India Culture, Business, Sports and Food. Get all the buzz in India now

Singur, Nandigram, Kolkata fire and now bird flu! West Bengal is not having the best of times, of late, it seems. It has been confirmed that the death of thousands of chickens has been caused by the dreaded H5N1 virus, which might have come via Bangladesh. Since the variant is dangerous to human beings, it is among the biggest challenges the state faces. On paper, a contingency plan is already in operation, but reports from the two affected districts of Birbhum and Dakshin Dinajpur tell a sorry tale of mismanagement, with hundreds of dead chickens lying scattered. The sooner the rapid response teams start responding, the better, because the situation can worsen all too quickly.

The first priority, of course, is to ensure that human beings are not affected, especially the cullers who come in direct contact with the birds. Then there is the need to confine the disease within the 10-km radius of the area where the birds have been found to be affected. Poultry farmers have to be given adequate compensation. After all, more than 3.75 lakh birds may have to be culled. All these tasks can be accomplished only if the Centre and the state work in tandem.

What is more worrying is the fact that this is the third outbreak of bird flu in the country in two years. If it was Maharashtra in February 2006, it was Manipur in July 2007. There is need to go deeply into the reasons for these frequent outbreaks. One possible cause is the insensitivity of the local administration to such developments. For instance, the West Bengal government did issue an alert, which even reached the District Magistrate in time. But personnel of the animal husbandry department just did not act on it. Now that there are reasons to suspect that many people might have feasted on the infected birds, the pr0blem will be far more difficult to tackle. This tendency to delay unavoidable action must be curbed with a firm hand.

Even as culling of poultry began in West Bengal, reports of the deadly bird flu disease spreading to newer areas came in on Wednesday; with the state government issuing a general alert. Meanwhile, Margram village in Birbhum district has been declared the epicenter of the bird flu outbreak and sealed off from the rest of the country.

The state government has confirmed that the flu is spreading to Murshidabad and two new blocks in Birbhum. More poultry birds are dying with symptoms of bird flu in other parts of the state, including Burdwan, South 24 Parganas, Nadia and Malda.

It was learnt that the animal husbandry department in New Delhi has pulled up the state for its delay in taking measures to prevent the outbreak. While the birds started dying on January 4, the state informed the Centre a week later - resulting in delay in public awareness campaigns. Moreover, culling in the vulnerable Margram village started around 1 p.m. on Wednesday 15 January - a full 24 hours after the Centre confirmed existence of the deadly disease in Bengal.

The operation could not gain momentum till Wednesday evening, following the state government’s failure to properly train the health workers and spread public awareness campaigns in Rampurhat and Balurghat. The poor villagers also tried to escape killing their birds by selling them outside and releasing them in the nearby fields.

Director of Health Services Sailchita Bakshi said, “The culling process was a little delayed in the affected districts. Around 1,500 chickens were disposed of in Birbhum district on the first day. A team of experts from Delhi is coming to the city on Thursday to take stock of the situation. They will also hold meetings with state health and animal resource development officials.” The Centre has sent another 20,000 doses of Tamiflu - the medicine used to treat bird flu - to add to the state’s existing stock of 3,700 doses.

Tuesday, 15 January 2008, 9.55AM: The Anil Ambani-controlled Reliance -Power opens for stock subscription in the Rs 405-Rs 450 range. 9.56 am: History is created - the stock is oversubscribed.

 By evening the Rs 11,600crore issue is oversubscribed a staggering 10.55 times. And it’s still three days to go before subscriptions close. Reliance Power is by far the largest initial public offering ever in India, dwarfing realty major DLF’s Rs 9,188-crore issue.

Reliance Power, when it lists on the stock exchange, is likely to substantially raise Anil’s personal wealth. If the stock lists above Rs 700, as it is widely expected to do, it would catapult Anil to the top of India’s rich league, well past elder brother Mukesh’s Rs 2.48 lakh crore net worth.

But there’s more to the share issue than that. Reliance Power is representative of a whole a new league of mega public offerings in India. The DLF offering was considered a paradigm-changing one. Within seven months, Reliance Power makes it seem like a drop in the ocean.

Waiting in the wings is Bharat Sanchar Nigam Ltd. The telecom major’s initial public offering of Rs 40,000 crore - for a mere 10 per cent of the company - is set to make Anil’s stock issue look like small change.

Meanwhile, State Bank of India is planning to issue shares worth Rs 16.700 crore to existing shareholders at a fixed price. This too, will dwarf Reliance Power’s issue. No wonder then. Union Finance Minister P. Chidambaram couldn’t contain his elation. “It is a reflection of what the world community thinks about the future of India….” he said about Reliance Power, the first time he has commented on a public issue.

Other mega issues expected soon are Reliance Infocomm, Oil India, UTI Mutual Fund, National Hydro Power Corporation and Rural Electric Corporation.

The Reliance Power issue was oversubscribed several times on day one, an event that should not have surprised anyone. While one would genuinely like to believe the Finance Minister’s inference that it is an endorsement of India’s growth story, unfortunately, it is more about riding the hype to make a quick buck. It may sound less lofty, but it is the truth.

The big carrot is the grey market price. In fact, more people may be aware of the grey market premium of Rs 400 than the issue price itself, such is the hype around the expected listing. There is an air of certainty about the listing price, almost a “guarantee” that nothing can go wrong. I hope nothing does. Nothing should, for pure retail applicants. They do not borrow to invest, so there is little price risk. Even if the stock does not go to Rs 1,000 as some people expect, I find it difficult to see how it will not list at a fairly substantial premium. Thus the quantum of profit may vary but there is little risk. For the rich investor, though, who is either putting in fully funded or partly funded applications, the exact listing price and quantum of oversubscription and hence allotment determines the gains.

These people want to sell on listing day and lock in profit. If the stock, for some reason, does not clear Rs 750 or high net worth individuals’ oversubscription tops 250-300 times, they may be in trouble. Institutional investors may not have a funding problem but make no mistake; many of them are applying simply to flip it post-listing. Sure, they may want to buy it later at much lower levels from an “investment” perspective if the market provides such an opportunity but right now, they just want a quick ride to Rs 900 like the rest of the herd.

Does that mean there will be only sellers post-listing? Far from it. There will be several 29-year-old “hedge fund“ managers who have joined the India party late, who can be sold pretty much anything at any price today. There can hardly be a market without such suckers.

 Do not get me wrong, there is absolutely nothing wrong in trying to scalp an IPO. If it makes money, good for you. I have only two apprehensions:

a)     The single-minded focus on a grey market price as the sole basis of investing; and

b)    The ramifications such a complete dissociation from fundamental value could have for the health of the market.

  I wish you luck in the flipping game and hope you can jump off the footboard before the train leaves the station.

Alarmed at frequent reports about crimes against foreign tourists, particularly molestation of women, coming in from different parts of the country; the Centre has decided to review safety and security measures for them with the state governments at a high-level meeting convened on January 24.

The latest such incident has been reported from Kumarakom in ‘God’s own country’ Kerala, where two minor girls from Canada on a holiday were allegedly molested by a security guard of a hotel. In other very recent cases, a British journalist was allegedly raped by the owner of a guest house in Udaipur and an American tourist was molested at a temple in Pushkar, both being major tourist destinations in Rajasthan.

These incidents have raised serious concern in the Union tourism ministry; which is apprehensive that its high-profile ‘Incredible India’ campaign abroad would be adversely affected by the bad publicity resulting from such cases that create a poor image of the country. Tourism Minister Ambika Soni is said to have taken serious note of several recent incidents of rape and molestation of women foreign tourists in various cities.

Already; several prominent countries, including the US,UK, Australia, Canada and France have issued warnings on the law and order situation here in travel advisories to their citizens planning to visit India. They have specifically warned women tourists about the possibility of physical harassment and molestation in major tourism destinations like Delhi, Agra, Goa and Himachal Pradesh.

According to official sources, Union Tourism Secretary S.Banerjee has written to tourism secretaries of all states regarding the recent media reports about harassment of women tourists. Reminding them about the Centre’s concern for the safety of foreign as well as domestic tourists, he recalled that the ministry had earlier asked them to deploy special police at popular tourist sites. Only 10 states have acted on the recommendation so far.

Tourism secretaries of various states will meet Soni and other senior officials in New Delhi on January 24 to review tourism projects and other related issues. It has been decided that the safety and security aspect of tourists will be the focus area at the meeting, an official stated.

They will try to identify various measures that can be undertaken to provide better protection to foreign visitors, apart from reviewing the effectiveness of the existing ones.

The year 2007 saw an unprecedented boom in Indian real estate sector with foreign investors pouring their money into India and some of the big domestic players making it big by launching several real estate projects. The outlook for 2008 also remains quite positive. However, one question that now haunts everybody is where are affordable homes for poor and the marginalized?

With Central and state housing agencies having failed to meet the demand in the “affordable homes” category and the private sector players more keen on multiplying their profits through high end housing and commercial projects, a worrying scenario is fast emerging visa-vis meeting the basic requirement of shelter for the poor and the marginalised.

In this context, the three-day NATCON 2008 organised by the CREDAI was a timely one as suggestions poured in from the government as well as realtors to address this important aspect in the real estate growth story.

Minister of state for housing and poverty alleviation Kumari Selja, who was present at the inaugural session of NATCON 2008, that got over, stressed that governmental effort alone would not suffice to provide housing for the poor and the private players will have to compliment and supplement public sector bodies efforts to really make a difference.

“The urban housing backlog with increased urbanization in India assumes alarming proportions, especially for the Economically Weaker Sections (EWS) and Low Income Groups (LIG), which constitute more than 99 per cent share of total housing shortage of 24.71 million in urban areas,” Selja said.  “This magnitude of backlog is evident by the fact that 21 per cent of our total urban population lives in slums or slum like conditions and 35 per t cent of the households are one-room tenements,” she pointed out.

Public housing agencies have been in the forefront of providing housing for the EWS. Given the magnitude of the housing shortage and budgetary constraints of both Central and state governments, it is amply clear that public sector efforts will not suffice in fulfilling the housing demand.

“Therefore, the private sector has to play a more proactive role in taking up housing programmes on a massive scale for the poor and low-income groups with social commitments,” the minister said.

In the context, she said the Central government intends to involve the private sector in the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for completion of 1.5 million dwelling units in the country by the end of 2012.

Government shall be a partner by providing enabling environment through incentives and concessions for low income housing. She further added.

Union minister for urban development Jaipal S. Reddy stated that “State governments should give incentives to builders for constructing small housing units/apartments”.  Expressing his thoughts on the theme of the convention, “Real Estate for all”, CREDAI Chairperson Kumar Gera said, “Though the real estate sector in the country is growing at a stupendous rate, it is not benefiting all.”

“The sum total of direct and indirect taxes, duties and levies amounts to a very significant figure, almost in excess of 25 per cent, for a housing unit that has a pan India average cost of Rs 2,700 sq ft. This negates the impact of this boom and widens the gap between what one can afford and what is available. Therefore there is an urgent need to find ways to reduce these costs in order to decrease the price of the end product,” he said.

“The way to make available affordable housing could be through setting up of ‘Special Residential Zones’ that would enjoy various exemptions, as in the case of the SEZs. These SRZ’s would have small residential units below 60-70 sq. mtrs that would make available large-scale affordable housing for the masses,” he said.

CREDAI President Rajni Ajmera said “Natcon 2008 is CREDAI’s attempt to bring together developers, real estate professionals, policy makers, financial institutions and investors under one roof to debate, discuss and explore the new avenues in the real estate sector in India.

The three-day convention had discussions and deliberations on topics such as -policies and regulatory environment, real estate indices and developer rating, reforms in real estate, affordable housing: Making it reality on PPP and future of real estate in the next five years, shifting ownership patterns and influence of FDI, new dynamics in retail/ hospitality/entertainment and expected role of government and private sector in real estate.

There were a slew of launches, a day before the Auto-Expo 2008 officially opens for the public. While the country’s largest car manufacturer, Maruti Suzuki India Limited (MSIL) unveiled its three concept cars, the biggest attraction was from the stable of Skoda India in the form of hatchback Fabia.

Besides showcasing global car ‘A-star’ concept, which will be manufactured only in India, Maruti also showcased two other concept cars, Splash and Kazshi.

“Our new plant in Manesar will play an important role in Suzuki Motor Co’s target of selling 3 billion units globally by the financial year 2008-09. Production of A-star will begin here from October,” Maruti Suzuki India managing director Shinzo Nakanishi said. Production of A-star will start from October this year for the Indian market and then subsequently it would be exported overseas, he said. Nakanishi also said Maruti will launch one new model in India every year to consolidate its market position.

On the other side, General Motors, which has already carved a place for itself in the car segment, launched its all-new sports utility vehicle (SUV) Captiva while Tata Motors launched new variants of multi-utility vehicle (MUV) Sumo and sedan Indigo. The new version of the MUV has been named Sumo Grande.

Volvo Car Corporation showcased its new sedan C70 and is planning to launch it in the Indian market soon.

European car maker Volkswagen, which sells ‘Passsat’ and ‘Touareg’ in India and also has Skoda in its stable, said it would introduce two new models this year and expects to sell 110,000 cars after its plant is operational next year. “We will get our ‘Jetta’ to the Indian market this summer, while luxury sedan ‘Phaeton’ will also be introduced this year,” Volkswagen India president Joerg Mueller told.

Fiat India said it would launch four new cars by the end of this year. “The company will bring in ‘Fiat 500′ and ‘Bravo’ as completely built units (CBU) from Italy and delivery would start three months from now,” Fiat India vice-chairman Alfredo Altavilla said. Besides these two models, the company is also planning to roll out ‘Grande Punto’ and ‘Linea’ from its Ranjangaon facility in the third quarter of 2008-09, he said. Fiat markets its vehicles in India through Tata Motors’ dealer network.

However, there were two main attractions, MSIL’s concept cars and Fabia at a price range of Rs 4.99-7.68 lakh would be something to possess.

The Fabia will be available in eight variants in diesel and petrol engines. It will consist of 1.4 litre PDI (diesel) engines and 1.4 litre MPI (petrol) engine. Later in the year, the company plans to introduce the car with a 1.2 litre MPI (petrol) engines, which will be available in six colours.

The new C70 is not yet available in India, but it might find its way to the country soon, Volvo Car India managing director Paul de Voijs said. Asked when the company was planning to launch the new car in the market, Voijs said: “By showing it in the motor show we will see the response and the enthusiasm in the market and take a call accordingly.”

On the other hand, General Motors India said it was mulling to launch alternate fuel-powered variants of its mid-size sedan Aveo, as it finalizes plans to set up a power train (engine and transmissions) manufacturing facility in the country. “We are working on alternate fuel (CNG and LPG) powered Aveo, but have not set a timeframe by when we would launch these cars in the country,” GM India president and managing director Karl Slym said.

Meanwhile, according to reports, German car maker BMW India today launched its luxury BMW M series and BMW Individual in the domestic market. BMW M6 coupe has a price tag of whopping Rs 1.24 crore, while the BMW M5 sedan comes for Rs 1.01 crore. BMW M3 Coupe is priced at Rs 74.91akh. BMW X5 4.8i under the Individual series costs Rs 79 lakh. All prices are ex-showroom (Delhi).

Luxury car maker Daimler AG today launched two models Mercedes Benz ‘C class’ and ‘CLK class’ priced at Rs 27 lakh and Rs 60 lakh, respectively (ex-showroom Delhi). The company is targeting to sell 3,000 units in this calendar year up from 2,491 units in last year.

International Monetary Fund (IMP) has conducted a study on the medium-term debt incurred by India and the impact that it will have on the economy. The agency, after conducting the study, is in the process of consultations with various governmental departments before making the report public. According to the findings of the study the economic growth forecast will ease to 8 per cent and the interest rates will rise modestly.

The fiscal consolidation will remain on hold following the achievement of Fiscal Responsibility Budgetary Management (FRBM) targets for an overall fiscal deficit of 3 per cent of GDP. These policies, combined with progress in structural areas, are expected to support growth and help contain inflation.

As regards the tax revenues the medium-term projections assume continued healthy growth, though with some slowdown due to turn in the profit cycles may lead to a modest dip. The agency does not assume any significant reduction in tax and non -tax revenue. In fact, policy reforms in this direction could raise revenue by a few percentage points.

The agency forecasts that expenditure would be raised on education, health and infrastructure and there could be a reining in of spending on non-priority items, including subsidies. Military spending is likely to remain constant.

The agency study forecasts that wages and salaries will see an increase of 30 per cent phased over two years. Since the government spending on wages and salaries has been falling in real terms, it is assumed that any more spending by the government will not have any major impact on the budget deficit.

It is of the view that the subsidies on petro products that are being issued by the government owing to high price volatility in the 2007-08, may reduce owing to governments commitment to reduce expenditure on subsidies. Fuel subsidies will see a gradual increase in administered prices in’ 2008-09 and there could be a return to market-based pricing of diesel, gasoline and LPG in 2009-10.

The price of kerosene will, however, not be adjusted. As regards fertilizer subsidy it is estimated that off budget subsides will be cut half in 2008-09 and eliminated in 2009-10. The study suggests that the Central government be on track to meet its overall deficit target for 2008-09 i.e. 3 per cent of GDP, but may find it more difficult to reach the target of Central Government revenue balance by 2008-09. However, there are upside risks to tax revenue that would accelerate fiscal consolidation.

The benefits of holding the annual Pravasi Bharatiya Divas in Delhi and similar NRI get-togethers in some states may not be many if measured in monetary terms alone. However, regular interaction between the country and its Diaspora strengthens the sense of belonging.

 When NRIs in Malaysia or Kenya feel threatened, they expect help from their country’s leadership. Indians allover feel proud when a Sunita Williams or Lakshmi Mittal makes a global mark. The holding of the “Pravasi Divas” on January 8-9 every year to mark the return of Mahatma Gandhi from South Africa, the grant of dual citizenship and the setting up of a ministry of overseas Indian affairs are among the steps that have encouraged the dialogue with the Diaspora.

After China, India has the world’s largest number of Diaspora - 25 million in 110 countries. Their combined wealth is estimated at one trillion US dollars. If overseas Indian investment is significantly lower than what overseas Chinese invest in their country, it is because most of them are workers and professionals while most Chinese are from business families. Besides, unhelpful bureaucratic mindset, administrative hurdles and delays keep off NRIs and PIOs from contributing to their country of origin.

Many of them want to fund education, but the government decision to centralise all overseas donations acts as a deterrent.

States have their own agenda for the Diaspora. This year the political leadership in Gujarat, Kerala, Jharkhand, Haryana and Punjab has tried to woo NRI investment. The Haryana Chief Minister has offered IT opportunities in Panchkula while the Punjab Chief Minister has announced the establishment of fast-track courts and special police stations for NRIs in six districts. Some of the problems concerning NRIs can be solved if the land and housing records are computerised and the marriage laws strictly implemented.

 Good governance, removal of red tape and a congenial investment environment can attract overseas Indians more than any fire-fighting measures.