Thread: Indian Economy

LG eyes Rs 9,000cr turnover

LG Electronics India Pvt Ltd (LGEIL) has targeted a turnover of Rs 9,000 crore in the current calendar year.

In 2005, the company recorded a turnover of Rs 7,500 crore, according to Kwang Ro Kim, managing director of LGEIL.

The company plans to scale up its revenue by addressing the needs of the domestic market for electronics, white goods and home appliances and introduce new premium products in these segments.

Addressing a press conference on the sidelines of launching their mobile phones and refrigerators, Kim said that with the launch of four new handsets, the company has 12 GSM models available in the market and is planning to launch 18 handsets by the end of the year. With this, the company expects to further consolidate its position in the GSM handset market.

LGEIL intends to sell 50 lakh CDMA handsets this year as against 30 lakh handsets sold in 2005. It has targeted 12 lakh GSM handsets to be sold this year as against 4 lakh GSM handsets sold last year.

“We are looking at achieving a turnover of Rs 147 crore in the GSM segment and Rs 280 crore in the high-end home appliance segment respectively in the southern market,” said P V M Rao, regional manager- South, LGEIL.

The refrigerator that has been introduced is targeted at the top end of the market priced at Rs 1.30 lakh with 715 litre capacity. Currently, LGEIL has a market share of seven per cent in the handset market and close to 40 per cent in the refrigerator market. The company plans to double its market share in both the segments by the end of this year.

LG would open up a plant in the South, probably in Hyderabad or Chennai in three years for manufacturing its products. It has already set up a plant in Pune for manufacturing GSM mobile handsets.

On the export front, the company recorded a revenue of $ 140 million last year and has targeted a $ 200 million revenue in 2006, Kim added.

Hello India! Get connected at one rupee a minute

New Delhi: Last year, Union Communications Minister Dayanidhi Maran had unveiled his vision for ringing in the 'One-India' rates for local and long-distance calls, treating the entire country as a single market, by the Republic Day of 2006.

He may have missed the deadline, but the news is still welcome. On Friday, state-owned telecom majors BSNL and MTNL announced the decision to have single uniform rates for long distance calls across the country.

Beginning March 1, STD calls across India will cost Re 1.

The decision was announced on Friday after a meeting between the telecom giants.

This landmark slash in the rates is part of the One-India programme launched by the two telecom giants.

The new STD call rates are the lowest in Indian telecom history. It also means a a mammoth cut of 60 per cent from the current highest rate of Rs 2.40 per minute.

There has been a marked dip in the call rates within the last five years, given the fierce competition between mobile companies and BSNL. In 2001, the rate was almost 10 times higher than the current one - at Rs 24 per minute.

In December 2001, BSNL had cut STD tariffs for the first time by almost 60 per cent.

However, even then, calls above 500 kms cost Rs 9 per minute.

The big revolution came in 2003 when the telecom regulator made incoming calls free on mobile phones.

Soon, the mobile operators began competing with landline phone companies who responded by slashing STD tariffs to Rs 2.99 per minute.

BSNL responded by brining down its STD tariff by a huge 47 per cent. The highest one had to pay for an paid for a STD call was down to Rs 4.80 per minute.

As competition from mobile companies became fiercer, BSNL was left with no choice but to slash the rates further to a record Rs 2.40 per minute in 2004.

The latest slash will bring into effect the lowest-ever rate for an STD call.

Speaking of economics and development, Hyderabad has been chosen for this 3 billion USD fab city project.

IN other news the planning comission has labeled Maharashra a "failed state" because it is lagging in all economic indices.

New wave of outsourcing arrives in India

Homo technologicus dug up in India
February 8, 2006

Techno-outsourcing reaches a fresh level of development as India's professionals start working long distance for Western companies, writes Amrit Dhillon.

ON THE evolutionary scale, if call centre work represents homo erectus, the Indian outsourcing industry has leapt to the "skilled hunter" stage with what is known as "KPO" (knowledge process outsourcing). This is work that requires much more talent and skill than does answering phone calls or making telemarketing calls.

The "second wave" of outsourcing from the West is under way. This time, qualified professionals - engineers, biotechnologists, accountants, architects, radiologists and lawyers - from all over India are working long distance for Western companies.

Unlike call centre workers, these professionals are not dying of boredom as they follow a prepared script for taking queries from British or US customers about phone bills, credit cards or bank balances. That is because their work is neither routine nor repetitive. The work being done in this new chapter in India's outsourcing story is financial research and analysis, equity research, insurance underwriting, maths tutoring, conceptualising graphics for computer games, designing shopping centres, editing books, and analysing scans to diagnose medical injuries.

Arjun Kalyanpur employs 60 radiologists in Bangalore for the diagnosis of emergency patients wheeled into 50 hospitals across the US. From heart attacks to blocked arteries, they scrutinise the 150-200 scans sent to them during the night shifts in American hospitals when radiologists are scarce.

Teleradiology Solutions charges $100 for every report, a fraction of the cost of an American radiologist. "A hospital is a 365-day business. American hospitals can't find radiologists prepared to work night shifts. Apart from that, our diagnosis is done during the day and it tends to be more accurate than diagnosis done at night," says Dr Kalyanpur, who is now eying the European market.

At the other end of the country, in Noida, a New Delhi suburb, Michael Jansen, chief executive of Ananta Online Graphics Studio, is waiting for a call from a top British architect's firm. They'll be discussing the client's latest projects - a 3700-square-metre mansion for an Indian millionaire in London and a 60-storey skyscraper in Beijing.

A team of 175 architects, engineers and graphic artists is working on building a hi-tech planetarium in the US, a formula one race track in Dubai and a shopping complex in Shanghai.

Whenever the client abroad needs help with design or a technical problem, Jansen gets a call and puts his team on the job. Thanks to Ananta's special in-house software, both parties have simultaneous access to project reports.

"We're currently executing 54 projects across the world. It's great for my staff because they get a chance to work on the kind of project that isn't happening in India and they get exposure to international work practices," says Jansen.

For such reasons KPO work is a powerful incentive for Indian graduates. Given the greater qualifications and talent required - this work demands judgement and high skills - they are also paid about 60 per cent more than workers in more "traditional" business process outsourcing (BPO) firms.

"In this area, professionals are not just following prescribed rules or feeding in data. They need to exercise their judgement and interpret data too," says industry analyst Ashutosh Sinha.

A Confederation of Indian Industry report pegs the potential size of KPO at $17 billion by 2010. Other estimates suggest there will be 250,000 jobs in this sector by 2010. It's believed that about 30,000-50,000 people are already working in this field.

In the first wave of outsourcing about five years ago Western companies began farming out their back office work and call centre business to India. It provoked sneers among workers in Britain and the US about Indians working as "techno-coolies" or "cyber-coolies". No term could be more off the mark than "coolie" for the high-end work being done these days. The range of work is extraordinary and demonstrates the truth of a remark made by Nandan Nilekani, CEO of software giant Infosys Technologies, that "everything you can send down a wire is up for grabs".

"This is just the start. I reckon there are 100 or more areas of work that can be outsourced that no one has even thought about yet. The question is whether we have the ability to deliver," says Joseph Sigelman, co-CEO of Office Tiger, a Madras-based outsourcing firm that specialises in sophisticated financial analysis for global clients.

The range is dazzling. In Mumbai, a KPO company sets up new retail outlets for university sportswear in the US, supervising every last detail down to the waste bins and light bulbs being in the right places. Also in Mumbai, a company employs 30 editors to clean up the English in all sorts of documents ranging from academic papers and jargon-ridden technical articles to surveys on the habits of Japanese housewives.

But a large chunk of the KPO work is going to be in legal services.

Analysts estimate that about 35,000 lawyers' jobs will move from the US to countries like India in the next five years. Of these, about 60-70 per cent are expected to come to India.

The reasons are obvious. Law firms in the US charge about $400-$450 per hour. An Indian lawyer can do the same work for $75-$100 an hour.

http://www.smh.com.au/news/technolog...074226778.html

Siemens to expand in South India

The Siemens Group has announced its intent to expand aggressively in South India over the coming years. The group, which provides industry and infrastructure solutions in India with business aggregating around Rs 5,400 crore, said that South India is a critical part of its operations and this is being strengthened.

Announcing this on the occasion of Siemens completing 50 years of manufacturing in India, Siemens Ltd MD J Schubert said, “Bangalore operations are key for us. This city alone constitutes about one-third, about 4,600 employees, of our total employee strength. The southern region constitutes about 45 per cent of the total employee strength, which is about 5,500 employees. Our operations in the region are being strengthened across all the businesses and will grow even more in the times ahead.”

Apart from the manufacturing base for its automotive sector and servicing workshop for industrial turbines, Bangalore is a hub for telecom, medical and automotive software development and high-end R&D.

Schubert further added that Siemens’ Indian operations are growing in stature and it has become the main resource hub and the centre of competence for high-frequency X-ray machines and outdoor vacuum circuit breakers respectively.

Siemens India is also ramping up its software service business out of Bangalore.

“We are putting up a new tower beside our existing facility in Electronic City which has a capacity to house 1,000 developers. This will be in addition to the 2,000 we already have here in Bangalore. This facility should be ready by April this year,” a spokesperson for Siemens India added.

The software business generates close to Rs 650 crore, of which close to 16 per cent is from the Indian market.

4 new low-cost airlines waiting in the wings

Bangalore-based Air One, feeder carrier Jagson Airlines, Chennai’s Premier Air and East West Airlines will cruise into the domestic skies to compete with other existing players.

Four new low-cost carriers will join the race to grab a slice of the swelling domestic air passenger market in the country in three to four months.

Bangalore-based Air One, feeder carrier Jagson Airlines, Chennai’s Premier Air and East West Airlines will cruise into the domestic skies to compete with other existing players.

Air One, consisting of former employees of Indian (formerly Indian Airlines), will be the first carrier to take off. The launch flight will be between Bangalore and Delhi after which the third Bangalore airline company (following Air Deccan and Kingfisher Airlines) will spread its wings to Mumbai and prominent cities in south India.

Air One boss K W Lobo wanted to launch the airline in February but it has been postponed for a while. “We will start in any case before March 17,” the airline’s managing director told Deccan Herald. The budget carrier with low frills will operate initially with two ERJ-145 and plans to increase the fleet to five of the same make within a year. The former Indian employees and a group of businessmen from South India will hold a 74 per cent stake while the rest will be held by the promoters.

East West comeback

East West, which had withdrawn from the Indian skies under a cloud in mid-1990s, is eager to join the sky war. Its director Faisal Wahid, told this newspaper from Mumbai: “We will launch within three months with five leased Boeing aircraft. We will service Mumbai, Chennai, Bangalore, Delhi and Nagpur. Our engineering base will be either in Hyderabad or Bangalore. Later on we will operate to Category II and III (smaller) airports. Basically we will operate to all airports we were flying to earlier.” According to Mr Wahid, the all-economy flights will serve food.

Feeder airline Jagson said it would launch its low-frills service in May with an initial investment of Rs 250 crore and by acquiring 19 Airbus aircraft. The company, which has been flying from Delhi to hill resort destinations in Himachal Pradesh and to Rajasthan, has appointed Uttam Kumar Bose, who earlier headed Air Sahara, as its president and CEO. Delhi-Bangalore will be the launch sector for this airline too.

Jagson plans to lease six Airbus aircraft and connect Delhi, Bangalore, Mumbai, Goa, Kolkata, Jaipur, Guwahati, Patna and Dibrugarh. Jagson now operates three 18-seater planes and two helicopters.

In the next three years, the airline plans to invest Rs 1,500 crore which would be funded through foreign equity ranging between 20 and 40 per cent, Mr Bose said. The airline plans to employ over 800 people in the first year. This figure will jump to 1,400 in the second year and to over 3,000 by the end of the third year.

Meanwhile, Chennai-based construction and real estate development company Premier is all set to launch a new private domestic airline between April and June this year. The no-frills airline, floated by US-based NRIs, will start operations with five leased Airbus A320s connecting all metros from Chennai and later link south Indian cities. Premier will be the second LCC to start from Tamil Nadu — all-business class Paramount Airways was the first to hit the skies in October, 2005.

There is an interesting figure in that article, 70 million Indians earn 18000 or more USD a year, in PPP terms that would be somewhere in the range of 50000~ roughly per annum. This is not middle class in India of course, this is upper middle and up...
http://news.bbc.co.uk/2/hi/business/4662642.stm
HomeNewsSportRadioTVWeatherLanguages

That's a interesting. 70million with salary of $18000 or more a year. It turns out at least $1.26 trillion income for the 70 million people and roughly 1.5 times of India's GDP.

Look at the definition of GDP, its a non issue..


GDP in micky mouse terms is

C+I+G+NX and C=consmpt, in the simplest model C=cY where c is the marginal propensity to consume and is between 0 and 1. So........

India aiming at 500 mn telephone subscriber base: Maran

Barcelona, Feb 14: India could achieve 500 million telephone subscriber base by 2012 going by the current rate of addition of telephones in the country, Communication Minister Dayanidhi Maran said today.

"We will achieve 250 million phones by 2007 and 500 million phones in five years and who knows one billion phones soon after," he told PTI after attending a meeting of GSM Association here.

The current subscriber base stands at around 131 million. Over 32 million new telephones have so far been added during April-January of the current financial year, with five million additions occurring in January alone.

The addition of 32 million phones in April-January period is higher by about 14 million phones than the achievement during the corresponding period of the last year.

With this addition, the tele-density has increased from 8.8 per cent in January 2005 to to 11.7 per cent at the end of January 2006.

Mobile Phones contributed the most. The number of mobile phones (including 20.8 million WLL (M)) as on January 31, 2006 is about 83 million, which is over 63 per cent of the total.

Out of net addition of 32 million phones during the current year, about 31 million were mobile phones -- which accounts for nearly 97 per cent of the total additions.

Airbus & IA rush to deliver plane deal in time for Chirac visit

NEW DELHI, FEBRUARY 16: India and France may be finding it difficult to seal a formal civilian nuclear cooperation agreement but they have got Airbus and Indian Airlines to work overtime to firm up the agreement on the purchase of 43 aircraft so that it can be signed during French President Jacques Chirac’s visit.

With the Prime Minister’s Office leaning on the Civil Aviation Ministry to finalise the agreement, Indian Airlines officials are involved in last-minute negotiations with Airbus Industrie to speed up resolution of pending issues before the French President reaches here on February 19. The deal was cleared by the Cabinet last September, just days before Prime Minister Manmohan Singh went to Paris.

Most details of Indian Airlines’ $2.2 billion purchase of 43 Airbus aircraft were worked out by December but there were some differences over technical specifications on aircraft interiors. Plus legal clauses in the agreement still had to be finalised. The delivery of the first aircraft will be in October and on an average one aircraft will be delivered every month for over the next three years.

Airbus has done well in India having bagged orders for 263 aircraft worth $16.5 billion (including spares) from various airlines in the country. Further, there are plans for it to set up a maintenance, repair and overhaul facility in India to service Airbus aircraft in the region.

Like with the US, India is keen on getting French expertise for setting up a pilot training school and a DGCA training academy. These will be discussed during Chirac’s visit.

On cooperation in civilian nuclear energy, the spokesperson for the Ministry of External Affairs today said that the two countries would sign a declaration. While this will not be legally binding, it will be an elaboration of the areas in which India and France will seek cooperation. This includes French cooperation in building more reactors in India.

However, the text of the document was still in the works with the key element being the reference to international guidelines like those framed by the Nuclear Suppliers Group and IAEA safeguards. The document will lay the foundation for the two countries to enter into a formal agreement once India has obtained necessary exemptions.

Besides this, the two sides will sign a framework agreement for Defence cooperation. This will streamline interactions between the countries and take care of French concern over India’s red tape on finalising Defence deals.

France has been in the forefront of supporting India on other key issues like co-sponsoring the G-4 resolution for expansion of the UN Security Council.

Both sides will discuss scope for further cooperation in international bodies, particularly when the NSG takes up India’s case.

Besides this, India and France will sign an agreement to jointly build a satellite for Europe’s satellite telecommunication project EUTELSAT. An agreement on tourism will also be signed during the visit.

Etihad Air to start direct services to south India

Vedanta to invest $1 bn to set up university

The university will be launched by July 2008.

Vedanta Resources Plc has decided to set up a world-class university, like Harvard, Stanford and Oxford, at an investment of $1 billion.

Chairman Anil Agarwal will contribute a part of the investment and the rest will be managed by the university trust. The university, to be launched by July 2008, will be called Vedanta University.

“Discussions regarding the location are on with 4 to 5 states and a decision will be reached by July,” said Agarwal.

The university will offer courses in a various disciplines such as liberal arts, basic sciences, engineering, medicine and law.

It will also have centres for cross-disciplinary research in areas such as agriculture, information and communication technology, health sciences, rural economics and manufacturing.

AT Kearney has been roped in to program and manage the initiative. For faculty discussions are on with 300 academicians all over the world.

More than 1,50,000 Indian students go abroad every year for higher studies.

“There is an urgent need for wold class universities with multi- disciplinary curriculum and clear research focus to boost the country’s potential as R&D hub,” said Agarwal.

Budget '06: Mobile bonanza coming

New Delhi: This year's budget may ring in some good news for mobile phone users. That is because the government may agree to something which telecom companies have been demanding for quite sometime - reduction in the percentage of revenue share.

This will bring down costs of mobile companies, which may result in lower call charges for mobile subscribers.

Presently, companies pay between 6 and 10 per cent of their revenue to the government, depending on whether they are operating in less profitable areas or highly profitable metros.

Now, the government may bring down revenue share to a uniform 6 per cent or even less.

The budget is also likely to redefine the way companies calculate their annual revenue. It is 'this' revenue on which companies have to calculate the percentage of revenue share to be paid to government.

For example, very few telecom companies provide free handsets along with mobile connections, as is common abroad. If they do so, they have to include the price of the handset in their annual revenue, resulting in a much higher revenue share payment to the government.

Relaxing this norm could mean that you may get a free handsets with a new connection.

Joint MD, Bharti Televentures Akhil Gupta, says, "The telecom industry and Bharti will pass on whatever benefits we get to the consumer."

Telecom companies are also demanding tax exemption, which are on the same lines as those of IT companies.

But what could be the party-pooper is a possible increase in the service tax rate of 10.2 per cent being charged on your phone bill.

Soaring energy demand spark Indian fears
By Karishma Vaswani
Mumbai business correspondent, BBC World Television


Buying a new car in India is an auspicious event.

It is accompanied by much fanfare, pomp and ceremony, and for many Indians it is also accompanied by prayers at a Hindu temple, to ask the Gods to bless the vehicle with safe journeys and accident free drives.


Rising car ownership has boosted energy demand

And since more than a million cars were bought in India last year, Hindu temples have been pretty busy.

More and more Indians are able to afford a car now, as their salaries have risen along with the Indian economy's soaring growth.

Foreign and domestic car firms have been ramping up capacity to meet that demand.

Korean car maker Hyundai says India is one of its fastest growing car markets and is planning to double its production here - in part because its cars are seen as a status symbol in many of the country's top cities.

Ford too is seeing growth in India, having become the fastest growing automotive firm in India in the month of January, beating General Motors, and domestic auto producer Maruti Udyog.

Nation of savers

Frenzied domestic demand is keeping machines at Mahindra & Mahindra's auto manufacturing plant just outside of Mumbai busy.

We used to be a nation of savers, but now we're willing to spend

Dr Pawan Goenka
President of Mahindra & Mahindra's auto sector

Thousands of workers assemble, build and design vehicles here daily, to keep up with the explosive needs of Indian consumers and Indian industry.

Dr Pawan Goenka, president of Mahindra & Mahindra's auto sector, says there are a few key reasons behind the strong demand for consumer items like cars in India.

"We've got a much stronger economy in comparison to 10 years ago. We're growing at 7-8%, and that's made people confident about spending their money.

"The second reason is that we've not got better financing for cars [and] low interest rates.

"Then there's the fact that there are so many more car models to choose from."

Five years ago, there were only a handful of cars available to buy, whereas now there are dozen, Mr Goenka points out.

"And, of course, there's also been a shift in the mindset for many Indians," he adds.

"We used to be a nation of savers, but now we're willing to spend."

Big challenge

Consequently, India's car market is set to grow by 10% this year.

In turn, this has boosted demand for petrol, which - when combined with industrial demand - has sent demand for energy soaring.

India imports almost three quarters of its energy to meet the demands of its population of more than a billion people.

This proportion is set to rise as energy demand is expected to double in the next five years.


Many in India rely on subsidised kerosene for cooking

By 2020, the country may have to import all of its energy needs.

This development poses a big challenge for India, and for its oil companies.

Oil marketing firms like Indian Oil, one of India's biggest oil companies, is in the business of acquiring oil assets overseas, and selling the products in India.

"It's a big challenge ahead," says Sarthak Behuria, chairman, Indian Oil.

"India has to go overseas to find oil.

"The demand is there - we have one of the fastest growing economies right now in the world - but pricing is an issue we must address. Pricing of oil overseas in the international markets is volatile and that's a difficult challenge."

India is already looking overseas for energy.

The country has been in talks with Iran and Pakistan to build a $17bn (£9.8bn) natural gas pipeline from Iran.

Talks are expected to resume between the three nations next week.

But the deal may run into some trouble: The US is opposed to the project because of Iran's participation.

The gas pipeline deal, if it did go through, could be crucial for India's economic development.

India has to buy most of its energy from overseas and the government subsidises most of the oil used by consumers in India.

Had it not done so, oil would have been too expensive for people to buy.

Kerosene, which is used by more than 80% of India's people for cooking and heating their homes, is sold at prices well below market price and the government has vowed to maintain low kerosene prices.

But as global oil prices have been soaring in recent months, and as India's 3% share of global oil demand is set to rise to 10% by 2030, the government may find it an expensive undertaking.

http://news.bbc.co.uk/2/hi/business/4715980.stm