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Monday,
August 12, 2002, Chandigarh, India  
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Vanishing IT trainers, perishing profits
Start early for a
good retirement
Q: My husband was granted Shoryachakra (Posthumously). I am getting family pension from the Army which is exempt from Income Tax under Section 10 (18) of the Income Tax Act, 1961.
No early revival in sight
Frustrating experiences of online shopping |
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Vanishing IT trainers, perishing profits The demographic curve of computer-training institutes is all skewed in Chandigarh and vicinity. Their mortality rate has been high. Then this is just a mirror reflection of whatever is happening in India. Just a year and a half ago there were nearly 200 computer-training institutes in Chandigarh and its satellite towns. Today half of those are no more. The ones that have survived are barely managing to pull through. Some of the franchisees of erstwhile big names have put up their shutters completely; others who had two or more establishments in the city have merged their operations into one concise unit ostensibly to cut costs. For everyone in this business all that is happening is no less than a nightmare.
Vanishing act
Not long ago, Wintech and Zap had hit the headlines for all the wrong reasons. That was just the start of the meltdown. SSI, one of the leading players, last week wound up its branch office at Sector 9, Chandigarh, as a ‘policy decision to merge’ being implemented throughout India. Similarly Asset International’s Sector 9-based franchise vanished without a trace like the proverbial “horns from the donkey’s head.” “A classic case of IT slowdown’s impact. The reasons are obvious,” says Harry Saundh, director and centre head, Asset International’s Sector 34 franchise. The spill over effect of the global economic downturn on the software industry, filtered to the IT education segment resulting in a substantial loss of momentum and shrinkage of the market. “The US slowdown and 9/11 did have the students deferring their decision of taking up IT courses,” avers Pramod Khera, Managing Director, Aptech Training Limited. “Fly-by-night operators have not been able to sustain themselves as the students have become discerning about the institutes they wish to join,” he adds. However, it wasn’t only the fly-by-night operator segment that was impacted by the overall recessive trends. Even companies with quality orientation and reasonable spread suffered losses in terms of revenues and market share. As the student community deferred the IT education decisions, enrolments dwindled. Consequently, they floundered.
Courses in vogue
An instructor in one of the IT training institutes confides that counsellors ‘show big dreams’ to probable students to enrol them and just five per cent of those who register are actually serious. Most of the courses are not utilitarian; the training centres approach is not proper and after passing out a student stands flummoxed. P. Rajendran, COO, NIIT Ltd, says that in such confusing times students prefer brand names they can trust and rely upon. “It is important to realise that students need to take the time to get a thorough grounding in the basics before learning about various new technology skills sets. A strong emphasis on fundamentals, software engineering skills is extremely important in building a solid foundation before jumping on to flavour of the month courses,” he opines. Dr S.C. Vaidya, Dean, Faculty of Management and Commerce, Panjab University, Chandigarh, views that disorientation prevails because computer teaching institutes are not trying to demystify computers. “They rather try to complicate the matters by tailoring courses involving VB, C++, Java and all hi-fi programming stuff. The student comes out with just skimming the subject with no real knowledge. This is national wastage.” Vaidya says. He also opines that with the introduction of computers in school education and PCs getting ubiquitous at homes most of the students have started learning on their own making a dent in the computer teaching shops.
What to learn
World over the IT industry is moving towards the software factory model. Hence, a large number of programmers are required at the lower level. This is where a lot of students who pass out from computer training institutes are getting jobs. In addition, there is a growing need for professionals who are skilled in enterprise computing and are able to integrate enterprise-wide applications. Multimedia too is showing growth and the professionals required in industries like animation, games development etc. are on the increase. In India, there is also a growing need for professionals for the IT-enabled services. BPO and call centre related jobs are available in most of the larger cities. “Students prefer job-oriented courses. Specialised technology based courses are not being preferred, except for multimedia and networking. Also, final year students and graduates are joining courses in larger numbers compared to the 10+2 students that were enrolling earlier. Larger number of working class, government employees and school students are also joining IT awareness and programming courses,” Khera says.
Faculty and self-help
There are some who, terrified by the whole upheaval, preferred to study all by themselves and have made it big too. Meet Aditya Tandon, a budding computer programmer who has more than three self-developed programs under his belt, the most famous of them being Accent, a diction correction software. “If a student is serious he can learn the programming skills himself. Everything is given in the books. Even the instructors do it that way. I too have learnt Visual Basics all by myself. It’s just a herd mentality in the class,” he says. The only bright side of all this churning has been that course wise the market seems to be settling into a phase of maturation. Earlier, with new courses propping up even before one could say abracadabra, faculty was hard to get. Most of the time fresh pass outs doubled up as faculty members at the institutes. The situation is ‘under control’ now. Irrelevant courses have been done away with. Plenty of engineers are passing out of colleges to fill the vacant slots at computer teaching institutes. However, salaries have come down with new instructors being confined to 5,000-7,000 bracket.
Fee structure
The fee structure for the same course varies from institute to institute. NIIT, for example, charges Rs 15,000 for a six months course that includes introduction to computers, MS Office, familiarity with Internet, programming approaches and techniques, implementing database design using MS SQL server 7, HTML using MS Frontpage, Java programming etc. The same can be done at Rs 10,000 from one of its rival institute. Rajendran from NIIT doesn’t deny it: “Comparison does lead to perceptions regarding the higher cost. We are continuously investing in instructional R&D, trained faculty, course material creation and infrastructure for education delivery. This gets reflected in the cost and quality of the courses.”
Market share
According to the recent Dataquest Top 20 ranking of the IT education market, the premier players are NIIT (with 2001-02 revenues of Rs. 429.2 crore), Aptech (Rs. 270 crore), SSI (Rs. 152.3 crore), CMC (Rs. 44.5), Pentafour (Rs. 44.4 crore), Jetking (Rs. 43.5 crore), C-DAC (Rs. 37 crore), Tata Infotech (Rs. 34 crore), IIHT (Rs. 26.6 crore) and CMS (Rs. 20.7 crore). There is a huge gap between the number one and the number two players in the market. Aptech, on the other hand, quotes a Merrill Lynch report (till December 2001) that shows it to top the chart vis-à-vis growth rate. Irrespective of whatever statistics indicate its clear that the IT training action is confined to the top three players, with organisations lower down the chain logging in modest revenues. Per cent wise, the top three players share nearly 77.5 per cent of the market while other seven players having been confined to 22.5 per cent share, approximately. To conclude, the current market picture reflects the new equation that now drives the IT training industry. Queues have dwindled and the fittest are surviving. But many institutes are not ready to accept the truth. As this correspondent tasted it first-hand: “Yes, we have closed one of our outlets in Chandigarh. But what difference does that make? Our other franchise is functioning,” a centre head from a glory-earlier-in-tatters-now institute parries. Difference, did he say? Plummeting profits and the company’s recession-beaten image tells it all and in a better way.
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by Naveen S. Garewal
Start early for a good retirement Retirement plans Financial planning Time to start Investments Medical insurance Investment in real estate Gold and bank securities Retirement plans |
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by R.N. Lakhotia Q: My husband was granted Shoryachakra (Posthumously). I am getting family pension from the Army which is exempt from Income Tax under Section 10 (18) of the Income Tax Act, 1961. 2. The details of income for the financial year ended March 31, 2002 are as under: Family Pension from 1.4.2001 to 31.3.2002 Rs 1,19,412. Interest on monthly income scheme of post office and on bank deposits Rs 34, 078. Total: Rs 1,53,490. Kindly advise as to whether I have to file Income Tax returns or not. — Shakuntla Devi, Shimla Ans: On the facts mentioned by you the Income-Tax return is required to be filled by you because the taxable income is in excess of Rs 50,000. Q: I am a government employee in Himachal Pradesh. My total salary income in the year 2002-2003 will be Rs 3,28,000 and after deduction of Rs 32,800 on account of HCA, HRA and interest of HBA my income will be Rs 2,95,200 only. Please clarify which income of Rs 3,28,000 or Rs 2,95,200 will be subjected to standard deduction and what will be the amount of S.D. in this case. — Dr G.R. Sharma, Bilaspur Ans: Standard deduction is permissible to salaried employees from the net salary income (Salary minus exempted HCA, HRA, etc.). The amount allowable as standard deduction is Rs 25,000 for salary income between Rs 1,50,001 to Rs 3,00,000. In case the salary is in excess of Rs 3,00,000 the standard deduction would be Rs 20,000. The deduction of interest on HBA is to be allowed after computing net salary income (salary + perquisites — HRA deduction — standard deduction).
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by J.C. Anand
No early revival in sight Erratic monsoon rains causing drought in large parts of Northern India and gloomy reports of bankruptcy in the corporate section in the USA were bound to have their impact on the Indian stock markets. Last month, the Sensex was at 3279.71 points when the market closed on July 15. Last week, the market closed at 2976.34 points registering a loss of 303.47 points (9.2 per cent). If on one day, the Sensex is up by 20 points, the next day it is down by 25 points. Of the ten worst corporate bankruptcy in American history, five of them have come in recent months. When the stock market suffers a sharp decline, almost every corporate sector suffers. Technological shares and Tata Group shares have been particularly hit badly. During the last one month, while Infosys was down by 2.5 per cent, Wipro by 8.5 per cent, Satyam by 15.83 per cent and NIIT by 39 per cent. Following Tata Finance Imbroglio, almost all Tata group shares have sharply declined, in spite of the fact that Tisco and Telco had declared good results. Some shares which have held their own in the declining market are Nestle, ABB and Larsen & Toubro. The multinational pharma shares have also moved down substantially. Reliance Group shares are almost at their lowest for many months. One reason for Larsen & Toubro’s good performance in the stock market is the news that the UTI has decided to disinvest its 10 per cent stake in L&T. I do not expect an early revival in the stock market for a number of reasons. The drought (which is worst since 1988) is bound to affect the performance of the corporate sector. The fall in demand and increase in cost of production are bound to affect the sales and profitability of the corporate sector. If the monsoon rains do not revive in Northern India, the rabi prospects may also be affected. Already the expert rating agencies have cut down the economic growth rate by almost 1 per cent. Another reason for stalemate (or decline, as the case may be) in the stock market is the political distemper created by the major political parties. The political parties in the Opposition are most anxious to find out one reason or another to prevent the Parliament from its normal functioning. Another reason for drought in the stock market is the diversion of investable funds in RBI 8 per cent Relief Bonds which are tax free, but these have to be held for a period of five years. In case the government issues 7 per cent tax free bonds (as announced by the Finance Minister), there is bound to be further diversion of investable funds to these bonds. A report states that there will be no investment limit on these new tax-free bonds which will have a lock-up period of six years and will be non-tradable. It would be possible, however, to bequeath or gift these bonds to a close relative as defined under the law. |
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by Pushpa Girimaji Frustrating experiences of online shopping Thanks to the internet, sitting in your home or office, you can buy anything from books and compact discs to clothes and jewellery from anywhere in the world. You can plan your travel itinerary, make hotel reservations, buy rail and air tickets. And in all probability, you will get many of these at a much lower price on the Net. However, e-commerce is still new and not every consumer has had a good experience while shopping on the Net. To find out the problems faced by the consumers while shopping online, Consumers International (CI), a federation of consumer organisations worldwide, conducted an international survey: Researchers from 15 consumer organisations from 14 countries, placed over 400 orders for goods and services with websites around the world. They bought books, CDs, DVDs, computer mouse or accessories, clothes, food and made hotel room booking. They then recorded their experience of using the site, ordering and receiving goods and then cancelling or returning them for a refund. Even though India is not part of this survey, the research will give Indian e-shoppers too an insight into the problems that they may face while shopping online. In fact the CI had conducted a similar survey on 1999 and says compared to that, there have been some improvements, but Internet still failed to provide a reliable environment in which the consumer could shop with confidence. Pointing out that there are still too many instances of retailers flouting consumer protection laws and guidelines and of other bad practices, the CI concludes that consumers must still shop online with caution. Listing some of the problems encountered by the researchers, the CI points out that many sites failed to give a clear total cost of the product or give consumers information about key terms and conditions of the contract and state which countries they did business with. Says the CI: Having placed an order, Internet shoppers still cannot be certain that their goods will arrive. We found that 20 out of 340 items (6 per cent) ordered did not turn up. In many cases, that was because they were out of stock, but the customer was not informed of it. . In six out of the 20 cases, the researchers were charged for goods that never arrived and had to request a refund. And in 9 per cent of the cases, retailers failed to send a refund for goods that had been returned to them. Where refunds were given, they took anywhere between 19 and 60 days to arrive. The survey also found that even though on an average it took 10 days for the items ordered to be delivered., there were many that took as long as 30-60 days. In over half of the cases, money was taken before the goods arrived. Only a minority of retailers waited until goods were dispatched before billing the customer. The survey also revealed that only a minority of sites included the geographical address of the retailer, information on consumers’ right to withdraw from the contract or information on after-sales guarantees. Concludes the CI: Business has a long way to go both in improving the information given on the site and in reliable fulfillment of the orders. The CI also quotes specific cases to show the frustrating experiences of some of their researchers. One of them in the UK, for example, ordered a computer mouse. The site had an online order-tracking system and she could see that the retailer was awaiting delivery of the mouse from the supplier. The site, however, had not warned of any availability problems when the order was placed. Two weeks hence, the mouse was still out of stock, so she cancelled the order. The retailer had debited the amount from her credit card on the day the order was placed and the site did not specify the refund procedure. So the researcher had to send e-mails to several addresses on the site before she could get the refund. Similarly, another researcher in the USA who made a hotel room reservation, found cancellation a time-consuming and complicated task. The site had given a toll-free number for cancellations, but every time he called he was put on hold and then disconnected. He had to then call the number meant for reservations, and was subsequently given a different website on which to cancel the booking, which he did. On the basis of its research, the CI advices consumers to first check: (a) the identity of the retailer, his postal address, e-mail address and telephone number.(b) when and how an order can be cancelled or goods returned for a full refund and whether there are any restrictions on cancellations and refunds (c ) complaints redress policy and procedure (d) total cost of the product, including taxes and delivery (e) time taken for delivery (f) after-sales service, warranties and guarantees (g) site’s security measures to ensure the safety of the information sent to them. (h) the company’s privacy policies and (I) when the payment is required to be made. Says the CI: As far as possible choose to pay only after delivery. |
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Inflation at 2.85 pc FII net sellers Kinetic Zing Telco sales up Bid for EIL NIIT promoters |
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