Karnataka&rsquo;s industries minister was recently on a tour along with senior officials to Japan and Singapore to attract investors to the Global Investors&rsquo; Meet (GIM) that Karnataka is planning to hold on June 7 and 8 this year. Speaking to the media after his return, the minister forgot that he had to talk about the investors and investments expected. Instead, he ended up discussing his fascination with Japan&rsquo;s Bullet Train and Singapore&rsquo;s Sentosa Island. He went a step ahead and said he would bring bullet train to Karnataka, even though that is the Centre&rsquo;s prerogative. He insisted that he would still do a feasibility study for bullet trains in Karnataka.

Inviting investments?

Business Standard

Global markets continue to be unsettled and challenged in terms of economic growth, particularly in Europe and, to some extent, in the United States. In the developed part of the world, we are seeing a lot of stress. The UK, for instance, has gone into recession. So has Spain. There are challenges. In the developing part of the world, there is still growth.

There's less growth, but more inflation: Harish Manwani

The chairman of a public sector bank faced an unusual request from a journalist recently during the bank&rsquo;s press conference to announce its financial results. A journalist jokingly asked him whether he would be willing to extend home and car loans to reporters at an interest rate of five per cent since the Reserve Bank of India (RBI) had cut the policy rate. &ldquo;Even RBI doesn&rsquo;t permit us to offer loans at that rate. If I do that you will ask questions tomorrow. So, you stop asking questions and I&rsquo;ll give you cheaper loans,&rdquo; he replied.

A question of interest

Most educated Indians have a working knowledge of English and take it so much for granted that they find it hard to understand the difficulties of non-English-speaking investors. This was comically highlighted when a company from mainland Europe that was setting up operations in India called a press conference. The chief technology officer (CTO) who made the presentation was French and, predictably, uncomfortable in English. At one point, he began to answer questions in French. This prompted one journalist to ask questions in Hindi, setting off a four-way dialogue. The Hindi questions were translated into English by the company&rsquo;s Indian representative, the CTO replied in French, and his answers were translated back into English by yet another official for the benefit of the audience.

Communication gaps

Hindustan Unilever reported good numbers for the fourth quarter and for 2011-12, despite commodity inflation and currency fluctuations. During a media interaction, Managing Director and Chief Executive Officer Nitin Paranjpe outlined the company's strategy over the coming quarters when the environment around is expected to remain volatile.

Our strategy is to build great brands and offer value: Nitin Paranjpe

The edits &ldquo;The shadow of the guns&rdquo; and &ldquo;Hostage to black mail&rdquo; (April 27) have some lessons in common. When a major catastrophe occurs, the decisions taken by the government set precedence for others. The Bofors scandal was the first case of huge corruption in the hallowed precincts of the defence forces but the long-winding process of investigation and prosecution did not result in any conviction. This has emboldened vested interests to exploit the system. Consequently, fresh incidents of corruption keep cropping up whether it is the 2G spectrum scam or Tatra trucks case. Similarly, if the then government had not bowed to the dictates of the kidnappers of Mufti Mohammad Sayeed&rsquo;s daughter, terrorists and Maoists today would not have been so convinced of the success of employing hijacking and kidnapping as pressure tactics.

Letters: The power of precedence

This refers to the report on the Banking Law (Amendment) Bill to increase the cap on shareholders&rsquo; voting rights from one per cent to 10 per cent in public sector banks and from 10 per cent to 26 per cent in private sector banks (&ldquo;Investors may sway state-run banks&rsquo; boardroom dynamics,&rdquo; April 29). The government should have instead uniformed the voting rights cap across public and private sector banks. Moreover, a single board seat to the stakeholder would make no difference to the outcome of board decisions, though one can now expect more enlightened proceedings in the boardroom. It has also been stated, inter alia, that important decisions like farm loan waivers should be strongly debated. The truth is that the government has always ignored bank boards while taking such decisions. Even the Reserve Bank of India (RBI) was not consulted before the last farm loan waiver that amounted to more than Rs 67 lakh crore was announced.

Letters: Banking on boards

&ldquo;The assessment loses credibility when it becomes prescriptive and seems to push the envelope for some particular investments.

Is S&P's negative outlook justified?

The launch by Ranbaxy last week of Synriam, a new drug to treat malaria, is an important milestone. Having made its name by manufacturing generic (off patent) drugs cheaply, India&rsquo;s pharmaceutical industry has struggled to achieve original drug discovery since the Uruguay Round of trade negotiations signalled the onset of product patents in India. It began to be realised, in time, that there was more to drug discovery than low-cost science graduates and PhDs.

Ranbaxy's finest hour

An Empowered Group of Ministers (EGoM) on Saturday chose not to reopen the question of what Reliance Power should do with the excess coal from its Sasan ultra-mega power plant (UMPP) in Madhya Pradesh. The EGoM had, in 2008, used its discretion to allow Reliance Power to divert coal produced from Sasan&rsquo;s captive mines to another power project it owned in the same state, Chitrangi.

Releasing the captive

A senior bureaucrat in the ministry of finance recently sold a home he owned in the National Capital Region after receiving rent on it for more than two years from one of the country&rsquo;s top industrial houses. The sale was prompted by investigating agencies that discovered the rental agreement between the bureaucrat and the private corporation &mdash; though Raisina Hill sources say the matter is unlikely to end with the sale of the house.

Sell out?

In his article &ldquo;The new Indian normal&rdquo; (April 13) Akash Prakash has defined two alternative scenarios for the Indian economy in the medium term. His best-case alternative is nine per cent GDP growth, four to five per cent inflation, 38-39 per cent of GDP investment, 25 per cent corporate earnings growth and declining interest rates. His worst-case alternative is seven per cent GDP growth, six to seven per cent inflation, investment languishing (at the current 34 to 35 per cent) and interest rates failing to come down significantly. The reality will depend upon what tens (if not hundreds) of thousands of Indian entrepreneurs and tens (if not hundreds) of thousands of mostly foreign investors do individually &mdash; and is likely to be something in between. This is not bad at all compared to what is likely in the rest of the world.

Letters: Boom and doom

Chief Economic Advisor Kaushik Basu was reportedly ticked off by a senior member of the government for his comments about the lack of reforms in India till the 2014 elections during a lecture at the Carnegie Endowment in Washington. But he showed no signs of the tensions when he returned to his North Block office a few days later, having explained his &ldquo;misquotes&rdquo; to Prime Minister Manmohan Singh. A close associate said Basu relaxed by watching old, Raj Kapoor-starrer Chhaliya. At any rate, he can count on getting his &ldquo;freedom of expression&rdquo; back when he returns to Cornell later this year.

Talkie after talk

Apropos T N Ninan&rsquo;s column &ldquo;What&rsquo;s new?&rdquo; (Weekend Ruminations, April 28), Bofors was re-investigated under the BJP regime too, and it could not find anything to prove the charges of pay-offs. Courts in Malaysia and Argentina have not found any wrongdoing either. After 25 years, the issue has raised its head in Parliament and is generating more heat than light. To the question Ninan raised, the answer can only be &ldquo;nothing&rdquo;. So, why this heat? Mere hatred, because the Opposition cannot find anything else to keep it going.

Letters: Gunning for nothing

Just before global credit rating agency Standard &amp; Poor&rsquo;s downgraded its outlook on India, the International Monetary Fund lowered the country&rsquo;s growth projections for 2012 to 6.89 per cent. The indisputable fact is that the economic reforms need to progress on a war footing. The state of affairs in the Indian polity is pathetic and its credibility is at its lowest ebb. Corruption is rampant almost at all levels and it should not come as a shock that the country holds the dubious distinction of being among the world&rsquo;s most corrupt nations. The point is that the government lacks the political will to implement economic reforms and fight corruption.

Letters: Get going on reforms

The High Commissioner of a western country who has served in India before, recently called on Finance Minister Pranab Mukherjee. After talking for a while, the envoy observed that things had changed a lot in India since he was last here in 1983. &ldquo;1983...well, not so much has changed,&rdquo; said the finance minister contemplatively. &ldquo;I was the finance minister then; I am the finance minister now.

Not much change since 1983

After adverse predictions regarding this year&rsquo;s monsoon by some global weather agencies, the forecast of normal rainfall by the India Meteorological Department (IMD) seems to have come as a relief for a government combating high food inflation. The IMD projects total rainfall in the June-September monsoon season as being 99 per cent of the long-period average.

Fearing El Nino

India&rsquo;s export-oriented information technology (IT) services industry is so strongly coupled with the global economy in general and developed economies in particular that it has come to faithfully reflect global ups and downs. But the swings have been staggered and modulated by the need for firms in developed economies to beat recession with productivity gains, resulting in a continued pipeline of orders for Indian IT.

The volatility of IT

The National Democratic Alliance (NDA) government made all efforts to bring the alleged Bofors scam guilty to the book, but the successive Congress-led governments tried to &ldquo;kill&rdquo; the case, Leader of Opposition in the Rajya Sabha Arun Jaitley tells Karan Thapar on CNN-IBN&rsquo;s Devil&rsquo;s Advocate show.

Congress govt 'killed' the Bofors case: Arun Jaitley

The quarter ended March 2012 has not been stellar for many Indian IT companies. As Table 1 shows, Infosys did poorly, and even market leader TCS reported sluggish quarter-on-quarter revenue growth. Is there a trend towards slower or more volatile growth in the sector? Infosys, in its much-read guidance, suggested that it was going after &ldquo;non-linear&rdquo; growth, with productivity per employee increasing. Some suggest this means temporarily skewed results, following a focus on heavy, procyclical sectors like banking, financial services and insurance (BFSI). Yet, as Table 2 shows, net profit growth has been volatile for the past three years.

StatsGuru: 30-April-2012

It is good to know that the leadership of the United Progressive Alliance thinks so highly of the honour of sitting in the Upper House of Parliament that it imagines it as broadly equivalent to a Bharat Ratna. Or at least, that is what observers might conclude, given that it appears the government has chosen to answer a long-standing demand from India&rsquo;s more vocal cricket fans that Sachin Tendulkar be given the country&rsquo;s highest civilian honour by nominating him to the Rajya Sabha. Certainly, there don&rsquo;t seem to be many other reasons for the nomination. Unless, that is, the government has decided to aid the transition in India&rsquo;s cricket team by suggesting subtly to Mr Tendulkar that he retire from international cricket in order to serve his country better.

Business Standard

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