Grow Money India

How to find your creditworth online in India - You can for Rs 450

2011-11-24T18:34:00.001+05:30

For Rs 450, individuals can now get a copy of their credit history and credit score - the document which in recent years has become an important determinant of whether an individual is eligible for a loan on not.

On Wednesday, Credit Information Bureau of India (Cibil) - a central agency which collects and maintains borrower information from lenders across the country said that it will make available online the Cibil Transunion score. This score along with a record of credit history is used by lenders as a measure of creditworthiness. The score ranges between 300 and a maximum of 900. A score of 800 is considered good and often eligible for loan by most lenders.

The main advantage of obtaining the report from Cibil is that borrowers can find out in advance how good their score is. If the overall score is low the borrower can strive to improve his profile by paying all future dues on time and bringing down his overall borrowing. Also borrowers can take corrective action if there has been misrepresentation by lenders.

Obtaining the report is a three step process. Borrowers have to log onto the Cibil website www.cibil.com and fill in the online request form and make a payment through either card or online banking. The report is released after the borrower identifies himself by answering three questions based on his credit history.

According to a Cibil spokesperson factors that determine an individual's credit score include timeliness in repayments, extent of borrowing and the extent to which borrowings are unsecured. Interestingly an individual without any loans or credit cards will not have any credit history. As against this a borrower with small loans who has been repaying on time will have a good credit history.

Although Cibil has been around for several years it is only the last two years that lenders have begun to extensively use the bureau as it now has a detailed history of almost the entire borrower population in India. After the passage of the credit information bill, banks have been incorporating in their loan agreement a clause that permits them to share borrower information with the bureau.

Consumers benefit from the bureau as it emboldens lenders to make loans faster without having to independently investigate the borrowers track record. Home loan providers such as HDFC have been using Cibil to ascertain whether the borrower has defaulted in the past or whether he has multiple home loans.

Food inflation falls to 11.81% for week ended October 29

2011-11-13T19:03:00.001+05:30

Food inflation declined marginally to 11.81 per cent in the week ended October 29, but the slight moderation in the rate of price rise provided little respite to consumers burdened by high prices of essential kitchen staples like vegetables and pulses.

Food inflation, as measured by the Wholesale Price Index (WPI), stood at 12.21 per cent in the previous week ended October 22. The rate of price rise of food items stood at 12.68 per cent in the corresponding week of the previous year.

As per data released by the government on Friday, vegetables became 26.05 per cent costlier on a year-on-year basis during the week ended October 29. Pulses grew costlier by 13.27 per cent, fruits by 11.70 per cent and milk by 11.79 per cent.

Eggs, meat and fish also became 12.74 per cent more expensive on an annual basis, while cereal prices were up 4.07 per cent.

However, onions became 19.31 per cent cheaper. Wheat prices were also down 1.77 per cent year-on-year during the week under review.

Inflation in the overall primary articles category stood at 11.43 per cent, compared to 12.08 per cent in the previous week. Primary articles have over 20 per cent weight in the wholesale price index.

Inflation in non-food articles, including fibres, oilseeds and minerals, was recorded at 6.41 per cent during the week under review.

Fuel and power inflation stood at 14.50 per cent during the week ended October 29, unchanged from the previous week.

With $85 trillion, how India can become world's largest economy

2011-11-13T00:34:00.001+05:30

According to a study by US banking group Citi, India will be the world's largest economy within 39 years. Indian GDP in 2050, measured by purchasing power parity (PPP), will be $85.97 trillion. China, in second place, will have a GDP of $ 80.02 trillion and the US $ 39.07 trillion (see chart).

With an estimated population in 2050 of 1.63 billion, India will thus have a per capita income of over $53,000 - in the range of today's wealthiest countries like Switzerland and Norway. Sounds too good to be true? Of course it is.

On paper - mathematically - Indian poverty should disappear by 2050. The reason it won't is that huge inequalities in income will persist unless we rapidly implement second-generation economic reforms which deliver real benefits to the bottom of India's socio-economic pyramid.

The first chart in our three-chart collage shows the ranking of the top five countries by GDP in 2050 as per Citi's projections. Indian GDP in 2011 is estimated at $4.45 trillion (PPP). To reach $85.97 trillion in 2050, the Indian economy will have to grow at an average annual rate of 8.1% a year for the next 39 years. Optimistic? Perhaps, but not overly so.

The Citi study relies heavily on India's two dividends - demographic and democratic. The demographic dividend will ensure that India has the largest number of working-age people in the world (over 800 million) between 2015 and 2035 before tapering off as our population reaches a plateau of just over 1.60 billion and starts ageing (as China's already is). Fertility rates of increasingly educated urban and rural Indian women will dip from today's 2.6 to 1.7, which is when a country's birth and death rates equalise.

A large number of working-age Indians between 18 and 60, however, will be less than optimally productive if they remain poorly educated and are therefore unemployable. To gain from our 20-year demographic sweet spot, education reform must clearly top the government's agenda. Infosys mentor N R Narayana Murthy was partly right when he said that the standard of IIT students has fallen. It has. Too many are rote-learners, spewed out by coaching classes, not creative thinkers.

Education reform must start with government-run primary schools. Shockingly, in some villages, primary schools have no teachers, no students and an empty shed that serves as a classroom. The government spends 52,000 crore on education every year. That is less than it spends on fertiliser subsidy alone ( 55,000 crore).

The second dividend Citi banks on to project India's rise to the top of the GDP rankings in 2050 - especially in comparison with China - is democracy. China's autocratic government, the argument goes, can command 10% GDP growth, build superhighways and create gleaming infrastructure.

But beneath the towers and the maglev bullet train tracks of Shanghai lurks social tension. As China's per capita income rises, its 1.34 billion people will increasingly yearn for real freedom: a free press, an open Internet and, most crucially, democracy.

If the Chinese government can't deliver on these, a "Chinese Spring" a decade hence cannot be ruled out. That could plunge China into years of uncertainty. Throughout history, as countries grew richer, they grew freer. Will China prove an exception? Unlikely. By that token, India's democracy is a double-edge scimitar. Our raucous, open society takes us two steps forward economically and then one step backwards.

Kingfisher Airlines' Vijay Mallya questions duty to fly loss-making routes

2011-11-13T00:31:00.003+05:30

Tycoon Vijay Mallya, whose cash-strapped Kingfisher Airlines cancelled scores of flights this week, drawing the ire of the government and travellers and spooking investors, questioned on Saturday whether it was the carrier's duty to fly loss-making routes.

Shares in Kingfisher, the country's second-largest airline by market share, fell as much as 18 per cent to an all-time low on Friday as investors fretted about the viability of the carrier, which acknowledged it had been late in paying salaries in recent months.

Media reports suggest that the government had decided in principle to allow foreign airlines to own up to 24 percent of Indian carriers, a move that could throw a lifeline to Kingfisher and its struggling rivals.

The report claims that the matter would be put before the cabinet of Prime Minister Manmohan Singh in the next four weeks.

Mallya, the flamboyant liquor tycoon who owns a cricket team and a Formula One racing team, asked on the social networking site Twitter whether it was Kingfisher's duty to fly loss-making routes while it was being heavily taxed by state governments.

Or should the airline be financially prudent and fly profitably, he asked.

Late on Friday, Kingfisher said it was dropping unprofitable routes and speeding up a fleet reconfiguration, which would see its daily schedule of flights drop to 300 from 340. It recently said it was exiting the low-fare segment of the business.

The carrier, whose share price has dropped 70 percent in 2011, bringing its market capitalisation below $200 million, also said on Friday it "does not see any risk to its future or long-term viability".

Aviation Minister Vayalar Ravi said he would approach the finance minister to seek emergency bank assistance for troubled airlines.

Gold hits record high of Rs 29,265 on seasonal demand

2011-11-13T00:31:00.001+05:30

Gold prices today surged by Rs 175 to touch an all-time high of Rs 29,265 per 10 grams in the bullion market here today on rising seasonal demand amid a firming global trend.

Silver also jumped up by Rs 800 to Rs 57,850 per kg. Traders said Gold spurted on heavy buying by stockists and jewellery makers to meet the ongoing marriage season demand amid a firming overseas trend as concerns about Europe's debt crisis boosted the demand for the metal as a protection of wealth.

In New York, gold shot up by USD 6.60 to USD 1,765 an ounce.

Back home, gold of 99.9 and 99.3 per cent purity shot up by Rs 175 each to Rs 29,265 and Rs 29,125 per 10 grams, respectively. Sovereign rose by Rs 850 to Rs 23,300 per piece of eight grams.

Likewise, silver also climbed on brisk buying by industrial units.

Silver ready jumped up by Rs 800 to Rs 57,850 per kg and weekly-based delivery by Rs 825 to Rs 57,750 per kg.

Silver coins shot up by Rs 1,000 to Rs 67,000 for buying and Rs 68,000 for selling of 100 pieces.

Infosys close to acquiring Thomson Reuters unit: Report

2011-10-27T12:10:00.000+05:30

India's Infosys Technologies is close to acquiring Thomson Reuters' healthcare business for $700-$750 million, an Indian newspaper reported.

The Business Standard newspaper cited sources close to the development as saying India's No. 2 outsourcer was the front-runner for the business and an announcement was expected shortly.

Both news and information provider Thomson Reuters and Infosys declined to comment.

Thomson Reuters said in June it planned to sell the unit, which supplies healthcare data and analysis to companies, government agencies and health professionals.

The business had revenue of about $450 million in 2010. "It's public knowledge that we are selling the healthcare division but we're not making any comment on the process," a Thomson Reuters spokesman in London said.

If the deal goes through, it would be the Indian company's biggest acquisition. Infosys shares ended 2.5 percent higher on a strong day for software stocks on Thursday.

"We do not comment on market rumours or speculation," Infosys Executive Co-Chairman Kris Gopalakrishnan said on the sidelines of the World Economic Forum in the northeastern Chinese city or Dalian.

Money lying idle in savings accounts to fetch more now

2011-10-27T00:01:00.002+05:30

The money lying idle in your bank account will now fetch you more returns, with the Reserve Bank of India completely deregulating interest rates on Tuesday. The savings or the SB account, which fetched account holders a measly 4%, was the last bastion of administered pricing imposed by the banking regulator and sets the stage for competition among banks to attract more deposits by offering attractive interest rates to consumers.

The new system comes into effect immediately and would replace the existing one, which has been in place since 1978.

Within hours of the policy, private sector player, Yes Bank, increased the return on its SB accounts to 6%. Other banks with a relatively lower share of retail deposits such as IDBI Bank and Kotak Bank may follow suit in a bid to poach customers from rivals. Although the small banks lack the distribution network, they are likely to play the upstart by targeting salary accounts with the larger banks.

Banks may have 2 sets of deposit rates

Larger banks will not be able to respond selectively to Reserve Bank of India's complete deregulation of interest rates on Tuesday as the central bank has made it clear that the savings rate has to be uniform across customers. However, banks can have two set of rates - one for deposits below Rs 1 lakh and another for those with larger deposits.

"We have not set any parameters for the savings deregulation as we wanted banks to devise their own schemes and compete in the best interest of the customers and the country," said D Subbarao, governor, RBI. The governor admitted that deregulating the savings rate would help RBI in its fight against inflation as higher rates would be passed to customers who would be encouraged to save more and spend less.

Although banks with a low retail base are celebrating, the larger banks have been strongly opposed to the move. Most of the large banks had responded to RBI's discussion paper.

On deregulation by stating that the current environment of rising interest rates was an inopportune time to deregulate. "We are not in a hurry to raise savings deposit rates. We would rather see how it plays out...even today depositors have the advantage of getting higher returns through sweep accounts. Unless there are competing pressures we are not looking at raising rates now." Pratip Chaudhuri, chairman, State Bank of India, said.

Deregulation will put pressure on bank margins with average interest rates on savings account expected to go up by 50 to 100 basis points (a basis point is a hundredth of a percentage point). RBI's action has taken banks by surprise and their stocks lost considerably in a rather buoyant market. In their meeting with RBI governor D Subbarao chairmen of large banks had questioned why the deregulation was not done in a phased manner.

In reality, as pointed out by the large banks, depositors already have several options for getting a better returns on their savings. For instance, any depositor with a significant balance in a new generation bank can open a 'sweep account' which is nothing but a unitized fixed deposit account where the deposit can be broken in parts and the amount credited to the customers account whenever he needs them.

There are also liquid funds where funds can be deployed and withdrawn at will. However, there continues to be a large section of customers who are either not sophisticated enough or not active or simply too conservative to try a higher yielding option. These borrowers will be the main gainers.

Ways To Budget Your Expenses This Diwali

2011-10-18T21:04:00.000+05:30

It’s that time of the year again - the festive season has arrived and it’s time for celebration, family bonding, mouth watering sweetmeats, house organizing and decoration, new jewellery for your wife… the list is endless!
It’s at this time of the year that expenses can balloon. You will most likely find the domestic help asking for Diwali bakshish, you will be spending on gifts and mithai, you will spend probably the largest amount on home renovation, if you’re going in for it this year. All these things can add up to a happy but also expensive month!
Whether you are salaried or a businessperson, there’s one thing that will help you manage your finances this month - a Diwali Budget.

Let’s get started.

Make a List

This one simple step will give you an overall picture of what your expenses will most likely be this month. Include items such as:
1. Gift & shopping expenses This is probably going to be one of your 3 major expenses. Make a specific list such as Rs. 1000 on dry fruits & mithai to Mr. X, Rs. 1,500 on saris to Mrs. Y, clothes, jewellery & other gifts for your parents, in-laws and spouse; crackers and presents for your children; personal gifts for your cousins and so on.
  
  Also remember, good family memories often make for better gifts than presents which once used can be forgotten.
2. Salaries & bakshish Try and be as detailed as memory allows - include the postman you’ve never seen before, courier agents, the milkman, the newspaperwala, the maid / servant, the building watchmen, and whoever else you think will ring the doorbell
3. Family gatherings Estimate approximately how much you are likely to spend on dinners & lunches, whether for a party at home or an outing to a nice restaurant
4. Decorating / renovating the house Whether it is a paint job, or new furniture, or renovating the bathroom or kitchen, this can often be a time of large expense on the home. This will of course be a family financial decision, so make a note of what the likely estimate is.
5. Vacation time If you are planning a vacation, you should ideally book your rail / flight tickets as much in advance as possible.
This exercise will help you decide what items to put a ceiling on, and you will see if the overall expense is too high and therefore what items can be removed altogether or substituted for less expense ones. You can also club items and buy them wholesale, availing discounts where possible.
Don’t Swipe At Will. Track your Expenses.

There are 2 ways to use this rule.
1. The automatic reflex when out for Diwali shopping is to carry your credit / debit card, and swipe for whatever items are purchased, without checking each one and often without checking the bill either. Don’t do this! If possible, make a trip to the ATM first. Withdraw the amount you are willing to spend on a single shopping trip. That way, while you are shopping, you will automatically know you have used up the budget when you run out of cash in your wallet / bag! A strict rule, and one that works.
  
  You should of course always keep your cards handy in this situation to avoid any potential inconvenience, but if you do use them, keep track of what you are spending on.
  
  This rule works for some people, but not for others. It depends on your predisposition towards shopping. If you don’t always enjoy it, and are more of a ‘make a list, stick to the list’ sort of person, this will work for you. If not, then option b of this rule will work.
2. Use your credit / debit card judiciously, and track your expenses on your bank statement to see what has been spent and what’s left to be bought.
  
  This is a slightly tricky one, as expenses can get away from you sometimes, especially if you are not following a list. Try and stick to using only one card, preferably one with a bank account that you have online immediate access to. When you get home from your shopping trip, you will be able to log in and check what your actual expenses have been, and compare with what your budgeted expenses were. If the first shopping trip gives you a bit of a rude shock, you’ll be more careful when you next step out.
  
  At the end of the month, you’ll have a record of all your expenses on a single bank statement, which hopefully does not run into too many pages!
Avoid the Last Minute Rush

Last but not least - remember that haste makes waste. Money can be saved if you plan your expenses in advance. Make a maximum of 3 shopping trips, take a list with you each time, tick items off the list one by one, and if possible, plan your driving / travelling route as well so you save time and fuel. Try and finish your Diwali shopping and gift wrapping one week before Diwali.

Conclusion

To sum it up, festivals are a time of celebration, family and joy. So enjoy yourself, spend time with your loved ones, and remember to manage your expenses!

Govt tries to fill Rs 50,000 cr revenue gap

2011-10-18T20:51:00.000+05:30

The government is looking at a Rs 50,000 crore hole in its accounts due to a faltering disinvestment program and prospects of missing out on fresh mop-up from sale of spectrum, prompting it to scrape the bottom to plug the gap.

Against the disinvestment target of Rs 40,000 crore, the government has so far managed to get Rs 1,144 crore from the stake sale in Power Finance Corporation. Although it has been forced to indefinitely postpone the ONGC follow-on offer in the face of volatile markets, officials said there was still hope of taking it to market by March as the public sector company's shares have not seen a steep decline.

But they admit that there is no clarity on other PSUs on the disinvestment list of the year - from Bhel to SAIL and IndianOil. "Disinvestment is tough this year," said a senior finance ministry official, who did not wish to be identified.

Similarly, there is no word on the Rs 15,000 crore that the government had budgeted from auction of spectrum in the current financial year. To begin with, the department of telecommunications was not too eager on the issue given the controversy surrounding the 2G scam. The finance ministry pushed hard but is now realising that spectrum across the country is not in the government's possession.

The shortfall is over and above the possible spike in spending due to higher-than-budgeted food, fertiliser and fuel subsidies. Finance ministry officials, however, say this problem can be handled since the payment of subsidy for the last quarter (January-March) can be postponed to next year.

In case of taxes, the ministry hopes to meet the indirect tax target despite the Rs 24,000 crore hit on its accounts due to a cut in duties on fuel. And officials are hopeful of exceeding the direct tax collection target. But this may not be sufficient to cover the Rs 50,000 crore gap. "I am sure the government would not like to give up so early in the day. We still have hope and will try to meet the targets as far as possible," he said.

On Tuesday, finance minister Pranab Mukherjee will deliver a stern message to financial advisors to stick to the allocations for the year and make sure that funds are disbursed only after utilisation certificates are received for the money released earlier. Besides, the finance ministry is hoping to impress upon ministries to save as much of their allocation as possible. "Even when there was no pressure, we managed to save Rs 20,000 crore. This year, we will try to increase it further," an official said.

Just like subsidies, officials indicated that ministries with large spending budgets such as defence and rural development would be advised to defer a part of their spending to the fourth quarter.

With the belt tightening moves, finance ministry hopes to meet its fiscal deficit target of 4.6% of gross domestic product set for the 2011-12 financial year. During an interaction with reporters in Tabriz, Iran, on Saturday, Mukherjee admitted that given the steep reduction target, sticking to the budgeted level may be tough. He, however, did not elaborate further.

Facing pressure on the targets, last month, the cash-strapped government said it would borrow nearly Rs 53,000 crore more than the budgeted level. The Centre will now borrow Rs 2.2 lakh crore between October and March compared to the original plan of Rs 1.67 lakh crore. The finance ministry official ruled out any further increase in its borrowing programme saying the ministry's austerity drive and strategy to rationalise spending should help it tide over the difficult situation.

TCS falls most in 2 yrs

2011-10-18T20:44:00.001+05:30

Indian shares fell 1.6 percent to their lowest close in two weeks on Tuesday, with export-driven Tata Consultancy Services sliding the most in more than two years over uncertain global economic outlook.

Concerns foreign funds could pull out more from India, which has been one of the world's worst performing markets this year, also weighed.

Traders said investor sentiment was dented by comments from the German finance minister against a quick-fix to Europe's debt problems, slowing growth in China and a warning on France's sovereign credit rating.

"There is a significant impact from the way things are unfolding globally. The worries that the worst may not be over is certainly affecting sentiment," said Kishore P Ostwal, managing director, CNI Research said.

Software services companies that get most of their revenue from exports led the fall.

Tata Consultancy ( TCS), India's biggest software services exporter, fell 7.7 percent to 1,033.55 rupees, a day after the company reported lower-than-expected quarterly earnings and said the outlook for pricing was tough.

It was the steepest one-day slide since May 19, 2009 when it had slumped 10 percent.

UBS downgraded the stock to 'sell' from 'neutral' while maintaining its target price of 1,000 rupees on back of concerns about the spending outlook for the current fiscal year, especially in financial services.

Rivals Infosys and Wipro shed 1.6 and 3 percent respectively.

The main 30-share BSE index ended down 1.63 percent at 16,748.29, its biggest drop since Oct. 4. Twenty-six of its components declined.

The benchmark, which had risen 5.2 percent last week in a bounce back, is down about 17 percent so far this year.

Ostwal said investors were also wary after monthly derivatives contracts expiry was brought forward by two days to Oct. 25 due to holidays.

Shares in HCL Technologies , India's fourth largest software services firm, fell 8.75 percent as investors shrugged off a 50 percent jump quarterly profit and focused on a cloudy outlook for the sector amid slowing global growth.

India's showpiece $76 billion industry gets more than 90 percent of its revenue from providing technology services to overseas clients and counts the United States and Europe as its biggest markets.

Banking shares fell on worries over rising interest rates and slowing growth in Asia's third-largest economy, which have been eroding asset quality.

State Bank of India dropped 1.3 percent, while rival ICICI Bank fell 2.5 percent.

Expectations the central bank will raise rates next Tuesday when it reviews policy have gathered momentum after September inflation remained high.

Leading motorcycle maker Hero MotoCorp ended down 0.35 percent ahead of its results. A Reuters poll estimated quarterly profit to rise 11 percent.

The 50-share NSE index shed 1.58 percent to 5,037.50. In the broader market, there were 2.8 losers for every gainer on total volume of about 450 million shares.

World stocks as measured by MSCI fell nearly 1 percent, while the emerging equities index was down 2.3 percent.

Vijay Mallya's white house in the sky

2011-10-18T12:54:00.000+05:30

Mumbai can boast of Mukesh Ambani's $1 billion Antilla, Delhi has its Lutyens' patch, and now Bengaluru gets a billionaire's wonder - a White House in the sky.

Kingfisher Towers-Residences at UB City, the new home of India's flamboyant business tycoon, Vijay Mallya, as well as other billionaires is under way and will be completed in the next three years.

TOI, in its July 11, 2008, edition, was the first to break the news that Vijay Mallya was razing down his ancestral home on Vittal Mallya Road to make way for a ultra-high end 34-storey millionaires ' paradise on top of which he would have a penthouse.

Now, TOI gets you the first-ever visuals and details of Vijay Mallya's 'White House in the sky'. In all probability, Mallya will be the only man in the city who can boast of having a 1-acre parcel of land that's situated in the sky, and not on the ground below.

ABODE OF MILLIONAIRES

Situated in the heart of Bangalore city, Kingfisher Towers has around 82 apartments split in three blocks, of which only 72 are for sale. Of the saleable units, 30 are Mallya's and the rest are with Prestige. The remaining 10 unsold units are to be spilt among members of Mallya's family.

There are five points of entry to the apartments, but to begin with, only two will be used. While the millionaire residents will be using the Kasturba Road Cross entry, Mallya has a separate entry from Vittal Mallya Road, which incidentally, is the same entry as that of his old house. The separate entry, which is adorned on one side by a 39,000 sqft private garden, leads Mallya to his personal lobby, a home-office, and a private lift to the penthouse. Each of the other apartments is 8,000 sqft and begins at Rs 20 crore. The apartments begin only from the 5th floor, and as one goes higher, the price increases. The first four floors, along with two floors in the basement, have been reserved for car parking. While each resident would be getting around 3- 5 car parks, Mallya gets to have a car park area that can accommodate around 100 cars. Mallya will also have a designated area where he will be showcasing his collection of vintage cars.

Initially, the project was to have around 100 units in three different sizes, but the plans were changed to have apartments of one size of 8,000 sqft. It is learnt that many of the millionaire buyers didn't like the idea of there being different apartment sizes as such a scenario would result in ego clashes among them.

TOI has learnt that while Prestige have sold out their share of the apartments, Mallya has just begun the process of selling. Kingfisher Towers might well be the only apartment building in Bangalore, where maids would get their own personal lift and lobby area, which would lead in to their private living quarters.

The luxury project has a 6,000-sqft clubhouse and garden on the 5th floor, a similar sized swimming pool area on the 10th floor, a badminton court on the 15th floor, and party hall and terrace garden on the 25th floor. There is also a 25,000-sqft common garden area for residents that is situated along the entry.

MALLYA'S PENTHOUSE

Situated on the 33rd and 34th floors of the building, Mallya's penthouse sits on one-acre, which is supported by the three blocks 32 storeys high. The penthouse, split in two levels, will have a built-up area of around 40,000 sqft, and would boast a wine cellar, an indoor heated pool, an outdoor infinity pool, a gym, a salon and a spa, to name a few. The roof of the penthouse will have a helipad and, of course, the stars above.

RECAP

In 2008, Vijay Mallya, chairman, UB Group, decided to raze down his 4.5-acre ancestral home to make way for a luxury high-rise, on top of which he would build a penthouse for himself. But, the project was kept under wraps, and Mallya had denied to TOI that such an idea was even being conceptualized.

Once upon a time, the entire land parcel, which now houses UB City, and the upcoming Kingfisher Towers, comprised a brewery which belonged to the UB Group. The land parcel in front of UB City on which the J W Marriott hotel is being built was also part of the brewery.

In September 2009, while briefing shareholders at the 93 rd annual general meeting of United Breweries (holdings ) Limited, the parent company of the UB Group, Mallya had said, "We have got permission to develop an additional 500,000 sqft of space in UB City. This has come about due to changes in the zonal regulations of the area, which has resulted in an increase in the floor area ratio (FAR)."

While Mallya didn't comment further on the subject, UB Group CFO, Ravi Nedungadi, had then said, "There are plans of building a highend apartment."

Then in 2010, while declaring the fourth quarter results of United Breweries Holdings, Mallya himself announced that he had "executed a joint development agreement with a developer on 26 th April 2010, for the development of a luxury residential building in the available land in UB City". The developer was none other than Prestige Group. He also mentioned that the joint development would be in the ratio of 55% to UB and 45% to Prestige.

Meanwhile, Prestige Group, which owns the Oakwood Premier Prestige Serviced Residences in UB City, began renovation work on 46 serviced apartments, situated on the top two floors of the hotel, which would be the temporary address for Mallya and his family, until Kingfisher Towers- Residences at UB City is built.

HDFC Ltd Sept qtr net up 20 pct

2011-10-17T23:18:00.003+05:30

India's top mortgage lender HDFC Ltd posted a 20 percent rise in net profit for the quarter-ended September led by higher income from operations and profit on sale of investments.

HDFC said its net profit increased to 9.71 billion rupees from 8.08 billion a year ago. Income from operations rose to 40.77 billion rupees from 29.07 billion rupees in the year-ago period.

Profit from sale of investments stood at 868.8 million rupees while its net interest margin for the September quarter was at 4.3 percent.

Its loan book size also increased by a fifth to 1.27 trillion rupees as of Sept. 30 - in line with its annual guidance.

The lender expects demand for home loans to be helped by rising incomes in burgeoning middle-class households and a low penetration of housing loans in Asia's third-largest economy.

Keki Mistry, vice chairman of HDFC said, in a televised press briefing, that he did not see an adverse impact of the rate hikes on its loan growth target or on asset quality, which has been steadily improving.

The Reserve Bank of India (RBI) raised interest rates for the 12th time in 18 months in October to fight high inflation and signalled more was to come.

Industry-wide deposit growth was higher at 6.1 percent as of Sept. 9 from the beginning of the fiscal year in April, compared with a 3.4 percent growth in loans, data from the central bank showed.

HDFC competes with India's top commercial bank State Bank of India, No. 2 ICICI Bank and a host of other banks and financial institutions for a bigger share of the mortgage loan market.

Mistry said the company's spreads, the difference between borrowing and lending rates and a key gauge of profitability, would remain in the range of 2.15 percent to 2.35 percent. For the September quarter, it stood at 2.28 percent.

At 2.31 p.m., HDFC's shares, valued by the market at nearly $20 billion, were up 0.7 percent at 671.45 rupees in a weak Mumbai market.

TCS Q2 net up 15%; says economic uncertainty remains

2011-10-17T23:10:00.001+05:30

India's top software exporter Tata Consultancy Services said it does not expect to increase its prices in the near term due to global economic uncertainty, after posting a slightly lower-than-expected 14.7 percent rise in quarterly net profit.

India's showpiece $76 billion industry gets more than 90 percent of its revenue from providing technology services to overseas clients and counts the United States and Europe as its biggest markets.

Europe is the second largest market for the software firms, and the euro zone debt crisis is a worry for the sector that has been looking to increase its sales to the region to hedge against their excessive exposure to the United States.

"If the global economic situation worsens, the sector could see a temporary blip with customers opting to suspend technology spending," said Eric Mookherjee, the Paris-based chairman of Shanti India fund.

"I see no reason for the healthy demand momentum not to continue in the medium to long term as companies will continue to looks at ways to cut costs," said Mookherjee, whose fund owns TCS and No.2 software exporter Infosys shares.

TCS Chief Executive Officer N. Chandrasekaran said there were "ambiguities in the external environment in the short term" but the company had not yet seen any project cancellations or cutback in client spending on technology.

"Even though the macro uncertainty continues and there is a lot of negativism, we are getting positive vibes from customers in terms of their IT spend going forward," Chandrasekaran said, adding the firm was eyeing at least 10 large deals currently.

TCS added 12,580 staff in the July-September quarter, its strongest pace of addition in two years, and retained its forecast of adding 60,000 employees in this fiscal year, underscoring hopes of strong outsourcing demand.

TCS and its local rivals, who provide a host of IT services to Fortune 500 firms, face stiff competition from global players including IBM and Accenture for large outsourcing deals from global corporations.

Chandrasekaran said the company saw a marginal decrease in second-quarter prices, and billing rates were unlikely to go up in the near term due to the negative macro environment.

"Volumes are quite good. Pricing (increase) may be delayed because macro uncertainty has gotten worse," he said.

Infosys, seen as a trend-setter for the sector, last week reported a 9.7-percent rise in second-quarter profit, roughly in line with estimates, easing worries of a slowdown in the outsourcing sector due to economic concerns.

Third-ranked Wipro is expected to report a 0.7 percent drop in its quarterly net profit on Oct. 31.

PROFIT RISES

TCS, a unit of the salt-to-steel conglomerate Tata Group, said its fiscal second-quarter net profit rose to 24.39 billion rupees ($498 million) in accordance with international financial reporting standards, from 21.26 billion a year ago.

Revenue rose by a quarter to 116.34 billion rupees, as it added 35 new clients in the period to take the tally to 1,010.

This compares with a Reuters poll forecast of 24.77 billion rupees in profit and revenue of 117.05 billion rupees for the company, whose major clients include Citigroup, General Electric, British Airways and Sony.

The company reported a 195 basis point drop in its profit margins from a year ago to 21 percent in the quarter, as the cost of hiring a large number of employees and wage hikes took their toll.

But a weaker rupee, which has fallen more than 10 percent since end July after touching the 2011 high, had a positive impact of 1.7 percent on margins in the quarter for the exporter that gets more than half its revenue from the United States.

Shares in TCS, valued at about $45 billion, closed down 1.2 percent at 1,120.25 rupees ahead of the result announcement in a Mumbai market that closed 0.27 percent down.

Raj Rajaratnam sentenced to 11 years in prison

2011-10-13T21:57:00.001+05:30

Raj Rajaratnam

Raj Rajaratnam, a self-made hedge fund tycoon convicted in the biggest Wall Street trading scandal in a generation, was ordered on Thursday to serve 11 years in prison, one of the longest sentences ever in an insider-trading case.

The sentence was lighter than the 19-1/2 year minimum prison term that prosecutors had sought, but is still above the 10 years handed down recently in another major insider trading case. Federal inmates typically must serve at least 85 percent of their terms before being eligible for release.

It was not immediately clear if Rajaratnam would be ordered to prison immediately, at a later date, or allowed to remain under house arrest while he appeals his conviction. Prosecutors and defense lawyers were still discussing sentencing matters in court on Thursday morning after the judge announced the intended prison term.

Pak to grant MFN status to India - Hina Rabbani Khar

2011-10-13T14:10:00.000+05:30

Pakistan has decided in principle to grant the Most Favoured Nation (MFN) status to India, foreign minister Hina Rabbani Khar has said, citing a number of achievements in bilateral ties.

Khar made the remarks while speaking during question hour in the national assembly or lower house of parliament on Wednesday evening. She did not provide details as to when the matter would be finalised. India bestowed MFN status on Pakistan in 1996.

Pakistani commerce minister Makhdoom Amin Fahim, who led a high-level business delegation to India last month, had said in Mumbai that there was a strong opinion in his country that India should be given the Most Favoured Nation status. Khar said the India-Pakistan dialogue process had been resumed after a gap of two years. "We want progress on not just one but a number of issues with India on permanent basis besides normalization of overall bilateral relations," she added.

Scam 2.0: $40bn of black money may have come back to India

2011-10-12T23:14:00.001+05:30

On Tuesday, Bihar Chief Minister Nitish Kumar flagged off Lal Krishna Advani's Jan Chetna Yatra, one of whose aims to is pressure the government to act against corruption and bring back the black money stashed abroad.

Here's a thought: Maybe Advani can take a break and chat up some smart cookies in Mumbai during his yatra. It seems some of the black money has already come back and is nesting in our own backyard. It is sloshing about in the stock markets and bank accounts.
Here's the stunner: The amounts involved could be as large as USD 40-45 billion and this is money that came back just in one year, 2010-11.

Three analysts from Kotak Securites have probably struck paydirt in unearthing a scam that will be bigger than the 2G, Commonwealth and multiple illegal mining scams put together.
Howzatt?

Well, the trio—Sanjeev Prasad, Sunita Baldawa and Amit Kumar—have been poring over our export numbers and foreign investor inflows and have proved that it just does not add up. And if it does, maybe all the fuss kicked up about Swiss banks and illegal funds abroad has sent black money scurrying back to home base.
India, it seems, is the ultimate safe haven for Indians’ black wealth.

Of course, Messrs Prasad, Baldawa and Kumar do not put it quite that way. This is what they say in a research report dated 10 October:
"Our study of exports data of major engineering companies (including automobiles and metals) shows that the increase in their exports does not reconcile with the steep increase in official exports data. In fact, the gap is quite substantial."

How substantial? The official export data shows 79% year-on-year export growth in 2010-11. Exports by engineering companies in the BSE 500 (the cream of India Inc) show just 11% growth. If you want to know the difference in dollars, the engineering export jump accounts for USD 30 bn (up from USD 38 billion to USd 68 billion). The figures for the BSE 500 show a jump of just Rs 61 billion (rupees, not dollars). Converted at the rate of USD 1= Rs 44, this is just USD 1.38 billion.

Where did the rest of the $28-and-odd billion come from?
From itsy-bitsy small engineering companies that are not in the BSE 500? Or was so much of illegal ore mined and sent by the Reddy brothers and their ilk in Goa, Odisha, Karnataka, and Jharkhand?
Or, as the Kotak trio suggest, could be it all be overinvoiced exports? The report says:
“Some reports have alleged that some individuals may have been compelled to bring back funds through the official route by simply overinvoicing exports or even resorting to fraudulent exports thanks to (1) increased international scrutiny of unaccounted funds in bank accounts in Switzerland and other financial centres, and (2) heightened debate in India about action against unaccounted overseas wealth.”

The Kotak report offers two “egregious” examples as exhibits A and B in its effort to show that something’s clearly wrong. In 2010-11, exports of metals and metal products soared from $13 bn to $ 29 bn. But figures for 22 such companies in the BSE 500 show a growth of just Rs 37 bn (yes, rupees again, not dollars). This growth is less than $1 bn. So how did overall exports of metal and metal products rise $16 bn?
Egregious example B relates to “copper articles” whose exports grew by a whopping four times or more from Rs 8,500 crore to Rs 36,700 crore. How did this miracle happen in a metal India is not known to export normally? China apparently bought a whole lot of it.

So there is a strong possibility of there being a China angle to the skulduggery as well. Are the Chinese in cahoots with Indian black money vendors? Is China an alternative safe haven for Indian crooks?

The second route used by the black moneymongers is possibly the foreign institutional investment (FII) route. The Three Kotak Musketeers have smelt a rat here, too.
According to them, 2010-11 foreign investor flows added up to $22 billion, according to official figures. But a cross-check with international sources like exchange-traded funds and EPFR Global (which tracks $ 15 trillion in global investment flows) shows that not more than $4.5 billion came to India. Though it is obvious that EPFR data is not 100 percent foolproof, since its sometimes excludes sovereign and private equity funds, the gap of $17.5 billion is simple too huge to be explained by normal data omissions.

Drawing a cautious conclusion, the Kotak trio calls for better disclosures by FIIs in view of the implications for India’s foreign exchange reserves and balance-of-payments. “More extensive disclosures could well counter any potential concerns that flows could be camouflaging
(1) hot money/illicit, unaccounted or black money from overseas accounts of resident Indians, and
(2) high levels of proprietary positions of global investment banks, and
(3) round-tripped money from Indian companies.”

Put another way, there is a strong possibility that hot money has flowed back into India as things have gotten hotter abroad. In recent months, the Swiss authorities have signed deals with UK and Germany to levy a tax on accounts held by UK and German nationals. In India, the finance ministry has been waffling about double-tax treaties and ruling out amnesty schemes when they could have done the same deal with the Swiss banks. At worst, we would at least have got some additional revenues.
Firstpost has reported on how there is the growing possibility of international whistleblowers publishing lists of Indans with accounts in Swiss banks, which could unmask many politicians, film stars, and even cricketers.

Firstpost has also published several reports on black money, and reported on how the Indian economy had suddenly become an export tiger by showing huge leaps in exports to China, Hong Kong and the Middle East, among other places. In 2011-12, we have seen 53 percent growth in exports (April-August), with July alone showing a spectacular 81 percent.

The unreality of these figures has been clear for some time now, and Commerce Secretary Rahul Khullar has been predicting a slowdown for a few months now. In August, he said he expected a slowing of exports “with almost immediate effect” and that India “would be lucky” to achieve 20 percent export growth in 2011-12, The Financial Express reported.
Far from scripting a huge export success story, the government is working on policies to assist exporters.

Quite clearly, officials know something about the export boom that the official figures do not tell.

Looks like the Kotak Trio have done what the finance ministry could not: find out where the money is. It is here – at least a huge chunk of it.

Force India re-named Sahara Force India

2011-10-12T22:55:00.002+05:30

Sahara Force India

With just 19 days to go for the inaugural Indian Grand Prix , the Sahara Group bought 42.5 percent stake, worth US $100 million, in the Vijay Mallya-owned Force India F1 team.

Following Wednesday's deal, the Formula One team was renamed Sahara Force India.

The Sahara Group, headed by Subroto Roy, and Mallya's UB Group will have 42.5 per cent stake in the team, while the remaining 15 per cent will be with the Mol family.

Mallya will continue to be the team principal.

Force India was formed in 2007 when a consortium, led by liquor baron Mallya, and Dutch entrepreneur Michiel Mol bought the loss-making Spyker Formula One team, reportedly for about for 90 million euros, and renamed it Force India.

India's maiden Grand Prix will be run on October 30, at the 120,000-capacity circuit on the outskirts of Delhi.

Media reports last week said Mallya planned to sell the team to the Sahara group, but they were denied by the liquor and aviation baron.

Force India, whose current drivers are German Adrian Sutil and Britain's Paul Di Resta, are currently placed sixth in the Formula One constructor standings.

The Sahara group, which also supported the Indian hockey team, had bid $370 million to become owners of the Pune franchise in cricket's Indian Premier League in October, 2010.

Sahara Group buys 42.5% stake in Mallya's Force India team

2011-10-12T22:50:00.003+05:30

Sahara Force India

With just 19 days to go for the inaugural Indian Grand Prix, Sahara Group on Wednesday bought 42.5% stake, worth $100 million, in the Vijay Mallya owned Force India F1 team, which has been re-christened as Sahara Force India.

Sahara Group, headed by Subroto Roy, inked an agreement with Mallya's UB Group, which will also have 42.5% stake in the team.

The remaining 15% will be with the Mol family.

Mallya will continue to be the Team Principal.

Liqour baron Mallya had bought the Spyker Ferrari F1 Team in 2007, reportedly for about for 90 million euros. He then renamed the team as 'Force India' for the 2008 season.

The Force India team is at the sixth position in the constructor's championships with 48 points in the current season.

Mallya also owns IPL team Royal Challengers.

On the other side, Sahara Group that has interests in financial services, real estate, media and hospitality, is a major promoter of sports in India.

Sahara owns the new IPL team Pune Warriors India and also sponsors India national cricket team. It had also supported the Indian national hockey team.

India will host its first Formula 1 Grand Prix on October 30, 2011 on a 5.14 km track, in Greater Noida built by Jaypee Sports International.

Infosys announced Q2 results [Detailed Report]

2011-10-12T16:59:00.000+05:30

Infosys announced Q2 results (September 2011) today, beating expectations substantially. Revenues were up 8% from last quarter to 8099 cr. and Net profits up 9.73% from last year, to 1906 cr.

The stock is up 5% and has lifted the index up with it, with both the Nifty and Sensex up 1%.

Revenues and Profits

Revenue growth has returned but much of the spike is from the strong dollar. In dollar terms, Revenues grew 4.5% (QoQ) — the remaining has come from the dollar move. The USD-INR equation has moved 4% in their favour (from an average of 44.78 to 46.3)

Despite the dollar move, the EPS growth wasn't impressive; at 9.7% in rupee terms and 9.9% in dollar terms, year on year, EPS growth looks incredibly small given that the dollar has risen. Since 54% of Infy's revenues come from onsite work, those expenses are also in dollars, which negates ,to a certain extent, the rise in the dollar.

Employees and Attrition

September is usually a great quarter for hiring and this one was no different. With over 15,000 people hired, and a net addition of 8,262 employees, Infy sees its employee strength go to 1.42 lakh people.

The attrition rate remains around 16%.

Utilization has gone up to just about 70%, which is a good sign. Strong hiring and good utilization usually means continuing business — there isn't much of an impact of the global slowdown (yet).

Project Types, Geographies

Infy increased Time and Material (T&M) Billing this quarter, which is lucrative because you can bill more if you add more people.

The kind of work they do hasn't changed substantially — slowdown or not.

And finally, they have moved away from Europe into America, which is probably reflective of the troubles in the Eurozone.

Work in India as a percentage has decreased (2.2% versus 2.6% in Q1) and the rest of the world has gone up to 12% from 11.9%.

EPS Growth And P/E
The P/E has come down substantially with the recent price fall and hovers around 20.

The problem is that the Trailing Twelve Month (TTM) EPS growth has softened, to just 13.16%. They do expect to grow more in the coming months (to 21%!), but much of that will come due to a weak rupee, if it remains so.

Risks to growth will be a strengthening of the rupee back to the 44 levels, or a much larger crisis in the west (85% of their revenues come from North America and Europe).

EPS Growth this quarter has come down to less than 10% after a great quarter last year.

Outlook
For the next quarter, Infy expects both Revenues and EPS to grow between 24% to 26% (YoY).

For the entire year ending March 2012, the projection is that revenues grow 22% to 24% YoY. the EPS expectation is Rs. 143.02 to 145.06 (a growth of 21%)

Current Trailing Twelve Month (TTM) EPS is 126.46, which has grown just marginally from the March 2011 year end EPS of 119.41. So most of the growth needs to come in the next two quarters.

The Indian IT industry recorded 19 per cent growth in revenues in the 2010-11 financial year to Rs 438,296 crore

2011-10-12T15:00:00.003+05:30

The Indian IT industry recorded 19 per cent growth in revenues in the 2010-11 financial year to Rs 438,296 crore ($96.1 billion).

The growth is a significant recovery for the industry, which recorded just 8 per cent growth in 2009-10 in the wake of the global recession in 2008, which made both global and Indian companies cut back on their IT spending.

The figures were compiled by IT industry magazine Dataquest, the flagship publication of media house CyberMedia, which conducts an annual research study on the state of the industry.

According to the findings, exports accounted for two-thirds (66.4 per cent) of the industry's revenues, while the domestic market accounted for the remaining one-third (33.6 per cent) in 2010-11.

However, revenues from the domestic market experienced higher growth than exports in the financial year. Domestic IT revenues grew by 23 per cent to Rs 147,152 crore in FY'11, while exports clocked 17 per cent growth to Rs 291,144 crore.

While IT services exports grew by 21 per cent in FY'11 (compared to 6 per cent in FY'10) and engineering services exports grew by 22 per cent (compared to 6 per cent in the previous year), BPO exports growth slowed down to just 7 per cent, compared to 13 per cent in the previous fiscal.

Total services exports from India stood at $64 billion in FY'11, including IT software/services and BPO.

"The slowdown in 2009 and 2010 made the industry more efficient and mature. With the growth now back, the Indian IT industry can look forward to more depth, innovation and global spread in 2011-12," said Pradeep Gupta, the Chairman of CyberMedia India.

Hewlett-Packard India was the largest IT player in the domestic market, while TCS was the largest exporter from India and also the largest company across all categories.

Within the Indian domestic market, computer hardware sales jumped by 28 per cent. Software and services revenues grew by 19 per cent each, clearly indicating that enterprises have resumed their spend on new infrastructure creation and hardware replacement.

However, certain segments within software, such as business intelligence (BI), did particularly well. BI grew at 38 per cent.

The segment, which had grown by 44 per cent in FY'10, is the new focus for investment among large enterprise CIOs, as top executives are now relying more and more on analytics to take business decisions, Dataquest notes.

The research also reveals that most of the consumer technology segments, such as laptops, smartphones, and storage devices (MP3 players, digital cameras, consumer storage media), recorded impressive growth in FY'11.

Smartphones (revenues of Rs 8,796 crore) experienced the maximum growth in revenue terms across all categories, at 97 per cent. Computer hardware sales of Rs 29,151 crore included servers (Rs 2,709 crore), desktop computers (Rs 13,341 crore) and laptop computers (Rs 13,301 crore).

The Top 7 IT companies notched up revenues of over Rs 10,000 crore each, namely TCS (Rs 29,801 crore); Infosys (Rs 25,477 crore); Cognizant (Rs 21,393 crore); Wipro (Rs 19,421 crore); Hewlett-Packard (Rs 19,022 crore); HCL Technologies (Rs 13,264 crore) and HCL Infosystems (Rs 11,773 crore), totalling Rs 140,151 crore.

Why is the US dollar strengthening?

2011-10-12T11:57:00.002+05:30

Despite the weakness of the US economy, high level of debt and downgrade of its long-term debt, the US dollar and the US Treasury securities continue to be in demand. How can a weak currency support a strong currency. Here's why:

Greek Crisis
The debt crisis in the euro zone, fears of default by Greece and breakup of the euro zone has been weighing down the euro.

Volatile Market
In uncertain times, investors prefer to cash over risky financial assets such as stocks. Global sell-off in stocks has increased demand for dollar and led to its appreciation.

Operation Twist
Fed's recent action of injecting liquidity by replacing long term bonds with short-term bonds instead of printing more money has prevented an increase in supply of dollar.

Safe Haven
The US dollar is still considered a safe haven despite all the troubles with the US and the central banks across the world continue to buy US Treasury securities.

Outlook
Indian Rupee to improve to Rs 46.3 to a dollar by March 2012, according to DBS. Consensus poll of Bloomberg estimates US/Rupee at Rs 44.1 by March. The euro too may recover some of its recent losses.

Three Kerala IT firms win Nasscom honours

2011-10-12T11:49:00.002+05:30

MobME Wireless, Innoz Technologies and Flytxt, all headquartered at the Technopark campus here, feature in the Nasscom's list of 50 top emerging IT companies in the country this calendar year.

MobME Wireless and Flytxt have been chosen in the Emerge Innovation category and Innoz Technologies in the Emerge Start-ups category, said a Nasscom release issued here on Monday.

Nasscom Emerge Leaders Awards is an initiative which has been started exclusively for the emerging/start-up IT companies to showcase their unique value proposition and create a distinct niche for them.

The focus of this year's Emerge Conclave was on exploring how emerging and start-up companies can build economic value out of emerging web based social platforms, mobile and AppStore. MobME, Innoz and Flytxt were chosen as winners from a total of 350 applicants.

Congratulating these companies, Technopark CEO Mervin Alexander said their business incubation division had put in lot of effort to identify innovative companies and nurture them to become a reckoning force globally.

"Technopark can today boast of many such companies that are now creating waves globally with their breakthrough technologies," said Alexander.

MobME Wireless CEO Sanjay Vijayakumar said that the award was a recognition of their efforts to constantly innovate and create solutions that would change the way of doing business in the telecom industry in India.

Kerala has 300 IT companies which employ close to 50,000 IT professionals.

Of the 1,300 member Nasscom companies, 27 are from Kerala. At the first ever executive committee meeting held here last month, the eighth office of Nasscom in the country was opened here.

Free roaming, high broadband speeds in new telecom policy

2011-10-12T11:48:00.003+05:30

The new telecom policy will bring cheer to consumers with the government on Monday proposing to remove roaming charges for subscribers within the country, exponentially increasing broadband availability and speed and allowing for mobile numbers to be ported to any part of the country.

According to the draft of the new telecom policy unveiled by communications minister Kapil Sibal, roaming charges will be done away with and users will be allowed to port their mobile numbers, keeping the same number, even while switching service areas.

The distinction between local and STD calls would vanish, as the policy aims at a 'one-nation-one-licence' regime.

Telecom operators would not require separate licences for operations in various parts of the country and a single licence would suffice.

The new policy also proposed to accord the telecom industry the status of an infrastructure sector, which will help ease credit flow to companies for funding roll-out plans or expansion activities.

Mobile service providers would also benefit from the policy as it proposes to allow companies to pool, share and later trade spectrum -- a scarce resource. The minister also said the government would look at bringing legislation for governance of spectrum.

"We believe it is imperative to move towards convergence of telecom, broadcast and IT services, networks, technologies and overcome all existing segregation of licensing, registration and regulatory mechanisms with the objective of enhancing access and reduce costs," Sibal said while unveiling the draft of the new policy.

"We will seek Trai (Telecom Regulatory Authority of India) recommendations on new licences, migration to new licences and exit policy," Sibal said.

"Revenue generation will play a secondary role," he added.

In the wake of the 2G scam, the minister said spectrum allocation would be delinked from licences and radiowaves would be made available at market-determined prices.

As the market is crowded with too many players, the government would also bring an exit policy.

Sibal also said that his ministry was targeting increasing rural tele-density from the current 35 per cent to 60 per cent by 2017 and completely covering rural areas by 2020.

Broadband penetration is another key thrust area for the new policy. The minister said the government was targeting 175 million broadband users by 2017, and increasing this to 600 million by 2020.

The final telecom policy will be announced by December.

Infosys Q2 profit seen up 9.9% at Rs 1891 cr

2011-10-11T23:57:00.003+05:30

Country's second largest software services exporter Infosys is set to report a growth of 9.9% quarter-on-quarter in profit of Rs 1,891 crore for the second quarter of FY12, according to CNBC-TV18 estimates. Net profit for the previous quarter of current financial year was Rs 1,720 crore.

Revenues are expected to jump 7.9% to Rs 8,080 crore as against Rs 7,485 crore, quarter-on-quarter basis.

CNBC-TV18 expects earnings per share of Infosys to rise by 9.1% to Rs 32.9 in the quarter ended September 2011.

Earning before interest and tax (EBIT) for the July-September quarter of 2012 is likely to be at Rs 2187 crore, a growth of 12% compared to Rs 1952 crore in previous quarter.

Full text: India Inc's letter to govt on corruption

2011-10-11T23:28:00.003+05:30

New Delhi: Leaders of the Indian industry have once again written a letter to the government expressing their concerns over corruption.

Here is the full text of the letter:

On January 17, 2011, we, a group of like-minded citizens who were deeply concerned with the state of affairs of the nation addressed an Open Letter to our leaders. This letter focused on four issues - (a) Growing Governance Deficit (b) Galloping Corruption (c) The urgent need to distinguish between 'Dissent' and 'Disruption' and (d) Environmental Challenges. The Open Letter received wide exposure in the public domain and was generally perceived as being timely. As mentioned in the first Open Letter, the aim of the group is to develop specific actions regarding the above-mentioned issues and place these in the public domain from time to time. It is in this context that we put forward our second Open Letter.

CNN-IBN

August 27, 2011 marked a high point by the historic debate leading to the 'Sense of the House' in the Parliament on the Lokpal Bill. The event reinforced the inviolable primacy of the Indian Constitution. It was also an event of relief and reassurance to the vast and silent majority who constitute India's core civil society.

We support the need for the urgent passage of a well-crafted Lokpal Bill by the Parliament. While the Parliament debates the contours of the Lokpal Bill, the discussion of the details now resides with the Parliamentary Standing Committee on Law and Justice. We, however, believe that the Lokpal Bill is only one small but critical step in the national task of weeding out the plague of corruption in India. This draft Lokpal Bill is intended to address EPISODIC CORRUPTION, but is unlikely to have any significant impact on the DAY-TO-DAY CORRUPTION which is insidious and demeaning.

We, the people, the common individual, seem to have no recourse in our daily life which is vitiated by corruption in almost every sphere of our normal dealings. Almost every interface of the common man with public officials is impaired by corruption, especially in the most routine transactions, such as the grant of 'pattas', issuing of birth/death certificates, utility connections and availing of entitlements amongst several others. Similar cases of continuous daily harassment are widely faced by small and medium scale enterprises (SMEs) and numerous services and manufacturing entities.

The Group wishes to put forward some issues which call for urgent attention and action to make reforms effective and have a positive and perceptible impact on citizens' day-to-day life.

1. The common man (the poor bear the greatest burden) is a silent sufferer because available constitutional remedies remain inaccessible. Several antiquated laws require urgent overhaul to reflect contemporary realities. LAND, JUDICIAL, ELECTORAL and POLICE reforms are most urgently needed. Key recommendations and draft legislation on most of these issues are already in the public domain. It is imperative, however, that legislative reforms be constructively and constitutionally debated in a time-bound and orderly manner and not in uncivil and hostile environments. DISRUPTION, both in the Parliament and outside is socially debilitating and erodes public confidence.

2. It is acknowledged that a strong nexus exists between certain corporates, politicians, bureaucrats and power brokers. This is one of the greatest threats for the Indian economy. It may be worth mentioning that the UK, in July 2011, enacted the 'The Bribery Act, 2010'. The Act makes it illegal TO OFFER, RECEIVE AND FAIL TO PREVENT BRIBERY and extends culpability to the highest levels in an accused corporation. Only if timely and punitive action is taken against both, THE GIVER AS WELL AS THE RECEIVER OF THE BRIBE, will the fight against ground level corruption be won effectively.

3. Even the best crafted legislation will not cleanse the system unless effective REDRESSAL MECHANISMS are put in place. This, however, is not possible given the acute backlog of cases pending in the courts, estimated at over 3.1 crore. India has 10 judges per million population compared to 50 in the UK and 107 in the US. The adage of justice delayed is justice denied is the key reason why the common man is unable to fight against corruption. It is imperative to increase the number of judges and other judicial officers, modernise infrastructure and implement judicial reforms such as creating additional fast-track, specialised courts.

4. While we appreciate and support the need for environmental protection, it should be recognised that there is an impasse on ENVIRONMENTAL CLEARANCES which continues to delay several investment proposals and hamper economic growth. Among other measures, it is worthwhile considering the introduction of an on-line AUCTION process for allocation of natural resources which will provide the much needed TRANSPARENCY and prevent discretionary and irregular practices. Owing to several such impediments, fresh investments are not forthcoming at the pace required for a rapidly growing economy such as ours. Policy uncertainties and delays in approvals are forcing many large corporate entities to seek out opportunities in other geographies.

We wholeheartedly endorse Prime Minister, Dr. Manmohan Singh's statement that economic progress must not be hijacked by internal dissensions. Therefore, India's focus must remain steadfast on economic reforms and growth in order to reduce poverty and ensure adequate job creation. These national challenges cannot be solved by urban protests and posturing.

We are working with a group of professionals who have been specially commissioned by us to study issues of governance and public accountability. The results of this study, when completed, will be made available to Parliamentary Committees as may be appropriate when these issues are discussed.

We wish to reiterate that through URGENT and CONCERTED ACTION by the elected leaders of our country, positive transformation can begin to be achieved.

Sd/-

Mr N Vaghul

Mr Deepak Parekh

Dr Ashok Ganguly

Mr Jamshyd Godrej

Justice Sam Variava

Prof M Narasimham

Mr Yezdi Malegam

Ms Anu Aga

Dr A Vaidyanathan

Dr Bimal Jalan

Mr Keshub Mahindra

Mr Azim Premji

Mr Nachiket Mor

Justice B N Srikrishna

Date: October 3, 2011