must shift its priority on design. I strongly feel that our education must emphasise on innovation and entrepreneurship from quite an early stage.

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Sitaram Yachuri’s Concern for Development

Posted on December 17, 2008 by indra

Lately, Hindustan Times regularly publishes Sitaram Yachuri’s lead articles on editorial page. He is an intelligent leftist and many of his arguments are really worth attention. In a recent article, he wrote about the development of Gujarat.

“Despite the tom-toming of a vibrant Gujarat (a la the BJP’s ‘Shining India’ campaign), the fact remains that Gujarat is one of the most indebted states in the country. Its public debt to GDP ratio is a whopping 28.5 per cent. According to official figures (widely believed to be a gross understatement), over 500 farmers in the state have committed suicide. This is primarily due to rural indebtedness, which, according to the NSS’ 55th round data, is, at around 40 per cent, widely higher than the national average of 25 per cent. Irrigated area declined by 25 per cent and agricultural production fell by 4.6 per cent during the last five years.

A UN University study reveals that poverty rose to 17 per cent from 12 per cent during this period. Its Human Development Report, 2004, states, “Gujarat has reached only 48 per cent of the goals set for human development.” On the health front, 74.3 per cent of women and 46.3 per cent of children are anaemic. In social sector spending (as a proportion of total expenditure), Gujarat ranks a lowly 19 among 21 major states. On minimum wages, it ranks 8th. Despite the fact that large tracts of the state face a drinking water crisis, the Modi administration diverted $ 255 million to supply water to industries (read: vibrant Gujarat), according to a CAG report.”

I am sure as a member of CPM politburo, he must also be watching at the development of West Bengal. In West Bengal, leftists have been ruling for more than three decades. Further, since 2004, the party has an alliance with the central government. West Bengal gets whatever it asks. And the excuse of centre’s indifference as reasons for no progress can’t hold good any more. I am sure Yachuri must express his concern about the parameters of development in West Bengal. In almost all, West Bengal is in the lower half of the list of states. The left and Yachuri must prove their development model in the left-run state, as it would have been naturally easy for them to implement all their ideas in last 30+ years.

Will Yachuri write another article comparing Gujarat data made available in his article with that of West Bengal and say that West Bengal government under leftists is working miracle? Left also claim that Modi plays in the hands of industrialists. What is the condition in West Bengal? Who are leading the industrial development there? The story of Todi and his influence on the government has got by now a global publicity.

I have at least one data at hand through the media: “Bengal topped the list of suicides with 15,725 suicides, including 6,605 women, compared to 15,015 in 2005 and 13,424 the previous year.” Will Yachuri show his concern about this and see that his government takes some proactive steps?

And now here is an excerptbased on a book RURAL COMMERCIAL CAPITAL AGRICULTURAL MARKETS IN WEST BENGAL by Barbara Harriss-White, that is a serious research:

“The government policy of protecting the local agricultural elite in terms of concessions and privileges (thereby shunting aside petty trade by unlanded or small-time farmers), its inaction in improving infrastructure and technology, and of looking inwards rather than working towards progress, are all direct factors in the historically up-and-down performance of the sector and the widespread poverty in the villages.”

“When Marwaris moved to rural West Bengal to fill the void of trade in agricultural goods, they wisely started small before expanding to the control of trade in wholesale and retail, import, export, stocking and cold storage – basically, the whole market economy shopping list. They did not limit themselves to one type of crop, but diversified to various agricultural commodities. They have continued to pullulate their large share of the aggregate agricultural production and supply, as well as land ownership, trade privileges and feudal power. The deeply-rooted establishment of the Marwari business community is exemplified by their representation in the board of the Bengal Rice Millers’ Association – two-thirds are Marwaris.”

I wish the whole lot of smart politburo members of CPM including Karats and Yachuuri try seriously to prove their ideologies of Marxism to improve the living conditions of those at the bottom of the pyramid so that the rest of India can benchmark it. However, if they have failed, they at least must allow the people of India to go ahead to attain the goal of prosperity through the model our intelligent and serious economists are trying to go for.

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Booming and Blooming India-XXXI

Posted on December 17, 2008 by indra

Inc’s Grand H1 show: For the half year ended September 2007, interest coverage ratio for Corporate India, excluding banking sector, has gone up from 10.8 to 11.7 times.

India-born Vikram Pandit is Citigroup’s new CEO: India-born Vikram Pandit has been appointed the Chief Executive Officer of Citigroup, the world’s largest financial services organisation, with immediate effect.

Rise of Indo-US execs reflects a Rising India: The ascension of Indian-born leaders like Vikram Pandit, the new CEO of Citigroup Inc., tracks the economic rise of their home country, once seen by US business as a large market and a source of low-cost technology workers, now viewed as a business power that rivals the US in some industries.

Lancaster University honours Infosys chairman: Infosys Chairman Narayana Murthy has been conferred with an honorary Doctorate degree- a Doctor of Science – by Lancaster University in recognition of his lasting contribution to the fields of business and business education.

New generation of cars to be launched in India: A global consortium of top students, professors and experts in various engineering fields plan to use the rapidly growing Indian automotive market as a launch pad for a new generation of cars that could revolutionize the international automobile industry.

We will be better than US: A new nine-nation opinion poll has found that an increasing number of Indians believe their nation will be a major global power by 2020, trumping even the US.

GE puts India on centre stage: GE has drawn up plans to make India a global sourcing hub for all its core businesses and has decided to develop and manufacture products locally for global markets and partner in large-scale projects in areas such as energy, water, aviation and rail transport.

Gulf Finance to invest $10 bn in Panvel SEZ: Bahrain-based Islamic investment bank Gulf Finance House (GFH) has signed an agreement with the Maharashtra government to set up a $10 billion (Rs 40,000 crore) special economic zone (SEZ) in five years.

Reliance plans $24 bn investments in petrochemicals: Reliance Industries has planned to spend $24 billion (Rs94,500 crore) over the next ten years to set up petrochemicals projects in the Middle East.

Nanotechnology-the new frontier for Indian IT power: India is hoping nanotechnology could provide a new thrust to its booming economy and to become a world leader in a market expected to be worth one-trillion dollars by 2015.

Wipro wins award for best software testing tool: IT major Wipro Technologies has won the best practice award for software testing, set up by the US-based International Institute for Software Testing (IIST). Wipro is the largest third-party offshore testing service provider worldwide and has also set-up the first wireless fidelity (Wi-Fi) pre-certification and certification lab at its Bangalore campus.Wipro focuses to system integration biz: Wipro Ltd, India’s third largest software services company, is looking to earn nearly one-sixth of its global IT revenues by March 2009 from system integration (SI) business, or by providing hardware, software solutions and services.

285 US dealers sign up to sell Scorpio: 285 US dealers have signed up to sell the vehicle and are investing $178 million in setting up sales and service outlets.

Daimler, Munjals to tie up for CVs: German automaker Daimler Trucks has zeroed in on the Munjals of Hero Honda for a joint venture to make commercial vehicles in India. Volvo, Eicher set up CV venture: Sweden-based Volvo AB and Delhi-based Eicher Motors announced a joint venture in India, the fifth biggest commercial vehicles market in the world, which will take on leaders Tata Motors and Ashok Leyland by selling the full range.

3 Indian cos bid for Singapore power giant: Three domestic power companies – Reliance Energy, Tata Power and GMR Infrastructure – have submitted indicative bids to acquire Singapore-government owned Tuas Power that has a capacity of 2,670 Mw and accounts for 26.1 per cent of Singapore’s electricity generation.

Maruti to invest Rs 1,750-3,500 cr for R&D: Maruti Suzuki India will put up a research and development (R&D) facility in India at an investment of between 50-100 billion yen (Rs 1,750-3,500 crore) over the next three to five years on the lines of Suzuki’s R&D facility in Japan, in which there would be facilities for test drives among other things..Suzuki’s next global car to drive out from India: After identifying India as a global export hub, Japanese auto major Suzuki Motor Co is planning to roll out its next ‘world car´ from the country. According to sources, the car that is being targeted at the European market will be rolled from Maruti Suzuki India’s (MSI) facility at Manesar.

Manufacturing drives IIP up: According to the Index of Industrial Production (IIP) data released by the Government on Wednesday, the manufacturing sector saw an impressive growth rate of 13.3 per cent during the month as against 3.8 per cent during October 2006.

India whizzes past China in ‘creativity’ alley: India has whizzed past China in the “creativity” alley, with the country occupying 15th position on the list of nations with most advertising awards as against the world’s most populous nation’s 19th rank. While India got 39 advertising awards, China received 18.

IT firms increase academia interaction: Tata Consultancy Services, the country’s biggest software exporter, as well as Infosys Technologies, Satyam Computer and HCL are among the companies that are either already working with engineering colleges or are planning to collaborate with the academia to churn out professionals with the right skills.

US market better money-spinner for Indian cos: For the 11 Indian companies listed in both US and Indian bourses, the market capitalization gain on US bourses was more than $1 billion higher than that on the domestic bourses here over the past week.

M&A deal sizes to touch $80-billion: The spurt in mergers and acquisitions (M&A) activity being witnessed since the last couple of years, involving Indian companies, is expected to touch a combined deal size of $100 billion next year.

LSI plans to up R&D from India: US-based LSI Corporation, a silicon-to-systems provider, plans to enhance the research and development activities at its Indian R&D centres in Bangalore and Pune.

India tops in providing education loans: India occupied first place in the world in providing education loans, benefiting one million students till September this year, according to Union Finance Minister P Chidambaram.

India emerges Top 3 economy in the world: With an estimated intangible assets component of 74% (as proportion of TEV), India is just behind US (75%) and Switzerland (74%), according to Global Intangible Tracker 2007 (GIT), the most extensive global study ever on intangibles assets by the London-based Brand Finance Institute.

Mkt sees Sensex touching 25K-mark in 2 years: Market players feel the stock market would remain bullish and the BSE Sensex may top the 25,000-mark in the next two years, according to a survey conducted by Industry body FICCI.

India no.2 in AT Kearney FDI confidence index: India retains second place in the Index, a position it has held since displacing the United States in 2005. China and India continue to rank first and second in the 2007 Foreign Direct Investment Confidence Index, a regular survey of global executives conducted by management consulting firm AT Kearney.

Rs 1-lakh Tata car trendsetter: BusinessWeek: It is turning out to be a dream year for Indian conglomerate Tatas — BusinessWeek has termed its Rs one-lakh car as one of the trendsetters of 2007, while naming Ratan Tata among the world’s Most Important People of the year.

IBM sees India as its global hub: Betting big on India advantage, one of the world’s biggest IT Companies IBM has said that the country would become a hub of global delivery for the company, providing research software besides contributing significantly to its revenue.

Mico integrates Indian subsidiaries with global biz: Most of Mico plants in India will now be global hubs or lead plants for some of the products they make. The Jaipur plant of Mico which manufactures about 5 lakh units of distributor pumps every year will now be the lead plant for this product globally. For injectors, the Nashik plant will be the lead plant.

Nalco to invest Rs30,000 cr in Indonesia: State-run National Aluminium Company (Nalco) plans to invest Rs30,000 crore over the next five years to build a five lakh tonne smelter and a 1,500 MW captive coal-fired power plant in Indonesia to expand its overseas business.

Computer software exports increases by 29%: The total export of computer software and services during 2006-07 has gone up by 29.4 per cent at $11.26 billion, according to the estimates made by the Electronics and Computer Software Export Promotion Council (ESC).

ITC readies hi-tech supply solutions for paan shops: ITC is working on developing an application that will allow the owners of the small shops that typically sell cigarettes and confectionery, the so-called paan and kirana stores, to place orders through mobile phones.

B`lore evolving gen-next in-car audio systems: An i-pod that can interface with the car audio and a music system that can play songs through voice command are just some of the products being developed at the chip level in the city by global corporations

BioSpectrum product award goes to Biocon: Bangalore-based Biocon’s BIOMAb EGFR, a therapeutic monoclonal antibody-based drug for treating solid tumours of epithelial origin, has bagged BioSpectrum’s product of the year award. It is for treats cancers of the head and neck.

Satyam Computer opens centre of excellence in Japan: Satyam Computer Services has opened a centre of excellence in Japan, code-named Kanzen, to strengthen its presence in that country significantly.

Grover and Associates wins US award: Karan Grover and Associates (KGA) has been awarded the US Green Building Council’s Platinum Award for creating one of the world’s “greenest” interiors in the ABN Amro Bank branch at Ahmedabad. Vadodara-based KGA is the first architect firm in the world outside the United States to bag this award.

India retains top offshoring slot: Gartner India continues to be the undisputed leader in offshore services owing to government support, English language capabilities and low cost of doing business. India accounts for about 65-70 per cent of the global offshoring pie.

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Terrorism: Ratan Tata vs. P Chidambaram

Posted on December 17, 2008 by indra

As reported in Times of India, Ratan Tata, chairman of Tata Sons announced to set up his own anti-terror mechanism: “We will now look at anti-terrorism or protection of our assets and our people ourselves and we will try to create a deterrent.” Is Mr. Tata trying to take over the task that is the responsibility of the state and central governments through its various agencies? Will the government permit that? Did Mr. Tata express his plan after a careful thought or sufficient consultation? Will it be limited to making Tata’s establishments safer through technical inputs and designs? Will other private companies follow the Tata’s ideas? I wish the government sit with the private players including Tata to understand their views and their contributions in abating the terrorism.

It is interesting that Mr. Chidambaram has already expressed his views against anti-Naxalite group ‘Salwa Judum’ in Chhattisgarh, and said, “Law and order and law enforcement is the responsibility of the state government… we do not approve of non-state actors taking over the responsibility.”

Under the shadow of Mumbai menace, the new home minister has already got two new bills on a separate agency and tighter anti-terror law through the parliament to fight terrorism almost unanimously. After many years such unanimity has been seen. However, is it not surprising that the proposer of the bill against terrorists have carefully avoided the word ‘terrorist in naming the bill? It is named the Unlawful Activities (Prevention) Act (UAPA) unlike POTA. The new bill has a signature of UPA. I don’t know if it has come because of the Lalu and Rambilash, or it reflects the way Congress works.

I don’t know how far the bills will deter the terrorists. But it is certainly going to improve the image of the government that has started working overtime in top gear after Chidambaram took over of the home ministry.

I wish the government considers Mr. Tata’s idea as complimentary to the government actions and responsibility. If the government can use the resources of private sectors to successfully solve this global menace, it will be an unique model for the world to follow.

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Great Indian Middle Class

Posted on December 16, 2008 by indra

The great Indian middle class has been a hot topic. An article in the latest ‘McKinsey Quarterly’ offers the following projections about the great middle class in India. It is certainly exciting.

 Over the next 20 years, India will likely grow to become the world’s fifth-largest consumer economy, up from 12th now.

 If India can achieve 7.3 percent annual growth – a reasonable assumption – consumer spending will quadruple, from about 17 trillion Indian rupees ($372 billion) in 2005 to 70 trillion rupees in 2025. The dramatic growth in India’s middle class, from 50 million to 583 million people, will power this surge.

 In 1985, 93% of the population lived on a household income of less than 90,000 rupees a year, or about a dollar per person per day; by 2005 that proportion had been cut nearly in half, to 54%. By the estimate, 431 million fewer Indians live in extreme poverty today than would have if poverty had remained stuck at the 1985 level. If India can achieve 7.3% annual growth over the next 20 years, 465 million more people will be spared a life of extreme deprivation.

 Contrary to popular perceptions, rural India has benefited from this growth: extreme rural poverty has declined from 94% in 1985 to 61% in 2005, and as per projection that it will drop to 26% by 2025.

 The growth that has pulled millions of people out of poverty is also building a huge middle class that will be concentrated in India’s urban areas. In absolute terms the country’s urban population will expand significantly, from 318 million today to 523 million in 2025.

 Today 57 percent of private spending is spread across rural areas, but by 2025 cities will command 62 percent of the country’s spending power.

I personally feel that the definition of the middle class itself is flawed and data collection has its limitations in India. I see it all around. Even the shanties are having all the consumer goods that a middle class household dreamt of possessing earlier. Education has spread fast. Even those, whom I facilitated to get a menial job, could get their children educated well. Those young men are very nicely employed. And for all employed, owning a vehicle and a house is no more a big thing.

India is moving ahead at faster speed than the surveys and reports tell.

Germany based Deutsche Bank has recently come out a report, ‘India Property’. Data are revealing:

  The $48 billion-Indian real estate industry is projected to grow at a yearly growth rate of 21% compounded annually to $140 billion by 2012.

 Consumer spending on mobile telephony was as high as $18 billion compared to $5.3 billion on two-wheelers and $8.3 billion recorded by the top 4 fast moving consumer goods companies in 2006-07.

 The residential real estate market was $45 billion with $16 billion worth of net bank disbursals for mortgages in 2005-06.

 The savings rate has increased from 23% in GDP in 2000-01 to 32% in 2006-07. The deposits rate is expected to reach 40% by 2020.

 Indians accounted for 27% of global gold consumption in 2006, which went up to 39% in the quarter ending June 2007.

 Home ownership is over 90% in rural India. In urban India, home ownership has increased from less than 50% in 1970 to 70% in 2001.


Another area of boom is aviation. The Indian fleet that comprised 170 aircrafts in May 2006 is now almost twice with 312 units. With the scheduled additions this year, the number will rise to 370 by the year-end. And by the end of 2010, India’s fleet will reach approximately 500-550 aircrafts. And within the same period, the domestic market size will cross 60 million and international traffic 20 million. Aircraft manufacturer Airbus pegs India’s demand at 1100 aircraft, worth US $ 105 billion.

India and Indians, particularly the great Indian middle class, are flying high with aspirations growing exponentially. And this is with only 10% of application. It is difficult to dream the future of India.

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‘Economist’ and India

Posted on December 15, 2008 by indra

Vir Shanghvi in his Sunday column in Hindustan Times talks of the public resentment touching the media too. “In the case of the Bombay attacks, it began as rage against politicians, was transformed into hatred of Pakistan and has now mutated into anger against the media.” Will the public at large react to the confusion created by media in India about the economic slow down, joblosses and a possible recession?

Economist this week has special report on Indian economy. The lead article ‘Suddenly vulnerable‘ says,

‘Asia’s two big beasts are shivering. India’s economy is weaker, but China’s leaders have more to fear. Until quite recently, the world’s fastest-growing big economies both felt themselves largely immune from the contagion afflicting the rich world. Optimists even hoped that these huge emerging markets might provide the engines that could pull the world out of recession. Now some fear the reverse: that the global downturn is going to drag China and India down with it.’

The special report- ‘An elephant, not a tiger‘-talks about the Mumbai massacre, the economy and politics of the country.

‘Amid the slaughter wrought by just ten well-organised assassins many individual Indians acted heroically. Yet the institutional response, as so often, was poor. Properly trained troops took over nine hours to arrive at the scene… Nobody yet knows how serious the slowdown will be, but in theory a recession in the rich world should hurt India less than other emerging markets: exports amount to only about 22% of India’s GDP, against 37% of China’s…To make a serious dent in poverty, India needs to keep up economic growth of around 8% a year. In the medium term that should not be too difficult. More impressive even than the success of India’s best companies is the zest for business shown by millions of Indians in dusty bazaars and slum-shack factories. They are truly entrepreneurs. It is no coincidence, as is often noted, that Indians have prospered everywhere outside India.’

If India is to sustain a growth rate of 8% or higher, as it aims to do, it will need to manage four potential constraints: its rotten infrastructure, the dreadful quality of its education, its cumbersome labour and land laws. India is getting stronger, but its problems are also growing. In the end, the pattern of its progress suggests, it will succeed.

The second article ‘The democracy tax is rising’is on the prospect of political alighnment for next election. Indian politics is becoming ever more labyrinthine.

A BJP-led government would offer India a better prospect of reform than the current arrangement, but possibly not much better. Whether Congress could make a better fist of bringing change, given another chance, would depend first on whether it was again shackled by the Communists. Of the other possible coalition leaders, one, the BSP, which is led by an autocratic former primary-school teacher called Mayawati, has captured India’s imagination.

In the third article ‘Storm-clouds gathering ‘the subject is what the world recession will do to India’s economy.

The crowning reason for optimism, however, is the savings rate. A young population should be sufficient to keep India’s savings rate close to the current level for the next two decades. Because the government eats up so much of India’s savings, the country relies unduly on foreign capital to sustain its high investment rate (its current-account deficit recently widened to about 3.5% of GDP). High public spending also contributes to inflation, which limits the RBI’s freedom to cut interest rates. Yet there are some slim reasons for hope.

One is duress. In a slowing economy it might therefore consider selling a few of the state’s many loss-making companies. Another, more tentative, reason for hope is political. In middle-class India, especially, the recent run of high growth has become a source of national pride. The third reason is intellectual. India has, so far, been proved right in opening its financial sector to globalisation only cautiously.

The next article, ‘The world is rocky’ talks about the India’s IT sector. India’s computer-services firms are in good shape to survive the financial crisis.Most Indian computer-services companies are at least in fighting form. Smaller firms, which offer imaginative-and perhaps dispensable-niche services could struggle in a slowdown. But the biggest have little debt and lots of cash. As much as 80% of their revenues, moreover, come from essential services-“keeping the lights on” in industry-speak-which their customers could not easily cut back.

‘Creaking, groaning’ infrastructure is India’s biggest handicap. India plans roughly to double its investment in infrastructure, to $475 billion over the next five years, or about 8% of GDP a year. In the next five years the government plans to increase India’s generating capacity by an annual 14%, or 90,000MW. At least almost all Indian children now go to school: a survey of 16,000 villages carried out last year by ASER, an NGO, put the enrolment rate at 96%.

‘A litany of trouble spots‘ details the trouble areas.

Yet apart from Kashmir, which carries a threat of international war, religious violence may be the most worrying of India’s conflicts. Its usual cause, discrimination against non-Hindus, is profoundly corrosive of the state.

Increasingly, where Indians have grievances over land disputes, Naxalites crop up. They are a symptom of India’s corrupt and malfunctioning state: thriving, in poor and crowded parts of Uttar Pradesh (UP), Madhya Pradesh and Bihar, where the district administration is weakest. In the short term, they represent a law-and-order problem which India needs to address more urgently.

However, even in the countryside, where caste prejudices is still virulent, there is surprising change. According to a recent survey of 19,000 dalit households in UP by researchers at the University of Pennsylvania, dalits were much less poor and caste-bound than expected. In 1990 nearly three-quarters of dalit households in western UP earned a living from skinning animals, an “untouchable” occupation. In 2007 this had come down to 0.6%, apparently because the local dalits had got rich enough to refuse such employment.

‘An awkward neighbour in a troublesome neighbourhood‘ deals with the neighbouring countries that are keeping India engaged. It is safe to assume, as Mr Emmott does, that Mr Bush’s fear of a rising China, and his wish to bolster India against it, was the main motive for the nuclear detente.

‘Ruled by Lakshmi’ finally talks of the need to keep the growth story going. Though inequalities are widening, India’s best prescription remains continued rapid growth.

I wonder why Economist came out with this special report. It is only because India is important for the world today in a way that was never before. Can the economists of India along with Man Mohan Singh, himself an economist of repute with the 1991 India’s miracle in his cap, lead the nation out of slowdown and make it isolated from the global impact? I wish the business class cooperates for its long term gain instead of going for large scale layoffs and retrenchment of its employees. With good crop prospect and no job losses that will ensure market, the economy can come on growth path faster.

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R&D in India- a Need for Course Change

Posted on December 14, 2008 by indra

I keep on getting the Google News Alert for on R&D in India. The latest has a news item ‘India to be global innovation hub‘. As per a study conducted by global research and analytics firm Evalueserve, titled ‘R&D Ecosystem in India’ by the British and Canadian High Commissions in India, India is targeting to increase its R&D spend to 2 per cent of the GDP by 2012 under the 11th Five-Year Plan, from less than one per cent, that “will catapult India to the league of developed nations that spend 2.5 per cent of their GDP on R&D, on an average.” The media keeps on reporting such good news to keep people like us happy. India’s large number of national research laboratories or institutes of science, technology and engineering hardly report of some inventions or innovations that can make the life of the people on the earth better.

In today’s ‘Times of India’, I came across two or three such need-based innovations from some universities. While the first related to a device that will make the driving safe, the second provides some solutions to the difficulties in using hydrogen as fuel in vehicle, and third provides some alternative materials for battery.

Researchers at the University of Utah have come up with an innovative automobile ignition key that prevents teenagers from talking on mobiles or sending text messages while driving. The invention is called

Working on a research project towards reducing the world’s dependence on fossil fuel for transport, astronautics professor and inventor Lars Stenmark of the department of materials science, Angstrom Laboratory at Uppsala University in Sweden has found a way to store hydrogen gas in small balls to overcome the risk of fires and explosions. “By storing the gas in round, spherical form, it can withstand twice the pressure that a cylindrical form can. If the car crashes and the tank breaks, the hydrogen-filled balls would just spread out and roll away, and the gas from any broken balls would simply seep out and disappear into the atmosphere without causing harm,”

Maria Stromme, professor of nanotechnology, an engineering physicist, from the same university, has found a way to extract cellulose from green algae bloom – a poison that is polluting coastlines and killing fish – and convert it into lithium-free batteries. A 15-member team led by Kristina Edstrom and Josh Thomas, of the department of materials chemistry, is experimenting with new materials to create inexpensive, “green” batteries with high storage capacity.

Why can’t Indian researchers contribute on such inventions that provide viable answers to the problems that the country or the world at large is facing? Is it not because the the researchers and the industry hardly interact? Why should not the government encourage the effective collaborations?

Let me also tell the heartening part of the story. The same page of Times of India carried an ad on the launch of INSPIRE (Innovation in Science Pursuit for Inspired Research). Can we hope that funding and scholarships will bring a change and promote researches and innovations for the people instead of keeping it too academic?
…….
PM launches ”Innovation in Science Pursuit for Inspired Research (INSPIRE)” programme

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Tata’s Rs 1 Lakh Car And An Old man’s Unethical Prophecy

Posted on December 13, 2008 by indra

The wait for the Rattan Tata’s Rs 1-lakh car is going to be over soon. Many auto-enthusiasts have been eagerly waiting for the car for various reasons. In January 2008, they will be able to see and perhaps test-drive it. Most of the queries and worries about the concept too will come to end with it. The car will get exhibited for the first time to the general public in Auto Expo 2008 in New Delhi. The car will get its name, perhaps before the exhibition itself.

As reported, it will be a safe and full car with due consideration for the taste and pocket of the consumers and Indian roads. Tata and his engineers have done a great job to take up such a challenging job to work under the constraints of cost for the target price. And with available information, it appears they have succeeded. If the car driving people in India accept it enthusiastically, it will set a benchmark as a product and also for the business management for the auto industry globally.

If it wouldn’t have been a viable project, a person such as Carlos Ghosn would not have asked the engineers of Renault Nissan to develop a similar car for its proposed venture with Bajaj Auto.

Why is then the old Japanese pioneer of small cars, Osamu Suzuki has gone on talking against the project right from the time when Tata first announced it? It is but sure that the Japanese don’t want any Indian company to go ahead of them with such an innovative product as Rs 1 lakh car. Perhaps even the idea of an Indian company taking a lead in car manufacturing is something difficult to digest for them. Though Japanese have pioneered many tools and techniques for the product development, quality engineering and management, why can’t they appreciate that the Indians might have learnt and assimilated them better? After all Japanese learnt and copied everything from Americans but improved upon them to go ahead of US.

The recent remarks of Suzuki on Tata’s Rs 1 lakh car were astonishing. “We don’t know the details about the $3000. Is it the part cost? Is it the retail cost? We don’t know about the safety norms, carbon dioxide or environmental performance of this car. Does it include air bags?” Until these things were clear, he said, it was difficult to comment on how Maruti would deal with the competition from the new car. “In case there is sacrifice on safety and emission norms, the manufacturer does not truly shoulder the responsibility of an auto manufacturer.” Should Mr.Tata would have gone to the old man and given him all the cost figures and sought his blessings?

Even if the Tata Motors spokesperson would not have commented on Suzuki’e remarks saying that the company was conscious of its responsibilities, should Suzuki assume that an established auto manufacturer such as Tata Motors doesn’t understand the social responsibility and put in production a product that doesn’t meet the mandatory requirements and competitive specifications besides providing the pride of ownership to the buyers? “As an auto manufacturer for over 60 years, Tata Motors is conscious of its responsibilities, and all its vehicles have met all the norms and regulations of the countries where they are marketed,” the Tata’s spokesperson said.

When Suzuki was coming in India with its Maruti 800 in early 80s, the then auto manufacturers also had similar apprehensions and kept on thinking in the same manner. And then Maruti Udyoga made a history. Suzuki succeeded in India, though it had not been able to do that in any other country.

For Mr. Suzuki to make such remarks against an established manufacturer and that to when the car is going to be launched soon is unethical. Either Suzuki is talking because of his psychological complex in mind or he is trying to hold his forte till end. A couple of years ago, Mr. Suzuki, the chief of Suzuki Motors had doubted the very feasibility of such a car and wondered if the product would be a three-wheeler.

Can I believe that Suzuki has not got the information about his queries on Tata’s car through corporate intelligence system? Why does he underrate the capability of Indian engineers and managers, when he himself has started working on many Suzuki’s global models from India? It is the same SMC that never agreed to indigenously manufacture even gears for the transmissions in India till very late.

Let us wait till January and the auto world will judge the reality in Suzuki’s prophecy and pass on the right opinion about Tata’s car. However, BusinessWeek has termed its Rs one-lakh car as one of the trendsetters of 2007, while naming Ratan Tata among the world’s Most Important People of the year. A journal like BusisnessWeek doesn’t do that without solid evidences and verifications in whatever way it must be doing it.

As it appears, Suzuki himself intends to get his engineers go for a car in the class of Tata’s Rs 1 lakh car. Suzuki’s queries during his press conferences in Tokyo and New Delhi are perhaps exploratory. Or I too assume as Business Week’s reporter says, “given the amount of attention that Nissan and Tata are getting for the cheap car, critics might argue Suzuki’s remarks smack of sour grapes.”

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Gujarat Vs West Bengal

Posted on December 12, 2008 by indra

Let me be frank, I never liked Modi. And between Buddha and Modi, I shall always prefer Buddha. However, it is only because I have a disliking for bearded face.

But going back to the performance I feel that the people of Gujarat should not defeat and drop Modi. It is unfortunate that Modi did something so blatant communal that media wishes to keep that alive for the whole of his and his party life. But at least in rural Gujarat the people opposing the government and the party can live a normal life. It is not possible in West Bengal. Comrades will not permit that, as I mentioned in the entry based on a professor’s report.

I consider Outlook’s Mehta, not a Modi-fan reported a very balanced opinion. “No public figure in living memory has been as vilified and reviled as our Narendrabhai. You can loathe him or love him but you cannot ignore him. He seems to possess a degree of self-confidence and self-belief, which terrifies even his own party. Is it all hot air and bluster, the vanity of a man who knows that eventually time and history will catch up with him?”

And one thing for sure, Modi is brave. He has distanced himself from RSS. He doesn’t care about Kesubhai or Togadia. The former appears to be casteist Patel and the later too much communal. Buddha can’t distance himself from CPM cadres or Jyoti Basu or Subhash Chakroborty even knowing well that they work against his policies and plans. Mehta confirms, “The ease with which he has demolished the parivar in Gujarat, a parivar which includes stalwarts like Togadia and Keshubhai, leaves even his enemies speechless. So, this “textbook fascist” is a mystery man not available to easy deconstruction.”

But my views of Modi is based on my visit to Gujarat last year and the picture of growth that it presented wherever we went. Mehta also has this point. “I have no doubt Mr Modi has blood on his hands, that he masterminded, facilitated and relished the carnage of 2002. However, if we are honest, we also have to admit the existence of another Modi, the one who has presided over and calibrated the Gujarat economic “miracle”. The statistics, especially those from independent sources, cannot be wished away as manufactured. Indisputably, he has delivered development to Gujarat. The only question is how much is fact and how much is fiction. Even if 50 per cent of the claims Modi makes are fact, it is a substantial achievement.”

West Bengal is a dismal story so far the growth and prosperity are concerned. The state that was once one of the best has gone to the bottom of the list in all development parameters.

I wish Modi wins just to prove that media can’t influence the wills of the people and bring a dynastic party with a local sycophant to head the government.

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