Now, VCs to invest in rural tech

Venture capitals (VC) in India, which traditionally invested in urban segments or technology sector, have begun investing in rural-centric technology firms. Avishkaar India Micro Venture Capital Fund, Acumen Fund, and Rural Innovations Network (RIN) are showing increased focus on rural markets.

A non-profit investment firm E+Co, with investments in 28 countries, plans to begin operations in India. The firm with $183 million capital mobilised and $24.6 million investment portfolio will focus on clean technology.

“India has very few funds that look at investing in rural India. But what’s heartening to see is that the sector now has a few options and entrepreneurs can approach for investment,” said Arun Natarajan, MD and CEO, Venture Intelligence.

Most of these VCs get their funding from philanthrophic activities. RIN gets funding from donors such as HIVOS, The Lemelson Foundation, Sir Dorabji Tata Trust, and The Rockefeller foundation. Whereas Google, Gates, Cisco and others form the investor base for the Acumen Fund.

Acumen India has been in the country since 2005 and has invested in 12 entrepreneurs. The focus is to fund innovative businesses that target the poor as consumers and demonstrate to the world the sustainable ways of bringing access to critical goods and services such as healthcare, water, housing and energy to low-income households.

So far, Acumen India’s total approved investment is $17.4 million.

“Our capital commitments range from $3,00,000 to $20,00,000 in equity or debt with a payback or exit in roughly five to seven years. Our average investment is about $1 million. We also do follow-on investments as our portfolio companies’ scale — leading to anywhere up to $4-5 million exposure to a given company,” said Clara Bardy, India Portfolio Associate, Acumen Fund.

October adds highest ever mobile subscribers at 10.42 million

During these times of cutbacks there's one thing which Indians are buying in abundance-mobile connections. During the month of October the country added the highest-ever addition to the mobile subscriber base at 10.42 million taking the total number of mobile users to over 325 million, according to the data released by the Telecom Regulatory Authority of India (Trai). India already has the distinction of being the world’s fastest growing telecom market.

During the month of September, the total (GSM, CDMA and WLL) addition was of 10.07 million.

However, the net addition of about 10.29 million users (wireline and wireless) during the month, could have been higher but for the decline in the landline user base. The landline wireline segment saw the subscriber base falling to 38.22 million in October from 38.35 million in September. During September the net addition stood at 9.79 million. The total number of both wireless and wireline users now stand at 363.95 million, Trai said.

With this, the overall tele-density stood at 31.50% at the end of October against 30.64% in September. The total broadband subscriber base rose to 5.05 million by the end of October 2008 from 4.90 million in September.

In terms of break-up of the mobile subscriber figures, during October the GSM players added their highest-ever addition of around 8 million taking their user base to 242 million. Projections are that by the year end the total GSM user base would stand at 250 million.

Commenting on the record growth, TV Ramachandran, director general, Cellular Operators Association of India had earlier said, “the ongoing, vibrant growth of the GSM sector that with the cumulative GSM subscribers already at an estimated 242 million in October, it is clear that the GSM sector would by itself cross the historic 250 million milestone by December 2008.”

Bharti Airtel, the country's largest telecom operator added its highest-ever 2.7 million customers during October, which is a 3.51% growth compared to the month of September. The world’s third largest in-country operator has a market share of 33.23%. It added the largest number of operators in the Rajasthan circle, adding a 350,000 subscribers during the month.

Vodafone Essar, the country's second largest GSM operator with a market share of 23.49% added around 2 million customers in the month registering a growth rate of 3.81%. The company recorded a highest addition of around 266,000 subscribers in Eastern UP circle.

The state-owned BSNL, the country's second largest telecom player with about 670,000 users, during the period registered a growth of 1.71% over the previous month. The telco has a market share of 16.5% in the GSM subscribers. Among the CDMA operators, Reliance Communications, which is the largest operator in the segment, added 1.7 million subscribers.

Fast dialling

• Total number of both wireless and wireline users now stand at 363.95 million
• With this, the overall tele-density stood at 31.50% at the end of October against 30.64% in September
• The total broadband subscriber base rose to 5.05 million by the end of October 2008 from 4.90 million in September.

8 Indian supercomps in world's top 500 list

 Bangalore: Hewlett Packard (HP), the world’s biggest maker of personal computers, on Friday said that a total of eight entries in the list of top 500 supercomputers are from India and six out of the eight entries are from HP. Among vendors, HP leads the list with a 41.8 % share of the systems, followed by IBM (37%), Dell (4%) and Cray (4%).

Supercomputer Eka, a HP-based system with a performance of 132.8 teraflops (floating point operations per second) has been ranked at number 13. Eka belongs to the Tata Group’s Computational Research Laboratories.

The rankings are released twice a year by researchers at the Universities of Tennessee and Mannheim, Germany, and at NERSC Lawrence Berkeley National Laboratory. The HP-based Param cluster of the Centre for Development of Advanced Computing has been ranked 68th.

The other supercomputers by HP from India are for an industrial research company (334), a research agency (428), IIT-Madras (436) and Paprikaas Interactive Services (478).

The two other supercomputers from India out of the eight in the list include IBM’s eServer Blue Gene Solution for Indian Institute Science ranked at 213 and a supercomputer for Digital Media Company (G) ranked at 481.

IBM’s Roadrunner has been ranked as number one in the list. The system, only the second to break the petaflop barrier, posted a top performance of 1.059 petaflops. One petaflop represents one quadrillion floating point operations per second. 

'Changemakers' award for NGO

Two financial initiatives of the Dakshina Kannada-based non-governmental organisation Shri Kshethra Dharmasthala Rural Development Project (SKDRDP) - 'Pragathibandhu' and 'Sampoorna Suraksha' - have won the 'Changemakers' award in the competition 'Banking on social change - seeking financial solutions for all'. The award is promoted jointly by the US-based Ashoka Foundation and Citibank.

A press release by the SKDRDP said here on Wednesday that 'Pragathibandhu' model provides an alternative methodology to finance the farming activities of the small farmers. In this initiative small farmers come together to share and learn.

The model has successfully been implemented in coastal and malnad districts in Karnataka consisting of 1.32 lakh small farmers who have been organised in 23,300 self-help groups, it said.

'Sampoorna Suraksha' is a self-financing multipurpose insurance product to protect the poor against hospitalisation expenses, maternity, death, domiciliary treatment and accidents.

Giving details about the competition, the release said that the Web-based competition evoked response from 280 institutions across 43 countries. On December 1, three models comprising the 'Pragathibandhu', 'Sampoorna Suraksha', and a microfinance model from Argentina were declared the best, the release added. 

Govt to promote steps for energy conservation

The Ministry of Power has launched a report on 'Empanelment of Energy Service Companies (ESCOs)', which aims to promote large-scale implementation of energy conservation and energy efficiency measures in existing facilitates through the ESCO route.

While releasing the report, Power Secretary Anil Razdan informed that the electricity consumption in the commercial sector accounts for nearly 8 per cent of the total consumption in the country and is still increasing at more than 11 per cent per year. He added that this rapid growth is largely on account of the growth of the services sector and the increasing use of energy intensive appliances and technologies.

As regards the efficiency in energy consumption, Razdan stated that Bureau of Energy Efficiency has taken up the task of institutionalising energy efficiency services and promoting energy efficiency delivery mechanism through the development of a platform for ESCOs. 

India-Russia Sign Nuclear deal

India and Russia on Friday strengthened their ties further by inking 10 agreements, including a pact on civil nuclear cooperation and decided to intensify their cooperation in combating terrorism.

The agreements signed in the presence of Prime Minister Manmohan Singh and Russian President Dmitry Medvedev were in diverse areas ranging from space and defence to finance, human space programme and tourism. The new Russian President is accompanied by a host of officials and businessmen from various state-run and private agencies and companies.

Describing the agreement on civil nuclear cooperation as a “new milestone” in bilateral relations, Singh told a joint press conference with Russian President who is on a three-day visit, here, “The signing of the agreement on civil nuclear cooperation with Russia marks a new milestone in the history of our cooperation with Russia in the field of nuclear energy.”

Under the agreement, Russia will build four additional atomic reactors in the Kudankulam nuclear plant in Tamil Nadu. Russia agreed in January 2007 to help India in the construction of four energy blocks at the atomic plant in Kudankulam and nuclear power plants at new sites in India.

Separately, OAO Tvel, the Russian nuclear-fuel monopoly, agreed to deliver fuel worth $700 million to other Indian power stations.

Singh, after signing a joint declaration with Medvedev, said both the countries have taken “yet another step forward” through joint action in human space flight programme.

Russia’s space agency signed a new document with ISRO on cooperation in space exploration, which includes plans to send two Indian astronauts to space on board a Russian Soyuz spacecraft in 2013.

Observing that both countries have decided to increase the trade volume to $10 billion by 2010, Singh said they discussed the possibilities of greater cooperation between Indian and Russian companies, both in upstream and down stream sectors.

The two leaders also discussed military cooperation, including technology transfer, T-90 tanks and “issues concerning creating and selling or leasing nuclear powered submarines.”

The two countries signed accords on the sale of 80 MI-17V-5 helicopters to India and cooperation in areas including space exploration, financial markets and tourism.

According to Rosboronexport officials, the helicopter deal is worth more than $1 billion.

The Russian leader expressed hope that the arms agreement would be extended for the next 10 years. “Our prime task is to move from buy-sell to joint production and development” in missile and aircraft development, he said.

“Some issues remain, but there are not many of them,” Medvedev said. “We have agreed that we will keep these issues under joint control and we’ll fully cooperate with each other.”

Russia and India have seen a growth in bilateral trade this year, which increased in the first nine months of 2008 by 41.6% to $3.8 billion dollars year-on-year.

The two countries plan to increase trade to $10 billion by 2010 from this year’s expected level of $7 billion, and diversify economic cooperation in the future.

Both the countries, partners in the BRIC nations, which also include China and Brazil, are looking to boost trade to $10 billion by 2010. The visiting leader, last month in Sao Paulo said that the BRIC countries should play a greater role in shaping up the new global financial architecture.

Also, Russian companies plan to enter into the exploration and extraction of natural resources with Indian partners, he said. The two sides are keen to develop relations in areas such as metals, machine building, pharmaceuticals, space, biotechnology and information technology.

Russia’s Statistics Service earlier said accumulated Indian investment in Russia totaled $821 million, including $718 million of foreign direct investment. Russia invested $18 million in India in the first half of 2008.

Both countries agreed that in the wake of Mumbai terror attacks efforts should be intensified against supporters and perpetrators of terrorism.

India-Russia Sign Nuclear deal

India and Russia on Friday strengthened their ties further by inking 10 agreements, including a pact on civil nuclear cooperation and decided to intensify their cooperation in combating terrorism.

The agreements signed in the presence of Prime Minister Manmohan Singh and Russian President Dmitry Medvedev were in diverse areas ranging from space and defence to finance, human space programme and tourism. The new Russian President is accompanied by a host of officials and businessmen from various state-run and private agencies and companies.[...Read More]

Govt issues guidelines for publishing Indian edition of foreign news magazines

 The government today issued guidelines for publication of local editions of foreign magazines by Indian publishers in the news and current affairs arena. A decision to ease restrictions on inclusion of local content and advertisement was cleared by the Cabinet in September this year.

These guidelines are for the publication of Indian editions of foreign news magazines by Indian entities with or without any foreign investment, an official statement said.

Publishers of such editions will be eligible for 26 per cent foreign investment. Also, such magazines would be allowed to add local content and advertisements.

“The ceiling of total Foreign Direct Investment (FDI), which includes investments by non-resident Indians, Persons of Indian Origin (PIOs) and portfolio investments by recognised Foreign Institutional Investors (FIIs), is up to 26 per cent, according to the provisions of the FDI guidelines issued by the Ministry of Information and Broadcasting (I&B) from time to time,” the statement said.

This move is aimed at giving a boost to the magazine industry and the readers access to foreign news magazines at much lower prices.

Several Indian publishers have been looking at launching the local editions of foreign magazines for a long time.

Currently, the India Today group distributes the international edition of ‘Fortune’ magazine, while the Anand Bazar Patrika (ABP), the publisher of the ‘The Telegraph’ newspaper, is going to launch the Indian edition of Fortune magazine. Another international news magazine, ‘Forbes’, has already announced the Indian edition in a venture with the Network 18 group. “Several other foreign news magazines like ‘Newsweek’ and ‘Business Week’ have shown interest in the past to start a local edition. They will now be encouraged to launch these publications soon,” an industry source said.

The broad parameters for granting such permission say that the publisher or owner of the foreign magazine (of which the Indian edition is proposed to be published) should have sound credentials. Only those publishers who are registered as an Indian company with the Registrar of Companies under the provisions of the Indian Companies Act, 1956, will be eligible for the permission.

“The Indian companies would be allowed to enter into financial arrangements (such as royalty payment arrangements) with the owners of the foreign magazines subject to the rules and regulations. At least three-fourth of the directors on the Board of Directors of the applicant Indian company and all key executives and editorial staff should be resident Indians...,” the guidelines said.

It further said that the proposed publication should have been published continuously for a period of at least 5 years with a circulation of at least 10,000 paid copies in the last financial year in the country of its origin.

“The period of continuous publication and circulation must be certified by the respective Governmental authority of the country, and if there is no such Governmental authority regulating such matters, the certificate should be from respected and recognized agencies engaged in the business of certification,” it said.

According to the procedure for applying, 11 copies of the prescribed application form, duly filled in, along with the requisite documents will have to be submitted to the Ministry of Information and Broadcasting along with an application fee of Rs 20,000 that will have to be deposited through a demand draft. “All new applications for publication of Indian editions of foreign magazines dealing in news and current affairs sector, shall be processed and decided in the I&B ministry on the basis of inter-ministerial consultation with the other ministries like Home Affairs, External Affairs, Department of Industrial Policy and Promotion, and Ministry of Corporate Affairs as may be required,” the guidelines said. 

ISRO to expand capacity to Meet DTH demand

 Bangalore: With the country’s top direct-to-home (DTH) players, including Dish TV and Tata Sky, planning to expand their channel portfolio, Indian Space Research Organsiation (Isro) has decided to increase its satellite transponder capacity in order to provide communication service to DTH players.

Isro will more than double its transponder capacity in the near future, said managing director of Antrix Corporation KR Sridhar Murthy. Antrix, the commercial arm of Isro, is an authorised government agency to offer all Indian and foreign space-related services to local players.

Talking to FE on the sidelines of Word Space Biz 2008, India’s first international conference organised by Isro, Murthy said currently the Indian satellites have 211 transponders for communication purpose that include DTH service, telemedicine and tele-education. Of this, he said, 100 transponders are leased to DTH providers. “Another 300 transponders would be added in the next five years for various communication purposes, including DTH. It is to be noted that 50-60% of Antrix revenue comes from transponder service.

India’s second largest DTH provider, Tata Sky, managing director and chief executive officer Vikram Kausik told FE, “The company is in talks with satellite providers and specialists to avail the satellite service further in order to expand the company’s DTH capacity. We require a large number of transponders in order to transmit 1,000 channels and give our viewers a wide choice. We hope to achieve the target in the next 2-3 years.”

The demand for new channels is growing very sharply in India, especially the regional markets are growing very fast. In order to have wider regional presence, we need to have more channels to offer. The country has 400 channels at present. The number is likely to double in the next 3-5 years. Hence, the DTH providers should have the capacity to accommodate these channels, he added.

Currently Tata Sky, which has 3-million subscribers, has hired all 12 Ku-Band transponders on INSAT 4A. The company will make some changes to expand its DTH platform to accommodate 200 channels against the current 167 channels with its current transponder capacity, Kausik said. “We will touch the 200-channel mark in a matter of weeks,” he added.

On the other hand, the country’s largest DTH provider with 4.8 million subscribers—Zee’s Dish TV—also has huge expansion plans. It, however, is waiting for Antrix green signal for transponder rights.

Director (Corporate) of Zee Network Amitabh Kumar said the company’s DTH arm has applied to Antrix to provide 10 transponders to help implement expansion plans. He said the company, which currently owns around 11 Ku-Band transponders on NSS-6 foreign satellite, plans to expand its DTH space to 400 channels from the current level of 200 channels. The additional transponders will also serve the company’s other planned services like high-definition channels, movies-on-demand, which would require an additional investment of Rs 100 crore, he added. He said the company is confident of getting 10 more transponder by the mid 2009.

Other DTH providers, Sun Direct, Reliance Big TV and Airtel, are also in talks with Antrix for more transponders rights....  

With 81 m Net users, India gets 4th slot

INDIA has been ranked fourth among the top 10 nations in the world with 81 million Internet users. United States leads the chart with 220 million Internet users followed by China (210 million) and Japan (88.1 m). Brazil comes next to India with 53.1 million users, UK 40.2 million, Germany 39.1 million, Republic of Korea 35.5 million, Italy 32 million and France 31.5 million.
    The Internet Governance Forum has released these statistics on the eve of its third four-day global conference that begins at the Hyderabad International Convention Centre on December 3.
    From about 70 million people (1.7% of the world population) who had access to the Internet at the end of 2007, the figure crossed 134.8 crore by 2007. Asia has the highest number of Internet users with an estimated 568.7 million people followed by the Americas with 377.9 million.
Europe ranks third in this list with 335.9 million users and Africa and Oceania close the rank with 51.8 million and 14 million users respectively, according to the IGF. India, however, does not find place among the top ten nations in terms of broadband connections where too the US stands first with 73.2 million connections.
    China has 66.4 million, Japan 28.28 million, Germany 19.6 million, UK 15.6 million, France 15.5 million, Republic of Korea 14. 7 million, Italy 10.8 million, Canada 9 million and Spain 8 million broadband connections. While there were a total of 13.5 million Internet subscribers in India, representing 1.15 per 100 people, broadband subscribers accounted for five million among them.

    However, the number of users, who have online access but do not themselves subscribe, is a whopping 81 million or 6.93 users per people. 

60% of mobile users in rural India by ’12: E&Y

 Rural India too prefers mobile phones over landlines. Of the next 250 million Indian wireless users, approximately 100 million (40%) are likely to be from rural areas, and by 2012, rural users will account for over 60% of the total telecom subscriber base, according to a report jointly released by Confederation of Indian Industries (CII) and Ernst & Young.
    As per Trai figures, subscriber additions in rural areas exceeded additions in the metros. In the first nine months of 2008, the four metros together added 10.3 million subscribers, while the rural areas added over 11.3 million. Mobile phones in rural India also grew by close to 13.72% to reach 70.83 million in the quarter-ending June 2008. This is expected to continue till 2012, according to the CII and Ernst and Young analysis. “The majority of new wireless subscribers will emerge from circle B and circle C,” said Ernst & Young telecom analyst, Prashant Singhal.
    While the overall teledensity in India is over 30%, in rural areas the figure languishes in single digits. CII predicts the number of subscriber addition in rural areas to exceed the additions in metros by 2012 with about 120 million new users expected to adopt wireless telephony in rural areas compared to about 62 million in the metros.
    With over 300 million mobile subscribers, India is the second largest market, after China, in terms of subscribers. By 2012, the total telecom subscriber base is expected to shoot up to include about 700 million subscribers, of which about 650 million will be wireless users.

60% of mobile users in rural India by ’12: E&Y

 Rural India too prefers mobile phones over landlines. Of the next 250 million Indian wireless users, approximately 100 million (40%) are likely to be from rural areas, and by 2012, rural users will account for over 60% of the total telecom subscriber base, according to a report jointly released by Confederation of Indian Industries (CII) and Ernst & Young.
    As per Trai figures, subscriber additions in rural areas exceeded additions in the metros. In the first nine months of 2008, the four metros together added 10.3 million subscribers, while the rural areas added over 11.3 million. Mobile phones in rural India also grew by close to 13.72% to reach 70.83 million in the quarter-ending June 2008. This is expected to continue till 2012, according to the CII and Ernst and Young analysis. “The majority of new wireless subscribers will emerge from circle B and circle C,” said Ernst & Young telecom analyst, Prashant Singhal.
    While the overall teledensity in India is over 30%, in rural areas the figure languishes in single digits. CII predicts the number of subscriber addition in rural areas to exceed the additions in metros by 2012 with about 120 million new users expected to adopt wireless telephony in rural areas compared to about 62 million in the metros.
    With over 300 million mobile subscribers, India is the second largest market, after China, in terms of subscribers. By 2012, the total telecom subscriber base is expected to shoot up to include about 700 million subscribers, of which about 650 million will be wireless users.

Take evidence of Pakistan links to United Nations, CPM tells Centre

With evidence of Pakistani links to the audacious Mumbai terror attacks coming to light, the CPI(M) wants the UPA Government to internationalise India's diplomatic offensive against Islamabad by taking the proof to the United Nations Security Council.

The extraordinary step, the party feels, will help mount international pressure on the Pakistani government to crackdown on terrorist elements operating from that country. Also, it is of the view that the killing of foreign nationals in India by terrorists has international implications.

In detail, the CPI(M) wants the Government to utilise the post-9/11 UNSC resolution against terrorism (1373) that puts it in black and white that all countries have obligations to take steps against terrorist activities and to deny "safe havens to those who finance, plan, support, or commit terrorist acts".

"If we have that kind of evidence against Pakistan, why should we shy away from utilising an international resolution which could help us," asks CPI(M) Politburo member Brinda Karat. Once taken the matter to the UNSC, the party says the world body can decide on the measures to be adopted to "identify and curb such terrorist activities".

The CPI(M) says the resolution adopted by the UNSC days after the September 11 terror attacks in the US can help India like any other country in its fight against terror. "It will help in putting pressure on Pakistan to give up its policy of harbouring terrorists," Karat told The Indian Express.

CPI(M) general secretary Prakash Karat also put forward this suggestion at the all-party meeting convened by the Prime Minister on Sunday, but it was not accepted due to lack of consensus.

Senior CPI(M) leaders point out that External Affairs Minister Pranab Mukherjee has already gone on record to state that elements in Pakistan are appeared to be behind the attacks while reports in the media about investigation also point in that direction.

"Investigating agencies will have to produce whatever evidence they have got so far. If they believe there is a prime facie evidence to suggest the role of elements in Pakistan in the attacks, they should make it available to the international community and corner Islamabad," a senior leader said.

Why India is a target

We're poor. We're illiterate. We're still traditional. Too many religions, too many languages, too many ethnicities. What do we have that the extremists repeatedly make us the target of their terrorism?
Those very things - poverty, illiteracy, tradition, multiple religions, ethnicities and languages. Not because they are a fertile breeding ground for radical recruits but because India is finding workable, affordable and replicable solutions which will help it overcome the same problems. Those solutions are being emulated by emerging societies across the world, giving them hope for their own futures. That is why India's unexpected rise is threatening to those forces that work in the darkness of despair. Socially, politically and economically, India sits between two extremes: the West and China. The models of the western world are too developed to be easily adapted - 50 years of aid has not been effective. China is autocratic, its top-down growth delivered by an appointed, disciplined elite to an obedient population. Neither condition is universal. India's is. "India is, in a sense, the crucible of the world," says Prableen Sabhaney of Fabindia. Under the umbrella of India, in varying stages of development, is the rest of the world - south Asia, where it is the mother culture, but also Africa, some nations of the Middle East, south and central America, central and south east Asia. These are regions rich in assets, and human capital with the potential and now the desire, to develop. They all think: If India can do it, so can they. India is showing how a developing country can transform itself - from the bottom up. Politically, it is democratic, pluralistic, inclusive. Its democracy is chaotic and imperfect, but it functions and it is moving forward. What counts is the vote, first and foremost. Accountability... that'll come later, at some point when democracy has produced enough social and economic equality. But that vote is empowering, it creates upward mobility and a huge constituency of the poor and underprivileged for democracy that gives it staying power. The executing machinery of this democracy is often faulty, but understands the constraints within which it operates. The election commission knows how to access and include people from the remotest corners of the country and overcome the boundaries of tradition - a case study that Afghanistan could use. The judiciary is overburdened and inefficient but also activist when necessary - Pakistan has seen that. The press is free and self-serving but enough times the watchdog it needs to be; the parliament is obstructionist but vital. Rather than spill blood, Indians have learned to use electoral politics and affirmative action to negotiate their way up and out of the centuries-old repressive caste system that left craters of inequality. It left India's elite, the Brahmins, excluded from the political and administrative system, so they turned to entrepreneurship from their professional degrees - mostly engineering. That's how information technology arrived in India, like the new avatar of Vishnu, bestowing upon India its transformative powers of a virtually workable existence. Sure, all developed countries have software, cellular and satellite technology. But resource-poor India used it differently. Software services were used as the engine of exports. Cellphones weren't just about communication but also about affordability. And affordable, home-built satellites which brought in western programming, transported ordinary Indians into the drawing rooms of the world and forever changed the aspirations of generations of young Indians. They all want to emulate the success of those Brahmin engineers, and education - which gives them freedom from poverty - has become their priority. Now India is known as a country whose brain power has 'ingenuity' and the unique capability of 'frugal engineering.' It also has model corporations like the Tata Group, which have a charitable trust as is majority shareholder, and understands the true meaning of 'stakeholders' and 'shareholders.' Companies like Fabindia have shown that artisanal collectives can compete with the mass production of China, and still keep India's delicate social balance intact. The economic success of a poor, democratic country is enough to threaten the terrorist way of life. But what really gives them sleepless nights is India's accessible dreams. It is possible in today's India, to go from rags to riches in one generation. There's confidence, there's education, there's increasing equality. This is fuelled by the exuberance of India's entertainment industry. Bollywood still produces mostly musical family fare but its stories have morals and are a handbook on how traditional, multi-religious and ethnic societies traverse the thorny path into the modern era without losing their identities. When terrorism strikes, Bollywood will show Muslims to always be the most loyal of friends. When traditionalists revolt against western cultural domination, Bollywood will tell the tale of a girl who lives in America and wears a short skirt, but can still fall in love with a son-of-the-soil and be a devoted wife in small town India. Television also unites this diverse India: talent from Kashmir to Meghalaya to Kerala dream of becoming the Indian Idol. The Taj and the Oberoi symbolized this India of accessible dreams. Accessible to Indians, but also to nations like India - poor, traditional societies, some re-emerging from the dark years of colonialism or misguided socialist policies or autocratic rule, looking for affordable, democratic, socially acceptable development models which will give them hope for a bright future. Exactly what the terrorists don't want.

Foreign Investment

According to the Securities and Exchange Board of India (SEBI), as many as 120 foreign institutional investors (FIIs) have registered in India since the global financial crisis broke out in September, and according to a study by Venture Intelligence, venture capital investments in India grew by 36 per cent to US$ 290 million during July-September 2008. Significantly, investments in the Indian healthcare sector have grown to US$ 450 million in the first six months of this fiscal, compared to US$ 125 million in the same period a year ago, according to a study by Feedback Ventures.

Govt looking to allow up to 49% FDI in FM radio

FDI limits in FM radio could soon be increased to 49 per cent for non-news channels and up to 26 per cent for news channels. News will also be allowed, according to Mr Anand Sharma, Minister of State, Information and Broadcasting.

“We are awaiting the comments from TRAI after which approval of the Cabinet shall be sought,” said Mr Sharma. “We are in the process of finalisation of Phase-III of this policy which shall expand FM radio services to 275 cities across the country. This policy will follow an even more liberal dispensation than before and would promote healthy competition to benefit the masses,” he added.

Special incentives are being considered for the expansion of FM radio coverage in the North Eastern states, Jammu and Kashmir and island territories. The Minister was briefing media at a conference in the Capital. Policy initiatives for Mobile TV and Headend in the Sky were also being worked on.

Pay TV homes are projected to increase from 74 million in 2007 to 115 million in 2012, and the Government reiterated its commitment to digitisation of television. Convergence of information, communication and entertainment (ICE), or the “ICE revolution”, was posing an unprecedented regulatory challenge for the Government said the Minister. The Government is also looking at reforms in the cable laws and the digitalisation of cable services.

Content quality

Of special concern, however, was the quality of content in electronic media.

“The Supreme Court has made serious observations on this issue and we feel that there is a strong and urgent need of content regulation of some kind. We are seized of this matter and are trying to find a solution which strikes a balance between freedom of creative expression and the need of content regulation,” said Mr Sharma.

Commenting on the opening up of print media with permission for Indian edition of foreign news magazines, Mr Sharma said that the Government “mindful of the sensitivities involved in the news segment” has not allowed local content to be added by foreign publications.

According to the Ministry, the entertainment and media industry witnessed a growth of 17 per cent in the last financial, the television industry is expected to grow annually at around 22 per cent and radio industry at 200 per cent over the next 5 years. 

FIIs direct India entry!!

The Securities and Exchange Board of India (Sebi) is working on a policy to allow certain categories of foreign investors to invest in Indian securities markets through the automatic route, without having to register themselves with the regulator, as is the current norm.

The proposed automatic approval will be subject to KYC (know-your customer) requirements being complied by brokers and custodians, through whom foreign investors carry out their transactions.

FIIs such as pension funds, endowment funds, university funds, insurance companies, banks and mutual funds are likely to be among the foreign institutional investors that may be allowed to invest directly in the Indian market, officials familiar with the development told ET.

They said the capital market regulator was deliberating whether to do away with the registration process for any entity. However, the view taken by RBI on this will be crucial in formulating the policy. In the past, the central bank had expressed reservations relating to KYC norms given the threat of money laundering and terror financing.

Currently, even though Sebi does the FII registration, it is the custodians of these investors who ensure that KYC norms are being complied with, and also maintain their own records of transactions.

Sebi has already started discussions with market intermediaries to understand how the FII registration process works in other emerging markets such as South Korea, Taiwan and Singapore. In some of the markets such as South Korea and Taiwan, foreign investors have to just fill an application form and can start trading within two days.

Financial sector regulators are also looking at the issue of distinction between foreign direct investment (FDI) and foreign institutional investment. Their view is that portfolio investment should not be considered for FDI limit since portfolio investors just have trading interests.

Another important move considered by policy makers is to allow any overseas entities, including NRIs (non-resident Indians) and OCBs to invest in the local stock markets, provided they identify themselves under the KYC norms.

“There should be no discrimination between non-resident Indians and other investors...since NRIS are already bringing in so much of foreign exchange remittances into the country,” an official associated with the exercise said.

Currently, NRIs are allowed to invest through different category or schemes such as the Portfolio Investment Schemes — they can pick up to 5% in one company. They can also invest through a broad-based fund, which has at least 20 investors with no investor holding more than 10%.

“Once the restrictions on NRIs are removed, it will enhance the inflow of investments in India substantially,” said a senior official with a law firm involved in the FII registration process.

Following the stock market scam of 2001, investment by NRIs has become more difficult, since overseas corporate bodies or OCBs were banned. The regulator is likely to put out the consultative policy paper for public comments shortly.

Meanwhile, the Sebi board, which will be meeting this week, is likely to discuss the future of regional stock exchanges.

In the recent past, Sebi had appointed a committee to study the future of regional stock exchanges — post-demutualisation under the leadership of G Anantharaman, former Sebi whole-time member. 

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Oil & Gas Comes to focus

According to Ernst & Young, the value of oil and gas companies has decreased due to the ongoing economic downturn, making it a good time for Indian companies to buy global assets. Significantly, ESSAR Exploration & Production (EEPL) has become the first Indian oil company to enter Australia by winning two offshore petroleum exploration blocks.

While Indian companies are acquiring E&P assets abroad, sovereign wealth funds from China, the Middle East and Singapore are seeking to acquire E&P assets in India, which is expected to bring in foreign investments worth US$ 10 billion by 2010. And the government recently awarded 44 oil and gas blocks, which is expected to attract investments worth US$ 1.5 billion

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BSNL, BT ink deal for managed networks

Bharat Sanchar Nigam (BSNL) has inked an agreement with BT to provide managed network services to enterprises in a bid to strengthen its information and communications technology (ICT)
offerings.
The two companies will provide full range of services including basic, leased line, MPLS VPN services,Internet, mobile and broadband services. Last month, BSNL had announced a similar agreement with Cable&Wireless. As part of this, BSNL will offer BT access to its pan-India broadband network as well as
seamless access services. The partnership also gives BT access to value added services as well as a single point of resolution for all queries and fault management services.
BSNL will get access to BT's global MPLS network and managed service expertise which includes, for example, network integration, managed security, managed datacenter, hosted contact centre and remote infrastructure management services.
“The BT-BSNL partnership brings together the world-class capabilities of both companies to provide a comprehensive IT and communications service capability in a single service offering. This provides customers with improved service, increased flexibility and reduced risks,” BT India MD Sudhir Narang said in a statement in Mumbai.
“As BSNL transforms into a premier integrated communications service provider, a robust managed service offering is key to our future operations, “ BSNL CMD Kuldeep Goyal said. This partnership will also focus on offering end-to-end services for large transformational projects and help raise the bar in the networked
IT industry, the release said.

Europe invites India to join global summit: Sarkozy

European leaders have invited India to join in an emergency global summit on rebuilding the world's financial system.
The summit call was made in Paris on Saturday by French President Nicolas Sarkozy after a meeting on the global economic crisis between him and the leaders of Britain, Germany and Italy.
France currently holds the rotating presidency of the 27-nation European Union.Sarkozy said the summit is planned for next month and is expected to include not only the Group of Eight (G8) leading industrialised nations, but also India, China, South Africa, Brazil and Mexico.
Sarkozy, speaking on behalf of Europe, said he wants all leading economic nations together to create a new financial world just as Bretton Woods did 60 years ago .
We need to literally rebuild the international financial system. We want to lay the foundations of entrepreneurial capitalism, not speculative capitalism, he declared.

Global bailout package nears USD 2 trillion

With financial institutions falling prey one after another to the global credit crisis, the bailout packages announced by various governments across the globe are inching towards two trillion-dollar mark -- an amount nearly double the size of Indian economy.
With the US Congress giving nod to USD 700-billion aid for troubled financial institutions in the country, the US government alone has announced a total package worth about 990 billion dollars.
Besides, a handful of European countries have already announced packages worth a similar amount in efforts to save their troubled financial entities.
There are expectations for more such instances of helping hands coming from the governments in Europe as the crisis is said to be fast spreading in the region after a full-blown blast in the US.
However, nothing of this sort is expected in India as the country and its financial institutions have remained mostly insulated from any direct impact of the crisis.
Still, the collective bailout packages in the US and Europe, currently at about 1.8 trillion dollars, could soon be double the size of one trillion-dollar Indian economy.
India's GDP is estimated at Rs 46,93,602 crore for the latest fiscal 2007-08, which stands at just over USD one trillion based on the current exchange rate of about Rs 46.8 to a dollar.
From America to Europe, the deepening financial turmoil has seen the fall of big names, especially in the banking industry, such as the bankruptcy of Lehman Brothers, firesale of Merrill Lynch to Bank of America and the extension of 85 billion-dollar lifeline to AIG

India dominates outsourcing industry in 2008

India, home to six of the world's top eight outsourcing hubs, continues to be a major global IT and BPO outsourcing destination amid a determined bid by the neighbouring China to give it a tough competition in the field, according to a new study.
Bangalore, Chennai, Delhi-NCR, Hyderabad, Mumbai and Pune are the six Indian cities in the list of top eight outsourcing cities of the world, according to a study by Global Services, the media platform for global IT outsourcing and BPO industry and Tholons, a global investment advisory firm.
The other two cities are Dublin of Ireland and Mataki city, the Philippines, the survey adds.
But China dominates the list of emerging cities for global outsourcing with Shanghai and Beijing leading the list along with Cebu City from The Philippines.

India, France sign civil nuclear pact

Putting an end to its over three decades of isolation in the nuclear energy market, France on Tuesday became the first country to ink a civil nuclear agreement with India.
Prime Minister Manmohan Singh and French President Nicolas Sarkozy, on Tuesday announced a "a new dimension" to their strategic partnership by signing a co-operation agreement on civilian nuclear energy as
well as two more pacts in areas ranging from space and counter-terrorism to business and high-end research in Paris.
With this agreement, France became the first country out of the 45-nation Nuclear Suppliers group (NSG)
to sign such a pact after they lifted over global restrictions on nuclear trade with India.
The agreement on the development of peaceful uses of nuclear energy will form the basis of wide-ranging
bilateral civil nuclear cooperation. It will span the entire gamut from basic and applied research to reactors,
nuclear fuel supply, nuclear safety, radiation and environment, protection and nuclear fuel cycle management. The pact was signed by French foreign minister Bernard Kouchner and India's Atomic Energy Commission chief Anil Kakodkar at the Elysee Palace.
The agreement clears the way for French companies like Areva to begin supply nuclear reactors to India.
However, the actual nuclear trade may have to wait till India signs the 123 agreement with the US which is
awaiting clearance by the Senate on Wednesday.
"Today we have added a new dimension to our strategic partnership by signing an inter-governmental
agreement on civil nuclear cooperation," said Singh. According to a joint statement, both countries decided to give a new impetus to their cooperation for the development of nuclear energy for peaceful purposes as an expression of their strategic partnership. It also noted that both the countries share common concerns and objectives in the field of non-proliferation of weapons of mass destruction and their means of delivery including in view of possible linkages to terrorism.
As responsible states with advanced nuclear technologies, including in the fuel cycle, the two countries
are interested to promote nuclear energy with the highest standards of safety and security, the statement
said. India and France also signed a pact on peaceful uses of outer space and a social security agreement that will ease working of Indian professionals in France. And they decided to transform current buyer-seller relationship in the defence sector to joint production and transfer of cutting-edge technology.
Under the social security agreement, workers on short-term contract up to five years, do not have to make
any social security contribution provided they continue to make social security payment in India and France respectively.
Another pact was signed by ISRO chairman G Madhavan Nair and Francois Auque, CEO of Astrium. The
pact would enable Astrium to offer attractive solutions in the international markets for in-orbit delivery of its
earth observation satellites, using the PSLV launch services from Antrix, the commercial arm of ISRO.
Transformation of defence ties from a buyer-seller relationship to joint production and transfer of technology for making hi-tech weapon systems and platforms was also highlighted in the joint statement.

India to strengthen its hydropower portfolio

India to strengthen its hydropower portfolio with 60,000 MW addition by 2025

India, with its enormous demand for power to serve its ever-growing economic expansion, is


planning to get an additional 60,000 MW of electricity from various hydro-power projects by the end of

2025, says India's Minister of State for Power, Jairam Ramesh. The Minister, during his recent visit to

Nepal, announced that the country seeks to generate 50,000 MW of hydro-power through its domestic

resources by 2025, while sourcing the rest of 10,000 MW from Bhutan.

River-intensive Indian state of Arunachal Pradesh alone would produce 25,000 MW of entire domestic

hydel power production, while the other 25,000 MW would be generated from new hydel power projects in

Jammu and Kashmir, Sikkim, Uttarakhand and Himachal Pradesh.

India is already into buying power from its neighbour, Bhutan, after it helped the latter develop new hydropower

projects, generating 1,400 MW of electricity, with another 1,100 MW of hydel power generation in

the pipeline.

India has also entered into a memorandum of understanding (MoU) with the Government of Myanmar to

develop hydro-power projects in the Chindwin basin, with the 1,200 MW Tamanthi project identified as the

first one to deliver. India is also engaged in two large transmission projects in Afghanistan and partnering

with Sri Lanka on setting up of a 500 MW thermal plant in Trincomalee as well as on grid-interconnection.

Power flow between India and Nepal is also expected to go up once the latter start to generate 10,000 MW

of hydel-power within the coming decade and trade it with India. India is also likely to raise the proportion of

hydel power in the hydel-thermal mix from the present 25:75 to a more desirable 40:60 over the coming 25

years
.

Global turmoil to have minimal impact on India

Despite financial crisis in the US market, India would continue to grow at high rate of 8% to 9%
in the next couple of years.
Chief economic advisor Arvind Virmani told  financial crisis will have a minimal direct impact on Indian
economy and it will grow at the projected rate of around 8% in 2008-09 and 9% in 2009-10.
The main reason behind the optimism is correction in the commodity prices in the international market,
because of the the slowdown in the global economy. The crude oil prices have already corrected to around
$ 100 per barrel from over $ 140 per barrel few weeks back. This will help bring down the inflation in the
country. Virmani said that by March 2009, inflation will be brought down to single digit from over 12% at
present.
However, the financial crisis will have some indirect effect on the Indian economy as it will lead to liqudity
tightening. This will lead to firming up of the interest rates, affect the inflow of foreign direct investment and
export of goods and services to an extent. But, Virmani said these will not have much effect on the growth,
as they can be addressed by tweaking the government policies.
Goldman Sachs also felt in the same manner. In a report, it said, "We believe the credit crisis, which
reversed the tidal wave of cheap foreign capital over the past few years, will have less of an impact on the
economy's fundamentals."
If the inflation is brought down to single digit, the government and the RBI can take measures to ensure
that liquidity crisis does not affect economy. Virmani said that India's financial system remained intact even
during the present crisis. This, he said would give confidence to the foreign investors, including the nonresident
Indians to invest in India.
Goldman Sachs pointed out India's external sector is holding well and various indicators suggest condition
is undercontrol. The financial sector, the report said, remained sound, mortgage are a fraction of total credit
and exposure to inflated real estate is small.

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India's mobile telephony segment to offer major scope for growth: ITU

According to the Geneva-based International Telecommunication Union (ITU), a leading UN
agency for information and communication technology issues, India's current mobile telephone
penetration rate of about 20 per cent and market liberalisation policies are some of the factors that may offer "great potential" for growth of telecom companies.
Further, according to ITU, while India had about 296 million mobile subscribers by end-July 2008, the world's second-most populous nation offers major scope for growth in terms of numbers. Also, market liberalisation in India has contributed majorly in spreading mobile telephony driven by increasing competitiveness and price reductions.
India's mobile telephony operators now compete for low-income customers and the Average-Revenue-Per-User in India has touched almost US$ 7, one of the lowest in the world, the data revealed.
The report also stated that developing countries like India and China are witnessing an upsurge in the number of mobile phone subscribers which may lead to growth in the numbers to four billion by the end of the year worldwide. The BRIC (Brazil, Russia, India and China – incidentally China, the world's largest mobile market, too has surpassed the 600 million subscriber mark by mid-2008) economies are expected to account for over 1.3 billion mobile subscribers by the end of 2008, owing to increasing impact in terms of population, resources and global gross domestic product (GDP) share.

A rich harvest from Kisaan Bazaars

Organised retail might be faltering in urban India, but is booming in rural India, going by the experience of DCM Shriram Consolidated Ltd’s Hariyali Kisaan Bazaar (HKB). Aimed exclusively at rural India, the company has seen sales from its 160 stores more than double in the last couple of years.

Average sales at an HKB store have gone up to Rs 5 lakh a day during the harvest seasons, while it is around a tenth of that during the lean season. That means the turnover of a single HBK store is over Rs 6 crore, annually, while the investment cost varies between Rs 2 crore and Rs 3 crore.

The growing popularity of HKB stores has also prompted banks and insurance companies to look at possible tie-ups to tap the rural customer. ICICI Lombard and HDFC Bank have already tied up with HKB for their products. Though he furnished few details, Ajay S Shriram, chairman & senior managing director, DCM Shriram Consolidated, said, “Banks and insurance companies get a ready customer base on a platter.”

Shriram said HKB’s retail model was developed exclusively for rural customers. “We have no intentions to bring it to urban areas; it has been designed for rural customers,” he said, adding that retail in rural India is commercially viable.

HKB not only sells products relating to agriculture like fertilisers and seeds, but also household items as 40% of rural India comprises those that are not engaged in farming, Shriram pointed out.

The success of HKB has also encouraged the company to launch pulses and masalas under its own Hariyali brand.

Tourism And Hospitality Industry in India

The Indian tourism and hospitality industry is on a roll, driven by a huge surge in both business and leisure
travel by domestic and foreign tourists. The year 2006 was not only a record year for India's inbound
tourism but was the fourth consecutive year showing a double-digit increase in foreign tourist arrivals.
Moreover, the growth of tourist inflows into India was well above world average, leading to a rise in India's
share in world arrivals from 0.37 per cent in 2001 to 0.53 per cent in 2006. Also, as noted by UN World
Tourism Organisation (UNWTO), the growth of the Indian tourism industry was instrumental in the
'emergence' of South Asia as a tourist destination.
Further, tourism is an important industry in the Indian economy contributing around 5.9 per cent of the
Gross Domestic Product (GDP) and providing employment to about 41.8 million.
Inbound Tourists
The flow of foreign tourist arrivals continues to grow in the current year. On the back of 14.3 per cent growth
in tourist arrivals in 2006 over 2005, foreign tourist arrivals grew by 12.4 per cent during the first ten months
of 2007 to reach 3.89 million as against 3.46 million during the corresponding period last year.
Along with the rise in foreign tourist arrivals, foreign exchange earnings showed a robust growth of 25.6 per
cent during January-October 2007 to touch US$ 6.32 billion as against US$ 5.03 billion during
January-October 2006. On the other hand, in the whole of 2006, earnings grew by 14.6 per cent over 2005
to total US$ 6.56 billion as against US$ 5.73 billion in 2005.
Outbound Tourists
With the economy growing consistently at over 9 per cent, increasing disposable incomes, a change in the
spending habits, liberalisation of exchange controls, increasing affordability due to numerous holiday
packages and cheaper air fares, outbound tourist traffic has been growing at a rapid pace.
The outbound travel market has been growing at an annual average growth rate of 25 per cent, with an
estimated 7 million people travelling abroad in 2006-07. Further, the United Nations World Tourism
Organisation (UNWTO) estimates this figure to reach 50 million by 2020.
Along with the rise in the number of Indians travelling abroad, both the total and per capita expenditure
spent abroad has been increasing. For example, according to the European Travel Commission, average
spend per trip of Indian outbound tourists has increased from US$ 611 in 2000 to US$ 822 in 2006.
Similarly, Euromonitor International estimates the outgoing tourism expenditure from India to grow to US$
21 million by 2011, representing a growth rate of over 25.7 per cent between 2006 and 2011.
Hospitality
The booming tourism industry has had a cascading effect on the hospitality sector with an increase in the
occupancy ratios and average room rates. While occupancy ratio is around 75-80 per cent, the average
increase in room rates hovered around 22-25 per cent (July-September 2007).
And with the continuing surge in demand, many global hospitality majors have evinced a keen interest in
the Indian hospitality sector. For example, over a dozen global hotel chains like the Hilton, Accor, Marriott
International, Berggruen Hotels, Cabana Hotels, Premier Travel Inn (PTI) and InterContinental Hotels group
have announced major investment plans that would translate in to 65,000 additional rooms.
It is estimated that the hospitality sector is likely to see US$ 11.41 billion in the next two years. Also, India is
likely to have around 40 international hotel brands by 2011. Along with these large scale expansion plans,
international hotel asset management companies are also likely to enter India. Already, US-based HVS
International has firmed up plans to enter India, and industry players believe others like Ashford Hospitality
Trust and IFA Hotels & Resorts among others are likely to follow suit.
Online bookings
Travel portals are cashing in on the booming demand for hotel rooms. There has been a surge in hotel
booking on travel portals in the past 12 months. The online travel industry is a US$ 800-million industry in
India, that is, about 14 per cent of the entire travel industry.
According to Travel and Tourism research firm PhocusWright, the online travel market in India that is worth
US$ 1.3 billion in 2007, is likely to grow to US$ 2 billion by 2008.
Medical tourism
India is likely to become a major hub for medical tourism, with revenues from the industry estimated to grow
from US$ 333 million in 2007 to US$ 2.2 billion by 2012, says, a study by the Confederation of Indian
Industry (CII) and McKinsey.
The key "selling points" of the medical tourism industry are its "cost effectiveness" combined with the
attractions of tourism. Medical care, packaged with traditional therapies like yoga, meditation, ayurveda,
allopathy and other traditional systems of medicines, attract high-end tourists especially from European
countries and the Middle East.
Not only Medical Tourism, the scope for theme travel is vast in India with Adventure tourism, Heritage
tourism, Wellness tourism, Pilgrimage tourism, Golf tourism, Eco-tourism, Wildlife tourism all having
tremendous potential.
Government initiatives
To unlock the huge potential in this sector, the Government has taken various initiatives for the
development of this sector.
Launch of Incredible India campaign to promote tourism both in domestic and international markets.
Recognition of spare rooms available with various house owners by classifying these facilities as
"Incredible India Bed and Breakfast Establishments"', under 'Gold' or 'Silver' category.
A new category of visa, "Medical Visa" ('M'-Visa), has been introduced which can be given for
specific purpose to foreign tourists coming into India.
Guidelines have been formulated by Department of AYUSH prescribing minimum requirements for
Ayurveda and Panchkarma Centres.
The Ministry of Tourism has tied up with the United Nations Development Programme (UNDP) to
promote rural tourism.
International Recognition
With the growth of this industry, international accolades have been flowing thick and fast.
India has been elected to represent South Asia on the Executive Council of UN World Tourism
Organisation (UNWTO), the highest policy making world tourism body represented by 150
countries. It is also set to head UNWTO.
The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50
places for 2006.
The Incredible India campaign has been ranked as the Highest Recall Advertisement worldwide by
Travel and Leisure. It has also bagged the coveted PATA (Pacific Asia Travel Association) Grand
Award for Marketing. India also bagged two PATA Gold Awards for Cultural Tourism (Aranmula)
and Marketing Brochure (Kumarkom) awarded to Kerala Tourism.
The world's leading travel and tourism journal, "Conde Nast Traveller", ranked India as the numero
uno travel destination in the world for 2007, from fourth position in 2006.
India was adjudged Asia's leading destination at the regional World Travel Awards (WTA).
Bangalore-based Leela Palace Kempinski has been rated as the favourite business hotel in the
world in a Readers' Choice Awards by Conde Nast Traveller.

Insurance industry, major investor in equity markets

The life insurance industry was the largest investor in the Indian equity markets, ahead of foreign
institutional investors and mutual funds, according to figures released by the Life Insurance Council.
While the net inflow from life insurance companies into equity stood at Rs 55,000 crore till March 31, 2008,
foreign institutional investors and mutual funds invested Rs 53,403 crore and Rs 16,305 crore respectively.
Even for the five-month period from April to August this year, the insurance industry was the largest
investor in the equity markets, having made net investments worth Rs 20,000 crore during the period (when
foreign institutional investors have been net sellers).
Stabilising factor
Mr U. S. Roy, Managing Director and CEO, SBI Life, said Indian life insurance companies are the
stabilising factor in the capital markets, channelising retail investments into equity markets.
According to the Life Insurance Council, new business premium increased by 23 per cent to Rs 92,990
crore in FY 08, from Rs 75,400 crore in FY 07.
There is an increased demand for ULIPs, which accounted for over 80 per cent of the life insurance
business garnered in FY 08.
The total assets managed by the life insurance industry has gone up to approximately Rs 10,00,000 crore
till August this fiscal, from Rs 8,47,000 crore in FY 08, said Mr S. B. Mathur, Secretary General, Life
Insurance Council. The infrastructure investment also increased to Rs 90,200 crore.
'Health' potential
The life insurance industry sees tremendous growth opportunities in health insurance, as over 85 per cent
of the population is uninsured.
"In the post-detariffing scenario, the market has moved to sustainable pricing. The companies can now
reprice their products depending on the morbidity figures. Besides, in the present scenario of medical
inflation and the fact that 70 per cent of the total Rs 2 lakh crore spent on health comes out of the pockets
of the consumers, there is tremendous scope for long term health insurance provided by life insurance
companies", said Ms Shikha Sharma, Managing Director, ICICI Prudential Life Insurance Company.
Pension plans
The industry also sees itself as best suited to provide pension plans to all the sections of the society. "It has
become an increasingly attractive option with the current demographic scenario wherein the young
generation does not subscribe to provident funds", said Mr. Nandagopal, Chief Executive Officer, Reliance
Life Insurance.
According to the figures released by the Life Insurance Council, around 35 per cent of the new business
premium collected in 2007-08 was for pension plans.

Agriculture Sector In India

Agriculture -- across the expanse of India -- is heralding the country's second Green Revolution. A progressively larger number of states have been amending their Agricultural Produce Marketing Committee
(APMC) Act, along the lines of the Model APMC Act, to allow farmers to directly sell their produce to the
buyers.
Significantly, several agricultural sectors like horticulture, floriculture, development of seeds, animal
husbandry, pisciculture, aqua culture, cultivation of vegetables, mushroom under cultivated conditions and
services related to agro and allied sectors have been thrown open to 100 per cent foreign direct investment
(FDI) through the automatic route.
Consequently, a number of corporate players have entered into agreement with the farmers with major
investment plans to tap the huge potential in this sector.
       1. PepsiCo after introducing farmers to high-yielding basmati rice, mangoes, potatoes, chillies, peanuts
and barley, has launched a five-year program with the Punjab Government to provide four million
sweet-orange trees.
       2.Cadbury India Ltd has entered into an agreement with the Tamil Nadu Horticulture Department to
promote cocoa farming in 50,000 acres.
       3.Reliance Retail plans to establish links with farms in Punjab, West Bengal and Maharashtra with an
US$ 5.6 billion investment.
      4.Skol Breweries India Ltd, the wholly owned subsidiary of SABMiller India, has entered into a
contract farming agreement with barley farmers in Haryana.
       5.Himalaya Drugs plans to associate with farmers across southern Indian states for sourcing at least
70 per cent of its herbs.
Already agriculture is one of the most important sectors of the economy contributing 18.5 per cent of
national income, about 15 per cent of total exports and supporting two-thirds of the work force. And with
recent developments, it is set to play a more dynamic role in the economy.
Production
India with its favorable agro-climatic conditions and rich natural resource base has become the world's
largest producer across a range of commodities.
      1.India is the largest producer of coconuts, mango, banana, milk and dairy products, cashew nuts,
pulses, ginger, turmeric and black pepper.
      2.It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables.
The year 2007-08 promises to be a bumper year for Indian agriculture, with a host of crops clocking record
output levels. Some of the highlights of the third advance estimates of the production of major crops,
released by the Agriculture Ministry for 2007-08, are:
      1.Food grain production is estimated to be at an all time record level of 227.32 million tonnes (MT).
      2.Wheat production is projected to be at a record 76.78 MT.
      3.Rice production likewise is estimated at an all time record of 95.68 MT.
     4.Coarse Cereals are also estimated to produce an all time record 39.67 MT.
     5.Cotton production is estimated to be 23.19 million bales of 170 kg, the best ever production level.
     6.Pulses production is estimated at the highest ever production level of 15.19 MT.
Apart from these, other crops which are likely to record highest ever production levels in 2007-08 include
Maize (18.54 MT), Tur (3.03 MT), Urad (1.56 MT), Oilseeds (28.21 MT) and Soyabean (9.43 MT).
In fact, the estimated growth in food grains output by 4.6 per cent in 2007-08 is nearly four times the
average annual growth of 1.2 per cent during 1990-2007.
Also, according to the US Department of Agriculture, India will register the highest increase in rice
production (16.3 million tonne) globally in the next 10 years.
Simultaneously, with the changing lifestyle and dietary pattern of the consumers along with the increasing
brand and variety consciousness of farmers, the demand for certified high quality seeds has been growing
rapidly. Already, a billion-dollar industry, the Indian seed industry is the eight largest in the world and has
been growing annually at 12 per cent growth rate. Consequently, several transnational players like Bayer,
DuPont, Monsanto, Syngenta and Advanta among others have been stepping up their operations in the
country.
Exports
Along with the impressive production growth rates, exports of agriculture and allied products have been
increasing steadily. For example, India's share in the world cotton trade has increased from 8 per cent in
2005-06 to 12 per cent in 2006-07. Further the government has prepared a plan to increase India's share in
processed food trade from the current 1.6 per cent to 3 per cent in 2015.
Agriculture and allied product exports increased by 20.5 per cent during April-October 2007 to total US$
11.9 billion as against US$ 9.87 billion in the corresponding period in 2006.
       1."Indian spices saw a 20 per cent rise in export volumes in April-May, totalling up to 98,570 tonnes
as against 82,210 tonnes a year back."
       2.Coir exports rose sharply by 20.47 per cent to 118,158 tonnes during April-November.
       3.Indian sugar exports are expected to more than double in 2007-08, on the back of 1.1 million tonnes
exports in 2006-07.
      4.Cotton exports stood at 6 million bales during the 2007-08 fiscal year.
     5. Rice exports grew by a whopping 61 per cent during April-October 2007 over the corresponding
period in 2006.
Organic Farming
With the global demand for organic food rising at a feverish pace, India is well placed to raise its share in
the US$ 30 billion global market of organic products, given its wealth of natural resources
Currently, India ranks 33 in the world in terms of total land under organic cultivation and 88 in terms of the
ratio of agricultural land under organic crops to total farming area. But this is set to improve with increasing
interest shown by many states.
Nine state including Haryana, Maharashtra and Tamil Nadu among others have already submitted
proposals for accreditation to APEDA, which will allow them to certify produce of their farmers as organic. In
fact, Kerala is set to turn "organically" green, with the government plans to convert 20 per cent of
agricultural land to organic farming each year, with total conversion in five years.
With the accelerating interest shown in organic cultivation, the area under such crops is estimated grow
almost four-fold to cross the 2 million mark, says National Centre for Organic Farming (NCOF). Currently,
land under organic cultivation is 528,000 (including 312,000 hectares of certified land). Already, India is the
second largest producer of organic cotton in the world with a production of 10,365 tonnes a year.
Simultaneously, exports from organic farm produce have been growing at a frenetic pace to total US$ 83.08
million in 2006-07 against US$ 26.4 million in 2005-06, and are well on way to surpass US$ 125.88 million
this year. In 2002, exports were US$ 15.5 million.
Agri-biotech
India has also been making rapid strides to fully utilise the advances in the biotechnology industry for
accelerating the growth of its agricultural sector. According to a report by Rabobank, the Indian agri-biotech
sector has been growing at a blistering 30 per cent growth rate in the last five years and is likely to maintain
this growth well into the future.
In fact, since 2002, when India made its entry in the agri-biotech segment, this segment has been the
fastest growing segment among all the biotech industries in the country.
The agri-botech industry's sales have been growing at a tremendous growth: from US$ 82.37 million in
2004-05 to US$ 149.14 million in 2005-06 and US$ 230.9 million in 2006-07. It accounted for about 10.84
per cent of total biotech industry's sales in 2006-07.
The growth of this segment can also be seen in the continuous increase in the area under cultivation of
such crops. For example, within six years, area grown under genetically modified (GM) cotton variety, Bt
cotton, rose sharply to account for 70 per cent of the total area under cotton cultivation.
According to Rabobank, India has the potential to emerge as the major producer of transgenic rice and
several GM vegetables by 2010. Already research work is being carried in 19 crops like rice, wheat, cotton,
potato, banana, tomato, rapeseed, mustard and coffee among others.
Government Initiatives
Government has been taking various progressive measures to accelerate the growth of this sector. Some
of the recent initiatives taken by the government include:
     Allowing private sector companies engaged in business of warehousing or transport of food grains

 in procurement operations on behalf of the Food Corporation of India (FCI)
     A weather-based agricultural insurance scheme is to be rolled out across select districts in 12 states
for the forthcoming rabi season.
     Construction of seven Modern Terminal Markets with modern infrastructure facilities that will help
farmers realize maximum returns for their produce, remove middlemen and ensure lower prices for
end-consumer.
In addition, the government has already approved 60 agricultural export zones (AEZs). Besides, four zones
have been identified to provide US$ 12.1 million worth of funds under a scheme called Assistance to States
for Infrastructure Development of Exports. Further the Government will provide an additional US$ 6.17
billion for new farm initiatives launched by states to double the growth rate in agriculture to 4 per cent over
the 11th Plan period.