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

Government Decision All hopes of revival have ended for the closed sugar mills of Punjab. Badal led SAD-BJP alliance government has decided to sell the land of six closed sugar mills to the Punjab State Federation of Co-operative House Building Society for the construction of housing colonies instead of reviving these sick units. With it the dreams of thousands of employees and mill laborers of resumption of work have dashed. It must be learnt that former Co-operative minister late Captain Kanwaljeet Singh had dreamt of reviving the sick mills within the time frame of three months but his dreams too have been broken. Co-operative department has 15 sugar mills out of which, Faridkot, Jeera, Budhlada, Jagraon, Tarantaran and Rakhra based sugar mills have been closed for a long time because of government’s indifference. All the workers of these mills have been left jobless. Neither they have got their salaries for a long time nor have they been transferred to other governmental departments.

Allotment of Land In its 2007’s assembly elections manifesto the SAD-BJP alliance had promised to restart these closes mills. Late Captain Kanwaljeet Singh had promised to take immediate steps for the revitalization of these ill-mills. To keep his promise he had planned to establish electricity production units in these sugar mills to solve the financial problems of these mills. More than fifteen private companies had showed their interests in this new planning. An electricity production unite has already been established in Faridkot based sugar mill that was established in 1991. This unite produces the electricity worth two crore seventy lakh annually. But this mill, too, has been closed because state government has shown the deficit of seventy seven crore in the time of ten years. In spite of the planning of restarting production from these sick unites the state government has allotted the land of these mills to Housefed to construct big residential colonies. Faridkot based mill has 133 acres of land out of which 65 acres have been allotted to Housefed to construct residential colonies. Except it large chunks of land of the remaining five sick sugar units have also been allotted to construct residential colonies.

Economy of Punjab Except it the financial condition of the remaining sugar mills of Ajnala, Shaheed Bhagat Singh Nagar (Nawan Shahar), Batala, Morinda, Fazilka, Bhogpur, Kharar, Budhewal and Gurdaspur is also not satisfactory. Farmers have lost their interest in the production of the sugarcane because of transportation problems. On the other hand state government, too, is indifferent towards this small scale industry. Because of it most of the sugar mills could run only for 50-70 days during the peak season this year Sugar department MD Vinod Kumar said that large parts of these sugar mills have been sold for the construction of residential colonies but his department is very serious to revive and revitalize these closed sugar mills. Punjab government’s decision of selling the sugar mills’s land indicates that at one hand it is indifferent towards the economic interests of the farmers and on the other hand it is non-serious for the industrialization of the state.  Punjab is an agricultural state and most of its industry is agricultural based. It is a border state so private sector has not showed much interest in investing here. We must not forget the Nandigram like incidents. If in future some hopes of new industry rise then the land of these closed mills could be transferred for establishment of new industry. But SAD-BJP government’s decision indicates that they are not honest towards the people of Punjab. 

Black Money Issue During the 15th Lok Sabha elections BJP leaders had raised the issue of black money that corrupt Indian millionaires, political leaders and police officials have deposited in the foreigner especially Swiss banks. They were saying that billions of black money will be brought back into the country and India will become world’s most prosperous country in a very short time span. But one question rises that corrupt industrialists and political leaders are the owners of this black money not the ordinary Indians and thus who will bring the black money back into the country and who will allow doing so. During the election time it was a perfect slogan to befool the people but now Congress led UPA government should seriously and honesty think about this problem so by bringing the black money back into the country the progressive works should be given a new impetus.

Reality In reality the term ‘black money’ is related with cash flow of the currency and only those people know how to use it properly who are the masters in this profession. Firstly black money is deposited in the foreigner countries or properties are bought in and out of the country with this money. Sometimes, people buy land or large farm houses in the names of their relatives which are usually bought in non-existent or bogus names. Whenever some officer or leader is caught red handed taking the bribe they usually decline about their ownership of some property etc. so properties are bought in non-existence names by the corrupt officers and leaders. There are many examples of it that corrupt leaders amassed a lot of property during their rule and they were blamed for corruption. They lost in the elections but after elections their children live the life of kings. CBI raids recovered documents of property that had been bought in non-existent names. Luxury cars were found but they say that their relatives are the owners of these items who are the god fearing people and daily goers to the Gurudwaras or temples. There are many examples when many high class government officials and police officers had collected crores of rupees though corrupt means for the satisfaction of their personal interests.

Corruption Definition United Nations Development Program has given a new definition to the increasing corruption of Asian countries according to which if some political leader or government officer misuses his power for his personal interests or accepts money or gifts as bribe then it can be called corruption. There is also another example of corruption: to earn money by abducting someone, acceptance of commission for doing some government works or earn by fraud. There is another way also. Sometimes people buy the government property in their own name by corrupt means. Then a large amount of money is taken from some bank by giving the guaranty of that property and that loan is never paid back. UNDP has said that a few people are becoming rich by the misuse of their position and by fearing the ordinary people. On the other hand poor are becoming poorer. Thus new investment and the progress rate of the country is adversely affected. There is an organization named Transparency International that keeps a hawk’s eye on the corruption of whole of the world. According to it no other country is as corrupt as is India. It has analyses the reports of 159 countries of the world and India is at number 12th as for as the corruption is concerned. Singapore and Hong Kong are very less corrupt countries. One striking fact is that when a country like Hong Kong can end the corruption then why India cannot do so? The main reason behind most of the world’s corruption is it that officials don’t get enough salaries to meet their daily needs. So they accept bribes. Indonesia is more corrupt country than India. Its government employees can meet only 7-10 days’ daily needs with their salaries. In Mongolia Magistrates don’t get more than one thousand rupees as their monthly salary and half of them don’t have homes to live. Philippines officers are also among the most corrupt people of the world.

NRI’s Politicians and high government officials of Bihar, Uttar Pradesh and Punjab like Indian states earn crores of rupees by corrupt means and deposit that black money in Bangkok or Switzerland. Then that black money is transferred to other banks or countries. NRI’s (Non-Resident Indians) can buy property in India. In most cases these properties are bought in the names of NRI’s but in reality corrupt leaders and bureaucrats spend the money on these properties. Thus black money has started to return to India by this new method and is becoming the white property of corrupt leaders and bureaucrats. Now ordinary people have understood this fact that political leaders and corrupt bureaucrats are looting and grabbing country’s money and property by both hands.

Solution This problem can not be solved till the rise of strong will power in the political circles of the society. The present government should take the help of the Interpol to find out that which leader and bureaucrats has deposited his black money in which country and which bank. And that should be brought back to the country with the help of the governments of those countries. To stop the government officials and police officers from indulging into corruption, government should follow the American pattern. In America nobody’s job is secure and it keeps the fear of losing their jobs. As employees can be thrown out of system in the private sector by giving them three or six month’s prior notice, corrupt government officers should also be thrown out by giving them three or six month notice. This corrupt leaders and bureaucrats have started to take themselves as the rulers of the public instead of understanding themselves public servants. They earn and grab innumerable black money by forming this unholy relationship. If this practice is not put to an end then the economic progress of the country will get stopped.

Those who wish to buy new house, Realty giant DLF has some good offers of its new housing project at Gurgaon. It is a first of its kind move and the company has written to the people who had booked flats at its New Town Heights residential project, where construction is yet to start, of an amendment to its sale agreement. The change entitles customers to benefits that will work out to a price reduction, it says, of about 20 per cent.

The company will offer a 5% discount on the basic sale price. Another 10% rebate would be offered for timely payment. The changes also include an increase in the compensation rates for delays from Rs 5 per sq ft per month to Rs 10. DLF has rescheduled the payment plans as well.
Now, instalments have been linked to various construction milestones. All payments received over and above 35 per cent of the sale price will thus be treated as advance payment, and a rebate equivalent to 13 per cent interest will be allowed to the customer.During the times of global economic meltdown, the company said the move was in tune with its earlier announcement to cut the prices of residential projects by 15-20 per cent. “We have been implementing the price correction on a project to project basis. Different models were worked out in cities like Chennai and Bangalore. In Hyderabad, reduced prices were announced. Each model reflects the price correction happening in specific cities,” Rajiv Talwar, group executive director, DLF said. According to him, DLF’s attempt is to hold all existing clients, boost customer confidence and attract new customers, to ensure continued cash flow in the times of global recession. “We are trying to be responsive to the market,” he said.  

Customers, however, said it wasn’t such a generous thing. Commenting on the 10 per cent timely payment rebate, they said the rebate was on 65 per cent of the total amount, as 35 per cent was always paid as advance. “This means the rebate is effectively 6 per cent and not 10 as claimed by DLF. When the total benefit may not be more than 11 per cent, how can the company claim to offer 20 per cent discount?” they asked.The project-specific and city-specific plans also came under criticism. However, the customers agreed that the DLF move was not a legal compulsion but a goodwill gesture.The move has generated interest among other players also. Delhi-based property developer, Omaxe, said the company was working out a similar offer for its Greater Noida customers.

It was the settlement day of March series as tomorrow is Gudi padwa and the markets had to close all the settlements today itself. There was a stunning performance from the benchmark indices today. The Sensex once again had touched the 10,000 mark. It took almost 50 sessions and it managed to close above the same level. Nifty as well tested the 3100 mark but in the course of the day it retreated from that level during the last 10 minutes of the trade. There was good buying from the foreign as well as domestic investors. Local mutual funds were also active in midcaps on NAV propping.

Markets stayed positive as there was buying in infrastructure, metal, banking, technology, auto, FMCG and oil&gas sectors. It kept the mood positive throughout the day. Broader indices also followed the same trend but underperformed the benchmark indices. All sectoral indices ended higher barring Realty index.  The Sensex has touched an intraday high of 10,061.36, before closing the day at 10,003.10, up 335.20 points or 3.47%. The 50-share NSE Nifty shut shop at 3082.25, up 3.28% or 97.90 points, after hitting a high of 3103.35. The last time both indices had touched respective marks on January 7, 2009.

 The frontrunners include ONGC, Bharti Airtel, BHEL, TCS, L&T, Sterlite, Maruti and Tata Power which gained almost 6%, where as SBI, ITC, Infosys, Reliance Industries, NTPC, HDFC, HUL, ICICI Bank and HDFC Bank gained upto 4%. Due to F&O expiry, there was the highest turnover and markets reported turnover of more than Rs 90,000 crore for the third consecutive day. Total traded turnover stood at Rs 97,107.51 crore. This includes Rs 15,527.42 crore from NSE cash segment, Rs 76,957.01 crore from NSE F&O and the balance Rs 4,623.08 crore from BSE cash segment.

The wholesale price index (WPI) is very close to the 0% mark. Inflation for week ended March 14 came in at 0.27% — still in positive terrain — compared with 0.44% week on week (WoW). January 17 WPI inflation has been revised to 4.95% versus 5.64% provisionally. Everyone has very well-factored in a negative print in WPI and it is primarily on higher base last year. there will be lot more rate cuts going ahead. She forecasts another 50 basis points cut as far as reverse repo rate is concerned. But the Consumer Price Index still remains in double digit and that is something which hurts the common man.

European markets were trading marginally higher at the time of Indian closings. The FTSE was up 5 points, to 3,905. The CAC was up 8 points, to 2,901 and the DAX gained 15 points, to 4,238. US futures were also trading higher. The Dow Jones Futures was trading at 7,730, up 50 points and the Nasdaq Futures were up 14.5 points, to 1,248. Asian markets ended strong. Shanghai, Hang Seng and Straits Times gained 3-4%. Nikkei was up 1.84% and Kospi went up 1.2%. Taiwan moved up 0.75%.

It was the most strongest session in the year 2009 which benchmarked indices this year. The upward journey was continued in the markets on the back of strong global cues. There was a short covering in rate sensitive and fresh long build up in major heavyweights which boosted the markets to reach it higher and higher.

Nifty touched the 2700+ mark while the Sensex reached beyond 8700 mark. Banking & financial, technology, metal, oil & gas and capital goods stocks led this rally followed by auto, realty and FMCG stocks.

 The Sensex which runs on 30 shares touched the geight of 8793.21 before the day closed at 8756.61. the over all gains is that of 4.95%% or say 412.86 points. The 50-share NSE Nifty gained 101.80 points or 3.89%, to settle at 2,719.25, after hitting a high of 2726.15. Reliance Industries, Infosys, ICICI Bank, HDFC, L&T, HDFC Bank, SBI, ONGC, TCS, Tata Power, Bharti Airtel and Reliance Communication were leading contributors in this rally. However, only NTPC closed in red, was down 2%.

This is a real positive sign of the economy being revived and markets coming to the track. Mr. KV Kamath Said that he sees recovery in the fourth quarter of the current financial year across sectors except in the textile industry. Kamath, also the president of industry body Confederation of Indian Industries (CII), said he was basing his assumption on the interaction with members of the CII National Council meeting.

Talking about the Nify March Futures, it ended with 1-point premium. It added almost 40 lakh shares in open interest.this gives turnover of Rs9900 crores. The Nifty Put-Call ration was up by 1 point from 1.25 to 1.35. Stocks futures that added to the stream includes DLF which added 46 lakh shares, SAIL added about 30 lakh, ICICI Bank added nearly 22 lakh and Reliance Capital added about 11.5 lakh shares in open interest.

 The rally was led mainly by the positive global cues. When the Indian equities were closing, European marktets were toward high. FTSE went up 62 points, to 3,774. CAC was trading at 2,744, up 50 points and DAX was trading at 3,999, up 43 points. The US futures were trading with marginal gain; Dow Jones Futures were at 7,195, up 27 points and Nasdaq Futures at 1.166, up 3 points.  Asian markets ended higher; Nikkei 225 Average surged 5.15% and Straits Times was up 5.62%. Taiwan Weighted shot up 3% and Hang Seng gained 4.37%. However, Shanghai and Seoul Composite were up just 0.2% each 

It was for the first time in the history of IIM: Kolkata, Ahmedabad or Bangalore, everywhere the placement season was extended. In this time of global economic slowdown even the new asprirants are facing the heat. These management graduates haven’t got the blues over despite this exention. More over the salaries have fallen.

The new aspirants are not getting what ttheir seniors might have got. In Ahmedabad itself the salaries offered have dipped to 30%. Now the offered package is that around 12.5 lakhs. For those in Kolkatta, tthere is a slowdown by 12% and the average package that was offered is 14 lakhs. It was interesting to learn that the offers from the financial sectore were on high. Almost 40% of the offers were from the financial sector where as the number was 34% last year. 

This year there was another major change. PSU once again have started  coming to IIMs to find the talent. The only thing that was not interesting with the PSUs was that the offer was only for the average salary of 7 lakhs. In Bangalore as well the story is no good. Here the average salary offered was around 12 lakhs almost 30% lesser than what it used to be. Most of the recruiters have not participated because of the recruitement freeze that is going on because of economic slowdown and cost cutting.

 The companies are not hiring. Infact companies are facing a challenge in retaining the employees that they already have. Voluntary retirements, unpaid leaves etc are the measures that these companies have resorted to. PSU banks were among the top recruiters, hiring 34 of the over 200 students at IIM Calcutta. Things will be better next year says a report by global job survey firm Manpower. A survey of 3600 employers over seven sectors indicates slow but steady hiring could happen from the second quarter of 2009.  

While the meltdown has taken a global toll, India hiring will be the highest in the Asia Pacific region. Global meltdown has not spared even headline-making placements of Indian Institute of Management (IIM) grads. The average salary in the 2009 placement season at IIM-Calcutta witnessed a fall of 23 per cent over the last year.  The domestic average this year was Rs 12.7 lakh, with the highest offer at Rs 60 lakh per annum, while the average international package exclusive of bonus was $86,785 per annum. Several public sector units and public sector banks had recruited from IIM-C this year.

Public sector companies included IOC, NTPC, Coal India, and the national banks were Bank of Baroda and Union Bank of India.All the 265 students had got placement offers from various companies.  The foreign companies which recruited from IIM-C were Frost & Sullivan, BCG, A T Kearney, McKinsey, Barclays, Merrill Lynch and others.

 As they say: image is everything. Well the question is why does image matter when thoughts and predictions of doom and despair abound? As the global recession bites, most companies and countries are prompted to ask the question, “How do we get out of this mess?” rater then “how do we improve our image?”

Well for me this is short term thinking. Yes we know that there is a need to look hard at economic and business strategies for survival, but this has to be balanced by strategies for the longer term. A look at the top brands in the corporate world reveals that in adverse conditions they continue to invest in their brand, and use downtime to look at strategic brand improvements that can be put in place for the future when markets recover.

This is prime time for the world to work hard on the branding. Yes branding is what all the countries in this world need now. Barrack Obama was elected on the platform of change, and a large part of his campaign success rested on his declared determination to re- engineer and restore America’s global image. Now this was an emotional area as opposed to rational appeal that won him millions of votes. We know Americans want their brand and reputation back. Learning this lesson from the corporate world, the public sector has started branding the countries as branding has become constant cabinet agenda item. This is not surprising as a strong national brand can bring huge benefits including:
 currency stability,
restoration of international credibility and investor confidence
reversal of international rating downgrades
attraction of global capital
increase in international political influence
growth in export of branded products and services
increase in inbound tourism and investment
development of stronger international partnerships
enhancement of nation building( confidence, pride, harmony, ambition, national resolve)
attraction and retention of talent
reversal of negative thoughts about environmental, human rights and other matters of importance to global audiencesTo my mind India should be concerned with branding in order to gain such benefits. As it has positive growth and massive potential, it will continue to be faced with intense competition from other more developed as well as emerging economies such as China.  Confronted by situations where its products, service, systems and technology are easily replicable, the biggest challenges for any country is differentiation: the need to be perceived as being different and better than competitors, while marketing and selling similar things. India is no exception to this rule, and even though it presently has some cost leadership advantages, these may not be sustainable.

 Those who think about SATYAM be it being an employee, a shareholder, or for General knowledge purpose, on Thursday there was a news for them. A company insider, from human resources primarily, Mr. A. S. Murthy was appointed as new CEO of Satyam. Let’s hope the situation to change now. Also, Homi Khusrokhan, former MD of Tata Chemicals and Partho Datta, former CFO of Murugappa Group, who were tipped to be the CEO and CFO respectively, were simultaneously appointed as special advisors to the board to strengthen management and financial areas. This obviously means that they will not be members of the board.

Here I would like to emphasis that Murty is known to be extremely close to Ramalinga Raju. The only thing that differentiates him from the other Raju favorites in the company is that he is equally or I must say much liked by the Satyam staff who has welcomed this decision of his appointment. He is learnt to be consensus man.

 Satyam board also announced that it had received Rs.600 crores as bank sanctions which was part of a planned fund infusion towards the working capital requirements. There was also a news that salaries for January (globally) and the fortnightly salaries for February for its US-based associates have been met from internal accruals.

The board discussed with senior executives of the company. There were three names who were preferred. Based on this discussion and other feedback sessions Murty’s name came up in most of the lists. It is interesting to learn that company affairs minister Mr. P.C.Gupta once said that the new CEO of the company should be an internal man. Murthy was chief delivery officer in the company.

The board once again confirmed the key priorities and focus of the company will remain unchanged. The company will reach out to the key customers and associates to reinforce their trust and confidence. The company is going to assert the financial position and restate the Q3 results. It will evaluate the long term strategic position and options, legal liabilities and would deal with them, undertake the cost rationalization measures, resume the investment in the areas identified.

 New York-based legal firm Wachtell, Lipton, Rosen & Katzin is also appointed to address various class action suits — numbering about a dozen - filed against it in the US. It was, however, made clear that Latham & Watkins, lawyers of Satyam for over eight years will continue to support it in its ongoing dialogue with the US Securities and Exchange Commission (SEC).

The appointment of Mr. Murthy will definitely take care of the son of the soil sentiment as witnessed in the recent weeks in the company. He is well respected in the company. His ability to integrate teams effectively and to make a collective decision is critical for Satyam as the company is going through its revival phase.

    Though most of the external clients of the company were told that the new CEO would be an outsider and now that Murthy is appointed, it would be worth watching how company is going to explain this to the clients that the decision would ensure cleaning of Satyam. It is quite obvious though why the choice fell on an internal candidate. No external candidate would like to join a company that possibly would get sold off in next few months, so no one is expected to take a plunge if not sure about his future.     

Do you remember one name? Agha Hassan Abedi. Yes I m talking about early 1980s. There you go. He founded the Bank of Credit and Commerce International (BCCI). All of us know that in those days it was the fastest growing financial institution. It dint take to figure out that this success was based on deceit and fraud. Abedi fell into ignominy as quickly as he rose to the fortune he was commanding. The next name I would like to remind you is that of Ken Lay. Now we are in 1990s. He made Enron rise from $4.6 billion Company in 1990 to a company of $ 101 billion in 2000. In the next year the company was bankrupt. Lay was the most sought after man in the corporate community when the company was rising. He was awarded with huge rewards and recognitions and if anyone asked any question about the performance of company he was dismissed. We can see the same in Ramalinga Raju. He is the man behind Satyam being fourth largest IT Company. He was also conferred with the Golden Peacock Award for corporate governance last year.  Out of many these are just three names who were once colossus and then collapsed leaving behind nothing but shame. Question: why do men of such stature are compelled to defraud?

There is only one answer on Psychological bases. Hype. The impact of public accolades and media hype. They were once the centre of attention of shareholders, peers, financial journalists and industry federations. Every initiative of theirs was covered extensively. This made overconfidence step in. they started believing in the hype. They got so carried away with the exaggeration of third party analysts and media that they started focusing on expended disproportionate effort on sustaining the stories of their success where as they were required to look into managing cash flows.

Next question: how can the directors especially the independent directors allow such a situation to come to pass and what were the auditors doing? Answer: the auditors were sleeping. The independent directors are equally responsible for this situation as they are expected to have the knowhow to help the company meet its objective of profitability growth and social responsibility. They should also ensure adherence to legal and financial propriety.

Acquisition There is news in the India corporate world according to which engineering field giant Larson&Turbo is searching for the possibilities of acquisition of fraud hit Satyam. According to some company sources L&T Chief A.M Naik met central corporate minister Premchand Gupta on Tuesday and discussed the matter. On the other hand the new Director Trun Das has said that some national and international IT companies have contacted the board to acquire the company.  Company’s new board of directors’ meeting is scheduled to be held on 22-23 January in which the names of new CEO and SFO will be discussed and finalized. Tarun Das told that many Indian and foreigners have showed their interest to acquire Satyam. Director Depak Parekh has already said that ‘all options of acquisition are open’. It is being also said that an investment Banker can be appointed to study various options of acquisition.

Meeting Agenda Board will discuss the various names for the posts of CEO and SFO. Board has already sent the ball into government’s court. It must be learnt that government has kept the rights of appointment of the CEO and SFO with it. PMorgan and Goldman Sachs are among the banks short listed to advise the new board of fraud hit Satyam Computer. There is some positive news for Satyam also. According to some sources some big clients will kept on working with Satyam. According to GE spokesperson his company will keep on taking the services of Satyam it has not canceled any project. Malaysian Airlines has also said that it will carry on taking the Satyam services.

Investigation Meanwhile, CID raided the residents of relatives of Ramalinga Raju and recovered more than one hundred land documents and sale deeds that cover the purchase of hundreds of acres in the name of Ramalinga Raju’s family and some benami names. CID team raided on SRSR Holdings at Jubilee Hills and SRSR Advisory Services Private Limited at Begumpet. It must be learnt that SRSR Holdings at Jubilee Hills and SRSR Advisory Services Private Limited are a part of the Maytas Infra Limited promoters. Serious Fraud Investigation Office (SFIO) has extended scope of its ongoing probe according to the Centre Government directions and has brought Maytas Properties and Maytas Infrastructure also under the investigations. Former  Satyam directors, including Raju, his brother B Rama Raju and ousted interim-CEO Ram Mynampati, have been directed not to ‘alienate, charge, mortgage or sell any of their shares, securities and fixed assets, without leave of the CLB’. This move points out that they had siphoned off the company funds for their personal gains. It is also being said that Raju had confessed to diverting the Satyam funds to the two real estate companies owned by his family members. During the interrogation he admitted that land was purchased across Andhra Pradesh with the hope of making huge profits out of the real estate price rise.

Frauds Indian Foreign Affairs minister has termed Satyam episode as an isolated issue which has undoubtedly pictured the Indian economy in a ‘wrong frame’. He appealed to the international community not to take this episode as the representative of the Indian corporate sector. But Prime Minister Manmohan Singh has described it as a ‘blot on out corporate image’. In recent years Indian economy has been hit by man frauds. This has happened almost at regular intervals. It is happening because some people took the advantage of loop holes in the Indian judicial system and get away easily. This will kept on happening until those loopholes are not closed.

Fraud Indian IT giant Satyam’s chief B. Ramalinga Raju’s admital of fraud of 7,100 crore has sent shockwaves across the financial sectors in India. He had admitted to the Board of Directors that accounts were fudged over several years. It must be learnt that Satyam is India’s fourth largest Information technology company. He confessed that company’s liabilities were understated while the debtor position was overstated. He also confessed that company’s bank balance of 5,040 crore and the accrued interest of Rs. 376 crore never existed. apologizing to all ‘Satyamites and stakeholders’ he said, ‘The gap in the balance sheet has arisen purely on account of inflated profits over a period of last several years. Every attempt made to eliminate the gap failed’. With this development, company shares rates have fallen almost 80 percent. Company shares that were selling at 179.10 closed at 39.95 after Raju’s disclosure. Satyam has 53,000 employees and operates in 65 countries. It is said that it has 5000 client companies across the world.

Cover-up Attempt But he also stated that neither he ‘nor the Managing Director took even one rupee/dollar from the company and have not benefited in financial terms on account of the inflated results’. This indicates that even the top company officials were not aware of company’s financial condition till the ‘last moment’. The whole of the drama had started three weeks ago when Satyam had to abandon its attempt to acquire Maytas Infra and Maytas Properties, promoted by Mr. Raju’s sons, on December 16. It looks that this move had been taken to ‘cover-up’ the financial irregularities. But the company had to back tract because of shareholders’ objections.

Investigation The Securities and Exchange Board of India (SEBI) and the Registrar of Companies (RoC) had begun investigations at the company’s offices after the7, 100 crore fraud surfaced in Satyam Computers. SEBI team had visited many Satyam offices and had seized books and records. There were rumors that Satyam chief has fled the country but his advocate S. Bharat Kumar denied such reports and said, ‘Mr. Raju is very much available in Hyderabad.’ Centre government has decided to cover eight more firms in which Ramalinga Raju and his family members have their assets. This includes Maytas Properties, Maytas Infra and Satyam BPO. The government has dissolved the existing boards and has decided to form a new board to run the ‘falling tower’. Meanwhile, Ramalinga Raju along with his four close relatives had surrendered before the Andhra Pradesh government on January 8. But on the other hand Andhra police claimed that they had not surrendered but were arrested by the police team. It is being said that Satyam chief will have to face almost 10 cases. It is being said that Raju had diverted the Satyam profits to finance and maintain the Maytas Infra. It involves the buying land in and out of the state and many other company assets. Meanwhile many banks who deal with Satyam have submitted their business deals with Satyam to the Reserve Bank of India. There are some reports that some banks had extended loans to Satyam.

This fraud has sent wrong signals across the world about Indian IT sector. Indian IT sector is already suffering badly because of International financial crisis and this development will deteriorate the condition. On the other hand it has also exposed the failure of Indian financial system that failed to notice the ‘years old financial fraud’.

Announcement The Indian government on Friday cut the prices of petrol by Rs. 5 and diesel by Rs. 2 per litre respectably as an interim measure to give some relief to the ‘aam janta’ of India in the wake of falling international crude oil prices. Petroleum Minister Murali Deora told that this price reduction is an ‘interim measure’ and government would take further decisions by keeping an eye on the global prices of oil. The reduction will take effect from Friday midnight. With this reduction petrol will cost Rs. 45.62 a litre and diesel Rs. 32.86 in the national capital Delhi. But government has not changed the prices of LPG (cooking gas) and kerosene.

Earlier Prices Crude oil prices had touched the USD 150 a barrel mark in July putting the Indian oil companies in a very tight position. They were facing huge losses because of subsidies. To stabilize their position and end their cash crunch government of India had increased the prices of oil in June. Government had raised the prices of petrol and diesel by Rs. 5 and Rs. 3 a litre, respectively. The price of LPG was raised by Rs. 50 per cylinder. When the UPA government had took over from the NDA government the crude oil price in the International market was around USD 70 a barrel. But now it has fallen to the record low of USD 43.5 a barrel. If compared with the earlier crude oil prices, the present price reduction is very less.

Inflation Some leading news papers of India had published the news on Friday that government is thinking to reduce the prices of petrol and diesel by Rs. 10 and Rs. 5 a litre respectively and of LPG by Rs. 50 a cylinder. Falling oil prices will bring the inflation down and will give a big boost to the economic growth rate. With the reduced prices, the prices of some essential commodities will come down thus giving a big relief to the poor and lower sections of the society. It must be learnt that a few weeks ago, inflation had crossed the 12 per cent mark and Manmohan Singh led UPA government was being criticized by all the sections of the society for its failure to check the prices. But in November prices started to fall that decreased the inflation rate.

Public Global economic crisis caused the downfall in crude oil prices in the international market thus giving a big relief to the oil importing countries. Indian government was ready to reduce the oil price during the month of November but it had to wait because of election code of conduct in wake of assembly elections in some states. Because of Mumbai terror attack, UPA government it in a very tight position and the oil price reduction will save it from the public wrath to some extent.

Inflation After remaining near 12 percent the Indian inflation rate has ‘suddenly’ fell sharply below 10 percent. According to some reports published in leading Indian newspapers inflation rate had fell sharply from 10.72 percent to 8.98 percent after the period of 21 weeks on November 1. It has been said that decline in the price of fuel items like naphtha, jet fuel, furnace oil and light diesel oil is the reason behind the decline in inflation rate in India. Decline in the prices of iron, undefined oil, fruit and vegetables, tea and spices have also played an important role. The inflation rate was recorded 12.42 percent for the week ended on September 9.

Reasons The sudden decline in inflation rate has given rise to many doubts. Earlier it was being expected that the inflation rate will slip down to single digit after the harvesting season. The sharp decline in the inflation rate smells some ‘foul play’. Elections have been scheduled to be held in six states in the months of November and December and Lok Sabha elections will be held early next year. It can not be denied that decline in inflation rate has brought to “bring cheer to the UPA government”. It was being expected that the price rise will be major issues during these elections. Though the prices of ‘house hold’ commodities have not declined but the inflation has suddenly come down. From the present circumstances it looks that the reasons of sudden decline in inflation rate are political instead of economic.

Face-Saving Two months ago, Congress led UPA government was under attack from the opposition because of various reasons. Its failure to adequately tackle communal violence in Orissa and Assam, serial bomb blasts in some major Indian cities, natural calamities and rising prices had brought centre government’s popularity to its lowest point. Decline in the popularity of UPA government was the major reason that all its partners had tried ‘all means’ to save it form the earlier downfall during the trust vote motion on the issue of Indo-US civilian nuclear deal. Now all the ‘burning issues’ have cooled down and only inflation was the issue that needed to be ‘dealt with’ in time. Thus by bringing down the inflation rate, without any ‘genuine decline’ in the prices of daily-use commodities, the UPA government has cleared its way to go into the elections with some ‘face’.

Alliance After alliance between Jet Airways and Kingfisher Airlines, the former had decided to sack its 1900 staff members to cut the costs. Both the companies were loosing crores of rupees per month because of higher fuel prices. They had decided to rationalize the flights and end some international operations. After it Jet Airways management had issued sacking orders of 1900 staff members to keep the company afloat. It had led to protests in major cities and some politicians including Aviation Minister had demanded the probe into the matter.

Protests And Criticism MNS chief Raj Thackeray had threatened that his party workers will disrupt the Jet’s operations if the employees were not reinstated. On the other hand Labour Ministry had also showed its concerns and had decided to go ahead after the meeting with the Jet management and sacked workers on Friday. Jet Airways management had decided to sack employees across all the sections who were either probationers or had served for less than six months. The announcement had led to protests by the sacked employees in the major cities. More that 50 employees had demonstrated at Indira Gandhi International Airport in the Capital. Even the Oil Minister Murli Deora had launched a direct attack on Jet Airways Chief Naresh Goyal.

Reversal Of Order But everyone was astonished to see the development when Jet Airways Chairman Naresh Goyal apologized for the sacking move on Friday and requested them to resume work. He said that though the management had decided to sack the employees but it is his personal decision to reinstate them and work together to make Jet Airways a big company. Civilian Aviation Minister Praful Patel has welcomed Goyal’s decision of taking back the staff. He said that he had talked to him to rethink about the move. But on the other hand Goyal asked the sacked employees to return to work from today (Friday) because he did not wanted ‘to see tears in the eyes’ of his employees who are like his ‘children’ to him.

Politics A race has started between politicians to take credit for the reinstatement of the sacked employees. At one hand Praful Patel is saying that his words have forced the Jet Chairman to roll back his decision. One the other hand some people have said that it is the result of the tough stand taken by Raj Thackeray. But Goyal has said that he has not reversed the move because of any kind of political pressure.

Nano’s New Home After its exodus form Singur, Tata’s Nano has found its new home in Sanand near Ahmadabad in Gujarat state. West Bengal’s loss has become Gujarat’s gain. An agreement was signed between Gujarat Government and Tata Motors on Tuesday, October 7 in Gandhinagar. The announcement was made on the same day and Gujarat CM Narendra Modi and Tata Motors Chairman Ratan Tata were present at the press meeting where the announcement was made. It is the coincident that Narendra Modi government has completed its seven years in power on October 7 and a 2000 crore project has been signed on the same day. Thus Gujarat government has celebrated the day in a different manner. It is being considered Narendra Modi Government’s biggest achievement. Tata officials have said that project will be completed almost in 12 months. It will create thousands of direct and indirect job opportunities in the state and will also will be influential in attracting more investment.

Land Tata Motors had taken 1000 acres of land from the West Bengal government on lease but Tata had to face agitations form unwilling farmers and project had been marred by controversies ever since the starting of it. Nano project had fallen prey to the narrow minded politics in West Bengal. But Gujarat has given 1100 out of 2200 acres of land owned by the Gujarat Agricultural University for running experimental cattle farm and crop cultivation. GUA has transferred the land to the state government which has allocated it to Tata Motors.

Deal Many states were trying to attract Nano project ever since the Singur pull out announcement. In fact Tata officials had visited Andhra Pradesh to relocate the Nano plant. But Gujarat has won the competition by removing the bureaucratic hurdles in a speedy way. Gujarat government had competed all the process only in ten days. There are many factors that worked in attracting Tata Motors to Gujarat. First there is no chance of any kind of agitation as the land was owned by the state government. Secondly Even the warmers have given their land with great enthusiasm that was required for widening the road to the project site. Gujarat is known for its investment and industry friendly atmosphere. Ratan Tata, in an interview has said that Gujarat deal is better ever than Singur land deal as it is unencumbered and has been sold to Tata Motors at prevailing market prices.