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Extend benefit of
feel good factor to Indian IT firms
dismayed by US decision to curb outsourcing UNDP, Microsoft
to give training to
developing world Ban against
spirit of free trade: BJP J&K lays
stress on jobs to locals |
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UTI Bank, SBI
sign ATM sharing pact US biz groups
protest Import duty on
IT, telecom, AC, auto cut
Smile please, immigration
officials
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Extend benefit of feel good factor to New Delhi, January 24 “The feel good factor is definitely here. At least among the businessmen and urban population. It is a cumulative result of a host of factors, including the impressive performance of the manufacturing and IT sectors, good monsoon, and the unprecedented level of foreign exchange reserves”, Mr Memani told ‘The Tribune’ in an interview. He said the world community was looking at India from a different perspective. “Markets in the West are beginning to saturate. China and India are among the biggest markets in the world and investors are keen on cashing in on the prospects,” he said. He said there is a renewed “intensity in the capital markets” which have changed the sentiments of the people. This has been appropriately backed by the high profitability of the manufacturing sector in the recent months. Mr Memani, however, sounded a note of caution and said the real challenge was to ensure that the fruits of these developments reach the poor. “The challenge is to make sure that the benefits reach the 600 million people who are not so affluent. Otherwise the effort will go down the drain as the affluent will become more affluent and the divide between the rich and poor increase. The government and the business will have to be equal partners in this effort,” Mr Memani said. He observed that the feel good factor seems sustainable provided we create a good manufacturing base in the country. While the service sector is registering a robust growth, it is not enough for sustaining the growth momentum. “The challenge lies in creating infrastructure for attracting investment, primarily in the manufacturing sector”. At same time, Mr Memani said, caution soon should be taken against entering a periodic cycle. “A period of downturn or recession is bound to come. So India may fall into a cyclical chain”, he observed. On the recent slew of measures announced by the government, including some major tax breaks, Mr Memani did not agree that announcements were economically not prudent to unveil the measures before the end of a fiscal year. “If the elections were not happening, they (the government) would have brought out these measures anyway. There is nothing wrong if the government of the day wants to encash on the feel good factor. In fact, by these measures the economy will be further charged”, he said. Mr Memani, who was in the External Audit Committee (EAC) of the International Monetary Fund (IMF), said the NDA government has “definitely carried forward with the same zeal as it was launched.” The Ernst and Young India Chairman has been advocating issues relating to corporate governance. He says that audit practices need to be strengthened to discipline erring management. Accounting firms globally are applying themselves to finding solutions to handle certain sensitive issues relating to accounting practices and good corporate governance. Mr Memani said it will take “some time for family-run businesses to comply strictly with the norms of corporate governance”. It will depend a lot on how strongly the regulators such as the Securities Exchange Board of India (SEBI) and Institute of Company Secretaries of India (ICAI) operate and how strong the deterrents are. “Culturally, family-run businesses function in a certain way. It will take sometime, may be five years, before norms of corporate governance are followed in such businesses,” he said. Management consultancy as a discipline has grown enormously in the region in the recent times. Mr Memani envisions a situation of more consolidation with more mergers and acquisitions taking place. “Therefore, there will be good business prospects for management consultants in the next seven to eight years”, he said. Mr Memani is also Vice-President of the PHD Chamber of Commerce and Industry (PHDCCI). He says the role of business associations will have to undergo a change with changing times.
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Indian IT firms dismayed by US decision to curb outsourcing
New Delhi, January 24 Analysts say although the move may not have an immediate impact on the high-profile Indian outsourcing companies, it may enthuse American labour unions to intensify campaigns for a ban on shipping of private contracts overseas too. “We are dismayed to learn about the Bill that restricts off-shoring of work contracted out by the US Government,” said Kiran Karnik, president of the National Association of Software and Service Companies (Nasscom). “This Bill is yet to become a law, and we hope that wiser counsel will prevail,” Karnik said here. “Such a Bill is not in keeping with the increasing globalisation of trade, which benefits all countries, and is contrary to the spirit of free trade being promoted by the World Trade Organisation and long espoused by the USA.” In a major blow to India’s booming outsourcing industry, the US Senate on Thursday night passed a Bill banning US companies from shipping government contracts overseas. The Bill, prohibiting private American companies from shifting tech jobs abroad, was part of the $820 billion spending bill leftover from last year, clearing it for President George Bush’s signature. After the presidential approval, the Bill is likely to become the first federal law that limits companies from performing contracted work outside the USA since outsourcing became a potent political force a year ago. Karnik said the Bill was limited to the period up to September 2004 and that it only covered contracts by government departments. “The business impact of such a move on Indian IT industry will be very small, as the share of US federal government contracts in exports of IT software and services from India is less than 2 per cent,” he said. The lobby group chief said that in an era of global free trade, protectionist measures like shipping of jobs overseas to cut costs were unlikely to last long. Prakash Gurbaxani, chief executive officer of Bangalore-based TransWorks, one of India’s leading mid-size back office service providers, said the move would hit American companies more than the Indian firms. “I see a greater impact of the decision on the local US companies who get larger share of American government contracts,” Gurbaxani told IANS over telephone from the company headquarters. “From the long-term perspective, yes, it is a significant decision for the Indian companies but its immediate fall-out on the revenue of Indian technology companies would not be so significant.” TransWorks, a division of India’s diversified business conglomerate Aditya Birla Group, runs a 400-seat business outsourcing facility in Mumbai and another 450-seat centre in Bangalore. The company is planning to set up another centre in Bangalore. India’s vast pool of English-speaking manpower, coupled with its educational system and training programmes, have helped transform the country into a global outsourcing superpower. The rapidly growing IT industry has virtually turned the country into an electronic housekeeper to the world, taking care of a host of routine activities for multinational giants. India’s IT market has grown from $1.73 billion in 1994-95 to $16.5 billion in 2002-03, accounting for three percent of gross domestic product last year. But as global recession tightens its grip and job losses in many economies become a norm, India's cost-effective software army is increasingly becoming the envy of foreign lands. The state of Indiana in November dropped a $15.4 million outsourcing contract for IT services with an Indian software company. The move was part of an initiative launched by Governor Joe Kernan to protect local companies and jobs.
— IANS
What they say
This would worsen prospects of multilateral negotiations in trade: IT Minister Arun Shourie We do not have any US government clients at this point and therefore the law does not affect us: NIIT spokesperson. It will not have any material impact on Infosys since we are not involved in government projects at this point: Krish Gopalakrishnan, Chief Operating Officer, Infosys This is unfortunate and unwarranted. Although normally such provisions are not changed, perhaps the US President would reconsider this before signing the bill: Anand Mahindra, president, CII Just a ‘political BPO football game’ as the US Presidential elections is round the corner: ITES No impact of US Senate move to bar subcontracting: Wipro
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UNDP, Microsoft to give training to
United Nations, January 24 UNDP’s Administrator Mark Malloch Brown and Microsoft Chairman Bill Gates made the announcement yesterday at the annual World Economic Forum in Davos, Switzerland. “We know that information technology, used in the right way, can be harnessed to help achieve the Millennium Development Goals,” Brown said. “We look forward to exploring opportunities with Microsoft to see how technology can be made to deliver on its promise in development.” “Technology is a powerful tool that can help transform lives, economies and societies”, Gates said. The agreement is aimed at helping developing countries achieve the Millennium Development Goals, a set of time-specific targets agreed to by the world’s leaders that include halving extreme poverty by 2015. Under the agreement, UNDP and Microsoft will identify opportunities to work together on programmes using UNDP’s development experience and Microsoft’s technology products and skills. The two organisations are already collaborating on a pilot project to provide technology skills and access at 16 centres across Afghanistan, with the aim of building a skilled pool of information technology professionals in the country. Other projects have been identified in Egypt, Morocco and Mozambique.
— PTI
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Ban against spirit of free trade: BJP New Delhi, January 24 “The decision is against the spirit of free trade and globalisation which is meant to benefit the consumer and generate employment throughout the world,” BJP spokesperson Prakash Javadekar told newspersons here. Terming the US resolution as an “election year compulsion”, Mr Javadekar said the resolution would become a law only after the US President signed it and it would prove to be a ‘losing proposition’ for America in the long run. Mr Javadekar further said the IT industry would make good the losses by foraying into markets in Europe and Afro-Asian countries. “The outsourcing is not confined to IT and service sectors but is in the health and agriculture areas as well,” he
added. The BJP spokesperson said the Indian economy had displayed resilience time and again that it was not dependent on the USA like South East Asian economies whose GDP depended on exports to the USA. Indian strength was in its large internal market propelled by one billion people, he remarked.
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J&K lays stress on jobs to locals
Jammu, January 24 It was decided that the industrial policy of 2004, approved last evening by the state Cabinet, would remain valid up to March 2015 when it would be reviewed, Mr Sharma, who holds the portfolio of industries, commerce and transport, told journalists here. He said the government would use the policy to enable more local people to get jobs in industries. If specific skills were not available in the state, special training would be organised to train local youth, he added. Maximum local
employment in industrial units would be a condition in approving new industrial units, Mr Sharma said. The government would also like to ensure that the incentives and subsidies reached the genuine industries without much loss of time, he
said. — PTI
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UTI Bank, SBI sign ATM sharing pact
Mumbai, January 24 Customers of these banks would be able to use the combined network of close to 4,000 ATMs, which include those of SBI’s seven associate banks, a UTI Bank press note said here today. “Having invested in building a sizeable ATM network in the country, our bank is keen to ensure wider utilisation of the network”, UTI Bank Chairman and Managing Director P. J. Nayak was quoted as saying. The private sector bank has over 1,130 ATMs spread in 106 cities and towns. SBI group has 2,850 ATMs.
— PTI
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US biz groups protest
New York, January 24 The US Senate on Friday passed the much-delayed omnibus Appropriations Bill totalling $328 billion, containing provisions limiting agencies receiving federal funding from outsourcing subcontracts to foreign countries. The Bill is like the annual budget and lays out the annual funding for federal agencies. Business groups are understandably unhappy about the move. “We want to grow the worldwide economy and create jobs. Isolating ourselves is not the way to do it,” director of communications from Business Roundtable Tita Freeman said. In the last year, many states in the country have tried and failed to get this kind of measure approved after a major outcry.
— IANS
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Import duty on IT, telecom, AC, auto cut
New Delhi, January 24 The government also lowered to 10-15 per cent the import duty on 32 raw materials meant for manufacture of specified goods. Airconditioners, refrigerators, automobile and ball bearings manufacturers are the major gainers. The cuts were announced last evening, taxindiaonline.com said without mentioning the customs duty levied on these items earlier. As many as 25 telecom and IT-related items will now attract only 10 per cent customs duty. These include capacitors (excluding paper capacitors and power capacitors), ferrite parts including memory cores and ferrite magnets, switches with contact rating less than 5 amperes at voltage not exceeding 250 Volts AC or DC, connectors, magnetic-heads (all types), deflection parts (EHT/LOT/FBT transformers, line driver transformers, deflection coil/yoke, linearity coil and width coil), ceramic/magnetic cartridges and stylus. With these changes, the IT and telecom sector has almost got the complete package. Now, whatever is left is likely to be covered in the Budget to be tabled by June-end, the site said. For the manufacturing sector, customs duty on catalysts has been slashed to 15 per cent, on Bis-phenol A and Epichlorohydrin to 10 per cent, on non-alloy pig iron and seamless steel tubes SCM 415H for manufacture of piston rings to 10 per cent.
— UNI
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Markets closed on R-Day
Mumbai, January 24 |
bb
Smile please, immigration officials It is universally accepted that the pilots’ main concern is safety of passengers. Hostesses’ win hearts and fill stomachs of passengers and immigration officials make passengers feel at home. Almost all over the world, the immigration officials wear smiles on their faces and greet passengers with a ‘welcome to you’. But in India, the situation is contrary. Immigration officials treat passengers/tourists as if they are possible criminals or terrorists or hijackers. They glare or frown at tourists and then start examining passports to detect some kind of loophole. The new civil aviation policy is on the anvil. “The first thing that our policy makers should do is to reduce the cumbersome processing of documents at immigration counters,” says Dr S.S. Sidhu, who has been intimately connected with civil aviation and tourism for about two decades. “Minor gestures to arriving passengers at airports will make vital difference of making tourists say that they will come again instead of never again,” says Dr Sidhu, former secretary-general of the Montreal-based International Civil Aviation Organisation (ICAO). Regular tourists have often said that they are pleased with friendliness shown to them on board the flights of Air-India and the Indian Airlines. But they are considerably distressed at immigration counters and cabbies’ rude behaviour. “Much can be achieved in vital areas of aviation and tourism if over-all functioning at airports is improved,” says Dr Sidhu. Dr Sidhu's latest book “Aviation and Tourism — Synergy for Success” carries important observations on the subject. The international airports at Chennai, Bangalore, Hyderabad, Calicut, Goa and Ahmedabad will shortly have duty-free shops, owned by Dubai-based Flamingo International. But much upgradation needs to be done at the two busy international airports of Delhi and Mumbai. Not only the range of articles at these airports is limited but several passengers have complained that the quality is far from satisfactory.
Agra airport The UP Government is planning to build an international airport near Agra. “We have sent the proposal for clearance to the Civil Aviation Ministry,” said UP’s Minister for Tourism Naresh Agarwal. The idea is good as Taj Mahal is a big attraction. It will reduce congestion at the international airport in Delhi. But until this happens, the authorities should expand the existing Agra airport so that more flights can operate on this route. |
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The ‘feel good’ factor in the economy
is discernible. But unless it percolates beyond the urban metropolises to the
rural countryside, there could be dangers of serious social imbalances in the
country, says Chairman and Country Managing Partner of Ernst and Young India K.
N. Memani.
United Nations, January 24
(
