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Sunday, December 29, 2013

Idea Reboots an Idea Post AAP Drive

On December 23, the Aam Aadmi Party (AAP) decided to form a government in Delhi, with support from the Congress — after conducting an informal SMS referendum that asked the citizens of Delhi if it should take a shot at governance. 

Idea had used a similar theme in its 2009 television campaign, with a spot that depicted a poll via SMS on whether shopping malls should be made on agricultural fields. So it made sense to release a fresh edit of that ad. 
"We thought when it was happening for real, it'll be good for the brand to remind people how Idea's communication was ahead of its time," says Sashi Shankar, CMO of Idea Cellular. 
The initial thought to do a tweaked version of their old ad came from Sanjeev Aga, a member of Idea's board of directors. 

The agency, Lowe Lintas, created a 25-second re-edited version of the original 45-second spot within two days of being briefed. The ad, being a topical one, was aired only on news channels for five days. 
Good thinking on the feet, quick turnaround time and a good example of recycling communication to associate the brand with one of the most important political events in the history of the nation. 
shephali.bhatt@timesgroup.com 

WHAT AN IDEA, SIR JI

CASH & CARRY SEEN BETTER AT SOME LOCATIONS Reliance Changes Tack in Retail Redo

Co to convert some of its big hypermarkets into wholesale stores, court its adversaries — kirana shops — and make them an ally


    Mukesh Ambani's Reliance Retail is converting some of its big hypermarkets into wholesale cash-and-carry stores, in an apparent sign of modern retail's inability to effectively take on neighbourhood stores in India. 
The Reliance Mart hypermarket in Bhopal's Aashima Mall is currently under renovation and getting refitted to be reopened in February in a new avatar, as a cash-and-carry store. 
This 44,000-sq-ft hypermarket is among Reliance's big-box stores, including one in Ludhiana and another in Aurangabad, that are being converted into cash-and-carry formats. The company has realised that in some locations, low-frills wholesale stores have better prospects of making money sooner than consumer-centric hypermarkets, which have wide margins but also are more expensive to operate, two people with knowledge of the development said on condition of anonymity. 
So, in order to convert the adversaries — the mom-and-pop stores in this case — into allies, Reliance is adopting a simple strategy: It is courting them. In the cash-and-carry format, companies sell to bulk buyers, such as neighbourhood or kirana stores, who are their members. Reliance is setting up its wholesale stores in places where the concentration of kiranas is high as it is easier to make them customers than competing with them. 
The business also offers huge poten
tial. Industry experts estimate cash and carry in India to become a $22-billion (about . 1.4-lakh crore) annual opportunity by 2017, and the market leader in the segment is expected to corner $4 billion to $5 billion of this. The main rival for modern cash-andcarry stores in India is "wholesale retailers" — thousands of small retailers crowded into large markets, such as the Sadar Bazar in Delhi. 
"Reliance Retail continues to evaluate its offerings and realign them in specific locations in order to establish 
sustainable relevance of the business with the consumer ecosystem," a Reliance Retail spokesman said in an e-mailed reply to queries on the company's plans on its cashand-carry business. In the traditional retail segment, the going hasn't been smooth for organised players. Over the past five years, Reliance Retail, Aditya Birla Retail, Spencer's Retail and others shuttered hundreds of smaller convenience stores to focus on expanding big boxes as the smaller stores faced direct competition from kirana stores. 
But hypermarkets, generally spread over 40,000 sqft to 60,000 sqft, come with their own set of challenges, such as high cost structure associated with a large number of staff, look and feel of the store as well as logistical cost that ultimately eat into overall profitability. On the other hand, cash-and-carry 
business generates much higher volumes — as customers buy in bulk, albeit at low margins — with smaller operational cost. Cash-and-carry stores can be low-frills in terms of look and feel and ambience, and they save on logistical costs as companies and distributors would supply merchandizes directly to these stores. 
Generally, Reliance Markets, as Reliance's wholesale stores are called, allows only bulk buyers through memberships. But the store at Bhopal's Aashima Mall is also likely to sell to consumers apart from traditional kirana stores even after it is turned into a Reliance Market, according to Ashish Jain, marketing manager of the company that owns and runs the mall. 
"Since it is in a mall with a heavy consumer footfall, it will also cater to consumers," he said. 
Reliance, in fact, is undertaking an aggressive plan to expand its cashand-carry chain. It entered this business with a store in Ahmedabad in 2011 and the pilot was tested for the next one-and-a-half years before opening another one in Bangalore. In the past nine months, however, Reliance has opened about a dozen cashand-carry stores. Plans are also afoot to make an upcoming store at Mohali in Punjab, which was originally planned to be a Reliance Mart, into a wholesale store as well, one of the persons cited earlier said. In comparison, Germany-based Metro AG, a pure 
cash-and-carry player that has so far opened 17 stores in India since its entry into the country a decade ago. 
An industry analyst said converting a hypermarket into the cash-and-carry format may not work in some cases. Hypermarkets and cash-and-carry stores are two entirely different formats with different demands and economies, Amitabh Mall, partner at Boston Consulting Group, said. 
"Converting any hypermarkets into cash-and-carry has to negate the disadvantages of lower margin at the cash-and-carry with the high rentals (of the existing hypermarkets)," Mall said. "That is the equation someone needs to solve. It could work in some cases and may not in others. So it's a mixed answer." 
One of the anonymous persons cited above said Reliance has plans to convert many more hypermarkets into cash-and-carry in the coming months. However, Reliance denied this and said the conversion is limited and selective. Further, as a conscious approach, locations and stores are identified as opportunities for the entire retail business and the precise format or offering is finalised after due consideration of the consumer demography," the company spokesman said.


Saturday, December 28, 2013

VIEW FROM SILICON VALLEY Indian IT: Wake up and smell the opportunity


A few years ago, Wall Street Journal and Forbes published articles predicting the demise of Indian IT. I responded with an article that they were dead wrong. I said that the outsourcing market had a long way to go before it peaked; rising salariesand attrition rates were not a cause for long-term concern; and Indian IT would soon become a $100 billion industry. It did. 
    Now I am ready to declare the end of the line for Indian IT. There are new $100-billion market opportunities that could revitalize this industry. But from what I've seen, Indian executives seem incapable of steering their ships in the right directions. 
    It is not that Indian outsourcers have become less capable of servicing Western needs. It is that their customer base — the CIO and IT department — is in decline. With the advent of tablets, apps, and cloud computing, users have direct access to better technology than their IT departments can provide them. They can download cheap, elegant, and powerful apps on their iPads that make their corporate systems look 

primitive. These modern-day apps don't require internal teams of people doing software development and maintenance. They are user-customizable and can be built by anyone with basic programming skills. 
    It takes decades to update legacy computer systems, and corporate IT departments move at the speed of molasses. So, Indian outsourcers have a few more years before they see a significant decline. They certainly won't see the growth and billion-dollar deals that have brought them this far. 
    The same advances that are changing the IT landscape are also creating new opportunities. For example, advances in robotics, artificial intelligence (AI), and 3D printing are making it cost effective to move manufacturing back from China to the US, Europe… 
and India. 
    Take the Baxter robot from Rethink Robotics. It has two arms, a face that displays simulated emotion, and cameras and sensors that detect the motion of human beings that work next to it. It can perform assembly and move boxes — just as humans do. It will work 24 hours a day and not complain. It costs only $22,000. This is one of many such robots. 
    AI is making it possible to develop self-driving cars, voice-recognition systems, and computer systems that can make human-like decisions. AI technologies are also finding their way into manufacturing and are powering robots such as Baxter. 
    A type of manufacturing called "additive manufacturing" is making it possible to cost-effectively "print" products. 3D printers can create physical mechanical devices, medical implants, jewellery, and even clothing. The cheapest 3D printers, which print rudimentary objects, currently sell for between $500 and $1,000. Soon we will have printers for this price that can print toys and household goods. By the end of this decade, we will see 3D printers doing the small-scale production of previously labor-intensive crafts and goods. In the next decade we may be 3Dprinting buildings and electronics. 

    These technologies are becoming readily available and cheap, but America's manufacturing plants aren't geared up to take advantage of them. Most don't have the know-how. This is where India's companies could step in. They could master the new technologies and help American firms design new factory floors and program and install robots. They could provide management consulting on designing new value chains and inventory management. They could operate and monitor manufacturing plant operations remotely. This is a higher-margin business than the old IT services. And Americans would cheer India for bringing manufacturing back to their shores — rather than protest it taking their IT jobs away. We are talking about a trillion dollar market opportunity. 
    India's technology companies can also develop sensor-based biomedical devices, cures for diseases by analyzing genome and health data, drone-based delivery systems, smart cities, digital tutors, and sensors to improve farming. Software and IT are the key to developing all these. 

    In my discussions with Indian CEOs, they all acknowledge the reality. They are becoming aware of what lies ahead. I have implored them to start retraining their people in the new technologies and develop new businesses and consulting practices. They listen, nod their heads, and go back to trying to close the disappearing software-outsourcing deals. They are shuffling deck chairs on the Titanic. 
The writer is a fellow at Stanford Law School and director of research at Duke University

FUTURE FRONTIERS: 3D printing offers a new opportunity to Indian IT companies




Thursday, December 26, 2013

5 THINGS THE NEXT GOVERNMENT MUST DO

The last few years, characterized by corruption, policy paralysis, economic slowdown and job losses, is something not only the government and the industry but even the common man would like to forget. Given this background, we spoke to some thought leaders and captains of industry across sectors and asked them to identify five things which the next government should do to ensure that growth and development come back on track. Here's a peek into their minds…



ANAND MAHINDRA | CMD, MAHINDRA GROUP Measure social sector outcomes 
Articulate "Promise 2019": When companies formulate strategy, they clearly articulate a nearterm 3-5-year vision with clearly defined deliver
ables, not vague, long-term plans. So should the new government. We need to see a "Promise 2019", with metrics to measure performance versus promise (eg MW of generation capacity added, km of national highways constructed, etc). The government should then publish regular and transparent annual updates against these plans. 
Promote tourism as a multiplier and a mirror: At 6.6 million international tourist arrivals annually, India lags abysmally behind countries like 
South Africa (8.3 m), Taiwan (7.3 m) and Vietnam (6.8 m). A doubling of this number would not only generate an additional $17 billion in foreign exchange, but also have significant multiplier effects on employment. 
Measure social sector outcomes, not spend: Our policies today are input-focused, emphasizing 
the money spent in areas like healthcare and 
education. The emphasis must shift from resource availability to productivity measurement within the social sector. 
Kick-start investment cycle through infra push: 
The 12th Five Year Plan envisages investments 
of $1 trillion. Even so, India's investment cycle 
seems to be in a state of suspended animation. The government must motivate the private sector to act, by reigniting the belief that India can be a manufacturing powerhouse. Two specific examples – can the large land banks that the government has accumulated be put to quick use by setting up plug and play National Investment and Manufacturing Zones already envisaged under the National Manufacturing Policy? Secondly, can landmark projects like the Delhi Mumbai Industrial Corridor and the Bangalore Mumbai Economic Corridor be turbocharged to demonstrate to the world that investment in Indian infrastructure can indeed sow a 'field of dreams'? 

Offer a "New Deal" to 
address India's Red challenge: 
Internal 
insurgency and the naxal menace pose the biggest threat to India's territorial integrity. It's essential to put maximum resources behind battling this. At the same time, a "New Deal" should be provided, not a cosmetic solution or a hollow promise but a deal that tackles the core ills besetting these regions — lack of education, healthcare, and infrastructure development.


DEEPAK PAREKH | CHAIRMAN, HDFC Focus on minimizing energy imports, pass crucial bills 
    The year-end always calls for introspection. 2013 has seen fewer wins and more misses. Yet consensus says next year will be better for India. There are many critical pending issues but one must recognize that positive initiatives such as Aadhaar, phased hike in diesel prices and the Project Monitoring Group must continue with the same momentum. Though the 'to-do' list of the incumbent and the future government is immense, some issues listed below are at a tipping point. 


Energy security: Two-thirds of India's power is generated from coal. India 
holds the fourth largest coal reserves, 
yet faces shortages. Coal India's monopoly must go. The long-term policy focus is to minimize energy imports. If no serious measures are taken now, by 2030 India will cumulatively import energy of $3.6 trillion — twice today's GDP. We 
cannot afford this. 

Target FDI: Tapering is inevitable and the freshly garnered FCNR(B) deposits are of 
shorter tenors. We need more long-term 
equity investors like sovereign and pension funds. Only a friendlier business climate will encourage investors. Start by streamlining approvals with timelines. 

Pass critical legislations: The passage of bills like GST, DTC and insurance is no 
longer an issue of political one-upmanship. 
They are imperative for the economy. These bills have been sufficiently debated. Those opposing will be viewed as anti-reform. Which political party should risk this? 

Get going on disinvestments: Today, disinvestments are only used to narrow the
fiscal deficit and yet targets are rarely 
met. Reduce government stake in PSUs to 51%, offer ESOPs and restrict single shareholders' stake to 10%. PSUs will become more efficient and the government will get resources it needs for its financial inclusion agenda and raising its spend on education and healthcare. 

Focus on the urban agenda: 40% of India's population is going to be urban by 2030 — a 
doubling of the current urban population. 
India needs many new cities with adequate housing, transportation and urban infrastructure. DMIC is India's most promising urban project. It must remain fast-tracked and supported in toto.



Recommit to market reforms: The liberalization has brought economic growth. Yet, of late, there 
are pressures to go back to populism, redistribu
tion of wealth and socialism. No doubt, there have been market failures. But government failures have been even bigger. We should recommit to market reforms. Social and political buy-in requires that corporations ensure that growth be inclusive. Social justice and market forces must work in harmony. 
Reinvent higher education: India has a very large young population. Yet, of the total number of 
people who should pursue higher education, 
only 18% actually do so. We must dramatically upgrade the quality and capacity of higher education through better collaboration between industry and academia; leveraging technology; public-private partnerships; stronger role of state governments in higher education; and others. 

Reimagine healthcare delivery: India's healthcare system is in a major crisis. Infant mortality is seven times that of the United States. 
India has 63 million diabetics and 2.5 million cancer sufferers, the majority of whom will not get quality treatment. There is a severe shortage of doctors, beds, and medical facilities. We must declare that healthcare is a human right. In order to close India's enormous gap between healthcare supply and demand, there is an urgent need to scale up the practices of those Indian hospital exemplars that provide quality healthcare at ultra-low cost. 

Transform infrastructure: A strong manufacturing sector is required to create jobs that can 
absorb millions of youth. The backbone of 
manufacturing is infrastructure. We must place very high priority on building the infrastructure that can provide world-class supply chain to fuel growth in manufacturing. 

Embrace reverse innovation: 
Reverse innovation is any innovation first adopted in a 
poor country like India which subsequently can flow into rich countries. Innovating to solve the problems of the poor represents the biggest opportunity for Indian corporations and should be their number one priority. However, this a l s o presents some of the hardest techn i c a l challenges, where we cannot simply adapt solutions used in wealthy markets. We have to innovate anew. 
Push reforms, make healthcare a right 
VIJAY GOVINDARAJAN | PROFESSOR, TUCK SCHOOL, DARTMOUTH COLLEGE


N R NARAYANA MURTHY | CHAIRMAN, INFOSYS Parties must field non-political candidates in 2014 
    The year 2013 has been a disappointing one in many ways – low GDP growth rate; no progress in liberalization; very poor handling of a difference of opinion with an important ally; worsening of urban infrastructure; and a judgment by the Supreme Court that puts us back by at least 20 years. I can go on and on. My expectations from the new government are... 


Courageous, visionary leader: 
I hope that the 2014 elections 
will bring a government with 
a fresh, youthful and confident mindset. If we can at least get a courageous, firm and visionary leader who will enunciate his or her vision to redeem the pledge of the founding fathers through internationally proven ways of reducing poverty, that will be enough. Rahul Gandhi's speech at FICCI and reports of Narendra Modi's track record in Gujarat raise our hopes. 

Create jobs: The only way India can reduce poverty is by 
creation of jobs with decent 
disposable incomes. No country has solved the problem of poverty only through subsidies. Every country that has reduced poverty has done it by reducing friction for businesses to operate, export, grow and generate productive employment. 

Perform: It is important for the UPA and the NDA to remember that performance
leads to recognition, recognition leads to respect, and respect leads to power. The only way India can become powerful in the eyes of the developed nations is through performance like China has done. 

Field non-political candidates: 
Both UPA and NDA have to 
pick several non-politician 
candidates who have demonstrated performance in their current or earlier avatars. I know the corporate world a bit and let me name just a few examples – Nandan Nilekani, Deepak Parekh, Vindi Banga, Mohandas Pai, Yogi Deveshwar, Venu Srinivasan and K V Kamath. We have excellent people from other fields too. Ramesh and Swati Ramanathan are probably the best two brains in the country in election reforms and urban governance. 

Integrity: We need our parliamentarians to demonstrate 
integrity of thought in edu
cating themselves well on legislations, and discussing and debating them on their merits. We have waited 67 years for such integrity from our parliamentarians. I am an optimist. Therefore, it is never too late. 
    Happy New Year!


ADI GODREJ | CHAIRMAN, GODREJ GROUP 
Introduce GST, boost Saarc ties 
Take quick and early decisions Control the fiscal deficit, the balance of payments and the $/Re rate Considerably improve ease of doing business in India Introduce GST as early as possible Improve relations with other Saarc countries


SACHIN BANSAL | CO-FOUNDER & CEO, FLIPKART Improve internet infrastructure 
    Being a part of the e-commerce industry, there are a few essential things I would like the new government to focus on: 

Uniform tax code: This will go a long way in clearing up a lot of ambiguity that businesses face today and 
help them expand and function to their potential. 

Special cells in govt depts: Start special cells within existing government departments that pave the 
way for entrepreneurs and small businesses to set 
up operations smoothly. These cells could provide assistance in the areas of registrations, payment gateways, infrastructure, etc — areas that are processheavy and require extensive bandwidth that smaller businesses find difficult to spare. 

Focus on improving data centre infrastructure: SEZs for data centre operations, for example, would reduce the cost of running these centres within India. 
This, in turn, would provide relief to smaller companies who currently need to run their operations from international centres due to cost considerations. 
Boost tech infra: At an overall level, the government also needs to pay attention to strengthening the overall internet infrastructure in 
the country. This includes focusing on the rural broadband strategy, enhancing our mobile internet infrastructure, increasing the reliability, security and speed of the web (and, therefore, networked applications), etc. Steps have already been taken in this direction but there is still scope for a lot of improvement. 
Take India-centric view: Most importantly, the Indian government should take a fresh Indiacentric view of the architecture of internet 
infrastructure in India. They should work towards preserving the independence of the Indian internet users and taking steps to ensure their data security.


MARK MOBIUS | EXECUTIVE CHAIRMAN, TEMPLETON EMERGING MARKETS GROUP Overhaul tax code to reduce litigation 1
Encourage investments: We believe the government must slowly reduce the extent of public 
sector involvement in the economy and allow 
private enterprise to make investments. This could lead to an increase in productivity, growth rates and the currency should likewise strengthen. It is heartening to note that the government is finally taking steps to liberalize investments. However, that should not be done just to increase inflows, but also to enhance efficiency and productivity. 

Overhaul tax and policy code: India needs to dramatically overhaul the policy/ tax code – which 
has resulted in a lot of litigation. That has un
dermined business confidence in the country. Though the government has taken some steps; a lot more needs to be done. 
Clarity on title rights: Ownership and transferability of assets should not be compromised. 
There should be earnest endeavour to ensure 
that bonafide land & property titles, mining leases, access to natural resources are not impaired in any manner through executive or judicial intervention. 
Greater voice for minority shareholders: The only way to truly revive capital markets is to make 
companies answerable to minority shareholders. 
The government and Sebi have taken many positive steps in this regard and protection of minority rights would ensure that all investors — retail and institutional — have greater faith in the market. 

Facilitate management change on default: To move forward India should facilitate management and ownership changes in businesses that 
have willfully defaulted on their debt obligations. Capital is scarce and should be deployed with deserving management teams backing business plans and if that entails a management change, India should be willing to go down that route. The new RBI governor has made his intentions clear in this regard and now is the time for us to see him deliver on the same.

MCX to advise FTIL to cut stake in bourse to 2%

Mumbai: The board of Multi Commodity Exchange (MCX) on Thursday has decided to write to Financial Technologies (FTIL), its main promoter, to reduce the latter's stake in the commodity bourse to 2% or even less within the next one month to comply with an order by Forward Markets Commission (FMC), that found FTIL failing to meet the 'fit & proper' criteria to be a promoter of an exchange. The decision by the MCX board was taken after the Bombay high court last week did not put a stay on the FMC directive of December 17. 

    In a communication to BSE, MCX said its board of directors has decided to advise FTIL "to implement FMC order dated December 17 by reducing its stake in the company (MCX) from 26% to 2% or below, within a period of one month." The commodity bourse also withdrew the representation of Miten Mehta on MCX board in view of the FMC letter. Mehta was designated as FTIL's nominee on MCX board after the group's main promoter, Jignesh Shah resigned from MCX board last month. 
    Earlier this month, FMC had found that FTIL, along with Shah and two other former executives at the group, Joseph Massey and Shreekant Javalgekar, not 'fit & proper' to hold more than 2% stake in MCX for their role in the Rs 5,600-crore NSEL scam. The order also implies that Shah, Massey and Javalgekar can neither run nor be on the board of any commodities exchange. 
    In its order, FMC said several shortcomings were 
noticed in the functioning of NSEL, which included problems with warehousing, risk management, corporate governance and related party transactions. 
    The regulator also said that because of the huge profit of about Rs 125 crore earned by NSEL during fiscal 2013, the value of the shares of Shah in FTIL shot up manifold, which gave him the benefit of a spectacular market capitalization of his investments in FTIL running into thousands of crores of rupees.In an unrelated development, a group of NSEL investors have written to the Economic Offences Wing of city police, pointing out the role of brokers in the NSEL scam.


D-St eyes strong pre-LS poll rally

Mumbai: In the run up to the Lok Sabha elections in 2014, Dalal Street is expecting a strong rally. The reason for such hope is partly because the smart gains market players had enjoyed in the run up to each of last three Lok Sabha polls, in 1999, 2004 and 2009. Although economic and market fundamentals do not justify any rally in the sensex from the current levels, marketmen are pinning their hopes on a 'reform-oriented stable government' post the 2014 elections and that could take the sensex higher between now and April-May, when the polls are expected to kick off. 

    Consider this: In 2009, between mid-March, that is just before the polls started, and mid-May when the UPA-II government was formed, the sensex rallied 55%, from about 9,000 level to nearly 14,000. In 2004, the index had rallied nearly 22% during the five months leading up to the polls in April. And in 1999, in the six-month period to the formation of the NDA government, sensex gained 34%. 
    There were phases of negative or muted gains around the 2004 polls, but those were mainly because of negative perceptions about the Left parties, who joined the UPA coalition and players perceived them to have an anti-re
form stand. During the last Lok Sabha polls, the sensex rallied on expectations of a stable government and spendings on social welfare schemes by the UPA. 
    Post the elections, after the Congress-led coalition (minus the Left parties) got a mandate better than what was expected, the markets rallied further. 

    The D-Street is now said to be gearing up for a repeat show of the last three polls. 
    "This is a rally of hope that going forward we will have a reform-oriented stable government… and all fundamentals would be ignored in such a rally," said Ambareesh Baliga, managing partner, Edelweiss Global Wealth.


Wednesday, December 25, 2013

Price rise has hit school fees the most since 2004 Up 433% In 9 Years Of UPA Rule

 The fact that inflation has been an area of concern for some years now is well known, but exactly what goods and services have seen prices rise most sharply? School fees, a CSO study shows, have seen the most dramatic spike over the tenure of the UPA, up 433% between March 2004 and March 2013. 

    The chart topper is quite ironic given the much-talked about Right to Education law enacted by the UPA. The CSO study tracks rural retail prices and shows school fees were Rs 48.7 per student on average in March 2004 and had risen to Rs 259.6 by March 2013. 
    Mango prices recorded the second highest increase, up 320% from about Rs 16 per kg to just over Rs 67 per kg on average over this nine-year period. Oranges (275%), black pepper (232%), beef (229%), and buffalo meat (228%) were the others at the top of the list. 

    Among more widely consumed items, mutton (210%), salt (182%) and moong dal unwashed (190%) have been others that have really burnt holes in pockets. Cigarettes too have on average become dearer by 188%. These are, of course, rural retail prices, so the actual prices and increases that the average urban Indian faces are likely to be different, in most cases higher. However, the broad trend is clearly unlikely to be very different between rural and urban areas. 
Rail fares down 7% in 9 yrs of UPA n the positive side, some goods and services have seen prices stagnate or even decline over these nine years. Among them are postcards, inland letters and local railway fares. 
    The minimum rail fare for an adult has reduced from Rs 8.8 to Rs 8.1 in these last nine years, areduction of 7%. There has been no hike in inland letter cards, which cost Rs 2.50 in March 2004 and were priced at the same level in March 2013. Postcards too have seen their price remaining unchanged at 50 paise each. 
    The average price of a transistor radio was Rs 421 then and has risen to 481 – a modest rise of just under 10% in nine years.


Monday, December 23, 2013

Kejriwal at wheel, Cong has brakes

AFTER STUNNING DEBUT, AAP SET TO FORM DELHI GOVT. BUT BUMPY RIDE AHEAD

Support Not Unconditional, Says Dikshit


New Delhi: The Aam Aadmi Party (AAP) looks set for an exciting yet uncertain debut in government as rumbles surfaced in the Congress with former chief minister Sheila Dikshit asserting that support to the newbie was not unconditional and the party deciding to seek a roadmap on the AAP's programmes. 
    Dikshit's move on Monday to seek a meeting of party MLAs at her residence and slogans raised by a group of Co
ngressmen against AAP leader Arvind Kejriwal at the DPCC headquarters indicate the hurdles and contradictions that AAP and its outside supporter face. 
    Though new DPCC chief Arvinder Singh Lovely quickly dismissed talk of a rethink of support despite the protests, sources said the party does intend to seek some clar
ifications from the AAP on its plans for the capital. 
    While he ruled out withdrawing support, Lovely did 
make an important observation, saying, "On the future course of action, I will be meeting elected MLAs on Tuesday and then we will decide if we should seek a roadmap from AAP. After all, we are giving it support." 
WHAT KEJRIWAL SAID 
THEN 
I am a common man and I neither aspire to be the PM nor the CM...Who am I (to eye these posts)? — ON DEC 8, AFTER DELHI POLL RESULTS 
I swear on my children, we will neither ally with BJP nor Congress 
— ON SEPT 28, 2013 

    AND NOW 
I just met the Lt Governor and told him that people here want AAP to form govt in Delhi 
AAP's hypocrisy will be exposed soon: Cong leader 
    When contacted, Dikshit denied that the meeting at her residence with MLAs was to review support to AAP. She said she didn't know about the protests either, but would talk to party workers on Tuesday to find out the reason for their unhappiness. 
    All this happened within hours of Kejriwal meeting Lt-Governor Najib Jung to stake claim for forming the government with Congress support. The Congress has clearly been put in a corner. If it now declines to lend support to AAP, it will attract popular anger, but if it does not, an AAP government could steal a bigger march over it. 
    AAP clearly sees heading the Delhi government as an opportunity. It knows whatever it does will attract a lot of attention, and apart from the symbolism of shunning red-beacon cars, security and other trappings of office, if it can also take some steps that are seen as different yet effective governance, it can amplify its appeal in the upcoming LS polls. 
    A senior Congress leader told TOI that support to AAP can't be withdrawn right now, although he added that the new party's "hypocrisy" will soon be exposed. On its part, AAP seems seized of the fact that it has fired national imagination about it representing an alternative political culture to Congress and BJP. 
    Congress may not keep up its support if AAP, which has positioned itself as a crusader against corruption, starts to review contracts given by the outgoing government and targets 
Congress leaders. At the same time, it can ill-afford any perception that it brought down a popular government to shield the "corrupt" among its ranks. 
    Congress could seek some form or regular consultation and an inkling of the priorities the new AAP government led by Kejriwal is likely to consider in the months ahead. The issue is quite critical in political terms as the election is fast approaching. As both sides regard each other warily as partners, expectations are being pitched cautiously with AAP leader Prashant Bhushan pointing to Congress's poor record in offering outside support and speaking of a two-to-six month tenure for the new government. 
    Congress leaders said offering outside support had been endorsed by all leaders, including Dikshit, and it would be political harakiri to reconsider the decision at short notice as it could boost AAP and hurt Congress's credibility. 
    Despite all the misgivings over supporting an outfit that it still regards as a maverick and one that has been unsparing in its attack on the Congress for corruption, party bosses did not see fresh elections until the Lok Sabha polls — due in April-May — are concluded. In fact, Dikshit had also struck a cautious note on Monday evening, saying, "We will stick to our stand of giving support to AAP. There was a meeting at my place after Kejriwal met the LG. Our stand of giving them support remains the same. Yes there was certainly a protest outside DPCC. We will evaluate workers' complaints tomorrow." 
    For the full report, log on to www.timesofindia.com 

TOP: Arvind Kejriwal with his parents sitting at the back of the car 
BOTTOM: Kejriwal with wife Sunita, son Pulkit & daughter Harshita

Sunday, December 22, 2013

INDUSTRY SEEING SEISMIC SHIFT E-Comm Portals Aim to Hit the Profit Highway in Two Years

Leading Indian online retailers, including Snapdeal and fashion portal Myntra, expect to turn profitable in the next two years, signalling a seismic shift in an industry where so far growth has been pursued at the expense of the bottom line. Pressure from risk-capital investors and growing consolidation in an industry where the leaders are outpacing the laggards is forcing online retailers to identify newer revenue streams and cut down on costs. Snapdeal, an online marketplace, expects to reach about . 6,220 crore in gross merchandise sales by the next financial year, and profitability the year after. "We want to be India's first profitable e-commerce company and its largest mobile commerce company," said Kunal Bahl, cofounder of Snapdeal. "Mobile will be the big driver." In fiscal 2013, Jasper Infotech — the parent company that owns and operates Snapdeal — posted losses of . 120.1 crore, wider than the . 81.2 crore loss in fiscal 2012, according to company's financials filed at the Registrar of Companies. The renewed focus on profitability comes at a time the company looks to list its shares on public markets in the United States over the next 12 to 24 months. 

In Bangalore, fashion retailer Myntra aims to be profitable by 2014 end. "Only at scale can you amortise technology and marketing costs," said Mukesh Bansal, founder of Myntra. He said online retailers that have built large volumes of business can now think of profitability. "Without scale, profits might be possible but are meaningless." 
In the quest for profits, Bansal's firm, which expects turnover of . 800 crore in FY14, has chosen not to sell fast-moving, low-value apparel that would have boosted sales but brought in lower margins. In FY13, the company had sales of . 212.4 crore at a loss of . 134.7 crore, according to the ministry of corporate affairs' (MCA) website. Mukesh Bansal admitted e-commerce companies cannot afford to take their foot off the accelerator. "But the choice is between sales at any cost or sustainable growth. We have chosen the latter." Experts said the main reason for this focus on profits is the push from risk-capital funds. "Most investors today are looking for ventures that have real profitabilitybased feasibility. They do not anymore want to look at business plans and strategies that have unfeasible timelines for profitability," said Ashish Jhalani, founder of eTailing India, a firm that tracks the online retail industry. Since 2011, equity investors have put in almost $1.2 billion (over . 7,450 crore) into online product retail, according to research firm 
Venture Intelligence. However, this year, money has grown scarce. More than half of the over $600 million (over . 3,700 crore) raised by e-commerce companies went to market leader Flipkart. The Bangalore-based company asserts it is still focused on growth and not profits. "Our focus right now is still on investing in our growth story," said Binny Bansal, cofounder of Flipkart. Flipkart India, the wholesale cash-and-carry entity of the online retail firm, reported a loss of . 281.7 crore before extraordinary items and tax in fiscal 2013, compared with a . 109.9 crore loss in fiscal 2012. "Our business is growing at 100% (annually) and till this growth slows down, we will not be looking at profitability as a factor," said Bansal. In FY13, the company earned total income of . 1,180 crore, compared with . 204.8 crore the previous year. The sales target for 2015 is to reach $1 billion, or about . 6,200 crore. 
"No investor is saying compromise on growth. But everyone has realised there is a finite amount of capital available to reach break-even," said Prashanth Prakash, a partner at Accel Partners. The fund has invested in multiple 
online retail ventures including Flipkart, Myntra, Bluestone and Zansaar. "While earlier people thought there was six to seven years to break even, now investors are looking at a more reasonable time frame." 
Globally, Amazon, the world's largest online retailer, founded in 1994, has never been profitable since inception. In contrast, China's Alibaba, the world's largest online marketplace, has had a far smoother road to profitability, given that it does not own any of the products that is sold on its flagship websites, Taobao and Tmall.
Indian entrepreneurs said this latest focus on business fundamentals points to growing maturity of the local market. "A year or two ago, everyone was looking at who the leaders will be. Now, the market leaders are emerging and no one doubts the viability of ecommerce," said Rohit Bansal, cofounder of Snapdeal. 
While leaders like Flipkart can bide their time, others are focusing on clearing the red ink on their balance sheets. Online marketplace, ShopClues has opted for cheaper and measurable digital campaigns instead of expensive traditional advertisements. They have also incentivised customers to opt for card payments instead of cash on delivery, which costs companies more due to additional processes and higher rates of returns. 
radhika.nair @timesgroup.com 

10000000000000 How All of it was Made into a Big Zero

Officials say Natarajan held up projects worth . 10 lakh crore, but she says nothing was kept pending and her work was praised by Manmohan


    Former environment and forest minister Jayanthi Natarajan had delayed approvals for big-ticket projects worth around . 10 lakh crore, even after environmental appraisal panels had cleared them months ago or deadlines had been set for her ministry to resolve policy issues, senior government officials in critical infrastructure ministries told ET. Her exit on Saturday, hours before Congress Vice-President Rahul Gandhi endorsed India Inc's frustration with delays in green clearances, is being widely seen in the Capital's corridors of power as the price for being perceived as not being fully on board with the government's drive to revive India's investment climate. 
ET had reported in its edition dated February 11 on the difficulties which India Inc said it had been facing under Natarajan. 

According to an internal government analysis carried out in early December, out of major projects worth . 14 lakh crore that have sought the Centre's help for unclogging red tape hurdles, the environment ministry was responsible for delays in case of investments of over . 5 lakh crore. These are projects which have approached the government for help with clearances under the aegis of the Cabinet Committee on Investment (CCI), a panel of ministers set up to resolve procedural delays plaguing industry. Further, projects worth another . 4 lakh crore, for which clear deadlines had been set to resolve policy issues, continued to be held up, confirmed two senior government officials in different ministries. In addition, projects worth a further . 1 lakh crore, identified by the Gujarat government as hit by red tape, were stuck at the green ministry. 
Reluctance to Tweak Norms 
Industry officials said this is just the tip of the iceberg since the government is only looking at salvaging projects over Rs1,000 crore for now. Decisions should not be delayed for "no good reason", Rahul Gandhi said on Saturday — which industry honchos read as a direct reference to what they describe as overdue project approvals on the environment and forest front that are held up. In many such cases, expert appraisal panels have approved clearances for projects, but the ministry either claimed the minutes (of those panel meetings) hadn't been finalised or the file was "under consideration". Sanjaya Baru, former media advisor to Prime Minister Manmohan Singh, said that if Natarajan had been let go because of her performance, it was a heartening development. "It shows that even at this late stage in the life of this government, performance evaluation is being done by the prime minister," Baru told ET. 
One of the biggest areas of concern, discussed at the highest levels of the government and the Congress high command after 
complaints by CEOs as well as top Cabinet ministers in recent weeks, has been the forest ministry's apparent reluctance to overhaul its norms and processes for granting clearances. Natarajan, for her part, strongly denied that she had been sacked, or any delay in approving projects. "No projects have been put on hold. I quit the government 100% for party work. No other reasons. The prime minister has appreciated my work," the Rajya Sabha MP told PTI in an interview on Sunday. 
"Only 8% projects come to the MoEF. 92% of the projects are cleared by states. Nothing comes to me. There are no pending projects," Natarajan said. 
Defending her tenure, she dismissed complaints from industry of delay in environment clearances but admitted that she was apprehensive about dam and hydro-electric power projects in the wake of the Uttarakhand tragedy. Natarajan said there are "legitimate environmental concerns" and such projects (referring to hydro-electric projects) need a careful appraisal. 
However, officials at ministries dealing with industry and infrastructure take a less sanguine 
view of her tenure. 
The ministries of power, coal, surface transport, steel as well as petroleum and natural gas have been highlighting what they describe as lack of action by Natarajan's ministry on critical projects and policy bottlenecks. At least three of these ministries had moved separate proposals in recent weeks, seeking a Cabinet directive to the green ministry for timely decision on projects. 
The petroleum ministry under Veerappa Moily, for instance, had approached the Cabinet Committee on Investment to issue a dik
tat to the environment ministry for okaying oil & gas projects worth Rs 8,000 crore. At its last meeting on December 9, CCI accepted the proposal put up by Moily, who now takes additional charge of the green portfolio after Natarajan's ouster. 
"Frankly, there are no excuses for the length of time required to clear some of these projects. We cannot allow you to be held back by slow decision-making. Ac
countability has to be clear, fixed and time-bound," Rahul Gandhi asserted at Ficci's annual general meeting on Saturday, adding that CCI — set up this year — and the Project Monitoring Group (PMG) —set up in the Cabinet secretariat — indicate UPA's recognition of the need to fast-track clearances. "Of course, many projects are still stuck — some for good reason and some for no good reason at all," Gandhi had admitted. 
Planning Commission Deputy Chairman Montek Singh Ahluwalia told industrialists at a recent meeting that CCI could take a decision on a project if a particular ministry refused to do its job by either clearing or rejecting a proposal — the most common 
problem for industries left hanging by the ministry of environment and forests. 
"Industry used to complain about Jairam Ramesh for his go/ no-go zones approach for mining operations. But in hindsight, he at least introduced an element of predictability for potential investors," said a mines ministry official. "The element of suspense around environment clearances has risen exponentially since then," he said. 
A senior coal ministry official pointed out that the PM had asked the environment ministry to decide on forest and green clearances for several critical coal mining projects as far back as February this year. "A decision was taken to 
set time frames for all clearances by March, but over 20 projects are still to be cleared," the official said. Three major rail linkage projects involving investments of Rs 10,000 crore, which could boost India's coal output by 300 million tonnes a year, are also stuck with the environment ministry, the official said. "The ministry is yet to give a clear status of all forest and environmental clearances affecting these projects, sought by the Cabinet a few months ago," he said. 
An official at the power ministry, dealing with billions of dollars of stalled power generation investments, said nearly 40% of unresolved issues holding up all major projects originate in the environment and forest ministry.


‘Exclusion of CDMA auction to hit telcos with dual-tech’



New Delhi: CDMA lobby group Auspi has written to the government that dual technology telecom providers like Reliance Communications (RCOM) and Tata Tele will suffer "irreparable harm" due to the absence of auctions in the 800 MHz space along with the sale of 2G airwaves in January. It has suggested that the telecom ministry should work out a pricing for CDMA airwave sale in the wake of Trai's refusal to do so. 
    Regulator Trai has been steadfast in its recommendations that there should be no sale in the CDMA spectrum band (800 MHz) during the upcoming auctions, despite being asked by the Department of Telecom (DoT) and the Telecom Commission to arrive at a pricing for the non-GSM band. 
    "Auspi is deeply concerned that 800 MHz spectrum band auction has been delinked and a separate auction is scheduled for 900 and 1,800 MHz (GSM) spectrum bands in January... Our members are dual-technology operators and require both CDMA and GSM spectrum," secretary general Ashok Sud said in a letter written to telecom secretary M F Farooqui. "The decision to de-link auction would be discriminatory and cause irreparable harm to our members," said the letter, which was also marked to members of the Empowered Group of Ministers on Telecom, including finance minister P Chidambaram. 
    DoT has already written to Trai that it needs to comply with the government's directions regarding CDMA auctions in accordance with Section 25 of the Trai Act. The provision speaks about the government's power to issue directions to Trai and says the regulator will be "bound by such directions on questions of policy as the central government may give in writing to it from time to time".

Banks lower rates on personal loans Seek To Attract ‘Good’ Customers To Counter Slowdown In Corporate A/c

Chennai: In an effort to grow their lending books, many banks are now offering lower interest rates on personal loans. With the slump in auto sales continuing and certain real estate markets showing signs of sluggishness, coupled with corporates shying away from major expansion, banks are looking at new segments for growth.

    According to Sumit Bali, executive VP, Kotak Mahindra Bank, the book on the retail side has ticket sizes that are "small and delinquencies less". "Banks are targeting select 'good' customers from their existing base for personal loans at aggressive rates," he said. For these customers, Kotak's rates can go down to 13.5-13.25%. 
    The personal consumption segment — home loans, car loans, personal loans and credit cards — is holding up despite the slowdown, a comeback after 2008-09 when unsecured loans had completely skewed the market and many lenders burnt their fingers. "Since then, lenders have become wiser and there are many more firewalls to prevent a repeat," said Bali. 
"There is not much stress of delinquency." 
    The risk factor becomes even lower when the loan is offered to a preferred customer with whom the bank already has a relationship through another loan or a long-standing account and whose credit history is impeccable. Hence the lower rates, say sources. 
    Some time back, HDFC 
Bank too sent mailers to its elite customers with attractive offers on personal loans. Accordingly, those who have a takehome salary of over Rs 75,000 per month can avail a minimum loan of Rs 10 lakh at reduced interest rates, ranging between 12.99% and 14% per annum on a reducing basis. The bank's personal loan portfolio grew by 26% to touch Rs 17,500 crore during 2012-13 as compared to Rs 13,891 crore during 2011-12. This has now moved up to Rs 19,314 crore as of September end of this fiscal. 
    Federal Bank is offering overdraft facilities to salaried account holders at an interest rate of 12.55%. "Under this scheme, the interest rate is just 2% above our base rate (10.55%) which itself is very competitive," A Surendran, general
manager and head (retail), Federal Bank, said. Such customers can avail overdraft limits up to six times their monthly salary. Last month, as part of its festive offer, Indian Overseas Bank slashed its interest rate on consumer loans (mainly for purchase of durables) by 200 basis points to 13.5% from 15.5%. This interest rate offer is on till end of January. "The whole idea was to revive consumer spending in certain categories," M Narendra, CMD, Indian Overseas Bank, said. 
    Others like Karur Vysya Bank are not going in for a revision immediately. "The personal loan segment is still a high risk area. This segment also entails high cost of servicing in terms of repayment and loan recovery," K Venkataraman, MD and CEO, said. 

OFFERING A BETTER DEAL 

    Banks' shift in focus follows the long-drawn sluggishness in auto sales and hiccups in some property markets 
    Problems have been compounded by cos going slow with their expansion plans, hitting credit offtake 

    For banks, the answer lies on the retail side as ticket sizes are small and delinquencies less



Modi uses Adarsh cover-up to rip Rahul’s anti-graft campaign


'Corruption Talk Is Audacious, A Mere Ploy'


Mumbai: Narendra Modi on Sunday latched onto the controversial 'all clear' given to Congress politicians allegedly involved in the Adarsh scam to tear into Congress vice-president Rahul Gandhi for casting himself as an anti-corruption warrior, calling it an unparalleled example of audacity. 
    Addressing a well-attended rally at the MMRDA grounds in BKC, Modi said the clean chit to the biggies in Maharashtra Congress had exposed Rahul's anti-corruption intent as a mere ploy. Referring to Rahul's speech at a Ficci meet in Delhi on Saturday, the BJP's PM candididate said, "The speech of a Congress leader 

yesterday left me befuddled. He belongs to a party which is neck-deep in corruption. But he spoke with such an innocent demeanour that it appeared he belonged to a different party. It was an unparalleled example of audacity. Look at the paradox. He was speaking of corruption just after the Congress government had tried to bury the Adarsh scam." 
    His focus on Adarsh was a clear indication that the Congress's attempt to help its leaders who have been accused of complicity in the scam may exact a political cost by undercutting Rahul's effort to buffer the party from the charges of corruption. 

THE BIG ROAR 

POLICE ESTIMATED THE TURNOUT AT THE MMRDA GROUNDS ON SUNDAY IN THE RANGE OF 
2.2-2.5 lakh 

Thousands landed in the city for the Maha-Garjana rally on long-distance trains 
Road transport took a hit as 500 BEST red buses were redirected to ferry people to the venue of the rally in BKC 
Many autos and cabbies refused to ply to Kurla, Bandra, Sion and Santa Cruz

Seeking A Vote For India




Monday, December 16, 2013

Inflation hits 14-mth high, rate hike likely



New Delhi: Inflation accelerated to a 14-month high in November as prices of vegetables and food items soared, raising the prospect of a hike in interest rates when the RBI reviews the monetary policy on Wednesday. 
    Data released on Monday showed the wholesale price index rose 7.5% in November, above the previous month's 7% and 7.2% last November. This was also above market expectations of a 7% increase. Food prices continued to exert pressure, rising an annual 20%. TNN 
Govt under pressure to tame runaway prices 
New Delhi: Inflation rose to 7.5% in November on soaring food prices. While vegetables shot up 95.3% year-onyear, onion prices rose an annual 190.3% during the month. Although prices of vegetables have moderated in recent weeks due to fresh arrivals, high food prices continue to be a policy headache. The increase in food prices in November was the fastest since June 2010. In the past nine years, food inflation has averaged 10% compared to below 5% in the preceding decade. 
    The data is likely to put more pressure on the government to tame stubborn price pressures, which have been identified as a key reason for the Congress's rout in the recent state elections. Household budgets have been upset, while the increase in interest rates has led to larger outgo on housing and car loans. 
    The increase in wholesale inflation rate comes against the backdrop of a surge in retail prices, which rose over 11% in November, largely on the back of soaring vegetable and food prices. The government also revised upwards the wholesale
inflation data for September to 7.1% from the previously reported 6.5%, highlighting the entrenched price pressures on the economy. 
    The RBI, which has said inflation remains at an uncomfortable level, is expected to raise interest rates again. 
    "While food inflation may ease in the coming months as supply conditions improve, underlying infla
tion is susceptible to upside risks as inflation expectations are sticky and may continue to drift up," said Leif Eskesen, chief economist for India and Asean at HSBC. "This means the RBI will have to maintain a hawkish stance and we believe there is a good chance that it will hike the repo rate this Wednesday by another 25 basis points," he added.



Airtel’s mobile TV viewership soars 400%



Mumbai: Mobile television registered a 400% growth rate in viewership for the country's largest telco as more Indians watched TV on the go, said an annual study by Bharti Airtel, which maps consumer trends over mobiles. With an increasing number of bigger screened smartphones being sold at cheaper prices and data charges being lowered substantially this year, most telcos saw frenetic growth in internet over mobile. 
    Airtel's Hello Tunes service clocked 120 million downloads, signalling the popularity of music consumption over the mobile, said Airtel Mobitude 2013, the findings of which were shared exclusively with TOI. 
    The growth in mobile TV has helped push mobile-only 
content and mobile-focused aggregators of video content such as nexGTv's app, Vuclip and Ditto TV. 
    Entertainment as a category witnessed 800% more viewership over sports and 200% over news, said the report. Airtel Re 1 entertainment store, which was launched earlier this year, contributed to increased data usage, the company said. The number of data users jumped 124% from last year and data consumption increased 220% with music, image and gaming leading the download chart in the store. 
    Govind Rajan, chief marketing officer (customer business) at Bharti Airtel, said, "This year's verdict shows that mobile TV has witnessed the highest traction in viewership, establishing the fact that customers are now catching up on TV shows on the move. 
Data usage continues to grow at a fast pace." The Airtel Entertainment Store brings video to its subscribers at Re 1. 
    Vodafone, too, saw its data 
subscribers move up to 42.5 million — about 27% of its overall customer base as of September this year. What was significant is that data browsing contributed 30% of the overall growth in the first half of FY14 with 3G now contributing around 50% of growth, the telecom operator said. 
    A report from Mumbaibased financial advisory firm Avendus Capital said players such as Vuclip, a mobile-focused aggregator of video content, have seen their user base grow to 45 million globally, a third of which is based in India. It delivers over 25 million videos to its users on a daily basis. "The focus for carriers is on driving video consumption that provides an optimal experience across the increasing penetration of low-cost smartphones on networks that are getting hit by more and more data (almost 50% of all data on mobile networks worldwide, including India, is already video)," said Nickhil Jakatdar, CEO and founder of Vuclip. 

DATA USAGE GROWTH ZOOMS 

87% of data traffic came from 3 G-enabled de evices 
Use of 5.5-inch plus screen jumped 123% in the last two quarters 
Google continues to be the most visited site in terms of unique users followed by YouTube and Facebook 
The Re 1 entertainment ment store popular in rural India with music, image and gaming trending on it 
Religious Reli content also trend in image downloads 
Sachin Tendulkar topped mobile downloads, up 124% over last year 
Mythology-inspired kids gaming trended with about 130% more downloads than cricket 
Data consumption jumped 220%, driven by two-fold increase in smartphone users and a 124% jump in data users

 

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