दृष्टिकोण – Indra's Viewpoint

The major media players as well as financial institutions world over are watching India moving in faster gear in the global competition. While Tata and CSN war over Corus is on, other Indian biggies are fully busy with their own acquisition projects. Even PSUs such BHEL are preparing to go for some big kills. Some of the reports and studies confirming the zooming booming Indian economy are here:

According to the reported assertion from global research firm Credit Suisse, India is set to surpass China as the fastest-growing economy in Asia next year on the back of increasing consumer demand and public investment in infrastructure. In its December forecast, the firm upgraded India’s economic growth rate to 9.5 per cent in 2006 from 8.5 per cent projected in September this year. The economy is predicted to grow by 10 per cent in 2007 and 10.5 per cent rate in 2008.

A report by McKinsey and Indian trade association Nasscom says India’s BPO export revenues will surge 37% by 2010, to touch $25 billion, from the current $7.5 billion. According to Sourabh Kaushal, who leads the ICT Practice at research firm Frost & Sullivan, of the 600 BPO companies in India, 65% are captive and 35% are third-party vendors.

India has progressively improved its ability to compete as measured by the Switzerland-based International Institute of Management’s (IMD) World Competitiveness Yearbook (WCY), jumping from 50th position in 2003 to 29th place in 2006. The ranking analyses the competitiveness of 61 economies on the basis of over 300 criteria dealing with economic performance, government efficiency, business efficiency and infrastructure.

India boasts the world’s largest population of qualified engineers, an impressive availability of IT skills, and one of the youngest demographic profiles. But competitiveness is enhanced with resourceful management of change, anticipating and adapting better and faster than competition. Here, India has a major asset, ranking fifth for its “resilience of the economy to economic cycles”.

In the global ranking, India ranks 29th this year. The WCY also gauges India’s performance within regional and peer group rankings based on population size and GDP per capita. India ranks ninth out of 15 economies in the Asia-Pacific region, 10th out of 30 economies with populations greater than 20 million, and its best ranking: fifth out of 25 economies with GDP per capita less than $10,000.

India gained on three of the four major factors that IMD uses to measure competitiveness. In Economic Performance, India rose an impressive five ranks from 12th to seventh, primarily due to a stronger domestic economy than last year. India’s real GDP growth in 2005 was a booming 8.1% and business confidence was more optimistic than in previous years. We are now starting to see the positive impact of economic reforms undertaken in the past.

The ranking for Government Efficiency progressed from 39th to 35th, with the best performance in Fiscal Policy (12th). India is in above average position for Business Efficiency, increasing from 23rd place last year to 19th; but there has been no change in the Factor ranking for Infrastructure (54th). This last measurement analyses the efficiency of basic, technological and scientific infrastructure, as well as health, environmental concerns and education. That the ranking has remained flat reflects lack of investment in basic infrastructure.

India is moving fast for development from a “working power” based on a supply of low-cost labour to a “brain power” comprising skilled and educated workers.

According to IDC, China will maintain its position as the largest IT market in the Asia-Pacific region, excluding Japan–making up 32 percent of the region’s IT spending. The Chinese market will be trailed closely by India at 23 percent, IDC said. Both countries are expected to account for the lion’s share of the region’s IT spending at more than 43 percent.

With the encouraging figure of the GDP for the first half of this fiscal year available, the confidence level is pretty high. The finance minister must be pretty happy, but for the higher inflation. Impending pressure of the pay commission and the political pressure for popular projects may be some unpredictable speed breakers worrying the FM that are to be smoothened to sustain the growth and boom.

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2006-12-20 07:16:02
Steel And Textiles- Where Indian Business Houses Failed
India would have developed textiles as well as steel as ‘national’ industry just as we had national bird and national flag. Besides some failures of the government, the big Industrial houses too failed the country that could have become the largest producers of textiles as well as steel.

Most of the big industrial houses such Tata, Birla, DCM, and Wadia were in textile sector. Some of the entrepreneurs also started manufacturing textile machines too. India was the largest cotton producer of the world with a glorious history of textiles since the Harappan days. But the business houses didn’t keep the sector changing with the time, and couldn’t grow to the global scale and quality standard as the Chinese did. There was nothing to stop the industrial houses from doing that. But none demonstrated that acumen and zeal to become the big enough and global player. Gradually, the big houses kept textile only as marginal part of the business and many of them exited. Even, the tie-ups for manufacturing of textile machinery didn’t get upgraded and finally made exit.

After the US dropped the quota, the floodgate of opportunity for export of textiles and clothing opened. But the Indian manufacturers in the sector were neither big enough nor had up scaled to take the advantages. However, some of the new ones and some who have come to the manufacturing via trading route are trying to make up the losses with rapid expansion and even global acquisitions. For example, Welspun and Spentex are two among the new ones. I am opinion that India has some special advantages in the textile and apparel sectors. India can easily become the world leader because of its skill and low-cost manpower, its raw material and glorious history of developing unique texture and attractive design. And the future seems to be bright. As reported, the domestic textile sector is poised to attract Rs 2-lakh crore investment, to provide15 million jobs and to reach a $110 billion business volume by 2012. India would join the top five textiles markets (after the US, Germany, China and the UK) with a size of $55 billion by 2015. According to a World trade Organisation study, India’s share in clothing is projected to increase from 6% to 9% in EU and from 4% to 15%in the US.

In steel sector, Tate made a wonderful contribution to the nation by establishing the first steel plant at Jamshedpur. India had huge iron ore stock. The steel plants could always come with captive power plants too. But after independence, the sector didn’t grow much. Tata Steel couldn’t provide the lead. Nehruji had to come with the steel plants in public sectors that grew in size with number of additions, but that couldn’t match the best of the global steel companies in scale and product lines.

Tata Steel had its mines. Later on it came in power sector too. It had an excellent engineering and growth division to develop plant and machinery for the steel industry. Tata Steel claims the lowest cost steel producer of the world, but it didn’t expand fast to the world-class capacity or with product lines to meet the requirements of various sectors. Tata took all the advantages that the government came out with in interest of its own public sector steel plants and maintained very good profitability, but it miserably failed to add new plants and product lines to come in the list of the five biggest plants of the world. It was basically a lack of management strategy and ambition. It could have certainly come to the fifth position on its own what it is trying to do by buying Corus so frantically. Even today I ma not sure how serious Tata Steel and other entrepreneurs in the sector are to complete the green field projects of huge capacity in Jharakhand, and Orissa for which it has signed MOU. Many feel it is all for acquiring mines from the government. An expert in the sector commented, “The whole idea of announcing green-field projects is for mines. Now, with Corus acquisition, Tata Steel will not get additional mines, because Corus is not integrated backward. So they will require additional mines to feed Corus as well.” With so many years in steel sector, why should Tata Steel and others be apprehensive of the entry of Mittal, Korean Posco or Chinese steel manufacturers? Even Paswan today suggests that Steel Authority of India Ltd (SAIL) should emulate Tata Steel in expanding globally.

Why India can’t think of building a steel manufacturing capacity anywhere near to the Chinese one? Does India lack anything else but the support from the politicians and NGOs? Should Indians be happy that a total 116 MoUs have been signed with an intended capacity of 150 mt and an investment of Rs 3,57,000 crore? And the minister proclaims that production of steel will touch 80 million tonnes (mt) in India by 2011-12. What a low level of ambition for a country leader?

I am still of the opinion that the textile with apparel and the steel must become the national manufacturing sectors of India. And India must be its largest producer in the world.
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Today is Sunday and normally I don’t like to take in some serious topics in my thought process. And these days, I am alone at home, as Yamuna is visiting her village home after many years. When I am alone, many ideas crop in mind. Here are two stories that somehow are troubling me for quit sometime.

One is from Ramayana that is mythological, though many in India believe Rama is a historical figure.

Dasrath was the father of Rama. Dasrath couldn’t bear the separation of Rama, the eldest son when he left for forest. He died after hearing from the charioteer that Rama or even Sita have not returned. Is there any story in other such epics or history where the father or the mother dies because of the separation of the son?

Second story is historical and that is from the Mogul period. Babur started the Mugal Empire in India. Once his son, Humayun was extremely sick and was not recovering even after all the medication by his doctors. Babur prayed to Allah that He takes his life and in return cures his son. It is said thereafter Babur fell ill and died. But Humayun had recovered.

Have you heard of any other story where the father or the mother has gone for such wishes?

1539
2006-12-16 18:31:18
PM Pleads to Japanese
Our economist PM Man Mohan Singh is presently on a visit of Japan with his party and trying to market India to Japanese. Japanese are as such very difficult people to get maneuvered.
Japanese philosophy of product and process design is based on quality engineering (Taguchi) where conceptualization and planning takes the maximum time, unlike the Western method of working where engineering goes on changing till last moment of putting the product to the customers.

Japanese learnt almost all its modern technologies and management techniques from US, but assimilated and adopted so well that it got branded as Japanese manufacturing system. Prime Minister and his colleagues as well as the distinguished members of CII in his team must do everything to get the Japanese to assist India in making it a significant player in manufacturing. He must facilitate, and remove all the irritating speed breakers in FDI from Japanese manufacturers. Here is some of what our PM said while in Japan.

Today India has emerged as an important player in knowledge-based sectors like information technology, biotechnology and pharmaceuticals. The expansion and modernization of physical and social infrastructure consisting of roads, railways, telecommunications, sea and airports will greatly add to the competitiveness and efficiency of India’s manufacturing sector.
India’s trade and investment ties with Japan are well below potential. Japanese has already been introduced as an optional foreign language in our secondary schools. We hope to see thousands of our youth learning Japanese in the next few years.

In the first half of the current fiscal year our growth rate recorded a new high of 9.1%. The manufacturing sector is fast catching up with the services sector. These two sectors account for almost 80 per cent of our national income. This remarkable growth is being led by an investment rate of 31 per cent of GDP, financed almost entirely by a matching savings rate of over 29 per cent. India’s stable macro – economic indicators lead me to believe that we have the potential to achieve double digit growth in the coming years. Growth has already helped millions of our citizens to emerge from abject poverty, which is reflected in the decline of the poverty ratio from above 50% in the seventies to below 20% today. South Korean consumer brands have moved aggressively into India and their brands have very high recognition value among our consumers. On the trade front, India’s trade with both China and South Korea is booming and grew last year at around 40% with both countries. China’s trade with India is nearly three times India’s trade with Japan and Korea’s trade with India is almost equal to Japan’s trade with India.

Since the end of 2004, over $ 5 billion have been invested from Japan in India’s capital markets. The number of Japanese companies in India has grown by 50% in the last three years. A JETRO survey conducted in 2005, which concluded that the profit prospects of Japanese manufacturing companies was the best in India as compared to all ASEAN countries. As a consequence, more than 90% of such companies in India were planning to expand their operations in the next couple of years.

An economically resurgent India today offers a variety of investment opportunities, both in traditional and new sectors, in labour-intensive and knowledge-based industries. In bio-technology, nano-technology, information technology, automobiles and aerospace, textiles and leather, marine products and in many other areas Japan and India can come together. The focus of our government has been to create world class infrastructure in India. I am personally monitoring all the major infrastructure projects every quarter as head of the Committee on Infrastructure. We have estimated that India’s investment needs in area of infrastructure will be at least $320 billion in the next five years in infrastructure alone. We have estimated that our total investment requirement would be closer to US$ 500 billion.

There are already more than 70 Indian software companies and 5,000 Indian engineers operating in Japan and Indian companies are making significant efforts to train software professionals for the Japanese market. Japanese has already been introduced as an optional foreign language in our secondary schools and the government is committed to increasing Japanese language learning opportunities in India. There are many opportunities for collaboration between Indian and Japanese companies in the area of energy efficient and environmentally friendly technologies. We must exploit this vast latent potential.

Every Indian wishes that India gets closer to Japan through technical tie-ups in manufacturing sector, and Japanese manufacturers make India their low-cost base for manufacturing to supply their produce to nearer markets of West Asia, Europe and Africa.

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Yesterday strike and its Bengal style have showcased Bengal with its real face that goes unbearable and inhumane when it comes to general protest by CITU. The protesters use all innovations to create inconvenience to the people both domestic and also poor foreigners who have been very lately changing their mindset about India and Indians because of their colleagues in offices back home.

Let us see what happened yesterday.

Kolkata airport: Jurgen Vanduffel is having his longest transit ever at any airport across the globe. A professional diving instructor from Belgium, Vanduffel was among the 130 passengers stranded at Kolkata airport due to the strike. ”I knew it is a Left-run state, but had no idea that life would come to a halt because of a strike. Now I can’t even venture out of this place. Imagine getting stuck here without food,” said Vanduffel.

‘This is my first trip to India and may be my last one. How can the government allow the protesters to shut down everything? And if bandhs are like this, we should have been informed by the airline so that we could have decided whether to travel here at all,” added Greg Raymond from Australia.

Writers Building: Buddha Babu spent a full day in office (all alone), but the rest of Writers’ wore a deserted look, as almost all rooms remained under lock-and-key.

Howrah Railway Station: Some local and long-distance trains did reach Howrah station early on Thursday, but it was full stop from 6 am. A few taxi drivers were willing to defy the bandh, but for a fat fee – Rs 900 for Salt Lake, Rs 500 for Shakespeare Sarani…

Sector V- IT City: Despite police bandobast in Sector V, the shutters were downed in a hurry and the autorickshaw drivers switched off their engines as the clock struck 6. “Bandh shuru hoye gechhe (The bandh has begun),” shouted someone. The early hours of hectic activity over, the man in charge of logistics outside Wipro – the biggest BPO outfit in the city with over 2,500 employees – could afford a smile. “Our last pick-up car arrived before 5.15 am. Everybody is in,” he announced.

Durgapur: S.P. Badyakar was stopped around 10 last night when he was on his way to work on his scooter. He had planned to stay at the plant overnight. Citu activists ordered him to go back. When Badyakar said he was a senior executive and wanted to work, the men beat him up. One of his teeth fell out and he slumped to the ground, bleeding. Badyakar was taken to hospital by collegues and had to undergo a minor surgery on his gums. The general secretary of the Citu-affiliated union, P.K. Das, said: “We are ashamed.”

Kalyani: At Kalyani town in Nadia, residents were warned on loudspeakers against letting part-time maids work and all approach roads were blocked. If this was not enough, women activists searched houses for maids and dragged them out. Again, the Citu was apologetic. Sumit Dey, the Nadia secretariat member, said: “What they did was wrong.”

Has Bengal changed? Do you think then that the farmers of Singur have willingly given their lands to the government for Tata Motors? But even with all this Tata Motors is adamant to set up its ‘crown jewel’ plant at Singur.

“NO”
Nemesis of Bengal?

1537
2006-12-15 17:59:20
Indian leader Must Learn from Blair
British Prime Minister recently announced a list of 500 concrete steps, large and small, to cut red tape in the nation bureaucracy. The measures, which range from simplifying forms to providing fire safety certificates more easily is estimated to save individuals, corporates and charities over 14 billion pounds (Rs 119,000 crore). And Blair promised to come out with another 500 administrative ‘burdens’, which would save them another 2 billion pounds.

Are India’s highly qualified and experienced Prime Minister and the Finance Minister, or for that matter the vice-chairman of Planning Commission not aware of the timeworn, and useless administrative procedures that must be costing billions in cost of red tapes? How can India attract the FDI that it is seeking so aggressively, if as per an Assocham, nearly 62,000 proposals, involving a cumulative investment flow of around Rs 1,550,000 crore, are pending approvals from various states and central government for the past 18years or so. ” It is observed that even at 40% fructification of these investment proposals, investment of Rs 644,000 crore can come through, generating employment for about 7.4 million people.” The sectors involved include food processing, textile and clothing, leather goods, automobiles, auto components, minerals, steel, cement, electronic products and components, paper and paper products, chemical and allied products and polymers and plastics. How can one have confidence in the intention of the leaders in the driving seats after going through these reports? Why can’t a proposal that is unacceptable, be dropped?

Why should they waste so much of energy and resources of their own and the country, if they can’t improve the basic requirements for getting the foreign investment? Can the investment climate be called congenial if it takes 89 days to start a business, 67 days to register a property, 425 days to enforce a contract and seven days to a month to clear goods from customs, and almost 155 of management time is wasted to deal with officials? Is it something that the Prime Minister can’t get corrected? Why can’t he confess this?

Though the British Empire where the sun never used to set is dead, but the nation and its leaders are conscious of the competition from the emerging economies specially ‘Chindia’ to give a sharp competitive edge to British business in global trade. Chancellor Gordon Brown, the next prospective tenant of 10 Downing Street has been talking of the threat, ” Once responsible for just one-eighth of the world’s growth, China and India will soon capture almost half. They are competing not just on low cost, but on high skill.” And that is reason for the steps to cut the prevailing red tapes. The nation is preparing to face the challenge. For information, in the same process of restructuring the administration, UK is having an ambitious target to cut unnecessary bureaucracy by 25% by 2010. At least it appears the national leaders of UK are following the strategies necessary to correct the situation, if it is bad and correctible.

Why can’t similar steps be taken in India? Why can’t India take a cue from the story from Britain that has given India the present bureaucracy as legacy and act?

1536
2006-12-14 21:18:44

The battle on Singur is hot. Left government of West Bengal has gone all out to show the strength of its cadre and police force. Against all odds, it has acquired the huge area of land about 1000 acres from farmers and has also got it fenced. It never asked even why should Tata Motors need so much of land. Ratan Tata is busy with Corus. MD, Tata Motors is enjoying the battle royal between Mamata and Buddha. But perhaps all the preparations are as per schedule and going on simultaneously in Tata Motors Pune plant. As I wrote earlier, the Tata’s dream car project can be revolutionary and change the confidence level of the manufacturing sector of the country. I wish Tatas would maintain its quality and would provide the customer service to the worldclass level. However, I am still very much skeptical about the work culture of West Bengal even today and the way its trade unions maintain control over every activity of the management on shop floor level. It damages the basic discipline among the workforce that is necessary to get the best contributions from the people directly on the job. I think Tata Motors must have developed expertise in handling the irritating labour conflicts. Some one in Tata Motors must be totally sold on West Bengal; otherwise it would have not selected Singur. Even today, the state goes for very frequent strikes or bandhs for reasons best known to the leaders of the political parties. And in the state the strike is always total as it’s state sponsored in most of the cases. No one can dare to go for any work outside the house, if there is strike. Even train, airport and all transport are dead.

I am also eager to see the ultimate result just for technical reasons. I am really sorry that a company like Tata Motors has no consideration for the farmers who shall be loosing their land and its agricultural produce. Why can’t such a mechanical plant be located in the desert of Rajasthan on the Delhi- Mumbai wing of of GQ? Will it any way affect the efficiency of the operation or the supply chain? Unfortunately, the wrongly directed competition between the states of the country is causing the problems. The smarter states rather smarter political leaders are trying to bring in all the industrialists to invest in their states by offering all sorts of allurements. The other day I saw Tata Motors’ another plant coming up on the very fertile land of Uttaranchal for manufacturing the mini-truck that has become very popular. The country can’t get the replacement of the fertile land producing different grains, though the plants can come up in many locations in the country without much difference in operational efficiency.

An Article on Tata Motors Rs 1-lakh car: Carmaking in India -A different route While China’s carmakers copy, India’s are inventing

RFID is one technological breakthrough that can be of great help to every person if properly innovated and commercialized. One of the applications can be to help locating the goods stolen or lost and reducing the burglary or theft. Cars are the most sought after items by gangs near around Delhi. As the news goes, after killing Dr. Papiya Ghosh and her maid in her Patna house, the burglars have taken away the booty in her car and the police have not been able to find even the car till date. Perhaps with RFID incorporated in car design, the problem of locating the position of the car would have been easy.

Another fixtures that women like very much are the costly ornaments. However, they hardly use them because of the fear of snatching outside or of theft from house. Can’t RFID be integrated in costly ornament design to give its location on real time basis if so required? With abduction of children of rich and influential people becoming an industry in some part of the country, perhaps an intelligent RFID is to imbed in all the children to assist in case of emergency.

Gemma Simpson and Jo Best have compiled a list of 10 the best, worst… and craziest uses of RFID.

Children:
Japanese authorities decided to start chipping schoolchildren in one primary school in Osaka a couple of years ago. The kids’ clothes and bags were fitted with RFID tags with readers installed in school gates and other key locations to track the minors’ movements. Legoland also introduced a similar scheme to stop children going astray by issuing RFID bracelets for the tots.

Pub tables:
Thirsty students can escape the busy bar and still get a pint thanks to RFID tables that deliver orders remotely. The high-tech bar is fitted with touch screens so students can get a round in, order a taxi or even chat-up someone at the next table.

Fulham Football Club:
Fulham FC has started issuing RFID-enabled smart cards to fans to cut queues at the turnstiles and increase safety around the stadium. Around 20,000 of the smart cards have been issued to mainly season ticket holders and club members and contain data on matches each cardholder has paid for.

Air passengers:
It was also suggested by boffins at University College London that air passengers should be RFID-tagged as they mingle in the departure lounge to improve airport security.

Tanks:
RFID has also made an appearance in the army to try and reduce casualties from ‘friendly fire’ incidents.

Hospital in-patients:
In an effort to trim clinical errors, hospitals in New York and Germany have been tagging their patients. Visitors to the hospitals are given RFID-chipped wristbands to wear, which are scanned by medical personnel to bring up their records and make sure the patients are given the correct dosages of drugs.

Blood:
The same clinic, which tags its patients, is also tagging blood. No vampire-pleasing effort this, rather the Klinikum Saarbruecken is using the tags to make sure the right blood reaches the right patient. Nurses will be able to scan the tags using reader-equipped PDAs or tablet PCs and check that the blood data matches the information held on an RFID-tagged bracelet worn by the patient. The National Patient Safety Agency in the UK is also considering a similar move.

Suits:
Marks and Spencer has long been associated with being at the forefront of flogging ladies’ undies. It’s also now at the forefront of item-level tagging, having chipped some of its men’s clothes. The retailer has avoided questions of privacy protection by attaching the tag to a label on the suit that can be cut off. M&S has now extended the trials nationwide.

Passports:
One of the more controversial applications is soon-to-be mandatory use of RFID in passports. The US is leading the way in deployments and the UK isn’t far behind. As well as the obvious privacy fears that surround such rollouts, experts have questioned how secure the passports are with some claiming to have cracked and cloned them already.

Books:
The first item-level rollout in Europe has already taken place in Dutch book store BGN. Each of the books in BGN’s Almere store is chipped and a second store, in Maastricht, will soon go the same way, allowing the retailer to track each book from its central warehouse to the shop floor.

Technology will be at the service of mankind, if we use it properly. RFID can be a revolutionary in this direction. Are Indian entrepreneurs listening?

Our PM Left for the official visit of Japan today. It is a great opportunity that our economist PM is visiting Japan and shall be interacting with the top leadership of the country that is more known for its cutting technologies rather for its political clout.. Each nation and ethnic group has “national traits” and “ethnicity”. Japanese are not so good at financial business, may be Indians are. Japan’s strong point is in “Manufacturing”. I have been a fan of Japanese manufacturing capability. Japanese have perfected manufacturing, and India must do everything to bring as many as possible Japanese manufacturing companies to India.

Japanese are today the leader in automotive industry with Toyota very soon coming to the number one in the world. Japanese are also superb in household appliance and electronics. By integrating Japanese manufacturing strength with India’s IT technology, both the countries can get into a win-win position. India with a vision to become global manufacturing must strengthen its electrical electronics sector. Japan can provide much of the technology needed for the manufacture of advanced high-end electronics components and products.

Japanese manufacturing was the first to pioneer the low volume high variety method of flexible and reconfigurable manufacturing system to satisfy customers’ various demands. With many management tools such as lean manufacturing, quality engineering, QFD and modular designing, Japanese have fine tuned product and process design and achieved ultimate in manufacturing. Speed, quality and the ability to provide the customer with the right price are some of the competitive advantages that Japanese have mastered.

Japanese got disenchanted in their first effort to come in manufacturing in India in 1980s in big way. Even today, except for Suzuki neither Toyota nor Honda have gone for significant investment in product design or even manufacturing in India, as Korean Hyundai in automobiles or Samsung and LG in household appliances have done. Japanese manufacturers have their own constraints, and perhaps apprehensions about the work culture in India. I don’t think either business or political leaders have made much effort to change the impressions of Japanese business leaders.

Japanese attention was substantially diverted to China, which over the past ten years has won investments of over $27 billion in a wide range of sectors when India got barely a tenth of that, and that too largely in two spheres, automobiles and electronics.

However, with changing global political equations and its historical problems with China, Japanese also may like to come nearer to India. It appears so from many of the recent statements of the Japanese bureaucrats. As reported, Ryoichi Horie, deputy chief of mission of Embassy of Japan in New Delhi, has said recently, “Many top Japanese companies have manufacturing hubs in Asean countries, but their products are sold in India. It’s more a multilateral business. But now, many Japanese companies are willing to set up their own manufacturing base in India.” And the Japanese Ambassador, Yasukuni Enoki, in an interview to ‘Hindustan Times’ made very encouraging promises for the Indian’s manufacturing sector on the eve of the PM’s visit. He said, ” Japan helped the Asean countries develop their manufacturing industries in the eighties, and did the same with China in the nineties. Now, in the new century, Japanese investment and technology will benefit India similarly. I believe this elephant is about to start galloping and we are there to give it a push.” Naoyoshi Noguchi, director general of Japan External Trade Organisation (JETRO) argues that Japanese companies have realised the missed opportunities in Indian market, and are now serious about long-term stay in the country. “The market dynamics in India are very different. It’s a highly price-sensitive market. That’s why many quality-conscious Japanese companies hesitated to explore the Indian market. Now, as many as 352 Japanese companies are operating in India and the number will only increase substantially,” unlike the Chinese and Indians, the Japanese don’t take hasty decisions. Their decision-making process is very slow. But once they decide, there’s no going back. I feel Japanese companies are convinced that the future lies in investment in India.” No sayonara any more.

The CII delegation of Indian CEOs accompanying Prime Minister Manmohan Singh to Japan will be expected to assuage fears among Japanese companies about growing incidence of labour unrest in the country and slow pace of decision-making in the government.

India must do everything to convince Japan to bring its manufacturing sector to India as a reliable global base for domestic as well export market. Will Toyota and Honda make India its main base for R&D and manufacturing of its whole product range?

To the land of rising opportunities
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Some news items from Bihar are causing worry for two reasons. Will Bihar remain behind forever? Can’t the government and the people there change when the whole world is changing? Here are three stories:

It is almost twelve days that noted professor of History, Dr Papia Ghosh and her maid were brutally murdered in her house in Patna. Police has not been able to get anywhere. Dr Ghosh’s IAS officer sister, Tuktuk Ghosh, has reportedly taken up the matter with Prime Minister Manmohan Singh. The PM has spoken to Nitish Kumar. But Bihar Chief Minister Nitish Kumar is of opinion that the CBI does not have the expertise to solve murder cases. Why should Nitish Kumar so bluntly refuse the request about the CBI? What is he afraid of?

The second story is about the showcase Golden Quadrilateral, the 30-km stretch from Sasaram to Dehri-on-Sone of the Delhi-Kolkata GQ. It is unfortunately my hometown too. As claimed, a “mentally deranged” (the police version) stoned Sunil Kumar Sharma 35, the supervisor in the project with Nagarjuna Construction, to death around midnight on Wednesday, Dec 7. The police maintain that it was a stray incident. “Everybody knows the killer was a mentally deranged man. We have arrested him and there was no need for the company officials to get terrorised”, said N H Khan, Rohtas SP. Sharma’s colleagues on the spot differ. “He (the alleged killer) owns three buses and manages them. How can he be mentally deranged?” On Wednesday night, Sharma was at the site under a bridge in Dehri when a worker came running and said that someone was throwing stones at him. His younger brother Anil said, “When he came out, the attacker struck him with a big stone and he fell on the ground. Then Tunna Singh struck his head again and ran away.” Sunil died on his way to hospital.

And the third one is the most damaging and really worrying one. If the parents of Bihar don’t mend their wards, Bihar can’t get its image improved.

Hyderabad, Dec. 11: Eight hundred youths from Bihar and Jharkhand took over the Howrah-bound Falaknuma Express for eight hours yesterday, grabbing seats, harassing women, beating up catering staff, robbing vendors and pulling the chain 22 times. The torment ended after a heavy police and Railway Protection Force contingent detained 500 of them at Tadepalligudem around midnight, while the other 300 escaped into the town. Only half of the group, returning home from a railway recruitment exam in Secunderabad, carried tickets. Some had the free coupon railway board examinees are entitled to, while the rest had neither. One Pushpa Kumari, who was in the women’s compartment, lodged a complaint at Guntur and said, “The boys forced their way into our compartment. They sang lewd songs and danced in the corridor in an obscene way.” An aged couple from Salt Lake got off the train at Guntur after being threatened by the youths. At Tadepalligudem, the police registered cases against only 15. As per a policeaman, “They were given tea and (apart from the 15 detainees) sent in another train to Howrah after a warning.”

How do you take these instances of going-on in Bihar? Bihari youth will have to behave properly, and give up it’s the ‘dadgiri’ behaviour, particularly in dealing with people of other part of the country or the world. If the people in Bihar don’t change themselves, there is hardly any hope for Bihar.

A report in ‘Times of India’ makes one think.

“China has trounced India 4-1 in trade in the first 10 months of this year with a trade surplus of $3 billion against India as compared to a trade deficit of $946 million in the same period in 2005. Chinese exports to India shot up 61% to reach $11.58 billion in that period. Indian exports notched a minor rise of 4.49% totaling $ 8.5 billion, according to the latest statistics released by the Chinese Customs for the January-October period.

Indian trade and industry has been far more receptive to Chinese goods rather than energetically taking up the task of selling Indian goods to China. Indian trade bodies visiting China, ostensibly to promote Indian goods are more interested in sourcing cheap Chinese products.

The $20 billion target of the bilateral trade set for 2008 was reached in October 2006 itself, because of a dramatic growth on the Chinese side and a slide by India, which lost the trade advantage it enjoyed in 2005. A Beijing-based businessman says, “Indian companies have been most aggressive in sourcing low-cost goods from China. Most of the businessmen visiting China are only looking for sourcing opportunities.’
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How do you feel after going through this report? Is it not disgusting?

And do you know what India exports to China?

The two of its most important export items are – ores, including slag and ash, and iron and steel. Ores, mostly iron ore accounted for 57% of India’s export basket last year. With the humongous Olympics facilities in Beijing nearing completion, their demand has tapered off. Unfortunately, in the last 60 years Indian steel sectors could not expand sufficiently. Till late nineties, none of the Indian steel producers could produce the extra deep drawn steels, leave aside the more sophisticated ones, for the outer skin panels of passenger car industry Iron ore export is a real lucrative business for small players to make huge money with no value additions and exhausting the natural national wealth. Cotton is another major export item to China. India is the second largest producers of raw cotton, but Indian textile and apparel manufacturing capacity is just miniscule in comparison with the Chinese.

China exports all value-added finished products- electrical machinery, iron and steel products and paper and paper boards besides all the junk households things that are flooding the markets all over India courtesy our unscrupulous traders who visit China and buy all the rejected third class flashy stuffs that are rejected by other countries and sell to Indian consumers at huge margin.

Unfortunately, China’s quality control system is very flexible. Its manufacturers leave it to the buyers to evaluate. Wal-Mart and other buyers of US and the Western countries have their own quality control checks. Indian traders buying consumer supplies in bulk hardly bother about the quality. They are hardly accountable for the quality off the Chinese goods. It is for the consumers to buy the cheaper Chinese goods or go for the goods from other sources. And in process, the majority of them get cheated but they come to realize that late when they can’t do anything. Will the traders associations taking all the advantages from the government stop this practice of importing all the sundry items from China and cheating the domestic consumers?

If India wishes to win the race with Chinese, it will have to be smarter in deciding the strategies to save its different manufacturing and service sectors where it has some inherent superiority. Chinese are moving so fast that it will be difficult to survive. The latest news from pharma sector is the warning.

Ind-Swift Laboratories, a pharmaceutical major based in Chandigarh, halted the production of roxycomycin and arithromycin last month. “While our manufacturing cost comes to $115 per tonne, the Chinese supply the same drug at $105 a tonne. Since we could not match their rates, we discontinued the production, which stood at 1.5-2 tonnes a month,” said V K Mehta, joint managing director, Ind-Swift. It is not Ind-Swift alone. Companies like Alembic, Kopran and Torrent are all bearing the brunt of Chinese imports.

Read The 10 Gadgets That Changed the World

The news of suicides of framers in rural India pains one and all. But many good things are happening all over India that brings hope of a better tomorrow even in rural India.

1.In Bilashpur, Himachal Pradesh, Jagdish Thakur has sold 2.5 lakh carnation stalks, grown on a part of his 13-acre plot, in the last seven months at the whole mart in New Delhi. His earnings have been Rs 10 lakh. It didn’t happen the first time. In 1997, when Jagdish experimented with gladioli flowers, it turned out to be a dismal failure and he lost Rs 20,000. But with time changing, Jagdish tried again. And by this time he knew about the greenhouse technology that helped increase yields. Further, he could ship his products directly to Delhi-based commission agents, without depending on local middlemen. The demand of flowers has boomed. A Dutch company wishes to import his products.

2.Jaswinder Singh Bhondli village in Ludhiana Punjab is making hay by selling vegetables, instead of traditional crops like wheat and rice. From the 22 acres (of the 35 he owns) devoted to vegetables, he gets an annual income of Rs 14-15 lakh. And he’s building a Rs 35-lakh mansion, and waiting to ink a contract farming deal with either Reliance Industries or ITC.

3.As reported, another Bilaspur farmer is making a killing by growing red and yellow capsicums, which sell at Rs 100-140 per kg in Delhi, and each plant yields nearly 10 kg. His income from just one crop sowed on a small portion of his 20-25 acres (most of which is devoted to traditional crops like maize) this April: a whopping Rs 9 lakh.

4.An employee of Spencers, a retail chain spotted Yellapa, a poor farmer from Mallu village near Bangalore who used to travel to the city to sell coriander, spinach, and other vegetables on the roadside. With help of Spencers, Yellapa increased his yield of spinach from 50 bunches a day to over 800. Yellapa has taken the land of his neighbour too on lease.

This is happening across the country. Retail chains, food processing companies, and even restaurants like Mc-Donald’s with huge requirement of farm produce are increasingly avoiding the city wholesale dealer and instead, are talking directly to farmers, eliminating middlemen, deciding on mutually beneficial prices and collecting the produce in their own trucks directly from the farmers in villages. Farmers are not spending on transport or sharing revenues with middlemen anymore. And that is resulting in better earnings for the farmers.

A farmer such as one 40-year-old Shiwarkar has become the direct supplier to the retail chain Spinach that has 17 stores in Mumbai. He does not deal with the transport agent anymore, nor the market agent. Instead, it’s the executives from the retail companies he’s in touch with the most. The men from the Spinach retail store monitor the packing of tomatoes. The intermediaries are going out from the value chain, and for the farmers, hopes, opportunities and wealth are all finding their way into their homes. Some advantages are incredibly basic. Once farmers take their goods to the market they are at the mercy of the market forces. They cannot take their vegetables back to the village if the prices are too low. Now, everything is neatly settled by the corporates.

Further, the traders in mandi used to be unscrupulous. As narrated by one farmer, on an average, the net weight loss used to be 10 kg for every 100 kg of produce due to faulty measures. So the weights are right, payments are instant and damage to the crop is less. And the farmers can have an assured demand all year round.

As the organized retail sector moves further in, the biggest gainers will be the farmers, especially those who are small and illiterate and completely dependent on the village agent.

I only wish these retailers or its employees didn’t get too greedy. It all means the farmers need to change from the traditional system to make their earnings better. The success stories above can only provide the inspirations to go for more perspiration and, in turn, prosperity.

Please Read Farmers take a `Fresh’ look at retailing

Nitish Kumar, the engineer chief minister of the bottom position holder state, Bihar completed one year in office. In last week, I came across two of his interviews that appeared in ‘The Indian Express’ and ‘The Hindu Businessline’.

Except for some claims on investment proposals for sugar factories, there is nothing exhilarating but for a very genuine hope about the state’s future. ‘Bihar has to become a developed state by 2015 to be in tune with the President’s Vision 2020.’ However, Nitish though engineer by qualification never came out, what he and his government will do in less than four years to make the people of the state feel confident to look for better Bihar by 2020.

I shall like to only remind engineer in Nitish Kumar that today with technologies available there are hardly any projects that can’t be completed in 3-4 years. You require only a steely will power. Chief Minister’s putting10-12 hours at work can only set example, but for the implementation of the projects taken in hand, he will have to select his executing team, delegate, and monitor the completion within the timeframe.
Nitish Kumar will have to prioritize, decide on some10 major projects, and see that they get completed. As otherwise, the remarks ‘There are so many things to do; we are fighting on many fronts’ and then ‘After all, the mineral-rich districts of the erstwhile Bihar State have gone to Jharkhand,’ reflect indecisiveness and perhaps frustration. Again, Nitish Kumar must be innovative on his offerings to the investors to attract them towards Bihar, as all the states of India are competing in providing more and more allurements to industrialists.

As it appears, Engineer Nitish Kumar has given up easily on the state owned and private industrial complexes including one at Dalmianagar. He could have appointed at least some reputed consultants such as Mc Kinsey or Booz, Allen, Hamilton, or Boston Consulting for helping Bihar in preparing a roadmap for prospective industrial revival of Bihar. It would have been an expenditure made with a purpose. The chief minister must aggressively attempt for fast-track development instead of just giving up apparent when he says, ‘I don’t think we can do anything about its revival right now.’

His idea of a land bank with a corpus of Rs 200 crore is an excellent approach direction of land acquisition for industrial units of interest. And I wish Nitish Kumar could get the 61 proposals (for setting up various industrial units totaling an investment of Rs 26,000 crore that his government has cleared) get completed in 3-4 years as promised.

Bihar has many strengths of its own. Its huge tourism potentials for Hindus (Gaya), Buddhists (Buddha Gaya), Jains (Vaisali), Sikhs (Patna Sahib), and Muslims (Phulwarisarif) itself can boost the state’s economy tremendously, if it is exploited with a businesslike approach. Nalanda International University can bring in $1 billion or more if one works seriously and a permanent prestige for the state. Unique traditional textile related products from Madhubani and Bhagalpur are other prospective employment providing strengths of Bihar. In food processing industry based on cereals, vegetables, and fruits, Bihar can always compete with any other state. Bihar has manufacturing potentials in leather goods and pharmaceuticals with plenty of raw materials available in the state.

It is unfortunate that neither the journalists raised question nor the CM mentioned anything about the potential of knowledge sector, BPO when a huge lot of technocrats from Bihar are serving the sector. The sector is not very capital intensive also. Bihar produces students in abundance with excellent academic records. Bihar can have BPO in legal, medical, and education areas. The CM is to get his engineering colleges in top gear and encourage bringing in some finishing institutes for fluency in English.

I shall agree to Nitish Kumar’s remark, ‘Others, preferably independent people should rate me.’ I wish the journalists such as Shekhar Gupta, who are familiar with Bihar, would have made some independent research on the progress made in Bihar in last one year and published their findings instead of these interviews.

Finally, I found the fire missing in the CM in these interviews that is a must for the development of the state that was made to sleep for three decades.