NEWS & VIEWS TODAY=13TH, JUNE, 2012 = INDUSTRIAL GROWTH AT STAND STILL = GOVT NEEDS REBOOT, SAY NRN & PREMJI = SUNDARAM FASTENERS SET TO GROW FURTHER = VENUS REMEDIES GETS US PATENT = SBI EXPECTS CRR CUT BY 1% = FM EXPRESSES CONCERN OVER BAD LOANS OF SBI,CBI,UCO

NEWS & VIEWS TODAY

13TH, JUNE, 2012

INDUSTRIAL GROWTH AT STAND STILL IN APRIL

GOVT NEEDS REBOOT – SAY NRN & PREMJI

SUNDARAM FASTENERS SET TO GROW FURTHER

VENUS REMEDIES GETS US PATENT

SBI EXPECTS CRR CUT BY 1%

FM EXPRESSES CONCERN OVER BAD LOANS OF SBI,CBI,UCO

1.    NEWS :- INDUSTRIAL OUTPUT GROWTH is virtually at stand still, indicated by the April figures.FM says, he is disappointed. Production of capital Goods contracted 16.3% in April, the second successive month of decline.

VIEWS :- While Industrial output growth reflects current sluggishness, contraction of capital Goods production reflects future slow down prospects. Government and RBI have to do a LOT to stop this downhill run. This blog has suggested a 3% Rate cut and sticks to it. Last year, RBI had enhanced Rates much beyond this level – whose results, combined with Government’s policy Paralysis – is what we are witnessing now. These can be reversed. But, firm, strong measures are needed.

2.    NEWS :- GOVT NEEDS a reboot, say Murthy and Premji

VIEWS :- These views are widespread. Government is not making efforts to move with enabling legislation – by making peace with opposition, Team ANNA+RamDevji combine etc. Instead, it is always in a fighting and retributive mood. 

If Team Anna is swaying towards Politics, it is largely the fault of the Government, which did not make any serious attempts to pass the Lok Pal Bill. If they are criticizing the Government, please look at the people within Congress who start the words of war first from congress’ side. And, why lodge so many cases the moment some one  criticizes? Even Industry is unwilling to talk, even when suffering.

But when Industry captains like NRN Murthy, Premji and Naresh Goel have spoken this way- the good thing that Government can do is – to invite them, discuss with them, and see their point of view. Government must act in overall public interest – but in recent past, it has been blindly following measures to enhance immediate revenues, even if it kills the Industries and growth.

India must encourage rational, issue based criticism much, much more than at present. Yes. Individual based criticism must come down. But, if Individual is responsible for corruption, black money etc there seems to be no other way.

The lack of adequate consumer organizations in sectors like Telecom and Airlines ( and possibly railways, roadways etc ) is highlighted in current imbroglio. Their voice is never audible at all.

3.    NEWS :- SUNDARAM FASTENERS SET TO GROW FURTHER :-The company is upgrading its technology well and is expecting Growth to come – well in coming days.

VIEWS :- Even with sluggish domestic Auto market conditions expected in FY 2013, Sundaram Fasteners can do well, especially in its Export Market of US, which has grown by 50%. If Government does perform better in FY 2013 as FM says, it will be a great story for Sundaram. The increase in Petrol / Diesel prices when international prices go up – and then, not decreasing them, when they go down – is a dampener at the moment. But, things could improve. Hope, FM stays as FM – to implement his promises.

4.    NEWS :- VENUS REMEDIES GETS US PATENT :- The company has received a PatenT from US Patent office for an anti-biotic product that targets drug resistant infections.

VIEWS :- Venus Remedies has been bagging Patents from different countries regularly. It is graduating into a Great innovator and all that it needs to do now – is to commercialize its drugs with the same efficiency. It seems to have Great future.   

5.    NEWS :- SBI EXPECTS CRR CUT BY 1%.

VIEWS :- SBI Hopes for CRR Rate cut by 1% is good. But, its view that Rate cut is more symbolic and not very substantial is not correct. If it was more symbolic, why did RBI raise them so high every month last year? Rate cut reduces the COST OF CAPITAL for all Industries – and thereby enhances Return on capital and that is what matters right now.  Capital Goods Production is falling by a huge percentage. Therefore, Rate cut of sufficient magnitude is a Must now. Even the FM has expressed his hopes for it. Yes. CRR cut also is a good addition to Rate cut – but not an alternative to it.

6.    NEWS :- FM EXPRESSES CONCERN OVER BAD LOANS –especially at SBI,CBI, UCO;

VIEWS :- It is good that FM has expressed concern. It is necessary that the Big Banks look at the total Industry perspective when they look at Bad loans of the individual companies. They must report on Industries / Individual companies which have Negative outlook to Government, with what they feel as suitable measures to keep them in good health. A stitch in time saves Nine.

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NEWS & VIEWS TODAY = 12th, JUNE, 2012 = S&P WARNS OF DOWNGRADE = TELECOM & AIRLINES INDUSTRIES NEED IMMEDIATE REMEDIAL STEPS = FM SAYS- TURNAROUND THIS YEAR

NEWS & VIEWS TODAY

12th, JUNE, 2012

S&P WARNS OF DOWNGRADE

TELECOM & AIRLINES INDUSTRIES

NEED IMMEDIATE REMEDIAL STEPS

FM SAYS - TURNAROUND THIS YEAR

RBI MUST GO FOR GOOD RATE CUT

1.    NEWS :- When S&P talks, Nations listen. S&P presents FACTS and its considered opinions. But, it is not always in a hurry. It takes time, watches and then puts on record its perceptions and its ratings. And that is happening. S&P is to downgrade INDIA to BBB- with Negative outlook, while all other BRIC countries retain their BBB Stable outlook and china has a AA- with stable outlook.

VIEWS :- Indian Governments – both Central and States – are unwilling to follow sound governmental ethics and that is resulting in Indian economy hurtling downwards month after month. The Centre’s UNPRODUCTIVE SCHEMES like NREGS are more than matched by many states, which give huge doles, even when they have no money for any worthwhile capital expenditure, which only can build the states in the long term. 

There is no adequate willingness to infuse productivity into this otherwise imaginative scheme. By all means, reach out to the poor, but make them BUILD something good - for themselves and for the nation. Money should never be a dole or charity.

Populism reaches ridiculous heights in many states – and the lack of economic education among people and the consequent lack of realization – that these populist schemes are destroying the state – make the people elated about the populist schemes. This is unfortunate. 

There is no worthwhile criticism of these schemes. And, if someone does criticize, the governments use their Party muscle in all sorts of unfair ways. Governments at  centre and states are turning to undemocratic means to gag criticism. Look at the way the centre tried to slap cases against all members of Team Anna and Ram Devji – after their absolutely peaceful protest against corruption and Black Money. Look at the way Mamata  Banarjee tried to brand simple questioners as CPM, Naxalites etc in an open TV show. This sort of intolerance does not augur well for democracy.

Centre had a golden opportunity to get the Lok Pal Bill passed and walk away with credits. Even now, it is so. It must only withdraw all cases, stop its Digvijay singhs from initiating wars of words frequently, and go ahead with passing of Lok Pal bill with some understanding and give and take with at least the BJP. Heavens will not fall to the ground if BJP’s views are accommodated in Lok Pal Bill. 

Bills like Land acquisition Bill – with Pro Landowner clauses can be introduced and passed in a day or two – but, it is not even being introduced. And, the Pro land owner mindset is missing. You will deprive some one of his livelihood – and do not want to compensate him adequately? Why? Industry can bear the cost. After all, land cost is a small fraction of the total land cost. And, it is better to get it quick without future hassles rather than too cheap.

Ditto with Telecom tangle. Government’s thinking is likely to kill the industry ( and the telecom consumers) with astronomical licence fees – simply being unable to answer the CAG. Even here, there is no willingness to consult SC and CAG and place before them Government’s own views and consumers’ interests. 

Also, there is no willingness to consult the Opposition. Why? And, the point of wonder is – there is NO SIGNIFICANT REPRESENTATIVE OF CONSUMER INTEREST IN TELECOM! No one sees anybody representing consumers – before the Supreme Court, before Government, before TRAI, before DOT and in the Media! Absolutely surprising. 

Ditto with Airlines Industry. This blog has always maintained that reducing the taxes by at least 50 % is the key to salvage the industry. Now, Jet Airlines Chief Naresh Goyal says just the same thing. He says “ in fact, Indian fares are 200-300%,higher compared with world’s other carriers, let alone the Chinese”, and he says India is the only country to impose service tax on Airlines. The taxation is India is much higher than in China and many other countries. Air India, King fisher, Jet and all other Indian Airlines can be in good health, if only Government reduces taxes of all kinds – on the Airlines Industry. 

Even the Air Port and other ground level support charges are ridiculously High in many Indian Air Ports. The IATA chief, Tony Tyler has heavily criticized India for having trebled airport charges – with a 346% increase in Delhi. And “Delhi Airport has to pay 46% of its revenues to Government. This is neither in the interest of the Airlines nor of the Airport”, the IATA chief has said. This is so at all Air Ports. The Air Port should make revenues from VOLUMES – not from dwindling numbers of INDIVIDUALS. It is unwise. Ditto goes for Governments.

The Government must take a comprehensive look at all these points and make corrections. The idea should not be MAXIMUM REVENUE  for Government, but maximum number of Indians travelling by Air. If this is ensured, revenues will flow in automatically.

The trouble with Industry bodies in India is – they too don’t talk openly till it is too late. 

And that has a lot to do – with Government’s mindset – of not tolerating criticism.  Criticism is Good – if you listen to it. Bill Gates is famous for his sane words on this.

The need for consumer bodies is more than highlighted for each of these Industries.

The Finance Minister says – Turn around this year. He has listed a few factors, the first being Rate cut. One wishes, RBI does go for a GOOD RATE CUT to spur growth, as FM says optimistically.  RBI acted so fast in enhancing Rates every month  last year– like never before since Independence perhaps. Now, it is slow to bring Rates down in the same speed - when growth is getting pulled down drastically every month. A good 3% Rate cut would propel growth upwards fast.

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NEWS & VIEWS TODAY = 07th, JUNE, 2012 = MODI – THE MAN FOR PROGRESS = FDI IN PHARMA = HEWLETT PACKARD'S WOES COAL & IRON PRICES ARE SOFTENING = BUT WHAT ARE THE PLANS OF COAL INDIA & NMDC?

NEWS & VIEWS TODAY

07th, JUNE, 2012

MODI – THE MAN FOR PROGRESS

FDI IN PHARMA

HEWLETT PACKARD'S WOES

COAL & IRON PRICES ARE SOFTENING 

BUT WHAT ARE THE PLANS OF COAL INDIA & NMDC?

1.    NEWS :Today’s ET is about Modi. The Headlines are so. The interview with Modi is, as usual, reflective of his clarity of purpose.

Some of his statements are here : 

Iron ore is available in abundance in Odisha. But.. the centre is are opposing entry of steel companies into the state. They don’t want the state Government to perform and they place hurdles. This is naturally making the investors jittery…

…the centre went to the extent of unleashing enforcement agencies on those who promised investments in Gujarat at the vibrant Gujarat meet…

In 2012, we plan for 2015….Gujarat which accounts for 5% of the country’s population, accounts for 16% of the nation’s industrial production and 22% exports…

The Government has no business to be in business. It should play the role of a facilitator…

Country can progress only if we end Red Tapism…

….No Red Tape, only Red carpet  is my policy towards investors…

How can a state which has above 10% Growth in agriculture be seen to be having a bias towards big business?... Mind you, the national average.. is only 3%.

More than 70% of jobs in India are created by my Government…And that is made possible through a decent delivery mechanism..

I am busy making things better in Gujarat. I am 100 % involved in it…I never spare time for issues outside Gujarat..

The past 10 years have been the first riot free decade in the past 400 years. Look at the recorded history of the state from 1736 and you will see riots breaking out at regular intervals..Has any one heard of even curfew being imposed in any town of Gujarat in recent years?

I have picked up statements which I liked most..The readers may like some others..some readers may like nothing at all…depending on their mindset…

I have no doubt that this man is the MOST EFFICIENT CHIEF MINISTER – in any Indian state, though some more contenders are coming up. Putting an end to Red Tapism is putting an end to corruption too…almost so. Some statements may sound like exaggerations.. they may be.. But, he is entitled to make such statements. Be it agriculture or be it Industry..both are flourishing in Gujarat. The only things not flourishing in Gujarat today are – Corruption, red tape, and riots. 

But, Modiji, some like the Tamilnadu CM are intently studying your methods – and could be serious contenders for the top slot in Efficiency soon. Nitishji is another serious contender – but, I only wish, he drops his unnecessary communication gap with you, and others.

We are yet to assess Akhilesh yadav, Mamata etc – for their performance. There has to be a race for progress among states.

But what could be Modi’s weaknesses? I perceive a slight isolationism even within Modi’s own party. It is time Modi reduces his own communication Gap with his Party central leadership – but, the BJP central leadership must make more efforts towards this end too. 

There is a section which still spreads the canard of anti Muslim bias. While one agrees with Modi’s policy of no bias, no partiality towards any Group – yet, A CM must adhere to Raja Dharma of Lord Ram. Manifest your love towards all – in many ways and see that people see it and understand it. Honour Dr.Abdul Kalam, who is the favourite of Both Vajpaee and Advani. Honour Amir Khan, the one serious film maker, who is so nationalistic in his ventures. Honour the best of Muslims (entrepreneurs, poets, artistes and so on) from Gujarat itself – even as part of honouring all other best of Gujaratis.

So,…India needs over 24 Modis – one in each state (each with a different name, like JJ, NK etc)- who are constantly focusing on the progress of their states…and who play less Politics… 

If there are 120 jobs for 100 people in the state – will you still need Reservations for Minorities or even for SC,ST and BCs? These dividers will vanish on their own – if we get these 24 Modis.

2.    FDI IN PHARMA :The  party in Government must always be constantly on the look out for improvements in Government functioning. When it does this – it can always find  areas for significant improvement. Government has formed an inter-ministerial panel – for finalizing Guidelines for FDI in Pharma sector. In my view, Pharma  sector needs no more than 49% of FDI – especially in existing companies. Green field Investments are a different thing. One can go up to 51% there. But, Government needs clarity of thinking in respect of FDI in Pharma sector. Government must insist on a minimum of 25% public participation in every Pharma company (allopathy or ayurvedic) with a capital of over Rs.50 crores. 

In other words, these must always be LISTED COMPANIES. De-listing must not be permitted and 25% public participation must always be there in such companies – especially in a sector like PHARMA – wherein public purpose, is very significant and sensitive. There must be independent directors – and prices must be subject to scrutiny of regulators. Some foreign companies especially are prone to price their products sky-high, much beyond the reach of the ordinary patients who need them. Indian Market is Huge and export market for Indian pharma products is much more so. A 49% FDI is good enough attraction to be offered to Pharma companies.

Any way – Government needs kudos – for initiating a process which can bring much needed FDI and better technologies too.

3.    HEWLETT-PACKARD : HP is a Huge Fortune 500 company – and is in trouble. It is laying down big numbers of work force. Its New CEO, Meg Whitman says, reviving HP will be challenging. Will it come back on to the track or will it slide down still – is anybody’s guess.

4.    COAL PRICES & IRON ORE PRICES : These are coming down in international Markets. COAL INDIA however is not becoming any more efficient. Government must appoint sufficient number of INDEPENDENT DIRECTORS from user Industries on to the COAL INDIA BOARD. 

Since NMDC’s iron ore prices are likely to be higher, Indian steel companies may now have option to import the ore at cheaper cost. Why can’t NMDC and Coal India supply adequate quantity at more reasonable prices? 

In the mean while, India imports what is available in India in Plenty!

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