Indian Economy: Growth -3

11-15-2005, 09:36 PM

QUOTEhttp://www.swadeshi.org/dynamic/modules.php?name=Content&pa=showpage&pid=44&HNETSEID=8bfe3dd09170e15b9cd554e5e8fa24c
India shall be built by us, not by the US 
S. Gurumurthy

Â´Without Foreign Direct Investment of $ 10 billions every year, we cannot achieve 8% growthâ, said an Â´expertâ. He wanted the full opening of the country to FDI. See what is happening today. We are actually growing when FDI is factually going down. The FDI this year is less by 50%. But instead of falling by 50%, our economy is forging ahead by almost that number. Says the Central Statistical Organisation; we are likely to top 7% growth in GDP this year. Had the Prime Minister not intervened, the Â´expertâ would have opened the country for sale. The lesson: the country can grow, even if the FDI declines. FDI and growth are not necessarily companions.

Â´Unless we deliberately depreciate the Rupee our exports cannot growâ counselled Â´expertsâ. Last year our exports rose by 20% plus and continue to grow this year. But simultaneously our Rupee value has appreciated by almost 10%. The lesson: our exports can grow even if the Rupee does not depreciate, even if it appreciates instead. 

In the year 2000, had some one asked Â´why should India globalise ahead of the WTO scheduleâ the response from the Â´expertsâ would have been like this: Â´If we didnât globalise fast enough, the foreign investors can turn their back on us. Our forex position is not strong. We will be at the doors of the IMF and World Bank. They will finish us. Remember we went nuclear under their noseâ. The forex reserves then were $ 30 billions. Today it is $86 billions plus. Not knowing what to do with it, we are pre-paying our foreign debts. Yet the same policy persists. Now the experts invent other reasons to support the very same policy. The lesson: reasons will change but the policy will not.

The Indian manufacturing companies are doing well this year. Data reveals rise in profits, more than rise in business turnover. What is the implication? The manufacturing sector has shed the extra cost and become lean. Once the fat is cut, growth follows. This means that the Indian manufacturing has finally gained in confidence and is moving ahead. Seshasayee, a professional CEO and my friend, told me years back when there was a temporary rise in auto sector, Â´we do not know why we are doing wellâ. That was the extent of the confusion in Indian manufacturing. Recalling his earlier comment, last week he told me Â´now I can say why we are doing wellâ. He spoke of the Indian auto sector globally partnering development of future fuel technologies! Today Tata Motors, Ashok Leyland, Mahindras, TVS Motors, and Bajaj are planning to penetrate the world. What a contrast! In early 1990s, Finance Secretary of our own government used to advise the Indian manufacturers to sell out forthwith before their factories turn scrap. Obviously Indian manufacturing has escaped all efforts to destroy its confidence. The lesson: national business can succeed despite the government.

Harshad Mehta was the hero of the stock market in 1991. And he was its devil in 1992. Ketan Parekh was the star in 2000, and also the evil in 2001. Today our stock markets are on the rise. The BSE index stands at over 4400 points, from less than 3100 in April 2003. There is no Harshad or Ketan, hidden or open, driving the market today. It is more investor, rather than speculation, driven rise. Of course the futures market is driving the sentiments partly. This risk will require regulatory watch. The lesson: the stock market can grow without celebrity speculators like Harshads and Ketans.

More. Now global experts are comparing and contrasting India and China. Many see that it is a matter of time that India leaps ahead of China. India has risked far less to grow, while China has risked enormously for its growth. The risks that they took are making their calls on China now. Just a couple of years back, the very experts who wrote off India in comparison to China âÂ´because we were not liberalising fast enoughâ -- have U-turned to say, Â´see how we are growing, and moving ahead of themâ!

Finally. The rest of the world, including Japan and China, is lending money to the US and getting it to buy their goods, that is, they chase the US consumption for their growth. If the US consumption declines, the rest of the world will go for a six. But not India. Why and how? For, India has seen and overcome US sanctions. India is growing largely on its own savings, mostly on its own investment, mainly on its own consumption and primarily on its own efforts. The lesson: the external can only be the additive, not the core. 

The core has to be, and can only be, Indian. That is, as Suresh Krishna said, when no one else would dare say, Â´India shall be built by usâ. Not by the US. That is, India is on the rise. And steadily.

{Authorâs email: comment@gurumurthy.net }

12-14-2005, 02:33 AM

India And China: Not Just Cheap

QUOTEBy Roger L. Martin
Tue Dec 13, 8:13 AM ET

There's a romantic notion in North American business that our future lies in design and innovation, while India and China will serve as the home of low-cost operations. It's a nifty twist on David Ricardo's seminal early-19th-century theory of "comparative advantage," which explained why cloudy and cool England exported woollen goods to sunny and hot Spain, which in turn exported wine to England.

In the modern example, we get to have highly paid professionals designing innovative enhancements to products and services, while India and China have lower-skilled and much lower-paid workers churning out the products and services we design.

No Galley Slaves.

The problem is that the scenario disintegrates as I ride through the streets of Hyderabad, fresh from a visit with Ramalinga Raju, Satyam Computer Services' (SAY) founder and chairman. Satyam ranks as the 20th-largest company in India by market cap and is a major global player in the info-tech services game.

My Hyderabad visit is wedged between a stop in Mumbai to visit with ICICI Bank (10th in market cap) CEO K.V. Kamath and co-managing director Lalita Gupte, and Tata Consultancy Services (5th in market cap) CEO S. Ramadorai. I also visited Bangalore to talk with Infosys Technologies (4th in market cap) CEO Nandan Nilekani.

The employees at these globally oriented businesses are not, by any stretch of the imagination, huddled over their workstations, entrusting all creativity, design, and innovation to their "First World" competitors.

Training Blitzkrieg.
At Tata Consultancy Services' gorgeous Mumbai campus [think Citibank on a 23-acre chunk of Central Park], I learned about its central goal of providing customers with a user experience that delights and surprises. To accomplish this goal, Tata sends its technically educated professionals to the TCS Management Training Centre to gain a thorough understanding of how to craft the customer environment, prototype new solutions, and manage change.

At any given time on Satyam's 120-acre campus on the outskirts of Hyderabad, 1,000 staff members are engaging in intensive training. Plenty of the training is eye-glazing info-tech stuff -- "J2EE Development Using JBOSS" or "Oracle Database 10g Administration."

But Satyam also features a sequence on "Finding a Better Way," which includes "Creative Thinking, Problem Solving & Decision Making" and "Managing for Creativity and Innovation" -- hardly low-end stuff.

Passion And Action.
CEO Raju talks eloquently and persuasively about the evolution of services, the disaggregation of the modern global corporation, and the preparations Satyam is undergoing to position itself for this shift. Developing talent and setting it free represents a critical piece of the puzzle. "A high degree of operational freedom helps associates exercise their creativity and expertise in approaching tasks and achieving customer delight," he says.

ICICI Bank views market share the way the former Soviet Union viewed geography: What's mine is mine, and what's yours is up for grabs. The bank is obsessed with talent -- the talent necessary to dominate banking internationally and in India, its primary market. (By the way, it is now India'a largest Bank by Capitalization)

In talent, what does ICICI look for? In order of priority, it wants passion, perseverance, and bias for action -- not willingness to perform routine tasks in front of a terminal.

Where Ricardo Errs.
I'm guessing I'll hear the same story upon arriving at Infosys. India's leading companies haven't just read the design and innovation manual but also embraced and internalized it. Each is dedicated to finding, developing, and empowering creative talent. Each believes that deep user understanding is the fuel that powers creativity and innovation. Each has a CEO with a bold approach to transforming the future. Each prototypes and refines new services until users are delighted -- and then starts all over again.

Indian companies have staggering cost advantages over their international competitors, but that doesn't mean they can't also compete at design and innovation. Their North American competitors just wish that were the case. The Ricardian logic emphatically fails to apply.

Ricardo based his theory on natural endowments. Spain exported wine to England because it had sun and England didn't -- and that wasn't going to change soon. England had a great climate to raise sheep -- and that wasn't going to change soon either.

Japan'S Trailblazing.
This hardly marks the first time Ricardian logic has been wrongly applied. In the 1960s and 1970s, common logic held that Japanese manufacturers had a "comparative advantage" in small, inexpensive cars as did the U.S.'s Big Three in large, powerful, and fancy cars.

By the 1990s it had grown clear that any comparative advantages Detroit had imagined was fleeting. Japan Inc. was exporting small and inexpensive cars, midsize and midprice cars, large cars, luxury cars, sports cars, SUVs, and pickup trucks. Japan still had its cost advantages, but it had also built advantages in quality and reliability.

More recently, a thoroughly modern industry made the same mistake. The electronics manufacturing services industry (EMS) took shape in the mid-1990s, outsourcing manufacturing of computer equipment for the major manufacturers, including IBM, HP, Dell, Sun, Lucent, and Nortel. EMS providers such as Solectron , Flextronics, SCI/Sanmina, Celestica, and Jabil made electronic equipment designed completely by the manufacturers, and initially they grew spectacularly.

Left In The Dust.
However, the industry ignored a group of Taiwanese companies that came to be called original design manufacturers [ODM] -- electronics companies that mostly designed and manufactured low-end PCs for "no-name" PC vendors. The EMS leaders viewed the Taiwanese ODMs -- Asustek Computer, BenQ, Compal Electronics, Hon Hai Precision Industry, Quant Computer, HTC, and others -- as unskilled, low-cost players.
The EMS players couldn't imagine that the ODMs could both charge less and have the ability to design -- rather than just copy -- sophisticated computer equipment.

EMS opinions notwithstanding, the ODMs actually employed more engineers, had more patents, and invested in more R&D than all of the EMS players. In the past several years, the ODMs have eaten their precursors lunch by dominating ever-more-sophisticated segments of the industry. Far too late, Flextronics realized that design matters and bought the industry icon Frog Design.

Capabilities Catch Up.
Assuming that capabilities are static and advantages are permanent adds up to a big mistake, as the Big Three auto makers and EMS leaders found out the hard way. Natural endowments of climate, location, and mineral resources may prove enduring, but company-generated capabilities remain quite fluid.
Equally, no one should assume that seemingly conflicting capabilities -- in this case low cost vs. design and innovation -- cannot coexist. Within industries and across them, certain capabilities grow ubiquitous, because they become too important to successful competition for any business to neglect to develop.

Initial quality turned into such a capability in the auto industry: You can't sell cars without JD Power & Associates certifying to prospective buyers that initial quality is reasonably high. Even Mercedes-Benz (NYSE Big Grin

CX - News) -- hurt badly by lagging JD Power initial-quality scores -- now understands that its powerful brand name doesn't exempt it from the need to produce high and consistent initial quality.

Universal Goal.
How can you tell whether your business will remain the only one to build a particular capability and thereby automatically have an advantage? The general rule: If the opposite of the capability in question sounds stupid, then your competitors are already, or soon will be, pursuing the same capability.
For example, the opposite of choosing to be "customer-oriented" is to elect to ignore your customers -- the latter being silly. The opposite of pursuing high-quality products or services is to pursue low quality. It, too, is daft.

For North American companies competing against Indian ones, what does this mean for design and innovation? Since lackluster design and staid conformity are fairly bad ideas, one can safely assume that attention to compelling design and potent innovation is going to be universally sought.

"Quick And Decisive Loss."
Consequently, North American companies err if they assume they'll win because their Indian competitors will pay no attention to design and innovation. If the leading Indian companies' design and innovation intentions haven't already manifested themselves, they soon will. 
That means North American companies need not only commit to design and innovation but also recognize design and innovation as one of the key fields upon which they'll fight the competition. They must put resources behind it.

Too many large North American companies have cultures that promote lackluster design and conformity. That must change -- or they're going to lose on both cost-effectiveness and innovation. It will prove a quick and decisive loss, not unlike the trouncing of the EMS providers by the Taiwanese ODMs.

In the end, design is all about refusing to accept apparent trade-offs and instead innovating around them to produce creative resolutions. If North American companies genuinely want to embrace design and innovation to ward off Indian and Chinese competitors, they had better start by rejecting the notion of an apparent trade-off between low cost on one hand and design and innovation on the other. 
They need to think "and" -- not "or" -- and get to work designing.

02-12-2006, 01:52 AM

QUOTEWorld 'lukewarm to India's role'Â 

India's global role has grown significantly

India fails to evoke any strong feelings from other countries in the world, a new poll for the BBC suggests.

The survey for the BBC World Service asked how 39,435 people in 33 nations across the globe saw various countries.

On an average, 41% of the people polled did not say whether India had a positive or negative influence.

The poll found Iran having a negative influence in the world, while Japan is most widely seen to have a positive influence.

Interestingly, Indians themselves are the most tepid or modest in their self-estimates

The survey by the international polling firm GlobeScan and the University of Maryland took place between October 2005 and January 2006.

Mixed response

The results on India's influence in the world are mixed, with most deciding not to answer one way or another.

On average, 35% of the people polled said India had a positive influence, while 24% believed it has a negative influence.

"Many more countries (22) countries gave it [India] a net positive rating (6), but nearly all of these are plurality positions (20 positive, 5 negative)," the poll said.

Two countries, Iran and Afghanistan, overwhelmingly voted to say India had a positive influence in the world.

In Iran, 71% had a positive view of India. In Afghanistan, 59% believed the same.

The only country with widespread negative view about India's influence is the Philippines with 57% voting "mainly negative".Â <img src='style_emoticons/<#EMO_DIR#>/blink.gif' border='0' style='vertical-align:middle' alt='blink.gif' />

Interestingly, Sri Lanka is upbeat about its big neighbour - 49% had a positive view, while only 4% were negative.

India's nuclear-armed neighbour Pakistan was not in the list of countries polled.Â <!--emo& Big Grin

--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' />Â <!--emo& Big Grin

--><img src='style_emoticons/<#EMO_DIR#>/biggrin.gif' border='0' style='vertical-align:middle' alt='biggrin.gif' />

The poll found European countries divided about India.

Great Britain and Russia turned up most positive with over 47% having a positive view of India in the two countries.

France and Finland viewed India most negatively - both being 44% negative and 27% positive.

Nearly half of Indians have a favourable view of their country

The US leans slightly positive towards India - 39% had a positive view, while 35% thought negatively.

The poll found that Indians themselves were the "most tepid or modest in their self-estimates".

While in most countries a large majority give their country a positive rating, the picture is different in India .

Only 47% of Indians had a positive view of their country. Only 10% had a negative view.

A total of 1452 people above 18 years of age were polled in India.

The margin of error in polling ranged from 2.5% to 4%.Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â

http://www.newindpress.com/Newsitems.asp?I...tories&Topic=0&

02-12-2006, 01:56 AM

QUOTEIndiaÂ to beat China in 10 years: BBC survey
Financial Express, Posted online: Friday, February 10, 2006 at 0000 hours IST

NEW DELHI , FEB 9:Â A BBC World survey in association with AC Nielson on global indians reveals that India will overtake China in terms of economy growth in the next 10 years. While 57% respondents feel India will become the next Asian superpower in the next 10 years, 55% believe India can win a bid to host the Olympics during the same period and 60% believe that the poor in India will benefit from future economic growth.

The survey targeted a universe of eight million people and the results uncovered four global Indian sub-groups. The most influential sub-group is the Globizen â individuals with both strong international attitudes and behaviours.

The survey has made an attempt to put the global Indian under the lens to look at their media consumption, product and brand ownership, cultural uniqueness, international interests and what they believe are the biggest global issues. The results showed that 35% of Globizens live in Mumbai, 20% in Hyderabad, 16% in New Delhi, 9 in Chennai and 8% each in Kolkata and Bangalore.

Commenting on the new survey, BBC World head of research and planning Jeremy Nye said, " India is today the world's most vibrant debating chamber. It has the most exciting and open news media, with a growing passion for international news. We believe that these unique characteristics make Global Indians of value not only to those in India, who are living through the change, but also to international decision-makers looking to understand it."

Globizens acknowledge that economic progress is their key goal for India to develop into a superpower, and rank education, population control and information technology as the most important contributing factors.

Interestingly, the Globizens also believe that India's hard-working people are its most important assets, followed by natural resources and a vast base of intelligent people.

http://www.financialexpress.com/fe_full_st...ntent_id=117136

03-11-2006, 04:51 AM

Please watch this video..

http://abcnews.go.com/Video/playerIndex?id=1674437

If my dad would have been alive he would have sung -> ek bagh nahin ek khet nahin hum saree duniyaa mangenge.. <img src='style_emoticons/<#EMO_DIR#>/flex.gif' border='0' style='vertical-align:middle' alt='flex.gif' /> <img src='style_emoticons/<#EMO_DIR#>/flex.gif' border='0' style='vertical-align:middle' alt='flex.gif' /> <img src='style_emoticons/<#EMO_DIR#>/rock.gif' border='0' style='vertical-align:middle' alt='rock.gif' />

03-12-2006, 01:07 AM

<img src='style_emoticons/<#EMO_DIR#>/b_cowboy.gif' border='0' style='vertical-align:middle' alt='b_cowboy.gif' /> Of late, India has been in many challenging situations e.g. get the nuclear deal with US and discuss the nuclear deal of Iran. India has come unscathed, thanks to pragmatic approach of Manmohan Singh. In fact, we have to learn a lot in this regard from USA which maintains equally cordial relations with Pakistan and India. India has also started to live with it.

05-08-2006, 02:38 AM

India's GDP to double, if 10% growth is maintained: ADBQUOTEHYDERABAD: Enthused by India's success story, ADB President Haruhiko Kuroda on Saturday said the country "is on the verge of accelerating the growth" and could double its GDP in just seven years if a 10 per cent growth rate is maintained.Â

"I am very hopeful that India can reach the developed economy status at some stage as the country's economy is accelerating, leading to reduction of poverty," Kuroda told reporters after the conclusion of the 39th annual general meeting of the Asian Development Bank here.

Pointing out that Indian economy had been growing at 8 per cent during the last three years, he said further acceleration was possible if steps were taken to improve infrastructure and continue reforms.

âIndia's GDP will double in 10 years if there is a seven per cent growth rate. This could be achieved in seven years if there is a 10 per cent growth rate," the ADB Chief said
..................

06-10-2006, 03:51 AM

QUOTE
President APJ Abdul Kalam's address at the Innovation and Leadership Forum, Bangalore, 06-06-2006

World Knowledge Platform Â
Â

I am indeed delighted to participate in the Innovation and Leadership Forum organized by the IBM Corporation. I greet all the business leaders, academicians, financial analysts, young scientists and engineers, investors and members of IBM community.

Visionary Leaders make the nation great

IBM Founder: The phenomenal growth of IBM has arisen due to the motivational and visionary slogan "THINK", of the founder of IBM, Thomas J Watson. This slogan reminds me of my call to the children "Thinking provides knowledge, Knowledge makes you great". During the 20th century, computer industry has undergone very rapid change and the prediction for 21st century is: the performance of the computers may challenge the human mind. When I read the book on "The Maverick and his Machine - Thomas Watson Sr. and the making of IBM", I realize how one man's vision has led the organization to became a global giant in computer science and technology. In reality, I am seeing in front of me, how the vision "THINK" of Watson has crossed the Atlantic Ocean and become global and borderless. Today I am witnessing here the impact of IBM in India and Indian youth which is a beautiful tribute to the founder of IBM. From the tabulating machine business in the early part of 20th century, IBM Corporation today has become a $91 billion information technology company with teams of about 3.5 lakh knowledge workers in 75 countries around the world, serving over 174 clients speaking more than 165 languages.

Indian Space Visionary: Now I would like to share with you, India's great visionary in space science and space technologies Prof. Vikram Sarabhai, who was my Guru. Very rarely, in the life journey, great human beings influence one's life. I was fortunate to work with Prof. Vikram Sarabhai for seven years. While working closely with him, I saw the dawn of the vision for the space programme in a one page statement. Witnessing the evolution of this one page by many years of ceaseless work by a cosmic ray physicist, a great scientific mind was really a great learning for me. Also I was thrilled to see the famous vision statement of Prof Vikram Sarabhai made in the year 1970 which states "India with her mighty scientific knowledge and power house of young, should build her own huge rocket systems (satellite launch vehicles) and also build her own communication, remote sensing and meteorological spacecraft and launch from her own soil to enrich the Indian life in satellite communication, remote sensing and meteorology." When I look at this vision statement now, I am overwhelmed to see the results of this statement. Today, India can build any type of satellite launch vehicle, any type of spacecraft and launch from Indian soil and also it has all the capability with its mighty facilities and powerful human resource. The ICT has made tremendous contribution towards the high performance onboard computers and advanced embedded software systems in the Indian launch vehicles and spacecraft programmes. Through space technology and space science, India can be a partner in the world space programme to enrich the planet earth and further exploration.

These visionary leaders have created great organizations and enriched the nations' economic prosperity. Now let me discuss what our future technological challenges are.

Can computer challenge the Brain?

Most of the computers of the future and accessories will be micro sized, wearable and will have wireless communication with each other. Moderately priced PCs capable of performing about a billion calculations per second today will be able to perform about a trillion calculations per second within next 10 years. It is predicted that by 2019, the computational ability of an ordinary PC would exceed the capability of human brain. By 2029, the capability of a normal PC would be around 1000 times that of the human brain. (Reference: The age of spiritual Machines by Ray Kurzweil)

My view is definitely the creativity of the human mind will always be superior to the most powerful computers in the horizon. Creativity has to be the business of IBM and other knowledge organizations.

By the end of this century, there would be a strong trend towards convergence of human thinking with the world of machine intelligence that the human species initially created. When there would no longer be any clear distinction between human and computers, how would the molecular biologists help us to retain the supremacy of man over machine? Computers are going to give us a challenge. It is not only for the ICT and biotechnologists; the entire scientific community would have greater responsibility of keeping the mankind above the man-made computers, human creativity being the prime mover. Corporations like IBM have to perform and grow in this dynamic and competitive environment.

Borderless world

I would like to share with you my recent experience which took place on 31 May 2006. I addressed the US-India summit on Education, Research and Technology organized by University of California, Santiago and Callit2. It is a unique Multimedia Tele-Conference between India and USA through a high bandwidth network. The High Definition systems has been used at both ends and using the Virtual tele-education platform from Rashtrapati Bhavan Multimedia Studio. An integrated action by a number of public and private organizations both from India and USA worked together to establish the hassle free high bandwidth connectivity between Rashtrapati Bhavan and UCSD. Through this high bandwidth connectivity, the US audience felt my virtual presence in their hall through a high definition projection system in big screen for the whole duration of my lecture and interactive question answer session for around 90 minutes. I felt that the audience was really with me, even though it is virtual and 12,000 km away. During the lecture, I could refer my website, digital library, whiteboard along with my power point presentation on line through the Virtual Tele-ED platform. This experience made me realize the power of technology as an integrator of minds leading to a borderless world without geographical barriers ? a symbol of universalisation. This power of networking can definitely be used by IBM and other knowledge enterprises in India to work for a common goal which leads to economic prosperity.

Creativity

In a knowledge society, we have to make innovations continuously. Innovations come through creativity. Creativity comes from beautiful minds. It can be anywhere and any part of the world. It may start from a fisherman hamlet or a farmer's household or a dairy farm or cattle breeding center or it emanates from class rooms or labs or industries or R&D centers. Creativity has got multi dimensions like inventions, discoveries and innovations. Creative mind has the ability to imagine or invent something new by combining, changing or reapplying existing ideas. Creative person has an attitude to accept change and newness, a willingness to play with ideas and possibilities, a flexibility of outlook, the habit of enjoying the good, while looking for ways to improve it. Creativity is a process through which, we can continuously improve ideas and find unique solutions by making gradual alterations and refinements to our works. The important aspect of creativity is: seeing the same thing as everybody else, but thinking of something different.

Think of a non-linear product jointly

IBM is traditionally driven by Watson's vision of "thinking" as a launch pad. I was thinking what can be launched from IBM's launch pad, particularly from India. Can IBM and an Indian enterprises and academic institutions with their combined core competence launch a system or a product that will be new to the world as Watson's "THINK" slogan made a great change to the world of computers' Can India and IBM think together for design, develop, produce and market nano computers with 10 terabytes/inch2 in 8 nano meters size chip Is it possible? I am sure you may have many experiences. Let me share with you a unique experience of developing a complex system through a joint venture using the core competence of two nations, which may be useful for the people who are assembled here and also who are witnessing the programme in different parts of the world. The technological cooperation of the two countries, the managerial cooperation of the two nations and the investment of around two hundred million dollars by each nation has enabled the realization of Supersonic Cruise missile called BrahMos within 5 years. This is the only supersonic cruise missile in the world today. Let me discuss about the joint venture experience between India and Russia.

Supersonic Cruise Missile

One of the significant technological breakthroughs of 2005 is the design, development and productionization of Supersonic Cruise Missile-BRAHMOS by an Indo-Russian joint venture. BrahMos is the first supersonic operational cruise missile in the world which can be launched from multiple platforms such as ships, submarines, road mobile and silo, and with modifications from aircraft. This is indeed the result of technological co-operation leading to operational system. The supersonic speed is achieved by a liquid ramjet engine and the guidance is through powerful software embedded in the on-board avionics integrated with high performance sensors. The fast response Inertial guidance system with software injected sensors and agile homing head enables the missile to achieve variety of trajectories flying at speed Mach 2.8 and destroy the target with high accuracy.

The flight trajectories are simulated through a modular, digital and fully automated Fire Control System which has advanced software for way point maneuvering, with supersonic speed to provide high operational capabilities. This technological innovation is the trend setter in the cruise missile field. The robust design of the missile, elaborate ground tests and simulation has ensured 100 percent success rate in all the flight tests conducted for the Armed Forces by the joint venture company. In successful design, development, production and marketing of BRAHMOS missile, an innovative way of technology co-operation has emerged between India and other countries for multi-billion dollar business. Based on this experience, I am suggesting the creation of a World Knowledge Platform for realization of world class products for commercial applications using the core competencies of partner countries which will meet the needs of many nations. I am seeing in front of me, an IBM Indian environment, I would like to discuss with you friends, how to evolve commercially competitive, world class products or systems that can come out of certain unique core competence of IBM Corporation and Indian knowledge industries. This is indeed a great challenge, something bigger than BrahMos for commercial world. How to achieve it? I am putting forth certain thoughts.

World Knowledge Platform

During my recent visit to Singapore, Philippines and Republic of Korea, I put forward the concept of "World Knowledge Platform", which will integrate the core competencies of the partner countries to develop knowledge products. I have also proposed this concept in my address to the US-India Summit, organized by University of California, Santiago on 31 May 2006. This world knowledge platform will enable joint design, development, cost effective production and marketing of the knowledge products in various domains.

Global Knowledge Connectivity: Initially, the mission of World Knowledge Platform is to connect and network the R&D Institutions, Universities and Industries using fiber broadband from the partner nations on selected R&D missions. The underground fiber cable infrastructure already exists among many partners. This global knowledge connectivity will support multitude of seamless connections supporting both synchronous and asynchronous communication, carrying either text or audio and video in a multimedia environment. We can then use this network in the academic environments to teach courses online and share expensive equipments remotely. In the Industrial environment, it can be used to design complex systems ? even ones that are as complex as an aircraft in a collaborative way using virtual prototyping concepts in the cyber space. I realize, the impact of ICT and the power of networks in every domain of our life. For the development of any system or products the power of connectivity and collaborative effort is the key, which is the basic foundation for the World Knowledge Platform.

Missions of World Knowledge Platform: The convergence of Bio, Nano and ICT is expected to touch every area of concern to the humanity. The "World Knowledge Platform" will take up missions, in some of the areas given below, which are of utmost urgency to all of us to make our world a safe, sustainable and peaceful and prosperous place to live:

1. Energy: exploration, storage, production and conversion

2. Water: treatment and desalination

3. Healthcare: Diagnosis and drug delivery system

4. Food: preservation, storage and distribution

5. Knowledge products :Hardware, Software and Networking Products

6. Automobile: Hardware and embedded software integration

7. Gene characterization, stem cell research and molecule to drug development towards the diagnosis and treatment

8. Herbal and natural products complementary to modern medicine

9. Space based systems

In addition to the areas mentioned above, electronics, ICT and automobile sectors may also be focused especially in the areas of design, development leading to productionization for meeting the market demands of the respective countries and also for world market using the core competence of partner countries. The world knowledge platform will also evolve a virtual design center with the participation of collaborating countries.

For example, to start with the following specific missions can be undertaken by World Knowledge Platform.

(a) Tablet PC

Joint design, development and manufacture of a handheld tablet Personal Computer (PC) with multilingual capability in a cost effective manner with open source operating system and software configured for the school students and the common world citizens. The students should be able to use this as a digital book, notebook and as an e-learning device, which will reduce their carrying load and will be useful for their whole educational duration. The one time investment must make the students life easy that will give them enough time to be creative in their studies. This tablet PC will have the wireless connectivity so that it can take care of the communication needs and possibly the telephone and will have sufficient video capability to act as an entertainment platform and for tele-education and telemedicine and even a hand writing recognizer that will also permit authentication for secure e-business transactions. The challenging task will be to configure, develop and produce and market the tablet PC at a cost of $150, so that students, teachers and researchers of many nations can use it. IBM can think of possible collaborations or consortium with Indian industries for the development of integrated hardware, software integrated system that will be useful to the 300 Million Indian students alone apart from the other common users, professionals and executives of multiple countries.

(b) Embedded electronic Systems

Design and development of embedded systems integrated with hardware will have tremendous application in automobile sector, railways, consumer electronics, aerospace systems, defence systems and precision manufacturing. For example, automation of railway signaling system with wireless relays which will ensure fool-proof signaling and prevent accidents. Design and development of Wi-Max standard switches, routers and access points will have a big market for last mile connectivity in many countries at an affordable cost. The concept of ?World Knowledge Platform? can be utilized by ICT companies functioning in the Information and Communication Technology sector for collaborative research, development, production and marketing of products and systems using consortium approach.

Our National Mission - Challenges

For transforming India into a developed nation and bring prosperity to all the one billion plus people, we have identified five areas where India has core competencies for integrated action: (1) Agriculture and food processing (2) Education and Healthcare (3) Information and Communication Technology (4) Infrastructure for all parts of the country such as reliable and quality electric power and surface and air transport and (5) Self-reliance in Strategic sectors. These five areas are closely inter-related and when effectively addressed, would lead to food, economic, energy and national security and lead to sustainable prosperity.

Technology based Societal Grid

70% of the one billion population of India live in six hundred thousand villages. To provide quality life style for the people living in the villages, we have evolved a rural development concept called PURA (Providing Urban Amenities in Rural Areas). This involves development of physical

connectivity, electronic connectivity and knowledge connectivity to the rural clusters of 20 to 30 villages with a population of around 20,000 to 50,000 people leading to economic connectivity. The country will have around 7000 PURAs. Development of technologies and their convergence have significant influence on the society in terms of providing knowledge, health care, governance and economic development established through connectivities among them. These connectivities will certainly bring seamless access and information flow among the various domains leading to maximization of GDP and productivity; hence, there is a need for establishing the GRIDs namely Knowledge grid, healthcare grid, e-governance grid and the PURA (Providing Urban Amenities in Rural Areas) grid. This interconnecting grid will be known as societal grid. Knowledge sharing, knowledge utilization and knowledge re-use are very vital by all constituents of the society for promoting non-linear growth. Details of Societal Grid are:

1. Knowledge GRID - Inter connecting universities with socio-economic institutions, industries and R&D organizations.

2. Health Care GRID - Inter-connecting the Health Care institutions of Government, Corporate and Super specialty hospitals, research institutions, educational institutions and ultimately, Pharma R & D institutions.

3. e-Governance GRID - Inter-connecting the Central Government and State Governments and District and Block level offices for G2G (Government to Government) and G2C (Government to Citizen) connectivity.

4. PURA GRID - Connecting the PURA Nodal centers with the village knowledge centers and domain service providers.

We have, so far discussed all the four connectivities required for the societal transformation of the nation. These GRIDS will help the World Knowledge Platform to enable reaching the resultant knowledge to the people directly.

Conclusion

Let us think together, what are the types of enriched partnerships possible between IBM Corporation and Indian knowledge product industry. Three distinct areas can be identified. They are, (i) Transforming India into knowledge society with innovation as the thrust area influencing the information society, industrial society and agricultural society. (ii) As you are aware India has 540 million youth below 25 years which is an important asset for the planet Earth. This dynamic resource will have two components. One, at the secondary education level supplemented with high quality vocational skills and the other at the university level. Knowledge workers will come out of this Global Human Resource Cadre. Definitely, IBM Corporation can participate in the evolution of trained human cadre. (iii) Participation in the "World Knowledge Platform" will empower the IBM Corporation (India) and the partner institutions with the collective core competence as a base.

For success in all these missions, which we have discussed so far, we need creative leaders. Creative leadership means "exercising the vision to change the traditional role from the commander to the coach, manager to mentor, from director to delegator and from one who demands respect to one who facilitates self-respect". I am sure creative leadership will spearhead all the institutions and the future aspiring institutions. For promoting growth of organization, the important thrust will be on the growth in the number of creative leaders and innovative personnel who can create wealth through dedicated management system.

Such leaders in organizations will facilitate global competitiveness and help in creation of knowledge societies in the Planet. Particularly the mission of creative leaders will be the evolution of enlightened societies through the "World Knowledge Platform".

Wish you all the best. May God Bless you.

Question and Answer Session

1. Mr. President, leadership is an important enabler for growth. What would be the key leadership qualities for future leaders in an emerging economy like India?

- Krishnamurthy Deepa N, Global Business Services

Ans: Vision, balanced view, "we can do it" spirit and indomitable spirit are the key leadership qualities for our future leaders in the emerging economy

2. Mr. President, what is the most memorable event in your life?

- Ms. Suchitra Srinath, IBM Sales and Distribution

Ans: Removal of pain of a young girl affected by the polio and her ability to ride a bicycle after using the light weight Floor Reaction Orthosis made by using carbon-carbon material was the most memorable event in my life.

3. Sir, I would like to have your personal view - what do you think makes India special?

- Ms. Shoba Krishnan, Manager HR Strategy, IBM India Ltd.

Ans:India, as the largest democracy in the world has a reputation for its democracy and for providing leadership for the one billion people with multi-cultural, multi-language and multi-religious backgrounds. This makes India special.

4. Sir, it is reported by many commentators that India needs to improve its basic infrastructure to ensure its continuing high growth. What role do you see for technology in improving the infrastructure across India?

- Ms. Padma Dhayanand, IBM Sales and Distribution

Ans: Technology has a great role to play in fast improving of infrastructure. Pre-fabricated construction of fly-overs for fast erection, commissioning of metro systems, use of green building material, providing quality power through renewable energy sources, pollution free transportation system are all technology dependent infrastructure missions.

5. Mr. President, thank you for gracing us with your presence today. What is the role of technology in rural transformation?

- Shri Praveen Cherian, Country Manager, Global Technology Services

Ans: Technology has to play a great role in improving the quality of the life of rural people. Technology can enable quality education and health care to reach them. Technology can also provide value addition to their products and enable them to realize remunerative prices for their produce. Technology can enhance the employment opportunities in the rural sector.

6. Mr. President, there is an important role that companies like IBM can play at the intersection of business, technology and society. What would be the key areas of focus?

- Shri Vivek S Rawat, Software Sales Manager

Ans: Technology enhances the ability to face competition in business. Success in business promotes prosperity of the enterprise. Societal missions enable the business to share their prosperity with the society. Here again technology assists in execution of societal missions.

7. Sir, As you have always articulated great vision for India, what would be the top three focus areas in next 10 years for India?

- Shri Joe Joseph, Territory Services Leader

Ans: Development of human capital, energy independence and implementation of 7000 PURAs are the top three focus areas for the country.

http://presidentofindia.nic.in/scripts/s...jsp?id=771

06-23-2006, 03:27 AM

QUOTEhttp://select.nytimes.com/2006/06/21/opinion/21friedman.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fThomas%20L%20Friedman
THE NEW YORK TIMES
Latin Americaâs Choice 
Are Latin Americans going to emulate India or get addicted to China? 
By THOMAS L. FRIEDMAN, June 21, 2006
There are a lot of ways to describe Latin Americaâs challenge today. Some will tell you itâs the age-old question of overcoming the staggering gap here between rich and poor. Some will tell you itâs rooting out corruption and misgovernance. But I come at this issue with my own perspective, and I would describe the big question facing Latin Americans this way: Are they going to emulate India or get addicted to China?

This question was, at least implicitly, a subtext of the recent election here in Peru. But itâs true throughout this continent, which has always been better at mining its resources than mining its people.

Let me explain by introducing Gabriel Rozman â a Jewish technologist of Hungarian roots who was raised in Uruguay, educated in America and now heads the Latin American operations of Indiaâs biggest software/outsourcing company, Tata Consultancy Services of Mumbai.

Mr. Rozman runs Tataâs Latin American business out of Montevideo, where 550 Uruguayan programmers, trained and directed by Indians, are writing code and running the computer systems for companies all across this continent. They are backed up by Tata engineers in India, Hungary, China, Brazil, Chile, Mexico and Argentina. India now thinks Latin America is its backyard, too.

And so does China. China, though, is almost exclusively focused here on extracting natural resources â timber, iron, soybeans, minerals, gas, fish meal â to feed its voracious appetite and keep jobs and factories humming in China. There is nothing wrong about that. America and Spain did the same for years â and often rapaciously. Today, Chinaâs appetite is helping to fuel a worldwide boom in commodity prices that is enabling a poor, low-industrialized country like Peru to grow at 5 percent. 

But countries that get addicted to selling their natural resources rarely develop their human resources and the educational institutions and innovative companies that go with that. So after the ore has been mined, the trees cut and the oil pumped, their people are actually even more behind.

"Why canât Latin America do what India is doing?" Mr. Rozman asked when I spoke with him in Washington last week. It can, he insists, but only if it changes â fast. "Right now I have 500 job openings I canât fill, and the problem is education. The prestige career to follow in India is engineering, and in Latin America it is [still] law or being a notary public."
"We need more computer courses with real standards and starting at an early age," he said. A lot of higher education in Latin America is modeled on the French/European system, which is better at producing philosophers than programmers. Philosophers are important, but not in bulk.

Latin America also has to do a better job of teaching English, he added, and eliminating the red tape that prevents economic integration in Latin America and makes it very cumbersome to start new businesses here.

"To go from Argentina to Montevideo is only a 20-minute flight," Mr. Rozman explained, but in terms of the economic integration demanded today by global firms, they are 10,000 miles apart. In addition, most of the legal systems in Latin America are designed to promote agriculture and light industry, not intellectual property or innovation. "All the laws were made for another type of society," he said. "If we donât get caught up with the next wave, weâre in trouble."

That next wave is called "follow the sun," he said. "We like to start a project in Bangalore or Mumbai, then, as the day moves on, move it to our offices in Eastern Europe and then to Latin American." Tata expects its engineers in each place to be equally trained, speak English and have the computing infrastructure to seamlessly receive and hand off projects. This is a global-scale business.

"We have 50,000 employees in India and are going to 100,000," explained Mr. Rozman. Eventually, Tata will grow to 100,000 in China. "But I canât go to 100,000 in any one country in Latin America, so I have to be able to put [the whole continent] together."

Latin Americans may think that their big choice is between two models of Western capitalism â a European welfare state model and a hyper-competitive U.S. model. But before they divide their pie, they need to expand it â and here their most important choice is between an India example that focuses on developing human resources and a China syndrome that focuses on selling natural resources. Since countries tend to do either one or the other, hereâs hoping that Latin America discovers India before it gets hooked on China.

01-23-2007, 08:57 AM

<!--emo&

--><img src='style_emoticons/<#EMO_DIR#>/sad.gif' border='0' style='vertical-align:middle' alt='sad.gif' /> What Bush could not do in USA; MMS may be successful in doing in India:
Govt may allow pension funds to invest in stocks
Monday, January 22, 2007
Blog this story
http://content.msn.co.in/News/National/Nat...220107_1840#top
New Delhi: Stepping up efforts at building a consensus on a new pension scheme (NPS), Prime Minister Manmohan Singh on Monday urged the state chief ministers to strive for a comprehensive social safety net focusing on old age income covering the bulk of population.

He said contributions to the new pension scheme may be invested in line with guidelines for non-government provident fund.

Non-government pension funds are allowed to invest upto five per cent of the funds in shares of companies that have an investment grade debt rating from at least two rating agencies.

The guidelines include 25 per cent investment in central government securities, 15 per cent in state government securities, 25 per cent in bonds and securities of public financial institutions and 30 per cent in any of these three categories.

Singh said the pattern permitted for non-government provident funds would fetch a superior return for NPS funds than that given by the government at present without compromising on the safety factor.

"The suggestion that is being considered is that, pending a resolution of all the issues related to Pension Fund Regulatory and Development Authority (PFRDA) Bill, these accumulated funds may be allowed to be invested in accordance with the investment pattern prescribed for non-government Provident Funds," the prime minister stated.

The move to attain parliamentary approval for setting up PFRDA to deal with a comprehensive defined contribution pension scheme for government and unorganised sector employees has been stalled due to Left opposition to the move.

Nearly Rs 1300 crore has accumulated from the deductions made from government employees who joined service since January 1, 2004.
Outlining his vision for a comprehensive social security net, he said PFRDA aims to put in place the architecture and the delivery mechanism for pension schemes.

" It is my belief that there is a lot to be gained by moving forward and allowing a multiplicity of pension products delivered by a variety of agencies to be offered to our people," he added.

"The rising pension bills at all levels of government would be increasingly difficult to finance in future, given the other demands that are there on our resources, particularly for enhancing our expenditures on essential social sectors such as health and education.

We need better management of our pension liabilities so that state finances can be managed in a healthy, sustainable way in future," the prime minister said.

Setting the tone for the meeting, Finance minister P Chidambaram said taking into account the recommendations of the committee, the Centre has proposed that the Bill may be passed with essential features like, freedom for individuals to choose their investment portfolio and management of the funds by professional bodies.

Pension reforms have assumed importance as both the Centre and state governments are facing the rising bill under this head.

The total expenditure of the Central government on pension payments to its retired employees has gone up from Rs 3,272 crore in 1990-91 to Rs 28,963 crore in 2005-06.

"Assuming a continuation of the trend, projections indicate that pension expenditure of the Centre could reach Rs 35,020 crore by 2009-10. For the States, the projected figure as high as Rs 65,081 crore," he added.

01-24-2007, 10:20 PM

The Times of India quoting Goldman Sachs states that productivity growth will help India sustain over 8 % growth until 2020 and become the second largest economy in the world, ahead of the United States by 2050.

01-31-2007, 12:01 PM

[
India's Tata wins race for Corus
A giant Indian corporation has won the battle to take over the Anglo-Dutch steelmaker Corus.
Tata Steel's bid for the steelmaker - which was created from the merger of British Steel and Hoogovens - beat that of its Brazilian rival CSN.

Britain's Takeover Panel said Tata had won after offering 608p per share, valuing Corus at Â£5.75bn ($11.3bn).

Corus employs 47,300 people worldwide, including 24,000 in the UK at plants at Port Talbot, Scunthorpe and Rotherham.

Tata, which is based in Mumbai (Bombay), previously said its takeover would not lead to job losses in the first phase.

The takeover will create the world's fifth-largest steel group.

'Big player'

Tata Steel director J J Irani said the acquisition of Corus would help "improve our negotiating power in the global steel market."

It is a two-way street now. Not only India is seeking foreign investment, but Indian companies are emerging investors in other countries
Kamal Nath
India's Commerce Minister

He told India's NDTV television: "From a small player, we will now become a big player in the world market."

Yet shares in Tata Steel fell 6% in morning trading in Mumbai, as investors worried about the deal's short term financial impact on the Indian firm.

India's Commerce and Industry Minister Kamal Nath welcomed the deal and said: "It is a two-way street now. Not only India is seeking foreign investment, but Indian companies are emerging investors in other countries."

The two-way battle for the firm began in October when Tata tabled a Â£4.1bn bid for the group and, in December, the Corus board recommended a revised Â£4.7bn offer from Tata.

But, just hours later the board confirmed it had approved a Â£4.9bn, offer from Rio de Janeiro-based CSN.

Tata eventually outbid its Brazilian rivals.

Last year Corus was the ninth largest steel producer in the world with 18.2 million tonnes of output. It banked pre-tax profits of Â£580m on turnover of Â£10.14bn.

Tata Steel, part of the Indian conglomerate Tata Group, was last year ranked 56th in the list of steelmakers around the world with output of 5.3 million tonnes.

The Tata Group - which owns Tetley tea and Daewoo cars - has operations in more than 50 countries.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/bu...315823.stm

02-12-2007, 10:20 AM

http://www.rediff.com/money/2007/feb/12birla.htm

Birla buys US based metal major for $6 bn

<img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /> <img src='style_emoticons/<#EMO_DIR#>/stereo.gif' border='0' style='vertical-align:middle' alt='stereo.gif' />

02-12-2007, 12:16 PM

Buy and destroy.

02-13-2007, 12:52 AM

Perhaps we should create a new thread for these acquisitions.

http://www.rediff.com/money/2007/feb/12ran.htm

Ranbaxy on an acquisition spree

http://www.rediff.com/money/2007/feb/12essar.htm

Essar JV to set up $527 mn steel plant in Vietnam

03-04-2007, 01:55 AM

QUOTETime for obituaries 
Pioneer.com
Swapan Dasgupta
May be it is, as some people believe, the constellation of stars and planets. Divine intervention or plain human ineptitude, things are just not going well for the Congress. It's bad enough losing power in two States. What was worse was to the results being declared at the precise moment the party was squirming with discomfiture over the resurrection of the Quattrocchi issue - a controversy where the Government is perceived to be heeding the real inner voice.Â <!--emo& Tongue

--><img src='style_emoticons/<#EMO_DIR#>/tongue.gif' border='0' style='vertical-align:middle' alt='tongue.gif' />

The Union Budget could have been the moment of redemption, the occasion to demonstrate that the Government truly cares. Yet, it required one inappropriate sentence from the lips of the Finance Minister for the entire exercise to be mocked as a cat-and-dog Budget - a description which sounds even worse in vernaculars. Last year, soap box orators evoked a few smirks by questioning the reduction of duties on pasta; this year, even the leading pink paper was left wondering whether "pet food is what's served by Sonia Gandhi at CWC meetings."Â

Catchy slogans have a nasty habit of ricocheting. The great India Shining mantra which most observers (including this writer) thought was a certain election winner, ended up being regarded as needlessly boastful, and the BJP paid an exorbitantly high price for it. This year, the aam aadmi slogan, which paid huge dividends in 2004, has returned to haunt the UPA Government.

As the inflation graph moves steadily upwards affecting both the poor and the middle classes in varying degrees, Congress workers all over the country are being asked whether a canine-friendly Budget benefits the aam aadmi.

May be it is cruel to juxtapose one against the other-this Budget penalises both the rich and the poor. What is undeniable, however, is that the UPA Government has lost all direction. In 2004, it inherited an economy that, despite the unevenness in growth patterns, was readying to take-off. The take-off did happen in subsequent thanks to the unleashing of pent-up entrepreneurial energies. The question is: Did the Government facilitate the climb?

Like any good moderately right-of-centre formation, the erstwhile NDA Government believed that the job of the administration was to create the right macro-economic environment for growth. It concentrated on reducing taxes, lowering interest rates and inflation, dismantling controls and investing heavily in infrastructure. The rest was left to the creative impulses of the people.

The UPA didn't discard this approach entirely. However, instead of investing the burgeoning revenues in physical infrastructure, it put a disproportionate amount of taxpayers' money into sops and handouts. In principle that is electorally prudent, but there was a catch: the ability of the state to deliver welfare is questionable. Rajiv Gandhi discovered this when he admitted that only 15 paise out of every rupee reached the intended beneficiaries; the rest was frittered away in administrative overheads and leakages. Has the picture changed in two decades?

More important, why can't the Rs 18,000 crore devoted to the National Rural Employment Guarantee Scheme be used to create assets in rural communities? As things stand, it is being used to dig holes and fill them up again. To take the point further, is there any audit of the way the education cess is spent?

As a rule, people don't like their hard-earned or wisely invested money to be taken away in taxes. Yet, most are willing to stomach a measure of taxation if the Government achieves something productive at the end of the day. The UPA Government has not only raised taxes progressively and squeezed productive sectors, it has shown absolutely no inclination to avoid wasteful and unproductive expenditure. In the past three years, Government expenditure has increased dramatically without even a Golden Quadrilateral to show for it.

The Government is living beyond its means and it knows it. For three years, high growth ensured that the profligacy was papered over but the inheritance was recklessly squandered. It's time to face the music of scandalous economic mismanagement. It's also time to begin writing some political obituaries.

03-04-2007, 04:06 AM

http://www.atimes.com/atimes/China_Busin...3Cb01.html
India 1, China 0
By Chan Akya

The past week saw a significant shock to world financial markets, thanks in part to egregious mishandling of financial-market regulation by Chinese authorities.

Already reeling from the problem of falling US house prices and rising defaults among poor Americans, global financial markets took an extremely negative view of the measures introduced by China, which were ostensibly to cool down speculation in its stock markets but have only served to increase confusion for all investors. The best description I heard all week of Chinese officials came from a colleague who asked about China's stock market regulator, "Is Jessica Simpson in charge?" [1] referring to a stereotypical blonde and reportedly ditzy pop singer.

In sharp contrast, and against the expectations of pessimists such as myself, India's finance minister this week released a "steady as it goes" national budget that hopes to expand on recent economic successes. Amid recently concluded rambunctious state elections that saw the ruling Congress party losing power in two key states and reports of increased sops for various constituents, including farmers, the result proved more palatable.

To be sure, there is much to disagree about regarding the state of India's financial management, including the government's excessive reliance on borrowings to fund its expenses. Still, some reforms on tax rates and collection did make it, and the government did not expand on its ill-thought-out plans for rural assistance in this budget, nor did it unveil any price controls aimed at curbing inflation.

Chinese whispers
From many viewpoints, China appears to be two economies rather than one, incompatible entities that are finding it increasingly difficult to co-exist, much like a mismatched couple. The inside track is the elite wing filled with "Communist" Party officials, bureaucrats, business people and local and foreign bankers. On the outside track lies everyone else. The inside track is relatively efficient and often produces phenomenally well-thought-out and well-executed plans. The outside track, on the other hand, is almost always filled with corrupt, incompetent or plain amateurish officials who are tasked with implementing policies made by the inside track but not always accompanied by either clear instructions or achievable objectives.

The most egregious example of this trend was on parade in the past few weeks. In a previous article, [2] I wrote about China's plans for converting its management approach on its foreign-exchange reserve from a traditional "IMF" (International Monetary Fund) model to a robust resource-based model that better suits the country's expanding needs. This will have significant implications on global financial markets, which has been handled by Beijing quite discreetly. Indeed, a number of prominent economists and think tanks have been consulted by China in advance of its decision-making on changes to reserves management. This has provided outsiders such as the US government with good insight on proposed changes and their implications.

The contrast with the management of domestic situations could not be more stark. [3] For one thing, China's effective subsidy to its exporters by keeping its currency stable has generated billions of yuan for these companies and business people to use within the economy. Being business people, many have invested in "hot" areas such as property and stocks. Hoping to ride the bandwagon, China's middle classes joined in the mania, but funded through bank borrowings in addition to their own savings. The combination helped to push Chinese stock markets to unsustainable multiples, particularly with respect to the valuation of untested firms that simply benefited from listings.

Attempting to curb these excesses one by one produces a "whack the mole" kind of game; indeed, an intelligent approach would start at the root of the problem, namely the country's undervalued currency. Instead, regulators first tried to trim bank lending and, when banks protested about potential lost income, switched to trying scare stories. Over the past month alone, Chinese market regulators have made announcements, and then contradicted themselves, no fewer than three times with respect to the stock market. In each case, announcements that led to sharp declines in market values immediately were countermanded. Thus the impression of a blind man feeling his way through a tin shop has been created for the entire world to see.

Such shenanigans are usually associated with officials in small banana republics - for example, the senior politicians in The Gambia, who promised a cure for AIDS. That China is even mentioned in such company is bad enough, but the fact that another part of the government functions very effectively in sharp contrast provides a lesson regarding priorities.

India to the fore
Regular readers of this column are undoubtedly aware of my lack of respect for India's current Congress-led government. My main issues relate to the government's clueless pursuit of income redistribution without focusing on generation. The idea of cutting revenue expenses to focus on deficits purely for capital spending is lost on the party, which is keener on winning the next election than providing the basis for sustainable growth.

In the above context, this week's budget satisfied merely by failing to make things worse. In the convoluted logic of modern India, that actually counts as progress. Cuts in tax rates must be welcomed, as are advances in collection efficiency. It would still take a master spender to turn an economy growing at more than 8% to generate a budget deficit, and the Congress always manages that feat. The inability to expand supply has perpetuated the demand-supply gap, in turn increasing both bottlenecks in distribution and providing inflationary pressures.

Still, the good news came from elsewhere - two places, in fact. First, voters showed that they had seen through the government's fragile economic logic, which has caused inflation to rise on key products including vegetables. Their disenchantment, combined with the experience of corrupt local chieftains, has produced adverse election verdicts in two key states for the Congress.

The second piece of good news is that the corporate sector really doesn't appear constrained by the government's lack of ambition. Many industrialists are pushing the boundaries of innovation, and creating significantly more aggressive expansion plans for both the domestic and the export markets. Examples of this trend can be found in sectors as varied as textiles and electronics.

Long journey ahead for both
China's command economy is still strong, but appears increasingly incapable of managing excesses. Indeed, government officials appear increasingly desperate to provide stability ahead of planned liberalization. I am not surprised by their lack of progress [4] but note that investors are increasingly wary of the lack of transparency.

India in contrast has proved its system of internal checks and balances. While they produce increased instability in politics, they are also pushing the government to gradual irrelevance. Therein lies the good news for future generations of Indian business people.

03-04-2007, 04:07 AM

QUOTE(Capt Manmohan Kumar @ Mar 1 2007, 08:02 AM)<!--emo& Tongue

--><img src='style_emoticons/<#EMO_DIR#>/tongue.gif' border='0' style='vertical-align:middle' alt='tongue.gif' /> some reactions:
Critics have lambasted as elitist the cut in import duty on pet food from 30% to 20% - a kutta-billi budget, they say. Some liken Mr Chidambaram to Marie Antoinette - if they don't have atta, let them eat pet food. Other wags say that pet food is what is served at meetings of the Congress Working Committee by Sonia Gandhi. <!--emo& Big Grin

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03-04-2007, 11:55 AM

The Pet Food has got more prominence in this forum rather than in the national press. There are many important features in this yearâs budget which deserves to be taken note of:-

Allocation for education up by 34.2%
Allocation for health and family welfare up 21.9%
Allocation for defense increased to Rs 96,000 crore.

This is not the sign of a reckless spending as predicted by Shri Dasgupta in his article in the Pioneer. At present, it is very important to address the vulnerable section of the society particularly in the rural areas. In this sector the two most important problems are illiteracy and poor health. The higher allocation for both these sectors are a very welcome sign . However, we are all aware that simply by making available funds in the budget does not mean the schemes will get implemented well in time to have their desired effort on the target area. Let us hope that these alocations will get utalised with the required planning and efficiency that it deserves.

03-04-2007, 12:53 PM

QUOTEHowever, we are all aware that simply by making available funds in the budget does not mean the schemes will get implemented well in time to have their desired effort on the target area.
As they do in US, for college admission volunteer service does matter. In India Govt should use youth to do volunteer service in health and education in rural area. It should not be restricted to professional college course or project but prerequisite for college admission. Make it compulsory. In 80s, Govt started NFS(sp??) for Univ students, but it was not mandatory.
India should come out of Socialist mindset and every individual should be encouraged to take initiative. It is not just Government responsibility.

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