Sunday, May 27, 2012

News&Views Today=28th,May'12= Protect & Support India's SOFTWARE INDUSTRY= Medicine For Patient, Not for Pharma Co= 4LPG Cylinders P.A.= JK CEMENT Does well = Air India – GOPINATH'S Sound Suggestions







1.    NEWS :-  The Central Board of Direct Taxes had taken the view that deputing software professionals to the project-site for software creation was in fact ‘body shopping’ and not software exports. It has now called for comments on this from its offices and is expected to issue some CLARIFICATIONS in the matter.

VIEWS : Deputing a software professional abroad for on-site software creation is much, much different from deputing a driver or Doctor abroad for work. The software Professional goes abroad with special skills, for CREATING SOFTWARE on site – which of course, he could do from the Indian office as well some times. But, sometimes, he has to go to the project site and create the software there itself. When he comes back, the software he has CREATED is very much available for all to see – and it powers the projects for a long time to come. 

On the other hand, when a Driver or Doctor goes abroad, offers his skills and comes back, there is nothing abroad, to show that he ever existed there. His work is  purely temporary, for the time being, and yes, it is a sort of Body-shopping (or skill-shopping).

On the other hand, A software professional can export software from his Office or sometimes create it on the project site only -  and that very much is SOFTWARE EXPORT, as much as a software crated in India and sent by electronic or physical means abroad.

To draw an extravagant parallel – suppose TATAs export CARS but someone from TATAs goes along with the CARS and sells them abroad, is it selling cars or is it BODY SHOPPING? 

SOFTWARE is an invisible good. It is much like a CKD Unit, carried in the head of the software professional which is built up at the project site. 

By no stretch of imagination can it be called BODYSHOPPING. There is a tangible good  which he creates and sells at the site – and that tangible good is the SOFTWARE he builds at the site. He is not a physical worker like a driver, who is offering a purely temporary service.

SOFTWARE EXPORT is the forte of India – and CBDT and finance Ministry must support this Industry in all possible ways – even relaxing some of their present positions. On the other hand, calling SOFTWARE CREATION ON SITE as Body shopping – simply because the Income tax officer is not able to see  A PHYSICAL GOOD, where a SOFTWARE GOOD does really exist – is obviously incorrect . Don’t see a floppy disk or Hard disk as the only SOFTWARE going from India aboard. Creating the same on-site  is ,without a shadow of doubt, SOFTWARE EXPORT.

2.    PRIZE vs PATENT : There is an excellent suggestion from Dr.Joseph Stiglitz, Nobel laureate, reproduced in Economic times on 21st and commented editorially today – that the world must shift from a PATENTS regime  TO  a PRIZE based system for new drugs. It is a practical suggestion. The Editorial says, The Bill and Melinda foundation is already successfully experimenting with this Model. Innovators must be rewarded handsomely for their innovation / discovery – and they have to give up their right on their innovation / discovery.

VIEWS : In my view - new Drug discoveries are painfully few and far between today. We can name scores of widely prevalent diseases – for which there are no complete cures. Sometimes, we feel, that there is no real support for finding complete cures – but only for just MANAGING the disease life long, so that, the patient becomes a lifelong source of revenue for Pharma Companies. 

The Pharma Companies’ costly Medicine regime – especially makes us suspect that this is so. It seems that they do not want CHEPAER MEDICINES at all. Neither they make cheaper drugs which are obviously possible – nor do they allow others to make such cheaper drugs. This is simply unacceptable that Patients are allowed to suffer – when cheaper drugs are possible.

If there is a more effective innovation by some scientist, a Pharma company claims Patent on it – and produces it – at an astronomical price (NOT ASTRONOMICAL COST). But, if some other company produces the same drug and is able to sell it at a small fraction of the Price, the Patent company blocks the production of drug at LOW COST & PRICE. This makes the whole system ridiculous. Drugs for whom ? Drugs at what cost? Is it for all suffering Patients or for creating Profits for the Drug Company?

In this context, Pharma Scientists all over the world must gladly embrace the suggestion of Prof. Stiglitz – for accepting a GOOD PRIZE (MONEY ESPECIALLY) AND A CITATION rather than selling it to a Pharma Company. Governments must come forward to institute such Prizes – and such prizes must be much, much more than what a Pharma company will offer – and spur the scientist into further innovations. In India, the encouragement that a scientist or Scientific Lab receives is very Poor at present – and this situation must change quickly and drastically.

There is especially GREAT NEED to promote indigenous research into both ALLOPATHIC CURES and AYURVEDIC CURES – especially the latter. This writer is  a great beneficiary of Ayurvedic Cures and is convinced that if this indigenous science promoted well -  India will achieve Great Breakthroughs in ensuring the health of people across the world.

3.    ONLY FOUR LPG SUBSIDISED CYLINDERS IN A YEAR :- This is a big negative step from the Government. It is expected to be implemented shortly.  

VIEWS : This step is similar to the Planning commission’s BPL income level of Rs.24( or so). Every one, except Planning commission, knows that - no one can live at that Income level. Planning Commission received a lot of flak for it. 

The LPG restriction is worse than that. I would request the Government to show ONE SINGLE FAMILY BELOW POVERTY LINE or ABOVE POVERTY LINE – which can do their cooking with 4 cylinders in a year. By all means, block the LPG use from uses other than cooking, like water heaters etc. If this is taken care of - no home can ever misuse LPG cylinders for any purpose other than cooking. But, if Government does not supply cylinders, or supplies them short or at huge cost – the suffering will be felt by  99% of the people presently using them. 

Government on the one side is using funds on schemes like NREGS – which is almost wholly non-productive. On the other side, it is now curtailing the most essential LPG Cylinders supply. LPG is as important as rice and wheat for the people’s food needs. 

For a small family of three, for the most essential food needs alone, a cylinder is needed once in 25 days. Government cannot curtail this supply in cities, urban and suburban areas. Villages have firewood availability – which is not there in non-rural areas. But, Government is extending LPG to villages and luring them into it – even while it is unable to supply it in non-rural areas efficiently.
12-14 Cylinders per a small family per annum is the absolute minimum needed. Please do make all your investigations and enquiries and research. But, do not curtail LPG supplies and do not make the cost astronomical.

4.    J.K.CEMENT LTD : JK CEMENT has done well in both Q4 and FY 2012.Total Income from operations stands at Rs.809.40 Cr in Q4 FY 12 and Rs.2094.35 Cr in FY 2012, against Rs.672,46 Cr in Q4 FY 2011; and Rs.2094.44 cr in FY 2011. Net profit is Rs.80.35 Cr in Q4 FY 12; and Rs.174.57  Cr in FY 2012 compared to Rs.53.56 Cr in Q4 FY 11 and Rs.62.62 Cr in FY 2011. The Basic EPS  stands at Rs.11.49 in Q4 FY 12 and Rs.24.97 Cr in FY 2012 compared to Rs.7.66 in Q4 FY 11 and Rs.8.95 in FY 2011.The company has recommended a dividend of 50% (Rs.5 per share) for FY 12.

5.    AIR INDIA :-Today’s ET has an article by Captain G.R.Gopinath on “Air India – easy to fix if there’s Political will”.

VIEWS : An excellent analysis on Air India. But, like in all other cases, Government needs a clear vision of what it wants of the Airlines Industry. I feel, Like  Sri Gopinath, that Government must plan to carry 20% of Indian Population by Airlines before a decade. Whatever it takes to achieve this – that must be done.

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