Small Cars Racing in Indian Auto Sector

Posted on May 20, 2008 by indra

Government has been loudly expressing its intensions to make India a manufacturing hub for small cars for a long time. However, the curtain raiser Tata Motors’ ‘Nano‘ at Auto Expo 2008 in last January confirmed the candidacy of India as manufacturing hub for small car. And almost all the global carmakers accepted it. However, the better term for Nano class may be ‘ultra low cost’ car.

Japan had been the pioneer in small cars. Almost, all the major carmakers had a small car. As my professional assignment, I had interacted with most of them. I specially had liking for mini Pajero of Mitsubishi. But the Japanese small cars were extremely high-tech with many features such as turbocharged multi-valves engine and all safety features, and not cheaply priced and trimmed versions, as it came to be known in India with the launch of Maruti 800 in early 80s.

Nano is on the pattern of Japanese manufacturing philosophy. It will be safe and have all features. The reduction of cost and so the price is through design, materials, manufacturing, and distribution related innovations. The story of Nano is really exhilarating with many young men putting their best to give shape to the dream of an aging and respected boss. The whole concept made an impressive impact and change of mind in the auto industry about the capability of the Indian designers and managers.

‘Nano’mania is spreading and many in auto sector don’t wish to lose the opportunity. While Tata Motors is fighting with its time schedule for Nano’s market launch in late October, Carlos Ghosn, president and CEO of Nissan, has already announced Nissan’s intention to go solo and “compete in the entry-car with a dedicated platform that will be used for at least three models built in five leading competitive countries (LCCs), the first of which will be produced in Thailand and India in early 2010.” This is in addition to the low-cost $2500 car in partnership with Bajaj Auto. Nissan and Renault are allying for ultra-low-cost car, being developed with Bajaj and are planned to be launched in 2011.

And there is a flood of media reports from other automakers. Hyundai, Honda, Toyota, and even GM intend to enter in Indian small car market.

While Nissan will have its own manufacturing plant in Chennai, the joint venture with Bajaj Auto is located in Chakan, Maharashtra, where Bajaj Auto is already having its manufacturing facility. Nissan intends to manufacture its entry model with a very high percentage of localization. It is significant as it proves the capability of Indian auto components sector to supply the quality and number demanded by the global majors.

But the main thing to watch in coming months is the market reaction for ‘Nano’. While a pressure for price increase by its vendors may increase its price marginally by the time it hits market, the management is hell bent with all the teams working on the project for reducing the cost further with innovative inputs.

But it is not known whether Nano, or for that matter even Bajaj Auto’s ultra low cost car, will become more popular as a second car in the family with bigger cars, or fulfill one of the main aspirations of lower middle class as cheap entry car. With the increasing road connectivity of rural India, I personally wish it reached to the aspiring young men like my cousin Alok in villages, where it can be sparingly used only when required and not for creating traffic jams in already crowded metro.

It depends on the strength and strategy plans of Tata Motors if it wishes to make Nano an Indian vehicle of aspiring lower middle class globally over a period before the competition wins it over with better products.

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NREGS – Who’s Responsible?

Posted on May 19, 2008 by indra

National Rural Employment Guarantee Scheme, NRGES, is a real great visionary project for a country with 80% population earning less than Rs 20 a day. It provides an ensured earning for at least one member of the household for 100 days a year. Interestingly, it is not a charity or dole. Wages are paid against the physical work done. Perhaps this is the best social security mechanism created for a poor country and provides a right to work and earn to live. Only a genuinely needy man would labour under an Indian summer sun and bitter winter for 60 rupees or so a day. And according to Aruna Roy, ‘the ealier practice of paying without making any distinction between those who worked and those who didn’t, has been dropped. Workers are paid exactly on the basis of the actual work done by them.’ Further, if the government fails to give work, the individual beneficiary gets also entitled to receive a daily unemployment allowance. There couldn’t have been a better scheme for rural India with a large number of unskilled, illiterate, and socially deprived population. The ‘Economist’ recently came out with a report ‘ Shovelling for their supper‘ and called it the world’s biggest public-works project.

The scheme’s prime mission was to create an employment to a large number of people- at least one member of each willing family out of needy lot. Another mission was to create permanent assets in rural India to improve the productivity of the farming and quality of life. Assets may be projects related to water conservation, draought proofing, creation or rennovation of traditional water bodies, plantation and afforrestation, land development, flood protection, or roads for improved rural connectivity. Ideally, it is for the community afected such as a village or a panchayat who must identify the assets required or the maintenance work for the existing assets. However, a technical group must validate it and coodinate with the overall requirement of the region.

Has the scheme, that started with only 200 of the poorest districts of the country has gone to all the 604 districts, succeded in its mission? There are different opinons.

According to a recent CAG report, barely 3.2 percent of the 50 million registered households could get the full 100 days employment between February 2006 and March 2007. The average employment provided under the scheme was just 18 days. However, the ministry contended that 21 million families had been provided work for an average of 44 days and that 2.2 million families had been given work for their full entitlement of 100 days.

On the assets created, 57% were in water conservation, 13% in irrigation, 17% in roads, and 14% for land development. Of the water conservation works, 347,000 or 43% of the total value were for water harvesting, 13% or 98,000 for waterbodies such as ponds and 20% to irrigate land owned by SC/ST’s. There were 113,000 tree plantation works and 206,000 for roads. An environmentalist has called it “the world’s largest ecological regeneration programme.” I wish it could be believed without any question?

The ‘Economist’ observes rightly, “Enthusiasm for NREGS among state governments has been patchy, with some of India’s poorest and most populous states, such as Bihar and Jharkhand, slow to adopt it.” Rajasthan and Andhra Pradesh have done wonderfully well. Even Aruna Roy confirms that. I wish the politicians wouldn’t have used NREGS for their politics. I really get depressed when I find Raghubans Prasad Singh and Nitish Kumar fighting. Working together they could have used NRGES to wipe out the misery of millions of deprived people of Bihar.

I wrote on the subject since the scheme was getting discussed. I appealed to make it free of politics. Fortunately, the minister assigned with the task was honest and dedicated to the mission. Over the period, he initiated many safeguards to make it more transparent and less misused than its earlier predecessors. NREGS has also used IT to bring in efficiency and transparency. And the minister is also trying to get help from all the IIMs and IITs for improving upon the performance of NREGS. Latest provision of the scheme is the opening of an account in name of the beneficiary in the local post office or bank and wages tranferred straight to the benficiary’s account. As reported, ‘a staggering 16 million people registered with NREGS now have bank accounts.’ Ultimately, all the 55 millions will be covered by formal banking system.

Many are skeptical about the NREGS and its effectiveness because of the leakages. The Economist quoted in conclusion. “According to a recent World Bank simulation, more Indian peasants would be withdrawn from poverty if the government just handed them cash-without first making them shovel dirt.” However, why should we consider only the darker aspect? Let us look at the brighter side too. If the NREGS is fully operational, it would change the lives of over 25 million people in the country at less than what it costs to subsidise the energy consumption of the better off.

Here is a scheme that provides a right for even the most deprived one in the country to demand work, earn his living, and avoid going empty stomach to sleep. He must demand his right to live an honourable life.

I wish one day every village will have a website of its own and a rural knowledge centre. The website will have all the information about the NREGS along with many other information.

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Disaster Management – China vs. India

Posted on May 17, 2008 by indra

The Chinese have remained a suspicious lot and undependable since their treachourous1962 invasion, pushing me to hate them and any thing that is Chinese. I get angrier every time I learn about China’s offensive preparation and gesture against India. Latest is more shocking. Unfortunately, China has more worrying news for India. Latest satellite pictures have identified a large area in central China with 58 launch pads for nuclear-capable ballistic missiles apparently targeting north India. I get more worried rather annoyed after reading recently many propounders of Chindia with dream to rule the world with complimentary endeavours.

However, the Chinese always keep on doing something that can be a lesson for all the countries. I like many may doubt the number of causality in the recent devastating earthquake. The authoritarian rulers might be providing lower numbers. But the story of Chinese premier Wen Jiabao is just exemplary. As reported, “Wen, in an unprecedented move, personally directed rescue operations for over 50 hours in the midst of the disaster zone. His presence made a huge difference when it came to mobilizing forces and keeping up the tempo of rescue operations.” One reason for the slow rise of the death toll was the focus by the machinery on saving lives instead of recovering bodies. Wen Jiabao has ordered to never give up hope of saving people trapped under debris. And then President Hu Jintao took charge of directly overseeing relief operation.

Will our politicians and administrators take note of this? Can they follow this example of leading from the front instead of exercising their rights to keep on criticizing and blaming the opposition even in situation demanding sobriety? Can they drop their official paraphernalia and get into action to help the victims? Can the people of India learn some lessons and change the system to get able and qualified people to head the government?

Unfortunately, it exposes one more problems of our system where mostly old and invalid become the premiers, unlike that in China, where most of the ministers are young and qualified; many of them are engineers. How can one expect the same efficiency, agility and hard work from an above-70 person that a person of under-50 years of age can provide?

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Farm Productivity: Why Can’t India Emulate?

Posted on May 16, 2008 by indra

Farmers in our village and all the villages of the region cultivate two crops, rice being the main one. It is because the canal network from River Sone provides the water required for paddy crop. When I go back in my childhood, I vividly remember one aspect of paddy cultivation. I have not been able to forget that lively scene with numbers of women transplanting the paddy seedlings in ploughed rice fields full with water and singing the folk songs related to the occasion in Bhojpuri. Over the years, things have changed. Contracted male members hired from distant villages of North-East Bihar districts specialized in the operation carry out the task of transplantation. As my brother tells me, they do it better using less number of seedlings. I got reminded of the change, when I read about SRI for enhancing the rice yield significantly in ‘Outlook- Business’.

According to the World Wide Fund for Nature (WWF), India needs to increase its rice production by 2.5 million tonnes a year to meet its requirement in 2050. Rice output needs to increase by 92% from the current 140 million tonnes to meet the domestic demand in 2050. India can attain that to a great extent with ‘the system of rice intensification (SRI)’ developed 20 years ago by Father Henri de Laulanie, a Jesuit priest in Madagascar.

The SRI process requires younger and fewer seedlings transplanted with wider spacing; and it doesn’t need wasteful continuous flooding for irrigation. As claimed, SRI can increase rice yields to up to 15-20 tonnes per hectare. With India’s average rice yield of 3.1 tonnes per hectare, SRI has the potential to bring about significant increase in rice productivity and production-that too with fewer inputs and at a lower cost.

About 5,000 litres of water is required for just one kg of rice in the conventional ‘flooding of the field’ method. SRI uses 25-50% less water. Instead of flooding paddy fields, SRI requires only the root zones be kept moist. It also cuts seed requirement by an astonishing 95%. Fewer seedlings are planted, with more space between them. India cultivates rice on about 45 million hectares. One can calculates the benefits easily.

Studies show that the net returns per hectare of rice farmers who adopted SRI was 67% higher than those who followed the conventional method. A farmer in Andhra Pradesh reported to achieve a rice yield of 17.3 tonnes per hectare. It may be an exception. But an increase of around 2 tonnes per hectare-64% more than current levels-is very much achievable.

SRI has been included in the National Food Security Mission, which talks about increasing rice production by 10 million tonnes by 2012. As reported, “about 100,000 hectares is under SRI, which can be scaled up to 500,000 hectares in the next five years.” SRI is said to have a presence in 130 of the 500 rice-growing districts. However, that’s only 1.1% of the total rice area under cultivation. One can imagine the increase in the rice production, if switch is judiciously increased. Instead of imposing ban on basmati rice export, the government can work more seriously on this change over and providing better input including genuine fertilizers and better seeds. Why can’t our scientists achieve what the Chinese can?

The agricultural scientists “are trying this system for other crops, like wheat and madua (ragi).” Experiments with wheat in Dehradun saw yields increase from 18 quintals per hectare to 21 quintals per hectare. Similarly, traditional methods of growing sugarcane, another thirsty crop, require 10 tonnes of seed buds per hectare, SRI methods require only one tonne; as for the yield, it can increase from 65 tonnes per hectare to 144 tonnes.

A state like Bihar and other states of the eastern India that can become the granary of the country, must go for the switch over gradually. I fail to understand why a proven process of improved cultivation and means to bring prosperity in rural India can’t be adopted fast. Many a times, it seems our politicians intends to keep the region backward enough for their selfish manipulations as vote banks.

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Intellectuals Share Dreams

Posted on May 14, 2008 by indra

As per the dream of C K Prahalad, India can have by 2022 the world’s largest pool of trained manpower (500 million skilled workers), 30 companies in the Fortune 100 list, 10 per cent of world trade (current share 1.5 per cent) and 10 Nobel Prize winners (4 in last 100 years). Coimbatore Krishnarao Prahalad, the guru of post-modern management was sharing his vision or dream extraordinary for India @ 75 with 700 members of the Confederation of Indian Industry that included many bureaucrats too.

Prahalad had deliberately kept the means of getting there out so that the focus could be kept on the goals. According to Prahalad, even in the current circumstances, the probability of meeting the targets was high. CII has adopted the vision. Let us see what CII does to make it happen.

Problems to reach at the goal may not be insurmountable. However, some consider “such dream-weaving may help to boost the egos of non-resident Indians, but doesn’t square up with the situation on the ground.”

I had heard of only the Chinese setting similar targets. China had announced its target about the number of companies in Fortune 500 list, and the number of universities in the list of the best universities of the world. Prahalad may appear to be over enthusiast. But there is nothing wrong with that. I couldn’t understand why Prahalad didn’t give target for the number for the global class educational institutes. I would have preferred one another areas where India already leads. CII and FICCI must also set a target for winning Deming Prizes for its members.

It was the saint Kamaal Kalam’s prescription for a developed India 2020 that made many Indians dream. And he had a logic that he expressed recently, while delivering the first convocation address of Ravenshaw University. “Dreams transform into thoughts and thoughts into action and with knowledge all problems would be defeated and goals achieved.”

I came across some local dreamers too. Narendra Modi has a dream for the most prosperous Gujarat ahead of Punjab and Southern states. Even Nitish Kumar talks about his dream about a developed Bihar. “During a visit of the former President of India Dr. A. P. J. Abdul Kalam, we had promised to develop Bihar by 2020. However, now we are shooting for 2015.” The Chief Minister hoping to turn Patna into the Bangalore of the East.

I wish the politicians don’t play politics with these dreams too and really work to get them realized so that the history remembers them.

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China -Friend or Foe

Posted on May 10, 2008 by indra

Chinese on Top

Time and again, some news in the media takes me back down the memory lane to 1962. The nation was under a shock. We didn’t have our Diwali. The Chinese had betrayed India, invaded it, defeated it, and more than that humiliated it. The land of Budhha and Ashoka was caught napping. Unfortunately, India didn’t rise to the occasion even thereafter. With some wins in the skirmishes with Pakistan and then on eastern end, Indians were made to believe that the defence forces have done great job. Basically, it didn’t have the right leadership required and nothing much happened on the front of national economy to be a great power.

Over the period, it has been very difficult to forget the onslaught of China and the helplessness of India of 1962. India perhaps because of its democracy and the divergent views of politicians can’t compete with China’s might. Rather China may weaken India to any extent with lefts in the country to lobby for it. Recent development in Nuclear Deal is an example. The preference for survival for few months made the government follow the leftists’ line and let the deal almost die.

India may keep on spending huge sum on defence with not much effectiveness, as all its neighbours are against the rise of India. The expenditure hardly serves any purpose with much superior might of Chinese forces. Perhaps some alliance with US or a close-knit diplomatic grouping would have provided some solution, but the leftists will not allow that to happen in name of sovereignty. If the neighbours bordering with India would have been friendly, the task of facing China would have been easier, but Indian diplomacy has failed to achieve that.

Many of the Chinese actions against India are suspicious. Why is China planning to extend the railways to the Nepal border rather up to Kathmandu itself? Is the trade with Nepal so important or is there some naïve intention? Himlayas has created the northern part of India between Vindhyachal and its own ranges. Can one day China if it so wishes bring the end of it? Can China one day stop the water flow of Brhmaputra of the North- east?

Why should China mount attacks on Indian websites? As reported, over the past one and a half years, China has mounted almost daily attacks on Indian computer networks, both government and private, showing its intent and capability.

Why does China pronounce that Tibet group in India has Qaida links? Why should China keep on investing on deep and long range N-sub and which country other than US or India is the target? What are China’s intentions?

China will keep on challenging India on all fronts from piracy of its products such as Bajaj’s Pulsar toTata’s Nano. It will chase India’s IT supremacy or for that matter all the sectors where India is stronger such as pharmacy. In its latest issue, Business Week published a report ‘In India, Death to Global Business’. The story presents a grim picture. Who must be the happiest with the development? It is only the ghost of Mao and China that must be happy with the situation. Unfortunately, Indian government of any political alliance wishes to sleep over the issue and waits and wishes for the time to solve the fire.

Opinions: China biggest threat

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B -Schools Causing Inequity

Posted on May 8, 2008 by indra

Today most of the prospective students and their parents dream of IITs and IIMs. It didn’t happen so much in 60s. Most of the students from Presidency though selected in IIT went for higher science degrees. I still remember our senior Kamal Dutta who pursued physics. My own friend Ashoke Sengupta went to Bengal Engineering College. He had a preference for the civil engineering and the college was rated the best in the subject. I joined IIT, Kharagpur and selected mechanical engineering. I don’t remember if any of my classmates from Presidency or IIT did try for any management degree. Many did get promoted and held responsible managerial positions. Didn’t we become good managers? Would have we been a better manager with present management education?

I consider the craze for MBA education as damaging. The best brains, if the success in the entrance examinations of these institutes were a criterion, trained through a costly coaching system, are vying to enter IIMs. Even IITians and other professionals including medical graduates after four years of rigorous purely technical education prefer to complete the MBA course before entering the job market. Those who fail to get in the IIMs or some of the better-known B-schools of the country go to US. As per one estimate, between 10 and 15% of US B-school graduates are of Indian origin (this is true of B-schooll faculty too). Many who went to US for MS in engineering subjects as getting financial assistance was easier for that, later switched over for a MBA course.

Education was never so commercial before MBA degree got popularly demanded in crazy corporate houses of US and then in India. Japan never had any management schools. I wish someone had researched how the managers without MBA degree faired in actual working scenario. And now even an annual cost of Rs 2 million or more including fee at IIMs and ISB is meager considering the pay packet that it commands after completion. It is surprising, the aspirants as well as the parent start calculating the break-even period after starting the work. It may be insanely difficult to get entry because of immense competition, but after securing the entry only mad ones will leave it whatever may be the fee and over all cost. As someone said, “MBA is a business, big business for both student and colleges. Students calculate returns and consider MBA as a cash cow.” Somehow, I can’t relish education to be treated as business.

The big starting pay packets offered for MBAs are causing serious complexes among other professionals including in the teachers of the same B-schools who trained those graduates. Is there any justification for a twenty-fold fee differential between the IITs and IIMs?

It all started with the shortage of good colleges for higher professional education. At one time, the fee in private engineering and medical colleges used to be the highest. The demand for the seats in the few colleges of national importance used to be very high. The private colleges established by businessmen and politicians started making huge money to meet the demand even for very poor quality of education provided by them. And then came IIMs and very soon it build a brand that could get a very high starting salary for its students. Today, the medical education has lost its charm. The fees have tumbled, and seats go unfilled. It is when the medical practitioners are in great demand to man public health centers throughout the country. But the poor living conditions and the initial salary offered have additionally made it unattractive. IIMs and IITs have created another flourishing business of coaching. The best example gets manifested in the rise of Kota or through the huge hoardings in every small and big city.

The rise of IIMs has created a craze for huge initial salary in all professions that is harmful. Today an IAS, IPS officers are aggrieved. The officers in defence forces are getting demoralized.

India needs more of technocrats- good doctors, architects, chartered accountants, product-hardware and software designers, maintenance engineers, quality engineers, and millions of skilled hands to push the country on the growth path of prosperity for all and not for few. Industry must provide at least 40% more entry salary for those with Masters and 60% more for PhDs. Additionally it must take care of the salaries of teachers for the courses as prerequisite. I get shocked to hear that some unscrupulous teachers can get one a PhD at a cost and it is all because they feel marginalized in the education system.

I am not against the management education. However, it must be very specialized and continually innovating too. It should be meant for the sufficiently experienced people from the different professions, and not for any fresh graduates from any stream. And the fees for the courses should be dependent on the years of experiences and status attained at the existing workplace such as lower management, middle management, and senior management.

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Noida Authority and Residents’ Welfare

Posted on May 6, 2008 by indra

Time and again, I have been using media to reach Noida Authority (NA) with a single appeal: Whenever NA initiates a project for the benefits of the residents of a sector/ block, it must inform the residents about it through RWA and take their suggestions in consideration before designing and implementing it. Am I unjustified in my appeal and expectation? This is the way even corporate are trying to manage big operations today.

When it is not done, the residents come to know about the project when a work gets started by the contractor. As all the processes of tendering and its allocation are over, the vested group of beneficiaries- the contractor or the sanctioning officer takes any suggestion from the residents as encroachment on its authority. Even the suggestion that can save a lot of taxpayer’s money gets discarded. It doesn’t only create inconvenience but also cause heartburns to the residents. One finds completely helpless with such an administration.

It has happened in case of the costly boundary wall built in front of Block A &B of sector 41, with the service lanes created on both sides along the main road connecting Chaura Mor to Dadri Road, and with many cases.


New drain under construction on service road side. All trees will die after the construction.

recently constructed drain

One another such construction works in name of a drain along the service lanes in the front of the houses of Block A and B of Sector 41is in progress. When we came to know of it, we tried to find out from the general secretary of RWA of sector 41 if he knew about it. He did not know about the project. We called the assistant project engineer and explained that as one big drain has already been laid along the boundary wall, few holes in the wall from the side of service lane will be sufficient to take away the rainwater. He promised to talk to his senior, but said that as the tender is through nothing much would happen. As Mr. YP Singh was also of my view, he drafted a letter for CEO, Noida Authority and I e-mailed the following letter to ceo, aceo, and dceo:

Subject: Construction of a drain in Block A of Sector 41 facing road separating sector 39 and 41

It is submitted that Noida authority intends to construct a drain on the service road of Block A and B. The digging work is in progress. It appears that while planning and preparing the layout of this drain the concerned officer/s didn’t take into consideration the location of the water pipe which supplies water to the houses along the service road (say, A-59 and A-44). It appears that this dirty water drain would be constructed over the water pipe with the result that in future, if any new construction from the water pipe is required or any work of repair on the water pipe is to be carried out, that would be difficult and costlier. In future such works would be possible only after breaking this dirty water drain. It would be troublesome for the water and sewer department and finally would be inconvenient to the residents also. We do not oppose the drain but the big size of the drain as contemplated involves a wasteful expenditure. A side drain has already been constructed on the other side of the wall and the rainwater of the service lane can be drained easily through few holes through the boundary wall, which has been constructed recently.

It is requested that kindly examine this project and save us from the harassment likely to be caused by the construction of the drain, which is not required at all. What we have suggested is not something new. Noida authority is draining rainwater in the suggested fashion only in Block B of sector 41 on the western side.

And subsequently we sent another reminder mail.

With reference to our earlier representation and appeal, please take some urgent action as the digging is continuing for the drain along the wall in front of our houses A-44 to A-59. We again affirm that this is an unwanted project. Creating few holes in the main drain already constructed (though not completed in all respect) can take care of the drainage of rainwater. Further, Sir, it has already damaged the waterline. The problem in future will be accentuated. It will also kill some plants and trees that will come on its way that is highly undesirable for your mission of ‘Green Noida’. Sir, please urgently order the department concerned to stop the work.

Noida Authority didn’t respond as usual. Why should it have all these e-mail addresses and claims of handling grievances and taking suggestions digitally? And a Rs. 16 lakh project drain is under construction. Noida Authority has thus constructed two mosquito-breeding drains in front of our residences wasting almost more than Rs fifty lakhs. It has only helped the contractors and some officers in making some more money for them. Interestingly, the present design will not drain the rain water, if the road slope is not modified.

How long Noida Authority and similar government agencies will keep on taking up and doing anti-people projects and call it as a welfare of the people without taking any suggestions from them or by creating inconveniences to the residents?

Noida Authority is a rich agency and sells a single plot at Rs 5000 crore or more. Why can’t it have its own power plants and ensure a 24X7 power supply or its own commercial RO water plant and ensure safe drinking water or its million or more population? But the residents doubt if NA is working for the people here. As many feel, it works for Mayawati or Mulayam.

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