The Maruti 800 will be phased out of 11 cities.But the car triggered the growth of a sector that is expected to generate output of $145 billion by 2016.
26lakh UNITS OF Maruti 800 cars sold so far in 26 years
The Flight Everyone Could Hop On To
Arati Menon Carroll
The year was 2002 and the Indian airline industry was creeping towards a standstill.Amid growing cartelisation,consumers were being charged inordinate amounts to fly,and only a lucky few could afford it.The economic indicators,meanwhile,were a counterpoint to this there was more money in the hands of the aspiring middle classes than ever before.Watching all this unfold was a certain Captain GR Gopinath.Having tried his hand at multiple businesses,he was looking out for his golden goose.It came to him on a helicopter ride from Goa to Bangalore.Flashing at him every few seconds were hundreds of dish antennae that dotted the rural landscape.Later,he was heard saying,for far too long,Indians had thought of India as a country of a billion poor,hungry people.This sight changed it for him.He realised that it was now a country of a billion hungry consumers.At that time less,than 1% of Indians travelled by air;Gopinath decided that his new business model would address the other 99%.Air Deccan became Indias first low-cost carrier and quickly climbed aboard an ambitious growth trajectory.In four years,it grew to revenues of 2,500 crore,deploying 45 aircraft across 67 cities,many of them having their first airport.India,Gopinath had decided,didnt just live in Mumbai and Delhi,it lived in Gwalior,Jabalpur and Kannur.Gopinath worked extensively with the civil aviation ministry,the Airports Authority of India and the home ministry,pushing for airports to be opened or upgraded each month.The other challenge was that the stock Boeings couldnt land in these new,small airports.So,smaller aircraft were purchased and routes were designed around linking small towns with each other and to metro cities.Gopinath also had to innovate on the distribution front to simplify air travel.If people in Himachal Pradesh wanted to buy a ticket they couldnt possibly come to Delhi to buy it.Setting up brick-and-mortar offices in every small town wasnt cost effective,so Deccan equipped 1,000 post offices with a ticketing desk in return for a 5% service charge.Petrol stations,internet cafes,even bakeries had Air Deccan booking capabilities.It wasnt scared to use technology either,building VSAT broadband lines and starting one of Indias first call centres with secure payment gateways.Ultimately,Gopinath always said,you had to find ways to fill the planes and the best way to do that was by putting inventory in the hands of the consumer.In four years,Air Deccan became the biggest airline company in the country and spawned copycats.Critically though,it had not broken even.Gopinaths strategy of growing fast,so that scale would crunch many cost aspects,didnt ensure profits.In the end,unable to overcome investor skepticism,he sold it out to Kingfisher in 2007 with assurances that the brand would be retained.It wasnt.Today,Air Deccans competition is booking profits on the model it spearheaded.Low-cost airlines are matching full-fare airlines in market share and even exceeding them in seat occupancy,netting new flyers as well as converting the old ones.
THE BHAKRA NANGAL DAM
A Temple to a Nations Vision of Growth
The dam was newly-independent Indias prized achievement.Few projects came close in terms of scale and self-reliance.It played a crucial role in making India self-sufficient in food production
Bhakra-Nangal was the first of the large dams that former Prime Minister Jawaharlal Nehru called temples of modern India.Widely perceived to have played a crucial role in India becoming self-sufficient in food production,it gave a newly-independent India a feeling of self-reliance and pride in its achievements.Located in the village of Bhakra in Himachal Pradeshs Bilaspur region,amidst the lusciously green Sutlej-Beas river valley,the dam took 12 years to build,starting in 1951.Towering at 740 ft,it is one of the highest gravity dams in the world.Three times taller than the Qutub Minar,it irrigates 7 million acres in Punjab,Haryana,Himachal Pradesh and Rajasthan.The dam sent ripples beyond the region.For every 100 of direct benefits irrigation and hydropower Bhakra generated 90 in indirect benefits for the regional economy,says a 2005 study that assessed its impact.Besides benefitting agricultural production,the dam has been used for transportation and by the fisheries industry, says AB Agrawal,chairman,Bhakra Beas Management Board.This was Nehrus vision for the project when he commissioned it.He inaugurated the Bhakra Canal System on July 7,1954,and dedicated the dam to the nation on October 22,1963.The project is considered landmark for another reason: Indian planners and engineers took some ground-breaking decisions.One was to build the Bhakra Canal System before the dam,while the other was to construct the dam with the help of foreign experts.The decision to build the Bhakra Canal System before the dam,so water supply would be available to farmers as early as possible,is a landmark in the history of river valley projects.The uniqueness of this project was in the soundness of its management and coordination,says Agrawal.In the 1950s,high-tech machinery was not available.Coordinating and managing small units of manual work was a mammoth task,which this project accomplished.Today if we had to mobilise manpower on such a huge scale,it would be very difficult, says Agrawal.Nearly five decades on,the dam has run without major hitches.A lift,with a carrying capacity of 24 persons,built back then at the side of the dam is still in operation without any jerks, says Agrawal.Interestingly,Nehru visited the project 13 times during its construction because of his fondness and pride for the project.The place where he stayed during his visits has been kept intact;even the crockery he used at the time has been preserved, says Agrawal.The then Punjab chief minister,Bhimsen Sachar,has said Nehru had resolutely refused to let the dam be named Nehru Dam. Instead,the Prime Minister suggested to the Bhakra Control Board that when the work was completed,a simple memorial be erected.The Bhakra Dam project is today used as a model to justify large dam programmes elsewhere in the country.The Bhakra Beas Management Board irrigates 50,000 sq km of land and provides 2800 MW of hydropower.The dam has two exclusive power houses with a total capacity of 1,325 MW on either side of the river.The power generated at Bhakra power houses is distributed among Punjab,Haryana,Rajasthan and Himachal Pradesh.But if the dam has its votaries,it has an equal number of opponents.It led to the displacement of 36,000 people and submerged Bilaspur,a town with a population of 4,000 people,according to a report titled,Unravelling Bhakra: Assessing the Temple of Resurgent India by Manthan Adhyayan Kendra,headed by Shripad Dharmadhikary.Many of the oustees have still not been settled fully,and government efforts in this direction have been sporadic,says the report.The report also points to the environmental impact of the dam which includes the loss of forests,wildlife and fishes,and an increase in the incidence of disease among those living near the dam because of the excessive use of chemical fertilizer and pesticide in the command area.Evaluating the impact on the ecological health of Punjab and Haryana has been difficult because of the lack of data before the dam was built and not enough monitoring of the area after it was constructed.Agrawal disputes the numbers,but says a balance has to be created between large and small dams.Large dams help meet demands for drinking water,agriculture and irrigation, he says.
TOTAL PROJECT COST
TYPE OF DAM
Concrete straight gravity Height above the deepest foundation: 740 ft Height above the river bed: 550 ft Elevation at top of dam above mean sea level: 1,700 ft Steel used: 101,600 TONNES SOURCE: WATER RESOURCES DEPARTMENT,GOVERNMENT OF RAJASTHAN
22 OCTOBER 1963
BHAKRA DAM DEDICATED TO NATION
Pandit Nehru declared at Nangal on November 17,1955 that India would,in the days to come,undertake bigger projects than Bhakra-Nangal and that dreams for the country’s progress were bound to be fulfilled
12 YEARS THE TIME IT TOOK TO BUILD
Road to Prosperity Golden Highway
INDIAS MOST AMBITIOUS road infrastructure project is said to have begun by fluke.As the story goes,soon after taking charge for a stable third term as Prime Minister in the NDA government,Atal Behari Vajpayee was to address a business gathering at Siri Fort auditorium in New Delhi.But he wasnt happy with the speech handed to him;it lacked punch and didnt say anything substantive,he pointed out.
A last-minute change was made and in his revised speech,Vajpayee announced the linking of Kashmir to Kanyakumari through a modern highway,to be built through public private partnership.It had a strong patriotic ring to it,and delivered in Vajpayees celebrated oratory,was a powerful message to the business community.But at 1,Eastern Avenue,Maharani Bagh in South Delhi,members of the newly-formed National Highways Authority of India were caught unawares watching the PMs speech on TV.So were ministers in the Union Cabinet.
The project was staggering in scale and scope,and unprecedented,and no one had any idea of how it would be achieved.Vajpayees plan didnt seem viable under a PPP model as the proposed routes were not remunerative enough.Later,it was quietly changed to whats now Phase-II of the 60,000-crore National Highways Development Programme,known as the North-South and East-West corridors.And what took its place was the Golden Quadrilateral,the first phase that would connect the four metros Delhi,Mumbai,Kolkata and Chennai through four to six-lane expressways,along roads connecting these centres with ports.It was the first time in independent Indias economic history when a major road project encompassing the whole country was launched, says Vinayak Chatterjee,chairman,Feedback Ventures,an infrastructure services company.
For two or three centuries roads had been laid by the Public Works Department.Now they were being handed over to the private sector.It was a huge mindset change. What it now needed was someone who could take this huge project forward.Bhuwan Chandra Khanduri,a retired major general with 38 years in the Armys Corps of Engineers,was the man for the job.Assuming office as minister of state with independent charge for road transport and highways in November 2000,Khanduri was hands-on and focused on execution.The initial target for completion of the proposed 5,846 km was 2004.The initial set of challenges included land acquisition which took several months,arranging funding from the World Bank,and getting enough qualified contracting firms to execute.Only 10% of Indian firms were up to the mark.We had to generate confidence in Indian contractors that we could do this. One way was to provide exemption in customs duty for importing advanced road construction equipment.And while there was a penalty on overruns,Khanduri introduced something unique a performance bonus of 1% of the contracted amount for completing before the deadline.
That was a huge amount.I gave out 4-5 crore as bonus myself, he says.Such was the zeal to get things done that contractors did not wait for land acquisition money to be disbursed by the government (which took up to six months),and paid farmers from their own kitty.Levying toll tax for vehicles on these roads was also met with resistance.In the Rajya Sabha,my answer to a question about toll taxes went on for 55 of the allocated 60 minutes, he recalls.In 2003,while inaugurating the coastal road connecting Andhra with Orissa,Khanduri was confronted by roadside motor repair mechanics,who told him how this would kill their livelihood.Khanduri laughed,suggesting they set up shop near the restaurants that would come up along the highway.With the Golden Quadrilateral nearly complete at 5,811 km,Indias road network,at 42.4 lakh km,is nearly twice its length two decades ago.National highways have more than doubled to 70,000 km in this period.To think that one speech could have made this happen..
INDIAS FIRST SATELLITE ARYABHATTA LAUNCHED
When the Satellite Reached For Stars
On April 20,1975,the reader could be forgiven for not paying much attention to the days main headline,even if it was the announcement of a groundbreaking event the launch of Indias first-ever satellite,Aryabhatta,into space.In 1975,India was ruled by chaos.On the brink of a socialist revolution,labour militancy in the country was at its peak,with the existing political leadership in complete disarray.Bombay,the countrys commercial heartbeat,had come to a standstill,with union leaders such as George Fernandes forcing the citys myriad mills and factories to shut shop.Barely a month later,Prime Minister Indira Gandhi,under attack by calls for total revolution,but supported by a weak-kneed President,Fakhruddin Ahmed,promulgated her infamous state of Emergency,and suspended all civil liberties.In the backdrop of such massive civil and political unrest,the launching of the Aryabhatta satellite from the remote region of Kapustin Yar in the erstwhile Soviet Union,by the still-nascent Indian Space Research Organisation (ISRO),had perhaps not received the importance it deserved.Named after the fifth-century mathematician and astronomer,the satellite was built to conduct experiments in solar physics,among other things.But more importantly,Aryabhatta served as the blueprint for ISRO to make future satellites,especially in the still-emerging areas of communication and television broadcasting.It also played a pivotal role in developing and gathering information in resource surveys and meteorology.
The launch of the satellite,on April 19,1975,came at a time when India was looking to build a strong and thriving scientific and technological base.Aryabhatta had ensured that the country became the 11th nation on the planet,and the third in Asia after Japan and China,to send its own satellite into space.But the programme had undergone its share of time overruns.Originally scheduled for launch in 1974,there were delays due to the fabrication of the flight model.The help provided by the then Soviet Union kept the satellite in orbit.The launch of the satellite had a political impact too,with Mrs Gandhi brazenly using the scientific achievements for her own gains.Never had the term,India is Indira,and Indira is India, coined by her political sycophants received such a boost.Further,the actual gains from the Aryabhatta satellite have been the subject for much debate.A power failure halted all experiments after four days in orbit,and all signals were lost after barely five days of operation.The satellite re-entered the Earths atmosphere in February 1992.Thirty-six years down the line,with ISRO now confidently stating their mission to put a man on the moon by 2015,the Aryabhatta satellite may become just another footnote in history.But there is no doubt that the satellite was one of the first-ever symbols that the so-called cowdung society had finally entered the space age.
Named after the great India astronomer ARYABHATT was luanched by the erstwhile Soviet Union on April 19,1975 from Kapustin Yar using cosmos -3M Launch vehicle
Fire in the Desert The Buddha Laughed
FOR THE SIX MEN SITTING IN A sparsely decorated room on Race Course Road,it was an anxious wait.They were often acknowledged as the backbone of the ruling government.But,on that hot and muggy afternoon of May 11,1998,their thoughts were dominated by something beyond the usual political horse trading,which they the ultimate power brokers had no control over.At 3.47 pm,even as the nuclear shock waves tore through the swirling sands of the remote Pokhran test range in the Rajasthan desert,the phone rang incessantly from an adjoining room.Brajesh Mishra,the Prime Ministers principal secretary and lead enforcer,lifted the receiver hesitantly to hear an excited voice exclaim: Done! For Atal Behari Vajpayee,Lal Krishna Advani,George Fernandes,Yashwant Sinha,Jaswant Singh and Pramod Mahajan,it was a moment of triumph.The BJP-led government had delivered what it had promised to ensure Indias destiny as a nuclear power.With Operation Shakti,India had spectacularly gatecrashed into the hitherto-rarefied nuclear states club and rewritten the existing global strategic agenda.The Buddha had not just smiled,it had laughed ferociously.The story of how the countrys bomb makers,with the invaluable help of the Indian Army,went about making India a nuclear state could have come straight out of the pages of a pulp fiction novel.Subterfuge,intrigue,code words and red herrings the saga had it all.The level of preparation was awe-inspiring.For example,to avoid detection by CIA satellites that were closely monitoring the area,the mounds of sand used to seal the shafts where the explosions were to be conducted,were actually aligned according to the direction of the wind.The army had realised that,in 1995,the US satellites had detected fresh activity in the area by studying how the wind shaped the mounds.The audacity of the May 11 nuclear tests shocked the world,and highlighted the massive failure of the American intelligence agencies.However,in India,a feeling of emotional triumph and euphoria swept the nation as the news broke,with the countrys political elite,barring the Left,coming together to celebrate the so-called Swadeshi bomb.The comparisons to the 1974 tests could not have been starker.Pokhran-I was conducted barely a decade after India received a sound military whipping from China over border disputes,and the nation was yet to formulate its nuclear deterrent policy.The tests had done little to showcase Indias nuclear weapons capabilities,or to increase its standing in the international community.The 1998 tests had a far stronger shock value.With the decline of the Cold War,the arms race had practically ground to a halt,and countries were well on their way to reducing their nuclear arsenal.Separately,given the tension in the region,nuclear testing was perceived as not only the worst strategy possible to aggravate the already-fragile security environment,but was also seen as a direct blow to the ongoing global non-proliferation efforts.The BJP,which was leading the coalition government at the Centre,had long promised,as part of its national agenda,to induct nuclear weapons into the countrys arsenal.Separately,the success of the tests were a political manna for Mr Vajpayee as it served as a binding force that kept the fractious coalition government together.The international communitys response was swift,with then-US President Bill Clinton immediately imposing stiff sanctions on the country,and other Western nations following suit.The term,rogue state,was also bandied by certain sections of the international media.Indias political elite were accused of having an under-siege mentality and questionable motivations in their pursuit of making India a nuclear weapons state,and the declarations of the Vajpayee government were seen as a perfect example of Hindu nationalism riding a Viagra high.The aftermath of Pokhran-II also saw Pakistan coming out with its hitherto clandestine nuclear programme and declaring itself a nuclear weapons state by conducting reciprocal tests at Chagai.Thirteen years down the line,the geopolitical agenda has once again seen a complete turnaround.The Washington-New Delhi strategic honeymoon continues to bloom,with the US looking to ally itself with India to check the ever-growing Chinese threat perception in the Asian theatre.1998 seems a distant memory now.While the nuclear tests may have shocked the global community in 1998,it has now been forced to recognise Indias value as an anchor of democratic stability,especially in the East Asian region,and which has been further enhanced by its growing economic clout.Few would disagree with the perception that Pokhran-II,however inexplicable,kick-started the countrys revival of faith in itself.
18 MAY 1974
FIRST NUCLEAR DEVICE DETONATED
THE FIRST SHOT
Pokhran-I was conducted a decade after India received a sound military whipping from China over border disputes.But the tests did little to showcase Indias N-power
The Dabhol Power Project,in which Enron had invested $900 million,was mired in a series of controversies.It was later re-named Ratnagiri Gas and Power Pvt Ltd (RGPPL).It began operations in May 2006,after a hiatus of over 5 years.
56 PER CENT Average literacy rate of Pokhran
FIRST RELIANCE IPO
From Aden to Eden Fabric of a Journey
DHIRUBHAI AMBANI HAD a penchant for doing things in uncommon ways.That led him to focus his conversation with a broker about the superiority of his textiles unit,a few days before the initial share sale of Reliance Textiles Industries in November 1977.Anyone else in his position would perhaps have requested the broker to help sell his IPO.Dhirubhai did never ask me to buy his companys public offer.He repeatedly enquired about how did I find his textiles plant in Ahmedabad.That struck me the most, recalls Ajit Day,owner of a Kolkatabased share brokerage Dayco Securities.Day was part of the 30-odd brokers who were flown to Mumbai from across the country to participate in the brokers conference that RIL organised to sell its IPO.As part of the package,they were sent to RILs textiles unit in Ahmedabad.On return to Mumbai,a white-safari clad man sporting chappal came to see them well before the conference in a south Mumbai hotel.That man introduced himself as Dhirubhai and sat on the floor,legs folded.And spoke about his companys expansion at great length.The 22-year-old Day was bowled over by Dhirubhais simplicity,a scarce commodity in Indias family-run business houses.He was also moved by Dhirubhais ability to explain his grand vision in common mans language.Next morning,Day bought 2,000 shares at a premium in the Mumbai grey market and a suit length of Only Vimal the RIL brandat a discount (that he got in the conference).Going back home,he preached in favour of the IPO.Day proved to be right.His Only Vimal suit length lasted for over 10 years and RIL shares brought many-fold returns.Day,who later became President of Calcutta Stock Exchange,then Indias second biggest bourse,held on to those RIL shares till recently.Day and his clients were among the 58,000 retail shareholders who bought 2.82 million RIL shares,helping Reliance Textiles Industries (the then avatar of RIL) to raise 2.82 crore in Indias largest IPO then.To put the number in perspective,the synthetic filament yarn maker posted a turnover of 65.08 crore in the 15-month period ended September 1976.It was implementing a 12.5 crore expansion plan.Cut to present: RIL posted turnover of 192,461 crore last year.Dhirubhai was perhaps the first entrepreneur of this era to show that one could start a large business in India without seeking support from government-owned lending institutions, says Jayanth R Varma,a Professor at Indian Institute of Management,Ahmedabad.Dhirubhai found merit in raising funds through an IPO,a hitherto uncommon avenue.Most of the entrepreneurs in his times would rather go to the state-owned lenders to borrow money.And they would later offer equity to the lenders by converting loans at par.Dhirubhai was too confident to give away control to state lenders at a cheap rate.Taking debt from lenders would also attract their intervention.Dhirubhai hated it too.That IPO sparked a revolution in India.Dhirubhai,who often drew criticism for evading taxes and being non-transparent,was widely credited for setting the stage for equity cult in the country.Post the public issue,he won investors confidence by delivering performance.Later,he launched non-convertible debentures to retail shareholders,another first in India,to cash in on the trust he earned from retail investors.His timing was also correct: the financial market was slowly being de-regulated in the early 1980s.He cashed in on his performance and the conducive environment by launching innovative products like convertible debentures.Dhirubhai was one of the creators of the market;he was also a product of the market, says Varma.In the early 1970s,the government forced multinational companies to limit foreign ownership mostly at 40%.It was capped at 51% for some technology companies.MNCs were asked to offload the balance shares at the government determined price.Retail investors took advantage of this law and got MNC shares cheap.They discovered the benefit of putting in money in equity.It was an inflection point which Dhirubhai later cashed in on with his companys initial share sale, says a large investment banker,who does not want to be named.Both were mutually reinforcing cycles, adds Varma.The banker said Dhirubhai might not have seen the same success had he launched his public issue 10 years ago.According to Varma,Dhirubhais advantage was that he could foresee the policy changes and did prepare himself accordingly.Thats why when the government permitted the domestic companies to raise funds from the overseas market,RIL was the first to launch a global depositary receipt issue in Luxembourg in 1993.Dhirubhai had convinced retail shareholders that he would take good care of their investments.His standing to common investors was God-like.No wonder,he had to accommodate over 35,000 investors at his AGMs in the 1980s.
RELIANCE GOES PUBLIC
58k NUMBER of investors who subscribed to the first IPO
Aditya Vikram Birla spearheaded the Birla groups march overseas,with operations in Thailand,Malaysia,Indonesia and Egypt,as well as diversifying into areas like cement,chemicals,financial services and software.AV Birla died at 51,and his son,Kumar Mangalam Birla,took over the reins at the age of 28.
A Mouthful of Sky & Some Soap
The Gulf War opened the floodgates of cable television for Indians whose daily fix of news came from radio and Doordarshan.It gave them footage that was available only in the developed world
It took the mother of all battles the Persian Gulf War that began in 1990 for Indian viewers to wake up to the excitement of realtime news coverage.As images of bombardments and missile attacks flashed on the small screen,broadcaster CNN and its journalists like Bernard Shaw and Peter Arnett became household names.It was indeed a baptism by gun (fire) for Indians who,till 1990,were accustomed to getting their news fix either from the radio or the state-run broadcaster Doordarshan.The Gulf War,seen on CNN,opened the floodgates for satellite television in India.Star TV then a joint venture between Hutchison Whampoa and its owner Li-Ka Shing and Subhash Chandras Zee TV followed even as Doordarshan expanded its bouquet.Since then,the Indian market has grown to over 300 satellite television channels slugging it out for advertising revenue thats worth an an estimated 22,000 crore.Ronnie Screwvala,founder & CEO,UTV Group,says that before the advent of satellite television the business was primarily concept selling.As at that time there was only one terrestrial channel (Doordarshan),Indians didnt even have the concept of a remote for their TV let alone switching to another channel or the concept of choice, says Screwvala.The choice began with India getting a taste of entertainment right from real time war to live sports to high-fashion and high-drama soaps like The Bold and the Beautiful and Santa Barbara.The open sky coincided with the liberalisation of India and led to the creation of generation X children of liberalisation who opened their eyes to see India looking to globalise and shake off its socialist moorings.The Gulf war also made me appreciate the reach,influence and importance of TV as a communication medium.I was convinced that India needed an impartial independent TV medium,which was possible only though the private sector, says Subhash Chandra,chairman,Zee Entertainment Enterprises and Essel Group.Over a period spanning two decades,India has over 100 million households with cable & satellite television.Along with cable & satellite television,direct-to-home (DTH) broadcasting has witnessed an annual growth of over 25%,with an estimated 20 million households currently.Satellite television has had a profound effect on Indian viewers,exposing them to geographies,cultures,cuisines and personalities they would never have otherwise encountered from the security of their living room.It also gave Indians the confidence to aspire for the best things their counterparts in developed markets were purchasing.Such exposure also helped narrow the gulf between Bharat (rural India) and the countrys city-slickers.Audiences began to get exposed to shows much bolder and fresher and more interactive, says Screwvala.As the subscriber base has grown,and the number of channels too,judicious media planning for brands to communicate more effectively by cutting through the clutter has resulted in numerous innovations.For example,a telecom brand initiated a media roadblock across well-known general entertainment channels by simultaneously broadcasting the same campaign to announce a change in brand name.Content providers meantime have been taken to the cleaners for regressive soaps and over-the-top news reporting.But then it has not been all down hill.As Chandra says: Yes,there have been a few drawbacks too in terms of regressive and commercialised programming,especially in the news and information space.However,in the final analysis the benefits far outweigh the drawbacks and this augurs well for the influence and existence of satellite channels in the daily lives of individuals.
Starting with 41 sets in 1962 and one channel,by 1991 TV in India covered more than 70 million homes The viewing population had also grown to more than 400 million individuals watching more than 100 channels India now has over 134 million households (out of 223 million) with television sets,of which over 103 million have access to Cable TV or Satellite TV,including 20 million households that are DTH subscribers It is also estimated that India now has over 500 TV channels covering all the main languages spoken in the nation TV owning households have been growing at between 8-10 %,while growth in Satellite /Cable homes exceeded 15% and DTH subscribers grew 28% over 2009
NATIONAL STOCK EXCHANGE
In a Flash,Trading Moves to Screens
Sometime in 1992-93,GV Ramakrishna,a career bureaucrat who had taken over as chairman of the new securities market regulator the Securities and Exchange Board of India wrote to Indias finance minister making a strong case for a new stock exchange without having on board any brokers associated with the Bombay Stock Exchange.There were good reasons for Ramakrishna to suggest BSE brokers ought to be kept at bay.In those days of paper-based trading and settlement of stocks,these powerful brokers with patrons in New Delhi were used to closing down the exchange often.It was an era when price manipulation by brokers was regular.Settlement of trades was a challenge given the problems associated with physical shares.India ranked almost at the bottom of the heap in rankings on capital market infrastructure a shade above Russia.Thats when despite severe resistance from brokers,the government moved to promote the National Stock Exchange of India,which became operational in 1994.This was followed up a few years later with the countrys first depository the National Securities Depository Ltd which ensured that securities were held in dematerialised or paperless form,putting an end to problems like bad delivery,and cutting transaction costs substantially.Those were defining moments in the liberalisation of Indias financial sector.RH Patil,the first managing director of NSE,says the exchange was the most important catalyst of the transformation of the Indian stock markets over the past decade.It was one of the earliest exchanges in the world to adopt demutualisation or the separation of ownership,management and trading rights.Convincing brokers and investors that the market was not limited to Bombay (as it was called then),but was an electronic screen on which they could trade from any part of the country,was a huge challenge.BSE brokers who had kept away were forced to adapt to the screen-based anonymous order matching trading system,signalling the start of a remarkable transformation of the countrys financial markets.The NSE then started a clearing corporation to guarantee all settlements,which led policy makers to think of dematerialisation of shares and the setting up of a depository.Chitra Ramakrishnan,joint managing director of the NSE who came intially on deputation for the project from IDBI then a powerful financial institution recalls how the NSEs original mandate became broader.We learnt different lessons on the way and much of it was born out of necessity, she says.Patil calls it an ecletic approach which later led to shortening of settlements,launch of futures and options and several other products.The other game changer was the NSDL,whose success in maintaining ownership records of securities in paperless mode helped ensure that the Indian capital markets could make the transition from a weekly settlement to rolling settlement,minimising risk and boosting efficiency.Settlement costs have dropped from half a per cent in the early 1990s to a few rupees.The NSDL now handles in its demat custody securities worth $1,398 billion or Rs 63,07,166 crore,which is over 80% of the securities held and settled in dematerialised form in the country.
IIT AND IIM
Institutes of Excellence Power to Intellect
Sreeradha D Basu
POLITICS IN INDIA AROUND the time of Independence wasnt about riots,rabble-rousing and hooliganism.The champions of Indias movement for freedom from British rule were the intelligentsia or the thought leaders.They understood,only too well,that scholarship was essential to struggle.This is why Mohandas Gandhi was the product of the hallowed court,the Inner Temple,in London.Motilal Nehru was a celebrated barrister while his son Jawaharlal,the countrys first prime minister,studied at Harrow and Cambridge before being called to the Bar in 1912.Vallabhbhai Patel studied law in India.Subhas Chandra Bose was a first-class in philosophy and stood fourth in the Indian Civil Services examination.The list goes on.When India finally got Independence,the founding fathers placed education high on the list of priorities.The seeds were sown by,among others,Nalini Ranjan Sarkar,member of the Viceroys Executive Council a sort of interim cabinet during the changeover from colonial administration to Independence.It is to Sarkar,an educationistentrepreneur,that the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs) owe their existence.He was the first to float the idea of setting up institutes for higher,technical education across the country.Sarkars initiatives led to the founding of the first-ever IIT in the country,at the site of a defunct prison,the Hijli detention camp,in Kharagpur in May 1950.On the recommendations of the Sarkar committee,IIT Bombay came next,in 1958,followed by Madras and Kanpur (1959),and Delhi in 1961.The IITs were mandated to produce the brains that would take the country into a new era of technology and industrialisation.The birth of the IITs epitomised modern engineering education in India, says Prof M Chakraborty,director of IIT Bhubaneswar and formerly deputy director at IIT Kharagpur.The need of the hour was to generate a high-quality pool of technical manpower,with a solid foundation in both the sciences and humanities.The establishment of the IITs,modelled on MIT,provided excellent opportunities to many. Maulana Abul Kalam Azad,while inaugurating IIT Kharagpur,said the institute should have 2,000 undergraduate students and 1,000 students for post-graduate studies,who would emphasise the role of higher technical education.If science was to take India into a new age,could industry be far behind With the first IITs on the ground,the Planning Commission was entrusted with setting up the Indian Institutes of Management.The commission invited Professor George Robbins of the University of California on whose recommendations the government decided to set up two elite IIMs the first in Calcutta (as it was then known) in November 1961,in collaboration with the MIT Sloan School of Management,the government of West Bengal,the Ford Foundation and some industry leaders;and the second in Ahmedabad,that same year.Coming almost a decade after the IITs,these were to provide management education to professionalise the running of vital sectors.Institutes at Bangalore in 1973,Lucknow in 1984,Kozhikode in 1996,Indore in 1998 and Shillong in 2008 followed.Last year,they were joined by institutes at Ranchi,Rohtak and Raipur.What the IIMs and IITs did was free education from obsolescence, says Amitava Bose,former director and currently professor of economics at IIM Calcutta.Earlier,higher education was confined to universities bound by rigid norms.The IIMs and IITs emerged as a kind of education powerhouse which helped infuse new ideas and new disciplines into education. Undoubtedly,the biggest achievement of both the IITs and IIMs has been to create several generations of talented,grounded and aspirational youngsters who can,today,compete with the best minds in the world.Says IIM alumnus and CEO (FMCG) at Reliance Retail,Ninu Khanna: The IIMs helped offer the youth a good career opportunity and the freedom and scope to contribute to the building of businesses and the country. It is unfortunate,he feels,that the institutes are stymied by bureaucratic control,and trapped in divergent visions.The government needs to convert these institutes into stand-alone,selfreliant,self-funded and autonomous bodies that can cater to their requirements,as opposed to operating within narrow,bureaucratic confines, says Khanna.
Dr.radhakrishanan at MUMBAI IIT in 1962
Family Jewels Get Some Air
It is not a stand-alone turning point that defines Indias disinvestment process initiated in 1991-92.Though the total realisation to the government from different rounds of disinvestment till 1999-2000 stood at 18,638 crore,the big-ticket disinvestments stand out as a true measure of success in the entire process.Indias disinvestment experience can be clearly demarcated into three phases.The first was between 1991 and 1998 when small holdings of public sector companies were sold;the second lasted from 1998 to 2006 and featured the strategic sale of firms such as VSNL,Bharat Aluminium Co (Balco) and Maruti Udyog.In the third phase since then,the government has been back to selling small chunks.The second phase,which saw the government loosening its control over big-ticket public sector enterprises,was crucial.However,the strength of Indias disinvestment lies in the collective moments of strategic sale.To begin with,in February 2001,the government struck its first disinvestment deal of the millennium by approving the sale of 51% stake in aluminium major Balco to Sterlite Industries for 551.5 crore.In 2000,Balco,a profit-making public sector company under the ministry of mines,had a turnover of 898 crore and a profit of 56 crore.Next in line was the strategic sale of VSNL in the summer of 2002 wherein the government decided to sell its 25% stake in the telco giant to the Tatas for 1,439 crore.The company now became Tata Communications even as its monopoly over international longdistance telephony came to an end ahead of the promised deadline.Not only did VSNL have a strong position in the international longdistance voice and internet segments of the telecom business but also a solid infrastructure and good technical staff.Besides,VSNL also offered a strong balance sheet that enabled the Tatas to use the cash judiciously,transforming the company into a global operator of undersea cable networks and satellite links.Finally,in 2002,Suzuki Motor Company,the joint venture partner in Maruti Udyog,shelled out 1,000 crore as a premium to take over control of Maruti.After the dilution,the governments stake was reduced to 20.8% and Suzuki Motor Corporations stake increased to 54.2%.The remaining equity belonged to institutional and individual investors.As of May 2007,the government sold its complete share to financial institutions.The Maruti disinvestment issue gains credence as a classic case of a foreign company buying the stake held by a public sector undertaking.Jawaharlal Nehrus view that the state should control the commanding heights of the economy started losing steam from the 1980s when the countrys fiscal deficit started getting out of control.While the figure stood at 5.4% of the GDP in 1979-80,it shot up to 10% by the end of the decade.As government expenditure climbed,interest payments further dented the situation in the absence of returns on productive capital expenditure.The Gulf War of 1990 added to the governments worries,as NRI deposits started flowing out and the balance of payment condition worsened.Disinvestment was born out of this crisis when the newly-elected government in 1991 promised macroeconomic stabilisation by reconstituting the industrial sector.Ever since,theres been no looking back.
An Odyssey in the Supermarket With its arrival in 2001,Big Bazaar flagged off the best decade so far for Indian consumer culture
Big Bazaar,a ubiquitous symbol of Indian consumerism,started with not just a bang but,quite literally,a crash.The main glass facade door came crashing down on the second day of business at the flagship store in Kolkata,as shoppers eager to make their purchases during the Durga Puja season arrived in great numbers.At Hyderabad,the franchise had an infrastructurecrippling 35,000 footfalls on day one.The publicity blitz around the opening led to many people confusing the store for a mela happening in the city at the same time.Rajan Malhotra,president – retail strategy,Future Group,recalls,The air conditioning failed.We had to block people and assure them that it was not a one-day sale. In 2006,the franchises first ever Republic Day sale ended with the police called in to control crowds at Lower Parel,Mumbai.Launched in Kolkata in October 2001,Big Bazaar has played a role in or at least coincided with the surge in consumerism across India.If modern trade was valued at a meagre $2 billion according to Technopak estimates for 2001,it is currently valued at $21 billion.However,it is arguable that Big Bazaar just happened to be at the right place at the right time.Through the last decade,India unshackled itself from what social scientists refer to as brahminical restraint and embraced consumerism.According to marketing consultant Nabankur Gupta,There was more expendable income.TV brought products into homes and created a desire to own.This was compounded not just by advertising but serials that showcased a degree of opulence and interface with products that connote a certain lifestyle. The infrastructure for a nationwide shopping spree was already in place.Banks were eager to dole out credit cards,pre-approved loans,and attractive terms on life altering investments like homes or vehicles.Successive governments focussed on roads and highways,allowing products to reach formerly remote areas.As the job market grew more competitive in urban India,salaries were hiked making consumers aspire to a higher standard of living.Through this decade,Indians began to feel confident about the future,secure about spending and less inclined to save.This was particularly true of young India.The BPO industry changed the lives of youngsters who traditionally led a precarious existence financed by handouts from their parents.Since most of them still lived in their family homes,with food and shelter taken care of,they viewed their salaries as purely disposable income.Marketers were more than ready to meet them halfway.For instance,Levi’s India pioneered the concept of paying for jeans via EMIs,making a premium purchase far more accessible.According to Gupta,Consumption patterns across India are easily two-and-a-half times what they were 10 years ago for an average Indian household. Consumers today are more willing to upgrade,opting for fourwheelers instead of two or splitlevel air conditioners instead of the wall-mounted models of yore.Dipankar Sen,group business director,IMRB International,believes,Consumerism is driven from the top,and creates aspirational needs down the ladder.In rural India,there has been a distinct change from constrained living to more urbanised choices,from cost-led to convenience-led purchase,albeit at best value.In urban India,the swish upper SEC is moving to a global league in travel habits and destinations,food habits and eating out,fashion and design,and brand repertoire. Besides,malls have an impact that extends beyond how Indians shop.According to Pinakiranjan Mishra,partner and national leader,consumer products practice and retail,E&Y,Some larger formats are destinations for entertainment and weekend getaways. The Indian consumers desire for a better experience has broken the confines of modern trade.It has changed the way they view neighbourhood kirana shops and the way the stores view themselves.Big Bazaar and its ilk may not have driven these outlets out of business,but have spurred them to modernise.Through the late 2000s,HUL played retail consultant to kirana stores looking to get a more customer friendly makeover.A chaotic avalanche of products has given way in some cases to a roomier,more navigable shop.Jostling for space with jam and ketchup at the local grocery are imported Ferrero Rocher and olives;products the typical Indian consumer only saw being doled out as largess by generous NRI relatives a little over a decade ago.
If modern trade was valued at a meagre $2 billion for 2001,it is currently valued at $21 billion At Hyderabad,Big Bazaar had an infrastructure crippling 35,000 footfalls on day one Consumption patterns across India are easily two and a half times what they were 10 years ago for an average Indian household
TATA CORUS DEAL
Steeling In Going Abroad
HE WAS DRESSED IN A G-SUIT.His hand clutched the railings of the ladder that was perched on to an US Air Force F-16 jet.His hair was tousled by the stiff breeze.He smiled,waved,disappeared into the cockpit and took off for a 35-minute sortie his first flight on the fighter.But not before the cameras clicked,capturing what may well come to be the defining Ratan Tata image of the decade.It was uncharacteristically flamboyant of Tata to express himself this way at the Bangalore Aero Show in 2007.Perhaps this was his way of celebrating barely a week before the flight,Tata had wrapped up the $12 billion acquisition of Corus on January 31,2007.This is still India Incs largest global buyout ever.The deal was audacious in every sense Corus was four times the size of Tata Steel.Exactly a century ago,the British powers are said to have pooh-poohed the idea of Jamshetji Tata attempting to start a steel company in Jamshedpur in 1907.And here was the same company buying up Britains largest steel producer in 2007.The buyout fired the imagination of industrialists and entrepreneurs.Those were the days of easy money.India Inc followed Tatas cue and embarked on a global buyout binge.In the years running up to the Corus deal,between 2005 and 2006,India Inc had invested $14.2 billion in global acquisitions.After Corus,between 2007 and 2010,it had signed deals worth $58.83 billion.The acquisition itself was an inspiration for other Indian companies, recalls Ashvin Parekh,partner and national leader,financial services,Ernst & Young.A month after Tata Steel announced its acquisition of Corus,the Aditya Birla Groups flagship company,Hindalco,announced its $6-billion acquisition of Novelis,the worlds biggest producer of aluminium rolled products.A year later,the Tata group itself made another breakthrough acquisition with Tata Motors buying Fords Jaguar Land Rover operations for $2.3 billion.And finally,the last big deal,in March 2010,was Bhartis acquisition of Zain,which turned it into the worlds third-largest telecom company,with a footprint covering 15 African nations and India.In between,several mid-sized Indian companies,too,found the cash and the courage to go after their own global acquisitions.The Tatas were no strangers to global takeovers especially British takeovers when they acquired Corus.For example,Tata Tea had bought Tetley,a company three times its size,in 2000.But Tetley cost only $271 million.Indeed,one of the most interesting things about the Tata-Corus deal was the way it brought into focus the new global business dynamics in steel.In 2006,Tata Steel was one of the worlds most efficient steel producers,with operating profits of $840 million on sales of 5.3 million tonnes,compared with Coruss $860 million in operating profits on sales of 18.6 million tonnes.Tata Steel was self-sufficient in raw materials,whereas Corus was dependent on imports.For Tata Steel,the acquisition was a long-term strategic move.The company believed there would be synergies in the form of shared raw material sourcing,research and development,which would result in cost reductions.It would also give the Tatas access to the markets of Europe.Still,Tata Steels shares fell by 10% when the takeover was announced and the global economic downturn that followed soon after didnt help.The cash deal was financed through $4 billion of internal accruals,and $8 billion worth of new debt.Two years ago,shareholders felt Tata Steel had made a mistake in acquiring Corus,but they no longer feel that way, adds Parekh.The Tatas have demonstrated a remarkable capability to manage in great adversity.
Ratan Tata sits in the cockpit of an F-17 fighter plane during Aero India 2011in Banglore