Tracking India Business and Economy News: Essar now eyes multi-product SEZ at Hazira
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Essar now eyes multi-product SEZ at Hazira
After steel and subsequently engineering, the Essar group now plans to convert its upcoming special economic zone (SEZ) at Hazira into a multi-product SEZ. The group has recently filed an application with the state government and has started the process of acquiring additional land for the project. This means the group will have two multi-product SEZs in Gujarat.
Originally, the group had planned to set up a steel SEZ at Hazira. Subsequently, it sought permission to convert it into an engineering SEZ. The engineering SEZ, which was likely to come up on 267 hectares, has been cleared by the Board of Approvals.
Essar SEZ Hazira had signed an agreement with the state government during the recently concluded Vibrant Gujarat Global Investors’ Summit to develop a steel plant and a deep-water port and allied facilities at Surat. The company pledged total investments of Rs 12,750 crore.
State government sources said the company wants to further convert it into a multi-product SEZ. “Essar now wants to develop a multi-product SEZ instead of an engineering zone,” said a senior state department official. When contacted the company declined to comment.The group has already got a BOA approval for its multi-product SEZ at Jamnagar, which will come up over 1,000 hectares. The Hazira SEZ will be almost as big in terms of area as its Jamnagar multi-product SEZ.
The company proposes to augment its steel manufacturing capacity to nine million tonnes at Hazira. Sources say the company is talking to automobile major Nissan and component manufacturer Manineto for setting up facilities in the Hazira SEZ.
Besides, the group has also got the approval for power SEZ at Suvali in Surat. The group also plans to expand its cargo handling capacity at Hazira to 35 million tonnes in order to cater to the increased requirement of industry.
Monday, March 26, 2007
Source: TNN via economictimes.com
New SEZs may not have golf courses, amusement parks
The government is considering framing new rules for housing and recreational activities in upcoming SEZs. Large-scale recreational activities, such as construction of golf courses and amusement parks, may not get approval in new SEZs.
Also, only 25% of the approved housing may be allowed during the initial phase, with the remaining construction being permitted in phases depending upon the progress made by the SEZ developer.
The changes are likely to be incorporated in the rules for setting up SEZs, a government official said. The rural development ministry is also in favour of the proposal as it would limit land requirement for projects. Due to widespread farmer unrest and violence, the government wants to tread cautiously while allocating land for SEZs.
As per the proposal, setting up of golf courses or other recreational facilities with large land requirement may be included in a negative list of activities permitted in a SEZ.
The entire land acquisition for SEZs would also be undertaken by limiting the minimum area of land for core functions and a small portion for allied functions.
“There should be a symbiotic relationship between core and allied functions. Construction of golf courses and other such recreational activities are not in consonance with core functions under SEZ,” the official said.
The changes may also require an SEZ promoter to construct just 25% of the approved housing for the project in the first phase. The approval for the remaining construction may be given in three phases depending upon the development of the SEZ. The changes are likely to be included to restrict land requirement for non-core functions.
While the commerce ministry is working on the new changes, sources said the rural development ministry may also suggest the creation of a new authority in the new rehabilitation and resettlement policy that would come up for Cabinet approval soon.
The proposed authority would first vet land requirements suggested by a SEZ developer before forwarding it for approvals. Non-core activities, such as setting up recreational facilities, may be axed at this stage.
Monday, March 26, 2007
Source: TNN via economictimes.com
IRDA sets fresh norms to safeguard customer's interest
The Bombay High Court order last week that virtually throws open free trading of insurance policies has set the cat among the pigeons, reports CNBC-TV18.
A worried insurance regulator has decided to issue fresh guidelines to prevent misuse. The Insurance regulator - IRDA fears the trading of insurance polices might be life threatening for the customer, because during trading, the policy is assigned to a third party other than the family, which means that the third person will get the insurance amount in case of death of the customer. The regulator has now decided to release a new set of guidelines to safeguard the lives and interest of customers.
The IRDAs guidelines may be based on the Narasimhan Committee report that recommends the insurance company issuing the policy be given responsibility to ensure that transfers happen only to people with insurable interest, like the immediate family and a bank, when the policy is used as collateral for a loan
The Bombay High Court judgment, in favour of the Insure Policy Plus Services, a company that trades insurance polices stated that according to Section 38 of The Insurance Act, policy holders can assign policies without consideration of insurable interest.
Insurance companies have decided to do extra due diligence to prevent misuse, like a moral hazard that arises when the person entitled to the death benefit has no insurance interest, or the mis-selling of insurance for reasons other than basic life cover.
It also throws the door open to the opportunity of buying a policy in some one else’s name to avail benefits, at a lesser premium. The policy benefits of an indivual who is young and fit, could be passed on to someone who is older and unfit. The latter, in this case would enjoy all the benefits at a lesser premium as compared to what he would be charged if he takes the policy directly from the company, which poses to be a bigger threat.
Monday, March 26, 2007
Source: moneycontrol.com
States must redraw master plans for SEZs
States will have to amend their respective master plans to allow SEZs to take off. The rural development ministry has proposed that the area notified for SEZs or large-scale industrial projects in a state’s master plan should not touch existing residential/dwelling units of villagers.
The proposal may be included as a mandatory clause in the resettlement-and-rehabilitation (R&R) policy being finalised by the rural development ministry. This comes in the wake of the Nandigram episode, which government sources say could have been avoided if the West Bengal government had adhered to the R&R policy. The matter is expected to come up for discussion at the next board of approvals (BoA) meet.
“States currently do not have to do zoning of land at such a micro level, and it is based on larger clusters. If the new policy is implemented, it will help address the issue of resettlement,” a senior government official said.
Sources say the ministry’s proposal is based on a factual comparison between SEZ projects in Haryana and West Bengal. A survey by the R&R department of Haryana State Industrial & Infrastructure Development Corp says farmers/landlords in the Jhajjar area had no issues selling off agricultural land as long as they were not asked to leave their houses. On the other hand, in Nandigram, a large chunk of land comprised villagers’ dwelling units. “While farmers seem convinced of better monetary rewards and employment guarantee while selling farm land, the idea of resettlement looks like a taboo,” the official said.
The proposal will also check speculation on properties near upcoming SEZs. “Property developers tend to jack up prices or plots falling near SEZs,” the official said.
Tuesday, March 27, 2007
Source: TNN via economictimes.com
Govt okays CTC expansion plan
Persistent request for quality infrastructure to showcase the capabilities of an upbeat leather sector seems to have found favours with the government. The proposal to add 4,000 sq mt of space, at an estimated investment of Rs 17 crore at the Chennai Trade Centre, which plays host to the annual India International Leather Fair, has been cleared.
Commissioned in January 2001, the CTC is managed by Tamil Nadu Trade Promotion Organisation (TNTPO), a joint venture of India Trade Promotion Organisation and the Tamil Nadu Industrial Development Corporation (TIDCO).
Incidentally, the state-of-the-art CTC is the first fair infrastructure, developed by ITPO outside New Delhi. Set up over an area of 25 acres in Chennai, the CTC has two air-conditioned halls, encompassing areas of 5,000 sq m and 1,850 sq m constructed in the first phase. These have been supplemented recently with a modern, fully air-conditioned convention centre.
The latest approval to expand the existing facility, for setting up a third hall, was obtained two weeks ago. The expansion is expected to be completed by November 2007. This would mean a surge in the participation at the next leather fair, sources said.
The estimated space of 4,000 sq m would be used to set up the hall, along with a walkway at CTC. The said expansion envisages an investment of Rs 17 crore, with Rs 5 crore, coming through the Assistance to States for Infrastructure Development for Exports (ASIDE). The balance would be through internal accruals, sources added.
The leather industry has set a target of reaching the $ 5.1 billion export mark by 2010 and the infrastructure expansion is being seen as a welcome sign. Tamil Nadu accounts for about 50 per cent of the total output of leather and leather products, besides being the leading export base.
The All India Skin and Hide Tanners Merchants Association president and former Council of Leather Exports chairman M Rafeeque Ahmed told ET that the leather industry had recently sent a proposal to the Union Communication Minister Dayanidhi Maran to extend the hall area or set up a new one.
The leather industry had sought 6,000 sq m additional space to avoid using hangars to accommodate the rush of participants for the mega event.
"We still feel the space constraint and in our view, there is a need to double the space needed for exhibition against what has been allotted. For the moment, we are trying to see that the work is expedited to accommodate more exhibitors," he added.
Tuesday, March 27, 2007
Source: indiatimes newsnetwork via economictimes.com
India to join money 'laundromat' group
India will share information on money laundering with other countries such as the US, the UK, Canada and Australia. Joining the global fight against money laundering, New Delhi is set to become a part of the international organisation of financial intelligence units, the Egmont Group.
The government is likely to take a proposal in this regard to the Union Cabinet soon. The move is aimed at curbing drug money, kickbacks and funding of terrorist activities. In the case of India, hawala and smuggling are the menaces that need to be tackled due to involvement of terror groups active in Kashmir, the north-east and Naxal-dominated regions.
Money laundering rackets such as hawala usually involve foreign operatives and tracking them requires support from intelligence agencies of other countries. Officials said the recent case involving a stud farm owner in Pune has highlighted the need to tackle cross-border transactions more carefully.
As of now, Indian authorities find themselves on a weak footing as they are often unable to elicit information on laundering activities or suspicious banking data from various countries as India’s Financial Intelligence Unit (FIU) does not have an MoU with its counterparts in most countries. Hence, the push to join the Egmont Group and share information with key countries.
The Egmont Group — that now has 101 countries as its members — was established in 1995. It came about as a result of efforts by intelligence agencies in a few countries that decided to establish an informal group for cooperation between specialised agencies called FIUs on money laundering. Since the decision was taken at the Egmont Palace in Brussels, the group came to be known by the name. All those who wish to become a member of the organisation have to meet certain requirements.
Some of the agencies that are members of the group include Austrac of Australia, FinCEN of the US, Fintrac of Canada and Serious Organised Crime Agency of the UK.
India will enter into MoUs with the FIUs of other countries to facilitate flow of information. The country established an FIU in 2004 that collects data on suspicious or unusual financial transactions. The MoU will be based on the model agreement developed by the Egmont Group.
Tuesday, March 27, 2007
Source: TNN via economictimes.com
Old pvt banks take QIP route to up cap
The Reserve Bank of India’s drive to fix the weak link in the banking system, old private banks, has borne fruit. After a strong nudge from RBI to get them to dilute promoter holding and increase net worth, a host of old private banks are raising fresh capital through qualified institutions placement (QIP), rights issue or other capital market processes.
Dhanalakshmi Bank, which currently has a net worth lower than the prescribed norm of Rs 300 crore for private sector banks, is looking at a mix of QIP and rights issue to boost its net worth and cut down the promoter’s shareholding. The bank has a net worth of Rs 117 crore and the promoter’s shareholding in the bank is at 37%, which according to RBI norms has to be bought down to 10%.
According to PS Prasad, MD & CEO, Dhanalakshmi Bank, the board will look at capital augmentation and dilution plans in the next few weeks. The bank has until 2008 to fulfil the RBI guidelines. Sources said that the bank would make a preferential issue through the QIP process to two or three investors. Each investor would get a tad less than 5%. Post this, promoters would dilute stake further by not subscribing to a rights issue.
P Raja Mohan Rao, the bank’s promoter, said, “The regulatory requirement will be met well ahead of the date. It will be met before October 2007. The ownership dilution will also happen.” The bank, like other private banks, does not want to lose its identity through a merger. Development Credit Bank will also go for QIP after its yearly results.
The bank, which currently has a net worth of Rs 317 crore, is looking at increasing it to Rs 500 crore. Sources said that the bank will look at a dilution of 4.5-4.8% each to around four investors. Currently, the Aga Khan Fund for Economic Development’s (AKFED) stake in the bank is at 29.80%. RBI had, while granting permission for the IPO, stipulated that AKFED’s stake need to be bought down to 10%.
However, the QIP process can be done only six months after the IPO. In case of Bank of Rajasthan, though it has a net worth of around Rs 340 crore, the promoter’s shareholding is at 44.16%. The bank may go in for a rights issue or FPO towards the latter half of the next fiscal in order to raise the net worth to over Rs 500 crore, said sources. In case of IndusInd Bank, the promoter’s shareholding stands at 31.34%. Also, Ashok Leyland has a 10% stake in the bank. The bank is in the process of a GDR issue, which would dilute promoter’s shareholding by around 3%.
Wednesday, March 28, 2007
Source: TNN via economictimes.com
Acquisition of land by Govt for private cos to stop
Call it the SEZ-Nandigram effect. The Centre is all set to table, in the current session of Parliament, a Bill that puts a virtual stop on future governmental acquisition of lands for private companies and restricts the definition of `public purpose' under the Land Acquisition Act, 1894.
Budget Session
"The note proposing the necessary amendments to the Act is being circulated among the Ministries concerned (Commerce, Water Resources, Power, Environment, Rural Development, etc). It would then be put before the Cabinet and perhaps a Group of Ministers. The idea is to place the Bill when the Budget session reconvenes on April 26," highly placed sources told Business Line.
The Bill, they said, plans to dispense with Part VII of the Act, specifically dealing with governmental land acquisitions for `companies' (in the private sector). This is in contrast to those made on behalf of State-owned companies and departments, purportedly for `public purposes'.
Holdout Ratio
"Once the amendment is carried out, there will be no Part VII. The Government would have no further role in acquisitions for corporates. An exception may be made in certain holdout case, where the latter has already bought 90 per cent or so of the required land. The holdout ratio for the Government to step in may be set between 10 and 30 per cent," the sources added.
They, however, clarified that the proposed amendment would have only prospective effect and 'will not impact past Government-aided acquisitions, including for the already notified Special Economic Zones.'
The distinction between land acquisition for `companies' and for `public purpose' was originally made in a 1984 amendment to the Act. While Government purchase of land in general requires a declaration that it is intended for a `public purpose', there is no such need if the acquisition is made for a corporate.
Sovereign Power
'When the 1984 amendment was introduced, there was a felt need to promote industries in backward areas and for which the Government had to facilitate acquisition of land even if it was not for a so-called public purpose. But today, companies are on their own venturing out to create land banks and any Governmental involvement is proving politically hot, as in Nandigram and a few other SEZs,' the sources pointed out.
Wednesday, March 28, 2007
Source: moneycontrol.com
Simplified policies set to be growth poles for micro sector
IN an attempt to streamline the policies and procedures guiding the management of small and micro enterprises, the government is planning to form ‘growth poles’ by integrating a number of clusters of small and micro enterprises engaged in similar activities across the country. The simplified policies would expedite the process of providing incentives and amenities to such enterprises, thereby facilitating their expansion. The ministry of small scale industries has already received proposals to form growth poles from the governments of Chhattisgarh, Kerala, Rajasthan, Uttaranchal, West Bengal and Assam.
The National Commission for Enterprises in the Unorganised Sector (NCEUS), which has come up with the suggestion of growth poles, has proposed that entities engaged in manufacturing services and non-farm activities across the country should be the included in the ‘growth poles’.
These ‘poles’ would also incorporate the concept of the scheme of Provision of Urban Amenities in Rural Areas (PURA), which is aimed at bridging the rural-urban divide and achieving balanced socio-economic development.
These targets of PURA are achieved by providing facilities such as roads, power, markets, education and water to small and micro units.
NCEUS, under the chairmanship of Arjun Sengupta, was constituted to examine the problems of the unorganised sector and suggest measures to overcome them. Other measures being introduced by the government for comprehensive and faster development of SME clusters include a comprehensive review of the existing guidelines of the small industries cluster development programme. The government is also introducing a slew of measures to support technology and quality upgradation in the clusters such as setting up training-cum-product development centres.
The policy measures aimed at the development of SME clusters are in tandem with the National Strategy for Manufacturing. The strategy states that the small-scale sector should be encouraged as breeding grounds for innovation and technology development to create a demonstration effect across the manufacturing sector.
Thursday, March 29, 2007
Source: TNN via economictimes.com
India to develop SEZ in its own way: FM
Amid controversy over the setting up of China-style Special Economic Zones (SEZ), India today said the government recognised SEZs as "an useful tool" in furthering industrialisation but will implement the concept in its "own way".
"We recognise that SEZs are a useful tool for industrial development, especially in areas where infrastructure is lacking. Where infrastructure already exist, it is perhaps not necessary to create SEZs," India's Finance Minister P Chidambaram said after inaugurating the first full-fledged branch of Bank of India here.
The one-time fishing village of Shenzhen is the first the SEZ in China. It was China's first major experiment with capitalism after late Chinese paramount leader Deng Xiaoping landmark visit to the southern Guangdong province in 1986.
"Where infrastructure is not existent, a SEZ will be a useful instrument to attract investors to build the infrastructure, to take advantage of the concessions offered by the government and to industrialise that area," Chidambaram said.
"We recognise the validity of that principle and we are trying to implement it in our own way," the Finance Minister said.
The Shenzhen SEZ was originally established in 1979 due to its proximity to Hong Kong, then a prosperous British colony.
The SEZ was created to be an experimental ground of capitalism in "socialism with Chinese characteristics". The location was chosen to attract industrial investments from Hong Kong since the two places share the same language and culture, local officials said.
Thursday, March 29, 2007
Source: PTI via economictimes.com
Tax on iron ore exports to conserve raw material
Amid a threat of Chinese boycott of Indian iron ore due to imposition of Rs 300 per tonne duty on Indian iron ore exports, Finance Minister P Chidambaram today defended the measure saying it will "conserve" the country's raw materials for the domestic steel industries.
"There is no controversy. As I said in my budget speech, it is intended to conserve raw materials for our own steel industry and at the same time, create some revenues taking note of the fact that the prices are ruling very high," Chidambaram said here after inaugurating the full-fledged branch of Bank of India, where the Communist giant initiated the Special Economic Zone (SEZ) for the first time.
The new policy, announced by Chidambaram in February in his budget speech, is regarded as the first move by India to conserve scarce national resources.
But, Chinese importers have decided to boycott Indian iron ore in protest against Indian suppliers' attempts to increase iron ore prices.
India announced a duty of Rs 300 (6.78 US dollars) per tonne of iron ore exported from March 1, and the Chinese importers say Indian exporters intend to transfer the increased costs to Chinese buyers, even for contracts signed but not executed before March.
As the world's biggest producer and consumer of steel, China imported a record 325 million tonnes of iron ore in 2006 and 8.3 million tonnes came from India, according to media reports.
India is currently the third-largest exporter of iron ore to China after Australia and Brazil, and China is the largest buyer of Indian iron ore.
Thursday, March 29, 2007
Source: PTI via economictimes.com
Beg, but don't borrow
NO APRIL Fool’s joke, this. Interest rates on most loans, including home loans, could rise by half to one percentage point with the Reserve Bank of India announcing a slew of tightening measures on Friday evening. The measures pass on the burden of managing inflation to borrowers and banks who will pay by way of higher rates and lower profits.
With foreign funds inflow expected to surge and the government about to step up spending at a time when inflation fears continue to haunt, the RBI has chosen to hit the markets with direct, blunt measures that will drain liquidity and make money more costly.
The move aimed at removing the froth from the economy - in the form of speculative investments and consumption demand - may end up moderating economic growth as well. The banking system, already starved of liquidity, will find the going the tough, while stocks could turn edgy when the market opens on Monday.
RBI’s measures include half percentage point hike in cash reserve ratio - the part of deposits that banks have to keep with the RBI as cash - to 6.5%, and a 25-basis point hike in repo rate - the rate at which banks borrow from the RBI - to 7.75%. Also, banks will get far less returns on money parked in CRR with interest rates on CRR halved to 0.5%. At the same time, the central bank has said it will impound another Rs 6,000 crore through an auction under the market stabilisation scheme on April 4.
Even before the system could digest the previous dose of tightening measures, the monetary authority has struck again. It is widely perceived that the RBI is also being influenced by think-tanks within the government.
Just as former Fed chief Alan Greenspan still moves the US market, Chakravarty Rangarajan, chairman of the PM’s economic advisory council and former RBI governor, continues to have an influence on RBI governor YV Reddy’s monetary policy, albeit in a subtle, indirect manner. Mr Rangarajan, a hard core monetarist, is dead against the spiralling growth in money supply - one of the factors that have fuelled the latest bout of inflation.
This is the third in the series of monetary squeeze in four months. Incidentally, the other two hikes were announced outside the monetary policy review on December 8 and February 13. Despite these, year-on-year credit growth was 29% on March 15.
Friday’s CRR hike has dashed all hopes of any immediate easing of rates. Some banks had refrained from raising rates hoping that the RBI was at the end of its tightening phase.
Those banks that have held back rate hikes earlier will now be forced to hike it by at least 100 basis points.
Unlike in the past, this April will turn out to be the cruelest month for the money market. Assuming the end-March tightness to be transient, some banks sanctioned loans but postponed disbursements to April.
Large corporates would be spared to the extent that they are able to borrow from overseas where overall costs have become cheaper with the rupee firming up. Hemant Mishr, MD, global corporate sales, South Asia, StanChart, said: “The difference between an all-hedged foreign currency funding has fallen from 100 basis points to 55 basis points given the upside move on the cost of hedging. Some banks feel it could be RBI’s strategy to let the rupee firm up through higher rates in order to make imports cheaper and bring prices down.”
In a statement, which bankers termed hawkish, the RBI highlighted economic indicators that called for tightening. These included a rise in the index of industrial production to 11% from 8% a year ago. Moreover, inflation had held firm at around 6.5% for three weeks in succession. This was on account of a 12% increase in prices of primary articles and 6.6% rise in cost of manufactured articles. Besides, the year-on-year money supply (M3) growth up to March 16, 2007 was 22% as against 16.9% a year ago.
Saturday, March 31, 2007
Source: TNN via economictimes.com
Hi-tech goods to get export sops
Hi-Tech is in focus. To give a leg up to high-technology exports from the country, the government is likely to unveil an incentive scheme in the forthcoming annual supplement to the foreign trade policy. Under the scheme, being worked out right now, export of hi-tech products would be able to get duty-free credit entitlement up to 5% of the freight-on-board value of total exports, an official told ET.
The commerce ministry had proposed new incentive schemes for 3-4 sectors, but till now, the revenue department, which is strongly against multiple schemes, seems inclined only towards sops for hi-tech exports. This is after the scheme received support from the prime minister’s Economic Advisory Council.
Although the country has seen a huge growth in advanced technology exports, its share is limited to $3.3 billion of the country’s $100-billion merchandise exports. New Delhi is keen to give a big push to the sector to give an impetus to the US-India High Technology Co-operation Group. The focus of the group is to streamline export control regimes of the two countries that hamper trade and investment in high technology.
The commerce ministry has been asked to work out the specifics of the scheme after which a final call would be taken by the revenue department on its implementation. Specifics would have details of the items that would be covered.
Sources said the scheme could cover items such as IT hardware, biotechnology and certain pharmaceutical products that involve a technological breakthrough.
The revenue department is, in principle, against incentive schemes for exports even as it is comfortable with a duty neutralisation scheme. Since multiplicity of schemes create problems in implementation, the revenue department has been pushing for rolling all schemes into one and not starting new ones. The revenue foregone on account of export promotion concessions increased from Rs 37,590 crore in 2005-06 to Rs 53,768 crore in 2006-07.
Saturday, March 31, 2007
Source: TNN via economictimes.com
Kerala zeroes in on animation SEZ
Apart from tourism, Kerala will soon have another claim to fame. Sensing there is a huge potential in the Indian animation industry that needs to be tapped, the government of Kerala has procured around 25 acres of land in an SEZ that would later be converted into an animation zone.
Kinfra, the Kerala Industrial Infrastructure Development Corporation, a statutory body of the state government, is developing this park where it expects some 50 large animation studios from major centres to move in.
“This is the second phase of development happening in the park and we have decided to make it an exclusive animation SEZ. It is the first of its kind in India,” claimed K Sudhakaran, project manager, Kinfra films and video park. Kinfra has invested Rs 2.5 crore in land procurement (Rs 10 lakh per acre) and has plans to sell it at Rs 26 lakh per acre.
“The whole idea is to give a fillip to the animation outsourcing industry in Kerala because once the studios move in here, they will be exempted from tax as per the SEZ norms,” said Sudhakaran.
Though Kinfra’s target is to house at least 50 big studios, an MoU has been signed with animation studios like Toonz Animation, Dimensions, headquartered in Kerala, and Chandigarh-based Compact Disc. It’s also in talks with Chennai-based Accel Animation Studios, a mobile gaming and animation company, for the animation SEZ, which will be operational in three months.
Explaining the process of space logistics, Sudhakaran added, “The land is available on a long lease basis (90 years). Around 1,50,000 sq feet is the built-up area with 10,000-15,000 modules for the studios.” These modules are available at the rate of Rs 20 per sq ft per month. Apart from this, Kinfra has also set up an incubation centre in about 500 sq ft of this land.
This incubation centre is available with a plug-in facility for small companies who can’t afford to start a full-fledged facility. “Small companies can really leverage this facility. All they have to do is to plug in their computers and get going. All this, for Rs 35 per sq feet per month,” he added. The agency is expecting a turnover of Rs 150 crore from the animation SEZ in the first year itself and expects it to go up to Rs 1,000 crore over the next three years.
The industry players are also excited about the idea. Munjal Shroff, director and COO, Mumbai-based animation studio Graphiti Multimedia, said, “If there is an animation SEZ coming up in India, we will move in there, as this will benefit our business.” PricewaterhouseCoopers (PwC), which tracks the media and entertainment industry, said this was a good opportunity and would give a boost to the industry. PwC, in its recently released report, has estimated the animation industry to be worth Rs 11 bn with a CAGR growth rate of 22% to reach Rs 29 bn by 2011.
Kinfra is also looking at establishing state-of-the-art animation academy to meet the increasing manpower demand in this field. “The school will be based on a public-private partnership model, with an equal amount of funding being provided by the Centre, the Kerala government through Kinfra, and a private player,” Sudhakaran said.
Kinfra is now in talks with both Toonz and Accel. The total investment in the academy would be Rs 20.5 crore. Timmy Kandhari, executive director, entertainment and media practice, PwC, said, “An initiative of this kind will provide a ready talent pool to the industry.” Going forward, co-producing animation films with foreign partners is the way up for the industry, he added.
Saturday, March 31, 2007
Source: TNN via economictimes.com
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The Loot retail chain targets a turnover of Rs100 cr by 2009
Promoters of The Loot chain of retail stores in country, Jay Retailing and Merchandising Pvt Ltd is planning to go public in 2009.
Company plans to run over 25 stores across India and target a turnover of Rs100 crore by that time, said Jay Gupta, Managing Director, after opening maiden Loot store recently.
Company was able to make a place for itself by offering a minimum of 25 percent reduction in maximum retail price of branded apparels and footwear, said Gupta.
It buys apparels or footwear in large quantities from brand owners to offers them at discounted prices to customers.
The Loot will compete with discount sale offers by brand owners or with 'owned outlets', due to its ability to offer variety of products at attractive prices, Gupta said.
"We will stock the entire range of fresh merchandise, albeit after a time lag of three to six months," Gupta said.
Present trend of introducing new designs every season has created an opportunity to pick up new stocks every three or four months, he said.
"There is a very small section of consumers who buys and wears designs only when it is in season; the rest will look for well-known brands with a lowered price tag," Gupta said.
Company would ensure its presence in state capitals, places near airports and at places where population is above 6 lakh, as part of its strategy for expansion, Gupta said.
"These are the places where we have customers who understand our value proposition," he said.
Company with 10 stores is present in Mumbai and Navi Mumbai, Hyderabad, Delhi, Nashik and Pune.
Company will look at valuation based on sales turnover of Rs100 crore at end of 2008 to decide upon size of funds it intends to raise through the issue, he added.
Monday, March 26, 2007
Source: fibre2fashion.com
Fashion companies to go for innovative design & trends this summer
For coming sweltering months, top companies of the fashion world have floral prints, vibrant hues and elegant designs matched with a sound business strategy on their minds.
French ready to wear label Lacoste’s spring summer collection inspired by picturesque city of French Riviera has created designs reflecting a mix of elegance and innovative light summery fabrics.
"Our advertising campaign for spring summer 2007 is timeless yet contemporary. Our new spring summer collection offers apparels in soft and fluid colours for women and bright and bold for men. Stripes, prints in bright colours and light materials in our range make it ideal for this summery season," said Vikas Gupta, President and CEO, Lacoste India.
Jeanswear brand Lee’s strategy for summer is to organize activities in popular hangouts, stores and night clubs, having in mind youthful fashion conscious guys and girls.
“Our spring-summer collection has a big play on colours with attractive prints on tops. The denims in clean grey and green cast shades have the sculpted worn-in look. We are introducing newer fabrics and fits in bottoms for men and women, this season,” said Chakor Jain, Business Head, Lee.
Sportswear brand Adidas has Cool tees in vibrant hues of orange, lime, pink and lavender for its summer wear range. Special beach range for summer includes tank tops, tee-shirts, swimwear, shorts and three-fourth pants in funky floral designs and bright colours.
"The collection is for youngsters who prefer stylish and innovative apparel that can offer them comfort and utility," said Hartwin Feddersen, Director - Marketing, Adidas India. Nike has come up with some innovative ways to beat summer heat. With a clear focus on technology, Nike’s sphere react cool, sphere dry and dry fit ranges are designed to make athletes feel dry and comfortable even in hot summer months.
"Our summer line takes note of the fact that an athlete’s performance and enjoyment of the sport should not be hampered by clothes that make them feel uncomfortable," Sanjay Gangopadhyay, Marketing Director, Nike India.
All players are set to cash in on summer season through innovative design and analyze summer trends correctly.
Tuesday, March 27, 2007
Source: fibre2fashion.com
Govt receives 12 proposals for single-brand retail stores
Calvin Klein and FCUK are amongst ten brands which are still awaiting Government’s consent to set shop in country.
Within three months, India has received 12 proposals from six foreign investors for permission to enter single-brand product retailing, of which two have already been cleared.
Clothing and accessories majors French Connection and La Perla, besides Jimmy Choo shoes are the other brands in waiting.
All proposals have been received for 51 percent equity, except Grotto of Italy which seeking 50 percent equity participation for retail trading of GAS fashion brand.
While seven waiting proposals are from Mauritius-based companies have put up seven proposals of which, one from China—Wah Luen seeks to launch CT Brand of electronic goods and tools. Another waiting proposal is that of Sin Rong Pvt Ltd for trading under the VI-GA footwear brand.
Mauritius-based Brand Marketing Pvt Ltd and Retail India Ltd have applied for retail trading of FCUK, French Connection, Jimmy Choo, La Perla, Build Bear toys and Tumi Brand luggage.
Of the two cleared proposals received this year, one is Proposals from France’s Socomec SA for 50 percent equity participation in UPS systems trading and Fabindia’s for 51 percent have been cleared.
Government had approved eight single-brand proposals in the year 2006.
Tuesday, March 27, 2007
Source: fibre2fashion.com
Summer to witness boost in retail business
Month of April is just round the corner and summer of 2007 seems to be packed with big action and new launches with buzzword being "young consumer."
It’s good to be young but it’s even better to be cool especially in sizzling months of summer.
And for that, Lactose’s French Riviera collection in innovative light fabrics, to funky, floral Tees and tank tops from Adidas, the emphasis to remain cool will be high in branded fashion apparel section this summer.
Summer is all set to make waves in organised retail segment.
"Summer 2007 will see new products being launched and jostling for space in big retail outlets. In fact, we will see launch of at least 15 international brands. This summer is also expected to see two to three times growth in mall traffic over last summer, partly because of new malls coming up in all metros," feels Prasenjit Roy, CEO In-Store Consulting Services, marketing company specialising in tracking shopper behaviour in retail space.
Summer this season is going to see the arrival of retail and a number of luxury brands, said Unni Krishnan, Country Manager, Brand Finance, India.
"We’ll see a lot more new launches especially in organised retailing," predicts brand consultant Jagdeep Kapoor, Chairman and Managing Director Samsika.
Tuesday, March 27, 2007
Source: fibre2fashion.com
FDCI inks MoU with Pak Fashion
Fashion Pakistan signed an MoU with Fashion Design Council of India (FDCI) at the Wills Lifestyle India Fashion Week (WLIFW), so as to encourage young talents in both the countries.
This agreement involves both countries working together to launch fashion aspirants onto the global stage.
Fashion Pakistan Chief Maheen Khan, CEO Rizwan Beyg, Vice Chairperson Honey Waqar and Director Deepak Perwani were present at the WLIFW.
Rathi Vinay Jha, Head FDCI, believes this step will add to friendly and cooperative trade relations between the two countries
Tuesday, March 27, 2007
Source: fibre2fashion.com
Archies as a brand to grow & expand
The Board of Directors of Archies Limited, India’s leading gifting and greeting company, have decided, subject to shareholders approval, to issue and allot equity shares and warrants to Bennett & Coleman company limited (BCCL) and Darashaw & Company Pvt Ltd respectively at its Board Meeting held in New Delhi.
Subject to shareholders approval at the EGM convened for April 19th, 2007, the company would allot and issue 250,000 equity shares of Rs 10/- each at a price of Rs 159.50 per share (including a premium of Rs 149.50 per share) to BCCL on preferential basis.
The company has also decided to issue and allot 400,000 convertible warrants to Darashaw and company Pvt. Ltd and 100,000 convertible warrants to other entities. The company has also decided to issue and allot 5,00,000 share warrants to promoter group.
All warrants will be issued at a price of Rs 159.50 (including a premium of Rs 149.50 per share on conversion). The allotment would happen after the shareholders approval at the EGM convened for April 19, 2007.
Archies limited would be raising approx. Rs 20 crores / Rs 200 million through this preferential offer. The funds raised would be utilized for the expansion plans of the company and to meet enhanced advertising costs.
Archies currently operates 83 company owned stores across India and plans to make it 230 stores by March 2010. These funds would further aid up the expansion and consolidation plans of the company, which is majorly diversifying into gifts and is the leader in the social expression industry. Commenting on the development, Mr. Pramod Arora, Executive Director, Archies limited, “ Archies, over the years, has grown from strength to strength in retail network, product offering and brand presence in the country. The retail sector on a whole is booming in India."
There is a drastic shift from unorganized to organized retail with traditional markets making way for exclusive brand outlets and retail malls, ushering in a new era of shopping. With changing lifestyle trends, globalisation and increased purchasing power, it’s the opportune time for Archies as a brand to grow and expand.
To aggressively pursue our retail expansion plans, we decided to infuse fresh capital and hence decided to go the preferential way. "We are contented with the response that we have got.”
Archies Limited is India’s top market leader in the social expression industry with over 50% market share in the organized sector.
Having pioneered the concept of branded retailing in India over the last three decades Archies has grown with the spread of modern culture, increasing urbanization and improving standard of living.
With the retail boom happening in the country, Archies is consciously targeting malls and other prime retail space for opening its own stores. With an increased focus of gifting, Archies has signed with many global majors.
It has also launched the new store brand Stupid Cupid, for fashion accessories and premium gifts. The company’s revenue from retail operations is just under 50% for the year ending 31.03.07 (Projected) and is expected to go up to 70% by March 2010.
Saturday, March 31, 2007
Source: fibre2fashion.com
Co-optex fashion event to promote handlooms
Tamilnadu Handloom Weavers' Co-operative Society, popularly called as Co-optex, staged a fashion show event wherein girls aged between 12 and 17 years walked the ramp.
The event was organized as part of Co-optex's ongoing handloom expo `Co-optex Butterfly Crown'.
Majority of the girls donned bridal finery with heavy jewellery, synthetic silk and decorative hairstyles.
Many contestants were unaware of conditions laid down for the fashion show, as few participants wore handlooms and some wore jeans and t-shirts
Judge N. Alamelu passed a remark that jeans were not part of the show.
The other judges were Kalyani Pramod, design consultant at Swarnajayanthi Gram Sorojgar Yogana and K. Sengupta, assistant professor at National Institute of Fashion Technology.
Despite the large number of contestants, the Judges had no difficulty in declaring results, in spite of large number of contestant.
Ten students won prizes. M. Monica of Class VI from Nungambakkam Corporation Higher Secondary School wearing a green handloom salwar suit, won Co-optex butterfly crown and a cash prize of Rs5,000, S. Kausalya of Class VIII, Cambridge School and P. Vanitha of class VI of Jaigopal Garodia Higher Secondary School were joint runners-up.
Saturday, March 31, 2007
Source: fibre2fashion.com
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Real Estate
Catapult Mumbai to higher orbit
Two years ago finance minister P Chidambaram spoke about the strategic location of Mumbai—midway between London and Tokyo—and the intention of his government to position the city as a regional hub for finance.
Over a month ago, a committee which was mandated to prepare the blue print for making Mumbai as a regional financial centre presented its report to the government which intends to publish the report. A debate on the report is to follow. It’s taken two years since the first announcement in Budget ‘05 for some shape to be given to the Mumbai makeover plan. And guess what’s happening around the world even before the debate has started in the country?
Closer home, Dubai is marketing the Dubai International Financial Centre, seeking to position it as the next best thing to take on London, New York and Hong Kong. The City of London, which maintains its top spot among global financial centres, is now vetting plans to take on future challenges which could be posed by countries such as China and India by 2016.
The City of London Corporation has launched the Global Financial Centres Index (GFCI), which it says has helped it track fortunes, perceptions and the competitiveness of major financial centres. Mumbai figures fairly low on the global index for which many factors are taken into consideration—among others, business and environment, taxation regime, quality of life, people and market access.
What is interesting to look at is the ratings which form part of the survey done for GFCI. Mumbai figures among the cities which are not rated highly and are reckoned as unlikely to improve in the near term. Keeping the city company are Moscow, Rome, Seoul and Warsaw. Some of India’s policy makers and the Percy Committee, which drafted the report, appear to recognise these challenges.
One, they realise that the next big bang approach ought to be adopted for India’s financial services industry. Like what the local IT industry did for the country, it reckons that financial services could be the segment where India holds the potential to emerge as a major competitive force, globally. How does it go about this? By unshackling local financial firms, investment banks and securities firms and allowing the skill and talent residing in these firms to flower by designing financial products which global firms want.
For intance, if Goldman Sachs feels that it is competitive to design and structure products for its global client based in Russia out of Mumbai that ought to be allowed. Similarly, an Indian company which has operations in several global markets and needs to hedge its exposure to a range of currencies (TCS and Infy come to mind) need not always seek out a Barclays or a foreign bank to access that hedging instrument. They do so as RBI does not permit such transactions. The upshot is billions of dollars flowing out of the country as fees to such entities, with the losers being local banks.
Sounds easy, doesn’t it? It anticipates resistance to these proposals. India’s financial sector regulators are not easy to convince. In this case such changes could mean accepting that capital account convertibility isn’t far away. That would signal changes in the existing regulatory structures. Are India’s financial sector regulators ready to accept changes?
The committee, one is told, makes the point that regulation has to suit market development. In some ways it could be a wake up call for regulators here. There are many entities in India which operate under one roof but need to approach three or four regulators in the financial sector, be it banking, insurance, securities markets and, in the future, pensions. Dealing with several such regulatory structures may not be an invitation for investors wanting to move in to a regional financial centre. Policy makers do acknowledge that this could be a wake up call for Indian regulators.
There are hints that the financial services authority could be a model to look at. The future of Mumbai as well as the financial sector could be linked a great deal to the development of such a financial centre. For Mumbai, there’s a lot at stake. Once the financial markets here develop (one would imagine a deep, liquid bond market), financing the development of the metropolis becomes easier. Other major financial centres have used the bond financing route to build their cities and maintain their competitiveness. It’s not just a wake up call for regulators but also the local and central governments. By the time they wake up, the City of London would have commissioned another survey for 2030 to stay two steps ahead in the game.
Tuesday, March 27, 2007
Source: TNN via economictimes.com
After Delhi, Bangalore to be the Next Maximum City
The Garden city of India, Bangalore is to witness amazing developments in its residential sector. Real estate developers are known to have fastened their seat belts to offer exclusivity to prospective buyers in the city.
With a European style villa, skyscraping residential complex having a single apartment on each floor, and an apartment with its own helipad, the days are not far enough when Bangalore will be counted among the most sought after cities in the world.
Demanding requirements of the status conscious populace and their westernized tastes of better quality accommodation and non resident Indians pondering over to return back to roots are some of the leading factors encouraging real estate developers to come up with the decision.
After Mumbai and Delhi, it is now the turn of country’s IT hub Bangalore to witness the trend of residential resorts. Earlier, these cities did not have the adequate supply of high end developments even in peripheral residential localities. Prominent property developers capitalized on the growth of a high society people who are ready to shell out large money to pay a premium for a quality product that almost promises an exclusive neighborhood.
What was unique, perhaps unheard of even in Mumbai and New Delhi, was that the developers selected the occupants of the apartments themselves, making the neighbourhood exclusive. Each floor has a single 5,500-odd sq-ft apartment. The first apartment was sold for Rs 3 crore, and the last, Rs 9 crore.
The trend got the track when the city based real estate developer, Mantri Developers came up with its Rs. 40 crore, 17 floor super premium residential project ‘Mantri Altius’ to be built over an area of 85,000 sq ft in one of the central locations. The project was launched in 2006. The decision of the developers to choose the occupants of the apartment themselves makes the Alitus first-of-its-kind residential complex.
Interestingly, Altius turned out to be a big success, and drawn large demand for such elite apartments. High-end apartments are those priced in the range of Rs 1-3 crore. It paved the way for such more projects in the city.
There would be 500 apartments (combined); one would come up in South Bangalore, while the other will be in North Bangalore.
Monday, March 26, 2007
Source: indianrealtynews.com
Increasing Real Estate Projects in India
A substantial increase has been seen in the number of real estate projects in India which have shown a mark appreciation from around Rs 30-60 crore, to between Rs 500-2,500 crore at present day.
Apart from the 200% growth in the past few years, real estate projects including commercial, residential, and retail is likely to reach sky high. This is one of the leading factors accountable for increasing property prices across the board. The first phase of the 2,504 acre hi Tech Township by Ansal Properties and Infrastructure Limited in Greater Noida, is estimated at Rs 20,000 crore.
However, such exclusive real estate projects are an addition to the prevailing projects ranging from Rs 500 crore to Rs 2,500 crore. Unitech, a leading property developer in India, is making an investment of Rs 2,500 crore in a mega integrated residential project, also in Greater Noida.
Natraj Buildwell Ltd. has come up with NRI hills-International City at Jaipur. The project contains the investments of Rs. 1,000 crore. The cost of Alpha G: Corp’s Project, Alpha International City, Karnal is determined to be 600 crore. Different projects of the renowned property developer, Parsvnath include Parsvnath Privilege at Greater Noida (Rs 35 crore ), Parsvnath City at Dahruhera (Rs 450 crore), a 5 star hotel and multiplex-cum-mall at Vijalpur, Ahemdabad (Rs 250 crore) and a shopping arcade at Rohini ( Rs 231 crore).
These high prohibitive real estate projects give an indication of the next real estate boom. Replying to the same, Manish Uppal, MD, Uppal Housing, holds positive perspective about the real estate growth in the country. However, the factors that are playing a critical role in the rising project costs include increasing cement prices and the developers’ vision to offer newer and quality construction.
Monday, March 26, 2007
Source: indianrealtynews.com
Where is Indian Real Estate Lacking?
Indian real Estate is raising the bar of performance a notch higher each day. But the industry is known to be unorganized and is dominated by a handful of players and supply of manpower. There is definitely a lack of required professionals; one, at the first line supervisory and project manager level; and two, at the workmen or entry level.
The shortage is more acute at higher level. Actually, there are few people with the kind of professionalism needed to stay in step with the growing number of real estate projects. They are the prime targets for poachers both in domestic and international market. The economic boom has caught India when it was unprepared and everybody is competing for the limited supply of skills.
There are around 1,300 engineering colleges that have been approved by All India Council for Technical Education. Near about 4 lakh students pass out every year from these colleges. Of this, civil engineering graduates account for a mere one tenth. Contrary to this, the highest strength is of computer science graduates and information technology.
However, the lack of manpower exists at all level thereby hampering the growth of the sector to a large extent. As far as real estate companies are concerned, several large players are there who resort to in house training. For example: L&T holds campus recruitment for both graduates and polytechnic engineers at the entry level. It provides training to about 1,000 people every year in its Chennai Centre whereas the need seems to shoot up in future.
The National Academy of Construction has begun several training programmes for skilled trades at institutional level. Likewise, the industry has adopted it is in Indian states like Punjab, Haryana, and Himachal Pradesh to redraft the curriculum to cater to the demanding needs of the country.
Finally yet importantly, the Indian real estate industry needs quality manpower then the mere workers claiming to hold proficiency. There is no uniformity maintained in the absence of necessary laws. What the sector actually needs is licensing of construction workers the way it is for drivers.
Tuesday, March 27, 2007
Source: indianrealtynews.com
Sebi clampdown to affect realty co valuations
Not only will Sebi's new norms force some real estate companies to rewrite their IPO documents, but in many cases, the valuations of these companies will reduce considerably, reports CNBC-TV18.
"There should be clear evidence that land bank is land bank and not a projection of something that is not rooted in reality," says M Damodaran, Chairman, Sebi.
Sebi is concerned that real estate companies include in their valuations land that they do not yet own. Worse still many offer future valuations as well.
In the case of Pune based Kolte Patil, property consultant Knight Frank has valued its 683 acre land bank at Rs 1,800 crore. But of the 19 projects valued, the company does not have a clear title or development rights for 9 and another 6 have not been fully acquired yet.
IVR Prime, on the other hand, has been valued at Rs 5,525 crores by Cushman & Wakefield, but the company's offer document clearly states that IVR fully owns only 5.08% or 117 acres of the 2300 acres that has been valued.
Mumbai based HDIL is armed with a valuation of Rs 22,000 crores for a total saleable area of 112 million square feet. Only letters of intent, MoUs or development agreements have been signed.
"Definitely valuations will be impacted if it is based on aggressive assumptions about the land bank when they don't even own or have the legal right to develop - how much it will impact will be a case to case basis. But I think valuations on a realistic assumption about land bank and based on factual accuracy are okay, so if you own land/title - legal right to develop, then it should part of land bank. But if you have no legal rights - ideally it should not be included as part of land bank," explains Sanjiv Agrawal, Partner, Ernst & Young.
Kolte Patil officials confirmed that their merchant bankers have advised them to revalue their land assets and make disclosures in keeping with the new Sebi norms.
However, as of now, all Sebi has asked for is that real estate companies disclose all details on ownership and that they make no future projections. The detailed guidelines are awaited but there's no doubt valuations will come down.
Wednesday, March 28, 2007
Source: moneycontrol.com
Service Tax will be charges on rentals of Commercial Property says FINMIN
Despite of strong protests from different sectors of India Inc, the finance ministry does not seem to change its stand of levying a service tax on renting of immovable property for commercial purposes.
Such property rentals are essential services and so should be brought under the service net tax. However, a final decision is still awaited for the amendments to the Finance Bill, which is likely to be tabled in the Parliament after the recess.
A service tax of about 12.36% will be levied on the rental of commercial property. The finmin is also thinking about increasing the scope of service tax to property leased for residential purpose. As such, there is no such proposal in the ministry’s pipeline.
Finance minister, P. Chidambaram has introduced service tax on rental of immovable property used for commercial purpose in Budget 2007-08. The proposal is not extended to the residential property, vacant land used for agriculture and similar purposes, and immovable property for educational or religious purposes.
The major sufferers will be corporates, multinationals, retail sector, restaurants, BPOs, IT companies, and multiplexes. Most of these companies especially BPOs take the property on rent to carry out their operations.
In addition, it’s natural for the property agents to feel anxious because of the proposed tax. For that reason, their protest is justified as they are of view that it would only lead to a further increase in rental prices.
There seems to be a common reason for protest from all quarters of life i.e. real estate boom, along with the lack of commercial space which has already pushed the rental rates to sky high. Service tax will be an additional burden.
Friday, March 30, 2007
Source: indianrealtynews.com
Blackstone carving a niche in Indian Real Estate
Blackstone, a leader in the field of private equity investing since 1987, is planning to raise $4 billion from an Initial Public Offer (IPO) in the US. This is believed to further boost investments in India after closing the public issue.
At present, the current investment of the group has already reached sky high with $2.5 billion, while it has also announced to create a $5 billion fund with Citigroup Inc. to make investments in a number of Indian infrastructure projects.
The group regards India as an emerging force in real estate industry and sees a large market for its future plans. It envisages beefing up its investment portfolio and its executive team in the country.
The company has set up one of its establishment in India in 2005 and hired Amit Dixit, previously a prinicipal at Warburg Pincus in New York, to be a part its India team in the financial capital of the country, Mumbai.
Blackstone is showing large inclination for various sectors including IT, media, technology, and banking for its future India investment plans.
Two New York Stock Exchange (NYSE) listed funds of the PE giant – Asia Tigers Fund and the India Fund have put a whopping $2 billion dollars ion the shares of Indian conglomerates.
The India Fund is known to have made an investment of over 98 per cent money in Indian stocks, totaling $1.88 billion. Wishing to carve out a substantial niche in Indian real estate, Blackstone has established a real estate operations office in Mumbai in 2007 to search the prospects in this fast flourishing sector.
Friday, March 30, 2007
Source: indianrealtynews.com
L.J. Hooker Carves out Expansion Plans for India
L. J. Hooker, the Australian real-estate company, which opened its outlet in Koramangala, Bangalore inaugurated its first franchise store with much fanfare is all set to make a spectacular entry into the Indian real estate market.
Established in 1928 by Sir Leslie Joseph Hooker, it has achieved unqualified success in creating its international network that spreads across a host of countries in South-East Asia that includes Papua New Guinea, Indonesia, Hong Kong, New Zealand, and China. The Group has more than 730 franchises in Australia and Asia.
L.J.Hooker is bringing to the Indian real estate operations its international network franchising model called the ‘L.J. Hooker franchise model’ backed by a strong software support and internet-based operation.
This model has won the company the prestigious `Australian and New Zealand Franchiser of the Year Award.’
The company aims to offer a comprehensive, reliable and efficient value-added service to the customer who wants to buy, sell and rent or needs to be advised on property matters. Its bouquet of services includes a rent-management program and a portfolio management scheme apart from consultancy services.
“Apart from finding a tenant for vacant commercial/residential space, we undertake property management activities like collecting rent on behalf of a landlord, paying his taxes for him, renewing leases, carrying out maintenance work on the property among others,” said Mr. Ramneek Bakshi, Principal Franchise, L J Hooker, India.
“At L.J. Hooker we want to capture a customer through all phases associated with buying, selling, renting and leasing a property including financing, conveyancing, insurance, relocating and utility connections,” said Warren McCarthy who heads the worldwide L.J. Hooker Group. “It’s a one-stop shop with pre-and-post-deal services ensuring customers that `nobody does it better,” he explained.
The move indicates Mr. Warren McCarthy’s strategic foresight in placing India in his global plan of expansion. On his choice of the city, he agrees that he zeroed in on Bangalore as it has highly networked and technology oriented individuals looking for a “reliable and transparent experience” that the model favours.
He also insists that the concept of real estate franchising requires a paradigm shift, as it were in mindset to grasp its broad nature and value additions.
There is a great deal of focus on training and education for franchisees as they become a part of a community that allows them to interact, learn and share their experiences. Franchise owners can get a better perspective of business, marketing and professional real estate management.
The company has a vision for itself, which is to create stores of L J Hooker in virtually every neighbourhood of a city so that persons living abroad wanting to buy or sell properties back home can operate from the nearby L J Hooker stores and network with the stores in their home town to do the job.
The move augurs well for the Indian real estate market.
Friday, March 30, 2007
Source: indianrealtynews.com
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Tier II Cities
Waiting in the wings
When the Indian government liberalised its norms on foreign direct investment (FDI) for the real estate sector in March 2005, developers welcomed the move enthusiastically.
In the same year, Panchshil Realty was the first developer to tie up with Indian Real Estate Opportunity Fund (IREO) to fund Rs 350 crore residential and Rs 450 crore commercial projects; today, there is an increasing number of FDI Joint Ventures (JVs) being signed in the city. The expected volume of residential property investments in India is $40 billion, whereas the volume of investments in infrastructure is estimated at $65 billion.
“FDI is beneficial to the city and a very good thing too because the money comes in one shot, which helps to create better infrastructure in the city,” explains Atul Chordia, MD, Panchshil Realty.
The government has laid down strict guidelines for FDI in India. An international investor cannot participate in a commercial office development of less than five lakh sq ft area, and at least 50 per cent of this must be built within five years. Once the land has been acquired, it cannot be traded; however, the developer is allowed to sell the building when it is complete.
estate funds that are interested in investing in the Indian real estate sector, it took a while for Indian developers to understand the implications of these regulations . “The norms have now become much clearer and more developers are beginning to see the value in allowing an FDI partner in a joint venture with them,” he observes.
Vyas also points out that there were several reasons why developers in Pune stayed away from FDI, including a lack of foresight and a belief that they did not need the funds. However, he explains, the value of FDI funds is not simply in the finance they bring, but the fact that they also lead to better construction techniques and world-class buildings . “They take a much longer view on real estate, which shows their commitment to the market. By creating such buildings, FDI partners will insist on quality control on their projects ,” he adds.
Vyas says there are billions of dollars waiting to enter the Indian real estate sector. “I am currently advising a series of funds that collectively have over $6 billion allocated to India,” he says.
While pointing out that his company decided to “focus on Maharastra, Pune, in particular as it presented itself well compared to other growth cities in India” , Vyas cautions against deals in Pune being too over-priced to represent value. “When this happens, they will look at other cities where realism may still exist,” he says. Cityland Corporation India is currently talking to a series of medium to large sized builders in Pune.
Rohit Gera, executive director, Gera Developers Pvt Ltd, believes that FDI is coming into the city in a major way, especially in sectors like residential , IT and hospitality. “This is very evident from the way the landscape of Pune is changing as more and more buildings seem
to be occupying what was earlier open spaces,” he says. This boom may be due to a very simple reasoning that prices are still comparatively attractive as against those of the metros, he observes. He also attributes this interest to the fact that industrial activity has picked up substantially, boosting the economy of the city. “We are seeing a demand from largely financial investors from US while there are a number of real estate developers’ queries from the
East
especially Malaysian company, Capitaland, Singapore based developer GIC and Keppel Land,” he adds. Gera’s own company recently signed a JV with Citigroup.
David Schaefer, Managing Director, Head of Asia Pacific, Citicorp Property Investors explains that the JV with Gera was the fourth project in which it has invested. According to him, the preferred sectors for FDI investors are in IT parks and the high-end commercial space arena. “Very few funds are getting involved in the residential sector as most funds believe that the local residential sector is strong enough and allows the builder to be funded by its customers who ultimately book flats in projects at the very early stage,” he says. “This process of funding pays for the builder’s construction costs in most cases.”
Real estate player Kolte Patil Developers Limited (KPDL) has been in touch with a US-based real estate fund to secure FDI for three of its projects . “The company is in talks with the New Jersey, US, based fund that will be announced formally in April,” says KPDL’s MD, Rajesh Patil. “The three projects are FDI-compliant with an estimated project cost of Rs 125 crore each,” he said.
KPDL has planned residential projects at Mohammedwadi, Bavdhan and Kharadi. KPDL recently received a commitment for institutional venture capital investment of Rs 300 crore from ICICI Ventures. This will be utilised for a township near Hinjewadi near the IT Park, a 12.5 lakh sq software park at Kharadi and 80-acre residential-cum-special economic zone at Wagholi on the Pune-Ahmednagar Road. The three projects will together be worth Rs 4,250 crore.
There are developers in Pune who still take a cautious approach towards FDI. Lalit Kumar Jain, MD, Kumar Builders, for instance, says: “For us FDI is not that attractive, it is high cost finance and we have not given it any serious thought. “ Adds Devananda Shetty, MD, Sudev Ventures: “We have had a proposal a long time ago but we are definitely not looking at an investor right now. We are not comfortable with the concept of FDI, for it’s like the stock market, one is never sure how it will turn. We are not happy about someone else dictating terms to us; instead we would think of investing our money in other foreign countries for as far as we are concerned economically, we have a strong base,” explains Shetty.
He agrees, however, that FDI is coming in a big way into the real estate market. “The sky is the limit for developers and builders and Pune is considered one of the growing market for such deals,” he adds.
Sunday, March 25, 2007
Source: TNN via economictimes.com
Real Estate Academy for Developers to come up in Pune
Pune’s property developers are soon to establish a Real Estate Academy for Developers (READ). The move is taken to stay in step to fulfill the requirement of qualified and trained professionals to manage the growth.
The Promoters and Builders Association of Pune (PBAP) is looking forward to set up a real estate project worth Rs.1.48 crore. The institute would use its own capital and has its own faculty. The institute will nurture the future leaders of Indian real estate sector.
Undoubtedly, Indian real estate is making rapid strides. But, the lack of professional assistance is what hampering the growth of the industry thereby lacking in the sources to cater to demanding business needs and handle critical aspects such as financial management and project management.
The first academic year of PBAP will start in June 2007. READ will be an independent institute which would offer an 18 month full time post graduate diploma in real estate business management. Considering the needs of working executives, the institute will offer a 12 month part time advanced diploma and a course for family businesses.
The institute is also planning to tie up with global education institutes including National University of Singapore, Institute of Real Estate Management, Hong Kong, Lincoln Institute and the German Technical and Vocational Cooperation programmes.
READ will be an addition to already existing prestigious institutions in the city of Pune, which includes the name like National Institute of Construction Management and Research.
Tuesday, March 27, 2007
Source: indainrealtynews.com
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Sector Specifics
Healthcare
Fortis launches boutique hospital for women
Fortis Healthcare launched its first `La Femme' a boutique hospital for women. The 50-bed, Rs 30-crore hospital that Fortis will manage for Sunrise Medicare, will offer obstetrics, gynaecology, neonatal care and even cosmetic surgery.
"It's a clear opportunity not just for birthing but for women related healthcare, bringing high end quality healthcare to women in north India. In the future we look to replicate this model in the rest of the country," said Mr Shivinder Mohan Singh, Managing Director, Fortis Healthcare.
The centre was inaugurated by Ms Renuka Chowdhury, Minister of State for Women and Child Development, who stressed on the urgent need to address issues of female infanticide, sex ratio and other gender related health issues.
"One crore girls have been killed in-utero in the last twenty years," said the Minister.
Sunrise Medicare had in the past partnered with Apollo Hospitals, for the chain of boutique birthing centres called the Cradle. The Cradle in Delhi has now been renamed Fortis's La Femme.
Fortis and Sunrise Medicare did not announce a time-plan but hope to launch a few more boutique hospitals.
According to Mr Shivinder Mohan Singh, Fortis, which is planning an IPO to raise between Rs 700-800 crore for its expansion plans which includes a medicity, will in the future expand through a combination of hub and spoke model, where medicities, tertiary care hospital and boutique hospitals will be linked in terms of services available. The company will look at growth in the form of hospitals that they will own and run, mergers and acquisitions and hospitals that they will manage.
Thursday, March 29, 2007
Source: moneycontrol.com
Automobile Sector
Hyundai to launch 2 cars in next 3 mths
Last month, Tata Motors overtook Hyundai as India's second largest car seller. But Hyundai plans to hit back hard, reports CNBC-TV18.
Hyundai will launch two cars in the next three months. It will revamp its Getz, and call it the Getz Prime, which will come with 1,100 and 1,300 cc petrol engines, and a 1,500 cc diesel engine. This will allow the Getz Prime to get an excise concession for small cars that the 1,400 cc petrol Getz does not enjoy.
BS Lheem, MD, Hyundai Motor India, says, “First we are going to introduce the 1.1 and 1.3 petrol and then in the second half of the year we will launch the 1.5 diesel car in the domestic market."
Within a year another entry-level car from Hyundai will be out. Code named the 'p-a' it will be a notch higher than the Santro and is expected to have a 1000-cc engine.Hyundai also has other plans.
Lheem comments, “We do have plans to introduce a 1 ton capacity small light commercial vehicle, that is under the feasibility study."
Hyundai says its one tonne vehicle, which sells as the H-1 and H 100 truck in Europe could be introduced in India, to compete with the popular Tata Ace.To support these plans Hyundai will double capacity at its Chennai plant
Hyundai Motor India is also planning to heat up its export business. The company says that by this time next year, its newly expanded Chennai plant will be fully operational and will have a capacity of 6 lakh cars a year. At least 2 lakh of those cars, primarily the Santro and the Getz will be for the export market primarily in Europe.
Monday, March 26, 2007
Source: moneycontrol.com
Bumpy road ahead for auto industry!
The auto industry is slowing down. In the first two months of the year, two-wheelers, cars and commercial vehicle growth eased. It is a bumpy road ahead, reports CNBC-TV18.
Carmakers will remember 2006 fondly - that is, until interest rates began to harden! Between April and December last year two-wheelers grew 20%, while the figures for commercial vehicles, or CV was 45% and that for cars was 18-20%. Then came the pain. Commercial vehicle growth slowed to 32% in the first two months.
"There will some downturn in the CV industry, but we have grown in the medium duty vehicle by 30-40%. This is an unprecedented growth in this financial year" says Vinod Dasari, COO, Ashok Leyland
In the short term, that may not happen. Analysts expect commercial vehicle profitability to fall to 15-20%, largely on tighter accessories supplies. But car and two-wheeler makers face a different music. Most analysts are projecting 12% growth for cars, while the figures for the motorcycles are 12-15%.
"We will see slowdown but we will be able to beat it" feels Sanjiv Bajaj, ED, Bajaj Auto. So two-wheeler makers are trying to boost sales with discounts and freebies like Hero Honda's World Cup offer, while carmakers are partnering auto financiers to cut car loan rates.
Kotak Mahindra Bank and ICICI Bank have reduced car loans by 0.5%. But even while carmakers work to keep financing at the minimum, competition will eat into margins. Fond memories might stay with last year.
Friday, March 30, 2007
Source: moneycontrol.com
Media & Entertainment
Media, entertainment sectors poised for heady growth
The Rs 43,700-crore entertainment and media industry is poised to see heady days ahead.
Increasing market penetration, technological advancements, new platforms for content delivery and a surge in foreign and private equity fund investments will be fuelling growth of this sector in the coming years.
This was the dominant view of experts who participated on the first day of the three-day FICCI Frames 2007 here on Monday.
The experts were drawn from the entire spectrum of the entertainment and media industry.
The event, which is the eighth edition of the FICCI series, was inaugurated by the Union Minister for Information and Broadcasting, Mr Priyaranjan Dasmunsi.
A FICCI report on the industry, prepared by PricewaterhouseCoopers, which was released at the inaugural session, estimates that the industry could balloon to Rs 1 lakh crore by 2011, translating into a cumulative growth of 18 per cent in the next five years.
Among the segments in the industry, the television sector is expected to continue to contribute the largest share, as was the trend in the last three years.
"The television industry revenues are expected to grow from the current size of Rs 19,100 crore to Rs 51,900 crore by 2011, implying a 22 per cent cumulative annual growth in the next five years," the report said.
The print media too is projected to grow from the current size of Rs 12,800 crore to Rs 23,200 crore by 2011, mirroring a 13 per cent annual growth.
This sentiment is boosted by the growing interest in India among the global investor community, with the foreign media too evincing interest in investing in Indian publications.
The film industry, which is currently placed at Rs 8,400 crore, is expected to touch the Rs 17,500-crore mark by 2011.
"The industry is getting increasingly corporatised. Several film production, distribution and exhibition companies are coming out with initiatives to set up more digital cinema halls in the country."
Significantly, the entertainment and media industry saw the maximum flow of foreign investment in 2006, with 13 proposals cleared by the Ministry of Information and Broadcasting during the year. Another 22 proposals are pending with the Ministry.
The last two years, the report said, have also seen a flurry of funds entering this sector, including 3i, Matrix Partners, Warburg Pincus, De Shaw and T. Row Price International.
Earlier, inaugurating the session, Mr Dasmunsi said that the core groups constituted by the Ministry on the film sector have recently submitted their recommendations.
The need for the film industry to participate in overseas markets and stem piracy formed part of the recommendations.
The Minister said that the Cinematograph Act 1952 was being overhauled and the draft formulation of the proposed amendments would be ready soon.
The Government is going ahead strongly in the realm of signing co-production agreements with other countries.
Mr Yash Chopra, producer and Chairman of FICCI's Entertainment Committee, said that earlier only 200-300 prints of a film were released, while today about 900 prints get distributed across the country.
Monday, March 26, 2007
Source: moneycontrol.com
Pharmaceutical Sector
Pvt entry into opium may drive exports & cut costs
A clutch of pharmaceutical majors, including Ranbaxy, Dr Reddy’s, Cipla and Nicholas Piramal, has formed a queue before the finance ministry, asking for the licence for processing opium on industrial scale, in what could pave way for ending the decades-old government monopoly in this business which holds good export potential as many opium derivatives such as codeine phosphate, morphine and noscapine are used in many pharmaceutical preparations for their analgesic properties.
A few months ago, the finance ministry had notified its intent to throw open opium processing to the private sector and invited expressions of interest, a move aimed at upscaling the domestic capacity for this activity, which is limited, as only two government units—at Neemuch in MP and Ghazipur in UP—are engaged in opium processing, under strict government regulation.
The plan now is to have two units for production of opiates (opium derivatives) in the private sector with combined capacity of 100 tonne opium a year. India imports half of its codeine phosphate requirement, escalating the cost of production of a large number of painkillers and cough preparations in which this substance is an essential ingredient.
A senior finance ministry official told ET that the government may go for competitive bidding process—in terms of licence fee—to select two among the applicants. This is because many of the applicants seem to qualify in terms of most other parameters like adherence to good manufacturing practices, etc.
“In the due diligence process, we will give weightage to companies with unblemished past,” the official said, adding that the companies’ track record in complying with the Drugs & Cosmetics Act and the NDPS Act would be gauged. The government reckons that the private companies would be able to induct superior technologies in making codeine phosphate out of raw opium.
The two government factories use an outdated processing method. As a result, just a quarter of the opium cultivated in the country under regulation is exported as alkaloids while the rest is exported in raw form, even as there is huge demand for alkaloids from Europe. Apart from codeine phosphate which has high industrial demand in India and abroad, licencees will be allowed to manufacture other alkaloids like thebaine, noscapine, narcotine, cotarnine, dionine, morphine sulphate, etc. India exports opiates worth Rs 600 crore a year now and this could be increased manifold.
Alkaloids derived from Opium are mainly used in terminally ill cancer and AIDS patients for their analgesic properties. They also find use in cough suppressants, medicines for gastrointestinal disorders and, to a lesser extent, for the treatment of drug addiction. Raw opium is the exuded latex obtained by incision into the unripe capsules of the poppy plant. It contains over two dozen alkaloids. There are international treaties to control production of opiates, their medicinal use and exports as misuse could endanger public health.
Tuesday, March 27, 2007
Source: TNN via economictimes.com
Chemical Sector
Chemical industry wants higher import duty
The Indian Chemical Council (ICC) has sought protection from the Government in the form of increased customs duty on most of the chemical products.
According to the ICC, most chemicals attracted the peak customs duty of 12.5 per cent till last year. This year's Budget has proposed to bring down the peak customs duty from 12.5 per cent to 10 per cent. But in the case of chemicals, the rate has been brought down to 7.5 per cent.
Higher Duty
The President of ICC, Mr Dipankar Dutta Gupta, said that this has led to a situation where inputs often attract higher duty than the end products.
According to the council, while the rate of duty on most chemicals has been reduced from 12.5 per cent to 7.5 per cent, the duty on most of the building blocks for these chemicals continues to be 5 per cent. Thus the differential has come down to 2.5 per cent as against 7.5 per cent.
"We have asked that all chemicals that attracted the peak rate earlier may be placed back in the peak rate category and attract 10 per cent duty rather than the proposed 7.5 per cent," Mr Dutta Gupta said. The ICC also has an alternative proposal for the Government in case the restoration of peak rate is not possible, he said.
Monday, March 26, 2007
Source: moneycontrol.com
Telecom Sector
Trai fine-tunes customer grievance mechanism
Telecom regulator Trai is taking the side of the customers. It has decided to pass a regulation in the next 15 days, seeking to make it mandatory for every telecom service provider to have a 3-tier, in-house system for the redressal of public greviances, reports CNBC-TV18.
The first would be the customer care center, from where customers would obtain a docket number. The second, would be a nodal officer appointed by the telecom company. And third, there would be an appellate within the company for grievance redressal.
"After all, this telecom service providers who are assessed in billions of dollars are very responsible people. We see that they will realise their responsibliity; we are not into micro management that you open an office there - you appoint this person, we set a certain framework and ask them to comply with them," says Nripendra Misra, Chairman, Trai.
Monday, March 26, 2007
Source: moneycontrol.com
Aviation Sector
A brand new look for Indian-Air India combine
Work is on in full swing for the Indian-Air India merger. And first on the anvil is a new look, reports CNBC-TV18.
Indian went for a brand overhaul last year. Its mint fresh planes will now need to be repainted in the new colours of the merged entity. Top aviation sources say that the new entity will be called Air India - an effort to maintain the current top position on the ABC directory, a database of airlines used by the International Air Transport Association, other international airlines and tour operators worldwide.
The logo is expected to be a cross between the current logo of Air India and Indian. The popular mascot of Air India - the Maharaja, will also be retained. The new company registered as the National Aviation Company Ltd will headed by a Chairman-cum-Managing Director and will have three board of directors.
The company will be divided into five divisons - Jet Shop (for repairing engines), maintainance and repair section, cargo division, ground handling, full service carrier, and a low cost divison each headed by a CEO.
Though it is still early days, a new Indian aviation giant will soon emerge with a strength of over a 100 aircraft - most of them brand new. The employees of the two airlines have been squabbling over the branding, but this decision could put all stress to rest and hopefully the Maharaja will rise one again to be a world class carrier.
Monday, March 30, 2007
Source: moneycontrol.com
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Agriculture
Govt creates buffer stock mechanism for sugar
The languishing sugar industry has recieved a much-needed shot in the arm, with the government declaring the creation of a buffer stock mechanism, as also export incentives for two years. CNBC-TV18 reports on the measures being considered.
Analysts say the government is to create a buffer stock of sugar and give export subsidies. This would create a buffer stock of 20 lakh tonnes for two years.
There would be an export subsidy of Rs 1,350 per ton for coastal sugar mills and an export subsidy of Rs 1450 per ton for northern mills. There would be an incentive of Rs 440 per tonne for export of raw sugar.
The measures would help manufacturers clear dues of sugarcane farmers, state analysts.
Internal transport and freight charges for exports are to be defrayed and also the marketing, and handling charges for sugar export. Ocean freight disadvantage would also be factored into payment. Subsidy for sugar exports will be available for up to 30 lakh tonnes for two seasons.
Monday,March 26, 2007
Source: moneycontrol.com
Sugar stocks rise as Govt plans incentives for sector
Sugar stocks went up even as the Sensex went down 161 points on news of a sugar buffer scheme and export incentives to the industry.
Shares of Bajaj Hindusthan were up 4.06 per cent to Rs 175.40 while Sakthi Sugars climbed 6.92 per cent to Rs 63.60; Balrampur Chini Mills saw prices moving forward by 3.62 per cent to Rs 64.35 followed by an 8.90 per cent rise in Shree Renuka Sugars to Rs 430.
The Government on Monday cleared a proposal to build a 20-lakh-tonne sugar buffer at the factories, besides providing an export incentive of Rs 1,350 per tonne for coastal States such as Maharashtra, Tamil Nadu, Karnataka and Gujarat and Rs 1,450 per tonne for Uttar Pradesh and the northern states.
The export incentive will partially cover the costs of local transportation, port handling and ocean freight.
"The Government incentive to sugar companies looks good in the short term provided the Election Commission clears the proposal given that Uttar Pradesh elections are fast approaching. However, in the long term there is no structural change in the sugar story with companies trying hard to protect their bottomlines," said Mr Vikram Suryavanshi, research analyst, Karvy Stock Broking Ltd.
Production this season (October-September) is likely to touch a record 230-240 lakh tones (lt), and if the inventory at the mills are added, total sugar availability could be around 270 lt.
Sugar companies are in a spot as the annual domestic consumption is only 18.5 lt.
The Food Ministry is said to have recommended an extra Rs 440 per tonne support for raw sugar exports. The market for white sugar is not as promising as raw sugar with huge refining capacities coming up in Bangladesh (15 lakh tonnes), Indonesia (12 lakh tonnes), Dubai (15 lakh tonnes), Saudi Arabia (10 lakh tonnes) and Egypt (7.50 lakh tonnes), explaining the move of the Food Ministry.
Tuesday,March 27, 2007
Source: moneycontrol.com
Cabinet to take final call on farm insurance scheme
Farmer-unfriendly SEZs may not be the only issue for policymakers in the UPA to worry about in the agriculture sector. An over two-year-long tussle between the Planning Commission and the farm ministry over the implementation of a crucial risk mitigation instrument, the Modified National Agricultural Insurance Scheme (MNAIS), may now only be settled by the Cabinet.
The note on the MNAIS was first submitted to the plan panel by the agriculture ministry, as far back as February 2005. Twenty-five months later, it’s still hanging fire. Through the later half of 2006, the plan panel did not send its comments on the memo prepared by the farm ministry for the Expenditure Finance Committee (EFC) on the MNAIS and circulated to all appraisal agencies for their comments. It is only after the plan panel sends its reply that the farm ministry will submit the note to the EFC for consideration. Once that is done, the note will be forwarded to the Cabinet Committee on Economic Affairs (CCEA).
The commission has been dragging its feet over MNAIS, although the agriculture ministry has openly acknowledged that the existing NAIS is flawed and a modified scheme needs urgently to be implemented to benefit more farmer beneficiaries. The tussle over the MNAIS is notwithstanding the fact that the government is battling the impact of severe supply side constraints engendered in the farm sector, leading to high domestic prices. Risk mitigation through insurance and other instruments is viewed as a key factor in countering the crisis in the primary sector.
The MNAIS takes into cognisance shortcomings/limitations like ‘unit’ area of insurance, calculation of guaranteed income, low indemnity level, delay in the settlement of insurance claims, etc., and it was expected that it would be announced in finance minister P Chidambaram’s Budget speech for 2007-08, at least in pilot form.
In April 2006, more than a year after the MNAIS draft was submitted, the plan panel returned it to the farm ministry. It contended that the NAIS itself should be shifted to the non-plan side and asserted that it favoured funding only the overhead component of costs of MNAIS such as undertaking crop cutting experiments and threshold yield determination for major crops. It also wanted the MNAIS to be implemented only on a pilot basis in districts/states which had requisite data collection capability and infrastructure for feedback.
The farm ministry said this was a ‘harsh blow’ to its extensive efforts to bring more farmers under the umbrella of insurance. The plan panel, though, stuck to its position that in the absence of data required for actuarial calculations, the MNAIS could not be a plan activity and should come under non-plan activity.
That put paid to any hopes of pushing the MNAIS through the plan panel. The NAIS is an ongoing scheme which has been implemented as a plan scheme since 2000 and, experts stress, there is little logic behind insisting that if the current scheme is modified, it has to be classified as a non-plan activity.
The proposal that the MNAIS be implemented on a pilot basis was also seen as defeating the very purpose of including more farmers under the ambit of the insurance scheme.
Wednesday,March 28, 2007
Source: TNN via economictimes.com
Govt at the receiving end of farmers’ ire
Farmers in Punjab and Haryana are up in arms against the government over minimum support price of wheat. Unions like All India Kissan Coordianation Committee and Bharat Kissan union have come together to mobilise farmers in the towns of Khanna, Moga and Ferozepur against the “government pressure”.
The resentment follows reports that private companies like Cargil, ITC, Reliance, Adani may be kept out of wheat procurement this year Only this March 17, Punjab chief minister Parkash Singh Badal had demanded the merger of the bonus Rs 100 per quintal on wheat announced by the Centre in addition to MSP of Rs 750 per quintal on wheat. He had requested the Centre to announce a MSP of Rs 900 per quintal.
As per sources, a leading company that had earlier booked 3 lakh bags of wheat had withdrawn with out further notice.Also keeping a tab on these two important markets (Punjab and Haryana) are futures trading companies Financial Markets International (FMI) and National Commodity & Derivatives Exchange Ltd (NCDEX).
Though the futures trading in wheat has been suspended, FMI and NCDEX have been educating farmers in places like Moga and Sirsa—the hinterlands of Punjab & Haryana—about futures trading.
Addressing the farmers here in Moga, Mr Sharad Joshi, Member of Parliament, said, “I do not mind future trading provided it benefits the farmers. After all, Punjab provides wheat to the whole of India. In Maharstra as well we will not let the Cotton corporation of India to procure cotton in the coming season.’ Its also felt that not all farmers will be able to hoard wheat for long as the hoarding costs multiply with every passing month.
Wednesday,March 28, 2007
Source: TNN via economictimes.com
Montek sows seeds of corporate farming
Planning Commission deputy chairman Montek Singh Ahluwalia is optimistic on the feasibility for large corporate ownership of farmland. Farmers will continue to own the land while the states can create an institutional mechanism for contract farming with the support of corporates, he said.
In his special address at a seminar on corporate’s role in rural development, organised by Madras Management association in Chennai on Tuesday, Mr Ahluwalia said the corporates could supplement government’s efforts in strengthening rural infrastructure.
He disclosed that in two months a national farm strategy is expected to be ready to help the government achieve the targeted 4% growth in the agricultural sector in the current plan period. The strategy is being prepared by the committee of chief ministers based on the report of national farming commission, findings of planning commission and other inputs. The strategy will be discussed at the meeting of national development council and finalised.
Mr Ahluwalia said agriculture and rural developments are different from each other. While the government could take up rural development projects to provide direct employment on a temporary basis, the country needs to achieve a dynamic performance of the agriculture sector by doubling the growth rate. This called for diversifying the crop pattern to include food crops, horticulture, livestock rearing, poultry etc. Mr Ahluwalia said the first green revolution with technological break throughs was largely driven by the support provided by a host of public sector undertakings and institutions. That time, IPR was not an issue.
However, situation has changed over time. Any direct relationship between farmers and corporates is bound to create suspicions and fear of unbalanced growth due to the economic power of corporates.
It could be overcome if the states evolved an institutional mechanism for contract farming to protect the interest of farmers and provide an entry for corporates at the farm gate level.
He said the basic farm research will continue to be done by the PSUs and the private sector could focus on providing related services. Beyond Budget provisions, government needs corporate support in strengthening rural infrastructure in areas such as technology breakthrough, marketing, logistics and farm extension services.
Earlier, Jayashree Venkatraman, director, Tafe and MMA vice-president said compared to China, whose rural population is also moving, India’s urbanisation has been looser and more haphazard. It is posing new challenges like battles for land, competition for jobs, strained resources and political tensions. Cities’ dominance means the India will never return to a farming based economy.
From rural poverty it has changed to urban poverty. For this situation to change rural economy needs to be revitalised . The pace of building rural infrastructure like power, irrigation must be speeded up. While the government is playing its role on a mega scale, corporate houses must provide a helping hand to raise the living standard of rural masses.
While they are promoting educational institutions and health centres, a concerted effort towards setting up of cottage industries making use of natural resources and local raw materials could arrest migration to cities and lead to empowering women, she observed.
Wednesday,March 28, 2007
Source: TNN via economictimes.com
Govt increases agri lending target by nearly 30%
The government has increased the agricultural lending target of banks by nearly 30% to Rs 2.25 lakh crore for 2007-08. The target for 2006-07 was Rs 1.75 lakh crore.
Banks have successfully expanded their short-term agricultural lending during the last few years. During 2006-07, all banks collectively lent close to Rs 1.90 lakh crore, surpassing the target of Rs 1.75 lakh crore, Union minister of state for finance PK Bansal said here on Friday.
Praising banks for having achieved the agriculture loan target, the minister said, "We are in the third phase of financial and banking reform. The reform process has helped banks achieve the target," Mr Bansal said at a seminar organised by Bharat Chamber of Commerce here.
The challenge before the government is how to maintain GDP growth amid high inflation. "It is a matter of great concern. A stage has now arrived when banks need to re-balance asset portfolios to keep the momentum on credit growth without putting extra pressure on inflation." he said.
The wholesale price index is at 6.46% in the 12 months to March 17, 2007, matching the preceding week’s level. On banks_ operational side, Mr Bansal said banks are now being encouraged to team up with post offices and NGOs to penetrate into, hitherto, under-banked areas and increase their rural operation.
"Arrangement with post offices and NGOs will help banks in their drive to achieve financial inclusion. After Puducherry, Himachal Pradesh has also achieved 100% financial inclusion," the minister said.
Nearly 222 banks (including regional rural banks) with their over 65,500 branches are operating across the country. By comparison, the postal department boasts of a network of 1,55,000 offices, 80% of which are in the rural areas.
On policy issues, the minister said that the government will retain 51% minimum government holding in public sector banks. “We are however in favour of the merger and acquisition route for public sector banks to achieve higher scale of business. But such initiative need to be taken by banks themselves,” Mr Bansal said.
Friday,March 30, 2007
Source: TNN via economictimes.com
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Lifestyle Trends
Titan Industries enters prescription eyewear biz
Titan Industries has announced its foray into the prescription eyewear business with Titan Eye +.
Titan plans to open 150 Titan Eye + stores in five years in class A and B towns. In the initial phase, 10 stores will be opened in Bangalore (5), Chennai (4) and Nagpur (1). The first of the pilot stores will be inaugurated next week in Bangalore. Three more will come up in the city this month.
Titan Eye + hopes to be a one-stop-shop for style and eye care. Apart from selling frames and lenses, it will also offer free eye testing.
The Titan Eye + store will sell frames under the brands Titan, Eye + and Dash (for children), apart from fashion brands such as Vogue, Elle, Hugo Boss, D&G and Mont Blanc. Lenses will also be sold under the Titan brand, apart from Essilor and Nikon.
Titan Eye + is positioned as a player in the mid-priced segment. While the Titan brand of lenses cost Rs 145-21,000, the other brands cost Rs 350-15,000. Frames cost Rs 395-890 (Eye +), Rs 950-4,000 (Titan) and Rs 2,500-25,000 for fashion brands. Titan Eye + will also sell contact lenses from Bausch and Lomb and Johnson & Johnson, apart from sunglasses from Fastrack, Gucci, Ray Ban and Mont Blanc.
According to Mr Bhaskar Bhat, Managing Director, Titan Industries, while 30 per cent of the population requires vision correction (300 million), there are only 84 million users.
The eyewear market is valued at Rs 1,800 crore in turnover terms, growing at 15-20 per cent per annum. Titan Eye + hopes to capture 20 per cent of this market in 3-5 years, said Mr Bhat.
First year
He also hoped that the eyewear division will make Rs 15-20 crore in the first year of operations.
While Titan will handle the design, retail and marketing, it will outsource manufacturing, finishing and assembling. Mr Ronnie Talati will head the eyewear business.
Titan Industries hopes to finish this financial year with a turnover of Rs 2,000 crore.
Friday,March 30, 2007
Source: moneycontrol.com
Luxury malls coming to India
Consumers are all set to get a taste of the good life, with luxury malls coming to India, reports CNBC-TV18.
Escada, Alfred Dun Hill, Hermes and 200 other global luxury brands are waiting to enter the Indian market. But high cost rentals and lack of retail space has meant delays. The Gitanjali Group may be the answer to their prayers. This listed company has announced an initial investment of over Rs 100 cr towards luxury retailing.
In fact, Gitanjali has set up two separate entities, Luxury Connexions which will facilitate the entry of global brands and Luxury Malls that will provide exclusive retail space to domestic and global high-end, luxury brands.
Its first luxury mall, spread over 45,000 sq feet, will come up in Hyderabad by this year end, followed by Delhi and Mumbai. Gitanjali is currently looking for real estate properties in both cities.
Shashank Pathak, VP - Luxury Malls, Gitanjali, says, “We may be acquiring or be leasing it, 70% of it will be marketed to other brands, that's where our revenue will come from.”
Apart from being a one-stop shop of global luxury brands, these malls will also have a digital theatre and premium convention centers. The Luxury market in India is growing at over 25% and is likely to touch Rs 5000 cr by 2010. No wonder then, that apart from Gitanjali Group, other players like DLF and Shoppers Stop are also looking to bite into the luxury space
Saturday,March 31, 2007
Source: moneycontrol.com
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